Exhibit 1.2
4,000,000 Shares
VIROPHARMA INCORPORATED
COMMON STOCK, $.002 PAR VALUE
UNDERWRITING AGREEMENT
November 14, 2001
November 14, 2001
Xxxxxx Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs and Mesdames:
VIROPHARMA INCORPORATED, a Delaware corporation (the "Company"), proposes
to issue and sell to Xxxxxx Xxxxxxx & Co. Incorporated (the "Underwriter")
4,000,000 shares of its Common Stock, $.002 par value (the "Shares"). The shares
of Common Stock, $.002 par value, of the Company to be outstanding after giving
effect to the sales contemplated hereby are hereinafter referred to as the
"Common Stock."
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (Registration No. 333-64482),
including a basic prospectus, relating to the securities registered thereon and
the offering thereof from time to time in accordance with Rule 415 under the
Securities Act of 1933, as amended (the "Securities Act"). Such registration
statement has been declared effective by the Commission and no post-effective
amendment to such registration statement has been filed as of the date of this
Agreement. A prospectus supplement relating to the Shares, the terms of the
offering thereof and the other matters set forth therein has been prepared and
will be filed pursuant to Rule 424 under the Securities Act in the form used to
confirm sales of the Shares (the "Prospectus Supplement"). The aforementioned
registration statement, as amended as of the date hereof, including the exhibits
thereto, is herein called the "Registration Statement," and the basic prospectus
included therein, as supplemented by the Prospectus Supplement, is herein called
the "Prospectus," in either case including the documents filed by the Company
with the Commission pursuant to the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), that are incorporated by reference therein.
1. Representations and Warranties. The Company represents and warrants to
and agrees with the Underwriter that:
(a) The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in effect,
and no proceedings for such purpose are pending before or threatened by the
Commission.
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(b) (i) Each document, if any, filed or to be filed pursuant to the
Exchange Act and incorporated by reference in the Prospectus complied, or
will comply when so filed, in all material respects with the Exchange Act
and the applicable rules and regulations of the Commission thereunder, (ii)
the Registration Statement, when it became effective, did not contain and,
as amended or supplemented, if applicable, will not contain any 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, (iii) the Registration Statement and the Prospectus comply and,
as amended or supplemented, if applicable, will comply in all material
respects with the Securities Act and the applicable rules and regulations
of the Commission thereunder and (iv) the Prospectus does not contain and,
as amended or supplemented, if applicable, will not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements therein, in the light of the circumstances under which
they were made, not misleading, except that the representations and
warranties set forth in this paragraph do not apply to statements or
omissions in the Registration Statement or the Prospectus based upon
information relating to the Underwriter furnished to the Company in writing
by you expressly for use therein.
(c) Each of the Company and its wholly owned subsidiary, VCO
Incorporated (the "Subsidiary"), has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the State of
Delaware, has the corporate power and authority to own its property and to
conduct its business as described in the Prospectus and is duly qualified
to transact business and is in good standing in each jurisdiction in which
the conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a material adverse effect
on the Company.
(d) Other than the Subsidiary, the Company does not own or control,
directly or indirectly, any interest in any other corporation, association,
or other business entity.
(e) This Agreement has been duly authorized, executed and delivered
by the Company.
(f) The authorized capital stock of the Company conforms as to legal
matters to the description thereof contained in the Prospectus.
(g) The shares of Common Stock outstanding prior to the issuance of
the Shares have been duly authorized and are validly issued, fully paid and
non-assessable.
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(h) The Shares have been duly authorized and, when issued and
delivered in accordance with the terms of this Agreement, will be validly
issued, fully paid and non-assessable, and the issuance of such Shares will
not be subject to any preemptive or similar rights.
(i) The execution and delivery by the Company of, and the performance
by the Company of its obligations under, this Agreement will not contravene
any provision of applicable law or the certificate of incorporation or
by-laws of the Company or any agreement or other instrument binding upon
the Company that is material to the Company or any judgment, order or
decree of any governmental body, agency or court having jurisdiction over
the Company, and no consent, approval, authorization or order of, or
qualification with, any governmental body or agency is required for the
performance by the Company of its obligations under this Agreement, except
such as may be required by the securities or Blue Sky laws of the various
states in connection with the offer and sale of the Shares.
