EXHIBIT 4.2
RESALE REGISTRATION RIGHTS AGREEMENT
among
VERTEX PHARMACEUTICALS INCORPORATED,
and
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
BEAR, STEARNS & CO. INC.
CREDIT SUISSE FIRST BOSTON CORPORATION
FLEETBOSTON ROBERTSON STEPHENS INC.
SG COWEN SECURITIES CORPORATION,
as Representatives of the several Initial Purchasers
Dated March 14, 2000
Resale Registration Rights Agreement (this "Agreement"), dated March 14,
2000, among Vertex Pharmaceuticals Incorporated, a Massachusetts corporation
(together with any successor entity, the "Issuer"), and Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch"), Bear,
Stearns & Co. Inc., Credit Suisse First Boston Corporation, FleetBoston
Robertson Stephens Inc. and SG Cowen Securities Corporation, as Representatives
of the several Initial Purchasers (collectively, the "Initial Purchasers").
Pursuant to the Purchase Agreement, dated March 8, 2000, between the Issuer
and the Initial Purchasers (the "Purchase Agreement"), the Initial Purchasers
have agreed to purchase from the Issuer $175,000,000 ($201,250,000 if the
Initial Purchasers exercise the over-allotment option in full) in aggregate
principal amount of 5% Convertible Subordinated Notes due 2007 (the "Notes").
The Notes will be convertible into fully paid, nonassessable common stock, par
value $.01 per share, of the Issuer (the "Common Stock") on the terms, and
subject to the conditions, set forth in the Indenture (as defined herein). To
induce the Initial Purchasers to purchase the Notes, the Issuer has agreed to
provide the registration rights set forth in this Agreement pursuant to the
Purchase Agreement.
The parties hereby agree as follows:
1. DEFINITIONS. As used in this Agreement, the following capitalized terms
shall have the following meanings:
ADVICE: As defined in Section 4(c)(ii) hereof.
BUSINESS DAY: A day other than a Saturday or Sunday or any federal holiday
in the United States.
COMMISSION: Securities and Exchange Commission.
COMMON STOCK: As defined in the preamble hereto.
DAMAGES PAYMENT DATE: Each Interest Payment Date. For purposes of this
Agreement, if no Notes are outstanding, "DAMAGES PAYMENT DATE" shall mean each
March 14 and September 14.
EFFECTIVENESS PERIOD: As defined in Section 2(a)(iii) hereof.
EFFECTIVENESS TARGET DATE: As defined in Section 2(a)(ii) hereof.
EXCHANGE ACT: Securities Exchange Act of 1934, as amended.
HOLDER: A Person who owns, beneficially or otherwise, Transfer Restricted
Securities.
INDENTURE: The Indenture, dated as of March 14, 2000, between the Issuer
and State Street Bank and Trust Company, as trustee, pursuant to which the Notes
are to be issued, as such Indenture is amended, modified or supplemented from
time to time in accordance with the terms thereof.
INITIAL PURCHASERS: As defined in the preamble hereto.
INTEREST PAYMENT DATE: As defined in the Indenture.
ISSUER: As defined in the preamble hereto.
LIQUIDATED DAMAGES: As defined in Section 3(a) hereof.
MAJORITY OF HOLDERS: Holders holding over 50% of the aggregate principal
amount of Notes outstanding; PROVIDED that, for purpose of this definition, a
holder of shares of Common Stock which constitute Transfer Restricted Securities
and were issued upon conversion of the Notes shall be deemed to hold an
aggregate principal amount of Notes (in addition to the aggregate principal
amount of Notes held by such holder) equal to the aggregate principal amount of
Notes converted by such Holder into such shares of Common Stock.
NASD: National Association of Securities Dealers, Inc.
NOTES: As defined in the preamble hereto.
PERSON: An individual, partnership, corporation, unincorporated
organization, trust, joint venture or a government or agency or political
subdivision thereof.
PROSPECTUS: The prospectus included in a Shelf Registration Statement, as
amended or supplemented by any prospectus supplement and by all other amendments
thereto, including post-effective amendments, and all material incorporated by
reference into such Prospectus.
QUESTIONNAIRE DEADLINE: As defined in Section 2(b) hereof.
RECORD HOLDER: With respect to any Damages Payment Date, each Person who is
a Holder on the record date with respect to the Interest Payment Date on which
such Damages Payment Date shall occur. In the case of a Holder of shares of
Common Stock issued upon conversion of the Notes, "RECORD HOLDER" shall mean
each Person who is a
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Holder of shares of Common Stock which constitute Transfer Restricted Securities
on the March 1 or September 1 immediately preceding the Damages Payment Date.
REGISTRATION DEFAULT: As defined in Section 3(a) hereof.
SALE NOTICE: As defined in Section 4(e) hereof.
SECURITIES ACT: Securities Act of 1933, as amended.
SHELF FILING DEADLINE: As defined in Section 2(a)(i) hereof.
SHELF REGISTRATION STATEMENT: As defined in Section 2(a)(i) hereof.
SUSPENSION PERIOD: As defined in Section 4(b)(i) hereof.
TIA: Trust Indenture Act of 1939, as in effect on the date the Indenture is
qualified under the TIA.
TRANSFER RESTRICTED SECURITIES: Each Note and each share of Common Stock
issued upon conversion of Notes until the earlier of:
(i) the date on which such Note or such share of Common Stock issued
upon conversion has been effectively registered under the Securities Act
and disposed of in accordance with the Shelf Registration Statement;
(ii) the date on which such Note or such share of Common Stock issued
upon conversion is transferred in compliance with Rule 144 under the
Securities Act or may be sold or transferred pursuant to Rule 144(k) under
the Securities Act (or any other similar provision then in force); or
(iii) the date on which such Note or such share of Common Stock issued
upon conversion ceases to be outstanding (whether as a result of
redemption, repurchase and cancellation, conversion or otherwise).
