Common use of Budget and Funding Clause in Contracts

Budget and Funding. Exhibit 1.3(a) contains a summary that sets forth certain estimated costs of the proposed VX-661 development activities for the period through the completion of the [***]. CFFT agrees to fund up to [***]. The proposed activities and budget[***] for the VX-661 development program may be revised by the Corrector JDC from time to time, provided that the amount of [***] to be reimbursed by CFFT shall not be increased without the written consent of CFFT. [***]. On the Effective Date CFFT shall pay Vertex [***] (of the total [***] to be funded) [***]. For purposes of this Fifth Amendment, Vertex will provide CFFT with [***] reports within [***] (commencing with the second calendar quarter of 2011) showing expenses incurred and invoices received under the VX-661 development program during the quarter just ended against budgeted expenses for that quarter (which, for the second calendar quarter of 2011, shall include any expenses for activities undertaken during the first calendar quarter of 2011 that were invoiced [***]). Payments due for [***] shall be made by CFFT to Vertex [***] within [***] following receipt by CFFT of an invoice for such VX-661 External Development Costs accompanied by usual and customary documentation of such costs, including copies of Third Party invoices supporting such costs and evidence that the costs relate to the VX-661 development program. All payments shall be made without deduction for withholding or similar taxes in United States dollars to the credit of such bank account as may be designated in writing to CFFT. Any payments that fall due on a date that is a legal holiday in The Commonwealth of Massachusetts may be made on the next following day that is not a legal holiday in The Commonwealth. If the development program for VX-661 is discontinued or the VX-661 External Development Costs incurred to advance VX-661 through completion of the [***] are less than [***], CFFT agrees, subject to termination rights by CFFT in accordance with this Fifth Amendment, that any funds remaining from the original [***] funding commitment hereunder will be available to reimburse Vertex for the actual external development costs related to continued development of First Generation Correctors, on the invoicing and payment terms set forth in this Section 1.3 as if it were with respect to VX-661 External Development Costs. At its sole discretion, CFFT shall have the right to terminate its funding obligation under this Section 1.3, effective upon written notice provided to Vertex [***]. Upon any such funding termination: (a) CFFT shall be responsible to fund only those costs incurred for activities initiated by Vertex and for which Vertex has incurred non-terminable obligations to a Third Party prior to the funding termination; (b) the royalty rates for Net Sales of VX-661 Drug Product and VX-809 Drug Product set forth in Section 5.3.1(b), [***], as illustrated by the examples set forth in Exhibit 1.3(c); and (c) Section 10.6 of the Original Agreement, as amended by this Fifth Amendment, shall terminate and CFFT shall have none of the rights set forth in such Section 10.6.

