Exhibit 1.1
$135,000,000 Principal Amount
Ligand Pharmaceuticals Incorporated
6% Convertible Subordinated Notes due 2007
PURCHASE AGREEMENT
PURCHASE AGREEMENT
November 21, 2002
UBS WARBURG LLC
as Initial Purchaser
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs and Mesdames:
Ligand Pharmaceuticals Incorporated, a Delaware corporation (the
"COMPANY"), proposes to issue and sell to UBS Warburg LLC (the "INITIAL
PURCHASER") $135,000,000 aggregate principal amount of its 6% Convertible
Subordinated Notes due 2007 (the "FIRM NOTES"). In addition, solely for the
purpose of covering over-allotments, the Company proposes to grant to the
Initial Purchaser the option to purchase from the Company up to an additional
$20,250,000 aggregate principal amount of the Company's 6% Convertible
Subordinated Notes due 2007 (the "ADDITIONAL NOTES"). The Firm Notes and the
Additional Notes are hereinafter collectively sometimes referred to as the
"NOTES."
The Notes are to be issued pursuant to an indenture (the "INDENTURE")
to be dated as of November 26, 2002, between the Company and ▇.▇. ▇▇▇▇▇▇ Trust
Company, National Association, as trustee (the "TRUSTEE"). The Notes will be
convertible in accordance with their terms and the terms of the Indenture into
shares of the common stock (the "COMMON STOCK") of the Company, par value $0.001
per share (the "SHARES").
The Notes and the Shares will be offered without being registered
under the Securities Act of 1933, as amended (the "SECURITIES ACT"), to
"qualified institutional buyers" in compliance with the exemption from
registration provided by Rule 144A under the Securities Act ("RULE 144A").
The Initial Purchaser and its direct and indirect transferees will be
entitled to the benefits of a Registration Rights Agreement to be entered into
at or prior to the time of purchase (as hereinafter defined) between the Company
and the Initial Purchaser (the "REGISTRATION RIGHTS AGREEMENT").
The Company will purchase United States government securities in such
amount sufficient to provide for payment in full of the first four scheduled
interest payments on the Firm Notes (and Additional Notes, if issued). The
Company will pledge the government securities as security for the Firm Notes
(and Additional Notes, if issued) for the exclusive and ratable benefit of the
holders of the Notes (including the Initial Purchaser and its direct and
indirect transferees) pursuant to a Pledge Agreement to be entered into at or
prior to the time of purchase between the Company and the Trustee (the "PLEDGE
AGREEMENT") and pursuant to a Control Agreement to be entered into at or prior
to the time of purchase among the Company, the Trustee and a securities
intermediary and depository bank (the "CONTROL AGREEMENT").
In connection with the sale of the Notes, the Company has prepared a
preliminary offering memorandum (the "PRELIMINARY MEMORANDUM") and will prepare
a final offering memorandum (the "FINAL MEMORANDUM" and, with the Preliminary
Memorandum, each a "MEMORANDUM") including or incorporating by reference a
description of the terms of the Notes and the Shares, the terms of the offering
and a description of the Company. As used herein, the terms "PRELIMINARY
MEMORANDUM", "FINAL MEMORANDUM" and "MEMORANDUM" shall include in each case the
documents incorporated by reference therein, if any. The terms "SUPPLEMENT",
"AMENDMENT" and "AMEND" as used herein with respect to a Memorandum shall
include all documents deemed to be incorporated by reference in the Preliminary
Memorandum or Final Memorandum, if any, that are filed subsequent to the date of
such Memorandum with the Securities and Exchange Commission (the "COMMISSION")
pursuant to the Securities Exchange Act of 1934, as amended (the "EXCHANGE
ACT").
The Company and the Initial Purchaser agree as follows:
1. SALE AND PURCHASE: Upon the basis of the warranties and
representations and subject to the other terms and conditions herein set forth,
the Company agrees to sell to the Initial Purchaser, and the Initial Purchaser
agrees to purchase from the Company, the Firm Notes at a purchase price of 97%
of the principal amount thereof.
In addition, the Company hereby grants to the Initial Purchaser the
one-time option to purchase, and upon the basis of the representations and
warranties and subject to the other terms and conditions herein set forth, the
Initial Purchaser shall have the one-time right to purchase from the Company,
all or a portion of the Additional Notes as may be necessary to cover
over-allotments made in connection with the offering of the Firm Notes, at a
purchase price of 97% of the principal amount thereof, plus accrued interest, if
any, from the time of purchase (as hereinafter defined) to the additional time
of purchase (as hereinafter defined). This option may be exercised by you at any
time (but not more than once) on or before the thirtieth day following the date
hereof by written notice to the Company. Such notice shall set forth the
aggregate initial principal amount of Additional Notes as to which the option is
being exercised and the date and time when the Additional Notes are to be
delivered (such date and time being herein referred to as the "ADDITIONAL TIME
OF PURCHASE"); PROVIDED, HOWEVER, that the additional time of purchase shall not
be earlier than (i) the time of purchase or (ii) the second business day after
the date on which the option shall have been exercised nor later than the tenth
business day after the date on which the option shall have been exercised. As
used herein, "business day" shall mean a day on which the NASDAQ National Market
is open for trading.
2. PAYMENT AND DELIVERY: Payment of the purchase price for the Firm
Notes shall be made to the Company by Federal (same day) funds, against delivery
of the Firm Notes to you, at the offices of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP in Los Angeles,
California, or
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at such other place as may be agreed upon by the parties hereto, for the account
of the Initial Purchaser. Such payment and delivery shall be made at 10:00 A.M.,
eastern standard time, on November 26, 2002 (unless another time shall be agreed
to by you and the Company). The time at which such payment and delivery are
actually made is herein sometimes called the "TIME OF PURCHASE."
Payment of the purchase price for the Additional Notes shall be made
at the additional time of purchase in the same manner and at the same office and
time of day as the payment for the Firm Notes.
Certificates for the Notes shall be in definitive form or global form,
as specified by you, and registered in the names and in such denominations as
you shall request in writing not later than two full business days prior to the
time of purchase or the additional time of purchase, as the case may be. For the
purpose of expediting the checking of the certificates for the Notes by you, the
Company agrees to make such certificates available to you for such purpose at
least one full business day preceding the time of purchase or the additional
time of purchase, as the case may be.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY: The Company
represents and warrants to the Initial Purchaser that:
(a) (i) Each document, if any, filed or to be filed pursuant to the
Exchange Act and incorporated by reference in either Memorandum complied or
will comply when so filed in all material respects with the Exchange Act
and the applicable rules and regulations of the Commission thereunder and
(ii) the Preliminary Memorandum does not contain and the Final Memorandum,
as amended or supplemented, as applicable, will not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements therein, in the light of the circumstances under which
they were made, not misleading, except that the representations and
warranties set forth in this paragraph do not apply to statements or
omissions in either Memorandum based upon information relating to the
Initial Purchaser furnished to the Company in writing by or on behalf of
the Initial Purchaser expressly for use therein;
(b) As of September 30, 2002, the Company had an authorized
capitalization as set forth under the column heading entitled "Actual" in
the section of the Final Memorandum entitled "Capitalization" and, as
adjusted to give effect to the offering of the Firm Notes and the
application of the net proceeds therefrom as described in the "Use of
Proceeds" section of the Final Memorandum, the Company would, as of
September 30, 2002, have had an authorized capitalization as set forth
under the column heading entitled "As Adjusted" in the section of the Final
Memorandum entitled "Capitalization"; all of the issued and outstanding
shares of capital stock of the Company have been duly and validly
authorized and issued and are fully paid and non-assessable and were not
issued in violation of statutory or contractual preemptive rights, resale
rights, rights of first refusal and similar rights, and no person has the
right to
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receive or purchase shares of capital stock of the Company as a
result of the prior issuance of outstanding shares of capital stock of the
Company;
(c) Set forth on Annex A hereto is a list of all of the Company's
subsidiaries, as defined in the Securities Act (such subsidiaries being
referred to herein individually as a "SUBSIDIARY" and collectively as the
"SUBSIDIARIES"); except for the Subsidiaries, the Company does not control
any person or entity and is not under common control with any person or
entity; each of the Company and the Subsidiaries has been duly incorporated
and is validly existing as a corporation under the laws of the jurisdiction
of its incorporation, with all requisite corporate power and authority to
own its properties and conduct its business as described in the Final
Memorandum; all of the issued shares of capital stock of each Subsidiary of
the Company have been duly and validly authorized and issued, are fully
paid and non-assessable and are owned directly or indirectly by the
Company, free and clear of all liens, encumbrances, equities or claims;
(d) The Company and each of its Subsidiaries are duly qualified or
licensed to do business as foreign corporations and are in good standing in
each jurisdiction in which the conduct of their respective businesses or
their ownership or leasing of property requires such qualification or
license, except to the extent that the failure, individually or in the
aggregate, to be so qualified or licensed or be in good standing could not
reasonably be expected to have a material adverse effect on the operations,
business, prospects or condition (financial or otherwise) of the Company
and its Subsidiaries, taken as a whole (a "MATERIAL ADVERSE EFFECT"); and
the Company and each of its Subsidiaries are in compliance in all respects
with the laws, orders, rules, regulations and directives issued or
administered by such jurisdictions, except where the failure to be in
compliance could not reasonably be expected to have a Material Adverse
Effect;
(e) Neither the Company nor any of its Subsidiaries is in violation or
breach of, or in default under (nor has any event occurred which with
notice, lapse of time, or both would constitute a violation or breach of,
or default under), (A) its charter or by-laws, (B) any license, indenture,
mortgage, deed of trust, bank loan or credit agreement or other evidence of
indebtedness, or any lease, contract or other agreement or instrument to
which the Company or any of its Subsidiaries is a party or by which any of
them or their properties may be bound or affected, or (C) any federal,
state, local or foreign law, regulation or rule, or under any rule or
regulation of any self-regulatory or other non-governmental regulatory
authority (including, but not limited to, the Nasdaq Stock Market, Inc.
