FOR WHICH ROYALTIES ARE DUE.
EACH ROYALTY PAYMENT SHALL BE
ACCOMPANIED BY A REPORT SUMMARIZING THE NET SALES DURING THE RELEVANT
SIX (6)-MONTH PERIOD, SETTING FORTH ALL THE INFORMATION NECESSARY FOR THE
CALCULATION OF SUCH ROYALTY PAYMENT.
UNLESS OTHERWISE REQUESTED, OR CONSENTED
TO IN WRITING, BY ARRAY, ALL ROYALTY PAYMENTS AND REPORTS RELATED TO THE NET
SALES BY ONO'S SUBLICENSEES SHALL BE MADE TO ARRAY BY ONO TOGETHER WITH (OR AS A
PART OF) ONO'S PAYMENTS AND REPORTS.
5.6.2
RECORDS.
ONO SHALL KEEP FULL, TRUE AND ACCURATE
BOOKS OF ACCOUNT, IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRACTICES IN
JAPAN, RELEVANT TO PAYMENTS UNDER THIS AGREEMENT AND CONTAINING ALL PARTICULARS
THAT MAY BE NECESSARY FOR THE PURPOSE OF SHOWING THE NET SALES AND DEMONSTRATING
THE CALCULATION OF ROYALTY PAYMENTS.
SUCH BOOKS OF ACCOUNT AND THE SUPPORTING
DATA AND OTHER RECORDS SHALL BE KEPT BY ONO.
ONO'S BOOKS AND RECORDS SHALL BE
OPEN AT ALL REASONABLE TIMES, FOR [*] FOLLOWING THE END OF MARCH OR SEPTEMBER TO
WHICH THEY PERTAIN, FOR EXAMINATION IN ACCORDANCE WITH THE PROVISIONS OF
SECTION 5.6.3 BELOW.
5.6.3
AUDITS.
UPON THE WRITTEN REQUEST AND AT EXPENSE OF
ARRAY, ONO SHALL PERMIT AN INDEPENDENT CERTIFIED PUBLIC ACCOUNTING FIRM OF
INTERNATIONALLY RECOGNIZED STANDING SELECTED BY ARRAY AND REASONABLY ACCEPTABLE
TO ONO, TO EXAMINE, NOT MORE THAN ONCE IN EACH CALENDAR YEAR DURING THE PERIOD
IN WHICH ONO HAS AN OBLIGATION TO PAY ROYALTY PAYMENTS UNDER THIS AGREEMENT,
SUCH BOOKS OF ACCOUNT AND RECORDS UNDER SECTION 5.6.2 AS MAY BE NECESSARY TO
DETERMINE THE CORRECTNESS OF ANY REPORT OR PAYMENT RELATED TO ROYALTY PAYMENTS
UNDER THIS AGREEMENT.
SUCH EXAMINATION SHALL BE MADE DURING REGULAR BUSINESS
HOURS AND UPON REASONABLE PRIOR WRITTEN NOTICE AND PRIOR TO SUCH EXAMINATION,
ARRAY SHALL CAUSE ITS ACCOUNTING FIRM TO ENTER INTO AN ACCEPTABLE
CONFIDENTIALITY AGREEMENT WITH ONO, OBLIGATING IT TO RETAIN ALL SUCH INFORMATION
IN CONFIDENCE PURSUANT TO SUCH CONFIDENTIALITY AGREEMENT.
THE ACCOUNTING FIRM
SHALL DISCLOSE TO ARRAY ONLY WHETHER THE CALCULATION OF ROYALTY IS CORRECT OR
INCORRECT AND THE AMOUNT OF DISCREPANCY.
NO OTHER INFORMATION SHALL BE PROVIDED
TO ARRAY.
THE PARTIES AGREE THAT ALL INFORMATION SUBJECT TO REVIEW UNDER THIS
SECTION 5.6.3 IS THE CONFIDENTIAL INFORMATION OF ONO.
IF SUCH ACCOUNTING FIRM CORRECTLY IDENTIFIES A DISCREPANCY MADE DURING THE
PERIOD COVERED BY SUCH EXAMINATION, THE APPROPRIATE PARTY SHALL PAY THE OTHER
PARTY THE AMOUNT OF THE DISCREPANCY [*] OF THE DATE ARRAY DELIVERS TO ONO SUCH
ACCOUNTING FIRM'S WRITTEN REPORT SO CORRECTLY CONCLUDING, OR AS OTHERWISE AGREED
UPON BY THE PARTIES.
IF SUCH EXAMINATION ESTABLISHES THAT ROYALTY PAYMENTS
PAYABLE UNDER THIS AGREEMENT HAVE BEEN, FOR THE
15
PERIOD COVERED BY SUCH EXAMINATION, UNDERSTATED BY MORE THAN [*], ONO SHALL PAY
THE REASONABLE COSTS OF THE EXAMINATION.
5.6.4
Currency Conversion.
For the purpose of computing
the Net Sales in a currency other than United States Dollars, such currency
shall be converted into U.S. dollars using the buying exchange rate for
conversion of the foreign currency with U.S. dollars, quoted for current
transactions reported in