Licensee Right to Offset Clause Samples

Licensee Right to Offset. No deduction from or offset against any obligations of Licensee hereunder shall be allowed or taken on account of any license fees, royalties or other amounts that Licensee or Licensee's Affiliates or sublicensees may be required to pay on account of any Third Party Patents or Third Party intellectual property that is publicly disclosed as of the Effective Date of the Agreement; provided, however, that Licensee shall have the right to offset against royalty obligations to Anacor for sales of Licensed Product in a given country [***] of any license fees, milestone payments, royalties or other amounts actually paid to Third Parties in consideration for a license under such Third Party's intellectual property the existence of which was not publicly disclosed as of the Effective Date and a license to which is required to practice a claim within the Anacor Background Patents for the Development, Manufacture or Commercialization of the Licensed Product in an approved indication in such country (including any such license obtained in connection with the settlement of an Infringement Claim). The foregoing right of offset cannot be used to reduce the royalty otherwise payable to Anacor on sales of the Licensed Product in a given calendar quarter by more than the amount of royalties Licensee would owe to Anacor if each tier of the royalty rates set forth in Section 9.5 above were reduced by [***]; provided, that any amounts that cannot be offset due to such limitation can be offset against royalties payable to Anacor in subsequent calendar quarters (subject to the same limitation applying). In the event that this Section 9.6 applies during the same calendar quarter as either or both of the royalty reductions described in Section 9.5(d) and (e), then the royalty rate applicable during such calendar quarter will be calculated by first applying the offset described in this Section 9.6, then the applicable royalty reductions pursuant to Section 9.5. [***] THE SYMBOL [***] IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.