Exhibit 10.49

 

***Text Omitted and Filed Separately

Confidential Treatment Requested

Under 17 C.F.R. §§ 200.80(b)(4)

And 240.24b-2

 

Commercial Supply Agreement for Exenatide

 

This Agreement, effective as of December 23, 2003, is made by and among Amylin
Pharmaceuticals, Inc. (“Amylin”) having a principal place of business at 9360
Towne Centre Drive, San Diego, CA 92121, and Bachem, Inc., a California
corporation (“Bachem”), having a principal place of business at 3132 Kashiwa
Street, Torrance, CA 90505. References to any of Amylin or Bachem includes
reference to their respective Affiliates.

 

Whereas, Bachem previously manufactured for Amylin a compound referred to as
Exenatide (as defined below).

 

Whereas, Amylin wishes to engage Bachem to manufacture clinical trial,
regulatory registration and commercial supplies of Exenatide on behalf of
Amylin.

 

Whereas, Bachem desires to manufacture for Amylin clinical trial, regulatory
registration and commercial supplies of Exenatide; and

 

Now, Therefore, in consideration of the premises and the mutual covenants and
agreements contained herein, Bachem and Amylin agree as follows:

 

1.             Definitions

 

As used in this Agreement, the following words and phrases shall have the
following meanings:

 

1.1       “Affiliate” of a party hereto means any entity which directly or
indirectly, through one or more intermediaries, controls, is controlled by or is
under common control with such party where “controlling,” “controlled” and
“under common control” means the direct or indirect beneficial ownership of at
least fifty percent (50%) of the stock, or a fifty percent (50%) or greater
interest in the income, of such party or entity, as applicable.

 

1.2       “Applicable Laws” shall mean all applicable statutes, ordinances,
regulations, rules, or orders of any kind whatsoever of any governmental
authority (including any amendments thereto), applicable to the import, export,
manufacture and distribution of Product, including, without limitation, the
applicable regulations and guidelines of the FDA and all applicable current good
manufacturing practices, including, without limitation, the cGMPs.

 

1.3       “Bachem Technology” means all technical information, whether tangible
or intangible and whether or not patentable, including patents, and any method,
procedure, process, assay, composition of matter, trade secret, invention,
technology, information or other subject matter, including license application
materials and all supporting documents, specifications for materials (including
purification techniques), data, information (including information contained in
registration dossiers, drug master files and other documents filed with
Regulatory Authorities), quality control, validation and equipment necessary or
useful for the manufacture, production, scale-up, processing or formulation of
Product, which (a) Bachem conceived, reduced to practice, developed or obtained
(or which Bachem has the ability to license or sublicense), or (b)

 

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is otherwise necessary or useful in the manufacture of the Product.

 

1.4       “Batch Production Records” means the lot production records for the
Batches manufactured by Bachem pursuant to this Agreement.

 

1.5       “cGMPs” shall mean then-current Good Manufacturing Practices as
specified in ICH Guideline Q7A, the United States Code of Federal Regulations,
or equivalent laws, rules, or regulations of an applicable Regulatory Authority
at the time of manufacture.

 

1.6       “Collaboration Partner” means Eli Lilly and Company, with whom AMYLIN
has entered into a collaboration arrangement regarding Product.

 

1.7       “Contaminant” means any substance contained in the Product that (A)
causes the Product to fail to meet any Product Specifications, (B) causes the
Product to be adulterated within the meaning the Act, (C) is present in the
Product at a level that exceeds the level allowed under Applicable Laws.

 

1.8       “DMF” shall mean a drug master file for Product in the United States
(as such term is defined in 21 C.F.R. Part 314.420) or Europe.

 

1.9     “Effective Date” means the later date of execution written on the
execution page of this Agreement.

 

1.10         “Facility” means the facility in Torrance, California where Product
is manufactured by Bachem under this Agreement.

 

1.11         “FDA” means the United States Food and Drug Administration and any
successor entity.

 

1.12         “Hidden Defect” means a defect in any shipment of Product that
could not reasonably be expected to have been found by diligent and adequate
inspection by Amylin pursuant to Section 4.1, such as the presence of any
Contaminant or failure to follow cGMPs.

 

1.13         “Materials” shall mean, collectively, all raw materials,
ingredients and packaging components required to produce Product in accordance
with the Product Specifications.

 

1.14         “NDA” means a New Drug Application to make and/or sell commercially
Product, filed with the FDA (as more fully defined in 21 C.F.R. Part 314.5 et
seq.) or with a Regulatory Authority in any jurisdiction outside of the United
States, and all amendments and supplements thereto filed therewith.

 

1.15         “Product” means the bulk drug substance, Exenatide, manufactured
under this Agreement.

 

1.16         “Product Specifications” means the written specifications for
Product set forth in Exhibit 1, as amended from time to time in accordance with
the Quality Agreement.

 

1.17         “Purchase Order” means Amylin firm orders for Product under this
Agreement issued on Amylin’s form of purchase order.

 

1.18         “Quality Agreement” means that certain Quality Agreement dated as
of the Effective Date between Amylin and Bachem containing, identifying and
outlining the specifications, and certain

 

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of the technical and compliance terms and conditions, for the manufacture of
Product under this Agreement. The Quality Agreement is incorporated into and
made a part of this Agreement.

