Common use of Back-Up Manufacturing Right Clause in Contracts

Back-Up Manufacturing Right. If, despite the foregoing measures undertaken by the Parties pursuant to Sections 7.6 and 7.7 above, Angioblast, as a result of its failure to use commercially reasonable efforts, is unable to supply quantities of the [***], as applicable, ordered by Cephalon and accepted by Angioblast for commercial sale in accordance with the terms and conditions of the Supply Agreement (once executed) and such inability interrupts or is likely to interrupt Cephalon’s ability to meet the market demand for the applicable Products (a “Supply Failure”), then Cephalon shall have the right to qualify a Third Party back-up contractor manufacturer, to which Angioblast has no reasonable objection (each, a “CMO”) for such Product for commercial supply in the Territory and to have its and its Affiliates’ and Marketing Partners’ requirements for such Product manufactured and supplied to Cephalon for commercial sale in the Territory for the remaining Term of the Agreement. If Cephalon so elects to exercise its rights under this Section 7.8, then Cephalon shall identify and qualify a CMO, and Angioblast shall have the right to participate in and approve such qualification therefor, not to be unreasonably withheld, conditioned or delayed. Upon Angioblast’s approval of such CMO, Angioblast shall transfer (or cause its existing contract manufacturer to transfer) all relevant Data and other Know-How related to the manufacture and supply of such Product to such CMO in accordance with the provisions set forth in Exhibit 7.8. Upon completion of such transfer of Data and other Know-How, Angioblast shall no longer have the obligations to supply the requirements for such Product for commercial sale as provided for under this ARTICLE VII and the Supply Agreement. This Section 7.8 shall be the sole obligation of Angioblast and the sole remedy of Cephalon for a failure to supply any commercial requirements of the Products as set forth in this ARTICLE VII and the Supply Agreement if such exercise is prior to the expiration of Angioblast’s right to terminate pursuant to Section 13.3(a) or 13.3(b), as applicable. If Cephalon so elects to exercise its rights under this Section 7.8, Cephalon shall not [***]; provided, however, that if Angioblast’s right to terminate pursuant to Section 13.3(a) or 13.3(b), as applicable, has expired, then Cephalon shall [***]. For clarity, such payments shall be made on calendar quarterly basis in arrears consistent with the reconciliation process as provide for under Exhibit 6.3 and provide reports with respect to such sales as set forth under ARTICLE VI and otherwise in accordance with ARTICLE VI.

Back-Up Manufacturing Right. If, despite the foregoing measures undertaken by the Parties pursuant to Sections 7.6 and 7.7 above, Angioblast, as a result of its failure to use commercially reasonable efforts, is unable to supply quantities of the [***]BMT MPCs, Cardiovascular Products or CNS Products, as applicable, ordered by Cephalon and accepted by Angioblast for commercial sale in accordance with the terms and conditions of the Supply Agreement (once executed) and such inability interrupts or is likely to interrupt Cephalon’s ability to meet the market demand for the applicable Products (a “Supply Failure”), then Cephalon shall have the right to qualify a Third Party back-up contractor manufacturer, to which Angioblast has no reasonable objection (each, a “CMO”) for such Product for commercial supply in the Territory and to have its and its Affiliates’ and Marketing Partners’ requirements for such Product manufactured and supplied to Cephalon for commercial sale in the Territory for the remaining Term of the Agreement. If Cephalon so elects to exercise its rights under this Section 7.8, then Cephalon shall identify and qualify a CMO, and Angioblast shall have the right to participate in and approve such qualification therefor, not to be unreasonably withheld, conditioned or delayed. Upon Angioblast’s approval of such CMO, Angioblast shall transfer (or cause its existing contract manufacturer to transfer) all relevant Data and other Know-How related to the manufacture and supply of such Product to such CMO in accordance with the provisions set forth in Exhibit 7.8. Upon completion of such transfer of Data and other Know-How, Angioblast shall no longer have the obligations to supply the requirements for such Product for commercial sale as provided for under this ARTICLE VII and the Supply Agreement. This Section 7.8 shall be the sole obligation of Angioblast and the sole remedy of Cephalon for a failure to supply any commercial requirements of the Products as set forth in this ARTICLE VII and the Supply Agreement if such exercise is prior to the expiration of Angioblast’s right to terminate pursuant to Section 13.3(a) or 13.3(b), as applicable. If Cephalon so elects to exercise its rights under this Section 7.8, Cephalon shall not [***]owe any amount to Angioblast under Paragraph 2(a) of Exhibit 6.3 for such Product; provided, however, that if Angioblast’s right to terminate pursuant to Section 13.3(a) or 13.3(b), as applicable, has expired, then Cephalon shall [***]pay Angioblast the Transfer Price that would have been paid to Angioblast if Angioblast had supplied such Product to Cephalon less Cephalon’s actual cost of goods for such Product as calculated in accordance with Accounting Standards. For clarity, such payments shall be made on calendar quarterly basis in arrears consistent with the reconciliation process as provide for under Exhibit 6.3 and provide reports with respect to such sales as set forth under ARTICLE VI and otherwise in accordance with ARTICLE VI.

Back-Up Manufacturing Right. If, despite the foregoing measures undertaken by the Parties pursuant to Sections 7.6 and 7.7 above, Angioblast, as a result of its failure to use commercially reasonable efforts, is unable to supply quantities of the [***], as applicable, ordered by Cephalon and accepted by Angioblast for commercial sale in accordance with the terms and conditions of the Supply Agreement (once executed) and such inability interrupts or is likely to interrupt Cephalon’s ability to meet the market demand for the applicable Products (a “Supply Failure”), then Cephalon shall have the right to qualify a Third Party back-up contractor manufacturer, to which Angioblast has no reasonable objection (each, a “CMO”) for such Product for commercial supply in the Territory and to have its and its Affiliates’ and Marketing Partners’ requirements for such Product manufactured and supplied to Cephalon for commercial sale in the Territory for the remaining Term of the Agreement. If Cephalon so elects to exercise its rights under this Section 7.8, then Cephalon shall identify and qualify a CMO, and Angioblast shall have the right to participate in and approve such qualification therefor, not to be unreasonably withheld, conditioned or delayed. Upon Angioblast’s approval of such CMO, Angioblast shall transfer (or ** Portions of the Exhibit have been omitted and have been filed separately pursuant to an application for confidential treatment filed with the Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. cause its existing contract manufacturer to transfer) all relevant Data and other Know-How related to the manufacture and supply of such Product to such CMO in accordance with the provisions set forth in Exhibit 7.8. Upon completion of such transfer of Data and other Know-How, Angioblast shall no longer have the obligations to supply the requirements for such Product for commercial sale as provided for under this ARTICLE VII and the Supply Agreement. This Section 7.8 shall be the sole obligation of Angioblast and the sole remedy of Cephalon for a failure to supply any commercial requirements of the Products as set forth in this ARTICLE VII and the Supply Agreement if such exercise is prior to the expiration of Angioblast’s right to terminate pursuant to Section 13.3(a) or 13.3(b), as applicable. If Cephalon so elects to exercise its rights under this Section 7.8, Cephalon shall not [***]; provided, however, that if Angioblast’s right to terminate pursuant to Section 13.3(a) or 13.3(b), as applicable, has expired, then Cephalon shall [***]. For clarity, such payments shall be made on calendar quarterly basis in arrears consistent with the reconciliation process as provide for under Exhibit 6.3 and provide reports with respect to such sales as set forth under ARTICLE VI and otherwise in accordance with ARTICLE VI.