PRODUCT, THE ROYALTY PERCENTAGES OWED TO LICENSOR FOR SUCH LICENSED
PRODUCT AS SET FORTH IN SECTION 3.2 (A), (B), AND (C) WILL EACH BE REDUCED BY
[***]%, SO THAT THE ROYALTY PERCENTAGES OWED IN SUCH CASE WILL BE [***]%, [***]%
AND [***]% RESPECTIVELY.
3.6
ROYALTY REPORTS AND PAYMENTS.
AFTER THE FIRST COMMERCIAL SALE BY
SUPERGEN, ITS AFFILIATES OR SUBLICENSEES OF A LICENSED PRODUCT FOR WHICH
ROYALTIES ARE PAYABLE UNDER THIS ARTICLE 3, SUPERGEN SHALL MAKE QUARTERLY
WRITTEN REPORTS TO LICENSOR WITHIN SIXTY (60) DAYS AFTER THE END OF EACH
CALENDAR QUARTER, STATING IN EACH SUCH REPORT THE NUMBER, DESCRIPTION, AND
AGGREGATE NET SALES OF SUCH LICENSED PRODUCT SOLD DURING THE CALENDAR QUARTER.
SIMULTANEOUSLY WITH THE DELIVERY OF EACH SUCH REPORT, SUPERGEN SHALL PAY TO
LICENSOR THE ROYALTIES, IF ANY, DUE TO LICENSOR FOR THE PERIOD OF SUCH REPORT.
IF NO ROYALTIES ARE DUE, SUPERGEN SHALL SO REPORT.
SUCH REPORTS SHALL BE
CONFIDENTIAL INFORMATION OF SUPERGEN SUBJECT TO ARTICLE 5 HEREIN.
3.7
PAYMENT METHOD.
UNLESS OTHERWISE SPECIFIED BY THIS AGREEMENT OR
REQUESTED IN WRITING BY LICENSOR, ALL AMOUNTS PAYABLE UNDER THIS AGREEMENT SHALL
BE MADE BY CHECK OR WIRE DRAWN ON A UNITED STATES BANK ACCOUNT AND DELIVERED TO
LICENSOR AT THE ADDRESS SET FORTH IN SECTION 10.5 OR SUCH OTHER BUSINESS ADDRESS
AS LICENSOR MAY DESIGNATE IN WRITING.
ALL PAYMENTS HEREUNDER SHALL BE MADE IN
U.S. DOLLARS.
ANY PAYMENTS THAT ARE NOT PAID ON THE DATE SUCH PAYMENTS ARE DUE
UNDER THIS AGREEMENT SHALL BEAR INTEREST, TO THE EXTENT PERMITTED BY APPLICABLE
LAW, AT THE PRIME RATE AS REPORTED BY THE CHASE MANHATTAN BANK, NEW YORK, NEW
YORK, ON THE DATE SUCH PAYMENT IS DUE CALCULATED ON THE NUMBER OF DAYS SUCH
PAYMENT IS DELINQUENT.
3.8
CURRENCY CONVERSION.
IF ANY CURRENCY CONVERSION SHALL BE REQUIRED
IN CONNECTION WITH THE CALCULATION OF ROYALTIES HEREUNDER, SUCH CONVERSION SHALL
BE MADE USING THE SELLING EXCHANGE RATE FOR CONVERSION OF THE FOREIGN CURRENCY
INTO U.S. DOLLARS, QUOTED FOR CURRENT TRANSACTIONS REPORTED IN THE WALL STREET
JOURNAL FOR THE LAST BUSINESS DAY OF THE CALENDAR QUARTER TO WHICH SUCH PAYMENT
PERTAINS.
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3.9
INSPECTION OF BOOKS AND RECORDS.
SUPERGEN SHALL MAINTAIN ACCURATE
BOOKS AND RECORDS WHICH ENABLE THE CALCULATION OF ROYALTIES PAYABLE HEREUNDER TO
BE VERIFIED.
SUPERGEN SHALL RETAIN THE BOOKS AND RECORDS FOR EACH QUARTERLY
PERIOD FOR THREE (3) YEARS AFTER THE SUBMISSION OF THE CORRESPONDING REPORT
UNDER SECTION 3.6 HEREOF.
UPON THIRTY (30) DAYS PRIOR NOTICE TO SUPERGEN,
INDEPENDENT ACCOUNTANTS SELECTED BY LICENSOR, REASONABLY ACCEPTABLE TO SUPERGEN,
AFTER ENTERING INTO A CONFIDENTIALITY AGREEMENT WITH SUPERGEN, MAY HAVE ACCESS
TO THE BOOKS AND RECORDS OF SUPERGEN TO CONDUCT A REVIEW OR AUDIT ONCE PER
CALENDAR YEAR, FOR THE SOLE PURPOSE OF VERIFYING THE ACCURACY OF SUPERGEN'S
PAYMENTS AND COMPLIANCE WITH THIS AGREEMENT.
LICENSOR'S FAILURE TO AUDIT SHALL
NOT BE CONSIDERED A WAIVER OF ANY OBJECTION TO THE AMOUNTS PAID BY SUPERGEN.
THE ACCOUNTING FIRM SHALL REPORT TO LICENSOR ONLY WHETHER THERE HAS BEEN A
ROYALTY UNDERPAYMENT AND, IF SO, THE AMOUNT THEREOF.
SUCH