Common use of Compensation and Royalties Clause in Contracts

Compensation and Royalties. (a) Upon execution of this Agreement but not before $500,000 or more are raised for Licensee capitalization, Licensee shall pay to Licensor the sum of Fifty Thousand United States Dollars (US$50,000). (b) In addition to the aforesaid payment, Licensee shall pay to Licensor royalties in such amounts as, after deduction of all taxes, shall be equal to up to six percent (6%) of the net sales prices of such Products, as follows: (i) 1.5% of the sales if the Licensee’s end product uses only one Licensor’s patent; (ii) 3% of the sales if the Licensee’s end product uses two Licensor’s patents; (iii) 4.5% of the sales if the Licensee’s end product uses three Licensor’s patents; and (iv) 6% of the sales if the Licensee’s end product uses four or more Licensor’s patents. (c) In determining the quantities of the Products made, used or sold by Licensee and its affiliated companies for purposes of computing the royalties payable to Licensor in accordance with Paragraph (b) of this Article, no account shall be taken of any Products manufactured and sold by Licensor (or by any licensee of Licensor other than Licensee) to Licensee or its affiliated companies, and no royalty shall be payable with respect thereto. (d) As used above and throughout this Agreement, the term “net sales price” shall mean the amount invoiced by Licensee or its affiliated companies to unrelated third parties for the total number of the Products sold to such unrelated third parties. Such amount shall not include any allowances to such unrelated third parties, sales taxes or cost of packaging and packing. In the event that Licensee or its affiliated companies shall sell or ship the Products to related parties, it shall be deemed to have been sold at the net sales price which would be charged if the said Products had been sold or offered for sale to unrelated third parties in the same area. (e) If Licensee shall at any time grant any right by sublicense to any affiliated company in any area in the Licensed Territory to manufacture the Products in such area, Licensee shall require the affiliated company to pay royalties to Licensor on the same basis as set forth in Paragraph (b) of this Article. The quantity of the Products made, used or sold by such manufacturing affiliated company shall be calculated separately for the purpose of computing the amount of royalties payable by such affiliated company to Licensor on the basis as set forth in Paragraph (b) of this Article, and such quantity shall not be taken into account in calculating the annual quantity of the Products used or sold by Licensee or its other affiliated companies for purposes of computing the amount of royalties payable by Licensee in accordance with Paragraph (b) of this Article. (f) Licensee hereby agrees that payment of royalties shall be made with respect to each calendar quarter and shall be made within thirty (30) days of the last working day of March, June, September and December of each year with respect to all Products used or sold by Licensee and its affiliated companies in the calendar quarter ending on the said working day. All payments shall be in U.S. dollars converted from any other currency at the official rate of exchange prevailing at the close of the Exchange Market in New York City, New York, U.S.A., on the last working day of the calendar quarter for which the said payment is being made. Such payments shall be made to Licensor or to such bank as Licensor shall designate from time to time, and shall be accompanied by a written report showing the amount and details of the Products made, used and sold by Licensee and its affiliated companies in the said calendar quarter. (i) Licensee agrees that it will at all times keep complete, separate and accurate books of account containing a current record of all Products made, used and sold by Licensee and its affiliated companies, and such books will be maintained in sufficient detail to enable Licensor to ascertain the royalties accruing and payable hereunder. (ii) Licensee further agrees to permit Licensor or its authorized accredited accounting agent to have access to said books of account at reasonable intervals during business hours. (iii) In the event that Licensee shall grant any rights hereunder to any affiliated company by sublicense, it shall impose the same obligation on the affiliated company with respect to maintaining books of account, and shall require the said affiliated company to permit Licensor or its authorized agent to have access to the said books of account at reasonable intervals during business hours.

Compensation and Royalties. (a) Upon execution of this Agreement but not before $500,000 or more are raised for Licensee forLicensee capitalization, Licensee shall pay to Licensor the sum of Fifty Thousand United States Dollars (US$50,000). (b) In addition to the aforesaid payment, Licensee shall pay to Licensor royalties in such insuch amounts as, after deduction of all taxes, shall be equal to up to six percent (6%) of the net sales prices of such Products, as follows: (i) 1.5% of the sales if the Licensee’s end product uses only one Licensor’s patentLicensor’spatent; (ii) 3% of the sales if the Licensee’s end product uses two Licensor’s patents; (iii) 4.5% of the sales if the Licensee’s end product uses three Licensor’s patents; and (iv) 6% of the sales if the Licensee’s Licensees’ end product uses four or more Licensor’s patents. (c) In determining the quantities of the Products made, used or sold by Licensee and its affiliated companies for purposes of computing the royalties payable to Licensor in accordance with Paragraph (b) of this Article, no account shall be taken of any Products manufactured and sold by Licensor (or by any licensee of Licensor other than Licensee) to Licensee or its affiliated companies, and no royalty shall be payable with respect thereto. (d) As used above and throughout this Agreement, the term “net sales price” shall mean the amount invoiced by Licensee or its affiliated companies to unrelated third parties for the total number of the Products sold to such unrelated third parties. Such amount shall not include any allowances to such unrelated third parties, sales taxes or cost of packaging and packing. In the event that Licensee or its affiliated companies shall sell or ship the Products to related parties, it shall be deemed to have been sold at the net sales price which would be charged if the said Products had been sold or offered for sale to unrelated third parties in the same area. (e) If Licensee shall at any time grant any right by sublicense to any affiliated company in any area in the Licensed Territory to manufacture the Products in such area, Licensee shall require the affiliated company to pay royalties to Licensor on the same basis as set forth in Paragraph (b) of this Article. The quantity of the Products made, used or sold by such manufacturing affiliated company shall be calculated separately for the purpose of computing the amount of royalties payable by such affiliated company to Licensor on the basis as set forth in Paragraph (b) of this Article, and such quantity shall not be taken into account in calculating the annual quantity of the Products used or sold by Licensee or its other affiliated companies for purposes of computing the amount of royalties payable by Licensee in accordance with Paragraph (b) of this Article. (f) Licensee hereby agrees that payment of royalties shall be made with respect to each calendar quarter and shall be made within thirty (30) days of the last working day of March, June, September and December of each year with respect to all Products used or sold by Licensee and its affiliated companies in the calendar quarter ending on the said working day. All payments shall be in U.S. dollars converted from any other currency at the official rate of exchange prevailing at the close of the Exchange Market in New York City, New York, U.S.A., on the last working day of the calendar quarter for which the said payment is being made. Such payments shall be made to Licensor or to such bank as Licensor shall designate from time to time, and shall be accompanied by a written report showing the amount and details of the Products made, used and sold by Licensee and its affiliated companies in the said calendar quarter. (i) Licensee agrees that it will at all times keep complete, separate and accurate books of account containing a current record of all Products made, used and sold by Licensee and its affiliated companies, and such books will be maintained in sufficient detail to enable Licensor to ascertain the royalties accruing and payable hereunder. (ii) Licensee further agrees to permit Licensor or its authorized accredited accounting agent to have access to said books of account at reasonable intervals during business hours. (iii) In the event that Licensee shall grant any rights hereunder to any affiliated company by sublicense, it shall impose the same obligation on the affiliated company with respect to maintaining books of account, and shall require the said affiliated company to permit Licensor or its authorized agent to have access to the said books of account at reasonable intervals during business hours.

