BioMimetic Therapeutics (BMTI)

4. FEES AND ROYALTIES

4.1 No Minimum Royalty. Luitpold shall not be required to pay any annual minimum royalty. BMTI hereby agrees it shall not amend, or seek to amend, the Harvard License or Zymogenetics License in order to increase Luitpold’s royalty obligations set forth herein.

4.2 Royalty Rate. Notwithstanding the foregoing, Luitpold shall, in exchange for the rights granted to Luitpold under this Agreement and commencing on execution of this Agreement, pay or cause to be paid to BMTI a royalty on its Net Sales of Licensed Products at the rates set forth in Exhibit B. Notwithstanding the expiration of the royalty obligations

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hereunder, if at any time BMTI’s total royalty obligations to third parties due solely to Luitpold’s actions in exercising its rights under this Agreement exceed the combined total royalties that Luitpold pays to BMTI under this Agreement and the Exclusive Sublicense Agreement with respect to such Licensed Product, Luitpold shall reimburse BMTI for the difference in such royalty obligations. Luitpold shall also reimburse BMTI for reasonable and documented payments to any third party, including license fees and sublicense fees, incurred and paid by BMTI due solely to Luitpold’s actions in exercising its rights under this Agreement, which shall not include any royalty payments made by BMTI related to the intellectual property sublicensed to Luitpold in the Restated Sublicense Agreement.

4.3 Royalty Reduction. On a country by country basis, if a product that contains rhPDGF competes against any Licensed Product and is marketed in the Field of Use, the applicable royalties above shall be reduced by ** if there is no patent coverage in such country; provided, however, that the applicable royalties shall not be less than any rates of BMTI’s required royalty payment to a third party as a result of Luitpold’s sale of any such Licensed Product.

4.4 Schedule and Form of Payment/Taxes. Luitpold shall pay royalties on a calendar quarter basis and payments shall be due and payable with the reports required by this Section 4.4 thirty (30) days following the close of the relevant accounting period. Each such payment shall be accompanied by a report for the period covered showing the total number or volume of Licensed Products sold and total Net Sales, each on a country-by-country basis (including end marked sales figures for a European Country and other major markets as specified in the ZymoGenetics License), the exchange rate used to convert any payments into United States dollars, and total royalties due, if any. If no royalties are due for any calendar quarter, Luitpold shall so report. All royalties and other amounts payable to BMTI hereunder shall be payable in United States dollars. Luitpold shall, when required to do so by applicable law, be responsible for the payment of all withholding taxes imposed by any country on any royalty or other amounts payable to BMTI hereunder and shall withhold such taxes from the amounts payable to BMTI hereunder. Luitpold will supply BMTI with documentation of such payment of withholding tax, in a form reasonably acceptable to BMTI, to meet the requirements for claiming foreign tax credits on BMTI’s federal income tax return. Notwithstanding the foregoing, if the law of any foreign country prevents any payment payable to BMTI hereunder to be made in the United States of America or prevents any such payment to be made in United States dollars, BMTI agrees to accept such payment in form and place as permitted, including deposits by Luitpold in the applicable foreign currency in a local bank or banks in such country designated by Luitpold. If any currency conversion is required in connection with any payment to BMTI hereunder such conversion shall be made at the average of the buying rate and the selling rate for the transfer of such other currency into United States Dollars as quoted by Citicorp Bank (New York), or its successor, on the last business day of the applicable accounting period, in the case of any payment payable with respect to a specified accounting period, or, in the case of any other payment, the last business day prior to the date of such payment.

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4.5 Records. Luitpold shall maintain, and shall ensure that its Distributors maintain, complete and accurate records sufficient to enable accurate calculation of royalties and other fees due BMTI under this Agreement. Once a calendar year, BMTI shall have the right to select a certified public accountant reasonably acceptable to Luitpold to inspect, on not less than fifteen (15) business days prior written notice and during regular business hours, the records of Luitpold and/or any Distributor necessary to verify Luitpold’s statement and payments due pursuant to this Agreement. Such accountant must execute a nondisclosure agreement reasonably satisfactory to Luitpold prior to any access to records. Luitpold agrees to, and to ensure that the Distributors, cooperate and provide reasonable access to their respective books, records and premises; provided, however, that such access shall be limited to those books and records necessary to verify the accuracy of the payments made to BMTI pursuant to this Agreement. The entire cost for such inspection shall be borne by BMTI unless there is a discrepancy of greater than, or equal to, five percent (5%) in Luitpold’s favor in which case Luitpold shall bear the entire cost of the inspection. Records shall be preserved by Luitpold and the Distributors for three (3) years for inspection by BMTI.

