Common use of Up-Front Payment Clause in Contracts

Up-Front Payment. Connetics shall issue to Genentech upon the Original Closing Date (as defined in the Stock Agreement) shares of Connetics Common Stock (“Original Issuance Shares” as defined in the Stock Agreement) with a fair market value equal to two million dollars ($2,000,000), on the terms and conditions set forth in the Stock Agreement. If on the Notification Date or, if later, the Second Closing Date (each as defined in the Stock Agreement Amendment), the aggregate market value of the Original Issuance Shares (based on the Second Issuance Price, as defined in the Stock Agreement Amendment) is less than $4,000,000, then Connetics shall issue to Genentech on the Second Closing Date that number of additional shares of its Common Stock (the “Second Issuance Shares”) equal to the lesser of: (i) the number of shares necessary to increase the aggregate market value of the Original Issuance Shares (based on the Second Issuance Price) and the Second Issuance Shares (based on the Second Issuance Price) to $4,000,000; or (ii) the number of shares (rounded to the nearest whole number) necessary to increase the aggregate number of shares of Connetics Common Stock held by Genentech (exclusive of any shares that Genentech has purchased from parties other than Connetics) to 9.9% of Connetics’ total outstanding shares of Common Stock as of the close of business on the Notification Date or the Second Closing Date, if later. In lieu of all or any portion of the Second Issuance Shares that Connetics is obligated to issue to Genentech on the Second Closing Date, Connetics may elect to pay Genentech the cash value of such Second Issuance Shares (based on the Second Issuance Price). The Original Closing of the stock issuances shall take place as described in the Stock Agreement and the Second Closing of the stock issuances shall take place as described in the Stock Agreement Amendment. In the event that Connetics does not issue to Genentech all of the Second Issuance Shares or the cash value of the Second Issuance Shares, Genentech may, in addition to other remedies available to it by law or in equity, immediately terminate this Agreement and the licenses granted to Connetics under this Agreement. Such termination by Genentech of the Agreement and the licenses hereunder does not discharge Connetics’ obligation to issue all of the Second Issuance Shares or to pay to Genentech the cash value of the Second Issuance Shares. The up-front payment shall not be creditable against any royalty payments owed by Connetics under Sections 8.3 and 8.4 of this Agreement.

Up-Front Payment. Connetics shall issue to Genentech upon the Original Closing Date (as defined in the Stock Agreement) shares of Connetics Common Stock (“Original Issuance Shares” as defined in the Stock Agreement) with a fair market value equal to two million dollars ($2,000,000), on the terms and conditions set forth in the Stock Agreement. If If, on the Notification Date or, if later, the Second Closing Date (each as defined in the Stock Agreement AmendmentAgreement), the aggregate market value of the Original Issuance Shares (based on the Second Issuance Price, Price (as defined in the Stock Agreement AmendmentAgreement)) is less than four million dollars ($4,000,000), then Connetics shall issue to Genentech on upon the Second Closing Date that the number of additional shares of its Connetics Common Stock (the “°Second Issuance Shares”,” as defined in the Stock Agreement) equal to the lesser of: (i) the number of shares necessary to increase the aggregate market value of the Original Issuance Shares (based on the Second Issuance Price) and plus the Second Issuance Shares (based on the Second Issuance Price) to four million dollars ($4,000,000; ) or (ii) the number of shares (rounded to the nearest whole number) necessary to increase the aggregate number of the Company’s shares of Connetics Common Stock held by Genentech (exclusive of any shares that Genentech has purchased from parties other than Conneticsthe Company) to 9.9% of Connetics’ the Company’s total outstanding shares of Common Stock as of the close of business on the Notification Date or third trading day before the Second Closing Date, if lateron the terms and conditions set forth in the Stock Agreement. In lieu of all or any portion of the Second Issuance Shares that Connetics the Company is obligated to issue to Genentech on the Second Closing Date, Connetics the Company may elect to pay Genentech the cash value of such Second Issuance Shares (based on the Second Issuance Price). The Original Closing of the stock issuances shall take place as described in the Stock Agreement and the Second Closing of the stock issuances shall take place as described in the Stock Agreement Amendment. In the event that Connetics does not issue to Genentech all of the Second Issuance Shares or the cash value of the Second Issuance Shares, Genentech may, in addition to other remedies available to it by law or in equity, immediately terminate this Agreement and the licenses granted to Connetics under this Agreement. Such termination by Genentech of the Agreement and the licenses hereunder does not discharge Connetics’ obligation to issue all of the Second Issuance Shares or to pay to Genentech the cash value of the Second Issuance Shares. The up-front payment shall not be creditable against any royalty payments owed by Connetics under Sections 8.3 and 8.4 of this Agreement.pay

