Common use of Procurement of Materials Clause in Contracts

Procurement of Materials. (a) Manufacturer shall order and maintain sufficient quantities of all Product Materials, including safety stock as required by the applicable Facility Addendum, to enable Manufacturer to manufacture and Deliver Product in accordance with its Delivery obligations under this Agreement and the applicable Facility Addendum. With respect to those Third Party suppliers of Product Materials used by Manufacturer or its Affiliates in the ordinary course in the manufacturing or supply of a given Product immediately prior to the Effective Date (“Manufacturer Third Party Suppliers”), Manufacturer shall be permitted to purchase solely the same Product Materials from such Manufacturer Third Party Suppliers in connection with its activities under this Agreement without first obtaining Customer’s prior written consent. Any other Third-Party supplier for Product Materials (or procurement of a different Product Material from any Third-Party supplier) must be approved in advance in writing by Customer (such approval not to be unreasonably withheld, conditioned or delayed). For the avoidance of doubt, as of the Effective Date, as between Manufacturer and Customer, Manufacturer will be solely responsible for maintaining and establishing relationships with the Third-Party suppliers of Product Materials. The costs of all such Product Materials shall be included in the Price of the applicable Product. (b) Unless otherwise set forth in the applicable Facility Addendum for a specific Product, Customer shall have no liability for excess or obsolete Product Materials purchased by Manufacturer, (x) except as set forth in Section 2.4(h) or Section 7.9 or (y) unless the excess or obsolescence is caused by a change to the specifications for such Product Materials or the Specifications of a given Product in accordance with this Agreement after such Product Materials have been purchased by Manufacturer based upon a Firm Order or accepted Purchase Order). (c) Customer understands and acknowledges that (i) certain Product Materials have a limited shelf-life, are long lead time items, and are subject to minimum order quantities specified by the applicable supplier and (ii) Manufacturer will rely on the Firm Orders and Forecasts to order Product Materials required to meet the Firm Orders (plus safety stock for certain Product Materials of a Product as reasonably determined by Manufacturer). In addition, Customer understands that, to ensure an orderly supply of the Product Materials, Manufacturer may elect to purchase the Product Materials in sufficient volumes to meet the production requirements for Products during part or all of the forecasted periods; provided, however, that Customer shall not have any liability with respect to any purchase by Manufacturer or any of its Affiliates of labeling or packaging materials (including labels, cartons and leaflets) in excess of the amount required to meet the Firm Order applicable at such time plus the amount of applicable Product forecasted to be ordered in months four (4) through six (6) of the Forecast applicable at such time. (d) Manufacturer must review with Customer any assessment made (or related action proposed to be taken) by Manufacturer related to rejection or destruction of any Customer-Supplied Materials, Buy-Sell Materials, Product, or Product Materials intended for Customer’s Product to discuss viability for commercial use.

Procurement of Materials. (a) Manufacturer shall order and maintain sufficient quantities of all Product Materials (except Customer-Supplied Materials, including safety stock as required by the applicable Facility Addendum, ) to enable Manufacturer to manufacture and Deliver deliver Product in accordance with its Delivery obligations under this Agreement and the applicable Facility Addendum. With respect to those Third Party suppliers of Product Materials used by Manufacturer or its Affiliates in the ordinary course in the manufacturing or supply of a given Product immediately prior to the Effective Date (“Manufacturer Third Party Suppliers”), Manufacturer shall be permitted to purchase solely the same Product Materials from such Manufacturer Third Party Suppliers in connection with its activities under this Agreement without first obtaining Customer’s prior written consent. Any other Third-Party supplier for Product Materials (or procurement of a different Product Material from any Third-Party supplier) must be approved in advance in writing by Customer (such approval not to be unreasonably withheld, conditioned or delayed). For the avoidance of doubt, as of the Effective Date, as between Manufacturer and Customer, Manufacturer will be solely responsible for maintaining and establishing relationships with the Third-Party suppliers of Product MaterialsForecasts. The costs of all such Product Materials shall be included in the Price of for the applicable Product. (b) Unless otherwise set forth Product as provided in Section 3.1. Without limiting the applicable Facility Addendum for a specific Productforegoing, Customer