Common use of Payments and Royalties Clause in Contracts

Payments and Royalties. 4.1 For the rights, privileges and license granted hereunder, LICENSEE shall pay to CMCC in the manner hereinafter provided to the end of the term of the Patent Rights or until this Agreement shall be terminated as hereinafter provided, whether the milestones are achieved under the sponsorship of CMCC, LICENSEE or a Sublicensee, the following milestone payments totaling $1,500,000 (one million and five hundred thousand dollars) for each Licensed Product: 4.1.1 $* (* dollars) due * the applicable Product Notice Date for such Licensed Product; 4.1.2 $* (* dollars) due *submission of the first Phase I/II IND (Investigational New Drug application) for any indication for such Licensed Product; 4.1.3 $* (* dollars) due * completion of a Phase II clinical trials for any indication for such Licensed Product; and 4.1.4 $* (* dollars) due * submission of a PLA (Product License Application) or an NDA (New Drug Application) for any indication for such Licensed Product. 4.2 LICENSEE shall pay to CMCC a royalty based on the Net Sales with respect to the Licensed Products or Licensed Processes used, leased or sold by LICENSEE, which said royalty shall be *% (* percent), or such lower rate as may be agreed upon in writing by the parties, of such Net Sales. 4.3 Where sublicenses have been granted, or strategic partnerships entered into, LICENSEE shall pay to CMCC *% (* percent) of any and all sublicensing payments, or such lower percentage as may be agreed upon in writing by the parties. Sublicensing payments are defined as any and all payments made to LICENSEE by the Sublicensee or strategic partner except for payments to support research and development conducted by LICENSEE, for purchases of equity, for payments for goods and services or for royalties based on the Net Sales with respect to the Licensed Product or Licensed Process. LICENSEE shall pay to CMCC *% of the royalty income paid to LICENSEE up to $* of cumulative Net Sales with respect to the Licensed Product or Licensed Process. After $* of cumulative Net Sales, LICENSEE shall pay to CMCC *% of royalty income to LICENSEE from the Sublicensee with a minimum payment of *% of Net Sales for sales of the Licensed Product made or the practice of the Licensed Process by the Sublicensee. If the royalty rate paid by the Sublicensee is reduced because of third party, non-infringing sales of a Thalidomide analog, the minimum payment of at least *% of Net Sales of the Licensed Product will be reduced proportional to the reduction of the royalty rate paid to LICENSEE by the Sublicensee. Milestone payments from LICENSEE to CMCC shall be credited against CMCC's share of milestone payments made to LICENSEE by Sublicensee. 4.4 [Intentionally Omitted.] 4.5 No multiple royalties shall be payable because any Licensed Product, its manufacture, use, lease or sale, are or shall be covered by more than one of the Patent Rights licensed under this Agreement. 4.6 Royalty payments shall be paid in United States dollars in Boston, Massachusetts, or at such other place as CMCC may reasonably designate consistent with the laws and regulations controlling in any foreign country. If any currency conversion shall be required in connection with the payment of royalties hereunder, such conversion shall be made by using the exchange rate prevailing at the Fleet Bank of Boston on the last business day of the calendar quarterly reporting period to which such royalty payments relate.

