9/15/97
Draft - Subject
to client review
2,500,000 SHARES OF COMMON STOCK
MAXIM PHARMACEUTICALS, INC.
UNDERWRITING AGREEMENT
____________, 1997
XXXXXX XXXX FONDKOMMISSION AB
As global coordinator of the several Underwriters
c/o Xxxxxx Xxxx Fondkommission AB
Box 70447
S-107 25 Stockholm, Sweden
Ladies and Gentlemen:
Maxim Pharmaceuticals, Inc., a Delaware corporation (the "Company"),
proposes to sell to the several U.S. Underwriters (as defined below) and to
purchasers procured by the International Underwriter (as defined below) or, if
and to the extent the International Underwriter has not procured such
purchasers, to the International Underwriter, an aggregate of 2,500,000 shares
("Shares") of the Company's common stock, $.001 par value per share ("Common
Stock").
It is understood that, subject to the conditions hereinafter stated,
(i) 500,000 Shares of Common Stock (the "U.S. Shares") will be sold to the
underwriters named in Schedule A hereto (collectively, the "U.S. Underwriters,"
which term shall also include any underwriter substituted as hereinafter
provided in SECTION 11), for whom Xxxxxx & Xxxxxxx, Inc. ("Xxxxxx") is acting as
representative (in such capacity, Xxxxxx shall hereinafter be referred to as the
"Representative") and (ii) 2,000,000 Shares of Common Stock (the "International
Shares") will be sold to purchasers procured by Xxxxxx Xxxx Fondkommission AB
(the "International Underwriter") or, if and to the extent that the
International Underwriter has not procured such purchasers, to the International
Underwriter. The U.S. Underwriters and the International Underwriter are
hereinafter collectively referred to as the "Underwriters." The U.S Shares are
hereinafter referred to as the "U.S. Firm Securities." The International Shares
are hereinafter referred to as the "International Firm
Securities." The "U.S. Firm Securities and the International Firm Securities
are hereinafter collectively referred to as the "Firm Securities."
The Company also proposes to issue and sell to the U.S. Underwriters,
acting severally and not jointly, up to an additional [75,000] shares of Common
Stock (the "U.S. Option Securities") and to purchasers procured by the
International Underwriter, or, if and to the extent the International
Underwriter has not procured such purchasers, to the International Underwriter,
up to an additional [300,000] shares of Common Stock (the "International Option
Securities) for the purpose of covering over-allotments, if any. The U.S.
Option Securities and the International Option Securities are hereinafter
collectively referred to as the "Option Securities." The Firm Securities and
the Option Securities (collectively, hereinafter referred to as the
"Securities") are more fully described in the Registration Statement and the
Prospectus referred to below.
To provide for the coordination of their activities and the appointment of
Xxxxxx Xxxx Fondkommission AB as global coordinator (the "Global Coordinator")
the U.S. Underwriters and the International Underwriter simultaneously are
entering into an agreement among the U.S. Underwriters and the International
Underwriter (the "Agreement Among U.S. and International Underwriters") which
provides for, among other things, the transfer of shares of Common Stock among
the Underwriters.
Three forms of prospectus are to be used in connection with the offer and
sale of shares of Common Stock contemplated by the foregoing, one relating to
the U.S. Shares (the "U.S. Prospectus") and the other two relating to the
International Shares (collectively, the "International Prospectus"). The
International Prospectus is identical to the U.S. Prospectus except for [the
outside and inside front cover pages of each.] In addition, one version of the
International prospectus will be translated into a Swedish language prospectus
[(including any summary thereof permitted under Swedish Law)] for use in
connection with the offering and sale of the International Shares in connection
with the application to list the International Shares on the Stockholm Stock
Exchange. The Swedish version of the prospectus is identical to the U.S.
Prospectus and the International Prospectus except for [the outside and inside
front cover pages of each]. References herein to any prospectus whether in
preliminary or final form, and whether as amended or supplemented, shall include
the U.S. and the International versions thereof and the Swedish translation
version of the International version.
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
and warrants to, and agrees with, the Underwriters as of the date hereof, and as
of the Closing Date (as hereinafter defined) and each Option Closing Date (as
hereinafter defined), if any, as follows:
a. The Company has prepared and filed with the Securities and Exchange
Commission (the "Commission") a registration statement, and an amendment or
amendments thereto, on Form S-1 (No. 333-_______), including any related
preliminary prospectus ("Preliminary Prospectus"), for the registration of the
Firm Securities and the Option Securities under the Securities Act of 1933, as
amended (the "Act"), which registration
statement and amendment or amendments have been prepared by the Company in
conformity with the requirements of the Act, and the rules and regulations (the
"Regulations") of the Commission under the Act. The Company will, if necessary,
promptly file a further amendment to said registration statement in the form
heretofore delivered to the Underwriters and will not file any other amendment
thereto to which the Underwriters shall have objected in writing after having
been furnished with a copy thereof. Except as the context may otherwise
require, such registration statement, as amended, on file with the Commission at
the time the registration statement becomes effective (including the prospectus,
financial statements, schedules, exhibits and all other documents filed as a
part thereof or incorporated therein (including, but not limited to those
documents or information incorporated by reference therein) and all information
deemed to be a part thereof as of such time pursuant to paragraph (b) of Rule
430(A) of the Regulations), is hereinafter called the "Registration Statement",
and the U.S. and International Prospectus in the forms first filed with the
Commission pursuant to Rule 424(b) of the Regulations and the Swedish prospectus
in final form, are hereinafter collectively referred to as the "Prospectus."
For purposes hereof, "Rules and Regulations" mean the rules and regulations
adopted by the Commission under either the Act or the Securities Exchange Act of
1934, as amended (the "Exchange Act"), as applicable.
b. Neither the Commission nor any state regulatory authority has
issued any order preventing or suspending the use of any Preliminary Prospectus,
the Registration Statement or Prospectus or any part of any thereof and no
proceedings for a stop order suspending the effectiveness of the Registration
Statement or any of the Company's securities have been instituted or are pending
or threatened. Each of the Preliminary Prospectus, the Registration Statement
and Prospectus at the time of filing thereof conformed with the requirements of
the Act and the Rules and Regulations, and none of the Preliminary Prospectus,
the Registration Statement or Prospectus at the time of filing thereof contained
an untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, except
that this representation and warranty does not apply to statements made in
reliance upon and in conformity with written information furnished to the
Company with respect to the Underwriters by or on behalf of the Underwriters
expressly for use in such Preliminary Prospectus, Registration Statement or
Prospectus or any amendment thereof or supplement thereto.
c. When the Registration Statement becomes effective and at all times
subsequent thereto up to the Closing Date (as defined herein) and each Option
Closing Date (as defined herein), if any, and during such longer period as the
Prospectus may be required to be delivered in connection with sales by the
Underwriters or a dealer, the Registration Statement and the Prospectus will
contain all statements which are required to be stated therein in accordance
with the Act and the Rules and Regulations, and will conform to the requirements
of the Act and the Rules and Regulations; neither the Registration Statement nor
the Prospectus, nor any amendment or supplement thereto, will 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, in light of the
circumstances under which they were made, not misleading, PROVIDED, HOWEVER,
that this representation and warranty does not apply to
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statements made or statements omitted in reliance upon and in strict conformity
with information furnished to the Company in writing by or on behalf of any
Underwriter expressly for use in the Preliminary Prospectus, Registration
Statement or Prospectus or any amendment thereof or supplement thereto.
d. The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the state of its incorporation.
Except as set forth in the Prospectus, the Company does not own an interest in
any corporation, partnership, trust, joint venture or other business entity.
The Company is duly qualified and licensed and in good standing as a foreign
corporation in each jurisdiction in which its ownership or leasing of any
properties or the character of its operations requires such qualification or
licensing. The Company has all requisite power and authority (corporate and
other), and has obtained any and all necessary authorizations, approvals,
orders, licenses, certificates, franchises and permits of and from all
governmental or regulatory officials and bodies (including, without limitation,
those having jurisdiction over environmental or similar matters), domestic or
foreign, to own or lease its properties and conduct its business as described in
the Prospectus; the Company is and has been doing business in compliance with
all such authorizations, approvals, orders, licenses, certificates, franchises
and permits and all applicable federal, state, local and foreign laws, rules and
regulations; and the Company has not received any notice of proceedings relating
to the revocation or modification of any such authorization, approval, order,
license, certificate, franchise, or permit which, singly or in the aggregate, if
the subject of an unfavorable decision, ruling or finding, would materially and
adversely affect the condition, financial or otherwise, or the earnings,
position, prospects, value, operation, properties, business or results of
operations of the Company. The disclosures in the Registration Statement
concerning the effects of federal, state, local, and foreign laws, rules and
regulations on the Company's businesses as currently conducted and as
contemplated are correct in all material respects and do not omit to state a
material fact required to be stated therein or necessary to make the statements
contained therein not misleading in light of the circumstances under which they
were made.
e. The Company has a duly authorized, issued and outstanding
capitalization as set forth in the Prospectus under "Capitalization" and
"Description of Securities" and will have the adjusted capitalization set forth
therein on the Closing Date and each Option Closing Date, if any, based upon the
assumptions set forth therein, and the Company is not a party to or bound by any
instrument, agreement or other arrangement providing for it to issue any capital
stock, rights, warrants, options or other securities, except for this Agreement,
and as described in the Prospectus. The Securities and all other securities
issued or issuable by the Company conform or, when issued and paid for, will
conform, in all respects to all statements with respect thereto contained in the
Registration Statement and the Prospectus. All issued and outstanding
securities of the Company have been duly authorized and validly issued and are
fully paid and non-assessable and the holders thereof have no rights of
rescission with respect thereto, and are not subject to personal liability by
reason of being such holders; and none of such securities were issued in
violation of the preemptive rights of any holders of any security of the Company
or similar contractual rights granted by the Company. The Securities to be
issued and sold by the Company to purchasers procured by the International
Underwriter, or, if and to the extent the International Underwriter has not
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procured such purchasers, to the International Underwriter, and to be issued and
sold by the Company to the U.S. Underwriters, are not and will not be subject to
any preemptive or other similar rights of any stockholder, have been duly
authorized and, when issued, paid for and delivered in accordance with the terms
hereof, will be validly issued, fully paid and non-assessable and will conform
to the description thereof contained in the Prospectus; the holders thereof will
not be subject to any liability solely as such holders; all corporate action
required to be taken for the authorization, issue and sale of the Securities has
been duly and validly taken; and the certificates representing the Securities
will be in due and proper form. Upon the issuance and delivery pursuant to the
terms hereof of the Securities to be sold by the Company hereunder, the
purchasers procured by the International Underwriter, or, if and to the extent
the International Underwriter has not procured such purchasers, the
International Underwriter, and the U.S. Underwriters, as the case may be, will
acquire good and marketable title to such Securities free and clear of any lien,
charge, claim, encumbrance, pledge, security interest, defect or other
restriction or equity of any kind whatsoever.
f. The financial statements of the Company together with the related
notes and schedules thereto, included in the Registration Statement, each
Preliminary Prospectus and the Prospectus fairly present the financial position,
income, changes in cash flow, changes in stockholders' equity and the results of
operations of the Company at the respective dates and for the respective periods
to which they apply and such financial statements have been prepared in
conformity with generally accepted accounting principles and the Rules and
Regulations, consistently applied throughout the periods involved and such
financial statements as are audited have been examined by KPMG Peat Marwick LLP,
who are independent certified public accountants within the meaning of the Act
and the Rules and Regulations, as indicated in their report filed therewith.
