ROYALTIES AND OTHER CONSIDERATION. (a) As additional consideration of the license granted to LICENSEE from ACT in Article 2 of this Agreement, LICENSEE shall pay to ACT a royalty equal to 8% of (i) the Net Sales received by LICENSEE and its AFFILIATES for all LICENSED PRODUCTS, LICENSED PROCESS or LICENSED SERVICE sold, performed, or leased by LICENSEE or any AFFILIATE, and (ii) all Sublicense Revenue received by LICENSEE and its AFFILIATES. The obligation of LICENSEE to pay royalties shall terminate (a) with respect to NET SALES and Sublicense Revenue arising in any country concurrently with the expiration or termination of the last applicable VALID CLAIM within the PATENT RIGHTS in such country in which the LICENSED PRODUCT, LICENSED PROCESS or LICENSED SERVICE is, (as applicable), performed, sold, leased, or manufactured, or in which the PATENT RIGHTS are licensed, and (b) in any and all cases when royalty payments to ACT by LICENSEE total One Million Dollars (U.S.) ($1,000,000.00); provided, however, that such $1,000,000 of royalties shall be reduced to $500,000 if LICENSEE, at LICENSEE’S option, pays ACT $250,000 in cash within thirty (30) days after the execution of this Agreement in addition to the License fee payable under Section 5.1 (such that the License Fee, additional $250,000 payment, and potential future royalties will total $1,000,000). (b) No multiple royalties shall be payable on the basis that any LICENSED PRODUCT, LICENSED PROCESS or LICENSED SERVICE, its manufacture, use, lease, sale or performance are or shall be covered by (a) more than one patent or patent application within the PATENT RIGHTS, or (b) any other patent or know how under a license or sublicense from ACT. In the case of the use of patents or know how licensed or sublicensed by ACT under other agreements, LICENSEE and ACT’s other licensees or sublicensees shall have the right to credit against the royalties owing to ACT, under this Agreement and under such other license or sublicense agreements, any royalty payments received by ACT with respect to the sale or lease of any product or performance of any service (regardless of whether LICENSEE or another licensee or sublicensee of ACT patents or know how pays the royalty), such that in no event shall the total of royalty payments that are due to ACT in any royalty period under this Agreement and under such other license or sublicense agreements exceed the highest applicable royalty rate among this Agreement and such other license or sublicense agreements. By way of example only, if a product is produced by LICENSEE or LifeLine Cell Technology, LLC (“LifeLine”) under that certain License, Product Production and Distribution Agreement among BioTime, Inc. (“BT”), LICENSEE, and LifeLine (the “LifeLine Agreement”), and that product uses PATENT RIGHTS under this Agreement and patents licensed under a license or sublicense agreement between ACT and LifeLine, (i) only one royalty would be paid to ACT on sales of the product, (ii) the royalty rate would be the higher of the royalty rate applicable under this Agreement or under ACT’s license or sublicense agreement with LifeLine, and (iii) the royalty payment (whether paid by LICENSEE or by LifeLine) will be credited toward royalties payable under this Agreement and under the ACT license or sublicense agreement with LifeLine for the sale of the product.
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ROYALTIES AND OTHER CONSIDERATION. (a) As additional consideration of the license granted to LICENSEE from ACT in Article 2 of this Agreement, LICENSEE shall pay to ACT a royalty equal to 8% of (i) 5% of the Net Sales received by LICENSEE and its AFFILIATES for all LICENSED PRODUCTS, LICENSED PROCESS or LICENSED SERVICE sold, performed, or leased by LICENSEE or any AFFILIATE, and (ii) 20% of all Sublicense Revenue SUBLICENSE REVENUE received by LICENSEE and its AFFILIATES. The obligation of LICENSEE to pay royalties shall terminate (a) with respect to NET SALES and Sublicense Revenue SUBLICENSE REVENUE arising in any country concurrently with the expiration or termination of the last applicable VALID CLAIM within the PATENT RIGHTS in such country in which the LICENSED PRODUCT, LICENSED PROCESS or LICENSED SERVICE is, (as applicable), performed, sold, leased, or manufactured, or in which the PATENT RIGHTS are licensed, and (b) in any and all cases when royalty payments to ACT by LICENSEE total One Million Six Hundred Thousand Dollars (U.S.) ($1,000,000.00600,000.00); provided, however, that such $1,000,000 600,000 of royalties shall be reduced to $500,000 200,000 if LICENSEE, at LICENSEE’S option, pays ACT $250,000 200,000 in cash within thirty (30) days after the execution of this Agreement in addition to the License fee payable under Section 5.1 (such that the License Fee, additional $250,000 200,000 payment, and potential future royalties will total $1,000,000600,000).
