Question
From: (redacted)
Sent: Tuesday, February 07, 2006 10:44 AM
To: Verne, B. Michael
Subject:HSR question re valuation of an exclusive license
A grants B an exclusivelicense, for which B agrees to pay royalties of $15 million per year. Theduration of the exclusive license is three years, but the license is renewablefor an additional term of three years.
Is this a non-reportable $45million transaction or a reportable $90 million transaction? If the former isthe renewal likewise a non-reportable $45 million transaction? Would the801.13(b)(2) throwback rule apply to the renewal?
Does it matter whether thelicense is "automatically" renewable in the absence of an affirmativeopt-out by either party?