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EXHIBIT 10.175
STOCK AND WARRANT PURCHASE AGREEMENT
THIS STOCK AND WARRANT PURCHASE AGREEMENT is made as of the 17th day of
March, 1998, by and among Ligand Pharmaceuticals Incorporated, a Delaware
corporation (the "Company"), SmithKline Xxxxxxx plc, an English public limited
company ("Investor"), and SmithKline Xxxxxxx Corporation, a Pennsylvania
corporation ("SBC").
THE PARTIES HEREBY AGREE AS FOLLOWS:
1. Purchase and Sale of Shares and Warrant.
1.1 Sale and Issuance of Shares and Warrant. SBC shall have joint
and several liability for all of Investor's obligations under this Section 1.1.
(a) First Installment. Subject to the terms and conditions of
this Agreement, Investor agrees to pay $5,000,000 ("First Installment") to the
Company at the Closing and the Company agrees to sell and issue to Investor at
the Closing the number of shares (the "First Installment Shares") of the
Company's Common Stock equal to $5,000,000 divided by $18.22 (which is 120% of
the average daily closing price of the Company's Common Stock reported by the
National Association of Securities Dealers, Inc. ("NASD") for the fifteen (15)
trading days preceding the fifth (5th) day prior to the date hereof).
(b) Second Installment. Subject to the terms and conditions of
this Agreement, Investor agrees to pay $2,250,000 (the "Second Installment") to
the Company and the Company agrees to sell and issue to Investor the number of
shares (the "Second Installment Shares") of the Company's Common Stock equal to
*** divided by 120% of the average daily closing price of the Company's Common
Stock reported by the NASD on the *** to the Second Installment Date (as defined
below). Investor shall pay the Second Installment to the Company if and when the
requirements of the milestone set forth in Section 7.1 (the "Milestone") of the
Leptin Research, Development and License Agreement of even date herewith between
the Company and Investor (the "Research Agreement") are met. The Company shall
deliver written notice to Investor, including documentation of the LRC action
(as defined in the Research Agreement), of the satisfaction of the requirements
of the Milestone, and shall simultaneously deliver a written certification that
the representations and covenants of the Company set forth in Section 2 of this
Agreement are true and correct with respect to the Second Installment Shares as
of the date of such notice. The date on which such notice is delivered shall be
the "Second Installment Date". Investor shall deliver the Second Installment to
the Company in accordance with Section 1.2 within thirty (30) days of the Second
Installment Date and shall simultaneously deliver a written verification that
the representations and covenants of Investor set forth in Section 3 of this
Agreement are true and correct with respect to the Second Installment Shares as
of the date of delivery of the Second
***Certain confidential portions of this Exhibit were omitted by means
of blackout of the text (the "Xxxx"). This Exhibit has been filed
separately with the Secretary of the Commission without the Xxxx
pursuant to the Company's Application Requesting Confidential Treatment
under Rule 24b-2 under the Exchange Act.
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Installment Shares. Upon delivery of the Second Installment to the Company by
Investor, the Company shall issue and deliver to Investor a certificate
representing the Second Installment Shares (free and clear of all liens, claims
and other encumbrances except as otherwise provided herein and in the
Registration Rights Agreement (as defined below)).
(c) Sale and Issuance of Warrant. Subject to the terms and
conditions of this Agreement, Investor agrees to pay $1,000,000 (the "Warrant
Purchase Price") to the Company at the Closing and the Company agrees to sell
and issue to Investor at the Closing the Common Stock Purchase Warrant in the
form attached hereto as Exhibit A (the "Warrant").
1.2 Closing. The purchase and sale of the First Installment
Shares and the Warrant shall take place at the offices of Xxxxxxx, Xxxxxxx &
Xxxxxxxx LLP, 000 Xxxx "X" Xxxxxx, Xxxxx 0000, Xxx Xxxxx, Xxxxxxxxxx, within
three (3) business days after the date on which all conditions to closing set
forth in Section 4 and Section 5 have been satisfied, or at such other time and
place as the Company and Investor mutually agree upon orally or in writing
(which time and place are designated as the "Closing"). At the Closing the
Company shall deliver to Investor (i) a certificate representing the First
Installment Shares and (ii) the Warrant (both of which shall be free and clear
of all liens, claims and other encumbrances except as otherwise provided herein
and in the Registration Rights Agreement (as defined below)). In consideration
of such delivery, Investor shall make payment of the purchase prices for the
First Installment Shares and the Warrant by delivery to the Company of the First
Installment and the Warrant Purchase Price. Such payments by Investor at the
Closing and all payments with respect to the Second Installment shall be in
immediately-available funds in the form of a certified or cashier's check
payable to the Company's order or by wire transfer of funds to the Company's
designated bank account. Notwithstanding anything to the contrary in this
Agreement or the Research Agreement, either Ligand separately or Investor and
SBC jointly shall be entitled to terminate this Agreement and the Research
Agreement in the event the Closing has not occurred on or before June 1, 1998.
2. Representations and Warranties of the Company. Except as otherwise
set forth on the Schedule of Exceptions attached hereto as Exhibit B, the
Company hereby represents and warrants to Investor that:
2.1 Organization, Good Standing and Qualification. The Company is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has all requisite corporate power and
authority to carry on its business as now conducted and as proposed to be
conducted. The Company is duly qualified to transact business and is in good
standing in each jurisdiction in which the failure so to qualify would be
reasonably expected to have a material adverse effect on the business,
operations, properties, assets, prospects or condition (financial or otherwise)
of the Company (a "Material Adverse Effect"). Except as disclosed in the Form
10-K (as defined herein), the Company has no subsidiaries.
2.2 Authorization. The Company has all requisite corporate power
and authority (i) to execute, deliver and perform its obligations under this
Agreement, the Registration Rights Agreement and the Research Agreement; (ii) to
issue the Securities (as defined herein) in the manner and for the purpose
contemplated by this Agreement, and
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(iii) to execute, deliver and perform its obligations under all other agreements
and instruments executed and delivered by it pursuant to or in connection with
this Agreement, the Registration Rights Agreement and the Research Agreement.
All corporate action on the part of the Company, its officers, directors and
stockholders necessary for the authorization, execution and delivery of this
Agreement, the Securities, the Ninth Addendum to Amended Registration Rights
Agreement of even date herewith, which makes Investor a party to the Amended
Registration Rights Agreement between the Company and certain of its
stockholders (collectively, the "Registration Rights Agreement"), and the
Research Agreement, the performance of all obligations of the Company hereunder
and thereunder and the authorization, issuance (or reservation for issuance) and
delivery of the Securities has been taken or will be taken prior to the Closing,
and this Agreement, the Warrant (when issued and fully paid for), the
Registration Rights Agreement and the Research Agreement constitute valid and
legally binding obligations of the Company, enforceable in accordance with their
respective terms, except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, and other laws of general application affecting
enforcement of creditors' rights generally and (ii) as limited by laws relating
to the availability of specific performance, injunctive relief, or other
equitable remedies.
2.3 Valid Issuance of Securities. The First Installment Shares
and the Second Installment Shares, if any (collectively, the "Shares") and the
Warrant which are being purchased hereunder and the shares of Common Stock
issuable upon exercise of the Warrant, when each are issued, sold and delivered
in accordance with the terms hereof and thereof for the consideration expressed
herein and therein, will be duly and validly issued, fully paid and
nonassessable and, based in part upon the representations of Investor in this
Agreement, the Shares and the Warrant will be issued in compliance with all
applicable federal and state securities laws.
