AMENDMENT TO SECURITIES PURCHASE AGREEMENT
AMENDMENT
TO
This
Amendment to Securities Purchase Agreement (this “Amendment”) is
entered into as of October 7, 2009 by and between Invus, L.P., a Bermuda limited
partnership (the “Investor”), and
Lexicon Pharmaceuticals, Inc., a Delaware corporation (the “Company”). Capitalized
terms used but not otherwise defined herein shall have the meanings ascribed to
them in the Securities Purchase Agreement (as defined below).
W I T N E
S S E T H :
WHEREAS,
the Investor and the Company entered into that certain Securities Purchase
Agreement, dated as of June 17, 2007 (the “Securities Purchase
Agreement”), and that certain Stockholders’ Agreement, made as of June
17, 2007 (the “Stockholders’
Agreement”);
WHEREAS,
the Company desires to issue and sell shares of Company Common Stock in an
underwritten offering registered under the Securities Act (the “Offering”), which
Offering requires the consent of the Investor under the Securities Purchase
Agreement; and
WHEREAS,
in connection with the Offering, the Investor and the Company desire to amend
the Securities Purchase Agreement as set forth below to (a) modify the
definition of Second Rights Offering Trigger Date, (b) extend the period during
which the Investor may deliver the First Rights Offering Notice and Second
Rights Offering Notice from ninety (90) days to one (1) year after the First
Rights Offering Trigger Date and Second Rights Offering Trigger Date,
respectively, (c) eliminate the Investor’s obligation to purchase unsubscribed
Rights Shares at the expiration of a Rights Offering, and (d) make certain other
amendments to the terms thereof.
NOW,
THEREFORE, intending to be legally bound hereby, the parties hereto hereby agree
as follows:
Section
1. Amendment to Section 1.01 of
the Securities Purchase Agreement
The definition of “Oversubscription Pro
Rata Number” in Section 1.01 of the Securities Purchase Agreement is hereby
amended and restated in its entirety to read as follows:
“Oversubscription Pro Rata
Number” shall mean, for each holder of a Right exercising Rights Offering
Oversubscription rights, a fraction the numerator of which is the total number
of shares of Company Common Stock owned by such holder and the denominator of
which is the total number of outstanding shares of Company Common Stock held by
all holders of Rights who have validly exercised Rights Offering
Oversubscription rights in the relevant Rights Offering (it being understood
that no shares shall be deemed owned by more than one holder for purposes
hereof); provided that,
to the extent any holders validly exercising Rights Offering Oversubscription
rights exercise such rights with respect to less than their entire respective
Oversubscription Pro Rata Numbers of Oversubscription Shares (with the
unsubscribed-for Oversubscription Shares being referred to as “Excess Oversubscription
Shares”), the Oversubscription Pro Rata Numbers of all other holders
validly exercising Rights Offering Oversubscription rights in full shall be
increased proportionately up to the maximum number of Oversubscription Shares
such holders elect to purchase (it being the intent of this provision that the
Oversubscription Pro Rata Numbers be established such that any such Excess
Oversubscription Shares be allocated among holders exercising Rights Offering
Oversubscription rights in full on a pro rata basis based on the number of
Oversubscription Shares allocated to such holders, up to the total number of
Excess Oversubscription Shares such holders elect to purchase); provided further, with the
written consent of both the Investor and the Company, the determination of the
Oversubscription Pro Rata Number may be based on another customary proration
method.
Section 1.01 of the Securities Purchase
Agreement is hereby amended by adding the following definition of
“Oversubscription Shares” immediately after the definition of “Oversubscription
Pro Rata Number” therein as follows:
“Oversubscription
Shares” shall mean First Rights Offering Oversubscription Shares in the
First Rights Offering or Second Rights Offering Oversubscription Shares in the
Second Rights Offering, as applicable.
