Common use of Royalty Payment Clause in Contracts

Royalty Payment. (a) The Licensee agrees to pay the Licensor a royalty ("Royalty") of * percent (*) based on Net Sales (as defined herein) of Licensed Products by the Licensee. Such Royalties shall accrue when the Licensed Products are sold, shipped, distributed, billed or paid for, whichever occurs earliest. (b) Royalty payments shall be made by the Licensee to the Licensor on all Licensed Products sold, shipped or distributed by the Licensee, even if not billed or if billed at a discount. Royalty payments to be made in respect of Licensed Products sold, shipped or distributed but not billed or if billed at a discount (such as in the case of introductory offers, samples, promotions and the like, or in the case of sales, shipments or distributions to individuals or companies which are affiliated or associated with or subsidiaries of the Licensee), shall be based upon the Licensee's then usual wholesale price (the "Usual Wholesale Price") for such Licensed Products sold to arm's length third parties in the course of the Licensee's normal sales, shipment and distribution activities. (c) Where the billed price for any Licensed Products is less than the Usual Wholesale Price for such Licensed Products, the Royalty payments shall be based upon the Usual Wholesale Price. (d) The Licensee further agrees to pay the Licensor a non-refundable, minimum guaranteed annual royalty of * Dollars (* U.S.) for its use of the rights licensed hereunder during the Term (the "Guaranteed Minimum Royalty"). The Guaranteed Minimum Royalty shall be paid as follows: [Material marked with an asterisk has been omitted from this document pursuant to a request for confidential treatment and has been filed separately with the Securities and Exchange Commission.] (i) Dollars (* U.S.) upon execution of this Agreement; an additional * Dollars (* U.S.) by September 15, 1999; an additional * Dollars (* U.S.) by December 15, 1999; and an additional * Dollars (* U.S.) by April 15, 2000; and (ii) An additional * Dollars (* U.S.) by July 15, 2000; an additional * Dollars (* U.S.) by September 15, 2000; an additional * Dollars (* U.S.) by December 15, 2000; and an additional * Dollars (* U.S.) by April 15, 2001 (e) The Guaranteed Minimum Royalty payments shall be paid by the Licensee as specified above, whether or not the Licensee uses the rights licensed hereunder, and no part of such guaranteed payments shall be repayable to the Licensee except as specifically recited herein. (f) Royalty payments based on Net Sales (as adjusted in accordance herewith) made during any year of this Agreement shall be credited against the Guaranteed Minimum Royalty due for the year in which such sales were made. In no event shall any Royalties received in excess of the Guaranteed Minimum Royalty for the year in which such Net Sales were made be used as a credit against past or future Royalty obligations of the Licensee nor shall any such excess be applied against the Guaranteed Minimum Royalty for any other year of this Agreement.

Royalty Payment. (a) The Licensee agrees As additional consideration for the Acquired Assets, Buyer shall make quarterly [*] royalty payments to pay the Licensor a royalty ("Royalty") Seller equal to [*] of * percent (*) based on Net Sales (as defined herein) of Licensed all Products by sold anywhere in the Licensee. Such Royalties world during the applicable Royalty Term; provided, however, that such royalty shall accrue when the Licensed Products are sold, shipped, distributed, billed or paid for, whichever occurs earliestequal [*]. (b) Royalty payments Buyer’s obligation to pay royalties under this Section 2.3.3 shall be made by initiate on a Product-by-Product and country-by-country basis from the Licensee to date of First Commercial Sale of each Product in such country and expire, on a country-by-country and Product-by-Product basis, upon [*] (i) the Licensor on all Licensed Products sold, shipped or distributed by expiration of [*]; (ii) the Licensee, even if not billed or if billed at a discount. Royalty payments to be made in respect expiration of Licensed Products sold, shipped or distributed but not billed or if billed at a discount [*]; and (such as in the case of introductory offers, samples, promotions and the like, or in the case of sales, shipments or distributions to individuals or companies which are affiliated or associated with or subsidiaries of the Licensee), shall be based upon the Licensee's then usual wholesale price iii) [*] (the "Usual Wholesale Price") for such Licensed Products sold to arm's length third parties in the course of the Licensee's normal sales, shipment and distribution activities. (c) Where the billed price for any Licensed Products is less than the Usual Wholesale Price for such Licensed Products, the “Royalty payments shall be based upon the Usual Wholesale Price. (d) The Licensee further agrees to pay the Licensor a non-refundable, minimum guaranteed annual royalty of * Dollars (* U.S.) for its use of the rights licensed hereunder during the Term (the "Guaranteed Minimum Royalty"Term”). The Guaranteed Minimum Royalty shall be paid as follows: Net Sales of a particular Product sold in a particular country after the expiration of the [Material *] = Certain confidential information contained in this document, marked with an asterisk by brackets, has been omitted from this document pursuant to a request for confidential treatment and has been filed separately with the Securities and Exchange CommissionCommission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. Royalty Term for such Product and country shall not be included in the Net Sales for the purpose of calculating royalty payments or milestone payments.] (c) If Buyer owes royalties or milestone payments to a third party for a license of third party Intellectual Property necessary (in Buyer’s reasonable discretion) to make, use, offer to sell, sell or import a particular Product in a particular country (other than pursuant to any Assigned Agreement), then Buyer may deduct, from royalties due and payable by Buyer to Seller with respect to sales of such Product in such country, an amount equal to [*] of the royalties or milestone payments paid by Buyer to such third party on account of sales of such Product in such country; provided, however, that (i) Dollars third party milestone payments will be deductible (* U.S.as described herein) upon execution of this Agreement; an additional * Dollars (* U.S.) by September 15against the royalties due to Seller only if the third party license agreement under which such milestone payment is made [*] and [*], 1999; an additional * Dollars (* U.S.) by December 15, 1999; and an additional * Dollars (* U.S.) by April 15, 2000; and (ii) An additional * Dollars (* U.S.) by July 15, 2000; an additional * Dollars (* U.S.) by September 15, 2000; an additional * Dollars (* U.S.) by December 15, 2000; and an additional * Dollars (* U.S.) by April 15, 2001 (e) The Guaranteed Minimum Royalty payments shall be paid by the Licensee as specified above, whether or not the Licensee uses the rights licensed hereunder, and no part of such guaranteed payments shall be repayable to the Licensee except as specifically recited herein[*]. (fd) Royalty payments based on Within [*] business days after each calendar quarter, commencing with the calendar quarter during which the First Commercial Sale of a Product is made anywhere in the world, Buyer shall provide Seller with a non-binding estimate of the Net Sales of all Products sold during such calendar quarter. Within [*] days after each calendar quarter, Buyer shall provide Seller with a report that contains the following information: (as adjusted i) the amount of gross sales of each Product in such calendar quarter, on a country-by-country basis, (ii) an itemized calculation of Net Sales of each Product for such calendar quarter, showing separately each type of deduction provided for in the definition of “Net Sales,” (iii) the calculation of the royalty payment due on the Net Sales for such calendar quarter, and (iv) the exchange rate for such country, calculated in accordance herewith) made during any year with Section 2.3.6. Concurrent with the delivery of this Agreement the applicable quarterly report, Buyer shall be credited against the Guaranteed Minimum Royalty pay Seller all royalty payments due for the year in which such sales were made. In no event shall any Royalties received in excess of the Guaranteed Minimum Royalty for the year in which such Net Sales were made be used as a credit against past or future Royalty obligations of the Licensee nor shall any such excess be applied against the Guaranteed Minimum Royalty for any other year of this Agreementcalendar quarter.

Royalty Payment. (a) The Licensee agrees For a period of three (3) years after the Closing Date, within forty-five (45) days after the end of each twelve (12) month period from and after the Closing Date, Buyer will pay Seller fifty percent (50%) of the Net License Revenue actually received by Buyer from any source (including, without limitation, end users, VARs, distributors or other channel partners) for licensing the Applications acquired at Closing, including any enhancements, improvements or derivate works, during such fiscal year which exceeds one million dollars ($1,000,000) (the "ROYALTY PAYMENT"). Along with such payment, Buyer will provide a statement showing the quantity of licenses to pay the Licensor Applications provided during such fiscal year and a royalty calculation of the fees payable under this Section 1.9. Seller will treat the statement as confidential information of Buyer, will protect it from unauthorized use, access or disclosure in the same manner as Seller protects its own confidential or proprietary information of similar nature and with no less than reasonable care, and will disclose it only to the employees or agents of Seller who have a need to know such information for purpose of this Agreement and who are under a duty of confidentiality no less restrictive than Seller's duties hereunder. For purposes of this Agreement, "Net License Revenue" means the gross invoiced license fees billed by Buyer to any third party in connection with the license, sublicense or other use of the Applications, less (i) ordinary and necessary handling, insurance and other reasonable charges relating to the delivery or return of Applications to or by such end user customers, (ii) customary discounts actually allowed and taken, (iii) customs duties, surcharges, value added taxes ("RoyaltyVAT"), sales taxes, excise taxes and any other charges of any other governmental body placed on licensing of the Applications, (iv) reasonable bad debt expense, (v) amounts repaid or credits by reason of * percent rejections or returns of Applications, or service credits provided under the service level agreements, (*vi) based on associated royalties, license fees or commissions paid to third parties and (vii) reasonable travel costs incurred which are directly related to license sales. For avoidance of doubt, Net Sales (as defined herein) License Revenue does not include any fees received for performing any services, including any consulting services, maintenance services or support fees or any fees received in connection with licensing of Licensed Products by any products or software, other than the LicenseeApplications. Such Royalties shall accrue when the Licensed Products are sold, shipped, distributed, billed or paid for, whichever occurs earliest. (b) Royalty payments shall be made by the Licensee to the Licensor on all Licensed Products sold, shipped or distributed by the Licensee, even if not billed or if billed at a discount. Royalty payments to be made in respect of Licensed Products sold, shipped or distributed but not billed or if billed at a discount (such as in In the case of introductory offersso-called "bundled sales," where Applications purchased as part of the Assets are "bundled" with other software offered by Buyer, samples, promotions and the likeits affiliates, or in by Buyer and a third party or parties, the case amount of sales, shipments or distributions Net License Revenue allocable to individuals or companies which are affiliated or associated with or subsidiaries the Applications purchased as part of the Licensee), Assets shall be based used to determine the Royalty Payment; provided, further, Buyer shall also fairly allocate among license, professional services and maintenance fees in determining the Royalty Payment. Acknowledging Seller's reliance upon the Licensee's then usual wholesale price (anticipated share of Net License Revenue as an express condition of entering into this Agreement, Buyer shall use commercially reasonable efforts to adequately license, service and maintain its Application customers in accordance with good industry practice, and use its commercially reasonable efforts to timely recognize and realize the "Usual Wholesale Price") for such Licensed Products sold to arm's length third parties in the course of the Licensee's normal sales, shipment and distribution activities. (c) Where the billed price for any Licensed Products is less than the Usual Wholesale Price for such Licensed Products, the Royalty payments shall be based upon the Usual Wholesale Price. (d) The Licensee further agrees to pay the Licensor a non-refundable, minimum guaranteed annual royalty of * Dollars (* U.S.) for its use of the rights licensed hereunder maximum license revenue generated therefrom during the Term (entire three-year period following the "Guaranteed Minimum Royalty"). The Guaranteed Minimum Royalty shall be paid as follows: [Material marked with an asterisk has been omitted from this document pursuant to a request for confidential treatment and has been filed separately with the Securities and Exchange CommissionClosing Date.] (i) Dollars (* U.S.) upon execution of this Agreement; an additional * Dollars (* U.S.) by September 15, 1999; an additional * Dollars (* U.S.) by December 15, 1999; and an additional * Dollars (* U.S.) by April 15, 2000; and (ii) An additional * Dollars (* U.S.) by July 15, 2000; an additional * Dollars (* U.S.) by September 15, 2000; an additional * Dollars (* U.S.) by December 15, 2000; and an additional * Dollars (* U.S.) by April 15, 2001 (e) The Guaranteed Minimum Royalty payments shall be paid by the Licensee as specified above, whether or not the Licensee uses the rights licensed hereunder, and no part of such guaranteed payments shall be repayable to the Licensee except as specifically recited herein. (f) Royalty payments based on Net Sales (as adjusted in accordance herewith) made during any year of this Agreement shall be credited against the Guaranteed Minimum Royalty due for the year in which such sales were made. In no event shall any Royalties received in excess of the Guaranteed Minimum Royalty for the year in which such Net Sales were made be used as a credit against past or future Royalty obligations of the Licensee nor shall any such excess be applied against the Guaranteed Minimum Royalty for any other year of this Agreement.

