Common use of Royalty Stacking Clause in Contracts

Royalty Stacking. AstraZeneca shall have the right to reduce the amount of (A) royalties owing to Targacept under Section 6.6.1(a) (as such royalties may be adjusted pursuant to the other provisions of this Section 6.6.1(d) and Section 10.2.4 and 10.2.6) and (B) royalties or other payments owing to Targacept under Section 6.6.1(c) (as such payments may be adjusted pursuant to the other provisions of this Section 6.6.1(d) and Section 10.2.4 and 10.2.6), in each case, for any Product by [********] of the amount of royalties (if any), or other amounts (including license fees and milestones) paid by AstraZeneca or any of its Affiliates (including on behalf of any Sublicensee) or, solely with respect to Other Licensed Products, Sublicensees, to any Third Party in consideration for the license of Patent Rights in any country if, at the time such license was granted such Patent Rights would, or might reasonably be expected to, be infringed by the Exploitation of the Product in the Territory in the Field or, if the Product is being Developed for Schizophrenia, Schizophrenia in the absence of such a license (for clarity, payments by AstraZeneca to such Third Party with respect to AZ Net Sales by AstraZeneca and its Affiliates shall only be applied to reduce the amounts owing to Targacept under Section 6.6.1(a) and payments by AstraZeneca or its Affiliates to such Third Party with respect to AZ Net Sales by AstraZeneca’s or its Affiliates’ Sublicensees shall only be applied to reduce the amounts owed to Targacept under Section 6.6.1(c)); provided, however, that, except as otherwise provided in the next proviso, in no event shall the royalties owed under Section 6.6.1(a) (and not Section 6.6.1(c), which shall not be subject to this [********] limitation) with respect to a Product in a country be reduced solely by operation of this Section 6.6.1(d)(2), together with Section 10.2.4 and 10.2.6, by more than [********] of what would otherwise be owed under 6.6.1(a) (as such royalties may be adjusted pursuant to the other provisions of this Section 6.6.1(d)) with respect to such Product; and provided further that to the extent that the need for any such license arises from or relates to a breach by Targacept of its representations and warranties under this Agreement with respect to a Collaboration Compound, Candidate Drug or Product, and notwithstanding Sections 10.2.4 and 10.2.6 and the preceding proviso, [********] of any such royalties, license fees or milestones with respect to such Collaboration Compound, Candidate Drug or Product may be credited against such royalties under clause (A) or royalties or other payments under clause (B), above, as well as against any milestones under Section 6.5 with respect to such Collaboration Compound, Candidate Drug or Product. For purposes of this Section 6.6.1(d)(2), the amount of royalties owing to Targacept under Section 6.6.1(a) (as such royalties may be adjusted pursuant to the other provisions of this Section 6.6.1(d) and Sections 10.2.4 and 10.2.6) for Net Sales of any Product in a given country shall be deemed to be that amount which would be owed if Net Sales of such Product in such country subject to each of the royalty rates under Section 6.6.1(a) (as such royalty rates may be adjusted pursuant to the other provisions of this Section 6.6.1(d)) were proportional to Net Sales of such Products in all countries subject to each of the royalty rates under Section 6.6.1(a).

