Provision Language
ARTICLE 3. FEES, ROYALTIES, & PAYMENTS
3.1 License Fee. Company agrees to pay to JHU the license fee set forth in Exhibit F payable in two equal installments as follows: (i) within [ * ] days following execution of this Agreement and (ii) on the first anniversary of the Effective Date of this Agreement, assuming that the Technology Transfer has been completed to the reasonable satisfaction of the Company, including, without limitation, the transfer to Company of all Cell Lines Company has reasonably requested.
3.2 Milestones License Fees. Company will pay to JHU milestone payments for the Licensed Products developed by Company, its Affiliates, and/or Sublicensees within [ * ] days of achieving the milestones listed in Exhibit F.
3.3 Minimum Annual Royalties. Company will pay the minimum annual royalties (“Minimum Annual Royalties“) as set forth in Exhibit F. These Minimum Annual Royalties shall be due within [ * ] days of each anniversary of the Effective Date beginning with the second anniversary of the Effective Date (running royalties accrued and paid to JHU during the one-year period preceding an anniversary of the relevant Effective Date of this Agreement shall be credited against the Minimum Annual Royalties due on that anniversary date). The amount of all Minimum Annual Royalties paid for any year in excess of the actual running royalties for such year shall be carried forward and credited against running royalties owed in future years.
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3.4 Running Royalties. Company shall pay to JHU a running royalty as set forth in Exhibit F for each Licensed Product sold and for each Licensed Service provided by Company, its Affiliates and Sublicensee(s) based on Net Sales Revenues and Net Service Revenues for the term of this Agreement. Running royalty payments shall be made quarterly within [ * ] days of the end of the calendar quarter. The royalty rate shall be reduced by [ * ] in the event there is no Valid Claim of the Licensed Patent Rights in the relevant country covering the Licensed Product or Licensed Service, as the case may be.
3.5 Royalty Offset. In the event that a license to third party intellectual property is required in order to make, have made, use, have used, import, have imported, offer for sale, sell and have sold a Licensed Product or Licensed Service, the royalty rate shall be abatable by up to [ * ] of the consideration payable to the third party (i.e. up to [ * ]), provided that the applicable running royalty payable to JHU shall not drop below [ * ] of the running royalty herein calculated before the abatement.
3.6 One Royalty/One Set of Milestones. In no event shall a Licensed Product or Licensed Service require the payment of two royalties and/or two sets of milestones by Company under the agreements listed below between the Parties. For clarity, this provision applies to amounts that may be owed by Company hereunder and also under that certain Restated and Amended License Agreement between JHU and BioSante Pharmaceuticals, Inc., dated as of March 3, 2011, which amends and restates in the entirety that certain License Agreement between JHU and Cell Genesys, Inc. (“Cell Genesys“) dated as of June 15, 2000, as amended by a First Amendment to the License Agreement dated as of March 27, 2008, that certain License Agreement between JHU and Cell Genesys, Inc., dated March 12, 2001, as amended by a First Amendment to the License Agreement dated as of March 27, 2008, and that certain License Agreement between JHU and Cell Genesys, Inc., dated October 1, 1999, as amended by a First Amendment to the License Agreement dated as of August 30, 2003 (the “JHU Agreements“). If there is an overlap in payment obligations on a single Licensed Product or Licensed Service under the agreements listed herein, the higher royalty rate or the larger set of milestones (when taken in the aggregate) shall be the amount payable by Company. In addition, Company shall not be required to pay any milestones already paid prior to the date hereof, or pay milestones twice for a single indication or Licensed Product. JHU has not received any written notice that would indicate that any milestones are currently due or due and payable under any of the foregoing agreements.
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3.8 Sublicense Consideration. In addition to the running royalty as set forth under Section 3.4, Company shall pay to JHU the agreed percentage set forth below of the cash value of compensation received by Company from a third party in consideration of the grant of a sublicense to such third party of the rights granted by JHU to Company under this Agreement, including all relevant sublicensing licensing fees, milestone payments, and equity investments in Company or its Affiliate(s) to the extent such investments exceed [ * ] of Fair Market Value (as defined herein below), provided that the following are specifically excluded from this provision: running royalties, loans, debt financing, equity investments at or below [ * ] of Fair Market Value (as defined herein below), payments or other consideration or reimbursement for services, research or development, sales and/or marketing activities, and reimbursement for patent costs or milestones payable to JHU under this Agreement (“Sublicense Income“). As documentation, Company will provide to JHU all relevant information in its possession to the extent reasonably required to confirm amounts payable hereunder in respect of Sublicense Income and which is not the confidential information of a third party, including, but not limited to, copies of research contracts or other contracts with a performance plan and commensurate budget for research, development, sales and/or marketing activities to be performed by Company, providing that the absence of such information shall not preclude exclusion from Sublicense Income.
(i) [ * ] if [ * ];
(ii) [ * ] if [ * ]; and
(iii) For [ * ], [ * ].
In the event that equity in lieu of cash or other consideration is received by Company in return for granting a sublicense, Company shall either arrange for JHU’s share of such equity to be issued directly to JHU and in the name of “The Johns Hopkins University” or Company shall pay in cash to JHU the Fair Market Value, as defined below, of JHU’s share of such equity. The term “Fair Market Value” shall mean (i) if the stock is publicly traded, the average price that the stock in question is publicly trading at for [ * ] days prior to the announcement of the sublicense agreement, or (ii) if the stock is not publicly traded, the value of such stock as determined in its most recent round of financing.
Notwithstanding anything to the contrary in this Agreement or any JHU Agreement, if (i) Company sublicenses to a third party intellectual property rights licensed to Company by JHU pursuant to multiple agreements and (ii) in two or more of such agreements with JHU, Company has agreed to pay to JHU a percentage of sublicense income (as defined in each such agreement) that Company receives from Sublicensees, then the relevant percentages of sublicense income shall not be aggregated and applied to all sublicense income. Instead Company shall calculate the sublicense income payable to JHU under each relevant agreement based on Company’s reasonable estimate of the value allocable to each set of sublicensed rights, when considered in light of the entire transaction and all other relevant factors.