<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 30, 1999
REGISTRATION NO. 333-84711
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- -----------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
MAXIM PHARMACEUTICALS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 87-0279983
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
8899 UNIVERSITY CENTER LANE, SUITE 400
SAN DIEGO, CALIFORNIA 92122
(858) 453-4040
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA
CODE, OR REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
DALE A. SANDER
VICE PRESIDENT, FINANCE, CHIEF FINANCIAL OFFICER AND SECRETARY
MAXIM PHARMACEUTICALS, INC.
8899 UNIVERSITY CENTER LANE, SUITE 400
SAN DIEGO, CALIFORNIA 92122
(858) 453-4040
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
COPIES TO:
LANCE W. BRIDGES, ESQ.
COOLEY GODWARD LLP
4365 EXECUTIVE DRIVE, SUITE 1100
SAN DIEGO, CALIFORNIA 92121
(858) 550-6000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. / /
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities
Act of 1933, other than securities offered in connection with dividend or
interest reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / / ________________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / / ________________
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. / / ________________
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
==================================================================================================================
Proposed Maximum Proposed Maximum
Title of Each Class of Additional Amount to Offering Price Aggregate Amount of
Securities to be Registered be Registered Per Share (1) Offering Price (1) Registration Fee
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value
$.001..................... 532,390 $7.844 $4,176,067.16 $1,231.94 (2)
==================================================================================================================
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457 of the Securities Act of 1933 based upon the average
of the high and low prices of Registrant's Common Stock on August 27, 1999
as reported on the American Stock Exchange.
(2) Previously paid $5,751.17 at original filing related to 2,327,820 common
shares.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT THAT SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
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<PAGE>
PROSPECTUS
2,860,210 SHARES
MAXIM PHARMACEUTICALS, INC.
COMMON STOCK
The selling stockholders identified in this prospectus are selling
2,860,210 shares of Maxim Pharmaceuticals, Inc. common stock. Maxim will not
receive any of the proceeds from the sale of shares by the selling stockholders.
Our common stock is listed on the American Stock Exchange ("AMEX") under the
symbol "MMP" and on the Stockholm Stock Exchange under the symbol "MAXM". The
closing sale price of the common stock, as reported on AMEX on August 27, 1999,
was $7.875 per share.
INVESTING IN THE COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. SEE "RISK
FACTORS," BEGINNING ON PAGE 3.
Neither the Securities Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The date of this prospectus is August 30, 1999.
<PAGE>
SUMMARY
IN THIS PROSPECTUS, THE WORDS "WE," "OUR," AND "US" REFER ONLY TO MAXIM
AND NOT TO THE SELLING STOCKHOLDERS OR ANY OTHER PERSON. THIS PROSPECTUS
CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE CERTAIN RISKS AND
UNCERTAINTIES. OUR ACTUAL RESULTS COULD BE VERY DIFFERENT THAN THE RESULTS WE
DISCUSS IN THIS PROSPECTUS OR THE INFORMATION WE INCORPORATE BY REFERENCE INTO
THIS PROSPECTUS. FACTORS THAT COULD CAUSE OR CONTRIBUTE TO SUCH DIFFERENCES
INCLUDE, BUT ARE NOT LIMITED TO, THOSE DISCUSSED IN THE FOLLOWING SECTION AND
THOSE DISCUSSED IN THE SECTION ENTITLED "RISK FACTORS."
THE COMPANY
Maxim is developing a new generation of drugs, therapies and vaccines
for cancer, infectious diseases and topical disorders.
Our lead drug candidate, MAXAMINE-TM-, is currently being tested in
three Phase 3 cancer clinical trials in 12 countries around the world. A Phase 3
trial is a large-scale test designed to be the final human study demonstrating
the safety and efficacy of a drug and supporting an application to the U.S. Food
and Drug Administration or international regulatory agencies for marketing
approval. The initial market launch of Maxamine is planned for early 2001 in the
U.S. and late 2001 in certain countries outside the U.S.
A series of Phase 2 clinical trials was conducted in which patients
with malignant melanoma, the most deadly form of skin cancer, and acute
myelogenous leukemia, the most common acute adult leukemia, were treated with
MAXAMINE. A Phase 2 trial is an intermediate test designed to show a
preliminary evidence of efficacy of the drug being tested. These studies have
shown a more than doubling of survival and remission times for patients
treated with MAXAMINE as well as the ability to maintain patient quality of
life during treatment with the drug. Earlier-stage clinical studies have also
suggested promise in the following diseases:
- Renal cell carcinoma, a cancer of the kidneys;
- Multiple myeloma, a cancer of the bone marrow; and
- Hepatitis C, a viral infection targeting the liver.
More than 750 patients have been treated in our completed and ongoing
clinical trials.
A second product platform under development is MAXDERM-TM-, a
MAXAMINE-related series of drugs for the treatment of certain topical disorders.
Randomized, blinded, placebo-controlled trials have been conducted in more than
75 patients. Studies in patients with oral mucositis, a serious side effect of
chemotherapy and radiation treatment of cancer patients, and cold sores
suggested that MAXDERM resolved lesions more effectively than a placebo control.
Other clinical data suggests that MAXDERM may be beneficial in the treatment of
bed sores, shingles, burns, eye infections and other related conditions. Our
third technology platform, MAXVAX-TM-, is currently in preclinical development
and is designed to facilitate a new class of needle-free mucosal vaccines for
several infectious diseases including respiratory infections, sexually
transmitted diseases, and gastrointestinal tract diseases.
THE OFFERING
We recently completed a preferred stock financing from which we received
aggregate proceeds of $20.1 million. We are obligated to register the common
stock issuable upon conversion of this preferred stock so that it can be resold
in the public market. We are also registering the common stock issuable upon
exercise of warrants held by certain advisors to Maxim. We will not receive any
of the proceeds from the sale of common stock pursuant to this prospectus.
The selling stockholders may sell the shares of common stock described
in this prospectus in public or private transactions, on or off AMEX, at
prevailing market prices, or at privately negotiated prices. The selling
stockholders may sell shares directly to purchasers or through brokers or
dealers. Brokers or dealers may receive compensation in the form of discounts,
concessions or commissions from the selling stockholders.
More information is provided in the section entitled "Plan of Distribution."
Our principal executive offices are located at 8899 University Center
Lane, Suite 400, San Diego, California 92122 and our telephone number is (619)
453-4040.
2.
<PAGE>
RISK FACTORS
IN EVALUATING OUR BUSINESS, YOU SHOULD CAREFULLY CONSIDER THE FOLLOWING
RISK FACTORS IN ADDITION TO THE OTHER INFORMATION CONTAINED IN THIS PROSPECTUS
AND INCORPORATED BY REFERENCE INTO THIS PROSPECTUS.
WE ARE NOT PROFITABLE AND EXPECT TO CONTINUE TO INCUR LOSSES. IF WE DO NOT
BECOME PROFITABLE, OUR BUSINESS WILL BE HARMED.
We are a development-stage enterprise. We have experienced net losses
every year since our inception and, as of June 30, 1999 had an accumulated
deficit of approximately $71.8 million. We anticipate incurring substantial
additional losses over at least the next several years related to developing and
testing our product candidates and preparing for commercialization of our
products. If we do not become profitable, our stock price will be negatively
affected, and we may ultimately be forced to wind down our operations.
WE WILL LIKELY NEED TO RAISE ADDITIONAL FUNDS IN THE FUTURE. IF WE ARE UNABLE TO
OBTAIN THE FUNDS NECESSARY TO CONTINUE OUR OPERATIONS, OUR BUSINESS WILL BE
HARMED.
We have already spent substantial funds developing our products and
business. We expect to continue to have negative cash flow from our operations
for at least the next several years. We will likely have to raise substantial
additional funds to complete the development of our products and to bring them
to market. Our future capital requirements will depend on numerous factors,
including:
- the results of our clinical trials;
- the timing and scope of any additional clinical trials
undertaken;
- the scope and results of our research and development
programs;
- the time required to obtain regulatory approvals;
- our ability to establish marketing alliances and collaborative
agreements;
- the cost of our internal marketing activities; and
- the cost of filing, prosecuting and, if necessary, enforcing
patent claims.
Additional financing may not be available on acceptable terms, if at
all. If adequate funds are not available, we may be required to delay, scale
back or eliminate one or more of our product development programs or obtain
funds through arrangements with collaborative partners or others that may
require us to relinquish rights to certain of our technologies or products that
we would not otherwise relinquish. This may have a detrimental effect on our
business.
THE DEVELOPMENT OF OUR PRODUCTS IS SUBJECT TO UNCERTAINTIES, MANY OF WHICH ARE
BEYOND OUR CONTROL. IF WE FAIL TO SUCCESSFULLY DEVELOP OUR PRODUCTS, OUR
BUSINESS WILL SUFFER.
Potential products based on our MAXAMINE, MAXDERM and MAXVAX
technologies will require extensive clinical testing, regulatory approval and
substantial additional investment before we can sell them. We cannot assure you
that any of our products will:
- be successfully developed;
- prove to be safe and effective in clinical trials;
- meet applicable regulatory standards;
- be capable of being produced in commercial quantities at
acceptable costs;
- be eligible for third party reimbursement from governmental or
private insurers; or
- be successfully marketed or achieve market acceptance.
We have not completed testing for efficacy or safety in humans on any
of our products, and any delay in our expected testing and development
schedules, or any elimination of product development program entirely, could
harm our business.
3.
<PAGE>
OUR PRODUCT CANDIDATES ARE SUBJECT TO SIGNIFICANT GOVERNMENT REGULATION WHICH
COULD DELAY SALES OF OUR PRODUCTS, INCREASE THE COST OF TESTING OUR PRODUCTS, OR
ELIMINATE OUR ABILITY TO DEVELOP OUR PRODUCTS.
Our product candidates are subject to significant regulation by the
U.S. Food and Drug Administration, or the FDA, as well as similar agencies in
countries outside the United States. Satisfaction of lengthy and detailed
laboratory and clinical testing procedures is costly and may take a number of
years. If we do not receive FDA approval for our products under development, we
will not be able to market or sell our products in the United States. This would
prevent us from generating product revenue in the United States and would be
extremely detrimental to our business and financial condition. European and
other international regulatory approvals are subject to similar risks and
uncertainties as regulatory approvals in the United States.
We are expending substantial time and financial resources to conduct
clinical trials, but we cannot be sure that the results of our clinical trials
will support the submission of an investigational new drug application or a
product license application, or that any applications we do file will be
approved by the FDA or any similar foreign agency on a timely basis, or at all.
Once we do receive regulatory approval, we will still be subject to
ongoing regulatory requirements. Moreover, government regulation may increase at
any time, creating additional costs and delays for us which could harm our
business.
FAILURE TO SECURE ADEQUATE PROTECTION OF OUR INTELLECTUAL PROPERTY OR THE RIGHT
TO USE CERTAIN INTELLECTUAL PROPERTY OF OTHERS COULD BE DETRIMENTAL TO OUR
BUSINESS.
Our success depends in large part on our ability to obtain, maintain
and protect patents, trade secrets and operate without infringing upon the
proprietary rights of others. If we are unable to do so, our products and
technologies may not provide us with any competitive advantage.
The patent positions of biotechnology and pharmaceutical companies are
highly uncertain and involve complex legal and factual questions, and the
breadth of claims allowed in biotechnology and pharmaceutical patents cannot be
predicted. As a result, patents may not issue from any of our patent
applications. Further, patent applications in the United States are secret until
a patent issues, and we cannot be certain that others have not filed patent
applications for technology covered by our pending applications or that we were
the first to file patent applications for this technology. In addition, patents
currently held by us or issued to us in the future, or to licensors from whom we
have licensed technology rights, may be challenged, invalidated or circumvented
so that our intellectual property rights may not protect our technologies or
provide commercial advantage to us. In addition, we also rely on unpatented
trade secrets and proprietary know-how, and we cannot be sure that others will
not obtain access to or independently develop such trade secrets and know-how.
The pharmaceutical industry has experienced extensive litigation
regarding patent and other intellectual property rights. Although, to date, we
are not aware of any intellectual property claims against us, in the future, we
could be forced to incur substantial costs in defending ourselves in lawsuits
that are brought against us claiming that we have infringed the patent rights of
others or in asserting our patent rights in lawsuits against other parties. We
may also be required to participate in interference proceedings declared by the
United States Patent and Trademark Office for the purpose of determining the
priority of inventions in connection with our patent applications or other
parties' patent applications. Adverse determinations in litigation or
interference proceedings could require us to seek licenses that may not be
available on commercially reasonable terms or subject us to significant
liabilities to third parties. This too could negatively affect our business.
OUR FAILURE TO ATTRACT AND RETAIN QUALIFIED PERSONNEL COULD HARM OUR BUSINESS.
Our future performance depends in part upon the continued contributions
of our senior management team and on our ability to attract and retain qualified
management and scientific personnel. Competition for such personnel is intense,
and we do not know if we will be able to continue to attract, assimilate or
retain highly
4.
<PAGE>
qualified technical and management personnel. The loss of key personnel or
the failure to recruit additional personnel or develop needed expertise could
have a material and adverse affect on our business.
BECAUSE WE ARE DEPENDENT ON OUR COLLABORATIVE PARTNERS AND CONTRACTORS FOR
CLINICAL TESTING AND FOR CERTAIN RESEARCH AND DEVELOPMENT ACTIVITIES, THE
RESULTS OF OUR CLINICAL TRIALS AND SUCH RESEARCH ACTIVITIES ARE, TO A CERTAIN
EXTENT, BEYOND OUR CONTROL.
Our business strategy requires us to rely on our collaborative
partners and contractors to assist us with clinical testing and certain
research and development activities. As a result, our success is dependent
upon the success of these outside parties in performing their
responsibilities. Although we believe our collaborative partners are
economically motivated to perform on their contractual obligations, we can
not control the amount of and timing of resources and skill applied to these
activities by our collaborators. In addition, we may not be able to negotiate
acceptable collaborative arrangements in the future required to implement our
business strategy, and even if we are able to enter into further
collaborative arrangements in the future, we cannot be sure that these
arrangements will be successful.
WE HAVE NO EXPERIENCE MARKETING OR SELLING PHARMACEUTICAL PRODUCTS. OUR
BUSINESS WILL BE HARMED IF WE, OR THE COLLABORATIVE PARTNERS ON WHOM WE RELY,
ARE UNABLE TO SUCCESSFULLY MARKET AND SELL OUR PRODUCTS.
Although we intend to market MAXAMINE directly in the United States,
we have never marketed or sold any pharmaceutical product before. In order to
market and sell MAXAMINE or other products, we will need to develop a sales
force and a marketing group with relevant pharmaceutical experience, or make
appropriate arrangements with strategic partners. We cannot guarantee that we
will be able to attract, assimilate or retain highly qualified marketing and
sales personnel, or successfully employ them to commercialize MAXAMINE. If we
cannot develop the required marketing and sales expertise our business will
likely suffer.
We intend to rely on our collaborative partners to market and sell
MAXAMINE in international markets, and such arrangements may be sought to
market MAXDERM and MAXVAX in all markets. We have not yet entered into any
collaborative arrangement with respect to marketing or selling MAXAMINE with
the exception of agreements relating to Australia, New Zealand and Israel,
and have not entered into any agreements regarding MAXDERM or MAXVAX, and we
cannot guarantee that we will be able to enter into any such arrangements on
terms favorable to us, or at all. If we are able to enter into marketing and
selling arrangements with collaborative partners we cannot assure you that
such marketing collaborators will apply adequate resources and skills to
their responsibilities, or that their marketing efforts will be successful.
