Exhibit 1.1
MAXIM PHARMACEUTICALS, INC.
2,500,000 Shares of Common Stock
Underwriting Agreement
_____________, 2000
▇.▇. ▇▇▇▇▇▇ Securities Inc.
Prudential Securities Incorporated
▇▇▇▇▇▇ Fondkommission AB
As Representatives of the several underwriters
listed in Schedule I hereto
c/o ▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Maxim Pharmaceuticals Inc., a Delaware corporation (the
"Company"), proposes to issue and sell to the several Underwriters listed in
Schedule I hereto (the "Underwriters") for whom you are acting as
representatives (the "Representatives") an aggregate of 2,500,000 shares of
Common Stock, par value $.001 per share, of the Company (the "Underwritten
Shares") and, for the sole purpose of covering over-allotments in connection
with the sale of the Underwritten Shares, at the option of the Underwriters, up
to an additional 375,000 shares of Common Stock, par value $.001 per share, of
the Company (the "Option Shares"). The Underwritten Shares and the Option Shares
are herein referred to as the "Shares". The shares of Common Stock, par value
$.001 per share, of the Company to be outstanding after giving effect to the
sale of the Shares are herein referred to as the "Common Stock".
The Company has prepared and filed with the Securities and
Exchange Commission (the "Commission") in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "Securities Act"), a registration
statement, including a prospectus, relating to the Shares. The registration
statement as amended at the time when it shall become effective, including
information (if any) deemed to be part of the registration statement at the time
of effectiveness pursuant to Rule 430A under the Securities Act, is referred to
in this Agreement as the "Registration Statement", and the prospectus in the
form first used to confirm sales of Shares is referred to in this Agreement as
the "Prospectus". If the Company has filed an abbreviated registration statement
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. Any reference
in this Agreement to the Registration Statement, any preliminary prospectus or
the Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3
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under the Securities Act, as of the effective date of the Registration Statement
or the date of such preliminary prospectus or the Prospectus, as the case may
be, and any reference to "amend", "amendment" or "supplement" with respect to
the Registration Statement, any preliminary prospectus or the Prospectus shall
be deemed to refer to and include any documents filed after such date under the
Securities Exchange Act of 1934, as amended, and the rules and regulations of
the Commission thereunder (collectively, the "Exchange Act") that are deemed to
be incorporated by reference therein.
The Company hereby agrees with the Underwriters as follows:
1. The Company agrees to sell the Underwritten Shares to the
several Underwriters as hereinafter provided, and each Underwriter, upon the
basis of the representations and warranties herein contained, but subject to the
conditions hereinafter stated, agrees to purchase, severally and not jointly,
from the Company the number of Underwritten Shares set forth opposite such
Underwriter's name in Schedule I hereto at a purchase price per share of
$__________ (the "Purchase Price").
In addition, the Company agrees to issue and sell the Option
Shares to the several Underwriters as hereinafter provided, and the Underwriters
on the basis of the representations and warranties herein contained, but subject
to the conditions hereinafter stated, shall have the option to purchase,
severally and not jointly, from the Company up to an aggregate of 375,000 Option
Shares at the Purchase Price for the sole purpose of covering over-allotments
(if any) in the sale of Underwritten Shares by the several Underwriters.
If any Option Shares are to be purchased, the number of Option
Shares to be purchased by each Underwriter shall be the number of Option Shares
which bears the same ratio to the aggregate number of Option Shares being
purchased as the number of Underwritten Shares set forth opposite the name of
such Underwriter in Schedule I hereto (or such number increased as set forth in
Section 9 hereof) bears to the aggregate number of Underwritten Shares being
purchased from the Company by the several Underwriters, subject to such
adjustments to eliminate any fractional Shares as the Representatives in their
sole discretion shall make.
The Underwriters may exercise the option to purchase the
Option Shares at any time (but not more than once) on or before the thirtieth
day following the date of the Prospectus, by written notice from the
Representatives to the Company. Such notice shall set forth the aggregate number
of Option Shares as to which the option is being exercised and the date and time
when the Option Shares are to be delivered and paid for which may be the same
date and time as the Closing Date (as hereinafter defined) but shall not be
earlier than the Closing Date or later than the tenth full Business Day (as
hereinafter defined) after the date of such notice (unless such time and date
are postponed in accordance with the provisions of
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Section 9 hereof). Any such notice shall be given at least two Business Days
prior to the date and time of delivery specified therein.
2. The Company understands that the Underwriters intend (i) to
make a public offering of the Shares as soon as in the judgment of the
Representatives is advisable after (A) the Registration Statement has become
effective and (B) the parties hereto have executed and delivered this Agreement
and (ii) initially to offer the Shares upon the terms set forth in the
Prospectus. The Company further understands that the Underwriters intend (i) to
direct any offering in Sweden to a limited circle of investors within the
meaning of the Swedish Act on Trading in Financial Instruments (the "Swedish
Act") or (ii) that the consideration to be paid by each investor in Sweden will
be SEK 300,000 or more.
3. Payment for the Shares shall be made by wire transfer in
immediately available funds to the account specified by the Company to the
Representatives, in the case of the Underwritten Shares, on __________, 2000, or
at such other time on the same or such other date, not later than the fifth
Business Day thereafter, as the Representatives and the Company may agree upon
in writing or, in the case of the Option Shares, on the date and time specified
by the Representatives in the written notice of the Underwriters' election to
purchase such Option Shares. The time and date of such payment for the
Underwritten Shares are referred to herein as the "Closing Date" and the time
and date for such payment for the Option Shares, if other than the Closing Date,
are herein referred to as the "Additional Closing Date". As used herein, the
term "Business Day" means any day other than a day on which banks are permitted
or required to be closed in New York City.
Payment for the Shares to be purchased on the Closing Date or
the Additional Closing Date, as the case may be, shall be made against delivery
to the Representatives for the respective accounts of the several Underwriters
of the Shares to be purchased on such date registered in such names and in such
denominations as the Representatives shall request in writing not later than two
full Business Days prior to the Closing Date or the Additional Closing Date, as
the case may be, with any transfer taxes payable in connection with the transfer
to the Underwriters of the Shares duly paid by the Company. The certificates for
the Shares will be made available for inspection and packaging by the
Representatives at the office of ▇.▇. ▇▇▇▇▇▇ Securities Inc. set forth above not
later than 1:00 P.M., New York City time, on the Business Day prior to the
Closing Date or the Additional Closing Date, as the case may be.
4. The Company represents and warrants to each Underwriter
that:
(a) no order preventing or suspending the use of any
preliminary prospectus has been issued by the Commission, and 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
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material respects with the Securities Act and did not contain an 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, in
light of the circumstances under which they were made, not misleading;
PROVIDED that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information relating to any Underwriter or the distribution of the
Shares furnished to the Company in writing by such Underwriter through
the Representatives expressly for use therein;
(b) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceeding for that
purpose has been instituted or, to the knowledge of the Company,
threatened by the Commission; and the Registration Statement and
Prospectus (as amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) comply, or will
comply, as the case may be, in all material respects with the
Securities Act and do not and will not, as of the applicable effective
date as to the Registration Statement and any amendment thereto and as
of the date of the Prospectus and any amendment or supplement thereto,
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading, and the Prospectus, as amended or
supplemented, if applicable, at the Closing Date or Additional Closing
Date, as the case may be, will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading; except that the foregoing representations and
warranties shall not apply to statements or omissions in the
Registration Statement or the Prospectus made in reliance upon and in
conformity with information relating to any Underwriter or the
distribution of the Shares furnished to the Company in writing by such
Underwriter through the Representatives expressly for use therein;
(c) the documents incorporated by reference in the Prospectus,
when they were filed with the Commission, as the case may be, conformed
in all material respects to the requirements of the Exchange Act, and
none of such documents contained an untrue statement of a material fact
or omitted to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; and any further documents so filed and incorporated by
reference in the Prospectus, when such documents are filed with the
Commission, will conform in all material respects to the requirements
of the Exchange Act, and will not contain an untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading;
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(d) the financial statements, and the related notes thereto,
included or incorporated by reference in the Registration Statement and
the Prospectus present fairly in all material respects the financial
position of the Company as of the dates indicated and the results of
its operations and changes in its cash flows for the periods specified;
said financial statements have been prepared in conformity with United
States generally accepted accounting principles applied on a consistent
basis except as disclosed in the notes to such financial statements,
and the supporting schedules, if any, included or incorporated by
reference in the Registration Statement present accurately in all
material respects the information required to be stated therein;
(e) since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there has not
been any change in the capital stock or long-term debt of the Company,
or any material adverse change, or any development involving a
prospective material adverse change, in or affecting the business,
prospects, management, financial position, or results of operations of
the Company (a "Material Adverse Change"), otherwise than as set forth
or contemplated in the Prospectus; and except as set forth or
contemplated in the Prospectus, the Company has not entered into any
transaction or agreement (whether or not in the ordinary course of
business) material to the Company;
(f) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation, with corporate power and authority to
own its properties and conduct its business as described in the
Prospectus, and has been duly qualified as a foreign corporation for
the transaction of business and is in good standing under the laws of
each other jurisdiction in which it owns or leases properties or
conducts any business, so as to require such qualification, other than
where the failure to be so qualified or in good standing would not have
a material adverse effect on the business, prospects, management,
financial position, or results of operations of the Company (a
"Material Adverse Effect");
(g) the Company has no subsidiaries;
(h) this Agreement has been duly authorized, executed and
delivered by the Company;
(i) the Company has an authorized capitalization as set forth
in the Prospectus and such authorized capital stock conforms as to
legal matters to the description thereof set forth or incorporated by
reference in the Prospectus, and all of the outstanding shares of
capital stock of the Company have been duly authorized and validly
issued, are fully-paid and non-assessable and are not subject to any
pre-emptive or similar rights; and, except as described in or
contemplated by the Prospectus, there are
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no outstanding rights (including, without limitation, pre-emptive
rights), warrants or options to acquire, or instruments convertible
into or exchangeable for, any shares of capital stock or other equity
interest in the Company, or any contract, commitment, agreement,
understanding or arrangement of any kind relating to the issuance of
any capital stock of the Company, any such convertible or exchangeable
securities or any such rights, warrants or options;
(j) the Shares to be issued and sold by the Company hereunder
have been duly authorized, and, when issued and delivered to and paid
for by the Underwriters in accordance with the terms of this Agreement,
will be duly issued and will be fully paid and non-assessable and will
conform to the description thereof set forth or incorporated by
reference in the Prospectus; and the issuance of the Shares is not
subject to any preemptive or similar rights;
(k) the Company is not, and with the giving of notice or lapse
of time or both would not be, in violation of, or in default under, its
certificate of incorporation or by-laws or any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which
the Company is a party or by which it or any of its properties is
bound, except for violations and defaults which individually and in the
aggregate are not material to the Company; the issue and sale of the
Shares and the performance by the Company of its obligations under this
Agreement and the consummation of the transactions contemplated herein
will not conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company is a party or by which the Company is
bound or to which any of the property or assets of the Company is
subject, nor will any such action result in any breach or violation of
the provisions of the certificate of incorporation or the by-laws of
the Company or any applicable law or statute or any order, rule or
regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its properties; and no consent,
approval, authorization, order, license, registration or qualification
of or with any such court or governmental agency or body is required
for the issue and sale of the Shares or the consummation by the Company
of the transactions contemplated by this Agreement, except such
consents, approvals, authorizations, orders, licenses, registrations or
qualifications as have been obtained or made under the Securities Act
and as may be required under state securities or Blue Sky Laws in
connection with the purchase and distribution of the Shares by the
Underwriters;
(l) other than as set forth or contemplated in the Prospectus,
there are no legal or governmental investigations, actions, suits or
proceedings pending or, to the knowledge of the Company, threatened
against or affecting the Company or any of its
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properties or to which the Company is or may be a party or to which any
property of the Company is or may be the subject which, if determined
adversely to the Company, would, individually or in the aggregate,
reasonably be expected to have, a Material Adverse Effect, and, to the
Company's knowledge, no such proceedings are threatened or contemplated
by governmental authorities or threatened by others; and there are no
statutes, regulations, contracts or other documents that are required
to be described in the Registration Statement or Prospectus or to be
filed as exhibits to the Registration Statement that are not described
or filed as required;
(m) the Company has good title to all personal property owned
by it, in each case free and clear of all liens, encumbrances and
defects except such as are described or referred to in the Prospectus
or such as do not materially affect the value of such property and do
not interfere with the use made or 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, existing and enforceable leases
with such exceptions as are not material and do not interfere with the
use made or proposed to be made of such property and buildings by the
Company;
(n) no relationship, direct or indirect, exists between or
among the Company on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Company on the other hand,
which is required by the Securities Act to be described in the
Registration Statement and the Prospectus which is not so described;
(o) no person has the right to require the Company to register
any securities for offering and sale under the Securities Act by reason
of the filing of the Registration Statement with the Commission or the
issue and sale of the Shares except for rights that have been waived or
are immaterial in nature and amount;
(p) the Company is not and, after giving effect to the
offering and sale of the Shares will not be, an "investment company" or
an entity "controlled" by an "investment company", as such terms are
defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act");
(q) KPMG LLP, which has certified certain financial statements
of the Company, are independent public accountants as required by the
Securities Act;
(r) the Company has filed all federal, state, local and
foreign tax returns which have been required to be filed and has paid
all taxes shown thereon and all assessments received by it to the
extent that such taxes have become due and are not being contested in
good faith, except where such failure to file required tax returns or
pay such taxes and assessments would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect;
and, except as disclosed in the
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Registration Statement and the Prospectus, there is no tax deficiency
which has been or might reasonably be expected to be asserted or
threatened against the Company which would reasonably be expected to
have a Material Adverse Effect;
(s) the Company has not taken nor will it take, directly or
indirectly, any action designed to, or that might be reasonably
expected to, cause or result in stabilization or manipulation of the
price of the Common Stock;
(t) the Company owns, possesses or has obtained all licenses,
permits, certificates, consents, orders, approvals and other
authorizations from, and has made all declarations and filings with,
all federal, state, local and other governmental authorities (including
foreign regulatory agencies), all self-regulatory organizations and all
courts and other tribunals, domestic or foreign, necessary to own or
lease, as the case may be, and to operate its properties and to carry
on its business as conducted as of the date hereof, except where such
failure to do so would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect; and the
Company has not received any actual notice of any proceeding relating
to revocation or modification of any such license, permit, certificate,
consent, order, approval or other authorization, except as described in
the Registration Statement and the Prospectus; and the Company is in
compliance with all laws and regulations relating to the conduct of its
business as conducted as of the date hereof, except where such
noncompliance would not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect;
(u) there are no existing or, to the knowledge of the Company,
threatened labor disputes with the employees of the Company which are
reasonably likely to have a Material Adverse Effect;
(v) 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 it under applicable Environmental Laws to
conduct its business and (iii) is in compliance with all terms and
conditions of any such permit, license or approval, except where such
noncompliance with Environmental Laws, failure to receive required
permits, licenses or other approvals or failure to comply with the
terms and conditions of such permits, licenses or approvals would not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect;
(w) each employee benefit plan, within the meaning of Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), that is maintained, administered or contributed to by the
Company or any of its affiliates for
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employees or former employees of the Company and its affiliates has
been maintained in material compliance with its terms and the
requirements of any applicable statutes, orders, rules and regulations,
including but not limited to ERISA and the Internal Revenue Code of
1986, as amended ("Code"); no prohibited transaction within the meaning
of Section 406 of ERISA or Section 4975 of the Code has occurred with
respect to any such plan excluding transactions effected pursuant to a
statutory or administrative exemption; and for each such plan which is
subject to the funding rules of Section 412 of the Code or Section 302
of ERISA, no "accumulated funding deficiency" as defined in Section 412
of the Code has been incurred, whether or not waived, and the fair
market value of the assets of each such plan (excluding for these
purposes accrued but unpaid contributions) exceeded the present value
of all benefits accrued under such plan determined using reasonable
actuarial assumptions;
(x) the Company owns, is licensed to use or otherwise
possesses adequate rights to use the patents, patent rights, licenses,
inventions, trademarks, service marks, trade names, copyrights and
know-how, including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems,
processes or procedures (collectively, the "Intellectual Property")
reasonably necessary to carry on the business conducted by it, except
to the extent that the failure to own, be licensed to use or otherwise
possess adequate rights to use such Intellectual Property would not
reasonably be expected to have a Material Adverse Effect; the Company
has not received any notice of infringement of or conflict with, and
the Company has no knowledge of any infringement of or conflict with,
asserted rights of others with respect to its Intellectual Property
which could reasonably be expected to result in a Material Adverse
Effect; the discoveries, inventions, products or processes of the
Company referred to in the Registration Statement and the Prospectus do
not, to the knowledge of the Company, infringe or conflict with any
right or patent of any third party, or any discovery, invention,
product or process which is the subject of a patent application filed
by any third party, which infringement or conflict could reasonably be
expected to have a Material Adverse Effect; except as described in the
Prospectus, the Company is not obligated to pay a royalty, grant a
license or provide other consideration to any third party in connection
with its patents, patent rights, licenses, inventions, trademarks,
service marks, trade names, copyrights and know-how; and no third
party, including any academic or governmental organization, possesses
rights to the Intellectual Property which, if exercised (including by
the development of products competitive with those of the Company)
would reasonably be expected to have a Material Adverse Effect;
(y) since the respective dates as of which information is
given in the Registration Statement and the Prospectus, the studies,
tests and preclinical and clinical trials conducted by or on behalf of
the Company that are described in the Registration
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Statement and the Prospectus were and, if still pending, are being
conducted in accordance in all material respects with experimental
protocols, procedures and controls pursuant to, where applicable,
accepted professional scientific standards; the descriptions of the
results of such studies, tests and trials contained in the Registration
Statement and the Prospectus are accurate and complete in all material
respects; the Company has not received any notices or correspondence
from the United States Food and Drug Administration (the "FDA") or any
foreign, state or local governmental body exercising comparable
authority requiring the termination, suspension or material
modification of any studies, tests or preclinical or clinical trials
conducted by or on behalf of the Company which termination, suspension
or material modification would reasonably be expected to have a
Material Adverse Effect;
(z) the statistical and market-related data included or
incorporated by reference in the Registration Statement and the
Prospectus are based on or derived from sources which are believed by
the Company to be reliable;
(aa) the Company carries, or is covered by, insurance in such
amounts and covering such risks as it reasonably believes is adequate
for the conduct of its business and the value of its properties; and
(bb) the Company has reviewed its operations and any third
parties with which the Company has a material relationship to evaluate
the extent to which the business or operations of the Company has been
or will be affected by the Year 2000 Problem; as a result of such
review, the Company has no reason to believe, and does not believe,
that the Year 2000 Problem has had or will have a Material Adverse
Effect or result in any material loss or interference with the
Company's business or operations. The "Year 2000 Problem" as used
herein means any significant risk that computer hardware or software
used in the receipt, transmission, processing, manipulation, storage,
retrieval, retransmission or other utilization of data or in the
operation of mechanical or electrical systems of any kind will not, in
the case of dates or time periods occurring after December 31, 1999,
function at least as effectively as in the case of dates or time
periods occurring prior to January 1, 2000.
5. The Company covenants and agrees with each of the several
Underwriters:
(a) to use its best efforts to cause the Registration
Statement to become effective at the earliest possible time and, if
required, to file the final Prospectus with the Commission within the
time periods specified by Rule 424(b) and Rule 430A under the
Securities Act and to file promptly all reports and any definitive
proxy or information statements required to be filed by the Company
with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of
the Exchange Act subsequent to the date of the
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Prospectus and for so long as the delivery of a prospectus is required
in connection with the offering or sale of the Shares; and to furnish
copies of the Prospectus to the Underwriters in New York City prior to
10:00 a.m., New York City time, on the Business Day next succeeding the
date of this Agreement in such quantities as the Representatives may
reasonably request;
(b) to deliver, at the expense of the Company, to the
Representatives four signed copies of the Registration Statement (as
originally filed) and each amendment thereto, in each case including
exhibits and documents incorporated by reference therein, and to each
other Underwriter a conformed copy of the Registration Statement (as
originally filed) and each amendment thereto, in each case without
exhibits but including the documents incorporated by reference therein
and, during the period mentioned in paragraph (e) below, to each of the
Underwriters as many copies of the Prospectus (including all amendments
and supplements thereto) and documents incorporated by reference
therein as the Representatives may reasonably request;
(c) before filing any amendment or supplement to the
Registration Statement or the Prospectus (other than documents filed
under the Exchange Act that are deemed to be incorporated by reference
therein), whether before or after the time the Registration Statement
becomes effective, to furnish to the Representatives a copy of the
proposed amendment or supplement for review and not to file any such
proposed amendment or supplement to which the Representatives
reasonably object;
(d) to advise the Representatives promptly, and to confirm
such advice in writing, (i) when the Registration Statement has become
effective, (ii) when any amendment to the Registration Statement has
been filed or becomes effective, (iii) when any supplement to the
Prospectus or any amended Prospectus has been filed and to furnish the
Representatives with copies thereof, (iv) of any request by the
Commission for any amendment to the Registration Statement or any
amendment or supplement to the Prospectus or for any additional
information, (v) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or of any
order preventing or suspending the use of any preliminary prospectus or
the Prospectus or the initiation or threatening of any proceeding for
that purpose, (vi) of the occurrence of any event, within the period
referenced in paragraph (e) below, as a result of which the Prospectus
as then amended or supplemented would include an untrue statement of a
material fact or omit to state any material fact necessary in order to
make the statements therein, in the light of the circumstances when the
Prospectus is delivered to a purchaser, not misleading, and (vii) of
the receipt by the Company of any notification with respect to any
suspension of the qualification of the Shares for offer and sale in any
jurisdiction or the initiation or threatening of any proceeding for
such purpose, and to use its commercially reasonable efforts to prevent
the
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issuance of any such stop order, or of any order preventing or
suspending the use of any preliminary prospectus or the Prospectus, or
of any order suspending any such qualification of the Shares, or
notification of any such order thereof and, if issued, to obtain as
soon as possible the withdrawal thereof;
(e) if, during such period of time after the first date of the
public offering of the Shares as in the opinion of counsel for the
Underwriters a prospectus relating to the Shares is required by law to
be delivered in connection with sales by the Underwriters or any
dealer, any event shall occur as a result of which it is necessary to
amend or supplement the Prospectus in order to make the statements
therein, in light of the circumstances when the Prospectus is delivered
to a purchaser, not misleading, or if it is necessary to amend or
supplement the Prospectus to comply with law, forthwith to prepare and
furnish, at the expense of the Company if delivery of the Prospectus is
required at any time prior to the expiration of nine months after the
Closing Date (and at the expense of such Underwriter if delivery of the
Prospectus is required more than nine months after the Closing Date),
to the Underwriters and to the dealers (whose names and addresses the
Representatives will furnish to the Company) to which Shares may have
been sold by the Representatives on behalf of the Underwriters and to
any other dealers upon request, such amendments or supplements to the
Prospectus as may be necessary 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 will comply with law; it being
understood that the foregoing obligations include preparing and
furnishing a Swedish-language prospectus if required by the Swedish Act
in the opinion of counsel to the Underwriters;
(f) to endeavor to qualify the Shares for offer and sale under
the securities or Blue Sky laws of such jurisdictions as the
Representatives shall reasonably request and to continue such
qualification in effect so long as reasonably required for distribution
of the Shares; PROVIDED that the Company shall not be required to file
a general consent to service of process, to register as a broker or
dealer, or to expose itself to taxation in any such jurisdiction;
(g) to make generally available to its security holders and to
the Representatives as soon as practicable an earnings statement
covering a period of at least twelve months beginning with the first
fiscal quarter of the Company occurring after the effective date of the
Registration Statement, which shall satisfy the provisions of Section
11(a) of the Securities Act and Rule 158 of the Commission promulgated
thereunder;
(h) during the period of three years after the date of this
Agreement, to furnish to the Representatives copies of all reports or
other communications (financial or other) furnished to holders of the
Shares, and copies of any reports and financial
-13-
statements furnished to or filed with the Commission or any national
securities exchange;
(i) for a period of 90 days after the date of the Prospectus
not to (i) offer, pledge, announce the intention to sell, 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, 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, option, future, forward or other agreement that transfers, 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 without the prior written consent of
▇.▇. ▇▇▇▇▇▇ Securities Inc., other than the Shares to be sold hereunder
and any shares of Common Stock of the Company issued upon the
conversion of any convertible preferred stock or the exercise of
options and warrants outstanding on the date of the Prospectus or
options granted under existing employee stock option plans or the
issuance of any rights by the Company;
(j) to use the net proceeds received by the Company from the
sale of the Shares pursuant to this Agreement in the manner specified
in the Prospectus under the caption "Use of Proceeds";
(k) to use its best efforts to list, subject to notice of
issuance, the Shares on the American Stock Exchange and the Stockholm
Stock Exchange (the "Exchanges"); and
(l) whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, to pay or
cause to be paid all costs and expenses incident to the performance of
its obligations hereunder, including without limiting the generality of
the foregoing, all costs and expenses (i) incident to the preparation,
issuance, execution and delivery of the Shares, (ii) incident to the
preparation, printing and filing under the Securities Act of the
Registration Statement, the Prospectus and any preliminary prospectus
(including in each case all exhibits, amendments and supplements
thereto), (iii) incurred in connection with the registration or
qualification of the Shares under the laws of such jurisdictions as the
Representatives may designate (including fees of counsel for the
Underwriters and its disbursements not to exceed $_________ in the
aggregate), (iv) in connection with the listing of the Shares on the
Exchanges, (v) related to the filing with, and clearance of the
offering by, the National Association of Securities Dealers, Inc., (vi)
in connection with the printing (including word processing and
duplication costs) and delivery of this Agreement, any Blue Sky Survey
and the furnishing to the Underwriters and dealers of copies of the
Registration Statement and the Prospectus, including mailing and
-14-
shipping, as herein provided, (vii) any expenses incurred by the
Company in connection with a "road show" presentation to potential
investors, (viii) the cost of preparing stock certificates and (ix) the
cost and charges of any transfer agent and any registrar.
