Common use of Earned Royalties Clause in Contracts

Earned Royalties. 6.1 During the TERM of this Agreement, Biohaven and its AFFILIATES, LICENSEES and ASSIGNS shall pay to ALS an earned royalty on worldwide annual cumulative NET SALES of PATENT PRODUCTS with a VALID CLAIM as follows: (a) for any [* * *] Indication at a rate of [* * *] percent ([* * *]%) per annum; (b) for an [* * *] Indication at a rate of [* * *] percent ([* * *]%) per annum; and (c) for all Indications other that as set forth in (i) and (ii) hereof, at a rate of [* * *] percent ([* * *]%) per annum (“EARNED ROYALTIES”). Biohaven shall pay all EARNED ROYALTIES accruing to ALS on a quarterly basis within [* * *] days of the end of each quarter during the TERM beginning in the first year in which NET SALES occur. 6.2 All EARNED ROYALTIES and other payments due under this Agreement shall be paid to ALS in United States Dollars. In the event that conversion from foreign currency is required in calculating a payment under this Agreement, the exchange rate used shall be the Interbank rate quoted by Citibank at the time the payment is due. If overdue, any EARNED ROYALTIES, milestones or any other payments due under this Agreement shall bear interest until payment in full at a per annum rate of [* * *] percent ([* * *]%) above the prime rate in effect at Citibank on the due date. 6.3 In the event that Biohaven is required to pay THIRD PARTY ROYALTIES (as defined below), then Biohaven may deduct an amount equal to [* * *] percent ([* * *]%) of any THIRD PARTY ROYALTIES actually paid by Biohaven from any EARNED ROYALTY amounts due to ALS hereunder; provided, however, that in no event shall the EARNED ROYALTIES under this Article 6.3 otherwise due to ALS be less than [* * *] percent ([* * *]%) of the EARNED ROYALTIES that would be payable to ALS absent the effects of this Article 6.3. “THIRD PARTY ROYALTIES” shall mean royalties actually paid by Biohaven to a third party pursuant to one or more agreements entered into by Biohaven to license patents that otherwise would be infringed by Biohaven, its AFFILIATES, LICENSEES or ASSIGNEES due to the manufacture, use or sale in the TERRITORY of the PATENT PRODUCT, such obligation to pay THIRD PARTY ROYALTIES to be determined on a country-by-country or territory-by-territory basis for each PATENT PRODUCT. Notwithstanding the foregoing, this Section 6.3 shall not apply to either (1) [* * *]; or (2) [* * *].

Earned Royalties. 6.1 During 7.1. Subject to provisions of this ARTICLE 7, during the TERM of this Agreement, Biohaven and its AFFILIATESas partial consideration for the LICENSE, LICENSEES and ASSIGNS LICENSEE shall pay to ALS LICENSOR an earned royalty on worldwide annual cumulative NET SALES of PATENT LICENSED PRODUCTS with a VALID CLAIM as follows: (a) for any [* * *] Indication at a rate of [* * *] percent ([* * *]%) per annum; (b) for an [* * *] Indication at a rate of [* * *] percent ([* * *]%) per annum; and (c) for all Indications other that as set forth in (i) and (ii) hereof, at a rate of [* * *] percent ([* * *]%) per annum by LICENSEE or its AFFILIATES (“EARNED ROYALTIES”)) determined as a percentage of NET SALES by LICENSEE or its AFFILIATES as set forth below: $0 to $250,000,000 [***] $250,000,001 to $500,000,000 [***] $500,000,001 and above [***] 7.2. Biohaven In the event that the LICENSEE enters into a SUBLICENCE AGREEMENT during the TERM of this Agreement, LICENSEE shall pay to LICENSOR the greater of: (a) [***] of the SUBLICENSING ROYALTIES received by the LICENSEE from a SUBLICENSEE; and (b) [***] of the NET SALES by such SUBLICENSEE. 7.3. LICENSEE shall pay all EARNED ROYALTIES accruing to ALS on a quarterly basis the LICENSOR within [* * *] thirty (30) days of from the end of each calendar quarter during the TERM (March 31, June 30, September 30 and December 31), beginning in the first year calendar quarter in which NET SALES occur. 6.2 7.4. All EARNED ROYALTIES and other payments due under this Agreement shall be paid directly to ALS LICENSOR in United States Dollars. In the event that conversion from foreign currency is required in calculating a payment under this Agreement, the exchange rate used shall be the Interbank rate quoted by Citibank at the time end of the payment is duelast business day of the quarter in which the royalty was earned. If overdue, any EARNED ROYALTIES, milestones or the royalties and any other payments due under this Agreement shall bear interest until payment in full at a per annum rate of [* * *] two percent ([* * *]2%) above the prime rate in effect at Citibank on the due datedate and the LICENSOR shall be entitled to recover reasonable attorneys’ fees and costs related to the administration or enforcement of this Agreement, including collection of royalties or other payments, following such failure to pay. The payment of such interest shall not foreclose the LICENSOR from exercising any other right it may have as a consequence of the failure of LICENSEE to make any payment when due. 6.3 7.5. In the event that Biohaven LICENSEE’S outside patent counsel together with LICENSOR’S outside patent counsel agree (which discussion and agreement shall be in good faith) that patent licenses from third parties are reasonably required by LICENSEE, its AFFILIATES or its SUBLICENSEE to make, use, offer for sale, sell or import any LICENSED PRODUCT in any given country, LICENSOR and LICENSEE shall negotiate in good faith with the intention of reaching a fair and equitable formula on how any amount paid by LICENSEE to such third parties shall be shared by LICENSEE and LICENSOR, except that EARNED ROYALTY payable to LICENSOR on NET SALES of such LICENSED PRODUCTS shall not be reduced by more than fifty percent (50%). 7.6. No multiple royalties shall be payable because the use, lease or sale of any LICENSED PRODUCT is, or shall be, covered by more than one VALID CLAIM contained in the LICENSED PATENTS. 7.7. In the event that a LICENSED PRODUCT is required sold in the form of a combination package together with companion products that are not themselves a LICESED PRODUCT, the NET SALES for such combination package upon which the Earned Royalty due to pay THIRD PARTY ROYALTIES (as defined belowLICENSOR is based shall be calculated by multiplying the total sales price of such combination package by the fraction A/(A+B), then Biohaven may deduct an amount equal to [* * *] percent ([* * *]%) of any THIRD PARTY ROYALTIES actually paid by Biohaven from any EARNED ROYALTY amounts due to ALS hereunder; provided, however, that in no event shall where A is the EARNED ROYALTIES under this Article 6.3 otherwise due to ALS be less than [* * *] percent ([* * *]%) invoice price of the EARNED ROYALTIES that would be payable to ALS absent LICENSED PRODUCT if sold separately, and B is the effects total invoice price of this Article 6.3. “THIRD PARTY ROYALTIES” shall mean royalties actually paid by Biohaven to a third party pursuant to one or more agreements entered into by Biohaven to license patents that otherwise would be infringed by Biohaven, its AFFILIATES, LICENSEES or ASSIGNEES due to each of the manufacture, use or sale other companion products included in the TERRITORY of the PATENT PRODUCT, such obligation to pay THIRD PARTY ROYALTIES to be determined on a country-by-country or territory-by-territory basis for each PATENT PRODUCT. Notwithstanding the foregoing, this Section 6.3 shall not apply to either (1) [* * *]; or (2) [* * *]combination package if sold separately.