THE
TERRITORY DURING SUCH AGREEMENT MONTH.
(D)
EXCEPT AS EXPRESSLY SPECIFIED OTHERWISE, ANY AMOUNTS PAYABLE BY
ONE PARTY TO THE OTHER PARTY IN RESPECT OF ANY AGREEMENT QUARTER PURSUANT TO
THIS AGREEMENT SHALL BE PAID WITHIN FORTY-FIVE (45) DAYS AFTER THE END OF SUCH
AGREEMENT QUARTER.
SECTION 7.2
MAINTENANCE OF RECORDS.
(A)
EACH PARTY AGREES TO KEEP, FOR A PERIOD OF AT LEAST THREE YEARS
AFTER THE DATE OF ENTRY (OR SUCH LONGER PERIOD AS MAY BE REQUIRED BY LEGAL
REQUIREMENTS) FULL AND ACCURATE RECORDS MAINTAINED IN ACCORDANCE WITH SUCH
PARTY'S ACCOUNTING PRACTICES IN SUFFICIENT DETAIL TO ENABLE A THIRD PARTY TO
ACCURATELY CALCULATE (I) IN THE CASE OF DEPOMED, COGS, BLS FEES, DEPOMED'S
ADVERTISING/MARKETING/EDUCATIONAL EXPENSES, NET SALES AND DEPOMED NET SALES
REPORTED, PAYMENTS TO BE MADE UNDER THIS AGREEMENT AND DETAILS COMPLETED BY THE
DEPOMED SALES FORCE, AND (II) IN THE CASE OF KING, KING'S
ADVERTISING/MARKETING/EDUCATIONAL EXPENSES AND PDES COMPLETED BY THE KING SALES
FORCE.
UPON 30 DAYS PRIOR WRITTEN NOTICE, SUCH RECORDS SHALL BE MADE AVAILABLE
BY THE AUDITED PARTY FOR AUDIT BY AN INDEPENDENT CERTIFIED PUBLIC ACCOUNTING
FIRM DESIGNATED BY THE OTHER PARTY AND REASONABLY ACCEPTABLE TO THE PARTY WHOSE
RECORDS ARE TO BE EXAMINED.
THE AUDITOR WILL ONLY EXAMINE SUCH BOOKS AND
RECORDS DURING BUSINESS HOURS BUT NOT MORE THAN ONCE EACH FISCAL YEAR WHILE THIS
AGREEMENT REMAINS IN EFFECT AND FOR THREE YEARS THEREAFTER IN ORDER TO VERIFY
EXPENSES, NET SALES, DEPOMED NET SALES, PDES OR DETAILS COMPLETED, OR PAYMENTS
DUE UNDER THIS AGREEMENT.
THE FEES AND EXPENSES OF THE AUDITOR PERFORMING SUCH
VERIFICATION EXAMINATION SHALL BE BORNE BY THE PARTY CONDUCTING THE
VERIFICATION; PROVIDED, HOWEVER, THAT IF ANY VERIFICATION REVEALS THAT THE
AUDITED PARTY HAS REPORTED INCORRECTLY, AND THE AMOUNT OF SUCH DISCREPANCY IS AT
LEAST FIVE PERCENT OF THE AGGREGATE AMOUNT THAT SHOULD HAVE BEEN REPORTED FOR
THE PERIOD EXAMINED, THEN THE AUDITED PARTY SHALL PAY THE ENTIRE AMOUNT OF THE
FEES AND EXPENSES FOR SUCH VERIFICATION.
(B)
EACH PARTY SHALL HAVE THE RIGHT, UPON FIVE BUSINESS DAYS' PRIOR
WRITTEN NOTICE, TO AUDIT ALL APPLICABLE RECORDS OF THE OTHER PARTY (OTHER THAN
RECORDS DESCRIBED IN SECTION 7.2(A)) FOR THE PURPOSE OF DETERMINING THE AUDITED
PARTY'S COMPLIANCE WITH THE OBLIGATIONS SET FORTH IN THIS AGREEMENT, INCLUDING
WITH RESPECT TO TRAINING PROGRAMS AND CERTIFICATIONS AND RECORDS REPORTS FOR THE
SAMPLES.
THE AUDIT WILL BE CONDUCTED DURING NORMAL BUSINESS HOURS, AT
CONVENIENT TIMES.
ANY SUCH AUDIT MAY BE CONDUCTED NO MORE THAN ONCE EACH FISCAL
YEAR.
THE FEES AND EXPENSES OF THE AUDITING PARTY SHALL BE BORNE BY SUCH
PARTY.
THIS RIGHT TO AUDIT SHALL EXTEND THROUGHOUT THE TERM OF THIS AGREEMENT
AND FOR ONE YEAR AFTER EXPIRATION OR TERMINATION OF THIS AGREEMENT.
30
(C)
WHENEVER IN THIS AGREEMENT A PARTY IS REQUIRED TO REPORT ITS
COSTS, OR IS ENTITLED TO RECEIVE OR OBLIGATED TO MAKE A PAYMENT BASED ON ITS
COSTS, SUCH COSTS SHALL BE DETERMINED IN ACCORDANCE WITH GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES AS APPLIED IN THE UNITED STATES ("GAAP"), CONSISTENT WITH
THE TERMS