Common use of REJECTED PRODUCT Clause in Contracts

REJECTED PRODUCT. 6.1 NEW ALPHA will inspect pursuant to New Alpha Review and Release, and GENERICO will inspect pursuant to Generico Manufacturing, each batch of Product and Pipeline Product for compliance with the Specifications, cGMPs, the FDCA and any and all other applicable Legal Requirements. If after inspection of Product or Pipeline Product NEW ALPHA notifies GENERICO, or GENERICO notifies NEW ALPHA, that any Product or Pipeline Product is non-compliant, as determined by such Party’s testing and inspection of the Product or Pipeline Product, the Parties will in good faith attempt to mutually determine whether the failure of the Product or Pipeline Product, as applicable, to comply is a result of Generico Manufacturing or New Alpha Manufacturing and the provisions of Section 6.2 will apply; provided, however, that the provisions of Section 6.2 will not apply (and thus GENERICO will Note: Redacted portions have been marked with (***). The redacted portions are subject to a request for confidential treatment that has been filed with the Securities and Exchange Commission. have no responsibility or liability relating to any non-compliance) with respect to any Pipeline Products in clause (A) or (B) of such definition unless, in any quarter beginning with the first quarter ending after the Effective Date, (***) of such Pipeline Products are non-compliant; provided further, that Pipeline Products shall only be determined non-compliant if GENERICO fails to perform Generico Manufacturing according to the Specifications for such Pipeline Product provided by NEW ALPHA. 6.2 If the Parties are unable to mutually determine whether the failure of the Product or Pipeline Products to comply is a result of Generico Manufacturing or New Alpha Manufacturing within 60 days of the delivery of a rejection notice by either Party, such dispute will be resolved by an independent, FDA-approved testing organization or consultant of recognized repute within the U.S. pharmaceutical industry, to be mutually designated by the Parties, the designation of which will not be unreasonably withheld or delayed by either Party. To the extent the Parties are unable to agree on a testing organization or consultant, each Party will designate one such entity and those two entities will agree on a mutually acceptable testing entity. The testing entity of the Product shall determine the source of the non-compliance (i.e., Generico Manufacturing or New Alpha Manufacturing). Both Parties will provide the testing entity with such information as the testing entity reasonably requires in order to make such determination; provided, however, that either Party may, to the extent it deems necessary, withhold from the independent third party testing entity any Proprietary Information. Any determination by the independent third party testing entity will be final and binding upon the Parties. If the independent third party testing entity states that it is unable to make a determination as a result of NEW ALPHA’s or GENERICO’s, as applicable, decision to not disclose Proprietary Information, the non-compliance of the applicable Rejected Product will be deemed to have resulted from (A) New Alpha Manufacturing in the event NEW ALPHA is the non-disclosing Party or (B) Generico Manufacturing in the event GENERICO is the non-disclosing Party. If the independent third party testing entity’s determination is inconclusive, then the non-compliance of such Rejected Product will be deemed to have resulted 50% from New Alpha Manufacturing and 50% from Generico Manufacturing. NEW ALPHA shall have the final determination over the disposition of any Product or Pipeline Product; provided, that no Product or Pipeline Product shall be released if either Party has determined that such Product or Pipeline Product is non-compliant. The Parties agree to handle the costs associated with Rejected Product manufactured for NEW ALPHA as follows: (A) To the extent that a Rejected Product is determined to be such as a result of the Generico Manufacturing or a failure or deficiency of the Generico Manufacturing, then GENERICO will replace the Rejected Product as promptly as practicable (if requested by NEW ALPHA) and, subject to clause (B) below, no payment shall be required to be made by NEW ALPHA in respect of such Rejected Product and any payment that may have been made shall, at NEW ALPHA’s election, be refunded by GENERICO within 30 days of such determination or credited to any amounts then owing by NEW ALPHA to GENERICO hereunder; provided, however, that GENERICO will not be obligated to replace and will not have any liability to NEW ALPHA in respect of the Rejected Product, unless the batches of the Rejected Product resulting from the Generico Manufacturing are more than (***) of the total batches of Product (or (***) of the total batches for Pipeline Products) manufactured for NEW ALPHA in any calendar year during the Term. To the extent the batches of Rejected Product exceed such (***) or (***), as applicable, GENERICO shall reimburse NEW ALPHA for the Chemical Ingredients and Materials used in the New Alpha Manufacturing of such excess Rejected Product. Note: Redacted portions have been marked with (***). The redacted portions are subject to a request for confidential treatment that has been filed with the Securities and Exchange Commission. (B) To the extent that Rejected Product is determined to be such as a result of the New Alpha Manufacturing or a failure or deficiency of the New Alpha Manufacturing, then GENERICO shall invoice NEW ALPHA for the Product or Pipeline Product within 30 days of such determination. Payment shall be made, net 30 days after receipt by NEW ALPHA of an invoice, so long as the invoice complies with the terms and conditions of this Agreement. (C) In the event that the reason for the Rejected Product in part results from the Generico Manufacturing or a failure or deficiency of the Generico Manufacturing and in part from the New Alpha Manufacturing or a failure or deficiency of the New Alpha Manufacturing, then the costs of the Product or Pipeline Products, as applicable, shall be allocated in an equitable manner between the Parties.

