Common use of Royalty Adjustments Clause in Contracts

Royalty Adjustments. Upon request by Kidde from time to time, the parties agree to enter into good faith discussions to determine whether the royalty rate set forth in subsection (a) above should be reduced, on a product by product and/or worldwide or country by country basis, either: (i) with respect to specific large contracts or sales opportunities; provided, however, that in the event a such a reduced royalty rate is agreed to, any Equivalized Gallons of Product Sold under any such contract or opportunity shall not count towards the volume breakpoints set forth in Section 6.3(a), until such time as the royalty rate established under 6.3(a) is *** the royalty rate under such contract or opportunity, at which point the total cumulative amount of Equivalized Gallons of Product previously Sold under such contract or opportunity shall count (and any additional Equivalized Gallons of Product Sold shall continue to count) towards such volume breakpoints; and/or (ii) because of material changes or developments in the commercial environment adversely affecting profitability. Material changes or developments in the commercial environment would include, but not be limited to, situations where (i) lower selling prices are necessary to effectively compete with competitive products, and as a result reduce profitability; (ii) the co-ownership by any United States government agency or other Third Party in the USGN Patent Rights, the Joint Patent Rights and/or the USGN Know-How legally or effectively reduces or limits Kidde's ability to derive the full benefit of the rights granted to Kidde under Section 2.1 of this Agreement, and/or (iii) any Third Party's patent *** CONFIDENTIAL TREATMENT REQUESTED or patent application legally or effectively reduces or limits Kidde's ability to derive the full benefit of the rights granted to Kidde under Section 2.1 of this Agreement. Notwithstanding the foregoing, in the event that (i) the USGN Patent Rights or Joint Patent Rights do not Cover the manufacture, import, use, sale or offer for sale of a Product and/or (ii) no patents have issued by ***, with respect to Product covered by the information and discoveries claimed in ***, the parties shall in good faith, *** the rate of the Royalty on a product by product basis and/or worldwide or country by country basis, to be commercially competitive with the cost of alternative sources of supply.

Royalty Adjustments. Upon request Notwithstanding anything herein to the contrary, if, as of any date during the Royalty Term, there shall be no Valid Claim Covering a Company Product in a country where such Company Product is sold by Kidde a Party or its Sublicensees, and no Valid Claim of any Closing Date IP Covering the Manufacture of Company Product where the active pharmaceutical ingredient of such Company Product is manufactured by or on behalf of a Party or its Sublicensees (the first such date, with respect to such Company Product in such country, being the “Fall-Away Date”), then for purposes of calculating royalties on Company Product Net Sales under this Royalty Agreement, Company Product Net Sales of such Company Product in such country shall be excluded from time and after the Fall-Away Date for such Company Product in such country; provided that, in the event any Fall-Away Date does not occur on the last day of a Calendar Quarter, such Fall-Away Date shall be deemed to timehave occurred with respect to the relevant Company Product in the relevant country on the last day of the Calendar Quarter in which the Fall-Away Date occurs. In the event that a Party or any of its Sublicensees shall be required to pay any consideration or royalties for a license or rights to any Blocking Third Party Intellectual Property or Enhancing Third Party Intellectual Property during any calendar year, the parties agree Company shall be entitled to enter into good faith discussions deduct fifty percent (50%) of such consideration or royalties actually paid to determine whether any third party for such license or rights from the royalty rate set forth royalties otherwise accruing under this Royalty Agreement in subsection (a) above should be reduced, on a product by product and/or worldwide or country by country basis, either: respect of such calendar year; provided that (i) with no such deduction shall apply for any consideration or royalties paid in respect to specific large contracts or sales opportunities; provided, however, that in the event a such a reduced royalty rate is agreed to, of any Equivalized Gallons of Product Sold under any such contract or opportunity shall not count towards the volume breakpoints patent rights set forth in Section 6.3(a)on Schedule 4 hereto, until such time as the royalty rate established under 6.3(a) is *** the royalty rate under such contract including any Blocking Third Party Intellectual Property or opportunity, at which point the total cumulative amount of Equivalized Gallons of Product previously Sold under such contract or opportunity shall count (and any additional Equivalized Gallons of Product Sold shall continue to count) towards such volume breakpoints; and/or (ii) because of material changes or developments in the commercial environment adversely affecting profitability. Material changes or developments in the commercial environment would include, but not be limited to, situations where (i) lower selling prices are necessary to effectively compete with competitive productsEnhancing Third Party Intellectual Property set forth on Schedule 4 hereto, and as a result reduce profitability; (ii) the coaggregate amount of any and all deductions under this sentence for any calendar year shall not be greater than an amount which would have the effect of decreasing the royalties otherwise accruing hereunder in respect of such calendar year by more than twenty-ownership by any United States government agency or other five percent (25%). Any deduction the Company seeks from royalties accruing under this Royalty Agreement for non-monetary consideration paid for Blocking Third Party in the USGN Patent Rights, the Joint Patent Rights and/or the USGN Know-How legally Intellectual Property or effectively reduces or limits Kidde's ability to derive the full benefit of the rights granted to Kidde under Section 2.1 of this Agreement, and/or (iii) any Enhancing Third Party's patent *** CONFIDENTIAL TREATMENT REQUESTED or patent application legally or effectively reduces or limits Kidde's ability to derive the full benefit of the rights granted to Kidde under Section 2.1 of this Agreement. Notwithstanding the foregoing, in the event that (i) the USGN Patent Rights or Joint Patent Rights do not Cover the manufacture, import, use, sale or offer for sale of a Product and/or (ii) no patents have issued by ***, with respect to Product covered Party Intellectual Property shall be at such consideration’s fair monetary value as mutually determined by the information Company and discoveries claimed in ***, the parties shall Lucky Sub-2 in good faith. Except as set forth in this Section 4B or as required by law, *** the rate of the royalties accruing under this Royalty on a product by product basis and/or worldwide or country by country basis, Agreement shall not be subject to be commercially competitive with the cost of alternative sources of supplyany downward adjustment.

