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1 Case :-cv-0-doc-an Document Filed 0/0/ Page of Page ID #: 0 Mark Holscher (SBN mark.holscher@kirkland.com Michael Shipley (SBN Michael.shipley@kirkland.com KIRKLAND & ELLIS LLP South Hope Street Los Angeles, California 00 Telephone: ( 0-00 Facsimile: ( 0-00 Jay P. Lefkowitz (pro hac vice to be filed John P. Del Monaco (pro hac vice to be filed Danielle R. Sassoon (pro hac vice to be filed KIRKLAND & ELLIS LLP 0 Lexington Avenue New York, New York 00- Telephone: ( -00 Facsimile: ( -00 Attorneys for Defendants Pershing Square Capital Management, L.P., PS Management GP, LLC, PS Fund, LLC, and William A. Ackman [Additional counsel on signature page] ALLERGAN, INC., et al., v. UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA SOUTHERN DIVISION SANTA ANA Plaintiffs, VALEANT PHARMACEUTICALS INTERNATIONAL, INC. et al., Defendants. Case No.: :-cv-0-doc-(anx Hon. David O. Carter Courtroom: D DEFENDANTS JOINT OPPOSITION TO PLAINTIFFS EX PARTE APPLICATION FOR

2 Case :-cv-0-doc-an Document Filed 0/0/ Page of Page ID #: 0 Defendants Valeant Pharmaceuticals International, Inc., Valeant Pharmaceuticals International, AGMS, Inc., Pershing Square Capital Management, L.P., PS Management GP, LLC, PS Fund, LLC, and William A. Ackman (together, Defendants respectfully submit this opposition to the Ex Parte Application for Expedited Proceedings filed by Plaintiffs Allergan, Inc. ( Allergan and Karah H. Parschauer (together with Allergan, Plaintiffs. INTRODUCTION Allergan, a company engaged in an acquisition battle with Defendants, filed this strategic lawsuit to thwart its own shareholders from conducting a special meeting to vote, if they wish, on the removal of a majority of its directors. This lawsuit, and the unusual ex parte expedition request that accompanied it, are simply Allergan s latest tactic to cast doubt on the effectiveness and validity of shareholder special meeting requests, which Defendants are presently accumulating and which are necessary to call a special meeting under Allergan s Bylaws. As a prominent independent proxy advisory firm recently advised its Allergan shareholder clients, Allergan s persistent obstructive behavior is more indicative of a board concerned with entrenching its position than seeking to enhance shareholder value. (See Declaration of Michael Shipley ( Shipley Decl., Exhibit A, August, Glass Lewis Report. And just today, another independent proxy firm succinctly concluded that there appear to be serious governance issues at Allergan. (Shipley Decl., Exhibit N, August, ISS Proxy Advisory Services Report. That this lawsuit is being pursued to squelch the franchise of Allergan shareholders and protect the Board from removal is laid bare by Plaintiffs own conduct. The allegations underlying Plaintiffs claims have been known to Plaintiffs for months, yet they waited to file this lawsuit until they believed Defendants were on the verge of submitting shareholders special meeting requests. Plaintiffs here claim that Defendants engaged in insider trading in violation of Rule e-, even though --

3 Case :-cv-0-doc-an Document Filed 0/0/ Page of Page ID #: 0 Allergan and its litigation counsel took the very opposite position until now on the basis of the very same facts. Indeed, prior to filing this lawsuit, when Allergan was lobbying shareholders against a special meeting, it publicly maintained in filings with the Securities and Exchange Commission (under a statutory duty to be truthful and accurate that Pershing Square is a co-bidder with Valeant in its efforts to acquire Allergan a fact that completely negates any possible Rule e- issue. (See Shipley Decl., Exhibit B, June, Allergan Preliminary Revocation Solicitation. Likewise, Allergan s lawyers published a written report observing that the transaction was effectively structured to comply with the federal securities laws. (See Shipley Decl., Exhibit C, April, Wachtell, Lipton, Rosen & Katz Memorandum. Plaintiffs also allege that Defendants violated the proxy solicitation rules in connection with their efforts to call a special meeting. But that supposedly unlawful conduct has been underway for two months and Allergan has never sought to enjoin it. While the Complaint says that Plaintiffs seek preliminary injunctive relief, they have not moved the Court for such relief and apparently do not intend to do so (presumably because their delay alone would defeat any claim for preliminary relief. Rather, based on a supposed emergency of their own making, Plaintiffs move on an ex parte basis for an expedited case schedule that will culminate in a trial 0 days after Defendants submit their special meeting requests (i.e., after the fruits of the supposedly unlawful conduct are delivered. Plaintiffs profess a desire not to unnecessarily delay the special meeting and contend that [p]rompt resolution of Plaintiffs claims is necessary so that By their terms, the trading restrictions in Rule e- do not extend to the person making the tender offer (i.e., the offering person or any other person acting on behalf of, or as the agent of, the offering person. C.F.R. 0.e-. As cobidders, Valeant and Pershing Square are each an offering person under Rule e-. --

4 Case :-cv-0-doc-an Document Filed 0/0/ Page of Page ID #: 0 Allergan s board will have available as much information as possible in determining whether to call the special meeting, (Pls. Ex Parte Mot. at, and to evaluate the merits of Defendants special meeting request, (id. at 0. However, if the purpose for expedition is to avoid delay of the special meeting, the 0-day proposed schedule runs entirely counter to that objective. The Allergan Board is required to evaluate the special meeting request promptly after receiving it, not 0 days later and only ten days before the Board s deadline for actually conducting the special meeting. The ex parte motion reveals that Allergan is intent on manufacturing grounds to reject a special meeting request, or at the very least to delay honoring a proper request for one. Nothing in Plaintiffs submission justifies their request for a made-for-delay schedule, let alone granting one on an ex parte basis. To receive ex parte relief, a party must establish[] that [it] is without fault in creating the crisis that requires ex parte relief, or that the crisis occurred as a result of excusable neglect. Mission Power Eng g Co. v. Cont l Cas. Co., F. Supp., (C.D. Cal.. But To be clear, Defendants dispute that this lawsuit should have any bearing on the application of Allergan s Charter and Bylaws, or the validity of any special meeting request submitted by Defendants. By any measure, this action simply seeks to avoid the Delaware forum, and afford Allergan a backup in the event that its effort to stall Defendants in Delaware state court fails. But compliance with the Allergan corporate documents and the required timing of either the Board calling the meeting or the date of the meeting itself are matters of Delaware law. If necessary, these issues will be presented for prompt resolution to the Delaware Court of Chancery at the appropriate time. Allergan seems to agree. Concurrent with filing this lawsuit, Plaintiffs wrote to the Delaware Court of Chancery about this action, even though no litigation between the parties is currently pending there. Plaintiffs stated that Allergan is seeking speedy redress for federal law violations in federal court. We wish to make clear our position, however, that any Delaware law disputes regarding this situation should be adjudicated in [the Court of Chancery] and not in the California action or any other court. Should any such disputes arise, Allergan will seek to bring them to [the Court of Chancery] in an orderly and timely manner. (Shipley Decl., Exhibit D, August, letter, at - (emphasis added. --

5 Case :-cv-0-doc-an Document Filed 0/0/ Page of Page ID #: 0 Plaintiffs have shown just the opposite: that they expect their tactical and deliberate delay to be rewarded, despite filing a complaint whose allegations rest entirely on events known to Allergan and the public for months. The proper procedural course for a party seeking emergency relief is to file a preliminary injunction but Plaintiffs have not moved for one. Defendants welcome such a motion and are prepared to respond to it on an expedited basis. BACKGROUND Plaintiffs filed this lawsuit on August,, but their allegations date back to months -old events that Plaintiffs have known about for almost as long. Allergan alleges that PS Fund (an investment joint venture created by Valeant and Pershing Square was not an offering person and bought Allergan shares after Valeant had already taken substantial steps toward a tender offer in violation of the Securities Exchange Act of. The facts tell a different story. Valeant and Pershing Square (a acted as co-bidders (as Allergan itself has touted repeatedly in SEC filings under an obligation to speak truthfully and completely and (b sought vigorously to negotiate only a consensual merger with Allergan. (See Shipley Decl., Ex. B (Allergan: Pershing Square is a co-bidder with Valeant in its efforts to acquire Allergan. These unavoidable facts sink Allergan s insider trading theory. Indeed, Valeant and Pershing Square agreed in a publicly disclosed contract in February not to pursue a tender offer without their mutual consent. Together they decided to pursue a tender offer only much later, after Allergan s Board summarily rebuffed multiple premium merger offers and adopted a scorched-earth defense, and well after PS Fund purchased its Allergan shares. In any event, PS Fund disclosed its acquisitions of Allergan shares on April, (Shipley Decl., Exhibit E, Schedule D, and on April,, Valeant Defendants vigorously dispute the allegations in the Complaint and will respond to them in their totality at the appropriate time. --