Up-Front Payment. Connetics shall issue to Genentech upon the Original Closing Date (as defined in the Stock Agreement) shares of Connetics Common Stock (“"Original Issuance Shares” " as defined in the Stock Agreement) with a fair market value equal to two million dollars ($2,000,000), on the terms and conditions set forth in the Stock Agreement. If If, on the Notification Date or, if later, the Second Closing Date (each as defined in the Stock Agreement AmendmentAgreement), the aggregate market value of the Original Issuance Shares (based on the Second Issuance Price, Price (as defined in the Stock Agreement AmendmentAgreement)) is less than four million dollars ($4,000,000), then Connetics shall issue to Genentech on upon the Second Closing Date that the number of additional shares of its Connetics Common Stock (the “Second ASecond Issuance Shares”," as defined in the Stock Agreement) equal to the lesser of: (i) the number of shares necessary to increase the aggregate market value of the Original Issuance Shares (based on the Second Issuance Price) and plus the Second Issuance Shares (based on the Second Issuance Price) to four million dollars ($4,000,000; ) or (ii) the number of shares (rounded to the nearest whole number) necessary to increase the aggregate number of the Company's shares of Connetics Common Stock held by Genentech [ * ] = 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. (exclusive of any shares that Genentech has purchased from parties other than Conneticsthe Company) to 9.9% of Connetics’ the Company's total outstanding shares of Common Stock as of the close of business on the Notification Date or third trading day before the Second Closing Date, if lateron the terms and conditions set forth in the Stock Agreement. In lieu of all or any portion of the Second Issuance Shares that Connetics the Company is obligated to issue to Genentech on the Second Closing Date, Connetics the Company may elect to pay Genentech the cash value of such Second Issuance Shares (based on the Second Issuance Price). The Original Closing of the stock issuances shall take place as described in the Stock Agreement and the Second Closing of the stock issuances shall take place as described in the Stock Agreement AmendmentAgreement. In the event that Connetics does not issue to Genentech all of the Second Issuance Shares or the cash value of the Second Issuance Shares, Genentech may, in addition to other remedies available to it by law or in equity, immediately terminate this Agreement and the licenses granted to Connetics under this Agreementhereunder. Such termination by Genentech of the Agreement and the licenses hereunder does not discharge Connetics’ ' obligation to issue all of the Second Issuance Shares or to pay to Genentech the cash value of the Second Issuance Shares. The up-front payment shall not be creditable against any royalty payments owed by Connetics under Sections 8.3 and 8.4 of this Agreementbelow.

