Provision Language
Definitions
“Net Sales Value” means gross sale price of the Licensee or its Affiliates (or any person acting on their behalf) to their customers multiplied by the number of units sold less value of the sales taxes, returned/rejected products, costs of clearing and forwarding, freight and insurance charges.
Schedule 2 – Form of Sublicense
9. ROYALTIES
9.1 In consideration for the grant of the licence set out in Clause 3.1 in relation to the Royalty Countries, the Licensee agrees to pay to ViiV (or to such other person as ViiV may nominate in writing) the applicable royalty fee set out in Appendix B for all Licensed Product sold or otherwise supplied for use in such Royalty Countries subject to, and in accordance with, this Clause 9.
9.2 The Licensee shall pay the royalty fee due under this Clause 9 in relation to each Royalty Country quarterly, for as long as the Licensed Product falls within the scope of a Patent Right in such Royalty Country.
9.3 In the event that a transaction contemplated by this Clause 9 is not conducted on an arm’s length basis, then for the purposes of calculating the royalty fee for such a transaction, the Net Sales Value shall be deemed to be what it would have been had the transaction been conducted on an arm’s length basis (irrespective of the actual Net Sales Value for that transaction).
9.4 Licensee shall provide its calculation of the royalty fee payable pursuant to this Clause 9 (if any) for each Agreement Quarter in the relevant written report under Clause 8.1.2.
9.5 If upon examination of a royalty fee calculation provided by the Licensee, the Licensor (or its nominee) disagrees with such calculation, it shall promptly notify the Licensee of the same. The Parties shall endeavour to resolve any disagreement as quickly as possible, and in any event at the next scheduled Quarterly Meeting. If the Parties cannot reach consensus, the matter shall be resolved in accordance with Clause 34.
9.6 The Licensor shall supply the Licensee with an invoice from ViiV in US dollars each Agreement Quarter for any royalty fee payable for the Agreement Quarter immediately preceding such Agreement Quarter. Each invoice shall be issued as soon as reasonably practical following receipt by Licensor of the report under Clause 8.1.2 for the relevant Agreement Quarter, and in any event within thirty (30) Business Days of such receipt. The Licensee shall, on or before the thirtieth (30th) calendar day following the date of each invoice issued by ViiV, pay to ViiV (or to such other person as ViiV may nominate in writing) the amount due under that invoice.
9.7 In the event of any delay in the Licensee paying to ViiV (or ViiV’s nominee) any sum due under this Clause 9 on the relevant due date, the Licensee shall pay to ViiV (or ViiV’s nominee) interest (calculated on a daily basis) on the overdue payment from the date such payment was overdue to the date of actual payment at the annual rate of 2% above the Bank of England base rate on the due date of payment (or on the next Business Day if the due date is not a Business Day), on a daily basis using a three hundred and sixty-five (365) day year and such annual rate, compounded monthly.
9.8 If an examination pursuant to Clause 19 reveals an underpayment by the Licensee, the Licensee shall promptly, and in any event on or before the thirtieth (30th) calendar day following the date of an invoice issued by ViiV for such shortfall, pay to ViiV (or ViiV’s nominee) the amount of such shortfall (including any interest payable pursuant to Clause 9.7) together with all costs incurred by ViiV and/or the Licensor in carrying out the examination.
9.9 Without prejudice to Clause 9.8, if at any point the Licensee becomes aware of it having made an underpayment, it shall promptly, and in any event within ten (10) days of it becoming so aware notify Licensor of the same, providing its calculations in accordance with Clause 9.4. The Licensee shall promptly, and in any event on or before the thirtieth (30th) calendar day following the date of an invoice issued by ViiV for such shortfall pay to ViiV (or ViiV’s nominee) the amount of such shortfall (including any interest payable pursuant to Clause 9.7).
9.10 All amounts payable pursuant to this Agreement shall paid in US Dollars (or such other currency as may be agreed) and shall be made in full without any set-off or counterclaim, except for any withholding or deduction of, or in respect of, any tax, levy, impost, duty, charge or fee required by law. If any such withholding or deduction is required by law, the Licensee shall, when making the payment to which the withholding or deduction relates, pay to ViiV (or to such other person as ViiV may nominate in writing) the net amount and provide a certificate equivalent to the amount withheld. The amount due in US dollars under each invoice issued by ViiV shall be calculated using the three (3) month average of the exchange rates published by Bloomberg for the three (3) months ending on the last Business Day of the relevant Agreement Quarter. The Licensee shall make such payments by way of telegraphic transfer to such bank account as ViiV shall nominate.
