Exhibit 10.1


 


Confidential Treatment Requested


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


 


 


LICENSE,
DEVELOPMENT AND COMMERCIALIZATION AGREEMENT


 


 


between


 


Vertex
Pharmaceuticals Incorporated


 


 


and


 


Mitsubishi
Pharma Corporation


 





















 


Information redacted
pursuant to a confidential treatment request. 
An unredacted version of this

exhibit has been filed separately with the Commission


 


TABLE OF CONTENTS


 


	
  ARTICLE
  I — DEFINITIONS

  	
  1

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  II — LICENSE

  	
  9

  
	
   

  	
   

  	
   

  
	
  2.1

  	
  Grant to MITSUBISHI

  	
  9

  
	
  2.2

  	
  Competing Product

  	
  10

  
	
  2.3

  	
  Grant to VERTEX

  	
  10

  
	
  2.4

  	
  Transfer of Know-How

  	
  11

  
	
  2.5

  	
  No Implied Rights

  	
  11

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  III — DEVELOPMENT

  	
  11

  
	
   

  	
   

  	
   

  
	
  3.1

  	
  Joint Development
  Committee

  	
  11

  
	
  3.2

  	
  Development Plans

  	
  13

  
	
  3.3

  	
  Development
  Costs

  	
  15

  
	
  3.4

  	
  [***]

  	
  16

  
	
  3.5

  	
  Data Transfer

  	
  16

  
	
  3.6

  	
  Regulatory Matters

  	
  18

  
	
  3.7

  	
  Conduct of the
  Development Activities

  	
  19

  
	
  3.8

  	
  Ownership of Technology

  	
  20

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  IV — MANUFACTURE AND SUPPLY

  	
  20

  
	
   

  	
   

  	
   

  
	
  4.1

  	
  Supply of Bulk Drug
  Substance and Drug Product for Development

  	
  20

  
	
  4.2

  	
  Supply of Bulk Drug
  Substance and Drug Product for Commercial Purposes

  	
  21

  
	
  4.3

  	
  Limitation on Supply
  Obligation

  	
  21

  
	
  4.4

  	
  Second Source of Supply
  for Bulk Drug Substance

  	
  22

  
	
  4.5

  	
  Manufacturing
  Technology

  	
  22

  
	
  4.6

  	
  Packaging

  	
  22

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  V — COMMERCIALIZATION

  	
  23

  
	
   

  	
   

  	
   

  
	
  5.1

  	
  Global Marketing and
  Sales

  	
  23

  
	
  5.2

  	
  Co-Labeling

  	
  23

  
	
  5.3

  	
  Trademarks

  	
  23

  
	
  5.4

  	
  Due Diligence

  	
  23

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VI — PAYMENTS

  	
  24

  
	
   

  	
   

  	
   

  
	
  6.1

  	
  License Fee

  	
  24

  
	
  6.2

  	
  Milestone Payments by
  MITSUBISHI

  	
  24

  
	
  6.3

  	
  Commercial Supply of
  Drug Product

  	
  26

  
	
  6.4

  	
  Production of Bulk Drug
  Substance by MITSUBISHI

  	
  26

  
	
  6.5

  	
  Royalties on Net Sales
  of Drug Product; Sales Reports

  	
  27

  
	
  6.6

  	
  Withholding Tax

  	
  29

  
	
  6.7

  	
  Currency of Payment

  	
  29

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VII — TECHNOLOGY

  	
  30

  
	
   

  	
   

  	
   

  
	
  7.1

  	
  Ownership

  	
  30

  
	
  7.2

  	
  Patent Procurement and
  Maintenance

  	
  30

  
	
  7.3

  	
  Costs

  	
  31

  



 


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Information redacted pursuant to
a confidential treatment request.  An
unredacted version of this

exhibit has been filed separately with the Commission


 


	
  7.4

  	
  Infringement Claims by
  Third Parties

  	
  32

  
	
  7.5

  	
  Infringement Claims
  against Third Parties

  	
  33

  
	
  7.6

  	
  Patent Term Extensions

  	
  34

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VIII — REPRESENTATIONS AND WARRANTIES

  	
  34

  
	
   

  	
   

  	
   

  
	
  8.1

  	
  Representations and
  Warranties of VERTEX

  	
  34

  
	
  8.2

  	
  Representations and
  Warranties of MITSUBISH

  	
  35

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  IX — CONFIDENTIALITY

  	
  35

  
	
   

  	
   

  	
   

  
	
  9.1

  	
  Undertaking

  	
  35

  
	
  9.2

  	
  Exceptions

  	
  37

  
	
  9.3

  	
  Publicity

  	
  37

  
	
  9.4

  	
  Survival

  	
  38

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  X — DISPUTE RESOLUTION

  	
  38

  
	
   

  	
   

  	
   

  
	
  10.1

  	
  Governing Law and
  Jurisdiction

  	
  38

  
	
  10.2

  	
  Dispute Resolution
  Process

  	
  38

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  XI — TERM AND TERMINATION

  	
  39

  
	
   

  	
   

  	
   

  
	
  11.1

  	
  Term

  	
  39

  
	
  11.2

  	
  Termination for Cause

  	
  40

  
	
  11.3

  	
  Termination for
  Bankruptcy

  	
  40

  
	
  11.4

  	
  Termination by
  MITSUBISHI

  	
  40

  
	
  11.5

  	
  Effect of Termination

  	
  41

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  XII — INDEMNIFICATION

  	
  42

  
	
   

  	
   

  	
   

  
	
  12.1

  	
  Indemnification by VERTEX

  	
  42

  
	
  12.2

  	
  Indemnification by
  MITSUBISHI

  	
  42

  
	
  12.3

  	
  Claims Procedures

  	
  43

  
	
  12.4

  	
  Limitation of Liability

  	
  44

  
	
  12.5

  	
  Insurance

  	
  44

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  XIII — MISCELLANEOUS PROVISIONS

  	
  44

  
	
   

  	
   

  	
   

  
	
  13.1

  	
  Waiver

  	
  44

  
	
  13.2

  	
  Force Majeure

  	
  44

  
	
  13.3

  	
  Registration of License

  	
  45

  
	
  13.4

  	
  Severability

  	
  45

  
	
  13.5

  	
  Government Acts

  	
  45

  
	
  13.6

  	
  Government Approvals

  	
  45

  
	
  13.7

  	
  Assignment; Successors
  and Assigns

  	
  46

  
	
  13.8

  	
  Export Controls

  	
  46

  
	
  13.9

  	
  Affiliates

  	
  46

  
	
  13.10

  	
  Counterparts

  	
  47

  
	
  13.11

  	
  No Agency

  	
  47

  
	
  13.12

  	
  Notice

  	
  47

  
	
  13.13

  	
  Headings

  	
  47

  
	
  13.14

  	
  Entire Agreement

  	
  47

  
	
  13.15

  	
  Rules of
  Construction

  	
  48

  



 


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Information redacted pursuant to a confidential
treatment request.  An unredacted version
of this

exhibit has been filed separately with the Commission.


 


LICENSE, DEVELOPMENT AND COMMERCIALIZATION
AGREEMENT


 


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


 


INTRODUCTION


 


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


 


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


 


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


 


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


 


ARTICLE I — DEFINITIONS


 


1.1                                    “Affiliate” shall mean, with respect to any Person,
any other Person which controls, is controlled by, or is under direct or
indirect common control with such Person. 
The term “control” means the possession, direct or indirect, of the
power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise.  Control will be presumed if
one Person owns, either of record or beneficially, more than fifty percent (50%)
of the voting stock of any other Person.


 


1.2                                    “Allocable Overhead” shall mean costs incurred by a party or
for its account which are attributable to a party’s costs of supervisory
services, occupancy, payroll, information


 


License, Development and
Commercialization Agreement —Confidential


 





















 


Information redacted
pursuant to a confidential treatment request. 
An unredacted version of this

exhibit has been filed separately with the Commission.


 


systems, human resources
and purchasing, as allocated to company departments based on space occupied,
headcount or activity-based methods, in all cases as determined by such party
in accordance with its accounting standards, including International Accounting
Standards (IAS) and Generally Accepted Accounting Principles (GAAP), applied on
a consistent basis.  Without limitation,
Allocable Overhead shall not include the costs of general corporate activities
including, by way of example, executive management, investor relations,
business development, legal and finance.


 


1.3                                    “Bulk Drug Substance” shall mean a Compound in bulk crystal,
powder, solution or other form suitable for incorporation in a Drug Product,
which if required in order to stabilize the Compound shall be formulated with
stabilizing excipients.


 


1.4                                    “Combination Therapy” shall mean a therapy in which for full
treatment efficacy a Drug Product is clinically and regulatorily required to be
used together with one or more other anti-hepatitis C virus (HCV) agents, such
as interferon products.


 


1.5                                    “Commercial Supply Agreement” shall have the meaning set forth in Section 4.2
hereof.


 


1.6                                    “Competing Product” shall mean any pharmaceutical product
in finished dosage form that contains [***]
(i) that falls within one or more of the claims of the published patent
applications [***] in the
Territory as of the Effective Date, or (ii) that falls within one or more
of the claims of a patent application filed [***]
having the priority date of [***].


 


1.7                                    “Completion” with respect to a Phase II Clinical
Trial or a Phase III Clinical Trial shall mean the finalization of the final
report with respect to such clinical trial.


 


1.8                                    “Compound” shall mean either of VX-950 or VX-905.


 


1.9                                    “Confidential Information” shall have the meaning set forth in Section 9.1.


 


1.10                             “Controlled” shall mean the legal authority or right
of a party to grant a license or sublicense of intellectual property rights to another
party, or to otherwise disclose proprietary or trade secret information to such
other party, without breaching the terms of any agreement with a third party,
misappropriating the proprietary or trade secret information of a third party
or incurring any financial obligation or potential financial obligation to a third
party.


 


1.11                             “Core Development Activities” shall mean:  [***]


 


1.12                             “Core Development Plan” shall have the meaning set forth in Section 3.2.3



 


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Information redacted pursuant to
a confidential treatment request.  An
unredacted version of this

exhibit has been filed separately with the Commission.


 


hereof.


 


1.13                             “Core Development Costs” shall mean [***]


 


1.14                             “Development Supply Agreement” shall have the meaning set forth in Section 4.1
hereof.


 


1.15                             “Drug Product” shall mean a Compound in finished dosage
form that is prepared from Bulk Drug Substance and is ready for administration
to the ultimate consumer as a pharmaceutical product.


 


1.16                             “Effective Date” shall mean the effective date of this
Agreement as set forth on the first page hereof.


 


1.17                             “FDA” shall mean  the
United States Food and Drug Administration.


 


1.18                             “Field of Use” shall mean the treatment of any human condition,
disorder or disease.


 


1.19                             “First Commercial Sale” shall mean the first sale of a Drug
Product by MITSUBISHI or an Affiliate or sublicensee of MITSUBISHI in a country
in the Territory following Regulatory Approval of the Drug Product in that country,
or if no such Regulatory Approval or similar marketing approval is required,
the date upon which the Drug Product is first sold in such country by
MITSUBISHI or an Affiliate or sublicensee of MITSUBISHI pursuant to a plan of
commercial launch.


 


1.20                             “IND” shall mean the investigational new drug
application relating to the Drug Product filed with the FDA pursuant to 21
C.F.R. Part 312, including any amendments thereto, and equivalent
applications with similar requirements in countries other than the United
States.


 


1.21                             “Indication” shall mean a generally acknowledged
disease, disorder or condition, a significant manifestation of a disease,
disorder or condition, or a symptom associated with a disease, disorder or
condition for which use of a Drug Product is indicated, as would be identified
in the Drug Product’s label under applicable regulations of a Regulatory
Authority.


 


1.22                             “Infringement Claim” shall have the meaning set forth in Section 7.4.1
hereof.


 


1.23                             “Investigational Drug
Product” shall have the meaning set forth in Section 4.1
hereof.


 


1.24                             “JDC” shall have the meaning set forth in Section 3.1
hereof.


 


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Information redacted pursuant to
a confidential treatment request.  An
unredacted version of this

exhibit has been filed separately with the Commission.


 


1.25                             “Joint Know-How” shall have the meaning set forth in Section 7.1 hereof.


 


1.26                             “Joint Patents” shall have the meaning set forth in Section 7.1
hereof.


 


1.27                             “Joint Steering Committee” shall have the
meaning set forth in Section 10.2.1 hereof.


 


1.28                             “Know-How” shall mean all data, technical
information, know-how, inventions, discoveries, trade secrets, processes,
techniques, materials, compositions, methods, formulas or improvements that
relate to the research, development, manufacture, use, sale, offer for sale or
import of any Bulk Drug Substance, Compound, or Drug Product; provided,
however, that the term “Know-How” shall not include VERTEX’s proprietary
and confidential drug discovery platform or techniques.


 


1.29                             “Manufacturing Cost” shall mean the total of all costs
incurred by or on behalf of VERTEX related to the manufacture of a batch or lot
of Bulk Drug Substance, Compound, Drug Product, Investigational Drug Product or
placebo, including direct material and labor, quality assurance/quality control
and analytical costs, depreciation, as well as applicable Allocable Overhead
and Third-Party costs relating to manufacturing, shipping and handling, duty, and
insurance.


 


1.30                             “MITSUBISHI Development
Activities” shall
mean all non-clinical and clinical activities performed by or on behalf of MITSUBISHI
or its sublicensees in the Territory with respect to Bulk Drug Substance, a
Compound and/or Drug Product, including non-clinical studies, clinical trials,
formulation research, formulation development, process research, process
development, manufacturing scale-up, analytical method development and validation,
and regulatory activities, in order to obtain Regulatory Approval from a
Regulatory Authority for marketing the corresponding Drug Product in the
Territory for the Indications selected.


 


1.31                             “MITSUBISHI Development Plan” shall have the meaning set forth in Section 3.2.1
hereof.


 


1.32                             “MITSUBISHI Know-How” shall mean all Know-How Controlled by
MITSUBISHI or any of its Affiliates, including any such Know-How invented,
discovered or developed in the conduct of the MITSUBISHI Development Activities.


 


1.33                             “MITSUBISHI Patents” shall mean all Patents Controlled by
MITSUBISHI or any of its Affiliates claiming Bulk Drug Substance, a Compound or
a Drug Product, or a method of making or using Bulk Drug Substance, a Compound
or a Drug Product, or an improvement 


 


4

















 


Information redacted pursuant to
a confidential treatment request.  An
unredacted version of this

exhibit has been filed separately with the Commission.


 


to the subject matter of
a Patent covering any of the foregoing that would be infringed by the research,
development, manufacture, use, sale, offer for sale or import of Bulk Drug
Substance, Compound(s) or Drug Product. 
As of the Effective Date, no MITSUBISHI Patents exist.  Schedule 1.33
hereto will be updated periodically to reflect additions thereto during the
term of this Agreement.


 


1.34                             “MITSUBISHI Technology” shall mean all MITSUBISHI Patents and
all MITSUBISHI Know-How.


 


1.35                             “Monotherapy” shall mean a therapy in which the Drug
Product is used as a sole anti-hepatitis C virus (HCV) agent.


 


1.36                             “Net Sales” shall mean the aggregate amount obtained
by totaling for all countries in the Territory where Drug Products were sold in
a given calendar quarter the Net Sales Price or Prices in such country multiplied
by the total number of units of Drug Products sold in such country at such Net
Sales Price or Prices.


