THE AUDITOR
WILL EXECUTE A CONFIDENTIALITY AGREEMENT WITH LICENSEE IN WHICH THE AUDITOR
AGREES TO ONLY DISCUSS WITH CHIRON INFORMATION AND FINDINGS RELEVANT TO ROYALTY
CALCULATIONS AND PAYMENTS PURSUANT TO THIS AGREEMENT.
BOOKS AND RECORDS SHALL
INCLUDE BUT NOT BE LIMITED TO: (A) ACCOUNTING GENERAL LEDGERS (ELECTRONICALLY IF
AVAILABLE); (B) INVOICE/SALES REGISTERS; (C) ORIGINAL INVOICE AND SHIPPING
DOCUMENTS; (D) FEDERAL AND STATE BUSINESS TAX RETURNS; (E) COMPANY FINANCIAL
STATEMENTS; (F) SALES ANALYSIS REPORTS; (G) INVENTORY AND OR MANUFACTURING
RECORDS; (H) SUBLICENSE AND DISTRIBUTOR AGREEMENTS; AND (I) PRICE LISTS, PRODUCT
CATALOGS AND OTHER MARKETING MATERIALS.
LICENSEE AGREES TO MAINTAIN SUCH BOOKS
AND RECORDS FOR A PERIOD OF NOT LESS THAN FIVE (5) YEARS FROM THE DATE EACH
ROYALTY REPORT IS SUBMITTED TO CHIRON.
SUCH INSPECTION SHALL BE AT CHIRON'S
EXPENSE UNLESS A ROYALTY PAYMENT DEFICIENCY IS DETERMINED AND SUCH DEFICIENCY IS
FIVE PERCENT (5%) OR GREATER, FOR ANY ROYALTY REPORTING PERIOD INCLUDED IN THE
EXAMINATION.
IN SUCH CASE LICENSEE SHALL BE RESPONSIBLE FOR REIMBURSING CHIRON
FOR THE EXAMINATION FEE AND EXPENSES CHARGED BY THE AUDITOR.
LICENSEE AGREES TO
PAY PAST DUE ROYALTIES (WITH INTEREST AS PER SECTION 3.2.3) FOR ANY ROYALTY
DEFICIENCY ERROR AS DETERMINED BY THE AUDITOR, WHICH AFFECTS PERIODS PRIOR TO
THE PERIOD UNDER AUDIT.
CHIRON AND THE AUDITOR SHALL MAINTAIN IN CONFIDENCE
SUCH INSPECTION AND ITS RESULTING REPORT.
THE AUDITOR MAY NOT DISCLOSE
FINANCIAL OR PROPRIETARY INFORMATION EXCEPT AS REQUIRED BY THIS AGREEMENT OR IF
IT ALREADY EXISTS IN THE PUBLIC DOMAIN.
5.
REPRESENTATIONS AND WARRANTIES; DISCLAIMER
5.1.
MUTUAL WARRANTIES.
EACH PARTY REPRESENTS AND WARRANTS TO THE OTHER
PARTY THAT (A) IT HAS ALL REQUISITE CORPORATE POWER AND AUTHORITY TO ENTER INTO
THIS AGREEMENT, TO GRANT THE LICENSES GRANTED BY IT HEREUNDER, AND TO PERFORM
ITS OTHER OBLIGATIONS UNDER THIS AGREEMENT, (B) EXECUTION OF THIS AGREEMENT AND
THE PERFORMANCE BY THE WARRANTING PARTY OF ITS OBLIGATIONS HEREUNDER, INCLUDING
THE LICENSES GRANTED BY THAT PARTY HEREUNDER, HAVE BEEN DULY AUTHORIZED, AND (C)
THIS AGREEMENT IS FULLY BINDING AND ENFORCEABLE IN ACCORDANCE WITH ITS TERMS
SUBJECT TO THE EFFECTS OF BANKRUPTCY, INSOLVENCY OR OTHER LAWS OF GENERAL
APPLICATION AFFECTING THE ENFORCEMENT OF CREDITOR RIGHTS AND JUDICIAL PRINCIPLES
AFFECTING THE AVAILABILITY OF SPECIFIC PERFORMANCE AND GENERAL PRINCIPLES OF
EQUITY, WHETHER ENFORCEABILITY IS CONSIDERED A PROCEEDING AT LAW OR EQUITY.
5.2.
LICENSEE WARRANTIES AND COVENANTS. LICENSEE WARRANTS, REPRESENTS
AND COVENANTS THAT:
5.2.1.
ALL OF ITS ACTIVITIES RELATED TO ITS USE OF THE CHIRON PATENT RIGHTS
PURSUANT TO THIS AGREEMENT SHALL COMPLY IN ALL MATERIAL RESPECTS WITH ALL
APPLICABLE LEGAL AND REGULATORY REQUIREMENTS, INCLUDING ALL APPLICABLE
REGULATORY REQUIREMENTS; AND
5.2.2.
IT SHALL NOT ENGAGE IN ANY ACTIVITIES THAT WOULD INFRINGE THE CHIRON
PATENT RIGHTS THAT ARE OUTSIDE THE SCOPE OF THE RESEARCH AND DEVELOPMENT LICENSE
11
GRANTED HEREUNDER (INCLUDING THE USE OF THE LICENSED PROCESSES AFTER THE
TERMINATION OF THE TERM).
5.3.
DISCLAIMER.
EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT,
CHIRON MAKES NO REPRESENTATIONS AND EXTENDS NO WARRANTIES OF ANY KIND, EITHER
EXPRESS OR IMPLIED, INCLUDING ANY EXPRESS OR IMPLIED WARRANTIES