Common use of Failure to Obtain Quota Clause in Contracts

Failure to Obtain Quota. In the event that a Party has not obtained the necessary Manufacturing Quota or Procurement Quota, as the case may be, to allow it fully to perform its obligations under this Agreement, such Party shall promptly inform the other Party in writing. In the event there is not sufficient Manufacturing Quota or Procurement Quota with respect to an outstanding Purchase Order for API or with respect to the then-current Forecast, then, without limiting any other provision of this Agreement (including Section 2.2 and Section 2.6.3), the Delivery date will be adjusted by the Parties for a reasonable period mutually agreed by the Parties (which agreement shall not be unreasonably withheld) to allow the applicable Party to obtain the necessary Manufacturing Quota or Procurement Quota, as the case may be. In the event Manufacturing Quota is not received within such mutually agreed period after the original Delivery date, then, notwithstanding Section 2.5 herein above, such Purchase Order, or a part thereof as agreed by the Parties, may be, but is not required to be, cancelled by Osm Kft by written notice to Mallinckrodt; however, such adjustment of the Delivery date in response to a failure to receive Manufacturing Quota shall not constitute a Supply Failure under this Agreement. In the event Osm Kft does not obtain Procurement Quota within such mutually agreed period after the original Delivery date, then Osm Kft shall (a) have the right to cancel such Purchase Order by written notice to the other Party or (b) defer Delivery of Products under such Purchase Order until such time as sufficient Procurement Quota is available. In the event of any cancellation of a Purchase Order as a result of insufficient Manufacturing Quota, Osm Kft shall pay to Mallinckrodt an amount equal to any Conforming API Delivered to Osm Kft pursuant to such cancelled Purchase Order prior to the date Mallinckrodt is informed in writing of such cancellation. In the event of any cancellation of a Purchase Order as a result of insufficient Procurement Quota, Osm Kft shall pay to Mallinckrodt an amount equal to any direct costs, substantiated with written documentation provided to Osm Kft (including reasonable, documented out-of-pocket costs but excluding allocations for overhead expenses, idle facility or equipment charges or facility fees) incurred by Mallinckrodt in fulfilling any such cancelled Purchase Order through the date of notification of cancellation; provided that, Osm Kft’s liability to make such payment shall not exceed the total amount that would have been payable by Osm Kft to Mallinckrodt with respect to such Purchase Order had it not been cancelled in accordance herewith. Any amounts due by Osm Kft to Mallinckrodt pursuant to this Section 2.6.2 shall be payable by Osm Kft within sixty (60) days after Osm Kft’s receipt from Mallinckrodt of a written invoice detailing such costs, accompanied by such documentation as may be reasonably necessary to demonstrate the amount and nature of such costs.

Failure to Obtain Quota. In Each Party shall use commercially reasonable efforts to prepare and plan for the supply and purchase of Product against Purchase Orders given in accordance with the Rolling Forecasts in anticipation of each Party receiving applicable quota from the DEA. However, in the event that a Party has not obtained the necessary Manufacturing Quota or Procurement Quota, as the case may be, to allow it fully to perform its obligations under this Agreement, such Party shall promptly immediately inform the other Party in writing. In the event that there is not sufficient Manufacturing Quota or Procurement Quota with respect to an outstanding a Purchase Order for API or with respect a Product at the time such Purchase Order is delivered by the Company to the then-current Forecast, then, without limiting any other provision of this Agreement (including Section 2.2 and Section 2.6.3)Supplier pursuant to Article 5, the Delivery date will be adjusted by Parties shall promptly meet to discuss the Parties for a reasonable period mutually agreed by the Parties (which agreement shall not be unreasonably withheld) to allow the applicable Party to obtain the prospects and timing of receipt of necessary Manufacturing Quota or Procurement Quota, as the case may be. In Until such time as the necessary Manufacturing Quota or Procurement Quota has been received, ***. Each Party shall keep the other advised of developments with respect to the receipt of the necessary quota. As soon as pending Procurement Quota or Manufacturing Quota is in fact received, the receiving Party shall promptly notify the other Party, and the Parties shall promptly meet to coordinate on an Delivery Date for such Product. Notwithstanding the foregoing, in the event that the pending Manufacturing Quota or Procurement Quota is not received within such mutually agreed period after (*** of the original Delivery date, then, notwithstanding Section 2.5 herein above, such API Supply Agreement – EXECUTION VERSION 21 applicable Purchase Order, or a part thereof as agreed by then the Parties, may be, but is Party not required to be, cancelled by Osm Kft by written notice to Mallinckrodt; however, such adjustment of experiencing the Delivery date in response to a failure to receive Manufacturing Quota shall not constitute a Supply Failure under this Agreement. In the event Osm Kft does not obtain Procurement Quota within such mutually agreed period after the original Delivery date, then Osm Kft shall (a) have the right to cancel such Purchase Order by written notice to the other Party or (b) defer Delivery of Products under such Purchase Order until such time as sufficient Procurement Quota is available. In the event of any cancellation of a Purchase Order as a result of insufficient Manufacturing Quota, Osm Kft shall pay to Mallinckrodt an amount equal to any Conforming API Delivered to Osm Kft pursuant to such cancelled Purchase Order prior to the date Mallinckrodt is informed in writing of such cancellation. In the event of any cancellation of a Purchase Order as a result of insufficient Procurement Quota, Osm Kft shall pay to Mallinckrodt an amount equal to any direct costs, substantiated with written documentation provided to Osm Kft (including reasonable, documented out-of-pocket costs but excluding allocations for overhead expenses, idle facility or equipment charges or facility fees) incurred by Mallinckrodt in fulfilling any such cancelled Purchase Order through the date of notification of cancellation; provided that, Osm Kft’s liability to make such payment shall not exceed the total amount that would have been payable by Osm Kft to Mallinckrodt quota deficit with respect to such Purchase Order had it may, but is not required to, *** to the other Party (e.g. the Party which has been cancelled in accordance herewithunable to obtain quota). Any amounts due by Osm Kft to Mallinckrodt pursuant to this Section 2.6.2 The effect of such *** shall be payable by Osm Kft within sixty that each Party’s obligations with respect to purchase and supply of Product under that specific Purchase Order is *** (60it being understood that (A) days after Osm KftCompany shall not be *** in the event that Company was unable to obtain Procurement Quota and (b) Company’s receipt from Mallinckrodt of a written invoice detailing such costs, accompanied by such documentation as may minimum purchase requirement will be reasonably necessary *** if Supplier fails to demonstrate the amount and nature of such costssecure Manufacturing Quota).

