Common use of Payment Records and Audits Clause in Contracts

Payment Records and Audits. 3.5.1 TACTIC shall, and shall contractually require all Third Parties selling Products on its behalf to, keep complete and accurate books of account for, and records of Net Sales of, Product in sufficient detail to enable the milestone payments payable under this Agreement to be determined 3.5.2 Upon the written request of XOMA, TACTIC shall permit an independent auditor appointed by XOMA and reasonably acceptable to TACTIC to have access during normal business hours to such of the records of TACTIC and its Affiliates as may be reasonably necessary to verify the accuracy of the Net Sales under this Agreement. The auditor shall only disclose to XOMA whether the Net Sales reported are correct or incorrect and the amount of any discrepancy. No other information shall be provided to XOMA without the prior consent of TACTIC unless disclosure is required by law, regulation or judicial order. If XOMA determines that disclosure is required by law, regulation or judicial order, it shall give TACTIC reasonable prior notice thereof in order for TACTIC to seek a protective order against or limiting such disclosure. TACTIC is entitled to require the auditor to execute a reasonable confidentiality agreement prior to commencing any such audit. Any agreement between TACTIC and/or any of its Affiliates, on the one hand, and one or more Third Parties, on the other hand, pursuant to which such Third Party may market and/or sell Product shall contain provisions for access and inspection of records substantially similar to the foregoing. [***] = Confidential Information has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been approved with respect to the omitted information, pursuant to an Order dated January 8, 2018. 3.5.3 Audits conducted under this Section 3.5 shall be at the expense of XOMA unless an unpaid amount for the full period covered by the audit is identified, in which case all reasonable out-of-pocket costs incurred by the auditor to perform the audit will be paid promptly by TACTIC. Any unpaid amounts discovered by such inspections or otherwise will be paid promptly by TACTIC, with interest on such amounts from the date(s) such amount(s) were due, at a rate equal to the lesser of the prime rate reported by the Bank of America plus [***] per annum, or the highest interest rate permitted under applicable New York law.

Payment Records and Audits. 3.5.1 TACTIC shall, and shall contractually require all Third Parties selling Products on its behalf to, keep complete and accurate books of account for, and records of Net Sales of, Product in sufficient detail to enable the milestone payments payable under this Agreement to be determined 3.5.2 Upon the written request of XOMA, TACTIC shall permit an independent auditor appointed by XOMA and reasonably acceptable to TACTIC to have access during normal business hours to such of the records of TACTIC and its Affiliates as may be reasonably necessary to verify the accuracy of the Net Sales under this Agreement. The auditor shall only disclose to XOMA whether the Net Sales reported are correct or incorrect and the amount of any discrepancy. No other information shall be provided to XOMA without the prior consent of TACTIC unless disclosure is required by law, regulation or judicial order. If XOMA determines that disclosure is required by law, regulation or judicial order, it shall give TACTIC reasonable prior notice thereof in order for TACTIC to seek a protective order against or limiting such disclosure. TACTIC is entitled to require the auditor to execute a reasonable confidentiality agreement prior to commencing any such audit. Any agreement between TACTIC and/or any of its Affiliates, on the one hand, and one or more Third Parties, on the other hand, pursuant to which such Third Party may market and/or sell Product shall contain provisions for access and inspection of records substantially similar to the foregoing. [***] = Confidential Information has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been approved requested with respect to the omitted information, pursuant to an Order dated January 8, 2018. 3.5.3 Audits conducted under this Section 3.5 shall be at the expense of XOMA unless an unpaid amount for the full period covered by the audit is identified, in which case all reasonable out-of-pocket costs incurred by the auditor to perform the audit will be paid promptly by TACTIC. Any unpaid amounts discovered by such inspections or otherwise will be paid promptly by TACTIC, with interest on such amounts from the date(s) such amount(s) were due, at a rate equal to the lesser of the prime rate reported by the Bank of America plus [***] per annum, or the highest interest rate permitted under applicable New York law.

Payment Records and Audits. 3.5.1 TACTIC (a) Merck shall, and shall contractually require all Third Parties selling Products on its behalf Merck Selling Entities to, keep complete complete, true and accurate books of account for, and records of Net Sales of, Merck Product in sufficient detail to enable the milestone payments royalties payable under this Agreement to be determineddetermined for at least [*] following the end of the calendar quarter after such Net Sales occur. 3.5.2 (b) Upon the written request of XOMAXOMA and not more than [*], TACTIC Merck shall permit an independent internationally recognized auditor appointed by XOMA and reasonably acceptable to TACTIC Merck to have access during normal business hours to such of the records of TACTIC and its Affiliates Merck as may be reasonably necessary to verify the accuracy of the Net Sales royalty reports under this AgreementAgreement for [*] ending not more than [*] prior to the date of such request. The auditor shall only disclose to XOMA whether the Net Sales reported royalty reports are correct or incorrect and the amount of any discrepancy. No other information shall be provided to XOMA without the prior consent of TACTIC Merck unless disclosure is required by law, regulation or judicial order. If XOMA determines that disclosure is required by law, regulation or judicial order, it shall give TACTIC reasonable Merck prior notice thereof in order reasonably sufficient for TACTIC Merck to seek a protective order against or limiting such disclosure. TACTIC Merck is entitled to require the auditor to execute a reasonable confidentiality agreement prior to commencing any such audit. Any agreement between TACTIC and/or any of its Affiliates, on the one hand, and one or more Third Parties, on the other hand, pursuant to which such Third Party may market and/or sell Product shall contain provisions for access and inspection of records substantially similar to the foregoing. [***] = Confidential Information has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been approved with respect to the omitted information, pursuant to an Order dated January 8, 2018. 3.5.3 (c) Audits conducted under this Section 3.5 4.11 shall be at the expense of XOMA XOMA, unless an unpaid underpayment exceeding [*] United States Dollars ($[*]) and [*] percent ([*]%) of the amount stated for the full period covered by the audit is identified, in which case all reasonable out-of-pocket costs incurred by the auditor to perform the audit will be paid promptly by TACTICMerck. Any underpayments or unpaid amounts discovered by such inspections or otherwise will be paid promptly by TACTICMerck, with interest on such amounts from the date(s) such amount(s) were due, at a rate equal to the lesser of the prime rate reported by the Bank of America plus [***] per annum]. In the event of an overpayment by Merck, or the highest interest rate permitted under applicable New York lawMerck shall be entitled to a credit on any subsequent payment due to XOMA.