Common use of PAYMENTS, ROYALTY Clause in Contracts

PAYMENTS, ROYALTY. RESEARCH SUPPORT AND EQUITY 4.1 The Company will reimburse JHU for the reasonable costs and efforts of preparing, filing, maintaining and prosecuting PATENT RIGHTS through June 30, 1998 provided that such costs shall not exceed $79,623.85 in the aggregate. The Company shall reimburse JHU within thirty (30) days of receipt of invoice from JHU. The Company shall also reimburse JHU out of pocket expenses to have the corporate formation documents and fund raising documents reviewed by outside counsel not to exceed $15,000. 4.2 The Company shall pay to JHU within thirty (30) days of the EFFECTIVE DATE, a processing fee of Fifty Thousand Dollars ($50,000). This payment is nonrefundable and shall not be credited against royalties or other fees. 4.3 The Company shall pay to JHU a [***] annual maintenance fee due within thirty (30) days of each anniversary of the EFFECTIVE DATE. Such fees are nonrefundable and shall not be credited against royalties or other fees. [***] Indicates portions of this exhibit that have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment. 4.4 Subject to the limitations set forth in Paragraph 4.14 below, the Company shall pay to JHU, as a running royalty during the ROYALTY PAYMENT PERIOD, for each LICENSED PRODUCT sold, and for each LICENSED SERVICE provided by the Company and AFFILIATED COMPANIES, five percent (5%) of NET SALES and NET SERVICE REVENUES. Such payments shall be made quarterly as provided in Paragraph 4.7. 4.5 Subject to the limitations set forth in Paragraph 4.14 below, the Company shall pay to JHU, as a running royalty during the ROYALTY PAYMENT PERIOD, twenty percent (20%) of SUBLICENSE REVENUES received by the Company and any AFFILIATED COMPANY. Such payments shall be made quarterly as provided in Paragraph 4.7. 4.6 The Company shall pay to JHU [***] upon the first commercial sale of a LICENSED PRODUCT or LICENSED SERVICE following receipt of FDA marketing approval. Such fee shall be non-refundable and will be credited against future royalties. 4.7 During the ROYALTY PAYMENT PERIOD the Company shall provide to JHU within forty-five (45) days of the end of each March, June, and September and within ninety (90) days of the end of each December, a written report to JHU of the amount of LICENSED PRODUCTS sold, LICENSED SERVICES sold, the total NET SALES, NET SERVICE REVENUES of such LICENSED PRODUCTS and LICENSED SERVICES, and the running royalties due to JHU as a result of NET SALES, NET SERVICE REVENUES and SUBLICENSE REVENUES received by the Company and AFFILIATED COMPANIES. Payment of any such royalties due shall accompany such report. Until the Company, an AFFILIATED COMPANY or a sublicensee has achieved a first commercial sale of a LICENSED PRODUCT and received FDA market approval, a report shall be submitted at the end of every June and December after the EFFECTIVE DATE and will include a full written report describing the Company’s, AFFILIATED COMPANIES or sublicensee’s technical efforts towards meeting the milestones in Article 6. 4.8 The Company shall make and retain, for a period of three (3) years following the period of each report required by Paragraph 4.7, true and accurate records, files and books of account containing all the data reasonably required for the full computation and verification of sales and other information required in Paragraph 4.7. Such books and records shall be in accordance with generally accepted accounting principles consistently applied. The Company shall permit the inspection and copying of such records, files and books of account by JHU or its agents during regular business hours upon ten (10) business days’ written notice to the Company. Such inspection shall not be made more than once each calendar year. All costs of such inspection and copying shall be paid by JHU, provided that if any such inspection shall reveal that an error has been made in the amount equal to ten percent (10%) or more of such payment, such costs shall be borne by [***] Indicates portions of this exhibit that have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment. the Company. The Company shall include in any agreement with its AFFILIATED COMPANIES or its sublicensees which permits such party to make, use or sell the LICENSED PRODUCT(S) or provide LICENSED SERVICES, a provision requiring such party to retain records of sales of LICENSED PRODUCT(S) and records of LICENSED SERVICES and other information as required in Paragraph 4.7 and permit JHU to inspect such records as required by this Paragraph 4.8. 4.9 No royalties shall be payable on LICENSED PRODUCT sales or LICENSED SERVICE activities between the Company and any AFFILIATED COMPANIES, in which event the royalty shall be based upon the NET SALES or NET SERVICE REVENUES of the AFFILIATED COMPANY. 4.10 No multiple royalties shall be due and payable because any LICENSED PRODUCTS or LICENSED SERVICES are covered by more than one patent which is within the definition of PATENT RIGHTS. 4.11 In order to insure JHU the full royalty payments contemplated hereunder, the Company agrees that in the absence of a written consent by JHU to the terms of any agreement, understanding, or arrangement between the Company or any AFFILIATED COMPANY and a corporation, firm or association (hereinafter referred to as an “Inside Customer”) under which the Company or an AFFILIATED COMPANY has or will receive other consideration (such as, among other things, an option to purchase stock or actual stock ownership, or an arrangement involving division of profits or special rebates or allowances) any royalties on LICENSED PRODUCT sold or LICENSED SERVICE provided by the Company or an AFFILIATED COMPANY to such Inside Customer shall be based upon the greater of: 1) the net selling price at which the Insider Customer resells LICENSED PRODUCTS, 2) the net service revenue received by the Inside Customer from using the LICENSED PRODUCT in providing a service, 3) the fair market value of the LICENSED PRODUCT or 4) the net selling price of LICENSED PRODUCTS paid by the Inside Customer. In the event JHU is requested to consent to an agreement with an Inside Customer, JHU agrees to act promptly in the matter. 4.12 JHU agrees that no royalties shall be due for the internal use of the LICENSED PRODUCTS for research and commercial development purposes by the Company and AFFILIATED COMPANIES or for use by third parties in seeking governmental and professional approvals, certifications or endorsements, or for training purposes, except where the Company or any AFFILIATED COMPANY receives revenues for the sale of the LICENSED PRODUCT to the organization using the device for such stated proposes. 4.13 All payments under this Agreement shall be made in U.S. Dollars. 4.14 The cumulative royalty payments to be paid by the Company under Paragraphs 4.4 and 4.5 above shall not exceed in the aggregate [***] less the fair market value of the JHU SHARES on the fourth anniversary of the EFFECTIVE DATE. [***] Indicates portions of this exhibit that have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment. 4.15 The Company shall pay to JHU, as a running royalty one percent (1%) of NET SALES and/or NET SERVICE REVENUES and/or 10% of SUBLICENSE REVENUES received by the Company and any AFFILIATED COMPANY for the term of this Agreement for any IMPROVEMENTS that are covered by a patent granted in the country from which the LICENSED PRODUCT or LICENSED SERVICE is made, used or practiced. Such royalty shall not be accumulative based on the number of patented IMPROVEMENTS but will be 1% of NET SALES or NET SERVICE REVENUES or 10% of SUBLICENSE REVENUES of each product covered by one or more such patented IMPROVEMENTS. Such payments shall be made quarterly as provided in Paragraph 4.7. For IMPROVEMENTS not covered by a patent no royalty shall be paid by the Company. 4.16 The Company shall not pay to JHU any royalty on any IMPROVEMENTS that are not covered by a patent granted in the country from which the LICENSED PRODUCT or LICENSED SERVICE is made, used, sold or practiced.

PAYMENTS, ROYALTY. RESEARCH SUPPORT AND EQUITY 4.1 The Company will reimburse JHU for the reasonable costs and efforts of preparing, filing, maintaining and prosecuting PATENT RIGHTS through June 30, 1998 provided that such costs shall not exceed $79,623.85 in the aggregate. The Company shall reimburse JHU within thirty (30) days of receipt of invoice from JHU. The Company shall also reimburse JHU out of pocket expenses to have the corporate formation documents and fund raising documents reviewed by outside counsel not to exceed $15,000. 4.2 The Company shall pay to JHU within thirty (30) days of the EFFECTIVE DATE, a processing fee of Fifty Thousand Dollars ($50,000). This payment is nonrefundable and shall not be credited against royalties or other fees. 4.3 The Company shall pay to JHU a [***] annual maintenance fee due within thirty (30) days of each anniversary of the EFFECTIVE DATE. Such fees are nonrefundable and shall not be credited against royalties or other fees. [***] Indicates portions of this exhibit that have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment. 4.4 Subject to the limitations set forth in Paragraph 4.14 below, the Company shall pay to JHU, as a running royalty during the ROYALTY PAYMENT PERIOD, for each LICENSED PRODUCT sold, and for each LICENSED SERVICE provided by the Company and AFFILIATED COMPANIES, five percent (5%) [***] of NET SALES and NET SERVICE REVENUES. Such payments shall be made quarterly as provided in Paragraph 4.7. 