WE WILL BE DEPENDENT ON THIRD PARTY MANUFACTURERS OF OUR PRODUCTS. REVENUES
MAY BE LOST, COSTS MAY INCREASE AND OUR BUSINESS MAY BE HARMED TO THE EXTENT
WE ARE UNABLE TO SECURE ADEQUATE QUANTITIES OF OUR PRODUCTS FROM THESE
MANUFACTURERS ON A TIMELY BASIS.
We do not intend to acquire or establish our own dedicated
manufacturing facilities for MAXAMINE in the foreseeable future and have, and
expect to continue to, contract with established pharmaceutical manufacturers
for the production of the product. If we are unable to continue to contract
with third-party manufacturers on acceptable terms, our ability to conduct
clinical testing and to produce commercial quantities of MAXAMINE and other
products will be adversely affected. If we cannot adequately manufacture our
products, it could result in delays in submissions for regulatory approval
and in commercial product launches, which in turn could materially impair our
competitive position and the possibility of achieving profitability. We
cannot guarantee that we will be able to maintain our existing contract
manufacturing relationships, or acquire or establish new, satisfactory
third-party relationships to provide adequate manufacturing capabilities in
the future.
5.
<PAGE>
OUR PRODUCTS MAY NOT BE ACCEPTED OR USED BY DOCTORS, PATIENTS OR PAYORS.
FAILURE TO ACHIEVE MARKET ACCEPTANCE WOULD MATERIALLY AND ADVERSELY AFFECT
OUR BUSINESS.
MAXAMINE, and any of our other products in development, may not
achieve market acceptance even if the FDA and similar foreign regulatory
agencies approve the drug. The degree of market acceptance of our products
will depend on a number of factors, including:
- the scope of regulatory approvals;
- the establishment and demonstration in the medical community
of the clinical efficacy and safety of our products;
- their potential advantages over existing treatment methods;
and
- reimbursement policies of government and other third-party
payors.
We cannot guarantee that physicians, patients, payors or the medical
community in general will accept and utilize any products that we develop.
WE COMPETE AGAINST MANY COMPANIES AND RESEARCH INSTITUTIONS THAT ARE DEVELOPING
PRODUCTS TO TREAT THE SAME DISEASES AS OUR PRODUCTS. TO THE EXTENT THESE
COMPETITORS ARE SUCCESSFUL IN DEVELOPING AND MARKETING SUCH PRODUCTS, OUR
BUSINESS COULD BE HARMED.
There are many companies, both publicly and privately held, including
well-known pharmaceutical companies, and academic and other research
institutions, engaged in developing pharmaceutical and biologically-derived
products for the treatment of cancer and vaccines and therapeutics for the
prevention or the treatment of infectious diseases. Products developed by any of
these companies or institutions may demonstrate greater safety or efficacy than
our products or be more widely accepted by doctors, patients or payors. Many of
our competitors and potential competitors have substantially greater capital,
research and development capabilities and human resources than we do and
represent significant competition. Many of these competitors also have
significantly greater experience than we do in undertaking preclinical testing
and clinical trials of new pharmaceutical products and obtaining FDA and other
regulatory approvals. If any of our products are approved for commercial sale,
we will also be competing with companies that have greater resources and
experience in manufacturing, marketing and selling pharmaceutical products. To
the extent that any of our competitors succeed in developing products that are
more effective, less costly, or have better side effect profiles than our
products, then our business could be harmed.
THE TECHNOLOGY IN OUR SECTOR IS DEVELOPING RAPIDLY, AND OUR FUTURE SUCCESS
DEPENDS ON OUR ABILITY TO KEEP ABREAST OF TECHNOLOGICAL CHANGE.
We are engaged in the pharmaceutical field, which is characterized by
extensive research efforts and rapid technological progress. New developments in
oncology, cancer therapy, medicinal pharmacology, biochemistry and other fields
are expected to continue at a rapid pace. Research and discoveries by others may
render some or all of our proposed programs or products noncompetitive or
obsolete. Our business strategy is subject to the risks inherent in the
development of new products using new technologies and approaches. Unforeseen
problems may develop with these technologies or applications, and we may not be
able to successfully address technological challenges we encounter in our
research and development programs. This may result in our inability to develop
commercially feasible products.
THERE ARE SUBSTANTIAL SHARES ELIGIBLE FOR FUTURE SALE. THE SALE OF THESE SHARES
MAY DEPRESS OUR STOCK PRICE.
Sales of substantial amounts of our common stock in the public market
could adversely affect prevailing market prices for our common stock and our
ability to raise equity capital in the future. As of August 5, 1999 we have
outstanding 10,203,600 shares of common stock. Of these shares, an aggregate of
9,299,724 shares are freely tradable in the public market, unless acquired by
our affiliates. The remaining 903,876 shares are "restricted securities" as that
term is defined in Rule 144 under the Securities Act, all of which are eligible
for immediate sale in the public market pursuant to Rule 144, subject to certain
volume and manner of sale limitations. As of August 5, 1999 we also have
outstanding 206,874 shares of preferred stock which are convertible into
2,068,740 shares of
6.
<PAGE>
common stock. All of these shares are restricted shares, none of which are
eligible for immediate sale in the public market pursuant to Rule 144.
However, the shares of common stock issuable upon conversion of such shares
of preferred stock are being registered hereby and will be eligible for
immediate sale in the public market pursuant to such registration.
As of August 5, 1999 approximately 2,483,000 shares of common stock
underlying warrants, 977,310 shares issued or reserved for issuance under our
equity incentive plan, and 44,006 shares reserved for issuance under our
401(k) plan will be available for immediate sale in the public market, unless
purchased by our affiliates. There are 704,668 shares of common stock
underlying certain warrants outstanding as of August 5, 1999 which have not
been registered for public sale and will be subject to the public sale
restrictions of Rule 144 or Rule 701 under the Securities Act, where
applicable if the warrants are exercised. However, 532,390 of the shares of
common stock underlying these warrants are being registered hereby and will
be available for immediate sale in the public market upon such registration.
OUR STOCK PRICE MAY BE HIGHLY VOLATILE DUE TO EXTERNAL FACTORS.
Our common stock currently trades on the American Stock Exchange and on
the Stockholm Stock Exchange. Historically, our common stock has generally
experienced relatively low daily trading volumes in relation to the aggregate
number of shares outstanding. Sales of substantial amounts of our common stock
in the public market could adversely affect the prevailing market prices of our
common stock and our ability to raise equity capital in the future.
Factors that may have a significant impact on the market price or the
liquidity of our common stock also include:
- actual or potential clinical trial results relating to
products under development by us or our competitors;
- delays in our testing and development schedules;
- events or announcements relating to our collaborative
relationships with others;
- announcements of technological innovations or new products by
us or our competitors;
- developments or disputes concerning patents or proprietary
rights;
- regulatory developments in both the United States and
countries outside of the United States;
- economic and other external factors, as well as
period-to-period fluctuations in our financial results.
External factors may also adversely affect the market prices for our
common stock. The price and liquidity of our common stock may be
significantly affected by the overall trading activity and market factors on
the American Stock Exchange and the Stockholm Stock Exchange, and these
factors may differ between the two markets. In addition, the securities
markets have from time to time experienced significant price and volume
fluctuations that may be unrelated to the operating performance of particular
companies. The market prices of the common stock of many publicly traded
pharmaceutical or biotechnology companies have in the past been, and can in
the future be expected to be, especially volatile.
The following table sets forth the high and the low sales prices for
our common stock for the quarters indicated as reported on the American Stock
Exchange.
<TABLE>
<CAPTION>
HIGH LOW
YEAR ENDING SEPTEMBER 30, 1998:
<S> <C> <C>
First Quarter.................................................... $19-1/4 $12-1/4
Second Quarter................................................... 16-5/8 13-3/4
Third Quarter.................................................... 23 14-1/8
Fourth Quarter................................................... 20-1/2 14
YEAR ENDING SEPTEMBER 30, 1999:
First Quarter.................................................... $16-1/2 $11-5/8
Second Quarter................................................... 15-5/8 10-1/2
Third Quarter ................................................... 11-3/8 9
Fourth Quarter (through August 25, 1999)......................... 10-3/8 7-5/8
</TABLE>
7.
<PAGE>
WHERE YOU CAN GET MORE INFORMATION
We are a reporting company and file annual, quarterly and current
reports, proxy statements and other information with the SEC. You may read and
copy these reports, proxy statements and other information at the SEC's public
reference rooms in Washington, D.C., New York, NY and Chicago, IL. You can
request copies of these documents by writing to the SEC and paying a fee for the
copying cost. Please call the SEC at 1-800-SEC-0330 for more information about
the operation of the public reference rooms. Our SEC filings are also available
at the SEC's Web site at "http://www.sec.gov". In addition, you can read and
copy our SEC filings at the office of the National Association of Securities
Dealers, Inc. at 1735 K Street, Washington, D.C. 20006.
The SEC allows us to "incorporate by reference" information that we
file with them, which means that we can disclose important information to you by
referring you to those documents. Our SEC file number for the information we
have incorporated by reference is 001-14430. The information incorporated by
reference is an important part of this prospectus, and information that we file
later with the SEC will automatically update and supersede this information. We
incorporate by reference the documents listed below and any future filings we
will make with the SEC under Section 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934:
- Annual Report on Form 10-K for the year ended September 30,
1998;
- Proxy Statement on Schedule 14A dated January 13, 1999;
- Proxy Statement on Schedule 14A dated June 1, 1999;
- Quarterly Reports on Form 10-Q for the quarters ended December
31, 1998, March 31, 1999 and June 30, 1999; and
- Our registration statement on Form 8-A filed on June 28, 1996
which includes a description of our common stock.
You may request a copy of these filings at no cost, by writing or
telephoning us at the following address or telephone number:
Maxim Pharmaceuticals
8899 University Center Lane, Suite 400
San Diego, CA 92122
Attn: Secretary
(858) 453-4040
This prospectus is part of a larger registration statement we filed
with the SEC. In deciding whether to buy our common stock, you should rely only
on the information incorporated by reference or provided in this prospectus. We
have not authorized anyone else to provide you with different information. We
are not making an offer of these securities in any state where the offer is not
permitted. You should not assume that the information in this prospectus is
accurate as of any date other than the date on the front of the document
8.
<PAGE>
USE OF PROCEEDS
Maxim will not receive any of the proceeds from the sale of the shares
of common stock offered by the selling stockholders.
SELLING STOCKHOLDERS
The following table sets forth the names of each of the selling
stockholders, the number of shares of common stock beneficially owned by the
selling stockholders as of August 5, 1999 and the number of shares of common
stock being offered by each of them pursuant to this prospectus. This
information is based upon information provided by each respective selling
stockholder. Because the selling stockholders may offer all, some or none of
their respective shares of common stock, no definitive estimate can be provided
as to the number of shares or percentage of outstanding common stock that will
be held by the selling stockholders after such offering. The term "selling
stockholders" includes the stockholders listed below and their transferees,
pledgees, donees or other successors.
- To our knowledge, the persons named in the table below have
sole voting and investment power with respect to all shares of
the common stock shown as beneficially owned by them, subject
to community property laws where applicable and the
information contained in the footnotes to this table.
- Percentage ownership is based on 10,203,600 shares of common
stock outstanding as of August 5, 1999.
- The number of shares being offered reflects shares of common
stock issuable upon conversion of shares of our Series A
Convertible Preferred stock beneficially owned by such selling
stockholder. It also includes shares of common stock issuable
in connection with dividends payable on such shares, assuming
such dividends are paid in stock in lieu of cash.
Unless otherwise indicated in the footnotes below, the number of shares
beneficially owned before this offering by each selling stockholder and the
number of shares being offered consist solely of shares of common stock issuable
upon conversion of our Series A Preferred Stock. For each selling stockholder,
we have included shares issuable in connection with required dividends on the
Series A Preferred Stock assuming that each selling stockholder will elect to
take such dividends in shares of stock instead of cash. For any stockholder that
elects to take such dividends in cash, the number of shares of common stock
issuable upon conversion of such holder's Series A Preferred Stock would be
approximately 11% less than the number indicated in the table below.
None of the selling stockholders has, or within the past three years
has had, any position, office or other material relationship with Maxim
Pharmaceuticals, Inc. or any of its predecessors or affiliates.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED NUMBER OF SHARES BENEFICIALLY OWNED
BEFORE OFFERING SHARES AFTER OFFERING
BEING
SELLING STOCKHOLDER NUMBER PERCENT OFFERED NUMBER PERCENT
- ------------------------------------------------ ---------- --------- --------- ------------ -----------
<S> <C> <C> <C> <C> <C>
5:e AP Fonden
P.O. Box 1639 347,180 3.29 347,180 - -
SE-111 86 Stockholm, Sweden
The Aries Master Fund
787 Seventh Avenue, 48th Floor 79,260 * 79,260 - -
New York, NY 10019
Aries Domestic Fund, L.P.
787 Seventh Avenue, 48th Floor 35,270 * 35,270 - -
New York, NY 10019
</TABLE>
9.
<PAGE>
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED NUMBER OF SHARES BENEFICIALLY OWNED
BEFORE OFFERING SHARES AFTER OFFERING
BEING
SELLING STOCKHOLDER NUMBER PERCENT OFFERED NUMBER PERCENT
- ------------------------------------------------ ---------- --------- --------- ------------ -----------
<S> <C> <C> <C> <C> <C>
Aries Domestic Fund II, L.P.
787 Seventh Avenue, 48th Floor 1,150 * 1,150 - -
New York, NY 10019
Carnegie-Cowen Global Healthcare Fund
5 Place de la Gare 57,840 * 57,840 - -
P.O. Box 1141
L-1011 Luxembourg
Carnegie Fund - Medical Sub-Fund
5 Place de la Gare 57,840 * 57,840 - -
P.O. Box 1141
L-1011 Luxembourg
DVG Deutsche Vermogensbildungsgesellschaft mbH
Feldbergstra(beta)e 22 462,910 4.34% 462,910 - -
60323 Frankfurt, Germany
Dunross & Co. AB (1)
Vasagatan 40 136,770 1.33% 46,270 90,500 *
SE-411 37 Gothenburg, Sweden
E. Ohman J:or Fondkommission AB (2)
Kapitalforvaltning 68,380 * 13,880 54,500 *
P.O. Box 7415
SE-103 91 Stockholm, Sweden
Forenade Liv Gruppforsakringsbolag AB (3)
SE-103 72 Stockholm, Sweden 68,630 3.29% 15,030 53,600 *
Forenade Liv Kollektivavtalsforsakrings AB (4)
SE-103 72 Stockholm, Sweden 104,920 1.02% 23,120 81,800 *
Forenade Liv Omsesidigt Gruppforsakringsbolag (5)
SE-103 72 Stockholm, Sweden 196,910 1.91% 37,010 159,900 1.56%
Forsakringsbolaget SPP Omsesidigt (6)
SE-103 73 Stockholm, Sweden 606,720 5.88% 115,720 491,000 4.81%
HealthCap KB (7)
Sturegatan 34 816,157 7.66% 138,410 677,747 6.45%
SE-114 36 Stockholm, Sweden
Mikael Hellberg
Bergsstigen 103 1,700 * 1,700 - -
SE-138 33 Alta, Sweden
Charles Johnston
706 Ocean Drive 17,340 * 17,340 - -
Juno Beach, FL 33408
</TABLE>
10.
