Common use of Purchase and Sale of Product Clause in Contracts

Purchase and Sale of Product. 2.1 MALLINCKRODT understands and agrees that AMYLIN shall have the right to manufacture Product itself or have Product manufactured by other manufacturers. 2.2 MALLINCKRODT agrees to manufacture and supply to AMYLIN the amounts of Product as ordered by AMYLIN pursuant to written purchase orders issued hereunder by AMYLIN using a form of purchase order mutually acceptable to both parties (“Purchase Order”), specifying the quantity, Nominal Lot quantity, and delivery date. AMYLIN shall submit each Purchase Order to MALLINCKRODT at least [***] ([***]) months in advance of the shipment date specified in the Purchase Order and otherwise in accordance with the requirements hereof. In the event that AMYLIN requests a change to a Purchase Order, MALLINCKRODT shall use commercially reasonable efforts to accommodate such request. All Purchase Orders shall be subject to written acceptance by MALLINCKRODT, which acceptance shall not unreasonably be withheld or delayed. Notwithstanding any other provision hereof, except with respect to Product volumes, delivery dates and shipping instructions, no term or condition of any Purchase Order issued by AMYLIN, any acknowledgement by MALLINCKRODT or any other document of either party that is in any manner additional to, different from or varies the terms and conditions hereof shall be deemed to be of any force or effect. 2.3 Notwithstanding the provisions of Paragraph 2.2 above, AMYLIN agrees to purchase from MALLINCKRODT (except to the extent MALLINCKRODT does not accept a Purchase Order pursuant to Paragraph 2.2 above): (i) during the period from the Effective Date through the end of the first Contract Year hereof (i.e., during the period from October 1, 2003 through September 30, 2004) a minimum of [***] ([***]) [***] (or [***]) of Product which will consist of the Product Validation Lots, (ii) during the second Contract Year, a minimum of [***] ([***]) [***] (or [***]) of Product, (iii) during the third Contract Year hereof, a minimum of [***] ([***]) [***] (or [***]) of Product, and (iv) during the fourth Contract Year and every subsequent Contract Year thereafter, at least [***] percent ([***]%) of the total quantity of Product purchased by AMYLIN during each Contract Year for the manufacture of Exenatide Injection Drug for commercial sale anywhere in the world that MALLINCKRODT has authorized reference of its Drug Master File for Product or [***] ([***]) [***] of Product whichever is greater. Notwithstanding the above, AMYLIN shall not be required to purchase Product under this Agreement unless MALLINCKRODT manufactures and delivers all Product Validation Lots meeting all Product Requirements and Validation Requirements in accordance with this Agreement. 2.4 For each gram of Product supplied hereunder by MALLINCKRODT, AMYLIN will pay to MALLINCKRODT a price per gram based on the cumulative volume of Product ordered for supply during any given Contract Year. The per gram price to be billed to AMYLIN for any Lot or other discrete volume of Product shipped to AMYLIN during any Contract Year will be at the applicable price for Product based on the most recent Contract Year Forecast submitted by AMYLIN prior to the shipment by MALLINCKRODT of any such amount of Product. Based on the foregoing, AMYLIN will pay to MALLINCKRODT a per gram price for Product (“Product Price”) in accordance with the following: (i) if in any given Contract Year the amount of Product ordered for delivery is less than or equal to [***] ([***]) [***], the price per gram will be $[***], (ii) if in any given Contract Year the amount of Product ordered for delivery is greater than [***] ([***]) [***] but less than or equal to [***] ([***]) [***], the price per gram will be $[***], (iii) if in any given Contract Year the amount of Product ordered for delivery is greater than or equal to [***] ([***]) [***] but less than or equal to [***] ([***]) [***], the price per gram will be $[***], (iv) if in any given Contract Year the amount of Product ordered for delivery is greater than [***] ([***]) [***] but less than or equal to [***] ([***]) [***], the price per gram will be $[***], (v) if in any given Contract Year the amount of Product ordered for delivery is greater than [***] ([***]) [***] but less than or equal to [***] ([***]) [***], the price per gram will be $[***], and (vi) if in any given Contract Year the amount of Product ordered for delivery is greater than [***] ([***]) [***], the price per gram will be $[***]. The Product Prices set forth in the immediately preceding sentence shall be firm through the first Contract Year ending on September 30, 2004, the date of October 1, 2004 being hereinafter referred to as the “Adjustment Date”. From and after the Adjustment Date, the Product Prices shall be adjusted to reflect increases or decreases in the cost to MALLINCKRODT of all raw materials, directly associated regulatory compliance costs and all directly allocated labor (all of which costs are hereinafter referred to as “Product Costs”) [***] compared to the immediately preceding Contract Year, in accordance with the following procedures. Within fifteen (15) days after the end of each Contract Year hereunder during the term hereof, MALLINCKRODT will notify AMYLIN in writing of the amount by which its Product Costs hereunder have changed during the immediately preceding Contract Year period and, if applicable, the adjusted Product Price to be charged for the next Contract Year just commenced as a consequence of such changes (“Annual Adjustment Notice”). The amount of any change in the Product Prices as set forth in any Annual Adjustment Notice shall be effective for all Product invoices by MALLINCKRODT to AMYLIN in accordance herewith during the Contract Year for which such Annual Adjustment Notice is issued. 