Non-Royalty Income. Means any payments or other consideration that Licensee or any of its Affiliates receives in connection with a Sublicense or Strategic Partnership, including without limitation, fees, milestone payments, agreement maintenance fees, and other payments, but specifically excluding (a) royalties based on Net Sales, (b) amounts received from a Sublicensee or Strategic Partner to cover reasonable, fully-burdened costs incurred or to be incurred by Licensee in the performance of research or... development activities after the Effective Date, (c) amounts received from a Sublicensee or Strategic Partner as reimbursement for out-of- pocket costs incurred by Licensee in the preparation, filing, prosecution and maintenance of the Patent Rights, or (d) consideration for the issuance of equity interests in Licensee to the extent the amount paid for such equity does not exceed its fair market value. If Licensee or its Affiliate receives non-cash consideration in connection with a Sublicense or Strategic Partnership, or in the case of transactions not at arm's length, Non-Royalty Income will be calculated based on the fair market value of such consideration or transaction, at the time of the transaction, assuming an arm's length transaction made in the ordinary course of business. To the extent Licensee receives compensation for both a grant of a Sublicense of rights to the Biological Material and/or the Technology Transfer Material under Section 2.1 and the grant of other rights or licenses to intellectual property other than a Sublicense of rights granted under Section 2.1, such compensation will be reasonably apportioned between that amount attributable to the Sublicense of rights under Section 2.1, which shall be deemed Non-Royalty Income, and that amount attributable to the grant of other rights or licenses in such other intellectual property, which shall be excluded from Non-Royalty Income, such apportionment to be reasonably agreed upon by the Parties.View More
