During the Extended Term Clause Samples

During the Extended Term. For any Subterritory for which BioMedicines elects to maintain exclusive commercialization rights after the Basic Term, Product Payments will continue to be determined in the same manner as during the Basic Term. For any Subterritory for which BioMedicines elects to convert to nonexclusive commercialization rights after the Basic Term, Product Payments will be reduced by [ * ] of the rates for the Basic Term. For example, assuming worldwide Net Sales in Year X were less than [ * ], the payment rate would be [ * ] of Net Sales in Year X + 1 for any Subterritory as to which BioMedicines elects nonexclusive rights. Minimum Payments: On a Subterritory by Subterritory basis, BioMedicines will make quarterly Minimum Payments to ALZA equal to [ * ] of projected quarterly Net Sales of Product in each of Subterritories A, B, and C (such projected Net Sales to be based on reasonably anticipated timing of regulatory approvals and sales projections). Such quarterly Minimum Payments will be established no later than the date of submission of the first application for regulatory approval to market the Product, and will be fully creditable against quarterly Product Payments due for the quarter in which the Minimum Payments are made. No minimum payments will be due for Subterritory D. Manufacture and Supply: ALZA will manufacture BioMedicines’ requirements of the Product. The parties will begin to negotiate in good faith fixed supply prices (which may include annual price increases in accordance with the U.S. Producers’ Price Index) promptly after the manufacture and acceptance by BioMedicines of three batches of the Product which meet the then-current guidelines of the International Committee on Harmonization (“ICH”), or successor organization, or regulatory requirements of the U.S. Food and Drug Administration, whichever are more stringent. Until the parties agree upon a supply price, the supply price will be [ * ] of ALZA’s standard manufacturing cost. BioMedicines will supply Drug to ALZA at [ * ].