2.4 SEC Reports. The Company has heretofore filed with the
Securities and Exchange Commission (the "SEC") pursuant to the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), all reports and other
documents required to be filed, including an Annual Report on Form 10-K for the
year ended December 31, 1996 (the "Form 10-K"). None of such reports, or any
other reports, documents, registration statements, definitive proxy materials
and other filings required to be filed with the SEC under the rules and
regulations of the SEC (the "SEC Filings") contains any untrue statement of a
material fact or omits to state a material fact required to be stated therein or
necessary in order to make the statements made, at the time and in light of the
circumstances under which they were made, not misleading. Since December 31,
1996, the Company has timely filed with the SEC all SEC Filings and all such SEC
Filings complied in all material respects with all applicable requirements of
the Securities Act of 1933, as amended (the "Securities Act"), the Exchange Act,
and the rules thereunder. The audited financial statements of the Company
included or incorporated by reference in the 1996 Annual Report and the
unaudited financial statements contained in the quarterly reports on Form 10-Q
each have been prepared in accordance with such acts and rules and with United
States generally accepted accounting principles applied on a consistent basis
throughout the periods indicated therein and with each other, except as may be
indicated therein or in the notes thereto and except that the unaudited interim
financial statements may not contain all footnotes and adjustments required by
United States generally accepted accounting principles, and fairly present the
financial condition of the Company as at the dates thereof and the results of
its operations and statements of cash flows for the periods
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then ended, subject, in the case of unaudited interim financial statements, to
normal year-end adjustments. Except as reflected in such financial statements,
the Company has no material liabilities, absolute or contingent, other than
ordinary course liabilities incurred since the date of the last such financial
statements in connection with the conduct of the business of the Company. Since
December 31, 1996, except as set forth in the Company's SEC Filings, there has
been no:
(a) change in the assets, liabilities, financial condition
or operating results of the Company from that reflected in the 1996 Annual
Report, except changes in the ordinary course of business that have not,
individually or in the aggregate, resulted in and are not reasonably expected to
result in a Material Adverse Effect (and except that the Company expects to
continue to incur substantial operating losses, which may be material);
(b) damage, destruction or loss, whether or not covered by
insurance, materially and adversely affecting the business, properties or
financial condition of the Company (and except that the Company expects to
continue to incur substantial operating losses, which may be material);
(c) waiver or compromise by the Company of a material
right or of a material debt owed to it;
(d) satisfaction or discharge of any lien, claim or
encumbrance by the Company, except in the ordinary course of business and which
is not material to the business, properties or financial condition of the
Company (as such business is presently conducted);
(e) material change to a material contract or arrangement
by which the Company or any of its assets is bound or subject;
(f) sale, assignment or transfer to a third party that is
not an affiliate of the Company (as hereafter defined) of any material patents,
trademarks, copyrights, trade secrets or other intangible assets for
compensation which is less than fair value;
(g) mortgage, pledge, transfer of a security interest in,
or lien, created by the Company, with respect to any of its material properties
or assets, except liens for taxes not yet due or payable;
(h) declaration, setting aside or payment or other
distribution in respect of any of the Company's capital stock, except any direct
or indirect redemption, purchase or other acquisition of any such stock by the
Company; or
(i) event or condition of any type that has had or is
reasonably expected to have a Material Adverse Effect.
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For purposes of this Section 2.4 of this Agreement, the term
"affiliate of the Company" means any individual or entity directly or indirectly
controlling, controlled by or under common control with, the Company. Without
limiting the foregoing, the direct or indirect ownership of 50% or more of the
outstanding voting securities of any entity, or the right to receive 50% or more
of the profits or earnings of an entity, shall be deemed to constitute control.
2.5 Contracts. With respect to each of the material contracts,
commitments and agreements of the Company, the Company is not, and has no actual
knowledge that any other party is, in default under or in respect of any such
material contract, commitment or agreement, the result of which default would
have a Material Adverse Effect. No party to any such material contract,
commitment or agreement, would be authorized or permitted to terminate its
obligations thereunder by reason of the execution and delivery of this Agreement
or any of the transactions contemplated herein.
2.6 Compliance. The Company has complied with, and is not in
default under or in violation of its Certificate of Incorporation, Bylaws or any
and all laws, ordinances and regulations or other governmental restrictions,
orders, judgments or decrees, applicable to the Company's business as presently
conducted and as proposed to be conducted, including individual products
marketed by it, where any such default or violation would have a Material
Adverse Effect. The Company has not received notice of any possible or actual
violation of any applicable law, ordinance, regulation, or order, the result of
which violation would be reasonably expected to have a Material Adverse Effect.
The Company is not a party to any agreement or instrument, or subject to any
charter or other corporate restriction, or any judgment, order, decree, law,
ordinance, regulation or other governmental restriction which would prevent or
impede, or be breached or violated by, or would result in the creation of any
lien or encumbrance upon any assets of the Company by, the transactions
contemplated in this Agreement, the execution, delivery or performance of the
Registration Rights Agreement or the Research Agreement, except that no
representation or warranty is made with respect to filings required by the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976 as amended.
2.7 Compliance with Other Instruments. The execution, delivery
and performance of this Agreement and of the transactions contemplated hereby
will not result in any violation of or constitute, with or without the passage
of time and the giving of notice, either a default under any provision of the
Company's Certificate of Incorporation or Bylaws.
2.8 Governmental Consents. No consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any federal, state or local governmental authority is required on
the part of the Company in connection with the Company's valid execution,
delivery and performance of this Agreement, the Registration Rights Agreement
and the Research Agreement, except for any filings under any applicable state
securities laws and except for any filing under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976 as amended. The filings under state securities laws, if
any, will be effected by the Company at its cost within the applicable
stipulated statutory period.
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2.9 Litigation. There is no action, suit, proceeding or
investigation pending or currently threatened against the Company which
questions the validity of this Agreement, the Registration Rights Agreement or
the Research Agreement, or the right of the Company to enter into such
agreements or to consummate the transactions contemplated hereby or thereby.
There is no action, suit, proceeding or investigation pending or currently
threatened against the Company, which singly or in the aggregate, if the subject
of an unfavorable decision, ruling or finding, would materially adversely affect
the business, properties, operations, financial condition, income or business
prospects of the Company as presently being conducted.
2.10 Permits. Except as disclosed in the SEC Filings (including,
among other things, the lack of FDA approvals for the commercial sale of the
Company's product candidates), the Company has all governmental franchises,
permits, licenses, and any similar authority necessary for the conduct of its
business as now being conducted by it or as proposed to be conducted by it, the
lack of which could have a Material Adverse Effect. The Company is not in
default in any material respect under any of such franchises, permits, licenses
or other similar authority.
2.11 Taxes. The Company has filed all federal, state and other
tax returns which are required to be filed and has heretofore paid all taxes
which have become due and payable, except where the failure to file or pay would
not be reasonably expected to have a Material Adverse Effect. The provision for
taxes on the balance sheet as of December 31, 1996 is sufficient for the payment
of all accrued and unpaid taxes of the Company with respect to the period then
ended.
2.12 Title. The Company has good and marketable title to all
material property and assets reflected in the financial statements to the 1996
Annual Report (or as described in the SEC Filings). The Company occupies its
leased properties under valid and binding leases conforming to the description
thereof set forth in the SEC Filings.
2.13 Intellectual Property. The Company owns, or possesses
adequate rights to use, all of its patents, patent rights, trade secrets,
know-how, proprietary techniques, including processes and substances,
trademarks, service marks, trade names and copyrights described or referred to
in the SEC Filings or owned or used by it or which is necessary for the conduct
of its business as presently conducted, except where the failure to own or
possess such patents, patent rights, trade secrets, know-how, proprietary
techniques, including processes and substances, trademarks, service marks, trade
names and copyrights would not have a Material Adverse Effect. The Company has
not received any notice of infringement of or conflict with asserted rights of
others with respect to any patents, patent rights, trade secrets, know-how,
proprietary techniques, including processes and substances, trademarks, service
marks, trade names and copyrights which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would be reasonably
expected to have a Material Adverse Effect.
2.14 Capitalization; Options and Warrants. The authorized capital
stock of the Company consists of Eighty-Five million (85,000,000) shares, of
which Eighty million
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(80,000,000) shares are Common Stock, par value $0.001 per share, and Five
million (5,000,000) shares are Preferred Stock, par value $0.001 per share, of
which Eighty thousand (80,000) shares have been designated Series A
Participating Preferred Stock. As of September 30, 1997, 32,977,938 shares of
the Company's Common Stock and no shares of Preferred Stock were issued and
outstanding. Except for the transactions contemplated hereby and except as set
forth in the Company's SEC Filings, since December 31, 1996, the Company has not
granted any option (except for stock options granted under the Company's stock
option plans), warrants, rights (including conversion or preemptive rights,
except for stock purchased under the Company's stock purchase plans), or similar
rights to any person or entity to purchase or acquire any rights with respect to
any shares of capital stock of the Company that in the aggregate exceed 250,000
shares.
2.15 Nasdaq National Market Designation. The Common Stock is
currently included in the Nasdaq National Market of the Nasdaq Stock Market and
the Company knows of no reason or set of facts which is likely to result in the
termination or inclusion of the Common Stock in the Nasdaq National Market or
the inability of such stock to continue to be included in the Nasdaq National
Market. The Company shall use all commercially reasonable efforts to maintain
the Non-Quantitative Designation Criteria contained in Section 4460 of the NASD
Manual to the extent such criteria are within the control of the Company.
Nothing in this Section shall be interpreted to preclude the Company from
listing its Common stock on a national securities exchange in lieu of the Nasdaq
National Market.
2.16 Accuracy of Representations and Warranties. No
representation or warranty by the Company contained in this Agreement, and no
statement contained in any exhibit, schedule, disclosure, certificate, list or
other instrument delivered or to be delivered to Investor pursuant hereto or in
connection with the transactions contemplated hereby contains any untrue
statement of a material fact or omits to state any material fact necessary to
make the statements contained herein or therein not misleading.
3. Representations and Warranties of Investor. Investor and SBC hereby
jointly and severally represent and warrant that:
3.1 Organization, Good Standing and Qualification. Investor is a
public limited company duly organized, validly existing and in good standing
under the laws of England. SBC is a corporation duly organized, validly existing
and in good standing under the laws of the Commonwealth of Pennsylvania.
Investor and SBC each has all requisite power and authority to carry on its
business as now conducted and as proposed to be conducted.
3.2 Authorization. All corporate action on the part of each
Investor and SBC, and their respective officers and directors necessary for the
authorization, execution and delivery of this Agreement and the Registration
Rights Agreement and the performance of all obligations of Investor and SBC
hereunder and thereunder has been taken or will be taken prior to the Closing,
and this Agreement and the Registration Rights Agreement constitute valid and
legally binding obligations of Investor and SBC as their interests appear,
enforceable in accordance with their respective terms, except (i) as limited by
applicable
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bankruptcy, insolvency, reorganization, moratorium, and other laws of general
application affecting the enforcement of creditors' rights generally, and (ii)
as limited by laws relating to the availability of specific performance,
injunctive relief, or other equitable remedies.
3.3 Purchase Entirely for Own Account. This Agreement is made
with Investor and SBC in reliance upon Investor's representation to the Company,
which by execution of this Agreement Investor hereby confirms, that the Shares
and the Warrant to be received by Investor and the shares of Common Stock
issuable upon exercise of the Warrant (collectively, the "Securities") will be
acquired for investment for Investor's own account, not as a nominee or agent,
and not with a view to the resale or distribution of any part thereof, and that
Investor does not have any present intention of selling, granting any
participation in, or otherwise distributing the same in violation of the
Securities Act or any state securities laws. By executing this Agreement,
Investor further represents that it does not have any contract, undertaking,
agreement or arrangement with any person to sell, transfer or grant
participations to such person or to any third person, with respect to any of the
Securities. Investor and SBC each represent that it has full power and authority
to enter into this Agreement.
3.4 Investment Experience. Investor acknowledges that it is able
to fend for itself, can bear the economic risk of its investment and has such
knowledge and experience in financial or business matters that it is capable of
evaluating the merits and risks of the investment in the Securities. Investor
also represents that it has not been organized for the purpose of acquiring the
Securities.
3.5 Accredited Investor. Investor is an "accredited investor"
within the meaning of SEC Rule 501 of Regulation D, as presently in effect.
3.6 Restricted Securities. Investor understands that the
Securities it is purchasing are characterized as "restricted securities" under
the federal securities laws inasmuch as they are being acquired from the Company
in a transaction not involving a public offering and that under such laws and
applicable regulations such Securities may be resold without registration under
the Securities Act only in certain limited circumstances. In this connection,
Investor represents that it is familiar with SEC Rule 144, as presently in
effect, and understands the resale limitations imposed thereby and by the
Securities Act.
3.7 Further Limitations on Disposition. Without in any way
limiting the representations set forth above, Investor further agrees not to
make any disposition of all or any portion of the Securities unless and until
the transferee has agreed in writing for the benefit of the Company to be bound
by Sections 3.7, 6.2 and 7 (except that Sections 3.7, 6.2 and 7 shall not apply
to a transferee in a registered public offering or a sale under Rule 144 or as
provided in Section 7) of this Agreement, all provisions of the Registration
Rights Agreement and the Warrant, if applicable, and:
(a) There is then in effect a Registration Statement under
the Securities Act covering such proposed disposition and such disposition is
made in accordance with such Registration Statement; or
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(b) (i) Investor shall have notified the Company of the
proposed disposition and shall have furnished the Company with a reasonably
detailed statement of the circumstances surrounding the proposed disposition (to
the extent required for purposes of securities law compliance), and (ii) if
reasonably requested by the Company, Investor shall have furnished the Company
with an opinion of counsel (which may be Investor's or SBC's inside counsel), in
form and substance reasonably satisfactory to the Company, that such disposition
will not require registration of such shares under the Securities Act. It is
agreed that the Company will not require opinions of counsel for transactions
made pursuant to Rule 144 except in unusual circumstances.
3.8 Legends. It is understood that the certificates evidencing
the Securities may bear one or all of the following legends:
(a) "These securities have not been registered under the
Securities Act of 1933, as amended. They may not be sold, offered for sale,
pledged or hypothecated in the absence of a registration statement in effect
with respect to the securities under such Act or an opinion of counsel
satisfactory to the Company that such registration is not required or unless
sold pursuant to Rule 144 of such Act."
(b) "These securities are subject to certain transfer
restrictions contained in a certain Stock and Warrant Purchase Agreement dated
March 17, 1998, as amended from time to time, a copy of which may be obtained
from the Company without charge."
(c) Any legend required by any applicable state securities
laws.
To the extent that such legends are no longer applicable, the
Company shall cause its transfer agent to remove the legends upon request by
Investor.
3.9 Governmental Consents. No consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any federal, state or local governmental authority is required on
the part of Investor or SBC in connection with Investor's or SBC's valid
execution, delivery and performance of this Agreement, the Warrant or the
Registration Rights Agreement, or the issuance of the Shares and the Warrant,
except for any filings under any applicable state securities laws and except for
any filing under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended.
4. Conditions of Investor's Obligations at Closing. The obligations of
Investor under Sections 1.1(a) and (c) of this Agreement are subject to the
fulfillment on or before the Closing of each of the following conditions, the
waiver of which shall not be effective without the consent of Investor thereto:
4.1 Representations and Warranties. The representations and
warranties of the Company contained in Section 2 shall be true on and as of the
Closing with the same effect as though such representations and warranties had
been made on and as of the date of the Closing.
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4.2 Performance. The Company shall have performed and complied
with all agreements, obligations and conditions contained in this Agreement that
are required to be performed or complied with by it on or before the Closing,
and all corporate or other proceedings in connection with the transactions
contemplated at the Closing and all documents incident thereto shall be
reasonably satisfactory in form and in substance to Investor.