2.5 If, with respect to any given Contract Year, it is clear that the annual volume assumptions on which the Product Prices reflected in any one or more invoices for Product shipped to AMYLIN during such Contract Year are based are incorrect, then within thirty (30) days after the end of such Contract Year, MALLINCKRODT will send corrected invoices to AMYLIN indicating the actual per gram price for Product shipped during such Contract Year with respect to such invoices based on the actual volume of Product ordered for delivery during such Contract Year. If, on the basis of all such corrected invoices with respect to a particular Contract Year, when considered in the aggregate, the amount paid or payable by AMYLIN for Product shipped during such Contract Year against invoices previously issued by MALLINCKRODT is in excess of the amount payable by AMYLIN pursuant to all such corrected invoices then MALLINCKRODT shall, contemporaneous with the delivery of such corrected invoices and at AMYLIN’s option, give AMYLIN a full refund of the excess amount or, with respect to any previously issued but as yet unpaid invoice, issue an appropriate credit equal to the excess amount of any such invoice. If, on the basis of all such corrected invoices with respect to a particular Contract Year, when considered in the aggregate, the amount paid or payable by AMYLIN for Product shipped during such Contract Year against invoices previously issued by MALLINCKRODT is less than the amount payable by AMYLIN pursuant to all such corrected invoices, then AMYLIN shall, within thirty (30) days after the receipt of such corrected invoices, pay to MALLINCKRODT the full additional amount due as reflected on such corrected invoices. 2.6 Notwithstanding Paragraph 2.5 set forth immediately above, AMYLIN shall have the right (through any independent agents or representatives that are reasonably acceptable to MALLINCKRODT and upon advance written notice to MALLINCKRODT), with respect to any Contract Year ending not more than [***] ([***]) months prior to the date of notice requesting an audit, to audit the books and records of MALLINCKRODT to determine whether or not the amounts reflected on any original invoices relevant to any such Contract Year or any corrected invoices issued by MALLINCKRODT to AMYLIN in accordance with Paragraph 2.5 set forth immediately above are accurate, and in particular (without limitation) whether or not the Product Costs as reflected in any Annual Adjustment Notice have been reported and invoiced correctly by MALLINCKRODT, as applicable in any given case. In the event that, as a consequence of any such audit or examination, AMYLIN reasonably disagrees with any amounts set forth on original or corrected invoices issued by MALLINCKRODT, AMYLIN shall inform MALLINCKRODT in writing and in reasonable detail of the amounts to be refunded and, unless and to the extent MALLINCKRODT disputes the amounts set forth by AMYLIN in any such notice, MALLINCKRODT will refund to AMYLIN any such undisputed amounts within fifteen (15) days of the receipt of any such notice from AMYLIN. In the event MALLINCKRODT does dispute all or any portion of any refund claimed by AMYLIN, MALLINCKRODT will so notify AMYLIN within such fifteen (15) day period and the parties will attempt thereafter to resolve such dispute amicably and, if they cannot do so, may agree to submit the dispute to binding arbitration or independently pursue any other remedies available to them to resolve such dispute. AMYLIN shall bear the expense of such audit; provided, however, that, if such audit reflects overpayments by AMYLIN, which are undisputed or confirmed as overpayments pursuant to the dispute resolution procedure referred to in the preceding sentence, in excess of [***] percent ([***]%) of the payments actually due by AMYLIN hereunder for the applicable period, then MALLINCKRODT shall reimburse AMYLIN for the reasonable expenses of such audit. 2.7 At the time of shipment by MALLINCKRODT to AMYLIN of any Lot hereunder, MALLINCKRODT shall submit to AMYLIN an invoice setting forth the total amount of Product being shipped to AMYLIN and the amount due to MALLINCKRODT pursuant to the volume assumptions made in accordance with Paragraph 2.4 hereof. Each such invoice shall also contain a certification that the Product for which AMYLIN is being billed has been produced fully in conformance with Product Requirements. Any such invoice shall be payable by AMYLIN within sixty (60) days after AMYLIN’s receipt of such invoice. 2.8 Within thirty (30) days after the Effective Date, AMYLIN shall submit to MALLINCKRODT a rolling forecast of Product that AMYLIN in good faith estimates it will order from MALLINCKRODT for the first Contract Year (as updated on a rolling basis, the “Contract Year Forecast”). Thereafter, on and as of the first day of each calendar [***], AMYLIN will furnish MALLINCKRODT with an updated Contract Year Forecast indicating AMYLIN’s good faith estimate of the amounts of Product it expects to order during the next [***] ([***]) month period. The Contract Year Forecast will be non-binding and will be used by MALLINCKRODT for production planning, but in all circumstances AMYLIN shall act in good faith and with reasonable care to submit forecasts for Product which are as accurate as possible under the circumstances.

Purchase and Sale of Product. 2.1 MALLINCKRODT understands and Bachem agrees that AMYLIN shall have the right to manufacture Product itself or have Product manufactured by other manufacturersusing the process described in the Batch Production Records, subject to the terms and conditions of this Agreement. 2.2 MALLINCKRODT Bachem agrees to manufacture and supply to AMYLIN Exenatide in quantities set forth in Purchase Orders submitted by Amylin in accordance with this Agreement. The following table sets forth the amounts quantities of Product that Amylin estimates, as ordered of the Effective Date, that it will purchase during the period commencing January 1, 2004 and ending December 31, 2009. 