<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 2, 2000
REGISTRATION NO. 333-
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------------
AMERICAN BIOGENETIC SCIENCES, INC.
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 11-2655906
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
1375 AKRON STREET, COPIAGUE, NY 11726
(631) 789-2600
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant's Principal Executive Offices)
--------------------------
DAVID H. MURPHREE, ESQ.
BROWN, RUDNICK, FREED & GESMER
ONE FINANCIAL CENTER
BOSTON, MA 02111
(617) 856-8200
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent for Service)
--------------------------
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this registration statement.
If the only securities being registered on this form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box.[ ]
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box: [X]
If this form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=================================================================================================================================
Proposed
Amount Maximum Proposed Maximum
Title Of Each Class Of To Be Offering Price Aggregate Offering Amount Of
Securities To Be Registered Registered Per Share(1) Price(1) Registration Fee
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A Common Stock,
par value $0.001 per share 650,000 shares(2) $1.59375 $1,035,937.50 $273.49
=================================================================================================================================
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) under the Securities Act of 1933, as amended, on
the basis of the average of the bid and asked prices for the registrant's
Class A common stock on April 27, 2000, as reported on the OTC Bulletin
Board.
(2) Consists of 650,000 shares issuable upon exercise of outstanding warrants.
Also registered hereunder are such presently indeterminable number of
additional shares of Class A common stock as may be issued in the event of
a merger, consolidation, reorganization, recapitalization, stock dividend,
stock split or other similar change in Class A common stock.
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.
================================================================================
<PAGE> 2
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED MAY 2, 2000
PROSPECTUS
650,000 SHARES
AMERICAN BIOGENETIC SCIENCES, INC.
CLASS A COMMON STOCK
-------------------
The stockholder of American Biogenetic Sciences, Inc. listed on page 7 of
this prospectus is offering for sale 650,000 shares of our Class A common stock
under this prospectus.
The selling stockholder may offer its shares through public or private
transactions, at prevailing market prices or at privately negotiated prices. We
will not receive any proceeds from these sales. See "Plan of Distribution."
OTC Bulletin Board Symbol
"MABA"
On April 28, 2000, the closing price of a share of our Class A common stock
on the OTC Bulletin Board was $1.75.
THIS INVESTMENT INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD CAREFULLY CONSIDER
THE FACTORS DESCRIBED UNDER THE CAPTION "RISK FACTORS" BEGINNING ON PAGE 2 OF
THIS PROSPECTUS.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this prospectus is ______, 2000
<PAGE> 3
TABLE OF CONTENTS
PROSPECTUS SUMMARY.............................................................1
RISK FACTORS...................................................................2
INFORMATION REGARDING FORWARD-LOOKING STATEMENTS...............................6
WHERE YOU CAN FIND MORE INFORMATION ABOUT US...................................6
USE OF PROCEEDS................................................................7
SELLING STOCKHOLDER............................................................7
PLAN OF DISTRIBUTION...........................................................7
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES.................................9
LEGAL MATTERS..................................................................9
EXPERTS........................................................................9
ii
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PROSPECTUS SUMMARY
This summary highlights some information from this prospectus. It may not
contain all of the information important to you. To understand this offering
fully and get a better understanding of our business and operations, you should
read the entire prospectus carefully, including the risk factors and the
documents we have incorporated by reference in the section "Where You Can Find
More Information About Us."
Please note that references in this prospectus to "we", "our" or "us" refer
to American Biogenetic Sciences, Inc. and our subsidiary, Stellar Bio Systems,
Inc., not to the selling stockholder.
GENERAL INFORMATION ABOUT AMERICAN BIOGENETIC SCIENCES, INC.
We are engaged in researching, developing and marketing cardiovascular and
neurobiology products for commercial development. We commenced selling our
products during the last quarter of 1997.
Some of our products are designed to be used for IN VIVO, while others are
designed for IN VITRO, diagnostic procedures. IN VIVO diagnostic procedures are
those in which proteins or compounds are injected directly into the body or
bloodstream to assess abnormal reactions or conditions. During IN VITRO
procedures, blood, urine or other bodily fluid or tissue is extracted from the
body and the diagnostic tests are performed in a test tube or other laboratory
equipment.
Our main products are:
o Thrombus Precursor Protein test, referred to as the TpP(TM) test. This
is an IN VITRO diagnostic test used to assess the risk of blood clots
in the veins or arteries. This test is also used to monitor the
performance of anti-clotting therapy or drugs used in the prevention
of blood clots.
o Functional Intact Fibrinogen test, referred to as the FiF(R) test.
This is an IN VITRO diagnostic test which measures the levels of
fibrinogen in blood. Fibrinogen is a protein used in the
blood-clotting process.
o Therapeutic neurocompounds. These are chemical compounds that have
been identified for the treatment of epilepsy, migraine and mania and
other diseases of the nervous system.
o IN VITRO diagnostic products for infectious and auto-immune diseases.
These products can determine the status of diseases such as human
herpes and lupus.
o Mouse serum. This serum is a blood component that lacks blood cells.
IN VITRO diagnostic product manufacturers use it in diagnostic tests
for various purposes.
The company was incorporated in Delaware in September 1983. Our principal
executive offices are located at 1375 Akron Street, Copiague, New York 11726,
and our telephone number at that address is (631) 789-2600.
As of April 20, 2000, we had 40,507,028 shares of Class A common stock and
3,000,000 shares of Class B common stock outstanding. As of that date, we also
had 7,000 share of Series A preferred stock outstanding, which were immediately
convertible into 7,000,000 shares of our Class A common stock. This prospectus
relates to 650,000 shares of our Class A common stock that may be issued upon
exercise of certain outstanding warrants.
<PAGE> 5
RISK FACTORS
BEFORE YOU BUY SHARES OF OUR CLASS A COMMON STOCK, YOU SHOULD BE AWARE THAT
THERE ARE VARIOUS RISKS ASSOCIATED WITH THAT PURCHASE, INCLUDING THOSE DESCRIBED
BELOW. YOU SHOULD CONSIDER CAREFULLY THESE RISK FACTORS, TOGETHER WITH ALL OF
THE OTHER INFORMATION IN THIS PROSPECTUS AND THE DOCUMENTS WE HAVE INCORPORATED
BY REFERENCE IN THE SECTION "WHERE YOU CAN FIND MORE INFORMATION ABOUT US"
BEFORE YOU DECIDE TO PURCHASE SHARES OF OUR CLASS A COMMON STOCK.
RISKS ASSOCIATED WITH OUR LACK OF OPERATING HISTORY, HISTORY OF LOSSES AND
FUTURE NEED FOR CAPITAL
OUR LACK OF SIGNIFICANT REVENUES FROM PRODUCT SALES AFFECTS OUR ABILITY TO
GENERATE CASH
We are a development stage company. Although we have products at various
stages of development and have started to generate revenues, we may not generate
significant revenues from product sales to advance beyond the development stage.
Through December 31, 1999, we have received an aggregate of $1,384,000 in
licensing fees, royalties and fees under collaborative agreements. Sales of the
TpP and FiF tests and sales of Stellar's products since its acquisition on April
23, 1998, totaled $2,708,000 through December 31, 1999.
WE HAVE A HISTORY OF LOSSES, AND IF WE DO NOT ACHIEVE PROFITABILITY, WE MAY NOT
BE ABLE TO CONTINUE OUR BUSINESS IN THE FUTURE
Our research, development, and general and administrative expenses have
resulted in significant losses in each year since our inception in 1983 and are
expected to continue to result in significant losses for the foreseeable future.
We have incurred the following losses since 1995:
Fiscal year ended:
o December 31, 1995..................... $5,607,000
o December 31, 1996..................... $7,700,000
o December 31, 1997..................... $7,147,000
o December 31, 1998..................... $7,548,000
o December 31, 1999..................... $5,351,000
THE CYCLE FROM PRODUCT DEVELOPMENT TO COMMERCIALIZATION IS LENGTHY AND MAY
RESULT IN DELAYS IN THE COMMERCIALIZATION OF OUR PRODUCTS
Our existing products and our products under development are subject to the
risks inherent in the development of most biotechnology products. We are unable
to predict with any degree of certainty when, or if, we will complete the
research, development and testing of products currently under development and
future products or, if completed, whether we will obtain required regulatory
approvals. In addition, we may not be able to produce our products in commercial
quantities at reasonable costs, and our products may not be accepted by the
medical community.
