Xyrem Manufacturing Services And Supply 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 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

EXHIBIT 10.50

XYREMae

Manufacturing Services and Supply Agreement

Between

Patheon Pharmaceuticals Inc.

and Jazz Pharmaceuticals, Inc.

Table of Contents

ARTICLE 1 1

INTERPRETATION 1

1.1 DEFINITIONS 1

1.2 CURRENCY 5

1.3 SECTIONS AND HEADINGS 6

1.4 SINGULAR TERMS 6

1.5 SCHEDULES 6

ARTICLE 2 7

MANUFACTURING SERVICES 7

2.1 MANUFACTURING SERVICES 7

2.2 STANDARD OF PERFORMANCE 9

2.3 ACTIVE MATERIAL REPORTS AND QUOTA 9 ARTICLE 3 10 CLIENT'S OBLIGATIONS 10

3.1 PAYMENT 10

3.2 ACTIVE MATERIALS 11 ARTICLE 4 11

CONVERSION FEES AND COMPONENT COSTS 11 4.1 PRICING 11 4.2 ADJUSTMENTS DUE TO TECHNICAL CHANGES 11

ARTICLE 5 12

ORDERS, SHIPMENT, INVOICING, PAYMENT 12

5.1 ORDERS AND FORECASTS 12

5.2 RELIANCE BY PATHEON 12

5.3 MINIMUM ORDERS 13

5.4 SHIPMENTS 13

5.5 INVOICES AND PAYMENT 14

ARTICLE 6 14

PRODUCT CLAIMS AND RECALLS 14


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6.1 PRODUCT CLAIMS 14

6.2 PRODUCT RECALLS AND RETURNS 15

6.3 DISPOSITION OF DEFECTIVE OR RECALLED PRODUCT 16

6.4 CUSTOMER QUESTIONS AND COMPLAINTS 17

6.5 SOLE REMEDY 17

ARTICLE 7 17

CO-OPERATION 17

7.1 QUARTERLY REVIEW 17

7.2 GOVERNMENTAL AGENCIES 17

7.3 RECORDS AND ACCOUNTING BY PATHEON 18

7.4 INSPECTION; AUDIT 18

7.5 ACCESS 18

7.6 REPORTS 19

7.7 REGULATORY FILINGS 19

ARTICLE 8 20

TERM AND TERMINATION 20

8.1 INITIAL TERM 20

8.2 TERMINATION FOR CAUSE 20

8.3 TERMINATION BY THE CLIENT 21

8.4 TERMINATION DUE TO PRODUCT DISCONTINUATION 21

8.5 OBLIGATIONS ON TERMINATION 21

8.6 SURVIVAL 22

ARTICLE 9 22

REPRESENTATIONS, WARRANTIES AND COVENANTS 22

9.1 AUTHORITY 22

9.2 CLIENT WARRANTIES 22

9.3 PATHEON WARRANTIES 23

9.4 DEBARRED PERSONS 23

9.5 REGULATORY APPROVALS 23

9.6 COMPLIANCE WITH LAWS 23

9.7 NO WARRANTY 24

ARTICLE 10 24

REMEDIES AND INDEMNITIES 24

10.1 CONSEQUENTIAL DAMAGES 24

10.2 LIMITATION OF LIABILITY 24


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10.3 PATHEON 25

10.4 CLIENT 25

10.5 REASONABLE ALLOCATION OF RISK 26

ARTICLE 11 26

CONFIDENTIALITY 26

11.1 CONFIDENTIALITY 26

ARTICLE 12 26

DISPUTE RESOLUTION 26

12.1 COMMERCIAL DISPUTES 26

12.2 TECHNICAL DISPUTE RESOLUTION 27

ARTICLE 13 27

MISCELLANEOUS 27

13.1 INVENTIONS 27

13.2 INTELLECTUAL PROPERTY 28

13.3 INSURANCE 28

13.4 INDEPENDENT CONTRACTORS 29

13.5 NO WAIVER 29

13.6 ASSIGNMENT 29

13.7 FORCE MAJEURE 29

13.8 NOTICES 30

13.9 SEVERABILITY 31

13.10 ENTIRE AGREEMENT 31

13.11 OTHER TERMS 31

13.12 THIRD PARTY BENEFICIARY 32

13.13 EXCLUSIVITY 32

13.14 PUBLICITY 32

13.15 EXECUTION IN COUNTERPARTS 32

13.16 GOVERNING LAW 32


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[ * ] = 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 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

