<PAGE>
As filed with the Securities and Exchange Commission on May 26, 1995
Registration No. 33-58495
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________
FORM S-3/A
AMENDMENT NO. 2
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
_______________
LIPOSOME TECHNOLOGY, INC.
(Exact name of registrant on Form S-3 as specified in its charter)
DELAWARE 7391 94-3031934
(State or Other (Primary Standard Industrial (I.R.S. Employer
Jurisdiction of Classification Code Number) Identification Number)
Incorporation)
960 Hamilton Court
Menlo Park, California 94025-1440
(415) 323-9011
(Address, including ZIP code, and telephone number, including area code, of
registrant's principal executive offices)
_______________
DONALD J. STEWART
Vice President, Finance
Liposome Technology, Inc.
960 Hamilton Court
Menlo Park, California 94025-1140
(415) 323-9011
(Name, address, including ZIP code, and telephone number, including area code,
of agent for service)
_______________
COPIES TO:
CHRISTOPHER L. KAUFMAN
Latham & Watkins
505 Montgomery Street, Suite 1900
San Francisco, California 94111-2562
(415) 391-0600
_______________
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
_______________
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 From are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
__________
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 WHICH 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>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF ANY OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED MAY 26, 1995
[LOGO] LIPOSOME TECHNOLOGY, INC.
DEBT SECURITIES
COMMON STOCK
PREFERRED STOCK
WARRANTS TO PURCHASE COMMON STOCK
____________________
Liposome Technology, Inc. (the "Company), directly or through agents,
dealers, or underwriters designated from time to time, may offer, issue and
sell, together or separately, up to $50,000,000 in the aggregate of (a) secured
or unsecured debt securities (the "Debt Securities") of the Company, which may
be either senior debt securities (the "Senior Debt Securities"), senior
subordinated debt securities (the "Senior Subordinated Debt Securities") or
subordinated debt securities (the "Subordinated Debt Securities"), (b) shares of
preferred stock of the Company, par value $0.01 per share (the "Preferred
Stock"), in one or more series, (c) shares of common stock of the Company, par
value $.0001 per share (the "Common Stock"), and (d) warrants to purchase Common
Stock (the "Warrants"), or any combination of the foregoing, either individually
or as units consisting of one or more of the foregoing, each on terms to be
determined at the time of sale. The Debt Securities may be issued as
exchangeable and/or convertible Debt Securities exchangeable for or convertible
into shares of Common Stock or Preferred Stock. The Preferred Stock may also be
exchangeable for and/or convertible into shares of Common Stock or any other
series of Preferred Stock. The Debt Securities, the Preferred Stock, the
Common Stock and the Warrants are collectively referred to herein as the
"Securities." When a particular series of Securities is offered, a supplement
to this Prospectus (each a "Prospectus Supplement") will be delivered with this
Prospectus. The Prospectus Supplement will set forth the terms of the offering
and sale of the offered securities.
Except as described more fully herein or as set forth in the Prospectus
Supplement relating to any offered Debt Securitites, the Indenture will not
provide holders of Debt Securities protection in the event of a
highly-leveraged transaction, reorganization, restructuring, merger or
similar transaction involving the Company which could adversely affect
holders of Debt Securities. See "Description of Debt Securities --
Consolidation, Merger and Sale of Assets."
The Company's Common Stock is traded over-the-counter on the Nasdaq
National Market under the symbol LTIZ. On May 9, 1995, the last reported sale
price of the Common Stock as reported by Nasdaq was $6.63 per share. The
Company has not yet determined whether any of the Debt Securities, Preferred
Stock or Warrants offered hereby will be listed on any exchange or
over-the-counter market. If the Company decides to seek listing of any such
Securities, the Prospectus Supplement relating thereto will disclose such
exchange or market.
____________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMIS-
SION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A FEDERAL OFFENSE.
____________________
The Securities may be sold directly by the Company, through agents
designated from time to time or to or through underwriters or dealers. The
Company reserves the sole right to accept, and together with its agents, from
time to time, to reject in whole or in part any proposed purchase of Securities
to be made directly or through agents. See "Plan of Distribution." If any such
agents or underwriters are involved in the sale of any Securities, the names of
such agents or underwriters and any applicable fees, commissions or discounts
will be set forth in the applicable Prospectus Supplement.
This Prospectus may not be used to consummate sales of Securities unless
accompanied by the applicable Prospectus Supplement.
The date of this Prospectus is _____________, 1995.
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IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SECURITIES AT
LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
IN CONNECTION WITH THIS OFFERING, CERTAIN UNDERWRITERS AND SELLING GROUP
MEMBERS MAY ENGAGE IN PASSIVE MARKET MAKING TRANSACTIONS IN THE COMMON STOCK ON
NASDAQ IN ACCORDANCE WITH RULE 10b-6A UNDER THE SECURITIES ACT OF 1934. SEE
"PLAN OF DISTRIBUTION."
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-3 (together with all amendments
and exhibits thereto, the "Registration Statement") under the Securities Act of
1933, as amended (the "Securities Act"), with respect to the Securities offered
hereby. This Prospectus does not contain all of the information set forth in
the Registration Statement, part of which has been omitted in accordance with
the rules and regulations of the Commission. For further information about the
Company and the Securities offered hereby, reference is made to the Registration
Statement, including the exhibits filed as a part thereof and otherwise
incorporated therein. Statements made in this Prospectus as to the contents of
any document referred to herein are not necessarily complete, and in each
instance reference is made to such document for a more complete description, and
each such statement is qualified in its entirety by such reference.
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files periodic reports, proxy statements and other information with
the Commission. The Registration Statement, including the exhibits thereto, as
well as such reports and other information filed by the Company with the
Commission, can be inspected, without charge, and copied at the public reference
facilities maintained by the Commission at 450 Fifth Street, N.W., Room 1024,
Washington D.C., 20549; 7 World Trade Center, New York, New York 10048 and 500
West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such
materials can be obtained from the Public Reference Section of the Commission at
450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. Reports
and other information concerning the Company can also be inspected at the
offices of the National Association of Securities Dealers, Inc., 1735 K Street,
N.W., Washington, D.C. 20006.
INFORMATION INCORPORATED BY REFERENCE
The following documents filed by the Company with the Commission
pursuant to the Exchange Act are incorporated by reference in this
Prospectus: (1) the Company's Annual Report on Form 10-K for the year ended
December 31, 1994, as amended by the Company's Form 10K/A-1 filed May 1, 1995,
and the Company's Form 10-K/A-2 filed May 26, 1995; (2) the Company's Quarterly
Report on Form 10-Q for the quarter ended March 31, 1995; and (3) all other
documents subsequently filed pursuant to Sections 13(a), 13(c), 14 or 15(d) of
the Exchange Act after the date of this Prospectus and before the termination
of the offering, which shall be deemed to be a part hereof from the date of
filing of such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is incorporated or deemed
to be incorporated by reference herein modifies or supersedes such statement.
Any such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
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The Company will provide without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, upon request, a copy of
any documents incorporated into this Prospectus by reference (other than
exhibits incorporated by reference into such document). Requests for documents
should be submitted to Liposome Technology, Inc., 960 Hamilton Court, Menlo
Park, California 94025, Attention: Secretary (telephone (415) 323-9011). The
information relating to the Company contained in this Prospectus does not
purport to be comprehensive and should be read together with the information
contained in the documents incorporated or deemed to be incorporated by
reference herein.
THE COMPANY
Liposome Technology, Inc. ("LTI" or the "Company") is engaged in the
development, manufacture, marketing and sale of proprietary liposome and lipid-
based pharmaceutical products to treat life-threatening illnesses, including
cancer and infectious diseases. Liposome and lipid-based drug delivery offers
the potential to improve drug effectiveness and to reduce the side effects
associated with certain injectable drugs.
Liposomes are microscopic spheres formed of thin but durable lipid
membranes which regulate the passage of an entrapped drug into the bloodstream
over a period of time. The Company's current priority products use proprietary
Stealth[REGISTERED TRADEMARK] liposomes or a colloidal dispersion of lipids to
entrap therapeutic agents.
LTI's near-term product development strategy includes: (i) obtaining
approval from the U.S. Food and Drug Administration of New Drug Applications for
its key products, Amphocil-TM-(1) and DOXIL-TM-(2), and of
Market Authorization Application dossiers from regulatory agencies in non-U.S.
markets; (ii) completing the full clinical development, registration and
expanded labeling of these products for a range of indications; (iii) exploring
additional applications for DOXIL Technology; and (iv) creating advanced
technology for future products.
Stealth[REGISTERED TRADEMARK] and DOXIL-TM- are
trademarks of the Company and are used throughout this Prospectus to
describe, respectively, the Company's proprietary long-circulating liposomes and
Stealth liposome doxorubicin product. The Company has filed for registration of
the Amphocil-TM- tradename used throughout this Prospectus to describe the
Company's proprietary amphotericin B product.
The Company was founded in 1981 and was reincorporated in Delaware in 1987.
Its principal offices are located at 960 Hamilton Court, Menlo Park, California
94025, and its telephone number is (415) 323-9011.
RISK FACTORS
In addition to the other information in this Prospectus, prospective
purchasers of the Securities offered hereby should carefully consider the risk
factors set forth under the heading "Risk Factors" in "Management's Discussion
and Analysis of Financial Condition, Results of Operations and Risk Factors"
included in the Company's most recently incorporated Annual Report on Form 10-K
or Quarterly Report on Form 10-Q.
______________________________
(1) Also called Amphotec-TM- and ABCD[REGISTERED TRADEMARK].
(2) Also called DOX-SL [REGISTERED TRADEMARK] and S-Dox.
