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EXHIBIT 1.1
2,750,000 Shares of Common Stock
LIGAND PHARMACEUTICALS INCORPORATED
UNDERWRITING AGREEMENT
[______], 1996
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & COMPANY LLC
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC
as Representatives of the
several Underwriters named in
Schedule I attached hereto
c/o Bear, ▇▇▇▇▇▇▇ & Co. Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Ligand Pharmaceuticals Incorporated, a corporation organized
and existing under the laws of Delaware (the "Company"), proposes, subject to
the terms and conditions stated herein, to issue and sell to the several
underwriters named in Schedule I hereto (the "Underwriters") an aggregate of
2,750,000 shares (the "Firm Shares") of its common stock, par value $.001 per
share (the "Common Stock"), and, for the sole purpose of covering
over-allotments in connection with the sale of the Firm Shares, at the option of
the Underwriters, up to an additional 412,500 shares (the "Additional Shares")
of
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Common Stock. The Firm Shares and any Additional Shares purchased by the
Underwriters are referred to herein collectively as the "Shares". The Shares are
more fully described in the registration statement referred to below.
1. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, the Underwriters that:
(a) The Company has filed with the Secu-
rities and Exchange Commission (the "Commission") a registration statement, and
may have filed an amendment or amendments thereto, on Form S-3 (No. 333-12603),
for the registration of the Shares under the Securities Act of 1933, as amended
(the "Act"). Such registration statement, including the prospectus, financial
statements and schedules, exhibits and all other documents filed as a part
thereof, as amended at the time of effectiveness of the registration statement,
including any information deemed to be a part thereof as of the time of
effectiveness pursuant to paragraph (b) of Rule 430A or Rule 434 of the Rules
and Regulations of the Commission under the Act (the "Regulations"), is herein
called the "Registration Statement". Any registration statement filed pursuant
to Rule 462(b) of the Regulations is herein called the "462(b) Registration
Statement," and after such filing the term "Registration Statement" shall
include the Rule 462(b) Registration Statement. The prospectus, in the form
first filed with the Commission pursuant to Rule 424(b) of the Regulations or
filed as part of the Registration Statement at the time of effectiveness if no
Rule 424(b) or Rule 434 filing is required, is herein called the "Prospectus".
The term "preliminary prospectus" as used herein means a preliminary prospectus
as described in Rule 430 of the Regulations. Any reference herein to the
Registration Statement, any preliminary prospectus or the Prospectus shall
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be deemed to refer to and include the documents incorporated by reference
therein pursuant to Item 12 of Form S-3 which were filed under the Securities
Exchange Act of 1934, as amended (the "Exchange Act") on or before the effective
date of the Registration Statement, the date of such preliminary prospectus or
the date of the Prospectus, as the case may be, and any reference herein to the
terms "amend", "amendment" or "supplement" with respect to the Registration
Statement, any preliminary prospectus or the Prospectus shall be deemed to refer
to and include (i) the filing of any document under the Exchange Act after the
effective date of the Registration Statement, the date of such preliminary
prospectus or the date of the Prospectus, as the case may be, which is
incorporated therein by reference and (ii) any such document so filed.
(b) At the respective time of the effec-
tiveness of the Registration Statement or any 462(b) Registration Statement and
the effectiveness of any post-effective amendment to the Registration Statement,
when the Prospectus is first filed with the Commission pursuant to Rule 424(b)
or Rule 434 of the Regulations, when any supplement to or amendment of the
Prospectus is filed with the Commission, when any document filed under the
Exchange Act is filed and at the Closing Date and the Additional Closing Date,
if any (as hereinafter respectively defined), the Registration Statement, any
462(b) Registration Statement and the Prospectus and any amendments thereof and
supplements thereto complied or will comply in all material respects with the
applicable provisions of the Act and the Regulations and the Exchange Act and
the respective rules and regulations thereunder and does not or will not contain
an untrue statement of a material fact and does not or will not omit to state
any material fact required to be stated therein or necessary in order to make
the statements therein (i), in the case of the Registration Statement,
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not misleading and (ii), in the case of the Prospectus, in light of the
circumstances under which they were made, not misleading. When any related
preliminary prospectus was first filed with the Commission (whether filed as
part of the Registration Statement or any amendment thereto or pursuant to Rule
424(a) of the Regulations) and when any amendment thereof or supplement thereto
was first filed with the Commission, such preliminary prospectus and any
amendments thereof and supplements thereto complied in all material respects
with the applicable provisions of the Act and the Regulations and the Exchange
Act and the respective rules and regulations thereunder and did not contain an
untrue statement of a material fact and did not omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein in light of the circumstances under which they were made not misleading.
No representation and warranty is made in this subsection (b), however, with
respect to any information contained in or omitted from the Registration
Statement or the Prospectus or any related preliminary prospectus or any
amendment thereof or supplement thereto in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of any
Underwriter through you as herein stated expressly for use in connection with
the preparation thereof. If Rule 434 is used, the Company will comply with the
requirements of Rule 434.
(c) Ernst & Young LLP, who have certi-
fied the financial statements and supporting schedules included in the
Registration Statement, are independent public accountants as required by the
Act and the Regulations.
(d) Subsequent to the respective dates
as of which information is given in the Registration Statement and the
Prospectus, except as set forth in the
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Registration Statement and the Prospectus, there has been no material adverse
change or any development which could reasonably be expected to involve a
prospective material adverse change in the business, prospects, properties,
operations, condition (financial or other) or results of operations of the
Company and its subsidiaries taken as a whole, whether or not arising from
transactions in the ordinary course of business, and since the date of the
latest balance sheet presented in the Registration Statement and the Prospectus,
neither the Company nor any of its subsidiaries has incurred or undertaken any
liabilities or obligations, direct or contingent, which are material to the
Company and its subsidiaries taken as a whole, except for liabilities or
obligations which are reflected in the Registration Statement and the
Prospectus.
(e) This Agreement and the transactions
contemplated hereby have been duly and validly authorized by the Company, and
this Agreement has been duly and validly executed and delivered by the Company.
(f) The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby do not
and will not (i) conflict with or result in a breach of any of the terms and
provisions of, or constitute a default (or an event which with notice or lapse
of time, or both, would constitute a default) under, or result in the creation
or imposition of any lien, charge or encumbrance upon any property or assets of
the Company or any of its subsidiaries pursuant to, any material agreement,
instrument, franchise, license or permit to which the Company or any of its
subsidiaries is a party or by which any of such corporations or their respective
properties or assets may be bound or (ii) violate or conflict with any provision
of the certificate of incorporation or by-laws of the Company or any of its
subsidiaries or any judgment,
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decree, order, statute, rule or regulation of any court or any public,
governmental or regulatory agency or body having jurisdiction over the Company
or any of its subsidiaries or any of their respective properties or assets,
except for such rules and regulations the violation of which will not in the
aggregate have a material adverse effect on the Company and its subsidiaries
taken as a whole. No consent, approval, authorization, order, registration,
filing, qualification, license or permit of or with any court or any public,
governmental or regulatory agency or body having jurisdiction over the Company
or any of its subsidiaries or any of their respective properties or assets is
required for the execution, delivery and performance of this Agreement or the
consummation of the transactions contemplated hereby, including the issuance,
sale and delivery of the Shares, except the registration under the Act of the
Shares and such consents, approvals, authorizations, orders, registrations,
filings, qualifications, licenses and permits as may be required under state
securities or Blue Sky laws in connection with the purchase and distribution of
the Shares by the Underwriters.
(g) All of the outstanding shares of Common Stock are
duly and validly authorized and issued, fully paid and nonassessable, and none
of such shares was issued in violation of or is now subject to any pre-emptive
or similar rights. The Shares, when issued, delivered and sold in accordance
with this Agreement, will be duly and validly issued and outstanding, fully paid
and nonassessable, and will not have been issued in violation of or be subject
to any preemptive or similar rights. The Company had, at June 30, 1996,
authorized and outstanding capital stock as set forth in the Registration
Statement and the Prospectus. The Common Stock, the Firm Shares and the
Additional Shares conform to the descriptions thereof contained in the
Registration Statement and the Prospectus. Except as disclosed
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in or specifically contemplated by the Registration Statement and the
Prospectus, there are no outstanding options, warrants or other rights calling
for the issuance of, and no commitments, obligations, plans or arrangements to
issue, any shares of capital stock of the Company or any security convertible
into or exchangeable for capital stock of the Company. The outstanding stock
options relating to the Common Stock have been duly authorized and validly
issued and conform to the descriptions thereof contained in the Registration
Statement and the Prospectus.
(h) The Company and each of its subsidiaries has been
duly organized and is validly existing as a corporation in good standing under
the laws of its jurisdiction of incorporation. The Company and each of its
subsidiaries is duly qualified and in good standing as a foreign corporation in
each jurisdiction in which the character or location of its respective
properties (owned, leased or licensed) or the nature or conduct of its
respective business makes such qualification necessary, except for those
failures to be so qualified or in good standing which will not in the aggregate
have a material adverse effect on the Company and its subsidiaries taken as a
whole. The Company and each of its subsidiaries has all requisite power and
authority, and all necessary consents, approvals, authorizations, orders,
registrations, qualifications, licenses and permits of and from all public,
regulatory or governmental agencies and bodies, to own, lease and operate its
respective properties and conduct its respective business as now being conducted
and as described in the Registration Statement and the Prospectus, and no such
consent, approval, authorization, order, registration, qualification, license or
permit contains a materially burdensome restriction not adequately disclosed in
the Registration Statement and the Prospectus.
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(i) Except as described in the Prospectus, there is
no litigation or governmental proceeding to which the Company or any of its
subsidiaries is a party or to which any property of the Company or any of its
subsidiaries is subject or which is pending or, to the knowledge of the Company,
contemplated against the Company or any of its subsidiaries which might result
in any material adverse change or any development which could reasonably be
expected to involve a material adverse change in the business, prospects,
properties, operations, condition (financial or other) or results of operations
of the Company and its subsidiaries taken as a whole or which is required to be
disclosed in the Registration Statement and the Prospectus.
(j) The Company has not taken and will not take,
directly or indirectly, any action designed to cause or result in, or which
constitutes or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of the shares of Common Stock to
facilitate the sale or resale of the Shares as contemplated by this Agreement;
provided, however, that neither the conversion of any portion of the promissory
notes of the Company issued to American Home Products Corporation or the
election by the Company to receive milestone payments in the form of shares of
Common Stock from Pfizer Inc will be deemed to be an action designed to cause or
result in the stabilization or manipulation of the price of the Common Stock.
(k) The financial statements, including
the notes thereto, and supporting schedules included in the Registration
Statement and the Prospectus present fairly the consolidated financial position
of the Company and its consolidated subsidiaries as of the dates indicated and
the results of their operations for the periods specified; except as otherwise
stated in the Registration Statement, said financial statements have
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been prepared in conformity with generally accepted accounting principles
applied on a consistent basis; the supporting schedules included in the
Registration Statement present fairly the information required to be stated
therein; and the selected financial data and the summary financial information
included in the Registration Statement and the Prospectus present fairly the
information shown therein and have been compiled on a basis consistent with that
of the financial statements included in the Registration Statement and the
Prospectus.
(l) The Company and its subsidiaries have filed all
federal, state, local and foreign tax returns that have been required to be
filed and have paid all taxes shown thereon and all assessments received by them
or any of them to the extent that such taxes have become due and are not being
contested in good faith. Except as disclosed in the Registration Statement and
the Prospectus, there is no material tax deficiency that has been or might
reasonably be expected to be asserted or threatened against the Company or any
of its subsidiaries.
(m) The Company and each of its subsidiaries has
good and marketable title in fee simple to all items of real property and good
and marketable title to all personal property owned by it, in each case free and
clear of all liens, encumbrances and defects except such as are described or
referred to in the Prospectus or such as do not materially affect the value of
such property and do not interfere with the use made or proposed to be
made of such property by the Company or its subsidiary, as the case may be. Any
real property and buildings held under lease by the Company or any of its
subsidiaries are held under valid, existing and enforceable leases with such
exceptions as are not material and do not interfere with the use made or
proposed to be
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made of such property and buildings by the Company or its subsidiary, as the
case may be.
(n) Except as disclosed in the Registration
Statement and the Prospectus, the Company and each of its subsidiaries owns or
possesses adequate patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable proprietary
or confidential information, systems or procedures), trademarks, service marks,
trade names and other intellectual property (collectively, "Intellectual
Property") necessary to carry on the business it now operates, and neither the
Company nor any of its subsidiaries has received any notice or is otherwise
aware of (i) any claim, action or demand of any person in the United States or
elsewhere or any proceeding in the United States or elsewhere, pending or
threatened, that (A) challenges the ownership interests of the Company or any of
its subsidiaries in any of the Intellectual Property or (B) alleges that any
product or service of the Company or any of its subsidiaries infringes or
misappropriates the Intellectual Property rights of others, which claim, action,
demand or proceeding (including without limitation infringement,
misappropriation and unfair competition), if the subject of any unfavorable
decision, ruling or finding, or invalidity or inadequacy could reasonably be
expected to have, in the aggregate with all other such claims, actions, demands
and proceedings, a material adverse effect on the Company and its subsidiaries
taken as a whole or (ii) any facts or circumstances that would render any
Intellectual Property invalid or inadequate to protect the interest of the
Company or any of its subsidiaries therein.
(o) No relationship, direct or indirect, exists
between or among the Company or any of its subsidiaries, on the one hand, and
the directors, officers,
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stockholders, customers or suppliers of the Company or any of its subsidiaries,
on the other hand, that is required by the Act to be described in the
Registration Statement and the Prospectus which is not so described.
(p) The Common Stock currently outstanding is
listed, and application has been made to list the Shares, on the Nasdaq National
Market.
(q) Except as described in the Prospectus, no
holder of securities of the Company has any rights to the registration of
securities of the Company because of the filing of the Registration Statement or
otherwise in connection with the sale of the Shares contemplated hereby.
(r) The Company is not, and upon consummation of
the transactions contemplated hereby will not be, subject to registration as an
"investment company" under the Investment Company Act of 1940.
(s) There are no existing or, to the knowledge of the
Company, threatened labor disputes with any employees of the Company or any of
its subsidiaries that are likely in the aggregate to have a material adverse
effect on the Company and its subsidiaries taken as a whole.
(t) The Company and each of its subsidiaries (i) is
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"), except where such noncompliance with an
Environmental Law will not in the aggregate have a material adverse effect on
the Company and its subsidiaries taken as a whole or otherwise would not require
disclosure in
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the Registration Statement and the Prospectus, (ii) has received all permits,
licenses or other approvals required of it under applicable Environmental Laws
to conduct its respective business and (iii) is in compliance with all terms and
conditions of any such permit, license or approval, except where such
noncompliance, failure to receive required permits, licenses or other approvals
or failure to comply with the terms and conditions of such permits, licenses or
approvals will not in the aggregate have a material adverse effect on the
Company and its subsidiaries taken as a whole or otherwise would not require
disclosure in the Registration Statement and the Prospectus.
(u) Except for plans maintained, administered or
contributed to by Glycomed Incorporated, each employee benefit plan, within the
meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), that is maintained, administered or contributed to by the
Company or any of its subsidiaries for employees or former employees of the
Company or any of its subsidiaries has been maintained in compliance with its
respective terms and the requirements of any applicable statutes, orders, rules
and regulations, including but not limited to ERISA and the Internal Revenue
Code of 1986, as amended, (the "Code"). To the knowledge of the Company, each
such plan maintained, administered or contributed to by Glycomed Incorporated
has been maintained in compliance with its respective terms and the requirements
of any applicable statutes, orders, rules and regulations, including but not
limited to ERISA and the Code. No prohibited transaction, within the meaning of
Section 406 of ERISA or Section 4975 of the Code, has occurred with respect to
any such plan, excluding transactions effected pursuant to a statutory or
administrative exemption. For each such plan which is subject to the funding
rules of Section 412 of the Code or Section 302 of ERISA, no "accu-
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mulated funding deficiency", as defined in Section 412 of the Code, has been
incurred, whether or not waived, and the fair market value of the assets of each
such plan (excluding for these purposes accrued but unpaid contributions)
exceeded the present value of all benefits accrued under such plan determined
using reasonable actuarial assumptions.
