Common use of Capacity Limits Clause in Contracts

Capacity Limits. During the Term, Novo Nordisk Delivery Technologies, Inc. shall provide Aradigm with the Manufacturing capacity, which includes Device production and packaging, indicated in the chart below for each of the three (3) process groups (i.e., upstream processing; compounding/filling; and downstream processing, including handle lamination through packaging). Notwithstanding the foregoing, if Novo Nordisk Delivery Technologies, Inc. provides Aradigm with ninety (90) days prior written notice that Novo Nordisk Delivery Technologies, Inc. needs additional capacity for itself to provide Device and/or Dosage Forms for the phase 3 insulin trial that it will conduct, then Novo Nordisk Delivery Technologies, Inc. may shift the capacity allocated to Aradigm’s requirements as set forth in this Agreement as follows: (i) in 2005, Novo Nordisk Delivery Technologies, Inc. may shift the 1/6th of actual capacity to the fourth Contract Quarter of 2005 or split the 1/6th of actual capacity between the first and second half of 2005; (ii) in 2006, Novo Nordisk Delivery Technologies, Inc. may shift the 1/4 of actual capacity to either of the last 2 Contract Quarters of 2006 or split the 1/4 of actual capacity between the first and second half of 2006; and (iii) in 2007, Novo Nordisk Delivery Technologies, Inc. may shift the 1/4th of actual capacity to either of the last 2 Contract Quarters of 2007 or split the 1/4th of actual capacity between the first and second half of 2007. For the avoidance of doubt, the table below lists calendar year capacity. Therefore, in the event that this Agreement terminates before December 31, 2007, Aradigm will only have a corresponding proportional amount of capacity for that year. 2005 1/6th of actual capacity 2006 1/4th of actual capacity 2007 1/4th of actual capacity Notwithstanding this Section 3.1, Novo Nordisk Delivery Technologies, Inc. shall not be obligated to provide Aradigm with the Manufacturing capacity related to use of the sterile core and other filling activities, as described above, if, in its sole discretion, it concludes that the provision of such Manufacturing capacity would, in any manner, impair Novo Nordisk Delivery Technologies, Inc.’s ability to supply any capacity related to its activities under the Amended and Restated License Agreement.