Exhibit 10.1

 

Confidential Treatment Requested

Confidential portions of this document have been redacted and have been
separately filed with the Commission

 

 

LICENSE, DEVELOPMENT AND COMMERCIALIZATION AGREEMENT

 

 

between

 

Vertex Pharmaceuticals Incorporated

 

 

and

 

Mitsubishi Pharma Corporation

 

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Information redacted pursuant to a confidential treatment request.  An
unredacted version of this
exhibit has been filed separately with the Commission

 

TABLE OF CONTENTS

 

ARTICLE I — DEFINITIONS

1

 

 

 

ARTICLE II — LICENSE

9

 

 

 

2.1

Grant to MITSUBISHI

9

2.2

Competing Product

10

2.3

Grant to VERTEX

10

2.4

Transfer of Know-How

11

2.5

No Implied Rights

11

 

 

 

ARTICLE III — DEVELOPMENT

11

 

 

 

3.1

Joint Development Committee

11

3.2

Development Plans

13

3.3

Development Costs

15

3.4

[***]

16

3.5

Data Transfer

16

3.6

Regulatory Matters

18

3.7

Conduct of the Development Activities

19

3.8

Ownership of Technology

20

 

 

 

ARTICLE IV — MANUFACTURE AND SUPPLY

20

 

 

 

4.1

Supply of Bulk Drug Substance and Drug Product for Development

20

4.2

Supply of Bulk Drug Substance and Drug Product for Commercial Purposes

21

4.3

Limitation on Supply Obligation

21

4.4

Second Source of Supply for Bulk Drug Substance

22

4.5

Manufacturing Technology

22

4.6

Packaging

22

 

 

 

ARTICLE V — COMMERCIALIZATION

23

 

 

 

5.1

Global Marketing and Sales

23

5.2

Co-Labeling

23

5.3

Trademarks

23

5.4

Due Diligence

23

 

 

 

ARTICLE VI — PAYMENTS

24

 

 

 

6.1

License Fee

24

6.2

Milestone Payments by MITSUBISHI

24

6.3

Commercial Supply of Drug Product

26

6.4

Production of Bulk Drug Substance by MITSUBISHI

26

6.5

Royalties on Net Sales of Drug Product; Sales Reports

27

6.6

Withholding Tax

29

6.7

Currency of Payment

29

 

 

 

ARTICLE VII — TECHNOLOGY

30

 

 

 

7.1

Ownership

30

7.2

Patent Procurement and Maintenance

30

7.3

Costs

31

 

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Information redacted pursuant to a confidential treatment request.  An
unredacted version of this
exhibit has been filed separately with the Commission

 

7.4

Infringement Claims by Third Parties

32

7.5

Infringement Claims against Third Parties

33

7.6

Patent Term Extensions

34

 

 

 

ARTICLE VIII — REPRESENTATIONS AND WARRANTIES

34

 

 

 

8.1

Representations and Warranties of VERTEX

34

8.2

Representations and Warranties of MITSUBISH

35

 

 

 

ARTICLE IX — CONFIDENTIALITY

35

 

 

 

9.1

Undertaking

35

9.2

Exceptions

37

9.3

Publicity

37

9.4

Survival

38

 

 

 

ARTICLE X — DISPUTE RESOLUTION

38

 

 

 

10.1

Governing Law and Jurisdiction

38

10.2

Dispute Resolution Process

38

 

 

 

ARTICLE XI — TERM AND TERMINATION

39

 

 

 

11.1

Term

39

11.2

Termination for Cause

40

11.3

Termination for Bankruptcy

40

11.4

Termination by MITSUBISHI

40

11.5

Effect of Termination

41

 

 

 

ARTICLE XII — INDEMNIFICATION

42

 

 

 

12.1

Indemnification by VERTEX

42

12.2

Indemnification by MITSUBISHI

42

12.3

Claims Procedures

43

12.4

Limitation of Liability

44

12.5

Insurance

44

 

 

 

ARTICLE XIII — MISCELLANEOUS PROVISIONS

44

 

 

 

13.1

Waiver

44

13.2

Force Majeure

44

13.3

Registration of License

45

13.4

Severability

45

13.5

Government Acts

45

13.6

Government Approvals

45

13.7

Assignment; Successors and Assigns

46

13.8

Export Controls

46

13.9

Affiliates

46

13.10

Counterparts

47

13.11

No Agency

47

13.12

Notice

47

13.13

Headings

47

13.14

Entire Agreement

47

13.15

Rules of Construction

48

 

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Information redacted pursuant to a confidential treatment request.  An
unredacted version of this
exhibit has been filed separately with the Commission.

 

LICENSE, DEVELOPMENT AND COMMERCIALIZATION AGREEMENT

 

THIS LICENSE, DEVELOPMENT AND COMMERCIALIZATION AGREEMENT (the “Agreement”) is
made and entered into as of June 11, 2004 between VERTEX PHARMACEUTICALS
INCORPORATED (hereinafter “VERTEX”), a Massachusetts corporation with principal
offices at 130 Waverly Street, Cambridge, MA 02139-4242, and MITSUBISHI PHARMA
CORPORATION (hereinafter “MITSUBISHI”), a Japanese corporation with principal
offices at 6-9, Hiranomachi 2-Chome, Chuo-ku, Osaka 541-0046, Japan.  VERTEX and
MITSUBISHI are sometimes referred to herein individually as the “Party” and
collectively as the “Parties”.

 

INTRODUCTION

 

WHEREAS, VERTEX has an ongoing antiviral drug discovery and development program
targeting the hepatitis C virus (HCV) NS3 4A protease; and

 

WHEREAS, VERTEX’s discovery and development program has produced a clinical
candidate known as VX-950 that is currently in late preclinical development and
a back-up compound VX-905 (the “Compounds”); and

 

WHEREAS, MITSUBISHI wishes to obtain an exclusive license to develop and
commercialize the Compounds in Japan and certain Asian countries, and VERTEX is
willing to grant such a license, all on the terms and subject to the conditions
set forth herein; and

 

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

 

ARTICLE I — DEFINITIONS

 

1.1                                    “AFFILIATE” SHALL MEAN, WITH RESPECT TO
ANY PERSON, ANY OTHER PERSON WHICH CONTROLS, IS CONTROLLED BY, OR IS UNDER
DIRECT OR INDIRECT COMMON CONTROL WITH SUCH PERSON.  THE TERM “CONTROL” MEANS
THE POSSESSION, DIRECT OR INDIRECT, OF THE POWER TO DIRECT OR CAUSE THE
DIRECTION OF THE MANAGEMENT AND POLICIES OF A PERSON, WHETHER THROUGH THE
OWNERSHIP OF VOTING SECURITIES, BY CONTRACT OR OTHERWISE.  CONTROL WILL BE
PRESUMED IF ONE PERSON OWNS, EITHER OF RECORD OR BENEFICIALLY, MORE THAN FIFTY
PERCENT (50%) OF THE VOTING STOCK OF ANY OTHER PERSON.

 

1.2                                    “ALLOCABLE OVERHEAD” SHALL MEAN COSTS
INCURRED BY A PARTY OR FOR ITS ACCOUNT WHICH ARE ATTRIBUTABLE TO A PARTY’S COSTS
OF SUPERVISORY SERVICES, OCCUPANCY, PAYROLL, INFORMATION

 

License, Development and Commercialization Agreement —Confidential

 

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Information redacted pursuant to a confidential treatment request.  An
unredacted version of this
exhibit has been filed separately with the Commission.

 

SYSTEMS, HUMAN RESOURCES AND PURCHASING, AS ALLOCATED TO COMPANY DEPARTMENTS
BASED ON SPACE OCCUPIED, HEADCOUNT OR ACTIVITY-BASED METHODS, IN ALL CASES AS
DETERMINED BY SUCH PARTY IN ACCORDANCE WITH ITS ACCOUNTING STANDARDS, INCLUDING
INTERNATIONAL ACCOUNTING STANDARDS (IAS) AND GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES (GAAP), APPLIED ON A CONSISTENT BASIS.  WITHOUT LIMITATION, ALLOCABLE
OVERHEAD SHALL NOT INCLUDE THE COSTS OF GENERAL CORPORATE ACTIVITIES INCLUDING,
BY WAY OF EXAMPLE, EXECUTIVE MANAGEMENT, INVESTOR RELATIONS, BUSINESS
DEVELOPMENT, LEGAL AND FINANCE.

 

1.3                                    “BULK DRUG SUBSTANCE” SHALL MEAN A
COMPOUND IN BULK CRYSTAL, POWDER, SOLUTION OR OTHER FORM SUITABLE FOR
INCORPORATION IN A DRUG PRODUCT, WHICH IF REQUIRED IN ORDER TO STABILIZE THE
COMPOUND SHALL BE FORMULATED WITH STABILIZING EXCIPIENTS.

 

1.4                                    “COMBINATION THERAPY” SHALL MEAN A
THERAPY IN WHICH FOR FULL TREATMENT EFFICACY A DRUG PRODUCT IS CLINICALLY AND
REGULATORILY REQUIRED TO BE USED TOGETHER WITH ONE OR MORE OTHER ANTI-HEPATITIS
C VIRUS (HCV) AGENTS, SUCH AS INTERFERON PRODUCTS.

 

1.5                                    “COMMERCIAL SUPPLY AGREEMENT” SHALL HAVE
THE MEANING SET FORTH IN SECTION 4.2 HEREOF.

 

1.6                                    “COMPETING PRODUCT” SHALL MEAN ANY
PHARMACEUTICAL PRODUCT IN FINISHED DOSAGE FORM THAT CONTAINS [***] (I) THAT
FALLS WITHIN ONE OR MORE OF THE CLAIMS OF THE PUBLISHED PATENT APPLICATIONS
[***] IN THE TERRITORY AS OF THE EFFECTIVE DATE, OR (II) THAT FALLS WITHIN ONE
OR MORE OF THE CLAIMS OF A PATENT APPLICATION FILED [***] HAVING THE PRIORITY
DATE OF [***].

 

1.7                                    “COMPLETION” WITH RESPECT TO A PHASE II
CLINICAL TRIAL OR A PHASE III CLINICAL TRIAL SHALL MEAN THE FINALIZATION OF THE
FINAL REPORT WITH RESPECT TO SUCH CLINICAL TRIAL.

 

1.8                                    “COMPOUND” SHALL MEAN EITHER OF VX-950 OR
VX-905.

 

1.9                                    “CONFIDENTIAL INFORMATION” SHALL HAVE THE
MEANING SET FORTH IN SECTION 9.1.

 

1.10                             “CONTROLLED” SHALL MEAN THE LEGAL AUTHORITY OR
RIGHT OF A PARTY TO GRANT A LICENSE OR SUBLICENSE OF INTELLECTUAL PROPERTY
RIGHTS TO ANOTHER PARTY, OR TO OTHERWISE DISCLOSE PROPRIETARY OR TRADE SECRET
INFORMATION TO SUCH OTHER PARTY, WITHOUT BREACHING THE TERMS OF ANY AGREEMENT
WITH A THIRD PARTY, MISAPPROPRIATING THE PROPRIETARY OR TRADE SECRET INFORMATION
OF A THIRD PARTY OR INCURRING ANY FINANCIAL OBLIGATION OR POTENTIAL FINANCIAL
OBLIGATION TO A THIRD PARTY.

 

1.11                             “CORE DEVELOPMENT ACTIVITIES” SHALL MEAN: 
[***]

 

1.12                             “CORE DEVELOPMENT PLAN” SHALL HAVE THE MEANING
SET FORTH IN SECTION 3.2.3

 

2

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Information redacted pursuant to a confidential treatment request.  An
unredacted version of this
exhibit has been filed separately with the Commission.

 

HEREOF.

 

1.13                             “CORE DEVELOPMENT COSTS” SHALL MEAN [***]

 

1.14                             “DEVELOPMENT SUPPLY AGREEMENT” SHALL HAVE THE
MEANING SET FORTH IN SECTION 4.1 HEREOF.

 

1.15                             “DRUG PRODUCT” SHALL MEAN A COMPOUND IN
FINISHED DOSAGE FORM THAT IS PREPARED FROM BULK DRUG SUBSTANCE AND IS READY FOR
ADMINISTRATION TO THE ULTIMATE CONSUMER AS A PHARMACEUTICAL PRODUCT.

 

1.16                             “EFFECTIVE DATE” SHALL MEAN THE EFFECTIVE DATE
OF THIS AGREEMENT AS SET FORTH ON THE FIRST PAGE HEREOF.

 

1.17                             “FDA” SHALL MEAN THE UNITED STATES FOOD AND
DRUG ADMINISTRATION.

 

1.18                             “FIELD OF USE” SHALL MEAN THE TREATMENT OF ANY
HUMAN CONDITION, DISORDER OR DISEASE.

 

1.19                             “FIRST COMMERCIAL SALE” SHALL MEAN THE FIRST
SALE OF A DRUG PRODUCT BY MITSUBISHI OR AN AFFILIATE OR SUBLICENSEE OF
MITSUBISHI IN A COUNTRY IN THE TERRITORY FOLLOWING REGULATORY APPROVAL OF THE
DRUG PRODUCT IN THAT COUNTRY, OR IF NO SUCH REGULATORY APPROVAL OR SIMILAR
MARKETING APPROVAL IS REQUIRED, THE DATE UPON WHICH THE DRUG PRODUCT IS FIRST
SOLD IN SUCH COUNTRY BY MITSUBISHI OR AN AFFILIATE OR SUBLICENSEE OF MITSUBISHI
PURSUANT TO A PLAN OF COMMERCIAL LAUNCH.

 

1.20                             “IND” SHALL MEAN THE INVESTIGATIONAL NEW DRUG
APPLICATION RELATING TO THE DRUG PRODUCT FILED WITH THE FDA PURSUANT TO 21
C.F.R. PART 312, INCLUDING ANY AMENDMENTS THERETO, AND EQUIVALENT APPLICATIONS
WITH SIMILAR REQUIREMENTS IN COUNTRIES OTHER THAN THE UNITED STATES.

 

1.21                             “INDICATION” SHALL MEAN A GENERALLY
ACKNOWLEDGED DISEASE, DISORDER OR CONDITION, A SIGNIFICANT MANIFESTATION OF A
DISEASE, DISORDER OR CONDITION, OR A SYMPTOM ASSOCIATED WITH A DISEASE, DISORDER
OR CONDITION FOR WHICH USE OF A DRUG PRODUCT IS INDICATED, AS WOULD BE
IDENTIFIED IN THE DRUG PRODUCT’S LABEL UNDER APPLICABLE REGULATIONS OF A
REGULATORY AUTHORITY.

 

1.22                             “INFRINGEMENT CLAIM” SHALL HAVE THE MEANING SET
FORTH IN SECTION 7.4.1 HEREOF.

 

1.23                             “INVESTIGATIONAL DRUG PRODUCT” SHALL HAVE THE
MEANING SET FORTH IN SECTION 4.1 HEREOF.

 

1.24                             “JDC” SHALL HAVE THE MEANING SET FORTH IN
SECTION 3.1 HEREOF.

 

3

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Information redacted pursuant to a confidential treatment request.  An
unredacted version of this
exhibit has been filed separately with the Commission.

 

1.25                             “JOINT KNOW-HOW” SHALL HAVE THE MEANING SET
FORTH IN SECTION 7.1 HEREOF.

 

1.26                             “JOINT PATENTS” SHALL HAVE THE MEANING SET
FORTH IN SECTION 7.1 HEREOF.

 

1.27                             “JOINT STEERING COMMITTEE” SHALL HAVE THE
MEANING SET FORTH IN SECTION 10.2.1 HEREOF.

 

1.28                             “KNOW-HOW” SHALL MEAN ALL DATA, TECHNICAL
INFORMATION, KNOW-HOW, INVENTIONS, DISCOVERIES, TRADE SECRETS, PROCESSES,
TECHNIQUES, MATERIALS, COMPOSITIONS, METHODS, FORMULAS OR IMPROVEMENTS THAT
RELATE TO THE RESEARCH, DEVELOPMENT, MANUFACTURE, USE, SALE, OFFER FOR SALE OR
IMPORT OF ANY BULK DRUG SUBSTANCE, COMPOUND, OR DRUG PRODUCT; PROVIDED, HOWEVER,
THAT THE TERM “KNOW-HOW” SHALL NOT INCLUDE VERTEX’S PROPRIETARY AND CONFIDENTIAL
DRUG DISCOVERY PLATFORM OR TECHNIQUES.

 

1.29                             “MANUFACTURING COST” SHALL MEAN THE TOTAL OF
ALL COSTS INCURRED BY OR ON BEHALF OF VERTEX RELATED TO THE MANUFACTURE OF A
BATCH OR LOT OF BULK DRUG SUBSTANCE, COMPOUND, DRUG PRODUCT, INVESTIGATIONAL
DRUG PRODUCT OR PLACEBO, INCLUDING DIRECT MATERIAL AND LABOR, QUALITY
ASSURANCE/QUALITY CONTROL AND ANALYTICAL COSTS, DEPRECIATION, AS WELL AS
APPLICABLE ALLOCABLE OVERHEAD AND THIRD-PARTY COSTS RELATING TO MANUFACTURING,
SHIPPING AND HANDLING, DUTY, AND INSURANCE.

 

1.30                             “MITSUBISHI DEVELOPMENT ACTIVITIES” SHALL MEAN
ALL NON-CLINICAL AND CLINICAL ACTIVITIES PERFORMED BY OR ON BEHALF OF MITSUBISHI
OR ITS SUBLICENSEES IN THE TERRITORY WITH RESPECT TO BULK DRUG SUBSTANCE, A
COMPOUND AND/OR DRUG PRODUCT, INCLUDING NON-CLINICAL STUDIES, CLINICAL TRIALS,
FORMULATION RESEARCH, FORMULATION DEVELOPMENT, PROCESS RESEARCH, PROCESS
DEVELOPMENT, MANUFACTURING SCALE-UP, ANALYTICAL METHOD DEVELOPMENT AND
VALIDATION, AND REGULATORY ACTIVITIES, IN ORDER TO OBTAIN REGULATORY APPROVAL
FROM A REGULATORY AUTHORITY FOR MARKETING THE CORRESPONDING DRUG PRODUCT IN THE
TERRITORY FOR THE INDICATIONS SELECTED.

 

1.31                             “MITSUBISHI DEVELOPMENT PLAN” SHALL HAVE THE
MEANING SET FORTH IN SECTION 3.2.1 HEREOF.

 

1.32                             “MITSUBISHI KNOW-HOW” SHALL MEAN ALL KNOW-HOW
CONTROLLED BY MITSUBISHI OR ANY OF ITS AFFILIATES, INCLUDING ANY SUCH KNOW-HOW
INVENTED, DISCOVERED OR DEVELOPED IN THE CONDUCT OF THE MITSUBISHI DEVELOPMENT
ACTIVITIES.

 

1.33                             “MITSUBISHI PATENTS” SHALL MEAN ALL PATENTS
CONTROLLED BY MITSUBISHI OR ANY OF ITS AFFILIATES CLAIMING BULK DRUG SUBSTANCE,
A COMPOUND OR A DRUG PRODUCT, OR A METHOD OF MAKING OR USING BULK DRUG
SUBSTANCE, A COMPOUND OR A DRUG PRODUCT, OR AN IMPROVEMENT

 

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Information redacted pursuant to a confidential treatment request.  An
unredacted version of this
exhibit has been filed separately with the Commission.

 

TO THE SUBJECT MATTER OF A PATENT COVERING ANY OF THE FOREGOING THAT WOULD BE
INFRINGED BY THE RESEARCH, DEVELOPMENT, MANUFACTURE, USE, SALE, OFFER FOR SALE
OR IMPORT OF BULK DRUG SUBSTANCE, COMPOUND(S) OR DRUG PRODUCT.  AS OF THE
EFFECTIVE DATE, NO MITSUBISHI PATENTS EXIST.  SCHEDULE 1.33 HERETO WILL BE
UPDATED PERIODICALLY TO REFLECT ADDITIONS THERETO DURING THE TERM OF THIS
AGREEMENT.

 

1.34                             “MITSUBISHI TECHNOLOGY” SHALL MEAN ALL
MITSUBISHI PATENTS AND ALL MITSUBISHI KNOW-HOW.

 

1.35                             “MONOTHERAPY” SHALL MEAN A THERAPY IN WHICH THE
DRUG PRODUCT IS USED AS A SOLE ANTI-HEPATITIS C VIRUS (HCV) AGENT.

 

1.36                             “NET SALES” SHALL MEAN THE AGGREGATE AMOUNT
OBTAINED BY TOTALING FOR ALL COUNTRIES IN THE TERRITORY WHERE DRUG PRODUCTS WERE
SOLD IN A GIVEN CALENDAR QUARTER THE NET SALES PRICE OR PRICES IN SUCH COUNTRY
MULTIPLIED BY THE TOTAL NUMBER OF UNITS OF DRUG PRODUCTS SOLD IN SUCH COUNTRY AT
SUCH NET SALES PRICE OR PRICES.

 

1.37                             “NET SALES PRICE” WITH RESPECT TO A DRUG
PRODUCT SHALL MEAN THE GROSS AMOUNT INVOICED IN A GIVEN CALENDAR QUARTER IN A
GIVEN COUNTRY FOR SUCH UNIT OF THE DRUG PRODUCT SOLD TO THIRD PARTIES IN BONA
FIDE, ARMS-LENGTH TRANSACTIONS BY MITSUBISHI AND ANY MITSUBISHI AFFILIATE OR ITS
SUBLICENSEE, LESS (I) TRADE, QUANTITY AND/OR CASH DISCOUNTS FROM THE INVOICE
PRICE WHICH ARE ACTUALLY ALLOWED OR TAKEN; (II) FREIGHT, POSTAGE AND INSURANCE
INCLUDED IN THE INVOICE PRICE; (III) AMOUNTS REPAID OR CREDITED BY REASON OF
REJECTION OR RETURN OF GOODS OR BECAUSE OF RETROACTIVE PRICE REDUCTIONS
SPECIFICALLY IDENTIFIABLE TO THE DRUG PRODUCT; (IV) AMOUNTS PAYABLE RESULTING
FROM GOVERNMENTAL (OR AGENCY THEREOF) MANDATED REBATE PROGRAMS; (V) THIRD-PARTY
REBATES TO THE EXTENT ACTUALLY ALLOWED; (VI) INVOICED CUSTOM DUTIES AND SALES
AND USE TAXES (EXCLUDING INCOME TAXES), IF ANY, ACTUALLY PAID AND DIRECTLY
RELATED TO THE SALE; AND (VII) ANY OTHER SPECIFICALLY IDENTIFIABLE AMOUNTS
INCLUDED IN THE DRUG PRODUCT’S INVOICE PRICE THAT SHOULD BE CREDITED FOR REASONS
SUBSTANTIALLY EQUIVALENT TO THOSE LISTED ABOVE; ALL AS DETERMINED IN ACCORDANCE
WITH MITSUBISHI’S USUAL AND CUSTOMARY ACCOUNTING METHODS, WHICH ARE IN
ACCORDANCE WITH THE JAPANESE EQUIVALENT OF GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES IN THE UNITED STATES (GAAP), CONSISTENTLY APPLIED.

 

(A)                                   IN THE CASE OF ANY SALE OR OTHER DISPOSAL
OF A DRUG PRODUCT BETWEEN OR AMONG MITSUBISHI AND ITS AFFILIATES AND
SUBLICENSEES FOR RESALE, THE NET SALES PRICE SHALL BE CALCULATED AS ABOVE ONLY
ON THE VALUE CHARGED OR INVOICED ON THE FIRST ARM’S-LENGTH SALE THEREAFTER TO A
THIRD PARTY;

 

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Information redacted pursuant to a confidential treatment request.  An
unredacted version of this
exhibit has been filed separately with the Commission.

 

(B)                                   IN THE CASE OF ANY SALE OR OTHER DISPOSAL
FOR VALUE, SUCH AS BARTER OR COUNTER-TRADE, OF A DRUG PRODUCT, OR PART THEREOF,
OTHER THAN IN AN ARM’S-LENGTH TRANSACTION EXCLUSIVELY FOR MONEY, THE NET SALES
PRICE SHALL BE CALCULATED AS ABOVE ON THE HIGHER OF (I) THE VALUE OF THE
CONSIDERATION RECEIVED FOR, OR (II) THE FAIR MARKET PRICE OF, THE DRUG PRODUCT
IN THE COUNTRY OF SALE OR DISPOSAL;

 

(C)                                   IF A DRUG PRODUCT IS SOLD IN A FINISHED
DOSAGE FORM CONTAINING THE DRUG PRODUCT IN COMBINATION WITH ONE OR MORE OTHER
ACTIVE INGREDIENTS (A “COMBINATION PRODUCT”), THE NET SALES PRICE OF THE DRUG
PRODUCT, FOR THE PURPOSES OF DETERMINING PAYMENTS HEREUNDER, SHALL BE DETERMINED
BY MULTIPLYING THE NET SALES PRICE (AS DEFINED ABOVE IN THIS SECTION) OF THE
COMBINATION PRODUCT BY [***]; AND

 

(d)                                   In the case of any sale which is not
invoiced, the Net Sales Price shall be calculated at the time of shipment or
when the Drug Product is paid for, if paid for before shipment, based on the
gross purchase price.

 

1.38                             “PATENTS” SHALL MEAN ALL EXISTING JAPANESE AND
U.S. PATENTS AND PATENT APPLICATIONS; ALL PATENT APPLICATIONS HEREAFTER FILED IN
JAPAN OR THE UNITED STATES, INCLUDING ANY CONTINUATION, CONTINUATION-IN-PART,
DIVISION, PROVISIONAL OR ANY SUBSTITUTE APPLICATIONS; ANY PATENT ISSUED WITH
RESPECT TO ANY SUCH PATENT APPLICATIONS; ANY REISSUE, REEXAMINATION, RENEWAL OR
EXTENSION (INCLUDING ANY PATENT TERM EXTENSION OR SUPPLEMENTARY PROTECTION
CERTIFICATE) OF ANY SUCH PATENT; AND ANY CONFIRMATION PATENT OR REGISTRATION
PATENT OR PATENT OF ADDITION BASED ON ANY SUCH PATENT; AND ALL FOREIGN
COUNTERPARTS OF ANY OF THE FOREGOING.

 

1.39                             “PERSON” SHALL MEAN ANY INDIVIDUAL,
CORPORATION, PARTNERSHIP, ASSOCIATION, JOINT-STOCK COMPANY, TRUST,
UNINCORPORATED ORGANIZATION OR GOVERNMENT OR POLITICAL SUBDIVISION THEREOF.

