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ITEM 1.	BUSINESS

•	VX-661, a corrector compound that we are evaluating in a Phase 3 development program in combination with ivacaftor in multiple CF patient populations who have at least one copy of the F508del mutation in their CFTR gene;

•	VX-371, an investigational epithelial sodium channel, or ENaC, inhibitor, that is being evaluated in a Phase 2 development program and which we exclusively licensed from Parion Sciences, Inc., or Parion, in 2015; and

•	VX-152 and VX-440, two next-generation CFTR corrector compounds that entered Phase 1 clinical trials in the fourth quarter of 2015 and that we plan to evaluate as part of combination treatment regimens.

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•	Two copies of the F508del in their CFTR gene: We expect enrollment to be complete in mid-2016 and expect data from this clinical trial by early 2017;

•	One copy of the F508del mutation in their CFTR gene and a second mutation in their CFTR gene that results in a gating defect in the CFTR protein: We expect enrollment to be complete by the end of 2016 and expect data from this clinical trial in the first half of 2017;

•	One copy of the F508del mutation in their CFTR gene and a second mutation in their CFTR gene that results in residual CFTR function: We expect enrollment to be complete by the end of 2016 and expect data from this clinical trial in the first half of 2017; and

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One copy of the F508del mutation in their CFTR gene and a second mutation that results in minimal CFTR function: We expect enrollment in the first part of this clinical trial to be complete in mid-2016 and an interim futility analysis of efficacy data, which will be conducted by an independent third-party, to be completed by the end of 2016. If supported by data from the first part of this clinical trial, we would subsequently initiate the second part of this clinical trial.

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•	Two copies of the F508del mutation in their CFTR gene;

•	One copy of the F508del mutation in their CFTR gene and a second mutation in their CFTR gene that results in minimal CFTR function; and

•	One copy of the F508del mutation in their CFTR gene and a second mutation in their CFTR gene that is known to be responsive to ivacaftor.

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•	U.S. and foreign patent applications covering CF potentiators, correctors and ENaC inhibitors, including ivacaftor, lumacaftor, VX-661, VX-371, VX-152 and VX-440 and many other related compounds, and the use of those potentiators, correctors and ENaC inhibitors to treat CF.

•	U.S. and foreign patents and patent applications covering VX-970, VX-803 and VX-984 and the use of VX-970, VX-803 and VX-984 to treat oncology indications.

•	U.S. and foreign patents and patent applications covering VX-150 and VX-241 and the use of VX-150 and VX-241 to treat pain indications.

•	U.S. and foreign patents and patent applications covering VX-210 and the use of VX-210 to treat neurology indications.

•	U.S. and foreign patents and patent applications covering the manufacture, pharmaceutical compositions, related solid forms, formulations, dosing regimens and methods of use of these compounds, including ivacaftor and lumacaftor.

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•	refusal to approve or delay in review of pending applications;

•	withdrawal of an approval or the implementation of limitations on a previously approved indication for use;

•	imposition of a clinical hold, a risk mitigation and evaluation strategy or other safety-related limitations;

•	warning letters or “untitled letters”;

•	product seizures;

•	total or partial suspension of production or distribution; or

•	injunctions, fines, disgorgement, or civil or criminal penalties.

•	completion of preclinical laboratory tests, animal studies and formulation studies conducted according to Good Laboratory Practices, or GLP, and other applicable regulations;

•	submission to the FDA of an investigational new drug, or IND, application, which must become effective before clinical trials in the United States may begin;

•	performance of adequate and well-controlled clinical trials according to Good Clinical Practices, or GCP, to establish the safety and efficacy of the proposed drug for its intended use;

•	submission to the FDA of an NDA;

•	satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the product will be produced to assess compliance with cGMP to assure that the facilities, methods and controls are adequate to preserve the product’s identity, strength, quality and purity; and

•	FDA review and approval of the NDA.

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Phase 1. The drug initially is introduced into healthy human subjects and tested for safety, dosage tolerance, absorption, metabolism, distribution and elimination. In the case of some drug candidates for severe or life-threatening diseases, such as cancer, especially when the drug candidate may be inherently too toxic to ethically administer to healthy volunteers, the initial human testing is often conducted in patients.

•	Phase 2. Clinical trials are initiated in a limited patient population intended to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the drug candidate for specific targeted diseases and to determine dosage tolerance and optimal dosage.

•	Phase 3. Clinical trials are undertaken to further evaluate dosage, clinical efficacy and safety in an expanded patient population at geographically dispersed clinical trial sites. These clinical trials are intended to establish the overall risk-benefit ratio of the drug candidate and provide an adequate basis for regulatory approval and product labeling.

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•	record-keeping requirements;

•	reporting of adverse experiences with the product;

•	providing the FDA with updated safety and efficacy information;

•	drug sampling and distribution requirements;

•	notifying the FDA and gaining its approval of specified manufacturing or labeling changes;

•	complying with certain electronic records and signature requirements; and

•	complying with FDA promotion and advertising requirements.

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•	prevalence and severity of adverse side-effects;

•	lack of reimbursement availability from third-party payors;

•	lower demonstrated efficacy, safety and/or tolerability compared to other drugs;

•	lack of cost-effectiveness;

•	a decision to wait for the approval of other therapies in development that have significant perceived advantages over our drug;

•	convenience and ease of administration;

•	other potential advantages of alternative treatment methods; and

•	ineffective sales, marketing and/or distribution support.

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•	offer therapeutic or other improvement over existing competitive therapies;

•	be proven safe and effective in clinical trials;

•	meet applicable regulatory standards;

•	be capable of being produced in commercial quantities at acceptable costs; or

•	if approved for commercial sale, be successfully marketed as pharmaceutical products.

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•	ongoing discussions with the FDA or comparable foreign authorities regarding the scope or design of our clinical trials and the number of clinical trials we must conduct;

•	delays in enrolling volunteers or patients into clinical trials, including as a result of low numbers of patients that meet the eligibility criteria for the trial;

•	a lower than anticipated retention rate of volunteers or patients in clinical trials;

•	the need to repeat clinical trials as a result of inconclusive results, unforeseen complications in testing or clinical investigator error;

•	inadequate supply or deficient quality of drug candidate materials or other materials necessary for the conduct of our clinical trials;

•	unfavorable FDA or foreign regulatory authority inspection and review of a manufacturing facility that supplied clinical trial materials or its relevant manufacturing records or a clinical trial site or records of any clinical or preclinical investigation;

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•	unfavorable scientific results from clinical trials;

•	serious and unexpected drug-related side-effects experienced by participants in our clinical trials or by participants in clinical trials being conducted by our competitors to evaluate drug candidates with similar mechanisms of action or structures to drug candidates that we are developing;

•	favorable results in testing of our competitors’ drug candidates, or FDA or foreign regulatory authority approval of our competitors’ drug candidates; or

•	action by the FDA or a foreign regulatory authority to place a clinical hold or partial clinical hold on a trial or compound or deeming the clinical trial conduct as problematic.

