Common use of Acceptance and Rejection of Product Clause in Contracts

Acceptance and Rejection of Product. (a) All shipments of Product received by D&D shall be deemed accepted unless D&D gives DUSA a written notice (the “Objection Notice”) [C.I.] of such receipt specifying the manner in which the Batch of Product does not conform to Specifications. (b) The Objection Notice shall be accompanied by written reports of any testing performed by or for D&D on such Batch. Upon receipt of the Objection Notice, DUSA may request D&D to return the rejected Product or samples thereof for further testing. The test results, if any, submitted to DUSA by D&D shall be deemed conclusive unless DUSA notifies D&D [C.I.] of the Objection Notice or the samples, [C.I.] that it disagrees with such test results. (c) Should DUSA wish to verify D&D’s conclusion in an Objection Notice, DUSA shall submit the rejected Product or samples to an independent laboratory (the “Independent Laboratory”) for analysis and the Independent Laboratory shall submit its findings in the form of a written report (the “Report”), [C.I.] shall be paid [C.I.] provided, however, if the results of the Report determine that any of the Product [C.I.] does not meet the applicable Specifications, [C.I.]. (d) DUSA shall [C.I.] Product that does not meet the applicable Specifications with conforming goods [C.I.] provided that the [C.I.] is not the direct result of [C.I.] D&D. In the event that replacement Product is required, it shall be shipped [C.I.] unless otherwise agreed to in writing by D&D.

Acceptance and Rejection of Product. PCYC may reject any Batch delivered hereunder that does not conform with the applicable Master Batch Record, DIXIE's standard operating procedures, certificate of analysis, Product Specifications or Packaging Specifications, or applicable documentation or process requirements (collectively, the "Release Criteria") based upon PCYC's testing of the QC Sample in accordance with the Test Methods and review of the Released Executed Batch Record. Any such notice of rejection shall be in writing and shall indicate the reasons for such rejection. Such notice is to be delivered to XXXXX within [ *** ] from PCYC's receipt of the QC Sample, Released Executed Batch Record and certificate of analysis from the designated carrier or such other period as may be specified in the applicable Product Appendix (the "Testing Period"). If XXXXX does not receive such notice of rejection by the end of the Testing Period, then PCYC shall be deemed to have accepted such Batch. After notice of rejection is given, PCYC shall cooperate with XXXXX in establishing the root cause of the rejection and shall deliver to XXXXX a sample of the allegedly non-conforming QC Sample for DIXIE's evaluation. XXXXX will evaluate process issues and other reasons for such non- compliance. XXXXX shall notify PCYC in writing as promptly as reasonably possible whether it disputes PCYC's basis for any rejection, but in any event no later than [ *** ] after its receipt of PCYC's notice of rejection or such other period as may be specified in the applicable Product Appendix (the "Response Period"). If PCYC does not receive such notice of dispute by the end of the Response Period, then XXXXX shall be deemed to agree with PCYC's rejection of such Batch. If XXXXX provides PCYC notice, in accordance with subsection (a) All shipments of Product received by D&D shall be deemed accepted unless D&D gives DUSA a written notice (the “Objection Notice”) [C.I.] of such receipt specifying the manner in which the Batch of Product does not conform to Specifications. (b) The Objection Notice shall be accompanied by written reports of any testing performed by or for D&D on such Batch. Upon receipt of the Objection Noticeabove, DUSA may request D&D to return the rejected Product or samples thereof for further testing. The test results, if any, submitted to DUSA by D&D shall be deemed conclusive unless DUSA notifies D&D [C.I.] of the Objection Notice or the samples, [C.I.] that it disagrees with such test results. (c) Should DUSA wish to verify D&D’s conclusion in an Objection Notice, DUSA shall submit the rejected Product or samples to an independent laboratory (the “Independent Laboratory”) for analysis and the Independent Laboratory shall submit its findings in the form of disputes PCYC's determination that a written report (the “Report”), [C.I.] shall be paid [C.I.] provided, however, if the results of the Report determine that any of the Product [C.I.] QC Sample does not meet the applicable SpecificationsRelease Criteria, [C.I.]. (d) DUSA then such QC Sample shall [C.I.] be submitted to a mutually acceptable, independent third party laboratory to determine whether such QC Sample conforms to the Release Criteria. The Parties agree that such third party laboratory's determination shall be final and binding. If the third party laboratory determines that such QC Sample meets the Release Criteria, then PCYC shall be deemed to have accepted such Batch, and shall pay for such Batch as set forth in Section 5.2. If the third party laboratory determines that such Product that does not meet the applicable Specifications Release Criteria, then such Batch shall be deemed rightfully rejected, and PCYC shall have no further obligation under this Agreement with conforming goods [C.I.] respect to such Batch. XXXXX shall initially bear the expenses of such independent third party laboratory with respect to such testing of such Batch; provided that the [C.I.] is not the direct result of [C.I.] D&D. In the event that replacement Product is requiredif such third party laboratory rules against PCYC, it then PCYC shall be shipped [C.I.] unless otherwise agreed reimburse XXXXX for such documented expenses. Any Batch accepted by PCYC under this Section 4.2 shall remain subject to DIXIE's warranties in writing by D&D.Sections 8.2 and 8.3.

