Common use of Audit Procedure Clause in Contracts

Audit Procedure. Upon at least [***] Business Days’ prior written notice from the auditing Party, such audit shall be conducted with respect to the countries specifically requested by the auditing Party, during regular business hours in such a manner as to not unnecessarily interfere with the normal business activities of the Party being audited. Such audit shall not be performed more frequently than [***] nor more frequently than [***]. All information, data, documents and abstracts herein referred to shall be used only for the purpose of verifying Royalty statements or costs and expenses incurred and shall be treated as the Confidential Information of the Party being audited subject to the obligations of this Agreement and need neither be retained more than [***] after completion of an audit hereof, if an audit has been requested; nor more than [***] from the end of the Calendar Year to which each shall pertain; nor more than [***] after the date of expiration or termination of this Agreement. Audit results and findings shall be made without interpretation of contractual language and shared by Vertex and Alios and the accounting firm shall disclose to the auditing Party only whether the royalty reports or expense reports, as applicable, are correct or incorrect and the specific details concerning any discrepancies. If the audit reveals an overpayment, then the auditing Party shall reimburse the Party being audited for the amount of the overpayment within [***]. If the audit reveals an underpayment, then the Party being audited shall make up such underpayment within [***]. Upon expiration of [***] following the end of any Calendar Year, the calculation of Royalties payable or costs and expenses with respect to such Calendar Year shall be binding and conclusive upon the Parties, and the Party obligated to make such royalty payments or the Party receiving reimbursement of costs and expenses hereunder, its Affiliates and Sublicensees shall be released from any liability or accountability with respect to such payments for such Calendar Year. The auditing Party shall pay for any such audit, except that if (i) Vertex underpaid payments by more than [***] during the period in question as per the audit or (ii) Alios overstated its costs and expenses by more than [***] during the period in question as per the audit, such audited Party shall pay the reasonable costs of the audit.

Audit Procedure. Upon at least At the request of the other Party, each Party shall, and shall cause its Affiliates to, as applicable, permit an independent public accounting firm of [***] Business Days’ prior written notice from Portions of this page have been omitted and filed separately with the auditing Party, such audit shall be conducted Securities and Exchange Commission. Confidential treatment has been requested with respect to the countries specifically requested omitted portions. nationally recognized standing designated by the auditing other Party and reasonably acceptable to the audited Party, at reasonable times during regular normal business hours in such a manner as and upon reasonable notice, to not unnecessarily interfere with audit the normal business activities books and records of the audited Party being auditedto ensure the accuracy of all reports and payments made hereunder. Such audit shall not examinations may not: (i) be performed more frequently than [***] nor more frequently than [***]. All information, data, documents and abstracts herein referred to shall be used only conducted for the purpose of verifying Royalty statements or costs and expenses incurred and shall be treated as the Confidential Information of the Party being audited subject to the obligations of this Agreement and need neither be retained any Calendar Quarter more than [***] three (3) years after completion of an audit hereof, if an audit has been requested; nor more than [***] from the end of the Calendar Year to which each shall pertainsuch quarter; nor (ii) be conducted more than [***] after the date of expiration once in any twelve (12) month period (unless a previous audit during such twelve (12)-month period revealed an underpayment or termination of this Agreementother material issues with respect to such period); or (iii) be repeated for any Calendar Quarter. Audit results and findings shall be made without interpretation of contractual language and shared by Vertex and Alios and the The accounting firm shall disclose to the auditing Party only whether the royalty reports or expense reports, as applicable, and payments are correct or incorrect not, and the specific details concerning any discrepanciesdiscrepancies or noncompliance with this Agreement. If No other information shall be shared. Except as provided below, the cost of this audit shall be borne by the auditing Party, unless the audit reveals an overpaymenta variance of more than five percent (5%) from the reported amounts, then in which case the audited Party shall bear the cost of the audit. Unless disputed pursuant to Section 4.5(c) below, if such audit concludes: (y) additional amounts were owed by the audited Party, the audited Party shall pay the additional amounts, with interest from the date originally due as provided in Section 4.4; or (z) excess payments were made by the audited Party, the auditing Party shall reimburse the Party being audited for the amount of the overpayment within [***]. If the audit reveals an underpaymentsuch excess payments, then the Party being audited shall make up such underpayment within [***]. Upon expiration of [***] following the end of any Calendar Year, the calculation of Royalties payable or costs and expenses with respect to such Calendar Year shall be binding and conclusive upon the Parties, and the Party obligated to make such royalty payments or the Party receiving reimbursement of costs and expenses hereunder, its Affiliates and Sublicensees shall be released from any liability or accountability with respect to such payments for such Calendar Year. The auditing Party shall pay for any such audit, except that if in either case (i(y) Vertex underpaid payments by more than [***] during the period in question as per the audit or (iiz)), within sixty (60) Alios overstated its costs and expenses days after the date on which such audit is completed by more than [***] during the period in question as per the audit, such audited Party shall pay the reasonable costs of the auditauditing Party.