TO REQUEST A FURTHER
DETERMINATION BY SUCH AUDIT TEAM AS TO MATTERS WHICH THE AUDITEE DISPUTES (TO BE
COMPLETED NO MORE THAN *** AFTER THE FIRST DETERMINATION IS PROVIDED TO SUCH
AUDITEE AND TO BE LIMITED TO THE DISPUTED MATTERS).
IF THE PARTIES DISAGREE AS
TO SUCH FURTHER DETERMINATION, THE AUDIT RIGHT HOLDER AND THE AUDITEE SHALL
MUTUALLY SELECT AN INTERNATIONALLY-RECOGNIZED INDEPENDENT ACCOUNTING FIRM THAT
SHALL MAKE A FINAL DETERMINATION AS TO THE REMAINING MATTERS IN DISPUTE THAT
SHALL BE BINDING UPON THE PARTIES.
SUCH ACCOUNTANTS SHALL NOT DISCLOSE TO THE
AUDIT RIGHTS HOLDER ANY INFORMATION RELATING TO THE BUSINESS OF THE AUDITEE
EXCEPT THAT WHICH SHOULD PROPERLY HAVE BEEN CONTAINED IN ANY REPORT REQUIRED
HEREUNDER OR OTHERWISE REQUIRED TO BE DISCLOSED TO SUCH PARTY TO THE EXTENT
NECESSARY TO VERIFY THE PAYMENTS REQUIRED TO BE MADE PURSUANT TO THE TERMS OF
THIS AGREEMENT.
(E)
IF THE AUDIT SHOWS ANY UNDER-REPORTING OR UNDERPAYMENT, OR
OVERCHARGING BY ANY PARTY, THAT UNDER-REPORTING, UNDERPAYMENT OR OVERCHARGING
SHALL BE REPORTED TO THE AUDIT RIGHTS HOLDER AND THE UNDERPAYING OR OVERCHARGING
PARTY SHALL REMIT SUCH UNDERPAYMENT OR REIMBURSE SUCH OVERCOMPENSATION (TOGETHER
WITH INTEREST AT THE ANNUAL INTEREST RATE OF *** AS PUBLISHED IN THE *** OR ITS
SUCCESSOR ON THE LAST BUSINESS DAY OF THE APPLICABLE CALENDAR QUARTER PRIOR TO
THE AUDIT) TO THE UNDERPAID OR OVERCHARGED PARTY WITHIN *** AFTER RECEIVING THE
AUDIT REPORT.
FURTHER, IF THE AUDIT FOR AN ANNUAL PERIOD SHOWS AN
UNDER-REPORTING OR UNDERPAYMENT OR AN OVERCHARGE BY ANY PARTY FOR THAT PERIOD IN
EXCESS OF *** OF THE AMOUNTS PROPERLY DETERMINED, THE UNDERPAYING OR
OVERCHARGING PARTY, AS THE CASE MAY BE, SHALL REIMBURSE THE APPLICABLE UNDERPAID
OR OVERCHARGED AUDIT RIGHTS HOLDER CONDUCTING THE AUDIT, FOR ITS RESPECTIVE
AUDIT FEES AND REASONABLE OUT-OF-POCKET COSTS IN CONNECTION WITH SAID AUDIT,
WHICH REIMBURSEMENT SHALL BE MADE WITHIN *** AFTER RECEIVING APPROPRIATE
INVOICES AND OTHER SUPPORT FOR SUCH AUDIT-RELATED COSTS.
(F)
FOR THE PURPOSES OF THE AUDIT RIGHTS DESCRIBED HEREIN, AN
INDIVIDUAL PARTY SUBJECT TO AN AUDIT IN ANY GIVEN YEAR WILL BE REFERRED TO AS
THE "AUDITEE" AND THE OTHER PARTY WHO HAS CERTAIN AND RESPECTIVE RIGHTS TO AUDIT
THE BOOKS AND RECORDS OF THE AUDITEE WILL BE REFERRED TO AS THE "AUDIT RIGHTS
HOLDER".
8.7
Tax Matters.
The royalties, milestones and other amounts payable
by Novartis to Incyte pursuant to this Agreement ("Payments") shall not be
reduced on account of any taxes
59
*** Confidential material redacted and filed separately with the Commission.
unless required by Law.
Incyte alone shall be responsible for paying any and
all taxes (other than withholding taxes required by Law to be deducted and paid
on Incyte's behalf by Novartis) levied on account of, or measured in whole or in
part by reference to, any Payments it receives.
The Parties will cooperate in
good faith to obtain the benefit of any relevant tax treaties to minimize as far
as reasonably possible any taxes which may be levied on any Payments.
Novartis
shall deduct or withhold from