Document:

Exhibit 10.1

 

Dated               10
June               2009

 

 

Lease

 

 

between

 

MEPC
Milton Park No. 1 Limited and 

MEPC Milton Park No. 2 Limited

 

and

 

Vertex
Pharmaceuticals (Europe) Limited

 

and

 

Vertex
Pharmaceuticals Incorporated

 

 

relating to

 

Building 86 and 87

Milton Park

 

	
   

  	
   

  	
   

  	
   

  	
  

  
	
   

  	
   

  	
   

  	
  

  

 

 

PRESCRIBED
CLAUSES

 

	
   LR1.   Date of lease

   	
   :

   	
   2009

   
	
    

   	
    

   	
    

   
	
   LR2.    Title number(s)

   	
    

   	
   LR2.1 Landlord’s title
   number(s)

    

   BK102078

    

   LR2.2 Other title number(s)

    

   ON122118, ON122717, ON130108, ON130606, ON137010, ON145942, ON146219,
   ON225380, ON38283, ON61862, ON72772, ON96949

   
	
    

   	
    

   	
    

   
	
   LR3.    Parties to this lease

    

   	
   :

   	
   Landlord

    

   MEPC MILTON PARK NO. 1 LIMITED (Company number 5491670)
   and MEPC MILTON PARK NO. 2 LIMITED
   (Company number 5491806), on behalf of MEPC Milton Park Limited Partnership,  both of whose registered offices
   are at 4th Floor Lloyds Chambers 1 Portsoken Street
   London E1 8LW

    

   Tenant

    

   VERTEX PHARMACEUTICALS (EUROPE) LIMITED (Company number 2907620)
   whose registered office is at 88 Milton Park Abingdon Oxfordshire OX14 4RY

    

   Other parties

    

   VERTEX PHARMACEUTICALS INCORPORATED (A company registered in
   Massachusetts) of 130 Waverly Street Cambridge Massachusetts MA02139-4242
   whose address for service is care of Vertex Pharmaceuticals (Europe) Limited
   88 Milton Park Abingdon Oxfordshire OX14 4RY - Guarantor)

   
	
    

   	
    

   	
    

   
	
   LR4.    Property

   	
   :

   	
   In the case of a conflict
   between this clause and the remainder of this lease then, for the purposes
   of registration, this clause shall prevail.

    

   Building 86 and 87, The Forum, Milton Park, Abingdon, Oxfordshire,
   OX14 4RY shown edged red on the Plan with a net internal floor area of
   3,839.5 square metres (41,329 square feet) measured in accordance with the
   RICS Code of Measuring Practice (sixth edition) 

   
	
    

   	
    

   	
    

   
	
   LR5.    Prescribed Statements etc.

   	
   :

   	
   None

   
	
    

   	
    

   	
    

   
	
   LR6.   Term
   for which the Property is leased

   	
    

   	
   From and including 23 April 2009

    

   To and including 22 April 2024

   
	
    

   	
    

   	
    

   
	
   LR7.    Premium

   	
    

   	
   None

   
	
    

   	
    

   	
    

   
	
   LR8.    Prohibitions or restrictions on disposing
   of this lease

   	
    

   	
   This lease contains a provision that prohibits or restricts
   dispositions

   

 

1

 

	
   LR9.    Rights of acquisition etc.

   	
    

   	
   LR9.1
   Tenant’s contractual rights to renew this lease, to acquire the reversion or
   another lease of the Property, or to acquire an interest in other land

    

   None

    

   LR9.2
   Tenant’s covenant to (or offer to) surrender this lease

    

   None

    

   LR9.3
   Landlord’s contractual rights to acquire this lease

    

   None

   
	
    

   	
    

   	
    

   
	
   LR10. Restrictive covenants given in this lease
   by the Landlord in respect of land other than the Property

   	
    

   	
   None

   
	
    

   	
    

   	
    

   
	
   LR11.  Easements

   	
    

   	
   LR11.1 Easements granted by this lease for
   the benefit of the Property

    

   The easements specified in Part I of the First Schedule of this
   lease

    

   LR11.2 Easements granted or reserved by
   this lease over the Property for the benefit of other property

    

   The easements specified in Part II of the First Schedule of
   this lease

   
	
    

   	
    

   	
    

   
	
   LR12. Estate rentcharge burdening the Property

   	
    

   	
   None

   
	
    

   	
    

   	
    

   
	
   LR13. Application for standard form of
   restriction

   	
    

   	
   None

   
	
    

   	
    

   	
    

   
	
   LR14. Declaration of trust where there is more
   than one person comprising the Tenant

   	
    

   	
   None

   

 

2

 

This lease made on the date and between
the parties specified in the Prescribed Clauses Witnesses
as follows:

 

1             Definitions and Interpretation

 

In this lease unless the context otherwise requires:

 

1.1         Definitions

 

Adjoining Property means any adjoining or
neighbouring premises in which the Landlord or a Group Company of the Landlord
holds or shall at any time during the Term hold a freehold or leasehold interest;

 

Base Rate means the base rate from time
to time of Barclays Bank PLC or (if not available) such comparable rate of
interest as the Landlord shall reasonably require;

 

Break Date: 1 means 22 April 2014;

 

Break Date: 2 means 22 April 2019;

 

Building Specification means the specification of the
Property annexed to this lease;

 

Centre means the part of the Estate known as The Forum comprising buildings 86-88 Milton Park (of which
the Property forms part) shown edged green on the Plan and includes any part of
it and any alteration or addition to it or replacement of it;

 

Centre Services means the services provided
or procured by the Landlord in relation to the Centre as set out in Part III
of the Fourth Schedule;

 

Common Parts means the accesses and other
areas of the Centre from time to time designated by the Landlord for common use
by the tenants and occupiers of the Centre;

 

Conduit means any existing or future media for
the passage of substances or energy and any ancillary apparatus attached to
them and any enclosures for them;

 

Contractual Term means the term specified in
the Prescribed Clauses;

 

Encumbrances means the obligations and
encumbrances (if any) specified in Part III of the First Schedule;

 

Estate means Milton Park, Abingdon, Oxfordshire
(of which the Centre forms part) and the buildings from time to time standing
on it shown on the Plan together with any other adjoining land which is
incorporated into Milton Park;

 

Estate Common Areas means the accesses,
landscaped areas, car parks, estate management offices and other areas or
amenities on the Estate or outside the Estate but serving or otherwise
benefiting the Estate as a whole which are from time to time provided or
designated for the common amenity or benefit of the owners or occupiers of the
Estate;

 

Estate Services means the services provided
or procured by the Landlord in relation to the Estate as set out in Part II
of the Fourth Schedule;

 

Group Company means a company which is a
member of the same group of companies within the meaning of Section 42 of
the 1954 Act;

 

Guarantor means
any party to this lease so named in the Prescribed Clauses
(which in the case of an individual includes his personal representatives) and
any guarantor of the obligations of the Tenant for the time being;

 

Insurance Commencement Date means
23 April 2009;

 

Insured Risks means fire, lightning,
earthquake, explosion, aircraft (other than hostile aircraft) and other aerial
devices or articles dropped therefrom, riot, civil commotion, malicious damage,
storm or tempest, bursting or overflowing of water tanks apparatus or pipes,
flood and impact by road vehicles (to the extent that insurance against such
risks may ordinarily be arranged with an insurer of good repute) and such other
risks or insurance as may from time to time be reasonably 

 

3

 

required by the Landlord (subject in all cases to such usual
exclusions and limitations as may be imposed by the insurers), and Insured Risk means any one of them;

 

Landlord means the party to this lease
so named in the Prescribed Clauses and includes any other person entitled to
the immediate reversion to this lease;

 

Landlord’s Surveyor means a suitably qualified
person or firm appointed by the Landlord (including an employee of the Landlord
or a Group Company) to perform the function of a surveyor for the purposes of
this lease;

 

Permitted Use means use within Class B1
of the 1987 Order;

 

Plan means the plan
or plans annexed to this lease;

 

Prescribed Clauses means the descriptions and
terms in the section headed Prescribed Clauses
which form part of this lease;

 

Principal Rent means NINE HUNDRED AND THIRTY
FOUR THOUSAND POUNDS (£934,000) per annum subject to increase in accordance
with the Second Schedule;

 

Property means the property described
in the Prescribed Clauses and includes any part of it, any alteration or
addition to the Property and any fixtures and fittings in or on the Property;

 

Quarter Days means 25 March, 24 June, 29 September and
25 December in every year and Quarter Day
means any of them;

 

Rent Commencement Date means 23 September 2011;

 

Review Dates means 23 April 2014 and
23 April 2019;

 

Service Charge means the Service Charge set
out in the Fourth Schedule;

 

Service Charge  Commencement
Date means 23 April 2009;

 

Services means the Estate Services and
the Centre Services;

 

Subletting Unit means part of the Property
consisting of a self contained unit suitable and economically viable for
underletting and approved as such by the Landlord (such approval not to be unreasonably
withheld or delayed);

 

Tenant means the party to this lease so named in
the Prescribed Clauses and includes its successors in title;

 

Term means the Contractual Term together with
any continuation of the term or the tenancy (whether by statute, common law
holding over or otherwise);

 

This lease means this lease and any
document supplemental to it or entered into pursuant to it;

 

Unit 86A means the part of the Property
shown on the Plan coloured orange and marked “86A”;

 

Unit 86B means the part of the Property
shown on the Plan coloured blue and marked “86B”;

 

Unit 87B means the part of the Property
shown on the Plan coloured yellow and marked “87B;

 

Unit 87C means the part of the Property
shown on the Plan coloured green and marked “87C”;

 

Unit 87/88 Link means any building linking the
Property to Building 88 Milton Park;

 

VAT means Value Added Tax and any similar
tax substituted for it or levied in addition to it;

 

1954 Act means the Landlord and Tenant
Act 1954;

 

1987 Order means the Town and Country
Planning (Use Classes) Order 1987 (as originally made);

 

1995 Act means the Landlord and Tenant
(Covenants) Act 1995;

 

2003 Order means The Regulatory Reform
(Business Tenancies) (England and Wales) Order 2003.

 

4

 

1.2         Interpretation

 

1.2.1      If the Tenant or the Guarantor is more than
one person then their covenants are joint and several;

 

1.2.2      Any reference to a statute includes any
modification extension or re-enactment of it and any orders, regulations,
directions, schemes and rules made under it;

 

1.2.3      Any covenant by the Tenant not to do any
act or thing includes an obligation not knowingly to permit or suffer such act
or thing to be done;

 

1.2.4      If the Landlord reserves rights of access
or other rights over or in relation to the Property then those rights extend to
persons authorised by it;

 

1.2.5      References to the act or
default of the Tenant include acts or default or negligence of any
undertenant or of anyone at the Property with the Tenant’s or any undertenant’s
permission or sufferance;

 

1.2.6      The index and Clause headings in this lease
are for ease of reference only;

 

1.2.7      References to the last year of
the Term shall mean the twelve months ending on the expiration or
earlier termination of the Term;

 

1.2.8      References to Costs
include all liabilities, claims, demands, proceedings, damages, losses and
proper and reasonable costs and expenses.

 

2             Demise

 

The Landlord with Full Title Guarantee DEMISES the Property
to the Tenant for the Contractual Term TOGETHER WITH the rights set out in Part I
of the First Schedule, EXCEPT AND RESERVING as mentioned in Part II of the
First Schedule and SUBJECT TO the Encumbrances so far as they are still
subsisting and affect the Property;

 

3             Rent

 

The Tenant will pay by way of rent during the Term or until
released pursuant to the 1995 Act without any deduction counterclaim or set off
except where required by law:

 

3.1         The
Principal Rent and any VAT by equal quarterly payments in advance on the
Quarter Days to be paid by Direct Debit, Banker’s Standing Order or other means
as the Landlord reasonably requires, the first payment for the period from and
including the Rent Commencement Date to (but excluding) the next Quarter Day to
be made on the Rent Commencement Date;

 

3.2         The Service
Charge and any VAT at the times and in the manner set out in the Fourth
Schedule;

 

3.3         The
following amounts and any VAT:

 

3.3.1      the sums specified in Clauses 4.1
[interest] and 4.2 [outgoings and utilities];

 

3.3.2      the sums specified in Clause 6.2.1
[insurance];

 

3.3.3      all Costs properly incurred by the Landlord
as a result of any breach of the Tenant’s covenants in this lease.

 

4             Tenant’s covenants

 

The Tenant covenants with the Landlord throughout the Term,
or until released pursuant to the 1995 Act, as follows:

 

4.1         Interest

 

If the Landlord does not receive any sum due to it under
this lease (other than interest payable under this Clause 4.1) within 14 days
of the due date to pay on demand interest on such sum at 2 per cent above Base
Rate from the due date until payment (both before and after any judgment),
provided this Clause shall not prejudice any other right or remedy for the
recovery of such sum;

 

5

 

4.2         Outgoings and Utilities

 

4.2.1      To pay all existing and future rates,
taxes, charges, assessments and outgoings in respect of the Property (whether
assessed or imposed on the owner or the occupier), except any tax (other than
VAT) arising as a result of the receipt by the Landlord of the rents reserved
by this lease and any tax arising on any dealing by the Landlord with its
reversion to this lease;

 

4.2.2      To pay for all gas, electricity, water,
telephone and other utilities used on the Property, and all charges for meters
and all standing charges, and a fair and reasonable proportion of any joint
charges as determined by the Landlord’s Surveyor acting reasonably;

 

4.3         VAT

 

4.3.1      Any payment or other consideration to be
provided to the Landlord is exclusive of VAT, and the Tenant shall in addition
pay any VAT chargeable on the date the payment or other consideration is due;

 

4.3.2      Any obligation to reimburse or pay the
Landlord’s expenditure extends to irrecoverable VAT on that expenditure, and
the Tenant shall also reimburse or pay such VAT;

 

4.4         Repair

 

4.4.1      To keep the Property in good
and substantial repair and condition (damage by the Insured Risks excepted save
to the extent that insurance moneys are irrecoverable as a result of the act or
default of the Tenant) but it is acknowledged that the window/curtain walling
panelling/framing has suffered some UV degradation of the surface finish. For
these elements only there will be no requirement to improve the quality of the
appearance of the finished surface where this appearance is due to UV
degradation;

 

4.4.2      To make good any disrepair for which the
Tenant is liable within 2 months after the date of written notice from the
Landlord (or sooner if the Landlord reasonably requires);

 

4.4.3      If the Tenant fails to comply with any such
notice the Landlord may enter and carry out the work and the cost shall be
reimbursed by the Tenant on demand as a debt;

 

4.4.4      To enter into maintenance contracts with
reputable contractors for the regular servicing of all plant and equipment
serving only the Property;

 

4.5         Decoration

 

4.5.1      To clean, prepare and paint or treat and
generally redecorate:

 

(i)           all external parts of the Property in every third year
and in the last year of the Term;

 

(ii)          all internal parts of the Property in the fifth and
tenth years and in the last year of the Term;

 

4.5.2      All the work described in Clause 4.5.1 is
to be carried out:

 

(i)           in a good and workmanlike manner to the Landlord’s
reasonable satisfaction; and

 

(ii)          in colours which (if different from the existing colour)
are first approved in writing by the Landlord (approval not to be unreasonably
withheld or delayed);

 

4.6         Cleaning

 

4.6.1      To keep the Property clean, tidy and free
from rubbish;

 

4.6.2      To clean the inside and outside of windows
and any washable surfaces at the Property as often as reasonably necessary;

 

4.7         Overloading

 

Not to overload the floors, ceilings or structure of the
Property or any plant machinery or electrical installation serving the
Property;

 

6

 

4.8         Conduits

 

To keep the Conduits in or serving the Property clear and
free from any noxious, harmful or deleterious substance, and to remove any
obstruction and repair any damage to the Conduits as soon as reasonably
practicable to the Landlord’s reasonable satisfaction;

 

4.9         User

 

4.9.1      Not to use the Property otherwise than for
the Permitted Use;

 

4.9.2      Not to use the Property for any purpose
which is:

 

(i)           noisy, offensive, dangerous, illegal, immoral or an
actionable nuisance; or

 

(ii)          which in the reasonable opinion of the Landlord causes
damage or disturbance to the Landlord, or to owners or occupiers of any
neighbouring property; or

 

(iii)         which involves any substance which may be harmful,
polluting or contaminating other than in quantities which are normal for and
used in connection with the Permitted Use;

 

4.9.3      Not to use more than 836.1 square metres
(9,000 square feet) of space within the Property and Unit 87/88 Link (in
aggregate) for the purposes of conducting scientific experiments on live
animals (Pharmacology) provided that such use
shall be subject to the Tenant strictly complying with the following
conditions:

 

(i)           it shall before commencing any Pharmacology obtain all
necessary consents and shall in the course of conducting Pharmacology comply
with all relevant statutes or European Union laws, regulations or directives;

 

(ii)          it shall not publicise or promote (whether orally or
in writing) the fact that Pharmacology is conducted at the Property;

 

(iii)         subject to the Landlord’s prior written approval (such
approval not to be unreasonably withheld or delayed) it shall make suitable
provision in relation to the protection of 
the animals, personnel and the Property;

 

(iv)         it shall  limit
the Pharmacology conducted in the Property to that which is related to medical
research;

 

(v)          it shall only use mice and rats in Pharmacology;

 

(vi)         it shall cease forthwith upon written notice from the
Landlord to conduct Pharmacology if in the Landlord’s reasonable opinion:-

 

(a)        Pharmacology is having the effect of materially diminishing the rental
or capital value of the Property or any other premises on the Estate;

 

(b)        Pharmacology is materially impeding the letting of any nearby building
on the Estate;

 

(c)        Pharmacology is causing the Landlord to take significant management
action as a result of or in reasonable anticipation of the actions of third
parties due to the carrying on of Pharmacology at the Property;

 

(d)        the carrying out of Pharmacology at the Property is materially and
adversely damaging the reputation of the Landlord or its employees or the
Estate;

 

4.10       Signs

 

Not to erect any sign, notice or advertisement which is
visible outside the Property without the Landlord’s prior written consent
(which is not to be unreasonably withheld in the case of the display of signs
showing the tenant’s name which conform with the Landlord’s regulations (if
any) for the Estate from time to time);

 

4.11       Alterations

 

4.11.1    Not to make any alterations or additions
which:

 

7

 

(i)           affect the structural integrity of the Property
(including without limitation the roofs and foundations and the principal or
load-bearing walls, floors, beams and columns);

 

(ii)          merge the Property with any adjoining premises;

 

(iii)         affect the external appearance of the Property;

 

4.11.2    Not to make any other alterations or
additions to the Property without the Landlord’s written consent (which is not
to be unreasonably withheld or delayed);

 

4.12       Preservation of Easements

 

4.12.1    Not to prejudice the acquisition of any
right of light for the benefit of the Property and to preserve all rights of
light and other easements enjoyed by the Property;

 

4.12.2    Promptly to give the Landlord notice if any
easement enjoyed by the Property is obstructed, or any new easement affecting
the Property is made or attempted;

 

4.13       Alienation

 

4.13.1    Not
to:

 

(i)           assign, charge, underlet or part with possession of
the whole or part only of the Property nor to agree to do so except by an
assignment or underletting of the whole of the Property or an underletting of a
Subletting Unit permitted by this Clause 4.13;

 

(ii)          share the possession or occupation of the whole or any
part of the Property;

 

4.13.2    Assignment

 

Not to assign or agree to assign the whole of the
Property without the Landlord’s written consent (not to be unreasonably
withheld or delayed), provided that:

 

(i)           the Landlord may withhold consent in circumstances
where in the reasonable opinion of the Landlord

 

(a)        the proposed assignee is not of sufficient financial standing to enable
it to comply with the Tenant’s covenants in this lease; or

 

(b)        such persons as the Landlord reasonably requires do not act as
guarantors for the assignee and do not enter into direct covenants with the
Landlord including the provisions set out in the Third Schedule (but referring
in paragraph 1.2 to the assignee);

 

(ii)          the Landlord’s consent shall in every case be subject
to conditions (unless expressly excluded) requiring that:

 

(a)        the assignee covenants with the Landlord to pay the rents and observe
and perform the Tenant’s covenants in this lease during the residue of the
Term, or until released pursuant to the 1995 Act;

 

(b)        the Tenant enters into an authorised guarantee agreement guaranteeing
the performance of the Tenant’s covenants in this lease by the assignee
including the provisions set out in the Third Schedule (but omitting paragraph
1.2);

 

(c)        all rent and other payments due under this lease (in the case of sums
other than the Principal Rent: which have been previously demanded) are paid
before completion of the assignment;

 

4.13.3    Underletting

 

Not to underlet or agree to underlet the whole of the
Property or a Subletting Unit nor vary the terms of any underlease without the
Landlord’s written consent (not to be unreasonably withheld or delayed).  Any permitted underletting must comply with
the following:

 

8

 

(i)           the rent payable under the underlease must be:

 

(a)        not less than the rent reasonably obtainable in the open market for the
Property or the  Subletting Unit without
fine or premium;

 

(b)        payable no more than one quarter in advance;

 

(c)        subject to upward only reviews at intervals no less frequent than the
rent reviews under this lease;

 

(ii)          the undertenant covenants with the Landlord and in the
underlease:

 

(a)        to observe and perform the Tenant’s covenants in this lease (except for
payment of the rents) during the term of the underlease or until released
pursuant to the 1995 Act;

 

(b)        not to underlet, share or part with possession or occupation of the
whole or any part of the underlet premises, nor to assign or charge part only
of the underlet premises;

 

(c)        not to assign the whole of the underlet premises without the Landlord’s
prior written consent (which shall not be unreasonably withheld or delayed);

 

(iii)         all rents and other payments due under this lease (not
the subject of a bona fide dispute) are paid before completion of the
underletting;

 

(iv)         Save in the case of any underletting for a term in
excess of five years and which is of any of Unit 86A, Unit 86B, Unit 87B or
Unit 87C sections 24 to 28 of the 1954 Act must be excluded and before
completion of the underletting a certified copy of each of the following
documents must be supplied to the Landlord:

 

(a)        the notice served on the proposed undertenant pursuant to section
38A(3)(a) of the 1954 Act; and

 

(b)        the declaration actually made by the proposed undertenant in compliance
with the requirements of Schedule 2 of the 2003 Order; and

 

(c)        the proposed form of underlease containing an agreement to exclude the
provisions of sections 24 to 28 of the 1954 Act and a reference to both the
notice pursuant to section 38A(3)(a) of the 1954 Act and the declaration
pursuant to the requirements of Schedule 2 of the 2003 Order as referred to in
this clause 4.13.3

 

and before completion of the underletting
the Tenant must warrant to the Landlord that both the notice pursuant to
section 38A(3)(a) of the 1954 Act has been served on the relevant persons
as required by the 1954 Act and the appropriate declaration pursuant to the
requirements of Schedule 2 of the 2003 Order as referred to in this sub-clause
4.13.3 has been made prior to the date on which the Tenant and the proposed
undertenant became contractually bound to enter into the tenancy to which the
said notice applies;

 

(v)          in relation to any Subletting Unit the underlease
grants such rights as are appropriate for the separate occupation and use of
the Property, reserves such rights as are appropriate for the separate
occupation and use of the remainder of the property let by this lease and to
enable the Tenant to comply with its obligations under this lease, and reserves
as rent:-

 

(a)        a fair proportion of the cost of insuring the Property and the whole cost
of insuring the loss of the principal rent and service charge payable under the
underlease; and

 

(b)        a service charge which provides for the undertenant to pay a fair and
reasonable proportion of expenditure incurred by the Tenant in relation to the
maintenance, repair, renewal, decoration and cleaning of the Property
(including without limitation the Conduits, plant and equipment therein) and
the provision of services to the Property;

 

9

 

(vi)                           there shall be no more than
six (6) units of occupation at any time (and for this purpose a unit of
occupation shall comprise (a) each Subletting Unit which is separately
underlet and (b) the residue of the net lettable area of the Property (if
any) retained by the Tenant);

 

(vii)      (in
the case of an underletting of the whole of the Property) the underlease
reserves as rent the Service Charge payable under this lease;

 

(viii)     (in
the case of an underletting of a Subletting Unit) the underlease reserves as
rent a fair and reasonable proportion of the Service Charge payable under this
lease;

 

4.13.4            To take all necessary steps
and proceedings to remedy any breach of the covenants of the undertenant under
the underlease and not to permit any reduction of the rent payable by any
undertenant;

 

4.13.5            Group
Sharing

 

Notwithstanding Clause 4.13.1 the Tenant may share
occupation of the whole or any part of the Property with a Group Company

 

PROVIDED THAT

 

(a)                               the relationship of landlord
and tenant is not created; and

 

(b)                              occupation by any Group
Company shall cease upon it ceasing to be a Group Company; and

 

(c)                               the Tenant informs the
Landlord in writing before each occupier commences occupation and after it
ceases occupation;

 

4.14                     Registration

 

Within 21 days to give to the Landlord’s solicitors (or as
the Landlord may direct) written notice of any assignment, charge, underlease
or other devolution of the Property or a Subletting Unit together with a
certified copy of the relevant document and a reasonable registration fee of
not less than £50;

 

4.15                     Statutory Requirements and
Notices

 

4.15.1            To supply the Landlord with a
copy of any notice, order or certificate or proposal for any notice order or
certificate affecting or capable of affecting the Property as soon as it is
received by or comes to the notice of the Tenant;

