Common use of Material Supply Breach Clause in Contracts

Material Supply Breach. 3.7.1 In the event of a MATERIAL SUPPLY BREACH, VIDARA shall provide BI RCV written notification of such MATERIAL SUPPLY BREACH. Upon BI RCV’s receipt of such notice and failure to cure such MATERIAL SUPPLY BREACH within the timetable and activity plan agreed upon the Parties to cure such MATERIAL SUPPLY BREACH, VIDARA shall have the right to purchase from a second source manufacturer, to be agreed upon within the STEERING COMMITTEE in accordance with Section 3.6, such amounts of PRODUCT as necessary to offset BI RCV’s shortfall in fulfilling VIDARA’s purchase orders for such PRODUCT (or the anticipated shortfall, in the event of repeated (maximum two (2) times) material violation against cGMP). In the event, that (i) BI RCV AFFILIATE can not qualify as a second source manufacturer for PRODUCT or (ii) in the event such a BI RCV AFFILIATE is – as foreseeable – unable to supply VIDARA’s PRODUCT requirements and (iii) provided that PRODUCT supply as requested by VIDARA by a different second source manufacturer, a company experienced in manufacturing of biopharmaceuticals derived from *** , and selected by VIDARA could demonstrably take place earlier than a MATERIAL SUPPLY BREACH by BI RCV could be remedied, BI RCV shall assist VIDARA as requested in transferring the MANUFACTURING PROCESS to such a second source supplier, to be selected by VIDARA by providing, reasonable technical assistance and documentation relating to the manufacture, testing and supply of BBS and the PRODUCT as necessary at BI RCV’s cost. Such second source manufacturer would bear responsibility for putting the MANUFACTURING PROCESS in place. The total financial commitment for reasonable technical assistance shall not exceed *** . 3.7.2 In the event that BI RCV reasonably anticipates that there is a substantial likelihood that a MATERIAL SUPPLY BREACH will occur, BI RCV shall promptly notify VIDARA in writing thereof. Upon receipt of such notice, the Parties shall promptly confer to discuss the circumstances and magnitude of such potential MATERIAL SUPPLY BREACH, and to determine in good faith whether there are any reasonable steps that BI RCV could take to avoid such MATERIAL SUPPLY BREACH. If VIDARA is not reasonably satisfied that BI RCV will be able to avoid such MATERIAL SUPPLY BREACH, then VIDARA shall forward this issue to the STEERING COMMITTEE to determine whether it is necessary or desirable to establish a second source manufacturer in accordance with Section 3.6.

Material Supply Breach. 3.7.1 4.10.1 In the event of a MATERIAL SUPPLY BREACH, VIDARA HORIZON shall provide BI RCV written notification of such MATERIAL SUPPLY BREACH. . 4.10.2 Upon BI RCVBI’s receipt of such notice the Parties shall agree in writing upon a timetable and failure activity plan to cure such MATERIAL SUPPLY BREACH within as promptly as possible (the timetable and activity plan agreed upon “CURE PLAN”). If the Parties fail to cure agree upon such a CURE PLAN within […***…] from the date of notice of such MATERIAL SUPPLY BREACH, VIDARA or if BI fails to comply with such CURE PLAN, or if despite BI’s compliance with the CURE PLAN, BI cannot cure the MATERIAL SUPPLY BREACH, then HORIZON shall have the right to purchase from a second source manufacturer, to be agreed upon within the STEERING COMMITTEE in accordance with Section 3.67.4, such amounts of PRODUCT as necessary to offset BI RCVBI’s shortfall in fulfilling VIDARAHORIZON’s purchase orders for such PRODUCT (or the anticipated shortfall). CONFIDENTIAL XxxX: 151373 4.10.3 BI shall evaluate its capabilities and, in the event of repeated (maximum two (2) times) material violation against cGMP)as applicable, promptly nominate a BI AFFILIATE as a second source manufacturer and, if such BI AFFILIATE is approved by HORIZON, shall use its commerically reasonable efforts to qualify such BI AFFILIATE as promptly as possible. In the event, event that: (i) a BI RCV AFFILIATE can not qualify as a second source manufacturer for PRODUCT oror DRUG SUBSTANCE, as applicable, or such a BI AFFILIATE is unable to demonstrate to HORIZON’s reasonable satisfaction that it will be able to supply HORIZON’s PRODUCT or DRUG SUBSTANCE requirements, and (ii) in the event such a BI RCV AFFILIATE is – as foreseeable – unable to supply VIDARA’s PRODUCT requirements and (iii) provided that PRODUCT or DRUG SUBSTANCE supply as requested by VIDARA HORIZON by a different second source manufacturer, a company experienced in manufacturing of biopharmaceuticals derived from […*** *…], and selected by VIDARA HORIZON could demonstrably take place earlier than a MATERIAL SUPPLY BREACH by BI RCV could be remedied, BI RCV shall assist VIDARA HORIZON as requested in transferring the MANUFACTURING PROCESS to such a second source supplier, to be selected by VIDARA by providing, reasonable technical assistance and documentation relating to the manufacture, testing and supply of BBS and the PRODUCT as necessary at BI RCV’s cost. Such second source manufacturer would bear responsibility for putting the MANUFACTURING PROCESS supplier in place. The total financial commitment for reasonable technical assistance shall not exceed *** accordance with Section 14.4. 3.7.2 4.10.4 In the event that BI RCV reasonably anticipates that there is a substantial likelihood that a MATERIAL SUPPLY BREACH will occur, BI RCV shall promptly immediately notify VIDARA HORIZON in writing thereof. Upon receipt of such notice, the Parties shall promptly immediately confer to discuss the circumstances and magnitude of such potential MATERIAL SUPPLY BREACH, and to determine in good faith whether there are any reasonable steps that BI RCV could take to avoid such MATERIAL SUPPLY BREACH. If VIDARA HORIZON is not reasonably satisfied that BI RCV will be able to avoid such MATERIAL SUPPLY BREACH, then VIDARA HORIZON shall forward this issue to the STEERING COMMITTEE to determine whether it is necessary or desirable to establish a second source manufacturer to prevent such a MATERIAL SUPPLY BREACH from occurring. 4.10.5 Nothing in accordance this Section 4.10 shall affect HORIZON’s rights under Section 14 of this AGREEMENT or any right or remedy otherwise available to HORIZON in connection with Section 3.6such MATERIAL SUPPLY BREACH.

