EXHIBIT 10.1
EXECUTION COPY
STOCKHOLDERS AGREEMENT
dated as of December 2, 2005
by and among
LIGAND PHARMACEUTICALS INCORPORATED,
THIRD POINT LLC,
THIRD POINT OFFSHORE FUND, LTD.,
THIRD POINT PARTNERS LP,
THIRD POINT ULTRA LTD.,
LYXOR/THIRD POINT FUND LTD., and
THIRD POINT PARTNERS QUALIFIED LP
NSD\56089.7
This STOCKHOLDERS AGREEMENT dated as of December 2, 2005 (this
"STOCKHOLDERS AGREEMENT") is made and entered into by and among Ligand
Pharmaceuticals Incorporated, a Delaware corporation (the "COMPANY"), and Third
Point LLC, a Delaware limited liability company ("THIRD POINT"), and Third Point
Offshore Fund, Ltd., a Cayman Islands limited liability exempted company, Third
Point Partners LP, a Delaware limited partnership, Third Point Ultra Ltd., a
British Virgin Islands limited liability company, Lyxor/Third Point Fund Ltd., a
Jersey public company with limited liability, and Third Point Partners Qualified
LP, a Delaware limited partnership (each a "STOCKHOLDER" and, collectively, the
"STOCKHOLDERS").
WHEREAS, each Stockholder is the beneficial owner of the
number of shares of common stock, par value $.001 per share, of the Company (the
"COMMON STOCK") listed next to such Stockholder's name on SCHEDULE I hereto (the
"THIRD POINT SHARES"); and
WHEREAS, the Stockholders and the Company wish to provide for
representation on the Board of Directors of the Company (the "BOARD OF
DIRECTORS") for the Stockholders and certain agreements as to the Common Stock
beneficially owned by the Stockholders, or otherwise as to which a Stockholder
has voting power, all as hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth in this Stockholders Agreement, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.01 DEFINITIONS.
(a) Except as otherwise specifically indicated, the following
terms have the following meanings for all purposes of this Stockholders
Agreement:
"AFFILIATE" has the meaning assigned thereto in Rule 12b-2
promulgated under the Exchange Act.
"BENEFICIALLY OWNS" (or comparable variations thereof) has the
meaning set forth in Rule 13d-3 promulgated under the Exchange Act.
"BYLAWS" means the Amended and Restated Bylaws of the Company,
as the same may be amended and restated from time to time.
"CERTIFICATE OF INCORPORATION" means the Amended and Restated
Certificate of Incorporation of the Company, as the same may be amended and
restated from time to time.
NSD\56089.7
"COMMISSION" means the Securities and Exchange Commission.
"DIRECTOR TERMINATION DATE" means the earliest of: (i) the
first date on which (x) any member of the Restricted Group engages in any of the
activities prohibited by ARTICLE IV if such violation is not wholly cured within
three (3) business days following written notice thereof by the Company, (y) any
member of the Restricted Group engages in a Schedule 13D Transaction, or (z) the
filing of an amendment to the Schedule 13D previously filed by certain of the
Stockholders with the Commission indicating that any member of the Restricted
Group has a plan or proposal to engage in, or that it has engaged in, a Schedule
13D Transaction (other than an amendment filed following the execution and
delivery of this Stockholders Agreement announcing such execution and delivery
or subsequent filings necessitated by the terms of this Agreement and actions by
the parties hereunder); (ii) the first date on which the members of the
Restricted Group sell, transfer or otherwise dispose of any or all of the Voting
Securities such that the Restricted Group's aggregate beneficial ownership of
Voting Securities is reduced; (iii) the first date on which there shall be no
Third Point Designees then in office as members of the Board of Directors and
the Stockholders shall not have named a successor to any of the Third Point
Designees in accordance with Section 2.01(c) hereof; or (iv) the Standstill
Termination Date.
"EQUITY SECURITIES" means Voting Securities, Convertible
Securities and Rights to Purchase Voting Securities.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"GOVERNMENTAL OR REGULATORY AUTHORITY" means any court,
tribunal, arbitrator, authority, agency, commission, official or other
instrumentality of the United States, any foreign country or any domestic or
foreign state, county, city or other political subdivision, or any stock
exchange or market in which the Common Stock is listed for trading or traded.
