Common use of Payments and Royalties Clause in Contracts

Payments and Royalties. 6.1 In consideration of the licenses granted and to be granted hereunder, HGS will pay to CAT on the Effective Date twelve million U.S. dollars ($12,000,000). Exclusive HGS Products ---------------------- 6.2 Subject to Paragraphs 6.4, 6.5, and 6.6, for each EXCLUSIVE HGS PRODUCT which is a THERAPEUTIC PRODUCT, HGS shall pay to CAT the following royalties and milestone payments (which milestone payments under this Paragraph 6.2 shall be due and payable within thirty (30) days after the applicable milestone event is achieved by or on behalf of HGS, its AFFILIATE or (sub)licensee): (1) [***] upon the effective date of the license granted pursuant to Paragraphs 2.3 and 3.1.2 for such EXCLUSIVE HGS PRODUCT (2) [***] upon the start of a Phase I clinical trial for such EXCLUSIVE HGS PRODUCT; (3) [***] upon start of a Phase III clinical trial for such EXCLUSIVE HGS PRODUCT; (4) [***] upon first submission of a BLA for such EXCLUSIVE HGS PRODUCT; (5) [***] upon the first regulatory approval of such EXCLUSIVE HGS PRODUCT for commercial sale; and (6) a royalty of [***] of NET SALES of such EXCLUSIVE HGS PRODUCT sold by HGS, its AFFILIATES and (sub)licensees. HGS shall have no obligation to pay each milestone payment to CAT under this Paragraph 6.2 more than once for each different EXCLUSIVE HGS PRODUCT. For purposes of determining the milestone payments owing under this Paragraph 6.2, an EXCLUSIVE HGS PRODUCT shall constitute the same EXCLUSIVE HGS PRODUCT as any other EXCLUSIVE HGS PRODUCT, if such EXCLUSIVE HGS PRODUCT is directed to the same HGS ANTIGEN as the other EXCLUSIVE HGS PRODUCT, without regard to the formulation or means of administration thereof. 6.3 Subject to Paragraph 6.4, for each EXCLUSIVE HGS PRODUCT which is a DIAGNOSTIC PRODUCT, HGS shall pay to CAT the following royalties and milestone payments (which milestone payments under this Paragraph 6.3 shall be due and payable within thirty (30) days after the applicable milestone event is achieved by or on behalf of HGS, its AFFILIATES or (sub)licensees): (1) [***] upon first submission of a BLA for such EXCLUSIVE HGS PRODUCT; (2) [***] upon the first regulatory approval of such EXCLUSIVE HGS PRODUCT for commercial sale; and (3) a royalty of [***] of NET SALES of such EXCLUSIVE HGS PRODUCT sold by HGS, its AFFILIATES and (sub)licensees. HGS shall have no obligation to pay each milestone payment to CAT under this Paragraph 6.3 more than once for each different EXCLUSIVE HGS PRODUCT. For purposes of determining the milestone payments owing under this Paragraph 6.3, an EXCLUSIVE HGS PRODUCT shall constitute the same EXCLUSIVE HGS PRODUCT as any other EXCLUSIVE HGS PRODUCT, if such EXCLUSIVE HGS PRODUCT is directed to the same HGS ANTIGEN as the other EXCLUSIVE HGS PRODUCT, without regard to the formulation or means of administration thereof. 6.4 Royalty obligations under Paragraphs 6.2 and 6.3, with respect to an EXCLUSIVE HGS PRODUCT, shall terminate on a country-by-country basis and on an EXCLUSIVE HGS PRODUCT by EXCLUSIVE HGS PRODUCT basis on the later of (i) [***] after first country-wide launch of such EXCLUSIVE HGS PRODUCT in such country or (ii) expiration of the last to expire patent on CAT BACKGROUND IP Licensed to HGS under this Agreement which covers the process, method of making, making, having made, importing, offering to sell or using or selling of such EXCLUSIVE HGS PRODUCT in the country in which such EXCLUSIVE HGS PRODUCT was developed, made, sold or used. 6.5 In the event that HGS is required to pay a royalty to a THIRD PARTY in order to practice or have practiced the technology claimed in CAT's ANTIBODY PATENTS with respect to an EXCLUSIVE HGS PRODUCT, HGS shall be able to offset [***] of such third party royalties against the royalties owed to CAT pursuant to Paragraph 6.2, provided that the royalty owed to CAT on any such EXCLUSIVE HGS PRODUCT shall not be less than [***] of Net Sales in any year in which such royalty is owed. 6.6 In the event that CAT THIRD PARTY ROYALTY OBLIGATIONS are reduced from the amounts that CAT owes or would owe as of the Effective Date taking into account all applicable offsets, CAT shall promptly notify HGS in writing of such reduction, and HGS' royalty obligation under Paragraph 6.2 shall be reduced by an amount equal to [***] of such reduction.