Payments and Royalties. 4.1 For 6.1 In consideration of the rights, privileges licenses granted and license to be granted hereunder, LICENSEE HGS will pay to CAT on the Effective Date twelve million U.S. dollars ($12,000,000). Exclusive HGS Products ---------------------- 6.2 Subject to Paragraphs 6.4, 6.5, and 6.6, for each EXCLUSIVE HGS PRODUCT which is a THERAPEUTIC PRODUCT, HGS shall pay to CMCC in CAT the manner hereinafter provided to following royalties and milestone payments (which milestone payments under this Paragraph 6.2 shall be due and payable within thirty (30) days after the end applicable milestone event is achieved by or on behalf of HGS, its AFFILIATE or (sub)licensee): (1) [***] upon the effective date of the term of the Patent Rights or until this Agreement shall be terminated as hereinafter provided, whether the milestones are achieved under the sponsorship of CMCC, LICENSEE or a Sublicensee, the following milestone payments totaling $1,500,000 (one million license granted pursuant to Paragraphs 2.3 and five hundred thousand dollars) for each Licensed Product: 4.1.1 $* (* dollars) due * the applicable Product Notice Date 3.1.2 for such Licensed Product;EXCLUSIVE HGS PRODUCT 4.1.2 $* (* dollars2) due [*submission of **] upon the first Phase I/II IND (Investigational New Drug application) for any indication for such Licensed Product; 4.1.3 $* (* dollars) due * completion start of a Phase II I clinical trials for any indication trial for such Licensed ProductEXCLUSIVE HGS PRODUCT; (3) [***] upon start of a Phase III clinical trial for such EXCLUSIVE HGS PRODUCT; (4) [***] upon first submission of a BLA for such EXCLUSIVE HGS PRODUCT; (5) [***] upon the first regulatory approval of such EXCLUSIVE HGS PRODUCT for commercial sale; and 4.1.4 $* (* dollars6) a royalty of [***] of NET SALES of such EXCLUSIVE HGS PRODUCT sold by HGS, its AFFILIATES and (sub)licensees. HGS shall have no obligation to pay each milestone payment to CAT under this Paragraph 6.2 more than once for each different EXCLUSIVE HGS PRODUCT. For purposes of determining the milestone payments owing under this Paragraph 6.2, an EXCLUSIVE HGS PRODUCT shall constitute the same EXCLUSIVE HGS PRODUCT as any other EXCLUSIVE HGS PRODUCT, if such EXCLUSIVE HGS PRODUCT is directed to the same HGS ANTIGEN as the other EXCLUSIVE HGS PRODUCT, without regard to the formulation or means of administration thereof. 6.3 Subject to Paragraph 6.4, for each EXCLUSIVE HGS PRODUCT which is a DIAGNOSTIC PRODUCT, HGS shall pay to CAT the following royalties and milestone payments (which milestone payments under this Paragraph 6.3 shall be due * and payable within thirty (30) days after the applicable milestone event is achieved by or on behalf of HGS, its AFFILIATES or (sub)licensees): (1) [***] upon first submission of a PLA (Product License Application) or an NDA (New Drug Application) for any indication BLA for such Licensed ProductEXCLUSIVE HGS PRODUCT; (2) [***] upon the first regulatory approval of such EXCLUSIVE HGS PRODUCT for commercial sale; and (3) a royalty of [***] of NET SALES of such EXCLUSIVE HGS PRODUCT sold by HGS, its AFFILIATES and (sub)licensees. HGS shall have no obligation to pay each milestone payment to CAT under this Paragraph 6.3 more than once for each different EXCLUSIVE HGS PRODUCT. For purposes of determining the milestone payments owing under this Paragraph 6.3, an EXCLUSIVE HGS PRODUCT shall constitute the same EXCLUSIVE HGS PRODUCT as any other EXCLUSIVE HGS PRODUCT, if such EXCLUSIVE HGS PRODUCT is directed to the same HGS ANTIGEN as the other EXCLUSIVE HGS PRODUCT, without regard to the formulation or means of administration thereof. 4.2 LICENSEE shall pay to CMCC a royalty based on the Net Sales 6.4 Royalty obligations under Paragraphs 6.2 and 6.3, with respect to an EXCLUSIVE HGS PRODUCT, shall terminate on a country-by-country basis and on an EXCLUSIVE HGS PRODUCT by EXCLUSIVE HGS PRODUCT basis on the Licensed Products or Licensed Processes used, leased or sold by LICENSEE, which said royalty shall be later of (i) [*% (* percent), or such lower rate as may be agreed upon in writing by the parties, **] after first country-wide launch of such Net SalesEXCLUSIVE HGS PRODUCT in such country or (ii) expiration of the last to expire patent on CAT BACKGROUND IP Licensed to HGS under this Agreement which covers the process, method of making, making, having made, importing, offering to sell or using or selling of such EXCLUSIVE HGS PRODUCT in the country in which such EXCLUSIVE HGS PRODUCT was developed, made, sold or used. 4.3 Where sublicenses 6.5 In the event that HGS is required to pay a royalty to a THIRD PARTY in order to practice or have been granted, or strategic partnerships entered into, LICENSEE shall pay to CMCC *% (* percent) of any and all sublicensing payments, or such lower percentage as may be agreed upon practiced the technology claimed in writing by the parties. Sublicensing payments are defined as any and all payments made to LICENSEE by the Sublicensee or strategic partner except for payments to support research and development conducted by LICENSEE, for purchases of equity, for payments for goods and services or for royalties based on the Net Sales CAT's ANTIBODY PATENTS with respect to an EXCLUSIVE HGS PRODUCT, HGS shall be able to offset [***] of such third party royalties against the Licensed Product or Licensed Process. LICENSEE shall pay royalties owed to CMCC *% of CAT pursuant to Paragraph 6.2, provided that the royalty income paid owed to LICENSEE up to $* of cumulative Net Sales with respect to the Licensed Product or Licensed Process. After $* of cumulative Net Sales, LICENSEE CAT on any such EXCLUSIVE HGS PRODUCT shall pay to CMCC not be less than [*% of royalty income to LICENSEE from the Sublicensee with a minimum payment of *% *] of Net Sales for sales of the Licensed Product made or the practice of the Licensed Process by the Sublicensee. If the royalty rate paid by the Sublicensee is reduced because of third party, non-infringing sales of a Thalidomide analog, the minimum payment of at least *% of Net Sales of the Licensed Product will be reduced proportional to the reduction of the royalty rate paid to LICENSEE by the Sublicensee. Milestone payments from LICENSEE to CMCC shall be credited against CMCC's share of milestone payments made to LICENSEE by Sublicensee. 4.4 [Intentionally Omitted.] 4.5 No multiple royalties shall be payable because any Licensed Product, its manufacture, use, lease or sale, are or shall be covered by more than one of the Patent Rights licensed under this Agreement. 4.6 Royalty payments shall be paid in United States dollars in Boston, Massachusetts, or at such other place as CMCC may reasonably designate consistent with the laws and regulations controlling in any foreign country. If any currency conversion shall be required year in connection with the payment of royalties hereunder, such conversion shall be made by using the exchange rate prevailing at the Fleet Bank of Boston on the last business day of the calendar quarterly reporting period to which such royalty payments relateis owed. 6.6 In the event that CAT THIRD PARTY ROYALTY OBLIGATIONS are reduced from the amounts that CAT owes or would owe as of the Effective Date taking into account all applicable offsets, CAT shall promptly notify HGS in writing of such reduction, and HGS' royalty obligation under Paragraph 6.2 shall be reduced by an amount equal to [***] of such reduction.

Payments and Royalties. 4.1 For the rights, privileges and license granted hereunder, LICENSEE shall pay to CMCC in the manner hereinafter provided to the end of the term of the Patent Rights or until this Agreement shall be terminated as hereinafter provided, whether the milestones are achieved under the sponsorship of CMCC, LICENSEE or a Sublicensee, the following milestone payments totaling $1,500,000 * (one million and five hundred thousand * dollars) for each Licensed Product: 4.1.1 $* (* dollars) due * the applicable Product Notice Date for such Licensed Product; 4.1.2 $* (* dollars) due *submission of the first Phase I/II IND (Investigational New Drug application) for any indication for such Licensed Product; 4.1.3 $* (* dollars) due * completion of a Phase II clinical trials for any indication for such Licensed Product; and 4.1.4 $* (* dollars) due * submission of a PLA (Product License Application) or an NDA (New Drug Application) for any indication for such Licensed Product. 4.2 LICENSEE shall pay to CMCC a royalty based on the Net Sales with respect to the Licensed Products or Licensed Processes used, leased or sold by LICENSEE, which said royalty shall be *% (* percent), or such lower rate as may be agreed upon in writing by the parties, of such Net Sales. 