("NASDAQ")), or any decree, judgment or order applicable to the Company or
any of its Subsidiaries, except, in the case of clauses (B) and (C) above,
for such violations, breaches or defaults that could not reasonably be
expected to result in a Material Adverse Effect; and the execution,
delivery and performance of this Agreement, the Registration Rights
Agreement, the Indenture, the Pledge Agreement, the Control Agreement and
the Notes and consummation of the transactions contemplated hereby and
thereby, including the issuance of the Notes and the issuance of the Shares
upon conversion of the Notes, will not conflict
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with, or result in any violation or breach of or constitute a default
under (nor constitute any event which with notice, lapse of time, or both
would constitute a violation or breach of, or default under), (X) any
provisions of the charter or by-laws of the Company or any of its
Subsidiaries, (Y) any provision of any license, indenture, mortgage, deed
of trust, bank loan or credit agreement or other evidence of indebtedness,
or any lease, contract or other agreement or instrument to which the
Company or any of its Subsidiaries is a party or by which any of them or
their properties may be bound or affected, or (Z) any federal, state, local
or foreign law, regulation or rule, or under any rule or regulation of any
self-regulatory or other non-governmental regulatory authority (including,
but not limited to, Nasdaq), or any decree, judgment or order applicable to
the Company or any of its Subsidiaries, except, in the case of clauses (Y)
and (Z) above, for such violations, breaches or defaults that could not
reasonably be expected to result in a Material Adverse Effect;
(f) The Indenture has been duly authorized by the Company and when
executed and delivered by the Company and the other parties thereto will be
a legal, valid and binding agreement of the Company, enforceable in
accordance with its terms, except as the enforceability thereof may be
limited by bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or similar laws affecting creditors' rights generally and
general principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law) and except to the extent
that rights to indemnity may be limited by applicable law;
(g) The Registration Rights Agreement has been duly authorized by the
Company and when executed and delivered by the Company and the other
parties thereto will be a legal, valid and binding agreement of the
Company, enforceable in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or similar laws affecting creditors'
rights generally and general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at law) and except
to the extent that rights to indemnity may be limited by applicable law;
(h) The Notes have been duly authorized by the Company and when
executed and delivered by the Company and duly authenticated in accordance
with the terms of the Indenture and delivered to and paid for by the
Initial Purchaser in accordance with the terms hereof will constitute
legal, valid and binding obligations of the Company, enforceable in
accordance with their terms, except as the enforceability thereof may be
limited by bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or similar laws affecting creditors' rights generally and
general principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law) and except to the extent
that rights to indemnity may be limited by applicable law, and will be
entitled to the benefits of the Indenture, the Registration Rights
Agreement, the Pledge Agreement and the Control Agreement; the Shares
initially issuable upon conversion of the Notes have been duly authorized
and validly reserved for
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issuance upon conversion of the Notes, and upon conversion of the
Notes in accordance with their terms and the terms of the Indenture will be
issued free of statutory and contractual preemptive rights and are
sufficient in number to meet the current conversion requirements, and such
Shares, when so issued upon such conversion in accordance with the terms of
the Indenture, will be duly and validly issued and fully paid and
nonassessable;
(i) This Agreement has been duly authorized, executed and delivered by
the Company and is a legal, valid and binding agreement of the Company,
enforceable in accordance with its terms, except as the enforceability
thereof may be limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or similar laws affecting creditors' rights
generally and general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at law) and except
to the extent that rights to indemnity may be limited by applicable law;
(j) The Pledge Agreement has been duly authorized by the Company and
when executed and delivered by the Company and the other parties thereto
will be a legal, valid and binding agreement of the Company, enforceable in
accordance with its terms, except as the enforceability thereof may be
limited by bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or similar laws affecting creditors' rights generally and
general principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law) and except to the extent
that rights to indemnity may be limited by applicable law;
(k) The Control Agreement has been duly authorized by the Company and
when executed and delivered by the Company and the other parties thereto
will be a legal, valid and binding agreement of the Company, enforceable in
accordance with its terms, except as the enforceability thereof may be
limited by bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or similar laws affecting creditors' rights generally and
general principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law) and except to the extent
that rights to indemnity may be limited by applicable law;
(l) The terms of the Notes, the Registration Rights Agreement, the
Indenture, the Pledge Agreement, the Control Agreement and the capital
stock of the Company, including the Shares, conform in all material
respects to the description thereof contained in the Final Memorandum;
(m) No approval, authorization, consent or order of or filing with any
federal, state, local or foreign governmental or regulatory commission,
board, body, authority or agency, or of or with any self-regulatory or
other non-governmental regulatory authority (including, but not limited to,
Nasdaq), is required to be made or obtained by the Company or any of its
Subsidiaries in connection with the issuance and sale by the Company of the
Notes and the
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Shares as contemplated hereby other than (i) as may be required (A)
under the securities or blue sky laws of the various jurisdictions in which
the Notes and the Shares are being offered by the Initial Purchaser and (B)
by Federal and state securities laws with respect to the Company's
obligations under the Registration Rights Agreement, and (ii) as will be
made or obtained at or prior to the time of purchase or the additional time
of purchase, as the case may be (or, if not required to be made or obtained
at or prior to the time of purchase or the additional time of purchase, as
the case may be, that will be made or obtained when required);
(n) Each of Deloitte & Touche LLP and Ernst & Young LLP, whose reports
on the consolidated financial statements of the Company and its
Subsidiaries are included or incorporated by reference in the Final
Memorandum, are independent public accountants with respect to the Company
as required by the Securities Act and the applicable published rules and
regulations thereunder;
(o) Each of the Company and its Subsidiaries has obtained and
possesses all necessary licenses, authorizations, consents and approvals
required under any federal, state, local or foreign law or from other
persons (collectively, "CONSENTS") and has made all necessary filings
required under any federal, state, local or foreign law, regulation or rule
("FILINGS") in order to conduct its business as currently conducted, except
where the failure to have any such Consent or to have made any such Filing
could not reasonably be expected to have a Material Adverse Effect; neither
the Company nor any of its Subsidiaries is in violation of, or in default
under, any requirement relating to any such Consent or Filing, except where
such violation or default could not reasonably be expected to have a
Material Adverse Effect;
(p) Except as described or incorporated by reference in the Final
Memorandum, there are no actions, suits or proceedings pending or, to the
knowledge of the Company, threatened against the Company or any of its
Subsidiaries or any of their respective properties, at law or in equity, or
before or by any federal, state, local or foreign governmental or
regulatory commission, board, body, authority or agency, or before or by
any self-regulatory or other non-governmental regulatory authority
(including, but not limited to, Nasdaq), which would result in a judgment,
decree or order having a Material Adverse Effect;
(q) Except as could not reasonably be expected to have a Material
Adverse Effect, the Company and each Subsidiary have filed on a timely
basis all necessary federal, state and foreign income, franchise and other
tax returns (other than returns being contested in good faith) and have
paid all taxes shown thereon as due (other than those being contested in
good faith or which are currently payable without penalty or interest), and
the Company has no knowledge of any tax deficiency which has been or might
be asserted against the Company or any Subsidiary which would have a
Material Adverse Effect; all material tax liabilities are adequately
provided for within the financial statements of the Company in accordance
with generally accepted accounting principles ("GAAP");
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(r) The Company and each Subsidiary maintains insurance of the types
and in the amounts reasonably believed to be adequate for their business,
all of which insurance is in full force and effect;
(s) Neither the Company nor its Subsidiaries are involved in any labor
dispute or disturbance nor, to the knowledge of the Company, is any such
dispute or disturbance threatened except, in each case, for disputes or
disturbances which could not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect;
(t) Except as described or incorporated by reference in the Final
Memorandum, the Company and each Subsidiary owns or possesses such licenses
or other rights to use all patents, patent applications, trademarks,
trademark applications, service marks, service ▇▇▇▇ applications, trade
names, copyrights, manufacturing processes, formulae, trade secrets,
know-how, franchises, and other material intangible property and assets
(collectively, "INTELLECTUAL PROPERTY") necessary to the conduct of their
businesses as described or incorporated by reference in the Final
Memorandum without any known infringement of a valid and enforceable
Intellectual Property right of others, except where the failure to so own
or possess such rights could not reasonably be expected to have a Material
Adverse Effect; the Company has no knowledge that it or any Subsidiary
lacks or will be unable to obtain any rights or licenses to use any of the
Intellectual Property necessary to conduct its business as described or
incorporated by reference in the Final Memorandum without any known
