Exhibit 10.2
 
 
 
 
 

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AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT
 
between
 
 
LEXICON PHARMACEUTICALS, INC.
 
 
and
 
 
SYMPHONY ICON HOLDINGS LLC
 
 
_______________________________
 
Dated as of July 30, 2010
 
_______________________________
 
 
 
 

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Table of Contents
 
 
Section
 
 
Page
     
 
Section 1.
 
Definitions
 
1
 
Section 2.
 
Registration
 
2
 
Section 3.
 
Related Obligations
 
4
 
Section 4.
 
Obligations of the Investor(s)
 
7
 
Section 5.
 
Expenses of Registration
 
8
 
Section 6.
 
Indemnification
 
8
 
Section 7.
 
Contribution
 
13
 
Section 8.
 
Reports Under The Exchange Act
 
13
 
Section 9.
 
Assignment of Registration Rights
 
14
 
Section 10.
 
Amendment
 
14
 
Section 11.
 
Miscellaneous
 
14
 
Section 12.
 
Original Agreement
 
17

 
Exhibit A -- Form of Selling Stockholder Questionnaire
 
 
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AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT
 
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as
of July 30, 2010, by and between LEXICON PHARMACEUTICALS, INC., a Delaware
corporation (“Lexicon”), and SYMPHONY ICON HOLDINGS LLC, a Delaware limited
liability company (together with its permitted successors, assigns and
transferees, “Holdings”).
 
RECITALS:
 
WHEREAS, in connection with the exercise by Lexicon of the Purchase Option under
the Amended and Restated Purchase Option Agreement, by and among Lexicon,
Holdings and Symphony Icon, Inc., a Delaware corporation (“Symphony Icon”), of
even date herewith (the “Purchase Option Agreement”), Lexicon may elect to issue
shares of Lexicon’s common stock, par value $0.001 per share (“Lexicon Common
Stock”) (such shares of Lexicon Common Stock when and if issued, the “Purchase
Option Shares”) to Holdings in partial payment of the Purchase Price in
accordance with the terms of the Purchase Option Agreement;
 
WHEREAS, in connection with the Share Purchase Agreement by and between the
parties hereto dated as of June 15, 2007 (the “Share Purchase Agreement”),
Lexicon agreed, upon the terms and subject to the conditions of the Share
Purchase Agreement, to issue and sell to Holdings certain shares of Lexicon
Common Stock (the “Shares”);
 
WHEREAS, Lexicon and Holdings are parties to that certain Registration Rights
Agreement, dated as of June, 15, 2007 (the “Original Agreement”), pursuant to
which Lexicon has agreed to provide certain registration rights under the
Securities Act of 1933, as amended (the “Securities Act”), and applicable state
securities laws with respect to the Shares and the Purchase Option Shares; and
 
WHEREAS, the parties to the Original Agreement desire to amend and restate the
Original Agreement and accept the rights and covenants hereof in lieu of their
rights and covenants under the Original Agreement.
 
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Lexicon and Holdings (the
“Parties”) hereby agree as follows:
 
Section 1.              Definitions.
 
(a)           Capitalized terms used but not defined herein are used as defined
in the Purchase Option Agreement (including Annex A thereto).
 
 
 

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(b)           As used in this Agreement, the following terms shall have the
following meanings:
 
(i)           “Effective Registration Date” means the date that the Registration
Statement (as defined below) is first declared effective by the SEC.
 
(ii)           “Investor(s)” means Holdings, any transferee or assignee thereof
to whom Holdings assigns its rights under this Agreement and who agrees to
become bound by the provisions of this Agreement in accordance with Section 9
and any transferee or assignee thereof to whom a transferee or assignee assigns
its rights under this Agreement and who agrees to become bound by the provisions
of this Agreement in accordance with Section 9.
 
(iii)           “Purchase Option Related Registrable Securities” means (i) the
Purchase Option Shares, and (ii) any Lexicon Common Stock issued with respect to
the Purchase Option Shares as a result of any stock split, stock dividend,
recapitalization, exchange or similar event or otherwise.
 
(iv)           “register,” “registered,” and “registration” refer to a
registration effected by preparing and filing one or more Registration
Statements in compliance with the Securities Act and pursuant to Rule 415, and
the declaration or ordering of effectiveness of such Registration Statement(s)
by the SEC.
 
(v)           “Registrable Securities” means, collectively, the Share Purchase
Related Registrable Securities and the Purchase Option Related Registrable
Securities; provided, however, that such securities will cease to be Registrable
Securities on the earlier of (A) the date as of which the Investor(s) may sell
all such securities without restriction pursuant to Rule 144(b)(1) (or successor
thereto) promulgated under the Securities Act, or (B) the date on which the
Investor(s) shall have sold all such securities, in each case, such date shall
be the earlier to occur following the final Payment Date on which Purchase
Option Related Registrable Securities are issued in full or partial payment of
the Purchase Price.
 
(vi)           “Registration Statement” means a registration statement or
registration statements of Lexicon filed under the Securities Act covering the
Registrable Securities.
 
(vii)           “Rule 144” has the meaning set forth in Section 8 of this
Agreement.
 
(viii)           “Rule 415” means Rule 415 under the Securities Act or any
successor rule providing for offering securities on a continuous or delayed
basis.
 
(ix)           “Share Purchase Related Registrable Securities” means (i) the
Shares; and (ii) any shares of capital stock issued or issuable with respect to
the Shares as a result of any stock split, stock dividend, recapitalization,
exchange or similar event or otherwise.
 
 
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Section 2.              Registration.
 
(a)           Right to Registration.
 
(i)           Purchase Option Related Registration.  Subject to the terms of the
Purchase Option Agreement, (A) Lexicon shall include all of the Purchase Option
Related Registrable Securities to be issued to Holdings in full or partial
payment of any installment of the Purchase Price in a Registration Statement
that is effective under the Securities Act upon its filing with the SEC on the
applicable Payment Date, or (B) if Lexicon is not eligible to include all such
Purchase Option Related Registrable Securities in such effective Registration
Statement, Lexicon shall (1) prepare and file with the SEC a short form
Registration Statement on Form S-3 under the Securities Act (or any successor
form providing for forward incorporation by reference) permitting the immediate
resale without restriction of all Purchase Option Related Registrable Securities
to be issued to Holdings in full or partial payment of any installment of the
Purchase Price prior to the Payment Date immediately upon determination of the
number of Registrable Securities to be issued to Holdings on the relevant
Payment Date; and (2) use its best efforts to have such Registration Statement
declared effective prior to the Payment Date or as soon thereafter as possible,
subject to adjustment as provided in Sections 2(c) and 2(d).
 
(ii)           Share Purchase Related Registration.  Lexicon has filed with the
SEC a Registration Statement on Form S-3 (Reg. No. 333-144933) covering the
resale of all of the Share Purchase Related Registrable Securities.  Such
Registration Statement was declared effective on July 27, 2007 and is effective
as of the date hereof.  The Registration Statement prepared pursuant to this
Section 2(a)(ii) registered for resale at least that number of shares of Lexicon
Common Stock equal to the number of Share Purchase Related Registrable
Securities as of the trading day immediately preceding the date the Registration
Statement was initially filed with the SEC, subject to adjustment as provided in
Sections 2(c) and 2(d).
 
(b)           Reserved.
 
(c)           Sufficient Number of Shares Registered.  In the event the number
of shares available under a Registration Statement filed pursuant to
Section 2(a) is insufficient to cover all of the Registrable Securities required
to be covered by such Registration Statement, Lexicon shall amend the applicable
Registration Statement, or file a new Registration Statement (on the short form
available therefor, if applicable), or both, so as to cover at least 100% of the
number of such Registrable Securities (in the case of Purchase Option Related
Registrable Securities, to be issued on the applicable Payment Date) as of the
trading day immediately preceding the date of the filing of such amendment or
new Registration Statement (subject to adjustment as provided in Section 2(d)),
in each case, as soon as practicable, but in any event not later than fifteen
(15) days after Lexicon becomes aware of the necessity therefor.  Lexicon shall
use commercially reasonable efforts to cause such amendment and/or new
Registration Statement to become effective as soon as practicable following the
filing thereof.  For purposes of the foregoing provision, the number of shares
available under a Registration Statement shall be deemed “insufficient to cover
all of the Registrable Securities” if at any time the number of shares of
Lexicon Common Stock available for resale under such Registration Statement is
less than the number of Registrable Securities.
 
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(d)           Excluded Registrable Securities.  Notwithstanding any other
provision of this Agreement to the contrary, Lexicon shall have no obligation to
include under any Registration Statement the sale of any Registrable Securities
for which an Investor (i) fails to furnish to Lexicon a Selling Stockholder
Questionnaire or other reasonably requested information or documentation as
provided by Section 4(a) or (ii) otherwise elects to exclude from such
Registration Statement.
 
Section 3.              Related Obligations.  At such time as Lexicon is
obligated to file a Registration Statement with the SEC pursuant to
Section 2(a), (b) or (c), Lexicon will use commercially reasonable efforts to
effect the registration of the Registrable Securities in accordance with the
intended method of disposition thereof and, pursuant thereto (except at such
times as Lexicon may be required to suspend the use of a prospectus forming a
part of the Registration Statement pursuant to Section 3(1), at which time
Lexicon’s obligations under Sections 3(a), (b), (c), (d), (i) and (k) may also
be suspended, as required), Lexicon shall have the following obligations:
 
(a)           Lexicon shall use commercially reasonable efforts to keep each
Registration Statement effective pursuant to Rule 415 at all times until the
earliest of (i) the date as of which the Investor(s) may sell all of the
Registrable Securities covered by such Registration Statement without
restriction pursuant to Rule 144(b)(1) (or successor thereto) promulgated under
the Securities Act, (ii) the date on which the Investor(s) shall have sold all
the Registrable Securities covered by such Registration Statement, or (iii) in
the case of a Registration Statement covering Purchase Option Related
Registrable Securities, two (2) years after the final Payment Date on which
Lexicon Common Stock was issued in full or partial payment of the Purchase Price
(the “Registration Period”).
 
(b)           Lexicon shall prepare and file with the SEC such amendments
(including post-effective amendments) and supplements to a Registration
Statement and the prospectus used in connection with such Registration Statement
as may be necessary to keep such Registration Statement effective at all times
during the Registration Period, and, during such period, comply with the
provisions of the Securities Act with respect to the disposition of all
Registrable Securities of Lexicon covered by such Registration Statement until
such time as all of such Registrable Securities shall have been disposed of in
accordance with the intended methods of disposition by the seller or sellers
thereof as set forth in such Registration Statement.  In the case of amendments
and supplements to a Registration Statement which are required to be filed
pursuant to this Agreement (including pursuant to this Section 3(b)) by reason
of Lexicon filing a report on Form 10-K, Form 10-Q or Form 8-K or any analogous
report under the Exchange Act, Lexicon shall have incorporated such report by
reference into such Registration Statement, if applicable, or shall file such
amendments or supplements with the SEC on the same day on which the Exchange Act
report is filed which created the requirement for Lexicon to amend or supplement
such Registration Statement.
 
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(c)           Lexicon shall furnish to each Investor whose Registrable
Securities are included in any Registration Statement, without charge, (i)
promptly after the same is prepared and filed with the SEC, at least one (1)
copy of such Registration Statement and any amendment(s) thereto, including
financial statements and schedules, and each preliminary prospectus; (ii) upon
the effectiveness of any Registration Statement, ten (10) copies of the
prospectus included in such Registration Statement and all amendments and
supplements thereto (or such other number of copies as such Investor may
reasonably request); and (iii) such other documents, including copies of any
preliminary or final prospectus, as such Investor may reasonably request from
time to time in order to facilitate the disposition of the Registrable
Securities owned by such Investor.
 
(d)           Lexicon shall use commercially reasonable efforts to (i) register
and qualify, unless an exemption from registration and qualification applies,
the resale by Investor(s) of the Registrable Securities covered by a
Registration Statement under such other securities or “blue sky” laws of such
jurisdictions in the United States as Investor(s) reasonably request;
(ii) prepare and file in those jurisdictions such amendments (including
post-effective amendments) and supplements to such registrations and
qualifications as may be necessary to maintain the effectiveness thereof during
the Registration Period; and (iii) take such other actions as may be necessary
to maintain such registrations and qualifications in effect at all times during
the Registration Period; provided, however, that Lexicon shall not be required
in connection therewith or as a condition thereto to (x) qualify to do business
in any jurisdiction where it would not otherwise be required to qualify but for
this Section 3(d), (y) subject itself to general taxation in any such
jurisdiction, or (z) file a general consent to service of process in any such
jurisdiction.  Lexicon shall promptly notify each Investor who holds Registrable
Securities of the receipt by Lexicon of any notification with respect to the
suspension of the registration or qualification of any of the Registrable
Securities for sale under the securities or “blue sky” laws of any jurisdiction
in the United States or its receipt of actual notice of the initiation or
threatening of any proceeding for such purpose.
 
(e)           Lexicon shall notify each Investor in writing of the happening of
any event, as promptly as practicable after becoming aware of such event, as a
result of which the prospectus included in a Registration Statement, as then in
effect, includes an untrue statement of a material fact or omission to state a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, and, subject to Section 3(l) hereof, promptly prepare a supplement
or amendment to such Registration Statement to correct such untrue statement or
omission.  Lexicon shall also promptly notify each Investor in writing when a
prospectus or any prospectus supplement or post-effective amendment has been
filed, and when a Registration Statement or any post-effective amendment has
become effective.
 
