Compensation and Terms of Payment. 6.1 In consideration for the supply of the Active Material by SIEGFRIED to JAZZ PHARMACEUTICALS under the terms of this Agreement, JAZZ PHARMACEUTICALS shall pay SIEGFRIED the amounts as set out in Schedule 4, subject to such adjustments as set forth in Section 6.2 below. The fees that are payable by JAZZ PHARMACEUTICALS for the Active Material as set forth on Schedule 4 are based on the actual annual volume of Active Material ordered by JAZZ PHARMACEUTICALS in any Year (“Actual Ordered Product”). The Parties shall estimate the fees payable by JAZZ PHARMACEUTICALS in any Year based on the Forecasts provided by JAZZ PHARMACEUTICALS under Section 2.7 above. Within [ * ] of the end of the each Year, the Parties shall reconcile the difference which may be payable by either Party based on the Actual Ordered Product for such Year. If the Actual Ordered Product for such Year is in a tier with a higher cost than that used to calculate the fees for such Year, JAZZ PHARMACEUTICALS shall pay SIEGFRIED the difference owed in accordance with Section 6.4 below. If the Actual Ordered Product for such Year is in a tier with a lower cost than that used by the Parties to estimate the fees for such Year, SIEGFRIED shall credit or refund, at JAZZ PHARMACEUTICALS’ option, JAZZ PHARMACEUTICALS for such overpayment. 6.2 On the first day of the applicable Year during the term of this Agreement, SIEGFRIED shall be entitled to an adjustment to the fees set forth on Schedule 4 (i) for Manufacturing Services in respect of the Active Material other than raw materials costs (“Conversion Costs”) to reflect increases in manufacturing costs, which adjustment shall not exceed the increase in the Producers’ Price Index, Pharmaceuticals Preparations, NAICS 325412 (“PPI”) of the immediately preceding month compared to the same month of the preceding Year, unless the parties otherwise agree in writing; and (ii) for raw material costs to pass on the actual documented amount of any increase or decrease in such costs. SIEGFRIED will use commercially reasonable efforts to minimize raw material costs. Notwithstanding the foregoing, if at any time market conditions result in SIEGFRIED’s cost of raw materials being materially greater than or less than the raw material costs anticipated for the current Year when pricing was determined in January of such year, then there shall be an adjustment to the raw material costs used in the calculation of the fees set forth on Schedule 4 to reflect such increase or decrease in costs for the period of such material increase or decrease in costs. For the purpose of this Section 6.2, the threshold for materially greater than or less than shall be defined as [ * ] for the Active Material in the relevant Year. [ * ] = 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. 6.3 For changes to the Specifications or manufacturing processes that are required by applicable Laws (“Required Manufacturing Changes”), SIEGFRIED and the JAZZ PHARMACEUTICALS shall cooperate in making such changes and use commercially reasonable efforts to implement such changes promptly in a manner that minimizes any effect on the supply hereunder to JAZZ PHARMACEUTICALS of the Active Material meeting Specifications. All costs associated with Required Manufacturing Changes directly related to the Manufacturing Site that are not required solely to permit SIEGFRIED to Manufacture the Active Material shall be borne by SIEGFRIED. All other costs associated with Required Manufacturing Changes under this Agreement, including, without limitation, obsolete raw material, regulatory filings, work in process, equipment and Active Material shall be borne by JAZZ PHARMACEUTICALS. Amendments to the Specifications or the Quality Agreement requested by JAZZ PHARMACEUTICALS that are not Required Manufacturing Changes (“JAZZ PHARMACEUTICALS Requested Changes”) will only be implemented following a technical and cost review by SIEGFRIED and are subject to JAZZ PHARMACEUTICALS and SIEGFRIED reaching agreement as to revisions, if any, to the fees specified in Schedules 4 necessitated by any such amendment. Amendments to the Specifications, the Quality Agreement or the Manufacturing Site requested by SIEGFRIED that are not Required Manufacturing Changes (“SIEGFRIED Requested Changes”) will only be implemented following the approval of JAZZ PHARMACEUTICALS, such approval not to be unreasonably withheld, and the costs of the SIEGFRIED Requested Changes will be borne by SIEGFRIED. If JAZZ PHARMACEUTICALS accepts a proposed fee change, the proposed change in the Specifications shall be implemented, and the fee change shall become effective only with respect to those orders of the Active Material that are manufactured in accordance with the revised Specifications. In addition, with respect to JAZZ PHARMACEUTICALS Requested Changes, JAZZ PHARMACEUTICALS agrees to purchase, at SIEGFRIED’s cost therefor (including all costs incurred by SIEGFRIED in connection with the purchase and handling of such inventory), all Inventory utilized under the “old” Specifications and purchased or maintained by SIEGFRIED in order to fill Firm Orders or in accordance with Section 2.7 above, to the extent that such inventory can no longer be utilized under the revised Specifications. Open purchase orders for raw materials no longer required under any revised Specifications that were placed by SIEGFRIED in accordance with this Agreement with suppliers in order to fill Firm Orders or in accordance with Section 2.7 shall be cancelled where possible, and where such orders are not subject to cancellation without penalty, shall be assigned to and satisfied by JAZZ PHARMACEUTICALS. 