<PAGE>
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED NUMBER OF SHARES BENEFICIALLY OWNED
BEFORE OFFERING SHARES AFTER OFFERING
BEING
SELLING STOCKHOLDER NUMBER PERCENT OFFERED NUMBER PERCENT
- ------------------------------------------------ ---------- --------- --------- ------------ -----------
<S> <C> <C> <C> <C> <C>
The Kriegsman Group (8)
920 Greentree Road 232,390 2.23% 232,390 - -
Pacific Palisades, CA 90272
Alexander Lindstrom (9)
Lundagatan 36, uppg 10 21,530 * 5,530 16,000 *
SE-117 27 Stockholm, Sweden
Livforsakrings AB Skandia (10)
SE-103 50 Stockholm, Sweden 705,840 6.76% 231,440 474,400 4.65%
Carl Henrik Permert
Setterwallsvagen 6 3,450 * 3,450 - -
SE-131 36 Nacka, Sweden
Kenth Petersson
Heleneborgsgatan 20 11,090 * 11,090 - -
SE-117 32 Stockholm, Sweden
RGC International Investors, LDC (11)
Three Bala Plaza East, Suite 200 647,180 5.96% 647,180 - -
Bala Cynwyd, PA 19004
Roston Enterprises
2201 Canyonback Road 28,910 * 28,910 - -
Los Angles, CA 90049
SEB Lakemedelsfond
ST S6 98,360 * 98,360 - -
SE-106 40 Stockholm
Sweden
SEB Luxembourg
16 Boulevard Royal 17,350 * 17,350 - -
P.O. Box 487
L-2014 Luxembourg
Luxembourg
SEB Private Bank
P.O. Box 487 1,830 * 1,830 - -
L-2014 Luxembourg
Luxembourg
Skogs- och Lantarbetsgivareforbundet
P.O. Box 16006 23,120 * 23,120 - -
SE-103 21 Stockholm
Sweden
Svenska Handelsbanken S.A. Luxembourg
P.O. Box 678 52,060 * 52,060 - -
L-2016 Luxembourg
Luxembourg
</TABLE>
11.
<PAGE>
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED NUMBER OF SHARES BENEFICIALLY OWNED
BEFORE OFFERING SHARES AFTER OFFERING
BEING
SELLING STOCKHOLDER NUMBER PERCENT OFFERED NUMBER PERCENT
- ------------------------------------------------ ---------- --------- --------- ------------ -----------
<S> <C> <C> <C> <C> <C>
Unibank S.A. (12)
P.O.Box 562 53,530 * 5,530 48,000 *
L-2015 Luxembourg
Luxembourg
Wechsler & Co., Inc.
105 South Bedford Road, Suite 310 34,700 * 34,700 - -
Mount Kisco, NY 10549
Wendt Family Revocable Trust (13)
4900 West Dry Creek Road 18,340 * 17,340 1,000 *
Healdsburg, CA 95448
</TABLE>
- -------------------------
* Less than 1%
(1) Includes 90,500 shares of common stock beneficially owned by Dunross &
Co AB as of August 5, 1999.
(2) Includes 54,500 shares of common stock beneficially owned by E. Ohman
J:or Fondkommission AB as of August 5, 1999.
(3) Includes 53,600 shares of common stock beneficially owned by Forenade
Liv Gruppforsakringsbolag AB as of August 5, 1999, including warrants
to 17,000 shares of common stock, all of which are immediately
exercisable.
(4) Includes 81,800 shares of common stock beneficially owned by Forenade
Liv Kollektivavtalsforsakrings AB as of August 5, 1999, including
warrants to purchase 20,000 shares of common stock, all of which are
immediately exercisable.
(5) Includes 159,900 shares of common stock beneficially owned by Forenade
Liv Omsesidigt Gruppforsakringsbolag as of August 5, 1999, including
warrants to purchase 63,900 shares of common stock, all of which are
immediately exercisable.
(6) Includes 491,000 shares of common stock beneficially owned by
Forsakringsbolaget SPP Omsesidigt as of August 5, 1999.
(7) Includes 677,747 shares of common stock beneficially owned by Health
Cap KB as of August 5, 1999, including warrants to purchase 310,100
shares of common stock, all of which are immediately exercisable.
(8) Includes warrants to purchase 32,390 shares of common stock at an
exercise price of $9.725 per share, all of which are immediately
exercisable. Also includes warrants to purchase 200,000 shares of
common stock at an exercise price of $13.00 per share, 50% of which are
immediately exercisable, 25% of which will become exercisable on
September 5, 1999 and 25% of which will become exercisable on December
6, 1999.
(9) Includes 16,000 shares of common stock beneficially owned by Alexander
Lindstrom as of August 5, 1999, including warrants to purchase 15,000
shares of common stock, all of which are immediately exercisable.
(10) Includes 474,400 shares of common stock beneficially owned by
Livforsakrings AB Skandia as of August 5, 1999.
(11) Includes warrants to purchase 300,000 shares of common at an exercise
price of $10.50 per share, all of which are immediately exercisable.
(12) Includes 48,000 shares of common stock beneficially owned by Unibank
S.A. as of August 5, 1999.
(13) Includes warrants to purchase 1,000 shares of common stock, all of
which are immediately exercisable.
12.
<PAGE>
PLAN OF DISTRIBUTION
The shares of common stock may be sold from time to time by the selling
stockholders in one or more transactions at fixed prices, at market prices at
the time of sale, at varying prices determined at the time of sale or at
negotiated prices. The selling stockholders may offer their shares of common
stock in one or more of the following transactions:
- on any national securities exchange or quotation service at
which the common stock may be listed or quoted at the time of
sale, including the American Stock Exchange and the Stockholm
Stock Exchange,
- in the over-the-counter market,
- in private transactions,
- through options, and
- by pledge to secure debts and other obligations, or a
combination of any of the above transactions.
If required, we will distribute a supplement to this prospectus to
describe material changes in the terms of the offering.
The shares of common stock described in this prospectus may be sold
from time to time directly by the selling stockholders. Alternatively, the
selling stockholders may from time to time offer shares of common stock to or
through underwriters, broker/dealers or agents. The selling stockholders and
any underwriters, broker/dealers or agents that participate in the
distribution of the shares of common stock may be deemed to be "underwriters"
within the meaning of the Securities Act of 1933. Any profits on the resale
of shares of common stock and any compensation received by any underwriter,
broker/dealer or agent may be deemed to be underwriting discounts and
commissions under the Securities Act of 1933.
Any shares covered by this prospectus which qualify for sale
pursuant to Rule 144 under the Securities Act of 1933 may be sold under rule
144 rather than pursuant to this prospectus. The selling stockholders do not
have to sell all of the shares they own pursuant to this prospectus. The
selling stockholders may transfer, devise or gift such shares by other means
not described in this prospectus.
To comply with the securities laws of certain jurisdictions, the
common stock must be offered or sold only through registered or licensed
brokers or dealers. In addition, in certain jurisdictions, the common stock
may not be offered or sold unless they have been registered or qualified for
sale or an exemption is available and complied with.
Under the Securities Exchange Act of 1934, any person engaged in a
distribution of the common stock may not simultaneously engage in
market-making activities with respect to the common stock for nine business
days prior to the start of the distribution. In addition, each selling
stockholder and any other person participating in a distribution will be
subject to the Securities Exchange Act of 1934 which may limit the timing of
purchases and sales of common stock by the selling stockholders or any such
other person. These factors may affect the marketability of the common stock
and the ability of brokers or dealers to engage in market-making activities.
We will pay all expenses of this registration. These expenses
include the SEC's filing fees and fees under state securities or "blue sky"
laws. We estimate that our expenses in connection with this offering will be
approximately $25,000. All expenses for the issuance of a supplement to this
prospectus, when requested by selling stockholder(s), will also be paid by us.
13.
<PAGE>
LEGAL MATTERS
Cooley Godward LLP will give its opinion that the shares offered in
this prospectus have been validly issued and are fully paid and non-assessable.
EXPERTS
The financial statements of Maxim Pharmaceuticals, Inc. as of September
30, 1998 and 1997, and for each of the years in the three-year period ended
September 30, 1998, and for the period from inception (October 23, 1989) through
September 30, 1998, have been incorporated by reference herein and in the
registration statement in reliance upon the report of KPMG LLP, independent
certified public accountants, incorporated by reference herein, and upon the
authority of said firm as experts in accounting and auditing.
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
Our Bylaws provide that we will indemnify our directors and executive
officers, and may indemnify our other officers, employees and other agents, to
the fullest extent not prohibited by Delaware law. We are also empowered under
our Certificate of Incorporation and Bylaws to enter into indemnification
agreements with our directors, officers, employees and other agents and to
purchase insurance on behalf of any person whom we are required or permitted to
indemnify. Pursuant to this provision, we have entered into indemnity agreements
with each of our directors and executive officers.
14.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the fees and expenses payable by the
Company in connection with the sale of the shares of common stock being
registered. All amounts shown are estimates except for the SEC registration fee.
<TABLE>
<CAPTION>
<S> <C>
SEC Registration Fee $ 7,003
Legal Fees and expenses $ 10,000
Blue sky qualification fees and expenses $ 1,000
Accounting fees and expenses $ 3,000
Printing and engraving $ 500
Miscellaneous $ 3,497
---------
Total $ 25,000
---------
---------
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company's Bylaws provide that the Company will indemnify its
directors and executive officers and may indemnify its other officers, employees
and other agents to the fullest extent permitted by Delaware law. The Company is
also empowered under its Bylaws to enter into indemnification contracts with its
directors and officers and to purchase insurance on behalf of any person whom it
is required or permitted to indemnify. Pursuant to this provision, the Company
has entered into indemnity agreements with each of its directors and officers
and currently maintains directors and officers insurance coverage.
In addition, the Company's Certificate of Incorporation provides that
to the fullest extent permitted by Delaware law, the Company's directors will
not be liable for monetary damages for breach of the directors' fiduciary duty
of care to the Company and its stockholders. This provision in the Certificate
of Incorporation does not eliminate the duty of care, and in appropriate
circumstances equitable remedies such as an injunction or other forms of
non-monetary relief would remain available under Delaware law. Each director
will continue to be subject to liability for breach of the director's duty of
loyalty to the Company or its stockholders, for acts or omissions not in good
faith or involving intentional misconduct or knowing violations of law, for any
transaction from which the director derived an improper personal benefit, and
for unlawful payments of dividends or unlawful stock purchase or redemption.
This provision also does not affect a director's responsibilities under any
other laws, such as the federal securities laws or state or federal
environmental laws.
ITEM 16. EXHIBITS.
Exhibit
Number Description
- ------- -----------
3.1 Amended and Restated Certificate of Incorporation of
Registrant. (1)
3.2 Certificate of Amendment of Amended and Restated Certificate
of Incorporation. (13)
3.3 Certificate of Designations, Preferences and Relative,
Participating, Optional and Other Special Rights of Preferred
Stock and Qualifications, Limitations and Restrictions Thereof
of Series A Convertible Preferred Stock. (13)
3.4 Bylaws of Registrant. (1)
4.1 Reference is made to Exhibits 3.1, 3.2, 3.3 and 3.4.
4.2 Form of Common Stock Certificate. (1)
5.1 Opinion of Cooley Godward LLP. (13)
10.1 Form of Indemnification Agreement for directors and officers
of the Registrant. (1)
II-1
<PAGE>
10.2 Form of Representative's Warrant Agreement between the Company
and National Securities Corporation, as representative of the
several Underwriters (the "Representative"), including form of
Representative's Warrant Certificate. (1)
10.3 Form of Warrant Agreement between the Company, the
Representative and American Stock Transfer & Trust Company,
including form of Warrant Certificate. (1)
10.4 Option to Buy Technology and Rights Agreement, dated March 30,
1993, between the Registrant and Estero Anstalt. (1)(2)
10.5 Security Agreement, dated July 27,1993, between the Registrant
and Estero Anstalt. (1)(2)
10.6 Exclusive License Agreement, dated June 14, 1995, among the
Registrant, Jan Holmgren, M.D., Ph.D., Cecil Czerkinsky,
Duotol AB and Triotol Ltd. (1)(2)
10.7 Option and License Agreement, dated May 19, 1993, among the
Registrant, Vitec AB and SBL Vaccin AB, as amended. (1)(2)
10.8 License Agreement dated January 14, 1994, among the
Registrant, Vitec AB and SBL Vaccin, AB, as amended. (1)(2)
10.9 Agreement, dated December 2, 1995, among the Registrant,
Syntello Vaccine Development AB and Estero Anstalt. (1)(2)
10.10 Agreement, dated April 23, 1996, among the Registrant, Anders
Vahlne, M.D., Ph.D. and Syntello Vaccine Development AB.
(1)(2)
10.11 Letter Agreement, dated February 15, 1996, between the
Registrant and Burrill & Craves, Inc.(1)
10.12 Lease dated November 1, 1996 between DM Spectrum LLC, a
California limited liability company, as Landlord and the
Registrant for 3099 Science Park Road, Suite 150, San Diego,
California 92121. (3)
10.13 Stock Purchase Agreement, dated as of July 5, 1996, by and
between Dr. Anders Vahlne and the Registrant. (1)
10.14 Amended and Restated 1993 Long-Term Incentive Plan and forms
of stock option agreements. (4)
10.15 Employment Agreement dated October 1, 1998 between the
Registrant and Kurt R. Gehlsen. (10)
10.16 Employment Agreement dated October 1, 1998 between the
Registrant and Dale A. Sander. (10)
10.17 Employment Agreement dated November 9, 1998 between the
Registrant and Larry G. Stambaugh. (10)
10.18 Loan and Security Agreement between the Registrant and Silicon
Valley Bank. (5)
10.19 Financial Advisory Services Agreement between the Registrant
and Rodman & Renshaw, Inc. dated September 17, 1997.(6)
10.20 Lease dated January 13, 1998 between British Pacific
Properties Corporation, a California Corporation, as Landlord,
and the Registrant. (7)
10.21 Amendment to Loan and Security Agreement dated March 16, 1998
between the Registrant and Silicon Valley Bank. (8)
10.22 Lease dated July 2, 1998 between British Pacific Properties, a
California Corporation, as Landlord, and the Registrant. (9)
10.23 Employment Agreement dated October 1, 1998 between the
Registrant and Geoffrey B. Altman. (10)
10.24 Amendment to Loan and Security Agreement dated September 1,
1998 between the Registrant and Silicon Valley Bank. (10)
10.25 License Agreement dated November 6, 1998 among the Registrant,
Professional Pharmaceutical, Inc., Bruce A. Jack, D.D.S. and
B. Thomas White, R.PH. (11)
10.26 Series A Convertible Preferred Stock Purchase Agreement, dated
July 20, 1999, between the Registrant and certain purchasers
of Registrant's preferred stock. (13)
II-2
<PAGE>
10.27 Series A Convertible Preferred Stock Purchase Agreement, dated
July 20, 1999 between the Registrant and Alfred Berg. (13)
10.28 Secured Promissory Note dated April 7, 1999 between Larry G.
Stambaugh and the Registrant. (12)
10.29 Secured Promissory Note dated April 14, 1999 between Larry G.
Stambaugh and the Registrant. (12)
10.30 Secured Promissory Note dated April 7, 1999 between Kurt R.
Gehlsen and the Registrant. (12)
10.31 Secured Promissory Note dated April 7, 1999 between Dale A.
Sander and the Registrant. (12)
10.32 Common Stock Purchase Warrant, No.#99AR-1, to purchase 200,000
shares of the Registrant's common stock, issued to The
Kriegsman Group on March 3, 1999.
