Exhibit 1.1
Exelixis, Inc.
Common Stock
Underwriting
Agreement
October 4, 2006
Goldman, Sachs &
Co.
Cowen and Company, LLC
Banc of America Securities
LLC
Piper Jaffray &
Co.
As representatives of the several
Underwriters
named in Schedule I
hereto,
c/o Goldman, Sachs & Co.,
85 Broad Street,
New York, New York 10004.
Ladies and Gentlemen:
Exelixis, Inc., a Delaware
corporation (the “Company”), proposes, subject to the
terms and conditions stated herein, to issue and sell to the
Underwriters named in Schedule I hereto (the
“Underwriters”) an aggregate of 10,000,000 shares (the
“Firm Shares”) and, at the election of the
Underwriters, up to 1,500,000 additional shares (the
“Optional Shares”) of Common Stock, par value $0.001
per share (the “Stock”) of the Company (the Firm Shares
and the Optional Shares that the Underwriters elect to purchase
pursuant to Section 2 hereof being collectively called the
“Shares”).
1. The Company represents and
warrants to, and agrees with, each of the Underwriters
that:
(a) A registration statement on Form
S-3 (File No. 333-119984) (the “Initial Registration
Statement”) in respect of the Shares has been filed with the
Securities and Exchange Commission (the “Commission”);
the Initial Registration Statement and any post-effective amendment
thereto, each in the form heretofore delivered to you and,
excluding exhibits to the Initial Registration Statement, but
including all documents incorporated by reference in the prospectus
included therein, to you for each of the other Underwriters have
been declared effective by the Commission in such form; other than
a registration statement, if any, increasing the size of the
offering (a “Rule 462(b) Registration Statement”),
filed pursuant to Rule 462(b) under the Securities Act of 1933, as
amended (the “Act”), which became effective upon
filing, no other document with respect to the Initial Registration
Statement or document incorporated by reference therein, other than
pre-effective
amendments to the Initial
Registration Statement or amendments to such incorporated
documents, has heretofore been filed, or transmitted for filing,
with the Commission (other than prospectuses filed pursuant to Rule
424(b) of the rules and regulations of the Commission under the
Act, each in the form heretofore delivered to you); and no stop
order suspending the effectiveness of the Initial Registration
Statement, any post-effective amendment thereto or any part thereof
or the Rule 462(b) Registration Statement, if any, has been issued
and no proceeding for that purpose has been initiated or, to the
knowledge of the Company, threatened by the Commission (the base
prospectus filed as part of the Initial Registration Statement, in
the form in which it has most recently been filed with the
Commission on or prior to the date of this Agreement, is
hereinafter called the “Basic Prospectus”; any
preliminary prospectus (including any preliminary prospectus
supplement) relating to the Shares filed with the Commission
pursuant to Rule 424(b) under the Act is hereinafter called a
“Preliminary Prospectus”; the various parts of the
Initial Registration Statement and the Rule 462(b) Registration
Statement, if any, including all exhibits thereto and including any
prospectus supplement relating to the Shares that is filed with the
Commission and deemed by virtue of Rule 430B under the Act to be
part of the Initial Registration Statement, each as amended at the
time such part of the Initial Registration Statement became
effective or such part of the Rule 462(b) Registration Statement,
if any, became or hereafter becomes effective, are hereinafter
collectively called the “Registration Statement”; the
Basic Prospectus, as amended and supplemented immediately prior to
the Applicable Time (as defined in Section 1(c) hereof), is
hereinafter called the “Pricing Prospectus”; the form
of the final prospectus relating to the Shares filed with the
Commission pursuant to Rule 424(b) under the Act in accordance with
Section 5(a) hereof is hereinafter called the
“Prospectus”; any reference herein to the Basic
Prospectus, the Pricing Prospectus, any Preliminary Prospectus or
the Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to
Item 12 of Form S-3, as of the date of such prospectus; any
reference to any amendment or supplement to the Basic Prospectus,
any Preliminary Prospectus or the Prospectus shall be deemed to
refer to and include any post-effective amendment to the
Registration Statement, any prospectus supplement relating to the
Shares filed with the Commission pursuant to Rule 424(b) under the
Act and any documents filed under the Securities Exchange Act of
1934, as amended (the “Exchange Act”), and incorporated
therein, in each case after the date of the Basic Prospectus, such
Preliminary Prospectus or the Prospectus, as the case may be; any
reference to any amendment to the Registration Statement shall be
deemed to refer to and include any annual report of the Company
filed pursuant to Section 13(a) or 15(d) of the Exchange Act
after the effective date of the Registration Statement that is
incorporated by reference in the Registration Statement; and any
“issuer free writing prospectus” as defined in Rule 433
under the Act relating to the Shares is hereinafter called an
“Issuer Free Writing Prospectus”);
(b) No order preventing or
suspending the use of any Preliminary Prospectus or any Issuer Free
Writing Prospectus has been issued by the Commission, and each
Preliminary Prospectus, at the time of filing thereof, conformed in
all material respects to the requirements of the Act and the rules
and regulations of the Commission thereunder, and did not 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, in the light of the circumstances under which
they were made, not misleading; provided, however, that this
representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with
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information furnished in writing to
the Company by an Underwriter through Goldman, Sachs & Co.
