to
the Development and/or Commercialization of IL13 and/or Products in the United
States.
6.5 WARRANTY DISCLAIMER.
EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES SET
FORTH IN THIS AGREEMENT, NEITHER PARTY MAKES ANY OTHER REPRESENTATION OR
WARRANTY, EITHER EXPRESS OR IMPLIED, WITH RESPECT TO IL13 OR ANY PRODUCT.
NEOPHARM MAKES NO EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS
FOR ANY PARTICULAR PURPOSE OR THAT THE USE OF THE PRODUCT(S) WILL NOT INFRINGE
ANY PATENT, COPYRIGHT, TRADEMARK, OR OTHER PROPRIETARY RIGHTS OF ANY THIRD
PARTY. EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS
AGREEMENT, NEOPHARM MAKES NO ANY OTHER EXPRESS OR IMPLIED WARRANTIES.
6.6 LIMITATION OF LIABILITY.
IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE
OTHER FOR ANY INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES, INCURRED
BY EITHER PARTY AND ARISING FROM PERFORMANCE OR NON-PERFORMANCE UNDER THIS
AGREEMENT, EVEN IF ADVISED OF THE PROBABILITY OF SUCH DAMAGES, WHETHER BASED ON
AN ACTION IN CONTRACT OR TORT OR BASED ON A WARRANTY, OR REPRESENTATION OR OTHER
THEORY.
ARTICLE 7
RECORDS; AUDIT
7.1 RECORD RETENTION. NK SHALL KEEP COMPLETE, ACCURATE AND CORRECT RECORDS IN
SUFFICIENT DETAIL TO PERMIT NEOPHARM TO CONFIRM THE ACCURACY OF THE CALCULATION
OF NET SALES AND ROYALTIES PROVIDED FOR IN THIS AGREEMENT.
SUCH RECORDS SHALL
BE RETAINED FOR NO LESS THAN A FIVE (5) YEAR PERIOD FOLLOWING THE YEAR IN WHICH
ANY SUCH PAYMENTS WERE MADE HEREUNDER.
7.2 AUDIT.
NEOPHARM AND ANY LICENSOR SHALL EACH HAVE THE RIGHT FOR A PERIOD OF
FIVE (5) YEARS AFTER RECEIVING ANY REPORT, STATEMENT OR PAYMENT WITH RESPECT TO
NET SALES OR ROYALTIES, TO OBTAIN, AT ITS EXPENSE, FROM AN ACCOUNTANT OR AUDITOR
SELECTED BY NEOPHARM AND AGREED BY NK AN AUDIT OF ALL RELEVANT RECORDS OF NK TO
VERIFY SUCH REPORT, STATEMENT OR PAYMENT.
NK SHALL MAKE ITS RECORDS AVAILABLE
FOR INSPECTION BY SUCH ACCOUNTANT OR AUDITOR DURING REGULAR BUSINESS HOURS AT
SUCH PLACE OR PLACES WHERE SUCH RECORDS ARE CUSTOMARILY KEPT, UPON REASONABLE
NOTICE FROM
18
NEOPHARM OR ANY LICENSOR, TO THE EXTENT REASONABLY NECESSARY TO VERIFY THE
ACCURACY OF THE REPORTS AND PAYMENTS.
NEITHER NEOPHARM NOR ANY LICENSOR MAY
EXERCISE ITS INSPECTION RIGHT MORE THAN ONCE IN ANY CALENDAR YEAR, NOR MORE THAN
ONCE WITH RESPECT TO SALES IN ANY GIVEN PERIOD, UNLESS A SUBSEQUENT INSPECTION
REVEALS DISCREPANCIES WHICH MAY HAVE ALSO OCCURRED DURING SUCH PERIOD.
SUCH
ACCOUNTANT OR AUDITOR SHALL REPORT TO NEOPHARM, OR A LICENSOR, AS THE CASE MAY
BE, ONLY AS TO THE ACCURACY OF THE NET SALES COMPUTATION AND ROYALTY PAYMENTS.
IF THE AUDIT SHOWS THAT NK HAS UNDERPAID ANY ROYALTIES BY FIVE PERCENT (5%) OR
MORE, FOR ANY PERIOD COVERED BY THE AUDIT, NK SHALL, IN ADDITION TO PROMPTLY
REMITTING TO NEOPHARM THE AMOUNT OF UNDERPAYMENT, (I) PAY FOR THE COST OF SUCH
AUDIT AND (II) PAY INTEREST TO NEOPHARM AT A PER ANNUM RATE EQUAL TO THREE
PERCENT (3%) ABOVE LONDON INTER BANK, OFFERED RATE (LIBOR), AS IN EFFECT ON THE
DATE OF SUCH DETERMINATION, ON SUCH UNDERPAYMENT FROM THE DATE