Common use of Milestone Payment Clause in Contracts

Milestone Payment. (a) Subject to the terms and conditions of this Agreement and in further consideration of the sale, conveyance, delivery, transfer and assignment of the Purchased Assets to Buyer and Seller’s other convents and obligations hereunder, Buyer shall make a one-time, non-refundable, non-creditable milestone payment of $20,000,000 to Seller upon the filing and acceptance of an NDA for, or other equivalent application to sell, a Product in the United States (the “Milestone Payment”). (b) Buyer shall notify Seller in writing within 10 Business Days after the achievement of the milestone described in Section 2.5(a) above by Buyer or any of its Affiliates, and Buyer shall pay Seller the Milestone Payment on the date the first milestone payment described under “Milestone Event” in Section 7.02(a) of the License Agreement is due, and in any event not later than 60 days after such notification to Seller. Payment of the Milestone Payment to Seller shall be made by wire transfer of immediately available funds to the account set forth on Schedule 2.1(b)(i) or otherwise specified in writing by Seller. (c) Notwithstanding anything to the contrary set forth in this Section 2.5, it is the intention of the Parties that the Exploitation of the Compound shall be exercised by Buyer and its Affiliates in accordance with their own business judgment and in their sole and absolute discretion. Accordingly, the following shall apply (and Seller hereby acknowledges, understands and agrees as follows): (i) Buyer and its Affiliates shall have complete control and sole discretion with respect to decisions concerning the Exploitation of the Compound and such control and discretion by Buyer and its Affiliates could result in Seller receiving no Milestone Payment whatsoever; (ii) neither Buyer nor any of its Affiliates has any duty to Exploit the Compound, to exert any level of efforts in Exploiting the Compound or to achieve the milestone described in Section 2.5(a) above; (iii) whether or not Buyer or any of its Affiliates Exploit the Compound, neither Buyer nor any of its Affiliates is prohibited from Exploiting any other compounds or products that may compete with the Compound, or prioritizing other compounds or products over the Compound; (iv) personnel of Buyer and its Affiliates are only required to take actions in connection with the Exploitation of the Compound that such personnel believe to be in the best interests of Buyer and its Affiliates and they are not required to take into account the interests of Seller at all; and (v) Seller shall not challenge in any subsequent Action any decision regarding the Exploitation of the Compound made by any director, officer, employee or agent of Buyer or any of its Affiliates in what such individual subjectively believes to be the best interests of Buyer (or such Affiliate), unless such Action constitutes a breach by Buyer of any of its express obligations to make the Milestone Payment under this Section 2.5. For the avoidance of doubt, any obligations assumed by Buyer relating to or arising out of the License Agreement shall have no effect on the foregoing provisions of this Section 2.5, and nothing herein, expressed or implied, shall give or be construed to give the Seller or any of its Affiliates any rights as a third party beneficiary of the License Agreement after the Closing.

Milestone Payment. (a) 2.5.1. Subject to the terms and conditions of this Agreement and in further consideration of the saleSection 2.5.2, conveyance, delivery, transfer and assignment of the Purchased Assets to Buyer and Seller’s other convents and obligations hereunder, Buyer shall make a one-time, non-refundable, non-creditable milestone payment of $20,000,000 to Seller upon the filing and acceptance of an NDA for, or other equivalent application to sell, a Product in the United States (the “Milestone Payment”). (b) Buyer shall notify Seller in writing within 10 [**] Business Days after the achievement occurrence of the milestone described in Section 2.5(a) above by Buyer or any First Commercial Sale of its Affiliatesthe Product (the “First Commercial Sale Date”), and Buyer shall pay Seller the Milestone Payment on the date the first milestone payment described under “Milestone Event” in Section 7.02(a) of the License Agreement is due, and in any event not later than 60 days after such notification to Seller. Payment of the Milestone Payment to Seller shall be made (by wire transfer of immediately available federal funds to the account set forth furnished by the Seller), without demand or offset, the Milestone Payment; provided, however, that the Buyer may, in its sole discretion, elect to defer payment of all or portion of the Milestone Payment for period of up to five years from the First Commercial Sale Date upon written notice thereof to the Seller and the execution and delivery to the Seller, within such [**] Business Day period, of promissory note in favor of the Seller in the form attached hereto as Exhibit 2.5.1 in the principal amount of the Milestone Payment being so deferred (the “Promissory Note”). 