<PAGE>
As filed with the Securities and Exchange Commission on May 26, 1998
Registration Number
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
PACIFIC PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)
Delaware 36-3258753
- ------------------------ ------------------------------------
(State of incorporation) (I.R.S. Employer Identification No.)
6730 Mesa Ridge Road, Suite A, San Diego, CA 92121 - (619) 550-3900
- -------------------------------------------------------------------------------
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
Pacific Pharmaceuticals, Inc. 1996 Equity Incentive Plan
and
Pacific Pharmaceuticals, Inc. Stock Option Plan for Non-Employee Directors
- -------------------------------------------------------------------------------
(Full Title of Plan)
Dr. H. Laurence Shaw
President and Chief Executive Officer
6730 Mesa Ridge Road, Suite A, San Diego, CA 92121 - (619) 550-3900
- -------------------------------------------------------------------------------
(Address, including zip code, and telephone number, including area code, of
agent for service)
With a copy to:
Edward F. Cox, Esq.
Patterson, Belknap, Webb & Tyler LLP
1133 Avenue of the Americas, New York, NY 10036 (212) 336-2030
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
Proposed Proposed
Title of Maximum Maximum Amount of
Securities to be Amount to be Offering Price Aggregate Offering Registration
Registered Registered (1) Per Share (1) Price (1) Fee (1)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common 232,000 $0.71875 $166,750 $50.53
Stock 100,000 $0.75000 75,000 22.73
Par value $.02 250,000 $0.87500 218,750 66.29
Per share 280,000 $1.06250 297,500 90.15
925,000 $1.12500 1,040,625 315.34
115,000 $1.25000 143,750 43.56
200,000 $1.56250 312,500 94.70
50,000 $1.87500 93,750 28.41
40,000 $1.93750 77,500 23.48
3,695,977 $0.62500 2,309,986 699.99
--------- ---------- ---------
Total 5,887,977 $4,736,111 $1,435.18
</TABLE>
(1) Represents 1,842,000 shares of the common stock, par value $.02 (the
"Common Stock"), of Pacific Pharmaceuticals, Inc. ("Pacific" or the
"Registrant") reserved for issuance in connection with stock options
issued under the Pacific Pharmaceuticals, Inc. 1996 Equity Incentive
Plan (the "Incentive Plan"), 350,000 shares of Common Stock reserved
for issuance in connection with stock options issued under the 1996
Stock Option Plan for Non-Employee Directors (the "Directors Plan"
and together with the Incentive Plan, the "Plans") and an additional
3,695,977 shares which are available for issuance under the Plans.
Pursuant to Rule 457(h) under the Securities Act of 1933, as amended
(the "Securities Act"), the offering price for these additional
shares is estimated for the sole purpose of computing the
registration fee. Pursuant to Securities Act Rule 457(c), the
proposed maximum offering price for these additional shares is
calculated as the average of the high and low prices, reported by the
American Stock Exchange of the Common Stock of the Registrant as of
May 20, 1998.
2
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
The documents containing information specified in Part I of
Form S-8 will be sent or given to participants in the Plans as specified
by Rule 428(b)(1) of the Securities Act. Those documents and the documents
incorporated by reference into this Registration Statement pursuant to
Item 3 of Part II of this Registration Statement, taken together,
constitute a prospectus that meets the requirements of Section 10(a) of
the Securities Act.
3
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed with the Commission by Pacific
Pharmaceuticals, Inc. ("Pacific") (File No. 1-9613) are incorporated
herein by reference and made a part hereof:
(a) Pacific's Annual Report on Form 10-K/A for the fiscal year ended
March 31, 1997;
(b) Pacific's Quarterly Report on Form 10-Q for the quarters ended
June 30, 1997, September 30, 1997 and December 31, 1997.
(c) Pacific's Reports on Form 8-K filed on June 10, 1997,
September 29,1997 and March 23, 1998.
All documents filed by Pacific pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act") subsequent to the date of this Registration Statement
and prior to the filing of a post-effective amendment which indicates that
all securities offered have been sold or which deregisters all securities
then remaining unsold, shall be deemed to be incorporated by reference in
this Registration Statement, to be part hereof from the date of filing of
such documents.
