EXHIBIT 10.27
Portions of this exhibit were omitted and filed separately with the Secretary of
the Commission pursuant to an application for confidential treatment filed with
the Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934.
Such portions are marked by a series of asterisks.
$150,000,000
VIROPHARMA INCORPORATED
6% Convertible Subordinated Debentures Due 2007
PURCHASE AGREEMENT
February 24, 2000
February 24, 2000
Xxxxxx Xxxxxxx & Co. Incorporated
U.S. Bancorp Xxxxx Xxxxxxx Inc.
c/o Morgan 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 the several purchasers named in Schedule I hereto (the
"Initial Purchasers") $150,000,000 principal amount of its 6% Convertible
Subordinated Notes due 2007 (the "Firm Securities") to be issued pursuant to the
provisions of an Indenture (the "Indenture") between the Company and Summit
Bank, as Trustee (the "Trustee"). The Company also proposes to issue and sell to
the Initial Purchasers not more than an additional $30,000,000 principal amount
of its 6% Convertible Subordinated Notes due 2007 (the "Additional Securities")
if and to the extent that you shall have determined to exercise, on behalf of
the Initial Purchasers, the right to purchase such 6% Convertible Subordinated
Notes due 2007 granted to the Initial Purchasers in Section 2 hereof. The Firm
Securities and the Additional Securities are hereinafter collectively referred
to as the "Securities". The Securities will be convertible into shares of Common
Stock, $.002 par value, of the Company (the "Underlying Securities").
The Securities and the Underlying Securities will be offered without being
registered under the Securities Act of 1933, as amended (the "Securities Act"),
only to qualified institutional buyers in compliance with the exemption from
registration provided by Rule 144A under the Securities Act and to a limited
number of institutional accredited investors (as defined in Rule 501(a)(1), (2),
(3) or (7) under the Securities Act) that deliver a letter in the form annexed
to the Final Memorandum (as defined below).
The Initial Purchasers and their direct and indirect transferees will be
entitled to the benefits of a Registration Rights Agreement dated the date
hereof between the Company and the Initial Purchasers (the "Registration Rights
Agreement").
In connection with the sale of the Securities, the Company has prepared a
preliminary offering memorandum (the "Preliminary Memorandum") and a
final offering memorandum (the "Final Memorandum" and, with the Preliminary
Memorandum, each a "Memorandum") including a description of the terms of the
Securities and the Underlying Securities, the terms of the offering and a
description of the Company. Unless otherwise indicated, any reference herein to
a Memorandum shall include all documents incorporated therein by reference. The
terms "supplement", "amendment" and "amend" as used herein with respect to a
Memorandum shall include all documents deemed to be incorporated by reference in
the Preliminary Memorandum or Final Memorandum that are filed subsequent to the
date of such Memorandum and before the date you have sold all of the Securities
in accordance with this Agreement with the Securities and Exchange Commission
(the "Commission") pursuant to the Securities Exchange Act of 1934, as amended
(the "Exchange Act").
1. Representations and Warranties. The Company represents and warrants to
and agrees with, the Initial Purchasers that:
(a) (i) Each document, if any, filed or to be filed pursuant to
the Exchange Act and incorporated by reference in either Memorandum
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 and (ii) the Preliminary Memorandum does not
contain and the Final Memorandum, in the form used by the Initial
Purchasers to confirm sales and on the Closing Date (as defined in
below) and the Option Closing Date (as defined below), 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 either Memorandum
based upon information relating to any Initial Purchaser furnished to
the Company in writing by such Initial Purchaser through you expressly
for use therein.
(b) The Company 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 each Memorandum 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.
(c) The Company does not own or control, directly or
indirectly, any interest in any other corporation, association, or
other business entity.
(d) This Agreement has been duly authorized, executed and
delivered by the Company.
(e) The authorized capital stock of the Company conforms as to
legal matters to the description thereof contained in the Final
Memorandum.
(f) The shares of the Company's capital stock outstanding on the
date hereof have been duly authorized and are validly issued, fully
paid and non-assessable.
(g) The Securities have been duly authorized and, when executed
and authenticated in accordance with the provisions of the Indenture
and delivered to and paid for by the Initial Purchasers in accordance
with the terms of this Agreement, will be valid and binding
obligations of the Company, enforceable in accordance with their
terms, subject to applicable bankruptcy, insolvency or similar laws
affecting creditors' rights generally and general principles of
equity, and will be entitled to the benefits of the Indenture and the
Registration Rights Agreement.
(h) The Underlying Securities reserved for issuance upon
conversion of the Securities have been duly authorized and reserved
and, when issued upon conversion of the Securities in accordance with
the terms of the Securities, will be validly issued, fully paid and
non-assessable, and the issuance of the Securities is not, and the
issuance of the Underlying Securities will not be, subject to any
preemptive or similar rights.
(i) Each of the Indenture and the Registration Rights Agreement
has been duly authorized, and when executed and delivered by the
Company, will be a valid and binding agreement of the Company,
enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency or similar laws affecting creditors' rights
generally and general principles of equity, and except as rights to
indemnification and contribution under the Registration Rights
Agreement may be limited under applicable law.
(j) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement,
the Indenture, the Registration Rights Agreement and the Securities
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, the Indenture, the Registration Rights Agreement or the
Securities, 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 Securities and by Federal and state securities laws with
respect to the Company's obligations under the Registration Rights
Agreement.
(k) 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 Final Memorandum
(exclusive of any amendments or supplements thereto subsequent to the
date of this Agreement).
(l) 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 other than proceedings that would
not have a material adverse effect on the Company or on the power or
ability of the Company to perform its obligations under this
Agreement, the Indenture, the Registration Rights Agreement or the
Securities or to consummate the transactions contemplated by the Final
Memorandum.
(m) The Company is not, and after giving effect to the offering
and sale of the Securities and the application of the proceeds thereof
as described in each Memorandum, will not be an "investment company"
as such term is defined in the Investment Company Act of 1940, as
amended.
(n) 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
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.
(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 be reasonably expected,
singly or in the aggregate, to have a material adverse effect on the
Company.
(p) Neither the Company nor any affiliate (as defined in Rule
501(b) of Regulation D under the Securities Act, an "Affiliate") of
the Company has directly, or through any agent, (i) sold, offered for
sale, solicited offers to buy or otherwise negotiated in respect of,
any security (as defined in the Securities Act) which is or will be
integrated with the sale of the Securities in a manner that would
require the registration under the Securities Act of the Securities or
(ii) engaged in any form of general solicitation or general
advertising in connection with the offering of the Securities (as
those terms are used in Regulation D under the Securities Act) or
solicited offers to buy or offered to sell any of the Securities in
any manner involving a public offering within the meaning of Section
4(2) of the Securities Act.
(q) It is not necessary in connection with the offer, sale and
delivery of the Securities to the Initial Purchasers in the manner
contemplated by this Agreement to register the Securities under the
Securities Act or to qualify the Indenture under the Trust Indenture
Act of 1939, as amended.
(r) The Securities satisfy the requirements set forth in Rule
144A(d)(3) under the Securities Act.
(s) Subsequent to the respective dates as of which information
is given in each Memorandum, (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 such Memorandum.
(t) 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 each Memorandum 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 each
Memorandum.
(u) The Company owns or possesses adequate licenses or other
rights to use the patents and patent applications set forth on Exhibit
-------
A hereto (the "Company Patents"), 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 each Memorandum (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 such Memorandum, and, except as disclosed in the Final
Memorandum, the Company has not received any notice of infringement or
conflict with (and the Company does not know of any infringement of
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 each Memorandum, the discoveries,
inventions, products or processes of the Company referred to in such
Memorandum 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 each Memorandum,
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 such Memorandum
(v) 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 listed on Exhibit A (the "Company Patent Applications");
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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.
(w) No material labor dispute with the employees of the Company
exists, except as described in or contemplated by each Memorandum, or,
to the knowledge of the Company, is imminent; and the Company is not
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.
(x) 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 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.
(y) 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.
(z) 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.
(aa) KPMG LLP are, and during the periods covering their report
included or incorporated by reference in each Memorandum 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 in or incorporated by reference in
each Memorandum 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 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.
(bb) Except as described in each Memorandum, 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 Securities and Underlying Securities to be
registered pursuant to the Registration Rights Agreement. All persons
who possess such rights have effectively waived them with respect to
the registration of the Underlying Shares pursuant to the Registration
Rights Agreement.
(cc) 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.
(dd) The Company has reviewed its operations to evaluate the
extent to which the business or operations of the Company has been or
will be affected by the Year 2000 Problem (that is, any significant
risk that computer hardware or software applications used by the
Company did not or will not, in the case of dates or time periods
occurring after December 31, 1999, function at least as effectively as
in the case of dates or time periods occurring prior to January 1,
2000); as a result of such review, (i) the Company has no reason to
believe, and does not believe, that (A) there are any issues related
to the Company's preparedness to address the Year 2000 Problem that
are of a character required to be described or referred to in each
Memorandum which have not been accurately described in such Memorandum
and (B) the Year 2000 Problem had or will have a material adverse
effect on the Company, or result in any material loss or interference
with the business or operations of the Company; and (ii) the Company
reasonably believes, after due inquiry, that the suppliers, vendors,
customers or other material third parties used or served by the
Company have addressed or will address the Year 2000 Problem in a
timely manner, except to the extent that a failure to address the Year
2000 Problem by any supplier, vendor, customer or material third party
would not have a material adverse effect on the Company.
2. Agreements to Sell and Purchase. The Company hereby agrees to sell to
the several Initial Purchasers, and each Initial Purchaser, 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 principal amount of Firm Securities set forth in
Schedule I hereto opposite its name at a purchase price of 97% of the principal
amount thereof (the "Purchase Price") plus accrued interest, if any, to the
Closing Date.
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company agrees to sell
to the Initial Purchasers the Additional Securities, and the Initial Purchasers
shall have a one-time right to purchase, severally and not jointly, up to
$30,000,000 principal amount of Additional Securities at the Purchase Price plus
accrued interest, if any, to the date of payment and delivery. If Xxxxxx Xxxxxxx
& Co. Incorporated ("Xxxxxx Xxxxxxx"), on behalf of the Initial Purchasers,
elects to exercise such option, Xxxxxx Xxxxxxx shall so notify the Company in
writing not later than 30 days after the date of this Agreement, which notice
shall specify the principal amount of Additional Securities to be purchased by
the Initial Purchasers and the date on which such Additional Securities are to
be purchased. Such date may be the same as the Closing Date but not earlier than
the Closing Date nor later than ten business days after the date of such notice.
Additional Securities may be purchased as provided in Section 4 hereof solely
for the purpose of covering over-allotments made in connection with the offering
of the Firm Securities. If any Additional Securities are to be purchased, each
Initial Purchaser agrees, severally and not jointly, to purchase the principal
amount of Additional Securities (subject to such adjustments to eliminate
fractional Securities as you may determine) that bears the same proportion to
the total principal amount of Additional Securities to be purchased as the
principal amount of Firm Securities set forth in Schedule I opposite the name of
such Initial Purchaser bears to the total principal amount of Firm Securities.
The Company hereby agrees that, without the prior written consent of Xxxxxx
Xxxxxxx on behalf of the Initial Purchasers, it will not, during the period
ending 90 days after the date of the Final Memorandum, (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 sale of the
Securities under this Agreement, (B) the issuance of the Underlying Securities
upon conversion of the Securities, (C) 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 of and described in the Final Memorandum, (D) the issuance of
additional options under the Company's existing stock option plans, provided
that such stock options are not exercisable during such 90 day period, or (E)
the issuance by the Company of Common Stock pursuant to the Stock Purchase
Agreement between the Company and American Home Products Corporation, dated as
of December 9, 1999. The Initial Purchasers acknowledge 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 Offering. You have advised the Company that the Initial
Purchasers will make an offering of the Securities purchased by the Initial
Purchasers hereunder on the terms to be set forth in the Final Memorandum, as
soon as practicable after this Agreement is entered into as in your judgment is
advisable.
4. Payment and Delivery. Payment for the Firm Securities shall be made to
the Company in Federal or other funds immediately available in New York City
against delivery of such Firm Securities for the respective accounts of the
several Initial Purchasers at 10:00 a.m., New York City time, on March 1, 1999
at a closing to be held at the offices of Ropes & Xxxx, One International Place,
Boston, Massachusetts or at such other time and place on the same or such other
date, not later than March 10, 2000, 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 Securities shall be made to the Company in
Federal or other funds immediately available in New York City against delivery
of such Additional Securities for the respective accounts of the several Initial
Purchasers at 10:00 a.m., New York City time, on the date specified in the
notice described in Section 2 at a closing to be held at the offices of Ropes &
Xxxx, One International Place, Boston, Massachusetts or at such other time on
the same or on such other date, in any event not later than April 14, 2000, as
shall be designated in writing by you. The time and date of such payment are
hereinafter referred to as the "Option Closing Date."
Notes representing the Firm Securities and Additional Securities shall be
in certificated form or global form, as specified by you, 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 notes evidencing the Firm Securities and Additional
Securities 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 Initial
Purchasers, with any transfer taxes payable in connection with the transfer of
the Securities to the Initial Purchasers duly paid, against payment of the
Purchase Price therefor plus accrued interest, if any, to the date of payment
and delivery.
5. Conditions to the Initial Purchasers' Obligations. The several
obligations of the Initial Purchasers to purchase and pay for the Securities on
the Closing Date and the Option Closing Date, as the case may be, are subject to
the following conditions:
(a) Subsequent to the execution and delivery of this Agreement
and prior to the Closing Date and the Option Closing Date, as the case
may be, 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 the Company or any of
the Company's securities or in the rating outlook for the Company by
any "nationally recognized statistical rating organization," as such
term is defined for purposes of Rule 436(g)(2) under the Securities
Act.
(b) Subsequent to the execution and delivery of this Agreement
and prior to the Closing Date and the Option Closing Date, as the case
may be, 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 Final Memorandum (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 Securities on
the terms and in the manner contemplated in the Final Memorandum.
(c) The Initial Purchasers shall have received on the Closing
Date and the Option Closing Date, as the case may be, a certificate,
dated such date and signed by an executive officer of the Company, to
the effect set forth in Section 5(a) 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.
(d) The Initial Purchasers shall have received on the Closing
Date and the Option Closing Date, as the case may be, an opinion of
Pepper, Xxxxxxxx LLP, outside counsel for the Company, dated such
date, to the effect set forth in Exhibit B hereto.
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(e) The Initial Purchasers shall have received on the
Closing Date and the Option Closing Date, as the case may be, an
opinion dated such date of Dann, Dorfman, Xxxxxxx and Xxxxxxxx, P.C.,
special patent counsel to the Company, to the effect set forth in
Exhibit C.
(f) The Initial Purchasers shall have received on the Closing
Date and the Option Closing Date, as the case may be, an opinion dated
such date of Xxxxxxx Xxxx, Esq., internal regulatory counsel to the
Company, to the effect set forth in Exhibit D hereto.
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(g) The Initial Purchasers shall have received on the Closing
Date and the Option Closing Date, as the case may be, an opinion of
Ropes & Xxxx, counsel for the Initial Purchasers, dated such date, in
a form satisfactory to the Initial Purchasers.
The opinions of Pepper, Xxxxxxxx LLP Dann, Dorfman, Xxxxxxx and
Xxxxxxxx, P.C., and Xxxxxxx Xxxx, Esq. described, respectively, in
Sections 5(d), 5(e) and 5(f) above shall be rendered to the Initial
Purchasers at the request of the Company and shall so state therein.
(h) The Initial Purchasers shall have received, on each of the
date hereof, the Closing Date and the Option Closing Date, a letter
dated such date, in form and substance satisfactory to the Initial
Purchasers, 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 information contained in or
incorporated by reference into the Final Memorandum; provided that the
letter delivered on the Closing Date shall use a "cut-off date" not
earlier than the date hereof.
(i) The "lock-up" agreements, each substantially in the form of
Exhibit E hereto, between you and certain shareholders, 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 and the Option Closing Date, as the
case may be.
(j) The Company shall have executed and delivered the Indenture
and the Registration Rights Agreement and the Trustee shall have
executed and delivered the Indenture.
The several obligations of the Initial Purchasers to purchase Additional
Securities 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, execution and authentication of
the Additional
Securities and other matters related to the execution and authentication of the
Additional Securities.
6. Covenants of the Company. In further consideration of the agreements
of the Initial Purchasers contained in this Agreement, the Company covenants
with each Initial Purchaser as follows:
(a) 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), as many copies of the Final Memorandum, any documents
incorporated by reference therein and any supplements and amendments
thereto as you may reasonably request.
(b) Before amending or supplementing either Memorandum, to
furnish to you a copy of each such proposed amendment or supplement
and not to use any such proposed amendment or supplement to which you
reasonably object.
(c) If, during such period after the date hereof and prior to
the date on which all of the Securities shall have been sold by the
Initial Purchasers in accordance with this Agreement, any event shall
occur or condition exist as a result of which it is necessary to amend
or supplement the Final Memorandum in order to make the statements
therein, in the light of the circumstances when the Final Memorandum
is delivered to a purchaser, not misleading, or if, in the opinion of
counsel for the Initial Purchasers, it is necessary to amend or
supplement the Final Memorandum to comply with applicable law,
forthwith to prepare and furnish, at its own expense, to the Initial
Purchasers, either amendments or supplements to the Final Memorandum
so that the statements in the Final Memorandum as so amended or
supplemented will not, in the light of the circumstances when the
Final Memorandum is delivered to a purchaser, be misleading or so that
the Final Memorandum, as amended or supplemented, will comply with
applicable law.
(d) To endeavor to qualify the Securities for offer and sale
under the securities or Blue Sky laws of such jurisdictions as you
shall reasonably request.
(e) 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 and the Company's
accountants in connection with the issuance and sale of
the Securities and all other fees or expenses in connection with the
preparation of each Memorandum and all amendments and supplements
thereto, including all printing costs associated therewith, and the
delivering of copies thereof to the Initial Purchasers, in the
quantities hereinabove specified, (ii) all costs and expenses related
to the transfer and delivery of the Securities to the Initial
Purchasers, 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
Securities under state securities laws and all expenses in connection
with the qualification of the Securities for offer and sale under
state securities laws as provided in Section 6(d) hereof, including
filing fees and the reasonable fees and disbursements of one counsel
for the Initial Purchasers in connection with such qualification and
in connection with the Blue Sky or legal investment memorandum, (iv)
any fees charged by rating agencies for the rating of the Securities,
(v) the fees and expenses, if any, incurred in connection with the
admission of the Securities for trading in PORTAL or any appropriate
market system, (vi) the costs and charges of the Trustee and any
transfer agent, registrar or depositary, (vii) the cost of the
preparation, issuance and delivery of the Securities, (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 Securities, 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 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, and the
last paragraph of Section 10, the Initial Purchasers will pay all of
their costs and expenses, including fees and disbursements of their
counsel, transfer taxes payable on resale of any of the Securities by
them and any advertising expenses connected with any offers they may
make.
(f) Neither the Company nor any Affiliate will sell, offer for
sale or solicit offers to buy or otherwise negotiate in respect of any
security (as defined in the Securities Act) which would be integrated
with the sale of the Securities in a manner which would require the
registration under the Securities Act of the Securities.
(g) Neither the Company nor any Affiliate will solicit any offer
to buy or offer or sell the Securities or the Underlying Securities by
means of any form of general solicitation or general advertising (as
those terms are used in Regulation D under the Securities Act) or in
any manner involving a public offering within the meaning of Section
4(2) of the Securities Act.
(h) While any of the Securities or the Underlying Securities
remain "restricted securities" within the meaning of the Securities
Act, to make available, upon request, to any seller of such Securities
the information specified in Rule 144A(d)(4) under the Securities Act,
unless the Company is then subject to Section 13 or 15(d) of the
Exchange Act.
(i) To use its best efforts to permit the Securities to be
designated PORTAL securities in accordance with the rules and
regulations adopted by the National Association of Securities Dealers,
Inc. relating to trading in the PORTAL Market.
(j) During the period of two years after the Closing Date or the
Option Closing Date, if later, the Company will not, and will not
permit any of its affiliates (as defined in Rule 144 under the
Securities Act) to resell any of the Securities or the Underlying
Securities which constitute "restricted securities" under Rule 144
that have been reacquired by any of them.
(k) To comply with all of the terms and conditions of the
Registration Agreement, and all agreements set forth in the
representation letters of the Company to DTC relating to the approval
of the Securities by DTC for "book entry" transfer.
(l) Prior to any registration of the Securities pursuant to the
Registration Rights Agreement, or at such earlier time as may be so
required, to qualify the Indenture under the 1939 Act and to enter
into any necessary supplemental indentures in connection therewith.
7. Offering of Securities. Each Initial Purchaser, severally and not
jointly, represents and warrants that such Initial Purchaser is a qualified
institutional buyer as defined in Rule 144A under the Securities Act (a "QIB").
Each Initial Purchaser, severally and not jointly, agrees with the Company that
(i) it will not solicit offers for, or offer or sell, such Securities by any
form of general solicitation or general advertising (as those terms are used in
Regulation D under the Securities Act) or in any manner involving a public
offering within the meaning of Section 4(2) of the Securities Act and (ii) it
will solicit offers for such Securities only from, and will offer such
Securities only to, persons that it reasonably believes to be (A) QIBs or (B)
within the United States, other institutional accredited investors (as defined
in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act ("institutional accredited investors"), that, in each
case, in purchasing such Securities are deemed to have represented and agreed as
provided in the Final Memorandum under the caption "Transfer Restrictions";
provided that in the case of an institutional accredited investor, each such
institutional accredited investor shall, prior to its purchase of the
Securities, deliver to such Initial Purchaser a letter containing the
representations and agreements set forth in Annex A to the Final Memorandum.
8. Indemnity and Contribution.
(a) The Company agrees to indemnify and hold harmless each
Initial Purchaser and each person, if any, who controls any Initial
Purchaser 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 either Memorandum (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 necessary to make the statements therein
in the light of the circumstances under which they were made 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 Initial Purchaser furnished to the Company in writing by such
Initial Purchaser through you expressly for use therein; provided,
--------
however, that the foregoing indemnity agreement with respect to the
-------
Preliminary Memorandum shall not inure to the benefit of any Initial
Purchaser from whom the person asserting any such losses, claims,
damages or liabilities purchased Securities, or any person controlling
such Initial Purchaser, if a copy of the Final Memorandum (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 Initial Purchaser to such person at or prior to
delivery of written confirmation of the sale of the Securities to such
person, and if the Final Memorandum (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 6(a) hereof.
(b) Each Initial Purchaser agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers
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 such Initial Purchaser, but only with
reference to information relating to such Initial Purchaser furnished
to the Company in writing by such Initial Purchaser through you
expressly for use in either Memorandum or any amendments or
supplements thereto.
(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, in the case of parties
indemnified pursuant to Section 8(a), and by 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
Initial Purchasers on the other hand from the offering of the
Securities 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 Initial Purchasers 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 Initial Purchasers on the other hand
in connection with the offering of the Securities shall be deemed to
be in the same respective proportions as the net proceeds from the
offering of the Securities (before deducting expenses) received by the
Company and the total discounts and commissions received by the
Initial Purchasers, bear to the aggregate offering price of the
Securities. The relative fault of the Company on the one hand and of
the Initial Purchasers 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 Initial Purchasers and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Initial Purchasers' respective
obligations to contribute pursuant to this Section 8 are several in
proportion to the respective principal amount of Securities they have
purchased hereunder, and not joint.