 
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(f)           Lexicon shall use commercially reasonable efforts to prevent the
issuance of any stop order or other suspension of effectiveness of a
Registration Statement, or the suspension of the qualification of any of the
Registrable Securities for sale in any jurisdiction and, if such an order or
suspension is issued, to obtain the withdrawal of such order or suspension at
the earliest possible moment.
 
(g)           In the event that any Investor reasonably believes that it may be
deemed to be an “underwriter” with respect to the Registrable Securities, upon
the written request of such Investor in connection with such Investor’s due
diligence requirements, if any, Lexicon shall make available for inspection by
(i) such Investor, and (ii) any legal counsel, accountants or other agents
retained by the Investor (collectively, “Inspectors”), all pertinent financial
and other records, and pertinent corporate documents and properties of Lexicon
(collectively, “Records”), as shall be reasonably deemed necessary by each
Inspector, and cause Lexicon’s officers, directors and employees to supply all
information which any Inspector may reasonably request; provided, however, that
each Inspector and such Investor shall agree in writing to hold in strict
confidence and shall not make any disclosure (except with respect to an
Inspector, to the relevant Investor) or use of any Record or other information
which Lexicon determines in good faith to be confidential, and of which
determination the Inspectors are so notified, unless the release of such Records
is ordered pursuant to a final, non-appealable subpoena or order from a court or
government body of competent jurisdiction.  Each Investor agrees that it shall,
upon learning that disclosure of such Records is required or is sought in or by
a court or governmental body of competent jurisdiction or through other means,
give prompt notice to Lexicon and allow Lexicon, at its expense, to undertake
appropriate action to prevent disclosure of, or to obtain a protective order
for, the Records deemed confidential.  Nothing herein (or in any other
confidentiality agreement between Lexicon and any Investor) shall be deemed to
limit the Investor(s)’ ability to sell Registrable Securities in a manner which
is otherwise consistent with applicable laws and regulations.
 
(h)           Lexicon shall hold in confidence and not make any disclosure of
information concerning an Investor provided to Lexicon unless (i) disclosure of
such information is necessary to comply with federal or state securities laws or
the rules of any securities exchange or trading market on which the Lexicon
Common Stock is listed or traded, (ii) the disclosure of such information is
necessary to avoid or correct a misstatement or omission in any Registration
Statement, or (iii) the release of such information is ordered pursuant to a
subpoena or other final, non-appealable order from a court or governmental body
of competent jurisdiction.  Lexicon agrees that it shall, upon learning that
disclosure of such information concerning an Investor is sought in or by a court
or governmental body of competent jurisdiction or through other means, give
prompt written notice to such Investor and allow such Investor, at the
Investor’s expense, to undertake appropriate action to prevent disclosure of, or
to obtain a protective order for, such information.
 
(i)           Lexicon shall use commercially reasonable efforts either to
(i) cause all the Registrable Securities covered by a Registration Statement to
be listed on each securities exchange on which securities of the same class or
series issued by Lexicon are then listed, if any, if the listing of such
Registrable Securities is then permitted under the rules of such exchange, or
(ii) secure designation and quotation of all the Registrable Securities covered
by a Registration Statement on the NASDAQ Global Market.  Lexicon shall pay all
fees and expenses in connection with satisfying its obligation under this
Section 3(i).
 
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(j)           Lexicon shall cooperate with the Investor(s) who hold Registrable
Securities being offered and, to the extent applicable, facilitate the timely
preparation and delivery of certificates representing the Registrable Securities
to be offered pursuant to a Registration Statement and enable such certificates
to be in such denominations or amounts, as the case may be, as the Investor(s)
may reasonably request and registered in such names as the Investor(s) may
request.
 
(k)           If requested by an Investor, Lexicon shall (i) as soon as
practicable incorporate in a prospectus supplement or post-effective amendment
such information as an Investor reasonably requests to be included therein
relating to the sale and distribution of Registrable Securities, including,
without limitation, information with respect to the number of Registrable
Securities being offered or sold, the purchase price being paid therefor and any
other terms of the offering of the Registrable Securities to be sold in such
offering and (ii) as soon as practicable make all required filings of such
prospectus supplement or post-effective amendment after being notified of the
matters to be incorporated in such prospectus supplement or post-effective
amendment.
 
(l)           Notwithstanding anything to the contrary herein, at any time after
the Registration Statement has been declared effective by the SEC, Lexicon may
delay or suspend the effectiveness of any Registration Statement or the use of
any prospectus forming a part of the Registration Statement due to the
non-disclosure of material, non-public information concerning Lexicon the
disclosure of which at the time is not, in the good faith opinion of Lexicon, in
the best interest of Lexicon (a “Grace Period”); provided, that Lexicon shall
promptly notify the Investor(s) in writing of the existence of a Grace Period in
conformity with the provisions of this Section 3(l) and the date on which the
Grace Period will begin (such notice, a “Commencement Notice”); and, provided
further, that no Grace Period shall exceed thirty (30) consecutive days, and
such Grace Periods shall not exceed an aggregate total of ninety (90) days
during any three hundred sixty five (365) day period.  For purposes of
determining the length of a Grace Period above, the Grace Period shall begin on
and include the date specified by Lexicon in the Commencement Notice and shall
end on and include the date the Investor(s) receive written notice of the
termination of the Grace Period by Lexicon (which notice may be contained in the
Commencement Notice).  The provisions of Section 3(f) hereof shall not be
applicable during any Grace Period.  Upon expiration of the Grace Period,
Lexicon shall again be bound by the first sentence of Section 3(e) with respect
to the information giving rise thereto unless such material, non-public
information is no longer applicable.  Notwithstanding anything to the contrary,
Lexicon shall cause its transfer agent to deliver unlegended shares of Lexicon
Common Stock to a transferee of an Investor in accordance with the terms of the
Share Purchase Agreement in connection with any sale of Registrable Securities
with respect to which an Investor has entered into a contract for sale, and
delivered a copy of the prospectus included as part of the applicable
Registration Statement, prior to the Investor’s receipt of the notice of a Grace
Period and for which the Investor has not yet settled.
 
 
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Section 4.               Obligations of the Investor(s).
 
