Lexicon Pharmaceuticals, Inc 8-K, filed Feb 2, 2026
Lexicon Pharmaceuticals, Inc. (LXRX)
About this 8-K
Lexicon Pharmaceuticals, Inc filed this 8-K on February 2, 2026, reporting on events of January 29, 2026.
Items reported
- Item 1.01: Entered into a material agreement
- Item 3.02: Unregistered sale of equity
- Item 3.03: Change to shareholders' rights
- Item 5.03: Charter or bylaw amendment, or fiscal year change
- Item 7.01: Regulation FD disclosure
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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| Item 1.01 | Entry into a Material Definitive Agreement |
Underwriting Agreement
On January 29, 2026, Lexicon Pharmaceuticals, Inc. (the “Company”) entered into an Underwriting Agreement (the “Underwriting Agreement”) with Jefferies LLC (“Jefferies”) and Piper Sandler & Co. (“Piper Sandler”), as representatives of the several underwriters named therein (the “Underwriters”), relating to a public offering (the “Public Offering”) of 32,000,000 shares (the “Shares”) of the Company’s common stock, par value $0.001 per share (“Common Stock”).
The price offered to the public for the Shares was $1.30 per Share (the “Public Offering Price”). Pursuant to the terms of the Underwriting Agreement, the Company also granted the Underwriters an option, exercisable for 30 days, to purchase up to an additional 4,800,000 shares of Common Stock (the “Option Shares”) on the same terms as their purchase of the Shares. The gross proceeds to the Company from the Public Offering are expected to be approximately $41.6 million (or $47.84 million if the Underwriters exercise their option to purchase the Option Shares in the full amount), without accounting for underwriting discounts and commissions and estimated offering expenses payable by the Company.
The Underwriting Agreement contains customary representations, warranties and agreements by the Company, obligations of the parties and termination provisions. Additionally, the Company has agreed to indemnify the Underwriters against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). The Company has also agreed with the Underwriters not to offer or sell any shares of its Common Stock (or securities convertible into or exchangeable for Common Stock), subject to certain exceptions, for a period of 60 days after the date of the Underwriting Agreement without the prior written consent of Jefferies and Piper Sandler.
The Public Offering was made pursuant to the Company’s shelf registration statement on Form S-3 (File No. 333-281208) (the “Registration Statement”), declared effective by the Securities and Exchange Commission on August 15, 2024, and a related prospectus included in the Registration Statement, as supplemented by a preliminary prospectus supplement dated January 29, 2026 and a final prospectus supplement dated January 29, 2026.
The foregoing summary of the terms of the Underwriting Agreement does not purport to be complete and is qualified in its entirety by reference to the Underwriting Agreement, which is attached to this Current Report on Form 8-K (this “Current Report”) as Exhibit 1.1, and which is incorporated herein by reference. Vinson & Elkins L.L.P., counsel to the Company, delivered an opinion as to the legality of the issuance and sale of the Shares in the Public Offering, a copy of which is attached hereto as Exhibit 5.1 and is incorporated herein by reference.
Common Stock Purchase Agreement
On January 29, 2026, the Company entered into a Purchase Agreement (the “Common Stock Purchase Agreement”) with Artal Participations S.à r.l., Invus Public Equities Advisors, LLC, Invus Global Management, LLC, Invus US Partners LLC, Invus Advisors, L.L.C., Invus Public Equities, L.P., Invus, L.P. (“Invus”), Siren, LLC, Ulys, L.L.C. and Mr. Raymond Debbane (collectively, the “Invus Entities”).
On February 2, 2026, pursuant to the Common Stock Purchase Agreement and concurrently with the closing of the Public Offering, affiliates of Invus (the “Private Placement Purchasers”) purchased 22,400,000 shares of Common Stock at a price per share equal to Public Offering Price (the “Concurrent Private Placement” and, together with the Public Offering, the “Offering”) in partial satisfaction of the Invus Entities’ preemptive right under the Company’s Sixth Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”). The total purchase price of the Common Stock purchased by the Private Placement Purchasers was $29.12 million.
The Common Stock Purchase Agreement incorporates the representations and warranties and covenants made by the Company in the Underwriting Agreement for the benefit of the Private Placement Purchasers and certain of their affiliates. The Common Stock Purchase Agreement also contains customary obligations of the parties, indemnification provisions and serves to waive certain preemptive rights held by the Invus Entities with respect to the Public Offering.
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The securities to be issued and sold to the Private Placement Purchasers under the Common Stock Purchase Agreement will not be registered under the Securities Act, in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act, or under any state securities laws. The Company relied on this exemption from registration based in part on representations made by the Private Placement Purchasers under the Common Stock Purchase Agreement. The securities may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. Neither this Current Report, nor the exhibits attached hereto, is an offer to sell or the solicitation of an offer to buy the securities described herein.
The Common Stock Purchase Agreement is filed as Exhibit 10.1 to this Current Report and is incorporated herein by reference. The description of the Common Stock Purchase Agreement in this Current Report is a summary and is qualified in its entirety by the terms of the Common Stock Purchase Agreement.
Preferred Stock Purchase Agreement
Additionally, on January 29, 2026, the Company entered into a Preferred Stock Purchase Agreement with an affiliate of Invus (the “Preferred Private Placement Purchaser” and, such agreement, the “Preferred Purchase Agreement”), pursuant to which the Company agreed to (i) sell 184,365.8 shares of its Series B Convertible Preferred Stock, par value $0.01 per share (the “Preferred Stock”), at a price of $65 per share in a private placement in partial satisfaction of the Invus Entities’ preemptive right under the Certificate of Incorporation, (ii) grant the Preferred Private Placement Purchaser the option to purchase up to an additional 94,854.88 shares of Preferred Stock at a price of $65 per share, in partial satisfaction of the Invus Entities’ preemptive right under the Certificate of Incorporation, should the Underwriters exercise their option to purchase the Option Shares (the “Preferred Option Shares”) and (iii) sell an additional 182,779.32 shares of Preferred Stock at a price of $65 per share (clauses (i)-(iii), together, the “Preferred Private Placement”). Each share of Preferred Stock is convertible into 50 shares of Common Stock, subject to certain conditions to conversion as further described under Item 5.03. The Preferred Private Placement is expected to result in gross proceeds to the Company of approximately $23.86 million (or $30.03 million if the Preferred Private Placement Purchaser exercises its conditional option to purchase the Preferred Option Shares in the full amount), before deducting offering expenses. The Preferred Purchase Agreement contains customary representations, warranties and agreements by the Company and customary conditions to closing, obligations of the parties and termination provisions.
The securities to be issued and sold to the Preferred Private Placement Purchaser under the Preferred Purchase Agreement and the issuance of any Common Stock upon conversion of the Preferred Stock will not be registered under the Securities Act, in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act, or under any state securities laws. The Company relied on this exemption from registration based in part on representations made by the Preferred Private Placement Purchaser under the Preferred Purchase Agreement. The securities may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. Neither this Current Report, nor the exhibits attached hereto, is an offer to sell or the solicitation of an offer to buy the securities described herein.
The foregoing summary of the terms of the Preferred Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the Preferred Purchase Agreement, which is attached to this Current Report as Exhibit 10.2, and which is incorporated herein by reference.
Relationships
After the Public Offering, the Concurrent Private Placement and the Preferred Private Placement and following the conversion of the Preferred Stock pursuant to the terms of the Certificate of Designations (as defined below), the Invus Entities will hold approximately 51% of the outstanding Common Stock.
| Item 3.02 | Unregistered Sales of Equity Securities. |
The information regarding the Concurrent Private Placement and the Preferred Private Placement contained in Item 1.01 of this Current Report is hereby incorporated in this Item 3.02 by reference. A total of 23,100,000 shares of Common Stock are issuable upon conversion of the maximum issuable number of shares Preferred Stock pursuant to the Preferred Private Placement. The Concurrent Private Placement, the Preferred Private Placement and the issuance of any Common Stock upon conversion of the Preferred Stock will be taken in reliance upon the exemption from the registration requirements of the Securities Act provided by Section 4(a)(2) thereof.
| Item 3.03 | Material Modification to Rights of Security Holders |
To the extent required, the information regarding the Certificate of Designations (as defined below) set forth in Item 5.03 of this Current Report on Form 8-K is incorporated herein by reference.
| Item 5.03 | Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year. |
Certificate of Designations
On February 2, 2026, in connection with the Preferred Private Placement, the Company filed with the Secretary of State of the State of Delaware to be effective upon filing the Certificate of Designations of Series B Convertible Preferred Stock of the Company (the “Certificate of Designations”), in the form approved and adopted by the board of directors of the Company, which sets forth the terms of the Preferred Stock. According to the terms and subject to the conditions set forth in the Certificate of Designations, each share of Preferred Stock will automatically convert into 50 shares (subject to adjustments) of Common Stock, immediately following the satisfaction of all of the following conditions: (i) the approval of the Seventh Amended and Restated Certificate of Incorporation of the Company (the “New Charter”), which would increase the total authorized shares of Common Stock under the New Charter from 450,000,000 to a number (A) at least equivalent to the number required to permit the immediate conversion of all of the Preferred Stock purchased pursuant to the terms of the Certificate of Designations, without violating the organizational documents of the Company and (B) approved by the Private Placement Purchaser (which approval shall not be unreasonably withheld, conditioned or delayed), by the stockholders of the Company at the upcoming 2026 annual meeting of the Company’s stockholders, (ii) the adoption of the New Charter by the Company’s board of directors and (iii) the filing and acceptance of the New Charter with and by the Secretary of State of the State of Delaware; provided, however, no such automatic conversion shall be permitted until all consents, approvals or clearances with respect to, or termination or expiration of any applicable waiting period (and any extensions thereof) imposed under, The Hart Scott Rodino Antitrust Improvements Act of 1976, as amended, required for the conversion by the holders of Preferred Stock, if any, shall have been obtained, received, deemed to have been received or terminated or expired as the case may be. The holders of the Preferred Stock are not entitled to vote on matters presented to the holders of Common Stock for approval.
The foregoing summary of the Certificate of Designations does not purport to be complete and is qualified in its entirely by reference to the Certificate of Designations, which is attached to this Current Report as Exhibit 3.1, and which is incorporated herein by reference.
| Item 7.01 | Regulation FD Disclosure. |
On January 30, 2026, the Company issued a press release announcing the pricing of the Public Offering, the Concurrent Private Placement and the Preferred Private Placement (the “Pricing Press Release”). A copy of the Pricing Press Release is furnished as Exhibit 99.1 to this Current Report.
In accordance with General Instruction B.2 of Form 8-K, the information furnished pursuant to this Item 7.01 and Exhibit 99.1 shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing. The information furnished pursuant to Item 7.01 shall not be deemed an admission as to the materiality of any information in this Current Report that is required to be disclosed solely to satisfy the requirements of Regulation FD.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits.
| + | Certain schedules and similar attachments have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The registrant undertakes to furnish supplemental copies of any of the omitted schedules upon request by the SEC |
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Lexicon Pharmaceuticals, Inc. | ||||||
| Date: February 2, 2026 | By: | /s/ Brian T. Crum | ||||
| Brian T. Crum | ||||||
| Senior Vice President and General Counsel | ||||||
Exhibit 1.1
LEXICON PHARMACEUTICALS, INC.
32,000,000 Shares
Common Stock
($0.001 par value)
Underwriting Agreement
January 29, 2026
Jefferies LLC
Piper Sandler & Co.
As Representatives of the several Underwriters
| c/o | Jefferies LLC |
520 Madison Avenue
New York, New York 10022
| c/o | Piper Sandler & Co. |
350 North 5th Street, Suite 1000
Minneapolis, Minnesota 55401
Ladies and Gentlemen:
Lexicon Pharmaceuticals, Inc., a corporation organized under the laws of Delaware (the “Company”), proposes to sell to the several underwriters named in Schedule II hereto (the “Underwriters”), for whom you (the “Representatives”) are acting as representatives, the number of shares of common stock, $0.001 par value (“Common Stock”) of the Company set forth in Schedule I hereto (the “Shares”) (said Shares to be issued and sold by the Company being hereinafter called the “Underwritten Securities”). The Company also proposes to grant to the Underwriters an option to purchase up to the number of additional shares of Common Stock set forth in Schedule I hereto (the “Option Securities;” the Option Securities, together with the Underwritten Securities, being hereinafter called the “Securities”). To the extent there are no additional Underwriters listed on Schedule II other than you, the term Representatives as used herein shall mean you, as Underwriters, and the terms Representatives and Underwriters shall mean either the singular or plural as the context requires.
As used in this underwriting agreement (this “Agreement”), the “Registration Statement” means the registration statement referred to in paragraph 1(a) hereof, including the exhibits, schedules and financial statements and any prospectus supplement relating to the Securities that is filed with the Securities and Exchange Commission (the “SEC”) pursuant to Rule 424(b) under the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder (the “Securities Act”) and deemed part of such registration statement pursuant to Rule 430B under the Securities Act, as amended on each Effective Date, and, in the event any post-effective amendment thereto or any registration statement and any amendments thereto filed pursuant to Rule 462(b) under the Securities Act (a “Rule 462(b) Registration Statement”) becomes effective prior to the Closing Date (as defined in Section 3 hereof), shall also mean
such registration statement as so amended or such Rule 462(b) Registration Statement, as the case may be; the “Effective Date” means each date and time that the Registration Statement, any post-effective amendment or amendments thereto or any Rule 462(b) Registration Statement became or becomes effective; the “Base Prospectus” means the base prospectus referred to in paragraph 1(a) hereof contained in the Registration Statement at the date and time that this Agreement is executed and delivered by the parties hereto (the “Execution Time”); the “Preliminary Prospectus Supplement” means any preliminary prospectus supplement to the Base Prospectus referred to in paragraph 1(a) hereof which is used prior to the filing of the Final Prospectus Supplement, together with the Base Prospectus; and the “Final Prospectus Supplement” means the prospectus supplement relating to the Securities that is first filed pursuant to Rule 424(b) under the Securities Act (“Rule 424(b)”) after the Execution Time, together with the Base Prospectus.
Any reference herein to the Registration Statement, the Base Prospectus, any Preliminary Prospectus Supplement or the Final Prospectus Supplement shall be deemed to refer to and include the documents incorporated by reference therein pursuant to Item 12 of Form S-3 which were filed under the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (the “Exchange Act”) on or before the most recent Effective Date of the Registration Statement or the issue date of the Base Prospectus, any Preliminary Prospectus Supplement or the Final Prospectus Supplement, as the case may be; and any reference herein to the terms “amend,” “amendment” or “supplement” with respect to the Registration Statement, the Base Prospectus, any Preliminary Prospectus Supplement or the Final Prospectus Supplement shall be deemed to refer to and include the filing of any document under the Exchange Act after the Effective Date of the Registration Statement or the issue date of the Base Prospectus, any Preliminary Prospectus Supplement or the Final Prospectus Supplement, as the case may be, deemed to be incorporated therein by reference.
As used in this Agreement, the “Pricing Disclosure Package” shall mean (i) the Base Prospectus, (ii) the Preliminary Prospectus Supplement used most recently prior to the Execution Time, (iii) any issuer free writing prospectus, as defined in Rule 433 under the Securities Act (an “Issuer Free Writing Prospectus”), identified in Schedule III hereto, and (iv) any other free writing prospectus, as defined in Rule 405 under the Securities Act (a “Free Writing Prospectus”), that the parties hereto shall hereafter expressly agree in writing to treat as part of the Pricing Disclosure Package.
1. Representations and Warranties. The Company represents and warrants to, and agrees with, each Underwriter as set forth below in this Section 1.
(a) The Company meets the requirements for use of Form S-3 under the Securities Act and has prepared and filed with the SEC a shelf registration statement, as defined in Rule 405 (file number 333-281208) on Form S-3, including a related Base Prospectus, for registration under the Securities Act of the offering and sale of the Shares. The Company may have filed one or more amendments thereto, including any Preliminary Prospectus Supplement, each of which has previously been furnished to you and has become effective upon filing. The Company will next file with the SEC a Final Prospectus Supplement relating to the Shares in accordance with Rule 424(b). As filed, such Final Prospectus Supplement shall be, except to the extent the Representatives shall
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agree in writing to a modification, in all substantive respects in the form furnished to you prior to the Execution Time or, to the extent not completed at the Execution Time, shall contain only such specific additional information and other changes (beyond that contained in the Base Prospectus and any Preliminary Prospectus Supplement) as the Company has advised you, prior to the Execution Time, will be included or made therein. The Registration Statement, at the Execution Time, is effective and meets the requirements set forth in Rule 415(a)(1)(x). There is no order preventing or suspending the use of the Registration Statement, the Pricing Disclosure Package or the Final Prospectus Supplement, and, to the knowledge of the Company, no proceeding for that purpose or pursuant to Section 8A of the Securities Act against the Company or related to the offering has been initiated or threatened by the SEC and no notice of objection of the SEC to the use of such Registration Statement pursuant to Rule 401(g)(2) under the Securities Act has been received by the Company. Any reference herein to the Registration Statement, the Base Prospectus, any Preliminary Prospectus Supplement or the Final Prospectus Supplement shall be deemed to refer to and include the documents incorporated by reference therein pursuant to Item 12 of Form S-3 which were filed under the Exchange Act on or before the Effective Date of the Registration Statement or the issue date of the Base Prospectus, any Preliminary Prospectus Supplement or the Final Prospectus Supplement, as the case may be; and any reference herein to the terms “amend,” “amendment” or “supplement” with respect to the Registration Statement, the Base Prospectus, any Preliminary Prospectus Supplement or the Final Prospectus Supplement shall be deemed to refer to and include the filing of any document under the Exchange Act after the Effective Date of the Registration Statement or the issue date of the Base Prospectus, any Preliminary Prospectus Supplement or the Final Prospectus Supplement, as the case may be, deemed to be incorporated therein by reference.
(b) On each Effective Date, the Registration Statement did, and when the Final Prospectus Supplement is first filed in accordance with Rule 424(b) and on the Closing Date, the Final Prospectus Supplement (and any amendment or supplement thereto) will, comply in all material respects with the applicable requirements of the Securities Act and the Exchange Act and the respective rules thereunder; on each Effective Date, at the Execution Time, and on the Closing Date, the Registration Statement did not and will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading; and on the date of any filing pursuant to Rule 424(b) and on the Closing Date, the Final Prospectus Supplement (together with any amendment or supplement thereto) will not include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the Company makes no representations or warranties as to the information contained in or omitted from the Registration Statement or the Final Prospectus Supplement (or any amendment or supplement thereto) in reliance upon and in conformity with information furnished in writing to the Company by the Underwriters specifically for inclusion in the Registration Statement or the Final Prospectus Supplement (or any amendment or supplement thereto), it being understood and agreed that the only such information furnished by the Underwriters consists of the information described as such in Section 8(b) hereof.
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(c) As of the Execution Time, the Pricing Disclosure Package, when taken together as a whole with the pricing information set forth in Schedule I hereto does not, and as of the Closing Date will not, include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The preceding sentence does not apply to statements in or omissions from the Pricing Disclosure Package based upon and in conformity with written information furnished to the Company by the Underwriters specifically for use therein, it being understood and agreed that the only such information furnished by or on behalf of the Underwriters consists of the information described as such in Section 8(b) hereof.
(d) (i) At the earliest time after the filing of the Registration Statement that the Company or another offering participant made a bona fide offer (within the meaning of Rule 164(h)(2)) of the Shares and (ii) as of the Execution Time (with such date being used as the determination date for purposes of this clause (ii)), the Company was not and is not an Ineligible Issuer (as defined in Rule 405), without taking account of any determination by the SEC pursuant to Rule 405 that it is not necessary that the Company be considered an Ineligible Issuer.
(e) The Company has paid the registration fee for this offering pursuant to Rule 456(b)(1) or will pay such fee within the time period required by such rule (without giving effect to the proviso therein) and in any event prior to the Closing Date.
(f) Prior to the execution of this Agreement, the Company has not, directly or indirectly, offered or sold any of the Shares by means of any “prospectus” (within the meaning of the Securities Act) or used any “prospectus” (within the meaning of the Securities Act) in connection with the offer or sale of the Shares, in each case other than the Registration Statement, any Preliminary Prospectus Supplement and the Final Prospectus Supplement. The Company represents and agrees that it has not and, unless it obtains the prior consent of the Underwriters, it will not make any offer relating to the Shares that would constitute an “Issuer Free Writing Prospectus” or that would otherwise constitute a “Free Writing Prospectus” other than any Permitted Free Writing Prospectus. Any such Free Writing Prospectus relating to the Shares consented to by the Representatives is hereinafter referred to as a “Permitted Free Writing Prospectus.” The Company has complied and will comply in all material respects with the requirements of Rule 433 under the Securities Act applicable to any Permitted Free Writing Prospectus, including timely filing with the SEC where required, legending and record keeping. Each Permitted Free Writing Prospectus does not conflict with the information contained in the Registration Statement or the Pricing Disclosure Package did not and on the Closing Date will not, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the Company makes no representations or warranties as to the information contained in or omitted from such Permitted Free Writing Prospectus in reliance upon and in conformity with information furnished in writing to the Company by the Underwriters specifically for inclusion in such Permitted Free Writing Prospectus, it being understood and agreed that the only such information furnished by the Underwriters consists of the information described as such in Section 8(b) hereof.
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(g) All statistical, demographic and market-related data included in the Registration Statement, the Pricing Disclosure Package and the Final Prospectus Supplement are based on or derived from sources that the Company believes, after reasonable inquiry, to be reliable and accurate in all material respects or represent the Company’s good faith estimates that are made on the basis thereof. To the extent required, the Company has obtained the written consent for the use of such data from such sources.
(h) The Company has established and maintains “disclosure controls and procedures” (as defined in Rules 13a-15 and 15d-15 under the Exchange Act), which (i) are designed to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to the Company’s principal executive officer and its principal financial or accounting executive officer by others within those entities, within the time periods specified in the SEC’s rules and forms; (ii) have been evaluated by management of the Company for effectiveness as of the end of the Company’s most recent fiscal quarter; and (iii) are effective in all material respects to perform the functions for which they were established. Since the end of the Company’s most recent audited fiscal year, there have been no significant deficiencies or material weaknesses in the Company’s internal control over financial reporting (whether or not remediated) and no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. The Company is not aware of any change in its internal control over financial reporting that has occurred during its most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
(i) This Agreement has been duly authorized, executed and delivered by the Company.
(j) (i) The Company’s authorized equity capitalization is as set forth in the Pricing Disclosure Package and the Final Prospectus Supplement; (ii) the capital stock of the Company conforms in all material respects to the description thereof contained in the Pricing Disclosure Package and the Final Prospectus Supplement; (iii) the outstanding shares of Common Stock have been duly and validly authorized and issued and are fully paid and nonassessable; (iv) the Shares have been duly and validly authorized and, when issued and delivered to and paid for by the Underwriters pursuant to this Agreement, will be fully paid and nonassessable; (v) the holders of outstanding shares of capital stock of the Company are not entitled to preemptive or other rights to subscribe for the Securities, except for any such rights as have been effectively waived or satisfied; and, (vi) except as set forth in the Pricing Disclosure Package and the Final Prospectus Supplement, no options, warrants or other rights to purchase, agreements or other obligations to issue, or rights to convert any obligations into or exchange any securities for, shares of capital stock of or ownership interests in the Company are outstanding.
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(k) There is no material agreement required to be described in the Registration Statement or incorporated therein, or to be filed as an exhibit thereto, which is not described or filed as required (and the Preliminary Prospectus Supplement contains in all material respects the same description of the foregoing matters contained in the Final Prospectus Supplement).
(l) Except as otherwise disclosed in the Registration Statement, the Pricing Disclosure Package and the Final Prospectus Supplement, there are no persons with registration or other similar rights to have any equity or debt securities registered for sale under the Registration Statement or included in the offering contemplated by this Agreement, except for such rights as have been duly waived or satisfied.
(m) Subsequent to the respective dates as of which information is given in the Registration Statement and the Final Prospectus Supplement: (i) there has been no material adverse change, or any development that could be reasonably expected to result in a material adverse change, in (A) the condition, financial or otherwise, or in the earnings, business, properties, operations, operating results, assets, liabilities or prospects, whether or not arising from transactions in the ordinary course of business, of the Company and its subsidiaries, considered as one entity or (B) the ability of the Company to consummate the transactions contemplated by this Agreement or perform its obligations hereunder (any such change being referred to herein as a “Material Adverse Change”); (ii) the Company and its subsidiaries, considered as one entity, have not incurred any material liability or obligation, indirect, direct or contingent, including without limitation any losses or interference with their business from fire, explosion, flood, earthquakes, accident or other calamity, whether or not covered by insurance, or from any strike, labor dispute or court or governmental action, order or decree, that are material, individually or in the aggregate, to the Company and its subsidiaries, considered as one entity, and have not entered into any transactions not in the ordinary course of business; and (iii) there has not been any material decrease in the capital stock or any material increase in any short-term or long-term indebtedness of the Company or its subsidiaries and there has been no dividend or distribution of any kind declared, paid or made by the Company or, except for dividends paid to the Company or other subsidiaries, by any of the Company’s subsidiaries on any class of capital stock, or any repurchase or redemption by the Company or any of its subsidiaries of any class of capital stock.
(n) Ernst & Young LLP, which has expressed its opinion with respect to the financial statements (which term as used in this Agreement includes the related notes thereto) filed with the SEC as a part of the Registration Statement, the Base Prospectus and the Final Prospectus Supplement, is (i) an independent registered public accounting firm as required by the Securities Act, the Exchange Act, and the rules of the Public Company Accounting Oversight Board (“PCAOB”), (ii) in compliance with the applicable requirements relating to the qualification of accountants under Rule 2-01 of Regulation S-X under the Securities Act and (iii) a registered public accounting firm as defined by the PCAOB whose registration has not been suspended or revoked and who has not requested such registration to be withdrawn.
