EXHIBIT 4.13
$100,000,000
AVIRON
5 3/4 % CONVERTIBLE SUBORDINATED NOTES DUE 2005
PURCHASE AGREEMENT
March 24, 1998
March 24, 1998
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
Bear ▇▇▇▇▇▇▇ & Co.
Credit Suisse First Boston Corporation
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC
c/o Morgan ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs and Mesdames:
Aviron, a Delaware corporation (the "COMPANY"), proposes to issue and sell
to the several purchasers named in Schedule I hereto (the "INITIAL PURCHASERS")
$100,000,000 principal amount of its 5 3/4% Convertible Subordinated Notes due
2005 (the "FIRM SECURITIES") to be issued pursuant to the provisions of an
Indenture dated as of March 15, 1998 (the "INDENTURE") between the Company and
Marine Midland Bank, as Trustee (the "TRUSTEE"). The Company also proposes to
issue and sell to the Initial Purchasers not more than an additional $15,000,000
principal amount of its 5 3/4% Convertible Subordinated Notes due 2005 (the
"ADDITIONAL SECURITIES") if and to the extent that you, as Managers of the
offering, shall have determined to exercise, on behalf of the Initial
Purchasers, the right to purchase such 5 3/4% Convertible Subordinated Notes due
2005 granted to the Initial Purchasers in Section 2 hereof. The Firm Securities
and the Additional Securities are hereinafter collectively referred to as the
"SECURITIES." The Securities will be convertible into shares of common stock,
$0.001 par value, of the Company (the "UNDERLYING SECURITIES").
The Securities and the Underlying Securities will be offered without being
registered under the Securities Act of 1933, as amended (the "SECURITIES ACT"),
to qualified institutional buyers in compliance with the exemption from
registration provided by Rule 144A under the Securities Act and to institutional
accredited investors (as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act) that deliver a letter in the form annexed to the Final
Memorandum (as defined below).
The Initial Purchasers and their direct and indirect transferees will be
entitled to the benefits of a Registration Rights Agreement dated the date
hereof between the Company and the Initial Purchasers (the "REGISTRATION RIGHTS
AGREEMENT").
In connection with the sale of the Securities, the Company has prepared a
preliminary offering memorandum (the "PRELIMINARY MEMORANDUM") and will prepare
a final offering memorandum (the "FINAL MEMORANDUM" and, with the Preliminary
Memorandum, each a "MEMORANDUM") including or incorporating by reference a
description of the terms of the Securities and the Underlying Securities, the
terms of the offering and a description of the Company. As used herein, the
term "Memorandum" shall include in each case the documents incorporated by
reference therein. The terms "SUPPLEMENT", "AMENDMENT" and "AMEND" as used
herein with respect to a
Memorandum shall include all documents deemed to be incorporated by reference in
the Preliminary Memorandum or Final Memorandum that are filed subsequent to the
date of such Memorandum with the Securities and Exchange Commission (the
"COMMISSION") pursuant to the Securities Exchange Act of 1934, as amended (the
"EXCHANGE ACT").
1. Representations and Warranties. The Company represents and warrants
to, and agrees with, you that:
(a) (i) Each document, if any, filed or to be filed pursuant to the
Exchange Act and incorporated by reference in either Memorandum complied or will
comply when so filed in all material respects with the Exchange Act and the
applicable rules and regulations of the Commission thereunder and (ii) the
Preliminary Memorandum does not contain and the Final Memorandum, in the form
used by the Initial Purchasers to confirm sales and on the Closing Date (as
defined in Section 4), will not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading,
except that the representations and warranties set forth in this paragraph do
not apply to statements or omissions in either Memorandum based upon information
relating to any Initial Purchaser furnished to the Company in writing by such
Initial Purchaser through you expressly for use therein.
(b) The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its property and to
conduct its business as described in each Memorandum and is duly qualified to
transact business and is in good standing in each jurisdiction in which the
conduct of its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or be in
good standing would not have a material adverse effect on the Company.
(c) The Company does not own or control, directly or indirectly, any
corporation, association or other entity.
(d) The Company does not own any real properties. The Company has good
and marketable title to all personal property owned by it, in all such cases
free and clear of all liens, encumbrances and defects except such as are
described in the Final Memorandum or such as do not materially affect the value
of such property and do not interfere with the use made and proposed to be made
of such property by the Company, and any real property and buildings held under
lease by the Company are held by it under valid, subsisting and enforceable
leases except with such exceptions as are not material and do not interfere with
the current and proposed use of such property and buildings by the Company, in
all such cases except as described in or contemplated by the Final Memorandum.
(e) This Agreement has been duly authorized, executed and delivered
by the Company.
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(f) The authorized capital stock of the Company conforms as to legal
matters to the description thereof contained in the Final Memorandum.
(g) The shares of common stock outstanding on the date hereof have
been duly authorized and are validly issued, fully paid and non-assessable.
(h) The Securities have been duly authorized and, when executed and
authenticated in accordance with the provisions of the Indenture and delivered
to and paid for by the Initial Purchasers in accordance with the terms of this
Agreement, will be valid and binding obligations of the Company, enforceable in
accordance with their terms, subject to applicable bankruptcy, insolvency or
similar laws affecting creditors' rights generally and general principles of
equity, and will be entitled to the benefits of the Indenture and the
Registration Rights Agreement.
(i) The Underlying Securities reserved for issuance upon conversion of
the Securities have been duly authorized and reserved and, when issued upon
conversion of the Securities in accordance with the terms of the Securities,
will be validly issued, fully paid and non-assessable, and the issuance of the
Underlying Securities will not be subject to any preemptive or similar rights.
(j) Each of the Indenture and the Registration Rights Agreement has
been duly authorized, executed and delivered by, and is a valid and binding
agreement of, the Company, enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency or similar laws affecting creditors' rights
generally and general principles of equity and except as rights to
indemnification and contribution under the Registration Rights Agreement may be
limited under applicable law.
(k) The execution and delivery by the Company of, and the performance
by the Company of its obligations under, this Agreement, the Indenture, the
Registration Rights Agreement and the Securities will not contravene any
provision of applicable law or the certificate of incorporation or by-laws of
the Company or any contract, agreement, instrument, lease or license or other
instrument binding upon the Company, or any judgment, order or decree of any
governmental body, agency or court having jurisdiction over the Company, and no
consent, approval, authorization or order of, or qualification with, any
governmental body or agency is required for the performance by the Company of
its obligations under this Agreement, the Indenture the Registration Rights
Agreement or the Securities, except such as may be required by the securities or
Blue Sky laws of the various states in connection with the offer and sale of the
Securities and by Federal and state securities laws with respect to the
Company's obligations under the Registration Rights Agreement.
(l) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the condition,
financial or otherwise, or in the earnings, business or operations of the
Company, from that set forth in the Final Memorandum.
(m) There are no legal or governmental proceedings pending or
threatened to which the Company is a party or to which any of the properties of
the Company is subject other than
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proceedings accurately described in all material respects in each Memorandum and
proceedings that would not have a material adverse effect on the Company, or on
the power or ability of the Company to perform its obligations under this
Agreement, the Indenture the Registration Rights Agreement or the Securities or
to consummate the transactions contemplated by the Final Memorandum.
