Common use of First Product Clause in Contracts

First Product. If it is necessary for GSK, as determined by GSK in its sole discretion, to obtain a license from a Third Party to avoid infringing a Third Party Patent in connection with practicing PRINT or using the PRINT Material contained in the first Product sold under this Agreement, then GSK shall have the right to deduct from the royalties otherwise due to Liquidia on the sale of such Product an amount equal to [***] percent ([***]%) of the royalty payment paid by GSK to such Third Party pursuant to such license on account of such sale; provided, that GSK shall not be permitted to deduct royalties payable to Third Parties in an amount that would reduce the royalty rate payable to Liquidia by more than [***] percent ([***]%), subject always to Section 10.5(c)(iv) below. GSK shall have the right to carry forward against royalties payable on the sale of such first product in a subsequent calendar quarter any Third Party payment reduction that GSK is unable to take on such first product due to such limitation, subject to the limitation set forth in the proviso in the preceding sentence.