Initial Materials Consumption True-Up Sample Clauses

Initial Materials Consumption True-Up. (i) On the first day of the third Calendar Quarter of each year during the Term, (A) Novasep shall provide a report to Inspire detailing for the immediately preceding calendar year: (1) a summary of the past year’s production history under this Agreement, including without limitation all batches of API produced (including Nonconforming API and Short Batches); (2) the total amount of Initial Materials (100% dCMP (2’-deoxycytidine 5’-monophosphate)) consumed in the manufacture under this Agreement of API delivered by Novasep to Inspire that is not Nonconforming API, excluding any Initial Materials consumed in the manufacture of any Short Batches (the “Consumption Amount”); and (3) the total amount of API delivered under this Agreement by Novasep to Inspire that is not Nonconforming API, excluding any Short Batches (the “Production Amount”), and (B) Inspire shall provide a report to Novasep detailing for the immediately preceding calendar year the average price at which Inspire procured the Initial Materials provided to Novasep for such manufacture on a per-kg basis (the “Average Initial Materials Price”). Without limiting Section 8.2, Inspire shall have the right, in Inspire’s discretion and upon reasonable notice, to conduct such inspections and audits as it deems appropriate with respect to any documentation and related information concerning any amounts of Initial Materials or API stated in the report provided by Novasep. If Novasep has good faith concerns regarding the report provided by Inspire, then upon reasonable notice, Novasep shall be permitted to have a representative audit Inspire’s records reflecting the price at which Inspire procured the applicable Initial Materials. (ii) The Parties shall determine the consumption coefficient of Novasep’s use of Initial Materials in the manufacture of API for the calendar year immediately preceding the reports delivered pursuant to Section 4.6(b)(i) by dividing the Consumption Amount by the Production Amount (such quotient, the “Consumption Coefficient”), and the following shall apply: (A) If the Consumption Coefficient is within the Target Consumption Range, then no further action will be taken pursuant to this Section 4.6(b)(ii) with respect to such calendar year; (B) If the Consumption Coefficient is higher than the Target Consumption Range (i.e., is greater than the upper bound of the Target Consumption Range), then the Parties shall multiply the upper bound of the Target Consumption Range by the Product...