Common use of Overruns Clause in Contracts

Overruns. Each Party shall use Diligent Efforts to conduct the Development Plan for each Licensed Product within the applicable Development Budget. Each Party will promptly notify the other Party upon becoming aware that the anticipated Development Costs to be incurred by such Party for a given calendar year are likely to be in excess of the applicable portion of the Development Budget for that calendar year as set out in the relevant Development Plan. If during any calendar year, actual expenses exceed the Development Budget for such calendar year by [***], the Parties shall share such overspend equally. Development Costs reported by a Party pursuant to Section 6,3 incurred with respect to a Development Plan in excess of [***] of the aggregate amounts budgeted to be incurred by, or on behalf of, such Party for its activities under such Development Plan in such calendar year in the then-current applicable Development Budget shall be deemed “Excess Costs” and shall be treated as described in this Section 6.6. 6.6.1 The Party that is primarily responsible for causing the Excess Costs shall provide the JDC an explanation therefor. If and to the extent that any such Excess Costs were directly related to any of the following, (each a “Permissible Excess Costs”), then, provided the applicable Party has promptly notified the other Party, through the JDC, of such overspend and used reasonable efforts to mitigate the size of such overspend, the Parties shall share any Permissible Excess Costs related to the following: [***]. To the extent that any Excess Costs do not represent Permissible Excess Costs, such Excess Costs shall be solely borne by the Party responsible for performing or causing to be performed such activities.

Overruns. Each Party shall use Diligent Efforts to conduct the Development Plan for each Licensed Product within the applicable Development Budget. Each Party will promptly notify the other Party promptly upon becoming aware that the anticipated Development Costs to be incurred by such Party under the Joint Development Plan for a given calendar year are likely to Calendar Year during the Development Term shall be in excess of the applicable portion approved Joint Development Budget. Thereafter, the following shall apply: (a) Following such notification, the Financial Working Group, in consultation with the JDC and JMC (as and if needed), shall discuss the causes of any such increase and evaluate potential mitigation measures to prevent a further increase of the applicable Development Costs. To the extent that, based on this discussion, the Financial Working Group concludes that the anticipated amount of the Development Budget for that calendar year as set out in the relevant Development Plan. If during any calendar year, actual expenses Costs is likely not to exceed the Development Budget for such calendar year by [***], the Parties shall share such overspend equally. Development Costs reported by a Party pursuant to Section 6,3 incurred with respect to a Development Plan in excess of ] percent ([***] ]%) of the aggregate amounts budgeted to be incurred by, or on behalf of, for such Party for its activities under such Calendar Year during the Development Plan in such calendar year -93- Term (the “Permitted Overage”) as set forth in the then-current applicable Joint Development Budget Budget, such anticipated or actual Development Costs shall be deemed included in the calculation of the applicable Development Costs for the purposes of determining the amounts to be paid from one Party to the other Party to reflect the sharing percentages set forth in Section 5.2.4 (Shared Development Costs); provided that such costs are not incurred as a result of any breach of this Agreement by a Party. (b) If the Financial Working Group, in consultation with the JDC, concludes that the anticipated amount of the applicable Development Costs for such Calendar Year during the Development Term is likely to exceed the Permitted Overage (such amount the “Development Excess Costs” ”) and there are no mitigation measures to prevent such Development Excess Costs, then such Development Excess Costs shall not be included in the calculation of the Development Costs and shall be treated as described in this Section 6.6. 6.6.1 The borne by the Party that is primarily responsible for causing incurring them, unless agreed by the Excess Costs shall provide Parties through the JDC an explanation thereforJSC to be shared. If and Notwithstanding the foregoing, to the extent that any such Development Excess Costs were are directly related attributable to any a change in Applicable Laws, a requirement of a Regulatory Authority, a change required to mitigate a safety issue or a Force Majeure event, or are otherwise agreed by the followingParties, (each a “Permissible Excess Costs”), then, provided then such costs shall not be borne solely by the Party incurring them and shall be included in the calculation of Development Costs for the purposes of determining the amounts to be paid from one Party to the other Party for the applicable Party has promptly notified Calendar Year during the other Party, through the JDC, of such overspend and used reasonable efforts to mitigate the size of such overspend, the Parties shall share any Permissible Excess Costs related to the following: [***]. Development Term. (c) To the extent that any Excess the Development Costs do not represent Permissible Excess for a given Calendar Year during the Development Term are less than the Development Costs included in the Joint Development Budget for such Calendar Year, because Shared Global Development Activities planned for such Calendar Year have been delayed to a subsequent Calendar Year during the Development Term, the Financial Working Group shall adjust the Joint Development Budget for such subsequent Calendar Year(s) to reflect such delay (but without increasing such delayed Development Costs, such Excess Costs shall be solely borne by the Party responsible for performing or causing to be performed such activities).