shall have no liability be solely responsible for all costs and expenses relating to designing and changing any artwork used in connection with the Product and its packaging, and any changes to such artwork shall be conducted in accordance with the processes used as of the Effective Date for changing such artwork. Customer shall be liable for excess or obsolete Product Materials (including Customer-Supplied Materials) purchased by Manufacturer, (x) except as set forth in Section 2.4(h) or Section 7.9 or (y) unless Manufacturer to the extent the excess or obsolescence is caused by any: (i) change to, or cancellation of, a firm Purchase Order, (ii) Forecast variations (or, for clarity, any variation between a Forecast hereunder and a forecast applicable to the relevant Products prior to the Effective Date), (iii) without limiting Section 4.3, change to the Specifications or the specifications for of such Product Materials or the Specifications of a given Product in accordance with this Agreement after such Product Materials have been purchased by Manufacturer based upon a Firm Customer firm Purchase Order or accepted a Forecast quantity with respect to the binding portion of such Forecast, as applicable, or (iv) without limiting Section 2.4(a)(iii), with respect to any VMR Product, reduction in the quantity of such Product as specified in a VMR Forecast relative to the quantity of such Product that was specified in any previous VMR Forecast with respect to the same time period. In addition, Customer shall be liable for excess or obsolete Product Materials (including Customer-Supplied Materials) owned by Manufacturer prior to the applicable Product Addendum Effective Date. Customer shall reimburse Manufacturer for such excess or obsolescence described in this Section 2.6(a) on a quarterly basis within sixty (60) days following receipt of Manufacturer’s invoice therefor. (b) Without limiting the foregoing, at the end of the Term of each Product Addendum, Customer will purchase at cost any excess inventory of Product Materials, including any unique materials used to support production for Customer, and any works in process related to Products, in each case in accordance with Section 11.5(b), and any long lead time items (as specified in a Product Addendum) previously procured by Manufacturer (regardless of whether so procured in order to fulfill obligations under an existing Purchase Order). (c) Customer understands The Parties agree that Manufacturer is responsible for, and acknowledges that (i) certain shall administer, the procurement of such Product Materials have a limited shelf-life, are long lead time items, and are subject to minimum order quantities specified by the applicable supplier and (ii) Manufacturer will rely on the Firm Orders and Forecasts to order Product Materials required to meet the Firm Orders (plus safety stock for certain Product Materials of a Product as reasonably determined by Manufacturer). In addition, Customer understands that, to ensure an orderly supply of the Product Materials, Manufacturer may elect to purchase the Product Materials in sufficient volumes to meet the production requirements for Products during part or all of the forecasted periods; provided, however, that Customer shall not have any liability with respect to any purchase by Manufacturer or any of its Affiliates of labeling or packaging materials (including labels, cartons and leaflets) in excess of the amount required to meet the Firm Order applicable at such time plus the amount of applicable Product forecasted to be ordered in months four (4) through six (6) of the Forecast applicable at such time. (d) Manufacturer must review with Customer any assessment made (or related action proposed to be taken) by Manufacturer related to rejection or destruction of any except Customer-Supplied Materials) in accordance with the terms herein, Buy-Sell which responsibilities shall include: transporting, inspecting and storing the Product Materials; maintaining systems for material management; maintaining adequate supplies of Product Materials, Productto the extent required hereunder; and supplier and logistics management, in each case in accordance with the terms herein. If there is a failure to supply issue with a supplier as a result of a Force Majeure Event or a supplier selected by Customer fails to deliver the appropriate quantity and quality of Product Materials intended for Customer’s Product multiple times within the span of four consecutive orders, without limiting Section 16.5, Manufacturer shall so notify Customer in writing of such supply issue and if Customer concurs that such supplier is continuously failing to discuss viability for commercial usefulfill its obligations to Manufacturer, and unless Manufacturer requests otherwise, Customer shall, to the extent practicable, attempt to have a discussion with such supplier in an effort to resolve the issue. Customer shall have no obligations to continue discussions with such supplier following the initial discussion or after such offer of an initial discussion, if such supplier refused such discussion.

