Exhibit 4.2


 


(Face of Note)


 


VERTEX PHARMACEUTICALS INCORPORATED


 


SECURED NOTES DUE 2012


 


No. 1


 


$155,000,000


 


VERTEX
PHARMACEUTICALS INCORPORATED, a Massachusetts corporation, for value received,
hereby promises to pay to OLMSTED PARK S.A. or registered assigns, the
principal sum of One Hundred Fifty-Five Million Dollars on October 31,
2012.


 


[Remainder of this page left
intentionally blank]


 


 


VERTEX PHARMACEUTICALS INCORPORATED


 


	
   

  	
  By:

  	
   /s/
  Ian F. Smith

  
	
   

  	
   

  	
  Name: Ian F.
  Smith

  
	
   

  	
   

  	
  Title:
  Executive VP and CFO

  



 

















 


This is one of
the Notes referred 

to in the within mentioned Indenture:


 


Dated:  September 30, 2009


 


U.S. BANK
NATIONAL ASSOCIATION,

as Trustee


 


	
  By:

  	
   /s/
  Karen Beard

  	
   

  
	
   

  	
  Authorized
  Signatory

  	
   

  
				



 

















 


(Back of Note)


 


VERTEX PHARMACEUTICALS
INCORPORATED


 


SECURED NOTES DUE 2012


 


THIS NOTE WAS ISSUED WITH ORIGINAL ISSUE
DISCOUNT FOR PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE UNITED STATES
INTERNAL REVENUE CODE OF 1986, AS AMENDED. 
THE ISSUE PRICE OF THIS NOTE WAS 78.8494 % OF ITS PRINCIPAL AMOUNT;
THE TOTAL AMOUNT OF ORIGINAL ISSUE DISCOUNT IS $211.51 PER NOTE WITH A
PRINCIPAL AMOUNT OF $1,000; THE ISSUE DATE IS SEPTEMBER 30, 2009; AND THE YIELD
TO MATURITY IS 8.00% PER YEAR.


 


THE SECURITY
(OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A TRANSACTION
EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES SECURITIES
ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND THE SECURITY EVIDENCED
HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF
SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM.  EACH PURCHASER OF THE SECURITY EVIDENCED
HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION
FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE
144A THEREUNDER.  THE HOLDER OF THE
SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF VERTEX PHARMACEUTICALS
INCORPORATED (THE “COMPANY”) THAT (A) SUCH SECURITY MAY BE RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)(a) INSIDE THE UNITED STATES TO
A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) PURCHASING FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A UNDER THE SECURITIES ACT, (b) OUTSIDE
THE UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE REQUIREMENTS
OF RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT (AND BASED
UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY IF THE COMPANY SO
REQUESTS), (c) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF APPLICABLE) (AND BASED UPON
AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY IF THE COMPANY SO REQUESTS) OR (d) IN
ACCORDANCE WITH 


 

















 


ANOTHER
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED
UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY IF THE COMPANY SO
REQUESTS), (2) TO THE COMPANY OR (3) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER OF THE SECURITY EVIDENCED HEREBY OF THE
RESALE RESTRICTIONS SET FORTH IN CLAUSE (A) ABOVE.  NO REPRESENTATION CAN BE MADE AS TO THE
AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144 FOR RESALE OF THE SECURITY
EVIDENCED HEREBY.


 


Capitalized
terms used herein shall have the meanings assigned to them in the Indenture
referred to below unless otherwise indicated. 
The Notes are general obligations of the Company, secured by Liens on
the Collateral as described in the Indenture. 
This Note is entitled to the benefits of the Note Guarantees by the
Guarantors on the terms set forth in the Indenture.


