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EXHIBIT 1.1
FORM OF COMMON STOCK UNDERWRITING AGREEMENT
4,000,000 SHARES
AVIRON
COMMON STOCK (PAR VALUE $0.001 PER SHARE)
UNDERWRITING AGREEMENT
February 1, 2001
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February 1, 2001
Xxxxxx Xxxxxxx & Co. Incorporated
X.X. Xxxxxx Securities Inc.
XX Xxxxx Securities Corporation
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs and Mesdames:
AVIRON, a Delaware corporation (the "COMPANY"), proposes to issue and
sell to the several Underwriters named in Schedule I hereto (the "UNDERWRITERS")
4,000,000 shares of its common stock, par value $0.001 per share (the "FIRM
SHARES"). The Company also proposes to issue and sell to the several
Underwriters not more than an additional 400,000 shares of its common stock, par
value $0.001 per share (the "ADDITIONAL COMPANY SHARES"), and certain
shareholders of the Company named in Schedule II hereto (the "SELLING
SHAREHOLDERS") severally propose to sell to the several Underwriters not more
than an aggregate of 200,000 shares of the common stock of the Company, par
value $0.001 per share (the "SELLING SHAREHOLDER SHARES" and, together with the
Additional Company Shares, the "ADDITIONAL SHARES"), each Selling Shareholder
selling the amount set forth opposite such Selling Shareholder's name in
Schedule II hereto, if and to the extent that you, as managers of the offering,
shall have determined to exercise, on behalf of the Underwriters, the right to
purchase such Additional Shares granted to the Underwriters in Section 3 hereof.
The Firm Shares and the Additional Shares are hereinafter collectively referred
to as the "Shares." The shares of common stock, par value $0.001 per share, of
the Company to be outstanding after giving effect to the sales contemplated
hereby are hereinafter referred to as the "COMMON STOCK." The Company and the
Selling Shareholders are hereinafter sometimes collectively referred to as the
"SELLERS."
The Company has filed with the Securities and Exchange Commission (the
"COMMISSION") a registration statement, including a prospectus, relating to the
Firm Shares, the Additional Company Shares and its debt securities. The term
"REGISTRATION STATEMENT" means such registration statement, including the
exhibits thereto, as amended to the date of this Agreement. The term "BASE
PROSPECTUS" means the prospectus included in the Registration Statement. If the
Company has filed or files an abbreviated registration statement to register
additional shares of common stock or debt securities pursuant to Rule 462(b)
(the "RULE 462 REGISTRATION STATEMENT") under the Securities Act of 1933, as
amended (the "SECURITIES ACT"), then any reference herein to the term
"Registration Statement" shall be deemed to include such Rule 462 Registration
Statement.
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The Company also has filed with the Commission a registration statement,
including a prospectus, relating to the Selling Shareholder Shares, which
registration statement as amended at the time it became effective, including the
information (if any) deemed to be part of the registration statement at the time
of effectiveness pursuant to Rule 430A under the Securities Act, is hereinafter
referred to as the "RESALE REGISTRATION STATEMENT"; the prospectus relating to
the Selling Shareholder Shares in the form first used to confirm sales of
Selling Shareholder Sales is hereinafter referred to as the "RESALE PROSPECTUS."
The Company has filed with, or transmitted for filing to, or shall
promptly hereafter file with or transmit for filing to, the Commission a
prospectus supplement (the "PROSPECTUS SUPPLEMENT") specifically relating to the
Shares, pursuant to Rule 424 under the Securities Act.
The term "PROSPECTUS" means the Prospectus Supplement together with the
Base Prospectus and the Resale Prospectus. The term "PRELIMINARY PROSPECTUS"
means a preliminary prospectus supplement specifically relating to the Shares
together with the Base Prospectus and a preliminary Resale Prospectus. As used
herein, the terms "Base Prospectus," "Resale Prospectus," "Prospectus",
"preliminary prospectus", "Registration Statement" and "Resale Registration
Statement" shall include in each case the documents, if any, incorporated or
deemed to be incorporated by reference therein. The terms "supplement" and
"amendment" or "amend" as used in this Agreement shall include all documents
filed subsequent to the date of the Base Prospectus or the Resale Prospectus, as
the case may be, by the Company with the Commission pursuant to the Securities
Exchange Act of 1934, as amended (the "EXCHANGE ACT"), that are deemed to be
incorporated by reference in the Prospectus.
1. Representations and Warranties. The Company represents and warrants
to and agrees with each of the Underwriters that:
(a) Each of the Registration Statement and the Resale
Registration Statement has become effective; no stop order suspending
the effectiveness of the Registration Statement or the Resale
Registration Statement is in effect, and no proceedings for such purpose
are pending before or, to the knowledge of the Company, threatened by
the Commission.
(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) each of the Registration Statement and the Resale
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,
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(iii) each of the Registration Statement, the Resale 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 in order 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 (A)
statements or omissions in the Registration Statement, the Resale
Registration Statement or the Prospectus based upon information relating
to any Underwriter furnished to the Company in writing by such
Underwriter through you expressly for use therein or (B) to that part of
the Registration Statement that constitutes the Statement of Eligibility
("Form T-1") under the Trust Indenture Act of 1939, as amended (the
"TRUST INDENTURE ACT").
(c) The Company has been duly incorporated, is validly existing
as a corporation in good standing under the laws of the jurisdiction of
its incorporation, 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 and its subsidiary, taken
as a whole.
(d) Aviron UK Limited has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, 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 and its
subsidiary, taken as a whole; all of the issued shares of capital stock
of Aviron UK Limited have been duly and validly authorized and issued,
are fully paid and non-assessable and are owned directly by the Company,
free and clear of all liens, encumbrances, equities or claims.
(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.
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(g) The shares of Common Stock (including the Selling Shareholder
Shares) outstanding prior to the issuance of the Shares to be sold by
the Company have been duly authorized and are validly issued, fully paid
and non-assessable.
(h) The Shares to be sold by the Company 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 or its subsidiary that is material
to the Company and its subsidiary, taken as a whole, or any judgment,
order or decree of any governmental body, agency or court having
jurisdiction over the Company or its subsidiary, 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 have
been obtained under the Securities Act and 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 and its subsidiary, taken as a whole, 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, to
the knowledge of the Company, threatened to which the Company or its
subsidiary is a party or to which any of the properties of the Company
or its subsidiary is subject that are required to be described in the
Registration Statement, the Resale 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, the Resale Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement or
the Resale Registration Statement that are not described or filed as
required.
