Common use of Records; Audit Rights Clause in Contracts

Records; Audit Rights. Each of Shore and Santarus shall keep (and shall cause its Affiliates and shall require its sublicensees to keep) complete and accurate books and records that are necessary for the other Party to ascertain and verify the payments owed hereunder and Santarus’ expenditures to Promote the Licensed Product required under Section 5.1(b). During the Term and for a period [***] thereafter, each of Shore and Santarus shall permit an independent, certified public accountant of nationally recognized standing appointed by the other Party, at reasonable times and upon reasonable notice, but in no case more than once per Calendar Year, to examine (but not copy) such records as may be necessary for the sole purpose of verifying the calculation and reporting of Net Sales and the correctness of any payment made under this Agreement for any period within the preceding [***] and of the amount of Santarus’ expenditures to Promote the Licensed Product during each Calendar Quarter as required under Section 5.1(b) hereof and compliance with any other terms and provisions of this Agreement; provided that each Party shall only be entitled to one audit following expiration or termination of this Agreement; and provided further that neither Party shall be permitted to audit the same period of time more than once. The independent, certified public accountant will prepare and provide to each of Shore and Santarus a written report stating whether the royalty reports submitted and royalties paid, the expenditures to Promote the Licensed Product reported to Shore, or other payments made by either Party, as the case may be, are correct or incorrect and the details concerning any discrepancies. Such accountant shall disclose to Shore or Santarus, as the case may be, only the amounts that the independent auditor believes to be due and payable hereunder to such Party, details concerning any discrepancy from the amount paid and the amount due, and shall disclose no other information revealed in such audit. Any and all records of a Party examined by such independent accountant shall be deemed such Party’s Confidential Information which may not be disclosed by said independent, certified public accountant to any Third Party, and such Party may require such accountant to enter into an appropriate written agreement obligating it to be bound by obligations of confidentiality and restrictions on use of such Confidential Information that are no less restrictive than the obligations set forth in ARTICLE 10. In the event there was an underpayment by either Party of amounts owed under this Agreement, such Party shall promptly (but in no event later than [***] after its receipt of the independent auditor’s report so concluding) make payment to the other Party of any such shortfall. In the event that there was an overpayment by either Party hereunder, the other Party shall promptly (but in no event later than [***] after the other Party’s receipt of the independent auditor’s report so concluding) refund to Shore or Santarus, as the case may be, or credit to or against future royalties, at Santarus’ election, the excess amount. The expense of such audit shall be borne by the auditing Party; provided, however, that, if such audit establishes that the audited Party underpaid the auditing ***Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. Party by more than [***] of the aggregate amount due hereunder for the period covered by such audit, or that expenditures to Promote the Licensed Product for a Calendar Quarter covered by such audit were less than the minimum spend required by Section 5.1(b), then the reasonable out-of-pocket expense of such audit shall be paid by the audited Party.

Records; Audit Rights. Each of Shore WCCI and Santarus shall keep (and shall cause its Affiliates and Sublicensees shall require its sublicensees to keepkeep for three (3) years from the date of each payment of royalties complete and accurate books records of sales by WCCI and records that are necessary for its Affiliates and Sublicensees of each Product, in sufficient detail to allow the other Party accruing royalties to ascertain and verify be determined accurately. Paratek shall have the payments owed hereunder and Santarus’ expenditures to Promote the Licensed Product required under Section 5.1(b). During the Term and right for a period of three (3) years after receiving any such report or statement to appoint at its expense an independent certified public accountant (bound by written confidentiality obligations no less protective than those set forth in Article 6 hereof) reasonably acceptable to WCCI to inspect the relevant records of WCCI and its Affiliates and Sublicensees to verify such report or statement. WCCI and its Affiliates and Sublicensees shall each make its records available for inspection by such independent certified public accountant during their regular business hours at such place or places where such records are customarily kept, upon reasonable notice from Paratek, solely to verify the accuracy of the reports and payments. Such inspection right shall not be exercised by Paratek more than once in any Calendar Year nor more than once with respect to sales of any Product in any given period. Paratek agrees to hold in strict confidence, and in accordance with Portions of this Exhibit, indicated by the ▇▇▇▇ “[***] thereafter, each of Shore and Santarus shall permit an independent, certified public accountant of nationally recognized standing appointed by the other Party, at reasonable times and upon reasonable notice, but in no case more than once per Calendar Year, to examine (but not copy) such records as may be necessary for the sole purpose of verifying the calculation and reporting of Net Sales and the correctness of any payment made under this Agreement for any period within the preceding [***] and of the amount of Santarus’ expenditures to Promote the Licensed Product during each Calendar Quarter as required under Section 5.1(b) hereof and compliance with any other terms and provisions of this Agreement; provided that each Party shall only be entitled to one audit following expiration or termination of this Agreement; and provided further that neither Party shall be permitted to audit the same period of time more than once. The independent, certified public accountant will prepare and provide to each of Shore and Santarus a written report stating whether the royalty reports submitted and royalties paid, the expenditures to Promote the Licensed Product reported to Shore, or other payments made by either Party, as the case may be, are correct or incorrect and the details concerning any discrepancies. Such accountant shall disclose to Shore or Santarus, as the case may be, only the amounts that the independent auditor believes to be due and payable hereunder to such Party, details concerning any discrepancy from the amount paid and the amount due, and shall disclose no other information revealed in such audit. Any and all records of a Party examined by such independent accountant shall be deemed such Party’s Confidential Information which may not be disclosed by said independent, certified public accountant to any Third Party, and such Party may require such accountant to enter into an appropriate written agreement obligating it to be bound by obligations of confidentiality and restrictions on use of such Confidential Information that are no less restrictive than the obligations set forth in ARTICLE 10. In the event there was an underpayment by either Party of amounts owed under this Agreement, such Party shall promptly (but in no event later than [***] after its receipt of the independent auditor’s report so concluding) make payment to the other Party of any such shortfall. In the event that there was an overpayment by either Party hereunder, the other Party shall promptly (but in no event later than [***] after the other Party’s receipt of the independent auditor’s report so concluding) refund to Shore or Santarus, as the case may be, or credit to or against future royalties, at Santarus’ election, the excess amount. The expense of such audit shall be borne by the auditing Party; provided, however, that, if such audit establishes that the audited Party underpaid the auditing ***Certain information on this page has been ],” were omitted and have been filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect Secretary of the Commission pursuant to the omitted portionsRegistrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended. Party Article 6 hereof, all information concerning such payments and reports, and all information learned in the course of any audit or inspection, except to the extent necessary for Paratek to reveal such information in order to enforce its rights under this Agreement or if disclosure is required by law. The results of each inspection, if any, shall be binding on both Parties, absent manifest error. Paratek shall pay for such inspections, except that in the event there is any upward adjustment in the aggregate royalties, payable for any Calendar Year shown by such inspection of more than [***] five percent (5%) of the aggregate amount due hereunder paid, WCCI shall pay for the period covered by such audit, or that expenditures to Promote the Licensed Product for a Calendar Quarter covered by such audit were less than the minimum spend required by Section 5.1(b), then the reasonable out-of-pocket expense costs of such audit shall be paid by the audited Partyinspection.

Records; Audit Rights. Each of Shore and Santarus Party shall keep and maintain for three (3) years records of Development Costs and Commercialization Costs incurred with respect to the Product, and, in ELAN's case, Operating Income (Loss), Sublicense Income, and Net Sales or Opt Out Net Sales of the Product in sufficient detail to enable tracking of such Development Costs, Commercialization Costs, Operating Income (Loss), Net Sales or Opt Out Net Sales and Sublicense Income and to allow confirmation of same by the other Party. Each Party shall cause have the right for a period of ("deleted text") after such Development Costs and Commercialization Costs, Sublicense Income, Net Sales, Opt Out Net Sales or Operating Income (Loss) are incurred to appoint at its Affiliates and shall require its sublicensees expense an independent certified public accountant reasonably acceptable to keep) complete and accurate books and records that are necessary for the other Party to ascertain audit the relevant records of the other Party and its Affiliates to verify that the payments owed hereunder amounts of such Development Costs and Santarus’ expenditures to Promote the Licensed Product required under Section 5.1(bCommercialization Costs, Operating Income (Loss), Sublicense Income, Opt Out Net Sales or Net Sales were correctly determined. During the Term The