The definition of “Second Rights
Offering Trigger Date” in Section 1.01 of the Securities Purchase Agreement is
hereby amended and restated in its entirety to read as follows:
“Second Rights Offering
Trigger Date” means the date that is (i) ninety (90) days after the
delivery of the First Rights Offering Notice or (ii) if such notice is not
delivered, the date of the expiration of the period (as it may be extended by
any Rights Offering Notice Blackout Period) in which the Investor may give
notice to require the Company to conduct the First Rights Offering pursuant to
Section 3.01(a).
Section
2. Amendments to Section 3.01
of the Securities Purchase Agreement
The first
sentence of Section 3.01(a) of the Securities Purchase Agreement is hereby
amended and restated in its entirety to read as follows:
Subject
to Section 3.03(e), for a period of one (1) year following the First Rights
Offering Trigger Date, the Investor shall have the right, but not the
obligation, exercisable by a written notice (the “First Rights Offering
Notice”) to the Company in accordance with Section 10.02, to require the
Company to make a pro rata offering (the “First Rights
Offering”) to all holders of Company Common Stock (including the Investor
and its affiliates) of non-transferable subscription rights (the “First Rights”)
entitling the holders thereof to purchase shares of Company Common Stock, on the
terms set forth herein, (i) in an aggregate amount equal to the First Rights
Offering Amount, and (ii) at a price per share (the “First Rights Offering
Price”) to be designated by the Investor at any time on or after delivery
of the First Rights Offering Notice and before the establishment of the record
date for the distribution of the First Rights to the Company’s stockholders
(provided that the establishment of such record date shall not be prior to the
time the First Rights Offering Registration Statement shall have been declared
effective by the SEC) by written notice (the “First Rights Offering
Pricing Notice”) to the Company in accordance with Section 10.02; provided that the First
Rights Offering Price shall be any price (A) at or above the lower of $4.50 (as
adjusted for any stock splits, reverse splits, stock dividends, combinations or
similar transactions occurring after the date hereof and prior to the First
Rights Offering) and the average of the volume weighted average trading prices
of the Company Common Stock on the Nasdaq Stock Market for the ten (10) full
trading days immediately prior to the date of the First Rights Offering Pricing
Notice (the “First
Rights Offering Market Price”) and (B) at or below the higher of $4.50
(as adjusted for any stock splits, reverse splits, stock dividends, combinations
or similar transactions occurring after the date hereof and prior to the First
Rights Offering) and the First Rights Offering Market Price.
1
Section 3.01(b) of the Securities
Purchase Agreement is hereby amended and restated in its entirety to read as
follows:
(b) In
connection with the First Rights Offering, upon the terms and subject to the
conditions of this Agreement, the Investor shall be required to subscribe for
and purchase a number of First Rights Shares that is not less than its Pro Rata
Number of First Rights Shares.
Section
3. Amendments to Section 3.02
of the Securities Purchase Agreement
The first
sentence of Section 3.02(a) of the Securities Purchase Agreement is hereby
amended and restated in its entirety to read as follows:
Subject
to Section 3.03(e), for a period of one (1) year following the Second Rights
Offering Trigger Date, the Investor shall have the right, but not the
obligation, exercisable by written notice (the “Second Rights Offering
Notice” and, together with the First Rights Offering notice, the “Rights Offering
Notices”) to the Company in accordance with Section 10.02, to require the
Company to make a pro rata offering (the “Second Rights
Offering” and, together with the First Rights Offering, the “Rights Offerings”) to
all holders of Company Common Stock (including the Investor and its affiliates)
of non-transferable subscription rights (the “Second Rights” and,
together with the First Rights, the “Rights”) entitling
the holders thereof to purchase shares of Company Common Stock, on the terms set
forth herein, (i) in an aggregate amount equal to the Second Rights Offering
Amount, and (ii) at a price per share (the “Second Rights Offering
Price”) to be designated by the Investor at any time on or after delivery
of the Second Rights Offering Notice and before the establishment of the record
date for the distribution of the Second Rights to the Company’s stockholders
(provided that the establishment of such record date shall not be prior to the
time the Second Rights Offering Registration Statement shall have been declared
effective by the SEC) by written notice (the “Second Rights Offering
Pricing Notice”) to the Company in accordance with Section 10.02; provided that the Second
Rights Offering Price shall be any price (A) at or above the lower of $4.50 (as
adjusted for any stock splits, reverse splits, stock dividends, combinations or
similar transactions occurring after the date hereof and prior to the Second
Rights Offering) and the average of the volume weighted average trading prices
of the Company Common Stock on the Nasdaq Stock Market for the ten (10) full
trading days immediately prior to the date of the Second Rights Offering Pricing
Notice (the “Second
Rights Offering Market Price”) and (B) at or below the higher of $4.50
(as adjusted for any stock splits, reverse splits, stock dividends, combinations
or similar transactions occurring after the date hereof and prior to the Second
Rights Offering) and the Second Rights Offering Market Price.