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USE OF PROCEEDS
The Company currently has no specific plans for the use of the net proceeds
from the sale of Securities offered hereby. However, the Company currently
anticipates that any such net proceeds would be used for general corporate
purposes, which may include funding clinical, regulatory, marketing and sales
activities with respect to Amphocil and DOXIL, and research and development of
new products. When a particular series of Securities is offered, the
Prospectus Supplement relating thereto will set forth the Company's intended
use for the net proceeds received from the sale of such Securities.
Allocation of the net proceeds and the timing of expenditures will vary
depending on numerous factors, including the progress of the Company's research
and development efforts, the results of clinical trials, the timing of
regulatory approvals and the level of product sales. Pending their application,
the net proceeds will be invested in investment grade, short-term, interest-
bearing securities and deposit accounts.
Companies in the pharmaceutical and biotechnology industries generally
expend significant capital resources in product research and development and
commercialization. The Company believes that its existing cash balances and
interest income earned thereon together with revenues from sales will be
adequate to fund LTI's planned activities through the fourth quarter of 1995.
The Company will need additional financing to support the continuing development
and commercialization of its products, but no assurance can be given that
adequate financing will be available on satisfactory terms, if at all. Such
capital may be raised through the sale of the Securities offered hereby,
additional securities offerings, borrowing, product sales and other available
sources.
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DILUTION
The net tangible book value of the Company at December 31, 1994, was
approximately $10,629,000, or $0.56 per share of Common Stock. "Net tangible
book value" per share represents the amount of total tangible assets of the
Company reduced by the amount of its total liabilities and divided by the number
of shares of Common Stock outstanding. Assuming the Company issues an aggregate
of $50,000,000 of Common Stock at an assumed public offering price of $6.63 per
share (the last reported sale price of the Common Stock on the Nasdaq National
Market on May 9, 1995), with estimated net proceeds to the Company (after
assumed commissions and expenses) of $46,800,000, the pro forma net tangible
book value of the Company at December 31, 1994, would have been $57,429,000 or
$2.16 per share. This represents an immediate increase in net tangible book
value of $1.60 per share to existing stockholders and an immediate dilution of
$4.47 per share to new investors purchasing Common Stock in such offering, as
illustrated in the following table:
<TABLE>
<S> <C> <C>
Assumed public offering price per share of Common Stock(1)......
$6.63
Net tangible book value per share before this offering $0.56
Increase attributable to new investors................ 1.60
Pro forma net tangible book value per share of Common Stock after --------
this offering................................................. 2.16
--------
Dilution to new investors....................................... $4.47
--------
--------
______________________
<FN>
(1) The Company assumed an offering price of $6.63 per share based on the last
reported sale price of the Common Stock on the Nasdaq National Market on
May 9, 1995. The assumed offering price of the Common Stock at the time
any Common Stock is offered hereby may differ significantly from the
offering price assumed for purposes of this Prospectus.
</TABLE>
The above table does not give effect to the sale by the Company in March
and April 1995 of an aggregate of 480,000 shares of Series A Convertible Reset
Preferred Stock. See Description of Preferred Stock -- Outstanding Preferred
Stock."
If the Securities offered hereby are Common Stock, the Prospectus
Supplement relating thereto will include a revised dilution table setting forth
any increase in net tangible book value to existing stockholders and any
dilution to new investors based on the proposed number of shares of Common Stock
to be offered and the assumed public offering price at the time of such
offering.
RATIOS OF EARNINGS TO FIXED CHARGES AND EARNINGS TO
COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
For the fiscal years ended December 31, 1990, 1991, 1992, 1993 and 1994,
earnings were insufficient to cover fixed charges by $7,471,000, $8,213,000,
$15,393,000, $19,654,000 and $29,185,000, respectively. There was no preferred
stock of the Company issued or outstanding during any of the years in the five
year period ended December 31, 1994. For these reasons, no ratios are provided.
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GENERAL DESCRIPTION OF SECURITIES
The Company directly or through agents, dealers, or underwriters
designated from time to time, may offer, issue and sell, together or
separately, up to $50,000,000 in the aggregate of (a) secured or unsecured
debt securities (the "Debt Securities") of the Company, which may be either
senior debt securities (the "Senior Debt Securities"), senior subordinated
debt securities (the "Senior Subordinated Debt Securities") or subordinated
debt securities (the "Subordinated Debt Securities"), (b) shares of preferred
stock of the Company, par value $0.01 per share (the "Preferred Stock"), in
one or more series, (c) shares of common stock of the Company, par value
$0.0001 per share (the "Common Stock"), and (d) warrants to purchase Common
Stock (the "Warrants"), or any combination of the foregoing, either
individually or as units consisting of one or more of the foregoing, each on
terms to be determined at the time of sale. The Debt Securities may be issued
as exchangeable and/or convertible Debt Securities exchangeable for or
convertible into shares of Common Stock or Preferred Stock. The Preferred
Stock may also be exchangeable for and/or convertible into shares of Common
Stock or another series of Preferred Stock. The Debt Securities, the
Preferred Stock, the Common Stock and the Warrants are collectively referred
to herein as the "Securities." When a particular series of Securities is
offered, a supplement to this Prospectus (each a "Prospectus Supplement")
will be delivered with this Prospectus. The Prospectus Supplement will set
forth the terms of the offering and sale of the offered Securities.
DESCRIPTION OF DEBT SECURITIES
The following description sets forth certain general terms and provisions
of the Debt Securities to which any Prospectus Supplement may relate. The
particular terms of the Debt Securities offered by any Prospectus Supplement and
the extent, if any, to which such general provisions do not apply to the Debt
Securities so offered will be described in the Prospectus Supplement relating to
such Debt Securities.
Debt Securities may be issued from time to time in series under an
indenture, and one or more indentures supplemental thereto (collectively, the
"Indenture"), between the Company and a trustee to be identified in the
applicable Prospectus Supplement (the "Trustee"). The terms of the Debt
Securities will include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939 (the "TIA") as in
effect on the date of the Indenture. The Debt Securities will be subject to all
such terms, and potential investors of the Debt Securities are referred to the
Indenture and the TIA for a statement thereof. The following summary of certain
provisions of the Indenture does not purport to be complete and is qualified in
its entirety by reference to the Indenture, including the definitions therein of
certain terms used below. A copy of the proposed form of Indenture has been
filed as an exhibit to the Registration Statement of which this Prospectus is a
part. As used under this caption, unless the context otherwise requires,
Offered Debt Securities shall mean the Debt Securities offered by this
Prospectus and the accompanying Prospectus Supplement.
GENERAL
The Indenture will provide for the issuance of Debt Securities in series
and will not limit the principal amount of Debt Securities which may be issued
thereunder. In addition, except as may be provided in the Prospectus
Supplement relating to such Debt Securities, the Indenture will not limit the
amount of additional indebtedness the Company may incur.
The applicable Prospectus Supplement or Prospectus Supplements will
describe the following terms of the series of Offered Debt Securities in respect
of which this Prospectus is being delivered: (1) the title of the Offered Debt
Securities; (2) whether the Offered Debt Securities are Senior Debt Securities,
Senior Subordinated Debt Securities or Subordinated Debt Securities or any
combination thereof; (3) any limit upon the aggregate principal amount of the
Offered Debt Securities; (4) the date or dates on which the principal of the
Offered Debt Securities is payable; (5) the rate or rates at which the Offered
Debt Securities will bear interest, if any, or the manner in which such rate or
rates are determined; (6) the date or dates from which any such interest will
accrue, the interest payment dates on which any such interest on the Offered
Debt Securities will be payable and the record dates for the
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determination of holders to whom interest is payable; (7) the place or places
where the principal of and any interest on the Offered Debt Securities will be
payable; (8) the obligation of the Company, if any, to redeem, purchase or repay
the Offered Debt Securities in whole or in part pursuant to any sinking fund or
analogous provisions or at the option of the holders and the price or prices at
which and the period and periods within which and the terms and conditions upon
which the Offered Debt Securities shall be redeemed, purchased or repaid
pursuant to such obligation; (9) the denominations in which any Offered Debt
Securities will be issuable, if other than denominations of U.S. $1,000 and any
integral multiple thereof; (10) if other than the principal amount thereof, the
portion of the principal amount of the Offered Debt Securities of the series
which will be payable upon declaration of the acceleration of the maturity
thereof; (11) any addition to or change in the covenants which apply to the
Offered Debt Securities; (12) any Events of Default with respect to the Offered
Debt Securities, if not otherwise set forth under "Events of Default"; (13)
whether the Offered Debt Securities will be issued in whole or in part in global
form; the terms and conditions, if any, upon which such global Offered Debt
Securities may be exchanged in whole or in part for other individual securities,
and the depositary for the Offered Debt Securities; (14) the terms and
conditions, if any, upon which the Offered Debt Securities shall be exchanged
for or converted into other securities or property; (15) the nature and terms of
the security for any secured Offered Debt Securities; and (16) any other terms
of the Offered Debt Securities which terms shall not be inconsistent with the
provisions of the Indenture.
Debt Securities may be issued at a discount from their principal amount
("Original Issue Discount Securities"). Federal income tax considerations and
other special considerations applicable to any such Original Issue Discount
Securities will be described in the applicable Prospectus Supplement.
Debt Securities may be issued in bearer form, with or without coupons.
Federal income tax considerations and other special considerations applicable to
bearer securities will be described in the applicable Prospectus Supplement.
Unless otherwise indicated in this Prospectus or a Prospectus Supplement,
the Debt Securities will not have the benefit of any covenants that limit or
restrict the Company's business or operations, the pledging of the Company's
assets or the incurrence of indebtedness by the Company.
STATUS OF DEBT SECURITIES
The Senior Debt Securities will be unsubordinated obligations of the
Company and shall be senior in rank to all such other Debt (as defined below)
of the Company hereafter incurred to the extent the terms of such Debt
expressly provide that the Debt is subordinate to the Senior Debt Securities.
The Senior Debt Securities will rank on a parity with all other unsecured and
unsubordinated indebtedness of the Company.
The obligations of the Company pursuant to Senior Subordinated Debt
Securities will be subordinate in right of payment, to the extent and in the
manner set forth in the Indenture, to all Senior Indebtedness of the Company.
Except to the extent set forth in the Prospectus Supplement, "Senior
Indebtedness" of the Company is defined to mean the principal of, and premium,
if any, and any interest (including interest accruing subsequent to the
commencement of any proceeding for the bankruptcy or reorganization of the
Company under any applicable bankruptcy, insolvency or similar law now or
hereafter in effect) on (a) all indebtedness of the Company whether heretofore
or hereafter incurred (i) for borrowed money or (ii) in connection with the
acquisition by the Company or a subsidiary of assets other than in the ordinary
course of business, for the payment of which the Company is liable directly or
indirectly by guarantee, letter of credit, obligation to purchase or acquire or
otherwise, or the payment of which is secured by a lien, charge or encumbrance
on assets acquired by the Company, (b) amendments, modifications, renewals,
extensions and deferrals of any such indebtedness, and (c) any indebtedness
issued in exchange for any such indebtedness (clauses (a) through (c) hereof
being collectively referred to herein as "Debt"); provided, however, that the
following will not constitute Senior Indebtedness with respect to Senior
Subordinated Debt Securities: (1) any Debt as to which, in the instrument
evidencing such Debt or pursuant to which such Debt was issued, it is expressly
provided that such Debt is subordinate in right of payment to all Debt of the
Company not expressly subordinated to such Debt; (2) any Debt which by its terms
refers explicitly to the Senior Subordinated Debt Securities and states that
such Debt shall not be senior in right of payment; and (3) any Debt of the
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Company in respect of the Senior Subordinated Debt Securities or any
Subordinated Debt Securities. The Company will not issue Debt which is
subordinated in right of payment to any other Debt of the Company and which is
not expressly made pari passu with, or subordinate and junior in right of
payment to, the Senior Subordinated Debt Securities.
The obligations of the Company pursuant to Subordinated Debt Securities
will be subordinate in right of payment to all Senior Indebtedness of the
Company and to any Senior Subordinated Debt Securities; provided, however, that
the following will not constitute Senior Indebtedness with respect to
Subordinated Debt Securities: (1) any Debt as to which, in the instrument
evidencing such Debt or pursuant to which such Debt was issued, it is expressly
provided that such Debt is subordinate in right of payment to all Debt of the
Company not expressly subordinated to such Debt; and (2) any Debt of the Company
in respect of Subordinated Debt Securities and any Debt which by its terms
refers explicitly to the Subordinated Debt Securities and states that such Debt
shall not be senior in right of payment.
No payment pursuant to the Senior Subordinated Debt Securities or the
Subordinated Debt Securities, as the case may be, may be made unless all amounts
of principal, premium, if any, and interest then due on all applicable Senior
Indebtedness of the Company shall have been paid in full or if there shall have
occurred and be continuing beyond any applicable grace period a default in any
payment with respect to any such Senior Indebtedness, or if there shall have
occurred any event of default with respect to any such Senior Indebtedness
permitting the holders thereof to accelerate the maturity thereof, or if any
judicial proceeding shall be pending with respect to any such default. However,
the Company may make payments pursuant to the Senior Subordinated Debt
Securities or the Subordinated Debt Securities, as the case may be, if a default
in payment or an event of default with respect to the Senior Indebtedness
permitting the holder thereof to accelerate the maturity thereof has occurred
and is continuing and judicial proceedings with respect thereto have not been
commenced within a certain number of days of such default in payment or event of
default. Upon any distribution of the assets of the Company upon dissolution,
winding-up, liquidation or reorganization, the holders of Senior Indebtedness of
the Company will be entitled to receive payment in full of principal, premium,
if any, and interest (including interest accruing subsequent to the commencement
of any proceeding for the bankruptcy or reorganization of the Company under any
applicable bankruptcy, insolvency or similar law now or hereafter in effect)
before any payment is made on the Senior Subordinated Debt Securities or
Subordinated Debt Securities, as applicable. By reason of such subordination,
in the event of insolvency of the Company, holders of Senior Indebtedness of the
Company may receive more, ratably, and holders of the Senior Subordinated Debt
Securities or Subordinated Debt Securities, as applicable, having a claim
pursuant to the Senior Subordinated Debt Securities or Subordinated Debt
Securities, as applicable, may receive less, ratably, than the other creditors
of the Company. Such subordination will not prevent the occurrence of any Event
of Default in respect of the Senior Subordinated Debt Securities or the
Subordinated Debt Securities.
CONVERSION RIGHTS
The terms, if any, on which Debt Securities of a series may be exchanged
for or converted into shares of Common Stock or Preferred Stock will be set
forth in the Prospectus Supplement relating thereto.
EXCHANGE, REGISTRATION, TRANSFER AND PAYMENT
Unless otherwise specified in the applicable Prospectus Supplement, payment
of principal, premium, if any, and any interest on the Debt Securities will be
payable, and the exchange of and the transfer of Debt Securities will be
registerable, at the office of the Trustee or at any other office or agency
maintained by the Company for such purpose subject to the limitations of the
Indenture. Unless otherwise indicated in the applicable Prospectus Supplement,
the Debt Securities will be issued in denominations of U.S. $1,000 or integral
multiples thereof. No service charge will be made for any registration of
transfer or exchange of the Debt Securities, but the Company may require payment
of a sum sufficient to cover any tax or other governmental charge imposed in
connection therewith.
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BOOK-ENTRY DEBT SECURITIES
The Debt Securities of a series may be issued in the form of one or more
Global Securities that will be deposited with a Depositary or its nominee
identified in the applicable Prospectus Supplement. In such a case, one or more
Global Securities will be issued in a denomination or aggregate denominations
equal to the portion of the aggregate principal amount of Outstanding Debt
Securities of the series to be represented by such Global Security or
Securities. Each Global Security will be deposited with such Depositary or
nominee or a custodian therefor and will bear a legend regarding the
restrictions on exchanges and registration of transfer thereof referred to below
and any such other matters as may be provided for pursuant to the applicable
Indenture.
Notwithstanding any provision of the Indenture or any Debt Security
described herein, no Global Security may be transferred to, or registered or
exchanged for Debt Securities registered in the name of, any Person other than
the Depositary for such Global Security or any nominee of such Depositary, and
no such transfer may be registered, unless (i) the Depositary has notified the
Company that it is unwilling or unable to continue as Depositary for such Global
Security or has ceased to be qualified to act as such as required by the
applicable Indenture, (ii) the Company executes and delivers to the Trustee an
order that such Global Security shall be so transferable, registrable and
exchangeable, and such transfers shall be registrable, or (iii) there shall
exist such circumstances, if any, as may be described in the applicable
Prospectus Supplement. All Debt Securities issued in exchange for a Global
Security or any portion thereof will be registered in such names as the
Depositary may direct.
The specific terms of the depositary arrangement with respect to any
portion of a series of Debt Securities to be represented by a Global Security
will be described in the applicable Prospectus Supplement. The Company expects
that the following provisions will apply to depositary arrangements.
Unless otherwise specified in the applicable Prospectus Supplement, Debt
Securities which are to be represented by a Global Security to be deposited with
or on behalf of a Depositary will be represented by a Global Security registered
in the name of such Depositary or its nominee. Upon the issuance of such Global
Security, and the deposit of such Global Security with or on behalf of the
Depositary for such Global Security, the Depositary will credit, on its book-
entry registration and transfer system, the respective principal amounts of the
Debt Securities represented by such Global Security to the accounts of
institutions that have accounts with such Depositary or its nominee
("participants"). The accounts to be credited will be designated by the
underwriters or agents of such Debt Securities or by the Company, if such Debt
Securities are offered and sold directly by the Company. Ownership of
beneficial interests in such Global Security will be limited to participants or
Persons that may hold interests through participants. Ownership of beneficial
interests by participants in such Global Security will be shown on, and the
transfer of that ownership interest will be effected only through, records
maintained by the Depositary or its nominee for such Global Security. Ownership
of beneficial interests in such Global Security by Persons that hold through
participants will be shown on, and the transfer of that ownership interest
within such participant will be effected only through, records maintained by
such participant. The laws of some jurisdictions require that certain
purchasers of securities take physical delivery of such securities in
certificated form. The foregoing limitations and such laws may impair the
ability to transfer beneficial interests in such Global Securities.
So long as the Depositary for a Global Security, or its nominee, is the
registered owner of such Global Security, such Depositary or such nominee, as
the case may be, will be considered the sole owner or holder of the Debt
Securities represented by such Global Security for all purposes under the
Indenture. Unless otherwise specified in the applicable Prospectus Supplement,
owners of beneficial interests in such Global Security will not be entitled to
have Debt Securities of the series represented by such Global Security
registered in their names, will not receive or be entitled to receive physical
delivery of Debt Securities of such series in certified form and will not be
considered the Holders thereof for any purposes under the Indenture.
Accordingly, each person owning a beneficial interest in such Global Security
must rely on the procedures of the Depositary and, if such person is not a
participant, on the procedures of the participant through which such person owns
its interest, to exercise any rights of a Holder under the Indenture.
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If the Company requests any action of holders or an owner of a beneficial
interest in such Global Security desires to give any notice or take any
action a holder is entitled to give or take under the Indenture or the TIA, the
Depositary will authorize the participants to give such notice or take such
action, and participants will authorize beneficial owners owning through
such participants to give such notice or take such action or would otherwise
act upon the instructions of beneficial owners owning through them.
Notwithstanding any other provisions to the contrary in the Indenture, the
rights of the beneficial owners of the Debt Securities to receive payment of the
principal and premium, if any, of and interest on such Debt Securities, on or
after the respective due dates expressed in such Debt Securities, or to
institute suit for the enforcement of any such payment on or after such
respective dates, shall not be impaired or affected without the consent of the
beneficial owners.