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(o) The financial statements filed with the SEC as a part of the Registration Statement, the Pricing Disclosure Package and the Final Prospectus Supplement comply as to form in all material respects with the requirements of Regulation S-X under the Securities Act and present fairly in all material respects the consolidated financial position of the Company and its consolidated subsidiaries as of the dates indicated and the results of their operations, changes in stockholders’ equity and cash flows for the periods specified. Such financial statements have been prepared in conformity with generally accepted accounting principles applied on a consistent basis throughout the periods involved, except as may be expressly stated in the related notes thereto. The interactive data in eXtensible Business Reporting Language included or incorporated by reference in the Registration Statement, the Pricing Disclosure Package and the Final Prospectus Supplement fairly presents the information called for in all material respects and has been prepared in accordance with the SEC’s rules and guidelines applicable thereto in all material respects. No other financial statements or supporting schedules are required to be included in the Registration Statement, the Pricing Disclosure Package or the Final Prospectus Supplement.
(p) The Company and each of its subsidiaries make and keep accurate books and records and maintain a system of internal accounting controls sufficient to provide reasonable assurance that: (i) transactions are executed in accordance with management’s general or specific authorization; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles as applied in the United States and to maintain accountability for assets; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; (iv) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences; and (v) the interactive data in eXtensible Business Reporting Language included or incorporated by reference in the Registration Statement, the Pricing Disclosure Package and the Final Prospectus Supplement fairly presents the information called for in all material respects and is prepared in accordance with the SEC’s rules and guidelines applicable thereto.
(q) The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation and has the corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Registration Statement, the Pricing Disclosure Package and the Final Prospectus Supplement and to enter into and perform its obligations under this Agreement except to the extent that the failure to be in good standing or have such power or authority would not result in a Material Adverse Change. The Company is duly qualified as a foreign corporation to transact business and is in good standing in the State of Texas and each other jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not result in a Material Adverse Change.
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(r) Each of the Company’s “subsidiaries” (for purposes of this Agreement, as defined in Rule 405 under the Securities Act) has been duly incorporated or organized, as the case may be, and is validly existing as a corporation, partnership or limited liability company, as applicable, in good standing under the laws of the jurisdiction of its incorporation or organization and has the power and authority (corporate or other) to own, lease and operate its properties and to conduct its business as described in the Registration Statement, the Pricing Disclosure Package and the Final Prospectus Supplement except to the extent that the failure to be in good standing or have such power or authority would not result in a Material Adverse Change. Each of the Company’s subsidiaries is duly qualified as a foreign corporation, partnership or limited liability company, as applicable, to transact business and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not result in a Material Adverse Change. All of the issued and outstanding capital stock or other equity or ownership interests of each of the Company’s subsidiaries have been duly authorized and validly issued, are fully paid and nonassessable and, except as otherwise disclosed in the Final Prospectus Supplement, are owned by the Company, directly or through subsidiaries, free and clear of any security interest, mortgage, pledge, lien, encumbrance or adverse claim (except for such liens granted under that certain loan and security agreement, dated as of March 17, 2022 (as amended and modified to the date hereof), among the Company, Lexicon Pharmaceuticals (New Jersey), Inc., Oxford Finance LLC, the lenders listed on Schedule 1.1 thereto and Oxford Finance Credit Fund III, LP). The Company does not own or control, directly or indirectly, any corporation, association or other entity that would constitute a significant subsidiary as defined under Rule 1-02 of Regulation S-X other than the subsidiaries listed in Exhibit 21 to the Company’s most recent Annual Report on Form 10-K.
(s) The Common Stock (including the Shares) conform in all material respects to the description thereof contained in the Registration Statement, the Pricing Disclosure Package and the Final Prospectus Supplement. All of the issued and outstanding Common Stock have been duly authorized and validly issued, are fully paid and nonassessable and have been issued in compliance with all federal and state securities laws. None of the outstanding Common Stock was issued in violation of any preemptive rights, rights of first refusal or other similar rights to subscribe for or purchase securities of the Company. There are no authorized or outstanding options, warrants, preemptive rights, rights of first refusal or other rights to purchase, or equity or debt securities convertible into or exchangeable or exercisable for, any capital stock of the Company or any of its subsidiaries other than those described in the Registration Statement, the Pricing Disclosure Package and the Final Prospectus Supplement.
(t) The Common Stock are registered pursuant to Section 12(b) or 12(g) of the Exchange Act and are listed on the Nasdaq Capital Market (“Nasdaq”), and the Company has taken no action designed to, or reasonably likely to have the effect of, terminating the registration of the Common Stock under the Exchange Act or delisting the Common Stock from Nasdaq, nor has the Company received any notification that the SEC or Nasdaq is contemplating terminating such registration or listing. To the Company’s knowledge, it is in compliance in all material respects with all applicable listing requirements of Nasdaq.
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(u) Neither the Company nor any of its subsidiaries is in violation of its charter or by laws, partnership agreement or operating agreement or similar organizational documents, as applicable, or is in default (or, with the giving of notice or lapse of time, would be in default) (“Default”) under any indenture, loan, credit agreement, note, lease, license agreement, contract, franchise or other instrument (including, without limitation, any pledge agreement, security agreement, mortgage or other instrument or agreement evidencing, guaranteeing, securing or relating to indebtedness) to which the Company or any of its subsidiaries is a party or by which it or any of them may be bound, or to which any of their respective properties or assets are subject, except for such Defaults as could not be expected, individually or in the aggregate, to result in a Material Adverse Change.
(v) Neither the issue and sale of the Securities nor the consummation of any other of the transactions contemplated by this Agreement, nor the execution, delivery and performance of this Agreement by the Company, nor the fulfillment of the terms hereof will conflict with, result in a breach or violation of, or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any of its subsidiaries pursuant to, (i) the charter or bylaws of the Company or any of its subsidiaries, (ii) the terms of any indenture, contract, lease, mortgage, deed of trust, note agreement, loan agreement or other agreement, obligation, condition, covenant or instrument to which the Company or any of its subsidiaries is a party or bound or to which its or their property is subject, or (iii) any statute, law, rule, regulation, judgment, order or decree applicable to the Company or any of its subsidiaries of any court, regulatory body, administrative agency, governmental body, arbitrator or other authority having jurisdiction over the Company or any of its subsidiaries or any of its or their properties, except in the case of clauses (ii) and (iii) for any such breach, violation or imposition as would not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Change and as would not materially adversely affect the ability of the Underwriters to consummate the transactions contemplated by this Agreement.
(w) There is no action, suit, proceeding, inquiry or investigation brought by or before any legal or governmental entity now pending or, to the knowledge of the Company, threatened, against or affecting the Company or any of its subsidiaries, which could be expected, individually or in the aggregate, to result in a Material Adverse Change. No material labor dispute with the employees of the Company exists, except as described in the Final Prospectus Supplement, or, to the knowledge of the Company, is imminent; and the Company is not aware of any existing, threatened or imminent labor disturbance by the employees of any of its principal suppliers, manufacturers or contractors that could result in a Material Adverse Change.
(x) The Company and its subsidiaries own, or have rights to use the inventions, patent applications, patents, trademarks, trade names, service names, copyrights, trade secrets and other intellectual property described in the Registration Statement, the Pricing Disclosure Package and the Final Prospectus Supplement as being owned or licensed by them and which are used in and necessary for the conduct of their respective businesses as currently conducted or as currently proposed to be conducted (collectively, “Intellectual Property”) and, to the Company’s knowledge, the conduct of
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their respective businesses does not and will not infringe or misappropriate in any material respect any such rights of others. The Intellectual Property owned by the Company has not been adjudged by a court of competent jurisdiction to be invalid or unenforceable, in whole or in part, and the Company is unaware of any facts which would form a reasonable basis for any such adjudication. To the Company’s knowledge: (i) except as otherwise disclosed in the Final Prospectus Supplement and with respect to LX9211 (to which the Company has acquired an exclusive license), there are no third parties who have ownership, royalty, or exclusive license rights to any Intellectual Property owned by the Company, except for customary reversionary rights of third-party licensors with respect to Intellectual Property that is disclosed in the Registration Statement, the Pricing Disclosure Package and the Final Prospectus Supplement as licensed to the Company or one or more of its subsidiaries; and (ii) there is no material infringement by third parties of any Intellectual Property owned by the Company. There is no pending or, to the Company’s knowledge, threatened action, suit, proceeding or claim by others: (A) challenging the Company’s rights in or to any Intellectual Property licensed to the Company; (B) challenging the validity, enforceability or scope of any Intellectual Property owned by the Company; or (C) asserting that the Company or any of its subsidiaries infringes or otherwise violates, or would, upon the commercialization of any product or service described in the Registration Statement, the Pricing Disclosure Package and the Final Prospectus Supplement as under development, infringe or violate, any patent, trademark, trade name, service name, copyright, trade secret or other intellectual rights of others. The Company and its subsidiaries have materially complied with the terms of each agreement pursuant to which Intellectual Property has been licensed to the Company or any subsidiary, and all such agreements are, to the Company’s knowledge, in full force and effect. To the Company’s knowledge, there are no material defects in any of the patents or patent applications included in the Intellectual Property. The Company and its subsidiaries have taken reasonable steps to protect, maintain and safeguard Intellectual Property owned by the Company, including the execution of appropriate nondisclosure, confidentiality agreements and invention assignment agreements and invention assignments with their employees, and, to the Company’s knowledge, no employee of the Company is in or has been in violation of any term of any such agreement. The duty of candor and good faith as required by the United States Patent and Trademark Office during the prosecution of the United States patents and patent applications included in the Intellectual Property owned by the Company have been materially complied with; and in all foreign offices having similar requirements, all such requirements have been materially complied with. The product candidates described in the Registration Statement, the Pricing Disclosure Package and the Final Prospectus Supplement as under development by the Company or any subsidiary fall within the scope of the claims of one or more patents or patent applications owned by, or exclusively licensed to, the Company or any subsidiary.
(y) The Company and each subsidiary possess such valid and current certificates, authorizations or permits required by state, federal or foreign regulatory agencies or bodies to conduct their respective businesses as currently conducted and as described in the Registration Statement, the Pricing Disclosure Package and the Final Prospectus Supplement (“Permits”), except as would not reasonably be expected to result in a Material Adverse Change, and the Company has not received any notice of proceedings relating to the revocation or modification of any such certificate, authorization or permit which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would result in a Material Adverse Change.
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(z) To the Company’s knowledge, the manufacturing facilities and operations of its suppliers or its subsidiaries are operated in compliance in all material respects with all applicable statutes, rules, regulations and policies of the U.S. Food and Drug Administration (the “FDA”) and comparable drug regulatory agencies outside of the United States to which it is subject (collectively, the “Regulatory Authorities”).
(aa) The application of the proceeds received by the Company from the issuance, sale and delivery of the Securities as described in the Pricing Disclosure Package and the Final Prospectus Supplement will not violate Regulation T, U or X of the Board of Governors of the Federal Reserve system or any other regulation of such Board of Governors.
(bb) No consent, approval, authorization, filing with or order of any court or governmental agency or body is required in connection with the transactions contemplated herein, except such as have been obtained under the Securities Act and such as may be required under the listing rules of the Nasdaq, applicable rules of the Financial Industry Regulatory Authority, Inc. (“FINRA”) and the blue sky laws of any jurisdiction in connection with the purchase and distribution of the Securities by the Underwriters in the manner contemplated herein and in the Pricing Disclosure Package and the Final Prospectus Supplement. The Company meets the definition of the term “experienced issuer” specified in FINRA Rule 5110(j)(6).
(cc) Except as otherwise disclosed in the Registration Statement, the Pricing Disclosure Package and the Final Prospectus Supplement, the Company and its subsidiaries have good and marketable title to all of the real and personal property and other assets owned by them which is material to the business of the Company, in each case free and clear of any security interests, mortgages, liens, encumbrances, equities, adverse claims and other defects except as do not materially affect the value of such property and do not interfere in any material respect with the use made and currently proposed to be made of such property by the Company. The real property, improvements, equipment and personal property held under lease by the Company or any of its subsidiaries are held under valid and enforceable leases, with such exceptions as are not material and do not materially interfere with the use made or proposed to be made of such real property, improvements, equipment or personal property by the Company or such subsidiary.
(dd) Except as would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Change, the Company and its subsidiaries (i) have filed all necessary federal, state and foreign income and franchise tax returns or have properly requested extensions thereof and (ii) have paid all taxes required to be paid by any of them and, if due and payable, any related or similar assessment, fine or penalty levied against any of them, except as may be being contested in good faith and by appropriate proceedings and for which adequate reserves are maintained in accordance with generally accepted accounting principles.
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(ee) There are no transfer taxes or other similar fees or charges under federal law or the laws of any state, or any political subdivision thereof, required to be paid in connection with the execution and delivery of this Agreement, any other document to be furnished hereunder or the issuance by the Company or sale by the Company of the Securities to the Underwriters.
(ff) The Company is not, and will not be, either after receipt of payment for the Shares or after the application of the proceeds therefrom as described under “Use of Proceeds” in the Registration Statement, the Pricing Disclosure Package and the Final Prospectus Supplement, required to register as an “investment company” under the Investment Company Act of 1940, as amended (the “Investment Company Act”).
(gg) The Company and each of its subsidiaries is insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which it is engaged. The Company and its subsidiaries are in compliance with the terms of such policies and instruments in all material respects; and there are no material claims by the Company or any of its subsidiaries under any such policy or instrument as to which any insurance company is denying liability or defending under a reservation of rights clause; neither the Company nor any such subsidiary has been refused any insurance coverage sought or applied for; and neither the Company nor any such subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not result in a Material Adverse Change.
(hh) Except as otherwise disclosed in the Registration Statement, the Pricing Disclosure Package and the Final Prospectus Supplement, no subsidiary of the Company is currently prohibited, directly or indirectly, from paying any dividends to the Company, from making any other distribution on such subsidiary’s capital stock, from repaying to the Company any loans or advances to such subsidiary from the Company or from transferring any of such subsidiary’s property or assets to the Company or any other subsidiary of the Company.
(ii) Neither the Company nor any of its subsidiaries has taken, directly or indirectly, any action designed to or that reasonably would be expected to cause or result in stabilization or manipulation of the price of the Common Stock or of any “reference security” (as defined in Rule 100 of Regulation M under the Exchange Act (“Regulation M”)) with respect to the Common Stock, whether to facilitate the sale or resale of the Shares or otherwise.
(jj) There are no business relationships or related-party transactions involving the Company or any of its subsidiaries or any other person required to be described in the Registration Statement, the Pricing Disclosure Package and the Final Prospectus Supplement which have not been described as required.
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(kk) Neither the Company nor any of its subsidiaries nor, to the best of the Company’s knowledge, any employee or agent of the Company or any subsidiary, has made any contribution or other payment to any official of, or candidate for, any federal, state or foreign office in violation of any law or of the character required to be disclosed in the Registration Statement, the Pricing Disclosure Package and the Final Prospectus Supplement.
(ll) Except as described in the Registration Statement, the Pricing Disclosure Package and the Final Prospectus Supplement and except as could not be expected, individually or in the aggregate, to result in a Material Adverse Change, (i) neither the Company nor any of its subsidiaries is in violation of any applicable federal, state, local or foreign statute, law (including fundamental principles of common law), rule, regulation or ordinance, including any judicial or administrative interpretation thereof, relating to pollution or protection of human health (to the extent relating to exposure to Hazardous Materials, defined below), the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata) or wildlife, including, without limitation, laws and regulations relating to the release of pollutants, contaminants, or hazardous or toxic wastes or substances that are subject to regulation by any governmental authority (collectively, “Hazardous Materials”) or to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials (collectively, “Environmental Laws”), (ii) the Company and its subsidiaries have all permits, authorizations and approvals required of them under Environmental Laws for their operations as currently conducted and are each in compliance with the terms and conditions of such permits, authorizations and approvals, and (iii) the Company and its subsidiaries have not received written notice of any pending or threatened liability under any Environmental Law and, to the knowledge of the Company, there is no event or occurrence that would reasonably be expected to result in the receipt of any such notice.
(mm) Except as would not, individually or in the aggregate, result in a Material Adverse Change: (i) the Company and its subsidiaries and any “employee benefit plan” (as defined under the Employee Retirement Income Security Act of 1974, as amended, and the regulations and published interpretations thereunder (collectively, “ERISA”)) established or maintained by the Company, its subsidiaries or their “ERISA Affiliates” (as defined below) are in compliance in all material respects with ERISA; “ERISA Affiliate” means, with respect to the Company or any of its subsidiaries, any member of any group of organizations described in Sections 414(b), (c), (m) or (o) of the Internal Revenue Code of 1986, as amended, and the regulations and published interpretations thereunder (the “Code”) of which the Company or such subsidiary is a member; (ii) no “reportable event” (as defined under ERISA), other than an event for which the 30-day notice period is waived, has occurred or is reasonably expected to occur with respect to any “employee benefit plan” established or maintained by the Company, its subsidiaries or any of their ERISA Affiliates; (iii) no “employee benefit plan” established or maintained by the Company, its subsidiaries or any of their ERISA Affiliates, if such “employee benefit plan” were terminated, would have any “amount of unfunded benefit liabilities” (as defined under ERISA); (iv) neither the Company, its subsidiaries nor any of their ERISA Affiliates has incurred or reasonably expects to incur any liability under
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(a) Title IV of ERISA with respect to termination of, or withdrawal from, any “employee benefit plan” or (b) Sections 412, 4971, 4975 or 4980B of the Code; and (v) each “employee benefit plan” established or maintained by the Company, its subsidiaries or any of their ERISA Affiliates that is intended to be qualified under Section 401(a) of the Code is so qualified and nothing has occurred, whether by action or failure to act, which would reasonably be expected to cause the loss of such qualification.
(nn) Except as otherwise disclosed in the Registration Statement, the Pricing Disclosure Package and the Final Prospectus Supplement, there is no broker, finder or other party that is entitled to receive from the Company any brokerage or finder’s fee or other fee or commission as a result of any transactions contemplated by this Agreement.
(oo) The Company and its subsidiaries are in compliance with all applicable laws, rules and regulations, except where failure to be so in compliance could not be expected, individually or in the aggregate, to result in a Material Adverse Change.
(pp) Neither the Company nor any of its subsidiaries is a “covered foreign person”, as that term is defined in 31 C.F.R. § 850.209. Neither the Company nor any of its subsidiaries currently engages, or has plans to engage, directly or indirectly, in a “covered activity”, as that term is defined in 31 C.F.R. § 850.208 (“Covered Activity”).
(qq) Neither the Company nor any of its subsidiaries nor, to the knowledge of the Company, any director, officer, or employee of the Company or any of its subsidiaries, nor to the knowledge of the Company, any agent, affiliate or other person acting on behalf of the Company or any of its subsidiaries has, in the course of its actions for, or on behalf of, the Company or any of its subsidiaries (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expenses relating to political activity; (ii) made or taken any act in furtherance of an offer, promise, or authorization of any direct or indirect unlawful payment or benefit to any foreign or domestic government official or employee, including of any government-owned or controlled entity or public international organization, or any political party, party official, or candidate for political office; (iii) violated or is in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended (the “FCPA”), the UK Bribery Act 2010, or any other applicable anti-bribery or anti-corruption law; or (iv) made, offered, authorized, requested, or taken an act in furtherance of any unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful payment or benefit. The Company and its subsidiaries and, to the knowledge of the Company, the Company’s affiliates have conducted their respective businesses in compliance with the FCPA and have instituted and maintain policies and procedures designed to ensure, and which are reasonably expected to continue to ensure, continued compliance therewith.
(rr) The operations of the Company and its subsidiaries are, and have been conducted at all times, in compliance with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering statutes of all applicable jurisdictions, the rules and regulations thereunder and any related or similar applicable rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the “Money Laundering Laws”) and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any of its subsidiaries with respect to the Money Laundering Laws is pending or, to the best knowledge of the Company, threatened.
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(ss) The preclinical tests and clinical trials, and other studies (collectively, “studies”) that are described in, or the results of which are referred to in, the Registration Statement, the Pricing Disclosure Package and the Final Prospectus Supplement were and, if still pending, are, to the Company’s knowledge, being conducted in all material respects in accordance with experimental protocols, procedures and controls pursuant to, where applicable, accepted professional and scientific standards for products or product candidates comparable to those being developed by the Company; the descriptions of the results of such studies do not contain any misstatement of a material fact or omit to state a material fact necessary to make such statements not misleading, and the Company and its subsidiaries have no knowledge of any other studies the results of which reasonably call into question the results described or referred to in the Registration Statement, the Pricing Disclosure Package and the Final Prospectus Supplement; the Company and its subsidiaries have made all such filings and obtained all such approvals as may be required by the Food and Drug Administration of the U.S. Department of Health and Human Services or any committee thereof or from any other U.S. or foreign government or drug or medical device regulatory agency, or health care facility Institutional Review Board (collectively, the “Regulatory Agencies”) except where failure to do so would not result in a Material Adverse Change; neither the Company nor any of its subsidiaries has received any notice of, or correspondence from, any Regulatory Agency requiring the termination, suspension or material modification of any clinical trials that are described or referred to in the Registration Statement, the Pricing Disclosure Package and the Final Prospectus Supplement.
(tt) The Company: (A) is in compliance with the Federal Food, Drug, and Cosmetic Act (21 U.S.C. § 301 et seq.) and the regulations promulgated thereunder (the “FDCA”) except where failure to be so in compliance would not result in a Material Adverse Change; (B) has not received any FDA Form 483, written notice of adverse finding, warning letter, untitled letter or other correspondence or written notice from the FDA alleging or asserting material noncompliance with the FDCA or any licenses, certificates, approvals, clearances, exemptions, authorizations, permits and supplements or amendments thereto required under the FDCA (“Authorizations”); (C) possesses all material Authorizations and such Authorizations are valid and in full force and effect and the Company is not in material violation of any term of any such Authorizations except where failure to possess or be so in compliance with such Authorizations would not reasonably be expected to result in a Material Adverse Change; (D) has not received written notice of any claim, action, suit, proceeding, hearing, enforcement, investigation, arbitration or other action from the FDA or any governmental entity or third party alleging that any product operation or activity is in material violation of the FDCA or the terms of any Authorization and has no knowledge that the FDA or any governmental entity or third party is considering any such claim, litigation, arbitration, action, suit, investigation or proceeding, which if resolved adversely to the Company, would reasonably be expected to have a Material Adverse Change; (E) has not received written
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notice that the FDA or any governmental entity has taken, is taking or intends to take action to limit, suspend, modify or revoke any material Authorizations and has no knowledge that the FDA or any governmental entity is considering such action; and (F) has filed, obtained, maintained or submitted all reports, documents, forms, notices, applications, records, claims, submissions and supplements or amendments as required under the FDCA or any Authorizations and that all such reports, documents, forms, notices, applications, records, claims, submissions and supplements or amendments were materially complete and correct on the date filed (or were corrected or supplemented by a subsequent submission), except where instances of failure to file, obtain, maintain or submit required documentation would not reasonably be expected to result in a Material Adverse Change.
(uu) Neither the Company nor any of its subsidiaries, nor, to the knowledge of the Company, directors, officers, or employees, nor, to the knowledge of the Company, any agent, affiliate or other person acting on behalf of the Company or any of its subsidiaries is currently the subject or the target of any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury (“OFAC”) or the U.S. Department of State, the United Nations Security Council, the European Union, His Majesty’s Treasury of the United Kingdom, or other relevant sanctions authority (collectively, “Sanctions”); nor is the Company or any of its subsidiaries located, organized or resident in a country or territory that is the subject or the target of Sanctions, including, without limitation, Cuba, Iran, North Korea, Syria, and the Crimea, so-called Donetsk People’s Republic, and so-called Luhansk People’s Republic regions of Ukraine and the non-government controlled areas of Zaporizhzhia and Kherson Regions (collectively, the “Sanctioned Countries”); and the Company will not directly or indirectly use the proceeds of this offering, or lend, contribute or otherwise make available such proceeds to any subsidiary, or any joint venture partner or other person or entity, for the purpose of financing the activities of or business with any person, or in any country or territory, that at the time of such financing, is the subject or the target of Sanctions or in any other manner that will result in a violation by any person (including any person participating in the transaction whether as underwriter, advisor, investor or otherwise) of applicable Sanctions. Since April 24, 2019, the Company and its subsidiaries have not knowingly engaged in and are not now knowingly engaged in any dealings or transactions with any person that at the time of the dealing or transaction is or was the subject or the target of Sanctions or with any Sanctioned Country.
(vv) The Company and the Company’s directors or officers, in their capacities as such, are in compliance, in all material respects, with all applicable provisions of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated thereunder.
(ww) The Company’s and its subsidiaries’ information technology assets and equipment, computers, on-premise and remote systems, networks, hardware, and databases (collectively, “IT Systems”) are reasonably adequate for the operation of the business of the Company and its subsidiaries as currently conducted. The Company and its subsidiaries have implemented and maintained commercially reasonable physical, technical and administrative controls, policies, procedures, and safeguards to maintain and protect their material confidential information and the integrity, operation,
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redundancy and security of all IT Systems and data, including “Personal Data,” used in connection with their businesses. “Personal Data” means (i) a natural person’s name, street address, telephone number, e-mail address, photograph, social security number or tax identification number, driver’s license number, passport number, credit card number, or bank account information; (ii) any information which would qualify as “personally identifying information” under the Federal Trade Commission Act, as amended; (iii) “personal data,” “personal information,” or similar term as defined by CCPA (as defined below), CPRA (as defined below), GDPR (as defined below) or any other applicable Privacy Laws; (iv) any information which would qualify as “protected health information” under the Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act (collectively, “HIPAA”); and (v) any other piece of information that, either alone or in combination with another piece of information, allows for the identification of such natural person, his or her family or household, or a device, or permits the collection or analysis of any data related to an identified person’s health or sexual orientation, and together with all proprietary or confidential information of the Company, “Sensitive Data.” In the past three years, there have been no breaches, violations, outages or unauthorized uses of or accesses to such Sensitive Data or IT Systems, except for those that have been remedied without material cost or liability or the duty to notify any other person or governmental authority under Privacy Laws (as defined below).
