Common use of ROYALTIES AND OTHER CONSIDERATION Clause in Contracts

ROYALTIES AND OTHER CONSIDERATION. 4.1 In consideration of the rights, privileges and license granted by UNIVERSITY hereunder, LICENSEE shall pay royalties and other consideration as follows: (a) as an initial license fee, within ten (10) days execution of the Original License Agreement, One Hundred Thousand Dollars ($100,000) and Fifty Thousand (50,000) fully-paid shares of Common Stock of LICENSEE, upon the terms set forth in the Stock Issuance Agreement attached hereto as Exhibit “B”, (plus the reimbursement of reasonable patent expenses incurred as of the effective date of the Original License Agreement); (b) within ten (10) days following the issuance of a United States patent [*] and which includes, inter alia, claims substantially identical to those identified as pending claims [*] in UNIVERSITY’s “Response to Office Action” dated October 3, 2001, a milestone payment of Fifty Thousand (50,000) Shares of fully-paid Common Stock of LICENSEE upon the terms set forth in Exhibit “B”; and (c) royalties in an amount equal to [*] percent ([*]%) of NET SALES determined in a manner consistent with Section 4.7, below. 4.2 Royalty payments pursuant to Section 4.1(c), above, shall be paid to UNIVERSITY in United States dollars and directed to the address set forth in Section 12 hereof within sixty (60) days after March 31, June 30, September 30 and December 31 of each calendar year during the term of this Agreement. LICENSEE shall have the right to reduce the royalty rate payable under Section 4.1(c) in any calendar quarter by [*] ([*]) of the royalty rate paid to any third party, by judgment, contract or otherwise, for the right to manufacture, use or sell any LICENSED PRODUCT in such calendar quarter; provided, however, that the royalty rate due UNIVERSITY hereunder shall in no event be reduced to less than [*] percent ([*]%) of NET SALES. 4.3 Commencing on the first anniversary of the effective date of the Original License Agreement, LICENSEE shall pay to UNIVERSITY a minimum annual royalty, which amount shall be creditable against royalties actually due to the UNIVERSITY with respect to NET SALES in such calendar year. The first such payment shall be One Hundred Thousand Dollars ($100,000). The amount of such annual payment shall increase each year by Twenty-Five Thousand Dollars ($25,000), up to a maximum of Two Hundred Fifty Thousand Dollars ($250,000) per year. 4.4 UNIVERSITY shall also receive: (i) [*] percent ([*]%) of all SUB-LICENSE REVENUES received by LICENSEE within the first twelve (12) months after the effective date of the Original License Agreement; (ii) [*] percent ([*]%) of all SUB-LICENSE REVENUES received more than twelve (12) months but fewer than twenty-four (24) months after the EFFECTIVE DATE OF THE Original License Agreement, and of such payments; and (iii) five percent (5%) of all SUB-LICENSE REVENUES received more than twenty-four (24) months after the Effective date of the Original License Agreement. 4.5 Payments pursuant to this Agreement which are overdue shall bear interest calculated from the due date until payment is received at the rate of eight percent (8%) per annum. 4.6 LICENSEE shall sell LICENSED PRODUCTS in the ordinary course to the UPMC Health System upon request solely for patient use and not for resale, at such price(s) and on such terms and conditions as such products of similar quantities are made available to similar health systems. For purposes of clarity , section 2.2 does not impose a restriction on University’s right to use the LICENSED PRODUCTS purchased from LICENSEE under this section 4.6 in the ordinary course for patient administration solely through the UPMC Health System. 4.7 NET SALES as to the VITAMIN D component of each LICENSED PRODUCT sold by LICENSEE shall be determined and reported by LICENSEE solely in the manner provided in this Section 4.7. Following the end of each calendar quarter, LICENSEE shall ascertain the gross sales of all VITAMIN D products sold by it during such calendar quarter, and calculate a “net sales” figure for all its sales of VITAMIN D in such calendar quarter by deducting from its gross sales figure those items reflected in subsections (a) through (d) of Section 1. 5, above (the “VITAMIN D NET”). From the VITAMIN D NET, LICENSEE shall deduct the gross invoiced amount of all sales of VITAMIN D by LICENSEE during such calendar quarter which LICENSEE can demonstrate, by reference to data published by IMS or a comparably reputable objective source, was directly attributable to use of VITAMIN D other than in conjunction with a cytotoxic agent which would otherwise violate the PATENT RIGHTS, i.e. sales of VITAMIN D for monotherapy and sales of VITAMIN D for use in combination with other compounds where such compound is not covered by claims of the PATENT RIGHTS. The result of this calculation shall be considered the NET SALES as to the VITAMIN D component of a LICENSED PRODUCT by LICENSEE for purposes of this -Agreement.

ROYALTIES AND OTHER CONSIDERATION. 4.1 In consideration of the rights, privileges and license granted by UNIVERSITY hereunder, LICENSEE shall pay royalties and other consideration as follows: (a) as an initial license fee, within ten (10) days execution of the Original License Agreement, One Hundred Thousand Dollars ($100,000) and Fifty Thousand (50,000) 50,000 fully-paid shares of Common Stock of LICENSEE, upon the terms set forth in the Stock Issuance Agreement attached hereto as Exhibit “B”, (plus the reimbursement of reasonable patent expenses incurred as of the effective date of the Original License AgreementEffective Date); (b) within ten (10) days following the issuance of a United States patent claiming priority from U.S. Patent [*] and which includes, inter alia, claims substantially identical to those identified as pending claims [*] in UNIVERSITY’s “Response to Office Action” dated October 3, 2001, a milestone payment of Fifty Thousand (50,000) 50,000 Shares of fully-paid Common Stock of LICENSEE upon the terms set forth in Exhibit “B”; and (c) royalties in an amount equal to [*] percent ([*]%) of NET SALES determined in a manner consistent with Section 4.7, below. 4.2 Royalty payments pursuant to Section 4.1(c), above, shall be paid to UNIVERSITY in United States dollars and directed to the address set forth in Section 12 hereof within sixty (60) days after March 31, June 30, September 30 and December 31 of each calendar year during the term of this Agreement. LICENSEE shall have the right to reduce the royalty rate payable under Section 4.1(c) in any calendar quarter by [*] ([*]) of the royalty rate paid to any third party, by judgment, contract or otherwise, for the right to manufacture, use or sell any LICENSED PRODUCT in such calendar quarter; provided, however, that the royalty rate due UNIVERSITY hereunder shall in no event be reduced to less than [*] percent ([*]%) of NET SALES. 4.3 Commencing on the first anniversary of the effective date of the Original License AgreementEffective Date, LICENSEE shall pay to UNIVERSITY a minimum annual royalty, which amount shall be creditable against royalties actually due to the UNIVERSITY with respect to NET SALES in such calendar year. The first such payment shall be One Hundred Thousand [*] Dollars ($100,000[*]). The amount of such annual payment shall increase each year by Twenty-Five Thousand [*] Dollars ($25,000[*]), up to a maximum of Two Hundred Fifty Thousand [*] Dollars ($250,000) [*)] per year. 4.4 UNIVERSITY shall also receive: (i) [*] percent ([*]%) of all SUB-LICENSE REVENUES received by LICENSEE within the first twelve (12) months after the effective date of the Original License AgreementEffective Date; (ii) [*] percent ([*]%) of all SUB-LICENSE REVENUES received more than twelve (12) months but fewer than twenty-four (24) months after the EFFECTIVE DATE OF THE Original License AgreementDATE, and of such payments; and (iii) five [*] percent (5[*]%) of all SUB-LICENSE REVENUES received more than twenty-four (24) months after the Effective date of the Original License AgreementDate. 4.5 Payments pursuant to this Agreement which are overdue shall bear interest calculated from the due date until payment is received at the rate of eight percent (8%) per annum. 4.6 LICENSEE shall sell LICENSED PRODUCTS in the ordinary course to the UPMC Health System UNIVERSITY and its AFFILIATES upon request solely for patient use and not for resale, at such price(s) and on such terms and conditions as such products of similar quantities are made available to similar health systems. For purposes of clarity , section 2.2 does not impose a restriction on UniversityLICENSEE’s right to use the LICENSED PRODUCTS purchased from LICENSEE under this section 4.6 in the ordinary course for patient administration solely through the UPMC Health Systemmost favored commercial customer. 4.7 NET SALES as to the VITAMIN D component of each LICENSED PRODUCT sold by LICENSEE shall be determined and reported by LICENSEE solely in the manner provided in this Section 4.7. Following the end of each calendar quarter, LICENSEE shall ascertain the gross sales of all VITAMIN D products sold by it during such calendar quarter, and calculate a “net sales” figure for all its sales of VITAMIN D in such calendar quarter by deducting from its gross sales figure those items reflected in subsections (a) through (d) of of Section 1. 51.5, above (the “VITAMIN D NET”). From the VITAMIN D NET, LICENSEE shall deduct the gross invoiced amount of all sales of VITAMIN D by LICENSEE during such calendar quarter which LICENSEE can demonstrate, by reference to data published by IMS or a comparably reputable objective source, was directly attributable to use of VITAMIN D other than in conjunction with a cytotoxic agent which would otherwise violate the PATENT RIGHTS, i.e. sales of VITAMIN D for monotherapy and sales of VITAMIN D for use in combination with other compounds where such compound is not covered by claims of the PATENT RIGHTS. The result of this calculation shall be considered the NET SALES SAT ES as to the VITAMIN D component of a LICENSED PRODUCT by LICENSEE for purposes of this -Agreement- Agreement.