REJECTED PRODUCT. 6.1 NEW ALPHA will inspect pursuant to New Alpha Review and Release, and GENERICO will inspect pursuant to Generico Manufacturing, each batch of Product and Pipeline Product for compliance with the Specifications, cGMPs, the FDCA and any and all other applicable Legal Requirements. If after inspection of Product or Pipeline Product NEW ALPHA notifies GENERICO, or GENERICO notifies NEW ALPHA, that any Product or Pipeline Product is non-compliant, as determined by such Party’s testing and inspection of the Product or Pipeline Product, the Parties will in good faith attempt to mutually determine whether the failure of the Product or Pipeline Product, as applicable, to comply is a result of Generico Manufacturing or New Alpha Manufacturing and the provisions of Section 6.2 will apply; provided, however, that the provisions of Section 6.2 will not apply (and thus GENERICO will Note: Redacted portions have been marked with (***). The redacted portions are subject to a request for confidential treatment that has been filed with the Securities and Exchange Commission. provided, however, that the provisions of Section 6.2 will not apply (and thus GENERICO will have no responsibility or liability relating to any non-compliance) with respect to any Pipeline Products in clause (A) or (B) of such definition unless, in any quarter beginning with the first quarter ending after the Effective Date, (***) of such Pipeline Products are non-compliant; provided further, that Pipeline Products shall only be determined non-compliant if GENERICO fails to perform Generico Manufacturing according to the Specifications for such Pipeline Product provided by NEW ALPHA. 6.2 If the Parties are unable to mutually determine whether the failure of the Product or Pipeline Products to comply is a result of Generico Manufacturing or New Alpha Manufacturing within 60 days of the delivery of a rejection notice by either Party, such dispute will be resolved by an independent, FDA-approved testing organization or consultant of recognized repute within the U.S. pharmaceutical industry, to be mutually designated by the Parties, the designation of which will not be unreasonably withheld or delayed by either Party. To the extent the Parties are unable to agree on a testing organization or consultant, each Party will designate one such entity and those two entities will agree on a mutually acceptable testing entity. The testing entity of the Product shall determine the source of the non-compliance (i.e., Generico Manufacturing or New Alpha Manufacturing). Both Parties will provide the testing entity with such information as the testing entity reasonably requires in order to make such determination; provided, however, that either Party may, to the extent it deems necessary, withhold from the independent third party testing entity any Proprietary Information. Any determination by the independent third party testing entity will be final and binding upon the Parties. If the independent third party testing entity states that it is unable to make a determination as a result of NEW ALPHA’s or GENERICO’s, as applicable, decision to not disclose Proprietary Information, the non-compliance of the applicable Rejected Product will be deemed to have resulted from (A) New Alpha Manufacturing in the event NEW ALPHA is the non-disclosing Party or (B) Generico Manufacturing in the event GENERICO is the non-disclosing Party. If the independent third party testing entity’s determination is inconclusive, then the non-compliance of such Rejected Product will be deemed to have resulted 50% from New Alpha Manufacturing and 50% from Generico Manufacturing. NEW ALPHA shall have the final determination over the disposition of any Product or Pipeline Product; provided, that no Product or Pipeline Product shall be released if either Party has determined that such Product or Pipeline Product is non-compliant. The Parties agree to handle the costs associated with Rejected Product manufactured for NEW ALPHA as follows: (A) To the extent that a Rejected Product is determined to be such as a result of the Generico Manufacturing or a failure or deficiency of the Generico Manufacturing, then GENERICO will replace the Rejected Product as promptly as practicable (if requested by NEW ALPHA) and, subject to clause (B) below, no payment shall be required to be made by NEW ALPHA in respect of such Rejected Product and any payment that may have been made shall, at NEW ALPHA’s election, be refunded by GENERICO within 30 days of such determination or credited to any amounts then owing by NEW ALPHA to GENERICO hereunder; provided, however, that GENERICO will not be obligated to replace and will not have any liability to NEW ALPHA in respect of the Rejected Product, unless the batches of the Rejected Product resulting from the Generico Manufacturing are more than (***) of the total batches of Product (or (***) of the total batches for Pipeline Products) manufactured for NEW ALPHA in any calendar year during the Term. To the extent the batches of Rejected Product exceed