(v) The Company and each of its subsidiaries
maintains insurance of the types and in the amounts generally deemed adequate
for its business, including, without limitation, insurance covering real and
personal property owned or leased by it against theft, damage, destruction, acts
of vandalism and all other material risks customarily insured against, all of
which insurance is in full force and effect. Neither the Company nor any of its
subsidiaries has any reason to believe that it will not be able to renew
existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
respective business.
(w) The conditions for use of Form S-3, as set forth
in the General Instructions thereto, have been satisfied.
(x) The documents incorporated or deemed to be
incorporated by reference in the Prospectus, at the time they were or hereafter
are filed with the Commission, complied and will comply in all material respects
with the requirements of the Exchange Act and the rules and regulations of the
Commission under the Exchange Act, and, when read together with the other
information in the Prospectus, at the time the Registration Statement and any
amendments thereto become effective and at the Closing Date and the Additional
Closing Date, if any, will not contain an untrue statement of a material fact or
omit to state a material fact required
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to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
2. Purchase, Sale and Delivery of the Shares.
(a) On the basis of the representations,
warranties, covenants and agreements herein contained, but subject to the terms
and conditions herein set forth, the Company agrees to sell to the Underwriters,
and the Underwriters, severally and not jointly, agree to purchase from the
Company, at a purchase price per share of $_______, the number of Firm Shares
set forth opposite the respective names of the Underwriters in Schedule I hereto
plus any additional number of Shares which such Underwriter may become obligated
to purchase pursuant to the provisions of Section 9 hereof.
(b) Payment of the purchase price for the Shares
shall be made at the offices of ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, or at such other place as shall be agreed
upon by you and the Company, at 7:00 A.M., San Diego time, on the third or
fourth Business Day (as permitted under Rule 15c6-1 under the Exchange Act)
(unless postponed in accordance with the provisions of Section 9 hereof)
following the date of the effectiveness of the Registration Statement (or, if
the Company has elected to rely upon Rule 430A of the Regulations, the third or
fourth Business Day (as permitted under Rule 15c6-1 under the Exchange Act)
after the determination of the public offering price of the Shares), or such
other time not later than ten Business Days after such date as shall be agreed
upon by you and the Company (such time and date of payment and delivery being
herein called the "Closing Date"). As used herein, the term "Business Day" means
any day other than a day on which banks are permitted or required to be closed
in New York City.
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Payment shall be made to the Company by wire transfer in same day funds against
delivery to you at the offices of Bear, ▇▇▇▇▇▇▇ & Co. Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ for the respective accounts of the Underwriters of
certificates for the Shares to be purchased by them. Certificates for the Shares
shall be registered in such name or names and in such authorized denominations
as you may request in writing at least two full Business Days prior to the
Closing Date. The Company shall permit you to examine and package such
certificates for delivery at least one full Business Day prior to the Closing
Date.
(c) In addition, the Company hereby grants to the
Underwriters the option to purchase up to 412,500 Additional Shares at the same
purchase price per share to be paid by the Underwriters to the Company for the
Firm Shares as set forth in this Section 2, for the sole purpose of covering
over-allotments in the sale of Firm Shares by the Underwriters. This option may
be exercised at any time, or from time to time, in whole or in part, on or
before the thirtieth day following the date of the Prospectus, by written notice
by you to the Company. Such notice shall set forth the aggregate number of
Additional Shares as to which the option is being exercised and the date and
time, as reasonably determined by you, when the Additional Shares are to be
delivered (such date and time being herein sometimes referred to as the
"Additional Closing Date"); provided, however, that the Additional Closing Date
shall not be earlier than the Closing Date or earlier than the second full
Business Day after the date on which the option shall have been exercised nor
later than the eighth full Business Day after the date on which the option shall
have been exercised (unless such time and date are postponed in accordance with
the provisions of Section 9 hereof). Certificates for the Additional Shares
shall be registered in such name or names and in such autho-
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rized denominations as you may request in writing at least two full Business
Days prior to the Additional Closing Date. The Company shall permit you to
examine and package such certificates for delivery at least one full Business
Day prior to the Additional Closing Date.
The number of Additional Shares to be sold to each Underwriter
shall be the number which bears the same ratio to the aggregate number of
Additional Shares being purchased as the number of Firm Shares set forth
opposite the name of such Underwriter in Schedule I hereto (or such number
increased as set forth in Section 9 hereof) bears to 2,750,000, subject,
however, to such adjustments to eliminate any fractional shares as you in your
sole discretion shall make.
Payment for the Additional Shares shall be made by wire
transfer in same day funds at the offices of ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, or at such other place as
shall be agreed upon by you and the Company, against delivery to you at the
offices of Bear, ▇▇▇▇▇▇▇ & Co. Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
for the respective accounts of the Underwriters of certificates for the
Additional Shares to be purchased by them.
3. Offering. Upon your authorization of the release of the
Firm Shares, the Underwriters propose to offer the Shares for sale to the public
upon the terms set forth in the Prospectus.
4. Covenants of the Company. The Company covenants and agrees
with the Underwriters that:
(a) If the Registration Statement has not yet been
declared effective, the Company will use its best efforts to cause the
Registration Statement and any amendments thereto to become effective as
promptly
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as possible, and if Rule 430A is used or the filing of the Prospectus
is otherwise required under Rule 424(b) or Rule 434, the Company will file the
Prospectus (properly completed if Rule 430A has been used) pursuant to Rule
424(b) or Rule 434 within the prescribed time period and will provide evidence
satisfactory to you of such timely filing. If the Company elects to rely on Rule
434, the Company will prepare and file a term sheet that complies with the
requirements of Rule 434.
The Company will notify you immediately (and, if
requested by you, will confirm such notice in writing) (i) when the Registration
Statement and any amendments thereto become effective, (ii) of any request by
the Commission for any amendment of or supplement to the Registration Statement
or the Prospectus or for any additional information, (iii) of the mailing or the
delivery to the Commission for filing of any amendment of or supplement to the
Registration Statement or the Prospectus, (iv) of the issuance by the Commission
of any stop order suspending the effectiveness of the Registration Statement or
any post-effective amendment thereto or of the initiation, or the threatening,
of any proceedings therefor, (v) of the receipt of any comments from the
Commission, and (vi) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Shares for sale in any
jurisdiction or the initiation or threatening of any proceeding for that
purpose. If the Commission shall propose or enter a stop order at any time, the
Company will make every reasonable effort to prevent the issuance of any such
stop order and, if issued, to obtain the lifting of such order as soon as
possible. The Company will not file any amendment to the Registration Statement,
any filing under Rule 462(b) of the Regulations, or any amendment of or
supplement to the Prospectus (including the prospectus required to be filed
pursuant to Rule 424(b) or Rule 434 of the Regulations)
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that differs from the prospectus on file at the time of the effectiveness of the
Registration Statement before or after the effective date of the Registration
Statement or file any document under the Exchange Act if such document would be
deemed to be incorporated by reference into the Prospectus to which you shall
reasonably object in writing after being timely furnished in advance a copy
thereof.
(b) If at any time when a prospectus relating to the
Shares is required to be delivered under the Act any event shall have occurred
as a result of which the Prospectus as then amended or supplemented would, in
the judgment of the Underwriters or the Company, include an untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or if it shall be necessary at any
time to amend or supplement the Prospectus or Registration Statement to comply
with the Act or the Regulations, or to file under the Exchange Act so as to
comply therewith any document incorporated by reference in the Registration
Statement or the Prospectus or in any amendment thereof or supplement thereto,
the Company will notify you promptly and prepare and file with the Commission an
appropriate amendment or supplement (in form and substance satisfactory to you)
which will correct such statement or omission or which will effect such
compliance and will use its best efforts to have any amendment to the
Registration Statement declared effective as soon as possible.
