Financial Audits. Upon the written request of Lilly and not more than [***] in each Calendar Year, Spruce shall permit an independent certified public accounting firm of nationally recognized standing selected by Lilly and reasonably acceptable to Spruce, at Lilly’s expense, to have access during normal business hours, on at least [***] prior written notice, to such of the records of Spruce as may be reasonably necessary to verify the accuracy of the royalty reports hereunder for any Calendar Year ending not more than [***] prior to the date of such request. Spruce may require such accounting firm to sign a reasonable confidentiality agreement with Spruce. Any given period may not be audited more than [***]. At Spruce’s request, Lilly may consider in good faith, at its sole discretion and choice, the use of Spruce’s then current external auditor to perform such audit. The accounting firm shall disclose to Lilly and Spruce only whether the royalty reports are correct or incorrect and the specific details concerning any discrepancies. No other information shall be provided to Lilly. This right to audit shall remain in effect throughout the Term and for a period of [***] after the Term. If such accounting firm identifies a discrepancy made during such period, Spruce shall pay Lilly the amount of the discrepancy within [***] of the date Lilly delivers to Spruce such accounting firm’s written report so concluding, or as otherwise agreed upon by the Parties. The fees charged by such accounting firm shall be paid by Lilly unless the underpayment exceeded the greater of A) [***] of the amount owed by Spruce to Lilly for such Calendar Year or B) [***], in which case, the accounting firm’s fee to conduct such audit shall be borne by Spruce. Spruce shall pay interest on any underpayment as the rate set forth in Article 4.9. Spruce shall include in each sublicense granted by it pursuant to this Agreement a provision requiring the Sublicensee to allow Spruce’s independent nationally recognized certified public accounting firm to have access during normal business hours, on at least [***] prior written notice, to such of the records of the Sublicensee as may be reasonable necessary to verify the accuracy of the royalty reports hereunder for any Calendar Year ending not more than [***] prior to the date of such request. At Lilly’s request, Spruce shall initiate an audit of any Sublicensee with an independent nationally recognized certified public accounting firm, acceptable to Lilly, at Spruce’s expense. Prior to initiating any such audit, Spruce shall submit the accounting firms Sublicensee planned audit program to Lilly for review and approval. Lilly shall treat all financial information subject to review as Spruce’s Confidential Information in accordance with the confidentiality and non-use provisions of this Agreement, and shall cause its accounting firms to enter into an acceptable confidentiality agreement with Spruce, its Affiliate or Sublicensee, as applicable, obligating them to retain all such information in confidence pursuant to such confidentiality agreement.
Appears in 2 contracts
Samples: License Agreement (Spruce Biosciences, Inc.), License Agreement (Spruce Biosciences, Inc.)
Financial Audits. Upon the written request Lian shall keep or cause to be kept books of Lilly and not more than [***] in each Calendar Year, Spruce shall permit an independent certified public accounting firm of nationally recognized standing selected by Lilly and reasonably acceptable to Spruce, at Lilly’s expense, to have access during normal business hours, on at least [***] prior written notice, to such of the records of Spruce as account containing all information that may be reasonably necessary to verify for the accuracy purpose of the royalty reports hereunder for any Calendar Year ending not more than [***] prior to the date of such request. Spruce may require such accounting firm to sign a reasonable confidentiality agreement calculating amounts payable by Lian in connection with Spruce. Any given period may not be