EXHIBIT 1.1
__________ Shares
TULARIK INC.
Common Stock
U.S. UNDERWRITING AGREEMENT
---------------------------
______________, 1999
▇▇▇▇▇▇ Brothers Inc.
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC
▇.▇. ▇▇▇▇▇▇ Securities Inc.
Warburg Dillon Read LLC
As Representatives of the several
U.S. Underwriters named in Schedule 1,
c/▇ ▇▇▇▇▇▇ Brothers Inc.
Three World ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
Tularik Inc., a Delaware corporation (the "Company"), proposes to sell
__________ shares (the "Firm Stock") of the Company's Common Stock, par value
$0.001 per share (the "Common Stock"). In addition, the Company proposes to
grant to the Underwriters named in Schedule 1 hereto (the "U.S. Underwriters")
an option to purchase up to an additional __________ shares of the Common Stock
on the terms and for the purposes set forth in Section 2 (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 by the U.S. Underwriters.
It is understood by all parties that the Company is concurrently entering
into an agreement dated the date hereof (the "International Underwriting
Agreement") providing for the sale by the Company of ____ shares of Common Stock
(including the over-allotment option thereunder) (the "International Stock")
through arrangements with certain underwriters outside the United States (the
"International Managers"), for whom ▇▇▇▇▇▇ Brothers Inc., ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC,
▇.▇. ▇▇▇▇▇▇ Securities Inc. and Warburg Dillon Read LLC, are acting as lead
managers. The U.S. Underwriters and the International Managers simultaneously
are entering into an agreement between the U.S. and international underwriting
syndicates (the "Agreement Between U.S. Underwriters and International
Managers") which provides for, among other things, the transfer of shares of
Common Stock between the two syndicates. One form of prospectus will be used in
connection with the offering and sale of shares of Common Stock contemplated by
the foregoing relating to both the Stock and the International Stock. Except as
used in Sections 2, 3, 4, 9 and 10 herein, and except as the context may
otherwise require, references herein to the Stock shall include
all the shares which may be sold pursuant to either this Agreement or the
International Underwriting Agreement.
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 U.S. 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 "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 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 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 U.S.
Underwriter specifically for inclusion therein.
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(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 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 15), 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 U.S. Underwriters hereunder and under the
International Underwriting Agreement have been duly and validly
authorized and, when issued and delivered against payment therefor as
provided herein and in the International Underwriting Agreement, 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) Each of this Agreement and the International Agreement have
been duly authorized, executed and delivered by the Company.
(g) The execution, delivery and performance of this Agreement
and the International Underwriting Agreement by the Company and the
consummation 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 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
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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 or foreign securities laws in connection with the
purchase and distribution of the Stock by the U.S. Underwriters and
the International Managers, 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 or the International Underwriting
Agreement by the Company and the consummation of the transactions
contemplated hereby and thereby.
(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
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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 7(g)
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 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 ▇▇▇▇ 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
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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.
(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
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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 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.
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(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 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 United States
Investment Company Act of 1940, as amended, and the rules and
regulations of the Commission thereunder.
(bb) The Company has reviewed, and is continuing to review, its
operations and products to evaluate the extent to which the business
or operations of the Company or the Subsidiary will be affected by the
Year 2000 Problem (that is, any significant risk that computer
hardware or software applications used by the Company or the
Subsidiary will not in the case of dates or time periods occurring
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after December 31, 1999, function at least as effectively as in the
case of dates or time periods occurring prior to January 1, 2000); as
a result of such review, (i) the Company has no reason to believe, and
does not believe, that (A) there are any issues related to the
Company's or the Subsidiary's preparedness to address the Year 2000
Problem that are of a character required to be described or referred
to in the Registration Statement or Prospectus which have not been
accurately described in the Registration Statement or Prospectus and
(B) the Year 2000 Problem will 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, or result in any material loss or interference with the
business or operations of the Company or the Subsidiary, taken as a
whole; and (ii) to the Company's knowledge, the suppliers, vendors,
customers or other material third parties used or served by the
Company or the Subsidiary are addressing or will address the Year 2000
Problem in a timely manner, except to the extent that a failure to
address the Year 2000 Problem by any supplier, vendor, customer or
material third party would not 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.
2. Purchase of the Stock by the U.S. 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 __________ shares of
the Firm Stock to the several U.S. Underwriters, and each of the U.S.
