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EXHIBIT 1.1
2,000,000 SHARES
AVIRON
COMMON STOCK (PAR VALUE $0.001 PER SHARE)
UNDERWRITING AGREEMENT
_______________, 2000
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_______________, 2000
Xxxxxx Xxxxxxx & Co. Incorporated
Bear, Xxxxxxx & Co. Inc.
U.S. Bancorp Xxxxx Xxxxxxx Inc.
c/o Morgan Xxxxxxx & Co.
Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs and Mesdames:
AVIRON, a Delaware corporation (the "COMPANY"), proposes to issue and
sell to the several Underwriters named in Schedule I hereto (the "UNDERWRITERS")
2,000,000 shares of its common stock, par value $0.001 per share (the "FIRM
SHARES"). The Company also proposes to issue and sell to the several
Underwriters not more than an additional 200,000 shares of its common stock, par
value $0.001 per share (the "ADDITIONAL COMPANY SHARES") and the shareholder of
the Company named in Schedule II hereto (the "SELLING SHAREHOLDER") proposes to
sell to the several Underwriters not more than 100,000 shares of the common
stock, par value $0.001 per share of the Company (the "SELLING SHAREHOLDER
SHARES", together with the Additional Company Shares, the "ADDITIONAL SHARES")
if and to the extent that you, as Managers of the offering, shall have
determined to exercise, on behalf of the Underwriters, the right to purchase
such shares of common stock granted to the Underwriters in Section 3 hereof. The
Firm Shares and the Additional Shares are hereinafter collectively referred to
as the "SHARES." The shares of common stock, par value $0.001 per share of the
Company to be outstanding after giving effect to the sales contemplated hereby
are hereinafter referred to as the "COMMON STOCK." The Company and the Selling
Shareholder are hereinafter sometimes collectively referred to as the "SELLERS."
The Company has filed with the Securities and Exchange Commission (the
"COMMISSION") a registration statement, including a prospectus, relating to the
Shares. The registration statement as amended at the time it becomes effective,
including the information (if any) deemed to be part of the registration
statement at the time of effectiveness pursuant to Rule 430A under the
Securities Act of 1933, as amended (the "SECURITIES ACT"), is hereinafter
referred to as the
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"REGISTRATION STATEMENT"; the prospectus in the form first used to confirm sales
of Shares is hereinafter referred to as the "PROSPECTUS." Any reference to the
term Registration Statement, preliminary prospectus or Prospectus shall include
the documents incorporated therein by reference. If the Company has filed an
abbreviated registration statement to register additional shares of Common Stock
pursuant to Rule 462(b) under the Securities Act (the "RULE 462 REGISTRATION
STATEMENT"), then any reference herein to the term "REGISTRATION STATEMENT"
shall be deemed to include such Rule 462 Registration Statement. The terms
"SUPPLEMENT" and "AMENDMENT" or "AMEND" as used in this Agreement shall include
all documents subsequently filed by the Company with the Commission pursuant to
the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), that are
deemed to be incorporated by reference in the Prospectus.
1. Representations and Warranties. The Company represents and
warrants to and agrees with each of the Underwriters that:
(a) The Registration Statement has become effective; no stop
order suspending the effectiveness of the Registration Statement is in
effect, and no proceedings for such purpose are pending before or
threatened by the Commission.
(b) (i) Each document, if any, filed or to be filed pursuant to
the Exchange Act and incorporated by reference in the Prospectus
complied or will comply when so filed in all material respects with the
Exchange Act and the applicable rules and regulations of the Commission
thereunder, (ii) the Registration Statement, when it became effective,
did not contain and, as amended or supplemented, if applicable, will not
contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, (iii) the Registration Statement and
the Prospectus comply and, as amended or supplemented, if applicable,
will comply in all material respects with the Securities Act and the
applicable rules and regulations of the Commission thereunder and (iv)
the Prospectus does not contain and, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading, except that the representations and warranties set forth in
this paragraph do not apply to statements or omissions in the
Registration Statement or the Prospectus based upon information relating
to any Underwriter furnished to the Company in writing by such
Underwriter through you expressly for use therein.
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(c) The Company has been duly incorporated, is validly existing
as a corporation in good standing under the laws of the jurisdiction of
its incorporation, has the corporate power and authority to own its
property and to conduct its business as described in the Prospectus and
is duly qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent
that the failure to be so qualified or be in good standing would not
have a material adverse effect on the Company and its subsidiary, taken
as a whole.
(d) The subsidiary of the Company has been duly incorporated, is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and authority
to own its property and to conduct its business and is duly qualified to
transact business and is in good standing in each jurisdiction in which
the conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to be
so qualified or be in good standing would not have a material adverse
effect on the Company and its subsidiary, taken as a whole; all of the
issued shares of capital stock of the subsidiary of the Company have
been duly and validly authorized and issued, are fully paid and
non-assessable and are owned directly by the Company, free and clear of
all liens, encumbrances, equities or claims.
(e) This Agreement has been duly authorized, executed and
delivered by the Company.
(f) The authorized capital stock of the Company conforms as to
legal matters to the description thereof contained in the Prospectus.
(g) The shares of Common Stock (including the Selling Shareholder
Shares) outstanding prior to the issuance of the Shares to be sold by
the Company have been duly authorized and are validly issued, fully paid
and non-assessable.
(h) The Shares to be sold by the Company have been duly
authorized and, when issued and delivered in accordance with the terms
of this Agreement, will be validly issued, fully paid and
non-assessable, and the issuance of such Shares will not be subject to
any preemptive or similar rights.
(i) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement will
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not contravene any provision of applicable law or the certificate of
incorporation or by-laws of the Company or any agreement or other
instrument binding upon the Company or its subsidiary that is material
to the Company and its subsidiary, taken as a whole, or any judgment,
order or decree of any governmental body, agency or court having
jurisdiction over the Company or its subsidiary, and no consent,
approval, authorization or order of, or qualification with, any
governmental body or agency is required for the performance by the
Company of its obligations under this Agreement, except such as may be
required by the securities or Blue Sky laws of the various states in
connection with the offer and sale of the Shares.
(j) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiary, taken as a whole, from
that set forth in the Prospectus (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement).
(k) There are no legal or governmental proceedings pending or
threatened to which the Company or its subsidiary is a party or to which
any of the properties of the Company or its subsidiary is subject that
are required to be described in the Registration Statement or the
Prospectus and are not so described or any statutes, regulations,
contracts or other documents that are required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits to
the Registration Statement that are not described or filed as required.
(l) Each preliminary prospectus filed as part of the registration
statement as originally filed or as part of any amendment thereto, or
filed pursuant to Rule 424 under the Securities Act, complied when so
filed in all material respects with the Securities Act and the
applicable rules and regulations of the Commission thereunder.
(m) The Company is not, and after giving effect to the offering
and sale of the Shares and the application of the proceeds thereof as
described in the Prospectus will not be, required to register as an
"investment company" as such term is defined in the Investment Company
Act of 1940, as amended.
(n) The Company and its subsidiary (i) are in compliance with any
and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or
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hazardous or toxic substances or wastes, pollutants or contaminants
("ENVIRONMENTAL LAWS"), (ii) have received all permits, licenses or
other approvals required of them under applicable Environmental Laws to
conduct their respective businesses and (iii) are in compliance with all
terms and conditions of any such permit, license or approval, except
where such noncompliance with Environmental Laws, failure to receive
required permits, licenses or other approvals or failure to comply with
the terms and conditions of such permits, licenses or approvals would
not, singly or in the aggregate, have a material adverse effect on the
Company and its subsidiary, taken as a whole.
(o) There are no costs or liabilities associated with
Environmental Laws (including, without limitation, any capital or
operating expenditures required for clean-up, closure of properties or
compliance with Environmental Laws or any permit, license or approval,
any related constraints on operating activities and any potential
liabilities to third parties) which would, singly or in the aggregate,
have a material adverse effect on the Company and its subsidiary, taken
as a whole.
(p) The Company and its subsidiary possess all consents,
approvals, orders, certificates, authorizations and permits issued by,
and have made all declarations and filings with, all appropriate
federal, state or foreign governmental or self-regulatory authorities
and all courts and other tribunals necessary to conduct their respective
businesses and to own, lease, license and use their respective
properties in the manner described in the Prospectus, except to the
extent that the failure to obtain or file would not have a material
adverse effect on the Company and its subsidiary, taken as a whole, and
the Company and its subsidiary have not received any notice of
proceedings relating to the revocation or modification of any such
consent, approval, order, certificate, authorization or permit that,
singly or in the aggregate, if the subject of any unfavorable decision,
ruling or finding, or failure to obtain or file, would have a material
adverse effect on the Company and its subsidiary, taken as a whole,
except as described in the Prospectus.
(q) The Company owns or possesses adequate licenses or other
rights to use all patents, copyrights, trademarks, service marks, trade
names, technology and know-how necessary to conduct its businesses in
the manner described in the Prospectus or could obtain such licenses or
rights on terms that would not have a material adverse effect on the
Company and its subsidiary, taken as a whole, and, except as disclosed
in the Prospectus, the Company has not received any notice of
infringement or conflict with asserted rights of others with respect to
any patents,
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copyrights, trademarks, service marks, trade names, technology or
know-how which could reasonably be expected to result in any material
adverse effect on the Company and its subsidiary, taken as a whole; and,
except as disclosed in the Prospectus, the discoveries, inventions,
products or processes of the Company referred to in the Prospectus do
not, to the best knowledge of the Company, infringe or conflict with any
patent or other intellectual property right of any third party, or any
discovery, invention, product or process that is the object of a patent
application filed by any third party known to the Company, except for
any such infringement or conflict which would not have a material
adverse effect on the Company and its subsidiary, taken as a whole.
(r) There are no contracts, agreements or understandings between
the Company and any person granting such person the right to require the
Company to file a registration statement under the Securities Act with
respect to any securities of the Company or to require the Company to
include such securities with the Shares registered pursuant to the
Registration Statement except as described in the Prospectus, all of
which have been validly waived.
(s) Each agreement or other instrument binding upon the Company
or its subsidiary that is material to the Company and its subsidiary,
taken as a whole, has been filed as an exhibit to the Registration
Statement.
2. Representations and Warranties of the Selling Shareholder. The
Selling Shareholder represents and warrants to and agrees with each of the
Underwriters that:
(a) This Agreement has been duly authorized, executed and
delivered by or on behalf of the Selling Shareholder.
(b) The execution and delivery by the Selling Shareholder of, and
the performance by the Selling Shareholder of his obligations under,
this Agreement, the Custody Agreement signed by the Selling Shareholder
and BankBoston, N.A., as Custodian, relating to the deposit of the
Selling Shareholder Shares (the "CUSTODY AGREEMENT") and the Power of
Attorney appointing certain individuals as the Selling Shareholder's
attorneys-in-fact to the extent set forth therein, relating to the
transactions contemplated hereby and by the Registration Statement (the
"POWER OF ATTORNEY") will not contravene any agreement or other
instrument binding upon the Selling Shareholder or any judgment, order
or decree of any governmental body, agency or court having jurisdiction
over the Selling
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Shareholder, and no consent, approval, authorization or order of, or
qualification with, any governmental body or agency is required for the
performance by the Selling Shareholder of his obligations under this
Agreement or the Custody Agreement or Power of Attorney of the Selling
Shareholder, except such as may be required by the securities or Blue
Sky laws of the various states in connection with the offer and sale of
the Shares.
(c) The Selling Shareholder has, and on the Option Closing Date
will have, valid title to the Selling Shareholder Shares and the legal
right and power, and all authorization and approval required by law, to
enter into this Agreement, the Custody Agreement and the Power of
Attorney and to sell, transfer and deliver the Selling Shareholder
Shares.
(d) The Selling Shareholder Shares are fully paid.
(e) The Custody Agreement and the Power of Attorney have been
duly authorized, executed and delivered by the Selling Shareholder and
is a valid and binding agreement of the Selling Shareholder.
(f) Delivery of the Selling Shareholder Shares pursuant to this
Agreement will pass title to such Shares free and clear of any security
interests, claims, liens, equities and other encumbrances, assuming the
Underwriters have purchased the Selling Shareholder Shares in good faith
and without notice of any adverse claims.
3. Agreements to Sell and Purchase. The Company hereby agrees to sell to
the several Underwriters, and each Underwriter, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agrees, severally and not jointly, to purchase from the
Company the respective numbers of Firm Shares set forth in Schedule I hereto
opposite its name at $______ a share (the "PURCHASE PRICE").
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, each Seller, severally and
not jointly, agrees to sell to the Underwriters the Additional Shares, and the
Underwriters shall have a one-time right to purchase, severally and not jointly,
up to 450,000 Additional Shares at the Purchase Price. If you, on behalf of the
Underwriters, elect to exercise such option, you shall so notify the Company in
writing not later than 30 days after the date of this Agreement, which notice
shall specify the number of Additional Shares to be purchased by the
Underwriters and the date on which such shares are to be purchased. Such date
may be the same as the Closing Date (as defined below) but not earlier than the
Closing Date nor later
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than ten business days after the date of such notice. Additional Shares may be
purchased as provided in Section 5 hereof solely for the purpose of covering
over-allotments made in connection with the offering of the Firm Shares. If any
Additional Shares are to be purchased, each Underwriter agrees, severally and
not jointly, to purchase the number of Additional Shares (subject to such
adjustments to eliminate fractional shares as you may determine) that bears the
same proportion to the total number of Additional Shares to be purchased as the
number of Firm Shares set forth in Schedule I hereto opposite the name of such
Underwriter bears to the total number of Firm Shares. If the Underwriters shall
exercise such option for less than all of the Additional Shares, the
Underwriters shall purchase from each Seller, approximately the same percentage
of shares that each Seller has committed to sell, respectively, as Additional
Shares.
The Company hereby agrees that, without the prior written consent of
Xxxxxx Xxxxxxx & Co. Incorporated on behalf of the Underwriters, it will not,
during the period ending 90 days after the date of the Prospectus, (i) offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any
shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock or (ii) enter into any swap or other arrangement
that transfers to another, in whole or in part, any of the economic consequences
of ownership of the Common Stock, whether any such transaction described in
clause (i) or (ii) above is to be settled by delivery of Common Stock or such
other securities, in cash or otherwise. The foregoing sentence shall not apply
to (A) the Shares to be sold hereunder, (B) the grant by the Company of stock
options and issuances of shares of Common Stock pursuant to the terms of an
employee benefit plan in effect on the date hereof and issuances of shares of
Common Stock pursuant to the exercise of such options or exercise of stock
options outstanding on the date hereof, (C) the issuance by the Company of
shares of Common Stock upon the exercise of a warrant or the conversion of a
security outstanding on the date hereof, (D) the issuance by the Company of
shares of Common Stock to Acqua Wellington North American Equities Fund, Ltd.
