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EXHIBIT 10.1
EXECUTION COPY
_______________________________________________________________________________
SECURITIES PURCHASE AGREEMENT
among
LYNX THERAPEUTICS, INC.
and
THE INVESTORS SIGNATORY HERETO
Dated as of May 24, 2001
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SECURITIES PURCHASE AGREEMENT (this "Agreement"), dated as of May 24,
2001, among Lynx Therapeutics, Inc., a Delaware corporation (the "Company"), and
the investors signatory hereto (each such investor is a "Purchaser" and all such
investors are, collectively, the "Purchasers").
WHEREAS, subject to the terms and conditions set forth in this Agreement
and pursuant to Section 4(2) of the Securities Act of 1933, as amended (the
"Securities Act"), and Rule 506 promulgated thereunder the Company desires to
issue and sell to the Purchasers and the Purchasers, severally and not jointly,
desire to purchase from the Company, shares of the Company's common stock, $.01
par value per share (the "Common Stock"), and certain other securities of the
Company as more fully described in this Agreement.
NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in
this Agreement, and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the Company and the Purchasers agree
as follows:
ARTICLE I
PURCHASE AND SALE
1.1 Closing.
Subject to the terms and conditions set forth in this Agreement,
the Company shall issue and sell to the Purchasers and the Purchasers shall,
severally and not jointly, purchase shares of Common Stock ("Shares") and
warrants to purchase Shares for an aggregate purchase price of $11,129,969.76
(the "Purchase Price"). The purchase and sale of the Shares and Warrants
hereunder shall be closed (the "Closing") at the offices of Xxxxxxxx Xxxxxxxxx
Xxxxxx Xxxxxxxx & Xxxxxx LLP ("Xxxxxxxx Xxxxxxxxx"), 0000 Xxxxxx xx xxx
Xxxxxxxx, Xxx Xxxx, XX 00000, on the execution date of this Agreement. The date
of the Closing is hereinafter referred to as the "Closing Date."
(a) The Closing Date. On the Closing Date, the parties shall deliver or
shall cause to be delivered the following: (A) the Company shall deliver to each
Purchaser: (1) an original stock certificate representing a number of Shares by
dividing the aggregate purchase price indicated below such Purchaser's name on
the signature page of this Agreement by the Per Share Purchase Price (as defined
herein), registered in the name of such Purchaser, (2) a Common Stock purchase
warrant, in the form of Exhibit C, registered in the name of such Purchaser,
pursuant to which such Purchaser shall have the right to acquire a number of
shares of Common Stock equal to 25% of the Shares purchased by it hereunder upon
the terms set forth therein (collectively, the "Warrants"), (3) an executed
Registration Rights Agreement, dated the date hereof, among the Company and the
Purchasers, in the form of Exhibit A (the "Registration Rights Agreement"), (4)
Transfer Agent Instructions, in the form of Exhibit D, executed by the Company
and delivered to and acknowledged in writing by the Company's transfer agent
(the "Transfer Agent Instructions") and (5) the legal opinion of Xxxxxx Godward
LLP, outside counsel to the
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Company, in the form of Exhibit E; and (B) each Purchaser shall deliver: (1) the
purchase price indicated below such Purchaser's name on the signature page to
this Agreement, in United States dollars in immediately available funds by wire
transfer to an account designated in writing by the Company for such purpose and
(2) an executed Registration Rights Agreement.
1.2 Certain Defined Terms. As used in this Agreement, the
following terms shall have the meanings set forth in this Section 1.2:
(a) "Business Day" shall mean any day except Saturday, Sunday and any
day which shall be a federal legal holiday or a day on which banking
institutions in the State of New York or the State of California are authorized
or required by law or other governmental action to close.
(b) "Commission" means the Securities and Exchange Commission.
(c) "NASDAQ" means the Nasdaq National Market.
(d) "Person" means an individual or corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof)
or other entity of any kind.
(e) "Purchase Price Per Share" means 90% of the average of the VWAP's
(as defined below) for each of the five Trading Days (as defined below)
immediately preceding the Closing Date.
(f) "Subsequent Market" shall mean any of the New York Stock
Exchange, American Stock Exchange, or Nasdaq SmallCap Market.
(g) "Trading Day" means (i) a day on which the Common Stock is traded on
the NASDAQ or on the Subsequent Market on which the Common Stock is then listed
or quoted, as the case may be, or (ii) if the Common Stock is not listed on the
NASDAQ or a Subsequent Market, a day on which the Common Stock is traded in the
over-the-counter market, as reported by the OTC Bulletin Board, or (iii) if the
Common Stock is not quoted on the OTC Bulletin Board, a day on which the Common
Stock is quoted in the over-the-counter market as reported by the National
Quotation Bureau Incorporated (or any similar organization or agency succeeding
its functions of reporting prices); provided, that in the event that the Common
Stock is not listed or quoted as set forth in (i), (ii) and (iii) hereof, then
Trading Day shall mean a Business Day.
(h) "VWAP" means the daily volume weighted average price (as reported by
Bloomberg Financial L.P. using the VAP function) of the Common Stock on the
NASDAQ or Subsequent Market (as applicable) on the date in question.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.1 Representations and Warranties of the Company. The Company hereby
makes the following representations and warranties to the Purchasers as of the
date of this Agreement:
(a) Organization and Qualification. The Company is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware, with the requisite corporate power and authority to own and use its
properties and assets and to carry on its business as currently conducted and
described in the SEC Documents (as defined below). The Company has no
subsidiaries other than Lynx Therapeutics GmbH (the "Subsidiary"). The
Subsidiary is an entity, duly incorporated or otherwise organized, validly
existing and in good standing (with respect to jurisdictions that recognize such
concept) under the laws of the jurisdiction of its incorporation or organization
(as applicable), with the requisite power and authority to own and use its
properties and assets and to carry on its business as currently conducted. Each
of the Company and the Subsidiary is duly qualified to do business and is in
good standing (with respect to jurisdictions that recognize such concept) as a
foreign corporation or other entity in each jurisdiction in which the nature of
the business conducted or property owned by it makes such qualification
necessary, except where the failure to be so qualified or in good standing, as
the case may be, would not, individually or in the aggregate, (x) adversely
affect the legality, validity or enforceability of the Securities (as defined
below), this Agreement, the Registration Rights Agreement, the Transfer Agent
Instructions or the Warrants (collectively, the "Transaction Documents"), (y)
have or result in a material adverse effect on the results of operations, assets
or condition (financial or otherwise) of the Company and the Subsidiary, taken
as a whole, or (z) adversely impair the Company's ability to perform fully on a
timely basis its obligations under any of the Transaction Documents (any of (x),
(y) or (z), a "Material Adverse Effect").
