Financial Obligations.
a. Initial Fee. Licensee, upon Licensee’s delivery to Id Software of Licensee’s request for Id Software to enter into this Agreement, shall pay Id Software the sum of U.S. Five Hundred and No/100 Dollars ($500.00) (the “Initial Fee”) as an administrative processing fee. Upon Id Software’s execution of this Agreement, the Initial Fee shall become non-refundable. The Initial Fee shall not be recoupable as a credit against Royalties.
b. Royalties. Licensee agrees to pay Id Software a royalty (“Royalty”) at the rate of twelve and one-half (12.5%) of Net Income. The term “Net Income” shall mean all revenue received by Licensee from the commercial use of the Authorized Copy, less only Licensee’s actual, reasonable, necessary and documented costs relating directly to such use. A Royalty shall only be due for those months in which Licensee’s gross revenue from the commercial use of the Authorized Copy exceeds U.S. Five Thousand Dollars ($5,000.00) and in such months Licensee shall pay a full Royalty on one hundred percent (100%) of the gross revenue received. For those months where gross revenue is Five Thousand and No/100 Dollars ($5,000.00) or less, Licensee shall not be obligated to pay a Royalty.
b. Royalties. Licensee agrees to pay Id Software a royalty (“Royalty”) at the rate of twelve and one-half (12.5%) of Net Income. The term “Net Income” shall mean all revenue received by Licensee from the commercial use of the Authorized Copy, less only Licensee’s actual, reasonable, necessary and documented costs relating directly to such use. A Royalty shall only be due for those months in which Licensee’s gross revenue from the commercial use of the Authorized Copy exceeds U.S. Five Thousand Dollars ($5,000.00) and in such months Licensee shall pay a full Royalty on one hundred percent (100%) of the gross revenue received. For those months where gross revenue is Five Thousand and No/100 Dollars ($5,000.00) or less, Licensee shall not be obligated to pay a Royalty.
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