The consolidated financial statements and the related financial
statement schedules of Pacific incorporated by reference from Pacific's
Annual Report on Form 10-K/A for the fiscal year ended March 31, 1997 have
been audited by Deloitte & Touche LLP, independent auditors as stated in
their report dated May 2, 1997 (June 23, 1997 as to the first paragraph of
Note 8 and August 7, 1997 as to the second paragraph of Note 8) which report
includes an explanatory paragraph referring to the activities of the Company
and those of a developemnt stage enterprise, which is incorporated herein by
reference.
ITEM 4. DESCRIPTION OF SECURITIES.
Not Applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not Applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law provides
that a corporation may indemnify any persons, including directors and
officers, who are (or are
4
<PAGE>
threatened to be made) parties to any threatened, pending or completed legal
action, suit or proceeding (whether civil, criminal, administrative or
investigative) by reason of their being directors or officers of such
corporation. The indemnity may include expenses, attorneys' fees, judgments,
fines and amounts paid in settlement, provided such sums were actually and
reasonably incurred in connection with such action, suit or proceeding and
provided the director or officer acted in good faith and in a manner he or
she reasonably believed to be in or not opposed to the corporation's best
interests and, in the case of criminal proceedings, he or she had no
reasonable cause to believe that his or her conduct was unlawful. The
corporation may indemnify directors and officers in a derivative action (in
which suit is brought by a stockholder on behalf of the corporation) under
the same conditions, except that no indemnification is permitted without
judicial approval if the director or officer is adjudged liable to the
corporation. If the director or officer is successful on the merits or
otherwise in defense of any such actions referred to above, the corporation
must indemnify him or her against the expenses and attorneys' fees he or she
actually and reasonably incurred.
The Sixth Article of Pacific's Certificate of Incorporation, as
amended, provides for indemnification by Pacific of its officers and
directors to the full extent allowed under Section 145 of the Delaware
General Corporation Law, and reads as follows:
Sixth: A director of this Corporation shall not be personally liable to
the Corporation or any stockholder for monetary damages for breach of
fiduciary duty as a director, except that this Article Sixth shall not
eliminate or limit a director's liability (i) for any breach of the
director's duty of loyalty to the Corporation or its stockholders, (ii)
for acts or omissions not in good faith or which involve intentional
misconduct or knowing violation of law, (iii) under Section 174 of the
Delaware General Corporation Law, or (iv) for a transaction from which
the director derived an improper personal benefit.
Any repeal or modification of the foregoing provision of this Article
Sixth shall not increase the personal liability of any director of this
Corporation for any act or occurrence taking place prior to such repeal
or modification, or otherwise adversely affect any right or protection
of a director of the corporation existing at the time of such repeal or
modification.
The Corporation shall, to the fullest extent permitted by Section 145 of
the Delaware General Corporation Law, as amended from time to time,
indemnify all persons who are eligible for indemnification pursuant
thereto. The provisions of this Article Sixth shall not be deemed to
limit or preclude indemnification of a director by the Corporation for
any liability of a director which has not been eliminated by the
provisions of the Article Sixth.
5
<PAGE>
Article VIII of Pacific's Amended and Restated Bylaws provides
for indemnification by Pacific of its officers and directors to the full
extent permitted under Section 145 of the Delaware General Corporation
Law, and reads as follows:
ARTICLE VIII: INDEMNIFICATION
Section 8.1. GENERAL. (a) The Corporation shall indemnify any
person who was or is a party or is threatened to be made a party to
any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than
an action by or in the right of the Corporation) by reason of the
fact that he or she is or was a director, officer, employee or agent
of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorney's fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him or
her in connection with such action, suit or proceeding if he or she
acted in good faith and in a manner he or she reasonable believed to
be in or not opposed to the best interests of the Corporation, and,
with respect to any criminal action or proceeding, has no reasonable
cause to believe his or her conduct was unlawful. The termination of
any action, suit or proceeding by judgment, order, settlement or
conviction, or upon a plea of NOLO CONTENDERE or its equivalent,
shall not, of itself, create a presumption that such person did not
act in good faith and in a manner which he or she reasonably believed
to be in or not opposed to the best interests of the Corporation,
and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his or her conduct was unlawful.
