EXHIBIT 99.1
PARENT SUPPORT AGREEMENT
This Parent Support Agreement (the "AGREEMENT") is made and entered into
as of September 28, 2004, between Solexa Limited, a company registered in
England and Wales (the "COMPANY") and the undersigned stockholder ("HOLDER") of
Lynx Therapeutics, Inc., a Delaware corporation ("PARENT").
RECITALS
Pursuant to an Acquisition Agreement dated as of September 28, 2004 (the
"ACQUISITION AGREEMENT") by and between Parent and the Company, it is proposed
that Parent shall make the Offer and the Option Offer within the meanings set
forth in the Acquisition Agreement. Concurrently with the execution and delivery
of the Acquisition Agreement and as a condition and inducement to the Company
entering into the Acquisition Agreement, the Company has required that Holder
enter into this Agreement. The Holder is the record and beneficial owner (as
such term is defined in Rule 13d-3 of the General Rules and Regulations under
the Securities Exchange Act of 1934, as amended) of (1) such number of shares of
Parent Common Stock (the "SHARES") and (2) such number of options to purchase
Parent Common Stock (the "OPTIONS"), each as is indicated beneath Holder's
signature on the last page of this Agreement. Terms used herein and not defined
herein shall have the meaning set forth in the Acquisition Agreement.
AGREEMENT
The parties agree as follows:
1. AGREEMENT TO RETAIN SHARES.
(a) TRANSFER AND ENCUMBRANCE. Except as contemplated by the
Acquisition Agreement, and except as provided in Sections 1(b) or 2 below,
during the period beginning on the date hereof and ending on the earlier to
occur of (i) one hundred eighty (180) days following the First Closing Date, and
(ii) the Expiration Date (as defined below), Holder agrees not to, directly or
indirectly (x) transfer (except as may be specifically required by court order),
sell, exchange, tender, pledge, assign, contribute to the capital of any entity,
hypothecate or otherwise dispose of (including by merger, consolidation or
otherwise by operation of law) or encumber the Shares or any New Shares (as
defined below), enter into any short sale with respect to the Shares or any New
Shares, enter into or acquire an offsetting derivative contract with respect to
such Shares or any New Shares, enter into or acquire a futures or forward
contract to deliver such Shares or any New Shares or enter into any other
hedging or other derivative transaction that has the effect of materially
changing the economic benefits and risks of ownership of the Shares or any New
Shares, or to, directly or indirectly, make any offer or agreement relating
thereto, (y) grant any proxies or powers of attorney, deposit any of such Shares
or New Shares into a voting trust or enter into a voting agreement with respect
to any of such Shares or New Shares, or enter into any agreement or arrangement
providing for any of the actions described in this clause (y), or (z) take any
action that could reasonably be expected to have the effect of preventing or
disabling Holder from performing Holder's obligations under this Agreement, and
Holder has not agreed to carry out any of the foregoing matters in relation to
the Shares or any
New Shares. As used herein, the term "EXPIRATION DATE" shall mean the date of
termination of the Acquisition Agreement in accordance with the terms and
provisions thereof.
(b) PERMITTED TRANSFERS. Section 1(a) shall not prohibit a transfer
of Shares or New Shares by Holder (i) if Holder is an individual (A) to any
member of Holder's immediate family, or to a trust for the benefit of Holder or
any member of Holder's immediate family, or (B) upon the death of Holder, or
(ii) if Holder is a partnership or limited liability company, to one or more
partners or members of Holder or to an affiliated Person under common control
with Holder; provided, however, that any such transfer pursuant to either clause
(i) or (ii) of this Section 1(b) shall be permitted only if, as a precondition
to such transfer, the transferee agrees in writing to be bound by all of the
terms of this Agreement.
(c) NEW SHARES. Holder agrees that any shares of capital stock or
other securities of Parent that Holder purchases or with respect to which Holder
otherwise acquires record or beneficial ownership after the date of this
Agreement and prior to the earlier to occur of (i) one hundred eighty (180) days
following the First Closing Date and (ii) the Expiration Date ("NEW SHARES")
shall be subject to the terms and conditions of this Agreement to the same
extent as if they constituted Shares.
