Common use of Financial Audits Clause in Contracts

Financial Audits. XXXXXXX shall maintain complete and accurate records regarding all items to be reported in each Royalty Report and any other items necessary to determine the accuracy of the Milestone payments payable hereunder for a period of [***] to which such records pertain. Up to [***] prior written notice from LAVA, XXXXXXX shall make available all such records to an independent, certified public accountant, selected by LAVA and reasonably acceptable to XXXXXXX, for such accountant to review and audit such records at LAVA’s expense in the location(s) where such records are maintained, during regular business hours and under obligations of confidence, for the sole purpose of verifying the accuracy of XXXXXXX’x Royalty Reports and the corresponding royalty payments or any Sales Milestone payments hereunder with respect to Products within the [***] period preceding such review and audit. LAVA shall treat EXECUTION COPY any records of XXXXXXX that are so reviewed and audited as Confidential Information of XXXXXXX subject to Clause 7, and shall cause the independent, certified public accountant to retain all such records and information in confidence. The report of the independent, certified public accountant shall be shared with XXXXXXX prior to distribution to LAVA such that XXXXXXX can provide the independent, certified public accountant with justifying remarks for inclusion in the report prior to sharing the conclusions of such audit with LAVA; provided that such report shall be distributed to LAVA no later than [***] after its distribution to XXXXXXX. The final audit report shall be shared with XXXXXXX and LAVA at the same time and specify whether the amounts paid to LAVA were correct or, if incorrect, the amount of any underpayment or overpayment. If such review and audit reveals an underpayment of royalties or Sales Milestones due to LAVA hereunder, XXXXXXX shall promptly pay LAVA any underpaid amounts due, and if such review and audit reveals an overpayment of royalties or Sales Milestones due to LAVA hereunder, XXXXXXX shall be entitled to credit such overpayments against subsequent payments that may become due hereunder; provided, however, that the foregoing shall not be construed to limit the application of Clause 11.1 with respect to any dispute regarding royalties or Sales Milestones due hereunder. In the event that such a review and audit identifies an underpayment of royalties due to LAVA hereunder greater than [***] of the royalty amounts actually due for the period reviewed and audited, or identifies any unpaid Sales Milestone that should have been paid, XXXXXXX shall reimburse LAVA for reasonable and documented Out-of-Pocket Costs incurred by LAVA for the conduct of such review and audit. Upon the expiration of [***], except with respect to (i) ongoing unresolved Disputes, if any, regarding royalties or Sales Milestones due hereunder for which arbitration proceedings have been initiated in accordance with Clause 11.1, and (ii) fraudulent activities by XXXXXXX, the calculation of royalties and Sales Milestones payable with respect to such year shall be binding and conclusive upon the Parties and XXXXXXX shall be released from any liability or accountability with respect to royalties and Sales Milestones for such Calendar Year.

Financial Audits. XXXXXXX During the Audit Period (as defined in Section 9.10(a)), Supplier shall, and, unless expressly approved otherwise by Triad under Section 9.12, shall maintain complete cause its Subcontractors to, provide to Triad (and accurate records regarding all items internal and external auditors, inspectors, regulators and other representatives that Triad may designate from time to time, including customers, vendors, licensees and other third parties to the extent Triad or the Eligible Recipients are legally or contractually obligated to submit to audits by such entities and provided such representatives shall agree to be reported in each Royalty Report subject to Supplier’s reasonable and generally applicable confidentiality and reasonable security requirements) access at reasonable hours to Supplier Personnel and to Contract Records and other pertinent information to conduct financial audits, all to the extent relevant to the performance of Supplier’s obligations under this Agreement. Such access shall be provided for the purpose of performing audits and inspections to (i) verify the accuracy and completeness of Contract Records, (ii) verify the accuracy and completeness of Charges and any other items necessary to determine the accuracy of the Milestone payments payable hereunder for a period of [***] to which such records pertain. Up to [***] prior written notice from LAVA, XXXXXXX shall make available all such records to an independent, certified public accountant, selected by LAVA Pass-Through Expenses and reasonably acceptable to XXXXXXX, for such accountant to review and audit such records at LAVA’s expense in the location(s) where such records are maintained, during regular business hours and under obligations of confidence, for the sole purpose of verifying the accuracy of XXXXXXX’x Royalty Reports and the corresponding royalty payments or any Sales Milestone payments hereunder with respect to Products within the [***] period preceding such review and audit. LAVA shall treat EXECUTION COPY any records of XXXXXXX that are so reviewed and audited as Confidential Information of XXXXXXX subject to Clause 7, and shall cause the independent, certified public accountant to retain all such records and information in confidence. The report of the independent, certified public accountant shall be shared with XXXXXXX prior to distribution to LAVA such that XXXXXXX can provide the independent, certified public accountant with justifying remarks for inclusion in the report prior to sharing the conclusions of such audit with LAVA; provided that such report shall be distributed to LAVA no later than [***] after its distribution to XXXXXXX. The final audit report shall be shared with XXXXXXX and LAVA at the same time and specify whether the amounts paid to LAVA were correct or, if incorrect, the amount of any underpayment or overpayment. If such review and audit reveals an underpayment of royalties or Sales Milestones due to LAVA hereunder, XXXXXXX shall promptly pay LAVA any underpaid amounts due, and if such review and audit reveals an overpayment of royalties or Sales Milestones due to LAVA hereunder, XXXXXXX shall be entitled to credit such overpayments against subsequent payments that may become due hereunder; provided, however, that the foregoing shall not be construed to limit the application of Clause 11.1 with respect to any dispute regarding royalties or Sales Milestones due hereunder. In the event that such a review and audit identifies an underpayment of royalties due to LAVA hereunder greater than [***] of the royalty amounts actually due for the period reviewed and audited, or identifies any unpaid Sales Milestone that should have been paid, XXXXXXX shall reimburse LAVA for reasonable and documented Out-of-Pocket Costs incurred Expenses, (iii) examine the financial controls, processes and procedures utilized by LAVA Supplier, and (iv) enable Triad and the Eligible Recipients to meet applicable legal, regulatory and contractual requirements, in each case to the extent applicable to the Services and/or the Charges for such Services. Supplier shall (A) provide any assistance reasonably requested by Triad or its designee in conducting any such audit, (B) make requested personnel, records and information available to Triad or its designee, and (C) in all cases, provide such assistance, personnel, records and information in an expeditious manner to facilitate the conduct timely completion of such review audit (excluding the installing and auditoperating of audit software to the extent such software is likely to adversely impact Supplier or the performance of the Services). Upon If any such audit reveals a net overcharge by Supplier, and Supplier does not successfully dispute the expiration amount questioned by such audit in accordance with Article 19, Supplier shall promptly pay to Triad the amount of such net overcharge plus interest at the rate provided in Section 12.2(b) from the date of overcharge. [**]. [**] Certain confidential information contained in this document, marked by [**], except has been omitted and filed separately with respect the Securities and Exchange Commission pursuant to (i) ongoing unresolved DisputesRule 24b-2 of the Securities Exchange Act of 1934, if any, regarding royalties or Sales Milestones due hereunder for which arbitration proceedings have been initiated in accordance with Clause 11.1, and (ii) fraudulent activities by XXXXXXX, the calculation of royalties and Sales Milestones payable with respect to such year shall be binding and conclusive upon the Parties and XXXXXXX shall be released from any liability or accountability with respect to royalties and Sales Milestones for such Calendar Yearas amended.