MANUFACTURING SERVICES AND SUPPLY AGREEMENT THIS MANUFACTURING SERVICES AND SUPPLY AGREEMENT (the "Agreement") made as of the 13th day of March, 2007, and with an Effective Date and a Manufacturing Commencement Date as set forth below.

B E T W E E N:

PATHEON PHARMACEUTICALS INC. ,

a corporation existing under the laws of the State of Delaware,

(hereinafter referred to as " Patheon "),

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JAZZ PHARMACEUTICALS, INC. ,

a corporation existing under the laws of the State of Delaware, (hereinafter referred to as the " Client ").

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

ARTICLE 1

INTERPRETATION

1.1 Definitions . The following terms shall have the respective meanings set out below and grammatical variations of such terms shall have corresponding meanings:

" Act " means the United States Food, Drug and Cosmetic Act, as amended from time to time, and the regulations promulgated thereunder.

" Active Material " means the active pharmaceutical ingredient listed on Schedule D hereto; " Active Material Reimbursement Value " means the actual cost to Client of the Active Materials for the purposes of Section 10.2(b) of this Agreement as set forth in Schedule D hereto and as may be amended from time to time by the Client to reflect the actual cost of such Active Materials paid by the Client;

[ * ] = 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 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

" 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. For the purposes of this definition, "control" means the ownership of shares carrying at least a majority of the votes in respect of the election of the directors of a corporation. Notwithstanding the foregoing, the owners of preferred stock (or common stock issued upon conversion thereof) of the Client such as financial institutions, venture capital funds and private equity investors will not be its " Affiliates" for purposes of this Agreement;

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

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

" Batch " means a specific quantity of Active Material and Components that is intended to have uniform character and quality, within specified limits, and is produced according to a single manufacturing order during the same cycle of manufacture.

" Bulk Product " means unlabeled bottled and capped Product packaged in accordance with the applicable packaging configurations as set forth in the Specifications and Schedule M hereto which, prior to the Manufacturing Commencement Date, will be packaged in shippers by current supplier of Product and then delivered to Patheon for secondary packaging only;

" Business Day " means a day other than a Saturday, Sunday or a day that is a statutory holiday in the State of Ohio which have been provided in writing to the Client by Patheon;

" cGMPs " means current good manufacturing practices, as applicable, as described in:

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

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

(c) EC Directive 91/356/EEC; and


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[ * ] = 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 406 OF THE SECURITIES ACT OF 1933, AS AMENDED. (d) the latest Health Canada, FDA and EMEA guidance documents pertaining to manufacturing and quality control practice, as updated, amended and revised from time to time and as applicable under the particular circumstances;

" Components " means, collectively, all packaging components, raw materials and ingredients, required to be used in order to produce the Product in accordance with the Specifications, other than the Active Material;

" Deficiency Notice " shall have the meaning ascribed thereto in Section 6.1(a);

" DEA " means the United States Drug Enforcement Administration or its international counterparts.

" Effective Date" means March 13, 2007 unless revised by mutual written agreement of the parties in accordance with this Agreement.