 

1.40                             “PHASE I CLINICAL TRIAL” SHALL MEAN AN INITIAL
HUMAN CLINICAL TRIAL CONDUCTED FOR INCLUSION IN (I) THAT PORTION OF THE FDA
SUBMISSION AND APPROVAL PROCESS WHICH PROVIDES FOR INITIAL TRIALS OF A COMPOUND
IN A SMALL NUMBER OF SUBJECTS TO ESTABLISH THE SAFETY PROFILE OF THE COMPOUND
AND TO COLLECT INITIAL DATA ON ITS PHARMACOKINETICS AND PHARMACOLOGICAL EFFECTS,
AS MORE FULLY DEFINED IN 21 C.F.R. § 312.21(A), AND (II) EQUIVALENT SUBMISSIONS
WITH SIMILAR REQUIREMENTS IN COUNTRIES OTHER THAN THE UNITED STATES.

 

1.41                             “PHASE IB CLINICAL TRIAL” SHALL MEAN AN INITIAL
REPEATED DOSE, DOSE ESCALATION PHASE I CLINICAL TRIAL CONDUCTED IN A SMALL
NUMBER OF PATIENTS INFECTED WITH THE HEPATITIS C VIRUS (HCV) TO ESTABLISH THE
SAFETY PROFILE OF THE COMPOUND AND TO COLLECT ADDITIONAL DATA ON ITS
PHARMACOKINETICS AND PHARMACOLOGICAL EFFECTS, INCLUDING ANTIVIRAL ACTIVITY.

 

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Information redacted pursuant to a confidential treatment request.  An
unredacted version of this
exhibit has been filed separately with the Commission.

 

1.42                             “PHASE II CLINICAL TRIAL” SHALL MEAN A HUMAN
CLINICAL TRIAL CONDUCTED FOR INCLUSION IN (I) THAT PORTION OF THE FDA SUBMISSION
AND APPROVAL PROCESS WHICH PROVIDES FOR TRIALS OF A COMPOUND ON A LIMITED NUMBER
OF PATIENTS FOR THE PURPOSES OF COLLECTING DATA ON DOSAGES, EVALUATING SAFETY
AND COLLECTING PRELIMINARY INFORMATION REGARDING EFFICACY IN THE PROPOSED
THERAPEUTIC INDICATION, AS MORE FULLY DEFINED IN 21 C.F.R. §312.21(B), AND
(II) EQUIVALENT SUBMISSIONS WITH SIMILAR REQUIREMENTS IN COUNTRIES OTHER THAN
THE UNITED STATES.

 

1.43                             “PHASE IIA CLINICAL TRIAL” SHALL MEAN AN
INITIAL PHASE II CLINICAL TRIAL IN ANY THERAPEUTIC INDICATION THAT IS DESIGNED
TO EVALUATE SAFETY AND TO DEMONSTRATE A MEANINGFUL TREND OF EFFICACY IN PATIENTS
WHO HAVE THE DISEASE OR CONDITION THAT THE COMPOUND IS INTENDED TO TREAT.

 

1.44                        “PHASE IIB CLINICAL TRIAL” SHALL MEAN A PHASE II
CLINICAL TRIAL IN ANY THERAPEUTIC INDICATION THAT IS DESIGNED TO DETERMINE THE
DOSES TO BE USED IN THE PHASE III CLINICAL TRIALS AND TO EVALUATE THE
EFFICACY/SAFETY PROPERTIES OF THE COMPOUND.

 

1.45                             “PHASE III CLINICAL TRIAL” SHALL MEAN A HUMAN
CLINICAL TRIAL CONDUCTED FOR INCLUSION IN (I) THAT PORTION OF THE FDA SUBMISSION
AND APPROVAL PROCESS WHICH PROVIDES FOR THE CONTINUED TRIALS OF A COMPOUND ON
SUFFICIENT NUMBERS OF PATIENTS TO GENERATE SAFETY AND EFFICACY DATA TO SUPPORT
REGULATORY APPROVAL IN THE PROPOSED THERAPEUTIC INDICATION, AS MORE FULLY
DEFINED IN 21 C.F.R. § 312.21(C), AND (II) EQUIVALENT SUBMISSIONS WITH SIMILAR
REQUIREMENTS IN COUNTRIES OTHER THAN THE UNITED STATES.

 

1.46                             “REGULATORY APPROVAL” SHALL MEAN, WITH RESPECT
TO ANY COUNTRY, ALL AUTHORIZATIONS BY A REGULATORY AUTHORITY OR OTHER
APPROPRIATE GOVERNMENTAL ENTITY OR ENTITIES NECESSARY FOR COMMERCIAL MARKETING
AND SALE OF A DRUG PRODUCT IN THAT COUNTRY INCLUDING, WHERE APPLICABLE, APPROVAL
OF LABELING, PRICE, REIMBURSEMENT AND MANUFACTURING.

 

1.47                             “REGULATORY AUTHORITY” SHALL MEAN (I) THE FDA
OR (II) ANY REGULATORY BODY WITH SIMILAR REGULATORY AUTHORITY IN ANY OTHER
JURISDICTION ANYWHERE IN THE WORLD.

 

1.48                             “START” SHALL MEAN THE FIRST DOSING OF THE
FIRST PATIENT WITH RESPECT TO A PHASE II CLINICAL TRIAL OR PHASE III CLINICAL
TRIAL, OR THE STARTING DATE SET FORTH IN THE FINAL PROTOCOL FOR THE APPLICABLE
STUDY WITH RESPECT TO NON-CLINICAL STUDIES.

 

1.49                             “TERRITORY” SHALL MEAN ALL COUNTRIES IDENTIFIED
ON SCHEDULE 1.49 HERETO.

 

1.50                             “THIRD PARTY” SHALL MEAN ANY PERSON THAT IS NOT
A PARTY OR AN AFFILIATE OF ANY PARTY.

 

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1.51                             “VALID PATENT CLAIM” SHALL MEAN EITHER (I) A
CLAIM OF AN ISSUED AND UNEXPIRED PATENT WHICH HAS NOT LAPSED, BEEN REVOKED OR
ABANDONED OR HELD PERMANENTLY UNENFORCEABLE OR INVALID BY A DECISION OF A COURT
OR OTHER GOVERNMENTAL AGENCY OF COMPETENT JURISDICTION, UNAPPEALABLE OR
UNAPPEALED WITHIN THE TIME ALLOWED FOR APPEAL, AND WHICH HAS NOT BEEN
DISCLAIMED, DENIED OR ADMITTED TO BE INVALID OR UNENFORCEABLE THROUGH REISSUE,
REEXAMINATION, DISCLAIMER OR OTHERWISE, OR (II) A CLAIM OF A PENDING PATENT
APPLICATION WHICH CLAIM WAS FILED IN GOOD FAITH AND HAS NOT BEEN ABANDONED OR
FINALLY DISALLOWED WITHOUT THE POSSIBILITY OF APPEAL OR REFILLING OF SAID
APPLICATION.

 

1.52                             “VERTEX DEVELOPMENT ACTIVITIES” SHALL MEAN ALL
NON-CLINICAL AND CLINICAL ACTIVITIES PERFORMED BY OR ON BEHALF OF VERTEX OR A
VERTEX LICENSEE IN THE VERTEX TERRITORY WITH RESPECT TO BULK DRUG SUBSTANCE, A
COMPOUND, AND/OR DRUG PRODUCT, INCLUDING NON-CLINICAL STUDIES, CLINICAL TRIALS,
FORMULATION RESEARCH, FORMULATION DEVELOPMENT, PROCESS RESEARCH, PROCESS
DEVELOPMENT, MANUFACTURING SCALE-UP, ANALYTICAL METHOD DEVELOPMENT AND
VALIDATION, AND REGULATORY ACTIVITIES, IN ORDER TO OBTAIN REGULATORY APPROVAL
FROM A REGULATORY AUTHORITY FOR MARKETING THE CORRESPONDING DRUG PRODUCT IN THE
VERTEX TERRITORY FOR THE INDICATIONS SELECTED.  FOR THE AVOIDANCE OF DOUBT, THE
CORE DEVELOPMENT ACTIVITIES SET FORTH IN SECTION 1.11 SHALL BE INCLUDED IN THE
VERTEX DEVELOPMENT ACTIVITIES.

 

1.53                             “VERTEX DEVELOPMENT PLAN” SHALL HAVE THE
MEANING SET FORTH IN SECTION 3.2.2 HEREOF.

 

1.54                             “VERTEX KNOW-HOW” SHALL MEAN ALL KNOW-HOW
CONTROLLED BY VERTEX OR ANY OF ITS AFFILIATES, INCLUDING ANY SUCH KNOW-HOW
INVENTED, DISCOVERED OR DEVELOPED IN THE CONDUCT OF THE VERTEX DEVELOPMENT
ACTIVITIES.

 

1.55                             “VERTEX LICENSEE” SHALL MEAN ANY PERSON OTHER
THAN MITSUBISHI TO WHICH VERTEX GRANTS A LICENSE UNDER THE VERTEX TECHNOLOGY.

 

1.56                             “VERTEX PATENTS” SHALL MEAN ALL PATENTS
CONTROLLED BY VERTEX OR ANY OF ITS AFFILIATES CLAIMING BULK DRUG SUBSTANCE, A
COMPOUND OR A DRUG PRODUCT, OR A METHOD OF MAKING OR USING BULK DRUG SUBSTANCE,
A COMPOUND OR A DRUG PRODUCT, OR AN IMPROVEMENT TO THE SUBJECT MATTER OF A
PATENT COVERING ANY OF THE FOREGOING THAT WOULD BE INFRINGED BY THE RESEARCH,
DEVELOPMENT, MANUFACTURE, USE, SALE, OFFER FOR SALE OR IMPORT OF BULK DRUG
SUBSTANCE, COMPOUND(S) OR DRUG PRODUCT.  A LIST OF VERTEX PATENTS IN THE
TERRITORY IS APPENDED HERETO AS SCHEDULE 1.56 AND WILL BE UPDATED PERIODICALLY
TO REFLECT ADDITIONS THERETO DURING THE TERM OF THIS AGREEMENT.  NOTWITHSTANDING
THE FOREGOING, ANY THIRD-PARTY PATENT UNDER WHICH VERTEX

 

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OBTAINS A LICENSE PURSUANT TO SECTION 7.4.2 HEREOF SHALL NOT BE DEEMED TO BE A
VERTEX PATENT.

 

1.57                             “VERTEX TECHNOLOGY” SHALL MEAN ALL VERTEX
PATENTS AND ALL VERTEX KNOW-HOW.

 

1.58                             “VERTEX TERRITORY” SHALL MEAN ALL COUNTRIES OF
THE WORLD EXCEPT FOR THE COUNTRIES OF THE TERRITORY.

 

1.59                             “VX-905” SHALL MEAN THE COMPOUND IDENTIFIED ON
SCHEDULE 1.59 HERETO.

 

1.60                             “VX-950” SHALL MEAN THE COMPOUND IDENTIFIED ON
SCHEDULE 1.60 HERETO.

 

ARTICLE II — LICENSE

 

2.1                                    GRANT TO MITSUBISHI.

 

2.1.1                      LICENSE.  SUBJECT TO THE OTHER PROVISIONS OF THIS
AGREEMENT, VERTEX HEREBY GRANTS TO MITSUBISHI AN EXCLUSIVE LICENSE (OR
SUBLICENSE, AS APPROPRIATE) IN THE TERRITORY UNDER THE VERTEX TECHNOLOGY, WITH
THE RIGHT TO SUBLICENSE, TO EXERCISE ITS RIGHTS AND FULFILL ITS OBLIGATIONS
UNDER THIS AGREEMENT AND TO DEVELOP, MANUFACTURE, HAVE MANUFACTURED, USE, SELL,
HAVE SOLD, OFFER TO SELL AND IMPORT DRUG PRODUCTS AND TO IMPORT BULK DRUG
SUBSTANCE AND USE BULK DRUG SUBSTANCE TO MANUFACTURE DRUG PRODUCTS, IN EACH CASE
SOLELY IN THE FIELD OF USE.  NOTWITHSTANDING THE FOREGOING VERTEX SHALL RETAIN
THE RIGHT TO MANUFACTURE AND HAVE MANUFACTURED THE DRUG PRODUCT IN THE TERRITORY
FOR DEVELOPMENT, USE, OR SALE OF THE DRUG PRODUCT IN THE VERTEX TERRITORY AND
FOR SALE OF THE DRUG PRODUCT TO MITSUBISHI PURSUANT TO THIS AGREEMENT.  IN
ADDITION, IN THE EVENT THAT PURSUANT TO DISCUSSIONS IN THE JDC IT IS DETERMINED
THAT VERTEX MAY CONDUCT CLINICAL TRIALS OF THE DRUG PRODUCT IN THE TERRITORY,
NOTWITHSTANDING THE FOREGOING LICENSE GRANT, VERTEX SHALL BE ALLOWED TO CONDUCT
SUCH CLINICAL TRIALS.  FURTHER, SUBJECT TO THE OTHER PROVISIONS OF THIS
AGREEMENT, VERTEX HEREBY GRANTS TO MITSUBISHI A NON-EXCLUSIVE LICENSE (OR
SUBLICENSE, AS APPROPRIATE) IN THE VERTEX TERRITORY UNDER THE VERTEX TECHNOLOGY,
WITH THE RIGHT TO SUBLICENSE, TO MANUFACTURE AND/OR HAVE MANUFACTURED THE DRUG
PRODUCT FOR DEVELOPMENT, USE OR SALE OF THE DRUG PRODUCT IN THE TERRITORY.

 

2.1.2                      SUBLICENSEES AND SUBCONTRACTORS.  MITSUBISHI SHALL
NOTIFY VERTEX IN WRITING OF ANY SUBLICENSE IT INTENDS TO GRANT PURSUANT TO
SECTION 2.1.1 [***].  NOTWITHSTANDING THE FOREGOING, MITSUBISHI MAY SUBLICENSE
ITS RIGHTS UNDER THE LICENSE GRANTED IN SECTION 2.1.1 TO ANY OF ITS AFFILIATES,
WITH PRIOR NOTICE TO BUT WITHOUT THE CONSENT OF VERTEX.  MITSUBISHI SHALL

 

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GUARANTEE AND BE RESPONSIBLE TO VERTEX FOR THE PERFORMANCE OF ANY OF ITS
SUBLICENSEES OR SUBCONTRACTORS UNDER ANY SUBLICENSE OR OTHER AGREEMENT WITH
RESPECT TO THE RIGHTS GRANTED TO MITSUBISHI BY VERTEX AND THE OBLIGATIONS
ASSUMED BY MITSUBISHI HEREUNDER.  MITSUBISHI SHALL NOT PERMIT ANY SUBCONTRACTORS
OR SUBLICENSEES TO USE VERTEX TECHNOLOGY WITHOUT PROVISIONS SAFEGUARDING
CONFIDENTIALITY EQUIVALENT TO THOSE PROVIDED IN THIS AGREEMENT.  MITSUBISHI
SHALL ENSURE THAT ANY SUCH PROVISIONS ALLOW VERTEX THE RIGHT TO DIRECTLY ENFORCE
THE OBLIGATIONS OF CONFIDENTIALITY WITH RESPECT TO VERTEX TECHNOLOGY IN THE
POSSESSION OF THE SUBCONTRACTOR OR SUBLICENSEE.

 

2.2                                 COMPETING PRODUCT.  IN THE EVENT THAT VERTEX
INTENDS TO LICENSE RIGHTS TO DEVELOP AND/OR COMMERCIALIZE A COMPETING PRODUCT
SOLELY IN THE TERRITORY (RATHER THAN AS PART OF A WORLDWIDE LICENSE), VERTEX
SHALL DISCUSS WITH MITSUBISHI IN GOOD FAITH THE TERMS AND CONDITIONS FOR SUCH A
LICENSE PRIOR TO NEGOTIATING TERMS AND CONDITIONS FOR SUCH A LICENSE WITH ANY
THIRD PARTY.

 

2.3                                  GRANT TO VERTEX.

 

2.3.1                  LICENSE.  SUBJECT TO THE OTHER PROVISIONS OF THIS
AGREEMENT, MITSUBISHI HEREBY GRANTS TO VERTEX, IN THE VERTEX TERRITORY AND IN
THOSE COUNTRIES IN THE TERRITORY WHERE VERTEX MAY CONDUCT CLINICAL TRIALS OF THE
DRUG PRODUCT OR WHERE VERTEX MAY MANUFACTURE AND HAVE MANUFACTURED DRUG PRODUCT
FOR DEVELOPMENT, USE, OR SALE IN THE VERTEX TERRITORY AND FOR SALE TO MITSUBISHI
PURSUANT TO THIS AGREEMENT, A ROYALTY-FREE, NON-EXCLUSIVE LICENSE (OR
SUBLICENSE, AS APPROPRIATE) UNDER THE MITSUBISHI TECHNOLOGY, WITH THE RIGHT TO
SUBLICENSE, TO EXERCISE ITS RIGHTS AND FULFILL ITS OBLIGATIONS UNDER THIS
AGREEMENT AND, TO THE EXTENT NOT INCONSISTENT WITH MITSUBISHI’S EXCLUSIVE RIGHTS
IN THE TERRITORY, TO RESEARCH, DEVELOP, MANUFACTURE, HAVE MANUFACTURED, USE,
SELL, HAVE SOLD, OFFER TO SELL AND IMPORT BULK DRUG SUBSTANCE, COMPOUNDS AND
DRUG PRODUCTS IN THE FIELD OF USE.

 

2.3.2                    SUBLICENSEES AND SUBCONTRACTORS.  VERTEX SHALL NOTIFY
MITSUBISHI IN WRITING IN ADVANCE OF GRANTING ANY SUBLICENSES PURSUANT TO
SECTION 2.3.1.  VERTEX SHALL GUARANTEE AND BE RESPONSIBLE TO MITSUBISHI FOR THE
PERFORMANCE OF ANY OF ITS SUBLICENSEES OR SUBCONTRACTORS UNDER ANY SUBLICENSE OR
OTHER AGREEMENT WITH RESPECT TO THE RIGHTS GRANTED TO VERTEX BY MITSUBISHI AND
THE OBLIGATIONS ASSUMED BY VERTEX HEREUNDER.  VERTEX SHALL NOT PERMIT ANY
SUBCONTRACTORS OR SUBLICENSEES TO USE MITSUBISHI TECHNOLOGY WITHOUT PROVISIONS
SAFEGUARDING CONFIDENTIALITY EQUIVALENT TO THOSE PROVIDED IN THIS AGREEMENT. 
VERTEX WILL ENSURE THAT ANY SUCH PROVISIONS WILL ALLOW MITSUBISHI THE RIGHT TO
DIRECTLY ENFORCE THE OBLIGATIONS OF CONFIDENTIALITY WITH RESPECT TO MITSUBISHI
TECHNOLOGY IN THE POSSESSION OF

 

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THE SUBCONTRACTOR OR SUBLICENSEE.

 

2.4                                    TRANSFER OF KNOW-HOW.  EACH PARTY SHALL
DELIVER TO THE OTHER ALL KNOW-HOW CONTROLLED BY IT OR ITS AFFILIATES AND
REQUESTED BY THE OTHER PARTY FROM TIME TO TIME, PURSUANT TO THE EXERCISE BY SUCH
OTHER PARTY OF ANY OF THE LICENSES GRANTED HEREUNDER.  THE KNOW-HOW SHALL BE
DELIVERED IN A FORM THAT REASONABLY FACILITATES THE USE OF SUCH KNOW-HOW AND
SHALL ALSO INCLUDE COPIES OF ALL MITSUBISHI PATENTS IN THE VERTEX TERRITORY OR
ALL VERTEX PATENTS IN THE TERRITORY, AS APPLICABLE, AND ALL OTHER MANIFESTATIONS
OF THE INTELLECTUAL PROPERTY LICENSED HEREUNDER EMBODIED IN THE BULK DRUG
SUBSTANCE, COMPOUNDS OR DRUG PRODUCTS, WHETHER IN HUMAN OR MACHINE READABLE
FORM.

 

2.5                                    NO IMPLIED RIGHTS.  EXCEPT AS EXPRESSLY
PROVIDED IN THIS AGREEMENT, NO RIGHT OR LICENSE TO USE ANY INTELLECTUAL PROPERTY
OF EITHER PARTY IS GRANTED HEREUNDER BY IMPLICATION OR OTHERWISE.

 

ARTICLE III — DEVELOPMENT

 

3.1                                    JOINT DEVELOPMENT COMMITTEE.

 

3.1.1                    FORMATION AND RESPONSIBILITIES.  AS SOON AS PRACTICABLE
AFTER THE EFFECTIVE DATE, VERTEX AND MITSUBISHI WILL ESTABLISH A JOINT
DEVELOPMENT COMMITTEE (THE “JDC”) MADE UP OF EQUAL NUMBERS OF VERTEX AND
MITSUBISHI PERSONNEL TO BE DESIGNATED FROM TIME TO TIME BY EACH PARTY.  EACH OF
VERTEX AND MITSUBISHI SHALL HAVE ONE VOTE ON THE JDC.  THE OBJECTIVE OF THE JDC
SHALL BE TO REACH AGREEMENT BY CONSENSUS ON ALL MATTERS FALLING WITHIN ITS
AUTHORITY HEREUNDER WITHIN THE SCOPE OF THIS AGREEMENT.  THE CHAIRPERSON OF THE
JDC SHALL BE DESIGNATED BY MITSUBISHI.  MEETINGS OF THE JDC OTHER THAN REGULARLY
SCHEDULED QUARTERLY MEETINGS MAY BE HELD ONLY IF A QUORUM OF [***]
REPRESENTATIVES OF EACH PARTY PARTICIPATES; EXCEPT THAT LACK OF A QUORUM SHALL
NOT PREVENT THE SCHEDULING AND CONDUCT OF A MEETING BY EITHER PARTY AFTER THAT
PARTY HAS MADE GOOD FAITH BUT UNSUCCESSFUL ATTEMPTS FOR MORE THAN NINETY (90)
DAYS TO SCHEDULE AND CONVENE THE MEETING.  SEMI-ANNUALLY, THE JDC SHALL MEET
FACE-TO-FACE, ALTERNATING BETWEEN THE OFFICES OF THE PARTIES, UNLESS OTHERWISE
AGREED.   THERE SHALL BE A TELEPHONIC OR VIDEO CONFERENCE MEETING OF THE JDC IN
EACH CALENDAR QUARTER IN WHICH A FACE-TO-FACE MEETING IS NOT HELD.   THE JDC
SHALL MEET AS DESCRIBED ABOVE, OR WITH SUCH OTHER FREQUENCY, AND AT SUCH TIME
AND LOCATION, AS MAY BE ESTABLISHED BY THE JDC, FOR THE FOLLOWING PURPOSES,
AMONG OTHERS:

 

(I)                                    TO REVIEW AND COMMENT ON THE MITSUBISHI
DEVELOPMENT PLAN

 

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AS SET FORTH IN SECTION 3.2.1 BELOW;

 

(II)                                TO REVIEW AND COMMENT ON THE CORE
DEVELOPMENT PLAN AND THE VERTEX DEVELOPMENT PLAN AS SET FORTH IN SECTIONS 3.2.2
AND 3.2.3 BELOW;

 

(III)                            TO RECEIVE AND REVIEW REPORTS BY MITSUBISHI,
WHICH SHALL BE PREPARED AND SUBMITTED TO VERTEX AND THE JDC NO LESS THAN [***]
DAYS BEFORE EACH SEMI-ANNUAL FACE-TO-FACE MEETING, SETTING FORTH IN REASONABLE
DETAIL, WITH SUPPORTING DATA, THE RESULTS OF WORK PERFORMED DURING THE PRECEDING
SIX MONTHS UNDER THE MITSUBISHI DEVELOPMENT PLAN;

 

(IV)                               TO RECEIVE AND REVIEW REPORTS BY VERTEX,
WHICH SHALL BE PREPARED AND SUBMITTED TO MITSUBISHI AND THE JDC NO LESS THAN
[***] DAYS BEFORE EACH SEMI-ANNUAL FACE-TO-FACE MEETING, SETTING FORTH IN
REASONABLE DETAIL, WITH SUPPORTING DATA, THE RESULTS OF WORK PERFORMED DURING
THE PRECEDING SIX MONTHS UNDER THE CORE DEVELOPMENT PLAN AND THE VERTEX
DEVELOPMENT PLAN;

 

(V)                                   TO ASSIST IN COORDINATING SCIENTIFIC
INTERACTIONS AND RESOLVING DISAGREEMENTS BETWEEN VERTEX AND MITSUBISHI WITH
RESPECT TO THE DEVELOPMENT OF COMPOUNDS;

 

(VI)                               TO DISCUSS MATTERS RELATING TO PATENTS
CLAIMING BULK DRUG SUBSTANCE, THE COMPOUNDS OR DRUG PRODUCTS, METHODS OF USING
OR MAKING THE SAME, OR IMPROVEMENTS TO THE SUBJECT MATTER OF A PATENT COVERING
ANY OF THE FOREGOING, INCLUDING ISSUES OF INVENTORSHIP AND DECISIONS RELATING TO
THE FILING, PROSECUTION AND MAINTENANCE OF THOSE PATENTS;

 

(VII)                           TO DISCUSS THE BUDGET FOR THE CORE DEVELOPMENT
ACTIVITIES TO BE CONDUCTED PURSUANT TO THE CORE DEVELOPMENT PLAN IN THE CONTEXT
OF THE STANDARDS IN THE PHARMACEUTICAL INDUSTRY;

 

(VIII)                       IN THE EVENT VERTEX HAS NOTIFIED THE JDC IN WRITING
THAT VERTEX WISHES TO CONDUCT CLINICAL TRIALS IN THE TERRITORY, TO DISCUSS AND
APPROVE (WITH SUCH APPROVAL NOT TO BE UNREASONABLY WITHHELD OR DELAYED) VERTEX’S
CONDUCTING SUCH CLINICAL TRIALS IN THE TERRITORY; AND

 

(IX)                              TO PERFORM SUCH OTHER FUNCTIONS AS APPROPRIATE
TO FURTHER THE PURPOSES OF THIS AGREEMENT AS MUTUALLY DETERMINED BY THE PARTIES.

 

MITSUBISHI will prepare the initial draft of an agenda for each JDC meeting and
will submit the draft to VERTEX for comments a reasonable period before the
scheduled meeting

 

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date.  The Party hosting a particular JDC meeting shall prepare and deliver to
the members of the JDC, within [***] days after the date of each meeting,
minutes of such meeting setting forth, among other things, all decisions of the
JDC, and including a summary of the status of development activities as reported
to the JDC.  The Party not preparing the minutes may suggest changes or
amendments to the minutes, and may provide a supplement addressing activities at
the meeting that are not reported in the minutes, which shall be distributed to
the Parties and filed with the meeting minutes.  In case the JDC meets by means
of telephone or video conferences, the responsibility for preparing minutes
shall lie with MITSUBISHI.