(l) Each preliminary prospectus filed as part of the Registration
Statement or the Resale Registration Statement as originally filed or as
part of any amendment thereto, or filed pursuant to Rule 424
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under the Securities Act, complied when so filed in all material
respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder.
(m) 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, required to register as an
"investment company" as such term is defined in the Investment Company
Act of 1940, as amended.
(n) The Company and its subsidiary (i) are 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 ("ENVIRONMENTAL LAWS"), (ii) have received all permits,
licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and (iii) are
in compliance with all terms and conditions of any such permit, license
or approval, except where such noncompliance with 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 and its subsidiary, taken as a
whole.
(o) 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, singly or in the aggregate,
have a material adverse effect on the Company and its subsidiary, taken
as a whole.
(p) The Company and its subsidiary possess all consents,
approvals, orders, certificates, authorizations and permits issued by,
and have made all declarations and filings with, all appropriate
federal, state or foreign governmental or self-regulatory authorities
and all courts and other tribunals necessary to conduct their respective
businesses and to own, lease, license and use their respective
properties in the manner described in the Prospectus, except to the
extent that the failure to obtain, possess or make a declaration or
filing would not have a material adverse effect on the Company and its
subsidiary, taken as a whole, and the Company and its subsidiary have
not received any notice of proceedings relating to the revocation or
modification of any such consent, approval, order, certificate,
authorization or permit that, singly or in the aggregate, if the subject
of any unfavorable decision, ruling or finding, or failure to obtain or
file, would have a material adverse effect on the Company and its
subsidiary, taken as a whole, except as described in the Prospectus.
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(q) The Company owns or possesses adequate licenses or other
rights to use all patents, copyrights, trademarks, service marks, trade
names, technology and know-how necessary to conduct its businesses in
the manner described in the Prospectus or could obtain such licenses or
rights on terms that would not have a material adverse effect on the
Company and its subsidiary, taken as a whole, and, except as disclosed
in the Prospectus, the Company has not received any notice of
infringement with respect to any patents, copyrights, trademarks,
service marks, trade names, technology or know-how which could
reasonably be expected to result in any material adverse effect on the
Company and its subsidiary, taken as a whole; 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 any patent or other intellectual property right
of any third party, or any discovery, invention, product or process that
is the object of a patent application filed by any third party known to
the Company, except for any such infringement which would not have a
material adverse effect on the Company and its subsidiary, taken as a
whole.
(r) 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 or the Resale Registration Statement except as
described in the Prospectus, all of which have been validly waived.
(s) The Company is not presently (a) in material violation of its
charter or bylaws, or (b) subject to any material order, writ or decree
applicable specifically to the Company of any court or governmental
agency or body having jurisdiction over the Company, or over any of its
properties or operations.
2. Representations and Warranties of the Selling Shareholders. Each
Selling Shareholder represents and warrants to and agrees with each of the
Underwriters that:
(a) This Agreement has been duly authorized, executed and delivered by
or on behalf of such Selling Shareholder.
(b) The execution and delivery by such Selling Shareholder of, and the
performance by such Selling Shareholder of his obligations under, this
Agreement, the Irrevocable Power of Attorney and Custody Agreement ("POWER OF
ATTORNEY AND CUSTODY AGREEMENT") signed by such Selling Shareholder and Boston
Equiserve Limited Partnership, as Custodian, relating to the deposit of the
Selling Shareholder Shares to be sold by such Selling Shareholder and appointing
certain individuals as such Selling Shareholder's attorneys-in-fact to the
extent set
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forth therein, relating to the transactions contemplated hereby and by the
Prospectus and the Resale Registration Statement, will not contravene any
agreement or other instrument binding upon such Selling Shareholder or any
judgment, order or decree of any governmental body, agency or court having
jurisdiction over such Selling Shareholder, and no consent, approval,
authorization or order of, or qualification with, any governmental body or
agency is required for the performance by such Selling Shareholder of his
obligations under this Agreement, the Power of Attorney and Custody Agreement,
except such as have been obtained under the Securities Act and 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 Selling Shareholder Shares.
(c) Such Selling Shareholder on the Option Closing Date will have valid
title to the Selling Shareholder Shares to be sold by such Selling Shareholder
and the legal right and power, and all authorization and approval required by
law, to enter into this Agreement and the Power of Attorney and Custody
Agreement and to sell, transfer and deliver the Selling Shareholder Shares to be
sold by such Selling Shareholder.
(d) The Power of Attorney and Custody Agreement has been duly
authorized, executed and delivered by such Selling Shareholder and is a valid
and binding agreement of such Selling Shareholder.
(e) Delivery of the Selling Shareholder Shares to be sold by such
Selling Shareholder pursuant to this Agreement will pass title to such Selling
Shareholder Shares free and clear of any security interests, claims, liens,
equities and other encumbrances, assuming the Underwriters have purchased such
Selling Shareholder Shares in good faith and without notice of any adverse
claims.
3. Agreements to Sell and Purchase. The Company hereby agrees to sell to
the several Underwriters, and each Underwriter, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agrees, severally and not jointly, to purchase from the
Company the respective numbers of Firm Shares set forth in Schedule I hereto
opposite its name at $47.50 a share (the "PURCHASE PRICE").
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, each Seller, severally and
not jointly, agrees to sell to the Underwriters the Additional Shares, and the
Underwriters shall have a one-time right to purchase, severally and not jointly,
up to 600,000 Additional Shares at the Purchase Price. If you, on behalf of the
Underwriters, elect to exercise such option, you shall so notify the Company in
writing not later than 30 days after the date of this Agreement, which notice
shall specify the number of Additional Shares to be purchased by the
Underwriters and the date on which such Additional Shares are to be purchased.
Such date may be the same as the Closing Date (as defined below) but not earlier
than the Closing Date nor later than ten business days after the date of such
notice. Additional
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Shares may be purchased as provided in Section 5 hereof solely for the purpose
of covering over-allotments made in connection with the offering of the Firm
Shares. If any Additional Shares are to be purchased, each Underwriter agrees,
severally and not jointly, to purchase the number of Additional Shares (subject
to such adjustments to eliminate fractional securities as you may determine)
that bears the same proportion to the total number of Additional Shares to be
purchased as the number of Firm Shares set forth in Schedule I hereto opposite
the name of such Underwriter bears to the total number of Firm Shares. If the
Underwriters shall exercise such option for less than all of the Additional
Shares, the Underwriters shall purchase from each Seller approximately the same
percentage of shares that each Seller has committed to sell, respectively, as
Additional Shares.
