Provision Language
5. Financial Terms
5.1 No Payment by the Gates MRI. In furtherance of Global Access, the licenses and other rights granted to the Gates MRI hereunder are royalty-free and no payments will be owed to Atreca by the Gates MRI or its Affiliates, sublicensees, or contractors hereunder or otherwise on account of the Development, Manufacture, and Commercialization of Licensed Products in the Licensed Field in the Territory.
5.2 Commercial License Royalties and Fees. If Atreca exercises the Commercial License, and in exchange for the rights granted pursuant thereto, Atreca will pay to the Gates MRI the following amounts:
(a) Royalties. Atreca shall pay the Gates MRI a running royalty of [***] percent ([***]%) of Net Sales of Licensed Products Developed or Manufactured using the Gates MRI Shared Data (each, a “Royalty Product“) during the Royalty Term.
(i) “Net Sales” means all amounts received, in whatever form, by Atreca, its Affiliates or Atreca Sublicensees (excluding distributors) from third party purchasers for the sale of Royalty Products, less the following deductions to the extent actually incurred or received []. If a single amount falls into more than one of the categories set forth in clauses [] in the foregoing, such amount may not be deducted more than once. Notwithstanding the foregoing, Net Sales shall not include (A) amounts for Royalty Products distributed by Atreca or its Affiliates or Atreca Sublicensees for use in research or clinical trials, or (B) sales of Royalty Products at or below Atreca’s or its Affiliates’ or Atreca Sublicensees’ cost of manufacturing such Royalty Products for any patient access programs, compassionate use or named patient sales. If a Royalty Product is sold in the form of a combination product containing both a Royalty Product and one or more separate active ingredient that is not a Royalty Product (a “Combination Product“), the Net Sales of such Royalty Product shall be determined as follows: first, the actual Net Sales of such Combination Product shall be determined using the above provisions; then such amount shall be [***]. If the Royalty Product in such Combination Product is sold separately but any other active ingredient in such Combination Product is not sold separately, Net Sales shall be [***]. If the Royalty Product in such Combination Product is not sold separately but the other active ingredient in such Combination Product is sold separately, Net Sales shall be [***]. If neither such Royalty Product nor any other active ingredient in such Combination Product is sold separately, the adjustment to Net Sales shall be [***] to fairly reflect the relative value of the Royalty Product and the other active ingredient in the Combination Product.
(ii) “Royalty Term” means, on a Royalty Product-by-Royalty Product basis, the period of time starting on the date of the first commercial sale of such Royalty Product and continuing until the expiration of [***] years from the first commercial sale of such Royalty Product.
(b) Sublicense Revenue. [***] percent ([***]%) of all Sublicense Revenue. “Sublicense Revenue” means all consideration received, in whatever form (including []), by Atreca or its Affiliates from Atreca Sublicensees in consideration for the grant to an Atreca Sublicensee of any right to use any Gates MRI Shared Data to such Atreca Sublicensees for the Development and Commercialization of Royalty Products outside the Territory; provided that if the agreement with such Atreca Sublicensee also includes a grant of a license or other rights under [***] (other than any Intellectual Property Rights in the Atreca Antibodies or [***]), the total consideration shall be allocated by [***] based on a [***] of the fair market value, between the [], on the one hand, and such [***], on the other hand, in order to determine the amount of such consideration that is subject to a Sublicense Revenue payment obligation under this Section 5.2(b). For clarity, Sublicense Revenue does not include [***].
(c) Reports; Payment Terms. No later than [***] days after the end of each calendar quarter, Atreca will provide to the Gates MRI a detailed report setting forth the calculation of amounts owed under this Section 5.2 for such calendar quarter and the basis for such calculation, which report will be signed by an authorized representative of Atreca. Each such report will be accompanied by the payment of the amounts owed for the applicable reporting period. For the avoidance of doubt, calendar quarters will end on the last day of March, June, September, and December of each calendar year.
5.3 CMC Technology Transfer Fees. In exchange for the CMC Technology Transfer, Atreca will pay to the Gates MRI [***] incurred by the Gates MRI or its Affiliates or contract manufacturer in connection with the CMC Technology Transfer. Details regarding such costs and the payment terms therefor will be mutually agreed to in writing and set forth in the CMC Technology Transfer plan.