6.4 Invoices will be issued by SIEGFRIED and sent to JAZZ PHARMACEUTICALS upon shipment of the Active Material in accordance with Section 2.11 of this Agreement. Each such invoice shall, to the extent applicable, identify the JAZZ PHARMACEUTICALS purchase order number, Active Material quantities, unit price, freight charges and the total amount to be remitted by JAZZ PHARMACEUTICALS. JAZZ PHARMACEUTICALS shall pay all such invoices within [ * ] of the date thereof by wire transfer. Notwithstanding the foregoing, JAZZ PHARMACEUTICALS may withhold any amounts invoiced by SIEGFRIED that it disputes in good faith. If JAZZ PHARMACEUTICALS disputes any invoice, JAZZ PHARMACEUTICALS shall within [ * ] after such invoice is furnished to it notify SIEGFRIED that it disputes the accuracy or appropriateness of such invoice and specify the particular respects in which such invoice is inaccurate or inappropriate. JAZZ PHARMACEUTICALS and SIEGFRIED will make good faith efforts to resolve any disputes within [ * ] thereafter. Any amounts that are disputed by JAZZ PHARMACEUTICALS shall not be due until [ * ] following the resolution of such dispute. [ * ] = 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. 6.5 The Parties agree that, unless set out otherwise in this Agreement, all payments made to SIEGFRIED pursuant to this Agreement shall be non-refundable and that the expiration or termination of this Agreement shall not relieve JAZZ PHARMACEUTICALS of its obligation to pay any outstanding balances due.
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Sources: Supply Agreement, Supply Agreement (Jazz Pharmaceuticals Inc)
Compensation and Terms of Payment. 6.1 In consideration for the supply of the Active Material by SIEGFRIED ▇▇▇▇▇▇▇▇▇ to JAZZ PHARMACEUTICALS under the terms of this Agreement, JAZZ PHARMACEUTICALS shall pay SIEGFRIED the amounts as set out in Schedule 4, subject to such adjustments as set forth in Section 6.2 below. The fees that are payable by JAZZ PHARMACEUTICALS for the Active Material as set forth on Schedule 4 are based on the actual annual volume of Active Material ordered by JAZZ PHARMACEUTICALS in any Year (“Actual Ordered Product”). The Parties shall estimate the fees payable by JAZZ PHARMACEUTICALS in any Year based on the Forecasts provided by JAZZ PHARMACEUTICALS under Section 2.7 above. Within [ * ] of the end of the each Year, the Parties shall reconcile the difference which may be payable by either Party based on the Actual Ordered Product for such Year. If the Actual Ordered Product for such Year is in a tier with a higher cost than that used to calculate the fees for such Year, JAZZ PHARMACEUTICALS shall pay SIEGFRIED the difference owed in accordance with Section 6.4 below. If the Actual Ordered Product for such Year is in a tier with a lower cost than that used by the Parties to estimate the fees for such Year, SIEGFRIED ▇▇▇▇▇▇▇▇▇ shall credit or refund, at JAZZ PHARMACEUTICALS’ option, JAZZ PHARMACEUTICALS for such overpayment.
6.2 On the first day of the applicable Year during the term of this Agreement, SIEGFRIED ▇▇▇▇▇▇▇▇▇ shall be entitled to an adjustment to the fees set forth on Schedule 4 (i) for Manufacturing Services in respect of the Active Material other than raw materials costs (“Conversion Costs”) to reflect increases in manufacturing costs, which adjustment shall not exceed the increase in the Producers’ ' Price Index, Pharmaceuticals Preparations, NAICS 325412 (“PPI”) of the immediately preceding month compared to the same month of the preceding Year, unless the parties otherwise agree in writing; and (ii) for raw material costs to pass on the actual documented amount of any increase or decrease in such costs. SIEGFRIED ▇▇▇▇▇▇▇▇▇ will use commercially reasonable efforts to minimize raw material costs. Notwithstanding the foregoing, if at any time market conditions result in SIEGFRIED’s ▇▇▇▇▇▇▇▇▇'▇ cost of raw materials being materially greater than or less than the raw material costs anticipated for the current Year when pricing was determined in January of such year, then there shall be an adjustment to the raw material costs used in the calculation of the fees set forth on Schedule 4 to reflect such increase or decrease in costs for the period of such material increase or decrease in costs. For the purpose of this Section 6.2, the threshold for materially greater than or less than shall be defined as [ * ] for the Active Material in the relevant Year. [ * ] = 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.