Underwriters, severally and not jointly, agrees to purchase the number of shares
of the Firm Stock set opposite that U.S. Underwriter's name in Schedule 1
hereto. The respective purchase obligations of the U.S. Underwriters with
respect to the Firm Stock shall be rounded among the U.S. Underwriters to avoid
fractional shares, as the Representatives may determine.
In addition, the Company grants to the U.S. Underwriters an option to
purchase up to __________ shares of Option Stock. Such option is granted for
the purpose of covering over-allotments in the sale of Firm Stock and is
exercisable as provided in Section 4 hereof. Shares of Option Stock shall be
purchased severally for the account of the U.S. Underwriters in proportion to
the number of shares of Firm Stock set opposite the name of such U.S.
Underwriters in Schedule 1 hereto. The respective purchase obligations of each
U.S. Underwriter with respect to the Option Stock shall be adjusted by the
Representatives so that no U.S. Underwriter 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 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 and in the International Underwriting Agreement.
3. Offering of Stock by the U.S. Underwriters.
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Upon authorization by the Representatives of the release of the Firm
Stock, the several U.S. Underwriters propose to offer the Firm Stock for sale
upon the terms and conditions set forth in the Prospectus.
It is understood that __________ shares of the Firm Stock will
initially be reserved by the several U.S. Underwriters for offer and sale upon
the terms and conditions set forth in the Prospectus and in accordance with the
rules and regulations of the National Association of Securities Dealers, Inc. to
employees and persons having business relationships with the Company and the
Subsidiary who have heretofore delivered to the Representatives offers to
purchase shares of Firm Stock in form satisfactory to the Representatives, and
that any allocation of such Firm Stock among such persons will be made in
accordance with timely directions received by the Representatives from the
Company; provided, that under no circumstances will the Representatives or any
U.S. Underwriter be liable to the Company or to any such person for any action
taken or omitted in good faith in connection with such offering to employees and
persons having business relationships with the Company and the Subsidiary. It is
further understood that any shares of such Firm Stock which are not purchased by
such persons will be offered by the U.S. Underwriters to the public upon the
terms and conditions set forth in the Prospectus.
Each U.S. Underwriter agrees that, except to the extent permitted by
the Agreement Between U.S. Underwriters and International Managers, it will not
offer or sell any of the Stock outside of the United States.
4. Delivery of and Payment for the Stock. Delivery of and payment
for the Firm Stock shall be made at the office of Cooley Godward LLP, Five Palo
Alto Square, ▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 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 shall deliver or cause to be delivered certificates representing the
Firm Stock to the Representatives for the account of each U.S. Underwriter
against payment to or upon the order of the Company 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 U.S. 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 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 2 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 by the Representatives. 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
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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 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 4 (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 shall deliver or cause to be
delivered the certificates representing the Option Stock to the Representatives
for the account of each U.S. Underwriter against payment to or upon the order of
the Company 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 U.S. 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
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.
5. 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;
11
(b) To furnish promptly to each of the Representatives and to
counsel for the U.S. Underwriters a signed copy of the Registration
Statement as originally filed 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 supplemental prospectus and to prepare and furnish
without charge to each U.S. 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 U.S.
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
12
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 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 180 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 ▇▇▇▇▇▇
Brothers Inc.; and to cause each officer and director of the Company
to furnish to the Representatives, prior to the First Delivery Date, a
letter or letters, in form and substance satisfactory to counsel for
the U.S. Underwriters, pursuant to which each such person shall agree
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 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
for a period of 180 days from the date of the Prospectus, without the
prior written consent of ▇▇▇▇▇▇ Brothers Inc.;
13
(j) Prior to the Effective Date, to apply for the inclusion 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 United States
Investment Company Act of 1940, as amended, and the rules and
regulations of the Commission thereunder.
6. 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, the
Agreement Between U.S. Underwriters and International Managers, and the
Supplemental Agreement Among U.S. Underwriters and any other related documents
in connection with the offering, purchase, sale and delivery of the Stock; (e)
the costs of distributing the terms of agreement relating to the organization of
the domestic underwriting syndicate and selling group to the members thereof by
mail, telex or other means of communication; (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 5 and of preparing,
printing and distributing a Blue Sky Memorandum (including related fees and
expenses of counsel to the U.S. Underwriters); and (i) all other costs and
expenses incident to the performance of the obligations of the Company under
this Agreement; provided that, except as provided in this Section 6 and in
Section 11, the U.S. 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 U.S. Underwriters.