2. AGREEMENT TO VOTE SHARES. Until the earlier to occur of (x) the
First Closing Date and (y) the Expiration Date, Holder shall, at any meeting
(whether annual or special and whether or not an adjourned or postponed meeting)
of stockholders of Parent, however called, or in connection with any written
consent of the holders of Parent Common Stock, vote the Shares and any New
Shares (i) in favor of (A) approving the issuance of shares of Parent Common
Stock in connection with the Offer, (B) approving the change-of-control of
Parent in connection with the transactions contemplated by the Acquisition
Agreement, (C) approving each of the other proposals to be acted on by the
stockholders at the Parent Stockholders Meeting in accordance with Section
1.1(f) of the Acquisition Agreement, and (D) approving any other matters that
could reasonably be expected to facilitate the transactions contemplated by the
Acquisition Agreement, and (ii) against any of the following actions (other than
in relation to the Offer and any other transactions contemplated by the
Acquisition Agreement): (A) any merger, consolidation, business combination,
sale of assets, reorganization or recapitalization of the Parent or any
Subsidiary of Parent with any party, (B) any sale, lease or transfer of any
significant part of the assets of Parent or any Subsidiary of Parent, (C) any
reorganization, recapitalization, dissolution, liquidation or winding up of
Parent or any Subsidiary of Parent, (D) any material change in the
capitalization of Parent or any Subsidiary of Parent or the corporate structure
of Parent or any Subsidiary of Parent, or (E) any other action or agreement that
could reasonably be expected to result in a breach of any covenant,
representation or warranty or any other obligation or agreement of Parent under
the Acquisition Agreement or Holder under this Agreement or which could
reasonably be expected to result in any of the conditions to the obligations of
Parent under the Acquisition Agreement not being fulfilled. This Agreement is
intended to bind Holder as a stockholder of Parent only with respect to the
specific matters set forth herein. Except as set forth in clauses (i) and (ii)
of this Section 2, Holder shall not be restricted from voting in favor of,
against or abstaining with respect to any other matter presented to the
stockholders of Parent.
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3. IRREVOCABLE PROXY. Concurrently with the execution of this Agreement,
Holder agrees to deliver to the Company a proxy in the form attached hereto as
Exhibit A (the "PROXY"), which shall be irrevocable to the extent provided in
the Delaware General Corporation Law.
4. STOCKHOLDER AGREEMENT. Holder represents and warrants to the Company
that:
(a) LEGEND. Holder understands and agrees that stop transfer instructions
will be given to Parent's transfer agent with respect to the Shares and/or New
Shares and there will be placed on any certificates for Parent Common Stock
surrendered to the transfer agent pursuant to Section 4(b) below, as applicable,
or any substitutions therefore, a legend stating in substance: "THE SHARES
REPRESENTED BY THIS CERTIFICATE MAY NOT BE TRANSFERRED UNTIL THE DATE THAT IS
180 DAYS FOLLOWING THE FIRST CLOSING DATE (AS DEFINED IN THE ACQUISITION
AGREEMENT DATED SEPTEMBER 28, 2004 BETWEEN LYNX THERAPEUTICS, INC. AND SOLEXA
LIMITED) IN ACCORDANCE WITH THE TERMS OF A PARENT SUPPORT AGREEMENT DATED
SEPTEMBER 28, 2004 BETWEEN THE REGISTERED HOLDER HEREOF AND SOLEXA LIMITED, A
COPY OF WHICH AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICES OF LYNX
THERAPEUTICS, INC."
(b) SURRENDER OF PARENT COMMON STOCK CERTIFICATES. Within five (5)
Business Days following the First Closing Date, Holder shall surrender all
certificates held in the name of Holder representing Shares and/or New Shares to
Parent's transfer agent in exchange for shares of Parent Common Stock bearing
the restrictive legend set forth in Section 4(a) above.
(c) REMOVAL OF LEGEND. It is understood and agreed that certificates with
the legend set forth in Section 4(a) above will, to the extent required to
enable the shares represented by such certificate to be transferred by the
holder thereof, be substituted by delivery of certificates without such legend
upon the written request of the Holder if 180 days shall have elapsed from the
First Closing Date. Upon receipt of any such written request, Parent shall use
its reasonable efforts to instruct its transfer agent to deliver shares of
Parent Common Stock without the legend set forth in Section 4(a) above as soon
as practicable following receipt of such written request.
