Common use of Purchase Orders; Delivery; Delays Clause in Contracts

Purchase Orders; Delivery; Delays. (a) USL will provide to Orion a written purchase order for each delivery, not later than ninety (90) days before the required delivery date. Product will be supplied by Orion only against receipt of USL’s written purchase orders (“Purchase Orders”), and only in full batches of a particular dosage form, initially envisaged to be [***] of bulk gel. The foregoing batch sizes shall not be increased without USL’s consent, such consent not to be unreasonably withheld or delayed. Unless otherwise agreed in connection with an order, Orion will fill and ship all orders of Product in accordance with the Purchase Orders. If any USL Purchase Order is not submitted at least ninety (90) days prior to the requested delivery dates, Orion will still use commercially reasonable efforts to meet USL’s requested delivery dates, and if Orion is unable to do so, the Parties agree to extend the delivery date in good faith to a date that does not interfere with other commitments of Orion on not more than a day-for-day basis. Orion may not produce (or have produced) Product more than sixty (60) days prior to the requested shipment date, provided that (1) with respect to Product produced for purchase orders in anticipation of commercial launch of the Product, the Product shall not be produced more than a number of days before shipment as shall be agreed upon by the parties in good faith, and (2) if [***] expiration dating for the Product is approved by the Regulatory Authorities, the sixty (60) day period may be increased to a period equal to a number of days not exceeding [***] of the Product’s expiration dating. (b) Orion’s supply undertakings are contingent upon USL’s compliance with the order and forecasts procedures specified in Sections 6.2 and 6.3(a) and subject to ordered amounts of Product having been forecasted. (c) Orion shall use all reasonable efforts to avoid or minimize delays in supply, including, at USL’s request, the expenditure of premium time, use of additional labor and shipping via expedited routing. Any additional cost caused by such requirements shall be borne by Orion except to the extent the delay was caused by the contributory fault or negligence of USL, the breach of this Agreement by USL or the relevant amounts of Product not having been forecasted. In addition to any other remedies USL may have under this Agreement due to failure or delay by Orion in the delivery of Product, USL shall have the right to cancel any order which is not made available for delivery to USL for more than thirty (30) days after its agreed delivery date so long as such delay has not been caused due to the contributory fault or negligence of USL or breach of this Agreement by USL, and provided the Product has been forecasted and ordered in accordance with this Section 8. (d) Orion will reserve its production capacity for Product in quantities not more than twenty five percent (25%) in excess of USL’s most recent Routine Forecasts for a Year given pursuant to Section 6.2(b) and Orion’s supply obligations under this Section 6.3(d). Against purchase orders timely made, Orion agrees to supply USL’s requirements of Product for each month provided the order does not exceed USL’s most recent Routine Forecast, as described in Section 6.2(b) above, by more than twenty five percent (25%). Subject to its production capacity and other production scheduling needs and commitments, and the provisions of Section 6.3(e), Orion will use commercially reasonable efforts to supply ordered quantities more than twenty five percent (25%) in excess of amounts forecasted in USL’s most recent Routine Forecast, it being understood that the failure to supply ordered amounts to the extent exceeding USL’s most recent Routine Forecast by more than twenty five percent (25%) will not subject Orion to any penalties or sanctions. (e) Subject to the provisions of Section 6 of this Agreement, and the Quality Assurance Agreement, Orion may satisfy its Product supply obligations to USL under this Agreement either directly or through an Orion Affiliate located either in the Territory or elsewhere, at Orion’s discretion that is approved to manufacture the Product in accordance with the Product NDA; provided, however, that Orion shall at all times remain liable for the performance of any of its Affiliates.