Common use of Audit of Authorized Recipient Clause in Contracts

Audit of Authorized Recipient. Upon request by Licensing Company and the fulfillment of all the conditions listed below, Licensee shall instruct a registered accountant to conduct an inspection of an Authorized Recipient and disclose all the details of such inspection to Licensing Company: (a) Licensing Company has recently audited a Licensee Party and has articulated to Licensee that it has a suspicion that the Authorized Recipient has underreported a quantity of Licensed Products Sold by the Authorized Recipient; (b) Licensee has an audit right in its written agreement with such Authorized Recipient (and Licensee shall use best efforts to incorporate an audit right for its benefit in all of its newly concluded agreements – after the Effective Date - with Authorized Recipients) (c) Licensing Company has not requested Licensee to conduct similar audit against any Authorized Recipient in the past twelve months; and (d) Authorized Recipient has accumulated certain unit of Licensed Product sales; which Licensing Company reasonably believes to be substantial in the year previous to the year in which the audit is required to take place. Prior to the start of such audit, Licensee may agree with Licensing Company that Licensing Company will bear the expenses of the audit regardless of the outcome of such an audit and if so agreed by Licensing Company, Licensee agrees to forfeit all proceeds that would have normally been the result of the audit for Licensee (including full royalties payable by the Authorized Recipient to Licensee per product for all underreported quantities of products) and these will be owed to Licensing Company. Licensee further agrees to provide full access to all audit reports in connection with the audit. If Licensing Company does not agree to bear the costs of the audit as described in the foregoing paragraph, Licensing Company shall bear the expense incurred by an independent accountant conducting such an inspection in a manner that it shall bear (1) the expenses for the audit, if the accountant determined that the discrepancy or error (if any) of the quantity of Sold Licensed Product reported by the Authorized Recipient to Licensee was less than five percent (5%) or

Audit of Authorized Recipient. Upon request by Licensing Company and the fulfillment of all the conditions listed below, Licensee shall instruct a registered accountant to conduct an inspection of an Authorized Recipient and disclose all the details of such inspection to Licensing Company: (a) Licensing Company has recently audited a Licensee Party and has articulated to Licensee that it has a suspicion that the Authorized Recipient has underreported a quantity of Licensed Products Sold by the Authorized Recipient; (b) Licensee has an audit right in its written agreement with such Authorized Recipient (and Licensee shall use best efforts to incorporate an audit right for its benefit in all of its newly concluded agreements – after the Effective Date - with Authorized Recipients) (c) Licensing Company has not requested Licensee to conduct similar audit against any Authorized Recipient in the past twelve months; and (d) Authorized Recipient has accumulated certain unit of Licensed Product sales; which Licensing Company reasonably believes to be substantial in the year previous to the year in which the audit is required to take place. Prior to the start of such audit, Licensee may agree with Licensing Company that Licensing Company will bear the expenses of the audit regardless of the outcome of such an audit and if so agreed by Licensing Company, Licensee agrees to forfeit all proceeds that would have normally been the result of the audit for Licensee (including full royalties payable by the Authorized Recipient to Licensee per product for all underreported quantities of products) and these will be owed to Licensing Company. Licensee further agrees to provide full access to all audit reports in connection with the audit. Reference Copy If Licensing Company does not agree to bear the costs of the audit as described in the foregoing paragraph, Licensing Company shall bear the expense incurred by an independent accountant conducting such an inspection in a manner that it shall bear (1) the expenses for the audit, if the accountant determined that the discrepancy or error (if any) of the quantity of Sold Licensed Product reported by the Authorized Recipient to Licensee was less than five percent (5%) oror (2) the difference between the audit expenses and the actual monies recovered by Licensee as a result from the audit, if the discrepancy or error was found to be greater than five percent (5%) and the actual monies recovered by Licensee as a result from the audit was less than the expenses of the audit.

Audit of Authorized Recipient. Upon request by Licensing Company and the fulfillment of all the conditions listed below, Licensee shall instruct a registered accountant to conduct an inspection of an Authorized Recipient and disclose all the details of such inspection to Licensing Company: (a) Licensing Company has recently audited a Licensee Party and has articulated to Licensee that it has a suspicion that the Authorized Recipient has underreported a quantity of Licensed Products Sold by the Authorized Recipient; (b) Licensee has an audit right in its written agreement with such Authorized Recipient (and Licensee shall use best efforts to incorporate an audit right for its benefit in all of its newly concluded agreements – after the Effective Date - with Authorized Recipients) (c) Licensing Company has not requested Licensee to conduct similar audit against any Authorized Recipient in the past twelve months; and (d) Authorized Recipient has accumulated certain unit of Licensed Product sales; which Licensing Company reasonably believes to be substantial in the year previous to the year in which the audit is required to take place. Prior to the start of such audit, Licensee may agree with Licensing Company that Licensing Company will bear the expenses of the audit regardless of the outcome of such an audit and if so agreed by Licensing Company, Licensee agrees to forfeit all proceeds that would have normally been the result of the audit for Licensee (including full royalties payable by the Authorized Recipient to Licensee per product for all underreported quantities of products) and these will be owed to Licensing Company. Licensee further agrees to provide full access to all audit reports in connection with the audit. If Licensing Company does not agree to bear the costs of the audit as described in the foregoing paragraph, Licensing Company shall bear the expense incurred by an independent accountant conducting such an inspection in a manner that it shall bear (1) the expenses for the audit, if the accountant determined that the discrepancy or error (if any) of the quantity of Sold Licensed Product reported by the Authorized Recipient to Licensee was less than five percent (5%) oror (2) the difference between the audit expenses and the actual monies recovered by Licensee as a result from the audit, if the discrepancy or error was found to be greater than five percent (5%) and the actual monies recovered by Licensee as a result from the audit was less than the expenses of the audit.