Budget and Funding. Exhibit 1.3(a) contains a summary that sets forth certain estimated costs of the proposed VX-661 development activities for the period through the completion of the [***]. CFFT agrees to fund up to [***]. The proposed activities and budget[***] for the VX-661 development program may be revised by the Corrector JDC from time to time, provided that the amount of [***] to be reimbursed by CFFT shall not be increased without the written consent of CFFT. [***]. On the Effective Date CFFT shall pay Vertex [***] (of the total [***] to be funded) [***]. For purposes of this Fifth Amendment, Vertex will provide CFFT with [***] reports within [***] (commencing with the second calendar quarter of 2011) showing expenses incurred and invoices received under the VX-661 development program during the quarter just ended against budgeted expenses for that quarter (which, for the second calendar quarter of 2011, shall include any expenses for activities undertaken during the first calendar quarter of 2011 that were invoiced [***]). Payments due for [***] shall be made by CFFT to Vertex [***] within [***] following receipt by CFFT of an invoice for such VX-661 External Development Costs accompanied by usual and customary documentation of such costs, including copies of Third Party invoices supporting such costs and evidence that the costs relate to the VX-661 development program. All payments shall be made without deduction for withholding or similar taxes in United States dollars to the credit of such bank account as may be designated in writing to CFFT. Any payments that fall due on a date that is a legal holiday in The Commonwealth of Massachusetts may be made on the next following day that is not a legal holiday in The Commonwealth. Confidential Treatment Requested by Royalty Pharma plc Pursuant to 17 C.F.R. Section 200.83 If the development program for VX-661 is discontinued or the VX-661 External Development Costs incurred to advance VX-661 through completion of the [***] are less than [***], CFFT agrees, subject to termination rights by CFFT in accordance with this Fifth Amendment, that any funds remaining from the original [***] funding commitment hereunder will be available to reimburse Vertex for the actual external development costs related to continued development of First Generation Correctors, on the invoicing and payment terms set forth in this Section 1.3 as if it were with respect to VX-661 External Development Costs. At its sole discretion, CFFT shall have the right to terminate its funding obligation under this Section 1.3, effective upon written notice provided to Vertex [***]. Upon any such funding termination: (a) CFFT shall be responsible to fund only those costs incurred for activities initiated by Vertex and for which Vertex has incurred non-terminable obligations to a Third Party prior to the funding termination; (b) the royalty rates for Net Sales of VX-661 Drug Product and VX-809 Drug Product set forth in Section 5.3.1(b), [***], as illustrated by the examples set forth in Exhibit 1.3(c); and (c) Section 10.6 of the Original Agreement, as amended by this Fifth Amendment, shall terminate and CFFT shall have none of the rights set forth in such Section 10.6.

Budget and Funding. Exhibit 1.3(a) contains a summary that sets forth certain estimated costs of the proposed VX-661 development activities for the period through the completion of the [***]. CFFT agrees to fund up to [***]. The proposed activities and budget[***] for the VX-661 development program may be revised by the Corrector JDC from time to time, provided that the amount of [***] to be reimbursed by CFFT shall not be increased without the written consent of CFFT. [***]. On the Effective Date CFFT shall pay Vertex [***] (of the total [***] to be funded) [***]. For purposes of this Fifth Amendment, Vertex will provide CFFT with [***] reports within [***] (commencing with the second calendar quarter of 2011) showing expenses incurred and invoices received under the VX-661 development program during the quarter just ended against budgeted expenses for that quarter (which, for the second calendar quarter of 2011, shall include any expenses for activities undertaken during the first calendar quarter of 2011 that were invoiced [***]). Payments due for [***] shall be made by CFFT to Vertex [***] within [***] following receipt by CFFT of an invoice for such VX-661 External Development Costs accompanied by usual and customary documentation of such costs, including copies of Third Party invoices supporting such costs and evidence that the costs relate to the VX-661 development program. All payments shall be made without deduction for withholding or similar taxes in United States dollars to the credit of such bank account as may be designated in writing to CFFT. Any payments that fall due on a date that is a legal holiday in The Commonwealth of Massachusetts may be made on the next following day that is not a legal holiday in The Commonwealth. If the development program for VX-661 is discontinued or the VX-661 External Development Costs incurred to advance VX-661 through completion of the [***] are less than Information redacted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission. [***], CFFT agrees, subject to termination rights by CFFT in accordance with this Fifth Amendment, that any funds remaining from the original [***] funding commitment hereunder will be available to reimburse Vertex for the actual external development costs related to continued development of First Generation Correctors, on the invoicing and payment terms set forth in this Section 1.3 as if it were with respect to VX-661 External Development Costs. At its sole discretion, CFFT shall have the right to terminate its funding obligation under this Section 1.3, effective upon written notice provided to Vertex [***]. Upon any such funding termination: (a) CFFT shall be responsible to fund only those costs incurred for activities initiated by Vertex and for which Vertex has incurred non-terminable obligations to a Third Party prior to the funding termination; (b) the royalty rates for Net Sales of VX-661 Drug Product and VX-809 Drug Product set forth in Section 5.3.1(b), [***], as illustrated by the examples set forth in Exhibit 1.3(c); and (c) Section 10.6 of the Original Agreement, as amended by this Fifth Amendment, shall terminate and CFFT shall have none of the rights set forth in such Section 10.6.