(e) The Company and the Initial Purchasers 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 Initial Purchasers
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(d). The amount paid
or payable by an indemnified party as a result of the losses, claims,
damages and liabilities referred to in Section 8(d) 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 Initial Purchaser
shall be required to contribute any amount in excess of the amount by
which the total price at which the Securities resold by it in the
initial placement of such Securities were offered to investors exceeds
the amount of any damages that such Initial Purchaser 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 any Initial
Purchaser or any person controlling any Initial Purchaser 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 Securities.
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 Securities on the terms and in the manner contemplated in the Final
Memorandum.
10. Effectiveness; Defaulting Initial Purchasers. 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 Initial Purchasers shall fail or refuse to purchase
Securities that it has or they have agreed to purchase hereunder on such date,
and the aggregate principal amount of Securities which such defaulting Initial
Purchaser or Initial Purchasers agreed but failed or refused to purchase is not
more than one-tenth of the aggregate principal amount of Securities to be
purchased on such date, the other Initial Purchasers shall be obligated
severally in the proportions that the principal amount of Firm Securities set
forth opposite their respective names in Schedule I bears to the aggregate
principal amount of Firm Securities set forth opposite the names of all such
non-defaulting Initial Purchasers, or in such other proportions as you may
specify, to purchase the Securities which such defaulting Initial Purchaser or
Initial Purchasers agreed but failed or refused to purchase on such date;
provided that in no event shall the principal amount of Securities that any
Initial Purchaser has agreed to purchase pursuant to this Agreement be increased
pursuant to this Section 10 by an amount in excess of one-ninth of such
principal amount of Securities without the written consent of such Initial
Purchaser. If, on the Closing Date any Initial Purchaser or Initial Purchasers
shall fail or refuse to purchase Firm Securities which it or they have agreed to
purchase hereunder on such date and the aggregate principal amount of Securities
with respect to which such default occurs is more than one-tenth of the
aggregate principal amount of Firm Securities to be purchased on such date, and
arrangements satisfactory to you and the Company for the purchase of such Firm
Securities are not made within 36 hours after such default, this Agreement shall
terminate without liability on the part of any non-defaulting Initial Purchaser
or of 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 Final Memorandum or in any
other documents or arrangements may be effected. If, on the Option Closing Date,
any Initial Purchaser or Initial Purchasers shall fail or refuse to purchase
Additional Securities and the aggregate principal amount of Additional
Securities with respect to which such default occurs is more than one-tenth of
the aggregate principal amount of Additional Securities to be purchased, the
non-defaulting Initial Purchasers shall have the option to (a) terminate their
obligation hereunder to purchase Additional Securities or (b) purchase not less
than the principal amount of Additional Securities that such non-defaulting
Initial Purchasers would have been obligated to purchase in the absence of such
default. Any action taken under this paragraph shall not relieve any defaulting
Initial Purchaser from liability in respect of any default of such Initial
Purchaser under this Agreement.
If this Agreement shall be terminated by the Initial Purchasers, or any of
them, because of any failure or refusal on the part of the Company to comply
with the terms or to fulfill any of the 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 Initial Purchasers or such Initial
Purchasers 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 Initial Purchasers in connection with this Agreement
or the offering contemplated hereunder.
11. Counterparts. This Agreement may be signed in any number of
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.
Very truly yours,
VIROPHARMA INCORPORATED
By: /s/ Xxxxxx X. Xxxx
------------------
Name: Xxxxxx X. Xxxx
Title: Chief Executive Officer
Accepted as of the date hereof
Xxxxxx Xxxxxxx & Co. Incorporated
U.S. Bancorp Xxxxx Xxxxxxx Inc.
Acting severally on behalf of themselves and
the several Initial Purchasers named in
Schedule I hereto.
By: Xxxxxx Xxxxxxx & Co. Incorporated
By: /s/ Xxxxxx X. Xxxx
------------------
Name: Xxxxxx X. Xxxx
Title: Vice President
SCHEDULE I
Principal Amount of Firm
Initial Purchaser Securities to be Purchased
----------------- --------------------------
Xxxxxx Xxxxxxx & Co. Incorporated $120,000,000
U.S. Bancorp Xxxxx Xxxxxxx Inc. 30,000,000
Total: $150,000,000
============
2
EXHIBIT A
---------
"Company Patents"
-----------------
Number Title Date
--------------- ----- -----------------
U.S. Xxx. No. 5,633,388 Compounds, Compositions and Methods for Granted 5/27/97
Treatment of Hepatitis C.
U.S. Xxx. No. 5,684,024 Compounds Compositions and Methods for Granted 11/4/97
Treating Influenza.
U.S. Xxx. No. 5,830,894 Methods for Preventing and Treating Granted 11/3/98
Pestivirus Infection and Associated Diseases.
U.S. Xxx. No. 5,830,905 Compounds Compositions and Methods for Granted 11/3/98
Treatment of Hepatitis C.
U.S. Xxx. No. 5,821,243 Compounds, Compositions and Methods for Granted 10/13/98
Treating Influenza.
U.S. Xxx. No. 5,935,957 Compounds, Compositions and Methods for Granted 8/10/99
Treating Influenza.
"Company Patent Applications"
-----------------------------
U.S. Xxx. Appl. No. Compounds Compositions and Methods for Filed 5/26/98
09/084,538 Treatment of Hepatitis C.
U.S. Xxx. Appl. No. Compounds, Compositions and Methods for Filed 5/24/99
60/135,585 Treating or Preventing viral Infections and
Associated Diseases.
U.S. Xxx. Appl. No. Compounds, Compositions and Methods for Filed 5/24/99
60/135,586 Treating or Preventing viral Infections and
Associated Diseases.