 


1.  Accreted
Value; Interest.  The Accreted Value of this Note is the amount per
$1,000 principal amount at maturity of this Note that is equal to (a) as
of any date prior to October 31, 2012, $788.49 accreted at the daily compounding
rate equivalent to 8% per year from the Issue Date through the date of
determination, computed on the basis of a 365-day year, and (b) as of October 31,
2012, or any date thereafter, $1,000.  Vertex Pharmaceuticals
Incorporated, a Massachusetts corporation (such corporation, and its successors
and assigns under the Indenture, being herein called the “Company”) promises to
pay the Accreted Value of this Note,
and, in the circumstances provided in the Indenture, Liquidated Damages, if any. 
The Company further promises to pay interest (including post-petition interest
to the extent permitted in any proceeding under any Bankruptcy Law) on overdue
Accreted Value and Liquidated Damages, if any, from time to time on demand at a
rate of 12% per annum, and the Company shall also pay interest (including to
the extent permitted post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest (without regard to any
applicable grace periods) from time to time on demand at the same rate to the
extent lawful.  Interest will be computed on the basis of a 365-day year.


 


2.  Method
of Payment.  The Notes will be
payable as to Accreted Value, Liquidated Damages, if any, and interest, if any,
at the office or agency of the Company maintained for such purpose within the
City and State of New York, or, at the option of the Company, payment of
interest may be made by check mailed to the Holders at their addresses set
forth in the register of Holders, and


 

















 


provided that
payment by wire transfer of immediately available funds will be required with
respect to Accreted Value of and interest, and Liquidated Damages, if any, on
all Global Notes and all other Notes the Holders of which shall have provided
wire transfer instructions to the Company or the Paying Agent.  Such payment shall be in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts.


 


3.  Paying Agent and Registrar.  Initially, U.S. Bank National Association,
the Trustee under the Indenture, will act as Paying Agent and Registrar.  The Company may change any Paying Agent or
Registrar without notice to any Holder. 
The Company or any of its Subsidiaries may act in any such capacity; provided that if the Company or such
Subsidiary is acting as Paying Agent, the Company or such Subsidiary shall
segregate all funds held by it as Paying Agent and hold them in a separate
trust fund for the benefit of the Holders.


 


4.  Indenture.  The Company issued the Notes under an
Indenture dated as of September 30, 2009 (as supplemented from time to
time, the “Indenture”), among the Company, the Guarantors and the
Trustee.  The terms of the Notes include
those stated in the Indenture and those made part of the Indenture by reference
to the Trust Indenture Act of 1939, as amended (15 U.S. Code §§
77aaa-77bbbb).  The Notes are subject to
all such terms, and Holders are referred to the Indenture and such Act for a
statement of such terms.


 


The summary of
the terms of this Note contained herein does not purport to be complete and is
qualified by reference to the Indenture. 
To the extent permitted by applicable law, in the event of any
inconsistency between the terms of this Note and the terms of the Indenture,
the terms of the Indenture shall control.


 


The Indenture
restricts, among other things, the Company’s and the Guarantors’ ability to
sell or incur liens on Collateral or merge or consolidate with any other
person.


 


5.  Optional Redemption.


 


The Company
may redeem the Notes at its option, in whole at any time or in part from time
to time, upon not less than 2 nor more than 5 Business Days’ prior notice
electronically delivered or mailed by first-class mail to each Holder’s
registered address, at a redemption price equal to 100% of the Accreted Value
of the Notes redeemed plus Liquidated Damages, if any, and accrued and unpaid
interest, if any, to, the applicable redemption date (subject to the right of
holders of record on the relevant record date to receive interest due on the
relevant interest payment date).


 

















 


6.  Mandatory Redemption.


 


Except as set
forth below, the Company shall not be required to make mandatory redemption or
sinking fund payments with respect to the Notes.


