Exhibit 10.2

 

Execution Version

CONFIDENTIAL

 

Trek Therapeutics, PBC and Vertex Pharmaceuticals Incorporated Assignment and
License Agreement 

 

This Assignment and License Agreement (the “Agreement”) is made and entered into
as of July 12, 2016 (the “Effective Date”), by and between Vertex
Pharmaceuticals Incorporated, with an address at 50 Northern Avenue, Boston,
Massachusetts 02210 (together with its Affiliates, “VERTEX”) and Trek
Therapeutics, PBC with an address at 125 Cambridge Park Drive, Suite 301,
Cambridge, Massachusetts 02140 (“TREKtx”). VERTEX and TREKtx each may be
referred to herein individually as a “Party” or collectively as the “Parties.”

 

WHEREAS, VERTEX owns rights to the proprietary compounds identified as VX-222
and VX-497;

 

WHEREAS, TREKtx desires to obtain the rights to develop and commercialize VX-222
and VX-497 and VERTEX desires to grant such rights, subject to TREKtx’s payment
of milestones and royalties and consistent with the terms set forth in this
Agreement;

 

NOW, THEREFORE, in consideration of the covenants and obligations set forth
herein, and other good and valuable consideration, the Parties agree as follows:

 

Article 1.     Definitions. The following definitions shall apply to the defined
words where such words are used in this Agreement:

 

1.1.     “Affiliate” of a Person means any other Person, whether de jure or de
facto, which directly or indirectly controls, is controlled by, or is under
common control with such Person for so long as such control exists, where
“control” means the decision- making authority as to such Person and, further,
where such control shall be presumed to exist where a Person owns more than
fifty percent of the equity (or such lesser percentage which is the maximum
allowed to be owned by a foreign corporation in a particular jurisdiction)
having the power to vote on or direct the affairs of the entity.

 

1.2.     “Agreement” has the meaning set forth in the preamble.

 

1.3.     “Anti-Corruption Laws” has the meaning set forth in Section 5.2.

 

1.4.     “Assigned Compound” means a VX-222 Compound and/or VX-497 Compound, as
context requires.

 

1.5.     “Assigned Know-How” means the information identified in Exhibit B to
the extent Controlled by VERTEX and to the extent solely and specifically
related to the Assigned Compounds. Notwithstanding the foregoing or any items
listed in Exhibit B, Assigned Know-How does not include: (i) any of VERTEX’s
general drug design or delivery technology, whether in hardware or software
form, tangible or intangible, or information relating to any compounds or active
ingredients other than the Assigned Compounds; or (ii) any formulation or
manufacturing technology not applied to an Assigned Compound or Product by or on
behalf of VERTEX.

 

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1.6.     “Assigned Patents” means the Patents listed in Exhibit A, including any
re-examination, re-issue, continuation, or division thereof (to the extent that
each claimed invention in such application is Covered by one or more clams in
the patents listed in Exhibit A) and any foreign counterparts filed or issued in
the Territory.

 

1.7.     “Associated Persons” has the meaning set forth in Section 5.2.

 

1.8.     “Business Day” means a Monday, Tuesday, Wednesday, Thursday or Friday
that is not a day on which banking institutions in Boston, Massachusetts are
authorized or obligated to close.

 

1.9.     “Calendar Quarter” means the respective periods of three consecutive
calendar months ending on March 31, June 30, September 30 or December 31, during
the Term, or the applicable part thereof during the first or last calendar
quarter of the Term.

 

1.10.     “Calendar Year” means any calendar year ending on December 31, or the
applicable part thereof during the first or last year of the Term.

 

1.11.     “Claims” has the meaning set forth in Section 10.1.

 

1.12.     “Combination Product” means (a) any product, process or service which
incorporates one or more therapeutically active ingredients, other than an
Assigned Compound, in combination or co-formulation with an Assigned Compound;
or (b) any combination of a Product and another product that contains at least
one other therapeutically active ingredient that is not an Assigned Compound,
where such products are not formulated together but are packaged or sold
together as a single product and invoiced as one product.

 

1.13.     “Commercialize” or “Commercialization” means (a) to market, promote,
distribute, offer for sale, sell, have sold, import, export or otherwise
commercialize a Product and (b) to conduct activities other than Research,
Development and Manufacturing, in preparation for the foregoing activities,
including obtaining pricing approval, and to conduct post-Marketing
Authorization studies (including clinical trials).

 

1.14.     “Confidential Information” means all non-public, confidential or
proprietary information, data or know-how whether provided in written, oral,
graphic, video, computer or other form, provided by one Party (the “Disclosing
Party”) to the other Party (the “Receiving Party”) in any form pursuant to this
Agreement, including but, not limited to, information relating to the Disclosing
Party’s existing or proposed research, development, patent applications,
business or products. VERTEX’s Confidential Information shall include the
Licensed Know-How. The Assigned Know- How shall be deemed to be TREKtx’s
Confidential Information. The terms of this Agreement shall be deemed to be each
Party’s Confidential Information. All information disclosed by a Party under the
Mutual Confidentiality Agreement between the Parties dated January 15, 2015 is
deemed the Confidential Information of such Party pursuant to this Agreement.
Confidential Information shall not include any information or materials that the
Receiving Party can document with competent written proof: (i) were already
known to the Receiving Party (other than under an obligation of confidentiality)
at the time of disclosure by or on behalf of the Disclosing Party; (ii) were
available to the public 

 

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or otherwise part of the public domain at the time of its disclosure to the
Receiving Party; (iii) became available to the public or otherwise part of the
public domain after its disclosure to the Receiving Party, other than through
any act or omission of the Receiving Party in breach of its obligations under
this Agreement; (iv) were disclosed to the Receiving Party, other than under an
obligation of confidentiality, by a Third Party who had no obligation to the
Disclosing Party not to disclose such information to the Receiving Party or
others; or (v) were independently discovered or developed by or on behalf of the
Receiving Party without the use of the Confidential Information belonging to the
Disclosing Party. Notwithstanding the foregoing, specific aspects or details of
Confidential Information shall not be deemed to be within the public domain or
in the rightful possession of the Receiving Party merely because they are
contained within more general public disclosures or more general information in
the rightful possession of the Receiving Party.

 

1.15.     “Controlled” means, with respect to any know-how, Patent or other
intellectual property right, possession of the right, whether directly or
indirectly, and whether by ownership, license or otherwise, to assign, or grant
a license, sublicense or other right to or under, such know-how, Patent, or
right as provided for herein without violating the terms of any agreement or
other arrangements with any Third Party, provided, that if the assignment or
license of such know-how, Patent or other intellectual property right would
trigger a royalty or other payment to a Third Party or would require compliance
with any provision of any license between VERTEX and a Third Party, VERTEX will
so notify TREKtx and such know-how, Patent or other intellectual property right
will only be deemed Controlled if, following receipt of such notice, TREKtx
agrees in writing to reimburse VERTEX for all such payments to such Third Party
and to comply with any such provision.

 

1.16.     “Cover,” “Covering,” “Covers” or “Covered” means, as to a compound or
product and Patent, that, in the absence of a license granted under, or
ownership of, such Patent, the making, using, keeping, selling, offering for
sale or importation of such compound or product would infringe such Patent or,
as to a pending claim included in such Patent, the making, using, selling,
offering for sale or importation of such compound or product would infringe such
Patent if such pending claim were to issue in an issued patent without
modification.

 

1.17.     “Development” means, with respect to a Product, all clinical and non-
clinical research and development activities conducted after filing of an IND
for such Product, including toxicology, pharmacology test method development and
stability testing, process development, formulation development, delivery system
development, quality assurance and quality control development, statistical
analysis, clinical trials (other than post-Marketing Authorization clinical
trials), regulatory affairs, pharmacovigilance, clinical trial regulatory
activities and obtaining and maintaining regulatory approval.

 

1.18.     “Disclosing Party” has the meaning set forth in the definition of
Confidential Information.

 

1.19.     “Effective Date” has the meaning set forth in the preamble.

 

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1.20.     “Field of Use” has the meaning set forth in Section 2.4.

 

1.21.     “First Commercial Sale” shall mean, with respect to a particular
Product in a particular country in the Territory, the first commercial sale of
such Product to a Third Party for end use or consumption in such country in an
arm’s length transaction by TREKtx or any other Seller after the receipt of
Marketing Authorization in such country. Sales for test marketing, sampling and
promotional uses, clinical trial purposes or compassionate or similar use shall
not be considered to constitute a First Commercial Sale.

 

1.22.     “HCV” means the Hepatitis C Virus.

 

1.23.     “IND” means any Investigational New Drug application filed with the
United States Food and Drug Administration pursuant to Part 312 of Title 21 of
the U.S. Code of Federal Regulations, including any supplements or amendments
thereto. References herein to IND will include, to the extent applicable, any
comparable filings outside the United States.

 

1.24.     “Indication” means a separate and distinct disease or medical
condition in humans (a) that a Product is being evaluated to treat, or (b) for
which a Product has received Marketing Authorization.

 

1.25.     “Initiation” means, with respect to any clinical trial, dosing of the
first human subject in such clinical trial.

 

1.26.     “Licensee” has the meaning set forth in Section 2.5.1.

 

1.27.     “Licensed Know-How” means the information other than Assigned Know-
How that (a) was Controlled by VERTEX on the Effective Date and remains under
the Control of VERTEX during the Term; (b) was used by VERTEX in its Research,
Development or Manufacturing of the Assigned Compounds prior to the Effective
Date; and (c) is necessary for the Development, use, Manufacturing or
Commercialization of any of the Assigned Compounds. Licensed Know-How does not
include: (i) any of VERTEX’s general drug design or delivery technology, whether
in hardware or software form, tangible or intangible, or information relating to
any compounds or active ingredients other than the Assigned Compounds; or (ii)
any formulation or manufacturing technology not applied to an Assigned Compound
or Product by or on behalf of VERTEX.

 

1.28.     “Manufacture” or “Manufactured” or “Manufacturing” means activities
directed to making, having made, producing, manufacturing, processing, filling,
finishing, packaging, labeling, quality control testing and quality assurance
release, shipping or storage of a Product.

 

1.29.     “Marketing Authorization” means, with respect to a Product in a
particular jurisdiction in the Territory, the receipt of all approvals from the
relevant regulatory authority necessary to market and sell such Product in any
such jurisdiction, excluding any pricing approval or reimbursement
authorization.

 

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1.30.     “Materials” means raw materials, pharmaceutical ingredients,
intermediates and drug products identified in Exhibit C.

 

1.31.     “Milestone Event” has the meaning set forth in Section 4.2.

 

1.32.     “Milestone Payment” has the meaning set forth in Section 4.2.

 

1.33.     “Monetization Transaction” has the meaning set forth in Section 4.6.

 

1.34.     “Net Sales” means the gross amount billed or invoiced by TREKtx, its
Affiliates and their Licensees, assignees, and any other Third Party to which
TREKtx grants rights with respect to the Research, Development, Manufacturing,
and Commercialization of an Assigned Compound (including by assignment of the
Assigned Patents or Assigned Know-How) (collectively referred to as the
“Seller”) on sales of any Product to a Third Party, less Permitted Deductions
determined under United States generally accepted accounting principles.
“Permitted Deductions” means the following;

 

 

(a)

customary transportation charges relating to such Product, including handling
charges, outbound freight, shipment and insurance premiums relating thereto;

 

 

(b)

sales taxes, excise taxes, use taxes, tariffs and duties paid by and not
refunded to the Seller and directly related to sale of such Product, and any
other equivalent governmental charges imposed upon the importation, use or sale
of such Product, but excluding income and similar taxes;

 

 

(c)

government-mandated deductions and other rebates (notably but not limited to
those in respect of any state or federal Medicare, Medicaid or similar
programs), clawbacks or other forms of payment to any governmental authority or
agency and payments or accruals made with respect to any national or local
health insurance program, including government fees levied as a result of health
care reform policies such as the branded prescription drug fee of the Affordable
Care Act;

 

 

(d)

customary trade, quantity and cash discounts, allowances and credits allowed or
paid in the form of deductions actually allowed or fees actually paid with
respect to sales of such Product (to the extent not already reflected in the
amount invoiced);

 

 

(e)

allowances or credits to customers on account of retrospective price reductions,
rejections or returns of Product, including billing errors; and

 

 

(f)

customary rebates, charge backs and discounts (or equivalent thereof) actually
granted for such Product including those customarily granted to managed care
entities or organizations, pharmacy benefit managers (or equivalent thereof),
federal,

 

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state/provincial, local or other governments or their agencies or purchasers,
reimbursers or trade customers.

 

A Permitted Deduction set forth in (a)-(f) above may be deducted only once,
regardless of the number of the preceding categories that describe such amount.
Sales between or among TREKtx, its Affiliates and Licensees will be excluded
from the computation of Net Sales if such sale is not intended for end use, but
Net Sales will include the subsequent final sales to Third Parties by TREKtx or
any such Affiliates and Licensees. A Product will not be deemed to be sold if
the Product is provided free of charge to a Third Party in reasonable quantities
as a sample consistent with industry standard promotional and sample practices.
For clarity, Net Sales includes sales such as so-called “treatment IND sales,”
“named patient sales,” and “compassionate use sales,” even if such sales occur
prior to receipt of Marketing Authorization.

 

In the case of any sale that is not invoiced, Net Sales shall be calculated at
the time of transfer of title of the Product based on the gross selling price.
If a sale, transfer or other disposition with respect to a Product involves
consideration other than cash or is not at arm’s length, then the Net Sales from
such sale, transfer or other disposition will be calculated based on the fair
market value of the Product as reasonably determined by the Parties.

 

Net Sales for a Combination Product in a country shall be calculated by
multiplying actual Net Sales of such Combination Product as determined in the
first paragraph of the definition of “Net Sales” by the fraction A/(A+B) where A
is the weighted average invoice price of such Product, if sold separately, and B
is the total of the weighted average invoice price(s) of the other active
ingredient(s) in the combination, if sold separately. The weighted average
invoice prices referenced above will be calculated with reference to the
prevailing prices during the applicable Calendar Quarter in those top selling
countries that equate to 80% of Net Sales of the applicable Product in the
Territory, with the prices weighted in the calculation to reflect the actual
relative sales value of the Product in each of the countries to which the
calculation relates. If it is not possible to determine the fraction A/(A+B)
based on the criteria specified in the preceding sentence (e.g., if a Product
component is not sold separately), the Parties shall determine Net Sales for the
Product in such Combination Product by the fraction A/N where A is the weighted
average invoice price of such Product, and N is the total number of products
including the Product in such Combination Product. Notwithstanding anything
contained herein, Net Sales for a Combination Product based on the foregoing
calculations shall not fall below an amount equal to fifty percent of the total
Net Sales for such Combination Product as calculated based on the first
paragraph of this Section 1.34.

 

1.35.     “Party” or “Parties” has the meaning set forth in the preamble.

 

1.36.     “Patents” means patents existing upon the Effective Date and future
patents and patent applications including without limitation provisional
applications, continuation applications, continuations-in-part, divisional
applications, Patent Cooperation Treaty applications, invention patents, utility
model patents, industrial design patents, reexaminations, reissues,
registrations, confirmations, revalidations, certificates of addition, utility
models and petty patents, including extensions or

 

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restorations of terms thereof, pediatric exclusivity extension of a patent,
supplementary protection certificates or any other such right.

