First Amendment to Manufacturing Services Agreement between Patheon Pharmaceuticals Inc., and POZEN Inc., dated as of July 10, 2013

Background: Patheon Pharmaceuticals Inc., (“Patheon”) and Pozen Inc., (“Pozen”) entered into a Manufacturing Services Agreement effective December 19, 2011 (the “Agreement”).  Patheon and Pozen wish to amend the Agreement to incorporate Pozen’s PA81/40 coated tablet Product into the Agreement, to revise the definition of “Commencement  Date” and to clarify that the manufacture of validation batches of Product are included within the definition of “Manufacturing Services” under the Agreement.

NOW THEREFORE in consideration of the premises hereof and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by the Parties, the Parties agree to amend the Agreement as follows:

A.	Amendment to Agreement:

1.

Schedules A-D are deleted in their entirety and replaced with the attached Revised Schedules A-D.

2.

In Section 1.1, the definition of “Commencement Date” is deleted in its entirety and is replaced with the following new definition:

3.

In Section 1.1, the definition of “Manufacturing Services” is deleted in its entirety and is replaced with the following new definition:

"Manufacturing Services" means the manufacturing, quality control, quality assurance, retention of samples, stability testing, packaging, and related services, set forth in this Agreement, required to manufacture Product or Products from Active Materials and Components and to release and deliver such Products to Client and will include the manufacture of validation batches of Product;

  

4.

Section 2.1(f) is deleted in its entirety, and replaced with the following new Section 2.1(f):

Active Materials.  Patheon will provide a monthly order to the Client by the 20^th day of the month, specifying the quantities and delivery dates of the Active Materials required to meet the Client’s orders for finished products.  The Client will place the orders with the Active Material manufacturer specifying that the Active Material should be shipped to Patheon and the invoices sent to the Client for payment.  Patheon will charge Client a handling fee of ***% of the cost of the Active Materials which will be included in the Price for the Products.  All shipments of Active Material will be accompanied by certificate(s) of analysis from the Active Material manufacturer confirming the identity and purity of the Active Materials and its compliance with the Active Material specifications.  Patheon will test all Active Materials in accordance with Patheon’s then current standard operating procedures.

 

5.

Section 2.2(a) is revised to include the following two new sentences at the beginning of the section:

“The inventory calculations performed in this Section 2.2 will be a combined yield for the two product strengths.  Individual Target Yields may be required based on actual manufacturing experience, and therefore require a modification to the calculation.”

6.

The word “validation” is deleted from the last sentence of Section 2.2(a) Active Material Yield, Reporting, Quantity Dispensed, and from Schedules H and I, footnote 1.

7.

In Section 13.6(b), the second sentence is deleted in its entirety and is replaced with the following sentence:

“But Client will give Patheon prior written notice of any assignment and any assignee will covenant in writing with Patheon to be bound by the terms of this Agreement.”

B.	No Other Modifications.  The “Background” section of this document is incorporated into the Amendment.  Except as modified by this Amendment, the terms and conditions of the Agreement remain unchanged.

IN WITNESS WHEREOF, the Parties have caused this First Amendment to be duly executed by their authorized representatives, effective as of ___________, 2013.

 

POZEN INC.			PATHEON PHARMACEUTICALS INC.
By:	/s/ John R. Plachetka		By:	/s/ Francis P. McCune
Name:	John R. Plachetka		Name:	Francis P. McCune
Title:	Chairman, CEO & President		Title:	Secretary

 

Pricing includes the cost of *** and ***.

 

7ct. Bottles w/Carton (Single Tip Tooling)

 

30ct. Bottles (Single Tip Tooling)

 

500ct. Bottles (Single Tip Tooling)

 

Bulk Tablets (Single Tip Tooling)

 

 

7ct. Bottles w/Carton (Single Tip Tooling)

 

90ct. Bottles (Single Tip Tooling)

 

500ct. Bottles (Single Tip Tooling)

 

 

Bulk Tablets (Single Tip Tooling)

 

 

***7ct. Bottles w/Carton (Multi Tip Tooling)

 

30ct. Bottles (Multi Tip Tooling)

 

 

90ct. Bottles (Multi Tip Tooling)

 

500ct. Bottles (Multi Tip Tooling)

 

7ct. Bottles w/Carton (Multi Tip Tooling)

 

30ct. Bottles (Multi Tip Tooling)

 

90ct. Bottles (Multi Tip Tooling)

Bulk Tablets (Multi Tip Tooling)

 

 

Note: Refer to Campaign Assumptions, for additional detail on the manufacturing and packaging batch campaigns assumed in this pricing.

The following manufacturing equipment train is proposed for PA 81/40mg Coated Tablets.

 

The packaging component specifications have been ***.  *** to the *** *** in *** of the ***.

 

Individual coating pans will be release tested on an individual basis.

 

Pricing includes the cost of *** and ***.

 

The core tablet weight and manufacturing batch sizes proposed by Patheon is summarized in the following table.

 

The following manufacturing equipment train is proposed for PA 325/40 tablets.

·

The manufacturing process at Patheon will follow the process information provided by Pozen and Patheon’s experience with the product.

 

·

The core tablet weight and manufacturing batch sizes for each strength proposed by Patheon are summarized in the following table.

 

·

*** for *** and *** are *** on ***.

 

·

It is *** that the *** would only be required to *** of the ***.  *** can fully *** and this *** can be ***.

 

·

It is *** that *** are *** and ***.

 

·

Each *** has *** to the ***.

 

·

*** has been included on the finished product.

 

·

*** may be subject to change after the *** on *** and ***.

 

·

It is *** that *** are *** and *** after each campaign.

*** and ***

 

***of ***

 

***of ***

 

***

 

*** for *** ***, and *** thereafter

 

*** and ***

 

*** of the ***

 

*** and ***

 

***

 

*** of *** and other *** for ***

 

*** of *** and other *** for *** or *** ***

 

*** and *** of *** and ***

 

*** of *** and *** for ***

 

 

The Active Materials Credit Value will be as follows:

 

Patheon's liability for Active Materials calculated in accordance with Section 2.2 of the Agreement [for any Product] in a Year will not exceed, in the aggregate, the maximum credit value set forth below: