Royalties and Reporting. 4.1 For the rights, privileges and license granted hereunder, BENTHOS shall pay royalties to PSRF in the manner hereinafter provided to the end of the term of the Proprietary Rights, which shall be until the last patent to expire of all patents included within PROPRIETARY RIGHTS, or until this Agreement shall be terminated as hereinafter provided: (A) License Issue fee in the amount of Fifteen Thousand Dollars ($15,000.00); (B) Running Royalties in the amount of five percent (5%) of the total of Net Selling Price for each Commercial Sale of LICENSED PRODUCTS or LICENSED PROCESSES by BENTHOS or its sublicensees, said royalty payable upon delivery of the report due pursuant to Paragraph 4.5 hereof. In the event a Commercial Sale of Licensed Products occurs together with the sale of a system or other product, (a) such royalty shall be calculated solely on the LICENSED PRODUCT, as no royalty shall be payable with respect to any other portion of such system or product; and (b) in the event the Net Selling Price of the LICENSED PRODUCT is not separately stated, the royalty shall be calculated based upon the Net Selling Price from the most recent prior Commercial Sale of a separate LICENSED PRODUCT. 4.2 No multiple royalties shall be payable because any LICENSED PRODUCT, its manufacture, use, lease or sale are or shall be covered by more than one patent application, patent or certificate of registration licensed under this Agreement. 4.3 Royalty payments shall be paid in United States dollars in State College, Pennsylvania, or at such other place as PSRF may reasonably designate. 4.4 BENTHOS shall keep full, true and accurate books of account and records containing all particulars that may be necessary for the purposes of showing the amounts payable to PSRF hereunder. Said books of account shall be kept at BENTHOS's principal place of business or the principal place of business of the appropriate division of BENTHOS to which this Agreement relates. Said books and the supporting data shall be open at all reasonable times for three (3) years following the end of the calendar year to which they pertain, to the inspection of independent CPAs approved by BENTHOS, said approval not to be unreasonably withheld for the purpose of verifying BENTHOS's royalty statement or compliance in other respects with this Agreement, such inspection to occur no more than once each calendar year upon reasonable prior notice to BENTHOS. 4.5 BENTHOS shall on February 1, and August 1, of each year, deliver to PSRF true and accurate reports, giving such particulars of the business conducted by BENTHOS during the six-month period under this Agreement ending thirty (30) days prior to such date as shall be pertinent to an accounting hereunder. 4.6 The royalty payments set forth in this Agreement shall, if overdue, bear interest until payment at a per annum rate equal to the prime rate in effect at the Chase Manhattan Bank on the due date. The payment of such interest shall not foreclose PSRF from exercising any other rights it may have as a consequence of the lateness of any payment.
Appears in 1 contract
Sources: License Agreement (Benthos Inc)
Royalties and Reporting. 4.1 For the rights, privileges and license granted hereunder, BENTHOS shall pay royalties to PSRF in the manner hereinafter provided to the end of the term of the Proprietary Rights, which shall be until the last patent to expire of 6.01 On all patents included within PROPRIETARY RIGHTS, or until this Agreement shall be terminated as hereinafter provided:
(A) License Issue fee in the amount of Fifteen Thousand Dollars ($15,000.00);
(B) Running Royalties in the amount of five percent (5%) of the total of Net Selling Price for each Commercial Sale sales of LICENSED PRODUCTS anywhere in the world by LICENSEE, its AFFILIATES or LICENSED PROCESSES by BENTHOS or its sublicenseesSUBLICENSEES, said royalty payable upon delivery LICENSEE shall pay CHOP royalties in accordance with the schedule as set forth in APPENDIX C and milestones in accordance with the schedule as set forth in APPENDIX E, such undertaking and schedule having been agreed to for the purpose of reflecting and advancing the mutual convenience of the report due pursuant to Paragraph 4.5 hereof. In the event a Commercial Sale of Licensed Products occurs together with the sale parties.
6.02 A claim of a system patent or other product, (patent application licensed under this AGREEMENT shall cease to fall within the LICENSED PATENT RIGHTS for the purpose of computing the earned royalty payments in any given country on the earliest of the dates that a) such royalty shall be calculated solely on the LICENSED PRODUCTclaim has been abandoned but not continued, as no royalty shall be payable with respect to any other portion of such system or product; and (b) in the event patent expires or irrevocably lapses, or c) the Net Selling Price of the LICENSED PRODUCT is not separately stated, the royalty shall claim has been held to be calculated based upon the Net Selling Price from the most recent prior Commercial Sale invalid or unenforceable by an unappealed or unappealable decision of a separate LICENSED PRODUCTcourt of competent jurisdiction or administrative agency. [*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
4.2 6.03 No multiple royalties shall be payable because any LICENSED PRODUCT, its manufacture, use, lease or sale PRODUCTS are or shall be covered by more than one patent applicationof the LICENSED PATENT RIGHTS.
6.04 On sales of LICENSED PRODUCTS by LICENSEE to SUBLICENSEE(S) or AFFILIATE(S) (OTHER THAN AS SET FORTH IN SECTION 2.17 (b)) or on sales made in other than an arm's-length transaction, patent or certificate the value of registration licensed the NET SALES attributed under this AgreementArticle 6 to such a transaction shall be based on the FAIR MARKET VALUE of LICENSED PRODUCTS.
4.3 Royalty payments shall be paid in United States dollars in State College6.05 With regard to expenses associated with the preparation, Pennsylvaniafiling, or at such other place as PSRF may reasonably designate.