 

1.37.     “Permitted Deductions” has the meaning set forth in the definition of
Net Sales.

 

1.38.     “Person” means any natural person, corporation, general partnership,
§312.21(b), or, with respect to a jurisdiction other than the United States, a
similar clinical trial.

 

1.39.     “Phase 2 Clinical Trial” means any clinical trial as described in 21
C.F.R. §312.21(b), or, with respect to a jurisdiction other than the United
States, a similar clinical trial.

 

1.40.     “Phase 3 Clinical Trial” means any clinical trial as described in 21
C.F.R. 312.21(c), or, with respect to a jurisdiction other than the United
States, a similar clinical trial.

 

1.41.     “Product” means any preparation, substance or formulation comprised,
in whole or in part, of an Assigned Compound. Product includes any Combination
Product.

 

1.42.     “Progress Reports” has the meaning set forth in Section 6.1.

 

1.43.     “Receiving Party” has the meaning set forth in the definition of
Confidential Information.

 

1.44.     “Research” means conducting research activities to advance Assigned
Compounds and Products, including pre-clinical studies and optimization, but
specifically excluding Development and Commercialization.

 

1.45.     “Revenue Buyer” has the meaning set forth in Section 4.6.

 

1.46.     “Royalty Term” means, with respect to a Product in a country, the
period commencing on the first sale generating Net Sales of such Product in such
country and ending ten years after the First Commercial Sale of such Product in
such country.

 

1.47.     “Seller” has the meaning set forth in the definition of Net Sales.

 

1.48.     “Storage Facility” has the meaning set forth in Section 2.6.

 

1.49.     “Term” has the meaning set forth in Section 7.1.

 

1.50.     “Territory” means worldwide.

 

1.51.     “Third Party” means any Person other than VERTEX, TREKtx or their
respective Affiliates.

 

1.52.     “Third Party Auditor” has the meaning set forth in Section 4.5.

 

1.53.     “TREXtx” has the meaning set forth in the preamble.

 

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1.54     “TREKtx Indemnitees” has the meaning set forth in Section 10.2.

 

1.55.     “VERTEX” has the meaning set forth in the preamble.

 

1.56.     “VERTEX Indemnitees” has the meaning set forth in Section 10.1.

 

1.57.     “VX-222 Compound” means the VX-222 compound (having the chemical
structure depicted in Exhibit D) including, any and all salts, esters,
metabolites, prodrugs, acid forms, base forms, steroisomers, racemates,
tautomers, polymorphs, solvates, hydrates and crystalline forms thereof.

 

1.58.     “VX-497 Compound” means the VX-497 compound (having the chemical
structure depicted in Exhibit D) including, any and all salts, esters,
metabolites, prodrugs, acid forms, base forms, steroisomers, racemates,
tautomers, polymorphs, solvates, hydrates and crystalline forms thereof.

 

1.59.     “Withheld Taxes” has the meaning set forth in Section 4.4.3.

 

Article 2. License; Assignment.

 

2.1.     Assignment of Rights. Subject to the terms and conditions of this
Agreement, VERTEX hereby assigns to TREKtx, and TREKtx hereby accepts, all of
VERTEX’s right, title and interest in the Assigned Patents and Assigned
Know-How. Notwithstanding anything contained herein, the Parties expressly
acknowledge that (i) VERTEX has, prior to the Effective Date, abandoned certain
Patents including Patents that may have Covered the Assigned Compounds, (ii)
VERTEX has not conducted any search to determine whether the Assigned Patents
(or any other Patent that may claim or Cover the Assigned Compounds) have been
abandoned or whether any abandoned Assigned Patent (or any other Patent that may
Cover the Assigned Compounds) may be revived and (iii) VERTEX makes no
representation as to the status, validity or enforceability of any Assigned
Patent. If requested by TREKtx, VERTEX will reasonably cooperate with TREKtx in
executing any customary and suitable written instruments effectuating the
assignment of rights described in this Section 2.1.

 

2.2.     License to VERTEX. Notwithstanding the foregoing, effective upon the
assignment of Assigned Patents and Assigned Know-How pursuant to Section 2.1,
TREKtx will, and hereby does, grant to VERTEX (a) a perpetual, irrevocable,
exclusive, royalty-free, fully paid-up, worldwide, sublicensable (through
multiple tiers), license under any such Assigned Patents and Assigned Know-How
to research, develop, manufacture, have manufactured, use, keep, sell, offer for
sale, import, export and commercialize any compounds Covered in such Assigned
Patents or described in such Assigned Know-How that are not the Assigned
Compounds in any and all fields, including in the Field of Use; and (b) a
perpetual, irrevocable, exclusive, royalty-free, fully paid up, worldwide,
license under any such Assigned Patents and Assigned Know- How to Research and
Develop the Assigned Compounds in any and all fields outside of the Field of
Use, including without limitation the use of Assigned Compounds in any compound
screening libraries and VERTEX internal toxicity and DMPK databases that VERTEX
maintains.

 

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2.3.     Licensed Know-How. Subject to the terms and conditions of this
Agreement, VERTEX hereby grants to TREKtx, and TREKtx hereby accepts, a non-
exclusive, royalty-bearing, revocable (as set forth in Section 7.2),
sublicenseable (solely as set forth in Section 2.5), nontransferable (except to
the extent this Agreement is assigned by TREKtx in accordance with Section 12.2)
license, under the Licensed Know- How to Research, Develop, Manufacture, have
Manufactured, use, keep, sell, offer for sale, import, export and Commercialize
the Assigned Compounds and Products in the Field of Use in the Territory during
the Term. Notwithstanding the license granted to TREKtx under this Section 2.3,
VERTEX shall not be obligated to provide TREKtx with access to, or copies or
physical embodiments of, any Licensed Know-How.

 

2.4.     Field of Use. In no event shall TREKtx (or its Affiliates or Licensees)
use the Assigned Compounds, Licensed Know-How, Assigned Know-How, Assigned
Patents, or any other materials or information provided hereunder for purposes
of or relating to research, development, commercialization, manufacturing of
products for use, or any other activities outside of the field of
anti-infectives and anti-virals and the diagnosis, treatment, or prevention
thereof (collectively, the “Field of Use”).

 

2.5.     Licensing; Sublicensing.

 

 

2.5.1

TREKtx shall have the right to assign or grant licenses or sublicenses (through
multiple tiers) under, as the case may be, to its Affiliates and any Third Party
(each, a “Licensee” and collectively, the “Licensees”) the rights assigned to
TREKtx pursuant to Section 2.1 hereof, without the prior written consent of
VERTEX; provided that (i) the terms of any assignment, license or sublicense by
TREKtx or a Licensee shall be in a written agreement and consistent with the
terms of this Agreement, (ii) TREKtx’s grant of any assignment, license or
sublicense shall not relieve TREKtx from any of its obligations under this
Agreement, and (iii) TREKtx shall remain responsible for its Licensees’
performance under this Agreement including payment of Milestone Payments and
royalties for Products by such Licensee.

 

 

2.5.2

TREKtx shall have the right to grant licenses or sublicenses to a Licensee under
the rights licensed to TREKtx under Section 2.3 (but may not assign such rights
other than as set forth in Section 12.2), provided such license or sublicense is
granted in connection with a grant of rights under Section 2.5.1 and is granted
for use solely in connection with the Research, Development, Manufacturing or
Commercialization of the Assigned Compounds and Products and subject to TREKtx’s
compliance with Section 2.5.1(i) through (iii) above.

 

2.6       Transfer of Materials. VERTEX hereby transfers title and risk of loss
to the Materials to TREKtx in the quantities specified in Exhibit C. Within 60
days of the Effective Date, TREKtx will either (a) make arrangements with the
Third Party storing the Materials (the “Storage Facility”) to ship the Materials
to TREKtx or (b) enter into an

 

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agreement directly with the Storage Facility to continue storing the Materials
at TREKtx’s expense. VERTEX will notify the Storage Facility of the transfer of
the Materials to TREKtx as needed to facilitate the shipment of the Materials to
TREKtx or the continued storage of the Materials by the Storage Facility at
TREKtx’s expense and will execute all transfer letters or other documentation
necessary in connection therewith. Notwithstanding anything contained herein, if
TREKtx does not notify VERTEX of its election to either ship or continue storing
such Materials with the Storage Facility within 60 days after the Effective Date
pursuant to this Section 2.6, such Materials will be deemed to be rejected by
TREKtx and VERTEX may destroy the Materials. Except as expressly set forth
herein, TREKtx will be solely responsible for all Manufacturing and supply of
the Assigned Compounds (including without limitation for all costs and expenses
associated therewith). In the event that TREKtx elects to ship or continue
storing such Materials pursuant to this Section 2.6, with respect to any such
Materials that are drug substances or drug products that were previously
certified as to their suitability for clinical purposes, TREKtx will be
permitted, at its expense, to retest and have recertified, any such Materials,
as suitable for human clinical purposes. With respect to any Materials stored by
a Storage Facility in any countries or jurisdictions outside of the United
States, TREKtx will be responsible for obtaining, completing and presenting to
the applicable government authority all export documentation, fees and licenses
required to ship such Materials. NOTWITHSTANDING ANYTHING CONTAINED HEREIN, THE
MATERIALS ARE PROVIDED “AS-IS” AND VERTEX MAKES NO REPRESENTATIONS OR WARRANTIES
OF ANY KIND, EITHER EXPRESSED OR IMPLIED, REGARDING THE MATERIALS, INCLUDING ANY
WARRANTY OF MERCHANTABILITY, TITLE, INFRINGEMENT, OR FITNESS FOR A PARTICULAR
PURPOSE.

 

Article 3.     Performance Obligations.

 

3.1.     Regulatory Approvals. As between the Parties, TREKtx shall be
responsible for obtaining all necessary regulatory approvals, including
Marketing Authorization with respect to the Development and Commercialization of
the Assigned Compounds and Products.

 

3.2.     File/Knowledge Transfer. Following the Effective Date, VERTEX will
transfer copies of all Assigned Know-How in electronic format, if currently
available, or such other form as selected by VERTEX. VERTEX will use
commercially reasonable efforts to transfer such Assigned Know-How and
associated documents promptly. Notwithstanding the foregoing, VERTEX will not be
obligated to transfer any publically available information or documents pursuant
to this Section 3.2. VERTEX will provide TREKtx with no more than 30 hours of
transition support at no cost for activities related to the knowledge transfer
described in this Section 3.2. Notwithstanding anything contained herein, if any
of the information or documents transferred pursuant to this Section 3.2
inadvertently contains any information or documents relating to VERTEX’s drug
design, delivery, manufacturing or formulation technologies or know-how, or any
other technology or know-how that is related to or applicable to VERTEX’s
business in general or other programs, (i) TREKtx shall not use such information
and, upon discovery, shall promptly send such information or documents back to
VERTEX without retaining any copies thereof and (ii) for the avoidance of doubt,
such information and

 

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documents will be deemed VERTEX’s Confidential Information. TREKtx will promptly
reimburse VERTEX for all costs resulting from, or otherwise related to, VERTEX’s
transfer of Assigned Know-How as described in this Section 3.2, including any
costs associated with scanning relevant documents. As of the Effective Date,
such costs are estimated to be approximately $50,000. VERTEX shall invoice
TREKtx for the foregoing expenses as incurred and TREKtx shall pay all such
expenses within 30 days after TREKtx’s receipt of the applicable invoice. VERTEX
may hold copies of all Assigned Know-How as required to comply with applicable
law.

 

Article 4.     Consideration.

 

4.1.     Upfront Payment. In consideration of the rights granted to TREKtx in
the Assigned Patents hereunder, on the Effective Date, TREKtx shall pay VERTEX a
one- time, non-refundable, noncreditable upfront fee of $50,000 USD.

 

4.2.     Milestone Payments. In consideration of the rights granted to TREKtx in
the Assigned Know-How and Licensed Know-How hereunder, TREKtx will pay VERTEX
the milestone payments (each, a “Milestone Payment”) set forth in this Section

4.2 within 30 days after the occurrence of the corresponding milestone event
(each, a “Milestone Event”). Each Milestone Payment is payable only once,
regardless of the number of Products that achieve the relevant Milestone Event
or the number of times the same Product(s) achieve such Milestone Event.

 

Milestone

Number

Milestone Event

Milestone

Payment

1

Initiation of a Phase 2 Clinical Trial of a Product in a non-HCV Indication in
the Field of Use.

 

$1,000,000

2

Initiation of a Phase 3 Clinical Trial of a Product in a non-HCV Indication in
the Field of Use.

 

$5,000,000

3

First receipt of Marketing Authorization in any country for a Product in a
non-HCV Indication in the Field of Use.

 

$10,000,000

4

Second receipt of Marketing Authorization in any country for a Product in a
non-HCV Indication in the Field of Use.

 

$5,000,000

 

The Milestone Events numbered 1-4 as set forth above are intended to be
successive; if a Product is not required to undergo the event associated with
any such Milestone Event, such skipped Milestone Event will be deemed to have
been achieved upon (and payment of such milestone shall be due therefor) the
achievement by such Product of the next successive Milestone Event. Payment for
any such skipped Milestone Event that is owed in accordance with the provisions
of the foregoing sentence with

 

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respect to a given Product will be due concurrently with the payment for the
next successive Milestone Event by such Product.

 

4.3.     Running Royalties. In consideration of the rights granted to TREKtx in
the Assigned Know-How and Licensed Know-How hereunder, on a Product-by-Product
and country-by-country basis, during the Royalty Term, TREKtx shall pay VERTEX
royalties at a rate of 5% of the aggregate Net Sales of each Product sold by
TREKtx and any other Seller in the Territory. The obligation to pay royalties
will be imposed only once with respect to the same unit of a Product.

 

4.4.     Payments.

 

 

4.4.1

Reports; Timing and Method. During the Term, following the first sale of a
Product giving rise to Net Sales, TREKtx will deliver the following reports to
VERTEX: (a) within five Business Days after the end of each Calendar Quarter, a
flash report showing on a Product-by-Product and country-by-country basis,
estimated Net Sales in the Territory during the relevant Calendar Quarter and
royalties payable under this Agreement on account of those Net Sales; and (b)
within 30 calendar days after the end of each Calendar Quarter, a report to
VERTEX specifying on a Product- by-Product and country-by-country basis (i)
gross sales in the relevant Calendar Quarter, (ii) Net Sales in the relevant
Calendar Quarter, including an accounting of Permitted Deductions applied to
determine Net Sales; (iii) a summary of the exchange rate calculations used by
TREKtx, (iv) royalties payable on such Net Sales pursuant to this Agreement, and
(v) additional information related to the Net Sales as reasonably requested by
VERTEX from time to time. For the avoidance of doubt, the foregoing reports
shall clearly identify all Net Sales attributable to TREKtx as well as TREKtx’s
Affiliates and Licensees. TREKtx shall pay all royalty payments due hereunder
for each Calendar Quarter within 30 days of TREKtx’s delivery of the applicable
reports under this Section 4.4.1. All payments due to VERTEX under this
Agreement shall be made in U.S. dollars and be submitted via wire transfer of
immediately available funds to an account designated by VERTEX. Conversion of
any Net Sales made in a foreign currency to U.S. dollars shall be made at the
average conversion rate for the applicable Calendar Quarter existing in the
United States, as reported in the Wall Street Journal. Such payments shall be
without deduction of exchange, collection, or other charges, and specifically,
without deduction of withholding or similar taxes or other government-imposed
fees or taxes, except as expressly permitted in the definition of Net Sales.

 

 

4.4.2

Late Payments. Without limiting any remedy available to VERTEX hereunder,
payments made by TREKtx after the due date shall bear compound interest at the
rate of one and one-half percent

 

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per full month late (or, if lower, the highest rate allowed by applicable law).

 

 

4.4.3

Taxes; Withholding.

 

 

4.4.3.1

Each Party shall be solely responsible for the payment of all taxes imposed on
its share of income arising directly or indirectly from this Agreement.

 

 

4.4.3.2

To the extent TREKtx or any Seller is required to deduct and withhold taxes on
any payment to VERTEX under this Agreement, TREKtx shall pay the amounts of such
taxes (“Withheld Taxes”) to the proper governmental authority in a timely manner
and promptly transmit to VERTEX an official tax certificate or other evidence of
such withholding sufficient to enable VERTEX to claim such payment of Withheld
Taxes. Subject to the terms of this Section 4.4.3, the sum payable by TREKtx (in
respect of which such Withheld Taxes is required) shall be made to VERTEX after
deduction of the Withheld Taxes. VERTEX shall provide TREKtx any tax forms that
may be reasonably necessary in order for TREKtx to not withhold tax or to
withhold tax at a reduced rate under an applicable bilateral income tax treaty.
VERTEX shall use reasonable efforts to provide any such tax forms to TREKtx at
least 30 days prior to the due date for any payment for which VERTEX desires
that TREKtx apply a reduced withholding rate. Each Party shall provide the other
with reasonable assistance to enable the recovery, as permitted by applicable
law, of withholding taxes, value added taxes, or similar obligations resulting
from payments made under this Agreement, such recovery to be for the benefit of
the Party bearing such withholding tax or value added tax.

 

4.5     Retention of Records; Audit. TREKtx agrees to make and keep, and shall
require its Affiliates and Licensees to make and keep, full, accurate and
complete books and records (together with supporting documentation). Such
records shall contain sufficient detail to confirm the accuracy of any payments
required hereunder. Such records shall be retained for at least three years
following the end of the Calendar Year to which they relate. TREKtx agrees, if
VERTEX so desires during normal business hours and no more than once per
Calendar Year, that VERTEX, or its duly authorized agent, or independent
certified public accounting representative acting on VERTEX’s behalf (“Third
Party Auditor”) may conduct an audit in order to examine the foregoing books and
records described in this Section 4.5 and any other supporting documentation
reasonably necessary to verify the royalty reports submitted by TREKtx, at
TREKtx’s (or its Affiliates’ or Licensees’ as applicable) business premises or
at a place mutually agreed upon by TREKtx and VERTEX for the purpose of
verifying reports and payments hereunder. If a payment deficiency is determined
by VERTEX or its Third Party Auditor,

 

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TREKtx shall pay the deficiency outstanding within 30 days of receiving written
notice thereof. Such examination by VERTEX or its Third Party Auditor shall be
at VERTEX’s expense, except that, if such examination shows an underreporting or
underpayment in excess of five percent of the sums due to VERTEX as determined
by such audit, then TREKtx shall pay the reasonable out of pocket cost of such
audit or reimburse VERTEX for the reasonable expenses incurred by VERTEX in
connection with such audit. VERTEX will treat all information subject to review
under this Section 4.5 in accordance with the confidentiality obligations
described in this Agreement and will require its Third Party Auditor to enter
into a confidentiality agreement with VERTEX obligating such representative to
maintain all such financial information in confidence pursuant to such
confidentiality agreement.

 

4.6     Monetization Transaction. VERTEX may, at any time, monetize all or a
portion of the value of the payments to which it may be entitled to receive
under this Section 4 by assigning to a Third Party (a “Revenue Buyer”) the right
to receive such payments and other payments (a “Monetization Transaction”),
provided that VERTEX has put in place adequate and customary confidentiality
provisions at least as stringent as those applicable to VERTEX hereunder with
the Revenue Buyer. In the event of a Monetization Transaction, TREKtx shall make
such payments to the Revenue Buyer as directed by VERTEX and shall deliver
notices and provide reports directly to the Revenue Buyer as directed by VERTEX.

 

Article 5.     Representations and Warranties.

 

5.1.     Mutual Representations and Warranties. VERTEX and TREKtx each
represents and warrants to the other as of the Effective Date that: (i) such
Party (a) is a company duly organized, validly existing, and in good standing
under the laws of its jurisdiction of incorporation, (b) is duly qualified as a
corporation and in good standing under the laws of each jurisdiction where its
ownership or lease of property or the conduct of its business requires such
qualification, where the failure to be so qualified would have a material
adverse effect on its financial condition or its ability to perform its
obligations hereunder, (c) has the requisite corporate power and authority and
the legal right to conduct its business as now conducted, and (d) is in
compliance with its charter documents; (ii) the execution, delivery and
performance of this Agreement by such Party and all instruments and documents to
be delivered by such Party hereunder (a) are within the corporate power of such
Party, (b) have been duly authorized by all necessary or proper corporate
action, (c) do not conflict with any provision of the charter documents of such
Party, (d) will not, to such Party’s knowledge, violate any laws or regulation
or any order or decree of any court or governmental instrumentality; (e) will
not violate or conflict with any terms of any indenture, mortgage, deed of
trust, lease, agreement, or other instrument to which such Party is a party, or
by which such Party or any of its property is bound, which violation would have
a material adverse effect on its financial condition or on its ability to
perform its obligations hereunder; and (iii) this Agreement has been duly
executed and delivered by such Party and constitutes a legal, valid and binding
obligation of such Party, enforceable against such Party in accordance with its
terms, except as such enforceability may be limited by applicable insolvency and
other laws affecting creditors’ rights generally, or by the availability of
equitable remedies.

 

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5.2.     TREKtx Representations; Legal Compliance; Anti-Corruption Laws. TREKtx
warrants and represents that TREKtx, as well as all Persons performing services
for or on behalf of TREKtx or otherwise acting on its behalf (including, without
limitation, any Affiliate, agent, subcontractor, subsidiary, representative,
employee, shareholder, director or officer) (“Associated Persons”) will comply
with all applicable laws and regulations in connection with all work conducted
hereunder, including but not limited to (1) the United States Foreign Corrupt
Practices Act and other applicable anti- corruption and anti-bribery laws
(collectively, the “Anti-Corruption Laws”), (2) all applicable laws and
regulations relating to import and export, and (3) all applicable laws and
regulations relating to the development, testing, marketing, sale,
commercialization, and other exploitation of pharmaceuticals. Without limiting
the foregoing, (i) TREKtx shall not (and shall procure that each Associated
Person shall not) do, or omit to do, any act that will cause or lead VERTEX to
be in breach of Anti-Corruption Laws, and (ii) TREKtx represents and warrants
neither it, nor any Associated Person, offers, agrees or promises to give, or
authorizes the giving directly or indirectly, of any money or other thing of
value to anyone as an inducement or reward for favorable action or forbearance
from action or the exercise of influence (a) to any governmental official or
employee (including employees of government-owned and government-controlled
corporations or agencies), (b) to any political party, official of a political
party, or candidate, (c) to an intermediary for payment to any of the foregoing,
or (d) to any other Person or entity in a corrupt or improper effort to obtain
or retain business or any commercial advantage, such as receiving a permit or
license. TREKtx further warrants and represents that should it learn or have
reason to suspect any breach of its covenants in this Section 5.2, it will
immediately notify VERTEX.

 

5.3.     VERTEX Representations and Warranties. Subject to Section 2.1, VERTEX
hereby represents and warrants that, as of the Effective Date , VERTEX, to its
knowledge, has not previously assigned, transferred, conveyed or otherwise
encumbered its right, title and interest in and to the Assigned Patents in any
way that would prevent TREKtx or its Affiliates and subcontractors from
Researching, Developing or Commercializing the Assigned Compounds or Products as
set forth herein, or from exploiting its rights and licenses granted under
Article 2 above.

 

5.4.     Disclaimer. EXCEPT FOR THE EXPRESS WARRANTIES SET FORTH IN ARTICLE 5,
NEITHER VERTEX NOR TREKTX MAKES ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND,
EXPRESS OR IMPLIED, WITH RESPECT TO THE SUBJECT MATTER OF THIS AGREEMENT,
INCLUDING WITHOUT LIMITATION ANY WARRANTIES OF MERCHANTABILITY, TITLE, FITNESS
FOR A PARTICULAR PURPOSE, OR NONINFRINGEMENT, EACH OF WHICH ARE HEREBY EXPRESSLY
DISCLAIMED. WITHOUT LIMITING THE FOREGOING, EXCEPT FOR THE EXPRESS WARRANTY IN
SECTION 5.3, VERTEX MAKES NO WARRANTIES OR REPRESENTATIONS OF ANY KIND OR NATURE
WITH RESPECT TO THE PATENTABILITY OF THE ASSIGNED COMPOUNDS OR PRODUCTS OR
VALIDITY, SCOPE, OR ENFORCEABILITY OF THE ASSIGNED PATENTS OR ANY CLAIMS
THEREIN, OR THE PRACTICE, INCLUDING BUT NOT LIMITED TO FREEDOM TO OPERATE,
REGARDING ANY OF THE ASSIGNED COMPOUNDS OR PRODUCTS. EXCEPT AS EXPRESSLY SET
FORTH IN

 

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SECTION 5.3, ALL RIGHTS GRANTED TO TREKTX HEREUNDER ARE PROVIDED ON AN “AS IS”
BASIS.

 

Article 6.     Progress Reports.

 

6.1.     Progress Reports. TREKtx shall submit written annual progress reports
on its efforts to Develop and Commercialize the Assigned Compounds (“Progress
Reports”). The first Progress Report is due 12 months after the Effective Date,
and subsequent Progress Reports shall be made every 12 months thereafter.

 

6.2.     Confidential Treatment. VERTEX acknowledges and agrees that any reports
provided pursuant to Sections 4.4.1 or 6.1 shall constitute the Confidential
Information of TREKtx. Any information contained in such reports specifically
relating to the Licensed Know-How or other VERTEX Confidential Information shall
be the Confidential Information of VERTEX.

 

Article 7.     Term.

 

7.1.     Term. This Agreement shall commence on the Effective Date and shall
continue in effect until expiration of all royalty obligations under Article 4
(the “Term”).

 

7.2.     License Termination for Cease in Development. If TREKtx provides VERTEX
with notification of its intent to cease all Development hereunder, or if no
material Development or Commercialization occurs for a period of 12 consecutive
calendar months (other than for reason of delays a result of, or caused by,
regulatory authorities, and outside of the direct control of TREKtx), VERTEX may
terminate the license granted pursuant to Section 2.3 upon written notice to
TREKtx and TREKtx shall immediately cease all use of the Licensed-Know How
following its receipt of such notice.

 

7.3.     Surviving Provisions. The following Articles and Sections shall survive
expiration of this Agreement: 1, 2.1, 2.2, 2.4, 2.5.1, 3.1, 4 (to the extent any
amounts are due and payable at the time of expiration), 5.2, 5.4, 6.2, 7.3, 8,
9, 10, 11, and 12.

 

Article 8.     Confidentiality.

 

8.1.     Confidential Information. Each of TREKtx and VERTEX shall (and shall
cause their respective Affiliates and Licensees to) (a) keep all Confidential
Information received from the Disclosing Party confidential with the same degree
of care it maintains the confidentiality of its own Confidential Information;
(b) not publish, or allow to be published, and will not otherwise disclose, or
permit the disclosure of the Disclosing Party’s Confidential Information in any
manner not expressly authorized pursuant to the terms of this Agreement; and (c)
not use, or permit to be used, the Disclosing Party’s Confidential Information
for any purpose other than as expressly authorized pursuant to the terms of this
Agreement. No disclosure of the Disclosing Party’s Confidential Information
shall be made by the Receiving Party to its employees, directors, officers,
agents and other Persons unless and until such employees, directors, officers,
agents, contractors and other Persons have agreed in writing to comply with
confidentiality and non-use obligations substantially similar to those described
herein. Upon termination of

 

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this Agreement, the Receiving Party shall return or destroy, at the Disclosing
Party’s request, all documents, tapes or other media containing Confidential
Information of the Disclosing Party that remain in the Receiving Party’s, its
agents’ or contractors’ possession, except that the Receiving Party may keep one
copy of the Confidential Information in the legal department files of the
Receiving Party, solely for archival purposes and neither the Receiving Party,
nor any of its agents, contractors or other representatives shall be required to
delete or destroy any electronic back-up tapes or other electronic back-up files
that have been created solely by the automatic or routine archiving and back-up
procedures of the Receiving Party or its representatives, to the extent created
and retained in a manner consistent with its or their standard archiving and
back-up procedures. Such archival copies shall be deemed to be the property of
the Disclosing Party, and shall continue to be subject to the provisions of this
Article 8 notwithstanding any expiration of this Agreement or otherwise. Each
Party will be liable for breach of this Article 8 by any of its agents,
Affiliates, Licensees, subcontractors, or its Affiliates’ sublicensees and
subcontractors.

 

8.2.     Permitted Disclosure and Use. Notwithstanding Section 8.1, a Party may
disclose Confidential Information belonging to the other Party only to the
extent such disclosure is reasonably necessary to: (a) obtain Marketing
Authorization of the Product or any other necessary permissions, approvals and
other documents issued by governmental authorities, provided that all such
disclosures pursuant to this subsection 8.2(a) are covered by terms of
confidentiality and non-use substantially similar to those set forth herein; (b)
enforce the provisions of this Agreement; or (c) comply with any applicable law
or regulation (including the rules and regulations promulgated by the United
States Securities and Exchange Commission or any equivalent governmental agency
in any country in the Territory), provided that such Party will, to the extent
reasonably practical, submit to the other Party the proposed disclosure at least
30 calendar days in advance of the proposed disclosure and shall reasonably
consider the comments of the other Party regarding confidential treatment sought
for such disclosure. If a Party deems it necessary to disclose Confidential
Information of the other Party pursuant to this Section 8.2, such Party shall
give reasonable advance notice of such intended disclosure to the other Party to
permit such other Party sufficient opportunity to object to such disclosure or
to take measures to ensure confidential treatment of such information. The
Receiving Party will cooperate reasonably with the Disclosing Party’s efforts to
protect the confidentiality of the information. Further, notwithstanding Section
8.1, VERTEX may disclose TREKtx’s Confidential Information to a Revenue Buyer or
a bona fide potential Revenue Buyer as reasonably necessary in connection with a
Monetization Transaction or proposed Monetization Transaction, including a copy
of this Agreement and information related to the Milestone Payments and
royalties payable by TREKtx to VERTEX such as financial reports indicating the
amounts that are the subject of the Monetization Transaction, audit reports
related to such amounts, if any, and notices and other correspondence provided
under or relating to the subject matter of this Agreement, that are relevant to
the Monetization Transaction, provided further that, each recipient of such
Confidential Information shall be under an obligation of confidentiality no less
protective than the terms of this Agreement.

 

8.3.     Publications. Each Party shall have the right to publish and to make
scientific presentations with respect to the Assigned Compounds and the
Products;

 

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provided that prior to publication, each Party shall give notice to the other
Party of any proposed publications and scientific presentations at least 21 days
prior to submission of any materials (including manuscripts or abstracts) to any
Third Party and upon written notice to the publishing Party, the other Party may
elect to review and comment on such proposed publications and the publishing
Party shall in good faith consider and reasonably incorporate any suggested
changes to any submission requested by the other Party that are for the purpose
of protecting such Party’s Confidential Information and/or preserving patent
rights. Neither Party shall be required to resubmit any previously approved
materials in the event of non-material edits and changes. General comments made
by a Party relating to the relationship between VERTEX and TREKtx established by
this Agreement, including, for example, general comments made in response to
inquiries at professional meetings and other similar circumstances, are not
intended to be restricted by the provisions of this Section 8.3, provided such
information has been disclosed to the public previously or cleared for such
disclosure by the other Party. Each Party shall comply with the other Party’s
request to delete references to its Confidential Information in any such
material and agrees to delay any submission for publication or other public
disclosure for a period of up to an additional 90 days for the purpose of
preparing and filing appropriate patent applications. Notwithstanding anything
contained herein, VERTEX shall retain the right to publish and to make
scientific presentations with respect to the Assigned Compounds, Assigned
Know-How, Licensed Know-How, and Assigned Patents to the extent that the
publication or presentation directly relates to research conducted by or on
behalf of VERTEX (i) prior to the Effective Date or (ii) outside the Field of
Use.

 

8.4.     Public Announcements. If requested by VERTEX, the Parties will issue an
initial press release regarding this Agreement in a form to be mutually agreed
upon by the Parties and on a date to be determined by VERTEX. Except as provided
in the prior sentence, neither Party shall issue any press release or public
announcement relating to the subject matter of this Agreement without the prior
written approval of the other Party, provided that, in no event shall any public
announcement made by TREKtx include any VERTEX Confidential Information.
Notwithstanding the foregoing, to the extent a public announcement relating to
the subject matter of this Agreement is required by applicable law, such
announcement shall be conducted in accordance with the procedure described in
Section 8.2(c) above and in a manner consistent with the terms of this
Agreement.

 

8.5.     Survival. The obligations and prohibitions contained in this Article 8
shall survive the expiration of this Agreement for a period of five years,
except with respect to Confidential Information which constitutes a trade secret
under applicable law, which shall survive for such additional period of time
during which such Confidential Information constitutes the Disclosing Party’s
trade secret under applicable law.

 

Article 9.     Additional Intellectual Property Matters.

 

TREKtx will be solely responsible for filing, prosecution, and maintenance of
all TREKtx Patents and the Assigned Patents, as well as all internal and
external costs and expenses associated therewith. VERTEX shall have no
responsibility or liability for, or relating to, the Assigned Patents. For the
avoidance of doubt, VERTEX shall retain sole ownership of and all intellectual
property rights in and to the Licensed Know-How and

 

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does not grant TREKtx any interest in such Licensed Know-How except as expressly
set forth in Section 2.3 of this Agreement.

 

Article 10.     Indemnification.

 

10.1.     Indemnification by TREKtx. TREKtx shall defend, indemnify and hold
harmless VERTEX and its Affiliates and each of their respective officers,
directors, stockholders, employees, agents, successors and assigns (“VERTEX
Indemnitees”) from and against all charges, complaints, actions, suits,
proceedings, hearings, investigations, claims and demands (“Claims”) of Third
Parties, and all associated damages and losses resulting therefrom (including
attorneys’ fees), to the extent arising out of (a) TREKtx’s negligence or
willful misconduct in its performance under this Agreement, (b) a breach by
TREKtx of any of its representations, warranties and covenants contained in
Article 5 or any material breach by TREKtx of its obligations under this
Agreement, or (c) Research, Development, Manufacturing, Commercialization, use,
licensing, handling, storage, marketing, sale, offer for sale, importation,
exportation, distribution or other disposition of, any Assigned Compound or
Product, including any product Covered by the Assigned Patents or incorporating
the Assigned Know-How, by TREKtx, its Affiliates, agents, or Licensees.
Notwithstanding the foregoing, TREKtx shall have no obligation under this
Agreement to indemnify, defend or hold harmless any VERTEX Indemnitees with
respect to any such Claims to the extent that they result from the negligence or
willful misconduct of VERTEX or a VERTEX Indemnitee or VERTEX’s breach of its
obligations under this Agreement.

 

10.2.     Indemnification by VERTEX. VERTEX shall defend, indemnify and hold
harmless TREKtx and its Affiliates and each of their officers, directors,
stockholders, employees, agents, successors and assigns (“TREKtx Indemnitees”)
from and against all Claims of Third Parties, and all associated damages and
losses resulting therefrom, to the extent arising out of any material breach by
VERTEX of its obligations under this Agreement. Notwithstanding the foregoing,
VERTEX shall have no obligation under this Agreement to indemnify, defend or
hold harmless any TREKtx Indemnitees with respect to any such Claims and losses
to the extent that they result from the negligence or willful misconduct of
TREKtx, a TREKtx Indemnitee or any of their respective employees, officers,
directors or agents or that they result from TREKtx’s breach of its obligations
under this Agreement. Notwithstanding anything to the contrary in this
Agreement, the indemnification provided in this Section 10.2 shall be TREKtx’s
sole and exclusive remedy, and VERTEX’s entire liability for, any and all
claims, Third Party or otherwise, arising out of or relating to this Agreement
or any of the rights granted herein.

 

10.3.     Conditions to Indemnification. The obligations of the indemnifying
Party under this Article 10 are conditioned upon the delivery of written notice
to the indemnifying Party of any Claim promptly after the indemnified Party
becomes aware of such Claim, provided that, the Parties acknowledge and agree
that failure of the indemnified Party to promptly notify the indemnifying Party
of a Claim shall not constitute a waiver of, or result in the loss of, the
indemnified Party’s right to indemnification under Section 10.1 and 10.2, except
to the extent that the indemnifying Party’s ability to defend against such Claim
is materially prejudiced by such failure to notify. The indemnifying Party shall
have the right to assume control of the defense

 

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and/or settlement of any such Claim, provided that the indemnifying Party shall
keep the indemnified Party reasonably informed of all material developments in
such defense. Notwithstanding the foregoing, the indemnified Party may
participate in the defense thereof at its sole cost and expense.

 

10.4.     Settlements. Except for settlements that would solely impose a
monetary obligation on the indemnifying Party and for which the indemnifying
Party will be fully responsible, the indemnifying Party shall not settle or
resolve a claim or action with respect to such a Claim without the prior written
consent of the indemnified Party, such consent not be unreasonably withheld. Any
payment made by a Party to settle any such claim or action shall be at its own
cost and expense.

 

Article 11. Limitation of Liability. EXCEPT FOR (I) A BREACH BY EITHER PARTY OF
ARTICLE 8 (CONFIDENTIALITY), (II) TREKTX’S INDEMNIFICATION OBLIGATIONS HEREUNDER
OR (III) EITHER PARTY’S FRAUD OR WILFUL MISCONDUCT, NEITHER PARTY WILL BE LIABLE
TO THE OTHER WITH RESPECT TO ANY SUBJECT MATTER OF THIS AGREEMENT FOR ANY
INDIRECT OR CONSEQUENTIAL DAMAGES, INCLUDING LOST PROFITS, LOSS OF GOODWILL,
PUNITIVE OR INCIDENTAL DAMAGES. VERTEX’S ENTIRE LIABILITY ARISING OUT OF OR
RELATING TO THIS AGREEMENT AND ANY SUBJECT MATTER REFERENCED HEREIN UNDER ANY
LEGAL OR EQUITABLE THEORY, INCLUDING CONTRACT, NEGLIGENCE, STRICT LIABILITY, OR
OTHERWISE SHALL NOT EXCEED $50,000 USD.

 

Article 12.     General Provisions

 

12.1.     Insurance. During the Term of this Agreement and for a period of two
years after the expiration of this Agreement, TREKtx shall obtain and/or
maintain at its sole cost and expense, liability insurance (including without
limitation product liability insurance) naming VERTEX as an additional insured
in amounts which are reasonable and customary in the Territory for companies who
are Developing, Marketing and Commercializing products and services similar to
Products. Such liability insurance shall insure against all liability, including
without limitation personal injury, physical injury, or property damage arising
out of the manufacture, sale, distribution, or marketing of the Product. TREKtx
shall provide written proof of the existence of such insurance to VERTEX upon
request.

 

12.2.     Assignment. This Agreement may not be assigned by either Party without
the prior written consent of the other Party; provided, however, that either
Party may assign this Agreement, in whole or in part, to any of its Affiliates
if such Party guarantees the performance of this Agreement by such Affiliate;
and provided further that either Party may assign this Agreement to a successor
to all or substantially all of the assets of such Party pertaining to this
Agreement whether by merger, acquisition, sale of stock, sale of assets or other
similar transaction. This Agreement shall be binding upon, and subject to the
terms of the foregoing sentence, inure to the benefit of the Parties hereto, and
their permitted successors, legal representatives and assigns.

 

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12.3.     Notices. All demands, notices, consents, approvals, reports, requests
and other communications hereunder must be in writing and will be deemed to have
been duly given only if delivered personally, by mail (first class, postage
prepaid, certified), or by overnight delivery using a globally recognized
carrier, to the Parties at the addresses set forth below or to such other
address as the addressee shall have last furnished in writing in accord with
this provision to the addressor. All notices shall be deemed effective (a) when
delivered if personally delivered on a Business Day (or if delivered or sent on
a non-Business Day, then on the next Business Day); or (b) on receipt if sent by
mail or overnight courier.

 

If to VERTEX:

 

Vertex Pharmaceuticals Incorporated

Attn: Business Development

50 Northern Avenue

Boston, Massachusetts 02210

 

With a copy to:

 

Vertex Pharmaceuticals Incorporated

Attn: Corporate Legal

50 Northern Avenue

Boston, Massachusetts 02210

 

If to TREKtx:

 

Trek Therapeutics, PBC

125 Cambridge Park Drive, Suite 301

Cambridge, Massachusetts 02140

 

12.4.     Severability. In the event of the invalidity of any provisions of this
Agreement, the Parties agree that such invalidity shall not affect the validity
of the remaining provisions of this Agreement. The Parties will replace an
invalid provision with valid provisions which most closely approximate the
purpose and economic effect of the invalid provision. Nothing in this Agreement
shall be interpreted so as to require either Party to violate any applicable
laws, rules or regulations.

 

12.5.     Headings. The headings used in this Agreement have been inserted for
convenience of reference only and do not define or limit the provisions hereof.

 

12.6.     Waiver. Any term or condition of this Agreement may be waived at any
time by the Party that is entitled to the benefit thereof, but no such waiver
shall be effective unless expressly set forth in a written instrument duly
executed by or on behalf of the Party waiving such term or condition. No
provision of this Agreement will be waived by any act, omission or knowledge of
a Party or its agents or employees except as expressly set forth in this
preceding sentence. No waiver by any Party of any term or condition of this
Agreement, in any one or more instances, shall be deemed to be or construed as a
waiver of the same or any other term or condition of this Agreement on

 

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any future occasion. Except as expressly set forth in this Agreement, all rights
and remedies available to a Party, whether under this Agreement or afforded by
law or otherwise, will be cumulative and not in the alternative to any other
rights or remedies that may be available to such Party.

 

12.7.     Entire Agreement. This Agreement (including the exhibits hereto)
constitutes the entire agreement between the Parties hereto with respect to the
within subject matter described herein and supersedes all previous agreements
and understandings between the Parties, whether written or oral, including the
Mutual Confidentiality Agreement between the Parties dated January 15, 2015.
This Agreement may be altered, amended or changed only by a writing making
specific reference to this Agreement and signed by duly authorized
representatives of VERTEX and TREKtx.

 

12.8.     No License. Nothing in this Agreement shall be deemed to constitute
the grant of any license or other right in either Party, to or in respect of the
Product, Assigned Compound, Patent, trademark, Confidential Information, trade
secret or other data or any other intellectual property of the other Party,
except as expressly set forth herein.

 

12.9.     Third Party Beneficiaries. None of the provisions of this Agreement
shall be for the benefit of or enforceable by any Third Party, including without
limitation any creditor of either Party hereto. No such Third Party shall obtain
any right under any provision of this Agreement or shall by reasons of any such
provision make any Claim in respect of any debt, liability or obligation (or
otherwise) against either Party hereto.

 

12.10.     Counterparts. This Agreement may be executed in any two counterparts,
each of which, when executed, shall be deemed to be an original and both of
which together shall constitute one and the same document.

 

12.11.     Language. This Agreement is written and executed in the English
language. Any translation into any other language shall not be an official
version of this Agreement. In the event of any conflict in interpretation
between the English language version of this Agreement and any other instrument
or document related to this Agreement or the business relationship between the
Parties contemplated hereby, the English language version of this Agreement
shall prevail.

 

12.12.     Section 365(n) of the Bankruptcy Code. All rights and licenses
granted under or pursuant to any section of this Agreement are, and shall
otherwise be deemed to be, for purposes of Section 365(n) of the U.S. Bankruptcy
Code, licenses of rights to “intellectual property” as defined under Section
101(35A) of the Bankruptcy Code. Each Party shall retain and may fully exercise
all of its rights and elections under the Bankruptcy Code or equivalent
legislation in any other jurisdiction. Upon the bankruptcy of either Party, the
other Party shall further be entitled to a complete duplicate of (or complete
access to, as appropriate) any such intellectual property for which a license
has been granted to such Party hereunder, and such, if not already in its
possession, shall be promptly delivered to such other Party, unless the Party in
bankruptcy elects to continue, and continues, to perform all of its obligations
under this Agreement.

 

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12.13.     Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of The Commonwealth of Massachusetts, excluding any
conflicts or choice of law rule or principle that might otherwise refer
construction or interpretation of this Agreement to the substantive law of
another jurisdiction.

 

12.14.     Trial by Jury. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES
ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER
BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE ACTIONS OF ANY PARTY HERETO IN NEGOTIATION, ADMINISTRATION,
PERFORMANCE OR ENFORCEMENT HEREOF.

 

12.15.     Equitable Relief. Notwithstanding the foregoing, nothing in this
Section 12 shall preclude either Party from seeking equitable relief in any
court of competent jurisdiction to enforce such Party’s intellectual property or
other proprietary rights (including any rights in Confidential Information).

 

12.16.     Independent Parties/Entities. The relationship of VERTEX and TREKtx
is that of independent parties and not as agents of each other, partners, or
participants in a joint venture. VERTEX and TREKtx shall each maintain sole and
exclusive control over their respective personnel and operations.

 

[Signature page to follow]

 

 

 

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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
by their authorized representatives as of the Effective Date.

 

 

  Trek Therapeutics, PBC Vertex Pharmaceuticals Incorporated             By: /s/
Ann Kwong By: /s/ David Altshuler, M.D., Ph.D.             Name: Ann Kwong Name:
David Altshuler, M.D., Ph.D.             Title: CEO

Title: Executive VP, Global Research &

         Chief Scientific Officer