Exhibit 10.2
CONFIDENTIAL
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
Commercial Manufacturing Services Agreement
August 18, 2010

 

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CONFIDENTIAL

          Table of Contents          
ARTICLE 1
    1  
 
       
INTERPRETATION
    1  
 
       
1.1 Definitions
    1  
1.2 Currency
    4  
1.3 Sections and Headings
    4  
1.4 Singular Terms
    5  
1.5 Schedules
    5  
 
       
ARTICLE 2
    6  
 
       
PATHEON’S MANUFACTURING SERVICES
    6  
 
       
2.1 Manufacturing Services
    6  
2.2 API Yield
    7  
2.3 API Receipt and Storage
    9  
 
       
ARTICLE 3
    9  
 
       
PGX’S OBLIGATIONS
    9  
3.1 Payment
    9  
 
       
ARTICLE 4
    9  
 
       
CONVERSION FEES AND COMPONENT COSTS
    9  
 
       
4.1 First Year Pricing
    9  
4.2 Price Adjustments — Subsequent Years’ Pricing
    9  
4.3 Price Adjustments — Current Year Pricing
    10  
4.4 Cost Improvement Program
    11  
4.5 Adjustments Due to Technical Changes
    11  
4.6 Multi-Country Packaging Requirements
    11  
 
       
ARTICLE 5
    12  
 
       
ORDERS, SHIPMENT, INVOICING, PAYMENT
    12  
 
       
5.1 Orders and Forecasts
    12  
5.2 Reliance by Patheon
    13  
5.3 Minimum Orders
    13  
5.4 Shipments
    13  
5.5 On Time Delivery
    13  
5.6 Invoices and Payment
    14  
 
       
ARTICLE 6
    14  
 
       
PRODUCT CLAIMS AND RECALLS
    14  
 
       
6.1 Product Claims
    14  
6.2 Product Recalls and Returns
    16  

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6.3 Patheon’s Responsibility for Defective and Recalled Products
    16  
6.4 Disposition of Defective or Recalled Products
    17  
6.5 Healthcare Provider or Patient Questions and Complaints
    17  
6.6 Sole Remedy
    18  
 
       
ARTICLE 7
    18  
 
       
CO-OPERATION
    18  
7.1 Quarterly Review
    18  
7.2 Governmental Agencies
    18  
7.3 Records and Accounting by Patheon
    18  
7.4 Inspection
    19  
7.5 Access
    19  
7.6 Notification of Regulatory Inspections
    19  
7.7 Reports
    19  
7.8 FDA Filings
    19  
 
       
ARTICLE 8
    20  
 
       
TERM AND TERMINATION
    20  
8.1 Term
    20  
8.2 Termination for Cause
    21  
8.3 Product Discontinuation
    21  
8.4 Obligations on Termination
    21  
 
       
ARTICLE 9
    22  
 
       
REPRESENTATIONS, WARRANTIES AND COVENANTS
    22  
 
       
9.1 Authority
    22  
9.2 PGx Warranties
    22  
9.3 Patheon Warranties
    23  
9.4 Debarred Persons
    23  
9.5 Permits
    23  
9.6 No Warranty
    24  
 
       
ARTICLE 10
    24  
 
       
REMEDIES AND INDEMNITIES
    24  
10.1 Consequential Damages
    24  
10.2 Limitation of Liability
    24  
10.3 Patheon
    24  
10.4 PGx
    25  
10.5 Reasonable Allocation of Risk
    25  
 
       
ARTICLE 11
    25  
 
       
CONFIDENTIALITY
    25  
11.1 Confidentiality
    25  

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CONFIDENTIAL

         
ARTICLE 12
    25  
 
       
DISPUTE RESOLUTION
    25  
 
       
12.1 Commercial Disputes
    25  
12.2 Technical Dispute Resolution
    26  
ARTICLE 13
    26  
 
       
MISCELLANEOUS
    26  
 
       
13.1 Inventions
    26  
13.2 Intellectual Property
    27  
13.3 Insurance
    27  
13.4 Independent Contractors
    27  
13.5 No Waiver
    28  
13.6 Assignment
    28  
13.7 Force Majeure
    28  
13.8 Additional Product
    28  
13.9 Notices
    29  
13.10 Severability
    29  
13.11 Entire Agreement
    30  
13.12 Other Terms
    30  
13.13 No Third Party Benefit or Right
    30  
13.14 Execution in Counterparts
    30  
13.15 Use of PGx Name
    30  
13.16 Governing Law
    30  
 
       
SCHEDULE A
    1  
 
       
PRODUCT LIST AND SPECIFICATIONS
    1  
 
       
SCHEDULE B
    2  
 
       
MINIMUM RUN QUANTITY, ANNUAL VOLUME, AND PRICE
    2  
 
       
SCHEDULE C
    3  
 
       
ANNUAL STABILITY TESTING
    3  
 
       
SCHEDULE D
    1  
 
       
ACTIVE MATERIALS
    1  
 
       
SCHEDULE E
    2  
 
       
TECHNICAL DISPUTE RESOLUTION
    2  
 
       
SCHEDULE F
    1  
 
       
COMMERCIAL QUALITY AGREEMENT
    1  
 
       
SCHEDULE G
    2  

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COMMERCIAL MANUFACTURING SERVICES AGREEMENT
          THIS COMMERCIAL MANUFACTURING SERVICES AGREEMENT (this “Agreement”) is
made as of August 18, 2010 (the “Effective Date”)
B E T W E E N:
PATHEON PUERTO RICO, INC.,
a corporation existing under the laws of the Commonwealth of Puerto Rico
-and-
PATHEON PHARMACEUTICALS INC., a corporation existing under the laws of the State
of Delaware
(collectively “Patheon”),
- and -
PGxHealth, LLC
a limited liability company existing under the laws of the State of Delaware
(“PGx”).
          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 (Patheon and PGx) 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;
“API Credit Value” means the value of the API for certain purposes of this
Agreement, as set forth 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 is controlled by a party to this Agreement,
either directly or indirectly, by stock ownership or otherwise; or

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  (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.
“Annual Report” means the annual report to the FDA prepared by PGx 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 (i) for Patheon, the Laws of the Commonwealth of Puerto
Rico, being the jurisdiction where the Manufacturing Site is located; and
(ii) for PGx and the Products, the Laws of all jurisdictions where the Products
are manufactured, distributed, and marketed as these are agreed and understood
by the parties in this Agreement;
“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;
“Business Day” means a day other than a Saturday, Sunday or a day that is a
statutory holiday (i) if, in the case of Patheon, in the Commonwealth of Puerto
Rico, and (ii) if, in the case of PGx, in the Commonwealth of Massachusetts;
“cGMPs” means current good manufacturing practices as described in Parts 210 and
211 of Title 21 of the United States Code of Federal Regulations together with
the latest FDA guidance documents pertaining to pharmaceutical manufacturing and
quality control practice, all as updated, amended and revised from time to time;
“Components” means, collectively, all 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, other than the API;
“Confidentiality Agreement” means the agreement about the non-disclosure of
confidential information between Patheon and PGx dated October 9, 2008;
“Deficiency Notice” has the meaning specified in Section 6.1(a);
“Delivery Date” means the date scheduled for shipment of Product under a Firm
Order as set forth in Section 5.1(e);
“FDA” means the United States Food and Drug Administration;
“Firm Orders” has the meaning specified in Section 5.1(b);