(c) The Company will promptly deliver to you four
conformed copies of the Registration Statement, including exhibits and all
documents incorporated by reference therein and all amendments thereto, and the
Company will promptly deliver to each of the Underwrit-
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ers such number of copies of any preliminary prospectus, the Prospectus, the
Registration Statement, all amendments of and supplements to such documents, if
any, and all documents incorporated by reference in the Registration Statement
and Prospectus or any amendment thereof or supplement thereto, without exhibits,
as you may reasonably request.
(d) The Company will endeavor in good faith, in
cooperation with you, at or prior to the time of effectiveness of the
Registration Statement, to qualify the Shares for offering and sale under the
securities laws relating to the offering or sale of the Shares of such
jurisdictions as you may designate and to maintain such qualification in effect
for so long as required for the distribution thereof; except that in no event
shall the Company be obligated in connection therewith to qualify as a foreign
corporation or to execute a general consent to service of process.
(e) The Company will make generally
available (within the meaning of Section 11(a) of the Act) to its security
holders and to you as soon as practicable, but not later than 45 days after the
end of its fiscal quarter in which the first anniversary date of the effective
date of the Registration Statement occurs, an earning statement (in form
complying with the provisions of Rule 158 of the Regulations) covering a period
of at least twelve consecutive months beginning after the effective date of the
Registration Statement.
(f) During the period of 90 days from the date of the
Prospectus, the Company will not, without your prior written consent, issue,
sell, offer or agree to sell, grant any option for the sale of, or otherwise
dispose of, directly or indirectly, any Common Stock (or any securities
convertible into, exercisable for or exchangeable for Common Stock), except with
re-
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spect to options or other rights outstanding on the date of the Prospectus or
pursuant to the Company's stock plans or in connection with transactions
involving the Company and other entities or individuals such as joint ventures,
acquisitions, mergers or similar transactions, and the Company will obtain the
undertaking of each of its officers and directors and such of its stockholders
as have been heretofore designated by you and listed in Schedule II attached
hereto not to engage in any of the aforementioned transactions on their own
behalf, other than the Company's sale of Shares hereunder and the Company's
issuance of Common Stock upon the exercise of presently outstanding stock
options.
(g) The Company will apply the proceeds from the sale
of the Shares as set forth under "Use of Proceeds" in the Prospectus.
(h) The Company will use its best efforts to cause
the Shares to be listed on the Nasdaq National Market.
(i) The Company, during the period when the
Prospectus is required to be delivered under the Act or the Exchange Act, will
file all documents required to be filed with the Commission pursuant to Section
13, 14 or 15 of the Exchange Act within the time periods required by the
Exchange Act and the rules and regulations thereunder.
5. Payment of Expenses. Whether or not the transactions
contemplated by this Agreement are consummated or this Agreement is terminated,
the Company hereby agrees to pay all costs and expenses incident to the
performance of the obligations of the Company hereunder, including those in
connection with (i) preparing, printing, duplicating, filing and distributing
the Registration Statement, as originally filed and all amendments
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thereof (including all exhibits thereto), any preliminary prospectus, the
Prospectus and any amendments or supplements thereto (including, without
limitation, fees and expenses of the Company's accountants and counsel), the
underwriting documents (including this Agreement, the Master Agreement among
Underwriters and the Master Selling Agreement) and all other documents related
to the public offering of the Shares (including those supplied to the
Underwriters in quantities as hereinabove stated), (ii) the issuance, transfer
and delivery of the Shares to the Underwriters, including any transfer or other
taxes payable thereon, (iii) the qualification of the Shares under state or
foreign securities or Blue Sky laws, including the costs of printing and mailing
a preliminary and final "Blue Sky Survey" and the fees of counsel for the
Underwriters and such counsel's disbursements in relation thereto, (iv) listing
of the Shares on the Nasdaq National Market, (v) filing fees of the Commission
and the National Association of Securities Dealers, Inc., (vi) the cost of
printing certificates representing the Shares and (vii) the cost and charges of
any transfer agent or registrar.
6. Conditions of Underwriters' Obligations. The obligations of
the Underwriters to purchase and pay for the Firm Shares and the Additional
Shares, as provided herein, shall be subject to the accuracy of the
representations and warranties of the Company herein contained, as of the date
hereof and as of the Closing Date (for purposes of this Section 6, "Closing
Date" shall refer to the Closing Date for the Firm Shares and any Additional
Closing Date, if different, for the Additional Shares), to the absence from any
certificates, opinions, written statements or letters furnished to you or to
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ ("Underwriters' Counsel") pursuant to this
Section 6 of any misstatement or omission, to the performance by the Company of
its obligations hereunder, and to the following additional conditions:
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(a) The Registration Statement, including any Rule 462(b)
Registration Statement, shall have become effective and all necessary approvals
of the Nasdaq National Market shall have been received not later than 5:30 P.M.,
New York City time, on the date of this Agreement, or at such later time and
date as shall have been consented to in writing by you; if the Company shall
have elected to rely upon Rule 430A or Rule 434 of the Regulations, the
Prospectus shall have been filed with the Commission in a timely fashion in
accordance with Section 4(a) hereof; and at or prior to the Closing Date, no
stop order suspending the effectiveness of the Registration Statement or any
post-effective amendment thereof shall have been issued and no proceedings
therefor shall have been initiated or threatened by the Commission.
(b) At the Closing Date you shall have received the opinion of
▇▇▇▇▇▇▇, Phleger & ▇▇▇▇▇▇▇▇ LLP, counsel for the Company, dated the Closing
Date, addressed to the Underwriters and in form and substance satisfactory to
Underwriters' Counsel, to the effect that:
(i) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the State
of Delaware, with full corporate power and authority to own or lease its
properties and conduct its business as described in the Registration Statement
and Prospectus. The Company is qualified to do business as a foreign corporation
in California and, to such counsel's knowledge, in each other state or
jurisdiction of the United States where its failure to do so would have a
material adverse effect on its business or properties.
(ii) Glycomed Incorporated ("Glycomed") has been duly
incorporated and is validly existing as a corporation in good standing under the
laws of the State of California, with the corporate
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power and authority to own or lease its properties and conduct its business.
Glycomed is qualified to do business as a foreign corporation, to such counsel's
knowledge, in each state or jurisdiction of the United States where its failure
to do so would have a material adverse effect on its business or properties. The
outstanding shares of capital stock of Glycomed have been duly and validly
authorized and issued are nonassessable and, to such counsel's knowledge, fully
paid. All of such shares are owned of record by the Company free and clear of
any pledge, lien, security interest, charge, claim, equity or encumbrance, are
not subject to any preemptive rights and there are not any outstanding rights,
warrants or options to acquire any capital stock of Glycomed.
(iii) The authorized capital stock of the Company
conforms as to legal matters in all material respects to the description thereof
contained in the Registration Statement and Prospectus.
(iv) The outstanding shares of capital stock of the
Company have been duly and validly authorized and issued, are nonassessable and,
to such counsel's knowledge, are fully paid and are not subject to any
preemptive rights.
(v) The Shares have been duly and validly authorized,
will be validly issued, fully paid and nonassessable when issued and paid for as
contemplated by this Agreement, and are not subject to any preemptive rights.
(vi) The Shares have been duly authorized for
quotation on the Nasdaq National Market upon official notice of issuance.
(vii) This Agreement has been duly authorized,
executed and delivered by the Company.
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(viii) To such counsel's knowledge, there are no
legal or governmental proceedings pending or threatened to which the Company or
any of its subsidiaries is or may become a party or to which any of the
properties of the Company or any of the properties of its subsidiaries is or may
become subject that is required to be described in the Registration Statement or
the Prospectus and is not so described, nor any statute, regulation, contract or
other document that is required to be described in the Registration Statement or
the Prospectus or to be filed as an exhibit to the Registration Statement that
is not described or filed as required.