Principal of and any interest on a Global Security will be payable in the
manner described in the applicable Prospectus Supplement.
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Company, without the consent of any holders of outstanding Debt
Securities, may not consolidate with or merge into, or sell, assign, transfer,
lease, convey or otherwise dispose of all or substantially all of its property
or assets to any person unless (a) the Company is the surviving corporation or
the entity or the person formed by or surviving any such consolidation or merger
(if other than the Company) or to which such sale, assignment, transfer, lease,
conveyance or other disposition shall have been made is a corporation organized
and existing under the laws of the United States, any state thereof or the
District of Columbia; (b) the entity or person formed by or surviving any such
consolidation or merger (if other than the Company) or the entity or person to
which such sale, assignment, transfer, lease, conveyance or other disposition
shall have been made assumes all the obligations of the Company under the Debt
Securities and the Indenture; and (c) immediately prior to and after the
transaction no Default or Event of Default exists.
COVENANTS OF THE COMPANY
The applicable Prospectus Supplement will describe any material
covenants in respect of a series of Offered Debt Securities. Other than the
covenants of the Company included in the Indenture as described above or as
described in the applicable Prospectus Supplement, Indenture will not provide
holders of Debt Securities protection in the event of a highly leveraged
transaction reorganization, restructuring, merger or similar transaction
involving the Company which could adversely affect holders of Debt Securities.
EVENTS OF DEFAULT
Unless otherwise specified in the applicable Prospectus Supplement, the
following will constitute Events of Default under the Indenture with respect
to Debt Securities of any series: (a) failure to pay principal of any Debt
Security of that series when due and payable at maturity, upon redemption or
otherwise; (b) failure to pay any interest on any Debt Security of that
series when due, and the Default continues for 30 days; (c) an Event of
Default, as defined in the Debt Securities of that series, occurs and is
continuing, or the Company fails to comply with any of its other agreements
in the Debt Securities of that series or in the Indenture with respect to
that series and the Default continues for the period and after the notice
provided therein (and described below); and (d) certain events of bankruptcy,
insolvency or reorganization. A Default under clause (c) above is not an
Event of Default with respect to a particular series of Securities until the
Trustee or the Holders of at least 25% in principal amount of the then
outstanding Securities of that series notify the Company of the Default and
the Company does not cure the Default within 30 days after receipt of the
notice. The notice must specify the Default, demand that it be remedied and
state that the notice is a "Notice of Default".
If an Event of Default with respect to Outstanding Debt Securities of
any series (other than an Event or Default relating to certain events of
bankruptcy, insolvency or reorganization) shall occur and be continuing,
either the Trustee or the holders of at least 25% in principal amount of the
outstanding Debt Securities of that series by notice, as provided in the
Indenture, may declare the unpaid principal amount (or, if the Debt
Securities of that series are Original Issue Discount Securities, such lesser
amount as may be specified in the terms of that series) of, and any accrued
and unpaid interest on, all Debt Securities of that series to be due and
payable immediately. However, at any time after a declaration of
acceleration with respect to Debt Securities of any series has been made, but
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before a judgment or decree based on such acceleration has been obtained, the
Holders of a majority in principal amount of the outstanding Debt Securities of
that series may, under certain circumstances, rescind and annul such
acceleration. For information as to waiver of defaults, see "Modification and
Waiver" below.
The Indenture will provide that, subject to the duty of the Trustee during
an Event of Default to act with the required standard of care, the Trustee will
be under no obligation to exercise any of its rights or powers under the
applicable Indenture at the request or direction of any of the holders, unless
such holders shall have offered to the Trustee reasonable security or indemnity.
Subject to certain provisions, including those requiring security or
indemnification of the Trustee, the holders of a majority in principal amount of
the outstanding Debt Securities of any series will have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred on the Trustee, with
respect to the Debt Securities of that series.
The Company will be required to furnish to the Trustee under the Indenture
annually a statement as to the performance by the Company of its obligations
under that Indenture and as to any default in such performance.
MODIFICATION AND WAIVER
Subject to certain exceptions, the Company and the Trustee may amend the
Indenture or the Debt Securities with the written consent of the holders of a
majority in principal amount of the then outstanding Debt Securities of each
series affected by the amendment with each series voting as a separate class.
The holders of a majority in principal amount of the then outstanding Debt
Securities of any series may also waive compliance in a particular instance by
the Company with any provision of the Indenture with respect to the Debt
Securities of that series; provided, however, that without the consent of each
holder of Debt Securities affected, an amendment or waiver may not (i) reduce
the percentage of the principal amount of Debt Securities whose holders must
consent to an amendment or waiver; (ii) reduce the rate or change the time for
payment of interest on any Debt Security; (iii) reduce the principal of or
change the fixed maturity of any Debt Security, or alter the redemption
provisions which respect thereto; (iv) make any Debt Security payable in money
other than that stated in the Debt Security; (v) make any change in the
provisions concerning waivers of Default or Events of Default by holders or the
rights of holders to recover the principal of or interest on any Debt Security;
or (vi) waive a default in the payment of the principal of, or interest on, any
Debt Security, except as otherwise provided in the Indenture. The Company and
the Trustee may amend the Indenture or the Debt Securities without notice to or
the consent of any holder of a Debt Security: (i) to cure any ambiguity, defect
or inconsistency; (ii) to comply with the Indenture's provisions with respect to
successor corporations; (iii) to comply with any requirements of the Commission
in connection with the qualification of the Indenture under the TIA; (iv) to
provide for Debt Securities in addition to or in place of certificated Debt
Securities; (v) to add to, change or eliminate any of the provisions of the
Indenture in respect of one of more series of Debt Securities, provided,
however, that any such addition, change or elimination (A) shall neither (1)
apply to any Debt Security of any series created prior to the execution of such
amendment and entitled to the benefit of such provision, nor (2) modify the
rights of a holder of any such Debt Security with respect to such provision, or
(B) shall become effective only when there is no outstanding Debt Security of
any series created prior to such amendment and entitled to the benefit of such
provision; (vi) to make any change that does not adversely affect in any
material respect the interest on any holder; or (vii) to establish additional
series of Debt Securities as permitted by the Indenture.
Subject to certain exceptions, the holders of a majority in principal
amount of the then outstanding Debt Securities of any series, by notice to the
Trustee, may waive an existing Default or Event of Default and its consequences
except a Default or Event of Default in the payment of the principal of or
interest on any Debt Security with respect to the Debt Securities of that
series.
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TERMINATION OF THE COMPANY'S OBLIGATIONS UNDER THE DEBT SECURITIES AND THE
INDENTURE
Except as otherwise described below, the Company may terminate its
obligations under the Debt Securities and the Indenture with respect to the Debt
Securities if:
(a) all previously authenticated and delivered (other than destroyed, lost
or stolen Debt Securities which have been replaced or Debt Securities which are
paid or Debt Securities for whose payment money or securities has theretofore
been held in trust and thereafter repaid to the Company) have been delivered to
the Trustee for cancellation and the Company has paid all sums payable by it
under the Indenture; or
(b) (1) the Debt Securities mature within one year; and
(2) the Company irrevocably deposits in trust with the Trustee during
such one-year period, under the terms of an irrevocable trust agreement in form
and substance satisfactory to the Trustee, as trust funds solely for the benefit
of the holders of Debt Securities for that purpose, money or U.S. Government
Obligations, or a combination thereof, with the U.S. Government Obligations
maturing as to principal and interest in such amounts and at such times as are
sufficient, without consideration of any reinvestment of such interest, to pay
principal of and interest on the Debt Securities to maturity and to pay all
other sums payable by it under the Indenture; or
(c) (1) the Company irrevocably deposits in trust with the Trustee under
the terms of an irrevocable trust agreement in form and substance satisfactory
to the Trustee, as trust funds solely for the benefit of the holders of Debt
Securities for that purpose, money or U.S. Government Obligations, or a
combination thereof, with the U.S. Government Obligations maturing as to
principal and interest in such amounts and at such times as are sufficient,
without consideration of any reinvestment of such interest, to pay principal of
and interest on the Debt Securities to maturity;
(2) The Company shall have delivered to the Trustee (A) a ruling
directed to the Trustee received from the Internal Revenue Service to the effect
that the holders of the Debt Securities will not recognize income, gain or loss
for federal income tax purposes as a result of the Company's exercise of its
option under this clause (c) and will be subject to federal income tax on the
same amount and in the same manner and at the same times as would have been the
case if such option had not been exercised, of (B) an opinion of counsel to the
same effect as the ruling described in subclause (A) above accompanied by a
ruling to that effect published by the Internal Revenue Service, unless there
has been a change in the applicable federal income tax law since the date of the
Indenture such that a ruling from the Internal Revenue Service is no longer
required;
(3) The Company has paid or caused to be paid all sums then payable
by the Company under the Indenture; and
(4) the Company has delivered to the Trustee an officers' certificate
and an opinion of counsel, each stating that all conditions precedent provided
for in this clause (c) relating to termination of obligations of the Company
have been complied with.
