Common use of Licensor’s Right to Audit Clause in Contracts

Licensor’s Right to Audit. Commencing on the eighth anniversary of this Agreement, Licensor shall have the right, upon prior written notice, to audit or cause to be audited the * Reports. Licensee shall fully cooperate with representatives of Licensor and independent accountants hired by Licensor conducting any such audit including without limitation providing all back up records, information and financial statements related to the calculation of net revenues. In the event any such audit, taking into account local variations in generally accepted accounting principles, shall disclose an understatement of the net revenues of the Licensee Tully’s Stores for any period or periods, Licensee shall pay to Licensor, within fifteen (15) calendar days after receipt of the audit report, the royalty and service fee due on the amount of such understatement. Further, in the event such audit is made necessary by the failure of Licensee to furnish *as herein required, or if an understatement of net revenues for any period is determined by any such audit to be greater than five percent (5%), Licensee shall reimburse Licensor for the reasonable cost of such audit, including, without limitation, the charges of any independent accountant and the travel and lodging expenses. * Confidential material has been intentionally omitted at this point pursuant to a request for confidential treatment, and such material has been filed separately with the Securities and Exchange Commission.

Licensor’s Right to Audit. Commencing on the eighth anniversary of this Agreement, Licensor shall have the right, upon prior written notice, to audit or cause to be audited the * Reports. Licensee shall fully cooperate with representatives of Licensor and independent accountants hired by Licensor conducting any such audit including without limitation providing all back up records, information and financial statements related to the calculation of net revenues. In the event any such audit, taking into account local variations in generally accepted accounting principles, shall disclose an understatement of the net revenues of the the Licensee Tully’s 's Stores for any period or periods, Licensee shall pay to Licensor, within fifteen (15) calendar days after receipt of the audit report, the royalty and service fee due on the amount of such understatement. Further, in the event such audit is made necessary by the failure of Licensee to furnish *as herein required, or if an understatement of net revenues for any period is determined by any such audit to be greater than five percent (5%), Licensee shall reimburse Licensor for the reasonable cost of such audit, including, without limitation, the charges of any independent accountant and the travel and lodging expenses. * Confidential material has been intentionally omitted at this point pursuant to a request for confidential treatment, and such material has been filed separately with the Securities and Exchange Commission.