Common use of Records and Right to Audit Clause in Contracts

Records and Right to Audit. (a) Licensee shall, keep, maintain and preserve in its principal place of business during the Term, any renewal periods and at least three (3) years following termination or expiration, complete and accurate books, accounts, records and other materials covering all transactions related to this Agreement in a manner such that the information contained in the statements referred to in Paragraph 7 can be readily determined including, without limitation, customer records, invoices, correspondence and banking, financial and other records in Licensee's possession or under its control. PGA TOUR Licensing and/or its duly authorized representatives shall have the right to inspect and audit all materials related to this Agreement, which right to inspect and audit shall include the conduct of normal audit tests of additional Licensee records including those covering "non-licensed" sales to verify that they are not sales covered by this Agreement. In addition to the materials required by normal accounting practices, Licensee must retain detail of PGA TOUR licensed sales to the invoice number level for audit purposes, and invoices must indicate the PGA TOUR name beside each Licensed Article. (b) Such materials shall be available for inspection and audit (including photocopying) at any time during the Term, any renewal periods and at least three (3) years following termination or expiration during reasonable business hours and upon at least five (5) days notice by PGA TOUR Licensing and/or its representatives. Licensee will cooperate and will not cause or permit any interference with PGA TOUR Licensing and/or its representatives in the performance of their duties of inspection and audit. PGA TOUR Licensing and/or its representatives shall have free and full access to said materials for inspection and audit purposes. (c) Following the conduct of the audit, Licensee shall take immediate steps to timely resolve all issues raised therein, including payment of any monies owing and due. Should an audit indicate an underpayment of 10% or more or an underpayment of $20,000 or more of the royalties due PGA TOUR Licensing, the cost of the audit shall be paid by Licensee. Payment of the audit cost is in addition to the full amount of any underpayment including interest as provided in Paragraph 7(b), to be paid by Licensee. Licensee must cure any contract breaches discovered during the audit, provide amended reports if required, and submit the amount of any underpayment including interest and, if applicable, the cost of the audit within thirty (30) days from the date of the conduct of the audit.