Common use of Supply Failure Clause in Contracts

Supply Failure. (a) Subject to the provisions of the Commercial Supply Agreement, if during the term of the Commercial Supply Agreement, Clearside fails to supply REGENXBIO with at least [***] of the quantities of Clearside Devices that Clearside is obligated to supply (provided such quantities do not exceed REGENXBIO’s most recent forecast) on at least [***] occasions in any consecutive [***] period for any reason other than due to the material breach by REGENXBIO of the Commercial Supply Agreement (a “Supply Failure”), REGENXBIO may, Certain information has been excluded from this agreement (indicated by “[***]”) because such information (i) is not material and (ii) would be competitively harmful if publicly disclosed. 20 at its sole discretion, upon not less than [***] written notice to Clearside (a “Supply Failure Notice”): (i) require Clearside to supply the undelivered Clearside Devices at a future date to be agreed upon by the Parties; and/or (ii) elect to have one or more Third Parties identified by REGENXBIO Manufacture Clearside Devices (an “Alternative Manufacturer Election”), in which case REGENXBIO will require its Third Party Manufacturer to only Manufacture and sell such Clearside Devices for REGENXBIO’s and its Affiliates’ and Sublicensees’ Exploitation in connection with Covered Product within the scope of the Commercial License. (b) Upon the occurrence of a Supply Failure and an Alternative Manufacturer Election: (i) REGENXBIO (or its designated Third Party manufacturer) will have the right to Manufacture Clearside Devices within the scope of the license under Section 3.1, and (ii) Clearside shall transfer the Clearside Manufacturing technology to REGENXBIO and any Third Party Manufacturers identified by REGENXBIO as specified in the following sentence. Clearside shall promptly (x) disclose to REGENXBIO and any such Third Party Manufacturer all Clearside Manufacturing Know-How; (y) provide REGENXBIO or any such Third Party Manufacturer with the training, documentation and other information Controlled by Clearside and relating to the use of the Manufacturing process as may be necessary for REGENXBIO and such Third Party Manufacturers to Manufacture Clearside Devices; and (z) make appropriately trained personnel available for consultation and advice upon REGENXBIO’s reasonable request and expense to the extent reasonably necessary to provide technical assistance necessary to enable REGENXBIO or such Third Party Manufacturers to Manufacture Clearside Devices.

Supply Failure. (ai) Subject to the provisions of the Commercial Supply Agreement, if if, during the term of the Commercial Supply Agreement, Clearside fails to supply REGENXBIO BioCryst with Clearside Devices that meet the Clearside Device Specifications and that are not otherwise damaged or defective, in quantities that are at least [***] percent ([***]%) of the quantities of Clearside Devices that Clearside is obligated to supply (provided such quantities do not exceed REGENXBIO’s most recent forecast) [***], on at least [***] ([***]) occasions in any consecutive [***] period ([***]) month period, for any reason other than due to the material breach by REGENXBIO BioCryst of the Commercial Supply this Agreement (a “Supply Failure”), REGENXBIO BioCryst may, Certain information has been excluded from this agreement (indicated by “[***]”) because such information (i) is not material and (ii) would be competitively harmful if publicly disclosed. 20 at its sole discretion, upon not less than [***] ([***]) days written notice to Clearside (a “Supply Failure Notice”): (iA) require Clearside to supply the undelivered Clearside Devices at a future date to be agreed upon by the Parties; and/or or (iiB) elect to have one or more Third Parties identified by REGENXBIO BioCryst (each, a “Third Party Manufacturer”) Manufacture Clearside Devices (an “Alternative Manufacturer Election”), in which case REGENXBIO BioCryst will require its Third Party Manufacturer Manufacturer(s) to only Manufacture and sell such Clearside Devices for REGENXBIOBioCryst’s and its Affiliates’ ’, Distributors’, and Sublicensees’ Exploitation in connection with the Covered Product within the scope of the Commercial Licenselicenses set forth in Section 2.1 (License Grant). (bii) Upon the occurrence of a Supply Failure and an Alternative Manufacturer ElectionElection and at Clearside’s expense: (iA) REGENXBIO BioCryst (or its designated Third Party manufacturerManufacturer(s)) will have the right to Manufacture Clearside Devices within the scope of the license under Section 3.12.1 (License Grant), and (iiB) Clearside shall transfer the Clearside Manufacturing technology Know-How to REGENXBIO BioCryst and any Third Party Manufacturers identified by REGENXBIO BioCryst as specified in the following sentence. Clearside shall promptly (x) disclose to REGENXBIO BioCryst and any such Third Party Manufacturer all Clearside Manufacturing Know-How; (y) provide REGENXBIO BioCryst or any such Third Party Manufacturer with the training, documentation and other information Controlled by Clearside and relating to the use of the Manufacturing process as may be necessary for REGENXBIO BioCryst and such Third Party Manufacturers to Manufacture Clearside Devices; and (z) make appropriately trained personnel available for consultation and advice upon REGENXBIOBioCryst’s reasonable request and expense to the extent reasonably necessary to provide technical assistance necessary to enable REGENXBIO BioCryst or such Third Party Manufacturers to Manufacture Clearside Devices.

