Common use of Allocation of Recovery Clause in Contracts

Allocation of Recovery. Except as otherwise agreed by the parties in writing as part of a cost-sharing arrangement, any damages, settlements or other recovery obtained as a result of any infringement action pursuant to Section 8.6.1, shall first be used to reimburse the party that brought such action for the costs and expenses incurred by it in such action, and then to reimburse the costs and expenses incurred by the other party in such action. If, after such reimbursement of litigation expenses, any funds remain from such recovery, such funds (the “Remainder”) shall belong to the party that brought such action pursuant to Section 8.6.1; provided, however, that if Licensee was the party that brought such action: (a) out of the portion of the Remainder that constitutes compensatory damages attributable to lost sales, lost profits or a reasonable royalty with respect to Licensed Products, Licensee shall pay to TSRI an amount equivalent to the royalty payments that would have been due to TSRI under this Agreement had the infringing sales that Licensee lost to the infringer been made by Licensee; (b) any portion of the Remainder that constitutes punitive, special, exemplary or other non compensatory damages, shall be treated as Sublicense Revenues, and such deemed Sublicense Revenues shall be subject to Licensee’s payment obligations specified in Section 4.1, with the applicable percentage to be determined as though Licensee had granted a sublicense on the date of receipt of such recovery; and provided, further, that in no event shall the portion of the Remainder to which TSRI is entitled pursuant to the preceding subparagraphs (a) and (b) exceed *** of the Remainder.