UNDERWRITTEN REGISTRATION OR UNDERWRITTEN OFFERING: A registration in which
securities of the Issuer are sold to an underwriter for reoffering to the
public.
2. SHELF REGISTRATION.
(a) The Issuer shall:
(i) not later than 90 days after the date hereof (the "Shelf Filing
Deadline"), cause to be filed a registration statement pursuant to Rule 415
under
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the Securities Act (the "Shelf Registration Statement"), which Shelf
Registration Statement shall provide for resales of all Transfer Restricted
Securities held by Holders that have provided the information required
pursuant to the terms of Section 2(b) hereof;
(ii) use its best efforts to cause the Shelf Registration Statement to
be declared effective by the Commission as promptly as practicable, but in
no event later than 150 days after the date hereof (the "Effectiveness
Target Date"); and
(iii) use its best efforts to keep the Shelf Registration Statement
continuously effective, supplemented and amended as required by the
provisions of Section 4(b) hereof to the extent necessary to ensure that
(A) it is available for resales by the Holders of Transfer Restricted
Securities entitled to the benefit of this Agreement and (B) conforms with
the requirements of this Agreement and the Securities Act and the rules and
regulations of the Commission promulgated thereunder as announced from time
to time for a period (the "Effectiveness Period") of:
(1) two years following the last date of original issuance of
Notes; or
(2) such shorter period that will terminate when (x) all of the
Holders of Transfer Restricted Securities are able to sell all
Transfer Restricted Securities immediately without restriction
pursuant to Rule 144(k) under the Securities Act or any successor rule
thereto, (y) when all Transfer Restricted Securities have ceased to be
outstanding (whether as a result of redemption, repurchase and
cancellation, conversion or otherwise) or (z) all Transfer Restricted
Securities registered under the Shelf Registration Statement have been
sold.
(b) No Holder may include any of its Transfer Restricted Securities in the
Shelf Registration Statement pursuant to this Agreement unless such Holder
furnishes to the Issuer in writing, prior to or on the 20th Business Day after
receipt of a request therefor (the "Questionnaire Deadline"), such information
as the Issuer may reasonably request for use in connection with the Shelf
Registration Statement or the Prospectus or preliminary Prospectus included
therein and in any application to be filed with or under state securities laws.
In connection with all such requests for information from Holders, the Issuer
shall notify such Holders of the requirements set forth in the preceding
sentence. No Holder shall be entitled to Liquidated Damages pursuant to Section
3 hereof unless such Holder shall have provided all such reasonably requested
information prior to or on the Questionnaire Deadline.
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3. LIQUIDATED DAMAGES.
(a) If:
(i) the Shelf Registration Statement is not filed with the Commission
prior to or on the Shelf Filing Deadline;
(ii) the Shelf Registration Statement has not been declared effective
by the Commission prior to or on the Effectiveness Target Date;
(iii) subject to the provisions of Section 4(b)(i) hereof, the Shelf
Registration Statement is filed and declared effective but, during the
Effectiveness Period, shall thereafter cease to be effective or fail to be
usable for its intended purpose without being succeeded within five
Business Days by a post-effective amendment to the Shelf Registration
Statement or a report filed with the Commission pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act that cures such failure and, in the
case of a post-effective amendment, is itself immediately declared
effective; or
(iv) prior to or on the 45th or 60th day, as the case may be, of any
Suspension Period, such suspension has not been terminated,
(each such event referred to in foregoing clauses (i) through (iv), a
"Registration Default"), the Issuer hereby agrees to pay liquidated
damages ("Liquidated Damages") with respect to the Transfer Restricted
Securities from and including the day following the Registration
Default to but excluding the day on which the Registration Default has
been cured:
(A) in respect of the Notes, to each holder of Notes, (x) with
respect to the first 90-day period during which a Registration Default
shall have occurred and be continuing, in an amount per year equal to
an additional 0.25% of the principal amount of the Notes and (y) with
respect to the period commencing on the 91st day following the day the
Registration Default shall have occurred and be continuing, in an
amount per year equal to an additional 0.50% of the principal amount
of the Notes; PROVIDED that in no event shall Liquidated Damages
accrue at a rate per year exceeding 0.50% of the principal amount of
the Notes; and
(B) in respect of any shares of Common Stock, to each holder of
shares of Common Stock issued upon conversion of Notes, (x) with
respect to the first 90-day period in which a Registration Default
shall have occurred and be continuing, in an amount per year equal to
0.25% of
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the principal amount of the converted Notes and (y) with respect to
the period commencing the 91st day following the day the Registration
Default shall have occurred and be continuing, in an amount per year
equal to 0.50% of the principal amount of the converted Notes;
PROVIDED that in no event shall Liquidated Damages accrue at a rate
per year exceeding 0.50% of the principal amount of the converted
Notes.
(b) All accrued Liquidated Damages shall be paid in arrears to Record
Holders by the Issuer on each Damages Payment Date by wire transfer of
immediately available funds or by federal funds check. Following the cure of all
Registration Defaults relating to any particular Note or share of Common Stock,
the accrual of Liquidated Damages with respect to such Note or share of Common
Stock will cease.
All obligations of the Issuer set forth in this Section 3 that are
outstanding with respect to any Transfer Restricted Security at the time such
security ceases to be a Transfer Restricted Security shall survive until such
time as all such obligations with respect to such Transfer Restricted Security
shall have been satisfied in full.
The Liquidated Damages set forth above shall be the exclusive monetary
remedy available to the Holders for such Registration Default.
4. REGISTRATION PROCEDURES.
(a) In connection with the Shelf Registration Statement, the Issuer shall
comply with all the provisions of Section 4(b) hereof and shall use its best
efforts to effect such registration to permit the sale of the Transfer
Restricted Securities being sold in accordance with the intended method or
methods of distribution thereof, and pursuant thereto, shall as expeditiously as
possible prepare and file with the Commission a Shelf Registration Statement
relating to the registration on any appropriate form under the Securities Act.
