Common use of Right of Audit Clause in Contracts

Right of Audit. ENACT shall maintain accurate records of (a) -------------- marketing expenses incurred in compliance with Section 5.3 hereof, and (b) Net Sales of Products and Services in the Territory, the dates of sale, the price of the Products and Services sold, and other information relating to discounts, cancellations and the like. To ensure compliance with the terms of this Agreement, ALZA shall have the right to have an inspection and audit of all the relevant accounting and sales books and records of ENACT conducted by an independent audit firm reasonably acceptable to both parties, and any such inspection and audit shall be conducted during regular business hours at ENACT's offices and in such a manner as not to interfere with ENACT's normal business activities. ENACT agrees to cooperate fully with any such audit. In no event shall audits be made hereunder more frequently than every six (6) months. Such audit firm shall present to ENACT and ALZA a confidential summary of its conclusions as to what marketing expenses have been incurred by ENACT and whether commissions paid are sufficient under this Agreement, and such audit firm shall keep confidential all information disclosed or made available to it by ENACT in the investigation. If such inspections should disclose any underreporting of commissions, ENACT shall promptly pay ALZA such amount, together with interest thereon at the rate of 1-1/2% per month or the highest interest rate allowed by law, whichever is lower from [*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. the date on which such amount became due, plus the cost of the audit, including, without limitation, the fee of the independent audit firm. If an inspection does not disclose any underreporting of commission in excess of five percent (5%) over the course of the applicable audit period or is requested solely for purposes of verifying marketing expenses, ALZA shall bear the cost of the audit.

Right of Audit. ENACT shall maintain accurate records In the event of (a) -------------- marketing expenses incurred in compliance with Section 5.3 hereofany good faith dispute as to the amount of the Property Operating Costs, and (b) Net Sales of Products and Services as set forth in the TerritoryProperty Operating Cost Statement forwarded to Tenant by Landlord, the dates of salepursuant to Section 3.3.2, the price of the Products and Services sold, and other information relating to discounts, cancellations and the like. To ensure compliance with the terms of this Agreement, ALZA Tenant shall have the right to inspect Landlord's Property Operating Cost records for the Building and the Property at Landlord's offices; provided, however, that Tenant is not in default under the terms of this Lease at the time such request for such inspection is made, no more frequently than once per calendar year, and upon not less than thirty (30) days prior written notice to Landlord and at reasonable times. Tenant shall further have the right to photocopy Landlord's Property Operating Cost records for the Building and the Property at Landlord's offices, in the event that Tenant requests that an inspection and audit of all the relevant accounting and sales books and records of ENACT conducted by an independent audit firm reasonably acceptable to both partiesbe made. If, and any after such inspection and audit photocopying, Tenant continues, in good faith, to dispute the amount of the Property Operating Costs, as set forth in said Property Operating Cost Statement, Tenant shall be conducted during regular business hours at ENACTentitled not later than ninety (90) days following Tenant's offices and in such receipt of Property Operating Cost Statement to retain a manner as national, independent, certified public accountant, who is not to interfere with ENACT's normal business activities. ENACT agrees to cooperate fully with any such audit. In no event shall audits be made hereunder more frequently than every six (6) months. Such audit firm shall present to ENACT and ALZA contracted on a confidential summary of its conclusions as to what marketing expenses have been incurred by ENACT and whether commissions paid are sufficient under this Agreementcontingency fee basis, and who is mutually acceptable to Landlord and Tenant, to audit Landlord's Property Operating Cost records, with respect to the calendar year covered by said Property Operating Cost Statement, to determine the proper amount of the Property Operating Costs. Landlord shall be entitled to review the results of such audit firm shall keep confidential all information disclosed or promptly after completion of same. If the results of such audit states that Landlord has overcharged Tenant, then within a reasonable time after the results of the audit are made available to it by ENACT in Landlord, Landlord shall credit Tenant the investigationamount of such overcharge toward the payments of Base Rent and Additional Rent next coming due under this Lease, until such amount has been fully exhausted. If such inspections should disclose any underreporting of commissionsaudit proves that Landlord has undercharged Tenant, ENACT shall promptly pay ALZA such amount, together with interest thereon at then within fifteen (15) days after the rate of 1-1/2% per month or the highest interest rate allowed by law, whichever is lower from [*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. the date on which such amount became due, plus the cost results of the auditaudit are made available to Tenant, including, without limitation, Tenant shall pay to Landlord the fee amount of the independent audit firm. If an inspection does not disclose any underreporting of commission in excess of five percent (5%) over the course of the applicable audit period or is requested solely for purposes of verifying marketing expenses, ALZA shall bear the cost of the auditsuch undercharge.