infringement of a valid and enforceable Intellectual Property right of
others, except as described or incorporated by reference in the Final
Memorandum and except where the failure to have or obtain such rights or
licenses could not reasonably be expected to have a Material Adverse
Effect; the Company has not received any written notice of infringement of
valid and enforceable rights or claims of others with respect to any
Intellectual Property which infringement could reasonably be expected to
have a Material Adverse Effect, except to the extent described or
incorporated by reference in the Final Memorandum; the Company is not aware
of any valid and enforceable patents of others which are infringed by the
Company's or any Subsidiaries' products or which would be infringed upon
commercialization of the products under development referred to or
incorporated by reference in the Final Memorandum, which infringement could
reasonably be expected to have a Material Adverse Effect, except as
described or incorporated by reference in the Final Memorandum;
(u) The audited financial statements and related notes thereto of the
Company included or incorporated by reference in the Final Memorandum
present fairly in all material respects the consolidated financial position
of the Company and its Subsidiaries as of the dates indicated and the
results of operations and cash flows of the Company and its Subsidiaries
for the periods specified; such financial statements have been prepared in
conformity with GAAP applied on a consistent basis during the periods
involved;
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(v) Subsequent to the respective dates as of which information is
given in the Final Memorandum, there has not been (A) any material and
unfavorable change, financial or otherwise, in the operation, business,
prospects or condition (financial or otherwise) of the Company and its
Subsidiaries, taken as a whole, (B) any transaction entered into by the
Company or any of its Subsidiaries, which is material to the Company and
its Subsidiaries, taken as a whole, or (C) any obligation, contingent or
otherwise, directly or indirectly, incurred by the Company or any of its
Subsidiaries which is material to the Company and its Subsidiaries, taken
as a whole;
(w) The Company and its Subsidiaries (i) are in compliance with any
and all applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
("ENVIRONMENTAL Laws"), (ii) have received and currently possess all
permits, licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and (iii) are in
compliance with all terms and conditions of any such permit, license or
approval, except where such noncompliance with Environmental Laws, failure
to receive required permits, licenses or other approvals or failure to
comply with the terms and conditions of such permits, licenses or approvals
could not reasonably be expected to have a Material Adverse Effect;
(x) When the Notes are issued pursuant to this Agreement, the Notes
will not be of the same class (within the meaning of Rule 144A) as
securities that are listed on a national securities exchange registered
pursuant to Section 6 of the Exchange Act or quoted in a U.S. automated
inter-dealer quotation system;
(y) Neither the Company nor any affiliate (as defined in Rule 501(b)
of Regulation D under the Securities Act, an "AFFILIATE") of the Company
has directly, or through any agent, (i) sold, offered for sale, solicited
offers to buy or otherwise negotiated in respect of, any security (as
defined in the Securities Act) which is or will be integrated with the sale
of the Notes in a manner that would require the registration under the
Securities Act of the Notes or (ii) offered, solicited offers to buy or
sold the Notes by any form of general solicitation or general advertising
(as those terms are used in Regulation D under the Securities Act
("REGULATION D")) or in any manner involving a public offering within the
meaning of Section 4(2) of the Securities Act; PROVIDED, HOWEVER, that the
Company makes the foregoing representation and warranty with respect to
Elan Corporation plc ("ELAN") and its subsidiaries only to the Company's
knowledge;
(z) It is not necessary in connection with the offer, sale and
delivery of the Notes to the Initial Purchaser pursuant to this Agreement
to register the Notes under the Securities Act or to qualify the Indenture
under the Trust Indenture Act of 1939, as amended;
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(aa) The Company is not and, after giving effect to the offering and
sale of the Notes and the application of the proceeds thereof as described
in the Final Memorandum will not be, required to register as an "investment
company" as defined in the Investment Company Act of 1940, as amended;
(bb) Except as described or incorporated by reference in the Final
Memorandum, there are no contracts, agreements or understandings between
the Company and any person granting such person the right to require the
Company to register any securities with the Commission;
(cc) The clinical, pre-clinical and other studies and tests conducted
by or on behalf of or sponsored by the Company or any of the Subsidiaries
or in which the Company, any of the Subsidiaries or its products or product
candidates have participated that are described or incorporated by
reference in the Final Memorandum or the results of which are referred to
or incorporated by reference in the Final Memorandum were and, if still
pending, are being conducted in accordance with standard medical and
scientific research procedures, except where the failure to so conduct such
studies and tests could not reasonably be expected to have a Material
Adverse Effect; except to the extent disclosed or incorporated by reference
in the Final Memorandum or where the failure to so operate or be in
compliance could not reasonably be expected to have a Material Adverse
Effect, the Company and each of the Subsidiaries has operated and currently
is in compliance in all material respects with all applicable rules,
regulations and policies of the U.S. Food and Drug Administration and
comparable drug regulatory agencies outside of the United States
(collectively, the "REGULATORY AUTHORITIES"); and except to the extent
disclosed or incorporated by reference in the Final Memorandum, neither the
Company nor any of the Subsidiaries has received any notices or other
correspondence from the Regulatory Authorities or any other governmental
agency requiring the termination or suspension of any clinical or
pre-clinical studies or tests that are described or incorporated by
reference in the Final Memorandum or the results of which are referred to
or incorporated by reference in the Final Memorandum;
(dd) The chief executive officer of the Company and the chief
financial officer of the Company have made all certifications required by
the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 (the "▇▇▇▇▇▇▇▇-▇▇▇▇▇ ACT") and any related
rules and regulations promulgated by the Commission, and the statements
contained in any such certification are complete and correct; the Company
maintains "disclosure controls and procedures" (as defined in Rule
13a-14(c) under the Exchange Act); and the Company is otherwise in
compliance with all applicable provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act;
(ee) The Company and each of the Subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with management's general
or specific authorizations; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted
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accounting principles and to maintain asset accountability; (iii)
access to assets is permitted only in accordance with management's general
or specific authorization; and (iv) the recorded accountability for assets
is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences;
(ff) The Company is a corporation organized solely under the laws of
the State of Delaware and not of any other State or jurisdiction, and the
State of Delaware must maintain a public record showing the Company to have
been so organized. The Company's name, within the meaning of Section
9-503(a)(1) of the UCC, is Ligand Pharmaceuticals Incorporated. The Company
is located, within the meaning of Section 9-307 of the UCC, in the State of
Delaware. The Company's organizational identification number in the State
of Delaware is 2138989;
(gg) Upon the delivery of the Collateral (as defined in the Pledge
Agreement) in accordance with the terms of the Pledge Agreement, all
filings and other actions (including, without limitation, (A) actions
necessary to obtain control of the Collateral as provided in Sections
9-104, 9-105, 9-106 or 9-107 of the UCC, as applicable; and (B) actions
necessary to perfect the Trustee's security interest with respect to the
Collateral evidenced by a certificate of ownership) necessary to perfect
the security interest in the Collateral created under the Pledge Agreement
have been duly made or taken and are in full force and effect, and the
Pledge Agreement creates in favor of the Trustee for the ratable benefit of
the Holders of the Notes (as defined in the Pledge Agreement) a valid and,
together with such filings and other actions, perfected first-priority
security interest in the Collateral, securing the payment of the Secured
Obligations (as defined in the Pledge Agreement); and
(hh) The Subsidiaries other than Seragen, Inc. do not own or possess
any property or assets, or have any obligations or liabilities, or possess
any rights (by contract, franchise, permit or otherwise) or engage in any
operations that are, individually or in the aggregate, material to the
Company or its properties, operations, business, prospects or condition
(financial or otherwise).
4. REPRESENTATIONS AND WARRANTIES OF THE INITIAL PURCHASER. The
Initial Purchaser proposes to offer the Notes for sale upon the terms and
conditions set forth in this Agreement and the Final Memorandum, and the Initial
Purchaser hereby represents and warrants to and agrees with the Company that:
(a) It will offer and sell the Notes only to persons whom it
reasonably believes are "qualified institutional buyers" ("QIBS") within
the meaning of Rule 144A in transactions meeting the requirements of Rule
144A and that, in purchasing such Notes, are deemed to have represented and
agreed as provided in the Final Memorandum under the caption "Notice to
Investors";
11
(b) It is a QIB within the meaning of Rule 144A;
(c) It has not and will not, directly or indirectly, solicit offers
for, or offer or sell, the Notes by any form of general solicitation,
general advertising (as such terms are used in Regulation D) or in any
manner involving a public offering within the meaning of Section 4(2) of
the Securities Act; and
(d) With respect to offers and sales outside the United States:
(i) It understands that no action has been or will be taken in
any jurisdiction by the Company that would permit a public offering of
the Notes, or possession or distribution of either Memorandum or any
other offering or publicity material relating to the Notes, in any
country or jurisdiction where action for that purpose is required; and
(ii) It will comply with all applicable laws and regulations in
each jurisdiction in which it acquires, offers, sells or delivers
Notes or has in its possession or distributes either Memorandum or any
such other material, in all cases at its own expense.
