Common use of Financial Records; Audits Clause in Contracts

Financial Records; Audits. (a) Within 30 calendar days after the end of each Calendar Quarter commencing with the Calendar Quarter in which the First Post-Closing Sale of a Subject Product occurs, Buyer shall deliver to Seller a report setting out Net Sales in such prior Calendar Quarter for each Subject Product (each, a “Quarterly Net Sales Report”), including: (i) Net Sales in each country in such Calendar Quarter; and (ii) Number of units of Subject Product sold in each country in such Calendar Quarter. The report for the fourth Calendar Quarter of each Calendar Year (the “Annual Net Sales Report”) shall include the items in the preceding clauses (i) through (iii) for both such Calendar Quarter and the full Calendar Year in which such Calendar Quarter occurs as well as a reconciliation of the amounts set forth in the Quarterly Net Sales Reports delivered for the applicable Calendar Year to the amounts set forth in the Annual Net Sales Report. (b) Buyer shall, and shall cause the other Payment Obligors to, keep complete and accurate books and records pertaining to the sale, delivery and use of the Subject Products, including books and records of Net Sales (including any deductions therefrom), to the extent required to calculate and verify all Milestone Payments and Royalty Payments payable hereunder (“Net Sales Information”). Buyer shall, and shall cause the other Payment Obligors to, retain the Net Sales Information until the later of three years after the end of the period to which such Net Sales Information pertains and the expiration of the applicable Tax statute of limitations (or any extensions thereof), or for such longer period as may be required by Law. (c) At the request of Seller, Buyer shall, and shall cause the other Payment Obligors to, permit an independent certified public accountant retained by Seller, during normal business hours and upon reasonable notice, to audit the Net Sales Information in order to confirm the amount of the Milestone Payments or Royalty Payments made hereunder. Such audits may not (i) be conducted for any Calendar Quarter more than three years after the end of such Calendar Quarter, (ii) be conducted more than twice in any 12-month period, once with respect to the Milestone Payments and once with respect to the Royalty Payments (unless a previous audit with respect to the Milestone Payments or the Royalty Payments, as applicable, during such 12-month period revealed an underpayment with respect to such period or Buyer or any Payment Obligor restates or revises its books and records for such 12-month period) or (iii) be repeated for any Calendar Quarter (unless a previous audit for such Calendar Quarter revealed an underpayment with respect to such Calendar Quarter or Buyer or any Payment Obligor restates or revises its books and records for such Calendar Quarter). The cost of any audit shall be borne by Seller, unless the audit reveals a variance of more than [***] from the reported amounts of the Milestone Payments or the Royalty Payments, as applicable, in which case Buyer shall bear the cost of the audit. [***] (d) In the event of a dispute over the results of any audit conducted pursuant to Section 2.3.5(c), Seller and Buyer shall work in good faith to resolve such dispute. If the Parties are unable to reach a mutually acceptable resolution of any such dispute within 30 calendar days of the date of notice of such dispute, the dispute shall be submitted for arbitration to the Accountants. The decision of the Accountants shall be final and binding and the costs of such arbitration as well as the initial audit shall be borne between the Parties in such manner as the Accountants shall determine. Not later than 30 calendar days after such decision and in accordance with such decision, Buyer shall pay the additional Milestone Payments or Royalty Payments, as applicable, [***] (e) Seller shall treat all information subject to review under Section 2.3.5(c) in accordance with the confidentiality provisions of Section 4.4 and (i) Seller shall cause the independent public accountant retained by Seller pursuant to Section 2.3.5(c) and (ii) Seller and Buyer shall cause the Accountants to, as applicable, enter into a reasonably acceptable confidentiality agreement with Buyer or its Affiliates or (sub)licensees, as the case may be, that includes an obligation to retain all such Confidential Information (as defined in Section 4.4) in confidence.

Appears in 2 contracts

Samples: Asset Purchase Agreement (Aralez Pharmaceuticals Inc.), Asset Purchase Agreement (Aralez Pharmaceuticals Inc.)

