Failure or Inability to Supply Product. (a) Patheon shall ensure that Product is Manufactured and delivered to Flexion on a timely basis consistent with the terms of this Agreement (including the Forecast and Purchase Order procedures set forth in Section 2.3). In the event that Patheon, at any time during the Term, shall have reason to believe that it will be unable to supply Flexion with the full quantity of Product forecasted to be ordered or actually ordered by Flexion in a timely manner and in conformity with the warranty set forth in Section 6.3 (whether by reason of force majeure or otherwise), Patheon shall notify Flexion thereof within […***…] business days. Promptly thereafter, the Parties shall meet to discuss how Flexion shall obtain such full quantity of conforming Product. Compliance by Patheon with this Section 2.7(a) shall not relieve Patheon of any other obligation or liability under this Agreement, including any obligation or liability under clause (b) below. If Patheon’s inability is partial, Patheon shall fulfill Purchase Orders with such quantities of Product as are available. In the event Patheon’s inability to meet Purchase Orders or forecasts is due to a shortage of production capacity in the Manufacturing Suite, Patheon shall in addition to the foregoing requirements, promptly notify Flexion of such shortage of production capacity and the estimated date such shortage of production capacity is to end. (b) If Patheon fails to Manufacture the full quantity of Product specified in a Purchase Order by the Agreed Delivery Date and in conformity with the warranty set forth in Section 6.3 (and such failure is directly due to the acts or omissions of Patheon where such acts or omission does not constitute a force majeure event pursuant to the terms of Section 10.2) (“Late Product”), and Patheon is unable to cure such failure within […***…] days, in full and final settlement of such failure, Flexion, at its option, may (i) cancel the unfulfilled portion of such Purchase Order, in which event Flexion shall have no liability with respect to the portion of such Purchase Order so cancelled, or (ii) accept late delivery of all or any portion of the Product specified in such Purchase Order, in which event (A) Patheon shall pay all reasonable documented shipping costs for the expedited shipment of Product that are required in addition to the shipping costs for a non-expedited shipment (which shall be the responsibility of Flexion), and (B) the Product Fee otherwise payable by Flexion with respect to all Product delivered late but accepted by Flexion under such Purchase Order shall be reduced by […***…]% per day for each day of delay after such Agreed Delivery Date, but not to exceed in aggregate an amount equal to […***…]% of the Product Fees of the Product delivered late (i.e., […***…] days) per Purchase Order; provided that, sub-Section (ii) shall only apply after the Manufacture and delivery of the first […***…] batches of commercial Product (including validation batches) pursuant to this Agreement, following which, if the Parties agree that the Manufacturing process is sufficiently robust to allow the Product to be delivered in a timely manner, this sub-Section (ii) shall be implemented. Any Product which is delivered to Flexion with less than […***…] of expiry, assuming a product shelf life of […***…], shall be considered Non-Conforming Product subject the provisions of Section 2.8(c); provided that, if the Product shelf life is not […***…] (as set forth in the FDA approved label for the Product), the Parties shall mutually agree in good faith on the reasonably appropriate minimum amount of expiry a Product should have when delivered.
Appears in 2 contracts
Samples: Manufacturing and Supply Agreement (Pacira BioSciences, Inc.), Manufacturing and Supply Agreement (Flexion Therapeutics Inc)
Failure or Inability to Supply Product. (a) Patheon shall ensure that Product is Manufactured and delivered to Flexion on a timely basis consistent with the terms of this Agreement (including the Forecast and Purchase Order procedures set forth in Section 2.3). In the event that PatheonLupin, at any time during the Term, shall have reason to believe that it will be unable to supply Flexion Salix with the full quantity of Product forecasted to be ordered or actually ordered by Flexion Salix in a timely manner and in conformity with the warranty set forth in Section 6.3 2.6 (whether by reason of force majeure or otherwise), Patheon Lupin shall, as promptly as possible, notify Salix thereof (and, in any event, shall notify Flexion use commercially reasonable efforts to provide at least [*] ([*]) days’ advance notice thereof within […***…] business daysto Salix). Promptly thereafter, the Parties shall meet to discuss how Flexion Salix shall obtain such full quantity of conforming Product. Compliance by Patheon Lupin with this Section 2.7(a) shall not relieve Patheon Lupin of any other obligation or liability under this Agreement, including any obligation or liability under clause Section 2.7(b), (b) below. If Patheon’s inability is partialc), Patheon shall fulfill Purchase Orders with such quantities of Product as are available. In the event Patheon’s inability to meet Purchase Orders or forecasts is due to a shortage of production capacity in the Manufacturing Suite, Patheon shall in addition to the foregoing requirements, promptly notify Flexion of such shortage of production capacity and the estimated date such shortage of production capacity is to end(d).