 

1.19         “Regulatory Approval” means (a) in the United States, approval by
the FDA of an NDA for the Product, and satisfaction of any related applicable
FDA registration and notification requirements, if any, and (b) in any country
other than the United States, approval by Regulatory Authorities having
jurisdiction over such country of a single application or set of applications
with respect to a Product comparable to an NDA, and satisfaction of any related
applicable regulatory and notification requirements, if any, including pricing
approvals where applicable, together with any other approval necessary to make,
use, import, package, label, market, and sell Product commercially in such
country.

 

1.20         “Regulatory Authority” means the FDA in the United States, or the
applicable regulatory agency or entity having the responsibility, jurisdiction,
and authority to approve the manufacture, use, importation, packaging, labeling,
marketing, and sale of Product in any country other than the United States.

 

2.     Purchase and Sale of Product

 

2.1                  Bachem agrees to manufacture Product using the process
described in the Batch Production Records, subject to the terms and conditions
of this Agreement.

 

2.2                  Bachem agrees to manufacture and supply Exenatide in
quantities set forth in Purchase Orders submitted by Amylin in accordance with
this Agreement. The following table sets forth the quantities of Product that
Amylin estimates, as of the Effective Date, that it will purchase during the
period commencing [***] and ending [***].

 

[***]

 

 

[***]

 

Commencing on the Effective Date Amylin will supply to Bachem rolling [***]
forecasts containing its estimated requirements of Product, [***]. This may be a
fixed amount or a range of quantities. Amylin shall update such forecasts every
[***]. Amylin shall submit Purchase Orders specifying the quantity of Product
ordered, the required delivery date, and any special instructions. Purchase
Orders for delivery 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 [***], 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 [***], the price
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:  [***]

 

 

* 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

 

* Confidential Treatment Request(ed)

 

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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 [***] 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 other charge lawfully assessed or charged on the
manufacture, sale or transportation of Product sold pursuant to this Agreement
shall be paid by Amylin, provided evidence of such charge is provided to Amylin
in writing.

 

3.     Manufacture of Product

 

3.1   Changes in the manufacturing site or the materials, equipment, process, or
procedures used to manufacture the Products shall be handled by the parties as
stated in the Quality Agreement. Bachem shall obtain Amylin’s prior written
approval before it implements any such change. Amylin shall have the right to
raise with Bachem any perceived deficiencies regarding any aspect of Bachem’s
manufacture of Product. In the event that Amylin raises with Bachem any such
deficiency both parties will engage in negotiations regarding remedial action.
Upon mutual agreement, (A) Bachem shall, at its sole cost, promptly submit to
Amylin a written plan to correct any such deficiency and promptly correct any
such deficiency to Amylin’s satisfaction, (B) Amylin shall reimburse Bachem for
any reasonable incremental one-time costs associated with such changes while any
ongoing costs associated with such changes shall be reviewed by the parties and
allocated between Amylin and Bachem as mutually agreed upon by the parties at
such time. If such corrections are required to bring the Facility into
compliance with Applicable Laws, then Bachem shall bear all associated costs.

 

3.2   Product Specifications may be modified from time to time by written
agreement of the parties without the necessity of amending this Agreement.
However, no changes in the Product Specifications will be made unless made in
accordance with the terms and conditions of the Quality Agreement. If Amylin
requests a change in the Product Specifications that would result in a material
increase in Bachem’s cost of manufacture, the parties shall discuss what impact,
if any, such change should have on the price of Product. If either Bachem agrees
to implement such change without additional charge, or Amylin agrees in writing
to a proposed price increase to implement such change, the price change shall
become effective only with respect to those orders of Product that are
manufactured in accordance with the modified Product Specifications.  If a
Regulatory Authority requires a change in the Product Specifications that would
result in a material increase in Bachem’s cost of manufacture, the parties shall
discuss what impact, if any, such change should have on the price of Product and
Amylin shall bear the increased cost.

 

3.3   Bachem and Amylin shall comply with the terms and conditions of the
Quality Agreement.  Bachem shall manufacture, package, label, and supply Product
in

 

* Confidential Treatment Request(ed)

 

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accordance with the Product Specifications, cGMPs, the NDA, DMF or other
applicable Regulatory Approvals, and all applicable rules and regulations of
Regulatory Authorities with jurisdiction over the manufacture, packaging,
labeling, use or sale of Product, as they may be amended from time to time.
Bachem’s responsibilities and obligations with respect to the manufacture of
Products as set forth in this Section 3.3 are hereinafter referred to as the
“Manufacturing Requirements.”  Bachem shall perform such quality control testing
prior to shipment of Product to Amylin as is required to ensure that the
Products delivered to Amylin under this Agreement comply with the Manufacturing
Requirements and warranties described in Section 8, which testing shall include,
without limitation, the performance of all required release testing and
stability testing using the Amylin Test Methods and other tests designated by
Amylin as found in Appendix A of this Agreement. Bachem shall perform such tests
itself or, with Amylin’s prior written consent, cause to be tested by a third
party, each lot of Product before delivery, and shall provide to Amylin (A) a
certificate of analysis containing the quality control test results for each
such lot, and confirming that each such lot of Product conforms to the Product
Specifications (the “Certificate of Analysis”), (B) a Certificate of Conformance
confirming that such lot of Product was made in accordance with cGMPs and the
process defined in the approved master batch record for such Product, and (C)
copies of documents detailing any deviations from any manufacturing processes
then in effect (the documents and information described in (A), (B) and (C), the
“Bachem Release Documents”). Upon completion of the manufacture and testing of
each lot of Product ordered by Amylin under this Agreement, Bachem shall send
all the Bachem Release Documents to Amylin. Amylin is entitled to rely on the
Bachem Release Documents for all purposes of this Agreement.

