Common use of Inspections and Audits of the Seller Clause in Contracts

Inspections and Audits of the Seller. Following the Closing, upon at least [***] Business Days written notice and during normal business hours, no more frequently than once per calendar year, the Buyer may cause an inspection and/or audit by an independent public accounting firm reasonably acceptable to the Seller to be made of the Seller’s books of account for the [***] calendar years prior to the audit for the purpose of determining the correctness of Royalty Payments made under this Agreement. Upon the Buyer’s reasonable request, no more frequently than once per calendar year while any Out-License remains in effect, the Seller shall use Commercially Reasonable Efforts to exercise any rights it may have under any Out-License relating to a Product to cause an inspection and/or audit by an independent public accounting firm to be made of the books of account of any counterparty thereto for the purpose of determining the correctness of Royalty Payments made under this Agreement. All of the out-of-pocket expenses of any inspection or audit requested by the Buyer hereunder (including the fees and expenses of such independent public accounting firm designated for such purpose) shall be borne solely by the Buyer, unless the independent public accounting firm determines that Royalty Payments previously paid during the period of the audit were underpaid by an amount greater than [***] of the Royalty Payments actually paid during such period, in which case such expenses shall be borne by the Seller. Any such accounting firm shall not disclose the confidential information of the Seller or any such Licensee relating to a Product to the Buyer, except to the extent such disclosure is necessary to determine the correctness of Royalty Payments or otherwise would be included in a Report. All information obtained by the Buyer as a result of any such inspection or audit shall be Confidential Information subject to ARTICLE 8. If any audit discloses any underpayments by the Seller to the Buyer, then such underpayment, shall be paid by the Seller to the Buyer within [***] calendar days of it being so disclosed. If any audit discloses any overpayments by the Seller to the Buyer, then the Seller shall have the right to credit the amount of the overpayment against each subsequent quarterly Royalty Payment due to the Buyer until the overpayment has been fully applied. If the overpayment is not fully applied prior to the final quarterly Royalty Payment due hereunder, the Buyer shall promptly refund an amount equal to any such remaining overpayment.

Inspections and Audits of the Seller. Following the Closing, upon at least [***] fourteen (14) Business Days written notice and during normal business hours, no more frequently than once per calendar year, the Buyer may cause an inspection and/or audit by an independent public accounting firm reasonably acceptable to the Seller to be made of the Seller’s books of account for the [***] three (3) calendar years prior to the audit for the purpose of determining the correctness of Royalty Participation Payments made under this Agreement. Upon the Buyer’s reasonable request, no request not more frequently than once per in any calendar year while any Out-License remains in effect, the Seller shall use Commercially Reasonable Efforts commercially reasonable efforts to exercise any rights it may have under any Out-License relating to a Product to cause an inspection and/or audit by an independent public accounting firm to be made of the books of account of any counterparty thereto for the purpose of determining the correctness of Royalty Participation Payments made under this Agreement. All of the out-of-pocket expenses of any inspection or audit requested by the Buyer hereunder (including the fees and expenses of such independent public accounting firm designated for such purpose) shall be borne solely by (i) the Buyer, unless if the independent public accounting firm determines that Royalty Participation Payments previously paid during the period were incorrect by an amount less than or equal to 5% of the audit Participation Payments actually paid or (ii) the Seller, if the independent public accounting firm determines that Participation Payments previously paid were underpaid incorrect by an amount greater than [***] 5% of the Royalty Participation Payments actually paid during paid. The terms on which any such period, in which case such expenses shall be borne by the Seller. Any such independent public accounting firm is engaged shall provide that such independent public accounting firm may not disclose the confidential information of the Seller or any such Licensee counterparty to any Out-License relating to a Product to the Buyer, except to the extent such disclosure is either necessary to determine the correctness of Royalty Participation Payments or such confidential information otherwise would be included in a Revenue Participation Report. All information obtained by the Buyer as a result of any such inspection or audit shall be Confidential Information subject to ARTICLE 8. If any audit discloses any underpayments by 7 and the Seller to the Buyer, then such underpayment, independent public accounting firm shall be paid by the Seller to the considered a Representative of Buyer within [***] calendar days for purposes of it being so disclosed. If any audit discloses any overpayments by the Seller to the Buyer, then the Seller shall have the right to credit the amount of the overpayment against each subsequent quarterly Royalty Payment due to the Buyer until the overpayment has been fully applied. If the overpayment is not fully applied prior to the final quarterly Royalty Payment due hereunder, the Buyer shall promptly refund an amount equal to any such remaining overpaymentARTICLE 7.

Inspections and Audits of the Seller. Following the Closing, upon at least [***] fourteen (14) Business Days written notice and during normal business hours, no more frequently than once per calendar year, the Buyer may cause an inspection and/or or audit by an independent public accounting firm reasonably acceptable to the Seller to be made of the Seller’s Seller Entities’ books of account for the [***] three (3) calendar years prior to the audit for the purpose of determining the correctness of Royalty Participation Payments or Milestone Payments made under this Agreement. Upon the Buyer’s reasonable request, no request not more frequently than once per in any calendar year while any Out-License remains in effect, the Seller shall use Commercially Reasonable Efforts commercially reasonable efforts to exercise any rights it may have under any Out-License relating to a Product to cause an inspection and/or or audit by an independent public accounting firm to be made of the books of account of any counterparty thereto for the purpose of determining the correctness of Royalty Participation Payments or Milestone Payments made under this Agreement. All of the out-of-pocket expenses of any inspection or audit requested by the Buyer hereunder (including the fees and expenses of such independent public accounting firm designated for such ACTIVE/103949582.33 purpose) shall be borne solely by (i) the Buyer, unless if the independent public accounting firm determines that Royalty Participation Payments or Milestone Payments previously paid during the period were incorrect by an amount less than or equal to five percent (5%) of the audit Participation Payments or Milestone Payments actually paid or (ii) the Seller, if the independent public accounting firm determines that Participation Payments or Milestone Payments previously paid were underpaid incorrect by an amount greater than [***] five percent (5%) of the Royalty Participation Payments or Milestone Payments actually paid during paid. The terms on which any such period, in which case such expenses shall be borne by the Seller. Any such independent public accounting firm is engaged shall provide that such independent public accounting firm may not disclose the confidential information of the Seller or any such Licensee counterparty to any Out-License relating to a Product to the Buyer, except to the extent such disclosure is either necessary to determine the correctness of Royalty Participation Payments or Milestone Payments or such confidential information otherwise would be included in a Revenue Participation Report. All information obtained by the Buyer as a result of any such inspection or audit shall be Confidential Information subject to ARTICLE 8. If any audit discloses any underpayments by 7 and the Seller to the Buyer, then such underpayment, independent public accounting firm shall be paid by the Seller to the considered a Representative of Buyer within [***] calendar days for purposes of it being so disclosed. If any audit discloses any overpayments by the Seller to the Buyer, then the Seller shall have the right to credit the amount of the overpayment against each subsequent quarterly Royalty Payment due to the Buyer until the overpayment has been fully applied. If the overpayment is not fully applied prior to the final quarterly Royalty Payment due hereunder, the Buyer shall promptly refund an amount equal to any such remaining overpaymentARTICLE 7.

Inspections and Audits of the Seller. Following the Closing, upon at least [***] Business Days Days’ written notice and during normal business hours, no more frequently than once per calendar year, the Buyer may cause an inspection and/or audit by an independent public accounting firm reasonably acceptable to the Seller to be made of the Seller’s books of account for the [***] two calendar years prior to the audit for the purpose of determining the correctness of Royalty Payments made under this Agreement. Upon the Buyer’s reasonable request, no more frequently than once per calendar year while any Out-License or Permitted License remains in effect, the Seller shall use Commercially Reasonable Efforts to exercise any rights it may have under any Out-License or Permitted License relating to a Product the Products to cause an inspection and/or audit by an independent public accounting firm to be made of the books of account of any counterparty thereto for the purpose of determining the correctness of Royalty Payments made under this Agreement. All of the out-of-pocket expenses of any inspection or audit requested by the Buyer hereunder (including the fees and expenses of such independent Certain confidential information contained in this document, marked by [**], has been omitted because ADC Therapeutics SA (ADCT) has determined that the information (i) is not material and (ii) is the type that ADCT customarily and actually treats as private or confidential. public accounting firm designated for such purpose) shall be borne solely by the Buyer, unless the independent public accounting firm determines that Royalty Payments previously paid during the period of the audit were underpaid by an amount greater than [**] percent ([*] *]%) of the Royalty Payments actually paid during such period, in which case such expenses shall be borne by the Seller. Any Such accounting firm will enter into a confidentiality agreement and an engagement letter reasonably acceptable to the Seller governing the use and disclosure of the Seller’s information disclosed to such accounting firm and such accounting firm’s acceptance of the procedures set forth in this Section 5.3. Such accounting firm shall not disclose the confidential information of the Seller or any such Licensee relating to a Product the Products to the Buyer, except to the extent such disclosure is necessary to determine the correctness of Royalty Payments or otherwise would be included in a Report. All information obtained by the Buyer as a result of any such inspection or audit shall be Confidential Information of the Seller subject to ARTICLE 8Article 7. The Parties agree that the calculation of Included Product Revenue and the Royalty Payments by such accounting firm contemplated by this Section 5.3 is to measure Included Product Revenue and the Royalty Payments in accordance with the terms of this Agreement, and such calculation is not intended to permit the introduction of accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies contrary to those specified in this Agreement for the purposes of determining Included Product Revenue and the Royalty Payments. Such accounting firm shall provide a copy of its report to the Parties simultaneously. The Parties shall have [**] calendar days from the date of delivery of such report to provide the accounting firm with comments on such report, which each Party shall deliver to the accounting firm and the other Party simultaneously. The accounting firm shall consider such comments in good faith and shall deliver an updated report within [**] calendar days of the earlier to occur of such [**] day review period or the Parties’ written confirmation of submission of final comments to such accounting firm’s initial report. If any the final report of the accounting firm in respect of an audit discloses any underpayments by the Seller to the Buyer, then such underpayment, shall be paid by the Seller to the Buyer within [***] calendar days of it being so disclosed. If any audit discloses any overpayments by the Seller to the Buyer, then then, the Seller shall have the right to credit the amount of the overpayment against each subsequent quarterly Royalty Payment due to the Buyer until the overpayment has been fully applied. If the overpayment is not fully applied prior to the final quarterly Royalty Payment due hereunder, the Buyer shall promptly refund an amount equal to any such remaining overpayment.