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Financial Records; Audits. (a) Within 30 calendar days after the end of each Calendar Quarter commencing with the Calendar Quarter in which the First Post-Closing Sale of a Subject Product occurs, Buyer shall deliver to Seller a report setting out Net Sales in such prior Calendar Quarter for each Subject Product (each, a “Quarterly Net Sales Report”), including: (i) Net Sales in each country in such Calendar Quarter; and (ii) Number of units of Subject Product sold in each country in such Calendar Quarter. The report for the fourth Calendar Quarter of each Calendar Year (the “Annual Net Sales Report”) shall include the items in the preceding clauses (i) through (iii) for both such Calendar Quarter and the full Calendar Year in which such Calendar Quarter occurs as well as a reconciliation of the amounts set forth in the Quarterly Net Sales Reports delivered for the applicable Calendar Year to the amounts set forth in the Annual Net Sales Report. (b) Buyer shall, and shall cause the other Payment Obligors its Affiliates and its and their respective licensees to, keep complete and accurate books and records pertaining to the sale, delivery and use of the Subject ProductsRoyalty Products during the Royalty Term, including books and records of Net Sales (including any deductions therefrom), ) and Cost of Goods with respect to the extent required to calculate and verify all Milestone Payments and Royalty Payments payable hereunder (“Net Sales Information”)Products. Buyer shall, and shall cause the other Payment Obligors its Affiliates and its and their respective licensees to, retain the Net Sales Information such books and records until the later of three years after the end of the period to which such Net Sales Information pertains books and records pertain and the expiration of the applicable Tax statute of limitations (or any extensions thereof), or for such longer period as may be required by Law. (cb) At the request of Seller, Buyer shall, and shall cause the other Payment Obligors its Affiliates and its and their respective licensees to, permit an independent certified public accountant retained by Seller, during normal business hours and upon reasonable notice, to audit the Net Sales Information in order books and records maintained pursuant to confirm the amount of the Milestone Payments or Royalty Payments made hereunderSection 2.3.5(a). Such audits may not (i) be conducted for any Calendar Quarter more than three years [***] after the end of such Calendar Quarter, (ii) be conducted more than twice in any 12-month period[***]), once with respect to the Milestone Payments and once with respect to the Royalty Payments (unless a previous audit with respect to the Milestone Payments or the Royalty Payments, as applicable, during such 12-month period revealed an underpayment with respect to such period or Buyer or any Payment Obligor restates or revises its books and records for such 12-month period) or (iii) be repeated for any Calendar Quarter (unless a previous audit for such Calendar Quarter revealed an underpayment with respect to such Calendar Quarter or Buyer or any Payment Obligor restates or revises its such books and records for such Calendar Quarter)) or (vi) be conducted for any period after the Buy-Out Payment is made to Seller. The cost of any audit shall be borne by Seller, unless the audit reveals a variance of more than [***] from the reported amounts of the Milestone Payments or the Royalty Payments, as applicableamounts, in which case Buyer shall bear the cost of the audit. Unless disputed pursuant to Section 2.3.5(c), if such audit concludes that additional payments were owed or that excess payments were made during such period, Buyer shall pay the additional amounts, with interest from the date originally due as provided in Section 2.3.4, or Seller shall reimburse such excess payments, in either case, within [***] after the date on which such audit is completed and the conclusions thereof are notified to the Parties. Portions of this Exhibit, indicated by the mxxx “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. (dc) In the event of a dispute over the results of any audit conducted pursuant to Section 2.3.5(c2.3.5(b), Seller and Buyer shall work in good faith to resolve such dispute. If the Parties are unable to reach a mutually acceptable resolution of any such dispute within 30 calendar days [***] of the date of notice of such dispute, the dispute shall be submitted for arbitration to the Accountants. The decision of the Accountants shall be final and binding and the costs of such arbitration as well as the initial audit shall be borne between the Parties in such manner as the Accountants shall determine[***]. Not later than 30 calendar days [***] after such decision and in accordance with such decision, Buyer shall pay the additional Milestone Payments royalties, with interest from the date originally due as provided in Section 2.3.4 or Royalty PaymentsSeller shall reimburse such excess payments, as applicable, [***]. (ed) Seller shall treat all information subject to review under Section 2.3.5(c2.3.5(b) in accordance with the confidentiality provisions of Section 4.4 and (i) Seller shall cause the independent public accountant retained by Seller pursuant to Section 2.3.5(c2.3.5(b) and (ii) Seller and Buyer shall cause or the Accountants toAccountants, as applicable, to enter into a reasonably acceptable confidentiality agreement with Buyer or its Affiliates or (sub)licensees, as the case may be, that includes an obligation to retain all such Confidential Information (as defined in Section 4.4) in confidence. (e) Buyer’s obligations under this Section 2.3.5 shall terminate upon the date on which the Buy-Out Payment is made to Seller.

