Common use of Net Sales Reporting Clause in Contracts

Net Sales Reporting. (i) Purchaser shall, within 90 days following the date of the first calendar year following the date hereof, and within 90 days following each calendar year thereafter, provide to Seller a report (each, a “Net Sales Report”) setting forth, in reasonable detail, the Annual Net Sales of AL102 for each such calendar year, calculated in accordance with the definition of “Net Sales” as set forth herein; provided that Purchaser’s obligation to prepare a Net Sales Report shall terminate automatically upon payment of the Net Sales Milestone Payment under this Agreement or the CVR Agreement, as applicable. (ii) Purchaser shall keep complete and accurate, in all material respects, books and records of Net Sales of AL102 to the extent required to calculate the Net Sales Milestone Payment payable hereunder (the “Net Sales Information”) and shall maintain the Net Sales Information until one year after the last day of the calendar year to which such Net Sales Information relates. (iii) Notwithstanding anything to the contrary in this Agreement, Seller shall have 30 days after the receipt of a Net Sales Report pursuant to Section 3.3(c)(i) to dispute any of the calculations therein by providing written notice thereof (including a reasonably detailed basis thereof) to Purchaser (such notice, an “Objection Notice”). If the Seller does not deliver an Objection Notice within such 30-day period, it shall be deemed to have irrevocably consented to the applicable Net Sales Report and the calculations therein. If the Seller delivers an Objection Notice the Parties shall work in good faith to resolve such dispute. If the Parties are unable to resolve any such dispute within 30 days after Purchaser’s receipt of an Objection Notice, the matters remaining in dispute shall be submitted for resolution to a nationally recognized independent accounting firm to be mutually agreed upon by Seller and Purchaser (such agreed firm, the “Independent Expert”). The Independent Expert’s determination of Net Sales shall be within the range of values proposed by Purchaser and Seller and the Independent Expert shall make such determination in accordance with the definition of “Net Sales” and the other applicable terms of this Agreement. The Independent Expert’s decision shall be final, absent manifest error, and the costs of such Independent Expert shall be borne by the Seller if the Annual Net Sales are determined by the Independent Expert to be $100,000,000 or less and by Purchaser if the Annual Net Sales are determined by the Independent Expert to be greater than $100,000,000 and the Independent Expert’s final determination. No later than 30 days after such decision and in accordance with such decision, Purchaser shall pay any amount of any Milestone Payment owing to Seller in accordance with such decision. (iv) In the event that, following the Closing Date, Seller is wound up, liquidated or dissolved, Seller shall be entitled to designate, by written notice to Purchaser, another Person who shall be reasonably acceptable to Purchaser to enforce its rights and assume its obligations under this Section 3.3 (the “Purchaser Milestone Representative”), and such Purchaser Milestone Representative shall be a third-party beneficiary of this Agreement for purposes of this Section 3.3. The Purchaser Milestone Representative shall agree to be bound to a customary confidentiality agreement in form and substance reasonably satisfactory to Purchaser as a condition to serving in such capacity.

Net Sales Reporting. (ia) Purchaser shall, on behalf of itself and the other Payment Obligors to, (i) within 90 60 days following the date of the first calendar year First Commercial Sale of a Product by or on behalf of any Payment Obligor in the Territory and within 60 days following the date hereof, and within 90 days following first day of each calendar year Calendar Year thereafter, provide to Seller an annual budget setting forth a good faith estimate of the estimated Net Sales of the Products for such Calendar Year, together with information and documentation reasonably supporting the calculations thereof if requested by Seller (for the avoidance of doubt, neither Purchaser nor any Payment Obligor shall be deemed to have made any representation, warranty or agreement with respect to any such budget or the amount of Net Sales that shall be achieved in such Calendar Year), and (ii) within 60 days after the end of the Calendar Year in which the First Commercial Sale of a Product occurs and within 60 days after the end of each Calendar Year thereafter, deliver to Seller a report (each, a “Net Sales Report”) setting forthout, in reasonable detail, (A) the Annual aggregate gross amount invoiced by Payment Obligors for the sale of Products, (B) Net Sales, (C) a description (including amounts) of all deductions used to calculate Net Sales and the calculation thereof (with amounts deducted from the aggregate gross amount invoiced set out by subclause of AL102 for each such calendar year, calculated in accordance with the definition of “Net Sales” ”), (D) the amount of the Milestone Payments due on such Net Sales (if any), in each case ((A), (B) and (C)), in each applicable country in the Territory during the applicable period (including