Royalty Adjustments. Upon request Notwithstanding anything herein to the contrary, if, as of any date during the Royalty Term, there shall be no Valid Claim of any Closing Date IP Covering a Product in a country where such Product is sold by Kidde a Party or its Sublicensees, and no Valid Claim of any Closing Date IP Covering the Manufacture of Product where the R&D Candidate or other active pharmaceutical ingredient of such Product is manufactured by or on behalf of a Party or its Sublicensees, under the Collaboration Agreement (the first such date, with respect to such Product in such country, being the “Fall-Away Date”), then for purposes of calculating royalties on Collaboration Product Net Sales under this Royalty Agreement, Collaboration Product Net Sales of such Product in such country shall be excluded from time and after the Fall-Away Date for such Product in such country; provided that, in the event any Fall-Away Date does not occur on the last day of a Calendar Quarter, such Fall-Away Date shall be deemed to timehave occurred with respect to the relevant Product in the relevant country on the last day of the Calendar Quarter in which the Fall-Away Date occurs. In the event that a Party or any of its Sublicensees under the Collaboration Agreement shall be required to pay any consideration or royalties for a license or rights to any Blocking Third Party Intellectual Property or Enhancing Third Party Intellectual Property during any calendar year, the parties agree Company shall be entitled to enter into good faith discussions deduct fifty percent (50%) of such consideration or royalties actually paid to determine whether any third party for such license or rights from the royalty rate set forth royalties otherwise accruing under this Royalty Agreement in subsection (a) above should be reduced, on a product by product and/or worldwide or country by country basis, either: respect of such calendar year; provided that (i) with no such deduction shall apply for any consideration or royalties paid in respect to specific large contracts or sales opportunities; provided, however, that in the event a such a reduced royalty rate is agreed to, of any Equivalized Gallons of Product Sold under any such contract or opportunity shall not count towards the volume breakpoints patent rights set forth in Section 6.3(a)on Schedule 4 hereto, until such time as the royalty rate established under 6.3(a) is *** the royalty rate under such contract including any Blocking Third Party Intellectual Property or opportunity, at which point the total cumulative amount of Equivalized Gallons of Product previously Sold under such contract or opportunity shall count (and any additional Equivalized Gallons of Product Sold shall continue to count) towards such volume breakpoints; and/or (ii) because of material changes or developments in the commercial environment adversely affecting profitability. Material changes or developments in the commercial environment would include, but not be limited to, situations where (i) lower selling prices are necessary to effectively compete with competitive productsEnhancing Third Party Intellectual Property set forth on Schedule 4 hereto, and as a result reduce profitability; (ii) the coaggregate amount of any and all deductions under this sentence for any calendar year shall not be greater than an amount which would have the effect of decreasing the royalties otherwise accruing hereunder in respect of such calendar year by more than twenty-ownership by any United States government agency or other five percent (25%). Any deduction the Company seeks from royalties accruing under this Royalty Agreement for non-monetary consideration paid for Blocking Third Party in the USGN Patent Rights, the Joint Patent Rights and/or the USGN Know-How legally Intellectual Property or effectively reduces or limits Kidde's ability to derive the full benefit of the rights granted to Kidde under Section 2.1 of this Agreement, and/or (iii) any Enhancing Third Party's patent *** CONFIDENTIAL TREATMENT REQUESTED or patent application legally or effectively reduces or limits Kidde's ability to derive the full benefit of the rights granted to Kidde under Section 2.1 of this Agreement. Notwithstanding the foregoing, in the event that (i) the USGN Patent Rights or Joint Patent Rights do not Cover the manufacture, import, use, sale or offer for sale of a Product and/or (ii) no patents have issued by ***, with respect to Product covered Party Intellectual Property shall be at such consideration’s fair monetary value as mutually determined by the information Company and discoveries claimed in ***, the parties shall Lucky Sub-2 in good faith. Except as set forth in this Section 4A or as required by law, *** the rate of the royalties accruing under this Royalty on a product by product basis and/or worldwide or country by country basis, Agreement shall not be subject to be commercially competitive with the cost of alternative sources of supplyany downward adjustment.