EXHIBIT 1.1
FORM OF UNDERWRITING AGREEMENT
6,000,000 Shares
TULARIK INC.
Common Stock
UNDERWRITING AGREEMENT
----------------------
March __, 2000
Xxxxxx Brothers Inc.
X.X. Xxxxxx Securities Inc.
Chase Securities Inc.
Xxxxxx Xxxxxx Partners LLC
Warburg Dillon Read LLC
As Representatives of the several
Underwriters named in Schedule 1,
c/x Xxxxxx Brothers Inc.
Three World Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Tularik Inc., a Delaware corporation (the "Company"), and certain
stockholders of the Company named in Schedule 2 hereto (the "Selling
Stockholders"), propose to sell an aggregate of 6,000,000 shares (the "Firm
Stock") of the Company's Common Stock, par value $0.001 per share (the "Common
Stock"). Of the 6,000,000 shares of the Firm Stock, 4,500,000 are being sold by
the Company and 1,500,000 by the Selling Stockholders. In addition, the Company
and the Selling Stockholders propose to grant to the Underwriters named in
Schedule 1 hereto (the "Underwriters") an option to purchase up to an aggregate
of 900,000 additional shares of the Common Stock on the terms and for the
purposes set forth in Section 3 (the "Option Stock"). The Firm Stock and the
Option Stock, if purchased, are hereinafter collectively called the "Stock."
This is to confirm the agreement concerning the purchase of the Stock from the
Company and the Selling Stockholders by the Underwriters.
1. Representations, Warranties and Agreements of the Company. The Company
represents, warrants and agrees that:
(a) A registration statement on Form S-1 with respect to the Stock
has (i) been prepared by the Company in conformity with the requirements of
the United States Securities Act of 1933, as amended (the "Securities
Act"), and the rules and regulations (the "Rules and Regulations") of the
United States Securities and Exchange Commission (the "Commission")
thereunder, (ii) been filed with the Commission under the Securities Act
and (iii) become effective under the Securities
Act. Copies of such registration statement have been delivered by the
Company to you as the representatives (the "Representatives") of the
Underwriters. As used in this Agreement, "Effective Time" means the date
and the time as of which such registration statement, or the most recent
post-effective amendment thereto, if any, was declared effective by the
Commission; "Effective Date" means the date of the Effective Time;
"Preliminary Prospectus" means each prospectus included in such
registration statement, or amendments thereof, before it became effective
under the Securities Act and any prospectus filed with the Commission by
the Company with the consent of the Representatives pursuant to Rule 424(a)
of the Rules and Regulations; "Registration Statement" means such
registration statement, as amended at the Effective Time, including all
information contained in the final prospectus filed with the Commission
pursuant to Rule 424(b) of the Rules and Regulations in accordance with
Section 5 hereof and deemed to be a part of the registration statement as
of the Effective Time pursuant to paragraph (b) of Rule 430A of the Rules
and Regulations, and including any registration statement registering
additional shares of Common Stock filed with the Commission pursuant to
Rule 462(b) of the Rules and Regulations; and "Prospectus" means such final
prospectus, as first filed with the Commission pursuant to paragraph (1) or
(4) of Rule 424(b) of the Rules and Regulations. The Commission has not
issued any order preventing or suspending the use of any Preliminary
Prospectus.
(b) The Registration Statement conforms, and the Prospectus and
any further amendments or supplements to the Registration Statement or the
Prospectus will, when they become effective or are filed with the
Commission, as the case may be, conform in all material respects to the
requirements of the Securities Act and the Rules and Regulations and do not
and will not, as of the applicable effective date (as to the Registration
Statement and any amendment thereto) and as of the applicable filing date
(as to the Prospectus and any amendment or supplement thereto) contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading; provided that no representation or warranty is made as to
information contained in or omitted from the Registration Statement or the
Prospectus or any further amendments or supplements to the Registration
Statement or Prospectus, in reliance upon and in conformity with written
information furnished to the Company through the Representatives by or on
behalf of any Underwriter specifically for inclusion therein.
(c) The Company and Amplicon Corp., a Delaware corporation (the
"Subsidiary"), have been duly incorporated and are validly existing as
corporations in good standing under the laws of their respective
jurisdictions of incorporation, are duly qualified to do business and are
in good standing as foreign corporations in each jurisdiction in which
their respective ownership or lease of property or the conduct of their
respective businesses requires such qualification, except where the failure
to be so qualified would not have a material adverse effect on the
business, financial condition or results of operations of the Company, and
have all power and
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authority necessary to own or hold their respective properties and to
conduct business as described in the Registration Statement and Prospectus;
and the Subsidiary of the Company is not a "significant subsidiary," as
such term is defined in Rule 405 of the Rules and Regulations. The Company
has no subsidiaries (as defined in Section 17), other than the Subsidiary.
(d) The Company has an authorized capitalization as set forth in
the Prospectus, and all of the issued shares of capital stock of the
Company have been duly and validly authorized and issued, are fully paid
and non-assessable and conform to the description thereof contained in the
Prospectus; and all of the issued shares of capital stock of each
subsidiary of the Company have been duly and validly authorized and issued
and are fully paid and non-assessable and are owned directly or indirectly
by the Company, free and clear of all liens, encumbrances, equities or
claims.
(e) The unissued shares of the Stock to be issued and sold by the
Company to the Underwriters hereunder have been duly and validly authorized
and, when issued and delivered against payment therefor as provided herein,
will be duly and validly issued, fully paid and non-assessable; and the
Stock will conform to the description thereof contained in the Prospectus.
(f) This Agreement has been duly authorized, executed and
delivered by the Company.
(g) The execution, delivery and performance of this Agreement by
the Company and the consummation of the transactions contemplated hereby
will not conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Company or the Subsidiary is a party or by which the Company or
the Subsidiary is bound or to which any of the property or assets of the
Company or the Subsidiary is subject, nor will such actions result in any
violation of the provisions of the charter or bylaws of the Company or the
Subsidiary or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or the
Subsidiary or any of their properties or assets; and except for the
registration of the Stock under the Securities Act and such consents,
approvals, authorizations, registrations or qualifications as may be
required under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and applicable state securities laws in connection with
the purchase and distribution of the Stock by the Underwriters, no consent,
approval, authorization or order of, or filing or registration with, any
such court or governmental agency or body is required for the execution,
delivery and performance of this by the Company and the consummation of the
transactions contemplated hereby.
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(h) There are no contracts, agreements or understandings between
the Company and any person granting such person the right (other than
rights which have been waived or satisfied), with respect to any securities
of the Company owned by such person, to require the Company to include such
securities in the securities registered pursuant to the Registration
Statement. Except as described in the Prospectus, there are no contracts,
agreements or understandings between the Company and any person granting
such person the right to require the Company to register or include
securities pursuant to any other registration statement filed by the
Company under the Securities Act.
(i) Except as described in the Prospectus, the Company has not
sold or issued any shares of Common Stock during the six-month period
preceding the date of the Prospectus, including any sales pursuant to Rule
144A under, or Regulations D or S of, the Securities Act, other than shares
issued pursuant to employee benefit plans, qualified stock options plans or
other employee compensation plans or pursuant to outstanding options,
rights or warrants.
(j) Neither the Company nor the Subsidiary has sustained, since
the date of the latest audited financial statements included in the
Prospectus, any material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or
from any labor dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the Prospectus; and, since
such date, there has not been any material change in the capital stock or
long-term debt of the Company and the Subsidiary, taken as a whole, or any
material adverse change in, or any development involving a prospective
material adverse change in the business, financial condition or results of
operations of the Company and the Subsidiary, taken as a whole, otherwise
than as set forth or contemplated in the Prospectus.
(k) The financial statements (including the related notes and
supporting schedules) filed as part of the Registration Statement or
included in the Prospectus present fairly the financial condition and
results of operations of the entities purported to be shown thereby, at the
dates and for the periods indicated, and have been prepared in conformity
with generally accepted accounting principles applied on a consistent basis
throughout the periods involved.
(l) Ernst & Young LLP, who have certified certain financial
statements of the Company, whose report appears in the Prospectus and who
have delivered the initial letter referred to in Section 9(h) hereof, are
independent public accountants as required by the Securities Act and the
Rules and Regulations.
(m) The Company and the Subsidiary have good and marketable title
to all personal property owned by them, free and clear of all liens,
encumbrances and defects except such as are described in the Prospectus or
such as do not materially affect the value of such property and do not
materially interfere with the use made
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and proposed to be made of such property by the Company and the Subsidiary;
and all real property and buildings held under lease by the Company and the
Subsidiary are held by them under valid, subsisting and enforceable leases,
with such exceptions as are not material and do not interfere with the use
made and proposed to be made of such property and buildings by the Company
and the Subsidiary.
(n) The Company and the Subsidiary carry, or are covered by,
insurance in such amounts and covering such risks as is adequate for the
conduct of their respective businesses and the value of their respective
properties and as is customary for companies engaged in similar businesses
in similar industries.
(o) The Company owns or possesses adequate licenses or other
rights to use all patents, patent applications, inventions, trademarks,
trade names, applications for registration of trademarks, service marks,
service xxxx applications, copyrights, know-how, manufacturing processes,
formulae, trade secrets, licenses and rights in any thereof and any other
intangible property and assets (herein called the "Proprietary Rights")
necessary to conduct its business in the manner described in the
Prospectus, except where the failure to so own or possess such Proprietary
Rights would not, singularly or in the aggregate, have a material adverse
effect on the financial position, stockholders' equity, results of
operations, business or prospects of the Company. The Company takes
security measures to provide adequate trade secret protection in its non-
patented technology. Except as disclosed in the Prospectus, the Company has
not received any notice of infringement or conflict with asserted rights of
others with respect to any Proprietary Rights which could result in any
material adverse effect on the Company, and except as specifically
identified and described in the Prospectus, no action, suit, arbitration,
or legal, administrative or other proceeding, or investigation is pending,
or, to the knowledge of the Company, threatened, which involves any
Proprietary Rights. Except as disclosed in the Prospectus, the Proprietary
Rights of the Company referred to in the Prospectus do not, to the
knowledge of the Company, infringe or conflict with any right or valid and
enforceable patent of any third party, or any discovery, invention, product
or process which is the subject of a patent application filed by any third
party, known to the Company which could have a material adverse effect on
the Company. The Company is not subject to any judgment, order, writ,
injunction or decree of any court or any Federal, state, local, foreign or
other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, or any arbitrator, nor, except as
described in the Prospectus, has it entered into or is a party to any
contract which restricts or impairs the use of any such Proprietary Rights
in a manner which would have a material adverse effect on the use of any of
the Proprietary Rights. The Company has complied, in all material respects,
with its respective contractual obligations relating to the protection of
the Proprietary Rights used pursuant to licenses. To the knowledge of the
Company, no person is infringing on or violating the Proprietary Rights
owned or used by the Company.