(a)           At least seven (7) Business Days prior to the first anticipated
filing date of a Registration Statement, Lexicon shall notify each Investor in
writing of the information Lexicon requires from each such Investor if such
Investor elects to have any of such Investor’s Registrable Securities included
in such Registration Statement and provide each such Investor with a copy of
Lexicon’s then-current selling stockholder questionnaire (a copy of which is
attached as Exhibit A hereto, a “Selling Stockholder Questionnaire”).  It shall
be a condition precedent to the obligations of Lexicon to complete the
registration pursuant to this Agreement with respect to the Registrable
Securities of a particular Investor that such Investor shall furnish to Lexicon
a completed Selling Stockholder Questionnaire, along with such other information
regarding itself, the Registrable Securities held by it and the intended method
of disposition of the Registrable Securities held by it as may reasonably be
required to effect the effectiveness of the registration of such Registrable
Securities, and shall execute other such documents in connection with such
registration as Lexicon may reasonably request.
 
(b)           Each Investor, by such Investor’s acceptance of the Registrable
Securities, agrees to cooperate with Lexicon as reasonably requested by Lexicon
in connection with the preparation and filing of any Registration Statement
hereunder, unless such Investor has notified Lexicon in writing of such
Investor’s election to exclude all of such Investor’s Registrable Securities
from such Registration Statement.
 
(c)           Each Investor agrees that, upon receipt of any notice from Lexicon
of the happening of any event of the kind described in Section 3(f) or the first
sentence of Section 3(e), such Investor will immediately discontinue disposition
of Registrable Securities pursuant to any Registration Statement(s) covering
such Registrable Securities until such Investor’s receipt of the copies of the
supplemented or amended prospectus contemplated by the second sentence of
Section 3(e) or receipt of notice that no supplement or amendment is required.
 
(d)           Each Investor covenants and agrees that it will comply with any
applicable prospectus delivery requirements of the Securities Act as applicable
to it in connection with sales of Registrable Securities pursuant to a
Registration Statement.
 
Section 5.              Expenses of Registration.  All reasonable expenses,
other than underwriting discounts and commissions, incurred in connection with
registrations, filings or qualifications pursuant to Sections 2 and 3 hereof,
including, without limitation, all registration, listing and qualifications
fees, printers and accounting fees, and fees and disbursements of counsel for
Lexicon shall be paid by Lexicon.  All underwriting discounts and selling
commissions applicable to the sale of the Registrable Securities shall be paid
by the Investor(s), provided, however, that Lexicon shall reimburse the
Investor(s) for the reasonable actual fees and disbursements of one legal
counsel designated by the holders of at least a majority of the Registrable
Securities in connection with registration, filing or qualification pursuant to
Sections 2 and 3 of this Agreement, which amount shall be limited to $25,000 in
total over the term of this Agreement.
 
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Section 6.               Indemnification.  In the event any Registrable
Securities are included in a Registration Statement under this Agreement:
 
(a)           To the fullest extent permitted by law, Lexicon will, and hereby
does, indemnify and hold harmless each Investor, the directors, officers,
partners, members, employees, agents, representatives of, and each Person, if
any, who controls any Investor within the meaning of the Securities Act or the
Exchange Act (each, an “Investor Indemnified Person”), against any losses,
claims, damages, liabilities, judgments, fines, penalties, charges, costs,
reasonable attorneys’ fees, amounts paid in settlement or expenses, joint or
several, (collectively, “Claims”), incurred in investigating, preparing or
defending any action, claim, suit, inquiry, proceeding, investigation or appeal
taken from the foregoing by or before any court or governmental, administrative
or other regulatory agency, body or the SEC, whether pending or threatened,
whether or not an Indemnified Person is or may be a party thereto (“Indemnified
Damages”), to which any of them may become subject to the extent that such
Claims (or actions or proceedings, whether commenced or threatened, in respect
thereof) arise out of or are based upon: (i) any untrue statement or alleged
untrue statement of a material fact in a prospectus, a Registration Statement or
any post-effective amendment thereto or in any filing made in connection with
the qualification of the offering under the securities or other “blue sky” laws
of any jurisdiction in which Registrable Securities are offered (“Blue Sky
Filing”), or the omission or alleged omission to state a material fact required
to be stated therein or necessary to make the statements therein not misleading;
(ii) any untrue statement or alleged untrue statement of a material fact
contained in any preliminary prospectus if used prior to the Effective
Registration Date of such Registration Statement, or contained in the final
prospectus (as amended or supplemented, if Lexicon files any amendment thereof
or supplement thereto with the SEC) or the omission or alleged omission to state
therein any material fact necessary to make the statements made therein, in the
light of the circumstances under which the statements therein were made, not
misleading; (iii) any violation or alleged violation by Lexicon of any federal,
state or common law, rule or regulation applicable to Lexicon in connection with
any Registration Statement, prospectus or any preliminary prospectus, any
amendment or supplement thereto, or the issuance of any Registrable Securities
to Holdings; or (iv) any material violation of this Agreement (the matters in
the foregoing clauses (i) through (iv) being, collectively,
“Violations”).  Subject to Section 6(c), Lexicon shall reimburse the Investor
Indemnified Persons, promptly as such expenses are incurred and are due and
payable, for any legal fees or other reasonable expenses incurred by them in
connection with investigating or defending any such Claim.  Notwithstanding
anything to the contrary contained herein, the indemnification agreement
contained in this Section 6(a):  (A) shall not apply to a Claim by an Investor
Indemnified Person arising out of or based upon a Violation that occurs in
reliance upon and in conformity with information furnished in writing to Lexicon
by or on behalf of any Investor Indemnified Person expressly for use in
connection with the preparation of the Registration Statement or any such
amendment thereof or supplement thereto if such information was timely made
available by Lexicon pursuant to Section 3(c); (B) with respect to any
preliminary prospectus, shall not inure to the benefit of any such Person from
whom the Person asserting any such Claim purchased the Registrable Securities
that are the subject thereof (or to the benefit of any Person controlling such
Person) if the untrue statement or omission of material fact contained in the
preliminary prospectus was corrected in the prospectus, as then amended or
supplemented, if such prospectus was timely made available by Lexicon pursuant
to Section 3(d), and the Investor Indemnified Person was promptly advised in
writing not to use the incorrect prospectus prior to the use giving rise to a
violation and such Investor Indemnified Person, notwithstanding such advice,
used it or failed to deliver the correct prospectus as required by the
Securities Act and such correct prospectus was timely made available pursuant to
Section 3(d); (C) shall not be available to the extent such Claim is based on a
failure of the Investor Indemnified Person to deliver or to cause to be
delivered the prospectus made available by Lexicon, including a corrected
prospectus, if such prospectus or corrected prospectus was timely made available
by Lexicon pursuant to Section 3(d); and (D) along with the agreement with
respect to contribution contained in Section 7, shall not apply to amounts paid
in settlement of any Claim if such settlement is effected without the prior
written consent of Lexicon, which consent shall not be unreasonably withheld or
delayed.  Such indemnity shall remain full force and effect regardless of any
investigation made by or on behalf of the Investor Indemnified Person and shall
survive the transfer of the Registrable Securities by the Investor(s) pursuant
to Section 9.  Lexicon shall also provide customary indemnities to any
underwriters of the Registrable Securities in an offering or sale of such
Registrable Securities by any Investor, their officers, directors and employees
and each Person who controls such underwriters (within the meaning of Section 15
of the Securities Act) to the same extent as provided above with respect to the
indemnification of Investor Indemnified Persons.
 