(j) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company from that set forth in the Prospectus (exclusive
of any amendments or supplements thereto subsequent to the date of this
Agreement).
(k) There are no legal or governmental proceedings pending or
threatened to which the Company is a party or to which any of the
properties of the Company is subject that are required to be described in
the Registration Statement or the Prospectus and are not so described, or
any statutes, regulations, contracts or other documents that are required
to be described in the Registration Statement or the Prospectus or to be
filed as exhibits to the Registration Statement that are not described or
filed as required.
(l) The Company is not and, after giving effect to the offering and
sale of the Shares and the application of the proceeds thereof as described
in the Prospectus, will not be an "investment company" as such term is
defined in the Investment Company Act of 1940, as amended.
(m) The Company (i) is in compliance with any and all applicable
foreign, federal, state and local laws and regulations relating to the
protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants (including, without
limitation, all laws and regulations relating to biohazardous substances
materials or radioactive materials) ("Environmental Laws"), (ii) has
received all permits, licenses or other approvals required of it under
applicable Environmental Laws to conduct its business and (iii) is in
compliance with all terms and conditions of any such permit, license or
approval, except where such noncompliance with
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Environmental Laws, failure to receive required permits, licenses or other
approvals or failure to comply with the terms and conditions of such
permits, licenses or approvals would not, singly or in the aggregate, have
a material adverse effect on the Company.
(n) There are no costs or liabilities associated with Environmental
Laws (including, without limitation, any capital or operating expenditures
required for clean-up, closure of properties or compliance with
Environmental Laws or any permit, license or approval, any related
constraints on operating activities and any potential liabilities to third
parties) which would be reasonably expected, singly or in the aggregate, to
have a material adverse effect on the Company.
(o) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, (i) the Company has
not incurred any material liability or obligation, direct or contingent,
nor entered into any material transaction not in the ordinary course of
business; (ii) the Company has not purchased any of its outstanding capital
stock, nor declared, paid or otherwise made any dividend or distribution of
any kind on its capital stock other than ordinary and customary dividends;
and (iii) there has not been any material change in the capital stock,
short-term debt or long-term debt of the Company, except in each case as
described in the Prospectus.
(p) The Company has good and marketable title in fee simple to all
real property and good and marketable title to all personal property owned
by it which is material to the business of the Company, in each case 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 interfere with the use made and proposed to be
made of such property by the Company; and any real or personal property and
buildings held under lease by the Company are held by it 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, in each case except as described in
the Prospectus.
(q) The Company owns or possesses adequate licenses or other rights
to use the patents and patent applications, copyrights, trademarks, service
marks, trade names, technology and know-how (including trade secrets and
other unpatented and/or unpatentable proprietary rights) necessary (in any
material respect) to conduct its business in the manner described in the
Prospectus (collectively, the "Company Intellectual Property"); the Company
is not obligated to pay a royalty, grant a license, or provide other
consideration to any third party in connection with the Company
Intellectual Property other than as disclosed in the Prospectus, and,
except as disclosed in the Prospectus, the Company has not received any
notice of infringement or conflict with (and the
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Company does not know of any infringement or conflict with) asserted rights
of others with respect to the Company Intellectual Property, in each case
which would reasonably be expected to result in any material adverse effect
on the condition, financial or otherwise, or in the earnings, business or
operations of the Company; and, except as disclosed in the Prospectus, the
discoveries, inventions, products or processes of the Company referred to
in the Prospectus do not, to the best knowledge of the Company, infringe or
conflict with any right or patent of any third party, or any discovery,
invention, product or process which is the subject of a patent application
filed by any third party, known to the Company, which could reasonably be
expected to have a material adverse effect on the condition, financial or
otherwise, or in the earnings, business or operations of the Company.
Except as described in the Prospectus, no third party, including any
academic or governmental organization, possesses rights to the Company
Intellectual Property which, if exercised, could enable such party to
develop products competitive to those of the Company or could reasonably be
expected to have a material adverse effect on the ability of the Company to
conduct its business in the manner described in the Prospectus.