 

3.4   Bachem shall be responsible for obtaining any Materials required for the
manufacture of Product, in reasonable quantities consistent with Amylin’s orders
for Product and in accordance with the requirements of Section 8.1(H). Bachem
shall use and rotate all stock of Materials on a first-in, first-out basis as
required by cGMPs. Amylin shall assign lot numbers and retest dates to each lot
of Product, and Bachem shall imprint such lot numbers and retest dates on each
unit of Product shipped as required by cGMPs.

 

3.5   Bachem shall keep complete, accurate, and authentic accounts, notes, data,
and records pertaining to its manufacture, processing, testing, packaging,
storage and distribution of Product, including, without limitation, master
production and control records and Product complaint files, in accordance with
Applicable Laws. In addition, Bachem shall retain samples of Products and
isolated intermediates of each lot manufactured pursuant to this Agreement for a
period of five (5) years after Amylin’s acceptance of such lot. The sample size
shall be twice the size necessary to conduct quality control testing. Bachem
shall retain such records and samples for a period of five (5) years following
the date of manufacture, or longer if required by Applicable Laws, and, upon
request, shall make available to Amylin and its Collaboration Partner copies of
such records and portions of the samples. After such time period, Bachem shall
notify Amylin prior to destroying such records and samples and, at Amylin’s
request and expense, shall provide such records and samples to Amylin. Bachem
shall permit Amylin and its Collaboration Partner and their respective
representatives with access during reasonable business hours and after
reasonable notice to those areas of Bachem’s manufacturing facilities where
Product is manufactured, stored and handled and to manufacturing records, and
testing and control records (including without limitation release and stability
records), of Product manufactured by Bachem, so that Amylin and

 

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its Collaboration Partner and their respective representatives may perform a
quality assurance audit of such facilities and activities. Use of all
information gained in the course of audits is restricted to the purpose of
Quality Assurance. Likewise, Bachem shall grant similar access to governmental
regulatory agencies upon reasonable notice so that such agencies can perform
inspections of its facilities.

 

3.6   Bachem shall promptly advise Amylin of any notice or request it receives
from a Regulatory Authority or other governmental agency regarding inspection of
its facilities relating to its manufacture of Product, and shall permit Amylin
and its Collaboration Partner and their respective representatives to attend
such inspection. Bachem shall provide to Amylin and its Collaboration Partner
all correspondence and reports that it receives from a Regulatory Authority or
other governmental agency in connection with the manufacture of Product or with
respect to the facility(ies) at which Bachem manufactures Product. Bachem shall
retain the right to delete information from these reports that would breach a
confidentiality provision with any third party.

 

3.7   Bachem shall, at its own expense, obtain and maintain the necessary
permits required for its manufacture and supply of the Products in accordance
with this Agreement, including all required facility licenses.

 

3.8   Bachem further agrees to use its commercially reasonable efforts to assist
Amylin and its Collaboration Partner in obtaining FDA approval of its NDA with
respect to Product, as well as approvals from any other government or agency
which may be required for the marketing of Product in any country. Bachem
specifically agrees to cooperate with any inspection by the FDA or other
Regulatory Authority, including but not limited to any inspection prior to
approval of Amylin’s or its Collaboration Partner’s NDA. Bachem shall, on a
timely basis, provide Amylin and its Collaboration Partner with information in
Bachem’s possession relevant to its role as the manufacturer of Products that is
reasonably necessary for and relevant to Amylin’s and its Collaboration
Partner’s efforts to obtain and maintain Regulatory Approvals for Product.
Without limiting the generality of the foregoing, Bachem agrees to establish and
maintain a DMF for the Product in accordance with the requirements of the FDA
and any other applicable Regulatory Authorities, and to provide Amylin and its
Collaboration Partner with letters of access to, and rights to reference, the
DMF and any other comparable files. Bachem shall file and establish the DMF in a
timely manner to support Amylin’s or its Collaboration Partner’s NDA filing, and
shall provide to Amylin and its Collaboration Partner such documentation, data
and other information relating to Products as Amylin or its Collaboration
Partner may require for submission to Regulatory Authorities. Bachem shall also
provide, upon request by Amylin, information concerning its production processes
and quality control procedures with respect to Products.

 

3.9   Each party shall promptly advise the others of any safety or toxicity
problem of which such party becomes aware regarding the Product.

 

3.10 Bachem shall promptly notify Amylin of any problems, supply, or other
situations that are likely to adversely affect the production of any Product, or
its timely delivery to Amylin in accordance with the Purchase Order therefor.
Amylin may participate in the resolution of any such problem or production
situation unless Amylin agrees with Bachem that such participation is
unnecessary.

 

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3.11    The conditions under which Product is manufactured shall be provided to
Amylin and its Collaboration Partner for inclusion in Amylin’s or its
Collaboration Partner’s regulatory filings. Bachem further agrees to provide to
Amylin and its Collaboration Partner all information regarding any aspect of
manufacture of Product that is necessary and related to Amylin’s or its
Collaboration Partner’s regulatory filings. Bachem also agrees to authorize the
FDA, or other Regulatory Authorities, to inspect any aspect of Bachem’s
manufacture of Product.

