Common use of Royalty Reduction Clause in Contracts

Royalty Reduction. In the event that SPL's Cost of Goods for Licensed Product are correctly determined to exceed [ * ] of Net Sales of Licensed Product and Licensor is unable to identify a third party capable of supplying SPL's requirements of Licensed Product at a price equal to or less than [ * ] of Net Sales of Licensed Product, then SPL shall remain responsible for the manufacture and supply of Licensed Product and the royalty rate to be paid by SPL under this Section 3.3 shall be reduced so that the total of (i) royalties payable by SPL to Licensor under this Agreement, and (ii) the Cost of Goods of Licensed Product manufactured by SPL and/or paid by SPL to third parties for the manufacture of Licensed Product, is equal to [ * ] of Net Sales of Licensed Product. Notwithstanding the foregoing, the royalty payable to Licensor under this Agreement shall not be reduced pursuant to this Section 3.3(c) to less then [ * ] where a Valid Claim exists, or [ * ] where no Valid Claim exists.

Royalty Reduction. In the event that SPLSchering's Cost of Goods for Licensed Product are correctly determined to exceed [ * ] of Net Sales of Licensed Product and Licensor is unable to identify a third party capable of supplying SPLSchering's requirements of Licensed Product at a price equal to or less than [ * ] of Net Sales of Licensed Product, then SPL Schering shall remain responsible for the manufacture and supply of Licensed Product and the royalty 18 92 rate to be paid by SPL Schering under this Section 3.3 shall be reduced so that the total of (i) royalties payable by SPL Schering to Licensor under this Agreement, and (ii) the Cost of Goods of Licensed Product manufactured by SPL Schering and/or paid by SPL Schering to third parties for the manufacture of Licensed Product, is equal to [ * ] of Net Sales of Licensed Product. Notwithstanding the foregoing, the royalty payable to Licensor under this Agreement shall not be reduced pursuant to this Section 3.3(c) to less then [ * ] where a Valid Claim exists, or [ * ] where no Valid Claim exists.