" EMEA " means the European Medicines Agency or any successor European governmental agency performing similar functions with respect to pharmaceutical products;

" FDA " means the United States government department known as the Food and Drug Administration or any successor United States governmental agency performing similar functions with respect to pharmaceutical products; " Firm Orders " has the meaning specified in Section 5.1(b);

" Fully Packaged Product " means the Product packaged in accordance with the applicable packaging configurations as set forth in the Specifications and Schedule L hereto. " Health Canada " means a section of the Canadian Government known as Health Canada and includes, among other departments, the Therapeutic Products Directorate and Health Products and Food Branch Inspectorate or any successor Canadian governmental agency performing similar functions with respect to pharmaceutical products; " Intellectual Property " includes, without limitation, rights in patents, patent applications, formulae, trade-marks, trade-mark applications, trade-names, Inventions, copyright and industrial designs;

" 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;


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" Inventory " means all inventories of Components and work-in-process produced or held by Patheon in connection with the manufacture of the Product but, for greater certainty, does not include the Active Material;

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

" Manufacturing Commencement Date" means a date certain, specified in a written notice from Client to Patheon delivered at least sixty (60) days prior to such date, when Patheon will commence Manufacturing Services to manufacture and package Product hereunder.

" Manufacturing Services " means (i) during the period commencing on the Effective Date and ending on the day immediately preceding the Manufacturing Commencement Date, the Packaging Services only; and (ii) during the period commencing on the Manufacturing Commencement Date and throughout the term of this Agreement, all of the manufacturing, quality control, quality assurance and stability testing, packaging and related services, as contemplated in this Agreement, required to produce Product from the Active Material and Components; " Manufacturing Site " means the US facility owned and operated by Patheon that is located at [ * ] ; " Minimum Run Quantity " means the minimum number and size of Batches of Product to be produced during the same cycle of manufacturing as set forth in Schedule B hereto;

" NDA " means a New Drug Application for the Product made in accordance with applicable regulations and requirements of the FDA as from time to time in effect;

" Packaging Services" means the packaging and related services performed or to be performed by Patheon hereunder to accept Bulk Product and package it into Fully Packaged Product after the Effective Date and prior to the Manufacturing Commencement Date. " Patheon Manufacturing Responsibilities " means Patheon' s responsibilities and obligations with respect to the provision of Manufacturing Services as set forth in Sections 2.1 and 2.2;

" Product " means the product listed on Schedule A hereto; " Quality Agreement " means the agreement entered into between the parties hereto setting out the quality assurance standards to be applicable to the Manufacturing Services provided by Patheon, which agreement shall be in the form attached hereto as Schedule E;

" Quota " means the procurement quota quantity of Active Material allotted by the DEA to Patheon in order for Patheon to perform the Manufacturing Services.


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" Regulatory Filings" means the NDA and any other filing under the United States Federal Food, Drug and Cosmetic Act and rules and regulations thereunder, and any corresponding filing required in other countries and jurisdictions (including, without limitation, the EMEA), in connection with the registration, manufacturing, sale and use of the Product, other than local or federal permits required to be obtained by Patheon in connection with performance of the Manufacturing Services.

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

(a) specifications for the Active Material and Components;

(b) manufacturing specifications, vendors, directions and processes;

(c) storage requirements;

(d) environmental, health and safety information relating to the Product including material safety data sheets; and, (e) the finished Product specifications, applicable packaging specifications and shipping requirements for each Product; all as updated, amended and revised from time to time by the Client in accordance with the terms of this Agreement; " Technical Dispute " has the meaning specified in Section 12.2;

" Territory " means the entire world;

" United States " means the United States of America, its territories and possessions, including Puerto Rico and the U.S Virgin Islands; and

" Year " means in the first year of this Agreement, the period from the Commencement Date up to and including December 31 of the same calendar year, and thereafter shall mean a calendar year.

1.2 Currency .

Unless otherwise specifically provided herein, all monetary amounts are expressed in this Agreement in the lawful currency of the United States of America.


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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 shall not affect the interpretation of this Agreement. Unless otherwise specifically provided herein, 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, Schedule or the provision hereof. 1.4 Singular Terms .