Right of Audit. ENACT shall maintain accurate In the event Operating Expenses increase by more than four percent (4%) in any given Expense Year (as measured against the actual Operating Expenses for the immediately preceding Expense Year), Tenant or its designated representative, at its sole expense, will have the right once per calendar year during the Term to audit Landlord’s books and records relating to the Operating Expenses for the immediately preceding calendar year by providing written notice to Landlord of (a) -------------- marketing expenses incurred in compliance with Section 5.3 hereof, and (b) Net Sales of Products and Services its desires to conduct such audit. This audit must take place on a mutually agreeable date during reasonable business hours at Landlord’s offices in the Territory, the dates of sale, the price Raleigh-Durham area where it retains such records and only after Tenant has given Landlord at least fourteen (14) calendar days prior written notice of the Products date and Services soldtime Tenant desires to commence such audit. If Tenant elects to audit Landlord’s books and records, and other information relating to discounts, cancellations and the like. To ensure compliance with the terms of this Agreement, ALZA shall Tenant will have the right to have perform an inspection and audit of all the relevant accounting and sales books and records of ENACT Operating Expenses for the immediately preceding two (2) calendar years, such audit to be conducted by an independent audit a reputable accounting firm reasonably acceptable to both parties, and not on a contingency basis. If any such inspection and audit shall be conducted during regular business hours at ENACT's offices and reveals an error by Landlord resulting in such a manner as not an overcharge to interfere with ENACT's normal business activitiesTenant, then Landlord will promptly reimburse Tenant for the amount erroneously charged to Tenant. ENACT agrees to cooperate fully with Likewise, if any such auditaudit reveals an error resulting in Tenant being undercharged, then Tenant will promptly reimburse Landlord for the amount of such deficiency. In no event shall audits be made hereunder more frequently than every six (6) months. Such If any audit firm shall present to ENACT and ALZA a confidential summary of its conclusions as to what marketing expenses performed by Tenant reveals that the Operating Expenses in total have been incurred overstated by ENACT and whether commissions paid are sufficient under this Agreement, and such audit firm shall keep confidential all information disclosed or made available to it by ENACT in the investigation. If such inspections should disclose any underreporting of commissions, ENACT shall promptly pay ALZA such amount, together with interest thereon at the rate of 1-1/2% per month or the highest interest rate allowed by law, whichever is lower from [*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. the date on which such amount became due, plus the cost of the audit, including, without limitation, the fee of the independent audit firm. If an inspection does not disclose any underreporting of commission in excess of more than five percent (5%) over the course of the applicable audit period or is requested solely ), Landlord will pay and/or reimburse Tenant for purposes of verifying marketing expenses, ALZA shall bear the cost of the auditaudit not to exceed Two Thousand Five Hundred Dollars ($2,500.00) and if any audit performed by Tenant does not reveal that the Operating Expenses in total have been overstated at all, then Tenant will pay and/or reimburse Landlord for its costs incurred as a result of the audit not to exceed Two Thousand Five Hundred Dollars ($2,500.00).