Material Supply Breach. 3.7.1 [*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. Confidential treatment has been requested with respect to the omitted portions. 3.8.1 In the event of a MATERIAL SUPPLY BREACH, VIDARA InterMune shall provide BI RCV Austria written notification of such MATERIAL SUPPLY BREACH. Upon BI RCVAustria’s receipt of such notice and failure to cure such MATERIAL SUPPLY BREACH within the timetable and activity plan agreed upon the Parties to cure such MATERIAL SUPPLY BREACH, VIDARA InterMune shall have the right to purchase from a second source manufacturer, to be agreed upon within the STEERING COMMITTEE in accordance with Section 3.63.7, such amounts of PRODUCT as necessary to offset BI RCVAustria’s shortfall in fulfilling VIDARAInterMune’s purchase orders for such PRODUCT (or the anticipated shortfall, in the event of repeated (maximum two (2) times) [*] material violation against cGMP). In the event, that (i) BI RCV Austria AFFILIATE can not qualify as a second source manufacturer for PRODUCT or (ii) in the event such a BI RCV Austria AFFILIATE is – as foreseeable – — unable to supply VIDARAInterMune’s PRODUCT requirements and (iii) provided that PRODUCT supply as requested by VIDARA InterMune by a different second source manufacturer, a company experienced in manufacturing of biopharmaceuticals derived from [*** ], and selected by VIDARA InterMune could demonstrably take place earlier than a MATERIAL SUPPLY BREACH by BI RCV Austria could be remedied, BI RCV Austria shall assist VIDARA InterMune as requested in transferring the MANUFACTURING PROCESS to such a second source supplier, to be selected by VIDARA InterMune by providing, providing reasonable technical assistance and documentation relating to the manufacture, testing and supply of BBS and the PRODUCT as necessary at BI RCVAustria’s cost. Such second source manufacturer would bear responsibility for putting the MANUFACTURING PROCESS in place. The total financial commitment for reasonable technical assistance shall not exceed the [*] for the period of [** ]. 3.7.2 3.8.2 In the event that BI RCV Austria reasonably anticipates that there is a substantial likelihood that a MATERIAL SUPPLY BREACH will occur, BI RCV Austria shall promptly notify VIDARA InterMune in writing thereof. Upon receipt of such notice, the Parties shall promptly confer to discuss the circumstances and magnitude of such potential MATERIAL SUPPLY BREACH, and to determine in good faith whether there are any reasonable steps that BI RCV Austria could take to avoid such MATERIAL SUPPLY BREACH. If VIDARA InterMune is not reasonably satisfied that BI RCV Austria will be able to avoid such MATERIAL SUPPLY BREACH, then VIDARA InterMune shall forward this issue to the STEERING COMMITTEE to determine whether it is necessary or desirable to establish a second source manufacturer in accordance with Section 3.63.7.

