Common use of Quality Testing Clause in Contracts

Quality Testing. (a) During the hours of operation referenced in Section 2.08, Sterling shall (i) inspect, sample and test each lot of Raw Materials, Ancillary Raw Materials and Products under the procedures set forth in the Quality Assurance Manual, (ii) code to identify Raw Materials and Ancillary Raw Materials to specific Products produced and shipped and (iii) perform such additional testing, statistical process control and statistical quality control for Products as may be reasonably requested by BASF. BASF shall also have the right to further test Products prior to shipment hereunder. Sterling shall cooperate in any such test, and shall have the right to be represented and to participate in any such test, and to inspect any equipment used in determining the nature or quality of any Product. The cost of all inspecting, sampling, testing and coding hereunder shall be included in Fixed Costs. All records or certifications shall be kept for a period of not less than one year (or for the duration of any contest with respect thereto, if longer), and all samples shall be kept for a period of not less than 90 Days (or for the duration of any contest with respect thereto, if longer), with the procedures for taking samples at the unloading flange for Raw Materials and the procedures for taking samples of Products as of the date of shipment to be mutually agreed upon by the Parties. All records, certifications and samples shall be made available to BASF on request. The retained sample for any Raw Materials or Ancillary Raw Materials shall be the exclusive source for determining whether any Raw Materials or Ancillary Raw Materials meet the applicable Raw Materials Specifications, and the retained sample for any Product shall be the exclusive source for determining whether any Product meets the applicable Product Specifications.

Quality Testing. (a) During the hours of operation referenced in Section 2.08, Sterling shall (i) inspect, sample and test each lot of Raw Materials, Ancillary Raw Materials and Products under the procedures set forth in the Quality Assurance Manual, (ii) code to identify Raw Materials and Ancillary Raw Materials to specific Products produced and shipped and (iii) perform such additional testing, statistical process control and statistical quality control for Products as may be reasonably requested by BASF. BASF shall also have the right to further test Products prior to shipment hereunder. Sterling shall cooperate in any such test, and shall have the right to be represented and to participate in any such test, and to inspect any equipment used in determining the nature or quality of any Product. The cost of all inspecting, sampling, testing and coding hereunder shall be included in Fixed Costs. All records or certifications shall be kept for a period of not less than one year (or for the duration of any contest with respect thereto, if longer), and all samples shall be kept for a period of not less than 90 Days (or for the duration of any contest with respect thereto, if longer), with the procedures for taking samples at the unloading flange for Raw Materials and the procedures for taking samples of Products as of the date of shipment to be mutually agreed upon by the Parties. All records, certifications and samples shall be made available to BASF on request. The retained sample for any Raw Materials or Ancillary Raw Materials shall be the exclusive source for determining whether any Raw Materials or Ancillary Raw Materials meet the applicable Raw Materials Specifications, and the retained sample for any Product shall be the exclusive source for determining whether any Product meets the applicable Product Specifications. (b) Subject to the terms of this Agreement, Sterling shall accept any and all deliveries of Raw Materials; provided, however, that Sterling may reject any delivery of Raw Materials if Sterling notifies BASF in writing, within 10 Business Days after the delivery of such Raw Materials to Sterling, of the failure of such Raw Materials to meet the applicable Raw Materials Specifications. In the event that Sterling rejects any delivery of Raw Materials, BASF may object to such rejection in writing within five Business Days after receipt of the relevant notice from Sterling, in which event the Parties will meet within three Business Days after delivery of such objection to resolve the question of whether such Raw Materials meet the applicable Raw Materials Specifications. If the Parties are unable to resolve the matter during such meeting, either Party may refer the matter to an independent surveyor or chemical laboratory mutually agreeable to the Parties, which agreement will not be unreasonably withheld, for testing the retained sample of such Raw Materials under the agreed upon procedure. The findings of the independent surveyor or chemical laboratory will be conclusive and binding upon the Parties. If any Raw Materials fail to meet the applicable Raw Materials Specifications and BASF does not timely make available other Raw Materials meeting the applicable Raw Materials Specifications, Sterling’s manufacturing and delivering obligations hereunder shall be reduced accordingly. (c) Subject to the terms of this Agreement, BASF shall accept any and all deliveries of Products; provided, however, that BASF may reject any delivery of Products if BASF notifies Sterling in writing, within 45 Business Days after the later of delivery of such Products to BASF or delivery of such Products to a BASF customer (if shipped directly from the Site to such customer), of the failure of such Product to meet the applicable Product Specifications as of the date of shipment. In the event that BASF rejects any delivery of Products, Sterling may object to such rejection in writing within five Business Days after receipt of the relevant notice from BASF, in which event the Parties will meet within three Business Days after delivery of such objection to resolve the question of whether such Products meets the applicable Product Specifications. If the Parties are unable to resolve the matter during such meeting, either Party may refer the matter to an independent surveyor or chemical laboratory mutually agreeable to the Parties, which agreement will not be unreasonably withheld, for testing the retained sample of such Product under the agreed upon procedure. The findings of the independent surveyor or chemical laboratory will be conclusive and binding upon the Parties. If any Products fail to meet the applicable Products Specifications, Sterling shall reprocess such Products to meet the applicable Products Specifications or deliver replacement Products that meet the applicable Products Specifications.