(b) In connection with the Shelf Registration Statement and any Prospectus
required by this Agreement to permit the sale or resale of Transfer Restricted
Securities, the Issuer shall:
(i) Subject to any notice by the Issuer in accordance with this
Section 4(b) of the existence of any fact or event of the kind described in
Section 4(b)(iii)(D), use its best efforts to keep the Shelf Registration
Statement continuously effective during the Effectiveness Period. Upon the
occurrence of any event that would cause the Shelf Registration Statement
or the Prospectus contained therein (A) to contain a material misstatement
or omission or (B) not be effective and usable for resale of Transfer
Restricted Securities during the
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Effectiveness Period, the Issuer shall file - promptly an appropriate
amendment to the Shelf Registration Statement or a report filed with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange
Act, in the case of clause (A), correcting any such misstatement or
omission, and, in the case of either clause (A) or (B), use its best
efforts to cause any such amendment to be declared effective and the Shelf
Registration Statement and the related Prospectus to become usable for
their intended purposes as soon as practicable thereafter. Notwithstanding
the foregoing, the Issuer may suspend the effectiveness of the Shelf
Registration Statement by written notice to the Holders for a period not to
exceed an aggregate of 45 days in any 90-day period (each such period, a
"Suspension Period") if:
(x) an event occurs and is continuing as a result of which the
Shelf Registration Statement would, in the Issuer's reasonable
judgment, contain 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; and
(y) the Issuer reasonably determines that the disclosure of such
event at such time would have a material adverse effect on the
business of the Issuer (and its subsidiaries, if any, taken as a
whole);
PROVIDED, that in the event the disclosure relates to a previously
undisclosed proposed or pending material business transaction, the
disclosure of which would impede the Issuer's ability to consummate such
transaction, the Issuer may extend a Suspension Period from 45 days to 60
days; PROVIDED, HOWEVER, that Suspension Periods shall not exceed an
aggregate of 90 days in any 360-day period.
(ii) Prepare and file with the Commission such amendments and
post-effective amendments to the Shelf Registration Statement as may be
necessary to keep the Shelf Registration Statement effective during the
Effectiveness Period; cause the Prospectus to be supplemented by any
required Prospectus supplement, and as so supplemented to be filed pursuant
to Rule 424 under the Securities Act, and to comply fully with the
applicable provisions of Rules 424 and 430A under the Securities Act in a
timely manner; and comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by the Shelf
Registration Statement during the applicable period in accordance with the
intended method or methods of distribution by the sellers thereof set forth
in the Shelf Registration Statement or Prospectus supplement.
(iii) Advise the selling Holders, Merrill Lynch, as representative of
the Initial Purchasers, and the underwriter(s), if any, promptly (but in
any event
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within five Business Days) and, if requested by such Persons, confirm such
advice in writing:
(A) with respect to the Shelf Registration Statement or any
post-effective amendment thereto, when the same has become effective,
and when the Prospectus or any Prospectus supplement or post-effective
amendment has been filed,
(B) of any request by the Commission for amendments to the Shelf
Registration Statement or amendments or supplements to the Prospectus
or for additional information relating thereto,
(C) of the issuance by the Commission of any stop order
suspending the effectiveness of the Shelf Registration Statement under
the Securities Act or of the suspension by any state securities
commission of the qualification of the Transfer Restricted Securities
for offering or sale in any jurisdiction, or the initiation of any
proceeding for any of the preceding purposes, or
(D) of the existence of any fact or the happening of any event,
during the Effectiveness Period, that makes any statement of a
material fact made in the Shelf Registration Statement or the
Prospectus, any amendment or supplement thereto, or any document
incorporated by reference therein untrue, or that requires the making
of any additions to or changes in the Shelf Registration Statement or
the Prospectus in order to make the statements therein not misleading.
If at any time the Commission shall issue any stop order suspending the
effectiveness of the Shelf Registration Statement, or any state securities
commission or other regulatory authority shall issue an order suspending
the qualification or exemption from qualification of the Transfer
Restricted Securities under state securities or Blue Sky laws, the Issuer
shall use its reasonable best efforts to obtain the withdrawal or lifting
of such order at the earliest possible time.
(iv) Furnish to each of the selling Holders, each Initial Purchaser
and each of the underwriter(s), if any, before filing with the Commission,
a copy of the Shelf Registration Statement and copies of any Prospectus
included therein or any amendments or supplements to the Shelf Registration
Statement or Prospectus (other than documents incorporated by reference
after the initial filing of the Shelf Registration Statement), which
documents will be subject to the review of such Holders, Initial Purchasers
and underwriter(s), if any, for a period of at least ten
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Business Days, and the Issuer will not file any Shelf Registration
Statement or Prospectus or any amendment or supplement to the Shelf
Registration Statement or Prospectus (other than documents incorporated by
reference) to which a selling Holder of Transfer Restricted Securities
covered by the Shelf Registration Statement, Merrill Lynch, as
representative of the Initial Purchasers, or the underwriter(s), if any,
shall reasonably object within five Business Days after the receipt
thereof. A selling Holder, Merrill Lynch, as representative of the Initial
Purchasers, or an underwriter, if any, shall be deemed to have reasonably
objected to such filing if the Shelf Registration Statement, amendment,
Prospectus or supplement, as applicable, as proposed to be filed, contains
a material misstatement or omission. Notwithstanding the foregoing, the
Issuer shall not be required to furnish the selling Holders with any
amendment or supplement to the Shelf Registration Statement or Prospectus
filed solely to reflect changes to the amount of Notes held by any
particular Holder at the request of such Holder or immaterial revisions to
the information contained therein.