WE COULD BE REQUIRED TO CUT BACK OR STOP OPERATIONS IF WE ARE UNABLE TO RAISE OR
OBTAIN NEEDED FINANCING
The research, development, commercialization, manufacturing and marketing
of our products will require financial resources that are significantly in
excess of those presently available to us. We probably will need to seek
additional financing, which may result in (1) borrowings that could affect our
results of operations and create an obligation to repay loans and (2) the
issuance of additional shares of our capital stock and/or rights to acquire
additional shares of our capital stock. Such additional issuances of capital
would result in a reduction of your percentage interest in our company. We may
not be able to arrange financing or other third party arrangements necessary to
fully develop and commercialize any of our products on acceptable terms or at
all.
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RISKS ASSOCIATED WITH THE INDUSTRY IN WHICH WE OPERATE
IF WE DO NOT OBTAIN AND MAINTAIN NECESSARY U.S. OR FOREIGN CLEARANCES OR
MANUFACTURING AND MARKETING APPROVALS FOR OUR PRODUCTS, OUR BUSINESS AND
OPERATIONS COULD BE ADVERSELY AFFECTED
The investigation, manufacture, exportation, marketing and sale of
diagnostic and therapeutic products in or from the United States is subject to
regulation by the Food and Drug Administration, as well as by comparable foreign
and state agencies. Although we have obtained pre-market clearance for some of
our existing products, other products may not be approved by the FDA or other
applicable foreign regulatory agencies. Any FDA, foreign and state regulatory
approvals or clearances, once obtained, can be withdrawn or modified. Our
inability to obtain and maintain any necessary United States or foreign
clearances or manufacturing and marketing approvals for our products could have
a material adverse effect on our business, financial condition and results of
operations. In addition, our failure to comply with applicable government
requirements could result in, among other things, fines, injunctions, civil
penalties, recall or seizure of products, total or partial suspension of
production, failure of the government to grant pre-market clearance or
pre-market approval for those products, withdrawal of marketing or manufacturing
approvals, and criminal prosecutions.
WE MAY HAVE TO LOWER PRICES OR SPEND MORE MONEY TO EFFECTIVELY COMPETE AGAINST
COMPANIES WITH GREATER RESOURCES THAN OURS, WHICH COULD RESULT IN LOWER REVENUES
AND/OR PROFITS
The biotechnology industry is characterized by rapid technological
advances, evolving industry standards and technological obsolescence. While our
TpP is a unique diagnostic test that measures the beginning stages of active
clot formation, a feature which we believe has competitive advantages, this
product faces competition from other diagnostic tests that measure blood clots
during the breakdown stage after the blood clot has formed or that measure other
clotting factors that assess the risk of future clots. Our FiF test faces
competition from several other fibrinogen tests. Most of our competitors have
financial resources and research and development staffs and facilities
substantially greater than ours. We may not be able to compete successfully
given this competitive environment. For example, if our competitors offer lower
prices, we could be forced to lower our prices, which would result in reduced
margins and may affect our revenues if we do not compensate for the reduced
margins by increasing our sales volume. On the other hand, if we do not lower
our prices with our competitors, we could lose sales and market share. In either
case, if we are unable to compete against companies that can afford to cut
prices, we would not be able to generate sufficient revenues to grow the company
or reverse our history of losses.
In addition, our competitors and others may develop products that may
render our products obsolete or that have advantages over our products, such as
greater accuracy and precision or greater acceptance by the medical community.
Competing products may also get through the regulatory approval process sooner
than our products, enabling our competitors to market their products earlier
than we can. Usually, the first person to market a product has a significant
marketplace advantage. In addition, other products now in use, presently
undergoing the regulatory approval process or under development by others may
perform functions similar to those of our existing products or products that we
have under development.
A LACK OF ACCEPTANCE OF OUR PRODUCTS BY THE MEDICAL COMMUNITY COULD RESULT IN
LOWER REVENUES
The commercial success of our products is substantially dependent on
acceptance and use of our products by the medical community. Our products may
not be accepted by the medical community, or it may take a lengthy period of
time to gain the necessary acceptance. Widespread acceptance of our products as
useful additional tools for diagnosis and treatment will require educating the
medical community about the products' benefits, reliability and effectiveness.
In addition, the existence or development of competing products, which may be as
or more effective than our products for a specific use, may adversely affect
acceptance of our products.
WE MAY HAVE INCREASED EXPENSES IF OUR MARKETING EFFORTS ARE NOT SUCCESSFUL
Our strategy is to seek arrangements with large pharmaceutical companies to
market our products. In the event we are unable to enter into those arrangements
in the future, or if our arrangements are not successful, we may seek to market
our products through independent distributors or through sales representatives.
Independent
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distributors may require us to develop a marketing program to support sales. In
that event, we may incur additional expenses for the development of promotional
literature and aides, promotional activities, the hiring of sales
representatives and the conduct of additional studies in order to promote the
interests of distributors in our products. We may not be able to develop those
marketing arrangements on satisfactory terms, and we may not have the working
capital necessary to establish the sales support generally required by
independent distributors.
RISKS ASSOCIATED WITH OUR INTERNAL OPERATIONS AND POLICIES
SINCE WE DO NOT INTEND TO DECLARE DIVIDENDS IN THE FORESEEABLE FUTURE, THE
RETURN ON YOUR INVESTMENT WILL DEPEND UPON APPRECIATION OF THE MARKET PRICE OF
YOUR SHARES
Our board of directors does not intend to declare any dividends in the
foreseeable future, but intends to retain all earnings, if any, for use in our
business operations. As a result, your return on your investment in our company
will depend upon the appreciation, if any, in the market price of our common
stock. The holders of our Series A preferred stock and our Class A and Class B
common stock are entitled to receive dividends when, as and if declared by the
board of directors out of funds legally available for dividend payments. To
date, we have not paid any cash dividends. The payment of dividends, if any, in
the future is within the discretion of our board of directors and will depend
upon our earnings, capital requirements and financial condition, and other
relevant factors.
THE LOSS OF THE SERVICES OF MR. ROACH OR MR. NORTH COULD ADVERSELY AFFECT OUR
BUSINESS AND PROSPECTS AND OUR ABILITY TO RECRUIT OR RETAIN QUALIFIED PERSONNEL
Our success may depend upon the efforts of (1) Alfred J. Roach, the
Chairman of our board of directors and one of our major stockholders, and (2)
Mr. John S. North, our President and Chief Executive Officer. Mr. Roach is not
subject to any employment agreement. Our employment agreement with Mr. North
expires on November 15, 2001. Each of these executives is subject to earlier
termination in certain cases. We do not maintain life insurance on the lives of
Mr. Roach or Mr. North. The loss of the services of Mr. Roach or Mr. North could
adversely affect our business and prospects. In addition, because of the nature
of our business, our success depends upon our ability to attract and retain
technologically qualified personnel, particularly research scientists. There is
substantial competition for qualified personnel, including competition from
companies with substantially greater resources than ours. We may not be
successful in recruiting or retaining personnel of the requisite caliber or in
adequate numbers to enable us to conduct our business and effectively compete in
our industry, and the loss of Mr. Roach or Mr. North could make recruitment and
retention even more difficult.
RISKS WHICH MAY DILUTE THE VALUE OF YOUR SHARES OF OUR COMMON STOCK OR LIMIT THE
EFFECT OF YOUR VOTING POWER
OUR COMMON STOCK IS ONLY TRADED ON THE OVER-THE-COUNTER MARKET, AND NASDAQ MAY
DENY OUR REQUEST FOR REINSTATEMENT ON THE NASDAQ SMALLCAP MARKET, WHICH COULD
NEGATIVELY AFFECT THE PRICE AND LIQUIDITY OF THE COMMON STOCK
On January 6, 2000, the Nasdaq Stock Market, Inc. delisted our Class A
common stock from the Nasdaq SmallCap Market. Our Class A common stock currently
trades on the OTC Bulletin Board. We have requested review of the delisting
decision, and we are seeking reinstatement on the Nasdaq SmallCap Market. If we
fail to obtain reinstatement of our Nasdaq SmallCap Market listing, the market
value of our Class A common stock could decline, certain regulatory rules will
apply, and stockholders may find it more difficult to dispose of their shares.
THE PRICE OF OUR COMMON STOCK IS HIGHLY VOLATILE
The price of our Class A common stock is highly volatile. During the period
from January 1, 1999 to April 20, 2000, the closing bid price of our Class A
common stock has ranged from a high of $6.41 in March 2000 to a low of $0.25 in
September 1999. We believe that the volatile fluctuations of the market price
are based on a number of factors, including (1) the number of shares in the
market at the time as well as the number of shares we may be required to issue
in the future, compared to the market demand for our shares; (2) our
performance, including the
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<PAGE> 8
development and commercialization of our products and proposed products; and (3)
general economic and market conditions. Following periods of volatility in the
market price of a company's securities, securities class action lawsuits have
often been instituted against such a company. If similar litigation were
instituted against us, it could result in substantial costs and a diversion of
our management's attention and resources, which could have an adverse effect on
our business.
