Common use of Books and Records; Audit Clause in Contracts

Books and Records; Audit. Buyer shall keep full, true and accurate books of account and supporting data containing all particulars that may be necessary for the purpose of calculating Net Sales of the Products forming the basis for amounts payable to Sellers under this Section 2.9. Such books and the supporting data shall be open, on ten (10) Business Days’ prior written notice during normal business hours and in a manner so as not to unreasonably interfere with Buyer’s normal business operations, to the inspection by a firm of certified public accountants selected by Sellers and reasonably acceptable to Buyer who shall have executed a customary confidentiality agreement, for the limited purpose of verifying Buyer’s Net Sales Reports; provided, however, that such examinations shall not take place more often than once during any twenty four (24) month-period and shall not cover more than the preceding two (2) years. Except as otherwise provided in this Section 2.9(d), the cost of any such examination shall be paid by Sellers. In the event that any such inspection reveals a deficiency in excess of seven percent (7%) of the reported payments under Section 2.9 for the period covered by the inspection, Buyer shall promptly pay Sellers the deficiency, plus interest at an annual rate equal to the Applicable Rate as of the date on which such deficient amount was first due from the date first due until the date paid, and shall reimburse Seller for the fees and expenses paid to such accountants in connection with such inspection. In the event that any such inspection reveals a deficiency that is less than or equal to seven percent (7%) of the reported payments under this Section 2.9 for the period covered by the inspection, Buyer shall promptly pay Sellers the deficiency plus interest at an annual rate equal to the Applicable Rate as of the date on which such deficient amount was first due from the date first due until the date paid. In the event that any such inspection reveals an overpayment by the Buyer such overpayment shall be set-off against the following future payment payable by the Buyer to the Sellers under this Section 2.9.

Books and Records; Audit. Buyer Each party shall keep fullmaintain during the Term and for three (3) years thereafter, true complete and accurate books of account and supporting data containing all particulars that may be necessary for records sufficient to determine the purpose of calculating Net Sales of the Products forming the basis for amounts payable to Sellers under this Section 2.9. Such books and the supporting data shall be open, on ten (10) Business Days’ prior written notice during normal business hours and in a manner so as not to unreasonably interfere with Buyer’s normal business operations, to the inspection by a firm of certified public accountants selected by Sellers and reasonably acceptable to Buyer who shall have executed a customary confidentiality agreement, for the limited purpose of verifying Buyer’s Net Sales Reports; provided, however, that such examinations shall not take place more often than once during any twenty four (24) month-period and shall not cover more than the preceding two (2) years. Except as otherwise provided in this Section 2.9(d), the cost of any such examination shall be paid by SellersResidual Rights Fee payments due hereunder. In the event that the other party does not agree with the determination by the paying party of the Residual Rights Fee payments due hereunder, the parties shall use their reasonable efforts to reach agreement on the disputed items or amounts. At the request of the non-paying party, the paying party shall allow a reputable independent public accounting firm or representatives of the non-paying party, at the non-paying party's expense, to verify the accuracy of any Residual Rights Fee calculations. The non-paying party shall give the paying party thirty (30) days written notice prior to beginning such audit. Such audit shall be reasonably conducted during regular business hours in a non-disruptive manner, and the party performing such audit must agree to be bound to a reasonable non-disclosure agreement. The only information to be reviewed during the course of such an audit shall be that necessary to verify the Residual Rights Fee due hereunder. Such audit may review the Licensee Group's Sales, the direct material and labor costs, and that the applicable DCAA approved rates or equivalent rates per Section 4.2(b)(iii) were applied to the calculation of the Residual Rights Fee. The audit shall specifically not review the data that makes up VISTA's overhead, sales, general or administrative rates. If any such inspection reveals a deficiency in excess audit discloses that any Residual Rights Fees were understated, the paying party shall pay the amount of seven such understated Residual Rights Fees plus interest as set forth above and if the audit discloses that the amounts paid hereunder were understated by more than five percent (75%) of in any calendar quarter, the reported payments under Section 2.9 for the period covered by the inspection, Buyer shall promptly pay Sellers the deficiency, plus interest at an annual rate equal to the Applicable Rate as of the date on which such deficient amount was first due from the date first due until the date paid, and paying party shall reimburse Seller the nonpaying party for the fees its reasonable and actual costs and expenses paid to such accountants incurred in connection with performing such inspectionaudit. In No more than one audit may be performed within a one (1) year period, except if the event that any such inspection reveals a deficiency that is less than or equal to seven percent (7%) of preceding audit discloses an understated, in which even the reported payments under this Section 2.9 for the period covered by the inspection, Buyer shall promptly pay Sellers the deficiency plus interest at an annual rate equal to the Applicable Rate as of the date on which such deficient amount was first due from the date first due until the date paid. In the event that any such inspection reveals an overpayment by the Buyer such overpayment nonpaying party shall be set-off against entitled perform a quarterly audit during the following future payment payable by the Buyer to the Sellers under this Section 2.9successive one year period.