U.S. Xxx. Appl. No. Methods for Identifying Inhibitors of RNA Filed 7/11/96
08/678,771 Viruses a.k.a. Methods for Identifying
Inhibitors of Helicase Activity from
Hepatitis C Virus.
************** ************** ******
"Foreign/International Patent Applications"
-------------------------------------------
PCT/US97/01614 Methods for Identifying Inhibitors of RNA Filed 1/17/97
(EPO Appl. No. Viruses.
97904912.9; Canada
Appl. No. 2,244,372;
Japan Appl. No. 527126/
1997)
PCT/US99/01985; Compounds, Compositions and Methods for Filed 1/29/99
also India Appl. Preventing Pneumovirus Infection.
No. 959/Del
3
PCT/US98/03452 Methods for Preventing and Treating Filed 2/23/98
(Australia Appl. Pestivirus Infection and Associated Diseases.
No.88365/98;
Brazil Appl. No.
PI 9804769.8;
Canada Appl. No.
2,251,646; EPO
Appl. No. 00000000.2;
Xxxxx Xxxx. Xx.000000/
0000; X.Xxxxx Appl. No.
98-708402; New Zealand
Appl. No. 332364);
Argentina Appl. Methods of Preventing and Treating Post Filed 7/8/98
No. P 98 01 Virus Infection and Asscociated Diseases
03315, 7/8/98
PCT/US99/07404 Improved Hepatitis C Polymerase Encoding Filed 4/1/99
Nucleic Acids and Methods of Use Thereof
a.k.a Hepatitis C Virus NS5B Compositions and
Methods of Use Thereof.
PCT/US97/12799 Compounds Compositions and Methods for Filed 7/21/97
(Canada Appl. No. Treating Influenza
2,260,799; EPO
Appl. No.
00000000.6; Japan
Serial No. 507182/
1998; S.Korea Appl.
No. 10-1999-7000449)
PCT/US99/18785 Compounds, Compositions and Methods for Filed 8/19/99
Treating or Preventing Viral Infections and
Associated Diseases.
Argentina, Chile, Compounds, Compositions and Methods for Treating Filed before
Pakistan, or Preventing Viral Infections and Associated 2/21/00 (or
Philippines, Diseases. earlier)
Taiwan and
Venezuela (No.
Appl. number yet)
(based on text of
RT105918785)
PCT/US99/20402 Methods for Treating or Preventing Viral Filed 9/3/99
Infections and Associated Diseases.
PCT/US99/22195 Methods for Treating or Preventing Viral Filed 9/24/99
Infections and Associated Diseases.
"Patents and patent applications licensed to the Company"
-------------------------------------------------------
U.S. Xxx. No. 5,453,433 Thiadiazoles and Antipicornaviral Granted 9/26/95
Compositions.
U.S. Xxx. No. 5,464,848 1,2,4-Oxadiazolyl-phenoxyalkylisoxazoles and Granted 11/7/95
Their Use as Antiviral Agents.
Canadian Xxx. Appl. 1,2,4-Oxadiazolyl-phenoxyalkylisoxazoles and Filed 4/14/93
No. 2094012 Their Use as Antiviral Agents.
PCT/US/95/05790 Thiadiazoles and Their Use as Filed 5/10/95
(Canada Appl. No. Antipicornaviral Agents.
2190130)
4
PCT/US/95/05790 Thiadiazoles and Their Use as Filed 5/10/95
(Canada Appl. No. Antipicornaviral Agents.
2190130)
5
EXHIBIT B
OPINION OF PEPPER, XXXXXXXX LLP
The opinion of Pepper, Xxxxxxxx LLP, to be delivered pursuant to Section
5(c) of the Purchase Agreement shall be to the effect that:
A. The Company 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 Final Memorandum and is duly qualified to transact business and
is in good standing in the Commonwealth of Pennsylvania.
B. The Purchase Agreement has been duly authorized, executed and delivered
by the Company.
C. The authorized capital stock of the Company conforms in all material
respects as to legal matters to the description thereof contained in the Final
Memorandum.
D. The shares of common stock outstanding on the Closing Date and the
Option Closing Date, as the case may be, have been duly authorized and are
validly issued, fully paid and non-assessable.
E. The Securities have been duly authorized by the Company and, when
executed and authenticated in accordance with the provisions of the Indenture
and delivered to and paid for by the Initial Purchasers in accordance with the
terms of the Purchase Agreement, will be valid and binding obligations of the
Company, enforceable in accordance with their terms, subject to applicable
bankruptcy, insolvency or similar laws affecting creditors' rights generally and
general principles of equity, and will be entitled to the benefits of the
Indenture and the Registration Rights Agreement pursuant to which such
Securities are to be issued.
F. The Underlying Securities reserved for issuance upon conversion of the
Securities have been duly authorized and reserved and, when issued upon
conversion of the Securities in accordance with the terms of the Securities,
will be validly issued, fully paid and non-assessable and the issuance of the
Underlying Securities will not be subject to any preemptive or similar rights.
6
G. Each of the Indenture and the Registration Rights Agreement has been
duly authorized, executed and delivered by, and is a valid and binding agreement
of, the Company, enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency or similar laws affecting creditors' rights generally and
general principles of equity and except as rights to indemnification and
contribution under the Registration Rights Agreement may be limited under
applicable law.
H. The execution and delivery by the Company of, and the performance by
the Company of its obligations under the Purchase Agreement, the Indenture, the
Registration Rights Agreement and the Securities will not contravene any
provision of applicable law or the certificate of incorporation or by-laws of
the Company or, to the best of such counsel's knowledge, any agreement or other
instrument binding upon the Company that is an exhibit to any of the documents
incorporated by reference into the Final Memorandum or, to the best of such
counsel's knowledge, any judgment, order or decree of any governmental body,
agency or court having jurisdiction over the Company or any 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 the Purchase Agreement, the Indenture, the Registration
Rights Agreement or the Securities, 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 Securities and by Federal and state securities laws with respect
to the Company's obligations under the Registration Rights Agreement.
