AMENDMENT NO. 3 TO OPTION AND WHOLESALE PURCHASE AGREEMENT
This Amendment is executed as of the 11th day of May, 1998 by and
between Xxx Xxxxx and Company ("Lilly") and Ligand Pharmaceuticals Incorporated
("Ligand").
WHEREAS, Lilly and Ligand have entered into an Option and Wholesale
Purchase Agreement dated as of November 25, 1997, amended on February 23, 1998
and further amended on March 16, 1998 (the "Agreement"); and
WHEREAS, the parties now desire to amend the Agreement to limit the time
period during which Section 1.3 of the Agreement will be operative.
NOW, therefore, in consideration of the foregoing, the mutual covenants
set forth below and other consideration, receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:
1. Section 1.3 of the Agreement is hereby amended to read in its
entirety as follows:
"1.3 CASH/ROYALTY OPTION. On or before the earlier of (i) January 31,
1999 or (ii) the Effective Date (as defined therein) of the Agreement
between Ligand and Lilly dated May 11, 1998 (the "Subsequent Agreement")
(collectively, (i) and (ii) shall be known as the "Cash/Royalty
Termination Date"), Ligand may determine to exercise the Cash/Royalty
Option (as defined below), by delivery of written notice to Lilly
informing Lilly of its decision to exercise the Cash/Royalty Option (the
"Cash/Royalty Notice"). Upon delivery of the Cash/Royalty Notice, this
Agreement shall automatically terminate and the parties only surviving
rights and obligations under this Agreement shall be as follows
(collectively, (a) and (b) below shall be known as the `Cash/Royalty
Option"):
(a) Subject to the terms and conditions set forth in the stock
purchase agreement described in Section 4.6, Lilly shall purchase from
Ligand, and Ligand shall sell and issue to Lilly, for Twenty Million
Dollars ($20,000,000), the number of shares of Ligand's voting common
stock (the "Shares") equal to Twenty Million Dollars ($20,000,000)
divided by one hundred twenty percent (120%) of the average daily
closing price for the Shares as reported by the National Association of
Securities Dealers, Inc. on the twenty (20) consecutive trading days
immediately preceding the date which is five (5) days prior to the date
of the Cash/Royalty Notice; and
(b) Ligand shall have the right to designate either Targretin (as
defined in that certain Development and License Agreement (Targretin)
dated the date of this Agreement), Compound 268 or Compound 324 (each as
defined in that certain Collaboration Agreement dated the date of this
Agreement) for increased royalties, which right shall be exercised in
the manner set forth and on the terms and conditions provided in Section
5.1(b) of the Targretin Agreement with respect to
1
Targretin, or Section 6.1(b) of the Collaboration Agreement with
respect to Compound 268 or Compound 324.
The Cash/Royalty Option shall terminate if not exercised before the
Cash/Royalty Termination Date and thereafter the only option available
under this Agreement shall be the Ligand Option."
2. All other terms and conditions of the Agreement shall remain in
full force and effect.
3. As of the date of this Amendment, Lilly and Ligand have entered into
an Agreement (the "Lilly Agreement") which sets forth certain rights relating to
the Product. In the event of inconsistency between this Amendment and the Lilly
Agreement, the terms of the Lilly Agreement shall govern.
4. This Amendment may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one in the same.
[Remainder of Page Intentionally Left Blank]
2
LIGAND PHARMACEUTICALS XXX XXXXX AND COMPANY
INCORPORATED
By: By:
------------------------- -------------------------
Title: Title:
------------------------- -------------------------
Date: May ___, 1998 Date: May ___, 1998
[SIGNATURE PAGE TO AMENDMENT NO. 3 TO
OPTION AND WHOLESALE PURCHASE AGREEMENT]
3