Payments and Royalties. 6.1 In consideration of 4.1 For the licenses granted rights, privileges and to be license granted hereunder, HGS will pay to CAT on the Effective Date twelve million U.S. dollars ($12,000,000). Exclusive HGS Products ---------------------- 6.2 Subject to Paragraphs 6.4, 6.5, and 6.6, for each EXCLUSIVE HGS PRODUCT which is a THERAPEUTIC PRODUCT, HGS LICENSEE shall pay to CAT CMCC in the manner hereinafter provided to the end of the term of the Patent Rights or until this Agreement shall be terminated as hereinafter provided, whether the milestones are achieved under the sponsorship of CMCC, LICENSEE or a Sublicensee, the following royalties and milestone payments totaling $* (which milestone payments under this Paragraph 6.2 shall be * dollars) for each Licensed Product: 4.1.1 $* (* dollars) due and payable within thirty (30) days after * the applicable milestone event is achieved by or on behalf of HGS, its AFFILIATE or Product Notice Date for such Licensed Product; 4.1.2 $* (sub)licensee): (1* dollars) [due ***] upon the effective date submission of the license granted pursuant to Paragraphs 2.3 and 3.1.2 first Phase I/II IND (Investigational New Drug application) for any indication for such EXCLUSIVE HGS PRODUCTLicensed Product; 4.1.3 $* (2* dollars) [***] upon the start due * completion of a Phase I II clinical trial trials for any indication for such EXCLUSIVE HGS PRODUCT;Licensed Product; and 4.1.4 $* (3* dollars) [***] upon start of a Phase III clinical trial for such EXCLUSIVE HGS PRODUCT; (4) [***] upon first due * submission of a BLA PLA (Product License Application) or an NDA (New Drug Application) for any indication for such EXCLUSIVE HGS PRODUCT; (5) [***] upon the first regulatory approval of such EXCLUSIVE HGS PRODUCT for commercial sale; and (6) a royalty of [***] of NET SALES of such EXCLUSIVE HGS PRODUCT sold by HGS, its AFFILIATES and (sub)licensees. HGS shall have no obligation to pay each milestone payment to CAT under this Paragraph 6.2 more than once for each different EXCLUSIVE HGS PRODUCT. For purposes of determining the milestone payments owing under this Paragraph 6.2, an EXCLUSIVE HGS PRODUCT shall constitute the same EXCLUSIVE HGS PRODUCT as any other EXCLUSIVE HGS PRODUCT, if such EXCLUSIVE HGS PRODUCT is directed to the same HGS ANTIGEN as the other EXCLUSIVE HGS PRODUCT, without regard to the formulation or means of administration thereofLicensed Product. 6.3 Subject to Paragraph 6.4, for each EXCLUSIVE HGS PRODUCT which is a DIAGNOSTIC PRODUCT, HGS 4.2 LICENSEE shall pay to CAT the following royalties and milestone payments (which milestone payments under this Paragraph 6.3 shall be due and payable within thirty (30) days after the applicable milestone event is achieved by or on behalf of HGS, its AFFILIATES or (sub)licensees): (1) [***] upon first submission of a BLA for such EXCLUSIVE HGS PRODUCT; (2) [***] upon the first regulatory approval of such EXCLUSIVE HGS PRODUCT for commercial sale; and (3) CMCC a royalty of [***] of NET SALES of such EXCLUSIVE HGS PRODUCT sold by HGS, its AFFILIATES and (sub)licensees. HGS shall have no obligation to pay each milestone payment to CAT under this Paragraph 6.3 more than once for each different EXCLUSIVE HGS PRODUCT. For purposes of determining based on the milestone payments owing under this Paragraph 6.3, an EXCLUSIVE HGS PRODUCT shall constitute the same EXCLUSIVE HGS PRODUCT as any other EXCLUSIVE HGS PRODUCT, if such EXCLUSIVE HGS PRODUCT is directed to the same HGS ANTIGEN as the other EXCLUSIVE HGS PRODUCT, without regard to the formulation or means of administration thereof. 6.4 Royalty obligations under Paragraphs 6.2 and 6.3, Net Sales with respect to an EXCLUSIVE HGS PRODUCTthe Licensed Products or Licensed Processes used, leased or sold by LICENSEE, which said royalty shall terminate on a country-by-country basis be *% (* percent), or such lower rate as may be agreed upon in writing by the parties, of such Net Sales. 4.3 Where sublicenses have been granted, or strategic partnerships entered into, LICENSEE shall pay to CMCC *% (* percent) of any and on an EXCLUSIVE HGS PRODUCT all sublicensing payments, or such lower percentage as may be agreed upon in writing by EXCLUSIVE HGS PRODUCT basis the parties. Sublicensing payments are defined as any and all payments made to LICENSEE by the Sublicensee or strategic partner except for payments to support research and development conducted by LICENSEE, for purchases of equity, for payments for goods and services or for royalties based on the later of (i) [***] after first country-wide launch of such EXCLUSIVE HGS PRODUCT in such country or (ii) expiration of the last to expire patent on CAT BACKGROUND IP Licensed to HGS under this Agreement which covers the process, method of making, making, having made, importing, offering to