(n) The Company (i) is in compliance with any and all applicable
foreign, federal, state and local laws and regulations relating to the
protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants ("ENVIRONMENTAL LAWS"), (ii)
has received all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective businesses and (iii)
is in compliance with all terms and conditions of any such permit, license or
approval, except where such noncompliance with Environmental Laws, failure to
receive required permits, licenses or other approvals or failure to comply with
the terms and conditions of such permits, licenses or approvals would not,
singly or in the aggregate, have a material adverse effect on the Company.
(o) The Company is not, and after giving effect to the offering and
sale of the Securities and the application of the proceeds thereof as described
in the Final Memorandum, will not be an "investment company" as such term is
defined in the Investment Company Act of 1940, as amended.
(p) Neither the Company nor any affiliate (as defined in Rule 501(b)
of Regulation D under the Securities Act, an "AFFILIATE") of the Company has
directly, or through any agent, (i) sold, offered for sale, solicited offers to
buy or otherwise negotiated in respect of, any security (as defined in the
Securities Act) which is or will be integrated with the sale of the Securities
in a manner that would require the registration under the Securities Act of the
Securities or (ii) engaged in any form of general solicitation or general
advertising in connection with the offering of the Securities, (as those terms
are used in Regulation D under the Securities Act) or in any manner involving a
public offering within the meaning of Section 4(2) of the Securities Act.
(q) It is not necessary in connection with the offer, sale and
delivery of the Securities to the Initial Purchasers in the manner contemplated
by this Agreement to register the Securities under the Securities Act or to
qualify the Indenture under the Trust Indenture Act of 1939, as amended.
(r) The Securities satisfy the requirements set forth in Rule
144A(d)(3) under the Securities Act.
(s) The Company possesses 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 its business and to own, lease, license and use its
properties in the manner described in the Final Memorandum, except to the extent
that the failure to obtain or file would not have a material adverse effect, and
the Company has not received any notice of proceedings relating to the
revocation or modification of any such consent, approval, order, certificate,
authorization or
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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, except as described in the Final Memorandum.
(t) The Company maintains systems of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are executed in
accordance with management's general or specific authorizations; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain asset accountability; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded assets are compared with the existing assets at reasonable intervals
and appropriate action is taken with respect to any differences.
(u) 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
Final Memorandum or could obtain such licenses or rights on terms that would not
have a material adverse effect on the Company and, except as disclosed in the
Memorandum, the Company has not received any notice of infringement or conflict
with asserted rights of others with respect to any patents, copyrights,
trademarks, service marks, trade names, technology or know-how which could
reasonably be expected to result in any material adverse effect; and, except as
disclosed in the Final Memorandum, the discoveries, inventions, products or
processes of the Company referred to in the Final Memorandum 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.
(v) Since December 31, 1997, (i) the Company has not incurred any
material liability or obligation, direct or contingent, nor entered into any
material transaction not in the ordinary course of business; (ii) the Company
has not purchased any of its outstanding capital stock, nor declared, paid or
otherwise made any dividend or distribution of any kind on its capital stock
other than ordinary and customary dividends (other than the repurchase of
530,831 shares of common stock from Sang-A Pharm. Co., Inc. described in the
Final Memorandum); and (iii) there has not been any material change in the
capital stock, short-term debt or long-term debt of the Company, except in each
case as described in or contemplated by the Final Memorandum.
(w) Neither the Company, nor to the Company's knowledge, any other
party thereto, is in violation or breach of, or in default with respect to, any
provision of any contract, agreement, instrument, lease or license to which the
Company is a party, in any respect that could have a material adverse effect on
the Company, and each such contract, agreement, instrument, lease or license is
in full force and effect and is the legal, valid and binding obligation of the
Company, and, to the Company's knowledge, other principal parties thereto. The
Company enjoys peaceful and undisturbed possession under all leases and licenses
under which they operate except as would
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not have a material adverse effect on the Company. The Company is not in
violation or breach of, or in default with respect to, any term of its
certificate of incorporation or bylaws.
(x) The Company has timely filed all necessary federal, state and
foreign income and franchise tax returns and have paid all taxes shown thereon
as due (except for any failure to so file or so pay which would not have a
material adverse effect on the Company), and there is no tax deficiency that has
been or, to the Company's knowledge, might be asserted against the Company that
would have a material adverse effect on the Company; and all tax liabilities are
adequately provided for on the books of the Company.
(y) Since the date of the Preliminary Memorandum, to the Company's
knowledge after due inquiry, no executive officer or director of the Company has
sold, contracted to sell or otherwise transferred or agreed to transfer the
economic consequences or ownership of any shares of common stock of the Company
or any securities convertible into or exchangeable or exercisable for or any
rights to purchase or acquire common stock of the Company.
(z) No labor dispute with employees of the Company exists or, to the
knowledge of the Company, is imminent that could result in a material adverse
effect on the Company, and the Company is not aware of any existing, threatened
or imminent labor disturbance by the employees of any of its principal
suppliers, manufacturers or contractors that could result in any material
adverse effect on the Company.
(aa) The Company is insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are prudent
and customary in the businesses in which they are engaged; the Company has not
been refused any insurance coverage sought or applied for; and the Company does
not have any reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its business at a
cost that would not have an material adverse effect on the Company, except as
described in or contemplated by the Final Memorandum.
(bb) Ernst & Young LLP, which has examined the financial statements of
the Company, together with the related schedules and notes, as of December 31,
1997, 1996 and 1995 and for each of the years in the three (3) years ended
December 31, 1997, which are included in the Final Memorandum, are independent
accountants within the meaning of the Act and the Rules and Regulations; the
audited financial statements of the Company, together with the related schedules
and notes forming part of the Final Memorandum, fairly present the financial
position and the results of operations of the Company at the respective dates
and for the respective periods to which they apply; and all audited financial
statements of the Company, together with the related schedules and notes
included as part of the Final Memorandum, have been prepared in accordance with
generally accepted accounting principles consistently applied throughout the
periods involved except as may be otherwise stated therein. The selected and
summary financial and statistical data included in the Final Memorandum present
fairly the information shown therein and have been compiled on a basis
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consistent with the audited financial statements presented therein. No other
financial statements or schedules are required to be included in the Final
Memorandum.
(cc) The Company has not distributed and will not distribute prior to
the later of (i) the Closing Date, or the Option Closing Date, as the case may
be, and (ii) completion of the distribution of the Securities, any offering
material in connection with the offering and sale of the Securities other than
any Memorandum and other materials, if any, permitted by the Act.
(dd) The Company has not at any time during the last five (5) years
(i) made any unlawful contribution to any candidate for foreign office or failed
to disclose fully any contribution in violation of law, or (ii) made any payment
to any federal or state governmental officer or official, or other person
charged with similar public or quasi-public duties, other than payments required
or permitted by the laws of the United States or any jurisdiction thereof.
(ee) The Company has not taken and will not take, directly or
indirectly, any action designed to or that might reasonably be expected to cause
or result in stabilization or manipulation of the price of the Securities or the
Underlying Securities to facilitate the sale or resale of the Securities.
2. Agreements to Sell and Purchase. The Company hereby agrees to sell to
the several Initial Purchasers, and each Initial Purchaser, upon the basis of
the representations and warranties herein contained, but subject to the
conditions hereinafter stated, agrees, severally and not jointly, to purchase
from the Company the respective principal amount of Firm Securities set forth in
Schedule I hereto opposite its name at a purchase price of 96.5% of the
principal amount thereof (the "PURCHASE PRICE").