4.3 Where sublicenses have been granted, or strategic partnerships entered into, LICENSEE shall pay to CMCC *% (* percent) of any and all sublicensing payments, or such lower percentage as may be agreed upon in writing by the parties. Sublicensing payments are defined as any and all payments made to LICENSEE by the Sublicensee or strategic partner except for payments to support research and development conducted by LICENSEE, for purchases of equity, for payments for goods and services or for royalties based on the Net Sales with respect to the Licensed Product or Licensed Process. LICENSEE shall pay to CMCC *% of the royalty income paid to LICENSEE up to $* of cumulative Net Sales with respect to the Licensed Product or Licensed Process. After $* of cumulative Net Sales, LICENSEE shall pay to CMCC *% of royalty income to LICENSEE from the Sublicensee with a minimum payment of *% of Net Sales for sales of the Licensed Product made or the practice of the Licensed Process by the Sublicensee. If the royalty rate paid by the Sublicensee is reduced because of third party, non-infringing sales of a Thalidomide analog, the minimum payment of at least *% of Net Sales of the Licensed Product will be reduced proportional to the reduction of the royalty rate paid to LICENSEE by the Sublicensee. Milestone payments from LICENSEE to CMCC shall be credited against CMCC's share of milestone payments made to LICENSEE by Sublicensee. 4.4 [Intentionally Omitted.] 4.5 No multiple royalties shall be payable because any Licensed Product, its manufacture, use, lease or sale, are or shall be covered by more than one of the Patent Rights licensed under this Agreement. 4.6 Royalty payments shall be paid in United States dollars in Boston, Massachusetts, or at such other place as CMCC may reasonably designate consistent with the laws and regulations controlling in any foreign country. If any currency conversion shall be required in connection with the payment of royalties hereunder, such conversion shall be made by using the exchange rate prevailing at the Fleet Bank of Boston on the last business day of the calendar quarterly reporting period to which such royalty payments relate.

Payments and Royalties. 4.1 For 3.1 In consideration of the rights, privileges licenses and license rights of ownership granted and to be granted hereunder, LICENSEE HGS will pay to DYAX within ten (10) days of the Effective Date six million U.S. dollars ($6,000,000), but not later than March 31, 2000. The parties agree that such amount represents a collaboration commitment of resources and costs of first year start-up activities (such activities to be managed by the Steering Committee) of two million U.S. dollars, a paid-up signing and annual fees under the DYAX PATENT RIGHTS of five hundred thousand U.S. dollars, and a paid up signing and annual fees under the DYAX TECHNOLOGY of three million five hundred thousand U.S. dollars. 3.2 Subject to Paragraphs 3.4 and 3.11, for each COLLABORATION PRODUCT or NON-COLLABORATION PRODUCT which is sold in the THERAPEUTIC FIELD, HGS shall pay to CMCC in DYAX the manner hereinafter provided to the end of the term of the Patent Rights or until following royalties and milestone payments (which milestone payments under this Agreement Paragraph 3.2 shall be terminated as hereinafter provided, whether the milestones are achieved under the sponsorship of CMCC, LICENSEE or a Sublicensee, the following milestone payments totaling $1,500,000 due and payable within thirty (one million and five hundred thousand dollars30) for each Licensed Product: 4.1.1 $* (* dollars) due * days after the applicable Product Notice Date milestone event is achieved by or on behalf of HGS or its AFFILIATE): Confidential material omitted and filed separately with the Securities and Exchange Commission. Asterisks denote such omissions. (a) upon the filing of an IND or upon the first in vivo testing in humans for such Licensed ProductCOLLABORATION PRODUCT or NON-COLLABORATION PRODUCT; 4.1.2 $* (* dollarsb) due *submission of the first Phase I/II IND (Investigational New Drug application) for any indication for such Licensed Product; 4.1.3 $* (* dollars) due * completion upon start of a Phase II III clinical trials for any indication trial (as defined in Section 3.14) for such Licensed ProductCOLLABORATION PRODUCT or NON-COLLABORATION PRODUCT; (c) upon the first regulatory approval in a MAJOR COUNTRY of such COLLABORATION PRODUCT or NON-COLLABORATION PRODUCT for commercial sale; (d) upon the second regulatory