Except as otherwise expressly provided herein or unless the context otherwise requires, all references to the singular shall 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 Specifications

Schedule B - Minimum Run Quantity, Annual Volume, Fees & Price Adjustments

Schedule C - Stability Testing

Schedule D - Active Material & Active Material Reimbursement Value

Schedule E - Batch Numbering & Expiration Dates

Schedule F - Technical Dispute Resolution

Schedule G - Quality Agreement

Schedule H - Quarterly Active Materials Inventory Report

Schedule I - Report of Annual Active Materials Inventory Reconciliation and Calculation of Actual Annual Yield

Schedule J - Form of Exclusive Components Purchasing Summary

Schedule K - Bill-Back Items

Schedule L - Packaging Configurations for Full Packaged Product

Schedule M Packaging Configurations for Bulk Package Product


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[ * ] = 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 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

ARTICLE 2

MANUFACTURING SERVICES

2.1 Manufacturing Services . Patheon shall provide the Manufacturing Services for the fees specified in Schedules B and C. Patheon may change the Manufacturing Site for the Product only with the prior written consent of Client. None of the Manufacturing Services may be subcontracted by Patheon without the Client' s prior written consent.

Client shall specify the Manufacturing Commencement Date by [ * ] days' written notice to Patheon. For clarity, the parties acknowledge that the Manufacturing Commencement Date is conditioned upon (i) the approval of Patheon as a manufacturer of the Product, including approval of Patheon' s facility by the FDA and any other applicable regulatory Authority, (ii) receipt of appropriate Quota and (iii) [ * ] of Client' s [ * ] ,

During the period from the Effective Date through the day immediately preceding the Manufacturing Commencement Date, Patheon shall perform Packaging Services for Bulk Product on a non-exclusive basis in accordance with the description of services below as applicable to Packaging Services. From and after the Manufacturing Commencement Date, Patheon shall perform the Manufacturing Services set forth below. The Client shall purchase (A) its entire requirements of [ * ] and [ * ] for distribution in [ * ] ; provided, however, that the Client may establish other third party suppliers as additional manufacturers of the Product for [ * ] , and may purchase Product from such manufacturers, if [ * ] pursuant to the terms and conditions of this Agreement and (B) [ * ] for distribution in [ * ] , in each case, from Patheon pursuant to the terms of this Agreement. In providing the Manufacturing Services, Patheon shall perform the following services:

(a) Conversion of Active Materials and Components . Patheon shall convert Active Material and Components into Product. (b)

Quality Control and Quality Assurance of Product manufactured by Patheon . Patheon shall perform the quality control and quality assurance testing specified in the Quality Agreement. Each time Patheon ships Product to the Client, it shall provide the Client with a certificate of analysis that sets out the test results for each Batch of Product, and that certifies that such Batch has been evaluated by Patheon's Quality Control/Quality Assurance department and that the Product complies with the Specifications and was manufactured in accordance with cGMPs. Patheon shall test or cause to be tested each Batch of Product to be supplied pursuant to this Agreement, in accordance with the testing


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[ * ] = 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 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

methods for the Product set forth in the Specifications, before delivery of such Batch to the Client. Notwithstanding the foregoing, the Client reserves the right to test or have tested all Product supplied by Patheon and pursuant to Section 6.1 hereof to reject any Product that fails to comply with the Specifications or Product that is not made in accordance with cGMPs.

(c) Testing of Components and Active Material .

(i) Components. Patheon shall purchase and test all Components at Patheon's expense and as specified by the Specifications. The Client will have the right to specify the suppliers for the Components. Patheon shall not change any Specifications or supplier of such Components without the prior written consent of the Client.

(ii) Active Material . Promptly following receipt of the Active Material to be supplied by Client, Patheon will test (pursuant to test methods and drug specifications to be provided by the Client) and approve such Active Material as acceptable for performing Manufacturing Services under this Agreement. Patheon will notify the Client in writing within [ * ] days of receipt of any failure of Active Material unless earlier notice is required by Law; absent any such notice Active Material will be deemed to be accepted and approved by Patheon.

(d) Stability Testing . Patheon shall conduct stability testing on the Product in accordance with agreed upon protocols and Specifications in Schedule C. Patheon shall not make any changes to these Specifications or testing protocols without prior written approval from the Client. Patheon will promptly provide any and all data and results relating to the stability testing upon request by the Client. In the event that any Batch of the Product fails, or is suspected to fail, stability testing, Patheon will notify the Client within one Business Day and Patheon and the Client shall jointly determine the proceedings and methods to be undertaken to investigate the causes of such failure.

