Common use of Budget and Funding Clause in Contracts

Budget and Funding. From and after the Effective Date of this Amendment, the following provisions shall apply to any incremental funding for Corrector research in 2005, and to the budget and funding for all Corrector research thereafter under the Research Plan, in lieu of the provisions in Sections 4.1, 4.2 and 4.3 of the Existing Agreement. 4.1. The initial budget for incremental funding of the Corrector Research Program, relating to discovery, optimization and IND-enabling activities for Corrector Compounds, is attached hereto as Exhibit 4.1 (the “Initial Corrector Budget”). The Initial Corrector Budget includes only amounts that are incremental to the funding currently provided for Corrector research in the “Alternative Program” under the Current Budget. Any material revisions to the Initial Corrector Budget which would result in an increase in total funding for the Corrector Research Program beyond the amount provided under this Amendment will require the prior approval of CFFT. Any other adjustments to the Initial Corrector Budget may be undertaken by Vertex with prior notice to, but without prior approval from, CFFT. Vertex will provide CFFT with [***] reports within [***] showing expenses incurred under the Corrector Research Program during the quarter just ended against budgeted expenses for that quarter. For [***], the report will cover the period from the Effective Date of this Amendment through the end of that quarter. 4.2. CFFT will fund [***] of the Initial Corrector Budget and Vertex will fund [***] of the Initial Corrector Budget. Based on the approved Initial Corrector Budget of [***], CFFT will make the payments to Vertex specified below during the specified periods. January 1, 2006—December 31, 2006 [*** ] [*** ] January 1, 2007—March 31, 2008 [*** ] [*** ] Payments due under the Initial Corrector Budget on account of internal FTEs shall be made by CFFT [***]. Payments due under the Initial Corrector Budget on account of external costs shall be made by CFFT to Vertex [***] within [***] following [***] . 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 which 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. On or before January 31 of 2006, 2007, 2008 and 2009, Vertex will provide CFFT with an accounting of all internal FTE costs and external Research costs (including documentary evidence of such external costs) incurred under the Research Program during the most recently concluded calendar year. Internal FTE costs will be calculated at an annual rate of [***] per FTE. 4.3. If CFFT’s contribution for any reporting period is in excess of its agreed portion of the total expense incurred by Vertex (internal and external) for the Corrector Research Program for that period, the excess amount will be carried over and applied as a credit against CFFT’s required contribution in future periods, except that any aggregate excess contributions provided by CFFT as of the end of the Research Program Term will be refunded to CFFT within [***]thereafter. To the extent not inconsistent with the provisions of this Amendment, the provisions of Section 4.5 will apply to the Corrector Research Program. 4.4. Vertex will dedicate a minimum average of [***] FTE scientists (on an annualized basis) to the Corrector Research Program during its term, [***].

