Common use of Failure to Supply Clause in Contracts

Failure to Supply. (a) A Failure to Supply shall have occurred under this Agreement under any of the following circumstances (a“Failure to Supply”): (i) Patheon fails to deliver a shipment of Product by the Delivery Date, and fails to replace such Product shipment within [**]) days after the scheduled Delivery Date; or (ii) Patheon fails to ship the complete number of ordered Batches by the Delivery Date, and Patheon fails to ship the remaining Batches within [**] days after the scheduled Delivery Date, and such failure occurs (A) with respect to Product shipments over [**] consecutive calendar quarters during any Year, or (B) with respect to [**] or more Product shipments in any Year; or (iii) Product delivered to Penwest or to a Penwest customer is determined to be defective for a reason set forth in the first Sentence of Section 6.3(a), and there are [**] or more such deliveries of defective Product in any one Year. (b) If a Failure to Supply occurs, then Penwest or its Affiliates, itself or on behalf of its licensees or customers, may at its election, (i) require Patheon to qualify, as soon as reasonably practicable and at Patheon’s cost, a second Patheon facility to manufacture and supply Product to Penwest hereunder, it being understood that Penwest shall have the right to approve such second Patheon facility, such approval not to be unreasonably withheld or delayed; and/or (ii) retain a Third Party to manufacture and supply the requirements of Penwest and its Affiliates’, licensees’ and customers’ requirements for Product. (c) Except as set forth in this Agreement, Patheon will not be liable to Penwest nor have any responsibility to Penwest for any deficiencies in, or other liabilities associated with, any Product manufactured by it (collectively, “Product Claims”). For greater certainty, Patheon will have no obligation for any Product Claims to the extent the Product Claim (i) is caused by deficiencies in the Specifications as provided to Patheon by Penwest, the safety, efficacy, or marketability of the Products or any distribution thereof; provided that the Product was manufactured in accordance with the Manufacturing Process, the Specifications, cGMPs and applicable Laws, and conformed to the Specifications at the time of shipment; (ii) results from a defect in a Component that is not reasonably discoverable by Patheon using the test methods set forth in the Specifications, (iii) results from Components supplied by Penwest that is not reasonably discoverable by Patheon using the test methods set forth in the Specifications, (iv) is caused by actions of Third Parties occurring after the Product is shipped by Patheon under Section 5.3, (v) is due to packaging design or labelling defects or omissions for which Patheon has no responsibility; provided that the Product was manufactured in accordance with the Manufacturing Process, the Specifications, cGMPs and applicable Laws, and conformed to the Specifications at the time of shipment, (vi) is due to any unascertainable reason despite Patheon having performed the Manufacturing Services in accordance with the Specifications, cGMP’s, the Manufacturing Process and applicable Laws and despite the Product having met the Specifications at the time of shipment, or (vii) is due to a breach by Penwest of its obligations under this Agreement.