Royalty Payment. (a) The Licensee agrees As additional consideration for the Acquired Assets, Buyer shall make quarterly [*] royalty payments to pay the Licensor a royalty ("Royalty") Seller equal to [*] of * percent (*) based on Net Sales (as defined herein) of Licensed all Products by sold anywhere in the Licensee. Such Royalties world during the applicable Royalty Term; provided, however, that such royalty shall accrue when the Licensed Products are sold, shipped, distributed, billed or paid for, whichever occurs earliestequal [*]. (b) Buyer’s obligation to pay royalties under this Section 2.3.3 shall initiate on a Product-by-Product and country-by-country basis from the date of First Commercial Sale of each Product in such country and expire, on a country-by-country and Product-by-Product basis, upon [*] (i) the expiration of [*]; (ii) the expiration of [*]; and (iii) [*] (the “Royalty payments Term”). The Net Sales of a particular Product sold in a particular country after the expiration of the Royalty Term for such Product and country shall not be made by the Licensee to the Licensor on all Licensed Products sold, shipped or distributed by the Licensee, even if not billed or if billed at a discount. Royalty payments to be made in respect of Licensed Products sold, shipped or distributed but not billed or if billed at a discount (such as included in the case Net Sales for the purpose of introductory offers, samples, promotions and the like, calculating royalty payments or in the case of sales, shipments or distributions to individuals or companies which are affiliated or associated with or subsidiaries of the Licensee), shall be based upon the Licensee's then usual wholesale price (the "Usual Wholesale Price") for such Licensed Products sold to arm's length third parties in the course of the Licensee's normal sales, shipment and distribution activitiesmilestone payments. (c) Where the billed price If Buyer owes royalties or milestone payments to a third party for a license of third party Intellectual Property necessary (in Buyer’s reasonable discretion) to make, use, offer to sell, sell or import a particular Product in a particular country (other than pursuant to any Licensed Products is less than the Usual Wholesale Price for Assigned Agreement), then Buyer may deduct, from royalties due and payable by Buyer to Seller with respect to sales of such Licensed ProductsProduct in such country, the Royalty payments shall be based upon the Usual Wholesale Price. (d) The Licensee further agrees an amount equal to pay the Licensor a non-refundable, minimum guaranteed annual royalty of * Dollars (* U.S.) for its use [*] of the rights licensed hereunder during royalties or milestone payments paid by Buyer to such third party on account of sales of such Product in such country; provided, however, that (i) third party milestone payments will be deductible (as described herein) against the Term royalties due to Seller only if the third party license agreement under which such milestone payment is made [*] and [*], and (the "Guaranteed Minimum Royalty")ii) [*]. The Guaranteed Minimum Royalty shall be paid as follows: [Material *] = Certain confidential information contained in this document, marked with an asterisk by brackets, has been omitted from this document pursuant to a request for confidential treatment and has been filed separately with the Securities and Exchange CommissionCommission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.] (d) Within [*] business days after each calendar quarter, commencing with the calendar quarter during which the First Commercial Sale of a Product is made anywhere in the world, Buyer shall provide Seller with a non-binding estimate of the Net Sales of all Products sold during such calendar quarter. Within [*] days after each calendar quarter, Buyer shall provide Seller with a report that contains the following information: (i) Dollars (* U.S.) upon execution the amount of this Agreement; an additional * Dollars (* U.S.) by September 15gross sales of each Product in such calendar quarter, 1999; an additional * Dollars (* U.S.) by December 15on a country-by-country basis, 1999; and an additional * Dollars (* U.S.) by April 15, 2000; and (ii) An additional * Dollars an itemized calculation of Net Sales of each Product for such calendar quarter, showing separately each type of deduction provided for in the definition of “Net Sales,” (* U.S.iii) by July 15, 2000; an additional * Dollars (* U.S.) by September 15, 2000; an additional * Dollars (* U.S.) by December 15, 2000; and an additional * Dollars (* U.S.) by April 15, 2001 (e) The Guaranteed Minimum Royalty payments shall be paid by the Licensee as specified above, whether or not calculation of the Licensee uses royalty payment due on the rights licensed hereunderNet Sales for such calendar quarter, and no part of (iv) the exchange rate for such guaranteed payments shall be repayable to the Licensee except as specifically recited herein. (f) Royalty payments based on Net Sales (as adjusted country, calculated in accordance herewith) made during any year with Section 2.3.6. Concurrent with the delivery of this Agreement the applicable quarterly report, Buyer shall be credited against the Guaranteed Minimum Royalty pay Seller all royalty payments due for the year in which such sales were made. In no event shall any Royalties received in excess of the Guaranteed Minimum Royalty for the year in which such Net Sales were made be used as a credit against past or future Royalty obligations of the Licensee nor shall any such excess be applied against the Guaranteed Minimum Royalty for any other year of this Agreementcalendar quarter.