(b) No multiple royalties shall be payable on the basis that any LICENSED PRODUCT, LICENSED PROCESS or LICENSED SERVICE, its manufacture, use, lease, sale or performance are or shall be covered by (a) more than one patent or patent application within the PATENT RIGHTS, or (b) any other patent or know how under a license or sublicense from ACT. In the case of the use of patents or know how licensed or sublicensed by ACT under other agreements, LICENSEE and ACT’s other licensees or sublicensees shall have the right to credit against the royalties owing to ACT, under this Agreement and under such other license or sublicense agreements, any royalty payments received by ACT with respect to the sale or lease of any product or performance of any service (regardless of whether LICENSEE or another licensee or sublicensee of ACT patents or know how pays the royalty), such that in no event shall the total of royalty payments that are due to ACT in any royalty period under this Agreement and under such other license or sublicense agreements exceed the highest applicable royalty rate among this Agreement and such other license or sublicense agreements. By way of example only, if a product is produced by LICENSEE (alone or LifeLine Cell Technology, LLC (“LifeLine”with a third party) under that certain License, Product Production and Distribution Agreement among BioTime, Inc. (“BT”), LICENSEE, and LifeLine (the “LifeLine Agreement”), and that product uses PATENT RIGHTS under this Agreement and patents licensed under a license or sublicense agreement between ACT and LifeLineLICENSEE (or between ACT and the third party with whom LICENSEE is producing the product), (i) only one royalty would be paid to ACT on sales of the product, (ii) the royalty rate would be the higher of the royalty rate applicable under this Agreement or under ACT’s other license or sublicense agreement with LifeLineLICENSEE or the third party, and (iii) the royalty payment (whether paid by LICENSEE or by LifeLinethe third party) will be credited toward royalties payable under this Agreement and under the other ACT license or sublicense agreement with LifeLine LICENSEE or the third party for the sale of the product.
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ROYALTIES AND OTHER CONSIDERATION. (a) As additional consideration of the license granted to LICENSEE ES from ACT in Article 2 of this Agreement, LICENSEE ES shall pay to ACT a royalty equal to 8% of (i) 3.5% of the Net Sales received by LICENSEE ES and its AFFILIATES for all ROYALTY-BEARING LICENSED PRODUCTS, LICENSED PROCESS PRODUCTS or ROYALTY-BEARING LICENSED SERVICE sold, performed, or leased by LICENSEE ES or any AFFILIATE, and (ii) 20% of all Sublicense Revenue (as defined in the Kirin License Agreement) received by LICENSEE ES and its AFFILIATES, provided that in o even shall ACT receive, on a country-by-country basis, less than 3.5% of the aggregate Net Sales of the Licensed Product or Licensed Service in a particular country where ES has sublicensed to a third party rights with respect to the Licensed Product or Licensed Service. The obligation of LICENSEE ES to pay royalties shall terminate (a) with respect to NET SALES and Sublicense Revenue arising in any country concurrently with the expiration or termination of the last applicable VALID CLAIM within the PATENT RIGHTS in such country in which the ROYALTY-BEARING LICENSED PRODUCT, LICENSED PROCESS PRODUCT or ROYALTY-BEARING LICENSED SERVICE is, (as applicable), performed, is sold, leasedor May 9, or manufactured2016 if no such patents have issued by such date, or in which the PATENT RIGHTS are licensed, and (b) in any and all cases when royalty payments to ACT by LICENSEE total One Million Dollars (U.S.) ($1,000,000.00); provided, however, that such $1,000,000 of royalties shall be reduced to $500,000 if LICENSEE, at LICENSEE’S option, pays ACT $250,000 in cash within thirty (30) days after the execution of this Agreement in addition to the License fee payable under Section 5.1 (such that the License Fee, additional $250,000 payment, and potential future royalties will total $1,000,000)whichever is longer.