 


Upon the occurrence of a
Milestone Event as defined in the Janssen Agreement as in effect on the date of
the Indenture (whether or not the Janssen Agreement is still in effect or has
been subsequently amended, sold or assigned), the Company shall redeem for cash
the maximum principal amount at maturity of Notes that may be redeemed with the
amount of the Milestone Payment due, under the terms of the Janssen Agreement
as in effect on the date of the Indenture, upon the occurrence of the
applicable Milestone Event, at a redemption price in cash in an amount equal to
100% of the Accreted Value thereof, plus accrued and unpaid interest and
Liquidated Damages, if any, to the date fixed for the closing of such
redemption in accordance with the procedures set forth in the Indenture.  Any such redemption shall be made pursuant to
the provisions of Sections 3.01 through 3.06 of the Indenture.


 


7.  Repurchase at Option of Holder.  If a Change of Control occurs, each Holder
will have the right to require the Company to repurchase all or any part (equal
to $50,000 or an integral multiple of $1,000 in excess thereof) of that Holder’s
Notes pursuant to an offer (a “Change of Control Offer”) on the terms set forth
in the Indenture.  In the Change of
Control Offer, the Company shall offer payment (a “Change of Control Payment”)
in cash equal to 100% of the aggregate Accreted Value of Notes repurchased plus
accrued and unpaid interest and Liquidated Damages thereon to the date of
repurchase (the “Change of Control Payment Date,” which date will be no earlier
than the date of such Change of Control). No later than 30 days following any
Change of Control, the Company shall mail a notice to each Holder stating that
a Change of Control has occurred and offering to repurchase Notes on the Change
of Control Payment Date specified in such notice, which date will be no earlier
than 30 days and no later than 60 days from the date such notice is mailed,
pursuant to the procedures required by the Indenture and described in such
notice.


 


8.  Notice of Redemption.  Notice of redemption will be electronically
delivered or mailed at least 2 days but not more than 5 Business Days before
the redemption date to each Holder whose Notes are to be redeemed at its
registered address.  Notes in denominations
larger than $50,000 may be redeemed in part but only in whole multiples of
$1,000, unless all of the Notes held by a Holder are to be redeemed.  On and after the redemption date, interest
ceases to accrue on Notes or portions thereof called for redemption.


 


9.  Denominations, Transfer, Exchange.  The Notes are in registered form without
coupons in denominations of $50,000 principal amount at maturity 


 

















 


and integral
multiples of $1,000 in excess thereof. 
The transfer of Notes may be registered and Notes may be exchanged as
provided in the Indenture.  The Registrar
and the Trustee may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and the Company may require a
Holder to pay any taxes and fees required by law or permitted by the
Indenture.  The Company need not exchange
or register the transfer of any Note or portion of a Note selected for
redemption, except for the unredeemed portion of any Note being redeemed in
part.


 


10.  Persons Deemed Owners.  The registered Holder of a Note may be treated
as its owner for all purposes.


 


11.  Amendment, Supplement and Waiver.  Subject to certain exceptions, the Indenture,
the Notes, the Note Guarantees and the Collateral Documents may be amended or
supplemented with the consent of the Holders of at least a majority in
aggregate principal amount of the Notes then outstanding (including, without
limitation, consents obtained in connection with a tender offer or exchange
offer for the Notes), and, subject to the terms of the Indenture, any existing
Default or Event of Default (other than a Default or Event of Default in the
payment of the Accreted Value of, Liquidated Damages, if any, or interest on
the Notes, except a payment default resulting from an acceleration that has
been rescinded) or compliance with any provision of the Indenture or the Notes
may be waived with the consent of the Holders of a majority in aggregate
principal amount of the then outstanding Notes (including, without limitation,
consents obtained in connection with a tender offer or exchange offer for the
Notes).  Certain provisions in the
Indenture, Notes, Notes Guarantees and Collateral Documents may be amended or
supplemented without the consent of any Holder of a Note.  Certain provisions in the Indenture, Notes,
Notes Guarantees and Collateral Documents may not be amended or supplemented
without the consent of every Holder affected thereby.


