Books of Account and Other Records Audits. Licensees will keep accurate books of account and records in accordance with generally accepted accounting principles covering all transactions relating to the rights and licenses granted under this Agreement including sales of Licensed Products. Licensees will also keep accurate books of account and records of their compliance with any and all shipment tracking, identification, anti-counterfeiting systems and labels that Licensors may establish from time to time. Licensors and their authorized representatives will have the right, at their own expense, at all reasonable hours of the day and upon reasonable prior notice, to examine and audit such books of account, documents and records relating to the exploitation of the Licensed Products described in this Agreement. Licensors will have reasonable access to such records for auditing purposes and for the purpose of making extracts and copies. At either Licensor’s request, Licensees will provide an authorized employee to assist in the examination of Licensees’ records. Should an audit by a Licensor establish a deficiency between the amount found to be due to a Licensor and the amount Licensees actually paid or reported, Licensees will pay: (a) the amount of such deficiency (including past due Royalties); (b) any out of pocket expenses incurred as a result of conducting such audit including the cost of the audit if such deficiency is more than [***] of the total Royalties found due; and (c) interest on the overdue royalty amount at the lower of [***] or the highest amount permitted by law, on the gross sum of the unpaid amount from the date such amount should have been paid until the date of payment. Licensees will pay any such amount due as a result of an audit, [***] after receipt of a demand for payment by a Licensor. All such books of account and records maintained by Licensees or their Affiliates will be kept available for at least four (4) years after the expiration or termination of this Agreement. *** Certain information on this page has been omitted and filed separately with the SEC. Confidential treatment has been requested with respect to the omitted portions.
Books of Account and Other Records Audits. Supplier will keep accurate books of account and records in accordance with generally accepted accounting principles covering all transactions relating to the manufacturing, sourcing, quality control and supplying of the Imported Products, compliance with Specifications, the Prices and Purchasers’ rights under Section 2.10. All such books of account and records maintained by Supplier will be kept available for at least four (4) years after the expiration or termination of this Agreement. Purchasers and their authorized representatives will have the right during the Term, at their own expense, and during business hours and upon reasonable prior notice to Supplier, to examine and audit such books of account, documents and records no more than once every year (i.e. one audit for both Purchasers; not one audit for each Purchaser). Notwithstanding the foregoing, should an audit by Purchasers establish that Purchasers collectively paid more than one-hundred-and-five percent (105%) of what was actually owed under this Agreement or upon Purchasers showing Supplier reasonable cause, Purchasers will have the right to conduct additional audits on an ad-hoc basis. In the event an audit reveals an overpayment by a Purchaser, Supplier will, after receipt of a written payment demand for payment by such Purchaser: (a) issue a credit to such Purchaser in the amount of the overpayment in its next invoice to such Purchaser, and if any portion of such credit remains following the next invoice issued to such Purchaser by Supplier, Supplier will reimburse such Purchaser for the remaining balance; (b) pay the cost of the audit if Purchasers collectively paid more than one-hundred-and-five percent (105%) of what was actually owed to Supplier; and (c) pay (or if applicable, issue a credit for) interest on the overpaid amount at the lower of one and one-half percent (1.5%) per month (eighteen percent (18%) per annum) on the amounts overpaid from the date that is one-hundred and fifty (150) days after the date on which such amounts were paid until the date the invoice was credited or the balance was reimbursed, as applicable. In the event an audit reveals a breach of Supplier’s manufacturing, sourcing, quality control, and supply obligations (including compliance with Specifications) under this Agreement, Supplier will promptly take action to redress any such breach at its own cost.
Books of Account and Other Records Audits