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•	failure to successfully further develop the acquired or licensed drugs or technology or to achieve strategic objectives, including successfully developing and commercializing the drugs, drug candidates or technologies that we acquire or license;

•	inadequate or unfavorable data from clinical trials evaluating the acquired or licensed drug or drug candidates;

•	entry into markets in which we have no or limited direct prior experience or where competitors in such markets have stronger market positions;

•	disruption of our ongoing business and distraction of our management and employees from other opportunities and challenges;

•

potential failure of the due diligence processes to identify significant problems, liabilities or other shortcomings or challenges of an acquired company, or acquired or licensed product or technology, including but not limited to, problems, liabilities or other shortcomings or challenges with respect to intellectual property, product quality, safety, accounting practices, employee, customer or third party relations and other known and unknown liabilities;

•	liability for activities of the acquired company or licensor before the acquisition or license, including intellectual property infringement claims, violations of laws, commercial disputes, tax liabilities, and other known and unknown liabilities;

•	exposure to litigation or other claims in connection with, or inheritance of claims or litigation risk as a result of an acquisition or license, including but not limited to, claims from terminated employees, customers, former equity holders or other third-parties;

•	difficulty in integrating the drugs, drug candidates, technologies, business operations and personnel of an acquired company; and

•	difficulties in the integration of the acquired company’s departments, systems, including accounting, human resource and other administrative systems, technologies, books and records, and procedures, as well as in maintaining uniform standards, controls, including internal control over financial reporting required by the Sarbanes-Oxley Act of 2002 and related procedures and policies.

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Our collaborators may change the focus of their development and commercialization efforts or may have insufficient resources to effectively develop our drug candidates. The ability of some of our products and drug candidates to reach their potential could be limited if collaborators decrease or fail to increase development or commercialization efforts related to those products or drug candidates. Our collaboration agreements provide our collaborators with a level of discretion in determining the amount and timing of efforts and resources that they will apply to these collaborations.

•	Any future collaboration agreements may have the effect of limiting the areas of research and development that we may pursue, either alone or in collaboration with third parties.

•	Collaborators may develop and commercialize, either alone or with others, drugs that are similar to or competitive with the drugs or drug candidates that are the subject of their collaborations with us.

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Disagreements with collaborators, including disagreements over proprietary rights, contract interpretation or the preferred course of development, might cause delays or termination of the research, development or commercialization of drug candidates, might lead to additional responsibilities for us with respect to drug candidates, or might result in litigation or arbitration. Any such disagreements would divert management attention and resources and be time-consuming and expensive.

•	Collaborators may not properly maintain or defend our intellectual property rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential litigation.

•	Collaborators may infringe the intellectual property rights of third parties, which may expose us to litigation and potential liability.

•	Investigations and/or compliance or enforcement actions against a collaborator, which may expose us to indirect liability as a result of our partnership with such collaborator.

•	Our collaboration agreements are subject to termination under various circumstances.

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•	implement and clearly communicate our corporate-wide strategies;

•	enhance our operational and financial infrastructure, including our controls over records and information;

•	enhance our operational, financial and management processes, including our cross-functional decision-making processes and our budget prioritization systems;

•	train and manage our global employee base;

•	transition from a U.S.-centric company into an organization capable of developing and commercializing multiple drug candidates in international markets; and

•	enhance our compliance and legal resources.

•	differing regulatory requirements for drug approvals and regulation of approved drugs in foreign countries;

•	collectibility of accounts receivable;

•	unexpected changes in tariffs, trade barriers and regulatory requirements;

•	economic weakness, including inflation, or political instability in particular foreign economies and markets;

•	differing levels of enforcement and/or recognition of contractual and intellectual property rights;

•	complying with local laws and regulations, which are interpreted and enforced differently across jurisdictions and which can change significantly over time;

•	foreign taxes, including withholding of payroll taxes;

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•	foreign currency fluctuations, which could result in reduced revenues or increased operating expenses, and other obligations incident to doing business or operating in another country;

•	workforce uncertainty in countries where labor unrest is more common than in the United States;

•	import and export licensing requirements, tariffs, and other trade and travel restrictions;

•	production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad; and

•	business interruptions resulting from geo-political actions, including war and terrorism.

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•	the information contained in our quarterly earnings releases, including our net product revenues and operating expenses for completed periods and guidance regarding future periods;

•	announcements of FDA actions with respect to our drugs or our competitors’ drugs, or regulatory filings for our drug candidates or those of our competitors, or announcements of interim or final results of clinical trials or nonclinical studies relating to our drugs, drug candidates or those of our competitors;

•	prescription data and other information disclosed by third parties regarding our business or products;

•	technological innovations or the introduction of new drugs by our competitors;

•	government regulatory action;

•	public concern as to the safety of drugs developed by us or our competitors;

•	developments in patent or other intellectual property rights or announcements relating to these matters;

•	developments in domestic and international governmental policy or regulation, for example, relating to intellectual property rights;

•	developments relating specifically to other companies and market conditions for pharmaceutical and biotechnology stocks or stocks in general;

•	business development, capital structuring or financing activities; and

•	general worldwide or national economic, political and capital market conditions.

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•	our expectations regarding the amount of, timing of and trends with respect to our revenues, costs and expenses and other gains and losses, including those related to net product revenues from KALYDECO and ORKAMBI;

•	our expectations regarding clinical trials, development timelines and regulatory authority filings and submissions for ivacaftor, lumacaftor, VX-661, VX-371 (formerly P-1037), VX-152, VX-440, VX-970, VX-803, VX-984, VX-150, VX-241 and VX-210, as well as the sNDA for KALYDECO for patients with CF two years of age and older who have one of 23 residual function mutations;

•	future interactions with the FDA regarding our sNDA for KALYDECO for patients with CF two years of age and older who have one of 23 residual function mutations that the FDA determined it could not approve in its present form;

•	our expectations regarding planned clinical trials for next-generation correctors based upon pre-clinical data;

•	our ability to successfully market KALYDECO and ORKAMBI or any of our other drug candidates for which we obtain regulatory approval;

•	our expectations regarding the timing and structure of clinical trials of our drugs and drug candidates, including ivacaftor, lumacaftor, VX-661, VX-371 (formerly P-1037), VX-152, VX-440, VX-970, VX-803, VX-984, VX-150, VX-241 and VX-210, and the expected timing of our receipt of data from our ongoing and planned clinical trials;

•	the data that will be generated by ongoing and planned clinical trials and the ability to use that data to advance compounds, continue development or support regulatory filings;

•	our beliefs regarding the support provided by clinical trials and preclinical and nonclinical studies of our drug candidates for further investigation, clinical trials or potential use as a treatment;

•	our plan to continue investing in our research and development programs and our strategy to develop our drug candidates, alone or with third party-collaborators;

•	the establishment, development and maintenance of collaborative relationships;

•	potential business development activities;

•	potential fluctuations in foreign currency exchange rates;

•	our ability to use our research programs to identify and develop new drug candidates to address serious diseases and significant unmet medical needs; and

•	our liquidity and our expectations regarding the possibility of raising additional capital.

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ITEM 1B.	UNRESOLVED STAFF COMMENTS

ITEM 2.	PROPERTIES

ITEM 3.	LEGAL PROCEEDINGS

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ITEM 4.	MINE SAFETY DISCLOSURES

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ITEM 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

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ITEM 6.	SELECTED FINANCIAL DATA

(1)	In 2013, we recorded $203.4 million of collaborative revenues from Janssen NV, which were primarily attributable to a 2013 amendment to our collaboration agreement with Janssen NV. In 2011, we recognized $318.5 million in milestone revenues from Janssen NV and Mitsubishi Tanabe Pharma Corporation. See Note B, “Collaborative Arrangements.”

(2)

Total costs and expenses included (i) in 2013 and 2012, an aggregate of $10.4 million and $133.2 million, respectively, of write-offs for excess and obsolete inventories, (ii) in 2013 and 2012, total costs and expenses included intangible asset impairment charges of $412.9 million and $105.8 million, respectively and (iii) in 2015, 2014 and 2013, $2.2 million, $50.9 million and $40.5 million, respectively, of restructuring charges. See Note H, “Inventories,” Note J, “Intangible Assets and Goodwill” and Note Q, “Restructuring Expenses.”

