Document:

cpc_8k-ex1001.htm

    EXHIBIT
10.1

     

    
      PRODUCT
DEVELOPMENT AGREEMENT

      
 

      This
Product Development Agreement (the “Agreement”) is entered into
as of March 9, 2009 (the “Effective Date”) between CPC
of America, Inc., a Nevada corporation (“Company”), and Olex Hnojewyj,
an individual (“Contractor”) (each, a “Party”).

       

      1.           DEFINITIONS.  As used in this
Agreement:

       

      1.1           “Affiliate” of any
particular Party means any person controlling, controlled by or under common
control with such Party, including subsidiaries, and parent companies of such
Party.  For purposes of this definition, “control” (including the
terms “controlling,” “controlled by” and “under common control with”) means the
possession, direct or indirect, of the power to direct or cause the direction of
the management and policies of a Person, whether through the ownership of voting
securities, by contract or otherwise, and such “control” will be presumed if any
Person owns 50% or more of the voting capital stock, assets or other ownership
interests, directly or indirectly, of any other Person.

       

      1.2           “Common Stock” means Company’s $.005 par
value common stock, and any other class of securities into which such securities
may hereafter be reclassified or changed into

       

      1.3           “Confidential Information”
means any and all information related to Company’s business (including trade
secrets, technical information, business forecasts and strategies, marketing
plans, customer and supplier lists, personnel information, financial data, and
proprietary information of third parties provided to Company in confidence) that
is labeled or identified as “confidential” or “proprietary” or that Contractor
otherwise knows, or would reasonably be expected to know, Company considers to
be confidential or proprietary or Company has a duty to treat as
confidential.

       

      1.4           “Deliverables” means the items
to be provided or actually provided by Contractor to Company under this
Agreement, including items specifically designated or characterized as
deliverables in this Agreement or in a Statement of Work.

       

      1.5           “Intellectual Property” means
all algorithms, application programming interfaces (APIs), apparatus, assay
components, biological materials, cell lines, chemical compositions and
structures, circuit designs and assemblies, concepts, Confidential Information,
data (including clinical data), databases and data collections, designs,
diagrams, documentation, drawings, flow charts, formulae, gate arrays, ideas and
inventions (whether or not patentable or reduced to practice), IP cores,
know-how, materials, marketing and development plans, marks (including brand
names, product names, logos, and slogans), methods, models, net lists, network
configurations and architectures, photomasks, procedures, processes, protocols,
schematics, semiconductor devices, software code (in any form including source
code and executable or object code), specifications, subroutines, techniques,
test vectors, tools, uniform resource identifiers including uniform resource
locators (URLs), user interfaces, web sites, works of authorship, and other
forms of technology.

       

       

      
        
          
          

        

        
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      1.6           “Intellectual Property Rights”
means all past, present, and future rights of the following types, which may
exist or be created under the laws of any jurisdiction in the world: (a) rights
associated with works of authorship, including exclusive exploitation rights,
copyrights, moral rights, and mask work rights; (b) trademark and trade name
rights and similar rights; (c) trade secret rights; (d) patent and industrial
property rights; (e) other proprietary rights in Intellectual Property of every
kind and nature; and (f) rights in or relating to registrations, renewals,
extensions, combinations, divisions, and reissues of, and applications for, any
of the rights referred to in clauses (a) through (e) of this
sentence.

       

      1.7           “Market Price” means, for
any date, the price determined by the first of the following clauses that
applies: (a) if the Common Stock is then listed or quoted on a
U.S.  trading market other than the OTC Bulletin Board, the daily
volume weighted average price of the Common Stock over the 20 trading days
preceding such date on the principal U.S. trading market on which the Common
Stock is then listed or quoted for trading as reported by Bloomberg Financial
L.P. (based on a trading day from 9:30 a.m. (New York City time) to 4:02 p.m.
(New York City time); (b) if the OTC Bulletin Board is the principal U.S.
trading market, the volume weighted average price of the Common Stock for such
date (or the nearest preceding date) on the OTC Bulletin Board; (c) if the
Common Stock is not then quoted for trading on the OTC Bulletin Board and if
prices for the Common Stock are then reported in the “Pink Sheets” published by
Pink Sheets, LLC (or a similar organization or agency succeeding to its
functions of reporting prices), the most recent bid price per share of the
Common Stock so reported; or (d) in all other cases, the fair market value
of a share of Common Stock as determined by the Board of Directors
of  Company in good faith.

       

      1.8           “Services” means the following
services to be performed or actually performed by Contractor under this
Agreement:  (A) the development of novel, unique and proprietary
hydrogel-type compositions comprising solely  synthetic pegalyted
technologies for use in connection with the (i) arterial and venous closure;
(ii) biopsy closures, including without limitation closures for breast, liver
and lung; (iii) spinal repair, vertebral body replacement and augmentation
procedures involving bone graft; and (iv) adhesion barrier and prevention in all
surgeries; (B) the proper documentation of the matters set forth in subpart (A)
suitable for purposes of obtaining U.S. and foreign certifications and
regulatory approvals; and (C) assistance in the preparation of U.S. and foreign
patent applications relating to the matters set forth in subpart
(A).

       

      1.9           “Work Product” means (a) all
Deliverables, (b) all Intellectual Property, in any stage of development, that
Contractor conceives, creates, develops, or reduces to practice in connection
with performing the Services, and (c) all tangible embodiments (including
models, presentations, prototypes, reports, samples, and summaries) of each item
of such Intellectual Property.

       

      2.           ENGAGEMENT

       

      2.1           Statements of
Work.  From time to time, Company may submit to Contractor
written work orders substantially in the form of Exhibit A that
contain the terms (including specifications, delivery and performance schedules)
for Services and Deliverables that Company desires Contractor to provide, along
with the fees in the form of shares of Common Stock to be issued by the Company
in consideration for such Services and Deliverables.  If Contractor
begins to perform services under a work order, Contractor will be deemed to have
accepted such work order.  Upon acceptance of a work order by
Contractor (in writing, by performance, or otherwise), such work order will be a
“Statement of
Work.”  A Statement of Work may include a limited license to
Contractor to use certain Intellectual Property of Company or its licensors,
such as software, tools, or know-how, as necessary to complete that Statement of
Work.  Any such license automatically terminates upon the completion
of the applicable Statement of Work and is limited by the terms of this
Agreement, including Section 5.3.

       

       

      
        
          
          

        

        
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      2.2           Performance of
Services.  Contractor will perform the Services in accordance
with the terms of this Agreement and the applicable Statement of
Work.  Except as otherwise provided in this Agreement or an applicable
Statement of Work, Contractor will have exclusive control over the manner and
means of performing the Services and will use Contractor’s expertise and
creative talents in performing the Services.  Company will provide, at
Company’s own expense, a place of work and all equipment, tools, and other
materials necessary to complete the Statement of Work.  Contractor
will be solely responsible for any injury or death suffered by any person
(including Contractor’s employees and agents) and any damage to any property
(including Company’s property) arising from such use, regardless of whether such
injury, death, or damage is claimed to be based upon the condition of such
equipment or facilities or upon Company’s negligence in permitting such
use.  Contractor shall comply with all reasonable rules, policies and
guidelines issued by Company from time to time with regard to the issuance,
maintenance, control, and archiving of laboratory notebooks, and such notebooks
shall be regarded as the sole property of the Company.

       

      2.3           Change
Proposals.  Upon the receipt of a proposal from Company to
change the terms of a Statement of Work (a “Change Proposal”), Contractor
will promptly provide (a) any information requested in such proposal, and (b)
Contractor’s written acceptance or rejection of the
proposal.  Contractor may not reject any Change Proposal that does not
materially shorten the delivery or performance schedule or materially alter the
Deliverables or Services, and may not unreasonably reject any other Change
Proposal.  If Contractor begins to adhere to a Change Proposal or does
not reject the Change Proposal in writing within five (5) days after
Contractor’s receipt thereof, Contractor will be deemed to have accepted such
Change Proposal.  The submission or reasonable rejection of a Change
Proposal will not constitute a breach of this Agreement.

       

      2.4           Acceptance
Procedures.  Company will have at least thirty (30) days to
evaluate any interim and final Deliverables (the “Acceptance Period”) to
reasonably ensure that they meet the specifications, requirements, and terms of
this Agreement and are of professional, technical, and general quality
consistent with industry standards.  If Company reasonably rejects any
Deliverable during the Acceptance Period, Company shall notify the Contractor
specifying the reasons for rejection and provide the Contractor a period of (30)
days (the “Correction Period”) to correct the Deliverables subject to evaluation
and acceptance in accordance with this Section 2.4. If, after the Correction
Period, the Company still reasonably rejects the Deliverable, the Company may
elect any of the following remedies (without limiting any other rights or
remedies Company may have): (a) Company may grant additional time to Contractor
to provide (at no additional charge to Company) corrected Deliverables subject
to evaluation and acceptance in accordance with this Section 2.4; (b)
Company may itself correct the Deliverables (or engage a third party to do so)
and may deduct the costs and reasonable expenses associated with such correction
from the fees owed to Contractor under the Statement of Work; or (c) Company may
terminate the Statement of Work and return all Deliverables (but not
Confidential Information therein) to Contractor, in which case Contractor shall
not be entitled to any fees related to the Statement of Work.

       

       

      
        
          
          

        

        
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      2.5           Monitoring.  Contractor
will cooperate with any requests by Company to monitor the Services in order to
verify that such Services are being performed in accordance with this Agreement
and in a timely and satisfactory manner.  Contractor will use
Contractor’s best efforts to facilitate any such monitoring, including providing
access to Contractor’s equipment and facilities.  All documents and
materials stored at Company’s facilities will be subject to inspection by
Company at any time without notice.

       

      2.6           Subcontracting.  Contractor
will not subcontract or otherwise delegate any of Contractor’s obligations under
this Agreement without Company’s express prior written consent on a case-by-case
basis.  Upon receipt of such consent, before allowing any
subcontractor to begin performing services, Contractor will enter into a binding
written agreement with such subcontractor that protects Company’s rights and
interests to at least the same degree as this Agreement, including
Sections 5 through 8.  Contractor will be responsible for
the direction and coordination of the services of each
subcontractor.  Company will have no obligation to pay any
subcontractor except as agreed to by the Company in writing from time to
time.

       

      2.7           Access Rules and
Procedures.  While on Company’s premises, Contractor agrees to
comply with Company’s then-current access rules and procedures, including those
procedures pertaining to safety, security, and
confidentiality.  Contractor agrees and acknowledges that Contractor
has no expectation of privacy with respect to Company’s telecommunications,
networking, or information processing systems (including stored computer files,
email messages, and voice messages) and that Contractor’s activities, including
the sending or receiving of any files or messages, on or using any of those
systems may be monitored, and the contents of such files and messages may be
reviewed and disclosed, at any time without notice.

       

      2.8           Competitive
Engagements.  Contractor agrees that during the term of this
Agreement, Contractor will not perform, or agree to perform, any services for
any third party that engages, or plans to engage, in any business or activity
that directly or indirectly competes with any current or planned business or
activity of Company relating to the Services.

       

      3.          INDEPENDENT
CONTRACTOR RELATIONSHIP.  Contractor’s
relation to Company under this Agreement is that of an independent
contractor.  Nothing in this Agreement is intended or should be
construed to create a partnership, joint venture, or employer-employee
relationship between Company and Contractor.  Contractor will take no
position with respect to or on any tax return or application for benefits, or in
any proceeding directly or indirectly involving Company, that is inconsistent
with Contractor being an independent contractor (and not an employee) of
Company.  Contractor is not the agent of Company and is not
authorized, and must not represent to any third party that Contractor is
authorized, to make any commitment or otherwise act on behalf of
Company.  Without limiting the generality of the
foregoing:

       

       

      
        
          
          

        

        
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      3.1           Benefits and
Contributions. Contractor is not
entitled to or eligible for any benefits that Company may make available to its
employees, such as group insurance, profit-sharing, or retirement
benefits.  Because Contractor is an independent contractor, Company
will not withhold or make payments for social security, make unemployment
insurance or disability insurance contributions, or obtain workers’ compensation
insurance on behalf of Contractor.  If, notwithstanding the foregoing,
Contractor is reclassified as an employee of Company, or any affiliate of
Company, by the U.S. Internal Revenue Service, the U.S. Department of Labor, or
any other federal or state or foreign agency as the result of any administrative
or judicial proceeding, Contractor agrees that Contractor will not, as the
result of such reclassification, be entitled to or eligible for, on either a
prospective or a retrospective basis, any employee benefits under any plans or
programs established or maintained by Company.

       

      3.2           Taxes.  Contractor
is solely responsible for filing all tax returns and submitting all payments as
required by any federal, state, local, or foreign tax authority arising from the
payment of fees to Contractor under this Agreement, and agrees to do so in a
timely manner.  If applicable, Company will report the fees paid to
Contractor under this Agreement by filing Form 1099-MISC with the Internal
Revenue Service as required by law.

       

      3.3           Compliance with Law.  Contractor
will comply with all applicable federal, state, local, and foreign laws
governing self-employed individuals, including laws requiring the payment of
taxes, such as income and employment taxes, and social security, disability, and
other contributions.

       

      3.4           Certification. Contractor
will provide Company with certifications and records (including, as appropriate,
copies of Contractor’s tax returns) as Company may request from time to time,
during or after the term of this Agreement, to verify that Contractor has
complied with this Section 3.

       

      4.           COMPENSATION.  Subject
to the terms and conditions of this Agreement, Company shall issue to Contractor
shares the compensation set forth below as Contractor’s sole and complete
compensation for all Services, Deliverables, and Intellectual Property Rights
provided by Contractor under this Agreement:

       

      4.1           Equity Fee.  Company
shall issue to Contractor shares (“Shares”) of Common Stock as
follows:

       

      
        	
                 
      

              	
                (a)

              	
                Upon
      and subject to the filing of the first patent application with the U.S.
      Patent and Trademark Office (“USPTO”) with respect to
      novel, unique and proprietary hydrogel-type compositions comprising solely
      synthetic pegalyted technologies or delivery systems for use in connection
      with arterial and venous closure, such patent application to be acceptable
      to Company in its reasonable discretion, Company shall issue to Contractor
      a number of shares of Common Stock equal to the quotient obtained by
      dividing $225,000 by the Market Price on the filing
  date.

              

      

       

      
        	
                 
      

              	
                (b)

              	
                Upon
      and subject to the filing of each  subsequent patent application
      with the USPTO with respect to novel, unique and proprietary hydrogel-type
      compositions comprising solely synthetic pegalyted technologies or
      delivery systems for use in connection with arterial and venous closure,
      such patent application(s) to be acceptable to Company in its reasonable
      discretion, Company shall issue to Contractor a number of shares of Common
      Stock equal to the quotient obtained by dividing $125,000 by the Market
      Price on the filing date.

              

      

       

       

      
        
          
          

        

        
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                (c)

              	
                Upon
      and subject to the filing of each patent application with the USPTO, in
      each case such patent application to be acceptable to Company in its
      reasonable discretion, with respect to novel, unique and proprietary
      hydrogel-type compositions comprising solely synthetic pegalyted
      technologies or delivery systems for use in connection with (i) biopsy
      closures, including without limitation closures for breast, liver and
      lung; (ii) spinal repair, vertebral body replacement and augmentation
      procedures involving bone graft; or (iii) adhesion barrier and prevention
      in all surgeries, Company shall issue to Contractor a number of shares of
      Common Stock equal to the quotient obtained by dividing $125,000 by the
      Market Price on the filing date.

              

      

       

      
        	
                 
      

              	
                (d)

              	
                Upon
      and subject to the USPTO issuance of each patent (“PEG Patent”) with
      respect to a patent application referred to in subparts (a), (b), or
      (c) above, Company shall issue to Contractor a number of shares of Common
      Stock equal to the quotient obtained by dividing $125,000 by the Market
      Price on the date of the issuance of each Peg
  Patent.

              

      

       

      
        	
                 
      

              	
                (e)

              	
                Upon
      and subject to the receipt of revenue by Company or an Affiliate from the
      sale or licensing of products or technology underlying each PEG Patent in
      each country,  Company shall issue to Contractor a number of
      shares of Common Stock equal to the quotient obtained by dividing $25,000
      by the Market Price on the date of the initial receipt of revenue in such
      country.

              

      

       

      The
number of Shares to be issued to Contractor, and the specific Services,
Deliverables, and Intellectual Property Rights to be provided by Contractor in
consideration of such Share amount, shall be set forth in each Statement of
Work, except in the case of Shares issuable pursuant to subparts (d) and (e)
above.

      

      4.2           Cash Fee.  Company
shall pay Contractor a cash fee for the services rendered by Contractor
hereunder at the rate of $300 per hour, provided that the Company shall not be
obligated to pay Contractor for more than 120 hours in any calendar month under
this Section 4.2 without the written authorization of the
Company.  Contractor will submit monthly invoices to Company no later
than the 10 calendar following each month end.  All invoiced amounts
shall be due and payable twenty (20) days following Company’s receipt of the
invoice for such fees.  Contractor will maintain, in accordance with
generally-accepted accounting principals, complete and accurate records of the
work performed sufficient to document the cash fee payable hereunder invoiced to
Company for at least two (2) years following the date of the invoice, and will
provide Company with such records at Company’s request.

       

       

      
        
          
          

        

        
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      No other
fees or consideration will be owed by Company under this Agreement except as set
forth above or in a Statement of Work.

       

      4.3            Expenses. Unless expressly
provided otherwise in the applicable Statement of Work and except as expressly
provided in Section 8.1, Contractor will be solely responsible for all
expenses incurred by Contractor in connection with performing the Services or
otherwise performing Contractor’s obligations under this Agreement.

       

      5.           CONFIDENTIALITY

       

      5.1           Use and Disclosure.  During
the term of this Agreement and at all times thereafter, Contractor will
(a) hold all Confidential Information in strict trust and confidence,
(b) refrain from using or permitting others to use Confidential Information
in any manner or for any purpose not expressly permitted or required by this
Agreement, and (c) refrain from disclosing or permitting others to disclose
any Confidential Information to any third party without obtaining Company’s
express prior written consent on a case-by-case basis.

       

      5.2           Standard of
Care.  Contractor will protect the Confidential Information
from unauthorized use, access, or disclosure in the same manner as Contractor
protects Contractor’s own confidential or proprietary information of a similar
nature, and with no less than the greater of reasonable care and
industry-standard care.

       

      5.3           Reverse
Engineering.  Unless and except to the extent expressly
authorized by Company to do so in writing, Contractor will not attempt to
reverse engineer, de-encrypt, or otherwise derive the design, internal logic,
structure or inner workings (including algorithms and source code) of any
software, products, models, prototypes, or other items provided by Company that
use, embody, or contain Confidential Information.

       

      5.4           Exceptions.  Contractor’s
obligations under Sections 5.1 and 5.2 will terminate with respect to any
particular information that Contractor can prove, by clear and convincing
evidence, (a) Contractor lawfully knew prior to Company’s first disclosure to
Contractor, (b) a third party rightfully disclosed to Contractor free of any
confidentiality duties or obligations, or (c) is, or through no fault of
Contractor has become, generally available to the
public.  Additionally, Contractor will be permitted to disclose
Confidential Information to the extent that such disclosure is expressly
approved in writing by Company, or is required by law or court order, provided
that Contractor immediately notifies Company in writing of such required
disclosure and cooperates with Company, at Company’s reasonable request and expense, in
any lawful action to contest or limit the scope of such required disclosure,
including filing motions and otherwise making appearances before a
court.

       

      5.5           Removal;
Return.  Contractor will not remove any tangible embodiment of
any Confidential Information from Company’s facilities or premises without
Company’s express prior written consent.  Upon Company’s request and
upon any termination or expiration of this Agreement, Contractor will promptly
(a) return to Company or, if so directed by Company, destroy all tangible
embodiments of the Confidential Information (in every form and medium), (b)
permanently erase all electronic files containing or summarizing any
Confidential Information, and (c) certify to Company in writing that Contractor
has fully complied with the foregoing obligations.

       

       

      
        
          
          

        

        
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      6.           NO
CONFLICTS.  Contractor will
refrain from any activity, and will not enter into any agreement or make any
commitment, that is inconsistent or incompatible with Contractor’s obligations
under this Agreement, including Contractor’s ability to perform the
Services.  Contractor represents and warrants that Contractor is not
subject to any contract or duty that would be breached by Contractor’s entering
into or performing Contractor’s obligations under this Agreement or that is
otherwise inconsistent with this Agreement.  Contractor will not
disclose to Company, will not bring into Company’s facilities, and will not
induce Company to use any confidential or proprietary information of any third
party other than Third-Party Technology (as defined in Section 7.1.2)
specifically authorized in advance by Company or identified in any Statement of
Work.

       

      7.           WORK
PRODUCT

       

      7.1           Disclosure

       

      7.1.1                      Disclosure of Work Product. In
accordance with the applicable Statement of Work, including any schedule
therein, Contractor will deliver all Deliverables and disclose all other Work
Product to Company (or any person designated by Company in writing) in the form
specified in the Statement of Work or otherwise designated by
Company.

       

      7.1.2                      Background and Third-Party
Technology.  Intellectual Property developed, acquired, or
otherwise obtained by Contractor prior to this Agreement (collectively, “Background Technology”) or
licensed or obtained by Contractor from third parties (collectively, “Third-Party Technology”) may
not be used by
Contractor in the performance of Services unless, subject to Section 7.1.3,
such Intellectual Property has been specifically identified and described to
Company in writing or in any Statement of Work.  However, in no event
will Contractor incorporate into the Deliverables or the Work Product any
software code licensed under the GNU GPL or LPGL or any similar “open source”
license.  Contractor represents and warrants that Contractor has an
unqualified right to license to Company all Background Technology as provided in
Section 7.4.

       

      7.1.3                      Prior Confidentiality
Obligations.  If the specific identification and description of
any Background Technology or Third-Party Technology would cause Contractor to
violate any confidentiality obligations, Contractor will not identify and
describe such Background Technology or Third-Party Technology with specificity,
but will disclose (to the extent permitted): (a) a general identification and
description of such Background Technology or Third-Party Technology (which in no
event will be less than a cursory name), (b) the owner or owners of such
Background Technology or Third-Party Technology and Contractor’s relationship to
such owner or owners, and (c) the specific reason that the Background Technology
or Third-Party Technology is not fully disclosed.

       

       

      
        
          
          

        

        
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      7.2           Ownership
and Assignment of Work Product

       

      7.2.1                      Generally.  Contractor
agrees that all Work Product will be the sole and exclusive property of
Company.  All elements in the Work Product that are protected by
copyright are “works made for hire” for which Company is the “author” (as such
first quoted term is defined by and such second quoted term given meaning by the
United States Copyright Act of 1976, as amended).  Company will
exclusively own the copyright in all such works upon their
creation.  To the extent that any aspect of such Work Product is found
as a matter of law not to be a “work made for hire” as contemplated above, and
except for Contractor’s Intellectual Property Rights in the Background
Technology and subject to Section 7.5, Contractor hereby irrevocably and
unconditionally assigns to Company all right, title, and interest worldwide in
and to the Work Product and all Intellectual Property Rights
thereto.  Contractor understands and agrees that Contractor has no
right to use the Work Product except as necessary to perform the Services for
Company.

       

      7.2.2                      Trademarks and Trade
Names.  Without limiting the generality of Section 7.2.1,
Contractor will have no interest in any trademark, service mark, or trade name
(collectively, “Mark”) used on or in the Work Product; Company will be the sole
and exclusive owner of all right, title, and interest in and to all such
Marks.  Any and all use of such Marks by Contractor will be deemed
made by Company for the purposes of trademark registration and will inure solely
to the benefit of Company for such purposes.  Contractor will not
contest, oppose, or challenge Company’s ownership of such Marks, or do anything
to impair Company’s ownership or rights in such Marks.  Contractor
will not create, adopt, or use a corporate name, trade name, trademark, or any
other designation that includes any of Company’s Marks (including those in the
Work Product) or a term confusingly similar to any of Company’s
Marks.  In particular, Contractor will not register, or attempt to
register, in any jurisdiction worldwide any of Company’s Marks (including those
in the Work Product) or a term confusingly similar to any of Company’s
Marks.

       

      7.3           Assignment and Waiver of Other
Rights.  If any
Intellectual Property Rights, including moral rights, in the Work Product,
except for Intellectual Property Rights in the Background Technology, cannot (as
a matter of law) be assigned by Contractor to Company as provided in
Section 7.2, then (a) Contractor unconditionally and irrevocably waives the
enforcement of such rights and all claims and causes of action of any kind
against Company with respect to such rights, and (b) to the extent Contractor
cannot (as a matter of law) make such waiver, Contractor unconditionally grants
to Company an exclusive, perpetual, irrevocable, worldwide, fully-paid license,
with the right to sublicense through multiple levels of sublicensees, under any
and all such rights (i) to reproduce, create derivative works of, distribute,
publicly perform, publicly display, digitally transmit, and otherwise use the
Work Product in any medium or format, whether now known or hereafter discovered,
(ii) to use, make, have made, sell, offer to sell, import, and otherwise exploit
any product or service based on, embodying, incorporating, or derived from the
Work Product, and (iii) to exercise any and all other present or future rights
in the Work Product.

       

      7.4           License of Background
Technology. Contractor unconditionally grants to Company a
non-exclusive, perpetual, irrevocable, worldwide, fully-paid right and license,
with the right to sublicense through multiple levels of sublicensees, under all
of Contractor’s Intellectual Property Rights in any and all Background
Technology used or incorporated in any Work Product or otherwise used by
Contractor in performance of the Services (whether or not identified or
described in writing to Company or in any Statement of Work), (a) to reproduce,
create derivative works of, distribute, publicly perform, publicly display,
digitally transmit, and otherwise use the Work Product in any medium or format,
whether now known or hereafter discovered, (b) to use, make, have made, sell,
offer to sell, import, and otherwise exploit any product or service based on,
embodying, incorporating, or derived from the Work Product, and (c) to exercise
any and all other present or future rights in the Work Product.

       

       

      
        
          
          

        

        
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      7.5           Assignment of Rights to Third-Party
Technology.  Unless agreed to in writing by the Parties, Contractor
hereby assigns to Company all of Contractor’s licenses and other rights to all
Third-Party Technology incorporated into the Work Product.  If such
rights cannot be validly assigned to Company without the consent of a third
party, Contractor will use best efforts to obtain such consent (at Contractor’s
expense) and will indemnify and hold harmless Company and its affiliates,
employees, and agents from and against all liabilities, losses, damages, costs,
and expenses (including attorneys’ fees) arising from Contractor’s failure to
obtain such consent.

       

      8.           FURTHER
ASSURANCES

       

      8.1           Cooperation and
Assistance.  Contractor will, at Company’s request,
(a) cooperate with and assist Company, both during and after the term of
this Agreement, in perfecting, maintaining, protecting, and enforcing Company’s
rights in the Work Product, and (b) execute and deliver to Company any
documents deemed necessary or appropriate by Company in its discretion to
perfect, maintain, protect, or enforce Company’s rights in the Work Product or
otherwise carry out the purpose of this Agreement.  Company will
reimburse Contractor for any reasonable out-of-pocket expenses actually incurred
by Contractor in fulfilling Contractor’s obligations under Section 8.1,
including the preparation and filing of the patent applications under Section
4.1 (a),(b), and (c).  Without limiting the generality of the
foregoing:

       

      8.1.1                      Copyright
Assignments.  Contractor will execute and deliver to Company,
at Company’s request, a copyright assignment in the form of Exhibit B for
any Work Product subject to copyright protection.

       

      8.1.2                      Patent
Assignments.  Contractor will execute and deliver to Company,
at Company’s request, a patent application assignment in the form of Exhibit C for
any invention conceived or reduced to practice by Contractor in connection with
performing the Services for which Company elects to file a patent
application.  At Company’s request, Contractor will promptly record
such assignment with the United States Patent and Trademark Office.

       

      8.2           Power of Attorney.  Contractor hereby
irrevocably designates and appoints Company and its duly authorized officers and
agents as Contractor’s agent and attorney-in-fact to act for and in Contractor’s
behalf to execute, deliver and file any and all documents with the same legal
force and effect as if executed by Contractor, if Company is unable for any
reason to secure Contractor’s signature on any document needed in connection
with the actions described in Section 8.1.  Contractor
acknowledges that this appointment is coupled with an interest.

       

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

       

      9.           CONTRACTOR
REPRESENTATIONS AND WARRANTIES

         

      

      9.1           General.  Contractor
represents, warrants, and covenants that:

       

      
        	
                 
      

              	
                (a)

              	
                Contractor
      will in the course of performing the Services, use his
      best  personal and professional efforts to avoid infringement or
      misappropriation of any Intellectual Property Right of any other person,
      and will not knowingly or recklessly infringe or misappropriate any
      Intellectual Property Right of any other
person;

              

      

       

      
        	
                 
      

              	
                (b)

              	
                neither
      the Work Product nor any element thereof will be subject to any
      restriction, mortgage, lien, claim, pledge, security interest, or
      encumbrance when delivered by Contractor to
  Company;

              

      

       

      
        	
                 
      

              	
                (c)

              	
                Contractor
      will not grant, directly or indirectly, any right or interest in the Work
      Product (other than any Background Technology it may contain) to any other
      person;

              

      

       

      
        	
                 
      

              	
                (d)

              	
                Contractor
      has full right, power, and authority to enter into and perform this
      Agreement without the consent of any third party, including the right to
      grant all licenses granted by Contractor in this
  Agreement;

              

      

       

      
        	
                 
      

              	
                (e)

              	
                All
      individuals who contribute to or participate in the conception, creation,
      or development of the Work Product will have unconditionally and
      irrevocably assigned all of their right, title, and interest in and to the
      Work Product (and all Intellectual Property Rights thereto) to Contractor
      (or directly to Company) before being allowed to begin performing
      Services;

              

      

       

      
        	
                 
      

              	
                (f)

              	
                Contractor
      will comply with all laws, regulations, and ordinances applicable to
      Contractor’s performance of the Services and Contractor’s other
      obligations under this Agreement, including export control laws, and has
      obtained (or before performing the Services will obtain) all governmental
      permits and licenses required for Contractor to perform the Services and
      Contractor’s other obligations under this Agreement;
  and

              

      

       

      
        	
                 
      

              	
                (g)

              	
                Contractor
      will take all necessary or reasonable precautions to prevent injury to any
      person (including Company employees) or damage to any property (including
      Company property) during the term of this
  Agreement.

              

      

       

      9.2           Performance.  Contractor
warrants that Contractor will use best personal and  professional
efforts to assure that the Work Product fully conforms to the specifications,
requirements, and other terms in any applicable Statement of Work and this
Agreement.  In the event of a breach of this warranty, without
limiting any other rights or remedies Company may have, Contractor will promptly
repair or replace the Work Product at no additional charge to
Company.  If the breach has not been fully cured within thirty (30)
days after Contractor received notice thereof (or such longer period of time as
Company may, in its discretion, give Contractor to cure the breach, by written
notice to Contractor) (the “Cure Period”), Company may
withhold issuance of any shares and Contractor will return all shares previously
issued to Contractor under the applicable Statement of Work, which will
automatically terminate upon the expiration of the Cure Period.

       

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

       

      9.3           Investment and Related
Representations.

       

      (a)           Contractor
is aware that neither the Shares nor the offer or sale thereof to the Contractor
has been registered under the Securities Act of 1933, as amended (“Securities Act”), or under any
state securities law.  Contractor further understands that no
registration statement has been filed with the Securities and Exchange
Commission (“SEC”), nor
with any other state regulatory authority and that, as a result, any benefit
which might normally accrue to an investor such as Contractor by an impartial
review of such a registration statement by the SEC or other regulatory
commission will not be forthcoming.  Contractor acknowledges that the
Shares are being offered pursuant to certain exemptions from Section 5 of the
Securities Act for offers and sale of securities not involving a public
offering.  Contractor understands that the Shares are “restricted”
securities under U.S. federal securities laws inasmuch as they are being
acquired from the issuer and that under such laws and applicable regulations
such securities may be resold without registration under the Securities Act only
in certain limited circumstances.  Contractor represents that it is
familiar in general with Rule 144 under the Securities Act (which provides
generally for a holding period and limitations on the amount of “restricted”
securities that can be sold in compliance with the rule upon completion of the
holding period), and understands the resale limitations imposed thereby and by
the Securities Act.  Contractor understands that each certificate
representing the Shares and any other securities issued in respect of the Shares
upon any stock split, stock dividend, recapitalization, merger or similar event
(unless no longer required in the opinion of counsel for Company) shall be
stamped or otherwise imprinted with legends substantially in the following forms
(in addition to any legend that may now or hereafter be required by applicable
state law):

       

      “THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES
LAWS.  THEY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED
OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH
RESPECT TO SUCH SECURITIES, OR DELIVERY OF AN OPINION OF COUNSEL SATISFACTORY TO
THE ISSUER OF SUCH SECURITIES THAT SUCH OFFER, SALE, TRANSFER, PLEDGE OR
HYPOTHECATION IS IN FULL COMPLIANCE WITH THE SECURITIES ACT OF 1933, AS AMENDED,
OR UNLESS SOLD IN COMPLIANCE WITH RULE 144 UNDER SUCH ACT.”

       

      Contractor
agrees that it will not sell any portion of the Shares except pursuant to
registration under the Securities Act or pursuant to an available exemption from
registration under the Securities Act.  Contractor understands that
Company shall refuse to transfer the Shares except in accordance with the
restrictions and agreements of Contractor set forth in this Section
9.3.

       

      (b)           The
Shares are being acquired by Contractor pursuant to this Agreement for
investment and not with a view to the public resale or distribution thereof
unless pursuant to an effective registration statement or exemption under the
Securities Act.

       

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

       

      (c)           Contractor
is acquiring the Shares after private negotiation and has not been attracted to
the acquisition of the Shares by any press release, advertising or
publication.

       

      (d)           Contractor
acknowledges that he is able to protect its interests in connection with the
acquisition of the Shares and can bear the economic risk of investment in such
securities without producing a material adverse change in Contractor’s financial
condition.  Contractor otherwise has such knowledge and experience in
financial or business matters that Contractor is capable of evaluating the
merits and risks of the investment in the Shares.

       

      (e)           Contractor
acknowledges that he has received and reviewed the following documents: (a) the
Company’s Annual Report on Form 10-K for the fiscal year ended December 31,
2007 and (b) the Company’s Quarterly Report on Form 10-Q for the quarter ended
September 30, 2008, both of which provide important information concerning the
Company.  Contractor further represents and warrants that he has
received from the Company all of the financial and other information Contractor
considers necessary or appropriate in order to decide to accept the
Shares  in consideration of the Services and
Deliverables.  Contractor has been given full and complete access to
the Company’s books and records in order that Contractor may complete, to his
satisfaction, an investigation of the Company and its business and prospects,
and Contractor has been given every opportunity to ask questions of, and to
receive answers from, the Company regarding its business and prospects, in order
to enable Contractor to evaluate the merits of investing in the
Shares.

       

      10.           INDEMNIFICATION.  Contractor
will indemnify and hold harmless Company and its affiliates, employees, and
agents from and against any and all liabilities, losses, damages, costs, and
other expenses (including attorneys’ and expert witnesses’ costs and fees)
arising from or relating to any breach of any representation, warranty,
covenant, or obligation of Contractor in this Agreement or any intentional
misconduct or negligence by Contactor or any of Contractor’s agents or
subcontractors in performing the Services.  In the event of any
third-party claim, demand, suit, or action (a “Claim”) for which Company (or
any of its affiliates, employees, or agents) is or may be entitled to
indemnification hereunder, Company may, at its option, require Contractor to
defend such Claim at Contractor’s sole expense.  Contractor may not
agree to settle any such Claim without Company’s express prior written consent,
which will not be unreasonably withheld.

       

      11.           NONSOLICITATION.  During
the term of this Agreement and for twelve (12) months thereafter, Contractor
will not directly or indirectly solicit, induce, or attempt to induce any
employee or independent contractor to terminate or breach any employment,
contractual, or other relationship with Company.

       

      12.           TERM
AND TERMINATION.

       

      12.1           Term.  This
Agreement shall commence on the Effective Date and automatically terminate on
the twelve (12) month anniversary of the Effective Date, unless the Company and
Contractor mutually agree to an extension period(s), subject to the earlier
termination provisions of Sections 12.2 and 12.3 below.

       

       

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

       

      12.2           Termination by
Company.  Company may terminate this Agreement or any Statement
of Work at any time with or without cause for its convenience, effective upon
ten (10) days notice to Contractor.  In addition, Company may
terminate this Agreement or any Statement of Work immediately upon written
notice to Contractor if Contractor breaches this Agreement or the Statement of
Work, as the case may be, and does not fully cure the breach to Company’s
satisfaction within thirty (30) days after Company gives notice of the breach to
Contractor.

       

      12.3           Termination by
Contractor.  Contractor may terminate this Agreement at any
time if there is no Statement of Work then in effect, effective upon ten (10)
days prior written notice to Company.  In addition, Contractor may
terminate this Agreement or any Statement of Work immediately upon written
notice to Company if Company fails to pay an undisputed amount owed to
Contractor under this Agreement or the Statement of Work, as the case may be,
when due and does not make the payment within thirty (30) days after Contractor
gives notice of the breach to Company.

       

      12.4           Effects
of Termination

       

      12.4.1                      Survival.  Sections
1 (Definitions), 3 (Independent Contractor Relationship), 4 (Compensation), 5
(Confidentiality), 7 (Work Product), 8 (Further Assurances), 9 (Contractor
Representations and Warranties), [10 (Indemnification),] [11 (Insurance),] 12
(Nonsolicitation) (to the extent provided therein), 12.3 (Effects of
Termination), and 14 (General Provisions) will survive any termination or
expiration of this Agreement.  Termination or expiration of this
Agreement will not affect either Party’s liability for any breach of this
Agreement such Party may have committed before such expiration or
termination.

       

      12.4.2                      Return of Company
Property.  Upon termination of this Agreement or earlier as
requested by Company, Contractor will deliver to Company any and all documents,
prototypes, samples, and other materials (including all copies thereof) in
Contractor’s possession or control that contain, summarize, or disclose any Work
Product (in whatever stage of development or completion) or any Intellectual
Property provided by or on behalf of Company.

       

      13.           GENERAL
PROVISIONS

         

      

      13.1           Governing Law;
Venue.  This Agreement is governed by the laws of the State of
Nevada without reference to any conflict of laws principles that would require
the application of the laws of any other jurisdiction.  The United
Nations Convention on Contracts for the International Sale of Goods does not
apply to this Agreement.  Contractor irrevocably consents to the
personal jurisdiction of the state and federal courts located in Clark County,
Nevada for any suit or action arising from or related to this Agreement, and
waives any right Contractor may have to object to the venue of such
courts.  Contractor further agrees that these courts will have
exclusive jurisdiction over any such suit or action initiated by Contractor
against Company.  Contractor also irrevocably waives any right
Contractor may have to a jury trial.

       

      13.2           Severability. If any
provision of this Agreement is, for any reason, held to be invalid or
unenforceable, the other provisions of this Agreement will be unimpaired and the
invalid or unenforceable provision will be deemed modified so that it is valid
and enforceable to the maximum extent permitted by law.

       

       

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

       

      13.3           No Assignment.  This
Agreement and Contractor’s rights and obligations under this Agreement may not
be assigned, delegated, or otherwise transferred, in whole or in part, by
operation of law or otherwise, by Contractor without Company’s express prior
written consent.  Any attempted assignment, delegation, or transfer in
violation of the foregoing will be null and void.  Company may assign
this Agreement, or any of its rights under this Agreement to any third party
with or without Contractor’s consent.

       

      13.4           Notices.

       

      Any and
all notices or other communications or deliveries required or permitted to be
provided hereunder shall be in writing and shall be deemed given and effective
on the earliest of (a) the date of transmission, if such notice or communication
is delivered via facsimile at the facsimile number set forth in this Section
14.4, (b) upon delivery to the address set forth in this Section 14.4 if sent by
U.S. nationally recognized overnight courier service, or (c) upon actual receipt
by the Party to whom such notice is required to be given.  The address
for such notices and communications shall be as follows:

      
        	
                 
      

              	 

      

      
        	
                 
      

              	
                If
      to Company:

              	
                CPC
      of America, Inc.

              

      

      
        	
                 
      

              	 	
                5348
      Vegas Drive, #89

              

      

      
        	
                 
      

              	 	
                Las
      Vegas, NV  89108

              

      

      
        	
                 
      

              	 	
                Attn:  Rod
      A. Shipman

              
	 	 	 
	 	If to Contractor:	Olexander
      Hnojewyj
	 	 	1042
      Wilmington Way
	 	 	Emerald
      Hills, CA 94062

      

      

      or such
other address as may be designated in writing hereafter, in the same manner, by
such Party.

       

      13.5           Legal Fees. The
prevailing Party in any litigation between the Parties relating to this
Agreement will be entitled to recover such Party’s reasonable attorneys’ fees
and court costs, in addition to any other relief that such Party may be
awarded.

       

      13.6           Remedies. Company’s and
Contractor’s remedies for any breach of this Agreement will include damages,
injunctive relief, specific performance, and restitution.  Company and
Contractor acknowledges that any breach of this Agreement would cause
irreparable injury to Company for which monetary damages would not be an
adequate remedy and, therefore, Company and Contractor will be entitled to
injunctive relief (including specific performance).  The rights and
remedies provided to each Party in this Agreement are cumulative and in addition
to any other rights and remedies available to such Party at law or in
equity.

       

      13.7           Construction.  Section headings
are included in this Agreement merely for convenience of reference; they are not
to be considered part of this Agreement or used in the interpretation of this
Agreement.  When used in this Agreement, “including” means “including
without limitation.”  Whenever Company’s consent or approval is
required under this Agreement, Company may grant or deny its consent or approval
in its sole and absolute discretion, except as otherwise expressly provided
herein.  No rule of strict construction will be applied in the
interpretation or construction of this Agreement.  In the event of any
conflict between this Agreement and a Statement of Work, this Agreement will
control unless the Statement of Work expressly refers to the Parties’ intent to
alter the terms of this Agreement with respect to that Statement of
Work.

       

       

      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

       

      13.8           Waiver.  All waivers must
be in writing and signed by the Party to be charged.  Any waiver or
failure to enforce any provision of this Agreement on one occasion will not be
deemed a waiver of any other provision or of such provision on any other
occasion.

       

      13.9           Time Is of the Essence. Time
is of the essence in the performance of the Services and Contractor’s other
obligations under this Agreement.

       

      13.10         Entire Agreement;
Amendments. This Agreement is the final, complete, and exclusive
agreement of the Parties with respect to the subject matter hereof and
supersedes and merges all prior or contemporaneous communications and
understandings between the Parties, including without limitation that certain
(i) Advisor Agreement dated November 24, 2008 between Company’s wholly-owned
subsidiary, MedEnclosure, L.L.C., and Contractor and (ii) Letter of Intent dated
December 5, 2008 between Company and Contractor.  No modification of
or amendment to this Agreement will be effective unless in writing and signed by
the Party to be charged.

       

      In Witness
Whereof, the Parties have executed this Agreement as of the Effective
Date.

