definiens: ) but is not an Arti cle 3 Product ( as defined below ), DIVERSA shall pay to XOMA a royalty in cash equal to [ * ] percent ( [ * ] % ) of the Net Sales of such DIVERSA Product in each ca lendar quarter, commencing with the first calendar quarter ending after the Ef fective Date . Solely with respect to the royalty due pursuant to this Section 5.5(a ), the applicable royalty rate provided for herein shall be reduced b y [ * ] percent ( [ * ] % ) if, and only if, the applicable DIVERSA Product consists en tirely of a DIVERSA Product which arose entirely from the use of DIVERSA Patent Rights to optimize or alter a pre - defined characteristic of a pre - existing Immu noglobulin or protein, provided, however, that notwithstanding any other p rovision of this Agreement, no other deduction from the applicable royalty shal l be applied . By way of example, the reduction provided for in the prior se ntence of this Section 5.5(a ) does not apply to any composition of matter or arti cle of manufacture arising in part or in whole from the identification of such a composition of matter or article of manufacture by the screening a library o r collection of proteins or Immunoglobulins or a gene library encoding such pro teins or Immunoglobulins . For the avoidance of doubt, the royalty obligations pro vided for herein shall extend to and cover DIVERSA Products subject to this Agree ment and sold by any Development Partner of DIVERSA or DIVERSA Collabora tor