"INDEPENDENT DIRECTOR" means any member of the Board of
Directors who is not excluded from qualification as an independent director (for
all purposes other than service on the Company's audit or compensation
committees) by the enumerated PER SE exclusions from such qualification
contained in the listing requirements of the Nasdaq National Market for listed
companies not utilizing the "controlled company" exception, including a
subjective determination by the Board of Directors.
"PERSON" means any individual, corporation, limited liability
company, partnership, trust, other entity or group (within the meaning of
Section 13(d)(3) of the Exchange Act).
"REPRESENTATIVES" of any Person means such Person's directors,
officers, employees, legal, investment banking and financial advisors,
accountants and any other agents and representatives of such entity.
"RESTRICTED GROUP" means, collectively, (i) each Stockholder,
(ii) any and all Affiliates of any Stockholder and any Person as to which voting
power over Voting Securities,
2
NSD\56089.7
directly or indirectly, is controlled or shared by a Stockholder, (iii) the
then current officers, directors or managing members of any Person described in
clauses (i) or (ii) above, (iv) with respect to any Person described in clauses
(i) or (ii) above who is an individual, (a) any and all immediate family members
of such Person, (b) the heirs, executors, personal representatives and
administrators of any of the foregoing Persons, (c) any and all trusts
established for the benefit of any of the foregoing Persons and (d) any and all
charitable foundations the investment decisions of which are controlled by any
of the foregoing Persons, and (v) the other members of any and all groups
(within the meaning of Section 13(d)(3) of the Exchange Act) of which any
Stockholder or any Person described in clauses (i) or (ii) above is a member.
"RIGHTS PLAN" means the amended and restated preferred shares
rights agreement dated as of September 13, 1996, as amended through March 22,
2004, between the Company and Mellon Investor Services LLC, as rights agent, as
the same may be further amended from time to time, and "RIGHTS" has the meaning
given such term in the Rights Agreement.
"SCHEDULE 13D TRANSACTION" means any action or transaction
described in any of paragraphs (a) through (j) of Item 4 of Schedule 13D
promulgated by the Commission. "Schedule 13D Transaction" shall not include any
transaction described in paragraph (a) of Item 4 of Schedule 13D if, after
taking into account all such contemporaneous transactions, the aggregate
beneficial ownership of the Stockholders shall not have changed.
"STANDSTILL TERMINATION DATE" has the meaning set forth in
Section 4.01.
"STRATEGIC PROCESS" means that certain evaluation of strategic
alternatives by the Company publicly announced pursuant to a press release by
the Company on November 18, 2005.
"THIRD POINT DESIGNEE(S)" means Daniel S. Loeb, Jeffrey R.
Perry and Brigette Roberts, M.D. and any other individuals subsequently
designated from time to time pursuant to SECTION 2.01 by the Stockholders;
PROVIDED, HOWEVER, that no individual who is an officer, director, partner or
stockholder of any competitor of the Company or any of its subsidiaries (other
than a stockholder which owns less than 5% of the voting stock or power of a
competitor which is a publicly-traded company) shall serve as a Third Point
Designee.
"VOTING SECURITIES" means the Common Stock and any other
securities of the Company of any kind or class having the power generally to
vote for the election of directors; "CONVERTIBLE SECURITIES" means securities of
the Company which are convertible or exchangeable (whether presently convertible
or exchangeable or not) into Voting Securities; "RIGHTS TO PURCHASE VOTING
SECURITIES" means options and rights issued by the Company (whether presently
exercisable or not) to purchase Voting Securities or Convertible Voting
Securities (but not including the Rights); and "OUTSTANDING VOTING SECURITIES"
means at any time the then issued and outstanding Voting Securities (not
including shares issuable upon the conversion of any Convertible Securities or
upon the exercise of any Rights to Purchase Voting Securities).
(b) In addition, the following terms are defined in the
Sections set forth below:
3
NSD\56089.7
"Board of Directors" -- Preamble
"Common Stock" -- Preamble
"Company" -- Preamble
"Stockholder" and "Stockholders" -- Preamble
"Stockholders Agreement" -- Preamble
"Third Point Shares" -- Preamble
(c) Unless the context of this Stockholders Agreement
otherwise requires, (i) words of any gender include each other gender; (ii)
words using the singular or plural number also include the plural or singular
number, respectively; (iii) the terms "hereof," "herein," "hereby" and
derivative or similar words refer to this entire Stockholders Agreement; (iv)
the terms "Article" or "Section" refer to the specified Article or Section of
this Stockholders Agreement and (v) all references to statutes, rules and
regulations are to the enumerated statutes, rules and regulations and any
successor statute, rule or regulation. Whenever this Stockholders Agreement
refers to a number of days, such number shall refer to calendar days unless
business or trading days are specified.
ARTICLE II
BOARD OF DIRECTORS
2.01 COMPOSITION OF BOARD OF DIRECTORS.
(a) No later than December 8, 2005, the Board of Directors
shall, pursuant to the powers granted to it under the Bylaws, increase the size
of the Board of Directors by three and elect the initial Third Point Designees
named in this Stockholders Agreement to fill the new directorships so created on
the Board of Directors and to serve in such capacity from such date of election
through the Director Termination Date.
(b) Until and including the earlier of (i) the Director
Termination Date and (ii) an annual meeting of the Company to be held during
2007, the Board of Directors shall, at each meeting of stockholders of the
Company at which the terms of the Third Point Designees are scheduled to expire,
nominate the Third Point Designees to stand for election as directors of the
Company for a succeeding term in accordance with the Company's procedures for
nomination of directors as provided for in its Bylaws, recommend such election
and solicit proxies in respect thereof and vote the shares of Common Stock
represented by all proxies granted by stockholders in connection with the
solicitation of proxies by the Board of Directors in connection with such
meeting in favor of the Third Point Designees, except for such proxies that
specifically indicate a vote to withhold authority with respect to the Third
Point Designees.
(c) Until the Director Termination Date, the Board of
Directors shall cause any vacancy created on the Board of Directors by reason of
the death, resignation or removal of a then serving Third Point Designee to be
filled promptly by a successor Third Point Designee named by the Stockholders as
follows:
4
NSD\56089.7
(i) In the event of the death or disability of a
Third Point Designee, or following the termination of all employment of a
Third Point Designee with all of the Stockholders, the Stockholders shall be
entitled to designate a replacement for the vacancy left by the death or
disability, or termination of such full-time employment, of such Third Point
Designee by written notice delivered to the Company to serve on the Board of
Directors in accordance with SECTION 7.03 of this Agreement. Such subsequently
designated Third Point Designee shall be an individual of high personal
integrity and ethics, relevant expertise and professional experience and such
other qualifications, as determined by the nominating committee of the Board of
Directors. Such subsequent nomination shall be promptly reviewed by and subject
to the approval of the nominating committee and thereafter such replacement
shall be promptly elected to the Board of Directors, provided such approval of
the nominating committee and of the Board of Directors shall not be unreasonably
withheld or delayed.
(ii) Other than pursuant to SECTION 2.01(C)(I) above,
and only following June 2, 2006, the Stockholders shall only be entitled to
replace one of the initial Third Point Designees (or any substitute Third
Point Designee permitted under SECTION 2.01(C)(I) above). Such subsequently
designated Third Point Designee shall be an individual of high personal
integrity and ethics, relevant expertise and professional experience and such
other qualifications, as determined by the nominating committee of the Board of
Directors. Such subsequent nomination shall be promptly reviewed by and subject
to the approval of the nominating committee and thereafter such replacement
shall be promptly elected to the Board of Directors, provided such approval of
the nominating committee and of the Board of Directors shall not be unreasonably
withheld or delayed. In the event the Stockholders desire to replace one of the
Third Point Designees as permitted pursuant to this SECTION 2.01(C)(II), the
Stockholders shall provide written notice of their desire to replace such Third
Point Designee in accordance with SECTION 7.03 of this Agreement.
(iii) The Stockholders shall provide the information
requested pursuant to SECTION 2.03 to the Company and the Board of Directors
regarding any substitute Third Point Designee permitted under this
SECTION 2.01(C).
(d) While serving on the Board of Directors and any committee
thereof, each Third Point Designee shall be entitled to all the rights and
privileges of the other directors and committee members, including, without
limitation, access to the Company's outside advisors; PROVIDED that each Third
Point Designee shall not be entitled to participate in or observe, and shall
upon the good faith request of the Board of Directors or any such committee
recuse himself or herself from, any meeting or portion thereof at which the
Board of Directors or any such committee is evaluating and/or taking action with
respect to (x) the ownership of Voting Securities specifically by any member of
the Restricted Group, (y) the exercise of any of the Company's rights or
enforcement of any of the obligations of any member of the Restricted Group
under this Stockholders Agreement or (z) any transaction proposed by, or with,
any member of the Restricted Group. The Board of Directors or any such committee
shall be entitled to take such actions as it shall deem reasonably necessary or
appropriate to carry out the provisions of the preceding sentence.
(e) The Stockholders shall no longer be entitled to have the
Third Point Designees serve on the Board of Directors from and after the
Director Termination Date, at
5
NSD\56089.7
which time the Stockholders will cause the Third Point Designees
immediately to resign from the Board of Directors. In furtherance thereof, each
Third Point Designee shall provide, upon election or appointment to the Board of
Directors, an executed resignation effective upon a Director Termination Date.
2.02 SPECIAL COMMITTEE. In the event that the Board of
Directors forms a special committee of the Board of Directors to oversee,
monitor or otherwise facilitate the Strategic Process, the Board of Directors
shall, in connection with the establishment of such a special committee, cause
one or more of the Third Point Designees designated by Third Point to be a
member of such special committee, such that one Third Point Designee shall be
appointed to serve on a special committee consisting of an aggregate of three or
four members of the Board of Directors (counting the Third Point Designee) and
two Third Point Designees shall be appointed to serve on a special committee
consisting of an aggregate five or more members of the Board of Directors
(counting the Third Point Designees); PROVIDED that in no event shall the Third
Point Designees appointed to such special committee constitute a majority of any
such special committee; PROVIDED FURTHER that the Third Point Designees shall
not be entitled to be a member of any committee formed exclusively for the
purpose of evaluating and/or taking action with respect to (x) the ownership of
Voting Securities specifically by any member of the Restricted Group, (y) the
exercise of any of the Company's rights or enforcement of any of the obligations
of any member of the Restricted Group under this Stockholders Agreement or (z)
any transaction proposed by, or with, any member of the Restricted Group.
2.03 INFORMATION ABOUT THIRD POINT DESIGNEES. Third Point
shall promptly provide to the Company, as the Company may from time to time
reasonably request, information regarding the Third Point Designees for purposes
of determining whether the Third Point Designees are Independent Directors or
for inclusion in any form, report, schedule, registration statement, definitive
proxy statement or other documents required to be filed by the Company with the
Commission or any other Governmental or Regulatory Authority.
2.04 BOARD AND COMPANY POLICIES. It shall be a precondition to
the right of the initial Third Point Designees, and their respective successors,
to attend any meeting of the Board of Directors or committee thereof that such
individual shall have agreed, in the same manner as each other member of the
Board of Directors, to abide by the written policies of the Board of Directors
and the committees thereof (including, without limitation, the Code of Business
Conduct and Ethics) and written policies of the Company applicable to members of
the Board of Directors (including, without limitation, the Insider Trading
Policy).
ARTICLE III
VOTING OF SHARES
3.01 VOTING OF SHARES BY THE RESTRICTED GROUP. Until the
Standstill Termination Date, at each meeting of stockholders of the Company held
for the purpose of electing any member of the Board of Directors, the
Stockholders shall cause all Voting Securities beneficially owned by any member
of the Restricted Group to be present at such meeting for purposes of
establishing a quorum and to be voted (x) for the nominees recommended by the
Board of Directors (provided such nominees include the Third Point Designees),
(y) on all other proposals
6
NSD\56089.7
of the Board of Directors and any proposals by other stockholders of the
Company not covered by clause (z) below, as such member of the Restricted Group
determines is appropriate, and (z) in accordance with the recommendation of the
Board of Directors on any proposals of any other stockholder of the Company who
is also proposing one or more nominees for election as director in opposition to
the nominees of the Board of Directors at any such meeting. No later than five
business days prior to each such meeting of stockholders, the Stockholders shall
cause all Voting Securities beneficially owned by any member of the Restricted
Group to be voted in accordance with this SECTION 3.01. No Stockholder shall
revoke or change any vote in connection with any such meeting of stockholders
unless such revocation or change is required or permitted in accordance with the
first sentence of this SECTION 3.01.
ARTICLE IV
STANDSTILL AND OTHER AGREEMENTS
4.01 STANDSTILL. From the date hereof through the later to
occur of (a) June 2, 2006, and (b) the earliest of (i) the Director Termination
Date, (ii) the termination of the Strategic Process by a majority of the Board
of Directors or (iii) the consummation of the transaction effected as a result
of the Strategic Process (the later of (a) and (b) being the "STANDSTILL
TERMINATION DATE"), no member of the Restricted Group will, directly or
indirectly, (i) engage in any "solicitation" of "proxies" (as such terms are
used in the proxy rules promulgated under the Exchange Act, but disregarding the
exclusion in clause (iv) of Rule 14a-1(l)(2) but including any exempt
solicitation pursuant to Rule 14a-2(b)(1) or (2)), submit any proposal
(including nominations of director candidates, except as provided in SECTION
2.01) for consideration at any annual or special meeting of the stockholders of
the Company (including pursuant to Rule 14a-8 promulgated under the Exchange
Act), (ii) form, join or in any way participate in a "group" (as defined in
Section 13(d)(3) of the Exchange Act) with respect to any Equity Securities
which proposes to take any action or enter into any transaction that is
prohibited by this Section, nor will they provide any financing to any such
group for any such purpose, or (iii) engage in any Schedule 13D Transaction or
file any amendment to the Schedule 13D previously filed by the Stockholders with
the Commission indicating that any member of the Restricted Group has a plan or
proposal to engage in, or that it has engaged in, a Schedule 13D Transaction
(other than an amendment filed following the execution and delivery of this
Stockholders Agreement announcing such execution and delivery or subsequent
filings necessitated by the terms of this Agreement and actions by the parties
thereunder); PROVIDED that the foregoing prohibition shall not impair or affect
the exercise by a Third Point Designee of his or her fiduciary duties as a
director of the Company in his or her capacity as such or prohibit filings
believed in good faith, after consultation with counsel, to be required by law
as a consequence thereof; and PROVIDED FURTHER that any such filings shall be
provided to the Company in advance of filing and the Company shall be permitted
a reasonable opportunity to comment thereon (it being understood that such
filings may be required to be filed with the Commission promptly).
4.02 EXPENSES. The Company shall reimburse Third Point and its
affiliates for all out-of-pocket costs and expenses actually incurred by Third
Point and its affiliates directly related to (a) their efforts to induce the
Company to pursue strategic alternatives and cause the Stockholder Meeting to be
called, (b) the preparation and filing of any proxy materials by Third
7
NSD\56089.7
Point and its affiliates, (c) the solicitation of proxies and (d) the
negotiation and entering into of this Stockholders Agreement prior to the date
hereof, including without limitation legal and accounting fees and the fees of
the proxy solicitor retained by Third Point and its affiliates ("EXPENSES");
PROVIDED, that reimbursement of such Expenses shall not exceed in the aggregate
of $475,000; PROVIDED FURTHER, that prior to such reimbursement Third Point and
its affiliates shall provide invoices to document such Expenses. Notwithstanding
the foregoing, fifty percent (50%) of such Expenses shall be reimbursed by the
Company within five (5) business days of receipt by the Company of invoices
referenced in the immediately preceding sentence with the remaining fifty
percent (50%) of such Expenses to be reimbursed by the Company on June 2, 2006;
PROVIDED that the second reimbursement payment hereunder shall only be made if
(A) the Director Termination Date has not occurred prior to June 2, 2006 and (B)
if a definitive document arising out of or related to the Strategic Process has
not been executed by the Company on or before June 2, 2006.
4.03 FIDUCIARY AND OTHER DUTIES. Each Third Point Designee
acknowledges his or her obligations under SECTION 2.04 of this Agreement in
addition to the fiduciary duties and common law duties of trust and
confidentiality under which every member of the Board of Directors of a Delaware
company operates.
4.04 NOTIFICATION OF MEETING AT WHICH ELECTION OF DIRECTORS TO
BE CONSIDERED. The Company shall provide written notice in accordance with
SECTION 7.03 of this Agreement at least seventy five (75) days in advance of a
date set for any meeting of stockholders at which the election of directors is
to be considered following the meeting of stockholders set for January 31, 2006
(or any adjournment or postponement thereof permitted in accordance with the
Stipulated Order and Final Judgment approved by the Delaware Chancery Court, New
Castle County, on November 14, 2005).
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS
Each Stockholder hereby represents and warrants to the Company
as follows:
5.01 AUTHORITY. This Stockholders Agreement has been duly and
validly executed and delivered by each Stockholder and constitutes a legal,
valid and binding obligation of such Stockholder enforceable against such
Stockholder in accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforcement of creditors' rights generally and by general
equitable principles (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
5.02 NO CONFLICTS. The execution and delivery by each
Stockholder of this Stockholders Agreement do not, and the performance by each
Stockholder of such Stockholder's obligations under this Stockholders Agreement
and the consummation of the transactions contemplated hereby will not:
8
NSD\56089.7
(a) conflict with or result in a violation or breach of any
term or provision of any law, statute, rule or regulation or any order, judgment
or decree of any Governmental or Regulatory Authority applicable to such
Stockholder or any of such Stockholder's properties or assets; or
(b) (i) conflict with or result in a violation or breach of,
(ii) constitute (with or without notice or lapse of time or both) a default
under, (iii) require such Stockholder to obtain any consent, approval or action
of, make any filing with or give any notice to any Person as a result or under
the terms of, or (iv) result in the creation or imposition of any Lien upon any
of such Stockholder's properties or assets under, any contract, agreement, plan,
permit or license to which such Stockholder is a party.
5.03 GOVERNMENTAL APPROVALS AND FILINGS. No consent, approval
or action of, filing with or notice to any Governmental or Regulatory Authority
on the part of any Stockholder is required in connection with the execution and
delivery of this Stockholders Agreement, other than any filing with the
Commission required in connection with the execution and/or delivery of this
Stockholders Agreement or the joint press release referred to in Section 7.01.
5.04 THIRD POINT SHARES. Except for the Third Point Shares
listed on SCHEDULE I hereto, the members of the Restricted Group do not
beneficially own any shares of Common Stock.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Stockholders
as follows:
6.01 INCORPORATION. The Company is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware. The Company has the requisite corporate power and authority to
execute and deliver this Stockholders Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby.
6.02 AUTHORITY. The execution and delivery by the Company of
this Stockholders Agreement, and the performance by the Company of its
obligations hereunder, have been duly and validly authorized by the Board of
Directors, no other corporate action on the part of the Company or its
stockholders being necessary. This Stockholders Agreement has been duly and
validly executed and delivered by the Company and constitutes a legal, valid and
binding obligation of the Company in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors' rights
generally and by general equitable principles (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
6.03 NO CONFLICTS. The execution and delivery by the Company
of this Stockholders Agreement do not, and the performance by the Company of its
obligations under
9
NSD\56089.7
this Stockholders Agreement and the consummation of the transactions
contemplated hereby will not:
(a) conflict with or result in a violation or breach of any of
the terms, conditions or provisions of the Certificate of Incorporation or
Bylaws;
(b) conflict with or result in a violation or breach of any
term or provision of any law, statute, rule or regulation or any order, judgment
or decree of any Governmental or Regulatory Authority applicable to the Company
or any of its properties or asset; or
(c) (i) conflict with or result in a violation or breach of,
(ii) constitute (with or without notice or lapse of time or both) a default
under, (iii) require the Company to obtain any consent, approval or action of,
make any filing with or give any notice to any Person as a result or under the
terms of or (iv) result in the creation or imposition of any Lien upon the
Company or any of its properties or assets under, any contract, agreement, plan,
permit or license to which the Company is a party.
6.04 GOVERNMENTAL APPROVALS AND FILINGS. No consent, approval
or action of, filing with or notice to any Governmental or Regulatory Authority
on the part of the Company is required in connection with the execution and
delivery of this Stockholders Agreement, other than any filing with the
Commission required in connection with the execution and/or delivery of this
Stockholders Agreement or the joint press release referred to in Section 7.01.
ARTICLE VII
GENERAL PROVISIONS
7.01 PUBLICITY. The Company and Third Point will provide each
other with reasonable cooperation in connection with the filings with the
Commission required of the Company and the Stockholders in connection with the
execution and delivery of this Stockholders Agreement, and will give the other
an opportunity to review such party's filing before it is submitted to the
Commission. Third Point and the Company will cooperate with each other in the
development and distribution of a joint press release announcing the execution
and delivery of this Stockholders Agreement.
7.02 AMENDMENT AND WAIVER.
(a) This Stockholders Agreement may be amended, supplemented
or modified only by a written instrument duly executed by or on behalf of each
party hereto.
(b) Any term or condition of this Stockholders Agreement may
be waived at any time by the party that is entitled to the benefit thereof, but
no such waiver shall be effective unless set forth in a written instrument duly
executed by or on behalf of the party waiving such term or condition. No waiver
by any party of any term or condition of this Stockholders Agreement, in any one
or more instances, shall be deemed to be or construed as a waiver of the same or
any other term or condition of this Stockholders Agreement on any future
occasion. All
10
NSD\56089.7
remedies, either under this Stockholders Agreement or by law or otherwise
afforded, will be cumulative and not alternative.
7.03 NOTICES.
(a) For all purposes of this Stockholders Agreement, the
Company shall not be required to recognize any notice purportedly delivered by
or on behalf of any Stockholder or any other member of the Restricted Group
unless such notice is delivered to the Company by or on behalf of Third Point.
(b) All notices, requests and other communications hereunder
must be in writing and will be deemed to have been duly given only if delivered
personally or by facsimile transmission or by reputable overnight courier
(postage prepaid) to the parties at the following addresses or facsimile
numbers:
If to any Stockholder or other member of the Restricted Group,
to:
Third Point LLC
390 Park Avenue
New York, New York 10022
Facsimile No.: (212) 224-7401
Attn: Dan Loeb
with a copy to:
Willkie Farr & Gallagher LLP
787 Seventh Avenue
New York, New York 10019
Facsimile No.: (212) 728-9267
Attn: Michael A. Schwartz, Esq.
If to the Company, to:
Ligand Pharmaceuticals Incorporated
10275 Science Center Drive
San Diego, California 92121
Facsimile No.: (858) 550-1825
Attn: General Counsel
11
NSD\56089.7
with a copy to:
Latham & Watkins LLP
12636 High Bluff Drive
San Diego, California 92130
Facsimile No.: (858) 523-5450
Attn: Mark Gerstein, Esq.
Faye H. Russell, Esq.
All such notices, requests and other communications will (i) if delivered
personally to the address as provided in this Section, be deemed given upon
delivery, (ii) if delivered by facsimile transmission to the facsimile number as
provided in this Section, be deemed given upon receipt, and (iii) if delivered
by overnight courier in the manner described above to the address as provided in
this Section, be deemed given upon receipt (in each case regardless of whether
such notice, request or other communication is received by any other person to
whom a copy of such notice, request or other communication is to be delivered
pursuant to this Section). Any party from time to time may change its address,
facsimile number or other information for the purpose of notices to that party
by giving notice specifying such change to the other parties hereto.
7.04 ENTIRE AGREEMENT. This Stockholders Agreement and the
Schedule hereto supersede all prior discussions and agreements among the parties
hereto with respect to the subject matter hereof, and contains the sole and
entire agreement among the parties hereto with respect to the subject matter
hereof.
7.05 NO THIRD PARTY BENEFICIARY. The terms and provisions of
this Stockholders Agreement are intended solely for the benefit of each party
hereto and the other members of the Restricted Group, and it is not the
intention of the parties to confer third-party beneficiary rights upon any other
Person.
7.06 NO ASSIGNMENT; BINDING EFFECT. Neither this Stockholders
Agreement nor any right, interest or obligation hereunder may be assigned by any
parties hereto without the prior written consent of the other party hereto and
any attempt to do so will be void. Subject to the preceding sentence, this
Stockholders Agreement is binding upon, inures to the benefit of and is
enforceable by the parties hereto and their respective successors and assigns
and legal representatives.
7.07 SPECIFIC PERFORMANCE. The parties acknowledge that money
damages are not an adequate remedy for violations of any provision of this
Stockholders Agreement and that any party may, in such party's sole discretion,
apply to a court of competent jurisdiction for specific performance for
injunctive or such other relief as such court may deem just and proper in order
to enforce any such provision or prevent any violation hereof and, to the extent
permitted by applicable law, each party waives any objection to the imposition
of such relief.
7.08 HEADINGS. The headings used in this Stockholders
Agreement have been inserted for convenience of reference only and do not define
or limit the provisions hereof.
12
NSD\56089.7
7.09 INVALID PROVISIONS. If any provision of this Stockholders
Agreement is held to be illegal, invalid or unenforceable under any present or
future law, and if the intended rights of any party hereto under this
Stockholders Agreement will not be forfeited in any material respect as a result
thereof, (i) such provision will be fully severable, (ii) this Stockholders
Agreement will be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a part hereof and (iii) the
remaining provisions of this Stockholders Agreement will remain in full force
and effect and will not be affected by the illegal, invalid or unenforceable
provision or by its severance herefrom.
7.10 GOVERNING LAW. This Stockholders Agreement shall be
governed by and construed in accordance with the laws of the State of Delaware
applicable to a contract executed and performed in such State, without giving
effect to the conflicts of laws principles thereof.
7.11 CONSENT TO JURISDICTION AND SERVICE OF PROCESS. Each
party hereby irrevocably submits to the exclusive jurisdiction of the United
States District Court for the District of Delaware or any court of the State of
Delaware in any action, suit or proceeding arising in connection with this
Stockholders Agreement, agrees that any such action, suit or proceeding shall be
brought only in such court (and waives any objection based on FORUM NON
CONVENIENS or any other objection to venue therein to the extent permitted by
law), and agrees to delivery of service of process by any of the methods by
which notices may be given pursuant to SECTION 7.03, with such service being
deemed given as provided in such Section; PROVIDED, HOWEVER, that such consent
to jurisdiction is solely for the purpose referred to in this SECTION 7.11 and
shall not be deemed to be a general submission to the jurisdiction of said
courts or in the State of Delaware other than for such purpose. Nothing herein
shall affect the right of any party to serve process in any other manner
permitted by law or to commence legal proceedings or otherwise proceed against
the other in any other jurisdiction.
7.12 COUNTERPARTS. This Stockholders Agreement may be executed
in any number of counterparts, each of which will be deemed an original, but all
of which together will constitute one and the same instrument.
13
NSD\56089.7
IN WITNESS WHEREOF, each party hereto has signed this
Stockholders Agreement, or caused this Stockholders Agreement to be signed on
its behalf, as of the date first above written.
LIGAND PHARMACEUTICALS INCORPORATED
By: /s/ David E. Robinson
Name: David E. Robinson
Title: Chairman, President and Chief Executive
Officer
THIRD POINT LLC
By: /s/ Daniel S. Loeb
Name: Daniel S. Loeb
Title:
THIRD POINT OFFSHORE FUND, LTD.
By: /s/ Daniel S. Loeb
Name: Daniel S. Loeb
Title:
THIRD POINT PARTNERS LP
By: /s/ Daniel S. Loeb
Name: Daniel S. Loeb
Title:
THIRD POINT ULTRA LTD.
By: /s/ Daniel S. Loeb
Name: Daniel S. Loeb
Title:
THIRD POINT PARTNERS QUALIFIED LP
By: /s/ Daniel S. Loeb
Name: Daniel S. Loeb
Title:
NSD\56089.7
SCHEDULE I
SHARES OF COMMON STOCK BENEFICIALLY OWNED BY THE STOCKHOLDERS
STOCKHOLDER NUMBER
Daniel S. Loeb* 7,375,000
Third Point LLC* 7,375,000
Third Point Offshore Fund, Ltd. 4,725,800
Third Point Partners LP 940,100
Third Point Ultra Ltd. 777,400
Lyxor/Third Point Fund Ltd. 463,300
Third Point Partners Qualified LP 468,400
- ------------------
* The indicated Stockholders beneficially own the shares indicated by virtue of
their control of the other Stockholders.