Source of Royalty definition
Source of Royalty. Bearing Product Royalty Rate (percentage of Net Sales) Worldwide Territory U.S. Territory --------------------------------- -------------------------------------- Sankyo Derivative Compound 3% 4% ArQule Compound or ArQule 4% 5% Derivative Compound A blended royalty rate of 3.5% for the Worldwide Territory and 4.5% for the U.S. Territory shall apply if a Royalty-Bearing Product is based on (i) both a Sankyo Derivative Compound and either an ArQule Compound or ArQule Derivative Compound or (ii) an ArQule Derivative Compound that is developed by Sankyo from a Licensed Compounds without any contribution from ArQule in a Directed Array Program under this Agreement. This royalty obligation shall commence with the first commercial sale of a Royalty-Bearing Product in any country and shall continue on a country-by-country basis until the expiration of the last to expire of any Patent Rights covering that Royalty-Bearing Product or, in any country in which the Royalty-Bearing Product is not covered by a Patent Right, for a period of ten (10) years from the date of first commercial sale of that Royalty-Bearing Product in that country.