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EXHIBIT 10.23
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
CREDIT AGREEMENT
THIS CREDIT AGREEMENT dated as of January 11, 1999 (the "Agreement") is
between AVIRON, a Delaware corporation ("Aviron"), and AMERICAN HOME PRODUCTS
CORPORATION, a Delaware corporation ("AHPC").
WITNESSETH
WHEREAS, Aviron [***]* to continue the development of its intranasal
influenza vaccine product and for general operational requirements and has
requested that AHPC provide Aviron with loans (the "Loans") in the aggregate
principal amount of up to [***]; and
WHEREAS, AHPC is willing to so advance such funds necessary to cover
such expenses of Aviron, on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing premises and the
representations, warranties, covenants and agreements herein contained, the
parties hereto, intending to be legally bound, agree as follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, unless otherwise clearly indicated by
the context, the following terms shall have the meanings specified below:
1.01 "AFFILIATE" shall mean as to any Person, any other Person which,
directly or indirectly, either controls, is controlled by or is under common
control with such Person. "Control" as used in this Section 1.01 shall mean
having the power to direct, or cause the direction of, the management and
policies of an entity, whether through ownership of voting securities, by
contract or otherwise. Notwithstanding the foregoing, for purposes of this
Agreement, the term "Affiliate" shall not include subsidiaries in which a Person
or its Affiliates own a majority of the ordinary voting power to elect a
majority of the board of directors but is restricted from electing such majority
by contract or otherwise, until such time as such restrictions are no longer in
effect.
1.02 "AVAILABILITY TERMINATION DATE" shall mean the earlier of (i) the
termination of both the U.S. Co-Promotion Agreement and the International
License Agreement in accordance with their respective terms and (ii) the [***]
Aviron of the [***] (as defined in the U.S. Co-Promotion Agreement).
1.03 "BUSINESS DAY" shall mean any day, other than a Saturday, Sunday
or legal holiday in the State of New York, on which banks are open for
substantially all their banking business in New York City.
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1.04 "CAPITAL STOCK" means, with respect to any Person, any and all
shares, interests, participations, rights in, or other equivalents (however
designated and whether voting or non-voting) of, such Person's capital stock,
and any and all rights, warrants or options exchangeable for or convertible into
such capital stock.
1.05 "COLLATERAL" shall mean all collateral and security as described
in the Security Agreement.
1.06 "COMMISSION" shall have the meaning set forth in Section 3.06.
1.07 "COMMON STOCK" means the common stock, $.001 par value, of Aviron.
1.08 "CONSOLIDATED NET WORTH" means, with respect to any Person at any
date of determination, the consolidated stockholders' equity represented by the
shares of such Person's Capital Stock outstanding at such date, as determined on
a consolidated basis in accordance with United States generally accepted
accounting principles.
1.09 "U.S. CO-PROMOTION AGREEMENT" shall mean the United States License
and Co-Promotion Agreement of even date herewith between Aviron and AHPC with
respect to Aviron's intranasal influenza vaccine product.
1.10 "CREDIT EVENT" shall mean each borrowing hereunder.
1.11 "DOLLARS" or the symbol "$" shall mean dollars in lawful currency
of the United States of America.
1.12 "DRAWDOWN DATE" shall mean the date Aviron borrows or draws down a
Loan.
1.13 "EVENT OF DEFAULT" shall have the meaning assigned such term in
Article IX hereof.
1.14 "EXCHANGE ACT" shall have the meaning set forth in Section 3.02.
1.15 "FDA" shall mean the federal Food and Drug Administration of the
U.S. Department of Health and Human Services.
1.16 "FINANCIAL OFFICER" shall mean, with respect to any Person, its
Chairman of the Board, President, or Chief Financial Officer.
1.17 "GUARANTEE" shall mean any obligation, contingent or otherwise, of
any Person guaranteeing or having the economic effect of guaranteeing any
Indebtedness or obligation of any other Person in any manner, whether directly
or indirectly.
1.18 "INDEBTEDNESS" shall mean, with respect to any Person, (a) all
obligations of such Person for borrowed money, or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes, notes convertible into shares of Common Stock or other
similar instruments, (c) all obligations of such Person upon which interest
charges are customarily paid, (d) all obligations of such Person for the
deferred purchase
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price of property of services, except current accounts payable arising in the
ordinary course of business and not overdue, (e) all obligations of such Person
under conditional sale or other title retention agreements relating to property
purchased by such Person, (f) all Indebtedness of any third party secured by
property or assets of such Person, and (g) all Guarantees of such Person.
1.19 "INTERNATIONAL LICENSE AGREEMENT" shall mean the International
FluMist(TM) License Agreement of even date herewith between Aviron and AHPC with
respect to Aviron's intranasal influenza vaccine product.
1.20 "LIEN" shall mean, with respect to any asset, (i) any mortgage,
lien, pledge, encumbrance, charge or security interest in or on such asset, (ii)
the interest of a vendor or a lessor under any conditional sale agreement,
capital lease or other title retention agreement relating to such asset, (iii)
in the case of securities, any purchase option, call or similar right of a third
party with respect to such securities or (iv) any other right of or arrangement
with any creditor to have his claim satisfied out of such assets, or the
proceeds therefrom, prior to the general creditors of the owner thereof.
1.21 "LOANS" shall have the meaning set forth in the first WHEREAS
clause of this Agreement.
1.22 "MATERIAL ADVERSE EFFECT" shall have the meaning set forth in
Section 3.01 hereof.
1.23 "NOTE OR NOTES" shall have the meaning assigned to such term in
Section 2.03(a) hereof.
1.24 "PERMITTED INDEBTEDNESS" means (i) Indebtedness of Aviron existing
on the date hereof; (ii) all Indebtedness of Aviron or its Subsidiaries incurred
from time to time in connection with the purchase of goods, materials or
services in the ordinary course of business and owed to trade creditors; (iii)
Indebtedness of Aviron under the Loans; (iv) other Indebtedness of Aviron or its
Subsidiaries not to exceed [***]* in any fiscal year during the term hereof or
[***] in the aggregate outstanding at any time; (v) Indebtedness of Aviron or
its Subsidiaries owing to financial institutions not to exceed [***] in the
aggregate; (vi) Indebtedness that by its terms is expressly subordinated in
right of payment to the Loans; (vii) Indebtedness of Aviron or its Subsidiaries
secured by a Lien described in subsection (iii) of the definition of "Permitted
Liens" below; (viii) Guarantees and other credit support of the obligations of
vendors and suppliers of Aviron or its Subsidiaries in respect of transactions
entered into in the ordinary course of business; (ix) Indebtedness of Aviron or
its Subsidiaries in respect of capital lease obligations; (x) prepaid royalties
owing to, and deferred revenue of, Aviron or its Subsidiaries in the ordinary
course of business; (xi) Indebtedness to the extent incurred specifically for,
and limited to the financing of, Aviron's manufacturing facility and leasehold
improvements thereto; and (xii) any deferrals, renewals, extensions,
replacements, or refinancings of, or amendments, modifications or supplements
to, Indebtedness described above.
1.25 "PERMITTED LIENS" means (i) any Liens existing on the date hereof;
(ii) Liens to secure Permitted Indebtedness owing to financial institutions (ii)
Liens for taxes, fees,
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assessments or other governmental charges or levies, either not delinquent or
being contested in good faith by appropriate proceedings; (iii) Liens (A) upon
or in any property acquired or held by Aviron to secure the purchase price of
such property or Indebtedness incurred solely for the purpose of financing the
acquisition of such property, or (B) existing on such property at the time of
its acquisition, provided that the Lien is confined solely to the property so
acquired and improvements thereon, and the proceeds of such property; (iv) Liens
on property leased by Aviron pursuant to operating or capital leases in the
ordinary course of business (including proceeds thereof and accessions thereto)
incurred solely for the purpose of financing the lease of such property; (v)
leases or subleases and licenses and sublicenses granted to others in the
ordinary course of Aviron's business not interfering in any material respect
with the business of Aviron and its Subsidiaries taken as a whole, and any
interest or title of a lessor, licensor or under any lease or license; (vi)
Liens on assets (including the proceeds thereof and accessions thereto) that
existed at the time such assets were acquired by Aviron (including any Liens on
assets of any Person that existed at the time it became or becomes a
Subsidiary); provided such Liens are not granted in contemplation of or in
connection with the acquisition of such asset by Aviron; (vii) Liens arising
from judgments, decrees or attachments in circumstances not constituting an
Event of Default under this Agreement; (viii) easements, reservations,
rights-of-way, restrictions, minor defects or irregularities in title and other
similar charges or encumbrances affecting real property not constituting a
Material Adverse Effect; (ix) Liens in favor of customs and revenue authorities
arising as a matter of law to secure payments of customs duties in connection
with the importation of goods; (x) Liens which constitute rights of set-off of a
customary nature or bankers' or securities intermediaries' Liens with respect to
amounts on deposit or investment property, whether arising by operation of law
or by contract, in connection with arrangements entered into with banks and
securities intermediaries in the ordinary course of business; and (xi) Liens on
Aviron's manufacturing facility, leasehold improvements thereto and proceeds
thereof.
1.26 "PERSON" shall mean any natural person, corporation, business
trust, association, limited liability company, company, joint venture,
partnership or government or any agency or political subdivision thereof.
1.27 "PREFERRED STOCK" shall have the meaning set forth in Section
3.03.
1.28 "PRIME RATE" shall mean the rate of interest per annum publicly
announced from time to time by The Chase Manhattan Bank at its principal office
in New York City as its prime rate (each change in the Prime Rate to be
effective on the date such change in the prime rate is publicly announced).
1.29 "RESPONSIBLE OFFICER" shall mean, with respect to any Person, the
Chairman, President, or any Vice President of such Person.
1.30 "SEC DOCUMENTS" shall have the meaning set forth in Section 3.05.
1.31 "SECURITIES ACT" shall have the meaning set forth in Section 4.01.
1.32 "SECURITY AGREEMENT" shall mean a Security Agreement dated as of
the date of the initial draw down, between Aviron and AHPC, in conformity with
the requirements set forth
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in the U.S. Co-Promotion Agreement and the International License Agreement and
otherwise in form and substance satisfactory to AHPC.
1.33 "SUBSIDIARY" shall mean, with respect to any Person, any
corporation, partnership or joint ventures of which securities or other
ownership interests representing more than 50% of the ordinary voting power are,
at the time as of which any determination is being made, owned or controlled by
such Person or one or more Subsidiaries of such Person or by such Person and one
or more Subsidiaries of such Person.