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company agrees to sell
to the Initial Purchasers the Additional Securities, and the Initial Purchasers
shall have a one-time right to purchase, severally and not jointly, up to
$15,000,000 principal amount of Additional Securities at the Purchase Price plus
accrued interest, if any, to the date of payment and delivery. If you, on
behalf of the Initial Purchasers, 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 principal amount of Additional
Securities to be purchased by the Initial Purchasers and the date on which such
Additional Securities are to be purchased. Such date may be the same as the
Closing Date but not earlier than the Closing Date nor later than ten business
days after the date of such notice. Additional Securities may be purchased as
provided in Section 4 solely for the purpose of covering over-allotments made in
connection with the offering of the Firm Securities. If any Additional
Securities are to be purchased, each Initial Purchaser agrees, severally and not
jointly, to purchase the principal amount of Additional Securities (subject to
such adjustments to eliminate fractional Securities as you may determine) that
bears the same proportion to the total principal amount of Additional Securities
to be purchased as the principal amount of Firm Securities set forth Schedule I
opposite the name of such Initial Purchaser bears to the total principal amount
of Firm Securities.
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The Company hereby agrees that, without the prior written consent of ▇▇▇▇▇▇
▇▇▇▇▇▇▇ & Co. Incorporated on behalf of the Initial Purchasers, it will not,
during the period ending 180 days after the date of the Final Memorandum, (i)
offer, pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any
shares of common stock or any securities convertible into or exercisable or
exchangeable for common stock or (ii) enter into any swap or other arrangement
that transfers to another, in whole or in part, any of the economic consequences
of ownership of the common stock, whether any such transaction described in
clause (i) or (ii) above is to be settled by delivery of common stock or such
other securities, in cash or otherwise. The foregoing sentence shall not apply
to (A) the sale of the Securities under this Agreement, (B) the issuance by the
Company of any shares of common stock upon the exercise of an option or warrant
or the conversion of a security outstanding on the date hereof of which the
Initial Purchasers have been advised in writing or (C) the issuance by the
Company of any shares of common stock or options to purchase common stock under
the 1996 Equity Incentive Plan, the Nonemployee Directors' Plan or the Employee
Stock Purchase Plan.
3. Terms of Offering. You have advised the Company that the Initial
Purchasers will make an offering of the Securities purchased by the Initial
Purchasers hereunder on the terms to be set forth in the Final Memorandum, as
soon as practicable after this Agreement is entered into as in your judgment is
advisable.
4. Payment and Delivery. Payment for the Firm Securities shall be made
to the Company in Federal or other funds immediately available in New York City
against delivery of such Firm Securities for the respective accounts of the
several Initial Purchasers at 10:00 a.m., New York City time, on March 30, 1998,
or at such other time on the same or such other date, not later than March 30,
1998, as shall be designated in writing by you. The time and date of such
payment are hereinafter referred to as the "CLOSING DATE."
Payment for any Additional Securities shall be made to the Company in
Federal or other funds immediately available in New York City against delivery
of such Additional Securities for the respective accounts of the several Initial
Purchasers at 10:00 a.m., New York City time, on the date specified in the
notice described in Section 2 or at such other time on the same or on such other
date, in any event not later than April 30, 1998, 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 Securities and Additional Securities shall be in
definitive form or global form, as specified by you, and registered in such
names and in such denominations as you shall request in writing not later than
one full business day prior to the Closing Date or the Option Closing Date, as
the case may be. The certificates evidencing the Firm Securities and Additional
Securities shall be delivered to you on the Closing Date or the Option Closing
Date, as the case may be, for the respective accounts of the several Initial
Purchasers, with any transfer taxes payable in connection with the transfer of
the Securities to the Initial Purchasers duly paid, against payment of the
Purchase Price therefor plus accrued interest, if any, to the date of payment
and delivery.
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5. Conditions to the Initial Purchasers' Obligations. The several
obligations of the Initial Purchasers to purchase and pay for the Firm
Securities on the Closing Date are subject to the following conditions:
(a) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date:
(i) there shall not have occurred any downgrading, nor shall any
notice have been given of any intended or potential downgrading or of any review
for a possible change that does not indicate the direction of the possible
change, in the rating accorded any of the Company's securities or in the rating
outlook for the Company by any "nationally recognized statistical rating
organization," as such term is defined for purposes of Rule 436(g)(2) under the
Securities Act.
(ii) there shall not have occurred any change, or any development
involving a prospective change, in the condition, financial or otherwise, or in
the earnings, business or operations of the Company from that set forth in the
Final Memorandum (exclusive of any amendments or supplements thereto subsequent
to the date of this Agreement) that, in your judgment, is material and adverse
and that makes it, in your judgment, impracticable to market the Securities on
the terms and in the manner contemplated in the Final Memorandum.
(b) The Initial Purchasers 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 5(a)(i) 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 Initial Purchasers shall have received on the Closing Date an
opinion of ▇▇▇▇▇▇ Godward LLP, outside counsel for the Company, dated the
Closing Date, to the effect set forth in Exhibit A. Such opinion shall be
rendered to the Initial Purchasers at the request of the Company and shall so
state therein.
(d) The Initial Purchasers shall have received on the Closing Date an
opinion of ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇, patent counsel for the Company as to Section A of
the Patent portfolio, dated the Closing Date to the effect set forth in Exhibit
B. Such opinion shall be rendered to the Initial Purchasers at the request of
the Company and shall so state therein.
(e) The Initial Purchasers shall have received on the Closing Date an
opinion of ▇▇▇▇▇▇▇▇ ▇'▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & Borun, patent counsel for the
Company as to Section B of the Patent folio, dated the Closing Date to the
effect set forth in Exhibit C. Such opinion shall be rendered to the Initial
Purchasers at the request of the Company and shall so state therein.
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(f) The Initial Purchasers shall have received on the Closing Date an
opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, Professional Corporation, counsel
for the Initial Purchasers, dated the Closing Date, to the effect set forth in
Exhibit D.
(g) The Initial Purchasers 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 Initial
Purchasers, 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 or incorporated by reference into
each Memorandum; provided that the letter delivered on the Closing Date shall
use a "cut-off date" not earlier than the date hereof.
(h) The Lock-up Agreements (as defined below) of each officer and
director of the Company, a certain beneficial owner of an aggregate of 530,831
shares of the Company's outstanding shares of capital stock as of the date of
this Agreement ("Sang-A") and a certain beneficial owner of an aggregate of
2,655,280 shares of the Company's outstanding shares of capital stock as of the
date of this Agreement shall be in full force and effect as of the Closing Date
such that, without the prior written consent of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co.
Incorporated on behalf of the Initial Purchasers, it will not, during the period
commencing on the date hereof and ending 90 days after the date of the Final
Memorandum, (1) offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase, lend, or otherwise transfer or dispose of,
directly or indirectly, any shares of common stock or any securities convertible
into or exercisable or exchangeable for common stock or (2) enter into any swap
or other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of the common stock, whether any such
transaction described in clause (1) or (2) above is to be settled by delivery of
common stock or such other securities, in cash or otherwise. The foregoing
sentence shall not apply to transactions relating to shares of common stock or
other securities acquired in open market transactions after the completion of
the Offering. In addition, the Lock-up Agreements shall also provide that,
without the prior written consent of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated on behalf
of the Initial Purchasers, each such officer, director and beneficial owner will
not, during the period commencing on the date hereof and ending 90 days after
the date of the Final Memorandum, make any demand for or exercise any right with
respect to, the registration of any shares of common stock or any security
convertible into or exercisable or exchangeable for common stock. With respect
to the Lock-up Agreement with Sang-A, such Lock-up Agreement shall terminate
upon the later to occur of (i) March 31, 1998, and (ii) the Closing Date. The
Company has provided to counsel for the Underwriters a complete and accurate
list of all securityholders of the Company and the number and type of securities
held by each securityholder. The Company has provided to counsel for the
Underwriters true, accurate and complete copies of all of the agreements
pursuant to which its officers, directors and stockholders have agreed to such
or similar restrictions (the "Lock-up Agreements") presently in effect or
effected hereby.
(i) The Initial Purchasers shall have received on the Closing Date an
opinion of ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇▇▇ LLP, special New York counsel for the
Company, dated the Closing
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Date, to the effect set forth in Exhibit E. Such opinion shall be rendered to
the Initial Purchasers at the request of the Company and shall so state therein.
The Company shall have furnished to you such further certificates and
documents as you shall reasonably request (including certificates on behalf of
the Company by officers of the Company), as to the accuracy of the
representations and warranties of the Company herein, as to the performance by
the Company of its obligations hereunder and as to the other conditions
concurrent and precedent to the obligations of the Initial Purchasers hereunder.
The several obligations of the Initial Purchasers to purchase Additional
Securities hereunder are subject to the delivery to you on the Option Closing
Date of such documents as you may reasonably request with respect to the good
standing of the Company, the due authorization, execution and authentication and
issuance of the Additional Securities and other matters related to the execution
and authentication and issuance of the Additional Securities.
6. Covenants of the Company. In further consideration of the agreements
of the Initial Purchasers contained in this Agreement, the Company covenants
with each Initial Purchaser as follows:
(a) To furnish to you in New York City, without charge, prior to 10:00
a.m. New York City time on the business day next succeeding the date of this
Agreement and during the period mentioned in Section 6(c), as many copies of the
Final Memorandum, any documents incorporated by reference therein and any
supplements and amendments thereto as you may reasonably request.
(b) Before amending or supplementing either Memorandum, to furnish to
you a copy of each such proposed amendment or supplement and not to use any such
proposed amendment or supplement to which you reasonably object.
(c) If, during such period after the date hereof and prior to the date
on which all of the Securities shall have been sold by the Initial Purchasers,
any event shall occur or condition exist as a result of which it is necessary to
amend or supplement the Final Memorandum in order to make the statements
therein, in the light of the circumstances when the Final Memorandum is
delivered to a purchaser, not misleading, or if, in the opinion of counsel for
the Initial Purchasers, it is necessary to amend or supplement the Final
Memorandum to comply with applicable law, forthwith to prepare and furnish, at
its own expense, to the Initial Purchasers, either amendments or supplements to
the Final Memorandum so that the statements in the Final Memorandum as so
amended or supplemented will not, in the light of the circumstances when the
Final Memorandum is delivered to a purchaser, be misleading or so that the Final
Memorandum, as amended or supplemented, will comply with applicable law.
(d) To endeavor to qualify the Securities for offer and sale under the
securities or Blue Sky laws of such jurisdictions as you shall reasonably
request.
11
(e) Whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, to pay or cause to be paid all
expenses incident to the performance of its obligations under this Agreement,
including: (i) the fees, disbursements and expenses of the Company's counsel
and the Company's accountants in connection with the issuance and sale of the
Securities and all other fees or expenses in connection with the preparation of
each Memorandum and all amendments and supplements thereto, including all
printing costs associated therewith, and the delivering of copies thereof to the
Initial Purchasers, in the quantities herein above specified, (ii) all costs and
expenses related to the transfer and delivery of the Securities to the Initial
Purchasers, including any transfer or other taxes payable thereon, (iii) the
cost of printing or producing any Blue Sky or legal investment memorandum in
connection with the offer and sale of the Securities under state securities laws
and all expenses in connection with the qualification of the Securities for
offer and sale under state securities laws as provided in Section 6(d) hereof,
including filing fees and the reasonable fees and disbursements of counsel for
the Initial Purchasers in connection with such qualification and in connection
with the Blue Sky or legal investment memorandum, (iv) any fees charged by
rating agencies for the rating of the Securities, (v) all document production
charges and expenses of counsel to the Initial Purchasers (but not including
their fees for professional services) in connection with the preparation of this
Agreement, (vi) the fees and expenses, if any, incurred in connection with the
admission of the Securities for trading in Portal or any appropriate market
system, (vii) the costs and charges of the Trustee and any transfer agent,
registrar or depositary, (viii) the cost of the preparation, issuance and
delivery of the Securities, (ix) the costs and expenses of the Company relating
to investor presentations on any "road show" undertaken in connection with the
marketing of the offering of the Securities, including, without limitation,
expenses associated with the production of road show slides and graphics, fees
and expenses of any consultants engaged in connection with the road show
presentations with the prior approval of the Company, 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 (x) all other cost and expenses incident to the performance of the
obligations of the Company hereunder for which provision is not otherwise made
in this Section. It is understood, however, that except as provided in this
Section, Section 8, and the last paragraph of Section 10, the Initial Purchasers
will pay all of their costs and expenses, including fees and disbursements of
their counsel, transfer taxes payable on resale of any of the Securities by them
and any advertising expenses connected with any offers they may make.
(f) Neither the Company nor any Affiliate will sell, offer for sale or
solicit offers to buy or otherwise negotiate in respect of any security (as
defined in the Securities Act) which could be integrated with the sale of the
Securities in a manner which would require the registration under the Securities
Act of the Securities.
(g) Not to solicit any offer to buy or offer or sell the Securities or
the Underlying Securities by means of any form of general solicitation or
general advertising (as those terms are used in Regulation D under the
Securities Act) or in any manner involving a public offering within the meaning
of Section 4(2) of the Securities Act.
12
(h) While any of the Securities or the Underlying Securities remain
"restricted securities" within the meaning of the Securities Act, to make
available, upon request, to any seller of such Securities the information
specified in Rule 144A(d)(4) under the Securities Act, unless the Company is
then subject to Section 13 or 15(d) of the Exchange Act.
(i) If requested by you, to use its best efforts to permit the
Securities to be designated Portal securities in accordance with the rules and
regulations adopted by the National Association of Securities Dealers, Inc.
relating to trading in The Portal Market.
(j) During the period of two years after the Closing Date or the
Option Closing Date, if later, the Company will not, and will not permit any of
its affiliates (as defined in Rule 144A under the Securities Act) to resell any
of the Securities or the Underlying Securities which constitute "restricted
securities" under Rule 144A that have been reacquired by any of them.
(k) The Company will not release any of its officers, directors or
other stockholders from any Lock-up Agreements currently existing or hereafter
effected without the prior written consent of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated.
