Common use of Creditable Payments Clause in Contracts

Creditable Payments. The license maintenance fee for a year may be offset against earned royalty payments due on Net Sales occurring in that year. For example: (A) if Fate pays Stanford a $10 maintenance payment for year Y, and according to Section 7.6 $15 in earned royalties are due Stanford for Net Sales in year Y, Fate will only need to pay Stanford an additional $5 for that year’s earned royalties. (B) if Fate pays Stanford a $10 maintenance payment for year Y, and according to Section 7.6 $3 in earned royalties are due Stanford for Net Sales in year * Confidential Information, indicated by [***], has been omitted from this filing and filed separately with the Securities and Exchange Commission. Y, Fate will not need to pay Stanford any earned royalty payment for that year. Fate will not be able to offset the remaining $7 against a future year’s earned royalties.