4.3 Compliance Certificate. An officer of the Company shall have
delivered to Investor a certificate certifying that (a) the conditions specified
in Sections 4.1 and 4.2 have been fulfilled; (b) the Company has not filed a
petition in bankruptcy or insolvency or for reorganization or for an arrangement
or for the appointment of a receiver or trustee of its assets, nor is the
Company aware of any events or action that would make any such filing or
arrangement imminent; and (c) no action or event has occurred, nor is any action
or event imminent, that would impair the Company's ability to perform as
contemplated under the Research Agreement.
4.4 Approvals. All authorizations, approvals, or permits, if any,
of any governmental authority or regulatory body of the United States or of any
state that are required as of the Closing in connection with the lawful issuance
and sale of the Shares and the Warrant pursuant to this Agreement shall have
been duly obtained and shall be effective as of the Closing.
4.5 Proceedings and Documents. All corporate and other
proceedings in connection with the transactions contemplated at the Closing and
all documents incident thereto shall be reasonably satisfactory in form and
substance to Investor and it shall have received all such counterpart original
and certified or other copies of such documents as it may reasonably request.
4.6 Research Agreement. The Company and SBC shall have entered
into the Research Agreement.
4.7 Registration Rights Agreement. The Company and Investor shall
have entered into the Ninth Addendum to Amended Registration Rights Agreement.
4.8 Opinion of Company Counsel. Investor shall have received an
opinion from the Company's Senior Vice President, General Counsel, Government
Affairs and Secretary, dated as of the Closing, in form and substance reasonably
acceptable to Investor.
4.9 Conditions of Investor's Obligations at Second Installment.
The obligations of Investor or SBC under Section 1.1(b) are subject to the
fulfillment on or before the closing of the Second Installment of the following
conditions, the waiver of which shall not be effective without the consent of
Investor thereto: (a) all Second Installment Shares shall, when issued, sold and
delivered, be duly and validly issued, fully paid and nonassessable; (b) the
offer and sale of the Second Installment Shares shall comply with applicable
federal and state securities laws; (c) the Company shall have filed with the SEC
all material reports required by the Exchange Act to be filed as of the date of
the applicable closing; and (d) all authorizations, approvals or permits, if
any, of any governmental authority
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or regulatory body of the United States or of any state that are required in
connection with the lawful issuance and sale of the Second Installment Shares
shall have been duly obtained and shall be effective as of the proposed closing.
5. Conditions of the Company's Obligations at Closing. The obligations
of the Company to Investor under this Agreement are subject to the fulfillment
on or before the Closing of each of the following conditions by Investor:
5.1 Representations and Warranties. The representations and
warranties of Investor contained in Section 3 shall be true on and as of the
Closing with the same effect as though such representations and warranties had
been made on and as of the Closing.
5.2 Performance. Investor shall have performed and complied with
all agreements, obligations and conditions contained in this Agreement that are
required to be performed or complied with by it on or before the Closing, and
all corporate or other proceedings in connection with the transactions
contemplated at the Closing and all documents incident thereto shall be
reasonably satisfactory in form and in substance to the Company.
5.3 Compliance Certificate. An officer of Investor shall have
delivered to the Company a certificate certifying that the conditions specified
in Sections 5.1 and 5.2 have been fulfilled.
5.4 Payment of Purchase Price. Investor shall have delivered the
purchase prices specified in Sections 1.1(a) and (b).
5.5 Qualifications. All authorizations, approvals, or permits, if
any, of any governmental authority or regulatory body of the United States or of
any state that are required as of the Closing in connection with the lawful
issuance and sale of the Shares and the Warrant pursuant to this Agreement shall
have been duly obtained and shall be effective as of the Closing.
5.6 Research Agreement. The Company and SBC shall have entered
into the Research Agreement.
5.7 Registration Rights Agreement. The Company and Investor shall
have entered into the Ninth Addendum to Amended Registration Rights Agreement.
5.8 Conditions of Company's Obligations at Second Installment.
The obligations of the Company under Section 1.1(b) are subject to the
fulfillment on or before the closing of the Second Installment of the following
conditions, the waiver of which shall not be effective without the consent of
the Company thereto: (a) the representations and warranties of Investor (or SBC,
if SBC is purchasing the Second Installment Shares) contained in Section 3 shall
be true on and as of the closing with the same effect as though such
representations and warranties had been made on and as of the closing; (b) the
offer and sale of the Second Installment Shares shall comply with applicable
federal and state securities laws; and (c) all authorizations, approvals or
permits, if any, of any governmental authority or regulatory body of the United
States or of any state that are required in connection with the lawful issuance
and sale of the Second Installment Shares shall have been duly obtained and
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12
shall be effective as of the proposed closing.
6. Covenants of the Parties.
6.1 Additional Registration Rights. Following the payment by
Investor of the Second Installment, the Company and Investor (or SBC, as
applicable) shall enter into an Addendum to the Registration Rights Agreement,
in substantially the form of the Ninth Addendum entered into in connection with
the Closing pursuant to which such shares of stock of the Company obtained by
Investor (or SBC, as applicable) shall be included within the definition of
"Registrable Securities" under the Registration Rights Agreement and Schedule A
of the Registration Rights Agreement shall be restated accordingly.
6.2 Transfer Restriction. Notwithstanding any rights under the
Registration Rights Agreement, Investor hereby agrees that without the prior
written consent of the Company (which may be withheld in its sole discretion),
neither it nor any affiliate (as defined in Rule 144 of the Act promulgated by
the SEC ("Affiliate")) shall, directly or indirectly sell, offer to sell,
contract to sell (including, without limitation, any short sale), grant any
option to purchase or otherwise transfer or dispose of (other than to donees who
agree to be similarly bound) the Shares, the Warrant and any shares of Common
Stock issued upon exercise of the Warrant (collectively, the "Restricted
Securities") until the later of (i) *** following the date of this Agreement or
(ii) *** . Notwithstanding the foregoing, transfers solely among Investor
Affiliates shall not be subject to the transfer restrictions set forth in this
Section 6.2 provided the Affiliate transferee agrees in writing to be bound by
this Section 6.2. In order to enforce the foregoing covenant, the Company may
impose legends and/or stop-transfer instructions with respect to the Restricted
Securities held by Investor or any Affiliate (and the Restricted Securities of
every other person subject to the foregoing restriction).
6.3 Standstill Provisions. Commencing as of the Closing and for
the period until the earlier of (i) three (3) years following the date of this
Agreement and (ii) the termination of the Research Program (as defined in
Section 1.34 of the Research Agreement), so long as Investor and its Affiliates
(including SBC) together own shares which represent more than *** of the
outstanding Common Stock of the Company, Investor (including SBC and all
Affiliates of Investor) shall not acquire beneficial ownership of any shares of
Common Stock of the Company, any securities convertible into or exchangeable for
Common Stock, or any other right to acquire Common Stock, except by way of stock
dividends or other distributions or offerings made available to holders of
Common Stock generally, from the Company or any other person or entity, without
the prior written consent of the Company, which consent may be withheld in its
sole discretion; provided, however, that in no event shall (i) the original
purchase of securities pursuant to that certain Stock and Note Purchase
Agreement between *** (ii) the original purchase of securities pursuant to this
Agreement, (iii) the exercise of the Warrant, or
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***Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
13
(iv) the acquisition by SBC (or any affiliate of SBC) of another company that
atthe time of the acquisition owns securities of the Company constitute a
violation of this Section 6.3.
6.4 Diligent Efforts. The parties to this Agreement hereby agree
to use diligent efforts to cause the conditions contained in Sections 4 and 5
hereof to be satisfied.