7. Offering of Securities; Restrictions on Transfer.
(a) Each Initial Purchaser, severally and not jointly, represents and
warrants that such Initial Purchaser is a qualified institutional buyer as
defined in Rule 144A under the Securities Act (a "QIB"). Each Initial
Purchaser, severally and not jointly, agrees with the Company that (i) it will
not solicit offers for, or offer or sell, such Securities by any form of general
solicitation or general advertising (as those terms are used in Regulation D
under the Securities Act) or in any manner involving a public offering within
the meaning of Section 4(2) of the Securities Act and (ii) it will solicit
offers for such Securities only from, and will offer such Securities only to,
persons that it reasonably believes to be, (1) QIBs or (2) other institutional
accredited investors (as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act ("INSTITUTIONAL ACCREDITED INVESTORS")) that, prior to their
purchase of the Securities, deliver to such Initial Purchaser a letter
containing the representations and agreements set forth in Appendix A to the
Memorandum that, in each case, in purchasing such Securities are deemed to have
represented and agreed as provided in the Memorandum under the caption "Transfer
Restrictions".
(b) Each Initial Purchaser, severally and not jointly, represents,
warrants, and agrees that:
(i) such Initial Purchaser understands that no action has been or
will be taken in any jurisdiction by the Company that would permit a public
offering of the Securities, or possession or distribution of either Memorandum
or any other offering or publicity material relating to the Securities, in any
country or jurisdiction where action for that purpose is required;
13
(ii) such Initial Purchaser will comply with all applicable laws
and regulations in each jurisdiction in which it acquires, offers, sells or
delivers Securities or has in its possession or distributes either Memorandum or
any such other material, in all cases at its own expense;
(iii) the Securities have not been registered under the Securities
Act and may not be offered or sold except in accordance with Rule 144A under the
Securities Act or pursuant to another exemption from the registration
requirements of the Securities Act;
(iv) such Initial Purchaser has (A) not offered or sold and, prior
to the date six months after the Closing Date, will not offer or sell any
Securities to persons in the United Kingdom except to persons whose ordinary
activities involve them in acquiring, holding, managing or disposing of
investments (as principal or agent) for the purposes of their businesses or
otherwise in circumstances which have not resulted and will not result in an
offer to the public in the United Kingdom within the meaning of the Public
Offers of Securities Regulations 1995; (B) complied and will comply with all
applicable provisions of the Financial Services ▇▇▇ ▇▇▇▇ with respect to
anything done by it in relation to the Securities in, from or otherwise
involving the United Kingdom, and (C) only issued or passed on and will only
issue or pass on in the United Kingdom any document received by it in connection
with the issue of the Securities to a person who is of a kind described in
Article II(3) of the Financial Services ▇▇▇ ▇▇▇▇ (Investment Advertisements)
(Exemptions) Order 1996 or is a person to whom such document may otherwise
lawfully be issued or passed on; and
(v) such Initial Purchaser understands that the Securities have
not been and will not be registered under the Securities and Exchange Law of
Japan, and represents that it has not offered or sold, and agrees not to offer
or sell, directly or indirectly, any Securities in Japan or for the account of
any resident thereof except pursuant to any exemption from the registration
requirements of the Securities and Exchange Law of Japan and otherwise in
compliance with applicable provisions of Japanese law.
8. Indemnity and Contribution.
(a) The Company agrees to indemnify and hold harmless each Initial
Purchaser and each person, if any, who controls any Initial Purchaser within the
meaning of either Section 15 of the Securities Act or Section 20 of the Exchange
Act from and against any and all losses, claims, damages and liabilities
(including, without limitation, any legal or other expenses reasonably incurred
in connection with defending or investigating any such action or claim) caused
by any untrue statement or alleged untrue statement of a material fact contained
in either Memorandum (as amended or supplemented if the Company shall have
furnished any amendments or supplements thereto), or caused by any omission or
alleged omission to state therein a material fact necessary to make the
statements therein in the light of the circumstances under which they were made
not misleading, except insofar as such losses, claims, damages or liabilities
are caused by any such untrue statement or omission or alleged untrue statement
or omission based upon information
14
relating to any Initial Purchaser furnished to the Company in writing by such
Initial Purchaser through you expressly for use therein.
(b) Each Initial Purchaser agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers and each
person, if any, who controls the Company within the meaning of either Section 15
of the Securities Act or Section 20 of the Exchange Act to the same extent as
the foregoing indemnity from the Company to such Initial Purchaser, but only
with reference to information relating to such Initial Purchaser furnished to
the Company in writing by such Initial Purchaser through you expressly for use
in either Memorandum or any amendments or supplements thereto.
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to Section 8(a) or 8(b), such person (the "INDEMNIFIED PARTY")
shall promptly notify the person against whom such indemnity may be sought (the
"INDEMNIFYING PARTY") in writing and the indemnifying party, upon request of the
indemnified party, shall retain counsel reasonably satisfactory to the
indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all such indemnified parties and that all such fees
and expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated, in the case of
parties indemnified pursuant to Section 8(a), and by the Company, in the case of
parties indemnified pursuant to Section 8(b). The indemnifying party shall not
be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or judgment.
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
15
hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.
(d) To the extent the indemnification provided for in Section 8(a) or
8(b) is unavailable to an indemnified party or insufficient in respect of any
losses, claims, damages or liabilities referred to therein, then each
indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Initial Purchasers on
the other hand from the offering of the Securities or (ii) if the allocation
provided by clause 8(d)(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(d)(i) above but also the relative fault of the Company on the one
hand and of the Initial Purchasers on the other hand in connection with the
statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Initial
Purchasers on the other hand in connection with the offering of the Securities
shall be deemed to be in the same respective proportions as the net proceeds
from the offering of the Securities (before deducting expenses) received by the
Company and the total discounts and commissions received by the Initial
Purchasers, in each case as set forth in the Final Memorandum, bear to the
aggregate offering price of the Securities. The relative fault of the Company on
the one hand and of the Initial Purchasers on the other hand shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company or by the Initial
Purchasers and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The Initial
Purchasers' respective obligations to contribute pursuant to this Section 8 are
several in proportion to the respective principal amount of Securities they have
purchased hereunder, and not joint.
(e) The Company and the Initial Purchasers agree that it would not be
just or equitable if contribution pursuant to this Section 8 were determined by
pro rata allocation (even if the Initial Purchasers were treated as one entity
for such purpose) or by any other method of allocation that does not take
account of the equitable considerations referred to in Section 8(d). The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages and liabilities referred to in Section 8(d) shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 8, no Initial Purchaser shall be required to contribute any amount in
excess of the amount by which the total price at which the Securities resold by
it in the initial placement of such Securities were offered to investors exceeds
the amount of any damages that such Initial Purchaser has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 8 are not
16
exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
(f) The indemnity and contribution provisions contained in this
Section 8 and the representations, warranties and other statements of the
Company contained in this Agreement shall remain operative and in full force and
effect regardless of (i) any termination of this Agreement, (ii) any
investigation made by or on behalf of any Initial Purchaser or any person
controlling any Initial Purchaser or by or on behalf of the Company, its
officers or directors or any person controlling the Company and (iii) acceptance
of and payment for any of the Securities.
