Exhibit 10.6
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Triple asterisks denote omissions.

STRATEGIC COLLABORATION, OPTION AND LICENSE AGREEMENT
BETWEEN
VERTEX PHARMACEUTICALS INCORPORATED
VERTEX PHARMACEUTICALS (EUROPE) LIMITED
AND
CRISPR THERAPEUTICS AG
CRISPR THERAPEUTICS LIMITED
CRISPR THERAPEUTICS, INC.
TRACR HEMATOLOGY LTD.
STRATEGIC COLLABORATION, OPTION AND LICENSE AGREEMENT
This STRATEGIC COLLABORATION, OPTION AND LICENSE AGREEMENT (this “Agreement”) is
entered into as of October 26, 2015 (the “Effective Date”) by and between, on
the one hand, VERTEX PHARMACEUTICALS INCORPORATED, a corporation organized and
existing under the laws of The Commonwealth of Massachusetts (“Vertex Parent”),
and VERTEX PHARMACEUTICALS (EUROPE) LIMITED, a private limited liability company
organized under the laws of England and Wales (“Vertex UK” and, together with
Vertex Parent, “Vertex”) and, on the other hand, CRISPR THERAPEUTICS AG, a
corporation organized under the laws of Switzerland (“CRISPR AG”), CRISPR
THERAPEUTICS, INC., a corporation organized under the laws of the state of
Delaware (“CRISPR Inc.”), CRISPR THERAPEUTICS LIMITED, a corporation organized
under the laws of England and Wales (“CRISPR UK”) and TRACR HEMATOLOGY LTD, a UK
limited company (“Tracr” and together with CRISPR AG, CRISPR Inc. and CRISPR UK
“CRISPR”). Vertex and CRISPR each may be referred to herein individually as a
“Party” or collectively as the “Parties.”
RECITALS
WHEREAS, CRISPR possesses certain Patents, Know-How, technology and expertise
with respect to the CRISPR/Cas System (as defined below);
WHEREAS, Vertex possesses expertise in developing and commercializing human
therapeutics;
WHEREAS, Vertex and CRISPR desire to enter into a strategic collaboration
focused on exploring potential targets related to certain diseases and creating
therapeutics using gene editing [***], including the CRISPR/Cas System, to treat
such diseases; and
WHEREAS, simultaneously with the execution of this Agreement, the Parties are
entering into a convertible debt instrument, pursuant to which Vertex will
provide CRISPR AG with a total of $30,000,000 in funding, which funding will be
converted into shares of CRISPR AG’s preferred stock in accordance with the
terms thereof;

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

Exhibit 10.6
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Triple asterisks denote omissions.

NOW, THEREFORE, in consideration of the respective covenants, representations,
warranties and agreements set forth herein, the Parties hereto agree as follows:
ARTICLE 1.

DEFINITIONS
For purposes of this Agreement, the following capitalized terms will have the
following meanings:
1.1.
“Acceptance” means, with respect to an Approval Application filed for a Product,
(a) in the United States, the receipt of written notice from the FDA that such
Approval Application is officially “filed,” or (b) in the European Union, the
receipt of written notice of acceptance by the EMA of such Approval Application
for filing under the centralized European procedure in accordance with any
feedback received from EU Regulatory Authorities; provided that if the
centralized filing procedure is not used, then Acceptance will be determined
upon the acceptance of such Approval Application by the applicable Regulatory
Authority in a Major Market Country in the EU.

1.2.
“Additional Research” has the meaning set forth in Section 2.12.

1.3.
“Additional Research Budget” has the meaning set forth in Section 2.12.

1.4.
“Additional Research Plan” has the meaning set forth in Section 2.12.

1.5.
“Adverse Event” has the meaning set forth in the Applicable Law for such term
(or comparable term), and will generally mean any untoward medical occurrence in
a subject in any Clinical Trial who has received a Licensed Agent or Product,
medical device or placebo, and which does not necessarily have a causal
relationship with such Licensed Agent, Product, medical device or placebo,
including any unfavorable and unintended sign (including an abnormal laboratory
finding), symptom or disease temporally associated with the use of the
applicable Licensed Agent or Product, whether or not related to such Licensed
Agent or Product.

1.6.
“Affiliate” means, as of any point in time and for so long as such relationship
continues to exist with respect to any Person, any other Person that controls,
is controlled by or is under common control with such Person. A Person will be
regarded as in control of another Person if it (a) owns or controls more than
50% of the equity securities of the subject Person entitled to vote in the
election of directors (or, in the case of a Person that is not a corporation,
for the election of the corresponding managing authority); provided, however,
that the term “Affiliate” will not include subsidiaries or other entities in
which a Person owns a majority of the ordinary voting power necessary to elect a
majority of the board of directors or other governing board, but is restricted
from electing such majority by contract or otherwise, until such time as such
restrictions are no longer in effect, or (b) possesses, directly or indirectly,
the power to direct or cause the direction of the management or policies of an
such Person (whether through ownership of securities or other ownership
interests, by contract or otherwise).

1.7.
“Agreement” has the meaning set forth in the Preamble.

1.8.
“Agreement Term” means the period commencing on the Effective Date and ending on
the expiration of this Agreement pursuant to Section 11.1, unless terminated
earlier as provided herein.

2

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

Exhibit 10.6
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Triple asterisks denote omissions.

1.9.
“Alliance Manager” has the meaning set forth in Section 3.4.1.

1.10.
“Applicable Law” means all applicable laws, statutes, rules, regulations and
other pronouncements having the effect of law of any federal, national,
multinational, state, provincial, county, city or other political subdivision,
agency or other body, domestic or foreign, including any applicable rules,
regulations, guidelines, or other requirements of the Regulatory Authorities
that may be in effect from time to time.

1.11.
“Approval Application” means a BLA, NDA or similar application or submission for
a Product filed with a Regulatory Authority in a country or group of countries
to obtain marketing approval for a biological or pharmaceutical product in that
country or group of countries.

1.12.
“Audited Party” has the meaning set forth in Section 7.9.

1.13.
“Auditing Party” has the meaning set forth in Section 7.9.

1.14.
“Available” has the meaning set forth in Section 1.34.

1.15.
“BLA” means a Biological License Application that is submitted to the FDA for
marketing approval for a Licensed Agent or Product pursuant to 21 C.F.R.
§ 601.2.

1.16.
[***].

1.17.
[***].

1.18.
“Breaching Party” means the Party that is believed by the other Party to be in
material breach of this Agreement.

1.19.
“Business Day” means a Monday, Tuesday, Wednesday, Thursday or Friday that is
not a day on which banking institutions in Boston, Massachusetts are authorized
or obligated to close.

1.20.
“Calendar Quarter” means the respective periods of three consecutive calendar
months ending on March 31, June 30, September 30 or December 31, during the
Agreement Term, or the applicable part thereof during the first or last calendar
quarter of the Agreement Term.

1.21.
“Calendar Year” means any calendar year ending on December 31, or the applicable
part thereof during the first or last year of the Agreement Term.

1.22.
“cGMP” means current Good Manufacturing Practices as specified in the United
States Code of Federal Regulations, ICH Guideline Q7A, or equivalent laws,
rules, or regulations of an applicable Regulatory Authority at the time of
manufacture.

1.23.
“Change of Control” means, with respect to a Party, (a) a merger or
consolidation of such Party with a Third Party that results in the voting
securities of such Party outstanding immediately prior thereto, or any
securities into which such voting securities have been converted or exchanged,
ceasing to represent more than 50% of the combined voting power of the surviving
entity or the parent of the surviving entity immediately after such merger or
consolidation, or (b) a transaction or series of related transactions in which a
Third Party, together with its Affiliates, becomes the beneficial owner of more
than 50% of the combined voting power of the outstanding securities of such
Party, or (c) the sale or other transfer to a

3

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Exhibit 10.6
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Triple asterisks denote omissions.

Third Party of all or substantially all of such Party’s business to which the
subject matter of this Agreement relates. Notwithstanding the foregoing, with
respect to CRISPR, the term “Change of Control” will not include any sale of
shares of capital stock of CRISPR, in a single transaction or series of related
transactions in which CRISPR issues new securities solely to institutional
investors for cash or the cancellation or conversion of indebtedness or a
combination thereof where such transaction(s) are conducted primarily for bona
fide equity financing purposes.
1.24.
“Clinical Trial” means a study in humans that is conducted in accordance with
GCP and is designed to generate data in support of an Approval Application.

1.25.
“Collaboration Program” means, on a Collaboration Target-by-Collaboration Target
basis, a Research program dedicated to the design, optimization and Research of
Licensed Agents and Products directed to such Collaboration Target pursuant to a
Research Plan and, upon Vertex’s exercise of the Option for a Collaboration
Target, Vertex’s (or with respect to any Hemoglobinopathy Target [***], the
Parties’) Research, Development, Manufacture and Commercialization of such
Licensed Agents and Products.

1.26.
“Collaboration Program Working Group” has the meaning set forth in Section 3.2.

1.27.
“Collaboration Target” means a Vertex Target that Vertex has selected as the
subject of a Research Plan in accordance with Section 2.3.3.

1.28.
“Combination Product” has the meaning set forth in Section 1.117.

1.29.
“Commercialize” or “Commercializing” means to market, promote, distribute, offer
for sale, sell, have sold, import, export or otherwise commercialize a product,
to conduct activities, other than Research, Development and Manufacturing, in
preparation for the foregoing activities, including obtaining Price Approval,
and to conduct post-Marketing Approval studies (including Clinical Trials). When
used as a noun, “Commercialization” means any and all activities involved in
Commercializing.

1.30.
“Commercially Reasonable Efforts” means with respect to the efforts to be
expended by any Person, with respect to any objective, reasonable, diligent and
good faith efforts to accomplish such objective. With respect to any objective
relating to the Research, Development or Commercialization of a Licensed Agent
or Product, “Commercially Reasonable Efforts” means [***], taking into account,
without limitation, with respect to each Licensed Agent or Product, (a) [***],
(b) [***], (c) [***], (d) [***], (e) [***], (f) [***], (g) [***], (h) [***],
(i) [***] and (j) [***]. “Commercially Reasonable Efforts” shall be [***].

1.31.
“Competitive Infringement” has the meaning set forth in Section 8.6.1.

1.32.
“Competitive Program” has the meaning set forth in Section 1.33.

1.33.
“Competitor” means any pharmaceutical company that is conducting a research,
development or commercial program for a product that is intended to (a) [***],
(b) [***] or (c) [***] (each of (a)-(c), a “Competitive Program”).

1.34.
“Confidential Information” means, with respect to each Party, all Know-How or
other information, including proprietary information (whether or not patentable)
regarding or

4

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Exhibit 10.6
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Triple asterisks denote omissions.

embodying such Party’s technology, products, business information or objectives,
that is communicated in any way or form by or on behalf of the Disclosing Party
to the Receiving Party or its permitted recipients, prior to, on or after the
Effective Date, whether or not such Know-How or other information is identified
as confidential at the time of disclosure. The terms and conditions of this
Agreement will be considered Confidential Information of both Parties, with both
Parties deemed to be the Receiving Party of such Confidential Information. The
Vertex Target List and the identity of the Collaboration Targets hereunder will
be the Confidential Information of both Parties; provided, that if Vertex
exercises the Option for a Collaboration Target, the identity of such
Collaboration Target will be Vertex’s Confidential Information and will no
longer be CRISPR’s Confidential Information; and provided, further, [***]
Notwithstanding any provision of this Section 1.34 to the contrary, Confidential
Information does not include any Know-How or information that: (a) was already
known by the Receiving Party (other than under an obligation of confidentiality
to the Disclosing Party) at the time of disclosure by or on behalf of the
Disclosing Party; (b) was generally available to the public or otherwise part of
the public domain at the time of its disclosure to the Receiving Party;
(c) became generally available to the public or otherwise part of the public
domain after its disclosure to the Receiving Party, other than through any act
or omission of the Receiving Party in breach of its obligations under this
Agreement; (d) was disclosed to the Receiving Party, other than under an
obligation of confidentiality, by a Third Party who had no obligation to the
Disclosing Party not to disclose such information to the Receiving Party; or
(e) was independently discovered or developed by or on behalf of the Receiving
Party without the use of any Confidential Information belonging to the
Disclosing Party; provided, in connection with the foregoing exclusions from
protection, that specific Confidential Information shall not be deemed to be
known, generally available, in the public domain, disclosed, independently
discovered or developed (individually and collectively “Available”), merely
because broader or related information is Available, nor shall combinations of
elements or principles be considered to be Available merely because individual
elements thereof are Available.
1.35.
“Continuation Notice” has the meaning set forth in Section 2.6.

1.36.
“Continuation Research” has the meaning set forth in Section 2.6.

1.37.
“Control” or “Controlled” means with respect to any Know-How or Patent or other
data, information or Materials, possession of the ability by a Party or its
Affiliate(s) (whether by sole or joint ownership, license or otherwise, other
than pursuant to this Agreement) to grant, without violating the terms of any
agreement with a Third Party, a license, access or other right in, to or under
such Know-How or Patent or other data, information or Materials. Notwithstanding
anything in this Agreement to the contrary, a Party will be deemed to not
Control any Patents or Know-How that are owned or controlled by a Third Party
described in the definition of “Change of Control,” or such Third Party’s
Affiliates (other than an Affiliate of such Party prior to the Change of
Control), (a) prior to the closing of such Change of Control, except to the
extent that any such Patents or Know-How were developed prior to such Change of
Control through the use of such Party’s technology, or (b) after such Change of
Control to the extent that such Patents or Know-How are developed or conceived
by such Third Party or its Affiliates (other than such Party) after such Change
of Control without using or incorporating such Party’s technology.

1.38.
“Cost Report” has the meaning set forth in Section 7.4.2.

5

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

Exhibit 10.6
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Triple asterisks denote omissions.

1.39.
“Cover,” “Covering” or “Covers” means, as to a product and Patent, that, in the
absence of a license granted under, or ownership of, such Patent, the making,
using, keeping, selling, offering for sale or importation of such product would
infringe such Patent or, as to a pending claim included in such Patent, the
making, using, selling, offering for sale or importation of such product would
infringe such Patent if such pending claim were to issue in an issued patent
without modification.

1.40.
“CREATE Act” means the Cooperative Research and Technology Enhancement Act of
2004, 35 U.S.C. § 103(c)(2)-(c)(3).

1.41.
“CRISPR” has the meaning set forth in the Preamble.

1.42.
“CRISPR Activities” means any and all Research activities other than Vertex
Activities under any Research Plan.

1.43.
“CRISPR Agreement Breach” has the meaning set forth in Section 11.2.3(a).

1.44.
“CRISPR Background Know-How” means any Know-How, other than Joint Program
Know-How and CRISPR Program Know-How, that (a) [***] and (b) [***]. On a
Collaboration Target-by-Collaboration Target basis, CRISPR Background Know-How
will exclude [***]. For the avoidance of doubt, the CRISPR Background Know-How
includes the Know-How claimed or disclosed in the CRISPR Platform Technology
Patents.

1.45.
“CRISPR Background Patents” means any Patent, other than a Joint Program Patent,
CRISPR Program Patent or CRISPR Platform Technology Patent that (a) [***] and
(b) [***]. On a Collaboration Target-by-Collaboration Target basis, CRISPR
Background Patents will exclude [***].

1.46.
“CRISPR Breach Event” has the meaning set forth in Section 11.2.3(a).

1.47.
“CRISPR Entity” means, when used in the singular, any one of CRISPR UK, CRISPR
AG, CRISPR Inc. or Tracr. “CRISPR Entities” means, when used in the plural,
CRISPR UK, CRISPR AG, CRISPR Inc. and Tracr.

1.48.
“CRISPR Indemnified Party” has the meaning set forth in Section 10.1.

1.49.
“CRISPR In-License Agreements” has the meaning set forth in Section 7.6.1.

1.50.
“CRISPR Platform Technology Patents” means all Patents that are owned, used,
developed by, or licensed to CRISPR or its Affiliates, in each case to the
extent Controlled by CRISPR or its Affiliates on the Effective Date or at any
time during the Agreement Term, claiming [***]. For clarity, the CRISPR Platform
Technology Patents (i) will not include [***] and (ii) will include all [***].

1.51.
“[***] Patent” has the meaning set forth in Section 8.1.3(a).

1.52.
“CRISPR Program Breach” has the meaning set forth in Section 11.2.3(a).

1.53.
“CRISPR Program Know-How” has the meaning set forth in Section 8.1.2(a).

6

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

Exhibit 10.6
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Triple asterisks denote omissions.

1.54.
“CRISPR Program Patents” has the meaning set forth in Section 8.1.2(a).

1.55.
“CRISPR Program Technology” has the meaning set forth in Section 8.1.2(a).

1.56.
“CRISPR Reserved Target” means all Targets described or identified on
Schedule A.

1.57.
“CRISPR/Cas System” means a clustered regularly interspaced short palindromic
repeats (CRISPR)/CRISPR-associated (Cas) protein system that comprises (a) [***]
and (b) [***].

1.58.
“Development” means, with respect to a Licensed Agent, all clinical and
non-clinical research and development activities conducted after filing of an
IND for such Licensed Agent, including toxicology, pharmacology test method
development and stability testing, process development, formulation development,
delivery system development, quality assurance and quality control development,
statistical analysis, Clinical Trials (other than post-Marketing Approval
Clinical Trials), regulatory affairs, pharmacovigilance, Clinical Trial
regulatory activities and obtaining and maintaining Regulatory Approval. When
used as a verb, “Develop” or “Developing” means to engage in Development.

1.59.
“Disclosing Party” has the meaning set forth in Section 12.1.

1.60.
“Distracting Product” means a product containing (a) [***] or (b) [***].

1.61.
“Distributor” means a Third Party to whom Vertex grants a right to sell or
distribute a Product, that does not make payments to Vertex that are calculated
on the basis of a percentage of, or profit share on, such Third Party’s sales of
Products.

1.62.
“Divestiture” means, with respect to a Distracting Product, the sale, exclusive
license or other transfer by the applicable Party and its Affiliates of all of
their development and commercialization rights with respect to such Distracting
Product to a Third Party without the retention or reservation of any development
or commercialization obligation, interest or participation rights (other than
solely an economic interest or the right to enforce customary terms and
conditions contained in the relevant agreements effectuating such transaction).
When used as a verb, “Divest” means the to engage in a Divestiture.

1.63.
“DOJ” has the meaning set forth in Section 4.1.2(a).

1.64.
“Effective Date” has the meaning set forth in the Preamble.

1.65.
“EMA” means the European Medicines Agency and any successor entity thereto.

1.66.
“Establishment of POC” with respect to a Product, [***] that [***] (a) [***] and
(b) [***].

1.67.
“European Commission” means the European Commission or any successor entity that
is responsible for granting marketing approvals authorizing the sale of
pharmaceuticals in the European Union.

1.68.
“European Union” or “EU” means each and every country or territory that is
officially part of the European Union.

1.69.
“Exclusive License” has the meaning set forth in Section 5.3.1.

7

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Exhibit 10.6
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Triple asterisks denote omissions.

1.70.
“Executive Officers” means the Chief Scientific Officer of CRISPR AG, initially
Sven Ante (Bill) Lundberg, and the Chief Scientific Officer of Vertex, initially
David Altshuler; provided, that for purposes of Section 11.3.4(a), “Executive
Officers” means the Chief Executive Officer of CRISPR AG, initially Rodger
Novak, and the Chief Financial Officer of Vertex, initially Ian Smith.

1.71.
“FDA” means the United States Food and Drug Administration and any successor
entity thereto.

1.72.
“FD&C Act” means the United States Federal Food, Drug, and Cosmetic Act, as
amended, and the rules and regulations promulgated thereunder.

1.73.
“Field” means the diagnosis, treatment or prevention of disease in humans or
animals in [***].

1.74.
“Final Target Selection Period” means the [***] period following the Initial
Target Selection Period.

1.75.
“First Commercial Sale” means with respect to a Product, the first sale of such
Product by Vertex, its Affiliate or its Sublicensee to a Third Party resulting
in Net Sales in a particular country after any required Marketing Approval for
the Product has been obtained in such country.

1.76.
“Force Majeure” means a condition, the occurrence and continuation of which is
beyond the reasonable control of a Party, including an act of God, voluntary or
involuntary compliance with any regulation, law or order of any government, war,
civil commotion, labor strike or lock-out, epidemic, flood, failure or default
of public utilities or common carriers, destruction of production facilities or
materials by fire, earthquake, storm or like catastrophe.

1.77.
“Foundational Intellectual Property Rights” means all rights, title and interest
in [***]; and any worldwide patents and patent applications claiming priority
thereto and all inventions covered or claimed by such patent applications
(together with all provisionals, non-provisionals, substitutions, continuations,
continuations-in-part, divisionals, renewals and all patents granted thereon,
and all reissues, reexaminations, extensions, confirmations, revalidations,
registrations and patents of addition thereof, including patent term extensions
and supplementary protection certificates, international patent applications
filed under the Patent Cooperation Treaty (PCT) and any foreign equivalents to
any of the foregoing).

1.78.
“FTC” has the meaning set forth in Section 4.1.2(a).

1.79.
“FTE Rate” means, [***]; provided that such rates will increase or decrease on
[***] over the twelve month period preceding each such January 1.

1.80.
“GAAP” means United States generally accepted accounting principles,
consistently applied.

1.81.
“GCP” means good clinical practices, which are the then-current standards for
Clinical Trials for pharmaceuticals, as set forth in the FD&C Act or other
Applicable Law, and such standards of good clinical practice as are required by
the Regulatory Authorities of the European Union and other organizations and
governmental authorities in countries for which the applicable Licensed Agent is
intended to be Developed, to the extent such standards are not less stringent
than United States standards.

8

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Exhibit 10.6
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Triple asterisks denote omissions.

1.82.
“[***] Joint Program Know-How” has the meaning set forth in Section 8.1.2(d).

1.83.
“[***] Joint Program Patents” has the meaning set forth in Section 8.1.2(d).

1.84.
“[***] Joint Program Technology” has the meaning set forth in Section 8.1.2(d).

1.85.
“[***]” means [***], including, but not limited to, [***], and any variation
thereof, in each case [***].

1.86.
“Generic Product” means, with respect to a particular Product in a particular
country, a product on the market in such country commercialized by any Third
Party that is not a Sublicensee and that did not purchase such product in a
chain of distribution that included any of Vertex or its Affiliates or
Sublicensees, that (a) is approved by the applicable Regulatory Authority, under
any then-existing laws and regulations in the applicable country pertaining to
approval of generic or biosimilar biologic products, as a “generic” or
“biosimilar” version of such Product, which approval uses such Product as a
reference product and relies on or references pivotal safety or efficacy data in
the Approval Application for such Product or (b) otherwise meets the criteria
for constituting a “biosimilar” or “interchangeable” product pursuant to Section
351(k) of the Public Health Service Act (42 U.S.C. § 262(k)) or EMA Directive
2001/83/EC or any foreign equivalent thereof or successors thereto.

1.87.
“GLP” means the then-current good laboratory practice standards promulgated or
endorsed by the FDA as defined in 21 C.F.R. Part 58 or the successor thereto, or
comparable regulatory standards in jurisdictions outside of the United States,
to the extent such standards are not less stringent than United States
standards.

1.88.
“Governmental Authority” means any court, agency, department, authority or other
instrumentality of any national, state, county, city or other political
subdivision.

1.89.
“Hemoglobinopathy Target” means a Target related to the [***].

1.90.
“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, and the rules and regulations promulgated thereunder.

1.91.
“HSR Clearance Date” means the earliest date on which the Parties have actual
knowledge that all applicable waiting periods under the HSR Act with respect to
the transactions contemplated hereunder have expired or have been terminated.

1.92.
“HSR Filing” means a filing by Vertex and CRISPR with the FTC and the DOJ of a
Notification and Report Form for Certain Mergers and Acquisitions (as that term
is defined in the HSR Act) with respect to the matters set forth in this
Agreement, together with all required documentary attachments thereto.

1.93.
“IND” means any Investigational New Drug application, filed with the FDA
pursuant to Part 312 of Title 21 of the U.S. Code of Federal Regulations,
including any supplements or amendments thereto. References herein to IND will
include, to the extent applicable, any comparable filings outside the United
States.

1.94.
“Indemnified Party” has the meaning set forth in Section 10.3.

9

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Exhibit 10.6
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Triple asterisks denote omissions.

1.95.
“Indemnifying Party” has the meaning set forth in Section 10.3.

1.96.
“Initial Collaboration Targets” means the Targets set forth on Schedule B under
the heading “Initial Collaboration Targets.”

1.97.
“Initial Target Selection Period” means the first [***] of the Research Term.

1.98.
“Initiation” or “Initiate” means, with respect to any Clinical Trial, dosing of
the first human subject in such Clinical Trial.

1.99.
“Insolvency Event” has the meaning set forth in Section 11.2.5.

1.100.
“Joint Development & Commercialization Agreement” has the meaning set forth in
Section 6.1.2(c).

1.101.
“Joint Program Know-How” means [***] Joint Program Know-How, [***] Joint Program
Know-How and Other Joint Program Know-How.

1.102.
“Joint Program Patents” means [***] Joint Program Patents, [***] Joint Program
Patents and Other Joint Program Patents.

1.103.
“Joint Program Technology” means [***] Joint Program Technology, [***] Joint
Program Technology and Other Joint Program Technology.

1.104.
“Joint Research Committee” or “JRC” has the meaning set forth in Section 3.1.1.

1.105.
“Know-How” means intellectual property, data, results, pre-clinical and clinical
protocols and data from studies and Clinical Trials, chemical structures,
chemical sequences, information, inventions, know-how, formulas, trade secrets,
techniques, methods, processes, procedures and developments, whether or not
patentable; provided that Know-How does not include Patents claiming any of the
foregoing.

1.106.
“Knowledge” means [***] of [***] after [***].

1.107.
“Liability” has the meaning set forth in Section 10.1.

1.108.
“Licensed Agent” means a product comprising (a) [***], where such [***], or any
portion thereof is [***] or (b) [***] by such [***].

1.109.
“Licensed Know-How” means (a) CRISPR Background Know-How, (b) CRISPR Program
Know-How and (c) CRISPR’s interest in the Joint Program Know-How.

1.110.
“Licensed Patents” means (a) CRISPR Background Patents, (b) CRISPR Platform
Technology Patents, (c) CRISPR Program Patents, (d) [***] Patents (until [***])
and (e) CRISPR’s interest in the Joint Program Patents.

1.111.
“Licensed Technology” means, subject to Section 5.3.2 and Section 7.6.6, any and
all Licensed Patents and Licensed Know-How.

1.112.
“Major Market Country” means any one of the following countries: [***].

10

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

Exhibit 10.6
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Triple asterisks denote omissions.

1.113.
“Manufacture” or “Manufactured” or “Manufacturing” means activities directed to
making, having made, producing, manufacturing, processing, filling, finishing,
packaging, labeling, quality control testing and quality assurance release,
shipping or storage of a product.

1.114.
“Marketing Approval” means, with respect to a Product in a particular
jurisdiction, all approvals, licenses, registrations or authorizations necessary
for the Commercialization of such Product in such jurisdiction, including, with
respect to the United States, approval of an Approval Application for such
Product by the FDA and with respect to the European Union, approval of an
Approval Application for such Product by the European Commission.

1.115.
“Materials” means all biological materials or chemical compounds arising out of
a Party’s activities under this Agreement or otherwise provided by a Party for
use by the other Party to conduct activities pursuant to this Agreement,
including Licensed Agents, Clinical Trial samples, cell lines, assays, viruses
and vectors.

1.116.
“NDA” means a new drug application that is submitted to the FDA for marketing
approval for a Licensed Agent or Product, pursuant to 21 C.F.R. § 314.3.

1.117.
“Net Sales” means the gross invoiced price for Products sold by Vertex, its
Affiliates or Sublicensees (the “Selling Party”) to Third Parties, less the
following deductions from such gross amounts:

(a)
credits or allowances, if any are actually allowed, on account of price
adjustments, recalls, claims, damaged goods, rejections or returns of items
previously sold (including product returned in connection with recalls or
withdrawals) and amounts written off by reason of uncollectible
debt, provided that if the debt is thereafter paid, the corresponding amount
shall be added to the Net Sales for the period during which it is paid;

(b)
import taxes, export taxes, excise taxes (including annual fees due under
Section 9008 of the United States Patient Protection and Affordable Care Act of
2010 (Pub. L. No. 111-48)), sales taxes, value-added taxes, consumption taxes,
duties or other taxes levied on, absorbed, determined or imposed with respect to
such sales (excluding income or net profit taxes or franchise taxes of any
kind), to the extent not reimbursed by a non-related party;

(c)
insurance, customs charges, freight, shipping and other transportation costs
incurred in shipping product to such non-related parties, to the extent incurred
by a Selling Party and not reimbursed by a non-related party;

(d)
reasonable discounts (including trade, quantity and cash discounts) actually
allowed, cash and non-cash coupons, retroactive price reductions, and charge
back payments and rebates granted to any non-related party (including to
governmental entities or agencies, purchasers, reimbursers, customers,
Distributors, wholesalers, and group purchasing organizations and managed care
organizations (and other similar entities and institutions)); and

(e)
rebates (or their equivalent), administrative fees, chargebacks and retroactive
price adjustments and any other similar allowances granted to non-related
Parties (including to Governmental Authorities, purchasers, reimbursers,

11

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

Exhibit 10.6
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Triple asterisks denote omissions.

customers, Distributors, wholesalers, and managed care organizations (and other
similar entities and institutions)) which effectively reduce the gross invoiced
sales price of the Product.
Generally, only items that are deducted from the Selling Party’s gross invoiced
sales price of Product(s), as included in the Selling Party’s published
financial statements and that are in accordance with GAAP, applied on a
consistent basis, will be deducted from such gross invoiced sales price for
purposes of the calculation of Net Sales. However, compulsory payments required
by federal or state governments based upon sales volume or market share of
Products (but for clarity excluding taxes on the Selling Party’s net income), to
the extent borne by the Selling Party, will be deducted from “Net Sales”
regardless of its classification in the Selling Party’s published financial
statements; provided that any such deduction will be limited to that share of
such compulsory payment proportional to the share of the total sales volume or
market share of the Selling Party used to compute the compulsory payment
represented by applicable Net Sales of Products.
A qualifying amount may be deducted only once regardless of the number of the
preceding categories that describe such amount. If a Selling Party makes any
adjustment to such deductions after the associated Net Sales have been reported
pursuant to this Agreement, the adjustments and payment of any royalties due
will be reported with the next quarterly report. Sales between or among Vertex,
its Affiliates and Sublicensees will be excluded from the computation of Net
Sales if such sales are not intended for end use, but Net Sales will include the
subsequent final sales to Third Parties by Vertex or any such Affiliates or
Sublicensees. A Product will not be deemed to be sold if the Product is provided
free of charge to a Third Party in reasonable quantities as a sample consistent
with industry standard promotional and sample practices. For clarity, [***].
If a sale, transfer or other disposition with respect to Products involves
consideration other than cash or is not at arm’s length, then the Net Sales from
such sale, transfer or other disposition will be calculated on the [***].
Solely for purposes of calculating Net Sales, if Vertex or its Affiliates or any
permitted Sublicensee sells a Product in the form of a combination product
containing a Licensed Agent and one or more other therapeutically or
prophylactically active ingredients or delivery devices (whether combined in a
single formulation or package, as applicable, or formulated separately but
packaged under a single label approved by a Regulatory Authority and sold
together for a single price) (a “Combination Product”), Net Sales of such
Combination Product for the purpose of determining the payments due to CRISPR
pursuant to this Agreement will be calculated by multiplying actual Net Sales of
such Combination Product as determined in the first paragraph of the definition
of “Net Sales” by the fraction A/(A+B) where [***]. The weighted average invoice
prices referenced above will be calculated with reference to the prevailing
prices during the applicable Calendar Quarter in those top selling countries
that equate to [***] of Net Sales of the applicable Product in the Territory,
with the prices weighted in the calculation to reflect the actual relative sales
value of the Product in each of the countries to which the calculation relates.
If it is not possible to determine the fraction A/(A+B) based on the criteria
specified in the preceding sentence (e.g., if a Product component is not sold
separately), the Parties shall determine Net Sales for the Product in such
Combination Product in good faith by mutual agreement [***].
1.118.
“[***]” has the meaning set forth in Section 7.6.2(a).

12

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

Exhibit 10.6
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Triple asterisks denote omissions.

1.119.
“Non-Breaching Party” means the Party that believes the other Party is in
material breach of this Agreement.

1.120.
“Non-Disclosing Party” has the meaning set forth in Section 12.5.3.

1.121.
“Option” has the meaning set forth in Section 4.1.1.

1.122.
“Option Cap” has the meaning set forth in Section 4.1.1.

1.123.
“Option Deadline” has the meaning set forth in Section 4.1.1.

1.124.
“Option Exercise” means, with respect to a Collaboration Target, Vertex’s
exercise of an Option as provided in Section 4.1.1; provided, that if Vertex
notifies CRISPR that an HSR Filing is required as provided, in Section 4.1.1,
Option Exercise will not occur until the HSR Clearance Date.

1.125.
“Option Exercise Data Package” means, with respect to a Collaboration Program, a
data package containing the information set forth on Schedule C.

1.126.
“Other Joint Program Know-How” has the meaning set forth in Section 8.1.2(e).

1.127.
“Other Joint Program Patents” has the meaning set forth in Section 8.1.2(e).

1.128.
“Other Joint Program Technology” has the meaning set forth in Section 8.1.2(e).

1.129.
“Out-of-Pocket Costs” means, with respect to a Party, costs and expenses paid by
such Party to Third Parties (or payable to Third Parties and accrued in
accordance with GAAP), other than Affiliates or employees of such Party.

1.130.
“Party” or “Parties” has the meaning set forth in the Preamble.

1.131.
“Patent Coordinator” has the meaning set forth in Section 8.3.

1.132.
“Patent Costs” means the reasonable fees and expenses paid to outside legal
counsel, and filing, maintenance, disbursement and other reasonable
Out-of-Pocket Costs paid to Third Parties, in connection with the Prosecution
and Maintenance of Patents.

1.133.
“Patents” means the rights and interests in and to issued patents and pending
patent applications in any country, jurisdiction or region (including inventor’s
certificates and utility models), including all provisionals, non-provisionals,
substitutions, continuations, continuations-in-part, divisionals, renewals and
all patents granted thereon, and all reissues, reexaminations, extensions,
confirmations, revalidations, registrations and patents of addition thereof,
including patent term extensions and supplementary protection certificates,
international patent applications filed under the Patent Cooperation Treaty
(PCT) and any foreign equivalents to any of the foregoing.

1.134.
“Person” means an individual, sole proprietorship, partnership, limited
partnership, limited liability partnership, corporation, limited liability
company, business trust, joint stock company, trust, incorporated association,
joint venture or similar entity or organization, including a government or
political subdivision or department or agency of a government.

13

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

Exhibit 10.6
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Triple asterisks denote omissions.

1.135.
“Phase 2 Clinical Trial” means any human Clinical Trial conducted in patients
that is intended to provide preliminary evidence suggesting effectiveness of the
drug, including Clinical Trials described in 21 C.F.R. §312.21(b), or, with
respect to a jurisdiction other than the United States, a similar Clinical
Trial.

1.136.
“Phase 3 Clinical Trial” means, with respect to a Product, a pivotal Clinical
Trial in humans performed to gain evidence with statistical significance of the
efficacy of such Product in a target population, and to obtain expanded evidence
of safety for such Product that is needed to evaluate the overall benefit-risk
relationship of such Product, to form the basis for approval of an Approval
Application by a Regulatory Authority and to provide an adequate basis for
physician labeling, as described in 21 C.F.R. 312.21(c), as amended from time to
time, or the corresponding regulations in jurisdictions other than the United
States.

1.137.
“Price Approval” means, in any country where a Governmental Authority authorizes
reimbursement for, or approves or determines pricing for, pharmaceutical
products, receipt (or, if required to make such authorization, approval or
determination effective, publication) of such reimbursement authorization or
pricing approval or determination.

1.138.
“Proceeding” means an action, suit or proceeding.

1.139.
“Product” means any pharmaceutical product, medical therapy, preparation,
substance, or formulation comprising or employing, in whole or in part, a
Licensed Agent. All Products comprising the same Licensed Agent(s) (and no
additional Licensed Agents) will be considered the same Product under this
Agreement. 

1.140.
“[***] Claim” means a claim in any Patent that [***].

1.141.
“Product Development & Commercialization Plan” has the meaning set forth in
Section 6.4.

1.142.
“Prosecution and Maintenance” or “Prosecute and Maintain” means, with regard to
a Patent, the preparing, filing, prosecuting and maintenance of such Patent, as
well as handling re-examinations and reissues with respect to such Patent,
together with the conduct of interferences, the defense of oppositions and other
similar proceedings with respect to the particular Patent. For clarification,
“Prosecution and Maintenance” or “Prosecute and Maintain” will not include any
other enforcement actions taken with respect to a Patent.

1.143.
“[***] Patent” has the meaning set forth in Section 8.2.2.

1.144.
“Receiving Party” has the meaning set forth in Section 12.1.

1.145.
“Regulatory Approval” means the technical, medical and scientific licenses,
registrations, authorizations and approvals (including approvals of Approval
Applications, supplements and amendments, pre- and post- approvals, and labeling
approvals) of any Regulatory Authority, necessary for the Research, Development,
clinical testing, commercial manufacture, distribution, marketing, promotion,
offer for sale, use, import, export or sale of a pharmaceutical product in a
regulatory jurisdiction, including Marketing Approval.

1.146.
“Regulatory Authority” means, with respect to a country in the Territory, any
national (e.g., the FDA), supra-national (e.g., the European Commission, the
Council of the European Union, or the EMA), regional, state or local regulatory
agency, department, bureau, commission,

14

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

Exhibit 10.6
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Triple asterisks denote omissions.

council or other Governmental Authority involved in the granting of Regulatory
Approvals or Price Approvals for pharmaceutical products in such country or
countries.
1.147.
“Regulatory Filings” means, collectively: (a) all INDs, Approval Applications,
establishment license applications, Drug Master Files, applications for
designation as an “Orphan Licensed Product(s)” under the Orphan Drug Act, for
“Fast Track” status under Section 506 of the FD&C Act (21 U.S.C. § 356) or for a
Special Protocol Assessment under Section 505(b)(4)(B) and (C) of the FD&C Act
(21 U.S.C. § 355(b)(4)(B)) and all other similar filings (including counterparts
of any of the foregoing in any country or region in the Territory); (b) any
applications for Regulatory Approval or Price Approval and other applications,
filings, dossiers or similar documents submitted to a Regulatory Authority in
any country for the purpose of obtaining Regulatory Approval or Price Approval
from that Regulatory Authority; (c) all supplements and amendments to any of the
foregoing; and (d) any correspondence with Regulatory Authorities in connection
with any of the foregoing.

1.148.
“Research” means conducting research activities to discover and advance Licensed
Agents and Products, including pre-clinical studies and optimization, but
specifically excluding Development and Commercialization. When used as a verb,
“Researching” means to engage in Research.

1.149.
“Research Budget” has the meaning set forth in Section 2.2.

1.150.
“Research Costs” means the costs and expenses that are actually incurred by or
on behalf of CRISPR and specifically identifiable or specifically allocable to
the Research activities conducted under a Research Plan (including Continuation
Research) or an Additional Research Plan, including: (a) CRISPR’s and its
Affiliates fully absorbed internal costs with respect to such activities; and
(b) all Out-of-Pocket Costs incurred by CRISPR or its Affiliates, including
payments made to Third Parties with respect to such Research activities (except
to the extent that such costs have been included in internal costs). CRISPR’s
fully absorbed internal costs will be determined at the [***]. All other costs
will be determined from the books and records of CRISPR and its Affiliates
maintained in accordance with GAAP.

1.151.
“Research Plan” means each plan meeting the requirements set forth in
Section 2.2 to design and optimize Licensed Agents and Products for a specified
Target and to generate the data and information required to prepare the
applicable Option Exercise Data Package.

1.152.
“Research Term” has the meaning set forth in Section 2.4.

1.153.
“Residual Knowledge” means knowledge, techniques, experience and Know-How that
are (a) reflected in any Confidential Information owned or Controlled by the
Disclosing Party and (b) retained in the unaided memory of any authorized
representative of the Receiving Party after having access to such Confidential
Information. A Person’s memory will be considered to be unaided if the Person
has not intentionally memorized the Confidential Information for the purpose of
retaining and subsequently using or disclosing it. In no event, however, will
Residual Knowledge include any knowledge, techniques, experience and Know-How to
the extent (at any time, for such time) within the scope of any valid patent
claim owned or Controlled by the Disclosing Party.

1.154.
“Royalty Term” means, with respect to a Product in a country, the period
commencing on the first sale of such Product in such country and ending upon the
later of: (a) the expiration

15

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

Exhibit 10.6
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Triple asterisks denote omissions.

of the last Valid Claim of a Licensed Patent that Covers such Product in such
country; (b) [***] after the First Commercial Sale of such Product in such
country; or (c) expiration of all applicable regulatory exclusivity periods,
including data exclusivity, in such country with respect to such Product.
1.155.
“Safety Data Exchange Agreement” has the meaning set forth in Section 6.6.3.

1.156.
“Selling Party” has the meaning set forth in Section 1.117.

1.157.
“Setoff Amount” has the meaning set forth in Section 11.3.3.

1.158.
[***].

1.159.
“Shared Product” has the meaning set forth in Section 6.1.2(a).

1.160.
“Subcontractor” has the meaning set forth in Section 2.9.

1.161.
“Sublicense” means, directly or indirectly, to sublicense, grant any other right
with respect to, or agree not to assert, any licensed right under any Patent,
Know-How or other intellectual property right. When used as a noun, “Sublicense”
means any agreement to Sublicense.

1.162.
“Sublicensee” means an Affiliate or Third Party, other than a Distributor, to
whom Vertex (or a Sublicensee or Affiliate) sublicenses any of the rights
granted to Vertex hereunder during the Agreement Term.

1.163.
“Substitution Cap” has the meaning set forth in Section 2.3.2(a).

1.164.
“Target” means a [***] the [***] of which is associated with a human disease and
which is to be edited, [***] in order to treat, ameliorate or prevent such
disease. 

1.165.
“Target Cap” has the meaning set forth in Section 2.3.2(a).

1.166.
“Target Selection Period” means the Initial Target Selection Period and the
Final Target Selection Period.

1.167.
“[***] Joint Program Know-How” has the meaning set forth in Section 8.1.2(c).

1.168.
“[***] Joint Program Patents” has the meaning set forth in Section 8.1.2(c).

1.169.
“[***] Joint Program Technology” has the meaning set forth in Section 8.1.2(c).

1.170.
“Targeting” means [***] a Target or the [***] thereof.

1.171.
“Territory” means all countries of the world.

1.172.
“Third Party” means any Person other than Vertex, CRISPR or their respective
Affiliates.

1.173.
“Third Party Obligations” means any non-financial encumbrances, obligations,
restrictions, or limitations imposed by a CRISPR In-License Agreement or [***]
that are required to be passed through to a sublicensee and relate to a Product
or a Collaboration Target, including

16

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

Exhibit 10.6
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Triple asterisks denote omissions.

field or territory restrictions, covenants, diligence obligations or limitations
pertaining to enforcement of intellectual property rights.
1.174.
“United States” or “U.S.” means the fifty states of the United States of America
and all of its territories and possessions and the District of Columbia.

1.175.
“Valid Claim” means a claim (a) of any issued, unexpired United States or
foreign Patent, which will not, in the country of issuance, have been donated to
the public, disclaimed, nor held invalid or unenforceable by a court of
competent jurisdiction in an unappealed or unappealable decision, or (b) of any
United States or foreign patent application, which will not, in the country in
question, have been cancelled, withdrawn or abandoned. Notwithstanding the
foregoing, on a country-by-country basis, a patent application pending for more
than [***] years, or [***], will not be considered to have any Valid Claim for
purposes of this Agreement unless and until a patent meeting the criteria set
forth in clause (a) above with respect to such application issues.

1.176.
“Vertex” has the meaning set forth in the Preamble.

1.177.
“Vertex Activities” means, under any Research Plan, any and all Research
activities that Vertex agrees to conduct and for which it is specifically
designated as the responsible Party under the Research Plan.

1.178.
“Vertex Background Know-How” means any Know-How, other than Joint Program
Know-How and Vertex Program Know-How, that (a) Vertex or any of its Affiliates
Control as of the Effective Date or that comes into the Control of Vertex or any
of its Affiliates during the Agreement Term and (b) [***].

1.179.
“Vertex Background Patents” means any Patent, other than a Joint Program Patent
or Vertex Program Patent that (a) Vertex or any of its Affiliates Control as of
the Effective Date or that comes into the Control of Vertex or any of its
Affiliates during the Agreement Term and (b) [***].

1.180.
“Vertex Indemnified Party” has the meaning set forth in Section 10.2.

1.181.
“Vertex Parent” has the meaning set forth in the Preamble.

1.182.
“Vertex Program Know-How” has the meaning set forth in Section 8.1.2(b).

1.183.
“Vertex Program Patents” has the meaning set forth in Section 8.1.2(b).

1.184.
“Vertex Program Technology” has the meaning set forth in Section 8.1.2(b).

1.185.
“Vertex Share” has the meaning set forth in Section 7.6.4.

1.186.
“Vertex Target” has the meaning set forth in Section 2.3.1.

1.187.
“Vertex Target List” has the meaning set forth in Section 2.3.1.

17

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

Exhibit 10.6
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Triple asterisks denote omissions.

1.188.
“Vertex Technology” means (a) the Vertex Background Know-How, (b) the Vertex
Background Patents, (c) the Vertex Program Technology, and (d) Vertex’s interest
in any Joint Program Technology.

1.189.
“Vertex UK” has the meaning set forth in the Preamble.

ARTICLE 2.    
RESEARCH
2.1.
Collaboration Overview. The Parties will collaborate by performing the
activities set forth in each Research Plan for the purpose of designing and
optimizing Licensed Agents and Products for Vertex (or with respect to the
Shared Products, for the Parties) to advance through Clinical Trials and bring
to patients as commercial products in the Field.

2.2.
Research Plans. During the Research Term CRISPR and Vertex will conduct
Collaboration Programs, each under a separate Research Plan, focused on the
design and optimization of Licensed Agents and Products for a specific
Collaboration Target. The components of the initial Research Plans to be
developed for the Collaboration Targets are attached hereto as Schedule D. Each
Research Plan will be generally consistent with such initial Research Plans with
respect to the scope and content thereof. The Collaboration Program Working
Group will update each ongoing Research Plan and submit the updated Research
Plans to the JRC for its review and approval on an as-needed basis, but in no
event less than once every [***]. Each Research Plan will include (a) a
description of the process and criteria to be used by the Parties to design and
optimize Licensed Agents to be used in Products directed to the applicable
Collaboration Target, (b) projected timelines for activities under the Research
Plan, (c) a budget for activities under such Research Plan (each, a “Research
Budget”), (d) decision points and associated criteria for the Research Plan,
including, without limitation, pre-specified criteria for establishing the
elements of the Option Exercise Data Package for the applicable Collaboration
Target, (e) a description of which Party will be responsible for each activity
under the Research Plan; provided that unless otherwise specified in the
applicable Research Plan, each Party will be responsible for the activities for
which it is listed under the heading “Responsible Party” on Schedule C, and
(f) the content of an Option Exercise Data Package, and, to the extent
practicable, the specific criteria for acceptance of the Option Exercise Data
Package (e.g., [***]).

2.3.
Target Selection.

2.3.1.
Vertex Target List. The Collaboration Targets will be selected from a list of
Targets selected by Vertex (each such Target, a “Vertex Target,” and
collectively, the “Vertex Targets” and such list, the “Vertex Target List”). As
of the Effective Date, the initial Collaboration Targets and initial Vertex
Targets are included on Schedule B.

2.3.2.
Process to Update the Vertex Target List.

(a)
Subject to Section 2.3.2(c), Vertex may [***] Targets as Vertex Targets on the
Vertex Target List [***] a Target for a Vertex Target on the Vertex Target List
(subject to the [***] Cap) upon written notice to CRISPR; provided that (i)
[***], and (ii) [***] (the “Target Cap”). If the [***] to the Vertex Target List
would cause the number of Vertex Targets on the Vertex Target List to [***] or

18

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

Exhibit 10.6
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Triple asterisks denote omissions.

if Vertex is [***] during the Final Target Selection Period, such notice also
will specify the Vertex Target to be [***] on the Vertex Target List by such
[***] Target. Vertex shall be permitted to [***] of (A) [***] and (B) [***] ((A)
or (B), as applicable, the “[***] Cap”).
(b)
For the avoidance of doubt, (1) after the Initial Target Selection Period,
Vertex may [***] Targets as Vertex Targets and (2) after the first [***] of the
Final Target Selection Period Vertex may [***] Targets within the Vertex Target
List, in each case, [***]. The Parties will in good faith discuss any request by
Vertex during the Research Term to [***] Targets on the Vertex Target List made
at any time when Vertex does not have the right to make such [***] under
Section 2.3.2(a).

(c)
If Vertex proposes to [***] a CRISPR Reserved Target to the Vertex Target List
or [***] a CRISPR Reserved Target for a Vertex Target on the Vertex Target List
pursuant to Section 2.3.2(a) above, such [***] shall not be effective, and
CRISPR shall notify Vertex in writing within [***] after the date on which
CRISPR receives notice of the proposed [***], that such Target is a CRISPR
Reserved Target. CRISPR shall, if requested by Vertex in writing, [***] and, if
CRISPR [***] that such Target is a [***] based, in whole or in part, on [***],
it shall so notify Vertex. If after providing [***] Vertex will so notify
CRISPR, then CRISPR will, [***]. If CRISPR [***] that such Target is a [***]
under [***], Vertex may [***]. The [***] shall promptly [***]. The [***];
provided, that if, notwithstanding [***], CRISPR believes that a Target is a
CRISPR Reserved Target under paragraph 3 of Schedule A, CRISPR may pursue [***]
solely with respect to [***]. If a proposed Target is not [***] due to the
provisions of this Section 2.3.2(c), such Target will not count against the
Substitution Cap (if applicable) and the Vertex Target on the Vertex Target List
that was to be replaced by such Target shall remain on the Vertex Target List
(if applicable). If, during the Research Term, any Target excluded from the
Vertex Target List pursuant to this Section 2.3.2(c) ceases to be a CRISPR
Reserved Target, CRISPR will promptly notify Vertex that such Target is no
longer a CRISPR Reserved Target, and, thereafter, Vertex may at its option
(exercisable at any time within [***] of such notice) add such Target to the
Vertex Target List, subject to the limitations set forth in this Section 2.3.2.
Vertex may remove Targets from the Vertex Target List upon written notice to
CRISPR and thereafter such removed Target will no longer be a Vertex Target
(unless such Target is later added again as a Vertex Target in accordance with
this Section 2.3.2).

2.3.3.
Collaboration Target Selection. Vertex may elect to designate a Vertex Target as
a Collaboration Target at any time during the Research Term upon written notice
to CRISPR. Within [***] after the designation of a Collaboration Target, the
Collaboration Program Working Group will be formed and will provide the JRC an
initial draft Research Plan for such Collaboration Target. Subject to
Section 3.1.3, the JRC will review such plan and agree upon a final Research
Plan for such Collaboration Target. Collaboration Targets continue to be
included as Vertex Targets for purposes of the Target Cap.

19

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

Exhibit 10.6
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Triple asterisks denote omissions.

2.3.4.
[***]. The Parties acknowledge that [***] is included as an Initial
Collaboration Target [***]. During the Research Term, CRISPR will periodically
disclose to Vertex any material findings generated by CRISPR in connection with
CRISPR’s internal research supporting the conclusion [***]. Following Vertex’s
receipt of such data, Vertex may elect to [***], as applicable. If any such
[***] (other than [***]) is [***], (a) Vertex will [***] and (b) the
Collaboration Program Working Group will prepare a Research Plan for [***] and
submit such plan to the JRC for its approval as provided in Section 2.3.3.

2.4.
Research Term. The term for the conduct of the Collaboration Programs (the
“Research Term”) will begin on the Effective Date and will end on the earlier of
(a) the date on which [***] and [***] with respect to six Collaboration Targets
and (b) the [***] of the Effective Date; provided, however, that if any Research
activities under a Research Plan (including any Continuation Research) are
incomplete on such [***] (and Vertex has not [***]), the Parties will complete
such activities in accordance with the applicable Research Plan, and the
Research Term will be extended with respect to such Research Plan(s) for up to
[***] to complete such activities or [***]; and provided further, that during
any portion of the Research Term after the [***] of the Effective Date, the
Vertex Target List will be dissolved and neither Party will have any further
obligation under this Agreement (including under Section 2.13.1) with respect to
any Vertex Target that was not selected as a Collaboration Target.

2.5.
Research Activities. Following the JRC’s approval of a Research Plan, each Party
will use Commercially Reasonable Efforts to perform activities for which such
Party is responsible under such Research Plan in accordance with the timelines
set forth therein. Vertex will be responsible for carrying out all Vertex
Activities under a Research Plan, and CRISPR will be responsible for carrying
out all CRISPR Activities under each Research Plan. Each Party will, and will
require its Affiliates and Subcontractors to, comply with all Applicable Laws in
its and their conduct of the activities under a Research Plan, including where
appropriate cGMP, GCP and GLP (or similar standards). No more than [***]
Research Plans shall be conducted at any given time during the Initial Target
Selection Period and no more than [***] Research Plans shall be conducted at any
given time during the Final Target Selection Period. CRISPR will dedicate such
number of FTEs as is reasonably required to perform the CRISPR Activities under
the Research Plans during the Target Selection Period, which CRISPR currently
anticipates will be no fewer than an average of [***] FTEs to the performance of
Research Plans during the Initial Target Selection Period and no fewer than an
average of [***] FTEs to the performance of Research Plans during the Final
Target Selection Period.

2.6.
Option Exercise Data Package. Within [***] after completion of activities under
a Research Plan, CRISPR will provide Vertex with an Option Exercise Data Package
for the relevant Collaboration Program. Following Vertex’s receipt of the Option
Exercise Data Package for a Collaboration Program, Vertex may exercise the
Option for the relevant Collaboration Target as provided in Section 4.1;
provided, that if, within [***] after receipt of the Option Exercise Data
Package, Vertex notifies the JRC [***] that [***] with respect to [***] should
be [***] of such [***] (such notice, a “[***]” and such [***]), and either
(a) the requested [***] can reasonably be [***] within [***] following the
initiation thereof through the use of [***] or (b) the requested [***] cannot
reasonably be [***] within [***] following the initiation thereof, but the
Parties mutually agree to [***], the Collaboration Program Working Group will
meet and in good faith determine such amendments to the Research Plan as are
required to define the activities to be conducted in connection with such
Continuation Research and will submit

20

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

Exhibit 10.6
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Triple asterisks denote omissions.

such amendments to the JRC for approval. Following the JRC’s approval of such
amendment, (i) the Parties will conduct the Continuation Research in accordance
with Section 2.5, subject to any limitations or conditions that may be agreed to
by the Parties in agreeing to conduct the Continuation Research under the
foregoing clause (b), (ii) Vertex will fund such activities as provided in
Section 2.10 and (iii) the Collaboration Program Working Group will monitor
performance of such Continuation Research and meet no less than [***] (or more
frequently as determined by the JRC) to discuss the status thereof. Within [***]
following the completion of the Continuation Research, CRISPR will provide
Vertex with a revised Option Exercise Data Package reflecting the results of the
Continuation Research. CRISPR will provide to Vertex any additional Know-How or
data Controlled by CRISPR relating to the applicable Collaboration Target as
Vertex may reasonably request after delivery of the Option Exercise Data
Package. For clarity, the preceding sentence shall not impose any obligation on
CRISPR to generate additional Know-How or data.
2.7.
End of Research Term. At the end of the Research Term, (a) neither CRISPR nor
Vertex will have an obligation to perform any additional activities under any
Research Plan and (b) CRISPR’s obligations and Vertex’s rights under this
Agreement with respect to any Vertex Target that has not been designated as a
Collaboration Target will terminate and the Vertex Target list will be
dissolved. For clarity, the expiration of the Research Term will not affect
Vertex’s rights or CRISPR’s obligations with respect to any Collaboration Target
for which Vertex has exercised its Option as provided in Section 4.1 or for
which the Option Deadline has not occurred.

2.8.
Briefing the JRC. At each regularly scheduled meeting of the JRC, which shall be
no less frequent than [***], each Party will provide detailed progress updates
on activities conducted under each Research Plan along with a summary of data
associated with such Research activities under such Research Plans, which
updates and summaries will be provided to JRC members at least [***] in advance
of any JRC meeting. The agenda for meetings of the JRC will be set by the JRC
representatives. Each Collaboration Program will be reviewed by the JRC at
minimum every [***].

2.9.
Subcontractors. CRISPR may engage consultants, subcontractors, or other vendors
(each, a “Subcontractor”) to perform any work under a Research Plan with
Vertex’s prior written consent; provided, that [***] or (b) identified on
Schedule E. Vertex may engage Subcontractors to perform Vertex Activities. Each
contract between a Party and a Subcontractor will be consistent with the
provisions of this Agreement (including ARTICLE 8 and ARTICLE 12). Each Party
will be responsible for the effective and timely management of and payment of
its Subcontractors. The engagement of any Subcontractor in compliance with this
Section 2.9 will not relieve the applicable Party of its obligations under this
Agreement or the Research Plan. Each Party will be solely responsible for any
taxes, including income, withholding, payroll, VAT, sales tax or the like, that
arise from the use of a Subcontractor.

2.10.
Research Costs. Vertex will reimburse CRISPR for Research Costs incurred by
CRISPR in accordance with Section 7.4. All costs incurred by Vertex in
connection with Vertex Activities will be borne solely by Vertex.

2.11.
Transfer of Materials. To facilitate the conduct of activities under each
Research Plan, each Party will provide any Materials required by the Research
Plan to be transferred to the other

21

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

Exhibit 10.6
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Triple asterisks denote omissions.

Party, and each Party may provide to the other Party certain other Materials.
All Materials (a) will remain the sole property of the supplying Party, (b) will
be used only in the fulfillment of the receiving Party’s obligations or exercise
of rights under this Agreement, (c) will remain solely under the control of the
receiving Party, (d) will not be used or delivered by the receiving Party to or
for the benefit of any Third Party (other than a permitted Subcontractor or
Sublicensee) without the prior written consent of the supplying Party, and,
(e) except with respect to any Materials provided by CRISPR to Vertex hereunder
for use in a Clinical Trial, will not be used in research or testing involving
human subjects, unless expressly agreed. Subject to Section 9.2, all Materials
supplied under this Section 2.11 are supplied “as is”, with no warranties of
fitness for a particular purpose and must be used with prudence and appropriate
caution in any experimental work, since not all of their characteristics may be
known.
2.12.
Additional Research. At any time following exercise of an Option for a
Collaboration Target, Vertex may request that CRISPR provide additional Research
services to Vertex, with respect to such Collaboration Target (“Additional
Research”). Upon such request, the Parties will meet and discuss in good faith
whether CRISPR is able to provide those services and a mutually-agreeable plan
(the “Additional Research Plan”), including a timeline, and budget, which will
be subject to the approval of the JRC (the “Additional Research Budget”)
therefor; provided that CRISPR may, in its sole discretion, refuse to perform
Additional Research. Vertex will reimburse CRISPR for Research Costs incurred in
performing activities under the Additional Research Plan as provided in
Section 7.4. CRISPR will provide Vertex with the results of any Additional
Research promptly following the completion thereof.

2.13.
Exclusivity Covenants.

2.13.1.
[***]. Subject to Section 2.13.4(a) and Section 2.13.5, during [***], each Party
agrees that, except in the performance of its obligations or exercise of its
rights under this Agreement, [***] with respect to the discovery, research,
development, manufacture or commercialization in the Field of (a) [***] or
(b) [***]. For the avoidance of doubt, each Party’s obligations under this
Section 2.13.1 will terminate (i) with respect to [***] and (ii) with respect to
[***].

2.13.2.
[***]. Subject to Section 2.13.4(a) and Section 2.13.5, during [***], each Party
agrees that, except in the performance of its obligations or exercise of its
rights under this Agreement, [***] with respect to the discovery, research,
development, manufacture or commercialization in the Field of (a) [***] or
(b) [***]. For the avoidance of doubt, each Party’s obligations under this
Section 2.13.2 will terminate with respect to a [***] upon [***].

2.13.3.
[***]. Subject to Section 2.13.4(a) and Section 2.13.5, commencing on the
Effective Date and [***] hereunder, [***] with respect to the discovery,
research, development, manufacture or commercialization in the Field of
(a) [***] or (b) [***]; provided, however, that notwithstanding the foregoing,
during such period, [***].