(b) The Corporation shall indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the Corporation to
procure a judgment in its favor by reason of the fact that he or she
is or was a director, officer, employee or agent of the Corporation,
or is or was serving at the request of the Corporation as a director,
officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses (including
attorney's fees) actually and reasonably incurred by him or her in
connection with the defense or settlement of such action or suit if
he or she acted in good faith and in a manner he or she reasonably
believed to be in or not opposed to the best interests of the
Corporation and except that no indemnification shall be made in
respect of any claim, issue or matter as to which such person shall
have been adjudged to be liable to the Corporation unless and only to
the extent that the Court of Chancery of the State of Delaware or the
court in which such action or suit was brought shall determine upon
application that, despite the adjudication of liability but in view
of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnification of such expenses which such
Court of Chancery or such other court shall deem proper.
6
<PAGE>
(c) To the extent that a director, officer, employee or agent of the
Corporation has been successful on the merits or otherwise in defense
of any action, suit or proceeding referred to in paragraphs (a) and
(b) of this Section 8.1, or in defense of any claim, issue or matter
therein, he or she shall be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred by him or her in
connection therewith.
(d) Any indemnification under paragraphs (a) and (b) of this Section
8.1 (unless ordered by a court) shall be made by the Corporation only as
authorized in the specific case upon a determination that
indemnification of the director, officer, employee or agent is proper in
the circumstances because he or she has met the applicable standard of
conduct set forth in paragraphs (a) and (b) of this Section 8.1 (such
person being referred to herein as an "Indemnitee"). Such determination
shall be made (i) by the Board of Directors by a majority vote of a
quorum consisting of directors who were not parties to such action, suit
or proceeding, (ii) if such a quorum is not obtainable, or, even if
obtainable, a quorum of disinterested directors so directs, by
independent legal counsel in a written opinion or (iii) by the
stockholders.
(e) Any Indemnitee shall be entitled to control the defense of any
action, suit or proceeding against him or her which may give rise to a
right of indemnification pursuant to this Article VIII, PROVIDED,
HOWEVER, that the Corporation shall select counsel to conduct such
defense, which counsel shall be reasonably acceptable to the Indemnitee.
In the event that an Indemnitee and other parties indemnified by the
Corporation (such Indemnitee and other parties indemnified being herein
referred to collectively as the "Indemnified Parties") are made or
threatened to be made parties to the same or similar threatened, pending
or completed action, suit or proceeding, the Indemnified Parties shall
not be entitled to separate counsel unless the counsel selected by the
Corporation advises the Corporation that there exists such material
conflicts of interests among some or all of the Indemnified Parties so
as to require separate representation for some or all of the Indemnified
Parties, and such counsel advises the Corporation of the basis for such
conflict and the group of Indemnified Parties so affected. Upon receipt
of such advice of counsel, the Corporation shall select separate counsel
for such group of Indemnified Parties, which counsel shall be reasonably
acceptable to such group.
(f) Expenses (including attorneys' fees) incurred by a director or
officer in defending any civil, criminal, administrative or
investigative action, suit or proceeding shall be paid by the
Corporation in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of such
director or officer to repay such amount if it shall ultimately be
determined that he or she is not entitled to be indemnified by the
Corporation pursuant to this Article VIII. Such expenses (including
attorney's fees) incurred by other employees and agents may be so paid
upon such terms and conditions, if any, as the Board of Directors deems
appropriate.
7
<PAGE>
(g) The indemnification and advancement of expenses provided by, or
granted pursuant to, this Article VIII shall not be deemed exclusive of
any other rights to which those seeking indemnification or advancement
of expenses may be entitled under any law, bylaw, agreement, vote of
stockholders or disinterested directors or otherwise, both as to action
in an official capacity and as to action in another capacity while
holding such office.
