Common use of Third Party Royalty Clause in Contracts

Third Party Royalty. In the event that Licensee is required to pay a third party a royalty in order to enjoy the benefits of its license under this Agreement, the parties shall negotiate a reasonable deduction in the royalties owed under Section 2.4 to offset the third party royalty, but in no event shall the deduction be greater than [***] of the applicable royalty set forth in Section 2.4. The fair market values described above shall be determined by the parties hereto in good faith. In the absence of agreement as to the fair market value of all of the components contained in a Combination Product, the fair market value of each component shall be determined by arbitration in accordance with the provisions of Section 10.2 hereof.