7. Right of First Offer.
7.1 Right of First Offer.
(a) Investor shall not make any disposition of all or any portion
(or any interest) of the Restricted Securities without first giving the Company
the right to accept an offer to purchase such Restricted Securities, except for
any dispositions that are exempt pursuant to the terms of Section 7.3. Subject
to Section 6.2, at the time Investor wishes to make a disposition of any or all
of the Restricted Securities (except for dispositions that are exempt pursuant
to the terms of Section 7.3), it shall submit a written offer to sell all, but
not less than all, of such Restricted Securities which Investor wishes to
dispose (the "Offered Shares") to the Company (the "Offer") by facsimile to the
Company's President or Chief Operating Officer (such facsimile to be received
during the Company's normal business hours and to be confirmed in writing by
notice pursuant to Section 8.6) as follows:
(i) If Investor wishes to sell the Offered Shares in
an open market disposition, the Offer shall disclose the number of Offered
Shares proposed to be sold. As soon as practicable after receipt of the Offer,
but in no event later than three business days after Investor makes the Offer,
the Company shall have the option to accept the Offer to purchase the Offered
Shares at the higher of (i) the closing market price on the business day next
preceding the day of the Offer or (ii) the closing market price on the business
day next preceding the day the Offer is accepted by the Company. In the event
the Company does not purchase the Offered Shares offered by Investor pursuant to
the Offer, Investor may sell the Offered Shares at any time within ninety (90)
days after the expiration of the Offer. Any such sale shall be made in the open
market at the market prices prevailing at the time of the sale.
(ii) If Investor wishes to sell or otherwise transfer
the Offered Shares in a privately negotiated transaction, whether through
broker-dealers who may act as agent or acquire the Offered Shares as principal,
or otherwise, the Offer shall disclose the number of Offered Shares proposed to
be sold or transferred and the price at which the Offered Shares are offered to
the Company. As soon as practicable after receipt of the Offer, but in no event
later than three business days after Investor makes the Offer, the Company shall
have the option to accept the Offer to purchase the Offered Shares at the higher
of (i) the price per share set forth in the Offer or (ii) the closing market
price on the business day next preceding the day the Offer is accepted by the
Company. In the event the Company does not purchase the Offered Shares offered
by Investor pursuant to the Offer, and provided that the price specified in the
Offer is not greater than the closing market price on the business day
nextpreceding the day of the Offer, Investor may sell or transfer the Offered
Shares at any time within ninety (90) days after the expiration of the Offer for
any price.
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(iii) If Investor wishes to effect an underwritten
offering of the Offered Shares pursuant to registration rights granted by the
Company (if permitted thereby), the Offer shall disclose the number of Offered
Shares proposed to be sold to the underwriters. The Company shall have the
option to purchase the Offered Shares at the higher of (i) the closing market
price on the business day next preceding the day of the Offer or (ii) the
closing market price on the business day next preceding the day the Offer is
accepted by the Company. As soon as practicable after receipt of the Offer, but
in no event later than three business days after Investor makes the Offer, the
Company shall have the option to accept the Offer to purchase the Offered
Shares. In the event the Company does not purchase the Offered Shares offered by
Investor pursuant to the Offer, Investor may sell the Offered Shares in an
underwritten offering commenced within ninety (90) days after the expiration of
the Offer.
(b) Any Offered Shares not sold in accordance with the applicable
terms and within the applicable time periods provided in subsection (a) above
shall continue to be subject to the Company's right of first offer pursuant to
this Section 7.
(c) The provisions of subsections (a) and (b) above shall not
apply to any disposition of Restricted Securities in which the aggregate number
of such Restricted Securities involved in such disposition is less than ***
(subject to appropriate adjustment in the event of such stock splits, stock
dividends, recapitalizations and the like) during any thirty (30)-day period.
(d) The provisions of subsections (a) and (b) above shall not
apply to any disposition of Restricted Securities made in a privately negotiated
transaction, whether through broker-dealers who may act as agent or acquire such
Restricted Securities as principal, or otherwise, in which: (i) the aggregate
number of such Restricted Securities involved in such disposition is less than
*** (subject to appropriate adjustment in the event of stock splits, stock
dividends, recapitalizations and the like); and (ii) no other disposition under
this Section 7.1(d) shall have occurred for a period of at least thirty (30)
days prior to the applicable disposition; and (iii) such disposition shall not
be to an entity a material portion of the business operations of which relates
to the pharmaceutical industry, or to an affiliate of such entity or to a third
party purchasing on behalf of such entity. The Restricted Securities subject to
this Section 7.1(d) shall bear a legend reasonably acceptable to the Company
reflecting the restrictions set forth herein.
(e) If the Company accepts an Offer under this Section 7, the
closing of such purchase shall occur within twenty (20) business days after
acceptance of the Offer by the Company. Upon such acceptance, the Company and
Investor shall be legally obligated to consummate the purchase contemplated
thereby.
(f) The provisions of this Section 7 shall not have any effect at
such times as Investor and SBC together with their Affiliates own shares of the
Common Stock of the Company which represent less than *** of the outstanding
Common Stock of the Company.
***Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
-14-
15
7.2 Binding Effect. The Company's right of first offer shall be
assignable in whole or in part by the Company, (but only after the Company
receives notice of a transfer which is subject to the Company's right of first
offer and only with respect to that individual transaction) and shall inure to
the benefit of its successors and assigns. The Company's right of first offer
shall be binding upon any transferee of any Restricted Securities acquired
pursuant to a disposition that is exempt from the right of first offer pursuant
to the terms of Section 7.3. However, the Company's right of first offer shall
not apply to any transferee of any Restricted Securities if the Restricted
Securities were previously offered to the Company pursuant to Section 7.1, the
Company elected not to purchase such Restricted Securities and Investor sold
such Restricted Securities to the transferee in compliance with Section 7.1.
7.3 Exempt Transfers. Subject to Section 7.2, the Company's right
of first offer shall not apply to (i) transfers to Affiliates of Investor or SBC
or to donees, provided the transferee agrees to be bound by the obligations of
this Agreement, or (ii) transactions involving a merger, reorganization,
recapitalization, exchange offer or sale of all or substantially all of the
business or capital stock of the Company approved by the Company's board of
directors.
8. Miscellaneous.
8.1 Survival of Warranties. The warranties, representations and
covenants of the Company and Investor and SBC contained in or made pursuant to
this Agreement shall survive the execution and delivery of this Agreement and
the Closing and shall in no way be affected by any investigation of the subject
matter thereof made by or on behalf of Investor, SBC or the Company.
8.2 Successors and Assigns. Except as otherwise provided herein,
the terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of the parties (including
transferees of any of the Shares or the Warrant sold hereunder or any shares
issuable upon the exercise of the Warrant), provided, however, Investor's or
SBC's rights and obligations under Section 1.1 shall not be assignable, except
to an Affiliate so long as the performance by the Affiliate is guaranteed by SBC
in form and substance reasonably acceptable to the Company. Nothing in this
Agreement, express or implied, is intended to confer upon any party other than
the parties hereto or their respective successors and assigns any rights,
remedies, obligations, or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement.
8.3 Governing Law. This Agreement shall be governed by and
construed under the laws of the State of California as applied to agreements
among California residents entered into and to be performed entirely within
California.
8.4 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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8.5 Titles and Subtitles. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
8.6 Notices. Unless otherwise provided, any notice required or
permitted under this Agreement shall be given in writing by personal delivery to
the party to be notified or by Federal Express or other overnight package
delivery service or registered or certified mail, postage prepaid and addressed
to the party to be notified at the following addresses, or at such other address
as such party may designate by five (5) days' advance written notice to the
other parties (with notice deemed given upon receipt):
If to the Company:
Ligand Pharmaceuticals Incorporated
00000 Xxxxxxx Xxxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxx, Esq.
If to Investor:
SmithKline Xxxxxxx plc
Xxx Xxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxx, XX0 0XX
Xxxxxxx
Attn: Senior Vice President,
Worldwide Business Development
If to SBC:
SmithKline Xxxxxxx Corporation
One Franklin Plaza (FP2225)
X.X. Xxx 0000
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attn: General Counsel - U.S.
8.7 Finder's Fee. Each party represents that it neither is nor
will be obligated for any finders' fee or commission in connection with this
transaction. Each party agrees to indemnify and to hold harmless the other from
any liability for any commission or compensation in the nature of a finders' fee
(and the costs and expenses of defending against such liability or asserted
liability) for which the indemnifying party or any of its officers, partners,
employees, or representatives is responsible.
8.8 Expenses. Irrespective of whether the Closing is effected,
each party shall pay all costs and expenses that it incurs with respect to the
negotiation, execution, delivery and performance of this Agreement.
Notwithstanding the foregoing, the Company shall pay any and all stamp, transfer
and other similar taxes payable or determined to be
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17
payable in connection with the execution and delivery of this Agreement or the
original issuance of the Securities, including shares issuable upon exercise of
the Warrant, and shall save and hold Investor harmless from and against any and
all liabilities with respect to or resulting from any delay in paying, or
omission to pay, such taxes.
8.9 Amendments and Waivers. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company, Investor and SBC.
Any amendment or waiver effected in accordance with this paragraph shall be
binding upon each holder of any securities purchased under this Agreement at the
time outstanding, each future holder of all such securities, and the Company.
8.10 Severability. If one or more provisions of this Agreement
are held to be unenforceable under applicable law, such provision shall be
excluded from this Agreement and the balance of the Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable in
accordance with its terms.
8.11 Entire Agreement. This Agreement and the documents referred
to herein constitute the entire agreement among the parties with respect to the
subjects hereof and thereof and no party shall be liable or bound to any other
party in any manner by any warranties, representations, or covenants with
respect to such subjects except as specifically set forth herein or therein.
[Remainder of This Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
THE COMPANY:
LIGAND PHARMACEUTICALS
INCORPORATED
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------------------------
Title: Senior Vice President
--------------------------------------------
General Counsel, Govt. Affairs
INVESTOR:
SMITHKLINE XXXXXXX PLC
By: /s/ J-P. Garnier
----------------------------------------------
Title: Chief Operating Officer & President
---------------------------------------------
SBC:
SMITHKLINE XXXXXXX CORPORATION
By: /s/ X-X Xxxxxxx
----------------------------------------------
Title: Chief Operating Officer & President
--------------------------------------------
[SIGNATURE PAGE TO STOCK AND WARRANT PURCHASE AGREEMENT]
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EXHIBIT A
FORM OF WARRANT
A-1
20
No. SBC-1
150,000 Shares
COMMON STOCK PURCHASE WARRANT
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND SUCH LAWS, THESE
SECURITIES MAY NOT BE OFFERED, SOLD, TRANSFERRED OR OTHERWISE DISPOSED
OF, EXCEPT PURSUANT TO AN APPLICABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF SAID ACT AND SUCH LAWS AND UPON OBTAINING AN OPINION OF
COUNSEL (WHICH MAY BE COUNSEL FOR THE COMPANY), SATISFACTORY TO THE
COMPANY, THAT SUCH DISPOSITION MAY BE MADE WITHOUT REGISTRATION OF THE
SECURITIES UNDER SUCH ACT AND SUCH LAWS, OR, WITH RESPECT TO FEDERAL
SECURITIES LAWS ONLY, UNLESS SOLD PURSUANT TO RULE 144.
THESE SECURITIES ARE SUBJECT TO CERTAIN TRANSFER RESTRICTIONS CONTAINED
IN A CERTAIN STOCK AND WARRANT PURCHASE AGREEMENT DATED MARCH 17, 1998,
A COPY OF WHICH MAY BE OBTAINED FROM THE COMPANY WITHOUT CHARGE.
LIGAND PHARMACEUTICALS INCORPORATED
INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE
THIS CERTIFIES THAT, for value received, SmithKline Xxxxxxx plc, an
English public limited company (including any permitted successors and assigns,
"Holder"), is entitled to purchase, on the terms hereof, One Hundred Fifty
Thousand (150,000) fully paid and nonassessable shares of Common Stock, par
value $0.001 per share (the "Common Stock"), of Ligand Pharmaceuticals
Incorporated, a Delaware corporation (the "Company").
1. Exercise of Warrant. The terms and conditions upon which this Warrant
may be exercised, and the shares of Common Stock issuable upon exercise hereof
(sometimes referred to herein as the "Warrant Shares") may be purchased, are as
follows:
21
1.1 Term. This Warrant may be exercised in whole or in part at
any time after the date hereof, but at or prior to 5:00 p.m. Pacific Standard
Time on March 17, 2003, after which time this Warrant shall terminate and shall
be void and of no further force or effect.
1.2 Purchase Price. The per share purchase price for the shares
of Common Stock to be issued upon exercise of this Warrant shall be Twenty
Dollars ($20.00), subject to adjustment as provided herein.
1.3 Method of Exercise. The exercise of the purchase rights
evidenced by this Warrant shall be effected by (i) the surrender of the Warrant,
together with a duly executed copy of the subscription form attached hereto, to
the Company at its principal offices and (ii) the delivery of the purchase price
for the number of shares of Common Stock for which the purchase rights hereunder
are being exercised by check or bank draft payable to the Company's order or by
wire transfer of the purchase price to the Company's designated bank account.
1.4 Issuance of Shares. Upon the exercise of the purchase rights
evidenced by this Warrant, a certificate or certificates for the purchased
Warrant Shares shall be issued to the Holder as soon as practicable.
1.5 Limitations on Exercise. Any exercise of the Warrant, whether
pursuant to this Section 1 or the Company Option, shall be subject to compliance
with applicable governmental laws and regulations.
2. Certain Adjustments.
2.1 Mergers, Consolidations or Sale of Assets.
a. If at any time there shall be a capital reorganization
(other than a combination or subdivision of the Common Stock otherwise provided
for herein), or a merger or consolidation of the Company with or into another
corporation, then, as a part of such reorganization, merger or consolidation,
lawful provision shall be made so that the Holder shall thereafter be entitled
to receive upon exercise of this Warrant, during the period specified in this
Warrant and upon payment of the purchase price, the number of shares of stock or
other securities or property of the Company or the successor corporation
resulting from such reorganization, merger or consolidation to which a holder of
the Common Stock issuable upon exercise of this Warrant would have been entitled
under the provisions of the agreement in such reorganization, merger or
consolidation if this Warrant had been exercised immediately before that
reorganization, merger or consolidation. In any such case, appropriate
adjustment (as determined in good faith by the Company's Board of Directors)
shall be made in the application of the provisions of this Warrant with respect
to the rights and interests of the Holder after the reorganization, merger or
consolidation to the end that the provisions of this Warrant (including
adjustment of the purchase price then in effect and the number of Warrant Shares
issuable upon exercise hereof) shall be applicable after that event,
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22
as near as reasonably may be, in relation to any shares or other property
issuable after that event upon exercise of this Warrant.
b. If at any time there shall be a sale of the
Company's properties and assets as, or substantially as, an entirety to any
other person, then the Company shall give each Holder of this Warrant notice of
such sale. The Holder of this Warrant shall have thirty (30) days from the date
of such notice to exercise this Warrant in accordance with Section 1 above;
provided, that if this Warrant is not so exercised prior to the end of such
thirty (30) day period, this Warrant shall terminate and be of no further force
or effect. Upon exercise of this Warrant prior to the end of such thirty (30)
day period, the Holder hereof shall be entitled to receive the number of shares
of stock or other securities or property of the Company resulting from such sale
to which a holder of the Common Stock issuable upon exercise of this Warrant
would have been entitled if this Warrant had been exercised immediately before
such sale.
2.2 Splits and Subdivisions. In the event the Company should at
any time or from time to time fix a record date for the effectuation of a split
or subdivision of the outstanding shares of Common Stock or the determination of
the holders of Common Stock entitled to receive a dividend or other distribution
payable in additional shares of Common Stock or other securities or rights
convertible into, or entitling the holder thereof to receive directly or
indirectly, additional shares of Common Stock (hereinafter referred to as the
"Common Stock Equivalents"), without payment of any consideration by such holder
for the additional shares of Common Stock or Common Stock Equivalents, then, as
of such record date (or the date of such distribution, split or subdivision if
no record date is fixed), the purchase price shall be appropriately decreased
and the number of Warrant Shares issuable upon exercise hereof shall be
appropriately increased in proportion to such increase of outstanding shares.