(ix) The execution and delivery by the Company of,
and the performance by the Company of its obligations under, this
Agreement will not contravene any provision of applicable law or the
certificate of incorporation or bylaws of the Company or Glycomed, or, to such
counsel's knowledge, any judgment, order or decree of any governmental body,
agency or court having jurisdiction over the Company or any of its property or
Glycomed or any of its property, or, to such counsel's knowledge, constitute a
breach or default under, or to such counsel's knowledge, result in the creation
or imposition of any lien, charge or encumbrance upon any property or assets of
the Company or Glycomed pursuant to any document filed as an exhibit to the
Registration Statement or any of the documents incorporated by reference into
the Registration Statement and the Prospectus, and no consent, approval,
authorization, order, registration, filing of or qualification, license or
permit with any governmental body or agency is required for the performance by
the Company of its obligations under this Agreement, except such as
may be required by the securities or blue sky laws of the various states (on
which we express no opinion) and the effectiveness of the Registration
Statement under the Act in connection with the purchase and distribution of the
Shares by the Underwriters.
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(x) The Company is not, and upon consummation of the sale of
the Shares will not be, an "investment company" as such term is defined in the
Investment Company Act of 1940, as amended.
(xi) The Registration Statement has become effective under the
Act and, to such counsel's knowledge, no stop order proceedings suspending the
effectiveness of the Registration Statement have been instituted or threatened
or are pending under the Act, and all filings required by Rule 424(b) of the
Regulations under the Act have been made.
(xii) The statements in the Prospectus under the captions
"Business -- Strategic Alliances," "Business -- Litigation," "Description of
Capital Stock" and in Item 15 of Part II of the Registration Statement, to the
extent that such statements constitute a summary of documents referred to
therein or matters of law, have been prepared or reviewed by us and are correct
in all material respects.
(xiii) The form of certificate used to evidence the Shares
complies in all material respects with all applicable statutory requirements,
with any applicable requirements of the certificate of incorporation and
bylaws of the Company and the requirements of the Nasdaq National Market.
In addition, such opinion shall also contain a statement that
such counsel has participated in conferences with certain officers and other
representatives of the Company, representatives of the independent public
accountants for the Company and representatives of the Underwriters at which the
contents of the Registration Statement, the Prospectus (but not including the
documents incorporated therein by reference) and related matters were discussed
and has generally reviewed and discussed with such persons the content of such
incorporated documents and that (i) each of such incorporated documents (except
for financial statements, schedules and other
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financial data, as to which such counsel need express no belief) complied as to
form when filed with the Commission in all material respects with the
requirements of the Act and the Exchange Act, as applicable, and the rules and
regulations thereunder, (ii) such counsel believes that the Registration
Statement and the Prospectus (except for financial statements, schedules and
other financial data, as to which such counsel need express no belief), as of
the effective date of the Registration Statement, complied as to form in all
material respects with the requirements of the Act and the Regulations, (iii)
that such counsel has no reason to believe that (except for financial
statements, schedules and other financial data, as to which such counsel need
express no belief) either the Registration Statement or the Prospectus, as of
such effective date, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading or that (except for financial
statements, schedules and other financial data, as to which such counsel need
express no belief) the Prospectus, on the Closing Date, contains any untrue
statement of a material fact or omits to state a material fact necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading, and (iv) that such counsel has no reason to
believe that any contract or agreement required to be described in the
Registration Statement or filed as an exhibit thereto is not so described or
filed.
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws other than the laws of the United
States and jurisdictions in which they are admitted, to the extent such counsel
deems proper and to the extent specified in such opinion, if at all, upon an
opinion or opinions (in form and substance reasonably satisfactory to
Underwriters' Counsel) of other counsel reasonably acceptable to Underwriters'
Counsel, familiar with the applicable laws; (B) as to matters of fact, to the
extent they deem
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proper, on certificates of responsible officers of the Company and certificates
or other written statements of officers of departments of various jurisdictions
having custody of documents respecting the corporate existence or good standing
of the Company and its subsidiaries, provided that copies of any such statements
or certificates shall be delivered to Underwriters' Counsel. The opinion of such
counsel for the Company shall state that the opinion of any such other counsel
is in form satisfactory to such counsel and, in their opinion, you and they are
justified in relying thereon.
(c) At the Closing Date you shall have received the opinion of
Lyon & Lyon, special patent counsel for the Company, dated the Closing Date, in
the form of Exhibit A hereto.
(d) All proceedings taken in connection with the sale of the
Firm Shares and the Additional Shares as hereby contemplated shall be reasonably
satisfactory in form and substance to you and to Underwriters' Counsel, and the
Underwriters shall have received from said Underwriters' Counsel a favorable
opinion, dated as of the Closing Date, with respect to the issuance and sale of
the Shares, the Registration Statement and the Prospectus and such other related
matters as you may reasonably require, and the Company shall have furnished to
Underwriters' Counsel such documents as they reasonably request for the purpose
of enabling them to pass upon such matters.
(e) At the Closing Date you shall have received a certificate
of the Chief Executive Officer and Chief Financial Officer of the Company, dated
the Closing Date, to the effect that (i) the condition set forth in subsection
(a) of this Section 6 has been satisfied, (ii) as of the date hereof and as of
the Closing Date, the representations and warranties of the Company set forth in
Section 1 hereof are accurate, (iii) as of the Closing Date, the obligations of
the Company to be
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performed hereunder on or prior thereto have been duly performed and (iv)
subsequent to the respective dates as of which information is given in the
Registration Statement and the Prospectus, the Company and its subsidiaries have
not sustained any material loss or interference with their respective businesses
or properties from fire, flood, hurricane, accident or other calamity, whether
or not covered by insurance, or from any labor dispute or any legal or
governmental proceeding, and there has not been any material adverse change, or
any develoent involving a material adverse change, in the business prospects,
properties, operations, condition (financial or otherwise), or results of
operations of the Company and its subsidiaries taken as a whole, except in each
case as described in or contemplated by the Prospectus.
(f) At the time this Agreement is executed and at the Closing
Date, you shall have received a letter from Ernst & Young LLP, independent
public accountants for the Company, dated, respectively, as of the date of this
Agreement and as of the Closing Date addressed to the Underwriters and in form
and substance satisfactory to you, stating that: (i) they are independent
certified public accountants with respect to the Company within the meaning of
the Act and the Regulations and that the answer to Item 10 of the Registration
Statement is correct insofar as it relates to them; (ii) in their opinion, the
financial statements and schedules of the Company included in and incorporated
by reference in the Registration Statement and the Prospectus and covered by
their opinion therein comply as to form in all material respects with the
applicable accounting requirements of the Act and the Exchange Act and the
applicable published rules and regulations of the Commission thereunder; (iii)
on the basis of procedures consisting of a reading of the latest available
unaudited interim consolidated financial statements of the Company and its
subsidiaries, a reading of the minutes of meetings and consents of the
stockholders and boards of
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directors of the Company and its subsidiaries and the committees of such boards
subsequent to December 31, 1995, inquiries of officers and other employees of
the Company and its subsidiaries who have responsibility for financial and
accounting matters of the Company and its subsidiaries with respect to
transactions and events subsequent to December 31, 1995 and other specified
procedures and inquiries to a date not more than five days prior to the date of
such letter, nothing has come to their attention that would cause them to
believe that: (A) the unaudited consolidated financial statements and schedules
of the Company presented in the Registration Statement and the Prospectus do not
comply as to form in all material respects with the applicable accounting
requirements of the Act and, if applicable, the Exchange Act and the applicable
published rules and regulations of the Commission thereunder or that any
material modification should be made to the unaudited consolidated financial
statements described above for them to be in conformity with generally accepted
accounting principles applied on a basis substantially consistent with that of
the audited consolidated financial statements incorporated by reference in the
Registration Statement and the Prospectus; (B) with respect to the period
subsequent to June 30, 1996, there were, as of the date of the most recent
available monthly consolidated financial statements of the Company and its
subsidiaries, if any, and as of a specified date not more than five days prior
to the date of such letter, any changes in the capital stock or long-term
indebtedness of the Company or any decrease in the net current assets or
stockholders' equity of the Company, in each case as compared with the amounts
shown in the most recent balance sheet presented in the Registration Statement
and the Prospectus, except for changes or decreases which the Registration
Statement and the Prospectus disclose have occurred or may occur or which are
set forth in such letter; or (C) during the period from July 1, 1996 to the
date of the most recent available monthly consolidated financial statements of
the Company and its subsidiaries, if any,
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and to a specified date not more than five days prior to the date of such
letter, there was any decrease in net current assets and stockholders' equity
except for such decreases as were consistent with prior periods; and (iv) they
have compared specific dollar amounts, numbers of shares, percentages of
revenues and earnings, and other financial information pertaining to the Company
and its subsidiaries set forth in the Registration Statement and the Prospectus,
which have been specified by you prior to the date of this Agreement, to the
extent that such amounts, numbers, percentages and information may be derived
from the general accounting and financial records of the Company and its
subsidiaries or from schedules furnished by the Company, and excluding any
questions requiring an interpretation by legal counsel, with the results
obtained from the application of specified readings, inquiries, and other
appropriate procedures specified by you set forth in such letter, and found them
to be in agreement.