The Company's obligations under sections of the Indenture relating to the
registrar and the paying agent, their obligations, the maintenance of a list of
holders, transfers of Debt Securities, replacement of securities, payment
(together with payment obligations under the Debt Securities), compensation and
indemnity of the Trustee (Section 7.07), replacement of the Trustee and
repayment to the Company of excess money held by the Trustee or the paying Agent
(Section 8.03), shall survive until the Debt Securities are no longer
outstanding. Thereafter, and after any discharge pursuant to clause (a) above,
only the Company's obligations in Sections 7.07 and 8.03 of the Indenture shall
survive. If the ruling from the Internal Revenue Service or opinion of counsel
referred to in clause (c)(2) above is based on or assumes that the Company's
payment obligations under the Indenture or its payment obligations under the
Debt Securities will continue (or is silent with respect thereto), then such
discharge shall constitute only a "covenant defeasance" and, consequently, the
Company shall remain
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liable for the payment of the Debt Securities. However, if and when a ruling
from the Internal Revenue Service or opinion of counsel referred to in clause
(c)(2) above is able to be provided specifically without regard to, and not in
reliance upon, the continuance of the Company's payment obligations under the
Indenture and its payment obligations under the Debt Securities, then the
Company's payment obligations under the Indenture and the Debt Securities shall
cease upon delivery to the Trustee of such ruling or opinion of counsel and
compliance with the other conditions precedent provided for in clause (c) above
relating to the satisfaction and discharge of the Indenture. In such a case (a
"legal defeasance") holders would be able to look only to the trust fund for
payment of principal or interest on the Debt Securities.
REGARDING THE TRUSTEES
The Trustee with respect to the first series of Debt Securities, if any,
will be identified in the Prospectus Supplement relating to such Debt
Securities. Other Trustees may be designated for any subsequent series of Debt
Securities. The Indenture and provisions of the TIA incorporated by reference
therein, contain certain limitations on the rights of the Trustee, should it
become a creditor of the Company, to obtain payment of claims in certain cases,
or to realize on certain property received in respect of any such claim, as
security or otherwise. The Trustee and its affiliates engage in, and will be
permitted to continue to engage in, other transactions with the Company and its
affiliates; PROVIDED, HOWEVER, that if it acquires any conflicting interest (as
defined), it must eliminate such conflict or resign.
The holders of a majority in principal amount of the then outstanding Debt
Securities of any series will have the right to direct the time, method and
place of conducting any proceeding for exercising any remedy available to the
Trustee. The TIA and the Indenture provide that in case an Event of Default
shall occur (and be continuing), the Trustee will be required, in the exercise
of its rights and powers, to use the degree of care and skill of a prudent man
in the conduct of his own affairs. Subject to such provision, the Trustee will
be under no obligation to exercise any of its rights or powers under the
Indenture at the request of any of the holders of the Debt Securities issued
thereunder, unless they have offered to the Trustee indemnity satisfactory to
it.
DESCRIPTION OF PREFERRED STOCK
The following description of the terms of the Preferred Stock sets forth
certain general terms and provisions of the Preferred Stock to which any
Prospectus Supplement may relate. Certain other terms of any series of the
Preferred Stock offered by any Prospectus Supplement will be described in such
Prospectus Supplement. The description of certain provisions of the Preferred
Stock set forth below and in any Prospectus Supplement does not purport to be
complete and is subject to and qualified in its entirety by reference to the
Company's Restated Certificate of Incorporation (the "Certificate of
Incorporation"), and the certificate of designation (a "Certificate of
Designation") relating to each series of the Preferred Stock which will be filed
with the Commission and incorporated by reference in the Registration Statement
of which this Prospectus is a part at or prior to the time of the issuance of
such series of the Preferred Stock.
GENERAL
The Company has the authority to issue 4,000,000 shares of preferred stock,
$0.01 par value per share ("preferred stock of the Company," which term, as used
herein, includes the Preferred Stock offered hereby). As of the date hereof,
the Company has designated 600,000 shares of preferred stock of the Company as
Series A Convertible Reset Preferred Stock, of which 480,000 shares are issued
and outstanding as of April 30, 1995. See "-- Outstanding Preferred Stock."
Under the Certificate of Incorporation, the Board of Directors of the
Company is authorized without further stockholder action to designate and
provide for the issuance of up to 3,400,000 additional shares of preferred stock
of the Company, in one or more series, with such voting powers, full or limited,
and with such designations, preferences and relative participating, optional or
other
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special rights, and qualifications, limitations or restrictions thereof, as
shall be stated in the resolution or resolutions providing for the issue of a
series of such stock adopted, at any time or from time to time, by the Board of
Directors of the Company (as used herein the term "Board of Directors of the
Company" includes any duly authorized committee thereof).
The Preferred Stock shall have the dividend, liquidation, redemption and
voting rights set forth below unless otherwise provided in a Prospectus
Supplement relating to a particular series of the Preferred Stock. Reference is
made to the Prospectus Supplement relating to the particular series of the
Preferred Stock offered thereby for specific terms, including: (i) the
designation and stated value per share of such Preferred Stock and the number of
shares offered; (ii) the amount of liquidation preference per share; (iii) the
initial public offering price at which such Preferred Stock will be issued; (iv)
the dividend rate (or method of calculation), the dates on which dividends shall
be payable and the dates from which dividends shall commence to cumulate, if
any; (v) any redemption or sinking fund provisions; (vi) any conversion or
exchange rights; and (vii) any additional voting, dividend, liquidation,
redemption, sinking fund and other rights, preferences, privileges, limitations
and restrictions.
The Preferred Stock will, when issued, be fully paid and nonassessable and
will have no preemptive rights. The rights of the holders of each series of the
Preferred Stock will be subordinate to those of the Company's general creditors.
DIVIDEND RIGHTS
Holders of the Preferred Stock of each series will be entitled to receive,
when, as and if declared by the Board of Directors of the Company, out of funds
of the Company legally available therefor, cash dividends on such dates and at
such rates as are set forth in, or as are determined by the method described in,
the Prospectus Supplement relating to such series of the Preferred Stock. Such
rate may be fixed or variable or both. Each such dividend will be payable to
the holders of record as they appear on the stock books of the Company on such
record dates, fixed by the Board of Directors of the Company, as specified in
the Prospectus Supplement relating to such series of Preferred Stock.
Such dividends may be cumulative or noncumulative, as provided in the
Prospectus Supplement relating to such series of Preferred Stock. If the Board
of Directors of the Company fails to declare a dividend payable on a dividend
payment date on any series of Preferred Stock for which dividends are
noncumulative, then the right to receive a dividend in respect of the dividend
period ending on such dividend payment date will be lost, and the Company will
have no obligation to pay any dividend for such period, whether or not dividends
on such series are declared payable on any future dividend payment dates.
Dividends on the shares of each series of Preferred Stock for which dividends
are cumulative will accrue from the date on which the Company initially issues
shares of such series.
Unless otherwise specified in the applicable Prospectus Supplement, so long
as the shares of any series of the Preferred Stock are outstanding, unless (i)
full dividends (including if such Preferred Stock is cumulative, dividends for
prior dividend periods) have been paid or declared and set apart for payment on
all outstanding shares of the Preferred Stock of such series and all other
classes and series of preferred stock of the Company (other than Junior Stock,
as defined below) and (ii) the Company is not in default or in arrears with
respect to the mandatory or optional redemption or mandatory repurchase or other
mandatory retirement of, or with respect to any sinking or other analogous funds
for, any shares of Preferred Stock of such series or any shares of any other
preferred stock of the Company of any class or series (other than Junior Stock),
the Company may not declare any dividends on any shares of Common Stock of the
Company or any other stock of the Company ranking as to dividends or
distributions of assets junior to such series of Preferred Stock (the Common
Stock and any such other stock being herein referred to as "Junior Stock"), or
make any payment on account of, or set apart money for, the purchase, redemption
or other retirement of, or for a sinking or other analogous fund for, any shares
of Junior Stock or make any distribution in respect thereof, whether in cash or
property or in obligations of stock of the Company, other than in Junior Stock
which is neither convertible into, nor exchangeable or exercisable for, any
securities of the Company other than Junior Stock.
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LIQUIDATION PREFERENCES
Unless otherwise specified in the applicable Prospectus Supplement, in the
event of any liquidation, dissolution or winding up of the Company, whether
voluntary or involuntary, the holders of each series of the Preferred Stock will
be entitled to receive out of the assets of the Company available for
distribution to stockholders, before any distribution of assets is made to the
holders of Common Stock or any other shares of stock of the Company ranking
junior as to such distribution to such series of the Preferred Stock, the amount
set forth in the Prospectus Supplement relating to such series of the Preferred
Stock. If, upon any voluntary or involuntary liquidation, dissolution or
winding up of the Company, the amounts payable with respect to the Preferred
Stock of any series and any other shares of preferred stock of the Company
(including any other series of the Preferred Stock) ranking as to any such
distribution on a parity with such series of the Preferred Stock are not paid in
full, the holders of the Preferred Stock of such series and of such other shares
of preferred stock of the Company will share ratably in any such distribution of
assets of the Company in proportion to the full respective preferential amounts
to which they are entitled. After payment to the holders of the Preferred Stock
of each series of the full preferential amounts of the liquidating distribution
to which they are entitled, unless otherwise provided in the applicable
Prospectus Supplement, the holders of each such series of the Preferred Stock
will be entitled to no further participation in any distribution of assets by
the Company.
REDEMPTION
A series of the Preferred Stock may be redeemable, in whole or from time to
time in part, at the option of the Company, and may be subject to mandatory
redemption pursuant to a sinking fund or otherwise, in each case upon terms, at
the times and at the redemption prices set forth in the Prospectus Supplement
relating to such series. Shares of the Preferred Stock redeemed by the Company
will be restored to the status of authorized but unissued shares of preferred
stock of the Company.
In the event that fewer than all of the outstanding shares of a series of
the Preferred Stock are to be redeemed, whether by mandatory or optional
redemption, the number of shares to be redeemed will be determined by lot or pro
rata (subject to rounding to avoid fractional shares) as may be determined by
the Company or by any other method as may be determined by the Company in its
sole discretion to be equitable. From and after the redemption date (unless
default is made by the Company in providing for the payment of the redemption
price plus cumulated and unpaid dividends, if any) dividends will cease to
accumulate on the shares of the Preferred Stock called for redemption and all
rights of the holders thereof (except the right to receive the redemption price
plus accumulated and unpaid dividends, if any) will cease.