sell or using or selling of such EXCLUSIVE HGS PRODUCT in the country in which such EXCLUSIVE HGS PRODUCT was developed, made, sold or used. 6.5 In the event that HGS is required to pay a royalty to a THIRD PARTY in order to practice or have practiced the technology claimed in CAT's ANTIBODY PATENTS Net Sales with respect to an EXCLUSIVE HGS PRODUCT, HGS the Licensed Product or Licensed Process. LICENSEE shall be able pay to offset [CMCC ***] % of such third party royalties against the royalties owed to CAT pursuant to Paragraph 6.2, provided that the royalty owed income paid to CAT on any such EXCLUSIVE HGS PRODUCT LICENSEE up to $* of cumulative Net Sales with respect to the Licensed Product or Licensed Process. After $* of cumulative Net Sales, LICENSEE shall not be less than [pay to CMCC *% of royalty income to LICENSEE from the Sublicensee with a minimum payment of **] % of Net Sales for sales of the Licensed Product made or the practice of the Licensed Process by the Sublicensee. If the royalty rate paid by the Sublicensee is reduced because of third party, non-infringing sales of a Thalidomide analog, the minimum payment of at least *% of Net Sales of the Licensed Product will be reduced proportional to the reduction of the royalty rate paid to LICENSEE by the Sublicensee. Milestone payments from LICENSEE to CMCC shall be credited against CMCC's share of milestone payments made to LICENSEE by Sublicensee. 4.4 [Intentionally Omitted.] 4.5 No multiple royalties shall be payable because any Licensed Product, its manufacture, use, lease or sale, are or shall be covered by more than one of the Patent Rights licensed under this Agreement. 4.6 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 year foreign country. If any currency conversion shall be required in connection with the payment of royalties hereunder, such conversion shall be made by using the exchange rate prevailing at the Fleet Bank of Boston on the last business day of the calendar quarterly reporting period to which such royalty is owedpayments relate. 6.6 In the event that CAT THIRD PARTY ROYALTY OBLIGATIONS are reduced from the amounts that CAT owes or would owe as of the Effective Date taking into account all applicable offsets, CAT shall promptly notify HGS in writing of such reduction, and HGS' royalty obligation under Paragraph 6.2 shall be reduced by an amount equal to [***] of such reduction.

Payments and Royalties. 6.1 In consideration of 4.1 For the licenses granted rights, privileges and to be license granted hereunder, HGS will pay to CAT on the Effective Date twelve million U.S. dollars ($12,000,000). Exclusive HGS Products ---------------------- 6.2 Subject to Paragraphs 6.4, 6.5, and 6.6, for each EXCLUSIVE HGS PRODUCT which is a THERAPEUTIC PRODUCT, HGS LICENSEE shall pay to CAT CMCC in the manner hereinafter provided to the end of the term of the Patent Rights or until this Agreement shall be terminated as hereinafter provided, whether the milestones are achieved under the sponsorship of CMCC, LICENSEE or a Sublicensee, the following royalties and milestone payments totaling $1,500,000 (which milestone payments under this Paragraph 6.2 shall be one million and five hundred thousand dollars) for each Licensed Product: 4.1.1 $* (* dollars) due and payable within thirty (30) days after * the applicable milestone event is achieved by or on behalf of HGS, its AFFILIATE or Product Notice Date for such Licensed Product; 4.1.2 $* (sub)licensee): (1* dollars) [due ***] upon the effective date submission of the license granted pursuant to Paragraphs 2.3 and 3.1.2 first Phase I/II IND (Investigational New Drug application) for any indication for such EXCLUSIVE HGS PRODUCTLicensed Product; 4.1.3 $* (2* dollars) [***] upon the start due * completion of a Phase I II clinical trial trials for any indication for such EXCLUSIVE HGS PRODUCT;Licensed Product; and 4.1.4 $* (3* dollars) [***] upon start of a Phase III clinical trial for such EXCLUSIVE HGS PRODUCT; (4) [***] upon first due * submission of a BLA PLA (Product License Application) or an NDA (New Drug Application) for any indication for such EXCLUSIVE HGS PRODUCT; (5) [***] upon the first regulatory approval of such EXCLUSIVE HGS PRODUCT for commercial sale; and (6) a royalty of [***] of NET SALES of such EXCLUSIVE HGS PRODUCT sold by HGS, its AFFILIATES and (sub)licensees. HGS shall have no obligation to pay each milestone payment to CAT under this Paragraph 6.2 more than once for each different EXCLUSIVE HGS PRODUCT. For purposes of determining the milestone payments owing under this Paragraph 6.2, an EXCLUSIVE HGS PRODUCT shall constitute the same EXCLUSIVE HGS PRODUCT as any other EXCLUSIVE HGS PRODUCT, if such EXCLUSIVE HGS PRODUCT is directed to the same HGS ANTIGEN as the other EXCLUSIVE HGS PRODUCT, without regard to the formulation or means of administration thereofLicensed Product. 