Common use of Payments of Royalties Clause in Contracts

Payments of Royalties. Royalties shall be paid no later than sixty (60) days following the end of the calendar quarter during which Net Sales or License Revenue are invoiced for Biovest Biologic Products (“On-going Royalty Payments”). Additionally, Biovest shall make an advanced Royalty payment to Accentia equal to Six Million Dollars ($6,000,000) which shall be paid in lump-sum cash within five (5) business days after the first commercial sale of the Biovest Biologic Products in North America (“Advanced Royalty Payment”). In the alternative, in the event McKesson Corporation provides written notice of termination under the Distribution Agreement between Accentia and McKesson Corporation, Biovest shall make an advanced Royalty payment to Accentia equal to Three Million Dollars ($3,000,000) which shall be paid in lump-sum cash one hundred seventy-five days following such written notice of termination (“Advanced Royalty Payment In The Event of McKesson Termination”). In the event Biovest makes the Advanced Royalty Payment or in the event Biovest assumes the McKesson Corporation Distribution Agreement resulting in Accentia being released from any obligation under said Distribution Agreement, the next Royalty payment due after such royalty payment shall be due and payable after the aggregate of all Net Sales and License Revenue exceeds $30,769,230. Should Biovest make the Advanced Royalty Payment In The Event of McKesson Termination, the next Royalty payment due after such royalty payment shall be due and payable after the aggregate of all Net Sales and License Revenue exceeds $15,384,615. Biovest’s obligation to make the Advanced Royalty Payment or the Advanced Royalty Payment In The Event of McKesson Termination as described above shall terminate should Biovest, in its discretion, assume the Distribution Agreement between Accentia and McKesson Corporation. Should Net Sales or License Revenue occur, whether from international sales, license payments or otherwise, prior to Biovest’s making the Advanced Royalty Payment, Biovest making the Advanced Royalty Payment In The Event of McKesson Termination or Biovest assuming the McKesson Corporation Distributing Agreement, payments of Royalties under section 4.1 shall be made to Accentia no later than sixty (60) days following the end of the calendar quarter during which Net Sales or License Revenue are invoiced for Biovest Biologic Products.