approval in a MAJOR COUNTRY of such COLLABORATION PRODUCT or NON-COLLABORATION PRODUCT for commercial sale; and 4.1.4 $(e) a royalty ************* (* dollars) due * submission of such COLLABORATION PRODUCT or NON-COLLABORATION PRODUCT sold by HGS or its AFFILIATES. HGS shall have no obligation to pay each milestone payment to DYAX under this Paragraph 3.2. more than once for each different COLLABORATION PRODUCT or NON-COLLABORATION PRODUCT. For purposes of determining the milestone payments owing under this Paragraph 3.2, a PLA (Product License Application) COLLABORATION PRODUCT or NON-COLLABORATION PRODUCT containing an NDA (New Drug Application) antibody directed to an HGS Target shall constitute the same COLLABORATION PRODUCT or NON-COLLABORATION PRODUCT as any other COLLABORATION PRODUCT or NON-COLLABORATION PRODUCT, if such COLLABORATION PRODUCT or NON-COLLABORATION PRODUCT contains an antibody directed to the same HGS TARGET as the other COLLABORATION PRODUCT or NON-COLLABORATION PRODUCT, without regard to the formulation or means of administration thereof. Similarly, a COLLABORATION PRODUCT or NON-COLLABORATION PRODUCT containing a peptide directed to an HGS Target shall constitute the same COLLABORATION PRODUCT or NON-COLLABORATION PRODUCT as any other COLLABORATION PRODUCT or NON-COLLABORATION PRODUCT, if such COLLABORATION PRODUCT or NON-COLLABORATION PRODUCT contains a peptide directed to the same HGS TARGET as the other COLLABORATION PRODUCT or NON-COLLABORATION PRODUCT, without regard to the formulation or means of administration thereof. If HGS develops and markets separate antibody and peptide products directed to the same HGS TARGET, HGS shall have an obligation to pay a full set of separate milestone payments for any indication for such Licensed Producteach class of products. 4.2 LICENSEE 3.3 Subject to Paragraphs 3.4 and 3.11, if HGS outlicenses a COLLABORATION PRODUCT or NON-COLLABORATION PRODUCT to a THIRD PARTY for sale in the THERAPEUTIC FIELD, HGS shall pay to CMCC DYAX, in lieu of milestones and royalties, the following: (a) NET REVENUE received by HGS from such outlicense, if the product is outlicensed prior to payment of the milestone owed pursuant to Paragraph 3.2(a); (b) NET REVENUE received by HGS from such outlicense, if the product is outlicensed after payment of the milestone owed pursuant to Paragraph 3.2(a), but prior to payment of the milestone owed pursuant to Paragraph 3.2(b); (c) NET REVENUE received by HGS from such outlicense, if the product is outlicensed after payment of the milestone owed pursuant to Paragraph 3.2(b). 3.4 For the sole purpose of determining royalties, milestones or revenue owed pursuant to Paragraphs 3.2 and 3.3, if a royalty based on the Net Sales with respect COLLABORATION PRODUCT or NON-COLLABORATION PRODUCT is jointly developed and marketed pursuant to the Licensed Products SB/HGS LICENSE AGREEMENT by HGS and SB together, SB shall be considered to be an AFFILIATE of HGS and the milestones and royalties set forth in Paragraph 3.2 shall apply to such product. HGS In Vitro Diagnostic and Research Reagent Products 3.5 Subject to Paragraph 3.11, for each COLLABORATION PRODUCT or Licensed Processes used, leased or NON-COLLABORATION PRODUCT which is sold by LICENSEEHGS or its AFFILIATES in the DIAGNOSTIC FIELD or the RESEARCH REAGENT FIELD, which said royalty shall be *% (* percent), or such lower rate as may be agreed upon in writing by the parties, of such Net Sales. 4.3 Where sublicenses have been granted, or strategic partnerships entered into, LICENSEE HGS shall pay to CMCC DYAX the following royalty: (a) a royalty of *% (************ percent) of any NET SALES of such COLLABORATION PRODUCT or NON-COLLABORATION PRODUCT sold by HGS or its AFFILIATES. No milestones shall be owed on such products. Confidential material omitted and all sublicensing paymentsfiled separately with the Securities and Exchange Commission. Asterisks denote such omissions. 