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(p) There are no legal or governmental proceedings pending to
which the Company or the Subsidiary is a party or of which any property or
assets of the Company or the Subsidiary is the subject which, if determined
adversely to the Company or the Subsidiary, are reasonably likely to have a
material adverse effect on the financial position, stockholders' equity,
results of operations, business or prospects of the Company and the
Subsidiary, taken as a whole, and to the knowledge of the Company, no such
proceedings are threatened or contemplated by governmental authorities or
threatened by others.
(q) There are no contracts or other documents which are required
to be described in the Prospectus or filed as exhibits to the Registration
Statement by the Securities Act or by the Rules and Regulations which have
not been described in the Prospectus or filed as exhibits to the
Registration Statement or incorporated therein by reference as permitted by
the Rules and Regulations.
(r) No relationship, direct or indirect, exists between or among
the Company on the one hand, and the directors, officers, stockholders,
customers or suppliers of the Company on the other hand, which is required
to be described in the Prospectus which is not so described.
(s) No labor disturbance by the employees of the Company exists
or, to the knowledge of the Company, is imminent which would reasonably be
expected to have a material adverse effect on the consolidated financial
position, stockholders' equity, results of operations, business or
prospects of the Company and the Subsidiary, taken as a whole.
(t) The Company is in compliance in all material respects with all
presently applicable provisions of the Employee Retirement Income Security
Act of 1974, as amended, including the regulations and published
interpretations thereunder ("ERISA"); no "reportable event" (as defined in
ERISA) has occurred with respect to any "pension plan" (as defined in
ERISA) for which the Company would have any liability; the Company has not
incurred and does not expect to incur liability under (i) Title IV of ERISA
with respect to termination of, or withdrawal from, any "pension plan" or
(ii) Sections 412 or 4971 of the Internal Revenue Code of 1986, as amended,
including the regulations and published interpretations thereunder (the
"Code"); and each "pension plan" for which the Company would have any
liability that is intended to be qualified under Section 401(a) of the Code
is so qualified in all material respects and nothing has occurred, whether
by action or by failure to act, which would cause the loss of such
qualification.
(u) The Company has filed all federal, state and local income and
franchise tax returns required to be filed through the date hereof and has
paid all taxes due thereon, and no tax deficiency has been determined
adversely to the Company or the Subsidiary which has had (nor does the
Company have any knowledge of any tax
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deficiency which, if determined adversely to the Company or the Subsidiary,
would reasonably be expected to have) a material adverse effect on the
financial position, stockholders' equity, results of operations, business
or prospects of the Company and the Subsidiary, taken as a whole.
(v) Since the date as of which information is given in the
Prospectus through the date hereof, and except as may otherwise be
disclosed in the Prospectus, the Company has not (i) issued or granted any
securities, (ii) incurred any liability or obligation, direct or
contingent, other than liabilities and obligations which were incurred in
the ordinary course of business, (iii) entered into any transaction not in
the ordinary course of business or (iv) declared or paid any dividend on
its capital stock.
(w) The Company (i) makes and keeps accurate books and records and
(ii) maintains internal accounting controls which provide reasonable
assurance that (A) transactions are executed in accordance with
management's authorization, (B) transactions are recorded as necessary to
permit preparation of its financial statements and to maintain
accountability for its assets, (C) access to its assets is permitted only
in accordance with management's authorization and (D) the reported
accountability for its assets is compared with existing assets at
reasonable intervals.
(x) Neither the Company nor the Subsidiary (i) is in violation of
its charter or bylaws, (ii) is in default in any material respect, and no
event has occurred which, with notice or lapse of time or both, would
constitute such a default, in the due performance or observance of any
term, covenant or condition contained in any material indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which it
is a party or by which it is bound or to which any of its properties or
assets is subject or (iii) is in violation in any material respect of any
law, ordinance, governmental rule, regulation or court decree to which it
or its property or assets may be subject or has failed to obtain any
material license, permit, certificate, franchise or other governmental
authorization or permit necessary to the ownership of its property or to
the conduct of its business.
(y) Neither the Company nor the Subsidiary, nor any director or
officer associated with or acting on behalf of the Company or the
Subsidiary, has used any corporate funds for any unlawful contribution,
gift, entertainment or other unlawful expense relating to political
activity; made any direct or indirect unlawful payment to any foreign or
domestic government official or employee from corporate funds; violated or
is in violation of any provision of the Foreign Corrupt Practices Act of
1977; or made any bribe, rebate, payoff, influence payment, kickback or
other unlawful payment.
(z) There has been no storage, disposal, generation, manufacture,
refinement, transportation, handling or treatment of toxic wastes, medical
wastes, hazardous wastes or hazardous substances by the Company or the
Subsidiary (or, to
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the knowledge of the Company, any of their predecessors in interest) at,
upon or from any of the property now or previously owned or leased by the
Company or the Subsidiary in violation of any applicable law, ordinance,
rule, regulation, order, judgment, decree or permit or which would require
remedial action under any applicable law, ordinance, rule, regulation,
order, judgment, decree or permit, except for any violation or remedial
action which would not have, or could not be reasonably likely to have,
singularly or in the aggregate with all such violations and remedial
actions, a material adverse effect on the general affairs, management,
financial position, stockholders' equity or results of operations of the
Company and the Subsidiary, taken as a whole; there has been no material
spill, discharge, leak, emission, injection, escape, dumping or release of
any kind onto such property or into the environment surrounding such
property of any toxic wastes, medical wastes, solid wastes, hazardous
wastes or hazardous substances due to or caused by the Company or the
Subsidiary or with respect to which the Company or the Subsidiary have
knowledge, except for any such spill, discharge, leak, emission, injection,
escape, dumping or release which would not have or would not be reasonably
likely to have, singularly or in the aggregate with all such spills,
discharges, leaks, emissions, injections, escapes, dumpings and releases, a
material adverse effect on the general affairs, management, financial
position or results of operations of the Company and the Subsidiary, taken
as a whole; and the terms "hazardous wastes," "toxic wastes," "hazardous
substances" and "medical wastes" shall have the meanings specified in any
applicable local, state and federal laws or regulations with respect to
environmental protection.
(aa) Neither the Company nor the Subsidiary is an "investment
company" within the meaning of such term under the Investment Company Act
of 1940, as amended, and the rules and regulations of the Commission
thereunder.
2. Representations, Warranties and Agreements of the Selling Stockholders.
Each Selling Stockholder severally represents, warrants and agrees that:
(a) The Selling Stockholder has, and immediately prior to the
First Delivery Date (as defined in Section 5 hereof) the Selling
Stockholder will have, good and valid title to the shares of Stock to be
sold by the Selling Stockholder hereunder on such date, free and clear of
all liens, encumbrances, equities or claims; and upon delivery of such
shares and payment therefor pursuant hereto, good and valid title to such
shares, free and clear of all liens, encumbrances, equities or claims, will
pass to the several Underwriters.
(b) The Selling Stockholder has placed in custody under a custody
agreement (the "Custody Agreement" and, together with all other similar
agreements executed by the other Selling Stockholders, the "Custody
Agreements") with Norwest Bank Minnesota N.A., as custodian (the
"Custodian"), for delivery under this Agreement, certificates in negotiable
form (with signature guaranteed by a commercial bank or trust company
having an office or correspondent in the United
8
States or a member firm of the New York or American Stock Exchanges)
representing the shares of Stock to be sold by the Selling Stockholder
hereunder.
(c) The Selling Stockholder has duly and irrevocably executed and
delivered a power of attorney (the "Power of Attorney" and, together with
all other similar agreements executed by the other Selling Stockholders,
the "Powers of Attorney") appointing the Custodian and one or more other
persons, as attorneys-in-fact, with full power of substitution, and with
full authority (exercisable by any one or more of them) to execute and
deliver this Agreement and to take such other action as may be necessary or
desirable to carry out the provisions hereof on behalf of the Selling
Stockholder.
(d) The Selling Stockholder has full right, power and authority to
enter into this Agreement, the Power of Attorney and the Custody Agreement;
the execution, delivery and performance of this Agreement, the Power of
Attorney and the Custody Agreement by the Selling Stockholder and the
consummation by the Selling Stockholder of the transactions contemplated
hereby and thereby will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Selling Stockholder is a party or by
which the Selling Stockholder is bound or to which any of the property or
assets of the Selling Stockholder is subject, nor will such actions result
in any violation of the provisions of the charter or by-laws of the Selling
Stockholder, the articles of partnership of the Selling Stockholder or the
deed of trust of the Selling Stockholder, as applicable, or any statute or
any order, rule or regulation of any court or governmental agency or body
having jurisdiction over the Selling Stockholder or the property or assets
of the Selling Stockholder; and, except for the registration of the Stock
under the Securities Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under the Exchange Act
and applicable state securities laws in connection with the purchase and
distribution of the Stock by the Underwriters, no consent, approval,
authorization or order of, or filing or registration with, any such court
or governmental agency or body is required for the execution, delivery and
performance of this Agreement, the Power of Attorney or the Custody
Agreement by the Selling Stockholder and the consummation by the Selling
Stockholder of the transactions contemplated hereby and thereby.
(e) All information furnished by or on behalf of the Selling
Stockholder in writing expressly for use in the Registration Statement and
Prospectus, including, without limitation, information concerning the
shares of Common Stock of the Company held by the Selling Stockholder, as
set forth in the Prospectus under the caption "Principal and Selling
Stockholders," is true and correct in all material respects and does not
contain any untrue statement of material fact or omit to state any material
fact necessary to make such information not misleading. The Selling
Stockholder has no reason to believe that the Registration Statement and
the
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Prospectus and any further amendments or supplements to the Registration
Statement or the Prospectus will, when they become effective or are filed
with the Commission, as the case may be, do not and will not, as of the
applicable effective date (as to the Registration Statement and any
amendment thereto) and as of the applicable filing date (as to the
Prospectus and any amendment or supplement thereto) contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading; provided that no representation or warranty is made as to
information contained in or omitted from the Registration Statement or the
Prospectus in reliance upon and in conformity with written information
furnished to the Company through the Representatives by or on behalf of any
Underwriter specifically for inclusion therein.
(f) The Selling Stockholder has not taken and will not take,
directly or indirectly, any action which is designed to or which has
constituted or which might reasonably be expected to cause or result in the
stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the shares of the Stock.
3. Purchase of the Stock by the Underwriters. On the basis of the
representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Company agrees to sell 4,500,000 shares of
the Firm Stock and each Selling Stockholder hereby agrees to sell the number of
shares of the Firm Stock set opposite its name in Schedule 2 hereto, severally
and not jointly, to the several Underwriters, and each of the Underwriters,
severally and not jointly, agrees to purchase the number of shares of the Firm
Stock set opposite that Underwriter's name in Schedule 1 hereto. Each
Underwriter shall be obligated to purchase from the Company, and from each
Selling Stockholder, that number of shares of the Firm Stock which represents
the same proportion of the number of shares of the Firm Stock to be sold by the
Company, and by each Selling Stockholder, as the number of shares of the Firm
Stock set forth opposite the name of such Underwriter in Schedule 1 represents
of the total number of shares of the Firm Stock to be purchased by all of the
Underwriters pursuant to this Agreement. The respective purchase obligations of
the Underwriters with respect to the Firm Stock shall be rounded among the
Underwriters to avoid fractional shares, as the Representatives may determine.
In addition, the Company grants to the Underwriters an option to purchase
up to 675,000 shares of Option Stock and the Selling Stockholders severally, and
not jointly, grant to the Underwriters an option to purchase up to 225,000
shares of Option Stock. The Option Stock to be sold by each such Selling
Stockholder hereunder shall be equal to the number of shares of Option Stock set
forth opposite each such Selling Stockholder's name in Schedule 2 hereto. Such
option is granted for the purpose of covering over-allotments in the sale of
Firm Stock and is exercisable as provided in Section 5 hereof. Shares of Option
Stock shall be purchased severally for the account of the Underwriters in
proportion to the number of shares of Firm Stock set opposite the name of such
Underwriters in Schedule 1 hereto. The respective purchase obligations of each
Underwriter with respect to the Option Stock shall be adjusted by the
Representatives so that no Underwriter
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shall be obligated to purchase Option Stock other than in 100 share amounts. The
price of both the Firm Stock and any Option Stock shall be $_____ per share.
The Company and the Selling Stockholders shall not be obligated to
deliver any of the Stock to be delivered on any Delivery Date (as hereinafter
defined), as the case may be, except upon payment for all the Stock to be
purchased on such Delivery Date as provided herein.
4. Offering of Stock by the Underwriters.
Upon authorization by the Representatives of the release of the Firm
Stock, the several Underwriters propose to offer the Firm Stock for sale upon
the terms and conditions set forth in the Prospectus.
5. Delivery of and Payment for the Stock. Delivery of and payment
for the Firm Stock shall be made at the office of Xxxxxx Godward LLP, Five Palo
Alto Square, 0000 Xx Xxxxxx Xxxx, Xxxx Xxxx, Xxxxxxxxxx 00000 at 10:00 A.M., New
York City time, on the [fourth] full business day following the date of this
Agreement or at such other date or place as shall be determined by agreement
between the Representatives and the Company. This date and time are sometimes
referred to as the "First Delivery Date." On the First Delivery Date, the
Company and the Selling Stockholders shall deliver or cause to be delivered
certificates representing the Firm Stock to the Representatives for the account
of each Underwriter against payment to or upon the order of the Company and the
Selling Stockholders of the purchase price by wire transfer in immediately
available funds. Time shall be of the essence, and delivery at the time and
place specified pursuant to this Agreement is a further condition of the
obligation of each Underwriter hereunder. Upon delivery, the Firm Stock shall
be registered in such names and in such denominations as the Representatives
shall request in writing not less than two full business days prior to the First
Delivery Date. For the purpose of expediting the checking and packaging of the
certificates for the Firm Stock, the Company and the Selling Stockholders shall
make the certificates representing the Firm Stock available for inspection by
the Representatives in New York, New York, not later than 2:00 P.M., New York
City time, on the business day prior to the First Delivery Date.
The option granted in Section 3 will expire 30 days after the date of
this Agreement and may be exercised in whole or in part from time to time by
written notice being given to the Company and the Selling Stockholders by the
Representatives. If the option is exercised in part, the Underwriters shall
purchase on a pro rata basis from the Company and each Selling Stockholder that
number of shares of Option Stock offered by the Company and each Selling
Stockholder, as the case may be, pursuant to Section 3 hereof. Such notice
shall set forth the aggregate number of shares of Option Stock as to which the
option is being exercised, the names in which the shares of Option Stock are to
be registered, the denominations in which the shares of Option Stock are to be
issued and the date and time, as determined by the Representatives, when the
shares of Option Stock are to be delivered; provided, however, that this date
and time shall not be earlier than the First Delivery Date nor earlier than the
second business day after the date on which the option shall have been exercised
nor later than the fifth business day after the date on which the option shall
have been exercised. The date and time the shares of Option Stock are delivered
are sometimes
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referred to as a "Second Delivery Date" and the First Delivery Date and any
Second Delivery Date are sometimes each referred to as a "Delivery Date."
Delivery of and payment for the Option Stock shall be made at the
place specified in the first sentence of the first paragraph of this Section 5
(or at such other place as shall be determined by agreement between the
Representatives and the Company) at 10:00 A.M., New York City time, on such
Second Delivery Date. On such Second Delivery Date, the Company and each
Selling Stockholder shall deliver or cause to be delivered the certificates
representing the Option Stock to the Representatives for the account of each
Underwriter against payment of the purchase price by wire transfer in
immediately available funds to or upon the order of the Company, and in the case
of the Selling Stockholders, to a bank account designated by the Custodian
pursuant to the Power of Attorney and Custody Agreement. Time shall be of the
essence, and delivery at the time and place specified pursuant to this Agreement
is a further condition of the obligation of each Underwriter hereunder. Upon
delivery, the Option Stock shall be registered in such names and in such
denominations as the Representatives shall request in the aforesaid written
notice. For the purpose of expediting the checking and packaging of the
certificates for the Option Stock, the Company and each Selling Stockholder
shall make the certificates representing the Option Stock available for
inspection by the Representatives in New York, New York, not later than 2:00
P.M., New York City time, on the business day prior to such Second Delivery
Date.
6. Further Agreements of the Company. The Company agrees:
(a) To prepare the Prospectus in a form approved by the
Representatives and to file such Prospectus pursuant to Rule 424(b)
under the Securities Act not later than the Commission's close of
business on the second business day following the execution and
delivery of this Agreement or, if applicable, such earlier time as may
be required by Rule 430A(a)(3) under the Securities Act; to make no
further amendment or any supplement to the Registration Statement or
to the Prospectus except as permitted herein; to advise the
Representatives, promptly after it receives notice thereof, of the
time when any amendment to the Registration Statement has been filed
or becomes effective or any supplement to the Prospectus or any
amended Prospectus has been filed and to furnish the Representatives
with copies thereof; to advise the Representatives, promptly after it
receives notice thereof, of the issuance by the Commission of any stop
order or of any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus, of the suspension of the
qualification of the Stock for offering or sale in any jurisdiction,
of the initiation or threatening of any proceeding for any such
purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statement or the Prospectus or for
additional information; and, in the event of the issuance of any stop
order or of any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus or suspending any such
qualification, to use promptly its best efforts to obtain its
withdrawal;
(b) To furnish promptly to each of the Representatives and to
counsel for the Underwriters a signed copy of the Registration
Statement as originally filed
12
with the Commission, and each amendment thereto filed with the
Commission, including all consents and exhibits filed therewith;
(c) To deliver promptly to the Representatives such number of
the following documents as the Representatives shall reasonably
request: (i) conformed copies of the Registration Statement as
originally filed with the Commission and each amendment thereto (in
each case including exhibits other than this Agreement and the
computation of per share earnings) and (ii) each Preliminary
Prospectus, the Prospectus and any amended or supplemented Prospectus;
and, if the delivery of a prospectus is required at any time after the
Effective Time in connection with the offering or sale of the Stock or
any other securities relating thereto and if at such time any event
shall have occurred as a result of which the Prospectus as then
amended or supplemented would include an untrue statement of a
material fact or omit to state any material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made when such Prospectus is delivered, not
misleading, or, if for any other reason it shall be necessary to amend
or supplement the Prospectus in order to comply with the Securities
Act, to notify the Representatives and, upon their request, to file
such amended or supplemented prospectus and to prepare and furnish
without charge to each Underwriter and to any dealer in securities as
many copies as the Representatives may from time to time reasonably
request of an amended or supplemented Prospectus which will correct
such statement or omission or effect such compliance;
(d) To file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the
Prospectus that may, in the judgment of the Company or the
Representatives, be required by the Securities Act or requested by the
Commission;
(e) Prior to filing with the Commission any amendment to the
Registration Statement or supplement to the Prospectus or any
Prospectus pursuant to Rule 424 of the Rules and Regulations, to
furnish a copy thereof to the Representatives and counsel for the
Underwriters and obtain the consent of the Representatives to the
filing;
(f) As soon as practicable after the Effective Date, to make
generally available to the Company's security holders and to deliver
to the Representatives an earnings statement of the Company and the
Subsidiary (which need not be audited) complying with Section 11(a) of
the Securities Act and the Rules and Regulations (including, at the
option of the Company, Rule 158);
(g) For a period of five years following the Effective Date, to
furnish to the Representatives copies of all materials furnished by
the Company to its stockholders and all public reports and all reports
and financial statements furnished by the Company to the principal
national securities exchange upon which the Common Stock may be listed
pursuant to requirements of or agreements with such exchange
13
or to the Commission pursuant to the Exchange Act or any rule or
regulation of the Commission thereunder;
(h) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify the Stock for
offering and sale under the securities laws of such jurisdictions as
the Representatives may request and to comply with such laws so as to
permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the
distribution of the Stock; provided that in connection therewith the
Company shall not be required to qualify as a foreign corporation or
to file a general consent to service of process in any jurisdiction;
(i) For a period of 90 days from the date of the Prospectus, not
to, directly or indirectly, (1) offer for sale, sell, pledge or
otherwise dispose of (or enter into any transaction or device which is
designed to, or could be expected to, result in the disposition by any
person at any time in the future of) any shares of Common Stock or
securities convertible into or exchangeable for Common Stock (other
than the Stock and shares issued pursuant to employee benefit plans,
qualified stock option plans or other employee compensation plans
existing on the date hereof or pursuant to currently outstanding
options, warrants or rights), or sell or grant options, rights or
warrants with respect to any shares of Common Stock or securities
convertible into or exchangeable for Common Stock (other than the
grant of options pursuant to option plans existing on the date
hereof), or (2) enter into any swap or other derivatives transaction
that transfers to another, in whole or in part, any of the economic
benefits or risks of ownership of such shares of Common Stock, whether
any such transaction described in clause (1) or (2) above is to be
settled by delivery of Common Stock or other securities, in cash or
otherwise, in each case without the prior written consent of Xxxxxx
Brothers Inc.;
(j) Prior to the Effective Date, to apply for the listing of the
Stock on the National Market System and to use its best efforts to
complete that listing, subject only to official notice of issuance and
evidence of satisfactory distribution, prior to the First Delivery
Date; and
(k) To take such steps as shall be necessary to ensure that
neither the Company nor the Subsidiary shall become an "investment
company" within the meaning of such term under the Investment Company
Act of 1940, as amended, and the rules and regulations of the
Commission thereunder.
7. Further Agreements of the Selling Stockholders. Each Selling
Stockholder agrees:
(a) That the Stock to be sold by the Selling Stockholder
hereunder, which is represented by the certificates held in custody
for the Selling Stockholder, is subject to the interest of the
Underwriters and the other Selling Stockholders thereunder,
14
that the arrangements made by the Selling Stockholder for such custody
are to that extent irrevocable, and that the obligations of the
Selling Stockholder hereunder shall not be terminated by any act of
the Selling Stockholder, by operation of law, by the death or
incapacity of any individual Selling Stockholder or, in the case of a
trust, by the death or incapacity of any executor or trustee or the
termination of such trust, or the occurrence of any other event.
(b) To deliver to the Representatives prior to the First
Delivery Date a properly completed and executed United States Treasury
Department Form W-8 (if the Selling Stockholder is a non-United States
person) or Form W-9 (if the Selling Stockholder is a United States
person.)
8. Expenses. The Company agrees to pay (a) the costs incident to the
authorization, issuance, sale and delivery of the Stock and any taxes payable in
that connection; (b) the costs incident to the preparation, printing and filing
under the Securities Act of the Registration Statement and any amendments and
exhibits thereto; (c) the costs of distributing the Registration Statement as
originally filed and each amendment thereto and any post-effective amendments
thereof (including, in each case, exhibits), any Preliminary Prospectus, the
Prospectus and any amendment or supplement to the Prospectus, all as provided in
this Agreement; (d) the costs of producing and distributing this Agreement and
any other related documents in connection with the offering, purchase, sale and
delivery of the Stock; (e) the costs of delivering and distributing the Custody
Agreements and the Powers of Attorney; (f) the filing fees incident to securing
any required review by the National Association of Securities Dealers, Inc. of
the terms of sale of the Stock; (g) any applicable listing or other fees; (h)
the fees and expenses of qualifying the Stock under the securities laws of the
several jurisdictions as provided in Section 6(h) and of preparing, printing and
distributing a Blue Sky Memorandum (including related fees and expenses of
counsel to the Underwriters); and (i) all other costs and expenses incident to
the performance of the obligations of the Company and the Selling Stockholders
under this Agreement; provided that, except as provided in this Section 8 and in
Section 13, the Underwriters shall pay their own costs and expenses, including
the costs and expenses of their counsel, any transfer taxes on the Stock which
they may sell and the expenses of advertising any offering of the Stock made by
the Underwriters, and the Selling Stockholders shall pay the fees and expenses
of their counsel (other than as paid by the Company pursuant to existing
contractual arrangements), the Custodian (and any other attorney-in-fact), and
any transfer taxes payable in connection with their respective sales of Stock to
the Underwriters.
9. Conditions of Underwriters' Obligations. The respective
obligations of the Underwriters hereunder are subject to the accuracy, when made
and on each Delivery Date, of the representations and warranties of the Company
and the Selling Stockholders contained herein, to the performance by the Company
and the Selling Stockholders of their respective obligations hereunder, and to
each of the following additional terms and conditions:
(a) The Prospectus shall have been timely filed with the
Commission in accordance with Section 6(a); no stop order suspending
the effectiveness of the Registration Statement or any part thereof
shall have been issued and no proceeding
15
for that purpose shall have been initiated or threatened by the
Commission; and any request of the Commission for inclusion of
additional information in the Registration Statement or the Prospectus
or otherwise shall have been complied with.
(b) No Underwriter shall have discovered and disclosed to the
Company on or prior to such Delivery Date that the Registration
Statement or the Prospectus or any amendment or supplement thereto
contains any untrue statement of a fact which, in the opinion of
Xxxxxx & Xxxxxxx, counsel for the Underwriters, is material or omits
to state any fact which, in the opinion of such counsel, is material
and is required to be stated therein or is necessary to make the
statements therein not misleading.
(c) All corporate proceedings and other legal matters incident
to the authorization, form and validity of this Agreement, the Custody
Agreements, the Powers of Attorney, the Stock, the Registration
Statement and the Prospectus, and all other legal matters relating to
this Agreement and the transactions contemplated hereby shall be
reasonably satisfactory in all material respects to counsel for the
Underwriters, and the Company and the Selling Stockholders shall have
furnished to such counsel all documents and information that they may
reasonably request to enable them to pass upon such matters.
(d) Xxxxxx Godward LLP shall have furnished to the
Representatives its written opinion, as counsel to the Company,
addressed to the Underwriters and dated such Delivery Date, in form
and substance reasonably satisfactory to the Representatives, to the
effect that:
(i) The Company and the Subsidiary have been duly
incorporated and are validly existing as corporations in good
standing under the laws of their respective jurisdictions of
incorporation, and to our knowledge, are duly qualified to do
business and are in good standing as foreign corporations in each
jurisdiction in which their respective ownership or lease of
property or the conduct of their respective businesses requires
such qualification, except where the failure to be so qualified
would not have a material adverse effect on the business,
financial condition or results of operations of the Company, and
have all corporate power and authority necessary to own or hold
their respective properties and conduct the businesses in which
they are engaged; and to such counsel's knowledge, other than the
Subsidiary, the Company has no subsidiaries;
(ii) The Company has an authorized capitalization as set
forth in the Prospectus, and all of the issued shares of capital
stock of the Company (including the shares of Stock being
delivered on such Delivery Date) have been duly and validly
authorized and issued, are fully paid and non-assessable and
conform to the description thereof contained in the
16
Prospectus; and all of the issued shares of capital stock of the
Subsidiary have been duly and validly authorized and issued and
are fully paid, non-assessable and are owned directly or
indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims;
(iii) There are no preemptive or other rights to
subscribe for or to purchase, nor any restriction upon the voting
or transfer of, any shares of the Stock pursuant to the Company's
Amended and Restated Certificate of Incorporation (the
"Charter"), the Company's bylaws, any agreement filed as an
exhibit to the Registration Statement and Prospectus or, to such
counsel's knowledge, any other agreement to which the Company is
a party;
(iv) To such counsel's knowledge, there are no legal or
governmental proceedings pending or overtly threatened to which
the Company or the Subsidiary is a party or of which any property
or assets of the Company or the Subsidiary is the subject which
are required to be described in the Prospectus by the Securities
Act or the Rules and Regulations;
(v) The Registration Statement was declared effective
under the Securities Act as of the date and time specified in
such opinion, the Prospectus was filed with the Commission
pursuant to the subparagraph of Rule 424(b) of the Rules and
Regulations as of the date specified in such opinion and, to such
counsel's knowledge, no stop order suspending the effectiveness
of the Registration Statement has been issued and, to such
counsel's knowledge, no proceeding for that purpose is pending or
threatened by the Commission;
(vi) The Registration Statement and the Prospectus and
any further amendments or supplements thereto made by the Company
prior to such Delivery Date (other than the financial statements,
financial data and related schedules therein, as to which such
counsel need express no opinion) comply as to form in all
material respects with the requirements of the Securities Act and
the Rules and Regulations;
(vii) To such counsel's knowledge, there are no contracts
or other documents that are required to be described in the
Prospectus or filed as exhibits to the Registration Statement by
the Securities Act or by the Rules and Regulations that have not
been described or filed as exhibits to the Registration Statement
or incorporated therein by reference as permitted by the Rules
and Regulations;
(viii) This Agreement has been duly authorized, executed
and delivered by the Company;
17
(ix) The issue and sale of the shares of Stock being
delivered on such Delivery Date by the Company and the compliance
by the Company with all of the provisions of this Agreement and
the consummation of the transactions contemplated hereby will not
conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement, or other
agreement material to the Company's business as described in the
Registration Statement and Prospectus, or other instrument known
to such counsel to which the Company or the Subsidiary is a party
or by which the Company or the Subsidiary is bound or to which
any of the property or assets of the Company or the Subsidiary is
subject, nor will such actions result in any violation of the
provisions of the charter or bylaws of the Company or the
Subsidiary or any statute or any order, rule or regulation known
to such counsel of any court or governmental agency or body
having jurisdiction over the Company or the Subsidiary or any of
their properties or assets (except the securities or Blue Sky
laws of the various U.S. states and the rules of the NASD
governing underwriting compensation, as to which we express no
opinion); and, except for the registration of the Stock under the
Securities Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under the
Exchange Act, applicable state securities laws and the rules of
the NASD governing underwriting compensation, no consent,
approval, authorization or order of, or filing or registration
with, any such court or governmental agency or body is required
for the execution, delivery and performance of this Agreement by
the Company and the consummation of the transactions contemplated
hereby;
(x) The Company is not an "investment company" within the
meaning of such term under the Investment Company Act of 1940, as
amended and the rules and regulations of the Commission
thereunder; and
(xi) To such counsel's knowledge, there are no contracts,
agreements or understandings between the Company and any person
granting such person the right (other than rights which have been
waived or satisfied) to require the Company to include securities
in the securities registered pursuant to the Registration
Statement. To such counsel's knowledge, except as described in
the Prospectus, there are no contracts, agreements or
understandings between the Company and any person granting such
person the right to require the Company to register or include
securities pursuant to any other registration statement filed by
the Company under the Securities Act.