Financial Audits. XXXXXXX shall maintain complete Following Commercial Launch for the Product, upon at least fourteen (14) Business Days written notice and accurate records regarding all items during normal business hours, no more frequently than once per calendar year, BXLS may cause an inspection and/or audit by an independent public accounting firm reasonably acceptable to Reata to be reported in each Royalty Report made of Reata’s books of account for the three (3) calendar years prior to the audit for the purpose of determining the correctness of Product Payments made under this Agreement (including supporting financial data to determine the Product Payments payable to BXLS under any applicable Third Party License). All of the expenses of any inspection or audit requested by BXLS hereunder (including the fees and expenses of such independent public accounting firm designated for such purpose) shall be borne by (i) BXLS, if the independent public accounting firm determines that Product Payments previously paid were incorrect by an amount less than or equal to 5% of the Product Payments actually paid or (ii) Reata, if the independent public accounting firm determines that Product Payments previously paid were incorrect by an amount greater than 5% of the Product Payments actually paid. The terms on which any other items such independent public accounting firm is engaged shall provide that such independent public accounting firm may not disclose the confidential information of Reata or any such counterparty to any Third Party License to BXLS, except to the extent such disclosure is either necessary to determine the accuracy correctness of the Milestone payments payable hereunder for Product Payments or such confidential information otherwise would be included in a period Product Payment report provided pursuant to Section 6.5. All information obtained by BXLS as a result of [***] to which any such records pertain. Up to [***] prior written notice from LAVA, XXXXXXX inspection or audit shall make available all such records to an independent, certified public accountant, selected by LAVA and reasonably acceptable to XXXXXXX, for such accountant to review and audit such records at LAVA’s expense in the location(s) where such records are maintained, during regular business hours and under obligations of confidence, for the sole purpose of verifying the accuracy of XXXXXXX’x Royalty Reports and the corresponding royalty payments or any Sales Milestone payments hereunder with respect to Products within the [***] period preceding such review and audit. LAVA shall treat EXECUTION COPY any records of XXXXXXX that are so reviewed and audited as be Confidential Information of XXXXXXX subject Reata or any such counterparty to Clause 7any Third Party License and the independent public accounting firm shall be considered a Representative of BXLS for purposes of Article 10. Absent manifest error, and shall cause the independent, certified public accountant to retain all such records and information in confidence. The report financial results of the independent, certified audit of the independent public accountant accounting firm will be final and non-appealable. Any payment owed by one Party to another as a result of the audit shall be shared with XXXXXXX prior to distribution to LAVA such that XXXXXXX can provide the independent, certified public accountant with justifying remarks for inclusion in the report prior to sharing the conclusions made within ten (10) Business Days of such audit with LAVA; provided that such report shall be distributed to LAVA no later than [***] after its distribution to XXXXXXX. The final audit report shall be shared with XXXXXXX and LAVA at the same time and specify whether the amounts paid to LAVA were correct or, if incorrect, the amount of any underpayment or overpayment. If such review and audit reveals an underpayment of royalties or Sales Milestones due to LAVA hereunder, XXXXXXX shall promptly pay LAVA any underpaid amounts due, and if such review and audit reveals an overpayment of royalties or Sales Milestones due to LAVA hereunder, XXXXXXX shall be entitled to credit such overpayments against subsequent payments that may become due hereunder; provided, however, that the foregoing shall not be construed to limit the application of Clause 11.1 with respect to any dispute regarding royalties or Sales Milestones due hereunder. In the event that such a review and audit identifies an underpayment of royalties due to LAVA hereunder greater than [***] receipt of the royalty amounts actually due for the period reviewed and audited, or identifies any unpaid Sales Milestone that should have been paid, XXXXXXX shall reimburse LAVA for reasonable and documented Out-of-Pocket Costs incurred by LAVA for the conduct of such review and audit. Upon the expiration of [***], except with respect to (i) ongoing unresolved Disputes, if any, regarding royalties or Sales Milestones due hereunder for which arbitration proceedings have been initiated in accordance with Clause 11.1, and (ii) fraudulent activities by XXXXXXX, the calculation of royalties and Sales Milestones payable with respect to such year shall be binding and conclusive upon the Parties and XXXXXXX shall be released from any liability or accountability with respect to royalties and Sales Milestones for such Calendar Yearaudit report.