1.34 "TRANSACTIONS" shall have the meaning set forth in Section 3.02.
ARTICLE II
THE LOANS
2.01 THE LOANS.
(a) During the term hereof and subject to the terms and
conditions and relying upon the representations and warranties herein set forth,
AHPC agrees to make Loans to Aviron at any time and from time to time commencing
with the date of regulatory approval by the FDA to market Aviron's intranasal
influenza vaccine product for use in the Field through the Availability
Termination Date, in an aggregate amount not to exceed [***]* subject to
Sections 2.01 (b) and (c), below. Each Loan shall be in an amount not less than
[***] per draw down; provided, however, that if the aggregate balance remaining
for available Loans is less than [***] Aviron shall have the right to drawdown
the balance of such remaining amount.
(b) To the extent AHPC has purchased shares of Common Stock
(or instruments convertible into shares of Common Stock) pursuant to Section
11.3 of the International License Agreement, the aggregate amount borrowable
hereunder shall automatically be [***] of shares of Common Stock (or instruments
convertible into shares of Common Stock pursuant to Section 11.3 of the
International License Agreement) so purchased.
(c) The initial Loans shall be made subject to satisfaction of
the conditions set forth in Sections 6.01 and 6.02 against delivery of the Note.
2.02 NOTICE OF BORROWINGS. Aviron may draw down Loans on any Business
Day, provided, however, that Aviron shall give AHPC written notice of each such
borrowing in the form of Exhibit B not later than 12:00 noon, New York City
time, three (3) Business Days before a proposed borrowing.
2.03 NOTES; REPAYMENT OF LOANS.
(a) Each Loan shall be evidenced by a separate note (each, a
"Note" and collectively with other Notes, the "Notes"), duly executed on behalf
of Aviron, dated the Drawdown Date for each Loan, in substantially the form of
Exhibit C hereto.
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(b) The outstanding principal balance of each Loan shall
mature and be due and payable on the [***] anniversary of the making of such
Loan, such principal amount being subject to reduction pursuant to Section 2.07
of this Agreement. Each Loan shall bear interest from its date on the
outstanding principal balance thereof, as provided in Section 2.04.
(c) AHPC shall, and is hereby authorized by Aviron, to endorse
on the schedule attached to each Note an appropriate notation evidencing the
date and amount of each payment and prepayment with respect thereto; provided,
however, that the failure of AHPC to make such a notation on any Note shall not
affect any obligations of Aviron hereunder or thereunder.
2.04 INTEREST ON LOANS. Subject to the provisions of Section 2.06, each
Loan shall bear interest at a floating rate per annum equal to [***]. Interest
shall be computed based on the number of days elapsed in a year of 365 days for
the actual days elapsed. Interest shall accrue on the unpaid principal amount of
each Loan from the date on which the Loan is made to or on account of Aviron
under this Agreement and shall be payable by Aviron on the last Business Day of
each calendar quarter. Aviron shall make such payments of interest until the
principal amount for each such Loan shall be paid in full.
2.05 [***] . Except as otherwise provided herein, all payments to be
made by Aviron on account of principal and interest shall be made [***] and
shall be made to AHPC in Dollars in immediately available funds at its principal
office (or as otherwise directed by AHPC) not later than 12:00 noon New York
time on the date on which such payment shall become due (each such payment made
after such time on such due date to be deemed to have been made on the next
succeeding Business Day).
2.06 INTEREST ON OVERDUE AMOUNTS. If Aviron shall default in the
payment of the principal of or interest on any Loan or any other amount becoming
due hereunder (by acceleration or otherwise), Aviron shall on demand from time
to time pay interest, to the extent permitted by law, on such defaulted amount
from the date of such non-payment up to the date of actual payment (after as
well as before judgment) at a rate per annum equal to the rate then in effect
for such Loan [***].
2.07 PREPAYMENT OF LOANS.
(a) Aviron may upon two (2) Business Days' irrevocable notice
to AHPC (i) prepay any Loan, as applicable, at any time in whole or from time to
time in part; provided, however, that each such optional partial prepayment of
any such term Loan shall be in an integral multiple of [***] and (ii) terminate
the commitments hereunder; provided, however, that any such termination shall be
effective only upon the repayment by Aviron of all principal, accrued interest
and other amounts then owing hereunder and under the Notes.
(b) AHPC may, at its option, [***] pursuant to the [***]
hereunder and [***].
(c) Aviron shall make a mandatory prepayment of all principal,
accrued interest and other amounts owing hereunder and under the Notes upon the
occurrence of any
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event or series of events pursuant to which any Person, or two or more Persons
acting in concert, acquire beneficial ownership (within the meaning of Rule
13d-3 of the Commission), directly or indirectly, of securities of Aviron
representing greater than fifty percent of the combined voting power of all
securities of Aviron entitled to vote in the election of directors in a
transaction (i) in which the acquiring Person or Persons includes [***] or (ii)
in which the [***]. Any mandatory prepayment pursuant to this Section 2.07(c)
shall be paid in immediately available funds to an account as directed in
writing by AHPC.
(d) Aviron may [***] amounts that have been prepaid.
2.08 WARRANTS. Upon each Drawdown Date, Aviron will grant AHPC warrants
to purchase Aviron common stock, in substantially the form of Exhibit A hereto,
according to the terms set forth in Schedule 2.08. In addition, Aviron agrees
that as soon as reasonably practicable following each issuance of warrants
hereunder it will file a registration statement for the non-underwritten resale
of the Aviron common stock issuable upon exercise of such warrants. Aviron
agrees that it will use commercially reasonable efforts to cause such
registration to become effective as soon as practicable and will keep such
registration effective until the earlier of (i) the sale by AHPC of all shares
issued upon exercise of the warrant, or (ii) [***] years following the issuance
of the warrant.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF AVIRON
Aviron represents and warrants to AHPC that:
3.01 ORGANIZATION, CORPORATE. Aviron is a corporation duly organized,
validly existing and in good standing under the laws of the state of Delaware,
has the requisite power and authority to own its property and assets and to
carry on its business as now conducted and is qualified to do business in every
jurisdiction where such qualification is required, except where the failure so
to qualify would not have a material adverse effect on the business, condition
(financial or otherwise), assets, operations performance, properties or
prospects of Aviron (each, a "Material Adverse Effect"). Aviron has the
corporate power to borrow hereunder and to execute and deliver the Notes and has
the corporate power to execute, deliver and perform its obligations under this
Agreement and the Security Agreement.
3.02 AUTHORIZATION. The execution, delivery and performance by Aviron
of this Agreement, the Security Agreement, the borrowings hereunder, the
execution and delivery by Aviron of the Notes and the grant of security
interests in the Collateral (collectively, the "Transactions") (a) have been
duly authorized by all requisite corporate and, if required, stockholder action
and (b) will not (i) violate (A) any provision of law (including, without
limitation, the Securities Exchange Act of 1934, as amended (the "Exchange
Act")) statute, rule or regulation or the certificate of incorporation or the
by-laws of Aviron, (B) any order of any court, or any rule, regulation or order
of any other agency of government binding upon or applicable to Aviron, or (C)
any provisions of any indenture, agreement or other instrument to
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which Aviron or any of its properties or assets are or may be bound, (ii) result
in the creation or imposition of any Lien, or any other type of preferential
arrangement upon any property or assets of Aviron or (iii) violate or result in
a breach or result in the acceleration or termination of, or the creation in any
third party of the right to accelerate, terminate, modify or cancel, any
material indenture, contract, lease, sublease, loan agreement, note or other
material obligation or liability to which Aviron is a party or is bound.
3.03 CAPITALIZATION. As of the date of this Agreement, the authorized
capital stock of Aviron is 35,000,000 shares, consisting of 5,000,000 shares of
Preferred Stock, $.001 par value (the "Preferred Stock"), and 30,000,000 shares
of Common Stock. As of the date hereof no shares of Preferred Stock are issued
and outstanding, and as of November 4, 1998, 15,718,991 shares of Common Stock
were issued and outstanding. Except as disclosed in the SEC Documents and except
for the transactions contemplated hereby, since November 15, 1998, Aviron has
not issued any shares of Preferred Stock or Common Stock, granted any option
(except for stock options granted under the Aviron's employee, consultant and
director stock option plans), warrants, rights (including conversion or
preemptive rights, except for stock purchased under Aviron's stock purchase
plans), or similar rights to any person or entity to purchase or acquire any
rights with respect to any shares of capital stock of Aviron. The outstanding
shares of Common Stock have been duly authorized and validly issued and are
fully paid and nonassessable; and none of the outstanding shares of Common Stock
were issued in violation of the preemptive rights, if any, of any stockholder of
Aviron.
3.04 INDEBTEDNESS. Schedule 3.04 sets forth a complete and correct list
of all outstanding Indebtedness of Aviron as of the date hereof. Except as
described in the SEC Documents, Aviron is not in default and no waiver of
default is currently in effect, in the payment of any principal or interest on
any indebtedness of Aviron and no event or condition exists with respect to any
Indebtedness of Aviron that would permit (or that with notice or the lapse of
time, or both, would permit) one or more Persons to cause such Indebtedness to
become due and payable before its stated maturity or before its regularly
scheduled dates of payment.
3.05 FULL DISCLOSURE. Aviron has furnished to AHPC Aviron's annual
report on Form 10-K for the fiscal year ended December 31, 1997, Aviron's
Current Report on Form 8-K dated March 17, 1998, Aviron's quarterly reports on
Form 10-Q for the quarterly periods ended March 31, 1998, June 30, 1998 and
September 30, 1998 and all documents filed by Aviron pursuant to any of Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act (collectively, the "SEC
Documents") since September 30, 1998. Aviron warrants that, as of their
respective dates (or if amended, as of the date of such amendment), the SEC
Documents complied as to form with the requirements of the Exchange Act, and the
information contained in such documents did not contain any untrue statement of
a material fact, and did not omit to state any material fact necessary to make
any statement, in light of the circumstances under which such statement was
made, not misleading.
3.06 SEC FILINGS. Aviron has timely filed with the Securities and
Exchange Commission (the "Commission") all reports and other documents required
to be so filed.
3.07 GOVERNMENTAL APPROVALS. No registration, notices or filing (other
than the filings necessary to perfect the liens and security interests created
by the Security Agreement)
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with or consent or approval of, or other action by, any federal, state or other
governmental agency, authority or regulatory body is or will be required in
connection with the Transactions.