 

3.1.2                      RETENTION OF RIGHTS.  NOTWITHSTANDING THE FOREGOING,
EACH PARTY SHALL RETAIN THE RIGHTS, POWERS, AND DISCRETION EXPRESSLY GRANTED TO
IT UNDER THIS AGREEMENT, AND THE JDC SHALL NOT BE DELEGATED OR VESTED WITH ANY
SUCH RIGHTS, POWERS OR DISCRETION EXCEPT AS EXPRESSLY PROVIDED IN THIS
AGREEMENT.  THE JDC SHALL NOT HAVE THE POWER TO AMEND OR MODIFY THIS AGREEMENT,
WHICH MAY ONLY BE AMENDED OR MODIFIED AS PROVIDED IN SECTION 13.14 HEREOF.

 

3.1.3                      DECISION MAKING.  IF THE JDC CANNOT REACH CONSENSUS
ON A MATTER ARISING IN CONNECTION WITH THE TERRITORY, SUCH MATTER SHALL BE
REFERRED TO THE JOINT STEERING COMMITTEE FOR RESOLUTION IN ACCORDANCE WITH THE
TERMS OF SECTION 10.2.1.  IF THE JOINT STEERING COMMITTEE IS UNABLE TO RESOLVE
SUCH MATTER, THEN MITSUBISHI SHALL HAVE FINAL AUTHORITY TO MAKE THE ULTIMATE
DECISION WITH RESPECT THERETO.  IF THE JDC CANNOT REACH CONSENSUS ON A MATTER
ARISING IN CONNECTION WITH THE VERTEX TERRITORY, EXCEPT FOR THE MATTERS SET
FORTH IN SECTION 3.2.3, SUCH MATTER SHALL BE REFERRED TO THE JOINT STEERING
COMMITTEE FOR RESOLUTION IN ACCORDANCE WITH THE TERMS OF SECTION 10.2.1.  IF THE
JOINT STEERING COMMITTEE IS UNABLE TO RESOLVE SUCH MATTER, THEN VERTEX SHALL
HAVE FINAL AUTHORITY TO MAKE THE ULTIMATE DECISION WITH RESPECT THERETO.  IF THE
JDC CANNOT REACH CONSENSUS ON ANY OTHER MATTERS, INCLUDING THE MATTERS SET FORTH
IN SECTION 3.2.3, SUCH MATTERS SHALL BE REFERRED TO THE JOINT STEERING COMMITTEE
FOR RESOLUTION IN ACCORDANCE WITH THE TERMS OF SECTIONS 10.2.1 AND 10.2.2.

 

3.2                                    DEVELOPMENT PLANS.

 

3.2.1                      MITSUBISHI DEVELOPMENT PLAN.  AS SOON AS PRACTICABLE
AFTER THE EFFECTIVE DATE, MITSUBISHI WILL PREPARE A DEVELOPMENT PLAN FOR THE
CONDUCT OF THE MITSUBISHI DEVELOPMENT ACTIVITIES IN THE TERRITORY (THE
“MITSUBISHI DEVELOPMENT PLAN”), AND WILL PROVIDE A COPY OF SUCH PLAN TO THE
JDC.  THE MITSUBISHI DEVELOPMENT PLAN WILL BE UPDATED BY MITSUBISHI ANNUALLY
THEREAFTER TO DESCRIBE THE MITSUBISHI DEVELOPMENT ACTIVITIES THAT MITSUBISHI
THEN INTENDS WILL BE CONDUCTED DURING THE SUBSEQUENT YEAR AND THE REMAINDER OF
THE DEVELOPMENT PERIOD.  SUCH MITSUBISHI DEVELOPMENT PLAN WILL BE PROVIDED TO

 

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THE JDC WITHIN [***] DAYS OF THE DATE THAT THE JDC WILL CONDUCT ONE OF ITS
QUARTERLY OR SEMI-ANNUAL MEETINGS.  THE MITSUBISHI DEVELOPMENT PLAN WILL BE
CONSIDERED CONFIDENTIAL INFORMATION OF MITSUBISHI SUBJECT TO THE CONFIDENTIALITY
OBLIGATIONS OF ARTICLE IX.  THE JDC SHALL HAVE THE OPPORTUNITY TO REVIEW AND
COMMENT ON THE MITSUBISHI DEVELOPMENT PLAN WITHIN [***] DAYS OF ITS RECEIPT.

 

3.2.2                      VERTEX DEVELOPMENT PLAN.  AS SOON AS PRACTICABLE
AFTER THE EFFECTIVE DATE, VERTEX WILL PREPARE A DEVELOPMENT PLAN FOR THE CONDUCT
OF THE VERTEX DEVELOPMENT ACTIVITIES IN THE VERTEX TERRITORY, OTHER THAN THE
CORE DEVELOPMENT ACTIVITIES (THE “VERTEX DEVELOPMENT PLAN”), AND WILL PROVIDE A
COPY OF SUCH PLAN TO THE JDC.  THE VERTEX DEVELOPMENT PLAN WILL BE UPDATED BY
VERTEX ANNUALLY THEREAFTER TO DESCRIBE THE VERTEX DEVELOPMENT ACTIVITIES (OTHER
THAN CORE DEVELOPMENT ACTIVITIES) THAT VERTEX THEN INTENDS WILL BE CONDUCTED
DURING THE SUBSEQUENT YEAR AND THE REMAINDER OF THE DEVELOPMENT PERIOD.  SUCH
VERTEX DEVELOPMENT PLAN WILL BE PROVIDED TO THE JDC WITHIN [***] DAYS OF THE
DATE THAT THE JDC WILL CONDUCT ONE OF ITS QUARTERLY OR SEMI-ANNUAL MEETINGS. 
THE VERTEX DEVELOPMENT PLAN WILL BE CONSIDERED CONFIDENTIAL INFORMATION OF
VERTEX SUBJECT TO THE CONFIDENTIALITY OBLIGATIONS OF ARTICLE IX.  THE JDC SHALL
HAVE THE OPPORTUNITY TO REVIEW AND COMMENT ON THE VERTEX DEVELOPMENT PLAN WITHIN
[***] DAYS OF ITS RECEIPT.

 

3.2.3                      CORE DEVELOPMENT PLAN.  AS SOON AS PRACTICABLE AFTER
THE EFFECTIVE DATE, VERTEX WILL PREPARE A DEVELOPMENT PLAN FOR THE CONDUCT OF
THE CORE DEVELOPMENT ACTIVITIES (THE “CORE DEVELOPMENT PLAN”), INCLUDING AN
ACCOMPANYING BUDGET, AND WILL PROVIDE A COPY OF SUCH PLAN TO THE JDC.  THE CORE
DEVELOPMENT PLAN WILL BE UPDATED BY VERTEX ANNUALLY THEREAFTER TO DESCRIBE THE
CORE DEVELOPMENT ACTIVITIES THAT VERTEX THEN INTENDS WILL BE CONDUCTED DURING
THE SUBSEQUENT YEAR AND THE REMAINDER OF THE DEVELOPMENT PERIOD.  SUCH CORE
DEVELOPMENT PLAN WILL BE PROVIDED TO THE JDC WITHIN [***] DAYS OF THE DATE THAT
THE JDC WILL CONDUCT ONE OF ITS QUARTERLY OR SEMI-ANNUAL MEETINGS.  THE CORE
DEVELOPMENT PLAN WILL BE CONSIDERED CONFIDENTIAL INFORMATION OF VERTEX SUBJECT
TO THE CONFIDENTIALITY OBLIGATIONS OF ARTICLE IX.  THE JDC SHALL HAVE THE RIGHT
TO REVIEW AND COMMENT ON THE CORE DEVELOPMENT PLAN WITHIN [***] DAYS OF ITS
RECEIPT.  WITHIN SUCH [***] DAY PERIOD, THE JDC SHALL ALSO (I) CONFIRM THAT THE
CORE DEVELOPMENT ACTIVITIES DESCRIBED THEREIN FALL WITHIN THE SCOPE OF SUCH
DEFINITION AND (II) AGREE UPON THE PROTOCOLS FOR NON-CLINICAL STUDIES, WHICH
AGREEMENT SHALL NOT BE UNREASONABLY WITHHELD OR DELAYED.  IN THE EVENT THAT THE
JDC CANNOT REACH CONSENSUS WITH RESPECT TO A MATTER DESCRIBED IN EITHER CLAUSE
(I) OR (II) ABOVE, SUCH MATTER SHALL BE REFERRED TO THE JOINT STEERING COMMITTEE
FOR RESOLUTION IN ACCORDANCE WITH THE TERMS OF SECTIONS 10.2.1 AND

 

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10.2.2.  IN THE EVENT THAT THE JDC DOES NOT AGREE UPON THE PROTOCOL FOR A
PARTICULAR NON-CLINICAL STUDY, VERTEX SHALL ALSO HAVE THE RIGHT TO CONDUCT SUCH
STUDY INDEPENDENTLY AND EITHER (I) NOT TO REFER SUCH DISPUTE TO THE JOINT
STEERING COMMITTEE FOR RESOLUTION, IN WHICH CASE MITSUBISHI MAY ALSO NOT REFER
SUCH DISPUTE TO THE JOINT STEERING COMMITTEE AND SUCH STUDY SHALL NO LONGER BE
CONSIDERED A CORE DEVELOPMENT ACTIVITY SUBJECT TO COST SHARING BY MITSUBISHI
PURSUANT TO SECTION 3.3 BELOW, OR (II) TO REFER SUCH DISPUTE TO THE JOINT
STEERING COMMITTEE FOR RESOLUTION, AND IF THE RESOLUTION PROCESS DOES NOT
APPROVE THE PROTOCOL FOR SUCH NON-CLINICAL STUDY, SUCH STUDY SHALL NOT BE
CONSIDERED A CORE DEVELOPMENT ACTIVITY SUBJECT TO COST SHARING BY MITSUBISHI
PURSUANT TO SECTION 3.3 BELOW, BUT IF THE RESOLUTION PROCESS DOES APPROVE SUCH
PROTOCOL, THEN SUCH STUDY SHALL BE CONSIDERED A CORE DEVELOPMENT ACTIVITY
SUBJECT TO SUCH COST SHARING BY MITSUBISHI.

 

3.3                                    DEVELOPMENT COSTS.

 

3.3.1                      MITSUBISHI COST-SHARING OBLIGATIONS.  MITSUBISHI WILL
BEAR THE COST OF THE MITSUBISHI DEVELOPMENT ACTIVITIES IN THE TERRITORY.  IN
ADDITION TO THE ABOVE OBLIGATION, MITSUBISHI WILL PAY TO VERTEX [***] OF THE
CORE DEVELOPMENT COSTS INCURRED BY OR ON BEHALF OF VERTEX OR A VERTEX LICENSEE. 
FOR THE AVOIDANCE OF DOUBT, MITSUBISHI SHALL HAVE NO OBLIGATION UNDER THIS
SECTION 3.3.1 TO PAY [***].  NOT LATER THAN [***] AFTER THE END OF EACH CALENDAR
QUARTER, VERTEX WILL SUBMIT TO MITSUBISHI A SUMMARY OF THE CORE DEVELOPMENT
COSTS INCURRED DURING THE CALENDAR QUARTER JUST ENDED (WITH APPROPRIATE
SUPPORTING INFORMATION INCLUDING A DESCRIPTION OF THE TIME EXPENDED ON THE
RELATED CORE DEVELOPMENT ACTIVITIES [***], PROVIDED, HOWEVER, THAT IF THE FIRST
INVOICE SUBMITTED UNDER THIS SECTION 3.3.1 TO MITSUBISHI REFLECTS COSTS FOR
ACTIVITIES THAT ARE SUBSEQUENTLY NOT CONFIRMED BY THE JDC TO BE CORE DEVELOPMENT
ACTIVITIES, THEN MITSUBISHI SHALL RECEIVE A CREDIT FOR SUCH COSTS AGAINST THE
NEXT INVOICE SUBMITTED UNDER THIS SECTION 3.3.1.  THE SUMMARY AND SUPPORTING
INFORMATION SHALL BE CONSIDERED TO BE CONFIDENTIAL INFORMATION OF VERTEX SUBJECT
TO THE CONFIDENTIALITY OBLIGATIONS OF ARTICLE IX.  THE BOOKS AND RECORDS OF
VERTEX OR A VERTEX LICENSEE RELATING TO CORE DEVELOPMENT COSTS WILL BE SUBJECT
TO INSPECTION BY MITSUBISHI ONCE IN ANY CALENDAR YEAR UPON REASONABLE NOTICE,
FOR THE PURPOSE OF VERIFYING THE ACCURACY OF THE SUMMARY OF CORE DEVELOPMENT
COSTS DELIVERED HEREUNDER.  THE BOOKS AND RECORDS RELATING TO A REPORTED CORE
DEVELOPMENT COST SHALL BE RETAINED BY VERTEX OR A VERTEX LICENSEE FOR A PERIOD
OF NOT LESS THAN [***] AFTER THE YEAR IN WHICH SUCH COST WAS INCURRED.

 

3.3.2                      LIMITATIONS ON MITSUBISHI COST-SHARING OBLIGATIONS. 
MITSUBISHI’S OBLIGATION TO SHARE CORE DEVELOPMENT COSTS INCURRED BY OR ON BEHALF
OF VERTEX OR A VERTEX

 

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LICENSEE FROM THE EFFECTIVE DATE THROUGH THE COMPLETION OF PHASE II CLINICAL
TRIALS WITHIN THE CORE DEVELOPMENT ACTIVITIES AND TO PAY VERTEX THEREFOR SHALL
BE [***].  UPON [***] THE PARTIES SHALL BEGIN TO DISCUSS IN GOOD FAITH THE
MAXIMUM AMOUNT OF MITSUBISHI’S COST-SHARING OBLIGATION RELATING TO CORE
DEVELOPMENT COSTS INCURRED BY OR ON BEHALF OF VERTEX OR A VERTEX LICENSEE FOR
THE CONDUCT OF PHASE III CLINICAL TRIALS.  [***]  THIS AMOUNT SHALL BE PAYABLE
IN ACCORDANCE WITH THE TERMS AND CONDITIONS SET FORTH IN SECTIONS 3.3.1 AND
3.3.3.

 

3.3.3                      TIMING AND METHOD OF PAYMENTS.  ALL AMOUNTS PAYABLE
UNDER THIS SECTION 3.3 SHALL BE MADE ON OR BEFORE THE [***] FOLLOWING
MITSUBISHI’S RECEIPT OF INVOICES FROM VERTEX WITH RESPECT THERETO.  ALL PAYMENTS
SHALL BE MADE BY WIRE TRANSFER IN U.S. DOLLARS TO THE CREDIT OF SUCH BANK
ACCOUNT AS MAY BE DESIGNATED BY VERTEX IN WRITING TO MITSUBISHI FROM TIME TO
TIME.

 

3.4                                    [***].  IN THE EVENT THAT MITSUBISHI
DECIDES TO FILE FOR REGULATORY APPROVAL FOR THE DRUG PRODUCT FOR A [***] IN THE
TERRITORY [***] THEN MITSUBISHI SHALL [***].  THE PARTIES SHALL DISCUSS IN GOOD
FAITH AND AGREE [***].  FOR THE PURPOSE OF THIS SECTION 3.4 [***],  IN ADDITION,
IN THE EVENT THAT MITSUBISHI DETERMINES THAT IT WILL NOT FILE FOR REGULATORY
APPROVAL FOR THE DRUG PRODUCT IN THE TERRITORY FOR [***] BUT INSTEAD WILL FILE
FOR REGULATORY AUTHORITY FOR THE DRUG PRODUCT IN THE TERRITORY FOR [***] THEN
MITSUBISHI SHALL NOTIFY VERTEX OF SUCH DECISION NO LATER THAN [***] AND THE
PARTIES SHALL DISCUSS IN GOOD FAITH AND AGREE UPON THE TERMS [***] WHICH
AGREEMENT IN ANY EVENT SHALL BE REACHED PRIOR TO [***].

 

3.5                                    DATA TRANSFER.

 

3.5.1                      PRECLINICAL AND NON-CLINICAL DATA.

 

(a)                                  MITSUBISHI shall provide to VERTEX all
relevant preclinical and non-clinical data, assays and associated materials,
protocols, methods, processes, techniques, commercial assessments of potential
Indications, and any other relevant information or materials with respect to a
Compound, that are Controlled by and in the possession of MITSUBISHI or its
Affiliates and produced in the performance of the MITSUBISHI Development
Activities during the term of this Agreement.  Available information and
materials shall be delivered by MITSUBISHI to the JDC, at MITSUBISHI’s expense,
within thirty (30) days after the end of each calendar quarter during the term
of this Agreement in an orderly fashion and in a manner such that the value of
the delivered information and materials is preserved in all material respects. 
Such information and materials shall be deemed Confidential Information of
MITSUBISHI subject to the terms and conditions set forth in Article IX. 
MITSUBISHI shall enter

 

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exhibit has been filed separately with the Commission.

 

into customary agreements with its sublicensees that provide that such
sublicensees shall supply MITSUBISHI with relevant preclinical and non-clinical
data, assays and associated materials, protocols, methods, processes,
techniques, commercial assessments of potential Indications, and any other
relevant information or materials with respect to a Compound produced in the
performance of the MITSUBISHI Development Activities.

 

(b)                                  VERTEX shall provide to MITSUBISHI all
relevant preclinical and non-clinical data, assays and associated materials,
protocols, methods, processes, techniques, commercial assessments of potential
Indications, and any other relevant information or materials with respect to a
Compound, that are Controlled by and in the possession of VERTEX or its
Affiliates and produced in the performance of the VERTEX Development Activities
before and during the term of this Agreement.  Available information and
materials shall be delivered by VERTEX to the JDC, at VERTEX’s expense, within
thirty (30) days after the end of each calendar quarter during the term of this
Agreement in an orderly fashion and in a manner such that the value of the
delivered information and materials is preserved in all material respects.  Such
information and materials shall be deemed Confidential Information of VERTEX
subject to the terms and conditions set forth in Article IX.  VERTEX shall enter
into customary agreements with the VERTEX Licensees that provide that the VERTEX
Licensees shall supply VERTEX with relevant preclinical and non-clinical data,
assays and associated materials, protocols, methods, processes, techniques,
commercial assessments of potential Indications, and any other relevant
information or materials with respect to a Compound produced in the performance
of the VERTEX Development Activities.

 

3.5.2                      CLINICAL DATA.

 

(A)                                  MITSUBISHI SHALL PROVIDE TO VERTEX ALL
RELEVANT MATERIALS, DATA AND REGULATORY INFORMATION THAT ARE CONTROLLED BY AND
IN THE POSSESSION OF MITSUBISHI OR ITS AFFILIATES AND RELATED TO OR GENERATED IN
CONNECTION WITH ANY CLINICAL TRIALS OF A COMPOUND CONDUCTED, SPONSORED OR FUNDED
BY MITSUBISHI AND/OR ITS SUBLICENSEES (INCLUDING INVESTIGATOR-SPONSORED TRIALS
AND POST-MARKETING CLINICAL TRIALS) PURSUANT TO THE PERFORMANCE OF THE
MITSUBISHI DEVELOPMENT ACTIVITIES DURING THE TERM OF THIS AGREEMENT, WHETHER
WRITTEN OR ELECTRONIC, INCLUDING ALL RELEVANT CLINICAL SAFETY AND EFFICACY DATA
AND ALL REGULATORY DATA AND INFORMATION RELATED TO THE USE AND SALE OF A DRUG
PRODUCT FOR ANY INDICATION.  SUCH MATERIALS, DATA AND INFORMATION SHALL BE
DELIVERED TO THE JDC BY MITSUBISHI, AT MITSUBISHI’S COST, PROMPTLY AFTER
COMPLETION OF THE ANALYSIS OF SUCH CLINICAL TRIAL DATA AND INFORMATION IN AN
ORDERLY FASHION AND IN A MANNER SUCH THAT THE VALUE OF THE ACCESSED INFORMATION
IS PRESERVED IN ALL

 

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MATERIAL RESPECTS.  SUCH INFORMATION AND MATERIALS SHALL BE DEEMED CONFIDENTIAL
INFORMATION OF MITSUBISHI SUBJECT TO THE TERMS AND CONDITIONS SET FORTH IN
ARTICLE IX.  MITSUBISHI SHALL ENTER INTO CUSTOMARY AGREEMENTS WITH ITS
SUBLICENSEES THAT PROVIDE THAT SUCH SUBLICENSEES SHALL SUPPLY MITSUBISHI WITH
RELEVANT MATERIALS, DATA AND REGULATORY INFORMATION RELATED TO OR GENERATED IN
CONNECTION WITH ANY CLINICAL TRIALS OF A COMPOUND CONDUCTED, SPONSORED OR FUNDED
BY SUCH SUBLICENSEES PURSUANT TO THE PERFORMANCE OF THE MITSUBISHI DEVELOPMENT
ACTIVITIES.

 

(B)                                  VERTEX SHALL PROVIDE TO MITSUBISHI ALL
RELEVANT MATERIALS, DATA AND REGULATORY INFORMATION THAT ARE CONTROLLED BY AND
IN THE POSSESSION OF VERTEX OR ITS AFFILIATES AND RELATED TO OR GENERATED IN
CONNECTION WITH ANY CLINICAL TRIALS OF A COMPOUND CONDUCTED, SPONSORED OR FUNDED
BY VERTEX AND/OR ITS VERTEX LICENSEES (INCLUDING INVESTIGATOR-SPONSORED TRIALS
AND POST-MARKETING CLINICAL TRIALS) PURSUANT TO THE PERFORMANCE OF THE VERTEX
DEVELOPMENT ACTIVITIES BEFORE AND DURING THE TERM OF THIS AGREEMENT, WHETHER
WRITTEN OR ELECTRONIC, INCLUDING ALL RELEVANT CLINICAL SAFETY AND EFFICACY DATA
AND ALL REGULATORY DATA AND INFORMATION RELATED TO THE USE AND SALE OF A DRUG
PRODUCT FOR ANY INDICATION.  SUCH MATERIALS, DATA AND INFORMATION SHALL BE
DELIVERED TO THE JDC BY VERTEX, AT VERTEX’S COST, PROMPTLY AFTER COMPLETION OF
THE ANALYSIS OF SUCH CLINICAL TRIAL DATA AND INFORMATION IN AN ORDERLY FASHION
AND IN A MANNER SUCH THAT THE VALUE OF THE ACCESSED INFORMATION IS PRESERVED IN
ALL MATERIAL RESPECTS.  SUCH INFORMATION AND MATERIALS SHALL BE DEEMED
CONFIDENTIAL INFORMATION OF VERTEX SUBJECT TO THE TERMS AND CONDITIONS SET FORTH
IN ARTICLE IX.  VERTEX SHALL ENTER INTO CUSTOMARY AGREEMENTS WITH THE VERTEX
LICENSEES THAT PROVIDE THAT THE VERTEX LICENSEES SHALL SUPPLY VERTEX WITH
RELEVANT MATERIALS, DATA AND REGULATORY INFORMATION RELATED TO OR GENERATED IN
CONNECTION WITH ANY CLINICAL TRIALS OF A COMPOUND CONDUCTED, SPONSORED OR FUNDED
BY SUCH VERTEX LICENSEES PURSUANT TO THE PERFORMANCE OF THE VERTEX DEVELOPMENT
ACTIVITIES.

 

3.6                                    REGULATORY MATTERS.

 

3.6.1                      REGULATORY APPROVALS.  UNLESS OTHERWISE REQUIRED BY
LAW IN THE RELEVANT JURISDICTION OR SET FORTH IN THIS AGREEMENT, MITSUBISHI
SHALL HAVE THE SOLE RIGHT TO OBTAIN REGULATORY APPROVALS IN THE TERRITORY, WHICH
SHALL BE HELD BY AND IN THE NAME OF MITSUBISHI, AND MITSUBISHI, ITS AFFILIATES
OR SUBLICENSEES SHALL OWN ALL SUBMISSIONS IN CONNECTION THEREWITH.

 

3.6.2                      INTERACTION WITH REGULATORY AUTHORITIES.  MITSUBISHI,
ITS AFFILIATES OR SUBLICENSEES WILL BE THE PRINCIPAL CONTACT FOR AND WILL
OTHERWISE TAKE THE LEAD ROLE IN ALL

 

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exhibit has been filed separately with the Commission.

 

INTERACTIONS WITH REGULATORY AUTHORITIES CONCERNING A DRUG PRODUCT IN THE
TERRITORY.  VERTEX, ITS AFFILIATES OR VERTEX LICENSEES WILL BE THE PRINCIPAL
CONTACT FOR AND WILL OTHERWISE TAKE THE LEAD ROLE IN ALL INTERACTIONS WITH
REGULATORY AUTHORITIES CONCERNING BULK DRUG SUBSTANCE OR A DRUG PRODUCT IN THE
VERTEX TERRITORY.  EACH PARTY WILL PROVIDE THE OTHER PARTY WITH PROMPT NOTICE OF
ALL MATERIAL CORRESPONDENCE AND FILINGS WITH A REGULATORY AUTHORITY REGARDING
BULK DRUG SUBSTANCE OR A DRUG PRODUCT AND, AT THE OTHER PARTY’S REQUEST AND AT
ITS EXPENSE, WITH COPIES OF ALL SUCH CORRESPONDENCE AND FILINGS.

 

3.6.3                      RIGHT OF CROSS REFERENCE.  MITSUBISHI HEREBY GRANTS
VERTEX AND ITS AFFILIATES OR VERTEX LICENSEES THE RIGHT TO CROSS REFERENCE, IN
THEIR REGULATORY FILINGS MADE IN THE VERTEX TERRITORY OR IN THE TERRITORY, IF
ANY, COVERING BULK DRUG SUBSTANCE, A COMPOUND OR DRUG PRODUCT, ALL REGULATORY
FILINGS, AND INFORMATION CONTAINED THEREIN, MADE IN THE TERRITORY BY MITSUBISHI
OR ITS AFFILIATES OR SUBLICENSEES RELATIVE TO SUCH BULK DRUG SUBSTANCE,
COMPOUNDS OR DRUG PRODUCTS.  VERTEX HEREBY GRANTS MITSUBISHI AND ITS AFFILIATES
OR SUBLICENSEES THE RIGHT TO CROSS REFERENCE, IN THEIR REGULATORY FILINGS MADE
IN THE TERRITORY COVERING A COMPOUND OR DRUG PRODUCT, ALL REGULATORY FILINGS,
AND INFORMATION CONTAINED THEREIN, MADE IN THE VERTEX TERRITORY OR IN THE
TERRITORY, IF ANY, BY VERTEX OR ITS AFFILIATES OR VERTEX LICENSEES RELATIVE TO
SUCH COMPOUNDS OR DRUG PRODUCTS.