(h) For purposes of the Article VIII, references to the "Corporation"
shall include, in addition to the resulting or surviving corporation,
any constituent corporation (including any constituent of a constituent)
absorbed in a consolidation or merger which, if its separate existence
had continued, would have had power and authority to indemnify its
directors, officers, employees or agents, so that any person who is or
was a director, officer, employee or agent of such constituent
corporation, or is or was serving at the request of such constituent
corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise,
shall stand in the same position under the provisions of this Article
VIII with respect to the resulting or surviving corporation as he or she
would have with respect to such constituent corporation if its separate
existence had continued.
(i) For purposes of this Article VIII, references to "other
enterprises" shall include employee benefit plans; references to
"fines" shall include any excise taxes assessed on a person with
respect to any employee benefit plan; and references to "serving at
the request of the Corporation" shall include any service as a
director, officer, employee or agent of the Corporation which imposes
duties on, or involves service by, such director, officer, employee
or agent with respect to an employee benefit plan, its participants
or beneficiaries; and a person who acted in good faith and in a
manner he or she reasonably believed to be in the interest of the
participants and beneficiaries of an employees benefit plan shall be
deemed to have acted in a manner "not opposed to the best interests
of the Corporation" as referred to in this Article VIII.
(j) The indemnification and advancement of expenses provided by, or
granted pursuant to, this Article VIII shall continue as to a person
who has ceased to be a director, officer, employee or agent and shall
inure to the benefit of the heirs, executors and administrators of
such person.
Section 8.2. INSURANCE. The Corporation may purchase and maintain
insurance on behalf of any person who is or was a director, officer,
employee or agent of the Corporation, or is or was serving at the
request of the Corporation as a director, officer, employee or agent
of another corporation, partnership, joint venture, trust or other
enterprise, against any liability asserted against him or her and
incurred by him or her in any such capacity, or arising out of his or
her status as such, whether or not the Corporation would have the
power to indemnify him or her
8
<PAGE>
against such liability under the provisions of Section 145 of the
General Corporation Law of the State of Delaware.
Under a policy of insurance, Pacific is entitled to be
reimbursed for indemnity payments it is required or permitted to make to
its directors and officers. In addition, Pacific's officers and directors
are covered by certain directors' and officers' liability insurance
policies maintained by Pacific.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
The documents listed hereunder are filed as exhibits hereto.
Exhibit Number Description
- -------------- -----------
5 Opinion and Consent of Patterson, Belknap, Webb &
Tyler LLP.
23.1 Consent of Patterson, Belknap, Webb & Tyler LLP (included
in Exhibit 5 hereto).
23.2 Consent of Deloitte & Touche, LLP.
ITEM 9. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of
the Securities Act;
(ii) to reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
Registration Statement; and
(iii) 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; provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii)
do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in
9
<PAGE>
periodic reports filed with or furnished to the Securities and Exchange
Commission by the registrant pursuant to Section 13 or Section 15(d) of
the Exchange Act that are incorporated by reference in the Registration
Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, 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.
(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.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in this Registration Statement shall be deemed to
be a new registration statement relating to the securities offered herein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than
the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant 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, the
registrant 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 and will be governed by the
final adjudication of such issue.
10
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and 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 May 21,1998
PACIFIC PHARMACEUTICALS, INC.
