LAWS OR REGULATIONS REQUIRE THAT TAXES BE WITHHELD FROM
ANY AMOUNTS PAYABLE HEREUNDER, CELGENE WILL:
(A) DEDUCT THOSE TAXES FROM THE
OTHERWISE REMITTABLE PAYMENT; (B) TIMELY PAY THE TAXES TO THE PROPER TAXING
AUTHORITY; AND (C) NOTIFY ARRAY AND PROMPTLY FURNISH ARRAY WITH COPIES OF ANY
DOCUMENTATION EVIDENCING SUCH WITHHOLDING.
7.4
RECORDS.
CELGENE SHALL KEEP, AND SHALL CAUSE ITS AFFILIATES AND
SUBLICENSEES TO KEEP, COMPLETE, TRUE AND ACCURATE BOOKS OF ACCOUNTS AND RECORDS,
IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRACTICES AND SUFFICIENT TO
DETERMINE AND ESTABLISH THE AMOUNTS PAYABLE TO ARRAY UNDER
45
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.
THIS AGREEMENT, AND COMPLIANCE WITH THE OTHER TERMS AND CONDITIONS OF THIS
AGREEMENT.
SUCH BOOKS AND RECORDS SHALL BE KEPT AT THE PRINCIPAL PLACE OF
BUSINESS FOR A PARTY FOR AT LEAST THREE (3) YEARS FOLLOWING THE END OF THE
CALENDAR QUARTER TO WHICH THEY PERTAIN AND SHALL BE MADE AVAILABLE FOR
INSPECTION THROUGHOUT SUCH THREE (3) YEAR PERIOD BY AN INDEPENDENT THIRD PARTY
AUDITOR SELECTED BY OR UNDER AUTHORITY OF ARRAY FOR SUCH PURPOSES IN ACCORDANCE
WITH SECTION 7.5 BELOW.
7.5
INSPECTION OF RECORDS.
UPON NO LESS THAN THIRTY (30) DAYS'
WRITTEN NOTICE BY ARRAY TO CELGENE, CELGENE SHALL PERMIT, AND SHALL REQUIRE ITS
AFFILIATES AND SUBLICENSEES TO PERMIT, AN INDEPENDENT CERTIFIED PUBLIC
ACCOUNTANT (SUBJECT TO REASONABLE OBLIGATIONS OF CONFIDENTIALITY TO CELGENE AND
ITS AFFILIATES AND SUBLICENSEES, AS APPLICABLE), APPOINTED BY ARRAY AND
REASONABLY ACCEPTABLE TO CELGENE AND ITS AFFILIATES AND SUBLICENSEES, AS
APPLICABLE, TO INSPECT THE BOOKS AND RECORDS OF SUCH PARTY DESCRIBED IN
SECTION 7.4 ABOVE FOR THE SOLE PURPOSE OF VERIFYING THE ACCURACY OF THE ROYALTY
PAYMENTS REQUIRED TO BE MADE HEREUNDER; PROVIDED THAT SUCH INSPECTION SHALL
OCCUR DURING NORMAL BUSINESS HOURS AND NOT MORE OFTEN THAN ONCE PER CALENDAR
YEAR, UNLESS A MATERIAL ERROR IS DISCOVERED IN SUCH INSPECTION IN WHICH CASE
ARRAY SHALL HAVE THE RIGHT TO CONDUCT AN ADDITIONAL AUDIT IN SUCH PERIOD.
THE
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT SHALL REPORT TO ARRAY ONLY WHETHER THERE
HAS BEEN A ROYALTY UNDERPAYMENT OR OVERPAYMENT AND, IF SO, THE AMOUNT THEREOF
AND INFORMATION RELATED TO THE DETERMINATION OF SUCH AMOUNT.
ANY INSPECTION
CONDUCTED UNDER THIS SECTION 7.6 SHALL BE AT THE EXPENSE OF ARRAY, UNLESS SUCH
INSPECTION ESTABLISHES ANY UNDERPAYMENT OF ANY AMOUNT DUE TO ARRAY HEREUNDER BY
AT LEAST FIVE PERCENT (5%) FOR ANY ANNUAL PERIOD, IN WHICH CASE THE FULL COSTS
OF SUCH INSPECTION SHALL BE BORNE BY CELGENE.
ANY UNDERPAYMENT SHALL BE PAID BY
CELGENE TO ARRAY WITHIN FIFTEEN (15) BUSINESS DAYS WITH INTEREST ON THE
UNDERPAYMENT AT THE RATE SPECIFIED IN SECTION 7.1 ABOVE FROM THE DATE SUCH
PAYMENT WAS ORIGINALLY DUE.
ANY OVERPAYMENT SHALL BE PAID BY ARRAY TO CELGENE
WITHIN FIFTEEN (15) BUSINESS DAYS OR CREDITED AGAINST FUTURE ROYALTIES DUE, AT
ARRAY'S SOLE DISCRETION.
46
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