(xx) The Company and its subsidiaries are, and at all prior times were, in material compliance with all applicable foreign, state and federal data privacy and security laws and regulations, including without limitation HIPAA, the European Union General Data Protection Regulation (“EU GDPR”) (EU 2016/679) and the United Kingdom General Data Protection Regulation (“UK GDPR”), the Access to U.S. Sensitive Personal Data and Government-Related Data by Countries of Concern or Covered Persons (90 Fed. Reg. 1636 (Jan. 8, 2025) codified at 28 C.F.R. § 202, including any amendments thereto and guidance issued thereunder (together, the “U.S. Data Security Program”)), and all state privacy laws (including the California Consumer Privacy Act (“CCPA”), California Privacy Rights Act (“CPRA”) and similar laws in any other states) (collectively, the “Privacy Laws”). To ensure compliance with the Privacy Laws, the Company and its subsidiaries have in place, comply with, and take appropriate steps to ensure compliance in all material respects with the Company’s internal and external policies and procedures relating to data privacy and security and the collection, processing, storage, use, disclosure, handling, transfer and analysis of Sensitive Data (the “Policies”). The Company further certifies that neither it nor any subsidiary: (i) has received written notice of any actual or potential liability under or relating to, or actual or potential violation of, any of the Privacy Laws; (ii) is currently conducting or paying for, in whole or in part, any investigation, remediation, or other corrective action initiated by a governmental authority pursuant to any Privacy Law; or (iii) is a party to any order, decree, or settlement agreement issued by a governmental authority that imposes any obligation or liability under any Privacy Law.
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(yy) The Company (i) does not have any material lending or other relationship with any bank or lending affiliate of the Underwriters and (ii) does not intend to use any of the proceeds from the sale of the Securities hereunder to repay any outstanding debt owed to any affiliate of the Underwriters.
(zz) The Company and its subsidiaries are, and at all times have been, in compliance with all applicable Health Care Laws, except to the extent that any non-compliance would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Change. For purposes of this Agreement, “Health Care Laws” means: (i) the Federal Food, Drug, and Cosmetic Act (21 U.S.C. Section 301 et seq.), the Public Health Service Act (42 U.S.C. Section 201 et seq.), and the regulations promulgated thereunder; (ii) all applicable federal, state, local and foreign health care fraud and abuse laws, including, without limitation, the Anti-Kickback Statute (42 U.S.C. Section 1320a-7b(b)), the Civil False Claims Act (31 U.S.C. Section 3729 et seq.), the criminal false statements law (42 U.S.C. Section 1320a-7b(a)), 18 U.S.C. Sections 286 and 287, the health care fraud criminal provisions under HIPAA (42 U.S.C. Section 1320d et seq.), the Stark Law (42 U.S.C. Section 1395nn), the civil monetary penalties law (42 U.S.C. Section 1320a-7a), the exclusion law (42 U.S.C. Section 1320a-7), the Physician Payments Sunshine Act (42 U.S.C. Section 1320-7h), and applicable laws governing government funded or sponsored healthcare programs; (iii) HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act (42 U.S.C. Section 17921 et seq.); (iv) the Patient Protection and Affordable Care Act of 2010, as amended by the Health Care and Education Reconciliation Act of 2010; (v) licensure, quality, safety and accreditation requirements under applicable federal, state, local or foreign laws or regulatory bodies; and (vi) all other local, state, federal, national, supranational and foreign laws, relating to the regulation of the Company or its subsidiaries, and (vii) the directives and regulations promulgated pursuant to such statutes and any state or non-U.S. counterpart thereof. Neither the Company nor any of its subsidiaries has received written notice of any claim, action, suit, proceeding, hearing, enforcement, investigation, arbitration or other action from any court or arbitrator or governmental or regulatory authority or third party alleging that any product operation or activity is in violation of any Health Care Laws nor, to the Company’s knowledge, is any such claim, action, suit, proceeding, hearing, enforcement, investigation, arbitration or other action threatened. The Company and its subsidiaries have filed, maintained or submitted all material reports, documents, forms, notices, applications, records, claims, submissions and supplements or amendments as required by any Health Care Laws, and all such reports, documents, forms, notices, applications, records, claims, submissions and supplements or amendments were complete and accurate on the date filed in all material respects (or were corrected or supplemented by a subsequent submission). Neither the Company nor any of its subsidiaries is a party to any corporate integrity agreements, monitoring agreements, consent decrees, settlement orders, or similar agreements with or imposed by any governmental or regulatory authority. Additionally, neither the Company, nor any of its subsidiaries or any of their respective employees, officers, directors, or, to the Company’s knowledge, any of their respective agents has been excluded, suspended or debarred from participation in any U.S. federal health care program or human clinical research or, to the knowledge of the Company, is subject to a governmental inquiry, investigation, proceeding, or other similar action that could reasonably be expected to result in debarment, suspension, or exclusion. The Company is neither a “covered entity” nor a “business associate” as each term is defined under HIPAA.
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(aaa) The statements contained in the Preliminary Prospectus Supplement and the Final Prospectus Supplement under the captions “Business—Patents and Proprietary Rights,” “Business—Government Regulation,” “Risk Factors—Risks Related to Our Intellectual Property,” insofar as such statements summarize legal matters, agreements, documents, or proceedings discussed therein, are accurate and fair summaries of such legal matters, agreements, documents or proceedings.
(bbb) Any certificate signed by any officer of the Company and delivered to the Underwriters or counsel for the Underwriters in connection with the offering of the Shares shall be deemed a representation and warranty by the Company, as to matters covered thereby, to the Underwriters, as applicable.
(ccc) No forward-looking statement (within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act) contained in either the Pricing Disclosure Package or the Final Prospectus Supplement has been made or reaffirmed without a reasonable basis or has been disclosed other than in good faith.
2. Purchase and Sale.
(a) Subject to the terms and conditions and in reliance upon the representations and warranties herein set forth, the Company agrees to sell to each Underwriter, and each Underwriter agrees, severally and not jointly, to purchase from the Company, at the purchase price set forth in Schedule I hereto, the number of Underwritten Securities set forth opposite such Underwriter’s name in Schedule II hereto.
(b) Subject to the terms and conditions and in reliance upon the representations and warranties herein set forth, the Company hereby grants an option to the several Underwriters to purchase, severally and not jointly, up to the number of Option Securities set forth in Schedule I hereto at the same purchase price per share as the Underwriters shall pay for the Underwritten Securities, less an amount per share equal to any dividends or distributions declared by the Company and payable on the Underwritten Securities but not payable on the Option Securities. Said option may be exercised in whole or in part at any time on or before the 30th day after the date of the Final Prospectus Supplement upon written or telegraphic notice by the Representatives to the Company setting forth the number of Option Securities as to which the several Underwriters are exercising the option and the settlement date. The number of Option Securities to be purchased by each Underwriter shall be the same percentage of the total number of Option Securities to be purchased by the several Underwriters as such Underwriter is purchasing of the Underwritten Securities, subject to such adjustments as you in your absolute discretion shall make to eliminate any fractional shares.
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3. Delivery and Payment.
(a) Delivery of and payment for the Underwritten Securities and the Option Securities (if the option provided for in Section 2(b) hereof shall have been exercised on or before the first Business Day immediately preceding the Closing Date) shall be made on the date and at the time specified in Schedule I hereto or at such time on such later date not more than two Business Days after the foregoing date as the Representatives shall designate, which date and time may be postponed by agreement between the Representatives and the Company or as provided in Section 9 hereof (such date and time of delivery and payment for the Securities being herein called the “Closing Date”). As used herein, “Business Day” shall mean any day other than a Saturday, a Sunday or a legal holiday or a day on which banking institutions or trust companies are authorized or obligated by law to close in New York City. Delivery of the Securities shall be made to the Representatives for the respective accounts of the several Underwriters against payment by the several Underwriters through the Representatives of the purchase price thereof to or upon the order of the Company by wire transfer payable in same-day funds to an account specified by the Company. Delivery of the Underwritten Securities (other than the Warrants) and the Option Securities shall be made through the facilities of The Depository Trust Company unless the Representatives shall otherwise instruct.
(b) If the option provided for in Section 2(b) hereof is exercised after the third Business Day immediately preceding the Closing Date, the Company will deliver the Option Securities (at the expense of the Company) to the Representatives, at 520 Madison Avenue, New York, New York, on the date specified by the Representatives (which shall be within five Business Days after exercise of said option) for the respective accounts of the several Underwriters, against payment by the several Underwriters through the Representatives of the purchase price thereof to or upon the order of the Company by wire transfer payable in same-day funds to an account specified by the Company. If settlement for the Option Securities occurs after the Closing Date, the Company will deliver to the Representatives on the settlement date for the Option Securities, and the obligation of the Underwriters to purchase the Option Securities shall be conditioned upon receipt of, supplemental opinions, certificates and letters confirming as of such date the opinions, certificates and letters delivered on the Closing Date pursuant to Section 6 hereof.
4. Offering by Underwriters. It is understood that the several Underwriters propose to offer the Securities for sale to the public as set forth in the Final Prospectus Supplement.
5. Agreements. The Company agrees with the several Underwriters that:
(a) Prior to the termination of the offering of the Securities, the Company will not file any amendment of the Registration Statement or supplement (including the Final Prospectus Supplement or any Preliminary Prospectus Supplement) to the Base Prospectus or any Rule 462(b) Registration Statement unless the Company has furnished you a copy for your review prior to filing and will not file any such proposed amendment or supplement to which you reasonably object. The Company will cause the Final Prospectus Supplement, properly completed, and any supplement thereto to be filed in a form approved (such approval not to be unreasonably withheld) by the Representatives with the SEC pursuant to the applicable paragraph of Rule 424(b) within the time period prescribed and will provide evidence satisfactory to the Representatives of such timely filing. The Company will promptly advise the Representatives (i) when the Final
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Prospectus Supplement, and any supplement thereto, shall have been filed (if required) with the SEC pursuant to Rule 424(b) or when any Rule 462(b) Registration Statement shall have been filed with the SEC, (ii) when, prior to termination of the offering of the Securities, any amendment to the Registration Statement shall have been filed or become effective, (iii) of any request by the SEC or its staff for any amendment of the Registration Statement, or any Rule 462(b) Registration Statement, or for any supplement to the Final Prospectus Supplement or for any additional information, (iv) of the issuance by the SEC of any stop order suspending the effectiveness of the Registration Statement or of any notice objecting to its use or the institution or threatening of any proceeding for that purpose and (v) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Securities for sale in any jurisdiction or the institution or threatening of any proceeding for such purpose. The Company will use its best efforts to prevent the issuance of any such stop order or the occurrence of any such suspension or objection to the use of the Registration Statement and, upon such issuance, occurrence or notice of objection, to obtain as soon as possible the withdrawal of such stop order or relief from such occurrence or objection, including, if necessary, by filing an amendment to the Registration Statement or a new registration statement and using its best efforts to have such amendment or new registration statement declared effective as soon as practicable.
(b) If, at any time prior to the filing of the Final Prospectus Supplement pursuant to Rule 424(b), any event occurs as a result of which the Pricing Disclosure Package would include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein in the light of the circumstances under which they were made or the circumstances then prevailing not misleading, the Company will (i) notify promptly the Representatives so that any use of the Pricing Disclosure Package may cease until it is amended or supplemented; (ii) amend or supplement the Pricing Disclosure Package to correct such statement or omission; and (iii) supply any amendment or supplement to you in such quantities as you may reasonably request.
(c) If, at any time when a prospectus relating to the Securities is required to be delivered under the Securities Act (including in circumstances where such requirement may be satisfied pursuant to Rule 172), any event occurs as a result of which the Final Prospectus Supplement as then supplemented would include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein in the light of the circumstances under which they were made or the circumstances then prevailing not misleading, or if it shall be necessary to amend the Registration Statement, file a new registration statement or supplement the Final Prospectus Supplement to comply with the Securities Act or the Exchange Act or the respective rules thereunder, including in connection with use or delivery of the Final Prospectus Supplement, the Company promptly will (i) notify the Representatives of any such event, (ii) prepare and file with the SEC, subject to the second sentence of paragraph (a) of this Section 5, an amendment or supplement or new registration statement which will correct such statement or omission or effect such compliance, (iii) use its best efforts to have any amendment to the Registration Statement or new registration statement declared effective as soon as reasonably practicable in order to avoid any disruption in use of the Final Prospectus Supplement and (iv) supply any supplemented Final Prospectus Supplement to you in such quantities as you may reasonably request.
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(d) As soon as reasonably practicable, the Company will make generally available to its security holders and to the Representatives an earnings statement or statements of the Company and its subsidiaries which will satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 under the Securities Act.
(e) The Company will furnish to the Representatives and counsel for the Underwriters, without charge, signed copies of the Registration Statement (including exhibits thereto) and to each other Underwriter a copy of the Registration Statement (without exhibits thereto) and, so long as delivery of a prospectus by an Underwriter or dealer may be required by the Securities Act (including in circumstances where such requirement may be satisfied pursuant to Rule 172), as many copies of each Preliminary Prospectus Supplement, the Final Prospectus Supplement and each Issuer Free Writing Prospectus and any supplement thereto as the Representatives may reasonably request. The Company will pay the expenses of printing or other production of all documents relating to the offering.
(f) The Company will cooperate with the Representatives to arrange, if reasonably necessary, for the qualification of the Securities for sale under the laws of such jurisdictions as the Representatives may designate and will maintain such qualifications in effect so long as required for the distribution of the Securities; provided that in no event shall the Company be obligated to qualify to do business in any jurisdiction where it is not now so qualified or to take any action that would subject it to service of process in suits, other than those arising out of the offering or sale of the Securities, in any jurisdiction where it is not now so subject.
(g) The Company will not, without the prior written consent of the Representatives, offer, sell, contract to sell, pledge, hedge, or otherwise dispose of, (or enter into any transaction which is designed to, or might reasonably be expected to, result in the disposition (whether by actual disposition or effective economic disposition due to cash settlement or otherwise) by the Company or any affiliate of the Company or any person in privity with the Company or any affiliate of the Company) directly or indirectly, including the submission or filing (or participation in the submission or filing) of a registration statement with the SEC in respect of, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Exchange Act, any other shares of Common Stock or any securities convertible into, or exercisable, or exchangeable for, shares of Common Stock; or publicly announce an intention to effect any such transaction, for a period of 60 days after the date of this Agreement (such period, the “Company Lock-up Period”), provided, however, that the Company may: (i) effect the transactions contemplated hereby and issue shares of Common Stock pursuant to the potential concurrent private placement described in the Registration Statement, the Pricing Disclosure Package and the Final Prospectus Supplement; (ii) grant options, restricted stock units or other equity awards or issue shares of Common Stock to its employees, officers, directors, advisors or consultants pursuant to employee benefit plans of the Company, provided, that each
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recipient of such securities that is a newly appointed director or executive officer pursuant to this clause (ii) agree to restrictions on the resale of securities that are consistent with the provisions set forth in the lock-up letter described in Section 6(m) hereof; (iii) sell shares of Common Stock pursuant to that Open Market Sale AgreementSM, by and between the Company and Jefferies, dated December 29, 2023; provided, that no sales shall be made until the earlier of the (x) exercise in full by the Underwriters of their option to purchase the Option Securities and (y) 30 days from the date of the Prospectus; (iv) file one or more registration statements on Form S-8 relating to stock options or employee benefit plans of the Company, and provided, further, that each recipient of such securities that is a newly appointed director or executive officer agrees to restrictions on the resale of securities that are consistent with the provisions set forth in the lock-up letter described in Section 6(m) hereof, (v) effect the transactions contemplated by that certain preferred stock purchase agreement, dated on or around the date hereof, by and between the Company and Artal International S.C.A., including, for the avoidance of doubt, the issuance by the Company of any convertible preferred securities thereunder or of any Common Stock underlying any such convertible preferred securities, and the Company’s filing of a registration statement or any related actions as may be required pursuant to any registration rights contemplated thereby or as granted as a result thereof and (vi) entering into any acquisition, merger, consolidation, stock exchange or similar transaction whereby all or substantially all of the Common Stock is acquired by a third party, which is approved by the Board of Directors of the Company; provided that (A) any such transaction is not solicited by the Company and (B) in the event the acquisition, merger, consolidation, stock exchange or other similar transaction is not completed, the Company shall remain subject to the restrictions contained herein. The Company will provide the Representatives and each individual subject to the restricted period pursuant to the lock-up letters described in Section 6(m) hereof with prior notice of any such announcement that gives rise to an extension of the restricted period.
(h) The Company will use its commercially reasonable efforts to maintain the listing of the Shares issued and sold by the Company on the Nasdaq Capital Market.
(i) The Company will not take, directly or indirectly, any action designed to or that would constitute or that might reasonably be expected to cause or result in, under the Exchange Act or otherwise, stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Securities.
(j) The Company agrees to pay the costs and expenses relating to the following matters: (i) the preparation, printing or reproduction and filing with the SEC of the Registration Statement (including financial statements and exhibits thereto), each Preliminary Prospectus Supplement, the Final Prospectus Supplement and each Issuer Free Writing Prospectus, and each amendment or supplement to any of them; (ii) the printing (or reproduction) and delivery (including postage, air freight charges and charges for counting and packaging) of such copies of the Registration Statement, each Preliminary Prospectus Supplement, the Final Prospectus Supplement and each Issuer Free Writing Prospectus, and all amendments or supplements to any of them, as may, in each case, be reasonably requested for use in connection with the offering and sale of the
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Securities; (iii) the preparation, printing, authentication, issuance and delivery of certificates for the Securities, including any stamp or transfer taxes in connection with the original issuance and sale of the Securities to the Underwriters; (iv) the printing (or reproduction) and delivery of this Agreement, any blue sky memorandum and all other agreements or documents printed (or reproduced) and delivered in connection with the offering of the Securities; (v) the registration of the Securities under the Exchange Act and the listing of the Securities on Nasdaq; (vi) any registration or qualification of the Securities for offer and sale under the securities or blue sky laws of the several states (including filing fees and the reasonable fees and expenses of counsel for the Underwriters relating to such registration and qualification); (vii) FINRA (including filing fees and the reasonable fees and expenses of counsel for the Underwriters relating to such filings); (viii) the transportation and other expenses incurred by or on behalf of Company representatives in connection with presentations to prospective purchasers of the Securities; (ix) the fees and expenses of the Company’s accountants and the fees and expenses of counsel (including local and special counsel) for the Company; and (x) all other costs and expenses incident to the performance by the Company of its obligations hereunder, provided, however, that the reasonable fees and expenses of counsel for the Underwriters incurred pursuant to clauses (vi) and (vii) of this Section 5(j) shall not exceed $20,000 in the aggregate.
(k) The Company agrees that, unless it has or shall have obtained the prior written consent of the Representatives, and each Underwriter, severally and not jointly, agrees with the Company that, unless it has or shall have obtained, as the case may be, the prior written consent of the Company, it has not made and will not make any offer relating to the Securities that would constitute an Issuer Free Writing Prospectus or that would otherwise constitute a Free Writing Prospectus required to be filed by the Company with the SEC or retained by the Company under Rule 433 under the Securities Act (“Rule 433”); provided that the prior written consent of the parties hereto shall be deemed to have been given in respect of the Free Writing Prospectuses included in Schedule III hereto and any electronic road show. The Company agrees that (x) it has treated and will treat, as the case may be, each Permitted Free Writing Prospectus as an Issuer Free Writing Prospectus and (y) it has complied and will comply, as the case may be, with the requirements of Rule 164 under the Securities Act (“Rule 164”) and Rule 433 applicable to any Permitted Free Writing Prospectus, including in respect of timely filing with the SEC, legending and record keeping.
6. Conditions to the Obligations of the Underwriters. The obligations of the Underwriters to purchase the Underwritten Securities and the Option Securities, as the case may be, shall be subject to the accuracy of the representations and warranties on the part of the Company contained herein as of the Execution Time, the Closing Date and any settlement date pursuant to Section 3 hereof, to the accuracy of the statements of the Company made in any certificates pursuant to the provisions hereof, to the performance by the Company of its obligations hereunder and to the following additional conditions:
(a) The Final Prospectus Supplement, and any supplement thereto, have been filed in the manner and within the time period required by Rule 424(b); any material required to be filed by the Company pursuant to Rule 433(d) shall have been filed with the SEC within the applicable time periods prescribed for such filings by Rule 433; and no stop order suspending the effectiveness of the Registration Statement or any notice objecting to its use shall have been issued and no proceedings for that purpose shall have been instituted or threatened.
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(b) The Company shall have requested and caused Brian T. Crum, Senior Vice President and General Counsel of the Company, to have furnished to the Representatives an opinion, dated the Closing Date and addressed to the Representatives, in form and substance reasonably satisfactory to the Representatives.
(c) The Company shall have requested and caused Max Bachrach, Ph.D., intellectual property counsel for the Company, to have furnished to the Representatives an opinion with respect to intellectual property matters, dated the Closing Date and addressed to the Representatives, in form and substance reasonably satisfactory to the Representatives.
(d) The Company shall have requested and caused Vinson & Elkins L.L.P., counsel for the Company, to have furnished to the Representatives their opinion and negative assurance letter, dated the Closing Date and addressed to the Representatives, in form and substance reasonably satisfactory to the Representatives.
(e) The Representatives shall have received from Cooley LLP, counsel for the Underwriters, such opinion or opinions and negative assurance letter, dated the Closing Date and addressed to the Representatives, with respect to the issuance and sale of the Securities, the Registration Statement, the Pricing Disclosure Package, the Final Prospectus Supplement (together with any supplement thereto) and other related matters as the Representatives may reasonably require, and the Company shall have furnished to such counsel such documents as they request for the purpose of enabling them to pass upon such matters.
(f) The Company shall have furnished to the Representatives a certificate of the Company, signed by the Chief Executive Officer or other principal executive officer of the Company, dated the Closing Date, to the effect that the signers of such certificate have carefully examined the Registration Statement, the Pricing Disclosure Package, the Final Prospectus Supplement and any amendments or supplements thereto, as well as each electronic road show used in connection with the offering of the Securities, and this Agreement and that:
(i) the representations and warranties of the Company in this Agreement are true and correct on and as of the Closing Date with the same effect as if made on the Closing Date and the Company has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied at or prior to the Closing Date;
(ii) no stop order suspending the effectiveness of the Registration Statement or any notice objecting to its use has been issued and no proceedings for that purpose have been instituted or, to the Company’s knowledge, threatened; and
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(iii) since the date of the most recent financial statements included or incorporated by reference in the Pricing Disclosure Package and the Final Prospectus Supplement (exclusive of any amendment or supplement thereto), there has been no Material Adverse Change in the condition (financial or otherwise), prospects, earnings, business or properties of the Company and its subsidiaries, taken as a whole, whether or not arising from transactions in the ordinary course of business, except as set forth in or contemplated in the Pricing Disclosure Package and the Final Prospectus Supplement (exclusive of any amendment or supplement thereto).
(g) The Company shall have requested and caused Ernst & Young LLP to have furnished to the Representatives, at the Execution Time and at the Closing Date, letters (which may refer to letters previously delivered to one or more of the Representatives), dated respectively as of the Execution Time and as of the Closing Date, in form and substance reasonably satisfactory to the Representatives, containing statements and information of the type ordinarily included in accountants “comfort letters” to underwriters.
(h) At the Execution Time and the Closing Date, as the case may be, the Company shall have furnished to the Representatives a certificate, dated the respective dates of delivery thereof and addressed to the Underwriters, of its chief financial officer with respect to certain financial data contained in the Pricing Disclosure Package and the Prospectus, providing “management comfort” with respect to such information, in form and substance reasonably satisfactory to the Representatives.
(i) Subsequent to the Execution Time or, if earlier, the dates as of which information is given in the Registration Statement (exclusive of any amendment thereof) and the Final Prospectus Supplement (exclusive of any supplement thereto), there shall not have been (i) any change or decrease specified in the letter or letters referred to in paragraph (e) of this Section 6 or (ii) any change, or any development involving a prospective change, in or affecting the condition (financial or otherwise), earnings, business or properties of the Company and its subsidiaries taken as a whole, whether or not arising from transactions in the ordinary course of business, except as set forth in or contemplated in the Pricing Disclosure Package and the Final Prospectus Supplement (exclusive of any amendment or supplement thereto) the effect of which, in any case referred to in clause (i) or (ii) above, is, in the sole judgment of the Representatives, so material and adverse as to make it impractical or inadvisable to proceed with the offering or delivery of the Securities as contemplated by the Registration Statement (exclusive of any amendment thereof), the Pricing Disclosure Package and the Final Prospectus Supplement (exclusive of any amendment or supplement thereto).
(j) Prior to the Closing Date, the Company shall have furnished to the Representatives such further information, certificates and documents as the Representatives may reasonably request.
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(k) Subsequent to the Execution Time, there shall not have been any decrease in the rating of any of the Company’s debt securities by any “nationally recognized statistical rating organization” (as defined for purposes of Rule 3(a)(62) under the Exchange Act) or any notice given of any intended or potential decrease in any such rating or of a possible change in any such rating that does not indicate the direction of the possible change.
(l) The Securities shall have been listed and admitted and authorized for trading on Nasdaq, and reasonably satisfactory evidence of such actions shall have been provided to the Representatives.
(m) At the Execution Time, the Company shall have furnished to the Representatives a lock-up letter substantially in the form of Exhibit A hereto from each executive officer and director of the Company and the stockholders of the Company set forth on Exhibit B addressed to the Representatives.
If any of the conditions specified in this Section 6 shall not have been fulfilled when and as provided in this Agreement, or if any of the opinions and certificates mentioned above or elsewhere in this Agreement shall not be reasonably satisfactory in form and substance to the Representatives and counsel for the Underwriters, this Agreement and all obligations of the Underwriters hereunder may be canceled at, or at any time prior to, the Closing Date by the Representatives. Notice of such cancellation shall be given to the Company in writing or by telephone or facsimile confirmed in writing.
The documents required to be delivered by this Section 6 shall be delivered electronically to Cooley LLP, counsel for the Underwriters, on the Closing Date.
