PRODUCT TO KEEP, FOR FIVE (5) YEARS
FROM THE DATE OF EACH PAYMENT OF ROYALTIES, COMPLETE AND ACCURATE RECORDS OF NET
SALES OF EACH PRODUCT IN SUFFICIENT DETAIL TO ALLOW THE ROYALTIES TO BE
DETERMINED ACCURATELY.
LICENSOR WILL HAVE THE
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RIGHT FOR A PERIOD OF FIVE (5) YEARS AFTER RECEIVING ANY REPORT OR STATEMENT
WITH RESPECT TO ROYALTIES DUE AND PAYABLE OR AFTER DELIVERY OF SUCH REPORT IS
REQUIRED, TO APPOINT AN INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT WITH NATIONAL
PRESENCE AND REPUTATION THAT IS NOT LICENSOR'S AUDITOR TO INSPECT THE RELEVANT
RECORDS TO VERIFY SUCH REPORT OR STATEMENT.
LICENSEE WILL MAKE ITS RECORDS AND
THE RECORDS OF ITS AFFILIATES AVAILABLE (INCLUDING ANY NET SALES REPORTS
RECEIVED FROM ITS SUBLICENSEES SELLING PRODUCTS) FOR INSPECTION BY SUCH
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT DURING REGULAR BUSINESS HOURS AT SUCH
PLACE OR PLACES WHERE SUCH RECORDS ARE CUSTOMARILY KEPT, UPON REASONABLE NOTICE
FROM THE OTHER PARTY, TO VERIFY THE ACCURACY OF THE REPORTS AND PAYMENTS.
SUCH
INSPECTIONS MAY OCCUR NOT MORE THAN ONCE PER CALENDAR YEAR.
NO PERIOD MAY BE
AUDITED MORE THAN ONE TIME PURSUANT TO THIS SECTION 5.7.1.
THE PARTY REQUESTING
THE AUDIT WILL BEAR ALL COSTS AND EXPENSES ASSOCIATED WITH AN AUDIT CONDUCTED
PURSUANT TO THIS SECTION 5.7; PROVIDED, HOWEVER, THAT IF THE DESIGNATED AUDITOR
DISCOVERS AN UNDERPAYMENT OF 5% OR MORE FOR ANY YEAR BETWEEN THE AMOUNT OF ANY
ROYALTIES LICENSEE HAS PAID TO THE LICENSOR UNDER THIS AGREEMENT, AND THE AMOUNT
OF ROYALTIES ACTUALLY OWED TO LICENSOR UNDER THIS AGREEMENT, THEN LICENSEE SHALL
BEAR ALL COSTS AND EXPENSES ASSOCIATED WITH SUCH AUDIT.
LICENSOR AGREES TO HOLD
IN CONFIDENCE ALL INFORMATION CONCERNING ROYALTY PAYMENTS AND REPORTS OF
LICENSEE, AND ALL INFORMATION LEARNED IN THE COURSE OF ANY AUDIT OR INSPECTION,
EXCEPT TO THE EXTENT NECESSARY FOR LICENSOR TO (I) REVEAL SUCH INFORMATION IN
ORDER TO ENFORCE ITS RIGHTS UNDER THIS AGREEMENT, (II) TO PROVIDE REQUIRED
INFORMATION TO UNIVERSITY PURSUANT TO THE UNIVERSITY LICENSE; OR (III) MAKE SUCH
DISCLOSURE AS IS REQUIRED BY LAW.
THE RESULTS OF EACH INSPECTION, IF ANY, WILL
BE BINDING ON BOTH PARTIES.
LICENSEE WILL REQUIRE SUBSTANTIALLY THE
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SAME AUDIT RIGHTS IN ANY SUBLICENSE IT GRANTS HEREUNDER IN ORDER TO VERIFY THE
CORRECTNESS OF PAYMENTS DUE THEREUNDER.
5.8
WITHHOLDING TAXES.
IN THE EVENT ANY OF THE
PAYMENTS MADE BY LICENSEE PURSUANT TO THIS SECTION 5 BECOME SUBJECT TO
WITHHOLDING TAXES UNDER THE LAWS OF ANY JURISDICTION, LICENSEE SHALL DEDUCT AND
WITHHOLD THE AMOUNT OF SUCH TAXES FOR THE ACCOUNT OF LICENSOR TO THE EXTENT
REQUIRED BY LAW.
AMOUNTS PAYABLE TO LICENSOR SHALL BE REDUCED BY THE AMOUNT OF
TAXES DEDUCTED AND WITHHELD, AND LICENSEE SHALL PAY THE AMOUNTS OF SUCH TAXES TO
THE PROPER GOVERNMENT AUTHORITY IN A TIMELY MANNER AND SHALL PROMPTLY TRANSMIT
TO LICENSOR AN OFFICIAL TAX CERTIFICATE OR OTHER EVIDENCE OF SUCH TAX
OBLIGATIONS TOGETHER WITH PROOF OF PAYMENT FROM THE RELEVANT GOVERNMENT
AUTHORITY OF ALL AMOUNTS DEDUCTED AND WITHHELD SUFFICIENT TO ENABLE LICENSOR TO
CLAIM SUCH PAYMENT OF TAXES.
ANY SUCH