6.3 For changes to the Specifications or manufacturing processes that are required by applicable Laws (“"Required Manufacturing Changes”"), SIEGFRIED ▇▇▇▇▇▇▇▇▇ and the JAZZ PHARMACEUTICALS shall cooperate in making such changes and use commercially reasonable efforts to implement such changes promptly in a manner that minimizes any effect on the supply hereunder to JAZZ PHARMACEUTICALS of the Active Material meeting Specifications. All costs associated with Required Manufacturing Changes directly related to the Manufacturing Site that are not required solely to permit SIEGFRIED ▇▇▇▇▇▇▇▇▇ to Manufacture the Active Material shall be borne by SIEGFRIED▇▇▇▇▇▇▇▇▇. All other costs associated with Required Manufacturing Changes under this Agreement, including, without limitation, obsolete raw material, regulatory filings, work in process, equipment and Active Material shall be borne by JAZZ PHARMACEUTICALS. Amendments to the Specifications or the Quality Agreement requested by JAZZ PHARMACEUTICALS that are not Required Manufacturing Changes (“"JAZZ PHARMACEUTICALS Requested Changes”") will only be implemented following a technical and cost review by SIEGFRIED ▇▇▇▇▇▇▇▇▇ and are subject to JAZZ PHARMACEUTICALS and SIEGFRIED ▇▇▇▇▇▇▇▇▇ reaching agreement as to revisions, if any, to the fees specified in Schedules 4 necessitated by any such amendment. Amendments to the Specifications, the Quality Agreement or the Manufacturing Site requested by SIEGFRIED ▇▇▇▇▇▇▇▇▇ that are not Required Manufacturing Changes (“SIEGFRIED "▇▇▇▇▇▇▇▇▇ Requested Changes”") will only be implemented following the approval of JAZZ PHARMACEUTICALS, such approval not to be unreasonably withheld, and the costs of the SIEGFRIED Requested Changes will be borne by SIEGFRIED▇▇▇▇▇▇▇▇▇. If JAZZ PHARMACEUTICALS accepts a proposed fee change, the proposed change in the Specifications shall be implemented, and the fee change shall become effective only with respect to those orders of the Active Material that are manufactured in accordance with the revised Specifications. In addition, with respect to JAZZ PHARMACEUTICALS Requested Changes, JAZZ PHARMACEUTICALS agrees to purchase, at SIEGFRIED’s ▇▇▇▇▇▇▇▇▇'▇ cost therefor (including all costs incurred by SIEGFRIED ▇▇▇▇▇▇▇▇▇ in connection with the purchase and handling of such inventory), all Inventory utilized under the “"old” " Specifications and purchased or maintained by SIEGFRIED ▇▇▇▇▇▇▇▇▇ in order to fill Firm Orders or in accordance with Section 2.7 above, to the extent that such inventory can no longer be utilized under the revised Specifications. Open purchase orders for raw materials no longer required under any revised Specifications that were placed by SIEGFRIED ▇▇▇▇▇▇▇▇▇ in accordance with this Agreement with suppliers in order to fill Firm Orders or in accordance with Section 2.7 shall be cancelled where possible, and where such orders are not subject to cancellation without penalty, shall be assigned to and satisfied by JAZZ PHARMACEUTICALS.
6.4 Invoices will be issued by SIEGFRIED ▇▇▇▇▇▇▇▇▇ and sent to JAZZ PHARMACEUTICALS upon shipment of the Active Material in accordance with Section 2.11 of this Agreement. Each such invoice shall, to the extent applicable, identify the JAZZ PHARMACEUTICALS purchase order number, Active Material quantities, unit price, freight charges and the total amount to be remitted by JAZZ PHARMACEUTICALS. JAZZ PHARMACEUTICALS shall pay all such invoices within [ * ] of the date thereof by wire transfer. Notwithstanding the foregoing, JAZZ PHARMACEUTICALS may withhold any amounts invoiced by SIEGFRIED ▇▇▇▇▇▇▇▇▇ that it disputes in good faith. If JAZZ PHARMACEUTICALS disputes any invoice, JAZZ PHARMACEUTICALS shall within [ * ] after such invoice is furnished to it notify SIEGFRIED ▇▇▇▇▇▇▇▇▇ that it disputes the accuracy or appropriateness of such invoice and specify the particular respects in which such invoice is inaccurate or inappropriate. JAZZ PHARMACEUTICALS and SIEGFRIED ▇▇▇▇▇▇▇▇▇ will make good faith efforts to resolve any disputes within [ * ] thereafter. Any amounts that are disputed by JAZZ PHARMACEUTICALS shall not be due until [ * ] following the resolution of such dispute. [ * ] = 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.
6.5 The Parties agree that, unless set out otherwise in this Agreement, all payments made to SIEGFRIED pursuant to this Agreement shall be non-refundable and that the expiration or termination of this Agreement shall not relieve JAZZ PHARMACEUTICALS of its obligation to pay any outstanding balances due.
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