(b) Authorization; Enforcement. The Company has the requisite
corporate power and authority to enter into and to consummate the transactions
contemplated by each of the Transaction Documents and otherwise to carry out its
obligations thereunder. The execution and delivery of each of the Transaction
Documents by the Company and the consummation by it of the transactions
contemplated thereby have been duly authorized by all necessary action on the
part of the Company and no further action is required by the Company. Each of
the Transaction Documents has been duly executed by the Company and, when
delivered in accordance with the terms hereof and thereof, and assuming the due
authorization, execution and delivery by the Purchasers, will constitute the
valid and binding obligation of the Company enforceable against the Company in
accordance with its terms, except as enforceability thereof may be limited by
(i) applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws, both state and federal, affecting creditors' and contracting parties'
rights or remedies generally or (ii) the exercise by courts of equity powers and
except as rights to indemnity and contribution may be limited by state or
federal securities laws or the public policy underlying such laws. Neither the
Company nor the Subsidiary is in violation of any of the provisions of its
respective certificate or articles of incorporation, by-laws or other
organizational or charter documents.
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(c) Capitalization. The number of authorized, issued and
outstanding capital stock of the Company as of March 31, 2001 is set forth in
Schedule 2.1(c). Except as disclosed in Schedule 2.1(c), the Company owns all of
the capital stock of the Subsidiary. No shares of Common Stock are entitled to
preemptive or similar rights, nor is any holder of the securities of the Company
entitled to preemptive or similar rights arising out of any agreement or
understanding with the Company or the Subsidiary by virtue of any of the
Transaction Documents. Except as a result of the purchase and sale of the Shares
and the Warrants and except as disclosed in Schedule 2.1(c) or set forth in the
SEC Documents, there are no outstanding options, warrants, script rights to
subscribe to, calls or commitments of any character whatsoever relating to, or
securities, rights or obligations convertible into or exchangeable for, or
giving any Person any right to subscribe for or acquire, any shares of Common
Stock, or contracts, commitments, understandings or arrangements by which the
Company or the Subsidiary is or may become bound to issue additional shares of
Common Stock, or securities or rights convertible or exchangeable into shares of
Common Stock. The issue and sale of the Securities (as defined below), will not
obligate the Company to issue shares of Common Stock or other securities to any
Person other than the Purchasers and will not result in a right of any holder of
Company securities to adjust the exercise or conversion or reset price under
such securities.
(d) Issuance of the Securities. The Securities (as defined
below) have been duly authorized and the Shares, when issued and paid for in
accordance with the terms hereof, and the Underlying Shares (as defined below),
when issued upon exercise of the Warrants, will be duly and validly issued,
fully paid and nonassessable, free and clear of all liens, encumbrances and
rights of first refusal of any kind (collectively, "Liens"). The Company has
reserved a sufficient number of duly authorized shares of Common Stock to issue
all of the Shares and for issuance hereunder upon exercise in full of the
Warrants. The shares of Common Stock issuable upon exercise of the Warrants are
referred to herein as the "Underlying Shares." The Shares, the Warrants and the
Underlying Shares are collectively referred to herein as, the "Securities."
(e) No Conflicts. The execution, delivery and performance of the
Transaction Documents by the Company and the consummation by the Company of the
transactions contemplated thereby do not and will not (i) conflict with or
violate any provision of the Company's or the Subsidiary's certificate or
articles of incorporation, bylaws or other charter documents (each as amended
through the date hereof), or (ii) subject to obtaining the Required Approvals
(as defined below), conflict with, or constitute a default (or an event which
with notice or lapse of time or both would become a default) under, or give to
others any rights of termination, amendment, acceleration or cancellation (with
or without notice, lapse of time or both) of, any agreement, instrument
(evidencing a Company or Subsidiary debt or otherwise) or other understanding to
which the Company or the Subsidiary is a party or by which any property or asset
of the Company or any Subsidiary is bound or affected, or (iii) result in a
violation of any law, rule, regulation, order, judgment, injunction, decree or
other restriction of any court or governmental authority to which the Company or
the Subsidiary is subject (including federal and state securities laws and
regulations), or by which any property or asset of the Company or the Subsidiary
is bound or affected; except in the case of each of clauses (ii) and (iii), as
would not, individually or in the aggregate, have or result in a Material
Adverse Effect. The business of the Company is not being conducted in violation
of any law, ordinance or regulation of any
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governmental authority, except for violations which, individually or in the
aggregate, could not have or result in a Material Adverse Effect.
(f) Filings, Consents and Approvals. Except as disclosed in
Schedule 2.1(f), neither the Company nor any Subsidiary is required to obtain
any consent, waiver, authorization or order of, give any notice to, or make any
filing or registration with, any court or other federal, state, local or other
governmental authority or other Person in connection with the execution,
delivery and performance by the Company of the Transaction Documents, other than
(i) the filings required pursuant to Section 3.10, (ii) the filing with the SEC
of a resale registration statement meeting the requirements set forth in the
Registration Rights Agreement and covering the resale by the Purchasers of the
Shares issued on the Closing Date and the Underlying Shares issuable upon
exercise of the Warrants (the "Registration Statement"), (iii) the
application(s) to the NASDAQ for the listing of the Shares and the Underlying
Shares for trading on the NASDAQ (and with any other national securities
exchange or market on which the Common Stock is then listed) in the time and
manner required thereby, and (iv) applicable Blue Sky filings (collectively, the
"Required Approvals").
(g) Litigation; Proceedings. Except as set forth in the SEC
Documents, and as disclosed in Schedule 2.1(g), there is no action, suit,
inquiry, notice of violation, proceeding or investigation pending or, to the
knowledge of the Company, threatened against or affecting the Company or the
Subsidiary or the respective properties before or by any court, arbitrator,
governmental or administrative agency or regulatory authority (federal, state,
county, local or foreign) (collectively, an "Action") which (i) adversely
affects or challenges the legality, validity or enforceability of any of the
Transaction Documents or the Securities or (ii) would, if there were an
unfavorable decision, individually or in the aggregate, have or result in a
Material Adverse Effect. Neither the Company nor the Subsidiary, nor any
director or officer thereof, is or has been the subject of any Action involving
(A) a claim of violation of or liability under federal or state securities laws
or (B) a claim of breach of fiduciary duty. The Company does not have pending
before the Commission any request for confidential treatment of information, and
the Company has no knowledge of any expected such request that would be made
prior to the Effective Date (as defined below). There has not been, and to the
best of the Company's knowledge there is not pending or contemplated, any
investigation by the Commission involving the Company or any current or former
director or officer of the Company. During the five years preceding the Closing
Date: (i) the Company has not commenced any legal proceedings against any of its
present or former stockholders or any investment bank and (ii) no legal
proceedings have been commenced against the Company or any of its present or
former directors or officers by a present or former stockholder or any
investment bank.
(h) No Default or Violation. Neither the Company nor the
Subsidiary (i) is in default under or in violation of (and no event has occurred
which has not been waived which, with notice or lapse of time or both, would
result in a default by the Company or any Subsidiary under), nor has the Company
or the Subsidiary received notice of a claim that it is in default under or that
it is in violation of, any indenture, loan or credit agreement or any other
agreement or instrument to which it is a party or by which it or any of its
properties is bound, (ii) is in violation of any order of any court, arbitrator
or governmental body, or (iii) is in violation of any statute, rule or
regulation of any governmental authority, in each case of clauses (i), (ii) or
(iii)
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above, except as would not individually or in the aggregate, reasonably be
expected to have or result in a Material Adverse Effect.