2004 2005 2006 2007 2008 2009 [***] kg [***] kg [***] kg [***] kg [***] kg [***] kg The quantities listed are indicative in nature, are not intended to be binding on the parties and can be revised periodically to reflect better knowledge of Product demand. However, Bachem guarantees that it will be able to manufacture said quantities. Commencing on the Effective Date Amylin will supply to Bachem rolling [***] forecasts containing its estimated requirements of Product, by AMYLIN pursuant to written purchase orders issued hereunder by AMYLIN using [***]. This may be a form fixed amount or a range of purchase order mutually acceptable to both parties (“Purchase Order”), specifying the quantity, Nominal Lot quantity, and delivery datequantities. AMYLIN Amylin shall submit each Purchase Order to MALLINCKRODT at least update such forecasts every [***] ([***]) months in advance of the shipment date specified in the Purchase Order and otherwise in accordance with the requirements hereofmonths. In the event that AMYLIN requests a change to a Purchase Order, MALLINCKRODT Amylin shall use commercially reasonable efforts to accommodate such request. All submit Purchase Orders shall be subject to written acceptance by MALLINCKRODTspecifying the quantity of Product ordered, which acceptance shall not unreasonably be withheld or delayedthe required delivery date, and any special instructions. Notwithstanding any other provision hereof, except with respect to Purchase Orders for delivery of Product volumes, delivery dates and shipping instructions, no term or condition of any Purchase Order issued by AMYLIN, any acknowledgement by MALLINCKRODT or any other document of either party that is in any manner additional to[***], different from or varies the terms and conditions hereof shall will be deemed to be of any force or effect. 2.3 Notwithstanding the provisions of Paragraph 2.2 above, AMYLIN agrees to purchase from MALLINCKRODT issued (except to the extent MALLINCKRODT does not accept a Purchase Order pursuant to Paragraph 2.2 above): (iA) during the period from the Effective Date through the end of the first Contract Year hereof (i.e., during the period from October 1, 2003 through September 30, 2004) a minimum of no later than [***] (of the [***], and (B) [***] (or [***]) of Product which will consist of the Product Validation Lots, (ii) during the second Contract Year, a minimum of [***] ([***]) [***] (or [***]) of Product, (iii) during the third Contract Year hereof, a minimum of [***] ([***]) [***] (or [***]) of Product, and (iv) during the fourth Contract Year and every subsequent Contract Year thereafter, at least [***] percent (months in advance of the requested delivery date, provided that such [***] month lead time may be reduced by [***] months, if Amylin pre-purchases Materials. The Purchase Orders issued in accordance with this Section 2.2 will be binding on both Seller and Buyer. 2.3 The price for the Product shall be based on [***] as set forth below and includes the costs of Materials and analytical release testing. If Materials’ costs or waste disposal costs change by more than [***]%) of the total quantity of Product purchased by AMYLIN during each Contract Year for the manufacture of Exenatide Injection Drug for commercial sale anywhere in the world that MALLINCKRODT has authorized reference of its Drug Master File for Product or [***] ([***]) [***] of Product whichever is greater. Notwithstanding the above, AMYLIN shall not be required to purchase Product under this Agreement unless MALLINCKRODT manufactures and delivers all Product Validation Lots meeting all Product Requirements and Validation Requirements in accordance with this Agreement. 2.4 For each gram of Product supplied hereunder by MALLINCKRODT, AMYLIN will pay to MALLINCKRODT a price per gram based on the cumulative volume of Product ordered for supply during any given Contract Year. The per gram price to be billed to AMYLIN for any Lot or other discrete volume of Product shipped to AMYLIN during any Contract Year will be at the applicable price for Product based on the most recent Contract Year Forecast submitted by AMYLIN prior to the shipment by MALLINCKRODT of any such amount of Product. Based on the foregoing, AMYLIN will pay to MALLINCKRODT a per gram price for Product (“Product Price”) in accordance with the following: (i) if in any given Contract Year the amount of Product ordered for delivery is less than or equal to [***] ([***]) % over [***], the price per gram for the Product may be adjusted, subject to the parties’ mutual written agreement, to reflect the change in such costs. Prices will be $the following: [***], (ii) if kg $ [***]/g* [***]kg $ [***]/g* [***]kg $ [***]/g* [***]kg $ [***]/g* * Based on current specifications. The parties agree that changes to the Product Specifications that are set forth in Exhibit 1 as of the Effective Date to reflect requirements for commercial supply will not result in any given Contract Year change to the amount prices set forth above; provided, however that, if such changes to the Product Specifications reflect process capabilities that are outside the process capabilities demonstrated by Bachem in manufacturing validation batches, then the parties will discuss whether such prices would require adjustment as a consequence. If certain process improvements can be identified post approval, Bachem and Amylin will jointly decide on a course of Product ordered action, provided that no change to the manufacturing process for delivery is greater than Products may be implemented without Amylin’s prior written approval. Bachem will quote for the work this implementation of changes involves. Amylin can then elect to pursue this option. Any cost savings that ensue from the implementation of these changes would be [***] between the parties. 2.4 Any federal, state, county of municipal sales or use tax, excise or similar charge, or other tax assessment ([***]) [***] but less other than that assessed against income), license fee or equal to [***] ([***]) [***]other charge lawfully assessed or charged on the manufacture, the price per gram will be $[***], (iii) if in any given Contract Year the amount sale or transportation of Product ordered for delivery is greater than or equal sold pursuant to [***] ([***]) [***] but less than or equal to [***] ([***]) [***], the price per gram will be $[***], (iv) if in any given Contract Year the amount of Product ordered for delivery is greater than [***] ([***]) [***] but less than or equal to [***] ([***]) [***], the price per gram will be $[***], (v) if in any given Contract Year the amount of Product ordered for delivery is greater than [***] ([***]) [***] but less than or equal to [***] ([***]) [***], the price per gram will be $[***], and (vi) if in any given Contract Year the amount of Product ordered for delivery is greater than [***] ([***]) [***], the price per gram will be $[***]. The Product Prices set forth in the immediately preceding sentence this Agreement shall be firm through the first Contract Year ending on September 30paid by Amylin, 2004, the date of October 1, 2004 being hereinafter referred to as the “Adjustment Date”. From and after the Adjustment Date, the Product Prices shall be adjusted to reflect increases or decreases in the cost to MALLINCKRODT of all raw materials, directly associated regulatory compliance costs and all directly allocated labor (all of which costs are hereinafter referred to as “Product Costs”) [***] compared to the immediately preceding Contract Year, in accordance with the following procedures. Within fifteen (15) days after the end of each Contract Year hereunder during the term hereof, MALLINCKRODT will notify AMYLIN in writing of the amount by which its Product Costs hereunder have changed during the immediately preceding Contract Year period and, if applicable, the adjusted Product Price to be charged for the next Contract Year just commenced as a consequence provided evidence of such changes (“Annual Adjustment Notice”). The amount of any change charge is provided to Amylin in the Product Prices as set forth in any Annual Adjustment Notice shall be effective for all Product invoices by MALLINCKRODT to AMYLIN in accordance herewith during the Contract Year for which such Annual Adjustment Notice is issuedwriting. 2.5 If, with respect to any given Contract Year, it is clear that the annual volume assumptions on which the Product Prices reflected in any one or more invoices for Product shipped to AMYLIN during such Contract Year are based are incorrect, then within thirty (30) days after the end of such Contract Year, MALLINCKRODT will send corrected invoices to AMYLIN indicating the actual per gram price for Product shipped during such Contract Year with respect to such invoices based on the actual volume of Product ordered for delivery during such Contract Year. If, on the basis of all such corrected invoices with respect to a particular Contract Year, when considered in the aggregate, the amount paid or payable by AMYLIN for Product shipped during such Contract Year against invoices previously issued by MALLINCKRODT is in excess of the amount payable by AMYLIN pursuant to all such corrected invoices then MALLINCKRODT shall, contemporaneous with the delivery of such corrected invoices and at AMYLIN’s option, give AMYLIN a full refund of the excess amount or, with respect to any previously issued but as yet unpaid invoice, issue an appropriate credit equal to the excess amount of any such invoice. If, on the basis of all such corrected invoices with respect to a particular Contract Year, when considered in the aggregate, the amount paid or payable by AMYLIN for Product shipped during such Contract Year against invoices previously issued by MALLINCKRODT is less than the amount payable by AMYLIN pursuant to all such corrected invoices, then AMYLIN shall, within thirty (30) days after the receipt of such corrected invoices, pay to MALLINCKRODT the full additional amount due as reflected on such corrected invoices. 2.6 Notwithstanding Paragraph 2.5 set forth immediately above, AMYLIN shall have the right (through any independent agents or representatives that are reasonably acceptable to MALLINCKRODT and upon advance written notice to MALLINCKRODT), with respect to any Contract Year ending not more than [***] ([***]) months prior to the date of notice requesting an audit, to audit the books and records of MALLINCKRODT to determine whether or not the amounts reflected on any original invoices relevant to any such Contract Year or any corrected invoices issued by MALLINCKRODT to AMYLIN in accordance with Paragraph 2.5 set forth immediately above are accurate, and in particular (without limitation) whether or not the Product Costs as reflected in any Annual Adjustment Notice have been reported and invoiced correctly by MALLINCKRODT, as applicable in any given case. In the event that, as a consequence of any such audit or examination, AMYLIN reasonably disagrees with any amounts set forth on original or corrected invoices issued by MALLINCKRODT, AMYLIN shall inform MALLINCKRODT in writing and in reasonable detail of the amounts to be refunded and, unless and to the extent MALLINCKRODT disputes the amounts set forth by AMYLIN in any such notice, MALLINCKRODT will refund to AMYLIN any such undisputed amounts within fifteen (15) days of the receipt of any such notice from AMYLIN. In the event MALLINCKRODT does dispute all or any portion of any refund claimed by AMYLIN, MALLINCKRODT will so notify AMYLIN within such fifteen (15) day period and the parties will attempt thereafter to resolve such dispute amicably and, if they cannot do so, may agree to submit the dispute to binding arbitration or independently pursue any other remedies available to them to resolve such dispute. AMYLIN shall bear the expense of such audit; provided, however, that, if such audit reflects overpayments by AMYLIN, which are undisputed or confirmed as overpayments pursuant to the dispute resolution procedure referred to in the preceding sentence, in excess of [***] percent ([***]%) of the payments actually due by AMYLIN hereunder for the applicable period, then MALLINCKRODT shall reimburse AMYLIN for the reasonable expenses of such audit. 2.7 At the time of shipment by MALLINCKRODT to AMYLIN of any Lot hereunder, MALLINCKRODT shall submit to AMYLIN an invoice setting forth the total amount of Product being shipped to AMYLIN and the amount due to MALLINCKRODT pursuant to the volume assumptions made in accordance with Paragraph 2.4 hereof. Each such invoice shall also contain a certification that the Product for which AMYLIN is being billed has been produced fully in conformance with Product Requirements. Any such invoice shall be payable by AMYLIN within sixty (60) days after AMYLIN’s receipt of such invoice. 2.8 Within thirty (30) days after the Effective Date, AMYLIN shall submit to MALLINCKRODT a rolling forecast of Product that AMYLIN in good faith estimates it will order from MALLINCKRODT for the first Contract Year (as updated on a rolling basis, the “Contract Year Forecast”). Thereafter, on and as of the first day of each calendar [***], AMYLIN will furnish MALLINCKRODT with an updated Contract Year Forecast indicating AMYLIN’s good faith estimate of the amounts of Product it expects to order during the next [***] ([***]) month period. The Contract Year Forecast will be non-binding and will be used by MALLINCKRODT for production planning, but in all circumstances AMYLIN shall act in good faith and with reasonable care to submit forecasts for Product which are as accurate as possible under the circumstances.

Purchase and Sale of Product. 2.1 MALLINCKRODT understands and Bachem agrees that AMYLIN shall have the right to manufacture Product itself or have Product manufactured by other manufacturersusing the process described in the Batch Production Records, subject to the terms and conditions of this Agreement. 2.2 MALLINCKRODT Bachem agrees to manufacture and supply to AMYLIN Product in quantities set forth in Purchase Orders submitted by Amylin in accordance with this Agreement. The following table sets forth the amounts quantities of Product that Amylin estimates, as of the Effective Date, that it will purchase for delivery during the period commencing January 2006 and ending December 31, 2011. [***]kg- [***]kg – [***] to [***] to [***] to [***] to The quantities listed are indicative in nature, are not intended to be binding on the parties and can be revised periodically to reflect better knowledge of Product demand. However, Bachem guarantees that it will be able to manufacture said quantities of Product, provided such Product is ordered in accordance with the terms of this Agreement. * Confidential Treatment Request(ed) Commencing on the Effective Date Amylin will supply to Bachem rolling [***] non-binding forecasts containing its estimated requirements of Product, by AMYLIN pursuant to written purchase orders issued hereunder by AMYLIN using [***]. This may be a form fixed amount or a range of purchase order mutually acceptable to both parties (“Purchase Order”), specifying the quantity, Nominal Lot quantity, and delivery datequantities. AMYLIN Amylin shall submit each Purchase Order to MALLINCKRODT at least update such forecasts every [***] ([***]) months in advance of the shipment date specified in the Purchase Order and otherwise in accordance with the requirements hereofmonths. In the event that AMYLIN requests a change to a Purchase Order, MALLINCKRODT Amylin shall use commercially reasonable efforts to accommodate such request. All submit Purchase Orders shall be subject to written acceptance by MALLINCKRODTspecifying the quantity of Product ordered, which acceptance shall not unreasonably be withheld or delayedthe required delivery date, and any special instructions. Notwithstanding any other provision hereof, except with respect to Product volumes, Any Purchase Order(s) for delivery dates and shipping instructions, no term or condition of any Purchase Order issued by AMYLIN, any acknowledgement by MALLINCKRODT or any other document of either party that is in any manner additional to, different from or varies the terms and conditions hereof shall be deemed to be of any force or effect. 2.3 Notwithstanding the provisions of Paragraph 2.2 above, AMYLIN agrees to purchase from MALLINCKRODT (except up to the extent MALLINCKRODT does not accept a Purchase Order pursuant to Paragraph 2.2 above): (i) during the period from the Effective Date through the end first [***]kg quantity of the first Contract Year hereof (i.e., during the period from October 1, 2003 through September 30, 2004) a minimum of Product by [***] (in a given [***] will be issued to Bachem by no later than [***]of the [***]. Following the issuance of any Purchase Order(s) for delivery of up to the first [***]kg quantity of Product in a given [***], any Purchase Order(s) covering any subsequent quantity of Product for delivery by [***] (or [***]) of Product which will consist of the Product Validation Lots, (ii) during the second Contract Year, a minimum of that [***] ([***]) [***] (or [***]) of Product, (iii) during the third Contract Year hereof, a minimum of [***] ([***]) [***] (or [***]) of Product, and (iv) during the fourth Contract Year and every subsequent Contract Year thereafter, at least [***] percent ([***]%) of the total quantity of Product purchased by AMYLIN during each Contract Year for the manufacture of Exenatide Injection Drug for commercial sale anywhere in the world that MALLINCKRODT has authorized reference of its Drug Master File for Product or [***] ([***]) must be issued to Bachem no later than [***] of the [***]. Exact delivery schedules of individual batches will then be determined between Seller and Buyer, but in no event shall any batch of Product whichever is greaterbe delivered to Amylin after the delivery date specified in the applicable Purchase Order. Notwithstanding the above, AMYLIN shall not be required to purchase Product under this Agreement unless MALLINCKRODT manufactures and delivers all Product Validation Lots meeting all Product Requirements and Validation Requirements The Purchase Orders issued in accordance with this AgreementSection 2.2 will be binding on both Bachem and Amylin. 2.4 For each gram of 2.3 The price for the Product supplied hereunder by MALLINCKRODT, AMYLIN will pay to MALLINCKRODT a price per gram shall be based on the cumulative volume of Product ordered for supply during any given Contract Year. The per gram price to be billed to AMYLIN for any Lot or other discrete volume of Product shipped to AMYLIN during any Contract Year will be at the applicable price for Product based on the most recent Contract Year Forecast submitted by AMYLIN prior to the shipment by MALLINCKRODT of any such amount of Product. Based on the foregoing, AMYLIN will pay to MALLINCKRODT a per gram price for Product (“Product Price”) in accordance with the following: (i) if in any given Contract Year the amount of Product ordered for delivery is less than or equal to [***] (as set forth below and includes the costs of Materials and analytical release testing. If Materials’ costs or waste disposal costs change by more than [***]) ] % over [***], the price per gram for the Product may be adjusted, subject to the parties’ mutual written agreement, to reflect the change in such costs. 2.4 Prices will be the following: The first [***]kg of Product ordered in any [***] will cost $[***], (ii) if in any given Contract Year the amount /g. The next [***]kg of Product ordered for delivery is greater than in [***] ([***]) [***] but less than or equal to [***] ([***]) [***], the price per gram will be cost $[***], (iii) if /g. Any additional orders for Product in any given Contract Year the amount of Product ordered for delivery is greater than or equal to [***] ([***]) [***] but less than or equal to [***] ([***]) [***], the price per gram will be cost $[***],/g. (iv) if in any given Contract Year 2.5 Potential Product overages will be tabulated after the amount delivery of Product ordered for delivery is greater than the last batches made to satisfy total [***] (Product orders. Bachem will determine the quantity of batches needed to fulfill the total Product Purchase Order(s). Any Product produced in excess of the total quantity of Product ordered by Amylin pursuant to Product Purchase Order(s) will be considered as Product overages. Amylin may elect, in its sole discretion, to purchase said overages of Product for the following prices: The first [***]) [***] but less than or equal to [***] ([***]) [***], the g of Product overage at a price per gram will be of $[***], (v) if in any given Contract Year /g, the amount of Product ordered for delivery is greater than [***] (next [***]) [***] but less than or equal to [***] ([***]) [***], the price per gram will be g of Product overages at $[***], and (vi) if in /g and any given Contract Year the amount overages of Product ordered for delivery is greater than [***] ([***]) [***], the price per gram will be $[***]. The Product Prices set forth in the immediately preceding sentence shall be firm through the first Contract Year ending on September 30, 2004, the date of October 1, 2004 being hereinafter referred to as the “Adjustment Date”. From and after the Adjustment Date, the Product Prices shall be adjusted to reflect increases or decreases in the cost to MALLINCKRODT of all raw materials, directly associated regulatory compliance costs and all directly allocated labor (all of which costs are hereinafter referred to as “Product Costs”) [***] compared to the immediately preceding Contract Year, in accordance with the following procedures. Within fifteen (15) days after the end of each Contract Year hereunder during the term hereof, MALLINCKRODT will notify AMYLIN in writing of the amount by which its Product Costs hereunder have changed during the immediately preceding Contract Year period and, if applicable, the adjusted Product Price to be charged for the next Contract Year just commenced as a consequence of such changes (“Annual Adjustment Notice”). The amount of any change in the Product Prices as set forth in any Annual Adjustment Notice shall be effective for all Product invoices by MALLINCKRODT to AMYLIN in accordance herewith during the Contract Year for which such Annual Adjustment Notice is issued. 