Common use of Authorized Generic Clause in Contracts

Authorized Generic. (a) At any time on or after a Third Party Generic Launch with respect to a Product, TRIS shall have the right to manufacture and Market an AG Product of such Product. AYTU is not permitted to Market an AG Product of a Product. If TRIS Markets AG Products during the Term of such Product, it shall pay AYTU on a Fiscal Quarterly basis [**] of TRIS’ Gross Margin for such AG Product for such Fiscal Quarter (the “AG Product Royalty Payment”), and if Gross Margin is negative then AYTU shall pay TRIS [**] of such negative Gross Margin, as more fully set forth in this Section 6.9; provided, however, that if Gross Margin is negative for two consecutive Fiscal Quarters, AYTU may terminate this Agreement by written notice to TRIS on thirty (30) days’ notice delivered within thirty (30) days following delivery of TRIS’ second consecutive AG Quarterly Payment Report showing that AYTU owes amounts to TRIS arising from negative Gross Margin, provided however that if together with such second consecutive AG Quarterly Payment Report, TRIS sends a notice stating that AYTU will no longer be responsible for its share of negative Gross Margin for future quarters, then AYTU may not terminate this Agreement on account of negative Gross Margin. (b) For each Fiscal Quarter during the Term of this Agreement commencing with the first Fiscal Quarter which includes TRIS’ launch of an AG Product TRIS shall calculate the Gross Margin from the sale of each AG Product in the Territory. Each such calculation shall be conducted in a manner consistent with the definition of “Net Sales” (as revised in the definition of Gross Margin) contained herein and shall be in accordance with GAAP. (c) Within forty-five (45) calendar days (sixty (60) days in the case of the last Fiscal Quarter in a calendar year) after the last day of each Fiscal Quarter of each calendar year during the Term commencing with the Fiscal Quarter of TRIS’ launch of an AG Product, TRIS shall furnish to AYTU a written report (the “AG Quarterly Payment Report”) setting forth for such Fiscal Quarter, (i) the Net Sales of each Product (including the number of units shipped times the invoiced price per unit and the details of all deductions from gross sales to arrive at Net Sales, with Net Sales determined as in the definition of Gross Margin); (ii) the date of TRIS’ launch of such Product during such period (if applicable), (iii) the amount of the AG Product Royalty Payment to be made to AYTU, together with reasonable supporting documentation with respect thereto. TRIS shall also remit to AYTU, by the due date of each AG Quarterly Payment Report for each Fiscal Quarter, a payment equal to the AG Product Royalty Payment for the AG Product for such Fiscal Quarter. Such AG Quarterly Payment Reports shall be subject to the audit provisions of Section 6.9(d). Notwithstanding the foregoing, if the AG Quarterly Payment Report shows that the Gross Margin is negative then AYTU shall pay TRIS [**] of such negative Gross Margin, within thirty (30) days of receipt of the AG Quarterly Payment Report. (d) TRIS shall maintain and shall require its Subsidiaries and sublicensees to maintain, at their respective offices, accurate and complete books and records of the Net Sales of each of the AG Products in such form and in such reasonable detail as to enable AYTU, to verify the Net Sales of each of the AG Products in the Territory and the AG Product Royalty Payments. Upon the written request of AYTU not more than once per calendar year, TRIS shall permit an independent certified public accounting firm and/or suitably qualified pharmaceutical industry expert jointly selected by TRIS and AYTU to have access during normal business hours to such of the records of TRIS as may be reasonably necessary to verify the accuracy of the Net Sales and AG Product Royalty Payments for each AG Product for any calendar year ending not more than four (4) full years prior to the date of such request. If such accounting firm and/or pharmaceutical industry expert concludes that there are discrepancies in the reporting or calculation of the Net Sales or the AG Product Royalty Payments for an AG Product, such accounting firm or pharmaceutical industry expert shall recalculate such amounts and: (a) TRIS shall pay any additional sums overpaid by AYTU or underpaid to AYTU, as the case may be, within thirty (30) calendar days of such re-determination; or (b) AYTU shall repay TRIS for any overpaid amounts by TRIS or underpaid amounts by AYTU. The fees and expenses charged by such accounting firm and/or pharmaceutical industry expert shall be paid by AYTU. However, if the audit discloses that the aggregate AG Product Royalty Payments relating to all AG Products to AYTU was underpaid during the applicable audit period by more than five per cent (5%), then TRIS shall pay the reasonable fees and expenses charged by the accounting firm and/or pharmaceutical industry expert. Each Party shall forthwith pay any amounts discovered to be due by it to the other pursuant to an audit together with interest from the date payment was originally due at a rate equal to the floating annual rate of 2% above the commercial prime rate as published in the Wall Street Journal on the next Business Day following receipt of the auditor’s report.