6 Case :-cv-0-doc-an Document Filed 0/0/ Page of Page ID #: 0 announced its first offer to acquire Allergan, with the help of Pershing Square, by way of a merger (Shipley Decl., Exhibit F, April, Valeant Press Release. These public announcements were made over three months ago. But Plaintiffs did not then sue Pershing Square and Valeant. Instead, only days later, Wachtell, Lipton, Rosen & Katz (prior to being retained by Allergan publicly acknowledged that Pershing Square and Valeant did not violate the federal securities laws, but had legally sidestep[ped] Rule e- which outlaws insider-trading in connection with a tender offer, by styling themselves as co-bidders and not (yet proceeding towards a tender offer. Rather than suggest that Defendants merger offer ran afoul of current law, Wachtell urged the SEC to change the law to bring its early-warning rules into the st century. (Shipley Decl., Ex. C. Allergan responded to Valeant s offer by moving aggressively to block any transaction. Hours after Valeant s first merger offer, Allergan s Board, without shareholder approval, adopted a Rights Agreement or so-called poison pill, which is triggered if any shareholder becomes the Beneficial Owner of 0 percent or more of the outstanding Company shares. (Shipley Decl., Exhibit G, April, Allergan Form K. The Board next rejected Valeant s offer without negotiating with Valeant. In May of, Valeant twice revised and improved its merger offer to represent a percent premium to Allergan s unaffected stock price (i.e., prior to the disclosure of the Valeant deal, but Allergan again refused to negotiate. (Shipley Decl., Exhibit H, May, Allergan Form K. Faced with the Board s intransigence, Valeant and Pershing Square made the decision to shift gears. First, Pershing Square decided to appeal to Allergan s stockholders directly by beginning the process of calling a special meeting. Thus, on June,, Pershing Square filed a preliminary solicitation statement on Schedule A to solicit the percent of Allergan s outstanding shares required under the Charter to call a special meeting. (Shipley Decl., Exhibit I. Among other things, Pershing Square sought to --

7 Case :-cv-0-doc-an Document Filed 0/0/ Page of Page ID #: 0 call a special meeting to remove six of the nine members of the Allergan Board and to request that the Board promptly engage in good faith discussions with Valeant. (Id. Allergan misrepresents references by a Valeant executive to a potential proxy contest as relevant to Rule e- (Compl. 0, but this proxy solicitation and any references to it have nothing to do with the tender offer or Rule e-. Second, following upon Pershing Square s proxy solicitation, Valeant commenced an Exchange Offer on June,. (Shipley Decl., Exhibit J, June, Valeant Press Release. At this point, too, Allergan still did not sue or falsely claim, as it does here, that Valeant s plan had been a tender offer all along. Allergan instead responded by recommending that Allergan stockholders not tender their shares, and telling its shareholders that Valeant and Pershing Square were co-bidders and therefore outside the proscriptions of Rule e-. (Shipley Decl., Exhibit K, June, Allergan Schedule D-. The tender recommendation was a formality; the Exchange Offer cannot be closed because Allergan has left its poison pill in place. Allergan has submitted to this Court that it is committed to the stockholder franchise and does not want unnecessarily to delay the special meeting but its actions to date suggest the opposite. This lawsuit is only the latest of Allergan s attempts to prevent or delay a special meeting. To begin, when shareholders voted to include a special meeting right in the Charter, the Board unilaterally adopted a number of procedural and information requirements in their Bylaws designed to frustrate if not eviscerate that right. As shareholders have sought to comply with these onerous Bylaws a process that has taken months Allergan has actively discouraged shareholders from submitting special meeting requests, which seek nothing other than to schedule a shareholder meeting at which shareholders can express their views. (Shipley Decl., Exhibit B. Allergan fomented concern that efforts to obtain the required percent shareholder threshold for calling a special meeting might trigger the poison pill and severely dilute the value of stock owned by shareholders wishing --