Unless otherwise specified in the applicable Prospectus Supplement, so long
as any dividends on shares of any series of the Preferred Stock or any other
series of preferred stock of the Company ranking on a parity as to dividends and
distribution of assets with such series of the Preferred Stock are in arrears,
no shares of any such series of the Preferred Stock or such other series of
preferred stock of the Company will be redeemed (whether by mandatory or
optional redemption) unless all such shares are simultaneously redeemed, and the
Company will not purchase or otherwise acquire any such shares; PROVIDED,
HOWEVER, that the foregoing will not prevent the purchase or acquisition of
share shares pursuant to a purchase or exchange offer made on the same terms to
holders of all such shares outstanding.
CONVERSION AND EXCHANGE RIGHTS
The terms, if any, on which shares of Preferred Stock of any series may
be exchanged for or converted into shares of Common Stock, or another series
of Preferred Stock, or any other security will be set forth in the Prospectus
Supplement relating thereto. Such terms may include provisions for
conversion, either mandatory, at the option of the holder, or at the option
of the Company, in which case the number of shares of Common Stock or the
number of shares of another series of Preferred Stock or the
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amount of any other securities to be received by the holders of Preferred Stock
would be calculated as of a time and in the manner stated in the Prospectus
Supplement.
VOTING RIGHTS
Except as indicated in a Prospectus Supplement relating to a particular
series of the Preferred Stock, or except as required by applicable law, the
holders of the Preferred Stock will not be entitled to vote for any purpose.
OUTSTANDING PREFERRED STOCK
As of the date hereof, the Company has designated 600,000 shares of the
preferred stock of the Company as Series A Convertible Reset Preferred Stock.
In March and April 1995, the Company sold an aggregate of 480,000 shares of
Series A Convertible Reset Preferred Stock in private placements.
The Series A Convertible Reset Preferred Stock is not entitled to receive a
dividend other than on an as converted into Common Stock basis, when, as and if
declared on the Common Stock by the Board of Directors out of funds legally
available therefor. In the event of any liquidation, dissolution or winding up
of the Company, the holders of the outstanding shares of Series A Convertible
Reset Preferred Stock are entitled to receive, prior and in preference to any
distribution of any of the assets or surplus funds of the Company to the holders
of the Common Stock by reason of their ownership of such shares, an amount equal
to $25.00 per outstanding share of Series A Convertible Reset Preferred Stock
(subject to adjustment in the event of any stock dividend, stock split, stock
distribution or combination with respect to such shares), plus any accrued and
unpaid dividends. After payment of such amount, the holders of the Series A
Preferred Stock shall have no further rights to participate in any remaining
assets of the Company.
Holders of Series A Convertible Reset Preferred Stock are entitled to the
number of votes equal to the number of shares of Common Stock into which each
such share of Series A Convertible Reset Preferred Stock could then be converted
pursuant to the terms of the Certificate of Designation with respect to any and
all matters presented to the stockholders of the Company for their action and
consideration. Except as provided by law, holders of Series A Convertible Reset
Preferred Stock vote together with the holders of Common Stock as a single
class; provided, however, the consent of the holders of a majority of the
holders of the outstanding shares of Series A Convertible Reset Preferred Stock
shall be required for the Company to take any action that amends or repeals any
provision of the Company's charter if such action would materially and adversely
change the rights, preferences or privileges of the Series A Convertible Reset
Preferred Stock.
Each holder of Series A Convertible Reset Preferred Stock has the right, at
the holder's option, at any time beginning 60 days following the date of
issuance of such share, and prior to the close of business on any redemption
date with respect to such share, to convert each such share into the number of
fully paid and nonassessable shares of Common Stock as is determined by dividing
$25.00 by the conversion price per share in effect for the Series A Convertible
Reset Preferred Stock at the time of conversion (the "Conversion Price"). The
initial Conversion Price is $7.425 per share (the "Initial Conversion Price"),
subject to adjustment for stock splits, consolidations, reclassifications and
reorganizations. On March 25, 1996, the Conversion Price with respect to all
outstanding shares of Series A Convertible Reset Preferred Stock shall be reset
to an amount equal to the lesser of (i) the Initial Conversion Price or (ii) the
lowest average closing price of the Company's Common Stock on the Nasdaq
National Market for any 30 consecutive trading days in the preceding one-year
period; provided, however, in no event will the Conversion Price be reset below
$3.713. In addition, the Conversion Price shall be reset to an amount equal to
90% of the Conversion Price immediately upon the first occurrence, if any, after
March 31, 1996, of (A) the failure by the Company to timely make any material
required filing under the Securities Exchange Act of 1934, as amended, or (B)
delivery of a "qualified" report by the Company's independent public
accountants.
16
<PAGE>
The Series A Convertible Reset Preferred Stock shall automatically convert
to Common Stock at the Conversion Price then in effect, with the Series A
Convertible Preferred Stock being deemed to have a value of $25.00 per share, at
any time on or after 60 days from the date of issuance of the Series A
Convertible Reset Preferred Stock, on the fifth day following the day on which
the Company gives notice to the holders of record of the Series A Convertible
Reset Preferred Stock that both (i) the closing price of the Common Stock on the
Nasdaq National Market for 20 out of 30 consecutive trading days has been in
excess of 175% of the Conversion Price on the last day of any such period and
(ii) the Common Stock may immediately be resold pursuant to an effective
registration statement under the Securities Act or pursuant to Rule 144(k) of
the Securities Act.
The Series A Convertible Reset Preferred Stock may be redeemed by the
Company, in whole or in part, for cash or may be converted into Common Stock at
the Conversion Price then in effect, in each case with the Series A Convertible
Reset Preferred Stock being deemed to have a value of $25.00 per share, (a) at
any time on or after two years from the date of issuance of the Series A
Convertible Reset Preferred Stock or (b) in the event of a merger of the
Company, a sale of all or substantially all of the Company's assets, or such
other transaction in which all or substantially all of the Company is
effectively sold.
All shares of Series A Convertible Reset Preferred Stock not previously
converted into Common Stock or redeemed or repurchased by the Company shall be
redeemed for cash or, at the Company's option, automatically converted into
Common Stock at the Conversion Price then in effect, in each case with the
Series A Convertible Reset Preferred Stock being deemed to have a value of
$25.00 per share, on March 31, 2000.
DESCRIPTION OF COMMON STOCK
The Company has authority to issue 35,000,000 shares of Common Stock, par
value $0.0001 per share. As of March 29, 1995, there were approximately
19,143,800 shares of Common Stock issued and outstanding. The holders of Common
Stock are entitled to one vote per share on all matters to be voted on by
shareholders, including the election of directors. Shareholders are not
entitled to cumulative voting rights, and, accordingly, the holders of a
majority of the shares voting for the election of directors can elect the entire
Board if they choose to do so and, in that event, the holders of the remaining
shares will not be able to elect any person to the Board of Directors.
The holders of Common Stock are entitled to receive such dividends, if any,
as may be declared from time to time by the Board of Directors, in its
discretion, from funds legally available thereof and subject to prior dividend
rights of holders of any shares of preferred stock of the Company which may be
outstanding. Upon liquidation or dissolution of the Company subject to prior
liquidation rights of the holders of preferred stock of the Company, the holders
of Common Stock are entitled to receive on a pro rata basis the remaining assets
of the Company available for distribution. Holders of Common Stock have no
preemptive or other subscription rights, and there are no conversion rights or
redemption or sinking fund provisions with respect to such shares.
Chemical Trust Company of California acts as transfer agent and registrar
for the Common Stock.
17
<PAGE>
DESCRIPTION OF WARRANTS
Any Warrants offered pursuant to this Prospectus will be warrants to
purchase shares of Common Stock. The following summary contains a description
of certain general terms of the Warrants to which any Prospectus Supplement may
relate. Certain terms of any Warrant offered by any Prospectus Supplement will
be described in the Prospectus Supplement relating thereto. If so indicated in
the Prospectus Supplement, the terms of any Warrant may differ from the terms
set forth below. The description of certain provisions of the Warrants does not
purport to be complete and is subject to and qualified in its entirety by
reference to the provisions of the Warrant Agreement (the "Warrant Agreement")
relating to such Warrant, a form of which will be filed or incorporated by
reference, as the case may be, as an exhibit to the Registration Statement of
which this Prospectus is a part at or prior to the time of the issuance of such
Warrant.
GENERAL
The Warrants, evidenced by warrant certificates (the "Warrant
Certificates"), may be issued independently or together with any other
Securities offered by any Prospectus Supplement and may be attached to or
separate from such other Securities. If Warrants are offered, the related
Prospectus Supplement will describe the terms of the Warrants, including the
following: (1) the offering price, if any; (2) the number of shares of Common
Stock purchasable upon exercise of one Warrant and the initial price at which
such shares may be purchased upon exercise; (3) the date on which the right to
exercise the Warrants shall commence and the date on which such right shall
expire; (4) federal income tax consequences; (5) call provisions, if any;
(6) the antidilution provisions of the Warrants; and (7) any other terms of the
Warrants. The shares of Common Stock issuable upon exercise of the Warrants
will, when issued in accordance with the Warrant Agreement, be fully paid and
nonassessable.
EXERCISE OF WARRANTS
Warrants may be exercised by surrendering the Warrant Certificate signed by
the warrantholder, or its duly authorized agent, indicating the warrantholder's
election to exercise all or a portion of the Warrants evidenced by the
certificate. Surrendered Warrant Certificates shall be accompanied by payment
of the aggregate exercise price of the Warrants to be exercised, as set forth in
the related Prospectus Supplement, which payment may be made in the form of cash
or a check equal to the exercise price. Certificates evidencing duly exercised
Warrants will be delivered by the Company to the transfer agent for the Common
Stock. Upon receipt thereof, the transfer agent shall deliver or cause to be
delivered, to or upon the written order of the exercising warrantholder, a
certificate representing the number of shares of Common Stock purchased. If
fewer than all of the Warrants evidenced by any certificate are exercised, the
Company shall deliver to the exercising warrantholder a new Warrant certificate
representing the unexercised Warrants.