(r) The Company has duly and properly filed or caused to be filed
with the United States Patent and Trademark Office (the "PTO") and
applicable foreign and international patent authorities all patent
applications owned by the Company (the "Company Patent Applications"); in
connection with the filing of the Company Patent Applications, the Company
conducted reasonable investigations of the published literature and patent
references relating to the inventions claimed in such applications; to the
Company's knowledge, it has complied with the PTO's duty of candor and
disclosure for the Company Patent Applications and has made no
misrepresentation in the Company Patent Applications; the Company is
unaware of any facts material to a determination of patentability regarding
the Company Patent Applications not called to the attention of the PTO; the
Company is unaware of any facts not called to the attention of the PTO
which would preclude the grant of a patent for the Company Patent
Applications; and the Company has no knowledge of any facts which would
preclude it from having clear title to the Company Patent Applications.
(s) No material labor dispute with the employees of the Company or
the Subsidiary exists, except as described in or contemplated by the
Prospectus, or, to the knowledge of the Company or the Subsidiary, is
imminent; and neither the Company nor the Subsidiary is aware of any
existing, threatened or imminent labor disturbance by the employees of any
of its principal suppliers, manufacturers or contractors that could result
in any material adverse effect on the Company.
(t) The Company is insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are
prudent and customary in the business in which it is engaged; the Company
has not been
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refused any insurance coverage sought or applied for; and the Company has
no reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its business
at a cost that could not have a material adverse effect on the Company.
(u) The Company possesses all certificates, authorizations and
permits issued by the appropriate federal, state or foreign regulatory
authorities necessary to conduct its business as presently conducted,
including without limitation, all such certificates, authorizations and
permits required by the United States Food and Drug Administration (the
"FDA"), the Nuclear Regulatory Commission (the "NRC") or any other federal,
state or foreign agencies or bodies engaged in the regulation of
pharmaceuticals or biohazardous substances, except where the failure to
possess such certificates, authorizations and permits would not, singly or
in the aggregate, have a material adverse effect on the Company; and the
Company has not received any notice of proceedings relating to the
revocation or modification of any such certificate, authorization or permit
which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, could result in a material adverse effect on
the Company. The Company is in compliance in all material respects with all
applicable federal, state, local and foreign laws, regulations, orders and
decrees governing its business as currently conducted, including without
limitation, all regulations prescribed by the FDA, the NRC or any other
federal, state or foreign agencies or bodies engaged in the regulation of
pharmaceuticals, biohazardous substances or radioactive materials, except
where noncompliance would not, singly or in the aggregate, have a material
adverse effect on the Company.
(v) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management's general or specific
authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability; (iii) access to
assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(w) KPMG LLP are, and during the periods covering their report
included or incorporated by reference in the Registration Statement and the
Prospectus were, independent accountants with respect to the Company as
required by the Securities Act. The financial statements of the Company
(together with the related notes thereto) included or incorporated by
reference in the Registration Statement present fairly the financial
position and results of operations of the Company at the respective dates
and for the respective periods to which they apply, subject to normal
year-end adjustments. Such financial
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statements (together with the related notes thereto) have been prepared in
accordance with generally accepted accounting principles consistently
applied throughout the periods involved except as otherwise stated therein.
(x) The Company has filed a notification of listing of the shares on
the Nasdaq National Market.
(y) 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 file a registration
statement under the Securities Act with respect to any securities of the
Company or to require the Company to include such securities with the
Shares registered pursuant to the Registration Statement. All persons who
possess such rights have effectively waived them with respect to, or such
rights can not be exercised in respect of, the offering of the Shares.
(z) Each material contract, agreement and license to which the
Company is bound is legal, valid, binding, enforceable, and in full force
and effect against the Company, and to the knowledge of the Company, each
other party thereto. Neither the Company nor, to the Company's knowledge,
any other party is in breach or default with respect to any such contract,
agreement and license, and, to the Company's knowledge, no event has
occurred which with notice or lapse of time would constitute a breach or
default, or permit termination, modification, or acceleration, under any
such contract, agreement or license. No party has repudiated any provision
of any such contract, agreement or license.
2. Agreements to Sell and Purchase. The Company hereby agrees to sell to
the Underwriter, and the Underwriter, upon the basis of the representations and
warranties herein contained, but subject to the conditions hereinafter stated,
agrees to purchase from the Company the Shares at $20.70 a share (the "Purchase
Price").
