Common use of Third Party Royalty Set-Off Clause in Contracts

Third Party Royalty Set-Off. In the event that Licensee or a Sublicensee is required to obtain a license from a third party to an Infringed Patent in order to identify, THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. discover, develop, manufacture, use or sell a Type I or Type II Licensed Product, and Licensee or a Sublicensee obtains such a license after arm’s length negotiations, Licensee may offset [* * *] of any royalties paid under such third party license with respect to sales of Type I or Type II Licensed Products against the royalty payments that are due to Harvard pursuant to Section 4.5.1 or 4.5.2 with respect to sales of such Type I or Type II Licensed Product in such country. Notwithstanding the above, (a) the royalty payments to Harvard with respect to a Licensed Product that is the subject of an offset under this Section 4.5.3 may not be reduced by more than [* * *] of the amount otherwise due with respect to such Type I or Type II Licensed Product, (b) the offset that Licensee is entitled to make against royalty payments due to Harvard may not be greater than any offset that Licensee or a Sublicensee, as applicable, is entitled to make against royalty payments due to a third party licensee on account of royalty payments made under or by virtue of this Agreement and (c) in the event that a Sublicensee is required to obtain a license from a third party as described above, the percentage offset that Licensee is entitled to make against royalty payments due to Harvard with respect to Net Sales by such Sublicensee may not be greater than any percentage offset that such Sublicensee actually makes against royalty payments due to Licensee with respect to such Net Sales.

Third Party Royalty Set-Off. In the event that Licensee or a Sublicensee is required to obtain a license from a third party to an Infringed Patent in order to identify, THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. discover, develop, manufacture, use or sell a Type I or Type II Licensed Product, and Licensee or a Sublicensee obtains such a license after arm’s length negotiations, Licensee may offset [* * *] of any royalties paid under such third party license with respect to sales of Type I or Type II Licensed Products against the royalty payments that are due to Harvard pursuant to Section 4.5.1 or 4.5.2 with respect to sales of such Type I or Type II Licensed Product in such country. Notwithstanding the above, (a) the royalty payments to Harvard with respect to a Licensed Product that is the subject of an offset under this Section 4.5.3 may not be reduced by more than [* * *] of the amount otherwise due with respect to such Type I or Type II Licensed Product, (b) the offset that Licensee is entitled to make against royalty payments due to Harvard may not be greater than any offset that Licensee or a Sublicensee, as applicable, is entitled to make against royalty payments due to a third party licensee on account of royalty payments made under or by virtue of this Agreement and (c) in the event that a Sublicensee is required to obtain a license from a third party as described above, the percentage offset that Licensee is entitled to make against royalty payments due to Harvard with respect to Net 80198190_1 Sales by such Sublicensee may not be greater than any percentage offset that such Sublicensee actually makes against royalty payments due to Licensee with respect to such Net Sales.

Third Party Royalty Set-Off. In the event that Licensee or a Sublicensee is required to obtain a license from a third party to an Infringed Patent in order to identify, THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. discover, develop, manufacture, use or sell a Type I or Type II Licensed Product, and Licensee or a Sublicensee obtains such a license after arm’s length negotiations, Licensee may offset [* * *] of any royalties paid under such third party license with respect to sales of Type I or Type II Licensed Products against the royalty payments that are due to Harvard pursuant to Section 4.5.1 or 4.5.2 with respect to sales of such Type I or Type II Licensed Product in such country. Notwithstanding the above, (a) the royalty payments to Harvard with respect to a Licensed Product that is the subject of an offset under this Section 4.5.3 may not be reduced by more than [* * *] of the amount otherwise due with respect to such Type I or Type II Licensed Product, (b) the offset that Licensee is entitled to make against royalty payments due to Harvard may not be greater than any offset that Licensee or a Sublicensee, as applicable, is entitled to make against royalty payments due to a third party licensee on account of royalty payments made under or by virtue of this Agreement and (c) in the event that a Sublicensee is required to obtain a license from a third party as described above, the percentage offset that Licensee is entitled to make against royalty payments due to Harvard with respect to Net Sales by such Sublicensee may not be greater than any percentage offset that such Sublicensee actually makes against royalty payments due to Licensee with respect to such Net Sales.

