Common use of Net Sales by Sublicensees Clause in Contracts

Net Sales by Sublicensees. Any and all AZ Net Sales by Sublicensees shall shall be excluded from the royalty calculations in Sections 6.6.1(a)(1) and 6.6.1(a)(2) (including, for purposes of clarity, the royalty threshold and ceiling calculations). With respect to AZ Net Sales of Product (other than Other Licensed Product) by Sublicensees to Third Parties on which royalties or milestone payments that are based solely on achieving certain sales thresholds for a Product (such milestone payments, “Sales-Based Milestones”), are paid to AstraZeneca, royalties to Targacept hereunder with respect to such AZ Net Sales, for any Calendar Year, shall, subject to Sections 6.6.1(d), 10.2.4 and 10.2.6, be equal to [********] royalties and Sales-Based Milestones paid to AstraZeneca or its Affiliates by such Sublicensees with respect to such AZ Net Sales during such Calendar Year; provided, however, that no such royalties shall be due under this Section 6.6.1(c) with respect to any AZ Net Sales on which royalties would not be owed by AstraZeneca under Section 6.6.1(a)(1) or 6.6.1(a)(2) were such sales made by AstraZeneca (e.g., after the end of the royalty term set forth in Section 6.6.1(b)). For the avoidance of doubt, no royalty payments shall be due under this Section 6.6.1 with respect to (a) any upfront license fees or milestone payments (other than Sales-Based Milestones) made to AstraZeneca or its Affiliates (which are addressed in Section 6.5.3), or (b) any payments made to AstraZeneca or its Affiliates: (i) under a credit facility; (ii) in consideration of (A) any issuance of equity or debt securities by AstraZeneca or its Affiliates, (B) any supply of Product (including Other Licensed Product) by or on behalf of AstraZeneca or its Affiliates, or (C) any research, development or other activities relating to such Product (including Other Licensed Product) that AstraZeneca or its Affiliates may perform on behalf of a Sublicensee, provided that such payments do not exceed the fair market value of such securities, supply or activities, as applicable; (iii) in consideration of any grant of rights or licenses (including royalties) other than a sublicense under the licenses granted under Section 8.1 (such consideration to be allocated based on the fair market value only of the rights sublicensed under Section 8.1 (in accordance with Section 8.3.1) to such Sublicensee and the fair market value only of the other rights of AstraZeneca licensed to such Sublicensee); (iv) as reimbursement of actual patent prosecution and maintenance costs and expenses; or (v) in connection with awards or judgments in patent or other intellectual property right enforcement, which shall be allocated between the Parties in accordance with Section 10.2.1(e).

Net Sales by Sublicensees. Any and all AZ Net Sales by Sublicensees shall shall be excluded from the royalty calculations in Sections 6.6.1(a)(1) and 6.6.1(a)(2) (including, for purposes of clarity, the royalty threshold and ceiling calculations)[********]. With respect to AZ Net Sales of Product (other than Other Licensed Product) by Sublicensees to Third Parties on which royalties or milestone payments that are based solely on achieving certain sales thresholds for a Product (such milestone payments, “Sales-Based Milestones”), are paid to AstraZeneca, royalties to Targacept hereunder with respect to such AZ Net Sales[********], for any Calendar Year, shall, subject to Sections 6.6.1(d), 10.2.4 and 10.2.6, be equal to [********] royalties and Sales-Based Milestones paid to AstraZeneca or its Affiliates by such Sublicensees with respect to such AZ Net Sales during such Calendar Year; provided, however, that no such royalties shall be due under this Section 6.6.1(c) with respect to any AZ Net Sales on which royalties would not be owed by AstraZeneca under Section 6.6.1(a)(1) or 6.6.1(a)(2) were such sales made by AstraZeneca (e.g., after the end of the royalty term set forth in Section 6.6.1(b))[********]. For the avoidance of doubt, no royalty payments shall be due under this Section 6.6.1 with respect to (a) any upfront license fees or milestone payments (other than Sales-Based Milestones) made to AstraZeneca or its Affiliates (which are addressed in Section 6.5.3), or (b) any payments made to AstraZeneca or its Affiliates: (i) under a credit facility[********]; (ii) in consideration of (A) any issuance of equity or debt securities [********] by AstraZeneca or its Affiliates, (B) any supply of Product (including Other Licensed Product) [********] by or on behalf of AstraZeneca or its Affiliates, or (C) any research, development or other activities relating to such Product (including Other Licensed Product) that [********] AstraZeneca or its Affiliates may perform on behalf of a Sublicensee[********], provided that such payments do not exceed the fair market value of such securities, supply or activities, as applicable[********]; (iii) in consideration of any grant of rights or licenses (including royalties) other than a sublicense under the licenses granted under Section 8.1 (such consideration to be allocated based on the fair market value only of the rights sublicensed under Section 8.1 (in accordance with Section 8.3.1) to such Sublicensee and the fair market value only of the other rights of AstraZeneca licensed to such Sublicensee)[********]; (iv) as reimbursement of actual patent prosecution and maintenance costs and expenses[********]; or (v) in connection with awards or judgments in patent or other intellectual property right enforcement, which shall be allocated between the Parties in accordance with Section 10.2.1(e).