 

3.12 The parties agree that Amylin or its Collaboration Partner shall be the
sole and exclusive owner of all right, title and interest in and to the NDA
filed with the FDA and the other Regulatory Authorities outside of the United
States, and that Amylin or its Collaboration Partner shall be the sole and
exclusive owner of any Regulatory Approvals related to Product. Bachem shall
assist Amylin and its Collaboration Partner in the preparation of all documents
necessary to effectuate Amylin’s and its Collaboration Partner’s rights in each
NDA and Amylin’s and its Collaboration Partner’s rights to such Regulatory
Approvals, and agrees to transfer, effect, confirm, perfect, record, preserve,
protect and enforce all rights, title and interests transferred hereunder, at
the reasonable request and expense of Amylin.

 

3.13 Amylin shall disclose to Bachem, or provide Bachem with access to, the test
methods specified in the Product Specifications (“Amylin Test Methods”) for
Bachem’s use solely to perform its obligations under this Agreement. Bachem
understands and agrees that the Amylin Test Methods shall be the sole and
exclusive property and Confidential Information (as defined in Section 10) of
Amylin. Any and all inventions or discoveries, including without limitation,
information, processes, improvements, innovations, suggestions and ideas,
whether or not patentable, conceived or reduced to practice by Bachem, alone or
with others, that are related to any or all Amylin Test Methods, shall be owned
solely and exclusively by Amylin. The terms “conceived” and “reduced to
practice” shall be given the meaning of those terms as used and interpreted for
35 U.S.C. § 102 (g). Bachem will promptly notify Amylin of any such invention or
discovery.

 

3.14 During the term of this Agreement, Bachem shall not manufacture any
products containing exendin-4 and/or its analogues or derivatives covered by an
Amylin patent for any party other than Amylin with the exception of
research-grade materials.

 

4.     Acceptance of Product

 

Not later than [***] after Amylin’s receipt of all Bachem Release Documents,
Amylin shall examine the Bachem Release Documents for the Product’s compliance
with the Product Specifications and other warranties in Section 8. Amylin may
reject any shipment of Product (or part thereof) that does not conform with the
Product Specifications or other warranties in Section 8. If Amylin believes that
any such shipment does not comply with the Product Specifications or other
warranties, or is otherwise deficient, Amylin shall promptly, but not later than
[***] after receipt of all Bachem Release Documents, notify Bachem. Any such
notice of rejection shall be in writing and shall indicate the reasons for such
rejection. The invoice for any rejected Product shall be cancelled. If no such
notice of rejection is received, Amylin shall be deemed to have accepted such
shipment upon the expiration of the such [***] period. Notwithstanding the
foregoing, if there is subsequently found to be a Hidden Defect in any shipment
of Product, Amylin and Bachem shall enter into discussions in good faith as to
the handling and disposal of the

 

* Confidential Treatment Request(ed)

 

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defective shipment, having due regard to where responsibility for such defect
lies, with the understanding that Bachem shall be responsible with respect to
matters existing prior to delivery of Product to Amylin.

 

After any notice of rejection is given, Amylin shall cooperate with Bachem in
determining whether rejection is necessary or justified. Bachem will evaluate
process issues and other reasons for such non-compliance. Bachem shall notify
Amylin as promptly as reasonably possible whether it accepts Amylin’s basis for
any rejection. If Bachem in good faith disagrees with Amylin’s determination
that certain Product does not meet the Product Specifications, such Product
shall be submitted to a mutually acceptable third party laboratory. Such third
party shall determine whether such Product meets the Product Specifications, and
the Parties agree that such third party’s determination shall be final and
determinative. The party against whom the third party tester rules shall bear
all costs of the third party testing. Whether or not Bachem accepts Amylin’s
basis for rejection, promptly on receipt of a notice of rejection of Product,
Bachem shall replace such rejected Product, at its cost, within [***]. If the
third party tester rules that the lot meets Product Specifications and the other
warranties in Section 8, Amylin shall purchase that lot at the agreed-upon
price, irrespective of whether Bachem has already replaced it. All replacement
product shall be invoiced as well and Amylin is to pay for such product as
otherwise provided under the terms of this Agreement. Amylin may not destroy any
lot of Product until it receives written notification from Bachem that Bachem
does not dispute that the lot fails to meet Product Specifications and that
Bachem does not request return of the Product.  Upon authorization from Bachem
to do so, Amylin shall destroy the Product received in the rejected delivery
promptly at Bachem’s cost and provide Bachem with certification of such
destruction. Amylin shall, upon receipt of Bachem’s request for return, promptly
return said Product or quality control sample to Bachem, at Bachem’s cost.