audited Party and its Affiliates shall each make its records available for a period [***] thereafter, each of Shore and Santarus shall permit an independent, audit by such independent certified public accountant of nationally recognized standing appointed during regular business hours at such place or places where such records are customarily kept, upon ("deleted text") written notice from the auditing Party, solely to verify that such Development Costs and Commercialization Costs, Operating Income (Loss), Sublicense Income, Net Sales, or Opt Out Net Sales were correctly determined. Such audit right shall not be exercised by the other Party, at reasonable times and upon reasonable notice, but in no case auditing Party more than once per in any Calendar Year, to examine (but not copy) such records as Year and no period may be necessary for the sole purpose of verifying the calculation and reporting of Net Sales and the correctness of any payment made under this Agreement for any period within the preceding [***] and of the amount of Santarus’ expenditures to Promote the Licensed Product during each Calendar Quarter as required under Section 5.1(b) hereof and compliance with any other terms and provisions of this Agreement; provided that each Party shall only be entitled to one audit following expiration or termination of this Agreement; and provided further that neither Party shall be permitted to audit the same period of time audited more than once. The independent, certified public accountant will prepare and provide to each of Shore and Santarus a written report stating whether the royalty reports submitted and royalties paid, the expenditures to Promote the Licensed Product reported to Shore, or other payments All records made by either Party, as the case may be, are correct or incorrect and the details concerning any discrepancies. Such accountant shall disclose to Shore or Santarus, as the case may be, only the amounts that the independent auditor believes to be due and payable hereunder to such Party, details concerning any discrepancy from the amount paid and the amount due, and shall disclose no other information revealed in such audit. Any and all records of a Party examined by such independent accountant available for audit shall be deemed such Party’s to be Confidential Information which may not of the audited Party. The results of each audit, if any, shall be disclosed by said independent, certified public accountant reported in writing to any Third Party, and such Party may require such accountant to enter into an appropriate written agreement obligating it to be bound by obligations of confidentiality and restrictions on use of such Confidential Information that are no less restrictive than the obligations set forth in ARTICLE 10. In the event there was an underpayment by either Party of amounts owed under this Agreement, such Party shall both Parties promptly (but in no event later than [***] ("deleted text") after its the audit and shall be binding on both Parties. In the event there was an error in the amount of Development Costs, Commercialization Costs, or Operating Income (Loss) reported by the audited Party hereunder, (a) if the amount of such costs or payments was over reported, the audited Party shall promptly (but in any event no later than ("deleted text") after the audited Party's receipt of the independent auditor’s report so concluding) make payment to the other auditing Party of any the amount required to achieve the appropriate sharing of such shortfall. In costs and (b) if the event that there amount of such costs, or income or loss was an overpayment by either Party hereunderunder reported, the other auditing Party shall promptly (but in any event no event later than [***] ("deleted text") after the other auditing Party’s 's receipt of the independent auditor’s report so concluding) refund make payment to Shore the audited Party of the amount required to achieve the appropriate sharing of such costs or Santarus, as the case may be, income or credit to or against future royalties, at Santarus’ election, the excess amountloss. The expense auditing Party shall bear the full cost of such audit unless such audit discloses an under-payment by the audited Party of more than("deleted text") of the relevant amount of Development Costs and Commercialization Costs, Operating Income (Loss), or royalties in any Calendar Year, in which case the audited Party shall be borne reimburse the auditing Party for all costs incurred by the auditing Party; provided, however, that, if such audit establishes that the audited Party underpaid the auditing ***Certain information on this page has been omitted and filed separately in connection with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. Party by more than [***] of the aggregate amount due hereunder for the period covered by such audit. If the discrepancy is an under-payment of royalties to WARATAH, or that expenditures to Promote the Licensed Product for a Calendar Quarter covered by such audit were less than the minimum spend required by Section 5.1(b), then the reasonable out-of-pocket expense amount of such audit underpayment shall be paid by to WARATAH within ("deleted text") of receiving a copy of the audited Partyaudit report. If the discrepancy is an over-payment of royalties to WARATAH, the amount of such over-payment of royalties shall be paid to ELAN within ("deleted text") of receiving a copy of the audit report.