 


1.37                             “Net Sales Price” with respect to a Drug Product shall mean
the gross amount invoiced in a given calendar quarter in a given country for such
unit of the Drug Product sold to Third Parties in bona fide, arms-length
transactions by MITSUBISHI and any MITSUBISHI Affiliate or its sublicensee,
less (i) trade, quantity and/or cash discounts from the invoice price
which are actually allowed or taken; (ii) freight, postage and insurance
included in the invoice price; (iii) amounts repaid or credited by reason
of rejection or return of goods or because of retroactive price reductions
specifically identifiable to the Drug Product; (iv) amounts payable
resulting from governmental (or agency thereof) mandated rebate programs; (v) Third-Party
rebates to the extent actually allowed; (vi) invoiced custom duties and
sales and use taxes (excluding income taxes), if any, actually paid and
directly related to the sale; and (vii) any other specifically
identifiable amounts included in the Drug Product’s invoice price that should
be credited for reasons substantially equivalent to those listed above; all as
determined in accordance with MITSUBISHI’s usual and customary accounting
methods, which are in accordance with the Japanese equivalent of Generally
Accepted Accounting Principles in the United States (GAAP), consistently
applied.


 


(a)                                   In the case of any sale or other disposal
of a Drug Product between or among MITSUBISHI and its Affiliates and
sublicensees for resale, the Net Sales Price shall be calculated as above only
on the value charged or invoiced on the first arm’s-length sale thereafter to a
Third Party;


 


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Information redacted pursuant to
a confidential treatment request.  An
unredacted version of this

exhibit has been filed separately with the Commission.


 


(b)                                   In the case of any sale or other disposal
for value, such as barter or counter-trade, of a Drug Product, or part thereof,
other than in an arm’s-length transaction exclusively for money, the Net Sales
Price shall be calculated as above on the higher of (i) the value of the
consideration received for, or (ii) the fair market price of, the Drug
Product in the country of sale or disposal;


 


(c)                                   If a Drug Product is sold in a finished
dosage form containing the Drug Product in combination with one or more other
active ingredients (a “Combination Product”),
the Net Sales Price of the Drug Product, for the purposes of determining
payments hereunder, shall be determined by multiplying the Net Sales Price (as
defined above in this Section) of the Combination Product by [***]; and


 


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


 


1.38                             “Patents” shall mean all existing Japanese and U.S.
patents and patent applications; all patent applications hereafter filed in
Japan or the United States, including any continuation, continuation-in-part,
division, provisional or any substitute applications; any patent issued with
respect to any such patent applications; any reissue, reexamination, renewal or
extension (including any patent term extension or supplementary protection
certificate) of any such patent; and any confirmation patent or registration
patent or patent of addition based on any such patent; and all foreign
counterparts of any of the foregoing.


 


1.39                             “Person” shall mean any individual, corporation,
partnership, association, joint-stock company, trust, unincorporated
organization or government or political subdivision thereof.


 


1.40                             “Phase I Clinical Trial” shall mean an initial human clinical
trial conducted for inclusion in (i) that portion of the FDA submission
and approval process which provides for initial trials of a Compound in a small
number of subjects to establish the safety profile of the Compound and to
collect initial data on its pharmacokinetics and pharmacological effects, as
more fully defined in 21 C.F.R. § 312.21(a), and (ii) equivalent
submissions with similar requirements in countries other than the United States.


 


1.41                             “Phase Ib Clinical Trial” shall mean an initial repeated dose,
dose escalation Phase I Clinical Trial conducted in a small number of patients
infected with the hepatitis C virus (HCV) to establish the safety profile of
the Compound and to collect additional data on its pharmacokinetics and
pharmacological effects, including antiviral activity.


 


6

















 


Information redacted pursuant to
a confidential treatment request.  An
unredacted version of this

exhibit has been filed separately with the Commission.


 


1.42                             “Phase II Clinical Trial” shall mean a human clinical trial
conducted for inclusion in (i) that portion of the FDA submission and
approval process which provides for trials of a Compound on a limited number of
patients for the purposes of collecting data on dosages, evaluating safety and
collecting preliminary information regarding efficacy in the proposed
therapeutic Indication, as more fully defined in 21 C.F.R. §312.21(b), and (ii) equivalent
submissions with similar requirements in countries other than the United States.


 


1.43                             “Phase IIa Clinical Trial” shall mean an initial Phase II Clinical
Trial in any therapeutic Indication  that
is designed to evaluate safety and to demonstrate a meaningful trend of
efficacy in patients who have the disease or condition that the Compound is
intended to treat.


 


1.44                        “Phase IIb Clinical
Trial” shall mean a Phase II Clinical Trial in any therapeutic Indication that
is designed to determine the doses to
be used in the Phase III Clinical Trials and to evaluate the efficacy/safety
properties of the Compound.


 


1.45                             “Phase III Clinical Trial” shall mean a human clinical trial
conducted for inclusion in (i) that portion of the FDA submission and
approval process which provides for the continued trials of a Compound on
sufficient numbers of patients to generate safety and efficacy data to support
Regulatory Approval in the proposed therapeutic Indication, as more fully
defined in 21 C.F.R. § 312.21(c), and (ii) equivalent submissions
with similar requirements in countries other than the United States.


 


1.46                             “Regulatory Approval” shall mean, with respect to any country,
all authorizations by a Regulatory Authority or other appropriate governmental
entity or entities necessary for commercial marketing and sale of a Drug
Product in that country including, where applicable, approval of labeling,
price, reimbursement and manufacturing.


 


1.47                             “Regulatory Authority” shall mean (i) the FDA or (ii) any
regulatory body with similar regulatory authority in any other jurisdiction
anywhere in the world.


 


1.48                             “Start” shall mean the first dosing of the first
patient with respect to a Phase II Clinical Trial or Phase III Clinical Trial,
or the starting date set forth in the final protocol for the applicable study with
respect to non-clinical studies.


 


1.49                             “Territory” shall mean all countries identified on Schedule 1.49 hereto.


 


1.50                             “Third Party” shall mean any Person that is not a Party
or an Affiliate of any Party.


 


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Information redacted pursuant to
a confidential treatment request.  An
unredacted version of this

exhibit has been filed separately with the Commission.


 


1.51                             “Valid Patent Claim” shall mean either (i) a claim of an
issued and unexpired Patent which has not lapsed, been revoked or abandoned or
held permanently unenforceable or invalid by a decision of a court or other
governmental agency of competent jurisdiction, unappealable or unappealed
within the time allowed for appeal, and which has not been disclaimed, denied
or admitted to be invalid or unenforceable through reissue, reexamination,
disclaimer or otherwise, or (ii) a claim of a pending patent application
which claim was filed in good faith and has not been abandoned or finally
disallowed without the possibility of appeal or refilling of said application.


 


1.52                             “VERTEX Development Activities” shall mean all non-clinical and clinical
activities performed by or on behalf of VERTEX or a VERTEX Licensee in the
VERTEX Territory with respect to Bulk Drug Substance, a Compound, and/or Drug
Product, including non-clinical studies, clinical trials, formulation research,
formulation development, process research, process development, manufacturing
scale-up, analytical method development and validation, and regulatory
activities, in order to obtain Regulatory Approval from a Regulatory Authority
for marketing the corresponding Drug Product in the VERTEX Territory for the
Indications selected.  For the avoidance
of doubt, the Core Development Activities set forth in Section 1.11 shall
be included in the VERTEX Development Activities.


 


1.53                             “VERTEX Development Plan” shall have the meaning set forth in Section 3.2.2
hereof.


 


1.54                             “VERTEX Know-How” shall mean all Know-How Controlled by
VERTEX or any of its Affiliates, including any such Know-How invented, discovered
or developed in the conduct of the VERTEX Development Activities.


 


1.55                             “VERTEX Licensee” shall mean any Person other than
MITSUBISHI to which VERTEX grants a license under the VERTEX Technology.


 


1.56                             “VERTEX Patents” shall mean all Patents Controlled by
VERTEX or any of its Affiliates claiming Bulk Drug Substance, a Compound or a
Drug Product, or a method of making or using Bulk Drug Substance, a Compound or
a Drug Product, or an improvement to the subject matter of a Patent covering
any of the foregoing that would be infringed by the research, development,
manufacture, use, sale, offer for sale or import of Bulk Drug Substance,
Compound(s) or Drug Product.  A list
of VERTEX Patents in the Territory is appended hereto as Schedule 1.56
and will be updated periodically to reflect additions thereto during
the term of this Agreement.  Notwithstanding
the foregoing, any Third-Party patent under which VERTEX 


 


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Information redacted pursuant to
a confidential treatment request.  An
unredacted version of this

exhibit has been filed separately with the Commission.


 


obtains a license
pursuant to Section 7.4.2 hereof shall not be deemed to be a VERTEX
Patent.


 


1.57                             “VERTEX Technology” shall mean all VERTEX Patents and all
VERTEX Know-How.


 


1.58                             “VERTEX Territory” shall mean all countries of the world
except for the countries of the Territory.


 


1.59                             “VX-905” shall mean the compound identified on Schedule 1.59 hereto.


 


1.60                             “VX-950” shall mean the compound identified on Schedule 1.60 hereto.


 


ARTICLE II — LICENSE


 


2.1                                    Grant to MITSUBISHI.


 


2.1.1                      License.  Subject to
the other provisions of this Agreement, VERTEX hereby grants to MITSUBISHI an
exclusive license (or sublicense, as appropriate) in the Territory under the VERTEX
Technology, with the right to sublicense, to exercise its rights and fulfill
its obligations under this Agreement and to develop, manufacture, have
manufactured, use, sell, have sold, offer to sell and import Drug Products and to
import Bulk Drug Substance and use Bulk Drug Substance to manufacture Drug
Products, in each case solely in the Field of Use.  Notwithstanding the foregoing VERTEX shall
retain the right to manufacture and have manufactured the Drug Product in the
Territory for development, use, or sale of the Drug Product in the VERTEX
Territory and for sale of the Drug Product to MITSUBISHI pursuant to this
Agreement.  In addition, in the event
that pursuant to discussions in the JDC it is determined that VERTEX may
conduct clinical trials of the Drug Product in the Territory, notwithstanding
the foregoing license grant, VERTEX shall be allowed to conduct such clinical
trials.  Further, subject to the other provisions
of this Agreement, VERTEX hereby grants to MITSUBISHI a non-exclusive license
(or sublicense, as appropriate) in the VERTEX Territory under the VERTEX Technology,
with the right to sublicense, to manufacture and/or have manufactured the Drug
Product for development, use or sale of the Drug Product in the Territory.


 


2.1.2                      Sublicensees and Subcontractors. 
MITSUBISHI shall notify VERTEX in writing of any sublicense it intends
to grant pursuant to Section 2.1.1 [***].  Notwithstanding the foregoing, MITSUBISHI may
sublicense its rights under the license granted in Section 2.1.1 to any of
its Affiliates, with prior notice to but without the consent of VERTEX.  MITSUBISHI shall 


 


9

















 


Information redacted pursuant to
a confidential treatment request.  An
unredacted version of this

exhibit has been filed separately with the Commission.


 


guarantee and be
responsible to VERTEX for the performance of any of its sublicensees or
subcontractors under any sublicense or other agreement with respect to the
rights granted to MITSUBISHI by VERTEX and the obligations assumed by
MITSUBISHI hereunder.  MITSUBISHI shall
not permit any subcontractors or sublicensees to use VERTEX Technology without
provisions safeguarding confidentiality equivalent to those provided in this
Agreement.  MITSUBISHI shall ensure that
any such provisions allow VERTEX the right to directly enforce the obligations
of confidentiality with respect to VERTEX Technology in the possession of the
subcontractor or sublicensee.


 


2.2                                 Competing Product.  In
the event that VERTEX intends to license rights to develop and/or commercialize
a Competing Product solely in the Territory (rather than as part of a worldwide
license), VERTEX shall discuss with MITSUBISHI in good faith the terms and
conditions for such a license prior to negotiating terms and conditions for
such a license with any Third Party.


 


2.3                                  Grant to VERTEX.


 


2.3.1                  License.  Subject to
the other provisions of this Agreement, MITSUBISHI hereby grants to VERTEX, in
the VERTEX Territory and in those countries in the Territory where VERTEX may
conduct clinical trials of the Drug Product or where VERTEX may manufacture and
have manufactured Drug Product for development, use, or sale in the VERTEX
Territory and for sale to MITSUBISHI pursuant to this Agreement, a
royalty-free, non-exclusive license (or sublicense, as appropriate) under the
MITSUBISHI Technology, with the right to sublicense, to exercise its rights and
fulfill its obligations under this Agreement and, to the extent not
inconsistent with MITSUBISHI’s exclusive rights in the Territory, to research,
develop, manufacture, have manufactured, use, sell, have sold, offer to sell
and import Bulk Drug Substance, Compounds and Drug Products in the Field of
Use.


 


2.3.2                    Sublicensees and Subcontractors.  VERTEX
shall notify MITSUBISHI in writing in advance of granting any sublicenses
pursuant to Section 2.3.1.  VERTEX
shall guarantee and be responsible to MITSUBISHI for the performance of any of
its sublicensees or subcontractors under any sublicense or other agreement with
respect to the rights granted to VERTEX by MITSUBISHI and the obligations
assumed by VERTEX hereunder.  VERTEX
shall not permit any subcontractors or sublicensees to use MITSUBISHI
Technology without provisions safeguarding confidentiality equivalent to those
provided in this Agreement.  VERTEX will
ensure that any such provisions will allow MITSUBISHI the right to directly
enforce the obligations of confidentiality with respect to MITSUBISHI
Technology in the possession of 


 


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Information redacted pursuant to
a confidential treatment request.  An
unredacted version of this

exhibit has been filed separately with the Commission.


 


the subcontractor or sublicensee.


 


2.4                                    Transfer of Know-How. 
Each Party shall deliver to the other all Know-How Controlled by it or
its Affiliates and requested by the other Party from time to time, pursuant to
the exercise by such other Party of any of the licenses granted hereunder.  The Know-How shall be delivered in a form
that reasonably facilitates the use of such Know-How and shall also include
copies of all MITSUBISHI Patents in the VERTEX Territory or all VERTEX Patents
in the Territory, as applicable, and all other manifestations of the
intellectual property licensed hereunder embodied in the Bulk Drug Substance,
Compounds or Drug Products, whether in human or machine readable form.


 


2.5                                    No Implied Rights. 
Except as expressly provided in this Agreement, no right or license to
use any intellectual property of either Party is granted hereunder by
implication or otherwise.


 


ARTICLE III — DEVELOPMENT


 


3.1                                    Joint Development Committee.


 


3.1.1                    Formation and Responsibilities. 
As soon as practicable after the Effective Date, VERTEX and MITSUBISHI
will establish a Joint Development Committee (the “JDC”)
made up of equal numbers of VERTEX and MITSUBISHI personnel to be designated
from time to time by each Party.  Each of
VERTEX and MITSUBISHI shall have one vote on the JDC.  The objective of the JDC shall be to reach
agreement by consensus on all matters falling within its authority hereunder
within the scope of this Agreement.  The
Chairperson of the JDC shall be designated by MITSUBISHI.  Meetings of the JDC other than regularly
scheduled quarterly meetings may be held only if a quorum of [***] representatives of each Party
participates; except that lack of a quorum shall not prevent the scheduling and
conduct of a meeting by either Party after that Party has made good faith but
unsuccessful attempts for more than ninety (90) days to schedule and convene
the meeting.  Semi-annually, the JDC
shall meet face-to-face, alternating between the offices of the Parties, unless
otherwise agreed.   There shall be a
telephonic or video conference meeting of the JDC in each calendar quarter in
which a face-to-face meeting is not held.  
The JDC shall meet as described above, or with such other frequency, and
at such time and location, as may be established by the JDC, for the following
purposes, among others:


 


(i)                                    To review and comment on the MITSUBISHI
Development Plan 


 


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Information redacted pursuant to
a confidential treatment request.  An
unredacted version of this

exhibit has been filed separately with the Commission.