Financial Audits. XXXXXXX Alimera shall maintain complete keep, and shall cause its Affiliates, and Sublicensees to keep, full and accurate records regarding and books of account containing information that may be necessary for the purpose of calculating Royalties, as detailed in the Royalty Reports, including reports and supporting data detailing Net Sales, Gross Revenues, Royalties, the number of units of Products sold or otherwise transferred, including but not limited to sales ledgers and records, general ledgers, and sublicensee reporting to Alimera. Such books of account, records and reports, with all items necessary supporting data, shall be kept by Axxxxxx at its place of business for the [***] following the end of the Calendar Year to which each shall pertain. Alimera shall permit an independent accounting firm selected by ExxXxxxx and reasonably acceptable to Axxxxxx (the “Audit Firm”), which acceptance shall not be reported in each Royalty Report and any other items unreasonably withheld or delayed, to have 36 access during normal business hours to such records as may be reasonably necessary to determine verify the accuracy of Axxxxxx’s reports of Net Sales, Gross Revenues, and Royalties as provided herein. Such Audit Firm may be required by Axxxxxx to enter into a commercially reasonable confidentiality agreement with it, and in no event shall such Audit Firm disclose to EyePoint any information from the books and records of Alimera or its Affiliates to which such Audit Firm has access during the course of such audit other than such information as it relates to the accuracy of the Milestone reports and the calculation of payments payable hereunder made or due hereunder. All such verifications shall be conducted at the expense of EyePoint and not more than [***] in each Calendar Year. The Audit Firm shall submit its final written report to both Parties. [***]. EyePoint shall be responsible for a period the fees, and expenses associated with the audit, provided, however, that if the audit concludes that an adjustment of [***] or more of the aggregate amount paid or payable by Axxxxxx to which such records pertain. Up to [***] prior written notice from LAVAEyePoint during the relevant period is due in EyePoint’s favor, XXXXXXX then Axxxxxx shall make available all such records to an independent, certified public accountant, selected by LAVA and reasonably acceptable to XXXXXXX, for such accountant to review and audit such records at LAVA’s expense in the location(s) where such records are maintained, during regular business hours and under obligations of confidence, be responsible for the sole purpose of verifying the accuracy of XXXXXXX’x Royalty Reports and the corresponding royalty payments or any Sales Milestone payments hereunder with respect to Products within the [***] period preceding such review and audit. LAVA shall treat EXECUTION COPY any records of XXXXXXX that are so reviewed and audited as Confidential Information of XXXXXXX subject to Clause 7reasonable fees, costs, and expenses charged by the Audit Firm. An audit under this Section 6.9 shall cause be limited to the independent, certified public accountant to retain all such records and information in confidence. The report books of the independent, certified public accountant shall be shared with XXXXXXX prior to distribution to LAVA such that XXXXXXX can provide the independent, certified public accountant with justifying remarks account for inclusion in the report prior to sharing the conclusions of such audit with LAVA; provided that such report shall be distributed to LAVA no later any Calendar Year ending not more than [***] after its distribution to XXXXXXXbefore the date of the request. The final audit report Parties agree that all information subject to review under this Section 6.9 is confidential and that EyePoint shall be shared with XXXXXXX and LAVA at cause its accounting firm to retain all such information subject to the same time and specify whether the amounts paid to LAVA were correct or, if incorrect, the amount confidentiality restrictions of any underpayment or overpayment. If such review and audit reveals an underpayment of royalties or Sales Milestones due to LAVA hereunder, XXXXXXX shall promptly pay LAVA any underpaid amounts due, and if such review and audit reveals an overpayment of royalties or Sales Milestones due to LAVA hereunder, XXXXXXX shall be entitled to credit such overpayments against subsequent payments that may become due hereunder; provided, however, that the foregoing shall not be construed to limit the application of Clause 11.1 with respect to any dispute regarding royalties or Sales Milestones due hereunder. In the event that such a review and audit identifies an underpayment of royalties due to LAVA hereunder greater than [***] of the royalty amounts actually due for the period reviewed and audited, or identifies any unpaid Sales Milestone that should have been paid, XXXXXXX shall reimburse LAVA for reasonable and documented Out-of-Pocket Costs incurred by LAVA for the conduct of such review and audit. Upon the expiration of [***], except with respect to (i) ongoing unresolved Disputes, if any, regarding royalties or Sales Milestones due hereunder for which arbitration proceedings have been initiated in accordance with Clause 11.1, and (ii) fraudulent activities by XXXXXXX, the calculation of royalties and Sales Milestones payable with respect to such year shall be binding and conclusive upon the Parties and XXXXXXX shall be released from any liability or accountability with respect to royalties and Sales Milestones for such Calendar YearARTICLE 7.

