Common use of Base Royalty Clause in Contracts

Base Royalty. In consideration of the rights and licenses granted by VirRx to Introgen under this Agreement, subject to the terms and conditions of this Section 5.4, Introgen agrees to pay to VirRx the following royalties based on Net Sales by Introgen, its Affiliates or Sublicensees of Licensed Products: (i) [*] of such Net Sales with respect to Licensed Products that consist of an [*] Vector developed by VirRx that are not materially modified by Introgen (or by a third party under the authority of Introgen); or (ii) [*] of such Net Sales with respect to Licensed Products other than those described in (i) above. It is understood that Licensed Products for which the royalty will be as set forth in this Section 5.4(a)(ii) will include those comprising an [*] Vector materially modified by Introgen (or by a third Party under authority of Introgen), which modifications may include, but shall not be limited to, bona fide modification of the coding region or delivery of the [*] Vector, or incorporation into the [*] Vector of other subject matter. It is understood that a modification to an [*] Vector made solely for the purpose of reducing the royalties payable to VirRx shall not be deemed a "material modification" for the purposes of this Section 5.4(a)(ii). The base royalties calculated under this Section 5.4(a) shall be reduced by [*] with respect to Net Sales of Licensed Products if the sale or use of such Licensed Products would not, but for the license granted herein, directly infringe a Valid Claim in the country for which such Licensed Products are sold.