COMPARABLE PRODUCT AND SUCH THIRD PARTY HAS SALES OF
SUCH COMPARABLE PRODUCT IN SUCH COUNTRY THAT IS GREATER THAN [***] PERCENT
([***]%) OF SANOFI-AVENTIS' REVENUE-BASED OR UNIT-BASED MARKET SHARE OF SUCH
LICENSED PRODUCT IN SUCH COUNTRY (THE "THRESHOLD MARKET SHARE"), THEN, SUBJECT
TO THE FINAL SENTENCE OF THIS SECTION 4.3.4, ON AND AFTER THE DATE OF FIRST
COMMERCIAL SALE OF SUCH GENERIC PRODUCT OR DATE OF ACHIEVEMENT OF THE THRESHOLD
MARKET SHARE, AS THE CASE MAY BE, ALL APPLICABLE ROYALTIES IN EFFECT WITH
RESPECT TO SUCH LICENSED PRODUCT IN SUCH COUNTRY AS SPECIFIED IN SECTION 4.5.1
SHALL BE REDUCED TO [***] PERCENT ([***]%).
NOTWITHSTANDING THE FOREGOING,
SANOFI-AVENTIS' OBLIGATION TO PAY THE FULL ROYALTY RATE SHALL BE REINSTATED ON
THE FIRST DAY OF THE CALENDAR QUARTER IMMEDIATELY FOLLOWING THE CALENDAR QUARTER
IN WHICH (A) SALES OF SUCH GENERIC PRODUCT CEASE OR (B) SALES OF SUCH COMPARABLE
PRODUCT ACCOUNT FOR LESS THAN THE THRESHOLD MARKET SHARE IN SUCH COUNTRY.
4.3.5
PAYMENT DATES AND REPORTS.
ROYALTY PAYMENTS SHALL BE MADE BY
SANOFI-AVENTIS WITHIN [***] ([***]) DAYS AFTER THE END OF EACH CALENDAR QUARTER
COMMENCING WITH THE CALENDAR QUARTER IN WHICH THE FIRST COMMERCIAL SALE OF A
LICENSED PRODUCT OCCURS.
ALL PAYMENTS SHALL BE MADE BY WIRE TRANSFER IN
ACCORDANCE WITH INSTRUCTIONS GIVEN IN WRITING FROM TIME TO TIME BY IMMUNOGEN.
SANOFI-AVENTIS SHALL ALSO PROVIDE, AT THE SAME TIME EACH SUCH PAYMENT IS MADE, A
REPORT SHOWING: (A) THE NET SALES OF EACH LICENSED PRODUCT BY COUNTRY IN THE
TERRITORY;(B) THE BASIS FOR ANY DEDUCTIONS FROM GROSS AMOUNTS BILLED OR INVOICED
TO DETERMINE NET SALES; (C) THE APPLICABLE ROYALTY RATES FOR SUCH LICENSED
PRODUCT; (D) THE EXCHANGE RATES USED IN CALCULATING ANY OF THE FOREGOING; AND
(E) A CALCULATION OF THE AMOUNT OF ROYALTY DUE TO IMMUNOGEN.
4.3.6
RECORDS; AUDIT RIGHTS.
FOR A PERIOD OF [***] ([***]) YEARS,
SANOFI-AVENTIS SHALL KEEP AND MAINTAIN, AND SHALL REQUIRE ITS RESPECTIVE
AFFILIATES AND SUBLICENSEES TO KEEP AND MAINTAIN, SUCH ACCURATE AND COMPLETE
BOOKS AND RECORDS IN CONNECTION WITH THE SALE OF LICENSED PRODUCTS HEREUNDER, AS
ARE NECESSARY TO ALLOW THE ACCURATE CALCULATION CONSISTENT WITH GENERALLY
ACCEPTED ACCOUNTING PRINCIPLES OF THE ROYALTIES DUE TO IMMUNOGEN, INCLUDING ANY
RECORDS REQUIRED TO CALCULATE ANY ROYALTY ADJUSTMENTS HEREUNDER.
ONCE PER
CALENDAR YEAR, IMMUNOGEN SHALL HAVE THE RIGHT TO ENGAGE AN INDEPENDENT CERTIFIED
PUBLIC ACCOUNTING FIRM OF NATIONALLY RECOGNIZED STANDING AND REASONABLY
ACCEPTABLE TO SANOFI-AVENTIS, WHICH SHALL HAVE THE RIGHT TO EXAMINE IN
CONFIDENCE THE RELEVANT BOOKS AND RECORDS OF SANOFI-AVENTIS AND ITS RESPECTIVE
AFFILIATES AND SUBLICENSEES AS MAY BE REASONABLY NECESSARY TO DETERMINE AND/OR
VERIFY THE AMOUNT OF ROYALTY PAYMENTS DUE HEREUNDER.
SUCH EXAMINATION SHALL BE
CONDUCTED, AND SANOFI-AVENTIS
A-17
SHALL MAKE ITS RECORDS AVAILABLE, DURING NORMAL BUSINESS HOURS, AFTER AT LEAST
[***] ([***]) DAYS PRIOR WRITTEN NOTICE TO SANOFI-AVENTIS, AS APPLICABLE, AND
SHALL TAKE PLACE AT THE FACILITY(IES) WHERE SUCH RECORDS ARE MAINTAINED.
EACH
SUCH EXAMINATION SHALL BE LIMITED TO PERTINENT BOOKS AND RECORDS FOR ANY YEAR
ENDING NOT MORE THAN [***] ([***]) MONTHS PRIOR TO THE DATE OF