Common use of Reverse Royalty Clause in Contracts

Reverse Royalty. If this Agreement is terminated in its entirety by Licensee pursuant to Section 12.2.1, 12.3.1, or 12.4, or by Licensor pursuant to Section 12.4, in consideration of the licenses granted and other consideration provided to Licensor pursuant to Section 12.6 or 12.7, as the case may be, Licensor shall pay Licensee a royalty on Net Sales of each Licensed Product in each country in the Terminated Territory during the Reverse Royalty Term for such Licensed Product in such country at the following percentage rates: (i) if the effective date of termination occurs prior to the completion of the first Phase III Clinical Study for such Licensed Product (for the Licensed Product containing the Initial Licensed Compound, such first Phase III Clinical Study shall be the Diabetic CKD Study), no revers royalty shall be due; (ii) if the effective date of termination occurs after the completion of such Phase III Clinical Study but prior to filing of the first MAA for a Licensed Product in the European Union, three percent (3%) of Net Sales of such Licensed Product; and (iii) if the effective date of termination occurs on or after such filing of the first MAA for a Licensed Product in the European Union but prior to the First Commercial Sale of a Licensed Product in any country in the European Union, five percent (5%) of Net Sales of such Licensed Product; and (iv) if the effective date of termination occurs on or after the First Commercial Sale of a Licensed Product in any country in the European Union, eight percent (8%) of Net Sales of such Licensed Product. For purposes of this Section 12.8, the definition of “Net Sales,” and Sections 6.3 through 6.9 shall apply mutatis mutandis to the calculation, payment, recording, and auditing of Licensor’s obligations to pay royalties under this Section 12.8 as they apply to Licensee and, solely for such purpose, each reference in each such Section (and any related definitions) to (A) Licensee shall be deemed to be a reference to Licensor, and (B) a Sublicensee shall be deemed to be a reference to a licensee or sublicensee of Licensor or its Affiliates.

Reverse Royalty. If this Agreement is terminated in its entirety by Licensee pursuant to Section 12.2.1, 12.3.1, or 12.4, or by Licensor pursuant to Section 12.4, in consideration of the licenses granted and other consideration provided to Licensor pursuant to Section 12.6 or 12.7, as the case may be, Licensor shall pay Licensee a royalty on Net Sales of each Licensed Product in each country in the Terminated Territory during the Reverse Royalty Term for such Licensed Product in such country at the following percentage rates: (i) if the effective date of termination occurs prior to the completion of the first Phase III Clinical Study for such Licensed Product (for the Licensed Product containing the Initial Licensed Compound, such first Phase III Clinical Study shall be the Diabetic CKD Study), no revers reverse royalty shall be due; (ii) if the effective date of termination occurs after the completion of such Phase III Clinical Study but prior to filing of the first MAA for a Licensed Product in the European Union, three [***] percent (3[***]%) of Net Sales of such Licensed Product; and (iii) if the effective date of termination occurs on or after such filing of the first MAA for a Licensed Product in the European Union but prior to the First Commercial Sale of a Licensed Product in any country in the European Union, five [***] percent (5[***]%) of Net Sales of such Licensed Product; and (iv) if the effective date of termination occurs on or after the First Commercial Sale of a Licensed Product in any country in the European Union, eight [***] percent (8[***]%) of Net Sales of such Licensed Product. For purposes of this Section 12.8, the definition of “Net Sales,” and Sections 6.3 through 6.9 shall apply mutatis mutandis to the calculation, payment, recording, and auditing of Licensor’s obligations to pay royalties under this Section 12.8 as they apply to Licensee and, solely for such purpose, each reference in each such Section (and any related definitions) to (A) Licensee shall be deemed to be a reference to Licensor, and (B) a Sublicensee shall be deemed to be a reference to a licensee or sublicensee of Licensor or its Affiliates.