AMERICAN BIOGENETIC SCIENCES, INC. IS CONTROLLED BY ALFRED J. ROACH, WHO MAY
SUBSTANTIALLY DETERMINE THE OUTCOME OF PROPOSALS SUBMITTED TO THE STOCKHOLDERS
As of April 20, 2000, Alfred J. Roach, the Chairman of our Board of
Directors, owned and had the power to vote all 3,000,000 outstanding shares of
our Class B common stock and 4,472,250 shares of our Class A common stock. Each
share of Class B common stock is entitled to ten votes, while each share of
Class A common stock is entitled to one vote. Accordingly, as of April 20, 2000,
Mr. Roach was entitled to cast approximately 48.9% of all votes at meetings of
stockholders or by consent without a meeting. As a result, Mr. Roach will be
able to exercise significant control over our company through his practical
ability to determine the outcome of votes of stockholders regarding, among other
things, nomination and election of directors and approval of significant
transactions. Mr. Roach's holdings could increase in the future through
conversion of his 1,000 shares of Series A preferred stock into 1,000,000 shares
of Class A common stock, and through his exercise of options and warrants to
purchase an additional 2,410,000 shares of our Class A common stock, which he
may exercise at any time.
WE HAVE A SUBSTANTIAL NUMBER OF SHARES RESERVED FOR FUTURE ISSUANCE WHICH, WHEN
ISSUED, WILL REDUCE YOUR PERCENTAGE OF OWNERSHIP AND VOTING POWER AND MAY AFFECT
THE PRICE OF YOUR SHARES OF OUR COMMON STOCK
The issuance of a significant number of shares of stock would dilute the
percentage ownership of existing stockholders and could have a significant
adverse effect on the market price of our Class A common stock. As of April 20,
2000, we had outstanding 40,507,028 shares of Class A common stock. On that
date, we had an additional 24,768,340 shares of Class A common stock reserved
for possible future issuance upon conversion of our Class B common stock and
Series A preferred stock and upon exercise of outstanding options and warrants,
including the 650,000 shares of Class A common stock covered by this prospectus.
In addition, we may in the future seek additional financing, which may
result in the issuance of additional shares of our capital stock and/or rights
to acquire additional shares of our capital stock.
A SIGNIFICANT NUMBER OF RESTRICTED SHARES MAY BE RESOLD UNDER THIS PROSPECTUS OR
RULE 144, WHICH MAY AFFECT THE MARKET PRICE OF OUR COMMON STOCK
Future sales of substantial amounts of shares in the public market, or the
perception that those sales could occur, could adversely affect the market price
of our Class A common stock. Of the 40,507,028 shares of Class A common stock
outstanding as of April 20, 2000, approximately 36,141,101 shares are presently
freely transferable without restriction under the Securities Act and 4,365,927
shares are "restricted shares" that may be sold under an exemption from
registration under the Securities Act. In addition, the selling stockholder may
exercise outstanding warrants to purchase 650,000 shares of Class A common stock
and sell those shares under this prospectus.
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<PAGE> 9
INFORMATION REGARDING FORWARD-LOOKING STATEMENTS
Some of the information in this prospectus and in the documents we have
incorporated by reference may contain forward-looking statements made pursuant
to the safe harbor provisions of the Private Securities Litigation Reform Act of
1995. Those statements can generally be identified by the use of forward-looking
words like "may," "will," "expect," "anticipate," "intend," "estimate,"
"continue," "believe," or other similar words. These statements discuss future
expectations, or state other "forward-looking" information. When considering
those statements, you should keep in mind the risk factors and other cautionary
statements in this prospectus and in the other documents filed with the SEC that
we have referred you to. The risk factors noted in this section and other
factors noted in this prospectus could cause our actual results to differ
materially from those contained in any forward-looking statements.
WHERE YOU CAN FIND MORE INFORMATION ABOUT US
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any document we file at the
SEC's public reference rooms in Washington, D.C., New York, New York and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further information
on the public reference rooms. Our SEC filings are also available to the public
over the Internet at the SEC's Website at "http://www.sec.gov."