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(b)           In connection with any Registration Statement in which an Investor
is participating, each such Investor agrees to severally and not jointly
indemnify, and hold harmless, to the same extent and in the same manner as is
set forth in Section 6(a), Lexicon, each of its directors, each of its officers
who signs the Registration Statement, each Person, if any, who controls Lexicon
within the meaning of the Securities Act or the Exchange Act, and Lexicon’s
general counsel to the extent that such counsel delivers one or more legal
opinions in conjunction with the preparation and filing of the Registration
Statement (each, a “Company Indemnified Person”), against any Claim or
Indemnified Damages to which any of them may become subject, under the
Securities Act, the Exchange Act or otherwise, insofar as such Claim or
Indemnified Damages arise out of or are based upon any Violation, in each case
to the extent, and only to the extent, that such Violation occurs in reliance
upon and in conformity with written information furnished to Lexicon by such
Investor expressly for use in connection with such Registration Statement; and,
subject to Section 6(d), such Investor will reimburse, promptly as such expenses
are incurred and are due and payable, any legal or other expenses reasonably
incurred by a Company Indemnified Person in connection with investigating or
defending any such Claim; provided, however, that the indemnity agreement
contained in this Section 6(b) and the agreement with respect to contribution
contained in Section 7 shall not apply to amounts paid in settlement of any
Claim if such settlement is effected without the prior written consent of such
Investor, which consent shall not be unreasonably withheld or delayed; provided,
further, however, that an Investor shall be liable under this Section 6(b) for
only that amount of a Claim or Indemnified Damages as does not exceed the net
proceeds to such Investor as a result of the sale of Registrable Securities
pursuant to such Registration Statement.  Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of such
Company Indemnified Person and shall survive the transfer of the Registrable
Securities by the Investor(s) pursuant to Section 9.  Notwithstanding anything
to the contrary contained herein, the indemnification agreement contained in
this Section 6(b) with respect to any preliminary prospectus shall not inure to
the benefit of any Company Indemnified Person if the untrue statement or
omission of material fact contained in the preliminary prospectus was corrected
on a timely basis in the prospectus, as then amended or supplemented.
 
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(c)           If either an Investor Indemnified Person or a Company Indemnified
Person (an “Indemnified Person”) proposes to assert a right to be indemnified
under this Section 6, such Indemnified Person shall notify either Lexicon or the
relevant Investor(s), as applicable (the “Indemnifying Person”), promptly after
receipt of notice of commencement of any action, suit or proceeding against such
Indemnified Person (an “Indemnified Proceeding”) in respect of which a Claim is
to be made under this Section 6, or the incurrence or realization of any
Indemnified Damages in respect of which a Claim is to be made under this
Section 6, of the commencement of such Indemnified Proceeding or of such
incurrence or realization, enclosing a copy of all relevant documents, including
all papers served and claims made, but the omission to so notify the applicable
Indemnifying Person promptly of any such Indemnified Proceeding or incurrence or
realization shall not relieve (x) such Indemnifying Person from any liability
that it may have to such Indemnified Person under this Section 6 or otherwise,
except, as to such Indemnifying Person’s liability under this Section 6, to the
extent, but only to the extent, that such Indemnifying Person shall have been
prejudiced by such omission, or (y) any other Indemnifying Person from liability
that it may have to any Indemnified Person under the Operative Documents.
 
(d)           In case any Indemnified Proceeding shall be brought against any
Indemnified Person and it shall notify the applicable Indemnifying Person of the
commencement thereof as provided by Section 6(c) and such Indemnifying Person
shall be entitled to participate in, and provided such Indemnified Proceeding
involves a claim solely for money damages and does not seek an injunction or
other equitable relief against the Indemnified Person and is not a criminal or
regulatory action, to assume the defense of, such Indemnified Proceeding with
counsel reasonably satisfactory to such Indemnified Person, and after notice
from such Indemnifying Person to such Indemnified Person of such Indemnifying
Person’s election so to assume the defense thereof and the failure by such
Indemnified Person to object to such counsel within ten (10) Business Days
following its receipt of such notice, such Indemnifying Person shall not be
liable to such Indemnified Person for legal or other expenses related to such
Indemnified Proceedings incurred after such notice of election to assume such
defense except as provided below and except for the reasonable costs of
investigating, monitoring or cooperating in such defense subsequently incurred
by such Indemnified Person reasonably necessary in connection with the defense
thereof.  Such Indemnified Person shall have the right to employ its counsel in
any such Indemnified Proceeding, but the fees and expenses of such counsel shall
be at the expense of such Indemnified Person unless:
 
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(i)           the employment of counsel by such Indemnified Person at the
expense of the applicable Indemnifying Person has been authorized in writing by
such Indemnifying Person;
 
(ii)           such Indemnified Person shall have reasonably concluded in its
good faith (which conclusion shall be determinative unless a court determines
that such conclusion was not reached reasonably and in good faith) that there is
or may be a conflict of interest between the applicable Indemnifying Person and
such Indemnified Person in the conduct of the defense of such Indemnified
Proceeding or that there are or may be one or more different or additional
defenses, claims, counterclaims, or causes of action available to such
Indemnified Person (it being agreed that in any case referred to in this clause
(ii) such Indemnifying Person shall not have the right to direct the defense of
such Indemnified Proceeding on behalf of the Indemnified Person);
 
(iii)           the applicable Indemnifying Person shall not have employed
counsel reasonably acceptable to the Indemnified Person, to assume the defense
of such Indemnified Proceeding within a reasonable time after notice of the
commencement thereof; provided, however, that (A) this clause (iii) shall not be
deemed to constitute a waiver of any conflict of interest that may arise with
respect to any such counsel, and (B) an Indemnified Person may not invoke this
clause (iii) if such Indemnified Person failed to timely object to such counsel
pursuant to the first paragraph of this Section 6(d) above (it being agreed that
in any case referred to in this clause (iii) such Indemnifying Party shall not
have the right to direct the defense of such Indemnified Proceeding on behalf of
the Indemnified Party); or
 
(iv)           any counsel employed by the applicable Indemnifying Person shall
fail to timely commence or reasonably conduct the defense of such Indemnified
Proceeding, and such failure has prejudiced (or in the reasonable judgment of
the Indemnified Person, is in immediate danger of prejudicing) the outcome of
such Indemnified Proceeding (it being agreed that in any case referred to in
this clause (iv) such Indemnifying Party shall not have the right to direct the
defense of such Indemnified Proceeding on behalf of the Indemnified Party);
 
in each of which cases the fees and expenses of counsel for such Indemnified
Person shall be at the expense of such Indemnifying Person.  Only one counsel
shall be retained by all Indemnified Persons with respect to any Indemnified
Proceeding, unless counsel for any Indemnified Person reasonably concludes in
good faith (which conclusion shall be determinative unless a court determines
that such conclusion was not reached reasonably and in good faith) that there is
or may be a conflict of interest between such Indemnified Person and one or more
other Indemnified Persons in the conduct of the defense of such Indemnified
Proceeding or that there are or may be one or more different or additional
defenses, claims, counterclaims, or causes or action available to such
Indemnified Person.
 
