Common use of Application of Royalty Rates Clause in Contracts

Application of Royalty Rates. All Royalties set forth under this Section 6.6 shall be subject always to the provisions of this Section 6.6.6, and shall only be payable as follows: (a) For so long as a Valid Claim of a ChemoCentryx Patent or of a Collaboration Patent included within the ChemoCentryx Technology (i.e. other than a Valid Claim invented solely by GSK) covers or claims the composition of matter or the relevant approved method of use of the Licensed Product being sold in the country of sale and at the time of such sale, then the royalty rates as set forth above shall apply, subject to subsection (c) and (d) below. (b) In the absence of such a Valid Claim as described in subsection (a) above at the time of sale and in the country of sale of the Licensed Product, but where ChemoCentryx owns or Controls a pending patent application within the ChemoCentryx Patents or within the Collaboration Patents with a claim (other than where the subject matter of such claim was invented solely by GSK) that claims the composition of matter or an approved method of use of the Licensed Product being sold at the time of sale and in the country of sale, GSK shall pay to ChemoCentryx royalty payments at [***] percent ([***]%) of the relevant royalty rate that would otherwise be payable under Section 6.6 for a period of [***] years from the date of First Commercial Sale of the Licensed Product at issue (subject to subsection (c) and (d) below), and shall pay the remaining [***] percent ([***]%) of the relevant royalty rate in escrow as provided below, until the earlier of (i) such time as a Valid Claim as described in subsection (a) above issues with respect to such pending patent application, in which case Section 6.6.6(a) shall apply; or (ii) the date which is [***] years from the date of First Commercial Sale of the Licensed Product at issue. The payments accruing under the remaining [***] percent ([***]%) of the relevant royalty rate shall be deposited into an escrow account to be maintained by GSK on behalf of ChemoCentryx (with interest from such account being reinvested into such account). Upon the occurrence of subsection (i) herein prior to the term of [***] years from the date of First Commercial Sale of the Licensed Product at issue, the remaining [***] percent ([***]%) of such payments (and interest) shall be promptly paid to ChemoCentryx. In the event a Valid Claim does not issue within such time frame, GSK shall retain all such amounts paid into escrow. (c) No royalty is payable under Section 6.6 in the event that neither subsection (a) or (b) above applies at the time of sale and in the country of sale for a given Licensed Product, or if subsection (a) or (b) are applicable, but subsection (d) below is triggered. *** Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.

Application of Royalty Rates. All Royalties set forth under this Section 6.6 shall be subject always to the provisions of this Section 6.6.6, and shall only be payable as follows: (a) For so long as a Valid Claim of a ChemoCentryx Patent or of a Collaboration Patent included within the ChemoCentryx Technology (i.e. other than a Valid Claim invented solely by GSK) covers or claims the composition of matter or the relevant approved method of use of the Licensed Product being sold in the country of sale and at the time of such sale, then the royalty rates as set forth above shall apply, subject to subsection (c) and (d) below. (b) In the absence of such a Valid Claim as described in subsection (a) above at the time of sale and in the country of sale of the Licensed Product, but where ChemoCentryx owns or Controls a pending patent application within the ChemoCentryx Patents or within the Collaboration Patents with a claim (other than where the subject matter of such claim was invented solely by GSK) that claims the composition of matter or an approved method of use of the Licensed Product being sold at the time of sale and in the country of sale, GSK shall pay to ChemoCentryx royalty payments at [***] percent ([***]%) of the relevant royalty rate that would otherwise be payable under Section 6.6 for a period of [***] years from the date of First Commercial Sale of [***] *** Certain information on this page has been omitted and filed separately with the Licensed Product Commission. Confidential treatment has been requested with respect to the omitted portions. at issue (subject to subsection (c) and (d) below), and shall pay the remaining [***] percent ([***]%) of the relevant royalty rate in escrow as provided below, until the earlier of (i) such time as a Valid Claim as described in subsection (a) above issues with respect to such pending patent application, in which case Section 6.6.6(a) shall apply; or (ii) the date which is [***] years from the date of First Commercial Sale of the Licensed Product [***] at issue. The payments accruing under the remaining [***] percent ([***]%) of the relevant royalty rate shall be deposited into an escrow account to be maintained by GSK on behalf of ChemoCentryx (with interest from such account being reinvested into such account). Upon the occurrence of subsection (i) herein prior to the term of [***] years from the date of First Commercial Sale of the Licensed Product [***] at issue, the remaining [***] percent ([***]%) of such payments (and interest) shall be promptly paid to ChemoCentryx. In the event a Valid Claim does not issue within such time frame, GSK shall retain all such amounts paid into escrow. (c) No royalty is payable under Section 6.6 in the event that neither subsection (a) or (b) above applies at the time of sale and in the country of sale for a given Licensed Product, or if subsection (a) or (b) are applicable, but subsection (d) below is triggered. *** Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.

Application of Royalty Rates. All Royalties set forth royalties payable under this Section 6.6 Article 6 shall be subject always to the provisions of this Section 6.6.6, 6.6.1 and shall only be payable as followsfollows and on a Licensed Product-by-Licensed Product and country-by-country basis (subject to Section 6.6.1(g)). With respect to each Licensed Product: (a) For so long as a Valid Claim of a ChemoCentryx Patent or of a Collaboration Patent included within the ChemoCentryx Technology (i.e. other than a Valid Claim invented solely by GSK) covers or claims the composition of matter or the relevant approved method of use of the Licensed Product being sold in the country of sale and If at the time of the First Commercial Sale in a particular country, there is an issued Patent owned or Controlled by Targacept [********] with a Valid Claim covering [********] (where, in the case of [********], any [********] for which such saleLicensed Product is [********] as approved by [********] covered by such Valid Claim) of such Licensed Product in such country, then a royalty with respect to Net Sales in such country shall be payable by GSK at the royalty full rates as set forth above in Section 6.5, as applicable, and shall apply, subject to subsection be payable until the later of (ci) and (d) below. (b) In the absence expiration of such a the last-to-expire Valid Claim as described in subsection above or (aii) above at the time of sale and in the country of sale of the Licensed Productfifteen (15) years after such First Commercial Sale, but where ChemoCentryx owns or Controls a pending patent application within the ChemoCentryx Patents or within the Collaboration Patents with a claim (other than where the subject matter of such claim was invented solely rates shall be reduced by GSK) that claims the composition of matter or an approved method of use of the Licensed Product being sold at the time of sale and in the country of sale, GSK shall pay to ChemoCentryx royalty payments at [********] percent ([********]%) during the period, if any, after expiration of the relevant last-to-expire Valid Claim as described above but before the end of such fifteen (15)-year period. (b) In the absence of a Valid Claim as described in Section 6.6.1 (a) at the time of the First Commercial Sale in a particular country, but where at the time of the First Commercial Sale Targacept owns or Controls (solely or jointly with GSK) a pending Patent in such country with a claim covering [********] (where, in the case of [********], any [********] for which such Licensed Product is [********], as approved by [********] covered by a claim of the pending Patent), then a royalty rate with respect to Net Sales in such country shall be payable by GSK at rate(s) which are [********] reduced from the rate(s) set forth in Section 6.5 that would otherwise be applicable and shall be payable under Section 6.6 for a period of [********] years from after the date of such First Commercial Sale of in such country; provided, however, that any such pending Patent shall no longer qualify under this paragraph if (i) it is finally rejected by the Licensed Product at issue U.S. or other applicable foreign patent office, in an order or decision from which no appeal can be taken or from which no appeal was timely taken, during such [********] year period, (subject ii) it is [********] (unless such Patent [********] attributable in whole or in part to subsection [********]) or (ciii) it has not been prosecuted in good faith by Targacept (unless GSK has assumed responsibility for Prosecution and (d) below)Maintenance thereof, if and shall pay to the extent permitted under Article 8). The payments representing the remaining [***] percent ([***]%) of the relevant royalty rate in escrow as provided below, until the earlier of (i) such time as a Valid Claim as described in subsection (a) above issues with respect to such pending patent application, in which case Section 6.6.6(a) shall apply; or (ii) the date which is [***] years from the date of First Commercial Sale of the Licensed Product at issue. The payments accruing under the remaining [***] percent ([***]%) of the relevant royalty rate that would otherwise have been payable shall be deposited into an a Third Party escrow account to be maintained by GSK on behalf of ChemoCentryx Targacept (with interest from such account being reinvested into such account). Upon the occurrence issuance of subsection a Patent with