2
Section 3.02(b) of the Securities
Purchase Agreement is hereby amended and restated in its entirety to read as
follows:
(b) In
connection with the Second Rights Offering, upon the terms and subject to the
conditions of this Agreement, the Investor shall be required to subscribe for
and purchase a number of Second Rights Shares that is not less than its Pro Rata
Number of Second Rights Shares.
Section
4. Amendment to Section 3.03 of
the Securities Purchase Agreement
Section 3.03 of the Securities Purchase
Agreement is hereby amended by adding new Section 3.03(e) at the end thereof as
follows:
(e) In
the event that the Company delivers a bona fide Notice of Issuance in connection
with a Marketed Offering (in each case, as such terms are defined and
contemplated by Section 4.02 of the Stockholders’ Agreement) to the Investor
during the period in which the Investor may deliver any Rights Offering Notice
under Section 3.01(a) or Section 3.02(a), the Investor shall have the right, for
a period of ten (10) business days from the date of receipt of such Notice of
Issuance, to deliver a Rights Offering Notice to the Company, in which case the
Company shall retract the Notice of Issuance, proceed with the Rights Offering
contemplated by the Investor’s notice, and forego the Marketed Offering
contemplated thereby until such Rights Offering is completed or, with the
consent of the Investor, terminated. In the event that the Investor
does not deliver such Rights Offering Notice to the Company upon the expiration
of such ten (10) business day period, the Company shall have the right to
conduct the Marketed Offering contemplated by the Notice of Issuance, and the
Investor shall not deliver a Rights Offering Notice to the Company (i) for a
period of thirty (30) days from the date of delivery by the Company of the
Notice of Issuance (the “Initial Rights Offering
Notice Blackout Period”) and (ii) so long as the offering of New
Securities (as defined in the Stockholders’ Agreement) described in such Notice
of Issuance occurs within the Initial Rights Offering Notice Blackout Period,
and only if requested in writing by the underwriters for the Marketed Offering
contemplated by such Notice of Issuance, for a period of ninety (90) days from
the date of issuance of the New Securities contemplated by such Notice of
Issuance (such period, together with the Initial Rights Offering Notice Blackout
Period, the “Rights
Offering Notice Blackout Periods”). Notwithstanding anything
to the contrary in the foregoing, the Company may exercise its right to cause
Rights Offering Notice Blackout Periods under this Section 3.03(e) only once in
any twelve (12) month period; provided that, for such
purposes, the Company shall not be deemed to have exercised such right if,
following the Company’s delivery of a Notice of Issuance in connection with a
Marketed Offering, the Investor shall have delivered a Rights Offering Notice to
the Company and the Company shall have retracted such Notice of Issuance in
accordance with this Section 3.03(e); and provided, further, that
nothing in this Section 3.03(e) shall prohibit the Company from conducting a
Marketed Offering without exercising its right to cause a Rights Offering Notice
Blackout Period under this Section 3.03(e). The running of the period
in which the Investor may deliver any Rights Offering Notice under Section
3.01(a) or Section 3.02(a), as applicable, shall be tolled while any Rights
Offering Notice Blackout Period is in effect.
3
Section
5. Addition of Section 3.04 of
the Securities Purchase Agreement
The Securities Purchase Agreement is
hereby amended by adding new Section 3.04:
SECTION
3.04. Shelf
Registration.
(a) So
long as it would not reasonably be expected to materially delay the applicable
Rights Offering, (i) the Company may, at its option, file with the SEC one or
more shelf registration statements on Form S-3 (or, if Form S-3 is not then
available to the Company, on such form of registration statement as is then
available to effect a registration of securities), in form and substance
reasonably satisfactory to the Investor, covering the issuance of Rights and
Rights Shares, together with such other securities as the Company may elect
(together with the prospectus relating thereto and any prospectus supplement and
offering documents, a “Shelf Registration
Statement”) and (ii) in the event the Company has in effect, at the time
of the Investor’s delivery of a Rights Offering Notice, an effective Shelf
Registration Statement sufficient to cover the issuance of the Rights and the
Rights Shares to be offered in such Rights Offering, then rather than filing a
Rights Offering Registration Statement pursuant to Section 3.01(c) or 3.02(c),
as applicable, the Company shall be entitled to employ such Shelf Registration
Statement as the relevant Rights Offering Registration Statement for purposes of
such Rights Offering. Any such Shelf Registration Statement (and each amendment
or supplement thereto, and each request for acceleration of effectiveness
thereof) will be provided to the Investor prior to its filing with or other
submission to the SEC. The Company shall not include any other
securities in the prospectus supplement relating to any Rights
Offering. Any such Shelf Registration Statement employed as a Rights
Offering Registration Statement will comply in all material respects with the
requirements of the Securities Act and the rules and regulations thereunder and
other applicable Laws. The Company promptly will correct any
information included in any Shelf Registration Statement employed as a Rights
Offering Registration Statement if, and to the extent that, such information
becomes false or misleading in any material respect, and the Company will take
all steps necessary to cause the applicable prospectus (including any applicable
prospectus supplement) contained in such Shelf Registration Statement employed
as a Rights Offering Registration Statement, as so corrected, to be filed with
the SEC and to be disseminated to the distributees of Rights, in each case as
and to the extent required by applicable federal securities laws. The
Investor will be given a reasonable opportunity to review and comment upon any
Shelf Registration Statement in each instance before it is filed with the
SEC. In addition, the Company will provide the Investor with any
written comments or other written communications that the Company receives from
time to time from the SEC or its staff with respect to any Shelf Registration
Statement promptly after the receipt of such comments or other
communications.
4
(b) Notwithstanding
the provisions of Section 3.01(d) or 3.02(d), as applicable, in the event the
Company employs a Shelf Registration Statement as the relevant Rights Offering
Registration Statement for purposes of a Rights Offering, the Company will
commence such Rights Offering as soon as reasonably practicable following its
receipt of the Rights Offering Notice relating thereto.
Section
6. Amendment to Section 6.02(a)
of the Securities Purchase Agreement
Section 6.02(a) of the Securities
Purchase Agreement is hereby amended and restated in its entirety to read as
follows:
(a) Until
(i) the completion of the Second Rights Offering as contemplated by Section 3.02
or (ii) the expiration of the period following the Second Rights Offering
Trigger Date during which the Investor may exercise its right to require the
Company to conduct the Second Rights Offering (as such period may be extended),
if the Investor does not exercise such right within such period, the prior
written consent of the Investor shall be required for the issuance by the
Company of any shares of Company Common Stock for a per share price of less than
$4.50 (as adjusted for any stock splits, reverse splits, stock dividends,
combinations or similar transactions occurring after the date hereof and prior
to the Second Rights Offering); provided that the provisions
of this Section 6.02 shall not apply to the issuance of Company Common Stock (A)
pursuant to employee or director stock option, incentive compensation or similar
plans approved by the Board or a duly authorized committee thereof or such
committee, (B) to persons involved in the pharmaceutical industry in connection
with simultaneous strategic transactions involving such persons in the ordinary
course or (C) in connection with the exercise, on or after February 27, 2011, of
the Company’s option to acquire Symphony Icon, Inc. in accordance with the terms
of its Purchase Option Agreement among the Company, Symphony Icon Holdings LLC
and Symphony Icon, Inc., as such agreement is in effect on October 6,
2009.
