Product Compensation Clause Samples

Product Compensation. (a) As additional consideration for Parent’s use and occupancy of the Facility and its use of the Personal Property during the Term and the issuance and delivery by the Company to the Purchaser of the Milestone Shares and related Warrants, for the period beginning on the First Commercial Sale of each Product and continuing for a period of ten (10) years thereafter (measured independently for each Product), Parent shall pay the Company a cash fee (the “Product Fee”) equal to fifteen (15%) percent of the Profit, if any, on each of the Products. (b) Parent shall pay the Product Fee to the Company for each Product within thirty (30) days after the end of each calendar quarter, beginning with the calendar quarter during which the First Commercial Sale of the applicable Product occurs. The Product Fee for each calendar quarter (or portion thereof in the case of the first payment) shall be calculated based upon the Profit on the Product for the applicable calendar quarter (or portion thereof in the case of the first payment). Each payment of the Product Fee for each Product shall be accompanied by a statement prepared by or on behalf of Parent setting forth the calculation of the Profit for the applicable period. (c) Nothing contained in this Article V or in any other provision of this Agreement shall in any way limit Parent’s free and exclusive right to determine in its sole discretion the timing and manner of the development, marketing, manufacturing, distribution and/or sale of any of the Products, including, without limitation, ceasing the manufacture, distribution and/or sale of a Product if it is not commercially viable or economically feasible to continue. (d) Parent shall keep full, true and accurate books of account containing all particulars with respect to the Profits for each Product for the purpose of showing the amounts payable to the Company hereunder. Such books of account shall be kept at Parent’s principal place of business. During the term that the Company is entitled to a Product Fee with respect to a Product and for one (1) year after the termination of such period for the applicable Product, such books and the supporting data shall be available at Parent’s principal place of business, at mutually acceptable times and upon reasonable prior written notice during normal business hours, for inspection by a firm of certified public accountants selected by the Company that are consented to by Parent, which consent shall not be unreasonably withhel...