Common use of Testing and Rejection Clause in Contracts

Testing and Rejection. 3.5.1 Within *** business days of its receipt of PRODUCT at such destination as may be designated by VIDARA, VIDARA may perform such tests and samplings as are *** Portions of this page have been omitted pursuant to a request for Confidential Treatment and filed separately with the Commission. appropriate to determine whether such PRODUCT meets the applicable PRODUCT SPECIFICATIONS. If VIDARA refuses acceptance of PRODUCT, then VIDARA shall inform BI RCV in writing within *** further business days of any aspect in which such PRODUCT fails to conform to the PRODUCT SPECIFICATIONS. If BI RCV does not receive such a notice within *** business days of VIDARA’s receipt of such PRODUCT, then VIDARA shall be deemed to have accepted the PRODUCT; provided that VIDARA shall have the right to revoke its acceptance of such goods if it later discovers latent defects not reasonably discoverable at the time of receipt. 3.5.2 If BI RCV receives a notice from VIDARA pursuant to Section 3.5.1 that VIDARA does not accept any PRODUCT supplied hereunder, then BI RCV shall immediately start retesting the PRODUCT using the retained samples in order to evaluate process issues and other reasons for such non-compliance. 3.5.3 Regardless of whether BI RCV agrees with VIDARA’s rejection of such PRODUCT, if requested in writing by VIDARA, BI RCV shall use reasonable efforts to promptly replace such allegedly defective PRODUCT, the costs of which shall be borne as set forth in Section 3.5.4. 3.5.4 In the event that BI RCV’s re-testing does not verify VIDARA’s reasons for rejecting such PRODUCT and VIDARA is convinced by BI RCV and agrees with BI RCV that VIDARA’s reasons for rejecting such PRODUCT are unjustified, VIDARA shall pay BI RCV reasonable internal and external costs for conducting such re-testing; provided, however, that, if VIDARA is not convinced and does not agree that VIDARA’s reasons for rejecting such PRODUCT are unjustified, the Parties shall mutually agree on an independent laboratory that shall determine by applying validated product-specific analytical methods whether such PRODUCT meets the PRODUCT SPECIFICATIONS. The conclusions of this independent laboratory shall be binding upon both Parties. If such laboratory determines that such PRODUCT does meet the PRODUCT SPECIFICATIONS, then VIDARA shall bear the costs for such independent laboratory and for any replacement PRODUCT manufactured and supplied to VIDARA by BI RCV pursuant to Section 3.5.3. If such laboratory determines that such PRODUCT does not meet the PRODUCT SPECIFICATIONS, then BI RCV shall bear the costs for such independent laboratory and for any such replacement of PRODUCT. 3.5.5 Neither Party may destroy any PRODUCT alleged not to meet the PRODUCT SPECIFICATIONS until the independent laboratory determines whether such PRODUCT meets the applicable PRODUCT SPECIFICATIONS and provides written notification to the Parties with respect to such determination, unless BI RCV accepts VIDARA’s basis for such rejection. Thereafter, BI RCV shall have the obligation to destroy or have destroyed, at its cost, all such rejected PRODUCT. Upon BI RCV’s written request and at BI RCV’s cost, VIDARA shall either destroy or return to BI RCV any rejected PRODUCT. The Parties agree that in the event of destruction of PRODUCT, the method of such destruction shall be in compliance with all applicable laws, rules and regulations. 3.5.6 Claims on account of quantity, loss or damages to PRODUCT (other than claims that such PRODUCT does not meet the PRODUCT SPECIFICATIONS and latent defects not reasonably detectable upon inspection) will be dispatched by VIDARA in writing within ten (10) business days following receipt thereof. BI RCV shall use reasonable efforts to replace the *** Portions of this page have been omitted pursuant to a request for Confidential Treatment and filed separately with the Commission. quantity of goods which such claims apply, which replacement shall be at VIDARA’s expense unless such claims are due to the negligence of BI RCV.

Testing and Rejection. 3.5.1 Within 4.7.1 HORIZON shall as soon as reasonable practicable and in any case within […*** business days *…] (solely with respect to OBVIOUS DEFECTS that are readily apparent upon visual inspection) or […***…] (for all other OBVIOUS DEFECTS), from the date of its physical receipt of PRODUCT at DELIVERED MATERIAL delivered to HORIZON hereunder, reject such destination as may be designated delivery (in whole or in part) in the event that it is Non-CONFORMING due to an OBVIOUS DEFECT by VIDARAwritten notice thereof to BI, VIDARA may perform such tests indicating the relevant BATCH description and samplings as are HORIZON’s reasons for rejection. If HORIZON fails to notify BI within said […*** Portions of this page have been omitted pursuant to a request for Confidential Treatment and filed separately with the Commission. appropriate to determine whether such PRODUCT meets the applicable PRODUCT SPECIFICATIONS. If VIDARA refuses acceptance of PRODUCT*…] time period, then VIDARA shall inform BI RCV in writing within *** further business days of any aspect in which such PRODUCT fails to conform to the PRODUCT SPECIFICATIONS. If BI RCV does not receive such a notice within *** business days of VIDARA’s receipt of such PRODUCT, then VIDARA HORIZON shall be deemed to have accepted such delivery and HORIZON shall not be entitled to any remedies for such OBVIOUS DEFECTS under this AGREEMENT, including but not limited to this Section 4.7 and 11. Notwithstanding the PRODUCT; provided that VIDARA foregoing, HORIZON shall have the right to revoke its acceptance of such goods DELIVERED MATERIAL if it later discovers latent defects LATENT DEFECTS not reasonably discoverable at the time of receipt, and retains all rights and remedies hereunder with respect to such LATENT DEFECTS, subject to the time limitations set forth in Section 4.7.3. 3.5.2 4.7.2 HORIZON shall have […***…] from the date of discovery that the DELIVERED MATERIAL is Non-CONFORMING owing to a LATENT DEFECT, to reject such DELIVERED MATERIAL (in whole or in part) by written notice thereof to BI, indicating the relevant BATCH description and HORIZON’s reasons for rejection. If HORIZON fails to so notify BI within said […***…] time period, HORIZON shall be deemed to have accepted such delivery of DELIVERED MATERIAL and HORIZON shall not be entitled to any remedies for such LATENT DEFECT under this under this AGREEMENT, including but not limited to this Section 4.7 and Section 11. 4.7.3 Notwithstanding the above, any and all remedies for Non-CONFORMING PRODUCT pursuant to this Section 4.7 shall be time-barred following expiration of the RESIDUAL SHELF LIFE of such PRODUCT. BI’s warranties under Section 4.3.3 with respect to such PRODUCT shall expire upon expiration of the RESIDUAL SHELF LIFE of such CONFIDENTIAL XxxX: 151373 PRODUCT, and BI shall have no liability under Section 11.1 with respect any product liability due to the use of any PRODUCT following the expiration of its RESIDUAL SHELF LIFE. 4.7.4 If BI RCV receives a notice from VIDARA HORIZON pursuant to Section 3.5.1 4.7.1 or 4.7.2 that VIDARA HORIZON does not accept any PRODUCT DELIVERED MATERIAL supplied hereunder, then BI RCV shall immediately start retesting re-testing the PRODUCT DELIVERED MATERIAL using the retained samples in order to evaluate process issues and other reasons for such non-compliance. 3.5.3 Regardless 4.7.5 If BI does not accept HORIZON´s assertion that the rejected DELIVERED MATERIAL is Non-CONFORMING: (i) BI will provide written notice to HORIZON that the rejection is not accepted stating in detail the reasons for BI’s assertion that the DELIVERED MATERIAL is CONFORMING. Such written notice by BI shall be provided to HORIZON within […***…] after receipt of HORIZON’s notice of rejection pursuant to Section 4.7.1 or 4.7.2; and (ii) both Parties will try to find a mutually acceptable solution through referral to the STEERING COMMITTEE in accordance with Section 7.2. If the STEERING COMMITTEE fails to find a mutually acceptable solution within […***…] after HORIZON’s receipt of BI’s notice under sub-Section 4.7.5(i) above, then: (iii) HORIZON shall immediately provide a representative sample of the DELIVERED MATERIAL from the relevant shipment received by HORIZON and/or related documentation to a mutually agreed upon, independent THIRD PARTY who shall be responsible for determining whether the relevant DELIVERED MATERIAL rejected by HORIZON is CONFORMING or Non-CONFORMING; and (iv) BI RCV agrees with VIDARA’s rejection shall immediately provide to such mutually agreed upon, independent Third Party a representative sample of DELIVERED MATERIAL from the relevant shipment delivered to HORIZON and/or all documentation relating to the manufacture of the relevant DELIVERED MATERIAL that the independent THIRD PARTY deems necessary to fulfil its obligations. Both Parties shall be bound by the determination of such PRODUCT, if requested independent THIRD PARTY (such determination to be made in writing by VIDARA, BI RCV shall use reasonable efforts to promptly replace such allegedly defective PRODUCT, accordance with the costs of which shall be borne timelines as set forth in Section 3.5.4the investigation plan) which determination shall be made in writing and shall include reasoning, and the Party against which the determination is made shall bear all costs associated with such THIRD PARTY determination, including those of the Party in whose favour the THIRD PARTY determination is given. The independent THIRD PARTY shall be required to enter into written undertakings of confidentiality and non-use with respect to CONFIDENTIAL INFORMATION no less burdensome than those set forth in this AGREEMENT. 3.5.4 4.7.6 Whether or not BI accepts HORIZON´s assertion that the DELIVERED MATERIAL rejected by HORIZON in accordance with Section 4.7.1 or 4.7.2 is Non-CONFORMING and CONFIDENTIAL XxxX: 151373 irrespective of the independent THIRD PARTY determination referred to in Section 4.7.5, BI shall, upon receipt of the notice of rejection, consult with HORIZON and use commercially reasonable efforts, as soon as reasonably practicable as mutually agreed by the Parties, to (i) provide a replacement shipment for the DELIVERED MATERIAL rejected by HORIZON, (ii) rework or reprocess (solely to the extent permitted under, and in accordance with, the QUALITY ASSURANCE AGREEMENT) the Non-CONFORMING DELIVERED MATERIAL in accordance with the Parties’ quality system procedures and the Parties’ mutual agreement thereto and deliver such reworked or reprocessed DELIVERED MATERIAL to HORIZON (which shall remain subject to the RESIDUAL SHELF LIFE provisions of Section 4.4.4) or (iii) issue a credit note for any payments made by HORIZON for the Non-CONFORMING DELIVERED MATERIAL. 4.7.7 If any DELIVERED MATERIAL rejected by HORIZON in accordance with Section 4.7.1 or 4.7.2 is ultimately determined to be Non-CONFORMING or BI accepts that the DELIVERED MATERIAL is Non-CONFORMING, BI shall bear all expenses (including raw materials) for any manufacture and shipment of replacement or reworked/reprocessed DELIVERED MATERIAL, provided that the replacement cost for a vial of a cell line shall be and not exceed […***…] (with any costs in excess being at HORIZON’s expense). In addition, BI shall make arrangements for the event that BI RCVreturn or disposal, at BI’s resole discretion, of the Non-testing does not verify VIDARA’s reasons for rejecting such PRODUCT and VIDARA is convinced by BI RCV and agrees with BI RCV that VIDARA’s reasons for rejecting such PRODUCT are unjustifiedCONFORMING DELIVERED MATERIAL, VIDARA shall pay BI RCV reasonable internal and external costs for conducting such re-testing; provided, however, thatthat in the case of PRODUCT that has been distributed (whether commercially or for clinical trials), if VIDARA is not convinced and does not agree that VIDARA’s reasons for rejecting such PRODUCT are unjustified, the Parties shall mutually agree on an independent laboratory that shall determine by applying validated product-specific analytical methods whether such PRODUCT meets the PRODUCT SPECIFICATIONS. The conclusions of this independent laboratory shall be binding upon both Partiessubject to Section 9.2. If such laboratory determines that such PRODUCT does meet the PRODUCT SPECIFICATIONS, then VIDARA BI shall bear the costs for such independent laboratory and pay or reimburse HORIZON for any replacement PRODUCT manufactured and supplied to VIDARA reasonable return shipping charges or out-of-pocket costs incurred by BI RCV HORIZON for any return shipment or lawful disposal of such Non-CONFORMING DELIVERED MATERIAL in accordance with BI’s reasonable instructions. 4.7.8 If any Product rejected by HORIZON pursuant to Section 3.5.3. If such laboratory determines that such 4.7.1 or 4.7.2 is ultimately determined to be CONFORMING, HORIZON shall either make payment to BI in accordance with Section 5 not only for the prices relating to the original shipment of the relevant PRODUCT does not meet now determined to be CONFORMING, but also for the PRODUCT SPECIFICATIONSprices relating to the replacement shipment of Product, then or BI RCV shall bear balance out the costs for such independent laboratory and for any such replacement of PRODUCTcredit note issued pursuant to Section 4.7.6. 3.5.5 Neither Party may destroy any PRODUCT alleged not to meet the PRODUCT SPECIFICATIONS until the independent laboratory determines whether such PRODUCT meets the applicable PRODUCT SPECIFICATIONS and provides written notification 4.7.9 In addition to the Parties with respect provisions relating to such determinationthe same set out in this AGREEMENT, unless acceptance and rejection, inspection and testing of DELIVERED MATERIAL shall be subject to each Parties’ rights and obligations as set out in the QAA. 4.7.10 If BI RCV accepts VIDARA’s basis for such rejection. Thereafterbecomes aware that any shipment of PRODUCT to HORIZON is Non-CONFORMING, BI RCV shall have will promptly notify HORIZON in accordance with the obligation to destroy or have destroyed, at its cost, all such rejected PRODUCT. Upon BI RCV’s written request and at BI RCV’s cost, VIDARA shall either destroy or return to BI RCV any rejected PRODUCT. The Parties agree that in the event of destruction of PRODUCT, the method of such destruction shall be in compliance with all applicable laws, rules and regulationsQUALITY ASSURANCE AGREEMENT. 3.5.6 Claims on account 4.7.11 Sec. 377 of quantity, loss or damages to PRODUCT the German Commercial Code (other than claims that such PRODUCT does not meet the PRODUCT SPECIFICATIONS and latent defects not reasonably detectable upon inspectionHGB) will be dispatched by VIDARA in writing within ten (10) business days following receipt thereof. BI RCV shall use reasonable efforts to replace the *** Portions of this page have been omitted pursuant to a request for Confidential Treatment and filed separately with the Commission. quantity of goods which such claims apply, which replacement shall be at VIDARA’s expense unless such claims are due to the negligence of BI RCVis expressly excluded.

Testing and Rejection. 3.5.1 [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED. 3.5.1. Within **[ * ] business days of its receipt of PRODUCT at such destination as may be designated by VIDARAInterMune, VIDARA InterMune may perform such tests and samplings as are *** Portions of this page have been omitted pursuant to a request for Confidential Treatment and filed separately with the Commission. appropriate to determine whether such PRODUCT meets the applicable PRODUCT SPECIFICATIONS. If VIDARA InterMune refuses acceptance of PRODUCT, then VIDARA InterMune shall inform BI RCV Austria in writing within **[ * ]further business days of any aspect in which such PRODUCT fails to conform to the PRODUCT SPECIFICATIONS. If BI RCV Austria does not receive such a notice within **[ * ] business days of VIDARA’s InterMune's receipt of such PRODUCT, then VIDARA InterMune shall be deemed to have accepted the PRODUCT; provided that VIDARA InterMune shall have the right to revoke its acceptance of such goods if it later discovers latent defects not reasonably discoverable at the time of receipt. 3.5.2 3.5.2. If BI RCV Austria receives a notice from VIDARA InterMune pursuant to Section 3.5.1 that VIDARA InterMune does not accept any PRODUCT supplied hereunder, then BI RCV Austria shall immediately start retesting re-testing the PRODUCT using the retained samples in order to evaluate process issues and other reasons for such non-compliance. 3.5.3 3.5.3. Regardless of whether BI RCV Austria agrees with VIDARA’s InterMune's rejection of such PRODUCT, if requested in writing by VIDARAInterMune, BI RCV Austria shall use reasonable efforts to promptly replace such allegedly defective PRODUCT, the costs of which shall be borne as set forth in Section 3.5.4. 3.5.4 3.5.4. In the event that BI RCV’s Austria's re-testing does not verify VIDARA’s InterMune's reasons for rejecting such PRODUCT and VIDARA is convinced by BI RCV and agrees with BI RCV that VIDARA’s reasons for rejecting such PRODUCT are unjustified, VIDARA shall pay BI RCV reasonable internal and external costs for conducting such re-testing; provided, however, that, if VIDARA is not convinced and does not agree that VIDARA’s reasons for rejecting such PRODUCT are unjustifiedPRODUCT, the Parties shall mutually agree on an independent laboratory that shall determine by applying validated product-specific analytical methods whether such PRODUCT meets the PRODUCT SPECIFICATIONS. The conclusions of this independent laboratory shall be binding upon both Parties. If such laboratory determines that such PRODUCT does meet the PRODUCT SPECIFICATIONS, then VIDARA InterMune shall bear the costs for such independent laboratory and for any replacement PRODUCT manufactured and supplied to VIDARA InterMune by BI RCV Austria pursuant to Section 3.5.3. If such laboratory determines that such PRODUCT does not meet the PRODUCT SPECIFICATIONS, then BI RCV Austria shall bear the costs for such independent laboratory and for any such replacement of PRODUCT. [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED. 3.5.5 3.5.5. Neither Party may destroy any PRODUCT alleged not to meet the PRODUCT SPECIFICATIONS Specifications until the independent laboratory determines whether such PRODUCT meets the applicable PRODUCT SPECIFICATIONS and provides written notification to the Parties with respect to such determination, unless BI RCV Austria accepts VIDARA’s InterMune's basis for such rejection. Thereafter, BI RCV Austria shall have the obligation to destroy or have destroyed, at its cost, all such rejected PRODUCT. Upon BI RCV’s Austria's written request and at BI RCV’s Austria's cost, VIDARA InterMune shall either destroy or return to BI RCV Austria any rejected PRODUCT. The Parties agree that in the event of destruction of PRODUCT, the method of such destruction shall be in compliance with all applicable laws, rules and regulations. 3.5.6 3.5.6. Claims on account of quantity, loss or damages to PRODUCT (other than claims that such PRODUCT does not meet the PRODUCT SPECIFICATIONS and latent defects not reasonably detectable upon inspection) will be dispatched by VIDARA InterMune in writing within ten (10) [ * ] business days following receipt thereof. BI RCV Austria shall use reasonable efforts to replace the *** Portions of this page have been omitted pursuant to a request for Confidential Treatment and filed separately with the Commission. quantity of goods which such claims apply, which replacement shall be at VIDARA’s InterMune's expense unless such claims are due to the negligence of BI RCVAustria.

Testing and Rejection. 3.5.1 [*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. Confidential treatment has been requested with respect to the omitted portions. 3.6.1 Within [*** ] business days of its receipt of PRODUCT at such destination as may be designated by VIDARAInterMune, VIDARA InterMune may perform such tests and samplings as are *** Portions of this page have been omitted pursuant to a request for Confidential Treatment and filed separately with the Commission. appropriate to determine whether such PRODUCT meets the applicable PRODUCT SPECIFICATIONS. If VIDARA InterMune refuses acceptance of PRODUCT, then VIDARA InterMune shall inform BI RCV Austria in writing within [*** ] further business days of any aspect in which such PRODUCT fails to conform to the PRODUCT SPECIFICATIONS. If BI RCV Austria does not receive such a notice within [*** ] business days of VIDARAInterMune’s receipt of such PRODUCT, then VIDARA InterMune shall be deemed to have accepted the PRODUCT; provided that VIDARA InterMune shall have the right to revoke its acceptance of such goods if it later discovers latent defects not reasonably discoverable at the time of receipt. 3.5.2 3.6.2 If BI RCV Austria receives a notice from VIDARA InterMune pursuant to Section 3.5.1 that VIDARA InterMune does not accept any PRODUCT supplied hereunder, then BI RCV Austria shall immediately start retesting re-testing the PRODUCT using the retained samples in order to evaluate process issues and other reasons for such non-compliance. 3.5.3 3.6.3 Regardless of whether BI RCV Austria agrees with VIDARAInterMune’s rejection of such PRODUCT, if requested in writing by VIDARAInterMune, BI RCV Austria shall use reasonable efforts to promptly replace such allegedly defective PRODUCT, the costs of which shall be borne as set forth in Section 3.5.43.6.4. 3.5.4 3.6.4 In the event that BI RCVAustria’s re-testing does not verify VIDARAInterMune’s reasons for rejecting such PRODUCT and VIDARA InterMune is convinced by BI RCV Austria and agrees with BI RCV Austria that VIDARAInterMune’s reasons for rejecting such PRODUCT are unjustifiedunjustified , VIDARA InterMune shall pay BI RCV Austria reasonable internal and external costs for conducting such re-testing; provided, however, that, if VIDARA InterMune is not convinced and does not agree that VIDARAInterMune’s reasons for rejecting such PRODUCT are unjustified, the Parties shall mutually agree on an independent laboratory that shall determine by applying validated product-specific analytical methods whether such PRODUCT meets the PRODUCT SPECIFICATIONS. The conclusions of this independent laboratory shall be binding upon both Parties. If such laboratory determines that such PRODUCT does meet the PRODUCT SPECIFICATIONS, then VIDARA InterMune shall bear the costs for such independent laboratory and for any replacement PRODUCT manufactured and supplied to VIDARA InterMune by BI RCV Austria pursuant to Section 3.5.33.6.3. If such laboratory determines that such PRODUCT does not meet the PRODUCT SPECIFICATIONS, then BI RCV Austria shall bear the costs for such independent laboratory and for any such replacement of PRODUCT. 3.5.5 3.6.5 Neither Party may destroy any PRODUCT alleged not to meet the PRODUCT SPECIFICATIONS until the independent laboratory determines whether such PRODUCT meets the applicable PRODUCT SPECIFICATIONS and provides written notification to the Parties with respect to such determination, unless BI RCV Austria accepts VIDARAInterMune’s basis for such rejection. Thereafter, BI RCV Austria shall have the obligation to destroy or have destroyed, at its cost, all such rejected PRODUCT. Upon BI RCVAustria’s written request and at BI RCVAustria’s cost, VIDARA [*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. Confidential treatment has been requested with respect to the omitted portions. InterMune shall either destroy or return to BI RCV Austria any rejected PRODUCT. The Parties agree that in the event of destruction of PRODUCT, the method of such destruction shall be in compliance with all applicable laws, rules and regulations. 3.5.6 3.6.6 Claims on account of quantity, loss or damages to PRODUCT (other than claims that such PRODUCT does not meet the PRODUCT SPECIFICATIONS and latent defects not reasonably detectable upon inspection) will be dispatched by VIDARA InterMune in writing within ten (10) business days following receipt thereof. BI RCV Austria shall use reasonable efforts to replace the *** Portions of this page have been omitted pursuant to a request for Confidential Treatment and filed separately with the Commission. quantity of goods which such claims apply, which replacement shall be at VIDARAInterMune’s expense unless such claims are due to the negligence of BI RCVAustria.