a Valid Claim of the type described in Section 6.6.1 (ia) herein prior to the term expiration of [********] years from after the date of such First Commercial Sale of the such Licensed Product at issuein such country, the remaining [***] percent ([***]%) of such payments **] (and accrued interest) shall be promptly paid to ChemoCentryxTargacept. Thereafter, the full royalty rates set forth in Section 6.6.1(a) shall apply for the remainder of the period for payment applicable under Section 6.6.1 (a) as if the previously pending Patent had issued at the time of the First Commercial Sale in such country. In the event a Valid Claim of the type described in Section 6.6.1(a) does not issue within such time frame[********]-year period, GSK shall retain all such amounts paid into escrow. Notwithstanding the foregoing, in the event that, and for so long as Generic Incursion exists with respect to such Licensed Product in such country, there shall be a [********] reduction on the escrowed portion and a [********] discount on the non-escrowed portion such that, together, the escrowed portion and the non-escrowed portion represent a [********] reduction from the rate(s) set forth in Section 6.5 that would otherwise be applicable. (c) No royalty is payable under In the absence of a Valid Claim as described in Section 6.6 in the event that neither subsection (a6.6.1(a) or (b) above applies at the time of sale and a pending Patent as described in the country of sale for a given Licensed Product, or if subsection (a) or (b) are applicable, but subsection (d) below is triggered. *** Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.Section 6.6.1

Application of Royalty Rates. All Royalties set forth under this Section 6.6 shall be subject always to the provisions of this Section 6.6.6, and shall only be payable as follows: (a) For so long as a Valid Claim of a ChemoCentryx Patent or of a Collaboration Patent included within the ChemoCentryx Technology (i.e. other than a Valid Claim invented solely by GSK) covers or claims the composition of matter or the relevant approved method of use of the Licensed Product being sold in the country of sale and at the time of such sale, then the royalty rates as set forth above shall apply, subject to subsection (c) and (d) below. (b) In the absence of such a Valid Claim as described in subsection (a) above at the time of sale and in the country of sale of the Licensed Product, but where ChemoCentryx owns or Controls a pending patent application within the ChemoCentryx Patents or within the Collaboration Patents with a claim (other than where the subject matter of such claim was invented solely by GSK) that claims the composition of matter or an approved method of use of the Licensed Product being sold at the time of sale and in the country of sale, GSK shall pay to ChemoCentryx royalty payments at [***] percent ([***]%) of the relevant royalty rate that would otherwise be payable under Section 6.6 for a period of [***] years from the date of First Commercial Sale of the Licensed Product at issue (subject to subsection (c) and (d) below), and shall pay the remaining [***] percent ([***]%) of the relevant royalty rate in escrow as provided below, until the earlier of (i) such time as a Valid Claim as described in subsection (a) above issues with respect to such pending patent application, in which case Section 6.6.6(a) shall apply; or (ii) the date which is [***] years from the date of First Commercial Sale of the Licensed Product at issue. The payments accruing under the remaining [***] percent ([***]%) of the relevant royalty rate shall be deposited into an escrow account to be maintained by GSK on behalf of ChemoCentryx (with interest from such account being reinvested into such account). Upon the occurrence of subsection (i) herein prior to the term of [***] twelve (12) years from the date of First Commercial Sale of the Licensed Product at issue, the remaining [***] percent ([***]%) of such payments (and interest) shall be promptly paid to ChemoCentryx. In the event a Valid Claim does not issue within such time frame, GSK shall retain all such amounts paid into escrow. (c) No royalty is payable under Section 6.6 in the event that neither subsection (a) or (b) above applies at the time of sale and in the country of sale for a given Licensed Product, or if subsection (a) or (b) are applicable, but subsection (d) below is triggered. *** Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.