Common use of Royalty Stacking for Third Party Rights Clause in Contracts

Royalty Stacking for Third Party Rights. (a) If Calyxt is presently required, or in the future is required, to secure a royalty-bearing or fee-bearing license under any patent to use, make, have made, sell, offer for sale or import any Calyxt Licensed Product in the Calyxt Field in any jurisdiction (a “Necessary Third Party License”), then, during the period in which Calyxt is required to make royalty payments to the licensor under such Necessary Third Party License, Calyxt shall have the right to reduce the royalty rate contemplated in Section 5.01(a) with respect to the Net Sales of such Calyxt Licensed Product in such jurisdiction by an amount equal to one quarter (1/4) of the royalty rate payable to such licensor pursuant to such Necessary Third Party License; provided that, in no event shall the royalty rate contemplated in Section 5.01(a) with respect to any Net Sales of any Calyxt Licensed Product be reduced to less than two percent (2%). If such Necessary Third Party License includes a royalty stacking provision of like intent to this Section 5.02, the royalty rate reduction provided for in this Section 5.02 will be calculated as if such provision in such Necessary Third Party License were absent. For the avoidance of doubt, and notwithstanding anything in this Agreement to the contrary, in no event shall any agreement to which Calyxt is a party as of or prior to the Effective Date be deemed a Necessary Third Party License under this Agreement. (b) Without limiting Section 5.02(a), and by way of example only: (i) If, after the Effective Date, Calyxt is required to enter into a Necessary Third Party License, pursuant to which Calyxt is required to pay the licensor thereunder a royalty of two percent (2%) of the net sales of a Calyxt Licensed Product in a jurisdiction, then, during the period in which such royalty is required to be paid, the royalty rate contemplated in Section 5.01(a) with respect to the Net Sales of such Calyxt Licensed Product in such jurisdiction would equal two and one half percent (2.5%). (ii) If, after the Effective Date, Calyxt is required to enter into a Necessary Third Party License, pursuant to which Calyxt is required to pay the licensor thereunder a royalty of eight percent (8%) of the net sales of a Calyxt Licensed Product in a jurisdiction, then, during the period in which such royalty is required to be paid, the royalty rate contemplated in Section 5.01(a) with respect to the Net Sales of such Calyxt Licensed Product in such jurisdiction would equal two percent (2%).