Common use of Milestone Conditions Clause in Contracts

Milestone Conditions. The milestone payments payable under Sections 5.4.1 and 5.4.2 with respect to Products acting through a given BMS Target or Lexicon Target, as the case may be, shall be subject to the following conditions. (a) Only one set of milestone payments will be paid for all Products containing a given Development Compound (including all forms and formulations of Products containing such Development Compound) upon the first occurrence of the milestone event for a Product containing that Development Compound, regardless of the number of times a milestone event may be achieved for Products containing such Development Compound (for example, regardless of the number of Phase 3 Trials and NDA Filings and Approvals that may be obtained for Products containing such Development Compound); provided, that, in the event a Phase 3 Trial is commenced in a second and/or third indication prior to NDA Approval in a first indication, the milestones for the commencement of a Phase 3 Trial in such second and/or third indication shall be deferred until, and shall be subject to and contingent upon, NDA Approval in the first indication. (b) Each milestone payment shall be payable upon the first achievement of the milestone event for a given Development Compound; provided, however, for each subsequent Product containing a different Development Compound, the product development milestone payments for such subsequent Product shall be deferred until NDA Approval or MAA Approval is obtained for the first Product. Once NDA Approval or MAA Approval is obtained for the first Product, any deferred milestone payments for the next most advanced subsequent Product continuing in development will be due; provided that, if development of any Product is discontinued prior to NDA Approval or MAA Approval, any milestone payments made for such Product shall be credited against any milestone payments due for any subsequent Product. As each Product is approved, deferred milestone payments will be paid consistent with the foregoing principles. (c) Subject to the foregoing provisions of this Section 5.4.3, if any milestone event for a Product is achieved prior to or in the absence of the achievement of any preceding milestone event for such Product (e.g., an NDA filing for a Product without a Phase 3 Trial) then, effective upon achievement of any such milestone event, all previously unpaid payments for any such preceding milestone event(s) shall also become due and payable; provided, however, that if more than one sales performance milestone is first achieved in the same Contract Year, there shall be at most one sales performance milestone payment due for such Contract Year and, in such event, the payment for the highest sales performance milestone that is first achieved in such Contract Year shall become payable and the payment(s) for the lower of such sales performance milestones that are first achieved in such Contract Year shall remain eligible to be achieved and paid in subsequent Contract Years. 7. Section 5.5.2 of the Collaboration Agreement is hereby amended and restated in its entirety as follows:

Milestone Conditions. The milestone payments payable under Sections 5.4.1 and 5.4.2 with respect to Products acting through a given BMS Target or Lexicon Target, as the case may be, shall be subject to the following conditions. (a) Only one set of milestone payments will be paid for all Products containing a given Development Compound (including all forms and formulations of Products containing such Development Compound) upon the first occurrence of the milestone event for a Product containing that Development Compound, regardless of the number of times a milestone event may be achieved for Products containing such Development Compound (for example, regardless of the number of Phase 3 Trials and NDA Filings and Approvals that may be obtained for Products containing such Development Compound); provided, that, in the event a Phase 3 Trial is commenced in a second and/or third indication prior to NDA Approval in a first indication, the milestones for the commencement of a Phase 3 Trial in such second and/or third indication shall be deferred until, and shall be subject to and contingent upon, NDA Approval in the first indication. (b) Each milestone payment shall be payable upon the first achievement of the milestone event for a given Development Compound; provided, however, for each subsequent Product containing a different Development Compound, the product development milestone payments for such subsequent Product shall be deferred until NDA Approval or MAA Approval is obtained for the first Product. Once NDA Approval or MAA Approval is obtained for the first Product, any deferred milestone payments for the next most advanced subsequent Product continuing in development will be due; provided that, if development of any Product is discontinued prior to NDA Approval or MAA Approval, any milestone payments made for such Product shall be credited against any milestone payments due for any subsequent Product. As each Product is approved, deferred milestone payments will be paid consistent with the foregoing principles. (c) Subject to the foregoing provisions of this Section 5.4.3, if any milestone event for a Product is achieved prior to or in the absence of the achievement of any preceding milestone event for such Product (e.g., an NDA filing for a Product without a Phase 3 Trial) then, effective upon achievement of any such milestone event, all previously unpaid payments for any such preceding milestone event(s) shall also become due and payable; provided, however, that if more than one sales performance milestone is first achieved in the same Contract Year, there shall be at most one sales performance milestone payment due for such Contract Year and, in such event, the payment for the highest sales performance milestone that is first achieved in such Contract Year shall become payable and the payment(s) for the lower of such sales performance milestones that are first achieved in such Contract Year shall remain eligible to be achieved and paid in subsequent Contract Years. 7. Section 5.5.2 of the Collaboration Agreement is hereby amended and restated in its entirety as follows: