Payments Royalties and Reports. Coordination of Payments under the US Agreement. The license fee, milestone payments and royalties payable by SPL under this Article III are in consideration for the rights and licenses granted to SPL under this Agreement and are in addition to any amounts payable to Licensor under the US Agreement. It is understood and agreed that, with respect to the development milestone payable under Section 3.2(a)(i) and the sales milestones payable under Section 3.2(b) the occurrence of one or more of such milestone events will result in milestone payment obligations under both this Agreement and the corresponding provisions of the US Agreement. It is further understood that SPL's financial obligations with respect to development costs under Article II shall be [ * ] apportioned between SPL and the corresponding obligations of Schering Corporation under the US Agreement.
Payments Royalties and Reports. Coordination of Payments under the International Agreement. The license fee, milestone payments and royalties payable by Schering under this Article III are in consideration for the rights and licenses granted to Schering under this Agreement and are in addition to any amounts payable to Licensor under the International Agreement. It is understood and agreed that, with respect to the development milestone payable under Section 3.2(a)(i) and the sales milestones payable under Section 3.2(b) the occurrence of one or more of such milestone events will result in milestone payment obligations under both this Agreement and the corresponding provisions of the International Agreement. It is further understood that Schering's financial obligations with respect to development costs under Article II shall be [ * ] apportioned between Schering and the corresponding obligations of Schering-Plough Ltd. under the International Agreement.
Payments Royalties and Reports. 6.1 [Intentionally omitted].
Payments Royalties and Reports. 8 5.1. License Fee....................................................................................8 5.2.
Payments Royalties and Reports. 4.01 In consideration for the licenses granted to LICENSEE hereunder, LICENSEE and permitted Affiliates of LICENSEE shall pay to LICENSOR in the manner set forth below, payable quarterly, royalties on the annual Net Sales of Licensed Products made during such quarter by LICENSEE or Affiliates according to the following schedule:
(a) of Net Sales between *** and *** plus;
(b) of Net Sales between *** and *** plus; ***PORTIONS OF THIS PAGE HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
(c) of Net Sales between *** and ***; and
(d) of Net Sales in excess ***.
4.02 LICENSOR and LICENSEE agree that the methodology used to calculate the payments and royalties set forth herein is fair, reasonable and the most administratively convenient way to make the calculations.
4.03 Notwithstanding the schedule set forth in Section 4.01 above, in consideration of the license granted to LICENSEE hereunder, LICENSEE will pay to LICENSOR a minimum annual royalty of ***, to be paid in equal amounts on a quarterly basis, on January 1, April 1, July 1 and October 1 of each calendar year, commencing on July l, 1995. The minimum annual royalty payment shall increase to *** in the second year of this Agreement and shall increase *** each year over the preceding year’s minimum annual royalty payment during the term of this Agreement, until such time as the minimum annual payment reaches ***. Upon reaching ***, the minimum annual payment shall remain at that amount for each subsequent year during the term of this Agreement. Such minimum annual royalty payments are creditable against the royalty from LICENSEE’S sale of Licensed Products for the same years.
4.04 For purposes of this Agreement, “Net Sales” shall mean the gross amounts received by LICENSEE or an Affiliate of LICENSEE from or on account of the sale of Licensed Products to independent third parties, less the aggregate of the following amounts: (i) discounts, including cash discounts, or rebates actually allowed or granted, and (ii) credits or allowances actually granted by LICENSEE or an Affiliate of LICENSEE upon claims or returns. All royalties due to LICENSOR under this agreement shall be based upon the sales price of the Licensed Products sold hereunder to an unaffiliated third-party. Sales are considered made for the purposes of this Agreement when invoiced by LICENSEE or an Affiliate of LICENSEE.
Payments Royalties and Reports. 5.1 RESEARCH PROGRAM FUNDING
(a) PARTY CONTRIBUTIONS. As set forth herein each Party has an ongoing financial obligation to support the Research Program. Neither Party shall be obligated to provide a higher level of support than agreed upon in the Budget for any Calendar Year. In accordance with the Budget and with funding process set out in Schedule 5.1, MERCK shall be responsible for [**] of the operational expenses of the Research Program and deCODE shall be responsible for [**] of the operational expenses. These shared operational expenses shall be limited solely to [CONFIDENTIAL TREATMENT REQUESTED], as reflected in Schedule 5.1, and the Parties contemplate that deCODE shall provide approximately [CONFIDENTIAL TREATMENT REQUESTED] provided by MERCK. Without its consent, deCODE shall not be obligated to share responsibility for operational expenses that result from aggregate [CONFIDENTIAL TREATMENT REQUESTED]. Subject to the methodology set forth in Schedule 5.1, such other methodologies as the Operating Committee may expressly approve and in accordance with the Budget, operational expenses incurred by either Party shall be determined in accordance with that Party’s regular accounting methods, consistently applied.
Payments Royalties and Reports. 17 5.1 Commitment Fee and Option Payment...................................17 5.2 Research Program Funding............................................17 5.3
Payments Royalties and Reports. 15 5.1 Commitment Fee and Option Payment................................................... 15 5.2
Payments Royalties and Reports. 8.1 Research, Technology Access and Related Payments.
Payments Royalties and Reports. 3.1 License Fee(s). Licensee shall reimburse Licensor the cost associated with technology development, patent, protection, and patent maintenance and legal fees associated with licensing the Patent Rights, in the form of a license fee payable as follows:
(a) A non-creditable and non-refundable license fee of one hundred ten thousand dollars ($110,000) to be paid as follows:
(i) $10,000 as of the Effective Date of the Agreement;
(ii) $2,500 paid on the last business day of each of the months September, October, and November 2005; and
(iii) $5,000 paid on the last business day of each month thereafter until payment of the $110,000 License Fee has been made, or if greater, 2% of Net Sales paid on the last business day of each month until payment of the $110,000 has been made.
(b) ChromaDex Common Stock, the number of shares to be equal to two percent (2%) of the capital stock of Licensee on a fully diluted basis as of the effective date of the License Agreement, said stock to have “piggy-back” registration rights on terms and conditions consistent with industry standards and any previous agreements granted by Licensee (e.g. the Napro registration rights). Further, Licensor will have anti-dilution rights as set forth in Exhibit A attached hereto.
