Common use of Royalty Reduction Clause in Contracts

Royalty Reduction. If ArriVent and/or its Affiliates or Sublicensees obtain from a Third Party a license under any Patent right that, absent a license thereunder, would be infringed by the Research, Development, Manufacture, or Commercialization of any Compound or Product in a jurisdiction (i.e., a “blocking patent”), to the extent such infringement arises from or relates to the antibody sequences, linker and/or payloads of such Compound or Product, ArriVent shall (i) notify Aarvik of such license at least [***] ([***]) days prior to the execution of such license and allow Aarvik to provide feedback regarding same within such period prior to execution of such license, and (ii) have the right to deduct [***] percent ([***]%) of any royalty or other payment due under such license with the Third Party from the royalty owing to Aarvik for the applicable Product in such jurisdiction under Section 6.5. Notwithstanding the foregoing, in no event shall the reduction permitted in this Section 6.5.3 reduce the payment due to Aarvik with respect to the sale of the applicable Product in such jurisdiction for any Calendar Quarter by more than [***] percent ([***]%) of the total payment that would have been payable prior to such reduction; provided that any credits earned under this Section 6.5.3 by reason of payments to Third Party licensors that may not be used to offset the royalty payment due to Aarvik as a result of the foregoing limitation may be carried to and applied to reduce royalty payments in future Calendar Quarters. [***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

Royalty Reduction. If ArriVent and/or (i) Company, in its Affiliates or Sublicensees reasonable judgment, determines that it is required to obtain a license from a any Third Party in order to avoid infringement of such Third Party’s Patent Rights as a license under any result of the practice of the BMS Patent right thatRights and/or the BMS Know-How in connection with the research, absent a license thereunder, would be infringed by the Research, Development, Manufacture, Development or Commercialization of any Compound Licensed Product, (ii) such Patent Rights cover or Product claim the composition or method of use, of a Licensed Product, and (iii) Company is required to pay to such Third Party a royalty, milestone payments or other monetary compensation in a jurisdiction consideration for the grant or maintenance of such license (i.e., a “blocking patentThird Party Compensation”), then for the period during which Company owes royalties to BMS hereunder, the extent such infringement arises from or relates amounts that would otherwise have been payable as royalties to the antibody sequences, linker and/or payloads of such Compound or Product, ArriVent BMS under this Agreement shall (i) notify Aarvik of such license at least be reduced by [*** * *] ([***]) days prior to the execution of such license and allow Aarvik to provide feedback regarding same within such period prior to execution of such license, and (ii) have the right to deduct [***] percent ([***]%) of any royalty or other payment due under such license with the all Third Party from the royalty owing Compensation payable by or on behalf of Company to Aarvik for the applicable Product in such jurisdiction under Section 6.5Third Party. Notwithstanding the foregoing, in no event shall the reduction permitted royalty reductions described in this Section 6.5.3 8.4.4 act to reduce the payment due royalties payable by Company to Aarvik less than [* * *] of the amounts payable by Company for a given Calendar Quarter pursuant to Section 8.4.1. For clarity, this credit will not apply with respect to Third Party patent rights covering formulation or method of manufacture of a Licensed Compound or Licensed Product. For clarity, Company may not carry over and apply any such royalty reductions, which are incurred or accrued in a Calendar Quarter and are not deducted in such Calendar Quarter, to any subsequent Calendar Quarter(s). Notwithstanding the sale of foregoing, if the royalty rates have been reduced in a given country due to patent no longer covering the applicable Licensed Product as set forth in such jurisdiction for any Calendar Quarter by more than [***] percent ([***]%) Section 8.4.2, the provisions of the total payment that would have been payable prior to such reduction; provided that any credits earned under this Section 6.5.3 by reason of payments to Third Party licensors that may 8.4.4 will not be used to offset the royalty payment due to Aarvik as a result of the foregoing limitation may be carried to and applied to reduce royalty payments in future Calendar Quarters. [***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIALapply for such country.

Royalty Reduction. If ArriVent and/or its Affiliates In the event Company determines that it will be necessary or Sublicensees useful to obtain from a additional licenses to patent rights of third parties (“Additional Third Party Licenses”) that cover the applicable Licensed Compound in such Licensed Product as a license under composition of matter or method of use in order to research, develop, manufacture and/or commercialize the Licensed Compounds or the Licensed Products, Company will be solely responsible for negotiating and obtaining any Patent right that, absent a license thereunder, would such Additional Third Party Licenses but will not be infringed by the Research, Development, Manufacture, or Commercialization of any Compound or Product in a jurisdiction (i.e., a “blocking patent”), obligated to the extent such infringement arises from or relates do so. Up to the antibody sequences, linker and/or payloads of such Compound or Product, ArriVent shall (i) notify Aarvik of such license at least [***] ([***]) days prior to the execution of such license and allow Aarvik to provide feedback regarding same within such period prior to execution of such license, and (ii) have the right to deduct [***] percent ([***]%) of any royalty royalties (but not upfront payments or other payment due milestones) paid under any such license with the Additional Third Party from Licenses will be credited towards the royalty owing payment above but not to Aarvik for the applicable Product in such jurisdiction under Section 6.5. Notwithstanding the foregoing, in no event shall the reduction permitted in this Section 6.5.3 reduce the payment due to Aarvik with respect to the sale of the applicable Product in such jurisdiction for any Calendar Quarter by more than [***] percent ([***]%) of the total payment that would royalty amounts otherwise due and payable to BMS in relation to the Licensed Compound or Licensed Product for which the Additional Third Party Licenses were obtained by Company. For clarity, this credit will not apply with respect to third party patent rights covering the formulation or method of manufacture of a Licensed Compound or Licensed Product or the other active ingredient of a Combination Product. Notwithstanding the foregoing, if the royalty rates have been payable prior reduced in a given country due to such reduction; provided that any credits earned under this Section 6.5.3 by reason of payments to a BMS Patent Right no longer covering the Licensed Product, then no additional offset for Additional Third Party licensors that may not License payments will be used to offset allowed for such country. Notwithstanding the royalty payment reductions based on lack of a BMS Patent Right covering a Licensed Product, and/or third party license payments, under no circumstances will the royalty payments due to Aarvik as a result of the foregoing limitation may BMS for any Licensed Product in any given period be carried to and applied to reduce royalty payments in future Calendar Quarters. less than [***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENTof the rate/payment otherwise applicable. For clarity, MARKED BY BRACKETSCompany may not carry over and apply any such royalty reductions, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIALwhich are incurred or accrued in a Calendar Quarter and are not deducted in such Calendar Quarter, to any subsequent Calendar Quarter(s).

Royalty Reduction. If ArriVent and/or (i) Company, in its Affiliates or Sublicensees reasonable judgment, determines that it is required to obtain a license from a any Third Party in order to avoid infringement of a license under any Valid Claim of such Third Party’s Patent right thatRights as a result of the practice of the BMS Patent Rights and/or the BMS Know-How in connection with the research, absent a license thereunder, would be infringed by the Research, Development, Manufacture, Development or Commercialization of any Compound Licensed Product, (ii) such Valid Claim claims the composition or Product a method of use on which the Company has obtained or is seeking to obtain approval from a Regulatory Authority, and (iii) Company is required to pay to such Third Party a royalty, milestone payments or other monetary compensation in a jurisdiction consideration for the grant or maintenance of such license (i.e., a “blocking patentThird Party Compensation”), then for the period during which Company owes royalties to BMS hereunder, the extent such infringement arises from or relates amounts that would otherwise have been payable as royalties to the antibody sequences, linker and/or payloads of such Compound or Product, ArriVent BMS under this Agreement shall (i) notify Aarvik of such license at least be reduced by [***] ([***]) days prior to the execution of such license and allow Aarvik to provide feedback regarding same within such period prior to execution of such license, and (ii) have the right to deduct [***] percent ([***]%) of any royalty or other payment due under such license with the all Third Party from the royalty owing Compensation payable by or on behalf of Company to Aarvik for the applicable Product in such jurisdiction under Section 6.5Third Party. Notwithstanding the foregoing, in no event shall the reduction permitted royalty reductions described in this Section 6.5.3 8.3.4 act to reduce the payment due royalties payable by Company to Aarvik with respect to the sale of the applicable Product in such jurisdiction for any Calendar Quarter by more less than [***] percent (of the amounts payable by Company for a given Calendar Quarter pursuant to Section 8.3.1. For clarity, this credit will not apply with respect to Valid Claims of Third Party Patent Rights that claim a formulation or method of manufacture of a Licensed Adnectin or Licensed Product. For clarity, Company may not carry over and apply any such royalty reductions, which are incurred or accrued in a Calendar Quarter and are not deducted in such Calendar Quarter, to any subsequent Calendar Quarter(s). Notwithstanding the foregoing, if the royalty rates have been reduced in a given country due to lack of BMS Patent Rights for the applicable Licensed Product as set forth in Section 8.3.2, the provisions of this Section 8.3.4 will not apply for such country. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]%) of the total payment that would have been payable prior to such reduction; provided that any credits earned under this Section 6.5.3 by reason of payments to Third Party licensors that may not be used to offset the royalty payment due to Aarvik as a result of the foregoing limitation may be carried to and applied to reduce royalty payments in future Calendar Quarters. [A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. 31 ***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (IText Omitted and Filed Separately Confidential Treatment Requested Under 17 C.F.R. §§200.80(B)(4) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.and 230.406