AMENDMENT TO
SECURITIES PURCHASE
AGREEMENT
This Amendment to Securities Purchase Agreement
(this “ Amendment ”) is entered into as of
October 7, 2009 by and between Invus, L.P., a Bermuda limited
partnership (the “ Investor ”), and Lexicon
Pharmaceuticals, Inc., a Delaware corporation (the “
Company ”). Capitalized terms used but not
otherwise defined herein shall have the meanings ascribed to them
in the Securities Purchase Agreement (as defined below).
W I T N E S S E T H :
WHEREAS, the Investor and the Company entered
into that certain Securities Purchase Agreement, dated as of June
17, 2007 (the “ Securities Purchase Agreement
”), and that certain Stockholders’ Agreement, made as
of June 17, 2007 (the “ Stockholders’ Agreement
”);
WHEREAS, the Company desires to issue and sell
shares of Company Common Stock in an underwritten offering
registered under the Securities Act (the “ Offering
”), which Offering requires the consent of the Investor under
the Securities Purchase Agreement; and
WHEREAS, in connection with the Offering, the
Investor and the Company desire to amend the Securities Purchase
Agreement as set forth below to (a) modify the definition of Second
Rights Offering Trigger Date, (b) extend the period during which
the Investor may deliver the First Rights Offering Notice and
Second Rights Offering Notice from ninety (90) days to one (1) year
after the First Rights Offering Trigger Date and Second Rights
Offering Trigger Date, respectively, (c) eliminate the
Investor’s obligation to purchase unsubscribed Rights Shares
at the expiration of a Rights Offering, and (d) make certain other
amendments to the terms thereof.
NOW, THEREFORE, intending to be legally bound
hereby, the parties hereto hereby agree as follows:
Section
1.
Amendment to Section 1.01 of the Securities Purchase
Agreement
The definition
of “Oversubscription Pro Rata Number” in Section 1.01
of the Securities Purchase Agreement is hereby amended and restated
in its entirety to read as follows:
“
Oversubscription Pro Rata Number ” shall mean, for
each holder of a Right exercising Rights Offering Oversubscription
rights, a fraction the numerator of which is the total number of
shares of Company Common Stock owned by such holder and the
denominator of which is the total number of outstanding shares of
Company Common Stock held by all holders of Rights who have validly
exercised Rights Offering Oversubscription rights in the relevant
Rights Offering (it being understood that no shares shall be deemed
owned by more than one holder for purposes hereof); provided
that, to the extent any holders validly exercising Rights Offering
Oversubscription rights exercise such rights with respect to less
than their entire respective Oversubscription Pro Rata Numbers of
Oversubscription Shares (with the unsubscribed-for Oversubscription
Shares being referred to as “ Excess Oversubscription
Shares ”), the Oversubscription Pro Rata Numbers of all
other holders validly exercising Rights Offering Oversubscription
rights in full shall be increased proportionately up to the maximum
number of Oversubscription Shares such holders elect to purchase
(it being the intent of this provision that the Oversubscription
Pro Rata Numbers be established such that any such Excess
Oversubscription Shares be allocated among holders exercising
Rights Offering Oversubscription rights in full on a pro rata basis
based on the number of Oversubscription Shares allocated to such
holders, up to the total number of Excess Oversubscription Shares
such holders elect to purchase); provided further , with the
written consent of both the Investor and the Company, the
determination of the Oversubscription Pro Rata Number may be based
on another customary proration method.
Section 1.01 of
the Securities Purchase Agreement is hereby amended by adding the
following definition of “Oversubscription Shares”
immediately after the definition of “Oversubscription Pro
Rata Number” therein as follows:
“
Oversubscription Shares ” shall mean First Rights
Offering Oversubscription Shares in the First Rights Offering or
Second Rights Offering Oversubscription Shares in the Second Rights
Offering, as applicable.
The definition
of “Second Rights Offering Trigger Date” in Section
1.01 of the Securities Purchase Agreement is hereby amended and
restated in its entirety to read as follows:
“
Second Rights Offering Trigger Date ” means the date
that is (i) ninety (90) days after the delivery of the First Rights
Offering Notice or (ii) if such notice is not delivered, the date
of the expiration of the period (as it may be extended by any
Rights Offering Notice Blackout Period) in which the Investor may
give notice to require the Company to conduct the First Rights
Offering pursuant to Section 3.01(a).
Section
2.