(i) Private Offering. Assuming the accuracy of the representations
and warranties of the Purchasers set forth in Sections 2.2(b)-(g), the offer,
issuance and sale of the Securities as contemplated hereby are exempt from the
registration requirements of the Securities Act. Neither the Company nor any
Person acting on its behalf has taken or is, to the knowledge of the Company,
contemplating taking any action which could subject the offering, issuance or
sale of such Securities to the registration requirements of the Securities Act
including soliciting any offer to buy or sell the Securities by means of any
form of general solicitation or advertising.
(j) SEC Documents; Financial Statements. The Company has filed all
reports required to be filed by it under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), including pursuant to Section 13(a) or 15(d)
thereof, for the 12 months preceding the date hereof (the foregoing materials
being collectively referred to herein as the "SEC Documents" and, together with
the Schedules to this Agreement, the "Disclosure Materials") on a timely basis
or has received a valid extension of such time of filing and has filed any such
SEC Documents prior to the expiration of any such extension. As of their
respective dates, the SEC Documents complied in all material respects with the
requirements of the Securities Act and the Exchange Act and the rules and
regulations of the Commission promulgated thereunder, and none of the SEC
Documents, when filed, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. All material agreements to which the Company is
a party or to which the property or assets of the Company are subject have been
filed as exhibits or incorporated by reference to the SEC Documents as required
under the Exchange Act. The financial statements of the Company included in the
SEC Documents comply in all material respects with applicable accounting
requirements and the rules and regulations of the Commission with respect
thereto as in effect at the time of filing. Such financial statements have been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis during the periods involved ("GAAP"), except as may be
otherwise specified in such financial statements or the notes thereto, and
fairly present in all material respects the financial position of the Company
and its consolidated subsidiaries as of and for the dates thereof and the
results of operations and cash flows for the periods then ended, subject, in the
case of unaudited statements, to normal, immaterial, year-end audit adjustments.
Since December 31, 2000, except as specifically disclosed in the SEC Documents,
(a) there has not been a Material Adverse Effect, (b) the Company has not
incurred any liabilities (contingent or otherwise) other than (x) liabilities
incurred in the ordinary course of business consistent with past practice and
(y) liabilities not required to be reflected in the Company's financial
statements pursuant to GAAP or required to be disclosed in filings made with the
Commission, (c) the Company has not altered its method of accounting or the
identity of its auditors, (d) the Company has not declared or made any payment
or distribution of cash or other property to its stockholders or officers or
directors (other than in compliance with existing Company stock option plans)
with respect to its capital stock, or purchased, redeemed (or made any
agreements to purchase or redeem) any shares of its capital stock and (e) the
Company has not issued or committed to issue shares of Common Stock or
securities that are convertible or exchangeable into, or give holders thereof
the right to receive, shares of Common Stock.
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(k) Investment Company. The Company is not, and is not an
Affiliate (as defined in Rule 405 under the Securities Act) of, an "investment
company" within the meaning of the Investment Company Act of 1940, as amended.
(l) Certain Fees. Subject to Section 4.1, except for certain fees
payable by the Company to Intercoastal Financial Services Corp., no fees or
commissions will be payable by the Company to any broker, financial advisor or
consultant, finder, placement agent, investment banker, bank or other Person
with respect to the transactions contemplated by this Agreement. The Purchasers
shall have no obligation with respect to any fees or with respect to any claims
made by or on behalf of other Persons for fees of a type contemplated in this
Section that may be due in connection with the transactions contemplated by this
Agreement. The Company shall indemnify and hold harmless the Purchasers, their
employees, officers, directors, agents, and partners, and their respective
Affiliates, from and against all claims, losses, damages, costs (including the
costs of preparation and reasonable attorney's fees) and expenses suffered in
respect of any such claimed or existing fees, as such fees and expenses are
incurred.
(m) Form S-3 Eligibility. The Company is eligible to register its
Common Stock for resale under Form S-3 promulgated under the Securities Act.
(n) Listing and Maintenance Requirements. Except as set forth in
the SEC Documents, the Company has not, in the two years preceding the date
hereof received notice (written or oral) from the NASDAQ, any stock exchange,
market or trading facility on which the Common Stock is or has been listed (or
on which it has been quoted) to the effect that the Company is not in compliance
with the listing or maintenance requirements of such exchange, market or trading
facility. The Company is, and has no reason to believe, based on current
circumstances, that it will not in the foreseeable future continue to be, in
compliance with all such listing and maintenance requirements.
(o) Patents and Trademarks. Except as set forth in the SEC
Documents, the Company and the Subsidiary have, or have rights to use, all
patents, patent applications, trademarks, trademark applications, service marks,
trade names, copyrights, licenses and rights which are necessary or material for
use in connection with their respective businesses as described in the SEC
Documents and which the failure to so have would have a Material Adverse Effect
(collectively, the "Intellectual Property Rights"). Neither the Company nor the
Subsidiary has received a written notice that the Intellectual Property Rights
used by the Company or the Subsidiary violates or infringes upon the rights of
any Person. To the best knowledge of the Company, (i) all such Intellectual
Property Rights are enforceable and (ii) there is no existing infringement by
another Person of any of the Intellectual Property Rights.
(p) Registration Rights; Rights of Participation. Except as set
forth on Schedule 6(b) to the Registration Rights Agreement, and as disclosed in
Schedule 2.1(p), the Company has not granted or agreed to grant to any Person
any rights (including "piggy-back" registration rights) to have any securities
of the Company registered with the Commission or any other governmental
authority which has not been satisfied. Except as set forth on Schedule 6(b) to
the Registration Rights Agreement, and as disclosed in Schedule 2.1(p), no
Person has any
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right of first refusal, preemptive right, right of participation or any similar
right to participate in the transactions contemplated by the Transaction
Documents.
(q) Regulatory Permits. The Company and the Subsidiary possess all
certificates, authorizations and permits issued by the appropriate federal,
state or foreign regulatory authorities necessary to conduct their respective
businesses as described in the SEC Documents, except where the failure to
possess such permits would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect ("Material Permits"), and neither the
Company nor the Subsidiary has received any written notice of proceedings
relating to the revocation or modification of any Material Permit.
(r) Title. Neither the Company nor the Subsidiary own any real
property. Except as disclosed in Schedule 2.1(r), the Company and the Subsidiary
have good and marketable title in all personal property owned by them which is
material to the business of the Company and the Subsidiary, in each case free
and clear of all Liens, except (i) for Liens, if any, reflected in the financial
statements included in or incorporated by reference into the SEC documents, and
(ii) for Liens as do not materially affect the value of such property
and do not interfere with the use made and proposed to be made of such property
by the Company and the Subsidiary. Any real property and facilities held under
lease by the Company and the Subsidiary are held by them under valid, subsisting
and enforceable leases of which the Company and the Subsidiary are in compliance
in all material respects and do not interfere with the use made and proposed to
be made of such property and buildings by the Company and the Subsidiary.
(s) Labor Relations. No material labor problem exists or, to the
knowledge of the Company, is imminent with respect to any of the employees of
the Company.