 

4.3   In the event Amylin or its Collaboration Partner shall be required or
requested by any Regulatory Authority (or shall voluntarily decide in good
faith) to recall any Product, Amylin or its Collaboration Partner shall
coordinate such recall. If a recall arises due to Bachem’s negligence, willful
misconduct or breach of this Agreement, and does not result from Amylin’s or its
Collaboration Partner’s negligence, willful misconduct or breach of this
Agreement, then Bachem shall reimburse Amylin and its Collaboration Partner for
(i) the purchase price paid by Amylin to Bachem for such recalled Product, and
(ii) all of Amylin’s and its Collaboration Partner’s other direct reasonable
costs and expenses actually incurred by Amylin or its Collaboration Partner in
connection with the recall including, but not limited to, costs of retrieving
Product already delivered to customers, costs of replacement Product, costs and
expenses Amylin or its Collaboration Partner is required to pay for
notification, shipping and handling charges, and all other costs reasonably
related to the recall. If a recall is due to any reason other than one that is
attributable to Bachem’s negligence, willful misconduct or breach of this
Agreement, Amylin or its Collaboration Partner, as applicable, shall pay all of
the costs and expenses of the recall.

 

5.      Shipment and Delivery

 

5.1.      Bachem agrees to use its commercially reasonable efforts to ensure
that Product ordered by Amylin hereunder shall be delivered on the scheduled
delivery dates set forth in the relevant purchase orders. Bachem shall prepare
Product for shipment and arrange for shipment of Product to a location
designated in writing by Amylin. Shipment terms are FCA Bachem’s Facility
(Incoterms 2000). All shipments must be accompanied by a packing slip which
describes

 

* Confidential Treatment Request(ed)

 

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the articles, states the purchase order number and shows the shipment’s
destination. Bachem agrees to promptly forward the original bill of lading or
other shipping receipt for each shipment in accordance with Amylin’s
instructions. In accordance with Amylin’s written instructions and at Amylin’s
expense, Bachem will arrange for the shipment of Product by the carrier
designated by Amylin and for appropriate shipping insurance, and Bachem shall
ship Product to Amylin in containers reasonably sufficient for delivery of
Product in accordance with the Product Specifications.

 

5.2.      Each delivery of Product shall be governed by the terms of this
Agreement, and none of the conflicting terms or conditions of Amylin’s purchase
order or Bachem’s purchase order form, acknowledgment or invoice form shall be
applicable, except those specifying special shipping instructions and invoice
information consistent with this Agreement.

 

6.      Invoice

 

6.1   Bachem shall invoice Amylin with a single invoice concurrently with
shipment of all Bachem Release Documents to Amylin. Product accepted by Amylin
shall be shipped by Bachem to Amylin’s designated ship to address immediately
upon Amylin’s acceptance of such Product. Amylin shall pay Bachem net sixty (60)
days from the date of their receipt of invoice.

 

7.         Term and Termination

 

7.1       This Agreement shall commence on the Effective Date and, unless
earlier terminated in accordance with this Article 7, shall continue in effect
for a period of six (6) years thereafter, and shall automatically renew
thereafter from year to year unless terminated by either party upon at least two
(2) years prior written notice given to the other party at any time after the
expiry of four (4) years from the Effective Date.

 

7.2   This Agreement may be terminated as follows:

 

a)     Any party may terminate this Agreement immediately upon the bankruptcy or
insolvency of another party, Any party may terminate this Agreement by giving
the other party one- hundred-twenty (120) days’ prior written notice upon or
after the breach of any material provision of this Agreement by the other party
if the breach is not cured within the one-hundred-twenty (120) day period
following written notice of termination by the non-breaching party. Failure to
supply all quantities of Product ordered on the dates specified in an issued
Purchase Order shall be considered a material breach. The parties acknowledge
that the Collaboration Partner shall have the right, but not the obligation, to
cure a breach of any material provision of this Agreement by Amylin if Amylin
does not do so.

 

b)     Amylin may terminate this Agreement (A) by giving Bachem sixty (60) days’
prior written notice upon notice by the FDA or other Regulatory Authority that
Bachem is not an approved commercial supplier of Product or failure of Bachem to
successfully complete its Pre-Approval Inspection (PAI) or the foreign
equivalent in applicable jurisdictions outside of the United States where
Product may be distributed, marketed or sold, or (B) by giving Bachem thirty
(30) days’ prior written notice in each of the following situations: (i) the FDA
notifies Amylin that it will not approve the NDA directed to the Product, (ii)
Amylin withdraws the NDA directed to the Product or (iii) Amylin withdraws the
Product from the market. If Amylin terminates this Agreement under any of 7.2
(c)(B)(i), (ii) or (iii), then Amylin agrees to reimburse Bachem for its
reasonable and documented out-of-pocket costs for Materials

 

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and for the direct costs associated with all work in progress related to open
Purchase Orders issued by Amylin on or before the effective termination date.

 

7.3   Termination, expiration, cancellation or abandonment of this Agreement
through any means or for any reason shall not relieve the parties of any
obligation accruing prior thereto and shall be without prejudice to the rights
and remedies of either party with respect to any antecedent breach of any of the
provisions of this agreement. The provisions of Sections 3.5, 3.6, 3.12, 7.3,
7.4 and 7.5 and Articles 1, 8, 9, 10, 12, 13, 14 and 15 shall survive
termination or expiration of this Agreement.