such (***) or (***), as applicable, GENERICO shall reimburse NEW ALPHA for the Chemical Ingredients and Materials used in the New Alpha Manufacturing of such excess Rejected Product. Note: Redacted portions have been marked with (***). The redacted portions are subject to a request for confidential treatment that has been filed with the Securities and Exchange Commission. or (***), as applicable, GENERICO shall reimburse NEW ALPHA for the Chemical Ingredients and Materials used in the New Alpha Manufacturing of such excess Rejected Product. (B) To the extent that Rejected Product is determined to be such as a result of the New Alpha Manufacturing or a failure or deficiency of the New Alpha Manufacturing, then GENERICO shall invoice NEW ALPHA for the Product or Pipeline Product within 30 days of such determination. Payment shall be made, net 30 days after receipt by NEW ALPHA of an invoice, so long as the invoice complies with the terms and conditions of this Agreement. (C) In the event that the reason for the Rejected Product in part results from the Generico Manufacturing or a failure or deficiency of the Generico Manufacturing and in part from the New Alpha Manufacturing or a failure or deficiency of the New Alpha Manufacturing, then the costs of the Product or Pipeline Products, as applicable, shall be allocated in an equitable manner between the Parties.

REJECTED PRODUCT. 6.1 NEW ALPHA will inspect pursuant (a) SIRIUS may reject any Product which fails to New Alpha Review and Releasemeet the Specifications. SIRIUS shall, and GENERICO will inspect pursuant to Generico Manufacturing, each batch within [c.i.] days after its receipt of any shipment of Product and Pipeline related Certificate of Analysis of Product for compliance batch (as described in paragraph 5.1 hereof), notify AMIDE in writing of any claim relating to rejected Product batch and, failing such notification, shall be deemed to have accepted such Product batch. Such notice to AMIDE shall specify why the Product batch failed to perform to Specifications. AMIDE shall have an opportunity to [c.i.] said Product batch. All Product shall be submitted to inspection and evaluation in accordance with AMIDE's SOP's to determine whether or not said Product meets the Specifications. As to any such Product batch (including phases of or complete batches of bulk product) which is determined to fail the Specifications and may be rejected by SIRIUS or AMIDE ("Rejected Product"), cGMPs, AMIDE shall [c.i.] for the FDCA and any and all other applicable Legal RequirementsManufacture of Product. If after requested, AMIDE shall [c.i.] with SIRIUS for the [c.i.] of Rejected Product. Notwithstanding the foregoing, in the case of any nonconformity which is not readily apparent or discoverable upon reasonable inspection within such [c.i.] period, any claim of nonconformity with respect thereto shall not be deemed waived and delivery of Product or Pipeline Product NEW ALPHA shall not be deemed to have been accepted if SIRIUS notifies GENERICOAMIDE as soon as practicable, or GENERICO notifies NEW ALPHAbut not later than [c.i.], that any Product or Pipeline Product is non-compliant, as determined by following the date upon which SIRIUS learns of such Party’s testing and inspection of the Product or Pipeline Product, the Parties will in good faith attempt to mutually determine whether the failure of the Product or Pipeline Product, as applicable, to comply nonconformity. (b) If there is a result conflict between the test results of Generico Manufacturing or New Alpha Manufacturing AMIDE and the provisions test results of Section 6.2 will apply; provided, however, that the provisions of Section 6.2 will not apply (and thus GENERICO will Note: Redacted portions have been marked with (***). The redacted portions are subject to a request for confidential treatment that has been filed with the Securities and Exchange Commission. have no responsibility or liability relating to any non-compliance) SIRIUS with respect to any Pipeline Products in clause (A) or (B) shipment of Product, batch samples of such definition unless, Product batch shall be submitted [c.i.] to an independent laboratory [c.i.] for testing against the Specifications under procedures employed in any quarter beginning with the first quarter ending after the Effective Date, (***) Specifications. The fees and expenses of such Pipeline Products are non-compliant; provided further, that Pipeline Products laboratory testing shall only be determined non-compliant if GENERICO fails to perform Generico Manufacturing according to the Specifications for such Pipeline Product provided by NEW ALPHA[c.i. 6.2 ]. If the Parties are unable to mutually determine whether the failure of the Product or Pipeline Products to comply is a result of Generico Manufacturing or New Alpha Manufacturing within 60 days of the delivery of a rejection notice by either Party, such dispute will be resolved by an independent, FDA-approved testing organization or consultant of recognized repute within the U.S. pharmaceutical