 


as set forth in Section 3.2.1
below;


 


(ii)                                To review and comment on the Core
Development Plan and the VERTEX Development Plan as set forth in Sections 3.2.2
and 3.2.3 below;


 


(iii)                            To receive and review reports by
MITSUBISHI, which shall be prepared and submitted to VERTEX and the JDC no less
than [***] days before each
semi-annual face-to-face meeting,  setting forth
in reasonable detail, with supporting data, the results of work performed
during the preceding six months under the MITSUBISHI Development Plan;


 


(iv)                               To receive and review reports by VERTEX,
which shall be prepared and submitted to MITSUBISHI and the JDC no less than [***] days before each semi-annual
face-to-face meeting,  setting forth
in reasonable detail, with supporting data, the results of work performed
during the preceding six months under the Core Development Plan and the VERTEX
Development Plan;


 


(v)                                   To assist in coordinating scientific
interactions and resolving disagreements between VERTEX and MITSUBISHI with
respect to the development of Compounds;


 


(vi)                               To discuss matters relating to Patents
claiming Bulk Drug Substance, the Compounds or Drug Products, methods of using
or making the same, or improvements to the subject matter of a Patent covering
any of the foregoing, including issues of inventorship and decisions relating to
the filing, prosecution and maintenance of those Patents;


 


(vii)                           To discuss the budget for the Core
Development Activities to be conducted pursuant to the Core Development Plan in
the context of the standards in the pharmaceutical industry;


 


(viii)                       In the event VERTEX has notified the JDC
in writing that VERTEX wishes to conduct clinical trials in the Territory, to
discuss and approve (with such approval not to be unreasonably withheld or
delayed) VERTEX’s conducting such clinical trials in the Territory; and


 


(ix)                              To perform such other functions as
appropriate to further the purposes of this Agreement as mutually determined by
the Parties.


 


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


 


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Information redacted pursuant to
a confidential treatment request.  An
unredacted version of this

exhibit has been filed separately with the Commission.


 


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


 


3.1.2                      Retention of Rights. 
Notwithstanding the foregoing, each Party shall retain the rights,
powers, and discretion expressly granted to it under this Agreement, and the
JDC shall not be delegated or vested with any such rights, powers or discretion
except as expressly provided in this Agreement. 
The JDC shall not have the power to amend or modify this Agreement,
which may only be amended or modified as provided in Section 13.14 hereof.


 


3.1.3                      Decision Making.  If the JDC cannot reach consensus on a matter arising
in connection with the Territory, such matter shall be referred to the Joint
Steering Committee for resolution in accordance with the terms of Section 10.2.1.  If the Joint Steering Committee is unable to
resolve such matter, then MITSUBISHI shall have final authority to make the
ultimate decision with respect thereto. 
If the JDC cannot reach consensus on a matter arising in connection with
the VERTEX Territory, except for the matters set forth in Section 3.2.3, such
matter shall be referred to the Joint Steering Committee for resolution in
accordance with the terms of Section 10.2.1.  If the Joint Steering Committee is unable to
resolve such matter, then VERTEX shall have final authority to make the
ultimate decision with respect thereto. 
If the JDC cannot reach consensus on any other matters, including the
matters set forth in Section 3.2.3, such matters shall be referred to the
Joint Steering Committee for resolution in accordance with the terms of
Sections 10.2.1 and 10.2.2.


 


3.2                                    Development Plans.


 


3.2.1                      MITSUBISHI Development Plan. 
As soon as practicable after the Effective Date, MITSUBISHI will prepare
a development plan for the conduct of the MITSUBISHI Development Activities in
the Territory (the “MITSUBISHI  Development Plan”), and will provide a copy of such Plan to
the JDC.  The MITSUBISHI Development Plan
will be updated by MITSUBISHI annually thereafter to describe the MITSUBISHI
Development Activities that MITSUBISHI then intends will be conducted during
the subsequent year and the remainder of the development period.  Such MITSUBISHI Development Plan will be
provided to 


 


13














 


Information
redacted pursuant to a confidential treatment request.  An unredacted version of this

exhibit has been filed separately with the Commission.


 


the JDC within [***] days of the date that the JDC will
conduct one of its quarterly or semi-annual meetings.  The MITSUBISHI Development Plan will be
considered Confidential Information of MITSUBISHI subject to the
confidentiality obligations of Article IX. 
The JDC shall have the opportunity to review and comment on the MITSUBISHI
Development Plan within [***] days
of its receipt.


 


3.2.2                      VERTEX Development Plan. 
As soon as practicable after the Effective Date, VERTEX will prepare a
development plan for the conduct of the VERTEX Development Activities in the VERTEX
Territory, other than the Core Development Activities (the “VERTEX  Development Plan”),
and will provide a copy of such Plan to the JDC.  The VERTEX Development Plan will be updated
by VERTEX annually thereafter to describe the VERTEX Development Activities
(other than Core Development Activities) that VERTEX then intends will be
conducted during the subsequent year and the remainder of the development
period.  Such VERTEX Development Plan
will be provided to the JDC within [***]
days of the date that the JDC will conduct one of its quarterly or semi-annual
meetings.  The VERTEX Development Plan
will be considered Confidential Information of VERTEX subject to the
confidentiality obligations of Article IX. 
The JDC shall have the opportunity to review and comment on the VERTEX
Development Plan within [***] days
of its receipt.


 


3.2.3                      Core Development Plan. 
As soon as practicable after the Effective Date, VERTEX will prepare a
development plan for the conduct of the Core Development Activities (the “Core Development Plan”), including an accompanying budget,
and will provide a copy of such Plan to the JDC.  The Core Development Plan will be updated by
VERTEX annually thereafter to describe the Core Development Activities that
VERTEX then intends will be conducted during the subsequent year and the remainder
of the development period.  Such Core
Development Plan will be provided to the JDC within [***] days of the date that the JDC will conduct one of its
quarterly or semi-annual meetings.  The
Core Development Plan will be considered Confidential Information of VERTEX
subject to the confidentiality obligations of Article IX.  The JDC shall have the right to review and
comment on the Core Development Plan within [***]
days of its receipt.  Within such [***] day period, the JDC shall also (i) confirm
that the Core Development Activities described therein fall within the scope of
such definition and (ii) agree upon the protocols for non-clinical studies,
which agreement shall not be unreasonably withheld or delayed.  In the event that the JDC cannot reach consensus
with respect to a matter described in either clause (i) or (ii) above,
such matter shall be referred to the Joint Steering Committee for resolution in
accordance with the terms of Sections 10.2.1 and 


 


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Information
redacted pursuant to a confidential treatment request.  An unredacted version of this

exhibit has been filed separately with the Commission.


 


10.2.2.  In the event that the JDC does not agree upon
the protocol for a particular non-clinical study, VERTEX shall also have the
right to conduct such study independently and either (i) not to refer such
dispute to the Joint Steering Committee for resolution, in which case
MITSUBISHI may also not refer such dispute to the Joint Steering Committee and
such study shall no longer be considered a Core Development Activity subject to
cost sharing by MITSUBISHI pursuant to Section 3.3 below, or (ii) to
refer such dispute to the Joint Steering Committee for resolution, and if the
resolution process does not approve the protocol for such non-clinical study,
such study shall not be considered a Core Development Activity subject to cost
sharing by MITSUBISHI pursuant to Section 3.3 below, but if the resolution
process does approve such protocol, then such study shall be considered a Core
Development Activity subject to such cost sharing by MITSUBISHI.


 


3.3                                    Development Costs.


 


3.3.1                      MITSUBISHI Cost-Sharing Obligations. 
MITSUBISHI will bear the cost of the MITSUBISHI Development Activities in
the Territory.  In addition to the above
obligation, MITSUBISHI will pay to VERTEX [***]
of the Core Development Costs incurred by or on behalf of VERTEX or
a VERTEX Licensee.  For the avoidance of
doubt, MITSUBISHI shall have no obligation under this Section 3.3.1 to pay
[***].  Not later than [***] after the end of each calendar quarter, VERTEX will
submit to MITSUBISHI a summary of the Core Development Costs incurred during
the calendar quarter just ended (with appropriate supporting information
including a description of the time expended on the related Core Development
Activities [***], provided,
however, that if the first invoice submitted under this Section 3.3.1
to MITSUBISHI reflects costs for activities that are subsequently not confirmed
by the JDC to be Core Development Activities, then MITSUBISHI shall receive a
credit for such costs against the next invoice submitted under this Section 3.3.1.  The summary and supporting information shall
be considered to be Confidential Information of VERTEX subject to the confidentiality
obligations of Article IX.  The
books and records of VERTEX or a VERTEX Licensee relating to Core Development
Costs will be subject to inspection by MITSUBISHI once in any calendar year
upon reasonable notice, for the purpose of verifying the accuracy of the
summary of Core Development Costs delivered hereunder.  The books and records relating to a reported
Core Development Cost shall be retained by VERTEX or a VERTEX Licensee for a
period of not less than [***]
after the year in which such cost was incurred.


 


3.3.2                      Limitations on MITSUBISHI Cost-Sharing
Obligations.  MITSUBISHI’S obligation to share Core
Development Costs incurred by or on behalf of VERTEX or a VERTEX 


 


15

















 


Information
redacted pursuant to a confidential treatment request.  An unredacted version of this

exhibit has been filed separately with the Commission.


 


Licensee from the Effective Date through the
Completion of Phase II Clinical Trials within the Core Development Activities and
to pay VERTEX therefor shall be [***].  Upon [***] the  Parties shall begin
to discuss in good faith the maximum amount of MITSUBISHI’s cost-sharing
obligation relating to Core Development Costs incurred by or on behalf of
VERTEX or a VERTEX Licensee for the conduct of Phase III Clinical Trials.  [***]  This amount shall be payable in accordance
with the terms and conditions set forth in Sections 3.3.1 and 3.3.3.


 


3.3.3                      Timing and Method of Payments. 
All amounts payable under this Section 3.3 shall be made on or
before the [***] following MITSUBISHI’s
receipt of invoices from VERTEX with respect thereto.  All payments shall be made by wire transfer
in U.S. dollars to the credit of such bank account as may be designated by
VERTEX in writing to MITSUBISHI from time to time.


 


3.4                                    [***].  In the event that MITSUBISHI decides to file for
Regulatory Approval for the Drug Product for a [***] in the Territory [***]
then MITSUBISHI shall [***].  The Parties shall discuss in good
faith and agree [***].  For the purpose of this Section 3.4 [***], 
In addition, in the event that MITSUBISHI determines that it will not
file for Regulatory Approval for the Drug Product in the Territory for [***] but instead will file for Regulatory
Authority for the Drug Product in the Territory for [***] then MITSUBISHI shall notify VERTEX of such decision no
later than [***] and the parties
shall discuss in good faith and agree upon the terms [***] which agreement in any event shall be reached prior to [***].


 


3.5                                    Data Transfer.


 


3.5.1                      Preclinical and Non-clinical Data.


 


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


 


16

















 


Information
redacted pursuant to a confidential treatment request.  An unredacted version of this

exhibit has been filed separately with the Commission.


 


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


 


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


 


3.5.2                      Clinical Data.


 


(a)                                  MITSUBISHI shall provide to VERTEX all
relevant materials, data and regulatory information that are Controlled by and
in the possession of MITSUBISHI or its Affiliates and related to or generated
in connection with any clinical trials of a Compound conducted, sponsored or
funded by MITSUBISHI and/or its sublicensees (including investigator-sponsored
trials and post-marketing clinical trials) pursuant to the performance of the MITSUBISHI
Development Activities during the term of this Agreement, whether written or
electronic, including all relevant clinical safety and efficacy data and all
regulatory data and information related to the use and sale of a Drug Product
for any Indication.  Such materials, data
and information shall be delivered to the JDC by MITSUBISHI, at MITSUBISHI’s
cost, promptly after completion of the analysis of such clinical trial data and
information in an orderly fashion and in a manner such that the value of the
accessed information is preserved in all 


 


17

















 


Information
redacted pursuant to a confidential treatment request.  An unredacted version of this

exhibit has been filed separately with the Commission.


 


material respects.  Such information and materials shall be deemed
Confidential Information of MITSUBISHI subject to the terms and conditions set
forth in Article IX.  MITSUBISHI
shall enter into customary agreements with its sublicensees that provide that
such sublicensees shall supply MITSUBISHI with relevant materials, data and
regulatory information related to or generated in connection with any clinical
trials of a Compound conducted, sponsored or funded by such sublicensees
pursuant to the performance of the MITSUBISHI Development Activities.


 


(b)                                  VERTEX shall provide to MITSUBISHI all
relevant materials, data and regulatory information that are Controlled by and
in the possession of VERTEX or its Affiliates and related to or generated in
connection with any clinical trials of a Compound conducted, sponsored or funded
by VERTEX and/or its VERTEX Licensees (including investigator-sponsored trials
and post-marketing clinical trials) pursuant to the performance of the VERTEX
Development Activities before and during the term of this Agreement, whether
written or electronic, including all relevant clinical safety and efficacy data
and all regulatory data and information related to the use and sale of a Drug
Product for any Indication.  Such
materials, data and information shall be delivered to the JDC by VERTEX, at
VERTEX’s cost, promptly after completion of the analysis of such clinical trial
data and information in an orderly fashion and in a manner such that the value
of the accessed information is preserved in all material respects.  Such information and materials shall be
deemed Confidential Information of VERTEX subject to the terms and conditions
set forth in Article IX.  VERTEX
shall enter into customary agreements with the VERTEX Licensees that provide
that the VERTEX Licensees shall supply VERTEX with relevant materials, data and
regulatory information related to or generated in connection with any clinical
trials of a Compound conducted, sponsored or funded by such VERTEX Licensees
pursuant to the performance of the VERTEX Development Activities.


 


3.6                                    Regulatory Matters.


 


3.6.1                      Regulatory Approvals. 
Unless otherwise required by law in the relevant jurisdiction or set
forth in this Agreement, MITSUBISHI shall have the sole right to obtain
Regulatory Approvals in the Territory, which shall be held by and in the name
of MITSUBISHI, and MITSUBISHI, its Affiliates or sublicensees shall own all
submissions in connection therewith.


 


3.6.2                      Interaction with Regulatory Authorities. 
MITSUBISHI, its Affiliates or sublicensees will be the principal contact
for and will otherwise take the lead role in all 


 


18

















 


Information
redacted pursuant to a confidential treatment request.  An unredacted version of this

exhibit has been filed separately with the Commission.


 


interactions with Regulatory Authorities concerning a
Drug Product in the Territory.  VERTEX, its
Affiliates or VERTEX Licensees will be the principal contact for and will
otherwise take the lead role in all interactions with Regulatory Authorities
concerning Bulk Drug Substance or a Drug Product in the VERTEX Territory.  Each Party will provide the other Party with
prompt notice of all material correspondence and filings with a Regulatory
Authority regarding Bulk Drug Substance or a Drug Product and, at the other
Party’s request and at its expense, with copies of all such correspondence and
filings.