3.08 BINDING EFFECT. This Agreement and the Security Agreement
constitutes, and the Notes, when duly executed and delivered by Aviron, will
constitute valid, legal and binding obligation of Aviron, enforceable in
accordance with its terms, subject, as to the enforcement of remedies, to
applicable bankruptcy, reorganization, insolvency and similar laws affecting the
enforcement of creditors' rights generally and by general principles of equity.
3.09 MATERIAL ADVERSE CHANGE. Since September 30, 1998, except as
provided in Schedule 3.09 hereto, there has been no change or effect which has
had or would be reasonably likely to have a Material Adverse Effect.
3.10 LITIGATION; COMPLIANCE WITH LAWS; ETC.
Except as described in the SEC Documents:
(a) There are no actions, suits or proceedings at law or in
equity or by or before any governmental instrumentality or other agency or
regulatory authority now pending or, to the knowledge of any Responsible Officer
of Aviron, threatened against or affecting Aviron or the business, assets or
rights of Aviron (i) which involve any of the Transactions or (ii) which if
adversely determined would, individually or in the aggregate, materially impair
the ability of Aviron to conduct its business or materially and adversely affect
the business, assets, operations or financial condition of Aviron or impair the
validity or enforceability of or the ability of Aviron to perform its
obligations under this Agreement or the Security Agreement.
(b) There are no violations of any law, or any default with
respect to any judgment, writ, injunction, decree, rule or regulation of any
court or governmental agency or instrumentality, where such violation or default
would have a Material Adverse Effect.
3.11 TAXES. Aviron has filed or caused to be filed all federal, state,
local and foreign tax returns which are required to be filed by it, on or prior
to the date hereof, other than tax returns in respect of taxes which in the
aggregate are not material and would not, if unpaid, result in the imposition of
any Lien on any property or assets of Aviron. Aviron has paid or caused to be
paid all taxes shown to be due and payable on such filed returns or on any
assessments received by it, other than (i) any taxes or assessments the validity
of which it is contesting in good faith by appropriate proceedings, and with
respect to which it shall, to the extent required by generally accepted
accounting principles applied on a consistent basis, have set aside on its books
adequate reserves and (ii) taxes that in the aggregate are not material and
which would not, if unpaid, result in the imposition of any Lien on any property
or assets.
3.12 INVESTMENT COMPANY ACT. Aviron is not an "investment company" as
defined in, or is otherwise subject to regulation under, the Investment Company
Act of 1940, as amended.
3.13 USE OF PROCEEDS. The proceeds of the Loans made hereunder shall be
used to finance the development, manufacture and commercialization of Aviron's
intranasal influenza
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vaccine product and for general operational requirements. Such proceeds shall in
no event be used for any other business purpose or in any way in violation of
Regulation U of the Board of Governors of the Federal Reserve System.
3.14 SECURITY INTEREST. The Security Agreement , when executed and
delivered, will create and grant to AHPC a legal, valid and enforceable security
interest in the Collateral which shall be perfected upon the filing of Uniform
Commercial Code financing statements in appropriate offices. Such Collateral is
not subject to any other lien or security interest whatsoever except Permitted
Liens.
3.15 TITLE TO PROPERTIES; POSSESSION UNDER LEASES; TRADEMARKS.
(a) Aviron has good and marketable title to, or valid
leasehold interest in, all of its properties and assets except for Permitted
Liens and minor defects in title that do not interfere with its ability to
conduct its business as now conducted.
(b) Aviron has complied with all material obligations under
all leases to which it is a party and under which it is in occupancy. Aviron has
a valid lease-hold interest in all such leases and all such leases are in full
force and effect. Aviron enjoys peaceful and undisturbed possession under all
such leases.
(c) Aviron owns, possesses or controls all trademarks,
trademark rights, trade names, trade name rights, copyrights, patents, patent
rights and licenses which are necessary for the conduct of the business of
Aviron. To the best knowledge of Aviron, Aviron is not infringing upon or
otherwise acting adversely to any trademarks, trademark rights, trade names,
trade name rights, copyrights, patent rights or licenses owned by any other
Person or Persons. There is no claim or action by any such other Person pending,
or to the knowledge of Aviron threatened against Aviron with respect to any of
the rights or property referred to in this Section 3.15(c).
3.16 ABSENCE OF CERTAIN DEVELOPMENTS. Except as disclosed in or
contemplated by the SEC Documents, since September 30, 1998, Aviron has not (a)
incurred or become subject to any material liabilities (absolute or contingent)
except current liabilities incurred, and liabilities under contracts entered
into, in the ordinary course of business, consistent with past practices; (b)
sold, assigned or transferred any of its assets or canceled any debts or
obligations except in the ordinary course of business, consistent with past
practices; (c) suffered any extraordinary losses, or waived any rights of
substantial value; (d) sold, assigned or transferred to a third party that is
not an affiliate (within the meaning set forth in Rule 405 under the Act) any
material trademark, trademark rights, trade names, trade name rights,
copyrights, patents, patent rights, licenses or other intangible assets for
compensation less than the fair value of such assets; (e) declared, paid or
otherwise made any dividend or distribution of any kind on its capital stock; or
(f) entered into any material transaction other than in the ordinary course of
business, consistent with past practices.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF AHPC
4.01 INVESTMENT INTENT. AHPC is acquiring the Notes for investment for
its own account only and not with a view to, or for resale in connection with,
any "distribution" thereof within the meaning of the Securities Act. AHPC
understands that the Notes have not been registered under the Securities Act or
registered or qualified under any state securities law in reliance on specific
exemptions therefrom, which exemptions may depend upon, among other things, the
bona fide nature of AHPC's investment intent as expressed herein.
4.02 NO LEGAL, TAX OR INVESTMENT ADVICE. AHPC understands that nothing
in this Agreement or any other materials presented to AHPC in connection with
the issuance of the Notes constitutes legal, tax or investment advice.
4.03 CORPORATE POWER; AUTHORITY. AHPC has all requisite legal and
corporate power and has taken all requisite corporate action to execute, deliver
and perform its obligations under this Agreement. This Agreement has been duly
authorized, executed and delivered on behalf of AHPC and constitutes the valid,
legal and binding agreement of AHPC, enforceable in accordance with its terms,
subject, as to the enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency and similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity.
ARTICLE V
RESTRICTIONS ON TRANSFER
5.01 RESTRICTIONS ON TRANSFERABILITY. The Notes shall not be
transferable in the absence of a registration under the Securities Act or an
exemption therefrom.
ARTICLE VI
CONDITIONS OF CREDIT EVENTS
The obligation of AHPC to make Loans hereunder shall be subject to the
following conditions precedent:
6.01 ALL CREDIT EVENTS. On each date on which a Credit Event is to
occur:
(a) AHPC shall have received a notice of borrowing as required
by Section 2.02.
(b) AHPC shall have received a Note dated the Drawdown Date,
duly executed by Aviron in the amount of such borrowing.
(c) The representations and warranties set forth in Article
III hereof and in any documents delivered in connection herewith, including
without limitation, the Security Agreement, shall be true and correct in all
material respects with the same effect as though made
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on and as of such date (except insofar as such representations and warranties
relate expressly to an earlier date).
(d) At the time of and immediately after such borrowing no
Event of Default or event which with notice or lapse of time or both would
constitute an Event of Default shall have occurred and be continuing.
6.02 INITIAL DRAWDOWN DATE. The obligation of AHPC in respect of the
initial Credit Event hereunder are subject to the satisfaction of the following
conditions precedent:
(a) AHPC shall have received the favorable written opinion of
counsel for Aviron, dated the Drawdown Date in respect of the matters set forth
in Sections 3.01-3.09, 3.10(a) and 3.12, and satisfactory in form and substance
to AHPC.
(b) AHPC shall have received (i) a copy of the certificate of
incorporation of Aviron, certified as of a recent date by the Secretary of State
of Delaware, and a certificate as to the good standing of Aviron from such
Secretary of State, in each case dated as of a recent date; (ii) a certificate
of the Secretary of Aviron, dated the Drawdown Date and certifying (A) that
attached thereto is a true and complete copy of its By-laws as in effect on the
date of such certificate and as in effect at all times since the date of the
resolutions described in item (B) below, (B) that attached thereto is a true and
complete copy of resolutions adopted by its Board of Directors authorizing the
execution, delivery and performance of this Agreement, the Security Agreement,
the Notes and the borrowings hereunder, and that such resolutions have not been
modified, rescinded or amended and are in full force and effect, (C) that its
certificate of incorporation has not been amended since the date of the last
amendment thereto shown on the certificate of good standing furnished pursuant
to (i) above, and (D) as to the incumbency and specimen signature of each of
Aviron's Responsible Officers executing this Agreement, the Notes, or any other
document delivered in connection herewith or therewith to which it is a party;
(iii) a certificate of another of its officers as to incumbency and signature of
its Secretary; and (iv) such other documents as AHPC may reasonably request.
(c) AHPC shall have received a certificate, dated the Drawdown
Date and signed by a Financial Officer of Aviron, confirming compliance with the
conditions precedent set forth in this Section 6.02.
(d) AHPC shall have received the Security Agreement duly
executed by Aviron.
(e) AHPC shall have received certified copies of requests for
copies of information on Form UCC-11 or certificates satisfactory to AHPC of a
UCC Reporter Service, listing all effective financing statements which name as
debtor Aviron and which are filed in the appropriate offices in the state in
which are located the chief executive offices of Aviron, together with copies of
such financing statements.
(f) Each document (including, without limitation, each Uniform
Commercial Code financing statement), required by law or reasonably requested by
AHPC to be filed, registered or recorded in order to create in favor of AHPC a
perfected security interest in the Collateral shall be properly filed,
registered or recorded in each jurisdiction in which the filing,
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registration or recordation thereof is so required or requested. AHPC shall have
received an acknowledgment copy, or other evidence satisfactory to it, of each
such filing, registration or recordation.
(g) AHPC shall have received the results of a search of the
Uniform Commercial Code filings made with respect to Aviron in the jurisdictions
in which Uniform Commercial Code filings have been made against Aviron pursuant
to paragraph (e) above.
(h) AHPC shall have received such other documents as it shall
reasonably deem necessary and all other legal matters in connection with the
Transactions shall be satisfactory to AHPC and its counsel.
(i) AHPC shall have entered into a subordination agreement as
contemplated by Section 13.2 of the U.S. Co-Promotion Agreement.
ARTICLE VII
AFFIRMATIVE COVENANTS
Aviron covenants and agrees that, so long as AHPC shall have any
obligation to make any Loans under this Agreement, or the principal of or
interest on any Note shall be unpaid, unless AHPC shall otherwise consent in
writing, it will:
7.01 COMPLIANCE WITH LAWS. Comply in all material respects with all
applicable laws, rules, regulations and orders applicable to the operation of
its business whether now in effect or hereafter enacted.
7.02 CORPORATE EXISTENCE. Do or cause to be done all things necessary
to preserve, renew and keep in full force and effect its legal existence, rights
(charter and statutory) and franchises.
7.03 BUSINESS AND PROPERTIES. At all times do or cause to be done all
things necessary to preserve, renew and keep in full force and effect the
rights, licenses, permits, franchises, patents, copyrights, trademarks and trade
names material to its business to the extent reasonably necessary to further the
best economic interests of Aviron; take all action which may be required to
obtain, preserve, renew and extend all material licenses, permits, franchises
and other authorizations to the extent reasonably necessary to further the best
economic interests of Aviron; and at all times maintain, preserve and protect
all property material to its business and keep such property in good repair,
working order and condition (ordinary wear and tear excepted) and from time to
time make, or cause to be made, all necessary and proper repairs, renewals,
additions, improvements and replacements thereto necessary in order that the
business carried on in connection therewith may be properly conducted at all
times.
7.04 INSURANCE. (a) Keep its insurable properties adequately insured at
all times by financially sound and reputable insurers, (b) maintain such other
insurance, to such extent and against such risks, including business
interruption, fire and other risks insured against by extended coverage, as is
customary with companies similarly situated and in the same or similar
businesses, (c) maintain in full force and effect public liability insurance
against claims for
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personal injury or death or property damage occurring upon, in about or in
connection with the use of any properties owned, occupied or controlled by
Aviron, in such amount as Aviron shall reasonably deem necessary, (d) maintain
such other insurance as may be required by law or as may be reasonably requested
by AHPC for purposes of assuring compliance with this Section 7.04 and (e)
furnish to AHPC, upon written request, full information as to the insurance
carried.
7.05 TAXES. Pay and discharge promptly when due all taxes, assessments
and governmental charges or levies imposed upon it or upon its income or profits
or in respect of its property before the same shall become delinquent or in
default, as well as all lawful claims for labor, materials and supplies or
otherwise, which, if unpaid, might give rise to liens or charges upon such
properties or any part thereof unless, in each case, the validity or amount
thereof is being contested in good faith by appropriate proceedings, adequate
reserves have been established with respect thereto and no Liens have attached
to its properties or any portion thereof.
7.06 FINANCIAL STATEMENTS, REPORTS. ETC. Furnish to AHPC:
(a) Promptly as they are available and in any event: (i)
within five (5) Business days of the filing of Aviron's Form 10-K with the
Commission after the end of each fiscal year of Aviron, the financial statements
of Aviron filed with such Form 10-K, together with consolidating financial
statements with respect to Aviron and (ii) within five (5) Business Days of the
filing of Aviron's Form 10-Q with the Commission after the end of each of the
first three fiscal quarters of Aviron, the financial statements of Aviron filed
with such Form 10-Q, together with consolidating financial statements with
respect to Aviron.
(b) Promptly after the same become publicly available, copies
of any registration statements, annual, periodic, current and other reports, and
such proxy statements and other information, if any, as shall be filed by Aviron
with the Commission pursuant to the requirements of the Securities Act or the
Exchange Act;
(c) At the same time as each delivery of financial statements
pursuant to Section 7.06 (a), a certificate of Aviron's Financial Officer or
other senior officer stating that he or she has reviewed the provisions of this
Agreement and that to the best of his or her knowledge, Aviron is not in default
in the observance or performance of any of the provisions hereof, or if Aviron
shall be so in default, specifying all such defaults and events of which he or
she may have knowledge and setting forth the calculation of compliance or
noncompliance.
(d) Such other information as AHPC may reasonably request from
time to time.
7.07 LITIGATION AND OTHER NOTICES. Give AHPC prompt written notice of
the following:
(a) the issuance by any court or governmental agency or
authority of any injunction, order, decision or other restraint prohibiting, or
having the effect of prohibiting, the making of any of the Loans, or
invalidating, or having the effect of invalidating, any provision of this
Agreement or the Security Agreement or the initiation of any material litigation
or material similar proceeding seeking any such injunction, order, decision or
other restraint;
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(b) the filing or commencement of any material action, suit,
proceeding or investigation against Aviron whether at law or in equity or by or
before any court or any federal, state, municipal or other governmental agency
or authority;
(c) the occurrence of any Event of Default or event or
condition which, with the giving of notice or lapse of time or both, would
constitute an Event of Default, specifying the nature and extent thereof and the
action (if any) which is proposed to be taken with respect thereto; and
(d) any development in the business or affairs of Aviron which
has resulted in or which in the good faith judgment of Aviron is reasonably
likely to result in a Material Adverse Effect.
7.08 MAINTAINING RECORDS, ACCESS TO PROPERTIES AND INSPECTIONS.
Maintain books and records in accordance with accepted business practices and,
upon reasonable notice (which may be telephonic), at all reasonable times and as
often as AHPC may reasonably request, permit any authorized representative
designated by AHPC to visit and inspect the properties and financial books and
records of Aviron and to make extracts from such books and records, and permit
any authorized representative designated by AHPC to discuss the operations,
affairs, finances and condition of Aviron, with the chief financial officer and
such other officers as such Person shall deem appropriate such Person's
independent public accountants, as applicable.
7.09 USE OF PROCEEDS. Use the proceeds of the Loans only for the
purposes set forth in Section 3.13.
7.10 PAYMENT OF OBLIGATIONS. Pay, discharge or otherwise satisfy at or
before maturity or before they become delinquent, as the case may be, all its
material obligations of whatever nature and any additional costs that are
imposed as a result of any failure to so pay, discharge or otherwise satisfy
such obligations, except when the amount or validity of such obligations and
costs is currently being contested in good faith by appropriate proceedings and
reserves in conformity with generally accepted accounting principles with
respect thereto have been provided on the books of Aviron.
7.11 FURTHER ASSURANCES. Execute any and all further documents and take
all further actions which may be required under applicable law, or which AHPC
may reasonably request, to grant, preserve, protect and perfect the security
interest in the Collateral created by the Security Agreement.
ARTICLE VIII
NEGATIVE COVENANTS
Aviron covenants and agrees that, so long as AHPC shall have any
obligation to make any Loans under this Agreement, or the principal of or
interest on any Note shall be unpaid, Aviron will not, and will not permit any
of its Subsidiaries, without the written consent of AHPC, to:
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8.01 DIVIDENDS AND DISTRIBUTIONS. Except as set forth in Schedule 8.01,
declare or pay, directly and indirectly, (i) any dividends or make any other
distributions (other than dividends or other distributions payable solely in
stock of Aviron or its Subsidiaries or dividends or other distributions payable
from Aviron's Subsidiaries to Aviron), whether in cash, property, securities or
a combination thereof, with respect to (whether by reduction of capital or
otherwise) any shares of its capital stock, or directly or indirectly redeem,
purchase, retire or otherwise acquire for value any shares of any class of its
capital stock or set aside any amount for any such purpose or (ii) any amounts
in respect of Indebtedness at any time owing to any Affiliate of Aviron.
8.02 INDEBTEDNESS. Incur, create, assume or permit to exist any Lien or
any Indebtedness other than Permitted Liens and Permitted Indebtedness, or grant
a security interest in any of Aviron's or its Subsidiaries' intellectual
property; provided, however, that, subject to the terms of the U.S. Co-Promotion
Agreement and the International License Agreement, nothing herein shall limit
Aviron's or its Subsidiaries' ability to license or assign (but not grant a
security interest in) its intellectual property if such licensing or assignment
is in the best interests of Aviron and its Subsidiaries in the good faith
judgment of Aviron.
8.03 CONSOLIDATIONS, MERGERS AND SALES OF ASSETS.
(a) Sell, lease, convey, transfer or assign to any Person or
otherwise dispose of (whether in one transaction or a series of transactions),
other than for fair value, assets (whether now owned or hereafter acquired)
having a fair market value exceeding [***], or, permit another Person to merge
into it or acquire in excess of 50% of its capital stock, or acquire all or
substantially all the capital stock or assets of any other Person, if an Event
of Default has occurred and is continuing or would result therefrom.
(b) Consolidate with or merge with or into any Person or group
of affiliated Persons in a single transaction or through a series of
transactions, unless, after giving effect thereto either (i) Aviron shall be the
continuing Person or (ii) the resulting surviving or transferee Person shall
have a Consolidated Net Worth equal to or greater than the Consolidated Net
Worth of Aviron, to be determined as of the effective date of the transaction.
8.04 BUSINESS. Alter the nature of its business in any material respect
from that of the research, development, manufacturing and marketing of medical
products.
