Common use of Payments and Royalties Clause in Contracts

Payments and Royalties. 3.01. In consideration for the license under PATENTS and KNOW-HOW granted to SB in this AGREEMENT and subject to the provisions of this Agreement including but not limited to Paragraph 3.11, SB shall make the following milestone payments to ADOLOR, in the specified incremental amounts, within thirty (30) days after the occurrence of the following milestones: (a) EFFECTIVE DATE $ 500,000 (b) The first to occur of First Rx INDICATION or Direct OTC INDICATION (1) $ ** (2) ** $ ** (3) ** $ ** (4) ** $ ** (5) ** $ ** (6) ** $ ** (7) ** $ ** (8) ** $ ** (c) Second Rx INDICATION (1) $ ** (2) ** $ ** (3) ** $ ** (4) ** $ ** (5) ** $ ** (d) Each of Third and Fourth Rx INDICATIONs (1) $ ** (2) ** $ ** (3) ** $ ** (4) ** $ ** (5) ** $ ** (e) Each of Fifth and Sixth Rx INDICATIONs (1) $ ** (2) ** $ ** (3) ** $ ** (4) ** $ ** (5) ** $ ** (f) $ ** (g) $ ** (h) $ ** provided that: **=Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions. (1) each such payment shall be made only one time based on the first time a milestone is achieved, regardless of how many times such milestone is achieved (except as otherwise provided by Paragraphs 3.01(f), and no payment shall be owed for a milestone which is not reached. For Paragraph 3.01(h), SB shall not be required to make more than ** (**) such payments totaling $ **; (2) each such payment shall be non-refundable; (3) the term "**" shall mean the earlier to occur of (i) SB's determination after the last patient has completed his/her last visit ** that such study was successful, or (ii) SB's decision to continue development of the PRODUCT **; (4) the term "**" shall mean, with respect to the relevant INDICATION which is the subject of the study, the earlier to occur of (i) the date on which SB determines that ** was successful, or (ii) SB's decision to **. (5) the term "**" shall mean with respect to the relevant INDICATION which is the subject of the study the earlier to occur of (i) the date on which SB determines that ** was successful, or (ii) SB's decision to **. (6) the term "**" as used in this Paragraph shall mean the **. (7) the term "**" as used in this Paragraph shall mean the ** required for the filing of a New Drug Application (hereinafter "NDA") with the U.S. Food and Drug Administration (hereinafter "FDA") or the corresponding regulatory agency in other countries for PRODUCT for the relevant INDICATION which is the subject of the study as defined in 21 CFR (S)312.21(c); (8) the term "NDA Acceptance" shall mean, with respect to each INDICATION, the earlier of (i) written notice of acceptance from the FDA of the NDA filed by or on behalf of SB under this AGREEMENT necessary for commercialization of PRODUCT for the relevant, whichever is appropriate, or (ii) sixty (60) days **=Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions. following filing of such NDA with the FDA, assuming that SB has not received a "Notice of Refusal to File" from the FDA with respect to such NDA.

Payments and Royalties. 3.01. 3.01 In consideration for the license under PATENTS and KNOW-HOW granted to SB in this AGREEMENT and subject to the provisions of this Agreement including but not limited to Paragraph 3.11AGREEMENT, SB shall make the following milestone payments to ADOLORIMMUNOGEN, up to a maximum of forty-one million five hundred thousand U.S. dollars (U.S. $ 41,500,000) in the specified incremental amounts, within thirty (30) days after the first occurrence of each of the following milestones: (a, subject to any credit which may be due SB under Paragraphs 4.02(a) EFFECTIVE DATE $ 500,000 (b) The first and 4.02(c), and subject to occur any reduction in the relevant payment amount, or elimination of First Rx INDICATION or Direct OTC INDICATION (1) $ ** (2) ** $ ** SB's obligation to make any such payment, as outlined in Paragraphs 3.01(2), (3) ** $ ** (4) ** $ ** (5) ** $ ** (6) ** $ ** ), (7) ), (9), and (12): [** $ ** (8) ** $ ** (c) Second Rx INDICATION (1) $ ** (2) ** $ ** (3) ** $ ** (4) ** $ ** (5) ** $ ** (d) Each of Third and Fourth Rx INDICATIONs (1) $ ** (2) ** $ ** (3) ** $ ** (4) ** $ ** (5) ** $ ** (e) Each of Fifth and Sixth Rx INDICATIONs (1) $ ** (2) ** $ ** (3) ** $ ** (4) ** $ ** (5) ** $ ** (f) $ ** (g) $ ** (h) $ ** provided that: **=Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.] (1) each such payment shall be made only one time based on upon the first time a milestone is achievedachievement of the relevant milestone, regardless of how many times such milestone is milestones are achieved (except as otherwise provided by Paragraphs 3.01(f)and regardless of how many times PRODUCT achieves such milestones, and no payment shall be owed for a milestone which is not reached. For Paragraph 3.01(h), SB shall not be required to make more than ** (**) such payments totaling $ **reached during the term of the AGREEMENT; (2) each such payment shall be non-refundable; (3) the term "[**" shall mean the earlier to occur of (i) SB's determination after the last patient has completed his/her last visit ** that such study was successful, or (ii) SB's decision to continue development of the PRODUCT **; (4) the term "**" shall