(iii) The Notes have not been registered under the Securities Act
and may not be offered or sold within the United States or to, or for
the account or benefit of, U.S. persons except in accordance with Rule
144A or pursuant to another exemption from the registration
requirements of the Securities Act.
5. CERTAIN COVENANTS OF THE COMPANY: The Company hereby agrees that:
(a) The Company will prepare the Final Memorandum in a form approved
by the Initial Purchaser and will make no amendment or supplement to the
Final Memorandum which shall reasonably be disapproved by the Initial
Purchaser promptly after reasonable notice thereof;
(b) The Company will furnish such information and take such other
actions as the Initial Purchaser may reasonably request to qualify the
Notes and the Shares for offering and sale under the securities or blue sky
laws of such jurisdictions as the Initial Purchaser may designate and will
maintain such qualifications in effect so long as required for the
distribution of the Notes; PROVIDED that in connection therewith the
Company shall not be required to qualify as a foreign corporation, to file
a general consent to service of process or subject itself to any tax in any
such jurisdiction where it is not now so qualified or subject;
(c) The Company will furnish the Initial Purchaser with as many copies
of the Final Memorandum, any documents incorporated by reference therein
and any amendment or supplement thereto as the Initial Purchaser may from
time to time reasonably request, and if, at any time prior to the
completion of the resale of the Notes by the Initial Purchaser, any event
shall have occurred
12
as a result of which the Final Memorandum as then amended or
supplemented would include an untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made when
such Final Memorandum is delivered, not misleading, or, if for any other
reason it shall be necessary or desirable during such same period to amend
or supplement the Final Memorandum, the Company will notify the Initial
Purchaser and upon the request of the Initial Purchaser will prepare and
furnish without charge to the Initial Purchaser and to any dealer in
securities specified by the Initial Purchaser as many copies as the Initial
Purchaser may from time to time reasonably request of an amended Final
Memorandum or a supplement to the Final Memorandum which will correct such
statement or omission or effect such compliance;
(d) During the period beginning from the date hereof and continuing
until the date 90 days after the date of the Final Memorandum (the "LOCK-UP
PERIOD"), the Company will not, without the prior written consent of UBS
Warburg LLC, issue, offer, sell, contract to sell, pledge or otherwise
dispose of, or contract to dispose of, any Shares, any securities
substantially similar to the Notes or the Common Stock or any securities
that are convertible into or exchangeable for shares of Common Stock (other
than (i) the issuance of the Notes; (ii) the issuance of Shares upon
conversion of the Notes; (iii) the issuance of shares of Common Stock upon
conversion or exercise of convertible or exercisable or exchangeable
securities outstanding as of the date of this Agreement or (iv) the
issuance of shares of Common Stock or options pursuant to employee stock
option or employee stock purchase plans existing on, or upon exercise of
warrants outstanding as of, the date of this Agreement). During the first
45 days of the Lock-up Period, the Initial Purchaser may withhold its
consent to the actions described in this Section 5(d) for any reason or for
no reason. If after the expiration of the first 45 days of the Lock-up
Period, the average last reported sales price of the Common Stock on the
Nasdaq National Market for any five consecutive trading days equals or
exceeds $10.20 per share (adjusted for any stock split, combination or
similar transaction), then the Initial Purchaser may not thereafter
withhold its consent to such actions unreasonably;
(e) At any time when the Company is not subject to Section 13 or 15(d)
of the Exchange Act and so long as any of the Notes (or Shares issued upon
conversion thereof) are "restricted securities" within the meaning of Rule
144(a)(3) under the Securities Act, for the benefit of holders from time to
time of the Notes, the Company will furnish at its expense, upon request,
to holders of Notes and prospective purchasers of Notes information
satisfying the requirements of subsection (d)(4)(i) of Rule 144A;
(f) The Company will use its reasonable best efforts to cause the
Notes to be eligible for trading in PORTAL;
(g) For so long as the Notes remain outstanding, the Company will
furnish to the Initial Purchaser (i) copies of all reports or other
communications
13
(financial or other) furnished to stockholders of the Company, and
will deliver to the Initial Purchaser (ii) as soon as is reasonably
practical after they are available, (A) copies of any annual, quarterly or
current reports furnished to or filed by the Company with the Commission on
Forms 10-K, 10-Q and 8-K or such similar forms as are designated by the
Commission, and (B) copies of documents or reports filed with any
securities exchange on which the Notes or any class of securities of the
Company is listed;
(h) The Company will use the net proceeds received by it from the sale
of the Notes pursuant to this Agreement in the manner specified in the
Final Memorandum under the caption "Use of Proceeds";
(i) The Company will reserve and keep available at all times, free of
preemptive rights, Shares for the purpose of enabling the Company to
satisfy any obligations to issue Shares upon conversion of the Notes;
(j) The Company will use its reasonable best efforts to list, as
promptly as practicable but in no event later than the time that the
registration statement is declared effective in accordance with the
Registration Rights Agreement, and subject to notice of issuance, the
Shares on the NASDAQ National Market;
(k) Whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, the Company will pay or cause
to be paid all expenses incident to the performance of its obligations
under this Agreement, including, without limitation, (i) the fees,
disbursements and expenses of the Company's counsel and the Company's
accountants in connection with the issuance and sale of the Notes and all
other fees and expenses in connection with the preparation of each
Memorandum and all amendments and supplements thereto, including all
printing costs associated therewith, and the furnishing of copies thereof
to the Initial Purchaser and to dealers (including costs of mailing and
shipment), (ii) all costs related to the preparation, issuance, execution,
authentication and delivery of the Notes and the Shares, (iii) all costs
related to the transfer and delivery of the Notes to the Initial Purchaser,
including any transfer or other taxes payable thereon, (iv) reproduction
and/or printing and furnishing copies of this Agreement, the Registration
Rights Agreement, the Indenture, the Pledge Agreement and the Control
Agreement to the Initial Purchaser and (except closing documents) to
dealers (including costs of mailing and shipment), (v) all expenses in
connection with the qualification of the Notes and the Shares for offering
and sale under state laws and the cost of printing and furnishing of copies
of any blue sky or legal investment memorandum to the Initial Purchaser and
to dealers (including filing fees and the fees and disbursements of counsel
for the Initial Purchaser in connection with such qualification and in
connection with such blue sky or legal investment memorandum), (vi) the
costs and charges of the Trustee and any transfer agent, registrar or
depositary, (vii) the fees and expenses, if any, incurred in connection
with the admission of the Notes for trading in PORTAL or any appropriate
market
14
system, (viii) the costs and expenses of the Company relating to
investor presentations on any "road show" undertaken in connection with the
marketing of the offering of the Notes, including, without limitation,
expenses associated with the production of road show slides and graphics,
fees and expenses of any consultants engaged in connection with the road
show presentations with the prior approval of the Company, travel and
lodging expenses of the representatives and officers of the Company and any
such consultants, and the cost of any aircraft chartered in connection with
the road show, and (ix) all other cost and expenses incident to the
performance of the Company's obligations hereunder for which provision is
not otherwise made in this Section 5(k);
(l) Neither the Company nor any Affiliate (other than Elan and its
subsidiaries) will, and the Company will use its commercially reasonable
efforts to cause Elan and its subsidiaries not to, sell, offer for sale or
solicit offers to buy or otherwise negotiate in respect of any security (as
defined in the Securities Act) which could be integrated with the sale of
the Notes in a manner which would require the registration under the
Securities Act of the Notes;
(m) The Company will not to solicit any offer to buy or offer or sell
the Notes or the Shares by means of any form of general solicitation or
general advertising (as those terms are used in Regulation D) or in any
manner involving a public offering within the meaning of Section 4(2) of
the Securities Act;
(n) During the period of two years after the time of purchase or the
additional time of purchase, if later, the Company will not, and will not
permit any of its affiliates (as defined in Rule 144 under the Securities
Act ("RULE 144")), other than Elan and its subsidiaries, to, and will use
its commercially reasonable efforts to cause Elan and its subsidiaries not
to, resell any of the Notes or the Shares which constitute "restricted
securities" under Rule 144 that have been reacquired by any of them except
pursuant to an effective registration statement under the Securities Act;
(o) The Company will not take any action prohibited by Regulation M
under the Exchange Act in connection with the distribution of the Notes
contemplated hereby;
(p) Without the prior written consent of the Initial Purchaser, the
Company will not waive any provision of , and will fully enforce all of the
provisions of, Sections 2.7 and 3.6 of the Securities Purchase Agreement by
and among the Company, Elan International Services, Ltd. and Elan
Corporation plc, dated November 12, 2002; and
(q) The Company will pledge to the Trustee, for the exclusive and
ratable benefit of the holders of the Notes, and grant to the Trustee a
security interest and continuing lien in all of the Company's right, title
and interest in and to the Collateral (as defined in the Pledge Agreement)
on the terms and in the manner set forth in the Pledge Agreement.