3.6 Subject to Paragraph 3.11, if HGS outlicenses a COLLABORATION PRODUCT or such lower percentage as may be agreed upon NON-COLLABORATION PRODUCT to a THIRD PARTY for sale in writing by the parties. Sublicensing payments are defined as any and all payments made to LICENSEE by DIAGNOSTIC FIELD or the Sublicensee or strategic partner except for payments to support research and development conducted by LICENSEERESEARCH REAGENT FIELD, for purchases of equity, for payments for goods and services or for royalties based on the Net Sales with respect to the Licensed Product or Licensed Process. LICENSEE HGS shall pay to CMCC *% DYAX, in lieu of the royalty income paid to LICENSEE up to $* set forth in Paragraph 3.5, the following: (a) the portion of cumulative Net Sales with respect NET REVENUES received by HGS from such outlicense, which portion is attributable to the Licensed Product product outlicensed. The portion of revenue attributable to the product shall be calculated by multiplying the revenue received by the fraction A/(A+B), where A is the gross selling price of the product sold separately (i.e., without any other components) and B is the gross selling price of the components. In the event that no such separate sales are made of the product components, the portion shall be calculated by multiplying the revenue by the fraction C/(C+D) where C is the fully allocated cost of the product (not including the other components) and D is the fully allocated cost of the other components such costs being determined using generally accepted accounting procedures consistently applied. Thus, for example, if a research reagent is sold as a research chip, and the fully allocated cost of the chip is X and the fully allocated cost of the antibody on the chip, which antibody is a NON-COLLABORATION PRODUCT, is Y, ************. HGS Non-Dyax Products 3.7 Subject to Paragraphs 3.8 and 3.12, for each NON-DYAX PRODUCT which is sold by HGS, its AFFILIATES or Licensed Process. After $* of cumulative Net Salesits licensees, LICENSEE HGS shall pay to CMCC *% of DYAX the following royalty: (a) a royalty income to LICENSEE from the Sublicensee with a minimum payment of *% ************ NET SALES of Net Sales for sales such NON-DYAX PRODUCT sold by HGS, its AFFILIATES or its licensees in the THERAPEUTIC FIELD; and (b) a royalty of ************* NET SALES of such NON-DYAX PRODUCT sold by HGS, its AFFILIATES or its licensees in the Licensed Product made DIAGNOSTIC FIELD or the RESEARCH REAGENT FIELD. 3.8 In the event HGS is required to pay royalties on NET SALES of a NON-DYAX PRODUCT to any THIRD PARTY as a result of any patent license required for HGS to practice of the Licensed Process inventions claimed in the DYAX PATENT RIGHTS, HGS shall be permitted to offset such royalty payment against the royalty payments due DYAX on the same NET SALES, provided, however, that this offset shall be applied on a pro rata basis with any other offsets permitted by the Sublicensee. If the THIRD PARTY, and provided further that no royalty rate paid by the Sublicensee is reduced because of third party, non-infringing sales of a Thalidomide analog, the minimum payment of at least *% of Net Sales of the Licensed Product will due on any NET SALES shall be reduced proportional by more than *************. DYAX Products in the Imaging Field 3.9 Subject to Paragraph 3.13, for each COLLABORATION PRODUCT which is sold by DYAX or its AFFILIATES in the reduction IMAGING FIELD, DYAX shall pay to HGS the following royalty: (a) a royalty of ************* NET SALES of such COLLABORATION PRODUCT sold by DYAX or its AFFILIATES. No milestones shall be owed on such products. 3.10 Subject to Paragraph 3.13, if DYAX outlicenses a COLLABORATION PRODUCT to a THIRD PARTY for sale in the IMAGING FIELD, DYAX shall pay to HGS, in lieu of the royalty rate paid set forth in Paragraph 3.5, the following: (a) NET REVENUES received by DYAX from such outlicense, which portion is attributable to LICENSEE by the Sublicenseeproduct outlicensed. Milestone payments from LICENSEE to CMCC shall be credited against CMCC's share of milestone payments made to LICENSEE by Sublicensee*************. 4.4 [Intentionally Omitted.] 4.5 No multiple royalties shall be payable because any Licensed Product, its manufacture, use, lease or sale, are or shall be covered by more than one of the Patent Rights licensed under this Agreement. 4.6 Royalty payments shall be paid in United States dollars in Boston, Massachusetts, or at such other place as CMCC may reasonably designate consistent with the laws and regulations controlling in any foreign country. If any currency conversion shall be required in connection with the payment of royalties hereunder, such conversion shall be made by using the exchange rate prevailing at the Fleet Bank of Boston on the last business day of the calendar quarterly reporting period to which such royalty payments relate.