(v) Make available at reasonable times for inspection by one or more
representatives of the selling Holders, designated in writing by a Majority
of Holders whose Transfer Restricted Securities are included in the Shelf
Registration Statement, any underwriter participating in any distribution
pursuant to the Shelf Registration Statement and any attorney or accountant
retained by such selling Holders or any of the underwriter(s), all
financial and other records, pertinent corporate documents and properties
of the Issuer as shall be reasonably necessary to enable them to exercise
any applicable due diligence responsibilities, and cause the Issuer's
officers, directors, managers and employees to supply all information
reasonably requested by any such representative or representatives of the
selling Holders, underwriter, attorney or accountant in connection with the
Shelf Registration Statement after the filing thereof and before its
effectiveness; PROVIDED, HOWEVER, that any information designated by the
Issuer as confidential at the time of delivery of such
information shall be kept confidential by the recipient thereof.
(vi) If requested by any selling Holders, Merrill Lynch, as
representative of the Initial Purchasers, or the underwriter(s), if any,
promptly incorporate in the Shelf Registration Statement or Prospectus,
pursuant to a supplement or post-effective amendment if necessary, such
information as such selling Holders, Merrill Lynch, as representative of
the Initial Purchasers, and such underwriter(s), if any, may reasonably
request to have included therein, including, without limitation: (1)
information relating to the "Plan of Distribution" of the Transfer
Restricted Securities, (2) - - information with respect to the principal
amount of Notes or number of shares of Common Stock being sold to such
underwriter(s), (3) the purchase - price being paid therefor and (4) any
other
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terms of the offering of the Transfer Restricted Securities to be sold in
such offering; and make all - required filings of such Prospectus
supplement or post-effective amendment as soon as reasonably practicable
after the Issuer is notified of the matters to be incorporated in such
Prospectus supplement or post-effective amendment. Notwithstanding the
foregoing, following the effective date of the Shelf Registration
Statement, the Issuer shall not be required to file more than one such
supplement or post-effective amendment to reflect changes in the amount of
Notes held by any particular Holder at the request of such Holder in any
30-day period.
(vii) Furnish to each selling Holder, each Initial Purchaser and each
of the underwriter(s), if any, without charge, at least one copy of the
Shelf Registration Statement, as first filed with the Commission, and of
each amendment thereto (and any documents incorporated by reference therein
or exhibits thereto (or exhibits incorporated in such exhibits by
reference) as such Person may request).
(viii) Deliver to each selling Holder, each Initial Purchaser and each
of the underwriter(s), if any, without charge, as many copies of the
Prospectus (including each preliminary prospectus) and any amendment or
supplement thereto as such Persons reasonably may request; subject to any
notice by the Issuer in accordance with this Section 4(b) of the existence
of any fact or event of the kind described in Section 4(b)(iii)(D), the
Issuer hereby consents to the use of the Prospectus and any amendment or
supplement thereto by each of the selling Holders and each of the
underwriter(s), if any, in connection with the offering and the sale of the
Transfer Restricted Securities covered by the Prospectus or any amendment
or supplement thereto.
(ix) If an underwriting agreement is entered into and the registration
is an Underwritten Registration, the Issuer shall:
(A) upon request, furnish to each selling Holder and each
underwriter, if any, in such substance and scope as they may
reasonably request and as are customarily made by issuers to
underwriters in primary underwritten offerings, upon the date of
closing of any sale of Transfer Restricted Securities in an
Underwritten Registration:
(1) a certificate, dated the date of such closing, signed by
the Chief Financial Officer of the Issuer and confirming, as of
the date thereof, the matters set forth in Section 5(c) of the
Purchase Agreement and such other matters as such parties may
reasonably request;
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(2) opinions, each dated the date of such closing, of
counsel to the Issuer covering such of the matters set forth in
the exhibits to the Purchase Agreement referred to in Section
5(a) thereof as are customarily covered in legal opinions to
underwriters in connection with primary underwritten offerings of
securities; and
(3) customary comfort letters, dated the date of such
closing, from the Issuer's independent certified public
accountants (and from any other accountants whose report is
contained or incorporated by reference in the Shelf Registration
Statement), in the customary form and covering matters of the
type customarily covered in comfort letters to underwriters in
connection with primary underwritten offerings of securities;
(B) set forth in full in the underwriting agreement, if any,
indemnification provisions and procedures which provide rights no less
protective than those set forth in Section 6 hereof with respect to
all parties to be indemnified; and
(C) deliver such other documents and certificates as may be
reasonably requested by such parties to evidence compliance with
clause (A) above and with any customary conditions contained in the
underwriting agreement or other agreement entered into by the selling
Holders pursuant to this clause (ix).
(x) Before any public offering of Transfer Restricted Securities,
cooperate with the selling Holders, the underwriter(s), if any, and their
respective counsel in connection with the registration and qualification of
the Transfer Restricted Securities under the securities or Blue Sky laws of
such jurisdictions as the selling Holders or underwriter(s), if any, may
reasonably request and do any and all other acts or things necessary or
advisable to enable the disposition in such jurisdictions of the Transfer
Restricted Securities covered by the Shelf Registration Statement;
PROVIDED, HOWEVER, that the Issuer shall not be required (A) to register or
qualify as a foreign corporation or a dealer of securities where it is not
now so qualified or to take any action that would subject it to the service
of process in any jurisdiction where it is not now so subject or (B) to
subject itself to taxation in any such jurisdiction if it is not now so
subject.
(xi) Cooperate with the selling Holders and the underwriter(s), if
any, to facilitate the timely preparation and delivery of certificates
representing Transfer Restricted Securities to be sold and not bearing any
restrictive legends
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(unless required by applicable securities laws); and enable such Transfer
Restricted Securities to be in such denominations and registered in such
names as the Holders or the underwriter(s), if any, may request at least
two Business Days before any sale of Transfer Restricted Securities made by
such underwriter(s).
(xii) Use its best efforts to cause the Transfer Restricted Securities
covered by the Shelf Registration Statement to be registered with or
approved by such other U.S. governmental agencies or authorities as may be
necessary to enable the seller or sellers thereof or the underwriter(s), if
any, to consummate the disposition of such Transfer Restricted Securities.
