Common use of Basic Financial Information and Inspection Rights Clause in Contracts

Basic Financial Information and Inspection Rights. The Company hereby covenants and agrees that the Company shall furnish the following reports to PCF: (a) As soon as practicable after the preparation and completion thereof, but in any event within 90 days after the end of each fiscal year, a consolidated and consolidating balance sheet of the Company and its subsidiaries, if any, as at the end of such fiscal year, and consolidated and consolidating statements of income, stockholders’ equity (or the equivalent) and cash flows of the Company and its subsidiaries, if any, for such fiscal year, prepared in accordance with U.S. generally accepted accounting principles consistently applied and audited and certified by an independent public accounting firm of nationally recognized standing selected by the Board of Directors, together with a copy of such accounting firm’s annual management letter to the Audit Committee of the Board of Directors or the Board of Directors. (b) As soon as practicable after the preparation and completion thereof, but in any event within 45 days of the end of each quarter of each fiscal year of the Company, an unaudited consolidated and consolidating balance sheet of the Company and its subsidiaries, if any, as of the end of such quarter, and unaudited consolidated and consolidating statements of income, stockholders’ equity (or the equivalent) and cash flows of the Company and its subsidiaries, if any, for such quarter and for the period from the beginning of the fiscal year to the end of such quarter, setting forth for each quarterly accounting period in such fiscal year comparisons to the annual budget and to the corresponding period in the preceding fiscal year, prepared in accordance with U.S. generally accepted accounting principles consistently applied, subject to changes resulting from normal recurring year-end audit adjustments, none of which will individually or in the aggregate be material, which shall be certified by the chief financial officer of the Company. (c) As soon as practicable after the preparation and completion thereof, but in any event within 30 days after the end of each monthly accounting period in each fiscal year, an unaudited consolidated and consolidating balance sheet of the Company and its subsidiaries, if any, as of the end of such month, and unaudited consolidated and consolidating statements of income, stockholders’ equity (or the equivalent) and cash flows of the Company and its subsidiaries, if any, for such monthly period and for the period from the beginning of the fiscal year to the end of such month, setting forth for each monthly accounting period in each fiscal year comparisons to the annual budget and to the corresponding period in the preceding fiscal year, prepared in accordance with U.S. generally accepted accounting principles consistently applied, subject to changes resulting from normal recurring year-end audit adjustments, none of which will individually or in the aggregate be material. (d) Promptly upon receipt thereof, any additional reports, management letters or other detailed information concerning significant aspects of the Company’s and/or any of its subsidiaries’ operations or financial affairs given to the Company or such subsidiary by their independent accountants. (e) No more than 60 days and no less than 30 days prior to the beginning of each fiscal year of the Company, an annual budget and operating plan forecasting the Company’s and its subsidiaries’ balance sheet, statements of income and cash flow, revenues, expenses and cash position on a monthly basis for such fiscal year, and promptly upon preparation thereof any other significant budgets or operating plans prepared by the Company or any of its subsidiaries and any revisions of such annual or other budget or operating plans. (f) Promptly (but in any event within ten Business Days) after the discovery or receipt of notice of the filing or commencement of any material litigation or arbitration against the Company or any of its subsidiaries, or any material adverse change, event or circumstance affecting the Company or any of its subsidiaries, a notice specifying the nature and period of existence thereof and what actions the Company and/or its subsidiaries have taken and propose to take with respect thereto; provided that so long as there is at least one Investor Director serving on the Board of Directors and such notice is delivered to each Investor Director, such notice need not also be required to be delivered to PCF. (g) With reasonable promptness, such other information and financial data concerning the Company and its subsidiaries as PCF may reasonably request. Each of the financial statements referred to in Sections 3.1(a), 3.1(b) and 3.1(c) shall be true and correct and present fairly in all material respects the financial condition and operating results of the Company and its subsidiaries as and to the extent specified above as of the dates and for the periods set forth therein, subject in the case of the unaudited financial statements to normal recurring year-end audit adjustments, none of which will individually or in the aggregate be material, and the absence of footnotes with respect thereto.