10.33 Common Stock Purchase Warrant, No.#99PA-1, to purchase 32,390
shares of the Registrant's common stock, issued to The
Kriegsman Group on July 26, 1999.
10.34 Common Stock Purchase Warrant to purchase 300,000 shares of
the Registrant's common stock issued to RGC International
Investors, LDC on July 20, 1999.
23.1 Consent of KPMG LLP, Independent Auditors.
23.2 Consent of Cooley Godward LLP. Reference is made to Exhibit
5.1.
24.1 Power of Attorney. Reference is made to page II-4.
- -------
(1) Previously filed together with Registrant's Registration Statement on
Form SB-2 (File No. 333-4854-LA) or amendments thereto and incorporated
herein by reference.
(2) Certain confidential portions deleted pursuant to Order Granting
Application Under the Securities Act of 1933 and Rule 406 thereunder
respecting confidential treatment.
(3) Previously filed together with Registrant's Annual Report on Form 10-K
(File No. 1-4430) dated September 30, 1996 and incorporated herein by
reference.
(4) Previously filed together with Registrant's Quarterly Report on Form
10-Q (File No. 1-4430) dated December 31, 1996 and incorporated herein
by reference.
(5) Previously filed together with Registrant's Quarterly Report on Form
10-Q (File No. 1-4430) dated March 31, 1997 and incorporated herein by
reference.
(6) Previously filed together with Registrant's Registration Statement on
Form S-1 (File No. 333-35895) dated September 18, 1997 and incorporated
herein by reference.
(7) Previously filed together with Registrant's Quarterly Report on Form
10-Q (File No. 1-4430) dated December 31, 1997 and incorporated herein
by reference.
(8) Previously filed together with Registrant's Quarterly Report on Form
10-Q (File No. 1-4430) dated March 31, 1998 and incorporated herein by
reference.
(9) Previously filed together with Registrant's Quarterly Report on Form
10-Q (File No. 1-4430) dated June 30, 1998 and incorporated herein by
reference.
(10) Previously filed together with the Registrant's Annual Report on Form
10-K/A (File No. 1-4430) dated September 30, 1998 and incorporated
herein by reference.
(11) Previously filed together with Registrant's Quarterly Report on Form
10-Q (File No. 1-4430) dated December 31, 1998 and incorporated herein
by reference.
(12) Previously filed together with Registrant's Quarterly Report on Form
10-Q (File No. 1-4430) dated June 30, 1999 and incorporated herein by
reference.
(13) Previously filed together with Registration Statement on Form S-3
(File No. 333-84711) dated August 6, 1999 and incorporated herein by
reference.
II-3
<PAGE>
ITEM 17. UNDERTAKINGS.
Insofar as indemnification by us for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of Maxim Pharmaceuticals, Inc. pursuant to the provisions referenced above or
otherwise, we have been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act of
1933, as amended, and is, therefore unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by us of
expenses incurred or paid by a director, officer or controlling person of Maxim
Pharmaceuticals, Inc. in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered hereunder, we will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933, as amended, and will be governed by the final adjudication of such
issue.
We hereby undertake:
(1) To file, during any period in which offers or sales are being made
pursuant to this registration statement, a post-effective amendment to this
registration statement to include any material information with respect to the
plan of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof; and
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
We hereby undertake that, for purposes of determining any liability
under the Securities Act of 1933, each filing of the registrant's annual report
pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial BONA
FIDE offering thereof.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of San Diego, State of
California, on the 30th day of August, 1999.
MAXIM PHARMACEUTICALS, INC.
/s/ DALE A. SANDER
-----------------------------------
Dale A. Sander
Vice President, Finance
Chief Financial Officer
II-5
<PAGE>
Pursuant to the requirements of the Securities Exchange Act of 1933, this
Registration Statement has been signed below by the following persons on behalf
of the Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
<S> <C> <C>
* Chairman of the Board, August 30, 1999
- -------------------------------- President and Chief Executive Officer
Larry G. Stambaugh (PRINCIPAL EXECUTIVE OFFICER)
/s/ DALE A. SANDER Vice President, Finance, August 30, 1999
- -------------------------------- Chief Financial Officer and Secretary
Dale A. Sander (PRINCIPAL FINANCIAL
AND ACCOUNTING OFFICER)
* Director August 30, 1999
- --------------------------------
Colin B. Bier, Ph.D.
* Director August 30, 1999
- --------------------------------
Gary E. Frashier
* Director August 30, 1999
- --------------------------------
Theodor H. Heinrichs
* Director August 30, 1999
- --------------------------------
Per-Olof Martensson
* Director August 30, 1999
- --------------------------------
F. Duwaine Townsen
</TABLE>
*By /s/ DALE A. SANDER
- --------------------------------
Dale A. Sander
Attorney-in-Fact
II-6
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
3.1 Amended and Restated Certificate of Incorporation of
Registrant. (1)
3.2 Certificate of Amendment of Amended and Restated Certificate
of Incorporation. (13)
3.3 Certificate of Designations, Preferences and Relative,
Participating, Optional and Other Special Rights of Preferred
Stock and Qualifications, Limitations and Restrictions Thereof
of Series A Convertible Preferred Stock. (13)
3.4 Bylaws of Registrant. (1)
4.1 Reference is made to Exhibits 3.1, 3.2, 3.3 and 3.4.
4.2 Form of Common Stock Certificate. (1)
5.1 Opinion of Cooley Godward LLP. (13)
10.1 Form of Indemnification Agreement for directors and officers
of the Registrant. (1)
10.2 Form of Representative's Warrant Agreement between the Company
and National Securities Corporation, as representative of the
several Underwriters (the "Representative"), including form of
Representative's Warrant Certificate. (1)
10.3 Form of Warrant Agreement between the Company, the
Representative and American Stock Transfer & Trust Company,
including form of Warrant Certificate. (1)
10.4 Option to Buy Technology and Rights Agreement, dated March 30,
1993, between the Registrant and Estero Anstalt. (1)(2)
10.5 Security Agreement, dated July 27,1993, between the Registrant
and Estero Anstalt. (1)(2)
10.6 Exclusive License Agreement, dated June 14, 1995, among the
Registrant, Jan Holmgren, M.D., Ph.D., Cecil Czerkinsky,
Duotol AB and Triotol Ltd. (1)(2)
10.7 Option and License Agreement, dated May 19, 1993, among the
Registrant, Vitec AB and SBL Vaccin AB, as amended. (1)(2)
10.8 License Agreement dated January 14, 1994, among the
Registrant, Vitec AB and SBL Vaccin, AB, as amended. (1)(2)
10.9 Agreement, dated December 2, 1995, among the Registrant,
Syntello Vaccine Development AB and Estero Anstalt. (1)(2)
10.10 Agreement, dated April 23, 1996, among the Registrant, Anders
Vahlne, M.D., Ph.D. and Syntello Vaccine Development AB.
(1)(2)
10.11 Letter Agreement, dated February 15, 1996, between the
Registrant and Burrill & Craves, Inc.(1)
10.12 Lease dated November 1, 1996 between DM Spectrum LLC, a
California limited liability company, as Landlord and the
Registrant for 3099 Science Park Road, Suite 150, San Diego,
California 92121. (3)
10.13 Stock Purchase Agreement, dated as of July 5, 1996, by and
between Dr. Anders Vahlne and the Registrant. (1)
10.14 Amended and Restated 1993 Long-Term Incentive Plan and forms
of stock option agreements. (4)
10.15 Employment Agreement dated October 1, 1998 between the
Registrant and Kurt R. Gehlsen. (10)
10.16 Employment Agreement dated October 1, 1998 between the
Registrant and Dale A. Sander. (10)
10.17 Employment Agreement dated November 9, 1998 between the
Registrant and Larry G. Stambaugh. (10)
10.18 Loan and Security Agreement between the Registrant and Silicon
Valley Bank. (5)
10.19 Financial Advisory Services Agreement between the Registrant
and Rodman & Renshaw, Inc. dated September 17, 1997. (6)
<PAGE>
10.20 Lease dated January 13, 1998 between British Pacific
Properties Corporation, a California Corporation, as Landlord,
and the Registrant. (7)
10.21 Amendment to Loan and Security Agreement dated March 16, 1998
between the Registrant and Silicon Valley Bank. (8)
10.22 Lease dated July 2, 1998 between British Pacific Properties, a
California Corporation, as Landlord, and the Registrant. (9)
10.23 Employment Agreement dated October 1, 1998 between the
Registrant and Geoffrey B. Altman. (10)
10.24 Amendment to Loan and Security Agreement dated September 1,
1998 between the Registrant and Silicon Valley Bank. (10)
10.25 License Agreement dated November 6, 1998 among the Registrant,
Professional Pharmaceutical, Inc., Bruce A. Jack, D.D.S. and
B. Thomas White, R.PH. (11)
10.26 Series A Convertible Preferred stock Purchase Agreement, dated
July 20, 1999, between the Registrant and certain purchasers
of Registrant's preferred stock. (13)
10.27 Series A Convertible Preferred Stock Purchase Agreement, dated
July 20, 1999, between the Registrant and Alfred Berg. (13)
10.28 Secured Promissory Note dated April 7, 1999 between Larry G.
Stambaugh and the Registrant. (12)
10.29 Secured Promissory Note dated April 14, 1999 between Larry G.
Stambaugh and the Registrant. (12)
10.30 Secured Promissory Note dated April 7, 1999 between Kurt R.
Gehlsen and the Registrant. (12)
10.31 Secured Promissory Note dated April 7, 1999 between Dale A.
Sander and the Registrant. (12)
10.32 Common Stock Purchase Warrant, No.#99AR-1, to purchase 200,000
shares of the Registrant's common stock, issued to The
Kriegsman Group on March 3, 1999.
10.33 Common Stock Purchase Warrant, No.#99PA-1, to purchase 32,390
shares of the Registrant's common stock, issued to The
Kriegsman Group on July 26, 1999.Common Stock Purchase
10.34 Warrant to purchase 300,000 shares of the Registrant's common
stock issued to RGC International Investors, LDC on July 20,
1999.
23.1 Consent of KPMG LLP, Independent Auditors.
23.2 Consent of Cooley Godward LLP. Reference is made to Exhibit
5.1.
24.1 Power of Attorney. Reference is made to page II-4.
- -------
(1) Previously filed together with Registrant's Registration Statement on
Form SB-2 (File No. 333-4854-LA) or amendments thereto and incorporated
herein by reference.
(2) Certain confidential portions deleted pursuant to Order Granting
Application Under the Securities Act of 1933 and Rule 406 thereunder
respecting confidential treatment.
(3) Previously filed together with Registrant's Annual Report on Form 10-K
(File No. 1-4430) dated September 30, 1996 and incorporated herein by
reference.
(4) Previously filed together with Registrant's Quarterly Report on Form
10-Q (File No. 1-4430) dated December 31, 1996 and incorporated herein
by reference.
(5) Previously filed together with Registrant's Quarterly Report on Form
10-Q (File No. 1-4430) dated March 31, 1997 and incorporated herein by
reference.
(6) Previously filed together with Registrant's Registration Statement on
Form S-1 (File No. 333-35895) dated September 18, 1997 and incorporated
herein by reference.
<PAGE>
(7) Previously filed together with Registrant's Quarterly Report on Form
10-Q (File No. 1-4430) dated December 31, 1997 and incorporated herein
by reference.
(8) Previously filed together with Registrant's Quarterly Report on Form
10-Q (File No. 1-4430) dated March 31, 1998 and incorporated herein by
reference.
(9) Previously filed together with Registrant's Quarterly Report on Form
10-Q (File No. 1-4430) dated June 30, 1998 and incorporated herein by
reference.
(10) Previously filed together with the Registrant's Annual Report on Form
10-K/A (File No. 1-4430) dated September 30, 1998 and incorporated
herein by reference.
(11) Previously filed together with Registrant's Quarterly Report on Form
10-Q (File No. 1-4430) dated December 31, 1998 and incorporated herein
by reference.
(12) Previously filed together with Registrant's Quarterly Report on Form
10-Q (File No. 1-4430) dated June 30, 1999 and incorporated herein by
reference.
(13) Previously filed together with Registration Statement on Form S-3
(File No. 333-84711) dated August 6, 1999 and incorporated herein by
reference.
<PAGE>
EXHIBIT 10.32
THE WARRANT REPRESENTED BY THIS CERTIFICATE AND THE SHARES AVAILABLE UPON
EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED UNLESS (I)
COVERED BY AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR (II) MAXIM PHARMACEUTICALS, INC. HAS BEEN FURNISHED AN
OPINION OF COUNSEL ACCEPTABLE TO IT TO THE EFFECT THAT NO REGISTRATION IS
LEGALLY REQUIRED FOR SUCH TRANSFER.
DATE OF ISSUANCE: MARCH 3, 1999 WARRANT NO. #99AR-1
WARRANT TO PURCHASE
200,000 SHARES
OF COMMON STOCK AS
HEREIN DESCRIBED
MAXIM PHARMACEUTICALS, INC.
COMMON STOCK PURCHASE WARRANT
Void after March 3, 2004
This is to certify that, for value received, THE KRIEGSMAN GROUP or a proper
assignee (in each case, the "Holder") is entitled to purchase, subject to the
provisions of this Warrant from Maxim Pharmaceuticals, Inc., a Delaware
corporation (the "Company"), at any time during the period from the date of
issuance set forth above (the "Commencement Date") to 5:00 p.m., California
time, on March 3, 2004 (the "Expiration Date") at which time this Warrant
shall expire and become void, TWO HUNDRED THOUSAND (200,000) shares ("Warrant
Shares") of the Company's Common Stock ("Stock"). This Warrant shall be
exercisable at $13.00 (thirteen U.S. Dollars) per share (the "Exercise
Price"). The number of shares of Stock to be received upon exercise of this
Warrant and the Exercise Price shall be adjusted from time to time as set
forth below. This Warrant also is subject to the following terms and
conditions:
1. EXERCISE OF WARRANT. Subject to the terms and conditions
hereof, this Warrant may be exercised as follows: (a) 25% of the Warrant
Shares will be exercisable upon issuance of this Warrant, and (b) an
additional 25% each of the Warrant Shares will become exercisable on June 4,
1999, September 5, 1999 and December 6, 1999 (the "Vesting Dates"), provided,
however, that no additional shares will become exercisable unless the
Services Agreement dated March 3, 1999 between the Company and The
1.
<PAGE>
Kriegsman Group is in effect during such Vesting Dates. Exercise shall be by
presentation and surrender to the Company at its principal office, or at the
office of any transfer agent for its warrants ("Transfer Agent") designated
by the Company, of (i) this Warrant and (ii) a signed cashier's check payable
to the Company in an amount equal to the product of the Exercise Price
multiplied by the number of Warrant Shares being purchased upon such
exercise. If this Warrant is exercised in part only, the Company or Transfer
Agent shall, as soon as practicable after presentation of this Warrant upon
such exercise, execute and deliver a new Warrant, dated the date hereof,
evidencing the right of the Holder to purchase the balance of the Warrant
Shares purchasable hereunder upon the same terms and conditions herein set
forth. Upon and as of receipt by the Company or Transfer Agent of such
properly completed and duly executed purchase form accompanied by payment as
herein provided, the Holder shall be deemed to be the Holder of record of the
shares of Stock issuable upon such exercise, notwithstanding that the stock
transfer books of the Company shall then be closed or that certificates
representing such shares of Stock shall not then actually be delivered to the
Holder.
