THAT THE DOCTRINE OF PATENT MISUSE OR ANY OTHER APPLICABLE LAW IS
NOT VIOLATED AND (II) THAT SUCH COURT OF COMPETENT JURISDICTION OR ARBITRATION
PANEL SHALL ENFORCE THE OBLIGATION OF CHIRON AND ITS AFFILIATES TO PAY ROYALTIES
TO CUBIST PURSUANT TO SECTION 7.3 USING SUCH REDUCED APPLICABLE ROYALTY RATE TO
CALCULATE CHIRON'S ROYALTY OBLIGATION UNDER SECTION 7.3.
7.5.
THIRD PARTY ROYALTIES AND OTHER PAYMENTS.
THE ROYALTIES PAYABLE BY CHIRON
TO CUBIST UNDER SECTION 7.3 SHALL BE INCLUSIVE OF (AND CUBIST SHALL BE SOLELY
RESPONSIBLE FOR) ANY AND ALL ROYALTY OBLIGATIONS OR OTHER PAYMENT OBLIGATIONS TO
THIRD PARTIES ARISING FROM LICENSE OR OTHER AGREEMENTS ENTERED INTO BY CUBIST
PRIOR TO THE EFFECTIVE DATE RELATING TO THE MANUFACTURE, USE, SALE, OFFER FOR
SALE OR IMPORTATION OF THE LICENSED PRODUCTS, INCLUDING WITHOUT LIMITATION, THE
LILLY LICENSE, OR AFTER THE EFFECTIVE DATE WITH RESPECT TO SUCH OBLIGATIONS
INCURRED BY CUBIST PURSUANT TO SECTION 8.5(C) RELATING TO PATENTS OF ANY THIRD
PARTY THAT WERE PUBLISHED OR GENERALLY AVAILABLE PRIOR TO THE EFFECTIVE DATE.
7.6.
ROYALTY PAYMENTS AND REPORTS.
ALL AMOUNTS PAYABLE TO CUBIST UNDER THIS
AGREEMENT SHALL BE PAID BY CHIRON IN DOLLARS WITHIN [*] OF THE END OF EACH
CALENDAR QUARTER EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED HEREIN.
EACH PAYMENT
OF ROYALTIES OWING TO CUBIST SHALL BE ACCOMPANIED BY A STATEMENT, ON A
COUNTRY-BY-COUNTRY BASIS, OF (I) THE AMOUNT OF GROSS SALES OF LICENSED PRODUCT,
(II) AN ITEMIZED CALCULATION OF NET SALES SHOWING DEDUCTIONS DURING SUCH
CALENDAR QUARTER PROVIDED FOR IN THE DEFINITION OF NET SALES, (III) THE AMOUNT
OF AGGREGATE GROSS SALES OF LICENSED PRODUCT AND NET SALES IN ALL COUNTRIES
WITHIN THE TERRITORY DURING SUCH CALENDAR QUARTER AND ON A CUMULATIVE BASIS AS
OF THE END OF SUCH CALENDAR QUARTER, (IV) THE AMOUNT OF ROYALTY DUE ON SUCH
SALES, AND (V) THE CURRENCY EXCHANGE RATES USED IN DETERMINING THE AMOUNT OF
DOLLARS PAYABLE TO CUBIST.
IF ANY ROYALTY REDUCTIONS ARE CLAIMED BY CHIRON
UNDER THIS AGREEMENT FROM THE FULL ROYALTY RATES SET FORTH IN SECTION 7.3, THEN
THE REPORT SHALL SET FORTH IN DETAIL THE CLAIMED REDUCTION AND THE RELATED
FACTS.
7.7.
NO REDUCTIONS OR OFFSETS.
CHIRON AND ITS AFFILIATES SHALL MAKE PAYMENT TO
CUBIST OF ALL AMOUNTS THAT CHIRON IS REQUIRED TO PAY TO CUBIST PURSUANT TO THIS
ARTICLE 7 WITHOUT ANY REDUCTION, OFFSET OR SETOFF, EXCEPT TO THE EXTENT
OTHERWISE EXPRESSLY PROVIDED IN SECTIONS 7.3(C), 7.3(D), 7.3(E) OR 7.3(F).
IN
ADDITION, IN THE EVENT THAT THE AMOUNT OF ROYALTIES DUE FROM CHIRON TO CUBIST
PURSUANT TO THIS AGREEMENT IS LESS THAN THE AGGREGATE TRANSFER PRICE PREVIOUSLY
PAID TO CUBIST FOR SUCH UNITS, THEN CHIRON ACKNOWLEDGES AND AGREES THAT IT SHALL
NOT BE ENTITLED TO ANY REFUND OR CREDIT OF SUCH PREVIOUSLY PAID TRANSFER PRICE,
AND THAT CUBIST SHALL NOT BE LIABLE OR RESPONSIBLE FOR, OR OWE CHIRON ANY MONIES
AS A RESULT OF, SUCH DEFICIENCY.
* CONFIDENTIAL TREATMENT REQUESTED: MATERIAL HAS BEEN OMITTED AND FILED WITH THE
COMMISSION
46
7.8.
TAX MATTERS.
(a)
The Parties acknowledge and agree that