EXHIBIT 4.2
RESALE REGISTRATRION RIGHTS AGREEMENT
among
VERTEX PHARMACEUTICALS INCORPORATED,
and
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
CREDIT SUISSE FIRST BOSTON CORPORATION,
ROBERTSON STEPHENS, INC.,
CHASE SECURITIES INC.,
J.P. MORGAN SECURITIES INC.
as Initial Purchasers
Dated September 19, 2000
Resale Registration Rights Agreement (this "Agreement"), dated
September 19, 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"), Credit Suisse First Boston Corporation, Robertson Stephens, Inc., Chase
Securities Inc. and J.P. Morgan Securities Inc., as Initial Purchasers
(collectively, the "Initial Purchasers").
Pursuant to the Purchase Agreement, dated September 13, 2000, between
the Issuer and the Initial Purchasers (the "Purchase Agreement"), the Initial
Purchasers have agreed to purchase from the Issuer $345,000,000 in aggregate
principal amount of 5% Convertible Subordinated Notes due September 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 19 and September 19.
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 September 19, 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 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.
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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 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;
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(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.
3. LIQUIDATED DAMAGES.
(a) If:
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(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 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
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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 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)
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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 that have furnished
information pursuant to Section 4(d) hereof, Merrill Lynch, as
representative of the Initial Purchasers, and the underwriter(s), if
any, promptly (but in any event 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
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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 that has furnished
information pursuant to Section 4(d) hereof, each Initial Purchaser and
each of the underwriter(s), if any, at least five Business Days 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 five 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
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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. 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 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
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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 Transfer Restricted
Securities held by any Holders at the request of such Holders 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;
(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)
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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 (unless required by
applicable securities laws); and enable such Transfer Restricted
Securities to be in such denominations and registered in such names as
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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 filed with the Commission to enable such
Indenture to be so qualified in a timely manner.
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(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 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
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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
omission, or any such alleged untrue statement or
15
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:
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
One Financial Center
Boston, Massachusetts 02111
Attention: Michael Fantozzi, 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 /s/ Joshua Boger
----------------------------------
Name: Joshua Boger
Title: President & CEO
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
CREDIT SUISSE FIRST BOSTON
CORPORATION,
ROBERTSON STEPHENS, INC.
CHASE SECURITIES INC.
J.P. MORGAN SECURITIES INC.,
as Initial Purchasers
By: Merrill Lynch, Pierce, Fenner & Smith
Incorporated
By: /s/ Mark Robinson
---------------------------------
Authorized Signatory
Exhibit A
VERTEX PHARMACEUTICALS INCORPORATED
FORM OF SELLING SECURITYHOLDER NOTICE AND QUESTIONNAIRE
The undersigned beneficial holder of 5% Convertible Subordinated Notes
due September 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 September 19, 2000 (the "Registration Rights Agreement"), between the
Issuer and Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Credit Suisse First Boston Corporation, Robertson Stephens, Inc.,
Chase Securities Inc. and J.P. Morgan Securities Inc., as 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 the Transfer
Restricted Securities are sold through underwriters or broker-dealers,
A-3
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.
Pursuant to the Registration Rights Agreement, the Issuer has agreed
under certain circumstances to indemnify the Selling Securityholders against
certain liabilities.
A-4
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: Sarah P. Cecil, Corporate Counsel
A-5