 


3.6.3                      Right of Cross Reference. 
MITSUBISHI hereby grants VERTEX and its Affiliates or VERTEX Licensees
the right to cross reference, in their regulatory filings made in the VERTEX
Territory or in the Territory, if any, covering Bulk Drug Substance, a Compound
or Drug Product, all regulatory filings, and information contained therein,
made in the Territory by MITSUBISHI or its Affiliates or sublicensees relative
to such Bulk Drug Substance, Compounds or Drug Products.  VERTEX hereby grants MITSUBISHI and its
Affiliates or sublicensees the right to cross reference, in their regulatory
filings made in the Territory covering a Compound or Drug Product, all
regulatory filings, and information contained therein, made in the VERTEX
Territory or in the Territory, if any, by VERTEX or its Affiliates or VERTEX
Licensees relative to such Compounds or Drug Products.


 


3.6.4                      Regulatory Reporting. 
During the term of this Agreement, in order to comply with applicable
regulations of applicable Regulatory Authorities, the Parties agree that they
shall establish procedures for reporting to such Regulatory Authorities any
adverse events, technical complaints or other reportable events that may occur
with respect to the manufacture, supply, use, sale or clinical testing of Bulk
Drug Substance, a Compound or Drug Product hereunder.  Details of such procedures shall be agreed
upon by the Parties prior to the initiation of Phase I Clinical Trials by or on
behalf of MITSUBISHI.


 


3.7                                    Conduct of the Development Activities.


 


3.7.1                      Standards.  MITSUBISHI
and VERTEX agree to perform the MITSUBISHI Development Activities and the VERTEX
Development Activities, respectively, in accordance with the terms and conditions
of this Agreement and in conformity with generally accepted standards of good
laboratory practices and good clinical practices and with all applicable
national, state, regional and local laws, guidelines, rules and
regulations.


 


3.7.2                      Records.  MITSUBISHI and
VERTEX shall prepare and maintain, or have prepared and maintained, complete
and accurate written records, accounts, notes, reports and 


 


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Information
redacted pursuant to a confidential treatment request.  An unredacted version of this

exhibit has been filed separately with the Commission.


 


data with respect to all laboratory work conducted in
the performance of the MITSUBISHI Development Activities and the VERTEX
Development Activities, respectively. 
MITSUBISHI and VERTEX shall prepare and maintain, or have prepared and
maintained, complete and accurate written records, data and information with
respect to all clinical trials performed in the conduct of the MITSUBISHI
Development Activities and the VERTEX Development Activities, respectively, as
required by all applicable national, state, regional and local laws,
guidelines, rules and regulations.


 


3.8                                    Ownership of Technology.


 


3.8.1                      No Ownership by Employees. 
All employees of MITSUBISHI who are expected to perform the MITSUBISHI
Development Activities have signed, or before any such performance will sign,
agreements with MITSUBISHI regarding proprietary information and inventions in
a form reasonably considered by MITSUBISHI and its counsel to assure
MITSUBISHI’s Control of any intellectual property invented, discovered or
developed by such employees.  All
employees of VERTEX who are expected to perform the VERTEX Development
Activities have signed, or before any such performance will sign, agreements
with VERTEX regarding proprietary information and inventions in a form
reasonably considered by VERTEX and its counsel to assure VERTEX’s Control of
any intellectual property invented, discovered or developed by such employees.


 


3.8.2                      Ownership by Agents or Licensees. 
MITSUBISHI shall enter into customary agreements with its agents and
sublicensees that provide that all of such agents’ or sublicensees’ right,
title and interest in, to and under any intellectual property invented,
discovered or developed by such agents or sublicensees in the performance of
the MITSUBISHI Development Activities shall be assigned or licensed to
MITSUBISHI.  VERTEX shall enter into
customary agreements with its agents and VERTEX Licensees that provide that all
of such agents’ or VERTEX Licensees’ right, title and interest in, to and under
any intellectual property invented, discovered or developed by such agents or
VERTEX Licensees in the performance of the VERTEX Development Activities shall
be assigned or licensed to VERTEX.


 


ARTICLE
IV— MANUFACTURE
AND SUPPLY


 


4.1                                    Supply of Bulk Drug Substance and
Drug Product for Development.  Subject to Section 6.4, VERTEX shall
be responsible for the manufacture and supply of all Bulk Drug Substance, and
MITSUBISHI will be responsible for preparing the Drug Product from Bulk 


 


20

















 


Information
redacted pursuant to a confidential treatment request.  An unredacted version of this

exhibit has been filed separately with the Commission.


 


Drug Substance, in each case as necessary for the
conduct of the MITSUBISHI Development Activities in the Territory.  Notwithstanding the above but subject to Section 6.4,
at MITSUBISHI’s request and upon no less than [***],
VERTEX agrees to supply that amount of Drug Product required for MITSUBISHI to
conduct the Phase I Clinical Trials, Phase II Clinical Trials and Phase III
Clinical Trials in the Territory (“Investigational Drug
Product”).  VERTEX will supply
such Bulk Drug Substance and Investigational Drug Product to MITSUBISHI at the [***]. 
Supply of Bulk Drug Substance and Investigational Drug Product for
development purposes shall be undertaken pursuant to the provisions of a supply
agreement for the conduct of the MITSUBISHI Development Activities (the “Development Supply Agreement”), including such customary
representations, warranties, covenants and conditions as are necessary or
appropriate for transactions of this type, not inconsistent with the terms and
conditions hereof and satisfactory in form and substance to the Parties and
their legal advisors.  Within [***] after the Effective Date, the Parties
will negotiate in good faith and separately enter into the Development Supply
Agreement.


 


4.2                                    Supply of Bulk Drug Substance and
Drug Product for Commercial Purposes.  Subject to Section 6.4,  VERTEX will supply and MITSUBISHI shall purchase from
VERTEX all of MITSUBISHI’s requirements for Bulk Drug Substance for manufacture
of Drug Product sold in the Territory pursuant to the provisions of a supply
agreement for Bulk Drug Substance for commercial purposes (the “Commercial Supply Agreement”), including such customary
representations, warranties, covenants and conditions as are necessary or
appropriate for transactions of this type, not inconsistent with the terms and
conditions hereof and satisfactory in form and substance to the Parties and
their legal advisors.  Promptly after the
Start of the first Phase III Clinical Trial by MITSUBISHI, the Parties will
commence good faith negotiations and separately enter into the Commercial Supply
Agreement.  MITSUBISHI shall purchase
such Bulk Drug Substance from VERTEX in accordance with the terms of Section 6.3
hereof.  VERTEX may contract with any
Third Party as a manufacturing subcontractor.


 


4.3                                    Limitation on Supply Obligation.  Notwithstanding
Sections 4.1 or 4.2 hereof, VERTEX shall have no obligation to supply Bulk Drug
Substance or Investigational Drug Product to MITSUBISHI with respect to a Drug
Product unless VERTEX is developing or commercializing such Drug Product; provided,
however, that if VERTEX has so supplied Bulk Drug Substance to MITSUBISHI
for commercial purposes before VERTEX ceased development or commercialization
of the corresponding Drug Product, then VERTEX shall be obligated to continue
the supply of such Bulk Drug Substance to MITSUBISHI pursuant to the terms set
forth 


 


21

















 


Information redacted pursuant to
a confidential treatment request.  An
unredacted version of this

exhibit has been filed separately with the Commission.


 


in Section 6.4 hereof; provided further,
however, that in any other case where MITSUBISHI wishes to develop or
commercialize a Drug Product that VERTEX is not itself developing or
commercializing,  VERTEX shall grant to
MITSUBISHI a nonexclusive license (or sublicense, as appropriate) under the
VERTEX Technology, with the right to sublicense, to manufacture and have
manufactured Bulk Drug Substance with respect to such Drug Product to the
extent required to use, sell, have sold, offer to sell and import such Drug
Product in the Territory in the Field of Use. 
In such event, at MITSUBISHI’s expense, VERTEX will also deliver to
MITSUBISHI such VERTEX Technology as may then exist (if any) and provide to
MITSUBISHI any applicable technical support in connection therewith that is
reasonably necessary to enable MITSUBISHI to manufacture Bulk Drug Substance in
compliance with any and all current Regulatory Approvals in the Territory.  Such VERTEX Technology shall be delivered to
MITSUBISHI in such a way as to communicate it to MITSUBISHI promptly,
effectively and economically.


 


4.4                                    Second Source of Supply for Bulk
Drug Substance.  Within two (2) years after the receipt
of Regulatory Approval for a Drug Product in the United States, VERTEX agrees
to have at least [***]manufacturing
sites, in different geographical locations, approved by the Regulatory
Authorities for the supply of the corresponding Bulk Drug Substance to
MITSUBISHI pursuant to the Commercial Supply Agreement.


 


4.5                                    Manufacturing Technology. 
Manufacturing technology which is Controlled by one Party and which
would be useful to the other Party in discharging its manufacturing obligations
hereunder shall be made available to the manufacturing Party for that purpose,
subject to negotiation of a reasonable compensation arrangement.  If either Party (a “Contracting
Party”) engages an Affiliate or a Third Party to provide assistance
to the Contracting Party in the development of processes useful for the
manufacture of Bulk Drug Substance or Drug Product, the Contracting Party will
make reasonable efforts to provide that any processes belonging to that
Affiliate or Third Party and made available to the Contracting Party will also
be made available to the other Party on the same terms offered to the
Contracting Party.


 


4.6                                    Packaging. 
MITSUBISHI will be responsible for packaging the Drug Product and
Investigational Drug Product for development purposes and for commercial sale
in the Territory.


 


22

















 


Information redacted pursuant to
a confidential treatment request.  An
unredacted version of this

exhibit has been filed separately with the Commission.


 


ARTICLE
V — COMMERCIALIZATION


 


5.1                                    Global Marketing and Sales. 
MITSUBISHI will prepare a marketing plan in reasonable detail for the
launch of any Drug Product in each country of the Territory, and will provide
the plan to VERTEX not later than ninety (90) days after submission of the
initial application for Regulatory Approval of the Drug Product to a Regulatory
Authority in such country of the Territory.


 


5.2                                    Co-Labeling.  The labels, packaging and inserts for the Drug Product
packaged for sale in the Territory, and any promotional materials therefor,
will bear the company names and logos of both MITSUBISHI and VERTEX with such
relative prominence and in such language as are permitted by the applicable
laws, rules, regulations and custom of such country, with the preference that
wherever possible such names and logos shall be of equal prominence and
VERTEX’s name shall be written in the English language.  MITSUBISHI will permit VERTEX to review all
material regulatory filings in the Territory that relate to product labeling,
and all proposed labels, packaging, package inserts and promotional materials
required under the foregoing provisions to bear VERTEX’s name and logo, prior
to the filing of any such material with any Regulatory Authority.


 


5.3                                    Trademarks.  Each
Party shall have the right to register and use its own trademark for a Drug
Product, respectively.  Notwithstanding
the foregoing, in the event MITSUBISHI wishes to use VERTEX’s trademark for a
Drug Product, VERTEX hereby grants to MITSUBISHI an exclusive, royalty-free
license to use VERTEX’s trademark for a Drug Product for the advertising,
promotion, marketing, distribution and sale of the Drug Product in the Field of
Use in the Territory.  MITSUBISHI shall
have the right to grant sublicenses under the foregoing exclusive license to
its sublicensees pursuant to Section 2.1.2 hereof.


 


5.4                                    Due Diligence.  Following the First Commercial Sale of a Drug Product
and until the expiration of this Agreement, MITSUBISHI shall use diligent and
commercially reasonable efforts to keep the Drug Product reasonably available
to the public in the Territory, devoting the same degree of attention and
diligence to such efforts that it devotes to such activities for other of its
products of comparable commercial potential. 
MITSUBISHI shall promptly notify VERTEX if it shall determine that the
marketing and sale of the Drug Product in any country in the Territory is not
commercially reasonable or economically profitable or if for other unforeseen
reasons further commercial support of the Drug Product in any country is no
longer prudent or practical.  Within [***] of the receipt of such notice, VERTEX
shall notify MITSUBISHI whether it wishes the marketing and sale of the Drug
Product in such country in the Territory to continue.  If VERTEX notifies MITSUBISHI that it does not
wish such marketing 


 


23














 


Information
redacted pursuant to a confidential treatment request.  An unredacted version of this

exhibit has been filed separately with the Commission.


 


and sale to continue, then MITSUBISHI may immediately stop
the marketing and sale of the Drug Product in such country in the Territory.  If VERTEX notifies MITSUBISHI that it does
wish such marketing and sale to continue, then MITSUBISHI shall continue to
market and sell the Drug Product in such country in the Territory for up to [***] from the date of MITSUBISHI’s initial
notice to VERTEX or such earlier date upon which VERTEX or a VERTEX Licensee
begins to market and sell the Drug Product in such country.  Upon the termination of MITSUBISHI’s
marketing and sale of the Drug Product in a country, this Agreement shall be
deemed to be amended to delete such country from the Territory, all rights with
respect to such country under this Agreement shall revert to VERTEX, and the
rights and licenses granted by VERTEX to MITSUBISHI pursuant to this Agreement
shall terminate with respect to such country. 
At such time MITSUBISHI, at the request of VERTEX, shall also assign or
otherwise transfer to VERTEX all INDs, Regulatory Approvals, or applications
therefor, with respect to a Compound or Drug Product in such country, and
VERTEX shall have an irrevocable, fully paid-up nonexclusive license, with the
right to sublicense, in such country under the MITSUBISHI Technology to
develop, manufacture, have manufactured, use, sell, have sold, offer to sell
and import Bulk Drug Substance, Compound and Drug Product.  In addition, at the request of VERTEX,
MITSUBISHI shall assign to VERTEX free of charge all of its or its Affiliates’
right, title and interest in and to any trademarks used for a Drug Product in
such country, and shall execute, or cause its Affiliates to execute, such
documents of transfer or assignment and perform, or cause its Affiliates to
perform, such acts as may be reasonably necessary to transfer ownership of such
trademarks to VERTEX and to enable VERTEX to continue to maintain such
trademarks at VERTEX’s expense.


 


ARTICLE
VI — PAYMENTS


 


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


 


6.2                                    Milestone Payments by MITSUBISHI.


 


6.2.1                     Payments.  In
consideration of the grant of the license set forth in Section 2.1 hereof,
MITSUBISHI will make the following payments to VERTEX upon the achievement of
any of the following milestones with respect to a Compound, upon the further
terms and conditions set forth below.


 


24

















 


Information
redacted pursuant to a confidential treatment request.  An unredacted version of this

exhibit has been filed separately with the Commission.


 


	
  Milestone

  	
   

  	
  Payment

  	
   

  
	
   

  	
   

  	
   

  	
   

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

  	
   

  	
  US $

  	
  4,000,000

  	
   

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

  	
   

  	
  US $

  	
  3,000,000

  	
   

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

  	
   

  	
  US $

  	
  2,000,000

  	
   

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

  	
   

  	
  US $

  	
  2,000,000

  	
   

  
	
  5.
  First [***]

  	
   

  	
  US $

  	
  [***]

  	
   

  
	
  6.
  First [***]

  	
   

  	
  US $

  	
  [***]

  	
   

  
	
   

  	
   

  	
  US $

  	
  [***]

  	
   

  



 


6.2.2                     Payments to be Made Only Once. 
Milestone payments are payable only once with respect to a Compound, but
shall be payable with respect to each Compound that is developed.  If any milestone is achieved with respect to
the development of a Compound, any previously unpaid lower numbered milestone
for the Compound will become immediately due and payable.  Notwithstanding the foregoing, if one Compound
is replaced in development by the other Compound after any one or more
milestone payments have been paid with respect to the first Compound, then no
comparable milestone payment shall be payable hereunder with respect to the
replacement Compound if that milestone payment has already been paid with
respect to the first Compound.