5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF HOLDER. Holder hereby
represents, warrants and covenants to the Company that Holder (i) is the record
and beneficial owner of the Shares and Options, which at the date of this
Agreement and at all times up until the earlier to occur of (A) one hundred
eighty (180) days following the First Closing Date, and (B) the Expiration Date,
are, and will be, free and clear of any liens, claims, options, charges or other
encumbrances, and (ii) does not own of record or beneficially any shares,
options or other securities in, or convertible into, shares of Parent Common
Stock, other than the Shares and the Options, if any, indicated below Holder's
signature on the last page of this Agreement. Holder has the legal capacity,
power and authority to enter into and perform all of Holder's obligations under
this Agreement (including under the Proxy). This Agreement (including the Proxy)
has been duly and validly executed and delivered by Holder and constitutes a
valid and binding agreement of Holder, enforceable against Holder in accordance
with its terms, subject to (a) laws
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of general application relating to bankruptcy, insolvency and the relief of
debtors and (b) rules of law governing specific performance, injunctive relief
and other equitable remedies.
6. FURTHER ASSURANCES. Holder shall perform such further acts and execute
such further documents and instruments as may reasonably be required to vest in
the Company the power to carry out and give effect to the provisions of this
Agreement..
7. CONSENT AND WAIVER. Holder hereby gives any consents or waivers that
are reasonably required for the consummation of the Offer under the terms of any
agreement to which Holder is a party or pursuant to any rights Holder may have.
8. FIDUCIARY DUTIES. Notwithstanding anything in this Agreement to the
contrary: (i) Holder makes no agreement or understanding herein in any capacity
other than in Holder's capacity as a record holder and beneficial owner of the
Shares and, to the extent applicable, any New Shares, (ii) nothing in this
Agreement shall be construed to limit or affect any action or inaction by
Holder, or any officer, partner, member or employee, as applicable, of Holder,
serving on Parent's Board of Directors acting in such person's capacity as a
director or fiduciary of Parent, and (iii) Holder shall have no liability to the
Company or any its affiliates under this Agreement as a result of any action or
inaction by Holder, or any officer, partner, member or employee, as applicable,
of Holder, serving on Parent's Board of Directors acting in such person's
capacity as a director or fiduciary of Parent.
9. MISCELLANEOUS.
(a) AMENDMENTS AND WAIVERS. Any term of this Agreement may be
amended or waived with the written consent of the parties or their respective
successors and assigns. Any amendment or waiver effected in accordance with this
Section 9(a) shall be binding upon the parties and their respective successors
and assigns.
(b) GOVERNING LAW. This Agreement and all acts and transactions
pursuant hereto and the rights and obligations of the parties hereto shall be
governed, construed and interpreted in accordance with the laws of the State of
Delaware, without giving effect to principles of conflicts of law.
(c) COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument.
(d) TITLES AND SUBTITLES. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
(e) NOTICES. Any notice or other communication required or permitted
to be delivered to any party under this Agreement shall be in writing and shall
be deemed properly delivered, given and received (i) when delivered by hand;
(ii) on the day sent by facsimile, provided that the sender has received
confirmation of transmission as of or prior to 5:00 p.m.
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local time of the recipient, on such day; (iii) the first Business Day after
sent by facsimile (to the extent that (A) the sender has received confirmation
of transmission after 5:00 p.m. local time of the recipient on the day sent by
facsimile, or (B) notice is sent on a day that is not a Business Day); or (iv)
the third Business Day after sent by registered mail or by courier or express
delivery service, in each case to the address or facsimile number set forth on
the signature page to this Agreement beneath the name of such party, or to such
other address or facsimile number as such party shall have specified in a
written notice given to the other party hereto).
(f) SEVERABILITY. If one or more provisions of this Agreement are
held to be invalid or unenforceable under the applicable law of any
jurisdiction, the parties agree to renegotiate such provision in good faith, in
order to maintain the economic position enjoyed by each party as close as
possible to that under the provision rendered unenforceable. In the event that
the parties cannot reach a mutually agreeable and enforceable replacement for
such provision, then (i) such provision shall be excluded from this Agreement,
(ii) the balance of the Agreement shall be interpreted as if such provision were
so excluded and (iii) the balance of the Agreement shall be valid and
enforceable in accordance with its terms. Each provision of this Agreement is
separable from any other provision of this Agreement, and each part of each
provision of this Agreement is severable from every other part of such
provision.
(g) SPECIFIC PERFORMANCE. Each of the parties hereto recognizes and
acknowledges that a breach of any covenants or agreements contained in this
Agreement will cause the Company to sustain damages for which it would not have
an adequate remedy at law for money damages, and therefore each of the parties
hereto agrees that in the event of any such breach the Company shall be entitled
to the remedy of specific performance of such covenants and agreements and
injunctive and other equitable relief in addition to any other remedy to which
they may be entitled, at law or in equity.
(h) DISCLOSURE. Holder hereby agrees to permit Parent and he Company
to publish and disclose in the Registration Statement (including all documents
and schedules filed with the SEC) and the Proxy Statement, and in any press
release or other disclosure document in which parent or the Company reasonably
determines in its good faith judgment that such disclosure is required by law,
including the rules and regulations of the SEC or the Financial Services and
Markets Xxx 0000 and the Companies Xxx 0000 (as amended), as appropriate, in
connection with the Offer and any transactions related thereto, such Holder's
identity and ownership of the Shares and New Shares and the nature of the
commitments, arrangements and undertakings under this Agreement.
[SIGNATURE PAGE FOLLOWS]
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The parties have caused this Agreement to be duly executed on the date
first above written.
COMPANY
By: _________________________________
Name:________________________________
Title:_______________________________
Address: Solexa Limited
c/o Abingworth Management Ltd.
0000 Xxxx Xxxx Xxxx
Xxxx. 0, Xxxxx 000
Xxxxx Xxxx, XX 00000
Attention: Xxxx Xxxx
Facsimile No.: 650.926.9782
SIGNATURE PAGE TO PARENT SUPPORT AGREEMENT
HOLDER
By:__________________________________
[Name]
Holder's Address for Notice:
_____________________________________
_____________________________________
_____________________________________
Attention:
Facsimile No.:
Shares owned of record: Beneficially owned shares:
Class of Shares Number Class of Shares Number
--------------- ------ --------------- ------
Common Stock Common Stock
Options to Purchase Options to Purchase
Common Stock Common Stock
SIGNATURE PAGE TO PARENT SUPPORT AGREEMENT
CONSENT OF SPOUSE
The undersigned is the spouse of [_____________], the Holder (as such term
is defined in the Parent Support Agreement) in the foregoing Parent Support
Agreement dated as of September 28, 2004 (the "PARENT SUPPORT AGREEMENT")
between Solexa Limited and Holder. Capitalized terms used herein and not defined
herein have the meaning set forth in the Parent Support Agreement.
I hereby acknowledge that I have carefully reviewed the Parent Support
Agreement and such other documents as I have deemed appropriate. I have
discussed the contents of the Parent Support Agreement, to the extent I felt
necessary, with my legal counsel. I understand fully the transactions described
in the Parent Support Agreement, and I hereby approve of and consent to all such
transactions. I am aware that by the provisions of the Parent Support Agreement,
my spouse agrees, among other things, to vote all of the outstanding shares of
Parent Common Stock that he or she now owns or hereafter acquires, including my
community property interest therein, if any, in accordance with the Parent
Support Agreement, and that my spouse agrees, among other things, to certain
matters related to the control and disposition of Parent Common Stock. I hereby
agree, on behalf of myself and all persons who may claim on my behalf, that
prior to the fulfillment of all of my spouse's obligations under the Parent
Support Agreement, upon any legal separation from or dissolution of my marriage
to my present spouse, or upon the death of my spouse, neither I nor anyone
claiming on my behalf will seek to partition my or my spouse's community
property interest in the Parent Common Stock and that in any such event I shall
be entitled only to the value of my interest in such Parent Common Stock, if
any, and that I shall have no claim or right to the Parent Common Stock itself.
EXECUTED this ____ day of September, 2004
_________________________________________
EXHIBIT A
IRREVOCABLE PROXY
TO VOTE STOCK OF
LYNX THERAPEUTICS, INC.
The undersigned stockholder of Lynx Therapeutics, Inc., a Delaware
corporation ("PARENT"), hereby irrevocably (to the full extent permitted by the
Delaware General Corporation Law) appoints the Chief Executive Officer and each
of the other members of the Board of Directors of Solexa Limited, a company
registered in England and Wales (the "COMPANY"), and each of them, as the sole
and exclusive attorneys and proxies of the undersigned, with full power of
substitution and resubstitution, to vote and exercise all voting and related
rights (to the full extent that the undersigned is entitled to do so) with
respect to all of the shares of capital stock of Parent that now are or
hereafter may be owned of record or beneficially by the undersigned, and any and
all other shares or securities of Parent issued or issuable in respect thereof
on or after the date hereof (collectively, the "SHARES") in accordance with the
terms of this Proxy and that certain Parent Support Agreement of even date
herewith, by and between the Company and the undersigned (the "PARENT SUPPORT
AGREEMENT"). The shares of Parent Common Stock and options to purchase shares of
Parent Common Stock owned by the undersigned stockholder of Parent as of the
date of this Proxy are listed beneath the undersigned's signature on the final
page of this Proxy. Upon the undersigned's execution of this Proxy, any and all
prior proxies given by the undersigned with respect to any Shares are hereby
revoked and the undersigned agrees not to grant any subsequent proxies with
respect to the Shares until after the earlier to occur of (i) the Expiration
Date (as defined below) and (ii) the First Closing Date. Terms used herein and
not defined herein shall have the meaning set forth in the Parent Support
Agreement.