(3)	(Loss) income from discontinued operations attributable to Vertex relates to our collaboration with Alios BioPharma, Inc., in 2011 through 2013, which we deconsolidated as of December 31, 2013. See Note B, “Collaborative Arrangements.”

(4)	In 2014, we borrowed $300.0 million in the form of a senior secured term loan that matures in July 2017. In 2013, our convertible senior subordinated notes (due 2015) with an aggregate principal amount of $400.0 million were converted into common stock or redeemed. See Note L, “Long Term Obligations.”

(5)	In 2011, we entered into two leases for our corporate headquarters, which we occupied in December 2013. We are deemed for accounting purposes to be the owner of the buildings. See Note L, “Long Term Obligations.”

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ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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•	VX-661, a corrector compound that we are evaluating in a Phase 3 development program in combination with ivacaftor in multiple CF patient populations who have at least one copy of the F508del mutation in their CFTR gene;

•	VX-371, an investigational epithelial sodium channel, or ENaC, inhibitor, that is being evaluated in a Phase 2 development program and which we exclusively licensed from Parion Sciences, Inc. in 2015; and

•	VX-152 and VX-440, two next-generation CFTR corrector compounds that entered Phase 1 clinical trials in the fourth quarter of 2015 and that we plan to evaluate as part of combination treatment regimens.

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•	revenue recognition;

•	intangible assets;

•	collaborations and variable interest entities;

•	research and development accruals;

•	commercial supplies and inventories;

•	income taxes;

•	leases;

•	restructuring expenses; and

•	stock-based compensation expense.

•	there is persuasive evidence that an arrangement exists between us and our customer;

•	collectability is reasonably assured; and

•	the price is fixed or determinable.

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•	Beginning in the second quarter of 2015, we are consolidating all of Parion’s expenses and revenues into our consolidated statements of operations, eliminating all intercompany balances and transactions. As of December 31, 2015, our consolidated balance sheet includes Parion’s balances.

•	Beginning in the fourth quarter of 2014, we are consolidating all of BioAxone’s expenses and revenues into our consolidated statements of operations, eliminating all intercompany balances and transactions. As of December 31, 2015, our consolidated balance sheet includes BioAxone’s balances.

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As of September 30, 2014, we concluded that we no longer had significant continuing involvement with Alios due to our intent and ability to terminate the Alios Agreement, which we terminated during the fourth quarter of 2014; therefore, the operations of Alios, including collaboration expenses reimbursed by Vertex are presented as discontinued operations for the periods presented in these consolidated financial statements.

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In 2013, the deconsolidation of Alios resulted in a gain of $68.2 million attributable to Vertex. The $68.2 million gain was approximately equal to the difference between (i) losses we recorded in 2011 and 2012 based on increases in the fair value of contingent milestone payments and royalties payable by us to Alios and (ii) the aggregate of $120.0 million in up-front and milestone payments that we made to Alios pursuant to the Alios collaboration.

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•	In 2013, we recorded net loss (income) attributable to the Alios noncontrolling interest. This net loss (income) attributable to the Alios noncontrolling interest is included in loss from discontinued operations for 2013.

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ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

ITEM 9A.	CONTROLS AND PROCEDURES

•	pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;

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•	provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and

•	provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

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ITEM 9B.	OTHER INFORMATION

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ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

ITEM 11.	EXECUTIVE COMPENSATION

ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

ITEM 14.	PRINCIPAL ACCOUNTANT FEES AND SERVICES

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ITEM 15.	EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

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†	Confidential portions of this document have been filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment.

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A.	Nature of Business and Accounting Policies

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B.	Collaborative Arrangements

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C.	Earnings Per Share

D.	Fair Value Measurements

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E.	Marketable Securities

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F.	Accumulated Other Comprehensive Income

G.	Hedging

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H.	Inventories

I.	Property and Equipment

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J.	Intangible Assets and Goodwill

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K.	Additional Balance Sheet Detail

L.	Long Term Obligations

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M.	Common Stock, Preferred Stock and Equity Plans

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N.	Stock-based Compensation Expense

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•	Expected stock price volatility: Expected stock price volatility is calculated using the trailing one month average of daily implied volatilities prior to grant date. Implied volatility is based on options to purchase the Company’s stock with remaining terms of greater than one year that are regularly traded in the market.

•	Risk-free interest rate: The Company bases the risk-free interest rate on the interest rate payable on U.S. Treasury securities in effect at the time of grant for a period that is commensurate with the assumed expected option term.

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Expected term of options: The expected term of options represents the period of time options are expected to be outstanding. The Company uses historical data to estimate employee exercise and post-vest termination behavior. The Company believes that all groups of employees exhibit similar exercise and post-vest termination behavior and therefore does not stratify employees into multiple groups in determining the expected term of options.

•	Expected annual dividends: The estimate for annual dividends is $0.00 because the Company has not historically paid, and does not intend for the foreseeable future to pay, a dividend.

O.	Other Arrangements

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P.	Income Taxes

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Q.	Restructuring Expenses

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R.	Employee Benefits

S.	Commitments and Contingencies

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T.	Segment Information

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U.	Quarterly Financial Data (unaudited)

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1.	During fourth quarter of 2015, the Company made a one-time $75.0 million upfront payment to CRISPR Therapeutics in connection with the collaboration, which was recorded as a research and development expense. See Note B, “Collaborative Arrangements,” for further information.

2.	During the third quarter of 2014, the Company received a non-refundable up-front payment of $30.0 million from Janssen Inc., which was recorded as collaborative revenues. See Note B, “Collaborative Arrangements,” for further information.

3.	During the third quarter of 2014, the Company recorded $40.8 million of restructuring expenses primarily related to the relocation of its corporate headquarters to Boston from Cambridge. See Note Q, “Restructuring Expenses,” for further information.

4.	During the second quarter of 2014, the Company received a one-time cash payment of $36.7 million from its landlord pursuant to the Fan Pier Leases, which was recorded as other income. See Note O, “Other Arrangements,” for further information.

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1.1.

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

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

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

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

1.5.

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

1.6.

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

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

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

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

1.10.

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

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

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

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

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

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

1.16.	[***].

1.17.	[***].

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

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

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

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

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

1.23.

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

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1.24.	“Clinical Trial” means a study in humans that is conducted in accordance with GCP and is designed to generate data in support of an Approval Application.

1.25.

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

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

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

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

1.29.

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

1.30.

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

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

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

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

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

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1.35.	“Continuation Notice” has the meaning set forth in Section 2.6.

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

1.37.

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

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

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1.39.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

1.58.

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

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

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

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

1.62.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

1.76.

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

1.77.

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

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

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

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

1.81.

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

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

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

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

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

1.86.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

1.105.

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

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

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

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

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

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

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

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

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

1.114.

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

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

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

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

(a)

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

(b)

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

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

(d)

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

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

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1.118.	“[***]” has the meaning set forth in Section 7.6.2(a).

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

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

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

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

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

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

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

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

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

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

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

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

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

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

1.133.

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

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

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

1.136.

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

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

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

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

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

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

1.142.

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

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

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

1.145.

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

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

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1.147.

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

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

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

1.150.

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

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

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

1.153.

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

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

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1.155.	“Safety Data Exchange Agreement” has the meaning set forth in Section 6.6.3.

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

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

1.158.	[***].

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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1.174.	“United States” or “U.S.” means the fifty states of the United States of America and all of its territories and possessions and the District of Columbia.

1.175.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

2.2.