2. CASHLESS EXERCISE.
2.1 In addition to the method of payment set forth in
Section 1 and in lieu of any cash payment required thereunder, the Holder of
the Warrant will have the right to exercise the vested portion of the
Warrant, in full or in part, by surrendering the Warrant certificate in the
manner specified in Section 1 in exchange for a number of shares equal to the
number of shares of Stock as to which the Warrant is being exercised,
multiplied by the quotient derived from dividing (i) the per share Market
Price (defined in Section 2.2 below), by (ii) an amount equal to the
difference between the per share Market Price and the Exercise Price.
2.2 "Market Price shall be the last reported sale price, or
in the case no such reported sales takes place on such day, the average of
the last reported sales prices for the last three (3) trading days, in either
case as reported by the principal United States exchange on which the Common
Stock is listed, on the date on which the Annex A form attached hereto is
delivered to the Company.
3. REGISTRATION RIGHTS. Upon written request from the Holder, the
Company shall use its best efforts to register for resale the shares of stock
underlying the warrant, to the extent such shares are not freely tradable.
The Company may delay such registration at the time of request until after
completion of an equity offering if requested by the underwriter or placement
agent.
4. RESERVATIONS OF SHARES. The Company shall, at all times until
the expiration of this Warrant, reserve for issuance and delivery upon
exercise of this Warrant
2.
<PAGE>
the number of Warrant Shares as shall be required for issuance and delivery
upon any unexercised portion of this Warrant.
5. FRACTIONAL SHARES. The Company shall not issue any fractional
shares nor scrip representing fractional shares upon exercise of any portion
of this Warrant.
6. NO RIGHTS AS SHAREHOLDER. This Warrant shall not entitle the
Holder to any rights as a shareholder of the Company, either at law or in
equity. The rights of the Holder are limited to those expressed in this
Warrant and are not enforceable against the Company except to the extent set
forth herein.
7. ADJUSTMENTS IN NUMBER AND EXERCISE PRICES OF WARRANT SHARES.
7.1 The number of shares of Stock for which this Warrant may
be exercised and the Exercise Price therefor shall be subject to adjustments
as follows:
(a) If the Company is recapitalized through the
subdivision or combination of its outstanding shares of Stock into a larger
or smaller number of shares, the number of shares of Stock for which this
Warrant may be exercised shall be increased or reduced, as of the record date
for such recapitalization, in the same proportion as the increase or decrease
in the outstanding shares of Stock, and the Exercise Price shall be adjusted
so that the aggregate amount payable for the purchase of all of the Warrant
Shares issuable hereunder immediately after the record date for such
recapitalization shall equal the aggregate amount so payable immediately
before such record date.
(b) If the Company declares a dividend on Stock
payable in Stock or securities convertible into Stock, the number of shares
of Stock for which this Warrant may be exercised shall be increased as of the
record date for determining which holders of Stock shall be entitled to
receive such dividend, in proportion to the increase in the number of
outstanding shares (and shares of Stock issuable upon conversion of all such
securities convertible into Stock) of Stock as a result of such dividend, and
the Exercise Price shall be adjusted so that the aggregate amount payable for
the purchase of all the Warrant Shares issuable hereunder immediately after
the record date for such dividend shall equal the aggregate amount so payable
immediately before such record date.
7.2 In the event of any reorganization or reclassification
of the outstanding shares of Stock (other than a change in par value or from
no par value to par value, or from par value to no par value, or as a result
of a subdivision or combination) or in the event of any consolidation or
merger of the Company with another entity after which the Company is not the
surviving entity, at any time prior to the expiration of this Warrant, upon
subsequent exercise of this Warrant the Holder shall have the right to
receive the same kind and number of shares of Stock and other securities,
cash or other property as would have been distributed to the Holder upon such
reorganization,
4.
<PAGE>
reclassification, consolidation or merger had the Holder exercised this
Warrant immediately prior to such reorganization, reclassification,
consolidation or merger, appropriately adjusted for any subsequent event
described in this Section 5. The Holder shall pay upon such exercise the
Exercise Price that otherwise would have been payable pursuant to the terms
of this Warrant. If any such reorganization, reclassification, consolidation
or merger results in a cash distribution in excess of the then applicable
Exercise Price, the Holder may, at the Holder's option, exercise this Warrant
without making payment of the Exercise Price, and in such case the Company
shall, upon distribution to the Holder, consider the Exercise Price to have
been paid in full, and in making settlement to the Holder, shall deduct an
amount equal to the Exercise Price from the amount payable to the Holder. In
the event of any such reorganization, merger or consolidation, the
corporation formed by such consolidation or merger or the corporation which
shall have acquired the assets of the Company shall execute and deliver a
supplement hereto to the foregoing effect, which supplement shall also
provide for adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided in this Warrant.
7.3 If the Company shall, at any time before the expiration
of this Warrant, dissolve, liquidate or wind up its affairs, the Holder shall
have the right to receive upon exercise of this Warrant, in lieu of the
shares of Stock of the Company that the Holder otherwise would have been
entitled to receive, the same kind and amount of assets as would have been
issued, distributed or paid to the Holder upon any such dissolution,
liquidation or winding up with respect to such Stock receivable upon exercise
of this Warrant on the date for determining those entitled to receive any
such distribution. If any such dissolution, liquidation or winding up
results in any cash distribution in excess of the Exercise Price provided by
this Warrant, the Holder may, at the Holder's option, exercise this Warrant
without making payment of the Exercise Price and, in such case, the Company
shall, upon distribution to the Holder, consider the Exercise Price to have
been paid in full and, in making settlement to the Holder, shall deduct an
amount equal to the Exercise Price from the amount payable to the Holder.
7.4 The Company may retain a firm of independent public
accountants of recognized standing (who may be any such firm regularly
employed by the Company) to make any computation required under this Section
5, and a certificate signed by such firm shall be conclusive evidence of the
correctness of any computation made under this Section 5.
8. INVESTMENT REPRESENTATIONS.
8.1 The Holder represents and warrants that it is acquiring
the Warrant, and upon exercise will hold the Warrant Shares, solely for its
account for investment and not with a view to or for sale or distribution of
said Warrant or Warrant Shares or any part
4.
<PAGE>
thereof. The Holder also represents that the entire legal and beneficial
interests of the Warrant and Warrant Shares the Holder is acquiring is being
acquired for, and will be held for, its account only.
8.2 The Holder understands that the Warrant has not been
registered under the Securities Act of 1933, as amended (the "Act"), on the
basis that no distribution or public offering of the stock of the Company is
to be effected. The Holder realizes that the basis for the exemption may not
be present if, notwithstanding its representations, it has in mind merely
acquiring the securities for a fixed or determinable period in the future, or
for a market rise, or for sale if the market does not rise. The Holder has
no such intention.
8.3 The Holder recognizes that the Warrant and Warrant
Shares being acquired by it must be held indefinitely unless they are
subsequently registered under the Act or an exemption from such registration
is available. The Holder recognizes that the Company has no obligation to
register the Warrant or the Warrant Shares of the Company, or to comply with
any exemption from such registration.
8.4 The Holder is aware that neither the Warrant nor Warrant
Shares may be sold pursuant to Rule 144 adopted under the Act unless certain
conditions are met and until the Holder has held the Warrant Shares for at
least two years. Among the conditions for use of the Rule is the
availability of current information to the public about the Company. The
Holder understands that the Company has not made such information available
and has no present plans to do so.
8.5 The Holder represents and warrants that it is an
"accredited investor" as such term is defined in Rule 501(a) under the
Securities Act of 1933, as amended. Specifically, the Holder represents and
warrants that it is either a corporation or partnership, not formed for the
specific purpose of acquiring securities of the Company, with total assets in
excess of $5,000,000, or an individual whose net worth exceeds $1,000,000.
9. TRANSFER, EXCHANGE, ASSIGNMENT OR LOSS OF WARRANT.
9.1 This Warrant may be transferred, in whole or in part,
subject to the following restrictions. This Warrant and the Warrant Shares
or any other securities ("Other Securities") received upon exercise of this
Warrant shall be subject to restrictions on transferability until registered
under the Act, unless an exemption from registration is available. Until
this Warrant and the Warrant Shares or Other Securities are so registered,
this Warrant and any certificate for Warrant Shares or Other Securities
issued or issuable upon exercise of this Warrant shall contain a legend on
the face thereof, in form and substance satisfactory to counsel for the
Company, stating that this Warrant, the Warrant
5.
<PAGE>
Shares or Other Securities may not be sold, transferred or otherwise disposed
of unless, in the opinion of counsel (which counsel and which opinion shall
be satisfactory to the Company), that the Warrant, the Warrant Shares or
Other Securities may be transferred without such registration.
9.2 Any transfer permitted hereunder shall be made by
surrender of this Warrant to the Company at its principal office or to the
Transfer Agent at its offices with a duly executed request to transfer the
Warrant, which shall provide adequate information to effect such transfer and
shall be accompanied by funds sufficient to pay any transfer taxes
applicable. Upon satisfaction of all transfer conditions, the Company or
Transfer Agent shall, without charge, execute and deliver a new Warrant in
the name of the transferee named in such transfer request, and this Warrant
promptly shall be canceled.
9.3 Upon receipt by the Company of evidence satisfactory to
it of loss, theft, destruction or mutilation of this Warrant and, in the case
of loss, theft or destruction, of reasonably satisfactory indemnification,
or, in the case of mutilation, upon surrender of this Warrant, the Company
will execute and deliver, or instruct the Transfer Agent to execute and
deliver, a new Warrant of like tenor and date, and any such lost, stolen or
destroyed Warrant thereupon shall become void.
9.4 Each Holder of this Warrant, the Warrant Shares and any
Other Securities shall indemnify and hold harmless the Company, its directors
and officers, and each other person, if any, who controls the Company,
against any losses, claims, damages or liabilities, joint or several, to
which the Company or any such director, officer or any such person may become
subject under the Act or any statute or common law, insofar as such losses,
claims, damages or liabilities, or actions in respect thereof, arise out of
or based upon the disposition by such Holder of the Warrant, the Warrant
Shares or Other Securities in violation of this Warrant.
9.5 The terms and conditions of this Warrant shall be
binding upon any permitted assignee and successor of the Holder. Any such
successor or assignee shall be obligated to and shall immediately execute an
instrument which provides that such party is bound under the terms of this
Warrant. Any transfer, assignment or other disposition without such
execution by the proposed transferee, assignee or successor shall be null and
void.
10. GOVERNING LAW. This Warrant shall be governed by and construed
in accordance with the laws of the State of California, as such laws are
applied to contracts entered into and wholly to be performed within the State
of California.
11. ENTIRE AGREEMENT. The undersigned Holder agrees that this
Warrant sets forth the entire understanding between the such Holder and the
Company with respect to
6.
<PAGE>
the obligation of the Company to issue additional shares of Stock to such
Holder and supersedes all prior oral and written agreements on that subject,
including any prior common stock purchase warrant issued to the Holder.
IN WITNESS WHEREOF, the Company and Holder have executed this Warrant
as of this 3rd day of March, 1999.
THE KRIEGSMAN GROUP MAXIM PHARMACEUTICALS, INC.
By: /s/ STEVEN A. KRIEGSMAN By: /s/ LARRY G. STAMBAUGH
----------------------------- ---------------------------
Larry G. Stambaugh
Chairman of the Board,
President and Chief Executive
Officer
7.
<PAGE>
ANNEX A
(To be executed upon exercise of Warrant)
The undersigned hereby irrevocably elects to exercise the right, represented
by this Warrant Certificate, to purchase __________ shares of Common Stock
and herewith tenders payment for such shares of Common Stock to the order of
Maxim Pharmaceuticals, Inc. in the amount of $____________ in accordance with
the terms hereof. The undersigned requests that a certificate for such
shares of Common Stock be registered in the name of
_______________________________________________ whose address is
_________________________________________________________
_______________________________________________________________________. If
said numbers of shares of Common Stock is less than all of the shares of
Common Stock purchasable hereunder, the undersigned requests that a new
Warrant representing the remaining balance of the shares of Common Stock be
registered in the name of and that such Warrant be delivered to
____________________________________________, whose address is
_________________________________________________________
_______________________________________________________________________.
Dated: ________________________________
Signature: ____________________________
Tax Identification Number: ____________
1.
<PAGE>
EXHIBIT 10.33
THE WARRANT REPRESENTED BY THIS CERTIFICATE AND THE SHARES AVAILABLE UPON
EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED UNLESS (I)
COVERED BY AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR (II) MAXIM PHARMACEUTICALS, INC. HAS BEEN FURNISHED AN
OPINION OF COUNSEL ACCEPTABLE TO IT TO THE EFFECT THAT NO REGISTRATION IS
LEGALLY REQUIRED FOR SUCH TRANSFER.
DATE OF ISSUANCE: JULY 26, 1999 WARRANT NO. #99PA-1
WARRANT TO PURCHASE
32,390 SHARES
OF COMMON STOCK AS
HEREIN DESCRIBED
MAXIM PHARMACEUTICALS, INC.
COMMON STOCK PURCHASE WARRANT
Void after July 26, 2004
This is to certify that, for value received, THE KRIEGSMAN GROUP or a proper
assignee (in each case, the "Holder") is entitled to purchase, subject to the
provisions of this Warrant from Maxim Pharmaceuticals, Inc., a Delaware
corporation (the "Company"), at any time during the period from the date of
issuance set forth above (the "Commencement Date") to 5:00 p.m., California
time, on July 26, 2004 (the "Expiration Date") at which time this Warrant
shall expire and become void, THIRTY TWO THOUSAND, THREE HUNDRED, NINETY
(32,390) shares ("Warrant Shares") of the Company's Common Stock ("Stock").
This Warrant shall be exercisable at $9.725 U.S. Dollars per share (the
"Exercise Price"). The number of shares of Stock to be received upon exercise
of this Warrant and the Exercise Price shall be adjusted from time to time as
set forth below. This Warrant also is subject to the following terms and
conditions:
1. EXERCISE OF WARRANT. Subject to the terms and conditions
hereof, this Warrant may be exercised in whole or in part at any time from
and after the Commencement Date and before the Expiration Date. Exercise
shall be by presentation and surrender to the Company at its principal
office, or at the office of any transfer agent for its warrants ("Transfer
Agent") designated by the Company, of (i) this Warrant and (ii) a signed
cashier's check payable to the Company in an amount equal to the product of
1.
<PAGE>
the Exercise Price multiplied by the number of Warrant Shares being purchased
upon such exercise. If this Warrant is exercised in part only, the Company
or Transfer Agent shall, as soon as practicable after presentation of this
Warrant upon such exercise, execute and deliver a new Warrant, dated the date
hereof, evidencing the right of the Holder to purchase the balance of the
Warrant Shares purchasable hereunder upon the same terms and conditions
herein set forth. Upon and as of receipt by the Company or Transfer Agent of
such properly completed and duly executed purchase form accompanied by
payment as herein provided, the Holder shall be deemed to be the Holder of
record of the shares of Stock issuable upon such exercise, notwithstanding
that the stock transfer books of the Company shall then be closed or that
certificates representing such shares of Stock shall not then actually be
delivered to the Holder.
