Common use of Royalty Rate Factors and License Terms Clause in Contracts

Royalty Rate Factors and License Terms. Each royalty obligation under Sections 2.3(d), 4.4(a), 10.10(c) and (d), 10.11(c) and (d), 10.12, 10.13 and 17.7(b) will be governed by this Section 10.14 as follows: (a) In each case the royalty rate will be negotiated by the Parties but will not be greater than the rate specified, or in the event the Parties cannot reach agreement on [***] indicates material that has been omitted pursuant to a request for confidential treatment. The omitted material has been filed separately with the Securities and Exchange Commission. the royalty rate by negotiation and the issue is referred to ADR under Article XVIII, the following factors will be considered in determining the royalty rate: (i) the strength of the intellectual property subject to the license; (ii) the profitability of the products to which such intellectual property would be applicable; (iii) whether the intellectual property is foundational to the product or merely incidental; (iv) the market royalty rate, if any, for licenses to intellectual property of similar scope for related or alternative technologies; (v) the ease with which the intellectual property can be avoided or designed around; (vi) whether the licensee will need to obtain licenses to intellectual property controlled by Third Parties in order to Commercialize a royalty bearing product; (vii) whether the license is exclusive, semi-exclusive or nonexclusive; (viii) whether the royalty rate will be dependent upon achievement of specified sales thresholds; and (ix) such other factors as are usual and customary in determining a reasonable royalty (e.g., the Georgia-Pacific factors). (b) Licenses subject to this Section 10.14 will include the following terms and conditions: (i) if the license being negotiated is other than exclusive, the royalty rate will be subject to adjustment to be at least as favorable to the licensee and its Affiliates as the royalty rate provided to any other of the licensor’s licensees under the same rights for comparable products in comparable markets (most favored licensee protection); (ii) the royalty rate will be additive to any royalty owed to a Third Party (Third Party royalties additional); (iii) Third Party royalties owed will be passed through by the licensor without mxxx-up (no mxxx-up on any pass through); (iv) if a product is subject to more than one license which is subject to this Section 10.14 or, for a given license, a product is subject to [***] indicates material that has been omitted pursuant to a request for confidential treatment. The omitted material has been filed separately with the Securities and Exchange Commission. multiple patents or technology grants, then the royalty rate will be the highest rate applicable for a given license, but royalties will not be cumulative, except for any Third Party royalties (no royalty stacking); (v) the term for royalty payments will be: (A) for licenses under Patent Rights, until expiration of the last to expire of the licensed patents on products which, but for the license, would infringe a Valid Claim of the licensed patents; and (B) for licenses under Technology, for a period of ten (10) years commencing from the first Commercialization of any product which is made using or otherwise embodies the Technology, but only if and for so long as Technology is Confidential Information; (vi) net sales will be calculated in the same manner as Net Sales; (vii) royalty payments will made in accordance with Section 9.7 within seventy-five (75) days after the end of each calendar quarter for sales during such preceding calendar quarter, and each royalty payment will be accompanied by a written report of net sales of the applicable products or services sold during the preceding calendar quarter and the royalties due; (viii) the Party and its Affiliates paying royalties will keep records sufficient to determine royalties due and will make them available for audit in accordance with Sections 9.8 and 9.9; and (ix) such other terms and conditions as are usual and customary. (c) The terms and conditions for licenses under Sections 2.3(d), 4.4(a), 10.10(c) and (d), 10.11(c) and (d), 10.12, 10.13 and 17.7(b) will be negotiated and determined in accordance with the following procedures: (i) the Parties will negotiate for a period of three (3) months commencing from written notice by the prospective licensee to the prospective licensor. The royalty factors and terms set forth in Sections 10.14(a) and 10.14(b) will be used as guidance to the Parties; and (ii) if after completion of the three (3) month negotiation period the Parties are unable to reach agreement, the issue of the license terms will be submitted to ADR pursuant to Sections 18.1 through 18.5, with each side required to submit its last, best proposed terms to the neutral. The neutral will select one of the Parties’ proposals and the prospective licensee will have the option of either electing to enter into an agreement with the terms of the selected proposal or to forever forgo its right to a license. (d) Royalties paid by one Party to the other Party in accordance with this Section 10.14, for purposes of the Alliance Program, will not be considered as Revenue of the receiving Party or Allowable Expenses for the paying Party. [***] indicates material that has been omitted pursuant to a request for confidential treatment. The omitted material has been filed separately with the Securities and Exchange Commission.

Royalty Rate Factors and License Terms. Each royalty obligation under Sections 2.3(d), 4.4(a), 10.10(c) and (d), 10.11(c) and (d), 10.12, 10.13 and 17.7(b) will be governed by this Section 10.14 as follows: (a) In each case the royalty rate will be negotiated by the Parties but will not be greater than the rate specified, or in the event the Parties cannot reach agreement on [***] indicates material that has been omitted pursuant to a request for confidential treatment. The omitted material has been filed separately with the Securities and Exchange Commission. the royalty rate by negotiation and the issue is referred to ADR under Article XVIII, the following factors will be considered in determining the royalty rate: (i) the strength of the intellectual property subject to the license; (ii) the profitability of the products to which such intellectual property would be applicable; (iii) whether the intellectual property is foundational to the product or merely incidental; (iv) the market royalty rate, if any, for licenses to intellectual property of similar scope for related or alternative technologies; (v) the ease with which the intellectual property can be avoided or designed around;; [**********] Indicates omitted material that is the subject of a confidential treatment request filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. Back to Contents (vi) whether the licensee will need to obtain licenses to intellectual property controlled by Third Parties in order to Commercialize a royalty bearing product; (vii) whether the license is exclusive, semi-exclusive or nonexclusive; (viii) whether the royalty rate will be dependent upon achievement of specified sales thresholds; and (ix) such other factors as are usual and customary in determining a reasonable royalty (e.g., the Georgia-Pacific factors). (b) Licenses subject to this Section 10.14 will include the following terms and conditions: (i) if the license being negotiated is other than exclusive, the royalty rate will be subject to adjustment to be at least as favorable to the licensee and its Affiliates as the royalty rate provided to any other of the licensor’s licensees under the same rights for comparable products in comparable markets (most favored licensee protection); (ii) the royalty rate will be additive to any royalty owed to a Third Party (Third Party royalties additional); (iii) Third Party royalties owed will be passed through by the licensor without mxxxxxxx-up (no mxxxxxxx-up on any pass through); (iv) if a product is subject to more than one license which is subject to this Section 10.14 or, for a given license, a product is subject to [***] indicates material that has been omitted pursuant to a request for confidential treatment. The omitted material has been filed separately with the Securities and Exchange Commission. multiple patents or technology grants, then the royalty rate will be the highest rate applicable for a given license, but royalties will not be cumulative, except for any Third Party royalties (no royalty stacking); (v) the term for royalty payments will be: (A) for licenses under Patent Rights, until expiration of the last to expire of the licensed patents on products which, but for the license, would infringe a Valid Claim of the licensed patents; and (B) for licenses under Technology, for a period of ten (10) years [**********] commencing from the first Commercialization of any product which is made using or otherwise embodies the Technology, but only if and for so long as Technology is Confidential Information; (vi) net sales will be calculated in the same manner as Net Sales; (vii) royalty payments will made in accordance with Section 9.7 within seventy-five (75) days after the end of each calendar quarter for sales during such preceding calendar quarter, and each royalty payment will be [**********] Indicates omitted material that is the subject of a confidential treatment request filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. Back to Contents accompanied by a written report of net sales of the applicable products or services sold during the preceding calendar quarter and the royalties due; (viii) the Party and its Affiliates paying royalties will keep records sufficient to determine royalties due and will make them available for audit in accordance with Sections 9.8 and 9.9; and (ix) such other terms and conditions as are usual and customary. (c) The terms and conditions for licenses under Sections 2.3(d), 4.4(a), 10.10(c) and (d), 10.11(c) and (d), 10.12, 10.13 and 17.7(b) will be negotiated and determined in accordance with the following procedures: (i) the Parties will negotiate for a period of three (3) months commencing from written notice by the prospective licensee to the prospective licensor. The royalty factors and terms set forth in Sections 10.14(a) and 10.14(b) will be used as guidance to the Parties; and (ii) if after completion of the three (3) month negotiation period the Parties are unable to reach agreement, the issue of the license terms will be submitted to ADR pursuant to Sections 18.1 through 18.5, with each side required to submit its last, best proposed terms to the neutral. The neutral will select one of the Parties’ proposals and the prospective licensee will have the option of either electing to enter into an agreement with the terms of the selected proposal or to forever forgo its right to a license. (d) Royalties paid by one Party to the other Party in accordance with this Section 10.14, for purposes of the Alliance Program, will not be considered as Revenue of the receiving Party or Allowable Expenses for the paying Party. [***] indicates material that has been omitted pursuant to a request for confidential treatment. The omitted material has been filed separately with the Securities and Exchange Commission.