(t) Solvency. Based on the financial condition of the Company as of
the Closing Date, (i) the Company's fair saleable value of its assets exceeds
the amount that will be required to be paid on or in respect of the Company's
existing debts and other liabilities (including known contingent liabilities) as
they mature; (ii) the Company's assets do not constitute unreasonably small
capital to carry on its business for the current fiscal year as now conducted
and as proposed to be conducted including its capital needs taking into account
the particular capital requirements of the business conducted by the Company,
and projected capital requirements and capital availability thereof; and (iii)
the current cash flow of the Company, together with the proceeds the Company
would receive, were it to liquidate all of its assets, after taking into account
all anticipated uses of the cash, would be sufficient to pay all amounts on or
in respect of its debt when such amounts are required to be paid. The Company
does not intend to incur debts beyond its ability to pay such debts as they
mature (taking into account the timing and amounts of cash to be payable on or
in respect of its debt).
(u) Application of Takeover Protections. The Company and its
Board of Directors have taken all necessary action, if any, in order to render
inapplicable any control share acquisition, business combination, poison pill
(including any distribution under a rights agreement) or other similar
anti-takeover provision under the Company's Certificate of Incorporation (or
similar charter documents) or the laws of its state of incorporation that is or
could become applicable to the Purchasers as a result of the Purchasers and the
Company
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fulfilling their obligations or exercising their rights under this
Agreement, including without limitation the Company's issuance of the Securities
and the Purchasers' ownership of the Securities.
(v) Disclosure. The Company confirms that neither it nor any
other Person acting on its behalf has provided any of the Purchasers or its
agents or counsel with any information that constitutes or might constitute
material non-public information. The Company understands and confirms that the
Purchasers shall be relying on the foregoing representations in effecting
transactions in securities of the Company. All disclosure provided to the
Purchasers regarding the Company, its business and the transactions contemplated
hereby, including the Schedules to this Agreement, furnished by or on behalf of
the Company are true and correct and do not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading.
2.2 Representations and Warranties of the Purchasers. Each Purchaser
hereby for itself and for no other Purchaser, represents and warrants to the
Company as follows:
(a) Organization; Authority. Such Purchaser, if an entity, is an
entity duly organized, validly existing and in good standing under the laws of
the jurisdiction of its organization with the requisite corporate or partnership
power and authority to enter into and to consummate the transactions
contemplated by the Transaction Documents and otherwise to carry out its
obligations thereunder. The purchase by such Purchaser of the Securities to be
acquired by it hereunder has been duly authorized by all necessary action on the
part of such Purchaser. Each of this Agreement and the Registration Rights
Agreement has been duly executed by such Purchaser, and when delivered by such
Purchaser in accordance with the terms hereof, will constitute the valid and
legally binding obligation of such Purchaser, enforceable against it in
accordance with its terms.
(b) Investment Intent. Such Purchaser is acquiring the Securities
as principal for its own account for investment purposes only and not with a
view to or for distributing or reselling such Securities or any part thereof,
without prejudice, however, to such Purchaser's right, subject to the provisions
of this Agreement, the Registration Rights Agreement and the Warrants, at all
times to sell or otherwise dispose of all or any part of such Securities in
compliance with applicable securities laws. Nothing contained herein shall be
deemed a representation or warranty by such Purchaser to hold Securities for any
period of time. Such Purchaser is acquiring the Securities hereunder in the
ordinary course of its business. Such Purchaser does not have any agreement or
understanding, directly or indirectly, with any Person to distribute the
Securities.
(c) Purchaser Status. At the time such Purchaser was offered the
Securities, it was, and at the date hereof it is, and at each exercise date
under its respective Warrants, it will be, an "accredited investor" as defined
in Rule 501(a) under the Securities Act.
(d) Experience of such Purchaser. Such Purchaser, either alone or
together with its representatives, has such knowledge, sophistication and
experience in business and
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financial matters so as to be capable of evaluating the merits and risks of the
prospective investment in the Securities, and has so evaluated the merits and
risks of such investment.
(e) Ability of such Purchaser to Bear Risk of Investment. Such
Purchaser is able to bear the economic risk of an investment in the Securities
and, at the present time, is able to afford a complete loss of such investment.
(f) Access to Information. Such Purchaser acknowledges that it
has reviewed the Disclosure Materials and has been afforded (i) the opportunity
to ask such questions as it has deemed necessary of, and to receive answers
from, representatives of the Company concerning the terms and conditions of the
offering of the Securities and the merits and risks of investing in the
Securities; (ii) access to information about the Company and the Company's
financial condition, results of operations, business, properties, management and
prospects sufficient to enable it to evaluate its investment; and (iii) the
opportunity to obtain such additional information which the Company possesses or
can acquire without unreasonable effort or expense that is necessary to make an
informed investment decision with respect to the investment and to verify the
accuracy and completeness of the information contained in the Disclosure
Materials. Neither such inquiries nor any other investigation conducted by or on
behalf of such Purchaser or its representatives or counsel shall modify, amend
or affect such Purchaser's right to rely on the truth, accuracy and completeness
of the Disclosure Materials and the Company's representations and warranties
contained in the Transaction Documents.
(g) General Solicitation. Such Purchaser is not purchasing the
Securities as a result of or subsequent to any advertisement, article, notice or
other communication regarding such Securities published in any newspaper,
magazine or similar media or broadcast over television or radio or presented at
any seminar or any other general solicitation or general advertisement.
(h) Reliance. Such Purchaser understands and acknowledges that
(i) the Securities are "restricted securities" under the federal securities laws
as they are being offered and sold to it without registration under the
Securities Act in a private placement that is exempt from the registration
provisions of the Securities Act and (ii) the availability of such exemption,
depends in part on, and the Company will rely upon the accuracy and truthfulness
of, the foregoing representations and such Purchaser hereby consents to such
reliance.
Such Purchaser understands that such securities may be resold
without registration under the Securities Act only in certain limited
circumstances. In this connection, the Purchaser represents that it is familiar
with SEC Rule 144, as presently in effect, and understands the resale
limitations imposed thereby and by the Securities Act.
The Company acknowledges and agrees that no Purchaser makes or
has made any representations or warranties with respect to the transactions
contemplated hereby other than those specifically set forth in this Section 2.2.
10.
12
ARTICLE III
OTHER AGREEMENTS OF THE PARTIES
3.1 Transfer Restrictions. (a) The Securities may only be disposed of
pursuant to an effective registration statement under the Securities Act, to the
Company or pursuant to an available exemption from or in a transaction not
subject to the registration requirements of the Securities Act, and in
compliance with any applicable federal and state securities laws. In connection
with any transfer of Securities other than pursuant to an effective registration
statement or to the Company, except as otherwise set forth herein, the Company
may require the transferor thereof to provide to the Company an opinion of
counsel selected by the transferor, the form and substance of which opinion
shall be reasonably satisfactory to the Company, to the effect that such
transfer does not require registration of such transferred Securities under the
Securities Act. Notwithstanding the foregoing, the Company, without requiring a
legal opinion as described in the immediately preceding sentence, hereby
consents to and agrees to register on the books of the Company and with any
transfer agent for the securities of the Company any transfer of Securities by a
Purchaser to an Affiliate of such Purchaser or to one or more funds or managed
accounts under common management with such Purchaser, and any transfer among any
such Affiliates or one or more funds or managed accounts, provided that the
transferee certifies to the Company that it is an "accredited investor" as
defined in Rule 501(a) under the Securities Act and that it is acquiring the
Securities solely for investment purposes (subject to the qualifications
hereof). Any such transferee shall agree in writing to be bound by the terms of
this Agreement and shall have the rights of a Purchaser under this Agreement and
the Registration Rights Agreement and, if such transfer is of all or a portion
of the Warrants held by such Purchaser, as a holder of the Warrants.