In rendering such opinion, such counsel may state that its opinion is
limited to matters governed by the federal laws of the United States
of America, the laws of the State of California and the General
Corporation Law of the State of Delaware and that such counsel is not
admitted in the State of Delaware. Such counsel shall
18
also have furnished to the Representatives a written statement,
addressed to the Underwriters and dated such Delivery Date, in form
and substance satisfactory to the Representatives, to the effect that:
"In connection with the preparation of the Registration Statement, we
have participated in conferences with officers and other
representatives of the Company, representatives of the independent
public or certified public accountants for the Company and with
representatives of the Underwriters. We have not independently
verified and accordingly are not passing upon and do not assume any
responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement or the Prospectus
(other than the statements made in the Prospectus under the captions
"Description of Capital Stock" and "Shares Eligible for Future Sale,"
insofar as such statements relate to the Stock and concern legal
matters), and any supplements or amendments thereto. On the basis of
the foregoing and in our capacity as counsel to the Company, nothing
has come to our attention which has caused us to believe that either
the Registration Statement or any amendments thereto (except as to the
financial statements and schedules, and other financial data and
statistical data derived therefrom), at the time the Registration
Statement or such amendments became effective, contained an 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 the Prospectus (except as to the
financial statements and schedules, and other financial data and
statistical data derived therefrom), as of its date or as of the date
hereof contained an untrue statement of a material fact or omitted to
state a material fact necessary in order to make the statements
therein, in light of the circumstances in which they were made, not
misleading."
(e) The respective counsel for each of the Selling Stockholders
shall each have furnished to the Representatives its written opinion,
as counsel to each of the Selling Stockholders for whom it is acting
as counsel, addressed to the Underwriters and dated the First Delivery
Date, in form and substance reasonably satisfactory to the
Representatives, to the effect that:
(i) The Selling Stockholder has full right, power and
authority to enter into this Agreement, the Power of Attorney and
the Custody Agreement; to its knowledge, the execution, delivery
and performance of this Agreement, the Power of Attorney and the
Custody Agreement by or on behalf of the Selling Stockholder and
the consummation by the Selling Stockholder of the transactions
contemplated hereby and thereby will not conflict with or result
in a breach or violation of any of the terms or provisions of, or
constitute a default under, any statute, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument
known to such counsel to which the Selling Stockholder is a party
or by which the Selling Stockholder is bound or to which any of
the property or assets of the Selling Stockholder is subject, nor
will such actions result in
19
any violation of the provisions of either the charter or by-laws
of the Selling Stockholder, the articles of partnership of the
Selling Stockholder or the deed of trust of the Selling
Stockholder, as applicable, or any statute or any order, rule or
regulation known to such counsel of any court or governmental
agency or body having jurisdiction over the Selling Stockholder
or the property or assets of the Selling Stockholder, except for
breaches or violations which would not have a material adverse
effect on the Selling Stockholder; and, to the best of our
knowledge, except for the registration of the Selling
Stockholder's Stock under the Securities Act and such consents,
approvals, authorizations, registrations or qualifications as may
be required under the Exchange Act and applicable state
securities laws in connection with the purchase and distribution
of the Selling Stockholder's Stock by the Underwriters, no
consent, approval, authorization or order of, or filing or
registration with, any such court or governmental agency or body
is required for the execution, delivery and performance of this
Agreement, the Power of Attorney or the Custody Agreement by the
Selling Stockholder and the consummation by the Selling
Stockholder of the transactions contemplated hereby and thereby;
(ii) This Agreement has been duly authorized, executed
and delivered by or on behalf of the Selling Stockholder;
(iii) A Power-of-Attorney and a Custody Agreement have
been duly authorized, executed and delivered by or on behalf of
the Selling Stockholder and constitute valid and binding
agreements of the Selling Stockholder, enforceable in accordance
with their respective terms, except as rights to indemnity under
Section 10 of this Agreement may be limited by applicable laws
and except as enforcement may be limited by applicable
bankruptcy, insolvency, reorganization, arrangement, moratorium
or other similar laws affecting creditors' rights, and subject to
general equity principles and to limitations on availability of
equitable relief, including specific performance; and
(iv) Upon delivery of and payment for the shares of Stock
to be sold by the Selling Stockholder as provided in this
Agreement and upon registration of such shares of Stock in the
names of the Underwriters (or their nominees) in the stock
records of the Company, good and valid title to the shares of
Stock to be sold by each Selling Stockholder under this
Agreement, free and clear of all liens, encumbrances, equities or
claims, has been transferred to each of the several Underwriters,
assuming for the purpose of this opinion that the Underwriters
are purchasing such shares of Stock in good faith and without
notice of any defect in the title of any Selling Stockholders, or
any adverse claim, to the shares of Stock being purchased from
such Selling Stockholder.
20
In rendering such opinion, such counsel may (i) state that its opinion
is limited to matters governed by the Federal laws of the United
States of America, the laws of the State of California and the General
Corporation Law of the State of Delaware and (ii) in rendering the
opinions in Section 9(e) above, rely upon a certificate of the Selling
Stockholder in respect of matters of fact underlying the above
opinions, provided that such counsel shall furnish copies thereof to
the Representatives and state that it believes that both the
Underwriters and it are justified in relying upon such certificate.
(f) (i) Xxxxxxxx and Xxxxxxxx and Crew LLP shall have furnished
to the Representatives a written opinion, as intellectual property
counsel to the Company, addressed to the Underwriters and dated such
Delivery Date, in form and substance reasonably satisfactory to the
Representatives, to the effect that it serves as intellectual property
counsel to the Company with respect to the Proprietary Rights, and
that:
Such counsel has carefully read and analyzed the following
portions of the Registration Statement and Prospectus relating to
patents or patent rights: the disclosure appearing under the caption
"Prospectus Summary - Tularik," under the caption "Risk Factors--
Because it is difficult and costly to protect our proprietary rights,
we cannot ensure their protection," under the caption "Patents and
Proprietary Rights," under the caption "Business - Product
Development," under the caption "Business - Corporate Collaborations"
and under the caption "Business - Patents and Proprietary Rights,"
(the "Patent Information"). Such counsel has considered the
statements contained in the Patent Information and, without
independent verification of the accuracy, completeness or fairness of
such statements, nothing has come to such counsel's attention, as of
the date of the Prospectus and the date of such opinion, that leads
such counsel to believe that the Patent Information contains an untrue
statement of material fact or omits to state a material fact necessary
to make the statements therein not misleading, in light of the
circumstances in which they are made. As of the date of the
Prospectus and the date of such opinion, such counsel has no reason to
believe that the Patent Information is not in all material respects a
fair and accurate summary of the legal matters, documents and
proceedings relating thereto.
(1) Attached as Schedule A to such opinion is a list of the
Company's U.S. patents and pending U.S. patent applications (the
"U.S. Patent Rights") which, to the best of such counsel's
knowledge, are either owned or co-owned by the Company, as
indicated on such Schedule A. Where the Company is listed on
Schedule A to such opinion as the owner or co-owner of any U.S.
Patent Right, either (a) an assignment from the inventors to the
Company has been recorded or is being recorded in the United
States Patent and Trademark Office, or (b) an assignment from the
inventors to an intervening assignee and then to the Company has
been recorded or is being recorded in the United States Patent
and Trademark
21
Office. To the best of such counsel's knowledge, there are no
claims to any ownership interests or liens on any of the U.S.
Patent Rights by any party other than the Company or the other
co-owners.
(2) Attached as Schedule B to such opinion is a list of the
Company's non-U.S. patents and pending non-U.S. patent
applications (the "Non-U.S. Patent Rights") which, to the best of
such counsel's knowledge, are either owned or co-owned by the
Company, as indicated on such Schedule B. Where the Company is
listed on Schedule B to such opinion as the owner or co-owner of
any Non-U.S. Patent Right, the named inventors of the Non-U.S.
Patent Rights have either (a) executed an assignment to the
Company or the other co-owner or (b) are under an obligation to
execute an assignment to the Company or the other co-owner. To
the best of such counsel's knowledge, there are no claims to any
ownership interests or liens on any of the Non-U.S. Patent Rights
by any party other than the Company or the other co-owners.
(3) To the best of such counsel's knowledge, for each of the
United States patents and patent applications reflected on
Schedule A to such opinion, the Company has disclosed or intends
to disclose to the United States Patent and Trademark Office all
information known and believed to be material to patentability
under the extant 37 C.F.R. (S)1.56.
(4) Such counsel has reviewed portions of certain patent
estates, as set forth in such opinion, and is unaware of any
facts that would lead it to believe that the Company lacks any
patent rights or licenses under such patent estates necessary to
conduct the current or prospective business of the Company as
specified in the Registration Statement and Prospectus.
(5) Except as described in the Prospectus under the caption
"Patent and Proprietary Rights," to the best of such counsel's
knowledge, the Company has not received any claim of infringement
of any patents held by others, and to the best of such counsel's
knowledge, there is no pending or threatened action, suit,
proceeding or claim by others that the Company is infringing a
patent.
(6) To the best of such counsel's knowledge, there are no
pending or threatened legal or governmental proceedings relating
to the U.S. Patent Rights, other than proceedings before the
United States Patent and Trademark Office that are carried out
during the course of prosecution.
(ii) Science & Technology Law Group shall have furnished to the
Representatives a written opinion, as intellectual property counsel to
the Company, addressed to the Underwriters and dated such Delivery
Date, in form and substance reasonably satisfactory to the
Representatives, to the effect that it
22
serves as intellectual property counsel to the Company with respect to
the Proprietary Rights, and that:
Such counsel has carefully read and analyzed the following
portions of the Registration Statement and Prospectus relating to
patents or patent rights: the disclosure appearing under the caption
"Prospectus Summary - Tularik," under the caption "Risk Factors--
Because it is difficult and costly to protect our proprietary rights,
we cannot ensure their protection," under the caption "Patents and
Proprietary Rights," under the caption "Business - Product
Development," under the caption "Business - Corporate Collaborations"
and under the caption "Business - Patents and Proprietary Rights,"
(the "Patent Information"). Such counsel has considered the
statements contained in the Patent Information and, without
independent verification of the accuracy, completeness or fairness of
such statements, nothing has come to such counsel's attention, as of
the date of the Prospectus and the date of such opinion, that leads
such counsel to believe that the Patent Information contains an untrue
statement of material fact or omits to state a material fact necessary
to make the statements therein not misleading, in light of the
circumstances in which they are made. As of the date of the
Prospectus and the date of such opinion, such counsel has no reason to
believe that the Patent Information is not in all material respects a
fair and accurate summary of the legal matters, documents and
proceedings relating thereto.
(1) Attached as Schedule A to such opinion is a list of the
Company's U.S. patents and pending U.S. patent applications (the
"U.S. Patent Rights") which, to the best of such counsel's
knowledge, are either owned or co-owned by the Company, as
indicated on such Schedule A. Where the Company is listed on
Schedule A to such opinion as the owner or co-owner of any U.S.
Patent Right, either (a) an assignment from the inventors to the
Company has been recorded or is being recorded in the United
States Patent and Trademark Office, or (b) an assignment from the
inventors to an intervening assignee and then to the Company has
been recorded or is being recorded in the United States Patent
and Trademark Office. To the best of such counsel's knowledge,
there are no claims to any ownership interests or liens on any of
the U.S. Patent Rights by any party other than the Company or the
other co-owners.
(2) Listed on Schedule A to such opinion is also a list of
the Company's non-U.S. patents and pending non-U.S. patent
applications (the "Non-U.S. Patent Rights") which, to the best of
such counsel's knowledge, are either owned or co-owned by the
Company, as indicated on such Schedule B. Where the Company is
listed on Schedule A to such opinion as the owner or co-owner of
any Non-U.S. Patent Right, the named inventors of the Non-U.S.
Patent Rights have either (a) executed an assignment to the
Company or the other co-owner, or (b) are under an obligation to
execute an assignment to the Company or the other co-
23
owner. To the best of such counsel's knowledge, there are no
claims to any ownership interests or liens on any of the Non-U.S.
Patent Rights by any party other than the Company or the other
co-owners.
(3) To the best of such counsel's knowledge, for each of the
United States patents and patent applications reflected on
Schedule A to such opinion, the Company has disclosed or intends
to disclose to the United States Patent and Trademark Office all
information known and believed to be material to patentability
under the extant 37 C.F.R. (S)1.56.
(4) Such counsel has reviewed portions of certain patent
estates, as set forth in such opinion, and is unaware of any
facts that would lead it to believe that the Company lacks any
patent rights or licenses under such patent estates necessary to
conduct the current or prospective business of the Company as
specified in the Registration Statement and Prospectus.
(5) Except as described in the Prospectus under the caption
"Patent and Proprietary Rights," to the best of such counsel's
knowledge, the Company has not received any claim of infringement
of any patents held by others, and to the best of such counsel's
knowledge, there is no pending or threatened action, suit,
proceeding or claim by others that the Company is infringing a
patent.
(6) To the best of such counsel's knowledge, there are no
pending or threatened legal or governmental proceedings relating
to the U.S. Patent Rights, other than proceedings before the
United States Patent and Trademark Office that are carried out
during the course of prosecution.
(g) The Representatives shall have received from Xxxxxx &
Xxxxxxx, counsel for the Underwriters, such opinion or opinions, dated
such Delivery Date, with respect to the issuance and sale of the
Stock, the Registration Statement, the Prospectus and other related
matters as the Representatives may reasonably require, and the Company
shall have furnished to such counsel such documents as they reasonably
request for the purpose of enabling them to pass upon such matters.
(h) At the time of execution of this Agreement, the
Representatives shall have received from Ernst & Young LLP a letter,
in form and substance reasonably satisfactory to the Representatives,
addressed to the Underwriters and dated the date hereof (i) confirming
that they are independent public accountants within the meaning of the
Securities Act and are in compliance with the applicable requirements
relating to the qualification of accountants under Rule 2-01 of
Regulation S-X of the Commission, and (ii) stating, as of the date
hereof (or, with respect to matters involving changes or developments
since the respective dates as of which specified financial information
is given in the Prospectus, as of a date not more than five days prior
to the date hereof), the conclusions and findings of such
24
firm with respect to the financial information and other matters
ordinarily covered by accountants' "comfort letters" to Underwriters
in connection with registered public offerings.
(i) With respect to the letter of Ernst & Young LLP referred to
in the preceding paragraph and delivered to the Representatives
concurrently with the execution of this Agreement (the "initial
letter"), the Company shall have furnished to the Representatives a
letter (the "bring-down letter") of such accountants, addressed to the
Underwriters and dated such Delivery Date (i) confirming that they are
independent public accountants within the meaning of the Securities
Act and are in compliance with the applicable requirements relating to
the qualification of accountants under Rule 2-01 of Regulation S-X of
the Commission, (ii) stating, as of the date of the bring-down letter
(or, with respect to matters involving changes or developments since
the respective dates as of which specified financial information is
given in the Prospectus, as of a date not more than five days prior to
the date of the bring-down letter), the conclusions and findings of
such firm with respect to the financial information and other matters
covered by the initial letter and (iii) confirming in all material
respects the conclusions and findings set forth in the initial letter.
(j) The Company shall have furnished to the Representatives a
certificate, dated such Delivery Date, of its Chairman of the Board,
its President or a Vice President and its Chief Financial Officer
stating that:
(i) The representations, warranties and agreements of the
Company in Section 1 are true and correct as of such Delivery
Date; the Company has complied with all its agreements contained
herein; and the conditions set forth in Sections 9(a) and 9(l)
have been fulfilled; and
(ii) They have carefully examined the Registration
Statement and the Prospectus and, in their opinion (A) as of the
Effective Date, the Registration Statement and Prospectus did not
include any untrue statement of a material fact and did not omit
to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, and (B)
since the Effective Date no event has occurred which should have
been set forth in a supplement or amendment to the Registration
Statement or the Prospectus.
(k) Each Selling Stockholder (or the Custodian or one or more
attorneys-in-fact on behalf of the Selling Stockholders) shall have
furnished to the Representatives on the Delivery Date a certificate,
dated the Delivery Date, signed by, or on behalf of, the Selling
Stockholder (or the Custodian or one or more attorneys-in-fact)
stating that the representations, warranties and agreements of the
Selling Stockholder contained herein are true and correct as of the
Delivery Date
25
and that the Selling Stockholder has complied with all agreements
contained herein to be performed by the Selling Stockholder at or
prior to the Delivery Date.
(l) (i) Neither the Company nor the Subsidiary shall have
sustained since the date of the latest audited financial statements
included in the Prospectus any loss or interference with its business
from fire, explosion, flood or other calamity, whether or not covered
by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or contemplated
in the Prospectus or (ii) since such date there shall not have been
any change in the capital stock or long-term debt of the Company or
the Subsidiary or any change, or any development involving a
prospective change, in or affecting the general affairs, management,
financial position, stockholders' equity or results of operations of
the Company and the Subsidiary, taken as a whole, otherwise than as
set forth or contemplated in the Prospectus, the effect of which, in
any such case described in clause (i) or (ii), is, in the judgment of
the Representatives, so material and adverse as to make it
impracticable or inadvisable to proceed with the public offering or
the delivery of the Stock being delivered on such Delivery Date on the
terms and in the manner contemplated in the Prospectus.
(m) Subsequent to the execution and delivery of this Agreement
there shall not have occurred any of the following: (i) trading in
securities generally on the New York Stock Exchange or the American
Stock Exchange or in the over-the-counter market shall have been
suspended or minimum prices shall have been established on any such
exchange or such market by the Commission, by such exchange or by any
other regulatory body or governmental authority having jurisdiction,
(ii) a banking moratorium shall have been declared by Federal or state
authorities, (iii) the United States shall have become engaged in
hostilities, there shall have been an escalation in hostilities
involving the United States or there shall have been a declaration of
a national emergency or war by the United States or (iv) there shall
have occurred such a material adverse change in general economic,
political or financial conditions (or the effect of international
conditions on the financial markets in the United States shall be
such) as to make it, in the judgment of a majority in interest of the
several Underwriters, impracticable or inadvisable to proceed with the
public offering or delivery of the Stock being delivered on such
Delivery Date on the terms and in the manner contemplated in the
Prospectus.
(n) The National Market System shall have approved the Stock for
listing, subject only to official notice of issuance and evidence of
satisfactory distribution.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably
satisfactory to counsel for the Underwriters.
10. Indemnification and Contribution.
26
(a) The Company shall indemnify and hold harmless each Underwriter,
its officers and employees and each person, if any, who controls any Underwriter
within the meaning of the Securities Act, from and against any loss, claim,
damage or liability, joint or several, or any action in respect thereof
(including, but not limited to, any loss, claim, damage, liability or action
relating to purchases and sales of Stock), to which that Underwriter, officer,
employee or controlling person may become subject, under the Securities Act or
otherwise, insofar as such loss, claim, damage, liability or action arises out
of, or is based upon, (i) any untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus or in any amendment or supplement thereto, (ii) the
omission or alleged omission to state in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or in any amendment or supplement
thereto, or in any Blue Sky Application any material fact required to be stated
therein or necessary to make the statements therein not misleading or (iii) any
act or failure to act or any alleged act or failure to act by any Underwriter in
connection with, or relating in any manner to, the Stock or the offering
contemplated hereby, and which is included as part of or referred to in any
loss, claim, damage, liability or action arising out of or based upon matters
covered by clause (i) or (ii) above (provided that the Company shall not be
liable under this clause (iii) to the extent that it is determined in a final
judgment by a court of competent jurisdiction that such loss, claim, damage,
liability or action resulted directly from any such acts or failures to act
undertaken or omitted to be taken by such Underwriter through its gross
negligence or willful misconduct), and shall reimburse each Underwriter and each
such officer, employee or controlling person promptly upon demand for any legal
or other expenses reasonably incurred by that Underwriter, officer, employee or
controlling person in connection with investigating or defending or preparing to
defend against any such loss, claim, damage, liability or action as such
expenses are incurred; provided, however, that the Company shall not be liable
in any such case to the extent that any such loss, claim, damage, liability or
action arises out of, or is based upon, any untrue statement or alleged untrue
statement or omission or alleged omission made in any Preliminary Prospectus,
the Registration Statement or the Prospectus, or in any such amendment or
supplement, in reliance upon and in conformity with written information
concerning such Underwriter furnished to the Company through the Representatives
by or on behalf of any Underwriter specifically for inclusion therein, which
information consists solely of the information specified in Section 10(h). The
foregoing indemnity agreement is in addition to any liability which the Company
may otherwise have to any Underwriter or to any officer, employee or controlling
person of that Underwriter.
(b) The Selling Stockholders, severally and not jointly, shall
indemnify and hold harmless each Underwriter, its officers and employees, and
each person, if any, who controls any Underwriter within the meaning of the
Securities Act, from and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof (including, but not limited to, any
loss, claim, damage, liability or action relating to purchases and sales of
Stock), to which that Underwriter, officer, employee or controlling person may
become subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage, liability or action arises out of, or is based upon, (i) any
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the Prospectus or in any
amendment or supplement thereto or (ii) the omission or alleged omission to
state in any Preliminary Prospectus, Registration Statement or the Prospectus,
or in any amendment or supplement thereto, any material fact required
27
to be stated therein or necessary to make the statements therein not misleading,
and shall reimburse each Underwriter, its officers and employees and each such
controlling person for any legal or other expenses reasonably incurred by that
Underwriter, its officers and employees or controlling persons in connection
with investigating or defending or preparing to defend against any such loss,
claim, damage, liability or action as such expenses are incurred; provided,
however, that the Underwriters agree that for indemnity obligations not covered
by Section 10(c), the Underwriters shall not seek indemnification under this
Section 10(b) from a Selling Stockholder unless the Underwriters shall first
have sought indemnity from the Company under Section 10(a) and the Company has
not agreed to satisfy such request for indemnification in full within 30 days;
provided further, that the Selling Stockholders shall not be liable in any such
case to the extent that any such loss, claim, damage, liability or action arises
out of, or is based upon, any untrue statement or alleged untrue statement or
omission or alleged omission made in any Preliminary Prospectus, the
Registration Statement or the Prospectus or in any such amendment or supplement
in reliance upon and in conformity with written information concerning such
Underwriter furnished to the Company through the Representatives by or on behalf
of any Underwriter specifically for inclusion therein, which information
consists solely of the information specified in Section 10(h). The foregoing
indemnity agreement is in addition to any liability which the Selling
Stockholders may otherwise have to any Underwriter or any officer, employee or
controlling person of that Underwriter.
(c) The Selling Stockholders, severally and not jointly, shall
indemnify and hold harmless each Underwriter, its officers and employees, and
each person, if any, who controls any Underwriter within the meaning of the
Securities Act, from and against any loss, claim, damage or liability, or any
action in respect thereof (including, but not limited to, any loss, claim,
damage, liability or action relating to purchases and sales of Stock), to which
that Underwriter, officer, employee or controlling person may become subject,
under the Securities Act or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any untrue statement or
alleged untrue statement of a material fact contained in any Preliminary
Prospectus, the Registration Statement or the Prospectus or in any amendment or
supplement thereto or (ii) the omission or alleged omission to state in any
Preliminary Prospectus, Registration Statement or the Prospectus, or in any
amendment or supplement thereto, any material fact required to be stated therein
or necessary to make the statements therein not misleading, and shall reimburse
each Underwriter, its officers and employees and each such controlling person
for any legal or other expenses reasonably incurred by that Underwriter, its
officers and employees or controlling persons in connection with investigating
or defending or preparing to defend against any such loss, claim, damage,
liability or action as such expenses are incurred, in each case to the extent,
but only to the extent, that such untrue statement or alleged untrue statement
or omission or alleged omission was made in the Registration Statement,
Prospectus or Preliminary Prospectus in reliance upon and in conformity with
written information furnished to the Company and the Representatives by such
Selling Stockholder expressly for use in the Registration Statement, Prospectus
or Preliminary Prospectus, as the case may be; provided, however, that the
Selling Stockholders shall not be liable in any such case to the extent that any
such loss, claim, damage, liability or action arises out of, or is based upon,
any untrue statement or alleged untrue statement or omission or alleged omission
made in any Preliminary Prospectus, the Registration Statement or the Prospectus
or in any such amendment or supplement in reliance upon and in conformity with
written information concerning such Underwriter furnished to the Company through
the Representatives by or on behalf of any
28
Underwriter specifically for inclusion therein which information consists solely
of the information specified in Section 10(h). The foregoing indemnity agreement
is in addition to any liability which the Selling Stockholders may otherwise
have to any Underwriter or any officer, employee or controlling person of that
Underwriter under applicable law.
(d) The Company and the Selling Stockholders shall not be liable in
any case arising under Section 10(a), (b) or (c) with respect to any Preliminary
Prospectus if at or prior to written confirmation of the sale of the Stock a
copy of the Prospectus (or the Prospectus as amended or supplemented) was not
sent or delivered to such person making the claim and the untrue statement or
omission or alleged untrue statement or omission in the Preliminary Prospectus
was corrected in the Prospectus (or the Prospectus as amended or supplemented),
unless the failure is the result of noncompliance by the Company with Section
6(c) hereof.
(e) Each Underwriter, severally and not jointly, shall indemnify and
hold harmless the Company, each Selling Stockholder, the Company's and each
Selling Stockholder's directors, officers and employees, and each person,
if any, who controls the Company or a Selling Stockholder within the
meaning of the Securities Act, from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof, to which the
Company or any such director, officer, employee or controlling person may
become subject, under the Securities Act or otherwise, insofar as such
loss, claim, damage, liability or action arises out of, or is based upon,
(i) any untrue statement or alleged untrue statement of a material fact
contained (A) in any Preliminary Prospectus, the Registration Statement or
the Prospectus or in any amendment or supplement thereto, or (B) in any
Blue Sky Application or (ii) the omission or alleged omission to state in
any Preliminary Prospectus, the Registration Statement or the Prospectus,
or in any amendment or supplement thereto, or in any Blue Sky Application
any material fact required to be stated therein or necessary to make the
statements therein not misleading, but in each case only to the extent that
the untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written
information concerning such Underwriter furnished to the Company through
the Representatives by or on behalf of that Underwriter specifically for
inclusion therein, and shall reimburse the Company and any such director,
officer, employee or controlling person for any legal or other expenses
reasonably incurred by the Company or any such director, officer, employee
or controlling person in connection with investigating or defending or
preparing to defend against any such loss, claim, damage, liability or
action as such expenses are incurred. The foregoing indemnity agreement is
in addition to any liability which any Underwriter may otherwise have to
the Company or a Selling Stockholder or any such director, officer,
employee or controlling person under applicable law.
(f) Promptly after receipt by an indemnified party under this Section
10 of notice of any claim or the commencement of any action, the indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 10, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 10 except to the extent it has
been materially prejudiced by such failure and,
29
provided further, that the failure to notify the indemnifying party shall not
relieve it from any liability which it may have to an indemnified party
otherwise than under this Section 10. If any such claim or action shall be
brought against an indemnified party, and it shall notify the indemnifying party
thereof, the indemnifying party shall be entitled to participate therein and, to
the extent that it wishes, jointly with any other similarly notified
indemnifying party, to assume the defense thereof with counsel reasonably
satisfactory to the indemnified party. After notice from the indemnifying party
to the indemnified party of its election to assume the defense of such claim or
action, the indemnifying party shall not be liable to the indemnified party
under this Section 10 for any legal or other expenses subsequently incurred by
the indemnified party in connection with the defense thereof other than
reasonable costs of investigation; provided, however, that the Representatives
shall have the right to employ counsel to represent jointly the Representatives
and those other Underwriters and their respective officers, employees and
controlling persons who may be subject to liability arising out of any claim in
respect of which indemnity may be sought by the Underwriters against the Company
or any Selling Stockholder under this Section 10 if, in the reasonable judgment
of the Representatives, it is advisable for the Representatives and those
Underwriters, officers, employees and controlling persons to be jointly
represented by separate counsel, and in that event the fees and expenses of such
separate counsel shall be paid by the Company or the Selling Stockholders. No
indemnifying party shall (i) without the prior written consent of the
indemnified parties (which consent shall not be unreasonably withheld), settle
or compromise or consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding, or (ii) be liable for any settlement of any such action
effected without its written consent (which consent shall not be unreasonably
withheld), but if settled with the consent of the indemnifying party or if there
be a final judgment for the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment.