       

      
      

       

      
        	 	“COMPANY”
	 	 	 
	 	
                 CPC
      of America, Inc.,

                a Nevada
      corporation

              
	 	 	 
	 	By:	        
      /s/ Rod A. Shipman
	 	 	Rod A.
    Shipman
	 	 	Chief Executive
      Officer
	 	 	 
	 	“CONTRACTOR”
	 	 
	 	        
      /s/ Olex Hnojewyj
	 	
                Olex
      Hnojewyj

                an individual

              

      

       

      16

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Exhibit
A

       

      Form
Statement of Work

       

      This
Statement of Work is incorporated into the Product Development Agreement dated
March 9, 2009 by and between CPC of America, Inc., a Nevada corporation (“Company”), and Olex Hnojewyj,
an individual (“Contractor”) (for the
purposes of this Statement of Work, the “Agreement”).  This
Statement of Work describes Services and Deliverables to be performed and
provided by Contractor pursuant to the Agreement.  If any item in this
Statement of Work is inconsistent with the Agreement prior to such
incorporation, the terms of this Statement of Work will control, but only with
respect to the Services to be performed under this Statement of
Work.  All capitalized terms used and not expressly defined in this
Statement of Work will have the meanings given to them in the
Agreement.

      

      1.           Fees.  In full
consideration for Contractor’s timely and satisfactory performance of the
Services and providing of the Deliverables in accordance with this Statement of
Work, Contractor will be compensated by Company’s issuance to Contractor a
number of shares of Common Stock equal to the quotient obtained by dividing
$______ by the Market Price on the date of ____________.

      

      2.           Business,
Technical, and Other Specifications

       

      

       

      

       

      

       

      

       

      

       

      

       

       

      o                
Additional sheets attached

       

      

       

      

       

      

       

      
        
          
          

        

        
          A-1

          
            

          

        

        
          
          

        

      

      

       

      3.           Scope
of Services

       

      

       

      

       

       

      

       

      

       

       

      o          
Additional sheets attached

       

      

       

      4.           Development
Schedule.  Attach milestones and timeline.

       

      (Check box if none:  o  )

       

      

       

      

       

      

       

      
        
          
          

        

        
          A-2

          
            

          

        

        
          
          

        

      

      

       

      

       

      

       

       

      

       

       

      
        
          	
                	
                  o

                	
                  Additional
      sheets attached

                

        

      

       

       

      5.           Background
Technology Disclosure

       

      a.           Except
as listed in Section 5(b) below, the following is a complete list of all
Background Technology:

       

      
        	
              	
                o

              	
                None

              

      

                 

      
        	
              	
                o

              	
                See
      immediately below:

              

      

                 

      
        	
              	
                o

              	
                ____________________________________

                 

                ____________________________________

              

      

       

      
        	
              	
                o

              	
                
                  Additional sheets
attached

                

              

      

       

      b.           Due
to a prior confidentiality agreement, Contractor cannot complete the disclosure
under Section 5(a) above with respect to the following Background
Technology:

       

      
        	
                Invention
      or Improvement and reason for not disclosing more
    information

              	
                Party(ies)
      Imposing Confidentiality Obligations

              	
                Relationship

              

      

       

       

      
        
          
          

        

        
          A-3

          
            

          

        

        
          
          

        

      

       

      1.

      2.

      3.

      
        4.

        5.

      

       

      
         

        
          	
                	
                  o

                	
                  
                    Additional sheets
attached

                  

                

        

                   

      

      
        	
                6. 

              	
                Third-Party
      Technology Disclosure

              

      

       

      The
following is a complete list of all Third-Party Technology:

       

      
        
          	
                  o

                	
                  None

                

        

                   

        
          	
                  o

                	
                  See
      immediately below:

                

        

                   

        
          	
                  o

                	
                  ____________________________________

                   

                  ____________________________________

                

        

         

         

        
          	
                  o

                	
                  
                    Additional sheets
attached

                  

                

        

        
 

      

       

      7.           Items
(if any) licensed by Company to Contractor solely for the purpose of
Contractor’s performance of the Services required in this Statement of Work, and
any additional licensing restrictions.

       

      

       

      
        
          
          

        

        
          A-4

          
            

          

        

        
          
          

        

      

      

       

      
         

        
          	
                	
                  o

                	
                  
                    Additional sheets
attached

                  

                

        

        

      

       

      All
licensed items are provided "AS IS", and Company expressly disclaims any and all
warranties, whether implied, express, or statutory, including the implied
warranties of merchantability, fitness for a particular purpose, title,
noninfringement, accuracy, and quiet enjoyment.

       

      

      
      

       

      
        	Company	 	Contractor
	
                 

                Signed:

              	 	 	Signed:	 
	
                 

                Name: 

              	 	 	 	 
	
                 

                Title: 

              	 	 	 	 
	
                 

                Dated: 

              	 	 	
                Dated: 

              	 

      

      
A-5

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Exhibit
B

       

      ASSIGNMENT
OF COPYRIGHT

       

       

      For good
and valuable consideration which has been received, the undersigned sells,
assigns and transfers to [Company,] a [__________] corporation, and its
successors and assigns, the copyright in and to the following work, which was
created by the following indicated author(s):

       

      Title:
__________________________________________________________________________

       

      Author(s):
______________________________________________________________________

       

      Copyright
Office Identification No. (if any):

       

      and all
of the right, title and interest of the undersigned, vested and contingent,
therein and thereto.

       

      Executed this _______ day of
__________, 20___.

       

      Signed:
________________________________

       

      Printed
Name: ___________________________

       

      B-1

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Exhibit
C

       

      ASSIGNMENT
OF PATENT APPLICATIONS

       

      
        	
                Company

              	
                 

              	 	
                Contractor

              	 
	
                 

                Name:

              	
                 

              	 	
                 

                Name:                                                    

              	 
	
                 

                Entity
      Type:

              	 	 	
                 

                Entity
      Type: 

              	 
	
                 

                Address:

              	 	 	
                 

                Address: 

              	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 

      

       

      Whereas the person identified as
Contractor above (“Contractor”) owns all right,
title, and interest in and to the U.S. patent applications listed in Schedule
C-1 (the “Patent
Applications”); and

       

      Whereas the entity identified as
Company above (“Company”) desires to acquire
Contractor’s entire right, title, and interest in and to the Patent
Applications, and in and to the inventions disclosed in the Patent Applications,
and to the Future Patents (as hereinafter defined);

       

      Now
therefore, for and in consideration of one dollar ($1.00) payable upon demand
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Contractor does hereby sell, assign, and transfer to
Company and its successors, assigns, and legal representatives, all right,
title, and interest in and to the Patent Applications, and to all future patents
which may be granted therefor throughout the world, and all divisions, reissues,
reexaminations, substitutions, continuations, continuations-in-part, utility
conversions, and extensions thereof (collectively, “Future Patents”), together
with all claims, causes of action, and damages for past infringement, if any, of
said Patent Applications and Future Patents; and Contractor hereby authorizes
and requests the United States Patent and Trademark Office and other patent
offices throughout the world to issue all Future Patents resulting therefrom
(insofar as Contractor’s interest is concerned) to Company.

       

      Contractor
also hereby sells, assigns, and transfers to Company and its successors,
assigns, and legal representatives all right, title, and interest to the
inventions disclosed in the Patent Applications and Future Patents throughout
the world, including the right to file applications for and obtain patents,
utility models, and industrial models, and designs for such inventions in
Company’s own name throughout the world including all rights of priority, all
rights to publish cautionary notices reserving ownership of such inventions, and
all rights to register such inventions in appropriate registries; and Contractor
further agrees to execute any and all powers of attorney, applications,
assignments, declarations, affidavits, and any other papers in connection
therewith reasonably necessary to perfect such right, title, and interest in
Company and its successors, assigns, and legal representatives.

       

       

      
        
          
          

        

        
          C-1

          
            

          

        

        
          
          

        

      

       

      In
witness whereof, Contractor has caused this instrument to be executed by its
duly authorized corporate officer, effective this ____ day of _________,
200_.

      
      

       

       

      
        	 	
                “Contractor”

                 

                 

              	 
	 	Signed:	 
	 	
                 

                Name:

              	 
	 	
                 

                Title: 

              	 

      

       

       

       

      
        
          

        

      

       

      State
of:

       

      County
of:

       

      

       

      The preceding Assignment was
acknowledged before me this _ day of ____ by __________.

       

      

       

      _____________________________

       

      Notary Public

       

      My
Commission Expires:

       

       

      
        
          
          

        

        
          C-2

          
            

          

        

        
          
          

        

      

       

      Schedule
C-1

       

      Patent
Applications

       

      
        	
                Application
      No.

              	
                Title

              	
                Filing
      Date

              
	 
      	 
      	 
      

      

      

       

      

       

       

       

       

      Schedule
C-1Exhibit 4.1

 

REGISTRATION RIGHTS AGREEMENT

 

This
Registration Rights Agreement, dated as of March 12, 2009, is entered into
by and among Vertex Pharmaceuticals Incorporated, a Massachusetts corporation
(the “Company”), ViroChem Pharma Inc., a corporation incorporated under
the laws of Canada (“ViroChem”), and each of the persons identified as a
vendor on the signature pages hereto (each, a “ViroChem Vendor” and
collectively, the “ViroChem Vendors”), in connection with the execution
of that certain Share Purchase Agreement, dated as of the date hereof  (the “Purchase Agreement”) among the
Company, ViroChem and the ViroChem Vendors.

 

As
an inducement to the ViroChem Vendors to enter into the Purchase Agreement, the
Company and ViroChem agree with the ViroChem Vendors, for the benefit of the
Holders (as defined below), as follows:

 

1.                                                               Certain Definitions.

 

For
purposes of this Registration Rights Agreement, the following terms shall have
the following meanings:

 

(a)          “Affiliate” has the meaning set forth
in Rule 405 under the Securities Act, except where otherwise expressly
provided.

 

(b)         “Agreement” means this Registration
Rights Agreement, as the same may be amended from time to time pursuant to the
terms hereof.

 

(c)          “Business Day” means any day on which
the NASDAQ Global Select Market, NASDAQ Global Market and NASDAQ Capital Market
are open for trading.

 

(d)         “Commission” means the Securities and
Exchange Commission, or any other federal agency at the time administering the
Exchange Act or the Securities Act, whichever is the relevant statute for the
particular purpose.

 

(e)          “Common Stock” means the common stock
of the Company, par value $0.01 per share.

 

(f)            “Company” has the meaning specified in
the first paragraph of this Agreement.

 

(g)         “Deferral Notice” has the meaning
assigned thereto in Section 3(b).

 

(h)         “Deferral Period” has the meaning
assigned thereto in Section 3(b)

 

(i)             “Effective Date” means the date on
which the Shelf Registration Statement becomes effective.

 

(j)             “Effective Period” has the meaning assigned
thereto in Section 2(c).

 

 

(k)          “Exchange Act” means the Securities
Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.

 

(l)             “Holder” means each holder, from time
to time, of Registrable Shares (including the ViroChem Vendors).

 

(m)       “Material Event” has the meaning
assigned thereto in Section 3(a)(iv).

 

(n)         “Majority Holders” shall mean, on any
date, holders of the majority of the Shares constituting Registrable Shares.

 

(o)         “Notice and Questionnaire” means a written
notice delivered to the Company containing substantially the information called
for by the Form of Selling Shareholder Notice and Questionnaire attached
as Schedule B hereto.

 

(p)         “Notice Holder” means, on any date,
any Holder that has delivered a Notice and Questionnaire to the Company on or
prior to such date.

 

(q)         “Person” means a corporation,
association, partnership, organization, business, individual, government or
political subdivision thereof or governmental agency.

 

(r)            “Prospectus” means the prospectus
included in any Shelf Registration Statement, as amended or supplemented by any
amendment or prospectus supplement, including post-effective amendments, and
all materials incorporated by reference or explicitly deemed to be incorporated
by reference in such Prospectus.

 

(s)          “Purchase Agreement” has the meaning
specified in the first paragraph of this Agreement.

 

(t)            “Registrable Shares” means the Shares
until the earliest of (i) their effective registration under the
Securities Act and the resale of all such Shares in accordance with the Shelf
Registration Statement, (ii) the expiration of the holding period
applicable to such Shares under Rule 144(b)(1), or (iii) the date on
which all such Shares cease to be outstanding.

 

(u)         “Reference Share Price” shall have the
meaning set forth in the Purchase Agreement.

 

(v)         “Rule 144,” “Rule 405”
and “Rule 415” mean, in each case, such rule as promulgated
under the Securities Act.

 

(w)               “Securities Act” means the Securities
Act of 1933, as amended, and the rules and regulations promulgated
thereunder.

 

(x)                   “Shares” means the shares of Common
Stock issued to the ViroChem Vendors pursuant to the Purchase Agreement, as
listed on Schedule A.

 

2

 

(y)                 “Shelf Registration Statement” means
the shelf registration statement referred to in Section 2(a), as amended
or supplemented by any amendment or supplement, including post-effective
amendments, and all materials incorporated by reference or explicitly deemed to
be incorporated by reference in such Shelf Registration Statement.

 

(z)                   “ViroChem” has the meaning specified
in the first paragraph of this Agreement.

 

(aa)            “ViroChem Vendors” has the meaning
specified in the first paragraph of this Agreement.

 

Unless
the context otherwise requires, any reference herein to a “Section” or “clause”
refers to a Section or clause, as the case may be, of this Agreement, and
the words “herein,” “hereof” and “hereunder” and other words of similar import
refer to this Agreement as a whole and not to any particular Section or
other subdivision.  Unless the context
otherwise requires, any reference to a statute, rule or regulation refers
to the same (including any successor statute, rule or regulation thereto)
as it may be amended from time to time.

 

2.                                                               Registration Under the
Securities Act.

 

(a)          The Company agrees to file under the
Securities Act a shelf registration statement providing for the registration
of, and the sale on a continuous or delayed basis by the Holders of, all of the
Registrable Shares, pursuant to Rule 415 of the Securities Act or any
similar rule that may be adopted by the Commission.  The Company shall file the Shelf Registration
Statement with the U.S. Securities Exchange Commission, and cause the Shelf
Registration Statement to become effective, one (1) Business Day after the
Closing Date (as defined in the Purchase Agreement) unless both (a) the
cost of ViroChem, determined as
of the Closing Date in accordance with U.S. generally accepted accounting
principles (and after giving effect to any adjustment pursuant to Section 2.05(4) of
the Purchase Agreement, would exceed, with respect to the Company, the
condition of significance in the definition of significant subsidiary in Rule 1-02(w)(1) of
Regulation S-X under the Securities Act at the 50% percent level, and (b) ViroChem
has not delivered to the Company the Form 8-K Financial Statements (as
defined in the Purchase Agreement) at least three (3) Business Days prior
to Closing Date.  In the event that the
Company does not file with the U.S. Securities Exchange Commission and cause
the Shelf Registration Statement to become effective one (1) Business Day
after the Closing Date, by reason of clauses (a) and (b) above,
the Company and the ViroChem shall cooperate, at the expense of the Company, to
cause the Form 8-K Financial Statements to be completed as promptly as
practicable after the Closing Date and the Company shall file the Shelf
Registration Statement, and cause the Shelf Registration Statement to become
effective, no later than three (3) Business Days after completion of the Form 8-K
Financial Statements. The registration statement will be filed by the Company
pursuant to and in accordance with general instruction I.D of Form S-3 and
will become effective automatically upon filing with the Commission.  In no event will

 

3

 

the method(s) of distribution of the Registrable Shares take the
form of an underwritten offering without the prior agreement of the Company.

