Common use of Records; Inspection Clause in Contracts

Records; Inspection. Ciba, Chiron and Affiliates of Ciba and Chiron shall keep complete, true and accurate books of account and records for the purpose of determining the amounts payable under Articles 8, 9 and 10 and Focal shall keep complete, true and accurate records of Research performed by Focal hereunder, the Research Costs thereof, the activities of Focal pursuant to Article 8 and the costs thereof, and the Production Costs of all Products and components. Such books and records shall be kept at the principal place of business of Ciba, Chiron or Focal or the Affiliate of Ciba, Chiron, or Focal as the case may be, for at least three (3) years following the end of the calendar quarter to which they pertain. Such records will be open for inspection, during such three (3) year period by an independent certified public accountant selected by Focal for inspections conducted by Focal, or a representative selected by Ciba or Chiron with respect to inspections conducted by Ciba or Chiron, and reasonably acceptable to the audited party, such acceptance not be unreasonably withheld for the purpose of verifying the amounts payable by Ciba/Chiron pursuant to Articles 8, 9 and 1 0, the amounts of reimbursement payable under this Agreement with respect to Research Costs, under Article 8 or the amounts of Production Costs, or other matters reasonably necessary in connection with Research, process development or manufacturing records maintained by Focal, as applicable. Such inspections may be made no more than once each calendar year, during normal business hours, as mutually agreed by Focal and Ciba or Chiron. The inspecting accountant will be under confidentiality obligations to the audited party to report to Focal only the amounts payable to Focal hereunder with respect to Net Sales during the period in question, in the case of an audit by Focal, and such matters as are the subject of the audit, including, but not limited to, FTE calculation Research Costs and Production Costs in the case of an audit by Ciba or Chiron. Inspections conducted under this Section 10.5 shall be at the expense of the auditing party, unless a variation or error producing an underpayment in amounts payable exceeding five percent (5%) of the amount paid for any period covered by the inspection is established in the course of any such inspection, whereupon all costs relating to the inspection for such period and any unpaid amounts that are discovered will be paid by the audited party, together with interest on such unpaid amounts at the rate specified in Section 10.2 above.

Records; Inspection. CibaArtiva shall, Chiron and shall cause its Affiliates of Ciba and Chiron shall Sublicensees to, keep complete, true and accurate books of account and records for the purpose of determining the amounts payable payments to be made under Articles 8, 9 and 10 and Focal shall keep complete, true and accurate records of Research performed by Focal hereunder, the Research Costs thereof, the activities of Focal pursuant to Article 8 and the costs thereof, and the Production Costs of all Products and componentsthis Agreement. Such books and records shall be kept at the principal place of business of Ciba, Chiron or Focal or the Affiliate of Ciba, Chiron, or Focal as the case may be, for at least three (3) [***] years following the end of the calendar quarter year to which they pertain. Such records will shall be open for inspection, inspection during such three (3) year period by an independent certified public accountant selected by Focal for inspections conducted by Focalaccountants, or a representative selected by Ciba or Chiron with respect to inspections conducted by Ciba or Chiron, and reasonably acceptable to the audited party, such acceptance not be unreasonably withheld solely for the purpose of verifying payment statements hereunder for a period covering not more than [***] months prior to the amounts payable by Ciba/Chiron pursuant date of request; provided that no period shall be subject to Articles 8, 9 inspection under this section more than once and 1 0, the amounts of reimbursement payable inspections with respect to payments on a Product under this Agreement shall be done concurrently with respect to Research Costs, payments on the same Product under Article 8 or the amounts of Production Costs, or other matters reasonably necessary in connection with Research, process development or manufacturing records maintained by Focal, as applicableOption Agreement to avoid duplication. Such inspections may shall be made no more than once each calendar year, on reasonable notice during normal business hours, as mutually agreed by Focal and Ciba or Chiron. The inspecting accountant independent accountants will be execute a reasonable written confidentiality agreement with Artiva and will disclose to GCLC only such information as is reasonably necessary to provide GCLC with information regarding any actual or potential discrepancies between amounts reported and actually paid and amounts payable under confidentiality obligations to this Agreement. The auditor will send a copy of the audited party to report to Focal only Artiva at the same time it is sent to GCLC. The report sent to both Parties will include the methodology and calculations used to determine the results. Any unpaid amounts payable to Focal hereunder with respect to Net Sales during the period in question, in the case of an audit that are discovered shall be paid promptly by Focal, and such matters as are the subject of the audit, including, but not limited to, FTE calculation Research Costs and Production Costs in the case of an audit by Ciba or ChironArtiva. Inspections conducted under this Section 10.5 3.5 shall be at the expense of the auditing partyGCLC, unless a variation or error producing the inspection discloses an underpayment in amounts payable exceeding five percent (5%) by Artiva of [***] or more of the amount paid due for any period covered by the inspection is established in the course of any such inspection, whereupon all costs relating to the inspection for such period and any unpaid amounts that are discovered will shall be paid promptly by Artiva. If the audited partyinspection discloses an overpayment by Artiva, together with interest on then Artiva will deduct the amount of such unpaid overpayment from amounts at otherwise owed to GCLC under this Agreement, unless no further payments are due hereunder, in which case the rate specified in Section 10.2 aboveamount of such overpayment shall be refunded by GCLC to Artiva.

Records; Inspection. CibaDYNACURE shall, Chiron and shall cause its Affiliates of Ciba and Chiron shall to, keep complete, true true, and accurate books of account and records that may be necessary for the purpose of determining the amounts calculating any payments payable to Co-Owners under Articles 8, 9 and 10 and Focal shall keep complete, true and accurate records Article 4 of Research performed by Focal hereunder, the Research Costs thereof, the activities of Focal pursuant to Article 8 and the costs thereof, and the Production Costs of all Products and componentsthis Agreement (“Records”). Such books and records All such Records shall be kept at the principal place of business of Ciba, Chiron or Focal or the Affiliate of Ciba, Chiron, or Focal by DYNACURE and/or its Affiliates as the case may beapplicable, for at least three (3) years [***] following the end of the calendar quarter year period to which they pertain. Such records Records will be open for inspection, inspection during such three (3) year [***] period by an independent certified public accountant accounting firm selected by Focal for inspections conducted by Focal, or a representative selected by Ciba or Chiron with respect to inspections conducted by Ciba or Chiron, and reasonably acceptable to ICM acting on behalf of the audited party, such acceptance not be unreasonably withheld Co-Owners for the purpose of verifying the amounts payable by Ciba/Chiron pursuant to Articles 8, 9 and 1 0, the amounts of reimbursement payable under this Agreement with respect to Research Costs, under Article 8 payment statements or the amounts of Production Costs, or other matters reasonably necessary in connection with Research, process development or manufacturing records maintained by Focalinvoices, as applicable. Such inspections may be made no more than once [***] each calendar year, during normal business hours, as at reasonable times mutually agreed by Focal DYNACURE and Ciba or Chiron. The inspecting accountant will be under confidentiality obligations to the audited party to report to Focal only the amounts payable to Focal hereunder with respect to Net Sales during the period in question, in the case of an audit by Focal, and such matters as are the subject ICM acting on behalf of the audit, including, but not limited to, FTE calculation Research Costs and Production Costs in Co-Owners. DYNACURE and/or its Affiliates may require the case of an audit by Ciba accounting firm to sign a standard non-disclosure agreement before allowing the accounting firm access to its/their facilities or Chironits/their records. Inspections conducted under this Section 10.5 hereunder shall be at the expense of ICM acting on behalf of the auditing partyCo-Owners; however, unless a variation in the event such audit reveals that the amounts declared and paid to ICM acting on behalf of the Co-Owners in respect of one or error producing more [***] periods constitute an underpayment in amounts payable exceeding five percent (5%) of [***] or more as compared with that revealed by the audit to be actually owed, the cost of the amount paid for any period covered audit shall be borne by the inspection DYNACURE. [***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded information is established in the course of any such inspection, whereupon all costs relating not material and would likely cause competitive harm to the inspection for registrant if publicly disclosed. Upon completion of the audit, the accounting firm shall provide DYNACURE and ICM acting on behalf of the Co-Owners a written report disclosing any discrepancies in monies due under this Agreement and, in each case, the specific details concerning any discrepancies. No other information shall be provided to ICM acting on behalf of the Co-Owners. DYNACURE shall promptly pay to ICM acting on behalf of the Co-Owners all amounts revealed by such period audit to have been owed and any unpaid amounts that are discovered will be not paid by the audited partyDYNACURE, together with interest on such unpaid amounts thereon applied to the period from the date the amount should have been paid to the date it is actually paid at the an interest rate specified in equal to equal to [***]. The terms of this Section 10.2 above5.5 shall survive any termination or Expiration of this Agreement for a period of [***].