ARTICLE IX
EVENTS OF DEFAULT
In the case of the happening of any of the following events (herein
called "Events of Default"):
(a) any representation or warranty made or deemed made in or
in connection with this Agreement, the Security Agreement or any Note or the
borrowings hereunder or in any report, certificate, financial statement or other
instrument or agreement furnished in connection
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with this Agreement, the Security Agreement or the execution and delivery of any
Note or the borrowings hereunder shall prove to have been false or misleading in
any material respect when made or deemed to be made;
(b) default shall be made in the payment of any principal or
interest of any Note when and as the same shall become due and payable, whether
at the due date thereof or at a date fixed for prepayment thereof or by
acceleration thereof or otherwise and such default shall continue for five days
after written notice thereof;
(c) default shall be made in the due observance or performance
of any covenant, condition or agreement contained herein or in the Security
Agreement and such default shall continue for [***] days, or material default
shall be made in the due observance or performance of any covenant, condition or
agreement contained in the U.S. Co-Promotion Agreement or International License
Agreement and such default shall continue for [***] days after written notice
thereof;
(d) Aviron shall fail to pay any principal of or premium or
interest on any Indebtedness in an original aggregate amount of [***] or more
(but excluding any Indebtedness evidenced by a Note hereunder) when the same
becomes due and payable (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise), and such failure shall continue after the
applicable grace period, if any, specified in the agreement or instrument
relating to such Indebtedness; or any other event shall occur or condition shall
exist under any agreement or instrument relating to any such Indebtedness and
shall continue after the applicable grace period, if any, specified in such
agreement or instrument, if the effect of such event or condition is to
accelerate, or to permit the acceleration of, the maturity of such Indebtedness;
or any such Indebtedness shall be declared to be due and payable, or required to
be prepaid (other than by a regularly scheduled required prepayment), redeemed,
purchased or defeased, or an offer to prepay, redeem, purchase or defease such
Indebtedness shall be required to be made, in each case prior to the stated
maturity thereof;
(e) Aviron shall (i) voluntarily commence any proceeding or
file any petition seeking relief under Title 11 of the United States Code or any
other federal, state or foreign bankruptcy, insolvency, liquidation or similar
law, (ii) consent to the institution of, or fail to contravene in a timely and
appropriate manner, any such proceeding or the filing of any such petition,
(iii) apply for or consent to the appointment of a receiver, trustee, custodian,
sequestrator or similar official for such Person or for a substantial part of
its property or assets, (iv) file an answer admitting the material allegations
of a petition filed against it in any such proceeding, (v) make a general
assignment for the benefit of creditors, (vi) become unable, admit in writing
its inability or fail generally, to pay its debts as they become due or (vii)
take corporate action for the purpose of effecting any of the foregoing;
(f) an involuntary proceeding shall be commenced or an
involuntary petition shall be tried in a court of competent jurisdiction seeking
(i) relief in respect of Aviron or of a substantial part of its property or
assets under Title 11 of the United States Code or any other federal, state or
foreign bankruptcy, insolvency, receivership or similar law, (ii) the
appointment
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of a receiver, trustee, custodian, sequestrator or similar official for Aviron
or for a substantial part of the property of Aviron, or (iii) the winding-up or
liquidation of Aviron; and such proceeding or petition shall continue
undismissed for [***] or an order or decree approving or ordering any of the
foregoing shall continue unstayed and in effect for [***];
(g) a judgment or judgments for the payment of money (not
reimbursed by insurance policies) shall be rendered by a court or other tribunal
against Aviron and (i) shall remain undischarged for a period of [***] days
from the entry thereof during which the execution of such judgment shall not
have been stayed effectively or (ii) any judgment creditor shall legally
commence actions to collect on or enforce such judgment;
(h) this Agreement, the Security Agreement or any Note shall
for any reason cease to be, or be asserted by Aviron not to be, a legal, valid
and binding obligation enforceable in accordance with its terms, or the security
interest or lien purported to be created by the Security Agreement shall for any
reason cease to be, or be asserted by Aviron not to be, a valid, perfected
security interest in any Collateral except as otherwise permitted by this
Agreement; or
(i) a Material Adverse Effect shall have occurred;
then, and in any such event (other than an event described in paragraph
(e) or (f) above), and at any time thereafter during the continuance of such
event, AHPC may, by written or telegraphic notice to Aviron, take any or all of
the following actions at the same or different times: (i) terminate forthwith
all or any portion of the obligation to make additional Loans hereunder and (ii)
declare any Note to be forthwith due and payable whereupon the principal of a
Note, together with accrued interest thereon and other liabilities of Aviron
accrued hereunder, shall become due and payable both as to principal and
interest, without presentment, demand, protest or any other notice of any kind,
all of which are hereby expressly waived by Aviron, anything contained herein or
in any Note to the contrary notwithstanding; provided, however, that with
respect to a default described in paragraph (e) or (f) above, the obligation to
make additional Loans hereunder shall automatically terminate and all Notes, and
any other liabilities of Aviron accrued hereunder shall automatically become due
and payable, both as to principal and interest, without presentment, demand,
protest or other notice of any kind, all of which are hereby expressly waived by
Aviron, anything contained herein or in the Notes to the contrary
notwithstanding.
ARTICLE X
MISCELLANEOUS
10.01 NOTICES. All notices and other communications hereunder shall be
in writing and shall be deemed to have been given if delivered personally,
mailed by reputable overnight courier or certified mail (return receipt
requested) or sent by telecopier (confirmed thereafter by such certified mail)
to the parties at the following addresses or at such other addresses as shall be
specified by the parties by like notice:
(a) if to Aviron:
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Aviron
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxxx Xxxx, Xxxxxxxxxx 00000
Attention: X. Xxxxxxxx Read, M.D.
Chairman and Chief Executive Officer
Fax: (000) 000-0000
With a copy to:
Xxxxxx Godward LLP
Five Palo Alto Square
0000 Xx Xxxxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Fax: (000) 000-0000
(b) if to AHPC:
American Home Products Corporation
Five Xxxxxxx Xxxxx
Xxxxxxx, Xxx Xxxxxx 00000
Attention: Treasurer
Fax:; and
a copy to General Counsel
Fax: (000) 000-0000
Notices so given shall (in the case of notice so given by mail) be
deemed to be given and received on the third calendar day after mailing or the
next Business Day if sent by a reputable overnight courier and (in the case of
notice so given by telecopier or personal delivery) on the date of actual
transmission (as the case may be) personal delivery.
10.02 SURVIVAL OF AGREEMENT. All covenants, agreements, representations
and warranties made by Aviron herein and in the certificates or other
instruments prepared or delivered in connection with this Agreement or the
Security Agreement shall be considered to have been relied upon by AHPC and
shall survive the making of the Loans and the execution and delivery of the
Notes and shall continue in full force and effect as long as the principal of or
any accrued interest on the Notes or any other amount payable under the Notes or
this Agreement is outstanding and unpaid.
10.03 SUCCESSORS AND ASSIGNS. Whenever in this Agreement any of the
parties hereto is referred to, such reference shall be deemed to include the
successors and assigns of such party; and all covenants, promises and agreements
by or on behalf of Aviron or AHPC that are contained in this Agreement shall
bind and inure to the benefit of their respective successors and assigns. Aviron
may not assign or transfer any of its rights or obligations hereunder without
the written consent of AHPC. AHPC may assign, to any one or more Persons, all or
a portion of its interests, rights and obligations under this Agreement or the
Security Agreement (including,
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without limitation, all or a portion of the Loans at the time owing to it and
the same portion of the Note held by it); provided, however, except following
the occurrence of an Event of Default, AHPC may not assign any such interests,
rights, and obligations to a Person that is not an Affiliate of AHPC without the
written consent of Aviron.
10.04 EXPENSES; INDEMNITY.
(a) Aviron agrees to pay all out-of-pocket expenses incurred
by AHPC in connection with the enforcement or protection (whether through
negotiations, legal proceedings or otherwise) of its rights in connection with
this Agreement, the Security Agreement, a Note and the other documents to be
delivered hereunder or with the Loans made or a Note, or in connection with any
pending or threatened action, proceeding, or investigation relating to the
foregoing, including but not limited to the reasonable fees and disbursements of
counsel. Aviron further agrees that it shall indemnify AHPC from and hold it
harmless against any documentary taxes, assessments or charges payable or
determined to be payable in connection with the execution and delivery of this
Agreement, the Security Agreement, a Note and the other documents to be
delivered hereunder.
(b) Aviron agrees to indemnify AHPC and its directors,
officers, employees and agents against, and to hold AHPC and each such Person
harmless from, any and all losses, claims, damages, liabilities and related
expenses, including reasonable counsel fees and expenses, incurred by or
asserted against AHPC or any such Person arising out of, in any way connected
with, or as a result of this Agreement or the other documents contemplated
hereby or thereby, the performance by the parties hereto and thereto of their
respective obligations hereunder and thereunder and consummation of the
transactions contemplated hereby and thereby; or any claim, litigation,
investigation or proceedings relating to any of the foregoing, whether or not
AHPC or any such Person is a party thereto; provided that such indemnity shall
not apply to any such losses, claims, damages, liabilities or related expenses
to the extent that they result from the gross negligence or willful misconduct
of AHPC.
(c) The provisions of this Section 10.04 shall remain
operative and in full force and effect regardless of the expiration of the term
of this Agreement, the consummation of the transactions contemplated hereby, the
repayment of any of the Loans, the invalidity or unenforceability of any term or
provision of this Agreement or a Note, or any investigation made by or on behalf
of AHPC. All amounts due under this Section 10.04 shall be payable on written
demand therefore.
10.05 APPLICABLE LAW. This Agreement, the Security Agreement and the
Note shall be governed by and interpreted under the laws of the State of [***]
as applied to contracts entered into and performed entirely in [***] residents.
10.06 PAYMENTS ON BUSINESS DAYS. Should the principal of or interest on
the Note or any fee or other amount payable hereunder become due and payable on
other than a Business Day, payment in respect thereof may be made on the next
succeeding Business Day, and such
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extension of time shall in such ease be included in computing interest, it any,
in connection with such payment.
10.07 WAIVERS; AMENDMENTS.
(a) No failure or delay of AHPC in exercising any power or
right hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of AHPC hereunder are cumulative and not exclusive of any rights or
remedies which they may otherwise have. No waiver of any provision of this
Agreement or any Note nor consent to any departure by Aviron therefrom shall in
any event be effective unless the same shall be authorized as provided in
paragraph (b) below, and then such waiver or consent shall be effective only in
the specific instance and for the purpose for which given. No notice to or
demand on Aviron in any case shall entitle any such party to any other or
further notice or demand in similar or other circumstances. Each holder of any
Note shall be bound by any amendment, modification, waiver or consent authorized
as provided herein, whether or not any Note shall have been marked to indicate
such amendment, modification, waiver or consent.
(b) Neither this Agreement, nor any provision hereof, may be
waived, amended or modified except pursuant to an agreement or agreements in
writing entered into by Aviron and AHPC.
10.08 SEVERABILITY. In the event any one or more of the provisions
contained in this Agreement or in a Note should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein or therein shall not in any way be
affected or impaired thereby. The parties shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions the economic effect of which comes as close as possible to that
of the invalid, illegal or unenforceable provisions.
10.09 ENTIRE AGREEMENT; AMENDMENTS; ETC. This Agreement, the U. S.
Co-Promotion Agreement, the International License Agreement and the FluMist(TM)
Supply Agreement entered into by and between Aviron and AHPC as of even date
herewith (collectively, the "Agreements"), including all Exhibits and Schedules
attached thereto, set forth all the covenants, promises, agreements, warranties,
representations, conditions and understandings between Aviron and AHPC with
respect to the subject matter thereof, and supersede and terminate all prior
agreements and understandings between Aviron and AHPC with respect to such
subject matter, except as provided in Section 11.3(e) of the International
License Agreement. There are no covenants, promises, agreements, warranties,
representations, conditions or understandings, either oral or written, between
Aviron and AHPC with respect to the subject matter thereof other than as set
forth therein. No subsequent alteration, amendment, change or addition to the
Agreements shall be binding upon Aviron and AHPC hereto unless reduced to
writing and signed by the respective authorized officers of each of Aviron and
AHPC. The Agreements, including without limitation, the Exhibits, Schedules and
attachments thereto, are intended to define the full extent of the legally
enforceable undertakings of Aviron and AHPC thereto with respect to the subject
matter thereof, and no promise or representation, written or oral, which is
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not set forth explicitly is intended by either Aviron and AHPC to be legally
binding. Both Aviron and AHPC acknowledge that in deciding to enter into the
Agreements and to consummate the transaction contemplated thereby neither Aviron
and AHPC has relied upon any statement or representations, written or oral,
other than those explicitly set forth therein.
