Common use of Record Keeping; Audit Rights Clause in Contracts

Record Keeping; Audit Rights. CTI and its Affiliates (and licensees and sublicensees of the Product in the Territory) shall, consistent with GAAP and their respective internal financial control and reporting practices and procedures, keep and maintain for a period of three (3) years from the end of the applicable Calendar Year (except as otherwise provided herein) accounts and records of all data reasonably required to verify CTI’s reports under Section 5.3 and for the verification and calculation of the amounts to be paid to PharmaBio under this Agreement. To the extent that CTI or its Affiliates does not have the right to grant PharmaBio the right to audit its licensees’ and sublicensees’ books and records hereunder, CTI or its Affiliates shall obtain for itself such right and, at the request of the PharmaBio, CTI or its Affiliates shall exercise such audit right with respect to licensee or sublicensee using an auditor reasonably designated by PharmaBio and provide the results of such audit for inspection by PharmaBio pursuant to this Section 5.4. Upon reasonable advance notice, such records shall be made available for inspection and audit at CTI or its Affiliate’s place of business, as applicable, during normal business hours by an independent auditor appointed by PharmaBio and reasonably acceptable to CTI or its Affiliate, as applicable. Such an audit may be conducted once per annum during the Term (and during the Calendar Year thereafter) and solely for the purpose of verifying the accuracy of the reports of CTI under Section 5.3 and payments made to PharmaBio under the Agreement. Such audits will be conducted under conditions which reasonably ensure the confidentiality of information provided to such independent auditor. Audits conducted under this Section 5.4 shall be at the expense of PharmaBio, unless such audit reveals an underpayment of more than seven and one-half percent (7.5%) for the period of the audit, in which case CTI shall reimburse PharmaBio, as described below, for the out-of-pocket costs of such audit, together with the amount of the underpayment plus interest as calculated in Section 5.10, all as described in this Section 5.4 below. All information learned from such audits and the reports provided pursuant to Section 5.4 shall be deemed Confidential Information of CTI. If the independent auditor’s report shows any underpayment by CTI, CTI will remit to PharmaBio within forty-five (45) days after CTI’s receipt of such report: (i) the amount of such underpayment to PharmaBio; (ii) interest on such underpayment, which interest will be calculated pursuant to Section 5.10; and (iii) if such underpayment exceeds seven and one-half percent (7.5%) of CTI’s total payment owed to PharmaBio for the Calendar Year then being reviewed, the out-of-pocket costs incurred by PharmaBio for the independent auditor’s services. If the independent auditor’s report shows any overpayment by CTI, PharmaBio will remit to CTI within forty-five (45) days after PharmaBio’ receipt of such report: (i) the amount of such overpayment; and (ii) interest on such overpayment, which interest will be calculated pursuant to Section 5.10. The CTI Parties agree to include in any license or sublicense regarding the Product in the Territory a provision requiring the licensee and sublicensee to keep and maintain, in accordance with this Section, records of Net Sales and to grant access, in accordance with this Section, to such records to the independent certified public accountant selected by PharmaBio.

Record Keeping; Audit Rights. CTI Licensee shall keep accurate records (together with supporting documentation) of Specified Products made, used, or sold under this Agreement, appropriate for the purpose of verifying reports and its Affiliates (and licensees and sublicensees of the Product in the Territory) shall, consistent with GAAP and their respective internal financial control and reporting practices and procedures, keep and maintain payments due hereunder. Such records shall be retained for a period of three (3) years from at [***] after the end of the applicable Calendar Year (except as otherwise provided herein) accounts and reporting period to which such records relate. On the provision of all data reasonably required to verify CTI’s reports under Section 5.3 and for the verification and calculation of the amounts to be paid to PharmaBio under this Agreement. To the extent that CTI or its Affiliates does not have the right to grant PharmaBio the right to audit its licensees’ and sublicensees’ books and records hereunder, CTI or its Affiliates shall obtain for itself such right and, at the request of the PharmaBio, CTI or its Affiliates shall exercise such audit right with respect to licensee or sublicensee using an auditor reasonably designated by PharmaBio and provide the results of such audit for inspection by PharmaBio pursuant to this Section 5.4. Upon reasonable advance notice, such records shall be made available for inspection and audit at CTI or its Affiliate’s place of business, as applicable, during normal business hours for examination by an independent auditor appointed by PharmaBio and independent, certified public accountant