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

2.3.	Target Selection.

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

2.3.2.	Process to Update the Vertex Target List.

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

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(b)

For the avoidance of doubt, (1) after the Initial Target Selection Period, Vertex may [***] Targets as Vertex Targets and (2) after the first [***] of the Final Target Selection Period Vertex may [***] Targets within the Vertex Target List, in each case, [***]. The Parties will in good faith discuss any request by Vertex during the Research Term to [***] Targets on the Vertex Target List made at any time when Vertex does not have the right to make such [***] under Section 2.3.2(a).

(c)

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

2.3.3.

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

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2.3.4.

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

2.4.

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

2.5.

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

2.6.

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

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2.7.

End of Research Term. At the end of the Research Term, (a) neither CRISPR nor Vertex will have an obligation to perform any additional activities under any Research Plan and (b) CRISPR’s obligations and Vertex’s rights under this Agreement with respect to any Vertex Target that has not been designated as a Collaboration Target will terminate and the Vertex Target list will be dissolved. For clarity, the expiration of the Research Term will not affect Vertex’s rights or CRISPR’s obligations with respect to any Collaboration Target for which Vertex has exercised its Option as provided in Section 4.1 or for which the Option Deadline has not occurred.

2.8.

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

2.9.

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

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

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

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2.12.

Additional Research. At any time following exercise of an Option for a Collaboration Target, Vertex may request that CRISPR provide additional Research services to Vertex, with respect to such Collaboration Target (“Additional Research”). Upon such request, the Parties will meet and discuss in good faith whether CRISPR is able to provide those services and a mutually-agreeable plan (the “Additional Research Plan”), including a timeline, and budget, which will be subject to the approval of the JRC (the “Additional Research Budget”) therefor; provided that CRISPR may, in its sole discretion, refuse to perform Additional Research. Vertex will reimburse CRISPR for Research Costs incurred in performing activities under the Additional Research Plan as provided in Section 7.4. CRISPR will provide Vertex with the results of any Additional Research promptly following the completion thereof.

2.13.	Exclusivity Covenants.

2.13.1.

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

2.13.2.

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

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

2.13.4.	Cystic Fibrosis.

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

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(b)	During the Agreement Term, CRISPR agrees that neither it nor any of its Affiliates will work independently or for the benefit of or with any Third Party (including the grant of any license to any Third Party) with respect to the discovery, research, development, manufacture or commercialization of any product containing (a) [***] or (b) [***], provided that there is [***].

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

2.13.6.

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

(a)

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

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

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

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2.13.7.

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

3.1.	Joint Research Committee.

3.1.1.

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

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3.1.2.	Responsibilities. The JRC will:

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

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

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

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

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

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

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

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

3.1.3.

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

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3.1.4.

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

3.2.

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

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

3.4.	Alliance Managers.

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

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

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

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

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

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

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

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

4.1.	Option.

4.1.5.

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

4.1.6.	HSR Compliance.

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

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(b)

HSR Clearance. In furtherance of obtaining clearance for an HSR Filing filed pursuant to this Section 4.1.2, CRISPR and Vertex will use their respective Commercially Reasonable Efforts to resolve as promptly as practicable any objections that may be asserted with respect to this Agreement or the transactions contemplated by this Agreement under any antitrust, competition or trade regulatory law. In connection with obtaining such HSR clearance from the FTC, the DOJ or any other governmental authority, Vertex and its Affiliates will not be required to (i) sell, divest (including through a license or a reversion of licensed or assigned rights), hold separate, transfer or dispose of any assets, operations, rights, product lines, businesses or interest therein of Vertex or any of its Affiliates (or consent to any of the foregoing actions); or (ii) litigate or otherwise formally oppose any determination (whether judicial or administrative in nature) by a governmental authority seeking to impose any of the restrictions referenced in clause (i) above.

5.1.

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

5.2.

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

5.3.	License Grants to Vertex.

5.3.1.

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

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5.3.2.

License Conditions; Limitations. Subject to Section 7.6, any rights and obligation hereunder, including the rights granted pursuant to any Exclusive License with respect to a Collaboration Target, are subject to and limited by any applicable Third Party Obligations to the extent the provisions of such obligations or agreements are specifically disclosed to Vertex in writing (or via electronic data room) (a) with respect to Third Party Obligations existing as of the Effective Date, prior to the Effective Date, (b) with respect to Third Party Obligations arising between the Effective Date and the delivery of the relevant Option Exercise Data Package, at the time of delivery of the Option Exercise Data Package and (c) with respect to Third Party Obligations arising after the date the applicable Exclusive License is granted hereunder, on or prior to the date on which such Third Party Obligations arise. Vertex will have the right to [***] any Third Party Patents and Know-How to which such Third Party Obligations [***] by providing CRISPR [***] (with respect to any Third Party Obligations existing at the time the relevant Option Exercise Data Package is delivered) or [***], in which case, such Third Party Patents and Know-How [***] this Agreement. If Vertex does not provide CRISPR [***] Third Party Patents and Know-How as provided above, such Third Party Patents and Know-How [***] under this Agreement and Vertex will be subject to the Third Party Obligations [***].

5.4.	Licenses to Improvements.

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5.4.1.

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

5.4.2.

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

5.5.	Technology Transfer after Option Exercise.

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

5.5.2.

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

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

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5.5.4.

Transfer of Regulatory Filings and Data. On a Collaboration Target-by-Collaboration Target basis and effective as of the date on which Vertex is granted the Exclusive License for a Collaboration Target, CRISPR will, and hereby does, assign to Vertex any and all Regulatory Filings or any other rights or permissions granted by any Regulatory Authority to Vertex related to any Licensed Agent or Product directed to such Collaboration Target, together with all Research, Development and Manufacturing data relating to such Collaboration Target, in each case, not previously assigned by CRISPR to Vertex. Further, CRISPR will take all actions and provide all assistance reasonably requested by Vertex to effect the assignments in this Section 5.5.4.

5.5.5.

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

5.6.

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

6.1.	CRISPR Profit/Loss Sharing.

6.1.3.

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

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

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

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

(e)

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

(f)	[***].

6.2.

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

6.3.	Vertex Diligence.

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

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

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

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6.5.	Applicable Laws. Each Party will, and will require its Affiliates, Sublicensees and Subcontractors to, comply with all Applicable Law in its and their Research, Development, Manufacture and Commercialization of Products, including where appropriate cGMP, GCP and GLP (or similar standards).

6.6.	Regulatory Matters; Safety Data Exchange Agreement.

6.6.1.

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

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

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

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6.7.	Commercialization.

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

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

6.8.

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

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

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

7.3.	Milestone Payments.

7.3.6.

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

7.3.7.

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

7.3.8.

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

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7.3.9.	Failure to Obtain Necessary Agreements. If, at the time any milestone event under Section 7.3.1 or Section 7.3.2 is achieved, CRISPR has not obtained all necessary consents and agreements and taken all actions provided for under Section 9.3.10, [***].

7.4.	Research Costs.

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

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

7.4.3.

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

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

7.5.	Royalties.

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

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

7.5.6.

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

7.5.7.

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

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

7.5.9.

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

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7.6.	CRISPR In-License Agreements; [***].

7.6.3.

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

7.6.4.	[***].

(a)

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

(b)

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

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

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

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

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

7.7.	Payment Method; Currency.

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

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7.7.2.

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

7.8.

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

7.9.

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

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7.10.	Late Payment. Any payments or portions thereof due hereunder that are not paid when due will accrue interest from the date due until paid at an annual rate equal to [***] (or the maximum allowed by Applicable Law, if less). INTELLECTUAL PROPERTY

7.11.

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

7.11.1.