I. After due inquiry, such counsel does not know of any legal or
governmental proceedings pending or threatened which the Company is a party or
to which any of the properties of the Company is subject other than proceedings
which such counsel believes are not likely to have a material adverse effect on
the Company or on the power or ability of the Company to perform its obligations
under the Purchase Agreement, the Indenture, the Registration Rights Agreement
or the Securities or to consummate the transactions contemplated by the Final
Memorandum.
J. The Company is not, and after giving effect to the offering and sale
of the Securities and the application of the proceeds thereof as described in
the Final Memorandum, will not be an "investment company" as such term is
defined in the Investment Company Act of 1940, as amended.
K. The statements in the Final Memorandum under the captions "Business--
Strategic Relationships," "Description of Notes," "Description of Capital
Stock," "Private Placement" and "Transfer Restrictions" insofar as such
7
statements constitute summaries of the legal matters, documents or proceedings
referred to therein, fairly summarize the matters referred to therein.
L. The statements in the Final Memorandum under the caption "Certain
Federal Income Tax Considerations," insofar as such statements constitute a
summary of the United States federal tax laws referred to therein, are accurate
and fairly summarize in all material respects the United States federal tax laws
referred to therein.
M. To the best of such counsel's knowledge, there are no contracts,
agreements or understandings between the Company and any person granting such
person the right to require the Company to include any securities with the
Securities and Underlying Securities to be registered pursuant to the
Registration Rights Agreement, which have been effectively waived with respect
thereto.
N. Each document incorporated by reference in the Final Memorandum
(except for financial statements and schedules and other financial and
statistical data included therein as to which such counsel need not express any
opinion), complied as to form when filed with the Commission in all material
respects with the Exchange Act and the rules and regulations of the Commission
thereunder.
O. Such counsel has no reason to believe that (except for financial
statements and schedules and other financial and statistical data as to which
such counsel need not express any belief) the Final Memorandum when used by the
Initial Purchasers to confirm sales contained, or as of the date such opinion is
delivered contains, any untrue statement of a material fact or omitted or omits
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.
P. Based upon the representations, warranties and agreements of the
Company in Sections 1(p), 1(r), 6(f), 6(g) and 6(j) of the Purchase Agreement
and of the Initial Purchasers in Section 7 of the Purchase Agreement, it is not
necessary in connection with the offer, sale and delivery of the Securities to
the Initial Purchasers under the Purchase Agreement or in connection with the
initial resale of such Securities by the Initial Purchasers in accordance with
Section 7 of the Purchase Agreement to register the Securities under the
Securities Act of 1933 or to qualify the Indenture under the Trust Indenture Act
of 1939, it being understood that no opinion is expressed as to any subsequent
resale of any Security or Underlying Security.
8
EXHIBIT C
OPINION OF DANN, DORFMAN, XXXXXXX AND XXXXXXXX, P.C.
The opinion of Dann, Dorfman, Xxxxxxx and Xxxxxxxx, P.C., to be delivered
pursuant to Section 5(d) of the Purchase Agreement shall be to the effect that:
A. Such counsel represents the Company in certain matters relating to
intellectual property, including patents, and is familiar with the technology
used by the Company in its business and the manner of its use and has read the
portions of the Final Memorandum entitled "Risk Factors - We depend on patents
and propriety rights, which may offer only limited protection against potential
infringement. If we are unable to protect our patents and proprietary rights,
our business, financial condition and results of operations will be harmed" and
"Business - Patents and Proprietary Technology" (collectively, the "Intellectual
Property Portion").
B. The Intellectual Property Portion contains accurate descriptions of the
Company Patents and patents licensed to the Company and the statements in the
Intellectual Property Portion therein insofar as such statements constitute
summaries of the legal matters, documents or proceedings referred to therein,
fairly present the information called for with respect to such legal matters,
documents and proceedings and fairly summarize the matters referred to therein.
C. Such counsel has reviewed the Company Patent Applications filed in the
United States and outside the United States and in the opinion of such counsel
the Company Patent Applications have been properly prepared and filed on behalf
of the Company, and are being diligently pursued by the Company; the inventions
described in the Company Patent Applications are assigned or licensed to the
Company; to such counsel's knowledge, no other entity or individual has any
right or claim of ownership in any of said inventions, Company Patent
Applications, or any patent to be issued therefrom, and in such counsel's
opinion each of the Company Patent Applications discloses patentable subject
matter; to such counsel's knowledge, there are no legal or governmental
proceedings pending (other than the Company Patent Applications) relating to the
Company, the claimed inventions of the Company Patents, or the Company
Intellectual Property, and to such counsel's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or others.
D. Such counsel has no knowledge of any facts which would preclude the
Company from having valid license rights or clear title to the Company Patents,
and based on representations by the Company that no interests have been conveyed
to third parties which have not been recorded in the PTO, the Company
9
has clear record title to the Company Patents free and clear of any liens or
encumbrances that have been recorded with the PTO.
E. To the best of such counsel's knowledge, the Company has complied with
the PTO duty of candor and disclosure for each of the Company Patents, and such
counsel has no knowledge that the Company lacks or will be unable to obtain
patent rights to inventions claimed in the Company Patents and the Company
Patent Applications necessary for the conduct of its business as now proposed to
be conducted by the Company as described in the Final Memorandum.
F. Such counsel has no knowledge of any facts material to a determination
of patentability regarding the Company Patent Applications not called to the
attention of the PTO, and 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.