7. Reimbursement of Underwriters’ Expenses. If the sale of the Securities provided for herein is not consummated because any condition to the obligations of the Underwriters set forth in Section 6 hereof is not satisfied, because of any termination pursuant to Section 10(i) hereof or because of any refusal, inability or failure on the part of the Company to perform any agreement herein or comply with any provision hereof other than by reason of a default by any of the Underwriters, the Company will reimburse the Underwriters severally through Jefferies LLC on demand for all expenses (including reasonable and documented fees and disbursements of counsel) that shall have been incurred by them in connection with the proposed purchase and sale of the Securities.
8. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless each Underwriter, the directors, officers, employees, affiliates and agents of each Underwriter and each person who controls any Underwriter within the meaning of either the Securities Act or the Exchange Act against any and all losses, claims, damages or liabilities, joint or several, to which they or any of them may become subject under the Securities Act, the Exchange Act or other Federal or state statutory law or regulation, at common law or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement
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of a material fact contained in the Registration Statement for the registration of the Securities as originally filed or in any amendment thereof, or included in the Base Prospectus, any Preliminary Prospectus Supplement, the Final Prospectus Supplement, or any Issuer Free Writing Prospectus or in any amendment thereof or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and agrees to reimburse each such indemnified party, as incurred, for any documented legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the Company will not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon any such untrue statement or alleged untrue statement or omission or alleged omission made therein in reliance upon and in conformity with written information furnished to the Company by or on behalf of any Underwriter through the Representatives specifically for inclusion therein. This indemnity agreement will be in addition to any liability which the Company may otherwise have.
(b) Each Underwriter severally and not jointly agrees to indemnify and hold harmless the Company, each of its directors, each of its officers who signs the Registration Statement, and each person who controls the Company within the meaning of either the Securities Act or the Exchange Act, to the same extent as the foregoing indemnity from the Company to each Underwriter, but only with reference to written information relating to such Underwriter furnished to the Company by or on behalf of such Underwriter through the Representatives specifically for inclusion in the documents referred to in the foregoing indemnity. This indemnity agreement will be in addition to any liability which any Underwriter may otherwise have. The Company acknowledges that the statements set forth (i) in the first two sentences of the first paragraph under the heading section entitled “Commissions and Expenses” and (ii) the first through fourth paragraphs under the section entitled “Stabilization”, in each case, under the caption “Underwriting” in any Preliminary Prospectus Supplement and the Final Prospectus Supplement constitute the only information furnished in writing by or on behalf of the several Underwriters for inclusion in any Preliminary Prospectus Supplement, the Final Prospectus Supplement or any Issuer Free Writing Prospectus.
(c) Promptly after receipt by an indemnified party under this Section 8 of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Section 8, notify the indemnifying party in writing of the commencement thereof; but the failure so to notify the indemnifying party (i) will not relieve it from liability under paragraph (a) or (b) above unless and to the extent it did not otherwise learn of such action and such failure results in the forfeiture by the indemnifying party of substantial rights and defenses and (ii) will not, in any event, relieve the indemnifying party from any obligations to any indemnified party other than the indemnification obligation provided in paragraph (a) or (b) above. The indemnifying party shall be entitled to appoint counsel of the indemnifying party’s choice at the indemnifying party’s expense to represent the indemnified party in any action for which indemnification is sought (in which case the indemnifying party shall not thereafter be responsible for the fees and expenses of any
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separate counsel retained by the indemnified party or parties except as set forth below); provided, however, that such counsel shall be satisfactory to the indemnified party. Notwithstanding the indemnifying party’s election to appoint counsel to represent the indemnified party in an action, the indemnified party shall have the right to employ separate counsel (including local counsel), and the indemnifying party shall bear the reasonable fees, costs and expenses of such separate counsel if (i) the use of counsel chosen by the indemnifying party to represent the indemnified party would present such counsel with a conflict of interest, (ii) the actual or potential defendants in, or targets of, any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that there may be legal defenses available to it and/or other indemnified parties which are different from or additional to those available to the indemnifying party, (iii) the indemnifying party shall not have employed counsel satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice of the institution of such action or (iv) the indemnifying party shall authorize the indemnified party to employ separate counsel at the expense of the indemnifying party. An indemnifying party will not, without the prior written consent of the indemnified parties, settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified parties are actual or potential parties to such claim or action) unless such settlement, compromise or consent (i) includes an unconditional release of each indemnified party from all liability arising out of such claim, action, suit or proceeding and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act, by or on behalf of any indemnified party.
(d) In the event that the indemnity provided in paragraph (a), (b) or (c) of this Section 8 is unavailable to or insufficient to hold harmless an indemnified party for any reason, the Company and the Underwriters severally agree to contribute to the aggregate losses, claims, damages and liabilities (including legal or other expenses reasonably incurred in connection with investigating or defending the same) (collectively, “Losses”) to which the Company and one or more of the Underwriters may be subject in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and by the Underwriters on the other from the offering of the Securities. If the allocation provided by the immediately preceding sentence is unavailable for any reason, the Company and the Underwriters severally shall contribute in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company on the one hand and of the Underwriters on the other in connection with the statements or omissions which resulted in such Losses as well as any other relevant equitable considerations. Benefits received by the Company shall be deemed to be equal to the total net proceeds from the offering (before deducting expenses) received by it, and benefits received by the Underwriters shall be deemed to be equal to the total underwriting discounts and commissions, in each case as set forth on the cover page of the Final Prospectus Supplement. Relative fault shall be determined by reference to, among other things, whether any untrue or any alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information provided by the Company on the one hand or the Underwriters on the other, the intent of the parties and their relative knowledge, access to information and opportunity to correct or
29
prevent such untrue statement or omission. The Company and the Underwriters agree that it would not be just and equitable if contribution were determined by pro rata allocation or any other method of allocation which does not take account of the equitable considerations referred to above. Notwithstanding the provisions of this paragraph (d), in no event shall an Underwriter be required to contribute any amount in excess of the amount by which the total underwriting discounts and commissions received by such Underwriter with respect to the offering of the Securities exceeds the amount of any damages that such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. Notwithstanding the provisions of this paragraph (d), no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 8, each person who controls an Underwriter within the meaning of either the Securities Act or the Exchange Act and each director, officer, employee, affiliate and agent of an Underwriter shall have the same rights to contribution as such Underwriter, and each person who controls the Company within the meaning of either the Securities Act or the Exchange Act, each officer of the Company who shall have signed the Registration Statement and each director of the Company shall have the same rights to contribution as the Company, subject in each case to the applicable terms and conditions of this paragraph (d).
9. Default by an Underwriter. If any one or more Underwriters shall fail to purchase and pay for any of the Securities agreed to be purchased by such Underwriter or Underwriters hereunder and such failure to purchase shall constitute a default in the performance of its or their obligations under this Agreement, the remaining Underwriters shall be obligated severally to take up and pay for (in the respective proportions which the amount of Securities set forth opposite their names in Schedule II hereto bears to the aggregate amount of Securities set forth opposite the names of all the remaining Underwriters) the Securities which the defaulting Underwriter or Underwriters agreed but failed to purchase; provided, however, that in the event that the aggregate amount of Securities which the defaulting Underwriter or Underwriters agreed but failed to purchase shall exceed 10% of the aggregate amount of Securities set forth in Schedule II hereto, the remaining Underwriters shall have the right to purchase all, but shall not be under any obligation to purchase any, of the Securities, and if such non-defaulting Underwriters do not purchase all the Securities, this Agreement will terminate without liability to any non-defaulting Underwriter or the Company. In the event of a default by any Underwriter as set forth in this Section 9, the Closing Date shall be postponed for such period, not exceeding five Business Days, as the Representatives shall determine in order that the required changes in the Registration Statement and the Final Prospectus Supplement or in any other documents or arrangements may be effected. Nothing contained in this Agreement shall relieve any defaulting Underwriter of its liability, if any, to the Company and any non-defaulting Underwriter for damages occasioned by its default hereunder.
10. Termination. This Agreement shall be subject to termination in the absolute discretion of the Representatives, by notice given to the Company prior to delivery of and payment for the Securities, if at any time prior to such delivery and payment (i) trading in the Company’s Common Stock shall have been suspended by the SEC or Nasdaq or trading in securities generally on the New York Stock Exchange or Nasdaq shall have been suspended or
30
limited or minimum prices shall have been established on either of such exchanges, (ii) a banking moratorium shall have been declared either by Federal or New York State authorities, (iii) there shall have occurred a material disruption in commercial banking or securities settlement or clearance services or (iv) there shall have occurred any outbreak or escalation of hostilities, declaration by the United States of a national emergency or war, or other calamity or crisis the effect of which on financial markets is such as to make it, in the sole judgment of the Representatives, impractical or inadvisable to proceed with the offering or delivery of the Securities as contemplated by any Preliminary Prospectus Supplement or the Final Prospectus Supplement (exclusive of any amendment or supplement thereto).
11. Representations and Indemnities to Survive. The respective agreements, representations, warranties, indemnities and other statements of the Company or its officers and of the Underwriters set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation made by or on behalf of any Underwriter or the Company or any of the officers, directors, employees, agents, affiliates or controlling persons referred to in Section 8 hereof, and will survive delivery of and payment for the Securities. The provisions of Sections 7 and 8 hereof shall survive the termination or cancellation of this Agreement.
12. Notices. All communications hereunder will be in writing and effective only on receipt, and, if sent to the Representatives, will be mailed, delivered, telefaxed to c/o Jefferies LLC at 520 Madison Avenue, New York, New York 10022, Attention: General Counsel, facsimile number: +1 (646) 619-4437; and Piper Sandler & Co. at 350 North 5th Street, Suite 1000, Minneapolis, MN 55401, Attention: General Counsel, LegalCapMarkets@psc.com; or, if sent to Lexicon Pharmaceuticals, Inc., will be mailed, delivered or telefaxed to 2445 Technology Forest Blvd., 11th Floor, The Woodlands, Texas 77381, Attention: General Counsel.
13. Successors. This Agreement will inure to the benefit of and be binding upon the parties hereto and their respective successors and the officers, directors, employees, agents and controlling persons referred to in Section 8 hereof, and no other person will have any right or obligation hereunder.
14. Jurisdiction. The Company agrees that any suit, action or proceeding against the Company brought by any Underwriter, the directors, officers, employees, affiliates and agents of any Underwriter, or by any person who controls any Underwriter, arising out of or based upon this Agreement or the transactions contemplated hereby may be instituted in any State or U.S. federal court in The City of New York and County of New York, and waives any objection which it may now or hereafter have to the laying of venue of any such proceeding, and irrevocably submits to the non-exclusive jurisdiction of such courts in any suit, action or proceeding.
15. Recognition of the U.S. Special Resolution Regimes.
(a) In the event that any Underwriter that is a Covered Entity becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer from such Underwriter of this Agreement, and any interest and obligation in or under this Agreement, will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if this Agreement, and any such interest and obligation, were governed by the laws of the United States or a state of the United States.
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(b) In the event that any Underwriter that is a Covered Entity or a BHC Act Affiliate of such Underwriter becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under this Agreement that may be exercised against such Underwriter are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if this Agreement were governed by the laws of the United States or a state of the United States.
As used in this Section 15, “BHC Act Affiliate” has the meaning assigned to the term “affiliate” in, and shall be interpreted in accordance with, 12 U.S.C. § 1841(k); “Covered Entity” means any of the following: (i) a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b), (ii) a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b) or (iii) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b); “Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable; and “U.S. Special Resolution Regime” means each of (i) the Federal Deposit Insurance Act and the regulations promulgated thereunder and (ii) Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder.
16. No Fiduciary Duty. The Company hereby acknowledges that (a) the purchase and sale of the Securities pursuant to this Agreement is an arm’s-length commercial transaction between the Company, on the one hand, and the Underwriters and any affiliate through which it may be acting, on the other, (b) the Underwriters are acting as principal and not as an agent or fiduciary of the Company and (c) the Company’s engagement of the Underwriters in connection with the offering and the process leading up to the offering is as independent contractors and not in any other capacity. Furthermore, the Company agrees that it is solely responsible for making its own judgments in connection with the offering (irrespective of whether any of the Underwriters has advised or is currently advising the Company on related or other matters). The Company agrees that it will not claim that the Underwriters have rendered advisory services of any nature or respect, or owe an agency, fiduciary or similar duty to the Company, in connection with such transaction or the process leading thereto.
17. Integration. This Agreement supersedes all prior agreements and understandings (whether written or oral) between the Company and the Underwriters, or any of them, with respect to the subject matter hereof.
18. Applicable Law. This Agreement will be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed within the State of New York.
19. Waiver of Jury Trial. The Company hereby 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.
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20. Counterparts. This Agreement may be signed in one or more counterparts, each of which shall constitute an original and all of which together shall constitute one and the same agreement. Counterparts may be delivered via facsimile, electronic mail (including any electronic signature covered by the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions Act, the Electronic Signatures and Records Act or other applicable law, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
21. Headings. The section headings used herein are for convenience only and shall not affect the construction hereof.
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If the foregoing is in accordance with your understanding of our agreement, please sign and return to us the enclosed duplicate hereof, whereupon this letter and your acceptance shall represent a binding agreement among the Company and the several Underwriters.
| Very truly yours, | ||
| LEXICON PHARMACEUTICALS, INC. | ||
| By: | /s/ Scott Coiante | |
| Name: | Scott Coiante | |
| Title: | Senior Vice President and Chief Financial Officer | |
[Signature Page to Underwriting Agreement]
| The foregoing Agreement is hereby confirmed and accepted as of the date specified in Schedule I hereto. | ||
| JEFFERIES LLC | ||
| By: | /s/ Jack Fabbri | |
| Name: | Jack Fabbri | |
| Title: | Managing Director | |
| PIPER SANDLER & CO. | ||
| By: | /s/ Michael Bassett | |
| Name: | Michael Bassett | |
| Title: | Managing Director | |
| For themselves and the other several Underwriters named in Schedule II to the foregoing Agreement. | ||
[Signature Page to Underwriting Agreement]
SCHEDULE I
Underwriting Agreement, dated January 29, 2026
Registration Statement No. 333-281208
Representatives: Jefferies LLC and Piper Sandler & Co.
Title, Purchase Price and Description of Securities:
Title: Common Stock, par value $0.001
Number of Underwritten Securities to be sold by the Company: 32,000,000
Number of Option Securities to be sold by the Company: 4,800,000
Price per Share to Public (include accrued dividends, if any): $1.3000
Price per Share to the Underwriters – total: $1.2220
Other provisions: None.
Closing Date, Time and Location:
Type of Offering: Non-Delayed
The Company has agreed to sell in a concurrent private placement (i) 22,400,000 shares of Common Stock at a price per share of $1.30 and (ii) 367,145.12 shares of series b convertible preferred stock, which will be convertible into 18,357,256 shares of Common Stock, at a price of $65.00 per share of series b convertible preferred stock. To the extent the Underwriters exercise their option to purchase additional shares of Common Stock in full, the purchaser in the concurrent private placement has the option to purchase 94,854.88 shares of series b convertible preferred stock, which will be convertible into 4,742,744 shares of Common Stock, at a price of $65.00 per share of series b convertible stock.
.
I-1
SCHEDULE II
| Underwriters |
Number of Underwritten Securities to be Purchased |
|||
| Jefferies LLC |
16,000,000 | |||
| Piper Sandler & Co. |
12,800,000 | |||
| H.C. Wainwright & Co., LLC |
3,200,000 | |||
|
|
|
|||
| Total |
32,000,000 | |||
|
|
|
|||
II-1
SCHEDULE III
Schedule of Free Writing Prospectuses included in the Pricing Disclosure Package
| 1. | Press Release, dated January 29, 2026, titled “Lexicon Announces Proposed Public Offering of Common Stock” |
III-1
EXHIBIT A
Form of Lock-up Agreement
___________________, 2026
Jefferies LLC
Piper Sandler & Co.
As Representatives of the several Underwriters
| c/o | Jefferies LLC |
520 Madison Avenue
New York, New York 10022
| c/o | Piper Sandler & Co. |
800 Nicollet Mall
Minneapolis, Minnesota 55402
Ladies and Gentlemen:
The undersigned understands that Jefferies LLC (“Jefferies”) and Piper Sandler & Co. (together with Jefferies, the “Representatives”) propose to enter into an Underwriting Agreement (the “Underwriting Agreement”) with Lexicon Pharmaceuticals, Inc., a Delaware corporation (the “Company”), providing for the public offering (the “Offering”) by the several Underwriters listed in Schedule II to the Underwriting Agreement (the “Underwriters”) of shares (the “Shares”) of the common stock, par value $0.001 per share, of the Company (the “Common Stock”).
To induce the Underwriters that may participate in the Offering to continue their efforts in furtherance thereof, the undersigned hereby agrees not to, during the period commencing on the date hereof and ending 60 days after the date of the final prospectus supplement relating to the Offering (the “Prospectus”) (such period, the “Lock-Up Period”), without the prior written consent of the Representatives on behalf of the Underwriters, (1) offer, pledge, hedge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock beneficially owned (as such term is used in Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), by the undersigned or any other securities so owned convertible into or exercisable or exchangeable for Common Stock or (2) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Common Stock, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of Common Stock or such other securities, in cash or otherwise. The foregoing sentence shall not apply to (a) transactions relating to shares of Common Stock or other securities acquired in open market transactions after the completion of the Offering, provided that no filing under Section 16(a) of the Exchange Act shall be required or shall be voluntarily made in connection with subsequent sales of Common Stock or other securities acquired in such open market transactions,
(b) any surrender of shares of Common Stock (or options to purchase shares of Common Stock) to the Company by the undersigned in satisfaction of (i) any federal, state or local taxes required by law to be withheld with respect to the vesting of shares of Common Stock or the exercise of stock options to purchase Common Stock and/or (ii) the exercise price payable to the Company with respect to the exercise of stock options to purchase Common Stock, in each case granted under a stock incentive plan or stock purchase plan of the Company described in the Prospectus or any document incorporated by reference therein and in accordance with the terms of any such instrument as in effect on or before the date hereof, (c) transfers of shares of Common Stock or any security convertible into Common Stock as a bona fide gift, (d) distributions of shares of Common Stock or any security convertible into Common Stock to limited partners, members, stockholders or equityholders of the undersigned, (e) transfers to immediate family of the undersigned, to a trust all of the beneficiaries of which are the undersigned and/or members of his or her immediate family or to a corporation, partnership, limited partnership or limited liability company all of the stockholders, partners and members of which are the undersigned and/or members of his or her immediate family, in each case for estate planning purposes, (f) transfers by will or other testamentary document, or intestacy; provided that (i) in the case of any transfer or distribution pursuant to clauses (c) – (f) each donee, distributee or transferee shall sign and deliver a lock-up agreement substantially in the form of this agreement and (ii) in the case of any surrender, transfer or distribution pursuant to clauses (b) – (f), no filing under Section 16(a) of the Exchange Act, reporting a reduction in beneficial ownership of shares of Common Stock, shall be required or shall be voluntarily made during the Lock-Up Period, (g) any transfers, surrenders or distributions, or offers to take any such action, in connection with a bona fide third party takeover bid made to all or substantially all holders of Common Stock or any other acquisition, merger, consolidation, stock exchange or other similar transaction whereby all or substantially all of the Common Stock is acquired by a third party; provided that in the event the third party takeover bid or other acquisition, merger, consolidation, stock exchange or other similar transaction is not completed, the undersigned shall remain subject to the restrictions contained herein, (h) the establishment of a trading plan pursuant to Rule 10b5-1 under the Exchange Act for the transfer of shares of Common Stock; provided that such plan does not provide for the transfer of Common Stock during the Lock-Up Period, except as otherwise permitted herein, and no public announcement or filing under the Exchange Act regarding the establishment of such plan shall be required of or voluntarily made by or on behalf of the undersigned or the Company during the Lock-Up Period or (i) by operation of law, such as pursuant to a qualified domestic order, divorce settlement, divorce decree or separation agreement; provided that if any filing under Section 16(a) of the Exchange Act shall be legally required during the Lock-Up Period, such filing, report or announcement shall clearly indicate in the footnotes thereto the nature and conditions of such transfer. For purposes of this agreement, “immediate family” shall mean spouse, lineal descendant, father, mother, brother or sister of the transferor.
In addition, the undersigned agrees that, without the prior written consent of the Representatives on behalf of the Underwriters, it will not, during the period commencing on the date hereof and ending 60 days after the date of the Prospectus, make any demand for or exercise any right with respect to, the registration of any shares of Common Stock or any security convertible into or exercisable or exchangeable for Common Stock. The undersigned also agrees and consents to the entry of stop transfer instructions with the Company’s transfer agent and registrar against the transfer of the undersigned’s shares of Common Stock except in compliance with the foregoing restrictions.
2
The undersigned acknowledges and agrees that none of the Underwriters has made any recommendation or provided any investment or other advice to the undersigned with respect to this agreement or the subject matter hereof, and the undersigned has consulted its own legal, accounting, financial, regulatory, tax and other advisors with respect to this agreement and the subject matter hereof to the extent the undersigned has deemed appropriate. The undersigned further acknowledges and agrees that, although the Underwriters may provide certain Regulation Best Interest and Form CRS disclosures or other related documentation to you in connection with the Offering, the Underwriters are not making a recommendation to you to participate in the Offering or sell any shares at the price determined in the Offering, and nothing set forth in such disclosures or documentation is intended to suggest that any Underwriter is making such a recommendation.
This agreement may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com or www.echosign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
This agreement shall automatically terminate, and the undersigned shall be automatically released from its obligations hereunder, upon the earliest to occur, if any, of (1) the execution of the Underwriting Agreement in connection with the Offering shall not have occurred on or before February 20, 2026, (2) the closing of the Offering shall not have occurred on or before February 27, 2026, (3) the Underwriting Agreement (other than the provisions thereof which survive termination) shall terminate or be terminated prior to payment for and delivery of the Common Stock to be sold thereunder or (4) the Representatives, on behalf of the Underwriters, advise the Company, or the Company advises the Representatives, in writing, prior to the execution of the Underwriting Agreement, that they have determined not to proceed with the Offering.
The undersigned hereby represents and warrants that the undersigned has full power, capacity and authority to enter into this agreement. This agreement is irrevocable and will be binding on the undersigned and the successors, heirs, personal representatives and assigns of the undersigned.
This agreement shall be governed by, and construed in accordance with, the laws of the State of New York.
3
| Very truly yours, | ||
|
| ||
| Name of Securityholder (Print exact name) | ||
| By: | ||
| Signature | ||
| If not signing in an individual capacity: | ||
|
| ||
| Name of Authorized Signatory (Print) | ||
|
| ||
| Title of Authorized Signatory (Print) | ||
| (indicate capacity of person signing if signing as custodian, trustee, or on behalf of an entity) | ||
[Signature Page to Lock-Up Agreement]
EXHIBIT B
Stockholders
| 1. | Invus, L.P. |
| 2. | Invus Public Equities, L.P. |
| 3. | Invus Advisors, L.L.C. |
| 4. | Invus Public Equities Advisors, L.L.C. |
| 5. | Invus Global Management, LLC |
| 6. | Siren, L.L.C. |
| 7. | Artal Participations S.à.r.l. |
| 8. | Ulys, L.L.C. |
| 9. | Invus US Partners LLC |
Exhibit 3.3
CERTIFICATE OF DESIGNATIONS
OF
SERIES B CONVERTIBLE PREFERRED STOCK
OF
LEXICON PHARMACEUTICALS, INC.
February 2, 2026
The undersigned, Brian T. Crum, Senior Vice President, General Counsel and Secretary of Lexicon Pharmaceuticals, Inc., a corporation organized and existing under the laws of the State of Delaware (the “Corporation”), in accordance with the provisions of Section 151(g) of the General Corporation Law of the State of Delaware (the “DGCL”), hereby certifies as follows:
1. Pursuant to the authority expressly vested in the Board of Directors of the Corporation (the “Board”) by the Sixth Amended and Restated Certificate of Incorporation of the Corporation (the “Charter”), the Board is authorized to provide for the issuance of up to 5,000,000 shares of preferred stock of the Corporation, par value of $0.01 per share (the “Preferred Stock”), of which none are presently issued and outstanding, by filing a certificate of the voting powers (if any), designations, preferences and relative, participating, optional or other rights, if any, and the qualifications, limitations or restrictions thereof, if any, pursuant to the applicable provisions of the DGCL, as are stated and expressed in the resolution or resolutions providing for the issuance thereof adopted by the Board.
2. Pursuant to Section 151 of the DGCL and the authority expressly vested by the Charter, the following resolutions were duly adopted by the Board on January 26, 2026:
WHEREAS, the Charter provides for the issuance from time to time of Preferred Stock in one or more series;
WHEREAS, the Board is authorized to fix the voting powers (if any), designations, preferences and relative, participating, optional or other rights, if any, and the qualifications, limitations or restrictions thereof, if any, pursuant to the applicable provisions of the DGCL; and
WHEREAS, it is the desire of the Board, pursuant to its authority as aforesaid, to create, provide for the issuance of, fix the voting powers (if any), designations, preferences and relative, participating, optional or other rights, if any, and the qualifications, limitations or restrictions of, if any, and fix other matters relating to, a series of the Preferred Stock designated as “Series B Convertible Preferred Stock,” which shall consist of 462,000 shares, par value of $0.01 per share.
NOW, THEREFORE, BE IT RESOLVED, that the Board does hereby create and provide for the issuance of a series of Series B Convertible Preferred Stock and does hereby fix the voting powers (if any), designations, preferences and relative, participating, optional or other rights, if any, and the qualifications, limitations or restrictions thereof, if any, and other matters relating to the shares of Series B Convertible Preferred Stock as follows:
Section 1. Liquidation.
(a) In the event of any liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary (a “Liquidation”), after payment or provision for payment of the debts and other liabilities of the Corporation and payment or setting aside for payment of any preferential amount due to the holders of any other class or series of stock, the holders of the Series B Convertible Preferred Stock shall be entitled to receive a payment of $0.01 per share of Series B Convertible Preferred Stock in preference (the “Liquidation Preference”) to the holders of, and before any payment or distribution is made on, any stock ranking junior to the Series B Convertible Preferred Stock, including, without limitation, on the Corporation’s common stock, par value of $0.01 per share (the “Common Stock”). Following the payment of the Liquidation Preference, the holders of the Series B Convertible Preferred Stock shall be entitled to receive the amount that such holders would have been entitled to receive if the Series B Convertible Preferred Stock were fully converted (disregarding for such purpose any conversion limitations hereunder) to Common Stock at the Conversion Ratio (as defined below), which amounts shall be paid pari passu with all holders of Common Stock.
(b) In the event the assets of the Corporation available for distribution to the holders of shares of Series B Convertible Preferred Stock upon any liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, shall be insufficient to pay in full all amounts to which such holders are entitled pursuant to Section 1(a), proportionate distributable amounts shall be paid on account of the shares of Series B Convertible Preferred Stock, equally and ratably, in proportion to the full distributable amounts for which holders of Series B Convertible Preferred Stock and of any stock that ranks on parity with the Series B Convertible Preferred Stock are entitled upon such liquidation, dissolution or winding up.
(c) Any distribution in connection with the liquidation, dissolution or winding up of the Corporation, or any bankruptcy or insolvency proceeding, shall be made in cash to the extent possible. Whenever any such distribution shall be paid in property other than cash, the value of such distribution shall be the fair market value of such property as determined in good faith by the Board.
Section 2. Voting. Except as provided in this Section 2, holders of Series B Convertible Preferred Stock shall not be entitled to vote on matters presented to the holders of Common Stock for approval. Notwithstanding the foregoing, as long as any shares of Series B Convertible Preferred Stock are outstanding, the Corporation shall not, without the affirmative vote of holders of two thirds (2/3) of the then outstanding shares of Series B Convertible Preferred Stock, voting as a separate class, (a) either directly or indirectly, by amendment, merger, consolidation or otherwise, alter, amend or repeal any provisions of this Certificate of Designations (as defined below), (b) authorize or create any class of equity securities ranking as to distribution of assets upon Liquidation senior to the Series B Convertible Preferred Stock or (c) enter into any agreement with respect to any of the foregoing. Any vote required or permitted under Section 2 may be taken at a meeting of the holders of Series B Convertible Preferred Stock or through the execution of an action by written consent in lieu of such meeting, provided that the consent is executed by holders of Series B Convertible Preferred Stock representing at least two thirds (2/3) of the outstanding shares of Series B Convertible Preferred Stock.
Section 3. Automatic Conversion. Except as provided in this Section 3, each share of Series B Convertible Preferred Stock shall automatically, and without any further action on the part of the holder thereof, convert into fifty shares of Common Stock (as it may be adjusted in accordance with Section 7(b), the “Conversion Ratio”) immediately following the satisfaction of all of the following conditions: (i) the approval of the Seventh Amended and Restated Certificate of Incorporation of the Corporation (the “New Charter”) by the stockholders of the Corporation (the “Stockholder Approval”), which shall increase the total authorized shares of Common Stock to a number (A) at least equivalent to the number required to permit the immediate conversion of all of the then outstanding shares of Series B Convertible Preferred Stock pursuant to the terms of this Certificate of Designations, without violating the organizational documents of the Corporation and (B) approved by all of the holders of Series B Convertible Preferred Stock (which approval shall not be unreasonably withheld, conditioned or delayed) (the “Authorized Share Increase”), (ii) the adoption of the New Charter by the Board, and (iii) the filing and acceptance of the New Charter with and by the Secretary of State of the State of Delaware, which shall be filed the same day as the date of Stockholder Approval (the “Conversion”); provided, however, no such automatic conversion shall be permitted until all consents, approvals or clearances with respect to, or termination or expiration of any applicable waiting period (and any extensions thereof) imposed under, The Hart Scott Rodino Antitrust Improvements Act of 1976, as amended (such consent, approval or clearance, “HSR Approval”) required for the conversion by the holders of Series B Preferred Stock, if any, shall have been obtained, received, deemed to have been received or terminated or expired as the case may be. The holders of the Series B Convertible Preferred Stock shall inform the Corporation when HSR Approval has been received. The Corporation shall within one (1) business day of the later of Stockholder Approval and confirmation from the holders of the Series B Convertible Preferred Stock that any necessary HSR Approval has been received, inform each holder of Series B Convertible Preferred Stock that the conditions to the Conversion have been satisfied and the effective date of the Conversion. The shares of Common Stock to be issued upon Conversion (the “Conversion Shares”) shall be issued as follows: (a) Series B Convertible Preferred Stock that is registered in book-entry form shall be automatically cancelled on the date of Conversion and converted into the corresponding Conversion Shares, which shares shall be issued in book-entry form and without any action on the part of the holders thereof and shall be delivered to the holders thereof within two (2) business days of the effectiveness of the Conversion; (b) Series B Convertible Preferred Stock that is issued in certificated form shall be deemed converted into the corresponding Conversion Shares on the date of Conversion and the holder’s rights as a holder of such shares of Series B Convertible Preferred Stock shall cease and terminate on such date, excepting only the right to receive the Conversion Shares within two (2) business Days of the effectiveness of the Conversion. The holder of Series B Convertible Preferred Stock shall surrender any stock certificate to the Corporation for cancellation within three (3) business days of the date the Conversion. Notwithstanding the cancellation of the Series B Convertible Preferred Stock upon Conversion, holders of Series B Convertible Preferred Stock shall continue to have any remedies provided herein or otherwise available at law or in equity to such holder because of a failure by the Corporation to comply with the terms of this Certificate of Designations, and in all cases, the holder shall retain all of its rights and remedies for the Corporation’s failure to convert the Series B Convertible Preferred Stock pursuant hereto.
Section 4. Consolidation, Merger, etc. In case the Corporation shall enter into any consolidation, merger, combination or other transaction in which the shares of Common Stock are exchanged for or changed into other stock or securities, cash and/or any other property (a “Fundamental Transaction”), then in any such case the shares of Series B Convertible Preferred Stock shall at the same time be similarly exchanged or changed in an amount per share equal to the Conversion Ratio multiplied by the aggregate amount of stock, securities, cash and/or any other property (payable in kind), as the case may be, into which or for which each share of Common Stock is changed or exchanged; provided, however, that in connection with any Fundamental Transaction contemplated by this Section 4 solely among or between the Corporation and one or more subsidiaries of the Corporation, each share of Series B Convertible Preferred Stock shall be exchanged for a share of senior preferred stock in the ultimate surviving parent entity in such transaction, having substantially the same designations, relative rights and preferences as the Series B Convertible Preferred Stock. To the extent necessary to effectuate the foregoing provisions, any successor to the Corporation or surviving entity in such Fundamental Transaction shall file a new certificate of designations with the same terms and conditions and issue to the holders of Series B Convertible Preferred Stock new preferred stock consistent with the foregoing provisions and evidencing such holders’ right to convert such preferred stock into such consideration. The terms of any agreement to which the Corporation is a party and pursuant to which such Fundamental Transaction is effected shall include terms requiring any such successor or surviving entity to comply with the provisions of this Section 4 and ensuring that the Series B Convertible Preferred Stock (or any such replacement security) will be similarly adjusted upon any subsequent transaction analogous to a Fundamental Transaction. The Corporation shall cause to be delivered to each holder of Series B Convertible Preferred Stock, at its last address as it shall appear upon the stock books of the Corporation, written notice of any Fundamental Transaction at least five (5) calendar days prior to the date on which such Fundamental Transaction is expected to become effective or close.
Section 5. Other Provisions.
(a) Best Efforts. The Corporation shall use its best efforts to effect the automatic conversion as provided in Section 3 above, which, for the avoidance of doubt, shall include obtaining the vote to effect the Authorized Share Increase.
(b) Record Holders. The Corporation and its transfer agent, if any, for the Series B Convertible Preferred Stock may deem and treat the record holder of any shares of Series B Convertible Preferred Stock as reflected on the books and records of the Corporation as the sole, true and lawful owner thereof for all purposes, and neither the Corporation nor any such transfer agent shall be affected by any notice to the contrary.
(c) Fractional Shares. No fractional shares of Common Stock shall be issued upon conversion of shares of the Series B Convertible Preferred Stock. Instead of any fractional shares of Common Stock that would otherwise be issuable upon conversion of any shares of the Series B Convertible Preferred Stock, the Corporation shall pay cash equal to such fraction multiplied by the closing price of a share of Common Stock on The Nasdaq Stock Market on such date.
(d) Tax Matters.
| (i) | The Corporation and its paying agent shall be entitled to withhold taxes on all payments made to the relevant holder of the Series B Convertible Preferred Stock or Common Stock issued upon conversion of the Series B Convertible Preferred Stock to the extent required by law. The Corporation and its paying agent shall be entitled to satisfy any required withholding tax on non-cash payments (including deemed payments and in connection with any conversion) through cash dividends, shares of Common Stock or sales proceeds paid, subsequently paid or credited (or on the consideration otherwise delivered with respect to such holder or its successors or assigns). Notwithstanding the foregoing, the Corporation agrees that absent a change in applicable law, (i) no U.S. federal withholding shall apply to a conversion of the Series A Preferred Stock into Common Stock pursuant to the terms hereof and (ii) it will not treat the Series B Convertible Preferred Stock as “preferred stock” within the meaning of Section 305 of the Internal Revenue Code of 1986, as amended, and U.S. Treasury Regulations Section 1.305-5. |
| (ii) | The Corporation shall pay any and all issue, documentary, stamp and other similar taxes, excluding any income, franchise, property or similar taxes, that may be payable in respect of any issue or delivery of Common Stock on conversion of Series B Convertible Preferred Stock pursuant hereto. However, a holder of the Series B Convertible Preferred Stock shall pay any tax that is due because Common Stock issuable upon conversion of Series B Convertible Preferred Stock are issued in a name other than such holder’s name. |
Section 6. Restriction and Limitations. Except as required by law so long as any shares of Series B Convertible Preferred Stock remain outstanding, the Corporation shall not, without the written consent of the holders of at least two-thirds (2/3) of the then outstanding shares of the Series B Convertible Preferred Stock, take any action which would adversely and materially affect any of the preferences, limitations or relative rights of the holders of Series B Convertible Preferred Stock.
Section 7. Dividends and Stock Splits.
(a) The holders of the Series B Convertible Preferred Stock shall be entitled to receive, with respect to any distribution of cash or other property made to holders of Common Stock, the amount that such holders of Series B Convertible Preferred Stock would have been entitled to receive if the Series B Convertible Preferred Stock were fully converted (disregarding for such purpose any conversion limitations hereunder) to Common Stock at the Conversion Ratio on the record date for such distribution.
(b) If the Corporation, at any time while shares of the Series B Convertible Preferred Stock are outstanding: pays a stock dividend or otherwise makes a distribution or distributions payable in shares of Common Stock or Common Stock equivalents, subdivides outstanding shares of Common Stock into a larger number of shares, or combines (including by way of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares, then the number of shares of Common Stock issuable upon conversion in Section 3 shall be modified by multiplying the Conversion Ratio by a fraction of which the numerator shall be the number of shares of Common Stock (excluding any treasury shares of the Corporation) outstanding immediately after
such event, and of which the denominator shall be the number of shares of Common Stock (excluding any treasury shares of the Corporation) outstanding immediately before such event. Any adjustment made pursuant to this Section 7 shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification. Successive adjustments in the Conversion Ratio shall be made whenever any event specified above shall occur.
RESOLVED, FURTHER, that the Chief Executive Officer, the president or any vice-president, and the secretary or any assistant secretary, of the Corporation be and they hereby are authorized and directed to prepare and file this Certificate of Designations of Preferences, Rights and Limitations (this “Certificate of Designations”) in accordance with the foregoing resolutions and the applicable provisions of the DGCL.
*********************
IN WITNESS WHEREOF, the undersigned has executed this Certificate of Designations as of the day and year first written above.
| /s/ Brian T. Crum |
| Brian T. Crum |
| Senior Vice President, General Counsel and Secretary |
SIGNATURE PAGE TO
CERTIFICATE OF DESIGNATIONS
Exhibit 5.1
February 2, 2026
Lexicon Pharmaceuticals, Inc.
800 Technology Forest Place
The Woodlands, TX 77381
Ladies and Gentlemen:
We have acted as counsel for Lexicon Pharmaceuticals, Inc., a Delaware corporation (the “Company”), with respect to certain legal matters in connection with the proposed issuance and sale by the Company of 32,000,000 shares, and an optional additional 4,800,000 shares (the “Shares”) of common stock, par value $0.001 (the “Common Stock”). The Shares are being offered, issued and sold pursuant to an Underwriting Agreement dated January 29, 2026 by and among the Company and Jefferies LLC and Piper Sandler & Co., as representatives for the several underwriters named in Schedule II thereto (the “Underwriting Agreement”).
We have participated in the preparation of a Prospectus Supplement dated January 29, 2026 (the “Prospectus Supplement”), forming part of a Registration Statement on Form S-3 filed with the Securities and Exchange Commission (the “SEC”) on August 2, 2024, and declared effective by the SEC on August 15, 2024 (File No. 333-281208) (the “Registration Statement”), which also contains a base prospectus (the “Base Prospectus” and, together with the Prospectus Supplement, the “Prospectus”). The Prospectus Supplement has been filed pursuant to Rule 424(b) promulgated under the Securities Act of 1933, as amended (the “Securities Act”).
In rendering the opinions set forth below, we have examined and relied upon (i) the Registration Statement and the Prospectus; (ii) the Sixth Amended and Restated Certificate of Incorporation of the Company, as amended to the date hereof; (iii) the Second Amended and Restated Bylaws of the Company, as amended to the date hereof; (iv) the Underwriting Agreement; (v) resolutions of the Board of Directors of the Company dated January 26, 2026, resolutions of the Pricing Committee of the Board of Directors of the Company dated January 26, 2026 and January 29, 2026 and resolutions of the Audit Committee of the Board of Directors dated January 29, 2026; and (vi) such other certificates and other instruments and documents as we consider appropriate for purposes of the opinions hereafter expressed.
In connection with this opinion, we have assumed that all Shares will be issued and sold in the manner stated in the Prospectus and the Underwriting Agreement.
Based upon the foregoing and subject to the assumptions, exceptions, limitations and qualifications set forth herein, we are of the opinion that the Shares, when issued and delivered against payment therefor in accordance with the Underwriting Agreement, will be validly issued, fully paid and non-assessable.
| Vinson & Elkins LLP Attorneys at Law Austin Dallas Denver Dubai Dublin Houston London Los Angeles New York Richmond San Francisco Tokyo Washington |
Texas Tower, 845 Texas Avenue, Suite 4700 Houston, TX 77002 Tel +1.713.758.2222 Fax +1.713.758.2346 velaw.com |
|
February 2, 2026 Page 2 |
The opinions expressed herein are qualified in the following respects:
A. We have assumed that (i) each document submitted to us for review is accurate and complete, each such document that is an original is authentic, each such document that is a copy conforms to an authentic original and all signatures on each such document are genuine, and (ii) each certificate from governmental officials reviewed by us is accurate, complete and authentic, and all official public records are accurate and complete.
B. This opinion is limited in all respects to the federal laws of the United States, the Delaware General Corporation Law and the Constitution of the State of Delaware, as interpreted by the courts of the State of Delaware and of the United States. We are expressing no opinion as to the effect of the laws of any other jurisdiction.
We hereby consent to the filing of this opinion as Exhibit 5.1 to the Company’s Current Report on Form 8-K dated on or about the date hereof, to the incorporation by reference of this opinion into the Registration Statement and to the reference to our firm under the caption “Legal Matters” in the Prospectus forming a part of the Registration Statement. In giving this consent, we do not hereby admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act.
| Very truly yours, |
| /s/ Vinson & Elkins L.L.P. |
| Vinson & Elkins L.L.P. |
Exhibit 10.1
PURCHASE AGREEMENT
January 29, 2026
Artal Participations S.à r.l.
44 rue de la Vallée
L-2661 Luxembourg
Luxembourg
Attention: Pierre Claudel
Lexicon Pharmaceuticals, Inc.
2445 Technology Forest Blvd., 11th Floor
The Woodlands, Texas 77381
Attn: Senior Vice President and General Counsel
Ladies and Gentlemen:
Reference is made to (a) that certain Underwriting Agreement (the “Underwriting Agreement”) being entered into by Lexicon Pharmaceuticals, Inc. (the “Company”) with the representatives of the underwriters named in Schedule II thereto (the “Underwriters”) concurrently with this Purchase Agreement (the “Agreement”) providing for the issuance by the Company to the Underwriters (the “Public Offering”) of 32,000,000 shares (the “Firm Shares”) of the Company’s common stock, par value $0.001 per share (the “Common Stock”), plus up to 4,800,000 additional shares of Common Stock (the “Option Shares”), that may be issued pursuant to the Underwriters’ option to purchase additional shares of Common Stock as provided for in Section 2(b) of the Underwriting Agreement, in each case, for sale in a public offering at a price to the public of $1.30 per share (the “Purchase Price”), (b) the Sixth Amended and Restated Certificate of Incorporation of the Company, dated May 10, 2024 (the “Certificate of Incorporation”) and (c) that certain Registration Rights Agreement, dated as of June 17, 2007 (as amended, supplemented or otherwise modified, the “Registration Rights Agreement”), by and between Invus, L.P. (“Invus”) and the Company. Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Underwriting Agreement.
In consideration of the mutual covenants and agreements herein contained, and intending to be legally bound hereby, pursuant to Section 12.01(c) of the Certificate of Incorporation and Section 2.02(a)(ii) of the Registration Rights Agreement, as applicable, (i) each of Artal Participations S.à r.l. (the “Investor”), Invus L.P., Invus US Partners LLC, Ulys, L.L.C., Invus, Invus Advisors, LLC, Invus Public Equities, L.P., Invus Public Equities Advisors, LLC, Invus Global Management, LLC, Siren, L.L.C. and Mr. Raymond Debbane (together with the Investor, the “Investor Group”), as applicable, hereby waives (a) its rights under Section 12.01 of the Certificate of Incorporation to purchase its Pro Rata Share (as defined in the Certificate of Incorporation) of the Firm Shares and Option Shares in connection with the Public Offering and (b) its rights to include in the Public Offering its Registrable Securities (as defined in the Registration Rights Agreement) pursuant to Section 2.02 of the Registration Rights Agreement, as applicable, and (ii) the Investor shall purchase, subject to the terms and conditions herein (the “Concurrent Private Placement” and, together with the Public Offering, the “Offering”), 22,400,000 shares of Common Stock (the “Investor Shares”).
| I. | The Investor Shares |
Subject to the satisfaction or waiver of the conditions described in Section IV, the Investor hereby agrees to purchase the Investor Shares from the Company at the Purchase Price. The total purchase price for the Investor Shares shall be equal to $29,120,000.00.
The closing of the sale of the Investor Shares shall take place concurrently with the closing of the sale of the Firm Shares under the Underwriting Agreement (the “Firm Closing Date”), (i) with payment for the Investor Shares to be made to the Company by wire transfer of immediately available funds on the Firm Closing Date and (ii) with delivery of the Investor Shares registered, as applicable, in the name of the Investor or its designees and otherwise free and clear of all liens, with any transfer or stamp taxes duly paid by the Company.
| II. | Representations, Warranties and Covenants |
The Company hereby represents and warrants to and agrees with the Investor to all the same representations and warranties contained in Section 1 of the Underwriting Agreement and the covenants contained in Section 5 of the Underwriting Agreement mutatis mutandis to the same extent as if such representations and warranties and covenants were set forth herein for the benefit of the Investor instead of the Underwriters (except that references to the (i) Underwriting Agreement therein shall be references to this Agreement, (ii) Underwritten Securities thereunder shall be references to the Investor Shares and (iii) Securities shall be references to the Investor Shares).
The Investor hereby represents and warrants to the Company that it (i) is acquiring the securities to be purchased pursuant to this Agreement (the “Purchased Securities”) for its own account solely for the purpose of investment and not with a view to conduct, or for resale in connection with, any subsequent distribution of such Purchased Securities or any interest therein, (ii) is an “accredited investor” (as defined in Rule 501(a) of Regulation D) and (iii) has been provided an opportunity to ask questions of and receive answers from representatives of the Company concerning the terms and conditions of this Agreement and the purchase of the Purchased Securities contemplated hereby.
| III. | Additional Covenants of the Company |
Whether or not the transactions contemplated by this Agreement are consummated or this Agreement is terminated, the Company agrees to pay or cause to be paid, within 15 days of the submission of any invoice with respect thereto, the reasonable fees and expenses of Simpson Thacher & Bartlett LLP, counsel to the Investor Group, relating to the Offering and any other transactions contemplated by this Agreement.
| IV. | Conditions to the Investor’s Obligations to Purchase the Purchased Securities |
The obligations of the Investor hereunder to purchase the Investor Shares from the Company, and of the Company to sell the Investor Shares to the Investor, will be subject to the satisfaction or waiver of the following conditions on or prior to the Firm Closing Date:
(a) The satisfaction by the Company of the conditions set forth in Section 6 of the Underwriting Agreement (other than clause (m) thereunder);
(b) The substantially concurrent closing of the sale of the Firm Shares on the terms set forth in the Underwriting Agreement;
(c) The delivery to the Investor of opinions of counsel to the Company by the same counsel as set forth in Sections 6(b), (c) and (d) of the Underwriting Agreement in the form and substance acceptable to the Investor; and
(d) The delivery to the Investor of the officer’s certificate contemplated by Section 6(f) of the Underwriting Agreement.
Other than with respect to paragraph (b) of this Section IV, these conditions are for the Investor’s sole benefit and may be waived by the Investor in its sole discretion.
| V. | Termination |
This Agreement (other than Sections III and VI hereof), and the transactions contemplated herein, shall automatically terminate, and the parties hereto shall be automatically released from their respective obligations hereunder, upon any termination of the Underwriting Agreement.
| VI. | Miscellaneous |
(a) The Company hereby agrees to indemnify and hold harmless each member of the Investor Group and each of their respective affiliates, directors, officers, agents and employees and each person, if any, who controls each member of the Investor Group within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act (collectively, the “Indemnitees”) from and against any and all losses, claims, damages and liabilities (including, without limitation, any legal or other expenses reasonably incurred in connection with defending or investigating any such action or claim) arising out of or relating to any of the transactions contemplated by this Agreement. For the avoidance of doubt and notwithstanding the foregoing, the Company shall not be obligated to indemnify and hold harmless the Indemnitees from and against any losses resulting from a decrease in the trading price of the Common Stock.
(b) The provisions of Sections 13, 14, 17, 18 and 19 of the Underwriting Agreement are incorporated herein by reference and shall apply to this Agreement mutatis mutandis.
(c) This Agreement may not be amended or modified except by an instrument in writing signed by, or on behalf of, the parties hereto.
(d) This Agreement (i) shall be deemed to satisfy (a) any requirements of any member of the Investor Group, as applicable, to provide written notice to the Company in accordance with Section 12.03 of the Certificate of Incorporation in order to be considered a “Covered Stockholder”, (b) the Company’s obligations under the Certificate of Incorporation with respect to the delivery of a “Notice of Issuance” with respect to the Firm Shares or any Option Shares and (c) the Company’s obligations under the Registration Rights Agreement to
provide written notice of the Public Offering to any member of the Investor Group, and (ii) shall, to the extent the Company issues and delivers the Investor Shares as contemplated by this Agreement, constitute (a) the Company’s satisfaction with respect to any rights granted to the Investor Group with respect to the Offering pursuant to Section 12.01 of the Certificate of Incorporation and (b) the waiver of each member of the Investor Group’s rights under Section 2.02 of the Registration Rights Agreement, as applicable, with respect to the Firm Shares and the Option Shares.
(e) This Agreement may be executed and delivered in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed and delivered shall be deemed to be an original but all of which taken together shall constitute one and the same agreement.
(f) All notices and other communications hereunder shall be in writing and shall be given (and shall be deemed to have been duly given upon receipt) by delivery in person, by fax, by electronic transmission, by a recognized overnight courier service or by registered or certified mail (postage prepaid, return receipt requested) to the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this clause (f)):
if to any member of the Investor Group:
Artal Participations S.à r.l.
44 rue de la Vallée
L-2661 Luxembourg
Luxembourg
Attention: Pierre Claudel
and
The Invus Group, L.L.C.
750 Lexington Avenue (30th Floor)
New York, New York 10022
Attention: David van Zandt
with a copy to:
Simpson Thacher & Bartlett LLP
425 Lexington Avenue
New York, New York 10017
Attention: Kenneth Wallach, Esq.; Lia Toback, Esq.
if to the Company:
Lexicon Pharmaceuticals, Inc.
2445 Technology Forest Blvd., 11th Floor
The Woodlands, Texas 77381
Attention: President and Chief Executive Officer
with a copy to:
Vinson & Elkins L.L.P.
845 Texas Avenue, Suite 4700
Houston, Texas 77002-6760
Attention: David Palmer Oelman; Jackson O’Maley
(g) Pursuant to resolutions in form and substance previously approved by the Investor Group, the Company’s board of directors will approve in advance of the Firm Closing Date, for the express purpose of exempting the issuance and sale of the Investor Shares from Section 16(b) of the Exchange Act, pursuant to Rule 16b-3 thereunder to the extent applicable, the transactions contemplated by this Purchase Agreement, including the acquisition of the Investor Shares, any disposition of such Investor Shares, any deemed acquisition or disposition in connection therewith, and all other transactions with the Company related thereto.
(h) The Investor Shares to be issued to the Investor shall constitute “Registrable Securities” as defined in that certain Registration Rights Agreement, dated as of June 17, 2007 (as amended, supplemented or otherwise modified, the “Registration Rights Agreement”), by and between Invus, L.P. and the Company, and the Investor Shares to be issued to the Investor shall be entitled to all of the benefits thereunder.
[Signature Page Follows]
| Sincerely, | ||
| INVUS, L.P. | ||
| By: | Invus Advisors, L.L.C., | |
| its General Partner | ||
| By: | /s/ Philip Bafundo | |
| Name: | Philip Bafundo | |
| Title: | CFO of the General Partner | |
| INVUS PUBLIC EQUITIES, L.P. | ||
| By: | Invus Public Equities Advisors, LLC, | |
| its General Partner | ||
| By: | /s/ Philip Bafundo | |
| Name: | Philip Bafundo | |
| Title: | CFO of the General Partner | |
| INVUS ADVISORS, L.L.C. | ||
| By: | /s/ Philip Bafundo | |
| Name: | Philip Bafundo | |
| Title: | Chief Financial Officer | |
| INVUS PUBLIC EQUITIES ADVISORS, LLC | ||
| By: | /s/ Philip Bafundo | |
| Name: | Philip Bafundo | |
| Title: | Chief Financial Officer | |
| INVUS GLOBAL MANAGEMENT, LLC | ||
| By: | /s/ Philip Bafundo | |
| Name: | Philip Bafundo | |
| Title: | Chief Financial Officer | |
[Signature Page to Purchase Agreement]
| SIREN, L.L.C. | ||
| By: | /s/ Raymond Debbane | |
| Name: | Raymond Debbane | |
| Title: | President | |
| ARTAL PARTICIPATIONS S.A R.L. | ||
| By: | /s/ Pierre Claudel | |
| Name: | Pierre Claudel | |
| Title: | Manager | |
| ULYS, L.L.C. | ||
| By: | /s/ Raymond Debbane | |
| Name: | Raymond Debbane | |
| Title: | President | |
| INVUS US PARTNERS LLC | ||
| By: | /s/ Philip Bafundo | |
| Name: | Philip Bafundo | |
| Title: | Authorized Person | |
| /s/ Raymond Debbane | ||
| Raymond Debbane | ||
[Signature Page to Purchase Agreement]
| Accepted and agreed to: | ||
| LEXICON PHARMACEUTICALS, INC., a Delaware corporation | ||
| By: | /s/ Scott Coiante | |
| Name: Scott Coiante | ||
| Title: Senior Vice President and Chief Financial Officer | ||
[Signature Page to Purchase Agreement]
Exhibit 10.2
PREFERRED STOCK PURCHASE AGREEMENT
dated as of January 29, 2026
by and among
LEXICON PHARMACEUTICALS, INC.
and
ARTAL PARTICIPATIONS S.À R.L.
TABLE OF CONTENTS
| ARTICLE I PURCHASE; CLOSING |
1 | |||||
| Section 1.1 |
Purchase and Sale | 1 | ||||
| Section 1.2 |
Closing | 1 | ||||
| Section 1.3 |
The Option Preferred Stock | 2 | ||||
| Section 1.4 |
Closing Conditions | 2 | ||||
| Section 1.5 |
Deliveries | 5 | ||||
| ARTICLE II REPRESENTATIONS AND WARRANTIES | 6 | |||||
| Section 2.1 |
Representations and Warranties of the Company | 6 | ||||
| Section 2.2 |
Representations and Warranties of the Purchaser | 8 | ||||
| ARTICLE III COVENANTS | 11 | |||||
| Section 3.1 |
Corporate Actions; Authorized Purchased Stock | 11 | ||||
| Section 3.2 |
[Reserved] | 11 | ||||
| Section 3.3 |
Amendment to the Certificate of Incorporation | 11 | ||||
| Section 3.4 |
Listing | 12 | ||||
| Section 3.5 |
Rule 144 | 12 | ||||
| Section 3.6 |
Further Assurances | 12 | ||||
| ARTICLE IV ADDITIONAL AGREEMENTS | 12 | |||||
| Section 4.1 |
Legend | 12 | ||||
| Section 4.2 |
Cleansing Matters | 13 | ||||
| Section 4.3 |
Cooperation | 14 | ||||
| ARTICLE V MISCELLANEOUS | 14 | |||||
| Section 5.1 |
Survival; Limitations on Liability | 14 | ||||
| Section 5.2 |
Amendment; Waiver | 14 | ||||
| Section 5.3 |
Counterparts | 15 | ||||
| Section 5.4 |
Governing Law; Submission to Jurisdiction | 15 | ||||
| Section 5.5 |
WAIVER OF JURY TRIAL | 15 | ||||
| Section 5.6 |
Notices | 15 | ||||
| Section 5.7 |
Entire Agreement | 16 | ||||
| Section 5.8 |
Assignment and Transfer | 16 | ||||
| Section 5.9 |
Freely Tradeable Securities | 17 | ||||
| Section 5.10 |
Interpretation; Other Definitions | 17 | ||||
| Section 5.11 |
Captions | 19 | ||||
| Section 5.12 |
Severability | 19 | ||||
| Section 5.13 |
Third Party Beneficiaries | 20 | ||||
| Section 5.14 |
Public Announcements | 20 | ||||
| Section 5.15 |
Specific Performance | 20 | ||||
| Section 5.16 |
Termination | 20 | ||||
| Section 5.17 |
Effects of Termination | 21 | ||||
| Section 5.18 |
Non-Recourse | 21 | ||||
| Section 5.19 |
Reliance | 22 | ||||
| Section 5.20 |
Recapitalization, Exchanges, Etc. | 22 | ||||
i
PREFERRED STOCK PURCHASE AGREEMENT
This PREFERRED STOCK PURCHASE AGREEMENT (this “Agreement”), dated as of January 29, 2026 (the “Execution Date”), is by and between Lexicon Pharmaceuticals, Inc., a Delaware corporation (the “Company”), and Artal Participations S.à r.l. (the “Purchaser”). Capitalized terms used but not defined have the meanings ascribed to them in Section 5.10 of this Agreement.
RECITALS
WHEREAS, the Purchaser proposes to buy from the Company, and the Company proposes to issue and sell to the Purchaser, certain shares of its Series B Convertible Preferred Stock, par value $0.01 per share (the “Preferred Stock”), in reliance on the exemption from registration afforded by the provisions of Section 4(a)(2) of the Securities Act (as defined below), and Rule 506 of Regulation D (“Regulation D”), and subject to the terms and conditions set forth in this Agreement and with the rights, preferences, powers, restrictions, and limitations set forth in the certificate of designations of the Company in the form attached hereto as Exhibit B (the “Certificate of Designations”); and
WHEREAS, the shares of Preferred Stock issued to the Purchaser pursuant to this Agreement (including, for the avoidance of doubt, any Option Preferred Stock and any Additional Preferred Stock) shall be referred to in this Agreement as the “Purchased Stock,” and the shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”), issuable upon conversion of the Purchased Stock shall be referred to as the “Conversion Stock”.
NOW, THEREFORE, in consideration of the premises, and of the representations, warranties, covenants and agreements set forth herein, the parties agree as follows:
ARTICLE I
PURCHASE; CLOSING
Section 1.1 Purchase and Sale. On the terms and subject to the conditions herein, at the Closing (as defined below), the Company agrees to issue and sell to the Purchaser, and the Purchaser agrees to purchase from the Company (i) the number of shares of Preferred Stock (the “Firm Preferred Stock”) set forth opposite the name of Purchaser under the heading “Number of Preferred Stock to be Purchased” on Exhibit A attached hereto (the “Schedule of Purchasers”) at a purchase price of $65 per share of Preferred Stock (the “Per Share Purchase Price”) and (ii) an additional 182,779.32 shares of Preferred Stock at the Per Share Purchase Price (the “Additional Preferred Stock”). To the extent that the Underwriters exercise the Option, the Purchaser shall have the right to purchase up to an additional 94,854.88 shares of Preferred Stock at the Per Share Purchase Price (the “Option Preferred Stock”). The purchase and sale of the Purchased Stock pursuant to this Section 1.1 is referred to as the “Purchase.”
Section 1.2 Closing. Subject to the terms and conditions hereof, the closing of the purchase of the Firm Preferred Stock and the Additional Preferred Stock (the “Closing”) shall be effected remotely by the exchange of signatures, documents and funds, as and to the extent applicable, by electronic transmission or similar means on February 2, 2026, or at such other time and place as the Company and the Purchaser agree (the “Closing Date”). Upon satisfaction
or waiver by the party or parties entitled to the benefit thereof, of the conditions set forth in Section 1.4, at the Closing, the Purchaser shall deliver to the Company the Purchase Price by wire transfer of U.S. dollars in immediately available funds to an account of the Company designated in writing by the Company to the Purchaser. At the Closing, the Company shall, in accordance with this Agreement, deliver to the Purchaser the number of shares of Purchased Stock registered in the name of the Purchaser (or its nominee in accordance with its delivery instructions) with the transfer agent of the Company (the “Transfer Agent”) in book entry form, free and clear of any Liens or other restrictions whatsoever (other than those arising under state or federal securities laws), in the amount set forth opposite the name of the Purchaser under the heading “Number of Preferred Stock to be Purchased” in the Schedule of Purchasers plus the Additional Preferred Stock and written notice from the Company or its transfer agent evidencing the issuance to the Purchaser of the number of shares of Purchased Stock set forth opposite the name of the Purchaser under the heading “Number of Preferred Stock to be Purchased” in the Schedule of Purchasers plus the Additional Preferred Stock on and as of the Closing Date. Notwithstanding the foregoing, if the Purchaser informs the Company that it is a mutual fund subject to regulations related to the timing of funding and the issuance of securities, or has internal policies and/or procedures relating to the timing of funding and the issuance of securities, the Purchaser shall not be required to wire its Purchase Price until it confirms receipt of a book-entry statement from the Transfer Agent evidencing the issuance of the Purchased Stock to the Purchaser on and as of the Closing Date.
Section 1.3 The Option Preferred Stock.
(a) In the event that the Underwriters exercise the Option, the Purchaser shall have the option to purchase, at a price per share equal to the Per Share Purchase Price, a number of Option Preferred Stock from the Company, determined by multiplying 94,854.88 by a fraction, the numerator of which shall be the number of Option Securities as to which the Underwriters exercise the Option and the denominator of which shall be the maximum number of Option Securities subject to the Option rounded down to the nearest whole number.
(b) To the extent the Purchaser is granted the right to purchase any Option Preferred Stock, the closing of the sale of such Option Preferred Stock (the “Option Closing”) shall take place concurrently with the closing of the sale of the corresponding Option Securities (the “Option Closing Date”), (i) with payment for such Option Preferred Stock made by wire transfer of immediately available funds on the Option Closing Date, and (ii) with delivery of such Option Preferred Stock registered, as applicable, in the name of the Purchaser or its designee(s), free and clear of all liens, with any transfer or stamp taxes paid by the Company.
Section 1.4 Closing Conditions.
(a) The obligation of the Purchaser, on the one hand, and the Company, on the other hand, to effect the Closing and, as applicable, the Option Closing, is subject to the satisfaction or, to the extent permitted by applicable Law, waiver by the Purchaser and the Company (acting at the direction of the board of directors of the Company (the “Board”)) at or prior to the Closing or the Option Closing, as the case may be, of each of the following conditions:
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(i) there shall not be in effect any temporary restraining order, preliminary or permanent injunction or other judgment or order issued by any court, administrative agency or commission or other governmental or arbitral body or authority or instrumentality, whether federal, state, local or foreign, and any applicable industry self-regulatory organization (each, a “Governmental Entity”), nor any Law restraining, precluding, enjoining, making illegal or otherwise prohibiting, the consummation of the transactions contemplated by this Agreement; and
(ii) there shall not be pending any suit, action or proceeding by any Governmental Entity seeking to restrain, preclude, enjoin, make illegal or otherwise prohibit the transactions contemplated by this Agreement.
(b) The obligation of the Purchaser to effect the Closing and the Option Closing, as the case may be, is also subject to the satisfaction or, to the extent permitted by applicable Law, waiver by the Purchaser at or prior to the Closing or the Option Closing, as the case may be, of each of the following conditions:
(i) the representations and warranties of the Company set forth herein shall be true and correct in all respects as of the Execution Date and as of the Closing Date and the Option Closing Date, as the case may be, as though made on and as of such date (except to the extent that such representation or warranty speaks to a specified date, in which case as of such specified date);
(ii) the Company shall have performed and complied in all material respects with its covenants, obligations and agreements required to be performed or complied with by it pursuant to this Agreement at or prior to the Closing or the Option Closing, as the case may be;
(iii) as of the Closing Date and the Option Closing Date, as the case may be, no event shall have occurred or condition or circumstance shall exist which, individually or in the aggregate, has had or is reasonably likely to be expected to have a material adverse effect upon the business, prospects, properties, operations, management, condition (financial or otherwise), stockholders’ equity or results of operations of the Company and its subsidiaries, taken as a whole, or in its ability to perform its obligations under this Agreement;
(iv) the Company shall have filed Notification: Listing of Additional Shares with the Nasdaq Capital Market (the “Exchange”) for the listing of the Conversion Stock, and the Exchange shall have raised no objections to such notice or the transactions contemplated hereby;
(v) from the Execution Date to the Closing Date or the Option Closing Date, as the case may be, trading in the Common Stock shall not have been suspended by the U.S. Securities and Exchange Commission (“SEC”) or the Exchange, nor shall suspension have been threatened either (A) in writing by the SEC or the Exchange or (B) by falling below the minimum maintenance requirements of the Exchange, and, at any time prior to the Closing Date or the Option Closing Date, as the case may be, trading in securities generally as reported by Bloomberg L.P. shall not have been suspended or limited, or minimum prices shall not have been established on securities whose trades are reported by such service;
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(vi) the Purchaser shall have received the executed legal opinion of Vinson & Elkins L.L.P., dated as of the Closing Date or the Option Closing Date, as the case may be, addressed to the Purchaser, in a form reasonably acceptable to the Purchaser;
(vii) the delivery by the Company of the items set forth in Section 1.5;
(viii) with respect to the Closing, the substantially concurrent closing of (i) the sale of the Shares (as such term is defined in the Underwriting Agreement) on the terms set forth in the Underwriting Agreement and (ii) the sale of the Investor Shares (as such term is defined in the Common Stock Purchase Agreement) on the terms set forth in the Common Stock Purchase Agreement;
(ix) with respect to the Option Closing, the substantially concurrent closing of the Option on the terms set forth in the Underwriting Agreement; and
(x) the Company shall have adopted and filed with the Secretary of State of the State of Delaware the Certificate of Designations in the form attached hereto as Exhibit B, and the Certificate of Designations shall have become effective as an amendment to the Company’s Sixth Amended and Restated Certificate of Incorporation, as amended (the “Charter”).
(c) The obligation of the Company to sell and issue the Purchased Stock and effect the Closing or the Option Closing, as the case may be, as to the Purchaser is also subject to the satisfaction or, to the extent permitted by applicable Law, waiver by the Company (acting at the direction of the Board) at or prior to the Closing or the Option Closing, as the case may be, of each of the following conditions:
(i) the representations and warranties of the Purchaser set forth herein shall be true and correct in all material respects (other than any such representations and warranties that are qualified by materiality, which, in each case, shall be true and correct in all respects) as of the Execution Date and as of the Closing Date or the Option Closing Date, as the case may be, as though made on and as of such date (except to the extent that such representation or warranty speaks to a specified date, in which case as of such specified date); and
(ii) the Purchaser shall have performed and complied in all material respects with its covenants, obligations and agreements required to be performed or complied with by it pursuant to this Agreement at or prior to the Closing or the Option Closing, as the case may be.
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Section 1.5 Deliveries.
(a) On or prior to the Closing Date and, as applicable, the Option Closing Date, the Company shall deliver or cause to be delivered to the Purchaser the following:
(i) this Agreement duly executed by the Company;
(ii) with respect to the Closing, evidence in book-entry form of the number of shares of Preferred Stock set forth opposite the name of the Purchaser under the heading “Number of Preferred Stock to be Purchased” in the Schedule of Purchasers, plus the Additional Preferred Stock, registered in the name of the Purchaser;
(iii) with respect to the Option Closing, evidence in book-entry form of the Option Preferred Stock registered in the name of the Purchaser;
(iv) evidence of the filing and acceptance of the Certificate of Designations from the Secretary of State of Delaware;
(v) a certificate signed by the Chief Executive Officer and the Chief Financial Officer of the Company to the effect that (A) the representations and warranties of the Company in Section 2.1 hereof are true and correct as of the date of this Agreement, and as of and as if made on the Closing Date or the Option Closing Date, as the case may be, (B) all obligations, covenants and agreements to be performed or complied with by the Company at or prior to the Closing or the Option Closing, as the case may be, have been performed or complied with by it, and (C) all of the conditions set forth in Section 1.4(a) and Section 1.4(b) have been satisfied, in form and substance reasonably acceptable to the Purchaser;
(vi) a certificate of the Secretary of the Company, dated as of the Closing Date or the Option Closing Date, as the case may be, certifying as to (A) the Charter, including evidence of the filing and acceptance of the Certificate of Designations from the Secretary of State of Delaware, (B) the Company’s bylaws, (C) resolutions of the Board of Directors (or an authorized committee thereof) approving this Agreement and the transactions contemplated hereby; and (D) a good standing certificate for the Company, issued by the Secretary of State of the State of Delaware, dated not more than five (5) business days prior to the Closing Date or the Option Closing Date, as the case may be;
(vii) the Letter Agreement duly executed by the Company; and
(viii) the Company’s wire instructions at least one (1) business day prior to the Closing Date or the Option Closing Date, as the case may be.
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(b) On or prior to the Closing Date and, as applicable, the Option Closing Date, the Purchaser shall deliver or cause to be delivered to the Company the following:
(i) this Agreement duly executed by the Purchaser;
(ii) the Letter Agreement duly executed by the Company and the Investor Group;
(iii) with respect to the Closing, the Purchase Price attributable to the Purchaser by wire transfer to the account specified in the Company’s wire instructions delivered pursuant to Section 1.5(a)(v);
(iv) with respect to the Option Closing, an amount equal to the Per Share Purchase Price multiplied by the number of shares of Option Preferred Stock attributable to the Purchaser by wire transfer to the account specified in the Company’s wire instructions delivered pursuant to Section 1.5(a)(v); and
(v) a duly executed, valid, accurate and properly completed Internal Revenue Service Form W-8.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1 Representations and Warranties of the Company.
(a) Reference is made to that certain Underwriting Agreement (the “Underwriting Agreement”) being entered into by the Company with the representatives of the underwriters named in Schedule II thereto (the “Underwriters”) concurrently with this Agreement. Except to the extent inapplicable to the Company’s issuance of and the Purchaser’s purchase of the Purchased Stock, as of the Execution Date and as of the Closing Date, and, as applicable, as of the Option Closing Date, the Company hereby represents and warrants to and agrees with the Purchaser to all the same representations and warranties contained in Section 1 of the Underwriting Agreement mutatis mutandis to the same extent as if such representations and warranties were set forth herein for the benefit of the Purchaser instead of the Underwriters (except that references to the (i) Underwriting Agreement therein shall be references to this Agreement and (ii) “Shares” or “Securities” thereunder shall be references to “Purchased Stock” and/or “Conversion Stock” as context requires).
(b) The Company further represents and warrants to the Purchaser as of the Execution Date and as of the Closing Date and, as applicable, as of the Option Closing Date, that:
(i) the Purchased Stock being purchased by the Purchaser hereunder will be duly authorized by the Company pursuant to the Charter and the Certificate of Designations prior to the Closing and, as applicable, prior to the Option Closing, and when issued and delivered by the Company to the Purchaser against payment therefor in accordance with the terms of this Agreement and the terms of the Purchased Stock, will be validly issued, fully paid and non-assessable and will be free of preemptive rights except as have been satisfied, or any Liens and restrictions on transfer, other than (A) restrictions on transfer under applicable
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state and federal securities laws and (B) such Liens as are created by the Purchaser. The Conversion Stock issuable upon conversion of the Purchased Stock, when issued and delivered to the Purchaser upon conversion of the Purchased Stock in accordance with the Certificate of Designations, will be validly issued, fully paid and non-assessable and will be free of preemptive rights except as have been satisfied or any Liens and restrictions on transfer, other than (1) restrictions on transfer under applicable state and federal securities laws and (2) such Liens as are created by the Purchaser. The respective rights, preferences, privileges and restrictions of the Purchased Stock and the Conversion Stock are as stated in the Charter (including the Certificate of Designations); and
(ii) neither the Company nor its subsidiaries nor any Person acting on their behalf has, directly or indirectly, made any offers or sales of any Company security or solicited any offers to buy any Company security, under circumstances that would adversely affect reliance by the Company on Section 4(a)(2) and Regulation D for the exemption from registration for the transaction contemplated hereby or would require registration of the Purchased Stock under the Securities Act.
(iii) The Company has the power and authority to enter into this Agreement and to perform its obligations, including to sell the Purchased Stock, as contemplated by this Agreement. This Agreement has been duly authorized, executed and delivered by the Company, and constitutes a valid, legal and binding obligation of the Company, enforceable in accordance with its terms, except as rights to indemnity hereunder may be limited by federal or state securities laws and except as may be limited or otherwise affected by (A) bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other laws relating to or affecting the rights of creditors generally and (B) principles of equity, whether considered at law or equity.
(iv) Neither the issue and sale of the Purchased Stock nor the consummation of any other of the transactions contemplated by this Agreement, nor the execution, delivery and performance of this Agreement by the Company, nor the fulfillment of the terms hereof will conflict with, result in a breach or violation of, or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any of its subsidiaries pursuant to, (i) the charter or bylaws of the Company or any of its subsidiaries, (ii) the terms of any indenture, contract, lease, mortgage, deed of trust, note agreement, loan agreement or other agreement, obligation, condition, covenant or instrument to which the Company or any of its subsidiaries is a party or bound or to which its or their property is subject, or (iii) any statute, law, rule, regulation, judgment, order or decree applicable to the Company or any of its subsidiaries of any court, regulatory body, administrative agency, governmental body, arbitrator or other authority having jurisdiction over the Company or any of its subsidiaries or any of its or their properties, except in the case of clauses (ii) and (iii) for any such breach, violation or imposition as would not reasonably be expected, individually or in the aggregate, to result in a Company Material Adverse Effect.
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(v) Other than the Requisite Stockholder Approval and the filing of the Certificate of Designations, all consents, approvals, orders, authorizations and filings required on the part of the Company and its subsidiaries in connection with the execution, delivery or performance of this Agreement have been obtained or made, other than such consents, approvals, orders and authorizations the failure of which to make or obtain is not reasonably expected to have a Company Material Adverse Effect.
(vi) Assuming the accuracy of the representations and warranties of the Purchaser contained in Section 2.2, the issuance and sale of the Purchased Stock to the Purchaser pursuant to this Agreement and the issuance of the Conversion Stock upon conversion are exempt from the registration and prospectus delivery requirements of the Securities Act of 1933, as amended (the “Securities Act”), and the rules and regulations promulgated thereunder, and neither the Company nor, to the knowledge of the Company, any person acting on its behalf, has taken nor will take any action hereafter that would cause the loss of such exemption.
(vii) Neither the Company nor any Person acting on its behalf has conducted any general solicitation or general advertising (as those terms are used in Regulation D) in connection with the offer or sale of any of the Purchased Stock.
(viii) No “bad actor” disqualifying event described in Rule 506(d)(1)(i)-(viii) of the 1933 Act (a “Disqualification Event”) is applicable to the Company or, to the Company’s knowledge, any Company Covered Person (as defined below), except (i) for a Disqualification Event as to which Rule 506(d)(2)(ii-iv) or (d)(3) is applicable. The Company is not aware of any Person (other than any Company Covered Person) that has been paid or will be paid (directly or indirectly) remuneration for solicitation of purchasers in connection with the sale of the Purchased Stock pursuant to this Agreement. The Company has complied, to the extent applicable, with its disclosure obligations under Rule 506(e).
Section 2.2 Representations and Warranties of the Purchaser. The Purchaser hereby represents and warrants to the Company as of the Execution Date and as of the Closing Date, and, as applicable, as of the Option Closing Date, as follows:
(a) Authorization.
(i) This Agreement has been duly authorized, executed and delivered by the Purchaser and assuming due authorization, execution and delivery hereof by the Company, constitutes a legal, valid and binding obligation of the Purchaser, enforceable against the Purchaser in accordance with its terms, except as may be limited or otherwise affected by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other laws relating to or affecting the rights of creditors generally, and principles of equity, whether considered at law or equity.
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(ii) The Purchaser is not in violation of any law, statute, ordinance, rule, regulation, permit, or franchise applicable to it or of any judgment, ruling, order, writ, injunction or decree of any Governmental Entity having jurisdiction over the Purchaser or any of its properties or assets or in breach, default (or an event which, with notice or lapse of time or both, would constitute such a default) or violation in the performance of any obligation, agreement, covenant or condition contained in any note, bond, debenture, or any other evidence of indebtedness or in any agreement, indenture, lease or other agreement or instrument to which the Purchaser is a party or by which the Purchaser or any of its properties or assets are bound, which breach, default or violation in the case of clauses (ii) or (ii) would, if continued, reasonably be expected to materially and adversely affect the Purchaser’s ability to perform its obligations under this Agreement or consummate the transactions contemplated hereby on a timely basis.
(iii) Neither the execution, delivery and performance by the Purchaser of this Agreement, nor the consummation of the transactions contemplated hereby, nor compliance by the Purchaser with any of the provisions hereof, will violate, conflict with, or result in a breach of any provision of, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, any note, bond, mortgage, indenture, deed of trust, license, loan agreement, lease, agreement or other instrument or obligation to which the Purchaser is a party or by which it may be bound, or to which the Purchaser or any of its properties or assets may be subject, or subject to compliance with the statutes and regulations referred to in the next paragraph, violate any law, statute, ordinance, rule or regulation, permit, concession, grant, franchise or any judgment, ruling, order, writ, injunction or decree applicable to the Purchaser or its properties or assets except in the case of clauses (iii) or (iii) for such violations, conflicts and breaches as would not reasonably be expected to materially and adversely affect the Purchaser’s ability to perform its obligations under this Agreement or consummate the transactions contemplated hereby on a timely basis.
(b) Purchase for Investment. The Purchaser acknowledges that the Purchased Stock has not been registered under the Securities Act of 1933, as amended (the “Securities Act”) or under any state securities laws. The Purchaser acknowledges that it is acquiring the Purchased Stock pursuant to an exemption from registration under the Securities Act solely for investment with no present intention to distribute any of such Purchased Stock to any Person in violation of applicable securities laws, will not sell or otherwise dispose of any of the Purchased Stock, except in compliance with the registration requirements or exemption provisions of the Securities Act and any other applicable securities laws, has such knowledge and experience in financial and business matters and in investments of this type that it is capable of evaluating the merits and risks of its investment in the Purchased Stock and of making an informed investment decision, is an “accredited investor” (as that term is defined by Rule 501 of the Securities Act) and has been furnished with or has had full access to all the information that it considers necessary or appropriate to make an informed investment decision with respect to the Purchased Stock, has had an opportunity to discuss with management of the Company the intended business and financial affairs of the Company to its reasonable satisfaction and to obtain information (to the extent the Company possessed such information or could acquire it without unreasonable effort or expense) necessary to verify any information furnished to it or to which it had access and can bear the economic risk of an investment in the Purchased Stock and a total loss in respect of such investment.
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(c) Financial Capability. At the Closing and the Option Closing, as the case may be, the Purchaser will have available to it sufficient funds to enable the Purchaser to pay in full at the Closing and the Option Closing, as the case may be, the entire amount of the Purchaser’s funding obligation pursuant to Section 1.2 of this Agreement. Notwithstanding the foregoing, the representations in this Section 2.2(c) shall not restrict the Purchaser’s right at all times to sell or otherwise dispose of all or any part of the Purchased Stock or the Conversion Stock in compliance with applicable federal and state securities laws and that nothing contained herein shall be deemed a representation or warranty by the Purchaser to hold shares of Purchased Stock or Conversion Stock for any period of time.
(d) Brokers and Finders. Neither the Purchaser nor any of its Affiliates or any of their respective officers, directors, employees or agents has employed any broker or finder or incurred any liability for any financial advisory fees, brokerage fees, commissions, finder’s fees or similar payments, and no broker or finder has acted directly or indirectly for the Purchaser, in connection with this Agreement or the Purchase.
(e) ERISA Matters. Either the Purchaser is not a Plan and is not acquiring the Purchased Stock or any beneficial ownership interest therein directly or indirectly for, on behalf of, or with the assets of any Plan or its acquisition, holding and subsequent disposition of the Purchased Stock or any beneficial ownership interest therein is permissible under applicable Law, and will not constitute or result in any non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code by reason of the application of one or more Investor-Based Class Exemptions and/or the Statutory Exemption, all of the conditions of which shall be met, or breach of fiduciary duty under ERISA, or, if the Purchaser is subject to any Similar Law, such acquisition, holding and disposition will not constitute or result in a non-exempt violation of or breach of fiduciary duty under any Similar Law, and will not otherwise result in any tax, rescission right or other penalty on the Company, any of its Affiliates or the Purchaser, and, in any case, neither the purchase nor holding of the Purchased Stock or any beneficial ownership interest therein will subject the Company, any of its Affiliates or the Purchaser to any obligation not affirmatively undertaken in writing.
(f) Non-Reliance. EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES MADE BY THE COMPANY IN SECTION 2.1, THE PURCHASER HEREBY ACKNOWLEDGES AND AGREES ON BEHALF OF ITSELF AND ITS AFFILIATES AND REPRESENTATIVES THAT IT HAS NOT RELIED UPON ANY EXPRESS OR IMPLIED REPRESENTATION OR WARRANTY WITH RESPECT TO THE PURCHASED STOCK OR THE COMPANY OR ANY OF THE SUBSIDIARIES OF THE COMPANY OR THEIR RESPECTIVE BUSINESSES, OPERATIONS, ASSETS, LIABILITIES, CONDITION OR PROSPECTS, INCLUDING WITH RESPECT TO (I) ANY
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FINANCIAL PROJECTION, FORECAST, ESTIMATE, BUDGET OR PROSPECT INFORMATION RELATING TO THE COMPANY OR ANY OF THE SUBSIDIARIES OF THE COMPANY OR THEIR RESPECTIVE BUSINESSES, OR (II) ANY ORAL OR WRITTEN INFORMATION PRESENTED TO THE PURCHASER OR ANY OF ITS AFFILIATES OR REPRESENTATIVES IN THE COURSE OF ITS DUE DILIGENCE INVESTIGATION OF THE COMPANY, THE NEGOTIATION OF THIS AGREEMENT OR IN THE COURSE OF THE TRANSACTIONS CONTEMPLATED HEREBY. NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, NOTHING IN THIS AGREEMENT SHALL NEGATE THE RELIANCE BY THE PURCHASER ON, OR LIMIT THE RIGHT OF THE PURCHASER TO RELY ON, THE REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS EXPRESSLY SET FORTH IN THIS AGREEMENT, NOR WILL ANYTHING IN THIS AGREEMENT OPERATE TO LIMIT ANY CLAIM BY THE PURCHASER FOR FRAUD.
ARTICLE III
COVENANTS
Section 3.1 Corporate Actions; Authorized Purchased Stock. All shares of Purchased Stock delivered to the Purchaser pursuant to this Agreement shall be newly issued shares or shares held in treasury by the Company, shall have been duly authorized and validly issued and shall be fully paid and non-assessable, and free of any Lien, except restrictions imposed by the Securities Act and any applicable state or foreign securities laws.
Section 3.2 [Reserved].
Section 3.3 Amendment to the Certificate of Incorporation. The Company shall take all necessary actions to duly call, give notice of, establish a record date for and convene a stockholder meeting (which may be an annual meeting or special meeting) for the purpose of (i) adopting the Charter Amendment (as defined below) (the “Requisite Stockholder Approval”), and (ii) include in the proxy statement for such meeting the Board’s recommendation that the stockholders of the Company vote in favor of such amendment and solicit from stockholders eligible to vote at such meeting proxies voting in favor of the Charter Amendment. The Company shall use best efforts to hold such stockholder meeting no later than the end of June, 2026. If the Requisite Stockholder Approval is not obtained at such meeting, the Company shall cause additional stockholder meetings to be held within 90 days from the prior meeting (the “Extended Stockholder Approval Period”). If the Requisite Stockholder Approval is not obtained within the Extended Stockholder Approval Period, then the Company shall use its reasonable best efforts to convene additional stockholder meetings every 90 days thereafter until the Requisite Stockholder Approval is obtained. For purposes of this Agreement, “Charter Amendment” shall mean the Seventh Amended and Restated Certificate of Incorporation of the Company, which shall increase the total authorized shares of Common Stock from 450,000,000 to a number (i) at least equivalent to the number required to permit the immediate conversion of all of the Purchased Stock pursuant to the terms of the Certificate of Designations, without violating the organizational documents of the Company and (ii) approved by the Purchaser (which approval shall not be unreasonably withheld, conditioned or delayed).
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Section 3.4 Listing. The Company will use its commercially reasonable best efforts to ensure that the Conversion Stock is listed and admitted and authorized for trading on the Nasdaq Capital Market as of the Conversion Date.
Section 3.5 Rule 144. With a view to making available to the Purchaser the benefits of Rule 144 (or its successor rule) and any other rule or regulation of the SEC that may at any time permit the Purchaser to sell shares of Common Stock to the public without registration, the Company covenants and agrees to: (i) make and keep public information available, as those terms are understood and defined in Rule 144, until the earlier of (A) six months after such date as all of the Registrable Securities may be sold without restriction by the Purchaser thereof pursuant to Rule 144 or any other rule of similar effect or (B) such date as there are no longer Registrable Securities; (ii) file with the Commission in a timely manner all reports and other documents required of the Company under the Exchange Act; and (iii) furnish electronically to the Purchaser upon request, as long as the Purchaser owns any Registrable Securities, (A) a written statement by the Company that it has complied with the reporting requirements of the Exchange Act, (B) a copy of or electronic access to the Company’s most recent Annual Report on Form 10-K or Quarterly Report on Form 10-Q, and (C) such other information as may be reasonably requested in order to avail the Purchaser of any rule or regulation of the SEC that permits the selling of any such Registrable Securities without registration.
Section 3.6 Further Assurances. Subject to the other terms and conditions of this Agreement, the Company and the Purchaser agree to execute and deliver all such documents or instruments, to take all commercially reasonable actions and to do all other commercially reasonable things they determine to be necessary, proper or advisable under applicable Laws or as otherwise reasonably requested by the other party to effectuate the provisions, intent and purposes of this Agreement and consummate the transactions contemplated by this Agreement.
ARTICLE IV
ADDITIONAL AGREEMENTS
Section 4.1 Legend.
(a) The Purchaser agrees that all certificates or other instruments representing the Purchased Stock or the Conversion Stock delivered to the Purchaser pursuant to this Agreement will bear a legend substantially to the following effect:
[NEITHER] THIS SECURITY [NOR THE SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE] HAS [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
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STATE SECURITIES LAWS. THIS SECURITY [AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS SECURITY] MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.
(b) In the event that the Purchased Stock or the Conversion Stock subject to this Agreement is uncertificated, the Company shall give notice of such legend in accordance with applicable Law.
(c) Once a registration statement covering the resale of the Registrable Securities (a “Registration Statement”) is declared effective, the Company shall remove, and cause its Transfer Agent to remove, all restrictive legends, including the legend set forth in paragraph (a) above, and the Company shall, upon request of the Purchaser or the Transfer Agent, provide a blanket opinion of counsel permitting such removal. Further, the Company shall remove all restrictive legends, including the legend set forth in paragraph (b) above, (i) following any sale of such Conversion Stock pursuant to Rule 144 or any other applicable exemption from the registration requirements of the Securities Act, or (ii) if such Conversion Stock are eligible for resale under Rule 144(b)(1) or any successor provision. Without limiting the foregoing, within two (2) business days of the request of the Purchaser, subject to receipt by the Company of an opinion of counsel reasonably satisfactory to the Company to the effect that such legend is no longer required under the Securities Act and applicable state securities laws, the Company shall promptly cause the legend to be removed from any book-entry statements for any Conversion Stock in accordance with the terms of this Agreement and deliver, or cause to be delivered, to the Purchaser new book-entry statements representing the Common Stock or derivative shares that are free from all restrictive and other legends or, at the request of the Purchaser, via DWAC transfer to the Purchaser’s account.
(d) The Purchaser agrees with the Company (i) that the Purchaser will sell any Conversion Stock only pursuant to either the registration requirements of the 1933 Act, including any applicable prospectus delivery requirements, or an exemption therefrom, (ii) that if Conversion Stock is sold pursuant to a registration statement, they will be sold in compliance with the plan of distribution set forth therein and (iii) that if, after the effective date of the registration statement covering the resale of the Conversion Stock, such registration statement ceases to be effective and the Company has provided notice to the Purchaser to that effect, the Purchaser will sell Conversion Stock only in compliance with an exemption from the registration requirements of the 1933 Act.
Section 4.2 Cleansing Matters. By no later than 9:00 A.M., New York City time, on the business day immediately following the Execution Date hereof (provided that, if this Agreement is executed between midnight and 9:00 A.M., New York City time on any business day, no later than 9:01 A.M. on the date hereof) (the “Disclosure Time”), the Company shall (a) issue a press release (the “Press Release”) reasonably acceptable to the Purchaser disclosing all material terms of the transactions contemplated hereby and (b) file a Current Report on Form 8-K with the SEC
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describing the terms of this Agreement and the transactions contemplated hereby (including, without limitation, the Certificate of Designations). From and after the Disclosure Time, the Company represents to the Purchaser that it shall have publicly disclosed all material, non-public information delivered to the Purchaser by the Company or any of its subsidiaries, or any of their respective officers, directors, employees or agents in connection with the transactions contemplated by this Agreement. In addition, effective upon the issuance of such press release, the Company acknowledges and agrees that any and all confidentiality or similar obligations under this Agreement or an agreement entered into in connection with the transactions contemplated hereby, whether written or oral, between the Company, any of its subsidiaries or any of their respective officers, directors, agents, employees or affiliates, on the one hand, and the Purchaser or any of its officers, directors, agents, employees or investment advisers, on the other hand, shall terminate. In addition, notwithstanding the foregoing, the Company shall not, without the prior written consent of the Purchaser, disclose the name of the Purchaser or any of its affiliates or investment advisers, or include the name of the Purchaser or any of its affiliates or investment advisers (i) in any press release or marketing materials or (ii) in any filing with the SEC or any regulatory agency or the Exchange, except as required by applicable federal securities law (A) in connection with any Registration Statement (which shall be subject to review and comment of the Purchaser pursuant to the terms of this Agreement) and (B) to the extent such disclosure is required by law, request of the SEC’s staff or Exchange regulations, in which case the Company shall provide the Purchaser with prior written notice of and an opportunity to review such disclosure permitted under this subclause (ii).
Section 4.3 Cooperation. The Company shall, and shall cause its subsidiaries and affiliates to, use its best efforts to cooperate in good faith with the Purchaser and any applicable governmental authority to take or cause to be taken all actions and to do or cause to be done all things that are necessary, proper or advisable in compliance with applicable antitrust laws to permit the full conversion of the Purchased Stock.
ARTICLE V
MISCELLANEOUS
Section 5.1 Survival; Limitations on Liability. All the agreements, representations and warranties made by each party hereto in this Agreement shall survive the Closing and the Option Closing, as the case may be.
Section 5.2 Amendment; Waiver. No amendment or waiver of any provision of this Agreement will be effective with respect to any party unless made in writing and signed by an officer of a duly authorized representative of each of the parties hereto. No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The conditions to each party’s obligation to consummate the Closing and the Option Closing, as the case may be, are for the sole benefit of such party and may be waived by such party in whole or in part to the extent permitted by applicable law. No waiver of any party to this Agreement, as the case may be, will be effective unless it is in a writing signed by a duly authorized officer of the waiving party that makes express reference to the provision or provisions subject to such waiver. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.
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Section 5.3 Counterparts. For the convenience of the parties hereto, this Agreement may be executed in any number of separate counterparts, each such counterpart being deemed to be an original instrument, and all such counterparts will together constitute the same agreement. Executed signature pages to this Agreement may be delivered by facsimile or other means of electronic transmission (including by email in “.pdf” format) and such facsimiles or other means of electronic transmission will be deemed as sufficient as if original signature pages had been delivered.
Section 5.4 Governing Law; Submission to Jurisdiction. This Agreement will be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to any choice or conflict of law provision or rule (whether in the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware. The parties hereby irrevocably and unconditionally consent to submit to the exclusive jurisdiction of the Court of Chancery located in the County of New Castle in the State of Delaware, or in the event (but only in the event) that such court shall not have subject matter jurisdiction, any federal court of the United States or other state court located in the County of New Castle in the State of Delaware, for any actions, suits or proceedings arising out of or relating to this Agreement and the transactions contemplated hereby. Each party to this Agreement hereby irrevocably waives any defense in any such action, suit or proceeding that it is not personally subject to the jurisdiction of the above named courts and to the fullest extent permitted by applicable law, that the action, suit or proceeding in any such court is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper.
Section 5.5 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
Section 5.6 Notices. Any notice, request, instruction or other document to be given hereunder by any party to the other will be in writing and will be deemed to have been duly given on the date of delivery if delivered personally or by telecopy, electronic mail or facsimile, upon confirmation of receipt (it being understood that the parties agree to provide confirmation of receipt promptly upon the receipt of any notice by telecopy, electronic mail or facsimile), on the first business day following the date of dispatch if delivered by a recognized next-day courier service, or on the third business day following the date of mailing if delivered by registered or certified mail, return receipt requested, postage prepaid. All notices hereunder shall be delivered as set forth below, or pursuant to such other instructions as may be designated in writing by the party to receive such notice.
If to the Company:
Lexicon Pharmaceuticals, Inc.
2445 Technology Forest Blvd., 11th Floor
The Woodlands, Texas 77381
Attn: General Counsel
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with a copy to (which copy shall not constitute notice):
Vinson & Elkins L.L.P.
845 Texas Ave, Suite 4700
Houston, Texas 77002
Attn: David P. Oelman
E-mail: doelman@velaw.com
Attn: Jackson A. O’Maley
E-mail: jomaley@velaw.com
If to the Purchaser:
Artal Participations S.à r.l.
44 rue de la Vallée
L-2661 Luxembourg
Luxembourg
Attention: Pierre Claudel
and
The Invus Group, L.L.C.
750 Lexington Avenue (30th Floor)
New York, New York 10022
Attention: David van Zandt
with a copy to:
Simpson Thacher & Bartlett LLP
425 Lexington Avenue
New York, New York 10017
Attention: Kenneth Wallach, Esq.; Lia Toback, Esq.
Section 5.7 Entire Agreement. This Agreement, the Certificate of Designations, the Common Stock Purchase Agreement, the Letter Agreement, and the other agreements and documents referred to herein (including the exhibits hereto) constitutes the entire agreement between the parties, and supersedes all other prior agreements, understandings, representations and warranties, both written and oral, among the parties, with respect to the subject matter hereof.
Section 5.8 Assignment and Transfer. Neither this Agreement, nor any of the rights, interests or obligations hereunder may be assigned or transferred or otherwise disposed of by the Purchaser (whether by operation of Law or otherwise) without the prior written consent of the Company; provided, that nothing in this Section 5.8 shall prohibit the Purchaser from (i) transferring or assigning any of its rights, interests and obligations hereunder to any Affiliate of the Purchaser or (ii) transferring or otherwise disposing of the Purchased Stock or the Conversion Stock, without the consent of the Company, in compliance with applicable securities laws. No assignment or transfer of any right set forth under Section 3.2 shall be valid unless and until the assignee or transferee thereof signs a joinder to this Agreement on a form agreeable to the Company. Neither this Agreement, nor any of the rights, interests or obligations hereunder may be assigned by the Company (whether by operation of Law or otherwise) without the prior written consent of the Purchaser.
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Section 5.9 Freely Tradeable Securities. The Company agrees that none of the provisions of this Agreement shall limit the right of the Purchaser to engage in, or require the Company’s consent with respect to, any short sales of securities of the Company, including, without limitation, sales “against the box.”
Section 5.10 Interpretation; Other Definitions. Wherever required by the context of this Agreement, the singular shall include the plural and vice versa, and the masculine gender shall include the feminine and neuter genders and vice versa, and references to any agreement, document or instrument shall be deemed to refer to such agreement, document or instrument as amended, supplemented or modified from time to time. All article, section, paragraph or clause references not attributed to a particular document shall be references to such parts of this Agreement, and all exhibit, annex and schedule references not attributed to a particular document shall be references to such exhibits, annexes and schedules to this Agreement. In addition, the following terms are ascribed the following meanings:
(a) the word “or” is not exclusive;
(b) the words “including,” “includes,” “included” and “include” are deemed to be followed by the words “without limitation”;
(c) the terms “herein,” “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular section, paragraph or subdivision;
(d) the term “business day” means any day except Saturday, Sunday and any day which shall be a legal holiday or a day on which banking institutions in the State of Texas generally are authorized or required by law or other governmental action to close;
(e) any reference to any “day” or any number of “days” without explicit reference to “business days” shall be deemed to refer to a calendar day or number of calendar days, and if any action is to be taken on or by a particular calendar day that is not also a business day, then such action may be deferred until the immediately succeeding business day;
(f) the word “will” shall have the same meaning as the word “shall”; and
(g) the term “Person” has the meaning given to it in Section 3(a)(9) of the Exchange Act and as used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act.
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(h) “Affiliate” means, with respect to any Person, any other Person that directly or indirectly through one or more intermediaries controls, is controlled by or is under common control (through the holding of over 50% of the voting power with respect to the election of directors, or, in the absence of a board of directors, with respect to the appointment or management of the general partner, managing member or equivalent governing body) with, the Person in question. As used herein, the term “control” means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise. Notwithstanding the foregoing, for purposes of this Agreement, the Company and the subsidiaries of the Company, on the one hand, and the Purchaser, on the other, shall not be considered Affiliates of each other.
(i) “Common Stock Purchase Agreement” means that certain Purchase Agreement being entered into by the Company with the Purchaser and the Investor Group concurrently with this Agreement.
(j) “Company Covered Person” means, with respect to the Company as an “issuer” for purposes of Rule 506 promulgated under the Securities Act, any Person listed in the first paragraph of Rule 506(d)(1).
(k) “Conversion Date” means the date upon which the Purchased Stock convert into the Conversion Stock.
(l) “DGCL” means the General Corporate Law of the State of Delaware.
(m) “ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the rules and regulations promulgated thereunder from time to time in effect.
(n) “Investor-Based Class Exemption” means any of Prohibited Transaction Class Exemption 75-1, Prohibited Transaction Class Exemption 84-14, Prohibited Transaction Class Exemption 90-1, Prohibited Transaction Class Exemption 91-38, Prohibited Transaction Class Exemption 95-60 or Prohibited Transaction Class Exemption 96-23.
(o) “Investor Group” means, collectively, Invus US Partners LLC, Ulys, L.L.C., Invus L.P., Invus Advisors, LLC, Invus Public Equities, L.P., Invus Public Equities Advisors, LLC, Invus Global Management, LLC, Siren, L.L.C. and Mr. Raymond Debbane.
(p) “Law” means any federal, state, local, municipal, foreign or other law, statute, constitution, principle of common law, resolution, ordinance, code, order, edict, decree, rule, regulation, ruling or requirement issued, enacted, adopted, promulgated, implemented or otherwise put into effect by or under the authority of any Governmental Entity, including any international, foreign, national, state, provincial, regional, or local authority, relating to pollution, the protection of occupational health and workplace safety, the environment, or natural resources, or to the use, handling, storage, manufacturing, transportation, treatment, discharge, disposal or release of hazardous or toxic substances or wastes, pollutants or contaminants applicable to such entity.
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(q) “Letter Agreement” means that certain Letter Agreement being entered into by the Company with the Purchaser and the Investor Group concurrently with this Agreement.
(r) “Lien” means any mortgage, pledge, security interest, encumbrance, lien, charge or other restriction of any kind, whether based on common law, statute or contract.
(s) “Plan” an “employee benefit plan” as defined in Section 3(3) of ERISA that is subject to Title I of ERISA, a “plan” described in Section 4975(e)(1) of the Internal Revenue Code of 1986, as amended from time to time, and Treasury Regulations promulgated thereunder (the “Code”) that is subject to Section 4975 of the Code, employee benefit plans that are governmental plans within the meaning of Section 3(32) of ERISA, certain church plans (as defined in Section 3(33) of ERISA), non-U.S. plans (as described in Section 4(b)(4) of ERISA), any entity or account whose underlying assets are deemed to include “plan assets” (within the meaning of the Department of Labor regulation located at 29 C.F.R. section 2510.3¬101, as modified by Section 3(42) of ERISA)or any plan, entity or account that is not subject to the foregoing but is subject to analogous provisions under any Similar Law.
(t) “Option” means the option set forth in the Underwriting Agreement of the Underwriters to purchase the Option Securities (as defined in the Underwriting Agreement).
(u) “Purchase Price” means, as to the Purchaser, the aggregate amount to be paid for the Purchased Stock purchased hereunder as specified under the Purchaser’s name on Exhibit A attached hereto, under the column entitled “Aggregate Purchase Price” plus, as applicable, the Per Share Purchase Price multiplied by the amount of Additional Preferred Stock.
(v) “Similar Law” means any U.S. federal, state, non-U.S., or local Law that is similar to the provisions of Title I of ERISA or Section 4975 of the Code.
(w) “Statutory Exemption” means the statutory prohibited transaction exemption under Section 408(b)(17) of ERISA and Section 4975(d)(20) of the Code.
Section 5.11 Captions. The article, section, paragraph and clause captions herein are for convenience of reference only, do not constitute part of this Agreement and will not be deemed to limit or otherwise affect any of the provisions hereof.
Section 5.12 Severability. If any provision of this Agreement or the application thereof to any Person (including the officers and directors of the parties hereto) or circumstance is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof, or the application of such provision to Persons or circumstances other than those as to which it has been held invalid or unenforceable, will remain in full force and effect and shall in no way be affected, impaired or invalidated thereby, so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such determination, the parties shall negotiate in good faith in an effort to agree upon a suitable and equitable substitute provision to effect the original intent of the parties.
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Section 5.13 Third Party Beneficiaries. This Agreement is for the sole benefit of the parties hereto and their respective successors and permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other Person or entity any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.
Section 5.14 Public Announcements. The Purchaser shall not, and shall cause its Affiliates not to, issue any press release or other public statements prior to the Company’s public announcement of the Purchase without the Company’s prior written consent or consultation, except as may be required by applicable Law or any listing agreement related to the trading of the Common Stock on the Exchange. Notwithstanding anything herein to the contrary and for greater clarity, the Purchaser shall not be required to obtain consent pursuant to this Section 5.14 to the extent any proposed press release or other public statement is substantially equivalent to the information that has previously been made public without breach of the obligation under this Section 5.14 and nothing in this Section 5.14 shall prevent or restrict the Purchaser or its Affiliates from furnishing customary information concerning the transactions contemplated hereby and publicly available information to their current or prospective limited partners or investors.
Section 5.15 Specific Performance. The parties agree that irreparable damage may occur in the event that any of the provisions of this Agreement and the transactions contemplated hereby were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that, without the necessity of posting bond or other undertaking, the parties shall be entitled to seek specific performance of the terms hereof, this being in addition to any other remedies to which they are entitled at law or equity, and in the event that any action or suit is brought in equity to enforce the provisions of this Agreement, no party will allege, and each party hereby waives the defense or counterclaim, that there is an adequate remedy at law.