4. FEES AND ROYALTIES

4.1 No Minimum Royalty. Luitpold shall not be required to pay any annual minimum royalty. BMTI hereby agrees it shall not amend, or seek to amend, the Harvard License or Zymogenetics License in order to increase Luitpold’s royalty obligations set forth herein.

4.2 Royalty Rate. Notwithstanding the foregoing, Luitpold shall, in exchange for the rights granted to Luitpold under this Agreement and commencing on execution of this Agreement, pay or cause to be paid to BMTI a royalty on its Net Sales of Licensed Products at the rates set forth in Exhibit B. Notwithstanding the expiration of the royalty obligations

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hereunder, if at any time BMTI’s total royalty obligations to third parties due solely to Luitpold’s actions in exercising its rights under this Agreement exceed the combined total royalties that Luitpold pays to BMTI under this Agreement and the Exclusive Sublicense Agreement with respect to such Licensed Product, Luitpold shall reimburse BMTI for the difference in such royalty obligations. Luitpold shall also reimburse BMTI for reasonable and documented payments to any third party, including license fees and sublicense fees, incurred and paid by BMTI due solely to Luitpold’s actions in exercising its rights under this Agreement, which shall not include any royalty payments made by BMTI related to the intellectual property sublicensed to Luitpold in the Restated Sublicense Agreement.

4.3 Royalty Reduction. On a country by country basis, if a product that contains rhPDGF competes against any Licensed Product and is marketed in the Field of Use, the applicable royalties above shall be reduced by ** if there is no patent coverage in such country; provided, however, that the applicable royalties shall not be less than any rates of BMTI’s required royalty payment to a third party as a result of Luitpold’s sale of any such Licensed Product.

4.4 Schedule and Form of Payment/Taxes. Luitpold shall pay royalties on a calendar quarter basis and payments shall be due and payable with the reports required by this Section 4.4 thirty (30) days following the close of the relevant accounting period. Each such payment shall be accompanied by a report for the period covered showing the total number or volume of Licensed Products sold and total Net Sales, each on a country-by-country basis (including end marked sales figures for a European Country and other major markets as specified in the ZymoGenetics License), the exchange rate used to convert any payments into United States dollars, and total royalties due, if any. If no royalties are due for
any calendar quarter, Luitpold shall so report. All royalties and other amounts payable to BMTI hereunder shall be payable in United States dollars. Luitpold shall, when required to do so by applicable law, be responsible for the payment of all withholding taxes imposed by any country on any royalty or other amounts payable to BMTI hereunder and shall withhold such taxes from the amounts payable to BMTI hereunder. Luitpold will supply BMTI with documentation of such payment of withholding tax, in a form reasonably acceptable to BMTI, to meet the requirements for claiming foreign tax credits on BMTI’s federal income tax return. Notwithstanding the foregoing, if the law of any foreign country prevents any payment payable to BMTI hereunder to be made in the United States of America or prevents any such payment to be made in United States dollars, BMTI agrees to accept such payment in form and place as permitted, including deposits by Luitpold in the applicable foreign currency in a
local bank or banks in such country designated by Luitpold. If any currency conversion is required in connection with any payment to BMTI hereunder such conversion shall be made at the average of the buying rate and the selling rate for the transfer of such other currency into United States Dollars as quoted by Citicorp Bank (New York), or its successor, on the last business day of the applicable accounting period, in the case of any payment payable with respect to a specified accounting period, or, in the case of any other payment, the last business day prior to the date of such payment.

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4.5 Records. Luitpold shall maintain, and shall ensure that its Distributors maintain, complete and accurate records sufficient to enable accurate calculation of royalties and other fees due BMTI under this Agreement. Once a calendar year, BMTI shall have the right to select a certified public accountant reasonably acceptable to Luitpold to inspect, on not less than fifteen (15) business days prior written notice and during regular business hours, the records of Luitpold and/or any Distributor necessary to verify Luitpold’s statement and payments due pursuant to this Agreement. Such accountant must execute a nondisclosure agreement reasonably satisfactory to Luitpold prior to any access to records. Luitpold agrees to, and to ensure that the Distributors, cooperate and provide reasonable access to
their respective books, records and premises; provided, however, that such access shall be limited to those books and records necessary to verify the accuracy of the payments made to BMTI pursuant to this Agreement. The entire cost for such inspection shall be borne by BMTI unless there is a discrepancy of greater than, or equal to, five percent (5%) in Luitpold’s favor in which case Luitpold shall bear the entire cost of the inspection. Records shall be preserved by Luitpold and the Distributors for three (3) years for inspection by BMTI.