Royalty Payment. (a) The Licensee agrees As additional consideration for the Acquired Assets, Buyer shall make quarterly [*] royalty payments to pay the Licensor a royalty ("Royalty") Seller equal to [*] of * percent (*) based on Net Sales (as defined herein) of Licensed all Products by sold anywhere in the Licensee. Such Royalties world during the applicable Royalty Term; provided, however, that such royalty shall accrue when the Licensed Products are sold, shipped, distributed, billed or paid for, whichever occurs earliestequal [*]. (b) Buyer’s obligation to pay royalties under this Section 2.3.3 shall initiate on a Product-by-Product and country-by-country basis from the date of First Commercial Sale of each Product in such country and expire, on a country-by-country and Product-by-Product basis, upon [*] (i) the expiration of [*]; (ii) the expiration of [*]; and (iii) [*] (the “Royalty payments Term”). The Net Sales of a particular Product sold in a particular country after the expiration of the Royalty Term for such Product and country shall not be made by the Licensee to the Licensor on all Licensed Products sold, shipped or distributed by the Licensee, even if not billed or if billed at a discount. Royalty payments to be made in respect of Licensed Products sold, shipped or distributed but not billed or if billed at a discount (such as included in the case Net Sales for the purpose of introductory offers, samples, promotions and the like, calculating royalty payments or in the case of sales, shipments or distributions to individuals or companies which are affiliated or associated with or subsidiaries of the Licensee), shall be based upon the Licensee's then usual wholesale price (the "Usual Wholesale Price") for such Licensed Products sold to arm's length third parties in the course of the Licensee's normal sales, shipment and distribution activitiesmilestone payments. (c) Where the billed price If Buyer owes royalties or milestone payments to a third party for a license of third party Intellectual Property necessary (in Buyer’s reasonable discretion) to make, use, offer to sell, sell or import a particular Product in a particular country (other than pursuant to any Licensed Products is less than the Usual Wholesale Price for Assigned Agreement), then Buyer may deduct, from royalties due and payable by Buyer to Seller with respect to sales of such Licensed ProductsProduct in such country, the Royalty payments shall be based upon the Usual Wholesale Price. (d) The Licensee further agrees an amount equal to pay the Licensor a non-refundable, minimum guaranteed annual royalty of * Dollars (* U.S.) for its use [*] of the rights licensed hereunder during royalties or milestone payments paid by Buyer to such third party on account of sales of such Product in such country; provided, however, that (i) third party milestone payments will be deductible (as described herein) against the Term royalties due to Seller only if the third party license agreement under which such milestone payment is made [*] and [*], and (the "Guaranteed Minimum Royalty")ii) [*]. The Guaranteed Minimum Royalty shall be paid as follows: [Material *] = Certain confidential information contained in this document, marked with an asterisk by brackets, has been omitted from this document pursuant to a request for confidential treatment and has been filed separately with the Securities and Exchange CommissionCommission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.] (d) Within [*] business days after each calendar quarter, commencing with the calendar quarter during which the First Commercial Sale of a Product is made anywhere in the world, Buyer shall provide Seller with a non-binding estimate of the Net Sales of all Products sold during such calendar quarter. Within [*] days after each calendar quarter, Buyer shall provide Seller with a report that contains the following information: (i) Dollars (* U.S.) upon execution the amount of this Agreement; an additional * Dollars (* U.S.) by September 15gross sales of each Product in such calendar quarter, 1999; an additional * Dollars (* U.S.) by December 15on a country-by-country basis, 1999; and an additional * Dollars (* U.S.) by April 15, 2000; and (ii) An additional * Dollars an itemized calculation of Net Sales of each Product for such calendar quarter, showing separately each type of deduction provided for in the definition of “Net Sales,” (* U.S.iii) by July 15, 2000; an additional * Dollars (* U.S.) by September 15, 2000; an additional * Dollars (* U.S.) by December 15, 2000; and an additional * Dollars (* U.S.) by April 15, 2001 (e) The Guaranteed Minimum Royalty payments shall be paid by the Licensee as specified above, whether or not calculation of the Licensee uses royalty payment due on the rights licensed hereunderNet Sales for such calendar quarter, and no part of (iv) the exchange rate for such guaranteed payments shall be repayable to the Licensee except as specifically recited herein. (f) Royalty payments based on Net Sales (as adjusted country, calculated in accordance herewith) made during any year of this Agreement shall be credited against the Guaranteed Minimum Royalty due for the year in which such sales were made. In no event shall any Royalties received in excess of the Guaranteed Minimum Royalty for the year in which such Net Sales were made be used as a credit against past or future Royalty obligations of the Licensee nor shall any such excess be applied against the Guaranteed Minimum Royalty for any other year of this Agreementwith Section 2.3.