Common use of Creditable Payments Clause in Contracts

Creditable Payments. The license maintenance fee for a year may be offset against earned royalty payments due on Net Sales occurring in that year. [*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. For example: (A) if Forty Seven pays Stanford a $10 maintenance payment for year Y, and according to Section 7.8 $15 in earned royalties are due Stanford for Net Sales in year Y, Forty Seven will only need to pay Stanford an additional $5 for that year’s earned royalties. (B) if Forty Seven pays Stanford a $10 maintenance payment for year Y, and according to Section 7.8 $3 in earned royalties are due Stanford for Net Sales in year Y, Forty Seven will not need to pay Stanford any earned royalty payment for that year. Forty Seven will not be able to offset the remaining $7 against a future year’s earned royalties.