Financial Audits. XXXXXXX Alimera shall maintain complete keep, and shall cause its Affiliates, and Sublicensees to keep, full and accurate records regarding and books of account containing information that may be necessary for the purpose of calculating Royalties, as detailed in the Royalty Reports, including reports and supporting data detailing Net Sales, Gross Revenues, Royalties, the number of units of Products sold or otherwise transferred, including but not limited to sales ledgers and records, general ledgers, and sublicensee reporting to Alimera. Such books of account, records and reports, with all items necessary supporting data, shall be kept by Axxxxxx at its place of business for the [***] following the end of the Calendar Year to which each shall pertain. Alimera shall permit an independent accounting firm selected by ExxXxxxx and reasonably acceptable to Axxxxxx (the “Audit Firm”), which acceptance shall not be reported in each Royalty Report and any other items unreasonably withheld or delayed, to have access during normal business hours to such records as may be reasonably necessary to determine verify the accuracy of Axxxxxx’s reports of Net Sales, Gross Revenues, and Royalties as provided herein. Such Audit Firm may be required by Axxxxxx to enter into a commercially reasonable confidentiality agreement with it, and in no event shall such Audit Firm disclose to EyePoint any information from the books and records of Alimera or its Affiliates to which such Audit Firm has access during the course of such audit other than such information as it relates to the accuracy of the Milestone reports and the calculation of payments payable hereunder made or due hereunder. All such verifications shall be conducted at the expense of EyePoint and not more than [***] in each Calendar Year. The Audit Firm shall submit its final written report to both Parties. [***]. EyePoint shall be responsible for a period the fees, and expenses associated with the audit, provided, however, that if the audit concludes that an adjustment of [***] or more of the aggregate amount paid or payable by Axxxxxx to which such records pertain. Up to [***] prior written notice from LAVAEyePoint during the relevant period is due in EyePoint’s favor, XXXXXXX then Axxxxxx shall make available all such records to an independent, certified public accountant, selected by LAVA and reasonably acceptable to XXXXXXX, for such accountant to review and audit such records at LAVA’s expense in the location(s) where such records are maintained, during regular business hours and under obligations of confidence, be responsible for the sole purpose of verifying the accuracy of XXXXXXX’x Royalty Reports and the corresponding royalty payments or any Sales Milestone payments hereunder with respect to Products within the [***] period preceding such review and audit. LAVA shall treat EXECUTION COPY any records of XXXXXXX that are so reviewed and audited as Confidential Information of XXXXXXX subject to Clause 7reasonable fees, costs, and expenses charged by the Audit Firm. An audit under this Section 6.9 shall cause be limited to the independent, certified public accountant to retain all such records and information in confidence. The report books of the independent, certified public accountant shall be shared with XXXXXXX prior to distribution to LAVA such that XXXXXXX can provide the independent, certified public accountant with justifying remarks account for inclusion in the report prior to sharing the conclusions of such audit with LAVA; provided that such report shall be distributed to LAVA no later any Calendar Year ending not more than [***] after its distribution to XXXXXXXbefore the date of the request. The final audit report Parties agree that all information subject to review under this Section 6.9 is confidential and that EyePoint shall be shared with XXXXXXX and LAVA at cause its accounting firm to retain all such information subject to the same time and specify whether the amounts paid to LAVA were correct or, if incorrect, the amount confidentiality restrictions of any underpayment or overpayment. If such review and audit reveals an underpayment of royalties or Sales Milestones due to LAVA hereunder, XXXXXXX shall promptly pay LAVA any underpaid amounts due, and if such review and audit reveals an overpayment of royalties or Sales Milestones due to LAVA hereunder, XXXXXXX shall be entitled to credit such overpayments against subsequent payments that may become due hereunder; provided, however, that the foregoing shall not be construed to limit the application of Clause 11.1 with respect to any dispute regarding royalties or Sales Milestones due hereunder. In the event that such a review and audit identifies an underpayment of royalties due to LAVA hereunder greater than [***] of the royalty amounts actually due for the period reviewed and audited, or identifies any unpaid Sales Milestone that should have been paid, XXXXXXX shall reimburse LAVA for reasonable and documented Out-of-Pocket Costs incurred by LAVA for the conduct of such review and audit. Upon the expiration of [***], except with respect to (i) ongoing unresolved Disputes, if any, regarding royalties or Sales Milestones due hereunder for which arbitration proceedings have been initiated in accordance with Clause 11.1, and (ii) fraudulent activities by XXXXXXX, the calculation of royalties and Sales Milestones payable with respect to such year shall be binding and conclusive upon the Parties and XXXXXXX shall be released from any liability or accountability with respect to royalties and Sales Milestones for such Calendar YearARTICLE 7.