reasonably acceptable to CTI Licensee appointed by FCDI, XXXX, or its Affiliate, as applicable. Such an audit may be conducted once per annum during the Term (and during the Calendar Year thereafter) and solely their respective representatives for the purpose of verifying reports and payments due hereunder. In conducting such examinations pursuant to this Article 5 (Record Keeping), such accountant or other auditor shall have access to, all Licensee and Permitted Sublicensee records that it reasonably believes to be relevant for the purpose of verifying reports and payments due hereunder. Such accountant or other auditor, as applicable, shall be under reasonable written obligations of confidentiality to the audited entity and shall not disclose to FCDI, XXXX and their respective representatives any information other than information relating to the accuracy of the reports of CTI under Section 5.3 and payments made to PharmaBio delivered under the this Agreement. Such audits will In addition, the auditor shall disclose its draft conclusions to Licensee and the basis for such conclusions, prior to making its final report to FCDI, XXXX, or their respective representatives, as applicable, and shall reasonably consider Licensee’s comments in response thereto (if any). The accounting records as to any accounting period shall not be conducted under conditions which reasonably ensure audited more than once, nor more than [***] after the confidentiality end of information provided to such independent auditoraccounting period. Audits conducted under this Section 5.4 The foregoing examination shall be at FCDI’s expense; provided that if such examination shows an underreporting or underpayment for any calendar year in excess of the expense lesser of PharmaBio[***] of the royalties paid for that year or [***], unless then Licensee shall pay the cost of such audit reveals an underpayment examination together with amounts due in arrears with interest thereon calculated at the rate of more than seven [***], or such lower maximum rate permitted by law. Any conclusions of underreporting resulting from any such examination together with any supporting evidence will be provided to Licensee. Without prejudice to Licensee’s retained rights to dispute any findings in accordance with Section 17.5 (Dispute Resolution), any undisputed amounts due for examination expenses, underpaid royalties, and oneinterest thereon shall be paid by Licensee within [***] of written demand from FCDI. The Parties shall endeavor in good faith to resolve any such disputed amounts. Absent agreement, and following referral of such dispute to the Executive Officer for attempted resolution under Section 17.5 (Dispute Resolution), either Party may require review of disputed amounts by referral for a final and binding resolution (including, for clarity, for purposes of FCDI’s liability with respect to payments under the XXXX In-half percent (7.5%License Agreement) to a firm of internationally recognized accountants mutually agreed to by the Parties; provided that no such firm shall have been retained by either Party during the [***] period prior to such referral. A Party wishing to refer such a Dispute for resolution shall deliver notice of such desire [***] of the expiry of the period of for resolution by the audit, in which case CTI shall reimburse PharmaBio, as described below, for the out-of-pocket costs of such audit, together with the amount of the underpayment plus interest as calculated in Section 5.10, all as described in this Section 5.4 below. All information learned from such audits and the reports provided Executive Officers pursuant to Section 5.4 17.5 (Dispute Resolution), and the Parties shall be deemed Confidential Information of CTIselect a firm for referral within [***] thereafter. If Notwithstanding anything to the independent auditor’s report shows any underpayment by CTI, CTI will remit to PharmaBio within forty-five (45) days after CTI’s receipt of such report: (i) the amount of such underpayment to PharmaBio; (ii) interest on such underpayment, which interest will be calculated pursuant to Section 5.10; and (iii) if such underpayment exceeds seven and one-half percent (7.5%) of CTI’s total payment owed to PharmaBio for the Calendar Year then being reviewed, the out-of-pocket costs incurred by PharmaBio for the independent auditor’s services. If the independent auditor’s report shows any overpayment by CTI, PharmaBio will remit to CTI within forty-five (45) days after PharmaBio’ receipt of such report: (i) the amount of such overpayment; and (ii) interest on such overpayment, which interest will be calculated pursuant to Section 5.10. The CTI Parties agree to include contrary in any license this Agreement or sublicense regarding the Product in the Territory a provision requiring the licensee and sublicensee XXXX In-License Agreement (including Sections 3B or 6A thereof), neither FCDI nor any Wisconsin Entity shall have any right or ability to keep and maintainaudit, in accordance with this Sectionreview, records of Net Sales and to grant access, in accordance with this Section, to such records to the independent certified public accountant selected by PharmaBioor otherwise access any Developments for any purpose.