15
6. REIMBURSEMENT OF INITIAL PURCHASER'S EXPENSES: If the Firm Notes
are not delivered for any reason other than the default by the Initial Purchaser
in its obligations hereunder, the Company shall, in addition to paying the
amounts described in Section 5(k) hereof, reimburse the Initial Purchaser for
all of its out-of-pocket expenses, including the reasonable fees and
disbursements of its counsel.
7. CONDITIONS OF INITIAL PURCHASER'S OBLIGATIONS: The obligations of
the Initial Purchaser hereunder are subject to the accuracy in all material
respects of the representations and warranties on the part of the Company on the
date hereof and at the time of purchase. The obligations of the Initial
Purchaser at the additional time of purchase are subject to the accuracy in all
material respects of the representations and warranties on the part of the
Company on the date hereof, at the time of purchase (unless previously waived)
and at the additional time of purchase, as the case may be. Additionally, the
obligations of the Initial Purchaser hereunder are subject to performance by the
Company of its obligations hereunder and to the following conditions:
(a) The Company shall furnish to you at the time of purchase and at
the additional time of purchase, as the case may be, an opinion of ▇▇▇▇▇▇▇▇
Chance US LLP, counsel for the Company, addressed to the Initial Purchaser
and dated the date of the time of purchase or the date of the additional
time of purchase, as the case may be, and in form reasonably satisfactory
to counsel for the Initial Purchaser, substantially in the form of EXHIBIT
A hereto;
(b) The Company shall furnish to you at the time of purchase and at
the additional time of purchase, as the case may be, one or more opinions
of ▇▇▇▇▇▇▇, Phleger & ▇▇▇▇▇▇▇▇ LLP, patent and litigation counsel for the
Company, addressed to the Initial Purchaser and dated the date of the time
of purchase or the date of the additional time of purchase, as the case may
be, and in form reasonably satisfactory to counsel for the Initial
Purchaser, substantially in the form of EXHIBIT B hereto;
(c) The Company shall furnish to you at the time of purchase and at
the additional time of purchase, as the case may be, an opinion of Warner
▇. ▇▇▇▇▇▇▇▇, General Counsel of the Company, addressed to the Initial
Purchaser and dated the date of the time of purchase or the date of the
additional time of purchase, as the case may be, and in form reasonably
satisfactory to counsel for the Initial Purchaser, substantially in the
form of EXHIBIT C hereto;
(d) You shall have received on the date of this Agreement from each of
Deloitte & Touche LLP and Ernst & Young LLP and at the time of purchase and
the additional time of purchase, as the case may be, from Deloitte & Touche
LLP customary comfort letters dated as of the date of this Agreement, the
date of the time of purchase and the date of the additional time of
purchase, as the case may be, and addressed to the Initial Purchaser, in
form and substance reasonably satisfactory to counsel for the Initial
Purchaser;
16
(e) You shall have received at the time of purchase and at the
additional time of purchase, as the case may be, the opinion of ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ LLP, counsel for the Initial Purchaser, dated the date of the
time of purchase or the date of the additional time of purchase, as the
case may be, in form and substance reasonably satisfactory to you;
(f) At the time of purchase or the additional time of purchase, as the
case may be, the Final Memorandum shall not contain an untrue statement of
a material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading;
(g) Between the time of execution of this Agreement and the time of
purchase or the additional time of purchase, as the case may be, (i) no
material and unfavorable change, financial or otherwise, in the operations,
business, prospects or condition of the Company and its Subsidiaries, taken
as a whole, shall occur or become known and (ii) no transaction which is
material and unfavorable to the Company shall have been entered into by the
Company or any of its Subsidiaries;
(h) The Company shall, at the time of purchase and the additional time
of purchase, as the case may be, deliver to you a certificate dated such
date of an executive officer of the Company to the effect set forth in
Sections 7 (f), (g) and (l), that the representations and warranties of the
Company set forth in this Agreement are true and correct as of such date,
and that the Company has complied with all of its agreements and satisfied
all of the conditions on its part to be performed or satisfied on or before
such date.
(i) You shall have received, at the time of purchase, copies, duly
executed by the Company and the other parties thereto (other than the
Initial Purchaser, if applicable), of the Registration Rights Agreement,
Pledge Agreement, Control Agreement and the Indenture and, at the
additional time of purchase, if applicable, copies, duly executed by the
Company and the other parties thereto, of the Supplemental Pledge
Agreement, as described in the Pledge Agreement;
(j) The Company shall have furnished to you such other documents and
certificates as to the accuracy and completeness of any statement in the
Final Memorandum as of the time of purchase and the additional time of
purchase, as the case may be, as you may reasonably request;
(k) The Notes shall have been designated for trading on PORTAL,
subject only to notice of issuance at or prior to the time of purchase; and
(l) Between the time of execution of this Agreement and the time of
purchase or additional time of purchase, as the case may be, there shall
not have occurred any downgrading, nor shall any notice have been given of
(i) any
17
intended or potential downgrading or (ii) any review or possible
change that does not indicate an improvement, in the rating accorded any
securities of or guaranteed by the Company or any Subsidiary of the Company
by any "nationally recognized statistical rating organization", as that
term is defined in Rule 436(g)(2) promulgated under the Securities Act.
8. TERMINATION: The obligations of the Initial Purchaser hereunder
shall be subject to termination in your absolute discretion if, since the time
of execution of this Agreement or the respective dates as of which information
is given in the Final Memorandum, (x) there has been any material and
unfavorable change, financial or otherwise, in the operations, business,
prospects or condition of the Company and its Subsidiaries, taken as a whole,
which would, in your judgment, make it impracticable to market the Notes in the
manner and on the terms set forth in the Final Memorandum, or (y) there shall
have occurred any downgrading, or any notice shall have been given of (i) any
intended or potential downgrading or (ii) any review or possible change that
does not indicate an improvement, in the rating accorded any securities of or
guaranteed by the Company or any Subsidiary of the Company by any "nationally
recognized statistical rating organization", as that term is defined in Rule
436(g)(2) promulgated under the Securities Act or, (z) if, at any time prior to
the time of purchase or, with respect to the purchase of any Additional Notes,
the additional time of purchase, as the case may be, trading in securities on
the New York Stock Exchange, the American Stock Exchange or the Nasdaq National
Market shall have been suspended or minimum prices shall have been established
on the New York Stock Exchange, the American Stock Exchange or the Nasdaq
National Market or if a banking moratorium shall have been declared either by
the United States or New York State authorities, or if the United States shall
have declared war in accordance with its constitutional processes or there shall
have occurred any material outbreak or escalation of hostilities or other
national or international calamity or crisis of such magnitude in its effect on
the financial markets of the United States as, in your judgment, would make it
impracticable to market the Notes in the manner and on the terms set forth in
the Final Memorandum.
If you elect to terminate this Agreement as provided in this Section
8, the Company shall be notified as provided for herein.
If the sale to the Initial Purchaser of the Notes, as
contemplated by this Agreement, is not carried out by the Initial Purchaser for
any reason permitted under this Agreement or if such sale is not carried out
because the Company shall be unable to comply and does not comply with any of
the terms of this Agreement, the Company shall not be under any obligation or
liability under this Agreement (except to the extent provided in Sections 5(k),
6 and 9 hereof), and the Initial Purchaser shall be under no obligation or
liability to the Company under this Agreement (except to the extent provided in
Section 9 hereof).
9. INDEMNITY BY THE COMPANY AND THE INITIAL PURCHASER:
(a) The Company agrees to indemnify, defend and hold harmless the
Initial Purchaser, its directors and officers, and any person who controls the
Initial
18
Purchaser within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act (each, an "INITIAL PURCHASER INDEMNIFIED PARTY"), from and
against any loss, damage, expense, liability or claim (including the reasonable
cost of investigation) which such Initial Purchaser Indemnified Party may incur
under the Securities Act, the Exchange Act or otherwise, insofar as such loss,
damage, expense, liability or claim arises out of or is based upon any untrue
statement or alleged untrue statement of a material fact contained in any
Memorandum, as amended or supplemented, if applicable, or arises out of or is
based upon any omission or alleged omission to state a material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, except insofar as any such loss, damage,
expense, liability or claim arises out of or is based upon any untrue statement
or alleged untrue statement of a material fact contained in and in conformity
with information relating to the Initial Purchaser furnished in writing by or on
behalf of the Initial Purchaser to the Company expressly for use in such
Memorandum or arises out of or is based upon any omission or alleged omission to
state in such information a material fact required to be stated in such
Memorandum or necessary to make such information not misleading. Notwithstanding
the foregoing, the indemnity agreement contained in this Section 9(a) as it may
relate to any untrue statement in or omission from a Memorandum shall not inure
to the benefit of the Initial Purchaser if it shall have been determined by a
court of competent jurisdiction by final and nonappealable judgment that (A) the
untrue statement in or omission from a Memorandum existed, (B) the Final
Memorandum, as amended or supplemented, corrected such alleged untrue statement
or omission and (C) the Initial Purchaser failed to send or give a copy of such
Final Memorandum, as amended or supplemented, to the person alleging such untrue
statement or omission at or prior to the written confirmation of the sale of
such Notes to such person, unless the failure to so send or give is the result
of noncompliance by the Company with Section 5(c) hereof.