6. The several obligations of the Underwriters hereunder to
purchase the Shares on the Closing Date or the Additional Closing Date, as the
case may be, are subject to the performance by the Company of its obligations
hereunder and to the following additional conditions:
(a) the Registration Statement shall have become effective (or
if a post-effective amendment is required to be filed under the
Securities Act, such post-effective amendment shall have become
effective) not later than 5:00 P.M., New York City time, on the date
hereof; and no stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment shall be in
effect, and no proceedings for such purpose shall be pending before or
threatened by the Commission; the Prospectus shall have been filed with
the Commission pursuant to Rule 424(b) within the applicable time
period prescribed for such filing by the rules and regulations under
the Securities Act and in accordance with Section 5(a) hereof; and all
requests for additional information shall have been complied with to
the satisfaction of the Representatives;
(b) the representations and warranties of the Company
contained herein are true and correct on and as of the Closing Date or
the Additional Closing Date, as the case may be, as if made on and as
of the Closing Date or the Additional Closing Date, as the case may be,
and the Company shall have complied with all agreements and all
conditions on its part to be performed or satisfied hereunder at or
prior to the Closing Date or the Additional Closing Date, as the case
may be;
(c) subsequent to the execution and delivery of this Agreement
and prior to the Closing Date or the Additional Closing Date, as the
case may be, there shall not have occurred any downgrading, nor shall
any notice have been given of (i) any downgrading, (ii) any intended or
potential downgrading or (iii) any review or possible change that does
not indicate an improvement, in the rating accorded any securities of
or guaranteed by 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;
(d) since the respective dates as of which information is
given in the Prospectus there shall not have been any change in the
capital stock or long-term debt of the Company or any Material Adverse
Change, or any development involving a prospective Material Adverse
Change, otherwise than as set forth or contemplated in the Prospectus,
the effect of which in the judgment of the Representatives makes it
-15-
impracticable or inadvisable to proceed with the public offering or the
delivery of the Shares on the Closing Date or the Additional Closing
Date, as the case may be, on the terms and in the manner contemplated
in the Prospectus; and the Company has not sustained since the date of
the latest audited financial statements included or incorporated by
reference in the Prospectus any material loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus;
(e) the Representatives shall have received on and as of the
Closing Date or the Additional Closing Date, as the case may be, a
certificate of two executive officers of the Company, one of which with
specific knowledge about the Company's financial matters, satisfactory
to the Representatives to the effect set forth in subsections (a)
through (d) (with respect to the respective representations,
warranties, agreements and conditions of the Company) of this Section
and to the further effect that there has not occurred any Material
Adverse Change, or any development involving a prospective Material
Adverse Change, from that set forth or contemplated in the Registration
Statement;
(f) ▇▇▇▇▇▇ & ▇▇▇▇▇▇, special counsel for the Company, shall
have furnished to the Representatives their written opinions, dated the
Closing Date or the Additional Closing Date, as the case may be, in
form and substance satisfactory to the Representatives, to the effect
that:
(i) the Company is validly existing as a corporation
in good standing under the laws of its jurisdiction of
incorporation, with corporate power and authority to own its
properties and conduct its business as described in the
Prospectus;
(ii) the Company has been duly qualified as a foreign
corporation for the transaction of business and is in good
standing under the laws of ____________________;
(iii) this Agreement has been duly authorized,
executed and delivered by the Company;
(iv) the authorized capital stock of the Company
conforms as to legal matters to the description thereof
contained or incorporated by reference in the Prospectus;
(v) the Shares to be issued and sold by the Company
hereunder have been duly authorized, and when delivered to and
paid for by the Underwriters
-16-
in accordance with the terms of this Agreement, will be
validly issued, fully paid and non-assessable and the issuance
of the Shares is not subject to any preemptive or similar
rights known to such counsel;
(vi) the statements in the Prospectus under "Material
U.S. Federal Tax Considerations for Non-U.S. Holders of Common
Stock", and in the Registration Statement in Item 15, insofar
as such statements constitute a summary of the terms of the
legal matters or documents referred to therein, fairly present
the information called for with respect to such legal matters
or documents;
(vii) the Registration Statement has been declared
effective under the Securities Act and, to the knowledge of
such counsel, no order preventing or suspending the use of any
preliminary prospectus has been issued by the Commission and
no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceeding for that purpose
has been instituted or threatened by the Commission;
(viii) such counsel is of the opinion that the
Registration Statement and the Prospectus and any amendments
and supplements thereto (other than the documents incorporated
by reference therein and the financial statements and related
schedules therein, as to which such counsel need express no
opinion) comply as to form in all material respects with the
requirements of the Securities Act;
(ix) the issue and sale of the Shares being delivered
on the Closing Date or the Additional Closing Date, as the
case may be, and the performance by the Company of its
obligations under this Agreement and the consummation of the
transactions contemplated herein will not conflict with or
result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any agreement or
instrument filed as an exhibit to the Company's Annual Report
on Form 10-K for the year ended September 30, 1999 or to any
statements, reports or other information filed with the
Commission thereafter to which the Company is a party or by
which the Company is bound or to which any of the property or
assets of the Company is subject, except for such breaches or
violations that would not, individually or in the aggregate,
have a Material Adverse Effect; nor will any such action
result in any breach or violation of the provisions of the
certificate of incorporation or the by-laws of the Company;
nor will any such action result in breach or violation of any
applicable law or statute or, to the knowledge of such
counsel, any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the
Company or any of its properties, except for such breaches or
-17-
violations that would not, individually or in the aggregate,
have a Material Adverse Effect;
(x) no consent, approval, authorization, order,
registration or qualification of or with any court or
governmental agency or body is required for the issue and sale
of the Shares or the consummation of the other transactions
contemplated by this Agreement, except such consents,
approvals, authorizations, orders, registrations or
qualifications as have been obtained or made under the
Securities Act; and as may be required under state securities
or Blue Sky laws in connection with the purchase and
distribution of the Shares by the Underwriters;
(xi) the Company is not and, after giving effect to
the offering and sale of the Shares, will not be an
"investment company" or entity "controlled" by an "investment
company", as such terms are defined in the Investment Company
Act;
(xii) the statements in the Prospectus under "Risk
Factors--Industry Risks--Our product candidates are subject to
significant government regulation which could increase the
cost of developing our products and delay or prevent the sales
of our products" and "Business--Government Regulation",
insofar as such statements constitute a summary of applicable
law and regulatory process, fairly summarize the information
contained therein; and
(xiii) the descriptions in the Registration Statement
and the Prospectus of the legal and governmental proceedings
and procedures by or before the FDA or any foreign, state or
local governmental body exercising comparable authority fairly
summarize the information contained therein.