(b) ES shall receive a credit toward the payment of royalties due under this Section 4.3 in an amount equal to the payments, if any, made by ES under Section 4.2. Such credit shall be cumulative and shall carry over to each subsequent year if the amount of royalties payable to ACT under this Section 4.2 is less than the amount paid by ES under Section 4.2.
(c) In the event that Licensee or any of its AFFILIATES or SUBLICENSEES is required to make, and actually does make, royalty payments to one or more third parties for a license to an issued patent or patents,(“Third Party Payments”) in order to make, have made, use, import, sell or offer for sale ROYALTY-BEARING LICENSED PRODUCTS or to perform ROYALTY-BEARING LICENSED SERVICES, in the absence of which such ROYALTY-BEARING LICENSED PRODUCT or ROYALTY-BEARING LICENSED SERVICE could not legally be used or sold or performed in such country, and the resulting aggregate royalty owed by ES or any of its AFFILIATES or SUBLICENSEES is 15% or greater, then, ES may reduce the royalties due ACT pursuant to Section 4.2(a) above for such ROYALTY-BEARING LICENSED PRODUCT or ROYALTY-BEARING LICENSED SERVICE on the same proportionate basis as all other third party royalties are reduced in the same royalty period. However, the royalty payments due ACT under Section 4.2(a) may never be reduced by more than fifty percent (50%) in any royalty period.
(d) No multiple royalties shall be payable on the basis that any LICENSED PRODUCT, LICENSED PROCESS or LICENSED SERVICE, its manufacture, use, lease, sale or performance are or shall be covered by (ai) more than one patent or patent application within the PATENT RIGHTS, or (bii) any other patent or know how under a license or sublicense from ACT. In the case of the use of patents or know how licensed or sublicensed by ACT under other agreements, LICENSEE ES and ACT’s other licensees or sublicensees shall have the right to credit against the royalties owing to ACT, under this Agreement and under such other license or sublicense agreements, any royalty payments received by ACT with respect to the sale or lease of any product or performance of any service (regardless of whether LICENSEE ES or another licensee or sublicensee of ACT patents or know how pays the royalty), such that in no event shall the total of royalty payments that are due to ACT in any royalty period under this Agreement and under such other license or sublicense agreements exceed the highest applicable royalty rate among this Agreement and such other license or sublicense agreements. By way of example only, if a product is produced by LICENSEE ES (alone or LifeLine Cell Technology, LLC (“LifeLine”with a third party) under that certain License, Product Production and Distribution Agreement among BioTime, Inc. (“BT”), LICENSEE, and LifeLine (the “LifeLine Agreement”), and that product uses PATENT RIGHTS under this Agreement and patents licensed under a license or sublicense agreement between ACT and LifeLineES (or between ACT and the third party with whom ES is producing the product), (i) only one royalty would be paid to ACT on sales of the product, (ii) the royalty rate would be the higher of the royalty rate applicable under this Agreement or under ACT’s other license or sublicense agreement with LifeLineES or the third party, and (iii) the royalty payment (whether paid by LICENSEE ES or by LifeLinethe third party) will be credited toward royalties payable under this Agreement and under the other ACT license or sublicense agreement with LifeLine ES or the third party for the sale of the product.
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