Supply of Licensed Product for Commercial Sale. Kyowa shall have the right to request at anytime during the Term following Commercialization Regulatory Approval that ArQule manufacture, or have manufactured by a Third Party, and supply all or some of Kyowa’s needs for commercial supply of Licensed Product and/or API. If ArQule agrees, the Parties shall negotiate in good faith the terms of such commercial supply agreement (the “Supply Agreement”); provided, that, the price shall be equal to * of the Manufacturing Cost for such Licensed Product or API, as the case may be. ArQule shall (a) deliver the Licensed Product FOB ArQule’s or a Third Party Manufacturer’s facility, (b) arrange delivery of Licensed Product and insurance covering Licensed Product during delivery pursuant to Kyowa’s written instructions and (c) use Commercially Reasonable Efforts to make each Delivery by the dates agreed upon by the Parties in writing. Title to and risk of loss in Licensed Product shall pass to Kyowa upon delivery to the common carrier for delivery to Kyowa. Kyowa shall be responsible for freight, delivery and insurance charges incurred in delivering the Licensed Product to Kyowa’s designated delivery destination. In the event that the price charged to Kyowa exceeds * of the *, ArQule shall proportionally reduce the price charged to Kyowa; provided, that, in no event shall the price be less than * of the Manufacturing Cost. Kyowa may at any time without condition during the Term elect to manufacture or have manufactured Licensed Product and/or API for Commercialization in the Territory, in which case ArQule shall transfer its manufacturing technology to Kyowa or a Third Party designated by Kyowa, at Kyowa’s expense and subject to a royalty-free Technology Transfer Agreement to be negotiated in good faith by the Parties and any Third Party designated by Kyowa.