Books and Records; Audit. Buyer Ocugen and its Affiliates and Sublicensees shall keep full, true and maintain for [***] from the end of the Calendar Year in which such Net Sales occur (the “Retention Period”) materially complete and accurate books records of account gross Sales and supporting data containing all particulars that may be necessary for the purpose of calculating Net Sales of the Products forming Product in the basis for amounts payable Ocugen Territory by, as applicable, Ocugen, its Affiliates and Sublicensees, in sufficient detail to Sellers under this Section 2.9. Such books allow Operating Profit and the supporting data Profit Share to be determined accurately. BBIL shall be openhave the right during the applicable Retention Period, on ten (10) Business Days’ prior written notice during normal business hours and in a manner so as not to unreasonably interfere with Buyer’s normal business operationsat its cost, to the inspection by a firm of through an independent certified public accountants selected by Sellers and accountant reasonably acceptable to Buyer who Ocugen, to audit the relevant records of Ocugen, its Affiliates and Sublicensees to verify that the amount of such payment was correctly determined. Ocugen, its Affiliates and Sublicensees shall have executed a customary confidentiality agreementeach make its records reasonably available for audit by such independent certified public accountant during regular business hours at such place or places where such records are customarily kept, for the limited purpose of verifying Buyer’s Net Sales Reports; provided, however, that such examinations upon [***] written notice from BBIL. Such audit right shall not take place more often than once during any twenty four (24) month-period and shall not cover be exercised by BBIL more than the preceding two (2) years[***] or more than [***]. Except as otherwise provided in this Section 2.9(d), the cost of any such examination All records made available for audit shall be paid by Sellersthe Confidential Information of Ocugen. The results of each audit, if any, shall be binding on both Parties absent manifest error. In the event that there was an underpayment by Ocugen hereunder, Ocugen shall promptly (but in any such inspection reveals a deficiency in excess of seven percent (7%) event no later than [***] after Ocugen’s receipt of the reported payments under Section 2.9 for report so concluding) make payment to BBIL of any shortfall. BBIL shall bear the full cost of such audit unless such audit discloses an underreporting by Ocugen of the higher of (a) [***], or (b) [***] during the period covered by the inspectionaudited, Buyer shall promptly pay Sellers the deficiency, plus interest at an annual rate equal to the Applicable Rate as of the date on in which such deficient amount was first due from the date first due until the date paid, and case Ocugen shall reimburse Seller BBIL for the fees and expenses paid to such accountants all reasonable costs incurred by BBIL in connection with such inspectionaudit. In the event that any such inspection reveals a deficiency that is less than or equal to seven percent (7%) of the reported payments under this Section 2.9 for the period covered by the inspection, Buyer shall promptly pay Sellers the deficiency plus interest at an annual rate equal to the Applicable Rate as of the date on which such deficient amount was first due from the date first due until the date paid. In the event that any such inspection reveals auditor finds an overpayment by Ocugen, Ocugen shall have the Buyer right to deduct the overpayment from any Profit Share payment due to BBIL by Ocugen or, if no such future Profit Share payments are payable, then BBIL shall refund the overpayment shall be set-off against to Ocugen within [***] after BBIL receives the following future payment payable by the Buyer to the Sellers under this Section 2.9audit report.