 

(b)         The Company agrees to name as a selling
shareholder in the Shelf Registration Statement, at the time of its
effectiveness, each Holder from which the Company has received a Notice and
Questionnaire, which is attached hereto as Schedule B, together with any other
information the Company may reasonably request from such Notice Holder on or
prior to the third (3rd) day before the Effective Date.

 

(c)                                  The Company agrees to use its reasonable best
efforts to keep such Shelf Registration Statement continuously effective until
each of the Registrable Shares ceases to be a Registrable Share, but in no
event past the six (6) month anniversary of the Effective Date (the “Effective
Period”).  None of the Company’s
securityholders (other than Holders of Registrable Shares) shall have the right
to include any of the Company’s securities in the Shelf Registration Statement.

 

(d)                                 The Company further agrees that it shall
cause the Shelf Registration Statement and the related Prospectus and any
amendment or supplement thereto, as of the Effective Date or the effective date
of such amendment or supplement, as applicable, (i) to comply in all
material respects with the applicable requirements of the Securities Act; and (ii) not
to contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make the statements
therein (in the case of the Prospectus, in the light of the circumstances under
which they were made) not misleading, and the Company agrees to furnish to the
Holders of the Registrable Shares copies of any supplement or amendment prior
to its being used or promptly following its filing with the Commission; provided, however, that the Company shall
have no obligation to deliver to Holders of Registrable Shares copies of any
amendment consisting exclusively of an Exchange Act report or other Exchange
Act filing filed electronically with the Commission or otherwise publicly
available on the Company’s website.  If
the Shelf Registration Statement, as amended or supplemented from time to time,
ceases to be effective for any reason at any time during the Effective Period
(other than because all Registrable Shares registered thereunder shall have
been sold pursuant thereto or shall have otherwise ceased to be Registrable
Shares), the Company shall use its reasonable best efforts to obtain the prompt
withdrawal of any order suspending the effectiveness thereof.

 

(e)                                  Each Holder of Registrable Shares agrees that
if such Holder wishes to sell Registrable Shares pursuant to the Shelf
Registration Statement and related Prospectus, it will do so only in accordance
with this Section 2(e) and Section 3(b).  From and after the Effective Date, the
Company shall, as promptly as is practicable after the date a Notice and Questionnaire
is delivered by a Holder, together with any other information the Company may
reasonably request from such Holder, and in any event within fifteen (15)
Business Days after such date,

 

(i)                                     if required by applicable law, file with the
Commission a post-effective amendment to the Shelf Registration Statement or
prepare and, if required by applicable law, file a supplement to the related
Prospectus or a

 

4

 

supplement
or amendment to any document incorporated therein by reference or file any
other required document so that the Holder delivering such Notice and
Questionnaire is named as a selling shareholder in the Shelf Registration
Statement and the related Prospectus in such a manner as to permit such Holder
to deliver such Prospectus to purchasers of the Registrable Shares in
accordance with applicable law and, if the Company shall file a post-effective
amendment to the Shelf Registration Statement, use its reasonable best efforts
to cause such post-effective amendment to be declared effective under the
Securities Act as promptly as is practicable;

 

(ii)                                  provide such Holder copies of any documents
filed pursuant to Section 2(e)(i); and

 

(iii)                               notify such Holder as promptly as practicable after the effectiveness
under the Securities Act of any post-effective amendment filed pursuant to Section 2(e)(i);

 

provided, that if such Notice and Questionnaire is delivered during a Deferral
Period, the Company shall so inform the Holder delivering such Notice and
Questionnaire and shall take the actions set forth in clauses (i), (ii) and
(iii) above upon expiration of the Deferral Period in accordance with Section 3(b).  Notwithstanding anything contained herein to
the contrary, the Company shall be under no obligation to name any Holder that
is not a Notice Holder as a selling shareholder in any Shelf Registration
Statement or related Prospectus; provided,
however, that any Holder that becomes a Notice Holder pursuant to
the provisions of this Section 2(e) (whether or not such Holder was a
Notice Holder at the time the Shelf Registration Statement was declared
effective) shall be named as a selling shareholder in the Shelf Registration
Statement or related Prospectus in accordance with the requirements of this Section 2(e).

 

(f)                                    If a shelf registration statement covering
each Notice Holder’s Registrable Shares is not filed with the Commission within
the time frame specified in Section 2(a) above (a “Registration
Default”), with respect to the first 60-day period immediately following
the occurrence of the first Registration Default, the Company agrees to pay
each Notice Holder in an amount equal to the product of .25% multiplied by the
Reference Share Price, after giving effect to any adjustment pursuant to Section 2.05(4) of
the Purchase Agreement, for each Registrable Share held by such Notice Holder
for each day that a registration statement has not been filed.  The amount of the liquidated damages shall
increase to an amount equal to the product of .5% multiplied by the Reference
Share Price, after giving effect to any adjustment pursuant to Section 2.05(4) of
the Purchase Agreement for each Registrable Share held by such Notice Holder
for each day that a registration statement has not been filed with respect to the
period beginning on the 61st day
following the occurrence of the Registration Default and ending on the date the
Registration Default has ended.  The
aggregate amount of payments under this first paragraph of Section 2(f) for
all Registration Defaults shall not exceed $90 million dollars.  These amounts will be paid to the Notice
Holders, in cash, on a weekly basis. 
Notwithstanding the foregoing, the Company shall not be liable for any
amounts under

 

5

 

this
Section 2(f) if the failure to file with the Commission a shelf
registration statement covering the Notice Holders’ Registrable Shares within
the time frame specified in Section 2(f) above is due solely to the
Company’s previous independent registered public accounting firm’s failure to
provide the Company in a timely manner any consent of such firm that must be
filed as an exhibit to such registration statement.

 

The right to receive these payments shall be
in addition to, and not in limitation of, all other remedies to which the
Notice Holders may be entitled by reason of the Company’s failure to file with
the Commission a shelf registration statement covering the Notice Holders’
Registrable Shares within the time frame specified in Section 2(a) above.

 

3.                                                               Registration Procedures.

 

The
following provisions shall apply to the Shelf Registration Statement filed
pursuant to Section 2:

 

(a)                                  The Company shall:

 

(i)                                     prepare and file with the Commission a
registration statement with respect to the shelf registration on any form which
may be utilized by the Company (which form the parties hereto agree will be Form S-3,
pursuant to general instruction I.D thereto) and which shall permit the
disposition of the Registrable Shares in accordance with the intended method or
methods thereof, as specified in writing by the Holders of the Registrable
Shares;

 

(ii)                                  before filing the Shelf Registration
Statement, furnish to counsel for ViroChem copies of all documents proposed to
be filed and use reasonable best efforts to reflect in each such document when
so filed with the Commission such comments as such counsel reasonably shall
propose within two (2) Business Days of the delivery of such copies to
such counsel;

 

(iii)                               use its reasonable best efforts to prepare and file with the Commission
such amendments and post-effective amendments to the Shelf Registration
Statement and file with the Commission any other required document as may be
necessary to keep such Shelf Registration Statement continuously effective
until the expiration of the Effective Period; cause the related Prospectus to
be supplemented by any required prospectus supplement, and as so supplemented
to be filed pursuant to Rule 424 (or any similar provisions then in force)
under the Securities Act; and comply with the provisions of the Securities Act
applicable to it with respect to the disposition of all Registrable Shares
covered by such Shelf Registration Statement during the Effective Period in
accordance with the intended methods of disposition by the sellers thereof set
forth in such Shelf Registration Statement as so amended or such Prospectus as
so supplemented;

 

(iv)                              promptly notify the Notice Holders of Registrable Shares (A) when
such Shelf Registration Statement or the Prospectus included therein or any

 

6

 

amendment
or supplement to the Prospectus or post-effective amendment has been filed with
the Commission, and, with respect to such Shelf Registration Statement or any
post-effective amendment, when the same has become effective, (B) of any
request, following the effectiveness of the Shelf Registration Statement, by
the Commission or any other federal or state governmental authority for
amendments or supplements to the Shelf Registration Statement or related
Prospectus or for additional information, (C) of the issuance by the
Commission of any stop order suspending the effectiveness of such Shelf
Registration Statement or the initiation or written threat of any proceedings
for that purpose, (D) of the receipt by the Company of any notification
with respect to the suspension of the qualification of the Registrable Shares
for sale in any U.S. jurisdiction or the initiation or written threat of any
proceeding for such purpose, (E) of the occurrence of (but not the nature
of or details concerning) any event or the existence of any fact (a “Material
Event”) as a result of which any Shelf Registration Statement shall contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading, or any Prospectus shall contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading (provided,
however, that no notice by the Company shall be required pursuant to
this clause (E) in the event that the Company either promptly files a
supplement to update the Prospectus or a Form 8-K or other appropriate
Exchange Act report that is incorporated by reference into the Shelf
Registration Statement, which, in either case, contains the requisite
information with respect to such Material Event that results in such Shelf
Registration Statement or Prospectus no longer containing any untrue statement
of material fact or omitting to state a material fact necessary to make the
statements contained therein not misleading), (F) of the determination by
the Company that a post-effective amendment to the Shelf Registration Statement
will be filed with the Commission, which notice may, at the discretion of the
Company (or as required pursuant to Section 3(b)), state that it
constitutes a Deferral Notice, in which event the provisions of Section 3(b) shall
apply or (G) at any time when a Prospectus is required to be delivered
under the Securities Act, that the Shelf Registration Statement, Prospectus,
Prospectus amendment or supplement or post-effective amendment does not conform
in all material respects to the applicable requirements of the Securities Act
and the rules and regulations of the Commission thereunder;

 

(v)                                 use its reasonable best efforts to prevent
the issuance of, and if issued, to obtain the withdrawal of any order suspending
the effectiveness of the Shelf Registration Statement or any post-effective
amendment thereto, and to lift any suspension of the qualification of any of
the Registrable Shares for sale in any jurisdiction in which they have been
qualified for sale, in each case at the earliest practicable date;

 

7

 

(vi)                              promptly furnish to each Notice Holder upon their request and without
charge, at least one (1) conformed copy of the Shelf Registration Statement and
any amendments thereto, including financial statements but excluding schedules,
all documents incorporated or deemed to be incorporated therein by reference
and all exhibits; provided, however,
that the Company shall have no obligation to deliver to Notice Holders a copy
of any amendment consisting exclusively of an Exchange Act report or other
Exchange Act filing otherwise publicly available on the Commission’s or the
Company’s website;

 

(vii)                           during the Effective Period, deliver to each Notice Holder in connection
with any sale of Registrable Shares pursuant to the Shelf Registration
Statement, without charge, as many copies of the Prospectus relating to such
Registrable Shares (including each preliminary prospectus) and any amendment or
supplement thereto as such Notice Holder may reasonably request; and the
Company hereby consents (except during such periods that a Deferral Notice is
outstanding and has not been revoked) to the use of such Prospectus or each
amendment or supplement thereto by each Notice Holder in connection with any
offering and sale of the Registrable Shares covered by such Prospectus or any
amendment or supplement thereto in the manner set forth therein;

 

(viii)                        use reasonable best efforts to list the Shares on the national
securities exchange on which the Common Stock is listed, no later than the
Effective Date and throughout the Effective Period, including paying all
applicable listing fees;

 

(ix)                                use reasonable best efforts to ensure that the Registrable Shares may
be cleared through the Depository Trust Company by no later than the Effective
Date and throughout the Effective Period;

 

(x)                                   pay all applicable registration fees to the
Commission with respect to the Shares covered by the Shelf Registration
Statement by no later than the Effective Date;

 

(xi)                                file all documents required to be filed by the Company with the
Commission pursuant to the Exchange Act throughout the Effective Period within
the time periods prescribed by the rules and regulations of the
Commission;

 

(xii)                             instruct the Company’s transfer agent and/or cause an opinion of
counsel to be issued to the Company’s transfer agent stating that the Shares
have been registered on the Shelf Registration Statement and may be transferred
free of any restrictive legend, subject to any contractual restrictions on the
transfer of such Shares;

 

(xiii)                          take all necessary actions to avoid being or becoming an “ineligible
issuer” within the meaning of the rules and regulations of the Securities
Act during the Effective Period;  and

 

8

 

(xiv)                         if at any time when the Company is required to re-evaluate its status
as a well-known seasoned issuer (“WKSI”), the Company determines that it
is not a WKSI, use its reasonable best efforts to refile the Shelf Registration
Statement on Form S-3 or, if not available, Form S-1 and keep such
registration statement effective during the Effective Period (and extend the
Effective Period by such number of days that the shelf registration statement
is not effective).

 

(b)                                 Upon (A) the issuance by the Commission
of a stop order suspending the effectiveness of the Shelf Registration
Statement or the initiation of proceedings with respect to the Shelf
Registration Statement under Section 8(d) or 8(e) of the
Securities Act, or (B) the occurrence of any event or the existence of any
Material Event as a result of which the Shelf Registration Statement shall
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading, or any Prospectus shall contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or (C) the occurrence or
existence of any corporate development that, in the discretion of the Company,
makes it appropriate to suspend the availability of the Shelf Registration
Statement and the related Prospectus, the Company will (i) subject to the
last sentence of this Section 3(b), as promptly as practicable prepare and
file a post-effective amendment to such Shelf Registration Statement or a
supplement to the related Prospectus or any document incorporated therein by
reference or file any other required document that would be incorporated by
reference into such Shelf Registration Statement and Prospectus so that such
Shelf Registration Statement does not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and such Prospectus
does not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, as thereafter delivered to the purchasers of the Registrable Shares
being sold thereunder, and in the case of a post-effective amendment to the
Shelf Registration Statement, subject to the last sentence of this Section 3(b),
use reasonable best efforts to cause it to be declared effective as promptly as
is practicable, and (ii) give notice to the Notice Holders that the
availability of the Shelf Registration Statement and Prospectus is suspended (a
“Deferral Notice” and, the period during which the availability of the
Shelf Registration Statement and any Prospectus is suspended the “Deferral
Period”).  The Company need not
specify the nature of the event giving rise to a suspension in any Deferral
Notice.  Each Holder agrees to hold any
such Deferral Notice in confidence.  Upon
receipt of any Deferral Notice, each Notice Holder agrees not to sell any
Registrable Shares pursuant to the Shelf Registration Statement until such
Notice Holder’s receipt of copies of the supplemented or amended Prospectus
provided for in clause (i) above, or until it is advised in writing by the
Company that the Prospectus may be used, and has received copies of any
additional or supplemental filings that are incorporated or deemed incorporated
by reference in such Prospectus.  The
Company will use its reasonable best efforts to ensure that the use of the
Prospectus may be resumed (x) in the case of clause (A) above, as
promptly as practicable, (y) in the case of clause (B) above, as soon
as, in the sole judgment of the

 

9

 

Company, public disclosure of such Material Event would not be
prejudicial to or contrary to the interests of the Company or, if necessary to
avoid unreasonable burden or expense, as soon as practicable thereafter and (z) in
the case of clause (C) above, as soon as, in the discretion of the Company,
such suspension is no longer appropriate.

