Common use of Recordkeeping; Audit Clause in Contracts

Recordkeeping; Audit. (a) Each party will keep accurate accounts and records in sufficient detail to properly determine the royalties payable to the other under this Agreement for at least 3 years following the end of the calendar quarter to which they pertain. (b) Each party will make available such accounts and records for inspection during such 3 year period by a certified public accountant retained by the other for such purpose, solely for the purpose of verifying the royalty payments hereunder. Such inspections may be made no more than once in each calendar year, at reasonable times mutually agreed upon by the parties after at least 15 days written notice to the other. (c) If an audit concludes that additional royalties were owed during the period audited, the party in default will pay the additional royalties within 45 days of the date the other party delivers to it the accounting firm's written report. The fees charged by such accounting firm will be paid by the party initiating the inspection unless the additional royalties owed by the party in default exceed 5% of the royalties paid for the period subject to the audit, in which case that party will pay the fees of the accounting firm. (d) Each party will include in each sublicense granted by it pursuant to this Agreement a provision requiring the Sublicensee to make reports to the other party, to keep and maintain records of sales made pursuant to such sublicense and to grant access to such records by the other's independent accountant to the same extent required of the Licensor under this agreement.