ANTIDILUTION PROVISIONS
The exercise price payable and the number of shares of Common Stock
purchasable upon the exercise of each Warrant will be subject to adjustment in
certain events, including the issuance of a stock dividend to holders of Common
Stock or a stock split, reverse stock split, combination, subdivision or
reclassification of Common Stock. In lieu of adjusting the number of shares of
Common Stock purchasable upon exercise of each Warrant, the Company may elect to
adjust the number of Warrants. No adjustments in the number of shares
purchasable upon exercise of the Warrants will be required until cumulative
adjustments require an adjustment of at least 1% thereof. The Company may, at
its option, reduce the exercise price at any time. No fractional shares will be
issued upon exercise of Warrants, but the Company will pay the cash value of any
fractional shares otherwise issuable. Notwithstanding the foregoing, in case of
any consolidation, merger, or sale or conveyance of the property of the Company
as an entirety or substantially as an entirety, the holder of each outstanding
Warrant shall have the right to the kind and amount of shares of stock and other
securities and property (including cash) receivable by a holder of the number of
shares of Common Stock into which such Warrant was exercisable immediately prior
thereto.
18
<PAGE>
NO RIGHTS AS STOCKHOLDERS
Holders of Warrants will not be entitled, by virtue of being such holders,
to vote, to consent, to receive dividends, to receive notice as stockholders
with respect to any meeting of stockholders for the election of directors of the
Company or any other matter, or to exercise any rights whatsoever as
stockholders of the Company.
OUTSTANDING WARRANTS
As of April 30, 1995, the Company had issued and outstanding warrants to
purchase 1,230,000 shares of common stock at $4.25 per share, all of which
expire on March 28, 1997. In addition, in connection with the private
placement of the Company's Series A Convertible Reset Preferred Stock in
March and April 1995, the Company issued warrants to purchase an aggregate of
808,320 shares of common stock at $7.425 per share, all of which expire
approximately three years from the date of issuance.
19
<PAGE>
PLAN OF DISTRIBUTION
The Company may sell the Securities to one or more underwriters for public
offering and sale by them or may sell the Securities to investors directly or
through agents. Any such underwriter or agent involved in the offer and sale of
Securities will be named in the applicable Prospectus Supplement. The Company
has reserved the right to sell Securities directly to investors on its own
behalf in those jurisdictions where and in such manner as it is authorized to do
so.
Underwriters may offer and sell Securities at a fixed price or prices,
which may be changed, at market prices prevailing at the time of sale, at prices
related to such prevailing market prices, or at negotiated prices. The Company
also may, from time to time, authorize dealers, acting as the Company's agents,
to offer and sell Securities upon the terms and conditions as are set forth in
the applicable Prospectus Supplement. In connection with the sale of
Securities, underwriters may receive compensation from the Company in the form
of underwriting discounts or commissions and may also receive commissions from
purchasers of the Securities for whom they may act as agent. Underwriters may
sell Securities to or through dealers, and such dealers may receive compensation
in the form of discounts, concessions or commissions from the underwriters
and/or commissions from the purchasers for whom they may act as agent.
Any underwriting compensation paid by the Company to underwriters or agents
in connection with the offering of Securities, and any discounts, concessions or
commissions allowed by underwriters to participating dealers, will be set forth
in the applicable Prospectus Supplement. Dealers and agents participating in
the distribution of Securities may be deemed to be underwriters, and any
discounts and commissions received by them and any profit realized by them on
resale of the Securities may be deemed to be underwriting discounts and
commissions. Underwriters, dealers and agents may be entitled, under agreements
entered into with the Company, to indemnification against and contribution
toward certain civil liabilities, including liabilities under the Securities Act
of 1933.
If so indicated in the Prospectus Supplement, the Company will authorize
dealers acting as the Company's agents to solicit offers by certain institutions
to purchase the Securities from the Company at the public offering price set
forth in the applicable Prospectus Supplement pursuant to delayed delivery
contracts ("Contracts") providing for payment and delivery on the date or dates
stated in such Prospectus Supplement. Each Contract will be for an amount not
less than the amounts stated in the applicable Prospectus Supplement.
Institutions with whom Contracts, when authorized, may be made include
commercial and savings banks, insurance companies, pension funds, investment
companies, educational and charitable institutions, and other institutions but
will in all cases be subject to the approval of the Company. Contracts will not
be subject to any conditions except (i) the purchase by the institution of the
Securities covered by its Contract shall not at the time of delivery be
prohibited under the laws of any jurisdiction in the United States to which such
institution is subject, and (ii) if the Common is being sold to underwriters,
the Company shall have sold to such underwriters the total amount specified in
the applicable Prospectus Supplement. A commission indicated in the applicable
Prospectus Supplement will be paid to underwriters and agents soliciting
purchases of Securities pursuant to Contracts accepted by the Company.
20
<PAGE>
LEGAL MATTERS
Certain legal matters with respect to the Securities offered hereby will be
passed upon for the Company by Latham & Watkins, San Francisco, California.
Christopher L. Kaufman, a partner of Latham & Watkins, beneficially owns less
than 1% of the Common Stock, 2,000 shares of the Company's Series A Convertible
Reset Preferred Stock and warrants to purchase up to 3,368 shares of Common
Stock at an exercise price of $7.425 per share. Certain legal matters will be
passed upon for any agents or underwriters by counsel for such agents or
underwriters identified in the applicable Prospectus Supplement.
EXPERTS
The financial statements of Liposome Technology, Inc. appearing in Liposome
Technology, Inc.'s Annual Report (Form 10-K) for the year ended December 31,
1994, have been audited by Ernst & Young LLP, independent auditors, as set forth
in their report thereon included therein and incorporated herein by reference.
Such financial statements are incorporated herein by reference in reliance upon
such report given upon the authority of such firm as experts in accounting and
auditing.
21
<PAGE>
- ---------------------------------------- --------------------------------------
- ---------------------------------------- --------------------------------------
NO DEALER, SALESPERSON OR ANY OTHER
PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION
IN CONNECTION WITH THIS OFFERING OTHER
THAN THOSE CONTAINED IN THIS PROSPECTUS, [LOGO]
AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS
HAVING BEEN SO AUTHORIZED BY THE COMPANY
OR ANY UNDERWRITER. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER TO SELL OR A LIPOSOME TECHNOLOGY, INC.
SOLICITATION OF AN OFFER TO BUY BY ANYONE
IN ANY JURISDICTION IN WHICH SUCH OFFER
TO SELL IS NOT AUTHORIZED, OR IN WHICH $50,000,000
THE PERSON IS NOT QUALIFIED TO DO SO OR
TO ANY PERSON TO WHOM IT IS UNLAWFUL
TO MAKE SUCH OFFER OR SOLICITATION. DEBT SECURITIES
NEITHER THE DELIVERY OF THIS PROSPECTUS COMMON STOCK
NOR ANY SALE HEREUNDER SHALL, UNDER ANY PREFERRED STOCK
CIRCUMSTANCES, CREATE ANY IMPLICATION WARRANTS TO PURCHASE COMMON STOCK
THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE
HEREOF OR THAT THE INFORMATION CONTAINED
HEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO ITS DATE.
------------------
TABLE OF CONTENTS
PAGE
----
Available Information.................. 2
Information Incorporated by Reference.. 2
The Company............................ 3
Risk Factors........................... 3
Use of Proceeds........................ 4 --------------------
Dilution............................... 5 PROSPECTUS
Ratios of Earnings to Fixed Charges and --------------------
Earnings to Combined Fixed Charges and
Preferred Stock Dividends............ 5
General Description of Securities...... 6
Description of Debt Securities......... 6
Description of Preferred Stock.........13
Description of Common Stock............17
Description of Warrants................18
Plan of Distribution...................20
Legal Matters..........................21
Experts................................21
1995
- ---------------------------------------- --------------------------------------
- ---------------------------------------- --------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The expenses to be paid by the Company in connection with the distribution
of the securities being registered are as set forth in the following table:
<TABLE>
<S> <C>
Securities and Exchange Commission Fee. . . . . . . . . . $ 17,242
*Nasdaq National Market Filing Fee . . . . . . . . . . . . 10,000
*Printing and Engraving Expenses . . . . . . . . . . . . . 50,000
*Accounting Fees and Expenses. . . . . . . . . . . . . . . 40,000
*Trustee Fees and Expenses . . . . . . . . . . . . . . . . 10,000
*Fees of Transfer Agent. . . . . . . . . . . . . . . . . . 10,000
*Blue Sky Fees and Expenses. . . . . . . . . . . . . . . 5,000
*Legal Fees and Expenses . . . . . . . . . . . . . . . . . 50,000
*Miscellaneous . . . . . . . . . . . . . . . . . . . . . 7,758
------------
*Total. . . . . . . . . . . . . . . . . . . . . . . . $200,000
------------
------------
__________________
<FN>
* Estimated.
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company has the power, pursuant to Section 145 of the Delaware General
Corporation Law, to limit the liability of its directors from certain breaches
of fiduciary duty and to indemnify its directors, officers and other persons for
certain acts.
Articles NINTH and TENTH of the Company's Restated Certificate of
Incorporation provide as follows:
"NINTH: A director of the corporation shall not be personally liable to the
corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for 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 a knowing violation of law, (iii) under Section 174 of the
Delaware General Corporation Law, or (iv) for any transaction from which
the director derived any improper personal benefit. If the Delaware
General Corporation Law is amended hereafter to authorize corporate action
further eliminating or limiting the personal liability of directors, then
the liability of a director of the corporation shall be eliminated or
limited to the fullest extent permitted by the Delaware General Corporation
Law, as so amended.
