Common use of Royalty Reduction due to License of Third Party Intellectual Property Clause in Contracts

Royalty Reduction due to License of Third Party Intellectual Property. (a) If, during the Term and after consultation with the Company, Nestlé and/or any of its Affiliates enters into an agreement with a Third Party in order to obtain a royalty bearing license under any Patent Right of a Third Party that, in Nestlé’s reasonable judgment, would be necessary for Nestlé to Manufacture (to the extent permitted hereunder) or Commercialize HMPL-004 or such Product in the Field in the Territory, which Nestlé may only do in compliance with Section 4.3.3(b) (a “New Third Party License”), then Nestlé will be entitled, on a Product-by-Product and country-by-country basis, to credit against any royalty payable to the Company under Section 4.3.1 [**] of any royalty (but no other payments) (the “Company Portion”) actually paid by or on behalf of Nestlé and/or any of its Affiliates to such Third Party as a result; provided, however, that in no event will any royalty payable to the Company be reduced as a result of this Section 4.3.3 by more than [**] of the amount otherwise due to the Company over the same period. In addition, any such Company Portion will not reduce the amounts due to the Company under Section 4.3.1 in any Calendar Quarter by more than [**] of the amounts otherwise due. Any deductions of a Company Portion to which Nestlé is entitled under this Section 4.3.3 will be carried forward to the next Calendar Quarter until fully exhausted.

Royalty Reduction due to License of Third Party Intellectual Property. (a) If, during the Term and after consultation with the Company, Nestlé and/or any of its Affiliates enters into an agreement with a Third Party in order to obtain a royalty bearing license under any Patent Right of a Third Party that, in Nestlé’s reasonable 173 judgment, would be necessary for Nestlé to Manufacture (to the extent permitted hereunder) or Commercialize HMPL-004 or such Product in the Field in the Territory, which Nestlé may only do in compliance with Section 4.3.3(b4.2.3(b) (a “New Third Party License”), then Nestlé will be entitled, on a Product-by-Product and country-by-country basis, to credit against any royalty payable to the Company under Section 4.3.1 4.2.1 [**] of any royalty (but no other payments) (the “Company Portion”) actually paid by or on behalf of Nestlé and/or any of its Affiliates to such Third Party as a result; provided, however, that in no event will any royalty payable to the Company be reduced as a result of this Section 4.3.3 4.2.3 by more than [**] of the amount otherwise due to the Company over the same period. In addition, any such Company Portion will not reduce the amounts due to the Company under Section 4.3.1 4.2.1 in any Calendar Quarter by more than [**] of the amounts otherwise due. Any deductions of a Company Portion to which Nestlé is entitled under this Section 4.3.3 4.2.3 will be carried forward to the next Calendar Quarter until fully exhausted.