Failure to Obtain Quota. In Each Party shall use commercially reasonable efforts to prepare and plan for the supply and purchase of API(s) against Purchase Orders given in accordance with this Agreement, in anticipation of each Party receiving applicable quota from the DEA. However, in the event that a Party has not obtained the necessary Manufacturing Quota or Procurement Quota, as the case may be, to allow it fully to perform its obligations under this Agreement, such Party shall promptly inform the other Party in writing. In the event that there is not sufficient Manufacturing Quota or Procurement Quota with respect to an outstanding Purchase Order for API or with respect to an API, such Purchase Order shall nonetheless remain valid and binding upon the then-current ForecastParties; provided, then, without limiting any other provision of this Agreement (including Section 2.2 and Section 2.6.3), the Delivery date will be adjusted by that the Parties shall adjust the delivery date set forth in such Purchase Order for a reasonable period mutually agreed by the Parties not to exceed two (which agreement shall not be unreasonably withheld2) months, so as to allow the applicable Party to obtain permit receipt of the necessary Manufacturing Quota or Procurement Quota, as the case may be. In the event that Manufacturing Quota is not received within such mutually agreed period after two (2) months of the original Delivery originally scheduled API delivery date, then, notwithstanding Section 2.5 herein above, then such Purchase Order, or a part thereof as agreed by the Parties, Order may be, but is not required to be, cancelled by Osm Kft Buyer by written notice to Mallinckrodt; however, Noramco. Cancellation of such adjustment of the Delivery date in response Purchase Order shall be Buyer’s sole and exclusive remedy due to a failure to receive Manufacturing Quota shall not constitute a Supply Failure under this AgreementRestriction. In the event Osm Kft does that Buyer has not obtain obtained Procurement Quota within such mutually agreed period after one (1) month of the original Delivery originally scheduled API delivery date, then Osm Kft shall (a) have the right to cancel such Purchase Order may be, but is not required to be, cancelled by Noramco by written notice to the other Party or (b) defer Delivery Buyer. Cancellation of Products under such Purchase Order until such time as sufficient shall be Noramco’s sole and exclusive remedy due to a Procurement Quota is available. In the event Restriction; provided, however that Buyer shall not be relieved of any cancellation of a Purchase Order as a result of insufficient Manufacturing Quotaits binding purchase requirement, Osm Kft shall pay subject to Mallinckrodt an amount equal variance under Section 5.. Alternatively, Noramco may elect, in lieu cancellation, to any Conforming store such API Delivered to Osm Kft pursuant subject to such cancelled Purchase Order prior Procurement Quota Restriction for a period not to exceed three (3) months after the originally scheduled API delivery date Mallinckrodt is informed in writing at Buyer’s reasonable expense. If Buyer still has not obtained Procurement Quota by the end of such cancellation. In the event of any cancellation of a Purchase Order as a result of insufficient Procurement Quotathree (3) month period, Osm Kft shall pay to Mallinckrodt an amount equal to any direct costsNoramco may, substantiated with written documentation provided to Osm Kft (including reasonablein its sole discretion, documented out-of-pocket costs but excluding allocations for overhead expenses, idle facility or equipment charges or facility fees) incurred by Mallinckrodt in fulfilling any such cancelled Purchase Order through the date of notification of cancellation; provided that, Osm Kft’s liability to make such payment shall not exceed the total amount that would have been payable by Osm Kft to Mallinckrodt with respect to such Purchase Order had it not been cancelled in accordance herewith. Any amounts due by Osm Kft to Mallinckrodt pursuant to this Section 2.6.2 shall be payable by Osm Kft within sixty (60) days after Osm Kft’s receipt from Mallinckrodt of a written invoice detailing such costs, accompanied by such documentation as may be reasonably necessary to demonstrate the amount and nature dispose of such costsAPI at Buyer’s reasonable expense and invoice Buyer for full payment for such API under the applicable Purchase Order.