Common use of ACTIVE DRUG SUBSTANCE Clause in Contracts

ACTIVE DRUG SUBSTANCE. CEPHALON will provide free of charge, and --------------------- deliver to CIRCA at its designated production facility not less than thirty (30) days in advance of the date of production of Product, appropriate quantities of Active Drug Substance which meets the specifications established in Schedule A. Following such delivery, CIRCA shall assume full responsibility for the safekeeping and safe handling, and shall bear all risk of loss, of all such Active Drug Substance that is in its possession. Legal title to all Active Drug Substance will remain with CEPHALON, provided however, that CIRCA shall reimburse CEPHALON for the replacement cost of any Active Drug Substance that is lost, contaminated, or destroyed while in the possession of CIRCA. CIRCA will use its best efforts to obtain maximum yield of Product from the Active Drug Substance provided by CEPHALON in connection with the formulation and packaging services provided hereunder. The parties anticipate that the combined yield loss suffered in the course of formulating and packaging the Product in any given lot shall not exceed five percent (5%). Notwithstanding the above, if the yield loss over any given twelve month period during the term hereof exceeds five percent (5%), then CIRCA will reimburse CEPHALON for its costs for that amount of Active Drug Substance lost that exceeds the aforementioned five percent (5%) maximum threshold. Notwithstanding the above, the parties agree to calculate the actual yield loss after production by CIRCA of the first ten (10) batches of Product, and to negotiate in good faith to adjust the aforementioned yield loss threshold if the actual yield loss proves to be substantially more than or less than five percent (5%).