ROYALTIES AND OTHER CONSIDERATION. 4.1 In consideration of the rights, privileges and license granted by UNIVERSITY hereunder, LICENSEE shall pay royalties and other consideration as follows: (a) as an initial license fee, within ten (10) days execution of the Original License Agreement, One Hundred Thousand [*] Dollars ($100,000[*]) and Fifty Thousand (50,000) [*] fully-paid shares of Common Stock of LICENSEE, upon the terms set forth in the Stock Issuance Agreement attached hereto as Exhibit “B”, (plus the reimbursement of reasonable patent expenses incurred as of the effective date of the Original License AgreementEffective Date); (b) within ten (10) days following the issuance of a United States patent claiming priority from U.S. Patent [*] and which includes, inter alia, claims substantially identical to those identified as pending claims [*] in UNIVERSITY’s “Response to Office Action” dated October 3, 2001, a milestone payment of Fifty Thousand (50,000) [*] Shares of fully-paid Common Stock of LICENSEE upon the terms set forth in Exhibit “B”; and (c) royalties in an amount equal to [*] percent ([*]%) of NET SALES determined in a manner consistent with Section 4.7, below. 4.2 Royalty payments pursuant to Section 4.1(c), above, shall be paid to UNIVERSITY in United States dollars and directed to the address set forth in Section 12 hereof within sixty (60) days after March 31, June 30, September 30 and December 31 of each calendar year during the term of this Agreement. LICENSEE shall have the right to reduce the royalty rate payable under Section 4.1(c) in any calendar quarter by [*] ([*]) of the royalty rate paid to any third party, by judgment, contract or otherwise, for the right to manufacture, use or sell any LICENSED PRODUCT in such calendar quarter; provided, however, that the royalty rate due UNIVERSITY hereunder shall in no event be reduced to less than [*] percent ([*]%) of NET SALES. 4.3 Commencing on the first anniversary of the effective date of the Original License AgreementEffective Date, LICENSEE shall pay to UNIVERSITY a minimum annual royalty, which amount shall be creditable against royalties actually due to the UNIVERSITY with respect to NET SALES in such calendar year. The first such payment shall be One Hundred Thousand [*] Dollars ($100,000[*]). The amount of such annual payment shall increase each year by Twenty-Five Thousand [*] Dollars ($25,000[*]), up to a maximum of Two Hundred Fifty Thousand [*] Dollars ($250,000) [*)] per year. 4.4 UNIVERSITY shall also receive: (i) [*] percent ([*]%) of all SUB-LICENSE REVENUES received by LICENSEE within the first twelve (12) months after the effective date of the Original License AgreementEffective Date; (ii) [*] percent ([*]%) of all SUB-LICENSE REVENUES received more than twelve (12) months but fewer than twenty-four (24) months after the EFFECTIVE DATE OF THE Original License AgreementDATE, and of such payments; and (iii) five [*] percent (5[*]%) of all SUB-LICENSE REVENUES received more than twenty-four (24) months after the Effective date of the Original License AgreementDate. 4.5 Payments pursuant to this Agreement which are overdue shall bear interest calculated from the due date until payment is received at the rate of eight percent (8%) per annum. 4.6 LICENSEE shall sell LICENSED PRODUCTS in the ordinary course to the UPMC Health System UNIVERSITY and its AFFILIATES upon request solely for patient use and not for resale, at such price(s) and on such terms and conditions as such products of similar quantities are made available to similar health systems. For purposes of clarity , section 2.2 does not impose a restriction on UniversityLICENSEE’s right to use the LICENSED PRODUCTS purchased from LICENSEE under this section 4.6 in the ordinary course for patient administration solely through the UPMC Health Systemmost favored commercial customer. 4.7 NET SALES as to the VITAMIN D component of each LICENSED PRODUCT sold by LICENSEE shall be determined and reported by LICENSEE solely in the manner provided in this Section 4.7. Following the end of each calendar quarter, LICENSEE shall ascertain the gross sales of all VITAMIN D products sold by it during such calendar quarter, and calculate a “net sales” figure for all its sales of VITAMIN D in such calendar quarter by deducting from its gross sales figure those items reflected in subsections (a) through (d) of of Section 1. 51.5, above (the “VITAMIN D NET”). From the VITAMIN D NET, LICENSEE shall deduct the gross invoiced amount of all sales of VITAMIN D by LICENSEE during such calendar quarter which LICENSEE can demonstrate, by reference to data published by IMS or a comparably reputable objective source, was directly attributable to use of VITAMIN D other than in conjunction with a cytotoxic agent which would otherwise violate the PATENT RIGHTS, i.e. sales of VITAMIN D for monotherapy and sales of VITAMIN D for use in combination with other compounds where such compound is not covered by claims of the PATENT RIGHTS. The result of this calculation shall be considered the NET SALES SAT ES as to the VITAMIN D component of a LICENSED PRODUCT by LICENSEE for purposes of this -Agreement- Agreement.

ROYALTIES AND OTHER CONSIDERATION. 4.1 In consideration of the rights, privileges and license granted by UNIVERSITY hereunder, LICENSEE shall pay royalties and other consideration as follows: (a) as an initial license fee, within ten (10) days execution of the Original License Agreement, One Hundred Thousand Dollars ($100,000) and Fifty Thousand (50,000) 50,000 fully-paid shares of Common Stock of LICENSEE, upon the terms set forth in the Stock Issuance Agreement attached hereto as Exhibit “B”, (plus the reimbursement of reasonable patent expenses incurred as of the effective date of the Original License AgreementEffective Date); (b) within ten (10) days following the issuance of a United States patent claiming priority from U.S. Patent [*] and which includes, inter alia, claims substantially identical to those identified as pending claims [*] in UNIVERSITY’s “Response to Office Action” dated October 3, 2001, a milestone payment of Fifty Thousand (50,000) 50,000 Shares of fully-paid Common Stock of LICENSEE upon the terms set forth in Exhibit “B”; and (c) royalties in an amount equal to [*] percent ([*]%) of NET SALES determined in a manner consistent with Section 4.7, below. 4.2 Royalty payments pursuant to Section 4.1(c), above, shall be paid to UNIVERSITY in United States dollars and directed to the address set forth in Section 12 hereof within sixty (60) days after March 31, June 30, September 30 and December 31 of each calendar year during the term of this Agreement. LICENSEE shall have the right to reduce the royalty rate payable under Section 4.1(c) in any calendar quarter by [*] ([*]) of the royalty rate paid to any third party, by judgment, contract or otherwise, for the right to manufacture, use or sell any LICENSED PRODUCT in such calendar quarter; provided, however, that the royalty rate due UNIVERSITY hereunder shall in no event be reduced to less than [*] percent ([*]%) of NET SALES. 4.3 Commencing on the first anniversary of the effective date of the Original License AgreementEffective Date, LICENSEE shall pay to UNIVERSITY a minimum annual royalty, which amount shall be creditable against royalties actually due to the UNIVERSITY with respect to NET SALES in such calendar year. The first such payment shall be One Hundred Thousand Dollars ($100,000). The amount of such annual payment shall increase each year by Twenty-Five Thousand Dollars ($25,000), up to a maximum of Two Hundred Fifty Thousand Dollars ($250,000) per year. 4.4 UNIVERSITY shall also receive: (i) [*] percent ([*]%) of all SUB-LICENSE REVENUES received by LICENSEE within the first twelve (12) months after the effective date of the Original License AgreementEffective Date; (ii) [*] percent ([*]%) of all SUB-LICENSE REVENUES received more than twelve (12) months but fewer than twenty-four (24) months after the EFFECTIVE DATE OF THE Original License AgreementDATE, and of such payments; and (iii) five [*] percent (5[*]%) of all SUB-LICENSE REVENUES received more than twenty-four (24) months after the Effective date of the Original License AgreementDate. 4.5 Payments pursuant to this Agreement which are overdue shall bear interest calculated from the due date until payment is received at the rate of eight percent (8%) per annum. 4.6 LICENSEE shall sell LICENSED PRODUCTS in the ordinary course to the UPMC Health System UNIVERSITY and its AFFILIATES upon request solely for patient use and not for resale, at such price(s) and on such terms and conditions as such products of similar quantities are made available to similar health systems. For purposes of clarity , section 2.2 does not impose a restriction on UniversityLICENSEE’s right to use the LICENSED PRODUCTS purchased from LICENSEE under this section 4.6 in the ordinary course for patient administration solely through the UPMC Health Systemmost favored commercial customer. 4.7 NET SALES as to the VITAMIN D component of each LICENSED PRODUCT sold by LICENSEE shall be determined and reported by LICENSEE solely in the manner provided in this Section 4.7. Following the end of each calendar quarter, LICENSEE shall ascertain the gross sales of all VITAMIN D products sold by it during such calendar quarter, and calculate a “net sales” figure for all its sales of VITAMIN D in such calendar quarter by deducting from its gross sales figure those items reflected in subsections (a) through (d) of of Section 1. 