(b) The Initial Purchaser agrees to indemnify, defend and hold
harmless the Company, its directors and officers and any person who controls the
Company within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act (each, a "COMPANY INDEMNIFIED PARTY") from and against any
loss, damage, expense, liability or claim (including the reasonable cost of
investigation) which such Company Indemnified Party may incur under the
Securities Act, the Exchange Act or otherwise, insofar as any such loss, damage,
expense, liability or claim arises out of or is based upon any untrue statement
or alleged untrue statement of a material fact contained in and in conformity
with information relating to the Initial Purchaser furnished in writing by or on
behalf of the Initial Purchaser to the Company expressly for use in such
Memorandum, as amended or supplemented, or arises out of or is based upon any
omission or alleged omission to state in such information a material fact
required to be stated in such Memorandum or necessary to make such information
not misleading.
(c) If any action, suit or proceeding (each, a "PROCEEDING") is
brought against any person in respect of which indemnity may be sought pursuant
to either subsection (a) or (b) of this Section 9, such person (the "INDEMNIFIED
PARTY") shall promptly notify the person against whom such indemnity may be
sought (the "INDEMNIFYING PARTY") in writing of the institution of such
Proceeding and such Indemnifying Party shall assume the defense of such
Proceeding, including the
19
employment of counsel reasonably satisfactory to such Indemnified Party and
payment of all fees and expenses; PROVIDED, HOWEVER, that the omission to so
notify such Indemnifying Party shall not relieve such Indemnifying Party from
any liability which it may have to such Indemnified Party or otherwise, except
to the extent the Indemnifying Party is materially prejudiced thereby. Such
Indemnified Party shall have the right to employ its own counsel in any such
case, but the fees and expenses of such counsel shall be at the expense of such
Indemnified Party unless the employment of such counsel shall have been
authorized in writing by such Indemnifying Party in connection with the defense
of such Proceeding or such Indemnifying Party shall not have employed counsel to
have charge of the defense of such Proceeding within 30 days of the receipt of
notice thereof or such Indemnified Party shall have reasonably concluded upon
written advice of counsel that there may be defenses available to it that are
different from, additional to, or in conflict with those available to such
Indemnifying Party (in which case such Indemnifying Party shall not have the
right to direct that portion of the defense of such Proceeding on behalf of such
Indemnified Party, but such Indemnifying Party may employ counsel and
participate in the defense thereof but the fees and expenses of such counsel
shall be at the expense of such Indemnifying Party), in any of which events such
reasonable fees and expenses shall be borne by such Indemnifying Party and paid
as incurred (it being understood, however, that such Indemnifying Party shall
not be liable for the expenses of more than one separate counsel in any one
Proceeding or series of related Proceedings together with reasonably necessary
local counsel representing the Indemnified Parties who are parties to such
Proceeding). An Indemnifying Party shall not be liable for any settlement of any
such Proceeding effected without its written consent, but if settled with the
written consent of such Indemnifying Party, such Indemnifying Party agrees to
indemnify and hold harmless an Indemnified Party from and against any loss or
liability by reason of such settlement. Notwithstanding the foregoing sentence,
if at any time an Indemnified Party shall have requested an Indemnifying Party
to reimburse such Indemnified Party for fees and expenses of counsel as
contemplated by the second sentence of this paragraph, then such Indemnifying
Party agrees that it shall be liable for any settlement of any Proceeding
effected without its written consent if (i) such settlement is entered into more
than 60 business days after receipt by such Indemnifying Party of the aforesaid
request, (ii) such Indemnifying Party shall not have reimbursed such Indemnified
Party in accordance with such request prior to the date of such settlement and
(iii) such Indemnified Party shall have given such Indemnifying Party at least
30 days' prior notice of its intention to settle. An Indemnifying Party shall
not, without the prior written consent of any Indemnified Party, effect any
settlement of any pending or threatened Proceeding in respect of which such
Indemnified Party is or could have been a party and indemnity could have been
sought hereunder by such Indemnified Party, unless such settlement includes an
unconditional release of such Indemnified Party from all liability on claims
that are the subject matter of such Proceeding and does not include an admission
of fault, culpability or a failure to act, by or on behalf of such Indemnified
Party.
(d) If the indemnification provided for in this Section 9 is
unavailable to an Indemnified Party under subsections (a) and (b) of this
Section 9 in respect of any losses, damages, expenses, liabilities or claims
referred to therein, then each applicable Indemnifying Party, in lieu of
indemnifying such Indemnified Party, shall
20
contribute to the amount paid or payable by such Indemnified Party as a result
of such losses, damages, expenses, liabilities or claims (i) in such proportion
as is appropriate to reflect the relative benefits received by the Company on
the one hand and the Initial Purchaser on the other hand from the offering of
the Notes or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company on the one hand and of the Initial Purchaser on the other
in connection with the statements or omissions which resulted in such losses,
damages, expenses, liabilities or claims, as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and the Initial Purchaser on the other shall be deemed to be in the
same proportion as the total proceeds from the offering (net of Initial
Purchaser's discounts and commissions but before deducting expenses) received by
the Company bear to the discounts and commissions received by the Initial
Purchaser. The relative fault of the Company on the one hand and of the Initial
Purchaser on the other shall be determined by reference to, among other things,
whether the untrue statement or alleged untrue statement of a material fact or
omission or alleged omission relates to information supplied by the Company or
by the Initial Purchaser and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The amount paid or payable by a party as a result of the losses, damages,
expenses, liabilities and claims referred to above shall be deemed to include
any reasonable legal or other fees or expenses reasonably incurred by such party
in connection with investigating or defending any Proceeding.
(e) The Company and the Initial Purchaser agree that it would not
be just and equitable if contribution pursuant to this Section 9 were determined
by pro rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in subsection (d) above.
Notwithstanding the provisions of this Section 9, the Initial Purchaser shall
not be required to contribute any amount in excess of the amount by which the
total price at which the Notes resold by it in the initial placement of such
Notes were offered to investors exceeds the amount of any damages which the
Initial Purchaser has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The remedies provided for in this
Section 9 are not exclusive and shall not limit any rights or remedies which may
otherwise be available to any indemnified party at law or in equity.
(f) The indemnity and contribution agreements contained in this
Section 9 and the covenants, warranties and representations of the Company and
the Initial Purchaser contained in this Agreement shall remain in full force and
effect (regardless, with respect to representations and warranties of the
Company, of any investigation made by on behalf of the Initial Purchaser, its
directors or officers or any person who controls the Initial Purchaser within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act, or by or on behalf of the Company, its directors and officers or any person
who controls the Company within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act), and shall survive
21
any termination of this Agreement or the issuance and delivery of the Notes. The
Company and the Initial Purchaser agree promptly to notify the other of the
commencement of any litigation or proceeding against it and, in the case of the
Company, against any of the Company's officers and directors, in connection with
the issuance and sale of the Notes, or in connection with any Memorandum.
10. INFORMATION FURNISHED BY THE UNDERWRITERS. The statements set
forth in the last paragraph of the cover of the Memorandum and in the sixth and
twelfth paragraphs under the caption "Plan of Distribution" in the Memorandum
constitute the only information furnished by or on behalf of the Underwriters as
such information is referred to in Sections 3 and 9 hereof.
11. EFFECTIVENESS: This Agreement shall become effective upon the
execution and delivery hereof by the parties hereto.
12. NOTICES: Except as otherwise herein provided, all statements,
requests, notices and agreements shall be in writing or by facsimile and, if to
the Initial Purchaser, shall be sufficient in all respects if delivered or sent
to UBS Warburg LLC, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
Syndicate Department, facsimile no. (▇▇▇) ▇▇▇-▇▇▇▇, with a copy to (for
informational purposes only): UBS Warburg LLC, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Legal Affairs - Convertibles, facsimile
no. (▇▇▇) ▇▇▇-▇▇▇▇ and, if to the Company, shall be sufficient in all respects
if delivered or sent to the Company at the offices of the Company at ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: General Counsel,
facsimile no. (▇▇▇) ▇▇▇-▇▇▇▇.
13. GOVERNING LAW AND CONSTRUCTION: THIS AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO CONFLICTS OF LAWS PRINCIPLES. THE SECTION HEADINGS IN THIS AGREEMENT
HAVE BEEN INSERTED AS A MATTER OF CONVENIENCE OF REFERENCE AND ARE NOT A PART OF
THIS AGREEMENT.
14. PARTIES AT INTEREST: The Agreement herein set forth has been and
is made solely for the benefit of the Initial Purchaser and the Company and the
controlling persons, directors and officers referred to in Section 9 hereof and
their respective successors, assigns, executors and administrators. No other
person, partnership, association or corporation (including a purchaser, as such
purchaser, from the Initial Purchaser) shall acquire or have any right under or
by virtue of this Agreement.
15. COUNTERPARTS: This Agreement may be signed by the parties in
counterparts which together shall constitute one and the same agreement among
the parties. Delivery of an executed counterpart by facsimile shall be effective
as delivery of a manually executed counterpart thereof.
16. SUBMISSION TO JURISDICTION: Except as set forth below, no
Proceeding may be commenced, prosecuted or continued in any court other than the
courts of the
▇▇
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ located in the City and County of New York or in the United
States District Court for the Southern District of New York, which courts shall
have jurisdiction over the adjudication of such matters, and the Company hereby
consents to the jurisdiction of such courts and personal service with respect
thereto. The Company hereby consents to personal jurisdiction, service and venue
in any court in which any Proceeding arising out of or in any way relating to
this Agreement is brought by any third party against the Initial Purchaser. The
Initial Purchaser and the Company hereby waives all right to trial by jury in
any Proceeding (whether based upon contract, tort or otherwise) in any way
arising out of or relating to this Agreement. The Company agrees that a final
judgment in any such Proceeding brought in any such court shall be conclusive
and binding upon the Company and may be enforced in any other courts in the
jurisdiction of which the Company is or may be subject, by suit upon such
judgment.
17. SUCCESSORS AND ASSIGNS: This Agreement shall be binding upon the
Initial Purchasers and the Company and their successors and assigns and any
successor or assign of the Company's and/or Initial Purchaser's businesses or
assets.
23
If the foregoing correctly sets forth the understanding between the
Company and the Initial Purchaser, please so indicate in the space provided
below for the purpose, where-upon this letter and your acceptance shall
constitute a binding agreement between the Company and the Initial Purchaser.
Very truly yours,
LIGAND PHARMACEUTICALS INCORPORATED
By: /S/ ▇▇▇▇ ▇. ▇▇▇▇▇
Name:
Title:
Accepted and agreed to as of the date first above written:
UBS WARBURG LLC
By: /S/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Name:
Title:
By: /S/ ▇▇▇▇ ▇▇▇▇▇
Name:
Title:
24
ANNEX A
SUBSIDIARIES
NAME JURISDICTION OF INCORPORATION
---- -----------------------------
Glycomed Incorporated California
Allergan Ligand Retinoid Therapeutics, Inc. Delaware
Ligand Pharmaceuticals International, Inc. Delaware
Ligand JVR, Inc. Delaware
Seragen Incorporated Delaware
Seragen Technology, Inc. Delaware
Ligand Pharmaceuticals (Canada) Incorporated Saskatchewan, Canada
Ligand Pharmaceuticals UK Limited United Kingdom
A-1
EXHIBIT A
OPINION OF COMPANY COUNSEL
1. The Company has been duly incorporated and is validly existing as a
corporation under the laws of the State of Delaware with full corporate
power and authority to own its properties and conduct its business as
described in the Final Memorandum.
2. Each of the Subsidiaries has been duly incorporated and is validly existing
as a corporation in good standing under the laws of its respective
jurisdiction of incorporation with full corporate power and authority to
own its respective properties and to conduct its respective business; all
of the issued shares of capital stock of each Subsidiary have been duly and
validly authorized and issued, are fully paid and non-assessable and are
owned directly or indirectly by the Company, free and clear of any security
interest, mortgage, pledge, lien or other encumbrance.
3. The Company has an authorized capital stock as set forth under the caption
"Capitalization" in the Final Memorandum (except with respect to the
heading "As Adjusted," as to which such counsel need express no opinion);
the outstanding shares of capital stock of the Company (A) have been duly
authorized and validly issued and are fully paid and non-assessable and (B)
were issued in compliance with all preemptive rights, co-sale rights and
rights of first refusal under (1) the DGCL, (2) the certificate of
incorporation, as amended, and the bylaws, as amended, of the Company and
(3) any license, indenture, mortgage, deed of trust, bank loan, credit
agreement or other evidence of indebtedness, or any lease, contract or
other agreement or instrument to which the Company or any Subsidiary is a
party or by which any of them or their properties may be bound or affected
that is filed as a "Material Contract" (as such term is defined in Item 601
of Regulation S-K) as an exhibit to any of the Company's periodic reports
filed on Form 10-K or 10-Q with the Commission and incorporated by
reference into the Final Memorandum or listed on Annex A hereto
(collectively, the "Material Agreements");
4. The execution and delivery by the Company of, and the performance by the
Company of its obligations under, the Purchase Agreement, the Registration
Rights Agreement, the Pledge Agreement, the Control Agreement, the
Indenture and the Notes (collectively, the "Transaction Agreements") and
the consummation by the Company of the transactions contemplated thereby do
not conflict with, or result in any violation or breach of, or constitute a
default under (nor constitute any event which with notice, lapse of time or
both would constitute a violation, breach or default under) (a) any
provisions of the charter or bylaws of the Company or the Subsidiaries or
(b) any provision of any Material Agreement, other than such violations,
breaches or defaults that could not reasonably be expected to have a
material adverse effect on the operations, business or condition (financial
or otherwise) of the Company and its Subsidiaries, taken as a whole, or
A-1
(c) any federal, state, local or foreign law, regulation or rule
(other than applicable state or foreign securities or Blue Sky laws, as to
which such counsel need express no opinion), or any rule or regulation of
any self-regulatory or other non-governmental regulatory authority
(including, without limitation, the Nasdaq Stock Market, Inc. ("Nasdaq")),
or any decree, judgment or order known to such counsel and applicable to
the Company or any Subsidiary or any of their respective properties.
5. To such counsel's knowledge, neither the Company nor any of its
Subsidiaries is in violation or breach of, or default under (nor has any
event occurred which with notice, lapse of time, or both would constitute a
violation or breach of, or default under), (a) any provisions of the
charter or bylaws of the Company or the Subsidiaries, (b) any provision of
any Material Agreement, other than violations, breaches or defaults that
could not reasonably be expected to have a material adverse effect on the
operations, business or condition (financial or otherwise) of the Company
and its Subsidiaries, taken as a whole or (c) any federal, state, local or
foreign law, regulation or rule (other than applicable state or foreign
securities or Blue Sky laws, as to which such counsel need express no
opinion) or any rule or regulation of any self-regulatory or other
non-governmental regulatory authority (including, without limitation,
Nasdaq), or any decree, judgment or order known to such counsel and
applicable to the Company or any Subsidiary or any of their respective
properties.
6. Except as described or incorporated by reference in the Final Memorandum,
to such counsel's knowledge, there are no actions, suits or proceedings
pending or threatened against the Company or any of its Subsidiaries or any
of their respective properties, at law or in equity, or before or by any
federal, state, local or foreign governmental or regulatory commission,
board, body, authority or agency, or before or by any self-regulatory or
other non-governmental regulatory authority (including, without limitation,
the Nasdaq), which are required to be described in the Exchange Act
documents incorporated by reference in the Final Memorandum (the "Exchange
Act Documents").
7. The Purchase Agreement has been duly authorized, executed and delivered by
the Company.
8. The Registration Rights Agreement has been duly authorized, executed and
delivered by the Company and constitutes a legal, valid and binding
agreement of the Company, enforceable against the Company in accordance
with its terms.
9. The Pledge Agreement has been duly authorized, executed and delivered by
the Company and (assuming the due authorization, execution and delivery
thereof by the Trustee) constitutes a legal, valid and binding agreement of
the Company, enforceable against the Company in accordance with its terms.
10. The Control Agreement has been duly authorized, executed and delivered by
the Company and (assuming the due authorization, execution and delivery
thereof by
A-2
the Trustee and the Account Intermediary) constitutes a legal, valid
and binding agreement of the Company, enforceable against the Company in
accordance with its terms.
11. The Indenture has been duly authorized, executed and delivered by the
Company and (assuming the due authorization, execution and delivery thereof
by the Trustee) constitutes a legal, valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms.
12. The Notes have been duly authorized and executed by the Company and when
duly authenticated in accordance with the terms of the Indenture and
delivered to and paid for by the Initial Purchaser in accordance with the
terms of the Purchase Agreement will be validly issued and delivered by the
Company and constitute legal, valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms, and will be
entitled to the benefits of the Indenture, the Registration Rights
Agreement, the Pledge Agreement and the Control Agreement.
13. The Shares initially issuable upon conversion of the Notes have been duly
authorized and reserved for issuance upon conversion of the Notes, and upon
conversion of the Notes in accordance with their terms and the terms of the
Indenture will be issued free of statutory and contractual preemptive
rights of any securityholder of the Company and are initially sufficient in
number to meet the conversion requirements of the Notes, and such Shares,
when so issued in accordance with the terms of the Indenture, will be duly
and validly issued and fully paid and nonassessable.
14. No approval, authorization, consent or order of or filing with any federal,
state or local governmental or regulatory commission, board, body,
authority or agency, or any self-regulatory or other non-governmental
regulatory authority (including, without limitation, Nasdaq), is required
on the part of the Company in connection with the issuance and sale by the
Company of the Notes and the Shares as contemplated in the Purchase
Agreement other than (a) as may be required (i) under the securities or
Blue Sky laws of the various jurisdictions in which the Notes and the
Shares are being offered by the Initial Purchaser and (ii) by Federal and
state securities laws with respect to the Company's obligations under the
Registration Rights Agreement; and (b) as have been made or obtained on or
prior to the date hereof (or, if not required to be made or obtained on or
prior to the date hereof, as will be made or obtained when required).