10.10 COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall constitute an original but all of which when taken together
shall constitute but one contract.
10.11 HEADINGS. Article and Section headings and the Table of Contents
used herein are for convenience of reference only and are not to affect the
construction of, or to be taken into consideration in interpreting, this
Agreement.
10.12 EFFECTIVENESS OF THIS AGREEMENT. This Agreement shall become
effective upon the Effective Date (as defined in the U.S. Co-Promotion
Agreement), and shall terminate upon the later of (a) the Availability
Termination Date and (b) the repayment in full of all principal, interest and
other amounts by Aviron hereunder and under the Notes.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
AMERICAN HOME PRODUCTS CORPORATION AVIRON
By: /s/ Xxxxx X. Xxxxxxxx By: /s/ Xxxxx X. Xxxxx
------------------------------ ---------------------------------
XXXXX X. XXXXX
SENIOR VICE PRESIDENT,
COMMERCIAL DEVELOPMENT
23.
24
SCHEDULE 2.08
TERMS OF WARRANTS
TERMS OF WARRANTS FOR WYETH-AYERST TO PURCHASE COMMON STOCK IN AVIRON
o Warrants will be issued on the date Aviron receives a loan from
Wyeth-Ayerst under Section 2 of this agreement: the "Date of Issue."
o Warrants issued will have a 3-year Term from the Date of Issue, or will
expire earlier upon a merger or consolidation of Aviron.
o The strike price of the Warrants will be the 30-day trailing average of the
Fair Market Value of Aviron Common Stock on the Date of Issue.
o The Number of Warrants issued for each Loan will be calculated by Aviron
using the Black-Scholes Option Pricing Model on the Date of Issue, provided
that such calculation is subject to AHPC's acceptance of such calculation.
If the parties disagree on such calculation, the calculation shall be made
by a mutually acceptable independent third party. All such calculations
shall be made using the following assumptions:
Po Value of option Amount of Loan Multiplied by 5% Multiplied by the Loan Term
Divided by the Number of Warrants Granted
For example: $10,000,000 X 5% X 5 Years=$2,500,000
Ps Current price of stock 30 day-trailing Fair Market Value of Aviron Common Stock
on Date of Issue
E Exercise price of option 30 day-trailing Fair Market Value of Aviron Common Stock
on Date of Issue
e Constant used in 2.718
Black-Scholes Option
Pricing Model
t Time remaining until 3 Years
expiration
r Risk Free Interest Rate To be calculated on Date of Issue
v Volatility To be calculated based on the daily closing price of Aviron Common Stock in
the previous 12 month period of time prior to the Date of Issue
24.
25
SCHEDULE 3.04
EXISTING INDEBTEDNESS
1. $100,000,000 aggregate principal amount of 5-3/4% convertible subordinated
notes due 2005 issued by Aviron under an Indenture dated as of March 15, 1998,
by and between Aviron and Marine Midland Bank, as trustee
2. Approximately $554,000 remaining aggregate principal amount under an
Equipment Financing Agreement Number 10768 between Lease Management Services,
Inc. and Aviron
25.
26
SCHEDULE 3.09
MATERIAL ADVERSE CHANGE
None
26.
27
SCHEDULE 8.01
DIVIDENDS AND DISTRIBUTIONS
None
27.
28
EXHIBIT A
FORM OF WARRANT
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE SECURITIES LAWS OF ANY STATE.
THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND
MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND THE
APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION
THEREFROM. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN
FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED
TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE
SECURITIES LAWS.
AVIRON
WARRANT FOR THE PURCHASE OF SHARES OF COMMON STOCK
No. CSW-__ _________ Shares
FOR VALUE RECEIVED, AVIRON, a Delaware corporation (the "Company"),
with its principal office at 000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxxxxx Xxxx, XX 00000,
hereby certifies that American Home Products Corporation or its assigns (the
"Holder") is entitled, subject to the provisions of this Warrant, to purchase
from the Company, at any time prior to the Expiration Date (as defined in
Section 11 below), _______ fully paid and nonassessable shares of Common Stock
of the Company, at an exercise price per share equal to _____________ (the
"Exercise Price"). The term "Common Stock" shall mean the aforementioned Common
Stock of the Company, together with any other equity securities that may be
issued by the Company in addition thereto or in substitution therefor as
provided herein.
The number of shares of Common Stock to be received upon the exercise
of this Warrant and the price to be paid for a share of Common Stock are subject
to adjustment from time to time as hereinafter set forth. The shares of Common
Stock deliverable upon such exercise, as adjusted from time to time, are
hereinafter sometimes referred to as "Warrant Shares."
SECTION 1. EXERCISE OF WARRANT. This Warrant may be exercised in whole
or in part on any business day prior to the Expiration Date by presentation and
surrender to the Company at its principal office at the address set forth in the
initial paragraph hereof (or at such other address as the Company may hereafter
notify the Holder in writing) with the Purchase Form annexed hereto duly
executed and accompanied by proper payment of the Exercise Price in lawful money
of the United States of America in the form of a check, subject to collection,
for the number of Warrant Shares specified in the Purchase Form. If this Warrant
should be exercised in part only, the Company shall, upon surrender of this
Warrant, execute and deliver a
28.
29
new Warrant evidencing the rights of the Holder thereof to purchase the balance
of the Warrant Shares purchasable hereunder. Upon receipt by the Company of this
Warrant and such Purchase Form, together with proper payment of the Exercise
Price, at such office, the Holder shall be deemed to be the holder of record of
the Warrant Shares, notwithstanding that the stock transfer books of the Company
shall then be closed or that certificates representing such Warrant Shares shall
not then be actually delivered to the Holder.
SECTION 2. NET ISSUE EXERCISE. Notwithstanding any provisions herein to
the contrary, in lieu of exercising this Warrant for cash, the Holder may elect
to receive shares equal to the value (as determined below) of this Warrant (or
the portion thereof being canceled) by surrender of this Warrant at the
principal office of the Company together with the Net Issue Exercise Form
annexed hereto duly executed in which event the Company shall issue to the
Holder a number of shares of Common Stock computed using the following formula:
X = Y (A - B)
---------
A
Where X = the number of shares of Common Stock to be
issued to the Holder
Y = the number of shares of Common Stock purchasable
under the Warrant or, if only a portion of the
Warrant is being exercised, the number of shares
purchased under the Warrant being canceled (at the
date of such calculation)
A = the fair market value as determined by the
closing sales price on the date of exercise of one
share of the Company's Common Stock as quoted on
NASDAQ
B = Exercise Price (as adjusted to the date of such
calculation)
SECTION 3. ISSUANCE OF NEW WARRANT. In the event of any exercise of the
rights represented by this Warrant, certificates for the Warrant Shares so
purchased shall be delivered to the holder hereof as soon as practicable and,
unless this Warrant has been fully exercised or has expired, a new Warrant
representing the portion of the Warrant Shares, if any, with respect to which
this Warrant shall not then have been exercised shall also be issued to the
holder hereof within a reasonable time. Such exercise shall be deemed to have
been made immediately prior to the close of business on the date of surrender of
this Warrant.
SECTION 4. RESERVATION OF SHARES. The Company hereby agrees that at all
times while any shares may be purchased pursuant to this Warrant Agreement there
shall be reserved for issuance and delivery upon exercise of this Warrant all
shares of its Common Stock or other shares of capital stock of the Company from
time to time issuable upon exercise of this Warrant. All such shares shall be
duly authorized and, when issued upon such exercise in accordance with the terms
of this Warrant, shall be validly issued, fully paid and nonassessable.
33.
30
SECTION 5. FRACTIONAL INTEREST. The Company will not issue a fractional
share of Common Stock upon exercise of this Warrant. Instead, the Company will
deliver its check for the current fair market value of the fractional share as
determined in good faith by the Company.
SECTION 6. ASSIGNMENT OR LOSS OF WARRANT.
(a) Except as provided in Section 10, the Holder of this
Warrant shall be entitled, without obtaining the consent of the Company, to
assign its interest in this Warrant in whole or in part to any person or
persons. Subject to the provisions of Section 10, upon surrender of this Warrant
to the Company or at the office of its stock transfer agent or warrant agent,
with the Assignment Form annexed hereto duly executed and funds sufficient to
pay any transfer tax, the Company shall, without charge, execute and deliver a
new Warrant or Warrants in the name of the assignee or assignees named in such
instrument of assignment and, if the Holders entire interest is not being
assigned, in the name of the Holder, and this Warrant shall promptly be
canceled.
(b) Upon receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction or mutilation of this Warrant, and (in
the case of loss, theft or destruction) of indemnification satisfactory to the
Company (with such lost or stolen Warrant being duly canceled on the books and
records of the Company), and upon surrender and cancellation of this Warrant, if
mutilated, the Company shall execute and deliver a new Warrant of like tenor and
date.
SECTION 7. RIGHTS OF THE HOLDER. The Holder shall not, by virtue
hereof, be entitled to any rights of a shareholder in the Company, either at law
or equity, and the rights of the Holder are limited to those expressed in this
Warrant. Nothing contained in this Warrant shall be construed as conferring upon
the Holder hereof the right to vote or to consent or to receive notice as a
shareholder of the Company on any matters or with respect to any rights
whatsoever as a shareholder of the Company. No dividends or interest shall be
payable or accrued in respect of this Warrant or the interest represented hereby
or the Warrant Shares purchasable hereunder until, and only to the extent that,
this Warrant shall have been exercised in accordance with its terms.