("ACQUA WELLINGTON") pursuant to the Common Stock Purchase Agreement between the
Company and Acqua Wellington dated as of January 11, 2000, (E) the issuance by
the Company of shares of Common Stock to American Home Products Corporation in a
private placement concurrent with the Shares to be sold hereunder or (F) the
issuance of a warrant to ARCH Development Corp. pursuant to any settlement
agreement between the Company and ARCH Development Corp.
4. Terms of Public Offering. The Sellers are advised by you that the
Underwriters propose to make a public offering of their respective portions of
the
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Shares as soon after the Registration Statement and this Agreement have become
effective as in your judgment is advisable. The Sellers are further advised by
you that the Shares are to be offered to the public initially at $_____________
a share (the "PUBLIC OFFERING PRICE") and to certain dealers selected by you at
a price that represents a concession not in excess of $______ a share under the
Public Offering Price. No Underwriter may allow, and no dealer may reallow, a
concession to any Underwriter or dealer.
5. Payment and Delivery. Payment for the Firm Shares shall be made to
the Company in Federal or other funds immediately available in New York City
against delivery of such Firm Shares for the respective accounts of the several
Underwriters at 10:00 a.m., New York City time, on ____________, 2000, or at
such other time on the same or such other date, not later than _________, 2000,
as shall be designated in writing by you. The time and date of such payment are
hereinafter referred to as the "CLOSING DATE."
Payment for any Additional Shares to be sold by each Seller shall be
made to such Seller in Federal or other funds immediately available in New York
City against delivery of such Additional Shares for the respective accounts of
the several Underwriters at 10:00 a.m., New York City time, on the date
specified in the notice described in Section 3 or at such other time on the same
or on such other date, in any event not later than _______, 2000 as shall be
designated in writing by you. The time and date of such payment are hereinafter
referred to as the "OPTION CLOSING DATE."
Certificates for the Firm Shares and Additional Shares shall be in
definitive form and registered in such names and in such denominations as you
shall request in writing not later than one full business day prior to the
Closing Date or the Option Closing Date, as the case may be. The certificates
evidencing the Firm Shares and Additional Shares shall be delivered to you on
the Closing Date or the Option Closing Date, as the case may be, for the
respective accounts of the several Underwriters, with any transfer taxes payable
in connection with the transfer of the Shares to the Underwriters duly paid,
against payment of the Purchase Price therefor.
6. Conditions to the Underwriters' Obligations. The obligations of the
Company to sell the Shares to the Underwriters and the several obligations of
the Underwriters to purchase and pay for the Shares on the Closing Date are
subject to the condition that the Registration Statement shall have become
effective not later than 4:30 p.m. (New York City time) on the date hereof.
The several obligations of the Underwriters are subject to the following
further conditions:
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(a) Subsequent to the execution and delivery of this Agreement
and prior to the Closing Date:
(i) there shall not have occurred any downgrading, nor shall
any notice have been given of any intended or potential
downgrading or of any review for a possible change that does not
indicate the direction of the possible change, in the rating
accorded any of the Company's securities by any "nationally
recognized statistical rating organization," as such term is
defined for purposes of Rule 436(g)(2) under the Securities Act;
and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole,
from that set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this
Agreement) that, in your judgment, is material and adverse and
that makes it, in your judgment, impracticable to market the
Shares on the terms and in the manner contemplated in the
Prospectus.
(b) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer
of the Company, to the effect set forth in Section 6(a)(i) above and to
the effect that the representations and warranties of the Company
contained in this Agreement are true and correct as of the Closing Date
and that the Company has complied with all of the agreements and
satisfied all of the conditions on its part to be performed or satisfied
hereunder on or before the Closing Date.
The officer signing and delivering such certificate may rely upon
the best of his or her knowledge as to proceedings threatened.
(c) The Underwriters shall have received on the Closing Date an
opinion of Xxxxxx Godward LLP, outside counsel for the Company, dated
the Closing Date, or the Option Closing Date, as the case may be, to the
effect that:
(i) the Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as
described in the Prospectus and, to such counsel's knowledge, is
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duly qualified to transact business and is in good standing in
each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification,
except to the extent that the failure of the Company to be so
qualified or be in good standing would not have a material
adverse effect on the Company and its subsidiary taken as a
whole;
(ii) the authorized and outstanding capital stock of the
Company is as set forth in the Prospectus on the dates set forth
therein under the caption "Capitalization;" the authorized
capital stock of the Company conforms as to legal matters to the
description thereof contained in the Prospectus under the caption
"Description of Capital Stock";
(iii) the shares of Common Stock (including the Selling
Shareholder Shares) outstanding prior to the issuance of the
Shares to be sold by the Company have been duly authorized and
are validly issued, fully paid and non-assessable;
(iv) the Shares to be sold by the Company have been duly
authorized and, when issued and delivered in accordance with the
terms of this Agreement, will be validly issued, fully paid and
non-assessable, and the issuance of such Shares will not be
subject to any statutory preemptive rights, preemptive rights
under the Company's certificate of incorporation or to such
counsel's knowledge, similar rights;
(v) this Agreement has been duly authorized, executed and
delivered by the Company;
(vi) the execution and delivery by the Company of, and the
performance by the Company of its obligations under, this
Agreement will not contravene any provision of applicable law,
except such as may be required by the securities or Blue Sky laws
of the various states in connection with the offer and sale of
the Shares (as to which such counsel expresses no opinion) or the
certificate of incorporation or by-laws of the Company or, to
such counsel's knowledge, any agreement or other instrument
binding upon the Company or its subsidiary that is material to
the Company and its subsidiary, taken as a whole that has been
filed as an exhibit to the Registration Statement, or, to such
counsel's knowledge, any material judgment, order or decree of
any governmental body, agency or court having jurisdiction over
the Company, and no
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consent, approval, authorization or order of, or qualification
with, any governmental body or agency is required for the
performance by the Company of its obligations under this
Agreement, except such as may be required by the securities or
Blue Sky laws of the various states in connection with the offer
and sale of the Shares (as to which such counsel expresses no
opinion);
(vii) the statements (A) in the Prospectus under the captions
"Description of Capital Stock" and "Underwriters" (insofar as it
relates to this Agreement) and (B) in the Registration Statement
in Items 14 and 15, in each case insofar as such statements
constitute summaries of the legal matters, documents or
proceedings referred to therein, fairly present the information
called for with respect to such legal matters, documents and
proceedings and fairly summarize the matters referred to therein
to the extent required by the Securities Act and applicable rules
and regulations of the Commission thereunder;
(viii) such counsel does not know of any legal or
governmental proceedings pending or threatened to which the
Company or its subsidiary is a party or to which any of the
properties of the Company or its subsidiary is subject that are
required to be described in the Registration Statement or the
Prospectus and are not so described or of any statutes,
regulations, contracts or other documents that are required to be
described in the Registration Statement or the Prospectus or to
be filed as exhibits to the Registration Statement that are not
described or filed as required;
(ix) the Company is not, and after giving effect to the
offering and sale of the Shares and the application of the
proceeds thereof as described in the Prospectus will not be,
required to register as an "investment company" as such term is
defined in the Investment Company Act of 1940, as amended;
(x) such counsel is of the opinion that each document filed
pursuant to the Exchange Act prior to the Closing Date and
incorporated by reference into the Registration Statement and
Prospectus (except for the operating statistics, financial
statements, financial schedules, and other financial data
included therein as which such counsel need not express any
opinion) at the time they were filed complied as to form in all
material respects with the
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requirements of the Exchange Act and the rules and regulations of
the Commission thereunder;
(xi) no consent, approval, authorization or order of or
qualification with any court, government or governmental agency
or body having jurisdiction over the Company, or over any of its
properties or operations is necessary in connection with the
consummation by the Company of the transactions contemplated by
this Agreement, except such as have been obtained under the
Securities Act and the Exchange Act or such as may be required
under state or other securities or Blue Sky laws in connection
with the purchase and the offer and sale of the Shares by the
Underwriters (and such counsel expresses no opinion as to state
securities or Blue Sky laws);
(xii) to such counsel's knowledge, the Company is not
presently (a) in material violation of its charter or bylaws, or
(b) subject to any material order, writ or decree applicable
specifically to the Company of any court or governmental agency
or body having jurisdiction over the Company, or over any of its
properties or operations; and
(xiii) such counsel (A) is of the opinion that the
Registration Statement and Prospectus (except for financial
statements and schedules and other financial and statistical data
included or incorporated by reference therein as to which such
counsel need not express any opinion) comply as to form in all
material respects with the Securities Act and the applicable
rules and regulations of the Commission thereunder, (B) has no
reason to believe that (except for financial statements and
schedules, related notes, and other financial and statistical
data included or incorporated by reference therein as to which
such counsel need not express any belief) the Registration
Statement and the prospectus included therein at the time the
Registration Statement became effective contained any untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading and (C) has no reason to believe that
(except for financial statements and schedules, related notes,
and other financial and statistical data included or incorporated
by reference therein as to which such counsel need not express
any belief) the Prospectus as of its effective date contained, or
as of the Closing Date contains, any untrue statement of a
material fact or omits to state a material fact
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necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
(d) The Underwriters shall have received on the Closing Date an
opinion of Xxxxxx and Xxxxxxx, patent counsel for the Company as to
Section A of the Patent Portfolio, dated the Closing Date, to the effect
that:
(i) to the best of such counsel's knowledge, each of the U.S.