(b) The Shares, the Warrants and any Underlying Shares issued
while there is not an effective Registration Statement shall be issued with the
following legend:
[NEITHER] THESE SECURITIES [NOR THE SECURITIES INTO WHICH THESE
SECURITIES ARE EXERCISABLE] HAVE [NOT] BEEN REGISTERED WITH THE
SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY
STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF
COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL
BE REASONABLY ACCEPTABLE TO THE COMPANY.
(c) However, Underlying Shares issued when there is an effective
Registration Statement or when such legend is not required under the Securities
Act (including judicial interpretations and pronouncements issued by the Staff
of the Commission) shall not
11.
13
contain the legend set forth above nor any other legend. The Company shall cause
its counsel to issue the legal opinion included in the Transfer Agent
Instructions to the Company's transfer agent on the date that the Registration
Statement is declared effective by the Commission (such date, the "Effective
Date"). The Company agrees that following the Effective Date, it will, no later
than three Trading Days following the delivery by a Purchaser to the Company of
a certificate or certificates representing Shares or Underlying Shares issued
with a restrictive legend and registered on the Effective Date, cause to be
delivered to such Purchaser certificates representing such Shares or Underlying
Shares which shall be free from all restrictive and other legends. The Company
may not make any notation on its records or give instructions to any transfer
agent of the Company which enlarge the restrictions of transfer set forth in
this Section.
3.2 Acknowledgment of Dilution. The Company acknowledges that the
issuance of Underlying Shares upon exercise of the Warrants will result in
dilution of the outstanding shares of Common Stock. The Company further
acknowledges that its obligation to issue Underlying Shares upon exercise of the
Warrants pursuant to the terms thereof is unconditional and absolute, subject to
the limitations set forth in the Warrants, regardless of the effect of any such
dilution.
3.3 Furnishing of Information. As long as the Purchasers own Securities,
the Company covenants to timely file (or obtain extensions in respect thereof
and file within the applicable grace period) all reports required to be filed by
the Company after the date hereof pursuant to Section 13(a) or 15(d) of the
Exchange Act. As long as the Purchasers own Securities, if the Company is not
required to file reports pursuant to such sections, it will prepare and furnish
to the Purchasers and make publicly available in accordance with Rule 144(c)
promulgated under the Securities Act such information as is required for the
Purchasers to sell the Securities under Rule 144 promulgated under the
Securities Act. The Company further covenants that it will take such further
action as any holder of Securities may reasonably request, all to the extent
required from time to time to enable such Person to sell Underlying Shares
without registration under the Securities Act within the limitation of the
exemptions provided by Rule 144 promulgated under the Securities Act, including
causing its attorneys to render and deliver any legal opinion required under
such rule or by the transfer agent of the Common Stock or clearing broker for
the Purchaser in order to permit a Purchaser to sell shares under Rule 144. Upon
the request of any such Person, the Company shall deliver to such Person a
written certification of a duly authorized officer as to whether it has complied
with such requirements.
3.4 Integration. The Company shall not, and shall use its best efforts
to ensure that, no Affiliate of the Company shall, sell, offer for sale or
solicit offers to buy or otherwise negotiate in respect of any security (as
defined in Section 2 of the Securities Act) that would be integrated with the
offer or sale of the Securities in a manner that would require the registration
under the Securities Act of the sale of the Securities to the Purchasers, or
that would be integrated with the offer or sale of the Securities for the
purposes of the rules and regulations of NASDAQ.
3.5 Increase in Authorized Shares. If on any date the Company would
be, if a notice of exercise were to be delivered on such date, precluded from
issuing the number of Underlying Shares issuable upon exercise in full of the
Warrants due to the unavailability of a sufficient number of authorized but
unissued or reserved shares of Common Stock, then the Board of
12.
14
Directors of the Company shall promptly prepare and mail to the stockholders of
the Company proxy materials requesting authorization to amend the Company's
certificate of incorporation to increase the number of shares of Common Stock
which the Company is authorized to issue so as to provide enough shares for
issuance under the Warrants. In connection therewith, the Board of Directors
shall (a) adopt proper resolutions authorizing such increase, (b) recommend to
and otherwise use its best efforts to promptly and duly obtain stockholder
approval to carry out such resolutions (and hold a special meeting of the
stockholders no later than the earlier to occur of the 60th day after delivery
of the proxy materials relating to such meeting and the 90th day after request
by a holder of Warrants to issue the number of Underlying Shares in accordance
with the terms hereof) and (c) within five Business Days of obtaining such
stockholder authorization, file an appropriate amendment to the Company's
certificate or articles of incorporation to evidence such increase.
3.6 Reservation and Listing of Underlying Shares. The Company shall take
such steps as may be required to cause the listing of the Shares and Underlying
Shares on the NASDAQ and such other exchange, market or quotation facility on
which the Common Stock is traded. The Company shall maintain a reserve of shares
of Common Stock for issuance upon exercise in full of the Warrants in accordance
with this Agreement and the Warrants, respectively, in such amount as may be
required to fulfill its obligations in full under the Warrants.
3.7 Use of Proceeds. The Company shall use the net proceeds from the
sale of the Securities hereunder for working capital purposes and not for the
satisfaction of any portion of the Company's debt (other than payment of trade
payables in the ordinary course of the Company's business and prior practices).
Until the first anniversary of the date hereof, the Company shall not use such
net proceeds to redeem any Company equity or equity-equivalent securities or to
settle any outstanding litigation.
3.8 Exercise Obligations. The Company shall honor exercises of the
Warrants and shall deliver Underlying Shares in accordance with the terms,
conditions and time periods set forth in the Warrants.
3.9 Subsequent Financings; Limitation on Registration. (a) Subject to
Section 3.9(c), from the date of this Agreement through the Effective Date,
other than to the Purchasers or an Affiliate thereof, the Company shall not
directly or indirectly, offer, sell, grant any option to purchase, or otherwise
dispose of (or announce any offer, sale, grant of any option to purchase or
other disposition) any Common Stock or any equity or equity equivalent
securities (including any equity, debt or other instrument that is at any time
over the life thereof convertible into or exchangeable for Common Stock), and
the Company will cause the Subsidiary not to offer, sell or issue during such
period any of such Subsidiary's securities which provide the holder thereof the
right to receive any Common Stock (collectively, "Common Stock Equivalents")
(such dispositions, collectively, a "Subsequent Placement"), unless: (A) the
Company delivers to the Purchasers a written notice (the "Subsequent Placement
Notice") of its intention to effect such Subsequent Placement, which Subsequent
Placement Notice shall describe in reasonable detail the proposed terms of such
Subsequent Placement, the amount of proceeds intended to be raised thereunder,
the Person with whom such Subsequent Placement shall be effected, and attached
to
13.