(g) Prior to the Closing Date, the Company shall have
furnished to you such further information, certificates and documents as you may
reasonably request.
(h) You shall have received from each person who is a director
or officer of the Company and such stockholders as have been heretofore
designated by you and listed in Schedule II hereto an agreement to the effect
that such person will not, directly or indirectly, without your prior written
consent, offer for sale, sell, distribute, contract to sell, pledge, grant any
option for the sale of or otherwise dispose of or transfer, whether directly or
synthetically, any Common Stock or any securities convertible into or
exchangeable for, or any options or rights to purchase or acquire, Common Stock
or any Common Stock issuable upon the exercise of options for a period of 90
days after the date of the Prospectus.
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(i) At the Closing Date, the Shares shall have been approved
for listing on the Nasdaq National Market.
(j) At the Closing Date, you shall have received the opinion
of ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for Ligand Pharmaceuticals (Canada)
Incorporated ("Ligand Canada"), dated the Closing Date, addressed to the
Underwriters and in form and substance satisfactory to Underwriters' Counsel,
to the effect that:
(i) Ligand Canada Incorporated
has been duly incorporated and is validly existing as a corporation in good
standing under the laws of the Canadian province of Saskatchewan, with the
corporate power and authority to own or lease its properties and conduct its
business. Ligand Canada is qualified to do business, to such counsel's
knowledge, in each province in Canada where its failure to do so would have a
material adverse effect on its business or properties. The outstanding shares
of capital stock of Ligand Canada have been duly and validly authorized and
issued, are nonassessable. All of such shares are owned of record by the
Company and, to such counsel's knowledge, are free and clear of any pledge,
lien, security interest, charge, claim, equity or encumbrance, such shares are
not subject to any preemptive rights and there are not any outstanding rights,
warrants or options to acquire any capital stock of Ligand Canada.
(ii) The execution and delivery by the
Company of, and the performance by the Company of its obligations under,
this Agreement will not contravene any provision of applicable law or
the certificate of incorporation or bylaws of Ligand Canada, or, to such
counsel's knowledge, any judgment, order or decree of any governmental body,
agency or court having jurisdiction over Ligand Canada or any of its property,
or, to such counsel's knowledge, result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of Ligand Canada
pursuant to any of the agreements listed on Exhibit B hereto.
If any of the conditions specified in this Section 6 shall not
have been fulfilled when and as required by this Agreement, or if any of the
certificates, opinions, written statements or letters furnished to you or to
Underwriters' Counsel pursuant to this Section 6 shall not be in all material
respects reasonably satisfactory in form and substance to you and to
Underwriters' Counsel, all obligations of the Underwriters hereunder may be
cancelled by you on, or at any time prior to, the Closing Date and the
obligations of the Underwriters to purchase the Additional Shares may be
cancelled by you on, or at any time prior to, the Additional Closing Date.
Notice of such cancellation shall be given to the Company in writing or by
telephone, telex or telegraph, confirmed in writing.
7. Indemnification.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act against
any and all losses, liabilities, claims, damages and expenses whatsoever as
incurred (including but not limited to reasonable attorneys' fees and any and
all expenses incurred in investigating, preparing or defend-
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ing against any litigation, commenced or threatened, or any claim whatsoever,
and any and all amounts paid in settlement of any claim or litigation), joint or
several, to which they or any of them may become subject under the Act, the
Exchange Act or otherwise, insofar as such losses, liabilities, claims, damages
or expenses (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement, as originally filed or any amendment thereof, or any
related preliminary prospectus or the Prospectus, or in any supplement thereto
or amendment thereof, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided, however, that
the Company will not be liable in any such case to the extent but only to the
extent that any such loss, liability, claim, damage or expense arises out of or
is based upon any such untrue statement or alleged untrue statement or omission
or alleged omission made therein in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any Underwriter through
you expressly for use therein. This indemnity agreement will be in addition to
any liability which the Company may otherwise have, including under this
Agreement.
(b) Each Underwriter severally, and not
jointly, agrees to indemnify and hold harmless the Company, each of the
directors of the Company, each of the officers of the Company who shall have
signed the Registration Statement, and each other person, if any, who controls
the Company within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act against any losses, liabilities, claims, damages and expenses
whatsoever as incurred (including but not limited to reasonable attorneys' fees
and any and all expenses incurred in investigating, preparing or defending
against any litigation, commenced or threatened, or any claim whatsoever, and
any and all amounts paid in settlement of any claim or litigation), joint or
several, to which
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they or any of them may become subject under the Act, the Exchange Act or
otherwise, insofar as such losses, liabilities, claims, damages or expenses (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in the Registration
Statement, as originally filed or any amendment thereof, or any related
preliminary prospectus or the Prospectus, or in any amendment thereof or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that any such loss, liability, claim, damage or
expense arises out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made therein in reliance upon
and in conformity with written information furnished to the Company by or on
behalf of any Underwriter through you expressly for use therein; provided,
however, that in no case shall any Underwriter be liable or responsible for any
amount in excess of the underwriting discount applicable to the Shares purchased
by such Underwriter hereunder. This indemnity will be in addition to any
liability which any Underwriter may otherwise have, including under this
Agreement. The Company acknowledges that the statements set forth in the last
paragraph of the cover page and in the first, third and eighth paragraphs under
the caption "Underwriting" in the Prospectus constitute the only information
furnished in writing by or on behalf of any Underwriter expressly for use in the
Registration Statement or in any amendment thereof, any related preliminary
prospectus or the Prospectus or in any amendment thereof or supplement thereto,
as the case may be.
(c) Promptly after receipt by an indemnified party
under subsection (a) or (b) above of notice of the commencement of any action,
such indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under such subsection, notify each party against
whom indemnification is to be
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sought in writing of the commencement of such action (but the failure so to
notify an indemnifying party shall not relieve it from any liability which it
may have under this Section 7 except to the extent such failure prejudices the
rights of an indemnifying party). In case any such action is brought against any
indemnified party, and it notifies an indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein, and to
the extent it may elect by written notice delivered to the indemnified
party promptly after receiving the aforesaid notice from such indemnified party,
to assume the defense thereof with counsel satisfactory to such indemnified
party. Notwithstanding the foregoing, the indemnified party or parties shall
have the right to employ its or their own counsel in any such case, but the fees
and expenses of such counsel shall be at the expense of such indemnified party
or parties unless (i) the employment of such counsel shall have been authorized
in writing by one of the indemnifying parties in connection with the defense of
such action, (ii) the indemnifying parties shall not have employed counsel to
have charge of the defense of such action within a reasonable time after notice
of commencement of the action, or (iii) such indemnified party or parties shall
have reasonably concluded that there may be defenses available to it or them
which are different from or additional to those available to one or all of the
indemnifying parties (in which case the indemnifying parties shall not have the
right to direct the defense of such action on behalf of the indemnified party or
parties), in any of which events such fees and expenses shall be borne by the
indemnifying parties. Anything in this subsection to the contrary
notwithstanding, an indemnifying party shall not be liable for any settlement of
any claim or action effected without its prior written consent; provided,
however, that such consent was not unreasonably withheld.