Amendments to Section 3.01 of the Securities Purchase
Agreement
The first sentence of Section 3.01(a) of the
Securities Purchase Agreement is hereby amended and restated in its
entirety to read as follows:
Subject to
Section 3.03(e), for a period of one (1) year following the First
Rights Offering Trigger Date, the Investor shall have the right,
but not the obligation, exercisable by a written notice (the
“ First Rights Offering Notice ”) to the Company
in accordance with Section 10.02, to require the Company to make a
pro rata offering (the “ First Rights Offering
”) to all holders of Company Common Stock (including the
Investor and its affiliates) of non-transferable subscription
rights (the “ First Rights ”) entitling the
holders thereof to purchase shares of Company Common Stock, on the
terms set forth herein, (i) in an aggregate amount equal to the
First Rights Offering Amount, and (ii) at a price per share (the
“ First Rights Offering Price ”) to be
designated by the Investor at any time on or after delivery of the
First Rights Offering Notice and before the establishment of the
record date for the distribution of the First Rights to the
Company’s stockholders (provided that the establishment of
such record date shall not be prior to the time the First Rights
Offering Registration Statement shall have been declared effective
by the SEC) by written notice (the “ First
Rights Offering Pricing Notice ”) to the Company in
accordance with Section 10.02; provided that the First
Rights Offering Price shall be any price (A) at or above the lower
of $4.50 (as adjusted for any stock splits, reverse splits, stock
dividends, combinations or similar transactions occurring after the
date hereof and prior to the First Rights Offering) and the average
of the volume weighted average trading prices of the Company Common
Stock on the Nasdaq Stock Market for the ten (10) full trading days
immediately prior to the date of the First Rights Offering Pricing
Notice (the “ First Rights Offering Market Price
”) and (B) at or below the higher of $4.50 (as adjusted for
any stock splits, reverse splits, stock dividends, combinations or
similar transactions occurring after the date hereof and prior to
the First Rights Offering) and the First Rights Offering Market
Price.
Section 3.01(b)
of the Securities Purchase Agreement is hereby amended and restated
in its entirety to read as follows:
(b) In
connection with the First Rights Offering, upon the terms and
subject to the conditions of this Agreement, the Investor shall be
required to subscribe for and purchase a number of First Rights
Shares that is not less than its Pro Rata Number of First Rights
Shares.
Section
3.
Amendments to Section 3.02 of the Securities Purchase
Agreement
The first sentence of Section 3.02(a) of the
Securities Purchase Agreement is hereby amended and restated in its
entirety to read as follows:
Subject to
Section 3.03(e), for a period of one (1) year following the Second
Rights Offering Trigger Date, the Investor shall have the right,
but not the obligation, exercisable by written notice (the “
Second Rights Offering Notice ” and, together with the
First Rights Offering notice, the “ Rights Offering
Notices ”) to the Company in accordance with Section
10.02, to require the Company to make a pro rata offering (the
“ Second Rights Offering ” and, together with
the First Rights Offering, the “ Rights Offerings
”) to all holders of Company Common Stock (including the
Investor and its affiliates) of non-transferable subscription
rights (the “ Second Rights ” and, together with
the First Rights, the “ Rights ”) entitling the
holders thereof to purchase shares of Company Common Stock, on the
terms set forth herein, (i) in an aggregate amount equal to the
Second Rights Offering Amount, and (ii) at a price per share (the
“ Second Rights Offering Price ”) to be
designated by the Investor at any time on or after delivery of the
Second Rights Offering Notice and before the establishment of the
record date for the distribution of the Second Rights to the
Company’s stockholders (provided that the establishment of
such record date shall not be prior to the time the Second Rights
Offering Registration Statement shall have been declared effective
by the SEC) by written notice (the “ Second
Rights Offering Pricing Notice ”) to the Company in
accordance with Section 10.02; provided that the Second
Rights Offering Price shall be any price (A) at or above the lower
of $4.50 (as adjusted for any stock splits, reverse splits, stock
dividends, combinations or similar transactions occurring after the
date hereof and prior to the Second Rights Offering) and the
average of the volume weighted average trading prices of the
Company Common Stock on the Nasdaq Stock Market for the ten (10)
full trading days immediately prior to the date of the Second
Rights Offering Pricing Notice (the “ Second Rights
Offering Market Price ”) and (B) at or below the higher
of $4.50 (as adjusted for any stock splits, reverse splits, stock
dividends, combinations or similar transactions occurring after the
date hereof and prior to the Second Rights Offering) and the Second
Rights Offering Market Price.
Section 3.02(b)
of the Securities Purchase Agreement is hereby amended and restated
in its entirety to read as follows:
(b) In
connection with the Second Rights Offering, upon the terms and
subject to the conditions of this Agreement, the Investor shall be
required to subscribe for and purchase a number of Second Rights
Shares that is not less than its Pro Rata Number of Second Rights
Shares.
Section
4.
Amendment to Section 3.03 of the Securities Purchase
Agreement
Section 3.03 of
the Securities Purchase Agreement is hereby amended by adding new
Section 3.03(e) at the end thereof as follows:
