Common use of Payment for Development Activities Clause in Contracts

Payment for Development Activities. Subject to the terms and conditions of this Agreement, PathoGenesis shall pay to AeroGen, by wire transfer to the bank account designated by AeroGen, the Development Costs incurred by AeroGen [*]. The JDT shall develop mutually agreeable budgets and schedules which will establish the maximum amount of Development Costs (such amount is referred to herein as the "Development Cost Limit") to be expended in developing the Clinical Test Inhaler and the Inhaler to the point of completion of an application for Section 510(k) Premarket Notification Clearance ("510(k) Clearance") for the Inhaler. The Development Cost Limit is currently expected not to exceed the sum of [*] in FTE Costs owed to AeroGen (after taking into account the above discount) plus [*] in other direct costs. AeroGen shall account for and calculate the Development Costs in accordance with its internal accounting systems and GAAP (as defined in Section 8.1). AeroGen, in accordance with Section 18.15 hereof, shall allow PathoGenesis reasonable access to AeroGen's books and records in order to verify such Development Costs.