Basic Financial Information and Inspection Rights. The Company hereby covenants and agrees that (a) Basic Financial Information. So long as an Investor continues to hold any Shares or Conversion Stock, the Company shall will furnish the following reports to PCFeach such Investor: (ai) As soon as practicable after the preparation end of each fiscal year of the Company, and completion thereof, but in any event within 90 one hundred twenty (120) days after the end of each fiscal yearyear of the Company, a consolidated and consolidating balance sheet of the Company and its subsidiaries, if any, as at the end of such fiscal year, and consolidated and consolidating statements of income, stockholders’ equity (or the equivalent) income and cash flows of the Company and its subsidiaries, if any, for such fiscal year, prepared in accordance with U.S. generally accepted accounting principles consistently applied and audited and applied, certified by an independent public accounting firm accountants of nationally recognized national standing selected by the Board of Directors, together with a copy of such accounting firm’s annual management letter to the Audit Committee of the Board of Directors or the Board of Directors.Company; (bii) As soon as practicable after the preparation end of the first, second and completion thereofthird quarterly accounting periods in each fiscal year of the Company, but and in any event within 45 forty-five (45) days of after the end of each quarter of the first, second, and third quarterly accounting periods in each fiscal year of the Company, an unaudited consolidated and consolidating balance sheet of the Company and its subsidiaries, if any, as of the end of each such quarterquarterly period, and unaudited consolidated and consolidating statements of income, stockholders’ equity (or the equivalent) income and cash flows of the Company and its subsidiaries, if any, for such quarter and for the period from the beginning of the fiscal year to the end of such quarter, setting forth for each quarterly accounting period in such fiscal year comparisons to the annual budget and to the corresponding period in the preceding fiscal yearperiod, prepared in accordance with U.S. generally accepted accounting principles consistently applied, subject to changes resulting from normal recurring year-end audit adjustments, none of which will individually or in the aggregate be material, which shall be certified by the chief financial officer of the Company.; (ciii) As soon as practicable after the preparation and completion thereof, but in any event within 30 days after the end of each monthly accounting period in each fiscal year, an unaudited consolidated and consolidating balance sheet of the Company and its subsidiaries, if any, as of the end of such month, and unaudited consolidated and consolidating statements of income, stockholders’ equity at least thirty (or the equivalent30) and cash flows of the Company and its subsidiaries, if any, for such monthly period and for the period from the beginning of the fiscal year to the end of such month, setting forth for each monthly accounting period in each fiscal year comparisons to the annual budget and to the corresponding period in the preceding fiscal year, prepared in accordance with U.S. generally accepted accounting principles consistently applied, subject to changes resulting from normal recurring year-end audit adjustments, none of which will individually or in the aggregate be material. (d) Promptly upon receipt thereof, any additional reports, management letters or other detailed information concerning significant aspects of the Company’s and/or any of its subsidiaries’ operations or financial affairs given to the Company or such subsidiary by their independent accountants. (e) No more than 60 days and no less than 30 days prior to the beginning of each fiscal year an operating plan and budget for such fiscal year approved by the Board of Directors; and (iv) As soon as practicable at the Companyend of each month, and in any event within thirty (30) days after the end of each month, an annual budget unaudited balance sheet and operating plan forecasting the Company’s and its subsidiaries’ balance sheet, statements of income and cash flowflows, revenues, expenses and cash position on a monthly basis for such fiscal year, and promptly upon preparation thereof any other significant budgets or operating plans prepared by the Company or any of its subsidiaries and any revisions of such annual or other budget or operating plans. (f) Promptly (but in any event within ten Business Days) after the discovery or receipt of notice of the filing or commencement of any material litigation or arbitration against the Company or any of its subsidiaries, or any material adverse change, event or circumstance affecting the Company or any of its subsidiaries, a notice specifying the nature and period of existence thereof and what actions the Company and/or its subsidiaries have taken and propose to take with respect thereto; provided that so long as there is at least one Investor Director serving on the Board of Directors and such notice is delivered to each Investor Director, such notice need not which also be required to be delivered to PCF. (g) With reasonable promptness, such other information and financial data concerning the Company and its subsidiaries as PCF may reasonably request. Each of the financial statements referred to in Sections 3.1(a), 3.1(b) and 3.1(c) shall be true and correct and present fairly in all material respects the financial condition and operating results of the Company and its subsidiaries as and to the extent specified above as of the dates and for the periods set forth therein, subject in the case of the unaudited financial statements to normal recurring year-end audit adjustments, none of which will individually or in the aggregate be material, applicable plan figures and the absence of footnotes with respect theretovariances from plan.