6.3 Subject to Paragraph 6.4, for each EXCLUSIVE HGS PRODUCT which is a DIAGNOSTIC PRODUCT, HGS 4.2 LICENSEE shall pay to CAT the following royalties and milestone payments (which milestone payments under this Paragraph 6.3 shall be due and payable within thirty (30) days after the applicable milestone event is achieved by or on behalf of HGS, its AFFILIATES or (sub)licensees): (1) [***] upon first submission of a BLA for such EXCLUSIVE HGS PRODUCT; (2) [***] upon the first regulatory approval of such EXCLUSIVE HGS PRODUCT for commercial sale; and (3) CMCC a royalty of [***] of NET SALES of such EXCLUSIVE HGS PRODUCT sold by HGS, its AFFILIATES and (sub)licensees. HGS shall have no obligation to pay each milestone payment to CAT under this Paragraph 6.3 more than once for each different EXCLUSIVE HGS PRODUCT. For purposes of determining based on the milestone payments owing under this Paragraph 6.3, an EXCLUSIVE HGS PRODUCT shall constitute the same EXCLUSIVE HGS PRODUCT as any other EXCLUSIVE HGS PRODUCT, if such EXCLUSIVE HGS PRODUCT is directed to the same HGS ANTIGEN as the other EXCLUSIVE HGS PRODUCT, without regard to the formulation or means of administration thereof. 6.4 Royalty obligations under Paragraphs 6.2 and 6.3, Net Sales with respect to an EXCLUSIVE HGS PRODUCTthe Licensed Products or Licensed Processes used, leased or sold by LICENSEE, which said royalty shall terminate on a country-by-country basis be *% (* percent), or such lower rate as may be agreed upon in writing by the parties, of such Net Sales. 4.3 Where sublicenses have been granted, or strategic partnerships entered into, LICENSEE shall pay to CMCC *% (* percent) of any and on an EXCLUSIVE HGS PRODUCT all sublicensing payments, or such lower percentage as may be agreed upon in writing by EXCLUSIVE HGS PRODUCT basis the parties. Sublicensing payments are defined as any and all payments made to LICENSEE by the Sublicensee or strategic partner except for payments to support research and development conducted by LICENSEE, for purchases of equity, for payments for goods and services or for royalties based on the later of (i) [***] after first country-wide launch of such EXCLUSIVE HGS PRODUCT in such country or (ii) expiration of the last to expire patent on CAT BACKGROUND IP Licensed to HGS under this Agreement which covers the process, method of making, making, having made, importing, offering to sell or using or selling of such EXCLUSIVE HGS PRODUCT in the country in which such EXCLUSIVE HGS PRODUCT was developed, made, sold or used. 6.5 In the event that HGS is required to pay a royalty to a THIRD PARTY in order to practice or have practiced the technology claimed in CAT's ANTIBODY PATENTS Net Sales with respect to an EXCLUSIVE HGS PRODUCT, HGS the Licensed Product or Licensed Process. LICENSEE shall be able pay to offset [CMCC ***] % of such third party royalties against the royalties owed to CAT pursuant to Paragraph 6.2, provided that the royalty owed income paid to CAT on any such EXCLUSIVE HGS PRODUCT LICENSEE up to $* of cumulative Net Sales with respect to the Licensed Product or Licensed Process. After $* of cumulative Net Sales, LICENSEE shall not be less than [pay to CMCC *% of royalty income to LICENSEE from the Sublicensee with a minimum payment of **] % of Net Sales for sales of the Licensed Product made or the practice of the Licensed Process by the Sublicensee. If the royalty rate paid by the Sublicensee is reduced because of third party, non-infringing sales of a Thalidomide analog, the minimum payment of at least *% of Net Sales of the Licensed Product will be reduced proportional to the reduction of the royalty rate paid to LICENSEE by the Sublicensee. Milestone payments from LICENSEE to CMCC shall be credited against CMCC's share of milestone payments made to LICENSEE by Sublicensee. 4.4 [Intentionally Omitted.] 4.5 No multiple royalties shall be payable because any Licensed Product, its manufacture, use, lease or sale, are or shall be covered by more than one of the Patent Rights licensed under this Agreement. 4.6 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 year foreign country. If any currency conversion shall be required in connection with the payment of royalties hereunder, such conversion shall be made by using the exchange rate prevailing at the Fleet Bank of Boston on the last business day of the calendar quarterly reporting period to which such royalty is owedpayments relate. 6.6 In the event that CAT THIRD PARTY ROYALTY OBLIGATIONS are reduced from the amounts that CAT owes or would owe as of the Effective Date taking into account all applicable offsets, CAT shall promptly notify HGS in writing of such reduction, and HGS' royalty obligation under Paragraph 6.2 shall be reduced by an amount equal to [***] of such reduction.

