Royalties for Valid Claim Company Products. In consideration for the rights granted hereunder, in each calendar quarter during the Term and in each applicable country in which Denali records Net Sales of a Valid Claim Product that incorporates a Company Compound (each a “Valid Claim Company Product”) in such country, and subject to and in accordance with the terms and conditions of this Agreement, Denali shall pay to ​ on a Licensed Product-by-Licensed Product and country-by-country basis an amount equal to ​ of annual Net Sales of such Valid Claim Company Product sold in such countries.

Royalties for Valid Claim ​ Products. In consideration for the rights granted hereunder, in each calendar quarter during the Term and in each applicable country in which Denali records Net Sales of a Valid Claim Product that incorporates a ​ Compound (each a “Valid Claim ​ Product”) in such country, and subject to and in accordance with the terms and conditions of this Agreement, Denali shall pay to ​ on a Licensed Product-by-Licensed Product and country-by-country basis an amount equal to:

Royalties for Non-Valid Claim, Denali-Generated Company Compound Products. In consideration for the rights granted hereunder, in each calendar quarter during the Term in which Denali records Net Sales of Company Products not covered by a Valid Patent Claim which incorporate a Company Compound as described in Sections 1.8 (ii) or (iv) (each a “Denali-Generated Company Compound Product”) and subject to and in accordance with the terms and conditions of this Agreement, Denali shall pay to ​ on a Licensed Product-by-Licensed Product and country-by-country basis an amount as a percentage of annual worldwide Net Sales equal to # ​ of annual Net Sales of such Denali-Generated Company Compound Product if the applicable Company Compound was first discovered, derived or optimized by Denali ​, and # ​ of annual Net Sales of such Denali-Generated Company Compound Product if the applicable Company Compound was Controlled or owned by Denali ​.

Royalties for Non-Valid Claim ​ Products. In consideration for the rights granted hereunder, in each calendar quarter during the Term in which Denali records Net Sales of ​ Products not covered by a Valid Patent Claim, and subject to and in accordance with the terms and conditions of this Agreement, Denali shall pay to ​ on a Licensed Product-by-Licensed Product and country-by-country basis an amount equal to ​ of annual worldwide Net Sales of ​ Products not Covered by a Valid Patent Claim.

Royalties for Non-Valid Claim, Acquired Company Compound Products. In consideration for the rights granted hereunder, in each calendar quarter during the Term in which Denali records Net Sales of Company Products not covered by a Valid Patent Claim which incorporate a Company Compound that was licensed or acquired by Denali as described in Section 1.8(iii) (each an “Acquired Company Compound Product”), and subject to and in accordance with the terms and conditions of this Agreement, Denali shall pay to ​ on a Licensed Product-by-Licensed Product and country-by-country basis an amount as a percentage of annual worldwide Net Sales equal to # ​ of annual Net Sales of such Acquired Company Compound Product if the applicable Company Compound was acquired or licensed by Denali ​, and # ​ of annual Net Sales of such Acquired Company Compound Product if the applicable Company Compound was acquired or licensed by Denali ​.