5
Section
7. Consent to Further
Amendments; Further Assurances
The parties hereto hereby consent to
such other amendments and changes to the Securities Purchase Agreement and
Ancillary Agreements as necessary to give effect to the intent of this Amendment
and shall execute and deliver or cause to be executed and delivered any
additional documents, certificates, consents, waivers and instruments and
perform any additional acts that may be reasonably necessary or appropriate to
effectuate and perform the provisions of this Amendment and those transactions
contemplated herein.
Section
8. Consent to Waiver of
Investor Election Period in Sections 4.02(b) and 4.02(c)of the Stockholders’
Agreement; Rights Offering Blackout
(a) With
respect to the Offering (including any related overallotment option), the
Company and the Investor hereby waive any applicability to the Offering of the
notice provisions contained in Sections 4.02(b) and (c) of the Stockholders’
Agreement and agree that notice will be delivered as follows: the Company shall
deliver a Notice of Issuance specifying the price to public and number of shares
to be sold to public in the Offering on the date the underwriting agreement is
expected to be signed by the Company in connection with the Offering and, upon
receipt of such notice by the Investor, the Investor (i) shall exercise its
rights under Section 4.02 with respect to the Offering by delivering notice of
such exercise substantially concurrently with the signing by the Company of the
underwriting agreement with respect thereto, and (ii) shall retain the right to
make an election whether to exercise its rights under Section 4.02 with respect
to any additional New Securities issued upon the exercise by the underwriters of
their overallotment option in connection with such Offering by delivering notice
of such exercise as promptly as practicable following the Company’s notice to
the Investor of the underwriters’ exercise of such option. For the
avoidance of doubt, with respect to the Offering, the Investor waives its right
to deliver notice of its intent to participate in the Offering ten (10) business
days following receipt of the Notice of Issuance related thereto.
(b) The
Investor agrees not to exercise its right to cause the Company to conduct a
Rights Offering during the ninety (90) day period following the delivery of the
Offering Consent (as defined in Section 9 hereof). Notwithstanding
the amendments to Section 3.03 of the Securities Purchase Agreement effected
hereby, the periods in which the Investor may deliver any Rights Offering Notice
under Section 3.01(a) and Section 3.02(a) shall not be extended by such ninety
(90) day period, and shall not be deemed to be an exercise of the Company’s
right to cause Rights Offering Notice Blackout Periods under Section
3.03(e).
(c) The
Investor expressly acknowledges and agrees that the provisions of Sections
4.02(b) and 4.02(c) of the Stockholders’ Agreement relating to the free
transferability of shares to be received in the Offering shall not affect its
obligations under its “lock-up” agreement dated October 5, 2009 with the
underwriters, which restricts the transferability of New Securities to be issued
by the Company in connection with the Offering.
6
Section
9. Effectiveness;
Termination
This
Amendment shall become effective only upon delivery by the Investor to the
Company, pursuant to Section 6.02(a) of the Securities Purchase Agreement, of
the Investor’s written consent to the Offering substantially in the form of
Exhibit A hereto (the “Offering
Consent”). Notwithstanding any such delivery, in the event
that the underwriting agreement relating to the Offering is not executed on or
before October 13, 2009, (i) this Amendment shall terminate and cease to have
any force or effect and (ii) the Offering Consent shall be of no force or
effect.
Section
10. Ratification and
Confirmation
The
Securities Purchase Agreement and Stockholders’ Agreement, as hereby amended or
supplemented, are hereby ratified and confirmed in all respects. This
Amendment shall be interpreted and construed together with, and as a part of,
the Securities Purchase Agreement or Stockholders’ Agreement, as
applicable. Any reference in any other document to the Securities
Purchase Agreement or Stockholders’ Agreement shall be deemed to refer to the
Securities Purchase Agreement or Stockholders’ Agreement, as applicable, as
modified by this Amendment. The execution, delivery and effectiveness
of this Amendment shall not constitute a modification or waiver of any provision
of the Securities Purchase Agreement or Stockholders’ Agreement except as
expressly provided herein.