8 Case :-cv-0-doc-an Document Filed 0/0/ Page of Page ID #:0 0 to join in seeking a special meeting. Pershing Square was forced to litigate that issue in the Delaware Court of Chancery a fact that Allergan s Complaint fails to mention with Allergan ultimately capitulating and agreeing to a stipulated order that allowed Plaintiff s efforts to call a special meeting to proceed. (Shipley Decl., Exhibit L, June, Stipulation and Order. These activities speak for themselves. As the independent shareholder advisory firm Glass Lewis & Co. found just this week, Allergan has engaged in obstructive behavior more indicative of a board concerned with entrenching its position than seeking to enhance shareholder value. (Shipley Decl., Exhibit A, August, Glass Lewis Report. Likewise, earlier today, ISS Proxy Advisory Services surveyed recent events and concluded: there is little credible reason to believe the Allergan board has in any meaningful way struck an appropriate balance between the ability of shareholders to exercise their governance rights and the risk some shareholder might somehow abuse those rights. (Shipley Decl., Exhibit N. Indeed, Allergan has spent more than $0 million in ten weeks to defend against the potential acquisition (Shipley Decl., Exhibit M, Allergan Form 0-Q, dated Aug.,, while telling its shareholders that one of the reasons it is resisting the special meeting is to avoid incurring additional financial costs. So why did Allergan bring suit now, months after PS Fund disclosed its stake in Allergan and months into a live, and now hostile, takeover battle? The answer is in Allergan s own submission for ex parte relief. Allegan evidently has concluded that absent a successfully-obstructionist suit, shareholders will soon call a special meeting at which they can decide for themselves whether to remove a majority of the directors. Allergan would have this Court believe that the special meeting cannot proceed, or even be called, without resolution of this suit. (Pls. Ex Parte Mot. at. That is not so. Allergan s transparent attempt to delay the special meeting by way of this eleventh-hour suit belies any lip service to the stockholder franchise or a desire not --

9 Case :-cv-0-doc-an Document Filed 0/0/ Page of Page ID #: 0 to unnecessarily delay the special meeting. Id. ARGUMENT Ex parte motions are rarely justified, and Plaintiffs have failed to offer a necessary justification here. Mission Power, F. Supp. at 0; see also In re Intermagnetics Am., Inc., 0 B.R., (C.D. Cal.. [E]x parte applications are solely for extraordinary relief that could not have been sought by regularly noticed motion. Robertson v. FedEx Nat. Ltl, Inc., CV 0-0 DSF (FFMx, 0 WL 000, at * n. (C.D. Cal. Jan., 0. In order to be permitted to bypass[ ] the regular noticed motion procedure the moving party must submit evidence that the moving party s cause will be irreparably prejudiced if the underlying motion is heard according to regular noticed motion procedures. Mission Power, F. Supp. at. Further, the moving party must also establish[] that [it] is without fault in creating the crisis that requires ex parte relief, or that the crisis occurred as a result of excusable neglect. Id. Plaintiffs have not and cannot meet that burden here for the simple reason that any urgency is of their own making; they intentionally waited to bring this lawsuit until a tactically advantageous time. Allergan alleges that Valeant and Pershing Square violated the insider trading rules with purchases of Allergan securities that were disclosed in April, and then made false or misleading statements in disclosures publicly filed in June. If these claims had any merit and, plainly, they do not Allergan could have brought these claims in June, if not earlier. Allergan s ex parte application provides no justification for its delay, nor does it explain why Allergan should be permitted to bypass[] the regular noticed motion procedure in order to go to the head of the line in front of all other litigants and receive special treatment. Id. at. This type of gamesmanship abuses the ex parte application process and is precisely the type of inherently unfair motion that this Court has historically denied. Id. at 0; see also Winterbower v. Wells Fargo Bank, N.A., SA CV -00-DOC, --