2.5 If, with respect to any given Contract Year, it is clear that the annual volume assumptions on which the Product Prices reflected in any one or more invoices for Product shipped to AMYLIN during such Contract Year are based are incorrect, then within thirty (30) days after the end of such Contract Year, MALLINCKRODT will send corrected invoices to AMYLIN indicating the actual per gram price for Product shipped during such Contract Year with respect to such invoices based on the actual volume of Product ordered for delivery during such Contract Year. If, on the basis of all such corrected invoices with respect to a particular Contract Year, when considered in the aggregate, the amount paid or payable by AMYLIN for Product shipped during such Contract Year against invoices previously issued by MALLINCKRODT is in excess of the amount payable by AMYLIN pursuant to all such corrected invoices then MALLINCKRODT shall, contemporaneous with the delivery of such corrected invoices and at AMYLIN’s option, give AMYLIN a full refund of the excess amount or, with respect to any previously issued but as yet unpaid invoice, issue an appropriate credit equal to the excess amount of any such invoice. If, on the basis of all such corrected invoices with respect to a particular Contract Year, when considered in the aggregate, the amount paid or payable by AMYLIN for Product shipped during such Contract Year against invoices previously issued by MALLINCKRODT is less than the amount payable by AMYLIN pursuant to all such corrected invoices, then AMYLIN shall, within thirty (30) days after the receipt of such corrected invoices, pay to MALLINCKRODT the full additional amount due as reflected on such corrected invoices. 2.6 Notwithstanding Paragraph 2.5 set forth immediately above, AMYLIN shall have the right (through any independent agents or representatives that are reasonably acceptable to MALLINCKRODT and upon advance written notice to MALLINCKRODT), with respect to any Contract Year ending not more than [***] ([***]) months prior to the date of notice requesting an audit, to audit the books and records of MALLINCKRODT to determine whether or not the amounts reflected on any original invoices relevant to any such Contract Year or any corrected invoices issued by MALLINCKRODT to AMYLIN in accordance with Paragraph 2.5 set forth immediately above are accurate, and in particular (without limitation) whether or not the Product Costs as reflected in any Annual Adjustment Notice have been reported and invoiced correctly by MALLINCKRODT, as applicable in any given case. In the event that, as a consequence of any such audit or examination, AMYLIN reasonably disagrees with any amounts set forth on original or corrected invoices issued by MALLINCKRODT, AMYLIN shall inform MALLINCKRODT in writing and in reasonable detail of the amounts to be refunded and, unless and to the extent MALLINCKRODT disputes the amounts set forth by AMYLIN in any such notice, MALLINCKRODT will refund to AMYLIN any such undisputed amounts within fifteen (15) days of the receipt of any such notice from AMYLIN. In the event MALLINCKRODT does dispute all or any portion of any refund claimed by AMYLIN, MALLINCKRODT will so notify AMYLIN within such fifteen (15) day period and the parties will attempt thereafter to resolve such dispute amicably and, if they cannot do so, may agree to submit the dispute to binding arbitration or independently pursue any other remedies available to them to resolve such dispute. AMYLIN shall bear the expense of such audit; provided, however, that, if such audit reflects overpayments by AMYLIN, which are undisputed or confirmed as overpayments pursuant to the dispute resolution procedure referred to in the preceding sentence, in excess of [***] percent (]g will cost $[***]%) of the payments actually due by AMYLIN hereunder for the applicable period, then MALLINCKRODT shall reimburse AMYLIN for the reasonable expenses of such audit. 2.7 At the time of shipment by MALLINCKRODT to AMYLIN of any Lot hereunder, MALLINCKRODT shall submit to AMYLIN an invoice setting forth the total amount of /g. • Prices are based on current Product being shipped to AMYLIN and the amount due to MALLINCKRODT pursuant Specifications. The parties agree that changes to the volume assumptions made Product Specifications that are set forth in accordance with Paragraph 2.4 hereof. Each such invoice shall also contain a certification that the Product for which AMYLIN is being billed has been produced fully in conformance with Product Requirements. Any such invoice shall be payable by AMYLIN within sixty (60) days after AMYLIN’s receipt of such invoice. 2.8 Within thirty (30) days after the Effective Date, AMYLIN shall submit to MALLINCKRODT a rolling forecast of Product that AMYLIN in good faith estimates it will order from MALLINCKRODT for the first Contract Year (as updated on a rolling basis, the “Contract Year Forecast”). Thereafter, on and Exhibit 1 as of the first day Effective Date to reflect requirements for commercial supply will not result in any change to the prices set forth above; provided, however that, if such changes to the Product Specifications reflect process capabilities that are outside the process capabilities demonstrated by Bachem in manufacturing validation batches, then the parties will discuss whether such prices would require adjustment as a consequence. Any change in pricing would require the written consent of each both parties. • Pricing also includes stability testing of one single lot per calendar [***]year, AMYLIN will furnish MALLINCKRODT with an updated Contract Year Forecast indicating AMYLIN’s good faith estimate according to the protocol given in Appendix A. 2.6 Any federal, state, county of municipal sales or use tax, excise or similar charge, or other tax assessment (other than that assessed against income), license fee or other charge lawfully assessed or charged on the amounts manufacture, sale or transportation of Product it expects sold pursuant to order during the next [***] ([***]this Agreement shall be paid by Amylin, provided evidence of such charge is provided to Amylin in * Confidential Treatment Request(ed) month period. The Contract Year Forecast will be non-binding and will be used by MALLINCKRODT for production planning, but in all circumstances AMYLIN shall act in good faith and with reasonable care to submit forecasts for Product which are as accurate as possible under the circumstanceswriting.

