Provision Language
2. Manufacture of Dynavax Material
2.1 Manufacture of Dynavax Material
(a) Initial Reserved Material. Subject to the terms and conditions of this Agreement, and in consideration for CEPI advancing the Initial Loan Amount in accordance with Section 3.1(a), Dynavax shall use commercially reasonable efforts to have manufactured [***] kg of Dynavax Material (the “Initial Reserved Material”) for release during Q2 2021 and Q3 2021. CEPI’s obligation to advance the Initial Loan Amount in accordance with Section 3.1(a) is firm as of the Effective Date and shall not be subject to termination or cancellation.
(b) Option for Additional Reserved Material. Subject to the terms and conditions of this Agreement, and in consideration for CEPI advancing the Additional Loan Amount in accordance with Section 3.1(a), CEPI shall have the option (the “Option”), exercisable in its sole discretion as set forth below, to require Dynavax to use commercially reasonable efforts to have manufactured an additional [***] kg of Dynavax Material (the “Additional Reserved Material”) for release during [***]. CEPI may exercise the Option by delivery of written notice of exercise to Dynavax no later than [***] . For purposes hereof, “Option Exercise Date” means the date on which CEPI delivers (as determined in accordance with Section 13.8) written notice of exercise of the Option to Dynavax . If not exercised by CEPI on or before [***], the Option shall terminate and be of no further force or effect. If CEPI exercises the Option on or before [***], CEPI’s obligation to advance the Additional Loan Amount in accordance with Section 3.1(a) shall become firm as of the delivery of such notice of exercise and shall not be subject to termination or cancellation.
(c) First Right to Reserve Extra Dynavax Adjuvant. Subject to the terms and conditions of this Agreement, and in consideration for CEPI advancing the Extra Loan Amount in accordance with Section 3.1(b), Dynavax will use commercially reasonable efforts to reserve extra manufacturing capacity at the Dynavax CMO to manufacture and release up to a further [***] kg of Dynavax Material in 2021. The parties acknowledge that, in addition to the manufacturing capacity necessary to manufacture the Initial Reserved Material and the Additional Reserved Material, as of the Effective Date, Dynavax has reserved manufacturing capacity at the Dynavax CMO necessary to manufacture a total of an additional [***] kg of Dynavax Material for third parties (the “Third Party Committed Capacity”), and, accordingly, the parties hereby agree that Dynavax’s obligations under this Section 2.1(c) shall only apply to the extent that, either (A) Dynavax identifies extra manufacturing capacity at the Dynavax CMO beyond both (i) the manufacturing capacity necessary to manufacture the Initial Reserved Material and the Additional Reserved Material and (ii) the Third Party Committed Capacity or (B) Third Party Committed Capacity becomes available for other customers (such extra manufacturing capacity under A or B to manufacture and release up to a further [***] kg of Dynavax Material in 2021, (“Extra Capacity”). If Dynavax identifies Extra Capacity, Dynavax shall promptly notify CEPI thereof, which notice shall specify the number of kilograms of Dynavax Material that the Dynavax CMO will be able to manufacture using such Extra Capacity, the anticipated timing of manufacture and release and the manufacturing cost per kilogram of such Dynavax Material (such notice, the “Extra Capacity Notice”). CEPI shall have the first right (the “First Right”), exercisable in its sole discretion as set forth below, to require Dynavax to use commercially reasonable efforts to have manufactured the specified additional number of kilograms of Dynavax Material (the “Extra Reserved Material”) for release during [***]. CEPI may exercise the First Right by delivery of written notice of exercise to Dynavax within five (5) Business Days after delivery (as determined in accordance with Section 13.8) by Dynavax of the Extra Capacity Notice not to be prior to [***]. For purposes hereof, “First Right Exercise Date” means the date on which CEPI delivers (as determined in accordance with Section 13.8) written notice of exercise of the First Right to Dynavax, provided that such delivery is made within such 5–Business Day period. If not exercised by CEPI within five (5) Business Days after delivery of the Extra Capacity Notice, the First Right shall terminate and be of no further force or effect. If CEPI exercises the First Right, CEPI’s obligation to advance the Extra Loan Amount in accordance with Section 3.1(b) shall become firm as of the First Right Exercise Date and shall not be subject to termination or cancellation.
(d) Ownership of Reserved Material. Dynavax shall be the sole owner of all Reserved Material manufactured pursuant to this Agreement, and CEPI’s only right with respect to any Reserved Material is the right to direct its use in accordance with Sections 2.3 and 2.4.
3. Financial Terms
3.5 Failed or Delayed Manufacture of Reserved Material. If Dynavax CMO fails to start manufacture of one or more batches of Reserved Material in time to meet the applicable release date set forth in Section 2.1 or one or more batches of Reserved Material fails to meet its specification for any reason:
(a) Dynavax shall inform CEPI in writing and provide all information known to Dynavax and reasonably necessary for CEPI to make an informed decision, as soon it becomes aware of the same; and
(b) CEPI may in its sole discretion, opt either to (i) accept the delay; (ii) accept Dynavax’s manufacture of replacement batch(es) for release within an agreed timeframe which may be after 31 December 2021; or (iii) in a situation where Dynavax has not paid, is not obligated to pay, or has paid but has a contractual right to recover or actually does recover amounts paid, from the Dynavax CMO, reduce the Loan Amount by the portion of the Manufacturing Cost (or Extra Manufacturing Cost, as applicable) for such batch(es), such reduction to be set–off against the next Loan Amount installment or, if CEPI is not obligated to advance any additional Loan Amount to Dynavax, repaid by Dynavax to CEPI within 30 Business Days of a repayment request for the same. For clarity, under no circumstances shall Dynavax have any obligation to pay or repay to CEPI any portion of the Loan Amount advanced to Dynavax that Dynavax has paid or is obligated to pay to the Dynavax CMO and has no contractual right to recover and does not actually recover from the Dynavax CMO.