(xiii) Subject to Section 4(b)(i) hereof, if any fact or event
contemplated by Section 4(b)(iii)(D) hereof shall exist or have occurred,
use its reasonable best efforts to prepare a supplement or post-effective
amendment to the Shelf Registration Statement or related Prospectus or any
document incorporated therein by reference or file any other required
document so that, as thereafter delivered to the purchasers of Transfer
Restricted Securities, the Prospectus will not contain an 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.
(xiv) Provide CUSIP numbers for all Transfer Restricted Securities not
later than the effective date of the Shelf Registration Statement and
provide the Trustee under the Indenture with certificates for the Notes
that are in a form eligible for deposit with The Depository Trust Company.
(xv) Cooperate and assist in any filings required to be made with the
NASD and in the performance of any due diligence investigation by any
underwriter that is required to be retained in accordance with the rules
and regulations of the NASD.
(xvi) Otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission and all reporting requirements
under the rules and regulations of the Exchange Act.
(xvii) Cause the Indenture to be qualified under the TIA not later
than the effective date of the Shelf Registration Statement required by
this Agreement, and, in connection therewith, cooperate with the trustee
and the holders of Notes to effect such changes to the Indenture as may be
required for such Indenture to be so qualified in accordance with the terms
of the TIA; and execute and use its best efforts to cause the trustee
thereunder to execute all documents that may be required to effect such
changes and all other forms and documents required to be
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filed with the Commission to enable such Indenture to be so qualified in a
timely manner.
(xviii) Cause all Transfer Restricted Securities covered by the Shelf
Registration Statement to be listed or quoted, as the case may be, on each
securities exchange or automated quotation system on which similar
securities issued by the Issuer are then listed or quoted.
(xix) Provide promptly to each Holder upon written request each
document filed with the Commission pursuant to the requirements of Section
13 and Section 15 of the Exchange Act after the effective date of the Shelf
Registration Statement.
(xx) If requested by the underwriters, make appropriate officers of
the Issuer available to the underwriters for meetings with prospective
purchasers of the Transfer Restricted Securities and prepare and present to
potential investors customary "road show" material in a manner consistent
with new issuances of other securities similar to the Transfer Restricted
Securities.
(c) Each Holder agrees by acquisition of a Transfer Restricted Security
that, upon receipt of any notice from the Issuer of the existence of any fact of
the kind described in Section 4(b)(iii)(D) hereof, such Holder will, and will
use its reasonable best efforts to cause any underwriter(s) in an Underwritten
Offering to, forthwith discontinue disposition of Transfer Restricted Securities
pursuant to the Shelf Registration Statement until:
(i) such Holder has received copies of the supplemented or amended
Prospectus contemplated by Section 4(b)(xiii) hereof; or
(ii) such Holder is advised in writing by the Issuer that the use of
the Prospectus may be resumed, and has received copies of any additional or
supplemental filings that are incorporated by reference in the Prospectus.
If so directed by the Issuer, each Holder will deliver to the Issuer (at the
Issuer's expense) all copies, other than permanent file copies then in such
Holder's possession, of the Prospectus covering such Transfer Restricted
Securities that was current at the time of receipt of such notice of suspension.
(d) Each Holder who intends to be named as a selling Holder in the Shelf
Registration Statement shall furnish to the Issuer in writing, prior to or on
the 20th Business Day after receipt of a request therefor as set forth in a
questionnaire, such information regarding such Holder and the proposed
distribution by such Holder of its
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Transfer Restricted Securities as the Issuer may reasonably request for use in
connection with the Shelf Registration Statement or Prospectus or preliminary
Prospectus included therein. (The form of the questionnaire is attached hereto
as Exhibit A.) Holders that do not complete the questionnaire and deliver it to
the Issuer shall not be named as selling securityholders in the Prospectus or
preliminary Prospectus included in the Shelf Registration Statement and
therefore shall not be permitted to sell any Transfer Restricted Securities
pursuant to the Shelf Registration Statement. Each Holder who intends to be
named as a selling Holder in the Shelf Registration Statement shall promptly
furnish to the Issuer in writing such other information as the Issuer may from
time to time reasonably request in writing. Each Holder as to which the Shelf
Registration Statement is being effected agrees to furnish promptly to the
Issuer all information required to be disclosed in order to make information
previously furnished to the Issuer by such Holder not materially misleading.
(e) Upon the effectiveness of the Shelf Registration Statement, each Holder
shall notify the Issuer at least three Business Days prior to any intended
distribution of Transfer Restricted Securities pursuant to the Shelf
Registration Statement (a "Sale Notice"). Each Holder of this Security, by
accepting the same, agrees to hold any communication by the Issuer in response
to a Sale Notice in confidence.
5. REGISTRATION EXPENSES.
(a) All expenses incident to the Issuer's performance of or compliance with
this Agreement shall be borne by the Issuer regardless of whether a Shelf
Registration Statement becomes effective, including, without limitation:
(i) all registration and filing fees and expenses (including filings
made by any Initial Purchasers, Holders or underwriters with the NASD);
(ii) all fees and expenses of compliance with federal securities and
state Blue Sky or securities laws;
(iii) all expenses of printing (including printing of Prospectuses and
certificates for the Common Stock to be issued upon conversion of the
Notes), messenger and delivery services and telephone;
(iv) all fees and disbursements of counsel to the Issuer and, subject
to Section 5(b) below, the Holders of Transfer Restricted Securities;
(v) all application and filing fees in connection with listing (or
authorizing for quotation) the Common Stock on a national securities
exchange or automated quotation system pursuant to the requirements hereof;
and
14
(vi) all fees and disbursements of independent certified public
accountants of the Issuer (including the expenses of any special audit and
comfort letters required by or incident to such performance).
The Issuer shall bear its internal expenses (including, without limitation,
all salaries and expenses of its officers and employees performing legal,
accounting or other duties), the expenses of any annual audit and the fees and
expenses of any Person, including special experts, retained by the Issuer.