Records; Inspection. CibaArtiva shall, Chiron and shall cause its Affiliates of Ciba and Chiron shall Sublicensees to, keep complete, true and accurate books of account and records for the purpose of determining the amounts payable payments to be made under Articles 8, 9 and 10 and Focal shall keep complete, true and accurate records of Research performed by Focal hereunder, the Research Costs thereof, the activities of Focal pursuant to Article 8 and the costs thereof, and the Production Costs of all Products and componentsthis Agreement. Such books and records shall be kept at the principal place of business of Ciba, Chiron or Focal or the Affiliate of Ciba, Chiron, or Focal as the case may be, for at least three (3) [***] years following the end of the calendar quarter year to which they pertain. Such records will shall be open for inspection, inspection during such three (3) year period by an independent certified public accountant selected by Focal for inspections conducted by Focalaccountants, or a representative selected by Ciba or Chiron with respect to inspections conducted by Ciba or Chiron, and reasonably acceptable to the audited party, such acceptance not be unreasonably withheld solely for the purpose of verifying payment statements hereunder for a period covering not more than [***] months prior to the amounts payable by Ciba/Chiron pursuant date of request; provided that no period shall be subject to Articles 8, 9 inspection under this section more than once and 1 0, the amounts of reimbursement payable inspections with respect to payments on a Product under this Agreement shall be done concurrently with respect to Research Costs, payments on the same Product under Article 8 or the amounts of Production Costs, or other matters reasonably necessary in connection with Research, process development or manufacturing records maintained by Focal, as applicableOption Agreement to avoid duplication. Such inspections may shall be made no more than once each calendar year, on reasonable notice during normal business hours, as mutually agreed by Focal and Ciba or Chiron. The inspecting accountant independent accountants will be execute a reasonable written confidentiality agreement with Artiva and will disclose to GCLC only such information as is reasonably necessary to provide GCLC with information regarding any actual or potential discrepancies between amounts reported and actually paid and amounts payable under confidentiality obligations to this Agreement. The auditor will send a copy of the audited party to report to Focal only Artiva at the same time it is sent to GCLC. The report sent to both Parties will include the methodology and calculations used to determine the results. Any unpaid amounts payable to Focal hereunder with respect to Net Sales during the period in question, in the case of an audit that are discovered shall be paid promptly by Focal, and such matters as are the subject of the audit, including, but not limited to, FTE calculation Research Costs and Production Costs in the case of an audit by Ciba or ChironArtiva. Inspections conducted under this Section 10.5 3.4 shall be at the expense of the auditing partyGCLC, unless a variation or error producing the inspection discloses an underpayment in amounts payable exceeding five percent (5%) by Artiva of [***] or more of the amount paid due for any period covered by the inspection is established in the course of any such inspection, whereupon all costs relating to the inspection for such period and any unpaid amounts that are discovered will shall be paid promptly by Artiva. If the audited partyinspection discloses an overpayment by Artiva, together with interest on then Artiva will deduct the amount of such unpaid overpayment from amounts at otherwise owed to GCLC under this Agreement, unless no further payments are due hereunder, in which case the rate specified in Section 10.2 aboveamount of such overpayment shall be refunded by GCLC to Artiva.

Records; Inspection. Ciba, Chiron Schering and its Affiliates of Ciba and Chiron shall keep complete, true and accurate books of account and records for the purpose of determining the royalty amounts payable under Articles 8this Agreement, 9 and 10 and Focal shall keep complete, true and accurate records of Research performed by Focal hereunder, the Research Costs thereof, the activities of Focal pursuant to Article 8 and the costs thereof, and the Production Costs of all Products and components. Such which books and records shall be kept at the principal place of business of Cibamaintained in accordance with Schering’s records retention policies. Upon prior written notice from Pharmacopeia, Chiron or Focal or the Affiliate of CibaSchering shall, Chironwithin a period not to exceed forty-five (45) days, or Focal as the case may be, for at least three (3) years following the end of the calendar quarter to which they pertain. Such records will be open for inspection, during such three (3) year period by permit an independent certified public accountant accounting firm of nationally recognized standing selected by Focal for inspections conducted by Focal, or a representative selected by Ciba or Chiron with respect to inspections conducted by Ciba or Chiron, Pharmacopeia and reasonably acceptable to the audited partySchering, such acceptance not at Pharmacopeia’s expense, to have access during normal business hours to examine pertinent books and records of Schering and/or its Affiliates as may be unreasonably withheld for the purpose of verifying the amounts payable by Ciba/Chiron pursuant to Articles 8, 9 and 1 0, the amounts of reimbursement payable under this Agreement with respect to Research Costs, under Article 8 or the amounts of Production Costs, or other matters reasonably necessary in connection with Research, process development or manufacturing to verify the accuracy of the royalty reports hereunder. The examination shall be limited to pertinent books and records maintained by Focal, as applicablefor any calendar year ending not more than thirty-six (36) months prior to the date of such request. Such inspections may be made no more than once each calendar year, during normal business hours, as mutually agreed by Focal and Ciba or Chiron. The inspecting accountant will be under confidentiality obligations to In the audited party to report to Focal only event that the amounts payable to Focal hereunder with respect to Net Sales during the period in question, in the case of an audit by Focal, and such matters as are the subject of the audit, including, but not limited to, FTE calculation Research Costs and Production Costs in the case of an audit by Ciba or Chiron. Inspections conducted under this Section 10.5 shall be at the expense of the auditing party, unless accounting firm correctly concludes that a variation or error producing has occurred resulting in an underpayment in amounts payable exceeding of royalties by Schering of five percent (5%) 5)% or more of the amount paid actually due for any the period covered by the inspection is established in the course of any such inspection, whereupon all Schering shall pay to Pharmacopeia such additional amounts, as well as the costs relating to the inspection inspection, within thirty (30) days of receipt of an invoice for such amounts. Any overpayment of royalties by Schering discovered through such audit shall be fully creditable against royalties subsequently due hereunder. Schering may designate competitively sensitive information which such auditor may not disclose to Pharmacopeia; provided, however, that such designation shall not encompass the auditor’s conclusions. The accounting firm shall disclose to Pharmacopeia only whether the royalty reports are correct or incorrect and the specific details concerning any discrepancies. No other information shall be provided to Pharmacopeia. The accounting firm employees shall sign confidentiality agreements acceptable to Schering as a condition precedent to their inspection. Schering shall include in each sublicense granted by it pursuant to this Agreement a provision requiring the Sublicensee to make reports to Schering, to keep and maintain records of sales made pursuant to such sublicense and to grant access to such records by Pharmacopeia’s independent accountant to the same extent required of Schering under this Agreement. Upon expiration of the thirty-six (36) month period immediately following the receipt by Pharmacopeia of Schering’s fourth quarter royalty report for a given calendar year in accordance with Section 5.6.1, the calculation of royalties payable with respect to such year shall be binding and conclusive upon Pharmacopeia, and Schering, its Affiliates and its Sublicensees shall be released from any unpaid amounts that are discovered will be paid liability or accountability with respect to royalties for such year, except for instances of fraud or other intentional misconduct by the audited party, together with interest on such unpaid amounts at the rate specified in Section 10.2 aboveSchering.