Failure to Supply. ELITE shall notify LANNETT as promptly as possible, but in no event later than five (a5) A Failure Business Days, after ELITE discovers that it will not be able to Supply shall have occurred under this Agreement under any supply the quantity of Products ordered by the following circumstances (a“Failure to Supply”): delivery date specified in a Purchase Order. In such event: (i) Patheon fails ELITE shall cooperate with LANNETT in taking all actions that ▇▇▇▇▇▇▇ ▇▇▇▇▇ reasonably necessary in order to deliver a shipment of Product by the Delivery Dateremedy such inability to supply, at ELITE’s expense; and fails to replace such Product shipment within [**]) days after the scheduled Delivery Date; or (ii) Patheon fails If ELITE’s inability to ship supply continues past twenty (20) days from the complete number of ordered Batches by the Delivery Date, and Patheon fails to ship the remaining Batches within [**] days after the scheduled Delivery Date, and such failure occurs (A) with respect to Product shipments over [**] consecutive calendar quarters during any Year, or (B) with respect to [**] or more Product shipments in any Year; or (iii) Product delivered to Penwest or to a Penwest customer is determined to be defective for a reason required delivery date set forth in the first Sentence of Section 6.3(a)Purchase Order at LANNETT’s election, any or all outstanding Purchase Orders relating to such Product may be cancelled and there are [**] or more LANNETT shall have no obligations with respect to such deliveries of defective Product in Purchase Orders; provided, however, ELITE must cover any one Year. (b) If a Failure to Supply occurs, then Penwest or its Affiliates, itself or on behalf of its licensees or customers, may at its election, (ias defined below) require Patheon to qualify, as soon as reasonably practicable and at Patheon’s cost, a second Patheon facility to manufacture and supply Product to Penwest hereunder, it being understood that Penwest shall have the right to approve such second Patheon facility, such approval not to be unreasonably withheld or delayed; and/or (ii) retain a Third Party to manufacture and supply the requirements of Penwest and its Affiliates’, licensees’ and customers’ requirements for Product. (c) Except as obligations set forth in this Section. Compliance by ELITE with this Article 4.4 shall not relieve ELITE of any other obligation or liability under this Agreement. LANNETT shall otherwise retain all of its rights under this Agreement and/or at law against ELITE for its failure to deliver all or any portion of the quantity of Products ordered by LANNETT. With regards to a Binding Forecast or if ELITE accepted a Purchase Order from LANNETT, pursuant to the procedures defined in Section 4.2 of this Agreement, Patheon will not then ELITE shall be liable to Penwest nor have responsible for the late charges and any responsibility to Penwest for penalties assessed against LANNETT by its Customers or any deficiencies inother third party or any costs, fees, charges, or other liabilities associated with, any Product manufactured penalties incurred by it Lannett (collectively, “Product ClaimsFailure to Supply”). For greater certainty, Patheon will have no obligation for any Product Claims unless the delay is attributable to the extent the Product Claim (i) is caused action or controls imposed by deficiencies in the Specifications as provided to Patheon by PenwestDEA that do not result from ELITE’s negligence, the safety, efficacy, gross negligence or marketability of the Products willful misconduct; or any distribution thereof; provided that the Product was manufactured in accordance with the Manufacturing Process, the Specifications, cGMPs and applicable Laws, and conformed to the Specifications at the time of shipment; (ii) results from a defect in a Component demonstrable raw material shortages that is not reasonably discoverable are beyond ELITE’s control, but ELITE will use commercially reasonable efforts to keep three (3) to six (6) months of raw materials inventory on hand at all times. Late charges and any penalties assessed against ELITE by Patheon using the test methods set forth in the Specifications, (iii) results from Components supplied by Penwest that is not reasonably discoverable by Patheon using the test methods set forth in the Specifications, (iv) is caused by actions of Third Parties occurring after the Product is shipped by Patheon under Section 5.3, (v) is due to packaging design or labelling defects or omissions for which Patheon has no responsibility; provided that the Product was manufactured in accordance with the Manufacturing Process, the Specifications, cGMPs and applicable Laws, and conformed to the Specifications at the time of shipment, (vi) is due to any unascertainable reason despite Patheon having performed the Manufacturing Services in accordance with the Specifications, cGMP’s, the Manufacturing Process and applicable Laws and despite the Product having met the Specifications at the time of shipment, or (vii) is due to a breach by Penwest of its obligations LANNETT under this Agreementparagraph are due and payable within thirty (30) days of being invoiced by LANNETT and, if not timely paid, may be deducted against amounts owed by LANNETT to ELITE.