The Company hereby agrees that, without the prior written consent of Xxxxxx
Xxxxxxx & Co. Incorporated, it will not, during the period ending 90 days after
the date of the Prospectus Supplement, (i) offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant to purchase, lend, or otherwise
transfer or dispose of, directly or indirectly, any shares of Common Stock or
any securities convertible into or exercisable or exchangeable for Common Stock
or (ii) enter into any swap or other arrangement that transfers to another, in
whole or in part, any of the economic consequences of ownership of the Common
Stock, whether any such transaction described in clause (i) or (ii) above is to
be settled by delivery of Common Stock or such other securities, in cash or
otherwise. The foregoing sentence shall not apply to (A) the Shares to be sold
hereunder; (B) the issuance by the Company of shares of Common Stock upon the
exercise of an option or warrant or the conversion of a security outstanding on
the date hereof of which the Underwriter has been advised in writing or
described in the Prospectus; (C) the
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issuance of additional options and restricted shares of Common Stock under the
Company's existing Stock Option and Restricted Share Plan, or any future equity
compensation plans, provided that such options are not exercisable during such
90 day period and that such restricted shares remain subject to restrictions
during such 90 day period which prohibit the sale of such shares by the holder
thereof; (D) the issuance of additional shares of the Common Stock under the
Company's Employee Stock Purchase Plan as in effect on the date hereof; or (E)
the issuance by the Company of shares of Common Stock under the stock purchase
agreement between the Company and American Home Products Corporation dated
December 9, 1999. The Underwriter acknowledges that discussions by the Company
during such 90 day period regarding the issuance of shares of the Company's
Common Stock following such 90 day period to a marketing, development or
manufacturing collaborator will not violate the terms of this paragraph.
3. Terms of Public Offering. The Company is advised by you that the
Underwriter proposes to make a public offering of the Shares as soon after the
date of this Agreement as in your judgment is advisable. The underwriter has
advised the Company that it expects to market and distribute the Shares in the
same general manner and extent as is customary for a firm commitment
underwritten securities offering of similar size and nature.
4. Payment and Delivery. Payment for the Shares shall be made to the
Company in Federal or other funds immediately available in New York City against
delivery of such Shares for the account of the Underwriter at 10:00 a.m., New
York City time, on November 19, 2001, or at such other time on the same or such
other date, not later than November 28, 2001, as shall be designated in writing
by you. The time and date of such payment are hereinafter referred to as the
"Closing Date". The Closing of the offering and sale of the Shares will be held
at the offices of Ropes & Xxxx, Xxx Xxxxxxxxxxxxx Xxxxx, Xxxxxx, XX 00000-0000.
Certificates for the Shares shall be in definitive form and registered in
such names and in such denominations as you shall request in writing not later
than one full business day prior to the Closing Date. The certificates
evidencing the Shares shall be delivered to you on the Closing Date for the
account of the Underwriter, with any transfer taxes payable in connection with
the transfer of the Shares to the Underwriter duly paid, against payment of the
Purchase Price therefor.
5. Conditions to the Underwriter's Obligations. The obligations of the
Company to sell the Shares to the Underwriter and the obligation of the
Underwriter to purchase and pay for the Shares on the Closing Date are subject
to the condition that the Registration Statement shall have become effective
prior to the date hereof.
The obligations of the Underwriter are subject to the following further
conditions:
(a) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date:
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(i) there shall not have occurred any downgrading, nor shall any
notice have been given of any intended or potential downgrading or of
any review for a possible change that does not indicate the direction
of the possible change, in the rating accorded any of the Company's
securities by any "nationally recognized statistical rating
organization," as such term is defined for purposes of Rule 436(g)(2)
under the Securities Act; and
(ii) there shall not have occurred any change, or any development
involving a prospective change, in the condition, financial or
otherwise, or in the earnings, business or operations of the Company
from that set forth in the Prospectus (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement) that, in
your judgment, is material and adverse and that makes it, in your
judgment, impracticable to market the Shares on the terms and in the
manner contemplated in the Prospectus.