2. CASHLESS EXERCISE.
2.1 In addition to the method of payment set forth in
Section 1 and in lieu of any cash payment required thereunder, the Holder of
the Warrant will have the right to exercise the vested portion of the
Warrant, in full or in part, by surrendering the Warrant certificate in the
manner specified in Section 1 in exchange for a number of shares equal to the
number of shares of Stock as to which the Warrant is being exercised,
multiplied by the quotient derived from dividing (i) the per share Market
Price (defined in Section 2.2 below), by (ii) an amount equal to the
difference between the per share Market Price and the Exercise Price.
2.2 "Market Price shall be the last reported sale price, or
in the case no such reported sales takes place on such day, the average of
the last reported sales prices for the last three (3) trading days, in either
case as reported by the principal United States exchange on which the Common
Stock is listed, on the date on which the Annex A form attached hereto is
delivered to the Company.
3. REGISTRATION RIGHTS. Upon written request from the Holder, the
Company shall use its best efforts to register for resale the shares of stock
underlying the warrant, to the extent such shares are not freely tradable.
The Company may delay such registration at the time of request until after
completion of an equity offering if requested by the underwriter or placement
agent.
4. RESERVATIONS OF SHARES. The Company shall, at all times until
the expiration of this Warrant, reserve for issuance and delivery upon
exercise of this Warrant the number of Warrant Shares as shall be required
for issuance and delivery upon any unexercised portion of this Warrant.
5. FRACTIONAL SHARES. The Company shall not issue any fractional
shares nor scrip representing fractional shares upon exercise of any portion
of this Warrant.
2.
<PAGE>
6. NO RIGHTS AS SHAREHOLDER. This Warrant shall not entitle the
Holder to any rights as a shareholder of the Company, either at law or in
equity. The rights of the Holder are limited to those expressed in this
Warrant and are not enforceable against the Company except to the extent set
forth herein.
7. ADJUSTMENTS IN NUMBER AND EXERCISE PRICES OF WARRANT SHARES.
7.1 The number of shares of Stock for which this Warrant may
be exercised and the Exercise Price therefor shall be subject to adjustments
as follows:
(a) If the Company is recapitalized through the
subdivision or combination of its outstanding shares of Stock into a larger
or smaller number of shares, the number of shares of Stock for which this
Warrant may be exercised shall be increased or reduced, as of the record date
for such recapitalization, in the same proportion as the increase or decrease
in the outstanding shares of Stock, and the Exercise Price shall be adjusted
so that the aggregate amount payable for the purchase of all of the Warrant
Shares issuable hereunder immediately after the record date for such
recapitalization shall equal the aggregate amount so payable immediately
before such record date.
(b) If the Company declares a dividend on Stock
payable in Stock or securities convertible into Stock, the number of shares
of Stock for which this Warrant may be exercised shall be increased as of the
record date for determining which holders of Stock shall be entitled to
receive such dividend, in proportion to the increase in the number of
outstanding shares (and shares of Stock issuable upon conversion of all such
securities convertible into Stock) of Stock as a result of such dividend, and
the Exercise Price shall be adjusted so that the aggregate amount payable for
the purchase of all the Warrant Shares issuable hereunder immediately after
the record date for such dividend shall equal the aggregate amount so payable
immediately before such record date.
7.2 In the event of any reorganization or reclassification
of the outstanding shares of Stock (other than a change in par value or from
no par value to par value, or from par value to no par value, or as a result
of a subdivision or combination) or in the event of any consolidation or
merger of the Company with another entity after which the Company is not the
surviving entity, at any time prior to the expiration of this Warrant, upon
subsequent exercise of this Warrant the Holder shall have the right to
receive the same kind and number of shares of Stock and other securities,
cash or other property as would have been distributed to the Holder upon such
reorganization, reclassification, consolidation or merger had the Holder
exercised this Warrant immediately prior to such reorganization,
reclassification, consolidation or merger, appropriately adjusted for any
subsequent event described in this Section 5. The Holder shall pay upon such
exercise the Exercise Price that otherwise would have been payable pursuant
to the terms of this Warrant. If any such reorganization, reclassification,
3.
<PAGE>
consolidation or merger results in a cash distribution in excess of the then
applicable Exercise Price, the Holder may, at the Holder's option, exercise
this Warrant without making payment of the Exercise Price, and in such case
the Company shall, upon distribution to the Holder, consider the Exercise
Price to have been paid in full, and in making settlement to the Holder,
shall deduct an amount equal to the Exercise Price from the amount payable to
the Holder. In the event of any such reorganization, merger or
consolidation, the corporation formed by such consolidation or merger or the
corporation which shall have acquired the assets of the Company shall execute
and deliver a supplement hereto to the foregoing effect, which supplement
shall also provide for adjustments which shall be as nearly equivalent as may
be practicable to the adjustments provided in this Warrant.
7.3 If the Company shall, at any time before the expiration
of this Warrant, dissolve, liquidate or wind up its affairs, the Holder shall
have the right to receive upon exercise of this Warrant, in lieu of the
shares of Stock of the Company that the Holder otherwise would have been
entitled to receive, the same kind and amount of assets as would have been
issued, distributed or paid to the Holder upon any such dissolution,
liquidation or winding up with respect to such Stock receivable upon exercise
of this Warrant on the date for determining those entitled to receive any
such distribution. If any such dissolution, liquidation or winding up
results in any cash distribution in excess of the Exercise Price provided by
this Warrant, the Holder may, at the Holder's option, exercise this Warrant
without making payment of the Exercise Price and, in such case, the Company
shall, upon distribution to the Holder, consider the Exercise Price to have
been paid in full and, in making settlement to the Holder, shall deduct an
amount equal to the Exercise Price from the amount payable to the Holder.
7.4 The Company may retain a firm of independent public
accountants of recognized standing (who may be any such firm regularly
employed by the Company) to make any computation required under this Section
5, and a certificate signed by such firm shall be conclusive evidence of the
correctness of any computation made under this Section 5.
8. INVESTMENT REPRESENTATIONS.
8.1 The Holder represents and warrants that it is acquiring
the Warrant, and upon exercise will hold the Warrant Shares, solely for its
account for investment and not with a view to or for sale or distribution of
said Warrant or Warrant Shares or any part thereof. The Holder also
represents that the entire legal and beneficial interests of the Warrant and
Warrant Shares the Holder is acquiring is being acquired for, and will be
held for, its account only.
4.
<PAGE>
8.2 The Holder understands that the Warrant has not been
registered under the Securities Act of 1933, as amended (the "Act"), on the
basis that no distribution or public offering of the stock of the Company is
to be effected. The Holder realizes that the basis for the exemption may not
be present if, notwithstanding its representations, it has in mind merely
acquiring the securities for a fixed or determinable period in the future, or
for a market rise, or for sale if the market does not rise. The Holder has
no such intention.
8.3 The Holder recognizes that the Warrant and Warrant
Shares being acquired by it must be held indefinitely unless they are
subsequently registered under the Act or an exemption from such registration
is available. The Holder recognizes that the Company has no obligation to
register the Warrant or the Warrant Shares of the Company, or to comply with
any exemption from such registration.
8.4 The Holder is aware that neither the Warrant nor Warrant
Shares may be sold pursuant to Rule 144 adopted under the Act unless certain
conditions are met and until the Holder has held the Warrant Shares for at
least two years. Among the conditions for use of the Rule is the
availability of current information to the public about the Company. The
Holder understands that the Company has not made such information available
and has no present plans to do so.
8.5 The Holder represents and warrants that it is an
"accredited investor" as such term is defined in Rule 501(a) under the
Securities Act of 1933, as amended. Specifically, the Holder represents and
warrants that it is either a corporation or partnership, not formed for the
specific purpose of acquiring securities of the Company, with total assets in
excess of $5,000,000, or an individual whose net worth exceeds $1,000,000.
9. TRANSFER, EXCHANGE, ASSIGNMENT OR LOSS OF WARRANT.
9.1 This Warrant may be transferred, in whole or in part,
subject to the following restrictions. This Warrant and the Warrant Shares
or any other securities ("Other Securities") received upon exercise of this
Warrant shall be subject to restrictions on transferability until registered
under the Act, unless an exemption from registration is available. Until
this Warrant and the Warrant Shares or Other Securities are so registered,
this Warrant and any certificate for Warrant Shares or Other Securities
issued or issuable upon exercise of this Warrant shall contain a legend on
the face thereof, in form and substance satisfactory to counsel for the
Company, stating that this Warrant, the Warrant Shares or Other Securities
may not be sold, transferred or otherwise disposed of unless, in the opinion
of counsel (which counsel and which opinion shall be satisfactory to the
Company), that the Warrant, the Warrant Shares or Other Securities may be
transferred without such registration.
5.
<PAGE>
9.2 Any transfer permitted hereunder shall be made by
surrender of this Warrant to the Company at its principal office or to the
Transfer Agent at its offices with a duly executed request to transfer the
Warrant, which shall provide adequate information to effect such transfer and
shall be accompanied by funds sufficient to pay any transfer taxes
applicable. Upon satisfaction of all transfer conditions, the Company or
Transfer Agent shall, without charge, execute and deliver a new Warrant in
the name of the transferee named in such transfer request, and this Warrant
promptly shall be canceled.
9.3 Upon receipt by the Company of evidence satisfactory to
it of loss, theft, destruction or mutilation of this Warrant and, in the case
of loss, theft or destruction, of reasonably satisfactory indemnification,
or, in the case of mutilation, upon surrender of this Warrant, the Company
will execute and deliver, or instruct the Transfer Agent to execute and
deliver, a new Warrant of like tenor and date, and any such lost, stolen or
destroyed Warrant thereupon shall become void.
9.4 Each Holder of this Warrant, the Warrant Shares and any
Other Securities shall indemnify and hold harmless the Company, its directors
and officers, and each other person, if any, who controls the Company,
against any losses, claims, damages or liabilities, joint or several, to
which the Company or any such director, officer or any such person may become
subject under the Act or any statute or common law, insofar as such losses,
claims, damages or liabilities, or actions in respect thereof, arise out of
or based upon the disposition by such Holder of the Warrant, the Warrant
Shares or Other Securities in violation of this Warrant.
9.5 The terms and conditions of this Warrant shall be
binding upon any permitted assignee and successor of the Holder. Any such
successor or assignee shall be obligated to and shall immediately execute an
instrument which provides that such party is bound under the terms of this
Warrant. Any transfer, assignment or other disposition without such
execution by the proposed transferee, assignee or successor shall be null and
void.
10. GOVERNING LAW. This Warrant shall be governed by and construed
in accordance with the laws of the State of California, as such laws are
applied to contracts entered into and wholly to be performed within the State
of California.
11. ENTIRE AGREEMENT. The undersigned Holder agrees that this
Warrant sets forth the entire understanding between the such Holder and the
Company with respect to the obligation of the Company to issue additional
shares of Stock to such Holder and supersedes all prior oral and written
agreements on that subject, including any prior common stock purchase warrant
issued to the Holder.
6.
<PAGE>
IN WITNESS WHEREOF, the Company and Holder have executed this Warrant
as of this 26th day of July, 1999.
THE KRIEGSMAN GROUP MAXIM PHARMACEUTICALS, INC.
By: /s/ STEVEN A. KRIEGSMAN By: /s/ LARRY G. STAMBAUGH
----------------------------- ---------------------------
Larry G. Stambaugh
Chairman of the Board,
President and Chief Executive
Officer
7.
<PAGE>
ANNEX A
(To be executed upon exercise of Warrant)
The undersigned hereby irrevocably elects to exercise the right, represented
by this Warrant Certificate, to purchase __________ shares of Common Stock
and herewith tenders payment for such shares of Common Stock to the order of
Maxim Pharmaceuticals, Inc. in the amount of $____________ in accordance with
the terms hereof. The undersigned requests that a certificate for such
shares of Common Stock be registered in the name of
_______________________________________________ whose address is
_________________________________________________________
_______________________________________________________________________. If
said numbers of shares of Common Stock is less than all of the shares of
Common Stock purchasable hereunder, the undersigned requests that a new
Warrant representing the remaining balance of the shares of Common Stock be
registered in the name of and that such Warrant be delivered to
____________________________________________, whose address is
_________________________________________________________
_______________________________________________________________________.
Dated: ________________________________
Signature: ____________________________
Tax Identification Number: ____________
1.
<PAGE>
EXHIBIT 10.34
THIS WARRANT AND THE SHARES ISSUABLE UPON THE EXERCISE OF THIS WARRANT
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
EXCEPT AS OTHERWISE SET FORTH HEREIN OR IN A SERIES A CONVERTIBLE
PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT DATED AS OF JULY 20,
1999, NEITHER THIS WARRANT NOR ANY OF SUCH SHARES MAY BE SOLD,
TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR SUCH SECURITIES UNDER SAID ACT OR, AN OPINION OF
COUNSEL, IN FORM, SUBSTANCE AND SCOPE, CUSTOMARY FOR OPINIONS OF
COUNSEL IN COMPARABLE TRANSACTIONS, THAT REGISTRATION IS NOT REQUIRED
UNDER SUCH ACT OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH ACT.
Right to
Purchase
300,000
Shares of
Common Stock, par value
$.001
per share
STOCK PURCHASE WARRANT
THIS CERTIFIES THAT, for value received, RGC International Investors,
LDC or its registered assigns, is entitled to purchase from Maxim
Pharmaceuticals, a Delaware corporation (the "Company"), at any time or from
time to time during the period specified in Paragraph 2 hereof, Three Hundred
Thousand (300,000) fully paid and nonassessable shares of the Company's
Common Stock, par value $ .001 per share (the "Common Stock"), at an exercise
price of $10.50 per share (the "Exercise Price"). The term "Warrant Shares,"
as used herein, refers to the shares of Common Stock purchasable hereunder.
The Warrant Shares and the Exercise Price are subject to adjustment as
provided in Paragraph 4 hereof.
This Warrant is subject to the following terms, provisions, and
conditions:
1. MANNER OF EXERCISE; ISSUANCE OF CERTIFICATES; PAYMENT FOR
SHARES. Subject to the provisions hereof, this Warrant may be exercised by
the holder hereof, in whole or in part, by the surrender of this Warrant,
together with a completed exercise agreement in the form attached hereto
<PAGE>
(the "Exercise Agreement"), to the Company during normal business hours on
any business day at the Company's principal executive offices (or such other
office or agency of the Company as it may designate by notice to the holder
hereof), and upon (i) payment to the Company in cash, by certified or
official bank check or by wire transfer for the account of the Company of the
Exercise Price for the Warrant Shares specified in the Exercise Agreement or
(ii) if the resale of the Warrant Shares by the holder is not then registered
pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "Securities Act"), delivery to the Company of a written
notice of an election to effect a "Cashless Exercise" (as defined in Section
11(c) below) for the Warrant Shares specified in the Exercise Agreement. The
Warrant Shares so purchased shall be deemed to be issued to the holder hereof
or such holder's designee, as the record owner of such shares, as of the
close of business on the date on which this Warrant shall have been
surrendered, the completed Exercise Agreement shall have been delivered, and
payment shall have been made for such shares (or an election to effect a
Cashless Exercise has been made) as set forth above. Certificates for the
Warrant Shares so purchased, representing the aggregate number of shares
specified in the Exercise Agreement, shall be delivered to the holder hereof
within a reasonable time, not exceeding two (2) business days, after this
Warrant shall have been so exercised. The certificates so delivered shall be
in such denominations as may be requested by the holder hereof and shall be
registered in the name of such holder or such other name as shall be
designated by such holder. If this Warrant shall have been exercised only in
part, then, unless thisWarrant has expired, the Company shall, at its
expense, at the time of delivery of such certificates, deliver to the holder
a new Warrant representing the number of shares with respect to which this
Warrant shall not then have been exercised.
