Common use of Development Work Clause in Contracts

Development Work. 2.1 Details of the development are set forth in the SOW. Design requirements may be changed by mutual written agreement of the Parties; however, Customer understands and agrees that such changes may result in additional charges. 2.2 The development shall be completed when Customer notifies TAEC that the Prototype received by Customer meets the Specifications, when Customer executes the Prototype Approval Signoff. 2.3 If the Prototypes do not conform to the agreed specification and TAEC agrees that the nonconformance is due to TAEC’s error, TAEC will make all commercially-reasonable efforts to expedite delivery of conforming Prototypes. 2.4 If Customer requests any modifications to the Specifications, TAEC agrees to complete the modification as soon as is reasonably practicable after TAEC has agreed to the modification. For the avoidance of doubt, the parties expressly agree that TAEC shall have no obligation to commence a modification unless and until the parties have agreed on adjustments in schedule, costs, or other applicable provisions. 2.5 If TAEC assembles and manufactures any goods at Customer’s request before Customer has issued its written approval via Prototype Approval Signoff, Customer understands and agrees that they will be done on a Risk Production order basis, with Customer responsible for all assembly and production costs. 2.6 Products will be tested to the developed test program resulting from the simulation database. Changes to the test program after sample or production initiation may result in production lead-time delays. 2.7 Each delivery of Products shall be initiated by Customer’s written or electronic notification that a Purchase Order (“Purchase Order”) will be forthcoming. Customer shall send a written Purchase Order to TAEC within five (5) working days of the verbal notice. Each Purchase Order shall identify the Products ordered; indicate the requested quantity and a mutually agreed upon price; and specify the requested delivery date. 2.8 Design initiation shall commence when Customer issues a Purchase Order for the NRE charge. The Purchase Order shall refer to the applicable DPA, and shall include the words: “This Purchase Order represents acceptance of the terms and conditions in the Design And Production Agreement between the issuer and Toshiba America Electronic Components, Inc.” 2.9 TAEC shall supply Products to Customer based on production Purchase Orders that support a six (6) month rolling forecast.

Development Work. 2.1 Details VIVUS shall, at its own cost and expense, conduct the DEVELOPMENT WORK to seek REGULATORY APPROVAL of the development are set forth PRODUCTS in the SOWTERRITORY. Design requirements may VIVUS shall not, however, be changed by mutual written agreement responsible for DEVELOPMENT WORK as it relates to seeking REGULATORY APPROVAL of the Parties; howeverPRODUCTS outside the TERRITORY or the manufacturing scale-up and 12 -11- production of validation batches of the BULK DRUG TABLETS (or the BULK DRUG SUBSTANCE where applicable). Rather, Customer understands and agrees that such changes may result in additional charges. 2.2 The development shall be completed when Customer notifies TAEC TANABE's responsibility at its own costs and expense. Such work as the manufacturing scale-up, production of validation batches and the manufacture of the BULK DRUG TABLETS and BULK DRUG SUBSTANCE shall be carried out by TANABE using reasonable commercial efforts and in a timely manner in accordance with the DEVELOPMENT PLAN so as not to delay VIVUS' initiation of CLINICAL STUDIES, filing of DRUG APPROVAL APPLICATIONS or launch of the PRODUCTS. It is understood and agreed by the Parties that VIVUS may conduct its activities under this Article 5 by itself or through its designees, subject to TANABE's prior approval, such approval not to be unreasonably withheld. TANABE agrees to act promptly in evaluating potential designees and in no case shall take more than ten (10) business days to render its decision. 5.2 CLINICAL STUDIES Protocols. VIVUS shall inform TANABE, in writing, of the Prototype received draft protocol for such CLINICAL STUDIES for TANABE's review and consideration, before commencement of any CLINICAL STUDIES for the COMPOUND or the PRODUCTS conducted by Customer meets it in the SpecificationsTERRITORY. Once so informed, when Customer executes TANABE will have ten (10) business days to review and provide comments on the Prototype Approval Signoff. 2.3 If draft protocol. In addition, should TANABE request any change or addition to such draft protocol for the Prototypes do not conform purpose of using the data generated under the DEVELOPMENT WORK in the TERRITORY for TANABE's development outside the TERRITORY, then TANABE shall promptly notify VIVUS to such effect, and VIVUS shall accommodate such request to the agreed specification and TAEC agrees that the nonconformance is due to TAEC’s error, TAEC will make all commercially-reasonable efforts to expedite delivery of conforming Prototypes. 2.4 If Customer requests any modifications to the Specifications, TAEC agrees to complete the modification as soon as extent such request is reasonably practicable after TAEC has agreed acceptable by VIVUS. If such request causes additional costs to the modificationVIVUS, TANABE shall reimburse such additional costs to VIVUS in full. For the avoidance of doubt, the parties expressly agree that TAEC shall have no obligation to commence a modification unless and until the parties have agreed on adjustments in schedule, costs, or other applicable provisions. 2.5 If TAEC assembles and manufactures any goods at Customer’s request before Customer has issued its written approval via Prototype Approval Signoff, Customer understands and agrees that they will be done on a Risk Production order basis, with Customer responsible for all assembly and production costs. 2.6 Products will be tested to the developed test program resulting from the simulation database. Changes to the test program after sample or production initiation may result in production lead-time delays. 2.7 Each delivery of Products shall be initiated by Customer’s written or electronic notification that a Purchase Order (“Purchase Order”) will be forthcoming. Customer shall send a written Purchase Order to TAEC within five (5) working days of the verbal notice. Each Purchase Order shall identify the Products ordered; indicate the requested quantity and a mutually agreed upon price; and specify the requested delivery date. 2.8 Design initiation shall commence when Customer issues a Purchase Order for the NRE charge. The Purchase Order shall refer to the applicable DPA, and shall include the words: “This Purchase Order represents acceptance of the terms and conditions in the Design And Production Agreement between the issuer and Toshiba America Electronic Components, Inc.” 2.9 TAEC shall supply Products to Customer based on production Purchase Orders that support a six (6) month rolling forecast.5.3