EXHIBIT 10.20
September 17, 1997
CONFIDENTIAL
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Maxim Pharmaceuticals, Inc.
0000 Xxxxxxx Xxxx Xxxx
Xxxxx 000
Xxx Xxxxx, XX 00000
Attention: Xx. Xxxxx X. Xxxxxxxxx
Chief Executive Officer
Dear Xxxxx:
Xxxxxx & Xxxxxxx, Inc. ("Xxxxxx") is pleased to act as exclusive
financial advisor to Maxim Pharmaceuticals, Inc. ("Maxim" or the "Company")
in connection with providing general corporate finance advisory services with
respect to financial matters to the Company. This letter (the "Agreement")
confirms the terms of our engagement.
Within the scope of Xxxxxx'x engagement hereunder, Xxxxxx agrees to (i)
analyze the business, operations, finances, and prospects of the Company (ii)
advise and assist the management and Board of Directors of the Company in
evaluating financing options reasonably available to the Company (a
"Financing") which may include (a) a public debt or equity financing (the
"Public Offering") or (b) a private debt or equity financing (the "Private
Placement"), (iii) take an active interest in the Company and its common
stock including facilitating and executing trades in the Company's stock on
behalf of Xxxxxx clients on the American Stock Exchange or making a market in
the Company's stock on the NASDAQ, as appropriate, (iv) introduce the Company
to select institutional investors, and (iv) introduce the Company to
qualified financial institutions to provide corporate finance services to the
Company, as appropriate. In the event of a Public Offering, Xxxxxx may
assist the Company in selecting an underwriter or underwriters to be retained
by the Company in order to execute the Public Offering. In the event that
the Company pursues a Private Placement, Xxxxxx may assist in choosing an
agent to be retained by the Company to execute the Private Placement. Should
Xxxxxx act as an underwriter in the Public Offering or as an agent in the
Private Placement, the terms and conditions of such arrangement shall be
embodied in an additional engagement letter to be signed at a later date.
In consideration for Xxxxxx'x financial advisory services hereunder, the
Company will pay Xxxxxx a non-refundable retention fee of $200,000, (the
"Financial Advisory Fee") payable in cash, with payment due monthly, in
advance, in twelve equal payments. In the event of a
Maxim Pharmaceuticals, Inc.
September 17, 1997
Page 2
Financing, payment of the Financial Advisory Fee shall be accelerated so that
the Company will pay Xxxxxx at the closing of such Financing the difference
between $200,000 and the total amount of the Financial Advisory Fee paid to
Xxxxxx immediately prior to the closing of such Financing.
In addition to any fees payable to Xxxxxx hereunder, the Company will
reimburse Xxxxxx, upon request made from time to time by Xxxxxx, for all of
Xxxxxx'x reasonable out-of-pocket expenses incurred in connection with this
engagement. Xxxxxx will receive prior approval from the Company for
reimbursement of expenses in excess of $25,000.
The Company will furnish Rodman with such information as Xxxxxx believes
appropriate to its assignment hereunder (all such information so furnished
being the "Information"). The Company recognizes and confirms that Xxxxxx
(a) will use and rely primarily on the Information and on information
available from generally recognized public sources in performing the services
contemplated by this Agreement without having independently verified the
same, (b) does not assume responsibility for the accuracy or completeness of
the Information and such other information and (c) will not make an appraisal
of any assets of the Company. To the best of the Company's knowledge, the
Information to be furnished by the Company, when delivered, will be true and
correct in all material respects and will not contain any material
misstatement of fact or omit to state any material fact necessary to make the
statements contained therein not misleading. The Company will promptly
notify Xxxxxx if it learns of any material inaccuracy or misstatement in, or
material omission from, any Information theretofore delivered to Xxxxxx.
The Company agrees to the indemnification and other agreements set forth
in the Indemnification Provisions attached hereto, the provisions of which
are incorporated herein by reference and shall survive the termination,
expiration or supersession of this Agreement.
Xxxxxx'x engagement hereunder will be for the period of one (1) year
from the date the Agreement is executed. The engagement may be terminated by
either the Company or Xxxxxx at any time upon written notice to that effect
to the other party, it being understood that (i) the provisions relating to
the payment of fees and expenses and indemnification will survive any such
termination, and (ii) notwithstanding the foregoing, should Xxxxxx terminate
the engagement prior to its expiration (a "Xxxxxx Termination"), Xxxxxx
agrees to pay to the Company an amount equal to (a) the total amount received
by or due to Xxxxxx at the time of the Xxxxxx Termination less (b) the amount
equal to the number of months (or part thereof) elapsed since execution of
the Agreement times $16,667. In no case shall Xxxxxx, in the event of a
Xxxxxx Termination, be required to pay an amount to the Company greater than
the aggregate amount received by Xxxxxx under the Financial Advisory Fee.
This Agreement will be governed by, and construed in accordance with,
the laws of the State of New York without giving effect to the conflict of
law principles thereof. This Agreement may not be assigned by either party
without the prior written consent of the other
Maxim Pharmaceuticals, Inc.
September 17, 1997
Page 3
party. Any right to trial by jury with respect to any dispute arising under
this Agreement or any transaction or conduct in connection herewith is
waived. Any dispute arising under this Agreement shall be brought in the
courts of the State of New York or of the United States of America for the
Southern District of New York and, by execution and delivery of this
Agreement, the Company hereby accepts for itself and in respect of its
property, generally and unconditionally, the jurisdiction of the aforesaid
courts.
