COMMERCIALIZATION PLAN AND THE COMMERCIALIZATION BUDGET TO THE JCC FROM TIME TO
TIME AS APPROPRIATE IN LIGHT OF CHANGED CIRCUMSTANCES.
SUCH ANNUAL AND INTERIM
UPDATES FOR PERIODS COMMENCING WITH CALENDAR YEARS THROUGH THE ONE CONTAINING
THE END OF THE SUBSEQUENT LAUNCH PERIOD SHALL BE APPROVED BY THE JCC AS SET
FORTH IN SECTION 2.4(B)(II).
SUBJECT TO SECTIONS 2.2(VI) AND 2.10, IF A
PROPOSED UPDATE TO THE COMMERCIALIZATION PLAN OR COMMERCIALIZATION BUDGET IS NOT
APPROVED BY THE JEC OR JCC AS APPLICABLE, THEN THE COMMERCIALIZATION PLAN OR
COMMERCIALIZATION BUDGET, AS THE CASE MAY BE, SHALL CONTINUE IN EFFECT AS
APPROVED AND MOST RECENTLY UPDATED PURSUANT TO THIS SECTION 5.11(C).
5.12
COMMERCIALIZATION EXPENSES.
THE PARTIES AGREE THAT THE JV SHALL
BEAR ALL JV EXPENSES INCURRED BY EACH OF GILEAD AND BMS IN CONNECTION WITH THE
PERFORMANCE OF ITS RESPECTIVE COMMERCIALIZATION ACTIVITIES TO THE EXTENT THAT
THEY MEET ALL OF THE FOLLOWING CRITERIA ("AUTHORIZED COMMERCIALIZATION
EXPENSES"):
(A) SUCH COMMERCIALIZATION ACTIVITIES ARE COVERED IN AND CONSISTENT
WITH THE COMMERCIALIZATION PLAN AND ARE WITHIN AN AREA OF RESPONSIBILITY FOR THE
RELEVANT MEMBER PARTY LISTED IN THE COMMERCIALIZATION BUDGET AS BEING CHARGEABLE
TO THE JV; (B) THE TOTAL EXPENSES FOR THAT MEMBER PARTY'S DESIGNATED ACTIVITIES
UNDER THE COMMERCIALIZATION PLAN FOR THE RELEVANT PERIOD TO THE EXTENT THAT THEY
DO NOT EXCEED THE AGGREGATE AMOUNT SET FORTH
51
IN THE COMMERCIALIZATION BUDGET FOR SUCH ACTIVITIES IN THAT PERIOD BY MORE THAN
[*]; (C) THE EXPENSES ARE EXTERNAL, OUT-OF-POCKET COSTS OF GILEAD OR BMS,
WITHOUT ANY MARKUP, AND NOT INTERNAL COSTS, INCLUDING, WITHOUT LIMITATION,
INTERNAL COSTS INCURRED IN [*]; AND (D) THE RELEVANT COMMERCIALIZATION
ACTIVITIES ARE FOR THE MARKETING OF THE COMBINATION PRODUCT ONLY AND NOT FOR THE
MARKETING OF ANY OTHER PROPRIETARY PRODUCTS OF GILEAD OR BMS.
NOTWITHSTANDING
THE LIMITATION CONTAINED IN CLAUSE (D) ABOVE, IN THE EVENT THAT EITHER MEMBER
PARTY REASONABLY BELIEVES THAT THERE ARE COST OR OTHER EFFICIENCIES THAT THE JV
CAN REASONABLY BE EXPECTED TO ACHIEVE THROUGH ONE OR BOTH MEMBER PARTIES'
CONDUCTING COMMERCIALIZATION ACTIVITIES WITH RESPECT TO THE COMBINATION PRODUCT
AS PART OF, OR IN COORDINATION WITH, ACTIVITIES BEING CONDUCTED BY ONE OR BOTH
MEMBER PARTIES WITH RESPECT TO ITS OR THEIR SINGLE AGENT PRODUCT(S) AND/OR
DOUBLE AGENT PRODUCT, SUCH MEMBER PARTY(IES) MAY PROPOSE, BY AND THROUGH ITS JCC
MEMBER(S), THAT SUCH ACTIVITIES BE COORDINATED AND AN APPROPRIATE AND REASONABLE
ALLOCATION OF THE RELATED COSTS BE MADE BETWEEN THE COMBINATION PRODUCT, ON THE
ONE HAND, AND SUCH OTHER PRODUCT OR PRODUCTS, ON THE OTHER HAND, AND THAT THE
AMOUNT ALLOCATED TO THE COMBINATION PRODUCT BE TREATED AS AUTHORIZED
COMMERCIALIZATION EXPENSES (EACH SUCH PROPOSAL, A "COST ALLOCATION PROPOSAL").
IF, AND ONLY TO THE EXTENT THAT, SUCH COST ALLOCATION PROPOSAL IS REVIEWED BY
THE JFC AND JCC PURSUANT TO SECTIONS 2.5(B)(VII) AND 2.4(B)(VIII), RESPECTIVELY,
AND APPROVED BY THE JEC PURSUANT TO SECTION 2.2(IX) (WITH ANY MODIFICATIONS MADE
BY THE JEC), THE AMOUNT APPROVED BY THE JEC FOR ALLOCATION TO THE COMBINATION
PRODUCT (ANY SUCH APPROVED COSTS, "ALLOCATED COSTS") SHALL CONSTITUTE AUTHORIZED
COMMERCIALIZATION EXPENSES.