(b) If Patheon Lupin fails to Manufacture deliver the full quantity of Product specified in a Purchase Order by [*] ([*]) days after the Agreed Delivery Date required delivery date specified therein and in conformity with the warranty set forth in Section 6.3 (and such failure is directly due to the acts or omissions of Patheon where such acts or omission does not constitute a force majeure event pursuant to the terms of Section 10.2) (“Late Product”)2.6, and Patheon is unable to cure such failure within […***…] days, in full and final settlement of such failure, Flexionthen Salix may, at its option, may * Confidential treatment requested; certain information omitted and filed separately with the SEC.
(i) cancel the unfulfilled all or any portion of such Purchase Order, in which event Flexion Salix shall have no liability with respect to the portion of such Purchase Order so cancelled, or (ii) accept late delivery of all or any portion of the Product specified in such Purchase Order.
(c) If Lupin fails to deliver the full quantity of Product specified in a Purchase Order by [*] ([*]) days after the required delivery date specified therein and in conformity with the warranty set forth in Section 2.6, then Salix may, at its option, (i) cancel all or any portion of such Purchase Order, in which event Salix shall have no liability with respect to the portion of such Purchase Order so cancelled, or (ii) accept late delivery of all or any portion of the Product specified in such Purchase Order, in which event (A) Patheon shall pay all reasonable documented shipping costs for the expedited shipment of Product that are required in addition to the shipping costs for a non-expedited shipment (which shall be the responsibility of Flexion), and (B) the Product Fee Purchase Price otherwise payable by Flexion Salix with respect to all Product delivered late but accepted by Flexion Salix under such Purchase Order shall be reduced by […*] percent ([*]%).
(d) If Lupin fails to deliver the full quantity of Product specified in a Purchase Order by [*…] ([*]% per day for each day ) days after the required delivery date specified therein and in conformity with the warranty set forth in Section 2.6, then Salix may, at its option, (i) accept late delivery of delay after such Agreed Delivery Date, but not to exceed in aggregate an amount equal to […***…]% all or any portion of the Product Fees of the Product delivered late (i.e., […***…] days) per specified in such Purchase Order; provided that, sub-Section in which event the Purchase Price otherwise payable by Salix with respect to all Product accepted by Salix under such Purchase Order shall be reduced by [*] percent ([*]%) or (ii) provide written notice to Lupin of its intention to qualify a third party manufacturer for the Product, in which event Lupin shall only apply after use its commercially reasonable efforts promptly to assist Salix to qualify such third party manufacturer designated by Salix to Manufacture the Product, and shall promptly grant to such third party manufacturer, on a royalty-free, non-exclusive basis, such licenses, and provide to such third party manufacturer, at Lupin’s standard time and materials cost, such technical assistance, as such third party manufacturer may require in order to Manufacture and delivery of the first […***…] batches of commercial Product (including validation batches) pursuant to this Agreement, following which, if the Parties agree that the Manufacturing process is sufficiently robust to allow the Product to be delivered the then-current Specifications in a timely manneraccordance with the then-current Manufacturing process for the Product, this subincluding full technology transfer of the then-Section current Manufacturing processes for the Product, as well as, at Salix’s option, such inventories of Lupin-Supplied Materials as are necessary to effect such qualification and technology transfer and enable Salix to obtain an uninterrupted supply of the Product, in all cases solely for use by Salix in its production of the Product.
(iie) shall be implemented. Any Product which is delivered to Flexion with less than In the event that Salix determines, within […***…] of expiry, assuming a product shelf life of […***…], shall be considered Non-Conforming Product subject the provisions of Section 2.8(c); provided that, if the Product shelf life is not […***…] (as [*]) days after delivery thereof by Lupin (or within [*] ([*]) days after discovery of any nonconformity that could not reasonably have been detected by a customary inspection on delivery), that any Product supplied by Lupin does not conform to the warranty set forth in the FDA approved label for the Section 2.6, Salix shall give Lupin notice thereof (including a sample of such Product, if applicable). Lupin shall undertake appropriate evaluation of such sample and shall notify Salix whether it has confirmed such nonconformity within [*] ([*]) days after receipt of such notice from Salix. If Lupin notifies Salix that it has not confirmed such nonconformity, the Parties shall submit the dispute to an independent testing laboratory or other appropriate expert mutually agree acceptable to the Parties (the “Testing Laboratory”) for evaluation. Both Parties shall cooperate with the Testing * Confidential treatment requested; certain information omitted and filed separately with the SEC. Laboratory’s reasonable requests for assistance in good faith connection with its evaluation hereunder. The findings of the Testing Laboratory shall be binding on the reasonably appropriate minimum amount Parties, absent manifest error. The expenses of expiry the Testing Laboratory shall be borne by Lupin if the testing confirms the nonconformity and otherwise by Salix. If the Testing Laboratory or Lupin confirms that a lot of Product should does not conform to the warranty set forth in Section 2.6, Lupin, at Salix’s option, promptly shall (i) supply Salix with a conforming quantity of Product at Lupin’s expense or (ii) reimburse Salix for the Purchase Price paid by Salix with respect to such nonconforming Product if already paid. In addition, Lupin promptly shall reimburse Salix for all costs incurred by Salix with respect to such nonconforming Product. Salix shall have when deliveredthe right to offset any such costs against any payments owed by Salix to Lupin under this Agreement. Lupin immediately shall notify Salix if at any time it discovers that any Product delivered hereunder does not conform to the warranty set forth in Section 2.6.