We have filed with the SEC a registration statement on Form S-3 to register
the shares being offered. This prospectus is part of that registration statement
and, as permitted by the SEC's rules, does not contain all the information
included in the registration statement. For further information with respect to
us and our Class A common stock, you should refer to the registration statement
and to the exhibits and schedules filed as part of the registration statement,
as well as the documents discussed below.
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this prospectus, and information that we file later with
the SEC will automatically update or supersede this information.
This prospectus may contain summaries of contracts or other documents.
Because they are summaries, they will not contain all of the information that
may be important to you. If you would like complete information about a contract
or other document, you should read the copy filed as an exhibit to the
registration statement or incorporated in the registration statement by
reference.
We incorporate by reference the documents listed below and any future
filings we will make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of
the Securities Exchange Act of 1934 (File No. 0-19041) until all of the shares
are sold:
o Annual Report on Form 10-K for the year ended December 31, 1999; and
o The description of our Class A common stock contained in the
registration statement on Form 8-A filed on February 26, 1991,
including all amendments or reports filed for the purpose of updating
that description.
You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address:
Attention: Chief Financial Officer
American Biogenetic Sciences, Inc.
1375 Akron Street
Copiague, New York 11726
(631) 789-2600
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<PAGE> 10
You can review and copy the registration statement, its exhibits and
schedules, as well as the documents listed below, at the public reference
facilities maintained by the SEC as described above. The registration statement,
including its exhibits and schedules, are also available on the SEC's web site.
USE OF PROCEEDS
The selling stockholder is selling all of the shares covered by this
prospectus for its own account. Accordingly, we will not receive any proceeds
from the resale of the shares.
We prepared this prospectus to satisfy our obligations to the selling
stockholder to register its shares. We will bear the expenses relating to this
registration, other than selling discounts and commissions, which will be paid
by the selling stockholder.
SELLING STOCKHOLDER
The selling stockholder named below may offer and sell up to 650,000 shares
of our Class A common stock under this prospectus. We will not receive any
proceeds from those sales.
The 650,000 shares of our Class A common stock that we are registering
under this prospectus consist of shares that may be issued to the selling
stockholder upon the exercise of certain warrants. We issued the warrants to the
selling stockholder as compensation for investor relation consulting services
provided by the selling stockholder under various consultant agreements. The
warrants expire on dates ranging from November 14, 2000 to January 19, 2004 and
are exercisable at prices ranging from $1.00 to $3.50 per share. We agreed to
register these shares under the Securities Act at our expense, other than
selling discounts and commissions, which will be paid for by the selling
stockholder.
The following table lists information regarding the selling stockholder's
beneficial ownership of shares of our Class A common stock as of April 20, 2000,
and as adjusted to reflect the sale of the shares. The 650,000 shares of common
stock beneficially owned and to be sold by the selling stockholder consist of
shares of our Class A common stock issuable upon exercise of stock purchase
warrants.
Information concerning the selling stockholder, its pledgees, donees and
other non-sale transferees who may become selling stockholders may change from
time to time. To the extent the selling stockholder or any of its
representatives advise us of such changes, we will report those changes in a
prospectus supplement to the extent required. See "Plan of Distribution."
<TABLE>
<CAPTION>
SHARES OF CLASS A COMMON STOCK
SHARES OF COMMON BENEFICIALLY
STOCK OWNED SHARES OF OWNED AFTER THE OFFERING
PRIOR TO THE COMMON STOCK TO ------------------------------
NAME OFFERING BE SOLD NUMBER PERCENT
- ---- ---------------- --------------- ------ --------
<S> <C> <C> <C> <C>
Redington, Inc. 650,000 650,000 0 *
</TABLE>
- -----------------------
* Less than 1%
PLAN OF DISTRIBUTION
The selling stockholder and its pledgees, donees, transferees and other
non-sale transferees may offer their shares at various times in one or more of
the following transactions:
o in the over-the-counter market; or
o in privately negotiated transactions
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at prevailing market prices at the time of sale, at prices related to those
prevailing market prices, at negotiated prices or at fixed prices.
The selling stockholder may also sell the shares under Rule 144 instead of
under this prospectus, if Rule 144 is available for those sales.
