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https://www.sec.gov/Archives/edgar/data/14035...-index.htm
ARTICLE IV
FINANCIAL TERMS
Section 4.1 Upfront Fee . The Licensee shall pay the Licensor an upfront payment of $500,000.00 within [30] business days after the Effective Date and an additional $500,000.00 within 60 days after the effective date .
Section 4.2 Purchase of Equipment .
(a) Reactors . The Licensee shall purchase two (2) production reactors used for the production of Licensed Products for an aggregate purchase price of $ [**Confidential Treatment Requested] , payable as follows:
(i) $ [**Confidential Treatment Requested] shall be payable within 60 business days after the Effective Date;
(ii) $ [**Confidential Treatment Requested] shall be payable immediately upon delivery to the licensees designated freight forwarder; and
(iii) $ [**Confidential Treatment Requested] shall be payable when the reactors are received, setup and operational, as determined by the Licensor.
[**Confidential Treatment Requested] indicates that portions of this document have been redacted and filed separately with the Securities and Exchange Commission.
(b) Schlenk Line Equipment . The Licensee shall purchase the automated equipment for two (2) Schlenk lines from the Licensor for an aggregate purchase price of $ [**Confidential Treatment Requested] , payable 50% with order and 40% upon delivery to licensees designated freight forwarder and balance once equipment is received, setup and operational as determined by Licensor.
(c) Inline Equipment . The Licensee shall purchase the inline laminating, printing and associated equipment from the Licensor for an aggregate purchase price of $ [**Confidential Treatment Requested] , payable 50% with order and 40% upon delivery to licensees designated freight forwarder and balance once equipment is received, setup and operational as determined by Licensor.
(d) Other Equipment . The Licensee shall purchase related to the License and Licensed Products exclusively from the Licensor at the Licensor’s then-prevailing prices and terms.
Section 4.3 Consulting and Training .
(a) Training . For a period of 36 following the Effective Date, the Licensor shall provide training to the Licensee’s employees and contractors in connection with the manufacturing of the Licensed Products, as the mutually agreed by the Parties, as mutually agreed between the Parties. The fees for such consulting services will be billed at the Licensor’s then-prevailing hourly rates for such services. As of the date of this Agreement, it is anticipated that the average rate for such services will be approximately $ [**Confidential Treatment Requested] per hour, which may vary depending on the nature of the training, the experience and specialized expertise of the personnel performing such training and other economic factors at such time. Amounts payable in respect of services under this Section 4.3(a) shall be invoiced to the Licensee monthly in arrears and paid to the Licensor, as directed by the Licensor, which amounts shall be due within thirty (30) days after the date of invoice.
(b) Consulting .
(i) Facility Design . The Licensee shall pay an aggregate amount of approximately $ [**Confidential Treatment Requested] in connection with the Licensor’s consulting services related to the design of the Manufacturing facility, payable under terms and conditions to be negotiated.
(ii) Other Consulting . For a period of 5 years following the Effective Date, the Licensor agrees to provide consulting services for the implementation and operation of the items set forth in Section 4.2 and the Manufacturing of Licensed Products, as mutually agreed between the Parties. The fees for such consulting services will be billed at the Licensor’s then-prevailing hourly rates for such services. As of the date of this Agreement, it is anticipated that the average rate for such services will be approximately $ [**Confidential Treatment Requested] per hour, which may vary depending on the nature of the services, the experience and specialized expertise of the consultant performing such services and other economic factors at such time. Amounts payable in respect of services under this Section 4.3(b) shall be invoiced to the Licensee monthly in arrears and paid to the Licensor, as directed by the Licensor, which amounts shall be due within thirty (30) days after the date of invoice.
[**Confidential Treatment Requested] indicates that portions of this document have been redacted and filed separately with the Securities and Exchange Commission.
Section 4.4 Royalty .
(a) Royalty Amounts . Subject to the terms and conditions of this Agreement, in consideration of the rights and licenses granted herein, the Licensee shall pay to the Licensor a royalty equal to [**Confidential Treatment Requested] percent ( [**Confidential Treatment Requested] %) of Gross Sales (collectively, the “ Royalty ”).
(b) Payment Timing . The Royalty shall be paid quarterly (the “ Royalty Period ”), within ten (10) days after the end of the relevant calendar quarter for which royalties are due.
(c) Royalty Payment Reports . With respect to each Royalty Period, at the time(s) when the payments of Section 4.4(b) are due, the Licensee shall provide to the Licensor a written report stating the number and description of all items sold during the Royalty Period, the Gross Sales associated with such sales, and the calculation of Gross Sales on such sales. The report shall provide all such information on a country-by-country and product-by-product basis.
(d) Records . The Licensee shall keep, for a period of six (6) years following the end of the calendar year to which such records relate, and ensure that its Affiliates keep, complete and accurate records of its sales to which Royalties may apply, including all records that may be necessary for the purposes of calculating all payments due under this Agreement. The Licensee shall make such records available for inspection to the Licensor, including the Licensor’s accounting, financial and legal representatives, at the Licensee’s premises on reasonable notice during regular business hours.