patents and patent applications listed in Section A of the Patent
Portfolio is assigned only to the Company;
(ii) to the best of such counsel's knowledge, except for any
rights that may be reserved to the U.S. government, no other
third party has any rights to the patents and patent applications
listed in Schedule A of the Patent Portfolio;
(iii) to the best of such counsel's knowledge, there are no
material legal or governmental proceedings, pending or
threatened, with respect to any issued United States patent
listed in Section A of the Patent Portfolio;
(iv) to the best of such counsel's knowledge, except as
disclosed in the Prospectus, the Company has not received any
notice with respect to the potential infringement of, conflict
with or proceedings against any patents, trademarks, copyrights,
trade secrets, or proprietary rights, of others;
(v) to the best of such counsel's knowledge, no third parties
are infringing the issued United States patents listed in
Schedule A of the Patent Portfolio;
(vi) although there can be no guarantee that any particular
patent application will issue as a patent, each of the U.S.
patent applications listed in Schedule A of the Patent Portfolio
was properly filed in, and is being diligently prosecuted before,
the United States Patent and Trademark Office;
(vii) although there can be no guarantee that any particular
patent application will issue as a patent, each of the U.S.
patent applications listed in Schedule A of the Patent Portfolio,
from the time we assumed responsibility for the prosecution, is
being diligently prosecuted before the United States Patent and
Trademark Office; and
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(viii) the statements contained (A) in the Registration
Statement and Prospectus under the caption "Business - Legal
Proceedings" and (B) in the Company's Form 10-K for the year
ended December 31, 1999 in Item 3 -- Legal Proceedings, in each
case, with respect to the first paragraph thereunder regarding
proceedings before the European Patent Office, insofar as such
statements constitute matters of law, are a fair and accurate
summary of the matters set forth therein.
(e) The Underwriters shall have received on the Closing Date an
opinion of Xxxxxxxx X'Xxxxx Xxxxxxxx Xxxxxx & Borun, patent counsel for
the Company as to Section B of the Patent Portfolio, dated the Closing
Date, to the effect that:
(i) to the best of such counsel's knowledge, such knowledge
being based upon the files of such firm, except as otherwise
disclosed in the Prospectus, there are no legal or governmental
proceedings relating to patent rights owned, licensed, or used by
the Company pending against the Company or any third parties and,
except for the Company's pending patent applications, to the best
of such counsel's knowledge, there are no legal or governmental
proceedings relating to patent rights owned, licensed or used by
third parties pending against the Company. To the best of such
counsel's knowledge, other than those disclosed in the
Prospectus, no such proceedings are threatened or contemplated by
governmental authorities or others;
(ii) to the best of such counsel's knowledge, such knowledge
being based upon the files of such firm, the Company has no
notice of any infringement by a third party of any patent owned
or used by the Company; and to the best of such counsel's
knowledge, such knowledge being based upon the files of such
firm, the Company has not received notice of any claims of
infringement by the Company of any patent owned or used by a
third party;
(iii) to the best of such counsel's knowledge, such knowledge
being based upon the files of such firm, the Company or one of
its licensors is the sole assignee for each patent and patent
application listed in Section B of the Patent Portfolio. To the
best of such counsel's knowledge, the assignments by the named
inventors have been submitted to the USPTO and those
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assignments have been recorded in the assignment records of the
USPTO. However, in one or more of the patents and patent
applications listed in Section B of the Patent Portfolio, the
United States government may hold a nonexclusive, royalty-free
license as a result of providing research funding;
(iv) to the best of such counsel's knowledge, such knowledge
being based upon the files of such firm, the Company's United
States patent applications listed in Section B of the Patent
Portfolio have been prepared and filed in the USPTO in a form and
with accompanying papers that are acceptable to the USPTO for the
purposes of according each such application a filing date and
serial number, and of placing each such application in condition
for eventual examination on the merits as to patentability. For
each such United States application, except as otherwise noted in
Exhibit B attached to this opinion, an Official Filing Receipt
has been received from the USPTO. As to each of such
applications, such counsel is not aware of any material defect of
form in preparation or filing. However, there is no assurance
that patents will issue from any pending United States
application, or that any claims will be allowed without
amendment. Neither is there any assurance that a patent will
issue without appeal to the Board of Patent Appeals and
Interferences or to the Federal courts;
(v) to the best of such counsel's knowledge, such knowledge
being based upon the files of such firm, each of the Company's
foreign patents and patent applications listed in Section B of
the Patent Portfolio has been submitted to patent firms in the
respective foreign countries with instructions to file the
applications in the patent offices of those countries naming the
Company or one its licensors as applicant and/or owner of record.
The Patent Cooperation Treaty applications have been submitted
directly to the relevant patent examining authority of those
countries naming the Company or one of its licensors as the
applicant and/or owner of record. In each such application,
written confirmation has been received that the application has
been accepted for filing by such patent office, or patent
examining authority. There is no assurance that the patent
offices of the respective countries will not reject the claims of
the foreign patent applications as being unpatentable, or that
any claims will be allowed without amendment, nor is there any
assurance that these patent authorities will ultimately conclude
that the foreign patent applications meet all requirements for
patentability. Such counsel
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is not aware of any material defect of form in preparation or
filing. To the best of such counsel's knowledge, other than two
oppositions filed in the European Patent Office against European
Patent No. 500,917 corresponding to Aviron reference No. 5005- EP
as listed in Section B of the Patent Portfolio, there are no
legal or governmental proceedings relating to any foreign patent
rights or foreign parent applications owned, licensed or used by
the Company pending against the Company or any third party and,
except for prosecution of pending patent applications, to the
best of such counsel's knowledge, there are no legal or
governmental proceedings relating to any foreign patent rights of
foreign patent applications owned, licensed or used by third
parties pending against Aviron. To the best of such counsel's
knowledge, other than otherwise disclosed in the Prospectus, no
such proceedings are threatened or contemplated by governmental
authorities or others; and
(vi) the patent applications in Section B of the Patent
Portfolio are being diligently pursued.
(f) The Underwriters shall have received on the Closing Date an
opinion of the Law Office of XxXxx Xxxxx, outside patent counsel for the
Company, dated the Closing Date, or the Option Closing Date, as the case
may be, to the effect that:
(i) except as disclosed in the Prospectus under the caption
"Risk Factors - We may not receive patent protection for our
potential products and manufacturing processes," to the best of
such counsel's knowledge, the Company has received no notice of
any infringement or misappropriation by a third party of any
patent in Section C of the Patent Portfolio attached hereto as
Exhibit B (the "Patent Portfolio") or notice of any infringement
or misappropriation by the Company of any patents, trade secrets,
trademarks, trade names, copyrights or other proprietary rights
of a third party, other than notices of opposition to the
Company's trademark applications for the xxxx "AVIRON" in Germany
and a notice of potential infringement for such trademark
application in France;
(ii) except as disclosed in the Prospectus under the captions
"Risk Factors - We may not receive patent protection for our
potential products and manufacturing processes" and "Business -
Legal Proceedings," to the best of such counsel's knowledge, the
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Company or its licensor is the sole assignee for each patent and
patent application listed in Section C of the Patent Portfolio.
Except as otherwise noted in Section C of the Patent Portfolio
attached hereto, for each of the United States patents and patent
applications, the assignments by the named inventors have been
submitted to the United States Patent and Trademark Office
("USPTO") and those assignments have been recorded in the Patent
Office's title records. However, in one or more of the patents
and patent applications listed in Section C of the Patent
Portfolio, the United States government may hold a nonexclusive,
royalty free license as a result of providing research funding;
(iii) to such counsel's knowledge, the Company's United
States patent applications listed in Section C of the Patent
Portfolio have been prepared and filed in the USPTO in a form and
with accompanying papers that are acceptable to the USPTO for the
purposes of according each such application a filing date and
serial number, and of placing each such application in condition
for eventual examination on the merits as to patentability. For
each such U.S. application, such counsel is not aware of any
material defect of form in preparation or filing;
(iv) to such counsel's knowledge, except as disclosed in the
Prospectus, as to each of the Company's foreign patent
applications listed in Section C of the Patent Portfolio, the
applications have either (a) except as noted in Section C of the
Patent Portfolio attached hereto, been submitted to patent firms
in the respective foreign countries with instructions to file the
applications in the patent offices of those countries naming the
Company as the applicant of record, or (b) as to certain Patent
Cooperation Treaty applications, been submitted directly to the
relevant receiving office naming the Company as the applicant of
record. To the best of such counsel's knowledge and except as
noted in Section C of the Patent Portfolio, as to each of such
applications, the Company has not received notice from any
foreign filing authority of any material defect of form in
preparation or filing; and
(g) The Underwriters shall have received on the Closing Date an
opinion of Xxxxx Xxxxxxx LLP, outside patent counsel for the Company,
dated the Closing Date or the Option Closing Date, as the case may be,
to the effect that the statements regarding the case entitled "Xxxxx
Xxxx v. The University of Chicago, ARCH Development Corp., Xxxxxxx
Xxxxxxx
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and Aviron Company" (A) in the Prospectus under the Caption "Business --
Legal Proceedings" and (B) in the Company's Form 10-K for the year ended
December 31, 1999 in Item 3 -- Legal Proceedings, in each case, insofar
as such statements constitute summaries of the legal matters, documents
or proceedings referred to therein, fairly present the information
called for with respect to such legal matters, documents and proceedings
and fairly summarize the matters referred to therein.
(h) The Underwriters shall have received on the Closing Date an
opinion of Xxxxxx Xxxxxxx Xxxxxxx, outside U.K. counsel for the Company,
dated the Closing Date or the Option Closing Date, as the case may be,
to the effect that:
(i) the subsidiary of the Company is duly incorporated and
existing as a private limited company registered in England under
company number 3854275 and is authorised pursuant to its
Memorandum of Association to carry on its current business and to
occupy its current premises. The subsidiary of the Company is in
good standing as shown by the Certificate of Good Standing
received from the Registrar of Companies; and
(ii) the authorised share capital of the subsidiary of the
Company of 1000 is (pound)1000 divided into 1000 ordinary shares
of (pound)1 each of which (pound)1 share has been validly issued
in accordance with preemption rights and is fully paid up. Aviron
is the registered owner of the only issued ordinary share of
(pound)1 in the capital of the subsidiary of the Company, free
and clear of all liens, encumbrances, equities or claims.
(i) The Underwriters shall have received on the Option Closing
Date an opinion of Xxxxxx Godward LLP, counsel to the Selling
Shareholder, dated the Option Closing Date to the effect that:
(i) this Agreement has been duly authorized, executed and
delivered by or on behalf of the Selling Shareholder;
(ii) the execution and delivery by the Selling Shareholder
of, and the performance by the Selling Shareholder of its
obligations under, this Agreement and the Custody Agreement and
Powers of Attorney of the Selling Shareholder will not, to the
best of such counsel's knowledge, contravene any judgment, order
or decree of any governmental body, agency or court entered
against the Selling Shareholder, and no consent, approval,
authorization or
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order of, or qualification with, any governmental body or agency
is required for the performance by the Selling Shareholder of its
obligations under this Agreement or the Custody Agreement or
Power of Attorney of the Selling Shareholder, except such as may
be required by the securities or Blue Sky laws of the various
states in connection with offer and sale of the Shares as to
which such counsel need not express an opinion;
(iii) the Selling Shareholder has valid title to the Shares
to be sold by the Selling Shareholder and the legal right and
power, and all authorization and approval required by law, to
enter into this Agreement and the Custody Agreement and Power of
Attorney of the Selling Shareholder and to sell, transfer and
deliver the Selling Shareholder Shares;
(iv) the Custody Agreement and the Power of Attorney of the
Selling Shareholder has been duly authorized, executed and
delivered by the Selling Shareholder and is a valid and binding
agreement of the Selling Shareholder, except as enforceability
might be limited by general equitable principles, bankruptcy
insolvency, reorganization, moratorium or other laws affecting
creditors' rights generally and subject to general equitable
principles and to limitations on availability of equitable
relief, and except as to those provisions relating to indemnity
or contribution as to which such counsel expresses no opinion;
and
(v) delivery of the Selling Shareholder Shares pursuant to
this Agreement will pass title to such Shares free and clear of
any security interests, claims, liens, equities and other
encumbrances, assuming the Underwriters have purchased the
Selling Shareholder Shares in good faith and without notice of
any adverse claims.
(j) The Underwriters shall have received on the Closing Date an
opinion of Xxxxx Xxxx & Xxxxxxxx, counsel for the Underwriters, dated
the Closing Date, covering the matters referred to in Sections 6(c)(v),
6(c)(vii) (but only as to the statements in the Prospectus under
"Description of Capital Stock" and "Underwriters") and 6(c)(xiii) above.
With respect to Section 6(c)(xiii) above, Xxxxxx Godward LLP and
Xxxxx Xxxx & Xxxxxxxx may state that their opinion and belief are based
upon their participation in the preparation of the Registration
Statement and Prospectus and any amendments or supplements thereto
(other than the documents incorporated by reference) and review and
discussion of the
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contents thereof (including the documents incorporated therein by
reference), but are without independent check or verification, except as
specified.
The opinions of Xxxxxx Godward LLP, Xxxxxx and Xxxxxxx, Xxxxxxxx
X'Xxxxx Xxxxxxxx Xxxxxx & Borun, the Law Offices of XxXxx Xxxxx, Xxxxx
Xxxxxxx LLP and Xxxxxx Xxxxxxx Xxxxxxx described in Sections 6(c), 6(d),
6(e), 6(f), 6(g), 6(h), and 6(i) above shall be rendered to the
Underwriters at the request of the Company and shall so state therein.
(k) The Underwriters shall have received, on each of the date
hereof and the Closing Date, a letter dated the date hereof or the
Closing Date, as the case may be, in form and substance satisfactory to
the Underwriters, from Ernst & Young LLP, independent public
accountants, containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters
with respect to the financial statements and certain financial
information contained in the Registration Statement and the Prospectus;
provided that the letter delivered on the Closing Date shall use a
"cut-off date" not earlier than the date hereof.
(l) The "lock-up" agreements, each substantially in the form of
Exhibit A hereto, between you and the officers and directors of the
Company relating to sales and certain other dispositions of shares of
Common Stock or certain other securities, delivered to you on or before
the date hereof, shall be in full force and effect on the Closing Date.
The several obligations of the Underwriters to purchase Additional
Shares hereunder are subject to the delivery to you on the Option Closing Date
of such documents as you may reasonably request with respect to the good
standing of the Company, the due authorization and issuance of the Additional
Shares and other matters related to the issuance of the Additional Shares.
7. Covenants of the Company. In further consideration of the agreements
of the Underwriters herein contained, the Company covenants with each
Underwriter as follows:
(a) To furnish to you, without charge, four signed copies of the
Registration Statement (including exhibits thereto and documents
incorporated therein by reference) and for delivery to each other
Underwriter a conformed copy of the Registration Statement (without
exhibits thereto but including documents incorporated therein by
reference) and to furnish to you in New York City, without charge, prior
to 10:00 a.m. New York City time on the business day next succeeding the
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23
date of this Agreement and during the period mentioned in Section 7(c)
below, as many copies of the Prospectus and any supplements and
amendments thereto or to the Registration Statement as you may
reasonably request.
(b) Before amending or supplementing the Registration Statement
or the Prospectus, to furnish to you a copy of each such proposed
amendment or supplement and not to file any such proposed amendment or
supplement to which you reasonably object, and to file with the
Commission within the applicable period specified in Rule 424(b) under
the Securities Act any prospectus required to be filed pursuant to such
Rule.
(c) If, during such period after the first date of the public
offering of the Shares as in the opinion of counsel for the Underwriters
the Prospectus is required by law to be delivered in connection with
sales by an Underwriter or dealer, any event shall occur or condition
exist as a result of which it is necessary to amend or supplement the
Prospectus in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not
misleading, or if, in the opinion of counsel for the Underwriters, it is
necessary to amend or supplement the Prospectus to comply with
applicable law, forthwith to prepare, file with the Commission and
furnish, at its own expense, to the Underwriters and to the dealers
(whose names and addresses you will furnish to the Company) to which
Shares may have been sold by you on behalf of the Underwriters and to
any other dealers upon request, either amendments or supplements to the
Prospectus so that the statements in the Prospectus as so amended or
supplemented will not, in the light of the circumstances when the
Prospectus is delivered to a purchaser, be misleading or so that the
Prospectus, as amended or supplemented, will comply with law.
(d) To endeavor to qualify the Shares for offer and sale under
the securities or Blue Sky laws of such jurisdictions as you shall
reasonably request.
(e) To make generally available to the Company's security holders
and to you as soon as practicable an earning statement covering the
twelve-month period ending March 31, 2001 that satisfies the provisions
of Section 11(a) of the Securities Act and the rules and regulations of
the Commission thereunder.
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(f) Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, to pay or
cause to be paid all expenses incident to the performance of its
obligations under this Agreement, including: (i) the fees, disbursements
and expenses of the Company's counsel and the Company's accountants and
counsel to the Selling Shareholder in connection with the registration
and delivery of the Shares under the Securities Act and all other fees
or expenses in connection with the preparation and filing of the
Registration Statement, any preliminary prospectus, the Prospectus and
amendments and supplements to any of the foregoing, including all
printing costs associated therewith, and the mailing and delivering of
copies thereof to the Underwriters and dealers, in the quantities
hereinabove specified, (ii) all costs and expenses related to the
transfer and delivery of the Shares to the Underwriters, including any
transfer or other taxes payable thereon, (iii) the cost of printing or
producing any Blue Sky or Legal Investment memorandum in connection with
the offer and sale of the Shares under state securities laws and all
expenses in connection with the qualification of the Shares for offer
and sale under state securities laws as provided in Section 7(d) hereof,
including filing fees and the reasonable fees and disbursements of
counsel for the Underwriters in connection with such qualification and
in connection with the Blue Sky or Legal Investment memorandum, (iv) all
filing fees and the reasonable fees and disbursements of counsel to the
Underwriters incurred in connection with the review and qualification of
the offering of the Shares by the National Association of Securities
Dealers, Inc., (v) all fees and expenses in connection with the
preparation and filing of the registration statement on Form 8-A
relating to the Common Stock and all costs and expenses incident to
listing the Shares on the Nasdaq National Market, (vi) the cost of
printing certificates representing the Shares, (vii) the costs and
charges of any transfer agent, registrar or depositary, (viii) the costs
and expenses of the Company relating to investor presentations on any
"road show" undertaken in connection with the marketing of the offering
of the Shares, including, without limitation, expenses associated with
the production of road show slides and graphics, fees and expenses of
any consultants engaged in connection with the road show presentations
with the prior approval of the Company, travel and lodging expenses of
the representatives and officers of the Company and any such
consultants, and the cost of any aircraft chartered in connection with
the road show, and (ix) all other costs and expenses incident to the
performance of the obligations of the Company hereunder for which
provision is not otherwise made in this Section. It is understood,
however, that except as provided in this Section, Section 8 entitled
"Indemnity and Contribution", and the last paragraph of Section 10
below, the Underwriters will pay all
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25
of their costs and expenses, including fees and disbursements of their
counsel, stock transfer taxes payable on resale of any of the Shares by
them and any advertising expenses connected with any offers they may
make.
The provisions of this Section shall not supersede or otherwise affect
any agreement that the Sellers may otherwise have for the allocation of such
expenses among themselves.
8. Indemnity and Contribution. (a) The Company agrees to indemnify and
hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of either Section 15 of the Securities Act or
Section 20 of the Securities Exchange Act of 1934, as amended (the "EXCHANGE
ACT"), from and against any and all losses, claims, damages and liabilities
(including, without limitation, any legal or other expenses reasonably incurred
in connection with defending or investigating any such action or claim) caused
by any untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement or any amendment thereof, any preliminary
prospectus or the Prospectus (as amended or supplemented if the Company shall
have furnished any amendments or supplements thereto), or caused by any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, except
insofar as such losses, claims, damages or liabilities are caused by any such
untrue statement or omission or alleged untrue statement or omission based upon
information relating to any Underwriter furnished to the Company in writing by
such Underwriter through you expressly for use therein; provided that the
foregoing indemnity agreement with respect to any preliminary prospectus shall
not inure to the benefit of any Underwriter from whom the person asserting any
such losses, claims, damages or liabilities purchased Shares, or any person
controlling such Underwriter, if a copy of the Prospectus (as then amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) was not sent or given by or on behalf of such Underwriter to such
person, if required by law so to have been delivered, at or prior to the written
confirmation of the sale of the Shares to such person, and if the Prospectus (as
so amended or supplemented) would have cured the defect giving rise to such
losses, claims, damages or liabilities, unless such failure is the result of
noncompliance by the Company with Section 7(a) hereof.
