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These excerpts taken from the SHPGY 10-Q filed Nov 7, 2006. ARTICLE II Section 2.1. Collaboration Products. Pursuant to the terms and conditions of this Agreement, Shire shall exclusively purchase from Duramed, and Duramed shall supply to Shire, Shire’s requirements for Collaboration Products, including for Development activities under the Product Development Agreement, in placebo and active forms. Upon Development of a Collaboration Product under the Product Development Agreement, the Parties shall attach hereto mutually agreed Exhibits applicable to the supply of such Collaboration Product. This Agreement, together with such Exhibits, shall be considered a separate agreement for each Collaboration Product. Duramed shall have no obligation to supply any Collaboration Product that has not been reduced to final finished dosage form under the applicable Development Plan, and all Exhibits hereto shall be consistent with such final finished dosage form. Section 2.2. Cooperation on Manufacturing Plan. The Parties acknowledge that Duramed will require certain minimum lead times and may have various options for manufacturing Shire Product hereunder, which options may include (i) building a dedicated manufacturing plant, which plant may or may not include excess capacity, (ii) utilizing excess capacity at existing manufacturing plants, (iii) expanding capacity at existing manufacturing plants, or (iv) combinations of the foregoing. Within [*] following the Effective Date (with respect to each Collaboration Product), the Parties shall meet to develop non-binding forecasts for capacity planning purposes of Shire’s anticipated needs for each Shire Product for clinical and commercial purposes over the clinical testing period and (i) the twelve (12) month period following first commercial launch of each Shire Product; and (ii) the 36 month period following the first commercial launch of each Shire Product. Thereafter, the Parties shall meet on an as-required basis, but no less than once each calendar quarter, to update such capacity planning forecast. The Parties shall also reasonably cooperate to develop non-infringing manufacturing techniques for Collaboration Products. Section 2.3. Initial Forecast and Purchase Order. At least [*] prior to the first anticipated clinical use or commercial launch for a Shire Product, Shire shall submit to Duramed an initial forecast (the “Initial Forecast”), which Initial Forecast shall be updated thereafter in accordance with Section 3.1. Notwithstanding any other provision of this Agreement, in no event shall Shire submit a Purchase Order for any initial order of a Shire Product [*] prior to the required delivery date for such initial order. Section 2.4. Initial Implementation Meeting. No later than thirty (30) days after the receipt of an initial Purchase Order, Duramed and Shire shall hold an initial implementation meeting (at such time and place or by such means as are mutually agreed by the Parties) to develop specific implementation requirements for the supply of Shire Product to Shire. Thereafter, Duramed and Shire shall conduct implementation-planning meetings as reasonably required by the Parties in order to update and discuss (i) the current status of Duramed’s implementation activities, and (iii) the status of any actual and anticipated problem areas, their impact on the work efforts of Duramed, and actions being taken and/or needed to be taken by the Parties in order to reduce the potential impact of such problems. 3
ARTICLE II Section 2.1. Purchase of Products. Pursuant to the terms and conditions of this Agreement, Duramed shall purchase from Shire, and Shire shall supply to Duramed Products. Section 2.2. Initial Forecast and Purchase Order. (a) Promptly following the date hereof, Duramed shall submit to Shire (i) an initial non-binding forecast (the “Initial Forecast”), which Initial Forecast shall be updated thereafter in accordance with Section 3.1; and (ii) Duramed’s initial Purchase Order (the “Initial Order”) for Products. 2 (b) Refund for Certain Product Included in the Initial Order. After the Effective Date, Duramed will use its commercially reasonable efforts to sell the Products included in the Initial Order on a first-in, first-out basis. In the event that any product included in the Initial Order cannot be sold by Duramed prior to the date on which such Product has reached twelve (12) months of remaining shelf life, Shire will reimburse Duramed for amounts paid by Duramed under Section 6.1 of this Agreement for such unsellable Products included in the Initial Order. For reference purposes, Schedule 3 sets forth the quantities of inventory of Products in finished goods form held by Shire as of the date hereof. (c) No later than the Closing Date, Shire shall sell and deliver to Duramed such quantities of Products reflected in such Initial Order, all in Shire labeled packaging, unless Duramed engages a Third-Party to repackage the Product with Duramed labeling at Duramed’s sole cost and expense. Other than the Initial Order, in no event shall Duramed submit a Purchase Order for Products less than three (3) months prior to the required delivery date for such order. Section 2.3. Assignment of Shire Supply Agreement. At Duramed’s request, commencing as of and after the date hereof, Shire shall use its commercially reasonable best efforts to provide reasonable cooperation to assist in the assignment of Shire’s existing third party supply agreement with respect to the Product to Duramed, including assisting Duramed in obtaining diligence information and other data in connection with such third party supply agreement. Duramed shall not be obligated to accept assignment of such third party supply contract other than at Duramed’s sole option and discretion. Section 2.4 CBE 30 Request. As promptly as practicable (but in no event more than three business days ) following the date hereof, Shire shall file a “CBE 30” request to designate Duramed (or such other party as Duramed may designate in its discretion) as an alternative packager/repackager for the Products using Duramed labels. Share shall provide reasonable assistance, at Duramed’s costs, to assist Duramed in obtaining a minimum of [*] of saleable finished goods inventory of the Products bearing Duramed labeling and artwork no later than two business days following Closing. Section 2.5 Purchase Prior to Closing. Prior to the Effective Date, Duramed (or its designee) shall have the option to purchase such amount of existing Shire inventory of the Products existing and in the possession of Shire for the purpose of repackaging such inventory into finished goods inventory bearing Duramed labeling and artwork. Any such purchase of inventory prior to the Effective Date shall correspondingly reduce the amount of inventory Duramed is obligated to purchase in the Initial Order pursuant to Section 2.3 hereof. | EXCERPTS ON THIS PAGE:
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