 

7.4   In the event that this Agreement is terminated by Amylin pursuant to
Section 7.2(a), 7.2(b) or 7.2(c)(i) following the applicable cure period
provided in such sections, or in the event of a Force Majeure occurrence that
causes Bachem to be unable to supply Products in such quantities as Amylin shall
request and in compliance with the delivery periods set forth in issued Purchase
Orders and Amylin provides written notice to Bachem of its intent to terminate
this Agreement if this situation is not remedied within the one hundred twenty
(120) day period following such written notice by Amylin, then Bachem shall
provide reasonable assistance to Amylin, at Bachem’s expense, to implement the
transfer of manufacturing and testing responsibility for Product to Amylin or
its designee. Such reasonable assistance shall include all processes,
procedures, know-how and data required to perform all aspects of the site
transfer as defined by the FDA under the Changes to an Approved NDA or ANDA
guidelines, including assistance of Bachem personnel in compiling and
transferring this information, but shall not include the direct efforts of a
team of Bachem on-site at the new manufacturing facility. If such on-site
personnel commitments are required by Amylin to effectuate the transfer of
manufacturing responsibility, then Amylin shall reimburse Bachem for the
reasonable and direct expenses of providing such personnel. For purposes of this
Section 7.4, Bachem grants to Amylin an irrevocable, exclusive, worldwide fully
paid-up royalty-free license to use the Bachem Technology, with the right to
grant sublicenses, to make and have made Product, effective upon termination of
this Agreement under the circumstances described in the first sentence of this
Section 7.4.

 

7.5 In the event that this Agreement is terminated by Bachem pursuant to Section
7.2(a) or 7.2(b), then Bachem shall provide reasonable assistance to Amylin, at
Amylin’s expense, to implement the transfer of manufacturing responsibility for
the Products to Amylin or its designee as described in the preceding paragraph.

 

8.         Representations and Warranties

 

8.1   Bachem represents and warrants to Amylin, and agrees that, at the time of
delivery to Amylin, all Product delivered hereunder: (A) shall be manufactured
in compliance with cGMPs, relevant Regulatory Approvals filed by Amylin; (B)
shall conform to the Product Specifications in effect at the time of delivery;
(C) will not be adulterated within the meaning of the Federal Food, Drug and
Cosmetic Act, as amended, or within the meaning of any applicable state or
municipal law or other Applicable Law in which the definitions of adulteration
are substantially the same as those contained in the Federal Food, Drug and
Cosmetic Act, as such Act and such laws are constituted and effective at the
time of delivery or contain any Contaminant; (D) will not be an article which
may not, under the provisions of Sections 404, 505 of 512 of such Act, be
introduced into interstate commerce; (E) shall conform to all Bachem Release
Documents associated with the shipment of the Product; (F) shall be packaged,
labeled and shipped in accordance with the Product Specifications in effect at
the time of delivery and the terms of this Agreement; (G) shall be free and
clear of any lien or encumbrance. Bachem represents and warrants that it shall
comply with all Applicable Laws; and (H) shall be manufactured using amino acid
derivative starting materials that are synthetic or of plant origin, as
confirmed in certification provided to Amylin by Bachem; provided that Product
may be manufactured using amino acid derivative starting materials that are not
synthetic or if plant

 

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origin if Bachem obtains the written approval of Amylin to use such starting
materials prior to their use, and provides Amylin certification regarding use of
such starting materials that contains additional information regarding
extraction, hydrolysis procedures, organs, type of tissue and country of origin
of any animal origin amino acids. In addition, Bachem represents and warrants
that (A) Bachem and its employees, affiliates and agents have never been
debarred, or convicted of a crime for which a person can be debarred, under
subsection (a) or (b) of 21 U.S.C. § 335a, and Bachem agrees that it does not
now and will not in the future use in any capacity the services of any person
debarred under subsection (a) or (b) of 21 U.S.C. § 335a. If during the term of
this Agreement, Bachem or any other person performing services hereunder becomes
debarred or disqualified, or receives notice of an action or threat of an action
with respect to debarment or disqualification, Bachem shall immediately notify
Amylin, and (B) to the best of Bachem knowledge as of the Effective Date, the
use of the Bachem Technology as contemplated herein does not infringe any
intellectual property rights owned by any third party. Except as set forth in
this Agreement, Bachem makes no warranties, expressed or implied, with respect
to Product, and all other warranties, expressed or implied, including, without
limitation, the implied warranties or merchantability and fitness for a
particular purpose, are hereby disclaimed by Bachem.

 

8.2   Each party hereby represents and warrants to the other party that: (a)
such party is duly organized, validly existing and in good standing under the
laws of the state or other jurisdiction in which it is organized; (b) such party
has the power and authority and the legal right to enter into this Agreement and
to perform its obligations hereunder; (c) this Agreement has been duly executed
and delivered on behalf of such party, and constitutes a legal, valid, binding
obligation, enforceable against such party in accordance with its terms; (d) all
necessary consents, approvals and authorizations of all governmental authorities
and other persons required to be obtained by such party in connection with this
Agreement have been obtained, except for those which cannot be obtained prior to
the filing and approval of the NDA; and (e) the execution and delivery of this
Agreement and the performance of such party’s obligations hereunder (i) do not
conflict with or violate any law, regulation, order or other requirement of any
governmental body, court or administrative or other agency having jurisdiction
over such party and (ii) do not conflict with, or constitute a material default
or require any consent under, any agreement, instrument or understanding, oral
or written, to which it is a party or by which it may be bound.

 

8.3   IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR ANY INDIRECT, INCIDENTAL,
SPECIAL OR CONSEQUENTIAL DAMAGES INCURRED BY THE OTHER PARTY, WHETHER IN
CONTRACT OR TORT OR BASED ON A WARRANTY, EVEN IF THE OTHER PARTY HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. This paragraph shall not be
construed to limit a party’s obligations under Article 9 of this Agreement.

 

9.     Indemnification

 

9.1   Amylin shall defend, indemnify and hold Bachem and its Affiliates and
their respective employees, directors, officers, shareholders and agents (each,
an “Amylin Indemnitee”) harmless against any liability, judgment, demand,
action, suit, loss, damage, cost and other expense (including reasonable
attorney’s fees) (“Liability”) resulting from any third party claims made or
proceedings brought against Bachem to the extent such Liability arises from (i)
Amylin’s negligence or willful act or omission in the possession, use,
importation, marketing or sale of Product, (ii) Amylin’s material breach of this
Agreement, (iii) Amylin’s breach of any representation or warranty set forth in
Article 8, or (iv) any repackaging or use by or on behalf of

 

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Amylin of Product after delivery to Amylin by Bachem hereunder, in each case,
except to the extent Bachem is obligated to indemnify any Amylin Indemnitee for
such claim or proceeding under Section 9.2 below.

 

9.2       Bachem shall defend, indemnify and hold Amylin and its Collaboration
Partner and their Affiliates and their respective employees, directors,
officers, shareholders and agents harmless against any Liability resulting from
any third party claims made or proceeding brought against Amylin to the extent
that such liability arises from (i) Bachem’s negligence or willful act or
omission in the manufacture, storage or delivery of Product; (ii) Bachem’s
material breach of this Agreement; or (iii) Bachem’s breach of any
representation or warranty set forth in Article 8.

 

Each indemnified party agrees to give the indemnifying party prompt written
notice of any matter upon which such indemnified party intends to base a claim
for indemnification (an “Indemnity Claim”) under Article 9. The indemnifying
party shall have the right to participate jointly with the indemnified party in
the indemnified party’s defense, settlement or other disposition of any
Indemnity Claim. With respect to any Indemnity Claim relating solely to the
payment of money damages and which could not result in the indemnified party’s
becoming subject to injunctive or other equitable relief or otherwise adversely
affect the business of the indemnified party in any manner, and as to which the
indemnifying party shall have acknowledged in writing the obligation to
indemnify the indemnified party hereunder, the indemnifying party shall have the
sole right to defend, settle or otherwise dispose of such Indemnity Claim, on
such terms as the indemnifying party, in its sole discretion, shall deem
appropriate, provided that the indemnifying party shall provide reasonable
evidence of its ability to pay any damages claimed and with respect to any such
settlement shall have obtained the written release of the indemnified party from
the Indemnity Claim. The indemnifying party shall obtain the written consent of
the indemnified party, which shall not be unreasonably withheld, prior to
ceasing to defend, settling or otherwise disposing of any Indemnity Claim if as
a result thereof the indemnified party would become subject to injunctive or
other equitable relief or the business of the indemnified party would be
adversely affected in any manner.

 

9.3    Each party shall at all times comply, through insurance, with all
statutory workers’ compensation and employers’ liability requirements covering
any and all employees with respect to activities performed under this Agreement.
In addition to the foregoing, each party shall obtain and maintain,
occurrence-based or claims made Broad Form Comprehensive General Liability
(“BFCGL”) Insurance with a reputable and financially secure insurance carrier(s)
having at least an Excellent rating (A- rating or above by A.M. Best). Upon a
party’s request, the other party shall provide to such requesting party written
evidence reasonably satisfactory to such requesting party of the sufficiency of
such other party’s insurance program.

 

10.      Confidential Information

 

Confidential Information will be as defined by and treated in accordance with
the Confidential Disclosure Agreement dated February 15, 2002 between Amylin and
Bachem, a copy of which is attached hereto as Exhibit 2, which shall remain in
full force and effect in accordance with its terms. The parties, however, agree
that the following shall apply to confidential information disclosed under this
Agreement: (A) each party shall use the other party’s confidential information
solely for the purposes contemplated under this Agreement, (B) the
non-disclosure and confidentiality obligations shall remain in effect during the
term of this Agreement and for a period of five (5) years thereafter, and (C)
Amylin shall have the right to disclose Bachem’s confidential information,
without Bachem prior consent, to Regulatory Authorities in accordance with
Article 3 and to Collaboration Partner.

 

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11.   Force Majeure

 

If the performance by either party of any obligation under this Agreement, other
than the payment of money, is prevented or impaired by Force Majeure for any
cause beyond the reasonable control of the defaulting party, such party shall be
excused from performance so long as such situation continues to prevent or
impair performance, provided the party claiming such excuse shall have promptly
notified the other party of the existence, nature, duration and other details of
such cause and shall at all times use its reasonable efforts consistent with its
normal business practices to resume a complete performance. If either party
anticipates that a Force Majeure may occur, that party shall notify the other
immediately and explain the nature, details and expected duration thereof.

 

The affected party will advise the other from time to time as to the progress in
remedying the situation and as to the time when the affected party expects to
resume its obligations and shall notify the other as to the expiration of any
Force Majeure as soon as the affected party knows the date thereof.

 

“Force Majeure” shall mean an event beyond the reasonable control of a party
including, but not limited to, fire, flood, sabotage, shipwreck, embargo,
explosion, accident, riot, act of governmental authority (including, without
limitation, acts relating to raw material or product allocation), acts of God,
acts of war, and acts of terrorism.

 

In the event of a Force Majeure affecting Bachem, Bachem may prorate and
allocate manufacturing capacity among its Affiliates, Amylin and Bachem’s other
customers, in proportion to purchases of products by such Affiliates, Amylin and
other customers during the 12-month period preceding such Force Majeure event
Notwithstanding the occurrence of a Force Majeure event, if Bachem shall be
unable to supply Products in such quantities as Amylin shall request and in
compliance with the delivery periods set forth in this Agreement, Amylin shall
be permitted (with no obligation to Bachem) to exercise its rights under Section
7.4 and have another source manufacture Product on Amylin’s behalf using the
process described in the master batch records for the Product, and Amylin shall
thereafter have no obligation to purchase Products from Bachem until any
contractual obligations that Amylin has assumed in connection with obtaining a
substitute supply of Products shall have terminated. Amylin shall have no
obligation to affirmatively terminate any such contractual arrangements.

 

12.   Notices

 

All notices hereunder shall be in writing and shall be delivered personally,
mailed by overnight delivery, registered or certified mail, postage prepaid, or
given by facsimile and confirmed by any of the foregoing, as follows:

 

If to Amylin

Amylin Pharmaceuticals

 

9360 Towne Centre Drive

 

San Diego, CA 92121

 

Telefax No: (858) 552-2212

 

Attn. John Grove

 

Senior Director

 

 

 

with a copy to the attention of Lloyd A. Rowland, Vice President and General
Counsel, at the same address as stated above, Telefax No: 858-552-1936.

 

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If to Bachem

Bachem California

 

3132 Kashiwa Street

 

Torrance, CA 90505

 

Attn. Phillip Ottiger

 

Telefax No: 310 530 1571

 

 

 

Bachem Americas

 

3132 Kashiwa Street

 

Torrance, CA 90505

 

Attn. Jose de Chastonay

 

TelefaxNo: 310 530 1571

 

13.      Binding Effect

 

This Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective assigns and successors in interest.
Collaboration Partner is an intended third party beneficiary of the provisions
of this Agreement specifically referring to Collaboration Partner.

 

14.      Applicable Law

 

This Agreement shall be construed, interpreted and governed by the laws of
California, excluding its conflicts of laws principles.

 

15.      Assignment

 

Neither party shall assign this Agreement or any part thereof without the prior
written consent of the other party; provided, however, that either party,
without such consent, may assign or sell the same in connection with the
transfer or sale of substantially its entire business to which this Agreement
pertains, whether by merger, sale of stock, sale of assets, consolidation with
another company or otherwise. Any permitted assignee shall assume all
obligations of its assignor under this Agreement. No assignment shall relieve
any party of responsibility for the performance of any accrued obligation which
such party then has hereunder.

 

16.    Entire Agreement

 

This Agreement constitutes the entire agreement between the parties concerning
the subject matter hereof and supersedes all written or oral prior agreements or
understandings with respect thereto. No subsequent amendment, modification or
addition to this Agreement shall be binding upon the parties hereto unless
reduced to writing and signed by the respective authorized officers of the
parties.

 

17.    Severability

 

This Agreement is subject to the restrictions, limitations, terms and conditions
of all applicable governmental regulations, approvals and clearances. If any
term or provision of this Agreement shall for any reason be held invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other term or provision hereof, and this
Agreement shall be interpreted and construed as if such term or provision, to
the extent the same shall have been held to be invalid, illegal or
unenforceable, had never been contained herein.

 

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18.      Waiver - Modification of Agreement

 

No waiver or modification of any of the terms of this Agreement shall be valid
unless in writing and signed by authorized representatives of both parties
hereto. Failure by either party to enforce any rights under this Agreement shall
not be construed as a waiver of such rights nor shall a waiver by either party
in one or more instances be construed as constituting a continuing waiver or as
a waiver in other instances.

 

19.      Publicity

 

In the absence of specific agreement between the parties, neither party shall
originate any publicity, news release or other public announcement, written or
oral, whether to the public press, to stockholders or otherwise, relating to
this Agreement or to performance hereunder, save only such announcement as in
the opinion of legal counsel to the party making such announcement is required
by law to be made.

 

20.      Exhibits

 

All Exhibits referenced herein are hereby made a part of this Agreement.

 

21.      Counterparts

 

This Agreement may be executed in any number of separate counterparts, each of
which shall be deemed to be an original, but which together shall constitute one
and the same instrument.

 

In Witness whereof, the parties have caused this Agreement to be executed by
their duly authorized representatives on the later date written below.

 

- BACHEM Americas -

- Bachem, Inc. -

 

 

Jose de Chastonay

 

Philip Ottiger

 

 

 

Name

Name

 

 

Signature

Signature

 

 

President

 

President &CEO, Bachem, Inc.

 

 

 

Title

Title

 

 

- Amylin Pharmaceuticals, Inc. -

 

 

 

 

 

 

Name

 

 

 

 

 

 

 

 

Signature

 

 

 

 

 

 

 

 

Title

 

 

 

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[***]

 

 

* Confidential Treatment Request(ed)

 

16

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[***]

 

 

* Confidential Treatment Request(ed)

 

17

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[***]

 

 

* Confidential Treatment Request(ed)

 

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