Up-Front Payment. Connetics shall issue to Genentech upon the Original Closing Date (as defined in the Stock Agreement) shares of Connetics Common Stock (“"Original Issuance Shares” " as defined in the Stock Agreement) with a fair market value equal to two million dollars ($2,000,000), on the terms and conditions set forth in the Stock Agreement. If on the Notification Date or, if later, the Second Closing Date (each as defined in the Stock Agreement Amendment), the aggregate market value of the Original Issuance Shares (based on the Second Issuance Price, as defined in the Stock Agreement Amendment) is less than $4,000,000, then Connetics shall issue to Genentech on the Second Closing Date that number of additional shares of its Common Stock (the “"Second Issuance Shares”") equal to the lesser of: (i) the number of shares necessary to increase the aggregate market value of the Original Issuance Shares (based on the Second Issuance Price) and the Second Issuance Shares (based on the Second Issuance Price) to $4,000,000; or (ii) the number of shares (rounded to the nearest whole numbernumber ) necessary to increase the aggregate number of shares of Connetics Common Stock held by Genentech (exclusive of any shares that Genentech has purchased from parties other than Connetics) to 9.9% of Connetics’ ' total outstanding shares of Common Stock as of the close of business on the Notification Date or the Second Closing Date, if later. In lieu of all or any portion of the Second Issuance Shares that Connetics is obligated to issue to Genentech on the Second Closing Date, Connetics may elect to pay Genentech the cash value of such Second Issuance Shares (based on the Second Issuance Price). The Original Closing of the stock issuances shall take place as described in the Stock Agreement and the Second Closing of the stock issuances shall take place as described in the Stock Agreement Amendment. In the event that Connetics does not issue to Genentech all of the Second Issuance Shares or the cash value of the Second Issuance Shares, Genentech may, in addition to other remedies available to it by law or in equity, immediately terminate this Agreement and the licenses granted to Connetics under this Agreement. Such termination by Genentech of the Agreement and the licenses hereunder does not discharge Connetics’ ' obligation to issue all of the Second Issuance Shares or to pay to Genentech the cash case value of the Second Issuance Shares. The up-front payment shall not be creditable against any royalty payments owed by Connetics under Sections Section 8.3 and 8.4 of this Agreement.

Up-Front Payment. Connetics shall issue to Genentech upon the Original Closing Date (as defined in the Stock Agreement) shares of Connetics Common Stock (“Original Issuance Shares” as defined in the Stock Agreement) with a fair market value equal to two million dollars ($2,000,000), on the terms and conditions set forth in the Stock Agreement. If If, on the Notification Date or, if later, the Second Closing Date (each as defined in the Stock Agreement AmendmentAgreement), the aggregate market value of the Original Issuance Shares (based on the Second Issuance Price, Price (as defined in the Stock Agreement AmendmentAgreement)) is less than four million dollars ($4,000,000), then Connetics shall issue to Genentech on upon the Second Closing Date that the number of additional shares of its Connetics Common Stock (the “Second Issuance Shares”,” as defined in the Stock Agreement) equal to the lesser of: (i) the number of shares necessary to increase the aggregate market value of the Original Issuance Shares (based on the Second Issuance Price) and plus the Second Issuance Shares (based on the Second Issuance Price) to four million dollars ($4,000,000; ) or (ii) the number of shares (rounded to the nearest whole number) necessary to increase the aggregate number of the Company’s shares of Connetics Common Stock held by Genentech (exclusive of any shares that Genentech has purchased from parties other than Conneticsthe Company) to 9.9% of Connetics’ the Company’s total outstanding shares of Common Stock as of the close of business on the Notification Date or third trading day before the Second Closing Date, if lateron the terms and conditions set forth in the Stock Agreement. In lieu of all or any portion of the Second Issuance Shares that Connetics the Company is obligated to issue to Genentech on the Second Closing Date, Connetics the Company may elect to pay Genentech the cash value of such Second Issuance Shares (based on the Second Issuance Price). The Original Closing of the stock issuances shall take place as described in the Stock Agreement and the Second Closing of the stock issuances shall take place as described in the Stock Agreement AmendmentAgreement. In the event that Connetics does not issue to Genentech all of the Second Issuance Shares or the cash value of the Second Issuance Shares, Genentech may, in addition to other remedies available to it by law or in equity, immediately terminate this Agreement and the licenses granted to Connetics under this Agreementhereunder. Such termination by Genentech of the Agreement and the licenses hereunder does not discharge Connetics’ obligation to issue all of the Second Issuance Shares or to pay to Genentech the cash value of the Second Issuance Shares. The up-front payment shall not be creditable against any royalty payments owed by Connetics under Sections 8.3 and 8.4 of this Agreementbelow.

