JURISDICTION DURING THE
REPORTING PERIOD; AND (E) THE EXCHANGE RATES USED TO DETERMINE THE AMOUNT OF US
DOLLARS (COLLECTIVELY, THE "ROYALTY STATEMENT").
IF ANY CURRENCY CONVERSION
SHALL BE REQUIRED IN CONNECTION WITH THE CALCULATION OF PAYMENTS HEREUNDER, SUCH
CONVERSION SHALL BE MADE USING THE AVERAGE EXCHANGE RATES PUBLISHED BY OANDA.COM
OR A COMPARABLE SERVICE FOR THE APPLICABLE PERIOD IN WHICH PURCHASER RECORDS THE
SALE GIVING RISE TO THE PAYMENT OBLIGATION SET FORTH HEREIN.
PURCHASER SHALL BE
ENTITLED TO DEDUCT PURCHASER'S ACTUAL CURRENCY CONVERSION COSTS FROM THE
ROYALTIES PAYABLE HEREUNDER.
SECTION 2.14
CONSIDERATION.
THE REGULATORY MILESTONE PAYMENT, THE
ROYALTY PAYMENTS AND THE MUTUAL PROMISES PROVIDED HEREIN SHALL CONSTITUTE
CONSIDERATION FOR THE LICENSES AND OTHER RIGHTS GRANTED HEREUNDER.
SECTION 2.15
RECORDS AND AUDIT.
DURING THE TERM OF THIS AGREEMENT,
FOR A PERIOD OF THREE (3) YEARS AFTER THE CONCLUSION OF THE APPLICABLE CALENDAR
YEAR, THE PURCHASER SHALL KEEP COMPLETE AND ACCURATE RECORDS OF NET SALES IN
SUFFICIENT DETAIL TO PERMIT THE COMPANY TO CONFIRM THE COMPLETENESS AND ACCURACY
OF: (I) THE INFORMATION PRESENTED IN EACH ROYALTY STATEMENT AND (II) THE
CALCULATION OF NET SALES. THE PURCHASER SHALL PERMIT A RECOGNIZED INDEPENDENT
AUDITING FIRM REASONABLY ACCEPTABLE TO THE PURCHASER TO AUDIT AND/OR INSPECT
RECORDS OF THE PURCHASER SOLELY TO THE EXTENT REQUIRED TO VERIFY: (A) THE
COMPLETENESS AND ACCURACY OF THE ROYALTY STATEMENTS; (B) THE CALCULATION OF NET
SALES AND (C) THE AMOUNT OF ROYALTY PAYMENTS FOR THE PRODUCT FOR THE PREVIOUS
YEAR.
SUCH INSPECTION SHALL BE CONDUCTED DURING THE PURCHASER'S NORMAL BUSINESS
HOURS, NO MORE THAN ONCE IN ANY TWELVE (12) MONTH PERIOD AND UPON AT LEAST
THIRTY (30) DAYS PRIOR WRITTEN NOTICE BY THE COMPANY TO THE PURCHASER.
IF SUCH
FIRM ESTABLISHES THAT SUCH PAYMENTS WERE UNDERPAID FOR THE PRECEDING YEAR, THE
PURCHASER SHALL HAVE THE RIGHT TO ENGAGE A RECOGNIZED INDEPENDENT AUDITING FIRM
TO VERIFY THE FINDINGS OF THE AUDIT.
IF THE FIRM ENGAGED BY PURCHASER VERIFIES
THE FINDINGS OF THE FIRM ENGAGED BY THE COMPANY, THE PURCHASER SHALL PAY THE
COMPANY THE AMOUNT OF ANY SUCH UNDERPAYMENTS FOR THE PRECEDING YEAR, PLUS
INTEREST AT A RATE EQUAL TO THE PRIME RATE OF INTEREST AS REPORTED IN THE WALL
STREET JOURNAL ON THE DATE PAYMENT IS DUE, WITHIN THIRTY (30) DAYS AFTER THE
DATE THE PURCHASER DELIVERS TO THE COMPANY THE REPORT OF THE FIRM ENGAGED BY THE
PURCHASER, WHICH REPORT SO ESTABLISHES THAT SUCH PAYMENTS WERE UNDERPAID FOR THE
PRECEDING YEAR.
NOTWITHSTANDING THE FOREGOING, THE FIRM ENGAGED BY THE
PURCHASER SHALL DELIVER ITS FINDINGS IN A PROMPT MANNER AFTER BEING ENGAGED BY
THE PURCHASER.
IF THE FIRM ENGAGED BY THE COMPANY ESTABLISHES THAT SUCH
PAYMENTS WERE OVERPAID FOR THE PRECEDING YEAR, THE COMPANY SHALL PAY THE
PURCHASER THE AMOUNT OF ANY SUCH OVERPAYMENT FOR THE PRECEDING YEAR, WITHIN
THIRTY (30) DAYS AFTER THE DATE THE COMPANY DELIVERS TO THE PURCHASER SUCH
FIRM'S REPORT SO ESTABLISHING THAT SUCH PAYMENTS WERE OVERPAID FOR THE PRECEDING
YEAR.
THE COMPANY SHALL BEAR THE FULL COST OF THE FIRM IT ENGAGES UNLESS SUCH
AUDIT