Authorized Generic. (a) At any time on If the First Applicant has not forfeited, relinquished, or after otherwise waived its 180-day exclusivity as described in 21 U.S.C. § 355(j)(5)(B)(iv) (as amended or replaced), Perrigo shall be the exclusive distributor of an Authorized Generic supplied by Plaintiffs during the 180-day exclusivity period described in 21 U.S.C. § 355(j)(5)(B)(iv) (as amended or replaced) and Plaintiffs shall not launch a Third Party product under the PENNSAID 2% NDA other than the PENNSAID 2% branded product during such 180-day period. For sales of Authorized Generic Launch with respect product made by Perrigo during this period, Plaintiffs shall receive […***…]% of Net Sales and Perrigo shall retain […***…]% of Net Sales. Each payment by Perrigo to a ProductPlaintiffs shall be made in U.S. dollars within […***…] calendar days of the end of the Perrigo Fiscal Quarter to which such payment relates. If the First Applicant has forfeited, TRIS relinquished, or otherwise waived its 180-day exclusivity as described in 21 U.S.C. § 355(j)(5)(B)(iv) (as amended or replaced) or, if the First Applicant has not forfeited, relinquished, or otherwise waived such exclusivity, upon expiration of such 180-day exclusivity period, Perrigo shall be the non-exclusive distributor of an Authorized Generic supplied by Plaintiffs if, and only if Perrigo does not have approval for the right Paddock ANDA or Perrigo has approval for the Paddock ANDA but is unable, despite using commercially reasonable efforts, to manufacture or release Paddock Generic Product for sale. For sales of Authorized Generic product made by Perrigo pursuant to this provision, Plaintiffs shall receive […***…]% of Net Sales and Perrigo shall retain […***…]% of Net Sales. Any payment by Perrigo to Plaintiffs made pursuant to this provision shall be made in U.S. dollars within […***…] calendar days of the end of the Perrigo Fiscal Quarter to which such payment relates. Once Perrigo has approval for the Paddock ANDA and is able to manufacture and Market an AG Product of such Product. AYTU is not permitted to Market an AG Product of a Product. If TRIS Markets AG Products during the Term of such Product, it shall pay AYTU on a Fiscal Quarterly basis [**] of TRIS’ Gross Margin for such AG release Paddock Generic Product for such Fiscal Quarter (the “AG Product Royalty Payment”)sale to Third Parties, and if Gross Margin is negative then AYTU shall pay TRIS [**] of such negative Gross Margin, as more fully set forth in its rights under this Section 6.9; provided, however, that if Gross Margin is negative for two consecutive Fiscal Quarters, AYTU may terminate this Agreement by written notice to TRIS on thirty (307(b) days’ notice delivered within thirty (30) days following delivery of TRIS’ second consecutive AG Quarterly Payment Report showing that AYTU owes amounts to TRIS arising from negative Gross Margin, provided however that if together with such second consecutive AG Quarterly Payment Report, TRIS sends a notice stating that AYTU will no longer shall be responsible for its share of negative Gross Margin for future quarters, then AYTU may not terminate this Agreement on account of negative Gross Marginterminated. (b) For each Fiscal Quarter during the Term of this Agreement commencing with the first Fiscal Quarter which includes TRIS’ launch of an AG Product TRIS shall calculate the Gross Margin from the sale of each AG Product in the Territory. Each such calculation shall be conducted in The parties will enter into a manner consistent with the definition of formal supply agreement (“Net Sales” (as revised in the definition of Gross Margin) contained herein and shall be in accordance with GAAP. (c) Within forty-five (45) calendar days (sixty (60) days in the case of the last Fiscal Quarter in a calendar year) after the last day of each Fiscal Quarter of each calendar year during the Term commencing with the Fiscal Quarter of TRIS’ launch of an AG Product, TRIS shall furnish to AYTU a written report (the “AG Quarterly Payment ReportSupply Agreement”) setting forth for such Fiscal Quarter, (i) the Net Sales of each Product (including the number of units shipped times the invoiced price per unit and to memorialize the details of all deductions from gross sales to arrive at Net Sales, with Net Sales determined as in the definition Plaintiff’s supply of Gross Margin); (ii) the date of TRIS’ launch of such Product during such period (if applicable), (iii) the amount and ▇▇▇▇▇▇▇’▇ distribution of the AG Product Royalty Payment to be made to AYTUAuthorized Generic. The Supply Agreement will, together with reasonable supporting documentation with respect thereto. TRIS shall also remit to AYTU, by the due date of each AG Quarterly Payment Report for each Fiscal Quarter, a payment equal in addition to the AG Product Royalty Payment for the AG Product for such Fiscal Quarterpreceding “key terms”, contain commercially reasonable terms and conditions. Such AG Quarterly Payment Reports shall The Supply Agreement will be subject to the audit provisions of Section 6.9(d). Notwithstanding the foregoing, if the AG Quarterly Payment Report shows that the Gross Margin is negative then AYTU shall pay TRIS entered into at least […***…] of such negative Gross Margin, within thirty (30) days of receipt of the AG Quarterly Payment Report. (d) TRIS shall maintain and shall require its Subsidiaries and sublicensees to maintain, at their respective offices, accurate and complete books and records of the Net Sales of each of the AG Products in such form and in such reasonable detail as to enable AYTU, to verify the Net Sales of each of the AG Products in the Territory and the AG Product Royalty Payments. Upon the written request of AYTU not more than once per calendar year, TRIS shall permit an independent certified public accounting firm and/or suitably qualified pharmaceutical industry expert jointly selected by TRIS and AYTU to have access during normal business hours to such of the records of TRIS as may be reasonably necessary to verify the accuracy of the Net Sales and AG Product Royalty Payments for each AG Product for any calendar year ending not more than four (4) full years months prior to the anticipated launch date of the Authorized Generic (or such requestdate to be extended by mutual agreement of Plaintiffs and Perrigo). If such accounting firm and/or pharmaceutical industry expert concludes that there are discrepancies in In the reporting or calculation event the parties cannot agree to any of the Net Sales or other terms of the AG Product Royalty Payments for an AG ProductSupply Agreement, such accounting firm or pharmaceutical industry expert shall recalculate such amounts and: (a) TRIS shall pay any additional sums overpaid by AYTU or underpaid to AYTU, as the case may be, within thirty (30) calendar days of such re-determination; or (b) AYTU shall repay TRIS for any overpaid amounts by TRIS or underpaid amounts by AYTU. The fees and expenses charged by such accounting firm and/or pharmaceutical industry expert “key terms” in this Section 7 shall be paid by AYTU. However, if binding and not negotiable and the audit discloses that the aggregate AG Product Royalty Payments relating parties shall utilize binding arbitration or mediation to all AG Products to AYTU was underpaid during the applicable audit period by more than five per cent (5%), then TRIS shall pay the reasonable fees and expenses charged by the accounting firm and/or pharmaceutical industry expert. Each Party shall forthwith pay resolve any amounts discovered to be due by it to the other pursuant to an audit together with interest from the date payment was originally due at a rate equal to the floating annual rate of 2% above the commercial prime rate as published terms in the Wall Street Journal on the next Business Day following receipt of the auditor’s reportdispute.