Up-Front Payment. Connetics shall issue to Genentech upon the Original Closing Date (as defined in the Stock Agreement) shares of Connetics Common Stock (“"Original Issuance Shares” " as defined in the Stock Agreement) with a fair market value equal to two million dollars ($2,000,000), on the terms and conditions set forth in the Stock Agreement. If If, on the Notification Date or, if later, the Second Closing Date (each as defined in the Stock Agreement AmendmentAgreement), the aggregate market value of the Original Issuance Shares (based on the Second Issuance Price, Price (as defined in the Stock Agreement AmendmentAgreement)) is less than four million dollars ($4,000,000), then Connetics shall issue to Genentech on upon the Second Closing Date that the number of additional shares of its Connetics Common Stock (the “?Second Issuance Shares”," as defined in the Stock Agreement) equal to the lesser of: (i) the number of shares necessary to increase the aggregate market value of the Original Issuance Shares (based on the Second Issuance Price) and plus the Second Issuance Shares (based on the Second Issuance Price) to four million dollars ($4,000,000; ) or (ii) the number of shares (rounded to the nearest whole number) necessary to increase the aggregate number of the Company's shares of Connetics Common Stock held by Genentech (exclusive of any shares that Genentech has purchased from parties other than Conneticsthe Company) to 9.9% of Connetics’ the Company's total outstanding shares of Common Stock as of the close of business on the Notification Date or third trading day before the Second Closing Date, if lateron the terms and conditions set forth in the Stock Agreement. In lieu of all or any portion of the Second Issuance Shares that Connetics the Company is obligated to issue to Genentech on the Second Closing Date, Connetics the Company may elect to pay Genentech the cash value of such Second Issuance Shares (based on the Second Issuance Price). The Original Closing of the stock issuances shall take place as described in the Stock Agreement and the Second Closing of the stock issuances shall take place as described in the Stock Agreement Amendment. In the event that Connetics does not issue to Genentech all of the Second Issuance Shares or the cash value of the Second Issuance Shares, Genentech may, in addition to other remedies available to it by law or in equity, immediately terminate this Agreement and the licenses granted to Connetics under this Agreement. Such termination by Genentech of the Agreement and the licenses hereunder does not discharge Connetics’ obligation to issue all of the Second Issuance Shares or to pay to Genentech the cash value of the Second Issuance Shares. The up-front payment shall not be creditable against any royalty payments owed by Connetics under Sections 8.3 and 8.4 of this Agreement.

Up-Front Payment. Connetics shall issue to Genentech upon the Original Closing Date (as defined in the Stock Agreement) shares of Connetics Common Stock (“"Original Issuance Shares” " as defined in the Stock Agreement) with a fair market value equal to two million dollars ($2,000,000), on the terms and conditions set forth in the Stock Agreement. If on the Notification Date or, if later, the Second Closing Date (each as defined in the Stock Agreement Amendment), the aggregate market value of the Original Issuance Shares (based on the Second Issuance Price, as defined in the Stock Agreement Amendment) is less than $4,000,000, then Connetics shall issue to Genentech on the Second Closing Date that number of additional shares of its Common Stock (the “Second Issuance Shares”"SECOND ISSUANCE SHARES") equal to the lesser of: (i) the number of shares necessary to increase the aggregate market value of the Original Issuance Shares (based on the Second Issuance Price) and the Second Issuance Shares (based on the Second Issuance Price) to $4,000,000; or (ii) the number of shares (rounded to the nearest whole number) necessary to increase the aggregate number of shares of Connetics Common Stock held by Genentech (exclusive of any shares that Genentech has purchased from parties other than Connetics) to 9.9% of Connetics’ ' total outstanding shares of Common Stock as of the close of business on the Notification Date or the Second Closing Date, if later. In lieu of all or any portion of the Second Issuance Shares that Connetics is obligated to issue to Genentech on the Second Closing Date, Connetics may elect to pay Genentech the cash value of such Second Issuance Shares (based on the Second Issuance Price). The Original Closing of the stock issuances shall take place as described in the Stock Agreement and the Second Closing of the stock issuances shall take place as described in the Stock Agreement Amendment. In the event that Connetics does not issue to Genentech all of the Second Issuance Shares or the cash value of the Second Issuance Shares, Genentech may, in addition to other remedies available to it by law or in equity, immediately terminate this Agreement and the licenses granted to Connetics under this Agreement. Such termination by Genentech of the Agreement and the licenses hereunder does not discharge Connetics’ ' obligation to issue all of the Second Issuance Shares or to pay to Genentech the cash value of the Second Issuance Shares. The up-front payment shall not be creditable against any royalty payments owed by Connetics under Sections 8.3 and 8.4 of this Agreement.