Common use of Subsequent Products Clause in Contracts

Subsequent Products. If it is necessary for GSK, as determined by GSK in its sole discretion, to obtain a license from a Third Party to avoid infringing a Third Party Patent in connection with the sale of Products sold under this Agreement (other than the first Product for which deduction of Third Party royalties are governed by Section 10.5(c)(iii)(A)), then GSK shall have the right to deduct from the royalties otherwise due to Liquidia on the sale of such Product an amount equal to [***]percent ([***]%) of the royalty payment paid by GSK to such Third Party pursuant to such license on account of such sale; provided, that GSK shall not be permitted to deduct royalties payable to Third Parties in an amount that would reduce the royalty rate payable to Liquidia by more than [***] percent ([***]%), subject always to Section 10.5(c)(iv) below. GSK shall have the right to carry forward against royalties payable on the sale of such product in a subsequent calendar quarter any Third Party payment reduction that GSK is unable to take on such product due to such limitation, subject to the limitation set forth in the proviso in the preceding sentence. Confidential treatment has been requested with respect to portions of this agreement as indicated by “[***]” and such confidential portions have been deleted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. For illustrative purposes only of Section 10.5(c)(iii)(B) above, if GSK owes Liquidia a royalty rate of [***] percent ([***]%) of Net Sales on a Product, and also owes a royalty rate of [***] percent ([***]%) of Net Sales to a Third Party, then GSK shall be entitled to deduct from royalties payable to Liquidia an amount equal to [***] percent ([***]%) of Net Sales. If GSK owes Liquidia a royalty rate of [***] percent ([***]%) of Net Sales on a Product, and also owes a royalty rate of [***] percent ([***]%) of Net Sales to a Third Party, then GSK shall be entitled to deduct from royalties payable to Liquidia an amount equal to [***] percent ([***]%) of Net Sales.

Subsequent Products. (a) If it NBIX is necessary for GSKinterested in developing any Subsequent Product in the Territory by conducting Nonclinical Studies, Phase I or Phase II Clinical Studies (such research or development to be referred to as determined “Subsequent Product Development”) , then, subject to NBIX (i) demonstrating to BIAL with written evidence that […***…], and (ii) providing BIAL with […***…], then the Parties may agree in their absolute discretion that such Subsequent Product may be developed. In such event, the Parties shall discuss whether any amendments to the SDEA, the Supply Agreement and the Quality Agreement are necessary. (b) If, after reaching an agreement on the matters identified in Section 2.9(a) and completing Subsequent Product Development, NBIX is interested in developing and commercializing in the Territory any Subsequent Product by GSK in its sole discretion, to obtain a license from a Third Party to avoid infringing a Third Party Patent in connection with the sale of Products sold under this Agreement (other than the first Product for which deduction of Third Party royalties are governed by Section 10.5(c)(iii)(A)conducting Phase III Clinical Trial(s), then GSK subject to NBIX (i) demonstrating to BIAL with written evidence that […***…], and (ii) providing BIAL with […***…], then the Parties may agree in their absolute discretion that such Subsequent Product may be developed. In such event: (A) the Parties shall negotiate in good faith to determine whether NBIX or BIAL will supply such Subsequent Product and either (A) a supply price and minimum supply price for the supply, from BIAL or its Affiliate or designee to NBIX, of the Subsequent Product and/or IMP to be used for Development Studies; or (B) the amount to be paid to BIAL in respect of each Unit of Subsequent Product and/or the IMP to be used for Development Studies manufactured by or on behalf of NBIX and the mechanism for such payment; and (B) the Parties shall enter into appropriate amendments to this Agreement, the SDEA, the Supply Agreement and the Quality Agreement. (c) In the event that the Parties fail to reach an agreement with respect to the matters identified in Sections 2.9(a) and 2.9(b) and other terms and conditions thereof within the period of […***…] […***…] after NBIX’s notification to BIAL pursuant to Section 2.9(a), then NBIX shall not have any rights (including, without limitation, the right to deduct from the royalties otherwise due to Liquidia on the sale of such Product an amount equal to [***]percent ([***]%develop, manufacture, register or commercialize) of the royalty payment paid by GSK to such Third Party pursuant to such license on account of such sale; provided, that GSK shall not be permitted to deduct royalties payable to Third Parties in an amount that would reduce the royalty rate payable to Liquidia by more than [***] percent ([***]%), subject always to Section 10.5(c)(iv) below. GSK shall have the right to carry forward against royalties payable on the sale of such product in a subsequent calendar quarter any Third Party payment reduction that GSK is unable to take on such product due to such limitation, subject to the limitation set forth in the proviso in the preceding sentence. Confidential treatment has been requested with respect to portions of this agreement as indicated by “[***]” and such confidential portions have been deleted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. For illustrative purposes only of Section 10.5(c)(iii)(B) above, if GSK owes Liquidia a royalty rate of [***] percent ([***]%) of Net Sales on a Subsequent Product, and also owes a royalty rate of [***] percent ([***]%) of Net Sales to a Third Party, then GSK for clarity BIAL shall be entitled to deduct from royalties payable to Liquidia an amount equal to [***] percent ([***]%) of Net Sales. If GSK owes Liquidia a royalty rate of [***] percent ([***]%) of Net Sales on a Product, and also owes a royalty rate of [***] percent ([***]%) of Net Sales to a Third Party, then GSK shall be entitled to deduct from royalties payable to Liquidia an amount equal to [***] percent ([***]%) of Net Saleshave no such rights in the Territory during the Term either.