Records; Inspection. Ciba, Chiron SPL and its Affiliates of Ciba and Chiron shall keep complete, true and accurate books of account and records for the purpose of determining the royalty amounts payable under Articles 8this Agreement, 9 and 10 and Focal shall keep complete, true and accurate records of Research performed by Focal hereunder, the Research Costs thereof, the activities of Focal pursuant to Article 8 and the costs thereof, and the Production Costs of all Products and components. Such which books and records shall be kept at the principal place of business of Cibamaintained in accordance with SPL’s records retention policies. Upon prior written notice from Pharmacopeia, Chiron or Focal or the Affiliate of CibaSPL shall, Chironwithin a period not to exceed forty-five (45) days, or Focal as the case may be, for at least three (3) years following the end of the calendar quarter to which they pertain. Such records will be open for inspection, during such three (3) year period by permit an independent certified public accountant accounting firm of nationally recognized standing selected by Focal for inspections conducted by Focal, or a representative selected by Ciba or Chiron with respect to inspections conducted by Ciba or Chiron, Pharmacopeia and reasonably acceptable to the audited partySPL, such acceptance not at Pharmacopeia’s expense, to have access during normal business hours to examine pertinent books and records of SPL and/or its Affiliates as may be unreasonably withheld for the purpose of verifying the amounts payable by Ciba/Chiron pursuant to Articles 8, 9 and 1 0, the amounts of reimbursement payable under this Agreement with respect to Research Costs, under Article 8 or the amounts of Production Costs, or other matters reasonably necessary in connection with Research, process development or manufacturing to verify the accuracy of the royalty reports hereunder. The examination shall be limited to pertinent books and records maintained by Focal, as applicablefor any calendar year ending not more than thirty-six (36) months prior to the date of such request. Such inspections may be made no more than once each calendar year, during normal business hours, as mutually agreed by Focal and Ciba or Chiron. The inspecting accountant will be under confidentiality obligations to In the audited party to report to Focal only event that the amounts payable to Focal hereunder with respect to Net Sales during the period in question, in the case of an audit by Focal, and such matters as are the subject of the audit, including, but not limited to, FTE calculation Research Costs and Production Costs in the case of an audit by Ciba or Chiron. Inspections conducted under this Section 10.5 shall be at the expense of the auditing party, unless accounting firm correctly concludes that a variation or error producing has occurred resulting in an underpayment in amounts payable exceeding of royalties by SPL of five percent (5%) 5)% or more of the amount paid actually due for any the period covered by the inspection is established in the course of any such inspection, whereupon all SPL shall pay to Pharmacopeia such additional amounts, as well as the costs relating to the inspection inspection, within thirty (30) days of receipt of an invoice for such amounts. Any overpayment of royalties by SPL discovered through such audit shall be fully creditable against royalties subsequently due hereunder. SPL may designate competitively sensitive information which such auditor may not disclose to Pharmacopeia; provided, however, that such designation shall not encompass the auditor’s conclusions. The accounting firm shall disclose to Pharmacopeia only whether the royalty reports are correct or incorrect and the specific details concerning any discrepancies. No other information shall be provided to Pharmacopeia. The accounting firm employees shall sign confidentiality agreements acceptable to SPL as a condition precedent to their inspection. SPL shall include in each sublicense granted by it pursuant to this Agreement a provision requiring the Sublicensee to make reports to SPL, to keep and maintain records of sales made pursuant to such sublicense and to grant access to such records by Pharmacopeia’s independent accountant to the same extent required of SPL under this Agreement. Upon expiration of the thirty-six (36) month period immediately following the receipt by Pharmacopeia of SPL’s fourth quarter royalty report for a given calendar year in accordance with Section 5.6.1, the calculation of royalties payable with respect to such year shall be binding and conclusive upon Pharmacopeia, and SPL, its Affiliates and its Sublicensees shall be released from any unpaid amounts that are discovered will be paid liability or accountability with respect to royalties for such year, except for instances of fraud or other intentional misconduct by the audited party, together with interest on such unpaid amounts at the rate specified in Section 10.2 aboveSPL.