Right of Audit. ENACT shall maintain accurate records of (a) -------------- marketing expenses incurred For a period of beginning on the Closing Date and ending 90 days after the end of the later of the Earnout Maintenance Period and the Earnout License Period, Buyer shall keep at its principal place of business full, accurate and complete records and books of account in compliance with Section 5.3 hereofsuch detail as to allow Seller to make an accurate determination of all payments of the Earnout Purchase Price due pursuant to this Agreement. All such books and records shall be available during normal business hours upon reasonable notice for examination, inspection and audit by Seller or its duly authorized independent accountants; provided, however, Seller or its duly authorized independent accountants shall not examine, inspect or audit such books and records more than two times in any given calendar year and no more than one time in any six month period. (b) Net Sales In the event that Seller conducts or has conducted an examination, audit or inspection of Products and Services in the Territory, the dates of sale, the price of the Products and Services sold, and other information relating to discounts, cancellations and the like. To ensure compliance with the terms of this Agreement, ALZA shall have the right to have an inspection and audit of all the relevant accounting and sales Buyer's books and records and, as a result of ENACT conducted by such examination, audit, or inspection, it is determined that there are unreported amounts payable to Seller under the Earnout Purchase Price, Seller shall communicate such determination in writing to Buyer which communication shall state with reasonable specificity the basis for such determination (an independent audit firm reasonably acceptable "Earnout Objection"). Buyer shall have 10 Business Days from receipt of an Earnout Objection to both partiesrespond in writing to such Earnout Objection. If Buyer fails to respond in writing to the Earnout Objection within the period required, then Buyer shall have no further right to challenge such Earnout Objection and any such inspection and audit Earnout Objection shall be conducted final, binding and conclusive. If, however, Buyer responds in writing to Seller during regular business hours at ENACTsuch period and Buyer and Seller can not resolve the matter in dispute within 10 Business Days from Seller's offices and receipt of Buyer's response, such matter shall be resolved in such a manner as not to interfere accordance with ENACT's normal business activitiesSection 9.4(c). ENACT agrees to cooperate fully with any such audit. In no event shall audits be made hereunder more frequently than every six Within five (65) months. Such audit firm shall present to ENACT and ALZA a confidential summary of its conclusions as to what marketing expenses have been incurred by ENACT and whether commissions paid are sufficient under this Agreement, and such audit firm shall keep confidential all information disclosed or made available to it by ENACT in the investigation. If such inspections should disclose any underreporting of commissions, ENACT shall promptly pay ALZA such amount, together with interest thereon at the rate of 1-1/2% per month or the highest interest rate allowed by law, whichever is lower Business Days from [*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. the date on which either (i) an Earnout Objection becomes final, binding and conclusive, (ii) Seller and Buyer agree to an adjustment to the Earnout Purchase Price, or (iii) the matter is resolved in accordance with Section 9.4(c), Buyer shall pay to Seller by plain check, the unreported amounts payable to Seller under the Earnout Purchase Price. (c) The disagreement shall be tendered to by a firm of independent certified public accountants of recognized national standing ("Independent Accountant") which does not at the time of retention provide and has not in the prior three (3) years provided auditing services to Buyer or Seller (or to either of their Affiliates) to make a determination as to the subject matter of such amount became duedisagreement, plus which determination shall be final, binding and conclusive on the cost parties hereto for the purpose of this Agreement. All fees and expenses charged by the Independent Accountant under this Section 9.4(c) shall be shared equally by Seller and Buyer. If Buyer and Seller are unable to agree on the Independent Accountant, Buyer and Seller will submit the name of one accounting firm that satisfies the criteria of this Section 9.4(c) and the Independent Accountant will be randomly selected by lot from those two accounting firms. The Independent Accountant shall be instructed to use every reasonable effort to perform its function within 30 days following submission of the auditmatter to it and, includingin any case, without limitation, the fee of the independent audit firm. If an inspection does not disclose any underreporting of commission in excess of five percent (5%) over the course of the applicable audit period or is requested solely for purposes of verifying marketing expenses, ALZA shall bear the cost of the auditas soon as practicable after such submission to it.

Right of Audit. ENACT shall maintain accurate records In the event Tenant gives timely notice of (a) -------------- marketing expenses incurred a dispute as provided in compliance with Section 5.3 hereof5(f), and (b) Net Sales of Products and Services in the TerritoryTenant, the dates of saleacting through an independent nationally recognized accounting firm that is not being compensated by Tenant on a contingency fee basis, the price of the Products and Services sold, and other information relating to discounts, cancellations and the like. To ensure compliance with the terms of this Agreement, ALZA shall have the right right, upon reasonable advance notice and during business hours, to have an inspection and audit of all inspect the relevant accounting and sales books and records of ENACT conducted Landlord applicable to the determination of such disputed statement for the purpose of verifying in good faith the information contained in such statement. Any such review shall take place at the location Landlord customarily maintains its books and records with respect to Operating Expenses and must be completed within sixty (60) days after the receipt of such statement by an independent audit firm reasonably acceptable Tenant. Landlord shall maintain at its office or the office of its managing agent full, complete and accurate books and records prepared in accordance with prudent building management practices with respect to both partiesOperating Expenses, and shall retain such records with respect to each calendar year for a period not less than one (1) year following delivery of the annual statement for such year. Tenant’s review of Landlord’s books and records shall be conditioned upon Tenant and its auditor confirming in writing that all information obtained by Tenant and its auditor as a result of such review, and any such inspection resulting compromise, settlement or adjustment between Landlord and audit Tenant, shall be conducted during regular