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

7.11.2.	Agreement Technology.

(a)

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

(b)

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

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

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(d)

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

(e)

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

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(f)

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

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

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

(e)

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

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

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

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

7.12.2.

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

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7.12.3.	Vertex Patents. Vertex will control and be responsible for all aspects of the Prosecution and Maintenance of all Vertex Background Patents, Vertex Program Patents, [***] and [***] Joint Program Patents. Vertex will use Commercially Reasonable Efforts to Prosecute and Maintain all [***] Patents and [***] Joint Program Patents, if applicable, using counsel reasonably acceptable to CRISPR.

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

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

(a)

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

(b)

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

(c)

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

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7.13.

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

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

7.15.

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

7.16.	Enforcement of Patents Against Competitive Infringement.

7.16.1.

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

7.16.2.

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

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7.16.3.

Following License Grant. For any Competitive Infringement with respect to a particular Licensed Agent or Product occurring after the date Vertex is granted the Exclusive License with respect to such Licensed Agent or Product, Vertex will have the first right, but not the obligation, to institute, prosecute, and control a Proceeding with respect to such Competitive Infringement by counsel of its own choice at its own expense, and CRISPR will have the right, at its own expense, to be represented in that action by counsel of its own choice; provided that in such Proceeding, Vertex shall reasonably consider CRISPR’s comments with respect to which Patents to seek to enforce against such infringing party, taking into consideration the overall value of the Patents Covering the relevant Licensed Agent or Product to CRISPR and its licensees. If Vertex fails to initiate a Proceeding within a period of [***] after written notice of such Competitive Infringement is first provided by a Party under Section 8.6.1, CRISPR will have the right to initiate and control a Proceeding with respect to such Competitive Infringement by counsel of its own choice, and Vertex will have the right to be represented in any such action by counsel of its own choice at its own expense; provided, that if Vertex notifies CRISPR during such [***] period that it is electing in good faith not to institute any Proceeding against such Competitive Infringement for strategic reasons intended to maintain the commercial value of the relevant Patent and any Licensed Agent or Product Covered thereby, CRISPR will not have the right to initiate and control any Proceeding with respect to such Competitive Infringement. Notwithstanding anything to the contrary contained herein, CRISPR will at all times have the sole right to institute, prosecute, and control any Proceeding under this Section 8.6.3 to the extent involving any CRISPR Platform Technology Patents but will (a) keep Vertex reasonably apprised of the progress of such Proceeding, (b) reasonably consider Vertex’s comments with respect to the conduct of such Proceeding and (c) not enter a settlement, consent judgment or other voluntary final disposition of a Proceeding that disclaims, limits the scope of, admits the invalidity or unenforceability of, or grants a license, covenant not to sue or similar immunity that has an adverse effect on Vertex’s rights hereunder with respect to, a CRISPR

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7.16.4.	Joinder.

(a)

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

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

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

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

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

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

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

7.16.6.

Settlement. Notwithstanding anything to the contrary under this ARTICLE 8, neither Party may enter a settlement, consent judgment or other voluntary final disposition of a suit under this ARTICLE 8 that disclaims, limits the scope of, admits the invalidity or unenforceability of, or grants a license, covenant not to sue or similar immunity under a Patent Controlled by the other Party or its Affiliates without first obtaining the written consent of the Party that Controls the relevant Patent; provided that the foregoing limitation shall not apply to CRISPR’s rights with respect to the CRISPR Platform Technology Patents (subject to the restriction set forth in Sections 8.6.2 and 8.6.3).

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7.17.	Other Infringement.

7.17.1.

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

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

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

7.18.

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

7.19.

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

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

7.21.

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

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7.22.

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

8.1.	Representations and Warranties of Vertex. Vertex hereby represents and warrants to CRISPR, as of the Effective Date, that:

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

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

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

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

8.1.9.

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

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

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

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

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

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

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

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

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

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

8.2.17.

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

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

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

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

8.2.21.

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

8.2.22.

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

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

8.2.24.

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

8.2.25.

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

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8.2.26.	no Licensed Technology is subject to any funding agreement with any government or governmental agency;

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

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

8.2.29.

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

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

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

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

8.3.6.

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

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

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

8.3.9.

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

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

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

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

8.3.13.

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

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

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

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

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

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

8.4.12.

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

8.5.

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

9.1.

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

9.1.31.

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

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

9.2.

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

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

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

9.3.

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

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

9.5.

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

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

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

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

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

10.2.	Termination of the Agreement.

10.2.13.

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

10.2.14.

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

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10.2.15.	Termination for Material Breach.

(c)

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

(d)	CRISPR’s Right to Terminate.

(i)

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

(ii)

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

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10.2.16.

Disputes Regarding Material Breach. Notwithstanding the foregoing, if the Breaching Party in Section 11.2.3 disputes in good faith the existence, materiality, or failure to cure of any such breach that is not a payment breach, and provides notice to the Non-Breaching Party of such dispute within the relevant cure period, the Non-Breaching Party will not have the right to terminate this Agreement in accordance with Section 11.2.3, or the right to exercise the alternative remedy provisions of 11.3, as applicable, unless and until the relevant dispute has been resolved. It is understood and acknowledged that during the pendency of such dispute, all the terms and conditions of this Agreement will remain in effect and the Parties will continue to perform all of their respective obligations hereunder.

10.2.17.

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

(a)

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

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(i)

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

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

(b)

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

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

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

10.3.	Alternative Remedies to Termination.

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

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(a)	if CRISPR has not completed the activities for which it is responsible under the applicable Research Plan, [***], in which case, [***], If [***] for such activities, CRISPR will [***] and Vertex will [***] as provided herein;

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

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

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

10.3.10.

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

(a)	CRISPR’s right to [***];

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

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(c)

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

10.3.11.

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

10.3.12.	[***] Dispute Resolution.

(a)

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

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

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(i)	Whether the [***] by Vertex pursuant to Section 11.3.3 exceeds the mediator’s objective good faith estimate of [***]; and

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

(c)	Mediator Resolution.

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

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

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

10.4.	Consequences of Expiration or Termination of the Agreement.

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

(c)

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

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

(e)

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

10.4.4.

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

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

(b)

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

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

10.4.5.

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

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

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

(e)

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

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

(g)

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

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(h)

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

11.1.

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

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

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

11.2.14.	prosecute or defend litigation;

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

11.2.16.	comply with Applicable Law.

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11.3.

SEC Filings and Other Disclosures. Either Party may disclose the terms of this Agreement (i) to the extent required to comply with Applicable Law, including the rules and regulations promulgated by the United States Securities and Exchange Commission or any equivalent governmental agency in any country in the Territory; provided, that such Party will reasonably consider the comments of the other Party regarding confidential treatment sought for such disclosure and (ii) to its advisors (including financial advisors, attorneys and accountants), actual or potential acquisition partners, financing sources or investors and underwriters on a need to know basis; provided that such disclosure is covered by terms of confidentiality similar to those set forth herein (which may include professional ethical obligations).

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

11.5.	Public Announcements; Publications.

11.5.1.

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

11.5.2.

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

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11.5.3.

