PERCENTAGE OF REVENUE ROYALTY LANGUAGE

FOR LICENSE AGREEMENT

 

THIS IS GENERAL PERCENTAGE OF REVENUE ROYALTY LANGUAGE THAT CAN BE USED IN CONNECTION WITH ANY LICENSE FOR PRODUCT SALES.

 

 

1.                Licensee shall pay to Licensor, a royalty equal to ______% of the Gross Sales (subject to adjustment and calculated pursuant to the terms hereof) of the Licensed Products.  Such Royalty shall be calculated and paid to Licensor on a quarterly basis.

 

2.                Within fifteen (15) days after the end of each calendar quarter during the term hereof, Licensee shall prepare and deliver to the Licensor a written report indicating the total Net Sales of the Licensed Product, the number of each unit of the Licensed Product that has been sold, the total gross collections, total amounts paid for returns and adjustments, total adjustments to Net Sales as provided herein, and the amount of Royalty payment due to Licensor hereunder.  Licensee shall include payment of the amount shown due as a Royalty along with such report.

 

3.                All payments of royalties shall be in United States dollars in the form a corporate check drawn on a FDIC insured United States financial institution.  Late payments shall incur interest at the rate of %_____ per annum but not to exceed the maximum rate allowable under any applicable law.

 

4.                As defined herein, “Net Sales” shall mean and include all amounts received and collected by the Licensee from sales of the Licensed Products during the applicable calendar quarter, less the “Adjustments” as herein defined.  The “Adjustments” shall mean and include all discounts indicated on customer invoices, amounts refunded to customers for bona fide returns and other items, all adjustments to invoices.

 

5.                Royalty obligations shall accrue upon collection of such amounts by the Licensee.

 

6.                Licensee shall be responsible for all billing and collection relative to Licensed Product that it sells and shall take all reasonable steps within its normal collection process to collect such amounts from customers.

 

7.                Licensee’s payment of royalty obligations and obligations to account therefore to Licensor shall extend beyond and survive the termination or expiration of this Agreement.

 

8.                Licensor shall have the right to inspect the books and records of the Licensee to verify the reports of royalty payments submitted by Licensee.  Inspections shall be during Licensee’s normal business hours no sooner than ten (10) business days following written request by Licensor and no more frequently than ______ times per calendar year.