SECTION 8. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF SHARES. The
number and kind of securities purchasable upon the exercise of the Warrant and
the Exercise Price shall be subject to adjustment from time to time upon the
occurrence of certain events, as follows:
(a) RECLASSIFICATION OF OUTSTANDING SECURITIES. In case of any
reclassification, change or conversion of securities of the class issuable upon
exercise of this Warrant (other than a change in par value, or from par value to
no par value, or from no par value to par value, or as a result of a subdivision
or combination), the Company shall execute a new Warrant (in form and substance
reasonably satisfactory to the Holder of this Warrant) providing that the Holder
of this Warrant shall have the right to exercise such new Warrant and upon such
exercise to receive, in lieu of each share of Common Stock theretofore issuable
upon exercise of this Warrant, the kind and amount of shares of stock, other
securities, money and property receivable upon such reclassification or change
by a holder of one share of Common Stock. Such new Warrant shall provide for
adjustments that shall be as nearly equivalent as may
34.
31
be practicable to the adjustments provided for in this Section 8. The provisions
of this subsection (a) shall similarly apply to successive reclassification or
changes.
(b) SUBDIVISIONS OR COMBINATION OF SHARES. If the Company at
any time while this Warrant remains outstanding and unexpired shall subdivide or
combine its Common Stock, the Exercise Price and the number of Warrant Shares
issuable upon exercise hereof shall be proportionately adjusted.
(c) STOCK DIVIDENDS. If the Company at any time while this
Warrant is outstanding and unexpired shall pay a dividend payable in shares of
Common Stock (except any distribution specifically provided for in the foregoing
subsections (a) and (b)), then the Exercise Price shall be adjusted, from and
after the date of determination of shareholders entitled to receive such
dividend or distribution, to that price determined by multiplying the Exercise
Price in effect immediately prior to such date of determination by a fraction
(a) the numerator of which shall be the total number of shares of Common Stock
outstanding immediately prior to such dividend or distribution, and (b) the
denominator of which shall be the total number of shares of Common Stock
outstanding immediately after such dividend or distribution and the number of
Warrant Shares subject to this Warrant shall be proportionately adjusted.
(d) NOTICE OF RECORD DATE. In the event of any taking by the
Company of a record of its shareholders for the purpose of determining
shareholders who are entitled to receive payment of any dividend (other than a
cash dividend) or other distribution, any right to subscribe for, purchase or
otherwise acquire any share of any class or any other securities or property, or
to receive any other right, or for the purpose of determining shareholders who
are entitled to vote in connection with any proposed merger or consolidation of
the Company with or into any other corporation, or any proposed sale, lease or
conveyance of all or substantially all of the assets of the Company, or any
proposed liquidation, dissolution or winding up of the Company, the Company
shall mail to the Holder of this Warrant, at least twenty days prior to the date
specified therein, a notice specifying the date on which any such record is to
be taken for the purpose of such dividend, distribution or right, and the amount
and character of such dividend, distribution or right.
(e) NO ADJUSTMENT UPON EXERCISE OF WARRANTS. No adjustments
shall be made under any Section herein in connection with the issuance of
Warrant Shares upon exercise of the Warrants.
SECTION 9. OFFICER'S CERTIFICATE. Whenever the Exercise Price shall be
adjusted as required by the provisions of Section 8, the Company shall deliver
an officer's certificate showing the adjusted Exercise Price determined as
herein provided, setting forth in reasonable detail the facts requiring such
adjustment and the manner of computing such adjustment. Each such officer's
certificate shall be signed by the chairman, president or chief financial
officer of the Company.
SECTION 10. TRANSFER TO COMPLY WITH THE SECURITIES ACT OF 1933. This
Warrant may not be exercised and neither this Warrant nor any of the Warrant
Shares, nor any interest in either, may be sold, assigned, pledged,
hypothecated, encumbered or in any other manner transferred or disposed of, in
whole or in part, except in compliance with applicable United
35.
32
States federal and state securities or Blue Sky laws and the terms and
conditions hereof. Each Warrant shall bear a legend in substantially the same
form as the legend set forth on the first page of this Warrant. Each certificate
for Warrant Shares issued upon exercise of this Warrant, unless at the time of
exercise such Warrant Shares are acquired pursuant to a registration statement
that has been declared effective under the Securities Act of 1933 (the "Act"),
shall bear a legend substantially in the following form:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE SECURITIES
LAWS OF ANY STATE. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON
TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT
AS PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS,
PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. THE ISSUER OF THESE
SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE
SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR
RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE
SECURITIES LAWS.
Any certificate for any Warrant Shares issued at any time in exchange or
substitution for any certificate for any Warrant Shares bearing such legend
(except a new certificate for any Warrant Shares issued after the acquisition of
such Warrant Shares pursuant to a registration statement that has been declared
effective under the Act) shall also bear such legend unless, in the opinion of
counsel for the Company, the Warrant Shares represented thereby need no longer
be subject to the restriction contained herein. The provisions of this Section
10 shall be binding upon all subsequent Holders of certificates for Warrant
Shares bearing the above legend and all subsequent Holders of this Warrant, if
any. In addition, in connection with the issuance of this Warrant, the Holder
specifically represents to the Company by acceptance of this Warrant as follows:
(a) The Holder is an "accredited investor" as defined in Rule
501(a) under the Act. Investor has such business and financial experience as is
required to give it the capacity to protect its own interests in connection with
the purchase of the Warrants and the Warrant Shares. The Holder is acquiring
this Warrant for its own account for investment purposes only and not with a
view to, or for the resale in connection with, any "distribution" thereof in
violation of the Act.
(b) The Holder understands that this Warrant has not been
registered under the Act in reliance upon a specific exemption therefrom, which
exemption depends upon, among other things, the bona fide nature of the Holder's
investment intent as expressed herein.
(c) The Holder further understands that this Warrant must be
held indefinitely unless subsequently registered under the Act and qualified
under any applicable state securities laws, or unless exemptions from
registration and qualification are otherwise available.
36.
33
SECTION 11. EXPIRATION DATE. This Warrant shall expire and shall be
wholly void and have no effect after 5:00 p.m. (San Francisco time) on the date
which is the earlier of (a) the third anniversary of the date hereof, or (b) the
business day immediately preceding the closing date of a merger or consolidation
of the Company with or into any other entity, including a reverse triangular
merger involving the Company (other than a merger or consolidation in which the
Holders of the voting power of the Company immediately prior to such
consolidation or merger hold a majority of the surviving or resulting entity
immediately following such consolidation or merger), provided that, if the last
day on which this Warrant may be exercised, or on which it may be exercised at a
particular Exercise Price, is a Sunday or a legal holiday or a day on which
banking institutions doing business in the city of San Francisco are authorized
by law to close, this Warrant may be exercised prior to 5:00 p.m. (San Francisco
time) on the next succeeding full business day with the same force and effect
and at the same Exercise Price as if exercised on such last day specified
herein.
SECTION 12. COMPETITION LAWS. At the time of exercise of this Warrant,
it will be necessary for the Company to undertake a review of such exercise to
determine if a filing with the U.S. Federal Trade Commission and the U.S.
Department of Justice under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended, and the rules promulgated thereunder (16 C.F.R. Sections 801.1
et seq.) is required, and if such filing is required, the Company and Investor
(or its successor) shall promptly make any such required filings.
SECTION 13. GOVERNING LAW. This Warrant is delivered in the State of
California and shall be construed in accordance with and governed by the laws of
that State.
SECTION 14. MODIFICATION AND WAIVER. Neither this Warrant nor any term
hereof may be amended, waived, discharged or terminated other than by an
instrument in writing signed by the Company and by the Holder hereof.
SECTION 15. NOTICES. Any notice, request or other document required or
permitted to be given or delivered to the Holder hereof or the Company shall be
delivered or shall be sent by certified mail, postage prepaid, to each such
Holder at its address as shown on the books of the Company or to the Company at
the address indicated therefor in the first paragraph of this Warrant.
SECTION 16. DESCRIPTIVE HEADINGS AND GOVERNING LAW. The description
headings of the several sections and paragraphs of this Warrant are inserted for
convenience only and do not constitute a part of this Warrant. This Warrant
shall be construed and enforced in accordance with, and the rights of the
parties shall be governed by, the laws of the State of California.
SECTION 17. ENTIRE AGREEMENT. This Warrant constitutes the entire
agreement between the parties pertaining to the subject matter herein and
supersedes all prior and contemporaneous agreements, representation and
undertakings of the parties.
37.
34
IN WITNESS WHEREOF, the Company has duly caused this Warrant to be
signed by its duly authorized officer and to be dated as of ________________.
AVIRON
By:
-------------------------------------
X. Xxxxxxxx Read, M.D.
Chairman and Chief Executive Officer
38.
35
EXHIBIT B
FORM OF BORROWING NOTICE
American Home Products Corporation
Five Giralda Farms
Madison, New Jersey 07940
Gentlemen:
Reference is made to the Credit Agreement, dated as of January 11, 1998
(the "Credit Agreement"), between Aviron ("Aviron") and American Home Products
Corporation. Terms not defined herein shall have the meanings assigned to such
terms in the Credit Agreement.
Pursuant to Section 2.01 of the Credit Agreement, Aviron hereby
requests that a Loan be made on _________ in the amount of $______________.
NOTE: THE AMOUNT APPEARING ABOVE MUST BE IN A WHOLE MULTIPLE OF [***]
SUBJECT TO AVIRON'S RIGHT TO DRAWDOWN THE BALANCE WHERE THE BALANCE IS
LESS THAN [***]
The representations and warranties contained in Article III of the
Credit Agreement are true and correct on and as of the date hereof and will be
true and correct on and as of the date of the Loan requested hereby as though
made on and as of the date hereof and the date of the Loan requested hereby
(except insofar as such representations and warranties relate expressly to an
earlier date).
No event has occurred and is continuing, or would result from the Loan
requested hereby, or from the application of the proceeds thereof which
constitutes an Event of Default under the Credit Agreement.
Very truly yours,
AVIRON
By:
-----------------------------------------
Name:
Title:
------------------
[***] = CONFIDENTIAL TREATMENT REQUESTED.
1.
36
EXHIBIT C
FORM OF NOTE
$__________ Mountain View, California
FOR VALUE RECEIVED, the undersigned, AVIRON, a Delaware
corporation (the "Maker"), hereby promises to pay to the order of AMERICAN HOME
PRODUCTS CORPORATION, a Delaware corporation ("AHPC"), on ________ (or earlier
as provided in the Credit Agreement dated as of January 11, 1999 between the
Maker and AHPC (as amended, supplemented or otherwise modified from time to
time, the "Credit Agreement")), the aggregate unpaid principal amount of all
Loans made by AHPC to the Maker pursuant to Sections 2.01 of the Credit
Agreement, in lawful money of the United States of America in immediately
available funds, and to pay interest from the date hereof on the principal
amount hereof from time to time outstanding, in like funds, at AHPC's office, at
a rate or rates per annum and payable on such dates as determined pursuant to
the terms of the Credit Agreement. Interest on the unpaid principal amount of
this Note shall be paid from the date of this Note until such principal amount
is paid in full and shall accrue at a floating rate per annum equal to [***].