By /s/ H. LAURENCE SHAW
-------------------------------------
H. Laurence Shaw
President and Chief Executive Officer
Each person whose signature appears below constitutes and appoints
Dr. H. Laurence Shaw and James Hertzog, and each of them, his true and lawful
attorney-in-fact and agent, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all supplements, amendments (including
post-effective amendments) to this Registration Statement and any and all
other documents and instruments incidental thereto, and to file the same,
with all exhibits thereto, and all documents in connection therewith, with
the Securities and Exchange Commission and any other regulatory authority,
granting unto said attorney-in-fact and agent, or his substitute, full power
and authority to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent, or his substitute, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
OFFICERS
<S> <C> <C>
/s/ H. Laurence Shaw
- -------------------- President and May 21, 1998
H. Laurence Shaw Chief Executive Officer
(Principal Executive Officer)
/s/ James Hertzog
- ----------------- Controller May 21, 1998
James Hertzog (Principal Financial and
Accounting Officer)
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
BOARD OF DIRECTORS
<S> <C> <C>
/s/ H. Laurence Shaw
- -------------------- Chairman of the Board and May 21, 1998
H. Laurence Shaw Director
/s/ Jack H. Halperin
- -------------------- Director May 21, 1998
Jack H. Halperin
/s/ John G. Kringel
- ------------------- Director May 21, 1998
John G. Kringel
/s/ Robert A. Vukovich
- ---------------------- Director May 21, 1998
Robert A. Vukovich
/s/ Michael S. Weiss
- -------------------- Director May 21, 1998
Michael S. Weiss
</TABLE>
12
<PAGE>
INDEX TO EXHIBITS
Exhibit Number Description
- -------------- -----------
5 Opinion and Consent of Patterson, Belknap, Webb
& Tyler LLP.
23.1 Consent of Patterson, Belknap, Webb & Tyler LLP
(included in Exhibit 5 hereto).
23.2 Consent of Deloitte & Touche, LLP.
13
<PAGE>
EXHIBIT 5
[PATTERSON, BELKNAP, WEBB & TYLER LETTERHEAD]
1133 Avenue of the Americas
New York, NY 10036-6710
212-336-2000
Writer's direct line
212-336-2030
May 20, 1998
Pacific Pharmaceuticals, Inc.
6730 Mesa Ridge Road, Suite A
San Diego, California 92121
Ladies and Gentlemen:
We have acted as counsel to Pacific Pharmaceuticals, Inc., a Delaware
corporation (the "Company"), in connection with the preparation of a
registration statement on Form S-8 (the "Registration Statement") to be filed
with the Securities and Exchange Commission (the "Commission") under the
Securities Act of 1933, as amended (the "Securities Act"), relating to
5,887,977 shares of the Company's common stock (the "Registered Shares"), $.02
par value per share (the "Common Stock"), to be offered and sold under the
Company's 1996 Equity Incentive Plan and the 1996 Stock Option Plan for Non-
Employee Directors (the "Plans").
In connection with this opinion, we have examined the Registration
Statement, the Certificate of Incorporation, as amended, and Bylaws of the
Company, certain of the Company's corporate proceedings as reflected in its
minute books, and such other records as we have deemed relevant. In our
examinations, we have assumed the genuineness of all signatures, the
authenticity of all documents submitted to us as originals, and the conformity
with the originals of all documents submitted to us as copies. In addition, we
have made such other examinations of law and fact as we have deemed appropriate
in order to form a basis for the opinion hereinafter expressed.
In our opinion, the Registered Shares that may be originally issued
by the Company in connection with the Plans will, when issued in accordance
with the terms of either Plan, be duly authorized, validly issued, fully paid,
<PAGE>
and non-assessable shares of Common Stock.
We express no opinion as to laws other than the corporate laws of the
State of Delaware and the laws of the United States of America.
We hereby consent to the filing of this opinion as Exhibit 5 to the
Registration Statement. In giving such opinion and consent, we do not thereby
admit that we are acting within the category of persons whose consent is
required under Section 7 of the Securities Act or the rules and regulations of
the Commission thereunder.
PATTERSON, BELKNAP, WEBB & TYLER LLP
By: /s/ Edward F. Cox
----------------------
A Member of the Firm
<PAGE>
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement
of Pacific Pharmaceuticals, Inc. on Form S-8 of our report dated May 2, 1997
(June 23, 1997 as to the first paragraph of Note 8 and August 7, 1997 as to
the second paragraph of Note 8), which report includes an explanatory
paragraph referring to the activities of the Company as those of a
development stage enterprise, appearing in the Annual Report on Form 10-K of
Pacific Pharmaceuticals, Inc. for the year ended March 31, 1997.
/s/ DeLoitte & Touche LLP
- -------------------------
San Diego, California
May 20, 1998
