Common use of Payment Step-Downs Clause in Contracts

Payment Step-Downs. (i) On a Licensed Product-by-Licensed Product and country-by-country basis, beginning on the first date on which a particular Licensed Product in a particular country is not Covered by one or more Valid Claims of a Licensed Patent (other than a Joint Patent) in such country, the royalty rate applicable to Net Sales of such Licensed Product in such country shall be reduced by [**] percent ([**]%) of the applicable royalty rate set forth in Section 6.3(a). (ii) Telix shall have the right to offset [**] percent ([**]%) of any royalty payments calculated on the basis of sales of Licensed Products payable by Telix or an Affiliate thereof to a Third Party [**], provided that (x) such offset under clause (2)(a) above with respect to royalty payments due with respect to patents Covering, or necessary for, Commercialization of a Licensed Antibody shall only apply if the relevant agreement under which royalty payments are owed was executed following the Effective Date and (y) such offset does not reduce Telix’s royalty obligation to Lilly by more than [**] percent ([**]%) of the amount otherwise payable pursuant to Section 6.3(a). (iii) The payment reductions set forth in this Section 6.3(b) shall be applied on a cumulative basis; provided, however that in no event, shall any royalties payable to Lilly under this Agreement with respect to any Licensed Product in a given Calendar Quarter be reduced pursuant to this Section 6.3(b) to less than [**] percent ([**]%) of the amount that would otherwise be payable to Lilly with respect to such Licensed Product in such Calendar Quarter.