Records; Inspection. CibaVIVUS shall keep, Chiron and shall cause its Affiliates and licensees to keep, for a period of Ciba and Chiron shall keep completenot less than *** years, true and accurate books complete records relating to the determination of account Net Sales of VIVUS Products and records for the purpose of determining the amounts payable under Articles 8, 9 and 10 and Focal shall keep complete, true and accurate records of Research performed by Focal hereunder, the Research Costs thereof, the activities of Focal royalties due to SELTEN pursuant to Article 8 and Section 3.4. SELTEN shall have the costs thereofright, and at its sole expense, during the Production Costs of all Products and components. Such books and records shall be kept at the principal place of business of Ciba, Chiron or Focal or the Affiliate of Ciba, Chiron, or Focal as the case may be, for at least three (3) years Term following the end First Commercial Sale of the calendar quarter any VIVUS Product and following reasonable notice, to which they pertain. Such records will be open for inspection, during such three (3) year period by inspect through an independent certified public accountant selected by Focal for inspections conducted by Focal, or a representative selected by Ciba or Chiron with respect to inspections conducted by Ciba or Chiron, and reasonably acceptable to the audited party, such acceptance not be unreasonably withheld for the purpose of verifying the amounts payable by Ciba/Chiron pursuant to Articles 8, 9 and 1 0VIVUS during regular business hours, the amounts records of reimbursement payable under this Agreement with respect VIVUS (or its Affiliates or licensees) relating to Research Coststhe sales of any VIVUS Products; provided, under Article 8 or the amounts of Production Costshowever, or other matters reasonably necessary in connection with Research, process development or manufacturing records maintained by Focal, as applicable. Such inspections may be made no that such inspection shall not (i) take place more often than once each calendar year, during normal business hours, as mutually agreed by Focal year and Ciba or Chiron. The inspecting accountant will be under confidentiality obligations (ii) audit any records that date prior to the audited party to date of the last inspection under this Section, and further provided that, such accountants shall in strict confidence and report to Focal SELTEN only as to the amounts payable accuracy of the royalty statements and payments and the amount of any underpayment. Copies of such reports shall be supplied to Focal hereunder with respect VIVUS. If any audit or inspection of VIVUS’s records reveals an underpayment by VIVUS, VIVUS shall make payment to Net Sales during the period in question, in the case SELTEN of an audit amount equal to such underpayment within *** days following *** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. notification by Focal, and such matters as are the subject of the audit, including, but not limited to, FTE calculation Research Costs and Production Costs in the case of an audit by Ciba or Chiron. Inspections conducted under this Section 10.5 shall be at the expense of the auditing party, unless a variation or error producing an underpayment in amounts payable exceeding five percent (5%) SELTEN to VIVUS of the amount paid underpaid. In the event that there has been an underpayment greater than or equal to *** percent (***%), VIVUS shall reimburse SELTEN for any period covered by the inspection is established in reasonable costs of the course of any such relevant audit or inspection, whereupon all costs relating to the inspection for such period and any unpaid amounts that are discovered will be paid by the audited party, together with interest on such unpaid amounts at the rate specified in Section 10.2 above.

Records; Inspection. Ciba, Chiron and Affiliates of Ciba and Chiron Licensee shall keep (and cause its Affiliates and sublicensees to keep) complete, true and accurate books of account and records for the purpose of determining the amounts royalties payable by Licensee to Xxxxxxx under Articles 8Section 6.3 (the “Royalty Records”), 9 and 10 and Focal shall keep complete, true and accurate records of Research performed by Focal hereunder, the Research Costs thereof, the activities of Focal pursuant to Article 8 and the costs thereof, and the Production Costs of all Products and components. Such books and records which 40 Royalty Records shall be kept at the principal place of business of Ciba, Chiron or Focal or the Affiliate of Ciba, Chiron, or Focal as the case may be, retained for at least three (3) years […***…] following the end of the calendar quarter Calendar Year to which they pertain. Such records will be open Licensee shall, and shall cause its Affiliates and sublicensees to, make the Royalty Records available for inspection, during such three (3) year period inspection by an independent certified public accountant accounting firm of national prominence selected by Focal for inspections conducted by Focal, or a representative selected by Ciba or Chiron with respect to inspections conducted by Ciba or ChironXxxxxxx, and reasonably acceptable to the audited partyLicensee, such acceptance not during normal business hours, as may be unreasonably withheld reasonably necessary for the sole purpose of verifying the amounts payable royalty reports and payments delivered by Ciba/Chiron Licensee pursuant to Articles 8, 9 and 1 0, Section 6.3 during the amounts of reimbursement payable under this Agreement preceding […***…] full Calendar Years. The records for a given Calendar Year shall be subject to audit no more than one time. Such independent public accounting firm shall execute a reasonable confidentiality agreement with respect Licensee prior to Research Costs, under Article 8 or the amounts of Production Costs, or other matters reasonably necessary in connection with Research, process development or manufacturing records maintained by Focal, as applicablecommencing any such inspection. Such inspections may shall be made no more than once each calendar year, during normal business hours, as mutually agreed by Focal Calendar Year at reasonable times and Ciba or Chironon reasonable notice. The inspecting accountant will be under confidentiality obligations to Xxxxxxx shall bear the audited party to report to Focal only the amounts payable to Focal hereunder with respect to Net Sales during the period in question, in the case costs and expenses of an audit by Focal, and such matters as are the subject of the audit, including, but not limited to, FTE calculation Research Costs and Production Costs in the case of an audit by Ciba or Chiron. Inspections any inspection conducted under this Section 10.5 shall be at the expense of the auditing party, 6.5 unless a variation or error producing such inspection reveals an underpayment in amounts royalties payable exceeding five percent (5%) pursuant to Section 6.3 of more than […***…] of the amount paid payable for any the period covered by the inspection is established in the course of any such inspection, whereupon all in which case Licensee shall bear the costs relating and expenses of such inspection. If such inspection reveals an overpayment by Licensee pursuant to Section 6.3, then Licensee shall deduct the amount of such overpayment from any payment that subsequently becomes due and payable by Licensee under this Agreement or, if no payment is anticipated to be due and payable by Licensee in the following Calendar Quarter, Licensee shall invoice Xxxxxxx for the amount of the underpayment and Xxxxxxx shall pay such invoice within […***…] after receipt thereof. If such inspection reveals an underpayment by Licensee pursuant to Section 6.3, then Xxxxxxx shall invoice Licensee for the amount of the underpayment and Licensee shall pay such period and any unpaid amounts that are discovered will be paid by the audited party, together with interest on such unpaid amounts at the rate specified in Section 10.2 aboveinvoice within […***…] after receipt thereof.