(f) For purposes of this Section 2.7, delivery of [*] percent ([*]%) or more of the Product ordered pursuant to any Purchase Order shall constitute “full delivery.”
Appears in 1 contract
Samples: Manufacturing and Supply Agreement (Salix Pharmaceuticals LTD)
Failure or Inability to Supply Product. (a) Patheon shall ensure that Product is Manufactured and delivered to Flexion on a timely basis consistent with the terms of this Agreement (including the Forecast and Purchase Order procedures set forth in Section 2.3). In the event that Patheon, at any time during the Term, shall have reason to believe that it will be unable to supply Flexion with the full quantity of Product forecasted to be ordered or actually ordered by Flexion in a timely manner and in conformity with the warranty set forth in Section 6.3 (whether by reason of force majeure or otherwise), Patheon shall notify Flexion thereof within […***…] business days. Promptly thereafter, the Parties shall meet to discuss how Flexion shall obtain such full quantity of conforming Product. Compliance by Patheon with this Section 2.7(a) shall not relieve Patheon of any other obligation or liability under this Agreement, including any obligation or liability under clause (b) below. If Patheon’s inability is partial, Patheon shall fulfill Purchase Orders with such quantities of Product as are available. In the event Patheon’s inability to meet Purchase Orders or forecasts is due to a shortage of production capacity in the Manufacturing Suite, Patheon shall in addition to the foregoing requirements, promptly notify Flexion of such shortage of production capacity and the estimated date such shortage of production capacity is to end.
(b) If Patheon fails to Manufacture the full quantity of Product specified in a Purchase Order by the Agreed Delivery Date and in conformity with the warranty set forth in Section 6.3 (and such failure is directly due to the acts or omissions of Patheon where such acts or omission does not constitute a force majeure event pursuant to the terms of Section 10.2) (“Late Product”), and Patheon is unable to cure such failure within […***…] days, in full and final settlement of such failure, Flexion, at its option, may (i) cancel the unfulfilled portion of such Purchase Order, in which event Flexion shall have no liability with respect to the portion of such Purchase Order so cancelled, or (ii) accept late delivery of all or any portion of the Product specified in such Purchase Order, in which event (A) Patheon shall pay all reasonable documented shipping costs for the expedited shipment of Product that are required in addition to the shipping costs for a non-expedited shipment (which shall be the responsibility of Flexion), and (B) the Product Fee otherwise payable by Flexion with respect to all Product delivered late but accepted by Flexion under such Purchase Order shall be reduced by […***…]% per day for each day of delay after such Agreed Delivery Date, but not to exceed in aggregate an *** Certain Confidential Information Omitted - 17 - amount equal to […***…]% of the Product Fees of the Product delivered late (i.e., […***…] days) per Purchase Order; provided that, sub-Section (ii) shall only apply after the Manufacture and delivery of the first […***…] batches of commercial Product (including validation batches) pursuant to this Agreement, following which, if the Parties agree that the Manufacturing process is sufficiently robust to allow the Product to be delivered in a timely manner, this sub-Section (ii) shall be implemented. Any Product which is delivered to Flexion with less than […***…] of expiry, assuming a product shelf life of […***…], shall be considered Non-Conforming Product subject the provisions of Section 2.8(c); provided that, if the Product shelf life is not […***…] (as set forth in the FDA approved label for the Product), the Parties shall mutually agree in good faith on the reasonably appropriate minimum amount of expiry a Product should have when delivered.
Appears in 1 contract
Failure or Inability to Supply Product. (a) Patheon shall ensure that Product is Manufactured and delivered to Flexion on a timely basis consistent with the terms of this Agreement (including the Forecast and Purchase Order procedures set forth in Section 2.3). In the event that PatheonCosmo, at any time during the Term, shall have reason to believe that it will be unable to satisfy its obligations pursuant to Section 2.3(a) or supply Flexion Salix, in a timely manner and in conformity with the warranties set forth in Section 2.9, with the full quantity of Product forecasted to be ordered or actually ordered by Flexion in a timely manner and in conformity with the warranty set forth in Section 6.3 Salix (whether by reason of force majeure or otherwise), Patheon Cosmo shall, as promptly as possible, notify Salix thereof (and, in any event, shall notify Flexion use commercially reasonable efforts to provide at least fifteen (15) days’ advance notice thereof within […***…] business daysto Salix). Promptly thereafter, the Parties shall meet to discuss how Flexion and Cosmo shall obtain such use best efforts to provide and satisfy Salix with the full quantity of conforming ProductProduct or maintenance of the required inventory. Compliance by Patheon Cosmo with this Section 2.7(a2.10(a) shall not relieve Patheon Cosmo of any other obligation or liability under this Agreement, including any obligation or liability under clause Section 2.10(b), (bc) below. If Patheon’s inability is partial, Patheon shall fulfill Purchase Orders with such quantities of Product as are available. In the event Patheon’s inability to meet Purchase Orders or forecasts is due to a shortage of production capacity in the Manufacturing Suite, Patheon shall in addition to the foregoing requirements, promptly notify Flexion of such shortage of production capacity and the estimated date such shortage of production capacity is to end(d).
