(60) DAYS OF THE END OF EACH
SNT FISCAL QUARTER, SNT SHALL PROVIDE VTAL WITH A WRITTEN REPORT INDICATING THE
NET SALES OF PRODUCTS BY SNT, AS WELL AS OTHER REASONABLY DETAILED INFORMATION
SUPPORTING THE AMOUNT OF ANY NON-NET SALES BASED PAYMENTS DUE TO VTAL BY THE
TERMS OF ANY PRODUCT PLAN, IN RELATION TO SUCH QUARTER, AND SHALL SIMULTANEOUSLY
PAY TO VTAL ALL NET SALES BASED AND NON-NET SALES BASED AMOUNTS DUE WITH RESPECT
TO SUCH FISCAL QUARTER.
WITHIN SIXTY (60) DAYS OF THE END OF EACH VTAL FISCAL
QUARTER, VTAL SHALL PROVIDE SNT WITH REASONABLY DETAILED INFORMATION SUPPORTING
THE AMOUNT OF ANY PAYMENTS DUE TO SNT BY THE TERMS OF ANY PRODUCT PLAN IN
RELATION TO SUCH QUARTER, AND SHALL SIMULTANEOUSLY PAY TO SNT SUCH AMOUNTS.
4.2
RECORDS.
EACH PARTY AGREES TO KEEP ACCURATE WRITTEN RECORDS
SUFFICIENT IN DETAIL AND WHERE APPLICABLE IN ACCORDANCE WITH GAAP, TO ENABLE THE
VERIFICATION AND AUDIT OF ANY PAYMENTS DUE THE OTHER UNDER EACH PRODUCT PLAN.
SUCH RECORDS SHALL BE RETAINED BY EACH PARTY FOR A PERIOD OF NOT LESS THAN THREE
(3) YEARS AFTER EACH SUCH QUARTER.
4.3
AUDIT OF RECORDS.
UPON REASONABLE NOTICE AND DURING REGULAR
BUSINESS HOURS, EACH PARTY (THE "AUDITED PARTY") SHALL FROM TIME TO TIME (BUT NO
MORE FREQUENTLY THAN ONCE ANNUALLY) MAKE
6
AVAILABLE ITS RECORDS REFERRED TO IN ARTICLE 4.2 FOR AUDIT BY INDEPENDENT
CERTIFIED PUBLIC ACCOUNTING REPRESENTATIVES SELECTED BY SUCH OTHER PARTY AND
REASONABLY ACCEPTABLE TO THE AUDITED PARTY, AT SUCH OTHER'S EXPENSE, TO VERIFY
THE ACCURACY OF THE REPORTS PROVIDED BY THE AUDITED PARTY HEREUNDER.
SUCH
REPRESENTATIVES SHALL EXECUTE A SUITABLE CONFIDENTIALITY AGREEMENT REASONABLY
ACCEPTABLE TO THE AUDITED PARTY PRIOR TO CONDUCTING SUCH AUDIT.
IF
UNDER-PAYMENT OR UNDER-REPORTING RESULTING IN UNDER-PAYMENT OF ROYALTIES IS
VERIFIED DURING ANY AUDIT IN AN AMOUNT IN EXCESS OF FIVE PERCENT (5%) OF THE
TOTAL AMOUNT DUE, THEN THE AUDITED PARTY SHALL (I) REIMBURSE THE OTHER PARTY FOR
THE COST OF SUCH AUDIT AND (II) PAY TO THE OTHER PARTY THE AMOUNT FOUND TO BE
DUE BY SUCH INDEPENDENT CERTIFIED PUBLIC ACCOUNTING REPRESENTATIVES TOGETHER
WITH INTEREST FROM THE DATE DUE UNTIL THE DATE OF PAYMENT AT A RATE OF ONE
PERCENT (1%) PER MONTH.
ARTICLE 5
REPRESENTATIONS, WARRANTIES, DISCLAIMERS AND LIMITATIONS
5.1
REPRESENTATIONS OF VTAL.
VTAL REPRESENTS, WARRANTS AND COVENANTS
TO SNT THAT:
(A)
VTAL IS A CORPORATION DULY ORGANIZED, VALIDLY EXISTING, AND IN
GOOD STANDING UNDER THE LAWS OF THE STATE OF MINNESOTA AND HAS FULL COMPANY
POWER TO CONDUCT THE BUSINESS IN WHICH IT IS PRESENTLY ENGAGED AND TO ENTER INTO
AND PERFORM ITS OBLIGATIONS UNDER THIS AGREEMENT.
(B)
VTAL HAS TAKEN ALL NECESSARY COMPANY ACTION UNDER THE LAWS OF THE
STATE OF ITS ORGANIZATION AND ITS ARTICLES OF ORGANIZATION AND OPERATING
AGREEMENT TO AUTHORIZE THE EXECUTION AND CONSUMMATION OF THIS AGREEMENT AND,
WHEN EXECUTED AND DELIVERED BY VTAL, THIS AGREEMENT SHALL CONSTITUTE THE VALID
AND LEGALLY BINDING AGREEMENT OF VTAL ENFORCEABLE AGAINST VTAL IN ACCORDANCE
WITH THE TERMS HEREOF, SUBJECT TO BANKRUPTCY, INSOLVENCY, FRAUDULENT