Common use of Adjustments Related to Necessary Third Party IP Rights Clause in Contracts

Adjustments Related to Necessary Third Party IP Rights. Subject to Section 4.4 below, on a Licensed Product-by-Licensed Product basis and on a country-by-country basis, (i) if Licensee or any of its Affiliates or Sublicensees is obligated to remit payments (the “Necessary Third Party IP Rights Payments”) to any third party in accordance with the terms of any license entered into by Licensee or any of its Affiliates or Sublicensees with respect to Necessary Third Party IP Rights owned or controlled by such third party (and, in the case of payments required to be so remitted by any such Sublicensee, royalties otherwise due from such Sublicensee to Licensee or any of its Affiliates are reduced as a result of any such required remittance by such Sublicensee) and/or (ii) if (1) Licensee or any of its Affiliates has not obtained a license under Ipsen New Formulation Technology pursuant to Section 2.7 hereof and (2) Licensee or any of its Affiliates or Sublicensees is obligated to remit payments (“Third Party Formulation Technology Payments”) to any third party in accordance with the terms of any license entered into by Licensee or any of its Affiliates or Sublicensees with respect to formulation technology owned or controlled by such third party and used by Licensee or any of its Affiliates and Sublicensees with any Licensed Product (“Third Party Formulation Technology”) (and, in the case of payments required to be so remitted by a Sublicensee, royalties otherwise due from such Sublicensee to Licensee or any of its Affiliates are reduced as a result of any such required remittance by such Sublicensee), Licensee shall be permitted to offset [ ]* of Necessary Third Party IP Rights Payments and/or [ ]* of Third Party Formulation Technology Payments against royalties due to Ipsen under this Agreement with respect to sales of the applicable Licensed Product in the applicable country; provided, however, that (i) any offset of Third Party Formulation Technology Payments shall not result in a reduction of more than [ ]* of the royalty payments that would otherwise have been due to Ipsen under this * CONFIDENTIAL TREATMENT REQUESTED. OMITTED PORTIONS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. Agreement in any calendar year with respect to sales of the applicable Licensed Product in the applicable country and (ii) any offset of Necessary Third Party IP Rights Payments shall not result in a reduction of more than [ ]* of the royalty payments that would otherwise have been due to Ipsen under this Agreement in any calendar year with respect to sales of the applicable Licensed Product in the applicable country. In case Licensee has not been able to offset any allowed amount during any relevant calendar year, no resulting payment shall be due from Ipsen to Licensee as a result of such shortfall, but Licensee shall be entitled to carry over such shortfall to one or more subsequent calendar years and seek to offset the full amount of such shortfall against payments otherwise due to Ipsen in such subsequent calendar year or calendar years (subject always to the limitation set forth in this Section 4.3 and in Section 4.4).

Adjustments Related to Necessary Third Party IP Rights. Subject to Section 4.4 4.3 below, on a Licensed Product-by-Licensed Product basis and on a country-by-country basis, (i) if Licensee or any of its Affiliates or Sublicensees is obligated to remit payments (the “Necessary Third Party IP Rights Payments”) to any third party in accordance with the terms of any license entered into by Licensee or any of its Affiliates or Sublicensees with respect to Necessary Third Party IP Rights owned or controlled by such third party (and, in the case of payments required to be so remitted by any such Sublicensee, royalties otherwise due from such Sublicensee to Licensee or any of its Affiliates are reduced as a result of any such required remittance by such Sublicensee) and/or (ii) if (1) Licensee or any of its Affiliates has not obtained a license under Ipsen New Formulation Technology pursuant to Section 2.7 hereof and (2) Licensee or any of its Affiliates or Sublicensees is obligated to remit payments (“Third Party Formulation Technology Payments”) to any third party in accordance with the terms of any license entered into by Licensee or any of its Affiliates or Sublicensees with respect to formulation technology owned or controlled by such third party and used by Licensee or any of its Affiliates and Sublicensees with any Licensed Product (“Third Party Formulation Technology”) (and, in the case of payments required to be so remitted by a Sublicensee, royalties otherwise due from such Sublicensee to Licensee or any of its Affiliates are reduced as a result of any such required remittance by such Sublicensee), Licensee shall be permitted to offset [ ]* of Necessary Third Party IP Rights Payments and/or [ ]* of Third Party Formulation Technology Payments against royalties due to Ipsen under this Agreement with respect to sales of the applicable Licensed Product in the applicable country; provided, however, that (i) any offset of Third Party Formulation Technology Payments shall not result in a reduction of more than [ ]* of the royalty payments that would otherwise have been due to Ipsen under this * CONFIDENTIAL TREATMENT REQUESTED. OMITTED PORTIONS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. Agreement in any calendar year with respect to sales of the applicable Licensed Product in the applicable country and (ii) any offset of Necessary Third Party IP Rights Payments shall not result in a reduction of more than [ ]* of the royalty payments that would otherwise have been due to Ipsen under this Agreement in any calendar year with respect to sales of the applicable Licensed Product in the applicable country. In case Licensee has not been able to offset any allowed amount during any relevant calendar year, no resulting payment shall be due from Ipsen to Licensee as a result of such shortfall, but Licensee shall be entitled to carry over such shortfall to one or more subsequent calendar years and seek to offset the full amount of such shortfall against payments otherwise due to Ipsen in such subsequent calendar year or calendar years (subject always to the limitation set forth in this Section 4.3 4.2 and in Section 4.44.3).