(g) If the indemnification provided for in this Section 10 shall for
any reason be unavailable to or insufficient to hold harmless an indemnified
party under Section 10(a) or 10(b) in respect of any loss, claim, damage or
liability, or any action in respect thereof, referred to therein, then each
indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof, (i) in
such proportion as shall be appropriate to reflect the relative benefits
received by the Company and the Selling Stockholders on the one hand and the
Underwriters on the other from the offering of the Stock or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company and
the Selling Stockholders on the one hand and the Underwriters on the other with
respect to the statements or omissions which resulted in such loss, claim,
damage or liability, or action in respect thereof, as well as any other relevant
equitable considerations. The relative benefits received by the Company and the
Selling Stockholders on the one hand and the Underwriters on the other with
respect to such offering shall be deemed to be in the same proportion as the
total net proceeds from
30
the offering of the Stock purchased under this Agreement (before deducting
expenses) received by the Company and the Selling Stockholders, on the one hand,
and the total underwriting discounts and commissions received by the
Underwriters with respect to the shares of the Stock purchased under this
Agreement, on the other hand, bear to the total gross proceeds from the offering
of the shares of the Stock under this Agreement, in each case as set forth in
the table on the cover page of the Prospectus. The relative fault shall be
determined by reference to whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company , the Selling Stockholders or the
Underwriters, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company, the Selling Stockholders and the Underwriters agree that it would
not be just and equitable if contributions pursuant to this Section 10(g) were
to be 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 into account the equitable considerations referred to herein. The
amount paid or payable by an indemnified party as a result of the loss, claim,
damage or liability, or action in respect thereof, referred to above in this
Section 10(g) shall be deemed to include, for purposes of this Section 10(g),
any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 10(g), no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Stock underwritten by it and distributed to the public was
offered to the public exceeds the amount of any damages which such Underwriter
has otherwise paid or become liable to pay by reason of any untrue or alleged
untrue statement or omission or alleged omission. Notwithstanding the provisions
of this Section 10, the aggregate liability of each of the Selling Stockholders
under the indemnity and contribution provisions of this Section 10 and for any
breach of representations and warranties under Section 2 shall be limited to an
amount equal to the net proceeds of the offering (before deducting expenses)
received by such Selling Stockholder. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute as
provided in this Section 10(g) are several in proportion to their respective
underwriting obligations and not joint.
(h) The Underwriters severally confirm and the Company acknowledges
that the statements with respect to the public offering of the Stock by the
Underwriters set forth on the cover page of, and the concession and reallowance
figures appearing under the caption "Underwriting" in, the Prospectus are
correct and constitute the only information concerning such Underwriters
furnished in writing to the Company by or on behalf of the Underwriters
specifically for inclusion in the Registration Statement and the Prospectus.
11. Defaulting Underwriters.
If, on either Delivery Date, any Underwriter defaults in the
performance of its obligations under this Agreement, the remaining non-
defaulting Underwriters shall be obligated to purchase the Stock which the
defaulting Underwriter agreed but failed to purchase on such Delivery Date in
the respective proportions which the number of shares of the Firm Stock set
forth opposite the name of each remaining non-defaulting Underwriter in Schedule
1 hereto bears to the total
31
number of shares of the Firm Stock set forth opposite the names of all the
remaining non-defaulting Underwriters in Schedule 1 hereto; provided, however,
that the remaining non-defaulting Underwriters shall not be obligated to
purchase any of the Stock on such Delivery Date if the total number of shares of
the Stock which the defaulting Underwriter or Underwriters agreed but failed to
purchase on such date exceeds 9.09% of the total number of shares of the Stock
to be purchased on such Delivery Date, and any remaining non-defaulting
Underwriter shall not be obligated to purchase more than 110% of the number of
shares of the Stock which it agreed to purchase on such Delivery Date pursuant
to the terms of Section 3. If the foregoing maximums are exceeded, the remaining
non-defaulting Underwriters, or those other underwriters satisfactory to the
Representatives who so agree, shall have the right, but shall not be obligated,
to purchase, in such proportion as may be agreed upon among them, all the Stock
to be purchased on such Delivery Date. If the remaining Underwriters or other
Underwriters satisfactory to the Representatives do not elect to purchase the
shares which the defaulting Underwriter or Underwriters agreed but failed to
purchase on such Delivery Date, this Agreement (or, with respect to the Second
Delivery Date, the obligation of the Underwriters to purchase, and of the
Company to sell, the Option Stock) shall terminate without liability on the part
of any non-defaulting Underwriter or the Company or the Selling Stockholders,
except that the Company will continue to be liable for the payment of expenses
to the extent set forth in Sections 8 and 13. As used in this Agreement, the
term "Underwriter" includes, for all purposes of this Agreement unless the
context requires otherwise, any party not listed in Schedule 1 hereto who,
pursuant to this Section 11, purchases Firm Stock which a defaulting Underwriter
agreed but failed to purchase.
Nothing contained herein shall relieve a defaulting Underwriter of any
liability it may have to the Company and the Selling Stockholders for damages
caused by its default. If other underwriters are obligated or agree to purchase
the Stock of a defaulting or withdrawing Underwriter, either the Representatives
or the Company may postpone the Delivery Date for up to seven full business days
in order to effect any changes that in the opinion of counsel for the Company or
counsel for the Underwriters may be necessary in the Registration Statement, the
Prospectus or in any other document or arrangement.
12. Termination. The obligations of the Underwriters hereunder may
be terminated by the Representatives by notice given to and received by the
Company and the Selling Stockholders prior to delivery of and payment for the
Firm Stock if, prior to that time, any of the events described in Sections 9(l)
or 9(m) shall have occurred or if the Underwriters shall decline to purchase the
Stock for any reason permitted under this Agreement.
13. Reimbursement of Underwriters' Expenses. If the Company or any
Selling Stockholder shall fail to tender the Stock for delivery to the
Underwriters by reason of any failure, refusal or inability on the part of the
Company or the Selling Stockholders to perform any agreement on its part to be
performed, or because any other condition of the Underwriters' obligations
hereunder required to be fulfilled by the Company or the Selling Stockholders is
not fulfilled, the Company and the Selling Stockholders will reimburse the
Underwriters for all reasonable out-of-pocket expenses (including fees and
disbursements of counsel) incurred by the Underwriters in connection with this
Agreement and the proposed purchase of the Stock, and upon demand the Company
and the Selling Stockholders shall pay the full amount thereof to the
32
Representative(s). If this Agreement is terminated pursuant to Section 11 by
reason of the default of one or more Underwriters, neither the Company nor any
Selling Stockholder shall be obligated to reimburse any defaulting Underwriter
on account of those expenses.
14. Notices, etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by mail,
telex or facsimile transmission to Xxxxxx Brothers Inc., Three World
Financial Center, New York, New York 10285, Attention: Syndicate
Department (Fax: 000-000-0000), with a copy, in the case of any notice
pursuant to Section 10(f), to the Director of Litigation, Office of
the General Counsel, Xxxxxx Brothers Inc., Three World Financial
Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000;
(b) if to the Company, shall be delivered or sent by mail, telex
or facsimile transmission to the address of the Company set forth in
the Registration Statement, Attention: Xxxxxxx X. Xxxxxxx, General
Counsel (Fax: 650/000-0000);
(c) if to any Selling Stockholder, shall be delivered or sent by
mail, telex or facsimile transmission to such Selling Stockholder at
the address set forth on Schedule 2 hereto;
provided, however, that any notice to an Underwriter pursuant to Section 10(f)
shall be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its acceptance telex to the
Representatives, which address will be supplied to any other party hereto by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Company and
the Selling Stockholders shall be entitled to act and rely upon any request,
consent, notice or agreement given or made on behalf of the Underwriters by
Xxxxxx Brothers Inc. on behalf of the Representatives and the Company and the
Underwriters shall be entitled to act and rely upon any request, consent, notice
or agreement given or made on behalf of the Selling Stockholders by the
Custodian or the Attorney-in-fact appointed pursuant to the Power of Attorney.
15. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the Underwriters, the Company, the
Selling Stockholders and their respective personal representatives and
successors. This Agreement and the terms and provisions hereof are for the sole
benefit of only those persons, except that (A) the representations, warranties,
indemnities and agreements of the Company and the Selling Stockholders contained
in this Agreement shall also be deemed to be for the benefit of the person or
persons, if any, who control any Underwriter within the meaning of Section 15 of
the Securities Act and (B) the indemnity agreement of the Underwriters contained
in Section 10(e) of this Agreement shall be deemed to be for the benefit of
directors of the Company, officers of the Company who have signed the
Registration statement, employees of the Company and any person controlling the
Company within the meaning of Section 15 of the Securities Act and for persons
related to the Selling Stockholders (as specified in Section 10(e)). Nothing in
this Agreement is intended or shall be construed to give
33
any person, other than the persons referred to in this Section 15, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision contained herein.
16. Survival. The respective indemnities, representations,
warranties and agreements of the Company, the Selling Stockholders and the
Underwriters contained in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall survive the delivery of and
payment for the Stock and shall remain in full force and effect, regardless of
any investigation made by or on behalf of any of them or any person controlling
any of them.
17. Definition of the Terms "Business Day" and "Subsidiary." For
purposes of this Agreement, (a) "business day" means each Monday, Tuesday,
Wednesday, Thursday or Friday which is not a day on which banking institutions
in New York are generally authorized or obligated by law or executive order to
close and (b) "subsidiary" has the meaning set forth in Rule 405 of the Rules
and Regulations.
18. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of New York.
19. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
20. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
34
If the foregoing correctly sets forth the agreement between the
Company, the Selling Stockholders and the Underwriters, please indicate your
acceptance in the space provided for that purpose below.
Very truly yours,
Tularik Inc.
By________________________________
Xxxxxxx X. Xxxxxxx
Vice President, General Counsel and Secretary
The Selling Stockholders named in Schedule 2 to
this Agreement:
By________________________________
Attorney-in-Fact
Accepted:
XXXXXX BROTHERS INC.
X.X. XXXXXX SECURITIES INC.
CHASE SECURITIES INC.
XXXXXX XXXXXX PARTNERS LLC
WARBURG DILLON READ LLC
For themselves and as Representatives
of the several Underwriters named
in Schedule 1 hereto
By XXXXXX BROTHERS INC.
By __________________________________
Authorized Representative
SCHEDULE 1
Number of
Shares of
Underwriters Firm Stock
------------ -----------
Xxxxxx Brothers Inc.
X.X. Xxxxxx Securities Inc.
Chase Securities Inc.
Xxxxxx Xxxxxx Partners LLC
Warburg Dillon Read LLC
Total 4,500,000
===========
SCHEDULE 2
Number of Shares Number of Shares
Selling Stockholders of Firm Stock of Option Stock
-------------------- ---------------- ----------------
Total 1,500,000 225,000
========= ========