Subsequent Products. (a) If it NBIX is necessary for GSKinterested in developing any Subsequent Product in the Territory by conducting Nonclinical Studies, Phase I or Phase II Clinical Studies (such research or development to be referred to as determined “Subsequent Product Development”), then, subject to NBIX (i) demonstrating to BIAL with written evidence that […***…], and (ii) providing BIAL with […***…], then the Parties may agree in their absolute discretion that such Subsequent Product may be developed. In such event, the Parties shall discuss whether any amendments to the SDEA, the Supply Agreement and the Quality Agreement are necessary. (b) If, after reaching an agreement on the matters identified in Section 2.9(a) and completing Subsequent Product Development, NBIX is interested in developing and commercializing in the Territory any Subsequent Product by GSK in its sole discretion, to obtain a license from a Third Party to avoid infringing a Third Party Patent in connection with the sale of Products sold under this Agreement (other than the first Product for which deduction of Third Party royalties are governed by Section 10.5(c)(iii)(A)conducting Phase III Clinical Trial(s), then GSK subject to NBIX (i) demonstrating to BIAL with written evidence that […***…], and (ii) providing BIAL with […***…], then the Parties may agree in their absolute discretion that such Subsequent Product may be developed. In such event: (A) the Parties shall negotiate in good faith to determine whether NBIX or BIAL will supply such Subsequent Product and either (A) a supply price and minimum supply price for the supply, from BIAL or its Affiliate or designee to NBIX, of the Subsequent Product and/or IMP to be used for Development Studies; or (B) the amount to be paid to BIAL in respect of each Unit of Subsequent Product and/or the IMP to be used for Development Studies manufactured by or on behalf of NBIX and the mechanism for such payment; and (B) the Parties shall enter into appropriate amendments to this Agreement, the SDEA, the Supply Agreement and the Quality Agreement. (c) In the event that the Parties fail to reach an agreement with respect to the matters identified in Sections 2.9(a) and 2.9(b) and other terms and conditions thereof within the period of […***…] *** Confidential Treatment Requested […***…] after NBIX’s notification to BIAL pursuant to Section 2.9(a), then NBIX shall not have any rights (including, without limitation, the right to deduct from the royalties otherwise due to Liquidia on the sale of such Product an amount equal to [***]percent ([***]%develop, manufacture, register or commercialize) of the royalty payment paid by GSK to such Third Party pursuant to such license on account of such sale; provided, that GSK shall not be permitted to deduct royalties payable to Third Parties in an amount that would reduce the royalty rate payable to Liquidia by more than [***] percent ([***]%), subject always to Section 10.5(c)(iv) below. GSK shall have the right to carry forward against royalties payable on the sale of such product in a subsequent calendar quarter any Third Party payment reduction that GSK is unable to take on such product due to such limitation, subject to the limitation set forth in the proviso in the preceding sentence. Confidential treatment has been requested with respect to portions of this agreement as indicated by “[***]” and such confidential portions have been deleted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. For illustrative purposes only of Section 10.5(c)(iii)(B) above, if GSK owes Liquidia a royalty rate of [***] percent ([***]%) of Net Sales on a Subsequent Product, and also owes a royalty rate of [***] percent ([***]%) of Net Sales to a Third Party, then GSK for clarity BIAL shall be entitled to deduct from royalties payable to Liquidia an amount equal to [***] percent ([***]%) of Net Sales. If GSK owes Liquidia a royalty rate of [***] percent ([***]%) of Net Sales on a Product, and also owes a royalty rate of [***] percent ([***]%) of Net Sales to a Third Party, then GSK shall be entitled to deduct from royalties payable to Liquidia an amount equal to [***] percent ([***]%) of Net Saleshave no such rights in the Territory during the Term either.