mean, with respect to the relevant INDICATION which is the subject of the study, the earlier to occur of (i) the date on which SB determines that ** was successful, or (ii) SB's decision to **. (5) the term "**" shall mean with respect to the relevant INDICATION which is the subject of the study the earlier to occur of (i) the date on which SB determines that ** was successful, or (ii) SB's decision to **. (6) the term "**" ] as used in this Paragraph shall mean the [*] (a) Based on the results of the [*] , IMMUNOGEN will decide in good faith if [*] has been achieved and notify SB in writing of such achievement, including all of the data outlined in Paragraph 3.01(2)(i) - (v). SB will review the same data in good faith. If SB concurs, based on such data, that a [*] has been achieved, the milestone outlined in Paragraph 3.01(b) shall be deemed to be achieved on the day of SB's concurrence. SB shall notify IMMUNOGEN, in writing, within thirty (30) days after receipt of IMMUNOGEN's written notification, and all data outlined in Paragraph 3.01(2)(i) - (v), whether or not SB has determined that a [*] has been achieved by June 30, 1999. (7b) Notwithstanding the above, if a [*] is not achieved by June 30, 1999: (i) no payment shall be owed by SB to IMMUNOGEN under Paragraph 3.01(b), (ii) no payments shall be owed by SB to IMMUNOGEN under Paragraphs 3.01(c), (d), and (e) for the achievement of the milestones related to [*] respectively, (iii) SB's payment obligation under Paragraph 3.01(f) shall be reduced by [*] and (iv) the provisions of Paragraph 5.07 shall be applicable. (c) In the event that SB does not agree with IMMUNOGEN's assertion that a [*] has been achieved by June 30, 1999, SB shall so notify IMMUNOGEN in writing, and the parties shall promptly submit such issue thereafter to the Chairman, Research & Development of SB and the Chief Executive Officer of (i) the expenses of engaging such Unaffiliated Expert for such determination shall be borne by IMMUNOGEN, and (ii) the provisions of Paragraph 3.01(2)(b) shall be applicable. (3) the term "[*] as used in this Paragraph shall mean [*" ] (a) the payment outlined under Paragraph 3.01(c) shall be owed by SB to IMMUNOGEN if [*] or (b) if Paragraph 3.01(3)(a) is not applicable, the payment owed by SB to IMMUNOGEN under Paragraph 3.01(c) shall be reduced to [*] and SB's payment obligation thereunder shall not vest until the date SB has received [*] (as defined in Paragraph 3.01(3) except that the [*] and the following shall also be applicable: (i) no payments shall be owed by SB to IMMUNOGEN under Paragraphs 3.01(d) and (e) for the achievement of the milestones related to [*] respectively, and (ii) the provisions of Paragraph 5.08 shall be applicable. (4) the term [*] as used in this Paragraph shall mean the date on which the [** required for the filing of a New Drug Application (hereinafter "NDA") ] under this AGREEMENT in accordance with the U.S. Food and Drug Administration (hereinafter "FDA") or the corresponding regulatory agency in other countries for PRODUCT for the relevant INDICATION APPENDIX D, which is intended to [*] (5) the subject of term [*] as used in this Paragraph shall mean [*] such demonstration to be determined by SB using the study same standards SB would use in assessing whether or not to [*] (6) by the term [*] as defined used in 21 CFR (S)312.21(c)this Paragraph shall mean the earlier of; (8) a) the date [*] or (b) the date [*] (7) by the term "NDA Acceptance" shall mean, [*] with respect to each INDICATIONof the indicated milestones is meant that [*] will be paid for [*] indicated milestones to occur, i.e., up to a total of [*] provided that a milestone payment shall be due for [*] (8) by the earlier of term [*] as used in this Paragraph is meant, with respect [*] (9) by the term [*] as used in this Paragraph is meant the [*] (10) by the term [*] as used in this Paragraph is meant [*] (11) by the term [*] as used in this Paragraph is meant [*] (12) by the term [*] is meant that, [*] (i) written notice of acceptance from In the FDA of event that Paragraph 5.07 is not applicable then, in further consideration for the NDA filed by or on behalf of licenses and sublicenses under PATENTS granted to SB under this AGREEMENT necessary for commercialization AGREEMENT, and subject to Paragraph 4.02, SB shall make the following royalty payments to IMMUNOGEN on a per PRODUCT basis: (a) [*] of annual NET SALES of such PRODUCT for the relevant, whichever is appropriate, or up to and including [*] (b) [*] of annual NET SALES of such PRODUCT in excess of [*]) up to and including [*] and (c) [*] of annual NET SALES of such PRODUCT in excess of [*] (ii) sixty In the event that Paragraph 5.07 is applicable then, in further consideration for the licenses and sublicenses under PATENTS granted to SB under this AGREEMENT, and subject to Paragraph 4.02, SB shall make the following royalty payments to IMMUNOGEN on a per PRODUCT basis: (60a) days [**=Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions. following filing ] of annual NET SALES of such NDA with the FDA, assuming that SB has not received a "Notice of Refusal PRODUCT up to File" from the FDA with respect to such NDA.and including [*] and