expressly for use therein;
(c) For the purposes of this
Agreement, the “Applicable Time” is 9:30 P.M. (Eastern
time) on the date of this Agreement. The Pricing Prospectus, as of
the Applicable Time, did not include any 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, not misleading; and each Issuer Free
Writing Prospectus listed on Schedule II(a) hereto does not
conflict with the information contained in the Registration
Statement, the Pricing Prospectus or the Prospectus and each such
Issuer Free Writing Prospectus, as supplemented by and taken
together with the Pricing Prospectus as of the Applicable Time, did
not include any 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, not misleading; provided, however, that this representation
and warranty shall not apply to statements or omissions made in an
Issuer Free Writing Prospectus in reliance upon and in conformity
with information furnished in writing to the Company by an
Underwriter through Goldman, Sachs & Co. expressly for use
therein;
(d) The documents incorporated by
reference in the Pricing Prospectus and Prospectus, when they
became effective or were filed with the Commission, as the case may
be, conformed in all material respects to the requirements of the
Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder, and none of such
documents 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; and any
further documents so filed and incorporated by reference in the
Prospectus or any further amendment or supplement thereto, when
such documents become effective or are filed with the Commission,
as the case may be, will conform in all material respects to the
requirements of the Act or the Exchange Act, as applicable, and the
rules and regulations of the Commission thereunder and will not
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 ,
however , that this representation and warranty shall not
apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by
an Underwriter through Goldman, Sachs & Co. expressly for
use therein; and no such documents were filed with the Commission
since the Commission’s close of business on the business day
immediately prior to the date of this Agreement and prior to the
execution of this Agreement, except as set forth on Schedule II(b)
hereto;
(e) The Registration Statement
conforms, and the Prospectus and any further amendments or
supplements to the Registration Statement and the Prospectus will
conform, in all material respects to the requirements of the Act
and the rules and regulations of the Commission thereunder and do
not and will not, as of the applicable effective date as to each
part of the Registration Statement 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, however, that this
representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information
furnished in writing to the Company by an Underwriter through
Goldman, Sachs & Co. expressly for use therein;
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(f) Neither the Company nor any of
its subsidiaries has sustained since the date of the latest audited
financial statements included or incorporated by reference in the
Pricing 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 Pricing Prospectus; and, since the date as
of which information is given in the Pricing Prospectus, there has
not been any change in the capital stock (excluding stock option
grants in the ordinary course of business pursuant to the
Company’s current stock option plans, the issuance of shares
pursuant to the Company’s employee stock purchase plan and
the exercise of any outstanding stock options or warrants) or
long-term debt of the Company or any of its subsidiaries or any
material adverse change, or any development involving a prospective
material adverse change, in or affecting the general affairs,
management, financial position, stockholders’ equity or
results of operations of the Company and its subsidiaries taken as
a whole (a “Material Adverse Effect”), otherwise than
as set forth or contemplated in the Pricing Prospectus;
(g) The Company has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of the State of Delaware, with power and
authority to own its properties and conduct its business as
described in the Pricing Prospectus and has been duly qualified as
a foreign corporation for the transaction of business and is in
good standing under the laws of each other jurisdiction in which it
owns or leases properties or conducts any business so as to require
such qualification, or is subject to no material liability or
disability by reason of the failure to be so qualified in any such
jurisdiction;
(h) The Company has an authorized
capitalization as set forth in the Registration Statement, Pricing
Prospectus and Prospectus and all of the issued shares of capital
stock of the Company have been duly and validly authorized and
issued and are fully paid and non-assessable and conform to the
description of the capital stock contained in the Pricing
Prospectus and Prospectus;
(i) The Shares have been duly and
validly authorized, and, when the Shares are issued and delivered
pursuant to this Agreement, such Shares will be duly and validly
issued and fully paid and non-assessable; the Shares conform to the
description thereof contained in the Registration Statement,
Pricing Prospectus and Prospectus;
(j) The issue and sale of the Shares
and the compliance by the Company with all of the provisions of
this Agreement and the consummation of the transactions herein
contemplated 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
any of its subsidiaries is a party or by which the Company or any
of its subsidiaries is bound or to which any of the property or
assets of the Company or any of its subsidiaries is subject, other
than any conflict, breach, violation or default that would not,
individually or in the aggregate, have a Material Adverse Effect,
nor will such action result in any violation of the provisions of
the Certificate of Incorporation or Bylaws of the Company or any
statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or
any of its properties; and no consent, approval, authorization,
order, registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale of
the
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Shares or the consummation by the
Company of the transactions contemplated by this Agreement, except
such as have been obtained under the Act and such consents,
approvals, authorizations, registrations or qualifications as may
be required under state securities or Blue Sky laws or the bylaws
and rules and regulations of the National Association of Securities
Dealers in connection with the purchase and distribution of the
Shares by the Underwriters;
(k) Other than as set forth in the
Pricing Prospectus and Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property of the Company or
any of its subsidiaries is the subject, which, if determined
adversely to the Company or any of its subsidiaries, would
individually or in the aggregate have a Material Adverse Effect;
and, to the best of the Company’s knowledge, no such
proceedings are threatened or contemplated by governmental
authorities or threatened by others;
(l) Neither the Company nor any of
its subsidiaries is (i) in violation of its Certificate of
Incorporation or Bylaws or (ii) in default in the performance
or observance of any material obligation, agreement, covenant or
condition contained in any indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument to which it is a
party or by which it or any of its properties may be bound, other
than any such defaults, in the case of clause (ii), which
would not, individually or in the aggregate, have a Material
Adverse Effect;
(m) The statements set forth in the
Pricing Prospectus and Prospectus under the caption
“Description of Capital Stock”, insofar as they purport
to constitute a summary of the terms of the Stock, and under the
captions “Plan of Distribution” and
“Underwriting”, insofar as they purport to describe the
provisions of the laws and documents referred to therein, are
accurate, complete and fair in all material respects;
(n) Neither the Company nor any of
its subsidiaries is, and after giving effect to the offering and
sale of the Shares and the application of the proceeds thereof
neither will be, an “investment company”, as such term
is defined in the Investment Company Act of 1940, as amended (the
“Investment Company Act”);
(o) At the earliest time after the
filing of the Initial Registration Statement that the Company or
another offering participant made a bona fide offer (within
the meaning of Rule 164(h)(2) under the Act) of the Shares,
the Company was not an “ineligible issuer” as defined
in Rule 405 under the Act;
(p) Ernst & Young LLP, who
have certified certain financial statements of the Company and its
subsidiaries and have audited the effectiveness of the
Company’s internal control over financial reporting and
management’s assessment thereof, are independent public
accountants as required by the Act and the rules and regulations of
the Commission thereunder;
(q) The Company maintains a system
of internal control over financial reporting (as such term is
defined in Rule 13a-15(f) of the Exchange Act) designed by, or
under the supervision of, the Company’s principal executive
officer and principal financial officer to provide reasonable
assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. The
Company’s internal control over financial reporting was
effective as of the end of the quarter ended June 30, 2006 and
the Company was not aware
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of any material weaknesses in its
internal control over financial reporting at such time. As of the
date hereof, to the knowledge of the Company, the Company’s
internal control over financial reporting is effective and the
Company is not aware of any material weakness in its internal
control over financial reporting, it being understood that the
management of the Company has not conducted an evaluation of the
effectiveness of the Company’s internal control over
financial reporting for any period after June 30,
2006;
(r) Other than as disclosed in the
Company’s Quarterly Report on Form 10-Q for the quarter ended
March 31, 2006, between the date of the latest audited
financial statements included or incorporated by reference in the
Pricing Prospectus and June 30, 2006, there has been no change
in the Company’s internal control over financial reporting
that has materially affected, or is reasonably likely to materially
affect, the Company’s internal control over financial
reporting;
(s) The Company maintains disclosure
controls and procedures (as such term is defined in Rule 13a-15(e)
of the Exchange Act) that comply with the requirements of the
Exchange Act, such disclosure controls and procedures have been