2. PERIOD OF EXERCISE. This Warrant is exercisable at any time or
from time to time on or after the date on which this Warrant is issued and
delivered pursuant to the terms of the Securities Purchase Agreement (the
"Issued Date") and before 5:00 p.m., New York City time on the fifth (5th)
anniversary of the Issue Date (the "Exercise Period").
3. CERTAIN AGREEMENTS OF THE COMPANY. The Company hereby
covenants and agrees as follows:
(a) SHARES TO BE FULLY PAID. All Warrant Shares will, upon
issuance in accordance with the terms of this Warrant, be validly issued,
fully paid, and nonassessable and free from all taxes, liens, and charges
with respect to the issue thereof.
(b) RESERVATION OF SHARES. During the Exercise Period, the
Company shall at all times have authorized, and reserved for the purpose of
issuance upon exercise of this Warrant, a sufficient number of shares of
Common Stock to provide for the exercise of this Warrant.
(c) LISTING. The Company shall promptly secure the listing
of the shares of Common Stock issuable upon exercise of the Warrant upon each
national securities exchange or automated quotation system, if any, upon
which shares of Common Stock are then listed (subject to official notice of
issuance upon exercise of this Warrant) and shall maintain, so long as any
other
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<PAGE>
shares of Common Stock shall be so listed, such listing of all shares of
Common Stock from time to time issuable upon the exercise of this Warrant;
and the Company shall so list on each national securities exchange or
automated quotation system, as the case may be, and shall maintain such
listing of, any other shares of capital stock of the Company issuable upon
the exercise of this Warrant if and so long as any shares of the same class
shall be listed on such national securities exchange or automated quotation
system.
(d) CERTAIN ACTIONS PROHIBITED. The Company will not, by
amendment of its charter or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities, or any other
voluntary action, avoid or seek to avoid the observance or performance of any
of the terms to be observed or performed by it hereunder, but will at all
times in good faith assist in the carrying out of all the provisions of this
Warrant and in the taking of all such action as may reasonably be requested
by the holder of this Warrant in order to protect the exercise privilege of
the holder of this Warrant against dilution or other impairment, consistent
with the tenor and purpose of this Warrant. Without limiting the generality
of the foregoing, the Company (i) will not increase the par value of any
shares of Common Stock receivable upon the exercise of this Warrant above the
Exercise Price then in effect, and (ii) will take all such actions as may be
necessary or appropriate in order that the Company may validly and legally
issue fully paid and nonassessable shares of Common Stock upon the exercise
of this Warrant.
(e) SUCCESSORS AND ASSIGNS. This Warrant will be binding
upon any entity succeeding to the Company by merger, consolidation, or
acquisition of all or substantially all the Company's assets.
4. ANTIDILUTION PROVISIONS. During the Exercise Period, the
Exercise Price and the number of Warrant Shares shall be subject to
adjustment from time to time as provided in this Paragraph 4.
In the event that any adjustment of the Exercise Price as required
herein results in a fraction of a cent, such Exercise Price shall be rounded
up to the nearest cent.
(a) ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF SHARES UPON
ISSUANCE OF COMMON STOCK. Except as otherwise provided in Paragraphs 4(c)
and 4(e) hereof, if and whenever on or after the Issue Date of this Warrant,
the Company issues or sells, or in accordance with Paragraph 4(b) hereof is
deemed to have issued or sold, any shares of Common Stock for no
consideration or for a consideration per share (before deduction of
reasonable expenses or commissions or underwriting discounts or allowances in
connection therewith) less than the Market Price (as hereinafter defined) on
the date of issuance (or deemed issuance) of such Common Stock (a "Dilutive
Issuance"), then immediately upon the Dilutive Issuance, the Exercise Price
will be reduced to a price determined by multiplying the Exercise Price in
effect immediately prior to the Dilutive Issuance by a fraction, (i) the
numerator of which is an amount equal to the sum of (x) the number of shares
of Common Stock actually outstanding immediately prior to the Dilutive
Issuance, plus (y) the quotient of the aggregate consideration, calculated as
set forth in Paragraph 4(b) hereof,
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<PAGE>
received by the Company upon such Dilutive Issuance divided by the Market
Price in effect immediately prior to the Dilutive Issuance, and (ii) the
denominator of which is the total number of shares of Common Stock Deemed
Outstanding (as defined below) immediately after the Dilutive Issuance.
(b) EFFECT ON EXERCISE PRICE OF CERTAIN EVENTS. For
purposes of determining the adjusted Exercise Price under Paragraph 4(a)
hereof, the following will be applicable:
(i) ISSUANCE OF RIGHTS OR OPTIONS. If the Company in
any manner issues or grants any warrants, rights or options, whether or not
immediately exercisable, to subscribe for or to purchase Common Stock or
other securities convertible into or exchangeable for Common Stock
("Convertible Securities") (such warrants, rights and options to purchase
Common Stock or Convertible Securities are hereinafter referred to as
"Options") and the price per share for which Common Stock is issuable upon
the exercise of such Options is less than the Market Price on the date of
issuance or grant of such Options, then the maximum total number of shares of
Common Stock issuable upon the exercise of all such Options will, as of the
date of the issuance or grant of such Options, be deemed to be outstanding
and to have been issued and sold by the Company for such price per share.
For purposes of the preceding sentence, the "price per share for which Common
Stock is issuable upon the exercise of such Options" is determined by
dividing (i) the total amount, if any, received or receivable by the Company
as consideration for the issuance or granting of all such Options, plus the
minimum aggregate amount of additional consideration, if any, payable to the
Company upon the exercise of all such Options, plus, in the case of
Convertible Securities issuable upon the exercise of such Options, the
minimum aggregate amount of additional consideration payable upon the
conversion or exchange thereof at the time such Convertible Securities first
become convertible or exchangeable, by (ii) the maximum total number of
shares of Common Stock issuable upon the exercise of all such Options
(assuming full conversion of Convertible Securities, if applicable). No
further adjustment to the Exercise Price will be made upon the actual
issuance of such Common Stock upon the exercise of such Options or upon the
conversion or exchange of Convertible Securities issuable upon exercise of
such Options.
(ii) ISSUANCE OF CONVERTIBLE SECURITIES. If the
Company in any manner issues or sells any Convertible Securities, whether or
not immediately convertible (other than where the same are issuable upon the
exercise of Options) and the price per share for which Common Stock is
issuable upon such conversion or exchange is less than the Market Price on
the date of issuance of such Convertible Securities, then the maximum total
number of shares of Common Stock issuable upon the conversion or exchange of
all such Convertible Securities will, as of the date of the issuance of such
Convertible Securities, be deemed to be outstanding and to have been issued
and sold by the Company for such price per share. For the purposes of the
preceding sentence, the "price per share for which Common Stock is issuable
upon such conversion or exchange" is determined by dividing (i) the total
amount, if any, received or receivable by the Company as consideration for
the issuance or sale of all such Convertible Securities, plus the minimum
aggregate amount of additional consideration, if any, payable to the Company
upon the conversion or exchange thereof at the time such Convertible
Securities first become convertible or exchangeable, by (ii) the maximum
total
-5-
<PAGE>
number of shares of Common Stock issuable upon the conversion or exchange of
all such Convertible Securities. No further adjustment to the Exercise Price
will be made upon the actual issuance of such Common Stock upon conversion or
exchange of such Convertible Securities.
(iii) CHANGE IN OPTION PRICE OR CONVERSION RATE. If
there is a change at any time in (i) the amount of additional consideration
payable to the Company upon the exercise of any Options; (ii) the amount of
additional consideration, if any, payable to the Company upon the conversion
or exchange of any Convertible Securities; or (iii) the rate at which any
Convertible Securities are convertible into or exchangeable for Common Stock
(other than under or by reason of provisions designed to protect against
dilution), the Exercise Price in effect at the time of such change will be
readjusted to the Exercise Price which would have been in effect at such time
had such Options or Convertible Securities still outstanding provided for
such changed additional consideration or changed conversion rate, as the case
may be, at the time initially granted, issued or sold.
(iv) TREATMENT OF EXPIRED OPTIONS AND UNEXERCISED
CONVERTIBLE SECURITIES. If, in any case, the total number of shares of
Common Stock issuable upon exercise of any Option or upon conversion or
exchange of any Convertible Securities is not, in fact, issued and the rights
to exercise such Option or to convert or exchange such Convertible Securities
shall have expired or terminated, the Exercise Price then in effect will be
readjusted to the Exercise Price which would have been in effect at the time
of such expiration or termination had such Option or Convertible Securities,
to the extent outstanding immediately prior to such expiration or termination
(other than in respect of the actual number of shares of Common Stock issued
upon exercise or conversion thereof), never been issued.
(v) CALCULATION OF CONSIDERATION RECEIVED. If any
Common Stock, Options or Convertible Securities are issued, granted or sold
for cash, the consideration received therefor for purposes of this Warrant
will be the amount received by the Company therefor, before deduction of
reasonable commissions, underwriting discounts or allowances or other
reasonable expenses paid or incurred by the Company in connection with such
issuance, grant or sale. In case any Common Stock, Options or Convertible
Securities are issued or sold for a consideration part or all of which shall
be other than cash, the amount of the consideration other than cash received
by the Company will be the fair value of such consideration, except where
such consideration consists of securities, in which case the amount of
consideration received by the Company will be the Market Price thereof as of
the date of receipt. In case any Common Stock, Options or Convertible
Securities are issued in connection with any acquisition, merger or
consolidation in which the Company is the surviving corporation, the amount
of consideration therefor will be deemed to be the fair value of such portion
of the net assets and business of the non-surviving corporation as is
attributable to such Common Stock, Options or Convertible Securities, as the
case may be. The fair value of any consideration other than cash or
securities will be determined in good faith by the Board of Directors of the
Company.
-5-
<PAGE>
(vi) EXCEPTIONS TO ADJUSTMENT OF EXERCISE PRICE. No
adjustment to the Exercise Price will be made (i) upon the exercise of any
warrants, options or convertible securities granted, issued and outstanding
on the date of issuance of this Warrant; (ii) upon the grant or exercise of
any stock or options which may hereafter be granted or exercised under any
employee benefit plan of the Company now existing or to be implemented in the
future, so long as the issuance of such stock or options is approved by a
majority of the independent members of the Board of Directors of the Company
or a majority of the members of a committee of independent directors
established for such purpose; or (iii) upon the exercise of the Warrants.
(c) SUBDIVISION OR COMBINATION OF COMMON STOCK. If the
Company at any time subdivides (by any stock split, stock dividend,
recapitalization, reorganization, reclassification or otherwise) the shares
of Common Stock acquirable hereunder into a greater number of shares, then,
after the date of record for effecting such subdivision, the Exercise Price
in effect immediately prior to such subdivision will be proportionately
reduced. If the Company at any time combines (by reverse stock split,
recapitalization, reorganization, reclassification or otherwise) the shares
of Common Stock acquirable hereunder into a smaller number of shares, then,
after the date of record for effecting such combination, the Exercise Price
in effect immediately prior to such combination will be proportionately
increased.
(d) ADJUSTMENT IN NUMBER OF SHARES. Upon each adjustment of
the Exercise Price pursuant to the provisions of this Paragraph 4, the number
of shares of Common Stock issuable upon exercise of this Warrant shall be
adjusted by multiplying a number equal to the Exercise Price in effect
immediately prior to such adjustment by the number of shares of Common Stock
issuable upon exercise of this Warrant immediately prior to such adjustment
and dividing the product so obtained by the adjusted Exercise Price.
(e) CONSOLIDATION, MERGER OR SALE. In case of any
consolidation of the Company with, or merger of the Company into any other
corporation, or in case of any sale or conveyance of all or substantially all
of the assets of the Company other than in connection with a plan of complete
liquidation of the Company, then as a condition of such consolidation, merger
or sale or conveyance, adequate provision will be made whereby the holder of
this Warrant will have the right to acquire and receive upon exercise of this
Warrant in lieu of the shares of Common Stock immediately theretofore
acquirable upon the exercise of this Warrant, such shares of stock,
securities or assets as may be issued or payable with respect to or in
exchange for the number of shares of Common Stock immediately theretofore
acquirable and receivable upon exercise of this Warrant had such
consolidation, merger or sale or conveyance not taken place. In any such
case, the Company will make appropriate provision to insure that the
provisions of this Paragraph 4 hereof will thereafter be applicable as nearly
as may be in relation to any shares of stock or securities thereafter
deliverable upon the exercise of this Warrant. The Company will not effect
any consolidation, merger or sale or conveyance unless prior to the
consummation thereof, the successor or acquiring entity (if other than the
Company) and, if an entity different from the successor or acquiring entity,
the entity whose capital stock or assets the holders of the Common Stock of
the Company are entitled to receive as a result of such consolidation, merger
or sale or conveyance assumes by written
-6-
<PAGE>
instrument the obligations under this Paragraph 4 and the obligations to
deliver to the holder of this Warrant such shares of stock, securities or
assets as, in accordance with the foregoing provisions, the holder may be
entitled to acquire.
(f) DISTRIBUTION OF ASSETS. In case the Company shall
declare or make any distribution of its assets (including cash) to holders of
Common Stock as a partial liquidating dividend, by way of return of capital
or otherwise, then, after the date of record for determining stockholders
entitled to such distribution, but prior to the date of distribution, the
holder of this Warrant shall be entitled upon exercise of this Warrant for
the purchase of any or all of the shares of Common Stock subject hereto, to
receive the amount of such assets which would have been payable to the holder
had such holder been the holder of such shares of Common Stock on the record
date for the determination of stockholders entitled to such distribution.
(g) NOTICE OF ADJUSTMENT. Upon the occurrence of any event
which requires any adjustment of the Exercise Price, then, and in each such
case, the Company shall give notice thereof to the holder of this Warrant,
which notice shall state the Exercise Price resulting from such adjustment
and the increase or decrease in the number of Warrant Shares purchasable at
such price upon exercise, setting forth in reasonable detail the method of
calculation and the facts upon which such calculation is based. Such
calculation shall be certified by the chief financial officer of the Company.
(h) MINIMUM ADJUSTMENT OF EXERCISE PRICE. No adjustment of
the Exercise Price shall be made in an amount of less than 1% of the Exercise
Price in effect at the time such adjustment is otherwise required to be made,
but any such lesser adjustment shall be carried forward and shall be made at
the time and together with the next subsequent adjustment which, together
with any adjustments so carried forward, shall amount to not less than 1% of
such Exercise Price.
(i) NO FRACTIONAL SHARES. No fractional shares of Common
Stock are to be issued upon the exercise of this Warrant, but the Company
shall pay a cash adjustment in respect of any fractional share which would
otherwise be issuable in an amount equal to the same fraction of the Market
Price of a share of Common Stock on the date of such exercise.