Failure to Supply. In the event that HydroMed or its Affiliates are unable to supply the Product in specified quality or in quantities sufficient to meet forecast demand for a cumulative period of ninety (a90) A Business Days in any twelve (12) month period ("Supply Failure Period"), then Paladin may elect in its sole and absolute discretion to Supply shall have occurred under this Agreement under any of the following circumstances (a“Failure either: 7.3.1. as its sole and exclusive remedy, receive liquidated damages in an amount equal to Supply”): (i) Patheon fails to deliver a shipment the Net Sales that Paladin would have generated from the last day of Product by the Delivery Date, and fails to replace such Product shipment within [**]Supply Failure Period until the date that is twelve (12) days after the scheduled Delivery Date; or months later less (ii) Patheon fails to ship the complete product of the Transfer Fee multiplied by the aggregate number of ordered Batches by units of the Delivery Date, and Patheon fails to ship the remaining Batches within [**] days after the scheduled Delivery Date, and such failure occurs (A) with respect to Product shipments over [**] consecutive calendar quarters during any Year, or (B) with respect to [**] or more Product shipments in any Year; or (iii) Product delivered to Penwest or to a Penwest customer is determined forecasted to be defective for a reason ordered during such twelve (12) month period (as set forth in the first Sentence of most recent Forecast provided pursuant to Section 6.3(a8.3), provided that (a) if Paladin elects to receive liquidated damages under this Section 7.3.1, then HydroMed shall be relieved of its obligations under Article 7 and there are [**] or more Article 8 to manufacture and supply Paladin with Product (both in respect of any unsatisfied Purchase Orders and any new Purchase Orders that Paladin may place with HydroMed) until such deliveries time as HydroMed notifies Paladin that it is able to resume supply of defective the Product in any one Year.under the terms of this Agreement, except that if HydroMed does not give such notice within twelve (12) months after the last day of the Supply Failure Period, this Agreement shall automatically terminate; and (b) If a Failure if HydroMed's inability to Supply occurssupply is caused by an Event of Force Majeure, then Penwest or its Affiliates, itself or on behalf of its licensees or customers, may at its election, (i) require Patheon the option provided by this Section 7.3.1 shall not be available to qualify, as soon as reasonably practicable and at Patheon’s cost, a second Patheon facility to manufacture and supply Product to Penwest hereunder, it being understood that Penwest shall Paladin; or 7.3.2. have the right to approve such second Patheon facility, such approval not to be unreasonably withheld or delayed; and/or (ii) retain Product made by a Third Party to manufacture manufacturer designated by HydroMed and supply the requirements of Penwest and its Affiliates’approved by Paladin, licensees’ and customers’ requirements for Product. (c) Except as set forth in this Agreement, Patheon will which approval shall not be liable unreasonably withheld, conditioned, denied or delayed. If Paladin makes such an election, HydroMed shall grant the Third Party manufacturer a non-exclusive, royalty-free license under the Intellectual Property for the sole purpose of manufacturing and selling to Penwest nor have any responsibility to Penwest for any deficiencies in, or other liabilities associated with, any Product manufactured by it (collectively, “Product Claims”). For greater certainty, Patheon will have no obligation for any Product Claims to Paladin the extent quantity of the Product Claim (i) that HydroMed is caused by deficiencies in the Specifications as provided unable to Patheon by Penwest, the safety, efficacy, or marketability of the Products or any distribution thereof; provided that the Product was manufactured in accordance with the Manufacturing Process, the Specifications, cGMPs and applicable Laws, and conformed to the Specifications at the time of shipment; (ii) results from a defect in a Component that is not reasonably discoverable by Patheon using the test methods set forth in the Specifications, (iii) results from Components supplied by Penwest that is not reasonably discoverable by Patheon using the test methods set forth in the Specifications, (iv) is caused by actions of Third Parties occurring after the Product is shipped by Patheon under Section 5.3, (v) is due to packaging design or labelling defects or omissions for which Patheon has no responsibility; provided that the Product was manufactured in accordance with the Manufacturing Process, the Specifications, cGMPs and applicable Laws, and conformed to the Specifications at the time of shipment, (vi) is due to any unascertainable reason despite Patheon having performed the Manufacturing Services in accordance with the Specifications, cGMP’s, the Manufacturing Process and applicable Laws and despite the Product having met the Specifications at the time of shipment, or (vii) is due to a breach by Penwest of its obligations under this Agreementsupply.

