Receiving Party should have invoiced the Royalty
Paying Party and the date the Royalty Receiving Party actually invoices the
Royalty Paying Party.
8.5
Financial Records.
The Parties shall keep complete and accurate
books and records in accordance with the defined Accounting Standards. The
parties will keep such books and records for at least *** following the end of
the Calendar Year to which they pertain. Such books of accounts shall be kept at
the principal place of business of the financial personnel with responsibility
for preparing and maintaining such records.
With respect to royalties, such
records shall be in sufficient detail to support calculations of royalties due
to either Party.
Novartis and Incyte shall also keep complete and accurate
records and books of accounts containing all data reasonably required for the
calculation and verification of Development Costs, including internal FTEs
utilized by either Party in jointly funded Clinical Trials or other Development
activities and any amounts that are subject to reimbursement pursuant to
Section 6.3(b)(ii).
8.6
Audits.
(A)
EACH PARTY MAY, UPON REQUEST AND AT ITS EXPENSE (EXCEPT AS
PROVIDED FOR HEREIN), CAUSE AN INTERNATIONALLY-RECOGNIZED INDEPENDENT ACCOUNTING
FIRM SELECTED BY IT (EXCEPT ONE TO WHOM THE AUDITEE HAS A REASONABLE OBJECTION),
(THE "AUDIT TEAM") TO AUDIT DURING ORDINARY BUSINESS HOURS THE BOOKS AND RECORDS
OF THE OTHER PARTY AND THE CORRECTNESS OF ANY PAYMENT MADE OR REQUIRED TO BE
MADE TO OR BY SUCH PARTY, AND ANY REPORT UNDERLYING SUCH PAYMENT (OR LACK
THEREOF), PURSUANT TO THE TERMS OF THIS AGREEMENT. PRIOR TO COMMENCING ITS WORK
PURSUANT TO THIS AGREEMENT, THE AUDIT TEAM SHALL ENTER INTO AN APPROPRIATE
CONFIDENTIALITY AGREEMENT WITH THE AUDITEE.
(B)
IN RESPECT OF EACH AUDIT OF THE AUDITEE'S BOOKS AND RECORDS:
(I) THE AUDITEE MAY BE AUDITED ONLY ***, (II) NO RECORDS FOR ANY GIVEN YEAR FOR
AN AUDITEE MAY BE AUDITED MORE THAN ***; PROVIDED THAT THE AUDITEE'S RECORDS
SHALL STILL BE MADE AVAILABLE IF SUCH
58
*** Confidential material redacted and filed separately with the Commission.
RECORDS IMPACT ANOTHER FINANCIAL YEAR WHICH IS BEING AUDITED, (III) THE AUDIT
RIGHTS HOLDER SHALL ONLY BE ENTITLED TO AUDIT BOOKS AND RECORDS OF AN AUDITEE
FROM THE *** PRIOR TO THE CALENDAR YEAR IN WHICH THE AUDIT REQUEST IS MADE.
(C)
IN ORDER TO INITIATE AN AUDIT FOR A PARTICULAR CALENDAR YEAR,
THE AUDIT RIGHT HOLDER MUST PROVIDE WRITTEN NOTICE TO THE AUDITEE. THE AUDIT
RIGHTS HOLDER EXERCISING ITS AUDIT RIGHTS SHALL PROVIDE THE AUDITEE WITH NOTICE
OF ONE OR MORE PROPOSED DATES OF THE AUDIT NOT LESS THAN *** PRIOR TO THE FIRST
PROPOSED DATE.
THE AUDITEE WILL REASONABLY ACCOMMODATE THE SCHEDULING OF SUCH
AUDIT.
THE AUDITEE SHALL PROVIDE SUCH AUDIT TEAM(S) WITH FULL AND COMPLETE
ACCESS TO THE APPLICABLE BOOKS AND RECORDS AND OTHERWISE REASONABLY COOPERATE
WITH SUCH AUDIT.
(D)
THE AUDIT REPORT AND BASIS FOR ANY DETERMINATION BY AN AUDIT
TEAM SHALL BE MADE AVAILABLE FIRST FOR REVIEW AND COMMENT BY THE AUDITEE, AND
THE AUDITEE SHALL HAVE THE RIGHT, AT ITS EXPENSE,