Appears in 1 contract

Samples: Asset Purchase Agreement (Igi Laboratories, Inc)

Financial Records; Audits. (a) Within five Business Days after the end of each calendar month, commencing with the calendar month in which the First Commercial Sale of a Subject Product occurs, Buyer shall deliver to Seller a report, solely for informational purposes, setting out estimated Net Sales in such prior calendar month for each Subject Product, on a country-by-country basis (each, an “Estimated Monthly Net Sales Report”), including: (i) estimated gross amount invoiced for sales of each Subject Product sold in each country in such calendar month; (ii) estimated Net Sales of each Subject Product in each country in such calendar month; and (iii) all relevant deductions from the estimated gross amount invoiced in accordance with this Agreement to calculate such Net Sales. (b) Within 15 Business Days after the end of each calendar month, commencing with the calendar month in which the First Commercial Sale of a Subject Product occurs, Buyer shall deliver to Seller a report setting out Net Sales in such prior calendar month for each Subject Product, on a country-by-country basis (each, a “Monthly Net Sales Report”), including: (i) gross amount invoiced for sales of each Subject Product sold in each country in such calendar month; (ii) Net Sales of each Subject Product in each country in such calendar month; and (iii) all relevant deductions from the gross amount invoiced in accordance with this Agreement to calculate such Net Sales. (c) Within 30 calendar days after the end of each Calendar Quarter Quarter, commencing with the Calendar Quarter in which the First Post-Closing Commercial Sale of a Subject Product occurs, Buyer shall deliver to Seller a report setting out Net Sales in such prior Calendar Quarter for each Subject Product Product, on a country-by-country basis (each, a “Quarterly Net Sales Report”), including: (i) Net Sales in gross amount invoiced for sales of each country in such Calendar Quarter; and (ii) Number of units of Subject Product sold in each country in such Calendar Quarter; (ii) Net Sales of each Subject Product in each country in such Calendar Quarter; (iii) all relevant deductions from the gross amount invoiced in accordance with this Agreement to calculate such Net Sales; and (iv) a reconciliation of the amounts set forth in the Monthly Net Sales Report delivered for the calendar month in the applicable Calendar Quarter to the amounts set forth in the Quarterly Net Sales Report. The report for the fourth Calendar Quarter of each Calendar Year (the “Annual Net Sales Report”) shall include the items in the preceding clauses (i) through (iii) for both such Calendar Quarter and the full Calendar Year in which such Calendar Quarter occurs as well as and include a reconciliation of the amounts set forth in the Quarterly Net Sales Reports delivered for the applicable Calendar Year to the amounts set forth in the Annual Net Sales Report. (bd) Commencing with the Calendar Year in which the First Commercial Sale of a Subject Product occurs, Buyer shall deliver to Seller a report setting out Buyer’s forecasted Net Sales for each Subject Product on a calendar month-by-calendar month and country-by-country basis (the “Net Sales Forecast”) according to the following schedule: (i) by April 15 of each Calendar Year, the Net Sales Forecast for the current Calendar Year and the following four Calendar Years; (ii) by July 15 of each Calendar Year, the Net Sales Forecast for the current Calendar Year and the following Calendar Year; and (iii) by October 15 of each Calendar Year, the Net Sales Forecast for the current Calendar Year and the following two Calendar Years; provided, however, that Buyer shall not be required to deliver to Seller any Net Sales Forecast for a Subject Product that was due in accordance with this Section 2.3.4(d) on a date prior to the date of the First Commercial Sale of the applicable Subject Product. (e) Each Estimated Monthly Net Sales Report, Monthly Net Sales Report, Quarterly Net Sales Report and Annual Net Sales Report delivered pursuant to Section 2.3.4 shall specifically set forth the amount deducted for each of the categories ((a) through (d)) in the definition of Net Sales in this Agreement. (f) Buyer shall, and shall cause the other Payment Obligors to, keep complete and accurate books and records pertaining to the sale, delivery and use of the Subject Products, including books and records of Net Sales (including any deductions therefromfrom the gross amount invoiced to calculate Net Sales), to the extent required to calculate and verify all Milestone Payments and Royalty Contingent Payments payable hereunder (“Net Sales Information”). Buyer shall, and shall cause the other Payment Obligors