15
which shall be a term sheet or similar document relating thereto and (B) such
Purchaser shall not have notified the Company by 6:30 p.m. (New York City time)
on the tenth Trading Day after its receipt of the Subsequent Placement Notice of
its willingness to provide (or to cause its sole designee to provide), subject
to completion of mutually acceptable documentation, financing to the Company on
the same terms set forth in the Subsequent Placement Notice. If the Purchasers
shall fail to notify the Company of its intention to enter into such
negotiations within such time period, the Company may effect the Subsequent
Placement substantially upon the terms and to the Persons (or Affiliates of such
Persons) set forth in the Subsequent Placement Notice; provided, that the
Company shall provide the Purchasers with a second Subsequent Placement Notice,
and the Purchasers shall again have the right of first refusal set forth above
in this paragraph (b), if the Subsequent Placement subject to the initial
Subsequent Placement Notice shall not have been consummated for any reason on
the terms set forth in such Subsequent Placement Notice within 30 Trading Days
after the date of the initial Subsequent Placement Notice with the Person (or an
Affiliate of such Person) identified in the Subsequent Placement Notice. The
Subsequent Placement shall be allocated among the Purchasers on a pro rata basis
by reference to the purchase price indicated below the Purchasers name on the
signature pages to this Agreement, or in such other manner as the Purchasers
shall determine.
(b) Except to register: (x) the Registrable Securities (as
defined in the Registration Rights Agreement), (y) securities of the Company
permitted pursuant to Section 6(c) of the Registration Rights Agreement to be
registered in the Registration Statement, and (z) Common Stock permitted to be
issued pursuant to Section 3.9(c), the Company may not file a registration
statement to register any of its securities from the date of this Agreement
through the Effective Date.
(c) The restrictions contained in Section 3.9(a) and 3.9(b) shall
not apply to: (i) the granting of options or warrants to employees, officers and
directors of the Company, and the issuance of Common Stock upon exercise of such
options or warrants granted under any stock option plan heretofore or
hereinafter duly adopted by the Company and purchases of Common Stock pursuant
to the Company's employee stock purchase plan; (ii) the issuance of shares of
Common Stock issuable upon exercise of any currently outstanding warrants and
other outstanding convertible securities of the Company, in each case as and to
the extent disclosed in Schedule 2.1(c) or the SEC Documents (but not as to any
amendments or modifications of the terms of such securities after the date of
this Agreement, including "back-dated" agreements); (iii) the issuance of shares
of Common Stock pursuant to a public offering underwritten on a firm commitment
basis registered under the Securities Act; or (iv) the issuance of securities in
connection with a transaction or relationship including, but not limited to an
acquisition, joint venture or collaboration or licensing arrangement, in which
the Company issues securities to an entity which is, itself or through its
subsidiaries, an operating company in a business related or synergistic to the
business of the Company and in which the Company reasonably believes it will
receive material benefits in addition to the investment of funds, but shall not
include a transaction in which the Company is issuing securities primarily for
the purpose of raising capital. Clauses (i)-(iv) of this Section 3.9(c) are
collectively referred to herein as "Exempt Events".
14.
16
(d) Except for Exempt Events, from the date of this Agreement
through the Effective Date, the Company shall not, without the prior written
consent of the Purchasers holding at least a majority of the Registrable
Securities, (a) issue or agree to issue shares of Common Stock at a price below
the Purchase Price Per Share or (b) issue any Common Stock Equivalents or enter
an agreement to issue Common Stock Equivalents, that entitle any Person to
acquire shares of Common Stock at a price per share less than the Purchase Price
Per Share (if the holder of the Common Stock or Common Stock Equivalent so
issued shall at any time, whether by operation of purchase price adjustments,
reset provisions, floating conversion, exercise or exchange prices or otherwise,
or due to warrants, options or rights issued in connection with such issuance,
be entitled to receive shares of Common Stock at a price less than the Purchase
Price Per Share, such issuance shall be deemed to have occurred for less than
the Purchase Price Per Share).
3.10 Certain Securities Laws Disclosures; Publicity. The Company shall:
(i) on the Closing Date issue a press release acceptable to the Purchasers
disclosing the transactions contemplated hereby, (ii) file with the Commission a
Report on Form 8-K disclosing the transactions contemplated hereby in the time
and manner required under the Exchange Act, and (iii) timely file with the
Commission a Form D promulgated under the Securities Act. The Company shall, no
less than two Business Days prior to the filing of any disclosure required by
clauses (ii) and (iii) above, provide a copy thereof to the Purchasers for their
review. The Company and the Purchasers shall consult with each other in issuing
any other press releases or otherwise making public statements or filings and
other communications with the Commission or any regulatory agency or stock
market or trading facility with respect to the transactions contemplated hereby
and neither party shall issue any such press release or otherwise make any such
public statement, filings or other communications without the prior written
consent of the other, except if such disclosure is required by law or stock
market regulation, in which such case the disclosing party shall promptly
provide the other party with prior notice of such public statement, filing or
other communication.
3.11 Reimbursement. If any Purchaser becomes involved in any capacity in
any action, proceeding or investigation brought before the one year anniversary
of the date of this Agreement by or against any Person who is a stockholder of
the Company, solely as a result of such Purchaser's acquisition of the
Securities under this Agreement, the Company will reimburse such Purchaser for
its reasonable legal and other expenses (including the cost of any investigation
preparation and travel in connection therewith) incurred in connection
therewith, as such expenses are incurred. The reimbursement obligations of the
Company under this paragraph shall be in addition to any liability which the
Company may otherwise have, shall extend upon the same terms and conditions to
any Affiliates of the Purchasers who are actually named in such action,
proceeding or investigation, and partners, directors, agents, employees and
controlling persons (if any), as the case may be, of the Purchasers and any such
Affiliate, and shall be binding upon and inure to the benefit of any successors,
assigns, heirs and personal representatives of the Company, the Purchasers and
any such Affiliate and any such Person. The Company also agrees that neither the
Purchasers nor any such Affiliates, partners, directors, agents, employees or
controlling persons shall have any liability to the Company or any Person
asserting claims on behalf of or in right of the Company solely as a result of
acquiring the Securities under this Agreement.
15.
17
3.12 Shareholder Rights Plan. No claim will be made or enforced by the
Company or any other Person that any Purchaser is an "Acquiring Person" under
any shareholders rights plan or similar plan or arrangement in effect or
hereafter adopted by the Company, or that any Purchaser could be deemed to
trigger the provisions of any such plan or arrangement, by virtue of receiving
Securities or shares of Common Stock under the Transaction Documents, assuming
for this purpose that such Purchaser does not otherwise acquire control of any
other shares of Common Stock that would trigger the provisions of any such plan
or arrangement.