 

(c)                                  Each Holder of Registrable Shares agrees that
upon receipt of any Deferral Notice from the Company, such Holder shall
forthwith discontinue (and cause any placement or sales agent or underwriters
acting on their behalf to discontinue) the disposition of Registrable Shares
pursuant to the Shelf Registration Statement until such Holder (i) shall
have received copies of such amended or supplemented Prospectus and, if so
directed by the Company, such Holder shall deliver to the Company (at the
Company’s expense) all copies, other than permanent file copies, then in such
Holder’s possession of the Prospectus covering such Registrable Shares at the
time of receipt of such notice or (ii) shall have received notice from the
Company that the disposition of Registrable Shares pursuant to the Shelf
Registration Statement may continue.  The
Company shall use its best efforts to limit the length of each Deferral Period
to ten (10) days. In no event may the total number of days in all Deferral
Periods exceed thirty (30) days collectively. 
In addition, the Effective Period will be lengthened by a number of days
equal to the number of days in any Deferral Period.

 

(d)                                 The Company may require each Holder of
Registrable Shares as to which any registration pursuant to Section 2 is
being effected to furnish to the Company such information regarding such Holder
and such Holder’s intended method of distribution of such Registrable Shares as
the Company may from time to time reasonably request in writing, but only to
the extent that such information is required in order to comply with the
Securities Act.  Each such Holder agrees
to notify the Company as promptly as practicable of any inaccuracy or change in
information previously furnished by such Holder to the Company or of the
occurrence of any event in either case as a result of which any Prospectus
relating to such registration contains or would contain an untrue statement of
a material fact regarding such Holder or such Holder’s intended method of
disposition of such Registrable Shares or omits to state any material fact
regarding such Holder or such Holder’s intended method of disposition of such
Registrable Shares required to be stated therein or necessary to make the
statements therein not misleading, and promptly to furnish to the Company any
additional information required to correct and update any previously furnished
information or required so that such Prospectus shall not contain, with respect
to such Holder or the disposition of such Registrable Shares, an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading.

 

4.                                                               Holders’  Obligations.

 

(a)                                  Each Holder agrees, by acquisition of the
Registrable Shares, that no Holder of Registrable Shares shall be entitled to
sell any of such Registrable Shares pursuant to the Shelf Registration
Statement or to receive a Prospectus relating thereto, unless such Holder has
furnished the Company with a Notice and Questionnaire as required pursuant to Section 2(e) hereof
(including the information required to be included in such Notice and
Questionnaire) and

 

10

 

the
information set forth in the next sentence. 
Each Notice Holder agrees promptly to furnish to the Company all
information required to be disclosed in order to make the information
previously furnished to the Company by such Notice Holder not misleading and
any other information regarding such Notice Holder and the distribution of such
Registrable Shares as may be required to be disclosed in the Shelf Registration
Statement under applicable law or pursuant to Commission comments.  Each Holder further agrees not to sell any
Registrable Shares pursuant to the Shelf Registration Statement without
delivering, or causing to be delivered, a Prospectus to the purchaser thereof
(or otherwise delivering a Prospectus in accordance with applicable law) and,
following termination of the Effective Period, to notify the Company, within
ten (10) Business Days of a request by the Company, of the amount of
Registrable Shares sold pursuant to the Shelf Registration Statement and, in
the absence of a response, the Company may assume that all of the Holder’s
Registrable Shares were so sold.

 

(b)                                 The Holders will not make any transfer or
disposition of any of the Registrable Shares except in compliance with the
Securities Act or pursuant to an exemption therefrom.

 

5.                                                               Registration Expenses.

 

The
Company agrees to bear and to pay or cause to be paid promptly upon request
being made therefor all expenses incident to the Company’s performance of or
compliance with this Agreement, including, but not limited to, (a) all
Commission and stock exchange filing and listing fees and expenses, (b) all
of the fees and expenses of the Company’s counsel, accountants and transfer
agent related to the Shelf Registration Statement and Prospectus, (c) all
expenses relating to the preparation, printing, distribution and reproduction
of the Shelf Registration Statement, the related Prospectus, each amendment or
supplement to each of the foregoing, the certificates representing the Shares
and all other documents relating hereto and (d) the fees and disbursements
of one counsel retained by all of the Holders (the “Holders Counsel”), not to
exceed $20,000.  Notwithstanding the
foregoing, the Holders of the Registrable Shares being registered shall pay all
underwriting discounts and commissions and placement agent fees and commissions
attributable to the sale of such Registrable Shares and the fees and
disbursements of any counsel or other advisors or experts retained by such
Holders (severally or jointly), other than the Holders Counsel.

 

6.                                                               Indemnification.

 

(a)                                  The Company agrees to indemnify and hold
harmless each Holder, the directors, officers, employees and Affiliates of the
Holder and each Person who controls such Holder within the meaning of either
the Securities Act or the Exchange Act against any and all losses, claims,
damages or liabilities, joint or several, to which they or any of them may
become subject under the Securities Act, the Exchange Act or other federal or
state statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in any Shelf Registration Statement or any Prospectus
forming part thereof or in any amendment or supplement thereto, or arise out of
or are based upon the omission or alleged omission to

 

11

 

state therein a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, and agrees to reimburse each such
indemnified party, as incurred, for any legal or other expenses reasonably
incurred by it in connection with investigating or defending any such loss,
claim, damage, liability or action; provided,
however, that the Company will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon any such untrue statement or alleged untrue statement or omission or
alleged omission from any such document, in reliance upon and in conformity
with written information provided by a Holder; provided
further, that with respect to any untrue statement or omission of a
material fact from any Prospectus, the indemnity agreement contained in this Section 6(a) shall
not inure to the benefit of any Holder from whom the Person asserting any such
loss, claim, damage or liability purchased the securities concerned, to the
extent that any such loss, claim, damage or liability of such Holder occurs
under the circumstance that (y) the untrue statement or omission of a
material fact from the Prospectus was corrected in an amendment or supplement
in accordance with the terms of this Agreement and (z) there was not sent
or given to such Person, at or prior to the written confirmation of the sale of
such securities to such Person, a copy of the Prospectus as amended or
supplemented, unless such failure to deliver the Prospectus, as amended or
supplemented, was a result of non-compliance by the Company with Section 3
provided, further, that the
indemnity agreement contained in this Section 6(a) shall not inure to
the benefit of any Holder to the extent that any such loss, claim, damage or
liability of or with respect to such Holder to any Person results from an offer
or sale by the Holder of Shares during a Deferral Period if such Holder
received a Deferral Notice prior to the making of such offer or sale.  This indemnity agreement will be in addition
to any liability which the Company may otherwise have.

 

(b)         Each Holder, severally and not jointly,
agrees to indemnify and hold harmless the Company, each of its directors, each
of its officers who signs the Shelf Registration Statement, and each Person, if
any, who controls the Company within the meaning of either the Securities Act
or the Exchange Act, against any and all losses, claims, damages or
liabilities, joint or several, to which the Company may become subject under
the Securities Act, the Exchange Act or other federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact contained
in any such Shelf Registration Statement or any Prospectus forming part thereof
or in any amendment or supplement thereto, or arise out of or are based upon
the omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading, but in each case
only to the extent that the untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity with
any information furnished to the Company by such Holder in writing expressly
for use in any such Shelf Registration Statement or Prospectus, and agrees to
reimburse the Company, as incurred, for any legal or other expenses reasonably
incurred by it in connection with investigating or defending any such loss,
claim, damage, liability or action; provided,
however, that no such Holder shall be liable for any indemnity
claims hereunder in excess of the amount of

 

12

 

net proceeds received by such Holder from the sale of Shares pursuant
to such Shelf Registration Statement. 
This indemnity agreement will be in addition to any liability which any
such Holder may otherwise have.

 

(c)          Promptly after receipt by an indemnified
party under this Section 6 of notice of the commencement of any action or
investigation, such indemnified party will, if a claim in respect thereof is to
be made against the indemnifying party under this Section 6, notify the
indemnifying party in writing of the commencement thereof; but the failure so
to notify the indemnifying party (i) will not relieve the indemnifying
party from liability under paragraph (a) or (b) above unless and to
the extent the indemnifying party has been materially prejudiced through the
forfeiture by the indemnified party of substantial rights and defenses and (ii) will
not, in any event, relieve the indemnifying party from any obligations to any
indemnified party other than the indemnification obligation provided in
paragraph (a) or (b).  If any action
shall be brought against an indemnified party and it shall have notified the
indemnifying party thereof, the indemnifying party shall be entitled to appoint
counsel (including local counsel) of the indemnifying party’s choice at the
indemnifying party’s expense to represent the indemnified party in any action
for which indemnification is sought (in which case the indemnifying party shall
not thereafter be responsible for the fees and expenses of any separate
counsel, other than local counsel if not appointed by the indemnifying party,
retained by the indemnified party or parties except as set forth below); provided, however, that such counsel shall
be reasonably satisfactory to the indemnified party.  Notwithstanding the indemnifying party’s
election to appoint counsel (including local counsel) to represent the
indemnified party in an action, the indemnified party shall have the right to
employ separate counsel (including local counsel), and the indemnifying party
shall bear the reasonable fees, costs and expenses of such separate counsel if (i) the
use of counsel chosen by the indemnifying party to represent the indemnified
party would present such counsel with a conflict of interest; (ii) the
actual or potential defendants in, or targets of, any such action include both
the indemnified party and the indemnifying party and the indemnified party
shall have reasonably concluded that there may be legal defenses available to
it and/or other indemnified parties that are different from or additional to
those available to the indemnifying party; (iii) the indemnifying party
shall not have employed counsel reasonably satisfactory to the indemnified
party to represent the indemnified party within a reasonable time after notice
of the institution of such action; or (iv) the indemnifying party shall
authorize the indemnified party to employ separate counsel at the expense of
the indemnifying party.  It is understood
that an indemnifying party shall not, in connection with any proceeding or
related proceeding in the same jurisdiction, be liable for the fees and
expenses of more than one separate firm (in addition to any local counsel) for
all indemnified parties.  An indemnifying
party will not, without the prior written consent of the indemnified parties,
settle or compromise or consent to the entry of any judgment with respect to
any pending or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding

 

13

 

and does not include an admission of fault, culpability or a failure to
act, by or on behalf of such indemnified party.

 

(d)         The provisions of this Section 6 and Section 7
shall remain in full force and effect, regardless of any investigation made by
or on behalf of any Holder, the Company, 
or any of the indemnified parties referred to in this Section 6 and
Section 7, and shall survive the sale by a Holder of Shares covered by the
Shelf Registration Statement.

 

7.               Contribution.

 

If
the indemnification provided for in Section 6 is unavailable or
insufficient to hold harmless an indemnified party under Section 6(a) or
6(b), then each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such indemnified
party as a result of such loss, claim, damage or liability, or action in
respect thereof, (i) in such proportion as shall be appropriate to reflect
the relative benefits received by the Company, on the one hand, and a Holder
with respect to the sale by such Holder of Shares, on the other, or (ii) if
the allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of
the Company, on the one hand, and such Holder, on the other, with respect to
the statements or omissions that resulted in such loss, claim, damage or
liability, or action in respect thereof, as well as any other relevant
equitable considerations.  The relative
fault shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to the Company or information
supplied by the Company, on the one hand, or to any information contained in
the relevant Notice and Questionnaire supplied by such Holder, on the other,
the intent of the parties and their relative knowledge, access to information
and opportunity to correct or prevent such untrue statement or omission.  The parties hereto agree that it would not be
just and equitable if contributions pursuant to this Section 7 were to be
determined by pro rata allocation or by any other method of allocation that
does not take into account the equitable considerations referred to
herein.  The amount paid or payable by an
indemnified party as a result of the loss, claim, damage or liability, or
action in respect thereof, referred to above in this Section 7 shall be
deemed to include, for purposes of this Section 7, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending or preparing to defend any such action or
claim.  Notwithstanding the provisions of
this Section 7, an indemnifying party that is a Holder of Shares shall not
be required to contribute any amount in excess of the amount by which the total
price at which the Shares sold by such indemnifying party to any purchaser exceeds
the amount of any damages which such indemnifying party has otherwise paid or
become liable to pay by reason of any untrue or alleged untrue statement or
omission or alleged omission.  No Person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation.

 

14

 

8.                                                               Miscellaneous.

 

(a)                                  Amendments
and Waivers.  The provisions of
this Agreement may not be amended, modified or supplemented, and waivers or
consents to departures from the provisions hereof may not be given, unless the
Company and the Majority Holders consent thereto in writing.  Notwithstanding the foregoing, a waiver or
consent to depart from the provisions hereof with respect to a matter that
relates exclusively to the rights of Holders whose Shares are being sold
pursuant to the Shelf Registration Statement and that does not directly or
indirectly affect the rights of other Holders may be given by Holders of a
majority in aggregate amount of the Shares being sold by such Holders pursuant
to the Shelf Registration Statement without the consent of the Majority
Holders.

 

(b)                                 Notices.  All notices and other communications provided
for or permitted hereunder shall be made in writing by hand-delivery,
first-class mail, telecopier or other form of electronic transmission, or air
courier guaranteeing next-day delivery:

 

(1)                                  If to the Company, initially at the address
set forth in the Purchase Agreement;

 

(2)                                  If to the ViroChem Vendors, initially at the
addresses set forth on Schedule A;
and

 

(3)                                  If to a Holder, to the address of such Holder
set forth in the security register, the Notice and Questionnaire or other
records of the Company.

 

All such notices and communications shall be deemed
to have been duly given: when delivered by hand, if personally delivered; one (1) Business
Day after being delivered to a next-day air courier; five (5) Business
Days after being deposited in the mail; and when receipt is acknowledged by the
recipient’s electronic communication device, if sent by telecopier or other
form of electronic transmission.

 

(c)                                  Successors
and Assigns.  This Agreement
shall be binding upon the Company, each ViroChem Shareholder and each of their
respective successors and assigns.