2.3 Combination of Shares. If the number of shares of Common
Stock outstanding at any time after the date hereof is decreased by a
combination of the outstanding shares of Common Stock, the purchase price shall
be appropriately increased and the number of Warrant Shares issuable upon
exercise hereof shall be appropriately decreased in proportion to such decrease
in outstanding shares of Common Stock.
2.4 Adjustments for Other Distributions. In the event the Company
shall declare a distribution payable in securities of other persons, evidences
of indebtedness issued by the Company or other persons, assets (excluding cash
dividends) or options or rights not referred to in subsection 2.2, then, in each
such case for the purpose of this subsection 2.4, upon exercise of this Warrant
the Holder shall be entitled to a proportionate share of any such distribution
as though the Holder was the holder of the number of shares of Common Stock of
the Company issuable upon exercise of this Warrant as of the record date fixed
for the determination of the holders of Common Stock of the Company entitled to
receive such distribution.
2.5 Certificate as to Adjustments. In the case of each adjustment
or readjustment of the purchase price and the number of Warrant Shares issuable
upon exercise
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of this Warrant pursuant to this Section 2, the Company will promptly compute
such adjustment or readjustment in accordance with the terms hereof and cause a
certificate setting forth such adjustment or readjustment and showing in detail
the facts upon which such adjustment or readjustment is based to be delivered to
the Holder. The Company will, upon the written request at any time of the
Holder, furnish or cause to be furnished to such Holder a certificate setting
forth:
a. Such adjustments and readjustments;
b. The purchase price at the time in effect; and
c. The number of Warrant Shares and the amount and nature,
if any, of other property at the time issuable upon the exercise of the Warrant.
2.6 Notices of Record Date, etc. In the event of:
a. Any taking by the Company of a record of the holders of
the Common Stock of the Company for the purpose of determining the holders
thereof who are entitled to receive any dividend (other than a cash dividend
payable out of earned surplus at the same rate as that of the last such cash
dividend theretofore paid) or other distribution, or any right to subscribe for,
purchase or otherwise acquire any shares of stock of any class or any other
securities or property, or to receive any other right; or
b. Any capital reorganization of the Company, any
reclassification or recapitalization of the Common Stock of the Company or any
transfer of all or substantially all of assets of the Company to any other
person or any consolidation or merger involving the Company; or
c. Any voluntary or involuntary dissolution, liquidation
or winding-up of the Company;
the Company will mail to the holder of this Warrant, at least ten (10) days
prior to the earliest date specified therein, a notice specifying:
(i) The date on which any such record is to be taken for
the purpose of such dividend, distribution or right, and the amount and
character of such dividend, distribution or right; and
(ii) The date on which any such reorganization,
reclassification, transfer, consolidation, merger, dissolution, liquidation or
winding-up is expected to become effective and the record date for determining
the stockholders entitled to vote thereon, if any.
3. Fractional Shares. No fractional shares shall be issued in connection
with any exercise of this Warrant. In lieu of the issuance of any such
fractional share, the Company shall make a cash payment equal to the then fair
market value of such fractional share as determined in good faith by the
Company's Board of Directors.
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4. Reservation of Common Stock. The Company shall at all times reserve
and keep available out of its authorized but unissued shares of Common Stock,
solely for the purpose of effecting the exercise of this Warrant, such number of
its shares of Common Stock as shall from time to time be sufficient to effect
the exercise of this Warrant; and if at any time the number of authorized but
unissued shares of Common Stock shall not be sufficient to effect the exercise
of the entire Warrant, in addition to such other remedies as shall be available
to the Holder, the Company will use its reasonable best efforts to take such
corporate action as may, in the opinion of its counsel, be necessary to increase
its authorized but unissued shares of Common Stock to such number of shares as
shall be sufficient for such purposes.
5. Privileges of Stock Ownership. Prior to the exercise of this Warrant,
the Holder shall not be entitled, by virtue of holding this Warrant, to any
rights of a stockholder of the Company.
6. Limitation of Liability. Except as otherwise provided herein, in the
absence of affirmative action by the Holder to purchase the Warrant Shares, no
mere enumeration herein of the rights or privileges of the Holder shall give
rise to any liability of such Holder for the purchase price or as a stockholder
of the Company, whether such liability is asserted by the Company or by
creditors of the Company.
7. Transfers and Exchanges.
7.1 Transfer Restrictions. Subject to the requirements of Section
3 and the transfer restrictions of Sections 6.1, 6.2 and 7 of the Stock and
Warrant Purchase Agreement dated March 17, 1998, between the Company, the Holder
and SmithKline Xxxxxxx Corporation (the "Purchase Agreement"), which terms shall
apply to this Warrant and the Warrant Shares, and subject to compliance with
applicable federal and state securities laws, this Warrant and all rights
hereunder are transferable in whole or in part by the Holder. The transfer shall
be recorded on the books of the Company upon the surrender of this Warrant,
properly endorsed, to the Company at its principal offices and the payment to
the Company of all transfer taxes and other governmental charges imposed on such
transfer. In the event of a partial transfer, the Company shall issue to the
several holders one or more appropriate new warrants.
7.2 Partial Exercises. In the event of a partial exercise of this
Warrant, the Company shall issue an appropriate new warrant to the Holder.
7.3 Form of New Warrants. All new warrants issued in connection
with transfers, exchanges or partial exercises shall be identical in form and
provision to this Warrant except as to the number of shares.
7.4 Legends. Certificates evidencing the Warrant Shares shall
bear the following legend:
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"These securities are subject to certain transfer restrictions
contained in a certain Stock and Warrant Purchase Agreement dated
March 17, 1998, a copy of which may be obtained from the Company
without charge."
8. Company Right to Require Holder to Purchase Warrant Shares.
8.1 Company Option; Exercise Period. On any date after *** , on
which the daily closing price of the Common Stock reported on the National
Association of Securities Dealers, Inc. *** (collectively, the "Trigger Event"),
the Company shall have the right (the "Company Option") to require that the
Holder purchase all of the Warrant Shares not previously purchased.
8.2 Company Notice. Following the Trigger Event, the Company may
deliver written notice to the Holder (the "Company Notice") of its election to
exercise the Company Option, which Company Notice shall specify the number of
Warrant Shares the Holder shall be required to purchase and the date on which
the Company proposes the Warrant Shares be issued.
8.3 Deliveries by the Holder. Within ten (10) business days after
the receipt of the Company Notice, the Holder shall deliver to the Company (i)
this Warrant, together with a duly executed copy of the subscription form
attached hereto electing to purchase the number of Warrant Shares specified in
the Company Notice, (ii) the purchase price for the number of Warrant Shares
specified in the Company Notice by check or bank draft payable to the Company's
order or by wire transfer of the purchase price to the Company's designated bank
account and (iii) such documents and certificates as the Company may reasonably
request to comply with applicable securities and other laws and contractual
obligations.
8.4 Closings. The Company shall, as soon as practicable upon
receipt of this Warrant, the subscription form and the purchase price, cause to
be issued to the Holder a certificate or certificates for the purchased Warrant
Shares, and, if the subscription is for less than the total number of Warrant
Shares that may at the time be purchased under the Warrant, a new warrant
representing the right to purchase the remaining Warrant Shares.
8.5 Legends. Notwithstanding anything herein to the contrary,
unless the Warrant Shares have been registered for sale or resale under the
Securities Act of 1933, as amended (the "Securities Act"), each certificate for
Warrant Shares issued hereunder shall bear standard and customary legends
regarding nontransferability in the absence of registration or exemption from
registration under the Securities Act and any applicable state statutes.