3.13 Disclosure of Material Non-Public Information. The Company shall
not and shall cause each of its Affiliates and other Persons acting on behalf of
the Company not to divulge to any Purchaser any information that it believes to
be material non-public information unless such Purchaser has agreed in writing
to receive such information. The Company agrees to comply with the newly adopted
Regulation FD promulgated under the Exchange Act.
3.14 Put event. From the date of this Agreement until the Effective
Date, upon the occurrence of any of the following events (each, an "Event"), a
Purchaser may provide the Company with a notice (an "Event Notice ") requiring
the Company to reacquire all or a portion of the Shares which such Purchaser
acquired hereunder and then still holds at a put price (the "Put Price") per
share equal to the Purchase Price Per Share paid by the Purchaser for such
shares:
(a) immediately prior to an assignment by the Company
for the benefit of creditors or commencement of a voluntary case under Title 11
of the United States Code, or an entering into of an order for relief in an
involuntary case under Title 11 of the United States Code, or adoption by the
Company of a plan of liquidation or dissolution;
(b) the Common Stock fails to be listed or quoted for
trading on the NASDAQ for a period of three Trading Days (which need not be
consecutive Trading Days); and
(c) the Registration Statement is not declared
effective on or prior to the 180th day following the Closing Date.
The Company shall pay the Put Price by the fifth Trading Day
following the date of the delivery of the Event Notice. Interest shall accrue on
the aggregate Put Price from the date such amount is due until paid in full at
the rate of 15% per annum (or such lesser maximum amount that is permitted to be
paid by applicable law), to accrue daily from the date such payment is due
hereunder through and including the date of payment. Any Event Notice may be
rescinded by the delivering Purchaser at any time prior to its receipt of the
full Put Price.
16.
18
ARTICLE IV
MISCELLANEOUS
4.1 Fees and Expenses. Except as otherwise set forth in the Registration
Rights Agreement, each party shall pay the fees and expenses of its advisers,
counsel, accountants and other experts, if any, and all other expenses incurred
by such party incident to the negotiation, preparation, execution, delivery and
performance of this Agreement. The Company shall pay all stamp and other taxes
and duties levied in connection with the issuance of the Securities.
4.2 Entire Agreement; Amendments. The Transaction Documents, together
with the Exhibits and Schedules thereto and Transfer Agent Instructions, contain
the entire understanding of the parties with respect to the subject matter
hereof and supersede all prior agreements and understandings, oral or written,
with respect to such matters, which the parties acknowledge have been merged
into such documents, exhibits and schedules.
4.3 Notices. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earliest of (i) the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile
telephone number specified in this Section prior to 6:30 p.m. (New York City
time) on a Business Day, (ii) the Business Day after the date of transmission,
if such notice or communication is delivered via facsimile at the facsimile
telephone number specified in this Agreement later than 6:30 p.m. (New York City
time) on any date and earlier than 11:59 p.m. (New York City time) on such date,
(iii) the Business Day following the date of mailing, if sent by U.S. nationally
recognized overnight courier service, or (iv) upon actual receipt by the party
to whom such notice is required to be given. The address for such notices and
communications shall be as follows:
If to the Company: Lynx Therapeutics, Inc.
00000 Xxxxxxxxxx Xxxxxxxxx
Xxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attn: Chief Financial Officer
With a copy to: Xxxxxx Godward LLP
Five Palo Alto Square
0000 Xx Xxxxxx Xxxx
Xxxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxx X. Xxxxx, Esq.
If to a Purchaser: To the address set forth under such
Purchaser's name on the signature
pages hereto
or such other address as may be designated in writing hereafter, in the same
manner, by such Person.
17.
19
4.4 Amendments; Waivers. No provision of this Agreement may be waived or
amended except in a written instrument signed, in the case of an amendment, by
the Company and each of the Purchasers or, in the case of a waiver, by the party
against whom enforcement of any such waiver is sought. No waiver of any default
with respect to any provision, condition or requirement of this Agreement shall
be deemed to be a continuing waiver in the future or a waiver of any other
provision, condition or requirement hereof, nor shall any delay or omission of
either party to exercise any right hereunder in any manner impair the exercise
of any such right accruing to it thereafter.
4.5 Headings. The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof.
4.6 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their successors and permitted assigns.
The Company may not assign this Agreement or any rights or obligations hereunder
without the prior written consent of the Investor.
4.7 No Third-Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective successors and permitted
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person.
4.8 Governing Law. The corporate laws of the State of Delaware shall
govern all issues concerning the relative rights of the Company and its
stockholders. All questions concerning the construction, validity, enforcement
and interpretation of this Agreement shall be governed by and construed and
enforced in accordance with the internal laws of the State of New York, without
regard to the principles of conflicts of law thereof. Each party hereby
irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in the City of New York, borough of Manhattan, for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein (including with respect to
the enforcement of any of the Transaction Documents), and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is improper. Each party hereby irrevocably
waives personal service of process and consents to process being served in any
such suit, action or proceeding by mailing a copy thereof via registered or
certified mail or overnight delivery (with evidence of delivery) to such party
at the address in effect for notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. Each party irrevocably waives,
to the fullest extent permitted by applicable law, any and all right to trial by
jury in any legal proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby. If either party shall commence an action or
proceeding to enforce any provisions of this Agreement, then the prevailing
party in such action or proceeding shall be reimbursed by the other party for
its attorneys fees and other costs and expenses incurred with the investigation,
preparation and prosecution of such action or proceeding.
18.
20
4.9 Survival. The representations, warranties, agreements and covenants
contained herein shall survive the Closing and the delivery and exercise of the
Warrants.
4.10 Execution. This Agreement may be executed in two or more
counterparts, all of which when taken together shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each party and delivered to the other party, it being understood that both
parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile signature
page were an original thereof.
4.11 Severability. In case any one or more of the provisions of this
Agreement shall be invalid or unenforceable in any respect, the validity and
enforceability of the remaining terms and provisions of this Agreement shall not
in any way be affecting or impaired thereby and the parties will attempt to
agree upon a valid and enforceable provision which shall be a reasonable
substitute therefor, and upon so agreeing, shall incorporate such substitute
provision in this Agreement.
4.12 Remedies. In addition to being entitled to exercise all rights
provided herein or granted by law, including recovery of damages, each of the
Purchasers and the Company will be entitled to specific performance under the
Transaction Documents. The parties agree that monetary damages may not be
adequate compensation for any loss incurred by reason of any breach of
obligations described in the foregoing sentence and hereby agrees to waive in
any action for specific performance of any such obligation the defense that a
remedy at law would be adequate.
4.13 Independent Nature of Purchasers' Obligations and Rights. The
obligations of each Purchaser under any Transaction Document is several and not
joint with the obligations of any other Purchaser, and no Purchaser shall be
responsible in any way for the performance of the obligations of any other
Purchaser under any Transaction Document. Nothing contained herein or in any
Transaction Document, and no action taken by any Purchaser pursuant thereto,
shall be deemed to constitute the Purchasers as a partnership, an association, a
joint venture or any other kind of entity, or create a presumption that the
Purchasers are in any way acting in concert with respect to such obligations or
the transactions contemplated by the Transaction Document. Each Purchaser shall
be entitled to independently protect and enforce its rights, including without
limitation the rights arising out of this Agreement or out of the other
Transaction Documents, and it shall not be necessary for any other Purchaser to
be joined as an additional party in any proceeding for such purpose.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGES FOLLOWS]
19.