In rendering such opinions, such counsel may rely (A) as to
matters involving the application of laws other than the laws of the
United States, the District of Columbia and the States of Delaware and
New York, to the extent such counsel deems proper and to the extent
specified in such opinion, if at all, upon an opinion or opinions (in
form and substance reasonably satisfactory to Underwriters' counsel) of
other counsel reasonably acceptable to the Underwriters' counsel,
familiar with the applicable laws; and (B) as to matters of fact, to
the extent such counsel deems proper, on certificates of responsible
officers of the Company and certificates or other written statements of
officials of jurisdictions having custody of documents respecting the
corporate existence or good standing of the Company. The opinion of
such counsel for the Company shall state that the opinion of any such
other counsel upon which they relied is in form satisfactory to such
counsel and, in such counsel's opinion, the Underwriters and they are
justified in relying thereon. Such counsel also shall separately
deliver a letter
-18-
stating that (i) nothing has caused such counsel to believe that (other
than the financial statements and related schedules and other financial
and statistical data therein and documents incorporated by reference in
the Registration Statement, as to which such counsel need express no
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 that the Prospectus, as amended or
supplemented, if applicable, contained any untrue statement of a
material fact or omitted to state a material fact necessary in order to
make the statements therein, in light of the circumstances under which
they were made, not misleading; (ii) there are no legal proceedings
pending or threatened against the Company that are required to be
disclosed in the Registration Statement or Prospectus, other than those
disclosed or incorporated by reference therein; and (iii) there are no
contracts or documents of a character required to be described in the
Registration Statement or Prospectus or to be filed as exhibits to the
Registration Statement that are not described or referred to therein or
so filed. With respect to the matters to be covered above counsel may
state their belief is based upon their participation in the preparation
of the Registration Statement and the Prospectus and any amendment or
supplement thereto (other than the documents incorporated by reference
therein) and review and discussion of the contents thereof (including
the documents incorporated by reference therein) but is without
independent check or verification except as specified.
The opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇ described above shall be
rendered to the Underwriters at the request of the Company and shall so
state therein.
(g) Knobbe, Martens, ▇▇▇▇▇ & Bear LLP, counsel for the
Company, shall have furnished to the Representatives their written
opinions, dated the Closing Date or the Additional Closing Date, as the
case may be, in form and substance satisfactory to the Representatives,
to the effect that:
(i) the statements in the Prospectus under "Risk
Factors--Industry Risks--If we fail to secure adequate
protection of our intellectual property or the right to use
certain intellectual property of others, we may not be able to
protect our products and technologies from competitors" and
"Business--Patents, Licenses and Proprietary Rights", insofar
as such statements constitute a summary of the Company's
Intellectual Property, fairly present the information called
for with respect thereto;
(ii) to the knowledge of such counsel, the Company
owns, possesses or has the right to use the Intellectual
Property employed by it in connection with the business
conducted by it as of the date hereof;
-19-
(iii) to the knowledge of such counsel, the Company
has not received any notice of infringement of or conflict
with, and such counsel has no knowledge of any infringement of
or conflict with, asserted rights of others with respect to
the Company's Intellectual Property which could reasonably be
expected to result in a Material Adverse Effect;
(iv) to the knowledge of such counsel, the
discoveries, inventions, products or processes of the Company
referred to in the Prospectus do not infringe or conflict with
any right or patent of any third party, or any discovery,
invention, product or process which is the subject of a patent
application filed by any third party;
(v) to the knowledge of such counsel, except as
described in the Prospectus, the Company is not obligated to
pay a royalty, grant a license or provide other consideration
to any third party in connection with its patents, patent
rights, licenses, inventions, trademarks, service marks, trade
names, copyrights and know-how; and
(vi) to the knowledge of such counsel, no third
party, including any academic or governmental organization,
possesses rights to the Company's Intellectual Property which,
if exercised, could enable such third party to develop
products competitive with those of the Company or could
reasonably be expected to have a Material Adverse Effect.
In rendering such opinions, such counsel may rely as to
matters of fact, to the extent such counsel deems proper, on
certificates of responsible officers of the Company.
The opinion of Knobbe, Martens, ▇▇▇▇▇ & Bear LLP described
above shall be rendered to the Underwriters at the request of the
Company and shall so state therein.
(h) on the date of this Agreement and also on the Closing Date
or Additional Closing Date, as the case may be, KPMG LLP shall have
furnished to you letters, dated the respective dates of delivery
thereof, in form and substance satisfactory to you, containing
statements and information of the type customarily 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;
(i) the Representatives shall have received on and as of the
Closing Date or Additional Closing Date, as the case may be, an opinion
of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel to the Underwriters, with respect
to the due authorization and valid
-20-
issuance of the Shares, the Registration Statement, the Prospectus and
other related matters as the Representatives may reasonably request,
and such counsel shall have received such papers and information as
they may reasonably request to enable them to pass upon such matters;
(j) the Shares to be delivered on the Closing Date or
Additional Closing Date, as the case may be, shall have been approved
for listing on the Exchanges, subject only to official notice of
issuance;
(k) on or prior to the Closing Date or Additional Closing
Date, as the case may be, the Company shall have furnished to the
Representatives such further certificates and documents as the
Representatives shall reasonably request;
(l) the "lock-up" agreements, each substantially in the form
of Exhibit A hereto, between you and each of the executive officers and
directors [and certain stockholders] 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 or Additional Closing
Date, as the case may be.
7. The Company agrees to indemnify and hold harmless each
Underwriter, each affiliate of any Underwriter which assists such Underwriter in
the distribution of the Shares and each person, if any, who controls any
Underwriter within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act, from and against any and all losses, claims,
damages and liabilities in any jurisdiction (including, without limitation, the
legal fees and other expenses incurred in connection with any suit, action or
proceeding or any claim asserted) caused by any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement or
the Prospectus (as amended or supplemented if the Company shall have furnished
any amendments or supplements thereto) or any preliminary prospectus, 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
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with information relating to any Underwriter
furnished to the Company in writing by such Underwriter through the
Representatives expressly for use therein; PROVIDED that the foregoing indemnity
with respect to any preliminary prospectus shall not inure to the benefit of any
Underwriter (or to the benefit of any person controlling such Underwriter) from
whom the person asserting any such losses, claims, damages or liabilities
purchased Shares if such untrue statement or omission or alleged untrue
statement or omission made in such preliminary prospectus is eliminated or
remedied in the Prospectus (as amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) and, if required by law, a
-21-
copy of the Prospectus (as so amended or supplemented) shall not have
been furnished to such person at or prior to the written confirmation
of the sale of such Shares to such person.
Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers who sign
the Registration Statement and each person who controls the Company within the
meaning of 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 each Underwriter,
but only with reference to information relating to such Underwriter furnished to
the Company in writing by such Underwriter through the Representatives expressly
for use in the Registration Statement, the Prospectus, any amendment or
supplement thereto, or any preliminary prospectus.
If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any person in respect of which indemnity may be sought pursuant to the preceding
paragraphs, such person (the "Indemnified Person") shall promptly notify the
person against whom such indemnity may be sought (the "Indemnifying Person") in
writing, and the Indemnifying Person, upon request of the Indemnified Person,
shall retain counsel reasonably satisfactory to the Indemnified Person to
represent the Indemnified Person and any others the Indemnifying Person may
designate in such proceeding and shall pay the reasonable fees and expenses of
such counsel related to such proceeding. In any such proceeding, any Indemnified
Person shall have the right to retain its own counsel, but the reasonable fees
and expenses of such counsel shall be at the expense of such Indemnified Person
unless (i) the Indemnifying Person and the Indemnified Person shall have
mutually agreed to the contrary, (ii) the Indemnifying Person has failed within
a reasonable time to retain counsel reasonably satisfactory to the Indemnified
Person or (iii) the named parties in any such proceeding (including any
impleaded parties) include both the Indemnifying Person and the Indemnified
Person 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 Person shall not, 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 Indemnified Persons, and that all such fees and expenses shall
be reimbursed as they are incurred. Any such separate firm for the Underwriters,
each affiliate of any Underwriter which assists such Underwriter in the
distribution of the Shares and such control persons of Underwriters shall be
designated in writing by ▇.▇. ▇▇▇▇▇▇ Securities Inc. and any such separate firm
for the Company, its directors, its officers who sign the Registration Statement
and such control persons of the Company shall be designated in writing by the
Company. The Indemnifying Person 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
Person agrees to indemnify any Indemnified Person from and against any loss or
liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an Indemnified
-22-
Person shall have requested an Indemnifying Person to reimburse the
Indemnified Person for fees and expenses of counsel as contemplated by the
second and third sentences of this paragraph, the Indemnifying Person 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 90 days
after receipt by such Indemnifying Person of the aforesaid request and (ii)
such Indemnifying Person shall not have reimbursed the Indemnified Person in
accordance with such request prior to the date of such settlement. No
Indemnifying Person shall, without the prior written consent of the
Indemnified Person, effect any settlement of any pending or threatened
proceeding in respect of which any Indemnified Person is or could have been a
party and indemnity could have been sought hereunder by such Indemnified
Person, unless such settlement includes an unconditional release of such
Indemnified Person from all liability on claims that are the subject matter
of such proceeding.
If the indemnification provided for in the preceding
paragraphs of this Section 7 is unavailable to an Indemnified Person or
insufficient in respect of any losses, claims, damages or liabilities referred
to therein, then each Indemnifying Person under such paragraph, in lieu of
indemnifying such Indemnified Person thereunder, shall contribute to the amount
paid or payable by such Indemnified Person 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 Underwriters
on the other hand from the offering of the Shares or (ii) if the allocation
provided by clause (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 (i) above but also the relative fault of the Company on the one
hand and the Underwriters 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 Underwriters on the other hand shall be
deemed to be in the same respective proportions as the net proceeds from the
offering (before deducting expenses) received by the Company and the total
underwriting discounts received by the Underwriters, in each case as set forth
in the table on the cover of the Prospectus, bear to the aggregate initial
public offering price of the Shares. The relative fault of the Company 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 Company or by the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
The Company and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section 7 were determined by
PRO RATA allocation (even if the Underwriters were treated as one entity for
such purposes) or by any other method of allocation that does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an Indemnified Person as a result of
the
-23-
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 incurred by such Indemnified Person in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7, in no event shall an
Underwriter 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 Underwriters' obligations to
contribute pursuant to this Section 7 are several in proportion to the
respective number of Shares set forth opposite their names in Schedule I hereto,
and not joint.
The remedies provided for in this Section 7 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.
The indemnity and contribution agreements contained in this
Section 7 and the representations and warranties of the Company set forth 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 or by or on
behalf of the Company, its officers or directors or any other person controlling
the Company and (iii) acceptance of and payment for any of the Shares.
8. Notwithstanding anything herein contained, this Agreement
(or the obligations of the several Underwriters with respect to the Option
Shares) may be terminated in the absolute discretion of the Representatives, by
notice given to the Company, if after the execution and delivery of this
Agreement and prior to the Closing Date (or, in the case of the Option Shares,
prior to the Additional 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 or the American Stock Exchange or the National Association
of Securities Dealers, Inc. or the Stockholm Stock Exchange, (ii) trading of any
securities of or guaranteed by 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 the judgment of the Representatives, is material and
adverse and which, in the judgment of the Representatives, makes it
impracticable to market the Shares being delivered at the Closing Date or the
Additional Closing Date, as the case may be, on the terms and in the manner
contemplated in the Prospectus.
-24-
9. This Agreement shall become effective upon the later of (x)
execution and delivery hereof by the parties hereto and (y) release of
notification of the effectiveness of the Registration Statement (or, if
applicable, any post-effective amendment) by the Commission.
If on the Closing Date or the Additional Closing Date, as the
case may be, any one or more of the Underwriters shall fail or refuse to
purchase Shares which it 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 Shares to be purchased on such date, the other
Underwriters shall be obligated severally in the proportions that the number of
Shares set forth opposite their respective names in Schedule I bears to the
aggregate number of Underwritten Shares set forth opposite the names of all such
non-defaulting Underwriters, or in such other proportions as the Representatives
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 Section 1 be increased pursuant to this Section 9 by an
amount in excess of one-tenth of such number of Shares without the written
consent of such Underwriter. If on the Closing Date or the Additional Closing
Date, as the case may be, any Underwriter or Underwriters shall fail or refuse
to purchase Shares which it or they have agreed to purchase hereunder on such
date, and the aggregate number of Shares with respect to which such default
occurs is more than one-tenth of the aggregate number of Shares to be purchased
on such date, and arrangements satisfactory to the Representatives and the
Company for the purchase of such Shares are not made within 36 hours after such
default, this Agreement (or the obligations of the several Underwriters to
purchase the Option Shares, as the case may be) 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 (or, in the case of the Option Shares, the Additional 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. 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.
10. If this Agreement shall be terminated by the Underwriters,
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 or any condition of the Underwriters' obligations cannot be
fulfilled, the Company agrees to 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 expenses of their counsel)
reasonably
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incurred by the Underwriters in connection with this Agreement or the
offering contemplated hereunder.
