CO-PROMOTION ROYALTY").
ANY DUE AND PAYABLE BMS CO-PROMOTION ROYALTY SHALL
BE CALCULATED AND PAID IN ACCORDANCE WITH SECTION 6.5.
FOR CLARITY, TERMINATION
OF THE CO-PROMOTION TERM FOR A PRODUCT SHALL NOT RELIEVE MEDAREX OF ITS
OBLIGATION TO PAY ANY BMS CO-PROMOTION ROYALTIES THAT HAVE ACCRUED PRIOR TO, BUT
ARE UNPAID AS OF, THE END OF THE CO-PROMOTION TERM FOR SUCH PRODUCT."
3.
SECTION 6.5 IS DELETED IN ITS ENTIRETY AND REPLACED WITH THE
FOLLOWING:
"6.5
CALCULATION AND PAYMENT OF PROFIT OR LOSS SHARE.
6.5.1
REPORTS AND PAYMENTS IN GENERAL.
IN THE EVENT THAT MEDAREX
EXERCISES ITS CO-PROMOTION OPTION WITH RESPECT TO A CO-PROMOTION PRODUCT, EACH
PARTY SHALL REPORT TO THE OTHER PARTY, WITHIN TWENTY (20) DAYS AFTER THE END OF
EACH QUARTER FOLLOWING SUCH EXERCISE NOTICE, WITH REGARD TO NET SALES AND
ALLOWABLE EXPENSES INCURRED BY SUCH PARTY FOR SUCH CO-PROMOTION PRODUCT DURING
SUCH QUARTER IN THE UNITED STATES IN A MANNER SUFFICIENT TO ENABLE THE OTHER
PARTY TO COMPLY WITH ITS REPORTING REQUIREMENTS; PROVIDED THAT IN THE CASE OF
THE FIRST QUARTER FOR WHICH SUCH REPORT IS DUE, EACH PARTY SHALL ADDITIONALLY
REPORT ALL ALLOWABLE EXPENSES INCURRED BY SUCH PARTY PRIOR TO SUCH QUARTER WITH
RESPECT TO SUCH CO-PROMOTION PRODUCT.
SUCH REPORT SHALL SPECIFY IN REASONABLE
DETAIL NET SALES, ALL DEDUCTIONS ALLOWED IN THE CALCULATION OF SUCH NET SALES
AND ALL EXPENSES INCLUDED IN ALLOWABLE EXPENSES, AND, IF REQUESTED BY A PARTY,
ANY INVOICES OR OTHER SUPPORTING DOCUMENTATION FOR ANY PAYMENTS TO A THIRD PARTY
THAT INDIVIDUALLY EXCEED FIFTY THOUSAND DOLLARS ($50,000) (OR SUCH OTHER AMOUNT
APPROVED BY THE JFC) SHALL BE PROMPTLY PROVIDED.
WITHIN FORTY-FIVE (45) DAYS
AFTER THE END OF EACH QUARTER (OR FOR THE LAST QUARTER IN A YEAR, SIXTY (60)
DAYS AFTER THE END OF SUCH QUARTER), THE PARTIES SHALL RECONCILE ALL NET SALES
AND ALLOWABLE EXPENSES TO ASCERTAIN WHETHER THERE IS A PROFIT OR LOSS (WHICH
CALCULATION SHALL BE MADE WITHOUT TAKING INTO ACCOUNT ANY BMS CO-PROMOTION
ROYALTY) AND PAYMENTS SHALL BE MADE AS SET FORTH IN SUBSECTIONS (A) AND (B)
BELOW, AS APPLICABLE.
[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
2
A.
IF THERE IS A PROFIT FOR SUCH QUARTER, THEN BMS SHALL (I) REIMBURSE
MEDAREX FOR ALLOWABLE EXPENSES INCURRED BY MEDAREX IN SUCH QUARTER AND (II) PAY
TO MEDAREX, SUBJECT TO SECTION 6.4.2, AN AMOUNT EQUAL TO FORTY-FIVE PERCENT
(45%) OF THE PROFIT FOR SUCH QUARTER, LESS THE APPLICABLE AGGREGATE BMS
CO-PROMOTION ROYALTY FOR SUCH QUARTER, PROVIDED THAT IF MEDAREX'S SHARE OF THE
PROFIT FOR SUCH QUARTER IS LESS THAN THE BMS CO-PROMOTION ROYALTY PAYABLE TO
BMS, MEDAREX SHALL MAKE A RECONCILING PAYMENT TO BMS (EITHER BY DIRECT PAYMENT
TO BMS OR BY OFFSET OF OTHER AMOUNTS PAYABLE BY BMS TO MEDAREX FOR SUCH QUARTER)
EQUAL TO THE APPLICABLE SHORTFALL WITHIN (A) SUCH APPLICABLE FORTY-FIVE (45)-DAY
PERIOD OR