business hours at ENACT's offices maintained as confidential and not disclosed to any other person. If as a result of such review by Tenant it is determined that Tenant’s payments on account of Operating Expenses covered by such annual statement were in excess of the amount actually payable by Tenant, Landlord shall grant Tenant a rent credit for the amount of such a manner as not excess within thirty (30) days after such determination. Similarly, if it is determined that Tenant’s payments on account were less than the amount actually due, Tenant shall pay the amount of the shortfall to interfere with ENACT's normal business activitiesLandlord within such thirty (30) day period. ENACT agrees to cooperate fully with any If it is determined that Tenant’s payments on account of the Operating Expenses covered by such audit. In no event shall audits be made hereunder annual statement exceeded the amount actually payable by Tenant by more frequently than every six percent (6) months. Such audit firm %), Landlord shall present to ENACT and ALZA a confidential summary reimburse Tenant for the reasonable out of its conclusions as to what marketing expenses have been pocket costs incurred by ENACT and whether commissions paid are sufficient under this Agreement, and Tenant in its review of such audit firm shall keep confidential all information disclosed or made available to it by ENACT annual statement. Except as provided in the investigation. If such inspections should disclose any underreporting of commissionspreceding sentence, ENACT shall promptly pay ALZA such amount, together with interest thereon at the rate of 1-1/2% per month or the highest interest rate allowed by law, whichever is lower from [*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. the date on which such amount became due, plus the cost of the auditany such review of Landlord’s books and records, includingincluding but not limited to any reasonable copying charges imposed by Landlord, without limitation, the fee of the independent audit firm. If an inspection does not disclose any underreporting of commission in excess of five percent (5%) over the course of the applicable audit period or is requested solely for purposes of verifying marketing expenses, ALZA shall bear the cost of the auditbe at Tenant’s sole expense.

Right of Audit. ENACT 7.1 The Licensee shall maintain accurate keep and make available for inspection upon reasonable notice, both during and for twelve months after termination of this Agreement, proper, detailed books and records of relating to (a) -------------- marketing expenses incurred in compliance with Section 5.3 hereof, the use of all Musical Works and (b) Net Sales any income or other consideration received by or on behalf of Products and Services the Licensee in relation to the TerritoryLicensed Services, together with any supporting documentation relating thereto covering the period up to six years prior to the date of notification of audit. 7.2 For the purposes of this clause 7, the dates of saleLicensee shall allow upon reasonable notice access to its premises to inspect relevant accounting record, the price but not more than once per annum. The duly authorised representatives of the Products Licensors shall have such access to the Licensee’s premises and Services soldshall be entitled to inspect, make extracts and other take copies of any of the information relating and/or documentation available and to discountscarry out such work as is, cancellations and the like. To ensure in their reasonable opinion, considered necessary to verify compliance with the terms provision of this Agreement. 7.3 If tests under any audit and verification process indicate under- payment of the correct licence fees during which monitoring has been carried out by or on behalf of the Licensors, ALZA shall have then, without prejudice to the right to have an inspection and audit of all the relevant accounting and sales books and records of ENACT conducted by an independent audit firm reasonably acceptable to both parties, and any such inspection and audit shall be conducted during regular business hours at ENACT's offices and in such a manner as not to interfere with ENACT's normal business activities. ENACT agrees to cooperate fully with any such audit. In no event shall audits be made hereunder more frequently than every six (6) months. Such audit firm shall present to ENACT and ALZA a confidential summary of its conclusions as to what marketing expenses have been incurred by ENACT and whether commissions paid are sufficient Licensors’ other rights under this Agreement, and such audit firm the Licensee shall keep confidential all information disclosed or made available pay the amount of the underpayment plus interest based on the period from which the correct fee should have been paid to the Licensors to the date when it by ENACT in the investigation. If such inspections should disclose any underreporting of commissionswas actually paid, ENACT shall promptly pay ALZA such amount, together with interest thereon at the rate set out in clause 6.4. 7.4 If any audit and verification process discloses under-payment of 1-1/2more than 7.5% per month or the highest interest rate allowed by law, whichever is lower from [*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. the date on which such amount became due, plus the cost of the auditcorrect licence fees during which monitoring has been carried out by or on behalf of the Licensors, includingthen, without limitationprejudice to the Licensors’ other rights under this Agreement, the fee Licensee shall pay, in addition to the payment referred to in clause 7.3, the Licensors’ reasonable costs of such audit and verification within 28 days of receipt of the independent audit firm. If an inspection does Licensors’ VAT invoice therefore. 7.5 The Licensors shall not (and shall procure that their representatives shall not), without the Licensee’s written consent, disclose to any underreporting third party any confidential information of commission the Licensee (so long as it remains confidential) received in excess of five percent (5%) over the course of an audit carried out under this clause 7, save that such confidential information may be disclosed to the applicable audit period or is requested Licensors’ directors, board and board sub-committee members, officers, employees and professional advisors (solely where such persons are under a duty of confidentiality in relation to information so received and the Licensors shall be liable to the Licensee in respect of any breach of such confidentiality obligation) solely for purposes connected with this Agreement. 7.6 For the avoidance of verifying marketing expensesdoubt, ALZA books, records and accounting records as referred to in clauses 7.1 and 7.2 above shall bear include data, information and records held on computers. 7.7 The Licensee shall, if requested by the cost of Licensors, provide a statement from its auditors (but not more than once per year) confirming that the auditfinancial information submitted by the Licensee for the relevant requested period is in accordance with the actual Gross Revenue (as defined under this Agreement) for that period.