 

3.6.4                      REGULATORY REPORTING.  DURING THE TERM OF THIS
AGREEMENT, IN ORDER TO COMPLY WITH APPLICABLE REGULATIONS OF APPLICABLE
REGULATORY AUTHORITIES, THE PARTIES AGREE THAT THEY SHALL ESTABLISH PROCEDURES
FOR REPORTING TO SUCH REGULATORY AUTHORITIES ANY ADVERSE EVENTS, TECHNICAL
COMPLAINTS OR OTHER REPORTABLE EVENTS THAT MAY OCCUR WITH RESPECT TO THE
MANUFACTURE, SUPPLY, USE, SALE OR CLINICAL TESTING OF BULK DRUG SUBSTANCE, A
COMPOUND OR DRUG PRODUCT HEREUNDER.  DETAILS OF SUCH PROCEDURES SHALL BE AGREED
UPON BY THE PARTIES PRIOR TO THE INITIATION OF PHASE I CLINICAL TRIALS BY OR ON
BEHALF OF MITSUBISHI.

 

3.7                                    CONDUCT OF THE DEVELOPMENT ACTIVITIES.

 

3.7.1                      STANDARDS.  MITSUBISHI AND VERTEX AGREE TO PERFORM
THE MITSUBISHI DEVELOPMENT ACTIVITIES AND THE VERTEX DEVELOPMENT ACTIVITIES,
RESPECTIVELY, IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THIS AGREEMENT AND
IN CONFORMITY WITH GENERALLY ACCEPTED STANDARDS OF GOOD LABORATORY PRACTICES AND
GOOD CLINICAL PRACTICES AND WITH ALL APPLICABLE NATIONAL, STATE, REGIONAL AND
LOCAL LAWS, GUIDELINES, RULES AND REGULATIONS.

 

3.7.2                      RECORDS.  MITSUBISHI AND VERTEX SHALL PREPARE AND
MAINTAIN, OR HAVE PREPARED AND MAINTAINED, COMPLETE AND ACCURATE WRITTEN
RECORDS, ACCOUNTS, NOTES, REPORTS AND

 

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DATA WITH RESPECT TO ALL LABORATORY WORK CONDUCTED IN THE PERFORMANCE OF THE
MITSUBISHI DEVELOPMENT ACTIVITIES AND THE VERTEX DEVELOPMENT ACTIVITIES,
RESPECTIVELY.  MITSUBISHI AND VERTEX SHALL PREPARE AND MAINTAIN, OR HAVE
PREPARED AND MAINTAINED, COMPLETE AND ACCURATE WRITTEN RECORDS, DATA AND
INFORMATION WITH RESPECT TO ALL CLINICAL TRIALS PERFORMED IN THE CONDUCT OF THE
MITSUBISHI DEVELOPMENT ACTIVITIES AND THE VERTEX DEVELOPMENT ACTIVITIES,
RESPECTIVELY, AS REQUIRED BY ALL APPLICABLE NATIONAL, STATE, REGIONAL AND LOCAL
LAWS, GUIDELINES, RULES AND REGULATIONS.

 

3.8                                    OWNERSHIP OF TECHNOLOGY.

 

3.8.1                      NO OWNERSHIP BY EMPLOYEES.  ALL EMPLOYEES OF
MITSUBISHI WHO ARE EXPECTED TO PERFORM THE MITSUBISHI DEVELOPMENT ACTIVITIES
HAVE SIGNED, OR BEFORE ANY SUCH PERFORMANCE WILL SIGN, AGREEMENTS WITH
MITSUBISHI REGARDING PROPRIETARY INFORMATION AND INVENTIONS IN A FORM REASONABLY
CONSIDERED BY MITSUBISHI AND ITS COUNSEL TO ASSURE MITSUBISHI’S CONTROL OF ANY
INTELLECTUAL PROPERTY INVENTED, DISCOVERED OR DEVELOPED BY SUCH EMPLOYEES.  ALL
EMPLOYEES OF VERTEX WHO ARE EXPECTED TO PERFORM THE VERTEX DEVELOPMENT
ACTIVITIES HAVE SIGNED, OR BEFORE ANY SUCH PERFORMANCE WILL SIGN, AGREEMENTS
WITH VERTEX REGARDING PROPRIETARY INFORMATION AND INVENTIONS IN A FORM
REASONABLY CONSIDERED BY VERTEX AND ITS COUNSEL TO ASSURE VERTEX’S CONTROL OF
ANY INTELLECTUAL PROPERTY INVENTED, DISCOVERED OR DEVELOPED BY SUCH EMPLOYEES.

 

3.8.2                      OWNERSHIP BY AGENTS OR LICENSEES.  MITSUBISHI SHALL
ENTER INTO CUSTOMARY AGREEMENTS WITH ITS AGENTS AND SUBLICENSEES THAT PROVIDE
THAT ALL OF SUCH AGENTS’ OR SUBLICENSEES’ RIGHT, TITLE AND INTEREST IN, TO AND
UNDER ANY INTELLECTUAL PROPERTY INVENTED, DISCOVERED OR DEVELOPED BY SUCH AGENTS
OR SUBLICENSEES IN THE PERFORMANCE OF THE MITSUBISHI DEVELOPMENT ACTIVITIES
SHALL BE ASSIGNED OR LICENSED TO MITSUBISHI.  VERTEX SHALL ENTER INTO CUSTOMARY
AGREEMENTS WITH ITS AGENTS AND VERTEX LICENSEES THAT PROVIDE THAT ALL OF SUCH
AGENTS’ OR VERTEX LICENSEES’ RIGHT, TITLE AND INTEREST IN, TO AND UNDER ANY
INTELLECTUAL PROPERTY INVENTED, DISCOVERED OR DEVELOPED BY SUCH AGENTS OR VERTEX
LICENSEES IN THE PERFORMANCE OF THE VERTEX DEVELOPMENT ACTIVITIES SHALL BE
ASSIGNED OR LICENSED TO VERTEX.

 

ARTICLE IV— MANUFACTURE AND SUPPLY

 

4.1                                    SUPPLY OF BULK DRUG SUBSTANCE AND DRUG
PRODUCT FOR DEVELOPMENT.  SUBJECT TO SECTION 6.4, VERTEX SHALL BE RESPONSIBLE
FOR THE MANUFACTURE AND SUPPLY OF ALL BULK DRUG SUBSTANCE, AND MITSUBISHI WILL
BE RESPONSIBLE FOR PREPARING THE DRUG PRODUCT FROM BULK

 

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exhibit has been filed separately with the Commission.

 

DRUG SUBSTANCE, IN EACH CASE AS NECESSARY FOR THE CONDUCT OF THE MITSUBISHI
DEVELOPMENT ACTIVITIES IN THE TERRITORY.  NOTWITHSTANDING THE ABOVE BUT SUBJECT
TO SECTION 6.4, AT MITSUBISHI’S REQUEST AND UPON NO LESS THAN [***], VERTEX
AGREES TO SUPPLY THAT AMOUNT OF DRUG PRODUCT REQUIRED FOR MITSUBISHI TO CONDUCT
THE PHASE I CLINICAL TRIALS, PHASE II CLINICAL TRIALS AND PHASE III CLINICAL
TRIALS IN THE TERRITORY (“INVESTIGATIONAL DRUG PRODUCT”).  VERTEX WILL SUPPLY
SUCH BULK DRUG SUBSTANCE AND INVESTIGATIONAL DRUG PRODUCT TO MITSUBISHI AT THE
[***].  SUPPLY OF BULK DRUG SUBSTANCE AND INVESTIGATIONAL DRUG PRODUCT FOR
DEVELOPMENT PURPOSES SHALL BE UNDERTAKEN PURSUANT TO THE PROVISIONS OF A SUPPLY
AGREEMENT FOR THE CONDUCT OF THE MITSUBISHI DEVELOPMENT ACTIVITIES (THE
“DEVELOPMENT SUPPLY AGREEMENT”), INCLUDING SUCH CUSTOMARY REPRESENTATIONS,
WARRANTIES, COVENANTS AND CONDITIONS AS ARE NECESSARY OR APPROPRIATE FOR
TRANSACTIONS OF THIS TYPE, NOT INCONSISTENT WITH THE TERMS AND CONDITIONS HEREOF
AND SATISFACTORY IN FORM AND SUBSTANCE TO THE PARTIES AND THEIR LEGAL ADVISORS. 
WITHIN [***] AFTER THE EFFECTIVE DATE, THE PARTIES WILL NEGOTIATE IN GOOD FAITH
AND SEPARATELY ENTER INTO THE DEVELOPMENT SUPPLY AGREEMENT.

 

4.2                                    SUPPLY OF BULK DRUG SUBSTANCE AND DRUG
PRODUCT FOR COMMERCIAL PURPOSES.  SUBJECT TO SECTION 6.4, VERTEX WILL SUPPLY AND
MITSUBISHI SHALL PURCHASE FROM VERTEX ALL OF MITSUBISHI’S REQUIREMENTS FOR BULK
DRUG SUBSTANCE FOR MANUFACTURE OF DRUG PRODUCT SOLD IN THE TERRITORY PURSUANT TO
THE PROVISIONS OF A SUPPLY AGREEMENT FOR BULK DRUG SUBSTANCE FOR COMMERCIAL
PURPOSES (THE “COMMERCIAL SUPPLY AGREEMENT”), INCLUDING SUCH CUSTOMARY
REPRESENTATIONS, WARRANTIES, COVENANTS AND CONDITIONS AS ARE NECESSARY OR
APPROPRIATE FOR TRANSACTIONS OF THIS TYPE, NOT INCONSISTENT WITH THE TERMS AND
CONDITIONS HEREOF AND SATISFACTORY IN FORM AND SUBSTANCE TO THE PARTIES AND
THEIR LEGAL ADVISORS.  PROMPTLY AFTER THE START OF THE FIRST PHASE III CLINICAL
TRIAL BY MITSUBISHI, THE PARTIES WILL COMMENCE GOOD FAITH NEGOTIATIONS AND
SEPARATELY ENTER INTO THE COMMERCIAL SUPPLY AGREEMENT.  MITSUBISHI SHALL
PURCHASE SUCH BULK DRUG SUBSTANCE FROM VERTEX IN ACCORDANCE WITH THE TERMS OF
SECTION 6.3 HEREOF.  VERTEX MAY CONTRACT WITH ANY THIRD PARTY AS A MANUFACTURING
SUBCONTRACTOR.

 

4.3                                    LIMITATION ON SUPPLY OBLIGATION. 
NOTWITHSTANDING SECTIONS 4.1 OR 4.2 HEREOF, VERTEX SHALL HAVE NO OBLIGATION TO
SUPPLY BULK DRUG SUBSTANCE OR INVESTIGATIONAL DRUG PRODUCT TO MITSUBISHI WITH
RESPECT TO A DRUG PRODUCT UNLESS VERTEX IS DEVELOPING OR COMMERCIALIZING SUCH
DRUG PRODUCT; PROVIDED, HOWEVER, THAT IF VERTEX HAS SO SUPPLIED BULK DRUG
SUBSTANCE TO MITSUBISHI FOR COMMERCIAL PURPOSES BEFORE VERTEX CEASED DEVELOPMENT
OR COMMERCIALIZATION OF THE CORRESPONDING DRUG PRODUCT, THEN VERTEX SHALL BE
OBLIGATED TO CONTINUE THE SUPPLY OF SUCH BULK DRUG SUBSTANCE TO MITSUBISHI
PURSUANT TO THE TERMS SET FORTH

 

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IN SECTION 6.4 HEREOF; PROVIDED FURTHER, HOWEVER, THAT IN ANY OTHER CASE WHERE
MITSUBISHI WISHES TO DEVELOP OR COMMERCIALIZE A DRUG PRODUCT THAT VERTEX IS NOT
ITSELF DEVELOPING OR COMMERCIALIZING,  VERTEX SHALL GRANT TO MITSUBISHI A
NONEXCLUSIVE LICENSE (OR SUBLICENSE, AS APPROPRIATE) UNDER THE VERTEX
TECHNOLOGY, WITH THE RIGHT TO SUBLICENSE, TO MANUFACTURE AND HAVE MANUFACTURED
BULK DRUG SUBSTANCE WITH RESPECT TO SUCH DRUG PRODUCT TO THE EXTENT REQUIRED TO
USE, SELL, HAVE SOLD, OFFER TO SELL AND IMPORT SUCH DRUG PRODUCT IN THE
TERRITORY IN THE FIELD OF USE.  IN SUCH EVENT, AT MITSUBISHI’S EXPENSE, VERTEX
WILL ALSO DELIVER TO MITSUBISHI SUCH VERTEX TECHNOLOGY AS MAY THEN EXIST (IF
ANY) AND PROVIDE TO MITSUBISHI ANY APPLICABLE TECHNICAL SUPPORT IN CONNECTION
THEREWITH THAT IS REASONABLY NECESSARY TO ENABLE MITSUBISHI TO MANUFACTURE BULK
DRUG SUBSTANCE IN COMPLIANCE WITH ANY AND ALL CURRENT REGULATORY APPROVALS IN
THE TERRITORY.  SUCH VERTEX TECHNOLOGY SHALL BE DELIVERED TO MITSUBISHI IN SUCH
A WAY AS TO COMMUNICATE IT TO MITSUBISHI PROMPTLY, EFFECTIVELY AND ECONOMICALLY.

 

4.4                                    SECOND SOURCE OF SUPPLY FOR BULK DRUG
SUBSTANCE.  WITHIN TWO (2) YEARS AFTER THE RECEIPT OF REGULATORY APPROVAL FOR A
DRUG PRODUCT IN THE UNITED STATES, VERTEX AGREES TO HAVE AT LEAST
[***]MANUFACTURING SITES, IN DIFFERENT GEOGRAPHICAL LOCATIONS, APPROVED BY THE
REGULATORY AUTHORITIES FOR THE SUPPLY OF THE CORRESPONDING BULK DRUG SUBSTANCE
TO MITSUBISHI PURSUANT TO THE COMMERCIAL SUPPLY AGREEMENT.

 

4.5                                    MANUFACTURING TECHNOLOGY.  MANUFACTURING
TECHNOLOGY WHICH IS CONTROLLED BY ONE PARTY AND WHICH WOULD BE USEFUL TO THE
OTHER PARTY IN DISCHARGING ITS MANUFACTURING OBLIGATIONS HEREUNDER SHALL BE MADE
AVAILABLE TO THE MANUFACTURING PARTY FOR THAT PURPOSE, SUBJECT TO NEGOTIATION OF
A REASONABLE COMPENSATION ARRANGEMENT.  IF EITHER PARTY (A “CONTRACTING PARTY”)
ENGAGES AN AFFILIATE OR A THIRD PARTY TO PROVIDE ASSISTANCE TO THE CONTRACTING
PARTY IN THE DEVELOPMENT OF PROCESSES USEFUL FOR THE MANUFACTURE OF BULK DRUG
SUBSTANCE OR DRUG PRODUCT, THE CONTRACTING PARTY WILL MAKE REASONABLE EFFORTS TO
PROVIDE THAT ANY PROCESSES BELONGING TO THAT AFFILIATE OR THIRD PARTY AND MADE
AVAILABLE TO THE CONTRACTING PARTY WILL ALSO BE MADE AVAILABLE TO THE OTHER
PARTY ON THE SAME TERMS OFFERED TO THE CONTRACTING PARTY.

 

4.6                                    PACKAGING.  MITSUBISHI WILL BE
RESPONSIBLE FOR PACKAGING THE DRUG PRODUCT AND INVESTIGATIONAL DRUG PRODUCT FOR
DEVELOPMENT PURPOSES AND FOR COMMERCIAL SALE IN THE TERRITORY.

 

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ARTICLE V — COMMERCIALIZATION

 

5.1                                    GLOBAL MARKETING AND SALES.  MITSUBISHI
WILL PREPARE A MARKETING PLAN IN REASONABLE DETAIL FOR THE LAUNCH OF ANY DRUG
PRODUCT IN EACH COUNTRY OF THE TERRITORY, AND WILL PROVIDE THE PLAN TO VERTEX
NOT LATER THAN NINETY (90) DAYS AFTER SUBMISSION OF THE INITIAL APPLICATION FOR
REGULATORY APPROVAL OF THE DRUG PRODUCT TO A REGULATORY AUTHORITY IN SUCH
COUNTRY OF THE TERRITORY.

 

5.2                                    CO-LABELING.  THE LABELS, PACKAGING AND
INSERTS FOR THE DRUG PRODUCT PACKAGED FOR SALE IN THE TERRITORY, AND ANY
PROMOTIONAL MATERIALS THEREFOR, WILL BEAR THE COMPANY NAMES AND LOGOS OF BOTH
MITSUBISHI AND VERTEX WITH SUCH RELATIVE PROMINENCE AND IN SUCH LANGUAGE AS ARE
PERMITTED BY THE APPLICABLE LAWS, RULES, REGULATIONS AND CUSTOM OF SUCH COUNTRY,
WITH THE PREFERENCE THAT WHEREVER POSSIBLE SUCH NAMES AND LOGOS SHALL BE OF
EQUAL PROMINENCE AND VERTEX’S NAME SHALL BE WRITTEN IN THE ENGLISH LANGUAGE. 
MITSUBISHI WILL PERMIT VERTEX TO REVIEW ALL MATERIAL REGULATORY FILINGS IN THE
TERRITORY THAT RELATE TO PRODUCT LABELING, AND ALL PROPOSED LABELS, PACKAGING,
PACKAGE INSERTS AND PROMOTIONAL MATERIALS REQUIRED UNDER THE FOREGOING
PROVISIONS TO BEAR VERTEX’S NAME AND LOGO, PRIOR TO THE FILING OF ANY SUCH
MATERIAL WITH ANY REGULATORY AUTHORITY.

 

5.3                                    TRADEMARKS.  EACH PARTY SHALL HAVE THE
RIGHT TO REGISTER AND USE ITS OWN TRADEMARK FOR A DRUG PRODUCT, RESPECTIVELY. 
NOTWITHSTANDING THE FOREGOING, IN THE EVENT MITSUBISHI WISHES TO USE VERTEX’S
TRADEMARK FOR A DRUG PRODUCT, VERTEX HEREBY GRANTS TO MITSUBISHI AN EXCLUSIVE,
ROYALTY-FREE LICENSE TO USE VERTEX’S TRADEMARK FOR A DRUG PRODUCT FOR THE
ADVERTISING, PROMOTION, MARKETING, DISTRIBUTION AND SALE OF THE DRUG PRODUCT IN
THE FIELD OF USE IN THE TERRITORY.  MITSUBISHI SHALL HAVE THE RIGHT TO GRANT
SUBLICENSES UNDER THE FOREGOING EXCLUSIVE LICENSE TO ITS SUBLICENSEES PURSUANT
TO SECTION 2.1.2 HEREOF.

 

5.4                                    DUE DILIGENCE.  FOLLOWING THE FIRST
COMMERCIAL SALE OF A DRUG PRODUCT AND UNTIL THE EXPIRATION OF THIS AGREEMENT,
MITSUBISHI SHALL USE DILIGENT AND COMMERCIALLY REASONABLE EFFORTS TO KEEP THE
DRUG PRODUCT REASONABLY AVAILABLE TO THE PUBLIC IN THE TERRITORY, DEVOTING THE
SAME DEGREE OF ATTENTION AND DILIGENCE TO SUCH EFFORTS THAT IT DEVOTES TO SUCH
ACTIVITIES FOR OTHER OF ITS PRODUCTS OF COMPARABLE COMMERCIAL POTENTIAL. 
MITSUBISHI SHALL PROMPTLY NOTIFY VERTEX IF IT SHALL DETERMINE THAT THE MARKETING
AND SALE OF THE DRUG PRODUCT IN ANY COUNTRY IN THE TERRITORY IS NOT COMMERCIALLY
REASONABLE OR ECONOMICALLY PROFITABLE OR IF FOR OTHER UNFORESEEN REASONS FURTHER
COMMERCIAL SUPPORT OF THE DRUG PRODUCT IN ANY COUNTRY IS NO LONGER PRUDENT OR
PRACTICAL.  WITHIN [***] OF THE RECEIPT OF SUCH NOTICE, VERTEX SHALL NOTIFY
MITSUBISHI WHETHER IT WISHES THE MARKETING AND SALE OF THE DRUG PRODUCT IN SUCH
COUNTRY IN THE TERRITORY TO CONTINUE.  IF VERTEX NOTIFIES MITSUBISHI THAT IT
DOES NOT WISH SUCH MARKETING

 

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exhibit has been filed separately with the Commission.

 

AND SALE TO CONTINUE, THEN MITSUBISHI MAY IMMEDIATELY STOP THE MARKETING AND
SALE OF THE DRUG PRODUCT IN SUCH COUNTRY IN THE TERRITORY.  IF VERTEX NOTIFIES
MITSUBISHI THAT IT DOES WISH SUCH MARKETING AND SALE TO CONTINUE, THEN
MITSUBISHI SHALL CONTINUE TO MARKET AND SELL THE DRUG PRODUCT IN SUCH COUNTRY IN
THE TERRITORY FOR UP TO [***] FROM THE DATE OF MITSUBISHI’S INITIAL NOTICE TO
VERTEX OR SUCH EARLIER DATE UPON WHICH VERTEX OR A VERTEX LICENSEE BEGINS TO
MARKET AND SELL THE DRUG PRODUCT IN SUCH COUNTRY.  UPON THE TERMINATION OF
MITSUBISHI’S MARKETING AND SALE OF THE DRUG PRODUCT IN A COUNTRY, THIS AGREEMENT
SHALL BE DEEMED TO BE AMENDED TO DELETE SUCH COUNTRY FROM THE TERRITORY, ALL
RIGHTS WITH RESPECT TO SUCH COUNTRY UNDER THIS AGREEMENT SHALL REVERT TO VERTEX,
AND THE RIGHTS AND LICENSES GRANTED BY VERTEX TO MITSUBISHI PURSUANT TO THIS
AGREEMENT SHALL TERMINATE WITH RESPECT TO SUCH COUNTRY.  AT SUCH TIME
MITSUBISHI, AT THE REQUEST OF VERTEX, SHALL ALSO ASSIGN OR OTHERWISE TRANSFER TO
VERTEX ALL INDS, REGULATORY APPROVALS, OR APPLICATIONS THEREFOR, WITH RESPECT TO
A COMPOUND OR DRUG PRODUCT IN SUCH COUNTRY, AND VERTEX SHALL HAVE AN
IRREVOCABLE, FULLY PAID-UP NONEXCLUSIVE LICENSE, WITH THE RIGHT TO SUBLICENSE,
IN SUCH COUNTRY UNDER THE MITSUBISHI TECHNOLOGY TO DEVELOP, MANUFACTURE, HAVE
MANUFACTURED, USE, SELL, HAVE SOLD, OFFER TO SELL AND IMPORT BULK DRUG
SUBSTANCE, COMPOUND AND DRUG PRODUCT.  IN ADDITION, AT THE REQUEST OF VERTEX,
MITSUBISHI SHALL ASSIGN TO VERTEX FREE OF CHARGE ALL OF ITS OR ITS AFFILIATES’
RIGHT, TITLE AND INTEREST IN AND TO ANY TRADEMARKS USED FOR A DRUG PRODUCT IN
SUCH COUNTRY, AND SHALL EXECUTE, OR CAUSE ITS AFFILIATES TO EXECUTE, SUCH
DOCUMENTS OF TRANSFER OR ASSIGNMENT AND PERFORM, OR CAUSE ITS AFFILIATES TO
PERFORM, SUCH ACTS AS MAY BE REASONABLY NECESSARY TO TRANSFER OWNERSHIP OF SUCH
TRADEMARKS TO VERTEX AND TO ENABLE VERTEX TO CONTINUE TO MAINTAIN SUCH
TRADEMARKS AT VERTEX’S EXPENSE.

 

ARTICLE VI — PAYMENTS

 

6.1          License Fee.  In consideration of the grant of the license set
forth in Section 2.1 hereof and in recognition of VERTEX’s investment in the
Compounds prior to the Effective Date, MITSUBISHI will pay to VERTEX [***] on or
before [***].

 

6.2                                    MILESTONE PAYMENTS BY MITSUBISHI.

 

6.2.1                     PAYMENTS.  IN CONSIDERATION OF THE GRANT OF THE
LICENSE SET FORTH IN SECTION 2.1 HEREOF, MITSUBISHI WILL MAKE THE FOLLOWING
PAYMENTS TO VERTEX UPON THE ACHIEVEMENT OF ANY OF THE FOLLOWING MILESTONES WITH
RESPECT TO A COMPOUND, UPON THE FURTHER TERMS AND CONDITIONS SET FORTH BELOW.

 

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Information redacted pursuant to a confidential treatment request.  An
unredacted version of this
exhibit has been filed separately with the Commission.

 

Milestone

 

Payment

 

 

 

 

 

1. First dosing of the first Compound in a patient in a Phase Ib Clinical Trial
in the VERTEX Territory

 

US $

4,000,000

 

2. First dosing of the Compound in a human in a Phase I Clinical Trial in the
Territory

 

US $

3,000,000

 

3. First dosing of the Compound in a patient in a Phase II Clinical Trial in the
Territory

 

US $

2,000,000

 

4. First dosing of the Compound in a patient in a Phase III Clinical Trial in
the Territory

 

US $

2,000,000

 

5. First [***]

 

US $

[***]

 

6. First [***]

 

US $

[***]

 

 

 

US $

[***]

 

 

6.2.2                     PAYMENTS TO BE MADE ONLY ONCE.  MILESTONE PAYMENTS ARE
PAYABLE ONLY ONCE WITH RESPECT TO A COMPOUND, BUT SHALL BE PAYABLE WITH RESPECT
TO EACH COMPOUND THAT IS DEVELOPED.  IF ANY MILESTONE IS ACHIEVED WITH RESPECT
TO THE DEVELOPMENT OF A COMPOUND, ANY PREVIOUSLY UNPAID LOWER NUMBERED MILESTONE
FOR THE COMPOUND WILL BECOME IMMEDIATELY DUE AND PAYABLE.  NOTWITHSTANDING THE
FOREGOING, IF ONE COMPOUND IS REPLACED IN DEVELOPMENT BY THE OTHER COMPOUND
AFTER ANY ONE OR MORE MILESTONE PAYMENTS HAVE BEEN PAID WITH RESPECT TO THE
FIRST COMPOUND, THEN NO COMPARABLE MILESTONE PAYMENT SHALL BE PAYABLE HEREUNDER
WITH RESPECT TO THE REPLACEMENT COMPOUND IF THAT MILESTONE PAYMENT HAS ALREADY
BEEN PAID WITH RESPECT TO THE FIRST COMPOUND.

 

6.2.3       Timing and Method of Payments.  Milestone payments shall be made on
or before the [***] following the occurrence of the event giving rise to the
milestone payment obligation hereunder.  All payments shall be made by wire
transfer in U.S. dollars to the credit of such bank account as may be designated
by VERTEX in writing to MITSUBISHI from time to time.  Any payment which falls
due on a date which is a Saturday, Sunday, MITSUBISHI’s non-working day or a
legal holiday in Japan may be made on the next succeeding day which is not a
Saturday, Sunday, MITSUBISHI’s non-working day or a legal holiday in Japan.