Material Supply Breach. 3.7.1 3.8.1. In the event of a MATERIAL SUPPLY BREACH, VIDARA InterMune shall provide BI RCV Austria written notification of such MATERIAL SUPPLY BREACH. Upon BI RCV’s Austria's receipt of such notice and failure to cure such MATERIAL SUPPLY BREACH within the timetable and activity plan agreed upon the Parties to cure such MATERIAL SUPPLY BREACH, VIDARA InterMune shall have the right to purchase from a second source manufacturer, to be agreed upon within the STEERING COMMITTEE in accordance with Section 3.63.7, such amounts of PRODUCT as necessary to offset BI RCV’s Austria's shortfall in fulfilling VIDARA’s InterMune's purchase orders for such PRODUCT (or the anticipated shortfall, in the event of repeated (maximum two (2) times) [ * ]material violation against cGMP). In the event, that (i) a BI RCV Austria AFFILIATE can not qualify as a second source manufacturer for PRODUCT or (ii) in the event such a BI RCV Austria AFFILIATE is – - as foreseeable – unable -unable to supply VIDARA’s InterMune's PRODUCT requirements and (iii) provided that PRODUCT supply as requested by VIDARA InterMune by a different second source manufacturer, a company experienced in manufacturing of biopharmaceuticals derived from **[ * ], and selected by VIDARA InterMune could demonstrably take place earlier than a MATERIAL SUPPLY BREACH by BI RCV Austria could be remedied, BI RCV Austria shall assist VIDARA InterMune as requested in transferring the MANUFACTURING PROCESS to such a second source supplier, to be selected by VIDARA InterMune by providing, providing reasonable technical assistance and documentation relating to the manufacture, testing and supply of BBS and the PRODUCT as necessary at BI RCV’s Austria's cost. Such second source manufacturer would bear responsibility for putting the MANUFACTURING PROCESS in place. The total financial commitment for [ * ]reasonable technical assistance shall not exceed **[ * ]. [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED. 3.7.2 3.8.2. In the event that BI RCV Austria reasonably anticipates that there is a substantial likelihood that a MATERIAL SUPPLY BREACH will occur, BI RCV Austria shall promptly notify VIDARA InterMune in writing thereof. Upon receipt of such notice, the Parties shall promptly confer to discuss the circumstances and magnitude of such potential MATERIAL SUPPLY BREACH, and to determine in good faith whether there are any reasonable steps that BI RCV Austria could take to avoid such MATERIAL SUPPLY BREACH. If VIDARA InterMune is not reasonably satisfied that BI RCV Austria will be able to avoid such MATERIAL SUPPLY BREACH, then VIDARA InterMune shall forward this issue to the STEERING COMMITTEE to determine whether it is necessary or desirable to establish a second source manufacturer in accordance with Section 3.63.7.

Material Supply Breach. 3.7.1 3.8.1. In the event of a MATERIAL SUPPLY BREACH, VIDARA InterMune shall provide BI RCV Austria written notification of such MATERIAL SUPPLY BREACH. Upon BI RCV’s Austria's receipt of such notice and failure to cure such MATERIAL SUPPLY BREACH within the timetable and activity plan agreed upon the Parties to cure such MATERIAL SUPPLY BREACH, VIDARA InterMune shall have the right to purchase from a second source manufacturer, to be agreed upon within the STEERING COMMITTEE in accordance with Section 3.63.7, such amounts of PRODUCT as necessary to offset BI RCV’s Austria's shortfall in fulfilling VIDARA’s InterMune's purchase orders for such PRODUCT (or the anticipated shortfall, in the event of repeated (maximum two (2) times) material violation against cGMP). In the event, that (i) a BI RCV Austria AFFILIATE can not qualify as a second source manufacturer for PRODUCT or (ii) in the event such a BI RCV Austria AFFILIATE is – - as foreseeable – unable -unable to supply VIDARA’s InterMune's PRODUCT requirements and (iii) provided that PRODUCT supply as requested by VIDARA InterMune by a different second source manufacturer, a company experienced in manufacturing of biopharmaceuticals derived from *** microbial fermentation technology, and selected by VIDARA InterMune could demonstrably take place earlier than a MATERIAL SUPPLY BREACH by BI RCV Austria could be remedied, BI RCV Austria shall assist VIDARA InterMune as requested in transferring the MANUFACTURING PROCESS to such a second source supplier, to be selected by VIDARA InterMune by providing, providing reasonable technical assistance and documentation relating to the manufacture, testing and supply of BBS and the PRODUCT as necessary at BI RCV’s Austria's cost. Such second source manufacturer would bear responsibility for putting the MANUFACTURING PROCESS in place. The total financial commitment for reasonable technical assistance shall not exceed **the costs equivalent to one (1) FTE (full time equivalent) for the period of six (6) months. [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED. 3.7.2 3.8.2. In the event that BI RCV Austria reasonably anticipates that there is a substantial likelihood that a MATERIAL SUPPLY BREACH will occur, BI RCV Austria shall promptly notify VIDARA InterMune in writing thereof. Upon receipt of such notice, the Parties shall promptly confer to discuss the circumstances and magnitude of such potential MATERIAL SUPPLY BREACH, and to determine in good faith whether there are any reasonable steps that BI RCV Austria could take to avoid such MATERIAL SUPPLY BREACH. If VIDARA InterMune is not reasonably satisfied that BI RCV Austria will be able to avoid such MATERIAL SUPPLY BREACH, then VIDARA InterMune shall forward this issue to the STEERING COMMITTEE to determine whether it is necessary or desirable to establish a second source manufacturer in accordance with Section 3.63.7.