(b) In connection with the Shelf Registration Statement required by this
Agreement, the Issuer shall reimburse the Initial Purchasers and the Holders of
Transfer Restricted Securities being registered pursuant to the Shelf
Registration Statement, as applicable, for the reasonable fees and disbursements
of not more than one counsel, which shall be Debevoise & Plimpton, or such other
counsel as may be chosen by a Majority of Holders for whose benefit the Shelf
Registration Statement is being prepared.
6. INDEMNIFICATION AND CONTRIBUTION.
(a) The Issuer agrees to indemnify and hold harmless each Initial
Purchaser, each Holder and each Person who participates as an underwriter (any
such Person being an "Underwriter") and each Person, if any, who controls any
Initial Purchaser, Holder or Underwriter within the meaning of either Section 15
of the Securities Act or Section 20 of the Exchange Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in any Shelf Registration
Statement (or any amendment thereto), including all documents incorporated
therein by reference, or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make the
statements therein not misleading, or arising out of any untrue statement
or alleged untrue statement of a material fact contained in any Prospectus
(or any amendment or supplement thereto) or the omission or alleged
omission therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or
15
omission, or any such alleged untrue statement or omission; PROVIDED that
(subject to Section 6(d) below) any such settlement is effected with the
written consent of the Issuer; and
(iii) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by any indemnified party),
reasonably incurred in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency
or body, commenced or threatened, or any claim whatsoever based upon any
such untrue statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under
subparagraph (i) or (ii) above;
PROVIDED, HOWEVER, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Issuer by the
Initial Purchasers, such Holder or such Underwriter expressly for use in a Shelf
Registration Statement (or any amendment thereto) or any Prospectus (or any
amendment or supplement thereto).
(b) Each Holder, severally but not jointly, agrees to indemnify and hold
harmless the Issuer, the Initial Purchasers, each Underwriter and the other
selling Holders and each Person, if any, who controls the Issuer, the Initial
Purchasers, any Underwriter or any other selling Holder within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act, against any
and all loss, liability, claim, damage and expense described in the indemnity
contained in Section 6(a) hereof, as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in any
Shelf Registration Statement (or any amendment thereto) or any Prospectus (or
any amendment or supplement thereto) in reliance upon and in conformity with
written information with respect to such Holder furnished to the Issuer by such
Holder expressly for use in the Shelf Registration Statement (or any amendment
thereto) or such Prospectus (or any amendment or supplement thereto); PROVIDED,
HOWEVER, that no such Holder shall be liable for any claims hereunder in excess
of the amount of net proceeds received by such Holder from the sale of Transfer
Restricted Securities pursuant to such Shelf Registration Statement.
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action or proceeding commenced
against it in respect of which indemnity may be sought hereunder, but failure so
to notify an indemnifying party shall not relieve such indemnifying party from
any liability hereunder to the extent it is not materially prejudiced as a
result thereof and in any event shall not relieve it from any liability which it
may have otherwise than on account of this indemnity agreement. An indemnifying
party may participate at its own expense in the defense of such action;
PROVIDED, HOWEVER, that counsel to the indemnifying party shall not (except with
the
16
consent of the indemnified party) also be counsel to the indemnified party. In
no event shall the indemnifying party or parties be liable for the fees and
expenses of more than one counsel (in addition to any local counsel) separate
from their own counsel for all indemnified parties in connection with any one
action or separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances. No indemnifying
party shall, without the prior written consent of the indemnified parties,
settle or compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 (whether or
not the indemnified parties are actual or potential parties thereto), unless
such settlement, compromise or consent (i) includes an unconditional release of
each indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.
(d) If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 6(a)(ii) effected without its
written consent if (i) such settlement is entered into more than 45 days after
receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement at
least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.
(e) If the indemnification provided for in this Section 6 is for any reason
unavailable to or insufficient to hold harmless an indemnified party in respect
of any losses, liabilities, claims, damages or expenses referred to therein,
then each indemnifying party shall contribute to the aggregate amount of such
losses, liabilities, claims, damages and expenses incurred by such indemnified
party, as incurred, in such proportion as is appropriate to reflect the relative
fault of the indemnifying party or parties on the one hand and the indemnified
party or parties on the other hand in connection with the statements or
omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.
The relative fault of the indemnifying party or parties on the one hand and
the indemnified party or parties on the other hand shall be determined by
reference to, among other things, whether any such untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact relates to information supplied by the indemnifying party or parties on the
one hand or the indemnified party or parties on the
17
other hand and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 6 were determined by pro rata allocation
or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 6. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 6 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 6, no Holder shall be
required to contribute any amount in excess of the amount by which the total
price at which the Transfer Restricted Securities purchased by it were resold
exceeds the amount of any damages which such Holder has otherwise been required
to pay by reason of any untrue or alleged untrue statement or omission or
alleged omission. The Holders' obligations to contribute as provided in this
Section 6(e) are several and not joint.
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.
For purposes of this Section 6, each Person, if any, who controls an
Initial Purchaser, a Holder or an Underwriter within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act shall have the same
rights to contribution as such Initial Purchaser, such Holder or such
Underwriter, and each director of the Issuer, and each Person, if any, who
controls the Issuer within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act shall have the same rights to contribution as the
Issuer.
18
7. RULE 144A. In the event the Issuer is not subject to Section 13 or 15(d)
of the Exchange Act, the Issuer hereby agrees with each Holder, for so long as
any Transfer Restricted Securities remain outstanding, to make available to any
Holder or beneficial owner of Transfer Restricted Securities in connection with
any sale thereof and any prospective purchaser of such Transfer Restricted
Securities from such Holder or beneficial owner, the information required by
Rule 144A(d)(4) under the Securities Act in order to permit resales of such
Transfer Restricted Securities pursuant to Rule 144A.
8. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS. No Holder may participate
in any Underwritten Registration hereunder unless such Holder:
(i) agrees to sell such Holder's Transfer Restricted Securities on the
basis provided in any underwriting arrangements approved by the Persons
entitled hereunder to approve such arrangements and
(ii) completes and executes all reasonable questionnaires, powers of
attorney, indemnities, underwriting agreements, lock-up letters and other
documents required under the terms of such underwriting arrangements.
9. SELECTION OF UNDERWRITERS. The Holders of Transfer Restricted Securities
covered by the Shelf Registration Statement who desire to do so may sell such
Transfer Restricted Securities in an Underwritten Offering. In any such
Underwritten Offering, the investment banker or investment bankers and manager
or managers that will administer the offering will be selected by a Majority of
Holders whose Transfer Restricted Securities are included in such offering;
PROVIDED, that such investment bankers and managers must be reasonably
satisfactory to the Issuer.
10. MISCELLANEOUS.
(a) REMEDIES. The Issuer acknowledges and agrees that any failure by the
Issuer to comply with its obligations under Section 2 hereof may result in
material irreparable injury to the Initial Purchasers or the Holders for which
there is no adequate remedy at law, that it will not be possible to measure
damages for such injuries precisely and that, in the event of any such failure,
the Initial Purchasers or any Holder may obtain such relief as may be required
to specifically enforce the Issuer's obligations under Section 2 hereof. The
Issuer further agrees to waive the defense in any action for specific
performance that a remedy at law would be adequate.
(b) ADJUSTMENTS AFFECTING TRANSFER RESTRICTED SECURITIES. The Issuer shall
not, directly or indirectly, take any action with respect to the Transfer
Restricted Securities as a class that would adversely affect the ability of the
Holders to include such Transfer Restricted Securities in a registration
undertaken pursuant to this Agreement.
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(c) NO INCONSISTENT AGREEMENTS. The Issuer will not, on or after the date
of this Agreement, enter into any agreement with respect to its securities that
is inconsistent with the rights granted to the Holders in this Agreement or
otherwise conflicts with the provisions hereof. In addition, the Issuer shall
not grant to any of its security holders (other than the holders of Transfer
Restricted Securities in such capacity) the right to include any of its
securities in the Shelf Registration Statement provided for in this Agreement
other than the Transfer Restricted Securities. The Issuer has not previously
entered into any agreement (which has not expired or been terminated) granting
any registration rights with respect to its securities to any Person which
rights conflict with the provisions hereof.
(d) AMENDMENTS AND WAIVERS. This Agreement may not be amended, modified or
supplemented, and waivers or consents to or departures from the provisions
hereof may not be given, unless the Issuer has obtained the written consent of a
Majority of Holders.
(e) NOTICES. All notices and other communications provided for or permitted
hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telex, telecopier, or air
courier guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on the records of the
registrar under the Indenture or the transfer agent of the Common Stock, as
the case may be; and
(ii) if to the Issuer:
Vertex Pharmaceuticals Incorporated
130 Waverly Street
Cambridge, Massachusetts 02139
Attention: Thomas G. Auchincloss, Jr., Vice President of Finance
With a copy to:
Kirkpatrick & Lockhart
75 State Street
Boston, Massachusetts 02109
Attention: Eileen Smith Ewing, Esq.
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when
20
receipt acknowledged, if telecopied; and on the next Business Day, if timely
delivered to an air courier guaranteeing overnight delivery.
(f) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of each of the parties, including
without limitation and without the need for an express assignment, subsequent
Holders of Transfer Restricted Securities; PROVIDED, HOWEVER, that (i) this
Agreement shall not inure to the benefit of or be binding upon a successor or
assign of a Holder unless and to the extent such successor or assign acquired
Transfer Restricted Securities from such Holder and (ii) nothing contained
herein shall be deemed to permit any assignment, transfer or other disposition
of Transfer Restricted Securities in violation of the terms of the Purchase
Agreement or the Indenture. If any transferee of any Holder shall acquire
Transfer Restricted Securities, in any manner, whether by operation of law or
otherwise, such Transfer Restricted Securities shall be held subject to all of
the terms of this Agreement, and by taking and holding such Transfer Restricted
Securities such person shall be conclusively deemed to have agreed to be bound
by and to perform all of the terms and provisions of this Agreement.
(g) COUNTERPARTS. This Agreement may be executed in any number of
counterparts 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.
(h) SECURITIES HELD BY THE ISSUER OR ITS AFFILIATES. Whenever the consent
or approval of Holders of a specified percentage of Transfer Restricted
Securities is required hereunder, Transfer Restricted Securities held by the
Issuer or its "affiliates" (as such term is defined in Rule 405 under the
Securities Act) shall not be counted in determining whether such consent or
approval was given by the Holders of such required percentage.
(i) HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(j) GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with, the law of the State of New York, without regard to conflict of
laws principles thereof.
(k) SEVERABILITY. If any one or more of the provisions contained herein, or
the application thereof in any circumstance, is held invalid, illegal or
unenforceable, the validity, legality and enforceability of any such provision
in every other respect and of the remaining provisions contained herein shall
not be affected or impaired thereby.
21
(l) ENTIRE AGREEMENT. This Agreement is intended by the parties as a final
expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
with respect to the registration rights granted by the Issuer with respect to
the Transfer Restricted Securities. This Agreement supersedes all prior
agreements and understandings between the parties with respect to such subject
matter
22
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
VERTEX PHARMECEUTICALS INCORPORATED
By
------------------------------------------------
Name:
Title:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
BEAR, STEARNS & CO. INC.
CREDIT SUISSE FIRST BOSTON
CORPORATION
FLEETBOSTON ROBERTSON STEPHENS INC.