[statement regarding reconciliations] There has been no adverse change or
development involving a prospective adverse change in the condition, financial
or otherwise, or in the earnings, position, prospects, value, operation,
properties, business, or results of operations of the Company whether or not
arising in the ordinary course of business, since the date of the financial
statements included in the Registration Statement and the Prospectus and the
outstanding debt, the property, both tangible and intangible, and the business
of the Company conform in all material respects to the descriptions thereof
contained in the Registration Statement and the Prospectus. Financial
information (including, without limitation, any pro forma financial information)
set forth in the Prospectus under the headings "Summary Financial Information",
"Selected Financial Data," "Capitalization," and "Management's Discussion and
Analysis of Financial Condition and Results of Operations," fairly present, on
the basis stated in the Prospectus, the information set forth therein, and have
been derived from or compiled on a basis consistent with that of the audited
financial statements included in the Prospectus; and, in the case of pro forma
financial information, if any, the assumptions used in the preparation thereof
are reasonable and the adjustments used therein are appropriate to give effect
to the transactions and circumstances referred to therein. The amounts shown as
accrued for current and deferred income and other taxes in such financial
statements are sufficient for the payment of all accrued and unpaid federal,
state, local and foreign income taxes, interest, penalties, assessments or
deficiencies applicable to the Company, whether disputed or not, for the
applicable period then ended and periods prior thereto; adequate allowance for
doubtful
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accounts has been provided for unindemnified losses due to the operations of the
Company; and the statements of income do not contain any items of special or
nonrecurring income not earned in the ordinary course of business, except as
specified in the notes thereto.
g. The Company (i) has paid all federal, state, local, and foreign
taxes for which it is liable, including, but not limited to, withholding taxes
and amounts payable under Chapters 21 through 24 of the Internal Revenue Code of
1986, as amended (the "Code"), and has furnished all information returns it is
required to furnish pursuant to the Code, (ii) has established adequate reserves
for such taxes which are due and payable, and (iii) does not have any tax
deficiency or claims outstanding, proposed or assessed against it.
h. No transfer tax, stamp duty or other similar tax is payable by or
on behalf of the Underwriters in connection with (i) the issuance by the Company
of the Securities, (ii) the purchase by the Underwriters of the Firm Securities
and the Option Securities from the Company, (iii) the consummation by the
Company of any of its obligations under this Agreement, or (iv) resales of the
Firm Securities and the Option Securities in connection with the distribution
contemplated hereby.
i. The Company maintains insurance policies, including, but not
limited to, general liability, product and property insurance, which insures the
Company and its employees, against such losses and risks generally insured
against by comparable businesses. The Company (A) has not failed to give notice
or present any insurance claim with respect to any matter, including but not
limited to the Company's business, property or employees, under any insurance
policy or surety bond in a due and timely manner, (B) has not any disputes or
claims against any underwriter of such insurance policies or surety bonds or has
failed to pay any premiums due and payable thereunder, or (C) has not failed to
comply with all conditions contained in such insurance policies and surety
bonds. There are no facts or circumstances under any such insurance policy or
surety bond which would relieve any insurer of its obligation to satisfy in full
any valid claim of the Company.
j. There is no action, suit, proceeding, inquiry, arbitration,
investigation, litigation or governmental proceeding (including, without
limitation, those having jurisdiction over environmental or similar matters),
domestic or foreign, pending or threatened against (or circumstances that may
give rise to the same), or involving the properties or business of the Company
which (i) questions the validity of the capital stock of the Company, this
Agreement, or of any action taken or to be taken by the Company pursuant to or
in connection with this Agreement, (ii) is required to be disclosed in the
Registration Statement which is not so disclosed (and such proceedings as are
summarized in the Registration Statement are accurately summarized in all
material respects), or (iii) might materially and adversely affect the
condition, financial or otherwise, or the earnings, position, prospects,
stockholders' equity, value, operation, properties, business or results of
operations of the Company.
k. The Company has full legal right, power and authority to authorize,
issue, deliver and sell the Securities, enter into this Agreement, and to
consummate the transactions provided for in this Agreement; and this Agreement
has been duly and properly authorized,
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executed and delivered by the Company. This Agreement constitutes a legal,
valid and binding agreement of the Company enforceable against the Company in
accordance with its terms, and none of the Company's issue and sale of the
Securities, execution or delivery of this Agreement, its performance hereunder,
its consummation of the transactions contemplated herein, or the conduct of its
business as described in the Registration Statement, the Prospectus, and any
amendments or supplements thereto, conflicts with or will conflict with or
results or will result in any breach or violation of any of the terms or
provisions of, or constitutes or will constitute a default under, or result in
the creation or imposition of any lien, charge, claim, encumbrance, pledge,
security interest, defect or other restriction or equity of any kind whatsoever
upon, any property or assets (tangible or intangible) of the Company pursuant to
the terms of (i) the certificate of incorporation or by-laws of the Company,
(ii) any license, contract, collective bargaining agreement, indenture,
mortgage, deed of trust, lease, voting trust agreement, stockholders agreement,
note, loan or credit agreement or any other agreement or instrument to which the
Company is a party or by which the Company is or may be bound or to which any of
its properties or assets (tangible or intangible) is or may be subject, or any
indebtedness, or (iii) any statute, judgment, decree, order, rule or regulation
applicable to the Company of any arbitrator, court, regulatory body or
administrative agency or other governmental agency or body (including, without
limitation, those having jurisdiction over environmental or similar matters),
domestic or foreign, having jurisdiction over the Company or any of its
activities or properties.
l. No consent, approval, authorization or order of, and no filing
with, any court, regulatory body, government agency or other body, domestic or
foreign, is required for the issuance of the Securities pursuant to the
Prospectus and the Registration Statement, the performance of this Agreement,
and the transactions contemplated hereby, including without limitation, any
waiver of any preemptive, first refusal or other rights that any entity or
person may have for the issue and/or sale of any of the Securities, except such
as have been or may be obtained under the Act or may be required under state
securities or Blue Sky laws in connection with the Underwriters' purchase and
distribution of the Firm Securities and the Option Securities, to be sold by the
Company hereunder.
m. All executed agreements, contracts or other documents or copies of
executed agreements, contracts or other documents filed as exhibits to the
Registration Statement to which the Company is a party or by which it may be
bound or to which any of its assets, properties or business may be subject have
been duly and validly authorized, executed and delivered by the Company and
constitute the legal, valid and binding agreements of the Company enforceable
against the Company in accordance with their respective terms. The descriptions
in the Registration Statement of agreements, contracts and other documents are
accurate and fairly present the information required to be shown with respect
thereto by Form S-1, and there are no contracts or other documents which are
required by the Act to be described in the Registration Statement or filed as
exhibits to the Registration Statement which are not described or filed as
required, and the exhibits which have been filed are complete and correct copies
of the documents of which they purport to be copies.
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n. Subsequent to the respective dates as of which information is set
forth in the Registration Statement and Prospectus, and except as may otherwise
be indicated or contemplated herein or therein, the Company has not (i) issued
any securities or incurred any liability or obligation, direct or contingent,
for borrowed money, (ii) entered into any transaction other than in the ordinary
course of business, or (iii) declared or paid any dividend or made any other
distribution on or in respect of its capital stock of any class, and there has
not been any change in the capital stock, or any change in the debt (long or
short term) or liabilities or material adverse change in or affecting the
general affairs, management, financial operations, stockholders' equity or
results of operations of the Company.
o. Except as otherwise disclosed in the Registration Statement and
Prospectus, no default exists in the due performance and observance of any term,
covenant or condition of any license, contract, collective bargaining agreement,
indenture, mortgage, installment sale agreement, lease, deed of trust, voting
trust agreement, stockholders agreement, partnership agreement, note, loan or
credit agreement, purchase order, or any other agreement or instrument
evidencing an obligation for borrowed money, or any other material agreement or
instrument to which the Company is a party or by which the Company may be bound
or to which the property or assets (tangible or intangible) of the Company is
subject or affected.
p. Except as otherwise disclosed in the Registration Statement and
Prospectus, the Company has generally enjoyed a satisfactory employer-employee
relationship with its employees and is in compliance with all federal, state,
local, and foreign laws and regulations respecting employment and employment
practices, terms and conditions of employment and wages and hours. There are no
pending investigations involving the Company by the U.S. Department of Labor, or
any other governmental agency responsible for the enforcement of such federal,
state, local, or foreign laws and regulations. There is no unfair labor
practice charge or complaint against the Company pending before the National
Labor Relations Board, or any comparable foreign agency, or any lockout, strike,
picketing, boycott, dispute, slowdown or stoppage pending or threatened against
or involving the Company or any predecessor entity, and none has ever occurred.
No representation question exists respecting the employees of the Company, and
no collective bargaining agreement or modification thereof is currently being
negotiated by the Company. No grievance or arbitration proceeding is pending
under any expired or existing collective bargaining agreements of the Company.
No labor dispute with the employees of the Company exists, or, is imminent.
q. The Company maintains, sponsors or contributes to any program or
arrangement that is an "employee pension benefit plan," an "employee welfare
benefit plan," or a "multiemployer plan" as such terms are defined in Sections
3(2), 3(1) and 3(37), respectively, of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA") ("ERISA Plans"). The Company does not
maintain or contribute, now or at any time previously, to a defined benefit
plan, as defined in Section 3(35) of ERISA. No ERISA Plan (or any trust created
thereunder) has engaged in a "prohibited transaction" within the meaning of
Section 406 of ERISA or Section 4975 of the Code, which could subject the
Company to any tax penalty on prohibited transactions and which has not
adequately been
8
corrected. Each ERISA Plan is in compliance with all reporting, disclosure and
other requirements of the Code and ERISA as they relate to any such ERISA Plan.
Determination letters have been received from the Internal Revenue Service with
respect to each ERISA Plan which is intended to comply with Code Section 401(a),
stating that such ERISA Plan and the attendant trust are qualified thereunder.
The Company has not ever completely or partially withdrawn from a "multiemployer
plan."
r. Neither the Company nor any of its employees, directors,
stockholders, partners, or affiliates (within the meaning of the Rules and
Regulations) of any of the foregoing has taken or will take, directly or
indirectly, any action designed to or which has constituted or which might be
expected to cause or result in, under the Exchange Act, or otherwise,
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Securities or otherwise.
s. Except as otherwise disclosed in the Prospectus, none of the
patents, patent applications, trademarks, service marks, trade names and
copyrights, and licenses and rights to the foregoing presently owned or held by
the Company are in dispute so far as known by the Company or are in any conflict
with the right of any other person or entity. The Company (i) owns or has the
right to use, free and clear of all liens, charges, claims, encumbrances,
pledges, security interests, defects or other restrictions or equities of any
kind whatsoever, all patents, trademarks, service marks, trade names and
copyrights, technology and licenses and rights with respect to the foregoing,
used in the conduct of its business as now conducted or proposed to be conducted
without infringing upon or otherwise acting adversely to the right or claimed
right of any person, corporation or other entity under or with respect to any of
the foregoing and (ii) is not obligated or under any liability whatsoever to
make any payment by way of royalties, fees or otherwise to any owner or licensee
of, or other claimant to, any patent, trademark, service mark, trade name,
copyright, know-how, technology or other intangible asset, with respect to the
use thereof or in connection with the conduct of its business or otherwise.
t. Except as otherwise disclosed in the Registration Statement and
Prospectus, the Company owns and has the unrestricted right to use all trade
secrets, know-how (including all other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures), inventions,
designs, processes, works of authorship, computer programs and technical data
and information (collectively herein "intellectual property") that are material
to the development, manufacture, operation and sale of all products and services
sold or proposed to be sold by the Company, free and clear of and without
violating any right, lien, or claim of others, including without limitation,
former employers of its employees; provided, however, that the possibility
exists that other persons or entities, completely independently of the Company,
or any of its employees or agents, could have developed trade secrets or items
of technical information similar or identical to those of the Company. The
Company is not aware of any such development of similar or identical trade
secrets or technical information by others.
u. The Company has taken reasonable security measures to protect the
secrecy, confidentiality and value of its intellectual property in all material
respects.
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v. The Company has good and marketable title to, or valid and
enforceable leasehold estates in, all items of real and personal property stated
in the Prospectus to be owned or leased by it, free and clear of all liens,
charges, claims, encumbrances, pledges, security interests, defects, or other
restrictions or equities of any kind whatsoever, other than those referred to in
the Prospectus and liens for taxes not yet due and payable.
w. KPMG Peat Marwick LLP, whose report is filed with the Commission as
a part of the Registration Statement, are independent certified public
accountants as required by the Act and the Rules and Regulations.
x. The Company has caused to be duly executed legally binding and
enforceable agreements ("Lock-up Agreements") pursuant to which each of the
officers and directors of the Company, all holders of 5% or more of the Common
Stock issued and outstanding on the effective date of the Registration
Statement, and all holders of options, warrants or other securities exchangeable
or exercisable for or convertible into 5% or more of the Common Stock issued and
outstanding on the effective date of the Registration Statement has agreed (i)
not to, directly or indirectly, issue, offer, offer to sell, sell, grant any
option for the sale or purchase of, assign, transfer, pledge, hypothecate or
otherwise encumber or dispose of any shares of Common Stock or securities
convertible into, exercisable or exchangeable for or evidencing any right to
purchase or subscribe for any shares of Common Stock (either pursuant to Rule
144 of the Rules and Regulations or otherwise) or dispose of any beneficial
interest therein for a period of not less than six (6) months following the
effective date of the Registration Statement without the prior written consent
of the Underwriters and the Company and (ii) to waive all rights to request or
demand the registration pursuant to the Act of any securities of the Company
which are registered in the name of or beneficially owned by any such holder.
[Include exception for certain holders.] During the six (6) month period
commencing on the effective date of the Registration Statement, the Company
shall not, without the prior written consent of the International Underwriter
and Xxxxxx, sell, contract or offer to sell, issue, transfer, assign, pledge,
distribute, or otherwise dispose of, directly or indirectly, any shares of
Common Stock or any options, rights or warrants with respect to any shares of
Common Stock, except pursuant to options, rights or warrants existing on the
effective date of the Registration Statement; [PROVIDED, HOWEVER, (i) that the
Company and any subsidiaries or affiliates thereof may sell or offer for sale
any of their securities without the consent of the Underwriters in connection
with any merger or acquisition transaction, joint venture or other "corporate
partnering" transaction entered into by any of the Company and its subsidiaries
or affiliates and (ii) up to _______ shares of Common Stock reserved for grants
of options under the Company's stock option plan as described in the
Prospectus.] The Company will cause the Transfer Agent (as hereinafter defined)
to mark an appropriate legend on the face of stock certificates representing all
of such securities and to place "stop transfer" orders on the Company's stock
ledgers.
y. There are no claims, payments, issuances, arrangements or
understandings, whether oral or written, for services in the nature of a
finder's or origination fee with respect to the sale of the Securities hereunder
or any other arrangements, agreements, understandings, payments or issuance with
respect to the Company, or any of its officers, directors, stockholders,
partners, employees or affiliates, that may affect the Underwriters'
10
compensation, as determined by the National Association of Securities Dealers,
Inc. ("NASD").
z. The Common Stock has been approved for listing on (i) the American
Stock Exchange ("AMEX") and (ii) the Stockholm Stock Exchange ("SSE").
aa. Neither the Company nor any of its officers, employees, agents or
any other person acting on behalf of the Company has, directly or indirectly,
given or agreed to give any money, gift or similar benefit (other than legal
price concessions to customers in the ordinary course of business) to any
customer, supplier, employee or agent of a customer or supplier, or official or
employee of any governmental agency (domestic or foreign) or instrumentality of
any government (domestic or foreign) or any political party or candidate for
office (domestic or foreign) or other person who was, is, or may be in a
position to help or hinder the business of the Company (or assist the Company in
connection with any actual or proposed transaction) which (a) might subject the
Company, or any other such person to any damage or penalty in any civil,
criminal or governmental litigation or proceeding (domestic or foreign), (b) if
not given in the past, might have had a material adverse effect on the assets,
business or operations of the Company, or (c) if not continued in the future,
might adversely affect the assets, business, condition, financial or otherwise,
earnings, position, properties, value, operations or prospects of the Company.
The Company's internal accounting controls are sufficient to cause each of the
Company to comply with the Foreign Corrupt Practices Act of 1977, as amended.
bb. Except as set forth in the Prospectus, no officer, director,
stockholder or partner of the Company, or any "affiliate" or "associate" (as
these terms are defined in Rule 405 promulgated under the Rules and Regulations)
of any of the foregoing persons or entities has or has had, either directly or
indirectly, (i) an interest in any person or entity which (A) furnishes or sells
services or products which are furnished or sold or are proposed to be furnished
or sold by the Company, or (B) purchases from or sells or furnishes to the
Company any goods or services, or (ii) a beneficiary interest in any contract or
agreement to which the Company is a party or by which it may be bound or
affected. Except as set forth in the Prospectus under "Certain Transactions,"
there are no existing agreements, arrangements, understandings or transactions,
or proposed agreements, arrangements, understandings or transactions, between or
among the Company, and any officer, director, or 5% or greater securityholder of
the Company, or any partner, affiliate or associate of any of the foregoing
persons or entities.
cc. Any certificate signed by any officer of the Company, and
delivered to the Underwriters or to Underwriters' Counsel (as defined herein)
shall be deemed a representation and warranty by the Company to the Underwriters
as to the matters covered thereby.
dd. The minute books of the Company have been made available to the
Underwriters and contain a complete summary of all meetings and actions of the
directors (including committees thereof) and stockholders of the Company and
reflect all transactions referred to in such minutes accurately in all material
respects.
11
ee. Except and to the extent described in the Prospectus, no holders
of any securities of the Company or of any options, warrants or other
convertible or exchangeable securities of the Company have the right to include
any securities issued by the Company in the Registration Statement or any
registration statement to be filed by the Company or to require the Company to
file a registration statement under the Act and no person or entity holds any
anti-dilution rights (except for adjustments pursuant to stock splits, stock
dividends, recapitalizations and similar events) with respect to any securities
of the Company.
ff. (A) The Company is in compliance with all federal, state, local or
foreign laws, common law, rules, codes, administrative orders or regulations
relating to pollution or protection of human health, the environment (including,
without limitation, ambient air, surface water, groundwater, land surface or
subsurface strata) or wildlife, including without limitation, all laws, common
law, rules, codes, administrative orders and regulations relating to the release
or threatened release of chemicals, pollutants, contaminants, wastes, toxic
substances, hazardous substances, petroleum or petroleum products (collectively,
"Hazardous Materials") or to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Hazardous Materials
(collectively, "Environmental Laws") and (B) to the best of the Company's
knowledge, there are no events or circumstances that could form the basis of an
order for clean-up or remediation, or an action, suit or proceeding by any
private party or governmental body or agency, against or affecting the Company
relating to any Hazardous Materials or the violation of any Environmental Laws.
The Company has no reason to believe that it will not receive all necessary and
required approvals, authorizations, validations and certifications from the EPA
and other applicable regulatory authorities to enable the Company to commence
full operations as contemplated in the Registration Statement and the
Prospectus.
gg. In the ordinary course of its business, the Company conducts a
periodic review of the effect of Environmental Laws on the business, operations
and properties of the Company, in the course of which it identifies and
evaluates associated costs and liabilities (including, without limitation, any
capital or operating expenditures required for clean-up, closure of properties
or compliance with Environmental Laws or any permit, license or approval, any
related constraints on operating activities and any potential liabilities to
third parties). On the basis of such review, the Company has reasonably
concluded that such associated costs and liabilities would not, singly or in the
aggregate, have a material adverse effect on the Company.
hh. Intentionally omitted.
ii. As of the date hereof, the Company does not have more than such
number of shares of Common Stock issued and outstanding as are described on page
[4] of the Prospectus (including securities with equivalent rights as the
Common Stock and shares of Common Stock, or such equivalent securities, issuable
upon exercise of any and all options, warrants and other contract rights and
securities convertible directly or indirectly into shares of Common Stock or
such equivalent securities).
12
jj. The Company confirms as of the date hereof that it is in
compliance with all provisions of Section 1 of Laws of Florida, Chapter 92-198,
AN ACT RELATING TO DISCLOSURE OF DOING BUSINESS WITH CUBA, and the Company
further agrees that if it or any affiliate commences engaging in business with
the government of Cuba or with any person or affiliate located in Cuba after the
date the Registration Statement becomes or has become effective with the
Commission or with the Florida Department of Banking and Finance (the
"Department"), whichever date is later, or if the information reported or
incorporated by reference in the Prospectus, if any, concerning the Company's or
any affiliate's, business with Cuba or with any person or affiliate located in
Cuba changes in any material way, the Company will provide the Department notice
of such business or change, as appropriate, in a form acceptable to the
Department.
kk. The Company is not, and upon the issuance and sale of the
Securities as herein contemplated and the application of the net proceeds
therefrom as described in the Prospectus under the caption "Use of Proceeds"
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 "1940 Act").
ll. The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are executed in
accordance with management's general or specific authorizations; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorizations; and (iv) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
2. PURCHASE, SALE AND DELIVERY OF THE SECURITIES.
a. On the basis of the representations, warranties, covenants and
agreements herein contained, but subject to the terms and conditions herein set
forth, the Company agrees to sell to the purchasers procured by the
International Underwriter, or, if and to the extent the International
Underwriter has not procured such purchasers, to the International Underwriter,
and the International Underwriter agrees to procure purchasers to purchase, or
failing which to purchase, from the Company, the International Shares at a price
of U.S. $[____] per International Share, subject to such adjustment as the
International Underwriter in its sole discretion shall make to eliminate any
sales or purchases of fractional shares, plus any additional number of
International Firm Securities which the International Underwriter may become
obligated to purchase pursuant to the provisions of SECTION 11 hereof.
b. On the basis of the representations, warranties, covenants and
agreements herein contained, but subject to the terms and conditions herein set
forth, the Company
13
agrees to sell to the U.S. Underwriters and the U.S. Underwriters agree to
purchase, from the Company, the U.S. Shares at a price of U.S. $[____] per U.S.
Share, subject to such adjustment as the Representative in its sole discretion
shall make to eliminate any sales or purchases of fractional shares, plus any
additional number of U.S. Firm Securities which the U.S. Underwriters may become
obligated to purchase pursuant to the provisions of SECTION 11 hereof.
c. In addition, on the basis of the representations, warranties,
covenants and agreements herein contained, but subject to the terms and
conditions herein set forth, the Company hereby grants an option to the (i)
International Underwriter to procure purchasers for all or any part of an
additional [300,000] shares of Common Stock at a price of $[_____] per share of
Common Stock and (ii) U.S. Underwriters, severally and not jointly, to purchase
all or any part of an additional [75,000] shares of Common Stock at a price of
$[_____] per share of Common Stock. The options granted hereby will expire
[thirty] [(30)] days after (x) the date the Registration Statement becomes
effective, if the Company has elected not to rely on Rule 430A under the Rules
and Regulations, or (y) the date of this Agreement if the Company has elected to
rely upon Rule 430A under the Rules and Regulations, and may be exercised in
whole or in part from time to time only for the purpose of covering over-
allotments which may be made in connection with the offering and distribution of
the Firm Securities upon notice by the Global Coordinator to the Company setting
forth the number of Option Securities as to which the Global Coordinator are
then exercising the option and the time and date of payment and delivery for any
such Option Securities. Any such time and date of delivery (an "Option Closing
Date") shall be determined by the Global Coordinator, but shall not be later
than three (3) full business days after the exercise of said option, nor in any
event prior to the Closing Date, as hereinafter defined, unless otherwise agreed
upon by the Global Coordinator and the Company. Nothing herein contained shall
obligate the Underwriters to make any over-allotments. No Option Securities
shall be delivered unless the Firm Securities shall be simultaneously delivered
or shall theretofore have been delivered as herein provided.
d. Payment of the purchase price for the Firm Securities shall be made
by a wire transfer in immediately available funds to the account of the Company,
or at such other place as shall be agreed upon by the Company and the Global
Underwriter. Such payment shall be made at 10:00 a.m. ([New York City] time) on
________________, 1997 or at such other time and date as shall be agreed upon by
the Global Underwriter and the Company (such time and date of payment and
delivery being herein called the "Closing Date"). In addition, in the event
that any or all of the Option Securities are purchased by the Underwriters,
payment of the purchase price for such Option Securities shall be made at such
place as shall be agreed upon by the Global Coordinator and the Company on each
Option Closing Date as specified in the notice from the Global Coordinator to
the Company. [Finalize coordination of book entry delivery.] [Xxxxxx and Xxxxxx
Xxxx to review: The Global Coordinator may designate a portion of the
International Shares to be purchased under this Agreement to be delivered on
behalf of investors to local custodians in Sweden participating in the Swedish
Securities Register Center (any reference herein to "Shares to be delivered by
local delivery" shall be deemed to refer to the International Shares as to which
such a designation has been made) and a portion thereof to the respective
custodians for the Operator (as defined below),
14
and CEDEL (as defined below). Notice of such election shall be given by the
Global Coordinator, on behalf of the Underwriters, to the Company prior to
notification with respect to the Closing Date, in the case of Firm Shares, or
the notification with respect to the Option Closing Date, with respect to the
International Option Securities. Any International Shares to be delivered at
the Closing Date or at the Option Closing Date shall be delivered (i) with
respect to Shares to be delivered by local delivery at the Closing Date or the
Option Closing Date, as the case may be, by book-entry transfer in the Swedish
Securities Register center to an account to be specified by the Global
Coordinator, and (ii) with respect to any International Shares not to be
delivered by local delivery at the Closing Date or the Option Closing Date, as
the case may be, by book-entry transfer in the Swedish Securities Register
Center to _______________ Banken as custodian for (A) __________________ , as
Operator of the [Euroclear System] (the "Operator") and (B) CEDEL Bank, S.A.
("Cedel") in such respective portions as the Underwriters may designate, upon
notice to the Company by the Global Coordinator prior to the notification with
respect to the Closing Date or the Option Closing Date, as the case may be.]
3. PUBLIC OFFERING OF THE SHARES. As soon after the Registration
Statement becomes effective as the U.S. Underwriters and the International
Underwriter deem advisable, the U.S. Underwriters and the International
Underwriter shall make a public offering of the Shares (other than to residents
of or in any jurisdiction in which qualification of the Shares and is required
and has not become effective) at the price and upon the other terms set forth in
the U.S. Prospectus and the International Prospectus, respectively. The U.S.
Underwriters and the International Underwriter may from time to time increase or
decrease the respective public offering price after distribution of the Shares
has been completed to such extent as the Representative and the International
Underwriter, in their sole discretion deem advisable. The Representative and
the International Underwriter may enter into one of more agreements as the
Representative and the International Underwriter, in their sole discretion, deem
advisable with one or more broker-dealers who shall act as dealers in connection
with such public offering.
4. COVENANTS AND AGREEMENTS OF THE COMPANY. The Company covenants and
agrees with the Underwriters as follows:
a. The Company shall use its best efforts to cause the Registration
Statement and any amendments thereto to become effective as promptly as
practicable and will not at any time, whether before or after the effective date
of the Registration Statement, file any amendment to the Registration Statement
or supplement to the Prospectus or file any document under the Act or Exchange
Act before termination of the offering of the Shares by the Underwriters of
which the Underwriters shall not previously have been advised and furnished with
a copy, or to which the Underwriters shall have objected or which is not in
compliance with the Act, the Exchange Act or the Rules and Regulations.
b. As soon as the Company is advised or obtains knowledge thereof, the
Company will advise the Underwriters and confirm the notice in writing (i) when
the Registration Statement, as amended, becomes effective, if the provisions of
Rule 430A promulgated under the Act will be relied upon, when the Prospectus has
been filed in accordance with said Rule
15
430A and when any post-effective amendment to the Registration Statement becomes
effective; (ii) of the issuance by the Commission of any stop order or of the
initiation, or the threatening, of any proceeding suspending the effectiveness
of the Registration Statement or any order preventing or suspending the use of
the Preliminary Prospectus or the Prospectus, or any amendment or supplement
thereto, or the institution of proceedings for that purpose; (iii) of the
issuance by the Commission or by any state securities commission of any
proceedings for the suspension of the qualification of any of the Securities for
offering or sale in any jurisdiction or of the initiation, or the threatening,
of any proceeding for that purpose; (iv) of the receipt of any comments from the
Commission; and (v) of any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the Prospectus or for
additional information. If the Commission or any state securities commission
shall enter a stop order or suspend such qualification at any time, the Company
will make every effort to obtain promptly the lifting of such order.
c. The Company shall file the Prospectus (in form and substance
satisfactory to the Underwriters) or transmit the Prospectus by a means
reasonably calculated to result in filing with the Commission pursuant to Rule
424(b)(1) (or, if applicable and if consented to by the Underwriters, pursuant
to Rule 424(b)(4)) not later than the Commission's close of business on the
earlier of (i) the second business day following the execution and delivery of
this Agreement and (ii) the fifth business day after the effective date of the
Registration Statement.
d. The Company will give the Underwriters notice of its intention to
file or prepare any amendment to the Registration Statement (including any post-
effective amendment) or any amendment or supplement to the Prospectus (including
any revised prospectus which the Company proposes for use by the Underwriters in
connection with the offering of the Securities which differs from the
corresponding prospectus on file at the Commission at the time the Registration
Statement becomes effective, whether or not such revised prospectus is required
to be filed pursuant to Rule 424(b) of the Rules and Regulations), and will
furnish the Underwriters with copies of any such amendment or supplement a
reasonable amount of time prior to such proposed filing or use, as the case may
be, and will not file any such prospectus to which the Underwriters or its
counsel shall object.
e. The Company shall endeavor in good faith, in cooperation with the
Underwriters, at or prior to the time the Registration Statement becomes
effective, to qualify the Securities for offering and sale under the securities
laws of such jurisdictions as the Underwriters may designate to permit the
continuance of sales and dealings therein for as long as may be necessary to
complete the distribution, and shall make such applications, file such documents
and furnish such information as may be required for such purpose; PROVIDED,
HOWEVER, the Company shall not be required to qualify as a foreign corporation
or file a general or limited consent to service of process in any such
jurisdiction. In each jurisdiction where such qualification shall be effected,
the Company will, unless the Underwriters agree that such action is not at the
time necessary or advisable, use all reasonable efforts to file and make such
statements or reports at such times as are or may reasonably be required by the
laws of such jurisdiction to continue such qualification.
16
f. During the time when a prospectus is required to be delivered under
the Act, the Company shall use all reasonable efforts to comply with all
requirements imposed upon it by the Act and the Exchange Act, as now and
hereafter amended and by the Rules and Regulations, as from time to time in
force, so far as necessary to permit the continuance of sales of or dealings in
the Securities in accordance with the provisions hereof and the Prospectus, or
any amendments or supplements thereto. If at any time when a prospectus
relating to the Securities is required to be delivered under the Act, any event
shall have occurred as a result of which, in the opinion of counsel for the
Company or the Underwriters, the Prospectus, as then amended or supplemented,
includes an untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading, or
if it is necessary at any time to amend the Prospectus to comply with the Act,
the Company will notify the Underwriters promptly and prepare and file with the
Commission an appropriate amendment or supplement in accordance with Section 10
of the Act, each such amendment or supplement to be satisfactory to
Underwriters' Counsel, and the Company will furnish to the Underwriters copies
of such amendment or supplement as soon as available and in such quantities as
the Underwriters may request.
g. As soon as practicable, but in any event not later than forty-five
(45) days after the end of the 12-month period beginning on the day after the
end of the fiscal quarter of the Company during which the effective date of the
Registration Statement occurs (ninety (90) days in the event that the end of
such fiscal quarter is the end of the Company's fiscal year), the Company shall
make generally available to its security holders, in the manner specified in
Rule 158(b) of the Rules and Regulations, and to the Underwriters, an earnings
statement which will be in the detail required by, and will otherwise comply
with, the provisions of Section 11(a) of the Act and Rule 158(a) of the Rules
and Regulations, which statement need not be audited unless required by the Act,
covering a period of at least twelve (12) consecutive months after the effective
date of the Registration Statement.
h. During a period of ________ (___) years after the date hereof, the
Company will furnish to its stockholders, as soon as practicable, annual reports
(including financial statements audited by independent public accountants) and
unaudited quarterly reports of earnings, and will deliver to the Underwriters:
i. concurrently with furnishing such quarterly reports to its
stockholders, statements of income of the Company for each quarter in the
form furnished to the Company's stockholders and certified by the Company's
principal financial or accounting officer;
ii. concurrently with furnishing such annual reports to its
stockholders, a balance sheet of the Company as at the end of the preceding
fiscal year, together with statements of operations, stockholders' equity,
and cash flows of the Company for such fiscal year, accompanied by a copy
of the certificate thereon of independent certified public accountants;
17
iii. as soon as they are available, copies of all reports (financial
or other) mailed to stockholders;
iv. as soon as they are available, copies of all reports and financial
statements furnished to or filed with the Commission, the NASD or any
securities exchange;
v. every press release and every material news item or article of
interest to the financial community in respect of the Company, or its
affairs, which was released or prepared by or on behalf of the Company; and
vi. any additional information of a public nature concerning the
Company (and any future subsidiary) or its businesses which the
Underwriters may request.
During such ________-year period, if the Company has an active subsidiary,
the foregoing financial statements will be on a consolidated basis to the extent
that the accounts of the Company and its subsidiary(ies) are consolidated, and
will be accompanied by similar financial statements for any significant
subsidiary which is not so consolidated.
i. The Company will maintain a transfer agent and warrant agent
("Transfer Agent") and, if necessary under the jurisdiction of incorporation of
the Company, a Registrar (which may be the same entity as the Transfer Agent)
for its Common Stock.
j. The Company will furnish to the Underwriters or on the
Underwriters' order, without charge, at such place as the Underwriters may
designate, copies of each Preliminary Prospectus, the Registration Statement and
any pre-effective or post-effective amendments thereto (two of which copies will
be signed and will include all financial statements and exhibits), the
Prospectus, and all amendments and supplements thereto, including any prospectus
prepared after the effective date of the Registration Statement, in each case as
soon as available and in such quantities as the Underwriters may request.
k. On or before the effective date of the Registration Statement, the
Company shall provide the Global Coordinator with true original copies of duly
executed, legally binding and enforceable Lock-up Agreements pursuant to which,
for a period of six (6) months [include exception for certain holders] from the
effective date of the Registration Statement, each of the Company's officers and
directors, all holders of 5% or more of the Common Stock issued and outstanding
on the effective date of the Registration Statement, and all holders of options,
warrants or other securities exchangeable or exercisable for or convertible into
5% or more of the Common Stock issued and outstanding on the effective date of
the Registration Statement agrees that it or he or she (i) will not, directly or
indirectly, issue, offer to sell, sell, grant an option for the sale or purchase
of, assign, transfer, pledge, hypothecate or otherwise encumber or dispose of
any shares of Common Stock or securities convertible into, exercisable or
exchangeable for or evidencing any right to purchase or subscribe for any shares
of Common Stock (either pursuant to Rule 144 of the Rules and Regulations or
otherwise) or dispose of any beneficial interest therein without the prior
consent of the Representative and the Global Coordinator and the Company and
(ii) waives any and all rights to request or demand the registration pursuant to
the Act, of any
18
securities of the Company which are registered in the name of or beneficially
owned by it or he or she, respectively. The Company will also use its best
efforts to cause all holders of less than 5% of the Common Stock issued and
outstanding on the effective date of the Registration Statement and all holders
of options, warrants or other securities convertible, exercisable or
exchangeable for less than 5% of the Common Stock issued and outstanding on the
effective date of the Registration Statement to enter into Lock-up Agreements.
During the six (6) month period commencing on the effective date of the
Registration Statement, the Company shall not, without the prior written consent
of the Representative and the Global Coordinator, sell, contract or offer to
sell, issue, transfer, assign, pledge, distribute, or otherwise dispose of,
directly or indirectly, any shares of Common Stock or any options, rights or
warrants with respect to any shares of Common Stock, except pursuant to options,
rights or warrants existing on the effective date of the Registration Statement;
PROVIDED, HOWEVER, that the Company and any subsidiaries or affiliates thereof
may sell or offer for sale any of their securities without the consent of the
Representative and the Global Coordinator in connection with (i) any merger or
acquisition transaction, joint venture or other "corporate partnering"
transaction entered into by any of the Company and its subsidiaries or
affiliates and (ii) up to _________ shares of Common Stock reserved for grants
of options under the Company's stock option plan as described in the Prospectus.
On or before the Closing Date, the Company shall deliver instructions to the
Transfer Agent authorizing it to place appropriate legends on the
certificates representing the securities subject to the Lock-up Agreements
and to place appropriate stop transfer orders on the Company's ledgers.
l. Neither the Company nor any of its officers, directors,
stockholders, nor any of their respective affiliates (within the meaning of the
Rules and Regulations) will take, directly or indirectly, any action designed
to, or which might in the future reasonably be expected to cause or result in,
stabilization or manipulation of the price of any securities of the Company.
m. The Company shall apply the net proceeds from the sale of the
Securities in the manner, and subject to the conditions, set forth under "Use of
Proceeds" in the Prospectus. No portion of the net proceeds will be used,
directly or indirectly, to acquire any securities issued by the Company.
n. The Company shall timely file all such reports, forms or other
documents as may be required from time to time, under the Act, the Exchange Act,
and the Rules and Regulations, and all such reports, forms and documents filed
will comply as to form and substance with the applicable requirements under the
Act, the Exchange Act, and the Rules and Regulations.
o. The Company shall furnish to Representative and the Global
Coordinator as early as practicable prior to each of the date hereof, the
Closing Date and each Option
19
Closing Date, if any, but no later than two (2) full business days prior
thereto, a copy of the latest available unaudited interim financial statements
of the Company (which in no event shall be as of a date more than [________
(__)] days prior to the date of the Registration Statement) which have been read
by the Company's independent public accountants, as stated in their letters to
be furnished pursuant to SECTIONS 6(l) and 6(m) hereof.
p. The Company shall cause the Common Stock to be quoted on AMEX and
the SSE and use its best efforts to maintain the AMEX and SSE listing of the
Common Stock to the extent outstanding.
q. For a period of ______ (__) year[s] from the Closing Date, upon the
Underwriters' written request, the Company shall furnish to the Representative
and the Global Coordinator at the Company's sole expense, (i) daily consolidated
transfer sheets relating to the Common Stock (ii) the list of holders of all of
the Company's securities and (iii) a Blue Sky "Trading Survey" for secondary
sales of the Company's securities prepared by counsel to the Company.
r. The Company hereby agrees that it will not, for a period of six (6)
months from the effective date of the Registration Statement, adopt, propose to
adopt or otherwise permit to exist any employee, officer, director, consultant
or compensation plan or similar arrangement permitting (i) the grant, issue,
sale or entry into any agreement to grant, issue or sell any option, warrant or
other contract right (x) at an exercise price that is less than the fair market
value on the date of grant or sale or (y) to any of its executive officers or
directors or to any holder of 5% or more of the Common Stock, except as provided
in subsection (ii) of this subparagraph; (ii) the maximum number of shares of
Common Stock or other securities of the Company purchasable at any time pursuant
to options or warrants issued by the Company to exceed the aggregate _______
shares (subject to reduction pursuant to Section 4(k) herein) reserved for
future issuance under the Company's 1993 Long-Term Incentive Plan described in
footnote one (1) to the "Prospectus Summary - The Offering" section of the
Prospectus; (iii) the payment for such securities with any form of consideration
other than cash or a full recourse promissory note payable to the Company
secured by the securities; or (iv) the existence of stock appreciation rights,
phantom options or similar arrangements.
s. Until the completion of the distribution of the Securities, the
Company shall not, without the prior written consent of the Representative and
the Global Coordinator and their counsel, issue, directly or indirectly any
press release or other communication or hold any press conference with respect
to the Company or its activities or the offering contemplated hereby, other than
trade releases issued in the ordinary course of the Company's business
consistent with past practices with respect to the Company's operations.
t. At the effective date of the Registration Statement and on each
of the Closing Date and each Option Closing Date, if any, the Company shall have
obtained all necessary and required approvals, authorizations, franchises,
licenses, orders, permits, validations and certifications from the United States
Food and Drug Administration (the "FDA") and other domestic and foreign
regulatory authorities required to conduct its business as presently
20
conducted and described in the Prospectus, and none of such approvals,
authorizations, franchises, licenses, orders, permits, validations and
certifications shall have been revoked, restricted or limited in any manner and
all of such approvals, authorizations, franchises, licenses, orders, permits,
validations and certifications shall be in full force and effect on each of the
effective date of the Registration Statement, the Closing Date and each Option
Closing Date, if any.
5. PAYMENT OF EXPENSES.
a. The Company hereby agrees to pay on each of the Closing Date and
the Option Closing Date (to the extent not paid at the Closing Date) all
expenses and fees incident to the performance of the obligations of the Company
under this Agreement, including, without limitation, (i) the fees and expenses
of accountants and counsel for the Company, (ii) all costs and expenses incurred
in connection with the preparation, duplication, printing (including mailing and
handling charges), filing, delivery and mailing (including the payment of
postage with respect thereto) of the Registration Statement and the Prospectus
and any amendments and supplements thereto and the printing, mailing (including
the payment of postage with respect thereto) and delivery of this Agreement, the
Agreement Among Underwriters, the Selected Dealer Agreements, and related
documents, including the cost of all copies thereof and of the Preliminary
Prospectuses and of the Prospectus and any amendments thereof or supplements
thereto supplied to the Underwriters and such dealers as the Underwriters may
request, in quantities as hereinabove stated, (iii) the [printing, engraving],
issuance and delivery of the Securities including, but not limited to, (x) the
purchase by the Underwriters of the Firm Securities and the Option Securities,
(y) the consummation by the Company of any of its obligations under this
Agreement, and (z) resale of the Firm Securities and the Option Securities by
the Underwriters in connection with the distribution contemplated hereby,
(iv) fees and expenses of Underwriters' counsel provided that fees to Xxxxxx,
Xxxxxxxxxx & Xxxxxxxxx LLP will not exceed $ (assuming a no review by
the Staff of the Commission) and fees to Xxxxxx Xxxxxxxx will not exceed
, (v) advertising costs and expenses, including but not limited to
costs and expenses in connection with the "road show", information meetings and
presentations, bound volumes and prospectus memorabilia and "tomb-stone"
advertisement expenses; (vi) costs and expenses in connection with due diligence
investigations, including but not limited to the fees of any independent
counsel, expert or consultant retained, (vii) fees and expenses of the Transfer
Agent and registrar and all issue and transfer taxes, if any,
(viii) applications for assignment of a rating of the Securities by qualified
rating agencies, (ix) the fees payable to the Commission and the NASD, (x) the
fees and expenses incurred in connection with the listing of the Securities on
AMEX and the SSE and any other exchange, and (y) any transfer tax payable by or
on behalf of the Underwriters in connection with (A) the issuance by the Company
of the Securities, (B) the purchase by the Underwriters of the Firm Securities
and the Option Securities respectively, from the Company, (C) the consummation
by the Company of any of its obligations under this Agreement, or (D) resales of
the Firm Securities and the Option Securities in connection with the
distribution contemplated hereby.
b. If this Agreement is terminated by the Underwriters in accordance
with the provisions of SECTION 6 or SECTION 12, the Company shall reimburse and
indemnify the
21
Underwriters for all of their actual out-of-pocket expenses, including the fees
and disbursements of Underwriters' Counsel.
c. All fees, commissions and reimbursements of costs or expenses
payable under this Agreement to Xxxxxx Xxxx are expressed to be exclusive of any
value added or similar tax in Sweden and if at any time any such tax is charged,
the Company shall indemnify Xxxxxx Xxxx on demand from and against the amount of
any such tax, charge or other levy and any penalty, duty, interest, cost or
expense incurred in connection therewith.
6. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The obligations of the
Underwriters hereunder shall be subject to the continuing accuracy of the
representations and warranties of the Company herein as of the date hereof and
as of the Closing Date and each Option Closing Date, if any, as if they had been
made on and as of the Closing Date or each Option Closing Date, as the case may
be; the accuracy on and as of the Closing Date or Option Closing Date, if any,
of the statements of the officers of the Company made pursuant to the provisions
hereof; and the performance by the Company on and as of the Closing Date and
each Option Closing Date, if any, of its covenants and obligations hereunder and
to the following further conditions:
a. The Registration Statement shall have become effective not later
than 12:00 P.M., New York time, on the date of this Agreement or such later date
and time as shall be consented to in writing by the Representative and the
Global Coordinator, and, at the Closing Date and each Option Closing Date, if
any, no stop order suspending the effectiveness of the Registration Statement
shall have been issued and no proceedings for that purpose shall have been
instituted or shall be pending or contemplated by the Commission and any request
on the part of the Commission for additional information shall have been
complied with to the reasonable satisfaction of Underwriters' counsel. If the
Company has elected to rely upon Rule 430A of the Rules and Regulations, the
price of the Shares and any price-related information previously omitted from
the effective Registration Statement pursuant to such Rule 430A shall have been
transmitted to the Commission for filing pursuant to Rule 424(b) of the Rules
and Regulations within the prescribed time period and, prior to the Closing
Date, the Company shall have provided evidence satisfactory to the
Representative and the Global Coordinator of such timely filing, or a post-
effective amendment providing such information shall have been promptly filed
and declared effective in accordance with the requirements of Rule 430A of the
Rules and Regulations.
b. The Underwriters shall not have advised the Company that the
Registration Statement, or any amendment thereto, contains an untrue statement
of fact which, in the opinion of the Representative and the Global Coordinator,
is material, or omits to state a fact which, in the opinion of the
Representative and the Global Coordinator, is material and is required to be
stated therein or is necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, or that the
Prospectus, or any supplement thereto, contains an untrue statement of fact
which, in the opinion of the Representative and the Global Coordinator, is
material, or omits to state a fact which, in the opinion of the Representative
and the Global Coordinator, is material and is required to be
22
stated therein or is necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
c. On or prior to each of the Closing Date and each Option Closing
Date, if any, the Underwriters shall have received from Xxxxxx, Xxxxxxxxxx &
Xxxxxxxxx, LLP and, such opinion or opinions with respect to the organization of
the Company, the validity of the Securities, the Registration Statement, the
Prospectus and other related matters as the Underwriters may request and counsel
to the Underwriters shall have received such papers and information as they
request to enable them to pass upon such matters.
d. At the Closing Date, the Underwriters shall have received the
favorable opinion of Xxxxxx Godward Xxxxxx Xxxxxxxxx & Xxxxx, counsel to the
Company, dated the Closing Date, addressed to the Underwriters and in form and
substance satisfactory to Underwriters' Counsel, to the effect set forth in
Schedule C hereof.
Such counsel shall state that such counsel has participated in conferences
with officers and other representatives of the Company, and representatives of
the independent public accountants for the Company, at which conferences such
counsel made inquiries of such officers, representatives and accountants and
discussed the contents of the Preliminary Prospectus, the Registration
Statement, the Prospectus and related matters and, although such counsel is not
passing upon and does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Preliminary
Prospectus, the Registration Statement and the Prospectus, on the basis of the
foregoing, no facts have come to the attention of such counsel which lead them
to believe that either the Registration Statement or any amendment thereto, at
the time such Registration Statement or amendment became effective or the
Prospectus or any amendment or supplement thereto as of the date of such opinion
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 (it being understood that such counsel need express no opinion
with respect to the financial statements and schedules and other financial and
statistical data included in the Registration Statement or the Prospectus).
Such counsel shall further state that its opinion may be relied upon by counsel
to the Underwriters in rendering its opinion to the Underwriters.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws other than the laws of the United States, the
State of California and the General Corporation Law of the State of Delaware, 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
satisfactory to counsel to the Underwriters) of other counsel acceptable to
counsel to the Underwriters, familiar with the applicable laws and assuming New
York law is the same as California law; (B) as to matters of fact, to the extent
they deem proper, on certificates and written statements of responsible officers
of the Company and certificates or other written statements of officers of
departments of various jurisdictions having custody of documents respecting the
corporate existence or good standing of the Company, provided that copies of any
such statements or certificates shall be delivered to counsel to the
Underwriters if requested. The opinion of such counsel for the Company shall
state that the opinion of any such other counsel is in form satisfactory to such
counsel and that the, Underwriters,
23
counsel to the Underwriters and they are each justified in relying thereon. Any
opinion of counsel for the Company shall not state that it is to be governed or
qualified by, or that it is otherwise subject to, any treatise, written policy
or other document relating to legal opinions, including, without limitation, the
Legal Opinion Accord of the ABA Section of Business Law (1991) or any comparable
state accord.
e. At the Closing Date, the Underwriters shall have received the
favorable opinion of Xxxxxx, Xxxxxxx, Xxxxx & Bear, special patent counsel to
the Company, dated the Closing Date, addressed to the Underwriters, in form and
substance satisfactory to Underwriters' Counsel, and in substantially the form
of Schedule B attached hereto.
f. Local Swedish Counsel Opinion.
g. At each Option Closing Date, if any, the Underwriters shall have
received the favorable opinions of each of Xxxxxx Godward Xxxxxx Xxxxxxxxx &
Xxxxx, counsel to the Company, Xxxxxx, Xxxxxxx, Xxxxx & Bear, special patent
counsel to the Company, addressed to the Underwriters and in form and substance
satisfactory to counsel to the Underwriters confirming as of such Option Closing
Date the statements made by each of Xxxxxx Godward Xxxxxx Xxxxxxxxx & Xxxxx, and
Xxxxxx, Xxxxxxx, Xxxxx & Xxxx, in their respective opinions delivered on the
Closing Date.
h. On or prior to each of the Closing Date and each Option Closing
Date, if any, counsel to the Underwriters shall have been furnished such
documents, certificates and opinions as they may reasonably require for the
purpose of enabling them to review or pass upon the matters referred to in
subsection (c) of this SECTION 6, or in order to evidence the accuracy,
completeness or satisfaction of any of the representations, warranties or
conditions of the Company, or herein contained.
i. Prior to each of the Closing Date and each Option Closing Date, if
any, (i) there shall have been no adverse change nor development involving a
prospective change in the condition, financial or otherwise, earnings, position,
value, properties, results of operations, prospects, stockholders' equity or the
business activities of the Company whether or not in the ordinary course of
business, from the latest dates as of which such condition is set forth in the
Registration Statement and Prospectus; (ii) there shall have been no
transaction, not in the ordinary course of business, entered into by the Company
from the latest date as of which the financial condition of the Company is set
forth in the Registration Statement and the Prospectus which is adverse to the
Company; (iii) except as otherwise disclosed in the Registration Statement and
Prospectus, the Company shall not be in default under any provision of any
instrument relating to any outstanding indebtedness; (iv) except as otherwise
disclosed in the Registration Statement and Prospectus, the Company shall not
have issued any securities (other than the Securities) or declared or paid any
dividend or made any distribution in respect of its capital stock of any class
and there has not been any change in the capital stock or any change in the debt
(long or short term) or liabilities or obligations of the Company (contingent or
otherwise); (v) no material amount of the assets of the Company shall have been
pledged or mortgaged, except as set forth in the Registration Statement and
Prospectus, (vi) except as otherwise disclosed in the Registration Statement and
Prospectus,
24
no action, suit or proceeding, at law or in equity, shall have been pending or
threatened (or circumstances giving rise to same) against the Company or
affecting any of its properties or businesses before or by any court or federal,
state or foreign commission, board or other administrative agency wherein an
unfavorable decision, ruling or finding may adversely affect the business,
operations, earnings, position, value, properties, results of operations,
prospects or financial condition or income of the Company; and (vii) no stop
order shall have been issued under the Act and no proceedings therefor shall
have been initiated, threatened or contemplated by the Commission.
j. At each of the Closing Date and each Option Closing Date, if any,
the Underwriters shall have received a certificate of the Company signed by the
principal executive officer and by the chief financial or chief accounting
officer of the Company, dated the Closing Date or Option Closing Date, as the
case may be, to the effect that each of such persons has carefully examined the
Registration Statement, Prospectus and this Agreement, and that:
i. The representations and warranties of the Company in this
Agreement are true and correct, as if made on and as of the Closing Date or
the Option Closing Date, as the case may be, and the Company has complied
with all agreements and covenants and satisfied all conditions contained in
this Agreement on its part to be performed or satisfied at or prior to such
Closing Date or Option Closing Date, as the case may be;
ii. No stop order suspending the effectiveness of the Registration
Statement or any part thereof has been issued, and no proceedings for that
purpose have been instituted or are pending or, to the best of each of
such person's knowledge, after due inquiry, are contemplated or threatened
under the Act;
iii. The Registration Statement and Prospectus and, if any, each
amendment and each supplement thereto, contain all statements and
information required to be included therein, and none of the Registration
Statement, Prospectus nor any amendment or supplement thereto includes any
untrue statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading and neither the Preliminary Prospectus or any supplement
thereto included any untrue statement of a material fact or omitted to
state any 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; and
iv. Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, (a) the Company has
not incurred up to and including the Closing Date or the Option Closing
Date, as the case may be, other than in the ordinary course of its
business, any material liabilities or obligations, direct or contingent;
(b) the Company has not paid or declared any dividends or other
distributions on its capital stock; (c) the Company has not entered into
any transactions not in the ordinary course of business; (d) there has not
been any change in the capital stock or long-term debt or any increase in
the short-term borrowings (other than the issuance of capital stock
pursuant to the exercise of outstanding stock options described
25
in the Prospectus and any increase in the short-term borrowings in the
ordinary course of business) of the Company; (e) the Company has not
sustained any loss or damage to any of its properties or assets, whether or
not insured; (f) there is no litigation which is pending or threatened (or
circumstances giving rise to same) against the Company or any affiliated
party of any of the foregoing which is required to be set forth in an
amended or supplemented Prospectus which has not been set forth; and (g)
there has occurred no event required to be set forth in an amended or
supplemented Prospectus which has not been set forth.