 

(d)                                 Counterparts.  This Agreement may be executed in any number
of counterparts (which may be delivered in original form or by telecopier) and
by the parties hereto in separate counterparts, each of which when so executed
shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.

 

(e)                                  Headings.  The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.

 

(f)                                    Governing
Law.  This Agreement shall be governed
by and construed in accordance with the laws of The Commonwealth of
Massachusetts, without regard to the conflicts of laws principles thereof.

 

15

 

(g)                                 Remedies.  In the event of a breach by the Company or by
any Holder of any of their respective obligations under this Agreement, each
Holder or the Company, as the case may be, in addition to being entitled to
exercise all rights granted by law, including recovery of damages, will be
entitled to specific performance of its rights under this Agreement.  The Company and each Holder agree that
monetary damages would not be adequate compensation for any loss incurred by
reason of a breach by it of any of the provisions of this Agreement and hereby
further agree that, in the event of any action for specific performance in
respect of such breach, it shall waive the defense that a remedy at law would
be adequate.

 

(h)                                 Severability.  The remedies provided herein are cumulative
and not exclusive of any remedies provided by law.  If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to
be invalid, illegal, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions set forth herein shall remain in full
force and effect and shall in no way be affected, impaired or invalidated, and
the parties hereto shall use their reasonable best efforts to find and employ
an alternative means to achieve the same or substantially the same result as
that contemplated by such term, provision, covenant or restriction.  It is hereby stipulated and declared to be
the intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may
be hereafter declared invalid, illegal, void or unenforceable.

 

(i)                                     Survival.  The respective indemnities, agreements,
representations, warranties and each other provision set forth in this
Agreement or made pursuant hereto shall remain in full force and effect
regardless of any investigation (or statement as to the results thereof) made
by or on behalf of any Holder of Registrable Shares, any director, officer or
partner of such Holder, any agent or underwriter or any director, officer or
partner thereof, or any controlling Person of any of the foregoing, and shall
survive delivery of and payment for the Registrable Shares pursuant to the
Purchase Agreement and the transfer and registration of Registrable Shares by
such Holder.

 

(j)                                     Securities
Held by the Company, etc. 
Whenever the consent or approval of Holders of a specified percentage of
Shares is required hereunder, Shares held by the Company or its Affiliates
(other than subsequent Holders of Shares if such subsequent Holders are deemed
to be Affiliates solely by reason of their holdings of such Shares) shall not
be counted in determining whether such consent or approval was given by the
Holders of such required percentage.

 

(k)                                  Termination.   In the event that the Purchase Agreement
shall be terminated in accordance with its terms prior to the closing of the
acquisition contemplated thereby, this Agreement shall thereupon terminate.

 

(l)                                     Inconsistent Agreements.  The Company will not enter into any
agreements which are inconsistent with, or which would prevent the satisfaction
of its obligations under, this Agreement.

 

[The remainder of this page is
intentionally left blank.]

 

16

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first set forth above.

 

	
   

  	
  VERTEX PHARMACEUTICALS INCORPORATED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Per:

  	
  /s/ Ian F. Smith

  
	
   

  	
  Name: Ian F. Smith

  
	
   

  	
  Title: Executive Vice President and Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  VIROCHEM PHARMA INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Per:

  	
  /s/ François Legault

  
	
   

  	
  Name: François Legault

  
	
   

  	
  Title: President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CAISSE DE DÉPÔT ET PLACEMENT
  DU QUÉBEC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Per:

  	
  /s/ Louis Lacasse

  
	
   

  	
  Name: Louis Lacasse

  
	
   

  	
  Title: President, 4258398 Canada Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SHIRE CANADA INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Per:

  	
  /s/ Tatjana May

  
	
   

  	
  Name: Tatjana May

  
	
   

  	
  Title: EVP, General Counsel

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  VC, SOCIÉTÉ EN COMMANDITE

  
	
   

  	
   

  
	
   

  	
  Per: 9184-4274 Quebec Inc., its general partner

  
	
   

  	
   

  
	
   

  	
  Per:

  	
  /s/ Serge Lapointe

  
	
   

  	
  Serge Lapointe

  
	
   

  	
  Secretary and Director

  

 

Signature page of Registration Rights Agreement

 

1

 

	
   

  	
  BDC CAPITAL INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Per:

  	
  /s/ Denis Ho

  
	
   

  	
  Name: Denis Ho

  
	
   

  	
  Title: Managing Director

  
	
   

  	
   

  
	
   

  	
  Per:

  	
  /s/ Jean Francois Pariseau

  
	
   

  	
  Name: Jean Francois Pariseau

  
	
   

  	
  Title: Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Dr. Francesco Bellini

  
	
   

  	
  DR. FRANCESCO BELLINI

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Dr. Gervais Dionne

  
	
   

  	
  DR. GERVAIS DIONNE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LES INVESTISSEMENTS F.M.
  LEGAULT INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Per:

  	
  /s/ François Legault

  
	
   

  	
  Name: François Legault

  
	
   

  	
  Title: President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Franklin M. Berger

  
	
   

  	
  FRANKLIN M. BERGER

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  POWER CORPORATION OF CANADA

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Per:

  	
  /s/ Peter Kruyt

  
	
   

  	
  Name: Peter Kruyt

  
	
   

  	
  Title: Vice-President

  
	
   

  	
   

  
	
   

  	
  Per:

  	
  /s/ Stephane Lemay

  
	
   

  	
  Name: Stephane Lemay

  
	
   

  	
  Title: Vice-President and Assistant General Counsel

  

 

Signature page of Registration Rights Agreement

 

2

 

	
   

  	
  VITUS INVESTMENTS III PRIVATE LIMITED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Per:

  	
  /s/ Ban Su-Mei

  
	
   

  	
  Name: Ban Su-Mei

  
	
   

  	
  Title: Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  VIROCHEM RENAISSANCE TRUST, FOR AND ON BEHALF OF THE BENEFICIARIES
  THEREUNDER

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Per:

  	
  /s/ François Legault

  
	
   

  	
  Trustees: François Legault

  
	
   

  	
   

  
	
   

  	
  Per:

  	
  /s/ Dr. Gervais Dionne

  
	
   

  	
  Trustees: Dr. Gervais Dionne

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THERAPEUTIC RENAISSANCE TRUST, FOR AND ON BEHALF OF THE BENEFICIARIES
  THEREUNDER

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Per:

  	
  /s/ François Legault

  
	
   

  	
  Trustees: François Legault

  
	
   

  	
   

  
	
   

  	
  Per:

  	
  /s/ Dr. Gervais Dionne

  
	
   

  	
  Trustees: Dr. Gervais Dionne

  

 

Signature page of Registration Rights Agreement

 

3

 

	
   

  	
   

  
	
   

  	
  /s/ Dr. Francesco Bellini

  
	
   

  	
  DR. FRANCESCO BELLINI

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Dr. Gervais Dionne

  
	
   

  	
  DR. GERVAIS DIONNE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ François Legault

  
	
   

  	
  FRANÇOIS LEGAULT

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ François Legault

  
	
   

  	
  ALEX CIMPOIA *

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ François Legault

  
	
   

  	
  DOMENIC DE LUCA *

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ François Legault

  
	
   

  	
  LAVAL CHAN *

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ François Legault

  
	
   

  	
  SYLVIE OUELLET *

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ François Legault

  
	
   

  	
  CHENGWEN REN *

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ François Legault

  
	
   

  	
  OLIVIER NICOLAS *

  
	
   

  	
   

  
	
  * By Power of Proxy and Mandate.

  	
   

  

 

Signature page of Registration Rights Agreement

 

4

 

	
   

  	
   

  
	
   

  	
  /s/ François Legault

  
	
   

  	
  CHARLES BLAIS *

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ François Legault

  
	
   

  	
  CONSTANTIN YANNOPOULOS *

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ François Legault

  
	
   

  	
  PIERO TRIGIANI *

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ François Legault

  
	
   

  	
  CHRISTOPHE MOINET *

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ François Legault

  
	
   

  	
  LILIANE HALAB *

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ François Legault

  
	
   

  	
  PAUL NGUYEN-BA *

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ François Legault

  
	
   

  	
  NATHALIE TURCOTTE *

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ François Legault

  
	
   

  	
  CAROLINE CADILHAC *

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ François Legault

  
	
   

  	
  IRINA MOTORINA *

  
	
   

  	
   

  
	
  * By Power of Proxy and Mandate.

  	
   

  

 

Signature page of Registration Rights Agreement

 

5

 

	
   

  	
   

  
	
   

  	
  /s/ François Legault

  
	
   

  	
  JOSÉE DUGAS *

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ François Legault

  
	
   

  	
  MONICA BUBENIK *

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ François Legault

  
	
   

  	
  RABINDRA REJ *

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ François Legault

  
	
   

  	
  LOUIS VAILLANCOURT *

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ François Legault

  
	
   

  	
  GUY FALARDEAU *

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ François Legault

  
	
   

  	
  JEAN BÉDARD *

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ François Legault

  
	
   

  	
  JULIE LAQUERRE *

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ François Legault

  
	
   

  	
  ISABELLE DESCHENES *

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ François Legault

  
	
   

  	
  CELINE LOCAS *

  
	
   

  	
   

  
	
  * By Power of Proxy and Mandate.

  	
   

  

 

Signature page of Registration Rights Agreement

 

6

 

	
   

  	
   

  
	
   

  	
  /s/ François Legault

  
	
   

  	
  BINGCAN LIU *

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ François Legault

  
	
   

  	
  MAUD DAVID *

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ François Legault

  
	
   

  	
  LUCILLE L’HEUREUX *

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ François Legault

  
	
   

  	
  THERESE GODBOUT *

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ François Legault

  
	
   

  	
  CAROLE CHAGNON *

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ François Legault

  
	
   

  	
  CARL POISSON *

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ François Legault

  
	
   

  	
  REAL DENIS *

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ François Legault

  
	
   

  	
  SANJOY KUMAR DAS *

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ François Legault

  
	
   

  	
  MARC COURCHESNE *

  
	
   

  	
   

  
	
  * By Power of Proxy and Mandate.

  	
   

  

 

Signature page of Registration Rights Agreement

 

7

 

	
   

  	
   

  
	
   

  	
  /s/ François Legault

  
	
   

  	
  DARIUS BILIMORIA *

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ François Legault

  
	
   

  	
  SUZANNE MAY *

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ François Legault

  
	
   

  	
  LYETTE GAUTHIER *

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ François Legault

  
	
   

  	
  MING-QIANG ZHANG *

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ François Legault

  
	
   

  	
  FILLIPO BELLINI *

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ François Legault

  
	
   

  	
  ROBERT BRAIS *

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ François Legault

  
	
   

  	
  CECILE LAJOIE *

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ François Legault

  
	
   

  	
  FRANCE DESROCHERS *

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ François Legault

  
	
   

  	
  NICOLAS GRIGNON *

  
	
   

  	
   

  
	
  * By Power of Proxy and Mandate.

  	
   

  

 

Signature page of Registration Rights Agreement

 

8

 

	
   

  	
   

  
	
   

  	
  /s/ François Legault

  
	
   

  	
  MOHAMMED DIALO *

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ François Legault

  
	
   

  	
  DANIELLE ETHIER *

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ François Legault

  
	
   

  	
  CHRISTINE AMNOTTE *

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ François Legault

  
	
   

  	
  NATHALIE CHAURET *

  
	
   

  	
   

  
	
  * By Power of Proxy and Mandate.

  	
   

  

 

Signature page of Registration Rights Agreement

 

9

 

Schedule A

 

Schedule of ViroChem Vendors

 

	
  Name

  	
   

  	
  Registrable Shares

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  BDC Capital Inc.

  	
   

  	
  908,319

  	
   

  
	
  Caisse de Dépôt et Placement du Quebec

  	
   

  	
  1,513,864

  	
   

  
	
  Les Investissements F.M. Legault Inc.

  	
   

  	
  90,834

  	
   

  
	
  Power Corporation of Canada

  	
   

  	
  1,321,771

  	
   

  
	
  Shire Canada Inc.

  	
   

  	
  1,951,225

  	
   

  
	
  Therapeutic Renaissance Trust

  	
   

  	
  88,694

  	
   

  
	
  VC, Société en commandite

  	
   

  	
  1,211,091

  	
   

  
	
  Vitus Investments III Private Limited

  	
   

  	
  1,251,797

  	
   

  
	
  Amnotte, Christine

  	
   

  	
  3,225

  	
   

  
	
  Bedard, Jean

  	
   

  	
  24,189

  	
   

  
	
  Bellini, Filippo

  	
   

  	
  2,418

  	
   

  
	
  Bellini, Francesco Dr.

  	
   

  	
  311,869

  	
   

  
	
  Berger, Franklin M.