Any repeal or modification of the foregoing paragraph by the stockholders
of the corporation shall not adversely affect any right or protection of a
director of the corporation existing at the time of such repeal or
modification.
II-1
<PAGE>
TENTH:
A. RIGHT TO INDEMNIFICATION
Each person who was or is made a party or is threatened to be made a party
to or is involved in any action, suit or proceeding, whether civil,
criminal, administrative or investigative ("proceeding"), by reason of the
fact that he or she or a person of whom he or she is the legal
representative, is or was a director or officer, employee or agent of the
corporation or is or was serving at the request of the corporation as a
director or officer, employee or agent of another corporation, or of a
partnership, joint venture, trust or other enterprise, including service
with respect to employee benefit plans, whether the basis of such
proceeding is alleged action in an official capacity as a director,
officer, employee or agent or in any other capacity while serving as a
director, officer, employee or agent, shall be indemnified and held
harmless by the corporation to the fullest extent authorized by the
Delaware General Corporation Law, as the same exists or may hereafter be
amended, (but, in the case of any such amendment, only to the extent that
such amendment permits the corporation to provide broader indemnification
rights than said Law permitted the corporation to provide prior to such
amendment) against all expenses, liability and loss including attorneys'
fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or
to be paid in settlement reasonably incurred or suffered by such person in
connection therewith and such indemnification shall continue as to a person
who has ceased to be a director, officer, employee or agent and shall inure
to the benefit of his or her heirs, executors and administrators; PROVIDED,
HOWEVER, that the corporation shall indemnify any such person seeking
indemnity in connection with an action, suit or proceeding (or part
thereof) initiated by such person only if such action, suit or proceeding
(or part thereof) was authorized by the board of directors of the
corporation. Such right shall be a contract right and shall include the
right to be paid by the corporation expenses incurred in defending any such
proceeding in advance of its final disposition; PROVIDED, HOWEVER, that the
payment of such expenses incurred by a director or officer of the
corporation in his or her capacity as a director or officer (and not in any
other capacity in which service was or is rendered by such person while a
director or officer, including, without limitation, service to an employee
benefit plan) in advance of the final disposition of such proceeding, shall
be made only upon delivery to the corporation of an undertaking, by or on
behalf of such director or officer, to repay all amounts so advanced if it
should be determined ultimately that such director or officer is not
entitled to be indemnified under this Section or otherwise.
B. RIGHT OF CLAIMANT TO BRING SUIT
If a claim under Paragraph A of Article TENTH is not paid in full by the
corporation within ninety (90) days after a written claim has been received
by the corporation, the claimant may at any time thereafter bring suit
against the corporation to recover the unpaid amount of the claim and, if
successful in whole or in part, the claimant shall be entitled to be paid
also the expense of prosecuting such claim. It shall be a defense to any
such action (other than an action brought to enforce a claim for expenses
incurred in defending any proceeding in advance of its final disposition
where the required undertaking, if any, has been tendered to this
corporation) that the claimant has not met the standards of conduct which
make it permissible under the Delaware General Corporation Law for the
corporation to indemnify the claimant for the amount claimed, and the
burden of proving that such standards were met shall be on the claimant.
Neither the failure of the corporation (including its board of directors,
independent legal counsel, or its stockholders) to have made a
determination prior to the commencement of such action that indemnification
of the claimant is proper in the circumstances because he or she has met
the applicable standard of conduct set forth in the Delaware General
Corporation Law, nor an actual determination by the corporation (including
its board of directors, independent legal counsel, or its stockholders)
that the claimant has not met such applicable standard of conduct, shall be
a defense to the action or create a presumption that claimant has not met
the applicable standard of conduct.
II-2
<PAGE>
C. NON-EXCLUSIVITY OF RIGHTS
The rights conferred on any person by Paragraphs A and B of Article TENTH
shall not be exclusive of any other right which such persons may have or
hereafter acquire under any statute, provision of the Certificate of
Incorporation, by-law, agreement, vote of stockholders or disinterested
directors or otherwise.
D. INSURANCE
The corporation may maintain insurance, at its expense, to protect itself
and any such director, officer, employee or agent of the corporation or
another corporation, partnership, joint venture, trust or other enterprise
against any such expense, liability or loss, whether or not the corporation
would have the power to indemnify such person against such expense,
liability or loss under the Delaware General Corporation Law."
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) EXHIBITS:
*4.1 Restated Certificate of Incorporation, filed as Exhibit 3.1 to
the Company's Annual Report on Form 10-K for the fiscal year
ended September 30, 1988 and incorporated herein by reference.
*4.2 Certificate of Designation for Series A Convertible Reset
Preferred Stock.
*4.3 By-Laws, filed as Exhibit 3.2 to the Company's Registration
Statement on Form S-1 (File No. 33-13332) and incorporated herein
by reference.
*4.4 Form of Indenture.
*5 Opinion of Latham & Watkins.
23.1 Consent of Ernst & Young LLP (see page II-7).
*23.2 Consent of Latham & Watkins (included in Exhibit 5).
*24 Powers of Attorney.
_______________
*previously filed
ITEM 17. 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 of 1933;
(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)
II-3
<PAGE>
which, individually or in the aggregate, represent a fundamental
change in the information set forth in the registration statement;
(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 the information required to be included in a post-
effective amendment by paragraphs (a)(1)(i) and (a)(1)(ii) above may be
contained in periodic reports filed by the registrant pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934 that are incorporated by reference
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.
(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.
(4) That, for the purpose of determining any liability under the
Securities Act of 1933, each filing of the Registrant's annual report
pursuant to Section 13(a) or Section 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.
(5) That, for the purpose of determining any liability under the
Securities Act of 1933, the information omitted from the form of prospectus
filed as part of this Registration Statement in reliance upon Rule 430A and
contained in the form of prospectus filed by the Registrant pursuant to
Rule 424(b)(1) or (4) or 497(h) under the Securities Act of 1933 shall be
deemed to be part of this Registration Statement at the time it was
declared effective.
(6) That, for the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a form
of prospectus shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such securities
shall be deemed to be the initial bona fide offering thereof, and
(7) To file an application for the purpose of determining the
eligibility of the trustee to act under Subsection (a) of Section 310 of
the Trust Indenture Act (the "Act") in accordance with the rules and
regulations prescribed by the Commission under Section 305(b)(2) of the
Act.
(b) The undersigned registrant hereby undertakes 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 section 15(d) of the
Securities Exchange Act of 1934 and (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.
(e) The undersigned registrant hereby undertakes to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is sent or
given, the latest annual report to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be presented by
Article 3 of Registration S-X are not set forth
II-4
<PAGE>
in the prospectus, to deliver, or cause to be delivered to each person to whom
the prospectus is sent or given, the latest quarterly report that is
specifically incorporated by reference in the prospectus to provide such interim
financial information.
(h) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 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 of 1933 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 of 1933 and will be governed by the final adjudication of such
issue.
(i) The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities
Act of 1933, the information omitted from a form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in the form
of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act of 1933 shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For purposes of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of prospectus
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 hereof.
II-5
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE
REGISTRANT CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS
ALL OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS
AMENDMENT TO REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF MENLO PARK, STATE OF
CALIFORNIA ON MAY 26, 1995.
LIPOSOME TECHNOLOGY, INC.
By /s/ Nicolaos V. Arvanitidis
-------------------------------
Nicolaos V. Arvanitidis
CHAIRMAN OF THE BOARD AND
CHIEF EXECUTIVE OFFICER
Pursuant to the requirements of the Securities Act of 1933, this
amendment to registration statement has been signed by each of the
following persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Nicolaos V. Arvanitidis Chairman of the Board and May 26, 1995
- ------------------------------------ Chief Executive Officer
(Nicolaos V. Arvanitidis)
/s/ Donald J. Stewart Vice President, Finance May 26, 1995
- ------------------------------------ (Principal Accounting Officer)
(Donald J. Stewart)
* Director May 26, 1995
- ------------------------------------
(Robert G. Faris)
* Director May 26, 1995
- ------------------------------------
(Robert B. Shapiro)
* Director May 26, 1995
- ------------------------------------
(I. Craig Henderson)
* Director May 26, 1995
- ------------------------------------
(Richard C.E. Morgan)
* Director May 26, 1995
- ------------------------------------
(E. Donnall Thomas)
* By: /s/ Sally A. Davenport
------------------------------------
Sally A. Davenport, Attorney-In-Fact
</TABLE>
II-6
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in
the Amendment No. 2 to the Registration Statement (Form S-3 No. 33-58495) and
related Prospectus of Liposome Technology, Inc. and to the incorporation by
reference therein of our report dated February 10, 1995, except as to Note 7,
as to which the date is March 30, 1995, with respect to the financial
statements of Liposome Technology, Inc. included in its Annual Report (Form
10-K) for the year ended December 31, 1994, filed with the Securities and
Exchange Commission.
Ernst & Young LLP
Palo Alto, California
May 26, 1995
II-7
<PAGE>
EXHIBIT INDEX
*4.1 Restated Certificate of Incorporation, filed as Exhibit 3.1 to
the Company's Annual Report on Form 10-K for the fiscal year
ended September 30, 1988 and incorporated herein by reference.
*4.2 Certificate of Designation for Series A Convertible Reset
Preferred Stock.
*4.3 By-Laws, filed as Exhibit 3.2 to the Company's Registration
Statement on Form S-1 (File No. 33-13332) and incorporated herein
by reference.
*4.4 Form of Indenture.
*5.1 Opinion of Latham & Watkins.
23.1 Consent of Ernst & Young LLP (See page II-7).
*23.2 Consent of Latham & Watkins (included in Exhibit 5).
*24 Powers of Attorney.
__________________________________
*previously filed