Compensation and Royalties. (a) Upon execution of this Agreement but not before $500,000 or more are raised for Licensee capitalization, Licensee shall pay to Licensor the sum of Fifty Thousand United States Dollars (US$50,000). (b) In addition to the aforesaid payment, Licensee shall pay to Licensor royalties in such amounts as, after deduction of all taxes, shall be equal to up to six percent (6%) of the net sales prices of such Products, as follows: (i) 1.51. 5% of the sales if the Licensee’s end product uses only one Licensor’s patent; (ii) 3% of the sales if the Licensee’s end product uses two Licensor’s patents; (iii) 4.5% of the sales if the Licensee’s end product uses three Licensor’s patents; and (iv) 6% of the sales if the Licensee’s Licensees’ end product uses four or more Licensor’s patents. (c) In determining the quantities of the Products made, used or sold by Licensee and its affiliated companies for purposes of computing the royalties payable to Licensor in accordance with Paragraph (b) of this Article, no account shall be taken of any Products manufactured and sold by Licensor (or by any licensee of Licensor other than Licensee) to Licensee or its affiliated companies, and no royalty shall be payable with respect thereto.. {A0036982.DOC} (d) As used above and throughout this Agreement, the term “net sales price” shall mean the amount invoiced by Licensee or its affiliated companies to unrelated third parties for the total number of the Products sold to such unrelated third parties. Such amount shall not include any allowances to such unrelated third parties, sales taxes or cost of packaging and packing. In the event that Licensee or its affiliated companies shall sell or ship the Products to related parties, it shall be deemed to have been sold at the net sales price which would be charged if the said Products had been sold or offered for sale to unrelated third parties in the same area. (e) If Licensee shall at any time grant any right by sublicense to any affiliated company in any area in the Licensed Territory to manufacture the Products in such area, Licensee shall require the affiliated company to pay royalties to Licensor on the same basis as set forth in Paragraph (b) of this Article. The quantity of the Products made, used or sold by such manufacturing affiliated company shall be calculated separately for the purpose of computing the amount of royalties payable by such affiliated company to Licensor on the basis as set forth in Paragraph (b) of this Article, and such quantity shall not be taken into account in calculating the annual quantity of the Products used or sold by Licensee or its other affiliated companies for purposes of computing the amount of royalties payable by Licensee in accordance with Paragraph (b) of this Article. (f) Licensee hereby agrees that payment of royalties shall be made with respect to each calendar quarter and shall be made within thirty (30) days of the last working day of March, June, September and December of each year with respect to all Products used or sold by Licensee and its affiliated companies in the calendar quarter ending on the said working day. All payments shall be in U.S. dollars converted from any other currency at the official rate of {A0036982.DOC} exchange prevailing at the close of the Exchange Market in New York City, New York, U.S.A., on the last working day of the calendar quarter for which the said payment is being made. Such payments shall be made to Licensor or to such bank as Licensor shall designate from time to time, and shall be accompanied by a written report showing the amount and details of the Products made, used and sold by Licensee and its affiliated companies in the said calendar quarter. (i) Licensee agrees that it will at all times keep complete, separate and accurate books of account containing a current record of all Products made, used and sold by Licensee and its affiliated companies, and such books will be maintained in sufficient detail to enable Licensor to ascertain the royalties accruing and payable hereunder. (ii) Licensee further agrees to permit Licensor or its authorized accredited accounting agent to have access to said books of account at reasonable intervals during business hours. (iii) In the event that Licensee shall grant any rights hereunder to any affiliated company by sublicense, it shall impose the same obligation on the affiliated company with respect to maintaining books of account, and shall require the said affiliated company to permit Licensor or its authorized agent to have access to the said books of account at reasonable intervals during business hours.