Purchase and Sale of Product. 2.1 MALLINCKRODT understands and Bachem agrees that AMYLIN shall have the right to manufacture Product itself or have Product manufactured by other manufacturersusing the process described in the Batch Production Records, subject to the terms and conditions of this Agreement. 2.2 MALLINCKRODT Bachem agrees to manufacture and supply to AMYLIN Exenatide in quantities set forth in Purchase Orders submitted by Amylin in accordance with this Agreement. The following table sets forth the amounts quantities of Product that Amylin estimates, as ordered by AMYLIN pursuant of the Effective Date, that it will purchase during the period commencing [***] and ending [***]. [***] [***] Commencing on the Effective Date Amylin will supply to written purchase orders issued hereunder by AMYLIN using Bachem rolling [***] forecasts containing its estimated requirements of Product, [***]. This may be a form fixed amount or a range of purchase order mutually acceptable to both parties (“quantities. Amylin shall update such forecasts every [***]. Amylin shall submit Purchase Order”), Orders specifying the quantityquantity of Product ordered, Nominal Lot quantitythe required delivery date, and any special instructions. Purchase Orders for delivery date. AMYLIN shall submit each Purchase Order to MALLINCKRODT of Product in [***], will be issued (A) no later than [***], and (B) at least [***] (in advance of the requested delivery date, provided that such [***] lead time may be reduced by [***]) months in advance of the shipment date specified in the , if Amylin pre-purchases Materials. The Purchase Order and otherwise Orders issued in accordance with the requirements hereof. In the event that AMYLIN requests a change to a Purchase Order, MALLINCKRODT shall use commercially reasonable efforts to accommodate such request. All Purchase Orders shall this Section 2.2 will be subject to written acceptance by MALLINCKRODT, which acceptance shall not unreasonably be withheld or delayed. Notwithstanding any other provision hereof, except with respect to Product volumes, delivery dates binding on both Seller and shipping instructions, no term or condition of any Purchase Order issued by AMYLIN, any acknowledgement by MALLINCKRODT or any other document of either party that is in any manner additional to, different from or varies the terms and conditions hereof shall be deemed to be of any force or effectBuyer. 2.3 Notwithstanding The price for the provisions of Paragraph 2.2 above, AMYLIN agrees to purchase from MALLINCKRODT (except to the extent MALLINCKRODT does not accept a Purchase Order pursuant to Paragraph 2.2 above): (i) during the period from the Effective Date through the end of the first Contract Year hereof (i.e., during the period from October 1, 2003 through September 30, 2004) a minimum of Product shall be based on [***] ([***]) [***] (as set forth below and includes the costs of Materials and analytical release testing. If Materials’ costs or [***]) of Product which will consist of the Product Validation Lots, (ii) during the second Contract Year, a minimum of [***] ([***]) [***] (or [***]) of Product, (iii) during the third Contract Year hereof, a minimum of [***] ([***]) [***] (or [***]) of Product, and (iv) during the fourth Contract Year and every subsequent Contract Year thereafter, at least [***] percent ([***]%) of the total quantity of Product purchased waste disposal costs change by AMYLIN during each Contract Year for the manufacture of Exenatide Injection Drug for commercial sale anywhere in the world that MALLINCKRODT has authorized reference of its Drug Master File for Product or [***] ([***]) [***] of Product whichever is greater. Notwithstanding the above, AMYLIN shall not be required to purchase Product under this Agreement unless MALLINCKRODT manufactures and delivers all Product Validation Lots meeting all Product Requirements and Validation Requirements in accordance with this Agreement. 2.4 For each gram of Product supplied hereunder by MALLINCKRODT, AMYLIN will pay to MALLINCKRODT a price per gram based on the cumulative volume of Product ordered for supply during any given Contract Year. The per gram price to be billed to AMYLIN for any Lot or other discrete volume of Product shipped to AMYLIN during any Contract Year will be at the applicable price for Product based on the most recent Contract Year Forecast submitted by AMYLIN prior to the shipment by MALLINCKRODT of any such amount of Product. Based on the foregoing, AMYLIN will pay to MALLINCKRODT a per gram price for Product (“Product Price”) in accordance with the following: (i) if in any given Contract Year the amount of Product ordered for delivery is less more than or equal to [***] ([***]) [***], the price per gram for the Product may be adjusted, subject to the parties’ mutual written agreement, to reflect the change in such costs. Prices will be $[***], (ii) if in any given Contract Year the amount of Product ordered for delivery is greater than following: [***] ([***]) * Based on current specifications. The parties agree that changes to the Product Specifications that are set forth in Exhibit 1 as of the Effective Date to reflect requirements for commercial supply will not result in any change to the prices set forth above; provided, however that, if such changes to the Product Specifications reflect process capabilities that are outside the process capabilities demonstrated by Bachem in manufacturing validation batches, then the parties will discuss whether such prices would require adjustment as a consequence. If certain process improvements can be identified post approval, Bachem and Amylin will jointly decide on a course of action, provided that no change to the manufacturing process for Products may be implemented without Amylin’s prior written approval. Bachem will quote for the work this implementation of changes involves. Amylin can then elect to pursue this option. Any cost savings that ensue from the implementation of these changes would be [***] but less between the parties. 