definiens: means any consideration, including up - front and mil estone payments, received by or on behalf of Company or any of its S ubsidiaries in connection with a transaction with a Third Party involving any Category 1 Target, Category 1 C ompound or Category 1 Product ( each such transactio n, a ), other than : ( a ) royalty or profit share payments received by Co mpany or any of its Subsidiaries on Net Sales, with respect to which Net Sales royalties are due t o DESRES pursuant to Section 5.2 ; ( b ) amounts received by Company for the purchase of debt or equity securities of Company, including for the issuance of securities by Company to bona fide investors solely for purposes of raising working capital for Company, at fair market value, as deter mined either 11 ( i ) if there is then an active market for such secu rities, by calculating the average of the closing prices of the securities on the applicable exchange or market over the thirty day period ending three Business Days prior to the closing of such securities purchase or ( ii ) if there is not then an active market for such securities, by Company ’s Board of Directors in good faith, and, in each case, ( i ) and ( ii ), with any amounts in exc ess of such fair market value deemed to be Non - Royalty Income ; ( c ) amounts received by Company or any of its Subsi diaries to cover its or their costs for conducting research, development or commercializati on activities for the benefit of such Third Party ( including reasonable FTE costs and reimbursement of Out - Of - Po cket expenses actually incurred, to the extent such costs would have been considered Out - Of - Pocket if they ha d not been reimbursed by such Third Party in such Burdened Transaction ), but excluding any reimbursem ent of costs incurred prior to such Burdened Transa ction ; and ( d ) amounts received by Company or any of its Subsi diaries to reimburse costs incurred by Company or any of its Subsidiaries to protect, enfo rce or defend any Patent, to the extent such costs would have been considered Out - Of - Pocket if they had not been reimbursed by such Third Party in such Burdened Transaction