Financial Audits. XXXXXXX Qilu shall maintain keep (and shall cause its Affiliates and Sublicensees to keep) complete and accurate records regarding all items pertaining to be reported the sale or other disposition of Licensed Products in each Royalty Report and any other items necessary reasonable detail to determine permit Arbutus to confirm the accuracy of all royalty payments reported under Section 7.5 and Sales Milestone Events and corresponding Sales Milestones Payments reported under Section 7.4, for at least [***] following the Milestone end of the Calendar Year to which such records pertain. Arbutus shall have the right to cause an independent, certified public accountant of internationally recognized standing which shall be mutually agreed by the Parties (the “Auditor”) to audit such CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY “[***]”, HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL records solely to confirm Net Sales, royalty payments payable hereunder and commercial sales milestones for a period covering not more than the preceding [***]. Such audits shall be performed during normal business hours upon [***] days’ prior written notice to Qilu, and in a manner that does not interfere with Qilu’s or its applicable Affiliate’s or Sublicensee’s business activities for a period of [***] to which such records pertain]. Up to [***] prior The Auditor will execute a written notice from LAVA, XXXXXXX shall make available all such records to an independent, certified public accountant, selected by LAVA and reasonably confidentiality agreement that is acceptable to XXXXXXX, for Qilu with Qilu and will disclose to Arbutus only such accountant information as is reasonably necessary to review provide Arbutus with information regarding any actual or potential discrepancies between amounts reported and audit such records at LAVA’s expense in the location(s) where such records are maintained, during regular business hours and amounts actually paid or payable under obligations of confidence, for the sole purpose of verifying the accuracy of XXXXXXX’x Royalty Reports and the corresponding royalty payments or any Sales Milestone payments hereunder with respect to Products within the [***] period preceding such review and audit. LAVA shall treat EXECUTION COPY any records of XXXXXXX that are so reviewed and audited as Confidential Information of XXXXXXX subject to Clause 7, and shall cause the independent, certified public accountant to retain all such records and information in confidencethis Agreement. The report of the independentAuditor will include the methodology and calculations used to determine the results, certified public accountant shall will be shared with XXXXXXX prior delivered to distribution to LAVA such that XXXXXXX can provide the independent, certified public accountant with justifying remarks for inclusion in the report prior to sharing the conclusions of such audit with LAVA; provided that such report shall be distributed to LAVA no later than [***] after its distribution to XXXXXXX. The final audit report shall be shared with XXXXXXX Arbutus and LAVA Qilu at the same time time, and specify whether the amounts paid will be final after delivery to LAVA were correct or, if incorrect, both Parties. Qilu shall pay the amount of any underpayment or overpaymentdisclosed in any Auditor’s report, together with any interest owed thereon (calculated in accordance with Section 7.5(h)) within thirty (30) days after delivery to the Parties of the final Auditor’s report. If such review and audit reveals final Auditor’s report discloses an underpayment overpayment by Qilu of the royalties or Sales Milestones due to LAVA other amounts payable hereunder, XXXXXXX Qilu shall promptly pay LAVA any underpaid amounts duehave the right to offset such overpayment against future payments owed to Arbutus under this Agreement following the audit in question or, and if in the event no future payments are payable to Arbutus under this Agreement, Arbutus shall refund the amount of such review and audit reveals an overpayment of royalties to Qilu within thirty (30) days after written request by Qilu. Any disclosures or Sales Milestones due reports disclosed to LAVA hereunder, XXXXXXX Arbutus under this Section 7.7 shall be entitled to credit such overpayments against subsequent payments that may become due hereunder; provided, however, that the foregoing shall not be construed to limit the application of Clause 11.1 with respect to any dispute regarding royalties or Sales Milestones due hereunder. In the event that such a review and audit identifies an underpayment of royalties due to LAVA hereunder greater than [***] of the royalty amounts actually due for the period reviewed and audited, or identifies any unpaid Sales Milestone that should have been paid, XXXXXXX shall reimburse LAVA for reasonable and documented Out-of-Pocket Costs incurred by LAVA for the conduct of such review and audit. Upon the expiration of [***], except with respect to (i) ongoing unresolved Disputes, if any, regarding royalties or Sales Milestones due hereunder for which arbitration proceedings have been initiated in accordance with Clause 11.1, and (ii) fraudulent activities by XXXXXXX, the calculation of royalties and Sales Milestones payable with respect to such year shall be binding and conclusive upon the Parties and XXXXXXX shall be released from any liability or accountability with respect to royalties and Sales Milestones for such Calendar YearQilu’s Confidential Information.