G. Such counsel if not aware of any basis for a finding of
unenforceability or invalidity of any Company Patents, and (except as disclosed
in the Final Memorandum) to the best of such counsel's knowledge, the Company
has not received any notice of infringement of or conflict with rights or claims
of others with respect to the Company Intellectual Property;
H. Based on a review of the third party patent rights made known to
counsel and discussion with Company scientific personnel, such counsel has no
knowledge of any patent rights of others which are or would be infringed by
specific products or processes referred to in the Final Memorandum, which
infringement, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would result in any material adverse effect on the
condition, financial or otherwise, or in the earnings, business or operations of
the Company; and
I. Such counsel has no reason to believe that the Intellectual Property
Portion of the Final Memorandum, in the form used by the Initial Purchasers to
confirm sales contained, or as of the Closing Date or the Option Closing Date,
as the case may be, contains any untrue statement of a material fact or omitted,
or as of the Closing Date or the Option Closing Date, as the case may be, omits
to state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
With respect to paragraph I above, counsel may state that its belief is based
upon its participation in the preparation of the Final Memorandum (and any
10
amendments or supplements thereto) and review and discussion of the contents
thereof (including the review of, but not participation in the preparation of,
the documents incorporated by reference therein), but are without independent
check or verification except as specified.
11
EXHIBIT D
OPINION OF XXXXXXX XXXX, ESQ.
The Opinion of Xxxxxxx Xxxx, Esq., to be delivered pursuant to Section 5(e)
of the Purchase Agreement shall be to the effect that:
A. I represent the Company in certain matters relating to the United
States Federal Food Drug, and Cosmetic Act (the "FFDC Act") and related
government regulatory matters, and I am familiar with the drugs under
development and clinical testing by the Company. I have made such investigations
of fact and law as I have deemed necessary in connection with the opinion set
forth below.
B. Based upon and subject to the foregoing, and subject to the additional
qualifications set forth below, I am of the opinion that the portions of the
Final Memorandum entitled "Risk Factors" and "Business-Government Regulation",
insofar as they describe the FFDC Act, related government regulatory matters and
FDA regulations and requirements and the application thereof to the Company's
business and operations (collectively, the "Regulatory Portion"), are accurate
and complete in all material respects and fairly present such matters.
C. In addition to rendering the foregoing opinion, I confirm that I have
participated in conferences with other officers and representatives of the
Company, representatives of the independent accountants for the Company, counsel
for the Initial Purchasers and representatives of the Initial Purchasers in
which the contents of the Final Memorandum and related matters were discussed
and that, while I did not participate in similar conferences in respect of the
documents filed by the Company under the Exchange Act and incorporated by
reference in the Final Memorandum, and except for the matters referred to above,
am not passing upon and do not assume responsibility for the factual accuracy,
completeness or fairness of the statements contained in the Final Memorandum, no
facts have come to my attention that would cause me to have reason to believe
that the Regulatory Portion of the Final Memorandum, in the form used by the
Initial Purchasers to confirm sales contained, or as of the Closing Date or the
Option Closing Date, as the case may be, contains any untrue statement of a
material fact or omitted, or as of the Closing Date or the Option Closing Date,
as the case may be, omits to state a material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
12
With respect to paragraph C above, counsel may state that its belief is based
upon its participation in the preparation of the Final Memorandum (and any
amendments or supplements thereto) and review and discussion of the contents
thereof (including the review of, but not participation in the preparation of,
the documents incorporated by reference therein), but are without independent
check or verification except as specified.
1
EXHIBIT E
[FORM OF LOCK-UP LETTER]
_____________, 2000
Xxxxxx Xxxxxxx & Co. Incorporated
U.S. Bancorp Xxxxx Xxxxxxx Inc.
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs and Mesdames:
The undersigned understands that Xxxxxx Xxxxxxx & Co. Incorporated ("Xxxxxx
Xxxxxxx") proposes to enter into a Purchase Agreement (the "Purchase Agreement")
with ViroPharma Incorporated, a Delaware corporation (the "Company"), providing
for the offering (the "Offering") by the several Initial Purchasers, including
Xxxxxx Xxxxxxx (the "Initial Purchasers"), of approximately $100,000,000
principal amount of the Company's [__%] Convertible Subordinated Debentures Due
2007 (the "Securities"). The Securities will be convertible into shares of
Common Stock, $.002 par value of the Company (the "Common Stock").
To induce the Initial Purchasers that may participate in the Offering to
continue their efforts in connection with the Offering, the undersigned hereby
agrees that, without the prior written consent of Xxxxxx Xxxxxxx on behalf of
the Initial Purchasers, it will not, during the period commencing on the date
hereof and ending 90 days after the date of the final offering memorandum
relating to the Offering (the "Final Memorandum"), (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 transactions
relating to shares of Common Stock or
2
other securities acquired in open market transactions after the completion of
the Offering. In addition, the undersigned agrees that, without the prior
written consent of Xxxxxx Xxxxxxx on behalf of the Initial Purchasers, it will
not, during the period commencing on the date hereof and ending 90 days after
the date of the Final Memorandum, 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.
Notwithstanding the foregoing (i) gifts and transfers by will or intestacy
or (ii) transfers to (A) the undersigned's members, partners, affiliates or
immediate family or (B) a trust, the beneficiaries of which are the undersigned
and/or members of the undersigned's immediate family, shall not be prohibited by
this agreement; provided, that (x) the donee or transferee agrees in writing to
be bound by the foregoing in the same manner as it applies to the undersigned
and (y) if the donor or transferor is a reporting person subject to Section
16(a) of the Securities Exchange Act of 1934 (the "Exchange Act"), any gifts or
transfers made in accordance with this paragraph shall not require such person
to, and such person shall not voluntarily, file a report of such transaction on
Form 4 under the Exchange Act. "Immediate family" shall mean spouse, lineal
descendants, father, mother, brother or sister of the transferor and father,
mother, brother or sister of the transferor's spouse.
Whether or not the Offering actually occurs depends on a number of factors,
including market conditions. Any Offering will only be made pursuant to a
Purchase Agreement, the terms of which are subject to negotiation between the
Company and the Initial Purchasers.
This agreement shall automatically terminate in the event that the Purchase
Agreement is not entered into by March 31, 2000.
Very truly yours,
_________________________
(Name)
_________________________
(Address)
