Provision Language
4. PAYMENTS
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4.3 Milestone Donation by Company. Within [**] days after the end of the first fiscal quarter in which Company has received an aggregate of US$[**] in Product Revenues, Company shall make a payment to the Foundation (or, at the Foundation’s option, one or more other non-profit organizations or academic or research institutions designated by the Foundation in writing) in the applicable amount set forth below pursuant to clause (a), (b) or (c), whichever one (and only one) of the following applies:
[Details redacted]
In addition to the foregoing milestone payments, and provided that the Foundation provided funding for Lead Optimization of Products hereunder at the level set forth in the first paragraph of 4.3(c), within [**] days after the end of the first calendar year during which Company has received an annual aggregate in that year of US$[**] in Product Revenues, Company shall make a payment to the Foundation equal to 100% of the sum of the Research Funds and the Additional Payments. For the avoidance of doubt, such additional payment shall be a one-time payment only, regardless of any additional Product Revenues.
If [**] in good faith believes that making the applicable payment(s) specified in this Section 4.3 on the schedule set forth above will prevent Company from achieving a reasonable profit margin on commercial sales of Products, [**] may reduce any such payments due in the applicable calendar or fiscal quarter by [**]%, or such other reduction as the parties shall in good faith agree, with any reduction carried forward on a quarter-by-quarter basis (subject to the same reductions in each subsequent quarter) until paid in full.
AMENDMENT No. 2 TO SPONSORED RESEARCH AGREEMENT
11. Company Payments to Foundation and Related Provisions.
Sections 4.3, 4.4, 4.5, 4.6 and 4.7 of the Agreement (captioned “Milestone Donation by Company”, “Reporting of Product Revenues”, “Exchange Rate; Manner and Place of Payment”, “Taxes” and “Audits”, respectively) shall, as of the Second Amendment Effective Date, be amended and restated as follows:
“4.3 Payments by Company. Company will make the following payments to Foundation in connection with Product Revenues:
“(a) Company will make payments as specified below to Foundation up to a maximum amount equal to [**] by [**] pursuant to the Agreement (the “SMAF Funding Amount,” which, for clarity, includes [**] pursuant to the [**] defined below (such total amount, the “Repayment Amount”). For the purposes of this Section 4.3 of the Agreement, the “[**]” shall be [**] unless and until both (i) a Product has achieved Worldwide Net Sales of at least [**] US dollars ($[**]) in any calendar year; and (ii) the SMAF Funding Amount received with respect to such Product equals or exceeds a total of [**] US dollars ($[**]), upon the occurrence of which the [**].
“(b) In the event that Company and/or its Affiliates sells Products, then Company shall pay the Repayment Amount to the Foundation by making installment payments to the Foundation, each of which shall be equal to [**] percent ([**]%) of Net Sales received by Company and its Affiliates in the applicable calendar quarter and each of which shall be paid in U.S. dollars, by wire transfer to an account specified by the Foundation, within [**] days of end of such calendar quarter. The first such installment payment shall be paid for the first calendar quarter following the first calendar year in which Net Sales equaled or exceeded [**] U.S. Dollars (US$[**]) (the “Sales Threshold”). An additional installment payment shall be paid to the Foundation for each subsequent calendar quarter until such time as the sum of all installment payments made pursuant to this Section 4.3(b) of the Agreement, together with all installment payments made pursuant to Section 4.3(c) of the Agreement, equals the Repayment Amount. If the [**], Company shall make additional payments until the updated Repayment Amount has been met. 32
“(c) In the event that Company and/or its Affiliates enters into one or more license agreements for the development, manufacture, use, distribution, promotion or sale of a Drug Candidate or Product in one or more territories, then Company shall repay the Repayment Amount by making installment payments to the Foundation, each of which shall be equal to [**] percent ([**]%) of PTC License Income received by Company and its Affiliates in the applicable calendar quarter and each of which shall be paid in U.S. dollars, by wire transfer to an account specified by the Foundation, within [**] days of the end of such calendar quarter. The first quarter during which such installment payments shall be paid shall be the first calendar quarter following the first calendar year in which both of the following criteria are met: (i) a Licensee makes or has previously made its First Commercial Sale and (ii) Worldwide Net Sales equal or exceeded [**] U.S. Dollars (US$[**]). An additional installment payment shall be paid to the Foundation for each subsequent calendar quarter until such time as the sum of all installment payments made pursuant to this Section 4.3(c) of the Agreement, together with all installment payments made pursuant to Section 4.3(b) of the Agreement, equals the Repayment Amount. If the [**], Company shall make additional payments until the updated Repayment Amount has been met. Notwithstanding the foregoing, if the payments owed pursuant to this Section 4.3(c) of the Agreement would, when combined with other payments owed by Company to Third Parties in connection with the receipt of such PTC License Income, exceed [**] percent ([**]%) of such PTC License Income, then the payments owed pursuant to this Section 4.3(c) of the Agreement and such other payments owed by the Company to Third Parties shall all be automatically reduced pro rata until the combined payments no longer exceed [**] percent ([**]%) of such PTC License Income; provided, however, that this reduction shall only be available with respect to payments under this Section 4.3(c) of the Agreement if all other payments owed by Company to Third Parties in connection with the receipt of such PTC License Income are also subject to such pro rata reduction.
AMENDMENT No. 4 TO SPONSORED RESEARCH AGREEMENT
2. SMAF Funding Amount. As of the Fourth Amendment Effective Date, the SMAF Funding Amount shall be $13,120,140.83.