Negotiation of Facility Expansion Sample Clauses

Negotiation of Facility Expansion. The Parties recognize that by the end of [*], Cantex's requirements for API may exceed SPL's current capacity to manufacture and supply API. At any time, Cantex may request that SPL increase its capacity to manufacture and supply API to Cantex to a commercially reasonable capacity given likely demand for the Product, keeping in mind that it will likely take no less than [*] to build and qualify such new facility. Upon such a request, the Parties shall enter into a negotiation in good faith to discuss the terms and conditions for such an expansion (a "Facility Expansion"). In addition, the Parties will negotiate in good faith such other matters as are commercially reasonable in connection with the Facility Expansion. Subject to reaching a mutual agreement, the Parties may enter into a Facility Expansion agreement detailing the manner in which SPL shall increase its API manufacturing capacity and supply such API to Cantex. Cantex may elect to undertake the Facility Expansion if Cantex has reasonably concluded that FDA Approval is likely to be forthcoming in the reasonably foreseeable future. In such event, the Parties will discuss in good faith the scope of the Facility Expansion, its design, the requisite capital equipment and similar items necessary to complete a Facility Expansion, including a budget and reasonable "take or pay" arrangement with respect to API that is producible from such Facility Expansion. Cantex may require SPL to pay for the Facility Expansion once FDA Approval of a Product is received, provided that the volume of API to be purchased from the Facility Expansion is an amount reasonably sufficient to allow SPL to amortize the costs of the Facility Expansion over a reasonable period. If Cantex requests that SPL pay for the Facility Expansion before FDA Approval is received, SPL shall have the right to refuse to pay for the Facility Expansion and in such case, Cantex may terminate this Agreement as its sole recourse; provided, however, that neither Party shall be prohibited from pursuing available remedies at law or equity in connection with the other Party's breach of any other provision of this Agreement. In the event Cantex determines to undertake a Facility Expansion and the Parties are unable to reach agreement on all terms of the Facility Expansion, the Parties will submit the open issues to binding arbitration in accordance with this Section 2.3 and Section 12.3. SPL may not refuse to undertake a Facility Expansion if Cantex is fun...