(j) OTHER NOTICES. In case at any time:
(i) the Company shall declare any dividend upon the
Common Stock payable in shares of stock of any class or make any other
distribution (including dividends or distributions payable in cash out of
retained earnings) to the holders of the Common Stock;
(ii) the Company shall offer for subscription pro rata
to the holders of the Common Stock any additional shares of stock of any
class or other rights;
(iii) there shall be any capital reorganization of the
Company, or reclassification of the Common Stock, or consolidation or merger
of the Company with or into, or sale of all or substantially all its assets
to, another corporation or entity; or
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<PAGE>
(iv) there shall be a voluntary or involuntary
dissolution, liquidation or winding-up of the Company;
then, in each such case, the Company shall give to the holder of this Warrant
(a) notice of the date on which the books of the Company shall close or a
record shall be taken for determining the holders of Common Stock entitled to
receive any such dividend, distribution, or subscription rights or for
determining the holders of Common Stock entitled to vote in respect of any
such reorganization, reclassification, consolidation, merger, sale,
dissolution, liquidation or winding-up and (b) in the case of any such
reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation or winding-up, notice of the date (or, if not then known, a
reasonable approximation thereof by the Company) when the same shall take
place. Such notice shall also specify the date on which the holders of
Common Stock shall be entitled to receive such dividend, distribution, or
subscription rights or to exchange their Common Stock for stock or other
securities or property deliverable upon such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation, or
winding-up, as the case may be. Such notice shall be given at least 30 days
prior to the record date or the date on which the Company's books are closed
in respect thereto. Failure to give any such notice or any defect therein
shall not affect the validity of the proceedings referred to in clauses (i),
(ii), (iii) and (iv) above.
(k) CERTAIN EVENTS. If any event occurs of the type
contemplated by the adjustment provisions of this Paragraph 4 but not
expressly provided for by such provisions, the Company will give notice of
such event as provided in Paragraph 4(g) hereof, and the Company's Board of
Directors will make an appropriate adjustment in the Exercise Price and the
number of shares of Common Stock acquirable upon exercise of this Warrant so
that the rights of the Holder shall be neither enhanced nor diminished by
such event.
(l) CERTAIN DEFINITIONS.
(i) "COMMON STOCK DEEMED OUTSTANDING" shall mean the
number of shares of Common Stock actually outstanding (not including shares
of Common Stock held in the treasury of the Company), plus (x) pursuant to
Paragraph 4(b)(i) hereof, the maximum total number of shares of Common Stock
issuable upon the exercise of Options, as of the date of such issuance or
grant of such Options, if any, and (y) pursuant to Paragraph 4(b)(ii) hereof,
the maximum total number of shares of Common Stock issuable upon conversion
or exchange of Convertible Securities, as of the date of issuance of such
Convertible Securities, if any.
(ii) "MARKET PRICE," as of any date, (i) means the
average of the last reported sale prices for the shares of Common Stock on
the American Stock Exchange ("AMEX") for the five (5) trading days
immediately preceding such date as reported by Bloomberg Financial Markets or
an equivalent reliable reporting service mutually acceptable to and hereafter
designated by the holder of this Warrant and the Company ("Bloomberg"), or
(ii) if AMEX is not the principal trading market for the shares of Common
Stock, the average of the last reported sale prices on the
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principal trading market for the Common Stock during the same period as
reported by Bloomberg, or (iii) if market value cannot be calculated as of
such date on any of the foregoing bases, the Market Price shall be the fair
market value as reasonably determined in good faith by (a) the Board of
Directors of the Corporation or, at the option of a majority-in-interest of
the holders of the outstanding Warrants by (b) an independent investment bank
of nationally recognized standing in the valuation of businesses similar to
the business of the corporation. The manner of determining the Market Price
of the Common Stock set forth in the foregoing definition shall apply with
respect to any other security in respect of which a determination as to
market value must be made hereunder.
(iii) "COMMON STOCK," for purposes of this Paragraph 4,
includes the Common Stock, par value $.001 per share, and any additional
class of stock of the Company having no preference as to dividends or
distributions on liquidation, provided that the shares purchasable pursuant
to this Warrant shall include only shares of Common Stock, par value $.001
per share, in respect of which this Warrant is exercisable, or shares
resulting from any subdivision or combination of such Common Stock, or in the
case of any reorganization, reclassification, consolidation, merger, or sale
of the character referred to in Paragraph 4(e) hereof, the stock or other
securities or property provided for in such Paragraph.
5. ISSUE TAX. The issuance of certificates for Warrant Shares
upon the exercise of this Warrant shall be made without charge to the holder
of this Warrant or such shares for any issuance tax or other costs in respect
thereof, provided that the Company shall not be required to pay any tax which
may be payable in respect of any transfer involved in the issuance and
delivery of any certificate in a name other than the holder of this Warrant.
6. NO RIGHTS OR LIABILITIES AS A SHAREHOLDER. This Warrant shall
not entitle the holder hereof to any voting rights or other rights as a
shareholder of the Company. No provision of this Warrant, in the absence of
affirmative action by the holder hereof to purchase Warrant Shares, and no
mere enumeration herein of the rights or privileges of the holder hereof,
shall give rise to any liability of such holder for the Exercise Price or as
a shareholder of the Company, whether such liability is asserted by the
Company or by creditors of the Company.
7. TRANSFER, EXCHANGE, AND REPLACEMENT OF WARRANT.
(a) RESTRICTION ON TRANSFER. This Warrant and the rights
granted to the holder hereof are transferable, in whole or in part, upon
surrender of this Warrant, together with a properly executed assignment in
the form attached hereto, at the office or agency of the Company referred to
in Paragraph 7(e) below, provided, however, that any transfer or assignment
shall be subject to the conditions set forth in Paragraph 7(f) hereof and to
the applicable provisions of the Securities Purchase Agreement. Until due
presentment for registration of transfer on the books of the Company, the
Company may treat the registered holder hereof as the owner and holder hereof
for all purposes, and the Company shall not be affected by any notice to the
contrary.
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(b) WARRANT EXCHANGEABLE FOR DIFFERENT DENOMINATIONS. This
Warrant is exchangeable, upon the surrender hereof by the holder hereof at
the office or agency of the Company referred to in Paragraph 7(e) below, for
new Warrants of like tenor representing in the aggregate the right to
purchase the number of shares of Common Stock which may be purchased
hereunder, each of such new Warrants to represent the right to purchase such
number of shares as shall be designated by the holder hereof at the time of
such surrender.
(c) REPLACEMENT OF WARRANT. Upon receipt of evidence
reasonably satisfactory to the Company of the loss, theft, destruction, or
mutilation of this Warrant and, in the case of any such loss, theft, or
destruction, upon delivery of an indemnity agreement reasonably satisfactory
in form and amount to the Company, or, in the case of any such mutilation,
upon surrender and cancellation of this Warrant, the Company, at its expense,
will execute and deliver, in lieu thereof, a new Warrant of like tenor.
(d) CANCELLATION; PAYMENT OF EXPENSES. Upon the surrender
of this Warrant in connection with any transfer, exchange, or replacement as
provided in this Paragraph 7, this Warrant shall be promptly canceled by the
Company. The Company shall pay all taxes (other than securities transfer
taxes) and all other expenses (other than legal expenses, if any, incurred by
the Holder or transferees) and charges payable in connection with the
preparation, execution, and delivery of Warrants pursuant to this Paragraph 7.
(e) REGISTER. The Company shall maintain, at its principal
executive offices (or such other office or agency of the Company as it may
designate by notice to the holder hereof), a register for this Warrant, in
which the Company shall record the name and address of the person in whose
name this Warrant has been issued, as well as the name and address of each
transferee and each prior owner of this Warrant.
(f) EXERCISE OR TRANSFER WITHOUT REGISTRATION. If, at the
time of the surrender of this Warrant in connection with any exercise,
transfer, or exchange of this Warrant, this Warrant (or, in the case of any
exercise, the Warrant Shares issuable hereunder), shall not be registered
under the Securities Act and under applicable state securities or blue sky
laws, the Company may require, as a condition of allowing such exercise,
transfer, or exchange, (i) that the holder or transferee of this Warrant,
as the case may be, furnish to the Company a written opinion of counsel,
which opinion and counsel are acceptable to the Company, to the effect that
such exercise, transfer, or exchange may be made without registration under
said Act and under applicable state securities or blue sky laws, (ii) that
the holder or transferee execute and deliver to the Company an investment
letter in form and substance acceptable to the Company and (iii) that the
transferee be an "accredited investor" as defined in Rule 501(a) promulgated
under the Securities Act; provided that no such opinion, letter or status as
an "accredited investor" shall be required in connection with a transfer
pursuant to Rule 144 under the Securities Act. The first holder of this
Warrant, by taking and holding the same, represents to the Company that such
holder is acquiring this Warrant for investment and not with a view to the
distribution thereof.
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8. REGISTRATION RIGHTS. The initial holder of this Warrant (and
certain assignees thereof) is entitled to the benefit of the same
registration rights in respect of the Warrant Shares as are set forth in
Section 6 of the Securities Purchase Agreement dated July 20, 1999; PROVIDED,
HOWEVER, that the date by which the Company shall be required to file a
Registration Statement covering the Warrant Shares shall be ninety (90) days
after the Issue Date rather than thirty (30) days.
9. NOTICES. All notices, requests, and other communications
required or permitted to be given or delivered hereunder to the holder of
this Warrant shall be in writing, and shall be personally delivered, or shall
be sent by certified or registered mail or by recognized overnight mail
courier, postage prepaid and addressed, to such holder at the address shown
for such holder on the books of the Company, or at such other address as
shall have been furnished to the Company by notice from such holder. All
notices, requests, and other communications required or permitted to be given
or delivered hereunder to the Company shall be in writing, and shall be
personally delivered, or shall be sent by certified or registered mail or by
recognized overnight mail courier, postage prepaid and addressed, to the
office of the Company at 8899 University Center Lane, Suite 400, San Diego,
California 92122, Attention: Chief Executive Officer, or at such other
address as shall have been furnished to the holder of this Warrant by notice
from the Company. Any such notice, request, or other communication may be
sent by facsimile, but shall in such case be subsequently confirmed by a
writing personally delivered or sent by certified or registered mail or by
recognized overnight mail courier as provided above. All notices, requests,
and other communications shall be deemed to have been given either at the
time of the receipt thereof by the person entitled to receive such notice at
the address of such person for purposes of this Paragraph 9, or, if mailed by
registered or certified mail or with a recognized overnight mail courier upon
deposit with the United States Post Office or such overnight mail courier, if
postage is prepaid and the mailing is properly addressed, as the case may be.
10. GOVERNING LAW. THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO AGREEMENTS
MADE AND TO BE PERFORMED IN THE STATE OF DELAWARE (WITHOUT REGARD TO
PRINCIPLES OF CONFLICT OF LAWS). BOTH PARTIES IRREVOCABLY CONSENT TO THE
JURISDICTION OF THE UNITED STATES FEDERAL COURTS AND THE STATE COURTS LOCATED
IN [DELAWARE] WITH RESPECT TO ANY SUIT OR PROCEEDING BASED ON OR ARISING
UNDER THIS AGREEMENT, THE AGREEMENTS ENTERED INTO IN CONNECTION HEREWITH OR
THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY AND IRREVOCABLY AGREE THAT
ALL CLAIMS IN RESPECT OF SUCH SUIT OR PROCEEDING MAY BE DETERMINED IN SUCH
COURTS. BOTH PARTIES IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT FORUM
TO THE MAINTENANCE OF SUCH SUIT OR PROCEEDING. BOTH PARTIES FURTHER AGREE
THAT SERVICE OF PROCESS UPON A PARTY MAILED BY FIRST CLASS MAIL SHALL BE
DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON THE PARTY IN ANY
SUCH SUIT OR PROCEEDING. NOTHING HEREIN SHALL AFFECT EITHER PARTY'S RIGHT TO
SERVE
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PROCESS IN ANY OTHER MANNER PERMITTED BY LAW. BOTH PARTIES AGREE THAT A
FINAL NON-APPEALABLE JUDGMENT IN ANY SUCH SUIT OR PROCEEDING SHALL BE
CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON SUCH
JUDGMENT OR IN ANY OTHER LAWFUL MANNER.
11. MISCELLANEOUS.
(a) AMENDMENTS. This Warrant and any provision hereof may
only be amended by an instrument in writing signed by the Company and the
holder hereof.
(b) DESCRIPTIVE HEADINGS. The descriptive headings of the
several paragraphs of this Warrant are inserted for purposes of reference
only, and shall not affect the meaning or construction of any of the
provisions hereof.
(c) CASHLESS EXERCISE. Notwithstanding anything to the
contrary contained in this Warrant, if the resale of the Warrant Shares by
the holder is not then registered pursuant to an effective registration
statement under the Securities Act, this Warrant may be exercised by
presentation and surrender of this Warrant to the Company at its principal
executive offices with a written notice of the holder's intention to effect a
cashless exercise, including a calculation of the number of shares of Common
Stock to be issued upon such exercise in accordance with the terms hereof (a
"Cashless Exercise"). In the event of a Cashless Exercise, in lieu of paying
the Exercise Price in cash, the holder shall surrender this Warrant for that
number of shares of Common Stock determined by multiplying the number of
Warrant Shares to which it would otherwise be entitled by a fraction, the
numerator of which shall be the difference between the then current Market
Price per share of the Common Stock and the Exercise Price, and the
denominator of which shall be the then current Market Price per share of
Common Stock.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the Company has caused this Warrant to be signed
by its duly authorized officer.
MAXIM PHARMACEUTICALS, INC.
By: /s/ LARRY G. STAMBAUGH
---------------------------------
Name: LARRY G. STAMBAUGH
--------------------------------
Title: Chief Executive Officer
-------------------------------
Dated as of July 20, 1999
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FORM OF EXERCISE AGREEMENT
Dated: ________ __, 199_
To: Maxim Pharmaceuticals, Inc.
The undersigned, pursuant to the provisions set forth in the within
Warrant, hereby agrees to purchase ________ shares of Common Stock covered by
such Warrant, and makes payment herewith in full therefor at the price per
share provided by such Warrant in cash or by certified or official bank check
in the amount of, or, if the resale of such Common Stock by the undersigned
is not currently registered pursuant to an effective registration statement
under the Securities Act of 1933, as amended, by surrender of securities
issued by the Company (including a portion of the Warrant) having a market
value (in the case of a portion of this Warrant, determined in accordance
with Section 11(c) of the Warrant) equal to $_________. Please issue a
certificate or certificates for such shares of Common Stock in the name of
and pay any cash for any fractional share to:
Name: ___________________________________
Signature: ______________________________
Address: ______________________________
______________________________
Note: The above signature should
correspond exactly with the
name on the face of the within
Warrant.
and, if said number of shares of Common Stock shall not be all the shares
purchasable under the within Warrant, a new Warrant is to be issued in the
name of said undersigned covering the balance of the shares purchasable
thereunder less any fraction of a share paid in cash.
<PAGE>
FORM OF ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and
transfers all the rights of the undersigned under the within Warrant, with
respect to the number of shares of Common Stock covered thereby set forth
hereinbelow, to:
Name of Assignee Address No of Shares
- ---------------- --------- --------------
, and hereby irrevocably constitutes and appoints ______________
________________________ as agent and attorney-in-fact to transfer said
Warrant on the books of the within-named corporation, with full power of
substitution in the premises.
Dated: ________ __, 199_
In the presence of:
_________________________
Name: ___________________________________
Signature: ______________________________
Title of Signing Officer or Agent (if any):
Address: ______________________________
______________________________
Note: The above signature should
correspond exactly with the
name on the face of the within
Warrant.
<PAGE>
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Maxim Pharmaceuticals, Inc.:
We consent to the use of our report incorporated herein by reference and to the
reference to our firm under the heading "Experts" in the Prospectus.
KPMG LLP
San Diego, California
August 27, 1999