SG COWEN SECURITIES CORPORATION,
as Representatives of the several Initial Purchasers
By: Merrill Lynch, Pierce, Fenner & Smith
Incorporated
By:
------------------------------------------------
Authorized Signatory
Exhibit A
VERTEX PHARMACEUTICALS INCORPORATED
FORM OF SELLING SECURITYHOLDER NOTICE AND QUESTIONNAIRE
The undersigned beneficial holder of 5% Convertible Subordinated Notes due
2007 (the "Notes") of Vertex Pharmaceuticals Incorporated (the "Issuer"), or
common stock, par value $.01 per share (the "Shares" and together with the
Notes, the "Transfer Restricted Securities"), of the Issuer understands that the
Issuer 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 Transfer Restricted
Securities in accordance with the terms of the Registration Rights Agreement,
dated March 14, 2000 (the "Registration Rights Agreement"), between the Issuer
and Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated,
Bear, Stearns & Co. Inc., Credit Suisse First Boston Corporation, FleetBoston
Robertson Stephens Inc. and SG Cowen Securities Corporation, as Representatives
of the several Initial Purchasers. A copy of the Registration Rights Agreement
is available from the Issuer 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 Transfer Restricted Securities is entitled to the
benefits of the Registration Rights Agreement. In order to sell or otherwise
dispose of any Transfer Restricted Securities pursuant to the Shelf Registration
Statement, a beneficial owner of Transfer Restricted Securities generally will
be required to be named as a selling securityholder in the related Prospectus,
deliver a Prospectus to purchasers of Transfer Restricted Securities 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 WITHIN 20 BUSINESS DAYS OF RECEIPT HEREOF AND DELIVER IT TO THE
ISSUER AS PROVIDED BELOW WILL NOT BE NAMED AS SELLING SECURITYHOLDERS IN THE
PROSPECTUS AND THEREFORE WILL NOT BE PERMITTED TO SELL ANY TRANSFER RESTRICTED
SECURITIES PURSUANT TO THE SHELF REGISTRATION STATEMENT.
Certain legal consequences arise from being named as a selling
securityholder in the Shelf Registration Statement and the related Prospectus.
Accordingly, holders and beneficial owners of Transfer Restricted Securities are
advised to consult their own securities law counsel regarding the consequences
of being named or not being named as a selling securityholder in the Shelf
Registration Statement and the related Prospectus.
A-1
NOTICE
The undersigned beneficial owner (the "Selling Securityholder") of Transfer
Restricted Securities hereby gives notice to the Issuer of its intention to sell
or otherwise dispose of Transfer Restricted Securities 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 Issuer, the Initial Purchasers, any
Underwriter and the other selling holders and each person, if any, who controls
such persons 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 Issuer and
represents and warrants that such information is accurate and complete:
QUESTIONNAIRE
1. (a) Full legal name of Selling Securityholder:
(b) Full legal name of registered holder (if not the same as (a) above)
through which Transfer Restricted Securities listed in (3) below are
held:
(c) Full legal name of DTC participant (if applicable and if not the same
as (b) above) through which Transfer Restricted Securities listed in
(3) are held:
2. Address for notices to Selling Securityholders:
Telephone:
Fax:
Contact Person:
A-2
3. Beneficial ownership of Transfer Restricted Securities:
(a) Type of Transfer Restricted Securities beneficially owned, and
principal amount of Notes or number of shares of Common Stock, as the
case may be, beneficially owned:
(b) CUSIP No(s). of such Transfer Restricted Securities beneficially
owned:
4. Beneficial ownership of the Issuer's securities owned by the Selling
Securityholder:
EXCEPT AS SET FORTH BELOW IN THIS ITEM (4), THE UNDERSIGNED IS NOT THE
BENEFICIAL OR REGISTERED OWNER OF ANY SECURITIES OF THE ISSUER OTHER
THAN THE TRANSFER RESTRICTED SECURITIES LISTED ABOVE IN ITEM (3)
("OTHER SECURITIES").
(a) Type and amount of Other Securities beneficially owned by the
Selling Securityholder:
(b) CUSIP No(s). of such Other Securities beneficially owned:
5. Relationship with the Issuer
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 Issuer (or their predecessors or affiliates)
during the past three years.
State any exceptions here:
6. Plan of Distribution
Except as set forth below, the undersigned (including its donees or
pledgees) intends to distribute the Transfer Restricted Securities
listed above in Item (3) pursuant to the Shelf Registration Statement
only as follows (if at all). Such Transfer Restricted Securities may
be sold from time to time directly by the undersigned or,
alternatively, through underwriters, broker-dealers or agents. If
A-3
the Transfer Restricted Securities are sold through underwriters or
broker-dealers, the Selling Securityholder will be responsible for
underwriting discounts or commissions or agent's commissions. Such
Transfer Restricted Securities 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 Transfer Restricted Securities may be listed or quoted at the
time of sale;
(ii) in the over-the-counter market;
(iii) in transactions otherwise than on such exchanges or services or
in the over-the-counter market; or
(iv) through the writing of options.
In connection with sales of the Transfer Restricted Securities or
otherwise, the undersigned may enter into hedging transactions with
broker-dealers, which may in turn engage in short sales of the Transfer
Restricted Securities and deliver Transfer Restricted Securities to close
out such short positions, or loan or pledge Transfer Restricted Securities
to broker-dealers that in turn may sell such securities.
State any exceptions here:
Note: In no event will such method(s) of distribution take the form of an
underwritten offering of the Transfer Restricted Securities without the
prior agreement of the Issuer.
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 Transfer Restricted
Securities 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 Securityholder hereby acknowledges its obligations under
the Registration Rights Agreement to indemnify and hold harmless certain
persons as set forth therein.
A-4
Pursuant to the Registration Rights Agreement, the Issuer has agreed
under certain circumstances to indemnify the Selling Securityholders
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 Issuer 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 (6) 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 Issuer in connection with the
preparation or amendment of the Shelf Registration Statement and the
related Prospectus.
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:
Beneficial Owner
By:
-------------------------------
Name:
Title:
Please return the completed and executed Notice and Questionnaire to Vertex
Pharmaceuticals Incorporated at:
Vertex Pharmaceuticals Incorporated
130 Waverly Street
Cambridge, Massachusetts 02139
Attention: Thomas G. Auchincloss, Jr.,
Vice President of Finance
A-5