Publications. During the Agreement Term, each Party will submit to the other Party (the “Non-Disclosing Party”) for review and approval any proposed academic, scientific and medical publication or public presentation related to any Licensed Agent or Product or any activities conducted pursuant to any Research Plan. In each such instance, such review and approval will be conducted for the purposes of preserving the value of the Licensed Technology and the Vertex Technology, the rights granted to Vertex hereunder and determining whether any portion of the proposed publication or presentation containing the Non-Disclosing Party’s Confidential Information should be modified or deleted. Written copies of such proposed publication or presentation required to be submitted hereunder will be submitted to the Non-Disclosing Party no later than [***] before submission for publication or presentation (or five Business Days in advance in the case of an abstract). The Non-Disclosing Party will provide its comments with respect to such publications and presentations within [***] of its receipt of such written copy (or [***] in the case of an abstract). The review period may be extended for an additional [***] if the Non-Disclosing Party reasonably requests such extension including for the preparation and filing of patent applications. Notwithstanding anything to the contrary, the Non-Disclosing Party may require that the other Party redact the Non-Disclosing Party’s Confidential Information from any such proposed publication or presentation. CRISPR and Vertex will each comply with standard academic practice regarding authorship of scientific publications and recognition of contribution of other parties in any publication. Notwithstanding the foregoing, Vertex’s obligation to submit any publication to CRISPR for review and approval under this Section 12.5.3 will not apply to any publication made with respect to a Collaboration Program following Vertex’s exercise of the applicable Option that does not contain CRISPR’s Confidential Information or disclose any non-public information included in the Licensed Technology; provided, that where reasonably possible, Vertex will provide CRISPR with an advance copy of such publication if such publication is [***].

11.6.	Vertex Information Rights.

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

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

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(e)

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

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

12.1.

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

12.2.	Change of Control of CRISPR.

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

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

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12.3.

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

12.4.

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

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

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12.6.	Amendment. No amendment, modification or supplement of any provision of this Agreement will be valid or effective unless made in writing and signed by a duly authorized officer of each of Vertex Parent, Vertex UK and CRISPR AG, CRISPR Inc., CRISPR UK and Tracr.

12.7.

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

12.8.

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

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

12.10.

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

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

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12.12.

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

12.13.

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

12.14.

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

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

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

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

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

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

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

12.18.3.

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

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

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1.	The following Targets:

a.	[***]

b.	[***]

c.	[***]

d.	[***]

e.	[***]

f.	[***]

g.	[***]

h.	[***]

i.	[***]

j.	[***]

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

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

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

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1)	CFTR (cystic fibrosis transmembrane conductance regulator)

2)	[***]

3)	[***]

4)	[***]

5)	[***]

6)	[***]

7)	[***]

8)	[***]

9)	[***]

10)	[***]

11)	[***]

12)	[***]

13)	[***]

1)	CFTR (cystic fibrosis transmembrane conductance regulator)

2)	[***]

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

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

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

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1.1.	“Audited Party” has the meaning set forth in Section 7.6.

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

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

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

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

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

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

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

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

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

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

(g)	[***];

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

(i)	[***]; and

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

1.6.	“Commercialization Plan” has the meaning set forth in Section 5.1.

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

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

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(a)	Expenses incurred in [***];

(b)	[***];

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

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

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

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

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

1.9.	“Expenses” means Out-of-Pocket Costs and FTE Costs.

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

1.11.

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

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

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

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

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

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

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

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

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

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

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

1.22.

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

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

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

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

1.26.	“MSL” means medical science liaisons.

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

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

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

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

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

(b)	[***];

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

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

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

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

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

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

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

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

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

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

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

1.40.

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

2.1.

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

2.2.

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

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

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3.2.	Development Activities.

3.2.1.

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

3.2.2.

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

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3.2.3.

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

3.3

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

5.1.	Commercialization Plan. The JCC will oversee the Commercialization of Shared Products by the Parties in the Field in the Territory. No later than [***] prior to the anticipated launch of the Shared Product in the first country in the Territory, the JCC will develop and submit to the JSC for approval, a Commercialization plan (the “Commercialization Plan”) that

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5.2.	Commercialization Activities.

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

5.2.2.

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

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

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

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

5.2.6.

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

5.2.7.

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

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

5.2.9.

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

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5.3.

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

6.1.

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

6.2.

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

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

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

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

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

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7.4.

Reconciliation. Vertex will prepare a reconciliation report, as soon as practicable after the receipt of CRISPR’s Summary Statement, but in any event within [***] after the end of each [***], accompanied by reasonable supporting documents and calculations sufficient to support each Party’s financial reporting obligations, independent auditor requirements and obligations under the Sarbanes-Oxley Act, which reconciles the amounts accrued and reported in each Party’s Summary Statement during such [***] and the share of the Net Profits and Net Losses to be allocated to each of the Parties for such [***] in accordance with Section 7.1 (such report, the “Reconciliation Report”). Payment to reconcile Net Profit or Net Loss shall be made by the owing Party to the other Party within [***] after such Reconciliation Report is complete.

7.5.

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

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

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8.1.

Pharmacovigilance Agreement. The Parties will meet to negotiate in good faith and agree on processes and procedures for sharing safety information within [***] after the effective date of the Joint Development & Commercialization Agreement. The agreed upon processes and procedures will be set forth in a pharmacovigilance agreement (the “Pharmacovigilance Agreement”) containing mutually agreed terms and conditions that are customary for agreements of this type. The Pharmacovigilance Agreement will include provisions establishing a joint safety oversight working group to oversee the conduct of the Parties’ activities under the Pharmacovigilance Agreement and to coordinate the Parties’ interactions with respect to pharmacovigilance activities.

8.2.

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

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8.3.

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

10.1.

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

10.2.

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

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10.3.

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

10.4.

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

11.1.

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

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

11.4.	Opt-Out. After [***] for a Shared Product directed to a particular Collaboration Target, either Party may opt out of the Joint Development & Commercialization Agreement for all Shared Products directed to such Collaboration Target upon [***] notice to the other Party (“Opt-Out”). The other Party shall pay such opting out Party royalties (“Opt-Out

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Building:	That to be constructed Building to be known as 3215 Merryfield Row, San Diego, California.

Premises:	The Building, containing approximately 170,523 rentable square feet, including the subterranean parking garage located in the Building, all as shown on Exhibit A.

Project:	The real property on which the Building in which the Premises are located, consisting of approximately 4.5 acres, together with all improvements thereon and appurtenances thereto as described on Exhibit B.

Base Rent:	Months 1* – 12:     $0 per rsf of the Premises per month

Base Term:	Beginning on the Commencement Date and ending 192 months from the first day of the first full month following the Rent Commencement Date.

Permitted Use:	Research and development laboratory, related office and other related uses consistent with the character of the Project and otherwise in compliance with the provisions of Section 7 hereof.

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[X] EXHIBIT A - PREMISES DESCRIPTION	[X] EXHIBIT B - DESCRIPTION OF PROJECT

[X] EXHIBIT C - WORK LETTER	[X] EXHIBIT D - COMMENCEMENT DATE

[X] EXHIBIT E - RULES AND REGULATIONS	[X] EXHIBIT F - TENANT’S PERSONAL PROPERTY

[X] EXHIBIT G - EV PARKING STATIONS	[X]        EXHIBIT H - SITE PLAN

[X] EXHIBIT I - VERTEX AREA	[X] EXHIBIT J - INTENTIONALLY OMITTED

[X] EXHIBIT K - SIGNAGE	[X] EXHIBIT L - MAINTENANCE OBLIGATIONS

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	a Delaware limited partnership,

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A)	Death of the Participant. If the Participant dies while an Employee, Non-Employee Director, consultant or advisor of the Company or an Affiliate, 100% of the remaining Shares subject to this Restricted Stock Unit Award shall be accelerated and shall be delivered to the Participant’s Survivors as soon as practicable, but no more than 90 days, after the Participant’s date of death.

