Common use of Royalty Rate Reductions Clause in Contracts

Royalty Rate Reductions. (a) Notwithstanding Section 7.3.1 or Section 7.3.2, but subject to Section 7.3.3 and Section 7.3.4(c), in the event that: (1) from and after the date on which a Licensed Product is sold in a country in the Territory and is not claimed by a Royalty Claim in such country during the Royalty Term for such Licensed Product in such country, the royalty rate for such Licensed Product set forth in Section 7.3.1 or Section 7.3.2, as applicable, with respect to such country shall be reduced by [***]; and (2) if in any country in the Territory during the Royalty Term in such country for a Licensed Product (i) a Generic Product (other than a Generic Product approved in the U.S. pursuant to Section 505(b)(2) of the FFDCA or any foreign equivalent) with respect to such Licensed Product in such country has a market share of more than [***] in any Calendar Quarter or (ii) a Generic Product approved in the U.S. pursuant to Section 505(b)(2) of the FFDCA or any foreign equivalent with respect to such Licensed Product is launched in such country and unit sales of such Licensed Product in a Calendar Quarter have decreased by [***] or more from average unit sales in the four (4) Calendar Quarters immediately preceding the Calendar Quarter in which such a Generic Product is launched in such country, then in each case ((i) and (ii)), the royalties due to Morphic pursuant to this Section 7.3 with respect to such Licensed Product in such country shall be reduced by [***] beginning in the Calendar Quarter following the Calendar Quarter in which clause (i) or (ii), as applicable, occurs. With respect to clause (i), market share shall be based on [***] and with respect to clause (ii) market share shall be based [***]. (b) [***] (c) In no event shall the royalties payable to Morphic under Section 7.3.1 or Section 7.3.2, as applicable, for a particular Licensed Product be reduced by more than [***] of what would otherwise be payable in any Calendar Quarter as a result of the reductions (whether taken alone or together in the aggregate) set forth in Section 7.3.4, Section 7.5, Section 8.6.4 or Section 8.7; provided, however, that in no event shall the royalties payable to Morphic under Section 7.3.2 for a particular Cost-Share Product be reduced by more than [***] of what would otherwise be payable in any Calendar Quarter as a result of the reductions (whether taken alone or together in the aggregate) set forth in Section 7.5, Section 8.6.4 or Section 8.7. Notwithstanding anything to the contrary contained herein, nothing in this Section 7.3.3(c) shall impair the ability of AbbVie to seek and obtain indemnification in accordance with Section 11.2 or AbbVie’s right to offset in accordance with Section 7.14.

Royalty Rate Reductions. (a) Notwithstanding Section 7.3.1 or Section 7.3.2, but subject to Section 7.3.3 and Section 7.3.4(c), in the event that: (1) from and after the date on which a Licensed Product is sold in a country in the Territory and is not claimed by a Royalty Claim in such country during the Royalty Term for such Licensed Product in such country, the The royalty rate for such Licensed Product rates set forth in Section 7.3.1 or Section 7.3.2, 9.4 shall be subject to reduction as applicable, with respect to such country follows: (a) the royalty rates shall be reduced by [***]; and (2) if , on a country-by-country basis and Product-by-Product basis, in any each country in the Territory during the Royalty Term in such country for a Licensed Product which, at any given time, both (i) a Generic Product (other than a Generic Product approved in the U.S. pursuant to Section 505(b)(2) no Valid Claim of the FFDCA or any foreign equivalent) with respect to such Licensed Product in such country has a market share of more than MacroGenics Patents [***] of the applicable Product in any Calendar Quarter or such country, and (ii) a Generic Product approved in the U.S. pursuant to Section 505(b)(2either (x) of the FFDCA or any foreign equivalent with respect to such Licensed Product is launched in such country and unit sales of such Licensed Product in a Calendar Quarter have decreased by [***] or more from average unit sales in the four (4) Calendar Quarters immediately preceding the Calendar Quarter in which such a Generic Product is launched in such country, then in each case ((i) and (ii)), the royalties due to Morphic pursuant to this Section 7.3 with respect to such Licensed Product in such country [***]or (y) [***] Product in such country; (b) the royalty rates shall be reduced by [***] beginning ], on a country-by-country and Product-by-Product basis, in the Calendar Quarter following the Calendar Quarter each country in which clause which, at any given time, (i) or (ii), as applicable, occurs. With respect to clause (i), market share shall be based on no [***] of the applicable Product in such country, and with respect to clause (ii) market share shall be based there is [***]. (b) ] Product in such country and [***] (c) In in the event that the royalty rate reduction in Section 9.6(b) applies to a Product in a country [***]for such Product in such country [***], the reductions set forth in Section 9.6(a) shall thereafter apply to such Product in such country; (d) in the event that Company does not [***] in a country in which [***] and MacroGenics does not elect to [***] in accordance with Section 10.3(b) which would have been at its sole expense, the requirements set forth in clause (i) of Sections 9.6(a) and 9.6(b) shall not be deemed to have been satisfied, and there shall be no reduction in the applicable royalty rates until the global expiration date of the family of such [***]; and (e) in no event shall the royalties payable cumulative effect of all reductions available to Morphic Company under Section 7.3.1 or Section 7.3.2, as applicable, for a particular Licensed Product be reduced by more than this Agreement decrease the royalty rate to [***] of what would the otherwise be payable in any Calendar Quarter as a result of the reductions (whether taken alone or together in the aggregate) set forth in Section 7.3.4, Section 7.5, Section 8.6.4 or Section 8.7; provided, however, that in no event shall the royalties payable to Morphic under Section 7.3.2 for a particular Cost-Share Product be reduced by more than [***] of what would otherwise be payable in any Calendar Quarter as a result of the reductions (whether taken alone or together in the aggregate) set forth in Section 7.5, Section 8.6.4 or Section 8.7. Notwithstanding anything to the contrary contained herein, nothing in this Section 7.3.3(c) shall impair the ability of AbbVie to seek and obtain indemnification in accordance with Section 11.2 or AbbVie’s right to offset in accordance with Section 7.14applicable rates.

Royalty Rate Reductions. (a) Notwithstanding Section 7.3.1 or Section 7.3.2, but subject to Section 7.3.3 and Section 7.3.4(c), in the event that: (1) from and after the date on which a Licensed Product is sold in a country in the Territory and is not claimed by a Royalty Claim in such country during the Royalty Term for such Licensed Product in such country, the The royalty rate for such Licensed Product rates set forth in Section 7.3.1 or Section 7.3.2, 9.4 shall be subject to reduction as applicable, with respect to such country follows: (a) the royalty rates shall be reduced by [***]; and (2) if , on a country-by-country basis and Product-by-Product basis, in any each country in the Territory during the Royalty Term in such country for a Licensed Product which, at any given time, both (i) a Generic Product (other than a Generic Product approved in the U.S. pursuant to Section 505(b)(2) no Valid Claim of the FFDCA or any foreign equivalent) with respect to such Licensed Product in such country has a market share of more than MacroGenics Patents [***] of the applicable Product in any Calendar Quarter or such country, and (ii) a Generic either (x) [***] Product approved in the U.S. pursuant to Section 505(b)(2) of the FFDCA or any foreign equivalent with respect to such Licensed Product is launched in such country and unit sales of such Licensed Product in a Calendar Quarter have decreased by [***] or more from average unit sales in the four (4y) Calendar Quarters immediately preceding the Calendar Quarter in which such a Generic [***] Product is launched in such country, then in each case ; ((ib) and (ii)), the royalties due to Morphic pursuant to this Section 7.3 with respect to such Licensed Product in such country royalty rates shall be reduced by [***] beginning ], on a country-by-country and Product-by-Product basis, in the Calendar Quarter following the Calendar Quarter each country in which clause which, at any given time, (i) or no [***] of the applicable Product in such country, and (ii)) there is [***] Product in such country and [***]; (c) in the event that the royalty rate reduction in Section 9.6(b) applies to a Product in a country and [***] Product in such country [***] [***], as applicable, occurs. With respect the reductions set forth in Section 9.6(a) shall thereafter apply to clause such Product in such country; (i), market share shall be based on d) in the event that Company does not [***] in a country in which [***] and MacroGenics does not elect to [***] in accordance with respect to Section 10.3(b) which would have been at its sole expense, the requirements set forth in clause (iii) market share of Sections 9.6(a) and 9.6(b) shall not be deemed to have been satisfied, and there shall be based no reduction in the applicable royalty rates until the global expiration date of the family of such [***].; and (be) [***] (c) In in no event shall the royalties payable cumulative effect of all reductions available to Morphic Company under Section 7.3.1 or Section 7.3.2, as applicable, for a particular Licensed Product be reduced by more than this Agreement decrease the royalty rate to [***] of what would the otherwise be payable in any Calendar Quarter as a result of the reductions (whether taken alone or together in the aggregate) set forth in Section 7.3.4, Section 7.5, Section 8.6.4 or Section 8.7; provided, however, that in no event shall the royalties payable to Morphic under Section 7.3.2 for a particular Cost-Share Product be reduced by more than [***] of what would otherwise be payable in any Calendar Quarter as a result of the reductions (whether taken alone or together in the aggregate) set forth in Section 7.5, Section 8.6.4 or Section 8.7. Notwithstanding anything to the contrary contained herein, nothing in this Section 7.3.3(c) shall impair the ability of AbbVie to seek and obtain indemnification in accordance with Section 11.2 or AbbVie’s right to offset in accordance with Section 7.14applicable rates.