Provision Language
Definitions
“Net Sales” shall mean the net sales recorded by Licensee or any of its Affiliates (excluding, for clarity, any distributors or wholesalers) for any Product sold to Third Parties as determined in accordance with Licensee’s Accounting Standards as consistently applied. The deductions booked on an accrual basis by Licensee and its Affiliates under its Accounting Standards to calculate the recorded net sales from gross sales include the following:
i. normal trade and cash discounts;
ii. amounts repaid or credited by reasons of defects, rejections, recalls or returns;
iii. delayed ship order credits, discounts or payments related to the impact of price increases between purchase and shipping dates or retroactive price reductions;
iv. fee for service payments to customers for any non-separable services (including compensation for maintaining agreed inventory levels and providing information); and
v. other reductions or specifically identifiable amounts deducted for reasons similar to those listed above in accordance with Licensee’s Accounting Standards.
With respect to the calculation of Net Sales:
(a) Net Sales only include the value charged or invoiced on the first arm’s length sale to a Third Party. Sales between or among Licensee and its Affiliates shall be disregarded for purposes of calculating Net Sales;
(b) If a Product is delivered to the Third Party before being invoiced (or is not invoiced), Net Sales will be calculated at the time all the revenue recognition criteria under Licensee’s Accounting Standards are met;
“Patent Territory” shall mean all those countries as are set out in Appendix A2 hereto.
Novartis – MPP Agreement
2. Grant of Licence
[…]
2.1 Subject to the terms and conditions of this Agreement, Novartis hereby grants to MPP (a) a non-exclusive, royalty-free, non-transferable, non-sublicensable (except to Sublicensees) licence under the Manufacturing Patent and Patents to enter into Sublicences with Sublicensees to make, have made, export or import the Raw Materials and the Products in the Manufacturing Territory exclusively for Sublicensee’s use, offer for sale, sale, or import of the Product in the Field in the Territory, and (b) a non-exclusive, royalty-bearing, nonsublicensable (except to Sublicensees), non-transferable licence under the Patents to enter into Sublicences with Sublicensees exclusively for Sublicensee’s use, offer for sale, sale, export, or import of the Product in the Field in the Patent Territory, as set out in the Sublicence as attached as Schedule 1 of this Agreement. MPP shall request from each Sublicensee the royalties (as defined in the Sublicence Agreement) to be paid in accordance with the requirements of applicable Sublicence Agreement. Royalties shall be paid for the Patent Territory only, and such royalties shall be re-invested into the ATOM coalition, as described in further details in the ATOM coalition frame agreement.
Form of Sublicense
9. FINANCIAL PROVISIONS
9.1 In consideration of the licenses and rights granted to Licensee hereunder, during the applicable Royalty Term, Licensee will make royalty payments to ATOM recipient of five percent (5%) of aggregate Net Sales of Products in each Calendar Year in the Patent Territory by Licensee or its Affiliates.
9.2 Royalties will be payable on a Product-by-Product and country-by-country basis within the Patent Territory from First Commercial Sale of such Product in such country until the earlier of termination of this Agreement according to clause 13.2 or the expiration of the last to expire Patent which covers such Product in such country (“Royalty Term”). For the avoidance of doubt, royalties shall be payable only once with respect to the same unit of Product.
9.3 Royalties shall be reported pursuant to the terms of Clause 3.1A of this Agreement.
9.4 Payment Terms. The royalties shall be paid by the Licensee to a designated nominee of the ATOM coalition in accordance with this Agreement within 30 calendar days from receiving an invoice from MPP in respect of the royalties due for each Agreement Quarter, based on the report produced by Licensee pursuant to Clause 3.1A.