Section 5.16 Termination. Prior to the Closing or the Option Closing, as the case may be, this Agreement may only be terminated:
(a) by mutual written agreement of the Company and the Purchaser (with respect to itself only);
(b) by the Company or the Purchaser (with respect to itself only), upon written notice to the other party in the event that the Closing shall not have occurred on or before 4:00 p.m., Houston time, on February 6, 2026; provided, however, that the right to terminate this Agreement pursuant to this Section 5.16(b) shall not be available to any party whose failure to fulfill any of its obligations under this Agreement shall have been the cause of, or shall have resulted in, the failure of the Closing to occur on or prior to such date;
(c) by the Company or the Purchaser (with respect to itself only) if a statute, rule, order, decree or regulation shall have been enacted or promulgated, or if any action shall have been taken by any Governmental Entity of competent jurisdiction that permanently restrains, permanently precludes, permanently enjoins or otherwise permanently prohibits the consummation of the transactions contemplated by this Agreement or makes the transactions contemplated by this Agreement illegal;
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(d) by written notice given by the Company to the Purchaser if there have been one or more inaccuracies in or breaches of one or more representations, warranties, covenants or agreements made by the Purchaser in this Agreement such that the conditions in Section 1.4(c)(i) or Section 1.4(c)(ii) would not be satisfied and which have not been cured by the Purchaser thirty (30) days after receipt by the Purchaser of written notice from the Company requesting such inaccuracies or breaches to be cured; or
(e) by written notice given by the Purchaser (with respect to itself only) to the Company, if there have been one or more inaccuracies in or breaches of one or more representations, warranties, covenants or agreements made by the Company in this Agreement such that the conditions in Section 1.4(b)(i) or Section 1.4(b)(ii) would not be satisfied and which have not been cured by the Company within thirty (30) days after receipt by the Company of written notice from the Purchaser requesting such inaccuracies or breaches to be cured.
Section 5.17 Effects of Termination. In the event of any termination of this Agreement pursuant to the penultimate sentence of Section 1.2 or in accordance with Section 5.16, no party (or any of its Affiliates) shall have any liability or obligation to the other party (or any of its Affiliates) under or in respect of this Agreement, except to the extent of any liability arising from any breach by such party of its obligations of this Agreement arising prior to such termination and any fraud or intentional or willful material breach of this Agreement. In the event of any such termination, this Agreement shall become void and have no effect, and the transactions contemplated hereby shall be abandoned without further action by the parties hereto, in each case, except as set forth in the preceding sentence and that the provisions of Section 5.2 through Section 5.15 and this Section 5.17 shall survive the termination of this Agreement.
Section 5.18 Non-Recourse. This Agreement may only be enforced against, and any claims or causes of action that may be based upon, arise out of or relate to this Agreement, or the negotiation, execution or performance of this Agreement may only be made against the entities that are expressly identified as parties hereto, including entities that become parties hereto after the Execution Date or that agree in writing for the benefit of the Company to be bound by the terms of this Agreement applicable to the Purchaser (with respect to itself only), and no former, current or future equityholders, controlling Persons, directors, officers, employees, agents or Affiliates of any party hereto or any former, current or future equityholder, controlling Person, director, officer, employee, general or limited partner, member, manager, agent or Affiliate of any of the foregoing (each, a “Non-Recourse Party”) shall have any liability for any covenants, obligations, agreements or liabilities of the parties to this Agreement or for any claim (whether in tort, contract or otherwise) based on, in respect of, or by reason of, the transactions contemplated hereby or in respect of any representations made or alleged to be made in connection herewith. Without limiting the rights of any party against the other party hereto, in no event shall any party or any of its Affiliates seek to enforce this Agreement against, make any claims for breach of this Agreement against, or seek to recover monetary damages from, any Non-Recourse Party.
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Section 5.19 Reliance. Notwithstanding anything to the contrary in this Agreement, each party hereto has relied upon and will be deemed to have relied upon for all purposes of this Agreement the other party’s express representations, warranties, covenants, agreements and indemnification obligations set forth in this Agreement.
Section 5.20 Recapitalization, Exchanges, Etc. The provisions of this Agreement shall apply to the full extent set forth herein with respect to any and all equity interests of the Company or any successor or assign of the Company (whether by merger, consolidation, sale of assets or otherwise) which may be issued in respect of, in exchange for or in substitution of, the Purchased Stock, and shall be appropriately adjusted for combinations, stock splits, recapitalizations and the like occurring after the date of this Agreement and prior to the Closing or the Option Closing, as the case may be.
[Signature Pages Follow]
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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the duly authorized officers of the parties hereto as of the date first herein above written.
| LEXICON PHARMACEUTICALS, INC. | ||
| By: | /s/ Scott Coiante | |
| Name: | Scott Coiante | |
| Title: | Senior Vice President and Chief Financial Officer | |
SIGNATURE PAGE TO PREFERRED STOCK PURCHASE AGREEMENT
| PURCHASER: | ||
| ARTAL PARTICIPATIONS S.À R.L. | ||
| By: | /s/ Pierre Claudel | |
| Name: | Pierre Claudel | |
| Title: | Manager | |
SIGNATURE PAGE TO PREFERRED STOCK PURCHASE AGREEMENT
EXHIBIT B
Form of Certificate of Designations
[Attached].
CERTIFICATE OF DESIGNATIONS
OF
SERIES B CONVERTIBLE PREFERRED STOCK
OF
LEXICON PHARMACEUTICALS, INC.
February 2, 2026
The undersigned, Brian T. Crum, Senior Vice President, General Counsel and Secretary of Lexicon Pharmaceuticals, Inc., a corporation organized and existing under the laws of the State of Delaware (the “Corporation”), in accordance with the provisions of Section 151(g) of the General Corporation Law of the State of Delaware (the “DGCL”), hereby certifies as follows:
1. Pursuant to the authority expressly vested in the Board of Directors of the Corporation (the “Board”) by the Sixth Amended and Restated Certificate of Incorporation of the Corporation (the “Charter”), the Board is authorized to provide for the issuance of up to 5,000,000 shares of preferred stock of the Corporation, par value of $0.01 per share (the “Preferred Stock”), of which none are presently issued and outstanding, by filing a certificate of the voting powers (if any), designations, preferences and relative, participating, optional or other rights, if any, and the qualifications, limitations or restrictions thereof, if any, pursuant to the applicable provisions of the DGCL, as are stated and expressed in the resolution or resolutions providing for the issuance thereof adopted by the Board.
2. Pursuant to Section 151 of the DGCL and the authority expressly vested by the Charter, the following resolutions were duly adopted by the Board on January 26, 2026:
WHEREAS, the Charter provides for the issuance from time to time of Preferred Stock in one or more series;
WHEREAS, the Board is authorized to fix the voting powers (if any), designations, preferences and relative, participating, optional or other rights, if any, and the qualifications, limitations or restrictions thereof, if any, pursuant to the applicable provisions of the DGCL; and
WHEREAS, it is the desire of the Board, pursuant to its authority as aforesaid, to create, provide for the issuance of, fix the voting powers (if any), designations, preferences and relative, participating, optional or other rights, if any, and the qualifications, limitations or restrictions of, if any, and fix other matters relating to, a series of the Preferred Stock designated as “Series B Convertible Preferred Stock,” which shall consist of 462,000 shares, par value of $0.01 per share.
NOW, THEREFORE, BE IT RESOLVED, that the Board does hereby create and provide for the issuance of a series of Series B Convertible Preferred Stock and does hereby fix the voting powers (if any), designations, preferences and relative, participating, optional or other rights, if any, and the qualifications, limitations or restrictions thereof, if any, and other matters relating to the shares of Series B Convertible Preferred Stock as follows:
Section 1. Liquidation.
(a) In the event of any liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary (a “Liquidation”), after payment or provision for payment of the debts and other liabilities of the Corporation and payment or setting aside for payment of any preferential amount due to the holders of any other class or series of stock, the holders of the Series B Convertible Preferred Stock shall be entitled to receive a payment of $0.01 per share of Series B Convertible Preferred Stock in preference (the “Liquidation Preference”) to the holders of, and before any payment or distribution is made on, any stock ranking junior to the Series B Convertible Preferred Stock, including, without limitation, on the Corporation’s common stock, par value of $0.01 per share (the “Common Stock”). Following the payment of the Liquidation Preference, the holders of the Series B Convertible Preferred Stock shall be entitled to receive the amount that such holders would have been entitled to receive if the Series B Convertible Preferred Stock were fully converted (disregarding for such purpose any conversion limitations hereunder) to Common Stock at the Conversion Ratio (as defined below), which amounts shall be paid pari passu with all holders of Common Stock.
(b) In the event the assets of the Corporation available for distribution to the holders of shares of Series B Convertible Preferred Stock upon any liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, shall be insufficient to pay in full all amounts to which such holders are entitled pursuant to Section 1(a), proportionate distributable amounts shall be paid on account of the shares of Series B Convertible Preferred Stock, equally and ratably, in proportion to the full distributable amounts for which holders of Series B Convertible Preferred Stock and of any stock that ranks on parity with the Series B Convertible Preferred Stock are entitled upon such liquidation, dissolution or winding up.
(c) Any distribution in connection with the liquidation, dissolution or winding up of the Corporation, or any bankruptcy or insolvency proceeding, shall be made in cash to the extent possible. Whenever any such distribution shall be paid in property other than cash, the value of such distribution shall be the fair market value of such property as determined in good faith by the Board.
Section 2. Voting. Except as provided in this Section 2, holders of Series B Convertible Preferred Stock shall not be entitled to vote on matters presented to the holders of Common Stock for approval. Notwithstanding the foregoing, as long as any shares of Series B Convertible Preferred Stock are outstanding, the Corporation shall not, without the affirmative vote of holders of two thirds (2/3) of the then outstanding shares of Series B Convertible Preferred Stock, voting as a separate class, (a) either directly or indirectly, by amendment, merger, consolidation or otherwise, alter, amend or repeal any provisions of this Certificate of Designations (as defined below), (b) authorize or create any class of equity securities ranking as to distribution of assets upon Liquidation senior to the Series B Convertible Preferred Stock or (c) enter into any agreement with respect to any of the foregoing. Any vote required or permitted under Section 2 may be taken at a meeting of the holders of Series B Convertible Preferred Stock or through the execution of an action by written consent in lieu of such meeting, provided that the consent is executed by holders of Series B Convertible Preferred Stock representing at least two thirds (2/3) of the outstanding shares of Series B Convertible Preferred Stock.
Section 3. Automatic Conversion. Except as provided in this Section 3, each share of Series B Convertible Preferred Stock shall automatically, and without any further action on the part of the holder thereof, convert into fifty shares of Common Stock (as it may be adjusted in accordance with Section 7(b), the “Conversion Ratio”) immediately following the satisfaction of all of the following conditions: (i) the approval of the Seventh Amended and Restated Certificate of Incorporation of the Corporation (the “New Charter”) by the stockholders of the Corporation (the “Stockholder Approval”), which shall increase the total authorized shares of Common Stock to a number (A) at least equivalent to the number required to permit the immediate conversion of all of the then outstanding shares of Series B Convertible Preferred Stock pursuant to the terms of this Certificate of Designations, without violating the organizational documents of the Corporation and (B) approved by all of the holders of Series B Convertible Preferred Stock (which approval shall not be unreasonably withheld, conditioned or delayed) (the “Authorized Share Increase”), (ii) the adoption of the New Charter by the Board, and (iii) the filing and acceptance of the New Charter with and by the Secretary of State of the State of Delaware, which shall be filed the same day as the date of Stockholder Approval (the “Conversion”); provided, however, no such automatic conversion shall be permitted until all consents, approvals or clearances with respect to, or termination or expiration of any applicable waiting period (and any extensions thereof) imposed under, The Hart Scott Rodino Antitrust Improvements Act of 1976, as amended (such consent, approval or clearance, “HSR Approval”) required for the conversion by the holders of Series B Preferred Stock, if any, shall have been obtained, received, deemed to have been received or terminated or expired as the case may be. The holders of the Series B Convertible Preferred Stock shall inform the Corporation when HSR Approval has been received. The Corporation shall within one (1) business day of the later of Stockholder Approval and confirmation from the holders of the Series B Convertible Preferred Stock that any necessary HSR Approval has been received, inform each holder of Series B Convertible Preferred Stock that the conditions to the Conversion have been satisfied and the effective date of the Conversion. The shares of Common Stock to be issued upon Conversion (the “Conversion Shares”) shall be issued as follows: (a) Series B Convertible Preferred Stock that is registered in book-entry form shall be automatically cancelled on the date of Conversion and converted into the corresponding Conversion Shares, which shares shall be issued in book-entry form and without any action on the part of the holders thereof and shall be delivered to the holders thereof within two (2) business days of the effectiveness of the Conversion; (b) Series B Convertible Preferred Stock that is issued in certificated form shall be deemed converted into the corresponding Conversion Shares on the date of Conversion and the holder’s rights as a holder of such shares of Series B Convertible Preferred Stock shall cease and terminate on such date, excepting only the right to receive the Conversion Shares within two (2) business Days of the effectiveness of the Conversion. The holder of Series B Convertible Preferred Stock shall surrender any stock certificate to the Corporation for cancellation within three (3) business days of the date the Conversion. Notwithstanding the cancellation of the Series B Convertible Preferred Stock upon Conversion, holders of Series B Convertible Preferred Stock shall continue to have any remedies provided herein or otherwise available at law or in equity to such holder because of a failure by the Corporation to comply with the terms of this Certificate of Designations, and in all cases, the holder shall retain all of its rights and remedies for the Corporation’s failure to convert the Series B Convertible Preferred Stock pursuant hereto.
Section 4. Consolidation, Merger, etc. In case the Corporation shall enter into any consolidation, merger, combination or other transaction in which the shares of Common Stock are exchanged for or changed into other stock or securities, cash and/or any other property (a “Fundamental Transaction”), then in any such case the shares of Series B Convertible Preferred Stock shall at the same time be similarly exchanged or changed in an amount per share equal to the Conversion Ratio multiplied by the aggregate amount of stock, securities, cash and/or any other property (payable in kind), as the case may be, into which or for which each share of Common Stock is changed or exchanged; provided, however, that in connection with any Fundamental Transaction contemplated by this Section 4 solely among or between the Corporation and one or more subsidiaries of the Corporation, each share of Series B Convertible Preferred Stock shall be exchanged for a share of senior preferred stock in the ultimate surviving parent entity in such transaction, having substantially the same designations, relative rights and preferences as the Series B Convertible Preferred Stock. To the extent necessary to effectuate the foregoing provisions, any successor to the Corporation or surviving entity in such Fundamental Transaction shall file a new certificate of designations with the same terms and conditions and issue to the holders of Series B Convertible Preferred Stock new preferred stock consistent with the foregoing provisions and evidencing such holders’ right to convert such preferred stock into such consideration. The terms of any agreement to which the Corporation is a party and pursuant to which such Fundamental Transaction is effected shall include terms requiring any such successor or surviving entity to comply with the provisions of this Section 4 and ensuring that the Series B Convertible Preferred Stock (or any such replacement security) will be similarly adjusted upon any subsequent transaction analogous to a Fundamental Transaction. The Corporation shall cause to be delivered to each holder of Series B Convertible Preferred Stock, at its last address as it shall appear upon the stock books of the Corporation, written notice of any Fundamental Transaction at least five (5) calendar days prior to the date on which such Fundamental Transaction is expected to become effective or close.
Section 5. Other Provisions.
(a) Best Efforts. The Corporation shall use its best efforts to effect the automatic conversion as provided in Section 3 above, which, for the avoidance of doubt, shall include obtaining the vote to effect the Authorized Share Increase.
(b) Record Holders. The Corporation and its transfer agent, if any, for the Series B Convertible Preferred Stock may deem and treat the record holder of any shares of Series B Convertible Preferred Stock as reflected on the books and records of the Corporation as the sole, true and lawful owner thereof for all purposes, and neither the Corporation nor any such transfer agent shall be affected by any notice to the contrary.
(c) Fractional Shares. No fractional shares of Common Stock shall be issued upon conversion of shares of the Series B Convertible Preferred Stock. Instead of any fractional shares of Common Stock that would otherwise be issuable upon conversion of any shares of the Series B Convertible Preferred Stock, the Corporation shall pay cash equal to such fraction multiplied by the closing price of a share of Common Stock on The Nasdaq Stock Market on such date.
(d) Tax Matters.
| (i) | The Corporation and its paying agent shall be entitled to withhold taxes on all payments made to the relevant holder of the Series B Convertible Preferred Stock or Common Stock issued upon conversion of the Series B Convertible Preferred Stock to the extent required by law. The Corporation and its paying agent shall be entitled to satisfy any required withholding tax on non-cash payments (including deemed payments and in connection with any conversion) through cash dividends, shares of Common Stock or sales proceeds paid, subsequently paid or credited (or on the consideration otherwise delivered with respect to such holder or its successors or assigns). Notwithstanding the foregoing, the Corporation agrees that absent a change in applicable law, (i) no U.S. federal withholding shall apply to a conversion of the Series A Preferred Stock into Common Stock pursuant to the terms hereof and (ii) it will not treat the Series B Convertible Preferred Stock as “preferred stock” within the meaning of Section 305 of the Internal Revenue Code of 1986, as amended, and U.S. Treasury Regulations Section 1.305-5. |
| (ii) | The Corporation shall pay any and all issue, documentary, stamp and other similar taxes, excluding any income, franchise, property or similar taxes, that may be payable in respect of any issue or delivery of Common Stock on conversion of Series B Convertible Preferred Stock pursuant hereto. However, a holder of the Series B Convertible Preferred Stock shall pay any tax that is due because Common Stock issuable upon conversion of Series B Convertible Preferred Stock are issued in a name other than such holder’s name. |
Section 6. Restriction and Limitations. Except as required by law so long as any shares of Series B Convertible Preferred Stock remain outstanding, the Corporation shall not, without the written consent of the holders of at least two-thirds (2/3) of the then outstanding shares of the Series B Convertible Preferred Stock, take any action which would adversely and materially affect any of the preferences, limitations or relative rights of the holders of Series B Convertible Preferred Stock.
Section 7. Dividends and Stock Splits.
(a) The holders of the Series B Convertible Preferred Stock shall be entitled to receive, with respect to any distribution of cash or other property made to holders of Common Stock, the amount that such holders of Series B Convertible Preferred Stock would have been entitled to receive if the Series B Convertible Preferred Stock were fully converted (disregarding for such purpose any conversion limitations hereunder) to Common Stock at the Conversion Ratio on the record date for such distribution.
(b) If the Corporation, at any time while shares of the Series B Convertible Preferred Stock are outstanding: pays a stock dividend or otherwise makes a distribution or distributions payable in shares of Common Stock or Common Stock equivalents, subdivides outstanding shares of Common Stock into a larger number of shares, or combines (including by way of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares, then the number of shares of Common Stock issuable upon conversion in Section 3 shall be modified by multiplying the Conversion Ratio by a fraction of which the numerator shall be the number of shares of Common Stock (excluding any treasury shares of the Corporation) outstanding immediately after
such event, and of which the denominator shall be the number of shares of Common Stock (excluding any treasury shares of the Corporation) outstanding immediately before such event. Any adjustment made pursuant to this Section 7 shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification. Successive adjustments in the Conversion Ratio shall be made whenever any event specified above shall occur.
RESOLVED, FURTHER, that the Chief Executive Officer, the president or any vice-president, and the secretary or any assistant secretary, of the Corporation be and they hereby are authorized and directed to prepare and file this Certificate of Designations of Preferences, Rights and Limitations (this “Certificate of Designations”) in accordance with the foregoing resolutions and the applicable provisions of the DGCL.
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IN WITNESS WHEREOF, the undersigned has executed this Certificate of Designations as of the day and year first written above.
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| Brian T. Crum |
| Senior Vice President, General Counsel and Secretary |
SIGNATURE PAGE TO
CERTIFICATE OF DESIGNATIONS
Exhibit 99.1
NEWS RELEASE
FOR IMMEDIATE RELEASE
LEXICON ANNOUNCES PRICING OF APPROXIMATELY $94.6 MILLION PUBLIC
OFFERING AND CONCURRENT PRIVATE PLACEMENT
The Woodlands, Texas, January 29, 2026 – Lexicon Pharmaceuticals, Inc. (Nasdaq: LXRX) (“Lexicon”) today announced the pricing of its previously announced underwritten public offering of 32,000,000 shares of its common stock, par value $0.001. The shares of common stock being offered pursuant to the public offering are being offered at a public offering price of $1.30 per share. All of the shares are being offered by Lexicon. The gross proceeds from the public offering are expected to be $41.6 million, before deducting underwriting discounts and commissions and other offering expenses. The public offering is expected to close on or about February 2, 2026, subject to the satisfaction of customary closing conditions. In addition, Lexicon has granted the underwriters a 30-day option to purchase up to an additional 4,800,000 shares of common stock at the public offering price, less underwriting discounts and commissions.
In addition to the shares being sold in the underwritten public offering, Lexicon has agreed to sell, in a concurrent private placement for expected aggregate gross proceeds of approximately $41.1 million, (i) at a price of $1.30 per share of common stock, 22,400,000 shares of its common stock and (ii) at a price of $65.00 per share of series b convertible preferred stock (the “Series B Convertible Preferred Stock”), 184,366 shares of Series B Convertible Preferred Stock, which will be convertible into 9,218,290 shares of common stock, to an affiliate (the “Private Placement Purchaser”) of Invus, L.P., Lexicon’s largest stockholder, pursuant to its preemptive right under Lexicon’s Sixth Amended and Restated Certificate of Incorporation. The Private Placement Purchaser will also have the option, pursuant to such preemptive right, to purchase up to an additional 94,855 shares of Series B Convertible Preferred Stock, which will be convertible into 4,742,744 shares of common stock, at a price of $65.00 per share of Series B Convertible Preferred Stock, to the extent the underwriters exercise their option to purchase additional shares of common stock. In addition to its purchases pursuant to its preemptive right, the Private Placement Purchaser has also agreed to purchase an additional 182,779 shares of Series B Convertible Preferred Stock, which will be convertible into 9,138,966 shares of common stock, at a price of $65.00 per share of Series B Convertible Preferred Stock, for expected additional aggregate gross proceeds of approximately $11.9 million.
The securities being offered to the Private Placement Purchaser will not be registered under the Securities Act of 1933, as amended (the “Securities Act”). Such issuances are also scheduled to close on or about February 2, 2026, subject to the closing of the public offering and the satisfaction of certain other customary closing conditions. The closing of the underwritten public offering is not conditioned on the closing of the concurrent private placement.
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Lexicon currently intends to use the net proceeds that it will receive from the proposed offering and the concurrent private placement (i) to fund the continued research and development of its drug candidates and (ii) for working capital and other general corporate purposes.
Jefferies and Piper Sandler are acting as joint book-running managers for the public offering. H.C. Wainwright & Co. is acting as lead manager for the public offering.
A shelf registration statement on Form S-3 relating to the public offering was filed with the U.S. Securities and Exchange Commission (“SEC”) on August 2, 2024 and declared effective by the SEC on August 15, 2024 (File No. 333-281208). The shares of common stock proposed to be issued in the concurrent private placement have not been registered under the Securities Act, or the securities laws of any state or other jurisdiction in the United States, and may not be offered, pledged, sold, delivered or otherwise transferred, directly or indirectly, in the United States except pursuant to registration under the Securities Act or an applicable exemption from the registration requirements of the Securities Act and, in each case, in compliance with other applicable securities laws. A preliminary prospectus supplement and accompanying prospectus relating to the public offering have been filed with the SEC and are available on the SEC’s website at www.sec.gov. A final prospectus supplement and accompanying prospectus will be filed with the SEC and will also be available on the SEC’s website at www.sec.gov. When available, copies of the final prospectus supplement and accompanying prospectus may also be obtained from Jefferies LLC, Attention: Equity Syndicate Prospectus Department, 520 Madison Avenue, New York, NY 10022, by e-mail at prospectus_department@jefferies.com or by telephone at (877) 821-7388; or Piper Sandler & Co., Attention: Prospectus Department, 350 North 5th Street, Suite 1000, Minneapolis, MN 55401, by telephone at (800) 747-3924, or via email at prospectus@psc.com.
This press release does not constitute an offer to sell, or the solicitation of an offer to buy, these securities, nor will there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale is not permitted.
About Lexicon Pharmaceuticals
Lexicon is a biopharmaceutical company with a mission of pioneering medicines that transform patients’ lives. Lexicon has a pipeline of drug candidates in discovery and clinical and preclinical development in neuropathic pain, hypertrophic cardiomyopathy (HCM), obesity, metabolism and other indications.
Safe Harbor Statement
This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended. All forward-looking statements, including, without limitation, statements about the completion and timing of the offering, the use of proceeds from the offering and the grant of the option to the underwriters and the private placement purchaser to purchase additional shares, are based on management’s current assumptions and expectations and involve risks, uncertainties and other important factors, specifically including Lexicon’s ability to meet its capital requirements, obtain patent protection for its discoveries and establish strategic alliances, as well as additional factors relating to manufacturing, intellectual property rights, and the therapeutic or
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commercial value of its drug candidates. Any of these risks, uncertainties and other factors may cause Lexicon’s actual results to be materially different from any future results expressed or implied by such forward-looking statements. Information identifying such important factors is contained under “Risk Factors” in Lexicon’s Annual Report on Form 10-K for the year ended December 31, 2024, and our subsequently filed Quarterly Reports on Form 10-Q for the quarter ended March 31, 2025, the quarter ended June 30, 2025 and the quarter ended September 30, 2025 and other subsequent disclosure documents filed with the SEC. Lexicon undertakes no obligation to update or revise any such forward-looking statements, whether as a result of new information, future events or otherwise.
For Investor and Media Inquiries:
Lisa DeFrancesco
Lexicon Pharmaceuticals, Inc.
lexinvest@lexpharma.com
Registration Statement
Lexicon has filed a registration statement (including a prospectus) with the SEC for the equity offering to which this communication relates. Before you invest, you should read the preliminary prospectus supplement and the accompanying prospectus in that registration statement and other documents Lexicon has filed with the SEC for more complete information about Lexicon and the equity offering. You may get these documents for free by visiting EDGAR on the SEC’s website at www.sec.gov. Copies of the preliminary prospectus supplement and accompanying prospectus may also be obtained from Jefferies LLC, Attention: Equity Syndicate Prospectus Department, 520 Madison Avenue, New York, NY 10022, by e-mail at prospectus_department@jefferies.com or by telephone at (877) 821-7388; or Piper Sandler & Co., Attention: Prospectus Department, 350 North 5th Street, Suite 1000, Minneapolis, MN 55401, by telephone at (800) 747-3924, or via email at prospectus@psc.com.