a. genentech and licensee are parties to a patent litigation now pending in the united states district court, southern district of new york, captioned regeneron pharmaceuticals, inc. vs. genentech, inc. ( civil action no. 11 - cv - 01156 - vb ) ( the “ pending u. s. litigation ” ) ; b. in general, genentech claims in the pending u. s. litigation that certain of licensee ’ s activities with respect to the biopharmaceutical product known as aflibercept infringe and / or will infringe certain united states patents owned by genentech, and licensee claims that none of its activities with respect to aflibercept infringe any valid claim of such patents ; and c. genentech and licensee now are willing to settle some of the matters in dispute in the pending u. s. litigation, by means of genentech ’ s granting to licensee certain non - exclusive patent licenses desired by licensee, and licensee ’ s paying to genentech certain monetary consideration for the grant of such rights, all on the specific terms and conditions set forth herein. ( i ) credits or allowances granted for billing errors or for damaged, outdated, returned, rejected or recalled licensed product ; ( ii ) uncollectible amounts on previously sold licensed product and retroactive price reductions ; ( iii ) reasonable trade, cash and quantity discounts or rebates ; ( iv ) taxes, duties and any other governmental charges or levies imposed upon or measured by the manufacture, use, or sale of a licensed product, as adjusted by any rebates or refunds ; ( v ) chargebacks and rebates, including those granted to managed health care organizations, wholesalers, buying groups, retailers or to federal, state, local and other governments, their agencies and purchasers and reimbursers ; ( vi ) freight, insurance, data, distribution - related fees, and other charges or fees directly related to the handling or distribution of licensed product or services provided in connection with the handling or distribution of licensed product ( to the extent not paid by a third party customer ), subject, however, to the limitation that only fifty percent ( 50 % ) of any charges and fees associated with any credit card transactions may be included in the deductions ; and ( vii ) nursing fees, and inventory management fees,