This Agreement (including the attached Indemnification Provisions)
embodied the entire agreement and understanding between the parties hereto
and supersedes all prior agreements and understanding relating to the subject
matter hereof. If any provision of this Agreement is determined to be invalid
or unenforceable in any respect, such determination will not affect such
provision in any other respect or any other provision of this Agreement,
which will remain in full force and effect. This Agreement may not be
amended or otherwise modified or waived except by an instrument in writing
signed by both Xxxxxx and the Company.
Please confirm that the foregoing correctly sets forth our agreement by
signing and returning to Xxxxxx the enclosed duplicate copy of this Agreement.
Very truly yours,
XXXXXX & XXXXXXX, INC.
By: /s/ XXXX X. XXXXXXX
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Xxxx X. Xxxxxxx
Senior Director
Accepted and Agreed to as of
the date first written above:
MAXIM PHARMACEUTICALS, INC.
By: _______________________________
Title: ______________________________
INDEMNIFICATION PROVISIONS
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In accordance with the engagement of Xxxxxx & Xxxxxxx, Inc. ("Xxxxxx")
by Maxim Pharmaceuticals, Inc. (the "Company") pursuant to letter agreement
dated September 17, 1997 between the Company and Xxxxxx, as it may be amended
from time to time (the "Agreement"), the Company hereby agrees as follows:
1. To the extent permitted by law, the Company will indemnify Xxxxxx and its
affiliates, stockholders, directors, officers, employees and controlling
persons (within the meaning of Section 15 of the Securities Act of 1933, as
amended, or Section 20 of the Securities Exchange Act of 1934) against all
losses, claims, damages or liabilities, as the same are incurred (including
the reasonable fees and expenses of counsel), relating to or arising out of
its activities hereunder, except to the extent that any losses, claims,
damages or liabilities (or actions in respect thereof) are found in a final
judgment by a court of law to have resulted from Xxxxxx'x willful
misconduct or gross negligence in performing the services described herein.
To the extent permitted by law, Xxxxxx will indemnify the Company and its
affiliates, stockholders, directors, officers, employees and controlling
persons against all losses, claims, damages or liabilities as the same are
incurred (including the reasonable fees and expenses of counsel), relating
to or arising out of Xxxxxx'x activities hereunder caused by, or resulting
from or arising directly and primarily out of Xxxxxx'x conduct and, the
willful misconduct or gross negligence of Xxxxxx in performing the services
described in the Agreement.
2. Promptly after receipt by Xxxxxx of notice of any claim or the commencement
of any action or proceeding with respect to which Xxxxxx is entitled to
indemnify hereunder, Xxxxxx will notify the Company in writing of such
claim or of the commencement of such action or proceeding, and the Company
will assume the defense of such action or proceeding and will employ
counsel satisfactory to Xxxxxx which approval shall not be unreasonably
withheld, and will pay the fees and expenses of such counsel.
Notwithstanding the preceding sentence, Xxxxxx will be entitled to employ
counsel separate from counsel for the Company and from any other party in
such action if Xxxxxx reasonably determines that a conflict of interests
exists which makes representation by counsel chosen by the Company not
advisable. In such event, the reasonable fees and disbursements of such
separate counsel will be paid by the Company.
3. The Company agrees to notify Xxxxxx promptly of the assertion against it or
any other person of any claim of the commencement of any action or
proceeding relating to a transaction contemplated by this Agreement.
4. If for any reason the foregoing indemnity is unavailable to Xxxxxx or
insufficient to hold Xxxxxx harmless, then the Company shall contribute to
the amount paid or payable by Xxxxxx as a result of such losses, claims,
damages or liabilities in such proportion as is
Maxim Pharmaceuticals, Inc.
Indemnification Provisions
September 17, 1997
Page 2
appropriate to reflect the relative fault of the Company on the one hand
and Xxxxxx on the other that resulted in such losses claim, damages or
liabilities, as well as any relevant equitable considerations. The
amounts paid or payable by a party in respect of losses, claims, damages
and liabilities referred to above shall be deemed to include any legal or
other fees and expense incurred in defending any litigation, proceeding
or other action or claim. Notwithstanding the provisions hereof, Xxxxxx'x
share of the liability hereunder shall not be in excess of the amount of
fees actually received by Xxxxxx under the Agreement (excluding any
amounts received as reimbursement of expenses incurred by Xxxxxx).
5. It is understood and agreed that, in connection with Xxxxxx'x engagement by
the Company, Xxxxxx may also be engaged to act for the Company in one or
more additional capacities, and the terms of any such additional engagement
may be embodied in one or more separate written agreements. These
Indemnification Provisions shall apply to the engagement under the
Agreement and to any such additional engagement and any modification of
such additional engagement; provided, however, that in the event that the
Company engages Xxxxxx to act as a dealer manager in an exchange or tender
offer or as an underwriter in connection with issuance of securities by the
Company or to furnish an opinion letter, such further engagement may be
subject to separate indemnification and contribution provisions as may be
mutually agreed upon, and such separate indemnification and contribution
provisions shall supersede the indemnification and contribution provisions
hereof with respect to the transaction or transactions contemplated by such
further engagement.
6. These Indemnification Provisions shall remain in full force and effect
whether or not the Financing contemplated by the Agreement is completed and
shall survive the termination of the Agreement, and shall be in addition to
any liability that the Company might otherwise have to any Indemnified
Party under the Agreement or otherwise.
XXXXXX & XXXXXXX, INC.
By: /s/ XXXX X. XXXXXXX
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Xxxx X. Xxxxxxx
Senior Director
MAXIM PHARMACEUTICALS, INC.
By: _________________________
Title: ________________________