 

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Information redacted pursuant to a confidential treatment request.  An
unredacted version of this
exhibit has been filed separately with the Commission.

 

6.3                                    COMMERCIAL SUPPLY OF DRUG PRODUCT.

 

6.3.1                      PURCHASE OF BULK DRUG SUBSTANCE.  EXCEPT AS OTHERWISE
PROVIDED HEREIN, VERTEX SHALL SUPPLY AND MITSUBISHI, ITS AFFILIATES AND
SUBLICENSEES SHALL PURCHASE FROM VERTEX PURSUANT TO THE COMMERCIAL SUPPLY
AGREEMENT ALL OF THEIR RESPECTIVE REQUIREMENTS OF BULK DRUG SUBSTANCE FOR
MANUFACTURE OF DRUG PRODUCT FOR SALE IN THE TERRITORY.

 

6.3.2                     SUPPLY PRICE.  IN THE COMMERCIAL SUPPLY AGREEMENT, THE
PARTIES SHALL DETERMINE THE PERCENTAGE OF THE NET SALES PRICE(S) FOR DRUG
PRODUCT(S) THAT SHALL BE ATTRIBUTED TO THE PRICE FOR BULK DRUG SUBSTANCE
SUPPLIED BY VERTEX FOR THE MANUFACTURE OF SUCH DRUG PRODUCT(S) SOLD IN THE
TERRITORY.

 

6.3.3                      PAYMENT.  PAYMENTS DUE TO VERTEX FOR THE SUPPLIED
BULK DRUG SUBSTANCE SHALL BE MADE BY MITSUBISHI WITHIN [***] OF RECEIPT FROM
VERTEX OF AN INVOICE FOR THE BULK DRUG SUBSTANCE PURCHASED BY MITSUBISHI UNDER
THE TERMS OF THE COMMERCIAL SUPPLY AGREEMENT, AND ANNUAL ADJUSTMENTS SHALL BE
MADE WITHIN SUCH TIME PERIODS AND APPLYING SUCH PROCEDURES AS THE PARTIES MAY
AGREE TO REFLECT THE ACTUAL NET SALES PRICE(S) FOR THE CORRESPONDING DRUG
PRODUCT(S) FOR EACH COUNTRY FOR THAT YEAR.  ANY NET ADJUSTMENTS SHALL BE
REMITTED WITHIN [***] OF DETERMINATION TO THE PARTY TO WHOM THE ADJUSTMENT IS
DUE.

 

6.4                                 PRODUCTION OF BULK DRUG SUBSTANCE BY
MITSUBISHI.  IF VERTEX DETERMINES AT ANY TIME THAT IT DOES NOT WISH TO SUPPLY
BULK DRUG SUBSTANCE OR INVESTIGATIONAL DRUG PRODUCT TO MITSUBISHI, ITS
AFFILIATES AND SUBLICENSEES, VERTEX SHALL PROVIDE MITSUBISHI (I) [***] PRIOR
WRITTEN NOTICE OF SUCH DETERMINATION IF VERTEX HAS ANY AFFILIATE, SUBCONTRACTOR,
OR VERTEX LICENSEE THAT MANUFACTURES BULK DRUG SUBSTANCE OR INVESTIGATIONAL DRUG
PRODUCT AND AGREES TO SUPPLY BULK DRUG SUBSTANCE OR INVESTIGATIONAL DRUG PRODUCT
TO MITSUBISHI [***], OR (II) IN A CASE OTHER THAN THE CASE SET FORTH IN CLAUSE
(I) ABOVE, [***] PRIOR WRITTEN NOTICE; PROVIDED, HOWEVER, THAT, IN THE CASE OF
CLAUSE (II) SET FORTH ABOVE, VERTEX SHALL STOCK SUFFICIENT BULK DRUG SUBSTANCE
TO PERMIT MITSUBISHI TO MANUFACTURE DRUG PRODUCTS OR TO PERMIT VERTEX TO
MANUFACTURE INVESTIGATIONAL DRUG PRODUCT FOR MITSUBISHI FOR A [***] AND SHALL
SUPPLY SUCH BULK DRUG SUBSTANCE OR INVESTIGATIONAL DRUG PRODUCT TO MITSUBISHI
FOR SUCH [***] AT A PRICE EQUAL TO [***], BUT OTHERWISE PURSUANT TO THE TERMS
AND CONDITIONS OF THE COMMERCIAL SUPPLY AGREEMENT OR THE DEVELOPMENT SUPPLY
AGREEMENT, AS APPLICABLE.  FOLLOWING THE EXPIRATION OF VERTEX’S OBLIGATION TO
SUPPLY BULK DRUG SUBSTANCE OR INVESTIGATIONAL DRUG PRODUCT TO MITSUBISHI, THE
COMMERCIAL SUPPLY AGREEMENT OR THE DEVELOPMENT SUPPLY AGREEMENT, AS APPLICABLE,
SHALL TERMINATE.  UPON VERTEX’S NOTICE PURSUANT TO THIS SECTION 6.4 OF ITS

 

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Information redacted pursuant to a confidential treatment request.  An
unredacted version of this
exhibit has been filed separately with the Commission.

 

DETERMINATION TO DISCONTINUE SUPPLY, MITSUBISHI SHALL HAVE THE SOLE RIGHT AND
RESPONSIBILITY, AT ITS EXPENSE, FOR THE MANUFACTURE OF ALL BULK DRUG SUBSTANCE
TO MEET ITS, ITS AFFILIATES’ AND SUBLICENSEES’ REQUIREMENTS IN CONNECTION WITH
THE DEVELOPMENT AND COMMERCIAL SALE OF THE DRUG PRODUCT IN THE TERRITORY;
PROVIDED, HOWEVER, THAT VERTEX SHALL HAVE THE RIGHT TO SO MANUFACTURE AND SUPPLY
BULK DRUG SUBSTANCE PURSUANT TO ITS OBLIGATION SET FORTH IN THIS SECTION 6.4. 
UPON PROVIDING SUCH NOTICE TO MITSUBISHI, VERTEX SHALL GRANT TO MITSUBISHI A
NONEXCLUSIVE LICENSE (OR SUBLICENSE, AS APPROPRIATE) UNDER THE VERTEX
TECHNOLOGY, WITH THE RIGHT TO SUBLICENSE, TO MANUFACTURE AND HAVE MANUFACTURED
BULK DRUG SUBSTANCE TO THE EXTENT REQUIRED TO USE, SELL, HAVE SOLD, OFFER TO
SELL AND IMPORT DRUG PRODUCTS IN THE TERRITORY IN THE FIELD OF USE.  IN SUCH
EVENT, AT MITSUBISHI’S EXPENSE, VERTEX WILL ALSO DELIVER TO MITSUBISHI THE
VERTEX TECHNOLOGY AND PROVIDE TO MITSUBISHI THE TECHNICAL SUPPORT IN CONNECTION
THEREWITH REASONABLY NECESSARY TO ENABLE MITSUBISHI TO MANUFACTURE BULK DRUG
SUBSTANCE IN COMPLIANCE WITH ANY AND ALL CURRENT REGULATORY APPROVALS IN THE
TERRITORY.  SUCH VERTEX TECHNOLOGY SHALL BE DELIVERED TO MITSUBISHI IN SUCH A
WAY AS TO COMMUNICATE IT TO MITSUBISHI PROMPTLY, EFFECTIVELY AND ECONOMICALLY.

 

6.5                                    ROYALTIES ON NET SALES OF DRUG PRODUCT;
SALES REPORTS.

 

6.5.1                      ROYALTIES.  MITSUBISHI SHALL PAY TO VERTEX ANNUAL
ROYALTIES AT THE RATES SET FORTH BELOW, INCLUDING THE PERCENTAGE OF THE NET
SALES PRICE(S) FOR DRUG PRODUCT(S) THAT SHALL BE ATTRIBUTED TO THE SUPPLY PRICE
FOR BULK DRUG SUBSTANCE DETERMINED BY THE PARTIES PURSUANT TO SECTION 6.3.2:

 

(A)                                       [***]

(B)                                       [***]

(C)                                       [***]

 

6.5.2                      ROYALTIES IN THE EVENT OF MANUFACTURE OF BULK DRUG
SUBSTANCE PURSUANT TO SECTIONS 4.3 OR 6.4.  NOTWITHSTANDING SECTION 6.5.1, IN
THE EVENT THAT BULK DRUG SUBSTANCE IS MANUFACTURED AND SUPPLIED PURSUANT TO
SECTIONS 4.3 OR 6.4 HEREOF, THE RATES OF THE ANNUAL ROYALTIES TO BE PAID BY
MITSUBISHI TO VERTEX UNDER THIS AGREEMENT SHALL BE CHANGED FROM THE RATES SET
FORTH IN SECTION 6.5.1 TO THE RATES SET FORTH BELOW:

 

(A)                                       [***] ([***]%) OF THE FIRST $[***] OF
ANNUAL NET SALES;

(B)                                       [***] ([***]%) OF THE ANNUAL NET SALES
OVER $[***] AND LESS THAN OR EQUAL TO $[***]; AND

(C)                                       [***] ([***]%) OF THE ANNUAL NET SALES
OVER $[***].

 

27

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Information redacted pursuant to a confidential treatment request.  An
unredacted version of this
exhibit has been filed separately with the Commission.

 

6.5.3                      DISCUSSION OF ROYALTY RATE REDUCTION.  (I) AT LEAST
[***] PRIOR TO THE EXPIRATION IN A COUNTRY IN THE TERRITORY OF ALL VERTEX
PATENTS OR (II) UPON [***] [***]

 

6.5.4                      REPORTS.  DURING THE TERM OF THIS AGREEMENT AND AFTER
THE FIRST COMMERCIAL SALE OF A DRUG PRODUCT IN THE TERRITORY, MITSUBISHI SHALL
FURNISH OR CAUSE TO BE FURNISHED TO VERTEX ON A QUARTERLY BASIS A WRITTEN REPORT
COVERING SUCH CALENDAR QUARTER SHOWING (I) THE NET SALES PRICE(S) AND TOTAL NET
SALES IN EACH COUNTRY IN THE TERRITORY DURING SUCH CALENDAR QUARTER;
(II) AMOUNTS DUE VERTEX UNDER SECTIONS 6.5.1 OR 6.5.2 HEREOF WITH RESPECT TO
SUCH NET SALES, AND THE BASIS FOR CALCULATING THOSE AMOUNTS DUE;
(III) WITHHOLDING TAXES, IF ANY, REQUIRED BY LAW TO BE DEDUCTED IN RESPECT OF
ANY SUCH SALES OR PAYMENTS, AND EVIDENCE OF PAYMENT THEREOF; AND
(IV) DISPOSITIONS OF THE DRUG PRODUCT OTHER THAN PURSUANT TO SALES FOR CASH. 
WITH RESPECT TO THE NET SALES PRICE(S) OF THE DRUG PRODUCT OR NET SALES RECEIVED
IN A CURRENCY OTHER THAN U.S. DOLLARS, THE NET SALES PRICE(S) OR NET SALES SHALL
BE EXPRESSED IN THE DOMESTIC CURRENCY OF THE PARTY MAKING THE SALE, TOGETHER
WITH THE U.S. DOLLAR EQUIVALENT OF THE AMOUNT, CALCULATED USING THE RATE
REPORTED IN THE WALL STREET JOURNAL FOR THE PURCHASE OF U.S. DOLLARS WITH SUCH
CURRENCY ON THE LAST BUSINESS DAY FOR THE CALENDAR QUARTER FOR WHICH THE REPORT
IS BEING PREPARED.  THE FOREGOING QUARTERLY REPORTS SHALL BE DUE ON OR BEFORE
THE FORTY-FIFTH (45TH) DAY FOLLOWING THE CLOSE OF EACH CALENDAR QUARTER. 
MITSUBISHI WILL ALSO PROVIDE VERTEX, WITHIN TEN (10) BUSINESS DAYS AFTER THE END
OF EACH CALENDAR QUARTER, WITH A REPORT SHOWING MITSUBISHI’S BEST ESTIMATE OF
TOTAL NET SALES FOR THAT CALENDAR QUARTER BASED ON INFORMATION AVAILABLE TO
MITSUBISHI AT THE TIME OF THE REPORT.

 

6.5.5                      AUDIT.  MITSUBISHI SHALL KEEP AND SHALL CAUSE TO BE
KEPT ACCURATE RECORDS IN SUFFICIENT DETAIL TO ENABLE THE AMOUNTS DUE HEREUNDER
TO BE DETERMINED AND TO BE VERIFIED BY VERTEX.  UPON THE WRITTEN REQUEST OF
VERTEX, AT VERTEX’S EXPENSE AND NOT MORE THAN ONCE IN ANY CALENDAR YEAR,
MITSUBISHI SHALL PERMIT AN INDEPENDENT ACCOUNTANT OF NATIONAL PROMINENCE
SELECTED BY VERTEX, AND APPROVED BY MITSUBISHI, TO HAVE ACCESS DURING NORMAL
BUSINESS HOURS TO THOSE RECORDS OF MITSUBISHI AS MAY BE REASONABLY NECESSARY TO
VERIFY THE ACCURACY OF THE SALES REPORTS FURNISHED BY MITSUBISHI PURSUANT TO
THIS SECTION 6.5, IN RESPECT OF ANY CALENDAR YEAR ENDING NOT MORE [***] PRIOR TO
THE DATE OF SUCH NOTICE.  SUCH ACCOUNTANT SHALL NOT DISCLOSE ANY INFORMATION
EXCEPT THAT WHICH SHOULD PROPERLY BE CONTAINED IN A SALES REPORT REQUIRED UNDER
THIS AGREEMENT.  MITSUBISHI SHALL INCLUDE IN EACH SUBLICENSE ENTERED INTO BY IT
PURSUANT TO THIS AGREEMENT A PROVISION REQUIRING THE SUBLICENSEE TO KEEP AND
MAINTAIN ADEQUATE RECORDS OF SALES MADE PURSUANT TO SUCH SUBLICENSE AND TO GRANT
ACCESS TO SUCH RECORDS BY THE AFOREMENTIONED INDEPENDENT ACCOUNTANT FOR THE

 

28

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Information redacted pursuant to a confidential treatment request.  An
unredacted version of this
exhibit has been filed separately with the Commission.

 

REASONS SPECIFIED IN THIS SECTION 6.5.  UPON THE EXPIRATION OF THREE (3) YEARS
FOLLOWING THE END OF ANY CALENDAR YEAR, THE CALCULATION OF AMOUNTS PAYABLE WITH
RESPECT TO SUCH CALENDAR YEAR, UNLESS THEN IN DISPUTE, SHALL BE BINDING AND
CONCLUSIVE UPON VERTEX, AND MITSUBISHI AND ITS AFFILIATES AND SUBLICENSEES SHALL
BE RELEASED FROM ANY LIABILITY OR ACCOUNTABILITY WITH RESPECT TO PAYMENTS FOR
SUCH YEAR.  THE REPORT PREPARED BY SUCH INDEPENDENT ACCOUNTANT, A COPY OF WHICH
SHALL BE SENT OR OTHERWISE PROVIDED TO MITSUBISHI BY SUCH INDEPENDENT ACCOUNTANT
AT THE SAME TIME IT IS SENT OR OTHERWISE PROVIDED TO VERTEX, SHALL CONTAIN THE
CONCLUSIONS OF SUCH INDEPENDENT ACCOUNTANT REGARDING THE AUDIT AND WILL SPECIFY
THAT THE AMOUNTS PAID TO VERTEX PURSUANT THERETO WERE CORRECT OR, IF INCORRECT,
THE AMOUNT OF ANY UNDERPAYMENT OR OVERPAYMENT.  IF SUCH INDEPENDENT ACCOUNTANT’S
REPORT SHOWS ANY UNDERPAYMENT, MITSUBISHI SHALL REMIT OR SHALL CAUSE ITS
AFFILIATES OR SUBLICENSEES TO REMIT TO VERTEX WITHIN THIRTY (30) DAYS AFTER
MITSUBISHI’ RECEIPT OF SUCH REPORT, (I) THE AMOUNT OF SUCH UNDERPAYMENT AND
(II) IF SUCH UNDERPAYMENT EXCEEDS FIVE PERCENT (5%) OF THE TOTAL AMOUNT OWED FOR
THE CALENDAR YEAR THEN BEING AUDITED, THE REASONABLE AND NECESSARY FEES AND
EXPENSES OF SUCH INDEPENDENT ACCOUNTANT PERFORMING THE AUDIT, SUBJECT TO
REASONABLE SUBSTANTIATION THEREOF.  ANY OVERPAYMENTS SHALL BE FULLY CREDITABLE
AGAINST AMOUNTS PAYABLE IN SUBSEQUENT PAYMENT PERIODS.  VERTEX AGREES THAT ALL
INFORMATION SUBJECT TO REVIEW UNDER THIS SECTION 6.5 OR UNDER ANY SUBLICENSE
AGREEMENT IS CONFIDENTIAL AND THAT VERTEX SHALL RETAIN AND CAUSE ITS ACCOUNTANT
TO RETAIN ALL SUCH INFORMATION IN CONFIDENCE.

 

6.5.6                      INTEREST.  IN CASE OF ANY DELAY IN PAYMENT BY ONE
PARTY TO THE OTHER HEREUNDER, INTEREST AT [***] SHALL BE ASSESSED FROM THE [***]
DAY AFTER THE DUE DATE OF THE PAYMENT UNTIL THE DATE PAID, AND SHALL BE DUE FROM
SUCH PARTY UPON PRIOR WRITTEN NOTICE FROM THE OTHER PARTY.  THE APPLICABLE [***]
SHALL BE THE RATE IN EFFECT ON THE [***] DAY AFTER THE PAYMENT IS DUE.

 

6.6                                    WITHHOLDING TAX.  IF DURING THE TERM OF
THIS AGREEMENT, WITHHOLDING TAX IS REQUIRED BY LAW TO BE DEDUCTED FROM ANY
PAYMENTS REQUIRED TO BE MADE BY MITSUBISHI TO VERTEX HEREUNDER, (I) SUCH TAX
WILL BE DEDUCTED FROM THE OTHERWISE REMITTABLE ROYALTY AFTER APPLYING FOR TAX
RATE REDUCTION UNDER THE APPLICABLE TREATIES FOR AVOIDANCE OF DOUBLE TAXATION,
(II) SUCH TAX WILL BE PAID TO THE PROPER TAX AUTHORITIES, AND (III) A
CERTIFICATE OF TAX WILL BE SENT TO VERTEX PROMPTLY AFTER RECEIPT FROM THE
COMPETENT TAX AUTHORITY.

 

6.7                                    CURRENCY OF PAYMENT.  ALL PAYMENTS
HEREUNDER SHALL BE MADE IN U.S. DOLLARS.  IF AT ANY TIME LEGAL RESTRICTIONS
PREVENT THE PROMPT REMITTANCE OF ANY PAYMENTS WITH RESPECT TO ANY COUNTRY OF THE
TERRITORY WHERE A DRUG PRODUCT IS SOLD, MITSUBISHI OR ITS AFFILIATES OR

 

29

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Information redacted pursuant to a confidential treatment request.  An
unredacted version of this
exhibit has been filed separately with the Commission.

 

SUBLICENSEES SHALL HAVE THE RIGHT AND OPTION TO MAKE SUCH PAYMENTS BY DEPOSITING
THE AMOUNT THEREOF IN LOCAL CURRENCY TO VERTEX’S ACCOUNT IN A BANK OR DEPOSITORY
IN SUCH COUNTRY.

 

ARTICLE VII — TECHNOLOGY

 

7.1                                    OWNERSHIP.  ALL KNOW-HOW INVENTED,
DISCOVERED OR DEVELOPED EXCLUSIVELY BY EITHER PARTY OR ITS AFFILIATES (DIRECTLY
OR THROUGH OTHERS ACTING ON ITS BEHALF) SHALL BE OWNED AND CONTROLLED BY SUCH
PARTY, SUBJECT TO THE PROVISIONS OF THIS AGREEMENT.  ALL PATENTS CLAIMING BULK
DRUG SUBSTANCE, A COMPOUND OR A DRUG PRODUCT, OR A METHOD OF MAKING OR USING THE
SAME OR AN IMPROVEMENT TO A PATENT COVERING ANY OF THE FOREGOING, INVENTED BY
EITHER PARTY OR ITS AFFILIATES (DIRECTLY OR THROUGH OTHERS ACTING ON ITS BEHALF)
SHALL BE OWNED AND CONTROLLED BY SUCH PARTY, SUBJECT TO THE PROVISIONS OF THIS
AGREEMENT.  ALL KNOW-HOW AND PATENTS CLAIMING BULK DRUG SUBSTANCE, A COMPOUND OR
A DRUG PRODUCT, OR A METHOD OF MAKING OR USING THE SAME OR AN IMPROVEMENT TO A
PATENT COVERING ANY OF THE FOREGOING, INVENTED, DISCOVERED, OR DEVELOPED, AS
APPLICABLE, JOINTLY BY THE PARTIES OR THEIR AFFILIATES (DIRECTLY OR THROUGH
OTHERS ACTING ON THEIR BEHALF) SHALL BE OWNED AND CONTROLLED JOINTLY.  SUCH
KNOW-HOW THAT IS OWNED AND CONTROLLED JOINTLY BY THE PARTIES OR THEIR AFFILIATES
SHALL BE “JOINT KNOW-HOW,” AND SUCH PATENTS THAT ARE OWNED AND CONTROLLED
JOINTLY BY THE PARTIES OR THEIR AFFILIATES SHALL BE “JOINT PATENTS.”  FOR THE
AVOIDANCE OF DOUBT, EITHER PARTY SHALL HAVE THE RIGHT, INCLUDING THE RIGHT TO
SUBLICENSE, TO PRACTICE AND USE THE JOINT KNOW-HOW AND THE JOINT PATENTS
WORLDWIDE WITHOUT ANY PAYMENT TO THE OTHER PARTY.

 

7.2                                    PATENT PROCUREMENT AND MAINTENANCE. 
VERTEX SHALL BE RESPONSIBLE FOR THE PREPARATION, FILING, PROSECUTION AND
MAINTENANCE OF ALL VERTEX PATENTS AND ANY JOINT PATENTS, AND MITSUBISHI SHALL BE
RESPONSIBLE FOR THE PREPARATION, FILING, PROSECUTION AND MAINTENANCE OF ALL
MITSUBISHI PATENTS.  VERTEX, WITH THE ADVICE OF MITSUBISHI, SHALL DETERMINE THE
COUNTRIES IN THE TERRITORY IN WHICH PATENT APPLICATIONS FOR VERTEX PATENTS WILL
BE FILED.  MITSUBISHI, WITH THE ADVICE OF VERTEX, SHALL DETERMINE THE COUNTRIES
IN THE VERTEX TERRITORY IN WHICH PATENT APPLICATIONS FOR MITSUBISHI PATENTS WILL
BE FILED.  THE PARTIES SHALL DISCUSS AND DETERMINE THE COUNTRIES IN THE
TERRITORY IN WHICH PATENT APPLICATIONS FOR JOINT PATENTS WILL BE FILED.  IF
VERTEX DECIDES NOT TO PROSECUTE, AND MAINTAIN ANY VERTEX PATENT FILED IN A
COUNTRY IN THE TERRITORY, WITHOUT FIRST HAVING FILED A SUBSTITUTE THEREFOR,
VERTEX SHALL ASSIGN ITS RIGHT, TITLE AND INTEREST IN AND TO SUCH VERTEX PATENT
IN SUCH COUNTRY TO MITSUBISHI FREE OF CHARGE, IF MITSUBISHI SO DESIRES, AND
SHALL EXECUTE SUCH DOCUMENTS OF TRANSFER OR ASSIGNMENT AND PERFORM SUCH ACTS AS
MAY BE REASONABLY NECESSARY TO TRANSFER SOLE OWNERSHIP

 

30

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Information redacted pursuant to a confidential treatment request.  An
unredacted version of this
exhibit has been filed separately with the Commission.

 

OF SUCH VERTEX PATENT TO MITSUBISHI AND TO ENABLE MITSUBISHI TO CONTINUE
PROSECUTION OR MAINTENANCE OF SUCH VERTEX PATENT.  IN SUCH CASE, SUCH VERTEX
PATENTS SHALL NOT BE DEEMED TO BE VERTEX PATENTS THEREAFTER WITH RESPECT TO SUCH
COUNTRY.  IF MITSUBISHI DECIDES NOT TO PROSECUTE, AND MAINTAIN ANY MITSUBISHI
PATENT FILED IN A COUNTRY IN THE VERTEX TERRITORY, WITHOUT FIRST HAVING FILED A
SUBSTITUTE THEREFOR, MITSUBISHI SHALL ASSIGN ITS RIGHT, TITLE AND INTEREST IN
AND TO SUCH MITSUBISHI PATENT IN SUCH COUNTRY TO VERTEX FREE OF CHARGE, IF
VERTEX SO DESIRES, AND SHALL EXECUTE SUCH DOCUMENTS OF TRANSFER OR ASSIGNMENT
AND PERFORM SUCH ACTS AS MAY BE REASONABLY NECESSARY TO TRANSFER SOLE OWNERSHIP
OF SUCH MITSUBISHI PATENT TO VERTEX AND TO ENABLE VERTEX TO CONTINUE PROSECUTION
OR MAINTENANCE OF SUCH MITSUBISHI PATENT.  IN SUCH CASE, SUCH MITSUBISHI PATENTS
SHALL NOT BE DEEMED TO BE MITSUBISHI PATENTS WITH RESPECT TO SUCH COUNTRY. 
VERTEX SHALL PROVIDE DRAFT APPLICATIONS FOR JOINT PATENTS TO MITSUBISHI
SUFFICIENTLY IN ADVANCE OF FILING FOR MITSUBISHI TO HAVE THE OPPORTUNITY TO
COMMENT THEREON.  VERTEX SHALL FURNISH MITSUBISHI WITH COPIES OF ALL SUBSTANTIVE
COMMUNICATIONS BETWEEN VERTEX AND APPLICABLE PATENT OFFICES REGARDING THE JOINT
PATENTS.  VERTEX AND MITSUBISHI SHALL EACH PROVIDE THE JDC WITH PERIODIC REPORTS
LISTING, BY NAME, ANY VERTEX PATENTS OR MITSUBISHI PATENTS, RESPECTIVELY, FILED
BY IT IN THE TERRITORY OR THE VERTEX TERRITORY, RESPECTIVELY, ALONG WITH A
GENERAL SUMMARY OF THE CLAIMS MADE AND THE JURISDICTIONS OF FILING IN THE
TERRITORY OR THE VERTEX TERRITORY, RESPECTIVELY.  EACH PARTY WILL PROVIDE SUCH
ASSISTANCE AS THE OTHER PARTY MAY REASONABLY REQUEST IN ORDER TO PROTECT THE
OTHER PARTY’S RIGHTS TO THE PATENTS FOR WHICH IT IS RESPONSIBLE UNDER THIS
SECTION 7.2.