Inspections and Audits of the Seller. Following the Tranche 1 Closing, upon at least [***] fourteen (14) Business Days written notice and during normal business hours, no more frequently than once per calendar year, the Buyer may cause an inspection and/or audit by an independent public accounting firm reasonably acceptable to the Seller to be made of the Seller’s books of account for the [***] three (3) calendar years prior to the audit for the purpose of determining the correctness of Royalty Payments made under this Agreement. Upon the Buyer’s reasonable request, no more frequently than once per calendar year while any Out-License remains in effect, the Seller shall use Commercially Reasonable Efforts to exercise any rights it may have under any Out-License relating to a Product to cause an inspection and/or audit by an independent public accounting firm to be made of the books of account of any counterparty thereto for the purpose of determining the correctness of Royalty Payments made under this Agreement. All of the reasonable and documented out-of-pocket expenses of any inspection or audit requested by the Buyer hereunder (including the reasonable fees and expenses of such independent public accounting firm designated for such purpose) shall be borne solely by the Buyer, unless the independent public accounting firm determines that Royalty Payments previously paid during the period of the audit were underpaid by an amount greater than [***] ]% of the Royalty Payments actually paid during such period, in which case such expenses shall be borne by the Seller. Any such accounting firm shall not disclose the confidential information of the Seller or any such Licensee relating to a Product to the Buyer, except to the extent such disclosure is necessary to determine the correctness of Royalty Payments or otherwise would be included in a Report. All information obtained by the Buyer as a result of any such inspection or audit shall be Confidential Information subject to ARTICLE ‎ARTICLE 8. If any audit discloses any underpayments by the Seller to the Buyer, then such underpayment, shall be paid by the Seller to the Buyer within [***] calendar days of it being so disclosed. If any audit discloses any overpayments by the Seller to the Buyer, then the Seller shall have the right to credit the amount of the overpayment against each subsequent quarterly Royalty Payment due to the Buyer until the overpayment has been fully applied. If the overpayment is not fully applied prior to the final quarterly Royalty Payment due hereunder, the Buyer shall promptly refund an amount equal to any such remaining overpayment. Certain information indicated with [***] in this document has been omitted from this exhibit because it is both (i) not material and (ii) is the type that the registrant treats as private or confidential.