9. Termination. This Agreement shall be subject to termination by notice
given by you to the Company, if (a) after the execution and delivery of this
Agreement and prior to the Closing Date (i) trading generally shall have been
suspended or materially limited on or by, as the case may be, any of the New
York Stock Exchange, the American Stock Exchange, the National Association of
Securities Dealers. Inc., the Chicago Board of Options Exchange, the Chicago
Mercantile Exchange or the Chicago Board of Trade, (ii) trading of any
securities of the Company shall have been suspended on any exchange or in any
over-the-counter market, (iii) a general moratorium on commercial banking
activities in New York shall have been declared by either Federal or New York
State authorities or (iv) there shall have occurred any outbreak or escalation
of hostilities or any change in financial markets or any calamity or crisis
that, in your judgment, is material and adverse and (b) in the case of any of
the events specified in clauses 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 Securities on the terms and in the manner contemplated in the Final
Memorandum.
10. Effectiveness; Defaulting Initial Purchasers. This Agreement shall
become effective upon the execution and delivery hereof by the parties hereto.
If, on the Closing Date, or the Option Closing Date, as the case may be,
any one or more of the Initial Purchasers shall fail or refuse to purchase
Securities that it or they have agreed to purchase hereunder on such date, and
the aggregate principal amount of Securities which such defaulting Initial
Purchaser or Initial Purchasers agreed but failed or refused to purchase is not
more than one-tenth of the aggregate principal amount of Securities to be
purchased on such date, the other Initial Purchasers shall be obligated
severally in the proportions that the principal amount of Firm Securities set
forth opposite the names of all such non-defaulting Initial Purchasers, or in
such other proportions as you may specify, to purchase the Securities which such
defaulting Initial Purchaser or Initial Purchasers agreed but failed of refused
to purchase on such date; provided that in no event shall the principal amount
of Securities that any Initial Purchaser has agreed to purchase pursuant to this
Agreement be increased pursuant to this Section 10 by an amount in excess of
one-ninth of such principal amount of Securities without the written consent of
such Initial Purchaser. If, on the Closing Date any Initial Purchaser or
Initial Purchasers shall fail or refuse to purchase Firm Securities which it or
they have agreed to purchase hereunder on such date and the aggregate principal
amount of Securities with respect to which such default occurs is more than one-
tenth of the aggregate principal amount of Firm Securities to be purchased on
such date, and arrangements
17
satisfactory to you and the Company for the purchase of such Firm Securities are
not made within 36 hours after such default, this Agreement shall terminate
without liability on the part of any non-defaulting Initial Purchaser or of the
Company. In any such case either you or the Company shall have the right to
postpone the Closing Date, but in no event for longer than seven days, in order
that the required changes, if any, in the Final Memorandum or in any other
documents or arrangements may be effected. If, on the Option Closing Date, any
Initial Purchaser or Initial Purchasers shall fail or refuse to purchase
Additional Securities and the aggregate principal amount of Additional
Securities with respect to which such default occurs is more than one-tenth of
the aggregate principal amount of Additional Securities to be purchased, the
non-defaulting Initial Purchasers shall have the option to (a) terminate their
obligation hereunder to purchase Additional Securities or (b) purchase not less
than the principal amount of Additional Securities that such non-defaulting
Initial Purchasers would have been obligated to purchase in the absence of such
default. Any action taken under this paragraph shall not relieve any defaulting
Initial Purchaser from liability in respect of any default of such Initial
Purchaser under this Agreement.
If this Agreement shall be terminated by the Initial Purchasers, or any of
them, because of any failure or refusal on the part of the Company to comply
with the terms or to fulfill any of the conditions of this Agreement, or if for
any reason the Company shall be unable to perform its obligations under this
Agreement, the Company will reimburse the Initial Purchasers or such Initial
Purchasers as have so terminated this Agreement with respect to themselves,
severally, for all out-of-pocket expenses (including the fees and disbursements
of their counsel) reasonably incurred by such initial Purchasers in connection
with this Agreement or the offering contemplated hereunder.
11. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
12. Applicable Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.
13. Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
18
Very truly yours,
Aviron
/s/ ▇. ▇▇▇▇▇▇▇▇ Read, M.D.
By:__________________________________________
▇. ▇▇▇▇▇▇▇▇ Read, M.D.
Chief Executive Officer
Accepted as of the date hereof
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
Acting severally on behalf of themselves and
the several Initial Purchasers named in
Schedule I hereto.
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
/s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
By:____________________________________
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Managing Director
SCHEDULE I
PRINCIPAL AMOUNT
OF FIRM SECURITIES
INITIAL PURCHASER TO BE PURCHASED
----------------------------------------- ------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated........ $25,000,000.00
Bear ▇▇▇▇▇▇▇ & Co........................ $25,000,000.00
Credit Suisse First Boston Corporation... $25,000,000.00
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC.................... $25,000,000.00
--------------
Total.............................. $ 100,000,000
==============
1
EXHIBIT A
OPINION OF ▇▇▇▇▇▇ GODWARD LLP
The opinion of the ▇▇▇▇▇▇ Godward LLP to be delivered pursuant to Section
5(c) of the Purchase Agreement shall be to the effect that:
A. The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its property and to
conduct its business as described in the Final Memorandum and, to such counsel's
knowledge, 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.
B. To such counsel's knowledge, the Company does not own or control,
directly or indirectly, any corporation, association or other entity.
C. The Purchase Agreement has been duly authorized, executed and
delivered by the Company.
D. The authorized and outstanding capital stock of the Company is as set
forth in the Final Memorandum 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 Final Memorandum.
E. The shares of common stock outstanding on the Closing Date or Option
Closing Date have been duly authorized and are validly issued, fully paid and
non-assessable.
F. The Securities have been duly authorized by the Company and, when
executed and authenticated in accordance with the provisions of the Indenture
and delivered to and paid for by the Initial Purchasers in accordance with the
terms of the Purchase Agreement, will be valid and binding obligations of the
Company, except as may be limited by applicable bankruptcy, insolvency or
similar laws affecting creditors' rights generally and general principles of
equity, and will be entitled to the benefits of the Indenture and the
Registration Rights Agreement.
G. The Underlying Securities reserved for issuance upon conversion of the
Securities have been duly authorized and reserved and, when issued upon
conversion of the Securities in accordance with the terms of the Securities,
will be validly issued, fully paid and non-assessable and the issuance of the
Underlying Securities will not be subject to any preemptive or similar rights.
H. Each of the Indenture and the Registration Rights Agreement has been
duly authorized, executed and delivered by the Company.
I. The execution and delivery by the Company of, and the performance by
the Company of its obligations under, the Purchase Agreement, the Indenture, the
Registration Rights Agreement and the Securities will not contravene any
provision of applicable law or the certificate of incorporation or bylaws of the
Company or, to such counsel's knowledge, any agreement or other instrument
binding upon the Company that is material to the Company 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 consent, approval,
authorization or order of, or qualification with, any governmental body or
agency is required for the performance by the Company of its obligations under
the Purchase Agreement, the Indenture, the Registration Rights Agreement or the
Securities, except such as may be required by the securities or Blue Sky laws of
the various states in connection with the offer and sale of the Securities (as
to which such counsel expresses no opinion) and by Federal and state securities
laws with respect to the Company's obligations under the Registration Rights
Agreement.
J. Such counsel does not know of any legal or governmental proceedings
pending or threatened to which the Company is a party or to which any of the
properties of the Company is subject other than proceedings fairly summarized in
all material respects in the Final Memorandum and proceedings which such counsel
believes are not likely to have a material adverse effect on the Company, or on
the power or ability of the Company to perform its obligations under the
Purchase Agreement, the Indenture, the Registration Rights Agreement or the
Securities or to consummate the transactions contemplated by the Final
Memorandum.
