Common use of Recordkeeping and Audits Clause in Contracts

Recordkeeping and Audits. Licensee shall keep complete and accurate production and accounting records relating to commercialization (including via sublicensing) of Licensed Products. Upon at least [***] ([***]) days’ advance notice, Caltech shall be entitled to audit such records through an internationally recognized independent accounting firm reasonably acceptable to Licensee, during Licensee’s normal business hours, to determine Licensee’s Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission. compliance with the provisions of this Article 5. Licensee shall reimburse Caltech [***] percent ([***]%) of any unpaid royalties resulting from any noncompliance discovered as a result of any such audit. Such audits shall be at Caltech’s expense, and shall occur no more than once annually, except that in the case of any underpayment exceeding [***] ([***]%) of the amount actually paid: (a) Licensee shall reimburse Caltech for the cost of such audit; and (b) Caltech shall be entitled to conduct additional [***] audits on the conditions set forth above, [***] until any such audit demonstrates that Licensee is in compliance with its obligations. Licensee must flow this requirement down to all Sublicensees.

Recordkeeping and Audits. Licensee shall keep complete and accurate production and accounting records relating to commercialization (including via sublicensing) of Licensed Products. Upon at least [***] ([***]) days’ advance notice, Caltech shall be entitled to have an independent nationally recognized registered public accounting firm audit such records through an internationally recognized independent accounting firm reasonably acceptable to Licenseerecords, during Licensee’s normal business hours, to determine Licensee’s Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission. compliance with the provisions of this Article 5. Audits shall be conducted upon not less than *** prior written notice, shall be maintained as confidential information of Licensee and shall occur not more frequently than *** for a period not to exceed ***. Licensee shall reimburse Caltech [*** percent (***] percent ([***]%) of any unpaid royalties resulting from any noncompliance underpayments discovered as a result of any such audit; if such underpayment is *** percent (***%) or less, Licensee shall pay Caltech an amount equal to *** percent (***%) of the amount of any underpayment exceeding *** percent (***%) of the amount that should otherwise have been paid by Licensee, its Affiliates and sublicensees. Such audits shall be at Caltech’s expense, and shall occur no more than once annually***, except that in the case of any underpayment exceeding [*** percent (***] ([***]%) of the amount actually paid: (a) Licensee shall reimburse Caltech for the cost of such audit; and (b) Caltech shall thereafter be entitled to conduct additional [*** audits until ***] audits on the conditions set forth above, [***] until any such audit demonstrates that Licensee is in compliance with its obligations. Licensee must flow this requirement down to all Sublicensees.