2.5.2. The Buyer shall have the option, in the Buyer’s sole discretion, exercisable at any time by the Buyer commencing on Schedule 2.1(b)(ithe Closing Date and expiring on the earlier of (i) or otherwise specified [**] days prior to the date on which [**] for the Product, and (ii) [**] months following the [**] for the Product (the “Buyout Period”) to make one-time payment to the Seller in the amount of $20,000,000 in cash in lieu of, and in full satisfaction of, its obligation to pay the Milestone Payment (the “Milestone Buyout”). In any case, Buyer shall, promptly after becoming aware thereof, notify Seller in writing by Seller. of the date that the events described in clauses (ci) Notwithstanding anything to the contrary set forth in and (ii) of this Section 2.5, it is the intention 2.5.2 occur. Upon exercise of the Parties that Milestone Buyout, in the Exploitation of the Compound shall be exercised by Buyer and its Affiliates Buyer’s sole election in accordance with their own business judgment the provisions of this Section 2.5.2, and payment in their sole and absolute discretion. Accordinglyfull in cash of the Milestone Buyout to the Seller, the following shall apply (and Seller hereby acknowledges, understands and agrees as follows): (i) Buyer and its Affiliates shall have complete control and sole discretion with respect to decisions concerning the Exploitation of the Compound and such control and discretion by Buyer and its Affiliates could result in Seller receiving no Milestone Payment whatsoever; (ii) neither Buyer nor any of its Affiliates has any duty to Exploit the Compound, to exert any level of efforts in Exploiting the Compound or to achieve the milestone described in Section 2.5(a) above; (iii) whether or not Buyer or any of its Affiliates Exploit the Compound, neither Buyer nor any of its Affiliates is prohibited from Exploiting any other compounds or products that may compete with the Compound, or prioritizing other compounds or products over the Compound; (iv) personnel of Buyer and its Affiliates are only required to take actions in connection with the Exploitation of the Compound that such personnel believe to be in the best interests of Buyer and its Affiliates and they are not required to take into account the interests of Seller at all; and (v) Seller shall not challenge in any subsequent Action any decision regarding the Exploitation of the Compound made by any director, officer, employee or agent of Buyer or any of its Affiliates in what such individual subjectively believes to be the best interests of Buyer (or such Affiliate), unless such Action constitutes a breach by Buyer of any of its express Buyer’s obligations to make the Milestone Payment under this Section 2.52.5.1 shall automatically terminate and shall no longer be deemed due or payable by the Buyer. 2.5.3. For Subject to Section 12.2, if, after the avoidance of doubtClosing, and if any obligations assumed by Buyer relating to or arising out portion of the License Agreement shall have no effect on the foregoing provisions of this Section 2.5Purchase Price remains unpaid, and nothing herein, expressed or implied, shall give or be construed to give the Seller Buyer or any of its Affiliates permitted successors or assigns (a) effects Change of Control, or (b) sells, exclusively licenses, or otherwise transfers, or causes the Company to sell, exclusively license or otherwise transfer, all or substantially all of its or the Company’s rights, title and interest in and to the Product (a “Product Transfer”), such transaction shall be made only with Qualified Successor, except that such transaction may be made with Person that is not Qualified Successor with the Seller’s prior written consent; provided, however, that if the Buyer or any rights as a third party beneficiary of its permitted successors or assigns requests and receives such consent from the Seller, the per annum interest rate on the Promissory Note shall automatically increase to fourteen percent (14%). If permitted Change of Control or other permitted Product Transfer occurs pursuant to the foregoing sentence, the permitted acquirer or successor shall unconditionally assume all of the License Agreement after Buyer’s obligations under this Agreement, including the Closing.obligations set forth in Section 2.5, Section 6.8, and Section 6.9. As used in this Section, a “Qualified Successor” means Person having:

Milestone Payment. (a) 2.5.1. Subject to the terms and conditions of this Agreement and in further consideration of the saleSection 2.5.2, conveyance, delivery, transfer and assignment of the Purchased Assets to Buyer and Seller’s other convents and obligations hereunder, Buyer shall make a one-time, non-refundable, non-creditable milestone payment of $20,000,000 to Seller upon the filing and acceptance of an NDA for, or other equivalent application to sell, a Product in the United States (the “Milestone Payment”). (b) Buyer shall notify Seller in writing within 10 [**] Business Days after the achievement occurrence of the milestone described in Section 2.5(a) above by Buyer or any First Commercial Sale of its Affiliatesthe Product (the “First Commercial Sale Date”), and Buyer shall pay Seller the Milestone Payment on the date the first milestone payment described under “Milestone Event” in Section 7.02(a) of the License Agreement is due, and in any event not later than 60 days after such notification to Seller. Payment of the Milestone Payment to Seller shall be made (by wire transfer of immediately available federal funds to the account set forth furnished by the Seller), without demand or offset, the Milestone Payment; provided, however, that the Buyer may, in its sole discretion, elect to defer payment of all or portion of the Milestone Payment for period of up to five years from the First Commercial Sale Date upon written notice thereof to the Seller and the execution and delivery to the Seller, within such [**] Business Day period, of promissory note in favor of the Seller in the form attached hereto as Exhibit 2.5.1 in the principal amount of the Milestone Payment being so deferred (the “Promissory Note”). 