The Company hereby agrees that, without the prior written consent of
Xxxxxx Xxxxxxx & Co. Incorporated on behalf of the Underwriters, 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 a warrant or the conversion of a security outstanding on the date hereof, (C)
the grant by the Company of options to purchase Common Stock pursuant to the
terms of an employee benefit plan in effect on the date hereof or exercise of
stock options outstanding on the date hereof or (D) the sale of up to
$200,000,000 principal amount of the Company's convertible subordinated notes
pursuant to an underwriting agreement dated the date hereof among the Company
and the underwriters named therein or the issuance of the underlying securities
upon conversion of such notes.
4. Terms of Public Offering. The Company is advised by you that the
Underwriters propose to make a public offering of their respective portions of
the Shares as soon after the Registration Statement, the Resale Registration
Statement and this Agreement have become effective as in your judgment is
advisable. The Sellers are further advised by you that the Shares are to be
offered to the public initially at $50.00 a share (the "PUBLIC OFFERING PRICE")
and to certain dealers selected by you at a price that represents a concession
not in excess of $1.63 a share under the Public Offering Price. No Underwriter
may allow, and no dealer may reallow, a concession to any Underwriter or dealer.
5. Payment and Delivery. Payment for the Firm Shares shall be made to
the Company in Federal or other funds immediately available in New York City
against delivery of such Firm Shares for the respective accounts of the
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several Underwriters at 10:00 a.m., New York City time, on February 7, 2001, or
at such other time on the same or such other date, not later than February 14,
2001, as shall be designated in writing by you. The time and date of such
payment are hereinafter referred to as the "CLOSING DATE."
Payment for any Additional Shares to be sold by each Seller shall be
made to such Seller in Federal or other funds immediately available in New York
City against delivery of such Additional Shares for the respective accounts of
the several Underwriters at 10:00 a.m., New York City time, on the date
specified in the notice described in Section 2 or at such other time on the same
or on such other date, in any event not later than March 16, 2001 as shall be
designated in writing by you. The time and date of such payment are hereinafter
referred to as the "OPTION CLOSING DATE."
Certificates for the Firm Shares and Additional 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 or the Option Closing Date, as the case may be. The certificates
evidencing the Firm Shares and Additional Shares shall be delivered to you on
the Closing Date or the Option Closing Date, as the case may be, for the
respective accounts of the several Underwriters, with any transfer taxes payable
in connection with the transfer of the Shares to the Underwriters duly paid,
against payment of the Purchase Price therefor.
6. Conditions to the Underwriters' Obligations. The obligations of the
Company to sell the Shares to the Underwriters and the several obligations of
the Underwriters to purchase and pay for the Shares on the Closing Date are
subject to the condition that each of the Registration Statement and the Resale
Registration Statement shall have become effective not later than 4:30 p.m. (New
York City time) on the date hereof.
The several obligations of the Underwriters are subject to the following
further conditions:
(a) Subsequent to the execution and delivery of this Agreement
and prior to the Closing Date:
(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,
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financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiary, taken as a whole,
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 Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer
of the Company, to the effect set forth in Section 6(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 the Closing 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 the Closing Date.
The officer signing and delivering such certificate may rely upon
the best of his or her knowledge as to proceedings threatened.
(c) The Underwriters shall have received on the Closing Date an
opinion of Xxxxxx & Xxxxxxx, outside counsel for the Company, dated the
Closing Date to the effect that:
(i) the Company is a corporation and is validly existing and
in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and corporate authority to
own its properties and to conduct its business as described in
the Prospectus and Registration Statement;
(ii) the Company is qualified to do business in the States of
California and Pennsylvania;
(iii) the Shares to be issued and sold by the Company
pursuant to this Agreement have been duly authorized and, when
issued to and paid for by you in accordance with the terms of
this Agreement, will be validly issued, fully paid and
non-assessable, and, to such counsel's knowledge, free of
preemptive rights arising under the Company's certificate of
incorporation or the Delaware General Corporation Law;
(iv) this Agreement has been duly authorized, executed and
delivered by the Company;
(v) the issuance and sale of the Shares by the Company
pursuant to this Agreement will not result in (A) the violation
by the Company of its Certificate of Incorporation or By-laws,
(B) to such
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counsel's knowledge, the violation of any federal or California
statute, rule or regulation known to such counsel to be
applicable to the Company or (C) to such counsel's knowledge, the
breach of or a default under any material agreement or other
instrument binding upon the Company or its subsidiary that has
been filed as an exhibit to the Registration Statement or the
Resale Registration Statement or, to such counsel's knowledge,
any court order listed on a schedule to such opinion;
(vi) no consent, approval, authorization or order of, or
filing with, any federal or California court or governmental body
or agency is required for the issuance and sale of the Shares by
the Company pursuant to this Agreement, except such as have been
obtained under the Securities Act and such as may be required
under state securities laws in connection with the purchase and
distribution of the Shares by the Underwriters;
(vii) the statements set forth (A) in the Prospectus under
the caption "Description of Capital Stock" and (B) in the
Registration Statement and the Resale Registration Statement in
Item 15, under the caption "Indemnification of Directors and
Officers", in each case insofar as such statements constitute
summaries of legal matters are accurate in all material respects;
(viii) to such counsel's knowledge, there are no legal
proceedings, contracts or documents of a character required to be
described in the Registration Statement, the Resale Registration
Statement or the Prospectus or to be filed as exhibits to the
Registration Statement or the Resale Registration Statement that
are not described and filed as required;
(ix) after giving effect to the Company's sale of the Shares
and the application of the net proceeds therefrom, the Company is
not an "investment company" as such term is defined in the
Investment Company Act of 1940, as amended;
(x) the Registration Statement, the Resale Registration
Statement and the Prospectus (including the documents
incorporated therein by reference) comply as to form in all
material respects with the requirements for registration
statements on Form S-3 under the Securities Act and the rules and
regulations of the Commission thereunder; provided, however, that
such counsel need not express any opinion with respect to the
financial statements, schedules or other financial or statistical
data included or incorporated by reference in, or omitted from,
the Registration Statement, the Resale Registration Statement or
the Prospectus or with respect to the Form T-1.