Acceptance and Rejection of Product. 3.6.1 Sucampo shall have fifteen (15) business days from receipt of an Order from Par to reject or propose to modify an Order. Sucampo may only reject an Order that (a) All shipments lists products that are not covered by this Agreement, or (b) that is in excess of, or less than, the amount forecasted for a particular month in any Firm Order Period plus or minus the Permitted Variance permitted by Sections 3.1.2 and 3.2. 3.6.2 Par may reject any shipment, or portion of a shipment, of Product received as defective if the applicable Product contains a Patent Defect or Latent Defect. Par shall deliver written notice of any such rejection (a “Rejection Notice”) to Sucampo (i) in the case of Patent Defects within thirty (30) days after actual receipt of the Product by D&D Par or Par’s designee, and (ii) in the case of Latent Defects promptly and in any event within thirty (30) days after the date that Par discovers such Latent Defect; provided, however, that in no event shall Par be entitled to deliver a Rejection Notice in respect of a Latent Defect in respect of any Product more than one hundred twenty (120) days following delivery of such Product to Par or Par’s designee in accordance with Section 3.5 Any such Rejection Notice shall state in reasonable detail the reason why Par believes such Product contains a Patent Defect or Latent Defect and shall include a sample of the Product being rejected and copies of written reports relating to tests, studies or investigations performed to date by or on behalf of Par on the Product being rejected. 3.6.3 Par’s test results or basis for rejection shall be deemed accepted conclusive, unless D&D gives DUSA a written notice Sucampo notifies Par in writing, within thirty (30) days of receipt by Sucampo of the Rejection Notice that Sucampo disagrees with such test results or basis for rejection (an “Objection Notice”). If Sucampo and Par fail, within ten (10) [C.I.] of such receipt specifying the manner in which the Batch of Product does not conform to Specifications. (b) The Objection Notice shall be accompanied by written reports of any testing performed by or for D&D on such Batch. Upon receipt of the Objection Notice, DUSA may request D&D to return the rejected Product or samples thereof for further testing. The test results, if any, submitted to DUSA by D&D shall be deemed conclusive unless DUSA notifies D&D [C.I.] business days after delivery of the Objection Notice to Par, to agree as to whether the Product identified in the Rejection Notice is defective, representative samples of the batch of Product in question shall be submitted to a mutually acceptable qualified and reputable independent laboratory or consultant for analysis or review and a determination shall be made by such independent laboratory or consultant within thirty (30) days of such submission unless otherwise agreed by both Parties in writing. The results of such evaluation shall be binding upon the Parties. The Parties shall share equally the out-of-pocket cost of such evaluation, except that (a) if such independent laboratory or consultant determines that the Product shipment in question did not contain a Patent Defect or a Latent Defect, Par will: (i) be responsible for and pay any out-of-pocket costs and expenses of: (x) shipping the Product samples to Sucampo and shipping the Product to and from the independent laboratory or consultant and (y) any such analysis or review and (ii) promptly reimburse Sucampo for any out-of-pocket amounts previously paid for shipping or to the independent laboratory or consultant in connection with that determination and (b) if such independent laboratory or consultant confirms that such Product shipment did contain a Patent Defect or a Latent Defect, Sucampo will: (i) be responsible for and pay the out-of-pocket costs and expenses of: (x) Par’s shipping the Product samples to Sucampo and shipping the Product to and from the independent laboratory and consultant and (y) any analysis and review of such independent laboratory or consultant and (ii) promptly reimburse Par for any out-of-pocket amounts previously paid for shipping or to the independent laboratory or consultant in connection with that determination. 3.6.4 If any shipment of Product is rejected by Par in accordance with Section 3.6.2, Par’s duty to pay any and all amounts payable to Sucampo in respect of such shipment shall be suspended, unless and until there is a determination by the independent laboratory or consultant in support of Sucampo’s Objection Notice in accordance with Section 3.6.3. If only a portion of a shipment is rejected, Par’s duty to pay shall be suspended only as to the rejected portion thereof. 3.6.5 If Sucampo or the samples, [C.I.] that it disagrees with such test results. (c) Should DUSA wish to verify D&D’s conclusion in an Objection Notice, DUSA shall submit the rejected Product or samples to an independent laboratory (the “Independent Laboratory”) for analysis and the Independent Laboratory shall submit its findings in the form or consultant confirms that a shipment or partial shipment of a written report Product contained a Patent Defect or a Latent Defect pursuant to the provisions of this Section 3.6, Par shall return to Sucampo, at Sucampo’s request and expense (or, at the “Report”election and expense of Sucampo, destroy and provide evidence of such destruction to Sucampo), [C.I.] shall be paid [C.I.] provided, however, if the results any such available rejected Product. Sucampo will bear all of the Report determine that any Par’s reasonable direct and documented out-of-pocket expenses of the Product [C.I.] does not meet the applicable Specifications, [C.I.]. (d) DUSA shall [C.I.] Product that does not meet the applicable Specifications with conforming goods [C.I.] provided that the [C.I.] is not the direct result of [C.I.] D&D. such return or destruction. In the event that replacement the Product contained a Patent Defect or Latent Defect, Sucampo shall also (i) credit the original invoice or, upon any expiration or termination of this Agreement, refund Par in respect of the amounts actually paid and received by Sucampo for such defective Product, and (ii) adjust the invoice to Par to reflect the amount of the Product that was not rejected, payment of which is required, it due in accordance with the terms of this Agreement. The remedies available to Par under Section 3.6.3 and this 3.6.5 (and any deductions permitted in connection with any royalties payable under the License Agreement) shall be shipped [C.I.] unless otherwise agreed Par’s sole and exclusive remedy, and Sucampo’s sole liability, under this Agreement in respect of any Patent Defect or Latent Defect of the Product. 3.6.6 During the pendency of any rejection discussions, upon Par’s request, Sucampo shall use Commercially Reasonable Efforts to promptly, but in writing by D&D.no event sooner than ninety (90) days from the date of the Rejection Notice and subject to the Permitted Variance set forth in Section 3.2 above, supply Par with additional Product in an amount equal to the quantity of Product that is the subject of the rejection discussions.

Acceptance and Rejection of Product. (a) All shipments of Product received by D&D XXXXXXX shall be deemed accepted unless D&D XXXXXXX gives DUSA XXXX a written notice (the “Objection Notice”"OBJECTION NOTICE") within [C.I.] ([C.I.]) days of such receipt specifying the manner in which the Batch of Product does not conform to Specifications. (b) The Objection Notice shall be accompanied by written reports of any testing performed by or for D&D XXXXXXX on such Batch. Upon receipt of the Objection Notice, DUSA may request D&D XXXXXXX to return the rejected Product or samples [C.I.] thereof for further testing. The test results, if any, submitted to DUSA by D&D XXXXXXX shall be deemed conclusive unless DUSA notifies D&D XXXXXXX within [C.I.] ([C.I.]) days of its receipt of the Objection Notice or the samples, [C.I.] whichever is later, that it disagrees with such test results. (c) Should DUSA wish to verify D&D’s XXXXXXX'x conclusion in an Objection Notice, DUSA shall submit the rejected Product or samples to an independent laboratory (the “Independent Laboratory”"INDEPENDENT LABORATORY") for analysis and the Independent Laboratory shall submit its findings in the form of a written report (the “Report”"REPORT"), the [C.I.] shall be paid by [C.I.] ]; provided, however, if the results of the Report determine that any of the Product [C.I.] rejected by XXXXXXX does not meet the applicable Specifications, [C.I.] for all such [C.I.]. Note: Certain portions of this document have been marked "[C.I.]" to indicate that confidential treatment has been requested for this confidential information. The confidential portions have been omitted and filed separately with the Securities and Exchange Commission. (d) DUSA shall [C.I.] to [C.I.] Product that does not meet the applicable Specifications with conforming goods [C.I.] as soon as reasonably possible, provided that the [C.I.] departure from Specifications is not the direct result of the [C.I.] D&D. of XXXXXXX. In the event that replacement [C.I.] Product is required, it shall be shipped [C.I.] unless otherwise agreed to in writing by D&D.XXXXXXX.