industry, to be mutually designated by the Parties, the designation of which will not be unreasonably withheld or delayed by either Party. To the extent the Parties are unable to agree on a testing organization or consultant, each Party will designate one such entity and those two entities will agree on a mutually acceptable testing entity. The testing entity of the Product shall determine the source of the non-compliance (i.e., Generico Manufacturing or New Alpha Manufacturing). Both Parties will provide the testing entity with such information as the testing entity reasonably requires in order to make such determination; provided, however, that either Party may, to the extent it deems necessary, withhold results from the independent third party testing entity any Proprietary Information. Any determination by the independent third party testing entity laboratory are inconclusive, final resolution will be final and binding upon the Parties. If the independent third party testing entity states that it is unable to make a determination as a result of NEW ALPHA’s or GENERICO’s, as applicable, decision to not disclose Proprietary Information, the non-compliance of the applicable Rejected Product will be deemed to have resulted from (Asettled in accordance with paragraph 12.5(b) New Alpha Manufacturing in the event NEW ALPHA is the non-disclosing Party or (B) Generico Manufacturing in the event GENERICO is the non-disclosing Party. If the independent third party testing entity’s determination is inconclusive, then the non-compliance of such Rejected Product will be deemed to have resulted 50% from New Alpha Manufacturing and 50% from Generico Manufacturing. NEW ALPHA shall have the final determination over the disposition of any Product or Pipeline Product; provided, that no Product or Pipeline Product shall be released if either Party has determined that such Product or Pipeline Product is non-compliant. The Parties agree to handle the costs associated with Rejected Product manufactured for NEW ALPHA as follows:below. (Ac) To For the extent that [c.i.] validation batches of Product produced by AMIDE, or if a Rejected Product is determined due to be such as a result SIRIUS supplied information, formulations or materials, [C.I.] shall bear [c.i.] of [c.i.] for Rejected Product, including the Generico Manufacturing [c.i.] of Rejected Product. If the [c.i.] registration batches or a failure or deficiency [c.i.] validation batches of the Generico Manufacturing, then GENERICO will replace Product fails to meet Specifications [C.I.] shall bear [c.i.] of [c.i.] to and [c.i.] the Rejected Product as promptly as practicable (if requested by NEW ALPHA) and[c.i.]. Thereafter, subject to clause (B) below, no payment shall be required to be made by NEW ALPHA in respect of such Rejected Product and any payment that may have been made shall, at NEW ALPHA’s election, be refunded by GENERICO within 30 days of such determination or credited to any amounts then owing by NEW ALPHA to GENERICO hereunder; provided, however, that GENERICO will not be obligated to replace and will not have any liability to NEW ALPHA in respect of the Rejected Product, unless the batches of the Rejected Product resulting from the Generico Manufacturing are more than (***) of the total batches of Product (or (***) of the total batches for Pipeline Products) manufactured for NEW ALPHA in any calendar year during the Term. To the extent the batches of Rejected Product exceed such (***) or (***), as applicable, GENERICO shall reimburse NEW ALPHA for the Chemical Ingredients and Materials used in the New Alpha Manufacturing of such excess Rejected Product. Note: Redacted portions have been marked with (***). The redacted portions are subject to event a request for confidential treatment that has been filed with the Securities and Exchange Commission. (B) To the extent that Rejected Product is determined due to be the failure of AMIDE to comply with applicable written procedures, and such as a result failure affects the marketability of the New Alpha Manufacturing or a failure or deficiency Product, [C.I.] shall bear [c.i.] of the New Alpha Manufacturing, then GENERICO shall invoice NEW ALPHA for [c.i.] supplied by [C.I.] and [c.i.]. If the Product does not meet final specifications, but such failure is not due to either SIRIUS supplied information or Pipeline Product within 30 days of such determination. Payment AMIDE's failure to follow written procedures, [C.I.] shall be made, net 30 days after receipt by NEW ALPHA of an invoice, so long as the invoice complies bear [c.i.] with the terms and conditions of this Agreement[C.I.] bearing [c.i. (C) In the event that the reason for the ] related to Rejected Product in part results from the Generico Manufacturing or a failure or deficiency of the Generico Manufacturing and in part from the New Alpha Manufacturing or a failure or deficiency of the New Alpha Manufacturing, then the costs of the Product or Pipeline Products, as applicable, shall be allocated in an equitable manner between the PartiesProduct.