Books and Records; Audit. Buyer Service Provider shall keep full, true maintain complete and accurate books of account and supporting data containing all particulars that may be necessary record related to the Fees charged for the purpose of calculating Net Sales Products and Services, and shall retain such books and records for a period not less than three (3) years from the date of the Products forming the basis for amounts payable invoice to Sellers under this Section 2.9which they relate. Such Company (and its duly authorized representatives) shall be entitled to (a) no more than once per year, audit such books and records as they relate to the supporting data shall be openServices performed hereunder, on ten upon reasonable notice to Service Provider and in any event no less than thirty (1030) Business Daysdays’ prior written notice notice, and during normal business hours and in such a manner so as to not to unreasonably interfere with BuyerService Provider’s normal business operationsbusiness, and (b) make copies and summaries of such books and records solely to support the inspection by a firm requirements of certified public accountants selected by Sellers and reasonably acceptable to Buyer who shall have executed a customary confidentiality agreement, for the limited purpose of verifying Buyer’s Net Sales Reports; provided, however, that such examinations shall not take place more often than once during any twenty four (24) month-period and shall not cover more than the preceding two (2) years. Except as otherwise provided in this Section 2.9(d14.10. All such copies are Service Provider’s Confidential Information. If Company discovers an overpayment in the amounts paid by Company to Service Provider for any period under audit (an “Audit Overpayment”), and Service Provider agrees with the cost conclusion of an overpayment, then Service Provider shall promptly pay refund such Audit Overpayment to Company. In the event the audit determines that Company has underpaid Fees and Company agrees with the conclusion of underpayment (“Audit Underpayment”) then Company shall promptly pay the amount of the Audit Underpayment Both parties will act reasonably with regard to any such examination shall be paid by Sellersdisputes arising from this provision. In the event that any such inspection reveals a deficiency Audit Overpayment shall be in excess of seven five percent (75%) of the reported aggregate payments under Section 2.9 for the period covered made by the inspection, Buyer shall promptly pay Sellers the deficiency, plus interest at an annual rate equal to the Applicable Rate as Company in respect of the date on which such deficient amount was first due from the date first due until the date paidapplicable period under audit, and Service Provider shall also reimburse Seller Company for the fees all reasonable costs and expenses paid to such accountants incurred by Company in connection with such inspectionaudit and the collection of the Audit Overpayment. In the event that If any such inspection reveals a deficiency that is less than or equal to seven Audit Overpayment shall be in excess of ten percent (710%) of the reported aggregate payments under this Section 2.9 for the period covered made by the inspection, Buyer shall promptly pay Sellers the deficiency plus interest at an annual rate equal to the Applicable Rate as Company in respect of the date on which such deficient amount was first due from applicable period under audit, Company shall have the date first due until right to re-audit, at Service Provider’s expense, Service Provider’s books and records for any and all past years (since the date paid. In the event that any such inspection reveals an overpayment by the Buyer such overpayment shall be set-off against the following future payment payable by the Buyer to the Sellers under commencement of this Section 2.9Agreement).

Books and Records; Audit. Buyer shall keep full, true and accurate books of account and supporting data containing all particulars that may be necessary for the purpose of calculating Net Sales of the Pipeline Products forming the basis for amounts amount payable to Sellers under this Section 2.92.7 and for verifying Buyer’s compliance with its obligations under Section 7.11. Such books and the supporting data shall be open, on ten fourteen (1014) Business Daysdays’ prior written notice during normal business hours and in a manner so as not to unreasonably interfere with Buyer’s normal business operations, to the inspection by a nationally recognized audit firm of certified public accountants selected by Sellers and reasonably acceptable to Buyer who shall have executed a customary confidentiality agreement, for the limited purpose of verifying Buyer’s Net Sales ReportsReports and Buyer’s compliance with Section 7.11; provided, however, that such examinations shall not take place more often than once during any twenty four twelve (2412) month-month period and shall not cover more than the preceding two three (23) years. Except as otherwise provided in this Section 2.9(d2.7(d), the cost of any such examination shall be paid by Sellers. In the event that any such inspection reveals a deficiency in excess of seven percent (7%) of the reported payments amounts owing by Buyer under Section 2.9 this Agreement for the period covered by the inspection, Buyer shall promptly pay Sellers the deficiency, plus interest at an annual a rate equal to the Applicable Rate as of the date on which such deficient amount was first due from the date first due until the date paid, and shall reimburse Seller for the fees and expenses paid to such accountants in connection with such inspection. In the event that any such inspection reveals a deficiency that is less than or equal to seven percent (7%) of the reported payments amounts owing by Buyer under this Section 2.9 Agreement for the period covered by the inspection, Buyer shall promptly pay Sellers the deficiency deficiency, plus interest at an annual rate equal to the Applicable Rate as of the date on which such deficient amount was first due from the date first due until the date paid. In the event that any such inspection reveals an overpayment by the Buyer such overpayment shall be set-off against the following future payment payable by the Buyer to the Sellers under this Section 2.9.