K. The Company is not, and after giving effect to the offering and sale
of the Securities and the application of the proceeds thereof as described in
the Final Memorandum, will not be an "investment company" as such term is
defined in the Investment Company Act of 1940, as amended.
L To the knowledge of such counsel, there is no legal or beneficial
owner of any securities of the Company who has any rights, not effectively
satisfied or waived, to require registration of any shares of capital stock of
the Company in connection with the filing of the registration statement on Form
S-3 pursuant to the terms of the Registration Rights Agreement.
M. The statements in the Final Memorandum under the captions "Description
of Notes," "Description of Capital Stock," and "Transfer Restrictions," insofar
as such statements constitute summaries of the legal matters, documents or
proceedings referred to therein, fairly summarize the matters referred to
therein to the extent as would be required if the Final Memorandum were a
prospectus included in a Registration Statement on Form S-1 under the Securities
Act.
N. The statements in the Final Memorandum under the caption "Certain
Federal Income Tax Considerations," insofar as such statements represent matters
of law or legal conclusions, and subject to the qualifications and limitations
contained in that discussion, are accurate and fairly summarize the material
United States federal income tax considerations relevant to a purchase of the
Securities.
2
O. Based upon the representations, warranties and agreements of the
Company in Sections 1(q), 1(r), 1(s), 6(f), 6(g) and 6(j) of the Purchase
Agreement and of the Initial Purchasers in Section 7 of the Purchase Agreement,
it is not necessary in connection with the offer, sale and delivery of the
Securities to the Initial Purchasers under the Purchase Agreement or in
connection with the initial resale of such Securities by the Initial Purchasers
in accordance with Section 7 of the Purchase Agreement to register the
Securities under the Securities Act or to qualify the Indenture under the Trust
Indenture Act of 1939, it being understood that no opinion is expressed as to
any subsequent resale of any Security or Underlying Security.
P. 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 the Purchase 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
distribution of the Securities by the Initial Purchasers (and such counsel
expresses no opinion as to state securities or Blue Sky laws).
Q. 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.
R. Except as disclosed in the Final Memorandum under the caption "Risk
Factors --Uncertainty of Protection of Patents and Proprietary Rights;
Dependence on Trade Secrets," 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 F (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 ▇▇▇▇
"AVIRON" in Germany and a notice of potential infringement for such trademark
application in France.
S. Except as disclosed in the Prospectus under the caption "Risk Factors
-- Uncertainty of Protection of Patents and Proprietary Rights; Dependence on
Trade Secrets," to the best of such counsel's knowledge, the 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.
3
T. 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.
U. To such counsel's knowledge, 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.
V. The statements contained in the Registration Statement and Prospectus
under the captions "Risk Factors--Uncertainty of Protection of Patents and
Proprietary Rights; Dependence Upon Trade Secrets" and "Business--Patents and
Proprietary Rights" as they pertain to Section C of the Patent Portfolio,
insofar as such statements constitute matters of law, are a fair and accurate
summary of the matters set forth therein, as required under the Act and
applicable Rules and Regulations.
W. Based upon such counsel's participation in the preparation of the
Final Memorandum (and any amendments or supplements thereto) and review and
discussion of the contents thereof and review of the documents incorporated by
reference therein, but without independent check or verification, nothing has
come to the attention of such counsel to cause him or her to believe that the
Final Memorandum or any information incorporated by reference therein (other
than the financial statements, schedules and other financial and statistical
information included therein, as to which such counsel may make no statement),
as of the date thereof and as of the Closing Date contained or contains any
untrue statement of a material fact or omitted or omits to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.
4
EXHIBIT B
OPINION OF ▇▇▇▇▇▇ AND ▇▇▇▇▇▇▇
A. To the best of such counsel's knowledge, except as otherwise disclosed
in Exhibit F attached to such opinion, the Company is licensed to use, or owns,
each patent and patent application described in the Prospectus, as listed in
Section A of the Patent Portfolio;
B. To the best of such counsel's knowledge, except as otherwise described
in Exhibit F attached to such opinion, no third party has any rights to the
patents and patent applications listed in Schedule A of the Patent Portfolio;
C. 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;
D. To the best of such counsel's knowledge, 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;
E. To the best of such counsel's knowledge, no third parties are
infringing any of the United States patents listed in Schedule A of the Patent
Portfolio;
F. The Company's United States patent applications listed in Section A 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 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;
and the patent applications in Section A of the Patent Portfolio are being
diligently pursued;
G. The statements contained in the Registration Statement and Prospectus
under the captions "Risk Factors--Uncertainty of Protection of Patents and
Proprietary Rights; Dependence Upon Trade Secrets" and "Business--Patents and
Proprietary Rights" as they pertain to Section A of the Patent Portfolio and
United States patent rights, insofar as such statements constitute matters of
law, are a fair and accurate summary of the matters set forth therein; and
In addition such counsel shall state that such counsel has
participated in conferences with officials and other representatives of the
Company, the Representatives, Underwriters' Counsel and the independent
certified public accountants of the Company, at which such conferences the
contents of the Registration Statement and Prospectus and related matters were
discussed, and
although they have not verified the accuracy or completeness of the statements
contained in the Registration Statement or the Prospectus, nothing has come to
the attention of such counsel which leads such counsel to believe that, at the
time the Registration Statement became effective and at all times subsequent
thereto up to and on the Closing Date and on any later date on which Option
Shares are to be purchased, the statements relating to United States patents and
patent applications listed in Section A of the Patent Portfolio in the
Registration Statement and any amendment or supplement thereto (other than
financial statements including supporting schedules and other financial and
statistical information derived therefrom, as to which such counsel need express
no comment) 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, or at the Closing Date or any later date on
which Option Shares are to be purchased, as the case may be, the statements
relating to United States patents listed in Section A of the Patent Portfolio in
the Prospectus, and any amendment or supplement thereto, (except aforesaid)
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,
in light of the circumstances under which they were made, not misleading.
