IN AN AMOUNT EQUAL TO THE PURCHASE PRICE, WHICH SECURITY INTEREST
SHALL, UPON THE FILING OF A DULY PREPARED FINANCING STATEMENT IN THE APPROPRIATE
FILING OFFICE, BE PERFECTED AND PRIOR TO ALL OTHER LIENS THEREON.
IN THE CASE
OF ANY RECHARACTERIZATION, THE PURCHASER SHALL HAVE, IN ADDITION TO THE RIGHTS
AND REMEDIES WHICH THEY MAY HAVE UNDER THIS AGREEMENT, ALL OTHER RIGHTS AND
REMEDIES PROVIDED TO A SECURED CREDITOR AFTER DEFAULT UNDER THE UCC AND OTHER
APPLICABLE LAW, WHICH RIGHTS
7
Information redacted pursuant to a confidential treatment request. An unredacted
version
of this exhibit has been filed separately with the Commission.
AND REMEDIES SHALL BE CUMULATIVE.
IN THE CASE OF ANY RECHARACTERIZATION, EACH
OF VERTEX AND THE PURCHASER REPRESENTS AND WARRANTS AS TO ITSELF THAT EACH
REMITTANCE OF THE MILESTONE PAYMENT OR ANY PORTION THEREOF OR ANY OTHER PAYMENT
IN RESPECT OF THE PURCHASED INTEREST BY OR ON BEHALF OF VERTEX TO THE PURCHASER
HEREUNDER WILL HAVE BEEN (I) IN PAYMENT OF A DEBT INCURRED BY VERTEX IN THE
ORDINARY COURSE OF BUSINESS OR FINANCIAL AFFAIRS OF VERTEX AND THE PURCHASER AND
(II) MADE IN THE ORDINARY COURSE OF BUSINESS OR FINANCIAL AFFAIRS OF VERTEX AND
THE PURCHASER.
Section 2.02
Entitlement to Payments.
(A)
VERTEX AGREES THAT THE PURCHASER IS ENTITLED TO THE PURCHASED
INTEREST AND THE PURCHASER MAY ENFORCE DIRECTLY AGAINST JANSSEN THE RIGHT TO
PAYMENT OF ANY PORTION OF THE MILESTONE PAYMENT REPRESENTED BY THE PURCHASED
INTEREST WHEN EARNED UPON ACHIEVEMENT OF THE MILESTONE EVENT PURSUANT TO THE
JANSSEN AGREEMENT.
(B)
FOR AVOIDANCE OF DOUBT, THE PARTIES HERETO UNDERSTAND AND AGREE
THAT IF JANSSEN FAILS TO PAY THE MILESTONE PAYMENT IN FULL WHEN VERTEX OR THE
PURCHASER REASONABLY BELIEVES THE MILESTONE PAYMENT IS DUE UNDER THE JANSSEN
AGREEMENT, EXCEPT FOR ANY SET-OFF MADE BY JANSSEN AGAINST THE MILESTONE PAYMENT
(EACH SUCH UNPAID AMOUNT, A "DISCREPANCY"), THEN VERTEX SHALL NOT BE OBLIGATED
TO PAY TO THE PURCHASER OR OTHERWISE COMPENSATE OR MAKE THE PURCHASER WHOLE WITH
RESPECT TO ANY SUCH DISCREPANCY; PROVIDED, HOWEVER, THAT NOTHING IN THIS
SECTION 2.02(B) SHALL LIMIT OR AFFECT IN ANY RESPECT THE RIGHTS OF THE PURCHASER
UNDER SECTION 5.05 OR OF ANY PURCHASER INDEMNIFIED PARTY UNDER SECTION 7.05.
NOTWITHSTANDING THE FOREGOING, IN THE EVENT THAT THE MILESTONE PAYMENT IS NOT
PAID IN FULL BY JANSSEN DUE TO JANSSEN ASSERTING OR EFFECTING A SET-OFF AGAINST
THE MILESTONE PAYMENT PURSUANT TO THE JANSSEN AGREEMENT (WHETHER OR NOT ANY SUCH
SET-OFF WAS DISCLOSED HEREUNDER) OR JANSSEN OTHERWISE DOES NOT, FOLLOWING THE
OCCURRENCE OF THE MILESTONE EVENT, PAY THE MILESTONE PAYMENT IN FULL DUE TO ANY
BREACH BY VERTEX OF THE JANSSEN AGREEMENT, VERTEX SHALL BE LIABLE FOR, AND SHALL
PAY THE PURCHASER THE AMOUNT OF ANY SUCH SET-OFF OR DISCREPANCY ON THE DATE THE
MILESTONE PAYMENT IS PAID OR PAYABLE TO THE PURCHASER HEREUNDER, WHICH IN ANY
EVENT SHALL NOT EXCEED THE AMOUNT OF THE MILESTONE PAYMENT.
VERTEX SHALL BE
ENTITLED TO ANY SUCH AMOUNTS THAT IT PAYS TO PURCHASER IF JANSSEN SUBSEQUENTLY
PAYS SUCH