Payments and Royalties. 6.1 3.1 In consideration of the licenses and rights of ownership granted and to be granted hereunder, HGS will pay to CAT on DYAX within ten (10) days of the Effective Date twelve six million U.S. dollars ($12,000,0006,000,000), but not later than March 31, 2000. Exclusive HGS Products ----------------------The parties agree that such amount represents a collaboration commitment of resources and costs of first year start-up activities (such activities to be managed by the Steering Committee) of two million U.S. dollars, a paid-up signing and annual fees under the DYAX PATENT RIGHTS of five hundred thousand U.S. dollars, and a paid up signing and annual fees under the DYAX TECHNOLOGY of three million five hundred thousand U.S. dollars. 6.2 3.2 Subject to Paragraphs 6.4, 6.5, 3.4 and 6.63.11, for each EXCLUSIVE HGS COLLABORATION PRODUCT or NON-COLLABORATION PRODUCT which is a sold in the THERAPEUTIC PRODUCTFIELD, HGS shall pay to CAT DYAX the following royalties and milestone payments (which milestone payments under this Paragraph 6.2 3.2 shall be due and payable within thirty (30) days after the applicable milestone event is achieved by or on behalf of HGS, HGS or its AFFILIATE or (sub)licensee):AFFILIATE): Confidential material omitted and filed separately with the Securities and Exchange Commission. Asterisks denote such omissions. (1a) [***] upon the effective date filing of an IND or upon the license granted pursuant to Paragraphs 2.3 and 3.1.2 first in vivo testing in humans for such EXCLUSIVE HGS PRODUCT (2) [***] upon the start of a Phase I clinical trial for such EXCLUSIVE HGS COLLABORATION PRODUCT or NON-COLLABORATION PRODUCT; (3b) [***] upon start of a Phase III clinical trial (as defined in Section 3.14) for such EXCLUSIVE HGS COLLABORATION PRODUCT or NON-COLLABORATION PRODUCT; (4c) [***] upon first submission of a BLA for such EXCLUSIVE HGS PRODUCT; (5) [***] upon the first regulatory approval in a MAJOR COUNTRY of such EXCLUSIVE HGS COLLABORATION PRODUCT or NON-COLLABORATION PRODUCT for commercial sale; (d) upon the second regulatory approval in a MAJOR COUNTRY of such COLLABORATION PRODUCT or NON-COLLABORATION PRODUCT for commercial sale; and (6e) a royalty of [***] of NET SALES ********** of such EXCLUSIVE HGS COLLABORATION PRODUCT or NON-COLLABORATION PRODUCT sold by HGS, HGS or its AFFILIATES and (sub)licenseesAFFILIATES. HGS shall have no obligation to pay each milestone payment to CAT DYAX under this Paragraph 6.2 3.2. more than once for each different EXCLUSIVE HGS COLLABORATION PRODUCT or NON-COLLABORATION PRODUCT. For purposes of determining the milestone payments owing under this Paragraph 6.23.2, a COLLABORATION PRODUCT or NON-COLLABORATION PRODUCT containing an EXCLUSIVE antibody directed to an HGS PRODUCT Target shall constitute the same EXCLUSIVE HGS COLLABORATION PRODUCT or NON-COLLABORATION PRODUCT as any other EXCLUSIVE HGS COLLABORATION PRODUCT or NON-COLLABORATION PRODUCT, if such EXCLUSIVE HGS COLLABORATION PRODUCT is or NON-COLLABORATION PRODUCT contains an antibody directed to the same HGS ANTIGEN TARGET as the other EXCLUSIVE HGS COLLABORATION PRODUCT or NON-COLLABORATION PRODUCT, without regard to the formulation or means of administration thereof. 6.3 Subject . Similarly, a COLLABORATION PRODUCT or NON-COLLABORATION PRODUCT containing a peptide directed to Paragraph 6.4, for each EXCLUSIVE an HGS PRODUCT which is a DIAGNOSTIC PRODUCT, HGS shall pay to CAT the following royalties and milestone payments (which milestone payments under this Paragraph 6.3 shall be due and payable within thirty (30) days after the applicable milestone event is achieved by or on behalf of HGS, its AFFILIATES or (sub)licensees): (1) [***] upon first submission of a BLA for such EXCLUSIVE HGS PRODUCT; (2) [***] upon the first regulatory approval of such EXCLUSIVE HGS PRODUCT for commercial sale; and (3) a royalty of [***] of NET SALES of such EXCLUSIVE HGS PRODUCT sold by HGS, its AFFILIATES and (sub)licensees. HGS shall have no obligation to pay each milestone payment to CAT under this Paragraph 6.3 more than once for each different EXCLUSIVE HGS PRODUCT. For purposes of determining the milestone payments owing under this Paragraph 6.3, an EXCLUSIVE HGS PRODUCT Target shall constitute the same EXCLUSIVE HGS COLLABORATION PRODUCT or NON-COLLABORATION PRODUCT as any other EXCLUSIVE HGS COLLABORATION PRODUCT or NON-COLLABORATION PRODUCT, if such EXCLUSIVE HGS COLLABORATION PRODUCT is or NON-COLLABORATION PRODUCT contains a peptide directed to the same HGS ANTIGEN TARGET as the other EXCLUSIVE HGS COLLABORATION PRODUCT or NON-COLLABORATION PRODUCT, without regard to the formulation or means of administration thereof. If HGS develops and markets separate antibody and peptide products directed to the same HGS TARGET, HGS shall have an obligation to pay a full set of separate milestone payments for each class of products. 