designed to ensure that material information relating to the
Company and its subsidiaries is made known to the Company’s
principal executive officer and principal financial officer by
others within those entities; such disclosure controls and
procedures were effective as of the end of the quarter ended
June 30, 2006. As of the date hereof, to the knowledge of the
Company, such disclosure controls and procedures are effective, it
being understood that the management of the Company has not
conducted an evaluation of the effectiveness of the Company’s
disclosure controls and procedures for any period after
June 30, 2006;
(t) Each of the Company and its
subsidiaries has good and marketable title in fee simple to all
material real property and good and marketable title to all
material tangible personal property owned by the Company or such
subsidiary, in each case free and clear of all liens, encumbrances
and defects except such as are described in the Pricing Prospectus
or such as do not, individually or in the aggregate, have a
Material Adverse Effect; and any real property and buildings held
under lease by each of the Company and its subsidiaries are held
under valid, subsisting and enforceable leases (subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other
laws of general applicability relating to or affecting
creditors’ rights and to general equity principles, and
except as enforcement of indemnification and contribution
provisions thereof may be limited by applicable law) 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 or such subsidiary; and
(u) Except as disclosed in the
Pricing Prospectus and Prospectus and to the best knowledge of the
Company, each of the Company and its subsidiaries owns or has
valid, binding and enforceable licenses or other rights to use, or
believes that it can acquire on reasonable terms rights to use, any
patents, trademarks, trade names, service marks, service names,
copyrights and other proprietary intellectual property rights
(“Intellectual Property”) necessary to conduct the
business of the Company or such subsidiary in the manner in which
it is being conducted, without any conflict with the rights or
others, except for such conflicts as do not and will not have a
Material Adverse Effect; the information contained in the
Registration Statement and Pricing Prospectus and Prospectus
concerning patents issued to, or patent applications filed on
behalf of, the Company or its subsidiaries is accurate in
all
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material respects; and, except as
described in the Pricing Prospectus and Prospectus, the Company has
not received any notice from any other person of infringement of or
conflict with (and knows of no such infringement of or conflict
with) asserted rights of others with respect to any Intellectual
Property or any trade secrets, proprietary information, inventions,
know-how, processes and procedure owned or used by or licensed to
the Company, which if determined adversely to the Company would,
individually or in the aggregate, have a Material Adverse
Effect.
2. Subject to the terms and
conditions herein set forth, (a) the Company agrees to issue
and sell to each of the Underwriters, and each of the Underwriters
agrees, severally and not jointly, to purchase from the Company, at
a purchase price per share of $7.896, the number of Firm Shares set
forth opposite the name of such Underwriter in Schedule I hereto
and (b) in the event and to the extent that the Underwriters
shall exercise the election to purchase Optional Shares as provided
below, the Company agrees to issue and sell to each of the
Underwriters, and each of the Underwriters agrees, severally and
not jointly, to purchase from the Company, at the purchase price
per share set forth in clause (a) of this Section 2, that
portion of the number of Optional Shares as to which such election
shall have been exercised (to be adjusted by you so as to eliminate
fractional shares) determined by multiplying such number of
Optional Shares by a fraction, the numerator of which is the
maximum number of Optional Shares which such Underwriter is
entitled to purchase as set forth opposite the name of such
Underwriter in Schedule I hereto and the denominator of which is
the maximum number of Optional Shares that all of the Underwriters
are entitled to purchase hereunder.
The Company hereby grants to the
Underwriters the right to purchase at their election up to
1,500,000 Optional Shares, at the purchase price per share set
forth in the paragraph above, for the sole purpose of covering
sales of shares in excess of the number of Firm Shares, provided
that the purchase price per Optional Share shall be reduced by an
amount per share equal to any dividends or distributions declared
by the Company and payable on the Firm Shares but not payable on
the Optional Shares. Any such election to purchase Optional Shares
may be exercised only by written notice from you to the Company,
given within a period of 30 calendar days after the date of this
Agreement, setting forth the aggregate number of Optional Shares to
be purchased and the date on which such Optional Shares are to be
delivered, as determined by you but in no event earlier than the
First Time of Delivery (as defined in Section 4 hereof) or,
unless you and the Company otherwise agree in writing, earlier than
two or later than ten business days after the date of such
notice.
