Common use of Capacity Allocation Clause in Contracts

Capacity Allocation. In the event that Manufacturer fails to manufacture and deliver Product in accordance with accepted Purchase Orders or applicable Specifications, Manufacturer shall notify Customer promptly, including details of the reasons for the failure and Manufacturer’s estimated timeline of when the failure will be corrected. Manufacturer shall be solely responsible for undertaking commercially reasonable measures to minimize any shortage of Product delivered to Customer as a result of such manufacturing issues. If Manufacturer fails to manufacture and deliver Product in accordance with accepted Purchase Orders or applicable Specifications by the delivery date specified in the applicable Purchase Order(s) in accordance with Section 2.4(d), other than due to a Force Majeure Event, (i) for a period of two (2) or more months past such delivery date four (4) or more times in any rolling twelve (12) month period, or (ii) for a period of four (4) or more months past such delivery date on one occasion (each of (i) and (ii), a “Triggering Event”), then Manufacturer shall use its best efforts to allocate on a quarterly basis its manufacturing capacity and Product Materials to the manufacture and supply of Products for Customer on a ratable basis based on the use of each during the twelve (12)-month period immediately preceding such Triggering Event (or either (1) the Term of the applicable Facility Addendum, if the Term is less than twelve (12) months, or (2) such other period set forth in the applicable Facility Addendum); provided that (A) if Customer’s Minimum Order Quantity for the applicable Product(s) exceeds its ratable allocation of manufacturing capacity or Product Materials (as applicable) for the applicable quarter, Customer shall continue to accrue its allocation of capacity until such quarter when Customer’s allocation of capacity is equal to or greater than its accrued allocation of capacity and (B) this Section 2.5(a) shall not apply to the extent that Customer fails to timely provide adequate Customer-Supplied Materials or Buy-Sell Materials to Manufacturer in accordance with Section 12. For the avoidance of doubt, Manufacturer shall notify Customer promptly in writing of any anticipated Triggering Event when Manufacturer has reason to believe that such Triggering Event is likely to occur and provide such information with respect to such anticipated Triggering Event as Customer may reasonably request.

Capacity Allocation. In 5.6.1 Notwithstanding anything herein to the event that Manufacturer fails contrary or anything to manufacture the contrary in any Purchase Order or Forecast, Seller shall not be obligated to supply Purchaser (regardless of amounts ordered by Purchaser), more than the then applicable Maximum Annual Product Units during a twelve month period. Without limiting the foregoing, any Purchase Order or Forecast [***] Certain information on this page has been redacted and deliver filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. submitted by Purchaser hereunder for more than the then applicable Maximum Annual Product in accordance with accepted Purchase Orders or applicable SpecificationsUnits shall, Manufacturer shall notify Customer promptly, including details to the extent of the reasons excess, be deemed rejected by Seller, unless expressly accepted by Seller in writing. As used herein, the term "Maximum Annual Product Units" shall mean for the failure period ending twelve full calendar months from the First Commercial Sale and Manufacturer’s estimated timeline for each twelve month period thereafter, [***] of when the failure will be corrected. Manufacturer total units of branded and generic Lovenox® product (including the brand name product, the Product, any Authorized Generic Product and any Competitive Product) sold for distribution into the Territory for the immediately preceding calendar year as reported by IMS Health (or such other nationally recognized data compilation source as mutually agreed); provided that, if the First Commercial Sale occurs during calendar year 2005, then the Maximum Annual Product Units for the period ending twelve full calendar months from the First Commercial Sale shall be solely responsible deemed to be [***] of Product. For each twelve month period beginning after the First Commercial Sale (other than as provided above if the First Commercial Sale occurs in calendar year 2005), the Maximum Annual Product Units shall be established as soon as data from IMS Health (or such other nationally recognized source as mutually agreed) for undertaking commercially reasonable measures the immediately preceding calendar year becomes available to minimize any shortage the parties and once the Maximum Annual Product Units for the then current twelve month period is established, it shall be effective retroactively to the beginning of and shall be fixed through such twelve month period. Without limiting the foregoing, but by way of example: If the First Commercial Sale occurs on September 1, 2005, then the Maximum Annual Product Units for the twelve month period ending with August 31, 2006 would be [***] units of Product. As a result, Purchaser would have no right to order or purchase, and Seller would have no obligation to supply, more than [***] units of Product delivered during the twelve month period ending August 31, 2006. Assuming that [***] total units of branded and generic Lovenox® product were sold for distribution into the Territory for the 2005 calendar year as reported by IMS Health, then the newly established Maximum Annual Product Units for the twelve month period ending August 31, 2007 would be [***] units of Product (i.e., [***] units). As a result, Purchaser would have no right to Customer as a result order or purchase, and Seller would have no obligation to supply, more than [***] units of such manufacturing issuesProduct during the twelve month period ending August 31, 2007. If Manufacturer fails The foregoing process would be repeated once each twelve month period thereafter to manufacture and deliver establish the Maximum Annual Product in accordance with accepted Purchase Orders or applicable Specifications by Units for the delivery date specified in the applicable Purchase Order(s) in accordance with Section 2.4(d), other than due to a Force Majeure Event, (i) for a period of two (2) or more months past such delivery date four (4) or more times in any rolling then current twelve (12) month period. At Purchaser's request from time to time, or (ii) for a period of four (4) or more months past such delivery date the parties shall discuss increasing the then existing Maximum Annual Product Units based on one occasion (each of (i) and (ii)then existing market conditions, a “Triggering Event”), then Manufacturer shall use its best efforts to allocate on a quarterly basis its Seller's manufacturing capacity and Product Materials to the manufacture other relevant factors. Seller shall reasonably consider Purchaser's request and supply of Products its reasons for Customer on a ratable basis based on the use of each during the twelve (12)-month period immediately preceding such Triggering Event (or either (1) the Term of the applicable Facility Addendum, if the Term is less than twelve (12) months, or (2) such other period set forth an increase in the applicable Facility Addendum)then existing Maximum Annual Product Units; provided that that, Seller shall have no obligation to agree to (Aand may reject in Seller's sole discretion and without liability) if Customer’s Minimum Order Quantity for any increase requested by Purchaser in the applicable Product(s) exceeds its ratable allocation of manufacturing capacity or then existing Maximum Annual Product Materials (as applicable) for the applicable quarter, Customer shall continue to accrue its allocation of capacity until such quarter when Customer’s allocation of capacity is equal to or greater than its accrued allocation of capacity and (B) this Section 2.5(a) shall not apply to the extent that Customer fails to timely provide adequate Customer-Supplied Materials or Buy-Sell Materials to Manufacturer in accordance with Section 12. For the avoidance of doubt, Manufacturer shall notify Customer promptly in writing of any anticipated Triggering Event when Manufacturer has reason to believe that such Triggering Event is likely to occur and provide such information with respect to such anticipated Triggering Event as Customer may reasonably requestUnits.