(b) If Patheon Cosmo fails to Manufacture deliver the full quantity of Product specified in a Purchase Order (other than as a result of Salix’s failure to comply with its release obligations in accordance with the timeline set forth in the Quality Agreement) by fifteen (15) days after the Agreed Delivery Date required delivery date specified therein and in conformity with the warranty warranties set forth in Section 6.3 (and such failure is directly due to the acts or omissions of Patheon where such acts or omission does not constitute a force majeure event pursuant to the terms of Section 10.2) (“Late Product”)2.9, and Patheon is unable to cure such failure within […***…] days, in full and final settlement of such failure, Flexionthen Salix may, at its option, may (i) cancel the unfulfilled all or any portion of such Purchase Order, in which event Flexion Salix shall have no liability with respect to the portion of such Purchase Order so cancelled, or (ii) accept late delivery of all or any portion of the Product specified in such Purchase Order.
(c) If Cosmo fails to deliver the full quantity of Product specified in a Purchase Order (other than as a result of Salix’s failure to comply with its release obligations in accordance with the timeline set forth in the Quality Agreement) by forty-five (45) days after the required delivery date specified therein and in conformity with the warranties set forth in Section 2.9, then Salix may, at its option, (i) cancel all or any portion of such Purchase Order, in which event (A) Patheon Salix shall pay all reasonable documented shipping costs for the expedited shipment of Product that are required in addition to the shipping costs for a non-expedited shipment (which shall be the responsibility of Flexion), and (B) the Product Fee otherwise payable by Flexion have no liability with respect to all Product delivered late but accepted by Flexion under the portion of such Purchase Order shall be reduced by […***…]% per day for each day so cancelled, or (ii) accept late delivery of delay after such Agreed Delivery Date, but not to exceed in aggregate an amount equal to […***…]% all or any portion of the Product Fees specified in such Purchase Order.
(d) If, during any month of the Term, Cosmo has insufficient quantities of Product, or of Materials required for the Manufacture of Product, to fill all Purchase Orders submitted by Salix that require delivery during such month, Cosmo shall allocate and deliver to Salix an amount of Product equal to (i) the aggregate amount of Product (together with equivalent versions of the Product delivered late Manufactured for sale outside the Territory) available for delivery by Cosmo and its Affiliates (i.e.or capable of being Manufactured using all available Materials) in such month to all Persons worldwide, […***…] days) per Purchase Order; provided thatincluding Cosmo and its Affiliates and its and their licensees, sub-Section multiplied by (ii) shall only apply after a fraction, the Manufacture numerator of which is the aggregate amount of Product delivered by Cosmo to Salix during the six (6)-consecutive month period prior to the month in which such shortage occurs, and delivery the denominator of which is the aggregate amount of Product (together with equivalent versions of the first […***…] batches Product Manufactured for sale outside the Territory) delivered by Cosmo to all Persons worldwide, including Cosmo and its Affiliates and its and their licensees, during the six (6)-consecutive month period prior to the month in which such shortage occurs. Compliance by Cosmo with this Section 2.10(d) shall not relieve Cosmo of commercial Product (including validation batches) pursuant to any other obligation or liability under this Agreement, following whichincluding under Section 2.10(b) or (c).
(e) In the event that Salix determines, if within forty-five (45) days after delivery thereof by Cosmo (or within forty-five (45) days after discovery of any nonconformity that could not reasonably have been detected by a customary inspection on delivery), that any Product supplied by Cosmo does not conform to the Parties agree that the Manufacturing process is sufficiently robust to allow the Product to be delivered in a timely manner, this sub-Section (ii) shall be implemented. Any Product which is delivered to Flexion with less than […***…] of expiry, assuming a product shelf life of […***…], shall be considered Non-Conforming Product subject the provisions of Section 2.8(c); provided that, if the Product shelf life is not […***…] (as warranties set forth in the FDA approved label for the Section 2.9, Salix shall give Cosmo notice thereof (including a sample of such Product, if applicable). Cosmo shall undertake appropriate evaluation of such sample and shall notify Salix whether it has confirmed such nonconformity within thirty (30) days after receipt of such notice from Salix. If Cosmo notifies Salix that it has not confirmed such nonconformity, then the Parties shall submit the dispute to an independent testing laboratory or other appropriate expert mutually agree acceptable to the Parties (the “Testing Laboratory”) for evaluation. Both Parties shall cooperate with the Testing Laboratory’s reasonable requests for assistance in good faith connection with its evaluation hereunder. The findings of the Testing Laboratory shall be binding on the reasonably appropriate minimum amount Parties, absent manifest error. The expenses of expiry the Testing Laboratory shall be borne by Cosmo if the testing confirms the nonconformity and otherwise by Salix. If the Testing Laboratory or Cosmo confirms that the Product does not conform to the warranties set forth in Section 2.9, then Cosmo promptly shall supply Salix with a conforming quantity of Product should at Cosmo’s expense. In addition, Cosmo promptly shall reimburse Salix for all costs incurred by Salix with respect to such nonconforming Product. Salix shall have when deliveredthe right to offset any such costs against any payments owed by Salix to Cosmo under this Agreement. Cosmo immediately shall notify Salix if at any time it discovers that any Product delivered hereunder does not conform to the warranties set forth in Section 2.9.