Inspections and Audits of the Seller. Following From and after the Closingdate hereof, upon at least [***[ * ] Business Days written notice and during normal business hours, no more frequently than once per calendar yearin any [ * ] period, the Buyer may cause an inspection and/or audit by an independent public accounting firm reasonably acceptable to the Seller to be made of the Seller’s or its Affiliates’ books of account for the [***[ * ] calendar years prior to the audit for the purpose of determining the correctness of Royalty Payments made under this Agreement. Upon the Buyer’s reasonable request, no request not more frequently than once per calendar year [ * ] period while any Out-License remains in effect, the Seller shall use Commercially Reasonable Efforts to exercise any rights it may have under any Out-License relating to a the Product to cause an inspection and/or audit by an independent public accounting firm reasonably acceptable to the Seller to be made of the books of account of any counterparty thereto for the purpose of determining the correctness of Royalty Payments made paid under this Agreement. Seller shall notify Buyer in writing if it initiates an inspection and/or audit of the books of accounts of any counterparty to an Out-License to the extent such inspection and/or audit is related to the Royalty Payments, and shall provide to Buyer a redacted copy of any report relating thereto within [ * ] Business Days of receipt thereof; provided, that any redactions to such report shall not include any information necessary to determine the correctness of the calculation of the Royalty Payments paid under this Agreement. All of the out-of-pocket expenses of any inspection or audit requested by the Buyer hereunder (including the fees and expenses of such independent public accounting firm designated for such purpose) shall be borne solely by the Buyer, unless the independent public accounting firm determines that Royalty Payments previously paid during the period of the audit were underpaid incorrect by an amount greater than [***[ * ] of the Royalty Payments actually paid during for the period reviewed by such periodpublic accounting firm in the aggregate, in which case such expenses shall be borne by the Seller. Any 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 the Seller or any such Licensee counterparty to any Out-License relating to a the Product to the Buyer, except to the extent such disclosure is either necessary to determine the correctness of Royalty Payments or such confidential information otherwise would be included in a Royalty Report. All information obtained by the Buyer as a result of any such inspection or audit shall be Confidential Information of the Seller subject to ARTICLE Article 8 and the independent public accounting firm shall be considered a Representative of Buyer for purposes of Article 8. If any Any payment owed by one party to another as a result of the audit discloses any underpayments (except to the extent the result of such audit is being disputed in good faith by the Seller to the Buyer, then such underpayment, Seller) shall be paid by the Seller to the Buyer made within [***[ * ] calendar days Business Days of it being so disclosed. If any audit discloses any overpayments by the Seller to the Buyer, then the Seller shall have the right to credit the amount receipt of the overpayment against each subsequent quarterly Royalty Payment due audit report. No royalty period will be subject to the Buyer until the overpayment has been fully applied. If the overpayment is not fully applied prior to the final quarterly Royalty Payment due hereunder, the Buyer shall promptly refund an amount equal to any such remaining overpaymentaudit more than once.

Inspections and Audits of the Seller. Following the Closing, upon at least [***] Business Days written notice and during normal business hours, no more frequently than once [***] per calendar year[***], the Buyer may cause an inspection and/or audit by an independent public accounting firm reasonably acceptable to the Seller to be made of the Seller’s books of account for the [***] calendar years prior to the audit for the purpose of determining the correctness of Royalty Payments made under this Agreement. Upon the Buyer’s reasonable request, no more frequently than once [***] per calendar year [***] while any Out-License remains in effect, the Seller shall use Commercially Reasonable Efforts to exercise any rights it may have under any Out-License relating to a Product to cause an inspection and/or audit by an independent public accounting firm to be made of the books of account of any counterparty thereto for the purpose of determining the correctness of Royalty Payments made under this Agreement. All of the out-of-pocket expenses of any inspection or audit requested by the Buyer hereunder (including any audits of any Related Parties and the fees and expenses of such independent public accounting firm designated for such purpose) shall be borne solely by the Buyer, unless the independent public accounting firm determines that Royalty Payments previously paid during the period of the audit were underpaid by an amount greater than [***] of the Royalty Payments actually paid during such period, in which case such expenses shall be borne by the Seller. Any such accounting firm shall not disclose the confidential information of the Seller or any such Licensee relating to a Product to the Buyer, except to the extent such disclosure is necessary to determine the correctness of Royalty Payments or otherwise would be included in a Report or a Royalty Report. All information obtained by the Buyer as a result of any such inspection or audit shall be Confidential Information subject to ARTICLE 8. If any audit discloses any underpayments by the Seller to the Buyer, then such underpayment, underpayment shall be paid by the Seller to the Buyer within [***] calendar days of it being so disclosed. If any audit discloses any overpayments by the Seller to the Buyer, then (i) the Seller shall have the right to credit the amount of the overpayment against each subsequent quarterly Royalty Payment due to the Buyer until the overpayment has been fully applied. If , or (ii) if requested by the overpayment is not fully applied prior to the final quarterly Royalty Payment due hereunderSeller in writing, the Buyer shall promptly refund an amount equal to any such remaining overpaymentoverpayment within [***] of receipt of the Seller’s written request.