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(xi) No facts have come to such counsel's attention that
caused such counsel to believe that the Registration Statement or
the Resale Registration Statement, at the respective times they
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 or the Resale Prospectus
(including the documents incorporated therein by reference), as
of their respective dates or as of the date hereof, contained an
untrue statement of a material fact or omitted to state a
material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not
misleading; it being understood that such counsel expresses no
opinion with respect to the financial statements, schedules and
other financial and statistical data included or incorporated by
reference in, or omitted from, the Registration Statement, the
Prospectus, the Resale Registration Statement or the Resale
Prospectus or with respect to the Form T-1.
(d) The Underwriters shall have received on the Closing Date an
opinion of Xxxxxx and Xxxxxxx, patent counsel for the Company as to
Section A of the Patent Portfolio attached hereto as Exhibit B (the
"PATENT PORTFOLIO"), dated the Closing Date, to the effect that:
(i)to the best of such counsel's knowledge, the Company owns
each of the United States patents and patent applications listed
in Section A of the Patent Portfolio;
(ii) to the best of such counsel's knowledge, there are no
material legal or governmental proceedings, pending or
threatened, with respect to any of the United States patents
listed in Section A of the Patent Portfolio;
(iii) to the best of such counsel's knowledge, the Company
has not received any notice with respect to the potential
infringement of or proceedings against any patents or trade
secrets of others;
(iv) to the best of such counsel's knowledge, without any
searches having been conducted for the purpose of rendering this
opinion, no third parties are infringing any of the United States
patents listed in Section A of the Patent Portfolio;
(v) while there can be no guarantee that any particular
patent application will issue as a patent, each of the United
States patent applications listed in Section A of the Patent
Portfolio that we filed in the United States Patent and Trademark
Office was
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properly filed and is being diligently prosecuted in, the United
States Patent and Trademark Office;
(vi) while there can be no guarantee that any particular
patent application will issue as a patent, each of the United
States patent applications listed in Section A of the Patent
Portfolio that we did not file in the United States Patent and
Trademark Office, from the time we assumed responsibility for the
prosecution, is being diligently prosecuted in the United States
Patent and Trademark Office; and
(vii) the statements contained in the Prospectus under the
caption "Business - Legal Proceedings," with respect to the first
paragraph thereunder regarding proceedings before the European
Patent Office, insofar as such statements constitute matters of
law, are a fair and accurate summary of the matters set forth
therein.
(e) The Underwriters shall have received on the Closing Date an
opinion of Xxxxxxxx X'Xxxxx Xxxxxxxx Xxxxxx & Borun, patent counsel for
the Company as to Section B of the Patent Portfolio, dated the Closing
Date, to the effect that:
(i) to the best of such counsel's knowledge, such knowledge
being based upon the files of such firm, except as otherwise
disclosed in the Prospectus, there are no legal or governmental
proceedings relating to patent rights owned, licensed, or used by
the Company pending against the Company or any third parties and,
except for the Company's pending patent applications, to the best
of such counsel's knowledge, there are no legal or governmental
proceedings relating to patent rights owned, licensed or used by
third parties pending against the Company. To the best of such
counsel's knowledge, other than those disclosed in the
Prospectus, no such proceedings are threatened or contemplated by
governmental authorities or others;
(ii) to the best of such counsel's knowledge, such knowledge
being based upon the files of such firm, the Company has no
notice of any infringement by a third party of any patent owned
or used by the Company; and to the best of such counsel's
knowledge, such knowledge being based upon the files of such
firm, the Company has not received notice of any claims of
infringement by the Company of any patent owned or used by a
third party;
(iii) to the best of such counsel's knowledge, such knowledge
being based upon the files of such firm, the Company or one of
its licensors is the sole assignee for each patent and
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patent application listed in Section B of the Patent Portfolio.
To the best of such counsel's knowledge, the assignments by the
named inventors have been submitted to the USPTO and those
assignments have been recorded in the assignment records of the
USPTO. However, in one or more of the patents and patent
applications listed in Section B of the Patent Portfolio, the
United States government may hold a nonexclusive, royalty-free
license as a result of providing research funding;
(iv) to the best of such counsel's knowledge, such knowledge
being based upon the files of such firm, the Company's United
States patent applications listed in Section B of the Patent
Portfolio have been prepared and filed in the USPTO in a form and
with accompanying papers that are acceptable to the USPTO for the
purposes of according each such application a filing date and
serial number, and of placing each such application in condition
for eventual examination on the merits as to patentability. For
each such United States application, except as otherwise noted in
Exhibit B attached to this opinion, an Official Filing Receipt
has been received from the USPTO. As to each of such
applications, such counsel is not aware of any material defect of
form in preparation or filing. However, there is no assurance
that patents will issue from any pending United States
application, or that any claims will be allowed without
amendment. Neither is there any assurance that a patent will
issue without appeal to the Board of Patent Appeals and
Interferences or to the Federal courts;
(v) to the best of such counsel's knowledge, such knowledge
being based upon the files of such firm, each of the Company's
foreign patents and patent applications listed in Section B of
the Patent Portfolio has been submitted to patent firms in the
respective foreign countries with instructions to file the
applications in the patent offices of those countries naming the
Company or one its licensors as applicant and/or owner of record.
The Patent Cooperation Treaty applications have been submitted
directly to the relevant patent examining authority of those
countries naming the Company or one of its licensors as the
applicant and/or owner of record. In each such application,
written confirmation has been received that the application has
been accepted for filing by such patent office, or patent
examining authority. There is no assurance that the patent
offices of the respective countries will not reject the claims of
the foreign patent applications as being unpatentable, or that
any claims will be allowed without amendment, nor is there any
assurance that these patent authorities will ultimately conclude
that the foreign patent applications meet all requirements for
patentability. Such counsel is not aware of any material defect
of form in preparation or filing.
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To the best of such counsel's knowledge, other than two
oppositions filed in the European Patent Office against European
Patent No. 500,917 corresponding to Xxxxxxxx X'Xxxxx reference
No. 27373/8235-EPO as listed in Section B of the Patent
Portfolio, there are no legal or governmental proceedings
relating to any foreign patent rights or foreign parent
applications owned, licensed or used by the Company pending
against the Company or any third party and, except for
prosecution of pending patent applications, to the best of such
counsel's knowledge, there are no legal or governmental
proceedings relating to any foreign patent rights of foreign
patent applications owned, licensed or used by third parties
pending against Aviron. To the best of such counsel's knowledge,
other than otherwise disclosed in the Prospectus, no such
proceedings are threatened or contemplated by governmental
authorities or others; and
(vi) the patent applications in Section B of the Patent
Portfolio are being diligently pursued.