51.5, above (the “VITAMIN D NET”). From the VITAMIN D NET, LICENSEE shall deduct the gross invoiced amount of all sales of VITAMIN D by LICENSEE during such calendar quarter which LICENSEE can demonstrate, by reference to data published by IMS or a comparably reputable objective source, was directly attributable to use of VITAMIN D other than in conjunction with a cytotoxic agent which would otherwise violate the PATENT RIGHTS, i.e. sales of VITAMIN D for monotherapy and sales of VITAMIN D for use in combination with other compounds where such compound is not covered by claims of the PATENT RIGHTS. The result of this calculation shall be considered the NET SALES SAT ES as to the VITAMIN D component of a LICENSED PRODUCT by LICENSEE for purposes of this -Agreement- Agreement.

ROYALTIES AND OTHER CONSIDERATION. 4.1 In consideration of the rights, privileges and license granted by UNIVERSITY hereunder, LICENSEE the Company shall pay royalties to the Licensor as set forth in, and other consideration as follows:in accordance with the provisions of, this Article 4 until termination or expiration of this Agreement pursuant to Article 7 hereof. 4.2 The Company shall pay to the Licensor and/or its representatives a non-refundable quarterly royalty in an amount equal to *** of Net Sales by the Company, or any Affiliate of the Company, of Licensed Products or Licensed Processes covered by at least one issued and unexpired claim under the Patent Rights. 4.3 The Company shall pay to the Licensor a non-refundable quarterly royalty in an amount equal to the lesser of (a) as an initial license fee, within ten (10) days execution *** of the Original License Agreement, One Hundred Thousand Dollars ($100,000) royalties received by Licensee or its Affiliate from sales by any sublicensee of Licensed Products or Licensed Processes and Fifty Thousand (50,000) fully-paid shares of Common Stock of LICENSEE, upon the terms set forth in the Stock Issuance Agreement attached hereto as Exhibit “B”, (plus the reimbursement of reasonable patent expenses incurred as of the effective date of the Original License Agreement); (b) within ten *** of Net Sales by any such sublicensee. 4.4 In addition, the Company shall pay to the Licensor *** of all lump-sum payments received by the Company or an Affiliate from its sublicensees for the use, lease or sale of Licensed Products and Licensed Processes, excluding (10a) days following payments used or reimbursed for research and development and (b) payments received from the issuance of a United States patent [*] and which includes, inter alia, claims substantially identical debt or equity securities of the Company. 4.5 The Company agrees to those identified as pending claims [*] in UNIVERSITY’s “Response pay to Office Action” dated October 3, 2001, a milestone payment of Fifty Thousand (50,000) Shares of fully-paid Common Stock of LICENSEE upon the terms Licensor the Milestone Payments set forth on Schedule C attached hereto, which shall be deducted from or credited against, as the case may be, payments made in Exhibit “B”; andaccordance with section 4.4 above. [CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR INFORMATION REDACTED FROM THIS PAGE.] 4.6 On each anniversary of the Effective Date, the Company shall pay to the Licensor an annual fee in the following amounts which shall be fully creditable against Milestones 2 through 5 as set forth on Schedule C attached hereto: (a) Year 1 - $100,000 (b) Year 2 - *** (c) Year 3 - *** (d) Year 4 and thereafter - ***. 4.7 On sales of Licensed Products by the Company to Affiliates or related parties that are end users of such Licensed Products, the value of Net Sales attributed under this Article 4 shall be that which would have been received in an arms-length transaction, based on sales of like quantity and quality products at or about the time of such transaction. 4.8 No multiple royalties shall be payable because the use, lease or sale of any Licensed Product or Licensed Process is, or shall be, covered by more than one valid and unexpired claim contained in the Patent Rights. In addition, royalties shall be paid for a Licensed Product or Licensed Process based upon only one of paragraphs 4.2 or 4.3 above (that is, royalties on direct sales of a Licensed Product or Licensed Process by the Company or its Affiliates shall be based only on paragraph 4.2, while royalties on sales of a Licensed Product or Licensed Process by the Company's sublicensees shall be based only on paragraph 4.3, so as to avoid double counting). 4.9 In the event that a Licensed Product is sold in the form of a combination product containing one or more products or technologies that are themselves not a Licensed Product, the Net Sales for such combination product shall be calculated by multiplying ***. In the case of a combination product which includes one or more Licensed Products, the Net Sales for such combination product upon which the royalty due to the Licensor is based shall not be less than the normal aggregate Net Sales for such Licensed Product. 4.10 Royalty payments shall be paid in United States dollars in New York, New York or at such other place as the Licensor may reasonably designate consistent with the laws and regulations controlling in any foreign country. Any withholding taxes that the Company, its Affiliate or any sublicensee shall be required by law to withhold on remittance of the royalty payments shall be deducted from such royalty payment to the Licensor. The Company shall furnish the Licensor with the original copies of all official receipts for such taxes. 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 Citibank, N.A. in New York, New York on the last business day of the calendar quarterly reporting period to which such royalty payments relate. The Company will reasonably cooperate with the Licensor in the Licensor's effort to avoid a double taxation, provided however that the Company shall not be required to pay any sums to or on behalf of the Licensor pursuant to this section 4.10. Such assistance shall not be interpreted to include the assistance or cooperation by the Company in any illegal activity or tax evasion by the Licensor. 4.11 Royalties payable to the Licensor shall be paid quarterly on or before forty-five (45) days from the end of each such calendar quarter. Each quarterly payment shall be for unpaid royalties that accrued within or prior to the Company's two most recently completed fiscal quarters. 4.12 Payment obligations shall be due with respect to any sale or sublicense covering any Licensed Product in the Territory 4.13 To the extent that the Company or any Affiliate of the Company is required, by order or judgement of any court to obtain in any jurisdiction any license from a third party in order to make, use or sell any Licensed Product or Licensed Process, then up to *** of the royalties payable hereunder with respect to such Licensed Product or Licensed Process in such jurisdiction may be deducted from royalties otherwise payable to the Licensor hereunder, provided that in no event shall the aggregate royalties payable to the Licensor in any quarterly period in such jurisdiction be reduced by more than *** as a result of such deduction, and provided further that any excess deduction remaining as a result of such limitation may be carried forward to subsequent periods. 4.14 In the event that the Licensor or any sublicensee registers, makes, has made, uses, leases, markets and/or sells any product in Germany, Switzerland, Greece, Sweden, Norway, Finland, Denmark, the United Kingdom, Ireland, France and/or Benelux, which incorporates information or know-how provided to the Licensor by the Company pursuant to paragraph 5.1 hereof, then the Licensor shall pay to the Company royalties in an amount equal to [*] percent ** of Net Sales by the Licensor or any such sublicensee and *** of any lump-sum payments received by the Licensor from such sublicensee. Notwithstanding the foregoing, any novel indication ([*]%which is defined as any indication different from intraperitoneal dialysis and not included in the Field of Use and/or in the Field of Not Novel Indications) discovered by the Company shall be and remain the property of NET SALES determined in a manner consistent with Section 4.7, belowthe Company for which it shall have exclusive world-wide rights to such indication. 4.2 Royalty payments (a) In the event that the Company develops proprietary information and data including but not limited to pre-clinical studies and clinical studies with applications outside the Field of Use and/or in the Field of Not Novel Indications ("Company Proprietary Information"), the Licensor shall be entitled to use the Company Proprietary Information within the Field of Use and/or in the Field of Not Novel Indications and outside the Territory but excluding those territories referred to in Section 4.14 above. In consideration for the use of the Company Proprietary Information, the Licensor shall pay the Company a fee in U.S. dollars equal to *** of the Company's expenses actually incurred for such information and data development, payable upon delivery thereof by the Company to the Licensor. The Licensor shall not be entitled to sublicense, assign, transfer, market or commercially exploit the Company Proprietary Information. The provisions of this section 4.15, shall not limit the Company's right to receive royalties pursuant to Section 4.1(c)4.14 above. [CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR INFORMATION REDACTED FROM THIS PAGE.] (b) In the event that the Licensor discovers and develops novel indications outside the Field of Use and/or in the Field of Not Novel Indications but including the field of interperitoneal dialysis, abovethe Licensor may have the option to purchase any relevant Company Proprietary Information relating thereto. In consideration for the use of the Company Proprietary Information, the Licensor shall be paid pay the Company a fee in U.S. dollars equal to UNIVERSITY in United States dollars *** of the Company's expenses actually incurred for such information and directed data development, payable upon delivery thereof by the Company to the address set forth in Section 12 hereof within sixty (60) days after March 31, June 30, September 30 and December 31 of each calendar year during the term of this Agreement. LICENSEE shall have the right to reduce the royalty rate payable under Section 4.1(c) in any calendar quarter by [*] ([*]) of the royalty rate paid to any third party, by judgment, contract or otherwise, for the right to manufacture, use or sell any LICENSED PRODUCT in such calendar quarter; provided, however, that the royalty rate due UNIVERSITY hereunder shall in no event be reduced to less than [*] percent ([*]%) of NET SALESLicensor. 4.3 Commencing on the first anniversary of the effective date of the Original License Agreement, LICENSEE shall pay to UNIVERSITY a minimum annual royalty, which amount shall be creditable against royalties actually due to the UNIVERSITY with respect to NET SALES in such calendar year. The first such payment shall be One Hundred Thousand Dollars ($100,000). The amount of such annual payment shall increase each year by Twenty-Five Thousand Dollars ($25,000), up to a maximum of Two Hundred Fifty Thousand Dollars ($250,000) per year. 4.4 UNIVERSITY shall also receive: (i) [*] percent ([*]%) of all SUB-LICENSE REVENUES received by LICENSEE within the first twelve (12) months after the effective date of the Original License Agreement; (ii) [*] percent ([*]%) of all SUB-LICENSE REVENUES received more than twelve (12) months but fewer than twenty-four (24) months after the EFFECTIVE DATE OF THE Original License Agreement, and of such payments; and (iii) five percent (5%) of all SUB-LICENSE REVENUES received more than twenty-four (24) months after the Effective date of the Original License Agreement. 4.5 Payments pursuant to this Agreement which are overdue shall bear interest calculated from the due date until payment is received at the rate of eight percent (8%) per annum. 4.6 LICENSEE shall sell LICENSED PRODUCTS in the ordinary course to the UPMC Health System upon request solely for patient use and not for resale, at such price(s) and on such terms and conditions as such products of similar quantities are made available to similar health systems. For purposes of clarity , section 2.2 does not impose a restriction on University’s right to use the LICENSED PRODUCTS purchased from LICENSEE under this section 4.6 in the ordinary course for patient administration solely through the UPMC Health System. 4.7 NET SALES as to the VITAMIN D component of each LICENSED PRODUCT sold by LICENSEE shall be determined and reported by LICENSEE solely in the manner provided in this Section 4.7. Following the end of each calendar quarter, LICENSEE shall ascertain the gross sales of all VITAMIN D products sold by it during such calendar quarter, and calculate a “net sales” figure for all its sales of VITAMIN D in such calendar quarter by deducting from its gross sales figure those items reflected in subsections (a) through (d) of Section 1. 5, above (the “VITAMIN D NET”). From the VITAMIN D NET, LICENSEE shall deduct the gross invoiced amount of all sales of VITAMIN D by LICENSEE during such calendar quarter which LICENSEE can demonstrate, by reference to data published by IMS or a comparably reputable objective source, was directly attributable to use of VITAMIN D other than in conjunction with a cytotoxic agent which would otherwise violate the PATENT RIGHTS, i.e. sales of VITAMIN D for monotherapy and sales of VITAMIN D for use in combination with other compounds where such compound is not covered by claims of the PATENT RIGHTS. The result of this calculation shall be considered the NET SALES as to the VITAMIN D component of a LICENSED PRODUCT by LICENSEE for purposes of this -Agreement.