Common use of Competitive Bid Option Clause in Contracts

Competitive Bid Option. With respect to each Pharmaceutical Excipient, in the event that Penwest can reasonably demonstrate to Penford that a bona fide third party supplier has the documented capacity to manufacture such Pharmaceutical Excipient of at least the same quality as the Pharmaceutical Excipients manufactured by or for Penford, in at least the same quantity and at a cost that is less than ninety percent (90%) of the Purchase Price for such Pharmaceutical Excipient currently charged Penwest by Penford, then Penford shall have sixty (60) days in which to reduce its Purchase Price for such Pharmaceutical Excipient to the price to be charged Penwest by such third party. If within such sixty (60) day period, Penford fails to reduce its Purchase Price for such Pharmaceutical Excipient to the price to be charged by such third party, then Penwest shall have the right to purchase any and all amounts of such Pharmaceutical Excipient from such third party. Penwest shall notify Penford in writing of any decision by Penwest to acquire Pharmaceutical Excipients from such bona fide third party, and this Agreement shall thereafter be terminable with respect to such Pharmaceutical Excipient at any time at Penford's election.