Appears in 1 contract
Failure or Inability to Supply Product. (a) Patheon shall ensure that Product is Manufactured and delivered to Flexion on a timely basis consistent with the terms of this Agreement (including the Forecast and Purchase Order procedures set forth in Section 2.3). In the event that PatheonNovel, at any time during the Term, shall have reason to believe that it will be unable to supply Flexion Salix with the full quantity of Product forecasted to be ordered or actually ordered by Flexion Salix in a timely manner and in conformity with the warranty set forth in Section 6.3 2.7 (whether by reason of force majeure or otherwise), Patheon Novel shall, as promptly as possible, notify Salix thereof (and, in any event, shall notify Flexion use its best efforts to provide at least [*] ([*]) days’ advance notice thereof within […***…] business daysto Salix). Promptly thereafter, the Parties shall meet to discuss how Flexion Salix shall obtain such full quantity of conforming Product. Compliance by Patheon Novel with this Section 2.7(a2.8(a) shall not relieve Patheon Novel of any other obligation or liability under this Agreement, including any obligation or liability under clause Section 2.8(b) or (b) below. If Patheon’s inability is partial, Patheon shall fulfill Purchase Orders with such quantities of Product as are available. In the event Patheon’s inability to meet Purchase Orders or forecasts is due to a shortage of production capacity in the Manufacturing Suite, Patheon shall in addition to the foregoing requirements, promptly notify Flexion of such shortage of production capacity and the estimated date such shortage of production capacity is to end).
(b) If Patheon Subject to Sections 2.8(e) and 8.2, if Novel fails to Manufacture deliver the full quantity of Product specified in a Purchase Order by [*] ([*]) days after the Agreed Delivery Date required delivery date specified therein and in conformity with the warranty set forth in Section 6.3 (and such failure is directly due to the acts or omissions of Patheon where such acts or omission does not constitute a force majeure event pursuant to the terms of Section 10.2) (“Late Product”)2.7, and Patheon is unable to cure such failure within […***…] days, in full and final settlement of such failure, Flexionthen Salix may, at its option, may (i) cancel the unfulfilled any portion of such Purchase OrderOrder which is not delivered by such date, in which event Flexion Salix shall have no liability with respect to the portion of such Purchase Order so cancelled, or (ii) accept late delivery of all or any portion of the Product specified in such Purchase Order, in which event (A) Patheon shall pay all reasonable documented shipping costs for the expedited shipment of Product that are required in addition to the shipping costs for a nonPer-expedited shipment (which shall be the responsibility of Flexion)Commercial Unit Supply Price or Per-Sample Unit Supply Price, and (B) the Product Fee as applicable, otherwise payable by Flexion Salix with respect to all Product delivered late but accepted by Flexion Salix at least [*] ([*]) days after the required delivery date specified under such Purchase Order shall be reduced by […*] percent ([*]%).
(c) Subject to Sections 2.8(e) and 8.2, if Novel fails to deliver the full quantity of Product specified in a Purchase Order by [*…] ([*]% per day for each day ) days after the required delivery date specified therein and in conformity with the warranty set forth in Section 2.7, then Salix may, at its option, (i) accept late delivery of delay after such Agreed Delivery Date, but not to exceed in aggregate an amount equal to […***…]% all or any portion of the Product Fees of the Product delivered late (i.e., […***…] days) per specified in such Purchase Order; provided that, subin which event the Per-Section Commercial Unit Supply Price or Per-Sample Unit Supply Price, as applicable, otherwise payable by Salix with respect to all Product accepted by Salix under such Purchase Order shall be reduced by [*] percent ([*]%) or (ii) provide written notice to Novel of its intention to qualify a third party manufacturer for Product, in which event Novel shall only apply after use its best efforts promptly to assist Salix to qualify such third party manufacturer designated by Salix to Manufacture Product, and shall promptly grant to such third party [*] Confidential Treatment requested; certain information omitted and filed separately with the SEC. manufacturer, on a royalty-free, non-exclusive basis, such licenses, and provide to such third party manufacturer, free of charge, such technical assistance, as such third party manufacturer may require in order to Manufacture and delivery Product to the then-current Specifications in accordance with the then-current Manufacturing process for Product, including full technology transfer of the first then-current Manufacturing processes for Product, as well as, at Salix’s option, sell to Salix, at Novel’s cost, such inventories of Materials as are necessary to effect such qualification and technology transfer and enable Salix to obtain an uninterrupted supply of Product, in all cases solely for use by Salix in its production of Product. For purposes of clarity, Salix may qualify a third party manufacturer for Product.