11. This Agreement shall inure to the benefit of and be
binding upon the Company, the Underwriters, each affiliate of any Underwriter
which assists such Underwriter in the distribution of the Shares, any
controlling persons referred to herein and their respective successors and
assigns. Nothing expressed or mentioned in this Agreement is intended or shall
be construed to give any other person, firm or corporation any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision herein contained. No purchaser of Shares from any Underwriter shall be
deemed to be a successor by reason merely of such purchase.
12. Any action by the Underwriters hereunder may be taken by
the Representatives jointly or by ▇.▇. ▇▇▇▇▇▇ Securities Inc. alone on behalf of
the Underwriters, and any such action taken by the Representatives jointly or by
▇.▇. ▇▇▇▇▇▇ Securities Inc. alone shall be binding upon the Underwriters. All
notices and other communications hereunder shall be in writing and shall be
deemed to have been duly given if mailed or transmitted by any standard form of
telecommunication. Notices to the Underwriters shall be given to the
Representatives, c/o ▇.▇. ▇▇▇▇▇▇ Securities Inc., ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇ (telefax: 212-648-5705); Attention: Syndicate Department. Notices to
the Company shall be given to it at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (telefax: 858-453-5005); Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇.
13. This Agreement may be signed in counterparts, each of
which shall be an original and all of which together shall constitute one and
the same instrument.
14. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE
CONFLICTS OF LAWS PROVISIONS THEREOF.
-26-
If the foregoing is in accordance with your understanding,
please sign and return four counterparts hereof.
Very truly yours,
MAXIM PHARMACEUTICALS, INC.
By:
---------------------------
Name:
Title:
Accepted: __________, 2000
▇.▇. ▇▇▇▇▇▇ Securities Inc.
Prudential Securities Incorporated
▇▇▇▇▇▇ Fondkommission AB
Acting severally on behalf
of themselves and the
several Underwriters listed
in Schedule I hereto.
By: ▇.▇. ▇▇▇▇▇▇ Securities Inc.
Acting on behalf of itself and the
several Underwriters listed in
Schedule I hereto.
By:
---------------------------------
Title:
SCHEDULE I
Number of Shares
UNDERWRITER To Be Purchased
----------- ---------------------
▇.▇. ▇▇▇▇▇▇ Securities Inc.......................................
Prudential Securities Incorporated...............................
▇▇▇▇▇▇ Fondkommission AB.........................................
---------------------
Total................................
=====================
EXHIBIT A
LOCK-UP AGREEMENT
February ___, 2000
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
PRUDENTIAL SECURITIES INCORPORATED
▇▇▇▇▇▇ FONDKOMMISSION AB
As Representatives of the several
Underwriters named in Schedule I to
the Underwriting Agreement referred to below
c/o ▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: Maxim Pharmaceuticals, Inc. -
Public Offering of 2,500,000 Shares of Common Stock
---------------------------------------------------
Ladies and Gentlemen:
The undersigned understands that you, as Representatives of
the several Underwriters, propose to enter into an Underwriting Agreement (the
"UNDERWRITING AGREEMENT") with Maxim Pharmaceuticals, Inc., a Delaware
corporation (the "COMPANY"), providing for the public offering (the "PUBLIC
OFFERING") by the several Underwriters named in Schedule I to the Underwriting
Agreement (the "UNDERWRITERS") of Common Stock, $0.001 par value (the "COMMON
STOCK"), of the Company. Capitalized terms used herein and not otherwise defined
shall have the meanings set forth in the Underwriting Agreement.
In consideration of the Underwriters' agreement to purchase
and make the Public Offering of the Common Stock, and for other good and
valuable consideration receipt of which is hereby acknowledged, the undersigned
hereby agrees that, without the prior written consent of ▇.▇. ▇▇▇▇▇▇ Securities
Inc. on behalf of the Underwriters, the undersigned will not, directly or
indirectly, during the period ending 90 days after the date of the prospectus
relating to the Public Offering (the "PROSPECTUS"), (1) offer, pledge, announce
the intention to sell, 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, or otherwise transfer or dispose of any shares of Common
Stock or any securities of the Company which are substantially similar to the
Common Stock, including but not limited to any securities convertible into or
exercisable or exchangeable for, or that represent the right to receive, Common
Stock (including, but not limited to, Common Stock which may be deemed to be
beneficially owned by the undersigned in accordance with the rules and
regulations of the
-2-
Securities and Exchange Commission and securities which may be issued upon
exercise of a stock option or warrant) or (2) enter into any swap, option,
future, forward or other agreement that transfers, in whole or in part, any of
the economic consequences of ownership of the Common Stock or any securities of
the Company which are substantially similar to the Common Stock, including, but
not limited to, any security convertible into or exercisable or exchangeable
for, or that represent the right to receive, 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, other than pursuant
to the exercise of stock options and warrants outstanding on the date of the
Prospectus and the conversion of Series B Preferred Stock, $.001 par value, of
the Company. In addition, the undersigned agrees that, without the prior written
consent of ▇.▇. ▇▇▇▇▇▇ Securities Inc. on behalf of the Underwriters, it will
not, during the period 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 substantially similar securities of the Company,
including but not limited to any security convertible into or exercisable or
exchangeable for Common Stock.
In furtherance of the foregoing, the Company and any duly
appointed transfer agent for the registration or transfer of the securities
described herein are hereby authorized to decline to make any transfer of
securities if such transfer would constitute a violation or breach of this
Lock-Up Agreement.
The undersigned hereby represents and warrants that the
undersigned has full power and authority to enter into this Lock-Up Agreement.
All authority herein conferred or agreed to be conferred and any obligations of
the undersigned shall be binding upon the successors, assigns, heirs or personal
representatives of the undersigned.
The undersigned understands that, if the Underwriting
Agreement does not become effective, or if the Underwriting Agreement (other
than the provisions thereof which survive termination) shall terminate or be
terminated prior to payment for and delivery of the Common Stock to be sold
thereunder, the undersigned shall be released from all obligations under this
Lock-Up Agreement.
The undersigned understands that the Underwriters are entering
into the Underwriting Agreement and proceeding with the Public Offering in
reliance upon this Lock-Up Agreement.
THIS LOCK-UP AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
CONFLICT OF LAWS PRINCIPLES THEREOF.
-3-
Very truly yours,
---------------------------------
Name:
Title:
-4-
Accepted as of the date first set forth above:
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
PRUDENTIAL SECURITIES INCORPORATED
▇▇▇▇▇▇ FONDKOMMISSION AB
Acting severally on behalf of themselves and the
several Underwriters named in Schedule I to the
Underwriting Agreement
By: ▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
By:
------------------------------
Name:
Title: