Common use of Audits by Licensor Clause in Contracts

Audits by Licensor. Licensee shall keep, and shall require the Related Parties to keep, records of the latest [**] relating to gross sales and Net Sales of Licensed Products and Field of Use Sales of Licensee PDE9 Products that, in each case, are subject to royalty payment obligations to Licensor. For the sole purpose of verifying Licensee’s compliance with its payment obligations hereunder, Licensor shall have the right no more than [**] (except [**]), and no more than [**] (except [**]), at Licensor’s expense, to cause an independent, certified public accountant (chosen by Licensor and reasonably acceptable to Licensee) to review such records in the location(s) where such records are maintained by Licensee or its applicable Affiliate(s) upon reasonable notice and during regular business hours. The results of such review shall be made available to Licensee at the same time as such results are made available to Licensor. If the review reflects an underpayment to Licensor, such underpayment shall be promptly remitted to Licensor, together with interest calculated in the manner provided in Section 4.6(c). If the underpayment is equal to or greater than [**] percent ([**]%) of the amount that was otherwise due, Licensor shall be entitled to have Licensee pay all of the reasonable costs of such review, and such review shall not count as the [**] review Licensor is entitled to conduct hereunder. Licensor shall not have the right to audit Sublicensee(s) directly, but in connection with an audit of Licensee under this Section 4.6(b), Licensor shall have the right to cause Licensee to audit the applicable sublicensee(s) using the independent, certified public accountant conducting the audit under this Section 4.6(b). Each report provided by Licensee shall be deemed final and not subject to challenge, except in the event of fraud or other willful misconduct, [**] after the date furnished to Licensor.

Audits by Licensor. Licensee shall keep, and shall require the Related Parties to keep, complete, true and accurate books of accounts and records of the latest [***] relating to gross Calendar Years of sales and Net Sales of Licensed Products and Field of Use Sales of Licensee PDE9 Products that, in each case, are subject to royalty payment obligations to Licensor. For for the sole purpose of verifying Licensee’s compliance with its payment obligations hereunderdetermining the amounts payable to Licensor pursuant to this Agreement. At the reasonable request of Licensor, Licensor shall have the right no more than [**] (except [**])Licensee shall, and no more than [**] (except [**]), at Licensor’s expense, shall cause its Affiliates and shall use reasonable efforts to cause require its Non-Affiliate Sublicensees to permit an independent, certified public accountant (chosen by Licensor and reasonably acceptable to Licensee) to review review, at Licensor’s expense, such records in the location(s) where such records are maintained by Licensee or its applicable Affiliate(s) upon reasonable notice and or Non-Affiliate Sublicensee during regular business hourshours for the sole purpose of verifying Licensee’s compliance with its payment obligations hereunder. Such audit right may be exercised by Licensor [***]each Calendar Year (except in the case of fraud), [***]with respect to any Calendar Quarter (except in the case of fraud). If Licensee is unable to obtain from any Non-Affiliate Sublicensee a right for Licensor (through an independent certified public accountant designated by Licensor) to audit the equivalent books and records of such Non-Affiliate Sublicensee, Licensee shall obtain the right to inspect and audit such Non-Affiliate Sublicensee’s books and records for itself and shall exercise such audit rights on behalf of Licensor upon Licensor’s written request and disclose the results of any such audit to Licensor in accordance with the terms of this Agreement. The results of such review shall be made available to Licensee at the same time as such results are made available to Licensor. If the review reflects an underpayment to Licensor, such underpayment shall be promptly remitted to Licensor, together with interest calculated in the manner provided in Section 4.6(c6.6(c). If the underpayment is equal to or greater than [***] percent ([**]%) of the amount that was otherwise due, Licensor shall be entitled to have Licensee pay all of the reasonable costs of such review, and such review shall not count as the [***] review Licensor is entitled to conduct hereunder. Licensor shall not have the right to audit Sublicensee(s) directly, but in connection with an audit of Licensee under this Section 4.6(b), Licensor shall have the right to cause Licensee to audit the applicable sublicensee(s) using the independent, certified public accountant conducting the audit under this Section 4.6(b). Each report provided by Licensee shall be deemed final and not subject to challenge, except in the event of fraud or other willful misconduct, [***] after the date furnished to Licensor.