 


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


 


25

















 


Information redacted pursuant to
a confidential treatment request.  An
unredacted version of this

exhibit has been filed separately with the Commission.


 


6.3                                    Commercial Supply of Drug
Product.


 


6.3.1                      Purchase of Bulk Drug Substance. 
Except as otherwise provided herein, VERTEX shall supply and MITSUBISHI,
its Affiliates and sublicensees shall purchase from VERTEX pursuant to the Commercial
Supply Agreement all of their respective requirements of Bulk Drug Substance
for manufacture of Drug Product for sale in the Territory.


 


6.3.2                     Supply Price. 
In the Commercial Supply Agreement, the Parties shall determine the
percentage of the Net Sales Price(s) for Drug Product(s) that shall
be attributed to the price for Bulk Drug Substance supplied by VERTEX for the
manufacture of such Drug Product(s) sold in the Territory.


 


6.3.3                      Payment.  Payments due
to VERTEX for the supplied Bulk Drug Substance shall be made by MITSUBISHI
within [***] of receipt from
VERTEX of an invoice for the Bulk Drug Substance purchased by MITSUBISHI under
the terms of the Commercial Supply Agreement, and annual adjustments shall be
made within such time periods and applying such procedures as the Parties may
agree to reflect the actual Net Sales Price(s) for the corresponding Drug
Product(s) for each country for that year. 
Any net adjustments shall be remitted within [***] of determination to the Party to whom the adjustment is
due.


 


6.4                                 Production of Bulk Drug Substance
by MITSUBISHI.  If VERTEX determines at any time that it
does not wish to supply Bulk Drug Substance or Investigational Drug Product to
MITSUBISHI, its Affiliates and sublicensees, VERTEX shall provide MITSUBISHI (i) [***] prior written notice of such
determination if VERTEX has any Affiliate, subcontractor, or VERTEX Licensee that
manufactures Bulk Drug Substance or Investigational Drug Product and agrees to
supply Bulk Drug Substance or Investigational Drug Product to MITSUBISHI [***], or (ii) in a case other than
the case set forth in clause (i) above, [***]
prior written notice; provided, however, that, in the case of clause (ii) set
forth above, VERTEX shall stock sufficient Bulk Drug Substance to permit
MITSUBISHI to manufacture Drug Products or to permit VERTEX to manufacture
Investigational Drug Product for MITSUBISHI for a [***] and shall supply such Bulk Drug Substance or
Investigational Drug Product to MITSUBISHI for such [***] at a price equal to [***],
but otherwise pursuant to the terms and conditions of the Commercial Supply
Agreement or the Development Supply Agreement, as applicable.  Following the expiration of VERTEX’s
obligation to supply Bulk Drug Substance or Investigational Drug Product to MITSUBISHI,
the Commercial Supply Agreement or the Development Supply Agreement, as
applicable, shall terminate.  Upon VERTEX’s
notice pursuant to this Section 6.4 of its 


 


26

















 


Information redacted pursuant to
a confidential treatment request.  An
unredacted version of this

exhibit has been filed separately with the Commission.


 


determination to discontinue supply, MITSUBISHI shall have the sole
right and responsibility, at its expense, for the manufacture of all Bulk Drug
Substance to meet its, its Affiliates’ and sublicensees’ requirements in
connection with the development and commercial sale of the Drug Product in the
Territory; provided, however, that VERTEX shall have the right to so
manufacture and supply Bulk Drug Substance pursuant to its obligation set forth
in this Section 6.4.  Upon providing
such notice to MITSUBISHI, VERTEX shall grant to MITSUBISHI a nonexclusive
license (or sublicense, as appropriate) under the VERTEX Technology, with the
right to sublicense, to manufacture and have manufactured Bulk Drug Substance
to the extent required to use, sell, have sold, offer to sell and import Drug
Products in the Territory in the Field of Use. 
In such event, at MITSUBISHI’s expense, VERTEX will also deliver to
MITSUBISHI the VERTEX Technology and provide to MITSUBISHI the technical support
in connection therewith reasonably necessary to enable MITSUBISHI to
manufacture Bulk Drug Substance in compliance with any and all current
Regulatory Approvals in the Territory. 
Such VERTEX Technology shall be delivered to MITSUBISHI in such a way as
to communicate it to MITSUBISHI promptly, effectively and economically.


 


6.5                                    Royalties on Net Sales of Drug
Product; Sales Reports.


 


6.5.1                      Royalties.  MITSUBISHI
shall pay to VERTEX annual royalties at the rates set forth below, including
the percentage of the Net Sales Price(s) for Drug Product(s) that
shall be attributed to the supply price for Bulk Drug Substance determined by
the Parties pursuant to Section 6.3.2:


 


(a)                                       [***]


(b)                                       [***]


(c)                                       [***]


 


6.5.2                      Royalties  in
the Event of Manufacture of Bulk Drug Substance Pursuant to Sections 4.3 or 6.4. 
Notwithstanding
Section 6.5.1, in the event that Bulk Drug Substance is manufactured and
supplied pursuant to Sections 4.3 or 6.4 hereof, the rates of the annual
royalties to be paid by MITSUBISHI to VERTEX under this Agreement shall be
changed from the rates set forth in Section 6.5.1 to the rates set forth
below:


 


(a)                                       [***] ([***]%)
of the first $[***] of annual Net
Sales;


(b)                                       [***] ([***]%)
of the annual Net Sales over $[***]
and less than or equal to $[***];
and


(c)                                       [***] ([***]%)
of the annual Net Sales over $[***].


 


27

















 


Information redacted pursuant to
a confidential treatment request.  An
unredacted version of this

exhibit has been filed separately with the Commission.


 


6.5.3                      Discussion of Royalty Rate Reduction. 
(i) At
least [***] prior to the
expiration in a country in the Territory of all VERTEX Patents or (ii) upon
[***]  [***]


 


6.5.4                      Reports.  During the
term of this Agreement and after the First Commercial Sale of a Drug Product in
the Territory, MITSUBISHI shall furnish or cause to be furnished to VERTEX on a
quarterly basis a written report covering such calendar quarter showing (i) the
Net Sales Price(s) and total Net Sales in each country in the Territory
during such calendar quarter; (ii) amounts due VERTEX under Sections 6.5.1
or 6.5.2 hereof with respect to such Net Sales, and the basis for calculating
those amounts due; (iii) withholding taxes, if any, required by law to be
deducted in respect of any such sales or payments, and evidence of payment
thereof; and (iv) dispositions of the Drug Product other than pursuant to
sales for cash.  With respect to the Net
Sales Price(s) of the Drug Product or Net Sales received in a currency
other than U.S. dollars, the Net Sales Price(s) or Net Sales shall be
expressed in the domestic currency of the party making the sale, together with
the U.S. dollar equivalent of the amount, calculated using the rate reported in
the Wall Street Journal for the purchase of
U.S. dollars with such currency on the last business day for the calendar
quarter for which the report is being prepared. 
The foregoing quarterly reports shall be due on or before the
forty-fifth (45th) day following the close of each
calendar quarter.  MITSUBISHI will also
provide VERTEX, within ten (10) business days after the end of each
calendar quarter, with a report showing MITSUBISHI’s best estimate of total Net
Sales for that calendar quarter based on information available to MITSUBISHI at
the time of the report.


 


6.5.5                      Audit.  MITSUBISHI
shall keep and shall cause to be kept accurate records in sufficient detail to
enable the amounts due hereunder to be determined and to be verified by
VERTEX.  Upon the written request of
VERTEX, at VERTEX’s expense and not more than once in any calendar year,
MITSUBISHI shall permit an independent accountant of national prominence
selected by VERTEX, and approved by MITSUBISHI, to have access during normal
business hours to those records of MITSUBISHI as may be reasonably necessary to
verify the accuracy of the sales reports furnished by MITSUBISHI pursuant to
this Section 6.5, in respect of any calendar year ending not more [***] prior to the date of such
notice.  Such accountant shall not
disclose any information except that which should properly be contained in a
sales report required under this Agreement. 
MITSUBISHI shall include in each sublicense entered into by it pursuant
to this Agreement a provision requiring the sublicensee to keep and maintain
adequate records of sales made pursuant to such sublicense and to grant access
to such records by the aforementioned independent accountant for the 


 


28

















 


Information redacted pursuant to
a confidential treatment request.  An
unredacted version of this

exhibit has been filed separately with the Commission.


 


reasons specified
in this Section 6.5.  Upon the
expiration of three (3) years following the end of any calendar year, the
calculation of amounts payable with respect to such calendar year, unless then
in dispute, shall be binding and conclusive upon VERTEX, and MITSUBISHI and its
Affiliates and sublicensees shall be released from any liability or
accountability with respect to payments for such year.  The report prepared by such independent
accountant, a copy of which shall be sent or otherwise provided to MITSUBISHI
by such independent accountant at the same time it is sent or otherwise
provided to VERTEX, shall contain the conclusions of such independent
accountant regarding the audit and will specify that the amounts paid to VERTEX
pursuant thereto were correct or, if incorrect, the amount of any underpayment
or overpayment.  If such independent
accountant’s report shows any underpayment, MITSUBISHI shall remit or shall
cause its Affiliates or sublicensees to remit to VERTEX within thirty (30) days
after MITSUBISHI’ receipt of such report, (i) the amount of such
underpayment and (ii) if such underpayment exceeds five percent (5%) of
the total amount owed for the calendar year then being audited, the reasonable
and necessary fees and expenses of such independent accountant performing the
audit, subject to reasonable substantiation thereof.  Any overpayments shall be fully creditable
against amounts payable in subsequent payment periods.  VERTEX agrees that all information subject to
review under this Section 6.5 or under any sublicense agreement is
confidential and that VERTEX shall retain and cause its accountant to retain
all such information in confidence.


 


6.5.6                      Interest.  In case of
any delay in payment by one Party to the other hereunder, interest at [***] shall be assessed from the [***] day after the due date of the payment
until the date paid, and shall be due from such Party upon prior written notice
from the other Party.  The applicable [***] shall be the rate in effect on the [***] day after the payment is due.


 


6.6                                    Withholding Tax.  If during the term of this Agreement, withholding tax
is required by law to be deducted from any payments required to be made by
MITSUBISHI to VERTEX hereunder, (i) such tax will be deducted from the
otherwise remittable royalty after applying for tax rate reduction under the
applicable treaties for avoidance of double taxation, (ii) such tax will
be paid to the proper tax authorities, and (iii) a certificate of tax will
be sent to VERTEX promptly after receipt from the competent tax authority.


 


6.7                                    Currency of Payment. 
All payments hereunder shall be made in U.S. dollars.  If at any time legal restrictions prevent the
prompt remittance of any payments with respect to any country of the Territory
where a Drug Product is sold, MITSUBISHI or its Affiliates or 


 


29

















 


Information redacted pursuant to
a confidential treatment request.  An
unredacted version of this

exhibit has been filed separately with the Commission.


 


sublicensees shall have the right and option to make
such payments by depositing the amount thereof in local currency to VERTEX’s
account in a bank or depository in such country.


 


ARTICLE
VII — TECHNOLOGY


 


7.1                                    Ownership.  All Know-How invented, discovered or developed
exclusively by either Party or its Affiliates (directly or through others
acting on its behalf) shall be owned and Controlled by such Party, subject to
the provisions of this Agreement.  All
Patents claiming Bulk Drug Substance, a Compound or a Drug Product, or a method
of making or using the same or an improvement to a Patent covering any of the
foregoing, invented by either Party or its Affiliates (directly or through
others acting on its behalf) shall be owned and Controlled by such Party,
subject to the provisions of this Agreement. 
All Know-How and Patents claiming Bulk Drug Substance, a Compound or a
Drug Product, or a method of making or using the same or an improvement to a
Patent covering any of the foregoing, invented, discovered, or developed, as
applicable, jointly by the Parties or their Affiliates (directly or through
others acting on their behalf) shall be owned and Controlled jointly.  Such Know-How that is owned and Controlled
jointly by the Parties or their Affiliates shall be “Joint
Know-How,” and such Patents that are owned and Controlled jointly by
the Parties or their Affiliates shall be “Joint Patents.”  For the avoidance of doubt, either Party
shall have the right, including the right to sublicense, to practice and use
the Joint Know-How and the Joint Patents worldwide without any payment to the
other Party.


 


7.2                                    Patent Procurement and
Maintenance.  VERTEX shall be responsible for the
preparation, filing, prosecution and maintenance of all VERTEX Patents and any
Joint Patents, and MITSUBISHI shall be responsible for the preparation, filing,
prosecution and maintenance of all MITSUBISHI Patents.  VERTEX, with the advice of MITSUBISHI, shall
determine the countries in the Territory in which patent applications for
VERTEX Patents will be filed. 
MITSUBISHI, with the advice of VERTEX, shall determine the countries in
the VERTEX Territory in which patent applications for MITSUBISHI Patents will
be filed.  The Parties shall discuss and
determine the countries in the Territory in which patent applications for Joint
Patents will be filed.  If VERTEX decides
not to prosecute, and maintain any VERTEX Patent filed in a country in the
Territory, without first having filed a substitute therefor, VERTEX shall
assign its right, title and interest in and to such VERTEX Patent in such
country to MITSUBISHI free of charge, if MITSUBISHI so desires, and shall
execute such documents of transfer or assignment and perform such acts as may
be reasonably necessary to transfer sole ownership 


 


30

















 


Information redacted pursuant to
a confidential treatment request.  An
unredacted version of this

exhibit has been filed separately with the Commission.


 


of such VERTEX Patent to MITSUBISHI and to enable
MITSUBISHI to continue prosecution or maintenance of such VERTEX Patent.  In such case, such VERTEX Patents shall not
be deemed to be VERTEX Patents thereafter with respect to such country.  If MITSUBISHI decides not to prosecute, and
maintain any MITSUBISHI Patent filed in a country in the VERTEX Territory, without
first having filed a substitute therefor, MITSUBISHI shall assign its right,
title and interest in and to such MITSUBISHI Patent in such country to VERTEX free
of charge, if VERTEX so desires, and shall execute such documents of transfer
or assignment and perform such acts as may be reasonably necessary to transfer
sole ownership of such MITSUBISHI Patent to VERTEX and to enable VERTEX to
continue prosecution or maintenance of such MITSUBISHI Patent.  In such case, such MITSUBISHI Patents shall
not be deemed to be MITSUBISHI Patents with respect to such country.  VERTEX shall provide draft applications for
Joint Patents to MITSUBISHI sufficiently in advance of filing for MITSUBISHI to
have the opportunity to comment thereon. 
VERTEX shall furnish MITSUBISHI with copies of all substantive
communications between VERTEX and applicable patent offices regarding the Joint
Patents.  VERTEX and MITSUBISHI shall
each provide the JDC with periodic reports listing, by name, any VERTEX Patents
or MITSUBISHI Patents, respectively, filed by it in the Territory or the VERTEX
Territory, respectively, along with a general summary of the claims made and
the jurisdictions of filing in the Territory or the VERTEX Territory,
respectively.  Each Party will provide
such assistance as the other Party may reasonably request in order to protect
the other Party’s rights to the Patents for which it is responsible under this Section 7.2.