(e) Audit. No more than once per calendar year, the Licensor shall have the right to retain an independent certified public accountant to perform on behalf of the Licensor an audit of such books and records of the Licensee and its Affiliates as are necessary (in the reasonable opinion of the auditor) to verify Gross Sales for the period or periods requested by the Licensor and the accuracy of any report or payments made under this Agreement. If an audit reveals an underpayment, the Licensee shall promptly pay to the Licensor the amount of such undisputed underpayment [plus interest] in accordance with Section 4.4(a) . If the audit reveals that the undisputed monies owed by the Licensee to the Licensor has been understated by more than fifteen percent (15%) for any calendar year, the Licensee shall, in addition, pay the reasonable costs of such audit.]
(f) Licensee/Sublicensee Reports, Records and Audits . If the Licensee grants any licenses or sublicenses with respect to the Licensed Products or Licensed Technology, the agreements, certificates, documents and other instruments for such licenses and sublicenses shall include an obligation for the sublicensee to (i) provide reports with sufficient information to allow such verification in accordance with Section 4.4(c) ; (ii) maintain, for a period of six (6) years following the end of the calendar year to which such records relate, records adequate to document and verify the proper payments to be paid to the Licensor hereunder in accordance with Section 4.4(d) ; and (iii) allow the Licensor (or the Licensee if requested by the Licensor) to verify the payments due in accordance with Section 4.4(e) .
Section 4.5 Expenses . The Licensor shall pay or reimburse all reasonable travel and other related costs, expenses and fees incurred by the Licensor arising from, in connection with, or related to the commissioning and supervision activities relating to this Agreement, the MOU and the other agreements, certificates, documents and other instruments related thereto.
Annual minimum royalties will commence on January 15, 2021 and will be as follows:
January 15th , 2021 Minimum royalty = $[**Confidential Treatment Requested]
January 15th , 2022 Minimum royalty = $[**Confidential Treatment Requested]
January 15th , 2023 Minimum royalty = $[**Confidential Treatment Requested]
January 15th , 2024 Minimum royalty = $[**Confidential Treatment Requested]
January 15th , 2025 Minimum royalty = $[**Confidential Treatment Requested]
Since robust sales are anticipated from 2025 forward annual minimum royalties will likely no longer be relevant. In the event this is not the case annual minimum royalties of $[**Confidential Treatment Requested] will be used as default to perpetuity.
[**Confidential Treatment Requested] indicates that portions of this document have been redacted and filed separately with the Securities and Exchange Commission.
ARTICLE IV
FINANCIAL TERMS
Section 4.1 Upfront Fee . The Licensee shall pay the Licensor an upfront payment of $500,000.00 within [30] business days after the Effective Date and an additional $500,000.00 within 60 days after the effective date .
Section 4.2 Purchase of Equipment .
(a) Reactors . The Licensee shall purchase two (2) production reactors used for the production of Licensed Products for an aggregate purchase price of $ [**Confidential Treatment Requested] , payable as follows:
(i) $ [**Confidential Treatment Requested] shall be payable within 60 business days after the Effective Date;
(ii) $ [**Confidential Treatment Requested] shall be payable immediately upon delivery to the licensees designated freight forwarder; and
(iii) $ [**Confidential Treatment Requested] shall be payable when the reactors are received, setup and operational, as determined by the Licensor.
[**Confidential Treatment Requested] indicates that portions of this document have been redacted and filed separately with the Securities and Exchange Commission.
(b) Schlenk Line Equipment . The Licensee shall purchase the automated equipment for two (2) Schlenk lines from the Licensor for an aggregate purchase price of $ [**Confidential Treatment Requested] , payable 50% with order and 40% upon delivery to licensees designated freight forwarder and balance once equipment is received, setup and operational as determined by Licensor.
(c) Inline Equipment . The Licensee shall purchase the inline laminating, printing and associated equipment from the Licensor for an aggregate purchase price of $ [**Confidential Treatment Requested] , payable 50% with order and 40% upon delivery to licensees designated freight forwarder and balance once equipment is received, setup and operational as determined by Licensor.
(d) Other Equipment . The Licensee shall purchase related to the License and Licensed Products exclusively from the Licensor at the Licensor’s then-prevailing prices and terms.
Section 4.3 Consulting and Training .
(a) Training . For a period of 36 following the Effective Date, the Licensor shall provide training to the Licensee’s employees and contractors in connection with the manufacturing of the Licensed Products, as the mutually agreed by the Parties, as mutually agreed between the Parties. The fees for such consulting services will be billed at the Licensor’s then-prevailing hourly rates for such services. As of the date of this Agreement, it is anticipated that the average rate for such services will be approximately $ [**Confidential Treatment Requested] per hour, which may vary depending on the nature of the training, the experience and specialized expertise of the personnel performing such training and other economic factors at such time. Amounts payable in respect of services under this Section 4.3(a) shall be invoiced to the Licensee monthly in arrears and paid to the Licensor, as directed by the Licensor, which amounts shall be due within thirty (30) days after the date of invoice.