 

7.3                                    COSTS.  VERTEX SHALL BE RESPONSIBLE FOR
PAYING ITS COSTS INCURRED FOR PREPARATION, FILING, PROSECUTION AND MAINTENANCE
OF THE VERTEX PATENTS WORLDWIDE AND OF THE JOINT PATENTS IN THE VERTEX
TERRITORY.  MITSUBISHI SHALL BE RESPONSIBLE FOR PAYING ITS COSTS INCURRED FOR
PREPARATION, FILING, PROSECUTION AND MAINTENANCE OF THE MITSUBISHI PATENTS
WORLDWIDE AND OF THE JOINT PATENTS IN THE TERRITORY.  EITHER PARTY MAY AT ANY
TIME ELECT, BY WRITTEN NOTICE TO THE OTHER PARTY, TO DISCONTINUE SUPPORT FOR ONE
OR MORE JOINT PATENTS (A “DISCONTINUED PATENT”) AND SHALL NOT BE RESPONSIBLE FOR
ANY COSTS RELATING TO A DISCONTINUED PATENT WHICH ARE INCURRED MORE THAN SIXTY
(60) DAYS AFTER RECEIPT OF THAT NOTICE BY THE OTHER PARTY.  IN SUCH CASE, THE
OTHER PARTY MAY ELECT AT ITS SOLE DISCRETION TO CONTINUE PREPARATION, FILING,
PROSECUTION OR MAINTENANCE OF THE DISCONTINUED PATENT AT ITS SOLE EXPENSE.  THE
PARTY SO CONTINUING SHALL OWN ANY SUCH DISCONTINUED PATENT, AND THE PARTY
ELECTING TO DISCONTINUE SUPPORT SHALL EXECUTE SUCH DOCUMENTS OF TRANSFER OR
ASSIGNMENT AND PERFORM SUCH ACTS AS MAY

 

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Information redacted pursuant to a confidential treatment request.  An
unredacted version of this
exhibit has been filed separately with the Commission.

 

BE REASONABLY NECESSARY TO TRANSFER SOLE OWNERSHIP OF THE DISCONTINUED PATENT TO
THE OTHER PARTY AND ENABLE THAT PARTY TO FILE OR TO CONTINUE PROSECUTION OR
MAINTENANCE OF THE DISCONTINUED PATENT, IF THE OTHER PARTY ELECTS TO DO SO. 
DISCONTINUATION MAY BE ON A COUNTRY-BY-COUNTRY BASIS OR FOR A PATENT SERIES IN
TOTAL.

 

7.4                                    INFRINGEMENT CLAIMS BY THIRD PARTIES.

 

7.4.1                      NOTICE.  IF THE MANUFACTURE, IMPORT, USE, OFFER TO
SELL OR SALE OF BULK DRUG SUBSTANCE, A COMPOUND AND/OR A DRUG PRODUCT RESULTS IN
A CLAIM OR REASONABLE APPREHENSION OF A CLAIM AGAINST A PARTY FOR PATENT
INFRINGEMENT OR FOR INDUCING OR CONTRIBUTING TO PATENT INFRINGEMENT
(“INFRINGEMENT CLAIM”), THE PARTY FIRST HAVING NOTICE OF AN INFRINGEMENT CLAIM
SHALL PROMPTLY NOTIFY THE OTHER IN WRITING.  THE NOTICE SHALL SET FORTH THE
FACTS OF THE INFRINGEMENT CLAIM IN REASONABLE DETAIL.  THE PARTIES SHALL DISCUSS
HOW TO RESPOND TO SUCH INFRINGEMENT CLAIM.

 

7.4.2                      THIRD-PARTY LICENSES.  IF PRACTICING THE VERTEX
TECHNOLOGY IN CONNECTION WITH THE IMPORT, USE, OFFER TO SELL OR SALE OF A
COMPOUND AND/OR A DRUG PRODUCT IN ANY COUNTRY IN THE TERRITORY WOULD REQUIRE A
LICENSE UNDER A THIRD PARTY’S PATENT, THEN VERTEX WILL USE REASONABLE EFFORTS TO
OBTAIN A LICENSE, WITH A RIGHT TO SUBLICENSE TO MITSUBISHI, UNDER THE THIRD
PARTY’S PATENT, UNDER TERMS REASONABLY ACCEPTABLE TO BOTH VERTEX AND
MITSUBISHI.  VERTEX SHALL GRANT A SUBLICENSE TO MITSUBISHI UNDER SUCH THIRD
PARTY’S PATENT, SUBJECT TO THE FINANCIAL OBLIGATION SET FORTH IN THIS
SECTION 7.4.2.  VERTEX AND MITSUBISHI WILL EQUALLY BEAR ANY FINANCIAL OBLIGATION
PAYABLE PURSUANT TO THE LICENSE OF A THIRD-PARTY PATENT IN THE TERRITORY;
PROVIDED, HOWEVER, THAT VERTEX SHALL NOT BE REQUIRED TO BEAR ANY FINANCIAL
OBLIGATION UNDER ANY LICENSE OF SUCH THIRD-PARTY PATENTS THAT TOGETHER WITH ANY
OTHER SUCH LICENSE AND WITH ANY FINANCIAL OBLIGATION PURSUANT TO ANY VOLUNTARY
FINAL DISPOSITION OF AN ACTION UNDER SECTION 7.4.3 WOULD EFFECTIVELY RESULT IN
AN AGGREGATE REDUCTION OF THE ROYALTIES ON THE NET SALES OF DRUG PRODUCTS IN THE
COUNTRY OR COUNTRIES IN THE TERRITORY TO WHICH SUCH LICENSES RELATE BY [***].

 

7.4.3                      DISCONTINUED SALES, LICENSE OR DEFENSE OF SUIT.  IF
THE REQUIRED LICENSE IS EITHER UNAVAILABLE OR ITS TERMS ARE UNACCEPTABLE TO
EITHER VERTEX OR MITSUBISHI, THEN MITSUBISHI MAY ELECT IN ITS SOLE DISCRETION TO
DISCONTINUE SALES OF THE DRUG PRODUCT IN SUCH COUNTRY IN THE TERRITORY OR TO
UNDERTAKE THE DEFENSE OF AN INFRINGEMENT CLAIM OR THE PROSECUTION OF A
DECLARATORY JUDGMENT ACTION WITH RESPECT TO THE THIRD-PARTY PATENTS.  THE
PARTIES SHALL SHARE EQUALLY ALL OUT-OF-POCKET COSTS AND EXPENSES INCURRED IN
CONDUCTING THE DEFENSE OF SUCH INFRINGEMENT CLAIMS OR THE PROSECUTION OF SUCH
DECLARATORY JUDGMENT ACTIONS, INCLUDING THE

 

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exhibit has been filed separately with the Commission.

 

INVESTIGATION AND SETTLEMENT THEREOF; PROVIDED, HOWEVER, NO SETTLEMENT OR
CONSENT JUDGMENT OR OTHER VOLUNTARY FINAL DISPOSITION OF A SUIT UNDER THIS
SECTION 7.4.3 MAY BE ENTERED INTO WITHOUT THE JOINT CONSENT OF VERTEX AND
MITSUBISHI (WHICH CONSENT SHALL NOT BE UNREASONABLY WITHHELD).  IF MITSUBISHI IS
CONDUCTING THE DEFENSE OF AN INFRINGEMENT CLAIM OR THE PROSECUTION OF A
DECLARATORY JUDGMENT ACTION, AND VERTEX IS A PARTY TO THE ACTION, THEN VERTEX ‘S
DEFENSE COSTS SHALL BE REPORTED TO MITSUBISHI AND CREDITED AGAINST VERTEX’S
SHARE OF OVERALL DEFENSE COSTS.  VERTEX AND MITSUBISHI WILL EQUALLY BEAR ANY
FINANCIAL OBLIGATION PAYABLE PURSUANT TO A SETTLEMENT, CONSENT JUDGMENT OR OTHER
VOLUNTARY FINAL DISPOSITION OF AN ACTION PURSUANT TO THIS SECTION 7.4.3;
PROVIDED, HOWEVER, THAT VERTEX SHALL NOT BE REQUIRED TO BEAR ANY FINANCIAL
OBLIGATION UNDER ANY SUCH VOLUNTARY FINAL DISPOSITION OF AN ACTION UNDER THIS
SECTION 7.4.3 THAT TOGETHER WITH ANY OTHER SUCH VOLUNTARY FINAL DISPOSITIONS AND
ANY LICENSES OF THIRD-PARTY PATENTS PURSUANT TO SECTION 7.4.2 WOULD EFFECTIVELY
RESULT IN AN AGGREGATE REDUCTION OF THE ROYALTIES ON THE NET SALES OF DRUG
PRODUCTS IN THE COUNTRY OR COUNTRIES IN THE TERRITORY TO WHICH SUCH LICENSES
RELATE [***]

 

7.5                                    INFRINGEMENT CLAIMS AGAINST THIRD
PARTIES.

 

7.5.1                      PROTECTION OF TECHNOLOGY.  VERTEX AND MITSUBISHI EACH
AGREE TO TAKE REASONABLE ACTIONS TO PROTECT THE VERTEX TECHNOLOGY AND THE
MITSUBISHI TECHNOLOGY, RESPECTIVELY, FROM INFRINGEMENT AND FROM UNAUTHORIZED
POSSESSION OR USE.

 

7.5.2                      INFRINGEMENT OF TECHNOLOGY.  IF ANY VERTEX PATENTS,
MITSUBISHI PATENTS OR JOINT PATENTS ARE INFRINGED OR CLAIMED TO BE INVALID OR
VERTEX KNOW-HOW, MITSUBISHI KNOW-HOW OR JOINT KNOW-HOW IS MISAPPROPRIATED, AS
THE CASE MAY BE, BY A THIRD PARTY, THE PARTY FIRST HAVING KNOWLEDGE OF SUCH
INFRINGEMENT, CLAIM OR MISAPPROPRIATION, OR KNOWLEDGE OF A REASONABLE
PROBABILITY OF SUCH INFRINGEMENT, CLAIM OR MISAPPROPRIATION, SHALL PROMPTLY
NOTIFY THE OTHER IN WRITING.  THE NOTICE SHALL SET FORTH THE FACTS OF SUCH
INFRINGEMENT, CLAIM OR MISAPPROPRIATION IN REASONABLE DETAIL.  THE OWNER OF THE
TECHNOLOGY, OR VERTEX, IN THE CASE OF JOINT OWNERSHIP BETWEEN THE PARTIES
HERETO, SHALL HAVE THE PRIMARY RIGHT, BUT NOT THE OBLIGATION, TO INSTITUTE,
PROSECUTE, AND CONTROL WITH ITS OWN COUNSEL ANY ACTION OR PROCEEDING WITH
RESPECT TO INFRINGEMENT, CLAIMED INVALIDITY OR MISAPPROPRIATION OF SUCH
TECHNOLOGY AND THE OTHER PARTY SHALL HAVE THE RIGHT, AT ITS OWN EXPENSE, TO BE
REPRESENTED IN SUCH ACTION BY ITS OWN COUNSEL.  IF THE PARTY HAVING THE PRIMARY
RIGHT OR RESPONSIBILITY TO INSTITUTE, PROSECUTE, AND CONTROL SUCH ACTION OR
PROCEEDING FAILS TO DO SO WITHIN A PERIOD OF NINETY (90) DAYS AFTER RECEIVING
NOTICE OF THE INFRINGEMENT, CLAIM OR MISAPPROPRIATION, THE OTHER PARTY SHALL
HAVE THE RIGHT TO BRING AND CONTROL ANY SUCH ACTION OR PROCEEDING BY COUNSEL OF
ITS OWN CHOICE; PROVIDED,

 

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exhibit has been filed separately with the Commission.

 

HOWEVER, THAT SUCH RIGHT SHALL ONLY APPLY TO MITSUBISHI WITH RESPECT TO VERTEX
TECHNOLOGY, JOINT PATENTS AND/OR JOINT KNOW-HOW IN THE TERRITORY AND SUCH RIGHT
SHALL ONLY APPLY TO VERTEX WITH RESPECT TO MITSUBISHI TECHNOLOGY IN THE VERTEX
TERRITORY.  IN SUCH CIRCUMSTANCES, THE PARTY WHICH HAD THE PRIMARY
RESPONSIBILITY SHALL HAVE THE RIGHT, AT ITS OWN EXPENSE, TO BE REPRESENTED IN
ANY SUCH ACTION OR PROCEEDING BY COUNSEL OF ITS OWN CHOICE.  IF ONE PARTY BRINGS
ANY SUCH ACTION OR PROCEEDING, THE SECOND PARTY MAY BE JOINED AS A PARTY
PLAINTIFF, AND, IN CASE OF JOINING, THE SECOND PARTY AGREES TO GIVE THE FIRST
PARTY REASONABLE ASSISTANCE AND AUTHORITY TO FILE AND TO PROSECUTE SUCH SUIT. 
IN ANY CASE THE SECOND PARTY SHALL PROVIDE ALL REASONABLE COOPERATION TO THE
FIRST PARTY IN CONNECTION WITH SUCH ACTION OR PROCEEDING.  THE COSTS AND
EXPENSES OF ALL SUITS BROUGHT BY A PARTY UNDER THIS SECTION 7.5.2 SHALL BE
REIMBURSED TO SUCH PARTY AND TO THE OTHER PARTY, IF IT PARTICIPATES IN OR
PROVIDES COOPERATION WITH RESPECT TO SUCH SUIT, PRO RATA, OUT OF ANY DAMAGES OR
OTHER MONETARY AWARDS RECOVERED THEREIN IN FAVOR OF VERTEX OR MITSUBISHI.  IF
ANY BALANCE REMAINS, THE PARTY TAKING SUCH ACTIONS SHALL RETAIN SUCH BALANCE. 
NO SETTLEMENT OR CONSENT JUDGMENT OR OTHER VOLUNTARY FINAL DISPOSITION OF A SUIT
UNDER THIS SECTION 7.5.2 MAY BE ENTERED INTO WITHOUT THE JOINT CONSENT OF VERTEX
AND MITSUBISHI (WHICH CONSENT SHALL NOT BE UNREASONABLY WITHHELD).

 

7.6            PATENT TERM EXTENSIONS.  THE PARTIES SHALL COOPERATE IN GOOD
FAITH WITH EACH OTHER IN GAINING PATENT TERM EXTENSION IN THE TERRITORY TO
VERTEX PATENTS, JOINT PATENTS AND MITSUBISHI PATENTS COVERING A COMPOUND OR DRUG
PRODUCT.  MITSUBISHI AND VERTEX SHALL MUTUALLY DETERMINE WHICH PATENTS SHALL BE
EXTENDED.  ALL FILINGS FOR SUCH EXTENSION SHALL BE MADE BY THE PARTY WHO OWNS
THE PATENT, AND BY VERTEX FOR JOINT PATENTS.

 

ARTICLE VIII — REPRESENTATIONS AND WARRANTIES

 

8.1            REPRESENTATIONS AND WARRANTIES OF VERTEX.  AS OF THE EFFECTIVE
DATE, VERTEX REPRESENTS AND WARRANTS TO MITSUBISHI AS FOLLOWS:

 

(A)           AUTHORIZATION.  THIS AGREEMENT HAS BEEN DULY EXECUTED AND
DELIVERED BY VERTEX AND CONSTITUTES THE VALID AND BINDING OBLIGATION OF VERTEX,
ENFORCEABLE AGAINST VERTEX IN ACCORDANCE WITH ITS TERMS EXCEPT AS ENFORCEABILITY
MAY BE LIMITED BY BANKRUPTCY, FRAUDULENT CONVEYANCE, INSOLVENCY, REORGANIZATION,
MORATORIUM AND OTHER LAWS RELATING TO OR AFFECTING CREDITORS’ RIGHTS GENERALLY
AND BY GENERAL EQUITABLE PRINCIPLES.  THE EXECUTION, DELIVERY AND PERFORMANCE OF
THIS AGREEMENT HAVE BEEN DULY AUTHORIZED BY ALL NECESSARY ACTION ON THE PART OF
VERTEX, ITS OFFICERS AND DIRECTORS.  THE EXECUTION, DELIVERY AND PERFORMANCE OF
THIS AGREEMENT DOES NOT BREACH, VIOLATE, CONTRAVENE OR CONSTITUTE A DEFAULT
UNDER ANY CONTRACTS,

 

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ARRANGEMENTS OR COMMITMENTS TO WHICH VERTEX IS A PARTY OR BY WHICH IT IS BOUND
NOR DOES THE EXECUTION, DELIVERY AND PERFORMANCE OF THIS AGREEMENT BY VERTEX
VIOLATE ANY ORDER, LAW OR REGULATION OF ANY COURT, GOVERNMENTAL BODY OR
ADMINISTRATIVE OR OTHER AGENCY HAVING AUTHORITY OVER IT.

 

(B)            NO THIRD-PARTY RIGHTS.  VERTEX OWNS OR POSSESSES ADEQUATE
LICENSES OR OTHER RIGHTS TO USE THE VERTEX TECHNOLOGY IN THE FIELD OF USE IN THE
TERRITORY AND TO GRANT THE LICENSES AND RIGHTS HEREIN.

 

(C)            THIRD-PARTY PATENTS.  EXCEPT AS DISCLOSED IN WRITING BETWEEN THE
PARTIES, VERTEX IS NOT AWARE OF ANY ISSUED PATENTS OR PENDING PATENT
APPLICATIONS THAT, IF ISSUED, WOULD BE INFRINGED BY THE DEVELOPMENT,
MANUFACTURE, USE, IMPORT, OFFER TO SELL OR SALE OF ANY COMPOUND, BULK DRUG
SUBSTANCE OR DRUG PRODUCT IN THE TERRITORY PURSUANT TO THIS AGREEMENT.

 

(d)            Chiron Patents.  VERTEX’s research activities that produced the
Compounds are covered by a license granted to VERTEX by Chiron Corporation under
certain intellectual property with respect to the hepatitis C virus (HCV).
 Vertex is not aware of any further license that would be required from Chiron
Corporation to permit MITSUBISHI to develop and commercialize the Compounds and
the Drug Products pursuant to this Agreement.

 

8.2           REPRESENTATIONS AND WARRANTIES OF MITSUBISHI.  AS OF THE EFFECTIVE
DATE, MITSUBISHI REPRESENTS AND WARRANTS TO VERTEX THAT THIS AGREEMENT HAS BEEN
DULY EXECUTED AND DELIVERED BY MITSUBISHI AND CONSTITUTES THE VALID AND BINDING
OBLIGATION OF MITSUBISHI, ENFORCEABLE AGAINST MITSUBISHI IN ACCORDANCE WITH ITS
TERMS EXCEPT AS ENFORCEABILITY MAY BE LIMITED BY BANKRUPTCY, FRAUDULENT
CONVEYANCE, INSOLVENCY, REORGANIZATION, MORATORIUM AND OTHER LAWS RELATING TO OR
AFFECTING CREDITORS’ RIGHTS GENERALLY AND BY GENERAL EQUITABLE PRINCIPLES.  THE
EXECUTION, DELIVERY AND PERFORMANCE OF THIS AGREEMENT HAVE BEEN DULY AUTHORIZED
BY ALL NECESSARY ACTION ON THE PART OF MITSUBISHI, ITS OFFICERS AND DIRECTORS. 
THE EXECUTION, DELIVERY AND PERFORMANCE OF THIS AGREEMENT DOES NOT BREACH,
VIOLATE, CONTRAVENE OR CONSTITUTE A DEFAULT UNDER ANY CONTRACTS, ARRANGEMENTS OR
COMMITMENTS TO WHICH MITSUBISHI IS A PARTY OR BY WHICH IT IS BOUND NOR DOES THE
EXECUTION, DELIVERY AND PERFORMANCE OF THIS AGREEMENT BY MITSUBISHI VIOLATE ANY
ORDER, LAW OR REGULATION OF ANY COURT, GOVERNMENTAL BODY OR ADMINISTRATIVE OR
OTHER AGENCY HAVING AUTHORITY OVER IT.

 

ARTICLE IX — CONFIDENTIALITY

 

9.1            UNDERTAKING.  EACH PARTY SHALL KEEP CONFIDENTIAL, AND OTHER THAN
AS PROVIDED

 

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HEREIN, SHALL NOT USE OR DISCLOSE, DIRECTLY OR INDIRECTLY, ANY TRADE SECRETS,
OTHER KNOWLEDGE, INFORMATION, DOCUMENTS OR MATERIALS, OWNED OR CONTROLLED BY THE
OTHER PARTY, WHICH HAVE BEEN DISCLOSED (IN TANGIBLE OR ELECTRONIC FORM OR AS
EVIDENCED BY MEETING MINUTES OR SIMILAR MATERIALS) TO SUCH PARTY AFTER THE
EFFECTIVE DATE AND DESIGNATED CONFIDENTIAL BY THE DISCLOSING PARTY (ANY SUCH
INFORMATION, “CONFIDENTIAL INFORMATION”).  ALL VERTEX KNOW-HOW AND VERTEX
PATENTS SHALL BE DEEMED CONFIDENTIAL INFORMATION OF VERTEX; ALL MITSUBISHI
KNOW-HOW AND MITSUBISHI PATENTS SHALL BE DEEMED CONFIDENTIAL INFORMATION OF
MITSUBISHI; AND ALL JOINT KNOW-HOW AND JOINT PATENTS SHALL BE DEEMED
CONFIDENTIAL INFORMATION OF BOTH PARTIES.  NEITHER VERTEX NOR MITSUBISHI SHALL
USE SUCH CONFIDENTIAL INFORMATION OF THE OTHER PARTY OR JOINTLY OWNED BY THE
PARTIES FOR ANY PURPOSE, INCLUDING THE FILING OF PATENT APPLICATIONS CONTAINING
SUCH INFORMATION, WITHOUT THE OTHER PARTY’S CONSENT (WHICH SHALL NOT BE
UNREASONABLY WITHHELD), OTHER THAN FOR CONDUCTING THE MITSUBISHI DEVELOPMENT
ACTIVITIES OR VERTEX DEVELOPMENT ACTIVITIES OR AS OTHERWISE PERMITTED UNDER THIS
AGREEMENT.

 

9.1.1       NONDISCLOSURE AND NONUSE.  EACH PARTY SHALL TAKE ANY AND ALL LAWFUL
MEASURES TO PREVENT THE UNAUTHORIZED USE AND DISCLOSURE OF CONFIDENTIAL
INFORMATION OF THE OTHER PARTY OR JOINTLY OWNED BY THE PARTIES, AND TO PREVENT
UNAUTHORIZED PERSONS FROM OBTAINING OR USING SUCH CONFIDENTIAL INFORMATION.

 

9.1.2       DISCLOSURE TO AFFILIATES AND AGENTS.  EACH PARTY WILL REFRAIN FROM
DIRECTLY OR INDIRECTLY TAKING ANY ACTION WHICH WOULD CONSTITUTE OR FACILITATE
THE UNAUTHORIZED USE OR DISCLOSURE OF CONFIDENTIAL INFORMATION OF THE OTHER
PARTY OR JOINTLY OWNED BY THE PARTIES.  EACH PARTY MAY DISCLOSE CONFIDENTIAL
INFORMATION OF THE OTHER PARTY OR JOINTLY OWNED BY THE PARTIES TO ITS
AFFILIATES, ITS AND THEIR OFFICERS, EMPLOYEES AND AGENTS, TO AUTHORIZED
LICENSEES AND SUBLICENSEES AND TO SUBCONTRACTORS IN CONNECTION WITH THE
DEVELOPMENT OF A COMPOUND OR THE MANUFACTURE OF BULK DRUG SUBSTANCE OR A DRUG
PRODUCT, BUT ONLY TO THE EXTENT NECESSARY TO ENABLE SUCH PARTIES TO PERFORM
THEIR OBLIGATIONS HEREUNDER OR UNDER THE APPLICABLE LICENSE, SUBLICENSE OR
SUBCONTRACT, AS THE CASE MAY BE; PROVIDED, THAT SUCH OFFICERS, EMPLOYEES,
AGENTS, LICENSEES, SUBLICENSEES AND SUBCONTRACTORS HAVE ENTERED INTO APPROPRIATE
CONFIDENTIALITY AGREEMENTS FOR SECRECY AND NON-USE OF SUCH CONFIDENTIAL
INFORMATION, WHICH BY THEIR TERMS SHALL BE ENFORCEABLE BY INJUNCTIVE RELIEF AT
THE REQUEST OF THE DISCLOSING PARTY.

 

9.1.3       LIABILITY.  EACH PARTY SHALL BE LIABLE FOR ANY UNAUTHORIZED USE AND
DISCLOSURE OF CONFIDENTIAL INFORMATION OF THE OTHER PARTY OR JOINTLY OWNED BY
THE PARTIES BY ITS AFFILIATES, ITS AND THEIR OFFICERS, EMPLOYEES AND AGENTS AND
ANY LICENSEES, SUBLICENSEES AND SUBCONTRACTORS.

 

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9.2            EXCEPTIONS.  NOTWITHSTANDING THE FOREGOING, THE PROVISIONS OF
SECTION 9.1 HEREOF SHALL NOT APPLY TO CONFIDENTIAL INFORMATION WHICH THE
RECEIVING PARTY CAN CONCLUSIVELY ESTABLISH:

 

(I)            HAS ENTERED THE PUBLIC DOMAIN WITHOUT SUCH PARTY’S OR ITS
AFFILIATES’ BREACH OF ANY OBLIGATION OWED TO THE DISCLOSING PARTY;

 

(II)           IS PERMITTED TO BE DISCLOSED BY THE PRIOR WRITTEN CONSENT OF THE
DISCLOSING PARTY;

 

(III)          HAS BECOME KNOWN TO THE RECEIVING PARTY OR ANY OF ITS AFFILIATES
FROM A SOURCE OTHER THAN THE DISCLOSING PARTY, OTHER THAN BY BREACH OF AN
OBLIGATION OF CONFIDENTIALITY OWED TO THE DISCLOSING PARTY;

 

(IV)           IS DISCLOSED BY THE DISCLOSING PARTY TO A THIRD PARTY WITHOUT
RESTRICTIONS ON ITS DISCLOSURE;

 

(V)            IS INDEPENDENTLY DEVELOPED BY THE RECEIVING PARTY OR ITS
AFFILIATES WITHOUT USE OF OR REFERENCE TO THE CONFIDENTIAL INFORMATION, AS
EVIDENCED BY CONTEMPORARY WRITTEN RECORDS;

 

(VI)           IS REQUIRED TO BE DISCLOSED BY THE RECEIVING PARTY TO SEEK
REGULATORY APPROVAL PURSUANT TO THIS AGREEMENT, PROVIDED THAT THE RECEIVING
PARTY TAKES REASONABLE AND LAWFUL ACTIONS TO AVOID OR MINIMIZE THE DEGREE OF
SUCH DISCLOSURE AND TO HAVE CONFIDENTIAL TREATMENT ACCORDED TO ANY CONFIDENTIAL
INFORMATION DISCLOSED; OR

 

(VII)         IS REQUIRED TO BE DISCLOSED BY THE RECEIVING PARTY TO COMPLY WITH
APPLICABLE LAWS OR REGULATIONS, OR TO DEFEND OR PROSECUTE LITIGATION, PROVIDED
THAT THE RECEIVING PARTY TAKES REASONABLE AND LAWFUL ACTIONS TO AVOID OR
MINIMIZE THE DEGREE OF SUCH DISCLOSURE, TO HAVE CONFIDENTIAL TREATMENT ACCORDED
TO ANY CONFIDENTIAL INFORMATION DISCLOSED AND PROVIDES PRIOR WRITTEN NOTICE TO
THE DISCLOSING PARTY WITHIN A TIME PERIOD SUFFICIENTLY PRIOR TO SUCH DISCLOSURE
TO PERMIT THE DISCLOSING PARTY TO APPLY FOR A PROTECTIVE ORDER OR TAKE OTHER
APPROPRIATE ACTION TO RESTRICT DISCLOSURE.  THE RECEIVING PARTY SHALL FULLY
COOPERATE WITH THE DISCLOSING PARTY IN CONNECTION WITH THE DISCLOSING PARTY’S
EFFORTS TO OBTAIN ANY SUCH REMEDY.