(f) The Underwriters shall have received on the Closing Date an
opinion of the Law Office of XxXxx Xxxxx, outside patent counsel for the
Company as to Section C of the Patent Portfolio, dated the Closing Date
to the effect that:
(i) except as disclosed in the Prospectus under the captions
"Risk Factors - Other Risks Related to Our Company - We may not
receive patent protection for our potential products and
manufacturing processes" and "Business - Legal Proceedings," to
the best of such counsel's knowledge, the Company has received no
notice of any infringement or misappropriation by a third party
of any patent in Section C of the Patent Portfolio or notice of
any infringement or misappropriation by the Company of any
patents, trade secrets, trademarks, trade names, copyrights or
other proprietary rights of a third party;
(ii) except as disclosed in the Prospectus under the captions
"Risk Factors - Other Risks Related to Our Company - We may not
receive patent protection for our potential products and
manufacturing processes" and "Business - Legal Proceedings," to
the best of such counsel's knowledge, the Company or its licensor
is the sole assignee for each United States patent and patent
application listed in Section C of the Patent Portfolio. Except
as otherwise noted in Section C of the Patent Portfolio attached
hereto, for each of the United States patents and patent
applications, the assignments by the named inventors have been
submitted to the United States Patent and Trademark Office
("USPTO") and those assignments have been recorded in the
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Patent Office's title records. However, in one or more of the
patents and patent applications listed in Section C of the Patent
Portfolio, the United States government may hold a nonexclusive,
royalty-free license as a result of providing research funding;
(iii) to such counsel's knowledge, the Company's United
States patent applications listed in Section C of the Patent
Portfolio have been prepared and filed in the USPTO in a form and
with accompanying papers that are acceptable to the USPTO for the
purposes of according each such application a filing date and
serial number, and of placing each such application in condition
for eventual examination on the merits as to patentability. For
each such United States patent application, such counsel is not
aware of any material defect of form in preparation or filing;
(iv) to such counsel's knowledge, except as disclosed in the
Prospectus, as to each of the Company's foreign patent
applications listed in Section C of the Patent Portfolio, the
applications have either (a) been submitted to patent firms in
the respective foreign countries with instructions to file the
applications in the patent offices of those countries naming the
Company as the applicant of record, or (b) as to certain Patent
Cooperation Treaty applications, been submitted directly to the
relevant receiving office naming the Company as the applicant of
record. To the best of such counsel's knowledge and except as
noted in Section C of the Patent Portfolio, as to each of such
applications, the Company has not received notice from any
foreign filing authority of any material defect of form in the
preparation or filing; and
(g) The Underwriters shall have received on the Closing Date an
opinion of Xxxxxx & Xxxxxxx, U.K. counsel for the Company, dated the
Closing Date to the effect that:
(i)Aviron UK Limited is duly incorporated and existing as a
private limited company registered in England and Wales under
company number 3854275 and is authorised pursuant to its
Memorandum of Association to carry on its current business and to
occupy its current premises. Aviron UK Limited is in good
standing as shown by the Certificate of Good Standing received
from the Registrar of Companies; and
(ii) the authorised share capital of Aviron UK Limited is
Pound Sterling1000 divided into 1000 ordinary shares of Pound
Sterling1 each of which 1 share has been validly issued and is
fully paid up. Aviron is the registered owner of the only issued
ordinary share of Pound Sterling1 in the
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capital of Aviron UK Limited, free and clear of all liens,
encumbrances, equities or claims.
(h) The Underwriters shall have received on the Option Closing
Date an opinion of Xxxxxx & Xxxxxxx, counsel to the Selling
Shareholders, dated the Option Closing Date to the effect that:
(i) each of this Agreement and the Power of Attorney and
Custody Agreement has been duly executed and delivered by or on
behalf of each of the Selling Shareholders;
(ii) upon (i) payment for the Selling Shareholder Shares in
accordance with the terms of this Agreement, (ii) physical
delivery of the Selling Shareholder Shares to the transfer agent,
with stock powers duly endorsed to The Depository Trust Company
or its nominee ("DTC") by an effective endorsement, (iii)
physical delivery of the Selling Shareholder Shares to DTC, with
stock powers duly endorsed to DTC by an effective endorsement,
(iv) registration by book-entry to the Underwriters' securities
accounts with DTC of the purchase of the Selling Shareholder
Shares in the records of DTC and (v) registration by book-entry
of the credit to the Underwriters' securities accounts of the
purchase of the Selling Shareholder Shares in the records of any
other "securities intermediary" (as defined in Section
8-102(a)(14) of the New York UCC) which acts as a "clearing
corporation" (as defined in Section 8-102(a)(5) of the New York
UCC) or maintains "securities accounts" (as defined in Section
8-501(a) of the New York UCC) with respect to the transfer of the
Selling Shareholder Shares to the Underwriters, then the
Underwriters will become the "entitlement holders" (as defined in
Section 8-102(a)(7) of the New York UCC) of the Selling
Shareholder Shares, free of any "adverse claims" (as defined in
Section 8-102(a)(1) of the New York UCC).
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(i) The Underwriters shall have received on the Closing Date an
opinion of Xxxxx Xxxx & Xxxxxxxx, counsel for the Underwriters, dated
the Closing Date, covering the matters referred to in Sections 6(c)(iv),
6(c)(vii) (but only as to the statements in the Prospectus under
"Description of Capital Stock" and "Underwriters") and 6(c)(x) and
6(c)(xi) above.
With respect to Section 6(c)(xi) above, Xxxxxx & Xxxxxxx and
Xxxxx Xxxx & Xxxxxxxx may state that their opinion and belief are based
upon their participation in the preparation of the Registration
Statement, the Resale Registration Statement and Prospectus and any
amendments or supplements thereto (other than the documents incorporated
by reference) and review and discussion of the contents thereof
(including the documents incorporated therein by reference), but are
without independent check or verification, except as specified.
The opinions of Xxxxxx & Xxxxxxx, Xxxxxx and Xxxxxxx, Xxxxxxxx
X'Xxxxx Xxxxxxxx Xxxxxx & Borun and the Law Offices of XxXxx Xxxxx
described in Sections 6(c), 6(d), 6(e), 6(f), 6(g) and 6(h) above shall
be rendered to the Underwriters at the request of the Company or one or
more of the Selling Shareholders, as the case may be, and shall so state
therein.
(j) The Underwriters shall have received, on each of the date
hereof, the Closing Date and, if applicable, the Option Closing Date, a
letter dated the date hereof, the Closing Date or the Option Closing
Date, as the case may be, in form and substance satisfactory to the
Underwriters, from Ernst & Young 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 information contained in the
Registration Statement, the Resale Registration Statement and the
Prospectus; provided that the letter delivered on the Closing Date shall
use a "cut-off date" not earlier than the date hereof.
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(k) The "lock-up" agreements, each substantially in the form of
Exhibit A hereto (collectively, the "LOCK-UP AGREEMENTS"), between you
and the officers and directors of the Company relating to sales and
certain other dispositions of shares of Common Stock or certain other
securities, delivered to you on or before the date hereof, shall be in
full force and effect on the Closing Date.
The several obligations of the Underwriters to purchase Additional
Shares hereunder are subject to the delivery to you on the Option Closing Date
of such documents as you may reasonably request with respect to the good
standing of the Company, the due authorization and issuance of the Additional
Shares and other matters related to the issuance of the Additional Shares.
7. Covenants of the Company. In further consideration of the agreements
of the Underwriters herein contained, the Company covenants with each
Underwriter as follows:
(a) To furnish to you, without charge, four signed copies of each
of the Registration Statement and the Resale Registration Statement
(each including exhibits thereto and documents incorporated therein by
reference) and for delivery to each other Underwriter a conformed copy
of each of the Registration Statement and the Resale Registration
Statement (each without exhibits thereto but including documents
incorporated therein by reference) and to furnish to you, without
charge, on the business day next succeeding the date of this Agreement
and during the period mentioned in Section 7(c) below, as many copies of
the Prospectus and any supplements and amendments thereto or to the
Registration Statement or the Resale Registration Statement as you may
reasonably request.
(b) Before amending or supplementing the Registration Statement,
the Resale 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 Underwriters
the Prospectus is required by law to be delivered in connection with
sales of Shares 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
Underwriters, it is necessary to amend or supplement the Prospectus to
comply with applicable law, forthwith to prepare, file with the
Commission and furnish,
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at its own expense, to the Underwriters 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 Underwriters 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.
(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 March 31, 2002 that satisfies the provisions
of Section 11(a) of the Securities Act and the rules and regulations of
the Commission thereunder.
(f) Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, 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, the Company's accountants and
counsel to the Selling Shareholders 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, the Resale 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 Underwriters and
dealers, in the quantities hereinabove specified, (ii) all costs and
expenses related to the transfer and delivery of the Shares to the
Underwriters, including any transfer or other taxes payable thereon,
(iii) the cost of printing or producing any Blue Sky or Legal Investment
memorandum in connection with the offer and sale of the Shares under
state securities laws and all expenses in connection with the
qualification of the Shares for offer and sale under state securities
laws as provided in Section 7(d) hereof, including filing fees and the
reasonable fees and disbursements of counsel for the Underwriters in
connection with such qualification and in connection with the Blue Sky
or Legal Investment memorandum, (iv) all filing fees and the reasonable
fees and disbursements of counsel to the Underwriters incurred in
connection with the review and qualification of the offering of the
Shares by the National Association of Securities Dealers, Inc., (v) all
costs and expenses incident to listing the Shares on the Nasdaq National
Market, (vi) the cost of printing certificates representing the Shares,
(vii) the costs and charges of any transfer agent,
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registrar or depositary, (viii) 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 (ix) 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 Underwriters will pay all of their
costs and expenses, including fees and disbursements of their counsel,
stock transfer taxes payable on resale of any of the Shares by them and
any advertising expenses connected with any offers they may make.
The provisions of this Section 7(f) shall not supersede or
otherwise affect any agreement that the Sellers may otherwise have for
the allocation of such expenses among themselves.
(g) To issue stop-transfer instructions to the transfer agent for
the Common Stock with respect to any transaction or contemplated
transaction that would constitute a breach of or default under the
applicable Lock-up Agreement.
8. Indemnity and Contribution. (a) The Company agrees to indemnify and
hold harmless each Underwriter and each person, if any, who controls any
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 any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement or any amendment
thereof, the Resale 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 any Underwriter furnished to the Company in writing
by such Underwriter through you expressly for use therein; provided that the
foregoing indemnity agreement with respect to any preliminary prospectus shall
not inure to the benefit of any Underwriter from whom the person asserting any
such losses, claims, damages or liabilities purchased Shares, or any person
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controlling such Underwriter, if a copy of the Prospectus (as then amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) was not sent or given by or on behalf of such Underwriter to such
person, if required by law so to have been delivered, at or prior to the written
confirmation of the sale of the Shares to such person, and if the Prospectus (as
so amended or supplemented) would have cured the defect giving rise to such
losses, claims, damages or liabilities, unless such failure is the result of
noncompliance by the Company with Section 7(a) hereof.
(b) Each Selling Shareholder agrees, severally and not jointly,
to indemnify and hold harmless the Company, its directors, its officers
who sign the Resale 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, and each Underwriter
and each person, if any, who controls any Underwriter within the meaning
of either such section, 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 any untrue statement
or alleged untrue statement of a material fact contained in the Resale
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, but only with reference to information relating
to such Selling Shareholder furnished in writing by or on behalf of such
Selling Shareholder expressly for use in the Resale Registration
Statement, any preliminary prospectus, the Prospectus or any amendments
or supplements thereto; provided that with respect to any amount due an
indemnified person under this paragraph (b), such Selling Shareholder
shall be liable only to the extent of the net proceeds received by such
Selling Shareholder from the sale of the Selling Shareholder Shares to
be sold by such Selling Shareholder; and provided further, that the
foregoing indemnity agreement with respect to any preliminary prospectus
shall not inure to the benefit of any Underwriter from whom the person
asserting any such losses, claims, damages or liabilities purchased
Shares, or any person controlling such Underwriter, if a copy of the
Prospectus (as then amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) was not sent or given
by or on behalf of such Underwriter to such person, if required by law
so to have been delivered, at or prior to the written confirmation of
the sale of the Shares to such person, and if the Prospectus (as so
amended or supplemented) would have cured the defect giving rise to such
losses, claims, damages or liabilities, unless such failure is the
result of noncompliance by the Company with Section 7(a) hereof.
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(c) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, the Selling Shareholders, the
directors of the Company, the officers of the Company who sign the
Registration Statement or the Resale 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 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 any untrue statement or alleged untrue statement of
a material fact contained in the Registration Statement or any amendment
thereof, the Resale 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, but only with reference to
information relating to such Underwriter furnished to the Company in
writing by such Underwriter through you expressly for use in the
Registration Statement, the Resale Registration Statement, any
preliminary prospectus, the Prospectus or any amendments or supplements
thereto.
(d) 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), 8(b) or 8(c),
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 (i) the fees and expenses of more than one separate firm (in
addition to any local counsel) for all Underwriters and all persons, if
any, who control any Underwriter within the meaning of either Section 15
of the Securities Act or Section 20 of the Exchange Act, (ii) the fees
and expenses of more than one separate firm
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(in addition to any local counsel) for the Company, its directors, its
officers who sign the Registration Statement or the Resale 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 and (iii) the fees and expenses of more than one separate
firm (in addition to any local counsel) for all Selling Shareholders and
all persons, if any, who control any Selling Shareholder within the
meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act, and that all such fees and expenses shall be reimbursed as
they are incurred. In the case of any such separate firm for the
Underwriters and such control persons of any Underwriters, such firm
shall be designated in writing by Xxxxxx Xxxxxxx & Co. Incorporated. In
the case of any such separate firm for the Company, and such directors,
officers and control persons of the Company, such firm shall be
designated in writing by the Company. In the case of any such separate
firm for the Selling Shareholders and such control persons of any
Selling Shareholders, such firm shall be designated in writing by the
persons named as attorneys-in-fact for the Selling Shareholders under
the Power of Attorney and Custody Agreement. 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. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall have
requested an indemnifying party to reimburse the indemnified party for
fees and expenses of counsel as contemplated by the second and third
sentences of this paragraph, the indemnifying party agrees that it shall
be liable for any settlement of any proceeding effected without its
written consent if (i) such settlement is entered into more than 30 days
after receipt by such indemnifying party of the aforesaid request and
(ii) such indemnifying party shall not have reimbursed the indemnified
party in accordance with such request prior to the date of such
settlement. 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.
(e) To the extent the indemnification provided for in Section
8(a), 8(b) or 8(c) is 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
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appropriate to reflect the relative benefits received by the
indemnifying party or parties on the one hand and the indemnified party
or parties on the other hand from the offering of the Shares or (ii) if
the allocation provided by clause 8(e)(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 8(e)(i) above but also the
relative fault of the indemnifying party or parties on the one hand and
of the indemnified party or parties 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 each Seller on the one
hand and the Underwriters 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 each Seller and the total underwriting
discounts and commissions received by the Underwriters, in each case as
set forth in the Prospectus under the caption "Underwriters" or in the
table on the cover of the Prospectus, bear to the aggregate Public
Offering Price of the Shares. The relative fault of the Sellers on the
one hand and the Underwriters 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 Sellers or
by the Underwriters and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or
omission. The Underwriters' respective obligations to contribute
pursuant to this Section 8 are several in proportion to the respective
number of Shares they have purchased hereunder, and not joint.
(f) The Sellers and the Underwriters agree that it would not be
just or equitable if contribution pursuant to this Section 8 were
determined by pro rata allocation (even if the Underwriters were treated
as one entity for such purpose) or by any other method of allocation
that does not take account of the equitable considerations referred to
in Section 8(e). The amount paid or payable 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, no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the
Shares underwritten by it and distributed to the public were offered to
the public exceeds the amount of any damages that such 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
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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.
(g) The indemnity and contribution provisions contained in this
Section 8 and the representations, warranties and other statements of
the Company and the Selling Shareholders 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 any Underwriter or any person controlling any Underwriter, the
Selling Shareholders 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 9(a)(i) through 9(a)(iv), 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; Defaulting Underwriters. This Agreement shall become
effective upon the execution and delivery hereof by the parties hereto.
If, on the Closing Date or the Option Closing Date, as the case may be,
any one or more of the Underwriters shall fail or refuse to purchase Shares that
it has or they have agreed to purchase hereunder on such date, and the aggregate
number of Shares which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase is not more than one-tenth of the aggregate number
of the Shares to be purchased on such date, the other Underwriters shall be
obligated severally in the proportions that the number of Firm Shares set forth
opposite their respective names in Schedule I bears to the aggregate number of
Firm Shares set forth opposite the names of all such non-defaulting
Underwriters, or in such other proportions as you may specify, to purchase the
Shares which such defaulting Underwriter or Underwriters agreed but failed or
refused to purchase on such date; provided that in no event shall the number of
Shares that any Underwriter has agreed to purchase pursuant to this Agreement be
increased
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pursuant to this Section 10 by an amount in excess of one-ninth of such number
of Shares without the written consent of such Underwriter. If, on the Closing
Date, any Underwriter or Underwriters shall fail or refuse to purchase Firm
Shares and the aggregate number of Firm Shares with respect to which such
default occurs is more than one-tenth of the aggregate number of Firm Shares to
be purchased, and arrangements satisfactory to you and the Company for the
purchase of such Firm Shares are not made within 36 hours after such default,
this Agreement shall terminate without liability on the part of any
non-defaulting Underwriter or the Company. In any such case either you or the
Company shall have the right to postpone the Closing Date, but in no event for
longer than seven days, in order that the required changes, if any, in the
Registration Statement, the Resale Registration Statement and the Prospectus or
in any other documents or arrangements may be effected. If, on the Option
Closing Date, any Underwriter or Underwriters shall fail or refuse to purchase
Additional Shares and the aggregate number of Additional Shares with respect to
which such default occurs is more than one-tenth of the aggregate number of
Additional Shares to be purchased, the non-defaulting Underwriters shall have
the option to (i) terminate their obligation hereunder to purchase Additional
Shares or (ii) purchase not less than the number of Additional Shares that such
non-defaulting Underwriters would have been obligated to purchase in the absence
of such default. Any action taken under this paragraph shall not relieve any
defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of any Seller to comply with
the terms or to fulfill any of the conditions of this Agreement, or if for any
reason any Seller shall be unable to perform its obligations under this
Agreement, the Sellers will reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and disbursements of their counsel)
reasonably incurred by such Underwriters 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.
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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.
Very truly yours,
AVIRON
By:
------------------------------------------
Name:
Title:
The Selling Shareholders named in
Schedule II Hereto, acting severally
By:
------------------------------------------
Name:
Title: Attorney-in-Fact
Accepted as of the date hereof
XXXXXX XXXXXXX & CO. INCORPORATED
X.X. XXXXXX SECURITIES INC.
XX XXXXX SECURITIES CORPORATION
Acting severally on behalf of themselves and
the several Underwriters named in
Schedule I hereto.