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(e)           Without the prior written consent of such Indemnified Person, such
Indemnifying Person shall not settle or compromise, or consent to the entry of
any judgment in, any pending or threatened Indemnified Proceeding, unless such
settlement, compromise, consent or related judgment (i) includes an
unconditional release of such Indemnified Person from all liability for Losses
arising out of such claim, action, investigation, suit or other legal
proceeding, (ii) provides for the payment of money damages as the sole relief
for the claimant (whether at law or in equity), (iii) involves no admission of
fact adverse to such Indemnified Person or finding or admission of any violation
of law or the rights of any Person by the Indemnified Person, and (iv) is not in
the nature of a criminal or regulatory action.  No Indemnified Person shall or
compromise, or consent to the entry of any judgment in, any pending or
threatened Indemnified Proceeding (A) in respect of which any payment would
result hereunder or under any other Operative Document, (B) which includes an
injunction that will adversely affect any Indemnifying Person, (C) which
involves an admission of fact adverse to any Indemnifying Person or finding or
admission of any violation of law or the rights of any Person by the
Indemnifying Person, or (D) which is in the nature of a criminal or regulatory
action, without the prior written consent of the Indemnifying Person, such
consent not to be unreasonably conditioned, withheld or delayed.
 
(f)           The indemnification required by this Section 6 shall be made by
periodic payments of the amount of Claims during the course of the investigation
or defense, as and when Indemnified Damages are incurred.
 
Section 7.              Contribution.  To the extent any indemnification by an
Indemnifying Person is prohibited or limited by law, such Indemnifying Person
agrees to make the maximum contribution with respect to any amounts for which it
would otherwise be liable under Section 6 to the fullest extent permitted by
law; provided, however, that: (i) no Person involved in the sale of Registrable
Securities which Person is guilty of fraudulent misrepresentation (within the
meaning Section 11(f) of the Securities Act) in connection with such sale shall
be entitled to contribution from any Person involved in such sale of Registrable
Securities who was not guilty of fraudulent misrepresentation; and (ii) the
obligation to contribute shall be several and not joint and contribution by any
seller of Registrable Securities shall be limited in amount to the net amount of
proceeds received by such seller from the sale of such Registrable Securities
pursuant to such Registration Statement.
 
Section 8.             Reports Under The Exchange Act.  With a view to making
available to the Investor(s) the benefits of Rule 144 promulgated under the
Securities Act or any other similar rule or regulation of the SEC that may at
any time permit the Investor(s) to sell securities of Lexicon to the public
without registration (“Rule 144”), Lexicon agrees to use commercially reasonable
efforts to:
 
 
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(a)           make and keep public information available, as those terms are
understood and defined in Rule 144;
 
(b)           file with the SEC in a timely manner all reports and other
documents required of Lexicon under the Securities Act and the Exchange Act so
long as Lexicon remains subject to such requirements and the filing of such
reports and other documents is required for the applicable provisions of
Rule 144; and
 
(c)           furnish to each Investor so long as such Investor owns Registrable
Securities, promptly upon request, (i) a written statement by Lexicon, if true,
that it has complied with the reporting requirements of Rule 144, the Securities
Act and the Exchange Act, (ii) a copy of the most recent annual or quarterly
report of Lexicon and such other reports and documents so filed by Lexicon, and
(iii) such other information as may be reasonably requested to permit the
Investor(s) to sell such securities pursuant to Rule 144 without registration.
 
Section 9.             Assignment of Registration Rights.  The rights under this
Agreement shall be automatically assignable in full or in part by the
Investor(s) to any transferee of all or a portion of such Investor’s Registrable
Securities if: (i) the Investor agrees in writing with the transferee or
assignee to assign such rights, and a copy of such agreement is furnished to
Lexicon within a reasonable time after such assignment; (ii) Lexicon is, within
a reasonable time after such transfer or assignment, furnished with written
notice of (A) the name and address of such transferee or assignee, and (B) the
securities with respect to which such registration rights are being transferred
or assigned; (iii) immediately following such transfer or assignment the further
disposition of such securities by the transferee or assignee is restricted under
the Securities Act and applicable state securities laws; (iv) at or before the
time Lexicon receives the written notice contemplated by clause (ii) of this
sentence the transferee or assignee agrees in writing with Lexicon to be bound
by all of the provisions contained herein, including the obligation to provide
Lexicon with a completed Selling Stockholder Questionnaire, as applicable; and
(v) in the case of Share Purchase Related Registrable Securities, such transfer
shall have been made in accordance with the applicable transfer requirements set
forth in Article VI of the Share Purchase Agreement.
 
Section 10.             Amendment.
 
(a)           The terms of this Agreement shall not be altered, modified,
amended, waived or supplemented in any manner whatsoever except by a written
instrument signed by each of (i) Lexicon and (ii) Investor(s) holding a majority
of the Registrable Securities (other than in the case of any alteration,
modification, amendment, waiver or supplement which affects any individual
Investor in a manner that is less favorable or more detrimental to such Investor
than to the other Investor(s) solely based on the face of such alteration,
modification, amendment, waiver or supplement and without regard to the number
of Registrable Securities held by such Investor, in which case, such alteration,
modification, amendment, waiver or supplement must also be approved by such less
favorably or more detrimentally treated Investor).
 
 
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(b)           Notwithstanding Section 10(a), any party hereto may waive, solely
with respect to itself, any one or more of its rights hereunder without the
consent of any other party hereto; provided that no such waiver shall be
effective unless set forth in a written instrument executed by the party against
whom such waiver is to be effective.
 
Section 11.             Miscellaneous.
 
(a)           A Person is deemed to be a holder of Registrable Securities
whenever such Person owns or is deemed to own of record such Registrable
Securities.  If Lexicon receives conflicting instructions, notices or elections
from two or more Persons with respect to the same Registrable Securities,
Lexicon shall act upon the basis of instructions, notice or election received
from the such record owner of such Registrable Securities.
 