Section
11. Governing
Law
This
Amendment shall be governed by, and construed in accordance with, the laws of
the State of New York. All actions and proceedings arising out of or
relating to this Amendment shall be heard and determined exclusively in any New
York state or federal court, in each case sitting in the Borough of
Manhattan. The parties hereto hereby (a) submit to the exclusive
jurisdiction of any New York state or federal court, in each case sitting in the
Borough of Manhattan, for the purpose of any Action arising out of or relating
to this Amendment brought by any party hereto, and (b) irrevocably waive, and
agree not to assert by way of motion, defense, or otherwise, in any such Action,
any claim that it is not subject personally to the jurisdiction of the
above-named courts, that its property is exempt or immune from attachment or
execution, that the Action is brought in an inconvenient forum, that the venue
of the Action is improper, or that this Amendment may not be enforced in or by
any of the above-named courts.
Section
12. Counterparts
This
Amendment may be executed and delivered (including by facsimile transmission) in
one or more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed and delivered shall be deemed to be an
original but all of which taken together shall constitute one and the same
agreement.
[Signature
Page Follows]
7
IN
WITNESS WHEREOF, the Investor and the Company have caused this Amendment to be
executed as of the date first written above by their respective officers
thereunto duly authorized.
| INVESTOR: | ||
|
INVUS,
L.P.
a Bermuda limited
partnership
|
||
|
|
By:
|
/s/
Xxxxxxx Xxxxxxx
|
| Name: |
Xxxxxxx
Xxxxxxx
|
|
| Title: |
President, Invus Advisors,
L.L.C.
|
|
|
|
||
| COMPANY | ||
|
Lexicon
Pharmaceuticals, Inc.,
a Delaware corporation
|
||
|
|
By:
|
/s/
Xxxxxxx X. Xxxx
|
| Name: |
Xxxxxxx
X. Xxxx
|
|
| Title: |
Executive Vice President
and
|
|
|
General
Counsel
|
||
8
Exhibit A
NOTICE
OF
CONSENT TO
OFFERING
October
__, 2009
Invus,
L.P.
c/o The
Invus Group, L.L.C.
000
Xxxxxxxxx Xxxxxx (00xx
Xxxxx)
Xxx Xxxx,
Xxx Xxxx 00000
Lexicon
Pharmaceuticals, Inc.
0000
Xxxxxxxxxx Xxxxxx Xxxxx
Xxx
Xxxxxxxxx, Xxxxx 00000
Attn:
President and Chief Executive Officer
Ladies
and Gentlemen:
Reference is made to that certain
Securities Purchase Agreement, dated as of June 17, 2007 (as amended, the “Securities Purchase
Agreement”), by and between Invus, L.P. (the “Investor”) and
Lexicon Pharmaceuticals, Inc. (the “Company”) and to that
certain Amendment to Securities Purchase Agreement, dated as of October [__],
2009, by and between the Investor and the Company. Capitalized terms
used but not otherwise defined herein shall have the meanings ascribed to them
in the Securities Purchase Agreement.
Pursuant to Section 6.02(a) of the
Securities Purchase Agreement, the Investor hereby consents to an underwritten
offering by the Company of Company Common Stock on the following
terms:
Issuer: Lexicon
Pharmaceuticals, Inc.
Offering: _____
shares of Company Common Stock (the “Firm Shares”), and up to
_________additional shares to cover over allotments by the underwriters in such
offering as provided in the underwriting agreement to be executed in connection
with such offering (the “Underwriting Agreement”)
Size: $_____ at a
$_____ per share purchase price to the public.
Timing: pricing to
occur on or before _____, 2009 with closing within T+3 (subject to extension as
provided in the Underwriting Agreement).
|
INVUS,
L.P.
a Bermuda limited
partnership
|
||
|
|
By:
|
|
| Name: |
|
|
| Title: |
|
|
|
|
||
9
