Records. TSOI agrees that it will keep through December 31, 2015
correct and complete books and records regarding Net Sales through December 31,
2012. Such books and records shall be in sufficient detail to establish the
accuracy of Royalty Statements sent to Licensor by TSOI. Licensor shall have the
right to engage independent certified public accountants from a nationally
recognized accounting firm to audit at reasonable times (but not more than once
during any calendar year), and upon reasonable advance notice to TSOI, through
December 31, 2015, such books and records.
Any such audit shall be paid for by
Licensor. In the event that the audit shows that TSOI has under-reported Net
Sales and/or underpaid Royalties then TSOI shall within 25 days after receipt of
the audit report pay to Licensor the indicated deficiency in the Royalty payment
and should such audit show that TSOI has under-reported Net Sales and/or
underpaid Royalties by 300 basis points (3%) or more for any period, then TSOI
shall additionally along with the payment of the deficiency in the Royalty
payment reimburse Licensor for the cost of the audit.
In the event TSOI uses
distributors to sell Licensed Products and TSOI Merchandise within the Field of
Use, then TSOI shall ensure that such distributors are contractually obligated
under similar terms as set forth in this Section 4.6 and Licensor's audit rights
shall also apply to such distributors' books and records.
ARTICLE 5. PATENT PROSECUTION
5.1
Prosecution.
(a)
Licensor shall be solely responsible for, at its own expense and in its sole
discretion, prosecuting and maintaining the Licensed US Patent Rights.
Licensor
has no obligation to TSOI to prosecute or maintain such patents and patent
applications, except that Licensor shall use reasonable commercial efforts to
maintain the Licensed US Patents through December 31, 2012.
(b)
Licensor shall have the initial right (but not the obligation) to prosecute and
maintain any and all Licensed Foreign Counterparts.
TSOI shall reimburse
Licensor, within 30 days of the date of Licensor's invoice setting forth such
costs and expenses, for 50% of the documented out-of-pocket costs and expenses
of prosecuting and maintaining (after the Effective Date) Licensed Foreign
Counterparts under this subsection (b).
Licensor has no obligation to TSOI to
prosecute or maintain the Licensed Foreign Counterparts, but shall, in a timely
manner, keep TSOI apprised of what Licensor is doing (and not doing) in regard
to prosecuting and maintaining the Licensed Foreign Counterparts.
(c)
If Licensor has not, by the 60th day before the deadline date for taking a
relevant Licensed Foreign Counterpart prosecution or maintenance action, taken
such relevant Licensed Foreign Counterpart prosecution or maintenance action,
then within such 60 days TSOI shall have the right (but not the obligation) to
give written notice to Licensor that TSOI is taking over the prosecution and
maintenance of such Licensed Foreign Counterpart and thereupon and thereafter
TSOI shall have the sole right (but not the obligation) to prosecute and
maintain such Licensed Foreign Counterpart.
BR shall reimburse TSOI, within 30