Common use of FDA Audit Clause in Contracts

FDA Audit. PHMD has represented to the U.S. Food and Drug Administration (the “FDA”) that the observations contained in the Form 483 report dated June 16, 2015 will be remediated and finalized within the timeframes proposed by PHMD to the FDA. To the extent that such remediation actions are under the control of PHMD, PHMD shall be responsible for taking such remediation actions. To the extent that such remediation actions are under the control of Purchaser, Purchaser will use commercially reasonable efforts to take such actions; provided, that in no event shall Purchaser incur any out-of-pocket costs and expenses as a result thereof unless they are reimbursed by PHMD. If (a) such observations are not remediated within such timeframes to the satisfaction of the FDA, (b) the remediation of such observations is otherwise unsatisfactory to the FDA (in either (a) or (b), other than as a result of Purchaser failing to use commercially reasonable efforts to take such remediation actions that are under its control but subject to the limit on out-of-pocket costs and expenses stated above) or (c) the steps necessary to remediate are other than as represented by PHMD to Purchaser, PHMD shall be responsible for any and all out-of-pocket costs and expenses resulting from such failure and/or unanticipated circumstances.

FDA Audit. PHMD has represented to the U.S. Food and Drug Administration (the “"FDA”") that the observations contained in the Form 483 report dated June 16, 2015 will be remediated and finalized within the timeframes proposed by PHMD to the FDA. To the extent that such remediation actions are under the control of PHMD, PHMD shall be responsible for taking such remediation actions. To the extent that such remediation actions are under the control of Purchaser, Purchaser will use commercially reasonable efforts to take such actions; provided, that in no event shall Purchaser incur any out-of-pocket costs and expenses as a result thereof unless they are reimbursed by PHMD. If (a) such observations are not remediated within such timeframes to the satisfaction of the FDA, (b) the remediation of such observations is otherwise unsatisfactory to the FDA (in either (a) or (b), other than as a result of Purchaser failing to use commercially reasonable efforts to take such remediation actions that are under its control but subject to the limit on out-of-pocket costs and expenses stated above) or (c) the steps necessary to remediate are other than as represented by PHMD to Purchaser, PHMD shall be responsible for any and all out-of-pocket costs and expenses resulting from such failure and/or unanticipated circumstances.