(COLLECTIVELY, THE "DISTRIBUTED IP"); PROVIDED, HOWEVER,
THAT (Y) TO THE EXTENT THAT ONE MEMBER HAS OBTAINED A LICENSE IN CONNECTION WITH
AN OPT-IN ELECTION OR OBTAINS A LICENSE PURSUANT TO SECTION 9.3(D) OR 9.3(E),
THE LICENSES TO THE DISTRIBUTED IP UNDER THIS SECTION 9.3(B) WILL NOT INCLUDE
THE RIGHT TO DEVELOP, MANUFACTURE OR COMMERCIALIZE THE PROGRAM/PROJECT COMPOUNDS
OR PROGRAM/PROJECT THERAPEUTICS SUBJECT TO SUCH OPT-IN ELECTION OR LICENSE
PURSUANT TO SECTION 9.3(D) OR 9.3(E); AND (Z) TO THE EXTENT THAT A MEMBER HAS
OBTAINED A LICENSE IN CONNECTION WITH SECTION 2.3 OF THE LICENSE AGREEMENT, THE
LICENSES TO THE DISTRIBUTED IP UNDER THIS SECTION 9.3(B) WILL BE SUBJECT TO SUCH
LICENSE GRANTED TO SUCH MEMBER. FOR PURPOSES OF THIS SECTION 9.3(B)(I),
"CO-EXCLUSIVE" MEANS THAT SUCH LICENSE IS EXERCISABLE BY EACH MEMBER OR ITS
DESIGNATED AFFILIATE, AND THAT THE COMPANY RETAINS NO RIGHTS TO EXERCISE ANY
SUCH LICENSED INTELLECTUAL PROPERTY.
(II)
THE RIGHTS GRANTED TO EACH MEMBER IN THIS SECTION 9.3(B) WILL BE
(1) ROYALTY-BEARING, AS SET FORTH IN SECTION 9.3(B)(III) BELOW, AND (2)
SUBLICENSEABLE SOLELY (A) TO SUCH MEMBER'S AFFILIATES OR (B) BY SUCH MEMBER OR
ITS AFFILIATES TO A THIRD PARTY PURSUANT TO A BONA FIDE COLLABORATION; PROVIDED
THAT, (X) EACH SUCH SUBLICENSE WILL BE SUBJECT AND SUBORDINATE TO, AND
CONSISTENT WITH, THE TERMS AND CONDITIONS OF THE LICENSE AGREEMENT AND THIS
AGREEMENT, AND WILL PROVIDE THAT ANY SUCH SUBLICENSEE WILL NOT FURTHER
SUBLICENSE EXCEPT ON TERMS CONSISTENT WITH THIS CLAUSE; (Y) SUCH MEMBER WILL
REMAIN RESPONSIBLE FOR THE PERFORMANCE OF ITS SUBLICENSEES, AND WILL ENSURE THAT
ALL SUCH SUBLICENSEES COMPLY WITH THE RELEVANT PROVISIONS OF THE LICENSE
AGREEMENT AND THIS AGREEMENT AND (Z) IN THE EVENT OF A MATERIAL DEFAULT BY ANY
OF ITS SUBLICENSEES UNDER A SUBLICENSE AGREEMENT, SUCH MEMBER WILL INFORM THE
COMPANY AND THE OTHER MEMBER AND WILL TAKE SUCH ACTION, AFTER CONSULTATION WITH
SUCH OTHER PARTIES, WHICH, IN SUCH MEMBER'S REASONABLE BUSINESS JUDGMENT, WILL
ADDRESS SUCH DEFAULT.
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(III)
EACH MEMBER WILL, TO THE EXTENT IT, ITS AFFILIATES AND/OR
SUBLICENSEES DEVELOP A ROYALTY-BEARING PRODUCT UNDER INTELLECTUAL PROPERTY
DISTRIBUTED FROM THE COMPANY TO THE MEMBER PURSUANT TO THIS SECTION 9.3(B) THAT
DOES NOT BECOME SUBJECT TO SECTION 9.3(D) OR 9.3(E): (X) PAY TO THE OTHER MEMBER
(OR ITS DESIGNATED AFFILIATE) A ROYALTY OF [***]% ON NET SALES OF SUCH
ROYALTY-BEARING PRODUCTS SOLD BY THE SELLING MEMBER, ITS AFFILIATES AND/OR
SUBLICENSEES, ON A ROYALTY-BEARING PRODUCT-BY-ROYALTY-BEARING PRODUCT AND A
COUNTRY-BY-COUNTRY BASIS, DURING THE ROYALTY TERM (PROVIDED, HOWEVER, THAT, FOR
THE REMAINDER OF THE RELEVANT ROYALTY TERM FOLLOWING THE END OF BOTH THE
RELEVANT EXCLUSIVITY PERIOD, THE ROYALTY RATE WILL BE [***]%), AND (Y) BE
RESPONSIBLE FOR ALL MILESTONES, ROYALTIES AND OTHER PAYMENTS PAYABLE TO THIRD
PARTIES IN RESPECT OF THE EXERCISE OF SUCH LICENSE BY SUCH SELLING MEMBER, ITS
AFFILIATES AND/OR SUBLICENSEES, INCLUDING WITHOUT LIMITATION ANY AMOUNTS PAYABLE
BY EITHER MEMBER OR THE COMPANY TO ITS THIRD PARTY LICENSORS WITH RESPECT TO THE
LICENSE AND SUBLICENSE GRANTED TO SUCH MEMBER PURSUANT TO THIS SECTION 9.3(B).