Right of Audit. ENACT shall maintain accurate records On Tenant's written request given not more than ninety (90) days after Tenant's receipt of (a) -------------- marketing expenses incurred in compliance with Section 5.3 hereofthe statement for a particular year, and provided that Tenant is not then in default under this Lease beyond any applicable cure period provided in this Lease and that Tenant has paid all amounts required to be paid under the applicable statement, then Landlord shall provide Tenant with an audited statement (bAccountant's Statement) Net Sales of Products and Services in the Territory, the dates of sale, the price of the Products and Services soldOperating Costs (as defined above) for the Real Property for such year from Landlord's independent certified public accountants, and other Landlord shall also furnish Tenant with such reasonable supporting documentation in connection with the such Operating Costs as Tenant may reasonably request. Landlord shall provide this information relating to discounts, cancellations and the likeAccountant's Statement to Tenant within sixty (60) days after Tenant's written request for it. To ensure compliance with The Accountant's Statement shall contain sufficient detail to enable Tenant to verify that, in computing the Operating Costs payable by Tenant, Landlord has adhered to the terms of exclusions and inclusions for Operating Costs, as set forth in this AgreementLease. Within fifteen (15) days following Tenant's receipt of the Accountant's Statement, ALZA Tenant and Landlord shall have concurrently be provided with any audit report prepared for Tenant in connection with Tenant's review of the right to have an inspection and audit of all the relevant accounting and sales books and records of ENACT conducted by an independent audit firm reasonably acceptable to both partiesOperating Costs, and any such inspection and audit Tenant shall be conducted during regular business hours at ENACTadvise Landlord if Tenant disputes the Operating Costs or Tenant's offices and in such a manner share of them as not to interfere with ENACT's normal business activities. ENACT agrees to cooperate fully with any such audit. In no event shall audits be made hereunder more frequently than every six (6) months. Such audit firm shall present to ENACT and ALZA a confidential summary of its conclusions as to what marketing expenses have been incurred by ENACT and whether commissions paid are sufficient under this Agreement, and such audit firm shall keep confidential all information disclosed or made available to it by ENACT set forth in the investigationLandlord's statement for the applicable year. If such inspections should disclose any underreporting of commissionsThereafter, ENACT shall promptly pay ALZA such amount, together with interest thereon at the rate of 1-1/2% per month or the highest interest rate allowed by law, whichever if Landlord ascertains that an error has been made that is lower from [*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. the date on which such amount became due, plus the cost of the audit, including, without limitation, the fee of the independent audit firm. If an inspection does not disclose any underreporting of commission in excess of greater than five percent (5%) over ), Tenant's sole remedy shall be for the course parties to make such appropriate payments or reimbursements, as the case may be to each other as are determined to be owing, provided that any reimbursements payable by Landlord to Tenant may, at Landlord's option, instead be credited against the Minimum Monthly Rent next coming due under this Lease unless the Lease Term has expired, in which event Landlord shall refund the appropriate amount to Tenant. Tenant shall keep any information gained from its review of Landlord's records confidential and shall not disclose it to any other party, except as required by law. If requested by Landlord, Tenant shall require its employees or agents reviewing Landlord's records to sign a confidentiality agreement as a condition of Landlord providing the applicable audit period or is requested solely for purposes of verifying marketing expenses, ALZA shall bear the cost of the auditAccountant's Statement to Tenant.