Records; Audit Rights. Each of Shore Party will keep, and Santarus shall keep (and shall cause its Affiliates and shall require its sublicensees to keep) complete and accurate books and records that are necessary for the other Party to ascertain and verify the payments owed hereunder and Santarus’ expenditures to Promote the Licensed Product required under Section 5.1(b). During the Term and maintain for a period of [**] following the end of a Calendar Year, accurate records in sufficient detail to enable royalties, Operating Profits (Losses), Research Costs, and Development Costs under this Agreement for such Calendar Year to be determined. In addition, Lexicon shall retain such records for such longer period of time as necessary to support an audit by Genentech of Research Costs and Development Costs reimbursable by Genentech upon exercise of an IND Opt-In or Phase II Opt-In pursuant to Section 4.6. A Party shall have the right, upon at least [**] thereafter, each of Shore and Santarus shall permit an independent, certified public accountant of nationally recognized standing appointed by prior written notice to the other Party, at reasonable times and upon reasonable notice, but in no case not more than once per in any Calendar Year, through an independent certified public accountant acceptable to examine the other Party (but which acceptance shall not copybe unreasonably refused) such to have access during normal business hours to those records of the other Party as may be reasonably necessary for to verify the sole purpose accuracy of verifying the calculation and reporting of Net Sales and the correctness of any payment made royalty reports furnished by such other Party under this Agreement for any period within the preceding [***] and of the amount of Santarus’ expenditures to Promote the Licensed Product during each previous Calendar Quarter as required under Section 5.1(b) hereof and compliance with any other terms and provisions of this Agreement; provided that each Party shall only be entitled to one audit following expiration or termination of this Agreement; and provided further that neither Party shall be permitted Years subject to audit hereunder, or for the same period verification of time more than onceroyalties, Operating Profits (Losses), Research Costs and Development Costs. Prior to implementing an audit, the auditing Party agrees to submit an audit plan, including audit scope, to the other Party for approval (which shall not be unreasonably withheld). The independent, independent certified public accountant will prepare be instructed to provide an audit report containing its conclusions regarding the audit, and provide to each of Shore and Santarus a written report stating specifying whether the royalty reports submitted and royalties paidamounts paid were correct, and, if incorrect, the expenditures amount of any underpayment or overpayment. The independent certified public accountant further will be instructed to Promote provide that audit report first to the Licensed Product reported to Shore, or other payments made by either Party, as the case may be, are correct or incorrect and the details concerning any discrepancies. Such accountant shall disclose to Shore or Santarus, as the case may be, only the amounts that the independent auditor believes to be due and payable hereunder to such Party, details concerning any discrepancy from the amount paid and the amount dueParty being audited, and shall disclose no will be further instructed to redact any of that Party's proprietary information that is not relevant to the calculation of royalties, Operating Profits (Losses), Research Costs and/or Development Costs prior to providing that audit report to the other information revealed in such auditParty. Any and all records of a Party examined by such independent accountant That audit report shall be deemed such Party’s to be Confidential Information which may not be disclosed by said independentof the Party subject to the audit, and used only for purposes germane to this Section. The Party being audited shall have the right, at its own expense, to have its own independent certified public accountant to any Third Party, review and such Party may require such accountant to enter into an appropriate written agreement obligating it to be bound by obligations of confidentiality and restrictions on use of such Confidential Information that are no less restrictive than confirm the obligations set forth in ARTICLE 10. In the event there was an underpayment by either Party of amounts owed under this Agreement, such Party shall promptly (but in no event later than [***] after its receipt of the independent auditor’s report so concluding) make payment to the other Party results of any such shortfallaudit performed by the auditing Party's accountants. In the event that there was an overpayment by either Party hereunderthe Parties' accountants do not agree as to the results of the audit, the other Parties agree that such accountants shall attempt in good faith to resolve any discrepancies between their results according to GAAP and the terms of this Agreement. In the event that the Parties' accountants cannot resolve any discrepancies within a reasonable amount of time, such dispute shall be resolved by the Parties pursuant to Article 14:. The Party shall promptly (but in no event later than requesting an audit is solely responsible for all the expenses of an audit, unless the independent certified public accountant's report correctly shows any underpayment exceeding [***] after the other Party’s receipt of amounts due hereunder. If the independent auditor’s certified public accountant's report so concluding) refund to Shore or Santarus, as the case may be, or credit to or against future royalties, at Santarus’ election, the excess amount. The expense correctly shows an underpayment of such audit shall be borne by the auditing Party; provided, however, that, if such audit establishes that the audited Party underpaid the auditing ***Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. Party by more than [**], the Party being audited shall be responsible for the reasonable expenses incurred by the auditing Party for the independent certified public accountant's services. If the independent certified public accountant's report correctly shows any underpayment, the Party being audited shall remit to the other Party within [**] after receipt of such report: (i) the amount of such underpayment; (ii) interest on the amount being paid in (i), which interest shall be calculated pursuant to Section 8.23; and (iii) if such underpayment exceeds [**], the reasonable expenses incurred by the auditing Party for the independent certified public accountant's services. If the independent certified public accountant's report correctly shows any overpayment, such overpayment shall be fully creditable against future payments due hereunder, or if no additional payments are due hereunder shall be reimbursed to the overpaying Party within [**] of that Party's receipt of the aggregate amount due hereunder for the period covered by such auditindependent certified public accountant's report. The calculation of royalties payable, or that expenditures Operating Profits (Losses), Research Costs and Development Costs with respect to Promote the Licensed Product for a Calendar Quarter covered by such audit were less than Year will be binding and conclusive on the minimum spend required by Section 5.1(b), then Parties upon the reasonable out-of-pocket expense expiration of [**] following the end of such Calendar Year, unless (i) an audit shall be paid by of such Calendar Year, initiated before the audited expiration of such [**] period, is on-going or (ii) a Party has, in good faith and through written notice to the other Party, disputed such calculation before the expiration of such [**] period or, if applicable, within [**] after receipt of the audit report.