 

9.3            PUBLICITY.  THE PARTIES WILL AGREE UPON THE TIMING AND CONTENT OF
ANY INITIAL PRESS RELEASE OR OTHER PUBLIC COMMUNICATIONS RELATING TO THIS
AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREIN.  EXCEPT TO THE EXTENT
ALREADY DISCLOSED IN THAT INITIAL PRESS RELEASE OR OTHER PUBLIC COMMUNICATION,
NO PUBLIC ANNOUNCEMENT CONCERNING THE EXISTENCE OR THE TERMS OF THIS AGREEMENT
OR CONCERNING THE TRANSACTIONS DESCRIBED HEREIN SHALL BE MADE, EITHER DIRECTLY
OR INDIRECTLY, BY VERTEX OR MITSUBISHI, EXCEPT AS MAY BE REQUIRED BY APPLICABLE
LAWS,

 

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REGULATIONS, OR JUDICIAL ORDER, WITHOUT FIRST OBTAINING THE APPROVAL OF THE
OTHER PARTY AND AGREEMENT UPON THE NATURE, TEXT, AND TIMING OF SUCH
ANNOUNCEMENT, WHICH APPROVAL AND AGREEMENT SHALL NOT BE UNREASONABLY WITHHELD.

 

9.4            SURVIVAL.  THE PROVISIONS OF THIS ARTICLE IX SHALL SURVIVE THE
TERMINATION OF THIS AGREEMENT AND SHALL EXTEND FOR A PERIOD OF FIVE (5) YEARS
THEREAFTER.

 

ARTICLE X — DISPUTE RESOLUTION

 

10.1          GOVERNING LAW AND JURISDICTION.  THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK
AND OF THE UNITED STATES OF AMERICA, WITHOUT GIVING EFFECT TO THE DOCTRINE OF
CONFLICT OF LAWS.

 

10.2          DISPUTE RESOLUTION PROCESS.

 

10.2.1     JOINT STEERING COMMITTEE.  EXCEPT AS OTHERWISE EXPLICITLY PROVIDED
HEREIN, IN THE EVENT OF ANY CONTROVERSY OR CLAIM ARISING OUT OF OR RELATING TO
ANY PROVISION OF THIS AGREEMENT, OR THE COLLABORATIVE EFFORT CONTEMPLATED
HEREBY, THE PARTIES SHALL, AND EITHER PARTY MAY, REFER SUCH DISPUTE TO THE JDC,
AND FAILING RESOLUTION OF THE CONTROVERSY OR CLAIM WITHIN THIRTY (30) DAYS AFTER
SUCH REFERRAL, THE MATTER SHALL BE REFERRED TO A JOINT STEERING COMMITTEE (THE
“JOINT STEERING COMMITTEE”) ESTABLISHED BY THE PARTIES COMPRISING ONE
(1) REPRESENTATIVE OF EACH PARTY, WHO SHALL BE APPOINTED (AND MAY BE REPLACED AT
ANY TIME) BY SUCH PARTY ON NOTICE TO THE OTHER PARTY IN ACCORDANCE WITH THIS
AGREEMENT.  ANY MATTERS ORIGINATING WITH THE JDC ON WHICH IT IS UNABLE TO REACH
CONSENSUS WITHIN THIRTY (30) DAYS AFTER THE INITIAL DISCUSSION THEREOF SHALL
ALSO BE REFERRED TO THE JOINT STEERING COMMITTEE.  EACH PARTY’S REPRESENTATIVE
TO THE JOINT STEERING COMMITTEE SHALL BE AN EXECUTIVE OFFICER OF THE RESPECTIVE
PARTY.  THE JOINT STEERING COMMITTEE WILL MEET AS NEEDED AND AGREED BY THE JOINT
STEERING COMMITTEE TO RESOLVE CONTROVERSY OR CLAIMS REFERRED TO IT BY THE JDC
AND TO CONDUCT SUCH OTHER ACTIVITIES AS THE JOINT STEERING COMMITTEE MAY DEEM
APPROPRIATE.  EACH MEMBER OF THE JOINT STEERING COMMITTEE SHALL HAVE ONE VOTE IN
DECISIONS, WITH DECISIONS MADE BY UNANIMOUS VOTE.  IF THE JOINT STEERING
COMMITTEE IS UNABLE TO RESOLVE THE CONTROVERSY OR CLAIM WITHIN THIRTY (30) DAYS
OF ITS REFERRAL TO IT, THEN THOSE MATTERS WITH RESPECT TO WHICH MITSUBISHI OR
VERTEX HAVE FINAL DECISION MAKING AUTHORITY AS DESCRIBED IN SECTION 3.1.3 SHALL
BE REFERRED TO THE APPLICABLE PARTY FOR DECISION.  ALL OTHER MATTERS SHALL BE
REFERRED TO THE CHIEF EXECUTIVE OFFICER OF VERTEX AND THE CHIEF EXECUTIVE
OFFICER OF MITSUBISHI FOR RESOLUTION PURSUANT TO SECTION 10.2.2 HEREOF.

 

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10.2.2     CHIEF EXECUTIVE OFFICER RESOLUTION AND ARBITRATION.  ANY MATTER THAT
THE JOINT STEERING COMMITTEE IS UNABLE TO RESOLVE PURSUANT TO SECTION 10.2.1
THAT IS NOT SUBJECT TO RESOLUTION PURSUANT TO SECTION 3.1.3 SHALL BE REFERRED TO
THE CHIEF EXECUTIVE OFFICER OF VERTEX AND THE CHIEF EXECUTIVE OFFICER OF
MITSUBISHI WHO SHALL, AS SOON AS PRACTICABLE, ATTEMPT IN GOOD FAITH TO RESOLVE
THE CONTROVERSY OR CLAIM.  IF SUCH CONTROVERSY OR CLAIM IS NOT RESOLVED WITHIN
[***] OF THE DATE OF INITIAL REFERRAL OF THE DISPUTE TO THE JDC OR THE INITIAL
DISCUSSION OF THE DISPUTED MATTER BY THE JDC, AS APPLICABLE, SUCH CONTROVERSY OR
CLAIM SHALL BE FINALLY SETTLED BY ARBITRATION IN ACCORDANCE WITH THE RULES OF
CONCILIATION AND ARBITRATION OF THE INTERNATIONAL CHAMBER OF COMMERCE (THE
“RULES”).  EITHER PARTY MAY INITIATE SUCH ARBITRATION PROCEEDING.  SUCH
ARBITRATION SHALL BE CONDUCTED IN CAMBRIDGE, MASSACHUSETTS IF SUCH ARBITRATION
IS REQUESTED BY MITSUBISHI, OR IN TOKYO, JAPAN IF SUCH ARBITRATION IS REQUESTED
BY VERTEX, IN EITHER CASE, IN ENGLISH BY A TRIBUNAL OF THREE INDEPENDENT AND
IMPARTIAL ARBITRATORS, ONE OF WHICH WILL BE APPOINTED BY EACH OF VERTEX AND
MITSUBISHI, AND THE THIRD OF WHICH SHALL HAVE HAD BOTH TRAINING AND EXPERIENCE
AS A MEDIATOR OF PHARMACEUTICAL INDUSTRY LICENSING AND OTHER GENERAL COMMERCIAL
MATTERS.  IF THE PARTIES TO THIS AGREEMENT CANNOT AGREE ON THE THIRD ARBITRATOR,
THEN THE THIRD ARBITRATOR WILL BE SELECTED IN ACCORDANCE WITH THE RULES AND THE
CRITERIA SET FORTH IN THE PRECEDING SENTENCE.  ANY AWARD ORDERED BY THE TRIBUNAL
MUST BE RENDERED IN A WRITING, WHICH WRITING MUST INCLUDE AN EXPLANATION OF THE
REASONS FOR SUCH AWARD.  ALL FEES, COSTS AND EXPENSES OF THE ARBITRATORS, AND
ALL OTHER COSTS AND EXPENSES OF THE ARBITRATION, WILL BE SHARED EQUALLY BY THE
PARTIES UNLESS THE TRIBUNAL IN THE AWARD ASSESSES SUCH COSTS AND EXPENSES
AGAINST ONE OF THE PARTIES OR ALLOCATES SUCH COSTS AND EXPENSES OTHER THAN
EQUALLY BETWEEN SUCH PARTIES.  PENDING THE AWARD OF THE ARBITRATION TRIBUNAL,
THE PARTIES SHALL CONTINUE TO PERFORM THEIR RESPECTIVE OBLIGATIONS UNDER THIS
AGREEMENT.  NOTWITHSTANDING THE FOREGOING, EITHER PARTY MAY, ON GOOD CAUSE
SHOWN, SEEK A TEMPORARY RESTRAINING ORDER AND/OR A PRELIMINARY INJUNCTION FROM A
COURT OF COMPETENT JURISDICTION, TO BE EFFECTIVE PENDING THE INSTITUTION OF THE
ARBITRATION PROCESS OR THE DELIBERATION AND AWARD OF THE ARBITRATION TRIBUNAL.

 

ARTICLE XI — TERM AND TERMINATION

 

11.1          TERM.  THE TERM OF THIS AGREEMENT SHALL EXTEND WITH RESPECT TO A
DRUG PRODUCT IN A PARTICULAR COUNTRY FROM THE EFFECTIVE DATE UNTIL THE LATER
OF:  (A) THE LAST TO EXPIRE OR BE INVALIDATED OR ABANDONED OF ANY VERTEX PATENTS
CONTAINING A VALID PATENT CLAIM COVERING THE DRUG PRODUCT, A COMPOUND INCLUDED
IN A DRUG PRODUCT OR A METHOD OF MAKING OR USING THE SAME IN THAT COUNTRY; OR
(B) TEN (10) YEARS FROM THE DATE OF FIRST COMMERCIAL SALE OF THE DRUG

 

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PRODUCT IN THAT COUNTRY, UNLESS THE AGREEMENT IS TERMINATED AT AN EARLIER DATE
PURSUANT TO SECTIONS 11.2, 11.3 OR 11.4 HEREOF.

 

11.2          TERMINATION FOR CAUSE.  IN ADDITION TO RIGHTS OF TERMINATION WHICH
MAY BE GRANTED TO EITHER PARTY UNDER OTHER PROVISIONS OF THIS AGREEMENT, EITHER
PARTY MAY TERMINATE THIS AGREEMENT UPON SIXTY (60) DAYS PRIOR WRITTEN NOTICE TO
THE OTHER PARTY UPON THE BREACH BY SUCH OTHER PARTY OF ANY OF ITS MATERIAL
OBLIGATIONS UNDER THIS AGREEMENT, PROVIDED THAT SUCH TERMINATION SHALL BECOME
EFFECTIVE ONLY IF THE BREACHING PARTY SHALL FAIL TO REMEDY OR CURE THE BREACH,
OR TO INITIATE STEPS TO REMEDY THE SAME TO THE OTHER PARTY’S REASONABLE
SATISFACTION, WITHIN SUCH SIXTY (60) DAY PERIOD.

 

11.3          TERMINATION FOR BANKRUPTCY.  IF AT ANY TIME DURING THE TERM OF
THIS AGREEMENT, AN EVENT OF BANKRUPTCY (AS DEFINED BELOW) RELATING TO EITHER
PARTY (THE “BANKRUPT PARTY”) OCCURS, THE OTHER PARTY (THE “OTHER PARTY”) SHALL
HAVE, IN ADDITION TO ALL OTHER LEGAL AND EQUITABLE RIGHTS AND REMEDIES AVAILABLE
HEREUNDER, THE OPTION TO TERMINATE THIS AGREEMENT UPON THIRTY (30) DAYS’ PRIOR
WRITTEN NOTICE TO THE BANKRUPT PARTY.  IT IS AGREED AND UNDERSTOOD THAT IF THE
OTHER PARTY DOES NOT ELECT TO TERMINATE THIS AGREEMENT UPON THE OCCURRENCE OF AN
EVENT OF BANKRUPTCY, EXCEPT AS MAY OTHERWISE BE AGREED WITH THE TRUSTEE OR
RECEIVER APPOINTED TO MANAGE THE AFFAIRS OF THE BANKRUPT PARTY, THE OTHER PARTY
SHALL CONTINUE TO MAKE ALL PAYMENTS REQUIRED OF IT UNDER THIS AGREEMENT AS IF
THE EVENT OF BANKRUPTCY HAD NOT OCCURRED, AND THE BANKRUPT PARTY SHALL NOT HAVE
THE RIGHT TO TERMINATE ANY LICENSE GRANTED HEREIN.  AS USED ABOVE, THE TERM
“EVENT OF BANKRUPTCY” SHALL MEAN (A) DISSOLUTION, TERMINATION OF EXISTENCE,
LIQUIDATION OR BUSINESS FAILURE OF EITHER PARTY; (B) THE APPOINTMENT OF A
CUSTODIAN OR RECEIVER FOR EITHER PARTY WHO HAS NOT BEEN TERMINATED OR DISMISSED
WITHIN NINETY (90) DAYS OF SUCH APPOINTMENT; (C) THE INSTITUTION BY EITHER PARTY
OF ANY PROCEEDING UNDER NATIONAL, FEDERAL OR STATE BANKRUPTCY, REORGANIZATION,
RECEIVERSHIP OR OTHER SIMILAR LAWS AFFECTING THE RIGHTS OF CREDITORS GENERALLY
OR THE MAKING BY EITHER PARTY OF A COMPOSITION OR ANY ASSIGNMENT OR TRUST
MORTGAGE FOR THE BENEFIT OF CREDITORS OR UNDER ANY NATIONAL, FEDERAL OR STATE
BANKRUPTCY, REORGANIZATION, RECEIVERSHIP OR OTHER SIMILAR LAW AFFECTING THE
RIGHTS OF CREDITORS GENERALLY, WHICH PROCEEDING IS NOT DISMISSED WITHIN NINETY
(90) DAYS OF FILING.

 

11.4          TERMINATION BY MITSUBISHI.  MITSUBISHI MAY TERMINATE THIS
AGREEMENT AT ANY TIME UPON SIXTY (60) DAYS’ PRIOR WRITTEN NOTICE TO VERTEX. 
MITSUBISHI’S OBLIGATION OF SHARING THE CORE DEVELOPMENT COSTS INCURRED BY OR ON
BEHALF OF VERTEX OR A VERTEX LICENSEE PURSUANT TO SECTION 3.3 SHALL NOT APPLY TO
ANY NON-CLINICAL OR CLINICAL STUDIES WHICH START AFTER THE DATE OF SUCH NOTICE
AND [***]  IN THE EVENT OF SUCH TERMINATION, MITSUBISHI, AT

 

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THE REQUEST OF VERTEX, SHALL ASSIGN OR OTHERWISE TRANSFER TO VERTEX ALL INDS,
REGULATORY APPROVALS, OR APPLICATIONS THEREFOR, WITH RESPECT TO A COMPOUND OR
DRUG PRODUCT, AND VERTEX SHALL HAVE AN IRREVOCABLE, WORLDWIDE, FULLY PAID-UP
NONEXCLUSIVE LICENSE, WITH THE RIGHT TO SUBLICENSE, UNDER THE MITSUBISHI
TECHNOLOGY TO DEVELOP, MANUFACTURE, HAVE MANUFACTURED, USE, SELL, HAVE SOLD,
OFFER TO SELL AND IMPORT BULK DRUG SUBSTANCE, COMPOUND AND DRUG PRODUCT.  IN
ADDITION, AT THE REQUEST OF VERTEX, MITSUBISHI SHALL ASSIGN TO VERTEX FREE OF
CHARGE ALL OF ITS OR ITS AFFILIATES’ RIGHT, TITLE AND INTEREST IN AND TO ANY
TRADEMARKS USED FOR A DRUG PRODUCT IN THE TERRITORY, AND SHALL EXECUTE, OR CAUSE
ITS AFFILIATES TO EXECUTE, SUCH DOCUMENTS OF TRANSFER OR ASSIGNMENT AND PERFORM,
OR CAUSE ITS AFFILIATES TO PERFORM, SUCH ACTS AS MAY BE REASONABLY NECESSARY TO
TRANSFER OWNERSHIP OF SUCH TRADEMARKS TO VERTEX AND TO ENABLE VERTEX TO CONTINUE
TO MAINTAIN SUCH TRADEMARKS AT VERTEX’S EXPENSE.

 

11.5          EFFECT OF TERMINATION.  IF THIS AGREEMENT IS NOT TERMINATED AT AN
EARLIER DATE, THEN UPON ITS EXPIRATION IN ACCORDANCE WITH SECTION 11.1 HEREOF IN
A GIVEN COUNTRY MITSUBISHI SHALL HAVE AN IRREVOCABLE, FULLY PAID-UP NONEXCLUSIVE
LICENSE, WITH THE RIGHT TO SUBLICENSE, IN SUCH COUNTRY UNDER THE VERTEX KNOW-HOW
TO DEVELOP, MANUFACTURE, HAVE MANUFACTURED, USE, SELL, HAVE SOLD, OFFER TO SELL
AND IMPORT THE BULK DRUG SUBSTANCE, COMPOUND AND DRUG PRODUCT.  IF THIS
AGREEMENT IS NOT TERMINATED AT AN EARLIER DATE, THEN UPON ITS EXPIRATION IN
ACCORDANCE WITH SECTION 11.1 HEREOF IN ALL COUNTRIES IN THE TERRITORY,
MITSUBISHI SHALL HAVE AN IRREVOCABLE, FULLY PAID-UP NONEXCLUSIVE LICENSE, WITH
THE RIGHT TO SUBLICENSE, IN THE TERRITORY UNDER THE VERTEX KNOW-HOW TO DEVELOP,
MANUFACTURE, HAVE MANUFACTURED, USE, SELL, HAVE SOLD, OFFER TO SELL AND IMPORT
THE BULK DRUG SUBSTANCE, COMPOUND AND DRUG PRODUCT.  IF THIS AGREEMENT IS NOT
TERMINATED AT AN EARLIER DATE, THEN UPON ITS EXPIRATION IN ACCORDANCE WITH
SECTION 11.1 HEREOF, VERTEX SHALL HAVE AN IRREVOCABLE, WORLDWIDE FULLY PAID-UP
NONEXCLUSIVE LICENSE, WITH THE RIGHT TO SUBLICENSE, UNDER THE MITSUBISHI
KNOW-HOW TO DEVELOP, MANUFACTURE, HAVE MANUFACTURED, USE, SELL, HAVE SOLD, OFFER
TO SELL AND IMPORT THE BULK DRUG SUBSTANCE, COMPOUND AND DRUG PRODUCT.  UPON ANY
TERMINATION OF THIS AGREEMENT PURSUANT TO SECTIONS 11.2 OR 11.3 HEREOF,
MITSUBISHI SHALL HAVE THE RIGHT TO SELL ITS INVENTORY OF DRUG PRODUCT FOR A
PERIOD OF SIX (6) MONTHS FROM THE DATE OF TERMINATION PROVIDED MITSUBISHI
COMPLIES WITH THE PROVISIONS OF SECTIONS 6.5 THROUGH 6.7 HEREOF.  IF THE LICENSE
GRANTED TO MITSUBISHI UNDER SECTION 2.1 HEREOF IS TERMINATED FOR ANY REASON, AT
VERTEX’S ELECTION, FOLLOWING GOOD FAITH DISCUSSION WITH SUCH SUBLICENSEE, ANY OF
MITSUBISHI’S SUBLICENSEES AT SUCH TIME (OTHER THAN AN AFFILIATE OF MITSUBISHI)
SHALL CONTINUE TO HAVE THE RIGHTS AND LICENSE SET FORTH IN THEIR SUBLICENSE
AGREEMENTS; PROVIDED, HOWEVER, THAT SUCH SUBLICENSEE AGREES IN WRITING THAT

 

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VERTEX IS ENTITLED TO ENFORCE ALL RELEVANT TERMS AND CONDITIONS OF SUCH
SUBLICENSE AGREEMENT DIRECTLY AGAINST SUCH SUBLICENSEE.  TERMINATION OF THIS
AGREEMENT FOR ANY REASON, OR EXPIRATION OF THIS AGREEMENT, WILL NOT AFFECT:
(I) OBLIGATIONS, INCLUDING THE OBLIGATION FOR PAYMENT OF ANY SUPPLY PAYMENTS OR
ROYALTIES, WHICH HAVE ACCRUED AS OF THE DATE OF TERMINATION OR EXPIRATION, AND
(II) RIGHTS AND OBLIGATIONS WHICH, FROM THE CONTEXT THEREOF, ARE INTENDED TO
SURVIVE TERMINATION OR EXPIRATION OF THIS AGREEMENT INCLUDING OBLIGATIONS
PURSUANT TO ARTICLES VI, VII, IX, X, XI, XII AND XIII, TO THE EXTENT
APPLICABLE.  ANY RIGHT TO TERMINATE THIS AGREEMENT SHALL BE IN ADDITION TO AND
NOT IN LIEU OF ALL OTHER RIGHTS OR REMEDIES THAT THE PARTY GIVING NOTICE OF
TERMINATION MAY HAVE AT LAW OR IN EQUITY OR OTHERWISE.

 

ARTICLE XII — INDEMNIFICATION

 

12.1          INDEMNIFICATION BY VERTEX.  VERTEX SHALL INDEMNIFY AND HOLD
MITSUBISHI,  ITS AFFILIATES, AND THEIR EMPLOYEES, OFFICERS, DIRECTORS AND AGENTS
HARMLESS FROM AND AGAINST ANY LOSS, DAMAGE, ACTION, SUIT, CLAIM, DEMAND,
LIABILITY, JUDGMENT, COST OR EXPENSE (A “LOSS”), THAT MAY BE BROUGHT, INSTITUTED
OR ARISE AGAINST OR BE INCURRED BY SUCH PERSONS TO THE EXTENT SUCH LOSS IS BASED
ON OR ARISES OUT OF:

 

(A)           THE DEVELOPMENT, MANUFACTURE, USE, SALE, IMPORTATION, OFFER TO
SELL, STORAGE OR HANDLING OF BULK DRUG SUBSTANCE, A COMPOUND OR A DRUG PRODUCT
BY VERTEX,  ITS AFFILIATES, THE VERTEX LICENSEES OR THEIR REPRESENTATIVES,
AGENTS, SUBLICENSEES OR SUBCONTRACTORS UNDER THIS AGREEMENT, OR ANY ACTUAL OR
ALLEGED VIOLATION OF LAW RESULTING THEREFROM (WITH THE EXCEPTION OF LOSSES BASED
ON INFRINGEMENT OR MISAPPROPRIATION OF INTELLECTUAL PROPERTY RIGHTS); OR

 

(B)            THE BREACH BY VERTEX OF ANY OF ITS COVENANTS, REPRESENTATIONS OR
WARRANTIES SET FORTH IN THIS AGREEMENT;

 

PROVIDED, HOWEVER, THAT THE FOREGOING INDEMNIFICATION AND HOLD HARMLESS
OBLIGATION SHALL NOT APPLY TO ANY LOSS TO THE EXTENT SUCH LOSS IS CAUSED BY THE
NEGLIGENT OR WILLFUL MISCONDUCT OF MITSUBISHI, ITS AFFILIATES, OR THEIR
EMPLOYEES, OFFICERS, DIRECTORS, AGENTS, REPRESENTATIVES, LICENSEES, SUBLICENSEES
OR SUBCONTRACTORS.

 

12.2          INDEMNIFICATION BY MITSUBISHI.  MITSUBISHI SHALL INDEMNIFY AND
HOLD VERTEX, [***], THEIR AFFILIATES, AND THEIR AND THEIR AFFILIATES’ EMPLOYEES,
OFFICERS, DIRECTORS AND AGENTS, HARMLESS FROM AND AGAINST ANY LOSS THAT MAY BE
BROUGHT, INSTITUTED OR ARISE AGAINST OR BE INCURRED BY SUCH PERSONS TO THE
EXTENT SUCH LOSS IS BASED ON OR ARISES OUT OF:

 

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(A)           THE DEVELOPMENT, MANUFACTURE, USE, SALE, IMPORTATION, OFFER TO
SELL, STORAGE OR HANDLING OF BULK DRUG SUBSTANCE, A COMPOUND OR A DRUG PRODUCT
BY MITSUBISHI, ITS AFFILIATES OR THEIR REPRESENTATIVES, AGENTS, LICENSEES,
SUBLICENSEES OR SUBCONTRACTORS UNDER THIS AGREEMENT, OR ANY ACTUAL OR ALLEGED
VIOLATION OF LAW RESULTING THEREFROM (WITH THE EXCEPTION OF LOSSES BASED ON
INFRINGEMENT OR MISAPPROPRIATION OF INTELLECTUAL PROPERTY RIGHTS); OR

 

(B)            THE BREACH BY MITSUBISHI OF ANY OF ITS COVENANTS, REPRESENTATIONS
OR WARRANTIES SET FORTH IN THIS AGREEMENT;

 

PROVIDED, HOWEVER, THAT THE FOREGOING INDEMNIFICATION AND HOLD HARMLESS
OBLIGATION SHALL NOT APPLY TO ANY LOSS TO THE EXTENT SUCH LOSS IS CAUSED BY THE
NEGLIGENT OR WILLFUL MISCONDUCT OF VERTEX, ITS AFFILIATES THE VERTEX LICENSEES
OR THEIR EMPLOYEES, OFFICERS, DIRECTORS, AGENTS, REPRESENTATIVES, SUBLICENSEES
OR SUBCONTRACTORS; AND PROVIDED FURTHER, HOWEVER, THAT [***].