(b) Consulting .
(i) Facility Design . The Licensee shall pay an aggregate amount of approximately $ [**Confidential Treatment Requested] in connection with the Licensor’s consulting services related to the design of the Manufacturing facility, payable under terms and conditions to be negotiated.
(ii) Other Consulting . For a period of 5 years following the Effective Date, the Licensor agrees to provide consulting services for the implementation and operation of the items set forth in Section 4.2 and the Manufacturing of Licensed Products, as mutually agreed between the Parties. The fees for such consulting services will be billed at the Licensor’s then-prevailing hourly rates for such services. As of the date of this Agreement, it is anticipated that the average rate for such services will be approximately $ [**Confidential Treatment Requested] per hour, which may vary depending on the nature of the services, the experience and specialized expertise of the consultant performing such services and other economic factors at such time. Amounts payable in respect of services under this Section 4.3(b) shall be invoiced to the Licensee monthly in arrears and paid to the Licensor, as directed by the Licensor, which amounts shall be due within thirty (30) days after the date of invoice.
[**Confidential Treatment Requested] indicates that portions of this document have been redacted and filed separately with the Securities and Exchange Commission.
Section 4.4 Royalty .
(a) Royalty Amounts . Subject to the terms and conditions of this Agreement, in consideration of the rights and licenses granted herein, the Licensee shall pay to the Licensor a royalty equal to [**Confidential Treatment Requested] percent ( [**Confidential Treatment Requested] %) of Gross Sales (collectively, the “ Royalty ”).
(b) Payment Timing . The Royalty shall be paid quarterly (the “ Royalty Period ”), within ten (10) days after the end of the relevant calendar quarter for which royalties are due.
(c) Royalty Payment Reports . With respect to each Royalty Period, at the time(s) when the payments of Section 4.4(b) are due, the Licensee shall provide to the Licensor a written report stating the number and description of all items sold during the Royalty Period, the Gross Sales associated with such sales, and the calculation of Gross Sales on such sales. The report shall provide all such information on a country-by-country and product-by-product basis.
(d) Records . The Licensee shall keep, for a period of six (6) years following the end of the calendar year to which such records relate, and ensure that its Affiliates keep, complete and accurate records of its sales to which Royalties may apply, including all records that may be necessary for the purposes of calculating all payments due under this Agreement. The Licensee shall make such records available for inspection to the Licensor, including the Licensor’s accounting, financial and legal representatives, at the Licensee’s premises on reasonable notice during regular business hours.
(e) Audit. No more than once per calendar year, the Licensor shall have the right to retain an independent certified public accountant to perform on behalf of the Licensor an audit of such books and records of the Licensee and its Affiliates as are necessary (in the reasonable opinion of the auditor) to verify Gross Sales for the period or periods requested by the Licensor and the accuracy of any report or payments made under this Agreement. If an audit reveals an underpayment, the Licensee shall promptly pay to the Licensor the amount of such undisputed underpayment [plus interest] in accordance with Section 4.4(a) . If the audit reveals that the undisputed monies owed by the Licensee to the Licensor has been understated by more than fifteen percent (15%) for any calendar year, the Licensee shall, in addition, pay the reasonable costs of such audit.]
(f) Licensee/Sublicensee Reports, Records and Audits . If the Licensee grants any licenses or sublicenses with respect to the Licensed Products or Licensed Technology, the agreements, certificates, documents and other instruments for such licenses and sublicenses shall include an obligation for the sublicensee to (i) provide reports with sufficient information to allow such verification in accordance with Section 4.4(c) ; (ii) maintain, for a period of six (6) years following the end of the calendar year to which such records relate, records adequate to document and verify the proper payments to be paid to the Licensor hereunder in accordance with Section 4.4(d) ; and (iii) allow the Licensor (or the Licensee if requested by the Licensor) to verify the payments due in accordance with Section 4.4(e) .
Section 4.5 Expenses . The Licensor shall pay or reimburse all reasonable travel and other related costs, expenses and fees incurred by the Licensor arising from, in connection with, or related to the commissioning and supervision activities relating to this Agreement, the MOU and the other agreements, certificates, documents and other instruments related thereto.
Annual minimum royalties will commence on January 15, 2021 and will be as follows:
January 15th , 2021 Minimum royalty = $[**Confidential Treatment Requested]
January 15th , 2022 Minimum royalty = $[**Confidential Treatment Requested]
January 15th , 2023 Minimum royalty = $[**Confidential Treatment Requested]
January 15th , 2024 Minimum royalty = $[**Confidential Treatment Requested]
January 15th , 2025 Minimum royalty = $[**Confidential Treatment Requested]
Since robust sales are anticipated from 2025 forward annual minimum royalties will likely no longer be relevant. In the event this is not the case annual minimum royalties of $[**Confidential Treatment Requested] will be used as default to perpetuity.
[**Confidential Treatment Requested] indicates that portions of this document have been redacted and filed separately with the Securities and Exchange Commission.