 

4.15.2            To comply promptly with all
notices served by any public, local or statutory authority, and with the
requirements of any present or future statute or European Union law, regulation
or directive (whether imposed on the owner or occupier), which affects the
Property or its use;

 

4.15.3            At the request of the
Landlord, but at the cost of the Landlord, to make or
join the Landlord in making such objections or representations against or in
respect of any such notice, order or certificate as the Landlord may reasonably
require;

 

4.16                     Planning

 

4.16.1            Not to apply for or implement
any planning permission affecting the Property without first obtaining the
Landlord’s written consent (not to be unreasonably withheld in cases where the
subject matter of the planning permission has been approved by the Landlord
pursuant to the other provisions of this lease);

 

4.16.2            If a planning permission is
implemented the Tenant shall complete all the works permitted and comply with
all the conditions imposed by the permission before the determination of the
Term (including any works stipulated to be carried out by a date after the
determination of the Term unless the Landlord requires otherwise);

 

10

 

4.17                     Contaminants and Defects

 

4.17.1            To give the Landlord prompt
written notice upon becoming aware of the existence of any defect in the
Property, or of the existence of any contaminant, pollutant or harmful
substance on the Property but not used in the ordinary course of the Tenant’s
use of the Property;

 

4.17.2            If so requested by the
Landlord, to remove from the Property or remedy to the Landlord’s reasonable
satisfaction any such contaminant, pollutant or harmful substance introduced on
the Property by or at the request of the Tenant;

 

4.18                     Entry by Landlord

 

To permit the Landlord at all reasonable times and on
reasonable notice (except in emergency) to enter the Property in order to:

 

4.18.1            inspect and record the
condition of the Property or the Centre or the Adjoining Property;

 

4.18.2            remedy any breach of the
Tenant’s obligations under this lease;

 

4.18.3            repair, maintain, clean,
alter, replace, install, add to or connect up to any Conduits which serve the
Centre or the Adjoining Property;

 

4.18.4            repair, maintain, alter or
rebuild the Centre or the Adjoining Property;

 

4.18.5            comply with any of its
obligations under this lease

 

Provided that the Landlord shall cause as little
inconvenience as reasonably practicable in the exercise of such rights and
shall promptly make good all physical damage to the Property caused by such
entry;

 

4.19                     Landlord’s Costs

 

To pay to the Landlord on demand amounts equal to such Costs
as it may properly and reasonably incur:

 

4.19.1            in connection with any
application for consent made necessary by this lease (including where consent
is lawfully refused or the application is withdrawn);

 

4.19.2            incidental to or in reasonable
contemplation of the preparation and service of a schedule of dilapidations
(whether before or within three (3) months after the end of the Term) or a
notice or proceedings under Section 146 or Section 147 of the Law of
Property Act 1925 (even if forfeiture is avoided other than by relief granted
by the Court);

 

4.19.3            in connection with the
enforcement or remedying of any breach of the covenants in this lease on the
part of the Tenant and any Guarantor;

 

4.19.4            incidental to or in reasonable
contemplation of the preparation and service of any notice under Section 17
of the 1995 Act;

 

11

 

4.20                     Yielding up

 

Immediately before the end of the Term:

 

(i)                                  to give up the Property
repaired and decorated and otherwise in accordance with the Tenant’s covenants
in this lease;

 

(ii)                               if the Landlord so requires,
to remove all alterations made during the Term or any preceding period of
occupation by the Tenant and reinstate the Property in accordance with the
Building Specification and as the Landlord shall reasonably direct and to its
reasonable satisfaction;

 

(iii)                            in the event that the Tenant
is or has been engaged in carrying out any Pharmacology to comply with any
relevant statute or European Union law, regulation or directive regarding all
decommissioning of laboratories;

 

(iv)                           to remove all signs, tenant’s
fixtures and fittings and other goods from the Property, and make good any
damage caused thereby to the Landlord’s reasonable satisfaction;

 

(v)                              to replace any damaged or
missing Landlord’s fixtures with ones of no less quality and value;

 

(vi)                           to give to the Landlord all
operating and maintenance manuals together with any health and safety files
relating to the Property;

 

(vii)                        to provide evidence of
satisfactory maintenance of plant and machinery including (without limitation)
copies of all service records;

 

(viii)                     to return any security cards or passes
provided by the Landlord for use by the Tenant and its visitors;

 

4.21                     Encumbrances

 

To perform and observe the Encumbrances so far as they
relate to the Property;

 

4.22                     Roads Etc

 

Not to obstruct the roads, pavements, footpaths and
forecourt areas from time to time on the Estate in any way whatsoever and not
to use any part of the forecourts and car parking spaces or other open parts of
the Property for the purpose of storage or deposit of any materials, goods,
container ships’ pallets, refuse, waste scrap or any other material or matter;

 

4.23                     Parking Restrictions

 

Except as to any right specifically granted in this lease
not to permit any vehicles belonging to or calling upon the Tenant to stand on
the roads, car parking spaces, forecourts, pavements or footpaths on the
Estate;

 

4.24                     Regulations and Common Parts

 

4.24.1            At all times during the Term
to observe and perform such regulations (if any) in respect of the Centre or
the Estate as the Landlord may reasonably think expedient to the proper
management of the Centre or the Estate and which are notified in writing to the
Tenant;

 

4.24.2            Not to cause any obstruction
to the Common Parts or any part of the Centre;

 

4.25                     Land Registration Provisions

 

4.25.1            Promptly following the grant
of this lease to apply to register this lease at the Land Registry and to
ensure that any requisitions raised by the Land Registry in connection with
that application are dealt with promptly and properly and within one month
after completion of the registration, to send the Landlord official copies of
its title;

 

4.25.2            Immediately after the end of
the Term (and notwithstanding that the Term has ended), to make an application
to close the registered title of this lease and shall ensure that any
requisitions raised by the Land Registry in connection with that application
are dealt with 

 

12

 

promptly and properly and to shall keep the
Landlord informed of the progress and completion of its application.

 

5                                      Landlord’s Covenants

 

5.1                            Quiet Enjoyment

 

The Landlord covenants with the Tenant that the Tenant may
peaceably enjoy the Property during the Term without any interruption by the
Landlord or any person lawfully claiming under or in trust for it;

 

5.2                            Provision of Services

 

The Landlord will use its reasonable endeavours to provide
or procure the provision of the Services PROVIDED THAT the Landlord shall be
entitled to withhold or vary the provision or procurement of such of the
Services as the Landlord reasonably considers necessary or appropriate in the
interests of good estate management and PROVIDED FURTHER THAT the Landlord will
not be in breach of this Clause as a result of any failure or interruption of
any of the Services:

 

5.2.1                   resulting from circumstances
beyond the Landlord’s reasonable control, so long as the Landlord uses its
reasonable endeavours to remedy the same as soon as reasonably practicable
after becoming aware of such circumstances; or

 

5.2.2                   to the extent that the
Services (or any of them) cannot reasonably be provided as a result of works of
inspection, maintenance and repair or other works being carried out at the
Centre or the Estate.

 

6                                      Insurance

 

6.1                            Landlord’s insurance covenants

 

The Landlord covenants with the Tenant as follows:

 

6.1.1                   To insure the Property (other
than tenant’s and trade fixtures and fittings) unless the insurance is
invalidated in whole or in part by any act or default of the Tenant:

 

(i)                                  with an insurance office or
underwriters of repute;

 

(ii)                               against loss or damage by the
Insured Risks;

 

(iii)                            subject to such excesses as
may be imposed by the insurers;

 

(iv)                           in the full cost of
reinstatement of the Property (in modern form if appropriate) including shoring
up, demolition and site clearance, professional fees, VAT and allowance for
building cost increases;

 

6.1.2                   To insure against loss of the
Principal Rent thereon payable or reasonably estimated by the Landlord to be
payable under this lease arising from damage to the Property by the Insured
Risks for three years or such longer period as the Landlord may reasonably
require having regard to the likely period for reinstating the Property;

 

6.1.3                   To use its reasonable
endeavours to procure that the insurer waives its rights of subrogation against
the Tenant (so long as such provision is available in the London insurance
market);

 

6.1.4                   At the request and cost of the
Tenant (but not more frequently than once in any twelve month period) to
produce summary details of the terms of the insurance under this Clause 6.1;

 

6.1.5                   If the Property is destroyed
or damaged by an Insured Risk, then, unless payment of the insurance moneys is
refused in whole or part because of the act or default of the Tenant, and
subject to obtaining all necessary planning and other consents (which the
Landlord will use reasonable endeavours to obtain) to use the insurance
proceeds (except those relating to loss of rent and fees) and any uninsured
excess paid by the Tenant under Clause 6.2.4(ii) in reinstating the same
(other than tenant’s and trade fixtures and fittings) as quickly as reasonably
practicable substantially as it was before the destruction or 

 

13

 

damage in modern form if appropriate but
not necessarily identical in layout and making up any shortfall in the
insurance proceeds out of its own funds;

 

6.2                            Tenant’s insurance covenants

 

The Tenant covenants with the Landlord from and including
the Insurance Commencement Date and then throughout the Term or until released
pursuant to the 1995 Act as follows:

 

6.2.1                   To pay to the Landlord within
14 days of demand sums equal to:

 

(i)                                  the amount which the Landlord
spends on insurance pursuant to Clause 6.1;

 

(ii)                               the cost of property owners’
liability and third party liability insurance in connection with the Property;

 

(iii)                            the cost of any professional
valuation of the Property properly required by the Landlord (but not more than
once in any two year period);

 

6.2.2                   To give the Landlord immediate
written notice on becoming aware of any event or circumstance which might
affect or lead to an insurance claim;

 

6.2.3                   Not to do anything at the
Property which would or might prejudice or invalidate the insurance of the
Property or the Adjoining Property or cause any premium for their insurance to
be increased;

 

6.2.4                   To pay to the Landlord within
14 days of demand:

 

(i)                                  any increased premium and any
Costs incurred by the Landlord as a result of a breach of Clause 6.2.3;

 

(ii)                               any uninsured excess to which
the insurance policy may be subject;

 

(iii)                            the whole of the irrecoverable
proportion of the insurance moneys if the Property or any part are destroyed or
damaged by an Insured Risk but the insurance moneys are irrecoverable in whole
or part due to the act or default of the Tenant;

 

6.2.5                   To comply with the
requirements and reasonable recommendations of the insurers;

 

6.2.6                   To notify the Landlord of the
full reinstatement cost of any fixtures and fittings installed at the Property
at the cost of the Tenant which become Landlord’s fixtures and fittings;

 

6.2.7                   Not to effect any insurance of
the Property against an Insured Risk but if the Tenant effects or has the
benefit of any such insurance the Tenant shall hold any insurance moneys upon
trust for the Landlord and pay the same to the Landlord as soon as practicable;

 

6.3                            Suspension of Rent

 

If the Property is unfit for occupation and use because of
damage by an Insured Risk then (save to the extent that payment of the loss of
rent insurance moneys is refused due to the act or default of the Tenant) the
Principal Rent and the Service Charge (or a fair proportion according to the
nature and extent of the damage) shall be suspended until the date on which the
Property is again fit for occupation and use.

 

6.4                            Determination Right

 

6.4.1                   If the Property is destroyed
or damaged by an Insured Risk such that the Property is unfit for occupation
and use and shall not be rendered fit for occupation and use within two years
and nine months of the date of such damage then either the Landlord or the
Tenant may whilst the Property has not been rendered fit for occupation and use
terminate the Contractual Term by giving to the other not less than three
calendar months’ previous notice in writing PROVIDED THAT if the Property has
been rendered fit for occupation and use within three years of the date of such
damage then such notice shall be deemed not to have been given.

 

6.4.2                   Termination of this lease
pursuant to the provisions of Clause 6.4.1 shall be without prejudice to the
liability of either party for any antecedent breach of the covenants and 

 

14

 

conditions herein contained (save for
Clause 6.1.5 which shall be deemed not to have applied).