2.4 Any federal, state, county of municipal sales or use tax, excise or similar charge, or other tax assessment (other than that assessed against income), license fee or equal to [***] ([***]) [***]other charge lawfully assessed or charged on the manufacture, the price per gram will be $[***], (iii) if in any given Contract Year the amount sale or transportation of Product ordered for delivery is greater than or equal sold pursuant to [***] ([***]) [***] but less than or equal to [***] ([***]) [***], the price per gram will be $[***], (iv) if in any given Contract Year the amount of Product ordered for delivery is greater than [***] ([***]) [***] but less than or equal to [***] ([***]) [***], the price per gram will be $[***], (v) if in any given Contract Year the amount of Product ordered for delivery is greater than [***] ([***]) [***] but less than or equal to [***] ([***]) [***], the price per gram will be $[***], and (vi) if in any given Contract Year the amount of Product ordered for delivery is greater than [***] ([***]) [***], the price per gram will be $[***]. The Product Prices set forth in the immediately preceding sentence this Agreement shall be firm through the first Contract Year ending on September 30paid by Amylin, 2004, the date of October 1, 2004 being hereinafter referred to as the “Adjustment Date”. From and after the Adjustment Date, the Product Prices shall be adjusted to reflect increases or decreases in the cost to MALLINCKRODT of all raw materials, directly associated regulatory compliance costs and all directly allocated labor (all of which costs are hereinafter referred to as “Product Costs”) [***] compared to the immediately preceding Contract Year, in accordance with the following procedures. Within fifteen (15) days after the end of each Contract Year hereunder during the term hereof, MALLINCKRODT will notify AMYLIN in writing of the amount by which its Product Costs hereunder have changed during the immediately preceding Contract Year period and, if applicable, the adjusted Product Price to be charged for the next Contract Year just commenced as a consequence provided evidence of such changes (“Annual Adjustment Notice”). The amount of any change charge is provided to Amylin in the Product Prices as set forth in any Annual Adjustment Notice shall be effective for all Product invoices by MALLINCKRODT to AMYLIN in accordance herewith during the Contract Year for which such Annual Adjustment Notice is issuedwriting. 2.5 If, with respect to any given Contract Year, it is clear that the annual volume assumptions on which the Product Prices reflected in any one or more invoices for Product shipped to AMYLIN during such Contract Year are based are incorrect, then within thirty (30) days after the end of such Contract Year, MALLINCKRODT will send corrected invoices to AMYLIN indicating the actual per gram price for Product shipped during such Contract Year with respect to such invoices based on the actual volume of Product ordered for delivery during such Contract Year. If, on the basis of all such corrected invoices with respect to a particular Contract Year, when considered in the aggregate, the amount paid or payable by AMYLIN for Product shipped during such Contract Year against invoices previously issued by MALLINCKRODT is in excess of the amount payable by AMYLIN pursuant to all such corrected invoices then MALLINCKRODT shall, contemporaneous with the delivery of such corrected invoices and at AMYLIN’s option, give AMYLIN a full refund of the excess amount or, with respect to any previously issued but as yet unpaid invoice, issue an appropriate credit equal to the excess amount of any such invoice. If, on the basis of all such corrected invoices with respect to a particular Contract Year, when considered in the aggregate, the amount paid or payable by AMYLIN for Product shipped during such Contract Year against invoices previously issued by MALLINCKRODT is less than the amount payable by AMYLIN pursuant to all such corrected invoices, then AMYLIN shall, within thirty (30) days after the receipt of such corrected invoices, pay to MALLINCKRODT the full additional amount due as reflected on such corrected invoices. 2.6 Notwithstanding Paragraph 2.5 set forth immediately above, AMYLIN shall have the right (through any independent agents or representatives that are reasonably acceptable to MALLINCKRODT and upon advance written notice to MALLINCKRODT), with respect to any Contract Year ending not more than [***] ([***]) months prior to the date of notice requesting an audit, to audit the books and records of MALLINCKRODT to determine whether or not the amounts reflected on any original invoices relevant to any such Contract Year or any corrected invoices issued by MALLINCKRODT to AMYLIN in accordance with Paragraph 2.5 set forth immediately above are accurate, and in particular (without limitation) whether or not the Product Costs as reflected in any Annual Adjustment Notice have been reported and invoiced correctly by MALLINCKRODT, as applicable in any given case. In the event that, as a consequence of any such audit or examination, AMYLIN reasonably disagrees with any amounts set forth on original or corrected invoices issued by MALLINCKRODT, AMYLIN shall inform MALLINCKRODT in writing and in reasonable detail of the amounts to be refunded and, unless and to the extent MALLINCKRODT disputes the amounts set forth by AMYLIN in any such notice, MALLINCKRODT will refund to AMYLIN any such undisputed amounts within fifteen (15) days of the receipt of any such notice from AMYLIN. In the event MALLINCKRODT does dispute all or any portion of any refund claimed by AMYLIN, MALLINCKRODT will so notify AMYLIN within such fifteen (15) day period and the parties will attempt thereafter to resolve such dispute amicably and, if they cannot do so, may agree to submit the dispute to binding arbitration or independently pursue any other remedies available to them to resolve such dispute. AMYLIN shall bear the expense of such audit; provided, however, that, if such audit reflects overpayments by AMYLIN, which are undisputed or confirmed as overpayments pursuant to the dispute resolution procedure referred to in the preceding sentence, in excess of [***] percent ([***]%) of the payments actually due by AMYLIN hereunder for the applicable period, then MALLINCKRODT shall reimburse AMYLIN for the reasonable expenses of such audit. 2.7 At the time of shipment by MALLINCKRODT to AMYLIN of any Lot hereunder, MALLINCKRODT shall submit to AMYLIN an invoice setting forth the total amount of Product being shipped to AMYLIN and the amount due to MALLINCKRODT pursuant to the volume assumptions made in accordance with Paragraph 2.4 hereof. Each such invoice shall also contain a certification that the Product for which AMYLIN is being billed has been produced fully in conformance with Product Requirements. Any such invoice shall be payable by AMYLIN within sixty (60) days after AMYLIN’s receipt of such invoice. 2.8 Within thirty (30) days after the Effective Date, AMYLIN shall submit to MALLINCKRODT a rolling forecast of Product that AMYLIN in good faith estimates it will order from MALLINCKRODT for the first Contract Year (as updated on a rolling basis, the “Contract Year Forecast”). Thereafter, on and as of the first day of each calendar [***], AMYLIN will furnish MALLINCKRODT with an updated Contract Year Forecast indicating AMYLIN’s good faith estimate of the amounts of Product it expects to order during the next [***] ([***]) month period. The Contract Year Forecast will be non-binding and will be used by MALLINCKRODT for production planning, but in all circumstances AMYLIN shall act in good faith and with reasonable care to submit forecasts for Product which are as accurate as possible under the circumstances.