2.13.4.
Cystic Fibrosis.

(a)
Notwithstanding anything to the contrary contained herein, the provisions of
Sections 2.13.1, 2.13.2 and 2.13.3 will not apply with respect to the discovery,

22

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

Exhibit 10.6
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Triple asterisks denote omissions.

research, development, manufacture or commercialization of any product for the
treatment of cystic fibrosis by Vertex or its Affiliates and Vertex and its
Affiliates will not be restricted from conducting such activities.
(b)
During the Agreement Term, CRISPR agrees that neither it nor any of its
Affiliates will work independently or for the benefit of or with any Third Party
(including the grant of any license to any Third Party) with respect to the
discovery, research, development, manufacture or commercialization of any
product containing (a) [***] or (b) [***], provided that there is [***].

2.13.5.
Delivery Technology. Notwithstanding the provisions of Sections 2.13.1, 2.13.2,
2.13.3 and 2.13.4(b), either Party may, independently or for the benefit of or
with any Third Party, discover, research, develop, manufacture or commercialize
technology for use in [***].

2.13.6.
Acquisition of Distracting Product. Notwithstanding the provisions of
Sections 2.13.1, 2.13.2, 2.13.3 and 2.13.4(b), if a Party or any of its
Affiliates (such Party, the “Distracted Party”) acquires rights to research,
develop or commercialize a Distracting Product in the Field as the result of a
merger, acquisition or combination with or of a Third Party other than a Change
of Control (each, an “Acquisition Transaction”) and, on the date of the
completion of such Acquisition Transaction, such Distracting Product is being
researched, developed or commercialized and such activities would, but for the
provisions of this Section 2.13.6, constitute a breach of Section 2.13.1,
2.13.2, 2.13.3 or 2.13.4(b), as applicable, then the Distracted Party or such
Affiliate will, within [***] after the completion of such Acquisition
Transaction notify the other Party of such acquisition and either:

(a)
request that such Distracting Product be included in this Agreement on terms to
be negotiated, in which case, the Parties will discuss the matter in good faith
for a period of no less than [***] (or such longer period as may be agreed by
the Parties) and, if unable to reach agreement on the terms on which such
Distracting Product would be included hereunder within such period, the
Distracted Party will elect to take the action specified in either clause (b) or
(c) below; provided that the time periods specified in such clauses will be
tolled for so long as the Parties are engaged in discussion under this clause
(a);

(b)
notify the other Party that the Distracted Party or its Affiliate will Divest
its rights to such Distracting Product, in which case, within [***] after the
completion of the Acquisition Transaction, the Distracted Party or its Affiliate
will Divest such Distracting Product; or

(c)
notify the other Party in writing that it is ceasing all such research,
development and commercialization activities with respect to the Distracting
Product, in which case, within [***] thereafter the Distracted Party and its
Affiliates will cease all such activities.

During the discussion period under clause (a), prior to the time of Divestiture
pursuant to clause (b) or prior to the termination of activities pursuant to
clause (c), as applicable,

23

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

Exhibit 10.6
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Triple asterisks denote omissions.

the Distracted Party and its Affiliates will use Commercially Reasonable Efforts
to segregate all research, development or commercialization activities relating
to the Distracting Product from Research, Development and Commercialization with
respect to Licensed Agents or Products under this Agreement, including using
Commercially Reasonable Efforts to ensure that (i) no personnel involved in
performing the research, development or commercialization of such Distracting
Product have access to non-public plans or information relating to the Research,
Development or Commercialization of Products (provided that management personnel
may review and evaluate plans and information regarding the Research,
Development and Commercialization of Products in connection with portfolio
decision-making) and (ii) no personnel involved in performing the Development or
Commercialization of Products have access to non-public plans or information
relating to the Development or Commercialization of such Distracting Product
(provided that management personnel may review and evaluate plans and
information regarding the Development and Commercialization of such Distracting
Product in connection with portfolio decision-making).

2.13.7.
Change of Control. If there is a Change of Control involving a Party (where such
Party is the acquired entity), the obligations of Sections 2.13.1, 2.13.2,
2.13.3 and 2.13.4(b), as applicable, will not apply to any product containing a
(a) a [***] or (b) a [***], in each case, that is Controlled by the relevant
acquirer or its Affiliates that exists prior to the closing of such Change of
Control; provided that (i) the acquired Party and the acquirer and its
Affiliates existing immediately prior to the effective date of such Change of
Control establish and enforce internal processes, policies, procedures and
systems to segregate information relating to any such product from any
Confidential Information related to the Licensed Agents and Products under this
Agreement, (ii) the acquirer and its Affiliates existing immediately prior to
the effective date of such Change of Control do not use, directly or indirectly,
any Patents, Know-How or Confidential Information of the acquired Party
(including any Patents, Know-How or Confidential Information licensed or
acquired from the other Party under this Agreement) in connection with such
product, and (iii) no personnel who were employees or consultants of the
acquired Party or its Affiliates at any time prior to or after the Change of
Control will conduct any activities relating to such product.

ARTICLE 3.    
GOVERNANCE

3.1.
Joint Research Committee.

3.1.1.
Formation. Within 30 days after the Effective Date, the Parties will establish a
joint research committee (the “Joint Research Committee” or “JRC”) to oversee
and coordinate activities under this Agreement. The JRC will be comprised of
[***] representatives from each Party, with one such representative to have
[***]. The JRC will conduct its responsibilities hereunder in good faith and
with reasonable care and diligence. The JRC will meet in person at least once
each Calendar Quarter on such dates and at such times and places as agreed to by
the members of the JRC. The purpose of the JRC will be to provide the members
periodic updates regarding progress of activities

24

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

Exhibit 10.6
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Triple asterisks denote omissions.

pursuant to this Agreement and to address the matters set forth in
Section 3.1.2. Each Party will be responsible for its own expenses relating to
attendance at or participation in JRC meetings.
3.1.2.
Responsibilities. The JRC will:

(a)
review and approve any initial or amended Research Plan, including the
corresponding Research Budget, the planned content of an Option Exercise Data
Package, and, to the extent practicable, the specific criteria for acceptance of
the Option Exercise Data Package;

(b)
prioritize the performance of activities under the Research Plans (including
Continuation Research) for Collaboration Targets;

(c)
provide comments and recommendations to each Party with respect to the conduct
of activities under each Research Plan;

(d)
assist in planning and facilitating the transfer of Research responsibility and
activities from CRISPR to Vertex upon Option Exercise as needed;

(e)
provide a forum for the Parties to discuss the objectives and progress under
each Research Plan and to exchange and review scientific information and data
relating to the activities being conducted under each Research Plan;

(f)
during the [***], discuss the [***];

(g)
during the [***], discuss the [***]; and

(h)
perform such other duties as are specifically assigned to the JRC under this
Agreement.

3.1.3.
Decision-Making. The JRC members will use reasonable efforts to reach agreement
on any and all matters that the JRC has the authority to decide and endeavor to
reach consensus on all such matters, taking into consideration the views of each
Party. If the JRC is unable to reach consensus with respect to any such matter
within [***], the matter will be referred to the Executive Officers, who will
use reasonable efforts to reach agreement on such matter. If such Executive
Officers are unable to reach consensus with respect to such matter with [***]
after such matter is first referred to such Executive Officers, then [***] will
have the right to make the final decision with respect to the relevant matter;
provided that [***] (i) will take into reasonable consideration the
recommendations and concerns raised by [***], (ii) will make such decisions in
good faith using reasonable business judgment, which will not be unreasonably
delayed, and (iii) will not have the right to: (A) amend, modify or waive
compliance with any term or condition of this Agreement; (B) make any decision
that is expressly stated to require the mutual agreement of the Parties;
(C) resolve any claim or dispute regarding whether or in what amount a payment
is owed under this Agreement; (D) exercise its final decision-making authority
in a manner that would require [***] to perform any act that [***] reasonably
believes would constitute a violation of an Applicable Law; (E) make a
determination that a Party is in material breach of any obligation under this
Agreement or (F) amend or modify a Research Plan if such amendment or
modification would require [***] to expend additional resources, whether
internal or external, including capital expenditures for which [***] as provided
herein.

25

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

Exhibit 10.6
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Triple asterisks denote omissions.

3.1.4.
Discontinuation of the JRC. The JRC’s authority with respect to a given
Collaboration Program will continue to exist until the first to occur of (a) the
Parties mutually agreeing to terminate the JRC’s authority with respect to such
Collaboration Program and (b) the completion of all activities under the
Research Plan for such Collaboration Program. The JRC will disband when it
ceases to have authority over any Collaboration Program pursuant to the
preceding sentence.

3.2.
Collaboration Program Working Group. Within [***] after Vertex designates a
Vertex Target as a Collaboration Target as provided in Section 2.3.3 (or with
respect to the Initial Collaboration Targets, within [***] after the Effective
Date), the Parties will form a working group (a “Collaboration Program Working
Group”) comprised of an equal number of representatives from each Party having
relevant expertise with respect to the given Collaboration Program. The
Collaboration Program Working Group shall be chaired by a project leader from
[***], whose appointment shall be subject to the reasonable approval by [***].
The Collaboration Program Working Group will create the initial Research Plan
and Research Budget, the planned content of an Option Exercise Data Package,
and, to the extent practicable, the specific criteria for acceptance of the
Option Exercise Data Package for the applicable Collaboration Program. The
Collaboration Program Working Group will also oversee and coordinate the
performance of activities under the Research Plan for such Collaboration Program
and perform such other activities as the JRC may delegate to the Collaboration
Program Working Group from time to time. Any disputes arising out of the
Collaboration Program Working Group will be escalated to the JRC for resolution.

3.3.
Other Committees. The Parties may, by mutual agreement, form such other
committees or working groups as may be necessary or desirable to facilitate the
activities under this Agreement. Any dispute arising from such committees or
working groups will be escalated to the JRC for resolution.

3.4.
Alliance Managers.

3.4.1.
Appointment. Within [***] following the Effective Date each Party will appoint
(and notify the other Party of the identity of) a representative of such Party
to act as its alliance manager under this Agreement (each an “Alliance
Manager”). Each Party may replace its Alliance Manager at any time by written
notice to the other Party.

3.4.2.
Specific Responsibilities. The Alliance Managers may be, but will not be
required to be, members of the JRC. The Alliance Managers will serve as the
primary contact point between the Parties for the purpose of providing each
Party with information regarding the other Parties’ activities pursuant to this
Agreement and will have the following responsibilities:

(a)
schedule meetings of the JRC and circulate draft written minutes from each
meeting within [***] after each such meeting;

(b)
facilitate the flow of information and otherwise promoting communication,
coordination and collaboration between the Parties;

26

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

Exhibit 10.6
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Triple asterisks denote omissions.

(c)
coordinate the various functional representatives of each Party, as appropriate,
in developing and executing strategies and plans for Licensed Agents and
Products;

(d)
provide a single point of communication for seeking consensus both internally
within the respective Party’s organization and between the Parties regarding key
strategy and planning issues;

(e)
coordinate and facilitate budget, finance and billing activities as overseen by
the JRC; and

(f)
perform such other functions as requested by the JRC.

ARTICLE 4.    
EXCLUSIVE OPTION
4.1.
Option.

4.1.5.
Option and Option Deadline. CRISPR hereby grants to Vertex and its Affiliates an
exclusive option to obtain the Exclusive License with respect a maximum of six
Collaboration Targets (each, an “Option,” and such six Collaboration Target
maximum, the “Option Cap”). Within [***] after Vertex’s receipt of an Option
Exercise Data Package for the applicable Collaboration Program (the “Option
Deadline”), Vertex will notify CRISPR as to whether or not Vertex is exercising
the applicable Option; provided, that if, following receipt of the applicable
Option Exercise Data Package, Vertex delivers a [***] to the JRC, the Option
Deadline will be extended until the date that is [***] after Vertex’s receipt of
a revised Option Exercise Data Package reflecting the results of the
Continuation Research as provided in Section 2.6. If Vertex or its designated
Affiliate notifies CRISPR in writing that it wishes to exercise the applicable
Option, CRISPR will, and hereby does, grant to Vertex or its designated
Affiliate the Exclusive License with respect to Licensed Agents and Products
directed to such Collaboration Target and, except with respect to Collaboration
Targets that are [***] with respect to such Collaboration Target; provided,
however, if Vertex determines that an HSR Filing is required to be made under
the HSR Act to exercise an Option and notifies CRISPR of such determination
within [***] after Vertex’s receipt of the complete Option Exercise Data
Package, the Parties will promptly file an HSR Filing in accordance with
Section 4.1.2(a) and Vertex’s election to exercise the applicable Option will
not be effective (and Vertex will not be obligated to make any payment under
Section 7.3.1) until the HSR Clearance Date. If Vertex fails to timely exercise
an Option in accordance with this Section 4.1.1, the Option shall expire and be
of no further force or effect, both Party’s obligations under Section 2.13.1
shall terminate with respect to the relevant Collaboration Target, such
Collaboration Target shall no longer be a Collaboration Target nor a Vertex
Target and Vertex shall be deemed to have terminated the relevant Collaboration
Program for purposes of ARTICLE 11 of this Agreement.

4.1.6.
HSR Compliance.

(a)
HSR Filing. If Vertex notifies CRISPR pursuant to Section 4.1.1 that an HSR
Filing is required for Vertex to receive the Exclusive License with respect to a
Collaboration Target, each of Vertex and CRISPR will, within [***] after such

27

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

Exhibit 10.6
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Triple asterisks denote omissions.

notice from Vertex (or such later time as may be agreed to in writing by the
Parties), file with the United States Federal Trade Commission (“FTC”) and the
Antitrust Division of the United States Department of Justice (“DOJ”), any HSR
Filing required with respect to the transactions contemplated hereby. The
Parties will cooperate with one another to the extent necessary in the
preparation of any such HSR Filing. Each Party will be responsible for its own
costs and expenses (other than filing fees, which Vertex will pay) associated
with any HSR Filing.
(b)
HSR Clearance. In furtherance of obtaining clearance for an HSR Filing filed
pursuant to this Section 4.1.2, CRISPR and Vertex will use their respective
Commercially Reasonable Efforts to resolve as promptly as practicable any
objections that may be asserted with respect to this Agreement or the
transactions contemplated by this Agreement under any antitrust, competition or
trade regulatory law. In connection with obtaining such HSR clearance from the
FTC, the DOJ or any other governmental authority, Vertex and its Affiliates will
not be required to (i) sell, divest (including through a license or a reversion
of licensed or assigned rights), hold separate, transfer or dispose of any
assets, operations, rights, product lines, businesses or interest therein of
Vertex or any of its Affiliates (or consent to any of the foregoing actions); or
(ii) litigate or otherwise formally oppose any determination (whether judicial
or administrative in nature) by a governmental authority seeking to impose any
of the restrictions referenced in clause (i) above.

ARTICLE 5.    
LICENSE GRANTS
5.1.
Non-Exclusive Research License from CRISPR to Vertex. Subject to the terms and
conditions of this Agreement, CRISPR and, following the Subsidiary Transfer, the
CRISPR Subsidiary, hereby grants Vertex UK and its Affiliates a non-exclusive,
royalty-free, fully paid-up, worldwide license, with no right to grant
sublicenses except to permitted Subcontractors under Section 2.9, to use the
Licensed Technology solely to perform the Vertex Activities during the Research
Term.

5.2.
Non-Exclusive Research and Development License from Vertex to CRISPR. Subject to
the terms and conditions of this Agreement, Vertex hereby grants to CRISPR a
non-exclusive, royalty-free, fully paid-up, worldwide license, with no right to
grant sublicenses except to permitted Subcontractors under Section 2.9, under
the Vertex Technology solely to perform Research under the Research Plan for
each Collaboration Program during the Research Term.

5.3.
License Grants to Vertex.

5.3.1.
Development and Commercialization Licenses. Subject to the terms and conditions
of this Agreement, on a Collaboration Target-by-Collaboration Target basis,
effective upon Vertex’s exercise of the Option for a particular Collaboration
Target in accordance with this Agreement, CRISPR and, following the Subsidiary
Transfer, the CRISPR Subsidiary, grants to Vertex UK and its Affiliates an
exclusive (subject to Section 6.1.2(b)), royalty-bearing, license under CRISPR’s
and its Affiliates’ interest in the Licensed Technology

28

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

Exhibit 10.6
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Triple asterisks denote omissions.

to Research, Develop, Manufacture, have Manufactured, use, keep, sell, offer for
sale, import, export and Commercialize Licensed Agents and Products directed to
the relevant Collaboration Target in the Field in the Territory (such license,
the “Exclusive License”). Vertex may grant sublicenses through multiple tiers of
sublicense to one or more Sublicensees of any and all rights granted to Vertex
by CRISPR under the Exclusive License; provided that Vertex shall only be
permitted to grant a Sublicense to conduct any Commercialization activities with
respect to a Licensed Agent or Product [***] with CRISPR’s prior written
consent, such consent not to be unreasonably withheld, conditioned or delayed;
and provided, further, that no such consent will be needed with respect to any
Sublicense (a) granted to a Third Party to conduct Commercialization activities
with respect to a Licensed Agent or Product in [***] (and not any other [***]),
(b) any Sublicense granted to a Distributor or other Third Party conducting
activities on Vertex’s behalf or (c) any Sublicensee granted to a Third Party to
Manufacture Licensed Agent or Product on Vertex’s behalf. Each such Sublicense
will be subject and subordinate to, and consistent with, the terms and
conditions of this Agreement and will require such Sublicensee to comply with
all applicable terms of this Agreement and all Third Party Obligations. Vertex
shall promptly provide CRISPR with a copy of the fully executed Sublicense
agreement covering any sublicense granted hereunder (which copy may be redacted
to remove provisions which are not necessary to monitor compliance with this
Section 5.3.1). Notwithstanding the grant of any Sublicense, Vertex shall remain
primarily liable to CRISPR for the performance of all of Vertex’s obligations
under, and Vertex’s compliance with all provisions of, this Agreement.
5.3.2.
License Conditions; Limitations. Subject to Section 7.6, any rights and
obligation hereunder, including the rights granted pursuant to any Exclusive
License with respect to a Collaboration Target, are subject to and limited by
any applicable Third Party Obligations to the extent the provisions of such
obligations or agreements are specifically disclosed to Vertex in writing (or
via electronic data room) (a) with respect to Third Party Obligations existing
as of the Effective Date, prior to the Effective Date, (b) with respect to Third
Party Obligations arising between the Effective Date and the delivery of the
relevant Option Exercise Data Package, at the time of delivery of the Option
Exercise Data Package and (c) with respect to Third Party Obligations arising
after the date the applicable Exclusive License is granted hereunder, on or
prior to the date on which such Third Party Obligations arise. Vertex will have
the right to [***] any Third Party Patents and Know-How to which such Third
Party Obligations [***] by providing CRISPR [***] (with respect to any Third
Party Obligations existing at the time the relevant Option Exercise Data Package
is delivered) or [***], in which case, such Third Party Patents and Know-How
[***] this Agreement. If Vertex does not provide CRISPR [***] Third Party
Patents and Know-How as provided above, such Third Party Patents and Know-How
[***] under this Agreement and Vertex will be subject to the Third Party
Obligations [***].

5.4.
Licenses to Improvements.

29

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

Exhibit 10.6
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Triple asterisks denote omissions.

5.4.1.
License to CRISPR. Subject to the terms and conditions of this Agreement, Vertex
hereby grants to CRISPR a perpetual, irrevocable, non-exclusive, royalty-free,
fully paid-up, worldwide, sublicensable, license to all improvements or
modifications to the CRISPR Platform Technology Patents, CRISPR Background
Patents (to the extent existing on the Effective Date or otherwise claiming the
CRISPR Background Know-How set forth on Schedule F), [***] or CRISPR Background
Know-How set forth on Schedule F (as may be supplemented by mutual written
agreement of the Parties from time to time), whether or not patentable, that
arise in the course of performing activities under a Research Plan or in the
course of Developing and Commercializing a Licensed Agent or Product and are
Controlled by Vertex or its Affiliates to make, have made, use, sell, keep,
offer for sale and import products other than Licensed Agents and Products.

5.4.2.
License to Vertex. Subject to the terms and conditions of this Agreement,
CRISPR, and, following the Subsidiary Transfer, to the extent necessary, the
CRISPR Subsidiary, hereby grants to Vertex a perpetual, irrevocable,
non-exclusive, royalty-free, fully paid-up, worldwide, sublicensable, license to
all improvements or modifications to the Vertex Background Know-How or Vertex
Background Patents, whether or not patentable, that arise in the course of
performing activities under a Research Plan and are Controlled by CRISPR or its
Affiliates to make, have made, use, sell, keep, offer for sale and import
products other than Licensed Agents and Products.

5.5.
Technology Transfer after Option Exercise.

5.5.1.
Transition Agreement. Upon each exercise by Vertex of an Option, the Parties
will negotiate and execute an agreement setting forth the Parties’ respective
obligations with respect to the transfer of data and Materials relating to the
relevant Collaboration Target from CRISPR to Vertex, all in accordance with this
Section 5.5.

5.5.2.
Licensed Know-How. On a Collaboration Target-by-Collaboration Target basis,
CRISPR will promptly, but no later than [***] after Vertex exercises its Option
for such Collaboration Target hereunder, make available and, at Vertex’s
request, deliver to Vertex or one or more designated Affiliates all documented
Licensed Know-How in CRISPR’s possession that has not previously been provided
hereunder, for use in accordance with the exercise of the applicable Exclusive
License. To assist with the transfer of such Licensed Know-How, CRISPR will make
its personnel reasonably available to Vertex during normal business hours to
transfer such Licensed Know-How under this Section 5.5.2 and Vertex will
reimburse CRISPR for the reasonable costs of such assistance at the FTE Rate
within 30 days after its receipt of an invoice therefor.

5.5.3.
Transfer of Manufacturing Know-How and Materials. Without limiting CRISPR’s
obligations under Section 5.5.2, within [***] following the exercise of an
Option, and thereafter, promptly following Vertex’s request, CRISPR will, or
will cause the applicable Third Party (including any contract manufacturing
organization engaged by CRISPR to Manufacture any Licensed Agent or

30

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

Exhibit 10.6
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Triple asterisks denote omissions.

Product) to, transfer to Vertex (a) all Licensed Know-How that is necessary or
useful to enable the Manufacture of each Licensed Agent or Product for the
applicable Collaboration Target, and not previously transferred to Vertex under
this Agreement, by providing copies or samples of relevant documentation,
materials and other embodiments of such Licensed Know-How, and by making
available its, or the applicable Third Party’s, qualified technical personnel on
a reasonable basis to consult with Vertex with respect to such Licensed Know-How
and (b) at Vertex’s request, any Materials used by CRISPR or its Affiliates or
Subcontractors in the Manufacture of such Licensed Agent or Product.
5.5.4.
Transfer of Regulatory Filings and Data. On a Collaboration
Target-by-Collaboration Target basis and effective as of the date on which
Vertex is granted the Exclusive License for a Collaboration Target, CRISPR will,
and hereby does, assign to Vertex any and all Regulatory Filings or any other
rights or permissions granted by any Regulatory Authority to Vertex related to
any Licensed Agent or Product directed to such Collaboration Target, together
with all Research, Development and Manufacturing data relating to such
Collaboration Target, in each case, not previously assigned by CRISPR to Vertex.
Further, CRISPR will take all actions and provide all assistance reasonably
requested by Vertex to effect the assignments in this Section 5.5.4.

5.5.5.
Right of Reference. Vertex hereby grants to CRISPR the right to rely upon and a
right to copy, access, and otherwise use, all Adverse Event information
pertaining to each Product as reasonably required in connection with the
Development and Commercialization (subject to Section 2.13) of products, and
Vertex shall, if requested by CRISPR, provide a signed statement that CRISPR may
rely on, and the Regulatory Authority may access, in support of CRISPR’s
application for Regulatory Approval of such products.

5.6.
No Implied Licenses. All rights in and to Licensed Technology not expressly
licensed or assigned to Vertex under this Agreement are hereby retained by
CRISPR or its Affiliates. All rights in and to any Vertex Technology not
expressly licensed to CRISPR under this Agreement, are hereby retained by Vertex
or its Affiliates. Except as expressly provided in this Agreement, no Party will
be deemed by estoppel or implication to have granted the other Party any
licenses or other right with respect to any intellectual property.

ARTICLE 6.    
PROFIT/LOSS SHARING, DEVELOPMENT, MANUFACTURING AND COMMERCIALIZATION
6.1.
CRISPR Profit/Loss Sharing.

6.1.3.
Profit/Loss Sharing. CRISPR will jointly (with Vertex or Affiliate(s) designated
by Vertex) Research, Develop and Commercialize Products containing (a) any
Licensed Agent directed to a Collaboration Target that is a Hemoglobinopathy
Target or (b) [***] and, in each case, for which Vertex has obtained the
Exclusive License, as provided herein, unless, in each case, CRISPR exercises an
Opt-Out in accordance with Schedule G.

31

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

Exhibit 10.6
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Triple asterisks denote omissions.

6.1.4.
Effects of Co-Commercialization. For each Collaboration Target set forth in
clauses (a) or (b) of Section 6.1.1:

(c)
each Product for the relevant Collaboration Target will be deemed a “Shared
Product”;

(d)
the Exclusive License with respect to the relevant Collaboration Target will
become co-exclusive (with CRISPR);

(e)
within [***] after Vertex has exercised the Option to obtain the Exclusive
License for such Collaboration Target, CRISPR and Vertex (or any Affiliates
designated by Vertex) will enter into an agreement (the “Joint Development &
Commercialization Agreement”), which the Parties will negotiate in good faith
and which will include appropriate plans and budgets, for the joint Development
and Commercialization of Shared Products (or provisions for establishing such
plans) and will include (i) terms and conditions that are substantially the same
as those set forth in Schedule G and (ii) other reasonable and customary
provisions for transactions of this type as the Parties may agree. If the terms
of this Agreement conflict with the terms of the Joint Development &
Commercialization Agreement, the terms of the Joint Development &
Commercialization Agreement will control with respect to the Collaboration
Program that is the subject thereof and the terms of this Agreement will control
with respect to all other matters; and

(f)
[***].

6.2.
Responsibility. Following an Option Exercise, Vertex will be solely responsible
for all Research, Development, Manufacturing and Commercialization of Licensed
Agents and Products for the relevant Collaboration Target that are performed
after the date on which the Option was exercised and for all costs and expenses
associated therewith, except (a) as may be otherwise provided in a Joint
Development & Commercialization Agreement, (b) with respect to any incomplete
activities under the relevant Research Plan or any agreed-upon Additional
Research and (c) for the transfer of activities to Vertex as contemplated by
Section 5.5.

6.3.
Vertex Diligence.

6.3.3.
Development Diligence. Except with respect to Shared Products, following
Vertex’s exercise of the Option for a Collaboration Target, Vertex (acting
directly or through one or more Affiliates or Sublicensees) will use
Commercially Reasonable Efforts to Develop, obtain Marketing Approvals for [***]
in [***].

6.3.4.
Commercial Diligence. Except with respect to Shared Products, Vertex (acting
directly or through one or more Affiliates or Sublicensees) will use
Commercially Reasonable Efforts to Commercialize, including seeking Price
Approval on appropriate terms, [***] in [***].

6.4.
Product Development & Commercialization Plan. On a Collaboration
Program-by-Collaboration Program basis, Vertex will prepare a Development and
Commercialization plan setting forth in reasonable detail (which detail shall be
at least sufficient for CRISPR to evaluate

32

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

Exhibit 10.6
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Triple asterisks denote omissions.

Vertex’s compliance with its obligations under this Agreement) Vertex’s plans
for (a) the Development of each Product for the relevant Collaboration Target
through Clinical Trials designed to show Establishment of POC, (b) starting
after Establishment of POC, the Development of each Product through Marketing
Approval and (c) starting upon Marketing Approval for a Product and continuing
thereafter until the expiration of the applicable Royalty Term,
Commercialization for the Product, as appropriate for the stage of the Product,
including a launch plan for each Major Market Country (each, an “Product
Development & Commercialization Plan”). If Vertex is Developing or
Commercializing more than one Product directed to a Collaboration Target, the
Product Development & Commercialization Plan will include the foregoing
information for each such Product. Vertex will prepare the initial Product
Development & Commercialization Plan for a Collaboration Program no later than
[***] after Option Exercise by performing the activities set forth in each
Research Plan for the relevant Collaboration Target. Once Vertex has prepared
such Product Development & Commercialization Plan, Vertex will update such plan
no less than [***] so that such Product Development & Commercialization Plan is
an accurate reflection of Vertex’s then-current plans with respect to the
Development and Commercialization of the relevant Product and Vertex will
provide such updates to CRISPR for its review. All Product Development &
Commercialization Plans are provided solely for informational purposes, and
Vertex’s failure to follow a Product Development & Commercialization Plan will
not constitute a breach of this Agreement. Notwithstanding the foregoing, Vertex
will have no obligation under this Section 6.4 with respect to any Shared
Product.
6.5.
Applicable Laws. Each Party will, and will require its Affiliates, Sublicensees
and Subcontractors to, comply with all Applicable Law in its and their Research,
Development, Manufacture and Commercialization of Products, including where
appropriate cGMP, GCP and GLP (or similar standards).

6.6.
Regulatory Matters; Safety Data Exchange Agreement.

6.6.1.
Responsibilities. Vertex or its designated Affiliates and Sublicensees will have
the sole authority to prepare and file Regulatory Filings, each in its own name,
and applications for Regulatory Approval and Price Approval for any and all
Licensed Agents and Products directed to each Collaboration Target, and will
have the sole responsibility for communicating with any Regulatory Authority
both prior to and following Regulatory Approval and Price Approval, including
all communications and decisions with respect to (a) pricing of Products and
(b) the negotiation of Product pricing with Regulatory Authorities and other
Third Parties.

6.6.2.
Ownership. Ownership of all right, title and interest in and to any and all
Regulatory Filings, Regulatory Approvals and Price Approvals directed to any
Licensed Agent or any Product directed to each Collaboration Target in each
country of the Territory will be held in the name of Vertex, its Affiliate,
designee or Sublicensee.

6.6.3.
Pharmacovigilance. Upon Vertex’s request, the Parties will negotiate and enter
into a separate safety data exchange agreement (a “Safety Data Exchange
Agreement”). The Safety Data Exchange Agreement will set forth guidelines and
procedures for the receipt, investigation, recording, review, communication,

33

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

Exhibit 10.6
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Triple asterisks denote omissions.

reporting and exchange between the Parties of adverse event reports (which, for
purposes of information exchange between the Parties, will include adverse
events and serious adverse events, and any other information concerning the
safety of any Product or Licensed Agent and, with respect to information
provided by CRISPR, concerning the safety of products containing a [***] or
[***]). Without limiting the foregoing, the Parties will meet to establish a
safety oversight working group comprised of members of both Parties, which,
except as otherwise provided in the Safety Data Exchange Agreement, will discuss
processes and procedures for sharing information needed to support each Party’s
regulatory responsibilities and to comply with applicable regulatory
pharmacovigilance requirements. Any such procedures will not be construed to
restrict either Party’s ability to take any action that it deems to be
appropriate or required of it under the applicable regulatory requirements, if
permitted by Applicable Laws. Vertex (a) will maintain a unified worldwide
adverse event database for Products, and be responsible for reporting adverse
events and serious adverse events to the applicable Regulatory Authorities and
(b) will be responsible for all signal detection and risk management activities
and will develop and approve the contents of all safety communications to
Regulatory Authorities, including but not limited to expedited non-clinical and
clinical safety reports and aggregate reports to health authorities,
institutional review boards and ethics committees.
6.7.
Commercialization.

6.7.1.
General. Vertex will have sole and exclusive control over all matters relating
to the Commercialization of Products, except as may be otherwise provided in a
Joint Development & Commercialization Agreement.

6.7.2.
Branding. Vertex or its designated Affiliates or Sublicensees will select and
own all trademarks used in connection with the Commercialization of any and all
Products. CRISPR will not use nor seek to register, anywhere in the world, any
trademark that is confusingly similar to any trademark used by or on behalf of
Vertex, its Affiliates or Sublicensees in connection with any Product.

6.8.
Manufacturing. Vertex will have the exclusive right to Manufacture and supply
Licensed Agents and Products itself or through one or more Affiliates or Third
Parties selected by Vertex in its sole discretion. The Parties may share
information relating to the Manufacture of Products, and other products to be
commercialized by CRISPR, to determine whether and how to leverage their
respective manufacturing efforts, but shall have no obligation hereunder to
enter into an agreement with respect thereto.

ARTICLE 7.    
FINANCIAL PROVISIONS
7.1.
Up-Front Fee to CRISPR AG (Switzerland). Within four Business Days following the
Effective Date, Vertex UK will pay CRISPR AG a one-time, non-refundable,
non-creditable, up-front fee of $75,000,000 payable by wire transfer of
immediately available funds.

34

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

Exhibit 10.6
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Triple asterisks denote omissions.

7.2.
[***]. If Vertex [***], Vertex will [***] within [***] after Vertex notifies
CRISPR that it is [***]. The [***] that are [***].

7.3.
Milestone Payments.

7.3.6.
Development Milestones. Subject to Section 7.3.4, Vertex will pay CRISPR the
milestone payments set forth in this Section 7.3.1 with respect to each
Collaboration Target [***], whether such milestone event is achieved by CRISPR,
Vertex or their respective Affiliates or any Sublicensees. Each milestone
payment set forth below, is payable only once per Collaboration Target,
regardless of the number of Products directed to such Collaboration Target that
achieve the relevant milestone event.

Milestone Number
Milestone Event
Milestone Payment
1
[***]
[***]
2
[***]
[***]
3
[***]
[***]
4
[***]
[***]
5
[***]
[***]
6
[***]
[***]
7
[***]
[***]
8
[***]
[***]
9
[***]
[***]
10
[***]
[***]
11
[***]
[***]

7.3.7.
Commercial Milestones. Subject to Section 7.3.4, Vertex will pay CRISPR the
milestone payments set forth in this Section 7.3.2 with respect to each
Collaboration Target [***], whether such milestone event is achieved by Vertex
or its Affiliates or any of their Sublicensees. Each milestone payment set forth
below, is payable only once per Collaboration Target, regardless of the number
of Products directed to such Collaboration Target that achieve the relevant
milestone event or the number of times Product(s) achieve such milestone event.

Milestone Number
Milestone Event
Milestone Payment
12
[***]
[***]
13
[***]
[***]

7.3.8.
Notice; Payment; Skipped Milestones. Vertex will provide CRISPR with written
notice upon the achievement of each of the milestone events set forth in
Section 7.3.1 or 7.3.2, such notice to be provided, (a) with respect to
milestones under Section 7.3.1, within [***] after achievement, and (b) with
respect to milestones under Section 7.3.2, [***] for the Calendar Quarter in
which such milestone is first achieved. Following receipt of such notice, CRISPR
will promptly invoice Vertex for the applicable milestone and Vertex

35

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

Exhibit 10.6
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Triple asterisks denote omissions.

will make the appropriate milestone payment within [***] after receipt of such
invoice. The milestones numbered [***] as set forth in Section 7.3.1 are
intended to be successive; if a Product for a Collaboration Target is not
required to undergo the event associated with any such milestone event, such
skipped milestone will be deemed to have been achieved upon the achievement by
such Product of the next successive milestone event. Payment for any such
skipped milestone that is owed in accordance with the provisions of the
foregoing sentence with respect to a given Product will be due concurrently with
the payment for the next successive milestone event by such Product, it being
agreed that if a Product for a Collaboration Target is not required to undergo
the milestone numbered [***], the corresponding payment will be made upon the
first to occur of the milestones numbered [***].
7.3.9.
Failure to Obtain Necessary Agreements. If, at the time any milestone event
under Section 7.3.1 or Section 7.3.2 is achieved, CRISPR has not obtained all
necessary consents and agreements and taken all actions provided for under
Section 9.3.10, [***].

7.4.
Research Costs.

7.4.1.
As soon as practicable, but in any event within [***] after the end of each
[***], CRISPR will provide Vertex with a flash report estimating reimbursable
Research Cost, if any, incurred by it and its Affiliates during the just-ended
[***].

7.4.2.
Within [***] after the end of each [***], CRISPR will submit to Vertex an
itemized report of Research Costs, if any, incurred by CRISPR and its Affiliates
during such [***] (the “Cost Report”), including reasonable supporting
documentation.

7.4.3.
Vertex will reimburse CRISPR for all Research Costs in accordance with the
applicable Research Budget or Additional Research Budget within [***] after its
receipt of the applicable Cost Report. If the Research Costs for a Research Plan
or Additional Research Plan exceed the applicable Research Budget or Additional
Research Budget, CRISPR may include such excess costs in the applicable Cost
Report, and Vertex will reimburse such excess costs, [***].

7.4.4.
Notwithstanding anything to the contrary contained herein, except as may be
otherwise provided in a Joint Development & Commercialization Agreement, Vertex
will not be obligated to reimburse CRISPR for any Research Costs incurred in
connection with the Research of a Shared Product following Option Exercise for
the relevant Collaboration Program.

7.5.
Royalties.

7.5.4.
Royalty Rates. Subject to Sections 7.5.2, 7.5.3 and 7.5.4, on a
Product-by-Product and country-by-country basis, Vertex will pay CRISPR
royalties based on the aggregate Net Sales of each Product sold by Vertex, its
Affiliates or Sublicensees in the Field in the Territory during a Calendar Year
at the rates set forth in the table below; provided, that Vertex will have no
obligation under

36

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

Exhibit 10.6
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Triple asterisks denote omissions.

this Section 7.5.1 with respect to any Shared Product. The obligation to pay
royalties will be imposed only once with respect to the same unit of a Product.
Calendar Year Net Sales (in Dollars) for such
Product in the Territory
Royalty Rates as a Percentage (%) of Net Sales
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]

7.5.5.
Royalty Term. Vertex will pay royalties to CRISPR under this Section 7.5 on a
Product-by-Product and a country-by-country basis during the Royalty Term. Upon
the expiration of the Royalty Term for a given Product in a given country, the
Exclusive License with respect to such Product will become fully-paid, perpetual
and irrevocable.

7.5.6.
[***]Generic Competition. If one or more Generic Products with respect to a
Product is marketed and sold in a given country by one or more Third Parties
during any Calendar Quarter during the Royalty Term and the [***] of such
Product sold during such Calendar Quarter have [***] relative to average
quarterly sales ([***]) of such Product in such country during the [***]
Calendar Quarters immediately prior to the Calendar Quarter during which such
Generic Product(s) was first marketed and sold in such country, then the royalty
rate for such Product in such country, on a Product-by-Product and
country-by-country basis, will thereafter be [***] of the applicable royalty
rate set forth in Section 7.5.1 for so long as such reduction in [***] persists.

7.5.7.
Third Party Licenses. Vertex may [***] from the royalties payable to CRISPR
under this Section 7.5 the following amounts: (a) [***]; (b) [***]; and (c)
[***]; provided, however, that in no event will the royalties that would
otherwise be payable to CRISPR, as reduced by Section 7.5.3 [***] under this
Section 7.5.4; and provided further, that Vertex will be entitled to [***] any
amounts with respect to which Vertex would have been [***] pursuant to this
Section 7.5.4 but [***] in this Section 7.5.4.

7.5.8.
[***]. If, at the time any royalties are payable pursuant to Section 7.5, [***].

7.5.9.
Royalty Reports. During the Agreement Term, following the first sale of a
Product (other than a Shared Product) giving rise to Net Sales, within [***]
after the end of each Calendar Quarter, Vertex will deliver a report to CRISPR
specifying on a Product-by-Product and country-by-country basis: (a) gross sales
in the relevant Calendar Quarter, (b) Net Sales in the relevant Calendar
Quarter, including an accounting of deductions applied to determine Net Sales;
(c) a summary of the then-current exchange rate methodology then in use by

37

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

Exhibit 10.6
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Triple asterisks denote omissions.

Vertex, and (d) royalties payable on such Net Sales. All royalty payments due
under Section 7.5 for each Calendar Quarter will be due and payable within [***]
after Vertex’s delivery of the applicable report under this Section 7.5.5.
7.6.
CRISPR In-License Agreements; [***].

7.6.3.
CRISPR In-License Agreements. Certain of the Licensed Technology Controlled by
CRISPR or CRISPR Affiliates as of the Effective Date was in-licensed or acquired
by CRISPR under the agreements with Third Party licensors or sellers listed on
Schedule H (such agreements, together with each consent and agreement obtained
by CRISPR pursuant to Section 9.3.10, the “CRISPR In-License Agreements”).
Subject to Section 10.1, [***].

7.6.4.
[***].

(a)
Certain Licensed Technology [***] during the Term pursuant to [***]. For any
[***] pursuant to which [***], CRISPR will use Commercially Reasonable Efforts
to ensure that [***] with the same [***] (including the right for Vertex [***]
would be [***] and [***], [***] and other potential or actual [***]. If CRISPR
is [***], (a) CRISPR will so notify Vertex, and the Parties will [***] and
(b) CRISPR will not [***].

(b)
Notwithstanding anything to the contrary contained herein, if, following
Vertex’s exercise of the Option for a particular Collaboration Target, Vertex
believes, in its reasonable judgment, that it may be necessary to obtain rights
under any Patent having claims which Cover Licensed Agents or Products that are
the subject of the Option, Vertex shall have the right to negotiate a license to
such Patent.

7.6.5.
[***]. Vertex shall [***] by Vertex, its Affiliates or Sublicensees. If the
[***] based on the [***] across such [***] by Vertex, its Affiliates or
Sublicensees. [***] with and to the extent [***].

7.6.6.
[***]. Subject to Section [***], [***] arising under any [***]. [***] shall take
into consideration the [***]. [***], the matter shall [***]. [***] if and when
such [***].

7.6.7.
[***]. If CRISPR [***] which provides [***] set forth on [***], then, [***],
[***].

7.6.8.
[***]. Notwithstanding the foregoing provisions of this Section 7.6, Vertex may
[***] with respect to one or more [***] and, thereafter, [***].

7.7.
Payment Method; Currency.

7.7.1.
All payments under this Agreement will be paid in U.S. Dollars, by wire transfer
to an account designated by CRISPR (which account CRISPR may update from time to
time in writing).

38

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

Exhibit 10.6
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Triple asterisks denote omissions.

7.7.2.
If any amounts that are relevant to the determination of amounts to be paid
under this Agreement or any calculations to be performed under this Agreement
are denoted in a currency other than U.S. Dollars, then such amounts will be
converted to their U.S. Dollar equivalent using Vertex’s then-current standard
procedures and methodology, including its then-current standard exchange rate
methodology for the translation of foreign currency expenses into U.S. Dollars
or, in the case of Sublicensees, such similar methodology, consistently applied.

7.8.
Withholding Tax. Where any sum due to be paid to CRISPR hereunder is subject to
any withholding or similar tax, Vertex will pay such withholding or similar tax
to the appropriate Government Authority and deduct the amount paid from the
amount then due CRISPR, in a timely manner and promptly transmit to CRISPR an
official tax certificate or other evidence of such withholding sufficient to
enable CRISPR to claim such payment of taxes. The Parties agree to cooperate
with one another and use reasonable efforts to reduce or eliminate tax
withholding or similar obligations in respect of royalties, milestone payments,
and other payments made by Vertex to CRISPR under this Agreement. CRISPR will
provide Vertex any tax forms that may be reasonably necessary in order for
Vertex not to withhold tax or to withhold tax at a reduced rate under an
applicable bilateral income tax treaty. Each Party will provide the other with
reasonable assistance to enable the recovery, as permitted by Applicable Laws,
of withholding taxes, value added taxes, or similar obligations resulting from
payments made under this Agreement, such recovery to be for the benefit of the
Party bearing such withholding tax or value added tax.

7.9.
Records. During the Agreement Term, Vertex will keep and maintain accurate and
complete records regarding Net Sales during the [***] preceding Calendar Years
and CRISPR will keep and maintain accurate and complete records regarding the
Research Cost covering the [***] preceding Calendar Years. Upon [***] prior
written notice from the other Party (the “Auditing Party”), the Party required
to maintain such records (as applicable, the “Audited Party”) will permit an
independent certified public accounting firm of internationally recognized
standing, selected by the Auditing Party and reasonably acceptable to the
Audited Party, to examine the relevant books and records of the Audited Party
and its Affiliates, as may be reasonably necessary to verify the royalty reports
submitted by Vertex in accordance with Section 7.5.5, or Research Cost reported
by CRISPR in accordance with Section 7.4, as applicable. An examination by the
Auditing Party under this Section 7.9 will occur not more than [***] in any
Calendar Year and will be limited to the pertinent books and records for any
Calendar Year ending not more than [***] before the date of the request. The
accounting firm will be provided access to such books and records at the Audited
Party’s facility or facilities where such books and records are normally kept
and such examination will be conducted during the Audited Party’s normal
business hours. The Audited Party may require the accounting firm to sign a
customary non-disclosure agreement before providing the accounting firm access
to its facilities or records. Upon completion of the audit, the accounting firm
will provide both the Auditing Party and the Audited Party a written report
disclosing whether the reports submitted by Vertex, or the Research Cost
reported by CRISPR, as applicable, are correct or incorrect and the specific
details concerning any discrepancies. No other information will be provided to
the Auditing Party. If the report or information submitted by the Audited Party
results in an underpayment or overpayment, the Party owing underpaid or overpaid
amount will promptly pay such amount to the other Party, and, if, as a result of
such inaccurate report or information, such amount is more than [***] of the
amount that was owed the Audited Party

39

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

Exhibit 10.6
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Triple asterisks denote omissions.

will reimburse the Auditing Party for the reasonable expense incurred by the
Auditing Party in connection with the audit.
7.10.
Late Payment. Any payments or portions thereof due hereunder that are not paid
when due will accrue interest from the date due until paid at an annual rate
equal to [***] (or the maximum allowed by Applicable Law, if less).

INTELLECTUAL PROPERTY

7.11.
Ownership; Assignment. For the avoidance of doubt, the rights and obligations of
the Parties under this ARTICLE 8 are subject to and limited by any applicable
Third Party Obligations to the extent the provisions of such obligations or
agreements are specifically disclosed to Vertex in writing (or via electronic
data room) (a) with respect to Third Party Obligations existing as of the
Effective Date, prior to the Effective Date, (b) with respect to Third Party
Obligations arising between the Effective Date and the delivery of the relevant
Option Exercise Data Package, at the time of delivery of the Option Exercise
Data Package and (c) with respect to Third Party Obligations arising after the
date the applicable Exclusive License is granted hereunder, on or prior to the
date on which such Third Party Obligations arise.

7.11.1.
CRISPR Technology and Vertex Technology. As between the Parties, CRISPR will own
and retain all of its rights, title and interest in and to the CRISPR Background
Know-How, CRISPR Background Patents and CRISPR Platform Technology Patents and
Vertex will own and retain all of its rights, title and interest in and to any
Vertex Background Know-How and Vertex Background Patents, subject to any
assignments, rights or licenses expressly granted by one Party to the other
Party under this Agreement.

7.11.2.
Agreement Technology.

(a)
As between the Parties, CRISPR will be the sole owner of any Know-How
discovered, developed, invented or created solely by CRISPR or its Affiliates or
Third Parties acting on their behalf in connection with activities under this
Agreement (“CRISPR Program Know-How”) and any Patents that cover or claim such
Know-How (“CRISPR Program Patents” and together with the CRISPR Program
Know-How, the “CRISPR Program Technology”), and will retain all of its rights,
title and interest thereto, subject to any assignment, rights or licenses
expressly granted by CRISPR to Vertex under this Agreement.

(b)
As between the Parties, Vertex will be the sole owner of any Know-How
discovered, developed, invented or created solely by Vertex or its Affiliates or
Third Parties acting on their behalf in connection with activities under this
Agreement (“Vertex Program Know-How”) and any Patents that cover or claim Vertex
Program Know-How (“Vertex Program Patents” and together with the Vertex Program
Know-How, the “Vertex Program Technology”), and will retain all of its rights,
title and interest thereto, subject to any rights or licenses expressly granted
by Vertex to CRISPR under this Agreement.

(c)
(i) [***]: Any Know-How discovered, developed, invented or created jointly under
this Agreement by both (a) Vertex, its Affiliates or Third Parties acting on
Vertex’s behalf and (b) CRISPR, its Affiliates or Third Parties acting on

40

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

Exhibit 10.6
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Triple asterisks denote omissions.

CRISPR’s behalf, while conducting activities under this Agreement, to the extent
[***] (“[***] Joint Program Know-How”), and any Patents that [***] (“[***] Joint
Program Patents,” and together with the [***] Joint Program Know-How, the “[***]
Joint Program Technology”), will be owned [***], including all rights, title and
interest thereto, subject to any assignment, rights or licenses expressly
granted by one Party to the other Party under this Agreement. Except as
expressly provided in this Agreement, [***] with respect to, or to [***] Joint
Program [***], and each Party hereby [***].
 

(ii) [***]: All [***] Joint Program Know-How, [***] Joint Program Patents, and
[***] Joint Program Technology, in each case to the extent pertaining to [***],
will be [***]. Within [***], [***] will, and hereby [***], [***] or [***]
designated Affiliates, [***] Joint Program Patents. [***] will take all actions
and provide [***] with all [***] and will [***].
 

(d)
Any Know-How discovered, developed, invented or created jointly under this
Agreement by both (a) Vertex, its Affiliates or Third Parties acting on Vertex’s
behalf and (b) CRISPR, its Affiliates or Third Parties acting on CRISPR’s
behalf, while conducting activities under this Agreement, to the extent
pertaining to [***] but not exclusively pertaining to [***] (“[***] Joint
Program Know-How”), and any Patents that claim or cover such [***] Joint Program
Know-How (“[***] Joint Program Patents,” and together with the [***] Joint
Program Know-How, the “[***] Joint Program Technology”), will be [***]. [***]
will, and hereby does, assign to [***] or one or more of its designated
Affiliates, [***] ownership interest in all [***] Joint Program Patents. Within
[***], [***]will take all actions and provide [***] with all reasonably
requested assistance to effect such assignment and will execute any and all
documents necessary to perfect such assignment. Any Patents [***] under this
Section [***]. In addition, [***].

(e)
Any Know-How discovered, developed, invented or created jointly under this
Agreement by both (a) Vertex, its Affiliates or Third Parties acting on Vertex’s
behalf and (b) CRISPR, its Affiliates or Third Parties acting on CRISPR’s
behalf, while conducting activities under this Agreement, that is not [***]
Joint Program Know-How or [***] Joint Program Know-How (the “Other Joint Program
Know-How”), and any Patents that solely claim or cover such Other Joint Program
Know-How (the “Other Joint Program Patents,” and together with the Other Joint
Program Know-How, the “Other Joint Program Technology”), will be [***],
including all rights, title and interest thereto, subject to any assignment,
rights or licenses expressly granted by one Party to the other Party under this
Agreement. Except as expressly provided in this Agreement, neither Party will
have any obligation [***] with respect to, or to [***], Other Joint Program
Technology by reason of [***] thereof, and each Party [***] the laws of any
jurisdiction [***]. If such [***], each Party [***] to the [***] without [***]
other Party. Notwithstanding the foregoing, if either Party [***] such Other
Joint Program Technology, it shall [***] of the other Party, such [***].

41

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

Exhibit 10.6
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Triple asterisks denote omissions.

(f)
CRISPR will promptly disclose to Vertex in writing, and will cause its
Affiliates to so disclose, the discovery, development, invention or creation of
any CRISPR Program Technology under this Agreement. In addition, each Party will
promptly disclose to the other Party in writing, and will cause its Affiliates
to so disclose, the discovery, development, invention or creation of any Joint
Program Technology under this Agreement.

7.11.3.
[***] CRISPR Product-Specific Patents to [***].

(d)
Within [***] following the exercise of an Option by Vertex, if not previously
completed by [***], CRISPR will [***], including without limitation a [***] as
defined below, or as a new case to be determined by [***], consisting of [***]
for the [***] that are [***] (each such [***]). Upon Vertex’s exercise of an
Option, all [***] will no longer be [***] and will thereafter be [***].

(e)
Effective upon and following Vertex’s exercise of the Option for a particular
Collaboration Target, CRISPR will, and hereby does, [***] related to [***] that
are [***] (whether [***]), and thereafter [***] will have [***]. CRISPR will
take all actions and provide Vertex with [***] and will [***]. Any [***] under
this Section 8.1.3(b) will be excluded [***] but will be included in the [***]
for purposes of determining the [***].

7.11.4.
[***] CRISPR. Effective upon [***] pursuant to Section 8.1.3, Vertex will,
[***], [***] any such [***] to (a) conduct activities [***], (b) conduct [***]
and (c) [***].

7.12.
Prosecution and Maintenance of Patents. The Parties hereby agree as follows with
respect to the Prosecution and Maintenance of certain Patents, for the avoidance
of doubt, in each case, subject to Third Party Obligations.

7.12.1.
CRISPR Platform Technology Patents. Anything herein to the contrary
notwithstanding, and subject to Section 8.2.5, CRISPR will control and be
responsible for all aspects of the Prosecution and Maintenance of the CRISPR
Platform Technology Patents.

7.12.2.
CRISPR Patents. CRISPR will control and be responsible for all aspects of the
Prosecution and Maintenance of CRISPR Background Patents, CRISPR Program
Patents, [***] Patents and [***] Program Patents. CRISPR will use Commercially
Reasonable Efforts to Prosecute and Maintain all CRISPR Background Patents,
CRISPR Program Patents, [***] Patents, other Joint Program Patents if
applicable, and [***] Joint Program Patents, in each case to the extent Covering
Licensed Agents or Products directed to particular Collaboration Targets using
counsel reasonably acceptable to Vertex. In advance of Option Exercise for a
particular Collaboration Target (i.e., during the course of and in connection
with each Research Plan conducted by the Parties under this Agreement),
(a) CRISPR will undertake the Prosecution and Maintenance of one or more patent
applications which could claim [***] Claims to the extent permitted by
applicable law (each such Patent a “[***] Patent”) and (b) prior to the filing
of any Patent application that Covers Licensed Agents or Products, the Patent
Coordinators will meet and in good faith discuss the best

42

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

Exhibit 10.6
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Triple asterisks denote omissions.

strategy for such filing (which, for clarity may [***] Patents). The Parties
will use good faith efforts to agree on such strategy, with the goal of
maximizing the value of the Parties’ respective patent portfolios.
7.12.3.
Vertex Patents. Vertex will control and be responsible for all aspects of the
Prosecution and Maintenance of all Vertex Background Patents, Vertex Program
Patents, [***] and [***] Joint Program Patents. Vertex will use Commercially
Reasonable Efforts to Prosecute and Maintain all [***] Patents and [***] Joint
Program Patents, if applicable, using counsel reasonably acceptable to CRISPR.

7.12.4.
Other Joint Program Patents. The Parties will discuss and agree upon an
allocation of responsibility for the prosecution and maintenance of the Other
Joint Program Patents.

7.12.5.
Other Matters Pertaining to Prosecution and Maintenance of Patents.

(a)
Each Party will keep the other Party informed through their respective Patent
Coordinators as to material developments with respect to the Prosecution and
Maintenance of the CRISPR Platform Technology Patents, CRISPR Background
Patents, CRISPR Program Patents, [***] Patents and Joint Program Patents for
which such Party has responsibility for Prosecution and Maintenance pursuant to
this Section 8.2, including by providing copies of any office actions or office
action responses or other correspondence that such Party provides to or receives
from any patent office, including notice of all interferences, reissues,
re-examinations, or oppositions, and all patent-related filings, and by
providing the other Party the timely opportunity to have reasonable input into
the strategic aspects of such Prosecution and Maintenance.

(b)
If, during the Agreement Term, Vertex intends to abandon patent applications for
any Patent that Vertex is responsible for Prosecuting and Maintaining under
Section 8.2.3 (excluding Vertex Background Patents and Vertex Program Patents
that Cover technology other than Licensed Agents and Products, but including,
for the avoidance of doubt, [***] Patents) in a particular country, then Vertex
will so notify CRISPR of such intention at least [***] before such Patent will
become abandoned, and CRISPR will have the right, but not the obligation, to
assume responsibility for the Prosecution and Maintenance thereof at its own
expense with counsel of its own choice.

(c)
If, during the Agreement Term, CRISPR intends to abandon any CRISPR Background
Patent (excluding any CRISPR Platform Technology Patents), CRISPR Program
Patent, [***] Patent, [***] Joint Program Patent or Other Joint Program Patent
Covering a Licensed Agent or Product that CRISPR is responsible for Prosecuting
and Maintaining in a particular country, then, if Vertex’s right to obtain an
Exclusive License to such Patent or have such Patent assigned pursuant to
Section 8.1.3, as applicable, has not expired or terminated, CRISPR will notify
Vertex of such intention at least [***] before such Patent will become
abandoned, and Vertex will have the right, but not the obligation, to assume
responsibility for the Prosecution and Maintenance thereof at its own expense
with counsel of its own choice.

43

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

Exhibit 10.6
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Triple asterisks denote omissions.

7.13.
Patent Coordinators. Each Party will appoint a patent coordinator reasonably
acceptable to the other Party (each, a “Patent Coordinator”) to serve as such
Party's primary liaison with the other Party on matters relating to the
Prosecution and Maintenance and enforcement of Licensed Patents and Joint
Program Patents. The Patent Coordinators will meet in person or by means of
telephone or video conference at least once each Calendar Quarter during the
Agreement Term. Each Party may replace its Patent Coordinator at any time by
providing notice in writing to the other Party. The initial Patent Coordinators
will be:

For Vertex: Kerry Flynn
For CRISPR: Tyler Dylan-Hyde
7.14.
Patent Costs. Patent Costs arising after the Effective Date will be borne by the
Parties as provided in Schedule K for the relevant period (i.e., before or after
Option Exercise) except as otherwise set forth in the Joint Development &
Commercialization Agreement.

7.15.
Defense of Claims Brought by Third Parties. If a Third Party initiates a
Proceeding against either Party claiming a Patent owned by or licensed to such
Third Party is infringed by the Research, Development, Manufacture or
Commercialization of a Licensed Agent or Product, each Party that is named as a
defendant in such Proceeding will have the right to defend itself in such
Proceeding. The other Party will reasonably assist the defending Party in
defending such Proceeding and cooperate in any such litigation at the request
and expense of the defending Party. The defending Party will provide the other
Party with prompt written notice of the commencement of any such Proceeding and
will keep the other Party apprised of the progress of such Proceeding and will
promptly furnish the other Party with a copy of each communication relating to
the alleged infringement that is received by such Party. If both Parties are
named as defendants in any Proceeding, both Parties may defend such Proceeding
and the Parties will reasonably cooperate with respect to such defense.

7.16.
Enforcement of Patents Against Competitive Infringement.

7.16.1.
Duty to Notify of Competitive Infringement. If either Party learns of an
infringement, unauthorized use, misappropriation or threatened infringement by a
Third Party with respect to any Licensed Patents by reason of the making, using,
offering to sell, selling or importing of (a) a product containing [***] or
(b) the resulting [***] by such [***] (a “Competitive Infringement”) or any
other infringement, unauthorized use, misappropriation or threatened
infringement by a Third Party with respect to any CRISPR Platform Technology
Patent, such Party will promptly notify the other Party in writing and will
provide such other Party with available information regarding such Competitive
Infringement or other infringement.

7.16.2.
Prior to License Grant. For any Competitive Infringement with respect to a
Licensed Agent or Product pertaining to a Collaboration Target that is then
subject to an Option, which Competitive Infringement occurs after the Effective
Date but before the date Vertex is granted the Exclusive License with respect to
such Licensed Agent or Product, CRISPR will have the first right, but not the
obligation, to institute, prosecute, and control a Proceeding with respect
thereto, by counsel of its own choice. Vertex will have the right to engage

44

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

Exhibit 10.6
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Triple asterisks denote omissions.

counsel of its own choice in connection with such Proceeding at its own expense
but shall not be permitted to become party to such Proceeding unless required by
Applicable Law. CRISPR will provide Vertex with prompt written notice of the
commencement of any such Proceeding, and CRISPR will keep Vertex apprised of the
progress of such Proceeding. Notwithstanding anything the contrary contained
herein, CRISPR will at all times have the sole right to institute, prosecute,
and control any Proceeding under this Section 8.6.2 to the extent involving any
CRISPR Platform Technology Patents but will (a) keep Vertex reasonably apprised
of the progress of such Proceeding, (b) reasonably consider Vertex’s comments
with respect to the conduct of such Proceeding and (c) not enter a settlement,
consent judgment or other voluntary final disposition of a Proceeding that
disclaims, limits the scope of, admits the invalidity or unenforceability of, or
grants a license, covenant not to sue or similar immunity that has an adverse
effect on Vertex’s rights hereunder with respect to, a CRISPR Platform
Technology Patent without Vertex’s prior written consent, not to be unreasonably
withheld.
7.16.3.
Following License Grant. For any Competitive Infringement with respect to a
particular Licensed Agent or Product occurring after the date Vertex is granted
the Exclusive License with respect to such Licensed Agent or Product, Vertex
will have the first right, but not the obligation, to institute, prosecute, and
control a Proceeding with respect to such Competitive Infringement by counsel of
its own choice at its own expense, and CRISPR will have the right, at its own
expense, to be represented in that action by counsel of its own choice; provided
that in such Proceeding, Vertex shall reasonably consider CRISPR’s comments with
respect to which Patents to seek to enforce against such infringing party,
taking into consideration the overall value of the Patents Covering the relevant
Licensed Agent or Product to CRISPR and its licensees. If Vertex fails to
initiate a Proceeding within a period of [***] after written notice of such
Competitive Infringement is first provided by a Party under Section 8.6.1,
CRISPR will have the right to initiate and control a Proceeding with respect to
such Competitive Infringement by counsel of its own choice, and Vertex will have
the right to be represented in any such action by counsel of its own choice at
its own expense; provided, that if Vertex notifies CRISPR during such [***]
period that it is electing in good faith not to institute any Proceeding against
such Competitive Infringement for strategic reasons intended to maintain the
commercial value of the relevant Patent and any Licensed Agent or Product
Covered thereby, CRISPR will not have the right to initiate and control any
Proceeding with respect to such Competitive Infringement. Notwithstanding
anything to the contrary contained herein, CRISPR will at all times have the
sole right to institute, prosecute, and control any Proceeding under this
Section 8.6.3 to the extent involving any CRISPR Platform Technology Patents but
will (a) keep Vertex reasonably apprised of the progress of such Proceeding,
(b) reasonably consider Vertex’s comments with respect to the conduct of such
Proceeding and (c) not enter a settlement, consent judgment or other voluntary
final disposition of a Proceeding that disclaims, limits the scope of, admits
the invalidity or unenforceability of, or grants a license, covenant not to sue
or similar immunity that has an adverse effect on Vertex’s rights hereunder with
respect to, a CRISPR

45

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

Exhibit 10.6
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Triple asterisks denote omissions.