4.5 Subject to the limitations set forth in Paragraph 4.14 below, the Company shall pay to JHU, as a running royalty during the ROYALTY PAYMENT PERIOD, twenty percent (20%) [***] of SUBLICENSE REVENUES received by the Company and any AFFILIATED COMPANY. Such payments shall be made quarterly as provided in Paragraph 4.7. 4.6 The Company shall pay to JHU [***] upon the first commercial sale of a LICENSED PRODUCT or LICENSED SERVICE following receipt of FDA marketing approval. Such fee shall be non-refundable and will be credited against future royalties. 4.7 During the ROYALTY PAYMENT PERIOD the Company shall provide to JHU within forty-five (45) days of the end of each March, June, and September and within ninety (90) days of the end of each December, a written report to JHU of the amount of LICENSED PRODUCTS sold, LICENSED SERVICES sold, the total NET SALES, NET SERVICE REVENUES of such LICENSED PRODUCTS and LICENSED SERVICES, and the running royalties due to JHU as a result of NET SALES, NET SERVICE REVENUES and SUBLICENSE REVENUES received by the Company and AFFILIATED COMPANIES. Payment of any such royalties due shall accompany such report. Until the Company, an AFFILIATED COMPANY or a sublicensee has achieved a first commercial sale of a LICENSED PRODUCT and received FDA market approval, a report shall be submitted at the end of every June and December after the EFFECTIVE DATE and will include a full written report describing the Company’s, AFFILIATED COMPANIES or sublicensee’s technical efforts towards meeting the milestones in Article 6. 4.8 The Company shall make and retain, for a period of three (3) years following the period of each report required by Paragraph 4.7, true and accurate records, files and books of account containing all the data reasonably required for the full computation and verification of sales and other information required in Paragraph 4.7. Such books and records shall be in accordance with generally accepted accounting principles consistently applied. The Company shall permit the inspection and copying of such records, files and books of account by JHU or its agents during regular business hours upon ten (10) business days’ written notice to the Company. Such inspection shall not be made more than once each calendar year. All costs of such inspection and copying shall be paid by JHU, provided that if any such inspection shall reveal that an error has been made in the amount equal to ten percent (10%) or more of such payment, such costs shall be borne by [***] Indicates portions of this exhibit that have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment. the Company. The Company shall include in any agreement with its AFFILIATED COMPANIES or its sublicensees which permits such party to make, use or sell the LICENSED PRODUCT(S) or provide LICENSED SERVICES, a provision requiring such party to retain records of sales of LICENSED PRODUCT(S) and records of LICENSED SERVICES and other information as required in Paragraph 4.7 and permit JHU to inspect such records as required by this Paragraph 4.8. 4.9 No royalties shall be payable on LICENSED PRODUCT sales or LICENSED SERVICE activities between the Company and any AFFILIATED COMPANIES, in which event the royalty shall be based upon the NET SALES or NET SERVICE REVENUES of the AFFILIATED COMPANY. 4.10 No multiple royalties shall be due and payable because any LICENSED PRODUCTS or LICENSED SERVICES are covered by more than one patent which is within the definition of PATENT RIGHTS. 4.11 In order to insure JHU the full royalty payments contemplated hereunder, the Company agrees that in the absence of a written consent by JHU to the terms of any agreement, understanding, or arrangement between the Company or any AFFILIATED COMPANY and a corporation, firm or association (hereinafter referred to as an “Inside Customer”) under which the Company or an AFFILIATED COMPANY has or will receive other consideration (such as, among other things, an option to purchase stock or actual stock ownership, or an arrangement involving division of profits or special rebates or allowances) any royalties on LICENSED PRODUCT sold or LICENSED SERVICE provided by the Company or an AFFILIATED COMPANY to such Inside Customer shall be based upon the greater of: 1) the net selling price at which the Insider Customer resells LICENSED PRODUCTS, 2) the net service revenue received by the Inside Customer from using the LICENSED PRODUCT in providing a service, 3) the fair market value of the LICENSED PRODUCT or 4) the net selling price of LICENSED PRODUCTS paid by the Inside Customer. In the event JHU is requested to consent to an agreement with an Inside Customer, JHU agrees to act promptly in the matter. 4.12 JHU agrees that no royalties shall be due for the internal use of the LICENSED PRODUCTS for research and commercial development purposes by the Company and AFFILIATED COMPANIES or for use by third parties in seeking governmental and professional approvals, certifications or endorsements, or for training purposes, except where the Company or any AFFILIATED COMPANY receives revenues for the sale of the LICENSED PRODUCT to the organization using the device for such stated proposes. 4.13 All payments under this Agreement shall be made in U.S. Dollars. 4.14 The cumulative royalty payments to be paid by the Company under Paragraphs 4.4 and 4.5 above shall not exceed in the aggregate [***] less the fair market value of the JHU SHARES on the fourth anniversary of the EFFECTIVE DATE. [***] Indicates portions of this exhibit that have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment. 4.15 The Company shall pay to JHU, as a running royalty one percent (1%) [***] of NET SALES and/or NET SERVICE REVENUES and/or 10% [***] of SUBLICENSE REVENUES received by the Company and any AFFILIATED COMPANY for the term of this Agreement for any IMPROVEMENTS that are covered by a patent granted in the country from which the LICENSED PRODUCT or LICENSED SERVICE is made, used or practiced. Such royalty shall not be accumulative based on the number of patented IMPROVEMENTS but will be 1% [***] of NET SALES or NET SERVICE REVENUES or 10% [***] of SUBLICENSE REVENUES of each product covered by one or more such patented IMPROVEMENTS. Such payments shall be made quarterly as provided in Paragraph 4.7. For IMPROVEMENTS not covered by a patent no royalty shall be paid by the Company. 4.16 The Company shall not pay to JHU any royalty on any IMPROVEMENTS that are not covered by a patent granted in the country from which the LICENSED PRODUCT or LICENSED SERVICE is made, used, sold or practiced.

PAYMENTS, ROYALTY. RESEARCH SUPPORT AND EQUITY 4.1 The Company will reimburse JHU for the reasonable costs and efforts of preparing, filing, maintaining and prosecuting PATENT RIGHTS through June 30, 1998 provided that such costs shall not exceed $79,623.85 [***] in the aggregate. The Company shall reimburse JHU within thirty (30) days of receipt of invoice from JHU. The Company shall also reimburse JHU out of pocket expenses to have the corporate formation documents and fund raising documents reviewed by outside counsel not to exceed $15,000[***]. 4.2 The Company shall pay to JHU within thirty (30) days of the EFFECTIVE DATE, a processing fee of Fifty Thousand Dollars ($50,000)[***]. This payment is nonrefundable and shall not be credited against royalties or other fees. 4.3 The Company shall pay to JHU a [***] annual maintenance fee due within thirty (30) days of each anniversary of the EFFECTIVE DATE. Such fees are nonrefundable and shall not be credited against royalties or other fees. [***] Indicates portions of this exhibit that have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment. 4.4 Subject to the limitations set forth in Paragraph 4.14 below, the Company shall pay to JHU, as a running royalty during the ROYALTY PAYMENT PERIOD, for each LICENSED PRODUCT sold, and for each LICENSED SERVICE provided by the Company and AFFILIATED COMPANIES, five percent (5%) [***] of NET SALES and NET SERVICE REVENUES. Such payments shall be made quarterly as provided in Paragraph 4.7. 4.5 Subject to the limitations set forth in Paragraph 4.14 below, the Company shall pay to JHU, as a running royalty during the ROYALTY PAYMENT PERIOD, twenty percent (20%) [***] of SUBLICENSE REVENUES received by the Company and any AFFILIATED COMPANY. Such payments shall be made quarterly as provided in Paragraph 4.7. 4.6 The Company shall pay to JHU [***] upon the first commercial sale of a LICENSED PRODUCT or LICENSED SERVICE following receipt of FDA marketing approval. Such fee shall be non-refundable and will be credited against future royalties. 4.7 During the ROYALTY PAYMENT PERIOD the Company shall provide to JHU within forty-five (45) days of the end of each March, June, and September and within ninety (90) days of the end of each December, a written report to JHU of the amount of LICENSED PRODUCTS sold, LICENSED SERVICES sold, the total NET SALES, NET SERVICE REVENUES of such LICENSED PRODUCTS and LICENSED SERVICES, and the running royalties due to JHU as a result of NET SALES, NET SERVICE REVENUES and SUBLICENSE REVENUES received by the Company and AFFILIATED COMPANIES. Payment of any such royalties due shall accompany such report. Until the Company, an AFFILIATED COMPANY or a sublicensee has achieved a first commercial sale of a LICENSED PRODUCT and received FDA market approval, a report shall be submitted at the end of every June and December after the EFFECTIVE DATE and will include a full written report describing the Company’s, AFFILIATED COMPANIES or sublicensee’s technical efforts towards meeting the milestones in Article 6. 