Common use of Milestone Payment Clause in Contracts

Milestone Payment. InterMune shall pay to Connetics a milestone payment of one million five hundred thousand dollars ($1,500,000), as follows (the "Milestone Payment"), payable in a lump sum or in installments based on the level of InterMune Net Sales as follows: (a) If annualized InterMune Net Sales in the United States for 2001, based on InterMune Net Sales in the United States for the third and fourth calendar quarters of 2001, ("2001 Net Sales") are equal to or greater than [ * ], then on March 31, 2002, InterMune shall, at its election, either (i) pay the full Milestone Payment to Connetics, or (ii) pay to Connetics [ * ] of the Milestone Payment and furnish to Connetics a promissory note for the balance of the Milestone Payment, which promissory note shall provide for three (3) principal payments to Connetics of [ * ] each due upon June 30, 2002, September 30, 2002 and December 31, 2002, respectively. (b) If 2001 Net Sales are equal to or greater than [ * ] but less than [ * ], then on March 31, 2002, InterMune shall pay to Connetics [ * ] of the Milestone Payment, and furnish to Connetics a promissory note for the balance of the Milestone Payment (the "Remaining Payment"), which promissory note shall provide for full payment of the balance of such note to Connetics on the earlier to occur of (i) March 31, 2004, or (ii) the last day of the month following the consecutive twelve (12) month period that InterMune Net Sales in the United States are equal to or greater than [ * ], subject to subsection (d) below. (c) If 2001 Net Sales are less than [ * ], then on March 31, 2002, InterMune shall pay to Connetics a portion of the Milestone Payment equal to [ * ] multiplied by a fraction, the numerator of which is 2001 Net Sales and the denominator of which is [ * ]. InterMune shall furnish to Connetics a promissory note for the balance of the Milestone Payment (the "Remaining Payment"), which promissory note shall provide for full payment of the balance of such note to Connetics on the earlier to occur of (i) March 31, 2004, or (ii) the last day of the month following the consecutive twelve (12) month period that InterMune Net Sales in the United States are equal to or greater than [ * ], subject to subsection (d) below. (d) With respect to the promissory note for the Remaining Payment described in subsection (b) or (c) above, if InterMune is to pay the balance of such note on March 31, 2004, and [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

Milestone Payment. InterMune shall pay to Connetics a milestone payment of one million five hundred thousand dollars ($1,500,000), as follows (the "“Milestone Payment"”), payable in a lump sum or in installments based on the level of InterMune Net Sales Sales, as follows: (a) If annualized InterMune Net Sales in the United States for 2001, based on InterMune Net Sales in the United States for the third and fourth calendar quarters of 2001, ("“2001 Net Sales"”) are equal to or greater than [ * ]twenty million dollars ($20,000,000), then on March 31, 2002, InterMune shall, at its election, either (i) pay the full Milestone Payment to Connetics, or (ii) pay to Connetics [ * ] three hundred seventy five thousand dollars ($375,000) of the Milestone Payment and furnish to Connetics a promissory note for the balance of the Milestone Payment, which promissory note shall provide for three (3) principal payments to Connetics of [ * ] three hundred seventy five thousand dollars ($375,000) each due upon June 30, 2002, September 30, 2002 and December 31, 2002, respectively. (b) If 2001 Net Sales are equal to or greater than [ * ] fifteen million dollars ($15,000,000) but less than [ * ]twenty million dollars ($20,000,000), then on March 31, 2002, InterMune shall pay to Connetics [ * ] three hundred thousand dollars ($300,000) of the Milestone Payment, and furnish to Connetics a promissory note for the balance of the Milestone Payment (the "“Remaining Payment"”), which promissory note shall provide for full payment of the balance of such note to Connetics on the earlier to occur of (i) March 31, 2004, or (ii) the last day of the month following the consecutive twelve (12) month period that InterMune Net Sales in the United States are equal to or greater than [ * ]twenty million dollars ($20,000,000), subject to subsection (d) below. (c) If 2001 Net Sales are less than [ * ]fifteen million dollars ($15,000,000), then on March 31, 2002, InterMune shall pay to Connetics a portion of the Milestone Payment equal to [ * ] three hundred thousand dollars ($300,000) multiplied by a fraction, the numerator of which is 2001 Net Sales and the denominator of which is [ * ]twenty million dollars ($20,000,000). InterMune shall furnish to Connetics a promissory note for the balance of the Milestone Payment (the "“Remaining Payment"”), which promissory note shall provide for full payment of the balance of such note to Connetics on the earlier to occur of (i) March 31, 2004, or (ii) the last day of the month following the consecutive twelve (12) month period that InterMune Net Sales in the United States are equal to or greater than [ * ]twenty million dollars ($20,000,000), subject to subsection (d) below. (d) With respect to the promissory note for the Remaining Payment described in subsection (b) or (c) above, if InterMune is to pay the balance of such note on March 31, 2004, and [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENTInterMune Net Sales in the United States for the twelve (12) month period preceding March 31, MARKED BY BRACKETS2004 are equal to or greater than ten million dollars ($10,000,000) but less than twenty million dollars ($20,000,000), HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933then: (i) InterMune may, AS AMENDEDat its election, pay fifty percent (50%) of the Remaining Payment either in cash or in Preferred Shares of InterMune stock at the fair market value of such shares, determined as the average closing price of such shares over the previous thirty (30) day period; and (ii) With respect to the other fifty percent (50%) of the Remaining Payment, Connetics may, at its election, receive such fifty percent either in cash or in Preferred Shares of InterMune stock at the fair market value of such shares, determined as the average closing price of such shares over the previous thirty (30) day period, provided that Connetics shall notify InterMune of its election in writing at least thirty (30) days prior to the date that such payment is due. (e) With respect to the Remaining Payment described in subsection (b) or (c) above, if InterMune is to pay the balance of such note on March 31, 2004, and InterMune Net Sales in the United States for the twelve (12) month period preceding March 31, 2004 are less than ten million dollars ($10,000,000), then InterMune may, at its election, either: (1) Pay such Remaining Payment in cash or in Preferred Shares of InterMune stock at the fair market value of such shares, determined as the average closing price of such shares over the previous thirty (30) day period; or (2) Grant to Connetics the license to the Accounting and Revenue Rights to CGD Units (as defined below), on commercially reasonable terms to be agreed upon by the Parties, in which event InterMune shall thereafter have no further obligation to Connetics with respect to such Remaining Payment. Such license shall be fully paid-up solely with respect to InterMune but not with respect to Genentech or any other Third Party, and shall expire upon the date of expiration of the last to expire Genentech Patent covering the manufacture, use or sale of Licensed Products for the treatment of CGD in the United States and its territories and possessions. As used herein, “Accounting and Revenue Rights to CGD Units” means the right to book net revenues, expenses and net profits for the sales of Licensed Products for the treatment of chronic granulomatous disease by InterMune and its sublicensees in the United States. (f) All promissory notes referred to in this Section 5.2 shall bear interest at the rate of the prime rate plus two percentage points (2%).