Budget and Funding. From and after the Effective Date of this Amendment, the following provisions shall apply to any incremental funding for Corrector research in 2005, and to the budget and funding for all Corrector research thereafter under the Research Plan, in lieu of the provisions in Sections 4.1, 4.2 and 4.3 of the Existing Agreement. 4.1. The initial budget for incremental funding of the Corrector Research Program, relating to discovery, optimization and IND-enabling activities for Corrector Compounds, is attached hereto as Exhibit 4.1 (the “Initial Corrector Budget”). The Initial Corrector Budget includes only amounts that are incremental to the funding currently provided for Corrector research in the “Alternative Program” under the Current Budget. Any material revisions to the Initial Corrector Budget which would result in an increase in total funding for the Corrector Research Program beyond the amount provided under this Amendment will require the prior approval of CFFT. Any other adjustments to the Initial Corrector Budget may be undertaken by Vertex with prior notice to, but without prior approval from, CFFT. Vertex will provide CFFT with [***] reports within [***] showing expenses incurred under the Corrector Research Program during the quarter just ended against budgeted expenses for that quarter. For [***], the report will cover the period from the Effective Date of this Amendment through the end of that quarter. 4.2. CFFT will fund [***] of the Initial Corrector Budget and Vertex will fund [***] of the Initial Corrector Budget. Based on the approved Initial Corrector Budget of [***], CFFT will make the payments to Vertex specified below during the specified periods. INITIAL CORRECTOR BUDGET (millions $) Research Period Aggregate Budget Amount CFFT Financial Commitment January 1, 2006—2006 – December 31, 2006 [*** *] [*** *] January 1, 2007—2007 – March 31, 2008 [*** *] [*** *] Payments due under the Initial Corrector Budget on account of internal FTEs shall be made by CFFT [***]. Payments due under the Initial Corrector Budget on account of external costs shall be made by CFFT to Vertex [***] within [***] following [***] ]. 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 which 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. On or before January 31 of 2006, 2007, 2008 and 2009, Vertex will provide CFFT with an accounting of all internal FTE costs and external Research costs (including documentary evidence of such external costs) incurred under the Research Program during the most recently concluded calendar year. Internal FTE costs will be calculated at an annual rate of [***] per FTE. 4.3. If CFFT’s contribution for any reporting period is in excess of its agreed portion of the total expense incurred by Vertex (internal and external) for the Corrector Research Program for that period, the excess amount will be carried over and applied as a credit against CFFT’s required contribution in future periods, except that any aggregate excess contributions provided by CFFT as of the end of the Research Program Term will be refunded to CFFT within [***]] thereafter. To the extent not inconsistent with the provisions of this Amendment, the provisions of Section 4.5 will apply to the Corrector Research Program. 4.4. Vertex will dedicate a minimum average of [***] FTE scientists (on an annualized basis) to the Corrector Research Program during its term, [***].

Budget and Funding. From and after the Effective Date of this Amendment, the following provisions shall apply to any incremental funding for Corrector research in 2005, and to the budget and funding for all Corrector research thereafter under the Research Plan, in lieu of the provisions in Sections 4.1, 4.2 and 4.3 of the Existing Agreement. 4.1. The initial budget for incremental funding of the Corrector Research Program, relating to discovery, optimization and IND-enabling activities for Corrector Compounds, is attached hereto as Exhibit 4.1 (the “"Initial Corrector Budget”"). The Initial Corrector Budget includes only amounts that are incremental to the funding currently provided for Corrector research in the “"Alternative Program” " under the Current Budget. Any material revisions to the Initial Corrector Budget which would result in an increase in total funding for the Corrector Research Program beyond the amount provided under this Amendment will require the prior approval of CFFT. Any other adjustments to the Initial Corrector Budget may be undertaken by Vertex with prior notice to, but without prior approval from, CFFT. Vertex will provide CFFT with [***] reports within [***] showing expenses incurred under the Corrector Research Program during the quarter just ended against budgeted expenses for that quarter. For [***], the report will cover the period from the Effective Date of this Amendment through the end of that quarter. 4.2. CFFT will fund [***] of the Initial Corrector Budget and Vertex will fund [***] of the Initial Corrector Budget. Based on the approved Initial Corrector Budget of [***], CFFT will make the payments to Vertex specified below during the specified periods. January 1, 2006—December 31, 2006 [*** *] [*** *] January 1, 2007—March 31, 2008 [*** *] [*** *] Payments due under the Initial Corrector Budget on account of internal FTEs shall be made by CFFT [***]. Payments due under the Initial Corrector Budget on account of external costs shall be made by CFFT to Vertex [***] within [***] following [***] . 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 which 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. On or before January 31 of 2006, 2007, 2008 and 2009, Vertex will provide CFFT with an accounting of all internal FTE costs and external Research costs (including documentary evidence of such external costs) incurred under the Research Program during the most recently concluded calendar year. Internal FTE costs will be calculated at an annual rate of [***] per FTE. 4.3. If CFFT’s 's contribution for any reporting period is in excess of its agreed portion of the total expense incurred by Vertex (internal and external) for the Corrector Research Program for that period, the excess amount will be carried over and applied as a credit against CFFT’s 's required contribution in future periods, except that any aggregate excess contributions provided by CFFT as of the end of the Research Program Term will be refunded to CFFT within [***]thereafter. To the extent not inconsistent with the provisions of this Amendment, the provisions of Section 4.5 will apply to the Corrector Research Program. 4.4. Vertex will dedicate a minimum average of [***] FTE scientists (on an annualized basis) to the Corrector Research Program during its term, [***].