Common use of Third Party Royalty Obligations Clause in Contracts

Third Party Royalty Obligations. Subject to the following sentences, Pfizer shall be responsible for payment of all royalties due to Third Parties for the manufacture, development, use or sale of any Licensed Product in the Field in any country in the Territory by or under authority of Pfizer after the License Effective Date, including any royalty payments under existing licensing and other intellectual property agreements of Lpath existing as of the Execution Date (the “Existing Lpath Agreements”). The amount of Pfizer’s royalty payments under Section 6.3 with respect to Net Sales for such Licensed Product in such country shall be reduced by *** percent (***%) of any amounts payable by Pfizer to such Third Parties under the Existing Lpath Agreements. In addition, if Pfizer (a) reasonably determines in good faith that, in order to avoid infringement of any patent not licensed hereunder, it is reasonably necessary to obtain a license from a Third Party in order to make, have made, use, sell, offer for sale, supply, cause to be supplied, or import a Licensed Product in a country in the Territory and to pay a royalty or other consideration under such license (including in connection with the settlement of a patent infringement claim), or (b) shall be subject to a final court or other binding order or ruling requiring any payments, including the payment of a royalty to a Third Party patent holder in respect of sales of any Licensed Product in a country in the Territory, then the amount of Pfizer’s royalty payments under Section 6.3 with respect to Net Sales for such Licensed Product in such country shall be reduced by *** percent (***%) of any amounts payable by Pfizer to such Third Party. Notwithstanding the foregoing, the combined royalty reduction for any Licensed Product in the Field in any country pursuant to the preceding sentences in this Section 8.8 shall be subject to a maximum reduction of ***% of the royalty amounts indicated in clauses (a) through (e) in Section 6.3, and in no case shall the *** Portions of this page have been omitted pursuant to a request for Confidential Treatment filed separately with the Commission. total net royalty percentage by reason of the preceding sentences in this Section 8.8 be lower than *** percent (***%) for any Licensed Product in the Field in any country. Notwithstanding anything herein to the contrary, in the event that both an offset for Third Party royalties as described in the preceding sentences in this Section 8.8 and a reduction the last paragraph of Section 6.3 apply with respect to royalties otherwise due for sale of a given Licensed Product in a country, (i) the offset for Third Party royalties described in the preceding sentences in this Section 8.8 shall be applied first in determining royalties due and (ii) the total net royalty percentage payable under Section 6.3 shall not in any event be reduced to less than *** percent (***%) by reason of the preceding sentences in this Section 8.8 and the last paragraph of Section 6.3 together.

Third Party Royalty Obligations. Subject to the following sentences, Pfizer shall be responsible for payment of all royalties due to Third Parties for the manufacture, development, use or sale of any Licensed Product in the Field in any country in the Territory by or under authority of Pfizer after the License Effective Date, including any royalty payments under existing licensing and other intellectual property agreements of Lpath existing as of the Execution Date (the “Existing Lpath Agreements”). The amount of Pfizer’s royalty payments under Section 6.3 with respect to Net Sales for such Licensed Product in such country shall be reduced by *** percent (***%) of any amounts payable by Pfizer to such Third Parties under the Existing Lpath Agreements. In addition, if Pfizer If (a) reasonably determines in good faith that, in order to avoid infringement of any patent not licensed hereunder, Licensee reasonably determines that it is reasonably necessary to obtain a license from a Third Party in order to make, have made, use, sell, offer for sale, supply, cause to be supplied, Develop or import Commercialize a Licensed Product in a country in the Territory and to pay a royalty or other consideration under such license (including in connection with the settlement of a patent infringement claim), or (b) Licensee shall be subject to a final court or other similar binding order or ruling requiring any payments, including the payment of a royalty to a Third Party patent holder in respect of sales of any Licensed Product in a country in the Territory, then the amount of PfizerLicensee’s royalty payments under Section 6.3 with respect to Net Sales for such Licensed Product in such country country, prior to the application of any credits, shall be reduced by *** percent ([***] percent ([***]%) of any the amounts payable by Pfizer to such Third Party. Notwithstanding Licensee shall have the foregoingright to carry forward and apply any unused offset or deduction to which Licensee is entitled under this Section 4.5, against future royalties or other payments due to Licensor under Section 4.1 until the combined royalty reduction full amount of the offset or deduction to which Licensee is entitled is satisfied, provided that the aggregate off-set in any calendar year for any Licensed Product in the Field in any country pursuant to the preceding sentences in this Section 8.8 shall be subject to a maximum reduction of not exceed [***% of the royalty amounts indicated in clauses (a) through (e) in Section 6.3, and in no case shall the *** Portions of this page have been omitted pursuant to a request for Confidential Treatment filed separately with the Commission. total net royalty percentage by reason of the preceding sentences in this Section 8.8 be lower than *** ] percent ([***]%) of the amounts payable for any that Licensed Product in that calendar year, and provided further that any remaining off-set shall be offset in subsequent calendar years subject to the Field maximum aggregate off-set in any country. Notwithstanding anything herein to calendar year not exceeding [***] percent ([***]%) of the contrary, in the event amounts payable for that both an offset for Third Party royalties as described in the preceding sentences in this Section 8.8 and a reduction the last paragraph of Section 6.3 apply with respect to royalties otherwise due for sale of a given Licensed Product in a country, (i) the offset for Third Party royalties described in the preceding sentences in this Section 8.8 shall be applied first in determining royalties due and (ii) the total net royalty percentage payable under Section 6.3 shall not in any event be reduced to less than *** percent (***%) by reason of the preceding sentences in this Section 8.8 and the last paragraph of Section 6.3 togetherthat calendar year.