Failure to Supply. If, during any Contract Year, OSUR is unable for any reason (aother than Distributor’s failure to comply with Section 4.2 or 4.5(b)) A Failure to Supply supply at least *** in accordance with the terms and conditions of this Agreement, ordered by binding Purchase Orders in compliance with the terms of Section 4.5 (which quantity shall have occurred under this Agreement under not include excess quantities contemplated by Section 4.5(a)(iv)) for delivery in any of the following circumstances (a“Failure to Supply”): (i) Patheon fails to deliver a shipment of Product by the Delivery Datecalendar quarter, and fails to replace such Product shipment within [**]failure continues for at least ninety (90) days after the scheduled Delivery Date; or delivery date set forth in such Purchase Order, then Distributor may elect to obtain a supply of a replacement product (iithe “Replacement Product”) Patheon fails from a third party (a “Third Party Supplier”) in an amount equal to ship the complete number quantity of ordered Batches by the Delivery Date, and Patheon fails Product OSUR is unable to ship the remaining Batches within [**] supply. Distributor shall notify OSUR in writing of its election no later than thirty (30) days after the scheduled Delivery Dateend of the ninety (90) day period specified above. If Distributor exercises its right under this Section 4.9, such action shall be Distributor’s sole and exclusive remedy in the event of a failure to supply OSUR. OSUR shall cooperate with Distributor in order to enable such failure occurs Third Party Supplier to supply Replacement Product as required under this Section 4.9; provided that any such Third Party Supplier executes a confidentiality agreement in form and substance reasonably satisfactory to OSUR in order to maintain the confidentiality of any proprietary information provided by OSUR to such Third Party Supplier. Nothing in this Section 4.9 shall require OSUR to transfer (Aby license or otherwise) with respect to Product shipments over [**] consecutive calendar quarters during any Year, or (B) with respect to [**] or more Product shipments in any Year; or (iii) Product delivered to Penwest or to a Penwest Third Party Supplier any patent or other intellectual property rights to the Product. During the period that a Third Party Supplier is manufacturing and supplying Replacement Product under this Section 4.9, OSUR agrees that it will not enforce any patent rights owned or licensed by OSUR against Distributor, the Third Party Supplier or any customer is determined of Distributor in respect of the manufacture, marketing, distribution or sale of the Replacement Product in accordance with this Agreement. If Distributor exercises its right to be defective for have a reason set forth in Third Party Supplier manufacture and supply a Replacement Product pursuant to this Section 4.9 and thereafter during the first Sentence of Section 6.3(aTerm OSUR desires to resume supplying Distributor with the Product (whether by OSUR, through another source or otherwise), and there are [**] or more then OSUR shall notify Distributor of such deliveries desire. Distributor shall then resume purchasing Product exclusively from OSUR for the remainder of defective Product in any one Year. (b) If a Failure to Supply occurs, then Penwest or its Affiliates, itself or on behalf the Term of its licensees or customers, may at its election, (i) require Patheon to qualify, this Agreement as soon as reasonably practicable and at PatheonOSUR demonstrates to Distributor’s costreasonable satisfaction that OSUR (whether by OSUR, another source or otherwise) is capable of reestablishing a second Patheon facility to manufacture and satisfactory supply Product to Penwest hereunder, of Product. Distributor agrees that it being understood that Penwest shall have the right to approve such second Patheon facility, such approval will not to be unreasonably withheld or delayed; and/or (ii) retain a enter into any contracts with Third Party to manufacture and supply the requirements of Penwest and its Affiliates’, licensees’ and customers’ requirements for Product. (c) Except as set forth in this Agreement, Patheon will not be liable to Penwest nor have any responsibility to Penwest for any deficiencies in, or other liabilities associated with, any Product manufactured by it (collectively, “Product Claims”). For greater certainty, Patheon will have no obligation for any Product Claims to the extent the Product Claim (i) is caused by deficiencies in the Specifications as provided to Patheon by Penwest, the safety, efficacy, or marketability of the Products or any distribution thereof; provided that the Product was manufactured Suppliers in accordance with this Section 4.9 under which the Manufacturing Process, Distributor cannot terminate its purchase commitments for Replacement Product within ninety (90) days in order to permit the Specifications, cGMPs and applicable Laws, and conformed to the Specifications at the time resumption of shipment; (ii) results from a defect in a Component that is not reasonably discoverable supply by Patheon using the test methods set forth in the Specifications, (iii) results from Components supplied by Penwest that is not reasonably discoverable by Patheon using the test methods set forth in the Specifications, (iv) is caused by actions of Third Parties occurring after the Product is shipped by Patheon under Section 5.3, (v) is due to packaging design or labelling defects or omissions for which Patheon has no responsibility; provided that the Product was manufactured OSUR in accordance with the Manufacturing Process, the Specifications, cGMPs and applicable Laws, and conformed to the Specifications at the time of shipment, (vi) is due to any unascertainable reason despite Patheon having performed the Manufacturing Services in accordance with the Specifications, cGMP’s, the Manufacturing Process and applicable Laws and despite the Product having met the Specifications at the time of shipment, or (vii) is due to a breach by Penwest of its obligations under this Agreementherewith.