 

12.3          CLAIMS PROCEDURES.  EACH PARTY ENTITLED TO BE INDEMNIFIED BY THE
OTHER PARTY (AN “INDEMNIFIED PARTY”) PURSUANT TO SECTION 12.1 OR 12.2 HEREOF
SHALL GIVE NOTICE TO THE OTHER PARTY (AN “INDEMNIFYING PARTY”) PROMPTLY AFTER
SUCH INDEMNIFIED PARTY HAS ACTUAL KNOWLEDGE OF ANY THREATENED OR ASSERTED CLAIM
OR DEMAND AS TO WHICH INDEMNITY MAY BE SOUGHT, AND SHALL PERMIT THE INDEMNIFYING
PARTY TO ASSUME THE DEFENSE OF ANY SUCH CLAIM OR DEMAND OR ANY LITIGATION
RESULTING THEREFROM; PROVIDED THAT:

 

(A)            COUNSEL FOR THE INDEMNIFYING PARTY, WHO SHALL CONDUCT THE DEFENSE
OF SUCH CLAIM, DEMAND OR ANY LITIGATION RESULTING THEREFROM, SHALL BE APPROVED
BY THE INDEMNIFIED PARTY (WHOSE APPROVAL SHALL NOT UNREASONABLY BE WITHHELD) AND
THE INDEMNIFIED PARTY MAY PARTICIPATE IN SUCH DEFENSE AT SUCH PARTY’S EXPENSE
(UNLESS (I) THE EMPLOYMENT OF COUNSEL BY SUCH INDEMNIFIED PARTY HAS BEEN
AUTHORIZED BY THE INDEMNIFYING PARTY; OR (II) THE INDEMNIFIED PARTY SHALL HAVE
REASONABLY CONCLUDED THAT THERE MAY BE A CONFLICT OF INTEREST BETWEEN THE
INDEMNIFYING PARTY AND THE INDEMNIFIED PARTY IN THE DEFENSE OF SUCH ACTION, IN
EACH OF WHICH CASES THE INDEMNIFYING PARTY SHALL PAY THE REASONABLE FEES AND
EXPENSES OF ONE LAW FIRM SERVING AS COUNSEL FOR ALL INDEMNIFIED PARTIES, WHICH
LAW FIRM SHALL BE SUBJECT TO APPROVAL, NOT TO BE UNREASONABLY WITHHELD, BY THE
INDEMNIFYING PARTY);

 

(B)            THE FAILURE OF ANY INDEMNIFIED PARTY TO GIVE NOTICE AS PROVIDED
HEREIN SHALL NOT RELIEVE THE INDEMNIFYING PARTY OF ITS OBLIGATIONS UNDER THIS
AGREEMENT TO THE EXTENT THAT THE FAILURE TO GIVE NOTICE DID NOT RESULT IN HARM
TO THE INDEMNIFYING PARTY;

 

(C)           NO INDEMNIFYING PARTY, IN THE DEFENSE OF ANY SUCH CLAIM. DEMAND OR
LITIGATION, SHALL, EXCEPT WITH THE APPROVAL OF EACH INDEMNIFIED PARTY WHICH
APPROVAL SHALL NOT BE UNREASONABLY WITHHELD, CONSENT TO ENTRY OF ANY JUDGMENT OR
ENTER INTO ANY SETTLEMENT WHICH (I) 

 

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WOULD RESULT IN INJUNCTIVE OR OTHER RELIEF BEING IMPOSED AGAINST THE INDEMNIFIED
PARTY; OR (II) DOES NOT INCLUDE AS AN UNCONDITIONAL TERM THEREOF THE GIVING BY
THE CLAIMANT OR PLAINTIFF TO SUCH INDEMNIFIED PARTY OF A RELEASE FROM ALL
LIABILITY IN RESPECT TO SUCH CLAIM OR LITIGATION.  THE INDEMNIFIED PARTY SHALL
HAVE NO RIGHT TO SETTLE OR COMPROMISE ANY SUCH CLAIM, DEMAND OR LITIGATION
WITHOUT THE INDEMNIFYING PARTY’S PRIOR WRITTEN CONSENT; AND

 

(D)           EACH INDEMNIFIED PARTY SHALL FURNISH SUCH INFORMATION AND
ASSISTANCE REGARDING ITSELF OR THE CLAIM OR DEMAND IN QUESTION AS AN
INDEMNIFYING PARTY MAY REASONABLY REQUEST IN WRITING AND SHALL BE REASONABLY
REQUIRED IN CONNECTION WITH THE DEFENSE OF SUCH CLAIM, DEMAND OR LITIGATION
RESULTING THEREFROM.

 

12.4          LIMITATION OF LIABILITY.  EXCEPT WITH RESPECT TO THIRD-PARTY
ACTIONS, SUITS, CLAIMS OR DEMANDS SUBJECT TO INDEMNIFICATION PURSUANT TO
SECTIONS 12.1 AND 12.2 ABOVE, NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR
INDIRECT, INCIDENTAL, SPECIAL, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES
ARISING OUT OF OR RESULTING FROM THIS AGREEMENT.

 

12.5          INSURANCE.  EACH PARTY SHALL MAINTAIN AND KEEP IN FORCE FOR THE
TERM OF THIS AGREEMENT INSURANCE THAT SHALL BE ADEQUATE TO COVER ITS
INDEMNIFICATION OBLIGATIONS HEREUNDER AND THAT IS COMMENSURATE WITH THE
INSURANCE THAT SUCH PARTY MAINTAINS WITH RESPECT TO OTHER COMPARABLE
PHARMACEUTICAL OR BIOTECHNOLOGY PRODUCTS IT IS DEVELOPING AND/OR
COMMERCIALIZING.  IT IS UNDERSTOOD THAT SUCH INSURANCE SHALL NOT BE CONSTRUED TO
LIMIT A PARTY’S LIABILITY WITH RESPECT TO SUCH INDEMNIFICATION OBLIGATIONS. 
SUCH INSURANCE SHALL BE PLACED WITH A FIRST CLASS INSURANCE CARRIER WITH AT
LEAST A BBB RATING BY STANDARD & POOR.

 

ARTICLE XIII— MISCELLANEOUS PROVISIONS

 

13.1          WAIVER.  NO PROVISION OF THE AGREEMENT MAY BE WAIVED EXCEPT IN
WRITING BY BOTH PARTIES HERETO.  NO FAILURE OR DELAY BY EITHER PARTY HERETO IN
EXERCISING ANY RIGHT OR REMEDY HEREUNDER OR UNDER APPLICABLE LAW WILL OPERATE AS
A WAIVER THEREOF, OR A WAIVER OF THAT OR ANY OTHER RIGHT OR REMEDY ON ANY
SUBSEQUENT OCCASION.

 

13.2          FORCE MAJEURE.  NEITHER PARTY WILL BE IN BREACH HEREOF BY REASON
OF ITS DELAY IN THE PERFORMANCE OF OR FAILURE TO PERFORM ANY OF ITS OBLIGATIONS
HEREUNDER, IF THAT DELAY OR FAILURE IS CAUSED BY FIRE, FLOODS, EMBARGOES, WAR,
TERRORISM, INSURRECTIONS, RIOTS, CIVIL COMMOTIONS, STRIKES, LOCKOUTS OR OTHER
LABOR DISTURBANCES, SABOTAGE, ACTS OF GOD, OMISSIONS OR DELAYS IN ACTING BY ANY
GOVERNMENTAL AUTHORITY, ACTS OF A GOVERNMENT OR AGENCY THEREOF OR JUDICIAL
ORDERS OR DECREES, OR ANY SIMILAR CAUSE BEYOND ITS CONTROL AND WITHOUT ITS FAULT
OR NEGLIGENCE; PROVIDED,

 

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HOWEVER, THE PARTY CLAIMING FORCE MAJEURE SHALL PROMPTLY NOTIFY THE OTHER PARTY
OF THE EXISTENCE OF SUCH FORCE MAJEURE, SHALL USE ITS BEST EFFORTS TO AVOID OR
REMEDY SUCH FORCE MAJEURE AND SHALL CONTINUE PERFORMANCE HEREUNDER WITH THE
UTMOST DISPATCH WHENEVER SUCH FORCE MAJEURE IS AVOIDED OR REMEDIED.

 

13.3          REGISTRATION OF LICENSE.  MITSUBISHI MAY, AT ITS EXPENSE, REGISTER
THE LICENSE GRANTED UNDER THIS AGREEMENT IN ANY COUNTRY WHERE THE USE, SALE,
IMPORTATION, OFFER TO SELL OR MANUFACTURE OF A DRUG PRODUCT IN SUCH COUNTRY
WOULD BE COVERED BY A VALID PATENT CLAIM.  UPON REQUEST BY MITSUBISHI, VERTEX
AGREES PROMPTLY TO EXECUTE ANY “SHORT FORM” LICENSES SUBMITTED TO IT BY
MITSUBISHI IN ORDER TO EFFECT THE FOREGOING REGISTRATION IN SUCH COUNTRY, BUT
SUCH LICENSES SHALL IN NO WAY ALTER OR AFFECT THE OBLIGATIONS OF THE PARTIES
HEREUNDER.

 

13.4          SEVERABILITY.  SHOULD ONE OR MORE PROVISIONS OF THIS AGREEMENT BE
OR BECOME INVALID, THEN THE PARTIES HERETO SHALL ATTEMPT TO AGREE UPON VALID
PROVISIONS IN SUBSTITUTION FOR THE INVALID PROVISIONS, WHICH IN THEIR ECONOMIC
EFFECT COME SO CLOSE TO THE INVALID PROVISIONS THAT IT CAN BE REASONABLY ASSUMED
THAT THE PARTIES WOULD HAVE ACCEPTED THIS AGREEMENT WITH THOSE NEW PROVISIONS. 
IF THE PARTIES ARE UNABLE TO AGREE ON SUCH VALID PROVISIONS, THE INVALIDITY OF
SUCH ONE OR MORE PROVISIONS OF THIS AGREEMENT SHALL NEVERTHELESS NOT AFFECT THE
VALIDITY OF THE AGREEMENT AS A WHOLE, UNLESS THE INVALID PROVISIONS ARE OF SUCH
ESSENTIAL IMPORTANCE TO THIS AGREEMENT THAT IT MAY BE REASONABLY PRESUMED THAT
THE PARTIES WOULD NOT HAVE ENTERED INTO THIS AGREEMENT WITHOUT THE INVALID
PROVISIONS.

 

13.5          GOVERNMENT ACTS.  IN THE EVENT THAT ANY ACT, REGULATION,
DIRECTIVE, OR LAW OF A COUNTRY OR ITS GOVERNMENT, INCLUDING ITS DEPARTMENTS,
AGENCIES OR COURTS, SHOULD MAKE IMPOSSIBLE OR PROHIBIT, RESTRAIN, MODIFY OR
LIMIT ANY MATERIAL ACT OR OBLIGATION OF MITSUBISHI OR VERTEX UNDER THIS
AGREEMENT, THE PARTY, IF ANY, NOT SO AFFECTED, SHALL HAVE THE RIGHT, AT ITS
OPTION, TO SUSPEND OR TERMINATE THIS AGREEMENT AS TO SUCH COUNTRY, IF GOOD FAITH
NEGOTIATIONS BETWEEN THE PARTIES TO MAKE SUCH MODIFICATIONS THEREIN AS MAY BE
NECESSARY TO FAIRLY ADDRESS THE IMPACT THEREOF ARE NOT SUCCESSFUL AFTER A
REASONABLE PERIOD OF TIME IN PRODUCING MUTUALLY ACCEPTABLE MODIFICATIONS TO THIS
AGREEMENT.

 

13.6          GOVERNMENT APPROVALS.  EACH PARTY WILL OBTAIN ANY GOVERNMENT
APPROVAL REQUIRED IN ITS COUNTRY OF DOMICILE, OR UNDER ANY TREATIES OR
INTERNATIONAL AGREEMENTS TO WHICH ITS COUNTRY OF DOMICILE IS A SIGNATORY, TO
ENABLE THIS AGREEMENT TO BECOME EFFECTIVE, OR TO ENABLE ANY PAYMENT HEREUNDER TO
BE MADE, OR ANY OTHER OBLIGATION HEREUNDER TO BE OBSERVED OR PERFORMED.  EACH
PARTY WILL KEEP THE OTHER INFORMED OF PROGRESS IN OBTAINING ANY SUCH GOVERNMENT
APPROVAL, AND WILL COOPERATE WITH THE OTHER PARTY IN ANY SUCH EFFORTS.

 

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13.7          ASSIGNMENT; SUCCESSORS AND ASSIGNS.  THIS AGREEMENT MAY NOT BE
ASSIGNED OR OTHERWISE TRANSFERRED BY EITHER PARTY WITHOUT THE PRIOR WRITTEN
CONSENT OF THE OTHER PARTY; PROVIDED, HOWEVER, THAT EITHER PARTY MAY ASSIGN THIS
AGREEMENT, WITHOUT THE CONSENT OF THE OTHER PARTY, (I) TO ANY OF ITS AFFILIATES,
IF THE ASSIGNING PARTY GUARANTEES THE FULL PERFORMANCE OF ITS AFFILIATES’
OBLIGATIONS HEREUNDER, OR (II) IN CONNECTION WITH THE TRANSFER OR SALE OF ALL OR
SUBSTANTIALLY ALL OF ITS ASSETS OR BUSINESS OR THE ASSETS AND BUSINESS TO WHICH
THIS AGREEMENT RELATES OR IN THE EVENT OF ITS MERGER OR CONSOLIDATION WITH
ANOTHER COMPANY.  TO THE EXTENT ANY RIGHTS AND/OR OBLIGATIONS OF A PARTY ARE
HELD BY AN AFFILIATE OF SUCH PARTY THEN ANY BUSINESS TRANSACTION, CHANGE IN
CONTROL OF A MAJORITY OF THE VOTING POWER OR OTHER EVENT THAT, IN EACH CASE,
CAUSES SUCH AFFILIATE TO CEASE TO BE AN AFFILIATE OF THE PARTY, SHALL BE DEEMED
AN ASSIGNMENT OF THE RIGHTS AND/OR OBLIGATIONS HELD BY SUCH FORMER AFFILIATE AND
REQUIRE PRIOR WRITTEN CONSENT OF THE OTHER PARTY.  ANY PURPORTED ASSIGNMENT IN
CONTRAVENTION OF THIS SECTION 13.7 SHALL, AT THE OPTION OF THE NONASSIGNING
PARTY, BE NULL AND VOID AND OF NO EFFECT.  NO ASSIGNMENT SHALL RELEASE EITHER
PARTY FROM RESPONSIBILITY FOR THE PERFORMANCE OF ANY OF ITS ACCRUED OBLIGATIONS
HEREUNDER.  THIS AGREEMENT SHALL BE BINDING UPON AND ENFORCEABLE AGAINST THE
SUCCESSOR TO OR ANY PERMITTED ASSIGNEE OF EITHER OF THE PARTIES HERETO.

 

13.8          EXPORT CONTROLS.  THIS AGREEMENT IS MADE SUBJECT TO ANY
RESTRICTIONS CONCERNING THE EXPORT OF MATERIALS AND TECHNOLOGY FROM THE UNITED
STATES WHICH MAY BE IMPOSED UPON EITHER PARTY TO THIS AGREEMENT FROM TIME TO
TIME BY THE UNITED STATES GOVERNMENT.  IN THE EVENT ANY SUCH RESTRICTIONS ARE
IMPOSED AFTER THE EFFECTIVE DATE AND THEREBY RENDER ANY PROVISIONS OF THIS
AGREEMENT INVALID OR UNENFORCEABLE, THE PROVISIONS OF SECTION 13.4 OF THIS
AGREEMENT SHALL BE APPLICABLE TO THOSE PROVISIONS.  MITSUBISHI WILL NOT EXPORT,
DIRECTLY OR INDIRECTLY, ANY VERTEX TECHNOLOGY OR ANY BULK DRUG SUBSTANCE,
COMPOUNDS OR DRUG PRODUCTS UTILIZING SUCH TECHNOLOGY TO ANY COUNTRIES FOR WHICH
THE UNITED STATES GOVERNMENT OR ANY AGENCY THEREOF AT THE TIME OF SUCH EXPORT
REQUIRES AN EXPORT LICENSE OR OTHER GOVERNMENTAL APPROVAL, WITHOUT FIRST
OBTAINING THE WRITTEN CONSENT TO DO SO FROM THE DEPARTMENT OF COMMERCE OR OTHER
APPLICABLE AGENCY OF THE UNITED STATES GOVERNMENT IN ACCORDANCE WITH THE
APPLICABLE STATUTE OR REGULATION.

 

13.9          AFFILIATES.  EACH PARTY MAY PERFORM ITS OBLIGATIONS HEREUNDER
PERSONALLY OR THROUGH ONE OR MORE AFFILIATES, ALTHOUGH EACH PARTY SHALL
NONETHELESS BE SOLELY RESPONSIBLE FOR THE PERFORMANCE OF ITS AFFILIATES. 
NEITHER PARTY SHALL PERMIT ANY OF ITS AFFILIATES TO COMMIT ANY ACT (INCLUDING
ANY ACT OF OMISSION) WHICH SUCH PARTY IS PROHIBITED HEREUNDER FROM COMMITTING
DIRECTLY.

 

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13.10       COUNTERPARTS.  THIS AGREEMENT MAY BE SIGNED IN ANY NUMBER OF
COUNTERPARTS WITH THE SAME EFFECT AS IF THE SIGNATURES TO EACH COUNTERPART WERE
UPON A SINGLE INSTRUMENT, AND ALL SUCH COUNTERPARTS TOGETHER SHALL CONSTITUTE
THE SAME AGREEMENT.

 

13.11       NO AGENCY.  NOTHING HEREIN CONTAINED SHALL BE DEEMED TO CREATE AN
AGENCY, JOINT VENTURE, AMALGAMATION, PARTNERSHIP OR SIMILAR RELATIONSHIP BETWEEN
MITSUBISHI AND VERTEX.  NOTWITHSTANDING ANY OF THE PROVISIONS OF THIS AGREEMENT,
NEITHER PARTY SHALL AT ANY TIME ENTER INTO, INCUR, OR HOLD ITSELF OUT TO THIRD
PARTIES AS HAVING AUTHORITY TO ENTER INTO OR INCUR, ON BEHALF OF THE OTHER
PARTY, ANY COMMITMENT, EXPENSE, OR LIABILITY WHATSOEVER, AND ALL CONTRACTS,
EXPENSES AND LIABILITIES IN CONNECTION WITH OR RELATING TO THE OBLIGATIONS OF
EACH PARTY UNDER THIS AGREEMENT SHALL BE MADE, UNDERTAKEN, INCURRED OR PAID
EXCLUSIVELY BY THAT PARTY ON ITS OWN BEHALF, AND NOT AS AN AGENT OR
REPRESENTATIVE OF THE OTHER PARTY.

 

13.12       NOTICE.  ALL COMMUNICATIONS BETWEEN THE PARTIES WITH RESPECT TO ANY
OF THE PROVISIONS OF THIS AGREEMENT WILL BE SENT TO THE ADDRESSES SET OUT BELOW,
OR TO OTHER ADDRESSES AS DESIGNATED BY ONE PARTY TO THE OTHER BY NOTICE PURSUANT
HERETO, BY AIR COURIER (WHICH SHALL BE DEEMED RECEIVED BY THE OTHER PARTY ON THE
SECOND (2ND) BUSINESS DAY FOLLOWING DEPOSIT WITH THE AIR COURIER COMPANY), OR BY
FACSIMILE TRANSMISSION, OR OTHER ELECTRONIC MEANS OF COMMUNICATION (WHICH SHALL
BE DEEMED RECEIVED WHEN TRANSMITTED), WITH CONFIRMATION BY AIR COURIER, SENT BY
THE CLOSE OF BUSINESS ON OR BEFORE THE NEXT FOLLOWING BUSINESS DAY:

 

If to MITSUBISHI, at:

 

Mitsubishi Pharma Corporation

6-9, Hiranomachi 2 Chome, Chuo-ku

Osaka 541-0046, Japan

Fax:  81-6-6227-4702

Attention:  General Manager of Corporate Licensing Department

 

If to VERTEX, at:

 

Vertex Pharmaceutical Incorporated

130 Waverly Street

Cambridge, MA U.S.A. 02139-4211

Fax:  617-444-7117

Attention:  General Counsel

 

13.13       HEADINGS.  THE ARTICLE, SECTION AND PARAGRAPH HEADINGS ARE FOR
CONVENIENCE OF REFERENCE ONLY AND WILL NOT BE DEEMED TO AFFECT IN ANY WAY THE
LANGUAGE OF THE PROVISIONS TO WHICH THEY REFER.

 

13.14       ENTIRE AGREEMENT.  THIS AGREEMENT, INCLUDING THE SCHEDULES APPENDED
HERETO,

 

47

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Information redacted pursuant to a confidential treatment request.  An
unredacted version of this
exhibit has been filed separately with the Commission.

 

CONTAINS THE ENTIRE UNDERSTANDING OF THE PARTIES RELATING TO THE MATTERS
REFERRED TO HEREIN AND MAY ONLY BE AMENDED BY A WRITTEN DOCUMENT REFERENCING
THIS AGREEMENT, DULY EXECUTED ON BEHALF OF THE RESPECTIVE PARTIES.

 

13.15       RULES OF CONSTRUCTION.  THE USE IN THIS AGREEMENT OF THE TERMS
“INCLUDE” OR “INCLUDING” MEANS “INCLUDE, WITHOUT LIMITATION” OR “INCLUDING,
WITHOUT LIMITATION,” RESPECTIVELY.

 

[Signature Page Follows]

 

48

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Information redacted pursuant to a confidential treatment request.  An
unredacted version of this
exhibit has been filed separately with the Commission.

 

IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
and delivered by their duly authorized representatives as of the day and year
first above written.

 

 

VERTEX PHARMACEUTICALS INCORPORATED

 

 

 

 

 

 

By:

/s/ Joshua S. Boger

 

Name: 

Joshua S. Boger, Ph.D.

 

Title:

Chairman and Chief Executive Officer

 

 

 

 

 

 

 

Witness

 

 

 

 

 

 

By:

/s/ Vicki L. Sato

 

Name: 

Vicki L. Sato, Ph.D.

 

Title:

President

 

 

 

 

 

 

 

MITSUBISHI PHARMA CORPORATION

 

 

 

 

 

 

By:

/s/ Teruo Kobori

 

Name: 

Teruo Kobori

 

Title:

President & Chief Executive Officer

 

 

 

 

 

 

 

Witness

 

 

 

 

 

 

By:

/s/ Akihiro Tobe

 

Name: 

Akihiro Tobe, Ph.D.

 

Title:

Managing Executive Officer, Division Manager, Strategic Planning Division

 

49

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Information redacted pursuant to a confidential treatment request.  An
unredacted version of this
exhibit has been filed separately with the Commission.

 

Schedule 1.33

 

MITSUBISHI Patents

 

None as of the Effective Date.

 

50

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Information redacted pursuant to a confidential treatment request.  An
unredacted version of this
exhibit has been filed separately with the Commission.

 

Schedule 1.49

 

Territory

 

[***]

 

Japan

 

[***]

 

People’s Republic of China

 

51

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Information redacted pursuant to a confidential treatment request.  An
unredacted version of this
exhibit has been filed separately with the Commission.

 

Schedule 1.56

 

VERTEX Patents

 

DOCKET NO

 

SERIAL NO

 

PATENT NO

 

TITLE

 

COUNTRY

 

STATUS

 

FILED

 

ISSUED

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

VPI/00-131 CN

 

01815055.1

 

 

 

PEPTIDOMIMETIC PROTEASE INHIBITORS

 

CHINA

 

PENDING

 

8/31/01

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

VPI/00-131 EA

 

200300318

 

 

 

PEPTIDOMIMETIC PROTEASE INHIBITORS

 

EURASIA

 

PENDING

 

8/31/01

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

VPI/00-131 HK

 

Awaiting confirmation

 

 

 

PEPTIDOMIMETIC PROTEASE INHIBITORS

 

HONG KONG

 

PENIDNG

 

Awaiting confirmation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

VPI/00-131 ID

 

W-00 200300420

 

 

 

PEPTIDOMIMETIC PROTEASE INHIBITORS

 

INDONESIA

 

PENDING

 

8/31/01

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

VPI/00-131 JP

 

2002-523884

 

 

 

PEPTIDOMIMETIC PROTEASE INHIBITORS

 

JAPAN

 

PENDING

 

8/31/01

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

VPI/00-131 KR

 

10-2003-700-2880

 

 

 

PEPTIDOMIMETIC PROTEASE INHIBITORS

 

SOUTH KOREA

 

PENDING

 

8/31/01

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

VPI/00-131 MY

 

PI20014137

 

 

 

PEPTIDOMIMETIC PROTEASE INHIBITORS

 

MALAYSIA

 

PENDING

 

9/3/01

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

VPI/00-131 PH

 

1-2003-500074

 

 

 

PEPTIDOMIMETIC PROTEASE INHIBITORS

 

PHILIPPINES

 

PENDING

 

8/31/01

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

VPI/00-131 SG

 

200300451-2

 

 

 

PEPTIDOMIMETIC PROTEASE INHIBITORS

 

SINGAPORE

 

PENDING

 

8/31/01

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

VPI/00-131 TH

 

068019

 

 

 

PEPTIDOMIMETIC PROTEASE INHIBITORS

 

THAILAND

 

PENDING

 

8/30/01

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

VPI/00-131 TW

 

90121629

 

 

 

PEPTIDOMIMETIC PROTEASE INHIBITORS

 

TAIWAN

 

PENDING

 

8/31/01

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

VPI/00-131 VN

 

1-2003-00183

 

 

 

PEPTIDOMIMETIC PROTEASE INHIBITORS

 

VIET NAM

 

PENDING

 

8/31/01

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

VPI/96-11 CN

 

97180151.7

 

 

 

INHIBITORS OF SERINE PROTEASES, PARTICULARLY HEPATITIS C VIRUS NS3 PROTEASE

 

CHINA

 

ALLOWED

 

10/17/1997

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

VPI/96-11 EA

 

199900388

 

001915

 

INHIBITORS OF SERINE PROTEASES, PARTICULARLY HEPATITIS C VIRUS NS3 PROTEASE

 

EURASIAN PATENT OFFICE

 

ISSUED

 

10/17/1997

 

10/22/01

 

52

--------------------------------------------------------------------------------

 

Information redacted pursuant to a confidential treatment request.  An
unredacted version of this
exhibit has been filed separately with the Commission.

 

Schedule 1.59

 

VX-905

 

[***]

 

53

--------------------------------------------------------------------------------

 

Information redacted pursuant to a confidential treatment request.  An
unredacted version of this
exhibit has been filed separately with the Commission.

 

Schedule 1.60

 

VX-950

 

[g307922km13i001.gif]

 

54

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