3. Upon the authorization by you of
the release of the Shares, the several Underwriters propose to
offer the Shares for sale upon the terms and conditions set forth
in the Prospectus.
4. (a) The Shares to be
purchased by each Underwriter hereunder, in definitive form, and in
such authorized denominations and registered in such names as
Goldman, Sachs & Co. may request upon at least forty-eight
hours’ prior notice to the Company shall be delivered by or
on behalf of the Company to Goldman, Sachs & Co., through
the facilities of the Depository Trust Company (“DTC”),
for the account of such Underwriter, against payment by or on
behalf of such Underwriter of the purchase price therefor by wire
transfer of Federal (same-day) funds to the account specified by
the Company to Goldman, Sachs & Co. at least forty-eight
hours in advance. The Company will cause the certificates
representing the Shares to be made available for checking and
packaging at least twenty-four hours prior to the Time of Delivery
(as defined below) at the office of DTC or its designated custodian
(the “Designated Office”). The time and date of such
delivery and payment
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shall be, with respect to the Firm Shares, 9:30
A.M., New York City time, on October 11, 2006 or such other
time and date as Goldman, Sachs & Co. and the Company may
agree upon in writing, and, with respect to the Optional Shares,
9:30 A.M., New York time, on the date specified by Goldman,
Sachs & Co. in the written notice given by Goldman,
Sachs & Co. of the Underwriters’ election to
purchase such Optional Shares, or such other time and date as
Goldman, Sachs & Co. and the Company may agree upon in
writing. Such time and date for delivery of the Firm Shares is
herein called the “First Time of Delivery”, such time
and date for delivery of the Optional Shares, if not the First Time
of Delivery, is herein called the “Second Time of
Delivery”, and each such time and date for delivery is herein
called a “Time of Delivery”.
(b) The documents to be delivered at
each Time of Delivery by or on behalf of the parties hereto
pursuant to Section 8 hereof, including the cross receipt for
the Shares and any additional documents requested by the
Underwriters pursuant to Section 8(l) hereof, will be
delivered at the offices of Cooley Godward Kronish LLP, 3175
Hanover Street, Palo Alto, California 94304 (the “Closing
Location”), and the Shares will be delivered at the
Designated Office, all at such Time of Delivery. A meeting will be
held at the Closing Location at 3:00 P.M., San Francisco,
California time, on the New York Business Day next preceding such
Time of Delivery, at which meeting the final drafts of the
documents to be delivered pursuant to the preceding sentence will
be available for review by the parties hereto. For the purposes of
this Section 4, “New York Business Day” shall mean
each Monday, Tuesday, Wednesday, Thursday and 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.
5. The Company agrees with each of
the Underwriters:
(a) To prepare the Prospectus in a
form approved by you and to file such Prospectus pursuant to Rule
424(b) under the Act not later than the Commission’s close of
business on the second business day following the date of this
Agreement or such earlier time as may be required under the Act; to
make no further amendment or any supplement to the Registration
Statement, the Basic Prospectus or the Prospectus prior to the last
Time of Delivery which shall be disapproved by you promptly after
reasonable notice thereof; to file promptly all material required
to be filed by the Company with the Commission pursuant to Rule
433(d) under the Act within the time required by such Rule; to file
promptly all reports and any definitive proxy or information
statements required to be filed by the Company with the Commission
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act
subsequent to the date of the Prospectus and for so long as the
delivery of a prospectus (or in lieu thereof, the notice referred
to in Rule 173(a) under the Act) is required in connection with the
offering or sale of the Shares; to advise you, promptly after it
receives notice thereof, of the time when any amendment to the
Registration Statement has been filed or becomes effective or any
amendment or supplement to the Prospectus has been filed and to
furnish you with copies thereof; to advise you, 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 other prospectus in respect of the
Shares, of the suspension of the qualification of the Shares 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 other prospectus or suspending any such
qualification, to promptly use its best efforts to obtain the
withdrawal of such order;
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(b) Promptly from time to time to
take such action as you may reasonably request to qualify the
Shares for offering and sale under the securities laws of such
jurisdictions as you 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 Shares, 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;
(c) Prior to 10:00 A.M., New York
City time, on the New York Business Day next succeeding the date of
this Agreement and from time to time, to furnish the Underwriters
with written and electronic copies of the Prospectus in New York
City in such quantities as you may reasonably request, and, if the
delivery of a prospectus (or in lieu thereof, the notice referred
to in Rule 173(a) under the Act) is required at any time prior to
the expiration of nine months after the time of issue of the
Prospectus in connection with the offering or sale of the Shares
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 (or in lieu thereof, the notice referred to in Rule
173(a) under the Act) is delivered, not misleading, or, if for any
other reason it shall be necessary during such same period to amend
or supplement the Prospectus or to file under the Exchange Act any
document incorporated by reference in the Prospectus in order to
comply with the Act or the Exchange Act, to notify you and upon
your request to file such document and to prepare and furnish
without charge to each Underwriter and to any dealer in securities
as many written and electronic copies as you may from time to time
reasonably request of an amended Prospectus or a supplement to the
Prospectus which will correct such statement or omission or effect
such compliance; and in case any Underwriter is required to deliver
a prospectus (or in lieu thereof, the notice referred to in Rule
173(a) under the Act) in connection with sales of any of the Shares
at any time nine months or more after the time of issue of the
Prospectus, upon your request but at the expense of such
Underwriter, to prepare and deliver to such Underwriter as many
written and electronic copies as you may request of an amended or
supplemented Prospectus complying with Section 10(a)(3) of the
Act;
(d) To make generally available to
its security holders as soon as practicable, but in any event not
later than eighteen months after the effective date of the
Registration Statement (as defined in Rule 158(c) under the Act),
an earnings statement of the Company and its subsidiaries (which
need not be audited) complying with Section 11(a) of the Act
and the rules and regulations of the Commission thereunder
(including, at the option of the Company, Rule 158);
(e) During the period beginning from
the date hereof and continuing to and including the date 90 days
after the date of the Prospectus (the “Lock-Up
Period”), not to offer, sell, contract to sell or otherwise
dispose of, except as provided hereunder, any securities of the
Company that are substantially similar to the Shares, including but
not limited to any securities that are convertible into or
exchangeable for, or that represent the right to receive, the Stock
or any such substantially similar securities (other than
(A) pursuant to the Company’s 2000 Equity Incentive
Plan, 2000 Non-Employee Directors’ Stock Option Plan, 2000
Employee Stock Purchase Plan or 401(k) plan or upon the conversion
or exchange of convertible or
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exchangeable securities outstanding
as of the date of this Agreement, or (B) following the date 45
days after the date of the Prospectus, up to an aggregate of 10% of
the Company’s outstanding Stock (as of immediately after the
offering and sale of the Shares) issued in connection with any
strategic transaction that includes a commercial relationship
involving the Company and other entities (including but not limited
to joint ventures, marketing or distribution arrangements,
collaboration agreements or intellectual property license
agreements) for cash to one or more of such entities that are party
to such transaction; provided, however, that in the case of
subclause (B) the recipients of such Stock shall agree, for
the benefit of the Underwriters, to be bound by the restrictions in
this Section 5(e); and provided, further, that the Company
agrees that it will not waive or amend during the Lock-Up Period
the lock-up and selling restrictions on the Stock purchased by
SmithKline Beecham Corporation contained in Sections 7.4 and
7.7 of that certain Stock Purchase and Stock Issuance Agreement
between the Company and SmithKline Beecham Corporation, dated as of
October 28, 2002, as amended pursuant to that certain First
Amendment to the Stock Purchase Agreement between SmithKline
Beecham Corporation D/B/A GlaxoSmithKline and the Company effective
October 28, 2002 by and between the Company and SmithKline
Beecham Corporation, dated as of January 10, 2005), without
the prior written consent of Goldman, Sachs &
Co.;
(f) If the Company elects to rely
upon Rule 462(b), the Company shall file a Rule 462(b) Registration
Statement with the Commission in compliance with Rule 462(b) by
10:00 P.M., Washington, D.C. time, on the date of this Agreement,
and the Company shall at the time of filing either pay the
Commission the filing fee for the Rule 462(b) Registration
Statement or give irrevocable instructions for the payment of such
fee pursuant to Rule 111(b) under the Act;
(g) To use the net proceeds received
by it from the sale of the Shares pursuant to this Agreement in the
manner specified in the Pricing Prospectus and Prospectus under the
caption “Use of Proceeds”; and
(h) Upon request of any Underwriter,
to furnish, or cause to be furnished, to such Underwriter an
electronic version of the Company’s trademarks, servicemarks
and corporate logo for use on the website, if any, operated by such
Underwriter for the purpose of facilitating the on-line offering of
the Shares (the “License”); provided, however, that the
License shall be used solely for the purpose described above, is
granted without any fee and may not be assigned or
transferred.
6. (a) The Company represents
and agrees that, without the prior consent of Goldman,
Sachs & Co., it has not made and will not make any offer
relating to the Shares that would constitute a “free writing
prospectus” as defined in Rule 405 under the Act; each
Underwriter represents and agrees that, without the prior consent
of the Company and Goldman, Sachs & Co., it has not made
and will not make any offer relating to the Securities that would
constitute a free writing prospectus; any such free writing
prospectus the use of which has been consented to by the Company
and Goldman, Sachs & Co. is listed on Schedule II(a)
hereto;
(b) The Company has complied and
will comply with the requirements of Rule 433 under the Act
applicable to any Issuer Free Writing Prospectus, including timely
filing with the Commission or retention where required and
legending; and
10
(c) The Company agrees that if at
any time following issuance of an Issuer Free Writing Prospectus
any event occurred or occurs as a result of which such Issuer Free
Writing Prospectus would conflict with the information in the
Registration Statement, the Pricing Prospectus or the Prospectus or
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 then prevailing, not
misleading, the Company will give prompt notice thereof to Goldman,
Sachs & Co. and, if requested by Goldman, Sachs &
Co., will prepare and furnish without charge to each Underwriter an
Issuer Free Writing Prospectus or other document which will correct
such conflict, statement or omission; provided, however, that this
representation and warranty shall not apply to any statements or
omissions in an Issuer Free Writing Prospectus made in reliance
upon and in conformity with information furnished in writing to the
Company by an Underwriter through Goldman, Sachs & Co.
expressly for use therein.
7. The Company covenants and agrees
with the several Underwriters that the Company will pay or cause to
be paid the following: (i) the fees, disbursements and
expenses of the Company’s counsel and accountants in
connection with the registration of the Shares under the Act and
all other expenses in connection with the preparation, printing and
filing of the Registration Statement, the Basic Prospectus, any
Preliminary Prospectus, any Issuer Free Writing Prospectus and the
Prospectus and any amendments and supplements thereto and the
mailing and delivering of copies thereof to the Underwriters and
dealers; (ii) the cost of printing or producing any Agreement
among Underwriters, this Agreement, any Blue Sky Memoranda, closing
documents (including any compilations thereof) and any other
documents in connection with the offering, purchase, sale and
delivery of the Shares; (iii) all expenses in connection with
the qualification of the Shares for offering and sale under state
securities laws as provided in Section 5(b) hereof, including
the reasonable fees and disbursements of counsel for the
Underwriters in connection with such qualification and in
connection with the Blue Sky survey(s); (iv) any filing fees
incident to, and the fees and disbursements of counsel for the
Underwriters in connection with, any required reviews by the
National Association of Securities Dealers, Inc. of the terms of
the sale of the Shares; (v) the cost of preparing certificates
for the Shares; (vi) the cost and charges of any transfer
agent or registrar or dividend disbursing agent; and
(vii) other costs and expenses incident to the performance of
its obligations hereunder which are not otherwise specifically
provided for in this Section. It is understood, however, that,
except as provided in this Section, and Sections 9 and 12 hereof,
the Underwriters will pay all of their own costs and expenses,
including the fees of their counsel, transfer taxes on resale of
any of the Shares by them, and any advertising expenses connected
with any offers they may make.
8. The obligations of the
Underwriters hereunder, as to the Shares to be delivered at each
Time of Delivery, shall be subject, in your discretion, to the
condition that all representations and warranties and other
statements of the Company herein are, at and as of such Time of
Delivery, true and correct, the condition that the Company shall
have performed all of its obligations hereunder theretofore to be
performed, and the following additional conditions:
(a) The Preliminary Prospectus and
Prospectus shall have been filed with the Commission pursuant to
Rule 424(b) within the applicable time period prescribed for such
filing by the rules and regulations under the Act and in accordance
with Section 5(a) hereof; al
