Exhibit 10.50
Xxxxxxx Capital Management, LLC
0000 Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
June 29, 2004
Genaissance Pharmaceuticals, Inc.
Xxxx Xxxxxxx Xxxx
Xxx Xxxxx, Xxxxxxxxxxx 00000
Attn: Xxxxx Xxxxx
Re: LIMITATIONS ON CONVERSIONS
Dear Xx. Xxxxx:
Reference is made to that certain Securities Purchase Agreement, dated
as of October 29, 2003, by and between Genaissance Pharmaceuticals, Inc. (the
"COMPANY") and RAM Trading, Ltd. (the "SECURITIES PURCHASE AGREEMENT"), the
Registration Rights Agreement, dated as of October 29, 2003, by and between the
Company and RAM Trading, Ltd. (the "REGISTRATION RIGHTS AGREEMENT"), the
Certificate of Designations, Preferences and Rights of the Series A Preferred
Stock of the Company (the "CERTIFICATE OF DESIGNATIONS") and the warrants (the
"WARRANTS") to purchase shares of the Company's Series A Preferred Stock issued
pursuant to the Securities Purchase Agreement (the Securities Purchase
Agreement, the Registration Rights Agreement, the Warrants and the Certificate
of Designations, collectively the "TRANSACTION DOCUMENTS"). Unless otherwise
defined herein, capitalized terms have the meanings set forth in the Certificate
of Designations.
This letter agreement shall confirm our agreement to certain
restrictions concerning the conversion of shares of the Company's Series A
Preferred Stock by RAM Trading, Ltd. ("BUYER") as set forth below.
For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Company and Buyer agree and confirm the
following matters:
Notwithstanding anything in the Transaction Documents to the contrary,
in no event shall the Company effect any conversion of, and no Buyer
shall have the right to convert any shares of Series A Preferred Stock
(the "PREFERRED SHARES") into shares of Common to the extent that,
after giving effect to such conversion such Buyer (together with such
Buyer's affiliates), through the conversion of Preferred Shares or
otherwise, would beneficially own in excess of 9.99% of the number of
shares of Common outstanding immediately after giving effect to such
conversion. For purposes of the foregoing sentence, the number of
shares of Common beneficially owned by Buyer and its affiliates shall
include the number of shares of Common issuable upon conversion of the
Preferred Shares with respect to which the determination of such
sentence is being made, but shall
exclude the number of shares of Common which would be issuable upon (i)
conversion of the remaining unconverted Preferred Shares beneficially
owned by Buyer and its affiliates and (ii) conversion or exercise of
the unconverted or unexercised portion of any other securities of the
Company beneficially owned by Buyer and its affiliates subject to a
limitation on conversion analogous to the limitation contained in this
paragraph. Except as set forth in the preceding sentence, for purposes
of this paragraph beneficial ownership shall be calculated in
accordance with Section 13(d) of the Securities Exchange Act of 1934,
as amended. For purposes of this paragraph, in determining the number
of outstanding shares of Common, Buyer may rely on the number of
outstanding shares of Common as reflected in (1) the Company's most
recent Form 10-Q or Form 10-K, as the case may be, (2) a more recent
public announcement by the Company or (3) any other notice by the
Company or its transfer agent setting forth the number of shares of
Common outstanding. For any reason at any time, upon the written or
oral request of any Buyer, the Company shall within two (2) Business
Days confirm orally and in writing to Buyer the number of shares Common
then outstanding. Each delivery of a notice of election to convert
shares pursuant to Section 5(a) of the Certificate of Designations will
constitute a representation by the Buyer that it has evaluated the
limitation set forth in this paragraph and determined that issuance of
the full number of shares of Common Stock requested in such conversion
notice is permitted under this paragraph. In any case, the number of
outstanding shares of Common shall be determined after giving effect to
the conversion or exercise of Securities of the Company, including the
Preferred Shares, by Buyer or its affiliates since the date as of which
such number of outstanding shares of Common was reported.
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This letter agreement is effective June 29, 2004 and shall be binding
upon the parties and their respective transferees, successors and assigns.
If the terms of this letter are acceptable to you, please sign below
where indicated.
Very truly yours,
RAM TRADING, LTD.
By: Xxxxxxx Capital Management, LLC
Its: Investment Manager
By: /s/ XXXXX X. XXXX
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Xxxxx X. Xxxx
Its: Vice President
Agreed and Accepted this 29th day of June, 2004.
GENAISSANCE PHARMACEUTICALS, INC.
By: /s/ XXXXX XXXXX
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Name: Xxxxx Xxxxx
Title: President and Chief Executive Officer