to, retain the Net Sales Information until the later of three years [***] after the end of the period to which such Net Sales Information pertains and the expiration of the applicable Tax statute of limitations (or any extensions thereof), or for such longer period as may be required by Law. (cg) At the request of Seller, Buyer shall, and shall cause the other Payment Obligors to, permit an independent certified public accountant retained by Seller, during normal business hours and upon reasonable notice, to audit the Net Sales Information in order to confirm the amount of the Milestone Payments or Royalty Contingent Payments made hereunder. Such audits may not (i) be conducted for any Calendar Quarter or Calendar Year more than three years [***] after the end of such Calendar QuarterQuarter or Calendar Year, (ii) be conducted more than twice once in any 12-month period, once with respect to the Milestone Payments and once with respect to the Royalty Payments period (unless a previous audit with respect to the Milestone Contingent Payments for a Calendar Quarter or Calendar Year ending less than 12 months prior to the Royalty Payments, as applicable, during date of the request for such 12-month period audit revealed an underpayment of at least [***] with respect to such period or Buyer or any Payment Obligor restates or revises its such books and records for such 12-month period) or (iii) be repeated for any Calendar Quarter or Calendar Year (unless a previous audit for such Calendar Quarter or Calendar Year revealed an underpayment of at least [***] with respect to such Calendar Quarter period or Buyer or any Payment Obligor restates or revises its such books and records for such Calendar QuarterQuarter or Calendar Year). The cost of any audit shall be borne by Seller, unless the audit reveals a variance of more than [***] from the reported amounts of the Milestone Payments or the Royalty Contingent Payments, as applicable, in which case Buyer shall bear the cost of the audit. [***]Unless disputed pursuant to Section 2.3.4(h), if such audit concludes that additional payments with respect to the Contingent Payments were owed or that excess payments were made during such period, Buyer shall pay the additional amounts, with interest from the date originally due as provided in Section 2.3.3, or Seller shall reimburse such excess payments, within 30 calendar days after the date on which such audit is completed and the conclusions thereof are notified to the Parties. (dh) In the event of a dispute over the results of any audit conducted pursuant to Section 2.3.5(c2.3.4(g), the disputing Party shall deliver a dispute notice to the other Party setting forth in reasonable detail its calculation of the amounts due or owed within ten calendar days following the completion of such audit (the “Dispute Notice”). The other Party shall deliver a response to the Dispute Notice no later than ten calendar days following its receipt of the Dispute Notice setting forth in reasonable detail its calculation of the amounts due or owed (the “Dispute Response”). Seller and Buyer shall work in good faith to resolve such dispute. If the Parties are unable to reach a mutually acceptable resolution of any such dispute within 30 calendar days of the date of notice of such dispute, then either Party shall be entitled to submit the dispute shall be submitted for arbitration to the Accountants, together with copies of the Dispute Notice and the Dispute Response. The Accountants shall not be entitled to reach a decision that is more or less than the greatest or least amounts set forth by the Parties in the Dispute Notice and Dispute Response, as applicable. The decision of the Accountants shall be final and binding and the costs of such arbitration as well as the initial audit shall be borne between the Parties in such manner as the Accountants shall determine. Not later than 30 calendar days after such decision and in accordance with such decision, Buyer shall pay the additional Milestone Payments or Royalty Contingent Payments, as applicable, [***]with interest from the date originally due as provided in Section 2.3.3 or Seller shall reimburse such excess payments, as applicable. (ei) Seller shall treat all information subject to review under Section 2.3.5(c2.3.4(g) in accordance with the confidentiality provisions of Section 4.4 5.3 and (i) Seller shall cause the independent public accountant retained by Seller pursuant to Section 2.3.5(c2.3.4(g) and (ii) Seller and Buyer shall cause the Accountants to, as applicable, enter into a reasonably acceptable confidentiality agreement with Buyer or its Affiliates or (sub)licensees, as the case may be, that includes an obligation to retain all such Confidential Information (as defined in Section 4.45.3) in confidence.