 

7                                      Provisos

 

7.1                            Forfeiture

 

If any of the following events occur:

 

7.1.1                   the Tenant fails to pay any of
the rents payable under this lease within 21 days of the due date (whether or
not formally demanded); or

 

7.1.2                   the Tenant or Guarantor
breaches any of its obligations in this lease; or

 

7.1.3                   the Tenant or Guarantor being
a company incorporated within the United Kingdom

 

(i)                                  has an Administration Order
made in respect of it; or

 

(ii)                               passes a resolution, or the
Court makes an Order, for the winding up of the Tenant or the Guarantor,
otherwise than a member’s voluntary winding up of a solvent company for the
purpose of amalgamation or reconstruction previously consented to by the
Landlord (consent not to be unreasonably withheld); or

 

(iii)                            has a receiver or
administrative receiver or receiver and manager appointed over the whole or any
part of its assets or undertaking; or

 

(iv)                           is struck off the Register of
Companies; or

 

(v)                              is deemed unable to pay its
debts within the meaning of Section 123 of the Insolvency Act 1986; or

 

7.1.4                   proceedings or events
analogous to those described in Clause 7.1.3 shall be instituted or shall occur
where the Tenant or Guarantor is a company incorporated outside the United
Kingdom; or

 

7.1.5                   the Tenant or Guarantor being
an individual:

 

(i)                                  has a bankruptcy order made
against him; or

 

(ii)                               appears to be unable to pay
his debts within the meaning of Section 268 of the Insolvency Act 1986

 

then the Landlord may re-enter the Property or any part of
the Property in the name of the whole and forfeit this lease and the Term shall
immediately end, but without prejudice to the rights of either party against
the other in respect of any breach of the obligations contained in this lease;

 

7.2                            Notices

 

7.2.1                   All notices under or in
connection with this lease shall be given in writing

 

7.2.2                   Any such notice shall be duly
and validly served if it is served (in the case of a company) to its registered
office or (in the case of an individual) to his last known address;

 

7.2.3                   Any such notice shall be
deemed to be given when it is:

 

(i)                                  personally delivered to the
locations listed in Clause 7.2.2; or

 

(ii)                               sent by registered post, in
which case service shall be deemed to occur on the third Working Day after
posting.

 

7.3                            No Implied Easements

 

The grant of this lease does not confer any rights over the
Centre or the Adjoining Property or any other property except those mentioned
in Part I of the First Schedule, and Section 62 of the Law of
Property Act 1925 is excluded from this lease;

 

8                                      Guarantee

 

The Guarantor covenants with the Landlord in the terms set
out in the Third Schedule.

 

15

 

9                                      Break Clause

 

9.1                            The Tenant
may terminate the Contractual Term either on Break Date: 1 or on Break Date: 2
by giving to the Landlord not less than twelve (12) calendar months’ previous
notice in writing;

 

9.2                            Any notice
given by the Tenant shall operate to terminate the Contractual Term only if:

 

9.2.1                   The Principal Rent reserved by
this lease has been paid by the time of such termination; and

 

9.2.2                   All other rents reserved by
this lease which have been demanded at least 14 days before Break Date: 1 or
Break Date: 2 as the case may require have been paid by the time of such
termination; and

 

9.2.3                   (in the case of notice being
given by the Tenant to terminate the lease on Break Date: 1) a sum equal to six
(6) months’ worth of the Principal Rent for the time being payable
together with a sum equal to VAT thereon at the standard rate for the time
being payable has been paid to the Landlord in cleared funds by Break Date: 1;
and

 

9.2.4                   the Tenant gives the Landlord
full vacant possession of the Property on termination;

 

9.3                            Upon
termination the Contractual Term shall cease but without prejudice to any claim
in respect of any prior breach of the obligations contained in this lease;

 

9.4                            If the
Tenant does not terminate the Contractual Term on Break Date: 1, the Principal
Rent shall be suspended from the date falling immediately after Break Date: 1
for a period of six (6) months, after which period the Tenant’s obligation
to pay the Principal Rent shall resume.

 

10                               Contracts (Rights of Third
Parties) Act 1999

 

A person who is not a party to this lease has no right under
the Contracts (Rights of Third Parties) Act 1999 to enforce any terms of this lease.

 

11                                Jurisdiction

 

This lease shall be governed by and construed in all
respects in accordance with the law of England and the Guarantor submits to the
non-exclusive jurisdiction of the English Courts.

 

Executed by the parties as a Deed on the date specified in the Prescribed Clauses.

 

16

 

The First
Schedule

 

Part I - Easements and Other Rights granted

 

There are granted to the Tenant (in common with others
authorised by the Landlord)

 

1                                      The right to use the relevant
Estate Common Areas and the Common Parts for access to and from the Property;

 

2                                      Free and uninterrupted use of
all existing and future Conduits which are in the Centre and which serve the
Property, subject to the Landlord’s rights to re-route the same subject to
there being no unreasonable interruption of services;

 

3                                      The right to enter the Centre
to perform Clause 4.4 [repair] on reasonable prior written notice to the
Landlord, subject to causing as little inconvenience as practicable and complying
with conditions reasonably imposed by the Landlord and making good all physical
damage caused;

 

4                                      The right to use 204 parking
spaces at the Centre in such locations as the Landlord from time to time
allocates.

 

Part II - Exceptions and Reservations

 

There are excepted and reserved to the Landlord:

 

1                                      The right to carry out any
building, rebuilding, alteration or other works to the Centre the Estate and
the Adjoining Property (including the erection of scaffolding) notwithstanding
any temporary interference with light and air enjoyed by the Property;

 

2                                      Free and uninterrupted use of
all existing and future Conduits which are in the Property and serve the Centre
the Estate or the Adjoining Property;

 

3                                      Rights of entry on the
Property as referred to in Clause 4.18;

 

4                                      The right to regulate and
control in a reasonable manner the use of the Common Parts and Estate Common
Areas;

 

5                                      The right to alter the layout
of the roads forecourts footpaths pavements and car parking areas from time to
time on the Estate in such manner as the Landlord may reasonably require
PROVIDED THAT such alterations do not materially diminish the Tenant’s rights
under this lease;

 

6                                      The right in the last six
months of the Term to view the Property with prospective tenants upon giving reasonable
notice and the right throughout the Term to view the Property with prospective
purchasers upon giving reasonable notice.

 

Part III - Encumbrances

 

The covenants declarations and other matters affecting the
Property contained or referred to in the Landlord’s freehold reversionary title
number BK102078 as at the date of this lease

 

17

 

The Second
Schedule

 

Rent Review

 

1                                      In this Schedule:

 

1.1                            Review
Date
means each of the Review Dates and Relevant Review Date
shall be interpreted accordingly;

 

1.2                            Rack
Rental Value means the annual rent (exclusive of VAT) at which the Property might
reasonably be expected to be let in the open market at the Relevant Review Date

 

ASSUMING

 

1.2.1                   the letting is on the same
terms as those contained in this lease but subject to the following
qualifications:

 

(i)                                  the Property is as described
in the Building Specification;

 

(ii)                               the term shall commence on the
Relevant Review Date and be for the unexpired residue of the Contractual Term
subject to a right for the Tenant to break the lease at the end of each period
of five (5) years calculated from and including the commencement date of
the hypothetical term;

 

(iii)                            the amount of the Principal
Rent shall be disregarded, but it shall be assumed that the Principal Rent is
subject to review on the terms of and at the same intervals as the Principal
Rent under this lease;

 

1.2.2                   the Property is available to
let as a whole, with vacant possession, by a willing landlord to a willing tenant,
without premium;

 

1.2.3                   the Property is ready, fit and
available for immediate occupation and use for the Permitted Use;

 

1.2.4                   all the obligations on the
part of the Tenant contained in this lease have been fully performed and
observed;

 

1.2.5                   no work has been carried out
to the Property which has reduced the rental value of the Property;

 

1.2.6                   if the whole or any part of
the Property has been destroyed or damaged it has been fully reinstated;

 

BUT DISREGARDING

 

1.2.7                   any goodwill attached to the Property
by reason of any business carried on there;

 

1.2.8                   any effect on rent of the fact
that any Tenant and any undertenant is or has been in occupation of the
Property;

 

1.2.9                   any effect on rent of any
improvements at the Property made with the Landlord’s consent by the Tenant or
any undertenant, except improvements carried out pursuant to an obligation to
the Landlord or at the expense of the Landlord

 

PROVIDED THAT the Rack Rental Value shall be that which
would be payable after the expiry of any rent free period or concessionary rent
period for fitting out (or the receipt of any contribution to fitting out works
or other inducement in lieu thereof) which might be given on a letting of the
Property, so that no discount reduction or allowance is made to reflect (or
compensate the tenant for the absence of) any such rent free or concessionary
rent period or contribution or other inducement for fitting out;

 

1.3                            Revised
Rent
means the new Principal Rent following each Rent Review Date pursuant to
paragraph 2 of this Schedule.

 

1.4                            Expert means a surveyor (who shall
be a Fellow of the Royal Institution of Chartered Surveyors with at least ten (10) years
experience in the letting and valuation of premises of a similar nature to and
situate in the same region as the Property) agreed between the Landlord and the
Tenant,

 

18

 

or in the
absence of agreement nominated on the application of either party by the
President for the time being of the Royal Institution of Chartered Surveyors.

 

2                                      The Principal Rent shall be
reviewed on each Review Date to the higher of:

 

2.1                            the Principal Rent payable
immediately before the Relevant Review Date (disregarding any suspension or
abatement of the Principal Rent); and

 

2.2                            the Rack Rental Value on the
Relevant Review Date agreed or determined in accordance with this lease.

 

3                                      The Rack Rental Value at each
Review Date shall be:

 

3.1                            agreed in writing between the
Landlord and the Tenant;

 

3.2                            determined by an Expert
(acting as an expert) on the application of either Landlord or Tenant at any
time after the Relevant Review Date;

 

4                                      In the case of determination
by an Expert:

 

4.1                            the Expert will be instructed
to afford the Landlord and the Tenant the opportunity to make written
representations to him and comment upon written representations received by
him;

 

4.2                            if an Expert dies, refuses to
act or becomes incapable of acting, or if he fails to notify the parties of his
determination within 2 months after receiving the last submission delivered to
him, either the Landlord or the Tenant may apply to the President to discharge
him and appoint another in his place;

 

4.3                            the fees and expenses of the
Expert and any VAT thereon shall be paid by the Landlord and the Tenant in such
shares as the Expert shall decide (or in equal shares if the Expert does not
decide this point); if one party pays all the Expert’s fees and expenses, the
paying party may recover the other’s share from the other party, in the case of
the Landlord as arrears of rent.

 

5                                      If a Revised Rent is not
agreed or determined by the Relevant Review Date:

 

5.1                            the Principal Rent payable
immediately before the Relevant Review Date shall continue to be payable until
the Revised Rent is ascertained;

 

5.2                            when the Revised Rent is
ascertained:

 

5.2.1                   the Tenant shall pay within 14
days of ascertainment:

 

(i)                                  any difference between the
Principal Rent payable immediately before the Relevant Review Date and the
Principal Rent which would have been payable had the Revised Rent been
ascertained on the Relevant Review Date (the Balancing
Payment); and

 

(ii)                               interest on the Balancing
Payment at Base Rate from the date or dates when the Balancing Payment or the
relevant part or parts would have been payable had the Revised Rent been
ascertained on the Relevant Review Date;

 

5.2.2                   the Landlord and Tenant shall
sign and exchange a memorandum recording the agreed amount of the Revised Rent.

 

6                                      Time shall not be of the
essence for the purposes of this Schedule.

 

19

 

The Third
Schedule

 

Guarantee

 

1                                      The Guarantor covenants with
the Landlord as principal debtor:

 

1.1                            that throughout the Term or
until the Tenant is released from its covenants pursuant to the 1995 Act:

 

1.1.1                   The Tenant will pay the rents
reserved by and perform its obligations contained in this lease;

 

1.1.2                   The Guarantor will indemnify
the Landlord on demand against all Costs arising from any default of the Tenant
in paying the rents and performing its obligations under this lease;

 

1.2                            the Tenant (here meaning the
Tenant so named in the Prescribed Clauses) will perform its obligations under
any authorised guarantee agreement that it gives with respect to the
performance of any of the covenants and conditions in this lease.

 

2                                      The liability of the Guarantor
shall not be affected by:

 

2.1                            Any time given to the Tenant
or any failure by the Landlord to enforce compliance with the Tenant’s
covenants and obligations;

 

2.2                            The Landlord’s refusal to
accept rent at a time when it would or might have been entitled to re-enter the
Property;

 

2.3                            Any variation of the terms of
this lease;

 

2.4                            Any change in the constitution,
structure or powers of the Guarantor the Tenant or the Landlord or the
administration, liquidation or bankruptcy of the Tenant or Guarantor;

 

2.5                            Any act which is beyond the
powers of the Tenant;

 

2.6                            The surrender of part of the
Property;

 

3                                      Where two or more persons have
guaranteed obligations of the Tenant the release of one or more of them shall
not release the others.

 

4                                      The Guarantor shall not be
entitled to participate in any security held by the Landlord in respect of the
Tenant’s obligations or stand in the Landlord’s place in respect of such
security.

 

5                                      If this lease is disclaimed,
and if the Landlord within 3 months of the disclaimer requires in writing the
Guarantor will enter into a new lease of the Property at the cost of the Guarantor
on the terms of this lease (but as if this lease had continued and so that any
outstanding matters relating to rent review or otherwise shall be determined as
between the Landlord and the Guarantor) for the residue of the Contractual Term
from and with effect from the date of the disclaimer.

