Common use of Accounting Records and Reports Clause in Contracts

Accounting Records and Reports. 12.1 The Licensee will maintain at its principal place of business, or such other place as may be convenient, separate accounts and records of all Net Revenue, Gross Revenue and Sublicensing Revenue, sublicenses and business conducted by the Licensee in connection with the Technology or any Improvements. These accounts and records will be prepared in sufficient detail to enable proper returns to be made as required by this Agreement, and the Licensee will use reasonable efforts to cause its Sublicensees to keep similar accounts and records. 12.2 The Licensee will complete and deliver to the Licensor: (a) within 45 days of each and every Royalty Due Date, a completed Payment Report in the form attached as Schedule “B” (or in such amended form as agreed by the Licensor and the Licensee from time to time), together with the royalty payable under this Agreement. A separate Payment Report shall be prepared and delivered for each sublicense, including an accounting statement setting out in detail how the amount of Sublicensing Revenue was determined and identifying each Sublicensee and the location of the business of each Sublicensee. The first Payment Report will be submitted within 45 days after the first Royalty Due Date after the Licensee’s receipt of the first Gross Revenue or Sublicensing Revenue, and thereafter a Payment Report shall be delivered within 45 days after each subsequent Royalty Due Date regardless of whether any Gross Revenue or Sublicensing Revenue was received in the preceding period; and (b) on or before March 31 of each year during the Term, starting on March 31, 2012, an annual report in the form attached as Schedule “C” (or in such amended form as agreed by the Licensor and the Licensee from time to time). 12.3 The calculation of royalties will be carried out in accordance with generally accepted Canadian accounting principles, or the standards and principles adopted by the U.S. Financial Accounting Standards Board, as determined by the Licensee, applied on a consistent basis. 12.4 The Licensee will retain the accounts and records referred to in Section 12.1 for at least six years from when they were made and will permit any duly authorized representative of the Licensor to inspect, at the Licensor’s expense, the accounts and records during the Licensee’s normal business hours. The Licensee will provide to the representative all reasonable evidence necessary to verify the accounts and records and will allow copies to be made of the accounts, records and agreements. If an inspection of the Licensee’s records by the Licensor shows an under-reporting or underpayment by the Licensee of any amount required to be paid to the Licensor under this Agreement by more than 5% for any 12-month period, then the Licensee will reimburse the Licensor for the cost of the inspection as well as pay to the Licensor any amount found due (including any interest) within 30 days of notice by the Licensor to the Licensee. The Licensor may not give notice to the Licensee of an inspection more than once in each any two year period, unless the Licensee has been found to be in breach of its obligations to pay royalties within such two year period. 12.5 All information provided to the Licensor or its representatives under Section 12.0 will be deemed to be Confidential Information of the Licensee and will be subject to the provisions of Section 10.0. The Licensor may use such information solely for enforcing its rights hereunder and complying with its reporting obligations to New Licensee Shareholders under an obligation of confidence.