such amounts expressed in local currency and as set forth herein; provided that Purchaser’s obligation converted to prepare a United States dollars in accordance with Section 1.04). The Net Sales Report for each Calendar Year also shall terminate automatically upon payment detail the amount, if any, of Services Fees and Out-of-Pocket Costs (each as defined in the Transition Services Agreement) actually reimbursed to Seller under the Transition Services Agreement in excess of the Net Sales Aggregate Expense Amount (as defined in the Transition Services Agreement) that have not previously been deducted from Milestone Payments pursuant to Section 1.02(a) and the aggregate amount of such Services Fees and Out-of-Pocket Costs to be deducted from the Milestone Payment under this Agreement or the CVR Agreement, as applicableto be made for such Calendar Year (if any). (iib) Purchaser shall, and shall cause the other Payment Obligors that are engaged in the sale of Products to, keep reasonable, correct and complete and accurate, in all material respects, books and records pertaining to the sales of any Product (including with respect to Net Sales of AL102 thereof throughout the Territory) to the extent required to calculate the Net Sales and verify Milestone Payment Payments payable hereunder (the “Net Sales Information”) and shall maintain the Net Sales Information until one year five years after the last day of the calendar year Calendar Year to which such Net Sales Information relatespertains. Upon Seller’s request and subject to reasonable advance notice, Purchaser shall, and shall cause each of the other Payment Obligors engaged in the sale of any Product to, permit Seller or its Representatives to inspect their respective books and records relating to the Net Sales Reports during normal business hours in order to confirm the accuracy and completeness of the Net Sales Information and the amount of the Milestone Payments made hereunder. [***] = Portions of this exhibit have been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment requested under 17 C.F.R. Sections 200.80(b)(4) and 230.406. (iiic) Notwithstanding anything to the contrary in this Agreement, Seller shall have 30 60 days after the receipt of a Net Sales Report pursuant to Section 3.3(c)(i1.03(a) to dispute any of the calculations therein by providing written notice thereof (including a reasonably detailed basis thereoftherefor) to Purchaser (such notice, an “Objection Notice”). If the Seller does not deliver an Objection Notice within such 3060-day period, it shall be deemed to have irrevocably consented to the applicable Net Sales Report and the calculations therein. If the Seller timely delivers an Objection Notice the Parties shall work in good faith to resolve such dispute. If the Parties are unable to resolve any such dispute within 30 days after Purchaser’s receipt of an Objection Notice, the matters remaining in dispute shall be submitted for resolution to a nationally recognized independent accounting firm to be mutually agreed upon by Seller and Purchaser (such agreed firm, firm being the “Independent ExpertAccountant”). The Independent ExpertAccountant’s determination of Net Sales shall be within the range of values proposed by Purchaser and Seller and the Independent Expert Accountant shall make such determination in accordance with the definition of “Net Sales” and the other applicable terms of this Agreement. The Independent Expert’s decision of the Accountant shall be final, absent manifest error, final and the costs of such Independent Expert Accountant shall be borne by the Seller if Parties in inverse proportion to the Annual Net Sales are determined by the Independent Expert Parties’ success relative to be $100,000,000 or less and by Purchaser if the Annual Net Sales are determined by the Independent Expert to be greater than $100,000,000 their respective proposals and the Independent ExpertAccountant’s final determination. No Not later than 30 days after such decision and in accordance with such decision, Purchaser shall pay any amount of any Milestone Payment owing the additional amounts due to Seller, with interest from the date originally due as provided in Section 1.04, or Seller in accordance with such decisionshall reimburse the excess payments to Purchaser, as applicable. (ivd) In the event that, following the Closing Date, Seller is wound up, liquidated All information disclosed pursuant to Section 1.03(b) or dissolved, Seller Section 1.03(c) shall be entitled subject to designatethe confidentiality and non-use provisions set forth in Section 5.03 and the Parties shall cause the Accountant, by written notice if any, to Purchaser, another Person who shall be enter into a reasonably acceptable to Purchaser to enforce its rights and assume its obligations under this Section 3.3 (the “Purchaser Milestone Representative”), and such Purchaser Milestone Representative shall be a third-party beneficiary of this Agreement for purposes of this Section 3.3. The Purchaser Milestone Representative shall agree to be bound to a customary confidentiality agreement obligating such person to retain all financial information in form and substance reasonably satisfactory confidence pursuant to Purchaser as a condition to serving in such capacityconfidentiality agreement.