Procurement of Materials. (a) Manufacturer LONZA shall order and maintain sufficient quantities be responsible for the procurement of all Product raw materials and supplies (other than CLIENT Production Materials, including safety stock as required by ) necessary for the applicable Facility Addendum, to enable Manufacturer to conduct of the Process or otherwise the manufacture and Deliver supply of Product (“Materials”) in accordance with requested estimated dates set forth in the Purchase Orders. In the event of a delay in receiving Materials that may result in a delay in manufacturing or supplying Product, LONZA shall provide prompt (and in any event within [***]) notice to CLIENT and any Shortage of Supply shall be addressed as set forth in Section 5.5. Materials shall be obtained from Third Parties in accordance with the Sourcing Plan. To the extent consistent with the Sourcing Plan, LONZA may procure such Materials under its Delivery obligations under this Agreement existing arrangements (including pricing) with its Affiliates and the applicable Facility Addendum. With respect to those its existing Third Party suppliers of Product for such Materials used by Manufacturer or its Affiliates in the ordinary course in the manufacturing or supply of a given Product immediately prior to the Effective Date (“Manufacturer Third Party Suppliers”), Manufacturer shall be permitted to purchase solely the same Product Materials from such Manufacturer Third Party Suppliers in connection with its activities under this Agreement without first obtaining Customer’s prior written consent. Any other Third-Party supplier for Product Materials (or procurement of a different Product Material from any Third-Party supplier) must be approved in advance in writing by Customer (such approval not to be unreasonably withheld, conditioned or delayed). For the avoidance of doubt, as of the Effective Date, as between Manufacturer and Customer, Manufacturer will be solely responsible for maintaining and establishing relationships with the Third-LONZA may procure such Materials from its Affiliates or Third Party suppliers upon prior written consent from CLIENT, which consent shall not be unreasonably withheld or delayed. LONZA will use Reasonable Commercial Efforts to secure discounts from such Third Party suppliers based on the amount of Product Materials. The costs raw materials required to satisfy Forecasts and shall pass through the benefit of all such Product discounts to CLIENT. If LONZA’s negligence or willful misconduct results in the wastage of any Materials or CLIENT Production Materials, LONZA will reimburse CLIENT for the costs and expenses of such Materials or CLIENT Production Materials in excess of [***] per event resulting in such wastage of any Materials or CLIENT Production Materials. All Materials shall be included in comply with the Price of specifications applicable thereto as mutually agreed upon by the applicable Product. (b) Unless otherwise set forth in the applicable Facility Addendum for a specific Product, Customer shall have no liability for excess or obsolete Product Materials purchased by Manufacturer, (x) except Parties and as set forth in Section 2.4(h) current Batch Records or Section 7.9 or other appropriate documentation (y) unless provided that such specifications may only be amended upon CLIENT’s prior written approval). LONZA shall comply with the excess or obsolescence is caused by a change Quality Agreement and all Applicable Laws pertaining to the specifications procurement of Materials, including any testing or documentation required. Upon CLIENT’s request, LONZA shall use Reasonable Commercial Efforts to request any supplier of Materials to execute a reasonable confidentiality agreement with LONZA and CLIENT, no less stringent in scope than the confidentiality obligations set forth herein, and for a reasonable and customary time period (which in no event shall be less than [***] from the disclosure of any Confidential Information to such Product Materials or the Specifications of a given Product in accordance with this Agreement after such Product Materials have been purchased by Manufacturer based upon a Firm Order or accepted Purchase Ordersupplier). (c) Customer understands and acknowledges that (i) certain Product Materials have a limited shelf-life, are long lead time items, and are subject to minimum order quantities specified by the applicable supplier and (ii) Manufacturer will rely on the Firm Orders and Forecasts to order Product Materials required to meet the Firm Orders (plus safety stock for certain Product Materials of a Product as reasonably determined by Manufacturer). In addition, Customer understands that, to ensure an orderly supply of the Product Materials, Manufacturer may elect to purchase the Product Materials in sufficient volumes to meet the production requirements for Products during part or all of the forecasted periods; provided, however, that Customer shall not have any liability with respect to any purchase by Manufacturer or any of its Affiliates of labeling or packaging materials (including labels, cartons and leaflets) in excess of the amount required to meet the Firm Order applicable at such time plus the amount of applicable Product forecasted to be ordered in months four (4) through six (6) of the Forecast applicable at such time. (d) Manufacturer must review with Customer any assessment made (or related action proposed to be taken) by Manufacturer related to rejection or destruction of any Customer-Supplied Materials, Buy-Sell Materials, Product, or Product Materials intended for Customer’s Product to discuss viability for commercial use.