Common use of Quality and Acceptance Clause in Contracts

Quality and Acceptance. Both parties acknowledge that quality is critical to ensuring the performance and reliability of the Product, and that quality is a material term of this Agreement. AeroGen shall use commercially reasonable efforts to manufacture the Inhalers to achieve an acceptable quality level ("AQL") of non-conforming units, as determined by the JDT. The parties, through the JDT, will negotiate in good faith to identify critical, major and minor components and corresponding specifications, test methods and associated AQLs. PathoGenesis shall have a period of [*] from the date of receipt of any shipment of the Inhalers to test for quality and quantity of the shipment and to accept or reject such shipment. If PathoGenesis determines that any shipment or portion thereof of the Inhalers does not meet the specifications set forth in this Agreement, PathoGenesis shall notify AeroGen in writing within such [*], indicating the particular lot, date of delivery and the defective nature of the Inhalers. In such event, PathoGenesis shall promptly return the shipment or defective portion thereof to AeroGen and PathoGenesis shall have no obligation to pay for such shipment or defective portion of such shipment, as the case may be. Upon receipt, AeroGen shall undertake commercially reasonable efforts to repair or replace defective Inhalers and supply PathoGenesis with a replacement shipment of Inhalers acceptable to PathoGenesis, within a commercially reasonable time. In the event PathoGenesis does not so notify AeroGen within [ * ] of receipt of any shipment of Inhalers, PathoGenesis shall be deemed to have accepted such shipment and shall be obligated to make payment therefor as provided under Section 8.2.