BY THE PARTIES OR THEIR RELATED PARTIES FOR USE IN A CLINICAL STUDY OR
ANY OTHER DEVELOPMENT ACTIVITIES PERMITTED HEREIN; AND
* Confidential Treatment Requested.
Omitted portions filed with the Commission.
32
(III)
NO ROYALTIES SHALL ACCRUE ON THE DISPOSITION OF THE PRODUCT IN
REASONABLE QUANTITIES BY A PARTY OR ITS RELATED PARTIES AS SAMPLES (PROMOTION OR
OTHERWISE) OR AS DONATIONS (FOR EXAMPLE, TO NON-PROFIT INSTITUTIONS OR
GOVERNMENT AGENCIES FOR A NON-COMMERCIAL PURPOSE).
SECTION 7.2
ROYALTY REPORTS AND PAYMENTS.
WITHIN [*****] AFTER THE
END OF EACH CALENDAR QUARTER FOR WHICH ROYALTIES ARE PAYABLE BY A ROYALTY PAYOR
TO A ROYALTY RECIPIENT WITH RESPECT TO NET SALES PURSUANT TO SECTION 7.1, SUCH
ROYALTY PAYOR SHALL SUBMIT TO SUCH ROYALTY RECIPIENT A REPORT, ON A
COUNTRY-BY-COUNTRY BASIS, PROVIDING IN REASONABLE DETAIL AN ACCOUNTING OF ALL
NET SALES (INCLUDING AN ACCOUNTING OF ALL UNIT SALES OF THE PRODUCT) MADE DURING
SUCH CALENDAR QUARTER IN ITS TERRITORY AND THE CALCULATION OF THE APPLICABLE
ROYALTIES DUE TO THE OTHER PARTY UNDER SECTION 7.1, [*****] CONCURRENTLY WITH
THE SUBMISSION OF SUCH REPORT, SUCH ROYALTY PAYOR SHALL PAY TO SUCH ROYALTY
RECIPIENT ALL ROYALTIES PAYABLE BY IT UNDER SECTION 7.1 [*****]
SECTION 7.3
NON-ROYALTY IN-LICENSE PAYMENTS.
(A)
SUBJECT TO THE PROVISIONS OF SECTION 7.3(B) BELOW, THE NON-ROYALTY
FEES AND PAYMENTS DUE UNDER ANY IN-LICENSE THAT IS ENTERED INTO BY EITHER PARTY
AT ANY TIME AFTER THE EFFECTIVE DATE AND DURING THE TERM SHALL BE [*****].
NOTWITHSTANDING ANYTHING EXPRESS OR IMPLIED IN THE FOREGOING PROVISIONS OF THIS
SECTION 7.3(A) TO THE CONTRARY, THE PROVISIONS OF THIS SECTION 7.3(A) SHALL NOT
APPLY TO ANY NON-ROYALTY FEES AND PAYMENTS SUBJECT TO THE PROVISIONS OF SECTION
7.3(B) BELOW.
(B)
ANY NON-ROYALTY FEES AND PAYMENTS DUE WITH RESPECT TO THE INITIAL
FINISHED PRODUCT UNDER ANY IN-LICENSE THAT IS ENTERED INTO BY FOVEA PURSUANT TO
SECTION 2.8 AT ANY TIME AFTER THE EFFECTIVE DATE SHALL BE [*****]
(C)
FOR PURPOSES OF CLARIFICATION, THE PROVISIONS OF THIS SECTION 7.3
SHALL NOT APPLY TO ANY IN-LICENSE THAT IS IN EFFECT ON THE EFFECTIVE DATE AND,
EXCEPT AS EXPRESSLY PROVIDED HEREIN WITH RESPECT TO THE [*****] LICENSE
AGREEMENT, EACH PARTY SHALL BE RESPONSIBLE FOR ANY OBLIGATIONS UNDER ANY SUCH
IN-LICENSE TO WHICH IT IS A PARTY ON THE EFFECTIVE DATE.
SECTION 7.4
AUDITS.
EACH PARTY SHALL KEEP COMPLETE AND ACCURATE
RECORDS OF THE UNDERLYING PATENT AND TRADEMARK EXPENSES, NET SALES AND
IN-LICENSE ROYALTIES AND NON-ROYALTY PAYMENTS RELATING TO THE REPORTS AND
PAYMENTS REQUIRED BY SECTIONS 7.1, 7.2 AND 7.3,.
EACH PARTY WILL HAVE THE RIGHT
[*****]AT ITS OWN EXPENSE TO HAVE AN INDEPENDENT, CERTIFIED PUBLIC ACCOUNTANT,
SELECTED BY SUCH PARTY AND REASONABLY ACCEPTABLE TO THE OTHER PARTY, REVIEW ANY
SUCH RECORDS OF THE OTHER PARTY IN THE LOCATION(S) WHERE SUCH RECORDS ARE
MAINTAINED BY THE OTHER PARTY UPON REASONABLE NOTICE AND DURING REGULAR BUSINESS
HOURS AND UNDER OBLIGATIONS OF CONFIDENTIALITY, FOR THE SOLE PURPOSE OF
VERIFYING THE BASIS AND ACCURACY OF PAYMENTS MADE UNDER SECTIONS 7.1, 7.2 AND7.3
WITHIN THE PRIOR [*****] PERIOD.
IF