6.4 Royalty obligations under 3.3 Subject to Paragraphs 6.2 3.4 and 6.33.11, with respect if HGS outlicenses a COLLABORATION PRODUCT or NON-COLLABORATION PRODUCT to a THIRD PARTY for sale in the THERAPEUTIC FIELD, HGS shall pay to DYAX, in lieu of milestones and royalties, the following: (a) NET REVENUE received by HGS from such outlicense, if the product is outlicensed prior to payment of the milestone owed pursuant to Paragraph 3.2(a); (b) NET REVENUE received by HGS from such outlicense, if the product is outlicensed after payment of the milestone owed pursuant to Paragraph 3.2(a), but prior to payment of the milestone owed pursuant to Paragraph 3.2(b); (c) NET REVENUE received by HGS from such outlicense, if the product is outlicensed after payment of the milestone owed pursuant to Paragraph 3.2(b). 3.4 For the sole purpose of determining royalties, milestones or revenue owed pursuant to Paragraphs 3.2 and 3.3, if a COLLABORATION PRODUCT or NON-COLLABORATION PRODUCT is jointly developed and marketed pursuant to the SB/HGS LICENSE AGREEMENT by HGS and SB together, SB shall be considered to be an EXCLUSIVE AFFILIATE of HGS PRODUCTand the milestones and royalties set forth in Paragraph 3.2 shall apply to such product. HGS In Vitro Diagnostic and Research Reagent Products 3.5 Subject to Paragraph 3.11, for each COLLABORATION PRODUCT or NON-COLLABORATION PRODUCT which is sold by HGS or its AFFILIATES in the DIAGNOSTIC FIELD or the RESEARCH REAGENT FIELD, HGS shall terminate on pay to DYAX the following royalty: (a) a country-by-country basis and on an EXCLUSIVE HGS PRODUCT by EXCLUSIVE HGS PRODUCT basis on the later royalty of (i) [***] after first country-wide launch ********** of NET SALES of such EXCLUSIVE COLLABORATION PRODUCT or NON-COLLABORATION PRODUCT sold by HGS or its AFFILIATES. No milestones shall be owed on such products. Confidential material omitted and filed separately with the Securities and Exchange Commission. Asterisks denote such omissions. 3.6 Subject to Paragraph 3.11, if HGS outlicenses a COLLABORATION PRODUCT or NON-COLLABORATION PRODUCT to a THIRD PARTY for sale in such country the DIAGNOSTIC FIELD or (ii) expiration the RESEARCH REAGENT FIELD, HGS shall pay to DYAX, in lieu of the last royalty set forth in Paragraph 3.5, the following: (a) the portion of NET REVENUES received by HGS from such outlicense, which portion is attributable to expire patent on CAT BACKGROUND IP Licensed the product outlicensed. The portion of revenue attributable to HGS under this Agreement which covers the processproduct shall be calculated by multiplying the revenue received by the fraction A/(A+B), method where A is the gross selling price of makingthe product sold separately (i.e., making, having made, importing, offering to sell or using or without any other components) and B is the gross selling price of such EXCLUSIVE HGS PRODUCT in the country in which such EXCLUSIVE HGS PRODUCT was developed, made, sold or used. 6.5 components. In the event that no such separate sales are made of the product components, the portion shall be calculated by multiplying the revenue by the fraction C/(C+D) where C is the fully allocated cost of the product (not including the other components) and D is the fully allocated cost of the other components such costs being determined using generally accepted accounting procedures consistently applied. Thus, for example, if a research reagent is sold as a research chip, and the fully allocated cost of the chip is X and the fully allocated cost of the antibody on the chip, which antibody is a NON-COLLABORATION PRODUCT, is Y, ************. HGS Non-Dyax Products 3.7 Subject to Paragraphs 3.8 and 3.12, for each NON-DYAX PRODUCT which is sold by HGS, its AFFILIATES or its licensees, HGS shall pay to DYAX the following royalty: (a) a royalty of ************* NET SALES of such NON-DYAX PRODUCT sold by HGS, its AFFILIATES or its licensees in the THERAPEUTIC FIELD; and (b) a royalty of ************* NET SALES of such NON-DYAX PRODUCT sold by HGS, its AFFILIATES or its licensees in the DIAGNOSTIC FIELD or the RESEARCH REAGENT FIELD. 