Records; Inspection. Ciba, Chiron Schering and its Affiliates of Ciba and Chiron shall keep -------------------------- complete, true and accurate books of account and records for the purpose of determining the royalty amounts payable under Articles 8this Agreement, 9 and 10 and Focal shall keep complete, true and accurate records of Research performed by Focal hereunder, the Research Costs thereof, the activities of Focal pursuant to Article 8 and the costs thereof, and the Production Costs of all Products and components. Such which books and records shall be kept at the principal place of business of Cibamaintained in accordance with Schering's records retention policies. Upon prior written notice from Pharmacopeia, Chiron or Focal or the Affiliate of CibaSchering shall, Chironwithin a period not to exceed forty-five (45) days, or Focal as the case may be, for at least three (3) years following the end of the calendar quarter to which they pertain. Such records will be open for inspection, during such three (3) year period by permit an independent certified public accountant accounting firm of nationally recognized standing selected by Focal for inspections conducted by Focal, or a representative selected by Ciba or Chiron with respect to inspections conducted by Ciba or Chiron, Pharmacopeia and reasonably acceptable to the audited partySchering, such acceptance not at __________________ * CONFIDENTIAL TREATMENT REQUESTED Pharmacopeia's expense, to have access during normal business hours to examine pertinent books and records of Schering and/or its Affiliates as may be unreasonably withheld for the purpose of verifying the amounts payable by Ciba/Chiron pursuant to Articles 8, 9 and 1 0, the amounts of reimbursement payable under this Agreement with respect to Research Costs, under Article 8 or the amounts of Production Costs, or other matters reasonably necessary in connection with Research, process development or manufacturing to verify the accuracy of the royalty reports hereunder. The examination shall be limited to pertinent books and records maintained by Focal, as applicablefor any calendar year ending not more than * months prior to the date of such request. Such inspections may be made no more than once each calendar year, during normal business hours, as mutually agreed by Focal and Ciba or Chiron. The inspecting accountant will be under confidentiality obligations to In the audited party to report to Focal only event that the amounts payable to Focal hereunder with respect to Net Sales during the period in question, in the case of an audit by Focal, and such matters as are the subject of the audit, including, but not limited to, FTE calculation Research Costs and Production Costs in the case of an audit by Ciba or Chiron. Inspections conducted under this Section 10.5 shall be at the expense of the auditing party, unless accounting firm correctly concludes that a variation or error producing has occurred resulting in an underpayment in amounts payable exceeding five percent (5%) of royalties by Schering of * or more of the amount paid actually due for any the period covered by the inspection is established in the course of any such inspection, whereupon all Schering shall pay to Pharmacopeia such additional amounts, as well as the costs relating to the inspection inspection, within * days of receipt of an invoice for such amounts. Any overpayment of royalties by Schering discovered through such audit shall be fully creditable against royalties subsequently due hereunder. Schering may designate competitively sensitive information which such auditor may not disclose to Pharmacopeia; provided, however, that such designation shall not -------- ------- encompass the auditor's conclusions. The accounting firm shall disclose to Pharmacopeia only whether the royalty reports are correct or incorrect and the specific details concerning any discrepancies. No other information shall be provided to Pharmacopeia. The accounting firm employees shall sign confidentiality agreements acceptable to Schering as a condition precedent to their inspection. Schering shall include in each sublicense granted by it pursuant to this Agreement a provision requiring the Sublicensee to make reports to Schering, to keep and maintain records of sales made pursuant to such sublicense and to grant access to such records by Pharmacopeia's independent accountant to the same extent required of Schering under this Agreement. Upon expiration of the * month period immediately following the receipt by Pharmacopeia of Schering's fourth quarter royalty report for a given calendar year in accordance with Section 5.5.1, the calculation of royalties payable with respect to such year shall be binding and conclusive upon Pharmacopeia, and Schering, its Affiliates and its Sublicensees shall be released from any unpaid amounts that are discovered will be paid liability or accountability with respect to royalties for such year, except for instances of fraud or other intentional misconduct by the audited party, together with interest on such unpaid amounts at the rate specified in Section 10.2 aboveSchering.

Records; Inspection. Ciba, Chiron and Affiliates of Ciba and Chiron Xxxxxxx shall keep (and cause its Affiliates and (sub)licensees to keep) complete, true and accurate books of account and records for the purpose of determining the amounts royalties payable by Xxxxxxx to TRACON under Articles 8Section 5.3 (the “Royalty Records”), 9 and 10 and Focal shall keep complete, true and accurate records of Research performed by Focal hereunder, the Research Costs thereof, the activities of Focal pursuant to Article 8 and the costs thereof, and the Production Costs of all Products and components. Such books and records which Royalty Records shall be kept at the principal place of business of Ciba, Chiron or Focal or the Affiliate of Ciba, Chiron, or Focal as the case may be, retained for at least three (3) years […***…] following the end of the calendar quarter Calendar Year to which they pertain. Such records will be open Xxxxxxx shall, and shall cause its Affiliates and (sub)licensees to, make the Royalty Records available for inspection, during such three (3) year period inspection by an independent certified public accountant accounting firm of national prominence selected by Focal for inspections conducted by Focal, or a representative selected by Ciba or Chiron with respect to inspections conducted by Ciba or ChironTRACON, and reasonably acceptable to the audited partyXxxxxxx, such acceptance not during normal business hours, as may be unreasonably withheld reasonably necessary for the sole purpose of verifying the amounts payable royalty reports and payments delivered by Ciba/Chiron Xxxxxxx pursuant to Articles 8, 9 and 1 0, Section 5.3 during the amounts of reimbursement payable under this Agreement preceding […***…] full Calendar Years. The records for a given Calendar Year shall be subject to audit no more than one time. Such independent public accounting firm shall execute a reasonable confidentiality agreement with respect Xxxxxxx prior to Research Costs, under Article 8 or the amounts of Production Costs, or other matters reasonably necessary in connection with Research, process development or manufacturing records maintained by Focal, as applicablecommencing any such inspection. Such inspections may shall be made no more than once each calendar year, during normal business hours, as mutually agreed by Focal Calendar Year at reasonable times and Ciba or Chironon reasonable notice. The inspecting accountant will be under confidentiality obligations to TRACON shall bear the audited party to report to Focal only the amounts payable to Focal hereunder with respect to Net Sales during the period in question, in the case costs and expenses of an audit by Focal, and such matters as are the subject of the audit, including, but not limited to, FTE calculation Research Costs and Production Costs in the case of an audit by Ciba or Chiron. Inspections any inspection conducted under this Section 10.5 shall be at the expense of the auditing party, 5.5 unless a variation or error producing such inspection reveals an underpayment in amounts royalties payable exceeding five percent (5%) pursuant to Section 5.3 of more than […***…] of the amount paid payable for any the period covered by the inspection is established in the course of any such inspection, whereupon all in which case Xxxxxxx shall bear the costs relating and expenses of such inspection. If such inspection reveals an overpayment by Xxxxxxx pursuant to Section 5.3, then Xxxxxxx shall deduct the amount of such overpayment from any payment that subsequently becomes due and payable by Xxxxxxx under this Agreement or, if no payment is anticipated to be due and payable by Xxxxxxx in the following Calendar Quarter, Xxxxxxx shall invoice TRACON for the amount of the underpayment and TRACON shall pay such invoice within […***…] after receipt thereof. If such inspection reveals an underpayment by Xxxxxxx pursuant to Section 5.3, then TRACON shall invoice Xxxxxxx for the amount of the underpayment and Xxxxxxx shall pay such period and any unpaid amounts that are discovered will be paid by the audited party, together with interest on such unpaid amounts at the rate specified in Section 10.2 aboveinvoice within […***…] after receipt thereof.

Records; Inspection. Ciba, Chiron SPL and its Affiliates of Ciba and Chiron shall keep -------------------------- complete, true and accurate books of account and records for the purpose of determining the royalty amounts payable under Articles 8this Agreement, 9 and 10 and Focal shall keep complete, true and accurate records of Research performed by Focal hereunder, the Research Costs thereof, the activities of Focal pursuant to Article 8 and the costs thereof, and the Production Costs of all Products and components. Such which books and records shall be kept at the principal place of business of Cibamaintained in accordance with SPL's records retention policies. Upon prior written notice from Pharmacopeia, Chiron or Focal or the Affiliate of CibaSPL shall, Chironwithin a period not to exceed forty-five (45) days, or Focal as the case may be, for at least three (3) years following the end of the calendar quarter to which they pertain. Such records will be open for inspection, during such three (3) year period by permit an independent certified public accountant accounting firm of nationally recognized standing selected by Focal for inspections conducted by Focal, or a representative selected by Ciba or Chiron with respect to inspections conducted by Ciba or Chiron, Pharmacopeia and reasonably acceptable to the audited partySPL, such acceptance not at Pharmacopeia's expense, to have access during normal business hours to examine pertinent books and records of SPL and/or its Affiliates as may be unreasonably withheld for the purpose of verifying the amounts payable by Ciba/Chiron pursuant to Articles 8, 9 and 1 0, the amounts of reimbursement payable under this Agreement with respect to Research Costs, under Article 8 or the amounts of Production Costs, or other matters reasonably necessary in connection with Research, process development or manufacturing to verify the accuracy of the royalty reports hereunder. The examination shall be limited to pertinent books and records maintained by Focal, as applicablefor any calendar year ending not more than * months prior to the date of such request. Such inspections may be made no more than once each calendar year, during normal business hours, as mutually agreed by Focal and Ciba or Chiron. The inspecting accountant will be under confidentiality obligations to In the audited party to report to Focal only event that the amounts payable to Focal hereunder with respect to Net Sales during the period in question, in the case of an audit by Focal, and such matters as are the subject of the audit, including, but not limited to, FTE calculation Research Costs and Production Costs in the case of an audit by Ciba or Chiron. Inspections conducted under this Section 10.5 shall be at the expense of the auditing party, unless accounting firm correctly concludes that a variation or error producing has occurred resulting in an underpayment in amounts payable exceeding five percent (5%) of royalties by SPL of * or more of the amount paid actually due for any the period covered by the inspection is established in the course of any such inspection, whereupon all SPL shall pay to Pharmacopeia such additional amounts, as well as the costs relating to the inspection inspection, within * days of receipt of an invoice for such amounts. Any overpayment of royalties by SPL discovered through such audit shall be fully creditable against royalties subsequently due hereunder. SPL may designate competitively sensitive information which such auditor may not disclose to Pharmacopeia; provided, however, that such designation shall not -------- ------- encompass the auditor's conclusions. The accounting firm shall disclose to Pharmacopeia only whether the royalty reports are correct or incorrect and the specific details concerning any discrepancies. No other information shall be provided to Pharmacopeia. The accounting firm employees shall sign confidentiality agreements acceptable to SPL as a condition precedent to their inspection. SPL shall include in each sublicense granted by it __________________ * CONFIDENTIAL TREATMENT REQUESTED pursuant to this Agreement a provision requiring the Sublicensee to make reports to SPL, to keep and maintain records of sales made pursuant to such sublicense and to grant access to such records by Pharmacopeia's independent accountant to the same extent required of SPL under this Agreement. Upon expiration of the * month period immediately following the receipt by Pharmacopeia of SPL's fourth quarter royalty report for a given calendar year in accordance with Section 5.5.1, the calculation of royalties payable with respect to such year shall be binding and conclusive upon Pharmacopeia, and SPL, its Affiliates and its Sublicensees shall be released from any unpaid amounts that are discovered will be paid liability or accountability with respect to royalties for such year, except for instances of fraud or other intentional misconduct by the audited party, together with interest on such unpaid amounts at the rate specified in Section 10.2 aboveSchering.

Records; Inspection. Ciba, Chiron and Affiliates of Ciba and Chiron Licensee shall keep (and cause its Affiliates and sublicensees to keep) complete, true and accurate books of account and records for the purpose of determining the amounts royalties payable by Licensee to Xxxxxxx under Articles 8Section 6.3 (the “Royalty Records”), 9 and 10 and Focal shall keep complete, true and accurate records of Research performed by Focal hereunder, the Research Costs thereof, the activities of Focal pursuant to Article 8 and the costs thereof, and the Production Costs of all Products and components. Such books and records which Royalty Records shall be kept at the principal place of business of Ciba, Chiron or Focal or the Affiliate of Ciba, Chiron, or Focal as the case may be, retained for at least three (3) years […***…] following the end of the calendar quarter Calendar Year to which they pertain. Such records will be open Licensee shall, and shall cause its Affiliates and sublicensees to, make the Royalty Records available for inspection, during such three (3) year period inspection by an independent certified public accountant accounting firm of national prominence selected by Focal for inspections conducted by Focal, or a representative selected by Ciba or Chiron with respect to inspections conducted by Ciba or ChironXxxxxxx, and reasonably acceptable to the audited partyLicensee, such acceptance not during normal business hours, as may be unreasonably withheld reasonably necessary for the sole purpose of verifying the amounts payable royalty reports and payments delivered by Ciba/Chiron Licensee pursuant to Articles 8, 9 and 1 0, Section 6.3 during the amounts of reimbursement payable under this Agreement preceding […***…] full Calendar Years. The records for a given Calendar Year shall be subject to audit no more than one time. Such independent public accounting firm shall execute a reasonable confidentiality agreement with respect Licensee prior to Research Costs, under Article 8 or the amounts of Production Costs, or other matters reasonably necessary in connection with Research, process development or manufacturing records maintained by Focal, as applicablecommencing any such inspection. Such inspections may shall be made no more than once each calendar year, during normal business hours, as mutually agreed by Focal Calendar Year at reasonable times and Ciba or Chironon reasonable notice. The inspecting accountant will be under confidentiality obligations to Xxxxxxx shall bear the audited party to report to Focal only the amounts payable to Focal hereunder with respect to Net Sales during the period in question, in the case costs and expenses of an audit by Focal, and such matters as are the subject of the audit, including, but not limited to, FTE calculation Research Costs and Production Costs in the case of an audit by Ciba or Chiron. Inspections any inspection conducted under this Section 10.5 shall be at the expense of the auditing party, 6.5 unless a variation or error producing such inspection reveals an underpayment in amounts royalties payable exceeding five percent (5%) pursuant to Section 6.3 of more than […***…] of the amount paid payable for any the period covered by the inspection is established in the course of any such inspection, whereupon all in which case Licensee shall bear the costs relating and expenses of such inspection. If such inspection reveals an overpayment by Licensee pursuant to Section 6.3, then Licensee shall deduct the amount of such overpayment from any payment that subsequently becomes due and payable by Licensee under this Agreement or, if no payment is anticipated to be due and payable by Licensee in the following Calendar Quarter, Licensee shall invoice Xxxxxxx for the amount of the underpayment and Xxxxxxx shall pay such invoice within […***…] after receipt thereof. If such inspection ***Confidential Treatment Requested 42 reveals an underpayment by Licensee pursuant to Section 6.3, then Xxxxxxx shall invoice Licensee for the amount of the underpayment and Licensee shall pay such period and any unpaid amounts that are discovered will be paid by the audited party, together with interest on such unpaid amounts at the rate specified in Section 10.2 aboveinvoice within […***…] after receipt thereof.