7. Conditions of U.S. Underwriters' Obligations. The respective
obligations of the U.S. Underwriters hereunder are subject to the accuracy, when
made and on each Delivery Date, of the representations and warranties of the
Company contained herein, to the performance by the Company of its 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 5(a); no stop order suspending
the effectiveness of the Registration Statement or any part thereof
shall have been issued and no proceeding 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.
14
(b) No U.S. Underwriter or International Manager 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 ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel for the U.S.
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
International Underwriting Agreement, 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
U.S. Underwriters, and the Company shall have furnished to such
counsel all documents and information that they may reasonably request
to enable them to pass upon such matters.
(d) ▇▇▇▇▇▇ Godward LLP shall have furnished to the
Representatives its written opinion, as counsel to the Company,
addressed to the U.S. 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 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;
15
(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 and the International Underwriting
Agreement have each been duly authorized, executed and delivered
by the Company;
(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
16
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
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 or
the International Underwriting 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 United States Investment Company
Act of 1940, as amended and the rules and regulations of the
Commission thereunder;
(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 also have
furnished to the Representatives a written statement, addressed to the
U.S.
17
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 U.S. 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) ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ and Crew LLP, and the Science &
Technology Law Group shall each have furnished to the Representatives
a written opinion, as intellectual property counsel to the Company,
addressed to the U.S. Underwriters and dated such Delivery Date, in
form and substance reasonably satisfactory to the Representatives, to
the effect that they serve 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
18
Patent Information contains an untrue statement of material fact or
omits to states 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.
(i) 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.
(ii) 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" and together with the
U.S. Patent Rights, the "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-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.
(iii) To the best of such counsel's knowledge, for each of
the United States patents and patents 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.
(iv) Such counsel has reviewed all or portions of certain
patent estates 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
19
necessary to conduct the current or prospective business of the
Company as specified in the Registration Statement and
Prospectus.
(v) 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 actions, suit,
proceeding or claim by others that the Company is infringing a
patent.
(vi) 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.
(f) The Representatives shall have received from ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇, counsel for the U.S. 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.
(g) 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 U.S. 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 firm with respect to the financial information and
other matters ordinarily covered by accountants' "comfort letters" to
U.S. Underwriters in connection with registered public offerings.
(h) 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
U.S. 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
20
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.
(i) 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 7(a) and 7(j)
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.
(j) (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.
(k) 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
21
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 U.S. 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.
(l) The National Market System shall have approved the Stock for
inclusion, subject only to official notice of issuance and evidence of
satisfactory distribution.
(m) The closing under the International Underwriting Agreement
shall have occurred concurrently with the closing hereunder on the
First Delivery Date.
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 U.S. Underwriters.
8. Indemnification and Contribution.
(a) The Company shall indemnify and hold harmless each U.S.
Underwriter, its officers and employees and each person, if any, who
controls any U.S. 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 U.S. 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
U.S. 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
22
resulted directly from any such acts or failures to act undertaken or
omitted to be taken by such U.S. Underwriter through its gross
negligence or willful misconduct), and shall reimburse each U.S.
Underwriter and each such officer, employee or controlling person
promptly upon demand for any legal or other expenses reasonably
incurred by that U.S. 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 U.S. Underwriter furnished to the Company through the
Representatives by or on behalf of any U.S. Underwriter specifically
for inclusion therein, which information consists solely of the
information specified in Section 9(e). The foregoing indemnity
agreement is in addition to any liability which the Company may
otherwise have to any U.S. Underwriter or to any officer, employee or
controlling person of that U.S. Underwriter.
[In addition to the foregoing indemnification of all the U.S.
Underwriters, including ▇▇▇▇▇▇ Brothers Inc., the Company agrees to indemnify
and hold harmless ▇▇▇▇▇▇ Brothers Inc., and each person who controls ▇▇▇▇▇▇
Brothers Inc. within the meaning of Section 15 of the Securities Act or Section
20(a) of the Exchange Act, from and against any and all losses, claims, damages,
liabilities and expenses incurred by ▇▇▇▇▇▇ Brothers Inc. arising out of or
based upon ▇▇▇▇▇▇ Brothers Inc.'s serving as "qualified independent underwriter"
for the offering, including reasonable costs of investigation and fees and
disbursements of counsel retained by ▇▇▇▇▇▇ Brothers Inc. to represent it in its
capacity as "qualified independent underwriter."]