Net Sales Reporting. Within thirty (i30) Purchaser shall, within 90 days following the date of the first calendar year following the date hereofend of each Calendar Quarter, and within 90 days following each calendar year thereafter, Buyer shall provide to Seller Parent a report (each, a “Net Sales Report”) setting forth, in reasonable detail, the Annual Net Sales of AL102 for each such calendar year, calculated in accordance with the definition of “Net Sales” as set forth herein; provided that Purchaser’s obligation to prepare a Net Sales Report shall terminate automatically upon payment of the Net Sales Milestone Payment under this Agreement or the CVR Agreement, as applicable. (ii) Purchaser shall keep complete and accurate, in all material respects, books and records of Net Sales of AL102 to the extent required to calculate the Net Sales Milestone Payment payable hereunder statement (the “Net Sales InformationStatement”), showing in reasonably specific detail for such Calendar Quarter and for the period comprising such Calendar Quarter and the three (3) consecutive Calendar Quarters immediately preceding such Calendar Quarter (i) the amount of Net Sales for each Product, (ii) taking into account all appropriate deductions, an itemized calculation of Net Sales for each Product and (iii) the amount of the milestone payments due to Parent pursuant to Section 1.2(a)(i), if any. Upon Parent’s reasonable request, Buyer shall provide to Parent back-up information used to prepare such Net Sales Statement. Buyer shall keep such records (and shall maintain require its Affiliates, licensees, sublicensees, assignees and other transferees to keep such records) as shall be reasonably necessary to support the calculations of Net Sales Information until one year as set forth in each Net Sales Statement. Such records shall be available for inspection and audit by Parent or its respective authorized representatives, at reasonable times and on reasonable advance notice, for a period of three (3) years after the last day Parent’s receipt of the calendar year any Net Sales Statement to which such records relate. Each Net Sales Information relates. (iii) Notwithstanding anything Statement and all records of Buyer, its Affiliates, licensees, sublicensees, assignees and other transferees subject to the contrary in this Agreement, Seller shall have 30 days after the receipt of a Net Sales Report inspection pursuant to this Section 3.3(c)(i) to dispute any of the calculations therein by providing written notice thereof (including a reasonably detailed basis thereof) to Purchaser (such notice, an “Objection Notice”). If the Seller does not deliver an Objection Notice within such 30-day period, it 10.2 shall be deemed to have irrevocably consented be the Confidential Information of Buyer subject to the applicable confidentiality obligations of Section 9.1(f). If, as a result of any such audit or inspection, Parent reasonably concludes that Buyer has underreported the Net Sales Report for any audited period, Parent shall inform Buyer of the Net Sales for such audited period as calculated by Parent in a written notice setting forth Parent’s calculation of such Net Sales in reasonable detail. Unless and to the extent Buyer reasonably disputes Parent’s calculation of Net Sales set forth in such notice, Net Sales for such audited period shall be deemed to be the amount set forth in such notice and if, based upon such calculation, any amounts are due to Parent in accordance with Section 1.2(a)(i), Buyer will pay such amounts to Parent within ten (10) Business Days of its receipt of such notice from Parent. In the event Buyer disputes Parent’s calculation of Net Sales as set forth in such notice within thirty (30) days after receipt of such notice, Buyer will so notify Parent in writing within such thirty (30) day period and the calculations therein. If the Seller delivers an Objection Notice the Parties shall work in good faith will attempt thereafter to resolve such dispute. If dispute amicably and, if they cannot do so, they will submit the Parties are unable to resolve any such dispute within 30 days after Purchaser’s receipt of an Objection Notice, the matters remaining in dispute shall be submitted for resolution to a nationally recognized an independent third party accounting firm to be mutually agreed upon jointly selected by Seller and Purchaser the Parties (such agreed firm, the “Independent ExpertArbiter”). The decision of the Independent Expert’s determination Arbiter as to the amount of Net Sales shall be within the range of values proposed by Purchaser and Seller and the Independent Expert shall make for such determination in accordance with the definition of “Net Sales” and the other applicable terms of this Agreement. The Independent Expert’s decision audited period shall be final. Parent shall pay the cost of any such inspection and audit (including, absent manifest errorif applicable, the fees and expenses of any Independent Arbiter), unless the results of such inspection demonstrate any underreporting of Net Sales of two percent (2%) or more with respect to the period in dispute, in which event Buyer shall bear the cost of such inspection and audit and the costs of such Independent Expert shall be borne by the Seller if the Annual Net Sales are determined by the Independent Expert to be $100,000,000 or less fees and by Purchaser if the Annual Net Sales are determined by the Independent Expert to be greater than $100,000,000 and the Independent Expert’s final determination. No later than 30 days after such decision and in accordance with such decision, Purchaser shall pay any amount expenses of any Milestone Payment owing to Seller in accordance with such decisionIndependent Arbiter. (iv) In the event that, following the Closing Date, Seller is wound up, liquidated or dissolved, Seller shall be entitled to designate, by written notice to Purchaser, another Person who shall be reasonably acceptable to Purchaser to enforce its rights and assume its obligations under this Section 3.3 (the “Purchaser Milestone Representative”), and such Purchaser Milestone Representative shall be a third-party beneficiary of this Agreement for purposes of this Section 3.3. The Purchaser Milestone Representative shall agree to be bound to a customary confidentiality agreement in form and substance reasonably satisfactory to Purchaser as a condition to serving in such capacity.