10 Case :-cv-0-doc-an Document Filed 0/0/ Page 0 of Page ID #: 0 WL, * (C.D. Cal. Mar., (denying ex parte motion where moving party chose to delay. Beyond its threshold legal defect, Plaintiffs application seeks a preliminary injunction schedule without the burden of filing a motion for a preliminary injunction and satisfying that weighty standard. But Plaintiffs have offered no valid reason to deviate from the proper procedural course under the Federal Rules, which would require Plaintiffs to seek a preliminary injunction if they are truly interested in expedited relief. As noted, Defendants are prepared to respond to such a motion on an expedited basis. But, in all events, Defendants are prepared to prove the absence of merit to this case under any procedure or schedule convenient for the Court. That includes any schedule Allergan dubiously asserts is essential to meet its supposed corporate governance goals, even though its proposed schedule in no way does so. Among other things, Defendants are willing to file an Answer, address the infirmities in the Complaint via a motion for judgment on the pleadings under Rule (c, and allow reasonable discovery to proceed on an expedited basis in advance of a hearing scheduled on a date convenient for the Court. Ultimately, however, if the Court disagrees, Defendants are amenable to a schedule set by the Court that results in an expeditious resolution of this matter. --

11 Case :-cv-0-doc-an Document Filed 0/0/ Page of Page ID #: 0 Dated: August, Respectfully submitted, KIRKLAND & ELLIS LLP By: /s/ Michael J. Shipley Mark Holscher (SBN Michael Shipley (SBN KIRKLAND & ELLIS LLP South Figueroa Street Los Angeles, California Telephone: ( 0-00 Facsimile: ( mark.holscher@kirkland.com michael.shipley@kirkland.com Jay P. Lefkowitz (pro hac vice to be filed John P. Del Monaco (pro hac vice to be filed Danielle R. Sassoon (pro hac vice to be filed KIRKLAND & ELLIS LLP 0 Lexington Avenue New York, New York 00- Telephone: ( -00 Facsimile: ( -00 Attorneys for Pershing Square Capital Management, L.P., PS Management, GP, LLC, PS Fund, LLC, and William A. Ackman -0-

12 Case :-cv-0-doc-an Document Filed 0/0/ Page of Page ID #: 0 Dated: August, SULLIVAN & CROMWELL LLP By: /s/ Robert Sacks Robert A. Sacks (SBN 0 sacksr@sullcrom.com Edward E. Johnson (SBN 0 johnsonee@sullcrom.com SULLIVAN & CROMWELL LLP Century Park East, Suite 00 Los Angeles, California 00- Tel: (0-00 Fax: (0-00 Brian T. Frawley (pro hac vice to be filed frawleyb@sullcrom.com SULLIVAN & CROMWELL LLP Broad Street New York, New York 000- Tel.: ( -000 Fax: ( - Attorneys for Defendants Valeant Pharmaceuticals International, Inc., Valeant Pharmaceuticals International and AGMS, Inc. --

13 Case :-cv-0-doc-an Document Filed 0/0/ Page of Page ID #: 0 SIGNATURE CERTIFICATION Pursuant to L.R. -..(a((i, I hereby attest that all other signatories listed, and on whose behalf the filing is submitted, concur in the filing s content and have authorized this filing. Dated: August, KIRKLAND & ELLIS LLP By: /s/ Michael J. Shipley Michael J. Shipley Attorneys for Pershing Square Capital Management, L.P., PS Management, GP, LLC, PS Fund, LLC, and William A. Ackman --

14 Case :-cv-0-doc-an Document Filed 0/0/ Page of Page ID #: 0 CERTIFICATE OF SERVICE I, hereby certify that on August,, I electronically filed the foregoing document with the Clerk of the Court using the CM/ECF system, which will automatically send an notification of such filing to the attorneys of record who are registered CM/ECF users. Executed on August,, at Los Angeles, California. KIRKLAND & ELLIS LLP By: /s/ Michael J. Shipley Michael J. Shipley Attorneys for Pershing Square Capital Management, L.P., PS Management, GP, LLC, PS Fund, LLC, and William A. Ackman --