Exhibit 10.63
WAIVER AND ACKNOWLEDGMENT
THIS WAIVER AND ACKNOWLEDGMENT, dated as of November 18, 2004, is by and
between Genaissance Pharmaceuticals, Inc., a Delaware corporation (the
"Company"), and RAM Trading, Ltd., a Cayman Islands exempted company (the
"Investor"). Capitalized terms used herein without definition have the
respective meanings given them in the Series A Preferred Stock Purchase
Agreement, dated as of October 29, 2003, by and between the Company and the
Investor (the "Purchase Agreement").
BACKGROUND
A. Pursuant to the Purchase Agreement, the Investor acquired from the
Company 270,000 shares of Series A Preferred Stock and a warrant
to purchase an additional 190,000 shares of Series A Preferred
Stock.
B. The Purchase Agreement provides the Investor, as a holder of
Series A Preferred Shares, with certain notice and contractual
pre-emptive rights in the event the Company proposes to issue any
Offered Securities.
C. The Certificate of Designations of the Series A Preferred Stock of
the Company filed with the Secretary of State of the State of
Delaware on October 29, 2003 (the "Certificate of Designations")
provides the Investor, as a holder of Series A Preferred Shares,
with certain (i) mandatory redemption rights in the event the
Company issues any shares of Common Stock (or any securities
convertible into or exchangeable for Common Stock) for a per share
purchase price of less than $2.25 (as adjusted for any stock
split, stock dividend, recapitalization or otherwise), other than
certain specified issuances and (ii) voting rights with respect to
the incurrence by the Company of Indebtedness (as defined in the
Certificate of Designations).
D. The Company is contemplating an equity financing to be consummated
on or prior to November 19, 2004, pursuant to which the Company
would issue and sell between $4.0 million and $6.0 million worth
of shares of Common Stock (the "Shares") at a per share purchase
price not less than $1.67 (the "Financing").
E. The stock purchase agreement and any other transaction documents
that will relate to the Financing are collectively referred to
herein as the "Transaction Documents." In addition to providing
for the issuance and sale by the Company of the Shares, the
Transaction Documents will provide for the issuance by the Company
to purchasers in the Financing of Warrants to purchase up to a
number of shares of Common Stock equal to the number of Shares to
be sold in the Financing (collectively, "Warrants") at a per share
exercise price equal to the price paid per share of such Shares.
F. The Company and the Investor desire to set forth their
understanding and agreement with respect to certain provisions of
the Purchase Agreement and the Certificate of Designations, in
order to enable the Company to proceed with the Financing.
With respect to the issuance by the Company of the (i) Shares, (ii)
Warrants and (iii) shares of Common Stock issuable upon exercise of the Warrants
pursuant to the Transaction Documents (each, an "Issuance"), the parties hereto
acknowledge and agree as follows:
1. PURCHASE AGREEMENT. In accordance with Section 9.2 of the Purchase
Agreement, any notice or contractual pre-emptive rights of the Investor pursuant
to Section 5.5 of the Purchase Agreement shall be waived and shall not apply to
an Issuance.
2. CERTIFICATE OF DESIGNATIONS. The Investor, as the holder of at least
66? percent of the shares of Series A Preferred Stock outstanding, hereby
elects, agrees and acknowledges that:
(a) the mandatory redemption required by Section 6(c)(ii) of the
Certificate of Designations shall not apply to any Issuance;
(b) any violation by the Company of Section 3(b)(vi) of the
Certificate of Designations from and after October 29, 2003 through September
30, 2004 is hereby waived;
(c) from and after September 30, 2004, the amount of the
Indebtedness which the Company may incur under Section 3(b)(vi)(A) of the
Certificate of Designations without the prior consent of the Investor shall be
increased from $7.0 million to $9.0 million; and
(d) as soon as practicable after the date hereof, the Company shall
file a certificate of amendment to the Certificate of Designations to the effect
set forth in provision (c) above, provided that any such certificate of
amendment shall be subject to the approval of the Investor.
3. COUNTERPARTS; FACSIMILE SIGNATURES. This Waiver and Acknowledgment may
be executed in two or more counterparts (including by facsimile signature), each
of which shall be deemed an original but all of which, when taken together,
shall be considered one and the same agreement.
4. SUCCESSORS AND ASSIGNS. The terms and conditions of this Waiver and
Acknowledgment shall inure to the benefit of and be binding upon the respective
successors and assigns of the Company and the Investor (including transferees of
any Series A Preferred Shares of the Investor or any securities into which such
Series A Preferred Shares are convertible).
5. GOVERNING LAW. This Waiver and Acknowledgment shall be governed by,
and construed in accordance with, the laws of the State of Delaware.
6. EFFECT OF WAIVER. Except as expressly set forth herein, the execution,
delivery and performance of this Waiver and Acknowledgment shall not operate as
a waiver or amendment of any right, power or remedy of the Investor under the
Purchase Agreement or Certificate of Designations. Nothing herein shall be
deemed to entitle the Company to a waiver or consent in the future with respect
to any condition, obligation, covenant or agreement contained in the Purchase
Agreement, Registration Rights Agreement or Certificate of Designations.
7. EXPIRATION OF WAIVER. This Waiver and Acknowledgment shall be deemed to
only apply to a Financing that is consummated (i.e., money is transferred from
purchasers of Common Stock to the Company) on or prior to 11:59 p.m. (New York
City time) on November 19, 2004 (the "Expiration Time"). Accordingly, if such
Financing is consummated after the Expiration Time, then this Waiver and
Acknowledgment shall be deemed null and void in all respects.
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IN WITNESS WHEREOF, the parties hereto have caused this Waiver and
Acknowledgment to be duly executed by their respective authorized signatories as
of the date first above written.
GENAISSANCE PHARMACEUTICALS, INC.
By: /s/ Xxx X. Xxxxxx
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Xxx X. Xxxxxx
Chief Financial Officer
RAM TRADING, LTD.
By: /s/ Xxx Xxxx
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Name:
Title:
