Common use of Budgets and Overages Clause in Contracts

Budgets and Overages. Each Party shall use Commercially Reasonable Efforts to ensure that the actual costs associated with the performance of activities allocated to it in the Additional Research Plan, Joint Development Plan and Budget, Global Commercialization Plan, Incremental Capacity Buildup Plan and Commercial Capacity Buildup Plan (if applicable), in each case for the applicable Program, in a Calendar Year do not exceed [***] of the budgeted costs allocated to such Party for such Calendar Year as set forth in the budget for each applicable plan. Costs for the performance of all activities described in the applicable plan and budget and allocated to a given Party that exceed the estimated allocated costs therefor as set forth in the budget by up to [***] shall be referred to herein as the “Permitted Overage”, and such costs shall be included as Shared Development and Related Manufacturing Costs or Shared Commercialization and Related Manufacturing Costs, as applicable. If either Party believes that the actual costs in relation to its activities allocated to a given Party in a Calendar Year will exceed the allocated budget as set forth in the applicable plan and budget (plus the Permitted Overage) for all such activities allocated to such Party during such Calendar Year, such Party may request the JSC to review and approve such activities and the costs thereof before undertaking such excess cost. In the event that the JSC does not approve an increase in the budget for such activity, then [***]. For clarity, any costs incurred by or on behalf of a Party (or its Affiliates) that are in excess of the budget (plus the Permitted Overage) for such costs as set forth in the applicable Joint Development Plan and Budget, Global Commercialization Plan, Incremental Capacity Buildup Plan, Additional Research Plan or Commercial Capacity Buildup Plan, in each case, for the applicable Program, shall be [***].