(d) In the event that Salix determines, within […***…] batches of commercial Product (including validation batches) pursuant to this Agreement, following which, if the Parties agree that the Manufacturing process is sufficiently robust to allow the Product to be delivered in a timely manner, this sub-Section (ii) shall be implemented. Any Product which is delivered to Flexion with less than […***…] of expiry, assuming a product shelf life of […***…], shall be considered Non-Conforming Product subject the provisions of Section 2.8(c); provided that, if the Product shelf life is not […***…] (as [*]) days after delivery thereof by Novel (or within [*] ([*]) days after discovery of any nonconformity that could not reasonably have been detected by a customary visual inspection on delivery), that any Product supplied by Novel does not conform to the warranty set forth in the FDA approved label for the Section 2.7, Salix shall give Novel notice thereof (including a sample of such Product, if applicable). Novel shall undertake appropriate evaluation of such sample and shall notify Salix whether it has confirmed such nonconformity within [*] ([*]) days after receipt of such notice from Salix. If Novel notifies Salix that it has not confirmed such nonconformity, the Parties shall submit the dispute to an independent testing laboratory or other appropriate expert mutually agree acceptable to the Parties (the “Testing Laboratory”) for evaluation. Both Parties shall cooperate with the Testing Laboratory’s reasonable requests for assistance in good faith connection with its evaluation hereunder. The findings of the Testing Laboratory shall be binding on the reasonably appropriate minimum amount Parties, absent manifest error. The expenses of expiry the Testing Laboratory shall be borne by Novel if the testing confirms the nonconformity and otherwise by Salix. If the Testing Laboratory or Novel confirms that a lot of Product should does not conform to the warranty set forth in Section 2.7, Novel, at Salix’s option, promptly shall (i) supply Salix with a conforming quantity of Product at Novel’s expense or (ii) reimburse Salix for the Per-Commercial Unit Supply Price or Per-Sample Unit Supply Price, as applicable, paid by Salix with respect to such nonconforming Product if already paid. In addition, Novel promptly shall reimburse Salix for all costs incurred by Salix with respect to such nonconforming Product. Salix shall have when deliveredthe right to offset any such costs against any payments owed by Salix to Novel under this Agreement. Novel immediately shall notify Salix if at any time it discovers that any Product delivered hereunder does not conform to the warranty set forth in Section 2.7.
(e) The rights and remedies provided in this Section 2.8 shall be cumulative and in addition to any other rights or remedies that may be available to Salix.
Appears in 1 contract
Failure or Inability to Supply Product. (a) Patheon shall ensure that Product is Manufactured and delivered to Flexion Client on a timely basis consistent with the terms of this Agreement (including the Forecast and Purchase Order procedures set forth in Section 2.3). In the event that Patheon, at any time during the Term, is unable or shall have reason to believe that it will be unable to supply Flexion Client with the full quantity of Product forecasted to be ordered or actually ordered by Flexion Client in a timely manner and in conformity with the warranty set forth in Section 6.3 (whether by reason of force majeure or otherwise), Patheon shall notify Flexion Client thereof within in writing on or before […***…] business daysdays setting out the reasons for such inability to supply. Promptly thereafter, the Parties shall meet to discuss how Flexion Client shall obtain such full quantity of conforming ProductProduct and Patheon will take all such actions as may be reasonably agreed by the Parties to minimise any delay. Compliance by Patheon with this Section 2.7(a) shall not relieve Patheon of any other obligation or liability under this Agreement, including any obligation or liability under clause (bSection 2.7(c) below. If Patheon’s inability to supply is partial, Patheon shall fulfill Purchase Orders with such quantities of Product as are availableavailable and the Client’s payment obligations relating to the Product Fee shall be reduced accordingly. In the event Patheon’s inability to meet Purchase Orders or forecasts is due to a shortage *** Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. of production capacity in the Manufacturing Suite, Patheon shall in addition to the foregoing requirements, promptly notify Flexion Client of such shortage of production capacity and the estimated date such shortage of production capacity is to end.
(b) The Parties acknowledge that following Completion of the Tech Transfer (as defined in the Technology Transfer Agreement), (i) the engineering approach and footprint agreed by the Parties for the Manufacturing Suite and utility requirements is intended to provide capacity for the Manufacture of [***] vials of Product per [***] and (ii) the provision of personnel supporting the Manufacturing Suite is intended to support the Manufacture of the volumes of Product as set out in the relevant Forecast. Patheon undertakes to maintain such capacity and associated support processes for the Term in order to be able to ramp up to manufacture of at least [***] vials of Product per year within any [***] period, subject to Client’s provision of Forecasts for such volumes in accordance with Section 2.3(a). Patheon shall not without Client’s prior written consent take any step that might reduce this capacity.
