Common use of Third Party Payments and Royalty Minimum Clause in Contracts

Third Party Payments and Royalty Minimum. (i) In the event that Patent Rights Controlled by a Third Party are necessary to exercise the rights licensed hereunder in the Licensed Patents with respect to the Exploitation of a Licensed Products in the Licensed Field in a country within the Territory under this Agreement, in a given calendar quarter, Erasca shall have the right to deduct from any payments payable to Katmai with respect to Net Sales of such Licensed Product in such country as set forth in Section 3.1(d) (Royalty Rate; Royalty Term) [***] percent ([***]%) of all royalties paid with respect to Net Sales of such Licensed Product in such country during such calendar quarter by or on behalf of Erasca to such Third Party for a license under such Patent Rights in connection with the Exploitation of Licensed Product in such calendar quarter subject to the royalty minimum set forth in Section 3.1(e)(iii) (Royalty Minimum) below. Notwithstanding the foregoing, Erasca shall confer with Katmai and provide Katmai with a reasonable opportunity to comment prior to Erasca’s undertaking any commitment to make payments to a Third Party that would give rise to a right to make deductions with respect to royalty payments to Katmai under this Agreement. Katmai shall provide comments to Erasca regarding such arrangements within ten (10) days of notice of the applicable commitment, which Erasca will consider in good faith. (ii) Notwithstanding anything to the contrary in this Agreement, Katmai shall remain solely responsible for the payment of all royalty, milestone, and other payment obligations, if any, due to Third Parties in connection with any Third Party license that Katmai sublicenses to Erasca under this Agreement, including, but not limited to, the UC License Agreement (the “Katmai Third Party Obligations”), provided that Katmai shall have no obligation to Erasca to fulfill any such Katmai Third Party Obligations (x) that are dependent upon Erasca’s fulfilling its obligations under this Agreement, or (y) where Katmai’s ability to perform such Katmai Third Party Obligation is impaired by Erasca’s non-fulfillment of any of its obligations under this Agreement, (e.g., Erasca’s payment obligations) in the event that Erasca is not in full compliance with the relevant obligations under this Agreement.