References to the Registration Statement and the Prospectus in this subsection
(j) are to such documents as amended and supplemented at the date of such
certificate.
k. By the Closing Date, the Underwriters will have received clearance
from the NASD as to the amount of compensation allowable or payable to the
Underwriters, as described in the Registration Statement.
l. At the time this Agreement is executed, the Underwriters shall have
received a letter, dated such date, addressed to the Underwriters in form and
substance satisfactory in all respects to the Underwriters and counsel to the
Underwriters, from KPMG Peat Marwick LLP containing statements and information
of the type ordinarily included in accountant's "comfort letters" to U.S.
Underwriters with respect to financial information contained in the Registration
Statement and the Prospectus.
m. At the Closing Date and each Option Closing Date, if any, the
Underwriters shall have received from KPMG Peat Marwick LLP a letter, dated as
of the Closing Date or the Option Closing Date, as the case may be, to the
effect that they reaffirm that statements made in the letter furnished pursuant
to SUBSECTION (l) of this SECTION, except that the specified date referred to
therein shall be a date not more than five (5) days prior to the Closing Date or
the Option Closing Date, as the case may be.
n. On each of the Closing Date and each Option Closing Date, if any,
there shall have been duly tendered to the Underwriters for the Underwriters'
accounts the appropriate number of Securities.
o. No order suspending the sale of the Securities in any jurisdiction
designated by the Underwriters pursuant to SUBSECTION (e) of SECTION 4 hereof
shall have been issued on either the Closing Date or the Option Closing Date, if
any, and no proceedings for that purpose shall have been instituted or shall be
contemplated.
p. On or before the Closing Date, the Firm Securities and Option
Securities shall have been duly approved for listing on AMEX and the SSE,
subject to official notice of issuance.
q. On or before the Closing Date, there shall have been delivered to
the Underwriters all of the Lock-up Agreements, in form and substance
satisfactory to Underwriters' Counsel.
26
If any condition to the Underwriters' obligations hereunder to be fulfilled
prior to or at the Closing Date or the relevant Option Closing Date, as the case
may be, is not so fulfilled, the Underwriters may terminate this Agreement or,
if the Underwriters so elect, they may waive any such conditions which have not
been fulfilled or extend the time for their fulfillment.
7. INDEMNIFICATION.
a. The Company agrees to indemnify and hold harmless the Underwriters
(for purposes of this SECTION 7 "Underwriter" shall include the officers,
directors, partners, employees, agents and counsel of the Underwriters,
including specifically each person who may be substituted for the Underwriters
as provided in SECTION 11 hereof), and each person, if any, who controls the
Underwriters ("controlling person") within the meaning of Section 15 of the
Act or Section 20(a) of the Exchange Act, from and against any and all losses,
claims, damages, expenses or liabilities, joint or several (and actions,
proceedings, investigations, inquiries, suits and litigation in respect
thereof), whatsoever (including but not limited to any and all expenses
whatsoever reasonably incurred in investigating, preparing or defending against
any such claim, action, proceeding, investigation, inquiry, suit or litigation,
commenced or threatened, or any claim whatsoever), as such are incurred, to
which the Underwriters or such controlling person may become subject under the
Act, the Exchange Act or any other statute or at common law or otherwise or
under the laws of foreign countries, arising out of or based upon any untrue
statement or alleged untrue statement of a material fact contained (i) in any
Preliminary Prospectus, the Registration Statement or the Prospectus (as from
time to time amended and supplemented); (ii) in any post-effective amendment or
amendments or any new registration statement and prospectus in which is included
securities of the Company issued or issuable upon exercise of the Securities; or
(iii) in any application or other document or written communication (in this
SECTION 7 collectively called "application") executed by the Company or based
upon written information furnished by the Company in any jurisdiction in order
to qualify the Securities under the securities laws thereof or filed with the
Commission, any state securities commission or agency, AMEX, the SSE or any
other securities exchange; or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make the statements
therein not misleading (in the case of the Prospectus, in the light of the
circumstances under which they were made), unless such statement or omission was
made in reliance upon and in strict conformity with written information
furnished to the Company with respect to the Underwriters by or on behalf of the
Underwriters expressly for use in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or any amendment thereof or supplement thereto, or
in any application, as the case may be.
The indemnity agreement in this SUBSECTION (a) shall be in addition to any
liability which the Company may have at common law or otherwise.
b. The Underwriters agree to indemnify and hold harmless the Company,
each of its directors, each of its officers who has signed the Registration
Statement, and each other person, if any, who controls the Company within the
meaning of the Act, to the same extent as the foregoing indemnity from the
Company to the Underwriters but only with respect to
27
statements or omissions, if any, made in any Preliminary Prospectus, the
Registration Statement or Prospectus or any amendment thereof or supplement
thereto or in any application made in reliance upon, and in strict conformity
with, written information furnished to the Company with respect to the
Underwriters by the Underwriters expressly for use in such Preliminary
Prospectus, the Registration Statement or Prospectus or any amendment thereof or
supplement thereto or in any such application, provided that such written
information or omissions only pertain to disclosures in the Preliminary
Prospectus, the Registration Statement or Prospectus directly relating to the
transactions effected by the International Underwriter in connection with this
Offering. The Company acknowledges that the statements with respect to the
public offering of the Firm Securities and the Option Securities set forth under
the heading "Underwriting" and the stabilization legend in the Prospectus have
been furnished by the Underwriters expressly for use therein and constitute the
only information furnished in writing by or on behalf of the Underwriters for
inclusion in the Prospectus.
c. Promptly after receipt by an indemnified party under this SECTION 7
of notice of the commencement of any claim, action, suit, investigation,
inquiry, proceeding or litigation, such indemnified party shall, if a claim in
respect thereof is to be made against one or more indemnifying parties under
this SECTION 7, notify each party against whom indemnification is to be sought
in writing of the commencement thereof (but the failure so to notify an
indemnifying party shall not relieve it from any liability which it may have
under this SECTION 7 except to the extent that it has been prejudiced in any
material respect by such failure or from any liability which it may have
otherwise). In case any such claim, action, suit, investigation, inquiry,
proceeding or litigation is brought against any indemnified party, and it
notifies an indemnifying party or parties of the commencement thereof, the
indemnifying party or parties will be entitled to participate therein, and to
the extent it may elect by written notice delivered to the indemnified party
promptly after receiving the aforesaid notice from such indemnified party, to
assume the defense thereof with counsel reasonably satisfactory to such
indemnified party. Notwithstanding the foregoing, the indemnified party or
parties shall have the right to employ its or their own counsel in any such case
but the fees and expenses of such counsel shall be at the expense of such
indemnified party or parties unless (i) the employment of such counsel shall
have been authorized in writing by the indemnifying parties in connection with
the defense thereof at the expense of the indemnifying party, (ii) the
indemnifying parties shall not have employed counsel reasonably satisfactory to
such indemnified party to have charge of the defense thereof within a reasonable
time after notice of commencement thereof, or (iii) such indemnified party or
parties shall have reasonably concluded that there may be defenses available to
it or them which are different from or additional to those available to one or
all of the indemnifying parties (in which case the indemnifying parties shall
not have the right to direct the defense thereof on behalf of the indemnified
party or parties), in any of which events such fees and expenses of one
additional counsel shall be borne by the indemnifying parties. In no event
shall the indemnifying parties be liable for fees and expenses of more than one
counsel (in addition to any local counsel) separate from their own counsel for
all indemnified parties in connection with any one claim, action, suit,
investigation, inquiry, proceeding or litigation or separate but similar or
related claims, actions, suits, investigations, inquiries, proceedings or
litigation in the same jurisdiction arising out of the same general allegations
or
28
circumstances. Anything in this SECTION 7 to the contrary notwithstanding, an
indemnifying party shall not be liable for any settlement of any claim, action,
suit, investigation, inquiry, proceeding or litigation effected without its
written consent; PROVIDED, HOWEVER, that such consent was not unreasonably
withheld. An indemnifying party will not, without the prior written consent of
the indemnified parties, settle, compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit,
investigation, inquiry, proceeding or litigation in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim, action, suit,
investigation, inquiry, proceeding or litigation), unless such settlement,
compromise or consent (i) includes an unconditional release of each indemnified
party from all liability arising out of such claim, action, suit, investigation,
inquiry, proceeding or litigation and (ii) does not include a statement as to or
an admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.
d. In order to provide for just and equitable contribution in any case
in which (i) an indemnified party makes claim for indemnification pursuant to
this SECTION 7, but it is judicially determined (by the entry of a final
judgment or decree by a court of competent jurisdiction and the expiration of
time to appeal or the denial of the last right of appeal) that such
indemnification may not be enforced in such case notwithstanding the fact that
the express provisions of this SECTION 7 provide for indemnification in such
case, or (ii) contribution under the Act may be required on the part of any
indemnified party, then each indemnifying party shall contribute to the amount
paid as a result of such losses, claims, damages, expenses or liabilities (or
actions in respect thereof) (A) in such proportion as is appropriate to reflect
the relative benefits received by each of the contributing parties, on the one
hand, and the party to be indemnified on the other hand, from the offering of
the Firm Securities and the Option Securities or (B) if the allocation provided
by clause (A) 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 each of the contributing parties, on the
one hand, and the party to be indemnified, on the other hand, in connection with
the statements or omissions that resulted in such losses, claims, damages,
expenses or liabilities, as well as any other relevant equitable considerations.
In any case where the Company is the contributing party and the Underwriters are
the indemnified party, the relative benefits received by the Company on the one
hand, and the Underwriters, on the other, shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Firm Securities
and the Option Securities (before deducting expenses) bear to the total
underwriting discounts received by the Underwriters hereunder, in each case as
set forth in the table on the Cover Page of the Prospectus. Relative fault
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 untrue statement or
omission. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages, expenses or liabilities (or actions in respect thereof)
referred to above in this SUBSECTION (d) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this SUBSECTION (d), the
29
Underwriters shall not be required to contribute any amount in excess of the
underwriting discount applicable to the Firm Securities and the Option
Securities purchased by the Underwriters hereunder. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this SECTION 7, each person, if
any, who controls the Company within the meaning of the Act, each officer of the
Company who has signed the Registration Statement, and each director of the
Company shall have the same rights to contribution as the Company, subject in
each case to this SUBSECTION (d). Any party entitled to contribution will,
promptly after receipt of notice of commencement of any action, suit or
proceeding against such party in respect to which a claim for contribution may
be made against another party or parties under this SUBSECTION (d), notify such
party or parties from whom contribution may be sought, but the omission so to
notify such party or parties shall not relieve the party or parties from whom
contribution may be sought from any obligation it or they may have hereunder or
otherwise than under this SUBSECTION (d), or to the extent that such party or
parties were not adversely affected by such omission. The contribution
agreement set forth above shall be in addition to any liabilities which any
indemnifying party may have at common law or otherwise.
8. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. All
representations, warranties and agreements contained in this Agreement or
contained in certificates of officers of the Company submitted pursuant hereto,
shall be deemed to be representations, warranties and agreements at the Closing
Date and the Option Closing Date, as the case may be, and such representations,
warranties and agreements of the Company and the indemnity agreements contained
in SECTION 7 hereof, shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of the Underwriters, the
Company, any controlling person of the Underwriters or the Company, and shall
survive termination of this Agreement or the issuance and delivery of the
Securities to the Underwriters, as the case may be.
9. EFFECTIVE DATE. This Agreement shall become effective at 10:00 a.m.,
New York City time, on the next full business day following the date hereof, or
at such earlier time after the Registration Statement becomes effective as the
Underwriters, in their discretion, shall release the Securities for sale to the
public; PROVIDED, HOWEVER, that the provisions of SECTIONS 5, 7 and 10 of this
Agreement shall at all times be effective. For purposes of this SECTION 9, the
Securities to be purchased hereunder shall be deemed to have been so released
upon the earlier of dispatch by the Underwriters of telegrams to securities
dealers releasing such securities for offering or the release by the
Underwriters for publication of the first newspaper advertisement which is
subsequently published relating to the Securities.
10. TERMINATION.
a. Subject to SUBSECTION (b) of this SECTION 10, the Global
Representative shall have the right to terminate this Agreement, (i) if any
domestic or international event or act or occurrence has disrupted, or in the
Global Representative's opinion will in the immediate future disrupt, the
financial markets; or (ii) if any material adverse change in the financial
markets shall have occurred; or (iii) if trading generally shall have been
suspended or
30
materially limited on or by, as the case may be, any of the New York Stock
Exchange, the American Stock Exchange, the NASD, the Boston Stock Exchange, the
Stockholm Stock Exchange, any over-the-counter market, the Commission or any
other government authority having jurisdiction, or if minimum or maximum prices
for trading shall have been fixed, or maximum ranges for prices for securities
shall have been required on the over-the-counter market, by the NASD or by order
of the Commission or any other government or other authority having
jurisdiction; or (iv) if trading of any of the securities of the Company shall
have been suspended, or any of the securities of the Company shall have been
delisted, on any exchange or in any over-the-counter market; or (v) if the
United States shall have become involved in a war or major hostilities, or if
there shall have been an escalation in an existing war or major hostilities or a
national emergency shall have been declared in the United States; or (vi) if a
banking moratorium has been declared by a state or federal authority; or (vii)
if a moratorium in foreign exchange trading has been declared; or (viii) if the
Company shall have sustained a loss material or substantial to the Company by
fire, flood, accident, hurricane, earthquake, theft, sabotage or other calamity
or malicious act which, whether or not such loss shall have been insured, will,
in the Underwriters' opinion, make it inadvisable to proceed with the offering,
sale and/or delivery of the Securities; or (ix) if there shall have been such a
material adverse change in the conditions or prospects of the Company, or such
material adverse change in the general market, political or economic conditions,
in the United States or elsewhere, that, in each case, in the Underwriters'
judgment, would make it inadvisable to proceed with the offering, sale and/or
delivery of the Securities or (x) if Xxxxx X. Xxxxxxxxx shall no longer serve
the Company in his present capacity.
b. [to be discussed] If this Agreement is terminated by the
Underwriters in accordance with the provisions of SECTION 10(a) the Company
shall promptly reimburse and indemnify the Underwriters for all of their actual
out-of-pocket expenses, including the fees and disbursements of counsel for the
Underwriters (less amounts previously paid pursuant to SECTION 5(c) above);
PROVIDED, HOWEVER, that any such actual out-of-pocket expenses payable to the
Underwriters shall not exceed $_________ and, FURTHER PROVIDED, that the
Underwriters will refund to the Company any unaccounted-for portion of any
amounts already advanced by the Company to the Underwriters pursuant to SECTION
5(c) hereof. Notwithstanding any contrary provision contained in this
Agreement, if this Agreement shall not be carried out within the time specified
herein, or any extension thereof granted by the Underwriters, by reason of any
failure on the part of the Company to perform any undertaking or satisfy any
condition of this Agreement by it to be performed or satisfied (including,
without limitation, pursuant to SECTION 6 or SECTION 12) then, the Company shall
promptly reimburse and indemnify the Underwriters for all of their actual out-
of-pocket expenses, including the fees and disbursements of counsel for the
Underwriters (less amounts previously paid pursuant to SECTION 5(c) above);
PROVIDED, HOWEVER, that any such actual out-of-pocket expenses payable to the
Underwriters shall not exceed $_______ and, FURTHER PROVIDED, that the
Underwriters will refund to the Company any unaccounted-for portion of any
amounts already advanced by the Company to the Underwriters pursuant to SECTION
5(c) hereof. In addition, the Company shall remain liable for all counsel fees
and disbursements, expenses and filing fees. Notwithstanding any contrary
provision contained in this Agreement, any election hereunder or any termination
of this Agreement (including, without
31
limitation, pursuant to SECTIONS 6, 10, 11 and 12 hereof), and whether or not
this Agreement is otherwise carried out, the provisions of SECTION 5 and SECTION
7 shall not be in any way affected by such election or termination or failure to
carry out the terms of this Agreement or any part hereof.
11. SUBSTITUTION OF THE UNDERWRITERS. [Subject to modification based upon
final underwriting terms.] If on the Closing Date or the Option Closing Date, as
the case may be, any one or more of the Underwriters shall fail (otherwise than
for a reason sufficient to justify the termination of this Agreement under the
provisions of SECTION 6, SECTION 10 or SECTION 12 hereof) to purchase or
subscribe or procure purchasers for, the Securities which it or they are
obligated to purchase or subscribe and pay for on such date under this Agreement
(the "Defaulted Securities"), the Representative shall have the right, within 24
hours thereafter, to make arrangement for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and upon the
terms herein set forth; if, however, the Representative shall not have completed
such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
total number of Firm Securities to be purchased on such date, the non-
defaulting Underwriters shall be obligated to purchase the full amount
thereof in the proportions that their respective underwriting obligations
hereunder bear to the underwriting obligations of all non-defaulting
Underwriters, or in such other proportions as the Global Coordinator may
specify, PROVIDED THAT in no event shall the number of Shares that any
Underwriter has agreed to purchase be increased by an amount in excess of
one-ninth of such number of Shares without the prior written consent of
such Underwriter, or
(b) if the number of Defaulted Securities exceeds 10% of the total
number of Firm Securities, this Agreement shall terminate without liability
on the part of any non-defaulting Underwriters (or, if such default shall
occur with respect to any Option Securities to be purchased on an Option
Closing Date, the Underwriters may at the Representative's option, by
notice from the Representative to the Company, terminate the Underwriters'
obligation to purchase Option Securities from the Company on such date).
No action taken pursuant to this SECTION 11 shall relieve any defaulting
Underwriter from liability in respect of any default by such Underwriter under
this Agreement.
In the event of any such default which does not result in a termination of
this Agreement, the Representative shall have the right to postpone the Closing
Date for a period not exceeding seven (7) days in order to effect any required
changes in the Registration Statement or Prospectus or in any other documents or
arrangements.
12. DEFAULT BY THE COMPANY. If the Company shall fail at the Closing Date
or at any Option Closing Date, as applicable, to sell and deliver the number of
Securities which it is obligated to sell hereunder on such date, then this
Agreement shall terminate (or, if such default shall occur with respect to any
Option Securities to be purchased on an Option
32
Closing Date, the Underwriters may at the Underwriters' option, by notice from
the Underwriters to the Company, terminate the Underwriters' obligation to
purchase Option Securities from the Company on such date) without any liability
on the part of any non-defaulting party other than pursuant to SECTION 5,
SECTION 7 and SECTION 10 hereof. No action taken pursuant to this SECTION 12
shall relieve the Company from liability, if any, in respect of such default.
13. NOTICES. All notices and communications hereunder, except as herein
otherwise specifically provided, 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 directed to the
Representative at Xxxxxx & Xxxxxxx, 0 Xxxxx Xxxxxxxxx Xxxxxx, Tower-B, 30th
Floor, New York, New York 10281, Attention: _____________ and to the
International Underwriter at Xxxxxx Xxxx Fondkommission AB, _________________,
Attention: _____________, with a copy to Xxxxxx, Xxxxxxxxxx & Xxxxxxxxx LLP,
000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxxx X. Xxxxxx, Esq.
Notices to the Company shall be directed to the Company at 0000 Xxxxxxxxx Xxxxx,
Xxxxx 000, Xxx Xxxxx, Xxxxxxxxxx 00000, Attention: Xxxxx X. Xxxxxxxxx, Chairman
and Chief Executive Officer, with a copy to Xxxxxx Godward Xxxxxx Xxxxxxxxx &
Xxxxx, 0000 Xxxxxxxxx Xxxxx, Xxxxx 0000, Xxx Xxxxx, Xxxxxxxxxx 00000-0000,
Attention: Xxxxx X. Xxxxxxx, Esq.
14. PARTIES. This Agreement shall inure solely to the benefit of and
shall be binding upon, the Underwriters, the Company and the controlling
persons, directors and officers referred to in SECTION 7 hereof, and their
respective successors, legal representatives and assigns, and no other person
shall have or be construed to have any legal or equitable right, remedy or claim
under or in respect of or by virtue of this Agreement or any provisions herein
contained. No purchaser of Securities from any Underwriter shall be deemed to
be a successor by reason merely of such purchase.
15. CONSTRUCTION. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of New York without giving
effect to the choice of law or conflict of laws principles.
16. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, and all of which
taken together shall be deemed to be one and the same instrument.
17. ENTIRE AGREEMENT; AMENDMENTS. This Agreement constitutes the entire
agreement of the parties hereto and supersede all prior written or oral
agreements, understandings and negotiations with respect to the subject matter
hereof. This Agreement may not be amended except in a writing, signed by the
Underwriters and the Company.
33
If the foregoing correctly sets forth the understanding between the
Underwriters and the Company, please so indicate in the space provided below for
that purpose, whereupon this letter shall constitute a binding agreement among
us.
Very truly yours,
MAXIM PHARMACEUTICALS, INC.
By:
--------------------------------------
Xxxxx X. Xxxxxxxxx
Chairman and Chief Executive Officer
Confirmed and accepted as of
the date first above written.
XXXXXX XXXX FONDKOMMISSION AB
as Global Coordinator
By:
---------------------------
XXXXXX & XXXXXXX, INC.
As Representative of the U.S.
Underwriters
By:
---------------------------
34
SCHEDULE A
NUMBER OF SHARES
NAME OF INTERNATIONAL UNDERWRITER TO BE PURCHASED
--------------------------------- ---------------
Xxxxxx Xxxx Fondkommission AB . . . . . . . . . . . . 2,000,000
Total . . . . . . . . . . . . . . . . . . . . . . . . 2,000,000
---------
---------
NUMBER OF SHARES
NAME OF U.S. UNDERWRITER TO BE PURCHASED
------------------------ ---------------
Xxxxxx & Xxxxxxx . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . 500,000
---------
---------
35
SCHEDULE B
[FORM OF INTELLECTUAL PROPERTY OPINION]
SCHEDULE C
[FORM OF XXXXXX GODWARD OPINION]