Royalty Rate Factors and License Terms. Each royalty obligation under Sections 2.3(d), 4.4(a), 10.10(c) and (d), 10.11(c) and (d), 10.12, 10.13 and 17.7(b) will be governed by this Section 10.14 as follows: (a) In each case the royalty rate will be negotiated by the Parties but will not be greater than the rate specified, or in the event the Parties cannot reach agreement on [***] indicates material that has been omitted pursuant to a request for confidential treatment. The omitted material has been filed separately with the Securities and Exchange Commission. the royalty rate by negotiation and the issue is referred to ADR under Article XVIII, the following factors will be considered in determining the royalty rate: (i) the strength of the intellectual property subject to the license; (ii) the profitability of the products to which such intellectual property would be applicable; (iii) whether the intellectual property is foundational to the product or merely incidental; (iv) the market royalty rate, if any, for licenses to intellectual property of similar scope for related or alternative technologies; (v) the ease with which the intellectual property can be avoided or designed around; (vi) whether the licensee will need to obtain licenses to intellectual property controlled by Third Parties in order to Commercialize a royalty bearing product; (vii) whether the license is exclusive, semi-exclusive or nonexclusive; (viii) whether the royalty rate will be dependent upon achievement of specified sales thresholds; and (ix) such other factors as are usual and customary in determining a reasonable royalty (e.g., the Georgia-Pacific factors). (b) Licenses subject to this Section 10.14 will include the following terms and conditions: (i) if the license being negotiated is other than exclusive, the royalty rate will be subject to adjustment to be at least as favorable to the licensee and its Affiliates as the royalty rate provided to any other of the licensor’s licensees under the same rights for comparable products in comparable markets (most favored licensee protection); (ii) the royalty rate will be additive to any royalty owed to a Third Party (Third Party royalties additional); (iii) Third Party royalties owed will be passed through by the licensor without mxxx-up (no mxxx-up on any pass through); (iv) if a product is subject to more than one license which is subject to this Section 10.14 or, for a given license, a product is subject to [***] indicates material that has been omitted pursuant to a request for confidential treatment. The omitted material has been filed separately with the Securities and Exchange Commission. multiple patents or technology grants, then the royalty rate will be the highest rate applicable for a given license, but royalties will not be cumulative, except for any Third Party royalties (no royalty stacking); (v) the term for royalty payments will be: (A) for licenses under Patent Rights, until expiration of the last to expire of the licensed patents on products which, but for the license, would infringe a Valid Claim of the licensed patents; and (B) for licenses under Technology, for a period of ten (10) years [***] commencing from the first Commercialization of any product which is made using or otherwise embodies the Technology, but only if and for so long as Technology is Confidential Information; (vi) net sales will be calculated in the same manner as Net Sales; (vii) royalty payments will made in accordance with Section 9.7 within seventy-five (75) days after the end of each calendar quarter for sales during such preceding calendar quarter, and each royalty payment will be accompanied by a written report of net sales of the applicable products or services sold during the preceding calendar quarter and the royalties due; (viii) the Party and its Affiliates paying royalties will keep records sufficient to determine royalties due and will make them available for audit in accordance with Sections 9.8 and 9.9; and (ix) such other terms and conditions as are usual and customary. (c) The terms and conditions for licenses under Sections 2.3(d), 4.4(a), 10.10(c) and (d), 10.11(c) and (d), 10.12, 10.13 and 17.7(b) will be negotiated and determined in accordance with the following procedures: (i) the Parties will negotiate for a period of three (3) months commencing from written notice by the prospective licensee to the prospective licensor. The royalty factors and terms set forth in Sections 10.14(a) and 10.14(b) will be used as guidance to the Parties; and (ii) if after completion of the three (3) month negotiation period the Parties are unable to reach agreement, the issue of the license terms will be submitted to ADR pursuant to Sections 18.1 through 18.5, with each side required to submit its last, best proposed terms to the neutral. The neutral will select one of the Parties’ proposals and the prospective licensee will have the option of either electing to enter into an agreement with the terms of the selected proposal or to forever forgo its right to a license. (d) Royalties paid by one Party to the other Party in accordance with this Section 10.14, for purposes of the Alliance Program, will not be considered as Revenue of the receiving Party or Allowable Expenses for the paying Party. [***] indicates material that has been omitted pursuant to a request for confidential treatment. The omitted material has been filed separately with the Securities and Exchange Commission.