Common use of Estimated Development Costs Clause in Contracts

Estimated Development Costs. The budget set forth in the First Indication Development Plan (the “Development Budget”) shall set out the Third Party costs projected to be incurred by GW Pharma in the performance of its obligations under such Development Plan (including the cost to GW Pharma of relevant clinical trial insurance) other than the costs to GW Pharma of generating the CMC Data (“Development Costs”). The Development Budget shall estimate the Development Costs to be incurred by GW Pharma for each calendar quarter of each calendar year covered by such Development Budget. GW Pharma shall submit the first invoice in respect of GW Pharma’s estimated Development Costs from the Closing Date until the end of the first full calendar quarter after the Closing Date to Otsuka as soon as practicable following the Closing Date and this first invoice shall be payable within ten (10) days of its submission. Otsuka shall, upon receipt of GW Pharma’s invoices (other than for this first period) at least 30 days in advance, pay to GW Pharma GW Pharma’s estimated Development Costs for such calendar quarter by the 1st day of such calendar quarter. GW Pharma shall submit to Otsuka via the JDC a progress report and to Otsuka itself copies of invoices paid by GW during such calendar quarter to Third Parties for the performance of Development Plan activities within ten (10) days of the end of each such calendar quarter or within forty-eight (48) hours of their receipt from the Third Party, if later. Each progress report shall, without limitation, set forth in respect of clinical studies managed or conducted by GW Pharma under the Development Plan, the number of screened subjects, the number of enrolled subjects, the number of withdrawn or discontinued subjects, the number of completed subjects and such other information as may be reasonably requested by Otsuka. Pre-clinical studies conducted or managed by GW Pharma under the Development Plan and paid by Otsuka shall become a subject of the progress report due following the calendar quarter in which such pre-clinical study was completed. In respect of any such pre-clinical study, the progress report shall include the study report for such pre-clinical study and copies of all invoices paid by GW to Third Parties in respect of the performance of such pre-clinical study. The Parties shall discuss and agree any other information or data to be included in the format for the progress report. In the event the JDC or JCC (as applicable under Section 3.7) make any change to the First Indication Development Plan resulting in an increase or decrease in Development Costs, the JDC or JCC (as applicable) shall also make corresponding changes to the Development Budget for the First Indication and the payments to be made to GW Pharma pursuant to this Section 4.2 shall be increased or decreased accordingly to reflect the change in the Development Budget for the First Indication. If during the course to the First Indication Development Plan, either Party comes to believe that Development Costs for the First Indication are likely to exceed by ***% or more the estimated Development Costs, such Party shall notify the relevant JDC sub-committee at its next meeting, together with the reasons for the same. GW Pharma shall not incur amounts in excess of such *** per cent. (***%) increase without the consent of the JDC. Upon approval by the JDC, the Development Budget (and payments made to GW Pharma under this Section 4.2) shall be amended to reflect the decision of the JDC in respect of such increase or decrease to the Development Budget. Any clinical trial agreements performed by or on behalf of GW Pharma for which Otsuka is obligated to pay pursuant to this Agreement shall contain a provision requiring the return of funds advanced to any clinical site or clinical investigator in respect of services not actually performed. GW Pharma shall conduct each pre-clinical study and each clinical study for which it is responsible under this Agreement or a Development Plan or require each pre-clinical research organization or clinical research organization, as the case may be, engaged for such purposes to conduct each such pre-clinical study in accordance with GLP and each clinical study in accordance with GCP. Clinical trial insurance obtained by GW Pharma for the conduct of clinical trials under the First Indication Development Plan shall include Otsuka as an additional named insured. *** Portions of this page have been omitted pursuant to a request for Confidential Treatment and filed separately with the Commission.

Estimated Development Costs. The budget set forth in the First Indication Development Plan (the “Development Budget”) shall set out the Third Party costs AND FTE COSTS projected to be incurred by GW Pharma in the performance of its obligations under such Development Plan (including the cost to GW Pharma of relevant clinical trial insurance) other than the costs to GW Pharma of generating the CMC Data (“Development Costs”). The Development Budget shall estimate the Development Costs to be incurred by GW Pharma for each calendar quarter of each calendar year covered by such Development Budget. GW Pharma shall submit the first invoice in respect of GW Pharma’s estimated Development Costs from the Closing Date until the end of the first full calendar quarter after the Closing Date to Otsuka as soon as practicable following the Closing Date and this first invoice shall be payable within ten (10) days of its submission. Otsuka shall, upon receipt of GW Pharma’s invoices (other than for this first period) at least 30 days in advance, pay to GW Pharma GW Pharma’s estimated Development Costs for such calendar quarter by the 1st day of such calendar quarter. GW Pharma shall submit to Otsuka via the JDC a progress report and to Otsuka itself copies of invoices paid by GW during such calendar quarter to Third Parties for the performance of Development Plan activities within ten (10) days of the end of each such calendar quarter or within forty-eight (48) hours of their receipt from the Third Party, if later. Each progress report shall, without limitation, set forth in respect of clinical studies managed or conducted by GW Pharma under the Development Plan, the number of screened subjects, the number of enrolled subjects, the number of withdrawn or discontinued subjects, the number of completed subjects and such other information as may be reasonably requested by Otsuka. Pre-clinical studies conducted or managed by GW Pharma under the Development Plan and paid by Otsuka shall become a subject of the progress report due following the calendar quarter in which such pre-clinical study was completed. In respect of any such pre-clinical study, the progress report shall include the study report for such pre-clinical study and copies of all invoices paid by GW to Third Parties in respect of the performance of such pre-clinical study. The Parties shall discuss and agree any other information or data to be included in the format for the progress report. In the event the JDC or JCC (as applicable under Section 3.7.) make any change to the First Indication Development Plan resulting in an increase or decrease in Development Costs, the JDC or JCC (as applicable) shall also make corresponding changes to the Development Budget for the First Indication and the payments to be made to GW Pharma pursuant to this Section 4.2 shall be increased or decreased accordingly to reflect the change in the Development Budget for the First Indication. If during the course to the First Indication Development Plan, either Party comes to believe that Development Costs for the First Indication are likely to exceed by ***% or more the estimated Development Costs, such Party shall notify the relevant JDC sub-committee at its next meeting, together with the reasons for the same. GW Pharma shall not incur amounts in excess of such *** per cent. (***%) increase without the consent of the JDC. Upon approval by the JDC, the Development Budget (and payments made to GW Pharma under this Section 4.2) 4.2 shall be amended to reflect the decision of the JDC in respect of such increase or decrease to the Development Budget. Any clinical trial agreements performed by or on behalf of GW Pharma for which Otsuka is obligated to pay pursuant to this Agreement shall contain a provision requiring the return of funds advanced to any clinical site or clinical investigator in respect of services not actually performed. GW Pharma shall conduct each pre-clinical study and each clinical study for which it is responsible under this Agreement or a Development Plan or require each pre-clinical research *** Portions of this page have been omitted pursuant to a request for Confidential Treatment and filed separately with the Commission. organization or clinical research organization, as the case may be, engaged for such purposes to conduct each such pre-clinical study in accordance with GLP and each clinical study in accordance with GCP. Clinical trial insurance obtained by GW Pharma for the conduct of clinical trials under the First Indication Development Plan shall include Otsuka as an additional named insured. *** Portions of this page have been omitted pursuant to a request for Confidential Treatment and filed separately with the Commission.