Milestone Payment. InterMune shall pay to Connetics a milestone payment of one million five hundred thousand dollars ($1,500,000), as follows (the "Milestone Payment"), payable in a lump sum or in installments based on the level of InterMune Net Sales as follows:: [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED. (a) If annualized InterMune Net Sales in the United States for 2001, based on InterMune Net Sales in the United States for the third and fourth calendar quarters of 2001, ("2001 Net Sales") are equal to or greater than [ * ], then on March 31, 2002, InterMune shall, at its election, either (i) pay the full Milestone Payment to Connetics, or (ii) pay to Connetics [ * ] of the Milestone Payment and furnish to Connetics a promissory note for the balance of the Milestone Payment, which promissory note shall provide for three (3) principal payments to Connetics of [ * ] each due upon June 30, 2002, September 30, 2002 and December 31, 2002, respectively. (b) If 2001 Net Sales are equal to or greater than [ * ] but less than [ * ], then on March 31, 2002, InterMune shall pay to Connetics [ * ] of the Milestone Payment, and furnish to Connetics a promissory note for the balance of the Milestone Payment (the "Remaining Payment"), which promissory note shall provide for full payment of the balance of such note to Connetics on the earlier to occur of (i) March 31, 2004, or (ii) the last day of the month following the consecutive twelve (12) month period that InterMune Net Sales in the United States are equal to or greater than [ * ], subject to subsection (d) below. (c) If 2001 Net Sales are less than [ * ], then on March 31, 2002, InterMune shall pay to Connetics a portion of the Milestone Payment equal to [ * ] multiplied by a fraction, the numerator of which is 2001 Net Sales and the denominator of which is [ * ]. InterMune shall furnish to Connetics a promissory note for the balance of the Milestone Payment (the "Remaining Payment"), which promissory note shall provide for full payment of the balance of such note to Connetics on the earlier to occur of (i) March 31, 2004, or (ii) the last day of the month following the consecutive twelve (12) month period that InterMune Net Sales in the United States are equal to or greater than [ * ], subject to subsection (d) below. (d) With respect to the promissory note for the Remaining Payment described in subsection (b) or (c) above, if InterMune is to pay the balance of such note on March 31, 2004, and InterMune Net Sales in the United States for the twelve (12) month period preceding March 31, 2004 are equal to or greater than [ * ] but less than [ * ], then: (i) InterMune may, at its election, pay [ * ] of the Remaining Payment either in cash or in Preferred Shares of InterMune stock at the fair market value of such shares, determined as the average closing price of such shares over the previous thirty (30) day period; and (ii) With respect to the other [ * ] of the Remaining Payment, Connetics may, at its election, receive such fifty percent either in cash or in Preferred Shares of InterMune stock at the fair market value of such shares, determined as the average closing price of such shares over the previous thirty (30) day period, provided that Connetics shall notify InterMune of its election in writing at least thirty (30) days prior to the date that such payment is due; and (e) With respect to the Remaining Payment described in subsection (b) or (c) above, if InterMune is to pay the balance of such note on March 31, 2004, and InterMune Net Sales in the United States for the twelve (12) month period preceding March 31, 2004 are less than [ * ], then InterMune may, at its election, either: [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED. (1) Pay such Remaining Payment in cash or in Preferred Shares of InterMune stock at the fair market value of such shares, determined as the average closing price of such shares over the previous thirty (30) day period; or (2) Grant to Connetics the license to the Accounting and Revenue Rights to CGD Units (as defined below), on commercially reasonable terms to be agreed upon by the Parties, in which event InterMune shall thereafter have no further obligation to Connetics with respect to such Remaining Payment. Such license shall be [ * ] with respect to InterMune but not with respect to Genentech or any other Third Party, and shall expire upon the date of expiration of the last to expire Genentech Patent covering the manufacture, use or sale of Licensed Products for the treatment of CGD in the United States and its territories and possessions. As used herein, "Accounting and Revenue Rights to CGD Units" means the right to book net revenues, expenses and net profits for the sales of Licensed Product for the treatment of chronic granulomatous disease by InterMune and its sublicensees in the United States. (f) All promissory notes referred to in this Section 5.2 shall bear interest at the rate of the prime rate plus [ * ].