Pro Forma and Other Calculations (a) Notwithstanding anything to the contrary herein, financial ratios and tests, including the Ratios, shall be calculated in the manner prescribed by this Section 1.08; provided, that notwithstanding anything to the contrary in clauses (b), (c), (d) or (e) of this Section 1.08, when calculating any Ratio for purposes of (i) the definition of “Applicable Rate” and (ii) Section 7.09 (other than for the purpose of determining Pro Forma Compliance with Section 7.09), the events described in this Section 1.08 that occurred subsequent to the end of the applicable Test Period shall not be given pro forma effect.
(b) In the event that Parent or any of its Restricted Subsidiaries incurs, assumes, guarantees, redeems, retires or extinguishes any Indebtedness or issues or redeems Disqualified Stock or Preferred Stock subsequent to the Test Period for which any Ratio is being calculated but prior to or simultaneously with the event for which the calculation of the applicable Ratio is made (the “Ratio Calculation Date”), then the applicable Ratio shall be calculated giving pro forma effect to such incurrence, assumption, guarantee, redemption, retirement or extinguishment of Indebtedness, or such issuance or redemption of Disqualified Stock or Preferred Stock, as if the same had occurred on the last day of the applicable Test Period; provided, however, that, for purposes of any pro forma calculation of the Consolidated Total Leverage Ratio on such determination date pursuant to the provisions described in Section 7.02(a), the pro forma calculation shall not give effect to any Indebtedness incurred on such determination date pursuant to the provisions described under Section 7.02(b).
(c) For purposes of making the computation referred to above, Investments, acquisitions, dispositions, mergers, amalgamations and consolidations (as determined in accordance with GAAP), in each case with respect to a business (as such term is used in Regulation S-X Rule 11-01 under the Securities Act), a company, a segment, an operating division or unit or line of business that Parent, or any of its Restricted Subsidiaries has determined to make and/or made during the Test Period or subsequent to such Test Period and on or prior to or simultaneously with the Ratio Calculation Date shall be calculated on a pro forma basis in accordance with GAAP (except as set forth in the last sentence of clause (d) below) assuming that all such Investments, acquisitions, dispositions, mergers, amalgamations and consolidations (and the change in any associated fixed charge obligations and the change in Consolidated EBITDA resulting therefrom, subject to any limitations set forth in clause (a)(J) of the definition thereof, to the extent applicable) had occurred on the first day of the Test Period. If since the beginning of such Test Period any Person that subsequently became a Restricted Subsidiary or was merged with or into Parent or any of its Restricted Subsidiaries since the beginning of such Test Period shall have made any Investment, acquisition, disposition, merger, amalgamation and consolidation, in each case with respect to a business (as such term is used in Regulation S-X Rule 11-01 under the Securities Act), a company, a segment, an operating division or unit or line of business that would have required adjustment pursuant to this Section 1.08, then the applicable Ratio shall be calculated giving pro forma effect thereto for such Test Period as if such Investment, acquisition, disposition, merger and consolidation had occurred at the beginning of the applicable Test Period.
(d) For purposes of making the computation referred to above, whenever pro forma effect is to be given to a transaction, the pro forma calculations shall be made in good faith by a responsible financial or accounting officer of Parent. Any such pro forma calculation may include adjustments appropriate, in the reasonable determination of Parent as set forth in an officer’s certificate, to reflect reasonably identifiable and factually supportable operating expense reductions and other operating improvements or synergies reasonably expected to result from any action taken or expected to be taken within eighteen (18) months after the date of any acquisition, amalgamation or merger (subject to any limitations set forth in clause (a)(J) of the definition of Consolidated EBITDA, to the extent applicable); provided, that no such amounts shall be included pursuant to this paragraph to the extent duplicative of any amounts that are otherwise added back in computing Consolidated EBITDA with respect to such period.
(e) For purposes of calculation of any Ratio, any amount in a currency other than Dollars will be converted to Dollars based on the average exchange rate for such currency for the most recent twelve (12) month period immediately prior to the date of determination determined in a manner consistent with that used in calculating Consolidated EBITDA for the applicable Test Period.
Royalties and Other Payments A. For the rights, privileges and exclusive license granted hereunder, Licensee shall pay to CMCC the following amounts in the manner hereinafter provided. Unless expressly stated otherwise in this Agreement, periodic payment obligations listed below shall endure through the Term of this Agreement, unless this Agreement shall be sooner terminated as hereinafter provided.
1. A license amendment fee of [* * *], and such fee is due within thirty (30) days after the Effective Date of this Agreement.