Records; Inspection. CibaLicensee agrees to keep, Chiron and Affiliates of Ciba and Chiron shall keep complete[####], true and accurate books of account and records for the purpose of determining the amounts payable under Articles 8, 9 and 10 and Focal shall keep complete, true and accurate records of Research performed by Focal all sales of royalty bearing Licensed Products in sufficient detail, including reports received from its Sublicensees hereunder, to permit Lonza to confirm the Research Costs thereofaccuracy of Licensee’s royally calculations. Once a year, at the activities request and expense of Focal pursuant to Article 8 and the costs thereofLonza, upon at least [####]prior written notice, and the Production Costs of all Products during business hours and componentsat such time as is reasonably acceptable io Licensee. Such books and records Licensee shall be kept at the principal place of business of Cibapermit a nationally recognized, Chiron or Focal or the Affiliate of Cibaindependent, Chiron, or Focal as the case may be, for at least three (3) years following the end of the calendar quarter to which they pertain. Such records will be open for inspection, during such three (3) year period by an independent certified public accountant selected appointed by Focal for inspections conducted by Focal, or a representative selected by Ciba or Chiron with respect to inspections conducted by Ciba or Chiron, Lonza and reasonably acceptable to the audited partyLicensee, such acceptance not be unreasonably withheld for the purpose of verifying the amounts payable by Ciba/Chiron pursuant to Articles 8, 9 and 1 0, the amounts of reimbursement payable under this Agreement with respect to Research Costs, under Article 8 or the amounts of Production Costs, or other matters reasonably necessary in connection with Research, process development or manufacturing examine these records maintained by Focal, as applicable. Such inspections may be made no more than once each calendar year, during normal business hours, as mutually agreed by Focal and Ciba or Chiron. The inspecting accountant will be under confidentiality obligations solely to the audited party extent necessary to report verify such calculations, provided that such accountant has entered into a confidentiality agreement with Licensee substantially similar to Focal only (he confidentiality provisions typically entered into with its own accountants, limiting the amounts payable use and disclosure of such information to Focal hereunder with respect purposes germane hereto. Audits shall be limited to Net Sales during results of the period in question, same subject matter in the case of an audit [####]prior to such notification that have not been previously audited by Focal, and such matters as are the subject of the audit, including, but not limited to, FTE calculation Research Costs and Production Costs in the case of an audit by Ciba or ChironLonza. Inspections conducted under this Section 10.5 shall be at the expense of the auditing party, unless a variation or error producing an underpayment in amounts payable exceeding five percent (5%) of the amount paid for any period covered by the inspection is established in the course Results of any such inspectionexamination shall be made available first to Licensee, whereupon and, following redaction of any proprietary information of Licensee not germane to the calculation of royalties hereunder, then to Lonza. If such examination reveals an underpayment of royalties [####]. Licensee shall pay all costs relating of such examination. In the event such accountant concludes that additional royalties were owed, Licensee shall [####] to have such conclusions reviewed by its own accountants, and if they concur, the inspection for such period and any unpaid amounts that are discovered will additional royalties shall be paid within [####]of the date of such concurrence, in this event that Licensee’s accountants do not concur with the conclusions of the accountants retained by Lonza, the audited partyParties agree to negotiate in good faith to resolve such disagreement as soon as reasonable. In the event that there was an overpayment by Licensee hereunder, together with interest on such unpaid amounts at Lonza shall promptly (but in no event later than [####]after Lonza’s receipt of the rate specified in Section 10.2 aboveindependent auditor’s report so correctly concluding) refund to Licensee the excess amount.

Records; Inspection. Ciba, Chiron and Affiliates of Ciba and Chiron Xxxxxxx shall keep (and cause its Affiliates and (sub)licensees to keep) complete, true and accurate books of account and records for the purpose of determining the amounts royalties payable by Xxxxxxx to TRACON under Articles 8Section 5.3 (the “Royalty Records”), 9 and 10 and Focal shall keep complete, true and accurate records of Research performed by Focal hereunder, the Research Costs thereof, the activities of Focal pursuant to Article 8 and the costs thereof, and the Production Costs of all Products and components. Such books and records which Royalty Records shall be kept at the principal place of business of Ciba, Chiron or Focal or the Affiliate of Ciba, Chiron, or Focal as the case may be, retained for at least three (3) years […***…] following the end of the calendar quarter Calendar Year to which they pertain. Such records will be open Xxxxxxx shall, and shall cause its Affiliates and (sub)licensees to, make the Royalty Records available for inspection, during such three (3) year period inspection by an independent certified public accountant accounting firm of national ***Confidential Treatment Requested prominence selected by Focal for inspections conducted by Focal, or a representative selected by Ciba or Chiron with respect to inspections conducted by Ciba or ChironTRACON, and reasonably acceptable to the audited partyXxxxxxx, such acceptance not during normal business hours, as may be unreasonably withheld reasonably necessary for the sole purpose of verifying the amounts payable royalty reports and payments delivered by Ciba/Chiron Xxxxxxx pursuant to Articles 8, 9 and 1 0, Section 5.3 during the amounts of reimbursement payable under this Agreement preceding […***…] full Calendar Years. The records for a given Calendar Year shall be subject to audit no more than one time. Such independent public accounting firm shall execute a reasonable confidentiality agreement with respect Xxxxxxx prior to Research Costs, under Article 8 or the amounts of Production Costs, or other matters reasonably necessary in connection with Research, process development or manufacturing records maintained by Focal, as applicablecommencing any such inspection. Such inspections may shall be made no more than once each calendar year, during normal business hours, as mutually agreed by Focal Calendar Year at reasonable times and Ciba or Chironon reasonable notice. The inspecting accountant will be under confidentiality obligations to TRACON shall bear the audited party to report to Focal only the amounts payable to Focal hereunder with respect to Net Sales during the period in question, in the case costs and expenses of an audit by Focal, and such matters as are the subject of the audit, including, but not limited to, FTE calculation Research Costs and Production Costs in the case of an audit by Ciba or Chiron. Inspections any inspection conducted under this Section 10.5 shall be at the expense of the auditing party, 5.5 unless a variation or error producing such inspection reveals an underpayment in amounts royalties payable exceeding five percent (5%) pursuant to Section 5.3 of more than […***…] of the amount paid payable for any the period covered by the inspection is established in the course of any such inspection, whereupon all in which case Xxxxxxx shall bear the costs relating and expenses of such inspection. If such inspection reveals an overpayment by Xxxxxxx pursuant to Section 5.3, then Xxxxxxx shall deduct the amount of such overpayment from any payment that subsequently becomes due and payable by Xxxxxxx under this Agreement or, if no payment is anticipated to be due and payable by Xxxxxxx in the following Calendar Quarter, Xxxxxxx shall invoice TRACON for the amount of the underpayment and TRACON shall pay such invoice within […***…] after receipt thereof. If such inspection reveals an underpayment by Xxxxxxx pursuant to Section 5.3, then TRACON shall invoice Xxxxxxx for the amount of the underpayment and Xxxxxxx shall pay such period and any unpaid amounts that are discovered will be paid by the audited party, together with interest on such unpaid amounts at the rate specified in Section 10.2 aboveinvoice within […***…] after receipt thereof.

Records; Inspection. Ciba, Chiron Toshiba and Affiliates of Ciba and Chiron SanDisk shall keep complete, true and accurate books of account and records on its own behalf and on behalf of the Toshiba and SanDisk Affiliates for the purpose of determining the CDP Product Fee amounts, Non-CDP Product Fee amounts, and any amounts payable under Articles 8, 9 and 10 and Focal shall keep complete, true and accurate records of Research performed by Focal hereunder, the Research Costs thereof, the activities of Focal Toshiba or SanDisk as applicable pursuant to Article 8 and the costs thereofSection 5.10, and the Production Costs of all Products and componentsunder this Agreement. Such books and records shall be kept at the principal place of business of Ciba, Chiron or Focal or the Affiliate of Ciba, Chiron, or Focal as the case may be, Toshiba and SanDisk for at least three (3) [*] years following the end of the calendar quarter to which they pertain. Intermolecular Confidential [*] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. Such records will be open for inspection, inspection during such three (3) [*] year period by an independent certified public accountant selected by Focal for inspections conducted by Focal, or a representative selected by Ciba or Chiron with respect to inspections conducted by Ciba or Chiron, and auditor who is reasonably acceptable to the audited partyparties and agrees to be bound to confidentiality protections of similar scope to those set out in Section 8 hereof, such acceptance not be unreasonably withheld solely for the purpose of verifying the statements related to amounts payable by Ciba/Chiron pursuant hereunder. Such auditor shall be instructed to Articles 8report only as to whether there is a discrepancy, 9 and 1 0if so, the amounts amount of reimbursement payable under this Agreement with respect to Research Costssuch discrepancy. With reasonable prior notice in writing, under Article 8 or the amounts of Production Costs, or other matters reasonably necessary in connection with Research, process development or manufacturing records maintained by Focal, as applicable. Such such inspections may be made no more than once each calendar year during regular business hours (other than during quarter-end or year-end financial closing periods), during normal business hours, as mutually agreed by Focal and Ciba or Chiron. The inspecting accountant will be under confidentiality obligations to the audited party to report to Focal only the amounts payable to Focal hereunder with respect to Net Sales during the period in question, in the case extent not unreasonably hindering any operations of an audit by Focal, Toshiba and such matters as are the subject of the audit, including, but not limited to, FTE calculation Research Costs and Production Costs in the case of an audit by Ciba or ChironSanDisk. Inspections conducted under this Section 10.5 shall be at the expense of the auditing partyIntermolecular, unless a variation or error producing an underpayment in amounts payable increase exceeding five [*] percent (5[*]%) of the amount paid royalties payable for any period covered by the inspection is established and confirmed in the course of any such inspection, whereupon all reasonable and documented costs relating to the inspection for such period and any unpaid amounts that are discovered will be paid promptly by Toshiba and/or SanDisk, as applicable. Further, if the audited partyforegoing inspection indicates a need for a follow-up inspection, together with interest on Intermolecular will have the right thereafter to conduct additional inspections from time to time within one year (in such unpaid amounts at case, the rate specified scope of the inspection shall be limited to those issues which Intermolecular needs to confirm the implementation of any corrective action therefor). Each party agrees to hold in confidence pursuant to Section 10.2 above8 all information concerning payments and associated reports, and all information learned in the course of any audit or inspection, except to the extent necessary for that party to reveal such information in order to enforce its rights under this Agreement or if disclosure is required by law.

Records; Inspection. CibaFor a period of [*] ([*]) years after the calendar quarter in which royalty payments are made by the Buyer to the Sellers under Section 2.4, Chiron and Affiliates of Ciba and Chiron the Buyer shall keep complete, true and accurate books of account and records for the purpose of determining the amounts payable under Articles 8, 9 and 10 and Focal shall keep complete, true complete and accurate records of Research performed by Focal hereunder, in sufficient detail to permit the Research Costs thereof, Seller to confirm the activities of Focal pursuant to Article 8 completeness and the costs thereof, and the Production Costs of all Products and components. Such books and records shall be kept at the principal place of business of Ciba, Chiron or Focal or the Affiliate of Ciba, Chiron, or Focal as the case may be, for at least three (3) years following the end accuracy of the calendar quarter to which they pertaininformation presented in each Payment Report and all payments due hereunder. Such records will be open for inspectionThe Buyer shall permit an independent, during such three (3) year period by an independent certified public accountant selected appointed by Focal for inspections conducted by Focal, or a representative selected by Ciba or Chiron with respect to inspections conducted by Ciba or Chiron, Corixa and reasonably acceptable to the audited party, such acceptance Buyer (the "Auditor") to audit and/or inspect those records of the Buyer (including but not be unreasonably withheld limited to financial records) that relate to Net Sales for the sole purpose of verifying the amounts payable by Ciba/Chiron pursuant to Articles 8, 9 completeness and 1 0, accuracy of the amounts of reimbursement payable under this Agreement with respect to Research Costs, under Article 8 or the amounts of Production Costs, or other matters reasonably necessary in connection with Research, process development or manufacturing records maintained by Focal, as applicablePayment Reports hereunder. Such inspections inspection may only be made conducted during the Buyer's normal business hours, no more than once each in any calendar year and upon at least thirty (30) days prior written notice by the Seller to the Buyer. The Auditor shall execute a reasonable and customary written confidentiality agreement with the Buyer and will disclose to the Sellers only the amount and accuracy of payments reported and actually paid or otherwise payable under this Agreement, and the basis for any discrepancy thereof. The Auditor will send a copy of the report to the Buyer at the same time it is sent to Sellers. If the Auditor concludes that such payments were underpaid for the preceding year, during normal business hoursthe Buyer shall pay Seller the amount of any such underpayments for the preceding year, plus interest as mutually agreed by Focal and Ciba or Chironset forth in Section 2.12, within thirty (30) days of the date the Auditor delivers its report to the parties so concluding that such payments were underpaid for the preceding year. If the Auditor concludes that such payments were overpaid for the preceding year, the Sellers shall provide the Buyer with a credit in the amount of any such overpayments for the preceding year, within thirty (30) days of the date the Auditor delivers its report to the parties so concluding that such payments were overpaid for the preceding year. The inspecting accountant will be under confidentiality obligations to Sellers shall -24- *CONFIDENTIAL TREATMENT REQUESTED. bear the audited party to report to Focal only the amounts payable to Focal hereunder with respect to Net Sales during the period in question, in the case full cost of an such audit by Focal, and unless such matters as are the subject of the audit, including, but not limited to, FTE calculation Research Costs and Production Costs in the case of an audit by Ciba or Chiron. Inspections conducted under this Section 10.5 shall be at the expense of the auditing party, unless a variation or error producing discloses an underpayment in amounts payable exceeding five by more than [*] percent (5[*]%) of the amount paid due for any period covered by the inspection is established in preceding year. In such case, the course Buyer shall bear the full cost of any such inspection, whereupon all costs relating to the inspection for such period and any unpaid amounts that are discovered will be paid by the audited party, together with interest on such unpaid amounts at the rate specified in Section 10.2 aboveaudit.