15. It is not necessary in connection with (i) the offer, sale and delivery of
the Notes to the Initial Purchaser pursuant to the Purchase Agreement or
(ii) the initial resales of the Notes by the Initial Purchaser in the
manner contemplated in the Final Memorandum to register the Notes under the
Securities Act, or to qualify the Indenture in respect thereof under the
Trust Indenture Act of 1939, as amended, it being understood that no
opinion is expressed as to any subsequent resale of any Note or Share.
A-3
16. The Company is not, and after giving effect to the offering and sale of the
Notes and the application of the proceeds thereof as described in the Final
Memorandum will not be, required to register as an "investment company" as
defined in the Investment Company Act of 1940, as amended.
17. The terms of the Transaction Agreements and the capital stock of the
Company, including the Shares, conform as to legal matters in all material
respects to the descriptions thereof contained in the Final Memorandum.
18. The statements in (a) "Risk factors - Risks Related to the Notes - The
notes will be subordinated to our senior indebtedness and will be
structurally subordinated to all liabilities of our subsidiaries.",
"Description of notes," "Description of capital stock," "Plan of
distribution" and "Notice to investors" of the Final Memorandum, (b)
Exhibit 99.2 of the Company's Current Report on Form 8-K dated November 13,
2002 and (c) Item 1 - Business, "Collaborative Research and Development
Programs" of the Company's Annual Report on Form 10-K for the period ended
December 31, 2001, insofar as such statements constitute summaries of legal
matters, documents or proceedings referred to therein, constitute accurate
summaries of such legal matters, documents or proceedings in all material
respects.
19. Subject to the limitations discussed therein, the statements of law or
legal conclusions with respect thereto made in the Final Memorandum under
the caption "Certain US federal income tax consequences" are correct in all
material respects.
20. The Company's "location," within the meaning of Section 9-307 of the
Uniform Commercial Code, as currently in effect in the State of New York
(the "New York UCC"), is in the State of Delaware; upon the filing,
pursuant to Section 4(i) of the Pledge Agreement, of a financing statement
(in the form attached as Annex B to such opinion) in the office of the
Secretary of State of the State of Delaware, the Trustee will have a
perfected security interest in that portion of the Collateral (as defined
in the Pledge Agreement) in which a security interest is perfected by
filing a financing statement under Article 9 of the Uniform Commercial Code
as currently in effect in the State of Delaware; the Pledge Agreement and
the Control Agreement, collectively, create in favor of the Trustee, for
the ratable benefit of the holders of the Notes, as security for the
Company's Obligations (as defined in the Pledge Agreement), a perfected
security interest in the security entitlements carried in the Pledge
Account (as defined in the Pledge Agreement) maintained by the Account
Intermediary pursuant to the Control Agreement that constitute Collateral
to which Article 8 and Article 9 of the New York UCC are applicable, and
such security interest will be prior to any other security interest therein
created under Article 9 of the New York UCC; to the extent that any portion
of the Pledge Account constitutes a deposit account (as defined in Section
9-102(a)(29) of the New York UCC), the Pledge Agreement and Control
Agreement, collectively, create in favor of the Trustee, for the ratable
benefit of
A-4
the holders of the Notes, as security for the Company's Obligations, a
perfected security interest in such deposit account under Article 9 of the
New York UCC.
In addition, such counsel participated in conferences with certain officers
and other representatives of the Company and representatives of the Initial
Purchaser at which the contents of the Final Memorandum and related matters were
discussed. Such counsel did not participate in the preparation of the Exchange
Act Documents; however, such counsel discussed the Exchange Act Documents with
the Company. Based on such participation, although such counsel is not passing
upon, does not assume any responsibility for and has not independently checked
or verified the accuracy, completeness or fairness of the statements contained
in the Final Memorandum or the Exchange Act Documents (i) such counsel is of the
opinion that the Exchange Act Documents complied as to form when filed in all
material respect with the requirements of the Exchange Act and the applicable
rules and regulations of the Commission thereunder (except for the financial
statements, notes and schedules and other financial and statistical data
contained or incorporated by reference therein, as to which such counsel need
express no belief) and (ii) no facts have come to such counsel's attention which
lead such counsel to believe that the Final Memorandum, including the Exchange
Act Documents, as of its date or as of the date of such opinion letter (except
for the financial statements, notes and schedules and other financial and
statistical data contained or incorporated by reference therein, as to which
such counsel does not express any belief), contained an untrue statement of a
material fact or omitted to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
A-5
SCHEDULE A
1. Third Amendment to the Preferred Shares Rights Agreement dated March 3,
1999
2. First Amendment to Sponsored Research and License Agreement between the
Company and Baylor College of Medicine dated September 1, 1992
3. Revival, Modification and Extension of Sponsored Research and License
Agreement of March 9, 1992, as amended on September 1, 1992 dated April 2,
1997
4. Third Amendment to Sponsored Research and License Agreement between the
Company and Baylor College of Medicine dated October 1, 1999
5. Lease, dated March 7, 1997, between the Company and Nexus Equity VI LLC
6. Securities Purchase Agreement among Ligand Pharmaceuticals Incorporated,
Elan International Services, Ltd. and Elan Corporation plc dated November
12, 2002
7. Amendment No. 1 to Amended and Restated Registration Rights Agreement among
Ligand Pharmaceuticals Incorporated, Elan International Services, Ltd. and
Elan Corporation plc dated November 12, 2002
8. Amended and Restated License and Supply Agreement among Elan Corporation
plc, Elan Management, Ltd. and Ligand Pharmaceuticals Incorporated dated
November 12, 2002
9. Closing Agreement among Ligand Pharmaceuticals Incorporated, Elan
Corporation plc and Elan Management Limited dated November 12, 2002
A-6
EXHIBIT B
OPINION OF COMPANY PATENT AND LITIGATION COUNSEL
1. To such counsel's knowledge, except as described or incorporated by
reference in the Final Memorandum, (A) the Company (either directly or
through its Subsidiaries) has valid license rights or clear title to the
Intellectual Property described as owned by or licensed to the Company and
referenced or incorporated by reference in the Final Memorandum, and except
where in-licensed there are no rights of third parties to any such
Intellectual Property; (B) there is no infringement or other violation by
third parties of any of the Intellectual Property of the Company referenced
or incorporated by reference in the Final Memorandum that would have a
material adverse affect on the Company; (C) there is no infringement or
other violation by the Company or its Subsidiaries of any Intellectual
Property of others nor would there be any such infringement upon
commercialization of the Company's products described as under development
or incorporated by reference in the Final Memorandum; (D) there is no
pending or threatened action, suit, proceeding or claim that the Company or
one if its Subsidiaries infringes or otherwise violates any Intellectual
Property of others, and such counsel is unaware of any facts which would
form a reasonable basis for any such claim; (E) there is no pending or
threatened action, suit, proceeding or claim challenging the rights of the
Company or its Subsidiaries in or to, or challenging the scope of, any
Intellectual Property of the Company referenced or incorporated by
reference in the Final Memorandum, and such counsel is unaware of any facts
which would form a reasonable basis for any such claim; and (F) there is no
prior art or other facts that may render any patent held by the Company
invalid or unenforceable;
2. To such counsel's knowledge, the patent applications of the Company and its
Subsidiaries presently on file disclose patentable subject matter, and such
counsel is not aware of any inventorship challenges, any interference which
has been declared or provoked, or any other material fact with respect to
the patent applications of the Company presently on file that (A) would
preclude the issuance of patents with respect to such applications, or (B)
would lead such counsel to conclude that such patents, when issued, would
not be valid and enforceable in accordance with applicable regulations;
3. To such counsel's knowledge, the statements contained or incorporated by
reference in the Final Memorandum referencing Intellectual Property
matters, insofar as such statements constitute summaries of legal matters,
contracts, agreements, documents or proceedings referred to or incorporated
by reference therein, or refer to or incorporate by reference statements of
law or legal conclusions, are in all material respects accurate and
complete statements or summaries of the matters set forth or incorporated
by reference therein;
4. The statements in the Company's annual report for the year ended December
31, 2001 filed on Form 10-K under the caption "Legal Proceedings", insofar
as such
B-1
statements constitute summaries of legal matters, documents or
proceedings referred to therein, fairly summarize in all material respects
the matters referred to therein.
5. Nothing has come to such counsel's attention that causes such counsel to
believe that such above described portions of the Final Memorandum, at the
date of the Final Memorandum and at all times leading up to and including
the time of purchase and the additional time of purchase, as the case may
be, contained an untrue statement of material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading.
B-2
EXHIBIT C
OPINION OF WARNER ▇. ▇▇▇▇▇▇▇▇,
GENERAL COUNSEL OF THE COMPANY
The Company and each of its Subsidiaries are duly qualified or licensed to
do business as foreign corporations and are in good standing in each
jurisdiction in which the conduct of their respective businesses or their
ownership or leasing of property requires such qualification or license, except
to the extent that the failure, individually or in the aggregate, to be so
qualified or licensed or be in good standing would not have a Material Adverse
Effect.