 

6                                      If this lease is forfeited and
if the Landlord within 3 months of the forfeiture requires in writing the
Guarantor will (at the option of the Landlord):

 

6.1                            enter into a new lease as in
paragraph 5 above with effect from the date of the forfeiture; or

 

6.2                            pay to the Landlord on demand
an amount equal to the moneys which would otherwise have been payable under
this lease until the earlier of 3 months after the forfeiture and the date on
which the Property is fully relet.

 

20

 

The Fourth
Schedule

Service Charge

Part I - Calculation and payment of the Service Charge

 

1                                      In this
Schedule unless the context otherwise requires:

 

1.1                            Accounting Date means 31 December in
each year or such other date as the Landlord notifies in writing to the Tenant
from time to time;

 

1.2                            Accounting Year means the
period from but excluding one Accounting Date to and including the next
Accounting Date;

 

1.3                            Estimated Service Charge means the Landlord’s
Surveyor’s reasonable and proper estimate of the Service Charge for the
Accounting Year notified in writing to the Tenant from time to time;

 

1.4                            Service Cost means the
reasonable and proper costs and expenses paid or incurred by the Landlord in
relation to the provision of the Centre Services and the Estate Services
(including irrecoverable VAT);

 

1.5                            Tenant’s Share means a
fair and reasonable proportion of the Service Cost.

 

2                                      The Service
Charge shall be the Tenant’s Share of the Service Cost in respect of each
Accounting Year, and if only part of an Accounting Year falls within the Term
the Service Charge shall be the Tenant’s Share of the Service Cost in respect
of the relevant Accounting Period divided by 365 and multiplied by the number
of days of the Accounting Year within the Term.

 

3                                      The
Landlord shall have the right to adjust the Tenant’s Share from time to time to
make reasonable allowances for differences in the services provided to or
enjoyable by the other occupiers of the Centre or the Estate.

 

4                                      The Tenant
shall pay the Estimated Service Charge for each Accounting Year to the Landlord
in advance by equal instalments on the Quarter Days, (the first payment for the
period from and including the Service Charge Commencement Date to (but excluding)
the next Quarter Day after the Service Charge Commencement Date to be made on
the Service Charge Commencement Date); and

 

4.1                            If the
Landlord’s Surveyor does not notify an estimate of the Service Charge for any
Accounting Year the Estimated Service Charge for the preceding Accounting Year
shall apply; and

 

4.2                            Any
adjustment to the Estimated Service Charge after the start of an Accounting
Year shall adjust the payments on the following Quarter Days equally.

 

5                                      As soon as
practicable after the end of each Accounting Year the Landlord shall serve on
the Tenant a summary of the Service Cost and a statement of the Service Charge
certified by the Landlord’s Surveyor which shall be conclusive (save in the
case of manifest error).

 

6                                      The
difference between the Service Charge and the Estimated Service Charge for any
Accounting Year (or part) shall be paid by the Tenant to the Landlord within
fourteen days of the date of the statement for the Accounting Year, or allowed
against the next Estimated Service Charge payment, or after the expiry of the
Term refunded to the Tenant.

 

7                                      The Tenant
shall be entitled by appointment within a reasonable time following service of
the Service Charge statement to inspect the accounts maintained by the Landlord
and the Landlord’s Surveyor relating to the Service Cost and supporting
vouchers and receipts at such location as the Landlord reasonably directs.

 

21

 

Part II - Estate Services

 

In relation to the Estate the provision of the following
services or the Costs incurred in relation to:

 

1                                      The Common
Areas

 

Repairing, maintaining and (where appropriate) cleaning,
lighting and (as necessary) altering renewing, rebuilding and reinstating the
Estate Common Areas.

 

2                                      Conduits

 

The repair, maintenance and cleaning and (as necessary)
replacement and renewal of all Conduits within the Estate Common Areas.

 

3                                      Plant and
machinery

 

Hiring, operating, inspecting, servicing, overhauling,
repairing, maintaining, cleaning, lighting and (as necessary) renewing or
replacing any plant, machinery, apparatus and equipment from time to time
within the Estate Common Areas or used for the provision of services to the
Estate and the supply of all fuel and electricity for the same and any
necessary maintenance contracts and insurance in respect thereof.

 

4                                      Signs

 

Maintaining and (where appropriate) cleaning and lighting
and (as necessary) renewing and replacing the signboards, all directional
signs, fire regulation notices, advertisements, bollards, roundabouts and
similar apparatus or works.

 

5                                      Landscaping

 

Maintaining, tending and cultivating and (as necessary)
re-stocking any garden or grassed areas including replacing plants, shrubs and
trees as necessary.

 

6                                      Common
facilities

 

Repairing maintaining and (as necessary) rebuilding as the
case may be any party walls or fences, party structures, Conduits or other
amenities and easements which may belong to or be capable of being used or
enjoyed by the Estate in common with any land or buildings adjoining or
neighbouring the Estate.

 

7                                      Security

 

Installation, operation, maintenance,
repair, replacement and renewal of closed circuit television systems and other
security systems.

 

8                                      Outgoings

 

Any existing and future rates, taxes, charges, assessments
and outgoings in respect of the Estate Common Areas or any part of them except
tax (other than VAT) payable in respect of any dealing with or any receipt of
income in respect of the Estate Common Areas.

 

9                                      Transport

 

The provision of a bus service to and from Didcot or such
other transport and/or location (if any) deemed necessary by the Landlord.

 

10                               Statutory
requirements

 

The cost of carrying out any further works (after the
initial construction in accordance with statutory requirements) to the Estate
Common Areas required to comply with any statute.

 

11                                Management
and Staff

 

11.1                      The proper and reasonable
fees, costs, charges, expenses and disbursements (including irrecoverable VAT)
of any person properly employed or retained by the Landlord for or in
connection with surveying or accounting functions or the performance of the
Estate Services and

 

22

 

any other
duties in and about the Estate relating to the general management,
administration, security, maintenance, protection and cleanliness of the
Estate:

 

11.2                      Management costs fees and
disbursements in respect of the Estate of 10% of the Service Cost (excluding
costs under this paragraph 11.2).

 

11.3                      Providing staff in connection
with the Estate Services and the general management, operation and security of
the Estate and all other incidental expenditure including but not limited to:

 

11.3.1             salaries, National Health
Insurance, pension and other payments contributions and benefits;

 

11.3.2             uniforms, special clothing,
tools and other materials for the proper performance of the duties of any such
staff;

 

11.3.3             providing premises and
accommodation and other facilities for staff.

 

12                               Enforcement
of Regulations

 

The reasonable and proper costs and expenses incurred by the
Landlord in enforcing the rules and regulations from time to time made
pursuant to Clause 4.24 provided that the Landlord shall use all reasonable
endeavours to recover such costs and expenses from the defaulting party and
provided further that there shall be credited against the Service Cost any such
costs recovered.

 

13                               Insurances

 

13.1                     Effecting such insurances (if
any) as the Landlord may properly think fit in respect of the Estate Common
Areas the plant, machinery, apparatus and equipment used in connection with the
provision of the Estate Services (including without prejudice those referred to
in paragraph 3 above) and any other liability of the Landlord to any person in
respect of those items or in respect of the provision of the Estate Services.

 

13.2                     Professional valuations for
insurance purposes (but not more than once in any two year period);

 

13.3                     Any uninsured excesses to
which the Landlord’s insurance may be subject.

 

14                               Generally

 

Any reasonable and proper costs (not referred to above)
which the Landlord may incur in providing such other services and in carrying
out such other works as the Landlord may reasonably consider to be reasonably
desirable or necessary for the benefit of occupiers of the Estate.

 

15                               Anticipated
Expenditure

 

Establishing and maintaining reserves to meet the future
costs (as from time to time estimated by the Landlord’s Surveyor) of providing
the Estate Services;

 

16                               Borrowing

 

The costs of borrowing any sums required
for the provision of the Estate Services at normal commercial rates available
in the open market or if any such sums are loaned by the Landlord or a Group
Company of the Landlord interest at Base Rate.

 

17                               VAT

 

Irrecoverable VAT on any of the foregoing.

 

23

 

Part III - Centre Services

 

In relation to the
Centre, the provision of the following services or the Costs incurred in
relation to:

 

1                                      Repairs to
the Centre (including Conduits)

 

Repair, renewal, decoration, cleaning and
maintenance of the foundations, roof, exterior and structure, the Conduits,
plant and equipment (which are not the responsibility of any tenants of the
Centre).

 

2                                      Common
Parts

 

(a)                                Repair, renewal, decoration,
cleaning, maintenance and lighting of the Common Parts and other parts of the
Centre;

 

(b)                               Providing and maintaining any
plants in the Common Parts;

 

(c)                                Providing signs, nameboards
and other notices within the Centre including a sign giving the name of the
Tenant or other permitted occupier and its location within the Centre in the
entrance lobby of the Centre.

 

3                                      Services

 

Procuring water and sewerage services.

 

4                                      Fire
Fighting and Security

 

Provision, operation, repair, renewal,
cleaning and maintenance of fire alarms, sprinkler systems, fire prevention and
fire fighting equipment and ancillary apparatus and security alarms, apparatus,
closed circuit television and systems as the Landlord considers appropriate.

 

5                                      Statutory
Requirements

 

All existing and future rates, taxes,
charges, assessments and outgoings payable to any competent authority or for
utilities.

 

6                                      Management
and Staff

 

6.1                            The proper and reasonable
fees, costs, charges, expenses and disbursements (including irrecoverable VAT)
of any person properly employed or retained by the Landlord for or in
connection with surveying or accounting functions or the performance of the
Centre Services and any other duties in and about the Centre relating to the
general management, administration, security, maintenance, protection and
cleanliness of the Centre:

 

6.2                            Management fees and disbursements
incurred in respect of the Centre of 10% of the Service Cost (excluding costs
under this paragraph 6.2).

 

6.3                            Providing staff in connection
with the Centre Services and the general management, operation and security of
the Centre and all other incidental expenditure including but not limited to:

 

(i)                                   salaries, National Health
Insurance, pension and other payments contributions and benefits;

 

(ii)                                uniforms, special clothing,
tools and other materials for the proper performance of the duties of any such
staff;

 

(iii)                             providing premises and
accommodation and other facilities for staff.

 

7                                      General

 

7.1                            Establishing and maintaining
reserves to meet the future costs (as from time to time estimated by the
Landlord’s Surveyor) of providing the Centre Services;

 

7.2                            Any reasonable and proper
costs (not referred to above) which the Landlord may incur in providing such
other services and in carrying out such other works as the Landlord may
reasonably consider to be reasonably desirable or necessary for the benefit of
occupiers of the Centre.

 

24

 

7.3                            The costs of borrowing any
sums required for the provision of the Services at normal commercial rates
available in the open market or if any such sums are loaned by the Landlord or
a Group Company of the Landlord interest at Base Rate.

 

8                                      VAT

 

Irrecoverable VAT on any of the foregoing.