This Proxy is coupled with an interest, is irrevocable (to the fullest
extent permitted by the Delaware General Corporation Law), is granted pursuant
to the Parent Support Agreement and is granted in consideration of Parent
entering into that certain Acquisition Agreement, of even date herewith, by and
between the Company and Parent (the "ACQUISITION AGREEMENT"). Pursuant to the
Acquisition Agreement it is proposed that Parent shall (a) commence an offer
(the "SHARE OFFER") to acquire all of the issued shares in the share capital of
the Company and (b) simultaneously therewith, commence an offer (the "OPTION
OFFER" and, together with the Share Offer the "OFFER") to have each Company
Option under the Company Share Option Schemes, whether vested or unvested, at
the election of the holder of each Company Option, either (i) be exercised in
accordance with the rules of the relevant Company Share Option Scheme and such
Ordinary Shares received upon the exercise be exchanged for shares of Parent
Common Stock on the same terms as those offered under the Share Offer or (ii)
become an option to acquire, on the same terms and conditions as were applicable
under the relevant Company Share Option Scheme immediately prior to the First
Closing Date, including the same vesting schedule, a number of shares of Parent
Common Stock equal to the
number of Ordinary shares issuable upon the exercise of each such Company Option
prior to the First Closing Date multiplied by the Ordinary Share Exchange Ratio.
As used herein, the term "EXPIRATION DATE" shall mean the date of termination of
the Acquisition Agreement in accordance with the terms and provisions thereof.
The attorneys and proxies named above, and each of them, are hereby
further authorized and empowered by the undersigned, at any time prior to the
earlier to occur of (i) the First Closing Date and (ii) the Expiration Date, to
act as the undersigned's attorney and proxy to vote the Shares, and to exercise
all voting and other rights of the undersigned with respect to the Shares
(including, without limitation, the power to execute and deliver written
consents pursuant to the Delaware General Corporation Law), at every annual,
special or adjourned meeting of the stockholders of Parent and in every written
consent in lieu of such meeting (i) in favor of (A) approving the issuance of
shares of Parent Common Stock in connection with the Offer, (B) approving the
change-of-control of Parent in connection with the transactions contemplated by
the Acquisition Agreement, (C) approving each of the other proposals to be acted
on by the stockholders at the Parent Stockholders Meeting in accordance with
Section 1.1(f) of the Acquisition Agreement, and (D) approving any other matters
that could reasonably be expected to facilitate the transactions contemplated by
the Acquisition Agreement, and (ii) against any of the following actions (other
than the Offer and any other transactions contemplated by the Acquisition
Agreement): (A) any merger, consolidation, business combination, sale of assets,
reorganization or recapitalization of the Parent or any Subsidiary of Parent
with any party, (B) any sale, lease or transfer of any significant part of the
assets of Parent or any Subsidiary of Parent, (C) any reorganization,
recapitalization, dissolution, liquidation or winding up of Parent or any
Subsidiary of Parent, (D) any material change in the capitalization of Parent or
any Subsidiary of Parent, of the corporate structure of Parent or any subsidiary
of Parent, or (E) any other action or agreement that could reasonably be
expected to result in a breach of any covenant, representation or warranty or
any other obligation or agreement of Parent under the Acquisition Agreement or
Holder under this Agreement or which could reasonably be expected to result in
any of the conditions to the obligations of Parent under the Acquisition
Agreement not being fulfilled.
This Proxy and all acts and transactions pursuant hereto and the rights
and obligations of the parties hereto shall be governed, construed and
interpreted in accordance with the laws of the State of Delaware, without giving
effect to principles of conflicts of law.
Any obligation of the undersigned hereunder shall be binding upon the
successors and assigns of the undersigned.
This Proxy is irrevocable (to the fullest extent provided in the Delaware
General Corporation Law).
[SIGNATURE PAGE FOLLOWS]
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Dated: September __, 2004
___________________________
[Name]
Shares owned of record: Beneficially owned shares:
Class of Shares Number Class of Shares Number
--------------- ------ --------------- ------
Common Stock Common Stock
Options to Purchase Options to Purchase
Common Stock Common Stock
SIGNATURE PAGE TO IRREVOCABLE PROXY