Supply Failure. (a) Subject If a Party reasonably believes that there is a reasonable risk of a Supply Failure, then such Party shall provide written notice thereof to the provisions other Party and the Parties shall discuss in good faith potential remedies or failure mitigation strategies. (b) In the event of a Supply Failure, Verrica shall promptly investigate the cause of the Commercial Supply Failure and the Parties shall discuss in good faith potential remedies or failure mitigation strategies, including potentially qualifying a second source of supply. Verrica shall use Commercially Reasonable Efforts to remedy such Supply Failure. In the case where Licensee is entitled to select or designate a new Third Party CMO pursuant to this Section 7.8, promptly upon Licensee’s request, Verrica shall use Commercially Reasonable Efforts to introduce to Licensee one or more other Third Party CMOs that are, in the reasonable opinion of Verrica, suitable to manufacture the Product or component that was the subject of the applicable Supply Failure. (c) In the event of a Supply Failure as set forth in Section 1.141(a): (i) with respect to Product or a component thereof (excluding the Proprietary Applicator/Breaking Tool Components), Licensee may select and engage one or more other Third Party CMOs to manufacture such Product or component that was the subject of such Supply Failure for clinical and commercial use in the Field in the Territory, and the Parties shall coordinate the logistics of initiation and completion of a technology transfer of the process and technology that is then-used to manufacture the Product or component thereof (excluding the Proprietary Applicator/Breaking Tool Components); and (ii) with respect to the Proprietary Applicator/Breaking Tool Components, Licensee may designate a CMO and, subject to Verrica’s approval of such CMO to be given in Verrica’s reasonable discretion, the Parties shall enter into one joint agreement or two separate agreements with such CMO that (1) permit Licensee to place orders directly with such CMO, (2) permit Verrica to retain ownership and control over the manufacturing process for the Proprietary Applicator/Breaking Tool Components to the extent permitted by Applicable Laws, and (3) contain such other terms and conditions to be reasonably agreed by the Parties. Promptly following the Parties’ execution of such agreement or agreements with such CMO, Verrica shall conduct a manufacturing technology transfer with respect to the applicable Proprietary Applicator/Breaking Tool Components to such CMO. (d) In the event of a Supply Failure as set forth in Section 1.141(b)(i): (i) with respect to Product or a component thereof (excluding the Proprietary Applicator/Breaking Tool Components), at Licensee’s election: (1) Licensee may select and engage one or more other Third Party CMOs to manufacture such Product or component (excluding the Proprietary Applicator/Breaking Tool Components) that was the subject of such Supply Failure for clinical and commercial use in the Field in the Territory, and subject to the terms of applicable CMO Agreement, if during the term Parties shall coordinate the logistics of initiation and completion of a technology transfer of the Commercial process and technology that is then-used to manufacture the Product or component thereof (excluding the Proprietary Applicator/Breaking Tool Components); or (2) Licensee may enter into its own agreement directly with Verrica’s CMO for supply of the Product or component thereof (excluding the Proprietary Applicator/Breaking Tool Components) for use in the Field in the Territory, and Verrica shall use Commercially Reasonable Efforts to assist Licensee to enter into its own agreement directly with the CMO on substantially the same terms as the relevant CMO Agreement; and (ii) with respect to Proprietary Applicator/Breaking Tool Components, Verrica shall select and engage one or more other CMOs that is reasonably acceptable to Licensee to manufacture the Proprietary Applicator/Breaking Tool Components to ensure a stable supply to Licensee in the Field in the Territory. (e) In the event of a Supply Failure as set forth in Section 1.141(b)(ii): (i) with respect to Product or a component thereof (excluding the Proprietary Applicator/Breaking Tool Components), at Licensee’s election: (1) Licensee may select and engage one or more other Third Party CMOs to manufacture such Product or component (excluding the Proprietary Applicator/Breaking Tool Components) that was the subject of such Supply Failure for clinical and commercial use in the Field in the Territory, and subject to the terms of applicable CMO Agreement, Clearside fails the Parties shall coordinate the logistics of initiation and completion of a technology transfer of the process and technology that is then-used to manufacture the Product or component thereof (excluding the Proprietary Applicator/Breaking Tool Components); or (2) Licensee may directly communicate with Verrica’s CMO under Verrica’s agreement or enter into its own agreement directly with Verrica’s CMO for supply REGENXBIO of the Product or component thereof (excluding the Proprietary Applicator/Breaking Tool Components) for use in the Field in the Territory, and Verrica shall use Commercially Reasonable Efforts to assist Licensee to directly communicate with a CMO under Verrica’s agreement or to enter into its own agreement directly with a CMO on substantially the same terms as the relevant CMO Agreement; and (ii) with respect to Proprietary Applicator/Breaking Tool Components, at least Licensee’s election: (1) Licensee may directly communicate with Verrica’s CMO for supply of the Proprietary Applicator/Breaking Tool Components for use in the Field in the Territory under Verrica’s agreement with such Verrica’s CMO; or (2) Licensee may designate a CMO and, subject to Verrica’s approval of such CMO to be given in Verrica’s reasonable discretion, the Parties shall enter into one joint agreement or two separate agreements with such CMO that (x) permit Licensee to place orders directly with such CMO, (y) permit Verrica to retain ownership and control over the manufacturing process for the Proprietary Applicator/Breaking Tool Components to the extent permitted by Applicable Laws, and (z) contain such other terms and conditions to be reasonably agreed by the Parties. Promptly following the Parties’ execution of such agreement or agreements with such CMO, Verrica shall conduct a manufacturing technology transfer with respect to the applicable Proprietary Applicator/Breaking Tool Components to such CMO. (f) In the event of a Supply Failure, if Licensee directly engages a new CMO or Verrica’s CMO pursuant to Sections 7.8(c) to 7.8(e), Licensee may deduct any external costs and expenses incurred in connection with such direct engagement from the Transfer Price payment due to Verrica (which, for clarity, shall be calculated as if Verrica had supplied Licensee directly), including any payments made by Licensee to the applicable CMO and all shipping costs (including import tax and duties), but excluding any costs and expenses in connection with any necessary Product Filing for Products in the Territory in respect of the direct engagement, which shall be included in the costs and expenses in connection with the manufacturing technology transfer under Section 7.8(g). (g) With respect to any manufacturing technology transfer that was initiated as a result of a Supply Failure described in Section 1.141 (a) or Section1.141 (b)(ii), Verrica shall bear all the actual internal and external costs and expenses incurred in connection with the manufacturing technology transfer and shall reimburse Licensee for Licensee’s actual internal and external costs and expenses in connection with the completing the manufacturing technology transfer (including all the internal and external costs and expenses incurred by Licensee in connection with any necessary Product Filing for Products in the Territory in respect of the change of CMO or the direct engagement between Licensee and CMO). With respect to any manufacturing technology transfer that was initiated as a result of a Supply Failure described in Section 1.141 (b)(i), the external costs and expenses incurred in connection with the manufacturing technology transfer (including all the external costs and expenses incurred by Licensee in connection with any necessary Product Filing for Products in the Territory in respect of the change of CMO or the direct engagement between Licensee and CMO) will be born [***] of the quantities of Clearside Devices that Clearside is obligated to supply (provided such quantities do not exceed REGENXBIO’s most recent forecast) on at least by Verrica and [***] occasions by Licensee; provided, however, that if (i) Licensee selects and engages a new CMO pursuant to Section 7.8(d)(i)(1) and (ii) Verrica does not purchase the Products or the applicable components from such new CMO in any consecutive order for Verrica to use, import, market, distribute, offer for sale or sell the Products or such components in the Verrica Territory, the Parties shall [***] period for any reason other than due such external costs and expenses. Verrica shall cooperate, and shall cause its CMOs to the material breach by REGENXBIO of the Commercial Supply Agreement (a “Supply Failure”)cooperate, REGENXBIO may, Certain information has been excluded from this agreement (indicated by “[***]”) because such information (i) is not material and (ii) would be competitively harmful if publicly disclosed. 20 at its sole discretion, upon not less than [***] written notice to Clearside (a “Supply Failure Notice”): (i) require Clearside to supply the undelivered Clearside Devices at a future date to be agreed upon by the Parties; and/or (ii) elect to have one or more Third Parties identified by REGENXBIO Manufacture Clearside Devices (an “Alternative Manufacturer Election”), with Licensee in which case REGENXBIO will require its Third Party Manufacturer to only Manufacture and sell such Clearside Devices for REGENXBIO’s and its Affiliates’ and Sublicensees’ Exploitation filing necessary Product Filings in connection with Covered Product within the scope change of the Commercial Licensemanufacturing facility at Verrica’s cost and expenses. (b) Upon the occurrence of a Supply Failure and an Alternative Manufacturer Election: (i) REGENXBIO (or its designated Third Party manufacturer) will have the right to Manufacture Clearside Devices within the scope of the license under Section 3.1, and (ii) Clearside shall transfer the Clearside Manufacturing technology to REGENXBIO and any Third Party Manufacturers identified by REGENXBIO as specified in the following sentence. Clearside shall promptly (x) disclose to REGENXBIO and any such Third Party Manufacturer all Clearside Manufacturing Know-How; (y) provide REGENXBIO or any such Third Party Manufacturer with the training, documentation and other information Controlled by Clearside and relating to the use of the Manufacturing process as may be necessary for REGENXBIO and such Third Party Manufacturers to Manufacture Clearside Devices; and (z) make appropriately trained personnel available for consultation and advice upon REGENXBIO’s reasonable request and expense to the extent reasonably necessary to provide technical assistance necessary to enable REGENXBIO or such Third Party Manufacturers to Manufacture Clearside Devices.