2.5.2. The Buyer shall have the option, in the Buyer’s sole discretion, exercisable at any time by the Buyer commencing on Schedule 2.1(b)(ithe Closing Date and expiring on the earlier of (i) or otherwise specified [**] days prior to the date on which [**] for the Product, and (ii) [**] months following the [**] for the Product (the “Buyout Period”) to make one-time payment to the Seller in the amount of $20,000,000 in cash in lieu of, and in full satisfaction of, its obligation to pay the Milestone Payment (the “Milestone Buyout”). In any case, Buyer shall, promptly after becoming aware thereof, notify Seller in writing by Seller. of the date that the events described in clauses (ci) Notwithstanding anything to the contrary set forth in and (ii) of this Section 2.5, it is the intention 2.5.2 occur. Upon exercise of the Parties that Milestone Buyout, in the Exploitation of the Compound shall be exercised by Buyer and its Affiliates Buyer’s sole election in accordance with their own business judgment the provisions of this Section 2.5.2, and payment in their sole and absolute discretion. Accordinglyfull in cash of the Milestone Buyout to the Seller, the following shall apply (and Seller hereby acknowledges, understands and agrees as follows): (i) Buyer and its Affiliates shall have complete control and sole discretion with respect to decisions concerning the Exploitation of the Compound and such control and discretion by Buyer and its Affiliates could result in Seller receiving no Milestone Payment whatsoever; (ii) neither Buyer nor any of its Affiliates has any duty to Exploit the Compound, to exert any level of efforts in Exploiting the Compound or to achieve the milestone described in Section 2.5(a) above; (iii) whether or not Buyer or any of its Affiliates Exploit the Compound, neither Buyer nor any of its Affiliates is prohibited from Exploiting any other compounds or products that may compete with the Compound, or prioritizing other compounds or products over the Compound; (iv) personnel of Buyer and its Affiliates are only required to take actions in connection with the Exploitation of the Compound that such personnel believe to be in the best interests of Buyer and its Affiliates and they are not required to take into account the interests of Seller at all; and (v) Seller shall not challenge in any subsequent Action any decision regarding the Exploitation of the Compound made by any director, officer, employee or agent of Buyer or any of its Affiliates in what such individual subjectively believes to be the best interests of Buyer (or such Affiliate), unless such Action constitutes a breach by Buyer of any of its express Buyer’s obligations to make the Milestone Payment under this Section 2.52.5.1 shall automatically terminate and shall no longer be deemed due or payable by the Buyer. 2.5.3. For Subject to Section 12.2, if, after the avoidance of doubtClosing, and if any obligations assumed by Buyer relating to or arising out portion of the License Agreement shall have no effect on the foregoing provisions of this Section 2.5Purchase Price remains unpaid, and nothing herein, expressed or implied, shall give or be construed to give the Seller Buyer or any of its Affiliates permitted successors or assigns (a) effects Change of Control, or (b) sells, exclusively licenses, or otherwise transfers, or causes the Company to sell, exclusively license or otherwise transfer, all or substantially all of its or the Company’s rights, title and interest in and to the Product (a “Product Transfer”), such transaction shall be made only with Qualified Successor, except that such transaction may be made with Person that is not Qualified Successor with the Seller’s prior written consent; provided, however, that if the Buyer or any rights as a third party beneficiary of its permitted successors or assigns requests and receives such consent from the Seller, the per annum interest rate on the Promissory Note shall automatically increase to fourteen percent (14%). If permitted Change of Control or other permitted Product Transfer occurs pursuant to the foregoing sentence, the permitted acquirer or successor shall unconditionally assume all of the License Agreement after Buyer’s obligations under this Agreement, including the Closingobligations set forth in Section 2.5, Section 6.8, and Section 6.9. As used in this Section, a “Qualified Successor” means Person having: (a) market capitalization in excess of $[**] (or in the case of privately held company, valuation of its total outstanding equity securities based on its most recently completed arms-length equity financing or an independent valuation of its equity pursuant to Rule 409A under the Internal Revenue Code, in excess of $[**]; and (b) a tangible net worth in excess of $[**]; and (c) a debt to equity ratio of no more than [**].