LABELED, STORED, AND
SHIPPED IN A MANNER THAT ASSURES THAT THE PRODUCT MEETS THE SPECIFICATIONS UPON
DELIVERY.
EACH SHIPMENT OF PRODUCT SHALL BE ACCOMPANIED BY A CERTIFICATE OF
ANALYSIS, A CERTIFICATE OF COMPLIANCE, AND COPIES OF THE MANUFACTURING AND
PACKAGING BATCH RECORDS.
2.5
TESTING, ACCEPTANCE AND REJECTION.
UPON SCHERING'S RECEIPT OF EACH
BATCH OF CLINICAL SUPPLY OF THE PRODUCT, SCHERING OR ITS DESIGNEE SHALL HAVE
THIRTY (30) DAYS TO INSPECT SUCH BATCH TO DETERMINE ITS COMPLIANCE WITH THE
SPECIFICATIONS.
IF SCHERING DOES NOT NOTIFY SONUS OF SCHERING'S REJECTION OF A
BATCH OF SAID PRODUCT WITHIN SUCH THIRTY (30) DAY PERIOD, SUCH PRODUCT SHALL BE
DEEMED ACCEPTED SUBJECT TO PRODUCT WARRANTIES UNDER SECTION 7.1.
IF SCHERING
REJECTS ANY BATCH OF PRODUCT ("DEFECTIVE PRODUCT"), SONUS SHALL PROMPTLY NOTIFY
SCHERING IN WRITING IF IT EITHER:
(A) AGREES WITH THE REJECTION, IN WHICH EVENT
SONUS SHALL PROMPTLY REPLACE SUCH DEFECTIVE PRODUCT WITH PRODUCT COMPLYING WITH
THE SPECIFICATIONS TO THE EXTENT IT IS ABLE TO DO SO UNDER THE
4
MSA and shall request in writing that Schering either return or destroy the
rejected batch of Product at no additional cost to Schering; or (b) dispute
Schering's rejection.
If Sonus disputes Schering's rejection, then the Parties
shall engage a mutually acceptable Third Party laboratory to make a final and
binding determination if the rejection was proper.
The fees and expenses of
such laboratory testing shall be borne entirely by the Party against whom such
findings are made.
If such laboratory determines that such batch of Product has
not been reasonably rejected, then such batch shall automatically be deemed to
have been accepted by Schering, and if it has not already done so, Schering will
pay the amount for the batch of Product initially rejected by Schering.
If such
laboratory determines that such batch of Product has been reasonably rejected,
or if Sonus agrees with Schering's rejection, then Sonus shall promptly replace
such Defective Product with Product complying with the Specifications.
2.6
SCHERING INSPECTIONS AND INFORMATION RIGHTS.
SONUS AGREES THAT
SCHERING WILL HAVE ACCESS TO SONUS' FACILITIES AND ANY THIRD PARTY CONTRACT
MANUFACTURING FACILITIES (SUBJECT TO ANY RESTRICTIONS UNDER ANY AGREEMENTS
BETWEEN SONUS AND ITS THIRD PARTY CONTRACTORS) AT ALL REASONABLE TIMES FOR
PURPOSES OF INSPECTING SUCH FACILITIES AND MONITORING ACTIVITY RELATING TO
SONUS' OBLIGATIONS UNDER THIS AGREEMENT.
3.
PRICE AND PAYMENTS.
3.1
PRICE.
THE PRICE FOR EACH BATCH OF PRODUCT SHALL BE THE COST OF
PRODUCT TO SONUS FOR ANY PRODUCT MANUFACTURED BY A THIRD PARTY AND SHALL
INCLUDE, BUT NOT BE LIMITED TO, THE PURCHASE PRICE PAID TO SUCH THIRD PARTY FOR
PRODUCT, ANY ACTUAL COSTS INCURRED BY SONUS UNDER ITS CONTRACT MANUFACTURING
AGREEMENT WITH SUCH THIRD PARTY, AND COSTS INCURRED BY SONUS FOR API AND
EXCIPIENTS.
3.2
PAYMENTS.
SONUS SHALL INVOICE SCHERING QUARTERLY IN ARREARS FOR
PRODUCT RELEASED BY THE MANUFACTURER.
ALL PAYMENTS DUE HEREUNDER TO SONUS SHALL
BE PAID IN U.S. DOLLARS NOT LATER THAN THIRTY (30) DAYS FOLLOWING THE RECEIPT
DATE OF THE INVOICE.
UPON REQUEST, SONUS AGREES TO PROMPTLY