Common use of Cost of development Clause in Contracts

Cost of development. If at any time prior to the Approval Date, Arius reasonably determines, in its sole discretion, that its anticipated aggregate costs and expenses related to the pursuit of regulatory approval from FDA for the sale and marketing of the Product in the Territory shall exceed $[*], Arius shall notify TEAMM in writing and inform TEAMM of the estimated amounts reasonably required to be spent in excess of $[*]. Upon such notice, TEAMM shall have a thirty (30) day option, in its sole discretion and subject to Arius’ option to pay any such excess amounts out of its own funds, to (i) agree to provide additional funding sufficient to reimburse Arius for all such costs in excess of $[*], in which Arius shall credit TEAMM 50% of the excess in the form of a credit on royalties., with this agreement remaining in effect, provided that TEAMM reimburses Arius for such costs, or (ii) terminate this Agreement and, as its sole remedy, have a warrant for the purchase of shares of Arius’ common stock issued to TEAMM pursuant to Section 2.3 below. Upon the expiration of such thirty (30) day option period, this Agreement shall terminate and, as TEAMM’s sole remedy therefore, a warrant for the purchase of shares of Arius’ common stock shall be issued to TEAMM pursuant to Section 2.3 below