 


12.  Defaults and Remedies.  The Indenture contains certain Events of
Default.


 


If any Event
of Default (other than an Event of Default specified in clause (d) or (e) of
Section 6.01 with respect to the Company) occurs and is continuing, the
Trustee or the Holders of at least 25% in aggregate principal amount at
maturity of the then outstanding Notes may declare all the Notes to be due and
payable immediately.  Notwithstanding the
foregoing, if an Event of Default specified in clause (d) or (e) of Section 6.01
occurs with respect to the Company, all outstanding Notes will become due and
immediately payable without further action or notice.  Upon any Note becoming due and payable under
the Indenture, whether automatically or by declaration, such Note will
forthwith mature and the entire unpaid Accreted Value of such Note, plus (1) all
accrued and 


 

















 


unpaid
interest thereon and (2) Liquidated Damages, if any, determined in respect
of such Accreted Value shall all be immediately due and payable.  Upon acceleration of the Notes, Accreted Value shall cease to accrete
and Liquidated Damages will be calculated as of the date of such acceleration,
but interest will accrue on the Accreted Value and the Liquidated Damages at
the rate provided for overdue Accreted Value and Liquidated Damages on the
Notes in Section 1 hereof and Section 4.01 of the Indenture until
such Accreted Value and Liquidated Damages are paid. Holders may not
enforce the Indenture or the Notes except as provided in the Indenture.  Subject to certain limitations, Holders of a
majority in aggregate principal amount at maturity of the then outstanding
Notes may direct the Trustee in its exercise of any trust or power.  The Trustee may withhold from Holders of the
Notes notice of any continuing Default or Event of Default (except a Default or
Event of Default relating to the payment of principal or interest) if it
determines that withholding notice is in their interest.  The Company is required to deliver to the
Trustee annually a statement regarding compliance with the Indenture, and the
Company is required upon becoming aware of any Default or Event of Default, to
deliver to the Trustee a statement specifying such Default or Event of Default.


 


13.  Trustee and Collateral Agent Dealings with
Company.  Each of the Trustee and the
Collateral Agent, in its individual or any other capacity, may make loans to,
accept deposits from, and perform services for the Company or its Affiliates,
and may otherwise deal with the Company or its Affiliates, as if it were not
the Trustee and/or the Collateral Agent, as the case may be.


 


14.  No Recourse Against Others.  No director, officer, employee, incorporator,
stockholder, member, manager or partner of the Company or any Guarantor, as
such, shall have any liability for any obligations of the Company or the
Guarantors under the Notes, the Indenture, the Note Guarantees or for any claim
based on, in respect of, or by reason of, such obligations or their
creation.  Each Holder by accepting a
Note waives and releases all such liability. 
The waiver and release are part of the consideration for the issuance of
the Notes.


 


15.  Collateral.  The due and punctual payment of the Accreted
Value of, Liquidated Damages, if any, on and interest on, the Notes and all
other Note Obligations are secured as provided in the Security Agreement, which
the Company and the Guarantors have entered into simultaneously with the
execution of the Indenture, and the other Collateral Documents in effect from
time to time.  Each Holder, by its
acceptance thereof, consents and agrees to the terms of the Collateral
Documents (including, without limitation, the provisions providing for
foreclosure and release of Collateral) as the same may be in effect or may be
amended, supplemented or otherwise modified from time to time in accordance
with their terms and authorizes and directs the Collateral Agent or the Trustee
(as 


 

















 


the case may
be) to enter into the Collateral Documents and to perform their obligations and
exercise their rights thereunder in accordance therewith.


 


16.  Subordination.  The Company agrees, and each Holder by accepting a Note agrees, that the
Note Obligations are expressly subordinated hereby, and as provided in the
Indenture, in right of payment to the prior payment in full of all Senior Debt,
provided that such subordination shall
not apply to the rights of the Holders to receive Payments from Collateral, as
defined in the Indenture, in accordance with Section 14.02 of the
Indenture.