8. Contribution. In order to provide for contribution in
circumstances in which the indemnification provided for in Section 7 hereof is
for any reason held to be unavailable from any indemnifying party or is
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35
insufficient to hold harmless a party indemnified thereunder, the Company and
the Underwriters shall contribute to the aggregate losses, claims, damages,
liabilities and expenses of the nature contemplated by such indemnification
provision (including any investigation, legal and other expenses incurred in
connection with, and any amount paid in settlement of, any action, suit or
proceeding or any claims asserted, but after deducting, in the case of losses,
claims, damages, liabilities and expenses suffered by the Company, any
contribution received by the Company from persons, other than the Underwriters,
who may also be liable for contribution, including persons who control the
Company within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act, officers of the Company who signed the Registration Statement and
directors of the Company) as incurred to which the Company and one or more of
the Underwriters may be subject, in such proportions as is appropriate to
reflect the relative benefits received by the Company and the Underwriters from
the offering of the Shares or, if such allocation is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to above but also the relative fault of the Company and the
Underwriters in connection with the statements or omissions which resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative benefits received by the Company
and the Underwriters shall be deemed to be in the same proportion as (x) the
total proceeds from the offering (net of underwriting discounts and commissions
but before deducting expenses) received by the Company and (y) the underwriting
discounts and commissions received by the Underwriters, respectively, in each
case as set forth in the table on the cover page of the Prospectus. The relative
fault of the Company and of the Underwriters shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or the Underwriters and the
parties' relative intent, knowl-
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36
edge, access to information and opportunity to correct or prevent such
statement or omission. The Company and the Underwriters agree that it would not
be just and equitable if contribution pursuant to this Section 8 were determined
by pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to above. Notwithstanding the
provisions of this Section 8, (i) in no case shall any Underwriter be liable or
responsible for any amount in excess of the underwriting discount applicable to
the Shares purchased by such Underwriter hereunder, and (ii) no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. Notwithstanding the provisions of this Section 8
and the preceding sentence, no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the Shares
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages that such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. For purposes of this Section 8, each person, if any, who
controls an Underwriter within the meaning of Section 15 of the Act or Section
20(a) of the Exchange Act shall have the same rights to contribution as such
Underwriter, and each person, if any, who controls the Company within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act, each
officer of the Company who shall have signed the Registration Statement and each
director of the Company shall have the same rights to contribution as the
Company, subject in each case to clauses (i) and (ii) of this Section 8. Any
party entitled to contribution will, promptly after receipt of notice of
commencement of any action, suit or proceeding against such party in respect of
which a claim for contribution may be made against another party or parties,
notify each party or parties from whom contribution may be sought, but the
omission to so notify such party or
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parties shall not relieve the party or parties from whom contribution
may be sought from any obligation it or they may have under this Section 8 or
otherwise. No party shall be liable for contribution with respect to any action
or claim settled without its consent; provided, however, that such consent was
not unreasonably withheld.
9. Default by an Underwriter.
(a) If any Underwriter or Underwriters shall default in its
or their obligation to purchase Firm Shares or Additional Shares hereunder, and
if the Firm Shares or Additional Shares to which such default relates do not
(after giving effect to arrangements, if any, made by you pursuant to subsection
(b) below) exceed in the aggregate 10% of the total number of Firm Shares or
Additional Shares, as the case may be, the Firm Shares or Additional Shares to
which such default relates shall be purchased by the non-defaulting Underwriters
in proportion to the respective proportions which the numbers of Firm Shares set
forth opposite their respective names in Schedule I hereto bear to the aggregate
number of Firm Shares set forth opposite the names of the non-defaulting
Underwriters.
(b) In the event that such default relates to more than
10% of the total number of Firm Shares or Additional Shares, as the case may be,
you may in your discretion arrange for yourself or for another party or parties
(including any non-defaulting Underwriter or Underwriters who so agree) to
purchase the Firm Shares or Additional Shares to which such default relates on
the terms contained herein. In the event that within five calendar days after
such default you do not arrange for the purchase of the Firm Shares or
Additional Shares to which such default relates as provided in this Section 9,
this Agreement or, in the case of a default with respect to Additional Shares,
the obligations of the Underwriters to purchase, and of the Company to sell, the
Additional Shares shall thereupon terminate without liability on the part of the
Company
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(except, in each case, as provided in Section 5, 7(a) and 8 hereof) or
the Underwriters with respect thereto, but nothing in this Agreement shall
relieve a defaulting Underwriter or Underwriters of its or their liability, if
any, to the other Underwriters and the Company for damages occasioned by its or
their default hereunder.
(c) In the event that the Firm Shares or Additional Shares to
which such default relates are to be purchased by the non-defaulting
Underwriters or are to be purchased by another party or parties as aforesaid,
you or the Company shall have the right to postpone the Closing Date or
Additional Closing Date, as the case may be, for a period not exceeding five
Business Days, in order to effect whatever changes may thereby be made necessary
in the Registration Statement or the Prospectus or in any other documents and
arrangements, and the Company agrees to file promptly any amendment or
supplement to the Registration Statement or the Prospectus which, in the opinion
of Underwriters' Counsel, may thereby be made necessary or advisable. The term
"Underwriter" as used in this Agreement shall include any party substituted
under this Section 9 with like effect as if it had originally been a party to
this Agreement with respect to such Firm Shares or Additional Shares, as the
case may be.
10. Survival of Representations and Agreements. All
representations and warranties, covenants and agreements of the Underwriters and
the Company contained in this Agreement, including the agreements contained in
Section 5 hereof, the indemnity agreements contained in Section 7 hereof and the
contribution agreements contained in Section 8 hereof, shall remain operative
and in full force and effect regardless of any investigation made by or on
behalf of any Underwriter or any controlling person thereof or by or on behalf
of the Company, any of its officers and directors or any controlling person
thereof, and shall survive delivery of and payment for the Shares to and by the
Underwriters. The representations contained in Section 1 hereof and the
agreements contained in Sections 5, 7, 8 and 11(d) hereof shall survive the
termination of this Agreement,
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including termination pursuant to Section 9 or 11 hereof.
11. Effective Date of Agreement; Termination.
(a) This Agreement shall become effective upon the later of
(i) such time as you and the Company shall have received notification of the
effectiveness of the Registration Statement and (ii) the execution of this
Agreement. If either the public offering price or the purchase price per Share
has not been agreed upon prior to 5:00 P.M., New York City time, on the fifth
full Business Day after the Registration Statement shall have become effective,
this Agreement shall thereupon terminate without liability to the Company or the
Underwriters except as herein expressly provided. Until this Agreement becomes
effective as aforesaid, it may be terminated by the Company by notifying you or
by you notifying the Company. Notwithstanding the foregoing, the provisions of
this Section 11 and of Sections 1, 5, 7 and 8 hereof shall at all times be in
full force and effect.
(b) You shall have the right to terminate this Agreement at
any time prior to the Closing Date or the obligations of the Underwriters to
purchase the Additional Shares at any time prior to the Additional Closing Date,
as the case may be, if (i) any domestic or international event or act or
occurrence has materially disrupted, or in your opinion will in the immediate
future materially disrupt, the market for the Company's securities or securities
in general, (ii) if trading on the New York Stock Exchange, the American Stock
Exchange or the Nasdaq National Market has been suspended, or minimum or maximum
prices for trading have been fixed, or maximum ranges for prices for securities
have been required, on the New York Stock Exchange, the American Stock Exchange
or the Nasdaq National Market by the New York Stock Exchange, the American Stock
Exchange or The Nasdaq Stock Market or by order of the Commission or any other
governmental authority having jurisdiction, (iii) if a banking moratorium has
been declared by a state or federal authority or if any new restriction
materially
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adversely affecting the distribution of the Firm Shares or the Additional Shares
has become effective, (iv) if any downgrading in the rating of the Company's
debt securities or preferred stock by any "nationally recognized statistical
rating-organization" (as defined for purposes of Rule 436(g) under the Act) has
occurred or (v) (A) if the United States becomes engaged in hostilities or there
is an escalation of hostilities involving the United States or there is a
declaration of a national emergency or war by the United States or (B) if there
has been a change in political, financial or economic conditions and the effect
of any such event in (A) or (B), in your judgment, makes it impracticable or
inadvisable to proceed with the offering, sale and delivery of the Firm Shares
or the Additional Shares, as the case may be, on the terms contemplated by the
Prospectus.
(c) Any notice of termination pursuant to this Section 11
shall be by telephone, facsimile, telex or telegraph, confirmed in writing by
letter.