21
IN WITNESS WHEREOF, the parties hereto have caused this
Securities Purchase Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.
LYNX THERAPEUTICS, INC.
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Chief Financial Officer
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGE FOR PURCHASER FOLLOWS]
22
HBK MASTER FUND L.P.
By: HBK Investments L.P.
Investment Advisor
By: /s/ Xxxxx X'Xxxx
------------------------------
Name: Xxxxx X'Xxxx
Title: Authorized Signatory
Aggregate Purchase Price
for Shares to be acquired: $6,749,995.98
Address for Notice:
000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Facsimile No.: 000-000-0000
Telephone No.: 000-000-0000
Attn: Xxxx Xxxxx and General Counsel
With a copy to:
Xxxxxxxx Xxxxxxxxx Xxxxxx Xxxxxxxx & Xxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000 and (000) 000-0000
Attn: Xxxx X. Xxxxx, Esq.
23
FIRST INVESTORS HOLDING CO., INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
--------------------------------
Xxxxxxx X. Xxxxxxxxx
Attorney-in-Fact
Aggregate Purchase Price
for Shares to be acquired: $1,999,995.27
Address for Notice:
c/x Xxxxxxx Capital Corp.
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Tel.: (000) 000-0000
Fax: (000) 000-0000
Attn: Avi Vigder
With copies to:
Xxxxxxxx Xxxxxxxxx Xxxxxx Xxxxxxxx & Xxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000 and (000) 000-0000
Attn: Xxxx X. Xxxxx, Esq.
24
HALIFAX FUND, LP
By: /s/ Xxxxxxx Xxxxxxx
----------------------------
Name: Xxxxxxx Xxxxxxx
Title: Counsel, The Palladin Group, LP
Investment Advisor to Halifax Fund, LP
Aggregate Purchase Price
for Shares to be acquired: $1,999,995.27
Address for Notice:
c/o Palladin Group LP
000 Xxxxxxxxx Xxx.
Xxxxxxxxx, Xxx Xxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx Xxxxxxx, Esq.
25
XXXXX X. XXXXXX
/s/ Xxxxx X. Xxxxxx
---------------------
Aggregate Purchase Price
for Shares to be acquired: $249,997.02
Address for Notice:
c/o Alloy Ventures
000 Xxxxxx Xxxxxx
Xxxx Xxxx, XX 00000
26
XXXXX X. XXXXX
/s/ Xxxxx X. Xxxxx
------------------
Aggregate Purchase Price
for Shares to be acquired: $99,996.26
Address for Notice:
x/x Xxxxxx Xxxxxxx XXX
0 Xxxx Xxxx Square
0000 Xx Xxxxxx Xxxx
Xxxx Xxxx, XX 00000-0000
27
XXXXXXXXX X. XXXXX
/s/ Xxxxxxxxx X. Xxxxx
----------------------
Aggregate Purchase Price
for Shares to be acquired: $19,995.43
Address for Notice:
x/x Xxxxxx Xxxxxxx XXX
0 Xxxx Xxxx Square
0000 Xx Xxxxxx Xxxx
Xxxx Xxxx, XX 00000-0000
28
XXXXXXX XXXXXXX
/s/ Xxxxxxx Xxxxxxx
-------------------
Aggregate Purchase Price
for Shares to be acquired: $9,994.53
Address for Notice:
c/o Cooley Godward LLP
Xxx Xxxxxxxx Xxxxx
00xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000-0000
29
EXHIBIT D
TRANSFER AGENT INSTRUCTIONS
May __, 2001
[Transfer Agent]
Dear ___________:
Reference is made to that certain Securities Purchase Agreement (the
"PURCHASE AGREEMENT") among Lynx Therapeutics, Inc., a Delaware corporation (the
"COMPANY"), and the buyers named therein (the "HOLDERS") pursuant to which the
Company is selling to the Holders shares (the "SHARES") of its Common Stock, par
value $.01 per share (the "COMMON STOCK"), and certain Common Stock purchase
warrants (the "WARRANTS") which shall be exercisable into shares of Common
Stock. The Shares and the shares of Common Stock issuable upon exercise of the
Warrants are collectively referred to herein as "UNDERLYING SHARES."
This letter shall serve as our irrevocable authorization and direction
to you (provided that you are the transfer agent for the Company with respect to
its Common Stock at such time) to issue Underlying Shares from time to time upon
notice from the Company to issue such Underlying Shares. So long as you have
previously received (x) an opinion of the Company's outside counsel
substantially in the form of EXHIBIT I attached hereto (which the Company shall
direct be delivered to you by such outside counsel upon the effectiveness of the
registration statement covering resales of Underlying Shares) stating that a
registration statement covering resales of Underlying Shares has been declared
effective by the Securities and Exchange Commission under the Securities Act of
1933, as amended, and that Underlying Shares may be issued (or reissued if they
have been issued at a time when there was not such an effective registration
statement) or resold without any restrictive legend (the "OPINION") and (y) a
copy of such registration statement, then certificates representing Underlying
Shares shall not bear any legend restricting transfer of Underlying Shares
thereby and should not be subject to any stop-transfer restriction. Provided,
however, that if you have not previously received a copy of the Opinion and such
registration statement, then the certificates representing Underlying Shares
shall bear the following legend:
[NEITHER] THESE SECURITIES [NOR THE SECURITIES INTO WHICH THESE
SECURITIES ARE EXERCISABLE] HAVE BEEN REGISTERED WITH THE SECURITIES AND
EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN
RELIANCE UPON AN EXEMPTION FROM
30
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT
OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN
ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL
OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF
WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.
and, provided, further, that the Company may, from time to time, notify you to
place stop-transfer restrictions on the certificates for Underlying Shares in
the event, but only in the event, a registration statement covering Underlying
Shares is subject to amendment for events then current.
Please be advised that the Holders have relied upon this instruction
letter as an inducement to enter into the Purchase Agreement and, accordingly,
the Holders are a third party beneficiary to these instructions.
Please execute this letter in the space indicated to acknowledge your
agreement to act in accordance with these instructions.
Very truly yours,
LYNX THERAPEUTICS, INC.
By:
Name:
Title:
ACKNOWLEDGED AND AGREED:
[Transfer Agent]
By:
Name:
Title:
31
EXHIBIT I
[FORM OF OUTSIDE COUNSEL OPINION]
[Addressee]
[Address]
To Whom It May Concern:
The Registration Statement on Form S-3 (File No. 333-____________) of Lynx
Therapeutics, Inc. was declared effective at ___:____ __.M. Eastern Time on
_____________, 2001. Upon issuance of the Underlying Shares referred to in the
Company's instruction letter attached, you are authorized to issue certificates
for the Company's common stock without restrictive legends.
Very truly yours,
