SEC Filings

AVEXIS, INC. filed this Form S-1 on 01/15/2016
Entire Document


4.5                               Royalty Stacking.


4.5.1                                                            If Licensee is reasonably required to take a license under any third party patents to exploit the Licensed Technology or if Licensee, in its sole discretion, determines a license to any third party patents would be useful to exploit the Licensed Technology and Licensee’s total royalty burden for Net Sales of Licensed Products exceeds **** of Net Sales of Licensed Products, the royalty percentage payable hereunder, shall be reduced proportionally in accordance with the following formula:


R = ****,




R is the adjusted royalty due hereunder; and

T is the total royalty due to all licensors;


provided, however, that in no event shall the royalty payable under this Agreement as a result of the reductions taken under this Section 4.5.1 be less than **** of Net Sales of Licensed Products during any Royalty Period.


4.5.2                     Upon expiration of the last Licensed Patents covering a particular Licensed Product in a particular country, the royalty rate payable hereunder with respect to such Licensed Product will be reduced by **** for the remainder of the Royalty Term.


4.6                               Sublicensing Payments. Licensee shall pay to Children’s a percentage of **** received by Licensee for each sublicense of the rights to the Licensed Technology granted hereunder, including ****, but excluding ****. Sublicensing payments shall be made to Children’s by or on ****. Sublicensing payments expressly exclude ****. In no event will this Section 4. 6 apply to any Change of Control of Licensee or its Affiliate or sublicensee or otherwise be deemed to trigger an obligation for Licensee or its Affiliate or sublicensee to pay any amount to Children’s under this Section 4.6.


4.7                               Royalty Payment and Report. Within **** after the end of each License Year, Licensee shall provide to Children’s a written report, due even if there are no Net Sales, detailing Licensee’s and each sublicensee’s sales and development activities during the License Year. Each report shall: (a) be substantially in the form attached as Exhibit E; (b) be certified as accurate and complete by an authorized official of Licensee; and (c) set forth a full accounting of any amounts due, including the description and number of Licensed Products manufactured, used, transferred and/or otherwise disposed of, the calculation of Net Sales of such Licensed Products on a country-by-country basis, including an itemized listing of any allowable deductions or credits, if any, under this Agreement, the total royalty payment and remuneration due during such License Year, any amounts due for Annual Minimums or milestones, exchange rates used and the method of calculation of amounts due Children’s for such License Year, including any sublicensing payments and royalties received and payable. Concurrent with the making of each such report, Licensee shall include payment due.  If no payment is due for the License Year, Licensee shall so state.


4.8                               Accounting. Licensee shall keep and maintain and shall require all of its sublicensees to keep and maintain complete, accurate, and continuous records for a period of ****, which show the






manufacture, transfer, use, and other disposition of Licensed Products. Such records shall include general ledger records showing cash receipts and expenses, and records which include production records, customers, and related information, in sufficient detail to determine the amounts payable hereunder. Licensee shall permit Children’s and/or its representatives reasonable access annually during and within ****, to audit during ordinary business hours, such records as may be necessary to verify or determine royalties or other payments paid or payable under this Agreement. Licensee shall pay Children’s unpaid amounts due hereunder, plus interest as set forth in Section 4.10, within ****. Children’s shall pay the cost and expense of the audit unless the results of the audit reveal an under-reporting or an underpayment due Children’s of **** or more, in which case Licensee shall reimburse Children’s for the reasonable costs and expenses of the audit within **** receipt of invoice.


4.9                               Annual Certifications. If Licensee becomes a publicly traded company, then for so long as ****, Licensee shall provide Children’s with annual certifications regarding Licensee’s compliance with the Sarbanes-Oxley Act regarding internal controls for characterizing royalty payments made under this Agreement.


4.10                        Interest. The royalty and other payments set forth in this Agreement shall, if overdue, bear interest until payment at **** or the maximum amount permitted under law, whichever is less. The acceptance of the payment of such interest shall not foreclose Children’s from exercising any other rights or remedies it may have.


4.11                        Payment Procedures. All payments due from Licensee hereunder shall be made in U.S. dollars by check or money order payable to the “Research Institute at Nationwide Children’s Hospital.”     With respect to transfers in countries outside the United States, payments shall be made in U.S. dollars at the rate of exchange published in the Wall Street Journal on the close of business on the last banking day of each Royalty Period in which the royalty accrues. Such payments shall reference the Research Institute tax identification number **** and shall be remitted to the address for Research Institute specified in Section 12.1 of this Agreement.


4.12                        Taxes.   All amounts payable to Children’s under this Agreement are net of all taxes and other charges, and Licensee shall pay, and shall indemnify and hold the Children’s harmless against, all taxes, transfer fees and other charges (other than taxes based on Children’s and/or OSU’s income, for which Children’s and OSU shall remain solely responsible and liable) levied by any taxing authority on account of license fees, royalties or any other sums payable under this Agreement. Licensee shall deliver to Children’s copies of all official tax receipts.





5.1                               Prosecution and Maintenance of Licensed Patents. Provided that Licensee timely makes all of its payments under this Agreement, Children’s shall use reasonable efforts consistent with its normal practices to prosecute and maintain the Licensed Patents in the Field of Use and Licensed Territory and Licensee shall cooperate with all lawful requests of Children’s in effectuating such efforts.





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