Third Party Royalty Set-Off. In the event that If Licensee or a Sublicensee is required to obtain any Affiliate of Licensee obtains a license from a third party to an any Infringed Patent in order to identify, THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. discover, develop, manufacture, use or sell a Type I or Type II Licensed Product, and Licensee or a Sublicensee obtains such a license Reasonably Necessary IP after arm’s length negotiationsnegotiations (regardless of whether Licensee obtains such license prior to or after the date of issuance of an applicable patent application), then Licensee may offset [* * ***] of any royalties paid under such third party license royalty payments due thereunder with respect to sales of Type I or Type II Licensed Products in a particular country against the royalty payments that are due to Harvard pursuant with respect to Section 4.5.1 Net Sales of such Licensed Products CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. in such country. If any Sublicensee or 4.5.2 any Third Party Licensee obtains a license from a third party (that is not Licensee or any other Affiliate, Sublicensee or Third Party Licensee of Licensee) to any Infringed or Reasonably Necessary IP after arm’s length negotiations (regardless of whether obtained prior to or after the issuance of an applicable patent application), and Licensee allows such Affiliate, Sublicensee or Third Party Licensee to offset any percentage of the amount otherwise payable to Licensee by such Affiliate, Sublicensee or Third Party Licensee with respect to sales of Licensed Products in a particular country, then Licensee may offset the same percentage against the royalty payments that are due to Harvard with respect to Net Sales of such Type I or Type II Licensed Product Products in such country. Notwithstanding the aboveAny disagreements on whether any such intellectual property constitutes Infringed or Reasonably Necessary IP would be referred for final determination at Licensee’s expense to an independent patent attorney with requisite experience and expertise. The above notwithstanding, in no event shall (a) the royalty payments to Harvard with respect to a any such Licensed Product that is the subject of an offset under this Section 4.5.3 may not Products be reduced by more than [* * ***] of the amount otherwise due with respect to such Type I or Type II Licensed ProductHarvard, and (b) the offset that Licensee is entitled to make against royalty payments due to Harvard may not be greater than any offset that Licensee or a Sublicensee, as applicable, is entitled to make against royalty payments due to a third party licensee on account of royalty payments made under or by virtue of this Agreement and (c) in the event that a Sublicensee is required to obtain a license from a third party as described above, the percentage offset that Licensee is entitled to make against royalty payments due to Harvard with respect to Net Sales by such Sublicensee may not be greater than any percentage offset that such Sublicensee actually makes Licensee is entitled to make against royalty payments due to any such third party licensor on account of royalty payments made to Harvard with respect to any such Licensed Products. If with respect to the sale of a Licensed Product, Licensee, any Licensee Affiliate or any of their respective Sublicensees applies the third party royalty adjustment described in this Section 4.5.2 as a result of the fact that a component of such Licensed Product is covered by Infringed or Reasonably Necessary IP, then Licensee, such Licensee Affiliate or such Sublicensee may not also classify such Licensed Product as a Combination Product as described in Section 1.36 solely as a result of the addition of such component. For example only, if a finished product contains as active ingredients both (i) a compound that is a Licensed Product and (ii) a delivery technology that is covered by Infringed or Reasonably Necessary IP owned by a third party licensor, Licensee, such Licensee Affiliate or such Sublicensee may offset royalties owed to such third party with respect to such Net Salesdelivery technology in accordance with this Section 4.5.2, but may not also classify such Licensed Product as a Combination Product solely as a result of the addition of such delivery technology. For another example only, in the situation described in the immediately preceding sentence, if the Licensed Product also includes a second active ingredient that is not covered by Infringed or Reasonably Necessary IP owned by a third party licensor, then Licensee, such Licensee Affiliate or such Sublicensee may (A) offset royalties owed to such third party with respect to the delivery technology described in the immediately preceding sentence in accordance with this Section 4.5.2, and (B) treat the resulting product as a Combination Product where the second active ingredient is the other part of the Combination Product for purposes of the calculation under Section 1.36, but (C) not take any additional deductions for the royalties paid for the delivery technology.

Third Party Royalty Set-Off. In the event that Licensee or a Sublicensee is required to obtain a license from a third party to an Infringed Patent in order to identify, THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. discover, develop, manufacture, use or sell a Type I or Type II Licensed Product, and Licensee or a Sublicensee obtains such a license after arm’s length negotiations, Licensee may offset [* * *] of any royalties paid under such third party license with respect to sales of Type I or Type II Licensed Products against the royalty payments that are due to Harvard pursuant to Section 4.5.1 or 4.5.2 with respect to sales of such Type I or Type II Licensed Product in such country. Notwithstanding the above, (a) the royalty payments to Harvard with respect to a Licensed Product that is the subject of an offset under this Section 4.5.3 may not be reduced by more than [* * *] of the amount otherwise due with respect to such Type I or Type II Licensed Product, (b) the offset that Licensee is entitled to make against royalty payments due to Harvard may not be greater than any offset that Licensee or a Sublicensee, as applicable, is entitled to make against royalty payments due to a third party licensee on account of royalty payments made under or by virtue of this Agreement and (c) in the event that a Sublicensee is required to obtain a license from a third party as described above, the percentage offset that Licensee is entitled to make against royalty payments due to Harvard with respect to Net Sales by such Sublicensee may not be greater than any percentage offset that such Sublicensee actually makes against royalty payments due to Licensee with respect to such Net Sales.. 4.5.4