(b)           Any notice, request, demand, waiver, consent, approval or other
communication which is required or permitted to be given to any Party shall be
in writing addressed to the Party at its address set forth below and shall be
deemed given (i) when delivered to the Party personally, (ii) if sent to the
Party by facsimile transmission (promptly followed by a hard-copy delivered in
accordance with this Section 11(b)), when the transmitting Party obtains written
proof of transmission and receipt; provided, however, that notwithstanding the
foregoing, any communication sent by facsimile transmission after 5:00 PM
(receiving Party’s time) or not on a Business Day shall not be deemed received
until the next Business Day, (iii) when delivered by next Business Day delivery
by a nationally recognized courier service, or (iv) if sent by registered or
certified mail, when received, provided postage and registration or
certification fees are prepaid and delivery is confirmed by return receipt:
 

 
If to Lexicon:
     
Lexicon Pharmaceuticals, Inc.
8800 Technology Forest Place
The Woodlands, TX 77381-1160
Attn: Arthur T. Sands, M.D., Ph.D.
Facsimile:  (281) 863-8095
   
with copies to:
     
Lexicon Pharmaceuticals, Inc.
8800 Technology Forest Place
The Woodlands, TX 77381-1160
Attn:  Jeffrey L. Wade
Facsimile:  (281) 863-8010
      and
 
 

 
 
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Lexicon Pharmaceuticals, Inc.
8800 Technology Forest Place
The Woodlands, TX 77381-1160
Attn:  Brian T. Crum
Facsimile:  (281) 863-8010
   
If to Holdings:
     
Symphony Icon Holdings LLC
7361 Calhoun Place, Suite 325
Rockville, MD  20855
Attn:  Robert L. Smith, Jr.
Facsimile:  (301) 762-6154
   
with a copy to:
     
Symphony Capital Partners, L.P.
875 Third Avenue, 3rd Floor
New York, NY  10022
Attn:  Mark Kessel
Facsimile:  (212) 632-5401
    and
 
     
Symphony Strategic Partners, LLC
875 Third Avenue, 3rd Floor
New York, NY  10022
Attn:  Mark Kessel
Facsimile:  (212) 632-5401
 

 
or to such other address as such party may from time to time specify by notice
given in the manner provided herein to each other party entitled to receive
notice hereunder.
 
(c)           This Agreement shall be governed by, and construed in accordance
with, the laws of the State of New York; except to the extent that this
Agreement pertains to the internal governance of Holdings, and to such extent
this Agreement shall be governed and construed in accordance with the laws of
the State of Delaware.
 
(d)           Each of the parties hereto hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of any
New York State court, any Delaware State court or federal court of the United
States of America sitting in the City of New York, Borough of Manhattan or
Wilmington, Delaware, and any appellate court from any jurisdiction thereof, in
any action or proceeding arising out of or relating to this Agreement, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in any such New York State
court, any such Delaware State court or, to the fullest extent permitted by law,
in such federal court.  Each of the parties hereto agrees that a final judgment
in any such action or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided by
law.  Nothing in this Agreement shall affect any right that any party hereto may
otherwise have to bring any action or proceeding relating to this Agreement.
 
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(e)           Each of the parties hereto irrevocably and unconditionally waives,
to the fullest extent it may legally and effectively do so, any objection that
it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement in any New York State or
federal court, or any Delaware State or Federal court.  Each of the parties
hereto hereby irrevocably waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such action or proceeding
in any such court.  Each of the parties hereby consent to service of process by
mail.
 
(f)           WAIVER OF JURY TRIAL.  EACH OF THE PARTIES HERETO IRREVOCABLY
WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
(WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO
THIS AGREEMENT.
 
(g)           Entire Agreement.  This Agreement (including any Annexes,
Schedules, Exhibits or other attachments hereto) constitutes the entire
agreement between the parties hereto with respect to the matters covered hereby
and supersedes all prior and contemporaneous agreements, correspondence,
discussion and understandings with respect to such matters between the parties
hereto, excluding the Operative Documents.
 
(h)           Successors; Assignment; Counterparts.
 
(i)           Nothing expressed or implied herein is intended or shall be
construed to confer upon or to give to any Person, other than the parties
hereto, any right, remedy or claim under or by reason of this Agreement or of
any term, covenant or condition hereof, and all the terms, covenants,
conditions, promises and agreements contained herein shall be for the sole and
exclusive benefit of the parties hereto and their successors and permitted
assigns provided, however, that, subject to the requirements of Section 9, this
Agreement shall inure to the benefit of and be binding upon the permitted
successors and assigns of each of the parties hereto.
 
(ii)           This Agreement may be executed in one or more counterparts, each
of which, when executed, shall be deemed an original but all of which taken
together shall constitute one and the same Agreement.
 
(i)           Each party shall do and perform, or cause to be done and
performed, all such further acts and things, and shall execute and deliver all
such other agreements, certificates, instruments and documents, as any other
party may reasonably request in order to carry out the intent and accomplish the
purposes of this Agreement and the consummation of the transactions contemplated
hereby.
 
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(j)           All consents and other determinations required to be made by the
Investor(s) pursuant to this Agreement shall be made, unless otherwise specified
in this Agreement, by Investor(s) holding at least a majority of the Registrable
Securities.
 
Section 12.           Original Agreement.  The Original Agreement is hereby
amended and superseded in its entirety and restated herein.  Such amendment and
restatement is effective upon execution of this Agreement by the parties
hereto.  Upon such execution, all provisions of, rights granted and covenants
made in the Original Agreement are hereby superseded in their entirety by the
provisions hereof and shall have no further force or effect.
 
[SIGNATURES FOLLOW ON NEXT PAGE]
 
 
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective officers or other representatives thereunto duly authorized,
as of the date first above written.
 
 
LEXICON PHARMACEUTICALS, INC.
       
By:
/s/ Arthur T. Sands
Name:
Arthur T. Sands, M.D., Ph.D.
Title:
President and Chief Executive Officer

SYMPHONY ICON HOLDINGS LLC
   
By:
Symphony Capital Partners, L.P.,
its Manager
   
By:
Symphony Capital GP, L.P.,
its general partner
   
By:
Symphony GP, LLC,
its general partner

       
By:
/s/ Mark Kessel
Name:
Mark Kessel
Title:
Managing Member

 
 
 

 
 
 

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EXHIBIT A
 
FORM OF SELLING STOCKHOLDER QUESTIONNAIRE
 
NOTICE
 
The undersigned beneficial owner (the “Selling Securityholder”) of Registrable
Securities hereby gives notice to Lexicon Pharmaceuticals, Inc.  (the “Company”)
of its intention to sell or otherwise dispose of Registrable Securities
beneficially owned by it and listed below in Item 3 (unless otherwise specified
under such Item 3) pursuant to the Registration Statement, pursuant to the terms
of the Amended and Restated Registration Rights Agreement (the “Registration
Rights Agreement”) dated as of July 30, 2010, by and between Lexicon and
Symphony Icon Holdings LLC (“Holdings”).  Capitalized terms used but not defined
herein are used as defined in Registration Rights Agreement.
 