Books and Records; Audit. Buyer Each party shall keep fullmaintain during the Term and for three (3) years thereafter, true complete and accurate books of account and supporting data containing all particulars that may be necessary for records sufficient to determine the purpose of calculating Net Sales of the Products forming the basis for amounts payable to Sellers under this Section 2.9. Such books and the supporting data shall be open, on ten (10) Business Days’ prior written notice during normal business hours and in a manner so as not to unreasonably interfere with Buyer’s normal business operations, to the inspection by a firm of certified public accountants selected by Sellers and reasonably acceptable to Buyer who shall have executed a customary confidentiality agreement, for the limited purpose of verifying Buyer’s Net Sales Reports; provided, however, that such examinations shall not take place more often than once during any twenty four (24) month-period and shall not cover more than the preceding two (2) years. Except as otherwise provided in this Section 2.9(d), the cost of any such examination shall be paid by SellersResidual Rights Fee payments due hereunder. In the event that the other party does not agree with the determination by the paying party of the Residual Rights Fee payments due hereunder, the parties shall use their reasonable efforts to reach agreement on the disputed items or amounts. At the request of the non-paying party, the paying party shall allow a reputable independent public accounting firm or representatives of the non-paying party, at the non-paying party’s expense, to verify the accuracy of any Residual Rights Fee calculations. The non-paying party shall give the paying party thirty (30) days written notice prior to beginning such audit. Such audit shall be reasonably conducted during regular business hours in a non-disruptive manner, and the party performing such audit must agree to be bound to a reasonable non-disclosure agreement. The only information to be reviewed during the course of such an audit shall be that necessary to verify the Residual Rights Fee due hereunder. Such audit may review the Licensee Group’s Sales, the direct material and labor costs, and that the applicable DCAA approved rates or equivalent rates per Section 4.2(b)(iii) were applied to the calculation of the Residual Rights Fee. The audit shall specifically not review the data that makes up VISTA’s overhead, sales, general or administrative rates. If any such inspection reveals a deficiency in excess audit discloses that any Residual Rights Fees were understated, the paying party shall pay the amount of seven such understated Residual Rights Fees plus interest as set forth above and if the audit discloses that the amounts paid hereunder were understated by more than five percent (75%) of in any calendar quarter, the reported payments under Section 2.9 for the period covered by the inspection, Buyer shall promptly pay Sellers the deficiency, plus interest at an annual rate equal to the Applicable Rate as of the date on which such deficient amount was first due from the date first due until the date paid, and paying party shall reimburse Seller the nonpaying party for the fees its reasonable and actual costs and expenses paid to such accountants incurred in connection with performing such inspectionaudit. In No more than one audit may be performed within a one (1) year period, except if the event that any such inspection reveals a deficiency that is less than or equal to seven percent (7%) of preceding audit discloses an understated, in which even the reported payments under this Section 2.9 for the period covered by the inspection, Buyer shall promptly pay Sellers the deficiency plus interest at an annual rate equal to the Applicable Rate as of the date on which such deficient amount was first due from the date first due until the date paid. In the event that any such inspection reveals an overpayment by the Buyer such overpayment nonpaying party shall be set-off against entitled perform a quarterly audit during the following future payment payable by the Buyer to the Sellers under this Section 2.9successive one year period.