Failure to Supply. (a) A Failure to Supply shall have occurred under During the Term of this Agreement under in which Plantex, for any of the following circumstances (a“Failure to Supply”): (i) Patheon reason, including, without limitation, force majeure as defined in Section 12 hereof, fails to deliver a shipment supply the requisite quantities of Product by the Delivery Date, and fails for which Plantex is obligated to replace such Product shipment supply pursuant to Section 3.1.1 within [**]) days *] after the scheduled Delivery Date; or date of delivery specified by TransOral in the applicable Purchase Order (accepted and confirmed in writing by Plantex to the extent required by Section 3.3.2), then TransOral may, as its sole remedy, cover such quantities under such Purchase Order through an alternate supplier(s). Any such cover purchases shall be credited against TransOral’s purchase requirements set forth in Sections 2.1 or 2.2, as applicable. In the event Plantex regains its ability to fully resume supplying Product in accordance with the terms hereunder, TransOral’s right to cover under this Article 4 shall terminate immediately upon the delivery by Plantex to TransOral of written notice thereof. Notwithstanding anything to the contrary herein, during the Term of this Agreement in which Plantex, for any reason, including, without limitation, force majeure as defined in Section 12 hereof or pursuant to Section 7.5, fails to ship to TransOral (i) on four (4) separate occasions the requisite quantities of Product in a particular [***] period or (ii) Patheon fails [***] of the requisite quantities of Product in any [***], in each case with respect to ship quantities of Product for which Plantex is obligated to supply pursuant to Purchase Orders submitted by TransOral pursuant to and in accordance with the complete number terms and conditions of ordered Batches by the Delivery Date, and Patheon fails to ship the remaining Batches this Agreement within [***] days after of the scheduled Delivery Datedates specified in such Purchase Orders in compliance with this Agreement, then such event shall be deemed a “Supply Failure.” In the event of a Supply Failure, TransOral’s obligations to purchase Product from Plantex (including TransOral’s purchase obligations under Sections 2.1, 2.2, 3.1, 3.2, and such failure occurs (A3.3 under this Agreement) with respect shall terminate and TransOral shall be free to purchase any amount of Product shipments over from any third party for any purpose without restriction. [**] consecutive calendar quarters during any Year, or (B) with respect to [**] or more Product shipments in any Year; or (iii) Product delivered to Penwest or to a Penwest customer is determined to be defective Confidential treatment has been requested for a reason set forth in the first Sentence portions of Section 6.3(a), this exhibit. These portions have been omitted from this exhibit and there are [**] or more such deliveries of defective Product in any one Year. (b) If a Failure to Supply occurs, then Penwest or its Affiliates, itself or on behalf of its licensees or customers, may at its election, (i) require Patheon to qualify, as soon as reasonably practicable and at Patheon’s cost, a second Patheon facility to manufacture and supply Product to Penwest hereunder, it being understood that Penwest shall have the right to approve such second Patheon facility, such approval not to be unreasonably withheld or delayed; and/or (ii) retain a Third Party to manufacture and supply the requirements of Penwest and its Affiliates’, licensees’ and customers’ requirements for Product. (c) Except as set forth in this Agreement, Patheon will not be liable to Penwest nor have any responsibility to Penwest for any deficiencies in, or other liabilities associated with, any Product manufactured by it (collectively, “Product Claims”). For greater certainty, Patheon will have no obligation for any Product Claims to the extent the Product Claim (i) is caused by deficiencies in the Specifications as provided to Patheon by Penwest, the safety, efficacy, or marketability of the Products or any distribution thereof; provided that the Product