Common use of Audit Rights and Record Keeping Clause in Contracts

Audit Rights and Record Keeping. E-world agrees that it shall maintain complete, clear and accurate records sufficient to establish the Royalties payable pursuant to this Section 4.2. E-world will maintain such books and records for a two-year period following the expiration or termination of this Agreement. E-world shall have no obligation to translate any records being audited or reviewed to English or any other language. On2 shall have the right, on three (3) days prior notice, itself or through its professional advisors to conduct an audit of E-world's records to verify compliance with the terms of this Agreement. If an underpayment or underreporting of fees is discovered, E-world shall pay the amount of the underpayment or correct and pay the underreported fees; provided, however, that if any discovered discrepancy is equal to or greater than five (5%) of the total amount due On2, E-world shall pay such amount, plus ten percent (10%) interest thereon and the cost of the audit. At On2's request, E-World shall undertake an audit, or shall assist On2 to audit, the books and records of the OEMs to verify accuracy of the royalty and sale information provided by the OEMs. If an underpayment or underreporting of fees is discovered, E-world shall ensure that the OEM pay the amount of the underpayment or correct and pay the underreported fees (the costs of such audit shall be borne by On2); provided, however, that if any discovered discrepancy is equal to or greater than five (5%) of the total amount due On2 or E-world, E-world shall ensure that the OEM shall pay such amount, plus ten percent (10%) interest thereon and the cost of the audit.