2. As of the Effective Date Licensee has paid in full the license issue fee of [* * *], which license issue fee was deemed earned and due within thirty (30) days of the effective date of the Original Agreement.
3. Licensee shall make the following one-time payments to CMCC in connection with the first occurrence of the following events (“Milestones”):
(a) [* * *] upon the [* * *] by Licensee or any Sublicensee with respect to a Licensed Product;
(b) [* * *] upon the [* * *] by Licensee or any Sublicensee with respect to a Licensed Product; and
(c) [* * *] upon the [* * *] of a Licensed Product. Licensee will promptly notify CMCC in writing of the achievement of any of the foregoing Milestones by Licensee or any of its Sublicensees, and will require its Sublicensees to provide it with prompt written notice upon their achievement of any of the foregoing Milestones. CMCC may invoice Licensee for the applicable Milestone payment after receipt of such notice, and Licensee shall pay such invoice within forty-five (45) days after its receipt thereof.
B. During the Term, Licensee shall pay CMCC running royalties in an amount equal to [* * *] of Net Sales of Licensed Products or Licensed Processes used, leased or sold by and/or for Licensee (including its Affiliates) or any Sublicensees (“Running Royalties”); provided, however, to the extent that a license or licenses is required by Licensee to third party patents or other intellectual property (i) in order to practice the Patent Rights, or (ii) in order to manufacture or sell Licensed Products without such activities (as described in clause (i) or (ii) of this sentence) resulting in the infringement of such third party intellectual property, Licensee may, for each such required license, deduct from the Running Royalties owed to CMCC an amount up to [* * *] of the royalties due to each third party for such intellectual property rights; provided further, that no single Running Royalty payment owed to CMCC may be reduced by more than [* * *] as a result of any such deduction. Licensee may not deduct, as a result of any such required third party license, a greater percentage of royalties from those owed to CMCC than the percentage deducted from such third party from whom such license is required as described in this Paragraph. Notwithstanding anything in this ARTICLE IV, Paragraph B, the Running Royalty owed to CMCC by Licensee shall not be reduced below [* * *] of the Net Sales of Licensed Products or Licensed Processes.
1. No multiple royalties shall be payable on account of any Licensed Product or Licensed Process, its manufacture, use, lease or sale being covered by more than one Patent Rights patent application or Patent Rights issued patent licensed under this Agreement. In the event that any patent or claim thereof included within the Patent Rights is no longer a Valid Claim, then all obligations to pay royalties based on that patent or claim or any claim patentably indistinct therefrom will cease as of the date such patent or claim is no longer a Valid Claim.
2. For purposes of calculating royalties, in the event that a Licensed Product includes [* * *], then Net Sales of the [* * *] shall be calculated using one of the following methods:
(a) [* * *]; or
(b) In the event that no such [* * *] during the applicable accounting period, Net Sales for purposes of determining royalties payable hereunder shall be calculated by [* * *].
C. In the event Licensee has granted sublicenses under this Agreement, Licensee shall pay to CMCC the relevant percentage as set forth below of Sublicensee Payments: (i) [* * *] of Sublicensee Payments received by Licensee any time prior to [* * *]; and (ii) [* * *] of Sublicensee Payments received by Licensee any time after [* * *].
D. Royalty payments shall be paid in United States dollars in Boston, Massachusetts, or at such other place as CMCC may reasonably designate consistent with the laws and regulations controlling in any foreign country. If currency conversion shall be required in connection with the payments of royalties or other amounts hereunder, the conversion shall be made by using the exchange rate prevailing at Bank of America on the last business day of the calendar quarterly reporting period to which such royalty payments relate.
E. Licensee shall make payment of the amounts specified in this ARTICLE IV to CMCC within forty-five (45) days after March 31, June 30, September 30 and December 31 each year during the Term of this Agreement, covering the quantity of Licensed Products sold by Licensee during the preceding calendar quarter (in the case of royalties payable under ARTICLE IV, Paragraph B) and covering the percentage of any Sublicensee Payment (as calculated in accordance with ARTICLE IV, Paragraph C) received during the preceding calendar quarter. The last such payment shall be made within forty-five (45) days after termination of this Agreement. The royalty payments set forth in this Agreement shall, if overdue, bear interest until payment at a per annum rate of two and a half percent (2.5%) above the prime rate in effect at Bank of America on the due date. The payment of such interest shall not foreclose CMCC from exercising any other rights it may have as a consequence of the lateness of any payment.