was manufactured in accordance been filed separately with the Manufacturing Process, the Specifications, cGMPs Securities and applicable Laws, and conformed to the Specifications at the time of shipment; (ii) results from a defect in a Component that is not reasonably discoverable by Patheon using the test methods set forth in the Specifications, (iii) results from Components supplied by Penwest that is not reasonably discoverable by Patheon using the test methods set forth in the Specifications, (iv) is caused by actions of Third Parties occurring after the Product is shipped by Patheon under Section 5.3, (v) is due to packaging design or labelling defects or omissions for which Patheon has no responsibility; provided that the Product was manufactured in accordance with the Manufacturing Process, the Specifications, cGMPs and applicable Laws, and conformed to the Specifications at the time of shipment, (vi) is due to any unascertainable reason despite Patheon having performed the Manufacturing Services in accordance with the Specifications, cGMP’s, the Manufacturing Process and applicable Laws and despite the Product having met the Specifications at the time of shipment, or (vii) is due to a breach by Penwest of its obligations under this AgreementExchange Commission.

Failure to Supply. During the Initial Term, 454 shall inform FHLR promptly of any problems with Third Party suppliers or problems of 454, in each case with respect to the manufacture or supply of Licensed Products. (a) A Failure In the event that 454 is unable, or notifies FHLR that it is unable, for any reason (including Force Majeure) to Supply shall have occurred under this Agreement under any supply quantities of the following circumstances Licensed Products pursuant to confirmed purchase orders in accordance with Section 3.5, 454 shall inform FHLR promptly. The Joint Steering Committee (a“Failure through the Operations Steering Committee if active) will develop a plan to Supply”): (iaddress the supply interruption. This may include discussing with supplier(s) Patheon fails the supply of the components of undelivered Licensed Products, arranging alternative sources of supply and/or providing FHLR rights to deliver a shipment manufacture components for sale in accordance with the terms of Product by the Delivery Date, and fails to replace such Product shipment within [**]) days after the scheduled Delivery Date; or (ii) Patheon fails to ship the complete number of ordered Batches by the Delivery Date, and Patheon fails to ship the remaining Batches within [**] days after the scheduled Delivery Date, and such failure occurs (A) with respect to Product shipments over [**] consecutive calendar quarters during any Year, or (B) with respect to [**] or more Product shipments in any Year; or (iii) Product delivered to Penwest or to a Penwest customer is determined to be defective for a reason set forth in the first Sentence of Section 6.3(a), and there are [**] or more such deliveries of defective Product in any one Yearthis Agreement. (b) If In the event that, during the Initial Term, 454 is unable, or notifies FHLR that it is unable, for any reason including Force Majeure, to supply a Failure minimum of [************] of the binding forecast quantities of Licensed Products to Supply occurs, then Penwest FHLR or its Affiliates, itself or on behalf of its licensees or customers, may at its election, (i) require Patheon to qualify, as soon as reasonably practicable and at Patheon’s cost, a second Patheon facility to manufacture and supply Product to Penwest hereunder, it being understood that Penwest shall have the right to approve such second Patheon facility, such approval not to be unreasonably withheld or delayed; and/or (ii) retain a Third Party to manufacture and supply the requirements of Penwest and its Affiliates’, licensees’ and customers’ requirements for Product. (c) Except Affiliates as set forth in this AgreementSection 3.5, Patheon will not for a total period of [**********], and the Joint Steering_Committee is, despite good faith efforts, unable to reasonably agree on a plan under Section 3.8(a) above to resolve the shortage, 454 shall upon written request of FHLR, grant FHLR or its Affiliates the right to manufacture or have manufactured such Licensed Products and with respect to Instruments and Disposables if in addition the Joint Steering Committee reasonably agrees that by so doing, FHLR or its Affiliates can eliminate the shortage sooner than 454 would be liable able to Penwest nor so do. In order to enable FHLR or its Affiliates to manufacture or have any responsibility to Penwest manufactured such Licensed Product for any deficiencies in, or other liabilities associated with, any Product manufactured by it (collectively, “Product Claims”). For greater certainty, Patheon will have no obligation for any Product Claims to the extent the Product Claim (i) is caused by deficiencies in the Specifications as provided to Patheon by Penwest, the safety, efficacy, or marketability of the Products or any distribution thereof; provided that the Product was manufactured sale in accordance with the Manufacturing Processterms of this Agreement, 454 herewith agrees to grant to FHLR and its Affiliates rights under all relevant patents, know-how, or design rights or any other intellectual property rights necessary for the Specifications, cGMPs and applicable Laws, and conformed to the Specifications at the time manufacturing of shipment; (ii) results from a defect in a Component that is not reasonably discoverable by Patheon using the test methods set forth such Licensed Products for use in the Specifications, (iii) results from Components supplied by Penwest that is not reasonably discoverable by Patheon using the test methods set forth in the Specifications, (iv) is caused by actions of Third Parties occurring after the Product is shipped by Patheon under Section 5.3, (v) is due Field and to packaging design provide FHLR or labelling defects its Affiliates all relevant information to enable FHLR or omissions its Affiliates to manufacture such Licensed Products for which Patheon has no responsibility; provided that the Product was manufactured sale in accordance with the Manufacturing Processterms of this Agreement. In the event FHLR or its Affiliates is forced to undertake its own production of such Licensed Products as provided herein, 454 shall furnish FHLR or its Affiliates with all manufacturing instructions (including but not limited to all QC methods, manufacturing environment, SOPs) and know-how necessary for such production and shall supply FHLR or its Affiliates with or give FHLR or its Affiliates access to its supplies or its suppliers of raw materials needed for production as well as materials used for controls. FHLR shall pay to 454 a royalty of [************************] with respect to all Licensed Products that are Reagent Kits made by FHLR or its Affiliates pursuant to this Section 3.8, until FHLR or its Affiliates is eligible to elect according to Section 5.1 (c) to manufacture at its own facilities all Licensed Products that are Reagent Kits, at which time the Specifications, cGMPs royalty rates in Section 3.4(a) shall apply. FHLR and applicable Laws, and conformed its Affiliates shall lose its right to the Specifications at the time of shipment, (vi) is due to any unascertainable reason despite Patheon having performed the Manufacturing Services in accordance with the Specifications, cGMP’s, the Manufacturing Process and applicable Laws and despite the Product having met the Specifications at the time of shipment, or (vii) is due to a breach by Penwest of its obligations manufacture Reagent Kits under this AgreementSection 3.8(b) within [********] after 454 notifies FHLR (following reasonable determination in the Joint Steering Committee of such capability) that 454 is capable of meeting the binding Forecast before FHLR or its Affiliates makes a written request to assume manufacturing responsibility. FHLR and its Affiliates shall lose its right to manufacture Instruments and Disposables under this Section 3.8(b) once 454 notifies FHLR that 454 is capable of meeting the binding Forecast for such Licensed Products. FHLR shall in such event be compensated for its reasonable investments regarding manufacture of Instruments at a rate [*************************].