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CONFIDENTIAL
“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 relating to 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 specifically for the manufacture of the Products but, for
greater certainty, does not include the API;
“Late Delivery” has the meaning specified in Section 5.5;
“Laws” means all laws, statutes, ordinances, regulations, rules, by-laws,
judgments, decrees or orders of any Authority;
“Manufacturing Services” means any manufacturing, quality control, quality
assurance, stability testing, packaging, and related services, set forth in this
Agreement, required to manufacture Product or Products from API and Components
in accordance with the terms and conditions of this Agreement;
“Manufacturing Site” means the facility owned and operated by Patheon that is
located at [*];
“Materials” means all Components, and other materials used to manufacture the
Product other than API;
“Maximum API Liability” means the maximum value of API that may be credited by
Patheon under this Agreement, as set forth on Schedule D;
“Minimum Run Quantity” means the minimum number and size 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, PGx’s API, Product or confidential
information 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 Product(s);
“PGx Intellectual Property” means Intellectual Property generated or derived by
PGx 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, PGx’s
API, Product or confidential information; including, without limitation, rights
in patents, patent applications, formulae, trade-marks, trade-mark applications,
trade-names, Inventions, copyrights, industrial designs, trade secrets, and know
how;
“Price” means the price measured in US Dollars to be charged by Patheon for
performing the Manufacturing Services, and includes [*];
Certain confidential information contained in this document, marked by brackets,
has been omitted
and filed separately with the Securities and Exchange Commission pursuant to
Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL
“Product(s)” means the product(s) listed on Schedule A;
“Quality Agreement” means the agreement set forth in Schedule F between the
parties setting out the quality assurance standards for the Manufacturing
Services to be performed by Patheon for PGx;
“Regulatory Authority” means the FDA;
“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;
“Specifications” means the file, for each Product, attached at Schedule A that
contains documents relating to each Product, including, without limitation:

  (a)   specifications for API and Components;

  (b)   manufacturing specifications, directions, and processes;

  (c)   storage requirements;

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

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

all as updated, amended and revised from time to time by PGx in accordance with
the terms of this Agreement;
“Technical Dispute” has the meaning specified in Section 12.2;
“Territory” means 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 same calendar year, and thereafter
will mean a calendar year.
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.

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CONFIDENTIAL
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
Schedule D
  —   API, API Credit Value, and Maximum API Liability
Schedule E
  —   Technical Dispute Resolution
Schedule F
  —   Commercial Quality Agreement
Schedule G
  —   (Reserved)
Schedule H
  —   Quarterly API Inventory Report
Schedule I
  —   Report of Annual API Inventory Reconciliation and Calculation of Actual
Annual Yield

           Schedules may be modified by the parties as stated herein.

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ARTICLE 2
PATHEON’S MANUFACTURING SERVICES
2.1 Manufacturing Services.
          Patheon will perform the Manufacturing Services for the Territory for
the fees specified in Schedules B and C to manufacture Products for PGx. None of
the Manufacturing Services may be subcontracted by Patheon without PGx’s prior
written consent, except for testing under Article 13.6(a) of this Agreement. The
Product will be manufactured and packaged into bottles at the Manufacturing
Site. Schedule B sets forth a list 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 PGx. Patheon may
change the Manufacturing Site for the Products at Patheon’s cost but only with
the prior written consent of PGx, which consent will be at PGx’s sole
discretion. If Manufacturing Services have not started within [*] 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 manufacturer of at least [*]% of total
number of tablets for use in Product and of at least [*]% of the bottled
Products offered for sale annually by Client in the Territory for the first [*]
Years. Thereafter, Patheon will be the manufacturer of at least [*]% of the
total number of tablets for use in Product and of at least [*]% of the bottled
Products offered for sale annually by Client in the Territory. [*] In performing
the Manufacturing Services, Patheon and PGx agree that:

  (a)   Conversion of API and Components. Patheon will convert API 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 PGx 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 PGx, it will give PGx a certificate of
analysis, certificate of compliance including a statement that the batch has
been manufactured and tested in accordance with Specifications and cGMPs, and,
full Batch Production Records/Lot Packaging Records, including all deviations
and laboratory investigation reports (unless PGx requests a summary Batch Record
and/or Packaging Record). PGx 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. Notwithstanding
Patheon’s interest in the form and style of batch documents, Product related
information contained in those batch documents is PGx property, and PGx may use
that Product related information in any way it sees fit.

  (c)   Components. Patheon will purchase and test all Components (with the
exception of those that are supplied by PGx) at Patheon’s expense and as
required by the Specifications. PGx will have the right to specify the suppliers
for the Components. Patheon shall not change any Component Specifications or
Component suppliers without the prior written consent of PGx.

  (d)   Stability Testing. If requested by PGx, Patheon will conduct stability
testing on the Products in accordance with the protocols set out in the
Specifications for the separate fees and during the time periods to be set out
in Schedule C as necessary. Patheon will

Certain confidential information contained in this document, marked by brackets,
has been omitted
and filed separately with the Securities and Exchange Commission pursuant to
Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL

      not make any changes to these testing protocols without prior written
approval from PGx. If a confirmed stability test failure occurs, Patheon will
notify PGx within one Business Day, after which Patheon and PGx 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 PGx all stability test data and results at
PGx’s request.

  (e)   Packaging. Patheon will package the Products at the Manufacturing Site
as set out in the Specifications. PGx will be responsible for the cost of
artwork development. Pursuant to the Quality Agreement, 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. PGx may, in its sole discretion, make changes to labels,
product inserts, and other packaging for the Products. Those changes will be
submitted by PGx to all applicable governmental agencies and other third parties
responsible for the approval of the Products. PGx will be responsible for the
cost of labelling obsolescence when changes occur, as contemplated in
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)   API and PGx Supplied Components Importing. Until the [*] month
anniversary of the date of commercial launch of Product, at least [*] days
before each scheduled production date, PGx will deliver the API to the
Manufacturing Site DDP (Incoterms 2000) sufficient for Patheon to manufacture
the desired quantities of Product and to ship Product on the Delivery Date;
after such [*] month period, all such deliveries shall be made at least [*] days
before each scheduled production date. [*] But if 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 to be
agreed to by the parties. All shipments of API will be accompanied by
certificate(s) of analysis from the API manufacturer and PGx, confirming the
identity and purity of the API and its compliance with the API specifications.

  (g)   Product Rejection for Finished Product Specification Failure. If Patheon
manufactures Product in accordance with the Specifications, except that a batch
or portion of batch of Product does not meet a finished Product specification
(as provided in (e) of the definition of “Specifications” above), Client will
[*].

2.2 API Yield.

  (a)   Reporting. Patheon will give PGx a quarterly inventory report of the API
held by Patheon using the inventory report form set out in Schedule H, which
will contain the following information for the quarter:

      Quantity Received: The total quantity of API that complies with the
Specifications and is received at the Manufacturing Site during the applicable
period.