Third Party Royalty Obligations. Subject to the following sentences, Pfizer shall be responsible for payment of all royalties due to Third Parties for the manufacture, development, use or sale of any Licensed Product in the Field in any country in the Territory by or under authority of Pfizer after the License Effective Date, including any royalty payments under existing licensing and other intellectual property agreements of Lpath existing as of the Execution Date (the “Existing Lpath Agreements”). The amount of Pfizer’s royalty payments under Section 6.3 with respect to Net Sales for such Licensed Product in such country shall be reduced by *** percent (***%) of any amounts payable by Pfizer to such Third Parties under the Existing Lpath Agreements. In addition, if Pfizer If (a) reasonably determines in good faith that, in order to avoid infringement of any patent not licensed hereunder, it is reasonably necessary for Licensee to obtain a license from a Third Party in order to make, have made, use, sell, offer for sale, supply, cause to be supplied, or import a Licensed Product in a country in the Territory and to pay a royalty or other consideration under such license (including in connection with the settlement of a patent infringement claim), in which case, Licensee shall discuss the matter with Kosan prior to obtaining such a license, or (b) shall be subject to a final court or other similar binding order or ruling requiring any payments, including the payment of a royalty to a Third Party patent holder in respect of sales of any Licensed Product in a country in the Territory, then the amount of PfizerLicensee’s royalty payments under Section 6.3 with respect to Net Sales for such Licensed Product in such country shall be reduced by [*** percent (***%) ] of any amounts payable by Pfizer to such Third Party. Notwithstanding the foregoing, the combined royalty reduction for any Licensed Product in the Field in any country pursuant to the preceding sentences in this Section 8.8 shall be subject to a maximum reduction of ***% of the royalty amounts indicated in clauses (a) through (e) in Section 6.3, and in no case shall the *** Portions of this page have been omitted pursuant to a request for Confidential Treatment filed separately with the Commission. total net royalty percentage by reason of the preceding sentences in this Section 8.8 be lower than *** percent (***%) for any Licensed Product in the Field in any country. Notwithstanding anything herein to the contrary, in the event that both an offset for Third Party royalties as described in the preceding sentences in this Section 8.8 and a reduction the last paragraph of Section 6.3 apply with respect to royalties otherwise due for sale of a given Licensed Product in a country, (i) the offset for royalties on sales of such Licensed Product payable by Licensee to such Third Party or (ii) other amount payable by Licensee specifically as a total buyout of all of the Third Party’s expected royalties described on sales of such Licensed Product, provided, however, that in no event will a deduction, or deductions, under this Section 4.5, in the aggregate, reduce any royalty payment made by Licensee in respect of Net Sales of such Licensed Product by more than [*]. If, but for the proviso in the preceding sentences in this Section 8.8 shall be applied first in determining royalties due and (ii) sentence, the total net royalty percentage payable deduction under Section 6.3 shall not in any event 4.5(ii) would have reduced a royalty payment made by Licensee by more than [*], then the amount of such deduction that exceeds [*] will be reduced carried over to less than *** percent the subsequent royalty payment until the full amount the Licensee would have been entitled to deduct (***%absent the above limitation) by reason of the preceding sentences in this Section 8.8 and the last paragraph of Section 6.3 togetheris deducted.

Third Party Royalty Obligations. Subject to the following sentences, Pfizer shall be responsible for payment of all royalties due to Third Parties for the manufacture, development, use or sale of any Licensed Product in the Field in any country in the Territory by or under authority of Pfizer after the License Effective Date, including any royalty payments under existing licensing and other intellectual property agreements of Lpath existing as of the Execution Date (the “Existing Lpath Agreements”). The amount of Pfizer’s royalty payments under Section 6.3 with respect to Net Sales for such Licensed Product in such country shall be reduced by *** percent (***%) of any amounts payable by Pfizer to such Third Parties under the Existing Lpath Agreements. In addition, if Pfizer (a) reasonably determines in good faith that, in order to avoid infringement of any patent not licensed hereunder, it is reasonably necessary to obtain a license from a Third Party in order to make, have made, use, sell, offer for sale, supply, cause to be supplied, or import a Licensed Product in a country in the Territory and to pay a royalty or other consideration under such license (including in connection with the settlement of a patent infringement claim), or (b) shall be subject to a final court or other binding order or ruling requiring any payments, including the payment of a royalty to a Third Party patent holder in respect of sales of any Licensed Product in a country in the Territory, then the amount of Pfizer’s royalty payments under Section 6.3 with respect to Net Sales for such Licensed Product in such country shall be reduced by *** percent (***%) of any amounts payable by Pfizer to such Third Party. Notwithstanding the foregoing, the combined royalty reduction for any Licensed Product in the Field in any country pursuant to the preceding sentences in this Section 8.8 shall be subject to a maximum reduction of ***% of the royalty amounts indicated in clauses (a) through (e) in Section 6.3, and in no case shall the *** Portions of this page have been omitted pursuant to a request for Confidential Treatment filed separately with the Commission. 34 total net royalty percentage by reason of the preceding sentences in this Section 8.8 be lower than *** percent (***%) for any Licensed Product in the Field in any country. Notwithstanding anything herein to the contrary, in the event that both an offset for Third Party royalties as described in the preceding sentences in this Section 8.8 and a reduction the last paragraph of Section 6.3 apply with respect to royalties otherwise due for sale of a given Licensed Product in a country, (i) the offset for Third Party royalties described in the preceding sentences in this Section 8.8 shall be applied first in determining royalties due and (ii) the total net royalty percentage payable under Section 6.3 shall not in any event be reduced to less than *** percent (***%) by reason of the preceding sentences in this Section 8.8 and the last paragraph of Section 6.3 together.