audited more than [***]. At Spruce’s request, Lilly may consider in good faith, at its sole discretion and choice, the use of Spruce’s then current external auditor to perform such audit. The accounting firm shall disclose to Lilly and Spruce only whether the royalty reports are correct or incorrect and the specific details concerning any discrepancies. No other information shall be provided to Lilly. This right to audit shall remain in effect throughout the Term and this Agreement for a period of [***] after Calendar Years following the Term. If such accounting firm identifies a discrepancy made during such period, Spruce shall pay Lilly the amount end of the discrepancy within Calendar Year during which such amounts were payable. Tarsus may appoint an independent public accountant (on a non-contingency basis and reasonably acceptable to Lian; any “Big 4” accountant shall be deemed acceptable to Lian), at Tarsus’s expense and subject to such accountant entering into a confidentiality agreement with Lian, to inspect such books of account in order to verify the calculation of any amounts payable to Tarsus hereunder. Such inspections shall be performed not more frequently than once in any [***] month period and upon reasonable prior notice, and shall be conducted during regular business hours in such a manner as to not unreasonably interfere with Lian’s normal business activities. Tarsus’s accountant may only share with Tarsus the report containing the summary results of its inspection, but not the date Lilly delivers to Spruce such accounting firm’s written report so concluding, or as otherwise agreed upon books of account reviewed by the Partiesaccountant during the audit, and such report shall constitute Lian’s Confidential Information. The fees charged by If any such accounting firm shall be inspection reveals that any payment (a) that should have been paid by Lilly unless Lian is greater than those that were actually paid by Lian, then Lian shall promptly pay the underpayment exceeded underpaid amount to Tarsus or (b) that was actually paid by Lian is greater than those that should have paid by Lian, then Lian shall credit the greater of A) [***] of overpaid amount against future royalty payments to Tarsus. If the amount owed payments that should have been paid by Spruce to Lilly for such Calendar Year or B) [***], in which case, the accounting firm’s fee to conduct such audit shall be borne by Spruce. Spruce shall pay interest on any underpayment as the rate set forth in Article 4.9. Spruce shall include in each sublicense granted by it pursuant to this Agreement a provision requiring the Sublicensee to allow Spruce’s independent nationally recognized certified public accounting firm to have access during normal business hours, on Lian are at least [***] prior written noticegreater than those that were actually paid by Lian, to such of then Lian shall also reimburse Tarsus for the records of the Sublicensee as may be reasonable necessary to verify the accuracy of the royalty reports hereunder for any Calendar Year ending not more than [***] prior to the date out-of-pocket costs of such request. At Lilly’s request, Spruce shall initiate an audit of any Sublicensee with an independent nationally recognized certified public accounting firm, acceptable to Lilly, at Spruce’s expense. Prior to initiating any such audit, Spruce shall submit the accounting firms Sublicensee planned audit program to Lilly for review and approval. Lilly shall treat all financial information subject to review as Spruce’s Confidential Information in accordance with the confidentiality and non-use provisions of this Agreement, and shall cause its accounting firms to enter into an acceptable confidentiality agreement with Spruce, its Affiliate or Sublicensee, as applicable, obligating them to retain all such information in confidence pursuant to such confidentiality agreementinspection.
Appears in 2 contracts
Samples: Development and License Agreement (LianBio), Development and License Agreement (Tarsus Pharmaceuticals, Inc.)
Financial Audits. Upon Following Commercial Launch for the Product, upon at least fourteen (14) Business Days written request of Lilly notice and not more than [***] in each Calendar Year, Spruce shall permit an independent certified public accounting firm of nationally recognized standing selected by Lilly and reasonably acceptable to Spruce, at Lilly’s expense, to have access during normal business hours, on at least no more frequently than once per calendar year, BXLS may cause an inspection and/or audit by an independent public accounting firm reasonably acceptable to Reata to be made of Reata’s books of account for the three (3) calendar years prior to the audit for the purpose of determining the correctness of Product Payments made under this Agreement. Upon BXLS’s reasonable request not more than once in any calendar year while any Third Party License remains in effect, Reata shall exercise any rights it may have under any Third Party License to cause an inspection and/or audit by an independent Specific terms in this Exhibit have been redacted because such terms are both not material and would likely cause competitive harm to the Company if publicly disclosed. These redacted terms have been marked in this Exhibit with three asterisks [***] prior written notice, ]. public accounting firm to such be made of the records books of Spruce as may be reasonably necessary account of any counterparty thereto for the purpose of determining the correctness of Product Payments made under this Agreement and promptly provide BXLS with the results of such inspection and/or audit. and Reata shall include in any such Third Party License provisions allowing Reata (or an independent public accounting firm) reasonable and customary rights to verify inspect and audit the accuracy relevant books of account of such counterparty consistent in scope with the rights granted to BXLS hereunder with respect to Reata’s books and records. All of the royalty reports expenses of any inspection or audit requested by BXLS hereunder (including the fees and expenses of such independent public accounting firm designated for any Calendar Year ending not more such purpose) shall be borne by (i) the BXLS, if the independent public accounting firm determines that Product Payments previously paid were incorrect by an amount less than or equal to [***] prior to ]% of the date of such request. Spruce may require such Product Payments actually paid or (ii) Reata, if the independent public accounting firm to sign a reasonable confidentiality agreement with Spruce. Any given period may not be audited more determines that Product Payments previously paid were incorrect by an amount greater than [***]. At Spruce’s request, Lilly may consider in good faith, at its sole discretion and choice, % of the use of Spruce’s then current external auditor to perform such auditProduct Payments actually paid. The terms on which any such independent public accounting firm is engaged shall provide that such independent public accounting firm may not disclose the confidential information of Reata or any such counterparty to any Third Party License to BXLS, except to the extent such disclosure is either necessary to determine the correctness of Product Payments or such confidential information otherwise would be included in a Product Payment report provided pursuant to Section 6.5. All information obtained by BXLS as a result of any such inspection or audit shall be Confidential Information of Reata and the independent public accounting firm shall disclose be considered a Representative of BXLS for purposes of Article 10. Absent manifest error, the financial results of the audit of the independent public accounting firm will be final and non-appealable. Any payment owed by one Party to Lilly and Spruce only whether another as a result of the royalty reports are correct or incorrect and the specific details concerning any discrepancies. No other information audit shall be provided to Lilly. This right to audit shall remain in effect throughout the Term and for a period of [***] after the Term. If such accounting firm identifies a discrepancy made during such period, Spruce shall pay Lilly the amount of the discrepancy within [***] of the date Lilly delivers to Spruce such accounting firm’s written report so concluding, or as otherwise agreed upon by the Parties. The fees charged by such accounting firm shall be paid by Lilly unless the underpayment exceeded the greater of A) [***] receipt of the amount owed by Spruce to Lilly for such Calendar Year or B) [***]audit report. Without limiting the foregoing, in which case, the accounting firm’s fee to conduct such audit shall be borne by Spruce. Spruce shall pay interest on any underpayment as the rate set forth in Article 4.9. Spruce shall include in each sublicense granted by it pursuant to this Agreement a provision requiring the Sublicensee to allow Spruce’s independent nationally recognized certified public accounting firm to have access during normal business hoursReata shall, on at least [***] prior written noticethe request of BXLS, to such provide BXLS with a copy of the records of Net Sales provision under any Third Party License and supporting financial data provided to Reata that is being used to determine the Sublicensee as Product Payments payable to BXLS, and if BXLS so desires it may be challenge whether such provision is commercially reasonable necessary to verify the accuracy of the royalty reports hereunder for any Calendar Year ending not more than [***] prior to the date of such request. At Lilly’s request, Spruce shall initiate an audit of any Sublicensee with an independent nationally recognized certified public accounting firm, acceptable to Lilly, at Spruce’s expense. Prior to initiating any such audit, Spruce shall submit the accounting firms Sublicensee planned audit program to Lilly for review and approval. Lilly shall treat all financial information subject to review as Spruce’s Confidential Information in accordance with the confidentiality and non-use provisions of this Agreement, and shall cause its accounting firms to enter into an acceptable confidentiality agreement with Spruce, its Affiliate or Sublicensee, as applicable, obligating them to retain all such information dispute resolution process set forth in confidence pursuant to such confidentiality agreementSection 15.10.