      Quantity Dispensed: The total quantity of API dispensed at the
Manufacturing Site during the applicable period. The Quantity Dispensed is
calculated by adding the Quantity Received to the inventory of API that complies
with the Specifications held at the

Certain confidential information contained in this document, marked by brackets,
has been omitted
and filed separately with the Securities and Exchange Commission pursuant to
Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL

      beginning of the applicable period, less the inventory of API that
complies with the Specifications held at the end of the period. The Quantity
Dispensed will only include API received and dispensed in commercial
manufacturing of Products and, for certainty, will not include any (i) API that
must be retained by Patheon as samples, (ii) API contained in Product that must
be retained as samples, (iii) API used in testing (if applicable), and (iv) API
received or dispensed in technical transfer activities or development activities
during the applicable period, including without limitation, any regulatory,
stability, validation or test batches manufactured during the applicable period.

      Quantity Converted: The total amount of API contained in the Products
manufactured with the Quantity Dispensed (including any additional Products
produced in accordance with Section 6.1 or 6.2), delivered by Patheon, and not
rejected, recalled or returned in accordance with Section 6.1 or 6.2 because of
Patheon’s failure to perform the Manufacturing Services in accordance with
Specifications, cGMPs, and Applicable Laws.

      Within 60 days after the end of each Year, Patheon will prepare an annual
reconciliation of API on the reconciliation report form set forth in Schedule I
including the calculation of the “Actual Annual Yield” or “AAY” for the Product
at the Manufacturing Site during the Year. AAY is the percentage of the Quantity
Dispensed that was converted to Products and is calculated as follows:

      Quantity Converted during the Year   x   100%       Quantity Dispensed
during the Year

      After Patheon has produced a minimum of [*] commercial production batches
of Product and has produced commercial production batches for at least [*]
months at the Manufacturing Site, the average yield based on the immediate prior
three months of production will be the initial “Target Yield” [(Quanity
Converted during the immediate prior three months/Quantity Dispensed during the
immediate prior three months) * 100%]. Thereafter the Target Yield will be
recalculated every 12 months as the average of the actual yields of the
immediate prior three months. The Target Yield will be applicable as of the date
calculated.

  (b)   Shortfall Calculation. If the Actual Annual Yield (“AAY”) falls more
than [*] percent below the respective Target Yield in a Year, then the shortfall
for the Year (the “Shortfall”) will be calculated as follows:

      Shortfall = [(Target Yield – [*] * API Credit Value * Quantity Dispensed

  (c)   Credit for Shortfall. If there is a Shortfall for a Product in a Year,
then Patheon will credit PGx’s account for the amount of the Shortfall not later
than 60 days after the end of the Year.

      Each credit under this Section 2.2(c) will be summarized on the
reconciliation report form set forth in Schedule I. Upon expiration or
termination of this Agreement, any remaining credit owing under this Section 2.2
will be paid to PGx. The Annual Shortfall, if any, will be disclosed by Patheon
on the reconciliation report.form.

  (d)   Maximum Liability for API. Patheon’s liability for API calculated in
accordance with this Section 2.2 for any Product in a Year will not exceed, in
the aggregate, [*].

Certain confidential information contained in this document, marked by brackets,
has been omitted
and filed separately with the Securities and Exchange Commission pursuant to
Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL

  (e)   No Material Breach. It will not be a material breach of this Agreement
by Patheon under Section 8.2(a) if the Actual Annual Yield is less than the
Target Yield.

2.3 API Receipt and Storage.
          Prior to performing Manufacturing Services Patheon shall receive API
and store API on behalf of PGx in compliance with the cGMPs and this Agreement.
Within [*] days of receipt of API, Patheon shall verify the quantity, and
identity of all API received and review the documentation related to the API and
shall notify PGx of any discrepancies. Patheon shall store the API under the
appropriate conditions per the applicable cGMPs and this Agreement and shall
keep such API segregated from other materials within its control so as to
maintain the integrity of the API. Except as approved by PGx in writing, Patheon
shall ensure the API is not used or tested by any party not under its direct
supervision and controls and shall only be used by it to provide the
Manufacturing Services.
ARTICLE 3
PGX’S OBLIGATIONS
3.1 Payment.
          PGx will pay Patheon for performing the Manufacturing Services
according to the Prices specified in Schedules B and C. These prices may be
subject to adjustment under other parts of this Agreement. PGx may offset any
amounts owed by Patheon to PGx against amounts owed by PGx hereunder.
3.2 API.
          PGx will at its sole cost and expense, deliver the API to Patheon (in
accordance with Section 2.1(f)) sufficient for Patheon to manufacture the
desired quantities of Product and to ship Product on the Delivery Date. The API
will be held by Patheon on behalf of PGx as set forth in this Agreement. Title
to the API will at all times remain the property of PGx. Any API received by
Patheon will only be used by Patheon to perform the Manufacturing Services.
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 [*], Patheon may adjust the Price effective January 1st of each
Year as follows:

  (a)   Manufacturing Costs. [*] On or about November 1st of each Year, Patheon
will provide PGx a statement setting forth the calculation for the inflation
adjustment to be applied in calculating the Price for the next Year, which
statement must be agreed upon in writing by PGx before becoming effective.

Certain confidential information contained in this document, marked by brackets,
has been omitted
and filed separately with the Securities and Exchange Commission pursuant to
Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL

  (b)   Component Costs. [*] On or about November 1st of each Year, Patheon will
give PGx information about the increase in Component costs which, upon approval
in writing by PGx, will be applied to the calculation of the Price for the next
Year to reasonably demonstrate that the Price increase is justified. But Patheon
will not be required to give information to PGx that is subject to industry
standard obligations of confidentiality between Patheon and its suppliers.

  (c)   Pricing Basis. [*] On or about November 1st of each Year, Patheon will
give PGx 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 PGx that is subject to industry standard obligations of
confidentiality between Patheon and its suppliers.

  (d)   Tier Pricing. [*] The Client will be invoiced during the Year for the
unit price set forth in the Annual Volume tier based on the [*] month forecast
provided in September of the previous Year. Within 30 days of the end of each
Year or of the termination of the Agreement, Patheon will send Client a
reconciliation of the actual volume of Product ordered by the Client during the
Year with the pricing tiers. If Client has overpaid during the Year, Patheon
will issue a credit to the Client for the amount of the overpayment within [*]
days of the end of the Year or will issue payment to the Client for the
overpayment within [*] days of the termination of the Agreement. If Client has
underpaid during the Year, Patheon will issue an invoice to the Client for the
amount of the underpayment within [*] days of the end of the Year or the
termination of the Agreement, as applicable. If Client disagrees with the
reconciliation, the parties will work in good faith to resolve the disagreement
amicably. If the parties are unable to resolve the disagreement within 30 days,
the matter will be handled under Section 12.1.