Authorized Generic. (a) At any time on or after a Third Party Generic Launch with respect to a Product, TRIS shall have the right to manufacture and Market an AG Product of such Product. AYTU is not permitted to Market an AG Product of a Product. If TRIS Markets AG Products during the Term of such Product, it shall pay AYTU on a Fiscal Quarterly basis [**] of TRIS’ Gross Margin for such AG Product for such Fiscal Quarter (the “AG Product Royalty Payment”), and if Gross Margin is negative then AYTU shall pay TRIS [**] of such negative Gross Margin, as more fully set forth in this Section 6.9; provided, however, that if Gross Margin is negative for two consecutive Fiscal Quarters, AYTU may terminate this Agreement by written notice to TRIS on thirty (30) days’ notice delivered within thirty (30) days following delivery of TRIS’ second consecutive AG Quarterly Payment Report showing that AYTU owes amounts to TRIS arising from negative Gross Margin, provided however that if together with such second consecutive AG Quarterly Payment Report, TRIS sends a notice stating that AYTU will no longer be responsible for its share of negative Gross Margin for future quarters, then AYTU may not terminate this Agreement on account of negative Gross Margin. (b) For each Fiscal Quarter during the Term of this Agreement commencing with the first Fiscal Quarter which includes TRIS’ launch of an AG Product TRIS shall calculate the Gross Margin from the sale of each AG Product in the Territory. Each such calculation shall be conducted in a manner consistent with the definition of “Net Sales” (as revised in the definition of Gross Margin) contained herein and shall be in accordance with GAAP. (c) Within forty-five (45) calendar days (sixty (60) days in the case of the last Fiscal Quarter in a calendar year) after the last day of each Fiscal Quarter of each calendar year during the Term commencing with the Fiscal Quarter of TRIS’ launch of an AG Product, TRIS shall furnish to AYTU a written report (the “AG Quarterly Payment Report”) setting forth for such Fiscal Quarter, (i) the Net Sales of each Product (including the number of units shipped times the invoiced price per unit and the details of all deductions from gross sales to arrive at Net Sales, with Net Sales determined as in the definition of Gross Margin); (ii) the date of TRIS’ launch of such Product during such period (if applicable), (iii) the amount of the AG Product Royalty Payment to be made to AYTU, together with reasonable supporting documentation with respect thereto. TRIS shall also remit to AYTU, by the due date of each AG Quarterly Payment Report for each Fiscal Quarter, a payment equal to the AG Product Royalty Payment for the AG Product for such Fiscal Quarter. Such AG Quarterly Payment Reports shall be subject to the audit provisions of Section 6.9(d). Notwithstanding the foregoing, if the AG Quarterly Payment Report shows that the Gross Margin is negative then AYTU shall pay TRIS [**] of such negative Gross Margin, within thirty (30) days of receipt of the AG Quarterly Payment Report. EXPLANATORY NOTE: [**] INDICATES THE PORTION OF THIS EXHIBIT THAT HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IN PUBLICLY DISCLOSED. (d) TRIS shall maintain and shall require its Subsidiaries and sublicensees to maintain, at their respective offices, accurate and complete books and records of the Net Sales of each of the AG Products in such form and in such reasonable detail as to enable AYTU, to verify the Net Sales of each of the AG Products in the Territory and the AG Product Royalty Payments. Upon the written request of AYTU not more than once per calendar year, TRIS shall permit an independent certified public accounting firm and/or suitably qualified pharmaceutical industry expert jointly selected by TRIS and AYTU to have access during normal business hours to such of the records of TRIS as may be reasonably necessary to verify the accuracy of the Net Sales and AG Product Royalty Payments for each AG Product for any calendar year ending not more than four (4) full years prior to the date of such request. If such accounting firm and/or pharmaceutical industry expert concludes that there are discrepancies in the reporting or calculation of the Net Sales or the AG Product Royalty Payments for an AG Product, such accounting firm or pharmaceutical industry expert shall recalculate such amounts and: (a) TRIS shall pay any additional sums overpaid by AYTU or underpaid to AYTU, as the case may be, within thirty (30) calendar days of such re-determination; or (b) AYTU shall repay TRIS for any overpaid amounts by TRIS or underpaid amounts by AYTU. The fees and expenses charged by such accounting firm and/or pharmaceutical industry expert shall be paid by AYTU. However, if the audit discloses that the aggregate AG Product Royalty Payments relating to all AG Products to AYTU was underpaid during the applicable audit period by more than five per cent (5%), then TRIS shall pay the reasonable fees and expenses charged by the accounting firm and/or pharmaceutical industry expert. Each Party shall forthwith pay any amounts discovered to be due by it to the other pursuant to an audit together with interest from the date payment was originally due at a rate equal to the floating annual rate of 2% above the commercial prime rate as published in the Wall Street Journal on the next Business Day following receipt of the auditor’s report.