4.8 The Company shall make and retain, for a period of three (3) years following the period of each report required by Paragraph 4.7, true and accurate records, files and books of account containing all the data reasonably required for the full computation and verification of sales and other information required in Paragraph 4.7. Such books and records shall be in accordance with generally accepted accounting principles consistently applied. The Company shall permit the inspection and copying of such records, files and books of account by JHU or its agents during regular business hours upon ten (10) business days’ written notice to the Company. Such inspection shall not be made more than once each calendar year. All costs of such inspection and copying shall be paid by JHU, provided that if any such inspection shall reveal that an error has been made in the amount equal to ten percent (10%) or more of such payment, such costs shall be borne by [***] Indicates portions of this exhibit that have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment. the Company. The Company shall include in any agreement with its AFFILIATED COMPANIES or its sublicensees which permits such party to make, use or sell the LICENSED PRODUCT(S) or provide LICENSED SERVICES, a provision requiring such party to retain records of sales of LICENSED PRODUCT(S) and records of LICENSED SERVICES and other information as required in Paragraph 4.7 and permit JHU to inspect such records as required by this Paragraph 4.8. 4.9 No royalties shall be payable on LICENSED PRODUCT sales or LICENSED SERVICE activities between the Company and any AFFILIATED COMPANIES, in which event the royalty shall be based upon the NET SALES or NET SERVICE REVENUES of the AFFILIATED COMPANY. 4.10 No multiple royalties shall be due and payable because any LICENSED PRODUCTS or LICENSED SERVICES are covered by more than one patent which is within the definition of PATENT RIGHTS. 4.11 In order to insure JHU the full royalty payments contemplated hereunder, the Company agrees that in the absence of a written consent by JHU to the terms of any agreement, understanding, or arrangement between the Company or any AFFILIATED COMPANY and a corporation, firm or association (hereinafter referred to as an “Inside Customer”) under which the Company or an AFFILIATED COMPANY has or will receive other consideration (such as, among other things, an option to purchase stock or actual stock ownership, or an arrangement involving division of profits or special rebates or allowances) any royalties on LICENSED PRODUCT sold or LICENSED SERVICE provided by the Company or an AFFILIATED COMPANY to such Inside Customer shall be based upon the greater of: 1) the net selling price at which the Insider Customer resells LICENSED PRODUCTS, 2) the net service revenue received by the Inside Customer from using the LICENSED PRODUCT in providing a service, 3) the fair market value of the LICENSED PRODUCT or 4) the net selling price of LICENSED PRODUCTS paid by the Inside Customer. In the event JHU is requested to consent to an agreement with an Inside Customer, JHU agrees to act promptly in the matter. 4.12 JHU agrees that no royalties shall be due for the internal use of the LICENSED PRODUCTS for research and commercial development purposes by the Company and AFFILIATED COMPANIES or for use by third parties in seeking governmental and professional approvals, certifications or endorsements, or for training purposes, except where the Company or any AFFILIATED COMPANY receives revenues for the sale of the LICENSED PRODUCT to the organization using the device for such stated proposes. 4.13 All payments under this Agreement shall be made in U.S. Dollars. 4.14 The cumulative royalty payments to be paid by the Company under Paragraphs 4.4 and 4.5 above shall not exceed in the aggregate [***] less the fair market value of the JHU SHARES on the fourth anniversary of the EFFECTIVE DATE. [***] Indicates portions of this exhibit that have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment. 4.15 The Company shall pay to JHU, as a running royalty one percent (1%) [***] of NET SALES and/or NET SERVICE REVENUES and/or 10% [***] of SUBLICENSE REVENUES received by the Company and any AFFILIATED COMPANY for the term of this Agreement for any IMPROVEMENTS that are covered by a patent granted in the country from which the LICENSED PRODUCT or LICENSED SERVICE is made, used or practiced. Such royalty shall not be accumulative based on the number of patented IMPROVEMENTS but will be 1% [***] of NET SALES or NET SERVICE REVENUES or 10% [***] of SUBLICENSE REVENUES of each product covered by one or more such patented IMPROVEMENTS. Such payments shall be made quarterly as provided in Paragraph 4.7. For IMPROVEMENTS not covered by a patent no royalty shall be paid by the Company. 4.16 The Company shall not pay to JHU any royalty on any IMPROVEMENTS that are not covered by a patent granted in the country from which the LICENSED PRODUCT or LICENSED SERVICE is made, used, sold or practiced.