EXHIBIT 2.1
EXECUTION COPY
AMENDMENT NUMBER 1 TO
PURCHASE AGREEMENT, CONTRACT SALES FORCE AGREEMENT AND
CONFIDENTIALITY AGREEMENT
THIS AMENDMENT, (the "AMENDMENT") effective as of November 30, 2006
(the "EFFECTIVE DATE OF THIS AMENDMENT"), is made by and between LIGAND
PHARMACEUTICALS INCORPORATED, a Delaware corporation, and all of its successors
and assigns (the "SELLER"), KING PHARMACEUTICALS, INC., a Tennessee corporation
("KING") and KING PHARMACEUTICALS RESEARCH AND DEVELOPMENT, INC., a Delaware
corporation and wholly owned subsidiary of King ("KING R & D; King R & D
together with King, the "PURCHASER"). Each of Seller and Purchaser is referred
to herein, individually, as a "PARTY" and, collectively, as the "Parties."
WHEREAS, the Seller and Purchaser entered into that certain Purchase
Agreement, dated as of September 6, 2006 (the "PURCHASE AGREEMENT");
WHEREAS, the Seller and King entered into that certain Contract Sales
Force Agreement, dated as of September 6, 2006 (the "SALES FORCE AGREEMENT");
WHEREAS, the Seller and King entered into that certain Confidentiality
Agreement dated as of August 15, 2006 (the "CONFIDENTIALITY AGREEMENT")
(together with the Purchase Agreement, and the Sales Force Agreement, the
"AGREEMENTS");
WHEREAS, the Seller and Purchaser desire to amend the Purchase
Agreement, as described in this Amendment; and
WHEREAS, the Seller and King desire to amend each of the Sales Force
Agreement and the Confidentiality Agreement, as described in this Amendment.
NOW, THEREFORE, the Parties hereby agree as follows:
1. The terms in this Amendment with initial letters capitalized shall
have the meanings set forth in this Amendment and, if not defined in this
Amendment, shall have the meaning set forth in the applicable Agreement.
2. SECTION 9.1(A) of the Purchase Agreement is hereby amended to insert
the following prior to the final sentence:
"Effective as of November 30, 2006, Purchaser may make offers
of employment to any of the Seller's Regional Business
Managers (the "RBMS") and such other of the Seller employees
as Purchaser shall require and as the Seller shall from time
to time agree (the "OTHER EMPLOYEES"), which offers shall be
contingent upon the Closing. The RBMs and Other Employees
shall not be counted for purposes of calculating severance
reimbursement to the Seller under SECTION 9.1(C) hereof. The
Seller shall permit all employees receiving offers under this
Agreement to attend Purchaser's sales/training meetings as
Purchaser may specify and as the Seller may from time to time
agree, at Purchaser's expense."
3. The final sentence of SECTION 9.1(A) shall be amended to read as
follows:
"The Product Employees, RBMs and Other Employees who become
employed by Purchaser are herein referred to as the "HIRED
EMPLOYEES"."
4. SECTION 9.1(B) of the Purchase Agreement is hereby amended to insert
the following after the final sentence:
"Seller shall be responsible for a pro-rata portion of any
sales incentive bonus earned by its employees per its bonus
plans up to the date of termination from Seller's employ.
Purchaser shall thereafter be responsible to compensate all
Product Employees who become employed by Purchaser in
accordance with Purchaser's compensation policies."
5. The first sentence of SECTION 9.1(C) of the Purchase Agreement shall
be amended to read as follows:
"All Product Employees on SCHEDULE 9.1(A)(1) or RBMs who do
not receive an employment offer from Purchaser as of December
6, 2006, may, at Seller's sole option, remain employees of
Seller or be terminated from Seller's employment at any time
after December 14, 2006."
6. SCHEDULE 9.1(A)(2) of the Purchase Agreement shall be amended to
read as follows:
"In exchange for a release of claims in accordance with
paragraph 9.2(c), each Product Employee not offered employment
by Purchaser, will be offered severance as follows: Each
severed Product Employee shall receive two (2) months regular
salary plus one (1) week salary for each year of service. For
clarity, a year of service shall be deemed to accrue on the
one hundred eighty third (183rd) day after the relevant start
date anniversary."
7. SECTION 11.1(A)(II) of the Purchase Agreement shall be amended to
replace "December 31, 2006" with "February 28, 2007" as the "Outside Date" of
the Purchase Agreement.
8. SECTION 12.3 of the Sales Force Agreement shall be amended to
replace "thirty (30) days" with "sixty (60) days".
9. PARAGRAPH 1 of the Confidentiality Agreement shall be amended to add
the following final sentence:
"Upon Closing (as such term is defined in that certain
Purchase Agreement by and among Ligand Pharmaceuticals
Incorporated, King Pharmaceuticals, Inc. and King
Pharmaceuticals Research and Development, Inc. and dated as of
September 6, 2006 (the "PURCHASE AGREEMENT"), Proprietary
Information of King received by Ligand as the Receiving Party
hereunder shall also be deemed to include all Product Records
(again, as such term is defined in the Purchase Agreement),
and the exception to the confidentiality obligations set forth
below in Paragraph 2(b) shall not apply to such Product
Records."
10. This Amendment shall not amend or modify the covenants, terms,
conditions, rights and obligations of the Parties under the Agreements, except
as specifically set forth herein. The Agreements shall continue in full force
and effect in accordance with their terms as amended by this Amendment.
* * *
[signature page follows]
IN WITNESS WHEREOF, the Parties have executed this Amendment in
multiple counterparts.
LIGAND PHARMACEUTICALS KING PHARMACEUTICALS, INC.
INCORPORATED
By: /s/ Warner R. Broaddus By: /s/ James W. Elrod
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Title: Vice President, General Counsel Title: General Counsel
& Secretary & Secretary
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KING PHARMACEUTICALS RESEARCH
AND DEVELOPMENT, INC.
By: /s/ James W. Elrod
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Title: Secretary
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