 

25

 

Annexure

 

(Building Specification)

 

26

 

LEASE PARTICULARS

 

(forming part of this
lease only insofar as not inconsistent with the other provisions of this lease)

 

	
   Date of Lease

   	
   :

   	
   2009 

   
	
    

   	
    

   	
    

   
	
   Original Landlord

   	
   :

   	
   MEPC MILTON PARK NO. 1 LIMITED (Company number 5491670)
   and MEPC MILTON PARK NO. 2 LIMITED (Company
   number 5491806) 

   
	
    

   	
    

   	
    

   
	
   Original Tenant

   	
   :

   	
   VERTEX PHARMACEUTICALS (EUROPE) LIMITED (Company number 2907620) 

   
	
    

   	
    

   	
    

   
	
   Original Guarantor

   	
   :

   	
   VERTEX PHARMACEUTICALS INCORPORATED  

   
	
    

   	
    

   	
    

   
	
   Property

   	
   :

   	
   Building 86 and 87 Milton Park 

   
	
    

   	
    

   	
    

   
	
   Floor Area 

   	
    

   	
   3,839.5 square metres (41,329 square feet) net internal

   
	
    

   	
    

   	
    

   
	
   Contractual Term

   	
   :

   	
   15 years from and including 23 April 2009 to and including 22 April 2024

   
	
    

   	
    

   	
    

   
	
   Initial Principal Rent 

   	
   :

   	
   NINE HUNDRED AND THIRTY FOUR THOUSAND POUNDS (£934,000) per annum 

   
	
    

   	
    

   	
    

   
	
   Rent Commencement Date

   	
   :

   	
   23 September 2011 

   
	
    

   	
    

   	
    

   
	
   Review Dates

   	
   :

   	
   23 April 2014 and

    

   23 April 2019 

   
	
    

   	
    

   	
    

   
	
   Review Type

   	
   :

   	
   Market — upwards only

   
	
    

   	
    

   	
    

   
	
   Service Charge Commencement Date

   	
   :

   	
   23 April 2009 

   
	
    

   	
    

   	
    

   
	
   Principal Rent and Service Charge Payment
   Dates

   	
   :

   	
   Quarterly: 25 March, 24 June, 29 September and 25 December

   
	
    

   	
    

   	
    

   
	
   Insurance Commencement Date

   	
   :

   	
   23 April 2009

   
	
    

   	
    

   	
    

   
	
   Permitted Use: (1987 Order)

   	
   :

   	
   B1 

   
	
    

   	
    

   	
    

   
	
   Break Date: 1 

   	
   :

   	
   22 April 2014 

   
	
    

   	
    

   	
    

   
	
   Break Date: 2

   	
   :

   	
   22 April 2019 

   
	
    

   	
    

   	
    

   
	
   Break Type

   	
   :

   	
   Tenant 

   
	
    

   	
    

   	
    

   
	
   Parking Spaces

   	
   :

   	
   204

   
	
    

   	
    

   	
    

   
	
   Security of Tenure: Landlord and Tenant
   Act 1954

   	
   :

   	
   Included

   

 

27

 

	
   

  EXECUTED AS A DEED by MEPC
  MILTON PARK NO. 1 LIMITED acting by a director and the company
  secretary or by two directors 

   

   

  Director

   

   

  Director/Company Secretary

  	
   

  	
  

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  EXECUTED AS A DEED by MEPC
  MILTON PARK NO. 2 LIMITED acting by a director and the company
  secretary or by two directors

   

  	
   

  	
  

  
	
   

  	
   

  	
   

  
	
  Director

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Director/Company Secretary

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  EXECUTED AS A DEED by VERTEX
  PHARMACEUTICALS (EUROPE) LIMITED acting by a director and the company secretary or by two directors

  	
   

  	
  

  
	
  Director

  	
   

  	
   

  
	
  Director/Company Secretary

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  EXECUTED AS A DEED by VERTEX
  PHARMACEUTICALS INCORPORATED acting by:

  	
   

  	
  

  

 

28Exhibit 10.2

 

VERTEX PHARMACEUTICALS INCORPORATED

AMENDED AND RESTATED 2006 STOCK and OPTION PLAN

 

1.                                      DEFINITIONS

 

Unless
otherwise specified or unless the context otherwise requires, the following
terms, as used in this Vertex Pharmaceuticals Incorporated Amended and Restated
2006 Stock and Option Plan, have the following meanings:

 

Administrator means the Board of
Directors and/or a committee of the Board of Directors to which the Board of
Directors has delegated power to act on its behalf in administering this Plan
in whole or in part.

 

Affiliate means a corporation that,
for purposes of Section 424 of the Code, is a parent or subsidiary of the
Company, direct or indirect.

 

Board of Directors means the Board of
Directors of the Company.

 

Code means the United States Internal Revenue
Code of 1986, as amended.

 

Common Stock means shares of the Company’s
common stock, $.01 par value.

 

Company means Vertex Pharmaceuticals Incorporated, a
Massachusetts corporation.

 

Employee means an employee of the
Company or of an Affiliate (including, without limitation, an employee who is
also serving as an officer or director of the Company or of an Affiliate),
designated by the Administrator to be eligible to be granted one or more Stock
Rights under the Plan.

 

Exchange Act means the Securities
Exchange Act of 1934, as amended.

 

Fair Market Value of a Share of Common Stock
on a particular date shall be the mean between the highest and lowest quoted
selling prices on such date (the “valuation date”) on the securities market where
the Common Stock is traded, or if there were no sales on the valuation date, on
the next preceding date within a reasonable period (as determined in the sole
discretion of the Administrator) on which there were sales. If there were no
sales in such a market within a reasonable period, the fair market value shall
be as determined in good faith by the Administrator in its sole discretion. The
Fair Market Value as determined in this paragraph shall be rounded down to the next lower whole cent if the foregoing calculation
results in fractional cents.

 

ISO means an option intended to qualify as an
incentive stock option under Code Section 422.

 

Non-Employee Director means a member of the Board
of Directors who is not an employee of the Company or any Affiliate.

 

Non-Qualified Option means an option that is not
intended to qualify as an ISO.

 

Option means an ISO or Non-Qualified Option granted
under the Plan.

 

Participant means an Employee,
Non-Employee Director, consultant or advisor of the Company or an Affiliate to
whom one or more Stock Rights are granted under the Plan. As used herein, “Participant”
shall include “Participant’s Survivors” and a Participant’s permitted
transferees where the context requires.

 

Participant’s Survivors means a deceased Participant’s
legal representatives and/or any person or persons who
acquires the Participant’s rights to a Stock Right by will or by the
laws of descent and distribution.

 

Plan means this Vertex Pharmaceuticals
Incorporated Amended and Restated 2006 Stock and Option Plan, as amended from
time to time.

 

 

Shares means shares of the Common Stock as to which
Stock Rights have been or may be granted under the Plan or any shares of
capital stock into which the Shares are changed or for which they are exchanged
within the provisions of Section 3 of the Plan. The Shares subject to
Stock Rights granted under the Plan may be authorized and unissued shares or
shares held by the Company in its treasury, or both.

 

Stock Agreement means an agreement between
the Company and a Participant delivered pursuant to the Plan with respect to a
Stock Right, in such form as the Administrator shall approve.

 

Stock-Based Award means a grant by the
Company under the Plan of an equity award or equity-based award that is not an
Option or Stock Grant.

 

Stock Grant means a grant by the
Company of Shares under the Plan.

 

Stock Right means a right to Shares or
the value of Shares of the Company granted pursuant to the Plan as an ISO, a
Non-Qualified Option, a Stock Grant or a Stock-Based Award.

 

2.                                      PURPOSES OF THE PLAN

 

The
Plan is intended to encourage ownership of Shares by Employees, Non-Employee
Directors and certain consultants and advisors to the Company in order to
attract such persons, to induce them to work for the benefit of the Company or
of an Affiliate and to provide additional incentive for them to promote the
success of the Company or of an Affiliate. The Plan provides for the granting
of Stock Rights to Employees, Non-Employee Directors, consultants and advisors
of the Company.

 

3.                                      SHARES SUBJECT TO THE PLAN

 

The
number of Shares subject to this Plan as to which Stock Rights may be granted
from time to time shall be 13,902,380 or the equivalent of such number of
Shares after the Administrator, in its sole discretion, has interpreted the
effect of any stock split, stock dividend, combination, recapitalization or
similar transaction in accordance with Section 17 of this Plan. The number
of Shares subject to this Plan shall be reduced, share for share, by the number
of shares underlying Stock Rights, if any, that are granted under the Company’s
2007 New Hire Stock and Option Plan after March 17, 2008.

 

If
an Option granted hereunder ceases to be outstanding, in whole or in part
(other than by exercise), or if the Company shall reacquire (at no more than
its original issuance price) any Shares issued pursuant to a Stock Grant, or if
any Stock Right expires or is forfeited, cancelled or otherwise terminated or
results in any Shares not being issued, the unissued Shares that were subject
to such Stock Right shall again be available for issuance from time to time
pursuant to this Plan; provided that, the following Shares may not again be
made available for issuance as Awards under the Plan: (i) Shares that are
not issued or delivered as a result of the net settlement of an outstanding
Stock-Based Award or Option and (ii) Shares that the Company acquires from
a Participant for a price that is more than the original issuance price of the
Share, including any Share acquired by the Company to fund employee payroll tax
withholding obligations on a Stock Grant or Shares applied to payment of the
exercise price for an Option.

 

After
May 14, 2008, the number of Shares that may be subject to or delivered
pursuant to any form of Stock Right other than an Option shall not exceed 20%
of the aggregate of (A) the number of Shares available as to which Stock
Rights may be granted under this Plan on May 15, 2008 (taking in account
the Shares added on such date, but which amount does not include those 536,625
Shares as to which the Company granted Options on February 7, 2008,
subject to obtaining subsequent stockholder approval of such Options) and (B) any
Shares that again become available for issuance on or after May 15, 2008
pursuant to the preceding paragraph.

 

4.                                      ADMINISTRATION OF THE PLAN

 

The
Administrator shall administer the Plan. Subject to the provisions of the Plan,
the Administrator is authorized to:

 

a.                                       Interpret the
provisions of the Plan and of any Stock Right or Stock Agreement and to make
all rules and determinations that it deems necessary or advisable for the
administration of the Plan;

 

b.                                      Determine which
Employees, Non-Employee Directors, consultants and advisors of the Company and
its Affiliates shall be granted Stock Rights;

 

 

c.                                       Determine the
number of Shares and exercise price for which a Stock Right shall be granted;

 

d.                                      Specify the
terms and conditions upon which a Stock Right or Stock Rights may be granted;

 

e.                                       In its
discretion, accelerate:

 

(i)                                   the date of
exercise of any installment of any Option; provided that the Administrator
shall not, without the consent of the Option holder accelerate the exercise
date of any installment of any Option granted to any Employee as an ISO (and
not previously converted into a Non-Qualified Option pursuant to Section 20)
if such acceleration would violate the annual vesting limitation contained in Section 422(d) of
the Code, as described in Section 6.2.3; or

 

(ii)                                the date or
dates of vesting of Shares, or lapsing of Company repurchase rights with respect
to any Shares, under any Stock Rights; and

 

f.                                         In its
discretion, extend the exercise date for any Option;

 

provided, however, that all
such interpretations, rules, determinations, terms and conditions shall be made
and prescribed in the context of preserving the tax status under Code Section 422
of those Options which are designated as ISOs (unless the holder of any such
Option otherwise agrees). Subject to the foregoing, the interpretation and
construction by the Administrator of any provisions of the Plan or of any Stock
Right granted under it shall be final, unless otherwise determined by the Board
of Directors, if the Administrator is other than the Board of Directors.

 

The
Administrator may employ attorneys, consultants, accountants or other persons,
and the Administrator, the Company and its officers and directors shall be
entitled to rely upon the advice, opinions or valuations of such persons. All
actions taken and all interpretations and determinations made by the
Administrator in good faith shall be final and binding upon the Company, all
Participants, and all other interested persons. No member or agent of the
Administrator shall be personally liable for any action, determination, or
interpretation made in good faith with respect to this Plan or grants
hereunder. Each member of the Administrator shall be indemnified and held
harmless by the Company against any cost or expense (including counsel fees)
reasonably incurred by him or her or any liability (including any sum paid in
settlement of a claim with the approval of the Company) arising out of any act
or omission to act in connection with this Plan unless arising out of such
member’s own fraud or bad faith. Such indemnification shall be in addition to
any rights of indemnification the members of the Administrator may have as
directors or otherwise under the by-laws of the Company, or any agreement, vote
of stockholders or disinterested directors, or otherwise.

 

5.                                      ELIGIBILITY FOR PARTICIPATION

 

The
Administrator shall, in its sole discretion, name the Participants in the Plan,
provided, however, that each Participant must be a Employee, Non-Employee
Director, consultant or advisor of the Company or of an Affiliate at the time a
Stock Right is granted. Notwithstanding the foregoing, the Administrator may
authorize the grant of a Stock Right to a person not then an Employee,
Non-Employee Director, consultant or advisor of the Company or of an Affiliate;
provided, however, that the actual grant of such
Stock Right shall be conditioned upon such person becoming eligible to become a
Participant at or prior to the time of execution of the Stock Agreement
evidencing such Stock Right. ISOs may be granted only to Employees. The
granting of any Stock Right to any individual shall neither entitle that individual
to, nor disqualify him or her from, participation in other grants of Stock
Rights.

 

6.                                      TERMS AND CONDITIONS OF OPTIONS

 

6.1 
General.  Each Option shall be set forth in writing in
a Stock Agreement, duly executed by the Company and, to the extent required by
law or requested by the Company, by the Participant. The Administrator may
provide that Options be granted subject to such terms and conditions,
consistent with the terms and conditions specifically required under this Plan,
as the Administrator may deem appropriate including, without limitation,
subsequent approval by the stockholders of the Company of this Plan or any
amendments thereto. Each Stock Agreement shall state the option price (per
share) of the Shares covered by each Option, the number of Shares to which it
pertains, the date or dates on which it first is exercisable and the date after
which it may no longer be exercised (subject to Sections 11, 12 and 13 of
this Plan). Option rights may accrue or become exercisable in installments over
a period of time, or upon the achievement of certain conditions or the
attainment of stated goals or events. The Option Price per share of Shares
covered by an Option (including both ISOs and Non-Qualified Options) shall not
be less than one hundred percent (100%) of the Fair Market Value per share of
the Common Stock on the date of grant.