(b) Each U.S. Underwriter, severally and not jointly, shall
indemnify and hold harmless the Company, its officers and employees,
each of its directors, and each person, if any, who controls the
Company 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 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 U.S. Underwriter furnished to the
Company through the Representatives by or on behalf of that U.S.
Underwriter specifically for inclusion therein, and shall reimburse
the Company and any such director, officer or controlling person for
any legal or other expenses reasonably incurred by the Company or any
such director, officer 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
23
foregoing indemnity agreement is in addition to any liability which
any U.S. Underwriter may otherwise have to the Company or any such
director, officer, employee or controlling person.
(c) Promptly after receipt by an indemnified party under this
Section 8 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 8, 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 8 except to the extent it has been materially prejudiced
by such failure and, 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 8.
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 8 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 U.S. 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 U.S. Underwriters against the Company under this
Section 8 if, in the reasonable judgment of the Representatives, it is
advisable for the Representatives and those U.S. 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. 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.
(d) If the indemnification provided for in this Section 8 shall
for any reason be unavailable to or insufficient to hold harmless an
indemnified party under Section 8(a) or 8(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 on the one hand and the U.S. Underwriters on
the other
24
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 on the one hand and the U.S. 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 on the one hand and the U.S. Underwriters on
the other with respect to such offering shall be deemed to be in the
same proportion as the total net proceeds from the offering of the
Stock purchased under this Agreement (before deducting expenses)
received by the Company, on the one hand, and the total underwriting
discounts and commissions received by the U.S. 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 or the U.S. 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 and the
U.S. Underwriters agree that it would not be just and equitable if
contributions pursuant to this Section were to be determined by pro
rata allocation (even if the U.S. 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 shall be deemed to include, for
purposes of this Section 8(d), 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 8(d), no U.S. 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 U.S.
Underwriter has otherwise paid or become liable to pay by reason of
any untrue or alleged untrue statement or omission or alleged
omission. 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 U.S. Underwriters' obligations to contribute as
provided in this Section 8(d) are several in proportion to their
respective underwriting obligations and not joint.
(e) The U.S. Underwriters severally confirm and the Company
acknowledges that the statements with respect to the public offering
of the Stock by the U.S. Underwriters set forth on the cover page, and
the concession and reallowance figures appearing under the caption
"Underwriting" in, the Prospectus are correct and constitute the only
information concerning such U.S. Underwriters furnished in writing to
the Company by or on behalf of the U.S. Underwriters specifically for
inclusion in the Registration Statement and the Prospectus.
9. Defaulting U.S. Underwriters.
If, on either Delivery Date, any U.S. Underwriter defaults in the
performance of its obligations under this Agreement, the remaining non-
defaulting U.S. Underwriters shall be
25
obligated to purchase the Stock which the defaulting U.S. 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 U.S. Underwriter in Schedule 1 hereto bears to the total number
of shares of the Firm Stock set forth opposite the names of all the remaining
non-defaulting U.S. Underwriters in Schedule 1 hereto; provided, however, that
the remaining non-defaulting U.S. 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 U.S. Underwriter or U.S. 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 U.S. 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 U.S. 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 U.S. Underwriters or other U.S. Underwriters satisfactory to the
Representatives do not elect to purchase the shares which the defaulting U.S.
Underwriter or U.S. Underwriters agreed but failed to purchase on such Delivery
Date, this Agreement (or, with respect to the Second Delivery Date, the
obligation of the U.S. Underwriters to purchase, and of the Company to sell, the
Option Stock) shall terminate without liability on the part of any non-
defaulting U.S. Underwriter or the Company, except that the Company will
continue to be liable for the payment of expenses to the extent set forth in
Sections 6 and 11. As used in this Agreement, the term "U.S. 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 9, purchases Firm Stock which a defaulting U.S. Underwriter agreed but
failed to purchase.
Nothing contained herein shall relieve a defaulting U.S. Underwriter
of any liability it may have to the Company for damages caused by its default.
If other underwriters are obligated or agree to purchase the Stock of a
defaulting or withdrawing U.S. 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 U.S. Underwriters may be necessary in the Registration
Statement, the Prospectus or in any other document or arrangement.
10. Termination. The obligations of the U.S. Underwriters hereunder
may be terminated by the Representatives by notice given to and received by the
Company prior to delivery of and payment for the Firm Stock if, prior to that
time, any of the events described in Sections 7(j) or 7(k), shall have occurred
or if the U.S. Underwriters shall decline to purchase the Stock for any reason
permitted under this Agreement.
11. Reimbursement of U.S. Underwriters' Expenses. If the Company
shall fail to tender the Stock for delivery to the U.S. Underwriters by reason
of any failure, refusal or inability on the part of the Company to perform any
agreement on its part to be performed, or because any other condition of the
U.S. Underwriters' obligations hereunder required to be fulfilled by the Company
is not fulfilled, the Company will reimburse the U.S. Underwriters for all
reasonable out-of-pocket expenses (including fees and disbursements of counsel)
incurred by the
26
U.S. Underwriters in connection with this Agreement and the proposed purchase of
the Stock, and upon demand the Company shall pay the full amount thereof to the
Representative(s). If this Agreement is terminated pursuant to Section 9 by
reason of the default of one or more U.S. Underwriters, the Company shall not be
obligated to reimburse any defaulting U.S. Underwriter on account of those
expenses.
12. Notices, etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the U.S. Underwriters, shall be delivered or sent by
mail, telex or facsimile transmission to ▇▇▇▇▇▇ Brothers Inc., Three
World Financial Center, New York, New York 10285, Attention: Syndicate
Department (Fax: ▇▇▇-▇▇▇-▇▇▇▇), with a copy, in the case of any notice
pursuant to Section 11(d), to the Director of Litigation, Office of
the General Counsel, ▇▇▇▇▇▇ Brothers Inc., Three World Financial
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇;
(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: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, General
Counsel (Fax: 650/▇▇▇-▇▇▇▇);
provided, however, that any notice to an U.S. Underwriter pursuant to Section
8(c) shall be delivered or sent by mail, telex or facsimile transmission to such
U.S. 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 shall
be entitled to act and rely upon any request, consent, notice or agreement given
or made on behalf of the U.S. Underwriters by ▇▇▇▇▇▇ Brothers Inc. on behalf of
the Representatives.
13. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the U.S. Underwriters, the Company,
and their respective 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 contained
in this Agreement shall also be deemed to be for the benefit of the person or
persons, if any, who control any U.S. Underwriter within the meaning of Section
15 of the Securities Act and for the benefit of each International Manager (and
controlling persons thereof) who offers or sells any shares of Common Stock in
accordance with the terms of the Agreement Between U.S. Underwriters and
International Managers and (B) the indemnity agreement of the U.S. Underwriters
contained in Section 8(b) of this Agreement shall be deemed to be for the
benefit of directors, officers and employees of the Company and any person
controlling the Company within the meaning of Section 15 of the Securities Act.
Nothing in this Agreement is intended or shall be construed to give any person,
other than the persons referred to in this Section 13, any legal or equitable
right, remedy or claim under or in respect of this Agreement or any provision
contained herein.
27
14. Survival. The respective indemnities, representations,
warranties and agreements of the Company and the U.S. 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.
15. 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.
16. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of New York.
17. 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.
18. 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.
If the foregoing correctly sets forth the agreement between the
Company and the U.S. Underwriters, please indicate your acceptance in the space
provided for that purpose below.
Very truly yours,
Tularik Inc.
By
----------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Chief Executive Officer
Accepted:
▇▇▇▇▇▇ Brothers Inc.
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC
▇.▇. ▇▇▇▇▇▇ Securities Inc.
Warburg Dillon Read LLC
For themselves and as Representatives
of the several U.S. Underwriters named
28
in Schedule 1 hereto
By ▇▇▇▇▇▇ Brothers Inc.
By
-------------------------
Authorized Representative
By ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC
By
-------------------------
Authorized Representative
By ▇.▇. ▇▇▇▇▇▇ Securities Inc.
By
-------------------------
Authorized Representative
By Warburg Dillon Read LLC
By
-------------------------
Authorized Representative
29