Common use of Royalty Offset Clause in Contracts

Royalty Offset. If COMPANY or an AFFILIATE is required to pay royalties to one or more third parties in order to obtain a license or similar right necessary to make, use, or sell THERAPEUTIC PRODUCTS, COMPANY shall be entitled to credit up to [***] percent ([***]%) of the amounts actually paid by COMPANY or an AFFILIATE to such third parties for a THERAPEUTIC PRODUCT against the royalties due to M.I.T. under Section 4.1(d)(i) of this Agreement and up to [***] percent ([***]%) of the amounts actually paid by COMPANY or an AFFILIATE to such third parties for a DIAGNOSTIC PRODUCT against the royalties due to M.I.T. under Section 4.1(d)(ii) of this Agreement, in each case the same REPORTING PERIOD; provided, however, that (i) in no event will the royalties due to M.I.T. under Section 4.1(d)(i), when aggregated with any other offsets and credits allowed under this Agreement, be less than [***] percent ([***]%) of NET SALES of THERAPEUTIC PRODUCTS in any REPORTING PERIOD, (ii) in no event will the royalties due to M.I.T. under Section 4.1(d)(ii), when aggregated with any other offsets and credits allowed under this Agreement, be less than [***] percent ([***]%) of NET SALES of DIAGNOSTIC PRODUCTS in any REPORTING PERIOD, and (iii) payment of royalties by COMPANY or an AFFILIATE to such third party(ies) are required to be offset as a result of royalties payable to M.I.T. for THERAPEUTIC PRODUCTS by at least the same percentage as M.I.T. has offset its royalties under this Section 4.1(d)(iii). If in any REPORTING PERIOD, COMPANY is not able to fully recover the [***] percent ([***]%) portion or [***] percent ([***]%) portion, as applicable, of the payments due to such third party(ies) through a reduction in royalties hereunder as a result of the limitations in this Section 4.1(d)(iii), COMPANY shall be entitled to carry forward such right to offset to future REPORTING PERIODS with respect to the excess amount.