 

 

6.2 
ISOs.  Each Option intended to be an ISO shall be
issued only to Employees. In addition to the minimum standards set forth in Section 6.1,
ISOs shall be subject to the following terms and conditions, with such
additional restrictions or changes as the Administrator determines are
appropriate but not in conflict with Code Section 422 and relevant
regulations and rulings of the Internal Revenue Service:

 

6.2.1  ISO
Option Price.  In addition
to the limitation set forth in Section 6.1, the Option price per share of
the Shares covered by each ISO granted to a Participant who owns, directly or
by reason of the applicable attribution rules in Code Section 424(d),
more than ten percent (10%) of the total combined voting power of all classes
of stock of the Company or an Affiliate shall not be less than one hundred ten
percent (110%) of the Fair Market Value on the date of grant.

 

6.2.2  Term
of ISO.  Each ISO shall expire not more
than ten (10) years from the date of grant; provided, however, that an ISO
granted to a Participant who owns, directly or by reason of the applicable
attribution rules in Code Section 424(d), more than ten percent (10%)
of the total combined voting power of all classes of stock of the Company or an
Affiliate shall expire not more than five (5) years from the date of
grant.

 

6.2.3  Annual
Limit on Incentive Stock Options.  To the extent required for “incentive stock
option” treatment under Section 422 of the Code, the aggregate Fair Market
Value (determined as of the time of grant) of the Shares with respect to which
ISOs granted under this Plan and any other plan of the Company or its Affiliate
become exercisable for the first time by a Participant during any calendar year
shall not exceed the aggregate threshold for ISOs established by the Code
($100,000 as of March 22, 2006). To the extent that any Option exceeds
this limit, it shall constitute a Non-Qualified Option.

 

6.3 
Non-Employee
Directors’ Options.  Each
Non-Employee Director, upon first being elected or appointed to the Board of
Directors, shall be granted a Non-Qualified Option to purchase that number of
Shares as shall be established for such Option grants from time to time by the
Board of Directors. Each such Option shall (i) have an exercise price
equal to the Fair Market Value (per share) on the date of grant of the Option, (ii) have
a term of ten (10) years, and (ii) shall become cumulatively
exercisable in sixteen (16) equal quarterly installments, upon completion
of each full quarter of service on the Board of Directors after the date of
grant. In addition, on June 1 of each year, each Non-Employee Director
shall be granted a Non-Qualified Option to purchase that number of Shares as shall
be established for such Option grants from time to time by the Board of
Directors. Each such Option shall (i) have an exercise price equal to the
Fair Market Value (per share) on the date of grant of such Option, (ii) have
a term of ten (10) years, and (iii) be exercisable in full
immediately on the date of grant. Any director entitled to receive an Option
grant under this Section may elect to decline the Option. If a
Non-Employee Director ceases to be any of an Employee, Non-Employee Director,
consultant or advisor of the Company, Options granted under this Section 6.3
shall remain exercisable to the extent such Options are exercisable on the date
of such termination of service, for their full term, and the provisions of
Sections 11 and 13 below shall not apply to any such Options.

 

6.4 
Limitation on Number
of Options Granted. 
Notwithstanding anything in this Plan to the contrary, no Participant
shall be granted an aggregate of Options and/or Stock-Based Awards under this
Plan in any calendar year for more than an aggregate of 600,000 Shares (subject
to adjustment pursuant to Section 17 to the extent consistent with Section 162(m) of
the Code).

 

7.                                      TERMS AND CONDITIONS OF STOCK GRANTS

 

Each
Stock Grant shall be set forth in a Stock Agreement, duly executed by the
Company and, to the extent required by law or requested by the Company, by the
Participant. The Stock Agreement shall be in the form approved by the
Administrator, with such changes and modifications to such form as the
Administrator, in its discretion, shall approve with respect to any particular
Participant or Participants. The Stock Agreement shall contain terms and
conditions that the Administrator determines to be appropriate and in the best
interest of the Company; provided, however, that the purchase price per share
of the Shares covered by each Stock Grant shall not be less than the par value
per Share. Each Stock Agreement shall state the number of Shares to which the
Stock Grant pertains and the terms of any right of the Company to reacquire the
Shares subject to the Stock Grant, including the time and events upon which
such rights shall accrue and the purchase price therefor, and any restrictions
on the transferability of such Shares.

 

8.                                      TERMS AND CONDITIONS OF OTHER STOCK-BASED AWARDS

 

The
Administrator shall have the right to grant other Stock-Based Awards having
such terms and conditions as the Administrator may determine, including,
without limitation, the grant of Shares based upon certain conditions, the
grant of securities convertible into Shares and the grant of stock appreciation
rights, phantom stock awards or stock units. The principal terms of each
Stock-Based Award shall be set forth in a Stock Agreement, duly executed by the
Company and, to the extent required by law or requested by the Company, by the
Participant. The Stock Agreement shall be in a form approved by the
Administrator and shall contain terms and conditions that the Administrator
determines to be appropriate.

 

 

9.                                      EXERCISE OF OPTIONS AND ISSUANCE OF SHARES

 

An
Option (or any part or installment thereof) shall be exercised by giving
written notice to the Company or its designee, together with provision for
payment of the full purchase price in accordance with this Section for the
Shares as to which the Option is being exercised, and upon compliance with any
other condition(s) set forth in the Stock Agreement. Such notice shall be
signed by the person exercising the Option, shall state the number of Shares
with respect to which the Option is being exercised and shall contain any
representation required by the Plan or the Stock Agreement.

 

Payment
of the purchase price for the Shares as to which such Option is being exercised
shall be made (a) in United States dollars in cash or by check acceptable
to the Administrator, or (b) at the discretion of the Administrator, (i) through
delivery of shares of Common Stock not subject to any restriction under any
plan and having a Fair Market Value equal as of the date of exercise to the
cash exercise price of the Option, (ii) in accordance with a cashless
exercise program established with a securities brokerage firm, and approved by
the Company, (iii) by any other means (excluding, however, delivery of a
promissory note of the Participant) that the Administrator determines to be
consistent with the purpose of this Plan and applicable law, or (iv) by
any combination of the foregoing. Notwithstanding the foregoing, the
Administrator shall accept only such payment on exercise of an ISO as is
permitted by Section 422 of the Code.

 

The
Company shall then as soon as is reasonably practicable deliver the Shares as
to which such Option was exercised to the Participant (or to the Participant’s
Survivors, as the case may be). It is expressly understood that the Company may
delay the delivery of the Shares in order to comply with any law or regulation
that requires the Company to take any action with respect to the Shares prior
to their issuance. The Shares shall, upon delivery, be fully paid,
non-assessable Shares.

 

10.                               ASSIGNABILITY AND TRANSFERABILITY OF STOCK RIGHTS

 

By
its terms, a Stock Right granted to a Participant shall not be transferable by
the Participant other than by will or by the laws of descent and distribution
or pursuant to a qualified domestic relations order as defined by the Code or
Title I of the Employee Retirement Income Security Act or the rules thereunder
or as approved by the Administrator in its discretion and set forth in the
applicable Stock Agreement, provided, however, that the Administrator shall not
approve any transfer of a Stock Right for consideration. Except as provided in
the preceding sentence or as otherwise permitted under a Stock Agreement, a
Stock Right shall be exercisable, during the Participant’s lifetime only by
such Participant (or by his or her legal representative) and shall not be
assigned, pledged or hypothecated in any way (whether by operation of law or
otherwise) and shall not be subject to execution, attachment or similar
process. Any attempted transfer, assignment, pledge, hypothecation or other
disposition of any Stock Right or of any rights granted thereunder contrary to
the provisions of this Plan, or the levy of any attachment or similar process
upon a Stock Right, shall be null and void.

 

11.                               EFFECT ON STOCK RIGHTS OF TERMINATION OF SERVICE

 

11.1         Except as otherwise provided in the
applicable Stock Agreement or as otherwise provided in Sections 12 or 13,
if a Participant ceases to be an Employee, Non-Employee Director, consultant or
advisor with the Company and its Affiliates (for any reason other than
termination for “cause,” or death) (a “Termination of Service”) before the
Participant has exercised all Stock Rights, the Participant may exercise any
Stock Right granted to him or her to the extent that the Stock Right is
exercisable on the date of such Termination of Service. Any such Stock Right
must be exercised within three months after the date of the Participant’s
Termination of Service, unless otherwise provided in the applicable Stock
Agreement, but in no event after the expiration of the term of the Stock Right.

 

11.2         The provisions of this Section, and not
the provisions of Section 14, shall apply to a Participant who
subsequently dies after the Termination of Service; provided, however, that in
the case of a Participant’s death within three (3) months after the
Termination of Service, the Participant’s Survivors may exercise the Stock
Right within one (1) year after the date of the Participant’s death, but
in no event after the date of expiration of the term of the Stock Right.

 

11.3         Notwithstanding anything herein to the
contrary, if subsequent to a Participant’s Termination of Service, but prior to
the exercise of a Stock Right, the Administrator determines that, either prior
or subsequent to the Participant’s Termination of Service, the Participant
engaged in conduct which would constitute “cause” (as defined in Section 12),
then such Participant shall forthwith cease to have any right to exercise any
Stock Right. Stock Rights that consist of Shares issued under Stock Grants for
which any restrictions on transfer or Company repurchase right shall have
lapsed, shall be deemed for all purposes to have been “exercised.”

 

 

11.4         Absence from work with the Company or
an Affiliate because of temporary disability or a leave of absence for any
purpose, shall not, during the period of any such absence in accordance with
Company policies, be deemed, by virtue of such absence alone, a Termination of
Service, except as the Administrator may otherwise expressly provide.

 

11.5         Except as required by law or as set
forth in a Participant’s Stock Agreement, Stock Rights granted under the Plan
shall not be affected by any change of a Participant’s status within or among
the Company and any Affiliates, so long as the Participant continues to be an employee,
director, consultant or advisor of the Company or any Affiliate.

 

12.                               EFFECT ON STOCK RIGHTS OF TERMINATION OF SERVICE FOR “CAUSE”

 

Except
as otherwise provided in a Participant’s Stock Agreement or as otherwise agreed
in writing by the Administrator, if a Participant’s service with the Company or
an Affiliate is terminated for “cause,” all outstanding and unexercised (vested
or unvested) Stock Rights will immediately be forfeited as of the time the
Participant is notified that his or her service is terminated for “cause.”
Stock Rights that consist of Shares issued under Stock Grants for which any
restrictions on transfer or Company repurchase right shall have lapsed, shall
be deemed for all purposes to have been “exercised.” For purposes of this Plan,
“cause” shall include (and is not limited to) dishonesty with respect to the
Company and its Affiliates, insubordination, substantial malfeasance or
non-feasance of duty, unauthorized disclosure of confidential information,
breach by the Participant of any provision of any employment, consulting,
advisory, nondisclosure, non-competition or similar agreement between the
Participant and the Company, and conduct substantially prejudicial to the
business of the Company or any Affiliate. The determination of the
Administrator as to the existence of cause will be conclusive on the
Participant and the Company. “Cause” is not limited to events that have
occurred prior to a Participant’s termination of service, nor is it necessary
that the Administrator’s finding of “cause” occur prior to termination of
service. If the Administrator determines, subsequent to a Participant’s
termination of service but prior to the exercise of a Stock Right, that either
prior or subsequent to the Participant’s termination of service the Participant
engaged in conduct which would constitute “cause,” then the right to exercise
any Stock Right shall be forfeited as set forth in this Section 12. Any
definition in an agreement between a Participant and the Company or an
Affiliate which contains a conflicting definition of “cause” for termination of
service and which is in effect at the time of such termination of service shall
supersede the definition in this Plan with respect to that Participant.

 

13.                               EFFECT ON STOCK RIGHTS OF DEATH WHILE AN EMPLOYEE, DIRECTOR, CONSULTANT
OR ADVISOR

 

Except
as otherwise provided in a Participant’s Stock Agreement, in the event of death
of a Participant while the Participant is an Employee, Non-Employee Director,
consultant or advisor of the Company or of an Affiliate, any Stock Rights
granted to such Participant may be exercised by the Participant’s Survivors to
the extent exercisable but not exercised on the date of death. Any such Stock
Right must be exercised within one (1) year after the date of death of the
Participant but in no event after the date of expiration of the term of the
Stock Right, notwithstanding that the decedent might have been able to exercise
the Stock Right as to some or all of the Shares on a later date if he or she
had not died and had continued to be an Employee, Non-Employee Director,
consultant or advisor.

 

14.                               RIGHTS AS A STOCKHOLDER

 

No
Participant to whom a Stock Right (other than a Stock Grant) has been granted
shall have rights as a stockholder with respect to any Shares covered by such
Stock Right, except after due exercise thereof and/or tender of the full
purchase price for the Shares being purchased pursuant to such exercise. The
provisions of this Section 14 shall not be applicable to Shares issued
pursuant to Stock Grants, provided that the Participant shall have tendered the
purchase price therefore, notwithstanding the existence of stock transfer
restrictions on or a Company repurchase right with respect to such Shares.

 

15.                               EMPLOYMENT OR OTHER RELATIONSHIP

 

Nothing
in this Plan or any Stock Agreement shall be deemed to prevent the Company or
an Affiliate from terminating the employment, consultancy or director status of
a Participant, or to prevent a Participant from terminating his or her own
employment, consultancy or director status or to give any Participant a right
to be retained in employment or other service by the Company or any Affiliate
for any period of time.

 

16.                               DISSOLUTION OR LIQUIDATION OF THE COMPANY

 

Upon
the dissolution or liquidation of the Company (other than in connection with a
transaction subject to the provisions of Section 17.2), all Stock Rights
granted under this Plan which as of such date shall not have been exercised
will 

 

 

terminate and become null
and void; provided, however, that if the rights of a Participant or a
Participant’s Survivors have not otherwise terminated and expired, the
Participant or Participant’s Survivors will have the right immediately prior to
such dissolution or liquidation to exercise any Stock Right to the extent that
such Stock Right is exercisable as of the date immediately prior to such
dissolution or liquidation. Upon the dissolution or liquidation of the Company,
any outstanding Stock-Based Awards shall immediately terminate unless otherwise
determined by the Administrator or specifically provided in the applicable
Stock Agreement.

 

17.                               ADJUSTMENTS

 

Upon
the occurrence of any of the following events, a Participant’s rights with
respect to any Stock Right granted to him or her hereunder that have not
previously been exercised in full shall be adjusted as hereinafter provided,
unless otherwise specifically provided in the Stock Agreement or in any
employment agreement between a Participant and the Company or an Affiliate:

 

17.1  Stock
Dividends and Stock Splits.  If the shares of Common Stock shall be
subdivided or combined into a greater or smaller number of shares or if the
Company shall issue any shares of Common Stock as a stock dividend on its
outstanding Common Stock, the number of shares of Common Stock subject to or
deliverable upon the exercise of a Stock Right shall be appropriately increased
or decreased, and appropriate adjustments shall be made in the purchase price
per Share to reflect such event. The number of Shares subject to Options to be
granted to Non-Employee Directors pursuant to Section 6.3 and the number
of Shares subject to the limitation in Section 6.4 shall also be
proportionately adjusted upon the occurrence of such events.

 

17.2  Consolidations
or Mergers.  In the event
of a consolidation or merger in which the Company is not the surviving
corporation or which results in the acquisition of substantially all the
Company’s outstanding stock by a single person or entity or by a group of
persons and/or entities acting in concert, or in the event of the sale or
transfer of substantially all the Company’s assets (any of the foregoing, an “Acquisition”),
all then outstanding Stock Rights (excluding any Shares subject to Stock Grants
as to which all Company repurchase rights shall have lapsed) shall terminate
unless assumed pursuant to clause (i) below; provided that either (i) the
Administrator shall provide for the surviving or acquiring entity or an
affiliate thereof to assume the outstanding Stock Rights or grant replacement
stock rights in lieu thereof, any such replacement to be upon an equitable
basis as determined by the Administrator, or (ii) if there is no such
assumption or substitution, all outstanding Stock Rights shall become
immediately and fully exercisable and all Company repurchase rights with
respect to Stock Rights shall lapse, in each case immediately prior to the
Acquisition, notwithstanding any restrictions or vesting conditions set forth
therein.

 

17.3  Recapitalization
or Reorganization.  In the event
of a recapitalization or reorganization of the Company (other than a
transaction described in Section 17.2 above) pursuant to which securities
of the Company or of another corporation are issued with respect to the
outstanding shares of Common Stock, a Participant upon exercising a Stock Right
shall be entitled to receive for the purchase price paid upon such exercise the
securities he or she would have received if he or she had exercised such Stock
Right prior to such recapitalization or reorganization.

 

17.4  Adjustments
to Stock Grants and Stock-Based Awards.  Upon the happening of any of the events
described in Sections 17.1, 17.2 or 17.3, any outstanding Stock-Based
Award and the Shares subject to any Stock Grant, vested or unvested, shall be
appropriately adjusted to reflect the events described in such Sections. The
Administrator shall determine the specific adjustments to be made under this Section 17.4.

 

17.5  Modification
of ISOs. 
Notwithstanding the foregoing, any adjustments made pursuant to Section 17.1,
17.2 or 17.3 with respect to ISOs shall be made only after the Administrator
determines whether such adjustments would constitute a “modification” of such
ISOs (as that term is defined in Section 424(h) of the Code) or would
cause any adverse tax consequences for the holders of such ISOs. If the
Administrator determines that such adjustments made with respect to ISOs would
constitute a modification of such ISOs, it may refrain from making such
adjustments, unless the holder of an ISO specifically requests in writing that
such adjustment be made and such writing indicates that the holder has full
knowledge of the consequences of such “modification” on his or her income tax
treatment with respect to the ISO.

 

18.                               ISSUANCES OF SECURITIES

 

Except
as expressly provided herein, no issuance (including for this purpose the
delivery of shares held in treasury) by the Company of shares of stock of any
class, or securities convertible into shares of stock of any class, shall
affect, and no adjustment by reason thereof shall be made with respect to, the
number or price of Shares subject to Stock Rights. Except as 

 

 

expressly provided
herein, no adjustments shall be made for dividends paid in cash or in property
(including without limitation, securities) of the Company.

 

19.                               FRACTIONAL SHARES

 

No
fractional share shall be issued under the Plan and the person exercising any
Stock Right shall receive from the Company cash in lieu of any such fractional
share equal to the Fair Market Value thereof.

 

20.                               CONVERSION OF ISOs INTO NON-QUALIFIED OPTIONS: TERMINATION OF ISOs

 

Any
Options granted under this Plan that do not meet the requirements of the Code
for ISOs shall automatically be deemed to be Non-Qualified Options without
further action on the part of the Administrator. The Administrator, at the
written request of any Participant, may in its discretion take such actions as
may be necessary to convert such Participant’s ISOs (or any portion thereof)
that have not been exercised on the date of conversion into Non-Qualified
Options at any time prior to the expiration of such ISOs, regardless of whether
the Participant is an employee of the Company or an Affiliate at the time of
such conversion. At the time of such conversion, the Administrator (with the
consent of the Participant) may impose such conditions on the exercise of the
resulting Non-Qualified Options as the Administrator in its discretion may
determine, provided that such conditions shall not be inconsistent with this
Plan. Nothing in the Plan shall be deemed to give any Participant the right to
have such Participant’s ISOs converted into Non-Qualified Options, and no such
conversion shall occur until and unless the Administrator takes appropriate
action. The Administrator, with the consent of the Participant, may also
terminate any portion of any ISO that has not been exercised at the time of
such termination.

 

21.                               WITHHOLDING

 

If
any federal, state, or local income taxes, employment taxes, Federal Insurance
Contributions Act (“FICA”) withholdings or other amounts are required by applicable
law or governmental regulation to be withheld from the Participant’s salary,
wages or other remuneration in connection with the exercise of a Stock Right,
the lapsing of a Company repurchase right or a Disqualifying Disposition (as
defined in Section 22), the Company may withhold from the Participant’s
compensation, if any, or may require that the Participant advance in cash to
the Company, or to any Affiliate of the Company which employs or employed the
Participant, the amount of such withholdings unless a different withholding
arrangement, including the use of shares of the Company’s Common Stock, is
authorized by the Administrator (and permitted by law). For purposes hereof,
the Fair Market Value of any shares withheld for purposes of payroll withholding
shall be determined in the manner provided in Section 1 above, as of the
most recent practicable date prior to the date of exercise. If the Fair Market
Value of the shares withheld is less than the amount of payroll withholdings
required, the Participant may be required to advance the difference in cash to
the Company or the Affiliate employer. The Administrator in its discretion may
condition the exercise of an Option for less than the then Fair Market Value on
the Participant’s payment of such additional withholding. In no event shall
shares be withheld from any award in satisfaction of tax withholding
requirements in an amount that exceeds the statutory minimum amount of tax
withholding required.

 

22.                               NOTICE TO COMPANY OF DISQUALIFYING DISPOSITION

 

Each
Employee who receives an ISO must agree to notify the Company in writing
immediately after the Employee makes a “Disqualifying Disposition” of any
Shares acquired pursuant to the exercise of an ISO. A Disqualifying Disposition
is any disposition (as defined in Section 424(c) of the Code) of such
Shares before the later of (a) two years from the date the Employee was
granted the ISO, or (b) one year after the date the Employee acquired
Shares by exercising the ISO. If the Employee has died before such Shares are
sold, the notice provisions of this Section 22 shall not apply.

 

23.                               EFFECTIVE DATE; TERMINATION OF THE PLAN

 

This
Plan shall be effective on March 29, 2006, the date of its adoption by the
Board of Directors, subject to approval by the shareholders of the Company. The
Plan will terminate on March 28, 2016. The Plan also may be terminated at
an earlier date by vote of the Board of Directors. Termination of this Plan
will not affect any Stock Rights granted or Stock Agreements executed prior to
the effective date of such termination.

 

24.                               AMENDMENT OF THE PLAN; AMENDMENT OF STOCK RIGHTS

 

The
Plan may be amended by the stockholders of the Company by affirmative vote of a
majority of the votes cast at a meeting of the stockholders at which a quorum is
present. The Plan also may be amended by the Board of Directors or the 

 

 

Administrator, including,
without limitation, to the extent necessary to qualify any or all outstanding
Stock Rights granted under the Plan or Stock Rights to be granted under the
Plan for favorable federal income tax treatment (including deferral of taxation
upon exercise) as may be afforded incentive stock options under Section 422
of the Code, and to the extent necessary to qualify the shares issuable upon
exercise of any outstanding Stock Rights granted, or Stock Rights to be
granted, under the Plan for listing on any national securities exchange or
quotation in any national automated quotation system of securities dealers. Any
amendment approved by the Administrator that the Administrator determines is of
a scope that requires stockholder approval shall be subject to stockholder
approval. No modification or amendment of the Plan shall adversely affect a
Participant’s rights under a Stock Right previously granted to the Participant,
without such Participant’s consent.

 

In
its discretion, the Administrator may amend any term or condition of any
outstanding Stock Right, provided: (i) such term or condition is not
prohibited by the Plan; (ii) if the amendment is adverse to the Participant,
such amendment shall be made only with the consent of the Participant or the
Participant’s Survivors, as the case may be; and (iii) any such amendment
of any ISO shall be made only after the Administrator determines whether such
amendment would constitute a “modification” of any Stock Right which is an ISO
(as that term is defined in Section 424(h) of the Code) or would
cause any adverse tax consequences for the holder of such ISO (in which case,
the Participant’s or Participant’s Survivors’ consent to such amendment shall
be required). Notwithstanding the foregoing, the Administrator shall not have
the authority to reduce the exercise price of any Option after the date of
grant, except for adjustments permitted under Section 17 of this Plan.

 

25.                               GOVERNING LAW

 

This
Plan shall be construed and enforced in accordance with the law of The
Commonwealth of Massachusetts.

 

 

AMENDMENT NO. 1

TO THE

AMENDED AND RESTATED

VERTEX PHARMACEUTICALS INCORPORATED

2006 STOCK AND OPTION PLAN

 

Effective February 5,
2009, the Amended and Restated Vertex Pharmaceuticals Incorporated 2006 Stock
and Option Plan (the “Plan”) is
hereby amended as follows:

 

Section 6.4
of the Plan is deleted in its entirety and the following is substituted
therefor:

 

6.4    Limitation on Number of
Shares Granted.    Notwithstanding anything in
this Plan to the contrary, no Participant shall be granted an aggregate of
Options and/or Stock-Based Awards under this Plan in any calendar year for more
than an aggregate of 700,000 Shares (subject to adjustment pursuant to Section 17
to the extent consistent with Section 162(m) of the Code).

 

 

AMENDMENT
NO. 2

TO THE

AMENDED AND RESTATED

VERTEX PHARMACEUTICALS INCORPORATED

2006 STOCK AND OPTION PLAN

 

Effective May 14,
2009, the Amended and Restated Vertex Pharmaceuticals Incorporated 2006 Stock
and Option Plan (the “Plan”) is
hereby amended as follows:

 

The
first paragraph of Section 3 of the Plan is deleted in its entirety and
the following is substituted therefor:

 

The number of Shares
subject to this Plan as to which Stock Rights may be granted from time to time
shall be 21,602,380 or the equivalent of such number of Shares after the
Administrator, in its sole discretion, has interpreted the effect of any stock
split, stock dividend, combination, recapitalization or similar transaction in
accordance with Section 17 of this Plan.

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