(e)

Packaging . During the period between the Effective Date and the Manufacturing Commencement Date, Patheon shall convert Bulk Product into Fully Packaged Product for the Client in accordance with the applicable Specifications from time to time as requested by Client. From and after the Manufacturing Commencement Date, Patheon shall package Bulk Product and Fully Packaged Product, as specified by Client in its purchase orders, each in accordance with the applicable Specifications. In addition, Patheon shall assign Batch numbers and expiration dates for all Product shipped, if applicable. Such Batch numbers and expiration dates shall be affixed on the Product and on the shipping cartons, as applicable, of each Product as outlined in the Specifications and as required by cGMPs. The system used by Patheon for Batch numbering and expiration dates of Product manufactured by Patheon is detailed in the Quality Agreement attached hereto as Schedule G. The Client may, in its sole discretion, make changes to labels, product inserts and other


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[ * ] = 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 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

packaging for the Product. Patheon's name shall not appear on the label or anywhere else on the Product unless: (i) required by any Laws; or (ii) [ * ] expressly consents to such use of its name in writing.

(f) Active Materials and Client Supplied Components Importing . The Client will deliver all Active Materials and Components which Client is responsible for supplying (if any) to Patheon [ * ] (INCOTERMS 2000).

(g) Bill-Back Items. The expenses in respect of all third party supplier fees for the purchase of columns, standards, tooling, and other project specific items necessary for Patheon to perform the Manufacturing Services, and which are not included as Components, shall be set forth on Schedule K hereto, as may be amended from time to time by the written consent of both parties, and charged to the Client at [ * ] .

2.2 Standard of Performance .

Patheon shall provide the Manufacturing Services in accordance with the Specifications, all applicable Laws and cGMPs.

2.3 Active Material Reports and Quota .

(a) Reporting. Patheon shall provide the Client with a quarterly inventory report of the Active Materials held by Patheon in accordance with the inventory report form annexed hereto as Schedule H, which shall contain the following information for such quarter: Quantity Received: The total quantity of Active Materials that complies with the Specifications and is received at the Manufacturing Site during the applicable period.

Quantity Dispensed: The total quantity of Active Materials dispensed at the Manufacturing Site during the applicable period. The Quantity Dispensed is calculated by adding the Quantity Received to the inventory of Active Materials that complies with the Specifications and is held at the beginning of the applicable period, less the inventory of Active Materials that complies with the Specifications and is held at the end of such period. The Quantity Dispensed shall only include Active Materials received and dispensed in connection with commercial manufacturing of Product and, for certainty, shall not include any Active Materials received or dispensed in connection with 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 Active Materials contained in the Product produced with the [ * ] (including any [ * ] in accordance with [ * ] ), delivered by Patheon, and not rejected, recalled or returned in accordance with Section 6.1 or 6.2 as a result of a failure by Patheon to provide Manufacturing Services in accordance with Specifications, cGMPs and all applicable Laws.


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[ * ] = 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 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

(b) Quota . The parties acknowledge that the Active Material is scheduled under the Federal Controlled Substances Act. Patheon is required to obtain a Quota from the DEA before producing Product. In that regard, throughout the term hereof, Patheon will submit to DEA in a timely manner all necessary documents to obtain a Quota sufficient to meet Client' s forecasts made pursuant to Section 5.1(a). Additional request(s) will be submitted by Patheon to DEA in a timely manner as necessary to reflect changes in Client' s forecast requirements of Active Material and Product. Patheon further agrees to [ * ] obtain a Quota from the DEA that allows Patheon to manufacture all of Client' s forecasted requirements for Product including cooperating with the Client in connection with any discussions with the DEA regarding a Quota. PATHEON ACKNOWLEDGES THAT TIME IS OF THE ESSENCE IN PERFORMING ITS OBL ...