Common use of API Yield Clause in Contracts

API Yield. A. Catalent will give Client a quarterly inventory report of the API held by Catalent within [***] business days of the end of the most recent [***]-month period in a Contract Year which contains the following information for such period: (a) quantity of API conforming to specifications that is received at the Facility (“Quantity Received”), (b) quantity of API dispensed in Processing Product at the Facility calculated by adding the Quantity Received to the inventory of API that complies with the specifications and is held by Catalent at the beginning of the applicable period, less the inventory of API that complies with the specifications and is held by Catalent at the end of the period (“Quantity Dispensed”), and (c) the total amount of API contained in the Product manufactured with the Quantity Dispensed delivered by Catalent and not rejected, recalled or returned due to Catalent Cause as defined below (“Quantity Converted”). B. Within [***] days after the end of each Contract Year, Catalent will prepare an annual reconciliation of API that sets out the “Actual Annual Yield” or “AAY” for the Product at the Facility during the Contract Year. AAY is the percentage of the Quantity Dispensed that was converted to Product and is calculated as follows: Quantity Converted in Contract Year/Quantity Dispensed during Contract Year * 100. The parties agree that the target AAY will be determined as follows: i. Initial Target Yield - will be the actual yield of the initial pre-validation and validation batches of Product that is Processed for Client and calculated as follows: Quantity Converted in the initial pre-validation and validation batches /Quantity Dispensed in the initial pre-validation and validation batches * 100 (the “Initial Target Yield”). The Initial Target Yield will be in effect until there is enough campaign experience to calculate an Adjusted Target Yield as defined below. ii. Adjusted Target Yield - will be the actual average yield of the initial [***] commercial batches of Product that is Processed for Client and calculated as follows: average Quantity Converted in the first [***] post validation batches /average Quantity Dispensed in the first [***] post validation [***] batches* 100 (the “Adjusted Target Yield”). iii. Without limiting Client’s other rights or remedies, if AAY falls more than [***] percent ([***]%) below the Initial or Adjusted Target Yield in a Contract Year in which Client Processes as least [***] batches of Product for Client, then within [***] days after the end of the applicable Contract Year, Catalent will credit to Client’s account the amount of the shortfall, calculated as follows: [(Initial or Adjusted Target Yield – [***]%) – AAY] * API cost * Quantity Dispensed. C. Catalent’s liability for API calculated in accordance with this Section 3.4 will be subject to the limits on Catalent’s liability set forth in Section 14.2.

API Yield. A. Catalent CoreRx will give Client a quarterly inventory report of the API held by Catalent CoreRx (“Inventory Report”) within [***] business days of the end of the most recent [***]-month period in a Contract Year which contains the following information for such period: (a) quantity of API conforming to specifications Specifications that is received at the Facility (“Quantity Received”), (b) quantity of API dispensed in Processing Manufacturing Product at the Facility calculated by adding the Quantity Received to the inventory of API that complies with the specifications Specifications and is held by Catalent CoreRx at the beginning of the applicable period, less the inventory of API that complies with the specifications Specifications and is held by Catalent CoreRx at the end of the period (“Quantity Dispensed”), and (c) the total amount of API contained in the Product manufactured with the Quantity Dispensed delivered by Catalent CoreRx and not rejected, recalled or returned due to Catalent CoreRx Cause as defined below (“Quantity Converted”). B. Within [***] days after the end of each Contract Year, Catalent CoreRx will prepare an annual reconciliation of API that sets out the “Actual Annual Yield” or “AAY” for the Product at the Facility during the Contract Year. AAY is the percentage of the Quantity Dispensed that was converted to Product and is calculated as follows: Quantity Converted in Contract Year/Quantity Dispensed during Contract Year * 100. The parties agree that the target AAY will be determined as follows: i. Initial Target Yield - will be the actual yield of the initial pre-validation and validation batches of Product that is Processed for Client and calculated as follows: Quantity Converted in the initial pre-validation and validation batches /Quantity Dispensed in the initial pre-validation and validation batches * 100 (the “Initial Target Yield”). The Initial Target Yield will be in effect until there is enough campaign experience to calculate an Adjusted Target Yield as defined below. ii. Adjusted Target Yield - will be the actual average yield of the initial [***] ten commercial batches of Product that is Processed for Client and calculated as follows: average Quantity Converted in the first [***] post validation batches /average Quantity Dispensed in the first [***] ]post validation [***] batchesbatches * 100 (the “Adjusted Target Yield”). iii. Without limiting Client’s other rights or remedies, if AAY falls more than [***] percent ([***]%) below the Initial or Adjusted Target Yield in a Contract Year in which Client Processes as least [***] batches of Product for Client, then within [***] days after the end of the applicable Contract Year, Catalent CoreRx will credit to Client’s account the amount of the shortfall, calculated as follows: [(Initial or Adjusted Target Yield – [***]%) – AAY] * API cost * Quantity Dispensed. C. Catalent’s liability for API calculated in accordance with this Section 3.4 will be subject to the limits on Catalent’s liability set forth in Section 14.2.