3.1 Exclusive Right to License. Subject to the terms and conditions of this Agreement and Lead Institution’s compliance therewith, Other Institution(s) hereby grants to Lead Institution (a) the exclusive right and final authority to negotiate, execute, and administer License Agreements that comply with the requirements of Section 3.6, and (b) except as permitted under Section 3.4, the exclusive license to grant licenses to Other Institution(s)’ rights in the Patent Rights. Other Institution(s) will not license the Patent Rights, except as permitted under Section 3.4.
3.2 Efforts to License. Lead Institution will use reasonable efforts, consistent with its usual practices, to seek Licensee(s) for the commercial development of Patent Rights and will administer all License Agreements for the mutual benefit of the Parties and in the public interest. Lead Institution will exercise reasonable efforts to ensure that any Licensee fully complies with the terms of any License Agreement. Under no circumstances will Lead Institution be liable to Other Institution(s) for monetary damages for any alleged failure by Lead Institution to meet the obligations stated in this Section 3.2.
3.3 License Agreement. Lead Institution will provide Other Institution(s) with a substantially final draft of any License Agreement or amendment to a License Agreement prior to execution for the Other Institution(s) to review for compliance with Section 3.6 of this Agreement. Other Institution(s) agrees that if it does not provide objections or comments within 10 business days of its receipt of the substantially final draft of the License Agreement or amendment, Other Institution(s) will be deemed to have approved it. Other Institution(s) acknowledges that the Other Institution(s) may not withhold approval of a License Agreement or amendment because of its expected financial return (e.g., royalties or equity level). The Lead Institution will provide the Other Institution(s) a copy of any License Agreement or amendment that is executed.
3.7 Equity in Licensees. If the License Consideration includes equity in the Licensee, the Lead Institution will in accordance with its regular practices either (a) allocate the equity among the Parties in accordance with each Party’s Share of Net Consideration without giving effect to any Administration Fee and promptly distribute to the Other Institution(s) its share of the equity, or (b) hold such equity until it receives cash on account of such equity whether by way of dividend, sale of shares, merger or other transaction or event and then allocate and distribute such cash as License Consideration hereunder. If Exhibit A provides requirements that dictate a particular handling of equity, then that provision will take precedence over this Section 3.7. The Lead Institution will use its reasonable efforts to obtain for the Other Institution(s) information about the Licensee relevant to the equity issuance that is reasonably requested by the Other Institution(s).
3.8 No Implied License. This Agreement grants no express or implied license in any rights of either Party except for the rights explicitly granted in Patent Rights.
§4: Financial Terms
4.2 License Consideration.
(a) The Lead Institution will have the responsibility, obligation and authority to receive and collect the License Consideration payable under the License Agreement, and perform such audits under the License Agreement as the Lead Institution deems appropriate. The Lead Institution will keep the Other Institution(s) informed as to all receipts of the License Consideration in accordance with Section 5.2. The Lead Institution will keep the Other Institution(s) reasonably informed of any material delinquencies, deficiencies or defaults by the Licensee in performing the License Agreement.
(b) The Lead Institution will deduct from the License Consideration and retain for itself or reimburse the Other Institution(s) the following amounts: first, the Patent Expenses (which will be distributed to the Parties in proportion to the Patent Expenses actually paid by each Party and not yet reimbursed, including Past Patent Expenses), and second, the Administration Fee, if any. The Net Consideration will be distributed to the Other Institution(s) in accordance with the Share of Net Consideration set forth in the Transaction Terms. Each Party will be responsible for paying out of its Share of Net Consideration any obligations it owes with respect to Third-Party Interests, unless stated otherwise in the Transaction Terms. The Lead Institution may not deduct or retain for itself or reimburse the Other Institution(s) for any costs or expenses other than Patent Expenses, unless otherwise agreed in writing by the Parties.
4.3 Allocation of Proceeds. If the Lead Institution licenses the Patent Rights together with other patent or intellectual property rights controlled by Lead Institution that are not covered by this Agreement, the Parties will negotiate in good faith to determine the portion of the gross licensing proceeds received under the License Agreement that are attributable to the Patent Rights.