Common use of Product Non-Compliance and Remedies Clause in Contracts

Product Non-Compliance and Remedies. If a Batch of Product fails to conform to the Specifications or was not Manufactured in compliance with cGMP (if applicable) and the Manufacturing Process, then Manufacturer will, as Rhythms’ sole and exclusive remedy and in lieu of other remedies available at law or in equity (except for any right of Rhythm to indemnification pursuant to Section 12.1 hereof in connection with third party claims), at Rhythm’s sole option: (a) refund in full the fees and expenses paid by Rhythm for such Batch, including, but not limited to, the cost of Rhythm Materials used in the Manufacture of such Batch; or (b) at Manufacturer’s cost and expense, including, but not limited to, the cost of Rhythm Materials used in the Manufacture of such Batch, Manufacture a new Batch of Product as soon as reasonably possible; or (c) Rework or Reprocess the Product, at Manufacturer’s cost and expense, so that the Batch can be deemed to have been Manufactured in compliance with cGMP (if applicable) and the Manufacturing Process, and to conform to Specifications. Moreover, the parties will meet to discuss, evaluate and analyze the reasons for and implications of the failure to comply with cGMP (if applicable) and/or the Manufacturing Process and will * CONFIDENTIAL TREATMENT REQUESTED. OMITTED PORTIONS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. decide whether to proceed with or to amend the applicable Work Order via a Change Order, or to terminate such Work Order.