Obviously, if the latter were to hold true, TPL will have an advantage over PTSC as they have the reverse engineering, and contractual language that prohibits PTSC for one year from licensing to those TPL already has in negotiations
The occurrence of any Recovery Event within twelve (12) months of a Termination Event, as defined in Section 6.2 of the Commercialization Agreement, shall entitle each of the Members to payment of the proceeds of such Recovery Event in accordance with Section 6.1
6.2 Allocation of Net Profits. Subject to the provisions of Sections 6.4 and 6.5, Net Profits for any Fiscal Year or other period shall be allocated to the Members according to their Percentage Interests
6.1 Application of Gross Cash Proceeds.
(a) Application of Gross Cash Proceeds. Within sixty (60) days after the close of each of the Company's fiscal quarters, the Company shall apply and distribute Gross Cash Proceeds in accordance with the following schedule of priorities:
(i) First, for the payment to TPL (or, in the case of any payment to satisfy the obligations of the Company under Section 4.2 of the Commercialization Agreement, directly to the Person identified by TPL) in satisfaction of the Company's payment obligations under Sections 4.2 and 4.3 of the Commercialization Agreement;
(ii) Next, to the payment of any Company Expenses;
(iii) Next, for the Working Capital Fund until the Working Capital Fund equals *** ;
(iv) Next,
(a) for payment to Patriot of an amount equal to 10% of the Gross Cash Proceeds until Patriot shall have received Twenty Million Dollars ($20,000,000); and
(b) for payment to TPL of an amount equal to 15% of the Adjusted Gross Cash Proceeds minus any amounts previously advanced to TPL (and not previously credited against payments to TPL hereunder) pursuant to Section 4.3 of the Commercialization Agreement; and
(v) Finally, the remaining Gross Cash Proceeds (such remaining amount, the "Net Cash Proceeds") to the Members according to their respective Percentage Interests.
In the event that funds sufficient to satisfy the payments required to be made pursuant to subsections (iv)(a) and (iv)(b) above are unavailable, such payment obligations shall be pari passu, and any unpaid amounts thereof shall be paid from Gross Cash Proceeds subsequently received by the Company.
(b) Distribution of Company Property. Company property shall be distributed only pursuant to Article VIII.
(c) Withholdings. All amounts withheld pursuant to the Code or any provisions of state or local tax law with respect to any payment or distribution to the Members from the Company shall be treated as amounts distributed to the relevant Members pursuant to this Section 6.1.
http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=3740542
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Be well