Books and Records; Audit. During the Earn-Out Period and for six (6) months thereafter, Buyer shall keep full, true and accurate maintain reasonably detailed books and records of account and supporting data containing all particulars that may be necessary for the purpose of calculating Net Sales and each deduction included in the definition of Net Sales. Sellers’ Representative shall have the Products forming the basis for amounts payable right to Sellers under this Section 2.9. Such examine and audit Buyer’s relevant books and records to verify the supporting data accuracy of Net Sales Reports delivered by Buyer pursuant to this Agreement. Any such audit shall be open, on at least ten (10) Business Days’ prior written notice notice. Sellers’ Representative’s right to perform an audit under this Section 2.8(d) shall be limited to not more than one (1) such audit in any calendar year and shall not be exercised for any calendar quarter more than three (3) years after the end of such calendar quarter. The audit shall be performed at Sellers’ Representative’s sole expense by an independent certified public accounting firm of internationally recognized standing that is selected by Sellers’ Representative and approved by Buyer (such approval not to be unreasonably withheld, conditioned or delayed). The accounting firm shall be required to enter into a reasonable and customary confidentiality agreement with Buyer to protect the confidentiality of its books and records. Buyer shall make the relevant books and records reasonably available during normal business hours and in a manner so as not to unreasonably interfere with Buyerfor examination by the accounting firm, including, upon the accounting firm’s normal business operationsrequest and, to the inspection by extent practicable, via an Internet-based electronic dataroom or other electronic means. Upon completion of the audit, the accounting firm shall provide both Buyer and Sellers’ Representative a firm of certified public accountants selected by Sellers and reasonably acceptable to Buyer who shall have executed a customary confidentiality agreement, for written report disclosing whether or not the limited purpose of verifying Buyer’s relevant Net Sales Reports; providedReport(s) are correct, howeverand the specific details concerning any discrepancies. If the accounting firm conducting an audit pursuant to this Section 2.8 concludes, as a result of such audit, that a Milestone Event was achieved, but the corresponding Earn-Out Payment was not paid to Sellers, unless such examinations shall not take place more often than once during any twenty four (24) month-period and shall not cover more than the preceding two (2) years. Except conclusion is disputed by Buyer as otherwise provided set forth below in this Section 2.9(d2.8(d), Buyer shall (x) pay such *** Certain information on this page has been omitted and filed separately with the cost Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. Earn-Out Payment to Sellers in accordance with Section 2.8(a) within ten (10) Business Days of any the date that the parties receive such examination shall be paid by accountant’s written report, together with interest thereon at a rate of [***] per annum from the date on which such Earn-Out Payment was originally due until the date of payment and (y) reimburse Sellers’ Representative for the documented out-of-pocket expenses incurred in conducting the audit. In the event that Buyer disputes the finding of any such inspection reveals a deficiency in excess of seven percent (7%) of the reported payments under audit conducted pursuant to this Section 2.9 for the period covered by the inspection2.8, Buyer shall promptly so notify Seller’s Representative within [***] after the date on which the parties receive the accountant’s written report, in which event Buyer and Sellers’ Representative shall work in good faith to resolve the dispute. If Buyer and Sellers’ Representative are unable to reach a mutually acceptable resolution of any such dispute within thirty (30) days, such dispute shall be submitted for resolution to an Independent Accounting Firm. The decision of the Independent Accounting Firm shall be final and, if the Independent Accounting Firm concludes that no Milestone Event was achieved, the costs of such dispute resolution as well as the initial audit shall be borne between the parties in such manner as the Independent Accounting Firm shall determine. If the Independent Accounting Firm concludes, as a result of such review, that a Milestone Event was achieved, but the corresponding Earn-Out Payment was not paid to Sellers, not later than [***] after such decision and in accordance with such decision, Buyer shall (1) pay to Sellers the deficiency, plus applicable Earn-Out Payment together with interest thereon at an annual a rate equal to the Applicable Rate as of [***] per annum from the date on which such deficient amount Earn-Out Payment was first due from the date first originally due until the date paid, of payment thereof and shall (2) reimburse Seller Sellers’ Representative for the fees and documented out-of-pocket expenses paid incurred in conducting the initial audit conducted pursuant to such accountants in connection with such inspection. In the event that any such inspection reveals a deficiency that is less than or equal to seven percent (7%) of the reported payments under this Section 2.9 for the period covered by the inspection2.8, Buyer shall promptly pay Sellers the deficiency plus interest at an annual rate equal to the Applicable Rate as well as those incurred in respect of the date on which such deficient amount was first due from the date first due until the date paid. In the event that any such inspection reveals an overpayment by the Buyer such overpayment shall be set-off against the following future payment payable by the Buyer to the Sellers under this Section 2.9dispute resolution.