Provision Language
Definitions
“Net Sales” means the total amount invoiced or otherwise charged by Bayer or Bayer Affiliates or sublicensees, as applicable, on account of the sale of a Product to a Third Party customer, less [***] deduction representing a fixed rate for the following items: (a) credits, allowances, discounts and rebates to, and chargebacks from the account of, such Third Party for spoiled, damaged, out-dated and returned Product; (b) actual freight and insurance costs incurred in transporting such Product; (c) sales, value-added and other direct taxes incurred; and (d) customs duties, surcharges and other governmental charges incurred in connection with the exportation or importation of such Product.
5. Payments
5.1 Technology Access Payment. Bayer shall pay to SentiSearch an amount of US$ 500,000 (five hundred thousand dollars) upon receipt of an invoice after the Effective Date as partial compensation of SentiSearch’s acquisition of SentiSearch Know-How and SentiSearch Patents, provided that it is guaranteed in writing by FNIH before the date of signature of the Agreement that Bayer receives the FNIH funding.
5.2 Further Payments. Bayer shall pay to SentiSearch the following amounts upon receipt of a respective invoice:
(a) US$ 250,000 (two hundred fifty thousand dollars) due on January 1st, 2012 provided the term of this Agreement has not expired or this Agreement has not been terminated pursuant to Section 11 at said due date;
(b) [***]
(c) [***]
(d) US$ 15,000 (fifteen thousand dollars) per year until this Agreement expires or is terminated pursuant to Section 11 as compensation for SentiSearch’s expenditures in connection with SentiSearch Patents filed prior to the Effective date.
5.3 Premium Fee Payments.
(a) Products. Bayer shall pay to SentiSearch a running premium fee of [***] of the aggregate Net Sales of Products containing any Collaboration Compound, in addition to amounts payable above in case Bayer’s decision to enter into Phase 3 of development of such Collaboration Compound for use in a Product or Combination Product (as defined below) was made within [***] after delivery of the Screening Assay to Bayer. If Bayer’s decision to enter into Phase 3 of development of a certain Collaboration Compound for use in a Product or Combination Product (as defined below) was made later than [***] after delivery of the Screening Assay to Bayer, Bayer shall pay to SentiSearch a running premium fee of [***] of the aggregate Net Sales of Products containing such Collaboration Compound. Bayer shall be obligated to pay the foregoing premium payments so long as Bayer’s decision to enter into Phase 3 development of the Collaboration Compound for use in the Product or Combination Product (as defined below) with respect to which such premium payment is being made was made no later than two (2) years after expiry of the relevant SentiSearch Patent conferring patent protection in Germany. Bayer’s obligations to pay royalties will expire on a country-by-country basis [***] after the first commercial sale of a Product in that country.
(b) Combination Products. If a Product contains one or more Collaboration Compounds combined with one or more other active ingredients (a “Combination Product“), then Net Sales of such Combination Product for premium fee purposes under Section 5.3(a) shall be calculated as follows: the Net Sales of the Combination Product shall be calculated in accordance with the definition of Net Sales under Section 1.17, and then such Net Sales shall be adjusted on a country-by-country basis as follows: [***].
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5.8 Relationship to Licenses. The premium fee payments provided for herein are in consideration of the various services, covenants, allocation’s of rights, and grants of licenses set forth in this Agreement. Such premium fee payments shall be paid regardless of whether SentiSearch then possesses intellectual property which covers the Product which is the subject of the premium fee payment, and similarly, such payments shall expire at the end of the term set forth in Section 5.3(a), even if SentiSearch continues to hold intellectual property which covers such Product.