Failure to Supply. ELITE shall notify L▇▇▇▇▇▇ as promptly as possible, but in no event later than five (a5) A Failure Business Days, after ELITE discovers that it will not be able to Supply shall have occurred under this Agreement under any supply the quantity of Products ordered by the following circumstances (a“Failure to Supply”): delivery date specified in a Purchase Order. In such event: (i) Patheon fails ELITE shall cooperate with L▇▇▇▇▇▇ in taking all actions that L▇▇▇▇▇▇ ▇▇▇▇▇ reasonably necessary in order to deliver a shipment of Product by the Delivery Dateremedy such inability to supply, at ELITE’s expense; and fails to replace such Product shipment within [**]) days after the scheduled Delivery Date; or (ii) Patheon fails If ELITE’s inability to ship supply continues past twenty (20) days from the complete number of ordered Batches by the Delivery Date, and Patheon fails to ship the remaining Batches within [**] days after the scheduled Delivery Date, and such failure occurs (A) with respect to Product shipments over [**] consecutive calendar quarters during any Year, or (B) with respect to [**] or more Product shipments in any Year; or (iii) Product delivered to Penwest or to a Penwest customer is determined to be defective for a reason required delivery date set forth in the first Sentence of Section 6.3(a)Purchase Order at LANNETT’s election, any or all outstanding Purchase Orders relating to such Product may be cancelled and there are [**] or more LANNETT shall have no obligations with respect to such deliveries of defective Product in Purchase Orders; provided, however, ELITE must cover any one Year. (b) If a Failure to Supply occurs, then Penwest or its Affiliates, itself or on behalf of its licensees or customers, may at its election, (ias defined below) require Patheon to qualify, as soon as reasonably practicable and at Patheon’s cost, a second Patheon facility to manufacture and supply Product to Penwest hereunder, it being understood that Penwest shall have the right to approve such second Patheon facility, such approval not to be unreasonably withheld or delayed; and/or (ii) retain a Third Party to manufacture and supply the requirements of Penwest and its Affiliates’, licensees’ and customers’ requirements for Product. (c) Except as obligations set forth in this Section. Compliance by ELITE with this Article 4.4 shall not relieve ELITE of any other obligation or liability under this Agreement. LANNETT shall otherwise retain all of its rights under this Agreement and/or at law against ELITE for its failure to deliver all or any portion of the quantity of Products ordered by L▇▇▇▇▇▇. With regards to a Binding Forecast or if ELITE accepted a Purchase Order from LANNETT, pursuant to the procedures defined in Section 4.2 of this Agreement, Patheon will not then ELITE shall be liable to Penwest nor have responsible for the late charges and any responsibility to Penwest for penalties assessed against LANNETT by its Customers or any deficiencies inother third party or any costs, fees, charges, or other liabilities associated with, any Product manufactured penalties incurred by it L▇▇▇▇▇▇ (collectively, “Product ClaimsFailure to Supply”). For greater certainty, Patheon will have no obligation for any Product Claims unless the delay is attributable to the extent the Product Claim (i) is caused action or controls imposed by deficiencies in the Specifications as provided to Patheon by PenwestDEA that do not result from ELITE’s negligence, the safety, efficacy, gross negligence or marketability of the Products willful misconduct; or any distribution thereof; provided that the Product was manufactured in accordance with the Manufacturing Process, the Specifications, cGMPs and applicable Laws, and conformed to the Specifications at the time of shipment; (ii) results from a defect in a Component demonstrable raw material shortages that is not reasonably discoverable are beyond ELITE’s control, but ELITE will use commercially reasonable efforts to keep three (3) to six (6) months of raw materials inventory on hand at all times. Late charges and any penalties assessed against ELITE by Patheon using the test methods set forth in the Specifications, (iii) results from Components supplied by Penwest that is not reasonably discoverable by Patheon using the test methods set forth in the Specifications, (iv) is caused by actions of Third Parties occurring after the Product is shipped by Patheon under Section 5.3, (v) is due to packaging design or labelling defects or omissions for which Patheon has no responsibility; provided that the Product was manufactured in accordance with the Manufacturing Process, the Specifications, cGMPs and applicable Laws, and conformed to the Specifications at the time of shipment, (vi) is due to any unascertainable reason despite Patheon having performed the Manufacturing Services in accordance with the Specifications, cGMP’s, the Manufacturing Process and applicable Laws and despite the Product having met the Specifications at the time of shipment, or (vii) is due to a breach by Penwest of its obligations L▇▇▇▇▇▇ under this Agreementparagraph are due and payable within thirty (30) days of being invoiced by L▇▇▇▇▇▇ and, if not timely paid, may be deducted against amounts owed by L▇▇▇▇▇▇ to ELITE.