2
EXHIBIT C
OPINION OF ▇▇▇▇▇▇▇▇ ▇'▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & BORUN
A. To the best of such counsel's knowledge, such knowledge is being based
upon the files of such firm, except as otherwise disclosed in the Offering
Memorandum, 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 party 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 Offering Memorandum, no such proceedings are
threatened or contemplated by governmental authorities or others;
B. 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;
C. To the best of such counsel's knowledge, such knowledge is 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 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;
D. To the best of such counsel's knowledge, such knowledge is 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 F 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;
E. To the best of such counsel's knowledge, such knowledge is being based
upon the files of such firm, each of the Company's foreign patents and patent
applications listed in Section B
of the Patent Portfolio has been submitted to patent firms in the respective
foreign countries with instructions to file the applications in the patent
offices of those countries naming the Company or one its licensors as applicant
and/or owner of record. The Patent Cooperation Treaty applications have been
submitted directly to the relevant patent examining authority of those countries
naming the Company or one of its licensors as the applicant and/or owner of
record. In each such application, written confirmation has been received that
the application has been accepted for filing by such patent office, or patent
examining authority. There is no assurance that the patent offices of the
respective countries will not reject the claims of the foreign patent
applications as being unpatentable, or that any claims will be allowed without
amendment, nor is there any assurance that these patent authorities will
ultimately conclude that the foreign patent applications meet all requirements
for patentability. Such counsel is not aware of any material defect of form in
preparation or filing. 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 listing in Section B of
the Patent Portfolio, there are no legal or governmental proceedings relating to
any foreign patent rights or foreign patent applications owned, licensed or sued
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 or 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 Offering Memorandum, no such proceedings
are threatened or contemplated by governmental authorities or others;
F. The patent applications in Section B of the Patent Portfolio are being
diligently pursued;
G. The statements contained in the Offering Memorandum under the captions
"Risk Factors--Uncertainty of Protection of Patents and Proprietary Rights;
Dependence of Trade Secrets" and "Business--Patents and Proprietary Technology"
insofar as such statements constitute matters of law, are a fair and accurate
summary of the matters set forth therein; and
In addition, such counsel shall state that such counsel has
participated in conferences with officials and other representatives of the
Company, the Initial Purchasers, Counsel to the Initial Purchasers and the
Company, and the independent certified public accountants of the Company, at
which such conferences the contents of the Offering Memorandum and related
matters were discussed, and although they have not verified the accuracy or
completeness of the statements contained in the Offering Memorandum, nothing has
come to the attention of such counsel which leads such counsel to believe that,
at the time of the Final Memorandum and at all times subsequent thereto up to
and on the Closing Date and on any later date on which Option Shares are to be
purchased, the statements relating to patents and patent applications listed in
Section B of the Patent Portfolio in the Offering Memorandum and any amendment
or supplement thereto (other than financial statements including supporting
schedules and other financial and statistical information derived therefrom, as
to which such counsel need express no comment) 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, or at the
Closing Date or any later date on
2
which Option Shares are to be purchased, as the case may be, the statements
relating to patents and patent applications listed in Section B of the Patent
Portfolio in the Prospectus, and any amendment or supplement thereto, (except
aforesaid) 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, in light of the circumstances under which they were made,
not misleading.
3
EXHIBIT D
OPINION OF ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
The opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ to be delivered pursuant to
Section 5(d) of the Purchase Agreement shall be to the effect that:
A. The Purchase Agreement has been duly authorized, executed and
delivered by the Company.
B. The Securities have been duly authorized by the Company and, when
executed and authenticated in accordance with the provisions of the Indenture
and delivered to and paid for by the Initial Purchasers in accordance with the
terms of the Purchase Agreement, will be valid and binding obligations of the
Company, enforceable in accordance with their terms, subject to applicable
bankruptcy, insolvency or similar laws affecting creditors' rights generally and
general principles of equity, and will be entitled to the benefits of the
Indenture and the Registration Rights Agreement.
C. The Underlying Securities reserved for issuance upon conversion of the
Securities have been duly authorized and reserved and, when issued upon
conversion of the Securities in accordance with the terms of the Securities,
will be validly issued, fully paid and non-assessable, and the issuance of the
Underlying Securities will not be subject to any preemptive or similar rights.
D. Each of the Indenture and the Registration Rights Agreement has been
duly authorized, executed and delivered by, and is a valid and binding agreement
of, the Company, enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency or similar laws affecting creditors' rights generally and
general principles of equity and except as rights to indemnification and
contribution under the Registration Rights Agreement may be limited under
applicable law.
E. The statements in the Final Memorandum under the captions "Description
of Notes", "Plan of Distribution" and "Transfer Restrictions," insofar as such
statements constitute summaries of the legal matters, documents or proceedings
referred to therein, fairly summarize the matters referred to therein.
F. Such counsel has no reason to believe that (except for financial
statements and schedules and other financial and statistical data as to which
such counsel need not express any belief) the Final Memorandum when issued
contained, or as of the date such opinion is delivered contains, any untrue
statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
G. Based upon the representations, warranties and agreements of the
Company in Sections 1(q), 1(r), 1(t), 6(f), 6(g) and 6(j) of the Purchase
Agreement and of the Initial Purchasers in
Section 7 of the Purchase Agreement, it is not necessary in connection with the
offer, sale and delivery of the Securities to the Initial Purchasers under the
Purchase Agreement or in connection with the initial resale of such Securities
by the Initial Purchasers in accordance with Section 7 of the Purchase Agreement
to register the Securities under the Securities Act of 1933 or to qualify the
Indenture under the Trust Indenture Act of 1939, it being understood that no
opinion is expressed as to any subsequent resale of any Security or Underlying
Security.
With respect to paragraph G above, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ may
state that their opinion and belief are based upon their participation in the
preparation of the Final Memorandum (and any amendments or supplements thereto)
and review and discussion of the contents thereof (including the review of, but
not participation in the preparation of, the incorporated documents), but are
without independent check or verification except as specified.
2
EXHIBIT E
OPINION OF ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ AND ▇▇▇▇▇▇ LLP
A. Each of the Indenture and the Registration Rights Agreement is a valid
and binding agreement of the Company, enforceable against the Company in
accordance with its terms except as (A) the enforceability thereof may be
limited by bankruptcy, insolvency or similar laws affecting creditors' rights
generally, (B) rights of acceleration, certain waivers and the availability of
equitable remedies may be limited by equitable principles of general
applicability and (C) rights to indemnification and contribution may be limited
under applicable law.
B. When executed and authenticated in accordance with the provisions of
the Indenture and delivered to and paid for by the Initial Purchasers in
accordance with the terms of the Purchase Agreement, the Notes will be valid and
binding obligations of the Company, enforceable against the Company in
accordance with their terms except as (A) the enforceability thereof may be
limited by bankruptcy, insolvency or similar laws affecting creditors' rights
generally, (B) rights of acceleration, certain waivers and the availability of
equitable remedies may be limited by equitable principles of general
applicability and (C) rights to imdemnification and contribution may be limited
under applicable law.
EXHIBIT F
SECTION A - (▇▇▇▇▇▇ & ▇▇▇▇▇▇▇)
AVIRON REFERENCE NO. AVIRON REFERENCE NO.
-------------------- --------------------
5009B 5010B
5009F 5011A
5009G 5011A-DIV
5009H 5015
5009G/DIV 5015-DIV
EXHIBIT F (CONT'D)
SECTION B - (▇▇▇▇▇▇▇▇ ▇'▇▇▇▇▇)
AVIRON REFERENCE NO. AVIRON REFERENCE NO.
-------------------- --------------------
5001 5005
5001-CA 5005-AU
▇▇▇▇-▇▇ ▇▇▇▇-▇▇
▇▇▇▇-▇▇ ▇▇▇▇-▇▇
▇▇▇▇-▇▇ 5005-EP
5002-JP/DIV 5005A
5002EP 5005-AT
5002B 5005-BE
5002C 5005-CH
5002C-AU 5005-DE
5002C-CA 5005-DK
5002C-EP 5005-ES
5002C-JP 5005-FR
5002C-ZA 5005-GB
5002E 5005-GR
5002G 5005-IT
5003A 5005-LU
5004A 5005-NL
5005-SE
5006-AU
5006-CA
5006-EP
5006-JP
5006B
5006C
5007-PCT
5007-KR
5007-EP
5007A
2
EXHIBIT F (CONT'D)
SECTION C - (▇▇▇▇▇▇ GODWARD LLP)
AVIRON REFERENCE NO.
--------------------
5016
5017
5018
5018-IN
5018-MY
5019
5019-PCT
5021
5021-PCT
5022
5023
5023-PCT
5032
3