Common use of Royalty Calculation Clause in Contracts

Royalty Calculation. In partial consideration for the sale, assignment, and transfer of the Assets and the grant of the license under this Agreement, Corregidor shall pay to Alkermes the following Royalties for each Licensed Product (after giving effect to Sections 5.2.3 and 5.3, to the extent applicable): (i) for all Licensed Products sold by, on behalf of, or under the authority of Corregidor or its Affiliates (other than those Licensed Products sold by, on behalf of or under the authority of Corregidor’s Collaboration Partners), Corregidor will pay Alkermes [***] of Net Sales of such Licensed Products; and EXECUTION COPY (ii) for all Licensed Product sold by or on behalf of, or under the authority of a given Collaboration Partner, Corregidor will pay Alkermes the lower of: (A) [***] of Net Sales of such Licensed Products in a given Calendar Year, or (B) [***] of all Collaboration Partner Revenue received by or on behalf of Corregidor or its Affiliates from such Collaboration Partner in such Calendar Year, Notwithstanding the foregoing, for any Licensed Product sold by, on behalf of or under the authority of any such Collaboration Partner, Corregidor will not pay Alkermes less than [***] of Net Sales of such Licensed Products in a given Calendar Year. For clarity, sales of Licensed Products by Distributors shall not be included in Net Sales and shall not be subject to Royalty payments under this Section 5.2.1. Corregidor shall not enter into a transaction with a Collaboration Partner which is structured to require the Collaboration Partner to pay to Corregidor, its Affiliates, or any other designee of Corregidor or its Affiliates, Milestone Payments that are materially in excess of those typically included in comparable arrangements for similar pharmaceutical or biotechnology products of similar market potential (a “Trigger Transaction”). Upon entering into a transaction with a Collaboration Partner, whether pursuant to Sections 3.7 and 3.9 or otherwise, Corregidor shall promptly notify Alkermes thereof and provide Alkermes with a copy of the agreement governing such transaction. Within [***] of receiving any such agreement between Corregidor and a Collaboration Partner, if Alkermes believes that Corregidor has entered into a Trigger Transaction with such Collaboration Partner, it may submit the issue for resolution by binding arbitration in accordance with Section 11.2. If the arbitrator determines that Corregidor entered into a Trigger Transaction with a given Collaboration Partner, then Corregidor shall pay to Alkermes, beginning on the effective date of the Trigger Transaction, instead of the amount Corregidor is obligated to pay pursuant to the paragraph immediately preceding this paragraph, an amount equal to the lower of (X) [***] of Net Sales of the relevant Licensed Products sold by or on behalf of, or under authority of, such Collaboration Partner in a given Calendar Year; or (Y) (1) [***] of the Milestone Payments deemed to have caused the Trigger Transaction that are received by Corregidor or its Affiliates from such Collaboration Partner with respect to such Licensed Products in such Calendar Year, plus (2) [***] of all Collaboration Partner Revenue received by Corregidor or its Affiliates from such Collaboration Partner in such Calendar Year, but in any event not less than [***] of Net Sales of the relevant Licensed Products sold by or on behalf of, or under authority of, such Collaboration Partner in such Calendar Year. If the arbitrator determines that Corregidor did not enter into a Trigger Transaction, then Alkermes will receive the Royalty that it would have otherwise received pursuant to Section 5.2.1(ii) with respect to such Collaboration Partner. For clarity, this paragraph describes a mutually agreed upon exclusive mechanism for resolving disputes regarding Trigger Transactions, and accordingly, Alkermes may not terminate this Agreement under Section 10.2 solely on the basis that Corregidor entered into a Trigger Transaction.

Royalty Calculation. In partial consideration for the sale, assignment, and transfer of the Assets and the grant of the license under this Agreement, Corregidor shall pay to Alkermes the following Royalties for each Licensed Product (after giving effect to Sections 5.2.3 and 5.3, to the extent applicable): (i) for all Licensed Products sold by, on behalf of, or under the authority of Corregidor or its Affiliates (other than those Licensed Products sold by, on behalf of or under the authority of Corregidor’s Collaboration Partners), Corregidor will pay Alkermes [***] of Net Sales of such Licensed Products; and EXECUTION COPYand (ii) for all Licensed Product sold by or on behalf of, or under the authority of a given Collaboration Partner, Corregidor will pay Alkermes the lower of: (A) [***] of Net Sales of such Licensed Products in a given Calendar Year, or (B) [***] of all Collaboration Partner Revenue received by or on behalf of Corregidor or its Affiliates from such Collaboration Partner in such Calendar Year, Notwithstanding the foregoing, for any Licensed Product sold by, on behalf of or under the authority of any such Collaboration Partner, Corregidor will not pay Alkermes less than [***] of Net Sales of such Licensed Products in a given Calendar Year. For clarity, sales of Licensed Products by Distributors shall not be included in Net Sales and shall not be subject to Royalty payments under this Section 5.2.1. Certain portions of this Exhibit have been omitted pursuant to a confidential treatment request. Such omitted portions, which are marked with brackets [ ] and an asterisk*, have been separately filed with the Commission. Corregidor shall not enter into a transaction with a Collaboration Partner which is structured to require the Collaboration Partner to pay to Corregidor, its Affiliates, or any other designee of Corregidor or its Affiliates, Milestone Payments that are materially in excess of those typically included in comparable arrangements for similar pharmaceutical or biotechnology products of similar market potential (a “Trigger Transaction”). Upon entering into a transaction with a Collaboration Partner, whether pursuant to Sections 3.7 and 3.9 or otherwise, Corregidor shall promptly notify Alkermes thereof and provide Alkermes with a copy of the agreement governing such transaction. Within [***] of receiving any such agreement between Corregidor and a Collaboration Partner, if Alkermes believes that Corregidor has entered into a Trigger Transaction with such Collaboration Partner, it may submit the issue for resolution by binding arbitration in accordance with Section 11.2. If the arbitrator determines that Corregidor entered into a Trigger Transaction with a given Collaboration Partner, then Corregidor shall pay to Alkermes, beginning on the effective date of the Trigger Transaction, instead of the amount Corregidor is obligated to pay pursuant to the paragraph immediately preceding this paragraph, an amount equal to the lower of (X) [***] of Net Sales of the relevant Licensed Products sold by or on behalf of, or under authority of, such Collaboration Partner in a given Calendar Year; or (Y) (1) [***] of the Milestone Payments deemed to have caused the Trigger Transaction that are received by Corregidor or its Affiliates from such Collaboration Partner with respect to such Licensed Products in such Calendar Year, plus (2) [***] of all Collaboration Partner Revenue received by Corregidor or its Affiliates from such Collaboration Partner in such Calendar Year, but in any event not less than [***] of Net Sales of the relevant Licensed Products sold by or on behalf of, or under authority of, such Collaboration Partner in such Calendar Year. If the arbitrator determines that Corregidor did not enter into a Trigger Transaction, then Alkermes will receive the Royalty that it would have otherwise received pursuant to Section 5.2.1(ii) with respect to such Collaboration Partner. For clarity, this paragraph describes a mutually agreed upon exclusive mechanism for resolving disputes regarding Trigger Transactions, and accordingly, Alkermes may not terminate this Agreement under Section 10.2 solely on the basis that Corregidor entered into a Trigger Transaction.