3.8 In the event HGS is required to pay royalties on NET SALES of a NON-DYAX PRODUCT to any THIRD PARTY as a result of any patent license required for HGS to practice the inventions claimed in the DYAX PATENT RIGHTS, HGS shall be permitted to offset such royalty payment against the royalty payments due DYAX on the same NET SALES, provided, however, that this offset shall be applied on a pro rata basis with any other offsets permitted by the THIRD PARTY, and provided further that no royalty payment due on any NET SALES shall be reduced by more than *************. DYAX Products in the Imaging Field 3.9 Subject to Paragraph 3.13, for each COLLABORATION PRODUCT which is sold by DYAX or its AFFILIATES in the IMAGING FIELD, DYAX shall pay to HGS the following royalty: (a) a royalty of ************* NET SALES of such COLLABORATION PRODUCT sold by DYAX or its AFFILIATES. No milestones shall be owed on such products. 3.10 Subject to Paragraph 3.13, if DYAX outlicenses a COLLABORATION PRODUCT to a THIRD PARTY for sale in order the IMAGING FIELD, DYAX shall pay to practice or have practiced HGS, in lieu of the technology claimed royalty set forth in CAT's ANTIBODY PATENTS with respect Paragraph 3.5, the following: (a) NET REVENUES received by DYAX from such outlicense, which portion is attributable to an EXCLUSIVE HGS PRODUCT, HGS shall be able to offset [the product outlicensed. ***] of such third party royalties against the royalties owed to CAT pursuant to Paragraph 6.2, provided that the royalty owed to CAT on any such EXCLUSIVE HGS PRODUCT shall not be less than [***] of Net Sales in any year in which such royalty is owed. 6.6 In the event that CAT THIRD PARTY ROYALTY OBLIGATIONS are reduced from the amounts that CAT owes or would owe as of the Effective Date taking into account all applicable offsets, CAT shall promptly notify HGS in writing of such reduction, and HGS' royalty obligation under Paragraph 6.2 shall be reduced by an amount equal to [***] of such reduction****.

Payments and Royalties. 6.1 3.1 In consideration of exchange for the licenses granted and rights conveyed by INVENTOR to be granted hereunder, HGS will pay to CAT on the Effective Date twelve million U.S. dollars ($12,000,000). Exclusive HGS Products ---------------------- 6.2 Subject to Paragraphs 6.4, 6.5FUSION under this Agreement, and 6.6except as provided in Section 3.2 herein, for each EXCLUSIVE HGS PRODUCT which is a THERAPEUTIC PRODUCT, HGS FUSION shall pay to CAT the following royalties and milestone payments (which milestone payments under this Paragraph 6.2 shall be due and payable within thirty (30) days after the applicable milestone event is achieved by or on behalf of HGS, its AFFILIATE or (sub)licensee):INVENTOR: (1i) [***] upon the effective date an warrant issued by GUARANTOR providing rights for a period of the license granted pursuant five (5) years to Paragraphs 2.3 and 3.1.2 for such EXCLUSIVE HGS PRODUCT acquire up to TWENTY THOUSAND (220,000) [***] upon the start shares of a Phase I clinical trial for such EXCLUSIVE HGS PRODUCTcommon stock of GUARANTOR at an exercise price of $6.50; (3ii) [***] upon start a royalty on all sublicensing fees, payments and royalties ("Fees") received by FUSION with respect to any sublicense of a Phase III clinical trial for such EXCLUSIVE HGS PRODUCTany Affected Products, Affected Processes or Affected Materials to independent third parties equal to fifteen percent (15%) of cumulative Fees; (4iii) [***] upon first submission a royalty, on sales of a BLA for such EXCLUSIVE HGS PRODUCT; Affected Materials equal to five percent (5%) [***] upon the first regulatory approval of such EXCLUSIVE HGS PRODUCT for commercial saleNet Sales of Affected Materials; and (6iv) a royalty royalty, on sales of [***] Affected Products equal to seven and five-tenths percent (7.5%) of NET SALES Net Sales of such EXCLUSIVE HGS PRODUCT Affected Products. In any sale of an end product by FUSION incorporates Affected Materials or Affected Products, Net Sales of Affected Materials or Affected Products shall be the amount that FUSION would charge to a Third Party for the Affected Materials or Affected Products incorporated into the end product if sold by HGS, its AFFILIATES and (sub)licensees. HGS shall have no on a stand-alone basis. 3.2 FUSION's obligation to pay each milestone under Section 3.1 shall commence on the date hereof and ending on the tenth anniversary of this Agreement; provided, however, that this Agreement shall continue thereafter until expiration of the Licensed Patents in any and all countries (unless this Agreement is terminated sooner as provided herein). 3.3 The Affected Materials or Affected Products shall be considered sold when FUSION receives payment from its customer or sublicensee. Suitable adjustments may be made to CAT under this Paragraph 6.2 more than once sales records when the Affected Materials or Affected Products are returned and credit is given to the customer. 3.4 FUSION shall produce a report ("Royalty Report") setting forth in reasonable detail the calculation of the royalties payable to INVENTOR for each different EXCLUSIVE HGS PRODUCTQuarterly Period. 3.5 FUSION shall deliver to INVENTOR on or before the last day of each month following the end of each Quarterly Period in which the Affected Materials or Affected Products are sold or sublicensed, a Royalty Report for such Quarterly Period. For purposes Such Royalty Report shall be treated as confidential information of determining FUSION subject to Section 9 of this Agreement. 3.6 Royalty payments due hereunder shall be paid and delivered to INVENTOR on or before the milestone last day of each month following the end of each Quarterly Period. 3.7 Royalty payments shall be made in United States dollars. If any currency conversion shall be required in connection with the payment of royalties hereunder, such conversion shall be made by using the exchange rate prevailing at the Citibank, New York, New York on the date of payment by the customer or sublicensee to FUSION. 3.8 No royalty is due if the Affected Materials or Affected Products are given away as samples to promote sales of the Affected Materials or Affected Products. 3.9 FUSION may offset against all royalty payments owing under this Paragraph 6.2, an EXCLUSIVE HGS PRODUCT shall constitute the same EXCLUSIVE HGS PRODUCT as on Net Sales of Affected Materials any other EXCLUSIVE HGS PRODUCT, if such EXCLUSIVE HGS PRODUCT is directed and all amounts paid by FUSION or GUARANTOR to the same HGS ANTIGEN as the other EXCLUSIVE HGS PRODUCT, without regard to the formulation or means of administration thereof. 6.3 Subject to Paragraph 6.4, for each EXCLUSIVE HGS PRODUCT which is a DIAGNOSTIC PRODUCT, HGS shall pay to CAT the following royalties and milestone payments (which milestone payments under this Paragraph 6.3 shall be due and payable within thirty (30) days after the applicable milestone event is achieved by or on behalf of HGS, its AFFILIATES or (sub)licensees): (1) [***] upon first submission of a BLA for such EXCLUSIVE HGS PRODUCT; (2) [***] upon the first regulatory approval of such EXCLUSIVE HGS PRODUCT for commercial sale; and (3) a royalty of [***] of NET SALES of such EXCLUSIVE HGS PRODUCT sold by HGS, its AFFILIATES and (sub)licensees. HGS shall have no obligation to pay each milestone payment to CAT under this Paragraph 6.3 more than once for each different EXCLUSIVE HGS PRODUCT. For purposes of determining the milestone payments owing under this Paragraph 6.3, an EXCLUSIVE HGS PRODUCT shall constitute the same EXCLUSIVE HGS PRODUCT as any other EXCLUSIVE HGS PRODUCT, if such EXCLUSIVE HGS PRODUCT is directed to the same HGS ANTIGEN as the other EXCLUSIVE HGS PRODUCT, without regard to the formulation or means of administration thereof. 6.4 Royalty obligations under Paragraphs 6.2 and 6.3, Clarkson University with respect to an EXCLUSIVE HGS PRODUCT, such Affected Materials under the terms of GUARANTOR'S license with Clarkson University relating to the synthesis of metal powders and flakes. 3.10 FUSION shall terminate on a country-by-country basis and on an EXCLUSIVE HGS PRODUCT by EXCLUSIVE HGS PRODUCT basis on have the later of (i) [***] after first country-wide launch of such EXCLUSIVE HGS PRODUCT in such country or (ii) expiration of the last to expire patent on CAT BACKGROUND IP Licensed to HGS under option at any time during this Agreement which covers to purchase from INVENTOR all right, title and interest in and to the processIntellectual Property, method Licensed Patents and Improvements for a purchase price of makingFIFTEEN MILLION DOLLARS ($15, making, having made, importing, offering to sell or using or selling of such EXCLUSIVE HGS PRODUCT in the country in which such EXCLUSIVE HGS PRODUCT was developed, made, sold or used000,000). 6.5 In the event that HGS is required to pay a royalty to a THIRD PARTY in order to practice or have practiced the technology claimed in CAT's ANTIBODY PATENTS with respect to an EXCLUSIVE HGS PRODUCT, HGS shall be able to offset [***] of such third party royalties against the royalties owed to CAT pursuant to Paragraph 6.2, provided that the royalty owed to CAT on any such EXCLUSIVE HGS PRODUCT shall not be less than [***] of Net Sales in any year in which such royalty is owed. 6.6 In the event that CAT THIRD PARTY ROYALTY OBLIGATIONS are reduced from the amounts that CAT owes or would owe as of the Effective Date taking into account all applicable offsets, CAT shall promptly notify HGS in writing of such reduction, and HGS' royalty obligation under Paragraph 6.2 shall be reduced by an amount equal to [***] of such reduction.