in the GSK
Territory reaches €[**] for the first time, Sepracor shall be entitled to a
milestone payment equal to $[**] for such Calendar Year (calculated by [**]).
(B)
REPORTS AND PAYMENTS. GSK SHALL NOTIFY SEPRACOR IN WRITING WITHIN
THIRTY (30) DAYS AFTER THE ACHIEVEMENT OF EACH MILESTONE SET OUT IN SECTION
7.2(A) BY GSK, OR ANY OF ITS AFFILIATES OR SUBLICENSEES. GSK SHALL MAKE PAYMENTS
WITHIN THIRTY (30) DAYS OF RECEIPT OF INVOICE ISSUED BY SEPRACOR FOLLOWING
ACHIEVEMENT OF SUCH MILESTONE. ANY MILESTONE PAYABLE BY GSK PURSUANT TO SECTION
7.2(A) SHALL BE MADE NO MORE THAN ONCE WITH RESPECT TO THE ACHIEVEMENT OF EACH
SUCH MILESTONE AND NO PAYMENT SHALL BE DUE FOR A MILESTONE WHICH IS NOT
ACHIEVED. THE MILESTONE PAYMENTS SET FORTH IN SECTION 7.2(A) SHALL NOT BE
REFUNDABLE AND SHALL NOT BE CREDITABLE AGAINST FUTURE MILESTONE PAYMENTS,
ROYALTIES OR OTHER PAYMENTS TO SEPRACOR UNDER THIS AGREEMENT.
(C)
TARGET LABEL DISPUTE. ANY DISPUTE REGARDING THE TARGET LABEL SHALL
BE RESOLVED IN THE FOLLOWING MANNER:
(I)
GSK AND SEPRACOR SHALL EACH APPOINT A [**] ("COMPANY RA
EXECUTIVES") TO MEET TO DISCUSS WHETHER THE TARGET LABEL HAS BEEN MET. IF, AFTER
[**], THE COMPANY RA EXECUTIVES ARE UNABLE TO AGREE ABOUT WHETHER THE TARGET
LABEL HAS BEEN MET, THEY SHALL AGREE UPON ONE ADDITIONAL INDEPENDENT PARTY,
UNAFFILIATED WITH EITHER PARTY, WHO IS AN ACKNOWLEDGED EXPERT IN PRODUCT
LABELING WITHIN THE EU ("INDEPENDENT RA EXPERT"). IF THE PARTIES ARE UNABLE TO
AGREE ON THE SELECTION OF AN INDEPENDENT RA EXPERT WITHIN A FURTHER [**],
CONFIDENTIAL
EITHER PARTY MAY APPLY TO THE WORLD INTELLECTUAL PROPERTY ORGANIZATION
ARBITRATION AND MEDIATION CENTER TO SEEK THEIR APPOINTMENT OF AN INDEPENDENT RA
EXPERT.
(II)
THE INDEPENDENT RA EXPERT SHALL MEET WITH THE COMPANY RA
EXECUTIVES, ALONE, WITHIN [**] OF HIS/HER APPOINTMENT AND THE GROUP SHALL WORK
FOR UP TO [**] TO AGREE UNANIMOUSLY UPON A CONCLUSION. IF THE GROUP IS UNABLE TO
MAKE A UNANIMOUS DECISION IN THAT PERIOD OF TIME, THEN A MAJORITY VOTE SHALL
PREVAIL.
(III)
ALL COSTS OF THE ABOVE PROCEDURE TO BE BORNE BY THE PARTY
INCURRING THEM, EXCEPT THAT THE COSTS RELATED TO THE INDEPENDENT RA EXPERT ARE
TO BE JOINTLY AND EVENLY SHARED.
7.3.
ROYALTY PAYMENTS.
(A)
ROYALTY RATE. SUBJECT TO THE TERMS AND CONDITIONS OF THIS
AGREEMENT, IN FURTHER CONSIDERATION OF THE RIGHTS GRANTED TO GSK UNDER THIS
AGREEMENT, GSK SHALL PAY TO SEPRACOR ROYALTIES AT THE RATES SET OUT BELOW ON
CALENDAR YEAR NET SALES OF THE PRODUCT IN THE GSK TERRITORY;
Calendar Year Net Sales
In GSK Territory
Royalty Rate
On the first €[**] of Net Sales of Product in the GSK Territory in each Calendar
Year
[**]
%
On additional Net Sales of Product in the GSK Territory in each Calendar Year >
€[**] but < €[**]
[**]
%
On additional Net Sales of Product in the GSK Territory in each Calendar Year >
€[**]
[**]
%
(B)
ROYALTY TERM. GSK'S OBLIGATION TO MAKE ROYALTY PAYMENTS PURSUANT
TO SECTION 7.3(A) WILL COMMENCE UPON THE