4.4 BENTHOS shall keep fullprosecution, true and accurate books maintenance of account all patent applications and records containing all particulars that may be necessary for patents included within the purposes of showing the amounts payable to PSRF hereunder. Said books of account shall be kept at BENTHOS's principal place of business or the principal place of business of the appropriate division of BENTHOS to which this Agreement relates. Said books and the supporting data shall be open at all reasonable times for three (3) years following the end of the calendar year to which they pertain, LICENSED PATENT RIGHTS incurred by CHOP prior to the inspection EFFECTIVE DATE of independent CPAs approved by BENTHOSthis AGREEMENT, said approval not to be unreasonably withheld for the purpose of verifying BENTHOS's royalty statement or compliance in other respects with this Agreement, such inspection to occur no more than once each calendar year upon reasonable prior notice to BENTHOS.
4.5 BENTHOS LICENSEE shall on February 1, and August 1, of each year, deliver to PSRF true and accurate reports, giving such particulars of the business conducted by BENTHOS during the six-month period under this Agreement ending reimburse CHOP within thirty (30) days prior of CHOP'S submission of a statement and request for payment to LICENSEE, an amount equivalent to [*]
6.06 With regard to expenses associated with the preparation, filing, prosecution, and maintenance of all patent applications and patents included within the LICENSED PATENT RIGHTS incurred by CHOP on or after the EFFECTIVE DATE of the AGREEMENT, CHOP, at its sole option, may require LICENSEE either:
(a) to pay CHOP on an annual basis, within sixty (60) days of CHOP'S submission of a statement and request for payment, an amount equivalent to [*]; or
(b) to pay [*] directly to the law firm employed by CHOP to handle such date as functions. In such event, however, CHOP and not LICENSEE shall be pertinent to an accounting hereunderthe client of such law firm.
4.6 6.07 LICENSEE may elect to surrender its rights in any country of the LICENSED TERRITORY under any LICENSED PATENT RIGHTS upon sixty (60) days written notice to CHOP and owe no payment obligation under Paragraph 6.06 for patent-related expenses incurred in that country after the effective date of such written notice.
6.08 In the event that the royalty paid to CHOP is such a significant factor in the return realized by LICENSEE as to diminish LICENSEE'S capability to respond to competitive market pressures, CHOP agrees to consider in good faith a reasonable reduction in the royalty paid to CHOP as to each such LICENSED PRODUCT for the period during which such market condition exists. Factors determining the size of the reduction will include profit margin on LICENSED PRODUCT and on analogous products, prices of competitive products, total prior sales by LICENSEE, and LICENSEE'S expenditures in LICENSED PRODUCT development. CHOP shall have sole discretion whether to grant a request for royalty reduction by LICENSEE.
6.09 With each semiannual payment, LICENSEE shall deliver to CHOP a full and accurate accounting to include at least the following information:
(a) Quantity of each LICENSED PRODUCT sold or leased (by country) by LICENSEE, and its AFFILIATES or SUBLICENSEES; [*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
(b) Total receipts for each LICENSED PRODUCT (by country);
(c) Quantities of each LICENSED PRODUCT
(i) used by LICENSEE and its AFFILIATES or SUBLICENSEES unless such LICENSED PRODUCT is used for the purposes excluded by Paragraph 2.17(c); or
(ii) sold to the United States Government for which the government requires a reduction in the NET SALES PRICE as a result of its license under 35 USC Sec. 204;
(d) Reductions from gross sales as permitted in Paragraph 2.17(a).
6.10 In each year the amount of royalty and other payments due shall be calculated semiannually as of June 30 and December 31 ("ACCOUNTING PERIOD") and shall be paid semiannually within the sixty (60) days next following such date. Every such payment shall be supported by the accounting prescribed in Paragraph 6.09 and shall be made in United States currency by check to the "Jose▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇▇earch Institute of The Children's Hospital of Philadelphia" and sent to Director, Technology Transfer, The Children's Hospital of Philadelphia, 34th & ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇-▇▇▇▇. ▇▇enever for the purpose of calculating royalties conversion from any foreign currency shall be required, such conversion shall be at the rate of exchange thereafter published in the Wall Street Journal for the first business day closest to the applicable June 30 or December 31, as the case may be.
6.11 If the transfer of or the conversion into United States dollars of any such remittance in any such instance is not lawful or possible, the payment of such part of the royalties as is necessary shall be made by the deposit thereof, in the currency of the country where the sale was made on which the royalty was based, to the credit and account of CHOP or its nominee in any commercial bank or trust company located in that country, prompt notice of which shall be given to CHOP.
6.12 Any tax required to be withheld by LICENSEE under the laws of any foreign country for the account of CHOP, shall be promptly paid by LICENSEE for and on behalf of CHOP to the appropriate governmental authority, and LICENSEE shall use its best efforts to furnish CHOP with proof of payment of such tax. Any such tax actually paid on CHOP'S behalf shall be deducted from royalty payments due CHOP.
6.13 The royalty payments set forth in this Agreement due under the AGREEMENT shall, if overdue, bear interest until payment at a per annum rate equal to one percent (1%) above the prime rate in effect at the Chase Manhattan Bank of New York on the due date, not to exceed the maximum rate permitted by law. The payment payments of such interest shall not foreclose PSRF preclude CHOP from exercising any other rights it may have as a consequence of the lateness of any royalty payment.
Appears in 1 contract
Sources: Factor Ix Patent and Know How Exclusive License Agreement (Avigen Inc \De)