Appears in 1 contract
Samples: Development and Commercialization Funding Agreement (Reata Pharmaceuticals Inc)
Financial Audits. Upon Licensee will keep full and accurate books and records relating to the written request performance required of it under this Agreement. Lilly will have the right, during regular business hours and not upon reasonable advance notice, to have such books and records of Licensee audited no more than [***] in each one (1) time per Calendar YearYear so as to verify the accuracy of the information previously reported to Lilly. Lilly will, Spruce shall permit for purposes of such audit, utilize only the services of an independent certified public accounting firm of nationally recognized standing selected by Lilly and reasonably acceptable approved by Licensee, such approval not to Spruce, at Lilly’s expense, to have access during normal business hours, on at least [***] prior written notice, to such of be unreasonably withheld. Such audit may cover the records of Spruce as may be reasonably necessary to verify the accuracy of the royalty reports hereunder for any two (2) Calendar Year ending not more than [***] prior to Years preceding the date of such request. Spruce may require such accounting firm to sign a reasonable confidentiality agreement with Spruce. Any given period may not be audited more than [***]. At Spruce’s request, Lilly may consider in good faith, at its sole discretion and choice, the use of Spruce’s then current external auditor to perform request for such audit. The accounting firm shall disclose Notwithstanding the foregoing, no audit of Licensee pursuant to this Section 2.10 will cover any period of time preceding the Effective Date. Such accountants will keep confidential any information obtained during such audit and will, report to Lilly and Spruce only whether the royalty reports are correct or incorrect and the specific details concerning any discrepanciestheir conclusions. No other information shall The cost of such audit will be provided borne by Lilly; however, if such audit reveals an underpayment to Lilly. This right to audit shall remain in effect throughout the Term and for a period Lilly of [***] after or more, the Term. If such accounting firm identifies a discrepancy made during such period, Spruce shall pay Lilly the amount cost of the discrepancy within [***] of the date Lilly delivers to Spruce such accounting firm’s written report so concluding, or as otherwise agreed upon by the Parties. The fees charged by such accounting firm shall be paid by Lilly unless the underpayment exceeded the greater of A) [***] of the amount owed by Spruce to Lilly for such Calendar Year or B) [***], in which case, the accounting firm’s fee to conduct such audit shall will be borne by SpruceLicensee. Spruce shall pay interest on any underpayment Within thirty (30) days after both Parties have received a copy of an audit report, Licensee or Lilly, as appropriate, will compensate the rate set forth in Article 4.9other Party for payment errors or omissions revealed by the audit. Spruce shall Licensee will include in each sublicense all sublicenses granted by it pursuant in accordance herewith, and any other agreements enabling a Third Person to be a Permitted Seller, an audit provision substantially similar to the foregoing requiring such Permitted Seller to keep full and accurate books and records relating to the *** Certain information on this Agreement a provision requiring page has been omitted and filed separately with the Sublicensee Commission. Confidential treatment has been requested with respect to allow Spruce’s the omitted portions. Product and granting Lilly the right to have an independent nationally recognized certified public accounting firm to have access during normal business hours, on at least [***] prior written notice, to such of the records of the Sublicensee as may be reasonable necessary to verify audit the accuracy of the royalty reports hereunder for any Calendar Year ending not more than [***] prior to information reported by the date of such request. At Lilly’s request, Spruce shall initiate an audit of any Sublicensee with an independent nationally recognized certified public accounting firm, acceptable to Lilly, at Spruce’s expense. Prior to initiating any such audit, Spruce shall submit the accounting firms Sublicensee planned audit program to Lilly for review and approval. Lilly shall treat all financial information subject to review as Spruce’s Confidential Information sublicensee in accordance with the confidentiality and non-use provisions of this Agreement, and shall cause its accounting firms to enter into an acceptable confidentiality agreement with Spruce, its Affiliate or Sublicensee, as applicable, obligating them to retain all such information in confidence pursuant to such confidentiality agreementconnection therewith.
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