9. Successors and Assigns. The terms and provisions of this Warrant
shall be binding upon the Company and the Holder and their respective successors
and assigns.
***Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
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26
10. Loss, Theft, Destruction or Mutilation of Warrant. Upon receipt by
the Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Warrant, and in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to the Company,
and upon reimbursement to the Company of all reasonable expenses incidental
thereto, and upon surrender and cancellation of this Warrant, if mutilated, the
Company will make and deliver a new warrant of like tenor and dated as of the
date of such cancellation, in lieu of this Warrant.
11. Saturdays, Sundays, Holidays, etc. If the last or appointed day for
the taking of any action or the expiration of any right required or granted
herein shall be a Saturday, Sunday or legal holiday, then such action may be
taken or such right may be exercised, except as to payment of the purchase
price, on the next succeeding day that is not a Saturday, Sunday or legal
holiday.
12. Amendments and Waivers. Any term of this Warrant may be amended and
the observance of any term of this Warrant may be waived (either generally or in
a particular instance and either retroactively or prospectively), only with the
written consent of the Company and the Holder.
13. Notice. Any notice required under this Warrant shall be delivered in
the manner set forth in Section 8.6 of the Purchase Agreement.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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27
In witness whereof, this Common Stock Purchase Warrant has been executed
as of the date set forth below.
Dated: April 24, 1998 LIGAND PHARMACEUTICALS
INCORPORATED
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------------------
Title: Sr. V.P., General Counsel, Government
------------------------------------------
Affairs
The undersigned Holder agrees and accepts this Warrant and acknowledges
that it has read and confirms each of the representations contained in Section 3
of the Purchase Agreement.
SMITHKLINE XXXXXXX PLC
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------------
Title: Attorney-in-Fact
------------------------------------------
[SIGNATURE PAGE TO COMMON STOCK PURCHASE WARRANT]
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SUBSCRIPTION FORM
Ligand Pharmaceuticals Incorporated
00000 Xxxxxxx Xxxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
The undersigned, _____________________________, hereby elects
to purchase, pursuant to the provisions of the Common Stock Purchase Warrant
dated April 24, 1998, held by the undersigned, _________ shares of the Common
Stock of Ligand Pharmaceuticals Incorporated, a Delaware corporation.
The undersigned hereby confirms and acknowledges the investment
representations and warranties made in the Stock and Warrant Purchase Agreement
dated March 17, 1998, among Ligand Pharmaceuticals Incorporated, the Holder and
SmithKline Xxxxxxx Corporation, and reaffirms each of such representations and
warranties as of the date hereof and accepts such shares subject to the
restrictions of such Agreement.
Dated:___________________ ,_______
----------------------------------------------
(Signature must conform exactly to name of
Holder as specified on the face of the Warrant)
-----------------------------------------------
(Print Name)
-----------------------------------------------
(Address)
29
EXHIBIT B
SCHEDULE OF EXCEPTIONS
This Schedule of Exceptions is made and given pursuant to Section 2 of
the Stock and Warrant Purchase Agreement dated as of March 17, 1998 (the
"Agreement"). The section numbers in this Schedule of Exceptions correspond to
the section numbers in the Agreement; however, any information disclosed herein
under any section number shall be deemed to be disclosed and incorporated into
any other section number under the Agreement where such disclosure would
otherwise be appropriate. Any terms defined in the Agreement shall have the same
meaning when used in this Schedule of Exceptions as when used in the Agreement
unless the context otherwise requires.
Nothing herein constitutes an admission of any liability or obligation
of the Company nor an admission against the Company's interest. The inclusion of
any agreement or other matter herein or any exhibit hereto should not be
interpreted as indicating that the Company has determined that such an agreement
or other matter is necessarily material to the Company. Investor and SBC each
acknowledge that certain information contained in this schedule may constitute
material confidential information relating to the Company which may not be used
for any purpose other than in connection with Investor's decision to purchase
the Company's Common Stock and the Warrant pursuant to the Agreement.
Schedule 2.1 -- Organization, Good Standing and Qualification
Allergan Ligand Retinoid Therapeutics, Inc. ("ALRT") is a Delaware
corporation which, following the consummation of the buyback of all outstanding
shares of Callable Common Stock of ALRT, $0.001 par value per share (the
"Callable Common Stock") in November 1997 described below, is a subsidiary of
the Company.
Schedule 2.2 -- Authorization
The Company intends to file a Nasdaq National Market Notification Form
for Listing of Additional Shares Pursuant to SEC Rule 10b-17 shortly following
the issuance of the Shares.
Schedule 2.4 -- SEC Reports
In September 1997, the Company filed a Registration Statement on Form
S-1 (No. 333-36535) (the "Registration Statement") with the Securities and
Exchange Commission in connection with the public offering of an indefinite
number of shares of Common Stock, par value $.001 per share (the "Shares") of
the Company with an aggregate value of $46,410,000. In addition, the Company
filed a Schedule 13e-3 with respect to the transaction. In November 1997, the
Company issued an aggregate of 3,166,567 shares of Common Stock and paid an
aggregate of $25,000,000 in cash to ALRT stockholders. ALRT's stockholders
received such Shares in connection with the Company's exercise of its option to
acquire all of the outstanding shares of the Callable Common Stock.
B-1
30
In September 1997, in connection with the Company and Allergan, Inc.'s
("Allergan") exercise of their respective options to purchase Callable Common
Stock and assets of ALRT as set forth in the Registration Statement, the Company
and ALRT also agreed to restructure the terms and conditions relating to
research, development, commercialization and sublicense rights for the ALRT
compounds, as more fully described in the Registration Statement. The
restructured arrangement with Allergan closed in November 1997.
In October 1997, the Company announced the closure of the Alameda
facility housing Glycomed at the expiration of the leases in October 1997. In
connection with this closure, Glycomed's assets and programs were transferred
for integration with the Company's San Diego operations.
In November 1997, the Company and Xxx Lilly and Company ("Lilly")
entered into a strategic alliance for the discovery and development of products
based upon the Company's intracellular technology. The collaboration will focus
on products with broad applications across metabolic diseases, including
diabetes, obesity, dislipidemia, insulin resistance and cardiovascular diseases
associated with insulin resistance and obesity. The specifics of the transaction
with Lilly are more fully described in the Registration Statement and included a
$37.5 million equity investment by Lilly in Ligand.
In December 1997, the Company converted $1.25 million of the convertible
notes outstanding to American Home Products into 124,875 shares of the Company's
Common Stock at a $10.01 conversion price, resulting in an outstanding balance
of convertible notes of $3.75 million.
Schedule 2.13 -- Intellectual Property
The Company has become aware that a United States patent has been issued
to, and foreign counterparts have been filed by, Xxxxxxx XxXxxxx ("XxXxxxx")
which covers pharmaceutical uses of 9-cis-retinoic acid (LGD1057) which may
conflict with the Company's right under the patent applications. The U.S. Patent
and Trademark Office ("PTO") has informed the Company that the overlapping
claims are patentable to the Company and initiated an interference proceeding to
determine whether the Company or XxXxxxx is entitled to a patent by having been
first to invent the common subject matter. The Company cannot be assured of a
favorable outcome in the interference proceeding because of factors not known at
this time which may impact the outcome. In addition, the interference proceeding
may delay the decision of the PTO regarding the Company's application for the
Oral and Topical Panretin (LGD1057) products. While the Company believes that
the XxXxxxx patent does not cover the use of Oral and Topical Panretin (LGD1057)
to treat leukemias such as APL and sarcomas such as KS, or the treatment of skin
diseases such as psoriasis, if the Company does not prevail in the interference
proceeding, the XxXxxxx patent might block the Company's use of Oral and Topical
Panretin (LGD1057) in certain cancers, and the Company may not be able to obtain
patent protection for the Oral and Topical Panretin (LGD1057) products.
B-2