 


7.3                                    Costs.  VERTEX
shall be responsible for paying its costs incurred for preparation, filing,
prosecution and maintenance of the VERTEX Patents worldwide and of the Joint
Patents in the VERTEX Territory.  MITSUBISHI
shall be responsible for paying its costs incurred for preparation, filing,
prosecution and maintenance of the MITSUBISHI Patents worldwide and of the
Joint Patents in the Territory.  Either Party
may at any time elect, by written notice to the other Party, to discontinue
support for one or more Joint Patents (a “Discontinued Patent”)
and shall not be responsible for any costs relating to a Discontinued Patent
which are incurred more than sixty (60) days after receipt of that notice by
the other Party.  In such case, the other
Party may elect at its sole discretion to continue preparation, filing,
prosecution or maintenance of the Discontinued Patent at its sole expense.  The Party so continuing shall own any such
Discontinued Patent, and the Party electing to discontinue support shall
execute such documents of transfer or assignment and perform such acts as may 


 


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a confidential treatment request.  An
unredacted version of this

exhibit has been filed separately with the Commission.


 


be reasonably necessary to transfer sole ownership of
the Discontinued Patent to the other Party and enable that Party to file or to
continue prosecution or maintenance of the Discontinued Patent, if the other Party
elects to do so.  Discontinuation may be
on a country-by-country basis or for a Patent series in total.


 


7.4                                    Infringement Claims by Third
Parties.


 


7.4.1                      Notice.  If the
manufacture, import, use, offer to sell or sale of Bulk Drug Substance, a
Compound and/or a Drug Product results in a claim or reasonable apprehension of
a claim against a Party for patent infringement or for inducing or contributing
to patent infringement (“Infringement Claim”),
the Party first having notice of an Infringement Claim shall promptly notify
the other in writing.  The notice shall
set forth the facts of the Infringement Claim in reasonable detail.  The Parties shall discuss how to respond to
such Infringement Claim.


 


7.4.2                      Third-Party Licenses. 
If practicing the VERTEX Technology in connection with the import, use,
offer to sell or sale of a Compound and/or a Drug Product in any country in the
Territory would require a license under a Third Party’s patent, then VERTEX
will use reasonable efforts to obtain a license, with a right to sublicense to
MITSUBISHI, under the Third Party’s patent, under terms reasonably acceptable
to both VERTEX and MITSUBISHI.  VERTEX
shall grant a sublicense to MITSUBISHI under such Third Party’s patent, subject
to the financial obligation set forth in this Section 7.4.2.  VERTEX and MITSUBISHI will equally bear any
financial obligation payable pursuant to the license of a Third-Party patent in
the Territory; provided, however, that VERTEX shall not be required to
bear any financial obligation under any license of such Third-Party patents
that together with any other such license and with any financial obligation
pursuant to any voluntary final disposition of an action under Section 7.4.3
would effectively result in an aggregate reduction of the royalties on the Net
Sales of Drug Products in the country or countries in the Territory to which
such licenses relate by [***].


 


7.4.3                      Discontinued Sales, License or Defense of
Suit.  If the required license is either unavailable
or its terms are unacceptable to either VERTEX or MITSUBISHI, then MITSUBISHI
may elect in its sole discretion to discontinue sales of the Drug Product in
such country in the Territory or to undertake the defense of an Infringement
Claim or the prosecution of a declaratory judgment action with respect to the
Third-Party patents.  The Parties shall
share equally all out-of-pocket costs and expenses incurred in conducting the
defense of such Infringement Claims or the prosecution of such declaratory
judgment actions, including the 


 


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Information redacted pursuant to
a confidential treatment request.  An
unredacted version of this

exhibit has been filed separately with the Commission.


 


investigation and
settlement thereof; provided, however, no settlement or consent judgment
or other voluntary final disposition of a suit under this Section 7.4.3
may be entered into without the joint consent of VERTEX and MITSUBISHI (which
consent shall not be unreasonably withheld). 
If MITSUBISHI is conducting the defense of an Infringement Claim or the
prosecution of a declaratory judgment action, and VERTEX is a party to the
action, then VERTEX ‘s defense costs shall be reported to MITSUBISHI and
credited against VERTEX’s share of overall defense costs.  VERTEX and MITSUBISHI will equally bear any
financial obligation payable pursuant to a settlement, consent judgment or
other voluntary final disposition of an action pursuant to this Section 7.4.3;
provided, however, that VERTEX shall not be required to bear any
financial obligation under any such voluntary final disposition of an action
under this Section 7.4.3 that together with any other such voluntary final
dispositions and any licenses of Third-Party patents pursuant to Section 7.4.2
would effectively result in an aggregate reduction of the royalties on the Net
Sales of Drug Products in the country or countries in the Territory to which
such licenses relate [***]


 


7.5                                    Infringement Claims against Third
Parties.


 


7.5.1                      Protection of Technology. 
VERTEX and MITSUBISHI each agree to take reasonable actions to protect
the VERTEX Technology and the MITSUBISHI Technology, respectively, from
infringement and from unauthorized possession or use.


 


7.5.2                      Infringement of Technology. 
If any VERTEX Patents, MITSUBISHI Patents or Joint Patents are infringed
or claimed to be invalid or VERTEX Know-How, MITSUBISHI Know-How or Joint
Know-How is misappropriated, as the case may be, by a Third Party, the Party
first having knowledge of such infringement, claim or misappropriation, or
knowledge of a reasonable probability of such infringement, claim or
misappropriation, shall promptly notify the other in writing.  The notice shall set forth the facts of such
infringement, claim or misappropriation in reasonable detail.  The owner of the technology, or VERTEX, in
the case of joint ownership between the Parties hereto, shall have the primary
right, but not the obligation, to institute, prosecute, and control with its
own counsel any action or proceeding with respect to infringement, claimed
invalidity or misappropriation of such technology and the other Party shall
have the right, at its own expense, to be represented in such action by its own
counsel.  If the Party having the primary
right or responsibility to institute, prosecute, and control such action or proceeding
fails to do so within a period of ninety (90) days after receiving notice of
the infringement, claim or misappropriation, the other Party shall have the
right to bring and control any such action or proceeding by counsel of its own
choice; provided, 


 


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Information redacted pursuant to
a confidential treatment request.  An
unredacted version of this

exhibit has been filed separately with the Commission.


 


however, that such right shall only apply to MITSUBISHI with
respect to VERTEX Technology, Joint Patents and/or Joint Know-How in the
Territory and such right shall only apply to VERTEX with respect to MITSUBISHI
Technology in the VERTEX Territory.  In
such circumstances, the Party which had the primary responsibility shall have
the right, at its own expense, to be represented in any such action or
proceeding by counsel of its own choice. 
If one Party brings any such action or proceeding, the second Party may
be joined as a party plaintiff, and, in case of joining, the second Party
agrees to give the first Party reasonable assistance and authority to file and
to prosecute such suit.  In any case the
second Party shall provide all reasonable cooperation to the first Party in
connection with such action or proceeding. 
The costs and expenses of all suits brought by a Party under this Section 7.5.2
shall be reimbursed to such Party and to the other Party, if it participates in
or provides cooperation with respect to such suit, pro rata, out
of any damages or other monetary awards recovered therein in favor of VERTEX or
MITSUBISHI.  If any balance remains, the
Party taking such actions shall retain such balance.  No settlement or consent judgment or other
voluntary final disposition of a suit under this Section 7.5.2 may be
entered into without the joint consent of VERTEX and MITSUBISHI (which consent
shall not be unreasonably withheld).


 


7.6            Patent Term Extensions. 
The Parties shall cooperate in good faith with each other in gaining
patent term extension in the Territory to VERTEX Patents, Joint Patents and MITSUBISHI
Patents covering a Compound or Drug Product. 
MITSUBISHI and VERTEX shall mutually determine which patents shall be
extended.  All filings for such extension
shall be made by the Party who owns the patent, and by VERTEX for Joint Patents.


 


ARTICLE VIII — REPRESENTATIONS AND WARRANTIES


 


8.1            Representations and Warranties of
VERTEX.  As of the Effective Date, VERTEX represents and
warrants to MITSUBISHI as follows:


 


(a)           Authorization.  This Agreement has been duly executed and
delivered by VERTEX and constitutes the valid and binding obligation of VERTEX,
enforceable against VERTEX in accordance with its terms except as
enforceability may be limited by bankruptcy, fraudulent conveyance, insolvency,
reorganization, moratorium and other laws relating to or affecting creditors’
rights generally and by general equitable principles.  The execution, delivery and performance of
this Agreement have been duly authorized by all necessary action on the part of
VERTEX, its officers and directors.  The
execution, delivery and performance of this Agreement does not breach, violate,
contravene or constitute a default under any contracts, 


 


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Information redacted pursuant to
a confidential treatment request.  An
unredacted version of this

exhibit has been filed separately with the Commission.


 


arrangements or commitments to which VERTEX is a party
or by which it is bound nor does the execution, delivery and performance of
this Agreement by VERTEX violate any order, law or regulation of any court,
governmental body or administrative or other agency having authority over it.


 


(b)            No Third-Party Rights.  VERTEX owns
or possesses adequate licenses or other rights to use the VERTEX Technology in
the Field of Use in the Territory and to grant the licenses and rights herein.


 


(c)            Third-Party Patents.  Except as
disclosed in writing between the Parties, VERTEX is not aware of any issued
patents or pending patent applications that, if issued, would be infringed by
the development, manufacture, use, import, offer to sell or sale of any
Compound, Bulk Drug Substance or Drug Product in the Territory pursuant to this
Agreement.


 


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


 


8.2           Representations and Warranties of
MITSUBISHI.  As of the Effective Date, MITSUBISHI
represents and warrants to VERTEX that this Agreement has been duly executed
and delivered by MITSUBISHI and constitutes the valid and binding obligation of
MITSUBISHI, enforceable against MITSUBISHI in accordance with its terms except
as enforceability may be limited by bankruptcy, fraudulent conveyance,
insolvency, reorganization, moratorium and other laws relating to or affecting
creditors’ rights generally and by general equitable principles.  The execution, delivery and performance of
this Agreement have been duly authorized by all necessary action on the part of
MITSUBISHI, its officers and directors. 
The execution, delivery and performance of this Agreement does not
breach, violate, contravene or constitute a default under any contracts,
arrangements or commitments to which MITSUBISHI is a party or by which it is
bound nor does the execution, delivery and performance of this Agreement by
MITSUBISHI violate any order, law or regulation of any court, governmental body
or administrative or other agency having authority over it.


 


ARTICLE IX — CONFIDENTIALITY


 


9.1            Undertaking.  Each Party shall keep confidential, and other than as
provided 


 


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a confidential treatment request.  An
unredacted version of this

exhibit has been filed separately with the Commission.


 


herein, shall not use or
disclose, directly or indirectly, any trade secrets, other knowledge,
information, documents or materials, owned or Controlled by the other Party,
which have been disclosed (in tangible or electronic form or as evidenced by
meeting minutes or similar materials) to such Party after the Effective Date
and designated confidential by the disclosing Party (any such information, “Confidential Information”). 
All VERTEX Know-How and VERTEX Patents shall be deemed Confidential
Information of VERTEX; all MITSUBISHI Know-How and MITSUBISHI Patents shall be
deemed Confidential Information of MITSUBISHI; and all Joint Know-How and Joint
Patents shall be deemed Confidential Information of both Parties.  Neither VERTEX nor MITSUBISHI shall use such
Confidential Information of the other Party or jointly owned by the Parties for
any purpose, including the filing of patent applications containing such
information, without the other Party’s consent (which shall not be unreasonably
withheld), other than for conducting the MITSUBISHI Development Activities or
VERTEX Development Activities or as otherwise permitted under this Agreement.


 


9.1.1       Nondisclosure
and Nonuse.  Each Party shall take any and all lawful
measures to prevent the unauthorized use and disclosure of Confidential
Information of the other Party or jointly owned by the Parties, and to prevent
unauthorized Persons from obtaining or using such Confidential Information.


 


9.1.2       Disclosure
to Affiliates and Agents.  Each Party will refrain from
directly or indirectly taking any action which would constitute or facilitate
the unauthorized use or disclosure of Confidential Information of the other
Party or jointly owned by the Parties. 
Each Party may disclose Confidential Information of the other Party or
jointly owned by the Parties to its Affiliates, its and their officers,
employees and agents, to authorized licensees and sublicensees and to
subcontractors in connection with the development of a Compound or the
manufacture of Bulk Drug Substance or a Drug Product, but only to the extent
necessary to enable such parties to perform their obligations hereunder or
under the applicable license, sublicense or subcontract, as the case may be;
provided, that such officers, employees, agents, licensees, sublicensees and
subcontractors have entered into appropriate confidentiality agreements for
secrecy and non-use of such Confidential Information, which by their terms
shall be enforceable by injunctive relief at the request of the disclosing Party.


 


9.1.3       Liability.  Each
Party shall be liable for any unauthorized use and disclosure of Confidential
Information of the other Party or jointly owned by the Parties by its
Affiliates, its and their officers, employees and agents and any licensees,
sublicensees and subcontractors.


 


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Information redacted pursuant to
a confidential treatment request.  An
unredacted version of this

exhibit has been filed separately with the Commission.


 


9.2            Exceptions. 
Notwithstanding the foregoing, the provisions of Section 9.1 hereof
shall not apply to Confidential Information which the receiving Party can
conclusively establish:


 


(i)            has
entered the public domain without such Party’s or its Affiliates’ breach of any
obligation owed to the disclosing Party;


 


(ii)           is
permitted to be disclosed by the prior written consent of the disclosing Party;


 


(iii)          has
become known to the receiving Party or any of its Affiliates from a source
other than the disclosing Party, other than by breach of an obligation of
confidentiality owed to the disclosing Party;


 


(iv)           is
disclosed by the disclosing Party to a Third Party without restrictions on its
disclosure;


 


(v)            is
independently developed by the receiving Party or its Affiliates without use of
or reference to the Confidential Information, as evidenced by contemporary
written records;


 


(vi)           is
required to be disclosed by the receiving Party to seek Regulatory Approval
pursuant to this Agreement, provided that the receiving Party takes reasonable
and lawful actions to avoid or minimize the degree of such disclosure and to
have confidential treatment accorded to any Confidential Information disclosed;
or


 


(vii)         is
required to be disclosed by the receiving Party to comply with applicable laws
or regulations, or to defend or prosecute litigation, provided that the
receiving Party takes reasonable and lawful actions to avoid or minimize the
degree of such disclosure, to have confidential treatment accorded to any
Confidential Information disclosed and provides prior written notice to the
disclosing Party within a time period sufficiently prior to such disclosure to
permit the disclosing Party to apply for a protective order or take other
appropriate action to restrict disclosure. 
The receiving Party shall fully cooperate with the disclosing Party in
connection with the disclosing Party’s efforts to obtain any such remedy.


 


9.3            Publicity.  The Parties will agree upon the timing and content of
any initial press release or other public communications relating to this Agreement
and the transactions contemplated herein. 
Except to the extent already disclosed in that initial press release or
other public communication, no public announcement concerning the existence or
the terms of this Agreement or concerning the transactions described herein
shall be made, either directly or indirectly, by VERTEX or MITSUBISHI, except
as may be required by applicable laws, 


 


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Information redacted pursuant to
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unredacted version of this

exhibit has been filed separately with the Commission.


 


regulations, or judicial
order, without first obtaining the approval of the other Party and agreement
upon the nature, text, and timing of such announcement, which approval and
agreement shall not be unreasonably withheld.


 


9.4            Survival.  The provisions of this Article IX shall survive
the termination of this Agreement and shall extend for a period of five (5) years
thereafter.


 


ARTICLE X  — DISPUTE RESOLUTION


 


10.1          Governing Law and Jurisdiction.  This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York and of
the United States of America, without giving effect to the doctrine of conflict
of laws.


 


10.2          Dispute Resolution Process.


 


10.2.1     Joint Steering Committee. 
Except as otherwise explicitly provided herein, in the event of any
controversy or claim arising out of or relating to any provision of this
Agreement, or the collaborative effort contemplated hereby, the Parties shall,
and either Party may, refer such dispute to the JDC, and failing resolution of
the controversy or claim within thirty (30) days after such referral, the
matter shall be referred to a joint steering committee (the “Joint Steering Committee”) established by the Parties
comprising one (1) representative of each Party, who shall be appointed
(and may be replaced at any time) by such Party on notice to the other Party in
accordance with this Agreement.  Any
matters originating with the JDC on which it is unable to reach consensus
within thirty (30) days after the initial discussion thereof shall also be
referred to the Joint Steering Committee. 
Each Party’s representative to the Joint Steering Committee shall be an
executive officer of the respective Party. 
The Joint Steering Committee will meet as needed and agreed by the Joint
Steering Committee to resolve controversy or claims referred to it by the JDC
and to conduct such other activities as the Joint Steering Committee may deem
appropriate.  Each member of the Joint
Steering Committee shall have one vote in decisions, with decisions made by
unanimous vote.  If the Joint Steering
Committee is unable to resolve the controversy or claim within thirty (30) days
of its referral to it, then those matters with respect to which MITSUBISHI or
VERTEX have final decision making authority as described in Section 3.1.3
shall be referred to the applicable Party for decision.  All other matters shall be referred to the
Chief Executive Officer of VERTEX and the Chief Executive Officer of MITSUBISHI
for resolution pursuant to Section 10.2.2 hereof.


 


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Information redacted pursuant to
a confidential treatment request.  An
unredacted version of this

exhibit has been filed separately with the Commission.


 


10.2.2     Chief Executive Officer Resolution and
Arbitration.  Any matter that the Joint Steering Committee
is unable to resolve pursuant to Section 10.2.1 that is not subject to
resolution pursuant to Section 3.1.3 shall be referred to the Chief
Executive Officer of VERTEX and the Chief Executive Officer of MITSUBISHI who
shall, as soon as practicable, attempt in good faith to resolve the controversy
or claim.  If such controversy or claim
is not resolved within [***] of
the date of initial referral of the dispute to the JDC or the initial
discussion of the disputed matter by the JDC, as applicable, such controversy
or claim shall be finally settled by arbitration in accordance with the rules of
Conciliation and Arbitration of the International Chamber of Commerce (the “Rules”).  Either Party
may initiate such arbitration proceeding. 
Such arbitration shall be conducted in Cambridge, Massachusetts if such
arbitration is requested by MITSUBISHI, or in Tokyo, Japan if such arbitration
is requested by VERTEX, in either case, in English by a tribunal of three
independent and impartial arbitrators, one of which will be appointed by each
of VERTEX and MITSUBISHI, and the third of which shall have had both training
and experience as a mediator of pharmaceutical industry licensing and other
general commercial matters.  If the
parties to this Agreement cannot agree on the third arbitrator, then the third
arbitrator will be selected in accordance with the Rules and the criteria
set forth in the preceding sentence.  Any
award ordered by the tribunal must be rendered in a writing, which writing must
include an explanation of the reasons for such award.  All fees, costs and expenses of the
arbitrators, and all other costs and expenses of the arbitration, will be
shared equally by the Parties unless the tribunal in the award assesses such
costs and expenses against one of the Parties or allocates such costs and
expenses other than equally between such Parties.  Pending the award of the arbitration
tribunal, the Parties shall continue to perform their respective obligations
under this Agreement.  Notwithstanding
the foregoing, either Party may, on good cause shown, seek a temporary
restraining order and/or a preliminary injunction from a court of competent
jurisdiction, to be effective pending the institution of the arbitration
process or the deliberation and award of the arbitration tribunal.


 


ARTICLE XI  — TERM AND TERMINATION


 


11.1          Term.  The term of this Agreement shall extend
with respect to a Drug Product in a particular country from the Effective Date
until the later of:  (a) the last to
expire or be invalidated or abandoned of any VERTEX Patents containing a Valid
Patent Claim covering the Drug Product, a Compound included in a Drug Product
or a method of making or using the same in that country; or (b) ten (10) years
from the date of First Commercial Sale of the Drug 


 


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a confidential treatment request.  An
unredacted version of this

exhibit has been filed separately with the Commission.


 


Product in that country,
unless the Agreement is terminated at an earlier date pursuant to Sections
11.2, 11.3 or 11.4 hereof.


 


11.2          Termination for Cause.  In addition to
rights of termination which may be granted to either Party under other
provisions of this Agreement, either Party may terminate this Agreement upon
sixty (60) days prior written notice to the other Party upon the breach by such
other Party of any of its material obligations under this Agreement, provided
that such termination shall become effective only if the breaching Party shall
fail to remedy or cure the breach, or to initiate steps to remedy the same to
the other Party’s reasonable satisfaction, within such sixty (60) day period.


 


11.3          Termination for Bankruptcy.  If at any time
during the term of this Agreement, an Event of Bankruptcy (as defined below)
relating to either Party (the “Bankrupt Party”)
occurs, the other Party (the “Other Party”)
shall have, in addition to all other legal and equitable rights and remedies
available hereunder, the option to terminate this Agreement upon thirty (30)
days’ prior written notice to the Bankrupt Party.  It is agreed and understood that if the Other
Party does not elect to terminate this Agreement upon the occurrence of an
Event of Bankruptcy, except as may otherwise be agreed with the trustee or
receiver appointed to manage the affairs of the Bankrupt Party, the Other Party
shall continue to make all payments required of it under this Agreement as if
the Event of Bankruptcy had not occurred, and the Bankrupt Party shall not have
the right to terminate any license granted herein.  As used above, the term “Event of
Bankruptcy” shall mean (a) dissolution, termination of
existence, liquidation or business failure of either Party; (b) the
appointment of a custodian or receiver for either Party who has not been
terminated or dismissed within ninety (90) days of such appointment; (c) the
institution by either Party of any proceeding under national, federal or state
bankruptcy, reorganization, receivership or other similar laws affecting the
rights of creditors generally or the making by either Party of a composition or
any assignment or trust mortgage for the benefit of creditors or under any
national, federal or state bankruptcy, reorganization, receivership or other
similar law affecting the rights of creditors generally, which proceeding is
not dismissed within ninety (90) days of filing.


 


11.4          Termination by MITSUBISHI.  MITSUBISHI may
terminate this Agreement at any time upon sixty (60) days’ prior written notice
to VERTEX.  MITSUBISHI’s obligation of sharing
the Core Development Costs incurred by or on behalf of VERTEX or a VERTEX
Licensee pursuant to Section 3.3 shall not apply to any non-clinical or
clinical studies which Start after the date of such notice and [***]   In the event of such termination, MITSUBISHI,
at 


 


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unredacted version of this

exhibit has been filed separately with the Commission.


 


the request of VERTEX,
shall assign or otherwise transfer to VERTEX all INDs, Regulatory Approvals, or
applications therefor, with respect to a Compound or Drug Product, and VERTEX
shall have an irrevocable, worldwide, fully paid-up nonexclusive license, with
the right to sublicense, under the MITSUBISHI Technology to develop,
manufacture, have manufactured, use, sell, have sold, offer to sell and import
Bulk Drug Substance, Compound and Drug Product. 
In addition, at the request of VERTEX, MITSUBISHI shall assign to VERTEX
free of charge all of its or its Affiliates’ right, title and interest in and
to any trademarks used for a Drug Product in the Territory, and shall execute,
or cause its Affiliates to execute, such documents of transfer or assignment
and perform, or cause its Affiliates to perform, such acts as may be reasonably
necessary to transfer ownership of such trademarks to VERTEX and to enable
VERTEX to continue to maintain such trademarks at VERTEX’s expense.


 


11.5          Effect of Termination.  If this Agreement is not terminated at an
earlier date, then upon its expiration in accordance with Section 11.1
hereof in a given country MITSUBISHI shall have an irrevocable, fully paid-up
nonexclusive license, with the right to sublicense, in such country under the
VERTEX Know-How to develop, manufacture, have manufactured, use, sell, have
sold, offer to sell and import the Bulk Drug Substance, Compound and Drug
Product.  If this Agreement is not
terminated at an earlier date, then upon its expiration in accordance with Section 11.1
hereof in all countries in the Territory, MITSUBISHI shall have an irrevocable,
fully paid-up nonexclusive license, with the right to sublicense, in the
Territory under the VERTEX Know-How to develop, manufacture, have manufactured,
use, sell, have sold, offer to sell and import the Bulk Drug Substance,
Compound and Drug Product.  If this Agreement
is not terminated at an earlier date, then upon its expiration in accordance
with Section 11.1 hereof, VERTEX shall have an irrevocable, worldwide
fully paid-up nonexclusive license, with the right to sublicense, under the
MITSUBISHI Know-How to develop, manufacture, have manufactured, use, sell, have
sold, offer to sell and import the Bulk Drug Substance, Compound and Drug
Product.  Upon any termination of this
Agreement pursuant to Sections 11.2 or 11.3 hereof, MITSUBISHI shall have the
right to sell its inventory of Drug Product for a period of six (6) months
from the date of termination provided MITSUBISHI complies with the provisions
of Sections 6.5 through 6.7 hereof.  If
the license granted to MITSUBISHI under Section 2.1 hereof is terminated for
any reason, at VERTEX’s election, following good faith discussion with such
sublicensee, any of MITSUBISHI’s sublicensees at such time (other than an
Affiliate of MITSUBISHI) shall continue to have the rights and license set
forth in their sublicense agreements; provided, however, that such
sublicensee agrees in writing that 


 


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exhibit has been filed separately with the Commission.


 


VERTEX is entitled to
enforce all relevant terms and conditions of such sublicense agreement directly
against such sublicensee.  Termination of
this Agreement for any reason, or expiration of this Agreement, will not
affect: (i) obligations, including the obligation for payment of any
supply payments or royalties, which have accrued as of the date of termination
or expiration, and (ii) rights and obligations which, from the context
thereof, are intended to survive termination or expiration of this Agreement
including obligations pursuant to Articles VI, VII, IX, X, XI, XII and XIII, to
the extent applicable.  Any right to
terminate this Agreement shall be in addition to and not in lieu of all other
rights or remedies that the Party giving notice of termination may have at law
or in equity or otherwise.


 


ARTICLE XII — INDEMNIFICATION


 


12.1          Indemnification by VERTEX.  VERTEX shall indemnify and hold
MITSUBISHI,  its Affiliates, and their
employees, officers, directors and agents harmless from and against any loss,
damage, action, suit, claim, demand, liability, judgment, cost or expense (a “Loss”), that may be brought, instituted or arise against or
be incurred by such Persons to the extent such Loss is based on or arises out
of:


 


(a)           the
development, manufacture, use, sale, importation, offer to sell, storage or
handling of Bulk Drug Substance, a Compound or a Drug Product by VERTEX,  its Affiliates, the VERTEX Licensees or their
representatives, agents, sublicensees or subcontractors under this Agreement,
or any actual or alleged violation of law resulting therefrom (with the
exception of Losses based on infringement or misappropriation of intellectual
property rights); or


 


(b)            the
breach by VERTEX of any of its covenants, representations or warranties set
forth in this Agreement;


 


provided, however, that the foregoing indemnification and hold harmless
obligation shall not apply to any Loss to the extent such Loss is caused by the
negligent or willful misconduct of MITSUBISHI, its Affiliates, or their
employees, officers, directors, agents, representatives, licensees,
sublicensees or subcontractors.


 


12.2          Indemnification by MITSUBISHI.  MITSUBISHI shall indemnify and hold
VERTEX, [***], their Affiliates,
and their and their Affiliates’ employees, officers, directors and agents,
harmless from and against any Loss that may be brought, instituted or arise
against or be incurred by such Persons to the extent such Loss is based on or
arises out of:


 


42

















 


Information redacted pursuant to
a confidential treatment request.  An
unredacted version of this

exhibit has been filed separately with the Commission.


 


(a)           the
development, manufacture, use, sale, importation, offer to sell, storage or
handling of Bulk Drug Substance, a Compound or a Drug Product by MITSUBISHI,
its Affiliates or their representatives, agents, licensees, sublicensees or
subcontractors under this Agreement, or any actual or alleged violation of law
resulting therefrom (with the exception of Losses based on infringement or
misappropriation of intellectual property rights); or


 


(b)            the
breach by MITSUBISHI of any of its covenants, representations or warranties set
forth in this Agreement;


 


provided, however, that the foregoing indemnification and
hold harmless obligation shall not apply to any Loss to the extent such Loss is
caused by the negligent or willful misconduct of VERTEX, its Affiliates the
VERTEX Licensees or their employees, officers, directors, agents,
representatives, sublicensees or subcontractors; and provided further,
however, that [***].


 


12.3          Claims Procedures.  Each Party entitled to be indemnified by
the other Party (an “Indemnified Party”)
pursuant to Section 12.1 or 12.2 hereof shall give notice to the other Party
(an “Indemnifying Party”) promptly after
such Indemnified Party has actual knowledge of any threatened or asserted claim
or demand as to which indemnity may be sought, and shall permit the
Indemnifying Party to assume the defense of any such claim or demand or any
litigation resulting therefrom; provided that:


 


(a)            Counsel
for the Indemnifying Party, who shall conduct the defense of such claim, demand
or any litigation resulting therefrom, shall be approved by the Indemnified
Party (whose approval shall not unreasonably be withheld) and the Indemnified
Party may participate in such defense at such Party’s expense (unless (i) the
employment of counsel by such Indemnified Party has been authorized by the
Indemnifying Party; or (ii) the Indemnified Party shall have reasonably
concluded that there may be a conflict of interest between the Indemnifying
Party and the Indemnified Party in the defense of such action, in each of which
cases the Indemnifying Party shall pay the reasonable fees and expenses of one
law firm serving as counsel for all Indemnified Parties, which law firm shall
be subject to approval, not to be unreasonably withheld, by the Indemnifying
Party);


 


(b)            The
failure of any Indemnified Party to give notice as provided herein shall not
relieve the Indemnifying Party of its obligations under this Agreement to the
extent that the failure to give notice did not result in harm to the
Indemnifying Party;


 


(c)           No
Indemnifying Party, in the defense of any such claim. demand or litigation,
shall, except with the approval of each Indemnified Party which approval shall
not be unreasonably withheld, consent to entry of any judgment or enter into
any settlement which (i) 


 


43














 


Information redacted pursuant to
a confidential treatment request.  An
unredacted version of this

exhibit has been filed separately with the Commission.


 


would result in
injunctive or other relief being imposed against the Indemnified Party; or (ii) does
not include as an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party of a release from all liability in respect
to such claim or litigation.  The
Indemnified Party shall have no right to settle or compromise any such claim,
demand or litigation without the Indemnifying Party’s prior written consent;
and


 


(d)           Each
Indemnified Party shall furnish such information and assistance regarding
itself or the claim or demand in question as an Indemnifying Party may
reasonably request in writing and shall be reasonably required in connection
with the defense of such claim, demand or litigation resulting therefrom.


 


12.4          Limitation of Liability.  Except with respect to Third-Party
actions, suits, claims or demands subject to indemnification pursuant to
Sections 12.1 and 12.2 above, neither Party shall be liable to the other for
indirect, incidental, special, punitive, exemplary or consequential damages
arising out of or resulting from this Agreement.


 


12.5          Insurance.  Each Party shall maintain and keep in force
for the term of this Agreement insurance that shall be adequate to cover its
indemnification obligations hereunder and that is commensurate with the
insurance that such Party maintains with respect to other comparable pharmaceutical
or biotechnology products it is developing and/or commercializing.  It is understood that such insurance shall
not be construed to limit a Party’s liability with respect to such
indemnification obligations.  Such
insurance shall be placed with a first class insurance carrier with at least a
BBB rating by Standard & Poor.


 


ARTICLE XIII— MISCELLANEOUS PROVISIONS


 


13.1          Waiver.  No provision of the Agreement may be waived
except in writing by both Parties hereto. 
No failure or delay by either Party hereto in exercising any right or
remedy hereunder or under applicable law will operate as a waiver thereof, or a
waiver of that or any other right or remedy on any subsequent occasion.


 


13.2          Force Majeure.  Neither Party will be in breach
hereof by reason of its delay in the performance of or failure to perform any
of its obligations hereunder, if that delay or failure is caused by fire,
floods, embargoes, war, terrorism, insurrections, riots, civil commotions,
strikes, lockouts or other labor disturbances, sabotage, acts of God, omissions
or delays in acting by any governmental authority, acts of a government or
agency thereof or judicial orders or decrees, or any similar cause beyond its
control and without its fault or negligence; provided, 


 


44

















 


Information redacted pursuant to
a confidential treatment request.  An
unredacted version of this

exhibit has been filed separately with the Commission.


 


however, the Party claiming force majeure shall
promptly notify the other Party of the existence of such force majeure, shall
use its best efforts to avoid or remedy such force majeure and shall continue
performance hereunder with the utmost dispatch whenever such force majeure is
avoided or remedied.


 


13.3          Registration of License.  MITSUBISHI may, at its expense, register
the license granted under this Agreement in any country where the use, sale,
importation, offer to sell or manufacture of a Drug Product in such country
would be covered by a Valid Patent Claim. 
Upon request by MITSUBISHI, VERTEX agrees promptly to execute any “short
form” licenses submitted to it by MITSUBISHI in order to effect the foregoing
registration in such country, but such licenses shall in no way alter or affect
the obligations of the Parties hereunder.


 


13.4          Severability.  Should one or more provisions
of this Agreement be or become invalid, then the Parties hereto shall attempt
to agree upon valid provisions in substitution for the invalid provisions,
which in their economic effect come so close to the invalid provisions that it
can be reasonably assumed that the Parties would have accepted this Agreement
with those new provisions.  If the Parties
are unable to agree on such valid provisions, the invalidity of such one or
more provisions of this Agreement shall nevertheless not affect the validity of
the Agreement as a whole, unless the invalid provisions are of such essential
importance to this Agreement that it may be reasonably presumed that the
Parties would not have entered into this Agreement without the invalid
provisions.


 


13.5          Government Acts.  In the event that any act,
regulation, directive, or law of a country or its government, including its
departments, agencies or courts, should make impossible or prohibit, restrain,
modify or limit any material act or obligation of MITSUBISHI or VERTEX under
this Agreement, the Party, if any, not so affected, shall have the right, at
its option, to suspend or terminate this Agreement as to such country, if good
faith negotiations between the Parties to make such modifications therein as
may be necessary to fairly address the impact thereof are not successful after
a reasonable period of time in producing mutually acceptable modifications to
this Agreement.


 


13.6          Government Approvals.  Each Party
will obtain any government approval required in its country of domicile, or
under any treaties or international agreements to which its country of domicile
is a signatory, to enable this Agreement to become effective, or to enable any
payment hereunder to be made, or any other obligation hereunder to be observed
or performed.  Each Party will keep the
other informed of progress in obtaining any such government approval, and will
cooperate with the other Party in any such efforts.


 


45

















 


Information redacted pursuant to
a confidential treatment request.  An
unredacted version of this

exhibit has been filed separately with the Commission.


 


13.7          Assignment; Successors and Assigns. 
This
Agreement may not be assigned or otherwise transferred by either Party without
the prior written consent of the other Party; provided, however, that
either Party may assign this Agreement, without the consent of the other Party,
(i) to any of its Affiliates, if the assigning Party guarantees the full
performance of its Affiliates’ obligations hereunder, or (ii) in
connection with the transfer or sale of all or substantially all of its assets
or business or the assets and business to which this Agreement relates or in
the event of its merger or consolidation with another company.  To the extent any rights and/or obligations
of a Party are held by an Affiliate of such Party then any business
transaction, change in control of a majority of the voting power or other event
that, in each case, causes such Affiliate to cease to be an Affiliate of the Party,
shall be deemed an assignment of the rights and/or obligations held by such
former Affiliate and require prior written consent of the other Party.  Any purported assignment in contravention of
this Section 13.7 shall, at the option of the nonassigning Party, be null
and void and of no effect.  No assignment
shall release either Party from responsibility for the performance of any of
its accrued obligations hereunder.  This Agreement shall be binding
upon and enforceable against the successor to or any permitted assignee of
either of the Parties hereto.


 


13.8          Export Controls.  This Agreement is made subject to any
restrictions concerning the export of materials and technology from the United
States which may be imposed upon either Party to this Agreement from time to
time by the United States Government.  In
the event any such restrictions are imposed after the Effective Date and
thereby render any provisions of this Agreement invalid or unenforceable, the
provisions of Section 13.4 of this Agreement shall be applicable to those
provisions.  MITSUBISHI will not export,
directly or indirectly, any VERTEX Technology or any Bulk Drug Substance,
Compounds or Drug Products utilizing such technology to any countries for which
the United States Government or any agency thereof at the time of such export
requires an export license or other governmental approval, without first
obtaining the written consent to do so from the Department of Commerce or other
applicable agency of the United States Government in accordance with the
applicable statute or regulation.


 


13.9          Affiliates.  Each Party may perform its obligations
hereunder personally or through one or more Affiliates, although each Party
shall nonetheless be solely responsible for the performance of its
Affiliates.  Neither Party shall permit
any of its Affiliates to commit any act (including any act of omission) which
such Party is prohibited hereunder from committing directly.


 


46

















 


Information redacted pursuant to
a confidential treatment request.  An
unredacted version of this

exhibit has been filed separately with the Commission.


 


13.10       Counterparts.  This Agreement may be signed in any
number of counterparts with the same effect as if the signatures to each
counterpart were upon a single instrument, and all such counterparts together
shall constitute the same agreement.


 


13.11       No Agency.  Nothing herein contained shall be deemed to
create an agency, joint venture, amalgamation, partnership or similar
relationship between MITSUBISHI and VERTEX. 
Notwithstanding any of the provisions of this Agreement, neither Party
shall at any time enter into, incur, or hold itself out to Third Parties as
having authority to enter into or incur, on behalf of the other Party, any
commitment, expense, or liability whatsoever, and all contracts, expenses and
liabilities in connection with or relating to the obligations of each Party
under this Agreement shall be made, undertaken, incurred or paid exclusively by
that Party on its own behalf, and not as an agent or representative of the
other Party.


 


13.12       Notice.  All communications between the Parties with
respect to any of the provisions of this Agreement will be sent to the
addresses set out below, or to other addresses as designated by one Party to
the other by notice pursuant hereto, by air courier (which shall be deemed
received by the other Party on the second (2nd) business day following deposit
with the air courier company), or by facsimile transmission, or other
electronic means of communication (which shall be deemed received when
transmitted), with confirmation by air courier, sent by the close of business
on or before the next following business day:


 


If to
MITSUBISHI, at:


 


Mitsubishi
Pharma Corporation


6-9,
Hiranomachi 2 Chome, Chuo-ku


Osaka
541-0046, Japan


Fax:  81-6-6227-4702


Attention:  General Manager of Corporate Licensing
Department


 


If to
VERTEX, at:


 


Vertex
Pharmaceutical Incorporated


130
Waverly Street


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


Fax:  617-444-7117


Attention:  General Counsel


 


13.13       Headings.  The article, section and paragraph headings
are for convenience of reference only and will not be deemed to affect in any
way the language of the provisions to which they refer.


 


13.14       Entire Agreement.  This Agreement, including the
Schedules appended hereto, 


 


47

















 


Information redacted pursuant to
a confidential treatment request.  An
unredacted version of this

exhibit has been filed separately with the Commission.


 


contains the entire
understanding of the Parties relating to the matters referred to herein and may
only be amended by a written document referencing this Agreement, duly executed
on behalf of the respective Parties.


 


13.15       Rules of Construction.  The use in
this Agreement of the terms “include” or “including” means “include, without
limitation” or “including, without limitation,” respectively.


 


[Signature Page Follows]


 


48

















 


Information redacted pursuant to
a confidential treatment request.  An
unredacted version of this

exhibit has been filed separately with the Commission.


 


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


 


 


	
  VERTEX PHARMACEUTICALS INCORPORATED

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Joshua S.
  Boger

  	
   

  
	
  Name: 

  	
  Joshua S. Boger,
  Ph.D.

  	
   

  
	
  Title:

  	
  Chairman and
  Chief Executive Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Witness

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Vicki L.
  Sato

  	
   

  
	
  Name: 

  	
  Vicki L. Sato,
  Ph.D.

  	
   

  
	
  Title:

  	
  President

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  MITSUBISHI PHARMA CORPORATION

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Teruo Kobori

  	
   

  
	
  Name: 

  	
  Teruo Kobori

  	
   

  
	
  Title:

  	
  President &
  Chief Executive Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Witness

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Akihiro Tobe

  	
   

  
	
  Name: 

  	
  Akihiro Tobe,
  Ph.D.

  	
   

  
	
  Title:

  	
  Managing
  Executive Officer, Division Manager, Strategic Planning Division

  



 


49














 


Information redacted pursuant to
a confidential treatment request.  An
unredacted version of this

exhibit has been filed separately with the Commission.


 


Schedule 1.33


 


MITSUBISHI Patents


 


None as of the Effective Date.


 


50

















 


Information redacted pursuant to
a confidential treatment request.  An
unredacted version of this

exhibit has been filed separately with the Commission.


 


Schedule 1.49


 


Territory


 


[***]


 


Japan


 


[***]


 


People’s Republic of China


 


51

















 


Information redacted pursuant to
a confidential treatment request.  An
unredacted version of this

exhibit has been filed separately with the Commission.


 


Schedule 1.56


 


VERTEX Patents


 


	
  DOCKET
  NO

  	
   

  	
  SERIAL
  NO

  	
   

  	
  PATENT
  NO

  	
   

  	
  TITLE

  	
   

  	
  COUNTRY

  	
   

  	
  STATUS

  	
   

  	
  FILED

  	
   

  	
  ISSUED

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  VPI/00-131 CN

  	
   

  	
  01815055.1

  	
   

  	
   

  	
   

  	
  PEPTIDOMIMETIC PROTEASE INHIBITORS

  	
   

  	
  CHINA

  	
   

  	
  PENDING

  	
   

  	
  8/31/01

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  VPI/00-131 EA

  	
   

  	
  200300318

  	
   

  	
   

  	
   

  	
  PEPTIDOMIMETIC PROTEASE INHIBITORS

  	
   

  	
  EURASIA

  	
   

  	
  PENDING

  	
   

  	
  8/31/01

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  VPI/00-131 HK

  	
   

  	
  Awaiting confirmation

  	
   

  	
   

  	
   

  	
  PEPTIDOMIMETIC PROTEASE INHIBITORS

  	
   

  	
  HONG KONG

  	
   

  	
  PENIDNG

  	
   

  	
  Awaiting confirmation

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  VPI/00-131 ID

  	
   

  	
  W-00 200300420

  	
   

  	
   

  	
   

  	
  PEPTIDOMIMETIC PROTEASE INHIBITORS

  	
   

  	
  INDONESIA

  	
   

  	
  PENDING

  	
   

  	
  8/31/01

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  VPI/00-131 JP

  	
   

  	
  2002-523884

  	
   

  	
   

  	
   

  	
  PEPTIDOMIMETIC PROTEASE INHIBITORS

  	
   

  	
  JAPAN

  	
   

  	
  PENDING

  	
   

  	
  8/31/01

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  VPI/00-131 KR

  	
   

  	
  10-2003-700-2880

  	
   

  	
   

  	
   

  	
  PEPTIDOMIMETIC PROTEASE INHIBITORS

  	
   

  	
  SOUTH KOREA

  	
   

  	
  PENDING

  	
   

  	
  8/31/01

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  VPI/00-131 MY

  	
   

  	
  PI20014137

  	
   

  	
   

  	
   

  	
  PEPTIDOMIMETIC PROTEASE INHIBITORS

  	
   

  	
  MALAYSIA

  	
   

  	
  PENDING

  	
   

  	
  9/3/01

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  VPI/00-131 PH

  	
   

  	
  1-2003-500074

  	
   

  	
   

  	
   

  	
  PEPTIDOMIMETIC PROTEASE INHIBITORS

  	
   

  	
  PHILIPPINES

  	
   

  	
  PENDING

  	
   

  	
  8/31/01

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  VPI/00-131 SG

  	
   

  	
  200300451-2

  	
   

  	
   

  	
   

  	
  PEPTIDOMIMETIC PROTEASE INHIBITORS

  	
   

  	
  SINGAPORE

  	
   

  	
  PENDING

  	
   

  	
  8/31/01

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  VPI/00-131 TH

  	
   

  	
  068019

  	
   

  	
   

  	
   

  	
  PEPTIDOMIMETIC PROTEASE INHIBITORS

  	
   

  	
  THAILAND

  	
   

  	
  PENDING

  	
   

  	
  8/30/01

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  VPI/00-131 TW

  	
   

  	
  90121629

  	
   

  	
   

  	
   

  	
  PEPTIDOMIMETIC PROTEASE INHIBITORS

  	
   

  	
  TAIWAN

  	
   

  	
  PENDING

  	
   

  	
  8/31/01

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  VPI/00-131 VN

  	
   

  	
  1-2003-00183

  	
   

  	
   

  	
   

  	
  PEPTIDOMIMETIC PROTEASE INHIBITORS

  	
   

  	
  VIET NAM

  	
   

  	
  PENDING

  	
   

  	
  8/31/01

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  VPI/96-11 CN

  	
   

  	
  97180151.7

  	
   

  	
   

  	
   

  	
  INHIBITORS OF SERINE PROTEASES, PARTICULARLY HEPATITIS C
  VIRUS NS3 PROTEASE

  	
   

  	
  CHINA

  	
   

  	
  ALLOWED

  	
   

  	
  10/17/1997

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  VPI/96-11 EA

  	
   

  	
  199900388

  	
   

  	
  001915

  	
   

  	
  INHIBITORS OF SERINE PROTEASES, PARTICULARLY HEPATITIS C
  VIRUS NS3 PROTEASE

  	
   

  	
  EURASIAN PATENT
  OFFICE

  	
   

  	
  ISSUED

  	
   

  	
  10/17/1997

  	
   

  	
  10/22/01

  



 


52

















 


Information redacted pursuant to
a confidential treatment request.  An
unredacted version of this

exhibit has been filed separately with the Commission.


 


Schedule 1.59


 


VX-905


 


[***]


 


53

















 


Information redacted pursuant to
a confidential treatment request.  An
unredacted version of this

exhibit has been filed separately with the Commission.


 


Schedule 1.60


 


VX-950


 





 


54