Common use of Creditable Payments Clause in Contracts

Creditable Payments. The license maintenance fee paid in a calendar year may be offset against earned royalty payments due on Net Sales occurring in that year. For example: (A) if Eidos 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, Eidos will only need to pay Stanford an additional $5 for that year’s earned royalties. (B) if Eidos 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, Eidos will not need to pay Stanford any earned royalty payment for that year. Eidos will not be able to offset the remaining $7 against a future year’s earned royalties.