Common use of Full and Accurate Records Clause in Contracts

Full and Accurate Records. Company, Sublicensees and Affiliates shall keep good and accurate books of account sufficient to permit determination of the royalties due hereunder and shall make such books of account available for inspection by an independent accountant designated by Chicago and reasonably acceptable to Company. Such books and records will be maintained for at least five (5) years after the Royalty reporting period(s) to which they relate. Books and records will include but not be limited to: accounting general ledgers; invoice/sales registers; original invoice and shipping documents; federal and state business tax returns; company financial statements; sales analysis reports; inventory and/or manufacturing records; sublicense and distributor agreements; price lists, product catalogs and other marketing materials. The accountants making such inspection shall report to Chicago the amount of royalties due and payable. Such inspections shall be no more frequent than once each calendar year during the term hereof and once within six (6) months after termination of this Agreement. Such inspections will be at Chicago’s expense unless the designated accountant identifies underpayment of royalties due by five percent (5%) or more in which event Company shall pay: (a) for such inspection; (b) the underpayment of royalties due to Chicago; and (c) a penalty of the underpayment equal to interest on the underpayment of royalties, the interest being the prime lending rate published in the Wall Street Journal as of the date of the final inspection report plus three percent (3%). Chicago’s failure to inspect shall not constitute a waiver of Chicago’s right to object to the accuracy of the royalty reports rendered or payments made under this Agreement. Records inspected under this Section 6.2 shall be retained until Chicago and Company have agreed upon the amount of royalties payable thereon, or five (5) years, whichever is shorter.