          For all Price adjustments under this Section 4.2, Patheon will deliver
to PGx on or about November 1st of each Year a revised Schedule B to be approved
in writing by PGx before becoming effective for the next Year.
4.3 Price Adjustments — Current Year Pricing.
          During any Year of this Agreement, the Prices set out in Schedule B
will be adjusted by the parties as follows:
Extraordinary Increases in Component Costs. If, at any time, market conditions
result in Patheon’s cost of Components being materially greater than normal
forecasted increases, then Patheon will be entitled, upon written approval from
PGx, to an adjustment to the Price for any affected Product to compensate
Patheon for the increased Component costs. Changes materially greater than
normal forecasted increases will have occurred if: (i) the cost of a Component
increases 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 increases 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.
Certain confidential information contained in this document, marked by brackets,
has been omitted
and filed separately with the Securities and Exchange Commission pursuant to
Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL
For a Price adjustment under this Section 4.3, Patheon will deliver to PGx a
revised Schedule B and budgetary pricing information, adjusted Component costs
or other documents reasonably sufficient to demonstrate that a Price adjustment
is justified, in order to support PGx approval. Patheon will have no obligation
to deliver any supporting documents that are subject to industry standard
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 PGx’s written approval of the revised Schedule B.
4.4 Cost Improvement Program.
          Patheon and PGx agree to work together to develop cost reduction
initiatives as part of an overall cost improvement program, provided such
program does not involve additional capital or extraordinary costs unless
otherwise agreed to by parties in writing. All net cost savings (net of
implementation costs) realized from the cost improvement program will be [*]. A
“cost reduction initiative” for the purpose of this Agreement will be an
initiative that reduces the internal or out-of-pocket costs incurred by a party
in connection with the performance of its obligations under this Agreement. It
is further agreed by the parties that on-going method improvements developed or
adopted by either PGx or Patheon independently of the other party(ies), will not
be a cost reduction initiative under this section, and there will be no
obligation on such party to share the net cost savings realized from such
improvement with the other party(ies) to this Agreement.
4.5 Adjustments Due to Technical Changes.
          Amendments to the Specifications or the Quality Agreement requested by
PGx will only be implemented following a technical and cost review by Patheon
and are subject to PGx and Patheon reaching agreement on Price changes required
because of the amendment. Amendments to the Specifications or the Quality
Agreement requested by Patheon will only be implemented following the written
approval of PGx. If PGx 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, PGx 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 PGx.
4.6 Multi-Country Packaging Requirements.
          If PGx decides to have Patheon perform Manufacturing Services for the
Product for countries outside the Territory, then PGx will inform Patheon of the
packaging requirements for each new country and Patheon will prepare a quotation
for consideration by PGx of any additional Component costs and the change over
fees for the Product destined for each new country. The agreed additional
packaging requirements and related packaging costs and change over fees will be
set out in a written amendment to this Agreement.
Certain confidential information contained in this document, marked by brackets,
has been omitted
and filed separately with the Securities and Exchange Commission pursuant to
Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL
ARTICLE 5
ORDERS, SHIPMENT, INVOICING, PAYMENT
5.1 Orders and Forecasts.

  (a)   Rolling 18 Month Forecast. When this Agreement is executed, PGx will
give Patheon a non-binding 18 month forecast of the volume of Product that PGx
expects to order in the first 18 months of commercial manufacture of the
Product. For clarity, commercial manufacture excludes the manufacture of Product
validation batches. This forecast will then be updated by PGx on or before the
10th day of each month on a rolling forward basis. PGx will update the forecast
forthwith if it determines that the volumes estimated in the most recent
forecast have changed by more than [*]%. The most recent 18 month forecast will
prevail.

  (b)   Firm Orders for Initial Manufacturing Month. At least three months
before the start of commercial manufacture of the Product, PGx 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 firm written order in the form
of a purchase order or otherwise (“First Firm Order”) by PGx to purchase and,
when accepted by Patheon pursuant to 5.1(d), for Patheon to manufacture the
quantity of the Product. PGx may cancel any Batches from the First Firm Order at
no cost if notice of cancellation is received by Patheon [*] days or more before
the scheduled Delivery Date under the First Firm Order. [*] If the First Firm
Order is changed or adjusted as described above then the initial rolling
18 month forecast will also be adjusted as necessary.

      Firm Orders Thereafter. Before and through the Initial Manufacturing
Month, and on a rolling basis during the term of this Agreement, and on or
before the 10th day of each month, PGx will issue an updated 18 month forecast.
The applicable portions of the forecast shall only become binding upon PGx’s
delivery to Patheon of purchase orders which shall be issued by PGx no less than
(i) 110 days prior to the Delivery Date for bottles and (ii) 90 days prior to
the Delivery Date for bulk packaging (“Firm Order(s)”). Patheon shall
acknowledge Firm Orders pursuant to Section 5.1(d). [*] Firm Orders submitted to
Patheon will specify PGx’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.
Additionally, within 60 days of the scheduled Delivery Date, Subject to the
availability of Components and API, PGx may increase the quantity of any and all
products ordered by up to [*]% over the original order and may change the
Product mix of the order and Patheon will make commercially reasonable efforts
to fulfil such increase or change in Product mix.

  (c)   Three Year Forecast. On or before the 10th day of June of each Year, PGx
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 PGx then anticipates will be required to be manufactured and delivered
to PGx during the three-year period.

  (d)   Acknowledgement of Firm Order. Patheon shall acknowledge Firm Orders by
sending an acknowledgement to PGx within [*] Business Days of its receipt of the
Firm Order. The acknowledgement will include, subject to confirmation from PGx,
the Delivery Date for the

Certain confidential information contained in this document, marked by brackets,
has been omitted
and filed separately with the Securities and Exchange Commission pursuant to
Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL

      Product ordered. The Delivery Date may be amended by agreement of the
Parties or as set forth in Sections 2.1(f) or 5.1(b).

5.2 Reliance by Patheon.
     (a) PGx 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, PGx
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 PGx. Accordingly, PGx 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 PGx 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. PGx will give Patheon written authorization to order Components
for any launch quantities of Product requested by PGx which will be considered a
Firm 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 PGx within six 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 PGx 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 PGx or in third party products manufactured by
Patheon, PGx will receive credit for any costs of those Components previously
paid to Patheon by PGx.
     (b) If PGx 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, PGx will pay Patheon [*] 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 [*] minimum charge per month.
Patheon may ship finished Product held by it longer than 3 months to the PGx at
PGx’s expense on 14 days written notice to the PGx.
5.3 Minimum Orders.
          PGx 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 FCA Manufacturing Site (INCOTERMS
2000) unless otherwise mutually agreed. Risk of loss or of damage to Products
will remain with Patheon until Patheon loads the Products onto the carrier’s
vehicle for shipment at the shipping point at which time risk of loss or damage
will transfer to PGx. Patheon will, in accordance with PGx’s instructions and as
agent for PGx, (i) arrange for shipping to be paid by PGx and (ii) at PGx’s risk
and expense, obtain any export licence or other official authorization necessary
to export the Products. PGx will arrange for insurance and will select the
freight carrier used by Patheon to ship Products and may monitor Patheon’s
shipping and freight practices as they pertain to this Agreement. Products will
be transported in accordance with the Specifications.
5.5 On Time Delivery.

(a)   Patheon and the PGx understand that there may be uncertainties and
necessary adjustments in production schedules during the Initial Manufacturing
Period. The parties agree that they will

Certain confidential information contained in this document, marked by brackets,
has been omitted
and filed separately with the Securities and Exchange Commission pursuant to
Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL

    work together closely to expedite deliveries and manage the scheduling of
the initial Product launch.

(b)   If, after the Initial Manufacturing Period, Patheon is unable to deliver
the quantity of Product ordered under a Firm Order on the Delivery Date not due
to an act or omission by PGx nor a Force Majeure (a “Late Delivery”), PGx will
receive a credit from Patheon for the Late Delivery that will be applied against
the any amounts due by PGx to Patheon. The credit will be [*]% of the Price of
the quantities of Product not delivered by Patheon under the Firm Order on the
Delivery Date [*]. In addition, if [*] or more Late Deliveries occur in any [*]
month period, [*]

(c)   A Late Delivery will not be a material breach of this Agreement by Patheon
for the purposes of Section 8.2.

(d)   Any Late Delivery that has not occurred by the date that is [*] days after
the Delivery Date may have its Firm Order cancelled by PGx, in its sole
discretion with no fees or penalties owed by PGx.

(e)   For clarity, a Late Delivery will not include any delay in shipment of
Product caused by events outside of Patheon’s reasonable control, such as a
Force Majeure Event, a delay in delivery of API or Materials, a delay in Product
release approval from PGx, receipt of non-conforming API or Components supplied
by PGx, or any market driven delays in deliveries from approved vendors.

5.6 Invoices and Payment.
          Invoices will be sent by fax or email to the fax number or email
address given by PGx to Patheon in writing from time to time. Invoices will be
sent when the Product is manufactured and released by Patheon to PGx. Patheon
will also submit to PGx, with each shipment of Products, a duplicate copy of the
invoice covering the shipment. Patheon will also give PGx an invoice covering
any Inventory or Components which are to be purchased by PGx under Section 5.2
of this Agreement. Each invoice will, to the extent applicable, identify PGx’s
Manufacturing Services purchase order number, Product numbers, names and
quantities, unit price, freight charges, and the total amount to be paid by PGx.
Subject to section 6.1(a) herein, PGx will pay all undisputed invoices within
30 days of receipt thereof.
ARTICLE 6
PRODUCT CLAIMS AND RECALLS
6.1 Product Claims.
     (a) Product Claims. PGx 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. PGx will inspect the
Products manufactured by Patheon and review the documentation as set forth in
Section 2.1b 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 PGx’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 PGx, but not after the expiration
date of the Product). Should PGx fail to give Patheon the Deficiency Notice
within the applicable 30 day period, then the delivery will be deemed to have
been accepted by PGx on the 30th 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. Payment for any Product that is the subject of
Certain confidential information contained in this document, marked by brackets,
has been omitted
and filed separately with the Securities and Exchange Commission pursuant to
Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL
a Deficiency Notice shall not be owed by PGx until the determination of
deficiency has been made under Section 6.1(b) hereof.
     (b) Determination of Deficiency. Upon receipt of a Deficiency Notice,
Patheon will have [*] days to advise PGx by notice in writing that it disagrees
with the contents of the Deficiency Notice. If PGx and Patheon fail to agree
within [*] days after Patheon’s notice to PGx 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
or quality assurance consultant, as applicable, 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, PGx 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 PGx will be deemed to have accepted
delivery of the Products on the [*] day after delivery (or, in the case of any
defects not reasonably susceptible to discovery upon receipt of the Product, on
the [*] day after discovery thereof by PGx, but not after the expiration date of
the Product) and PGx will be responsible for the cost of the evaluation.
     (c) Shortages. Claims for shortages in the amount of Products shipped by
Patheon will be dealt with under the same procedure identified in Section 6.1(b)
for determinations of deficiency.
Certain confidential information contained in this document, marked by brackets,
has been omitted
and filed separately with the Securities and Exchange Commission pursuant to
Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL
6.2 Product Recalls and Returns.
     (a) Records and Notice. Patheon and PGx will each maintain records
necessary to permit a Recall of any Products delivered to PGx or customers of
PGx. 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 PGx. “Recall” will mean any
action (i) by PGx 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 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 (iii) PGx 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 PGx, having regard to all applicable laws and regulations.
     (c) Product Returns. PGx will have the responsibility for handling customer
returns of the Products. Patheon will give PGx any assistance that PGx may
reasonably require to handle the returns.
6.3 Patheon’s Responsibility for Defective and Recalled Products.
     (a) Defective Product. If PGx 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 PGx’s account for Patheon’s invoice price
for the defective Products. If PGx previously paid for the defective Products,
Patheon will promptly, at PGx’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 PGx being liable for payment therefor under Section 3.1, contingent upon
the receipt from PGx of all API required for the manufacture of the replacement
Products. For greater certainty, Patheon’s responsibility for any loss of API in
defective Product will be captured and calculated in the API Yield under Section
2.2.

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          (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 the receipt from PGx of all API required for
the manufacture of the replacement Products. For greater certainty, Patheon’s
responsibility for any loss of API in Recalled Product will be captured and
calculated in the API Yield under Section 2.2. If Patheon is unable to replace
the Recalled or returned Products (except where this inability results from a
failure to receive the required API), then PGx may request Patheon to reimburse
PGx for the price that PGx paid to Patheon for Manufacturing Services for the
affected Products. In all other circumstances, Recalls, returns, or other
corrective actions will be made at PGx’s cost and expense.
          (c) Except as set forth in Sections 6.3(a) and (b) above, Patheon will
not be liable to PGx nor have any responsibility to PGx 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
and qualification procedure set forth in the Quality Agreement and
Specifications, (iii) results from a defect in the API or Components supplied by
PGx that is not reasonably discoverable by Patheon using the test methods when
implemented in accordance with 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 PGx of its obligations under this Agreement.
6.4 Disposition of Defective or Recalled Products.
          PGx 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 PGx to return the Products to Patheon. 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, PGx 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.
          PGx will have the sole responsibility for responding to questions and
complaints from its customers. Questions or complaints received by Patheon from
PGx’s customers, healthcare providers or patients will be promptly referred to
PGx. Patheon will co-operate as reasonably required to allow PGx 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 PGx all mutually agreed upon information that will enable PGx to respond
properly 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 PGx.

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6.6 Sole Remedy.
          Except as otherwise set forth herein including 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 PGx’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 hereby appoints 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. The relationship managers
are as follows, or as may be otherwise designated by PGx or Patheon by written
notice to PGx or Patheon, as the case may be, from time to time:
PGxHealth:
Stephen Wald
Vice President, Technical Operations
swald@pgxhealth.com
(203) 786-3437
Patheon:
Migdalia Santiago
Business Manager
Migdalia.santiago@patheon.com
Office: +1 (787) 621-2500 ext. 4275
Cell: +1 (787) 378-7620
7.2 Governmental Agencies.
          Subject to Section 7.8 and the Confidentiality Agreement, 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 Product
communications to and from the agency related to this Agreement.
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 law, at which
time PGx will be contacted concerning the

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CONFIDENTIAL
delivery and destruction of the documents and/or samples of Products. PGx is
responsible for retaining samples of the Products necessary to comply with the
legal/regulatory requirements applicable to PGx.
7.4 Inspection.
          PGx may inspect Patheon reports and records relating to this Agreement
during normal business hours and with reasonable advance notice, but a Patheon
representative must be present during the inspection.
7.5 Access.
          Patheon will give PGx, and its agents or representatives, 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 PGx
to verify that the Manufacturing Services are being performed in accordance with
the Specifications, cGMPs, Quality Agreement and Applicable Laws; provided,
however, that any such agents or representatives must (i) be bound in writing to
obligations of confidentiality to PGx consistent with the terms of the
Confidentiality Agreement (which writing shall be provided to Patheon upon
request) and (ii) not be an employee, agent, or contractor of any business that
is a competitor of Patheon (“competitor” herein meaning any business that
derives the majority of its revenues from the provision of pharmaceutical
manufacturing services). But, with the exception of “for-cause” audits, PGx will
be limited each Year to one cGMP-type audit, lasting no more than two days, and
involving no more than four auditors. [*] The right of access set forth in this
Section 7.5 will not include a right to access or inspect Patheon’s financial
records.
7.6 Notification of Regulatory Inspections.
          Patheon will notify PGx within one Business Day of Patheon’s knowledge
of any inspections, whether scheduled or initiated, by any governmental agency
specifically involving the Products. Patheon will also promptly disclose to PGx
any form 483’s, Establishment Inspection Reports or warning letters or any other
significant regulatory action which Patheon’s quality assurance group determines
could impact the regulatory status of the Products, such disclosure to be
subject to the Confidentiality Agreement.
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 PGx reasonably
requires in order to complete any filing under any applicable regulatory regime,
including any Annual Report that PGx is required to file with the FDA. At PGx’s
request, Patheon will provide a copy of the Annual Product Review Report to the
PGx at no additional cost. Any additional report requested by PGx beyond the
scope of cGMPs and customary FDA requirements will be subject to an additional
fee to be agreed upon between Patheon and the PGx.
7.8 FDA Filings.
          (a) Regulatory Authority. PGx 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 PGx, to the extent consistent with Patheon’s obligations under this
Agreement, to obtain
Certain confidential information contained in this document, marked by brackets,
has been omitted
and filed separately with the Securities and Exchange Commission pursuant to
Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.

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Regulatory Authority approval for the commercial manufacture of all Products as
quickly as reasonably possible.
          (b) Verification of Data. At least [*] days prior to filing any
documents with any Regulatory Authority that incorporate data generated by
Patheon, PGx 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.
          (c) Verification of CMC. At least [*] days prior to filing with any
Regulatory Authority any documentation which is or is equivalent to the FDA’s
Chemistry, Manufacturing and Controls section (“CMC”) related to any Marketing
Authorization, such as a New Drug Application or Abbreviated New Drug
Application, PGx will give Patheon a copy of those portions of the CMC relating
to this Agreement as well as any relevant 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. PGx will
give Patheon copies of all FDA Product CMC filings at the time of submission.
          (d) Deficiencies. If, in Patheon’s sole discretion, acting reasonably,
Patheon determines that any of the information given by PGx under clauses
(b) and (c) above is inaccurate or deficient in any manner whatsoever (the “CMC
Deficiencies”), Patheon will notify PGx in writing of the CMC Deficiencies. The
parties will work together to have the CMC Deficiencies resolved prior to any
pre-approval inspection In the event the parties cannot resolve their
differences on the CMC Deficiencies, PGx shall make such regulatory filings at
its own discretion and own risk as to the matters of difference between Patheon
and PGx.
          (e) PGx 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 PGx 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 PGx.
          (f) Inspection by Regulatory Authorities. If PGx 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 Term.
          This Agreement will become effective as of the Effective Date and will
continue until December 31, 2015, unless terminated earlier by one of the
parties in accordance herewith. The parties may negotiate and/or renew the
Agreement pursuant to mutual written accord.
Certain confidential information contained in this document, marked by brackets,
has been omitted
and filed separately with the Securities and Exchange Commission pursuant to
Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.

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8.2 Termination for Cause.
          (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 8.2(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 is 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) PGx 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 PGx from importing, exporting, purchasing, or selling the Product.
But if this occurs, PGx will still fulfill all of its obligations under
Section 8.4 below.
          (d) Patheon may terminate this Agreement upon twelve months’ prior
written notice if PGx assigns under Section 13.6 any of its rights under this
Agreement to an assignee that is a competitor of Patheon, meaning that such
legal entity derives 50% or more of its revenues from pharmaceutical contract
manufacturing services.
8.3 Product Discontinuation.
          PGx will give at least three 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 for any reason, then:

  (a)   Patheon shall immediately begin in good faith to mitigate all expenses.
    (b)   PGx 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;     (c)   PGx 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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  (d)   PGx 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;     (e)   Patheon will return to PGx
all unused API (with shipping and related expenses, if any, to be borne by PGx);
and     (f)   PGx acknowledges that no competitor of Patheon will be permitted
access to the Manufacturing Site.     (g)   PGx will make commercially
reasonable efforts, at its own expense, to remove from Patheon site(s), within
thirty Business Days, all of PGx’s Components, Inventory and Materials that are
specific to Product (whether current or obsolete), supplies, undelivered
Product, chattels, equipment or other moveable property owned by PGx, related to
the Agreement and located at a Patheon site or that is otherwise under Patheon’s
care and control (“PGx Property”). [*] Patheon will invoice PGx for the storage
charges as set forth in Section 5.6 of this Agreement.

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. 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, 5.6, 8.4, 9.2, 9.3, 13.1, 13.2, 13.3,
13.15, and 13.16, 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 PGx Warranties.
              As of the Effective Date, PGx represents and warrants that, to the
best of its knowledge:

  (a)   Non-Infringement.

  (i)   the Specifications for each of the Products are its or its Affiliate’s
property and that PGx 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
Affiliate’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;

Certain confidential information contained in this document, marked by brackets,
has been omitted
and filed separately with the Securities and Exchange Commission pursuant to
Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.

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  (iii)   as of the Effective Date, there are no actions or other legal
proceedings alleging that any of the Specifications, or any of the API and the
Components, or the sale,         use, or other disposition of any Product made
in accordance with the Specifications infringe Third Party Rights;

  (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 PGx 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 conform to the specifications for the API that PGx 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.

9.3 Patheon Warranties.
             Patheon covenants, represents, and warrants that:

  (a)   it will perform the Manufacturing Services in accordance with the
Specifications, cGMPs, Quality Agreement and Applicable Laws; and     (b)   any
Patheon Intellectual Property used by Patheon to perform the Manufacturing
Services (i) is Patheon’s or its Affiliate’s unencumbered property, (ii) may be
lawfully used by Patheon, and (iii) does not infringe and will not infringe any
Third Party Rights.     (c)   API will not be used for any purpose other than as
contemplated under this Agreement.

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.
             PGx 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

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          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.
     (a) API. Except as expressly set forth in Section 2.2, under no
circumstances will Patheon be responsible for any loss or damage to the API.
Patheon’s maximum responsibility for loss or damage to the API will not exceed
the Maximum API Liability set forth in Schedule D.
     (b) Maximum Liability. Except as set forth on 10.2(a), and except for
claims or damages arising out of Section 10.3 and Section 10.4, each party’s
maximum liability under this Agreement for any reason whatsoever, including,
without limitation, resulting from any and all breaches of its representations,
warranties, or any other obligations under this Agreement will not exceed [*].
     10.3 Patheon.
          Patheon agrees to defend, indemnify, and hold PGx, its officers,
employees, and agents harmless against any and all losses, damages, costs,
claims, demands, judgments and liability to, from and in favour of third parties
(other than Affiliates) resulting from any claim of personal injury or property
damage to the extent that the injury or damage is the result of (a) Patheon’s
negligence, wilful misconduct, or violation of the law, (b) services performed
at the Manufacturing Site, or (c) any breach by Patheon of this Agreement or the
Quality Agreement, or any failure by Patheon to perform the Manufacturing
Services in accordance with this Agreement, the Quality Agreement, 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 PGx, its officers, employees, agents, or
Affiliates.
          If a claim occurs, PGx 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
Certain confidential information contained in this document, marked by brackets,
has been omitted
and filed separately with the Securities and Exchange Commission pursuant to
Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.

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defense of the claim; and (d) at, PGx’s option, permit Patheon to control the
defense and settlement of the claim, all at Patheon’s cost and expense;
provided, however, that Patheon shall not settle any claim under which PGx is
deemed to be at fault without PGx’s prior written consent.
10.4 PGx.
          PGx 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 favour of third parties
(other than Affiliates) resulting from any claim of infringement or alleged
infringement of any Third Party Rights in 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 PGx, 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 or due to Patheon’s breach of this Agreement or the Quality
Agreement.
          If a claim occurs, Patheon will: (a) promptly notify PGx of the claim;
(b) use commercially reasonable efforts to mitigate the effects of the claim;
(c) reasonably cooperate with PGx in the defense of the claim; and (d) permit
PGx to control the defense and settlement of the claim, all at PGx’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 PGx has developed and holds the marketing approval for the
Products, PGx requires Patheon to manufacture and label the Products strictly in
accordance with the Specifications, and PGx, 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
Confidentiality Agreement expires or is terminated prior to the expiration or
termination of this Agreement, the terms of the Confidentiality Agreement will
continue to govern the parties’ obligations of confidentiality for any
confidential or proprietary information disclosed by the parties 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

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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 fails to appoint a
representative within the ten Business Day period set forth above, the dispute
will immediately be referred to the Chief Operating Officer or Chief Commercial
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 fail to reach a resolution under this Section 12.1, the dispute will be
referred to a court of competent jurisdiction in accordance with Section 13.16.
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, PGx hereby grants to Patheon a
non-exclusive, paid-up, royalty-free, non-transferable license of PGx’s
Intellectual Property which Patheon must use in order to perform the
Manufacturing Services.
          (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 PGx’s Product that is the subject of
the Manufacturing Services, will be the exclusive property of PGx.
          (c) All Patheon Intellectual Property will be the exclusive property
of Patheon. Patheon hereby grants to PGx a perpetual, irrevocable,
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use the Patheon Intellectual Property used by Patheon to perform the
Manufacturing Services to enable PGx 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, all PGx Intellectual Property will be owned
by PGx 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 at its sole cost and expense 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. This insurance will have policy limits of not less than [*] for
each occurrence for bodily injury or property damage liability and [*] in the
aggregate per annum. Each party shall also maintain Products and Completed
Operations Liability insurance, either included within the General Liability
policy or a separate policy, with limits of not less than [*] for each
occurrence for bodily injury or property damage and [*] in the aggregate per
annum. If any insurance required herein is written on a claims-made basis, such
insurance shall be required to be maintained for a period of at least [*] years
following its termination. Upon written request, each party will give the other
a certificate of insurance evidencing the above required policies and showing
the name of the issuing company, the policy number, the effective date, the
expiration date, and the limits of liability. All such insurance shall be placed
with an insurer(s) having an A.M. Best rating of at least A-, VIII. The insured
Party will endeavour to further provide for a minimum of 30 days’ written notice
to the insured of a cancellation of the insurance. If a party is unable to
maintain the insurance policies required under this Agreement, then the party
will notify the other party in writing within 60 days of such inability, and the
parties will in good faith negotiate appropriate amendments to the insurance
provision of this Agreement or alternative risk financing 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 PGx 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.
Certain confidential information contained in this document, marked by brackets,
has been omitted
and filed separately with the Securities and Exchange Commission pursuant to
Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.

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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.
13.6 Assignment.

  (a)   Patheon may not assign this Agreement or any of its rights or
obligations hereunder without the written consent of PGx, this consent not to be
unreasonably withheld. But Patheon may arrange for subcontractors to perform
specific testing services arising under this Agreement in accordance with the
Quality Agreement.     (b)   Subject to Section 8.2(d), PGx may assign this
Agreement or any of its rights or obligations hereunder without approval from
Patheon. PGx 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 PGx and the assignee if good
faith discussions do not lead to agreement on amended Manufacturing Service fees
within a reasonable time.     (c)   Despite the foregoing provisions of this
Section 13.6, either party may assign this Agreement to any of its Affiliates or
to a successor to (by merger, stock sale, or other similar transaction) or
purchaser of all or substantially all of its business to which this Agreement
relates, but the assignee must execute an agreement with the non-assigning party
whereby it agrees to be bound hereunder. Patheon shall ensure that any successor
to Patheon’s manufacturing capabilities shall agree in writing to supply Product
to PGx under the terms of this Agreement and otherwise to perform Patheon’s
obligations under this Agreement.

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 colour 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 Additional Product.
          Additional products may be added to this Agreement and the additional
products will be governed by the general conditions hereof with any special
terms (including, without limitation, price) governed by amendments to Schedules
A, B, and C as applicable.

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13.9 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 email or by sending the same by first class mail, postage prepaid to the
respective addresses, telecopy or facsimile numbers or electronic mail addresses
set forth below:
If to PGx:
PGxHealth, LLC
c/o Clinical Data, Inc.
One Gateway Center, Suite 702
Newton, Massachusetts 02458
Attn: Chief Legal Officer
Telecopier No.: 617.663.6458
Email address: mlevine@clda.com
If to Patheon:
Patheon Puerto Rico, Inc.
P.O. Box 31199
Manati, PR 00725
Attention: Legal Department
Telecopier No.: 787.258.1794
Email address: Joanna. Bocanegra@patheon.com
With a copy to:
Patheon Inc.
4721 Emperor Boulevard
Research Triangle Park,
NC 27703
Attention: General Counsel
Telecopier No.: 919-474-2269
Email address: Doaa.Fathallah@patheon.com
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 13.9. 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, Canada, or European Union mail,
postage prepaid or upon receipt, whichever is sooner.
13.10 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.

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13.11 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.
Notwithstanding the foregoing, those certain terms and conditions with an
effective date of September 20, 2006 shall continue in full force and effect
with respect to work performed under such terms and conditions. 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.
13.12 Other Terms.
          No terms, provisions or conditions of any purchase order or other
business form or written authorization used by PGx 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 PGx or Patheon to object to
the terms, provisions, or conditions unless the document specifically refers to
this Agreement and is signed by both parties.
13.13 No Third Party Benefit or Right.
          For greater certainty, nothing in this Agreement will confer or be
construed as conferring on any third party any benefit or the right to enforce
any express or implied term of this Agreement.
13.14 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.
13.15 Use of PGx Name.
          Patheon will not make any use of PGx’s name, trademarks or logo or any
variations thereof, alone or with any other word or words, without the prior
written consent of PGx.
13.16 Governing Law.
          This Agreement will be construed and enforced in accordance with the
laws of the State of Delaware and the laws of the United States of America
applicable therein and 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.

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CONFIDENTIAL
          IN WITNESS WHEREOF, the duly authorized representatives of the parties
have executed this Agreement as of the date first written above.

            PATHEON PUERTO RICO, INC.
      By:   /s/ Francisco R. Negron         Name:   Francisco R. Negron        
Title:   Vice President        PATHEON PHARMACEUTICALS INC.
      By:   /s/ Geoff Glass         Name:   Geoff Glass        Title:   EVP     
  PGxHEALTH, LLC

By PGxHealth Holding, Inc., its sole Member
      By:   /s/ C. Evan Ballantyne         C. Evan Ballantyne        EVP and
Chief Financial Officer        PGxHEALTH, LLC

By PGxHealth Holding, Inc., its sole Member
      By:   /s/ Caesar J. Belbel         Caesar J. Belbel        EVP and Chief
Legal Officer   

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CONFIDENTIAL
SCHEDULE A
PRODUCT LIST AND SPECIFICATIONS
Product List

                  Tablet Strength     Product #   (Mg)   Presentation/Packaging
1
    40     30 ct. Bottle
2
    40     90 ct. Bottle
3
    40     500 ct. Bottle
4
    40     Bulk Packaging
5
    20     30 ct. Bottle
6
    20     90 ct. Bottle
7
    20     500 ct. Bottle
8
    20     Bulk Packaging
9
    10     30 ct. Bottle
10
    10     90 ct. Bottle
11
    10     500 ct. Bottle
12
    10     Bulk Packaging

Specifications
If the Specifications are subsequently amended, then PGx will give Patheon the
revised and originally executed copies of the revised Specifications. Upon
acceptance of the revised Specifications, Patheon will give PGx a signed and
dated receipt indicating Patheon’s acceptance, not to be unreasonably withheld
of the revised Specifications.
[*]
Certain confidential information contained in this document, marked by brackets,
has been omitted
and filed separately with the Securities and Exchange Commission pursuant to
Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.

- 1 -

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CONFIDENTIAL
SCHEDULE B
MINIMUM RUN QUANTITY, ANNUAL VOLUME, AND PRICE
[*]
Certain confidential information contained in this document, marked by brackets,
has been omitted
and filed separately with the Securities and Exchange Commission pursuant to
Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.

- 2 -

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CONFIDENTIAL
SCHEDULE C
ANNUAL STABILITY TESTING
If requested by PGx, Patheon and PGx 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 PGx for this testing.

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CONFIDENTIAL
SCHEDULE D
ACTIVE MATERIALS

      Active Materials   Supplier
vilazodone HCl
  ScinoPharm Taiwan, Ltd.

API CREDIT VALUE
[*]
MAXIMUM API LIABILITY
Patheon’s liability for API calculated in accordance with Section 2.2 of the
Agreement in a Year will not exceed, in the aggregate, the Maximum API Liability
set forth below:
     [*]
Certain confidential information contained in this document, marked by brackets,
has been omitted
and filed separately with the Securities and Exchange Commission pursuant to
Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL
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 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 American Arbitration Act 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:

  (a)   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.     (b)   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.     (c)   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.     (d)   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

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CONFIDENTIAL

      between the parties save this if the existing expert renders his decision
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.     (e)   Final and Binding. The determination of the expert will,
except for fraud or manifest error, be final and binding upon the parties.    
(f)   Costs. Each party will bear its own costs for any matter referred to an
expert hereunder and, in 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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CONFIDENTIAL
SCHEDULE F
COMMERCIAL QUALITY AGREEMENT
[*]
Certain confidential information contained in this document, marked by brackets,
has been omitted
and filed separately with the Securities and Exchange Commission pursuant to
Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.

 

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CONFIDENTIAL
SCHEDULE G
[Reserved]

- 2 -

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SCHEDULE H
QUARTERLY ACTIVE MATERIALS INVENTORY REPORT

     
TO:
  PGxHEALTH, LLC
 
   
FROM:
  PATHEON PUERTO RICO, INC.
 
   
RE:
  Active Materials (“API”) quarterly inventory report under Section 2.2(a) of
the Manufacturing Services Agreement dated • (the “Agreement”)

             
Reporting quarter:
           
 
           
API on hand at beginning of quarter:
      kg   (A)
 
           
API on hand at end of quarter:
      kg   (B)
 
           
Quantity Received during quarter:
      kg   (C)
 
           
Quantity Dispensed1 during quarter:
(A + C – B)
      kg    
 
           
Quantity Converted during quarter:
      kg    
(total API in Products produced and not rejected, recalled or returned)
           

Capitalized terms used in this report have the meanings given to the terms in
the Agreement.

      PATHEON PUERTO RICO, INC.   DATE:                             
                   

Per:

        Name:
        Title:
 

Excludes any (i) Active Materials this must be retained by Patheon as samples,
(ii) Active Materials contained in Product this must be retained as samples,
(iii) Active Materials used in testing (if applicable), and (iv) Active
Materials received or consumed in technical transfer activities or development
activities, including, without limitation, any regulatory, stability,
validation, or test batches manufactured during the month.

 

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SCHEDULE I
REPORT OF ANNUAL ACTIVE MATERIALS INVENTORY RECONCILIATION AND CALCULATION
OF ACTUAL ANNUAL YIELD

     
TO:
  PGxHEALTH, LLC
 
   
FROM:
  PATHEON PUERTO RICO, INC.
 
   
RE:
  API annual inventory reconciliation report and calculation of Actual Annual
Yield under Section 2.2(a) of the Manufacturing Services Agreement dated • (the
“Agreement”)

                     
[*]
                   
 
                   
[*]
      kg     (A )
 
                   
[*]
      kg     (B )
 
                   
[*]
      kg     (C )
 
                   
[*]
      kg     (D )
 
                   
[*]
      kg     (E )
 
                   
[*]
$     / kg     (F )
 
                   
[*]
      %       (G )
 
                   
[*]
      %       (H )
 
                   
[*]
$             (I )
 
(if a negative number, insert zero)          
 
                   
[*].
                   

Capitalized terms used in this report have the meanings given to the terms in
the Agreement.
DATE:                                           
PATHEON PUERTO RICO, INC.
Per:

        Name:
        Title:
Certain confidential information contained in this document, marked by brackets,
has been omitted
and filed separately with the Securities and Exchange Commission pursuant to
Rule  24b-2 of the
Securities Exchange Act of 1934, as amended.