 


17.  Authentication.  This Note shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating
agent.


 


18.  Abbreviations.  Customary abbreviations may be used in the
name of a Holder or an assignee, such as: 
TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JE
TEN (= joint tenants with right of survivorship and not as tenants in common),
CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).


 


19.  CUSIP Numbers.  Pursuant to a recommendation promulgated by
the Committee on Uniform Security Identification Procedures, the Company has
caused CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP
numbers in notices of redemption as a convenience to Holders.  No representation is made as to the accuracy
of such numbers either as printed on the Notes or as contained in any notice of
redemption and reliance may be placed only on the other identification numbers
placed thereon.


 


The Company
shall furnish to any Holder upon written request and without charge a copy of
the Indenture.  Requests may be made to:


 


Vertex Pharmaceuticals
Incorporated

130 Waverly Street


Cambridge, MA 02139


Attention: Investor Relations


 


20.  Unclaimed Money.  Subject to certain conditions, if money for
the payment of Accreted Value, Liquidated Damages, if any, or interest remains
unclaimed for two years, the Trustee or Paying Agent shall pay the money back
to the Company at its request in accordance with the Indenture, unless any
abandoned property law designates another Person.  After any such payment, Holders entitled to
the money must look only to the Company and not to the Trustee for payment
unless such abandoned property law designates another Person.


 

















 


21.  Discharge and Defeasance.  Subject to certain conditions, the Company at
any time may terminate some or all of the obligations of the Company under the
Notes and the Indenture if the Company irrevocably deposits in trust with the
Trustee an amount in United States dollars sufficient to pay and discharge the
entire Indebtedness on the Notes, not theretofore delivered for cancellation,
including the Accreted Value of, Liquidated Damages, if any, and accrued
interest on such Notes at such maturity, Stated Maturity or redemption date, as
the case may be.


 


22.  Governing Law.  THE INDENTURE AND THIS NOTE WILL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK,
WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAW PRINCIPLES THEREOF.


 

















 


ASSIGNMENT FORM


 


To assign this Note, fill in the form below:


 


(I) or (we) assign and transfer this Note to:


 


	
   

  	
   

  
	
  (Insert
  Assignee’s legal name)

  



 


	
   

  



 


	
   

  
	
  (Insert
  assignee’s soc, sec, or tax I.D. no.)

  



 


	
   

  



 


	
   

  



 


	
   

  
	
  (Print or
  type assignee’s name, address and zip code)

  



 


and irrevocably appoint


 


	
   

  



to transfer
this Note on the books of the Company. 
The agent may substitute another to act for him.


 


	
  Date:

  	
   

  	
   

  



 


	
   

  	
  Your Signature:

  	
   

  
	
   

  	
  (Sign exactly as your name appears on the
  face of this Note)

  
				



 


	
  Signature
  Guarantee:

  	
   

  	
   

  



 


Participant in a recognized
Signature Guarantee Medallion Program (or other signature guarantor acceptable
to the Trustee).


 

















 


OPTION OF HOLDER TO ELECT PURCHASE


 


If you want to
elect to have this Note purchased by the Company pursuant to Section 4.08
of the Indenture, check the appropriate box below:


 


o Section 4.08.


 


If you want to
elect to have only part of the Note purchased by the Company pursuant to Section 4.08
of the Indenture, state the amount you elect to have purchased:


 


	
   

  	
  $

  	
   

  	
   

  
	
   

  
	
   

  	
  Date:

  	
   

  	
   

  
							



 


	
   

  	
  Your Signature:

  	
   

  



(Sign exactly as your name appears on the face of this Note)


 


	
   

  	
  Tax Identification No:

  	
   

  



 


	
   

  	
  Signature Guarantee*:

  	
   

  	
   

  



 






*Participant
in a recognized Signature Guarantee Medallion Program (or other signature
guarantor acceptable to the Trustee).