Considerations or Royalty
Example (1): Royalties and Payments
1.In consideration for the grant of this license, Licensee shall pay to Licensor a royalty on the following basis:
a) Either … % of the end user price of the Products and all Licensor accounting packages sold to end users, or
b) … % of the price of the Products and all Licensor accounting packages sold to dealers.
2.Licensee shall calculate royalties every three (3) months and remit them to Licensor within … days after the end of said three (3) month period, accompanied by the accounting statement showing the calculation and aggregate amount of royalties.
Example (2): Considerations
1.In consideration of the grant of a right and license, disclosure of Technical and technical assistance by ABC under the Articles … and … of this Agreement, XYZ shall pay to ABC;
(a) An initial payment: …United States Dollars ($) payable within … (…) days after the Effective Date.
(b) A running royalty: …percent (%) of the Net Selling
Price of the Licensed Products sold, used or otherwise disposed of by XYZ. The running royalties shall be paid semiannually within sixty (60) days from the end of each fiscal half year of XYZ.
2.The amount of any withholding tax levied on any payment to be made by XYZ to ABC hereunder shall be borne by ABC. XYZ shall withhold the tax from such payment and pay it to the appropriate government authority. XYZ shall, thereafter, send ABC the official certificate of tax payment.
3.XYZ shall keep full and adequate records and books of account, showing all TECHNICAL necessary for the accurate determination of royalty payments hereunder for the preceding five years. XYZ shall, during the reasonable business hours, permit ABC or Its representatives to inspect any or all parts of the records and books of account kept by XYZ hereunder.
Example (3): Royalty
1.In consideration of the license and the technical assistance provided herein, Licensee shall pay to Licensor the license fee of…, Which shall be payable within…days after the execution of this Agreement.
2.Licensee shall further pay to Licensor, during the term of this Agreement and any renewal term thereof, …percent (…%) against Net Selling Price of Products sold, used, assigned, exhibited or donated hereunder.
3.If the running royalty payable by Licensee to Licensor in respect of Products sold by Licensee shall not amount to… in each year commencing with the 2nd year during the life of this Agreement, Licensee shall pay to Licensor within …days from the expiration of each such year such a sum as the aggregate of the running royalty paid or payable to Licensor for such year shall be equal to the amount of … for such year with- out any deductions whatsoever.
Example (4): Compensations
In consideration of the license and all other rights granted to Licensee hereunder, Licensee pay to Licensor, during the life of this
Agreement, the compensations as follows:
a) Within (…) days after the Effective Date of this Agreement, Licensee shall pay to Licensor the sum of (…) as an initial license fee.
b) In addition to the initial license fee provide in paragraph a) above, Licensee shall pay to Licensor the guaranteed minimum royalty for each annual period as follows:
US$ (…) for the first Annual Period (…) ……… (…);
US$ (…) for the second Annual Period ( ) ……….(…);
US$ (…) for the third Annual Period (…) ……(…);
US$ (…) for the fourth Annual Period (…) ……… (…) and each succeeding year.
The said guaranteed minimum royalty shall be paid in (…) equal quarterly installments on the (…) day of each (…), (…), (…), (…) and (…) during the life of this Agreement.
c) In addition to the guaranteed minimum royalty provided in paragraph b) above, Licensee shall further pay to Licensor a percentage royalty computed at the rate of (…) percent (%) of the Net Sales of the Licensed Product sold by Licensee In Territory In excess of the following base figures for each Annual Period: :
US$ (…) for the first Annual Period (…)… (…);
US$ (…) for the second Annual Period (…) …….(…);
US$ (…) for the third Annual Period (…) ……… (…);
US$ (…) for the fourth Annual Period (…) … (…) and each succeeding year.
The said percentage royalty, if any, shall be paid in (…) on the day of (…) of each year during the life of this Agreement.
d) Notwithstanding provisions set forth in paragraphs b) and c) above, each amount of the minimum guaranteed royalty and the rate of the percentage royalty set forth in such Paragraphs shall be deducted by one half thereof in case all Patents covering the Licensed Products should become invalid for any reason or be expired in the Territory.
e) The sum thus due by Licensee to Licensor shall be paid by telegraphic remittance, to a bank account Indicated in due time by Licensor.