(d) If this Agreement shall be terminated pursuant to any of
the provisions hereof (otherwise than pursuant to (i) notification by you as
provided in Section 11(a) hereof or (ii) Section 9(b) or 11(b) hereof), or if
the sale of the Shares provided for herein is not consummated because any
condition to the obligations of the Underwriters set forth herein is not
satisfied or because of any refusal, inability or failure on the part of the
Company to perform any agreement herein or comply with any provision hereof, the
Company will, subject to demand by you, reimburse the Underwriters for all
out-of-pocket expenses (including the reasonable fees and expenses of their
counsel), incurred by the Underwriters in connection herewith.
12. Notice. All communications hereunder, except as may be
otherwise specifically provided herein, shall be in writing and, if sent to any
Underwriter, shall be mailed or delivered, or sent by facsimile, telex or
telegraph and confirmed in writing by letter, to such Underwriter c/o Bear,
▇▇▇▇▇▇▇ & Co. Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇
▇.
▇▇
▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ No. ▇▇▇-▇▇▇-▇▇▇▇; if sent to the Company, shall be mailed
or delivered, or sent by facsimile or telegraph and confirmed in writing by
letter, to the Company, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Facsimile No. ▇▇▇-▇▇▇-▇▇▇▇.
13. Parties. This Agreement shall inure solely to the benefit
of, and shall be binding upon, the Underwriters and the Company and the
controlling persons, directors, officers, employees and agents referred to in
Sections 7 and 8 hereof, and their respective successors and assigns, and no
other person shall have or be construed to have any legal or equitable right,
remedy or claim under or in respect of or by virtue of this Agreement or any
provision contained herein. The term "successors and assigns" shall not include
a purchaser, in its capacity as such, of Shares from any of the Underwriters.
14. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, but without
regard to principles of conflicts of law.
15. Counterparts. This Agreement may be executed in
counterparts, each of which shall be an original and all of which together shall
constitute one and the same instrument.
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If the foregoing correctly sets forth the understanding
between you and the Company, please so indicate in the space provided below for
that purpose, whereupon this letter shall constitute a binding agreement among
us.
Very truly yours,
LIGAND PHARMACEUTICALS INCORPORATED
By: ________________________
Name:
Title:
Accepted as of the date first above written:
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & COMPANY LLC
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC
By: Bear, ▇▇▇▇▇▇▇ & Co. Inc.
By: _______________
Name:
Title:
On behalf of themselves and the other
Underwriters named in Schedule I hereto.
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SCHEDULE I
Number of Firm
Name of Underwriter Shares to Be Purchased
------------------- ----------------------
Bear, ▇▇▇▇▇▇▇ & Co. Inc..................................................
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & Company LLC........................................
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC....................................................
----------
Total 2,750,000
----------
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SCHEDULE II
▇▇▇▇▇▇ Laboratories
Allergan Pharmaceuticals (Ireland) Ltd., Inc.
American Home Products Corporation
Glaxo Wellcome Inc.
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EXHIBIT A
October [___], 1996
Bear, ▇▇▇▇▇▇▇ & Co. Inc.
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & Company LLC
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC
As Representatives of the
several Underwriters
c/o Bear, ▇▇▇▇▇▇▇ & Co. Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: Opinion of Patent Counsel
Dear Sirs:
This opinion is furnished to you in connection with the Form
S-3 Registration Statement (No. 333-12603) (the "Registration Statement"), which
became effective on _____, 1996, at the request of Ligand Pharmaceuticals
Incorporated ("Ligand") to which company we are and have acted as patent
counsel on certain matters.
We represent Ligand as patent counsel in connection with
certain intellectual property matters. In connection with our responsibilities
as patent counsel for Ligand, we have filed and are prosecuting, among other
things, certain patent applications in the United States and other countries for
Ligand's technology, including assays to screen for receptor agonists and
antagonists which act through particular regions of intracellular receptors,
assays to screen for cytakins modulators, novel human intracellular receptors, a
promotor of an obesity gene and assays to screen for drugs affecting metabolism
(collectively, the "Patent Applications"). (We are also involved in ongoing
prosecution or maintenance of other
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patent applications and patents filed by other law firms on behalf of Ligand. We
provide no opinion with regard to these patent applications and patents.)
Based solely upon our experience as patent counsel to Ligand
and a review of our records of the Patent Applications, we state as follows:
Prior to the filing of the Patent Applications, we conducted
limited investigations of the published prior art found by Ligand scientists (in
some cases with our assistance), relating to some of the inventions claimed in
the Patent Applications. No other searches for other prior art were conducted by
us. Based on the information provided us from those investigations, we believe
we have disclosed or will disclose in the Patent Applications all material prior
art references known to us during the prosecution of the Patent Applications to
the United States Patent and Trademark Office (the "PTO") in the relevant
applications. We believe that the information submitted to the PTO in the Patent
Applications, and in connection with the prosecution of the Patent Applications,
was accurate. We believe that neither this firm, nor Ligand, made any
misrepresentation or concealed any material fact from the PTO in any of the
Patent Applications, or in connection with the prosecution of the Patent
Applications.
We have reviewed only two sections (hereinafter "Two
Sections ") of the Registration Statement namely, Paragraphs 1 - 3 inclusive
under the caption "Risk Factors--Uncertainty of Patent Protection; Dependence on
Proprietary Technology," and Paragraphs 2 - 4 inclusive of "Business--Patents
and Proprietary Rights". We opine only with regard to the Two Sections and on no
other section of the Registration Statement or related prospectus (the
"Prospectus"). We give no opinion with regard to statements in the Two Sections
concerning business matters, including any reference to the Company's success,
agreements, competition, expectations, goals, policies, trade secrets, and
know-how. We opine only with regard to the Patent Applications, and with respect
to the information in the Two Sections relating thereto, nothing has come to our
attention that would lead us to believe that such information contains
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any untrue statement of a material fact or omits to state a material fact that
is required to be stated therein or necessary in order to make the statements
therein not misleading in light of the circumstances under which they were made.
We provide no opinion with regard to trade secrets, know-how, and agreements
since we have not reviewed such matters of Ligand.
Subject to the above limitations, we are of the opinion that:
Based solely on communications with officials at the Company:
(1) we understand that Ligand is not subject to any current claim or action of
infringement or other violation of any other person's patent; (2) we are unaware
of any facts that would have a material adverse effect on the enforceability of
any of Ligand's patents issued on the Patent Applications; and (3) we have no
knowledge of any material facts which would preclude Ligand from having clear
title to the Patent Applications.
From our review of the Patent Applications, except as set
forth in the Prospectus, (1) to our knowledge and belief, there are no legal or
governmental proceedings or interference proceedings pending relating to the
Patent Applications, other than a standard review of the pending Patent
Applications; (2) to our knowledge and belief, each of the non-provisional
Patent Applications has been assigned or will be assigned to Ligand by the
inventors named therein, and has been filed by, or on behalf of, Ligand with the
PTO in accordance with the rules and regulations of the PTO; (3) to our
knowledge and belief, substantially all such Patent Applications have been
awarded a filing date by the PTO; and (4) we are unaware of any facts which form
a basis for a finding of unenforceability or invalidity of any of the Patent
Applications that are material to Ligand's business.
We have no reason to believe that the Patent Applications will
not eventuate in issued patents or that any patents issued in respect of the
Patent Applications will not be valid.
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We are delivering this opinion to you solely for your benefit
and the benefit of the several underwriters named in the Underwriting Agreement
relating to the Registration Statement, and no other person may rely upon it.
Very truly yours,
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EXHIBIT B
1. Distribution and Marketing Agreement, dated September 16, 1994, between
Ligand Pharmaceuticals Incorporated and Cetus Oncology Corporation, a
wholly-owned subsidiary of Chiron Corporation.
2. PHOTOFRIN(R) Distribution Agreement, dated March 8, 1995, between Ligand
Pharmaceuticals Incorporated and Quadra Logic Technologies Inc.
3. Distribution and Marketing Agreement, effective as of March 1, 1996,
between Ligand Pharmaceuticals Incorporated and Ligand Pharmaceuticals
(Canada) Incorporated.