B)

Termination for Cause. If the Participant’s employment with the Company is terminated due to Cause, any portion of the Restricted Stock Unit Award that has not vested prior to the date written notice of such termination is provided to the Participant shall be immediately forfeited. If the Company is investigating or evaluating whether the Company will terminate Participant’s employment or other service to the Company for Cause, the Company may, at its election, suspend the vesting of this Restricted Stock Unit Award by written notice to the Participant. If after such notification it is determined or otherwise agreed that Participant’s service to the Company will not be terminated for Cause, vesting of the Shares shall resume pursuant to the original schedule and any Shares that would have vested during such suspension immediately shall vest.  However, if the period of the investigation extends beyond 90 days after the Restricted Stock Unit Award otherwise vests, any Shares that would have otherwise become vested during the period of suspension shall become vested on such 90th day. In such event, any Shares of Common Stock delivered while the Company’s investigation is pending shall be non-transferable until the conclusion of the investigation without a determination that Cause for termination exists, and such Common Stock shall be immediately forfeited by the Participant and returned to the Company if the Company determines that Cause for the Participant’s termination exists.

C)	Retirement Provision. If a Participant experiences a Termination of Service other than for Cause, and the Participant is a Qualified Participant (as defined below), then the FCP % of the remaining Shares subject to this Restricted Stock Unit Award that have not previously vested shall vest as of the date of the Termination of Service.

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2.4.1

For deferrals of cash Compensation, the election must be made no later than the end of the Plan Year preceding the Plan Year in which the cash Compensation is to be earned. If a Director first becomes eligible for this Plan during a Plan Year, an election to defer cash Compensation to be earned for the remainder of that Plan Year shall be made within 30 days of the initial date of eligibility for this Plan.

2.4.2

For deferrals of Restricted Stock Units, the election must be made on or before the earliest to occur of (i) the 30th day after the Director obtains the legally binding right to the grant of Restricted Stock Units and (ii) 12 months prior to the date that the substantial risk of forfeiture with respect to such Restricted Stock Units lapses (other than due to death, Disability or a Change in Control). Such election shall comply with Treasury Regulation Section 1.409A-2(a)(5).

4.4.1	Violation of Law. The Administrator reasonably determines that making the distribution or payment will violate Federal securities or other applicable laws; or

4.4.2	Other Permitted Event. Upon such other events and conditions as the Commissioner of Internal Revenue shall prescribe in generally applicable guidance.

4.5.1	Compliance with Domestic Relations Order. To permit distribution or payment to an individual other than the Participant as necessary to comply with the provisions of a domestic relations order (as defined in Code Section 414(p)(1)(B));

4.5.2	Conflicts of Interest. To permit distribution or payment as necessary to comply with the provisions of a Federal government ethics agreement or to avoid violation of an applicable Federal, state, local or foreign ethics law or conflicts of interest law; or

4.5.3	Tax Event. Upon a good faith, reasonable determination by the Administrator, and upon advice of counsel, that the Plan fails to meet the requirements of Code Section 409A and regulations thereunder. Such distribution or payment may not exceed the amount required to be included in income as a result of the failure to comply with the requirements of Code Section 409A.

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6.6.1	Stock Splits. If the shares of Common Stock shall be subdivided or combined into a greater or smaller number of shares, the number of Deferred Stock Units shall be appropriately increased or decreased.

6.6.2

Consolidations or Mergers. In the event of a consolidation or merger in which Vertex is not the surviving corporation or which results in the acquisition of substantially all Vertex’s outstanding stock by a single person or entity or by a group of persons and/or entities acting in concert, or in the event of the sale or transfer of substantially all Vertex’s assets (any of the foregoing, an “Acquisition”), if such Acquisition does not result in a Change in Control, all outstanding Deferred Stock Units at the time of the Acquisition shall be assumed by the surviving or acquiring entity or an affiliate thereof or replaced with rights with a value immediately after the Acquisition equivalent to the aggregate value of the Deferred Stock Units immediately before such Acquisition. If the Acquisition results in a Change in Control, Deferred Stock Units shall be payable pursuant to Section 4.1.

6.6.3

Recapitalization or Reorganization. In the event of a recapitalization or reorganization of Vertex that does not result in a Change in Control, pursuant to which securities of Vertex or of another corporation are issued with respect to the outstanding shares of Common Stock, a Participant shall be entitled to replacement rights with an aggregate value equivalent to that of the Deferred Stock Units that constituted the Participant’s Account Balance immediately prior to such recapitalization or reorganization. If the recapitalization or reorganization results in a Change in Control, Deferred Stock Units shall be payable pursuant to Section 4.1.

6.6.4	Adjustments to Deferred Stock Units. Upon the happening of any of the events described in Sections 6.6.1, 6.6.2 or 6.6.3, any outstanding Deferred Stock Units shall be appropriately adjusted to reflect the events described in such Sections. The Administrator shall determine the specific adjustments to be made under this Section 6.6.4.

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(i)	the Executive’s duties are materially diminished to an extent that results in either (A) the Executive no longer being an “officer,” as such term is defined in Rule 16a-1(f) promulgated under the Securities Exchange Act of 1934; or (B) the Executive ceases to be a member of the executive management team of the Company; or

(ii)	the Executive’s Base Salary is decreased unless such reduction is part of an across-the-board proportionate reduction in the salaries of the Company’s senior management team; or

(iii)	the office to which the Executive is assigned is relocated to a place 35 or more miles away and such relocation is not at the Executive’s request or with the Executive’s prior agreement (and other than, for Executives assigned to the Company’s principal executive offices, in connection with a change in location of the Company’s principal executive offices);

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(i)	Base Salary earned by Executive but not paid through the date of termination of Executive’s employment under this Section 9(b); and

(ii)	any amounts earned, accrued or owing to the Executive but not yet paid under Sections 5, 6, or 7 above.

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(i)	Base Salary earned by Executive but not paid through the date of termination of Executive’s employment under this Section 9(c);

(ii)	all incentive compensation awards earned by Executive but not paid prior to the date of termination of Executive’s employment under this Section 9(c);

(iii)

a cash payment to the Executive in an amount equal to the Severance Payment, payable within ten days after the execution of a general release and expiration, without revocation, of any applicable revocation periods under the general release provided that if the 60-day period during which the release is required to become effective and irrevocable begins in one calendar year and ends in another calendar year, the Severance Payment shall not be made before the first day of the second calendar year;

(iv)	any amounts earned, accrued or owing to the Executive but not yet paid under Sections 5, 6 or 7 above;

(v)	if COBRA coverage is elected by the Executive, the Company shall pay the cost of insurance continuation premiums on the Executive’s behalf (whether or not covered by COBRA) to continue standard medical, dental and life insurance coverage for the Executive (or the cash equivalent of same in the event the Executive is ineligible for continued coverage) until the earlier of:

(A)	the date 12 months after the date the Executive’s employment is terminated; or

(B)	the date, or dates, on which the Executive receives equivalent coverage and benefits under the plans, programs and/or arrangements of a subsequent employer (such coverage and benefits to be determined on a coverage-by-coverage or benefit-by-benefit basis).

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I.	Definitions. For the purposes of this Amended and Restated Change of Control Agreement (this “Agreement”), capitalized terms shall have the following meanings:

1.	“Cause” shall mean:

(a)	your conviction of a crime involving moral turpitude;

(b)

your willful refusal or failure to follow a lawful directive or instruction of the Company’s Board of Directors or the individual(s) to whom you report, provided that you receive prior written notice of the directive(s) or instruction(s) that you failed to follow, and provided further that the Company, in good faith, gives you 30 days to correct such failure and further provided that if you correct the failure(s), any termination of your employment on account of such failure shall not be treated for purposes of this Agreement as a termination of employment for “Cause”;

(c)	in carrying out your duties you commit (i) willful gross negligence, or (ii) willful gross misconduct, resulting in either case in material harm to the Company, unless such act, or failure to act, was believed by you, in good faith, to be in the best interests of the Company; or

(d)	your violation of the Company’s policies made known to you regarding confidentiality, securities trading or inside information.

2.	“Change of Control” shall mean that:

(a)

any “person” or “group” as such terms are used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934 (the “Act”), becomes a beneficial owner, as such term is used in Rule 13d-3 promulgated under the Act, of securities of the Company representing more than 50% of the combined voting power of the outstanding securities of the Company having the right to vote in the election of directors; or

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(b)

all or substantially all the business or assets of the Company are sold or disposed of, or the Company or a subsidiary of the Company combines with another company pursuant to a merger, consolidation, or other similar transaction, other than (i) a transaction solely for the purpose of reincorporating the Company or one of its subsidiaries in a different jurisdiction or recapitalizing or reclassifying the Company’s stock; or (ii) a merger or consolidation in which the shareholders of the Company immediately prior to such merger or consolidation continue to own at least a majority of the outstanding voting securities of the Company or the surviving entity immediately after the merger or consolidation.

3.	“Code” shall mean the Internal Revenue Code of 1986, as amended.

4.	“Disability” shall mean a disability as determined under the Company's long-term disability plan or program in effect at the time the disability first occurs, or if no such plan or program exists at the time of disability, then a “disability” as defined Section 22(e)(3) of the Code.

5.	“Good Reason” shall mean one of the following events has occurred without your consent:

(a)	You suffer a material reduction in the authorities, duties or job title and responsibilities associated with your position as Executive Vice President, Global Research, & Chief Scientific Officer for the Company as of the date hereof;

(b)	your annual base salary is decreased;

(c)	the office to which you are assigned is relocated to a place 35 or more miles away; or

(d)	following a Change of Control, the Company’s successor fails to assume the Company’s rights and obligations under this Agreement;

6.	“Termination Date” shall mean the last day of your employment with the Company.

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II.	Severance Benefits upon Change of Control. If:

(A)	your employment is terminated by the Company (except for termination for Cause or due to a Disability) and the Termination Date is within 90 days prior to a Change of Control or within 12 months after a Change of Control; or

(B)	you, of your own initiative, (i) terminate your employment for Good Reason (in accordance with the notice and cure provisions set forth in Section I.5 above) and (ii) the event giving rise to Good Reason occurs within 90 days prior to a Change of Control or within 12 months after a Change of Control;

1.

Severance Payment. In exchange for your execution within 60 days of the Termination Date of a general release, in a form satisfactory to the Company, of all claims against the Company, its subsidiaries, and its and their officers, directors and representatives, that becomes enforceable and irrevocable within such 60-day period, the Company shall make a cash payment (the “Severance Payment”) to you in an amount equal to:

(a)

(i) your annual base salary (provided, however, that if you terminate your employment for Good Reason based on a reduction in your annual base salary, then the annual base salary to be used in calculating the Severance Payment shall be your annual base salary in effect immediately prior to such reduction in annual base salary) plus your target bonus under any bonus program applicable to you for the year in which the Termination Date occurs; plus

(b)	a prorata portion of your target bonus for the portion of the year in which the Termination Date occurs under any bonus program applicable to you; plus

(c)	all cash incentive compensation awards earned by you but not paid prior to the Termination Date; provided that, if a fiscal year has been completed and the incentive award for such fiscal year has not been determined, the incentive compensation for such completed fiscal year shall equal the target bonus for such fiscal year.

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2.	Accelerated Vesting.

(a)

On the Termination Date, stock options for the purchase of the Company’s securities held by you as of the Termination Date and not then exercisable shall immediately become exercisable in full. The options to which this accelerated vesting applies shall remain exercisable until the earlier of (a) the end of the 90-day period immediately following the later of (i) the Termination Date or (ii) the date of the Change of Control and (b) the date the stock option(s) would otherwise expire; and

(b)	On the Termination Date, the Company’s lapsing repurchase right with respect to shares of restricted stock held by you shall lapse in full (subject to your making satisfactory arrangements with the Company providing for the payment to the Company of all required withholding taxes).

3.

Continued Insurance Coverage. If COBRA coverage is elected by you, the Company shall pay the cost of insurance continuation premiums on your behalf (whether or not covered by COBRA) to continue standard medical, dental and life insurance coverage for you (or the cash equivalent of same if you are ineligible for continued coverage) until the earlier of (i) the date 12 months after the Termination Date or (ii) the date you begin receiving substantially equivalent coverage and benefits through a subsequent employer.

4.	No Mitigation. You shall not be required to mitigate the amount of the Severance Payment or any other benefit provided under this Agreement by seeking other employment or

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III.	Miscellaneous.

1.

Employee’s Obligations. Upon the termination of employment, you shall promptly deliver to the Company all property of the Company and all material documents, statistics, account records, programs and other similar tangible items which may by in your possession or under your control and which relate in a material way to the business or affairs of the Company or its subsidiaries, and no copies of any such documents or any part thereof shall be retained by you.

2.

Entire Agreement. This Agreement and the “Employee Non-Disclosure, Non-Competition & Inventions Agreement” previously executed by you covers the entire understanding of the parties as to the subject matter hereof, superseding all prior understandings and agreements related hereto, including the previous Change of Control Agreement between you and the Company. No modification or amendment of the terms and conditions of this Agreement shall be effective unless in writing and signed by the parties or their respective duly authorized agents, provided, however, that the Company may, without your consent, unilaterally adopt amendments that may be required so that this Agreement continues to comply with applicable law or regulation, including without limitation Section 409A of the Code, provided such amendments do not adversely affect the benefits to be provided to you under Section II of this Agreement.

3.	Governing Law. This Agreement shall be governed by the laws of The Commonwealth of Massachusetts, as applied to contracts entered into and performed entirely in Massachusetts by Massachusetts residents.

4.

Successors and Assigns. This Agreement may be assigned by the Company upon a sale, transfer or reorganization of the Company. Upon a Change of Control, the Company shall require the successor to assume the Company’s rights and obligations under this Agreement. The Company’s failure to do so shall constitute a material breach of this Agreement. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their successors, permitted assigns, legal representatives and heirs.

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(1)	Registration Statement (Form S-3 No. 333-186993) of Vertex Pharmaceuticals Incorporated,

(2)	Registration Statement (Form S-8 No. 333-104362) pertaining to the Vertex Pharmaceuticals Incorporated 1996 Stock and Option Plan, as amended,

(3)	Registration Statement (Form S-8 Nos. 333-134482, 333-150946, 333-160442, 333-166803 and 333-184787) pertaining to the Vertex Pharmaceuticals Incorporated Amended and Restated 2006 Stock and Option Plan (formerly known as the Vertex Pharmaceuticals Incorporated 2006 Stock and Option Plan),

(4)	Registration Statement (Form S-8 No. 333-184784) pertaining to the Vertex Pharmaceuticals Incorporated Employee Stock Purchase Plan, and

(5)	Registration Statement (Form S-8 Nos. 333-188737, 333-197466 and 333-206075) pertaining to the Amended and Restated Vertex Pharmaceuticals Incorporated 2013 Stock and Option Plan (formerly known as the Vertex Pharmaceuticals Incorporated 2013 Stock and Option Plan);

1.	I have reviewed this Annual Report on Form 10-K of Vertex Pharmaceuticals Incorporated;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)	evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)	disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

1.	I have reviewed this Annual Report on Form 10-K of Vertex Pharmaceuticals Incorporated;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)	evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)	disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.