(b) The Underwriter shall have received on the Closing Date a
certificate, dated such date and signed by an executive officer of the
Company, to the effect set forth in Section 5(a)(i) above and to the effect
that the representations and warranties of the Company contained in this
Agreement are true and correct as of such date and that the Company has
complied with all of the agreements and satisfied all of the conditions on
its part to be performed or satisfied hereunder on or before such date.
The officer signing and delivering such certificate may rely upon the best of
his or her knowledge as to proceedings threatened.
(c) The Underwriter shall have received on the Closing Date an
opinion of Xxxxxx Xxxxxxxx LLP, outside counsel for the Company, dated such
date, in a form satisfactory to the Underwriter.
(d) The Underwriter shall have received on the Closing Date an
opinion of Ropes & Xxxx, counsel for the Underwriter, dated such date, in a
form satisfactory to the Underwriter.
The opinion of Xxxxxx Xxxxxxxx LLP, described in Section 5(c) shall be
rendered to the Underwriter at the request of the Company and shall so
state therein.
(e) The Underwriter shall have received on the Closing Date a letter
dated such date, in form and substance satisfactory to the Underwriter,
from KPMG LLP, independent public accountants, containing statements and
information of the type ordinarily included in accountants' "comfort
letters" to underwriters with respect to the financial statements and
certain financial
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information contained in or incorporated by reference into the Registration
Statement and the Prospectus; provided that the letter shall use a "cut-off
date" not earlier than the date hereof.
6. Covenants of the Company. In further consideration of the agreements
of the Underwriter herein contained, the Company covenants with the Underwriter
as follows:
(a) To furnish you, without charge, three signed copies of the
Registration Statement (including exhibits thereto and documents
incorporated by reference) and to furnish to you in New York City, without
charge, prior to 10:00 a.m. New York City time on the business day next
succeeding the date of this Agreement and during the period mentioned in
Section 6(c) below, as many copies of the Prospectus, any documents
incorporated by reference, and any supplements and amendments thereto or to
the Registration Statement as you may reasonably request. The terms
"supplement" and "amendment" or "amend" as used in this Agreement shall
include all documents subsequently filed by the Company with the Commission
pursuant to the Exchange Act that are deemed to be incorporated by
reference in the Prospectus.
(b) Before amending or supplementing the Registration Statement or
the Prospectus, to furnish to you a copy of each such proposed amendment or
supplement and not to file any such proposed amendment or supplement to
which you reasonably object, and to file with the Commission within the
applicable period specified in Rule 424(b) under the Securities Act any
prospectus required to be filed pursuant to such Rule.
(c) If, during such period after the first date of the public
offering of the Shares as in the opinion of counsel for the Underwriter the
Prospectus is required by law to be delivered in connection with sales by
an Underwriter or dealer, any event shall occur or condition exist as a
result of which it is necessary to amend or supplement the Prospectus in
order to make the statements therein, in the light of the circumstances
when the Prospectus is delivered to a purchaser, not misleading, or if, in
the opinion of counsel for the Underwriter, it is necessary to amend or
supplement the Prospectus to comply with applicable law, forthwith to
prepare, file with the Commission and furnish, at its own expense, to the
Underwriter and to the dealers (whose names and addresses you will furnish
to the Company) to which Shares may have been sold by you on behalf of the
Underwriter and to any other dealers upon request, either amendments or
supplements to the Prospectus so that the statements in the Prospectus as
so amended or supplemented will not, in the light of the circumstances when
the Prospectus is delivered to a purchaser, be misleading or so that the
Prospectus, as amended or supplemented, will comply with law.
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(d) To endeavor to qualify the Shares for offer and sale under the
securities or Blue Sky laws of such jurisdictions as you shall reasonably
request.
(e) To make generally available to the Company's security holders and
to you as soon as practicable an earning statement covering the
twelve-month period ending December 31, 2002, that satisfies the provisions
of Section 11(a) of the Securities Act and the rules and regulations of the
Commission thereunder.
7. Expenses. Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, the Company agrees to
pay or cause to be paid all expenses incident to the performance of its
obligations under this Agreement, including: (i) the fees, disbursements and
expenses of the Company's counsel and the Company's accountants in connection
with the registration and delivery of the Shares under the Securities Act and
all other fees or expenses in connection with the preparation and filing of the
Registration Statement, any preliminary prospectus, the Prospectus and
amendments and supplements to any of the foregoing, including all printing costs
associated therewith, and the mailing and delivering of copies thereof to the
Underwriter and dealers, in the quantities hereinabove specified, (ii) all costs
and expenses related to the transfer and delivery of the Shares to the
Underwriter, including any transfer or other taxes payable thereon, (iii) all
costs and expenses incident to listing the Shares on the Nasdaq National Market,
(iv) the cost of printing certificates representing the Shares, (v) the costs
and charges of any transfer agent, registrar or depositary, (vi) the costs and
expenses of the Company relating to investor presentations on any "road show"
undertaken in connection with the marketing of the offering of the Shares,
including, without limitation, expenses associated with the production of road
show slides and graphics, fees and expenses of any consultants engaged in
connection with the road show presentations with the prior approval of the
Company, travel and lodging expenses of the representatives and officers of the
Company and any such consultants, and the cost of any aircraft chartered in
connection with the road show, and (vii) all other costs and expenses incident
to the performance of the obligations of the Company hereunder for which
provision is not otherwise made in this Section. It is understood, however, that
except as provided in this Section, Section 8 entitled "Indemnity and
Contribution", and the last paragraph of Section 10 below, the Underwriter will
pay all of its costs and expenses, including fees and disbursements of its
counsel, stock transfer taxes payable on resale of any of the Shares by it and
any advertising expenses connected with any offers it may make.
8. Indemnity and Contribution.
(a) The Company agrees to indemnify and hold harmless the Underwriter
and each person, if any, who controls the Underwriter within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange Act,
from and against any and all losses, claims, damages and liabilities
(including, without limitation, any legal or other expenses reasonably
incurred in connection with defending or investigating any such action or
claim) caused by
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any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or any amendment thereof, any
preliminary prospectus or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto), or
caused by any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein
not misleading, except insofar as such losses, claims, damages or
liabilities are caused by any such untrue statement or omission or alleged
untrue statement or omission based upon information relating to the
Underwriter furnished to the Company in writing by you expressly for use
therein.
(b) The Underwriter agrees to indemnify and hold harmless the
Company, its directors, its officers who sign the Registration Statement
and each person, if any, who controls the Company within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange Act
to the same extent as the foregoing indemnity from the Company to the
Underwriter, but only with respect to any statement contained in or
omission from the Prospectus Supplement or any preliminary prospectus or
any amendments or supplements thereto and only with reference to
information relating to the Underwriter furnished to the Company in writing
by you expressly for use therein.
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may
be sought pursuant to Section 8(a) or 8(b) such person (the "indemnified
party") shall promptly notify the person against whom such indemnity may be
sought (the "indemnifying party") in writing and the indemnifying party,
upon request of the indemnified party, shall retain counsel reasonably
satisfactory to the indemnified party to represent the indemnified party
and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such
proceeding. In any such proceeding, any indemnified party shall have the
right to retain its own counsel, but the fees and expenses of such counsel
shall be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually agreed to
the retention of such counsel or (ii) the named parties to any such
proceeding (including any impleaded parties) include both the indemnifying
party and the indemnified party and representation of both parties by the
same counsel would be inappropriate due to actual or potential differing
interests between them. It is understood that the indemnifying party shall
not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the fees and expenses of more than one separate
firm (in addition to any local counsel) for all such indemnified parties
and that all such fees and expenses shall be reimbursed as they are
incurred. Such firm shall be designated in writing by Xxxxxx Xxxxxxx & Co.
Incorporated, in the case of parties indemnified pursuant to Section 8(a),
and by
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the Company, in the case of parties indemnified pursuant to Section 8(b).
The indemnifying party shall not be liable for any settlement of any
proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party from and against any loss
or liability by reason of such settlement or judgment. No indemnifying
party shall, without the prior written consent of the indemnified party,
effect any settlement of any pending or threatened proceeding in respect of
which any indemnified party is or could have been a party and indemnity
could have been sought hereunder by such indemnified party, unless such
settlement includes an unconditional release of such indemnified party from
all liability on claims that are the subject matter of such proceeding.
