Common use of Third Party Royalty Offset Clause in Contracts

Third Party Royalty Offset. If Company or any of its Affiliates or Sublicensees is legally required by a future court order, settlement agreement, contract, or other legally binding written commitment to make payments to a Third Party of running royalties on net sales of Licensed Products for a license under, or the use of, Patent Rights held by such Third Party that Cover the Exploitation of such Licensed Product and are reasonably necessary for the commercialization of such Licensed Product, then Company shall be entitled to credit [***] of the amounts actually paid by Company to such Third Party against the Royalties due to Broad for CONFIDENTIAL TREATMENT REQUESTED. INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED IS OMITTED AND MARKED WITH “[***]”. AN UNREDACTED VERSION OF THE DOCUMENT HAS ALSO BEEN FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION AS REQUIRED BY RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED. such Licensed Products under Section 4.4.1 of this Agreement. In the event that Company is entitled to take a credit under this Section 4.4.2, and takes a credit against Royalties due to Broad under this Agreement, then in the royalty report due to Broad under Section 5.1.1 at the time such credit is taken, Company shall include a calculation of the credit taken and, with the first such royalty report on which such credit is taken, the basis for Company’s determination of reasonable commercial necessity. In no event shall payments to Broad be reduced pursuant to this Section 4.4.2 such that Broad receives less than [***] of the rates set forth in Section 4.4.1. Any amounts that are not offset during a reporting period shall not be creditable against payments arising in subsequent reporting periods. In the event that Broad disagrees with Company’s credit of amounts actually paid by Company to a Third Party against the Royalties due to Broad for Licensed Products, then such Arbitration Dispute will be resolved in accordance with the procedures set forth in Sections 11.7.1 and 11.7.2.