(c) If Patheon fails to Manufacture the full quantity of Product specified in a Purchase Order by the Agreed Delivery Date and in conformity with the warranty set forth in Section 6.3 (and such failure is directly due to the acts or omissions of Patheon where such acts or omission does not constitute a force majeure event pursuant to the terms of Section 10.2) (“Late Product”), and Patheon is unable to cure such failure within on or before […***…] days, in full and final settlement of such failure, FlexionClient, at its option, may (i) cancel the unfulfilled portion of such Purchase Order, in which event Flexion Client shall have no liability with respect to the portion of such Purchase Order so cancelled, or (ii) accept late delivery of all or any . The cancelled portion of the Product specified in such Purchase Order, in which event (A) Patheon shall pay all reasonable documented shipping costs for the expedited shipment of Product that are required in addition to the shipping costs for a non-expedited shipment (which shall be the responsibility of Flexion), and (B) the Product Fee otherwise payable by Flexion with respect to all Product delivered late but accepted by Flexion under such Purchase Order shall be reduced by […***…]% per day for each day of delay after such Agreed Delivery Date, but not to exceed in aggregate an amount equal to […***…]% of the count as ordered Product Fees of the Product delivered late (i.e., […***…] days) per Purchase Order; provided that, sub-Section (ii) shall only apply after the Manufacture and delivery of the first […***…] batches of commercial Product (including validation batches) pursuant to this Agreement, following which, if the Parties agree that the Manufacturing process is sufficiently robust to allow the Product to be delivered in a timely manner, this sub-Section (ii) shall be implemented. Any Product which is delivered to Flexion with less than […***…] of expiry, assuming a product shelf life of […***…], shall be considered Non-Conforming Product subject the provisions of Section 2.8(c); provided that, if the Product shelf life is not […***…] (as set forth in the FDA approved label for the Product), the Parties shall mutually agree purposes of measuring On Time In Full Delivery Performance in good faith on the reasonably appropriate minimum amount of expiry a Product should have when delivered.accordance with Schedule D.
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Failure or Inability to Supply Product. (a) Patheon shall ensure that Product is Manufactured and delivered to Flexion on a timely basis consistent with the terms of this Agreement (including the Forecast and Purchase Order procedures set forth in Section 2.3). In the event that PatheonNovel, at any time during the Term, shall have reason to believe that it will be unable to supply Flexion with deliver the full quantity of Product forecasted to be ordered or actually ordered by Flexion Salix in a timely manner and in conformity with the warranty set forth in Section 6.3 2.7 (whether by reason of force majeure or otherwise), Patheon Novel shall, as promptly as possible, notify Salix thereof (and, in any event, shall use its best efforts to provide at least [*] ([*]) days’ advance notice thereof to Salix); and in the event that Actavis, at any time during the Term, shall have reason to believe that Novel will be unable to deliver the full quantity of Product forecasted to be ordered or actually ordered by Salix in a timely manner and in conformity with the warranty set forth in Section 2.7 (whether by reason of force majeure or otherwise), Actavis shall, as promptly as possible, notify Flexion Salix thereof within (and, in any event, shall use its best efforts to provide at least […*] ([**…] business ]) days’ advance notice thereof to Salix). Promptly thereafterafter the giving of any notice contemplated by the previous sentence, the Parties shall meet to discuss how Flexion Salix shall obtain such full quantity of conforming Product. Compliance by Patheon Novel or Actavis with this Section 2.7(a2.8(a) shall not relieve Patheon Novel or Actavis of any other obligation or liability under this Agreement, including any obligation or liability under clause Section 2.8(b) or (b) below. If Patheon’s inability is partial, Patheon shall fulfill Purchase Orders with such quantities of Product as are available. In the event Patheon’s inability to meet Purchase Orders or forecasts is due to a shortage of production capacity in the Manufacturing Suite, Patheon shall in addition to the foregoing requirements, promptly notify Flexion of such shortage of production capacity and the estimated date such shortage of production capacity is to endc).
(b) If Patheon Subject to Sections 2.8(e) and 8.2, if Novel fails to Manufacture deliver the full quantity of Product specified in a Purchase Order by [*] ([*]) days after the Agreed Delivery Date required delivery date specified therein and in conformity with the warranty set forth in Section 6.3 (and such failure is directly due to the acts or omissions of Patheon where such acts or omission does not constitute a force majeure event pursuant to the terms of Section 10.2) (“Late Product”)2.7, and Patheon is unable to cure such failure within […***…] days, in full and final settlement of such failure, Flexionthen Salix may, at its option, may (i) cancel the unfulfilled any portion of such Purchase OrderOrder which is not delivered by such date, in which event Flexion Salix shall have no liability with respect to the portion of such Purchase Order so cancelled, or (ii) accept late delivery of all or any portion of the Product specified in such Purchase Order, in which event (A) Patheon shall pay all reasonable documented shipping costs for the expedited shipment of Product that are required in addition to the shipping costs for a nonPer-expedited shipment (which shall be the responsibility of Flexion), and (B) the Product Fee Unit Supply Price otherwise payable by Flexion Salix to Actavis with respect to all Product delivered late but accepted by Flexion Salix at least [*] ([*]) days after the required delivery date specified under such Purchase Order shall be reduced by […*] percent ([*]%).
(c) Subject to Sections 2.8(e) and 8.2, if Novel fails to deliver the full quantity of Product specified in a Purchase Order by [*…] ([*]% per day for each day ) days after the required delivery date specified therein and in conformity with the warranty set forth in Section 2.7, then Salix may, at its option, (i) accept late delivery of delay after such Agreed Delivery Date, but not to exceed in aggregate an amount equal to […***…]% all or any portion of the Product Fees of the Product delivered late (i.e., […***…] days) per specified in such Purchase Order, in which event the Per-Unit Supply Price [*] Confidential treatment requested; provided that, sub-Section certain information omitted and filed separately with the SEC. otherwise payable by Salix to Actavis with respect to all Product accepted by Salix under such Purchase Order shall be reduced by [*] percent ([*]%) or (ii) provide written notice to Actavis and Novel of its intention to qualify a third party manufacturer for Product, in which event Novel shall only apply after use its best efforts promptly to assist Salix to qualify such third party manufacturer designated by Salix to Manufacture Product, and shall promptly grant to such third party manufacturer, on a royalty-free, non-exclusive basis, such licenses, and provide to such third party manufacturer, free of charge, such technical assistance, as such third party manufacturer may require in order to Manufacture Product to the Manufacture and delivery then-current Specifications in accordance with the then-current Manufacturing process for Product, including full technology transfer of the first then-current Manufacturing processes for Product, as well as, at Salix’s option, sell to Salix, at Novel’s cost, such inventories of Materials as are necessary to effect such qualification and technology transfer and enable Salix to obtain an uninterrupted supply of Product, in all cases solely for use by Salix in its production of Product. For purposes of clarity, Salix may qualify a third party manufacturer for Product.
(d) In the event that Salix determines, within […***…] batches of commercial Product (including validation batches) pursuant to this Agreement, following which, if the Parties agree that the Manufacturing process is sufficiently robust to allow the Product to be delivered in a timely manner, this sub-Section (ii) shall be implemented. Any Product which is delivered to Flexion with less than […***…] of expiry, assuming a product shelf life of […***…], shall be considered Non-Conforming Product subject the provisions of Section 2.8(c); provided that, if the Product shelf life is not […***…] (as [*]) days after delivery thereof (or within [*] ([*]) days after discovery of any nonconformity that could not reasonably have been detected by a customary visual inspection on delivery), that any Product supplied hereunder does not conform to the warranty set forth in the FDA approved label for the Section 2.7, Salix shall give Actavis and Novel notice thereof (including a sample of such Product, if applicable). Novel shall undertake appropriate evaluation of such sample and shall notify Salix and Actavis whether it has confirmed such nonconformity within [*] ([*]) days after receipt of such notice from Salix. If Novel notifies Salix and Actavis that it has not confirmed such nonconformity, the Parties shall submit the dispute to an independent testing laboratory or other appropriate expert mutually agree acceptable to the Parties (the “Testing Laboratory”) for evaluation. All Parties shall cooperate with the Testing Laboratory’s reasonable requests for assistance in good faith connection with its evaluation hereunder. The findings of the Testing Laboratory shall be binding on the reasonably appropriate minimum amount Parties, absent manifest error. The expenses of expiry the Testing Laboratory shall be borne by Actavis and Novel if the testing confirms the nonconformity and otherwise by Salix. If the Testing Laboratory or Novel confirms that a lot of Product should does not conform to the warranty set forth in Section 2.7, Actavis and Novel, at Salix’s option, promptly shall (i) supply Salix with a conforming quantity of Product at the expense of Actavis and Novel or (ii) reimburse Salix for the Per-Unit Supply Price paid by Salix with respect to such nonconforming Product if already paid. In addition, Actavis and Novel promptly shall reimburse Salix for all costs incurred by Salix with respect to such nonconforming Product. Salix shall have when deliveredthe right to offset any such costs against any payments owed by Salix to Actavis or Novel under this Agreement. Novel immediately shall notify Salix and Actavis if at any time it discovers that any Product delivered hereunder does not conform to the warranty set forth in Section 2.7.
(e) The rights and remedies provided in this Section 2.8 shall be cumulative and in addition to any other rights or remedies that may be available to Salix. [*] Confidential Treatment requested; certain information omitted and filed separately with the SEC.
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