Provision Language
7. Required Reporting; Audit Rights
In addition to any and all reports required to be delivered to the Foundation under Section 8 below, the Company shall furnish, or cause to be furnished, to the Foundation the following reports and certifications:
(a) Within ninety (90) days after the end of each of the Company’s fiscal years during which the Foundation owns any Foundation Stock, a certificate from the Company signed by an officer or director of the Company and substantially in the form attached to this Letter Agreement as Appendix 1, certifying that the requirements of the Foundation Investment set forth in this Letter Agreement were met during the immediately preceding fiscal year, describing the use of the proceeds of the Foundation Investment and evaluating the Company’s progress toward achieving the Global Access Commitments;
(b) Within ninety (90) days after the end of the Company’s fiscal year during which the Foundation ceases to own any Foundation Stock, a certificate from the Company signed by an officer or director of the Company and substantially in the form attached to this Letter Agreement as Appendix 2, certifying that the requirements of the Foundation Investment set forth in this Letter Agreement were met during the time that the Foundation held any Foundation Stock, describing the use of the proceeds of the Foundation Investment and evaluating the Company’s progress toward achieving the Global Access Commitments;
(c) Any other information respecting the operations, activities and financial condition of the Company as the Foundation may from time to time reasonably request to discharge any expenditure responsibility, within the meaning of Sections4945(d)(4) and 4945(h) of the Code, of the Foundation with respect to the Foundation Investment, and to otherwise monitor the charitable benefits intended to be served by the Foundation Investment. The Foundation will reimburse the Company for any reasonable third-party expenses incurred by the Company in order to prepare any information the Company is required to prepare solely as a result of this Section 7(c); and
(d) During the two (2) years following the date of this Letter Agreement, within thirty (30) days after the end of each of the Company’s fiscal quarters during which the Foundation owns any Foundation Stock, a financial report showing the Company’s projected income statement, cash flow statement and balance sheet for each fiscal quarter remaining in the current fiscal year and the following fiscal year.
(e) Full and complete financial reports of the type ordinarily required by commercial investors under similar circumstances to the extent required pursuant to Treasury Regulation 53.4945-5(b)(4) , provided that as long as the Company is a reporting company under the Exchange Act, the timely filing of quarterly, annual and current reports pursuant to section 13 or15(d) of the Exchange Act and all other required filings with the SEC shall be deemed to satisfy the financial reporting obligations in this Section 7(d).
(f) The following programmatic reports:
(i) Progress report on process development to scale-up and mass produce AA and AD to the necessary quality standards including the resulting COGS and new Strain development. Such report will be provided quarterly for the first 12 months after the date of this Letter Agreement, semi-annually for the next 12 months and annually thereafter.
(ii) Annual report on sales of AA and AD, including the volume, price, Purchasers and COGS.
(g) The Company will maintain adequate accounting records and copies of any reports submitted to the Foundation related to sales of AA and AD to Purchasers. The Company will retain such records and reports for 4 years after the Foundation’s funds are fully spent and will make such records and reports available, pursuant to Section 8 below, to enable the Foundation to monitor and evaluate how the Foundation’s funds have been used.
8. Access to Records
The Company shall maintain books and records adequate to provide such information as is necessary to comply with Treasury Regulations section 53.4945-5(b)(4), as amended from time to time. The Company shall provide the Foundation access to such books and records at reasonable times for a period beginning on the Closing Date (as defined in the SPA) and ending four years after the date on which the Foundation no longer holds any Foundation Stock. For the avoidance of doubt, the Foundation’s access shall not be dependent upon the Foundation’s percentage ownership in the Company.
Without limiting the generality of the foregoing paragraph, the Company agrees to permit employees or agents of the Foundation, all of whom are bound by written confidentiality obligations or policies substantially similar to the Foundation’s obligations under the CDA, at any reasonable time and upon reasonable prior notice, during normal business hours, to examine or audit the Company’s relevant books and accounts of record and to make copies and memoranda of the same, in each case at the Foundation’s expense to audit the Company’s compliance with the use of the Foundation Investment, the Global Access Commitments (including COGS and total cost of ownership) and the reporting requirements set forth herein; provided that the Foundation will not conduct such an examination or audit more frequently than once per calendar year unless required due to any audit, request or inquiry of the Foundation by the Internal Revenue Service or because the Company previously materially failed such an annual audit. If the Company maintains any relevant records (including computer-generated records and computer software programs for the generation of such records) in the possession of a third party, the Company, upon request of the Foundation, will notify such party to permit the Foundation free access to such records at all reasonable times and to provide the Foundation with copies of any records it may reasonably request in connection with such audit, request or inquiry, all at the Foundation’s expense. All such information provided or disclosed hereunder that constitutes Proprietary Information as defined in the CDA is subject to the CDA.