Royalty Stacking. AstraZeneca shall have the right to reduce the The amount of (A) royalties owing to Targacept ARIAD under Section 6.6.1(a) (as such royalties may be adjusted pursuant to the other provisions of this Section 6.6.1(d) and Section 10.2.4 and 10.2.64.6.1(a)(i) and (B) royalties or other payments owing to Targacept ARIAD under Section 6.6.1(c) (as such payments may be adjusted pursuant to the other provisions of this Section 6.6.1(d) and Section 10.2.4 and 10.2.64.6.1(b)(i), in each case, for any Royalty-Bearing Product by in any country, shall be [***] percent ([*****] ]%) of the amount of royalties (if any), or other amounts (including license fees and milestones) paid incurred by AstraZeneca MERCK or any of its Affiliates (including on behalf of any Sublicensee) or, solely with respect to Other Licensed Products, Sublicensees, to any Third Party in consideration for the license of Patent Rights in any such country if, at the time such license was granted of sale of the Royalty-Bearing Product such Patent Rights would, or might reasonably be expected to, would be infringed by the Exploitation use, sale or import of the Royalty-Bearing Product in the Territory such country in the Field or, if the Product is being Developed for Schizophrenia, Schizophrenia in the absence of such a license (for clarity, payments by AstraZeneca to such Third Party with respect to AZ Net Sales by AstraZeneca and its Affiliates shall only be applied to reduce the amounts owing to Targacept under Section 6.6.1(a) and payments by AstraZeneca or its Affiliates to such Third Party with respect to AZ Net Sales by AstraZeneca’s or its Affiliates’ Sublicensees shall only be applied to reduce the amounts owed to Targacept under Section 6.6.1(c))license; provided, however, that, except as otherwise provided in the next proviso, that in no event shall the royalties owed under Section 6.6.1(a4.6.1(a)(i) (and not or Section 6.6.1(c4.6.1(b)(i), which shall not be subject to this [********] limitation) with respect to a Royalty-Bearing Product in a country be reduced solely by operation of this Section 6.6.1(d)(24.6.1(e), together with either Section 10.2.4 and 10.2.64.6.1(a)(ii) or Section 4.6.1(b)(ii), by more than [***] percent ([*****] ]%) of what would otherwise be owed under 6.6.1(a4.6.1(a)(i) (as such royalties may be adjusted pursuant to the other provisions of this or Section 6.6.1(d)4.6.1(b)(i) with respect to such Product; and provided further that to the extent that the need for any such license arises from or relates to a breach by Targacept of its representations and warranties under this Agreement with respect to a Collaboration Compound, Candidate Drug or Product, and notwithstanding Sections 10.2.4 and 10.2.6 and the preceding proviso, [********] of any such royalties, license fees or milestones with respect to such Collaboration Compound, Candidate Drug or Product may be credited against such royalties under clause (A) or royalties or other payments under clause (B), above, as well as against any milestones under Section 6.5 with respect to such Collaboration Compound, Candidate Drug or Royalty-Bearing Product. For purposes of this Section 6.6.1(d)(24.6.1(e), the amount of royalties owing to Targacept ARIAD under Section 6.6.1(a4.6.1(a)(i) (as such royalties may be adjusted pursuant to the other provisions of this or Section 6.6.1(d) and Sections 10.2.4 and 10.2.64.6.1(b)(i) for Annual Net Sales of any Royalty-Bearing Product in a given country shall (prior to the [***]% [***] provided for herein)shall be deemed to be that amount which would be owed if Annual Net Sales of such Royalty-Bearing Product in such country subject to each of the royalty rates under Section 6.6.1(a4.6.1(a)(i) (as such royalty rates may be adjusted pursuant to the other provisions of this or Section 6.6.1(d)4.6.1(b)(i) were proportional to Net Sales of such Royalty-Bearing Products in all countries subject to each royalties under Section 4.6.1(a)(i) or Section 4.6.1(b)(i). For clarity, an example of the application of the preceding sentence is as follows: If sales in a calendar year in countries in the ROW Territory without royalty rates under Section 6.6.1(a)owed to Third Parties are $[***] [***] and sales in countries in the ROW Territory with a [***] percent ([***]%) royalty owed to Third Parties are $[***], the royalties will be $[***], calculated as follows: ($[***] [***] x [***]% + [***] x [***]%) + ($[***] x [***]% + [***] x [***]%) = $[***].

Royalty Stacking. AstraZeneca shall have the right to reduce the amount of (A) royalties owing to Targacept under Section 6.6.1(a) (as such royalties may be adjusted pursuant to the other provisions of this Section 6.6.1(d) and Section 10.2.4 and 10.2.6) and (B) royalties or other payments owing to Targacept under Section 6.6.1(c) (as such payments may be adjusted pursuant to the other provisions of this Section 6.6.1(d) and Section 10.2.4 and 10.2.6), in each case, for any Product by [********] of the amount of royalties (if any), or other amounts (including license fees and milestones) paid by AstraZeneca or any of its Affiliates (including on behalf of any Sublicensee) or, solely with respect to Other Licensed Products, Sublicensees, to any Third Party in consideration for the license of Patent Rights in any country if, at the time such license was granted such Patent Rights would, or might reasonably be expected to, be infringed by the Exploitation of the Product in the Territory in the Field or, if the Product is being Developed for Schizophrenia, Schizophrenia in the absence of such a license (for clarity, payments by AstraZeneca to such Third Party with respect to AZ Net Sales by AstraZeneca and its Affiliates shall only be applied to reduce the amounts owing to Targacept under Section 6.6.1(a) [********] and payments by AstraZeneca or its Affiliates to such Third Party with respect to AZ Net Sales by AstraZeneca’s or its Affiliates’ Sublicensees shall only be applied to reduce the amounts owed to Targacept under Section 6.6.1(c))[********]; provided, however, that, except as otherwise provided in the next proviso, in no event shall the royalties owed under Section 6.6.1(a) (and not Section 6.6.1(c), which shall not be subject to this [********] limitation) with respect to a Product in a country be reduced solely by operation of this Section 6.6.1(d)(2), together with Section 10.2.4 and 10.2.6, by more than [********] of what would otherwise be owed under 6.6.1(a) (as such royalties may be adjusted pursuant to the other provisions of this Section 6.6.1(d)) with respect to such Product; and provided further that to the extent that the need for any such license arises from or relates to a breach by Targacept of its representations and warranties under this Agreement with respect to a Collaboration Compound, Candidate Drug or Product[********], and notwithstanding Sections 10.2.4 and 10.2.6 and the preceding proviso, [********] of any such royalties, license fees or milestones with respect to such Collaboration Compound, Candidate Drug or Product may be credited against such royalties under clause (A) or royalties or other payments under clause (B), above, as well as against any milestones under Section 6.5 with respect to such Collaboration Compound, Candidate Drug or Product. For purposes of this Section 6.6.1(d)(2), the amount of royalties owing to Targacept under Section 6.6.1(a) (as such royalties may be adjusted pursuant to the other provisions of this Section 6.6.1(d) and Sections 10.2.4 and 10.2.6) for Net Sales of any Product in a given country shall be deemed to be that amount which would be owed if Net Sales of such Product in such country subject to each of the royalty rates under Section 6.6.1(a) (as such royalty rates may be adjusted pursuant to the other provisions of this Section 6.6.1(d)) were proportional to Net Sales of such Products in all countries subject to each of the royalty rates under Section 6.6.1(a).