Appears in 1 contract

Samples: Asset Purchase Agreement (Ani Pharmaceuticals Inc)

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Financial Records; Audits. (a) Within 30 calendar days after the end of each Calendar Quarter commencing with the Calendar Quarter in which the First Post-Closing Sale of a Subject Product occurs, Buyer shall deliver to Seller a report setting out Net Sales in such prior Calendar Quarter for each Subject Product (each, a “Quarterly Net Sales Report”), including: (i) Net Sales in each country in such Calendar Quarter; and (ii) Number of units of Subject Product sold in each country in such Calendar Quarter. The report for the fourth Calendar Quarter of each Calendar Year (the “Annual Net Sales Report”) shall include the items in the preceding clauses (i) through (iii) for both such Calendar Quarter and the full Calendar Year in which such Calendar Quarter occurs as well as a reconciliation of the amounts set forth in the Quarterly Net Sales Reports delivered for the applicable Calendar Year to the amounts set forth in the Annual Net Sales Report. (b) Buyer shall, and shall cause the other Payment Obligors its Affiliates and its and their respective (sub)licensees to, keep complete and accurate books and records pertaining to the sale, delivery and use of the Subject ProductsRoyalty Products during the Pancreas Royalty Term, Thyroid Royalty Term or Other Thyroid Product Royalty Term, as applicable, including books and records of Net Invoiced Sales (including any deductions therefrom), to the extent required to calculate ) and verify all Milestone Payments and Royalty Payments payable hereunder (“Net Sales Information”)of, and sublicense Revenue with respect to, the Royalty Products. Buyer shall, and shall cause the other Payment Obligors its Affiliates and its and their respective (sub)licensees to, retain the Net Sales Information such books and records, until the later of three years after the end of the period to which such Net Sales Information pertains books and records pertain and the expiration of the applicable Tax statute of limitations (or any extensions thereof), or for such longer period as may be required by Law. (cb) At the request of Seller, Buyer shall, and shall cause the other Payment Obligors its Affiliates and its and their respective (sub)licensees to, permit an independent certified public accountant retained by Seller, during normal business hours and upon reasonable notice, to audit the Net Sales Information in order books and records maintained pursuant to confirm the amount of the Milestone Payments or Royalty Payments made hereunderSection 2.3.8(a). Such audits may not (i) be conducted for any Calendar Quarter more than three years after the end of such Calendar Quarter, (ii) be conducted more than twice once in any 12-month period, once with respect to the Milestone Payments and once with respect to the Royalty Payments period (unless a previous audit with respect to the Milestone Payments or the Royalty Payments, as applicable, during such 12-month period revealed an underpayment with respect to such period or Buyer or any Payment Obligor restates or revises its such books and records for such 12-month period) or (iii) be repeated for any Calendar Quarter (unless a previous audit for such Calendar Quarter revealed an underpayment with respect to such Calendar Quarter or Buyer or any Payment Obligor restates or revises its such books and records for such Calendar Quarter). The Except as provided below, the cost of any audit shall be borne by Seller, unless the audit reveals a variance of more than [***] 5% from the reported amounts of the Milestone Payments or the Royalty Payments, as applicableamounts, in which case Buyer shall bear the cost of the audit. [***]Unless disputed pursuant to Section 2.3.8(c), if such audit concludes that additional payments were owed or that excess payments were made during such period, Buyer shall pay the additional amounts, with interest from the date originally due as provided in Section 2.3.7, or Seller shall reimburse such excess payments, in either case, within 30 days after the date on which such audit is completed and the conclusions thereof are notified to the Parties. (dc) In the event of a dispute over the results of any audit conducted pursuant to Section 2.3.5(c2.3.8(b), Seller and Buyer shall work in good faith to resolve such dispute. If the Parties are unable to reach a mutually acceptable resolution of any such dispute within 30 calendar days of the date of notice of such disputedays, the dispute shall be submitted for arbitration to the Accountants. The decision of the Accountants shall be final and binding and the costs of such arbitration as well as the initial audit shall be borne between the Parties in such manner as the Accountants shall determine. Not later than 30 calendar days after such decision and in accordance with such decision, Buyer shall pay the additional Milestone Payments royalties, with interest from the date originally due as provided in Section 2.3.7 or Royalty PaymentsSeller shall reimburse such excess payments, as applicable, [***]. (ed) Seller shall treat all information subject to review under Section 2.3.5(c2.3.8(b) in accordance with the confidentiality provisions of Section 4.4 and (i) Seller shall cause the independent public accountant retained by Seller pursuant to Section 2.3.5(c2.3.8(b) and (ii) Seller and Buyer shall cause or the Accountants toAccountant, as applicable, to enter into a reasonably acceptable confidentiality agreement with Buyer or its Affiliates or (sub)licensees, as the case may be, that includes an obligation to retain all such Confidential Information (as defined in Section 4.4) in confidence.

Appears in 1 contract

Samples: Asset Purchase Agreement (Pdi Inc)

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