Basic Financial Information and Inspection Rights. (a) Basic Financial Information. The Company hereby covenants and agrees that the Company shall will furnish the following reports to PCFeach Securityholder who owns at least 5,000,000 Company Securities (as presently constituted and subject to subsequent adjustments for stock splits, stock dividends, reverse stock splits, and the like); provided, however, that no Securityholder shall by reason of this Section 3.1 have access to any trade secrets or classified information of the Company: (ai) As soon as practicable after the preparation end of each fiscal year of the Company, and completion thereof, but in any event within 90 one hundred twenty (120) days after the end of each fiscal yearyear of the Company, a an audited consolidated and consolidating balance sheet of the Company and its subsidiaries, if any, as at the end of such fiscal year, and audited consolidated and consolidating statements of income, stockholders’ equity (or the equivalent) income and cash flows of the Company and its subsidiaries, if any, for such fiscal year, prepared in accordance with U.S. generally accepted accounting principles consistently applied and audited and certified applied, accompanied by an unqualified report of independent certified public accounting firm of nationally recognized standing accountants regarding such balance sheet and statements selected by the Board of DirectorsCompany, together with a copy of such accounting firm’s annual management letter to the Audit Committee provided, however, that in lieu of the Board balance sheet and statements of Directors income and cash flows and a report of independent certified public accountants required to be furnished under this Section 3.1(a)(i), the Company may furnish the audited consolidated financial statements and accompanying report of independent certified public accountants of Maxygen, which audited consolidated financial statements and report of independent certified public accountants shall include or cover, as the Board case may be, the financial results of Directorsthe Company. (bii) As soon as practicable after the preparation end of the first, second and completion thereofthird quarterly accounting periods in each fiscal year of the Company, but and in any event within 45 forty-five (45) days of after the end of each quarter of the first, second, and third quarterly accounting periods in each fiscal year of the Company, an unaudited consolidated and consolidating balance sheet of the Company and its subsidiaries, if any, as of the end of each such quarterquarterly period, and unaudited consolidated and consolidating statements of income, stockholders’ equity (or the equivalent) income and cash flows of the Company and its subsidiaries, if any, for such quarter and for the period from the beginning of the fiscal year to the end of such quarter, setting forth for each quarterly accounting period in such fiscal year comparisons to the annual budget and to the corresponding period in the preceding fiscal yearperiod, prepared in accordance with U.S. generally accepted accounting principles consistently applied, subject to changes resulting from normal recurring year-end audit adjustments, none of which will individually or in the aggregate be material, which shall be and certified by the chief financial officer Chief Financial Officer of the Company. (ciii) As soon as practicable after the preparation end of each calendar month, and completion thereof, but in any event within 30 thirty (30) days after the end of each monthly accounting period in each fiscal yearcalendar month, an unaudited consolidated and consolidating balance sheet of the Company and its subsidiaries, if any, as of the end of each such monthmonthly period, and unaudited consolidated and consolidating statements of income, stockholders’ equity (or the equivalent) income and cash flows of the Company and its subsidiaries, if any, for such monthly period and for the period from the beginning of the fiscal year to the end of such month, setting forth for each monthly accounting period in each fiscal year comparisons to the annual budget and to the corresponding period in the preceding fiscal yearperiod, prepared in accordance with U.S. generally accepted accounting principles consistently applied, subject to changes resulting from normal recurring year-end audit adjustments, none and certified by the Chief Financial Officer of which will individually or in the aggregate be materialCompany. (div) Promptly upon receipt thereof, any additional reports, management letters or other detailed information concerning significant aspects of the Company’s and/or any of its subsidiaries’ operations or financial affairs given to the Company or such subsidiary by their independent accountants. At least thirty (e30) No more than 60 days and no less than 30 days prior to the beginning of each fiscal year of the Company, an annual budget and operating plan forecasting the Company’s and its subsidiaries’ balance sheetbusiness plan, statements of income and cash flowincluding a budget, revenues, expenses and cash position on a monthly basis for such fiscal year. (b) Inspection Rights. The Company will afford to each Investor and such Investor’s accountants and counsel, reasonable access during normal business hours to all of the Company’s respective properties, books and promptly upon preparation thereof any records to the extent permitted by applicable law. Each Investor shall have such other significant budgets access to management and information as is necessary for it to comply with applicable laws and regulations and reporting obligations. The Company shall not be required to disclose details of contracts with, work performed for, or operating plans prepared by trade secrets of specific customers and other business partners where to do so would violate confidentiality obligations to those parties; provided that the Company will use its commercially reasonable efforts to provide exceptions in all confidentiality agreements to permit such disclosure to the Investors subject to the Investors entering into such reasonable confidentiality and non-use agreements with respect to such information as the Company or such other parties may request. Such Investors may exercise their rights under this Section 3.1(b) only for purposes reasonably related to their interests under this Agreement and other Transaction Agreements. The rights granted pursuant to this Section 3.1(b) may not be assigned or otherwise conveyed by such Investors or by any subsequent transferee of its subsidiaries and any revisions of such annual or other budget or operating plans. (f) Promptly (but in any event within ten Business Days) after rights without the discovery or receipt of notice prior written consent of the filing or commencement of any material litigation or arbitration against the Company or any of its subsidiaries, or any material adverse change, event or circumstance affecting the Company or any of its subsidiaries, a notice specifying the nature and period of existence thereof and what actions the Company and/or its subsidiaries have taken and propose to take with respect thereto; provided that so long as there is at least one Investor Director serving on the Board of Directors and such notice is delivered to each Investor Director, such notice need not also be required to be delivered to PCFCompany. (g) With reasonable promptness, such other information and financial data concerning the Company and its subsidiaries as PCF may reasonably request. Each of the financial statements referred to in Sections 3.1(a), 3.1(b) and 3.1(c) shall be true and correct and present fairly in all material respects the financial condition and operating results of the Company and its subsidiaries as and to the extent specified above as of the dates and for the periods set forth therein, subject in the case of the unaudited financial statements to normal recurring year-end audit adjustments, none of which will individually or in the aggregate be material, and the absence of footnotes with respect thereto.