definiens: shall mean any products, in any formulation, for use in the Licensed Fields of Use, derived from items(1 ), ( 2 ) or ( 3 ) of the Licensed Materials in Appendix A,[including products containing insignificant geneticmodifications.:J A BPIV Product may be ~ old alone, or as partof a Combination Product ( as defined in Paragraph 2.05).J shall mean any products, in anyformulation, for use in the Licensed Fields of Use, derivedfrom ~ infectious cDNA clone of items ( 1 ), ( 2 ) or ( 3 ) of theLicensed Materials in Appendix A and to which are attached bygenetic engineering non - BPIV3 antigens, such as, for example, HPIV3 or RSV . BPIV - Vector Products may be sold alone, or aspart of a Combination Product ( as defined in Paragraph 2.05 ~ Licensed Territory : WorldwideLicensed Fields of Use:(1 ) ~ttenuated vaccines for the prevention and treatment ofdiseases caused by human parainfluenza virus and otherdiseases in humans and animals:)(2)(BPIV vector for the prevention and treatment of diseases thatare caused by human parainfluenza virus and other diseases inhumans and animalS]NIH Office of Technology Tronsf ••• ( L.{)S8.961PHS BIOLOGICAL MATERIALS lICENSE AGREEMENT - EXCLUSNEPage 25- ( ANAL ! · Avion · May 29.1996 CONFIDENTlALCONFIDENTIALTREATMENTREQUESTEDAPPENDIX C - RoyaltiesRoyalties : License Issue RoyaltyLicensee agrees to pay to PHSa(z;oDcreditable, nonrefundable]license issue royalty in(!ive ( ~ equal installments]according tothe following schedule:(l)CTen Thousand Dollars ( $ 10,000 ) due no later than thirty ( 30)days after the Effective Date of this Agreement](2)ren Thousa ~ d Dollars ( $ 10,000 ) due twelve ( 12 ) months aftertheEffective Date of this Agreement 1(3)[Ten Thousand Dollars ( $ 10,000 ) due eighteen ( 18 ) months aftertheEffective Date of this Agreement](4)[!en Thousand Dollars ( $ 10,000 ) due twenty four ( 24 ) monthsafter the Effective Date of this Agreement](5)Lxen Thousand Dollars ( $ 10,000 ) due thirty ( 30 ) months aftertheEffective Date of this Agreement ] [ Minimum Annual RoYalty]Licensee agrees to pay to PHSa[nonrefundable minimum annualroyalty in the amount of Twenty Five Thousand ( $ 25,000.00)Dollars . JEarned Royalties for Net Sales of BPrv Products by Licensee:(1 ) Licensee agr ~ es to pay to PHSearned royalties of ~hreepercent ( 3 % ) of Licensee 's Net Sales ofBPrv Productsworldwide in the human Licensed Fields of use;](2 ) However, f?ne ( 1 ) year after, the first offer for sale of thefirstCompetitive Product in any country in which the BPrvProduct is being sold, the earned royalty rate for the BPrvProduct in that country will be reduced to one and ~ne - halfNIHOffice of Technology Tronsfe < IL.{)58.96)PHS BIOWGICAL MATERIALS UCENSE AGREEMENT - EXCLUSIVEPoge26-(ANAL)-Avron - May29.1996 CONFIDENTIALCONFJDEN'r1ALTREArMENTREQUESTEDpercent ( 1.5 % ) during the presence of the first CompetitiveProduct in that country and to one percent ( 1 % ) during thepresence of two ( 2 ) or more Competitive Products in thatcountry provided that such reductions in earned royalties willcontinue beyond termination or cessation of sales of suchCompetitive Products as provided in Paragraph 6.05 . In theevent that one ( 1 ) or more Competitive Products are beingoffered for sale in any country of the Licensed Territory atthe time of First Commercial Sale of a Licensed Product inthat country~ the earned royalty rate shall be reduced as setforth herein, provided that such reduction will be effectiveupon the First Commercial Sale of such Licensed pr ~ duct ~ Earned Royalties for Net Sales of BPIV Products by Sublicensee(s ) : ( 1 ) Licensee agrees to pay to PHS earned royalties of ~ hreepercent ( 3 % ) of its sublicensees ' .Net Sales of BP~ Productsin the United States in the human Licensed Fields of use;~(2 ) However,[?ne ( 1 ) yea~ after the first offer for sale of thefirst Competitive Product in the United States, the earnedroyalty rate for the BPIV Product in the U.S, will be reducedto one and one - half percent ( 1.5 % ) during the presence of thefirst Competitive Product in the U.S'.and to one percent ( 1%)during ~he presence of two ( 2 ) or more Competitive Products inthe U.S, provided that such reductions in earned royaltieswill continue beyond termination or cessation of sales of suchCompetitive Products as provided in Paragraph 6.05 . In theevent that one ( 1 ) or more Competitive Products are beingoffered for sale in any country of the Licensed Territory atthe time of First Commercial Sale of a Licensed Product.inthat country, the earned royalty rate shall be reduced as setforth herein, provided that such reduction will be e ~ fectiveupon the First Commercial Sale of such Licensed productC](3 ) Licensee agrees to pay to PHS earned royalties Of ~ WO percent(2 % ) of its sublicensees ' Net Sales of BPIV Products outsideof the Unitea States in the human Licensed Fields of UseiJ(4 ) However, Gne ( I ) year after the first offer for sale of one(1 ) or more Competitive Products in any country outside of theUnited States in which the BPIV Product is sold, the earnedroyalty rate for the BPIV Product in that coun ~ ry will bereduced to one percent ( 1%)'provided that such reductions inNIH Office of Technology Transfer ( L.()58.96)PHS BIOLOGICAL MATERIALS UCENSE AGREEMENT - EXCLUSIVEPage 27 -{ANAL ) · Avron · /I.\oy 29 . 1996 CONFIDENTIALCONFIDENTIALTREATMENTREQUESTEDearned royalties will continue beyond termination or cessationof sales of such Competitive Products as provided in Paragraph6.05 . In the event that one ( 1 ) or more Competitive Productsare being offered for sale in any country of the LicensedTerritory at the time of First Commercial Sale of a LicensedProduct in that country, the earned royalty rate shall bereduced as set forth herein, provided that such reduction willbe effective upon the First Commercial Sale of such Licensedproduct ] and(5 ) Licensee further agrees to pay to PHsr;hree percent ( 3 % ) ofall amounts actually paid to Licenseelb~ a sublicensee inexchange for the right to sell BPrv Products in territoriesoutside the United States in the human Licensed Fields of Use, provided, however, that such payment obligation shall notapply to amounts received from such sublicensee for ( 1)discrete and identifiable research and development activity,(2 ) equity investments in Licensee by such sublicensee, ( 3)loans by such sublicensee to Licensee, or ( 4 ) other similarfinancing activitieSjrOVided by such sublicensee for thebenefit of Licensee