Platform Technology Patent without Vertex’s prior written consent, not to be
unreasonably withheld.
7.16.4.
Joinder.

(a)
If a Party initiates a Proceeding in accordance with this Section 8.6 or Section
8.7 the other Party agrees to be joined as a party plaintiff where necessary and
to give the first Party reasonable assistance and authority to file and
prosecute the Proceeding. Subject to Section 8.6.5, the costs and expenses of
each Party incurred pursuant to this Section 8.6.4 will be borne by the Party
initiating such Proceeding. CRISPR agrees to use Commercially Reasonable efforts
to cause Third Parties to be joined as a party plaintiff where necessary.

(b)
If one Party initiates a Proceeding in accordance with this Section 8.6, the
other Party may join such Proceeding as a party plaintiff where necessary for
such other Party to seek lost profits with respect to such infringement.

7.16.5.
Share of Recoveries. Any damages or other monetary awards recovered with respect
to a Proceeding brought pursuant to this Section 8.6 will be shared as follows:

(a)
the amount of such recovery will first [***]; then

(b)
any remaining proceeds constituting direct or actual damages for acts of
infringement occurring prior to the date Vertex is granted the Exclusive License
with respect to the relevant Licensed Agent or Product [***];

(c)
any remaining proceeds constituting direct or actual damages for acts of
infringement occurring after the date Vertex is granted the Exclusive License
with respect to the relevant Licensed Agent or Product [***]; and

(d)
any remaining proceeds constituting punitive or treble damages will be allocated
between the Parties as follows: [***].

Notwithstanding the foregoing, any Out-of Pocket Costs incurred in connection
with a Proceeding with respect to a Shared Product shall be included in the
Other-Out-of-Pocket Costs (as defined in Schedule G) and the proceeds of such
proceeding shall be deemed Net Sales for purposes of determining the Net Profit
or Net Loss (each, as defined in Schedule G).
7.16.6.
Settlement. Notwithstanding anything to the contrary under this ARTICLE 8,
neither Party may enter a settlement, consent judgment or other voluntary final
disposition of a suit under this ARTICLE 8 that disclaims, limits the scope of,
admits the invalidity or unenforceability of, or grants a license, covenant not
to sue or similar immunity under a Patent Controlled by the other Party or its
Affiliates without first obtaining the written consent of the Party that
Controls the relevant Patent; provided that the foregoing limitation shall not
apply to CRISPR’s rights with respect to the CRISPR Platform Technology Patents
(subject to the restriction set forth in Sections 8.6.2 and 8.6.3).

46

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

Exhibit 10.6
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Triple asterisks denote omissions.

7.17.
Other Infringement.

7.17.1.
Joint Program Patents. With respect to the infringement of a Joint Program
Patent that is not a Competitive Infringement, the Parties will cooperate in
good faith to bring suit together against such infringing party or the Parties
may decide to permit one Party to solely bring suit. Any damages or other
monetary awards recovered with respect to a Proceeding brought pursuant to this
Section 8.7.1 will be shared as follows: (a) the amount of such recovery [***];
then (b) any remaining proceeds will be allocated as follows: (i) [***]; and
(ii) [***].

7.17.2.
Patents Solely Owned by CRISPR. CRISPR will retain all rights to pursue an
infringement of any Patent solely owned by CRISPR that is not a Competitive
Infringement and CRISPR will retain all recoveries with respect thereto.

7.17.3.
Patents Solely Owned by Vertex. Vertex will retain all rights to pursue an
infringement of any Patent solely owned by Vertex and Vertex will retain all
recoveries with respect thereto.

7.18.
Patent Listing. Following Vertex’s exercise of the Option for a Collaboration
Target, Vertex will have the sole right, but not the obligation, to submit to
all applicable Regulatory Authorities patent information pertaining to each
applicable Product pursuant to 21 U.S.C. § 355(b)(1)(G) (or any amendment or
successor statute thereto), any similar statutory or regulatory requirement
enacted in the future regarding biologic products, or any similar statutory or
regulatory requirement in any non-U.S. country or other regulatory jurisdiction;
provided that Vertex shall not be permitted to provide any such information with
respect to CRISPR Platform Technology Patents without CRISPR’s prior written
consent.

7.19.
CREATE Act. Notwithstanding anything to the contrary in this ARTICLE 8, neither
Party will have the right to make an election under the CREATE Act when
exercising its rights under this ARTICLE 8 without the prior written consent of
the other Party, which will not be unreasonably withheld, conditioned or
delayed. With respect to any such permitted election, the Parties will use
reasonable efforts to cooperate and coordinate their activities with respect to
any submissions, filings or other activities in support thereof. The Parties
acknowledge and agree that this Agreement is a “joint research agreement” as
defined in the CREATE Act.

7.20.
Additional Right and Exceptions. Notwithstanding any provision of this ARTICLE
8, CRISPR retains the sole right to Prosecute and Maintain CRISPR Platform
Technology Patents and to control any enforcement of CRISPR Platform Technology
Patents, subject to the restrictions set forth in Sections 8.6.2 and 8.6.3.

7.21.
Patent Term Extension. The Parties will cooperate with each other in obtaining
patent term restoration in any country in the Territory under any statute or
regulation equivalent or similar to 35 U.S.C. § 156, where applicable to a
Product. After the date Vertex is granted the Exclusive License with respect to
a Product, [***] Vertex Background Patents, [***] Patents, Vertex Program
Patents, [***] Joint Program Patents, Joint Program Patents and [***] Joint
Program Patents [***]. CRISPR will abide by Vertex’s determination and
cooperate, as reasonably requested by Vertex, in connection with the foregoing
(including by providing appropriate information and executing appropriate
documents).

47

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

Exhibit 10.6
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Triple asterisks denote omissions.

7.22.
Recording. If Vertex deems it necessary or desirable to register or record this
Agreement or evidence of this Agreement with any patent office or other
appropriate Governmental Authority in one or more jurisdictions in the
Territory, CRISPR will reasonably cooperate to execute and deliver to Vertex any
documents accurately reflecting or evidencing this Agreement that are necessary
or desirable, in Vertex’s reasonable judgment, to complete such registration or
recordation. Vertex will reimburse CRISPR for all reasonable Out-of-Pocket
Costs, including attorneys’ fees, incurred by CRISPR in complying with the
provisions of this Section 8.12.

ARTICLE 8.    
REPRESENTATIONS AND WARRANTIES
8.1.
Representations and Warranties of Vertex. Vertex hereby represents and warrants
to CRISPR, as of the Effective Date, that:

8.1.5.
each of Vertex Parent and Vertex UK are duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation or
organization and has full corporate power and authority to enter into this
Agreement and to carry out the provisions hereof;

8.1.6.
each of Vertex Parent and Vertex UK (a) has the requisite power and authority
and the legal right to enter into this Agreement and to perform its obligations
hereunder and (b) has taken all requisite action on its part to authorize the
execution and delivery of this Agreement and the performance of its obligations
hereunder;

8.1.7.
each of Vertex Parent and Vertex UK has the requisite resources and expertise to
perform its obligations hereunder;

8.1.8.
this Agreement has been duly executed and delivered on behalf of each of Vertex
Parent and Vertex UK, and constitutes a legal, valid and binding obligation,
enforceable against each of Vertex Parent and Vertex UK in accordance with the
terms hereof;

8.1.9.
the execution, delivery and performance of this Agreement by each of Vertex
Parent and Vertex UK will not constitute a default under or conflict with any
agreement, instrument or understanding, oral or written, to which either entity
is a party or by which either entity is bound, or violate any law or regulation
of any court, governmental body or administrative or other agency having
jurisdiction over Vertex Parent or Vertex UK; and

8.1.10.
each of Vertex Parent and Vertex UK has obtained all necessary consents,
approvals and authorizations of all Governmental Authorities and other Persons
or entities required to be obtained by it in connection with the execution and
delivery of this Agreement.

8.2.
Representations and Warranties of CRISPR. Each of the CRISPR Entities, jointly
and severally, hereby represents and warrants to Vertex, as of the Effective
Date, that, except as otherwise set forth on Schedule L:

48

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

Exhibit 10.6
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Triple asterisks denote omissions.

8.2.10.
Each of CRISPR AG, CRISPR Inc., CRISPR UK and Tracr are duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or organization and has full corporate power and authority to
enter into this Agreement and to carry out the provisions hereof;

8.2.11.
Each of CRISPR AG, CRISPR Inc., CRISPR UK and Tracr (a) has the requisite power
and authority and the legal right to enter into this Agreement and to perform
its obligations hereunder and (b) has taken all requisite action on its part to
authorize the execution and delivery of this Agreement and the performance of
its obligations hereunder;

8.2.12.
[***], each of CRISPR AG, CRISPR Inc., CRISPR UK and Tracr has the requisite
resources and expertise to perform its obligations hereunder;

8.2.13.
this Agreement has been duly executed and delivered on behalf of CRISPR, and
constitutes a legal, valid and binding obligation, enforceable against it in
accordance with the terms hereof;

8.2.14.
the execution, delivery and performance of this Agreement by CRISPR will not
constitute a default under or conflict with any agreement, instrument or
understanding, oral or written, to which it is a party or by which it is bound,
or violate any law or regulation of any court, governmental body or
administrative or other agency having jurisdiction over it;

8.2.15.
CRISPR has obtained all necessary consents, approvals and authorizations of all
Governmental Authorities and other Persons or entities required to be obtained
by CRISPR in connection with the execution and delivery of this Agreement;

8.2.16.
the Licensed Technology constitutes all of the Patents and Know-How Controlled
by CRISPR that are necessary to Research, Develop, Manufacture or Commercialize
Licensed Agents and Products contemplated under the Collaboration Programs in
the Field;

8.2.17.
CRISPR is the sole and exclusive owner or exclusive licensee of the [***], all
of which are free and clear of any liens, charges and encumbrances, and, as of
the Effective Date, neither any license granted by CRISPR to any Third Party,
nor any license granted by any Third Party to CRISPR conflicts with the license
grants to Vertex hereunder (or the Exclusive License to be granted to Vertex
upon Option Exercise) and CRISPR is entitled to grant all rights and licenses
(or sublicenses, as the case may be) under such Patents it purports to grant to
Vertex under this Agreement and the Exclusive Licenses to be granted to Vertex
upon Option Exercise;

8.2.18.
Schedule L sets forth a true, correct and complete list of all CRISPR Platform
Technology Patents and CRISPR Background Patents as of the Effective Date and
indicates (a) whether each such Patent is a [***] or a [***] and (b) whether
such Patent is owned by CRISPR or licensed by CRISPR from a Third Party and if
so, identifies the licensor or sublicensor from which the Patent is licensed;

49

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

Exhibit 10.6
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Triple asterisks denote omissions.

8.2.19.
CRISPR has independently developed all Licensed Technology or otherwise has a
valid right to use, and to permit Vertex, Vertex’s Affiliates and Vertex’s
Sublicensees to use, the Licensed Technology for all permitted purposes under
this Agreement;

8.2.20.
the CRISPR Background Know-How is free and clear of liens, charges or
encumbrances other than licenses granted to Third Parties that are not
inconsistent with the rights and licenses granted to Vertex hereunder;

8.2.21.
the CRISPR Platform Technology Patents and CRISPR Background Patents, are, or,
upon issuance, will be, valid and enforceable patents and no Third Party [***],
(a)  is infringing any such Patents or (b) has challenged the extent, validity
or enforceability of such Patents (including by way of example through the
institution or written threat of institution of interference, nullity or similar
invalidity proceedings before the United States Patent and Trademark Office or
any analogous foreign Governmental Authority);

8.2.22.
it has complied with all Applicable Laws, including any disclosure requirements
of the United States Patent and Trademark Office or any analogous foreign
Governmental Authority, in connection with the Prosecution and Maintenance of
the CRISPR Platform Technology Patents and CRISPR Background Patents and has
timely paid all filing and renewal fees payable with respect to any such Patents
for which it controls Prosecution and Maintenance;

8.2.23.
it has obtained assignments from the inventors of all inventorship rights
relating to the [***] and [***] that it owns, and all such assignments of
inventorship rights relating to such Patents are valid and enforceable;

8.2.24.
except for the CRISPR In-License Agreements, there is no agreement between
CRISPR (or any of its Affiliates) and any Third Party pursuant to which CRISPR
has acquired Control of any of the Licensed Technology, and no Third Party has
any right, title or interest in or to, or any license under, any of the Licensed
Technology. All CRISPR In-License Agreements are in full force and effect and
have not been modified or amended (except for amendments provided to Vertex
prior to the Effective Date). Neither CRISPR nor, [***], the Third Party
licensor in a CRISPR In-License Agreement is in default with respect to a
material obligation under such CRISPR In-License Agreement, and neither such
party has claimed or has grounds upon which to claim that the other party is in
default with respect to a material obligation under, any CRISPR In-License
Agreement;

8.2.25.
CRISPR and its Affiliates have taken commercially reasonable measures consistent
with industry practices to protect the secrecy, confidentiality and value of all
CRISPR Background Know-How that constitutes trade secrets under Applicable Law
(including requiring all employees, consultants and independent contractors to
execute binding and enforceable agreements requiring all such employees,
consultants and independent contractors to maintain the confidentiality of such
CRISPR Background Know-How) and, [***], such CRISPR Background Know-How has not
been used, disclosed to or discovered by any Third Party except pursuant to such
confidentiality

50

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

Exhibit 10.6
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Triple asterisks denote omissions.

agreements and there has not been a breach by any party to such confidentiality
agreements;
8.2.26.
no Licensed Technology is subject to any funding agreement with any government
or governmental agency;

8.2.27.
[***], the Research, Development, Manufacture, use, sale, offer for sale, supply
or importation by CRISPR or Vertex (or their respective Affiliates or
Sublicensees) of a Licensed Agent or Product does not and will not infringe any
issued patent of any Third Party or, if and when issued, any claim within any
patent application of any Third Party;

8.2.28.
there are no judgments or settlements against or owed by CRISPR [***], [***],
pending or threatened claims or litigation, in either case relating to the
Licensed Technology;

8.2.29.
there is no action, claim, demand, suit, proceeding, arbitration, grievance,
citation, summons, subpoena, inquiry or investigation of any nature, civil,
criminal, regulatory or otherwise, in law or in equity, pending [***], [***],
threatened against CRISPR, any of its Affiliates or any Third Party, in each
case in connection with the Licensed Technology or relating to the transactions
contemplated by this Agreement; and

8.2.30.
CRISPR has not employed (and, [***], has not used a contractor or consultant
that has employed) any Person debarred by the FDA (or subject to a similar
sanction of EMA or foreign equivalent), or any Person that is the subject of an
FDA debarment investigation or proceeding (or similar proceeding of EMA or
foreign equivalent), in any capacity in connection with this Agreement.

8.3.
CRISPR Covenants. Each of the CRISPR Entities, jointly and severally, hereby
covenants to Vertex that, except as expressly permitted under this Agreement:

8.3.5.
CRISPR will maintain and not breach any CRISPR In-License Agreements [***] that
provide a grant of rights from such Third Party to CRISPR that are Controlled by
CRISPR and are licensed or may become subject to a license from CRISPR to Vertex
for a Licensed Agent or Product under this Agreement;

8.3.6.
CRISPR will promptly notify Vertex of any material breach by one or more CRISPR
Entities or a Third Party of any CRISPR In-License Agreements or [***] that
provides a grant of rights from such Third Party to one or more CRISPR Entities
and are licensed or may become subject to a license from CRISPR to Vertex to
conduct Vertex Activities or for a Licensed Agent or Product under this
Agreement, and in the event of a breach by [***], will [***]. CRISPR will [***]
as soon as possible, but in no event later than the date on which [***];

8.3.7.
it will not amend, modify or terminate any CRISPR In-License Agreement or [***]
in a manner that would have an adverse effect on Vertex’s rights hereunder
without first obtaining Vertex’s written consent, which consent may be withheld
in Vertex’s sole discretion;

51

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

Exhibit 10.6
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Triple asterisks denote omissions.

8.3.8.
it will not enter into any new agreement or other obligation with any Third
Party, or amend an existing agreement with a Third Party, in each case that
adversely restricts, limits or encumbers the rights granted to Vertex under this
Agreement or the additional rights or licenses Vertex would acquire upon Option
Exercise;

8.3.9.
it will not, and will cause its Affiliates not to (a) license, sell, assign or
otherwise transfer to any Person any Licensed Technology (or agree to do any of
the foregoing), except as provided in Section 8.1.3 or except as will not
adversely restrict, limit or encumber the rights granted to Vertex under this
Agreement or the additional rights or licenses Vertex would acquire upon Option
Exercise, or (b) incur or permit to exist, with respect to any Licensed
Technology, any lien, encumbrance, charge, security interest, mortgage,
liability, grant of license to Third Parties or other restriction (including in
connection with any indebtedness);

8.3.10.
it will use Commercially Reasonable Efforts to obtain and maintain the requisite
resources and expertise to perform its obligations hereunder;

8.3.11.
all employees and Subcontractors of CRISPR performing Research or Development
activities hereunder on behalf of CRISPR will be obligated to assign to CRISPR
all right, title and interest in and to any inventions developed by them,
whether or not patentable, or, solely with respect to Subcontractors, grant
exclusive license rights to CRISPR with a right to grant sublicenses through
multiple tiers;

8.3.12.
it will not engage, in any capacity in connection with this Agreement any Person
who either has been debarred by the FDA, is the subject of a conviction
described in Section 306 of the FD&C Act or is subject to any such similar
sanction;

8.3.13.
CRISPR will inform Vertex in writing promptly if it or any Person engaged by
CRISPR or any of its Affiliates who is performing services under this Agreement
or any ancillary agreements is debarred or is the subject of a conviction
described in Section 306 of the FD&C Act, or if any action, suit, claim,
investigation or legal or administrative proceeding is pending or, to CRISPR’s
Knowledge, is threatened, relating to the debarment or conviction of CRISPR, any
of its Affiliates or any such Person performing services hereunder or
thereunder;

8.3.14.
Within [***] after the Effective Date, [***] will take all actions necessary
(including, without limitation, [***] to ensure [***], effective [***], which
actions may include, without limitation, [***] and executing all documents
necessary in connection therewith.

8.3.15.
CRISPR shall use Commercially Reasonable Efforts (A) to, within [***] of the
Effective Date, [***] directly or indirectly [***] that [***], that have [***]
and that [***] and other intellectual property rights or (B) shall otherwise
work together [***]. To the extent [***] execute such documents as are necessary
to [***] and (ii) CRISPR shall [***] and the [***] shall be [***].

8.4.
Vertex Covenants. Vertex hereby covenants to CRISPR that, except as expressly
permitted under this Agreement:

52

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

Exhibit 10.6
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Triple asterisks denote omissions.

8.4.10.
it will use Commercially Reasonable Efforts to obtain and maintain the requisite
resources and expertise to perform its obligations hereunder;

8.4.11.
Vertex will not engage, in any capacity in connection with this Agreement any
Person who either has been debarred by the FDA, is the subject of a conviction
described in Section 306 of the FD&C Act or is subject to any such similar
sanction; and

8.4.12.
Vertex will inform CRISPR in writing promptly if it or any Person engaged by
Vertex or any of its Affiliates who is performing services under this Agreement
or any ancillary agreements is debarred or is the subject of a conviction
described in Section 306 of the FD&C Act, or if any action, suit, claim,
investigation or legal or administrative proceeding is pending or, [***], is
threatened, relating to the debarment or conviction of CRISPR, any of its
Affiliates or any such Person performing services hereunder or thereunder.

8.5.
Disclaimer. Except as otherwise expressly set forth in this Agreement, neither
Party nor its Affiliates makes any representation or extends any warranty of any
kind, either express or implied, including any warranty of merchantability or
fitness for a particular purpose. Vertex and CRISPR understand that each Product
is the subject of ongoing Research and Development and that neither Party can
assure the safety, usefulness or commercial or technical viability of any
Product.

ARTICLE 9.    
INDEMNIFICATION; INSURANCE
9.1.
Indemnification by Vertex. Vertex will indemnify, defend and hold harmless
CRISPR, each of its Affiliates, and each of its and its Affiliates’ employees,
officers, directors and agents (each, an “CRISPR Indemnified Party”) from and
against any and all liability, loss, damage, expense (including reasonable
attorneys’ fees and expenses) and cost (collectively, a “Liability”) that the
CRISPR Indemnified Party may be required to pay to one or more Third Parties to
the extent resulting from or arising out of:

9.1.31.
any claims of any nature arising out of the Research, Development, Manufacture,
Commercialization or use of any Licensed Agent or Product by, on behalf of, or
under the authority of, Vertex (other than by any CRISPR Indemnified Party),
other than (a)  claims by Third Parties relating to misappropriation of trade
secrets or other intellectual property rights arising out of the exercise of
rights under the Licensed Know-How, or (b) claims for which CRISPR is required
to indemnify Vertex pursuant to Section 10.2; or

9.1.32.
the material breach by Vertex of any of its representations, warranties or
covenants set forth in this Agreement, except to the extent caused by the
negligence or intentional acts of CRISPR or any CRISPR Indemnified Party.

9.2.
Indemnification by CRISPR. Each CRISPR Entity will jointly and severally
indemnify, defend and hold harmless Vertex, its Affiliates, Sublicensees,
distributors and each of its and their respective employees, officers, directors
and agents (each, a “Vertex Indemnified Party”) from and against any and all
Liabilities that the Vertex Indemnified Party may be required to pay to one or
more Third Parties to the extent resulting from or arising out of:

53

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

Exhibit 10.6
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Triple asterisks denote omissions.

9.2.16.
the material breach by CRISPR (or any CRISPR Entity(ies)) of any of its
representations, warranties or covenants set forth in this Agreement, except to
the extent caused by the negligence or intentional acts of Vertex or any Vertex
Indemnified Party; or

9.2.17.
any claims of any nature arising out of the Research activities performed by
CRISPR (or any CRISPR Entity(ies)) with respect to any Licensed Agent or Product
prior to the Effective Date or during the Research Term, other than claims for
which Vertex is required to indemnify CRISPR pursuant to Section 10.1.

9.3.
Procedure. Each Party will notify the other Party in writing if it becomes aware
of a claim for which indemnification may be sought hereunder. In case any
proceeding (including any governmental investigation) will be instituted
involving any Party in respect of which indemnity may be sought pursuant to this
ARTICLE 10, such Party (the “Indemnified Party”) will give prompt written notice
of the indemnity claim to the other Party (the “Indemnifying Party”) and provide
a copy to the Indemnifying Party of any complaint, summons or other written or
verbal notice that the Indemnified Party receives in connection with any such
claim. An Indemnified Party’s failure to deliver written notice will relieve the
Indemnifying Party of liability to the Indemnified Party under this ARTICLE 10
only to the extent such delay is prejudicial to the Indemnifying Party’s ability
to defend such claim. Provided that the Indemnifying Party is not contesting the
indemnity obligation, the Indemnified Party will permit the Indemnifying Party
to control any litigation relating to such claim and the disposition of such
claim by negotiated settlement or otherwise and any failure to contest prior to
assuming control will be deemed to be an admission of the obligation to
indemnify. The Indemnifying Party will act reasonably and in good faith with
respect to all matters relating to such claim and will not settle or otherwise
resolve such claim without the Indemnified Party’s prior written consent which
will not be withheld, delayed or conditioned unreasonably other than settlements
only involving the payment of monetary awards for which the Indemnifying Party
will be fully-responsible. The Indemnified Party will cooperate with the
Indemnifying Party in such Party’s defense of any claim for which indemnity is
sought under this Agreement, at the Indemnifying Party’s sole cost and expense.

9.4.
Insurance. Each Party will maintain, at its cost, reasonable insurance against
liability and other risks associated with its activities contemplated by this
Agreement and will furnish to the other Party evidence of such insurance upon
request. Notwithstanding the foregoing, Vertex may self-insure to the extent
that it self-insures for its other activities.

9.5.
Limitation of Consequential Damages. Except for (a) claims of a Third Party that
are subject to indemnification under this ARTICLE 10, (b) claims arising out of
a Party’s willful misconduct, or (c) a Party’s breach of Section 2.13 or ARTICLE
12, neither Party nor any of its Affiliates will be liable to the other Party or
its Affiliates for any incidental, consequential, special, punitive or other
indirect damages or lost or imputed profits or royalties, lost data or cost of
procurement of substitute goods or services, whether liability is asserted in
contract, tort (including negligence and strict product liability), indemnity or
contribution, and irrespective of whether that Party or any representative of
that Party has been advised of, or otherwise might have anticipated the
possibility of, any such loss or damage.

54

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

Exhibit 10.6
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Triple asterisks denote omissions.

ARTICLE 10.    
TERM; TERMINATION
10.1.
Agreement Term; Expiration. This Agreement is effective as of the Effective Date
and, unless earlier terminated pursuant to the other provisions of this ARTICLE
11, will continue in full force and effect until this Agreement expires as
follows:

10.1.18.
on a country-by-country and Product-by-Product basis, on the date of expiration
of all payment obligations under this Agreement with respect to such Product in
such country;

10.1.19.
in its entirety upon the expiration of all payment obligations under this
Agreement with respect to all Products in all countries pursuant to
Section 11.1.1; and

10.1.20.
in its entirety upon expiration of all Options if Vertex has not exercised any
Option as provided in Section 4.1.1.

10.2.
Termination of the Agreement.

10.2.13.
Vertex’s Termination for Convenience. Vertex will be entitled to terminate this
Agreement as a whole, or terminate this Agreement in part with respect to a
particular Collaboration Program, for convenience by providing CRISPR 90 days’
written notice of such termination; provided, however, that if any termination
under this Section 11.2.1 applies to a Product for which Vertex has received
Marketing Approval, Vertex will provide CRISPR no less than 270 days’ notice of
such termination.

10.2.14.
Termination Due to Failure to Obtain HSR Clearance. If the Parties make an HSR
Filing with respect to a Collaboration Target under Section 4.1.2 and the HSR
Clearance Date has not occurred on or prior to [***] after the effective date of
the latest HSR Filing made by the Parties with respect to a Collaboration
Target, this Agreement will terminate solely with respect to the applicable
Collaboration Program at the election of either Party immediately upon notice to
the other Party, if (a) the FTC or the DOJ has instituted (or threatened to
institute) any action, suit or proceeding including seeking, threatening to seek
or obtaining a preliminary injunction under the HSR Act against Vertex and
CRISPR to enjoin or otherwise prohibit the transactions contemplated by this
Agreement related to such proposed Collaboration Program, or (b) the Parties
have not resolved any and all objections of the FTC and DOJ as contemplated by
Section 4.1.2(b). Notwithstanding the foregoing, this Section 11.2.2 will not
apply if an HSR Filing is not required for Vertex to receive the Exclusive
License with respect to a Collaboration Target. If this Agreement is terminated
pursuant to this Section 11.2.2 with respect to a particular Collaboration
Target, such Collaboration Target will not count towards the Option Cap. If,
following termination of this Agreement with respect to a Collaboration Target
under this Section 11.2.2, CRISPR or any of its Affiliates or sublicensees
Commercializes a Product for the relevant Collaboration Target, [***] of
(i) [***] and (ii) [***].

55

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

Exhibit 10.6
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Triple asterisks denote omissions.

[***]. The terms of Sections 1.117, 7.5.2, 7.5.5, 7.7, 7.8, 7.9 and 7.10 will
apply with respect [***], mutatis mutandis.
10.2.15.
Termination for Material Breach.

(c)
Vertex’s Right to Terminate. If CRISPR (or any CRISPR Entity(ies)) is in
material breach of this Agreement, then Vertex may deliver notice of such
material breach to CRISPR. If the breach is curable, CRISPR will have [***] from
the receipt of such notice to cure such breach. If either CRISPR fails to cure
such breach within such [***] period or the breach is not subject to cure (a
“CRISPR Breach Event”), Vertex may either (i) terminate this Agreement (A) if
such breach relates solely relates to a particular Collaboration Program, with
respect to the Collaboration Program affected by such breach (a “CRISPR Program
Breach”) or (B) if such breach relates to multiple Collaboration Programs or
this Agreement as a whole (a “CRISPR Agreement Breach”), in its entirety, by
providing written notice to CRISPR or (ii) elect to exercise the alternate
remedy provisions set forth in Section 11.3 (in lieu of termination).

 
(d)
CRISPR’s Right to Terminate.

(i)
If Vertex is in material breach of this Agreement, then CRISPR may deliver
notice of such material breach to Vertex. If the breach is curable, Vertex will
have [***] following receipt of such notice to cure such breach (except to the
extent such breach involves the failure to make a payment when due, which breach
must be cured within [***] following receipt of such notice). If Vertex fails to
cure such breach within the [***] or [***] period, as applicable, or the breach
is not subject to cure, CRISPR in its sole discretion may terminate this
Agreement (i) if such breach relates solely relates to a particular
Collaboration Program, with respect to the Collaboration Program affected by
such breach or (ii) if such breach relates to multiple Collaboration Programs or
this Agreement as a whole, in its entirety, by providing written notice to
Vertex.