(d) To the extent the indemnification provided for in Section 8(a) or
8(b) is applicable by its terms but unavailable to an indemnified party or
insufficient in respect of any losses, claims, damages or liabilities
referred to therein, then each indemnifying party under such paragraph, in
lieu of indemnifying such indemnified party thereunder, shall contribute to
the amount paid or payable by such indemnified party as a result of such
losses, claims, damages or liabilities (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the
one hand and the Underwriter on the other hand from the offering of the
Shares or (ii) if the allocation provided by clause (i) of this sentence is
not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) of this
sentence but also the relative fault of the Company on the one hand and of
the Underwriter on the other hand in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Underwriter on the other
hand in connection with the offering of the Shares shall be deemed to be in
the same respective proportions as the net proceeds from the offering of
the Shares (before deducting expenses) received by the Company and the
total underwriting discounts and commissions received by the Underwriter
bear to the aggregate public offering price of the Shares. The relative
fault of the Company on the one hand and the Underwriter on the other hand
shall be determined by reference to, among other things, whether the untrue
or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Company or by the Underwriter and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement
or omission.
(e) The Company and the Underwriter agree that it would not be just
or equitable if contribution pursuant to this Section 8 were determined by
pro rata allocation or by any other method of allocation that does not take
account of the equitable considerations referred to in Section 8(d). The
amount paid or payable
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by an indemnified party as a result of the losses, claims, damages and
liabilities referred to in the immediately preceding paragraph shall be
deemed to include, subject to the limitations set forth above, 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, the Underwriter shall not be required to
contribute any amount in excess of the amount by which the Purchase Price
exceeds the amount of any damages that the Underwriter has otherwise been
required to pay by reason of such 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 remedies provided for in this
Section 8 are not exclusive and shall not limit any rights or remedies
which may otherwise be available to any indemnified party at law or in
equity.
(f) The indemnity and contribution provisions contained in this
Section 8 and the representations, warranties and other statements of the
Company contained in this Agreement shall remain operative and in full
force and effect regardless of (i) any termination of this Agreement, (ii)
any investigation made by or on behalf of the Underwriter or any person
controlling the Underwriter or by or on behalf of the Company, its officers
or directors or any person controlling the Company and (iii) acceptance of
and payment for any of the Shares.
9. Termination. This Agreement shall be subject to termination by notice
given by you to the Company, if (a) after the execution and delivery of this
Agreement and prior to the Closing Date (i) trading generally shall have been
suspended or materially limited on or by, as the case may be, any of the New
York Stock Exchange, the American Stock Exchange, the National Association of
Securities Dealers, Inc., the Chicago Board of Options Exchange, the Chicago
Mercantile Exchange or the Chicago Board of Trade, (ii) trading of any
securities of the Company shall have been suspended on any exchange or in any
over-the-counter market, (iii) a general moratorium on commercial banking
activities in New York shall have been declared by either Federal or New York
State authorities or (iv) there shall have occurred any outbreak or escalation
of hostilities or any change in financial markets or any calamity or crisis
that, in your judgment, is material and adverse and (b) in the case of any of
the events specified in clauses (i) through (iv) above, such event, singly or
together with any other such event, makes it, in your judgment, impracticable to
market the Shares on the terms and in the manner contemplated in the Prospectus.
10. Effectiveness. This Agreement shall become effective upon the
execution and delivery hereof by the parties hereto.
If this Agreement shall be terminated by the Underwriter because of any
failure or refusal on the part of the Company to comply with the terms or to
fulfill any of the
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conditions of this Agreement, or if for any reason the Company shall be unable
to perform its obligations under this Agreement, the Company will reimburse the
Underwriter for all out-of-pocket expenses (including the fees and disbursements
of its counsel) reasonably incurred by the Underwriter in connection with this
Agreement or the offering contemplated hereunder.
11. Counterparts. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
12. Applicable Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.
13. Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
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[Underwriting Agreement]
Very truly yours,
VIROPHARMA INCORPORATED
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President and Chief
Financial Officer
Accepted as of the date hereof
XXXXXX XXXXXXX & CO. INCORPORATED
By: /s/ Xxxxxxx Xxxxxx
---------------------------
Name: Xxxxxxx Xxxxxx
Title: Vice President
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