Record Keeping; Audit Rights. CTI (a) For the Term and its Affiliates at least for a term of five (5) years thereafter, PIVOT shall maintain complete and licensees accurate books and sublicensees records of account, in accordance with GAAP, of all transactions and other business activities under this Agreement, sufficient to confirm (i) the accuracy of all reports furnished by PIVOT to SOLMIC under this Agreement, in particular of the Product Royalty Reports; and (ii) all payments paid or payable by PIVOT to SOLMIC under this Agreement, in the Territoryparticular under this Article 7. (b) shallUpon reasonable prior notice, consistent with GAAP PIVOT shall permit an independent nationally recognized certified public accounting firm (subject to obligations of confidentiality to PIVOT), appointed by SOLMIC and their respective internal financial control and reporting practices and proceduresreasonably acceptable to PIVOT, keep and maintain for a period of three (3) years from the end of to inspect the applicable records of PIVOT to the extent relating to payments to SOLMIC (including to verify the Royalty Reports); provided however, that such inspection shall not occur more often than twice per Calendar Year (except as otherwise provided herein) accounts and records of all data reasonably required to verify CTI’s reports under Section 5.3 and for the verification current and calculation preceding Calendar Year), unless a material error is discovered as part of the amounts to be paid to PharmaBio under this Agreement. To the extent that CTI or its Affiliates does not such inspection in which case SOLMIC shall have the right to grant PharmaBio conduct a more thorough inspection for such period. Notwithstanding anything to the right contrary contained in this Agreement, neither such public accounting firm nor SOLMIC shall be entitled to audit review, and PIVOT shall not be required to provide, its licensees’ and sublicensees’ books and tax returns or tax records hereunder, CTI or those of its Affiliates shall obtain for itself such right and, at the request of the PharmaBio, CTI or its Affiliates shall exercise such audit right with respect to licensee or sublicensee using an auditor reasonably designated by PharmaBio and provide the results of such audit for sublicensees. Any inspection by PharmaBio pursuant to this Section 5.4. Upon reasonable advance notice, such records shall be made available for inspection and audit at CTI or its Affiliate’s place of business, as applicable, during normal business hours by an independent auditor appointed by PharmaBio and reasonably acceptable to CTI or its Affiliate, as applicable. Such an audit may be conducted once per annum during the Term (and during the Calendar Year thereafter) and solely for the purpose of verifying the accuracy of the reports of CTI under Section 5.3 and payments made to PharmaBio under the Agreement. Such audits will be conducted under conditions which reasonably ensure the confidentiality of information provided to such independent auditor. Audits conducted under this Section 5.4 shall be at the expense of PharmaBioSOLMIC, unless such audit inspection reveals an any underpayment of more than seven and one-half the payments due hereunder for the audited period by at least five percent (7.55%) for the period of the audit), in which case CTI shall reimburse PharmaBio, as described below, for the out-of-pocket full costs of such audit, together inspection for such period shall be borne by PIVOT. Any underpayment shall be paid by PIVOT to SOLMIC within thirty (30) days of written notice with interest on the amount underpayment at the rate specified in Section 7.6(b) from the date such payment was originally due. Any overpayment shall be credited against future amounts due by PIVOT to SOLMIC. (c) In the event of a dispute regarding the findings of the underpayment plus interest as calculated inspection of the applicable records of PIVOT, the Parties shall work in Section 5.10, all as described in this Section 5.4 below. All information learned from such audits and good faith to resolve the reports provided pursuant to Section 5.4 shall be deemed Confidential Information of CTIdispute. If the independent auditorParties are unable to resolve the dispute in good faith within thirty (30) days, the dispute shall be submitted for decision to a certified public accounting firm mutually selected by each Party’s report shows any underpayment by CTI, CTI will remit certified public accountants or to PharmaBio within forty-five such other Third Party as the Parties shall mutually agree. The decision of such expert shall be final and the costs of such decision as well as the initial audit shall be borne between the Parties in such manner as such expert shall determine. Not later than thirty (4530) days after CTI’s receipt of such report: (i) the amount of such underpayment to PharmaBio; (ii) interest on such underpayment, which interest will be calculated pursuant to Section 5.10; and (iii) if such underpayment exceeds seven decision and one-half percent (7.5%) of CTI’s total payment owed to PharmaBio for the Calendar Year then being reviewed, the out-of-pocket costs incurred by PharmaBio for the independent auditor’s services. If the independent auditor’s report shows any overpayment by CTI, PharmaBio will remit to CTI within forty-five (45) days after PharmaBio’ receipt of such report: (i) the amount of such overpayment; and (ii) interest on such overpayment, which interest will be calculated pursuant to Section 5.10. The CTI Parties agree to include in any license or sublicense regarding the Product in the Territory a provision requiring the licensee and sublicensee to keep and maintain, in accordance with such decision, PIVOT shall make any additional payments to SOLMIC. Any overpayment shall be credited against future amounts due by PIVOT to SOLMIC. For the avoidance of doubt: Any dispute subject to dispute resolution pursuant to this Section, records of Net Sales and to grant access, in accordance with this Section, to such records Section 7.7(c) shall not be subject to the independent certified public accountant selected by PharmaBioterms and conditions of Section 16.7 or Article 13.