  	
   

  	
  39,809

  	
   

  
	
  Bilimoria, Darius

  	
   

  	
  11,288

  	
   

  
	
  Blais, Charles

  	
   

  	
  12,094

  	
   

  
	
  Boivin, Isabel

  	
   

  	
  806

  	
   

  
	
  Bourgault, Bernard

  	
   

  	
  3,225

  	
   

  
	
  Brais, Robert

  	
   

  	
  1,209

  	
   

  
	
  Bubenik, Monica

  	
   

  	
  12,255

  	
   

  
	
  Cadilhac, Caroline

  	
   

  	
  12,578

  	
   

  
	
  Chagnon, Carole

  	
   

  	
  8,869

  	
   

  
	
  Chan Chun Kong, Laval

  	
   

  	
  48,378

  	
   

  
	
  Chauret, Nathalie

  	
   

  	
  32,252

  	
   

  
	
  Cimpoia, Alex

  	
   

  	
  96,757

  	
   

  
	
  Clermont, Paule

  	
   

  	
  3,225

  	
   

  
	
  Courchesne, Marc

  	
   

  	
  14,352

  	
   

  
	
  Das, Sanjoy Kumar

  	
   

  	
  15,642

  	
   

  
	
  David, Maud

  	
   

  	
  10,804

  	
   

  
	
  De Luca, Domenic

  	
   

  	
  43,540

  	
   

  
	
  Denis, Réal

  	
   

  	
  15,642

  	
   

  
	
  Deschênes, Isabelle

  	
   

  	
  14,513

  	
   

  
	
  Desrochers, France

  	
   

  	
  1,612

  	
   

  
	
  Diallo, Mohamed

  	
   

  	
  4,837

  	
   

  
	
  Dionne, Gervais

  	
   

  	
  684,965

  	
   

  
	
  Dugas, Josée

  	
   

  	
  11,127

  	
   

  
	
  Ethier, Daniéle

  	
   

  	
  24,189

  	
   

  
	
  Falardeau, Guy

  	
   

  	
  13,223

  	
   

  
	
  Fex, Pascal

  	
   

  	
  806

  	
   

  
	
  Fournier, Lucie

  	
   

  	
  403

  	
   

  
	
  Garceau, Denis

  	
   

  	
  21,770

  	
   

  
	
  Gauthier, Lyette

  	
   

  	
  4,031

  	
   

  
	
  Godbout, Thérèse

  	
   

  	
  5,160

  	
   

  
	
  Grignon, Nicolas

  	
   

  	
  4,031

  	
   

  
	
  Guastaferri, Monique

  	
   

  	
  403

  	
   

  
	
  Halab, Liliane

  	
   

  	
  12,739

  	
   

  
	
  Lajoie, Cécile

  	
   

  	
  1,612

  	
   

  
	
  Lamarre, Daniel

  	
   

  	
  16,126

  	
   

  

 

A-1

 

	
  Laquerre, Julie

  	
   

  	
  8,063

  	
   

  
	
  Laterreur, Julie

  	
   

  	
  806

  	
   

  
	
  Legault, François

  	
   

  	
  448,834

  	
   

  
	
  L’Heureux, Lucille

  	
   

  	
  11,933

  	
   

  
	
  Liu, Bingcan

  	
   

  	
  12,578

  	
   

  
	
  Locas, Céline

  	
   

  	
  40,315

  	
   

  
	
  May, Suzanne

  	
   

  	
  12,094

  	
   

  
	
  Miletti, Tina

  	
   

  	
  806

  	
   

  
	
  Moinet, Christophe

  	
   

  	
  15,642

  	
   

  
	
  Motorina, Irina

  	
   

  	
  15,803

  	
   

  
	
  Nguyen-Ba, Nghe

  	
   

  	
  20,157

  	
   

  
	
  Nicolas, Olivier

  	
   

  	
  14,513

  	
   

  
	
  Ouellet, Sylvie

  	
   

  	
  5,482

  	
   

  
	
  Pereira, Oswy Zeno

  	
   

  	
  4,837

  	
   

  
	
  Pernet, André Gerard

  	
   

  	
  21,770

  	
   

  
	
  Plante, Sylvie

  	
   

  	
  1,612

  	
   

  
	
  Poisson, Carl

  	
   

  	
  11,933

  	
   

  
	
  Proulx, Louise

  	
   

  	
  64,505

  	
   

  
	
  Reddy, Thumkunta Jagadeeswar

  	
   

  	
  2,015

  	
   

  
	
  Rej, Rabindra

  	
   

  	
  17,093

  	
   

  
	
  Ren, Chengwen

  	
   

  	
  13,868

  	
   

  
	
  Roldan, Hector Ariel

  	
   

  	
  1,612

  	
   

  
	
  Rus, Joseph

  	
   

  	
  4,031

  	
   

  
	
  Salinas, Eliseo Oreste

  	
   

  	
  24,189

  	
   

  
	
  Ste-Marie, Line

  	
   

  	
  1,612

  	
   

  
	
  Thibert, Roch

  	
   

  	
  12,901

  	
   

  
	
  Trigiani, Piero

  	
   

  	
  9,998

  	
   

  
	
  Turcotte, Nathalie

  	
   

  	
  12,739

  	
   

  
	
  Vaillancourt, Louis

  	
   

  	
  15,481

  	
   

  
	
  Yannopoulos, Constantin

  	
   

  	
  14,674

  	
   

  
	
  Zhang, Ming-Qiang

  	
   

  	
  8,063

  	
   

  
	
  TOTAL SHARES:

  	
   

  	
  10,733,527

  	
   

  

 

A-2

 

Schedule B

 

Form of Selling Shareholder Notice and
Questionnaire

 

Selling Shareholder Notice and Questionnaire

 

The undersigned beneficial
holder of shares of common stock, par value $.01 per share (the “Registrable
Shares”), of Vertex Pharmaceuticals Incorporated (the “Company”),
understands that the Company has filed, or intends to file, with the Securities
and Exchange Commission (the “Commission”) a registration statement (the
“Shelf Registration Statement”), for the registration and resale under Rule 415
of the Securities Act of 1933, as amended (the “Securities Act”), of the
Registrable Shares in accordance with the terms of the Registration Rights
Agreement, dated March 12, 2009 (the “Registration Rights Agreement”),
between the Company and all of the shareholders of ViroChem Pharma Inc. A copy
of the Registration Rights Agreement is available from the Company upon request
at the address set forth below. All capitalized terms not otherwise defined
herein have the meaning ascribed thereto in the Registration Rights Agreement.

 

Each beneficial owner of
Registrable Shares is entitled to the benefits of the Registration Rights
Agreement. In order to sell or otherwise dispose of any Registrable Shares
pursuant to the Shelf Registration Statement, a beneficial owner of Registrable
Shares generally will be required to be named as a selling shareholder in the
related Prospectus, deliver (or cause to be delivered) a Prospectus to
purchasers of Registrable Shares and be bound by those provisions of the
Registration Rights Agreement applicable to such beneficial owner (including
certain indemnification provisions, as described below).

 

Beneficial owners that do not
complete this Notice and Questionnaire and deliver it to the Company as
provided below will not be named as selling shareholders in the Prospectus and
will not be permitted to sell any Registrable Shares pursuant to the Shelf
Registration Statement.  Beneficial
owners are encouraged to complete and deliver this Notice and Questionnaire on
or before the third (3rd) day prior to the effectiveness of the Shelf
Registration Statement so that such beneficial owners may be named as selling
shareholders in the related Prospectus at the time the Shelf Registration
Statement becomes effective.  Upon
receipt of a completed Notice and Questionnaire from a beneficial owner
following the effectiveness of the Shelf Registration Statement, the Company
will, as promptly as practicable, make filings with the Commission as are
necessary to permit such beneficial owner to deliver such Prospectus to
purchasers of Registrable Shares, subject to certain limitations set forth in
the Registration Rights Agreement.

 

Certain legal consequences
arise from being named as a selling shareholder in the Shelf Registration
Statement and the related Prospectus. Accordingly, holders and beneficial
owners of Registrable Shares are advised to consult their own securities law
counsel regarding the consequences of being named or not being named as a
selling shareholder in the Shelf Registration Statement and the related
Prospectus.

 

B-1

 

NOTICE

 

The undersigned beneficial
owner (the “Selling Shareholder”) of Registrable Shares hereby gives
notice to the Company of its intention to sell or otherwise dispose of
Registrable Shares beneficially owned by it and listed below in Item 3 (unless
otherwise specified under Item 3) pursuant to the Shelf Registration Statement.
The undersigned, by signing and returning this Notice and Questionnaire,
understands that it will be bound by the terms and conditions of this Notice
and Questionnaire and the Registration Rights Agreement.

 

Pursuant to the Registration
Rights Agreement, the undersigned has agreed to indemnify and hold harmless the
Company, each of its directors, each of its officers, and each Person, if any,
who controls the Company within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, from and against certain
losses arising in connection with statements concerning the undersigned made in
the Shelf Registration Statement or the related Prospectus in reliance upon the
information provided in this Notice and Questionnaire.

 

The undersigned hereby provides
the following information to the Company and represents and warrants that such
information is accurate and complete:

 

QUESTIONNAIRE

 

1.                                       (a)                                  Full legal name of
Selling Shareholder:

 

 

(b)                                 Full
legal name of registered holder (if not the same as (a) above) through
which Registrable Shares listed in Item (3) below are held:

 

 

(c)                                  Taxpayer
identification number (for corporate entities) or social security number (if you
are an individual) of Selling Shareholder:

 

 

2.                                       Address
for notices to Selling Shareholder:

 

Telephone:

 

Fax:

 

Email:

 

Contact
Person:

 

B-2

 

3.                                       Beneficial
ownership of Registrable Shares:

 

(a)                                  Number
of Registrable Shares beneficially owned: number of shares of Company common
stock the undersigned received pursuant to the Purchase Agreement (as set forth
in column 32 of Schedule 2.02(2)).

 

4.                                       Beneficial
ownership of other securities of the Company owned by the Selling Shareholder:

 

EXCEPT AS SET
FORTH BELOW IN THIS ITEM (4), THE UNDERSIGNED IS NOT THE BENEFICIAL OR
REGISTERED OWNER OF ANY SECURITIES OF THE COMPANY OTHER THAN THE REGISTRABLE
SHARES LISTED ABOVE IN ITEM (3) (“OTHER SECURITIES”).

 

(a)                                  Type
and amount of Other Securities of the Company beneficially owned by the Selling
Shareholder:

 

 

(b)                                 CUSIP
No(s). of such Other Securities beneficially owned:

 

 

5.                                       Relationship
with the Company:

 

Except as set forth below, neither the
undersigned nor any of its affiliates, officers, directors or principal equity
holders (5% or more) has held any position or office or has had any other
material relationship with the Company (or their predecessors or affiliates)
during the past three years.

 

State any exceptions here:

 

 

6.                                       Nature
of the Selling Shareholder:

 

(a)                                  Is
the Selling Shareholder:

 

a reporting company under the Exchange Act?

 

Yes  o   No
 o

 

a majority owned subsidiary of a reporting
company under the Exchange Act?

 

Yes  o   No
 o

 

B-3

 

or a registered investment company under the
Investment Company Act?

 

Yes  o   No
 o

 

If so, please
state which one

 

 

If the entity is a majority owned subsidiary
of a reporting company, identify the majority stockholder that is a reporting
company.

 

 

If the entity is not any of the above, identify the natural person or
persons having voting and investment control over the Company’s securities that
the entity owns.

 

 

(b)                                 Is
the Selling Shareholder a registered broker-dealer?

 

Yes  o   No
 o

 

If yes, state whether the Selling Shareholder received the Registrable
Shares as compensation for underwriting activities and, if so, provide a brief
description of the transaction(s) involved.

 

 

State whether the Selling Shareholder is an affiliate of a
broker-dealer and if so, list the name(s) of the broker-dealer
affiliate(s).  For purposes of this Item
6(b), an “affiliate” of a broker-dealer includes any company that directly, or
indirectly through one or more intermediaries, controls, is controlled by, or
is under common control with, such broker-dealer, and does not include
individuals employed by any such broker-dealers or by any of their affiliates.

 

Yes  o   No
 o

 

B-4

 

If the answer is “Yes,” you must answer the
following:

 

If the Selling Shareholder is an affiliate of a registered
broker-dealer, the Selling Shareholder purchased the Registrable Shares (i) in
the ordinary course of business and (ii) at the time of the purchase of
the Registrable Shares, had no agreements or understandings, directly or
indirectly, with any person to distribute the Registrable Shares.

 

Yes  o   No
 o

 

If the answer is “No,” state any exceptions
here:

 

 

If the answer is “No,” this may affect your
ability to be included in the Shelf Registration Statement.

 

7.                                       Plan of
Distribution

 

Except as set forth below, the undersigned
(including its donees, pledges, transferees and other successors in interest)
intends to distribute the Registrable Shares listed above in Item (3) pursuant
to the Shelf Registration Statement only as follows (if at all). Such
Registrable Shares may be sold from time to time directly by the undersigned
or, alternatively, through underwriters, broker-dealers or agents. If the
Registrable Shares are sold through underwriters, broker-dealers or agents, the
Selling Shareholder will be responsible for underwriting discounts or
commissions or agent’s commissions. Such Registrable Shares may be sold in one
or more transactions at fixed prices, at prevailing market prices at the time
of sale, at varying prices determined at the time of sale, or at negotiated
prices. Such sales may be effected in transactions (which may involve crosses
or block transactions):

 

(i)                                     on
any national securities exchange or quotation service on which the Registrable
Shares may be listed or quoted at the time of sale;

 

(ii)                                  in
the over-the-counter market; or

 

(iii)                               in
transactions otherwise than on such exchanges or services or in the
over-the-counter market.

 

In connection with sales of the
Registrable Shares or otherwise, the undersigned may enter into hedging
transactions with broker-dealers, which may in turn engage in short sales of
the Registrable Shares and deliver Registrable Shares to close out such short
positions, or loan or pledge Registrable Shares to broker-dealers that in turn
may sell such securities.

 

The undersigned may pledge or
grant a security interest in some or all of the Registrable Shares owned by it
and, if it defaults in the performance of its secured obligations, the pledgees
or secured parties may offer and sell the Registrable Shares from time to time
pursuant to the

 

B-5

 

Prospectus. The undersigned
also may transfer and donate the Registrable Shares in other circumstances in
which case the transferees, donees, pledgees or other successors in interest
will be the selling shareholders for purposes of the Prospectus.

 

State any exceptions here:

 

 

Note: In
no event will such method(s) of distribution take the form of an
underwritten offering of the Registrable Shares without the prior agreement of
the Company.

 

The undersigned acknowledges
that it understands its obligation to comply with the provisions of the
Exchange Act and the rules and regulations promulgated thereunder relating
to stock manipulation, particularly Regulation M thereunder (or any successor rules or
regulations), in connection with any offering of Registrable Shares pursuant to
the Shelf Registration Statement. The undersigned agrees that neither it nor
any person acting on its behalf will engage in any transaction in violation of
such provisions.

 

The Selling Shareholder hereby
acknowledges its obligations under the Registration Rights Agreement to
indemnify and hold harmless certain persons as set forth therein.

 

Pursuant to the Registration
Rights Agreement, the Company has agreed under certain circumstances to
indemnify the Selling Shareholders against certain liabilities.

 

In accordance with the
undersigned’s obligation under the Registration Rights Agreement to provide
such information as may be required by law for inclusion in the Shelf
Registration Statement, the undersigned agrees to promptly notify the Company
of any inaccuracies or changes in the information provided herein that may
occur subsequent to the date hereof at any time while the Shelf Registration
Statement remains effective. All notices hereunder and pursuant to the
Registration Rights Agreement shall be made in writing at the address set forth
below.

 

By signing below, the
undersigned consents to the disclosure of the information contained herein in
its answers to Items (1) through (7) above and the inclusion of such
information in the Shelf Registration Statement and the related Prospectus. The
undersigned understands that such information will be relied upon by the
Company in connection with the preparation or amendment of the Shelf
Registration Statement and the related Prospectus.

 

B-6

 

IN WITNESS WHEREOF, the
undersigned, by authority duly given, has caused this Notice and Questionnaire
to be executed and delivered either in person or by its duly authorized agent.

 

Dated:       , 2009

 

Beneficial Owner

 

	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  
	
  Title:

  	
   

  

 

Please return the completed and executed Notice and Questionnaire by       ,
2009 to:

 

Vertex Pharmaceuticals Incorporated

130 Waverly Street

Cambridge, Massachusetts 02139

Attention: Omar White, Esq.

Facsimile: (617) 444-7117

Email: Omar_white@vrtx.com

 

B-7

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