The undersigned hereby gives notice to the Company of its intention to sell the
Registrable Securities listed in Item 3 below, pursuant to the Registration
Statement and, provides the following information to the Company and represents
and warrants that such information is accurate and complete:
 
QUESTIONNAIRE
 
1.
Full legal name of Selling Securityholder:  ___________________

 
 
(a)
Full legal name of registered holder of the Registrable Securities (if not the
same as (1) above) through which Registrable Securities listed in Item 3 below
are held:  ___________________________

 
 
(b)
Full legal name of DTC participant (if applicable and if not the same as (1)
above) through which Registrable Securities listed in Item 3 below are
held:  ___________________________

 
 
(c)
Status (yes/no) of Selling Securityholder as a registered broker-dealer or an
affiliate of a registered broker-dealer (please describe to the extent
applicable):  ______________________________

 
2.           Address for notices to Selling
Securityholder:  ______________________
 

 
 
 
 
Telephone: _____________________

 

   
 
Fax: _____________________

 

   
Contact Per:son: _____________________

 
3.           Beneficial Ownership of Registrable Securities:
 
 
(a)
Type and number of Registrable Securities beneficially
owned:   _____________________

 
 
(b)
CUSIP No(s).  of such Registrable Securities beneficially owned:

 
 
 

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4.
Beneficial ownership of other securities of the Company owned by the Selling
Securityholder.

 
Except as set forth below in this Item 4, the undersigned is not the beneficial
or registered owner of any securities of the Company other than the Registrable
Securities listed above in Item 3.
 
 
(a)
Type and amount of other securities beneficially owned by the Selling
Securityholder:

 
 
(b)
CUSIP No(s).  of such other securities beneficially owned:

 
5.
Relationships with the Company:

 
Except as set forth below, neither the undersigned nor any of its affiliates,
officers, directors or principal equity holders (owners of 5% or more of the
equity securities of the undersigned) has held any position or office or has had
any other material relationship with the Company (or its predecessors or
affiliates) during the past three years.
 
State any exceptions here:
 

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6.           Plan of Distribution:
 
Except as set forth below, the undersigned (including its donees, distributees
or pledgees) intends to distribute the Registrable Securities listed above in
Item 3 pursuant to the Registration Statement only as follows (if at all).  Such
Registrable Securities may be sold from time to time directly by the undersigned
or, alternatively, through underwriters, broker-dealers or agents.  If the
Registrable Securities are sold through underwriters, broker-dealers or agents,
the Selling Securityholder will be responsible for any related underwriting
discounts or commissions or agents’ commissions.  Such Registrable Securities
may be sold in one or more transactions at fixed prices, at prevailing market
prices at the time of sale, at varying prices determined at the time of sale or
at negotiated prices.  The selling stockholders may sell their shares by one or
more of or a combination of the following methods: (i) purchases by a
broker-dealer as principal and resale by such broker-dealer for its own account
pursuant to this prospectus; (ii) ordinary brokerage transactions and
transactions in which the broker solicits purchasers; (iii) block trades in
which the broker-dealer so engaged will attempt to sell the shares as agent but
may position and resell a portion of the block as principal to facilitate the
transaction; (iv) an over-the-counter distribution in accordance with the rules
of the Nasdaq Global Market; (v) in privately negotiated transactions; and (vi)
in options transactions.  The undersigned may also sell Registrable Securities
short and deliver Registrable Securities to close out short positions, or loan
or pledge Registrable Securities to broker-dealers that in turn may sell such
securities.
 
 
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State any exceptions here:
 

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Note:  In no event will such method(s) of distribution take the form of an
underwritten offering of the Registrable Securities without the prior agreement
of the Company.
 
The undersigned acknowledges its obligation to comply with the provisions of the
Exchange Act and the rules thereunder relating to stock manipulation,
particularly Regulation M thereunder (or any successor rules or regulations), in
connection with any offering of Registrable Securities pursuant to the
Registration Rights Agreement.  The undersigned agrees that neither it nor any
person acting on its behalf will engage in any transaction in violation of such
provisions.
 
In the event that the Selling Securityholder transfers all or a portion of the
Registrable Securities listed in Item 3 above after the date on which such
information is provided to the Company, the Selling Securityholder agrees to
notify the transferee(s) at the time of the transfer of its rights and
obligations under this Questionnaire and the Registration Rights Agreement.
 
The Selling Securityholder hereby acknowledges its obligations under the
Registration Rights Agreement to indemnify and hold harmless certain persons as
set forth therein.
 
Pursuant to the Registration Rights Agreement, the Company has agreed under
certain circumstances to indemnify the Selling Securityholder against certain
liabilities.
 
In accordance with the undersigned’s obligation under the Registration Rights
Agreement to provide such information as may be required by law for inclusion in
the Registration Statement, the undersigned agrees to promptly notify the
Company of any inaccuracies or changes in the information provided herein that
may occur subsequent to the date hereof at any time while the Registration
Statement remains effective, including, without limitation, any change in the
undersigned’s beneficial ownership of Registrable Securities.
 
All notices hereunder and pursuant to the Registration Rights Agreement shall be
made in writing to the Selling Securityholder at the address set forth in
Section 2 above, and to the Company at the address set forth below.
 
By signing below, the undersigned consents to the disclosure of the information
contained herein in its answers to Items 1 through 6 above and the inclusion of
such information in the Registration Statement and the related prospectus.  The
undersigned understands that such information will be relied upon by the Company
in connection with the preparation or amendment of the Registration Statement
and the related prospectus.
 
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Once this Questionnaire is executed by the Selling Securityholder and delivered
to the Company, the terms of this Questionnaire, and the representations and
warranties contained herein, shall be binding on, shall inure to the benefit of
and shall be enforceable by the respective successors, heirs, personal
representatives and assigns of the Company and the Selling Securityholder (with
respect to the Registrable Securities beneficially owned by such Selling
Securityholder and listed in Item 3 above).  This Agreement shall be governed in
all respects by the laws of the State of New York.
 
IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this
Questionnaire to be executed and delivered either in person or by its duly
authorized agent.
 

 Dated:  
 
 
Beneficial Owner:
               By:        Name:        Title:  

 
PLEASE RETURN THE COMPLETED AND EXECUTED QUESTIONNAIRE TO LEXICON
PHARMACEUTICALS, INC.  AT:
 
8800 Technology Forest Place
The Woodlands, TX 77381-1160
Attn:  General Counsel
Facsimile:  (281) 863-8010
 
 
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