Common use of Assignment Consideration Clause in Contracts

Assignment Consideration. Company agrees to pay Inventor, Royalties in the amount of: (i) four per­cent (4%) of the Revenues of Company, derived anywhere in the world by, for, through, or under Company; (ii) less any Base Salary (and/or any salary or severance payments on account of the termination of the Employment Agreement for Good Cause) paid to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, as Employee, pursuant to the Employment Agreement. As of the termination of the Employment Agreement, Company agrees to pay to Inventor, Royalties in the amount of four per­cent (4%) of the Revenues of Company, derived anywhere in the world by, for, through, or under Company for the balance of the Term, provided, however, Company’s obligation to pay Royalties on Revenues based on clause (i) of the definition shall be deferred until collected by Company. In the event that Revenues under this Agreement consist of illiquid property, Inventor shall be entitled to four percent (4%) of such illiquid property, in kind. Company shall use commercially reasonable efforts to sell the illiquid property (including that owned by Inventor) unless Inventor otherwise agrees. If the Company pays a dividend within the meaning of clause (iv) of the definition of Revenues, it shall be considered illiquid property. In the event Company desires to enter into an agreement to sell the illiquid property to an unrelated Person, Company shall, not less than ten (10) business days prior to entering into such agreement, notify Inventor (which notice shall include a copy of the proposed agreement. Within five (5) business days after receipt of the proposed agreement, Inventor shall have the right to elect to “tag along”, in which event a pro rata percentage of the illiquid property owned by Inventor (“Pro Rata Percentage”) shall be included in the transaction on the same terms and conditions as set forth in the proposed agreement. For example, if Company owns 96% of the illiquid property and Inventor owns 4% of the illiquid property and a buyer agrees to buy 50% of the illiquid property, then Company shall sell 48% of the illiquid property and Inventor shall sell 2% of the illiquid property and the purchase price shall be allocated accordingly. All Royalties due hereunder shall be paid in United States Dollars. All Royalties paid or computed in other currencies shall be converted into United States Dollars at the buying rate for the transfer of such other currencies to United States Dollars as quoted by the Chase Manhattan Bank (or if Chase Manhattan Bank ceases to provide such information, any of the five (5) largest banking institutions regulated by the United States Government selected by Inventor) on the last day of such accounting period. All payments of Royalties shall be made commencing on January 1, 2013: (i) on a monthly basis and be due within three business days of the end of each month (based upon Revenues deposited during said monthly period) and adjusted for the respective periods ending on March 31, June 30, September 30 and December 31 of each year; and (ii) within 40 days of the end of each quarter, except 75 days after the last day of the Company’s fiscal year (or such earlier date that the SEC requires quarterly and annual reports to be filed). At the time of making any such payment, Company shall furnish Inventor with a written statement of Revenues for the pre­ceding month and quarter attested under oath by the President or Chief Financial Officer of Company. In the event of an adjustment of Royalties based upon estimated/actual Revenues: (i) in the event that any estimated Royalties paid exceeds the sum due to Inventor based upon actual Revenues received, Company may offset such amount against the next ensuing payment of estimated Royalties until the excess is fully applied; and (ii) in the event that any estimated Royalties paid is less than the sum due to Inventor based upon actual Revenues received, Company shall pay the shortfall to Inventor within fifteen (15) business days. Following a Change of Control, any amounts payable to Inventor that are not paid when due shall be subject to a late payment charge equal to ten percent (10%) of the amount payable as liquidated and agreed damages but only if the variance exceeds five (5%) of the sums due for the period in question. Company agrees to provide Inventor, within forty (40) days after the end of each calendar quarter except seventy five (75) days after the last day of the Company’s fiscal year (or such earlier date that the SEC requires quarterly and annual reports to be filed), and within ten (10) days after the expiration or termination of this Agreement, a report of the Revenues of Company, by country (if applicable) (“Quarterly Royalty Reports”) subject to the Company receiving customary confidentiality agreements from any party within the definition of Inventor. Company shall commence providing Inventor such Quarterly Royalty Reports within forty (40) days following the end of the first calendar quarter of the Term. The Quarterly Royalty Reports will quantify the gross Revenues of Company accrued during the previous quarter explaining the basis for such calculations. Company shall keep, at its main office, a permanent, accurate set of Books and Records in which Revenues shall be recorded. The Books and Records shall also include any non-consolidated, federal, state and local tax returns and all pertinent original sales records relating to Company’s operations/sales. All books and records reflecting Revenues and/or the calculation of Royalties shall be retained and preserved for a period of five (5) years. The Books and Records shall be open to inspection and audit by Inventor and/or its duly authorized representatives, at all reasonable times during business hours upon not less than ten (10) days prior written notice. If Inventor conducts an audit of the Books and Records, and if the audit determines that Company has understated Revenues or calculation of Royalties by more than three (3%) percent, in addition to such other rights and remedies available to the Inventor at law or equity, Company shall, within ten (10) business days thereafter, pay any deficiency in the Royalties due on account of such understatement and the reasonable cost of such audit. If Company fails to submit the required statement of Revenues or calculation of Royalties, as required, Company shall pay the cost thereof, irrespective of the results of such audit. The cost of such audit shall be determined on a time and expense basis at the rate per hour which shall not exceed that charged for similar personnel by a national firm of independent certified public accountants. The Books and Records shall include: (i) accounts receivable aging within twenty (20) days after the end of each month; (ii) as soon as available, and in any event within thirty (30) calendar days after the close of each quarter, reviewed quarterly financial statements, all in reasonable detail and prepared in accordance with generally accepted accounting principles applied on a consistent basis; (iii) as soon as available, and in any event within seventy five (75) calendar days after the close of each year, annual audited financial statements, all in reasonable detail and prepared in accordance with generally accepted accounting principles applied on a consistent basis; (d) as soon as available, and in any event within ninety (90) calendar days after the close of each year, annual tax returns. In the event any Government Authorities imposes any taxes on any part of the payments required hereunder and Company’s auditors or tax advisors advise Company that it is required to withhold taxes from such payment, Company may withhold such taxes from such payments or pay same as required. Tax receipts indicat­ing such payments or withholding of taxes shall be promptly submitted to Inventor. Company shall co­operate with Inventor in a determination of the propriety of, or imposition of, any such tax and shall permit Inventor to challenge such tax by all lawful means. In the event any national government imposes any exchange restriction prohibiting pay­ments as required under this Agreement, an account in the name of Inventor shall be established in a financial institution of Inventor’s choice in such country (or permitted place of payment) and all monies due Inventor shall be paid into such account, or at Inventor’s election, payment shall be made to any ac­count designated by Inventor that complies with such restriction(s)/prohibition. In the event that Company fails to pay any payment hereunder when due, Company shall pay interest to Inventor on any and all amounts overdue and payable under this Agreement at the Default Rate from the date of default until payment, including post judgment. All of Company’s obligations and covenants to provide reports under this Agreement are subject to Inventor delivering a customary confidentiality agreement and if Inventor ceases to be employed by Company further subject to redaction of pricing and other information which would be protected from disclosure under the Freedom of Information Act.