Accounting Records and Reports. 12.1 11.1 The Licensee will shall maintain at its principal place of business, or such other place as may be most convenient, separate accounts and records of all Net Revenuebusiness done pursuant to this Agreement, Gross Revenue and Sublicensing Revenue, sublicenses and business conducted by the Licensee in connection with the Technology or any Improvements. These such accounts and records will to be prepared in sufficient detail to enable proper returns accounting to be made as required by under this Agreement, and the Licensee will use reasonable efforts to cause its shall require Sublicensees to keep similar accounts and recordsaccounts. 12.2 11.2 The Licensee will complete and shall deliver to the LicensorUniversity the following reports, subject to the confidentiality provisions of Section 11.7: 11.2.1 An annual progress report summarizing the Licensee’s activity towards commercializing the Technology due 60 days after the end of the Licensee’s fiscal year, the first report due on such date immediately following the first full year after the Effective Date until submission of a new drug application or equivalent to any regulatory agency. 11.3 Commencing within 60 days after the end of the Licensee’s fiscal year in which the first commercial sale of Product(s) occurs, and every year thereafter, the Licensee shall deliver annually to the University true and accurate reports, giving such particulars of the business conducted by the Licensee and its Sublicensees during the preceding royalty payment period as shall be pertinent to royalty accounting. These shall include at least the following: (a) within 45 days Number of each Product(s) manufactured and every Royalty Due Date, a completed Payment Report in the form attached as Schedule “B” (or in such amended form as agreed sold by the Licensor Licensee and all Sublicensees; (b) Total ▇▇▇▇▇▇▇▇ for Product(s) sold by the Licensee and all Sublicensees; (c) Deductions applicable as provided in Section 1.1.3; (d) Royalties, fees and considerations payable to the Licensee from time Sublicensees; (e) Royalties, fees and considerations payable to time), together with the royalty payable under this Agreement. A separate Payment Report shall be prepared and delivered for each sublicense, including an accounting statement setting out in detail how the amount of Sublicensing Revenue was determined and identifying each Sublicensee and the location of the business of each Sublicensee. The first Payment Report will be submitted within 45 days after the first Royalty Due Date after University from the Licensee’s receipt of the first Gross Revenue or Sublicensing Revenue, and thereafter a Payment Report shall be delivered within 45 days after each subsequent Royalty Due Date regardless of whether any Gross Revenue or Sublicensing Revenue was received in the preceding period; and (bf) on Names and addresses of all Sublicensees. 11.4 Product(s) shall be deemed to have been sold or before March 31 of each year during the Termprovided when invoiced, starting on March 31or if not invoiced, 2012when paid for. If no royalties shall be due, an annual report in the form attached as Schedule “C” (or in such amended form as agreed by the Licensor and the Licensee from time to time)shall so report. 12.3 The calculation of royalties will be carried out in accordance with generally accepted Canadian accounting principles, or the standards and principles adopted by the U.S. Financial Accounting Standards Board, as determined by the Licensee, applied on a consistent basis. 12.4 11.5 The Licensee will shall retain the accounts and records referred to in Section 12.1 11.1 above for at least six five years from when after the date upon which they were made and will shall permit any a duly authorized representative of the Licensor University to inspect, at the Licensor’s expense, the inspect such accounts and records during the Licensee’s normal business hourshours of the Licensee at the University's expense. The Licensee will provide to the representative all shall furnish such reasonable evidence as such representative will deem necessary to verify the accounts and records accounting and will allow permit such representative to make copies to be made of the or extracts from such accounts, records and agreementsagreements at the University's expense. If an Should such inspection of the Licensee’s records by lead to the Licensor shows an under-discovery of a greater than 5% discrepancy in reporting or underpayment by to the University’s detriment, Licensee agrees to pay immediately the full cost of such inspection and to make payment of any amount required to be paid outstanding sums with interest as defined in Section 11.6, without prejudice to the Licensor rights of the University subject to Section 15. 11.6 Any payments due under this Agreement by more than 5shall, if overdue, bear interest until payment at a per annum rate of 2% for above the prime rate in effect at the Bank of Montreal on the due date. The payment of such interest shall not prejudice the University in exercising any 12-month period, then the Licensee will reimburse the Licensor for the cost other rights it may have as a consequence of the inspection as well as pay lateness of any payment, including termination of this Agreement subject to the Licensor any amount found due (including any interest) within 30 days of notice by the Licensor to the Licensee. The Licensor may not give notice to the Licensee of an inspection more than once in each any two year period, unless the Licensee has been found to be in breach of its obligations to pay royalties within such two year periodSection 15. 12.5 All 11.7 During the term of this Agreement and thereafter, all information provided to the Licensor University or its representatives under pursuant to this Section 12.0 and Section 11.2 shall remain confidential and be treated as such by the University, and the University will not make the same available to any other person except as may be deemed to be Confidential Information required by law. 11.8 Notwithstanding the termination of the Licensee this Agreement, this Section 11 shall remain in full force and will be subject to the provisions of Section 10.0. The Licensor may use such information solely for enforcing its rights hereunder and complying with its reporting obligations to New Licensee Shareholders under an obligation of confidenceeffect.