Document:

Exhibit 10.5

 

EXECUTION COPY

 

Confidential Treatment Requested.

Confidential portions of this document have been redacted and have been
separately filed

with the Commission.

 

PURCHASE AGREEMENT REGARDING MILESTONE #9

 

Dated as of September 30,
2009

 

by and between

 

VERTEX PHARMACEUTICALS
INCORPORATED

 

and

 

OLMSTED PARK S.A.

 

 

Information redacted pursuant to
a confidential treatment request.  An
unredacted version 

of this exhibit has been filed separately with the Commission.

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I DEFINITIONS

  	
  1

  
	
   

  	
   

  	
   

  
	
  Section 1.01

  	
  Definitions

  	
  1

  
	
   

  	
   

  	
   

  
	
  ARTICLE II PURCHASE AND SALE OF THE PURCHASED INTEREST

  	
  7

  
	
   

  	
   

  	
   

  
	
  Section 2.01

  	
  Purchase and Sale

  	
  7

  
	
  Section 2.02

  	
  Entitlement to Payments

  	
  8

  
	
  Section 2.03

  	
  Purchase Price

  	
  8

  
	
  Section 2.04

  	
  No Assumed Obligations

  	
  9

  
	
  Section 2.05

  	
  Excluded Assets

  	
  9

  
	
  Section 2.06

  	
  Closing Deliverables

  	
  9

  
	
   

  	
   

  	
   

  
	
  ARTICLE III REPRESENTATIONS AND WARRANTIES OF VERTEX

  	
  10

  
	
   

  	
   

  	
   

  
	
  Section 3.01

  	
  Organization

  	
  10

  
	
  Section 3.02

  	
  Corporate Authorization

  	
  10

  
	
  Section 3.03

  	
  Governmental and Third Party Authorization

  	
  10

  
	
  Section 3.04

  	
  Ownership

  	
  11

  
	
  Section 3.05

  	
  Solvency

  	
  11

  
	
  Section 3.06

  	
  No Litigation

  	
  11

  
	
  Section 3.07

  	
  Compliance with Laws

  	
  12

  
	
  Section 3.08

  	
  No Conflicts

  	
  12

  
	
  Section 3.09

  	
  Broker’s Fees

  	
  13

  
	
  Section 3.10

  	
  Subordination

  	
  13

  
	
  Section 3.11

  	
  Janssen Agreement

  	
  13

  
	
  Section 3.12

  	
  No Set-offs

  	
  15

  
	
  Section 3.13

  	
  UCC Representations and Warranties

  	
  15

  
	
  Section 3.14

  	
  Taxes

  	
  15

  
	
  Section 3.15

  	
  Intellectual Property

  	
  15

  
	
  Section 3.16

  	
  Certain Information

  	
  16

  
	
  Section 3.17

  	
  Consolidation

  	
  17

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

  	
  17

  
	
   

  	
   

  	
   

  
	
  Section 4.01

  	
  Organization

  	
  17

  
	
  Section 4.02

  	
  Authorization

  	
  17

  
	
  Section 4.03

  	
  Governmental and Third Party Authorization

  	
  17

  
	
  Section 4.04

  	
  No Litigation

  	
  17

  
	
  Section 4.05

  	
  No Conflicts

  	
  18

  
	
  Section 4.06

  	
  Broker’s Fees

  	
  18

  
	
  Section 4.07

  	
  Access to Information

  	
  18

  

 

i

 

Information redacted pursuant to
a confidential treatment request.  An
unredacted version 

of this exhibit has been filed separately with the Commission.

 

	
  ARTICLE V COVENANTS

  	
  19

  
	
   

  	
   

  	
   

  
	
  Section 5.01

  	
  Confidentiality; Public Announcement

  	
  19

  
	
  Section 5.02

  	
  Further Assurances

  	
  20

  
	
  Section 5.03

  	
  Payments to Vertex on Account of the Purchased Interest

  	
  20

  
	
  Section 5.04

  	
  Janssen Agreement

  	
  20

  
	
  Section 5.05

  	
  Termination of the Janssen Agreement

  	
  21

  
	
  Section 5.06

  	
  Notice of Certain Events

  	
  21

  
	
  Section 5.07

  	
  Access to Certain Information

  	
  21

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI TERMINATION

  	
  22

  
	
   

  	
   

  	
   

  
	
  Section 6.01

  	
  Termination Date

  	
  22

  
	
  Section 6.02

  	
  Effect of Termination

  	
  22

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII MISCELLANEOUS

  	
  23

  
	
   

  	
   

  	
   

  
	
  Section 7.01

  	
  Survival

  	
  23

  
	
  Section 7.02

  	
  Specific Performance

  	
  23

  
	
  Section 7.03

  	
  Notices

  	
  23

  
	
  Section 7.04

  	
  Successors and Assigns

  	
  25

  
	
  Section 7.05

  	
  Indemnification

  	
  25

  
	
  Section 7.06

  	
  Independent Nature of Relationship

  	
  27

  
	
  Section 7.07

  	
  Tax

  	
  28

  
	
  Section 7.08

  	
  Entire Agreement

  	
  30

  
	
  Section 7.09

  	
  Governing Law

  	
  30

  
	
  Section 7.10

  	
  Waiver of Jury Trial

  	
  31

  
	
  Section 7.11

  	
  Severability

  	
  31

  
	
  Section 7.12

  	
  Counterparts; Effectiveness

  	
  31

  
	
  Section 7.13

  	
  Amendments; No Waivers

  	
  32

  
	
  Section 7.14

  	
  Interpretation

  	
  32

  
	
  Section 7.15

  	
  Expenses

  	
  32

  

 

SCHEDULES

 

Schedule
3.13   Vertex’s Address and Identification Numbers

Schedule
5.03(c) Purchaser Account Information

 

EXHIBITS

 

Exhibit A                Form of Bill of Sale

Exhibit B                Form of Financing
Statement

Exhibit C                Form of Payment
Direction

Exhibit D                Form of
Legal Opinion of Vertex’s Counsel

 

ii

 

Information redacted pursuant to
a confidential treatment request.  An
unredacted version 

of this exhibit has been filed separately with the Commission.

 

PURCHASE AGREEMENT REGARDING MILESTONE #9

 

This PURCHASE
AGREEMENT REGARDING MILESTONE #9 (this “Agreement”) is made
and entered into as of September 30, 2009 (the “Effective Date”) by
and between Vertex Pharmaceuticals Incorporated, a Massachusetts corporation (“Vertex”),
and Olmsted Park S.A., a société anonyme governed by the laws of the Grand
Duchy of Luxembourg (the “Purchaser”).

 

WHEREAS, Vertex has
the right to receive a payment based on the achievement of a certain milestone
under the Janssen Agreement described herein; and

 

WHEREAS, Vertex wishes
to sell, assign, convey and transfer to the Purchaser, and the Purchaser wishes
to purchase, acquire and accept from Vertex, the Purchased Interest described
herein, upon and subject to the terms and conditions hereinafter set forth;

 

NOW, THEREFORE, in
consideration of the mutual covenants, agreements representations and
warranties set forth herein, the parties hereto agree as follows:

 

ARTICLE I

DEFINITIONS

 

Section 1.01         Definitions.

 

The following terms, as used
herein, shall have the following meanings:

 

“Adverse Effect”
shall mean (i) an adverse effect on: (a) the legality, validity or
enforceability of any of the Transaction Documents, the Janssen Agreement or
the back-up security interest granted pursuant to Section 2.01(d);
(b) the amount of the Milestone Payment; or (c) the timing of the
payment of the Milestone Payment after achievement of the Milestone Event; or (ii) a
material adverse effect on: (a) the right or ability of Vertex (or any
permitted successor or assignee) to perform any of its obligations under any of
the Transaction Documents or to consummate the transactions contemplated
hereunder or thereunder; (b) the rights or remedies of the Purchaser under
any of the Transaction Documents; or (c) the right or ability of Janssen
(or any permitted successor or assignee) to perform any of its obligations
under the Janssen Agreement that are related, directly or indirectly, to the
achievement of the Milestone Event.

 

“Affiliate” shall
mean any Person that directly, or indirectly through one or more
intermediaries, controls, is controlled by or is under common control with
another Person.  For purposes of this
definition, “control” (or its derivatives) shall mean the possession,
direct or indirect, of the power or ability to direct or cause the direction of
the management and policies of a Person, whether through ownership of equity,
voting securities or beneficial interest, by contract or otherwise.

 

“Agreement” shall
have the meaning set forth in the preamble.

 

 

Information redacted pursuant to
a confidential treatment request.  An
unredacted version 

of this exhibit has been filed separately with the Commission.

 

“Ancillary Janssen
Documents” means the “Global Development Plan,” the “Supply Agreement” and
the “Pharmacovigilance Agreement” as such terms are defined in Sections 1.41,
1.106, and 5.7, respectively, of the Janssen Agreement.

 

“Bankruptcy Event”
shall mean the occurrence of any of the following:

 

(i)            Vertex or any of its
Subsidiaries shall commence any case, proceeding or other action (a) under
any existing or future law of any jurisdiction, domestic or foreign, relating
to bankruptcy, insolvency, reorganization, relief of debtors or the like,
seeking to have an order for relief entered with respect to it, or seeking to
adjudicate it bankrupt or insolvent, or seeking reorganization, arrangement,
adjustment, winding-up, liquidation, dissolution, composition or other relief
with respect to all or substantially all of its debts, or (b) seeking
appointment of a receiver, trustee, custodian or other similar official for it
or for all or substantially all of its assets, or Vertex or any of its
Subsidiaries shall make a general assignment for the benefit of its creditors;

 

(ii)           there shall be commenced
against Vertex or any of its Subsidiaries any case, proceeding or other action
of a nature referred to in clause (i) above that remains undismissed or
undischarged for a period of 90 calendar days;

 

(iii)          there shall be commenced
against Vertex or any of its Subsidiaries any case, proceeding or other action
seeking issuance of a warrant of attachment, execution, distraint or similar
process against (a) all or any substantial portion of its assets and/or (b) the
Milestone Payment, which results in the entry of an order for any such relief
that shall not have been vacated, discharged, stayed, satisfied or bonded
pending appeal within 45 calendar days from the entry thereof; or

 

(iv)          Vertex or any of its
Subsidiaries shall take any action in furtherance of, or indicating its consent
to, approval of, or acquiescence in, any of the acts set forth in clause (i),
clause (ii) or clause (iii) above.

 

“Bill of Sale” shall
mean the bill of sale substantially in the form of Exhibit A.

 

“Business Day” shall
mean any day other than a Saturday, a Sunday, any day that is a legal holiday
under the laws of the State of New York, The Commonwealth of Massachusetts or
Luxembourg, or any day on which banking institutions located in the State of
New York, The Commonwealth of Massachusetts or Luxembourg are authorized or
required by law or other governmental action to close.

 

“Code” shall have the
meaning set forth in Section 7.07(b).

 

“Confidential Information”
shall mean, as it relates to any party (or its Affiliates) who provides
information (the “Disclosing Party”) to the other party hereto, all
information (whether written or oral, or in electronic or other form) furnished
before or after the Effective Date concerning, or relating in any way, directly
or indirectly, to the Disclosing Party or its Affiliates (including, in the
case of the Purchaser, any of its equityholders) including the terms,
conditions and provisions of this Agreement and any other Transaction Document,
and in the case of information provided by Vertex or its Affiliates, relating to
the Purchased Interest or the 

 

2

 

Information redacted pursuant to
a confidential treatment request.  An
unredacted version 

of this exhibit has been filed separately with the Commission.

 

Milestone
Payment, including (i) any license, sublicense, assignment, product
development, royalty, sale, supply or other agreements (including the Janssen
Agreement) involving or relating in any way, directly or indirectly, to the
Purchased Interest, the Milestone Payment or the circumstances giving rise to
the Purchased Interest, and including all terms and conditions thereof and the
identities of the parties thereto, (ii) any reports, data, materials or
other documents of any kind relating in any way, directly or indirectly, to the
Disclosing Party or its Affiliates, the Purchased Interest, the Milestone
Payment or the circumstances giving rise to the Purchased Interest, and
including reports, data, materials or other documents of any kind delivered
pursuant to or under any of the agreements referred to in clause (i) above,
and (iii) any inventions, devices, improvements, formulations,
discoveries, compositions, ingredients, patents, patent applications, know-how,
processes, trial results, research, developments or any other intellectual
property, trade secrets or information involving or relating in any way,
directly or indirectly, to the Purchased Interest or the circumstances giving
rise to the Purchased Interest. 
Notwithstanding the foregoing definition, “Confidential Information”
shall not include information that is (v) independently developed or
discovered by the Receiving Party without use of or access to any Confidential
Information, as demonstrated by documentary evidence, (w) already in the
public domain at the time the information is disclosed or has become part of
the public domain after such disclosure through no breach of this Agreement, (x) lawfully
obtainable from other sources, (y) required to be disclosed in any
document to be filed with any Governmental Authority or (z) required to be
disclosed by court or administrative order or under securities laws, rules and
regulations applicable to any party hereto or pursuant to the rules and
regulations of any stock exchange or stock market on which securities of Vertex
or its Affiliates or the Purchaser or its Affiliates may be listed for trading.

 

“Discrepancy” shall
have the meaning set forth in Section 2.02(b).

 

“Effective Date”
shall have the meaning set forth in the preamble.

 

“Excluded Liabilities and
Obligations” shall have the meaning set forth in Section 2.04.

 

“Final Determination”
shall have the meaning set forth in Section 7.07(e).

 

“Financing Statement”
shall have the meaning set forth in Section 2.01(c).

 

“GAAP” means
generally accepted accounting principles in the United States of America as in
effect from time to time, including those set forth in (1) the opinions
and pronouncements of the Accounting Principles Board of the American Institute
of Certified Public Accountants and (2) the statements and pronouncements
of the Financial Accounting Standards Board.

 

“Governmental Authority”
shall mean any government, court, regulatory or administrative agency or
commission, or other governmental authority, agency or instrumentality, whether
foreign, federal, state or local (domestic or foreign).

 

“Janssen” shall mean
Janssen Pharmaceutica, N.V., a Belgium corporation, including its successors
and assigns.

 

“Janssen Agreement”
shall mean the License, Development, Manufacturing and Commercialization
Agreement by and between Vertex and Janssen effective as of June 30, 2006,

 

3

 

Information redacted pursuant to
a confidential treatment request.  An
unredacted version 

of this exhibit has been filed separately with the Commission.

 

as
such agreement is amended and in effect on the date hereof, together with the
Janssen Consent and the Ancillary Janssen Documents, except as expressly set
forth herein, as each may be amended and/or restated from time to time after the
date hereof in accordance with the terms of this Agreement and any new,
substitute or amended agreement by and between Vertex and Janssen relating to
the Milestone Payment made after the date hereof in accordance with the terms
of this Agreement.

 

“Janssen Consent”
shall have the meaning in Section 3.03.

 

“Knowledge” shall
mean, with respect to Vertex, the knowledge of any of the following officers or
employees of Vertex: the Chief Executive Officer; the Chief Medical Officer;
the General Counsel; the Chief Scientific Officer; the Chief Financial Officer;
the Chief Commercial Officer; the Vice President and Corporate Controller; the
Head, Business Development & Licensing; and the Deputy General
Counsel.  An individual will be deemed to
have “knowledge” of a particular fact or other matter if (i) such
individual has or at any time had actual knowledge of such fact or other matter
or (ii) a prudent individual would be expected to discover or otherwise
become aware of such fact or other matter in the course of his or her
responsibilities in his or her capacity as an officer or employee of Vertex or
in the course of conducting a reasonably diligent review concerning the
existence thereof with any employee of Vertex or any of its Subsidiaries who,
at the Effective Date, reports directly to such individual and who (x) has
responsibilities or (y) would reasonably be expected to have actual
knowledge of circumstances or other information, in each case, that would
reasonably be expected to be pertinent to such fact or other matter.  Notwithstanding anything in this definition
to the contrary, Vertex will be deemed to have knowledge of any fact or matter
that is the subject of, or referred to within, any written notice it or any of
its Subsidiaries has received (whether in hard copy, digital or electronic
format).

 

“Lien” shall mean any
lien, hypothecation, charge, instrument, license, preference, priority,
security agreement, security interest, mortgage, option, right of first
refusal, privilege, pledge, liability, covenant or order, or any encumbrance,
restriction, right or claim of any other Person or Governmental Authority of
any kind whatsoever, whether choate or inchoate, filed or unfiled, noticed or
unnoticed, recorded or unrecorded, contingent or non-contingent, material or
non-material, known or unknown, other than any of the above created solely in
favor of the Purchaser by the Transaction Documents.

 

“Losses” shall mean,
collectively, any and all claims, damages, losses, judgments, liabilities,
costs and expenses (including reasonable expenses of investigation and
reasonable attorneys’ fees and expenses), excluding punitive damages, except to
the extent punitive damages are paid to a third party.

 

“Milestone Event”
shall mean the milestone event numbered “9” set forth in the table in Section 9.2.1
of the Janssen Agreement.

 

“Milestone Payment”
shall mean collectively (i) an amount equal to [***]
due and payable to Vertex under Section 9.2.1 of the Janssen Agreement
upon the occurrence of Milestone Event [***] due and
payable to Vertex under Section 9.2.1 of the Janssen Agreement upon the
occurrence of Milestone Event; (ii) the Purchaser’s Pro-Rata Portion of
all additional amounts added to the Milestone Payment under any provision of
the Janssen Agreement, 

 

4

 

Information redacted pursuant to
a confidential treatment request.  An
unredacted version 

of this exhibit has been filed separately with the Commission.

 

including
any interest assessed in connection with a delay in the payment by Janssen of
the Milestone Payment represented by the Purchased Interest pursuant to Section 9.10
of the Janssen Agreement; (iii) all accounts (as defined under the UCC)
evidencing the rights to the payment and amount described in clauses (i) and
(ii) above; and (iv) all proceeds (as defined under the UCC) of the
foregoing.

 

“Payment Direction”
shall have the meaning set forth in Section 2.06(b).

 

“Person” shall mean
an individual, corporation, partnership, limited liability company, association,
trust or other entity or organization of any kind, but not including a
Governmental Authority.

 

“Pro-Rata Portion”
shall mean, with respect to Vertex, [***] and, with
respect to the Purchaser, [***].

 

“Prohibited Amendment”
shall mean any amendment, modification, restatement or supplement of any
provision of the Janssen Agreement that changes in any way (i) the event
underlying the Milestone Event, (ii) the amount of the Milestone Payment
or (iii) the timing of the payment of the Milestone Payment by Janssen
after achievement of the Milestone Event by Janssen.  For avoidance of doubt’ any termination of
the Janssen Agreement shall not be deemed a Prohibited Amendment.

 

“Purchased Interest”
shall mean collectively (i) an undivided 100% interest in the right to
receive the Milestone Payment, (ii) the right to enforce directly against
Janssen the right to payment of all or any portion of the Milestone Payment
represented by the Purchased Interest when earned upon achievement of the
Milestone Event pursuant to the Janssen Agreement, and (iii) the right to
transfer or assign entitlement to all or a portion of the Milestone Payment
represented by the Purchased Interest to third parties in accordance with the
terms of this Agreement.

 

“Purchase Price”
shall have the meaning set forth in Section 2.03.

 

“Purchaser” shall
have the meaning set forth in the preamble and shall include its successors and
assigns.

 

“Purchaser Account”
shall have the meaning set forth in Section 5.03(c).

 

“Purchaser Indemnified
Party” shall have the meaning set forth in Section 7.05(a).

 

“Recharacterization”
shall have the meaning set forth in Section 2.01(d).

 

“Recipient” shall
have the meaning set forth in Section 5.01(a).

 

“Report” shall have
the meaning set forth in Section 3.16.

 

“Retained Milestone
Payment” shall mean U.S. [***] of the
total amount payable to Vertex or any of its Affiliates under Section 9.2.1
of the Janssen Agreement upon the occurrence of Milestone Event.

 

5

 

Information redacted pursuant to
a confidential treatment request.  An
unredacted version 

of this exhibit has been filed separately with the Commission.

 

“Section 9.2.2
Notice” shall have the meaning set forth in Section 5.04(b).

 

“Set-off” shall mean
any set-off, rescission, counterclaim, defense, reduction or deduction of any
kind.  Without limiting the generality of
the foregoing, the term Set-off shall include the right by Janssen to reduce
the amount of the Milestone Payment for any reason, including without
limitation in connection with (i) a breach by Vertex of the Janssen
Agreement, (ii) any anti stacking or similar rights with respect to
payments to third parties for access to intellectual property rights or data, (iii) any
discounted payment obligations in connection with third party sales of generic
competitive products, (iv) any rights to credit against any payment
obligations any costs, expenses or liabilities of Janssen under the Janssen
Agreement, including with respect to (a) Global Development Costs (as
defined in the Janssen Agreement), (b) any costs and expenses of patent
prosecution, maintenance or enforcement, or (c) defense of third party
infringement claims, or (v) any amounts paid or payable pursuant to any
indemnification rights or obligations of Vertex or Janssen under the Janssen
Agreement.

 

“Subsidiary” or “Subsidiaries”
shall mean with respect to any Person (i) any corporation of which the
outstanding capital stock having at least a majority of votes entitled to be
cast in the election of directors (or, if there are no such voting interests,
50% or more of the equity interests) under ordinary circumstances is at the
time be owned, directly or indirectly, by such Person or by another subsidiary
of such Person or (ii) any other Person of which at least a majority
voting interest (or, if there are no such voting interests, 50% or more of the
equity interests) under ordinary circumstances is at the time owned, directly
or indirectly, by such Person or by another subsidiary of such Person.

 

“Third Party Claim”
shall have the meaning set forth in Section 7.05(c).

 

“Transaction Documents”
shall mean, collectively, this Agreement, the Bill of Sale and the Payment
Direction.

 

“UCC” shall mean the
Uniform Commercial Code as in effect from time to time in the State of New
York; provided, however, that, if, with respect to any financing
statement or by reason of any provisions of law, the perfection or the effect
of perfection or non-perfection of the Purchaser’s ownership interest in the
Purchased Interest or of the back-up security interest granted pursuant to Section 2.01(d) is
governed by the Uniform Commercial Code as in effect in a jurisdiction of the
United States other than the State of New York, then “UCC” shall mean
the Uniform Commercial Code as in effect from time to time in such other
jurisdiction for purposes of the provisions of this Agreement and any financing
statement relating to such perfection or effect of perfection or
non-perfection.

 

“Vertex” shall have
the meaning set forth in the preamble, and its permitted successors and
assigns.

 

“Vertex Indemnified Party”
shall have the meaning set forth in Section 7.05(b).

 

6

 

Information redacted pursuant to
a confidential treatment request.  An
unredacted version 

of this exhibit has been filed separately with the Commission.

 

ARTICLE II

PURCHASE AND SALE OF THE PURCHASED INTEREST

 

Section 2.01         Purchase and Sale.

 

(a)           Subject to the terms and
conditions of this Agreement, on the Effective Date Vertex hereby sells,
assigns, transfers and conveys to the Purchaser and the Purchaser hereby
purchases, acquires and accepts from Vertex all of Vertex’s right, title and
interest in and to the Purchased Interest free and clear of any and all Liens.

 

(b)           Vertex and the Purchaser
intend and agree that the sale, assignment, transfer and conveyance of the
Purchased Interest under this Agreement shall be, and is, a true, absolute and
irrevocable sale and assignment by Vertex to the Purchaser of the Purchased Interest
and that such assignment and sale shall provide the Purchaser with the full
benefits of ownership of the Purchased Interest.  Neither Vertex nor the Purchaser intends the
transactions contemplated hereunder to be, or for any purpose characterized as,
a financing transaction, borrowing or a loan from the Purchaser to Vertex.  Vertex waives any right to contest or
otherwise assert that this Agreement is other than a true, absolute and
irrevocable sale and assignment by Vertex to the Purchaser of the Purchased
Interest under applicable law, which waiver shall be enforceable against Vertex
in any bankruptcy, insolvency or similar proceeding relating to Vertex.  In view of the intention of the parties
hereto that the sale of the Purchased Interest hereunder shall constitute a
true sale thereof rather than a loan secured thereby, Vertex acknowledges and
agrees that it has marked its books and records relating to the Purchased
Interest to indicate the sale thereof to the Purchaser and will note in its
financial statements that the Purchased Interest has been sold to the Purchaser.

 

(c)           Vertex hereby consents to
the Purchaser recording and filing, at the Purchaser’s sole cost and expense,
any financing statements (and continuation statements with respect to such
financing statements when applicable) or other instruments and notices, in such
manner and in such jurisdictions as in the Purchaser’s reasonable determination
are necessary or appropriate to evidence the purchase, acquisition and
acceptance by the Purchaser of the Purchased Interest and to perfect and
maintain the perfection of (i) the Purchaser’s ownership interest in the
Purchased Interest and (ii) the back-up security interest in the Purchased
Interest granted by Vertex to the Purchaser pursuant to
Section 2.01(d).  All
such financing statements and continuation statements shall be in substantially
the form set forth in Exhibit B
with such changes as the Purchaser may reasonably request in furtherance of the
foregoing (the “Financing Statement”).

 

(d)           Notwithstanding that Vertex
and the Purchaser expressly intend for the sale, transfer, assignment and
conveyance of the Purchased Interest to be a true and absolute sale and
assignment, in the event that such sale and assignment shall be characterized
as a secured loan and not a sale or such sale shall for any reason be
ineffective or unenforceable (any of the foregoing being a “Recharacterization”),
then this Agreement shall be deemed to constitute a security agreement under
the UCC and other applicable law.  For
this purpose and without being in derogation of the parties’ intention that the
sale of the Purchased Interest shall constitute a true and absolute sale and
assignment thereof, Vertex hereby grants to the Purchaser a security interest
in all of Vertex’s right, title and interest in and to the Purchased Interest
and all proceeds

 

7

 

Information redacted pursuant to
a confidential treatment request.  An
unredacted version 

of this exhibit has been filed separately with the Commission.

 

thereof, to secure the prompt and complete
payment of a loan deemed to have been made in an amount equal to the Purchase
Price, which security interest shall, upon the filing of a duly prepared
financing statement in the appropriate filing office, be perfected and prior to
all other Liens thereon.  In the case of
any Recharacterization, the Purchaser shall have, in addition to the rights and
remedies which they may have under this Agreement, all other rights and
remedies provided to a secured creditor after default under the UCC and other
applicable law, which rights and remedies shall be cumulative.  In the case of any Recharacterization, each
of Vertex and the Purchaser represents and warrants as to itself that each
remittance of the Milestone Payment or any portion thereof or any other payment
in respect of the Purchased Interest by or on behalf of Vertex to the Purchaser
hereunder will have been (i) in payment of a debt incurred by Vertex in
the ordinary course of business or financial affairs of Vertex and the
Purchaser and (ii) made in the ordinary course of business or financial
affairs of Vertex and the Purchaser.

 

Section 2.02         Entitlement to Payments.

 

(a)           Vertex agrees that the
Purchaser is entitled to the Purchased Interest and the Purchaser may enforce
directly against Janssen the right to payment of any portion of the Milestone
Payment represented by the Purchased Interest when earned upon achievement of
the Milestone Event pursuant to the Janssen Agreement.

 

(b)           For avoidance of doubt, the
parties hereto understand and agree that if Janssen fails to pay the Milestone
Payment in full when Vertex or the Purchaser reasonably believes the Milestone
Payment is due under the Janssen Agreement, except for any Set-off made by
Janssen against the Milestone Payment (each such unpaid amount, a “Discrepancy”),
then Vertex shall not be obligated to pay to the Purchaser or otherwise
compensate or make the Purchaser whole with respect to any such Discrepancy; provided,
however, that nothing in this Section 2.02(b) shall
limit or affect in any respect the rights of the Purchaser under Section 5.05
or of any Purchaser Indemnified Party under Section 7.05.  Notwithstanding the foregoing, in the event
that the Milestone Payment is not paid in full by Janssen due to Janssen
asserting or effecting a Set-off against the Milestone Payment pursuant to the
Janssen Agreement (whether or not any such Set-off was disclosed hereunder) or
Janssen otherwise does not, following the occurrence of the Milestone Event,
pay the Milestone Payment in full due to any breach by Vertex of the Janssen
Agreement, Vertex shall be liable for, and shall pay the Purchaser the amount
of any such Set-off or Discrepancy on the date the Milestone Payment is paid or
payable to the Purchaser hereunder, which in any event shall not exceed the
amount of the Milestone Payment.  Vertex
shall be entitled to any such amounts that it pays to Purchaser if Janssen
subsequently pays such amount.

 

Section 2.03         Purchase Price.

 

In full consideration for
the sale, assignment, transfer and conveyance of the Purchased Interest, and
subject to the terms and conditions set forth herein, the Purchaser shall pay
to Vertex on the Effective Date, the sum of U.S. $15,528,988 by wire transfer
of immediately available funds to an account designated in writing by Vertex
(the “Purchase Price”).

 

8

 

Information redacted pursuant to
a confidential treatment request.  An
unredacted version 

of this exhibit has been filed separately with the Commission.

 

Section 2.04         No Assumed Obligations.

 

The Purchaser is purchasing,
acquiring and accepting only the Purchased Interest and the contractual rights
and obligations set forth in this Agreement and is not assuming any liability
or obligation of Vertex or any of its Affiliates of whatever nature, whether
presently in existence or arising or asserted hereafter, whether under the
Janssen Agreement or any Transaction Document or otherwise.  All such liabilities and obligations shall be
retained by and remain obligations and liabilities of Vertex or its Affiliates
(the “Excluded Liabilities and Obligations”).

 

Section 2.05         Excluded Assets.

 

Notwithstanding any
provision in this Agreement or any other writing to the contrary, the Purchaser
does not, by purchase, acquisition or acceptance of the rights granted
hereunder or otherwise pursuant to any of the Transaction Documents, purchase,
acquire or accept any assets or contract rights of Vertex under the Janssen
Agreement, including the Retained Milestone Payment, other than the Purchased
Interest, or any other assets or rights of Vertex.  For avoidance of doubt, Vertex retains (i) an
undivided 100% interest in the right to receive the Retained Milestone Payment,
(ii) Vertex’s Pro-Rata Portion of all additional amounts added to the
Milestone Payment under any provision of the Janssen Agreement, including any
interest assessed in connection with a delay in the payment by Janssen of the
Milestone Payment pursuant to Section 9.10 of the Janssen Agreement, (iii) the
right to enforce directly against Janssen the right to payment of all or any
portion of the Retained Milestone Payment when earned upon achievement of
Milestone Event pursuant to the Janssen Agreement, (iv) the right to
transfer or assign entitlement to all or a portion of the Retained Milestone
Payment to third parties, and (v) the other contractual rights related
thereto contained in the Janssen Agreement.

 

Section 2.06         Closing Deliverables.

 

Simultaneous with the
closing of the transactions contemplated hereby on the Effective Date:

 

(a)           Bill of Sale.  Vertex and the Purchaser shall execute, and
deliver to the other party hereto, the Bill of Sale.

 

(b)           Payment Direction.  Vertex shall sign and deliver to the
Purchaser a copy of the irrevocable direction to Janssen to pay the Milestone
Payment evidenced by the Purchased Interest directly to the Purchaser Account
in the form set forth in Exhibit C
(the “Payment Direction”).

 

(c)           Corporate Documents of
Vertex.  An executive officer of Vertex
shall sign and deliver to the Purchaser certificates dated as of the Effective
Date: (i) attaching copies, certified by such officer as true and
complete, of resolutions of the board of directors of Vertex authorizing and
approving the execution, delivery and performance by Vertex of the Transaction
Documents and the transactions contemplated herein and therein; (ii) setting
forth the incumbency of the officer or officers of Vertex who have executed and
delivered the Transaction Documents, including therein a signature specimen of
each officer or officers; (iii) attaching copies, certified by such
officer as true and complete, of each of the articles of organization and
by-laws of Vertex as in effect on the Effective Date; and (iv) attaching
copies, certified by such 

 

9

 

Information redacted pursuant to
a confidential treatment request.  An
unredacted version 

of this exhibit has been filed separately with the Commission.

 

officer as true and complete, of long form
good standing certificates of the appropriate Governmental Authority of Vertex’s
jurisdiction of incorporation, stating that Vertex is in good standing under
the laws of such jurisdiction.

 

(d)           Other Documents and
Financing Statements.  Vertex
shall sign or deliver to the Purchaser such other certificates, documents and
financing statements as the Purchaser may request, including the Financing
Statement, to perfect and maintain the perfection of the Purchaser’s ownership
interest in the Purchased Interest and the back-up security interest granted
pursuant to Section 2.01(d).

 

(e)           The Purchaser shall have received
the opinion of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo PC, transaction
counsel to Vertex, in form and substance satisfactory to the Purchaser and its
counsel to the effect set forth in Exhibit D.

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF VERTEX

 

Vertex hereby represents and
warrants to the Purchaser, as of the Effective Date, the following:

 

Section 3.01         Organization.

 

Vertex is a corporation duly
incorporated, validly existing and in good standing under the laws of The
Commonwealth of Massachusetts.  Vertex
has all corporate powers and all licenses, authorizations, consents and
approvals of all Governmental Authorities required to carry on its business as
now conducted.  Vertex is duly qualified
to do business as a foreign corporation and is in good standing in every
jurisdiction in which the failure to do so would reasonably be expected to
result, individually or in the aggregate, in an Adverse Effect.

 

Section 3.02         Corporate Authorization.

 

Vertex has all necessary
corporate power and authority to enter into, execute and deliver the
Transaction Documents and to perform all of the obligations to be performed by
it hereunder and thereunder and to consummate the transactions contemplated
hereunder and thereunder.  The
Transaction Documents have been, or will be, when executed, duly authorized,
executed and delivered by Vertex, and each Transaction Document constitutes, or
will constitute, when executed, the legal, valid and binding obligation of
Vertex, enforceable against Vertex in accordance with its respective terms,
subject, as to enforcement of remedies, to bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors’ rights
generally or general equitable principles.

 

Section 3.03         Governmental and Third Party Authorization.

 

The execution and delivery
by Vertex of the Transaction Documents, and the performance by Vertex of its
obligations and the consummation by Vertex of any of the transactions
contemplated hereunder and thereunder, do not require any consent, approval,
license, order, authorization or declaration from, notice to, action or
registration by or filing with any Governmental Authority or any Person, except
for (i) the filing of proper financing statements 

 

10

 

Information redacted pursuant to
a confidential treatment request.  An
unredacted version 

of this exhibit has been filed separately with the Commission.

 

under
the UCC (ii) the filing of a Current Report on Form 8-K with the
Securities and Exchange Commission and (iii) the Janssen Consent.  Vertex has obtained prior to its execution
and delivery of this Agreement the consent of Janssen required under Section 15.2
of the Janssen Agreement with respect to the assignment and transfer of all of
Vertex’s right, title and interest in and to the Purchased Interest to the
Purchaser and the consummation of the other transactions contemplated by the
Transaction Documents (the “Janssen Consent”), which consent is in full
force and effect.

 

Section 3.04         Ownership.

 

Vertex is the exclusive
owner of the entire right, title (legal and equitable) and interest in and to
the Purchased Interest, free and clear of all Liens.  Upon the sale, assignment, transfer and
conveyance by Vertex of all of its right, title and interest in and to the
Purchased Interest to the Purchaser, the Purchaser will acquire good and
marketable title to the Purchased Interest free and clear of all Liens.  Upon the filing of an appropriate financing
statement with the office of the Secretary of the Commonwealth of The
Commonwealth of Massachusetts, there will have been duly filed all financing
statements or other similar instruments or documents necessary under the
applicable UCC (or any comparable law) of all applicable jurisdictions to
perfect and maintain the perfection of the Purchaser’s ownership interest in
the Purchased Interest and of the back-up security interest in the Purchased
Interest granted by Vertex to the Purchaser pursuant to Section 2.01(d).

 

Section 3.05         Solvency.

 

Upon the sale of the
Purchased Interest as contemplated by the Transaction Documents, (i) the
fair saleable value of Vertex’s assets will be greater than the sum of its
debts and other obligations, including contingent liabilities, (ii) the
present fair saleable value of Vertex’s assets will be greater than the amount
that would be required to pay its probable liabilities on its existing debts
and other obligations, including contingent liabilities, as they become
absolute and matured, (iii) Vertex will be able to realize upon its assets
and pay its debts and other obligations, including contingent obligations, as
they mature, (iv) Vertex will not have unreasonably small capital with
which to engage in its business, and (v) Vertex will not incur, nor does
it have present plans or intentions to incur, debts or other obligations or
liabilities beyond its ability to pay such debts or other obligations or
liabilities as they become absolute and matured.

 

Section 3.06         No Litigation.

 

There is no (i) action,
suit, arbitration proceeding, claim, investigation or other proceeding (whether
civil, criminal, administrative or investigative) pending or, to the Knowledge
of Vertex, threatened by or against Vertex or any of its Subsidiaries or, to
the Knowledge of Vertex, pending or threatened by or against Janssen, at law or
in equity, or (ii) inquiry or investigation (whether civil, criminal,
administrative or investigative) by or before a Governmental Authority pending
or, to the Knowledge of Vertex, threatened against Vertex or any of its
Subsidiaries or, to the Knowledge of Vertex, pending or threatened against
Janssen, which, in each case with respect to clause (i) or clause (ii) above,
(A) if adversely determined, would reasonably be expected to have,
individually or in the aggregate, an Adverse Effect, or (B) challenges, or
may have the effect of preventing, delaying, making illegal or otherwise
interfering with, any of the transactions contemplated by any of the
Transaction Documents.  To 

 

11

 

Information redacted pursuant to
a confidential treatment request.  An
unredacted version 

of this exhibit has been filed separately with the Commission.

 

the
Knowledge of Vertex, no event has occurred or circumstance exists that may give
rise to or serve as a basis for the commencement of any such action, suit,
arbitration, claim, investigation, proceeding or inquiry.

 

Section 3.07         Compliance with Laws.

 

None of Vertex or any of its
Subsidiaries is (i) in violation of, or has violated or has been given
notice of any violation, or, to the Knowledge of Vertex, is under investigation
with respect to, or has been threatened to be charged with any violation of,
any law, rule, ordinance or regulation of, or any judgment, order, writ,
decree, permit or license granted, issued or entered by, any Governmental
Authority or (ii) subject to any judgment, order, writ, decree, permit or
license granted, issued or entered by any Governmental Authority, in the case
of both clause (i) and clause (ii) above, that would reasonably be
expected to have, individually or in the aggregate, an Adverse Effect.  To the Knowledge of Vertex, no event has
occurred or circumstance exists that (with or without notice or lapse of time,
or both) would constitute or result in a violation by Vertex or any of its
Subsidiaries of, or a failure on the part of Vertex or any of its Subsidiaries
to comply with, any such law, rule, ordinance or regulation of, or any
judgment, order, writ, decree, permit or license granted, issued or entered by,
any Governmental Authority, in each case, that would reasonably be expected to
result, individually or in the aggregate, in an Adverse Effect.

 

Section 3.08         No Conflicts.

 

Neither the execution and
delivery of any of the Transaction Documents nor the performance or
consummation of the transactions contemplated hereby and thereby will: (i) contravene,
conflict with, result in a breach or violation of, constitute a default (with
or without notice or lapse of time, or both) under, or accelerate the performance
provided by, in any respect, (A) any statute, law, rule, ordinance or
regulation of any Governmental Authority, or any judgment, order, writ, decree,
permit, authorization or license of any Governmental Authority, to which Vertex
or any of its Subsidiaries or any of their respective assets or properties may
be subject or bound, (B) any contract, agreement, commitment or instrument
to which Vertex or any of its Subsidiaries is a party or by which Vertex or any
of its Subsidiaries or any of their respective assets or properties is bound or
committed or (C) any provisions of the articles of organization or by-laws
(or other organizational or constitutional documents) of Vertex or any of its
Subsidiaries; (ii) give rise to any right of termination, cancellation or
acceleration of any right or obligation of Vertex or any of its Subsidiaries; (iii) except
as provided in the Transaction Documents, result in the creation or imposition
of any Lien on the Purchased Interest; or (iv) contravene, conflict with,
result in a breach or violation of, constitute a default (with or without
notice or lapse of time, or both) under, give to any other Person the right to
terminate (provided, however, that neither the execution and
delivery of any of the Transaction Documents nor the performance or
consummation of the transactions contemplated hereby and thereby will prevent
Janssen’s ability to terminate the Janssen Agreement under Section 13.2
thereof), or accelerate the performance provided by, in any respect, any
provision of the Janssen Agreement; provided, however, that, in
the case of clause (i)(B) or clause (ii), such contravention, conflict,
breach, violation, default or acceleration would reasonably be expected to
result, individually or in the aggregate, in an Adverse Effect.

 

12

 

Information redacted pursuant to
a confidential treatment request.  An
unredacted version 

of this exhibit has been filed separately with the Commission.

 

Section 3.09         Broker’s Fees.

 

Vertex has not taken any
action that would entitle any Person other than Morgan Stanley & Co.
Incorporated (whose fees shall be paid by Vertex) to any commission or broker’s
fee in connection with the transactions contemplated by the Transaction
Documents.

 

Section 3.10         Subordination.

 

The claims and rights of the
Purchaser created by any Transaction Document in and to the Purchased Interest
are not and shall not, at any time, be subordinated by Vertex to any creditor
of Vertex or any other Person or Governmental Authority.

 

Section 3.11         Janssen Agreement.

 

(a)           Other than the Janssen
Agreement and the Transaction Documents, there is no contract, agreement or
other arrangement (whether written or oral) to which either Vertex or any of
its Subsidiaries is a party or by which any of their respective assets or
properties is bound or committed (i) that creates a Lien on the Purchased
Interest or (ii) the breach, nonperformance, cancellation or termination
of which would reasonably be expected to result, individually or in the
aggregate, in an Adverse Effect.

 

(b)           Vertex has provided the
Purchaser a redacted copy of the Janssen Agreement (with the Ancillary Janssen
Documents redacted) and a true, accurate and complete copy of each
confidentiality agreement relating thereto and the Janssen Consent. The
redacted copy of the Janssen Agreement provided by Vertex to the Purchaser as
described above, together with information that has been publicly disclosed by
Vertex or is otherwise publicly available, in each case, prior to the Effective
Date, contains all of the material provisions of, and information contained in,
the Janssen Agreement with respect to the Purchased Interest.  The redacted portions of the Janssen
Agreement do not contain any provisions that would reasonably be expected to (i) result
in an Adverse Effect or (ii) have a material adverse effect on the timing
or likelihood of achievement of the Milestone Event. The Janssen Agreement
constitutes the entire agreement between Vertex and Janssen (and their
respective Affiliates) relating to the Purchased Interest.

 

(c)           The Janssen Agreement is the
legal, valid and binding obligation of Vertex and, to the Knowledge of Vertex,
Janssen, enforceable against Vertex and, to the Knowledge of Vertex, Janssen in
accordance with its terms, subject, as to enforcement of remedies, to
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors’ rights generally and general equitable principles.  The execution, delivery and performance of
the Janssen Agreement was and is within the corporate powers of Vertex and, to
the Knowledge of Vertex, Janssen.  The
Janssen Agreement was duly authorized by all necessary action on the part of,
and validly executed and delivered by, Vertex and, to the Knowledge of Vertex,
Janssen.  There is no breach or default,
and no event has occurred or circumstance exists that (with or without notice
or lapse of time, or both) would constitute or give rise to a breach or
default, in the performance of the Janssen Agreement by Vertex or, to the
Knowledge of Vertex, Janssen, which breach, default, event or circumstance in
either case would reasonably be expected to result, individually or in the
aggregate, in an Adverse Effect or a material adverse effect on the timing or
likelihood of achievement of the Milestone Event. To the Knowledge of Vertex,
no event has occurred or 

 

13

 

Information redacted pursuant to
a confidential treatment request.  An
unredacted version 

of this exhibit has been filed separately with the Commission.

 

circumstance exists that (with or without
notice or lapse of time, or both) would give either Janssen or Vertex the right
to terminate the Janssen Agreement (except pursuant to Section 13.2
thereof).  From and after the Effective
Date, the Purchaser shall be entitled to enforce directly against Janssen the
right to payment of the Milestone Payment represented by the Purchased Interest
when earned upon achievement of the Milestone Event pursuant to the Janssen
Agreement.

 

(d)           Vertex (i) has not
waived any rights or defaults under the Janssen Agreement and (ii) has not
taken any action or omitted to take any action under the Janssen Agreement, in
each case with respect to clause (i) and clause (ii), that materially
adversely affects the Purchaser’s rights under any of the Transaction
Documents, including Section 2.02
hereof.

 

(e)           Vertex has not received any
notice and has no Knowledge (i) of Janssen’s intention to terminate the
Janssen Agreement, in whole or in part, (ii) of Janssen’s intention to
effectuate a Prohibited Amendment, (iii) of Janssen’s or any other Person’s
or Governmental Authority’s (where applicable) intention to challenge the
validity or enforceability of the Janssen Agreement or the obligation of
Janssen to pay the Milestone Payment under the Janssen Agreement upon
achievement of the Milestone Event or (iv) that Vertex or Janssen is in
default of any of its material obligations under the Janssen Agreement.  Vertex (i) has no intention of
terminating the Janssen Agreement and has not given Janssen any notice of
termination of the Janssen Agreement, in whole or in part, and (ii) has no
intention to effectuate a Prohibited Amendment and has not given Janssen any
request to effectuate a Prohibited Amendment.

 

(f)            Except as provided in
Sections 9.9 and 13.4.1 of the Janssen Agreement, Vertex is not a party to any
agreement providing for or permitting a sharing of, or Set-off against, the
Milestone Payment.

 

(g)           Vertex has all licenses,
authorizations, consents and approvals of all Governmental Authorities required
to exercise its rights and to perform its obligations under the Janssen
Agreement.  The sale by Vertex of Vertex’s
right, title and interest in and to the Purchased Interest to the Purchaser
will not require the approval, consent, ratification, waiver, or other
authorization of Janssen or any other Person or Governmental Authority under
the Janssen Agreement or otherwise and will not constitute a breach of or
default or event of default under the Janssen Agreement or any other agreement
or law.

 

(h)           Vertex has not consented to
an assignment (by operation of law or otherwise) by Janssen of any of Janssen’s
rights or obligations under the Janssen Agreement with respect to the Purchased
Interest, nor does Vertex have Knowledge of any such assignment (by operation
of law or otherwise) by Janssen.

 

(i)            Neither Vertex nor Janssen
has made any claim of indemnification under the Janssen Agreement nor, to the
Knowledge of Vertex, have there been any events or circumstances that would
give rise to a right of such claim by Vertex or Janssen.

 

(j)            Vertex received prior to the
date hereof payment in full from Janssen (without any Set-offs by Janssen) for
the milestone events numbered “1” through (and including) “5” set forth in the
table in Section 9.2.1 of the Janssen Agreement, in each case in the full
amount and within the time set forth in the Janssen Agreement.

 

14

 

Information redacted pursuant to
a confidential treatment request.  An
unredacted version 

of this exhibit has been filed separately with the Commission.

 

(k)           No portion of the Milestone
Payment was payable to Vertex or received by Vertex or any of its Affiliates on
or prior to the date of this Agreement.

 

Section 3.12         No Set-offs.

 

Other than as set forth in Section 9.9
and Section 13.4.1 of the Janssen Agreement, Janssen has no right of
Set-off under any contract (including the Janssen Agreement) or other agreement
against the Milestone Payment payable to Vertex under the Janssen
Agreement.  Janssen has not exercised,
and, to Vertex’s Knowledge, Janssen has not had the right to exercise, and, to
Vertex’s Knowledge, no event or condition exists that, upon notice or passage
of time or both, would reasonably be expected to permit Janssen to exercise,
any Set-off against the Milestone Payment payable to Vertex under the Janssen
Agreement.

 

Section 3.13         UCC Representations and
Warranties.

 

Vertex’s exact legal name
is, and for the immediately preceding 10 years has been, “Vertex
Pharmaceuticals Incorporated”.  The
principal place of business and chief executive office of Vertex for the
immediately preceding 10 years and the office where it keeps its books and
records relating to the Purchased Interest are located at the address(es) set
forth on Schedule 3.13 attached hereto. 
Vertex’s Massachusetts organizational identification number and Federal
Employer Identification Number are as set forth on Schedule 3.13
attached hereto.

 

Section 3.14         Taxes.

 

No deduction or withholding
for or on account of any tax has been made, or was required under applicable
law to be made, from any payment to Vertex under the Janssen Agreement.

 

Section 3.15         Intellectual Property.

 

(a)           Vertex has the right,
whether by ownership or license, to grant Janssen the rights and licenses to
the Vertex intellectual property rights described in the Janssen Agreement,
including the Vertex Patent Rights, the Vertex Know-How, and Vertex’s rights
under Joint Patent Rights (as such terms are defined in the Janssen Agreement),
except where the failure to have such right to license would not reasonably be
expected to have, individually or in the aggregate, an Adverse Effect and to
the Knowledge of Vertex, Janssen has full right and interest in the Janssen intellectual
property rights described in the Janssen Agreement, including the Janssen
Patent Rights, the Janssen Know-How (as such terms are defined in the Janssen
Agreement), and Janssen’s rights under Joint Patent Rights, free and clear of
all Liens, except where the failure to have full right and interest or the
existence of such Liens would not reasonably be expected to have, individually
or in the aggregate, an Adverse Effect.

 

(b)           To the actual knowledge of
any of the Vertex employees or officers listed in the definition of “Knowledge”
herein, no third party owns any intellectual property rights that would
necessarily be infringed, misappropriated or otherwise violated by the
development, manufacture, use, sale or importation of a Compound, Product
Candidate, or Combination Product (as such terms are defined in the Janssen
Agreement).

 

15

 

Information redacted pursuant to
a confidential treatment request.  An
unredacted version 

of this exhibit has been filed separately with the Commission.

 

(c)           Except for the Vertex Patent
Rights, Vertex Know-How, and Vertex’s rights under Joint Patent Rights, Vertex
does not own or control any intellectual property rights that would be
necessary to the achievement by Janssen of the Milestone Event.  Vertex does not own or control any
intellectual property or data resulting from Additional Development Activities
(as defined in the Janssen Agreement).

 

(d)           No claims have been made or,
to the Knowledge of Vertex, threatened against Vertex since the “Effective Date”
of the Janssen Agreement that any Compound, Product Candidate, Product, or
Combination Product or the development, manufacture, use sale or importation
thereof, infringes, misappropriates, or otherwise violates any intellectual
property right of any third party, except where any such claim or claims would
not reasonably be expected to have, individually or in the aggregate, an
Adverse Effect.

 

(e)           To the Knowledge of Vertex,
no claims have been made or threatened against Janssen since the “Effective
Date” of the Janssen Agreement that any Compound, Product Candidate, Product,
or Combination Product or any use thereof by Janssen, infringes,
misappropriates, or otherwise violates any intellectual property right of any
third party, except where any such claim or claims would not reasonably be
expected to have, individually or in the aggregate, an Adverse Effect.

 

(f)            To the actual knowledge of
any of the Vertex employees or officers listed in the definition of “Knowledge”
herein, Janssen is currently not infringing, misappropriating, or otherwise
violating in any respect any of Vertex’s intellectual property rights relating
to the Compound or Product Candidate.

 

(g)           To the Knowledge of Vertex,
the Vertex Patent Rights and Vertex’s interest in any Joint Patent Rights are
valid and enforceable, and no third party is currently challenging, or has
challenged, the validity or enforceability of any Vertex Patent Rights, Vertex
Know-How, Vertex’s rights under Joint Patent Rights, Janssen Patent Rights,
Janssen Know-How or Janssen’s rights under Joint Patent Rights in any respect,
except where any such invalidity, unenforceability or challenge to validity or
enforceability would not reasonably be expected to have, individually or in the
aggregate, an Adverse Effect.

 

(h)           All of the representations
and warranties made by Vertex, in the Janssen Agreement were accurate and
complete in all material respects as of the “Effective Date” of the Janssen
Agreement, in each case subject to any qualifiers set forth therein.

 

Section 3.16         Certain Information.

 

Notwithstanding Section 4.07, all information provided or
made available by or on behalf of Vertex or any of its Affiliates or
representatives to L.E.K. Consulting LLC or any of its Affiliates or
representatives in connection with the report prepared by L.E.K. Consulting LLC
entitled “Telaprevir Milestone Assessment” dated July 8, 2009 (the “Report”),
was, on the date so provided or made available to L.E.K. Consulting LLC, and is
as of the Effective Date, true and correct in all material respects.

 

16

 

Information redacted pursuant to
a confidential treatment request.  An
unredacted version 

of this exhibit has been filed separately with the Commission.

 

Section 3.17         Consolidation.

 

As of the Effective Date,
Vertex does not believe that the Securities and Exchange Commission or GAAP
requires Vertex to report its financial results on a consolidated basis with
the financial results of the Purchaser as a result of Vertex entering into this
Agreement or consummating the transactions contemplated by this Agreement.

 

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

 

The Purchaser hereby
represents and warrants to Vertex, as of the Effective Date, the following:

 

Section 4.01         Organization.

 

The Purchaser is a société
anonyme, duly formed, validly existing and in good standing under the laws of
the Grand Duchy of Luxembourg.  The
Purchaser has all necessary powers and all licenses, authorizations, consents
and approvals of all Governmental Authorities required to carry on its business
as now conducted and to execute and deliver, and perform its obligations under,
the Transaction Documents.

 

Section 4.02         Authorization.

 

The Purchaser has all
necessary power and authority to enter into, execute and deliver the
Transaction Documents and to perform all of the obligations of the Purchaser to
be performed by it hereunder and thereunder and to consummate the transactions
contemplated hereunder and thereunder.  The Transaction Documents have been, or will
be, when executed, duly authorized, executed and delivered by the Purchaser,
and each Transaction Document constitutes, or will constitute, when executed,
the legal, valid and binding obligation of the Purchaser, enforceable against
the Purchaser in accordance with its respective terms, subject, as to
enforcement of remedies, to bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting creditors’ rights generally or general equitable
principles.

 

Section 4.03         Governmental and Third Party
Authorization.

 

The execution and delivery
by the Purchaser of the Transaction Documents, and the performance by the
Purchaser of its obligations and the consummation of any of the transactions
contemplated hereunder and thereunder, do not require any consent, approval,
license, order, authorization or declaration from, notice to, action or
registration by or filing with any Governmental Authority or any other Person.

 

Section 4.04         No Litigation.

 

There is no (i) action,
suit, arbitration proceeding, claim, investigation or other proceeding (whether
civil, criminal, administrative or investigative) pending, or, to the knowledge
of the Purchaser, threatened by or against the Purchaser, at law or in equity,
or (ii) inquiry or investigation (whether civil, criminal, administrative
or investigative) by or before a Governmental Authority pending or, to the
knowledge of the Purchaser, threatened against the

 

17

 

Information redacted pursuant to
a confidential treatment request.  An
unredacted version 

of this exhibit has been filed separately with the Commission.

 

Purchaser,
which, in each case with respect to clause (i) or clause (ii) above, (A) if
adversely determined would reasonably be expected to have, individually or in
the aggregate, a material adverse effect on (x) the right or ability of
the Purchaser to perform any of its obligations under any of the Transaction
Documents or to consummate the transactions contemplated hereunder or
thereunder or (y) the rights or remedies of Vertex and its Affiliates
under any of the Transaction Documents, or an adverse effect on the legality,
validity or enforceability of any of the Transaction Documents, (B) challenges,
or may have the effect of preventing, delaying, making illegal or otherwise
interfering with, any of the transactions contemplated by any of the
Transaction Documents.

 

Section 4.05         No Conflicts.

 

Neither the execution and
delivery of any of the Transaction Documents nor the performance or
consummation of the transactions contemplated hereby or thereby will
contravene, conflict with, result in a breach or violation of, constitute a
default (with or without notice or lapse of time, or both) under, or accelerate
the performance provided by, in any respect, (i) any statute, law, rule,
ordinance or regulation of any Governmental Authority, or any judgment, order,
writ, decree, permit or license of any Governmental Authority, to which the
Purchaser or any of its assets or properties may be subject or bound, (ii) any
contract, agreement, commitment or instrument to which the Purchaser is a party
or by which the Purchaser or any of its assets or properties is bound or
committed or (iii) any provisions of the organizational or constitutional
documents of the Purchaser, except in the case of clause (ii) above, as
would not reasonably be expected to have, individually or in the aggregate, a
material adverse effect on the right or ability of the Purchaser to perform any
of its obligations under any of the Transaction Documents or to consummate the
transactions contemplated hereunder or thereunder.

 

Section 4.06         Broker’s Fees.

 

The Purchaser has not taken
any action that would entitle any Person to any commission or broker’s fee in
connection with the transactions contemplated by the Transaction Documents.

 

Section 4.07         Access to Information.

 

The Purchaser acknowledges
that it has (i) reviewed a redacted copy of the Janssen Agreement (with,
for the avoidance of doubt, the Ancillary Janssen Documents redacted) and the
Report (in reliance on the representations and warranties of Vertex set forth
herein, including Section 3.11(b)) and
(ii) had the opportunity to ask questions of, and to receive answers from,
representatives of Vertex concerning the Janssen Agreement and the Milestone
Payment.  The Purchaser has such
knowledge, sophistication and experience in financial and business matters that
it is capable of evaluating the risks and merits of purchasing, acquiring and
accepting the Purchased Interest in accordance with the terms of this
Agreement. The Purchaser acknowledges and agrees that (i) the Report was
furnished to the Purchaser by Vertex for the Purchaser’s convenience, (ii) the
Report was not prepared by Vertex, (iii) Vertex did not, and does not,
adopt or endorse the contents of the Report, (iv) the Report constitutes
the work product solely of L.E.K. Consulting LLC and (v) Vertex disclaims
any representation, either express or implied, that the information in the Report
is accurate or that the statements in the Report coincide with Vertex’s views.

 

18

 

Information redacted pursuant to
a confidential treatment request.  An
unredacted version 

of this exhibit has been filed separately with the Commission.

 

ARTICLE V

COVENANTS

 

The parties hereto covenant
and agree as follows:

 

Section 5.01         Confidentiality; Public
Announcement.

 

(a)           Except as otherwise required
by law or the rules and regulations of any securities exchange or trading
system or any Governmental Authority and except as otherwise set forth in this Section 5.01, any party who is provided or
furnished with any Confidential Information (the “Recipient”) will, and
will cause each of its Affiliates, directors, officers, employees, agents,
representatives and similarly situated persons who receive such Confidential
Information to, treat and hold as confidential and not disclose to any Person
or Governmental Authority any and all Confidential Information furnished to it
by the other Party, and to use any such Confidential Information only in
connection with this Agreement and any other Transaction Document and the
transactions contemplated hereby and thereby. 
Notwithstanding the foregoing, the Recipient may disclose such
information on a need-to-know basis to its members, directors, employees,
managers, officers, agents, brokers, advisors, lawyers, bankers, trustees and
representatives (and, in the case of the Purchaser, also its actual and
potential partners or equityholders (or their potential transferees), investors
(including any holder of debt securities of the Purchaser and its agents and
representatives), co-investors, insurers and insurance brokers, underwriters
and financing parties) and potential transferees of the Purchased Interest; provided,
however, that such Persons shall be informed of the confidential nature
of such information and shall be obligated to keep such Confidential
Information confidential pursuant to obligations of confidentiality no less onerous
than those set forth herein.  Other than
information (whether part of a report, notice or otherwise) specifically
required to be provided by Vertex to the Purchaser under this Agreement, Vertex
agrees not to provide the Purchaser with any Confidential Information without
the prior written consent of the Purchaser. 
Notwithstanding anything else to the contrary contained in this
Agreement, if Vertex’s compliance with the prior sentence not to provide the
Purchaser with Confidential Information (other than with respect to information
specifically required to be provided by Vertex to the Purchaser under this
Agreement) causes Vertex to be in breach of another provision of this
Agreement, Vertex shall not be deemed to be in breach of such provision.

 

(b)           Vertex and the Purchaser
acknowledge that each party hereto will not, after the execution of this
Agreement, make a public announcement or filing with respect to the
transactions contemplated by the Transaction Documents or reference or describe
such transactions in an public announcement or filing, without the Purchaser or
Vertex, as applicable, having a reasonable prior opportunity to review such
public announcement or filing by the other party.  Any public disclosure regarding the
transactions contemplated by the Transaction Documents shall be in a form
mutually acceptable to the Purchaser and Vertex.  Either party hereto may, after compliance
with the foregoing obligations, thereafter disclose any information contained
in such public announcement or filing at any time without the consent of the
other party hereto.

 

(c)           Except as required by
applicable law, rule or regulation, neither Vertex nor any of its
Affiliates shall disclose to any Person or Governmental Authority or use or
include in any

 

19

 

Information redacted pursuant to
a confidential treatment request.  An
unredacted version 

of this exhibit has been filed separately with the Commission.

 

public announcement or any public filing, the
identity of any shareholders, members, directors or Affiliates of the
Purchaser, without the prior written consent of such shareholder, member,
director or Affiliate.

 

(d)           Notwithstanding anything to
the contrary in this Agreement, Vertex shall have no obligation under this
Agreement to provide the Purchaser with any information (whether part of a
report, notice or otherwise) if disclosure by Vertex to the Purchaser of such
information would constitute a breach by Vertex of any confidentiality
obligation to Janssen or any other Person pursuant to the Janssen Agreement, as
in effect on the date hereof.

 

Section 5.02         Further Assurances.

 

The Purchaser and Vertex
agree to execute and deliver such other documents, certificates, agreements and
other writings and to take such other actions as may be necessary or desirable,
or reasonably requested by the other party hereto, in each case at the expense
of the Purchaser, in order to vest and maintain in the Purchaser good and
marketable title in and to the Purchased Interest free and clear of all Liens,
including the perfection and maintenance of perfection of the Purchaser’s
ownership interest in the Purchased Interest and of the back-up security
interest in the Purchased Interest granted by Vertex to the Purchaser pursuant
to Section 2.01(d).

 

Section 5.03         Payments to Vertex on Account of
the Purchased Interest.

 

(a)           Notwithstanding the terms of
the Payment Direction, if Janssen or any other Person makes any payment to
Vertex or any of its Subsidiaries or Affiliates on account of the Purchased
Interest, then Vertex promptly, and in any event no later than three Business
Days following the receipt by Vertex or such Subsidiary or Affiliate of such
payment, shall remit such payment to the Purchaser Account pursuant to Section 5.03(c).

 

(b)           All payments made to Vertex
(or any of its Subsidiaries or Affiliates) on account of the Purchased Interest
shall be held by Vertex (or such Subsidiary or Affiliate) in trust for the
benefit of the Purchaser until remitted to the Purchaser Account pursuant to Section 5.03(c) and Vertex
or its Subsidiaries or Affiliates shall have no right, title or interest
whatsoever in such amounts and shall not create or suffer to exist any Lien
thereon.

 

(c)           Vertex shall make all
payments to be made by Vertex pursuant to Section 2.02(b),
Section 5.03(a) or Section 5.03(b) of this
Agreement by wire transfer of immediately available funds, without Set-off, to
the account set forth on Schedule 5.03(c) hereto (or to such other account
as the Purchaser shall notify Vertex in writing from time to time) (the “Purchaser
Account”).

 

Section 5.04         Janssen Agreement.

 

(a)           Vertex shall not, without
the prior written consent of the Purchaser effectuate a Prohibited Amendment.

 

(b)           Subject to Section 5.01(d),
Vertex will, within five calendar days following the receipt by Vertex from
Janssen of notice received under Section 9.2.2 of the Janssen Agreement of
the occurrence (or deemed occurrence) of the Milestone Event (a “Section 9.2.2
Notice”), (a) 

 

20

 

Information redacted pursuant to
a confidential treatment request.  An
unredacted version 

of this exhibit has been filed separately with the Commission.

 

deliver to the Purchaser a copy of such Section 9.2.2
Notice and (b) invoice Janssen for the full amount of the Milestone
Payment resulting therefrom.

 

(c)           Subject to Section 5.01(d),
if Vertex receives notice from Janssen or any other Person, terminating the
Janssen Agreement, in whole or in part, then Vertex shall no later than ten
Business Days following receipt of such notice give a written notice to the
Purchaser including a copy of any written notice received from Janssen or the
other relevant Person.

 

(d)           Without the prior written
consent of the Purchaser, Vertex shall not, directly or indirectly, sell,
assign, hypothecate or otherwise transfer the Janssen Agreement or any of its
rights or obligations thereunder to any third party, including by operation of
law or otherwise; provided, however, that Vertex may, without the
consent of the Purchaser, directly or indirectly assign the Janssen Agreement
or any of its rights or obligations thereunder to any third party with which it
may merge or consolidate or to which it may sell all or substantially all of
its assets.

 

Section 5.05         Termination of the Janssen
Agreement.

 

If the Janssen Agreement is
terminated, by either Janssen or Vertex, for any reason and the licenses
granted to Janssen under Article 7 of the Janssen Agreement terminate,
Vertex shall pay the Purchaser an amount equal to any portion of the Milestone
Payment that has not been earned prior to the effective date of such
termination of the Janssen Agreement, provided, however, that
Vertex shall owe such payment to the Purchaser only if and when the Milestone
Event is subsequently achieved (either by Vertex, Vertex’s licensee or
successor or an acquiror of Vertex’s assets or rights related thereto).  For the avoidance of doubt, the expiration of
the Janssen Agreement under Section 13.1 thereof shall not be deemed a
termination of the Janssen Agreement.

 

Section 5.06         Notice of Certain Events.

 

(a)           In addition to, and not in
limitation of, the other provisions of this Agreement, Vertex shall provide the
Purchaser with written notice as promptly as practicable (and in any event within
five Business Days) after becoming aware of the occurrence of a Bankruptcy
Event; and

 

(b)           Vertex shall notify the
Purchaser in writing not less than 30 days prior to any change in, or amendment
or alteration of, Vertex’s (i) legal name, (ii) form or type of
organization or corporate structure or (iii) jurisdiction of organization.

 

Section 5.07         Access to Certain Information.

 

(a)           If the Securities and
Exchange Commission or GAAP requires Vertex to report its financial results on
a consolidated basis with the financial results of the Purchaser, the Purchaser
shall, for so long as the Securities and Exchange Commission or GAAP require
such consolidation, use its reasonable best efforts to provide to, and to
cooperate with Vertex or an independent accounting firm engaged by Vertex in
connection with the collection of, financial records and financial information
of the Purchaser as may be reasonably required by Vertex or such accounting
firm.  Vertex shall be responsible for
all costs, fees and expenses in connection

 

21

 

Information redacted pursuant to
a confidential treatment request.  An
unredacted version 

of this exhibit has been filed separately with the Commission.

 

with the preparation of any financial
statements or reports for any period or any audits in connection with the
foregoing, and shall reimburse Purchaser from time to time promptly upon
request for any reasonable costs, fees and expenses incurred by the Purchaser
in connection with this Section 5.07.  For the avoidance of doubt, (i) the
foregoing shall not require the Purchaser to maintain financial information or
records in accordance with GAAP or prepare financial reports for any period;
and (ii) Vertex shall not be responsible for any costs, fees and expenses
in connection with the preparation of any financial statements or reports that
the Purchaser prepares in the ordinary course of its business.

 

(b)           Vertex agrees
that the Purchaser shall have no liability (whether direct or indirect, in
contract or tort or otherwise) to any Vertex Indemnified Party for or in
connection with any of the financial records or financial information provided
by the Purchaser pursuant to Section 5.07(a) hereof except for
Losses incurred by Vertex that are finally judicially determined to have
resulted from actual fraud, gross negligence or willful misconduct on the part
of the Purchaser.

 

ARTICLE VI

TERMINATION

 

Section 6.01         Termination Date.

 

This Agreement shall
terminate on the date upon which the earlier of the following occurs: (i) the
payment to the Purchaser of the Milestone Payment in full pursuant to the terms
of the Transaction Documents; (ii) the expiration of the Janssen
Agreement; or (iii) the termination of the Janssen Agreement where
licenses granted to Janssen under Article 7 of the Janssen Agreement
terminate.

 

Section 6.02         Effect of Termination.

 

In the event of the
termination of this Agreement pursuant to Section 6.01,
this Agreement shall become void and of no further force and effect, except for:
(i) those rights and obligations that have accrued prior to the date of
such termination, including the payment in accordance with the terms hereof of
the Milestone Payment earned prior the date of such termination; (ii) in
the event of termination of this Agreement pursuant to Section 6.01(iii),
the right to payment of the Milestone Payment under Section 5.05,
and Section 5.03, and Section 5.04(b); and (iii) Article I, Article VI
and Article VII and Section 2.02(b) (but
only the last sentence thereof), Section 5.01,
and Section 5.07 (but only for the period ending 45 days after the
end of the calendar quarter in which such termination occurred), shall survive
the termination of this Agreement and there shall be no liability on the part
of any party hereto, any of its Affiliates or controlling Persons or any of
their respective officers, directors, shareholders, members, partners,
controlling Persons, managers, agents or employees, other than as provided for
in this Section 6.02.  Nothing contained in this Section 6.02 shall relieve any party hereto
from liability for any breach of this Agreement that occurs prior to such
termination.

 

22

 

Information redacted pursuant to
a confidential treatment request.  An
unredacted version 

of this exhibit has been filed separately with the Commission.

 

ARTICLE VII

MISCELLANEOUS

 

Section 7.01         Survival.

 

All representations and
warranties made herein and in any other Transaction Document or any
certificates delivered pursuant to this Agreement shall survive the execution
and delivery of this Agreement and shall continue to survive until October 31,
2012; provided, however, that the representations and warranties
contained in Sections  3.08 and 3.11 shall survive until
the date that is one year after termination of this Agreement; provided,
further, however, that the representations and warranties contained
in Sections  3.01, 3.02, 3.03, 3.04, 3.09,
3.10, 3.12 and 3.14 shall survive indefinitely; provided,
further, however, that it is understood and agreed that,
notwithstanding the survival provisions of this Section 7.01,
all of the representations and warranties made by the parties hereto are made
only as of the Effective Date.  The
obligations of (a) Vertex to indemnify and hold harmless any Purchaser
Indemnified Party under Section 7.05
and (b) the Purchaser to indemnify and hold harmless any Vertex
Indemnified Party under Section 7.05,
in each case shall terminate (i) when the applicable representation or
warranty terminates pursuant to this Section 7.01,
with respect to claims made pursuant to Section 7.05(a)(i) and
Section 7.05(b)(i), as applicable, and
(ii) 60 days after the expiration of the applicable statute of limitations
(or waivers or extensions thereof), with respect to claims made pursuant to Section 7.05(a)(ii), Section 7.05(b)(ii),
Section 7.05(b)(iii) or 7.05(b)(iv);
provided, however, that, in each case, such obligations to
indemnify and hold harmless shall not terminate with respect to any item as to
which a Purchaser Indemnified Party or a Vertex Indemnified Party shall have,
before the expiration of the applicable period, previously notified the
indemnifying party pursuant to Section 7.05.

 

Section 7.02         Specific Performance.

 

Each of the parties hereto
acknowledges that the other party hereto may have no adequate remedy at law if
it fails to perform any of its obligations under any of the Transaction
Documents.  In such event, each of the
parties hereto agrees that the other party hereto shall have the right, in
addition to any other rights it may have (whether at law or in equity), to
specific performance of this Agreement. Neither party hereto shall have any
right to terminate this Agreement or any other Transaction Document as a result
of any breach by the other party hereto hereof or thereof, but instead shall
have the rights set forth in this Agreement, including this Article VII.

 

Section 7.03         Notices.

 

All notices, consents,
waivers and communications hereunder given by any party hereto to the other
party hereto shall be in writing, signed by the party hereto giving such notice
and be deemed to have been duly given when (i) delivered by hand, (ii) sent
by facsimile (with written confirmation of receipt) if sent during regular
business hours on a Business Day (and, if not, then on the next succeeding
Business Day), provided, however, that a copy is mailed by
registered mail, return receipt requested, (iii) received by the
addressee, if sent by nationally recognized overnight delivery service (receipt
requested), or (iv) sent by email if sent during regular business hours on
a Business Day (and, if not, then on the next succeeding Business Day), provided,
however, that a copy is mailed by a nationally recognized overnight
delivery service 

 

23

 

Information redacted pursuant to
a confidential treatment request.  An
unredacted version 

of this exhibit has been filed separately with the Commission.

 

(provided,
however, that delivery will not be deemed effective unless the addressee
provides written confirmation of receipt by facsimile or return email
(automatic email responses do not constitute confirmation)), in each case, to
the applicable addresses, facsimile numbers and/or email addresses set forth
below:

 

If
to the Purchaser to:

 

Olmsted Park S.A.

20, rue de la Poste

L-2346 Luxembourg

Attention: Board of Directors

 

with a copy (which shall not
constitute notice) to:

 

Akin Gump Strauss Hauer &
Feld LLP

One Bryant Park

New York, NY 10036

Attention: Stuart E. Leblang

Facsimile: (212) 872-1002

Email: sleblang@akingump.com

 

If
to Vertex to:

 

Vertex Pharmaceuticals
Incorporated

130 Waverly Street

Cambridge, MA 02139

Attention:   Philippe Tinmouth

     Head, Business Development &
Licensing

Facsimile: 617-444-6632

Email: phil_tinmouth@vrtx.com

 

with
a copy (which shall not constitute notice) to:

 

Vertex Pharmaceuticals
Incorporated

130 Waverly Street

Cambridge, MA 02139

Attention:   Kenneth S. Boger, Esq.

     Senior Vice President and General Counsel

Facsimile: 617-444-7117

Email: ken_boger@vrtx.com

 

or to such other address or
addresses, facsimile number or numbers or email address or addresses as the
Purchaser or Vertex may from time to time designate by notice as provided
herein, except that notices of such changes shall be effective only upon
receipt.

 

24

 

Information redacted pursuant to
a confidential treatment request.  An
unredacted version 

of this exhibit has been filed separately with the Commission.

 

Section 7.04         Successors and Assigns.

 

The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted assigns.  Neither party shall be entitled to assign,
directly or indirectly, any of its obligations and rights under any of the
Transaction Documents, including by operation of law or otherwise, without the
prior written consent of the other party; provided, however, that
(i) Vertex may, without the consent of the Purchaser, assign any of its
obligations or rights under the Transaction Documents to any other Person with
which it may merge or consolidate or to which it may sell all or substantially
all of its assets, provided that the assignee under such assignment
agrees to be bound by the terms of the Transaction Documents and furnishes a
written agreement to the Purchaser in form and substance reasonably
satisfactory to the Purchaser to that effect, and (ii) Purchaser may
assign this Agreement in its entirety without the consent of Vertex, provided,
however, that the Purchaser shall give notice of any such assignment to
Vertex after the occurrence thereof. 
Vertex shall be under no obligation to reaffirm any representations,
warranties or covenants made in this Agreement or any of the other Transaction
Documents or take any other action in connection with any such assignment by
the Purchaser.

 

Section 7.05         Indemnification.

 

(a)           Vertex hereby agrees to
indemnify and hold harmless each of the Purchaser and its Affiliates and any
and all of their respective partners, directors, managers, members, officers,
employees, agents and controlling Persons (each, a “Purchaser Indemnified
Party”) from and against, and will pay to each Purchaser Indemnified Party
the amount of, any and all Losses incurred or suffered by such Purchaser
Indemnified Party arising out of (i) any breach of any representation,
warranty or certification made by Vertex in any of the Transaction Documents or
certificates given by Vertex in writing pursuant hereto or thereto, (ii) any
breach of or default under any covenant or agreement by Vertex pursuant to any
Transaction Document, and (iii) any fees, expenses, costs, liabilities or
other amounts incurred or owed by Vertex to any brokers, financial advisors or
comparable other Persons retained or employed by it in connection with the
transactions contemplated by this Agreement. 
Any amounts due to any Purchaser Indemnified Party hereunder shall be
payable by Vertex to such Purchaser Indemnified Party promptly upon demand.

 

(b)           The Purchaser agrees to
indemnify and hold harmless each of Vertex and its Affiliates and any and all
of their respective partners, directors, managers, members, officers,
employees, agents and controlling Persons (each, a “Vertex Indemnified Party”)
from and against, and will pay to each Vertex Indemnified Party the amount of,
any and all Losses incurred or suffered by such Vertex Indemnified Party
arising out of (i) any breach of any representation, warranty or
certification made by the Purchaser in any of the Transaction Documents or
certificates given by the Purchaser in writing pursuant hereto or thereto, (ii) any
breach of or default under any covenant or agreement by the Purchaser pursuant
to any Transaction Document, (iii) any fees, expenses, costs, liabilities
or other amounts incurred or owed by the Purchaser to any brokers, financial
advisors or comparable other Persons retained or employed by it in connection
with the transactions contemplated by this Agreement, and (iv) directly or
indirectly, the use by Vertex of any of the financial records or financial
information provided by the Purchaser pursuant to Section 5.07(a) hereof
to the extent such Losses are finally 

 

25

 

Information redacted pursuant to
a confidential treatment request.  An
unredacted version 

of this exhibit has been filed separately with the Commission.

 

judicially determined to have resulted from
actual fraud, gross negligence or willful misconduct on the part of the
Purchaser.  Any amounts due to any Vertex
Indemnified Party hereunder shall be payable by the Purchaser to such Vertex
Indemnified Party upon demand.

 

(c)           In the event that (i) any
claim, demand, action or proceeding (including any investigation by any
Governmental Authority) shall be brought or alleged by any Person not a party
to this Agreement against an indemnified party in respect of which indemnity is
to be sought against an indemnifying party pursuant to the preceding paragraphs
(each, a “Third Party Claim”) or (ii) any indemnified party under
this Agreement shall have a claim to be indemnified pursuant to the preceding
paragraphs which does not involve a Third Party Claim, the indemnified party
shall, promptly after receipt of notice of the commencement of any such claim,
demand, action or proceeding, notify the indemnifying party in writing of the
commencement of such claim, demand, action or proceeding, enclosing a copy of
all papers served, if any; provided, however, that the omission
to so notify such indemnifying party will not relieve the indemnifying party
from any liability that it may have to any indemnified party under the
foregoing provisions of this Section 7.05
unless, and only to the extent that, such omission actually and materially
prejudiced the indemnifying party or results in the forfeiture of material
substantive rights or defenses by the indemnifying party.  In case any Third Party Claim is brought
against an indemnified party, the indemnifying party will be entitled, at the
indemnifying party’s sole cost and expense, to participate therein and, to the
extent that it may wish, to notify the indemnified party promptly (but no later
than 10 Business Days of receipt of notice thereof) that it elects to assume
the defense thereof, with counsel, contractors and consultants of recognized
standing and competence and reasonably satisfactory to such indemnified party,
and, after such notice of its election to assume the defense, the indemnifying
party will not be liable to such indemnified party under this Section 7.05 for any legal or other expenses
(except as provided in the next sentence) subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation.  In any such
proceeding, an indemnified party shall have the right to retain its own
counsel, but the reasonable fees and expenses of such counsel shall be at the
expense of such indemnified party unless (i) the indemnifying party and
the indemnified party shall have mutually agreed to the retention of such
counsel, (ii) the indemnifying party has assumed the defense of such
proceeding and has failed within a reasonable time to retain counsel reasonably
satisfactory to such indemnified party or (iii) the named parties to any
such proceeding (including any impleaded parties) include both the indemnifying
party and the indemnified party and representation of both parties by the same
counsel would be inappropriate or ineffective due to actual or potential
conflicts of interests between them in the reasonable determination of the
indemnified party based on the advise of outside legal counsel.  The parties agree that the indemnifying party
shall not, in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the reasonable fees and expenses of more than one
separate law firm (in addition to local counsel where necessary) for all such
indemnified parties.  The indemnifying
party shall not be liable for any settlement of any Third Party Claim effected
without its written consent, but, if settled with such consent or if there be a
final judgment for the plaintiff, the indemnifying party agrees to indemnify
the indemnified party from and against any Losses by reason of such settlement
or judgment.  No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement, compromise or discharge of any pending or threatened Third Party
Claim in respect of which any indemnified party is or could have been a party
and indemnity could have been sought hereunder by such indemnified party, 

 

26

 

Information redacted pursuant to
a confidential treatment request.  An
unredacted version 

of this exhibit has been filed separately with the Commission.

 

unless (x) such settlement, compromise
or discharge, as the case may be, (A) includes an unconditional written
release of such indemnified party, in form and substance reasonably
satisfactory to the indemnified party, from all liability on claims that are
the subject matter of such claim or proceeding, (B) does not include any
statement as to an admission of fault, culpability or failure to act by or on
behalf of any indemnified party and (C) does not impose any continuing
obligation, injunctions or restrictions on any indemnified party, encumber any
of the assets of any indemnified party or otherwise adversely affect any
indemnified party potentially affected by such claim or proceeding and (y) the
indemnifying party pays or causes to be paid all amounts arising out of such
settlement, compromise or discharge concurrently with its effectiveness.

 

(d)           Except in the case of fraud
or intentional breach, the indemnification afforded by this Section 7.05 shall be the sole and exclusive
remedy for any and all Losses sustained or incurred by an indemnified party
hereto in connection with the transactions contemplated by the Transaction
Documents, including with respect to any breach of any representation, warranty
or certification made by a party hereto in any of the Transaction Documents or
certificates given by a party hereto in writing pursuant hereto or thereto or
any breach of or default under any covenant or agreement by a party hereto
pursuant to any Transaction Document. 
Notwithstanding anything in this Agreement to the contrary, (i) in
the event of any breach or failure in performance of any covenant or agreement
contained in any Transaction Document, other than Section 5.04(a) of
this Agreement, the breaching party agrees that the non-breaching party may be
entitled to specific performance, injunctive or other equitable relief pursuant
to Section 7.02, (ii) in no event shall Losses include
special, indirect, incidental or consequential damages of the indemnified
party, other than the payment of the Milestone Payment, and (iii) in no
event shall either party, or its employees, officers, directors, agents,
successors or assigns be liable for any Losses in the aggregate greater than
the amount of the Milestone Payment.  For
clarity, neither party hereto shall have any right to terminate this Agreement
or any other Transaction Document as a result of any breach by the other party
hereto hereof or thereof, but instead shall have the rights set forth in this Section 7.05 and Section 7.02.

 

Section 7.06         Independent Nature of
Relationship.

 

(a)           The relationship between
Vertex and the Purchaser is solely that of seller and purchaser, and neither
Vertex nor the Purchaser has any fiduciary or other special relationship with
the other or any of the other’s Affiliates. 
Nothing contained herein or in any other Transaction Document shall be
deemed to constitute Vertex and the Purchaser as a partnership, an association,
a joint venture or other kind of entity or legal form.

 

(b)           No officer or employee of
the Purchaser will be located at the premises of Vertex or any of its
Affiliates.

 

(c)           None of Vertex and/or any of
its Affiliates shall at any time obligate the Purchaser, or impose on the
Purchaser any obligation, in any manner or with respect to any Person not a
party hereto.

 

27

 

Information redacted pursuant to
a confidential treatment request.  An
unredacted version 

of this exhibit has been filed separately with the Commission.

 

Section 7.07         Tax.

 

(a)           Notwithstanding
the accounting treatment thereof, for United States federal, state and local
tax purposes, Vertex and the Purchaser shall treat the transactions
contemplated by the Transaction Documents as a sale for United States federal,
state and local tax purposes, except as provided in Section 7.07(d) below.

 

(b)           Unless there is a change in applicable law or a Final
Determination to the contrary, Vertex shall not take any position or action
that is inconsistent with the position that any payments by Janssen to the
Purchaser as contemplated by the Transaction Documents, including the Milestone
Payment, are not subject to any U.S. withholding taxes pursuant to Sections
1441, 1442, 1445 or 1446 of the Internal Revenue Code of 1986, as amended (the “Code”).  If deduction or withholding by Vertex of any
tax is required by law or a Final Determination from any payments to the
Purchaser as contemplated by the Transaction Documents, including
the Milestone Payment,  any amount so withheld and remitted to taxing authorities
by Vertex and any interest or penalties thereon paid by Vertex shall be treated
for purposes of this Agreement as if paid to the Purchaser and shall reduce the
amount otherwise payable directly to the Purchaser, and if such amount cannot
be subtracted from payments otherwise due to the Purchaser, the Purchaser shall repay
Vertex for any such amounts within 10 Business Days following demand therefor,
which demand shall be not earlier than delivery of the
documentation required by the last sentence of this paragraph.  If Vertex is required by law or a Final Determination to make a deduction or
withholding, it shall make that deduction or withholding and any payment
required in connection with that deduction or withholding within the time
allowed or, if later, promptly upon determination that such payment
is owed, and in the minimum amount required by law.  Within 10 Business Days of making either a
deduction or withholding or any payment required in connection with that
deduction or withholding, Vertex shall deliver to the Purchaser reasonable
evidence that the deduction or withholding has been made or (as
applicable) any appropriate payment has been paid to the relevant taxing
authority. Vertex shall notify the Purchaser as soon as reasonably practicable
after becoming aware that any payments to the Purchaser as contemplated by the
Transaction Documents, including the Milestone Payment, are reasonably likely
to be subject to deduction or withholding for taxes.

 

(c)           Notwithstanding anything to
the contrary contained in the Transaction Documents, in no event shall Vertex
indemnify or hold harmless any Purchaser Indemnified Party for any reduction in
payments to the Purchaser as contemplated by the Transaction Documents,
including the Milestone Payment, attributable to any taxes, except for taxes
imposed on Vertex by the United States or other jurisdictions in which Vertex
is treated as resident for tax purposes that are calculated by reference to the
net income received or receivable by Vertex nor shall such reduction be deemed
a Set-off or Discrepancy under the Transaction Documents or give rise to any
liability or obligation of Vertex to pay the Purchaser the amount of such
reduction under Section 2.02(b) or otherwise.

 

(d)           The parties hereto agree not
to take any position that is inconsistent with the provisions of this Section 7.07 on any tax return or in any
audit or other administrative or judicial proceeding unless (i) the other
party hereto has consented to such actions or (ii) the party hereto that
contemplates taking such an inconsistent position has been advised by nationally
recognized tax counsel in writing that there is no “reasonable basis” (within
the meaning of Treasury 

 

28

 

Information redacted pursuant to
a confidential treatment request.  An
unredacted version 

of this exhibit has been filed separately with the Commission.

 

Regulation Section 1.6662-3(b)(3)) for
the position specified in this Section 7.07
or that such position is an “unreasonable position” within the meaning of Section 6694(a)(2) of
the Code; provided, however, that notwithstanding this Section 7.07(d),
the parties agree not to take any position that is inconsistent with Section 7.07(a) on
any tax return or in any audit or other administrative or judicial proceeding
unless (i) the other party has consented to such actions or (ii) there
is a change in applicable law or a Final Determination to the contrary.  If there is an inquiry by any Governmental
Authority of Vertex or the Purchaser related to this Section 7.07,
the parties hereto shall cooperate with each other in responding to such
inquiry in a reasonable manner consistent with this Section 7.07.

 

(e)           “Final Determination”
means a final administrative decision, a judicial decision or an agreement by
the Purchaser pursuant to Section 7.07(e)(2) or by Vertex
pursuant to Section 7.07(e)(4), that Vertex is required to withhold
taxes from any payments to the Purchaser as contemplated by the Transaction
Documents, including the Milestone Payment, any such decision or agreement to
be conducted in accordance with the following provisions of this Section 7.07(e):

 

(1)           Vertex agrees
to give written notice (the “Initial Notice”) to the Purchaser of any
notice received by Vertex that involves the assertion of any claim, or the
commencement of any audit, suit, action or proceeding relating to withholding
taxes on any payments to the Purchaser contemplated by the Transaction
Documents, including the Milestone Payment, (a “Withholding Tax Claim”)
within 10 days of such receipt or such earlier time as would allow the
Purchaser to timely respond to such Withholding Tax Claim. Vertex will give the
Purchaser such information with respect to the Withholding Tax Claim as the
Purchaser may reasonably request. 
Failure to provide the Purchaser with notice and information with
respect to a Withholding Tax Claim within a sufficient period of time and in
reasonably sufficient detail to allow the Purchaser to effectively contest such
Withholding Tax Claim shall not affect the liability of the Purchaser to Vertex
except to the extent that the Purchaser’s position is actually prejudiced as a
result thereof.

 

(2)           The Purchaser
may, upon written notice to Vertex given within 30 days of receipt of the
Initial Notice, assume and control the defense of any Withholding Tax Claim at
its own cost and expense and with its own counsel and may (i) pursue or
forego any and all administrative appeals, proceedings, hearings and
conferences with any tax authority, or (ii) either (A) consent to
taxes being withheld from the relevant payments, or (B) contest, settle or
compromise the Withholding Tax Claim in any permissible manner.

 

(3)           If the
Purchaser elects to exercise its right to control the defense of any
Withholding Tax Claim pursuant to Section 7.07(e)(2) of this
Agreement, (i) Vertex, its employees and its affiliates shall (A) cooperate
with the Purchaser in connection with such defense of any Withholding Tax Claim
and the pursuit of any related refund, (B) provide the Purchaser (and its
employees and other agents) with any applicable powers of attorney reasonably
requested and (C) take any actions reasonably requested by the Purchaser,
and (ii) the Purchaser shall keep Vertex reasonably informed of all
material developments and events relating to such Withholding Tax Claim, and
permit Vertex to participate in (but not to control) the defense of any such
Withholding Tax Claim 

 

29

 

Information redacted pursuant to
a confidential treatment request.  An
unredacted version 

of this exhibit has been filed separately with the Commission.

 

(including
participation in any relevant meetings and conference calls) at its own cost
and expense and with its own counsel.

 

(4)           Any Withholding
Tax Claim that the Purchaser does not elect to control pursuant to Section 7.07(e)(2) of
this Agreement shall be controlled by Vertex and the Purchaser agrees to
cooperate with Vertex in pursuing such contest, provided, however,
that (i) Vertex shall keep the Purchaser informed of all material
developments and events relating to such Withholding Tax Claim (including
promptly forwarding copies to the Purchaser of any related correspondence) and
shall use reasonable efforts to provide the Purchaser with an opportunity to
review and comment on any material correspondence before Vertex sends such
correspondence to any tax authority, and (ii) the Purchaser, at its own
cost and expense and with its own counsel, shall have the right to participate
in (including in any relevant meetings and conference calls) the defense of
such Withholding Tax Claims.

 

(5)           The Purchaser
and Vertex further agree to furnish or cause to be furnished to each other,
upon request, in a timely manner, such information (including access to books
and records) and assistance relating to Vertex as is reasonably necessary for
the filing of any tax return or refund claim relating to any relevant taxes
withheld or for the defense of any Withholding Tax Claim.

 

(f)            For purposes of this Section 7.07,
a “change in applicable law” includes a change in regulations, a change in
judicial interpretation or a change in other controlling legal authority.

 

Section 7.08         Entire Agreement.

 

This Agreement, together
with the Schedule and Exhibits hereto (which are incorporated herein by
reference), and the other Transaction Documents constitute the entire agreement
between the parties hereto with respect to the subject matter hereof and
supersede all prior agreements, understandings and negotiations, both written
and oral, between the parties hereto with respect to the subject matter of this
Agreement. No representation, inducement, promise, understanding, condition or
warranty not set forth herein (or in the Schedule, Exhibits or other
Transaction Documents) has been made or relied upon by either party hereto.  Neither this Agreement, nor any provision
hereof, is intended to confer upon any Person other than the parties hereto any
rights or remedies hereunder.

 

Section 7.09         Governing Law.

 

(a)           This Agreement shall be
construed in accordance with and governed by the laws of the State of New York,
without giving effect to the principles of conflicts of law thereof.

 

(b)           Each of the parties hereto
hereby irrevocably and unconditionally submits, for itself and its property, to
the exclusive jurisdiction of the Supreme Court of the State of New York
sitting in New York County and of the United States District Court of the
Southern District of New York, and any appellate court from any thereof, in any
action or proceeding arising out of or relating to this Agreement, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in such New York State
court or, to the 

 

30

 

Information redacted pursuant to
a confidential treatment request.  An
unredacted version

of this exhibit has been filed separately with the Commission.

 

extent permitted by law, in such federal
court.  Each of the parties hereto agrees
that a final judgment in any such action or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law.

 

(c)           Each of the parties hereto
hereby irrevocably and unconditionally waives, to the fullest extent it may
legally and effectively do so, any objection that it may now or hereafter have
to the laying of venue of any suit, action or proceeding arising out of or
relating to this Agreement in any court referred to in Section 7.09(b).  Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.

 

(d)           Each party hereto
irrevocably consents to service of process in the manner provided for notices
in Section 7.03.  Nothing in this Agreement will affect the
right of any party hereto to serve process in any other manner permitted by
law.

 

Section 7.10         Waiver of Jury Trial.

 

EACH
PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY
OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF THE OTHER PARTY HERETO HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT THE OTHER PARTY HERETO WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT
IT AND THE OTHER PARTY HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT
BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 7.10.

 

Section 7.11         Severability.

 

If one or more provisions of
this Agreement are held to be invalid or unenforceable by a court of competent
jurisdiction, such provision shall be excluded from this Agreement and the
balance of this Agreement shall be interpreted as if such provision were so
excluded and shall remain in full force and effect and be enforceable in
accordance with its terms.  Any provision
of this Agreement held invalid or unenforceable only in part or degree by a
court of competent jurisdiction shall remain in full force and effect to the
extent not held invalid or unenforceable.

 

Section 7.12         Counterparts; Effectiveness.

 

This Agreement may be signed
in any number of counterparts, each of which shall be an original, with the
same effect as if the signatures thereto and hereto were upon the same
instrument.  This Agreement shall become
effective when each party hereto shall have received a counterpart hereof
signed by the other party hereto.  Any
counterpart may be executed by facsimile signature and such facsimile signature
shall be deemed an original.

 

31

 

Information redacted pursuant to
a confidential treatment request.  An
unredacted version 

of this exhibit has been filed separately with the Commission.

 

Section 7.13         Amendments; No Waivers.

 

(a)           Neither this Agreement nor
any term or provision hereof may be amended, supplemented, altered, changed or
modified except with the written consent of the parties hereto.  No waiver of any right hereunder shall be effective
unless such waiver is signed in writing by the party hereto against whom such
waiver is sought to be enforced.

 

(b)           No failure or delay by
either party hereto in exercising any right, power or privilege hereunder shall
operate as a waiver thereof nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege.  The rights
and remedies herein provided shall be cumulative and not exclusive of any
rights or remedies provided by law.

 

Section 7.14         Interpretation.

 

(a)           Except as otherwise provided
or unless the context otherwise requires, whenever used in this Agreement, (i) any
noun or pronoun shall be deemed to include the plural and the singular, (ii) the
use of masculine pronouns shall include the feminine and neuter, (iii) the
terms “include” and “including” shall be deemed to be followed by the phrase “without
limitation”, (iv) the word “or” shall be inclusive and not exclusive, (v) all
references to Sections refer to the Sections of this Agreement, all references
to Schedule refer to the Schedule attached hereto or delivered with this
Agreement, as appropriate, and all references to Exhibits refer to the Exhibits
attached to this Agreement, each of which is made a part of this Agreement for
all purposes, and (vi) each reference to “herein” means a reference to “in
this Agreement”.

 

(b)           The provisions of this
Agreement shall be construed according to their fair meaning and neither for
nor against any party hereto irrespective of which party hereto caused such
provisions to be drafted.  Each of the
parties hereto acknowledges that it has been represented by an attorney in
connection with the preparation and execution of this Agreement.

 

(c)           Unless expressly provided
otherwise, the measure of a period of one month or one year for purposes of
this Agreement shall be that date of the following month or year corresponding
to the starting date, provided, however, that, if no
corresponding date exists, the measure shall be that date of the following
month or year corresponding to the next day following the starting date.  For example, one month following February 18th
is March 18th, and one month following March 31 is May 1.

 

Section 7.15         Expenses.

 

Each of the parties hereto
shall pay all of their own fees and expenses incurred in connection with the
negotiation of and entering into, this Agreement and the other Transaction
Documents, and the consummation of the transactions contemplated hereby and
thereby; provided, however, that Vertex shall reimburse or pay,
promptly upon request from the Purchaser, fifty percent (50%) of the reasonable
and documented fees and expenses of the Purchaser, including reasonable and
documented legal fees and expenses, incurred on behalf of the Purchaser in
connection with the structuring, negotiation and entry into this Agreement and
the other Transaction Documents and the consummation of the transactions
contemplated hereby and thereby up to a maximum of U.S. $250,000.00.

 

32

 

Information redacted pursuant to
a confidential treatment request.  An
unredacted version 

of this exhibit has been filed separately with the Commission.

 

[Signature
page follows]

 

33

 

Information redacted pursuant to
a confidential treatment request.  An
unredacted version 

of this exhibit has been filed separately with the Commission.

 

IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be duly executed by their
respective authorized officers as of the date first above written.

 

	
   

  	
  VERTEX
  PHARMACEUTICALS INCORPORATED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Matthew W. Emmens

  
	
   

  	
  Name:
  

  	
  Matthew
  W. Emmens

  
	
   

  	
  Title:
  

  	
  Chairman,
  President and CEO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  OLMSTED
  PARK S.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Julia Vogelweith

  
	
   

  	
  Name:
  

  	
  Julia
  Vogelweith

  
	
   

  	
  Title:
  

  	
  Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Hille-Paul Schut

  
	
   

  	
  Name:
  

  	
  Hille-Paul
  Schut

  
	
   

  	
  Title:
  

  	
  Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Xavier de Cillia

  
	
   

  	
  Name:
  

  	
  Xavier
  de Cillia

  
	
   

  	
  Title:
  

  	
  DirectorExhibit 10.6

 

EXECUTION COPY

 

Confidential Treatment Requested.

Confidential portions of this document have been redacted and have been
separately filed

with the Commission.

 

 

 

PURCHASE AGREEMENT REGARDING MILESTONE #10

 

Dated as of September 30, 2009

 

by and between

 

VERTEX PHARMACEUTICALS INCORPORATED

 

and

 

OLMSTED PARK S.A.

 

 

Information redacted pursuant to a confidential treatment request.  An unredacted version

of this exhibit has been filed separately with the Commission.

 

TABLE OF
CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I DEFINITIONS

  	
  1

  
	
   

  	
   

  	
   

  
	
  Section 1.01

  	
  Definitions

  	
  1

  
	
   

  	
   

  	
   

  
	
  ARTICLE II PURCHASE AND SALE OF THE PURCHASED INTEREST

  	
  6

  
	
  Section 2.01

  	
  Purchase and Sale

  	
  6

  
	
  Section 2.02

  	
  Entitlement to Payments

  	
  8

  
	
  Section 2.03

  	
  Purchase Price

  	
  8

  
	
  Section 2.04

  	
  No Assumed Obligations

  	
  8

  
	
  Section 2.05

  	
  Excluded Assets

  	
  9

  
	
  Section 2.06

  	
  Closing Deliverables

  	
  9

  
	
   

  	
   

  	
   

  
	
  ARTICLE III REPRESENTATIONS AND WARRANTIES OF VERTEX

  	
  10

  
	
   

  	
   

  	
   

  
	
  Section 3.01

  	
  Organization

  	
  10

  
	
  Section 3.02

  	
  Corporate Authorization

  	
  10

  
	
  Section 3.03

  	
  Governmental and Third Party Authorization

  	
  10

  
	
  Section 3.04

  	
  Ownership

  	
  10

  
	
  Section 3.05

  	
  Solvency

  	
  11

  
	
  Section 3.06

  	
  No Litigation

  	
  11

  
	
  Section 3.07

  	
  Compliance with Laws

  	
  11

  
	
  Section 3.08

  	
  No Conflicts

  	
  12

  
	
  Section 3.09

  	
  Broker’s Fees

  	
  12

  
	
  Section 3.10

  	
  Subordination

  	
  12

  
	
  Section 3.11

  	
  Janssen Agreement

  	
  13

  
	
  Section 3.12

  	
  No Set-offs

  	
  14

  
	
  Section 3.13

  	
  UCC Representations and Warranties

  	
  15

  
	
  Section 3.14

  	
  Taxes

  	
  15

  
	
  Section 3.15

  	
  Intellectual Property

  	
  15

  
	
  Section 3.16

  	
  Certain Information

  	
  16

  
	
  Section 3.17

  	
  Consolidation

  	
  16

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

  	
  17

  
	
   

  	
   

  	
   

  
	
  Section 4.01

  	
  Organization

  	
  17

  
	
  Section 4.02

  	
  Authorization

  	
  17

  
	
  Section 4.03

  	
  Governmental and Third Party Authorization

  	
  17

  
	
  Section 4.04

  	
  No Litigation

  	
  17

  
	
  Section 4.05

  	
  No Conflicts

  	
  18

  
	
  Section 4.06

  	
  Broker’s Fees

  	
  18

  
	
  Section 4.07

  	
  Access to Information

  	
  18

  

 

i

 

Information
redacted pursuant to a confidential treatment request.  An unredacted version

of this exhibit has been filed separately with the Commission.

 

	
  ARTICLE V COVENANTS

  	
  18

  
	
   

  	
   

  	
   

  
	
  Section 5.01

  	
  Confidentiality; Public Announcement

  	
  19

  
	
  Section 5.02

  	
  Further Assurances

  	
  20

  
	
  Section 5.03

  	
  Payments to Vertex on Account of the Purchased Interest

  	
  20

  
	
  Section 5.04

  	
  Janssen Agreement

  	
  20

  
	
  Section 5.05

  	
  Termination of the Janssen Agreement

  	
  21

  
	
  Section 5.06

  	
  Notice of Certain Events

  	
  21

  
	
  Section 5.07

  	
  Access to Certain Information

  	
  21

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI TERMINATION

  	
  22

  
	
   

  	
   

  	
   

  
	
  Section 6.01

  	
  Termination Date

  	
  22

  
	
  Section 6.02

  	
  Effect of Termination

  	
  22

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII MISCELLANEOUS

  	
  23

  
	
   

  	
   

  	
   

  
	
  Section 7.01

  	
  Survival

  	
  23

  
	
  Section 7.02

  	
  Specific Performance

  	
  23

  
	
  Section 7.03

  	
  Notices

  	
  23

  
	
  Section 7.04

  	
  Successors and Assigns

  	
  25

  
	
  Section 7.05

  	
  Indemnification

  	
  25

  
	
  Section 7.06

  	
  Independent Nature of Relationship

  	
  27

  
	
  Section 7.07

  	
  Tax

  	
  28

  
	
  Section 7.08

  	
  Entire Agreement

  	
  30

  
	
  Section 7.09

  	
  Governing Law

  	
  30

  
	
  Section 7.10

  	
  Waiver of Jury Trial

  	
  31

  
	
  Section 7.11

  	
  Severability

  	
  31

  
	
  Section 7.12

  	
  Counterparts; Effectiveness

  	
  31

  
	
  Section 7.13

  	
  Amendments; No Waivers

  	
  32

  
	
  Section 7.14

  	
  Interpretation

  	
  32

  
	
  Section 7.15

  	
  Expenses

  	
  32

  

 

	
  SCHEDULES

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule
  3.13 Vertex’s Address and Identification Numbers

  	
   

  
	
  Schedule
  5.03(c) Purchaser Account Information

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBITS

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit A

  	
  Form of
  Bill of Sale

  	
   

  
	
  Exhibit B

  	
  Form of
  Financing Statement

  	
   

  
	
  Exhibit C

  	
  Form of
  Payment Direction

  	
   

  
	
  Exhibit D

  	
  Form of
  Legal Opinion of Vertex’s Counsel

  	
   

  

 

ii

 

Information redacted pursuant to a confidential treatment request.  An unredacted version

of this exhibit has been filed separately with the Commission.

 

PURCHASE AGREEMENT REGARDING MILESTONE #10

 

This PURCHASE AGREEMENT
REGARDING MILESTONE #10 (this “Agreement”) is made and
entered into as of September 30, 2009 (the “Effective Date”) by and
between Vertex Pharmaceuticals Incorporated, a Massachusetts corporation (“Vertex”),
and Olmsted Park S.A., a société anonyme governed by the laws of the Grand
Duchy of Luxembourg (the “Purchaser”).

 

WHEREAS, Vertex has
the right to receive a payment based on the achievement of a certain milestone
under the Janssen Agreement described herein; and

 

WHEREAS, Vertex wishes
to sell, assign, convey and transfer to the Purchaser, and the Purchaser wishes
to purchase, acquire and accept from Vertex, the Purchased Interest described
herein, upon and subject to the terms and conditions hereinafter set forth;

 

NOW, THEREFORE, in
consideration of the mutual covenants, agreements representations and
warranties set forth herein, the parties hereto agree as follows:

 

ARTICLE I

DEFINITIONS

 

Section 1.01         Definitions.

 

The following terms, as used herein, shall
have the following meanings:

 

“Adverse Effect” shall mean (i) an
adverse effect on: (a) the legality, validity or enforceability of any of
the Transaction Documents, the Janssen Agreement or the back-up security
interest granted pursuant to Section 2.01(d);
(b) the amount of the Milestone Payment; or (c) the timing of the
payment of the Milestone Payment after achievement of the Milestone Event; or (ii) a
material adverse effect on: (a) the right or ability of Vertex (or any
permitted successor or assignee) to perform any of its obligations under any of
the Transaction Documents or to consummate the transactions contemplated
hereunder or thereunder; (b) the rights or remedies of the Purchaser under
any of the Transaction Documents; or (c) the right or ability of Janssen
(or any permitted successor or assignee) to perform any of its obligations
under the Janssen Agreement that are related, directly or indirectly, to the
achievement of the Milestone Event.

 

“Affiliate” shall mean any Person that
directly, or indirectly through one or more intermediaries, controls, is
controlled by or is under common control with another Person.  For purposes of this definition, “control”
(or its derivatives) shall mean the possession, direct or indirect, of the power
or ability to direct or cause the direction of the management and policies of a
Person, whether through ownership of equity, voting securities or beneficial
interest, by contract or otherwise.

 

“Agreement” shall have the meaning set
forth in the preamble.

 

 

Information redacted pursuant to a confidential treatment request.  An unredacted version

of this exhibit has been filed separately with the Commission.

 

“Ancillary Janssen Documents” means
the “Global Development Plan,” the “Supply Agreement” and the “Pharmacovigilance
Agreement” as such terms are defined in Sections 1.41, 1.106, and 5.7,
respectively, of the Janssen Agreement.

 

“Bankruptcy Event” shall mean the
occurrence of any of the following:

 

(i)            Vertex
or any of its Subsidiaries shall commence any case, proceeding or other action (a) under
any existing or future law of any jurisdiction, domestic or foreign, relating
to bankruptcy, insolvency, reorganization, relief of debtors or the like,
seeking to have an order for relief entered with respect to it, or seeking to
adjudicate it bankrupt or insolvent, or seeking reorganization, arrangement,
adjustment, winding-up, liquidation, dissolution, composition or other relief
with respect to all or substantially all of its debts, or (b) seeking
appointment of a receiver, trustee, custodian or other similar official for it
or for all or substantially all of its assets, or Vertex or any of its
Subsidiaries shall make a general assignment for the benefit of its creditors;

 

(ii)           there
shall be commenced against Vertex or any of its Subsidiaries any case,
proceeding or other action of a nature referred to in clause (i) above
that remains undismissed or undischarged for a period of 90 calendar days;

 

(iii)          there
shall be commenced against Vertex or any of its Subsidiaries any case,
proceeding or other action seeking issuance of a warrant of attachment,
execution, distraint or similar process against (a) all or any substantial
portion of its assets and/or (b) the Milestone Payment, which results in
the entry of an order for any such relief that shall not have been vacated,
discharged, stayed, satisfied or bonded pending appeal within 45 calendar days
from the entry thereof; or

 

(iv)          Vertex
or any of its Subsidiaries shall take any action in furtherance of, or indicating
its consent to, approval of, or acquiescence in, any of the acts set forth in
clause (i), clause (ii) or clause (iii) above.

 

“Bill of Sale” shall mean the bill of
sale substantially in the form of Exhibit A.

 

“Business Day” shall mean any day other
than a Saturday, a Sunday, any day that is a legal holiday under the laws of
the State of New York, The Commonwealth of Massachusetts or Luxembourg, or any
day on which banking institutions located in the State of New York, The
Commonwealth of Massachusetts or Luxembourg are authorized or required by law
or other governmental action to close.

 

“Code” shall have the meaning set
forth in Section 7.07(b).

 

“Confidential Information” shall mean,
as it relates to any party (or its Affiliates) who provides information (the “Disclosing
Party”) to the other party hereto, all information (whether written or
oral, or in electronic or other form) furnished before or after the Effective
Date concerning, or relating in any way, directly or indirectly, to the
Disclosing Party or its Affiliates (including, in the case of the Purchaser,
any of its equityholders) including the terms, conditions and provisions of
this Agreement and any other Transaction Document, and in the case of 

 

2

 

Information
redacted pursuant to a confidential treatment request.  An unredacted version

of this exhibit has been filed separately with the Commission.

 

information provided by
Vertex or its Affiliates, relating to the Purchased Interest or the Milestone
Payment, including (i) any license, sublicense, assignment, product
development, royalty, sale, supply or other agreements (including the Janssen
Agreement) involving or relating in any way, directly or indirectly, to the
Purchased Interest, the Milestone Payment or the circumstances giving rise to
the Purchased Interest, and including all terms and conditions thereof and the
identities of the parties thereto, (ii) any reports, data, materials or
other documents of any kind relating in any way, directly or indirectly, to the
Disclosing Party or its Affiliates, the Purchased Interest, the Milestone
Payment or the circumstances giving rise to the Purchased Interest, and
including reports, data, materials or other documents of any kind delivered pursuant
to or under any of the agreements referred to in clause (i) above, and (iii) any
inventions, devices, improvements, formulations, discoveries, compositions,
ingredients, patents, patent applications, know-how, processes, trial results,
research, developments or any other intellectual property, trade secrets or
information involving or relating in any way, directly or indirectly, to the
Purchased Interest or the circumstances giving rise to the Purchased
Interest.  Notwithstanding the foregoing
definition, “Confidential Information” shall not include information
that is (v) independently developed or discovered by the Receiving Party
without use of or access to any Confidential Information, as demonstrated by
documentary evidence, (w) already in the public domain at the time the
information is disclosed or has become part of the public domain after such
disclosure through no breach of this Agreement, (x) lawfully obtainable
from other sources, (y) required to be disclosed in any document to be
filed with any Governmental Authority or (z) required to be disclosed by
court or administrative order or under securities laws, rules and
regulations applicable to any party hereto or pursuant to the rules and
regulations of any stock exchange or stock market on which securities of Vertex
or its Affiliates or the Purchaser or its Affiliates may be listed for trading.

 

“Discrepancy” shall have the meaning
set forth in Section 2.02(b).

 

“Effective Date” shall have the
meaning set forth in the preamble.

 

“Excluded Liabilities and Obligations”
shall have the meaning set forth in Section 2.04.

 

“Final Determination” shall have the
meaning set forth in Section 7.07(e).

 

“Financing Statement” shall have the
meaning set forth in Section 2.01(c).

 

“GAAP” means generally accepted
accounting principles in the United States of America as in effect from time to
time, including those set forth in (1) the opinions and pronouncements of
the Accounting Principles Board of the American Institute of Certified Public
Accountants and (2) the statements and pronouncements of the Financial
Accounting Standards Board.

 

“Governmental Authority” shall mean
any government, court, regulatory or administrative agency or commission, or
other governmental authority, agency or instrumentality, whether foreign,
federal, state or local (domestic or foreign).

 

“Janssen” shall mean Janssen
Pharmaceutica, N.V., a Belgium corporation, including its successors and
assigns.

 

3

 

Information redacted pursuant to a confidential treatment request.  An unredacted version

of this exhibit has been filed separately with the Commission.

 

“Janssen Agreement” shall mean the
License, Development, Manufacturing and Commercialization Agreement by and
between Vertex and Janssen effective as of June 30, 2006, as such
agreement is amended and in effect on the date hereof, together with the
Janssen Consent and the Ancillary Janssen Documents, except as expressly set
forth herein, as each may be amended and/or restated from time to time after
the date hereof in accordance with the terms of this Agreement and any new,
substitute or amended agreement by and between Vertex and Janssen relating to
the Milestone Payment made after the date hereof in accordance with the terms
of this Agreement.

 

“Janssen Consent” shall have the
meaning in Section 3.03.

 

“Knowledge” shall mean, with respect
to Vertex, the knowledge of any of the following officers or employees of
Vertex: the Chief Executive Officer; the Chief Medical Officer; the General Counsel;
the Chief Scientific Officer; the Chief Financial Officer; the Chief Commercial
Officer; the Vice President and Corporate Controller; the Head, Business
Development & Licensing; and the Deputy General Counsel.  An individual will be deemed to have “knowledge”
of a particular fact or other matter if (i) such individual has or at any
time had actual knowledge of such fact or other matter or (ii) a prudent
individual would be expected to discover or otherwise become aware of such fact
or other matter in the course of his or her responsibilities in his or her
capacity as an officer or employee of Vertex or in the course of conducting a
reasonably diligent review concerning the existence thereof with any employee
of Vertex or any of its Subsidiaries who, at the Effective Date, reports
directly to such individual and who (x) has responsibilities or (y) would
reasonably be expected to have actual knowledge of circumstances or other
information, in each case, that would reasonably be expected to be pertinent to
such fact or other matter. 
Notwithstanding anything in this definition to the contrary, Vertex will
be deemed to have knowledge of any fact or matter that is the subject of, or
referred to within, any written notice it or any of its Subsidiaries has received
(whether in hard copy, digital or electronic format).

 

“Lien” shall mean any lien,
hypothecation, charge, instrument, license, preference, priority, security
agreement, security interest, mortgage, option, right of first refusal,
privilege, pledge, liability, covenant or order, or any encumbrance,
restriction, right or claim of any other Person or Governmental Authority of
any kind whatsoever, whether choate or inchoate, filed or unfiled, noticed or
unnoticed, recorded or unrecorded, contingent or non-contingent, material or
non-material, known or unknown, other than any of the above created solely in
favor of the Purchaser by the Transaction Documents.

 

“Losses” shall mean, collectively, any
and all claims, damages, losses, judgments, liabilities, costs and expenses
(including reasonable expenses of investigation and reasonable attorneys’ fees
and expenses), excluding punitive damages, except to the extent punitive
damages are paid to a third party.

 

“Milestone Event” shall mean the
milestone event numbered “10” set forth in the table in Section 9.2.1 of
the Janssen Agreement.

 

“Milestone Payment” shall mean
collectively (i) an amount equal to [***] due and
payable to Vertex under Section 9.2.1 of the Janssen Agreement upon the
occurrence of 

 

4

 

Information redacted pursuant to a confidential treatment request.  An unredacted version

of this exhibit has been filed separately with the Commission.

 

Milestone Event due and
payable to Vertex under Section 9.2.1 of the Janssen Agreement upon the
occurrence of Milestone Event; (ii) all additional amounts added to the
Milestone Payment under any provision of the Janssen Agreement, including any
interest assessed in connection with a delay in the payment by Janssen of the
Milestone Payment represented by the Purchased Interest pursuant to Section 9.10
of the Janssen Agreement; (iii) all accounts (as defined under the UCC)
evidencing the rights to the payment and amount described in clauses (i) and
(ii) above; and (iv) all proceeds (as defined under the UCC) of the
foregoing.

 

“Payment Direction” shall have the
meaning set forth in Section 2.06(b).

 

“Person” shall mean an individual,
corporation, partnership, limited liability company, association, trust or
other entity or organization of any kind, but not including a Governmental
Authority.

 

“Prohibited Amendment”
shall mean any amendment, modification, restatement or supplement of any
provision of the Janssen Agreement that changes in any way (i) the event
underlying the Milestone Event, (ii) the amount of the Milestone Payment
or (iii) the timing of the payment of the Milestone Payment by Janssen
after achievement of the Milestone Event by Janssen.  For avoidance of doubt’ any termination of
the Janssen Agreement shall not be deemed a Prohibited Amendment.

 

“Purchased Interest” shall mean
collectively (i) an undivided 100% interest in the right to receive the
Milestone Payment, (ii) the right to enforce directly against Janssen the
right to payment of all or any portion of the Milestone Payment represented by
the Purchased Interest when earned upon achievement of the Milestone Event
pursuant to the Janssen Agreement, and (iii) the right to transfer or
assign entitlement to all or a portion of the Milestone Payment represented by
the Purchased Interest to third parties in accordance with the terms of this
Agreement.

 

“Purchase Price” shall have the
meaning set forth in Section 2.03.

 

“Purchaser” shall have the meaning set
forth in the preamble and shall include its successors and assigns.

 

“Purchaser Account” shall have the
meaning set forth in Section 5.03(c).

 

“Purchaser Indemnified Party” shall
have the meaning set forth in Section 7.05(a).

 

“Recharacterization” shall have the
meaning set forth in Section 2.01(d).

 

“Recipient” shall have the meaning set
forth in Section 5.01(a).

 

“Report” shall have the meaning set
forth in Section 3.16.

 

“Section 9.2.2
Notice” shall have the meaning set forth in Section 5.04(b).

 

“Set-off” shall mean any set-off,
rescission, counterclaim, defense, reduction or deduction of any kind.  Without limiting the generality of the
foregoing, the term Set-off shall 

 

5

 

Information redacted pursuant to a confidential treatment request.  An unredacted version

of this exhibit has been filed separately with the Commission.

 

include the right by Janssen
to reduce the amount of the Milestone Payment for any reason, including without
limitation in connection with (i) a breach by Vertex of the Janssen Agreement,
(ii) any anti stacking or similar rights with respect to payments to third
parties for access to intellectual property rights or data, (iii) any
discounted payment obligations in connection with third party sales of generic
competitive products, (iv) any rights to credit against any payment
obligations any costs, expenses or liabilities of Janssen under the Janssen
Agreement, including with respect to (a) Global Development Costs (as
defined in the Janssen Agreement), (b) any costs and expenses of patent
prosecution, maintenance or enforcement, or (c) defense of third party
infringement claims, or (v) any amounts paid or payable pursuant to any
indemnification rights or obligations of Vertex or Janssen under the Janssen
Agreement.

 

“Subsidiary” or “Subsidiaries”
shall mean with respect to any Person (i) any corporation of which the
outstanding capital stock having at least a majority of votes entitled to be
cast in the election of directors (or, if there are no such voting interests,
50% or more of the equity interests) under ordinary circumstances is at the
time be owned, directly or indirectly, by such Person or by another subsidiary
of such Person or (ii) any other Person of which at least a majority
voting interest (or, if there are no such voting interests, 50% or more of the
equity interests) under ordinary circumstances is at the time owned, directly
or indirectly, by such Person or by another subsidiary of such Person.

 

“Third Party Claim” shall have the
meaning set forth in Section 7.05(c).

 

“Transaction Documents” shall mean,
collectively, this Agreement, the Bill of Sale and the Payment Direction.

 

“UCC” shall mean the Uniform
Commercial Code as in effect from time to time in the State of New York; provided,
however, that, if, with respect to any financing statement or by reason
of any provisions of law, the perfection or the effect of perfection or
non-perfection of the Purchaser’s ownership interest in the Purchased Interest
or of the back-up security interest granted pursuant to Section 2.01(d) is
governed by the Uniform Commercial Code as in effect in a jurisdiction of the
United States other than the State of New York, then “UCC” shall mean
the Uniform Commercial Code as in effect from time to time in such other
jurisdiction for purposes of the provisions of this Agreement and any financing
statement relating to such perfection or effect of perfection or
non-perfection.

 

“Vertex” shall have the meaning set
forth in the preamble, and its permitted successors and assigns.

 

“Vertex Indemnified Party” shall have
the meaning set forth in Section 7.05(b).

 

ARTICLE II

PURCHASE AND SALE OF THE PURCHASED INTEREST

 

Section 2.01         Purchase and Sale.

 

(a) Subject to the terms and conditions of this Agreement, on the
Effective Date Vertex hereby sells, assigns, transfers and conveys to the
Purchaser and the Purchaser hereby 

 

6

 

Information
redacted pursuant to a confidential treatment request.  An unredacted version

of this exhibit has been filed separately with the Commission.

 

purchases, acquires and accepts from Vertex
all of Vertex’s right, title and interest in and to the Purchased Interest free
and clear of any and all Liens.

 

(b)           Vertex and the Purchaser intend and agree that the sale,
assignment, transfer and conveyance of the Purchased Interest under this
Agreement shall be, and is, a true, absolute and irrevocable sale and
assignment by Vertex to the Purchaser of the Purchased Interest and that such
assignment and sale shall provide the Purchaser with the full benefits of
ownership of the Purchased Interest. 
Neither Vertex nor the Purchaser intends the transactions contemplated
hereunder to be, or for any purpose characterized as, a financing transaction,
borrowing or a loan from the Purchaser to Vertex.  Vertex waives any right to contest or
otherwise assert that this Agreement is other than a true, absolute and
irrevocable sale and assignment by Vertex to the Purchaser of the Purchased
Interest under applicable law, which waiver shall be enforceable against Vertex
in any bankruptcy, insolvency or similar proceeding relating to Vertex.  In view of the intention of the parties
hereto that the sale of the Purchased Interest hereunder shall constitute a
true sale thereof rather than a loan secured thereby, Vertex acknowledges and
agrees that it has marked its books and records relating to the Purchased
Interest to indicate the sale thereof to the Purchaser and will note in its
financial statements that the Purchased Interest has been sold to the Purchaser.

 

(c) Vertex hereby consents to the Purchaser recording and filing, at the
Purchaser’s sole cost and expense, any financing statements (and continuation
statements with respect to such financing statements when applicable) or other
instruments and notices, in such manner and in such jurisdictions as in the
Purchaser’s reasonable determination are necessary or appropriate to evidence
the purchase, acquisition and acceptance by the Purchaser of the Purchased
Interest and to perfect and maintain the perfection of (i) the Purchaser’s
ownership interest in the Purchased Interest and (ii) the back-up security
interest in the Purchased Interest granted by Vertex to the Purchaser pursuant
to Section 2.01(d).  All such financing statements and
continuation statements shall be in substantially the form set forth in Exhibit B with such changes as the
Purchaser may reasonably request in furtherance of the foregoing (the “Financing
Statement”).

 

(d)           Notwithstanding that Vertex and the Purchaser expressly
intend for the sale, transfer, assignment and conveyance of the Purchased
Interest to be a true and absolute sale and assignment, in the event that such
sale and assignment shall be characterized as a secured loan and not a sale or
such sale shall for any reason be ineffective or unenforceable (any of the
foregoing being a “Recharacterization”), then this Agreement shall be
deemed to constitute a security agreement under the UCC and other applicable
law.  For this purpose and without being
in derogation of the parties’ intention that the sale of the Purchased Interest
shall constitute a true and absolute sale and assignment thereof, Vertex hereby
grants to the Purchaser a security interest in all of Vertex’s right, title and
interest in and to the Purchased Interest and all proceeds thereof, to secure
the prompt and complete payment of a loan deemed to have been made in an amount
equal to the Purchase Price, which security interest shall, upon the filing of
a duly prepared financing statement in the appropriate filing office, be
perfected and prior to all other Liens thereon. 
In the case of any Recharacterization, the Purchaser shall have, in
addition to the rights and remedies which they may have under this Agreement,
all other rights and remedies provided to a secured creditor after default
under the UCC and other applicable law, which rights

 

7

 

Information redacted pursuant to a confidential treatment request. An
unredacted version

of this exhibit has been filed separately with the Commission.

 

and remedies shall be cumulative. 
In the case of any Recharacterization, each of Vertex and the Purchaser
represents and warrants as to itself that each remittance of the Milestone
Payment or any portion thereof or any other payment in respect of the Purchased
Interest by or on behalf of Vertex to the Purchaser hereunder will have been (i) in
payment of a debt incurred by Vertex in the ordinary course of business or
financial affairs of Vertex and the Purchaser and (ii) made in the
ordinary course of business or financial affairs of Vertex and the Purchaser.

 

Section 2.02         Entitlement to Payments.

 

(a)           Vertex agrees that the Purchaser is entitled to the
Purchased Interest and the Purchaser may enforce directly against Janssen the
right to payment of any portion of the Milestone Payment represented by the
Purchased Interest when earned upon achievement of the Milestone Event pursuant
to the Janssen Agreement.

 

(b)           For avoidance of doubt, the parties hereto
understand and agree that if Janssen fails to pay the Milestone Payment in full
when Vertex or the Purchaser reasonably believes the Milestone Payment is due
under the Janssen Agreement, except for any Set-off made by Janssen against the
Milestone Payment (each such unpaid amount, a “Discrepancy”), then
Vertex shall not be obligated to pay to the Purchaser or otherwise compensate
or make the Purchaser whole with respect to any such Discrepancy; provided,
however, that nothing in this Section 2.02(b) shall
limit or affect in any respect the rights of the Purchaser under Section 5.05
or of any Purchaser Indemnified Party under Section 7.05.  Notwithstanding the foregoing, in the event
that the Milestone Payment is not paid in full by Janssen due to Janssen
asserting or effecting a Set-off against the Milestone Payment pursuant to the
Janssen Agreement (whether or not any such Set-off was disclosed hereunder) or
Janssen otherwise does not, following the occurrence of the Milestone Event,
pay the Milestone Payment in full due to any breach by Vertex of the Janssen
Agreement, Vertex shall be liable for, and shall pay the Purchaser the amount
of any such Set-off or Discrepancy on the date the Milestone Payment is paid or
payable to the Purchaser hereunder, which in any event shall not exceed the
amount of the Milestone Payment.  Vertex
shall be entitled to any such amounts that it pays to Purchaser if Janssen
subsequently pays such amount.

 

Section 2.03         Purchase Price.

 

In full consideration for the sale,
assignment, transfer and conveyance of the Purchased Interest, and subject to
the terms and conditions set forth herein, the Purchaser shall pay to Vertex on
the Effective Date, the sum of U.S. $17,254,431 by wire transfer of immediately
available funds to an account designated in writing by Vertex (the “Purchase
Price”).

 

Section 2.04         No Assumed Obligations.

 

The Purchaser is purchasing, acquiring and
accepting only the Purchased Interest and the contractual rights and
obligations set forth in this Agreement and is not assuming any liability or
obligation of Vertex or any of its Affiliates of whatever nature, whether
presently in existence or arising or asserted hereafter, whether under the
Janssen Agreement or any Transaction Document or otherwise.  All such liabilities and obligations shall be
retained by and remain obligations and liabilities of Vertex or its Affiliates
(the “Excluded Liabilities and Obligations”).

 

8

 

Information
redacted pursuant to a confidential treatment request. An unredacted version

of this exhibit has been filed separately with the Commission.

 

Section 2.05         Excluded Assets.

 

Notwithstanding any provision in this
Agreement or any other writing to the contrary, the Purchaser does not, by
purchase, acquisition or acceptance of the rights granted hereunder or
otherwise pursuant to any of the Transaction Documents, purchase, acquire or
accept any assets or contract rights of Vertex under the Janssen Agreement,
other than the Purchased Interest, or any other assets or rights of Vertex.

 

Section 2.06         Closing Deliverables.

 

Simultaneous with the closing of the
transactions contemplated hereby on the Effective Date:

 

(a)           Bill of Sale.  Vertex and the Purchaser shall execute, and
deliver to the other party hereto, the Bill of Sale.

 

(b)           Payment Direction.  Vertex shall sign and deliver to the
Purchaser a copy of the irrevocable direction to Janssen to pay the Milestone
Payment evidenced by the Purchased Interest directly to the Purchaser Account
in the form set forth in Exhibit C
(the “Payment Direction”).

 

(c)           Corporate Documents of Vertex.  An executive officer of Vertex shall sign and
deliver to the Purchaser certificates dated as of the Effective Date: (i) attaching
copies, certified by such officer as true and complete, of resolutions of the
board of directors of Vertex authorizing and approving the execution, delivery
and performance by Vertex of the Transaction Documents and the transactions
contemplated herein and therein; (ii) setting forth the incumbency of the
officer or officers of Vertex who have executed and delivered the Transaction
Documents, including therein a signature specimen of each officer or officers; (iii) attaching
copies, certified by such officer as true and complete, of each of the articles
of organization and by-laws of Vertex as in effect on the Effective Date; and (iv) attaching
copies, certified by such officer as true and complete, of long form good
standing certificates of the appropriate Governmental Authority of Vertex’s
jurisdiction of incorporation, stating that Vertex is in good standing under
the laws of such jurisdiction.

 

(d)           Other Documents and Financing Statements.  Vertex shall sign or deliver to the Purchaser
such other certificates, documents and financing statements as the Purchaser
may request, including the Financing Statement, to perfect and maintain the
perfection of the Purchaser’s ownership interest in the Purchased Interest and
the back-up security interest granted pursuant to Section 2.01(d).

 

(e)           The Purchaser shall have received the opinion of
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo PC, transaction counsel to
Vertex, in form and substance satisfactory to the Purchaser and its counsel to
the effect set forth in Exhibit D.

 

9

 

Information
redacted pursuant to a confidential treatment request. An unredacted version

of this exhibit has been filed separately with the Commission.

 

ARTICLE
III

REPRESENTATIONS AND WARRANTIES OF VERTEX

 

Vertex hereby represents and warrants to the
Purchaser, as of the Effective Date, the following:

 

Section 3.01         Organization.

 

Vertex is a corporation duly incorporated,
validly existing and in good standing under the laws of The Commonwealth of
Massachusetts.  Vertex has all corporate
powers and all licenses, authorizations, consents and approvals of all
Governmental Authorities required to carry on its business as now
conducted.  Vertex is duly qualified to
do business as a foreign corporation and is in good standing in every
jurisdiction in which the failure to do so would reasonably be expected to
result, individually or in the aggregate, in an Adverse Effect.

 

Section 3.02         Corporate Authorization.

 

Vertex has all necessary corporate power and
authority to enter into, execute and deliver the Transaction Documents and to
perform all of the obligations to be performed by it hereunder and thereunder
and to consummate the transactions contemplated hereunder and thereunder.  The Transaction Documents have been, or will
be, when executed, duly authorized, executed and delivered by Vertex, and each
Transaction Document constitutes, or will constitute, when executed, the legal,
valid and binding obligation of Vertex, enforceable against Vertex in
accordance with its respective terms, subject, as to enforcement of remedies,
to bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors’ rights generally or general equitable principles.

 

Section 3.03         Governmental and Third Party
Authorization.

 

The execution and delivery by Vertex of the
Transaction Documents, and the performance by Vertex of its obligations and the
consummation by Vertex of any of the transactions contemplated hereunder and
thereunder, do not require any consent, approval, license, order, authorization
or declaration from, notice to, action or registration by or filing with any
Governmental Authority or any Person, except for (i) the filing of proper financing
statements under the UCC (ii) the filing of a Current Report on Form 8-K
with the Securities and Exchange Commission and (iii) the Janssen
Consent.  Vertex has obtained prior to
its execution and delivery of this Agreement the consent of Janssen required
under Section 15.2 of the Janssen Agreement with respect to the assignment
and transfer of all of Vertex’s right, title and interest in and to the
Purchased Interest to the Purchaser and the consummation of the other
transactions contemplated by the Transaction Documents (the “Janssen Consent”),
which consent is in full force and effect.

 

Section 3.04         Ownership.

 

Vertex is the exclusive
owner of the entire right, title (legal and equitable) and interest in and to
the Purchased Interest, free and clear of all Liens.  Upon the sale, assignment, transfer and
conveyance by Vertex of all of its right, title and interest in and to the
Purchased Interest to the 

 

10

 

Information
redacted pursuant to a confidential treatment request. An unredacted version

of this exhibit has been filed separately with the Commission.

 

Purchaser, the Purchaser will acquire good
and marketable title to the Purchased Interest free and clear of all
Liens.  Upon the filing of an appropriate
financing statement with the office of the Secretary of the Commonwealth of The
Commonwealth of Massachusetts, there will have been duly filed all financing
statements or other similar instruments or documents necessary under the
applicable UCC (or any comparable law) of all applicable jurisdictions to
perfect and maintain the perfection of the Purchaser’s ownership interest in
the Purchased Interest and of the back-up security interest in the Purchased
Interest granted by Vertex to the Purchaser pursuant to Section 2.01(d).

 

Section 3.05         Solvency.

 

Upon the sale of the Purchased Interest as
contemplated by the Transaction Documents, (i) the fair saleable value of
Vertex’s assets will be greater than the sum of its debts and other
obligations, including contingent liabilities, (ii) the present fair
saleable value of Vertex’s assets will be greater than the amount that would be
required to pay its probable liabilities on its existing debts and other
obligations, including contingent liabilities, as they become absolute and
matured, (iii) Vertex will be able to realize upon its assets and pay its
debts and other obligations, including contingent obligations, as they mature, (iv) Vertex
will not have unreasonably small capital with which to engage in its business,
and (v) Vertex will not incur, nor does it have present plans or
intentions to incur, debts or other obligations or liabilities beyond its
ability to pay such debts or other obligations or liabilities as they become
absolute and matured.

 

Section 3.06         No Litigation.

 

There is no (i) action, suit,
arbitration proceeding, claim, investigation or other proceeding (whether
civil, criminal, administrative or investigative) pending or, to the Knowledge
of Vertex, threatened by or against Vertex or any of its Subsidiaries or, to
the Knowledge of Vertex, pending or threatened by or against Janssen, at law or
in equity, or (ii) inquiry or investigation (whether civil, criminal,
administrative or investigative) by or before a Governmental Authority pending or,
to the Knowledge of Vertex, threatened against Vertex or any of its
Subsidiaries or, to the Knowledge of Vertex, pending or threatened against
Janssen, which, in each case with respect to clause (i) or clause (ii) above,
(A) if adversely determined, would reasonably be expected to have,
individually or in the aggregate, an Adverse Effect, or (B) challenges, or
may have the effect of preventing, delaying, making illegal or otherwise
interfering with, any of the transactions contemplated by any of the Transaction
Documents.  To the Knowledge of Vertex,
no event has occurred or circumstance exists that may give rise to or serve as
a basis for the commencement of any such action, suit, arbitration, claim,
investigation, proceeding or inquiry.

 

Section 3.07         Compliance with Laws.

 

None of Vertex or any of its Subsidiaries is (i) in
violation of, or has violated or has been given notice of any violation, or, to
the Knowledge of Vertex, is under investigation with respect to, or has been
threatened to be charged with any violation of, any law, rule, ordinance or
regulation of, or any judgment, order, writ, decree, permit or license granted,
issued or entered by, any Governmental Authority or (ii) subject to any
judgment, order, writ, decree, permit or license granted, issued or entered by
any Governmental Authority, in the case of both clause (i) 

 

11

 

Information
redacted pursuant to a confidential treatment request. An unredacted version

of this exhibit has been filed separately with the Commission.

 

and clause (ii) above,
that would reasonably be expected to have, individually or in the aggregate, an
Adverse Effect.  To the Knowledge of
Vertex, no event has occurred or circumstance exists that (with or without
notice or lapse of time, or both) would constitute or result in a violation by
Vertex or any of its Subsidiaries of, or a failure on the part of Vertex or any
of its Subsidiaries to comply with, any such law, rule, ordinance or regulation
of, or any judgment, order, writ, decree, permit or license granted, issued or
entered by, any Governmental Authority, in each case, that would reasonably be
expected to result, individually or in the aggregate, in an Adverse Effect.

 

Section 3.08         No Conflicts.

 

Neither the execution and delivery of any of
the Transaction Documents nor the performance or consummation of the
transactions contemplated hereby and thereby will: (i) contravene,
conflict with, result in a breach or violation of, constitute a default (with
or without notice or lapse of time, or both) under, or accelerate the
performance provided by, in any respect, (A) any statute, law, rule,
ordinance or regulation of any Governmental Authority, or any judgment, order,
writ, decree, permit, authorization or license of any Governmental Authority,
to which Vertex or any of its Subsidiaries or any of their respective assets or
properties may be subject or bound, (B) any contract, agreement,
commitment or instrument to which Vertex or any of its Subsidiaries is a party
or by which Vertex or any of its Subsidiaries or any of their respective assets
or properties is bound or committed or (C) any provisions of the articles
of organization or by-laws (or other organizational or constitutional
documents) of Vertex or any of its Subsidiaries; (ii) give rise to any
right of termination, cancellation or acceleration of any right or obligation
of Vertex or any of its Subsidiaries; (iii) except as provided in the
Transaction Documents, result in the creation or imposition of any Lien on the
Purchased Interest; or (iv) contravene, conflict with, result in a breach
or violation of, constitute a default (with or without notice or lapse of time,
or both) under, give to any other Person the right to terminate (provided,
however, that neither the execution and delivery of any of the
Transaction Documents nor the performance or consummation of the transactions
contemplated hereby and thereby will prevent Janssen’s ability to terminate the
Janssen Agreement under Section 13.2 thereof), or accelerate the
performance provided by, in any respect, any provision of the Janssen
Agreement; provided, however, that, in the case of clause (i)(B) or
clause (ii), such contravention, conflict, breach, violation, default or
acceleration would reasonably be expected to result, individually or in the
aggregate, in an Adverse Effect.

 

Section 3.09         Broker’s Fees.

 

Vertex has not taken any action that would
entitle any Person other than Morgan Stanley & Co. Incorporated (whose
fees shall be paid by Vertex) to any commission or broker’s fee in connection
with the transactions contemplated by the Transaction Documents.

 

Section 3.10         Subordination.

 

The claims and rights of the Purchaser
created by any Transaction Document in and to the Purchased Interest are not
and shall not, at any time, be subordinated by Vertex to any creditor of Vertex
or any other Person or Governmental Authority.

 

12

 

Information
redacted pursuant to a confidential treatment request. An unredacted version

of this exhibit has been filed separately with the Commission.

 

Section 3.11         Janssen Agreement.

 

(a)           Other than the Janssen Agreement and the Transaction
Documents, there is no contract, agreement or other arrangement (whether
written or oral) to which either Vertex or any of its Subsidiaries is a party
or by which any of their respective assets or properties is bound or committed (i) that
creates a Lien on the Purchased Interest or (ii) the breach,
nonperformance, cancellation or termination of which would reasonably be
expected to result, individually or in the aggregate, in an Adverse Effect.

 

(b)           Vertex has provided the Purchaser a redacted copy of
the Janssen Agreement (with the Ancillary Janssen Documents redacted) and a
true, accurate and complete copy of each confidentiality agreement relating
thereto and the Janssen Consent. The redacted copy of the Janssen Agreement
provided by Vertex to the Purchaser as described above, together with
information that has been publicly disclosed by Vertex or is otherwise publicly
available, in each case, prior to the Effective Date, contains all of the
material provisions of, and information contained in, the Janssen Agreement
with respect to the Purchased Interest. 
The redacted portions of the Janssen Agreement do not contain any
provisions that would reasonably be expected to (i) result in an Adverse
Effect or (ii) have a material adverse effect on the timing or likelihood
of achievement of the Milestone Event. The Janssen Agreement constitutes the
entire agreement between Vertex and Janssen (and their respective Affiliates)
relating to the Purchased Interest.

 

(c)           The Janssen Agreement is the legal, valid and
binding obligation of Vertex and, to the Knowledge of Vertex, Janssen,
enforceable against Vertex and, to the Knowledge of Vertex, Janssen in
accordance with its terms, subject, as to enforcement of remedies, to
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors’ rights generally and general equitable principles.  The execution, delivery and performance of
the Janssen Agreement was and is within the corporate powers of Vertex and, to
the Knowledge of Vertex, Janssen.  The
Janssen Agreement was duly authorized by all necessary action on the part of,
and validly executed and delivered by, Vertex and, to the Knowledge of Vertex,
Janssen.  There is no breach or default,
and no event has occurred or circumstance exists that (with or without notice
or lapse of time, or both) would constitute or give rise to a breach or default,
in the performance of the Janssen Agreement by Vertex or, to the Knowledge of
Vertex, Janssen, which breach, default, event or circumstance in either case
would reasonably be expected to result, individually or in the aggregate, in an
Adverse Effect or a material adverse effect on the timing or likelihood of
achievement of the Milestone Event. To the Knowledge of Vertex, no event has
occurred or circumstance exists that (with or without notice or lapse of time,
or both) would give either Janssen or Vertex the right to terminate the Janssen
Agreement (except pursuant to Section 13.2 thereof).  From and after the Effective Date, the
Purchaser shall be entitled to enforce directly against Janssen the right to
payment of the Milestone Payment represented by the Purchased Interest when
earned upon achievement of the Milestone Event pursuant to the Janssen
Agreement.

 

(d)           Vertex (i) has not waived any rights or
defaults under the Janssen Agreement and (ii) has not taken any action or
omitted to take any action under the Janssen Agreement, in each case with
respect to clause (i) and clause (ii), that materially adversely affects
the Purchaser’s rights under any of the Transaction Documents, including Section 2.02 hereof.

 

13

 

Information
redacted pursuant to a confidential treatment request. An unredacted version

of this exhibit has been filed separately with the Commission.

 

(e)           Vertex has not received any notice and has no
Knowledge (i) of Janssen’s intention to terminate the Janssen Agreement,
in whole or in part, (ii) of Janssen’s intention to effectuate a
Prohibited Amendment, (iii) of Janssen’s or any other Person’s or
Governmental Authority’s (where applicable) intention to challenge the validity
or enforceability of the Janssen Agreement or the obligation of Janssen to pay
the Milestone Payment under the Janssen Agreement upon achievement of the
Milestone Event or (iv) that Vertex or Janssen is in default of any of its
material obligations under the Janssen Agreement.  Vertex (i) has no intention of
terminating the Janssen Agreement and has not given Janssen any notice of
termination of the Janssen Agreement, in whole or in part, and (ii) has no
intention to effectuate a Prohibited Amendment and has not given Janssen any
request to effectuate a Prohibited Amendment.

 

(f)            Except as provided in Sections 9.9 and 13.4.1 of the
Janssen Agreement, Vertex is not a party to any agreement providing for or
permitting a sharing of, or Set-off against, the Milestone Payment.

 

(g)           Vertex has all licenses, authorizations, consents
and approvals of all Governmental Authorities required to exercise its rights
and to perform its obligations under the Janssen Agreement.  The sale by Vertex of Vertex’s right, title
and interest in and to the Purchased Interest to the Purchaser will not require
the approval, consent, ratification, waiver, or other authorization of Janssen
or any other Person or Governmental Authority under the Janssen Agreement or
otherwise and will not constitute a breach of or default or event of default
under the Janssen Agreement or any other agreement or law.

 

(h)           Vertex has not consented to an assignment (by
operation of law or otherwise) by Janssen of any of Janssen’s rights or
obligations under the Janssen Agreement with respect to the Purchased Interest,
nor does Vertex have Knowledge of any such assignment (by operation of law or
otherwise) by Janssen.

 

(i)            Neither Vertex nor Janssen has made any claim of
indemnification under the Janssen Agreement nor, to the Knowledge of Vertex,
have there been any events or circumstances that would give rise to a right of
such claim by Vertex or Janssen.

 

(j)            Vertex received prior to the date hereof payment in
full from Janssen (without any Set-offs by Janssen) for the milestone events
numbered “1” through (and including) “5” set forth in the table in Section 9.2.1
of the Janssen Agreement, in each case in the full amount and within the time
set forth in the Janssen Agreement.

 

(k)           No portion of the Milestone Payment was payable to
Vertex or received by Vertex or any of its Affiliates on or prior to the date
of this Agreement.

 

Section 3.12         No Set-offs.

 

Other than as set forth in Section 9.9
and Section 13.4.1 of the Janssen Agreement, Janssen has no right of
Set-off under any contract (including the Janssen Agreement) or other agreement
against the Milestone Payment payable to Vertex under the Janssen
Agreement.  Janssen has not exercised,
and, to Vertex’s Knowledge, Janssen has not had the right to exercise, and, to
Vertex’s Knowledge, no event or condition exists that, upon notice or passage
of time or 

 

14

 

Information
redacted pursuant to a confidential treatment request. An unredacted version

of this exhibit has been filed separately with the Commission.

 

both, would reasonably be
expected to permit Janssen to exercise, any Set-off against the Milestone
Payment payable to Vertex under the Janssen Agreement.

 

Section 3.13         UCC Representations and
Warranties.

 

Vertex’s exact legal name is, and for the
immediately preceding 10 years has been, “Vertex Pharmaceuticals Incorporated”.  The principal place of business and chief
executive office of Vertex for the immediately preceding 10 years and the
office where it keeps its books and records relating to the Purchased Interest
are located at the address(es) set forth on Schedule 3.13 attached
hereto.  Vertex’s Massachusetts
organizational identification number and Federal Employer Identification Number
are as set forth on Schedule 3.13 attached hereto.

 

Section 3.14         Taxes.

 

No deduction or withholding for or on account
of any tax has been made, or was required under applicable law to be made, from
any payment to Vertex under the Janssen Agreement.

 

Section 3.15         Intellectual Property.

 

(a)           Vertex has the right, whether by ownership or
license, to grant Janssen the rights and licenses to the Vertex intellectual
property rights described in the Janssen Agreement, including the Vertex Patent
Rights, the Vertex Know-How, and Vertex’s rights under Joint Patent Rights (as
such terms are defined in the Janssen Agreement), except where the failure to
have such right to license would not reasonably be expected to have,
individually or in the aggregate, an Adverse Effect and to the Knowledge of
Vertex, Janssen has full right and interest in the Janssen intellectual
property rights described in the Janssen Agreement, including the Janssen
Patent Rights, the Janssen Know-How (as such terms are defined in the Janssen
Agreement), and Janssen’s rights under Joint Patent Rights, free and clear of
all Liens, except where the failure to have full right and interest or the
existence of such Liens would not reasonably be expected to have, individually
or in the aggregate, an Adverse Effect.

 

(b)           To the actual knowledge of any of the Vertex
employees or officers listed in the definition of “Knowledge” herein, no third
party owns any intellectual property rights that would necessarily be
infringed, misappropriated or otherwise violated by the development, manufacture,
use, sale or importation of a Compound, Product Candidate, or Combination
Product (as such terms are defined in the Janssen Agreement).

 

(c)           Except for the Vertex Patent Rights, Vertex
Know-How, and Vertex’s rights under Joint Patent Rights, Vertex does not own or
control any intellectual property rights that would be necessary to the
achievement by Janssen of the Milestone Event. 
Vertex does not own or control any intellectual property or data
resulting from Additional Development Activities (as defined in the Janssen
Agreement).

 

(d)           No claims have been made or, to the Knowledge of
Vertex, threatened against Vertex since the “Effective Date” of the Janssen
Agreement that any Compound, Product Candidate, Product, or Combination Product
or the development, manufacture, use sale or importation thereof, infringes,
misappropriates, or otherwise violates any intellectual property 

 

15

 

Information
redacted pursuant to a confidential treatment request. An unredacted version

of this exhibit has been filed separately with the Commission.

 

right of any third party, except where any such claim or claims would
not reasonably be expected to have, individually or in the aggregate, an
Adverse Effect.

 

(e)           To the Knowledge of Vertex, no claims have been made
or threatened against Janssen since the “Effective Date” of the Janssen
Agreement that any Compound, Product Candidate, Product, or Combination Product
or any use thereof by Janssen, infringes, misappropriates, or otherwise
violates any intellectual property right of any third party, except where any
such claim or claims would not reasonably be expected to have, individually or
in the aggregate, an Adverse Effect.

 

(f)            To the actual knowledge of any of the Vertex employees
or officers listed in the definition of “Knowledge” herein, Janssen is
currently not infringing, misappropriating, or otherwise violating in any
respect any of Vertex’s intellectual property rights relating to the Compound
or Product Candidate.

 

(g)           To the Knowledge of Vertex, the Vertex Patent Rights
and Vertex’s interest in any Joint Patent Rights are valid and enforceable, and
no third party is currently challenging, or has challenged, the validity or
enforceability of any Vertex Patent Rights, Vertex Know-How, Vertex’s rights
under Joint Patent Rights, Janssen Patent Rights, Janssen Know-How or Janssen’s
rights under Joint Patent Rights in any respect, except where any such
invalidity, unenforceability or challenge to validity or enforceability would not
reasonably be expected to have, individually or in the aggregate, an Adverse
Effect.

 

(h)           All of the representations and warranties made by
Vertex, in the Janssen Agreement were accurate and complete in all material
respects as of the “Effective Date” of the Janssen Agreement, in each case
subject to any qualifiers set forth therein.

 

Section 3.16         Certain Information.

 

Notwithstanding Section 4.07,
all information provided or made available by or on behalf of Vertex or any of
its Affiliates or representatives to L.E.K. Consulting LLC or any of its
Affiliates or representatives in connection with the report prepared by L.E.K.
Consulting LLC entitled “Telaprevir Milestone Assessment” dated July 8,
2009 (the “Report”), was, on the date so provided or made available to
L.E.K. Consulting LLC, and is as of the Effective Date, true and correct in all
material respects.

 

Section 3.17         Consolidation.

 

As of the Effective Date, Vertex does not
believe that the Securities and Exchange Commission or GAAP requires Vertex to
report its financial results on a consolidated basis with the financial results
of the Purchaser as a result of Vertex entering into this Agreement or
consummating the transactions contemplated by this Agreement.

 

16

 

Information
redacted pursuant to a confidential treatment request. An unredacted version

of this exhibit has been filed separately with the Commission.

 

ARTICLE
IV

REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

 

The Purchaser hereby represents and warrants
to Vertex, as of the Effective Date, the following:

 

Section 4.01         Organization.

 

The Purchaser is a société anonyme, duly
formed, validly existing and in good standing under the laws of the Grand Duchy
of Luxembourg.  The Purchaser has all
necessary powers and all licenses, authorizations, consents and approvals of
all Governmental Authorities required to carry on its business as now conducted
and to execute and deliver, and perform its obligations under, the Transaction
Documents.

 

Section 4.02         Authorization.

 

The Purchaser has all necessary power and
authority to enter into, execute and deliver the Transaction Documents and to
perform all of the obligations of the Purchaser to be performed by it hereunder
and thereunder and to consummate the transactions contemplated hereunder and
thereunder.  The Transaction Documents
have been, or will be, when executed, duly authorized, executed and delivered
by the Purchaser, and each Transaction Document constitutes, or will
constitute, when executed, the legal, valid and binding obligation of the
Purchaser, enforceable against the Purchaser in accordance with its respective
terms, subject, as to enforcement of remedies, to bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors’ rights
generally or general equitable principles.

 

Section 4.03         Governmental and Third Party
Authorization.

 

The execution and delivery by the Purchaser
of the Transaction Documents, and the performance by the Purchaser of its
obligations and the consummation of any of the transactions contemplated
hereunder and thereunder, do not require any consent, approval, license, order,
authorization or declaration from, notice to, action or registration by or
filing with any Governmental Authority or any other Person.

 

Section 4.04         No Litigation.

 

There is no (i) action, suit,
arbitration proceeding, claim, investigation or other proceeding (whether
civil, criminal, administrative or investigative) pending, or, to the knowledge
of the Purchaser, threatened by or against the Purchaser, at law or in equity,
or (ii) inquiry or investigation (whether civil, criminal, administrative
or investigative) by or before a Governmental Authority pending or, to the
knowledge of the Purchaser, threatened against the Purchaser, which, in each
case with respect to clause (i) or clause (ii) above, (A) if
adversely determined would reasonably be expected to have, individually or in
the aggregate, a material adverse effect on (x) the right or ability of
the Purchaser to perform any of its obligations under any of the Transaction
Documents or to consummate the transactions contemplated hereunder or
thereunder or (y) the rights or remedies of Vertex and its Affiliates
under any of the Transaction Documents, or an adverse effect on the legality,
validity or enforceability of any of the

 

17

 

Information redacted pursuant to a
confidential treatment request.  An
unredacted version 

of this exhibit has been filed separately with the Commission.

 

Transaction Documents, (B) challenges,
or may have the effect of preventing, delaying, making illegal or otherwise
interfering with, any of the transactions contemplated by any of the
Transaction Documents.

 

Section 4.05         No
Conflicts.

 

Neither the execution and delivery of any of
the Transaction Documents nor the performance or consummation of the transactions
contemplated hereby or thereby will contravene, conflict with, result in a
breach or violation of, constitute a default (with or without notice or lapse
of time, or both) under, or accelerate the performance provided by, in any
respect, (i) any statute, law, rule, ordinance or regulation of any
Governmental Authority, or any judgment, order, writ, decree, permit or license
of any Governmental Authority, to which the Purchaser or any of its assets or
properties may be subject or bound, (ii) any contract, agreement,
commitment or instrument to which the Purchaser is a party or by which the
Purchaser or any of its assets or properties is bound or committed or (iii) any
provisions of the organizational or constitutional documents of the Purchaser,
except in the case of clause (ii) above, as would not reasonably be
expected to have, individually or in the aggregate, a material adverse effect
on the right or ability of the Purchaser to perform any of its obligations
under any of the Transaction Documents or to consummate the transactions
contemplated hereunder or thereunder.

 

Section 4.06         Broker’s
Fees.

 

The Purchaser has not taken any action that
would entitle any Person to any commission or broker’s fee in connection with
the transactions contemplated by the Transaction Documents.

 

Section 4.07         Access
to Information.

 

The Purchaser acknowledges that it has (i) reviewed
a redacted copy of the Janssen Agreement (with, for the avoidance of doubt, the
Ancillary Janssen Documents redacted) and the Report (in reliance on the
representations and warranties of Vertex set forth herein, including Section 3.11(b)) and (ii) had the
opportunity to ask questions of, and to receive answers from, representatives
of Vertex concerning the Janssen Agreement and the Milestone Payment.  The Purchaser has such knowledge,
sophistication and experience in financial and business matters that it is
capable of evaluating the risks and merits of purchasing, acquiring and
accepting the Purchased Interest in accordance with the terms of this
Agreement. The Purchaser acknowledges and agrees that (i) the Report was
furnished to the Purchaser by Vertex for the Purchaser’s convenience, (ii) the
Report was not prepared by Vertex, (iii) Vertex did not, and does not,
adopt or endorse the contents of the Report, (iv) the Report constitutes
the work product solely of L.E.K. Consulting LLC and (v) Vertex disclaims
any representation, either express or implied, that the information in the
Report is accurate or that the statements in the Report coincide with Vertex’s
views.

 

ARTICLE V

COVENANTS

 

The parties hereto covenant and agree as
follows:

 

18

 

Information redacted pursuant to a confidential treatment request.  An unredacted version 

of this exhibit has been filed separately with the Commission.

 

Section 5.01         Confidentiality;
Public Announcement.

 

(a)       Except
as otherwise required by law or the rules and regulations of any
securities exchange or trading system or any Governmental Authority and except
as otherwise set forth in this Section 5.01,
any party who is provided or furnished with any Confidential Information (the “Recipient”)
will, and will cause each of its Affiliates, directors, officers, employees,
agents, representatives and similarly situated persons who receive such
Confidential Information to, treat and hold as confidential and not disclose to
any Person or Governmental Authority any and all Confidential Information
furnished to it by the other Party, and to use any such Confidential
Information only in connection with this Agreement and any other Transaction
Document and the transactions contemplated hereby and thereby.  Notwithstanding the foregoing, the Recipient
may disclose such information on a need-to-know basis to its members,
directors, employees, managers, officers, agents, brokers, advisors, lawyers,
bankers, trustees and representatives (and, in the case of the Purchaser, also
its actual and potential partners or equityholders (or their potential
transferees), investors (including any holder of debt securities of the
Purchaser and its agents and representatives), co-investors, insurers and
insurance brokers, underwriters and financing parties) and potential
transferees of the Purchased Interest; provided, however, that
such Persons shall be informed of the confidential nature of such information
and shall be obligated to keep such Confidential Information confidential
pursuant to obligations of confidentiality no less onerous than those set forth
herein.  Other than information (whether
part of a report, notice or otherwise) specifically required to be provided by
Vertex to the Purchaser under this Agreement, Vertex agrees not to provide the
Purchaser with any Confidential Information without the prior written consent
of the Purchaser.  Notwithstanding
anything else to the contrary contained in this Agreement, if Vertex’s
compliance with the prior sentence not to provide the Purchaser with
Confidential Information (other than with respect to information specifically
required to be provided by Vertex to the Purchaser under this Agreement) causes
Vertex to be in breach of another provision of this Agreement, Vertex shall not
be deemed to be in breach of such provision.

 

(b)       Vertex
and the Purchaser acknowledge that each party hereto will not, after the
execution of this Agreement, make a public announcement or filing with respect
to the transactions contemplated by the Transaction Documents or reference or
describe such transactions in an public announcement or filing, without the
Purchaser or Vertex, as applicable, having a reasonable prior opportunity to
review such public announcement or filing by the other party.  Any public disclosure regarding the
transactions contemplated by the Transaction Documents shall be in a form
mutually acceptable to the Purchaser and Vertex.  Either party hereto may, after compliance
with the foregoing obligations, thereafter disclose any information contained
in such public announcement or filing at any time without the consent of the
other party hereto.

 

(c)       Except
as required by applicable law, rule or regulation, neither Vertex nor any
of its Affiliates shall disclose to any Person or Governmental Authority or use
or include in any public announcement or any public filing, the identity of any
shareholders, members, directors or Affiliates of the Purchaser, without the
prior written consent of such shareholder, member, director or Affiliate.

 

19

 

Information redacted pursuant to a confidential treatment request.  An unredacted version 

of this exhibit has been filed separately with the Commission.

 

(d)       Notwithstanding
anything to the contrary in this Agreement, Vertex shall have no obligation
under this Agreement to provide the Purchaser with any information (whether
part of a report, notice or otherwise) if disclosure by Vertex to the Purchaser
of such information would constitute a breach by Vertex of any confidentiality
obligation to Janssen or any other Person pursuant to the Janssen Agreement, as
in effect on the date hereof.

 

Section 5.02         Further
Assurances.

 

The Purchaser and Vertex agree to execute and
deliver such other documents, certificates, agreements and other writings and
to take such other actions as may be necessary or desirable, or reasonably
requested by the other party hereto, in each case at the expense of the
Purchaser, in order to vest and maintain in the Purchaser good and marketable
title in and to the Purchased Interest free and clear of all Liens, including the
perfection and maintenance of perfection of the Purchaser’s ownership interest
in the Purchased Interest and of the back-up security interest in the Purchased
Interest granted by Vertex to the Purchaser pursuant to Section 2.01(d).

 

Section 5.03         Payments
to Vertex on Account of the Purchased Interest.

 

(a)       Notwithstanding
the terms of the Payment Direction, if Janssen or any other Person makes any
payment to Vertex or any of its Subsidiaries or Affiliates on account of the
Purchased Interest, then Vertex promptly, and in any event no later than three
Business Days following the receipt by Vertex or such Subsidiary or Affiliate
of such payment, shall remit such payment to the Purchaser Account pursuant to Section 5.03(c).

 

(b)       All
payments made to Vertex (or any of its Subsidiaries or Affiliates) on account
of the Purchased Interest shall be held by Vertex (or such Subsidiary or
Affiliate) in trust for the benefit of the Purchaser until remitted to the
Purchaser Account pursuant to Section 5.03(c) and
Vertex or its Subsidiaries or Affiliates shall have no right, title or interest
whatsoever in such amounts and shall not create or suffer to exist any Lien
thereon.

 

(c)       Vertex
shall make all payments to be made by Vertex pursuant to Section 2.02(b),
Section 5.03(a) or Section 5.03(b) of this
Agreement by wire transfer of immediately available funds, without Set-off, to
the account set forth on Schedule 5.03(c) hereto (or to such other account
as the Purchaser shall notify Vertex in writing from time to time) (the “Purchaser
Account”).

 

Section 5.04         Janssen
Agreement.

 

(a)       Vertex
shall not, without the prior written consent of the Purchaser effectuate a
Prohibited Amendment.

 

(b)       Subject
to Section 5.01(d), Vertex will, within five calendar days
following the receipt by Vertex from Janssen of notice received under Section 9.2.2
of the Janssen Agreement of the occurrence (or deemed occurrence) of the
Milestone Event (a “Section 9.2.2 Notice”), (a) deliver to the
Purchaser a copy of such Section 9.2.2 Notice and (b) invoice Janssen
for the full amount of the Milestone Payment resulting therefrom.

 

20

 

Information redacted pursuant to a confidential treatment request.  An unredacted version 

of this exhibit has been filed separately with the Commission.

 

(c)       Subject
to Section 5.01(d), if Vertex receives notice from Janssen or any
other Person, terminating the Janssen Agreement, in whole or in part, then
Vertex shall no later than ten Business Days following receipt of such notice
give a written notice to the Purchaser including a copy of any written notice
received from Janssen or the other relevant Person.

 

(d)       Without
the prior written consent of the Purchaser, Vertex shall not, directly or
indirectly, sell, assign, hypothecate or otherwise transfer the Janssen
Agreement or any of its rights or obligations thereunder to any third party,
including by operation of law or otherwise; provided, however,
that Vertex may, without the consent of the Purchaser, directly or indirectly
assign the Janssen Agreement or any of its rights or obligations thereunder to
any third party with which it may merge or consolidate or to which it may sell
all or substantially all of its assets.

 

Section 5.05         Termination
of the Janssen Agreement.

 

If the Janssen Agreement is terminated, by either
Janssen or Vertex, for any reason and the licenses granted to Janssen under Article 7
of the Janssen Agreement terminate, Vertex shall pay the Purchaser an amount
equal to any portion of the Milestone Payment that has not been earned prior to
the effective date of such termination of the Janssen Agreement, provided,
however, that Vertex shall owe such payment to the Purchaser only if and
when the Milestone Event is subsequently achieved (either by Vertex, Vertex’s
licensee or successor or an acquiror of Vertex’s assets or rights related
thereto).  For the avoidance of doubt,
the expiration of the Janssen Agreement under Section 13.1 thereof shall
not be deemed a termination of the Janssen Agreement.

 

Section 5.06         Notice
of Certain Events.

 

(a)       In
addition to, and not in limitation of, the other provisions of this Agreement,
Vertex shall provide the Purchaser with written notice as promptly as
practicable (and in any event within five Business Days) after becoming aware
of the occurrence of a Bankruptcy Event; and

 

(b)       Vertex
shall notify the Purchaser in writing not less than 30 days prior to any change
in, or amendment or alteration of, Vertex’s (i) legal name, (ii) form
or type of organization or corporate structure or (iii) jurisdiction of
organization.

 

Section 5.07         Access
to Certain Information.

 

(a)           If
the Securities and Exchange Commission or GAAP requires Vertex to report its
financial results on a consolidated basis with the financial results of the
Purchaser, the Purchaser shall, for so long as the Securities and Exchange
Commission or GAAP require such consolidation, use its reasonable best efforts
to provide to, and to cooperate with Vertex or an independent accounting firm
engaged by Vertex in connection with the collection of, financial records and
financial information of the Purchaser as may be reasonably required by Vertex
or such accounting firm.  Vertex shall be
responsible for all costs, fees and expenses in connection with the preparation
of any financial statements or reports for any period or any audits in
connection with the foregoing, and shall reimburse Purchaser from time to time
promptly upon

 

21

 

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of this exhibit has been filed separately with the Commission.

 

request for any reasonable costs, fees and expenses incurred by the
Purchaser in connection with this Section 5.07.  For the avoidance of doubt, (i) the
foregoing shall not require the Purchaser to maintain financial information or
records in accordance with GAAP or prepare financial reports for any period;
and (ii) Vertex shall not be responsible for any costs, fees and expenses
in connection with the preparation of any financial statements or reports that
the Purchaser prepares in the ordinary course of its business.

 

(b)           Vertex agrees that
the Purchaser shall have no liability (whether direct or indirect, in contract
or tort or otherwise) to any Vertex Indemnified Party for or in connection with
any of the financial records or financial information provided by the Purchaser
pursuant to Section 5.07(a) hereof except for Losses incurred
by Vertex that are finally judicially determined to have resulted from actual
fraud, gross negligence or willful misconduct on the part of the Purchaser.

 

ARTICLE VI

TERMINATION

 

Section 6.01         Termination
Date.

 

This Agreement shall terminate on the date
upon which the earlier of the following occurs: (i) the payment to the
Purchaser of the Milestone Payment in full pursuant to the terms of the
Transaction Documents; (ii) the expiration of the Janssen Agreement; or (iii) the
termination of the Janssen Agreement where licenses granted to Janssen under Article 7
of the Janssen Agreement terminate.

 

Section 6.02         Effect
of Termination.

 

In the event of the termination of this
Agreement pursuant to Section 6.01,
this Agreement shall become void and of no further force and effect, except
for: (i) those rights and obligations that have accrued prior to the date
of such termination, including the payment in accordance with the terms hereof
of the Milestone Payment earned prior the date of such termination; (ii) in
the event of termination of this Agreement pursuant to Section 6.01(iii),
the right to payment of the Milestone Payment under Section 5.05,
and Section 5.03, and Section 5.04(b); and (iii) Article I, Article VI
and Article VII and Section 2.02(b) (but
only the last sentence thereof), Section 5.01,
and Section 5.07 (but only for the period ending 45 days after the
end of the calendar quarter in which such termination occurred), shall survive
the termination of this Agreement and there shall be no liability on the part
of any party hereto, any of its Affiliates or controlling Persons or any of
their respective officers, directors, shareholders, members, partners,
controlling Persons, managers, agents or employees, other than as provided for
in this Section 6.02.  Nothing contained in this Section 6.02 shall relieve any party hereto
from liability for any breach of this Agreement that occurs prior to such
termination.

 

22

 

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of this exhibit has been filed separately with the Commission.

 

ARTICLE VII

MISCELLANEOUS

 

Section 7.01         Survival.

 

All representations and warranties made
herein and in any other Transaction Document or any certificates delivered
pursuant to this Agreement shall survive the execution and delivery of this
Agreement and shall continue to survive until October 31, 2012; provided,
however, that the representations and warranties contained in Sections
3.08 and 3.11 shall survive until the date that is one year after
termination of this Agreement; provided, further, however,
that the representations and warranties contained in Sections  3.01,
3.02, 3.03, 3.04, 3.09, 3.10, 3.12
and 3.14 shall survive indefinitely; provided, further, however,
that it is understood and agreed that, notwithstanding the survival provisions
of this Section 7.01, all of the
representations and warranties made by the parties hereto are made only as of
the Effective Date.  The obligations of (a) Vertex
to indemnify and hold harmless any Purchaser Indemnified Party under Section 7.05 and (b) the Purchaser to
indemnify and hold harmless any Vertex Indemnified Party under Section 7.05, in each case shall terminate (i) when
the applicable representation or warranty terminates pursuant to this Section 7.01, with respect to claims made
pursuant to Error!
Reference source not found. and Error! Reference source not found.,
as applicable, and (ii) 60 days after the expiration of the applicable
statute of limitations (or waivers or extensions thereof), with respect to
claims made pursuant to Error! Reference source not found., Error! Reference source
not found., Error! Reference source not found. or 7.05(b)(iv);
provided, however, that, in each case, such obligations to
indemnify and hold harmless shall not terminate with respect to any item as to
which a Purchaser Indemnified Party or a Vertex Indemnified Party shall have,
before the expiration of the applicable period, previously notified the
indemnifying party pursuant to Section 7.05.

 

Section 7.02         Specific
Performance.

 

Each of the parties hereto acknowledges that
the other party hereto may have no adequate remedy at law if it fails to
perform any of its obligations under any of the Transaction Documents.  In such event, each of the parties hereto
agrees that the other party hereto shall have the right, in addition to any
other rights it may have (whether at law or in equity), to specific performance
of this Agreement. Neither party hereto shall have any right to terminate this
Agreement or any other Transaction Document as a result of any breach by the
other party hereto hereof or thereof, but instead shall have the rights set
forth in this Agreement, including this Article VII.

 

Section 7.03         Notices.

 

All notices, consents, waivers and
communications hereunder given by any party hereto to the other party hereto
shall be in writing, signed by the party hereto giving such notice and be
deemed to have been duly given when (i) delivered by hand, (ii) sent
by facsimile (with written confirmation of receipt) if sent during regular
business hours on a Business Day (and, if not, then on the next succeeding
Business Day), provided, however, that a copy is mailed by
registered 

 

23

 

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of this exhibit has been filed separately with the Commission.

 

mail, return receipt
requested, (iii) received by the addressee, if sent by nationally
recognized overnight delivery service (receipt requested), or (iv) sent by
email if sent during regular business hours on a Business Day (and, if not,
then on the next succeeding Business Day), provided, however,
that a copy is mailed by a nationally recognized overnight delivery service (provided,
however, that delivery will not be deemed effective unless the addressee
provides written confirmation of receipt by facsimile or return email
(automatic email responses do not constitute confirmation)), in each case, to
the applicable addresses, facsimile numbers and/or email addresses set forth
below:

 

If to the Purchaser to:

 

Olmsted Park S.A.

20, rue de la Poste

L-2346 Luxembourg

Attention: Board of Directors

 

with a copy (which shall not constitute notice) to:

 

Akin Gump Strauss Hauer & Feld LLP

One Bryant Park

New York, NY 10036

Attention: Stuart E. Leblang

Facsimile: (212) 872-1002

Email: sleblang@akingump.com

 

If to Vertex to:

 

Vertex Pharmaceuticals
Incorporated

130 Waverly Street

Cambridge, MA 02139

Attention:       Philippe Tinmouth

         Head, Business
Development & Licensing

Facsimile: 617-444-6632

Email:
phil_tinmouth@vrtx.com

 

with a copy (which shall not
constitute notice) to:

 

Vertex Pharmaceuticals
Incorporated

130 Waverly Street

Cambridge, MA 02139

Attention:       Kenneth S. Boger, Esq.

         Senior Vice
President and General Counsel

Facsimile: 617-444-7117

Email: ken_boger@vrtx.com

 

24

 

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of this exhibit has been filed separately with the Commission.

 

or to such other address or addresses, facsimile
number or numbers or email address or addresses as the Purchaser or Vertex may
from time to time designate by notice as provided herein, except that notices
of such changes shall be effective only upon receipt.

 

Section 7.04         Successors
and Assigns.

 

The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns. 
Neither party shall be entitled to assign, directly or indirectly, any
of its obligations and rights under any of the Transaction Documents, including
by operation of law or otherwise, without the prior written consent of the
other party; provided, however, that (i) Vertex may, without
the consent of the Purchaser, assign any of its obligations or rights under the
Transaction Documents to any other Person with which it may merge or
consolidate or to which it may sell all or substantially all of its assets, provided
that the assignee under such assignment agrees to be bound by the terms of the
Transaction Documents and furnishes a written agreement to the Purchaser in
form and substance reasonably satisfactory to the Purchaser to that effect, and
(ii) Purchaser may assign this Agreement in its entirety without the
consent of Vertex, provided, however, that the Purchaser shall
give notice of any such assignment to Vertex after the occurrence thereof.  Vertex shall be under no obligation to
reaffirm any representations, warranties or covenants made in this Agreement or
any of the other Transaction Documents or take any other action in connection
with any such assignment by the Purchaser.

 

Section 7.05         Indemnification.

 

(a)       Vertex
hereby agrees to indemnify and hold harmless each of the Purchaser and its
Affiliates and any and all of their respective partners, directors, managers,
members, officers, employees, agents and controlling Persons (each, a “Purchaser
Indemnified Party”) from and against, and will pay to each Purchaser
Indemnified Party the amount of, any and all Losses incurred or suffered by
such Purchaser Indemnified Party arising out of (i) any breach of any
representation, warranty or certification made by Vertex in any of the
Transaction Documents or certificates given by Vertex in writing pursuant
hereto or thereto, (ii) any breach of or default under any covenant or
agreement by Vertex pursuant to any Transaction Document, and (iii) any
fees, expenses, costs, liabilities or other amounts incurred or owed by Vertex
to any brokers, financial advisors or comparable other Persons retained or
employed by it in connection with the transactions contemplated by this
Agreement.  Any amounts due to any
Purchaser Indemnified Party hereunder shall be payable by Vertex to such
Purchaser Indemnified Party promptly upon demand.

 

(b)       The
Purchaser agrees to indemnify and hold harmless each of Vertex and its
Affiliates and any and all of their respective partners, directors, managers,
members, officers, employees, agents and controlling Persons (each, a “Vertex
Indemnified Party”) from and against, and will pay to each Vertex
Indemnified Party the amount of, any and all Losses incurred or suffered by
such Vertex Indemnified Party arising out of (i) any breach of any
representation, warranty or certification made by the Purchaser in any of the
Transaction Documents or certificates given by the Purchaser in writing
pursuant hereto or thereto, (ii) any breach of or default under any
covenant or agreement by the Purchaser pursuant to any Transaction Document, (iii) any
fees, expenses, costs, liabilities or other amounts incurred or 

 

25

 

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of this exhibit has been filed separately with the Commission.

 

owed by the Purchaser to any brokers,
financial advisors or comparable other Persons retained or employed by it in
connection with the transactions contemplated by this Agreement, and (iv) directly
or indirectly, the use by Vertex of any of the financial records or financial
information provided by the Purchaser pursuant to Section 5.07(a) hereof
to the extent such Losses are finally judicially determined to have resulted
from actual fraud, gross negligence or willful misconduct on the part of the
Purchaser..  Any amounts due to any
Vertex Indemnified Party hereunder shall be payable by the Purchaser to such
Vertex Indemnified Party upon demand.

 

(c)       In
the event that (i) any claim, demand, action or proceeding (including any
investigation by any Governmental Authority) shall be brought or alleged by any
Person not a party to this Agreement against an indemnified party in respect of
which indemnity is to be sought against an indemnifying party pursuant to the
preceding paragraphs (each, a “Third Party Claim”) or (ii) any
indemnified party under this Agreement shall have a claim to be indemnified
pursuant to the preceding paragraphs which does not involve a Third Party
Claim, the indemnified party shall, promptly after receipt of notice of the
commencement of any such claim, demand, action or proceeding, notify the
indemnifying party in writing of the commencement of such claim, demand, action
or proceeding, enclosing a copy of all papers served, if any; provided, however,
that the omission to so notify such indemnifying party will not relieve the
indemnifying party from any liability that it may have to any indemnified party
under the foregoing provisions of this Section 7.05
unless, and only to the extent that, such omission actually and materially
prejudiced the indemnifying party or results in the forfeiture of material
substantive rights or defenses by the indemnifying party.  In case any Third Party Claim is brought
against an indemnified party, the indemnifying party will be entitled, at the
indemnifying party’s sole cost and expense, to participate therein and, to the
extent that it may wish, to notify the indemnified party promptly (but no later
than 10 Business Days of receipt of notice thereof) that it elects to assume
the defense thereof, with counsel, contractors and consultants of recognized
standing and competence and reasonably satisfactory to such indemnified party,
and, after such notice of its election to assume the defense, the indemnifying
party will not be liable to such indemnified party under this Section 7.05 for any legal or other expenses
(except as provided in the next sentence) subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation.  In any such
proceeding, an indemnified party shall have the right to retain its own
counsel, but the reasonable fees and expenses of such counsel shall be at the
expense of such indemnified party unless (i) the indemnifying party and
the indemnified party shall have mutually agreed to the retention of such
counsel, (ii) the indemnifying party has assumed the defense of such
proceeding and has failed within a reasonable time to retain counsel reasonably
satisfactory to such indemnified party or (iii) the named parties to any
such proceeding (including any impleaded parties) include both the indemnifying
party and the indemnified party and representation of both parties by the same
counsel would be inappropriate or ineffective due to actual or potential
conflicts of interests between them in the reasonable determination of the
indemnified party based on the advise of outside legal counsel.  The parties agree that the indemnifying party
shall not, in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the reasonable fees and expenses of more than one
separate law firm (in addition to local counsel where necessary) for all such
indemnified parties.  The indemnifying
party shall not be liable for any settlement of any Third Party Claim effected
without its written consent, but, if settled with such consent or if there be a
final judgment for the 

 

26

 

Information redacted pursuant to a confidential treatment request.  An unredacted version 

of this exhibit has been filed separately with the Commission.

 

plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any Losses by reason of such
settlement or judgment.  No indemnifying
party shall, without the prior written consent of the indemnified party, effect
any settlement, compromise or discharge of any pending or threatened Third
Party Claim in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless (x) such settlement, compromise or discharge, as the case may be, (A) includes
an unconditional written release of such indemnified party, in form and
substance reasonably satisfactory to the indemnified party, from all liability
on claims that are the subject matter of such claim or proceeding, (B) does
not include any statement as to an admission of fault, culpability or failure
to act by or on behalf of any indemnified party and (C) does not impose
any continuing obligation, injunctions or restrictions on any indemnified
party, encumber any of the assets of any indemnified party or otherwise
adversely affect any indemnified party potentially affected by such claim or
proceeding and (y) the indemnifying party pays or causes to be paid all
amounts arising out of such settlement, compromise or discharge concurrently
with its effectiveness.

 

(d)           Except in the case of fraud or intentional breach, the
indemnification afforded by this Section 7.05
shall be the sole and exclusive remedy for any and all Losses sustained or
incurred by an indemnified party hereto in connection with the transactions
contemplated by the Transaction Documents, including with respect to any breach
of any representation, warranty or certification made by a party hereto in any
of the Transaction Documents or certificates given by a party hereto in writing
pursuant hereto or thereto or any breach of or default under any covenant or
agreement by a party hereto pursuant to any Transaction Document.  Notwithstanding anything in this Agreement to
the contrary, (i) in the event of any breach or failure in performance of
any covenant or agreement contained in any Transaction Document, other than Section 5.04(a) of
this Agreement, the breaching party agrees that the non-breaching party may be
entitled to specific performance, injunctive or other equitable relief pursuant
to Section 7.02, (ii) in no event shall Losses include
special, indirect, incidental or consequential damages of the indemnified
party, other than the payment of the Milestone Payment and (iii) in no
event shall either party, or its employees, officers, directors, agents,
successors or assigns be liable for any Losses in the aggregate greater than
the amount of the Milestone Payment.  For
clarity, neither party hereto shall have any right to terminate this Agreement
or any other Transaction Document as a result of any breach by the other party
hereto hereof or thereof, but instead shall have the rights set forth in this Section 7.05 and 0.

 

Section 7.06         Independent
Nature of Relationship.

 

(a)       The
relationship between Vertex and the Purchaser is solely that of seller and
purchaser, and neither Vertex nor the Purchaser has any fiduciary or other
special relationship with the other or any of the other’s Affiliates.  Nothing contained herein or in any other
Transaction Document shall be deemed to constitute Vertex and the Purchaser as
a partnership, an association, a joint venture or other kind of entity or legal
form.

 

(b)       No
officer or employee of the Purchaser will be located at the premises of Vertex
or any of its Affiliates.

 

27

 

 

Information redacted pursuant to
a confidential treatment request.  An
unredacted version 

of this exhibit has been filed separately with the Commission.

 

(c)           None of Vertex and/or any of
its Affiliates shall at any time obligate the Purchaser, or impose on the
Purchaser any obligation, in any manner or with respect to any Person not a
party hereto.

 

Section 7.07         Tax.

 

(a)           Notwithstanding
the accounting treatment thereof, for United States federal, state and local
tax purposes, Vertex and the Purchaser shall treat the transactions
contemplated by the Transaction Documents as a sale for United States federal,
state and local tax purposes, except as provided in Section 7.07(d) below.

 

(b)           Unless there is a change in applicable law or a Final
Determination to the contrary, Vertex shall not take any position or action
that is inconsistent with the position that any payments by Janssen to the
Purchaser as contemplated by the Transaction Documents, including the Milestone
Payment, are not subject to any U.S. withholding taxes pursuant to Sections
1441, 1442, 1445 or 1446 of the Internal Revenue Code of 1986, as amended (the “Code”).  If deduction or withholding by Vertex of any
tax is required by law or a Final Determination from any payments to the
Purchaser as contemplated by the Transaction Documents, including
the Milestone Payment, any
amount so withheld and remitted to taxing authorities by Vertex and any
interest or penalties thereon paid by Vertex shall be treated for purposes of
this Agreement as if paid to the Purchaser and shall reduce the amount
otherwise payable directly to the Purchaser, and if such amount cannot be
subtracted from payments otherwise due to the Purchaser, the Purchaser
shall repay Vertex for any such amounts within 10 Business Days following
demand therefor, which demand shall be not earlier than delivery of the
documentation required by the last sentence of this paragraph.  If Vertex is required by law or a Final Determination to make a deduction or
withholding, it shall make that deduction or withholding and any payment
required in connection with that deduction or withholding within the time
allowed or, if later, promptly upon determination that such payment
is owed, and in the minimum amount required by law.  Within 10 Business Days of making either a
deduction or withholding or any payment required in connection with that
deduction or withholding, Vertex shall deliver to the Purchaser reasonable
evidence that the deduction or withholding has been made or (as
applicable) any appropriate payment has been paid to the relevant taxing
authority. Vertex shall notify the Purchaser as soon as reasonably practicable
after becoming aware that any payments to the Purchaser as contemplated by the
Transaction Documents, including the Milestone Payment, are reasonably likely
to be subject to deduction or withholding for taxes.

 

(c)           Notwithstanding anything to
the contrary contained in the Transaction Documents, in no event shall Vertex
indemnify or hold harmless any Purchaser Indemnified Party for any reduction in
payments to the Purchaser as contemplated by the Transaction Documents,
including the Milestone Payment, attributable to any taxes, except for taxes
imposed on Vertex by the United States or other jurisdictions in which Vertex
is treated as resident for tax purposes that are calculated by reference to the
net income received or receivable by Vertex nor shall such reduction be deemed
a Set-off or Discrepancy under the Transaction Documents or give rise to any
liability or obligation of Vertex to pay the Purchaser the amount of such
reduction under Section 2.02(b) or otherwise.

 

28

 

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a confidential treatment request.  An
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of this exhibit has been filed separately with the Commission.

 

(d)           The parties hereto agree not
to take any position that is inconsistent with the provisions of this Section 7.07 on any tax return or in any
audit or other administrative or judicial proceeding unless (i) the other
party hereto has consented to such actions or (ii) the party hereto that
contemplates taking such an inconsistent position has been advised by
nationally recognized tax counsel in writing that there is no “reasonable basis”
(within the meaning of Treasury Regulation Section 1.6662-3(b)(3)) for the
position specified in this Section 7.07
or that such position is an “unreasonable position” within the meaning of Section 6694(a)(2) of
the Code; provided, however, that notwithstanding this Section 7.07(d),
the parties agree not to take any position that is inconsistent with Section 7.07(a) on
any tax return or in any audit or other administrative or judicial proceeding
unless (i) the other party has consented to such actions or (ii) there
is a change in applicable law or a Final Determination to the contrary.  If there is an inquiry by any Governmental
Authority of Vertex or the Purchaser related to this Section 7.07,
the parties hereto shall cooperate with each other in responding to such
inquiry in a reasonable manner consistent with this Section 7.07.

 

(e)           “Final Determination”
means a final administrative decision, a judicial decision or an agreement by
the Purchaser pursuant to Section 7.07(e)(2) or by Vertex
pursuant to Section 7.07(e)(4), that Vertex is required to withhold
taxes from any payments to the Purchaser as contemplated by the Transaction
Documents, including the Milestone Payment, any such decision or agreement to
be conducted in accordance with the following provisions of this Section 7.07(e):

 

(1)           Vertex agrees
to give written notice (the “Initial Notice”) to the Purchaser of any
notice received by Vertex that involves the assertion of any claim, or the
commencement of any audit, suit, action or proceeding relating to withholding
taxes on any payments to the Purchaser contemplated by the Transaction
Documents, including the Milestone Payment, (a “Withholding Tax Claim”)
within 10 days of such receipt or such earlier time as would allow the
Purchaser to timely respond to such Withholding Tax Claim. Vertex will give the
Purchaser such information with respect to the Withholding Tax Claim as the
Purchaser may reasonably request. 
Failure to provide the Purchaser with notice and information with
respect to a Withholding Tax Claim within a sufficient period of time and in
reasonably sufficient detail to allow the Purchaser to effectively contest such
Withholding Tax Claim shall not affect the liability of the Purchaser to Vertex
except to the extent that the Purchaser’s position is actually prejudiced as a
result thereof.

 

(2)           The Purchaser
may, upon written notice to Vertex given within 30 days of receipt of the
Initial Notice, assume and control the defense of any Withholding Tax Claim at
its own cost and expense and with its own counsel and may (i) pursue or
forego any and all administrative appeals, proceedings, hearings and
conferences with any tax authority, or (ii) either (A) consent to
taxes being withheld from the relevant payments, or (B) contest, settle or
compromise the Withholding Tax Claim in any permissible manner.

 

(3)           If the
Purchaser elects to exercise its right to control the defense of any
Withholding Tax Claim pursuant to Section 7.07(e)(2) of this
Agreement, (i) Vertex, its employees and its affiliates shall (A) cooperate
with the Purchaser in connection with such defense of any Withholding Tax Claim
and the pursuit of any related refund, (B) 

 

29

 

Information redacted pursuant to
a confidential treatment request.  An
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of this exhibit has been filed separately with the Commission.

 

provide
the Purchaser (and its employees and other agents) with any applicable powers
of attorney reasonably requested and (C) take any actions reasonably
requested by the Purchaser, and (ii) the Purchaser shall keep Vertex
reasonably informed of all material developments and events relating to such
Withholding Tax Claim, and permit Vertex to participate in (but not to control)
the defense of any such Withholding Tax Claim (including participation in any
relevant meetings and conference calls) at its own cost and expense and with
its own counsel.

 

(4)           Any Withholding
Tax Claim that the Purchaser does not elect to control pursuant to Section 7.07(e)(2) of
this Agreement shall be controlled by Vertex and the Purchaser agrees to
cooperate with Vertex in pursuing such contest, provided, however,
that (i) Vertex shall keep the Purchaser informed of all material
developments and events relating to such Withholding Tax Claim (including
promptly forwarding copies to the Purchaser of any related correspondence) and
shall use reasonable efforts to provide the Purchaser with an opportunity to
review and comment on any material correspondence before Vertex sends such
correspondence to any tax authority, and (ii) the Purchaser, at its own
cost and expense and with its own counsel, shall have the right to participate
in (including in any relevant meetings and conference calls) the defense of
such Withholding Tax Claims.

 

(5)           The Purchaser
and Vertex further agree to furnish or cause to be furnished to each other,
upon request, in a timely manner, such information (including access to books
and records) and assistance relating to Vertex as is reasonably necessary for
the filing of any tax return or refund claim relating to any relevant taxes
withheld or for the defense of any Withholding Tax Claim.

 

(f)            For purposes of this Section 7.07,
a “change in applicable law” includes a change in regulations, a change in
judicial interpretation or a change in other controlling legal authority.

 

Section 7.08         Entire Agreement.

 

This Agreement, together
with the Schedule and Exhibits hereto (which are incorporated herein by
reference), and the other Transaction Documents constitute the entire agreement
between the parties hereto with respect to the subject matter hereof and
supersede all prior agreements, understandings and negotiations, both written
and oral, between the parties hereto with respect to the subject matter of this
Agreement. No representation, inducement, promise, understanding, condition or
warranty not set forth herein (or in the Schedule, Exhibits or other
Transaction Documents) has been made or relied upon by either party
hereto.  Neither this Agreement, nor any
provision hereof, is intended to confer upon any Person other than the parties
hereto any rights or remedies hereunder.

 

Section 7.09         Governing Law.

 

(a)           This Agreement shall be
construed in accordance with and governed by the laws of the State of New York,
without giving effect to the principles of conflicts of law thereof.

 

30

 

Information redacted pursuant to
a confidential treatment request.  An
unredacted version 

of this exhibit has been filed separately with the Commission.

 

(b)           Each of the parties hereto
hereby irrevocably and unconditionally submits, for itself and its property, to
the exclusive jurisdiction of the Supreme Court of the State of New York
sitting in New York County and of the United States District Court of the
Southern District of New York, and any appellate court from any thereof, in any
action or proceeding arising out of or relating to this Agreement, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in such New York State
court or, to the extent permitted by law, in such federal court.  Each of the parties hereto agrees that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law.

 

(c)           Each of the parties hereto
hereby irrevocably and unconditionally waives, to the fullest extent it may
legally and effectively do so, any objection that it may now or hereafter have
to the laying of venue of any suit, action or proceeding arising out of or
relating to this Agreement in any court referred to in Section 7.09(b).  Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.

 

(d)           Each party hereto
irrevocably consents to service of process in the manner provided for notices in
Section 7.03.  Nothing in this Agreement will affect the
right of any party hereto to serve process in any other manner permitted by
law.

 

Section 7.10         Waiver of Jury Trial.

 

EACH
PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY
OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF THE OTHER PARTY HERETO HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT THE OTHER PARTY HERETO WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT
IT AND THE OTHER PARTY HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT
BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 7.10.

 

Section 7.11         Severability.

 

If one or more provisions of
this Agreement are held to be invalid or unenforceable by a court of competent
jurisdiction, such provision shall be excluded from this Agreement and the
balance of this Agreement shall be interpreted as if such provision were so
excluded and shall remain in full force and effect and be enforceable in
accordance with its terms.  Any provision
of this Agreement held invalid or unenforceable only in part or degree by a
court of competent jurisdiction shall remain in full force and effect to the
extent not held invalid or unenforceable.

 

31

 

Information redacted pursuant to
a confidential treatment request.  An
unredacted version 

of this exhibit has been filed separately with the Commission.

 

Section 7.12         Counterparts; Effectiveness.

 

This Agreement may be signed
in any number of counterparts, each of which shall be an original, with the
same effect as if the signatures thereto and hereto were upon the same
instrument.  This Agreement shall become
effective when each party hereto shall have received a counterpart hereof
signed by the other party hereto.  Any
counterpart may be executed by facsimile signature and such facsimile signature
shall be deemed an original.

 

Section 7.13         Amendments; No Waivers.

 

(a)           Neither this Agreement nor
any term or provision hereof may be amended, supplemented, altered, changed or
modified except with the written consent of the parties hereto.  No waiver of any right hereunder shall be
effective unless such waiver is signed in writing by the party hereto against
whom such waiver is sought to be enforced.

 

(b)           No failure or delay by
either party hereto in exercising any right, power or privilege hereunder shall
operate as a waiver thereof nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege.  The rights
and remedies herein provided shall be cumulative and not exclusive of any
rights or remedies provided by law.

 

Section 7.14         Interpretation.

 

(a)           Except as otherwise provided
or unless the context otherwise requires, whenever used in this Agreement, (i) any
noun or pronoun shall be deemed to include the plural and the singular, (ii) the
use of masculine pronouns shall include the feminine and neuter, (iii) the
terms “include” and “including” shall be deemed to be followed by the phrase “without
limitation”, (iv) the word “or” shall be inclusive and not exclusive, (v) all
references to Sections refer to the Sections of this Agreement, all references
to Schedule refer to the Schedule attached hereto or delivered with this
Agreement, as appropriate, and all references to Exhibits refer to the Exhibits
attached to this Agreement, each of which is made a part of this Agreement for
all purposes, and (vi) each reference to “herein” means a reference to “in
this Agreement”.

 

(b)           The provisions of this
Agreement shall be construed according to their fair meaning and neither for
nor against any party hereto irrespective of which party hereto caused such
provisions to be drafted.  Each of the parties
hereto acknowledges that it has been represented by an attorney in connection
with the preparation and execution of this Agreement.

 

(c)           Unless expressly provided
otherwise, the measure of a period of one month or one year for purposes of
this Agreement shall be that date of the following month or year corresponding
to the starting date, provided, however, that, if no
corresponding date exists, the measure shall be that date of the following
month or year corresponding to the next day following the starting date.  For example, one month following February 18th
is March 18th, and one month following March 31 is May 1.

 

32

 

Information redacted pursuant to
a confidential treatment request.  An
unredacted version 

of this exhibit has been filed separately with the Commission.

 

Section 7.15         Expenses.

 

Each of the parties hereto
shall pay all of their own fees and expenses incurred in connection with the
negotiation of and entering into, this Agreement and the other Transaction
Documents, and the consummation of the transactions contemplated hereby and
thereby.

 

[Signature
page follows]

 

33

 

Information redacted pursuant to
a confidential treatment request.  An
unredacted version 

of this exhibit has been filed separately with the Commission.

 

IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be duly executed by their
respective authorized officers as of the date first above written.

 

	
   

  	
  VERTEX
  PHARMACEUTICALS INCORPORATED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Matthew W. Emmens

  
	
   

  	
  Name:
  

  	
  Matthew
  W. Emmens

  
	
   

  	
  Title:
  

  	
  Chairman,
  President and CEO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  OLMSTED
  PARK S.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Julia Vogelweith

  
	
   

  	
  Name:
  

  	
  Julia
  Vogelweith

  
	
   

  	
  Title:
  

  	
  Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Hille-Paul Schut

  
	
   

  	
  Name:
  

  	
  Hille-Paul
  Schut

  
	
   

  	
  Title:
  

  	
  Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Xavier de Cillia

  
	
   

  	
  Name:
  

  	
  Xavier
  de Cillia

  
	
   

  	
  Title:
  

  	
  Director

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