By: Xxxxxx Xxxxxxx & Co. Incorporated
By:
-----------------------------------------
Name:
Title:
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SCHEDULE I
NUMBER OF FIRM
SHARES TO BE
UNDERWRITER PURCHASED
----------- ---------------
Xxxxxx Xxxxxxx & Co. Incorporated ................ 1,456,000
X.X. Xxxxxx Securities Inc. ...................... 1,092,000
XX Xxxxx Securities Corporation .................. 1,092,000
Bear, Xxxxxxx & Co. Inc. ......................... 60,000
First Union Securities, Inc. ..................... 60,000
Xxxxxx X. Xxxxx & Co., L.P. ...................... 60,000
Leerink Xxxxx & Company .......................... 60,000
Punk, Xxxxxx & Company, L.P. ..................... 60,000
U.S. Bancorp Xxxxx Xxxxxxx Capital Markets ....... 60,000
---------------
Total: ................................... 4,000,000
===============
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SCHEDULE II
NUMBER OF ADDITIONAL
SELLING SHAREHOLDER SHARES TO BE SOLD
------------------- --------------------
X. Xxxxxxxx Read ............. 150,000
Xxxxxxx Xxxxxxx .............. 50,000
-------
Total: .................. 200,000
=======
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EXHIBIT A
[FORM OF LOCK-UP LETTER]
___________, 2001
Xxxxxx Xxxxxxx & Co. Incorporated
X.X. Xxxxxx Securities Inc.
XX Xxxxx Securities Corporation
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
Dear Sirs and Mesdames:
The undersigned understands that Xxxxxx Xxxxxxx & Co. Incorporated
("XXXXXX XXXXXXX") proposes to enter into an Underwriting Agreement (the
"UNDERWRITING AGREEMENT") with Aviron, a Delaware corporation (the "COMPANY"),
and the selling shareholders named in Schedule II thereto, providing for the
public offering (the "PUBLIC OFFERING") by the several Underwriters, including
Xxxxxx Xxxxxxx (the "UNDERWRITERS"), of shares (the "SHARES") of the common
stock, par value $0.001 per share, of the Company (the "COMMON STOCK").
To induce the Underwriters that may participate in the Public Offering
to continue their efforts in connection with the Public Offering, the
undersigned hereby agrees that, without the prior written consent of Xxxxxx
Xxxxxxx on behalf of the Underwriters, it will not, during the period commencing
on the date hereof and ending 90 days after the date of the final prospectus
supplement relating to the Public Offering (the "PROSPECTUS"), (1) 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 (2) 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 (1) or (2) 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 sale of any Shares to the Underwriters pursuant to the Underwriting
Agreement, (b) transactions relating to shares of Common Stock or other
securities acquired in open market transactions after the completion of the
Public Offering and (c) transfers of shares of Common Stock or any security
convertible into Common Stock as a bona fide gift or gifts; provided that in the
case of any transfer pursuant to clause (c), (i) each donee shall execute and
deliver to Xxxxxx Xxxxxxx a duplicate form of this lock-up agreement and (ii) no
filing by any party (donor, donee, transferor or transferee) under Section 16(a)
of the Securities Exchange Act of 1934, as amended, shall be required or shall
be
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made voluntarily in connection with such transfer (other than a filing on a Form
5 made after the expiration of the 90-day period referred to above). In
addition, the undersigned agrees that, without the prior written consent of
Xxxxxx Xxxxxxx on behalf of the Underwriters, it will not, during the period
commencing on the date hereof and ending 90 days after the date of the
Prospectus, make any demand for or exercise any right with respect to, the
registration of any shares of Common Stock or any security convertible into or
exercisable or exchangeable for Common Stock. The undersigned also agrees and
consents to the entry of stop transfer instructions with the Company's transfer
agent and registrar against the transfer of the undersigned's shares of Common
Stock except in compliance with the foregoing restrictions.
The undersigned understands that the Company and the Underwriters are
relying upon this lock-up agreement in proceeding toward consummation of the
Public Offering. The undersigned further understands that this lock-up agreement
is irrevocable and shall be binding upon the undersigned's heirs, legal
representatives, successors and assigns.
Whether or not the Public Offering actually occurs depends on a number
of factors, including market conditions. Any Public Offering will only be made
pursuant to an Underwriting Agreement, the terms of which are subject to
negotiation between the Company and the Underwriters. This agreement will
terminate if the Underwriting Agreement has not been executed on or before June
1, 2001 or if the Company notifies you (with the prior written consent of Xxxxxx
Xxxxxxx, such consent not to be unreasonably withheld) that it does not intend
to proceed with the Public Offering.
Very truly yours,
----------------------------------
(Name)
----------------------------------
(Address)
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EXHIBIT B
PATENT PORTFOLIO
SECTION A -- (XXXXXX & XXXXXXX)
P&E DOCKET NO. P&E DOCKET NO.
-------------- --------------
7682-0010 7682-0025
7682-0021 7682-0048
7682-0035 7682-0045
7682-0036 7682-0047
7682-0034 7682-0049
7682-0044 7682-0039
7682-0019 7682-0038
7682-0037 7682-0050
7682-0051 7682-0052
7682-0053 7682-0054
7682-0055
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EXHIBIT B (CONT'D)
SECTION B -- (XXXXXXXX X'XXXXX)
XXXXXXXX DOCKET NO. XXXXXXXX DOCKET NO.
------------------- -------------------
28097/32325 27373/32742
27373/32908 27373/32742A
27373/0001 27373/31916
27373/0003 27373/0002F
27373/8235 27373/0002E
27373/31746CA 28097/33309
27373/31746JP 27373/0002B
27373/32908CA 27373/0002D
27373/32908JP 27373/31746EPO
27373/8235JP 27373/32908EPO
27373/0001EPO 27373/8235CA
27373/0002EPO 27373/31746AU
27373/0002AJP 27373/0001CA
27373/0003EPO 27373/0002JP
27373/0003JP 27373/0003AU
27373/8235AU 27373/0003CA
27373/31011KR 27373/0003ZA
27373/8235EPO
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EXHIBIT B (CONT'D)
SECTION C - (LAW OFFICES OF XXXXX XXXXX)
AVIRON REFERENCE NO.
5016
5016.1
5016.2
5018 IN
5018 MY
5019
5019.1
5019.2
5019.3
5019 PCT
5019 AU
5019 CA
5019 EP
5019 JP
5021
5021.1
5021.2
5021 PCT
5021 AU
5021 CA
5021 EP
5021 JP
5021 SK
5022
5022.1
5023.1
5023 PCT
AV 9801 US
36