(b) The Selling Shareholder agrees to indemnify and hold harmless the
Company, its directors, its officers who sign the Registration Statement and
each person, if any, who controls the Company within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act, and each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of either
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such section, from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred in connection with defending or investigating any such
action or claim) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any amendment thereof,
any preliminary prospectus or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto), or caused
by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
but only with reference to information relating to the Selling Shareholder
furnished in writing by or on behalf of the Selling Shareholder expressly for
use in the Registration Statement, any preliminary prospectus, the Prospectus or
any amendments or supplements thereto; provided that with respect to any amount
due an indemnified person under this paragraph (b), the Selling Shareholder
shall be liable only to the extent of the net proceeds received by the Selling
Shareholder from the sale of the Selling Shareholder shares; and provided
further, that the foregoing indemnity agreement with respect to any preliminary
prospectus shall not inure to the benefit of any Underwriter from whom the
person asserting any such losses, claims, damages or liabilities purchased
Shares, or any person controlling such Underwriter, if a copy of the Prospectus
(as then amended or supplemented if the Company shall have furnished any
amendments or supplements thereto) was not sent or given by or on behalf of such
Underwriter to such person, if required by law so to have been delivered, at or
prior to the written confirmation of the sale of the Shares to such person, and
if the Prospectus (as so amended or supplemented) would have cured the defect
giving rise to such losses, claims, damages or liabilities, unless such failure
is the result of noncompliance by the Company with Section 7(a) hereof.
(c) Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Company, the Selling Shareholder, the directors of the
Company, the officers of the Company who sign the Registration Statement and
each person, if any, who controls the Company within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act from and
against any and all losses, claims, damages and liabilities (including, without
limitation, any legal or other expenses reasonably incurred in connection with
defending or investigating any such action or claim) caused by any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or any amendment thereof, any preliminary prospectus or
the Prospectus (as amended or supplemented if the Company shall have furnished
any amendments or supplements thereto), or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, but only with reference
to information relating to such Underwriter furnished to the Company in writing
by
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such Underwriter through you expressly for use in the Registration Statement,
any preliminary prospectus, the Prospectus or any amendments or supplements
thereto.
(d) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to Section 8(a), 8(b) or 8(c), such person (the "INDEMNIFIED
PARTY") shall promptly notify the person against whom such indemnity may be
sought (the "INDEMNIFYING PARTY") in writing and the indemnifying party, upon
request of the indemnified party, shall retain counsel reasonably satisfactory
to the indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for (i) the fees and expenses of more than one separate firm (in
addition to any local counsel) for all Underwriters and all persons, if any, who
control any Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, (ii) the fees and expenses of
more than one separate firm (in addition to any local counsel) for the Company,
its directors, its officers who sign the Registration Statement and each person,
if any, who controls the Company within the meaning of either such Section and
(iii) the fees and expenses of more than one separate firm (in addition to any
local counsel) for all Selling Shareholders and all persons, if any, who control
any Selling Shareholder within the meaning of either such Section, and that all
such fees and expenses shall be reimbursed as they are incurred. In the case of
any such separate firm for the Underwriters and such control persons of any
Underwriters, such firm shall be designated in writing by Xxxxxx Xxxxxxx & Co.
Incorporated. In the case of any such separate firm for the Company, and such
directors, officers and control persons of the Company, such firm shall be
designated in writing by the Company. In the case of any such separate firm for
the Selling Shareholders and such control persons of any Selling Shareholders,
such firm shall be designated in writing by the persons named as
attorneys-in-fact for the Selling Shareholders under the Powers of Attorney. The
indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final judgment for
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28
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by the second and third
sentences of this paragraph, the indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without its written consent
if (i) such settlement is entered into more than 30 days after receipt by such
indemnifying party of the aforesaid request and (ii) such indemnifying party
shall not have reimbursed the indemnified party in accordance with such request
prior to the date of such settlement. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of any
pending or threatened proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such proceeding.
(e) To the extent the indemnification provided for in Section 8(a), 8(b)
or 8(c) is unavailable to an indemnified party or insufficient in respect of any
losses, claims, damages or liabilities referred to therein, then each
indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the indemnifying party or parties on the one hand and the
indemnified party or parties on the other hand from the offering of the Shares
or (ii) if the allocation provided by clause 8(e)(i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause 8(e)(i) above but also the relative
fault of the indemnifying party or parties on the one hand and of the
indemnified party or parties on the other hand in connection with the statements
or omissions that resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations. The relative benefits
received by each Seller on the one hand and the Underwriters on the other hand
in connection with the offering of the Shares shall be deemed to be in the same
respective proportions as the net proceeds from the offering of the Shares
(before deducting expenses) received by each Seller and the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on the cover of the Prospectus, bear to the aggregate Public
Offering Price of the Shares. The relative fault of the Sellers on the one hand
and the Underwriters on the other hand shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Sellers or by the Underwriters and the parties'
relative intent, knowledge, access to information
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and opportunity to correct or prevent such statement or omission. The
Underwriters' respective obligations to contribute pursuant to this Section 8
are several in proportion to the respective number of Shares they have purchased
hereunder, and not joint.
(f) The Sellers and the Underwriters agree that it would not be just or
equitable if contribution pursuant to this Section 8 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in Section 8(e). The amount paid or payable
by an indemnified party as a result of the losses, claims, damages and
liabilities referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 8, no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the Shares
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages that such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 8 are not exclusive
and shall not limit any rights or remedies which may otherwise be available to
any indemnified party at law or in equity.
(g) The indemnity and contribution provisions contained in this Section 8
and the representations, warranties and other statements of the Company and the
Selling Shareholder contained in this Agreement shall remain operative and in
full force and effect regardless of (i) any termination of this Agreement, (ii)
any investigation made by or on behalf of any Underwriter or any person
controlling any Underwriter, the Selling Shareholder or by or on behalf of the
Company, its officers or directors or any person controlling the Company and
(iii) acceptance of and payment for any of the Shares.
9. Termination. This Agreement shall be subject to termination by notice
given by you to the Company, if (a) after the execution and delivery of this
Agreement and prior to the Closing Date (i) trading generally shall have been
suspended or materially limited on or by, as the case may be, any of the New
York Stock Exchange, the American Stock Exchange, the National Association of
Securities Dealers, Inc., the Chicago Board of Options Exchange, the Chicago
Mercantile Exchange or the Chicago Board of Trade, (ii) trading of any
securities of the Company shall have been suspended on any exchange or in any
29
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over-the-counter market, (iii) a general moratorium on commercial banking
activities in New York shall have been declared by either Federal or New York
State authorities or (iv) there shall have occurred any outbreak or escalation
of hostilities or any change in financial markets or any calamity or crisis
that, in your judgment, is material and adverse and (b) in the case of any of
the events specified in clauses 9(a)(i) through 9(a)(iv), such event, singly or
together with any other such event, makes it, in your judgment, impracticable to
market the Shares on the terms and in the manner contemplated in the Prospectus.
10. Effectiveness; Defaulting Underwriters. This Agreement shall become
effective upon the execution and delivery hereof by the parties hereto.
If, on the Closing Date or the Option Closing Date, as the case may be,
any one or more of the Underwriters shall fail or refuse to purchase Shares that
it has or they have agreed to purchase hereunder on such date, and the aggregate
number of Shares which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase is not more than one-tenth of the aggregate number
of the Shares to be purchased on such date, the other Underwriters shall be
obligated severally in the proportions that the number of Firm Shares set forth
opposite their respective names in Schedule I bears to the aggregate number of
Firm Shares set forth opposite the names of all such non-defaulting
Underwriters, or in such other proportions as you may specify, to purchase the
Shares which such defaulting Underwriter or Underwriters agreed but failed or
refused to purchase on such date; provided that in no event shall the number of
Shares that any Underwriter has agreed to purchase pursuant to this Agreement be
increased pursuant to this Section 10 by an amount in excess of one-ninth of
such number of Shares without the written consent of such Underwriter. If, on
the Closing Date, any Underwriter or Underwriters shall fail or refuse to
purchase Firm Shares and the aggregate number of Firm Shares with respect to
which such default occurs is more than one-tenth of the aggregate number of Firm
Shares to be purchased, and arrangements satisfactory to you and the Company for
the purchase of such Firm Shares are not made within 36 hours after such
default, this Agreement shall terminate without liability on the part of any
non-defaulting Underwriter or the Company. In any such case either you or the
Company shall have the right to postpone the Closing Date, but in no event for
longer than seven days, in order that the required changes, if any, in the
Registration Statement and in the Prospectus or in any other documents or
arrangements may be effected. If, on the Option Closing Date, any Underwriter or
Underwriters shall fail or refuse to purchase Additional Shares and the
aggregate number of Additional Shares with respect to which such default occurs
is more than one-tenth of the aggregate number of Additional Shares to be
purchased, the non-defaulting Underwriters shall have the option to (i)
terminate their obligation hereunder to purchase Additional Shares or (ii)
purchase not less than the number of Additional Shares
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that such non-defaulting Underwriters would have been obligated to purchase in
the absence of such default. Any action taken under this paragraph shall not
relieve any defaulting Underwriter from liability in respect of any default of
such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of any Seller to comply with
the terms or to fulfill any of the conditions of this Agreement, or if for any
reason any Seller shall be unable to perform its obligations under this
Agreement, the Sellers will reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and disbursements of their counsel)
reasonably incurred by such Underwriters in connection with this Agreement or
the offering contemplated hereunder.
11. Counterparts. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
12. Applicable Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.
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13. Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
Very truly yours,
AVIRON
By:
----------------------------------------
Name:
Title:
The Selling Shareholder Named
In Schedule II Hereto
By:
----------------------------------------
Name:
Title: Attorney-in-Fact
Accepted as of the date hereof
XXXXXX XXXXXXX & CO.
INCORPORATED
BEAR, XXXXXXX & CO. INC.
U.S. BANCORP XXXXX XXXXXXX INC.
Acting severally on behalf of themselves and
the several Underwriters named in
Schedule I hereto.
By: Xxxxxx Xxxxxxx & Co. Incorporated
By:
----------------------------------------
Name:
Title:
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33
SCHEDULE I
NUMBER-OF-FIRM-SHARES
UNDERWRITER TO BE PURCHASED
---------------------------------------------------- ---------------------
Xxxxxx Xxxxxxx & Co. Incorporated..................
Bear, Xxxxxxx & Co. Inc............................
U.S. Bancorp Xxxxx Xxxxxxx Inc.....................
[NAMES OF OTHER UNDERWRITERS]......................
--------------------------
Total:..................................... 2,000,000
==========================
34
SCHEDULE II
SELLING SHAREHOLDER
X. Xxxxxxxx Read, M.D.
35
EXHIBIT A
[FORM OF LOCK-UP LETTER]
_____________, 2000
Xxxxxx Xxxxxxx & Co. Incorporated
Bear, Xxxxxxx & Co. Inc.
U.S. Bancorp Xxxxx Xxxxxxx Inc.
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
Dear Sirs and Mesdames:
The undersigned understands that Xxxxxx Xxxxxxx & Co. Incorporated
("XXXXXX XXXXXXX") proposes to enter into an Underwriting Agreement (the
"UNDERWRITING AGREEMENT") with Aviron, a Delaware corporation (the "COMPANY"),
providing for the public offering (the "PUBLIC OFFERING") by the several
Underwriters, including Xxxxxx Xxxxxxx (the "UNDERWRITERS"), of 3,000,000 shares
(the "SHARES") of the common stock, par value $0.001 per share of the Company
(the "COMMON STOCK").
To induce the Underwriters that may participate in the Public Offering
to continue their efforts in connection with the Public Offering, the
undersigned hereby agrees that, without the prior written consent of Xxxxxx
Xxxxxxx on behalf of the Underwriters, it will not, during the period commencing
on the date hereof and ending 90 days after the date of the final prospectus
relating to the Public Offering (the "PROSPECTUS"), (1) offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase, lend, or
otherwise transfer or dispose of, directly or indirectly, any shares of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock or (2) enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of ownership of
the Common Stock, whether any such transaction described in clause (1) or (2)
above is to be settled by delivery of Common Stock or such other securities, in
cash or otherwise. The foregoing sentence shall not apply to (a) the sale of any
Shares to the Underwriters pursuant to the Underwriting Agreement or (b)
transactions relating to shares of Common
36
Stock or other securities acquired in open market transactions after the
completion of the Public Offering. Notwithstanding the foregoing, (i) gifts and
transfers by will or intestacy or (ii) transfers to (A) the undersigned's
members, partners, affiliates or immediate family or (B) a trust, the
beneficiaries of which are the undersigned and/or members of the undersigned's
immediate family, shall not be prohibited by this agreement; provided that (x)
the donee or transferee agrees in writing to be bound by the foregoing in the
same manner as it applies to the undersigned and (y) if the donor or transferor
is a reporting person subject to Section 16(a) of the Securities Exchange Act of
1934 (the "Exchange Act"), any gifts or transfers made in accordance with this
paragraph shall not require such person to, and such person shall not
voluntarily, file a report of such transaction on Form 4 under the Exchange Act.
"Immediate family" shall mean spouse, lineal descendants, father, mother,
brother or sister of the transferor and father, mother, brother or sister of the
transferor's spouse. In addition, the undersigned agrees that, without the prior
written consent of Xxxxxx Xxxxxxx on behalf of the Underwriters, it will not,
during the period commencing on the date hereof and ending 90 days after the
date of the Prospectus, make any demand for or exercise any right with respect
to, the registration of any shares of Common Stock or any security convertible
into or exercisable or exchangeable for Common Stock.
Whether or not the Public Offering actually occurs depends on a number
of factors, including market conditions. Any Public Offering will only be made
pursuant to an Underwriting Agreement, the terms of which are subject to
negotiation between the Company and the Underwriters. This agreement will
terminate if the Underwriting Agreement has not been executed on or before
August 1, 2000 or if the Company notifies you (with the prior written consent of
Xxxxxx Xxxxxxx, such consent not to be unreasonably withheld) that it does not
intend to proceed with the Public Offering.
Very truly yours,
--------------------------------------------
(Name)
--------------------------------------------
(Address)
2