(ii)
If Vertex (A) commences or actively and voluntarily participates in any action
or proceeding (including any patent opposition or re-examination proceeding), or
otherwise asserts any claim, challenging or denying the validity or
enforceability of any claim of any Patent that is licensed to Vertex under this
Agreement or (B) actively and voluntarily assists any other Person in bringing
or prosecuting any action or proceeding (including any patent opposition or
re-examination proceeding) challenging or denying the validity or enforceability
of any claim of any Patent that is licensed to Vertex under this Agreement (each
of (A) and (B), a “Patent Challenge”), then, to the extent permitted by
Applicable Law, CRISPR shall have the right, in its sole discretion, to give
notice to Vertex that CRISPR may terminate the license(s) granted under such
Patent to Vertex [***] following such notice, and, unless Vertex withdraws or
causes to be withdrawn all such challenge(s) (or in the case of ex-parte
proceedings, multi-party proceedings, or other Patent Challenges that Vertex
does not have the power to unilaterally withdraw or cause to be withdrawn),
Vertex

56

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

Exhibit 10.6
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Triple asterisks denote omissions.

ceases assisting any other party to such Patent Challenge and, to the extent
Vertex is a party to such Patent Challenge, it withdraws from such Patent
Challenge within such [***] period, CRISPR shall have the right to terminate
this Agreement by providing written notice thereof to Vertex. The foregoing
right to terminate shall not apply with respect to any Patent Challenge where
the Patent Challenge is made in defense of an assertion of the relevant Patent
that is first brought by CRISPR against Vertex. For the avoidance of doubt, any
participation by Vertex or its employees in any claim, challenge or proceeding
in response to a subpoena or as required under a pre-existing agreement between
Vertex’s employee(s) or consultant(s) and their prior employer(s) shall not
constitute active and voluntary participation or assistance and shall not give
rise to CRISPR’s right to terminate any license hereunder.
10.2.16.
Disputes Regarding Material Breach. Notwithstanding the foregoing, if the
Breaching Party in Section 11.2.3 disputes in good faith the existence,
materiality, or failure to cure of any such breach that is not a payment breach,
and provides notice to the Non-Breaching Party of such dispute within the
relevant cure period, the Non-Breaching Party will not have the right to
terminate this Agreement in accordance with Section 11.2.3, or the right to
exercise the alternative remedy provisions of 11.3, as applicable, unless and
until the relevant dispute has been resolved. It is understood and acknowledged
that during the pendency of such dispute, all the terms and conditions of this
Agreement will remain in effect and the Parties will continue to perform all of
their respective obligations hereunder.

10.2.17.
Termination for Insolvency. If CRISPR (or any CRISPR Entity(ies)) makes an
assignment for the benefit of creditors, appoints or suffers appointment of a
receiver or trustee over all or substantially all of its property, files a
petition under any bankruptcy or insolvency act or has any such petition filed
against it that is not discharged within [***] of the filing thereof (each, an
“Insolvency Event”), then Vertex may terminate this Agreement in its entirety
effective immediately upon written notice to CRISPR. If Vertex terminates this
Agreement pursuant to this Section 11.2.5:

(a)
All rights and licenses now or hereafter granted by CRISPR to Vertex under or
pursuant to this Agreement, including, for the avoidance of doubt, any Exclusive
Licenses are, for all purposes of Section 365(n) of the U.S. Bankruptcy Code,
licenses of rights to “intellectual property” as defined in the U.S. Bankruptcy
Code. Upon the occurrence of any Insolvency Event with respect to CRISPR (or any
CRISPR Entity(ies)), CRISPR agrees that Vertex, as licensee of such rights under
this Agreement, will retain and may fully exercise all of its rights and
elections under the U.S. Bankruptcy Code. CRISPR will, during the term of this
Agreement, create and maintain current copies or, if not amenable to copying,
detailed descriptions or other appropriate embodiments, to the extent feasible,
of all intellectual property licensed under this Agreement. Each Party
acknowledges and agrees that “embodiments” of intellectual property within the
meaning of Section 365(n) include laboratory notebooks, cell lines, product
samples and inventory, research studies and data, all Regulatory Approvals (and

57

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

Exhibit 10.6
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Triple asterisks denote omissions.

all applications for Regulatory Approval) and rights of reference therein, the
Licensed Technology and all information related to the Licensed Technology. If
(x) a case under the U.S. Bankruptcy Code is commenced by or against CRISPR (or
any CRISPR Entity(ies)), (y) this Agreement is rejected as provided in the U.S.
Bankruptcy Code, and (z) Vertex elects to retain its rights hereunder as
provided in Section 365(n) of the U.S. Bankruptcy Code, CRISPR (in any capacity,
including debtor-in-possession) and its successors and assigns (including a
trustee) will:

(i)
provide to Vertex all such intellectual property (including all embodiments
thereof) held by CRISPR and such successors and assigns, or otherwise available
to them, immediately upon Vertex’s written request. Whenever CRISPR or any of
its successors or assigns provides to Vertex any of the intellectual property
licensed hereunder (or any embodiment thereof) pursuant to this
Section 11.2.5(a)(i), Vertex will have the right to perform CRISPR’s obligations
hereunder with respect to such intellectual property, but neither such provision
nor such performance by Vertex will release CRISPR from liability resulting from
rejection of the license or the failure to perform such obligations; and

(ii)
not interfere with Vertex’s rights under this Agreement, or any agreement
supplemental hereto, to such intellectual property (including such embodiments),
including any right to obtain such intellectual property (or such embodiments)
from another entity, to the extent provided in Section 365(n) of the U.S.
Bankruptcy Code.

(b)
All rights, powers and remedies of Vertex provided herein are in addition to and
not in substitution for any and all other rights, powers and remedies now or
hereafter existing at law or in equity (including the U.S. Bankruptcy Code) in
the event of the commencement of a case under the U.S. Bankruptcy Code with
respect to CRISPR. The Parties agree that they intend the following rights to
extend to the maximum extent permitted by Applicable Law, and to be enforceable
under U.S. Bankruptcy Code Section 365(n):

(i)
the right of access to any intellectual property rights (including all
embodiments thereof) of CRISPR, or any Third Party with whom CRISPR contracts to
perform an obligation of CRISPR under this Agreement, and, in the case of any
such Third Party, which is necessary for the Manufacture, use, sale, import or
export of Licensed Agents; and

(ii)
the right to contract directly with any Third Party to complete the contracted
work.

10.3.
Alternative Remedies to Termination.

10.3.9.
Prior to Option Exercise. If a CRISPR Breach Event occurs prior to Vertex
exercising its Option with respect to a particular Collaboration Target, Vertex
may elect the alternative remedy provisions of this Section 11.3.1 with respect
to each Collaboration Target for which it has not yet exercised the Option and

58

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

Exhibit 10.6
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Triple asterisks denote omissions.

that is subject to such CRISPR Breach Event (in the case of a CRISPR Program
Breach), or all such Collaboration Targets (in the case of a CRISPR Agreement
Breach), by providing written notice of such election to CRISPR, in which case,
this Agreement will continue in full force and effect with the following
modifications with respect to each Collaboration Target for which Vertex elects
to exercise its rights under this Section 11.3.1. If Vertex exercises its rights
under this Section 11.3.1, such exercise shall be Vertex’s sole remedy in
connection with such CRISPR Breach Event; Vertex shall have no other rights
hereunder or at law or in equity with respect to the relevant CRISPR Breach
Event; and CRISPR shall have no obligation to cure such CRISPR Breach Event.
(a)
if CRISPR has not completed the activities for which it is responsible under the
applicable Research Plan, [***], in which case, [***], If [***] for such
activities, CRISPR will [***] and Vertex will [***] as provided herein;

(b)
Vertex’s obligations under [***] will not apply with respect to the applicable
Collaboration Target;

(c)
CRISPR will provide to Vertex [***] and [***] in [***] under the relevant [***]
in an efficient and orderly manner;

(d)
in the event that Vertex subsequently elects to obtain the Exclusive License
with respect to any such Collaboration Target, such election shall be regarded
as an Option pursuant to Section 4.1.1 (subject to the Option Cap), provided
that [***].

10.3.10.
After Option Exercise. If a CRISPR Breach Event occurs after Vertex exercises
its Option with respect to a particular Collaboration Target, Vertex may elect
the alternative remedy provisions of this Section 11.3.2 with respect to any
Collaboration Target for which it has exercised the Option and that is subject
to such CRISPR Breach Event (in the case of a CRISPR Program Breach), or all
such Collaboration Targets (in the case of a CRISPR Agreement Breach), by
providing written notice of such election to CRISPR, in which case, this
Agreement will continue in full force and effect with the following
modifications with respect to each Collaboration Target for which Vertex elects
to exercise its rights under this Section 11.3.2, each at Vertex’s election. If
Vertex exercises its rights under this Section 11.3.2, such exercise shall be
Vertex’s sole remedy in connection with such CRISPR Breach Event; Vertex shall
have no other rights hereunder or at law or in equity with respect to the
relevant CRISPR Breach Event; and CRISPR shall have no obligation to cure such
CRISPR Breach Event.

(a)
CRISPR’s right to [***];

(b)
Vertex may [***] required or permitted [***] established pursuant to this
Agreement in connection with the [***]; provided, however, Vertex will not have
the right to: (i) [***] of this Agreement; (ii) [***] of the Parties,
(iii) [***] under this Agreement; (iv) exercise its [***] would constitute a
violation of an Applicable Law; (v) make a determination [***] under this
Agreement or (vi)

59

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

Exhibit 10.6
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Triple asterisks denote omissions.

require [***], whether internal or external, including capital expenditures for
which [***] as provided herein; and

(c)
to the extent CRISPR is then conducting Additional Research, Vertex may, but
will not be obligated to, assume responsibility for such Additional Research, in
which case, Vertex’s obligation to fund such activities as provided in
Section 7.4 will terminate. If Vertex does not elect to assume responsibility
for such activities, CRISPR will continue to perform such activities and Vertex
will continue to reimburse CRISPR for Research Costs arising out of such
activities as provided herein.

10.3.11.
[***]. If (a) CRISPR (or any CRISPR Entity(ies)) commits a breach or series of
breaches of this Agreement, (b) Vertex incurs at least [***] in aggregate
losses, damages and expenses as a result of such breach or breaches, (c) Vertex
does not terminate this Agreement in its entirety or with respect to a
Collaboration Target or Product due to such breach or breaches, and (d) Vertex
has not exercised its rights under Section 11.3.1 or 11.3.2, as applicable, with
respect to such breach or breaches, then, in addition to any other remedies
Vertex may have under this Agreement, at law or in equity or otherwise, [***].
[***] Vertex will provide CRISPR with a written certificate, signed by Vertex’s
Chief Financial Officer, certifying [***]. Notwithstanding the foregoing, if
CRISPR notifies Vertex in writing that it disputes Vertex’s assertion that
CRISPR (or any CRISPR Entity(ies)) is in breach of this Agreement [***], then
(a) Vertex will initiate the dispute resolution process set forth in Section
11.3.4, and (b) pending the Parties’ agreement regarding the appropriate [***]
or a determination by the mediator [***] in accordance with Section 11.3.4(b),
Vertex will [***]. If the Parties cannot settle their dispute by mutual
agreement, then, in accordance with Section 11.3.4(b), the mediator will
determine (1) [***], (2) [***] and (3) if [***], in which case Vertex [***].

10.3.12.
[***] Dispute Resolution.

(a)
Escalation. If Vertex has exercised its [***] rights under Section 11.3.3, and
there is a dispute regarding whether CRISPR is in breach of this Agreement
[***], either Party may make a written request that [***] be referred for
resolution to Executive Officers of each Party (or their designees). Within
[***] after such request, the Executive Officers of each Party (or their
designees) will meet in person at a mutually acceptable time and location or by
means of telephone or video conference to negotiate a settlement of a [***].
Each Party may elect to have such Party's JRC representatives participate in
such meeting, if desired, provided that it provides the other Party with
reasonable advance notice of such intent so as to enable the other Party to have
its JRC representatives also participate in such meeting, if desired. In the
event that the Executive Officers of each Party (or their designees) fail to
resolve the [***] within such [***] the [***] will be referred to mediation
under Section 11.3.4(b).

(b)
Mediation. If a [***] cannot be resolved pursuant to Section 11.3.4(a), the
Parties agree to try in good faith to resolve any such [***] by non-binding
mediation administered by JAMS End Dispute in accordance with its

60

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

Exhibit 10.6
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Triple asterisks denote omissions.

commercial mediation rules. The mediation will be conducted by a single mediator
appointed by agreement of the Parties who will have previous financial
experience in the pharmaceutical industry, or failing such agreement by JAMS End
Dispute in accordance with its commercial mediation rules. Unless otherwise
mutually agreed upon by the Parties, the mediation proceedings will be conducted
in Boston, Massachusetts. The Parties agree that [***] the cost of the
mediation, including filing and hearing fees, and the cost of the mediator(s).
Each Party will bear its own attorneys’ fees and associated costs and expenses.
If the Parties are unable to resolve a [***] pursuant to such mediation, then at
the completion of such mediation the mediator will decide the following issues,
which decision will be binding on the Parties pending final resolution of the
[***] by a court of competent jurisdiction:
(i)
Whether the [***] by Vertex pursuant to Section 11.3.3 exceeds the mediator’s
objective good faith estimate of [***]; and

(ii)
What amount (if any) may Vertex [***] under Section 11.3.3, which [***].

(c)
Mediator Resolution.

(i)
If the mediator determines that [***] by Vertex pursuant to Section 11.3.3
[***], the Parties will promptly cause [***] as provided for in Section 7.10.
The Parties will promptly cause [***].

(ii)
If the mediator determines that Vertex may [***] under Section 11.3.3, Vertex
may [***].

(iii)
The decisions rendered by mediator with respect to [***] will be binding on the
Parties pending resolution of the [***] by the agreement of the Parties or by a
court of competent jurisdiction in accordance with this Agreement. 

10.4.
Consequences of Expiration or Termination of the Agreement.

10.4.3.
In General. If this Agreement expires or is terminated by a Party in accordance
with this ARTICLE 11 at any time and for any reason, the following terms will
apply to any Product in any country that is the subject of such expiration or
termination:

(c)
The Parties will return (or destroy, as directed by the other Party) all data,
files, records and other materials containing or comprising the other Party’s
Confidential Information, except to the extent such Confidential Information is
subject to a license or similar grant of rights that survives such termination
or is necessary or useful to conduct activities for a surviving Collaboration
Program or Product or country. Notwithstanding the foregoing, the Parties will
be permitted to retain one copy of such data, files, records, and other
materials for archival and legal compliance purposes.

61

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

Exhibit 10.6
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Triple asterisks denote omissions.

(d)
Termination or expiration of this Agreement for any reason will be without
prejudice to any rights or financial compensation that will have accrued to the
benefit of a Party prior to such termination or expiration. Such termination or
expiration will not relieve a Party from obligations that are expressly
indicated to survive the termination or expiration of this Agreement.

(e)
The following provisions of this Agreement will survive any expiration or
termination of this Agreement: Article 1 (Definitions), Section 5.3 (License
Grants to Vertex) (solely in the event of expiration, not termination) Section
5.4 (Licenses to Improvements), Section 5.6 (No Implied Licenses), Article 7
(Financial Provisions), solely to the extent of accrued obligation as
contemplated by Section 11.4.1(b), Section 8.1.1 (Ownership; Assignment – CRISPR
Technology and Vertex Technology), 8.1.2 (Ownership; Assignment – Agreement
Technology), Sections 8.5-8.6 (with respect to proceedings to the extent
relating to events occurring prior to the effective date of termination) 8.6.4
(Joinder), Article 10 (Indemnification; Insurance), Section 11.2.5 (Public
Announcements; Publications), Section 11.4 (Consequences of Expiration or
Termination of the Agreement), Sections 12.1, 12.2, 12.3, 12.4 and 12.6
(Confidentiality) and Article 13 (Miscellaneous).”

10.4.4.
Termination Before License Grant. If this Agreement expires or is terminated, in
whole or in part with respect to a Collaboration Target, by a Party in
accordance with this ARTICLE 11 before Vertex has been granted an Exclusive
License for a particular Collaboration Target, then, in addition to the terms
set forth in Section 11.4.1, the following terms will apply to each
Collaboration Target that is the subject of such expiration or termination:

(a)
Vertex’s Option under Section 4.1 will expire and CRISPR will be free to
Research, Develop, Manufacture and Commercialize the applicable Licensed Agents
or Products in the applicable counties on its own or with a Third Party;

 
(b)
except with respect to (i) any termination by Vertex under Section 11.2.3(a) or
(ii) any expiration or termination with respect to a Collaboration Target that
is associated with [***], effective upon such termination, Vertex hereby grants
to CRISPR a non-exclusive, royalty-free, irrevocable, perpetual, worldwide
license, which CRISPR may sublicense through multiple tiers, under all Vertex
Program Technology Controlled by Vertex or its Affiliates (A) generated under
the applicable Collaboration Program or (B) used in such terminated
Collaboration Program to Develop, Manufacture and Commercialize Licensed Agents
and Products directed to the relevant Collaboration Target; provided, that if
the grant of such license to CRISPR with respect to any Know-How or Patent
included in the Vertex Program Technology or CRISPR’s exercise of such license
would [***] or would require compliance with any provision of any license
between Vertex and a Third Party, Vertex will so notify CRISPR and such Know-How
or Patent will only be included in the foregoing license if, following receipt
of such notice, [***] and comply with any such provision; and

62

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

Exhibit 10.6
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Triple asterisks denote omissions.

(c)
except as explicitly set forth in Section 11.4.1, Vertex will have no further
rights and CRISPR will have no further obligations with respect to each
terminated Collaboration Target.

10.4.5.
Termination After License Grant. If this Agreement is terminated, in whole or in
part with respect to a Product or Collaboration Target, by a Party in accordance
with this ARTICLE 11 (but not if this Agreement expires in accordance with its
terms) after Vertex has been granted an Exclusive License for a particular
Collaboration Target, then, in addition to the terms set forth in
Section 11.4.1, the following terms will apply to any Product or Collaboration
Target that is the subject of such termination:

(c)
except as set forth in Section 11.4.3(f), the applicable licenses granted by
CRISPR to Vertex under this Agreement will terminate and Vertex and its
Affiliates will cease all Research, Development, Manufacture and
Commercialization activities with respect to the applicable Products;

(d)
Vertex will assign back to the CRISPR Entity designated by CRISPR AG any Patents
assigned to Vertex under Section 8.1.3 that relate to the applicable
Collaboration Target to the extent that such Patents do not also relate to a
Collaboration Target for which Vertex is maintaining the Exclusive License;

(e)
except with respect to (i) any termination by Vertex under Section 11.2.3(a) or
(ii) any expiration or termination with respect to a Collaboration Target that
is associated with [***], Vertex shall, as promptly as practicable, transfer to
the CRISPR Entity designated by CRISPR AG or such CRISPR Entity’s designee
possession and ownership of all Regulatory Approvals solely relating to the
Development, Manufacture or Commercialization of any terminated Product or
Collaboration Target within such terminated Collaboration Program;

(f)
except as explicitly set forth in Section 11.4.1, Vertex will have no further
rights and CRISPR will have no further obligations with respect to the
terminated Products and Collaboration Target(s);

(g)
except with respect to (i) any termination by Vertex under Section 11.2.3(a) or
(ii) any termination with respect to a Collaboration Target that is associated
with [***], and subject to Section 11.4.3(f), effective upon such termination,
Vertex hereby grants to CRISPR a non-exclusive, royalty-free, irrevocable,
perpetual, worldwide license, which CRISPR may sublicense through multiple
tiers, under all Vertex Program Technology Controlled by Vertex or its
Affiliates and (A) generated under the applicable Collaboration Program or
(B) used in such terminated Collaboration Program to Develop, Manufacture and
Commercialize Licensed Agents and Products directed to the relevant
Collaboration Target; provided, that if the grant of such license to CRISPR with
respect to any Know-How or Patent included in the Vertex Program Technology or
CRISPR’s exercise of such license would [***] or would require compliance with
any provision of any license between Vertex and a Third Party, Vertex will so
notify CRISPR and such Know-How or Patent will only be included in the foregoing
license

63

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Exhibit 10.6
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Triple asterisks denote omissions.

if, following receipt of such notice, [***] and comply with any such provision;
and
(h)
any permitted Sublicense of Vertex will, at the Sublicensee’s option, survive
such termination; provided that the Sublicensee is not in material breach of any
of its obligations under such Sublicense. In order to effect this provision, at
the request of the Sublicensee, CRISPR will enter into a direct license with the
Sublicensee on substantially the same terms as this Agreement (taking into
account the scope of the licensee granted under such Sublicense); provided that
CRISPR will not be required to undertake obligations in addition to those
required by this Agreement, and that CRISPR’s rights under such direct license
will be consistent with its rights under this Agreement, taking into account the
scope of the license granted under such direct license. Any such Sublicense
would continue to include rights to any Patent assigned to CRISPR pursuant to
Section 11.4.3(b) to the extent such rights were included in such Sublicense
prior to termination and the license to CRISPR set forth in Section 11.4.3(e),
if applicable, would not include rights to any Patent Controlled by Vertex to
the extent such license would conflict with any rights granted to the relevant
Sublicensee under such Patent.

ARTICLE 11.    
CONFIDENTIALITY
11.1.
Confidentiality. Except to the extent expressly authorized by this Agreement or
otherwise agreed in writing, the Parties agree that, during the Agreement Term
and for [***] thereafter, each Party (the “Receiving Party”) receiving any
Confidential Information of the other Party (the “Disclosing Party”) hereunder
will: (a) keep the Disclosing Party’s Confidential Information confidential; (b)
not publish, or allow to be published, and will not otherwise disclose, or
permit the disclosure of, the Disclosing Party’s Confidential Information in any
manner not expressly authorized pursuant to the terms of this Agreement; and (c)
not use, or permit to be used, the Disclosing Party’s Confidential Information
for any purpose other than as expressly authorized pursuant to the terms of this
Agreement. Without limiting the generality of the foregoing, to the extent that
Vertex provides to CRISPR (or any CRISPR Entity(ies)) any Confidential
Information owned by any Third Party, CRISPR will handle such Confidential
Information in accordance with the terms and conditions of this ARTICLE 12
applicable to a Receiving Party.

11.2.
Authorized Disclosure. Notwithstanding the foregoing provisions of Section 12.1,
each Party may disclose Confidential Information belonging to the other Party to
the extent such disclosure is reasonably necessary to:

11.2.13.
file or prosecute patent applications as contemplated by this Agreement;

11.2.14.
prosecute or defend litigation;

11.2.15.
exercise its rights and perform its obligations hereunder; or

11.2.16.
comply with Applicable Law.

64

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

Exhibit 10.6
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Triple asterisks denote omissions.

If a Party deems it reasonably necessary to disclose Confidential Information
belonging to the other Party pursuant to this Section 12.2, the Disclosing Party
will to the extent possible give reasonable advance written notice of such
disclosure to the other Party and take reasonable measures to ensure
confidential treatment of such information. In addition to the foregoing, [***]
may disclose [***] Confidential Information to Third Parties as reasonably
required to facilitate the actual or potential Research, Development,
Manufacture or Commercialization of [***] or Products; provided that such
disclosure is covered by terms of confidentiality and non-use similar to those
set forth herein.
Notwithstanding anything to the contrary contained herein, in no event may [***]
disclose [***] Confidential Information to any Third Party (including any of
CRISPR’s investors, collaborators or licensees) engaged in the research,
development, manufacture or commercialization of pharmaceutical products.
11.3.
SEC Filings and Other Disclosures. Either Party may disclose the terms of this
Agreement (i) to the extent required to comply with Applicable Law, including
the rules and regulations promulgated by the United States Securities and
Exchange Commission or any equivalent governmental agency in any country in the
Territory; provided, that such Party will reasonably consider the comments of
the other Party regarding confidential treatment sought for such disclosure and
(ii) to its advisors (including financial advisors, attorneys and accountants),
actual or potential acquisition partners, financing sources or investors and
underwriters on a need to know basis; provided that such disclosure is covered
by terms of confidentiality similar to those set forth herein (which may include
professional ethical obligations).

11.4.
Residual Knowledge Exception. Notwithstanding any provision of this Agreement to
the contrary, Confidential Information will not include Residual Knowledge. Any
use made by the Receiving Party of Residual Knowledge is on an “as is, where is”
basis, with all faults and all representations and warranties disclaimed and at
its sole risk.

11.5.
Public Announcements; Publications.

11.5.1.
Coordination. CRISPR and Vertex will, from time to time and at the request of
the other Party, discuss the general information content relating to this
Agreement that may be publicly disclosed; provided, however, that [***] will
have no obligation to consult with [***] with respect to any scientific
publication or public announcement concerning [***] Research, Development,
Manufacture, Commercialization or use of any [***] or Product (except as
otherwise expressly set forth in Section 12.5.3).

11.5.2.
Announcements. The Parties will jointly issue a press release, in the form
attached hereto as Schedule M, regarding the signing of this Agreement on a date
to be determined by Vertex within [***] following the Effective Date. Except as
set forth in the preceding sentence and as may be expressly permitted under
Section 12.3, or as required to comply with Applicable Law (including the rules
and regulations promulgated by the United States Securities and Exchange
Commission or any equivalent governmental agency in any country in the
Territory), neither Party will make any public announcement regarding this
Agreement without the prior written approval of the other Party. For the sake of
clarity, nothing in this Agreement will prevent [***] from making any scientific
publication or public announcement concerning [***] Research, Development,
Manufacture or Commercialization activities with respect to any

65

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

Exhibit 10.6
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Triple asterisks denote omissions.

[***] or Product under this Agreement; provided, however, that, except as
permitted under Section 12.2, [***] will not disclose any of [***] Confidential
Information in any such publication or announcement without obtaining CRISPR’s
prior written consent to do so.
11.5.3.
Publications. During the Agreement Term, each Party will submit to the other
Party (the “Non-Disclosing Party”) for review and approval any proposed
academic, scientific and medical publication or public presentation related to
any Licensed Agent or Product or any activities conducted pursuant to any
Research Plan. In each such instance, such review and approval will be conducted
for the purposes of preserving the value of the Licensed Technology and the
Vertex Technology, the rights granted to Vertex hereunder and determining
whether any portion of the proposed publication or presentation containing the
Non-Disclosing Party’s Confidential Information should be modified or deleted.
Written copies of such proposed publication or presentation required to be
submitted hereunder will be submitted to the Non-Disclosing Party no later than
[***] before submission for publication or presentation (or five Business Days
in advance in the case of an abstract). The Non-Disclosing Party will provide
its comments with respect to such publications and presentations within [***] of
its receipt of such written copy (or [***] in the case of an abstract). The
review period may be extended for an additional [***] if the Non-Disclosing
Party reasonably requests such extension including for the preparation and
filing of patent applications. Notwithstanding anything to the contrary, the
Non-Disclosing Party may require that the other Party redact the Non-Disclosing
Party’s Confidential Information from any such proposed publication or
presentation. CRISPR and Vertex will each comply with standard academic practice
regarding authorship of scientific publications and recognition of contribution
of other parties in any publication. Notwithstanding the foregoing, Vertex’s
obligation to submit any publication to CRISPR for review and approval under
this Section 12.5.3 will not apply to any publication made with respect to a
Collaboration Program following Vertex’s exercise of the applicable Option that
does not contain CRISPR’s Confidential Information or disclose any non-public
information included in the Licensed Technology; provided, that where reasonably
possible, Vertex will provide CRISPR with an advance copy of such publication if
such publication is [***].

11.6.
Vertex Information Rights.

11.6.1.
If Vertex determines in good faith that CRISPR (or any CRISPR Entity(ies)) is an
entity that is subject to financial consolidation with Vertex for the purposes
of its quarterly and annual financial statements (or otherwise requires such
information in order to comply with GAAP), CRISPR will make available to Vertex:

(d)
as soon as practicable, but in any event within [***] after the end of each
Calendar Quarter (i) an unaudited balance sheet as of the end of such Calendar
Quarter, (ii) unaudited statements of income and cash flows for such Calendar
Quarter, (iii) an unaudited statement of stockholders’ equity for such period,
and (iv) a detailed trial balance as of the end of such Calendar Quarter, all

66

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

Exhibit 10.6
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Triple asterisks denote omissions.

prepared in accordance with GAAP (except that such financial statements may
(x) be subject to year-end audit adjustments and (y) not contain all notes
thereto that may be required in accordance with GAAP) and thereafter will
promptly provide such other information as Vertex may reasonably request;

(e)
as soon as practicable, but in any event within [***] after the end of each
Calendar Year (i) an audited balance sheet as of the end of such Calendar Year,
(ii) audited statements of income and cash flows for such Calendar Year,
(iii) an audited statement of stockholders’ equity for such Calendar Year and
(iv) a detailed trial balance as of the end of such Calendar Year, together with
related footnotes all prepared in accordance with GAAP and audited and certified
by a nationally recognized independent public accounting firm; and

(f)
on or prior to December 31 of each Calendar Year (other than the Calendar Year
ending December 31, 2015),, such [***] as of [***] of such year as prepared by
[***].

ARTICLE 12.    
MISCELLANEOUS
12.1.
Assignment. Neither this Agreement nor any interest hereunder will be assignable
by either Party without the prior written consent of the other Party, except as
follows: (a) Vertex, and subject to Section 13.2, CRISPR, may, subject to the
terms of this Agreement, assign its rights and obligations under this Agreement
by way of sale of itself or the sale of the portion of such Party’s business to
which this Agreement relates, through merger, sale of assets or sale of stock or
ownership interest; provided that such sale is not primarily for the benefit of
its creditors; and provided further that no CRISPR Entity may assign its rights
and obligations hereunder unless all CRISPR Entities are assigning their rights
and obligations hereunder to the same Third Party; and (b) either Party may
assign its rights and obligations under this Agreement to any of its Affiliates;
provided that such Party will remain liable for all of its rights and
obligations under this Agreement. An assigning Party will promptly notify the
other Party of any assignment or transfer under the provisions of this
Section 13.1. This Agreement will be binding upon the successors and permitted
assigns of the Parties and the name of a Party appearing herein will be deemed
to include the names of such Party’s successors and permitted assigns to the
extent necessary to carry out the intent of this Agreement. Any assignment not
in accordance with this Section 13.1 will be void.

12.2.
Change of Control of CRISPR.

12.2.6.
Notification. CRISPR will notify Vertex in writing promptly (and in any event
within [***] Business Days) following the execution of a definitive agreement by
any CRISPR Entity, its Affiliates or its equity holders that could reasonably be
expected to result in a Change of Control of any CRISPR Entity.

12.2.7.
Effects of Change of Control of CRISPR. If during the Agreement Term any CRISPR
Entity undergoes a Change of Control to a Competitor, then upon the effective
date of such Change of Control (a) Vertex’s obligation to provide CRISPR [***]
will terminate and (b) Vertex will [***] with respect to the [***].

67

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

Exhibit 10.6
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Triple asterisks denote omissions.

12.3.
Force Majeure. Each Party will be excused from the performance of its
obligations under this Agreement to the extent that such performance is
prevented by Force Majeure and the nonperforming Party promptly provides notice
of the prevention to the other Party. Such excuse will be continued so long as
the condition constituting force majeure continues and the nonperforming Party
uses Commercially Reasonable Efforts to remove the condition.

12.4.
Representation by Legal Counsel. Each Party hereto represents that it has been
represented by legal counsel in connection with this Agreement and acknowledges
that it has participated in the drafting hereof. In interpreting and applying
the terms and provisions of this Agreement, the Parties agree that no
presumption will exist or be implied against the Party that drafted such terms
and provisions.

12.5.
Notices. All notices which are required or permitted hereunder will be in
writing and sufficient if delivered personally or sent by nationally-recognized
overnight courier, addressed as follows:

If to Vertex:
Vertex Pharmaceuticals Incorporated
Attn: Business Development
50 Northern Avenue
Boston, Massachusetts 02110

with a copy to:
Vertex Pharmaceuticals Incorporated
Attn: Corporate Legal
50 Northern Avenue
Boston, Massachusetts 02110

and:
Ropes & Gray LLP
Attn: Marc A. Rubenstein
Prudential Tower
800 Boylston Street
Boston, Massachusetts 02199-3600

If to CRISPR:    
CRISPR Therapeutics Ltd.
Attn: Chief Legal Officer
85 Tottenham Court Road
London W1T 4TQ
United Kingdom
with a copy to:
Goodwin Procter LLP
Attn: Christopher Denn
53 State Street

68

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

Exhibit 10.6
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Triple asterisks denote omissions.

Boston, Massachusetts 02109

or to such other address as the Party to whom notice is to be given may have
furnished to the other Party in writing in accordance herewith. In addition,
each Party will deliver a courtesy copy to the other Party’s Alliance Manager
concurrently with such notice. Any such notice will be deemed to have been
given: (a) when delivered if personally delivered on a Business Day (or if
delivered or sent on a non-business day, then on the next Business Day); or
(b) on receipt if sent by overnight courier. Any notices required or permitted
under this Agreement that are delivered by Vertex to CRISPR AG pursuant to this
Section 13.5 shall be deemed properly delivered hereunder to each of CRISPR UK,
CRISPR AG, CRISPR Inc. and Tracr.
12.6.
Amendment. No amendment, modification or supplement of any provision of this
Agreement will be valid or effective unless made in writing and signed by a duly
authorized officer of each of Vertex Parent, Vertex UK and CRISPR AG, CRISPR
Inc., CRISPR UK and Tracr.

12.7.
Waiver. No provision of this Agreement will be waived by any act, omission or
knowledge of a Party or its agents or employees except by an instrument in
writing expressly waiving such provision and signed by a duly authorized officer
of the waiving Party. The waiver by either of Vertex or CRISPR of any breach of
any provision hereof by the other Party will not be construed to be a waiver of
any succeeding breach of such provision or a waiver of the provision itself.
Written waiver of any provision of this Agreement by of any one of the CRISPR
Entities in accordance with this Section 13.7 shall be binding upon each of
CRISPR UK, CRISPR AG, CRISPR Inc. and Tracr.

12.8.
Severability. If any clause or portion thereof in this Agreement is for any
reason held to be invalid, illegal or unenforceable, the same will not affect
any other portion of this Agreement, as it is the intent of the Parties that
this Agreement will be construed in such fashion as to maintain its existence,
validity and enforceability to the greatest extent possible. In any such event,
this Agreement will be construed as if such clause of portion thereof had never
been contained in this Agreement, and there will be deemed substituted therefor
such provision as will most nearly carry out the intent of the Parties as
expressed in this Agreement to the fullest extent permitted by Applicable Law.

12.9.
Descriptive Headings. The descriptive headings of this Agreement are for
convenience only and will be of no force or effect in construing or interpreting
any of the provisions of this Agreement.

12.10.
Export Control. This Agreement is made subject to any restrictions concerning
the export of products or technical information from the United States of
America or other countries that may be imposed upon or related to CRISPR or
Vertex from time to time. Each Party agrees that it will not export, directly or
indirectly, any technical information acquired from the other Party under this
Agreement or any products using such technical information to a location or in a
manner that at the time of export requires an export license or other
governmental approval, without first obtaining the written consent to do so from
the appropriate Governmental Authority.

12.11.
Governing Law. This Agreement, and all claims arising under or in connection
therewith, will be governed by and interpreted in accordance with the
substantive laws of The Commonwealth of Massachusetts, without regard to
conflict of law principles thereof.

69

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Exhibit 10.6
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Triple asterisks denote omissions.

12.12.
Entire Agreement. This Agreement constitutes and contains the complete, final
and exclusive understanding and agreement of the Parties and cancels and
supersedes any and all prior negotiations, correspondence, understandings and
agreements, whether oral or written, between the Parties respecting the subject
matter hereof and thereof, including that certain Confidentiality Agreement
between Vertex Parent and CRISPR dated May 6, 2015, which is hereby superseded
and replaced in its entirety as of the Effective Date, and any Confidential
Information disclosed by the Parties under such agreement will be treated in
accordance with the provisions of ARTICLE 12.

12.13.
Independent Contractors. Both Parties are independent contractors under this
Agreement. Nothing herein contained will be deemed to create an employment,
agency, joint venture or partnership relationship between the Parties hereto or
any of their agents or employees, or any other legal arrangement that would
impose liability upon one Party for the act or failure to act of the other
Party. Neither Party will have any express or implied power to enter into any
contracts or commitments or to incur any liabilities in the name of, or on
behalf of, the other Party, or to bind the other Party in any respect
whatsoever.

12.14.
Interpretation. Except where the context expressly requires otherwise, (a) the
use of any gender herein will be deemed to encompass references to either or
both genders, and the use of the singular will be deemed to include the plural
(and vice versa), (b) the words “include,” “includes” and “including” will be
deemed to be followed by the phrase “without limitation,” (c) the word “will”
will be construed to have the same meaning and effect as the word “shall,”
(d) any definition of or reference to any agreement, instrument or other
document herein will be construed as referring to such agreement, instrument or
other document as from time to time amended, supplemented or otherwise modified
(subject to any restrictions on such amendments, supplements or modifications
set forth herein), (e) any reference herein to any Person will be construed to
include the Person’s successors and assigns, (f) the words “herein,” “hereof”
and “hereunder,” and words of similar import, will be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (g) all
references herein to Sections, Schedules or Exhibits will be construed to refer
to Sections, Schedules or Exhibits of this Agreement, and references to this
Agreement include all Schedules and Exhibits hereto, (h) the word “notice” will
mean notice in writing (whether or not specifically stated) and will include
notices, consents, approvals and other written communications contemplated under
this Agreement, (i) provisions that require that a Party, the Parties or any
committee hereunder “agree,” “consent” or “approve” or the like will require
that such agreement, consent or approval be specific and in writing, whether by
written agreement, letter, approved minutes or otherwise (but excluding e-mail
and instant messaging), (j) references to any specific law, rule or regulation,
or article, section or other division thereof, will be deemed to include the
then-current amendments thereto or any replacement or successor law, rule or
regulation thereof, (k) any definition of or reference to any agreement,
instrument or other document herein will be construed as referring to such
agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), and (l) the term
“or” will be interpreted in the inclusive sense commonly associated with the
term “and/or.”

12.15.
No Third Party Rights or Obligations. No provision of this Agreement will be
deemed or construed in any way to result in the creation of any rights or
obligations in any Person not a Party to this Agreement.

70

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Exhibit 10.6
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Triple asterisks denote omissions.

12.16.
Further Actions. Each Party agrees to execute, acknowledge and deliver such
further instruments, and to do all such other acts, as may be necessary or
appropriate in order to carry out the purposes and intent of this Agreement.

12.17.
Counterparts. This Agreement may be executed in two counterparts, each of which
will be an original and both of which will constitute together the same
document. Counterparts may be signed and delivered by facsimile or digital
transmission (.pdf), each of which will be binding when received by the
applicable Party.

12.18.
CRISPR Entities. Notwithstanding anything to the contrary in this Agreement:

12.18.1.
CRISPR UK, CRISPR AG, CRISPR Inc. and Tracr shall be jointly and severally
liable to Vertex for all obligations of CRISPR under this Agreement;

12.18.2.
Breach or violation of any representation, warranty covenant or other obligation
of CRISPR under this Agreement may result from, be caused by or arise from the
act or omission of any one or more of the CRISPR Entities;

12.18.3.
Any particular right or interest of CRISPR under this Agreement shall only be
exercisable once by the first CRISPR Entity to exercise such right or interest
hereunder on behalf of CRISPR (i.e., Vertex shall not be liable to more than one
CRISPR Entity with respect to any particular right or interest of CRISPR
hereunder, including, without limitation, any payment obligations of Vertex
hereunder); and

12.18.4.
Any consent or approval of CRISPR permitted or required under this Agreement by
any one of CRISPR UK, CRISPR AG, CRISPR Inc. or Tracr shall be binding upon all
of the CRISPR Entities.

[SIGNATURE PAGE FOLLOWS]
* - * - * - *

71

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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by
their representatives thereunto duly authorized as of the Effective Date.
VERTEX PHARMACEUTICALS
INCORPORATED

CRISPR THERAPEUTICS AG

By: /s/ Ian Smith

By: /s/ Rodger Novak
Name: Ian Smith
Title: Chief Financial Officer
Name: Rodger Novak
Title: CEO
VERTEX PHARMACEUTICALS (EUROPE) LIMITED

CRISPR THERAPEUTICS LIMITED
By: /s/ Ian Smith
By: /s/ Rodger Novak
Name: Ian Smith
Name: Rodger Novak
Title: Director
Title: CEO
 

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

Schedule A
CRISPR Reserved Targets
Following are the CRISPR Reserved Targets:

1.
The following Targets:

a.
[***]

b.
[***]

c.
[***]

d.
[***]

e.
[***]

f.
[***]

g.
[***]

h.
[***]

i.
[***]

j.
[***]

2.
All Targets that are, [***] (a) [***] or (b) [***] or (c) [***].

3.
All Targets that are, at the time Vertex has proposed to add such a Target to
the Vertex Target List, [***].

4.
All Targets that are, at the time Vertex has proposed to add such a Target to
the Vertex Target List, Targets that are [***].

All Targets that are, at the time Vertex has proposed to add such a Target to
the Vertex Target List, Targets that are [***].

SCHEDULE A

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

Schedule B
Initial Vertex Targets
1)
CFTR (cystic fibrosis transmembrane conductance regulator)

2)
[***]

3)
[***]

4)
[***]

5)
[***]

6)
[***]

7)
[***]

8)
[***]

9)
[***]

10)
[***]

11)
[***]

12)
[***]

13)
[***]

Initial Collaboration Targets

1)
CFTR (cystic fibrosis transmembrane conductance regulator)

2)
[***]

[***]

SCHEDULE B

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

Schedule C
Option Exercise Data Package
•
Option Exercise Data Package. All data for the Option Exercise Data Package is
pre-specified by the Collaboration Program Working Group and is reviewed and
endorsed by the JRC.

•
The responsibilities below would be specified on a program by program basis and
endorsed by the JRC ahead of beginning any Research Plan.

•
Upon completion of the work, the data for each item is presented to the JRC and
compared to the pre-specification. The JRC endorses the interpretation that the
data are or are not consistent with the pre-specification.

Item
Party Responsible for Generating Item/Data
[***]
CRISPR & Vertex
[***]
CRISPR
[***]
CRISPR
[***]
CRISPR and Vertex
[***]
Vertex and CRISPR
[***]
Vertex
[***]
Vertex
[***]
CRISPR

SCHEDULE C

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

Schedule D
Initial Research Plan Components
The following are key elements for the Research Plans. A full Research Plan will
be created by the Collaboration Program Working Group utilizing these elements
in accordance with Section 2.2. The provisions will be approved by the JRC in
accordance with ARTICLE 3.
Target Name
Description
 
Work Plan Items
Listing of all items required to complete the work plan. This should include all
of the items in Schedule C
Listing of responsible parties for each of the work items.
Key milestones
Listing of key waypoints on the way to a transition agreement.
Listing of key dates for each of the milestones.
Budget
Out of Pocket Spend – CRISPR
FTE – CRISPR
FTE – Vertex
Listing of dollar amounts
Key pieces of data and required values
Listing of key pieces of data expected in the Option Exercise Data Package. This
is a critical element and will have to be carefully considered. E.g. for a [***]
etc. are other possible values. These will be highly Target specific.
Minimum acceptable values for each of these data. These should be prospective
and objective wherever possible.
Key dependencies
List key dependencies on various elements.
 
Assumptions
List project assumptions.
 
Risks
Listing of key risks, probabilities and impacts
Describe mitigation/ contingency/ avoidance plan

SCHEDULE D

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Schedule E
Subcontractors

SCHEDULE E

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

Schedule F
CRISPR Background Know-How
(as of 26 October 2015)
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. A total of 1 page was omitted. [***]

SCHEDULE F

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

Schedule G
Terms of Joint Development & Commercialization Agreement
ARTICLE 1.
DEFINITIONS.
1.1.
“Audited Party” has the meaning set forth in Section 7.6.

1.2.
“Auditing Party” has the meaning set forth in Section 7.6.

1.3.
“Baseball Arbitration” means “baseball” style arbitration in accordance with the
arbitration procedure set forth on Schedule I of the Agreement.

1.4.
“Commercialization Budget” has the meaning set forth in Section 5.1.

1.5.
“Commercialization Costs” means the sum of the following costs and expenses
incurred by the Parties or their respective Affiliates, in Commercializing the
Shared Products (and related Manufacturing activities) in the Territory, in each
case, to the extent incurred in accordance with the Commercialization Plan and
Commercialization Budget:

(a)
Expenses incurred in connection with the [***];

(b)
Expenses incurred to conduct [***];

(c)
[***] representing the [***] as defined in the [***], in each case, to the
extent directly attributable to [***];

(d)
Expenses identifiable to the [***], in each case, to the extent incurred
specifically with respect [***];

(e)
Expenses incurred in connection with the [***];

(f)
Expenses directly associated with [***], in each case, that are incurred with
respect to a [***];

(g)
[***];

(h)
Expenses reasonably necessary and identifiable to the [***] with respect to:
[***];

(i)
[***]; and

(j)
any other Expenses approved by the JCC and included in the Commercialization
Budget that are not otherwise included in any other Commercialization Cost
category.

Commercialization Costs will exclude [***].
1.6.
“Commercialization Plan” has the meaning set forth in Section 5.1.

1.7.
“Development Budget” has the meaning set forth in Section 3.1.

1.8.
“Development Costs” means the sum of the following costs and expenses incurred
by the Parties and their respective Affiliates in Developing the Shared Product
(and related

SCHEDULE G

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

Manufacturing activities) in the Territory, in each case, to the extent incurred
in accordance with the Global Development Plan and the Development Budget,
including:
(a)
Expenses incurred in [***];

(b)
[***];

(c)
[***] incurred in connection with [***];

(d)
Expenses associated with [***], to the extent incurred with respect to [***];

(e)
Expenses incurred in connection with [***], including the Parties’ [***];

(f)
Expenses associated with [***]; and

(g)
any other Expenses incurred for [***] and included in the [***].

Development Costs will exclude [***].
1.9.
“Expenses” means Out-of-Pocket Costs and FTE Costs.

1.10.
“FTE Costs” means the product of (a) the number of FTEs (proportionately, on a
per-FTE basis) used by a Party or its Affiliates in directly performing
activities assigned to such Party under and in accordance with the Global
Development Plan, Commercialization Plan or Medical Affairs Plan, as applicable,
and (b) the FTE Rate.  

1.11.
“FTE” means one employee full-time for one year or more than one person working
the equivalent of a full-time person, working directly on performing activities
under the Global Development Plan, Medical Affairs Plan or Commercialization
Plan, as applicable, where “full-time” is considered [***] hours for one
Calendar Year. No additional payment will be made with respect to any individual
who works more than [***] hours per Calendar Year and any individual who devotes
less than [***] hours per Calendar Year will be treated as an FTE on a pro rata
basis based upon the actual number of hours worked divided by [***].

1.12.
“Global Development Plan” has the meaning set forth in Section 3.1.

1.13.
“Global Branding Strategy” has the meaning set forth in Section 5.2.2.

1.14.
“JCC” has the meaning set forth in Section 2.1.

1.15.
“JDC” has the meaning set forth in Section 2.1.

1.16.
“JSC” has the meaning set forth in Section 2.1.

1.17.
“Lead Commercialization Party” has the meaning set forth in Section 5.1.

1.18.
“Licensed Vertex Know-How” means (a) [***], that (i) [***] and (ii) [***],
(b) [***] and (c) [***].

1.19.
“Licensed Vertex Background Patents” means (a) [***] that (i) [***] and (ii)
[***], (b) [***] and (c) the [***].

1.20.
“Manufacturing Costs” means the costs of Manufacturing Shared Product, which
(a) to the extent such Shared Product is Manufactured by a Party or its
Affiliates, [***] and (b) to the extent such Shared Product is Manufactured by a
Third Party in an arms-length transaction, [***].

SCHEDULE G

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

1.21.
“Manufacturing Working Group” has the meaning set forth in Section 6.1.

1.22.
“Medical Affairs Activities” means responding to external inquiries or
complaints, the planning for and conduct of investigator sponsored Clinical
Trials not included in the Global Development Plan, medical education, speaker
programs, advisory boards, thought leader activities, educational grants and
fellowships, local country government affairs, Phase 3b Clinical Trials, phase
IV/post-Regulatory Approval Clinical Trials, generating health economics and
outcomes research data from patient reported outcomes, prospective observational
studies and retrospective observational studies, and economic models and
reimbursement dossiers, deployment of MSLs, medical affairs clinical trial
management, doctors in field (other than MSLs), scientific publications and
medical communications.

1.23.
“Medical Affairs Budget” has the meaning set forth in ARTICLE 4.

1.24.
“Medical Affairs Costs” means all Expenses incurred by the Parties in connection
with the conduct of Medical Affairs Activities in accordance with the Medical
Affairs Plan and the Medical Affairs Budget;

1.25.
“Medical Affairs Plan” has the meaning set forth in ARTICLE 4.

1.26.
“MSL” means medical science liaisons.

1.27.
“Net Loss” means, for a given period, Net Sales (including deemed Net Sales
under Section 8.6.5 of the Agreement) in the Territory less Program Expenses,
where the result is a negative number.

1.28.
“Net Profit” means, for a given period, Net Sales (including deemed Net Sales
under Section 8.6.5 of the Agreement) in the Territory less Program Expenses,
where the result is a positive number.

1.29.
“Opt-Out Royalty” has the meaning set forth in Section 11.4.

1.30.
“Other Out-of-Pocket Costs” means:

(a)
Expenses associated with [***] pursuant to the [***];

(b)
[***];

(c)
[***], in each case, that are [***]; and

(d)
Expenses incurred in connection with the [***].

1.31.
“Patent Costs” means all Expenses reasonably allocated to the Shared Products
for the prosecution, maintenance and enforcement of Patents that Cover the
Shared Products.

1.32.
“Pharmacovigilance Agreement” has the meaning set forth in Section 8.1.

1.33.
“Program Expenses” means Development Costs, Commercialization Costs, Medical
Affairs Costs, Patent Costs and Other Out-of-Pocket Costs. 

1.34.
“Project Leader” has the meaning set forth in Section 3.1.

1.35.
“Project Team” has the meaning set forth in Section 3.1.

1.36.
“Reconciliation Report” has the meaning set forth in Section 7.4.

SCHEDULE G

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

1.37.
“Subcontract” has the meaning set forth in ARTICLE 9.

1.38.
“Subcontractor” has the meaning set forth in ARTICLE 9.

1.39.
“Summary Statement” has the meaning set forth in Section 7.3.

1.40.
“Trademark” means all trademarks, service marks, trade names, brand names,
sub-brand names, trade dress rights, product configuration rights, certification
marks, collective marks, logos, taglines, slogans, designs or business symbols
and all words, names, symbols, colors, shapes, designations or any combination
thereof that function as an identifier of source or origin or quality, whether
or not registered, and all statutory and common law rights therein, and all
registrations and applications therefor, together with all goodwill associated
with, or symbolized by, any of the foregoing.

ARTICLE 2.
GOVERNANCE.
2.1.
Committees. Within [***] after execution of the Joint Development &
Commercialization Agreement, the Parties will establish a joint steering
committee (the “JSC”) to provide high-level oversight and decision-making
regarding the activities of the Parties under the Joint Development &
Commercialization Agreement. The JSC’s responsibilities will include
(a) reviewing and overseeing the overall global Development, Manufacture and
Commercialization of the Shared Products in the Field, (b)  overseeing the JDC,
JCC and any other committees and working groups established with respect to the
Shared Product and resolving matters on which the JDC, JCC or such committees
and working groups are unable to reach consensus and (c) performing such other
functions as may be established in the Joint Development & Commercialization
Agreement. The JSC will oversee a joint development committee (the “JDC”) and a
joint commercialization committee (the “JCC”) and such other committees and
working groups as the JSC may determine are appropriate from time to time.

2.2.
Decision-Making. The JSC, JDC, JCC and all other committees and working groups
[***] with the goal being to maximize the chance of successfully developing and
commercializing a [***] in a manner consistent with Applicable Laws and the
Joint Development & Commercialization Agreement. Disputes arising out of the
JDC, JCC or any other committee or working group will be escalated to the JSC
for resolution. Disputes arising at the JSC will be referred to senior
executives of each Party for resolution. whereupon the Parties’ senior
executives will meet in person if requested by either such senior executive and
attempt in good faith to resolve such dispute by negotiation and consultation
for a [***] period following such referral. If the senior executives do not
resolve such dispute within such [***] period, such dispute shall be submitted
to [***].

ARTICLE 3.
DEVELOPMENT.
3.1.
Global Development Plan. The JDC will oversee the Development of Shared Products
by the Parties in the Field in the Territory. Each Shared Product will be
Developed in accordance with a global development plan (the “Global Development
Plan”). The Global Development Plan will include a plan for the Development of
the Shared Product in the

SCHEDULE G

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

Territory through Regulatory Approval, including a regulatory strategy,
high-level study design criteria, an allocation of responsibilities between the
Parties, timelines and a budget for activities conducted under the Global
Development Plan (the “Development Budget”). The JDC will update the Global
Development Plan [***] (or more frequently as needed) and submit it to the JSC
for approval. The Parties will establish a project team (the “Project Team”) to
oversee and coordinate activities under the Global Development Plan. The Project
Team be formed with an experienced team leader (“Project Leader”), and the
composition of the Project Team will be determined by the Project Leader based
on available personnel from each Party across functions. The Project Team will
conduct its responsibilities under the Global Development Plan in good faith and
with reasonable care and diligence. The Project Team will provide the JDC with
periodic updates regarding the progress of activities pursuant to the Global
Development Plan.
3.2.
Development Activities.

3.2.1.
Regulatory Matters. Regulatory activities will be jointly carried out by the
Project Team under the guidance of the JDC. All Regulatory Filings and
Regulatory Approvals that relate to Shared Products shall be filed by and held
in the name of [***] or its relevant Affiliates. [***] shall use Commercially
Reasonable Efforts, in consultation with [***] to seek to obtain and maintain
Regulatory Approval for the Shared Product in the Field. [***] will oversee,
monitor and manage all regulatory interactions, communications and filings with,
and submissions to, Regulatory Authorities with respect to the Shared Products.
[***], in consultation with [***], will control all regulatory activities with
respect to the Shared Products, including determining the labeling strategy and
the content of submissions; provided that [***] may review and comment on such
strategies and submissions. Vertex will prepare all regulatory submissions and
provide [***] with advance drafts of any material documents or other material
correspondence pertaining to the Shared Products, including any proposed
labeling, that [***] plans to submit to any Regulatory Authority. [***] may
provide comments regarding such documents and other correspondence prior to
their submission, which comments [***] will consider in good faith. [***] will
provide [***] with copies of all material submissions it makes to, and all
material correspondence it receives from, a Regulatory Authority pertaining to a
Regulatory Approval of a Shared Product within [***] after receipt. [***] will
provide [***] with reasonable advance notice of any meeting or teleconference
with any Regulatory Authority with respect to the Shared Products. Subject to
Applicable Law, [***] will have the right to participate as an observer in all
material meetings, conferences and discussions by [***] with Regulatory
Authorities pertaining to Development of the Shared Products or Regulatory
Approval of the Shared Products.

3.2.2.
Clinical Trials. The JDC will allocate responsibility between the Parties for
the conduct of Clinical Trials and the various other Development activities
addressed in the Global Development Plan. [***] will have final decision-making
authority with respect to the protocol for any Clinical Trial conducted under
the Global Development Plan and the statistical analysis plan for any such
Clinical Trial.

SCHEDULE G

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

The Party that has responsibility for conducting the Clinical Trial will have
the responsibility for the packaging and labeling of clinical drug supplies,
unless otherwise agreed by the Parties.
3.2.3.
Independent Activities. The Joint Development & Commercialization Agreement will
include a mechanism for each Party to propose additional Clinical Trials for
inclusion in the Global Development Plan. If the other Party does not agree to
include such additional Clinical Trial in the Global Development Plan, the
requesting Party may conduct such Clinical Trial at its sole expense (i.e. such
expenses will not be included as Development Costs); provided that neither Party
may conduct any Clinical Trial that [***]. The non-requesting Party will not
have the right to use the data resulting from such Clinical Trial in a
substantive manner as the basis for obtaining new or expanded Regulatory
Approval for a Product in the Field or for commercial purposes for a Product in
the Field unless and until such Party reimburses the requesting Party for [***]
of the Development Costs..

3.3
Diligence. Each Party will use Commercially Reasonable Efforts to execute and to
perform, or cause to be performed, the activities assigned to it in the Global
Development Plan, and to cooperate with the other Party in carrying out the
Global Development Plan in accordance with the timelines therein. Each Party and
its Affiliates will conduct its Development activities in good scientific manner
and in compliance with Applicable Law. Notwithstanding anything to the contrary
contained herein, a Party or its Affiliates will not be obligated to undertake
or continue any Development activities with respect to the Shared Products if
such Party (or any of its Affiliates) reasonably determines that performance of
such Development activity would violate Applicable Law or infringe or
misappropriate a Third Party’s intellectual property.

ARTICLE 4.
MEDICAL AFFAIRS ACTIVITIES.
The Parties, acting through the JSC, will develop and agree upon a global
medical affairs plan for the Shared Product that describes the Medical Affairs
Activities to be conducted in the Territory, key tactics and strategies for
implementing those activities, the relative responsibilities of the Parties and
the associated budget for such activities (such plan, the “Medical Affairs Plan”
and such budget, the “Medical Affairs Budget”). CRISPR will lead and manage
Medical Affairs Activities in the United States and Vertex will lead and manage
Medical Affairs Activities outside of the United States, in each case, in
accordance with the Medical Affairs Plan. The number of MSLs to be deployed in
each jurisdiction will be determined by the JSC at least [***] prior to
potential launch.
ARTICLE 5.
COMMERCIALIZATION.
5.1.
Commercialization Plan. The JCC will oversee the Commercialization of Shared
Products by the Parties in the Field in the Territory. No later than [***] prior
to the anticipated launch of the Shared Product in the first country in the
Territory, the JCC will develop and submit to the JSC for approval, a
Commercialization plan (the “Commercialization Plan”) that

SCHEDULE G

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

sets forth the Commercialization activities to be undertaken by the Parties with
respect to the Commercialization of the Shared Product in the Territory. The
Commercialization Plan may include activities on a region-by-region or
country-by-country basis, as determined by the JCC. The JCC will update the
Commercialization Plan on [***] (or more frequently as needed) and submit it to
the JSC for approval. The Commercialization Plan will include (a) the Global
Branding Strategy, (b) a marketing strategy, (c) a communications strategy that
includes plans for public relations, conferences and exhibitions and other
external meetings, internal meetings and communications, publications and
symposia, internet activities and core brand package, (d) a high level operating
plan for the implementation of such strategies on [***], including information
related to Shared Product positioning, core messages to be communicated and
pricing strategies, (e) a detailing strategy, (f) a pricing strategy, (g) all
other material activities to be conducted in connection with the
Commercialization of the Shared Product in the Field in the Territory and (h) a
budget for activities conducted under the Commercialization Plan (the
“Commercialization Budget”). The Commercialization Plan will include a
meaningful role for both Parties. In allocating responsibilities between the
Parties, the JCC will take into consideration each Party’s expertise,
capabilities, staffing and available resources to take on such activities, as
well as the Parties’ intention to provide CRISPR an opportunity to build and
expand its expertise, capabilities, staffing and available resources in
connection with performing Commercialization activities allocated to it. CRISPR
shall be the Commercializing lead for Shared Products in the United States and
Vertex shall be the Commercializing lead for Shared Products outside of the
United States. The Commercializing lead, with respect to the United States or
outside of the United States, respectively, shall be referred to herein as the
“Lead Commercialization Party” for such jurisdiction (as applicable, the “Lead
Commercialization Party” Unless otherwise specified in the Commercialization
Plan, the Parties will jointly be responsible for conducting all
Commercialization activities outside of the United States, such activities to be
determined by the JSC.
5.2.
Commercialization Activities.

5.2.1.
Training. The Parties will jointly prepare training programs and materials for
employees and sales representatives with respect to the Shared Product, with the
goal of ensuring compliance with all Applicable Laws and each Party’s compliance
policies. Each Party will be solely responsible for training its employees and
sales representatives in accordance with such training program.

5.2.2.
Global Branding Strategy. The JCC will develop a global branding strategy for
Shared Products in the Territory, including, with respect to each Shared
Product, a life cycle plan, brand vision, positioning, key messaging, concept
and imagery, Trademarks (including name and logos), brand public relations and
supporting market research (the “Global Branding Strategy”) and submit such
strategy to the JSC for approval.

5.2.3.
Trademarks. The JCC will select a product Trademark for each Shared Product
throughout the world consistent with the Global Branding Strategy. Each Shared
Product will be promoted and sold in the Territory under the applicable
Trademarks.

SCHEDULE G

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

5.2.4.
Marketing. The JCC will agree upon a marketing strategy for the Shared Product,
including Shared Product positioning, messaging, appearance and launch
sequencing, consistent with the Global Branding Strategy. Marketing activities
and responsibilities for each Party will be determined by the JCC.

5.2.5.
Managed Markets and Market Access. The JCC will agree upon a strategy for the
managed markets and market access for the Shared Product, including, without
limitation, payer strategy and account management. Such activities and
responsibilities for each Party will be determined by the JCC.

5.2.6.
Pricing. The JCC will establish a global pricing strategy for the Shared Product
(including list price, targeted net pricing, sales-weighted average discounts
and rebates, the approach to pricing with different types of accounts and plans,
types of discounts and rebates) in the Territory. The responsibility of each
Party regarding the implementation of such global pricing strategy, including
negotiating pricing and reimbursement with governments and private payers will
be determined by the JCC.

5.2.7.
Field Sales. The Parties will jointly promote the Shared Product (including
performing sales calls) in the Territory in accordance with the
Commercialization Plan. CRISPR will lead and manage the promotion of the Shared
Product in the United States. Vertex will have the right provide [***] of the
FTES with respect to the Shared Product in the United States. Vertex will lead
and manage promotion of the Shared Product outside of the United States and
CRISPR will have the right to provide [***] of the FTES with respect to the
Shared Product in the Major Market Countries (outside of United States). CRISPR
and Vertex will each ensure that its and its Affiliates’ sales representatives
do not make any representation, statement, warranty or guaranty with respect to
the Shared Product that is not consistent with the applicable current package
insert of prescribing information or other documentation accompanying or
describing a Shared Product, including mutually approved limited warranty and
disclaimers, if any. CRISPR and Vertex will each ensure that its and its
Affiliates’ sales representatives do not make any statements, claims or
undertakings to any person with whom they discuss or promote the Shared Products
that are not consistent with, or provide or use any labeling, literature or
other materials other than those promotional materials currently approved for
use by the JCC.

5.2.8.
Distribution and Patient Services. The Parties will jointly be responsible for
distribution and patient services for the Shared Product in the Territory,
including contracting with applicable service providers, such activities to be
determined by the JCC [***] prior to launch of the Shared Product.

5.2.9.
Booking Sales; Distribution. CRISPR will invoice, sell and book all sales of
Shared Products in the United States and be responsible for warehousing and
distributing such Shared Products in the United States. Vertex will invoice,
sell and book all sales of Shared Products outside of the United States and be
responsible for warehousing and distributing such Shared Products outside of the
United States.

SCHEDULE G

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5.3.
Diligence. Each Party will use Commercially Reasonable Efforts to execute and to
perform, or cause to be performed, the activities assigned to it under the
Commercialization Plan.  Each Party and its Affiliates will conduct its
Commercialization activities in compliance with Applicable Law. Notwithstanding
anything to the contrary contained herein, a Party or its Affiliates will not be
obligated to undertake or continue any Commercialization activities with respect
to the Shared Products if such Party (or any of its Affiliates) reasonably
determines that performance of such Commercialization activity would violate
Applicable Law or infringe or misappropriate a Third Party’s intellectual
property.

ARTICLE 6.
MANUFACTURING.
6.1.
Quality Agreement. The Parties will meet to negotiate in good faith and agree on
quality analysis and control criteria for the Manufacture of the Shared Product
within [***] after the effective date of the Joint Development &
Commercialization Agreement. The agreed upon criteria will be set forth in a
quality agreement containing mutually agreed terms and conditions that are
customary for agreements of this type.

6.2.
Working Group. The Parties will establish a manufacturing working group (the
“Manufacturing Working Group”) to oversee matters relating to the Manufacture of
the Shared Product. The Manufacturing Working Group will report to the JDC for
Development-related Manufacturing matters and will report to the JCC for
Commercialization-related Manufacturing matters. The Manufacturing Working
Group’s responsibilities will include: (a) developing plans to transfer
Manufacturing-related Know-How between the Parties as needed to facilitate the
Manufacture of the Shared Product; (b) establishing standards applicable to each
Party’s Manufacturing activities and reviewing each Party’s performance against
such standards; conducting technical reviews, and (c) sharing planning and
budgeting information with the JDC and JCC.

6.3.
Responsibility. The Parties will share responsibility for Manufacturing clinical
supplies of Shared Product as determined by the Manufacturing Working Group.
Unless otherwise agreed by the Parties, Vertex will be responsible for
Manufacturing commercial supplies of Shared Product.

ARTICLE 7.
ALLOCATION OF NET PROFIT AND NET LOSS.
7.1.
Allocation. Each Party will be entitled to 50% of the Net Profits or will bear
50% of the Net Loss, as applicable, during the term of the Joint Development &
Commercialization Agreement. If either Party elects to Opt-Out (as defined
below), the other Party shall pay royalties in accordance with Section 11.4.

7.2.
Calculation. Net Profit or Net Loss will be calculated for each Calendar Quarter
by determining the [***] and subtracting [***].

7.3.
Payment of Expenses; Summary Statements. Subject to reconciliation as provided
in Section 7.4, the Party initially incurring Program Expenses will be
responsible for and pay for all such Program Expenses so incurred. Each Party
will maintain the books and records referred to in Section 7.6 and will accrue
all Program Expenses and Net Sales) in accordance

SCHEDULE G

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with the terms and conditions hereof and in accordance with GAAP. Within [***]
after the end of each [***], each Party will submit to the other a non-binding,
good faith estimate of the Program Expenses accrued and Net Sales during the
just-ended [***].  Within [***] after the end of each [***], each Party will
submit to the other a written report reflecting the accrual of Program Expenses
and Net Sales during the just-ended [***], except that each Party’s submission
for the last month of such [***] will be a good faith estimate and not actual
amounts (each, a “Summary Statement”). Each Summary Statement (after the initial
Summary Statement) will reflect an adjustment for the actual amount of the
previous [***] as needed. Any reporting and reconciliation of variances between
estimated and actual costs and expenses may be delayed by a [***] as reasonably
necessary in light of a Party’s internal reporting procedures. The Parties’
respective Summary Statements will serve as the basis of the Reconciliation
Reports prepared by the Parties pursuant to Section 7.4. Upon the request of
either Party from time to time, the Parties’ respective finance departments,
coordinated by the JDC, or JCC, as appropriate, will discuss any questions or
issues arising from the Summary Statements, including the basis for the accrual
of specific Program Expenses.
7.4.
Reconciliation. Vertex will prepare a reconciliation report, as soon as
practicable after the receipt of CRISPR’s Summary Statement, but in any event
within [***] after the end of each [***], accompanied by reasonable supporting
documents and calculations sufficient to support each Party’s financial
reporting obligations, independent auditor requirements and obligations under
the Sarbanes-Oxley Act, which reconciles the amounts accrued and reported in
each Party’s Summary Statement during such [***] and the share of the Net
Profits and Net Losses to be allocated to each of the Parties for such [***] in
accordance with Section 7.1 (such report, the “Reconciliation Report”). Payment
to reconcile Net Profit or Net Loss shall be made by the owing Party to the
other Party within [***] after such Reconciliation Report is complete.

7.5.
Cost Overruns. If a Party’s aggregate Development Costs, Medical Affairs Costs
or Commercialization Costs in any Calendar Year are likely to exceed or exceed
those set forth in the Development Budget, Medical Affairs Budget or
Commercialization Budget, as applicable, for all of its activities under the
Development Plan, Medical Affairs Plan or Commercialization Plan, as applicable,
in such Calendar Year by up to [***] of the aggregate amount set forth in the
Development Budget, Medical Affairs Budget or Commercialization Budget, as
applicable, such Party will provide the other Party with an explanation for such
excess costs and expenses, and such excess costs and expenses will be included
in the Development Costs, Medical Affairs Cost or Commercialization Costs, as
applicable, and shared by the Parties as provided herein. To the extent a
Party’s aggregate Development Costs, Medical Affairs Costs or Commercialization
Costs, as applicable, exceed those set forth in the Development Budget, Medical
Affairs Budget or Commercialization Budget, as applicable, by more than [***],
unless otherwise agreed by the Parties, such Expenses will not be shared by the
Parties and the Party incurring such Expenses will be solely responsible for
such Expenses.

7.6.
Books and Records. Each Party will keep and maintain accurate and complete
records regarding Program Expenses and Net Sales, during the [***] preceding
Calendar Years. Upon [***] prior written notice from the other Party (the
“Auditing Party”), the Party

SCHEDULE G

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required to maintain such records (as applicable, the “Audited Party”) will
permit an independent certified public accounting firm of internationally
recognized standing, selected by the Auditing Party and reasonably acceptable to
the Audited Party, to examine the relevant books and records of the Audited
Party and its Affiliates, as may be reasonably necessary to verify the Summary
Statements and Reconciliation Reports. An examination by the Auditing Party
under this Section 7.6 will occur not more than [***] in any Calendar Year and
will be limited to the pertinent books and records for any Calendar Year ending
not more than [***] before the date of the request. The accounting firm will be
provided access to such books and records at the Audited Party’s facility or
facilities where such books and records are normally kept and such examination
will be conducted during the Audited Party’s normal business hours. The Audited
Party may require the accounting firm to sign a customary non-disclosure
agreement before providing the accounting firm access to its facilities or
records. Upon completion of the audit, the accounting firm will provide both the
Auditing Party and the Audited Party a written report disclosing whether the
applicable Summary Statements and Reconciliation Reports are correct or
incorrect and the specific details concerning any discrepancies. No other
information will be provided to the Auditing Party. If the report or information
submitted by the Audited Party results in an underpayment or overpayment, the
Party owing underpaid or overpaid amount will promptly pay such amount to the
other Party, and, if, as a result of such inaccurate report or information, such
amount is more than [***] of the amount that was owed the Audited Party will
reimburse the Auditing Party for the reasonable expense incurred by the Auditing
Party in connection with the audit.
ARTICLE 8.
ADVERSE EVENTS.
8.1.
Pharmacovigilance Agreement. The Parties will meet to negotiate in good faith
and agree on processes and procedures for sharing safety information within
[***] after the effective date of the Joint Development & Commercialization
Agreement. The agreed upon processes and procedures will be set forth in a
pharmacovigilance agreement (the “Pharmacovigilance Agreement”) containing
mutually agreed terms and conditions that are customary for agreements of this
type. The Pharmacovigilance Agreement will include provisions establishing a
joint safety oversight working group to oversee the conduct of the Parties’
activities under the Pharmacovigilance Agreement and to coordinate the Parties’
interactions with respect to pharmacovigilance activities.

8.2.
Global Safety Database. The JCC will establish pharmacovigilance and safety
strategy for the Shared Product. Pursuant to such strategy, Vertex will
establish the global safety database for such Shared Product. Vertex will
maintain a global database of safety information including, but not limited to,
adverse events and pregnancy reports for such Shared Product, which will be used
for regulatory reporting and responses to safety queries from Regulatory
Authorities by both Parties. CRISPR will, and will cause its Affiliates to,
transfer all adverse events information in its or their possession or control to
the global safety database within a mutually agreed period of time that provides
Vertex with sufficient time to enter all of the data and to obtain validation of
the database.

SCHEDULE G

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8.3.
Risk Management and Signal Detection Activities. Vertex shall be primarily
responsible for all signal detection and risk management activities for Shared
Products. These signal detection activities shall include, but are not limited
to, proactive review and evaluation of all safety information from the Global
Safety Database (including by way of example, Individual Case Safety Reports,
aggregate safety information, literature reports, and non-clinical data).

ARTICLE 9.
SUBCONTRACTING
Each Party may subcontract the performance of any activities undertaken by such
Party in accordance with the Global Development Plan, Medical Affairs Plan or
Commercialization Plan to one or more Third Parties (each such Third Party, a
“Subcontractor”) pursuant to a written agreement (a “Subcontract”).
Notwithstanding the foregoing, if either Party desires to subcontract any such
activities, it will first discuss the matter with the other Party and reasonably
consider using the other Party for such subcontracted activities, taking into
account the capabilities of the other Party and potential impact on costs, as a
potential alternative to subcontracting such activities to a Third Party. If,
following such discussion a Party still desires to subcontract the performance
of any such activity to one or more Third Parties, it may proceed to do so;
provided, that prior to entering into any Subcontract which the subcontracting
Party reasonably anticipates will entail payments to the Subcontractor in excess
of [***] with respect to subcontracted activities under the Joint Development &
Commercialization Agreement, the subcontracting Party will obtain the JSC’s
approval, not to be unreasonably withheld, of use of the proposed Subcontractor
to conduct the activities proposed to be subcontracted prior to execution of the
applicable Subcontract.

ARTICLE 10.
LICENSES; IP
10.1.
License Grants. Vertex will grant CRISPR a co-exclusive (with Vertex) license
under Vertex’s and its Affiliates’ interest in the Licensed Vertex Know-How and
Licensed Vertex Patents, with the right to Sublicense through multiple tiers
(subject to Section 10.2), to Research, Develop, Manufacture, have Manufactured,
use, keep, sell, offer for sale, import, export and Commercialize Shared
Products in the Field in the Territory. Additionally, the license rights granted
by CRISPR to Vertex under Section 5.3.1 of the Agreement will be modified to be
co-exclusive (with CRISPR) for Shared Products in the Territory.

10.2.
Sublicensing. Subject to the rights granted or retained by the Parties under the
Joint Development & Collaboration Agreement, either Party may Sublicense
(through multiple tiers) to its Affiliates or Third Parties any and all rights
granted to it by the other Party or retained by such Party with respect to the
Research, Development, Manufacture and Commercialization of the Shared Products;
provided, that neither Party may grant any such Sublicense in a Major Market
Country without the prior written consent of the other Party; and provided,
further, that if either Party intends to Sublicense any such rights in any
country, it will discuss the matter with the Other Party and in good faith
consider using the Other Party to conduct any sublicensed activities. If a Party
grants any such Sublicense it will

SCHEDULE G

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remain responsible for its obligations under the Joint Development &
Commercialization Agreement and will be responsible for the performance of the
relevant sublicensee.
10.3.
[***]. If a Party believes, in its reasonable judgment, that it may be necessary
to obtain rights under any [***] in order to Research, Develop, Manufacture or
Commercialize a Shared Product in the Field, such Party will promptly notify the
other Party and the Parties will discuss such matter in good faith. Unless
otherwise agreed, [***] will have the first right to enter into a license with
the relevant Third Party to acquire rights to the [***]. If the Parties are
unable to agree on whether any Know-How or Patents are [***], the Party that
believes such rights are necessary may enter into a license with the relevant
Third Party; provided, that [***] unless and until the other Party agrees, or as
determined by arbitration or other dispute resolution mechanisms to [***].

10.4.
Trademarks. The Lead Commercialization Party will own and retain all rights to
Trademarks for Shared Products in their respective jurisdiction, and all
goodwill associated with or attached thereto arising out of the use thereof by
the Parties, their Affiliates and Sublicensees will inure to the benefit of such
Lead Commercialization Party. Each non-Lead Commercialization Party, on behalf
of itself and its Affiliates, will assign to the Lead Commercialization Party or
its relevant Affiliate all right, title and interest in and to such Shared
Product Trademarks and goodwill in the relevant jurisdiction. The non-Lead
Commercialization Party will not contest, oppose or challenge the Lead
Commercialization Party’s ownership of such Shared Product Trademarks in the
relevant jurisdiction. The Lead Commercialization Party will own rights to any
Internet domain names incorporating any Trademark for the Shared Product, or any
variation or part of any such Trademark, as its URL address or any part of such
address in the applicable jurisdiction. The Lead Commercialization Party will
use Commercially Reasonable Efforts to register, maintain and enforce the
Trademarks for the Shared Product in the relevant jurisdiction.

ARTICLE 11.
TERM; TERMINATION.
11.1.
Term. The term of the Joint Development & Commercialization Agreement will
commence on the execution of the Joint Development & Commercialization Agreement
and continue in full force and effect until there is no longer a Global
Development Plan or Commercialization Plan contemplating Development or
Commercialization of a Shared Product in the Territory, unless earlier
terminated as provided below.

11.2.
Termination Generally. The provisions of Sections 11.2.1, 11.2.3, 11.2.4 and
11.2.5 of the Agreement will apply to the Joint Development & Commercialization
Agreement, mutatis mutandis.

11.3.    Alternative Remedies. The alternative remedy provisions of Section 11.3
of the
Agreement will not apply to Hemoglobinopathy Targets or [***] or to the Joint
Development & Commercialization Agreement.
11.4.
Opt-Out. After [***] for a Shared Product directed to a particular Collaboration
Target, either Party may opt out of the Joint Development & Commercialization
Agreement for all Shared Products directed to such Collaboration Target upon
[***] notice to the other Party (“Opt-Out”). The other Party shall pay such
opting out Party royalties (“Opt-Out

SCHEDULE G

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Royalties”) in accordance with this Section 11.4 and the terms of Sections
7.5.2, 7.5.3, 7.5.4 and 7.5.5 of the Strategic Collaboration Option and License
Agreement shall apply to such royalties, mutatis mutandis. The applicable
royalty rates shall be determined in accordance with the table set forth below
based on the timing of the Opt-out Notice. Upon the other Party’s receipt of
such notice, all rights and obligations under the Joint Development &
Commercialization Agreement with respect to Shared Products directed to such
Collaboration Target shall terminate. If the opting out Party is CRISPR, such
Shared Product(s) shall be deemed Product(s) directed to a Collaboration Target
other than a Hemoglobinopathy Target [***] under the Strategic Collaboration,
Option and License Agreement, and the terms and conditions of such agreement
shall apply with respect to all Products directed to the opted out Collaboration
Target; provided, that in lieu of the royalty rates payable under Section 7.5.1
of such agreement Vertex shall pay royalties at the rates set forth in this
Section 11.4. If the opting out Party is Vertex, the Parties shall negotiate in
good faith a termination agreement for all Products directed to such opted out
Collaboration Target, including, without limitation, reasonable diligence
obligations and obligations of CRISPR for sharing of information regarding such
Products with Vertex, which obligations will be substantially similar to the
obligations imposed by Vertex under the Joint Development & Commercialization
Agreement. For the avoidance of doubt, the allocation of Net Profits and Net
Loss pursuant to Section 7.1 shall terminate upon the Opt-Out.

Timing of Opt Out
Net Sales (in Dollars) for such Shared Products in the Territory
Opt-Out Royalty Rates as a Percentage (%) of Net Sales of such Shared Products
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]

SCHEDULE G

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ARTICLE 12.
INDEMNITY
The Joint Development & Commercialization Agreement will include commercially
reasonable indemnity provisions, which will include (but not be limited to) an
obligation for each Party to indemnify the other Party from, against and in
respect of any and all Liability incurred or suffered by the other Party to the
extent resulting from: (a) any breach of, or inaccuracy in, any representation
or warranty made by the indemnifying Party, or any breach or violation by the
indemnifying Party of any covenant or agreement in the Joint Development &
Commercialization Agreement; or (b) the negligence or intentional misconduct of,
or violation of Applicable Law (including off-label promotion) by, the
indemnifying Party, any of its Affiliates or Sublicensees, or any of their
respective directors, officers, employees and agents, in performing its
obligations or exercising its rights under the Joint Development &
Commercialization Agreement.

SCHEDULE G

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Schedule H
CRISPR In-License Agreements

Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. A total of 1 page was omitted. [***]

SCHEDULE H

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Schedule I
Baseball Arbitration Procedures
Selection of Baseball Expert and Submission of Positions. The Parties will
select and agree upon a mutually acceptable independent Third Party expert who
is neutral, disinterested and impartial, and has the experience specified in
Schedule G for the applicable dispute (the “Baseball Expert”). If the Parties
are unable to mutually agree upon a Baseball Expert within [***] following the
delivery of the request for Baseball Arbitration, then upon request by either
Party, the Baseball Expert will be an arbitrator appointed by Judicial and
Mediation Services (“JAMS”), which arbitrator need not have the above-described
experience. Once the Baseball Expert has been selected, each Party will within
[***] following selection of the Baseball Expert provide the Baseball Expert and
the other Party with a written report setting forth its position with respect to
the substance of the dispute and may submit a revised or updated report and
position to the Baseball Expert within [***] of receiving the other Party’s
report. If so requested by the Baseball Expert, each Party will make oral
submissions to the Baseball Expert based on such Party’s written report, and
each Party will have the right to be present during any such oral submissions.
JAMS Supervision. In the event the Baseball Expert is a JAMS arbitrator selected
by JAMS as provided in this Schedule I, the matter will be conducted as a
binding arbitration in accordance with JAMS procedures, as modified by this
Schedule I (including that the arbitrator will adopt as his or her decision the
position of one Party or the other, as described below). In such event, the
arbitrator may retain a Third Party expert with the same experience specified in
Schedule F for the Baseball Expert to assist in rendering such decision, and the
expenses of any such expert will be shared by the Parties as costs of the
arbitration as provided in this Schedule I.
Determination by the Baseball Expert. The Baseball Expert will, no later than
[***] after the last submission of the written reports and, if any, oral
submissions, select one of the Party’s positions as his or her final decision,
and will not have the authority to modify either Party’s position or render any
substantive decision other than to so select the position of either Party as set
forth in their respective written report (as initially submitted, or as revised
in accordance with this Schedule I, as applicable). The decision of the Baseball
Expert will be the sole, exclusive and binding remedy between them regarding the
dispute submitted to such Baseball Expert.
Location; Costs. Unless otherwise mutually agreed upon by the Parties, the
in-person portion (if any) of such proceedings will be conducted in Boston,
Massachusetts. [***].
Timetable for Completion in [***]. The Parties will use, and will direct the
Baseball Expert to use, commercially reasonable efforts to resolve a dispute
within [***] after the selection of the Baseball Expert, or if resolution within
[***] is not reasonably achievable, as determined by the Baseball Expert, then
as soon thereafter as is reasonably practicable.

SCHEDULE I

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Schedule J
Identified Third Party IP

U.S. Patent No.
U.S. Patent Application No.
Filing Data
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]

SCHEDULE J

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Schedule K

Patent Costs

 
Prior to Option Exercise
After Option Exercise
CRISPR Platform Technology Patents
[***]
[***]
CRISPR Background Patents
[***]
[***]
CRISPR Program Patent
[***]
[***]
[***] Patents
[***]
[***]
[***] Patents
[***]
[***]
[***] Joint Program Patents
[***]
[***]
Other Joint Program Patent
[***]
[***]
[***] Joint Program Patents
[***]
[***]

*Either Party may decline to pay its share of costs for Prosecuting and
Maintaining any Other Joint Program Patents in a particular country or
particular countries, in which case, the declining Party will, and will cause
its Affiliates to, assign to the other Party (or, if such assignment is not
possible, grant a fully-paid exclusive license in) all of their rights, titles
and interests in and to such Other Joint Program Patents.

SCHEDULE K

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Schedule L
CRISPR Disclosures
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. A total of 6 pages were omitted. [***]

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

Schedule M
Press Release

SCHEDULE M

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Vertex and CRISPR Therapeutics Establish Collaboration to Use CRISPR- Cas9 Gene
Editing Technology to Discover and Develop New Treatments for Genetic Diseases

-Gene editing technology to be used to discover treatments to address the
mutations and genes known to cause and contribute to cystic fibrosis-

-Vertex and CRISPR to utilize gene editing approach to discover treatments for
genetic diseases, including sickle cell disease-

-Companies establish four-year research collaboration; CRISPR to receive $105
million up- front payment, of which $30 million is an equity investment, with
potential for additional milestones and royalty payments-

BOSTON AND CAMBRIDGE, MASS – October XX, 2015 - Vertex Pharmaceuticals
Incorporated (Nasdaq: VRTX) and CRISPR Therapeutics today announced that the two
companies have entered into a strategic research collaboration focused on the
use of CRISPR’s gene editing technology, known as CRISPR-Cas9, to discover and
develop potential new treatments aimed at the underlying genetic causes of human
disease. The collaboration will evaluate the use of CRISPR-Cas9 across multiple
diseases where targets have been validated through human genetics. Vertex and
CRISPR will focus their initial gene editing research on discovering treatments
to address the mutations and genes known to cause and contribute to cystic
fibrosis and sickle cell disease. Vertex and CRISPR will also evaluate a
specified number of other genetic targets as part of the collaboration. Vertex
will have exclusive rights to license up to six new CRISPR-Cas9-based treatments
that emerge from the collaboration. As part of the collaboration, Vertex made an
up-front commitment of $105 million to CRISPR, including $75 million in cash and
a $30 million equity investment. CRISPR is also eligible to receive future
development, regulatory and sales milestones and royalty payments on future
sales.

“CRISPR-Cas9 is an important scientific and technological breakthrough that
holds significant promise for the future discovery of potentially transformative
treatments for many genetic diseases,” said David Altshuler, M.D., Ph.D.,
Vertex’s Executive Vice President, Global Research and Chief Scientific Officer.
“As a company founded on innovative science, we’re

SCHEDULE M

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excited to begin this collaboration with CRISPR, as it puts us at the forefront
of what we believe may be a fundamental change in the future treatment of
disease -- using gene editing technologies to address the underlying genetic
causes of many diseases.”

“Vertex has a track record of developing innovative medicines for cystic
fibrosis and other serious diseases, making them a great partner to accelerate
the therapeutic promise of gene editing,” said Rodger Novak, M.D., Chief
Executive Officer of CRISPR Therapeutics. “For CRISPR, this collaboration
validates the potential for gene editing in human therapeutics and provides
important financial support for continued investment in our platform and
proprietary pipeline of programs.”

About the Collaboration

Under the terms of the collaboration, Vertex and CRISPR will jointly use the
CRISPR-Cas9 technology to discover and develop potential new treatments that
correct defects in specific gene targets known to cause or contribute to
particular diseases. The initial focus of the collaboration will be on the use
of CRISPR-Cas9 to potentially correct the mutations in the cystic fibrosis
transmembrane conductance regulator (CFTR) gene known to result in the defective
protein that causes CF and to edit other genes that contribute to the disease.
Additionally, the companies will seek to discover and develop gene-based
treatments for hemoglobinopathies, including sickle cell disease. Additional
discovery efforts focused on a specified number of other genetic targets will
also be conducted under the collaboration. Discovery activities will be
conducted primarily by CRISPR, and the related expenses will be fully funded by
Vertex. Vertex has the option to an exclusive license for up to six gene-based
treatments that emerge from the four-year research collaboration. Vertex will
fund 100 percent of the development expenses of licensed treatments. For each of
the up to six treatments in-licensed for development, Vertex will pay future
development, regulatory and sales milestones of up to $420 million as well as
royalty payments on future sales.

Vertex and CRISPR will collaborate on the research, development and
commercialization of treatments for hemoglobinopathies that emerge from the
collaboration. Specifically for hemoglobinopathies, including treatments for
sickle cell disease, Vertex and CRISPR will equally share all research and
development costs and sales, with CRISPR Therapeutics leading commercialization
efforts in the U.S. For all other diseases, Vertex will lead all development and
global commercialization activities.

Vertex will pay CRISPR $75 million in cash as part of its up-front commitment.
Vertex will also provide a $30 million investment in CRISPR, which is a private
company. The investment will

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provide Vertex with an ownership stake in CRISPR. The collaboration also
provides Vertex with an observer seat on the CRISPR Board of Directors, which
will be filled by Dr. Altshuler.

About Gene Editing with CRISPR-Cas9

“CRISPR” refers to Clustered Regularly Interspaced Short Palindromic Repeats
that occur in the genome of certain bacteria, from which the system was
discovered. Cas9 is a CRISPR- associated endonuclease (an enzyme) known to act
as the “molecular scissors” that cut and edit, or correct, disease-associated
DNA in a cell. A guide RNA directs the Cas9 molecular scissors to the exact site
of the disease-associated mutation. Once the molecular scissors make a cut in
the DNA, additional cellular mechanisms and exogenously added DNA will use the
cell’s own machinery and other elements to specifically ‘repair’ the DNA. This
technology may offer the ability to directly modify or correct the underlying
disease-associated changes in the human genome for the potential treatment of a
large number of both rare and common diseases.

Emmanuelle Charpentier, Ph.D., one of CRISPR Therapeutics’ scientific founders,
co-invented the CRISPR-Cas9 technology and is the recipient of multiple
prestigious awards in recognition of the potential contribution that the
CRISPR-Cas9 technology may have on global health. The other scientific
co-founders of CRISPR are Craig Mello, Ph.D., Chad Cowan, Ph.D., Matthew
Porteus, M.D., Ph.D., and Daniel Anderson, Ph.D.

About Vertex

Vertex is a global biotechnology company that aims to discover, develop and
commercialize innovative medicines so people with serious diseases can lead
better lives. In addition to our clinical development programs focused on cystic
fibrosis, Vertex has more than a dozen ongoing research programs aimed at other
serious and life-threatening diseases.

Founded in 1989 in Cambridge, Mass., Vertex today has research and development
sites and commercial offices in the United States, Europe, Canada and Australia.
For five years in a row, Science magazine has named Vertex one of its Top
Employers in the life sciences. For
additional information and the latest updates from the company, please visit
www.vrtx.com.

About CRISPR Therapeutics

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The mission of CRISPR Therapeutics is to develop transformative gene-based
medicines for patients with serious diseases. Our therapeutic approach aims to
cure diseases at the molecular level using the breakthrough gene editing
technology called CRISPR-Cas9. With our multi- disciplinary team of
world-renowned academics, drug developers and clinicians, we are uniquely
positioned to translate CRISPR-Cas9 technology into human therapeutics. We have
licensed the foundational CRISPR-Cas9 patent estate for human therapeutic use
from our scientific founder, Dr. Emmanuelle Charpentier. We are headquartered in
Basel, Switzerland, our R&D operations are in Cambridge, Massachusetts and we
have corporate offices in London, United Kingdom. www.crisprtx.com

Special Note Regarding Forward-looking Statements
This press release contains forward-looking statements as defined in the Private
Securities Litigation Reform Act of 1995, including, without limitation, Dr.
Altshuler’s statements in the second paragraph of the press release, Dr. Novak’s
statements in the third paragraph of the press release and the information
provided regarding the future development of treatments for genetic diseases
using the CRISPR-Cas9 technology. While Vertex believes the forward-looking
statements contained in this press release are accurate, these forward-looking
statements represent the company's beliefs only as of the date of this press
release and there are a number of factors that could cause actual events or
results to differ materially from those indicated by such forward-looking
statements. Those risks and uncertainties include, among other things, that data
may not support further development of the gene-based treatments subject to the
collaboration due to safety, efficacy or other reasons, and other risks listed
under Risk Factors in Vertex's annual report and quarterly reports filed with
the Securities and Exchange Commission and available through the company's
website at www.vrtx.com. Vertex disclaims any obligation to update the
information contained in this press release as new information becomes
available.

(VRTX-GEN)

Vertex Pharmaceuticals Incorporated

Investors:
Michael Partridge, 617-341-6108 or
Kelly Lewis, 617-961-7530 or
Eric Rojas, 617-961-7205

or

Media: mediainfo@vrtx.com

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Zach Barber: 617-341-6992

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CRISPR MEDIA CONTACTS:

MacDougall Biomedical Communications

Kari Watson in US – kwatson@macbiocom.com +1 (781) 235-3060

Anca Alexandru in Europe – aalexandru@macbiocom.com +49 (89) 2424-3494