All accrued and unpaid interest shall be payable on the last Business Day of
each calendar quarter beginning on [end of first calendar quarter after a Loan
is made]. The principal amount of this Note shall payable in full on [date that
is [***] after date of the Note]. Notwithstanding the foregoing, interest shall
continue to accrue on all principal amounts outstanding under the Loans until
payment in full.
The Maker hereby waives diligence, presentment, demand,
protest and notice of any kind whatsoever. The nonexercise by the holder of any
of its rights hereunder in any particular instance shall not constitute a waiver
thereof in that or any subsequent instance.
All borrowings evidenced by this Note and all payments and
prepayments of the principal hereof and interest hereon and the respective dates
thereof shall be endorsed by the holder hereof on the schedule attached hereto
and made a part hereof, or on a continuation thereof which shall be attached
hereto and made a part hereof, or otherwise recorded by such holder in its
internal records; provided, however, that the failure of the holder hereof to
make such a notation or any error in such a notation shall not in any manner
affect the obligation of the Maker to make payments of principal and interest in
accordance with the terms of this Note and the Credit Agreement.
This Note is secured by personal property collateral pursuant
to, and is entitled to the benefits of, the Security Agreement (as defined in
the Credit Agreement). Reference is made to the Security Agreement for the terms
and conditions governing the collateral security for the obligations of Aviron
hereunder.
Upon the occurrence of any one or more of the Events of
Default specified in the Credit Agreement, all amounts unpaid on the Note shall
become, or may be declared to be, immediately due and payable, all as provided
therein.
________
[***] = CONFIDENTIAL TREATMENT REQUESTED.
1.
37
This Note is referred to in the Credit Agreement, which, among
other things, contains provisions for the acceleration of the maturity hereof
upon the happening of certain events, for optional and mandatory prepayment of
the principal hereof prior to the maturity hereof and for the amendment or
waiver of certain conditions therein specified. THIS NOTE SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF DELAWARE, WITHOUT
REGARD TO CHOICE OF LAW DOCTRINE.
Terms not defined herein shall have the meaning assigned to
such terms in the Credit Agreement.
AVIRON
By:
-----------------------------------------
Name:
Title:
2.
38
Loans and Payments
Unpaid Name of
Principal Person
Payments Balance Making
Date Amount Principal Interest of Note Notation
---- ------ ------------------ --------- --------
3.
39
SUBSCRIPTION FORM
THE UNDERSIGNED, holder of this Warrant, (1) hereby irrevocably elects
to exercise the right of purchase represented by this Warrant for, and to
purchase thereunder, ________________ full shares of the Common Stock of Aviron
provided for therein, (2) makes payment in full of the purchase price of such
shares, (3) requests that certificates for such shares be issued in the name of
----------------------------------------------------------------
(Please print name and address)
----------------------------------------------------------------
(Please insert social security or other identifying number)
and (4) if said number of shares shall not be all the shares purchasable
thereunder, requests that a new Warrant for the unexercised portion of this
Warrant be issued in the name of and delivered to:
----------------------------------------------------------------
----------------------------------------------------------------
(Please print name and address)
Dated:
---------------------------------------------
Signature:
---------------------------------------------
By:
---------------------------------------------
1.
40
ASSIGNMENT FORM
Dated _________, 19__
FOR VALUE RECEIVED, ________________________________ hereby sells,
assigns and transfers unto _________________________________________________
(the "Assignee"),________________________________________________
(please type or print in block letters)
--------------------------------------------------------------------------------
(insert address)
its right to purchase up to ____ shares of Common Stock of AVIRON represented by
this Warrant and does hereby irrevocably constitute and appoint
____________________________ Attorney, to transfer the same on the books of the
Company, with full power of substitution in the premises.
Signature
--------------------------
2.
41
NET ISSUE ELECTION NOTICE
The undersigned, _______________________, hereby irrevocably elects
under Section 2 of the within Warrant to surrender the right to purchase
________ shares of Common Stock pursuant to this Warrant. The certificate(s) for
the shares issuable upon such net issue election shall be issued in the name of
the undersigned or as otherwise indicated below.
Date: ________,_______
-----------------------------------------
[Signature]
-----------------------------------------
[Name of Registration]
-----------------------------------------
[Street Address]
-----------------------------------------
[City and State]
42
TABLE OF CONTENTS
PAGE
----
ARTICLE I DEFINITIONS.....................................................................................1
1.01 "Affiliate".....................................................................................1
1.02 "Availability Termination Date".................................................................1
1.03 "Business Day"..................................................................................1
1.04 "Capital Stock".................................................................................2
1.05 "Collateral"....................................................................................2
1.06 "Commission"....................................................................................2
1.07 "Common Stock"..................................................................................2
1.08 "Consolidated Net Worth"........................................................................2
1.09 "U.S. Co-Promotion Agreement"...................................................................2
1.10 "Credit Event"..................................................................................2
1.11 "Dollars".......................................................................................2
1.12 "Drawdown Date".................................................................................2
1.13 "Event of Default"..............................................................................2
1.14 "Exchange Act"..................................................................................2
1.15 "FDA"...........................................................................................2
1.16 "Financial Officer".............................................................................2
1.17 "Guarantee".....................................................................................2
1.18 "Indebtedness"..................................................................................2
1.19 "International License Agreement"...............................................................3
1.20 "Lien"..........................................................................................3
1.21 "Loans".........................................................................................3
1.22 "Material Adverse Effect".......................................................................3
1.23 "Note or Notes".................................................................................3
1.24 "Permitted Indebtedness"........................................................................3
1.25 "Permitted Liens"...............................................................................3
1.26 "Person"........................................................................................4
1.27 "Preferred Stock"...............................................................................4
1.28 "Prime Rate"....................................................................................4
1.29 "Responsible Officer"...........................................................................4
43
TABLE OF CONTENTS
(CONTINUED)
PAGE
----
1.30 "SEC Documents".................................................................................4
1.31 "Securities Act"................................................................................4
1.32 "Security Agreement"............................................................................4
1.33 "Subsidiary"....................................................................................5
1.34 "Transactions"..................................................................................5
ARTICLE II THE LOANS.......................................................................................5
2.01 The Loans.......................................................................................5
2.02 Notice of Borrowings............................................................................5
2.03 Notes; Repayment of Loans.......................................................................5
2.04 Interest on Loans...............................................................................6
2.05 [***]...........................................................................................6
2.06 Interest on Overdue Amounts.....................................................................6
2.07 Prepayment of Loans.............................................................................6
2.08 Warrants........................................................................................7
ARTICLE III REPRESENTATIONS AND WARRANTIES OF AVIRON........................................................7
3.01 Organization, Corporate.........................................................................7
3.02 Authorization...................................................................................7
3.03 Capitalization..................................................................................8
3.04 Indebtedness....................................................................................8
3.05 Full Disclosure.................................................................................8
3.06 SEC Filings.....................................................................................8
3.07 Governmental Approvals..........................................................................8
3.08 Binding Effect..................................................................................9
3.09 Material Adverse Change.........................................................................9
3.10 Litigation; Compliance with Laws; etc...........................................................9
3.11 Taxes...........................................................................................9
3.12 Investment Company Act..........................................................................9
3.13 Use of Proceeds.................................................................................9
3.14 Security Interest..............................................................................10
------------------
[***] = CONFIDENTIAL TREATMENT REQUESTED.
44
TABLE OF CONTENTS
(CONTINUED)
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3.15 Title to Properties; Possession Under Leases; Trademarks.......................................10
3.16 Absence of Certain Developments................................................................10
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF AHPC.........................................................11
4.01 Investment Intent..............................................................................11
4.02 No Legal, Tax or Investment Advice.............................................................11
4.03 Corporate Power; Authority.....................................................................11
ARTICLE V RESTRICTIONS ON TRANSFER.......................................................................11
5.01 Restrictions on Transferability................................................................11
ARTICLE VI CONDITIONS OF CREDIT EVENTS....................................................................11
6.01 All Credit Events..............................................................................11
6.02 Initial Drawdown Date..........................................................................12
ARTICLE VII AFFIRMATIVE COVENANTS..........................................................................13
7.01 Compliance With Laws...........................................................................13
7.02 Corporate Existence............................................................................13
7.03 Business and Properties........................................................................13
7.04 Insurance......................................................................................13
7.05 Taxes..........................................................................................14
7.06 Financial Statements, Reports. etc.............................................................14
7.07 Litigation and Other Notices...................................................................14
7.08 Maintaining Records, Access to Properties and Inspections......................................15
7.09 Use of Proceeds................................................................................15
7.10 Payment of Obligations.........................................................................15
7.11 Further Assurances.............................................................................15
ARTICLE VIII NEGATIVE COVENANTS.............................................................................15
8.01 Dividends and Distributions....................................................................16
8.02 Indebtedness...................................................................................16
8.03 Consolidations, Mergers and Sales of Assets....................................................16
8.04 Business.......................................................................................16
ARTICLE IX EVENTS OF DEFAULT..............................................................................16
ARTICLE X MISCELLANEOUS..................................................................................18
10.01 Notices........................................................................................18
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10.02 Survival of Agreement..........................................................................19
10.03 Successors and Assigns.........................................................................19
10.04 Expenses; Indemnity............................................................................20
10.05 Applicable Law.................................................................................20
10.06 Payments on Business Days......................................................................20
10.07 Waivers; Amendments............................................................................21
10.08 Severability...................................................................................21
10.09 Entire Agreement; Amendments; etc..............................................................21
10.10 Counterparts...................................................................................22
10.11 Headings.......................................................................................22
10.12 Effectiveness of This Agreement................................................................22
SCHEDULE 2.08 TERMS OF WARRANTS.................................................................................24
SCHEDULE 3.04 EXISTING INDEBTEDNESS.............................................................................25
SCHEDULE 3.09 MATERIAL ADVERSE CHANGE...........................................................................26
SCHEDULE 8.01 DIVIDENDS AND DISTRIBUTIONS.......................................................................27
EXHIBIT A FORM OF WARRANT.......................................................................................28
EXHIBIT B FORM OF BORROWING NOTICE..............................................................................
EXHIBIT C FORM OF NOTE..........................................................................................