Records; Audit Rights. Each of Shore and Santarus Oral DNA shall keep (and shall cause its Affiliates maintain, and shall require its sublicensees respective Affiliates and Sublicensees to keep) keep and maintain, such accurate and complete and accurate books and records that in connection with the sale of Licensed Products hereunder, as are necessary for to allow the other Party accurate calculation consistent with generally accepted accounting principles of the Product Payments due to ascertain ILI. ILI shall have the right to engage an independent certified public accounting firm reasonably acceptable to Oral DNA, which shall have the right to audit the relevant books and records of Oral DNA as may be reasonably necessary to determine and/or verify the payments owed hereunder amount of Product Payments due hereunder. Such examination shall be conducted, and Santarus’ expenditures to Promote the Licensed Product required under Section 5.1(b). During the Term and for a period [***] thereafterOral DNA shall make its records available, each of Shore and Santarus shall permit an independent, certified public accountant of nationally recognized standing appointed by the other Party, during normal business hours upon at reasonable times and upon reasonable least fifteen (15) days prior written notice, but in no case which shall take place at the facility(ies) where such records are maintained. Such audit rights shall not be exercised by ILI more than once per Calendar Year, . Each such audit shall be limited to examine (but not copy) such pertinent books and records as may be necessary for the sole purpose of verifying the calculation and reporting of Net Sales and the correctness of any payment made under this Agreement for any period within year ending not more than thirty six (36) months prior to the preceding [***] and date of the amount of Santarus’ expenditures to Promote the Licensed Product during each Calendar Quarter as required under Section 5.1(b) hereof and compliance with any other terms and provisions of this Agreementrequest; provided that each Party provided, that, ILI shall only be entitled to one audit following expiration or termination of this Agreement; and provided further that neither Party shall not be permitted to audit the same period of time more than once. The independent, certified public accountant independent accounting firm will prepare and provide to each of Shore and Santarus Party a written report stating whether the royalty reports submitted and royalties paid, the expenditures to Promote the Licensed Product reported to Shore, or other payments made by either Party, as the case may be, Payments paid are correct or incorrect and the specific details concerning any discrepancies and may not reveal to ILI any information learned in the course of such audit other than the amount of any such discrepancies. Such accountant shall disclose ILI agrees to Shore hold in strict confidence all information disclosed to it, except to the extent necessary for ILI to enforce its rights under this Agreement or Santarus, as the case may be, only the amounts that the independent auditor believes to be due and payable hereunder to such Party, details concerning any discrepancy from the amount paid and the amount due, and shall disclose no other information revealed in such audit. Any and all records of a Party examined if disclosure is required by such independent accountant shall be deemed such Party’s Confidential Information which may not be disclosed by said independent, certified public accountant to any Third Party, and such Party may require such accountant to enter into an appropriate written agreement obligating it to be bound by obligations of confidentiality and restrictions on use of such Confidential Information that are no less restrictive than the obligations set forth in ARTICLE 10Applicable Laws. In the event there was an underpayment by either Party of amounts owed under this AgreementOral DNA hereunder, such Party Oral DNA shall promptly (but in no event later than [***] thirty (30) days after its such Party’s receipt of the independent auditor’s report so correctly concluding) make payment to the other Party ILI of any such shortfall. In the event that there was an overpayment by either Party Oral DNA hereunder, the other Party ILI shall promptly (but in no event later than [***] thirty (30) days after the other PartyILI’s receipt of the independent auditor’s report so correctly concluding) refund to Shore or Santarus, as the case may be, or credit to or against future royalties, at Santarus’ election, Oral DNA the excess amount. The expense ILI shall bear the full cost of such audit shall be borne by the auditing Party; provided, however, that, if unless such audit establishes that the audited Party underpaid the auditing ***Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. Party discloses an underreporting by Oral DNA of more than [***] five percent (5%) of the aggregate amount due hereunder of Product Payments in any twelve (12) month period, in which case, Oral DNA shall reimburse ILI for the period covered all costs incurred by ILI in connection with such examination and audit, or that expenditures to Promote the Licensed Product for a Calendar Quarter covered by such audit were less than the minimum spend required by Section 5.1(b), then the reasonable out-of-pocket expense of such audit shall be paid by the audited Party.