The transactions in the shares covered by this prospectus may be carried
out by one or more of the following methods:
o ordinary brokerage transactions and transactions in which the
broker solicits purchasers;
o purchases by a broker or dealer as principal, and the resale
by that broker or dealer for its account under this
prospectus, including resale to another broker or dealer;
o block trades in which the broker or dealer will attempt to sell the
shares as agent but may position and resell a portion of the block
as principal in order to facilitate the transaction; or
o negotiated transactions between the selling stockholder and
purchasers, with or without a broker or dealer.
The selling stockholder and any broker-dealers or other persons acting on
the behalf of parties that participate in the distribution of the shares may be
deemed to be underwriters. Any commissions or profits they receive on the resale
of the shares may be deemed to be underwriting discounts and commissions under
the Securities Act.
As of the date of this prospectus, we are not aware of any agreement,
arrangement or understanding between any broker or dealer and the selling
stockholder with respect to the offer or sale of the shares under this
prospectus.
We have advised the selling stockholder that, during the time it is engaged
in distributing shares covered by this prospectus, it must comply with the
requirements of the Securities Act and the Exchange Act, including Rule 10b-5
and Regulation M. Under those rules and regulations, the selling stockholder:
o may not engage in any stabilization activity in connection with our
securities;
o must furnish each broker that offers Class A common stock covered
by this prospectus with the number of copies of this prospectus
that are required by each broker; and
o may not bid for or purchase any of our securities or attempt to
induce any person to purchase any of our securities other than as
permitted under the Exchange Act.
Under the terms of each of the warrants, we agreed to indemnify and hold
harmless the selling stockholder against liabilities under the Securities Act,
which may be based upon, among other things, any untrue statement or alleged
untrue statement of a material fact or any omission or alleged omission of a
material fact, unless made or omitted in reliance upon written information
provided to us by the selling stockholder for use in this prospectus. We have
agreed to bear the expenses incident to the registration of the shares, other
than selling discounts and commissions.
8
<PAGE> 12
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
Section 145 of the Delaware General Corporation Law allows companies to
indemnify their directors and officers against expenses, judgments, fines and
amounts paid in settlement, under the conditions and limitations described in
the law, with respect to various lawsuits and other proceedings to which they
become a party by reason of the fact that they were serving as our officer,
director, employee or agent or of another enterprise at our request. Our
certificate of incorporation authorizes us to indemnify our officers, directors
and other agents to the fullest extent permitted under Delaware law.
Our certificate of incorporation provides that a director is not personally
liable for monetary damages to us or our stockholders for breach of his or her
fiduciary duties as a director. However, a director will be held liable for a
breach of his or her duty of loyalty to us or our stockholders, his or her
intentional misconduct or willful violation of law, actions or inactions not in
good faith, an unlawful stock purchase or payment of a dividend under Delaware
law, or transactions from which the director derives an improper personal
benefit. This limitation of liability does not affect the availability of
equitable remedies against the director, including injunctive relief or
rescission.
We have purchased a directors and officers liability and reimbursement
policy that covers liabilities of our directors and officers arising out of
claims based upon acts or omissions in their capacities as directors and
officers.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to our directors, officers or controlling persons
pursuant to the foregoing provisions, or otherwise, we have been informed that
in the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable.
LEGAL MATTERS
For the purposes of this offering, Brown, Rudnick, Freed & Gesmer will pass
upon the validity of the shares of Class A common stock covered under this
prospectus.
EXPERTS
The audited consolidated financial statements, including the related notes
to those statements, incorporated by reference in this prospectus and elsewhere
in the registration statement have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their report with respect to
those statements. Those financial statements and report are incorporated by
reference herein in reliance upon the authority of Arthur Andersen LLP as
experts in accounting and auditing in giving said reports.
9
<PAGE> 13
================================================================================
WE HAVE NOT AUTHORIZED
ANY DEALER, SALESPERSON 650,000 Shares
OR ANY OTHER PERSON TO GIVE
ANY INFORMATION OR TO
REPRESENT ANYTHING NOT
CONTAINED IN THIS PROSPECTUS.
YOU MUST NOT RELY ON ANY
UNAUTHORIZED INFORMATION.
THIS PROSPECTUS IS NOT AN OFFER American Biogenetic Sciences, Inc.
TO SELL NOR IS IT SOLICITING AN
OFFER TO BUY ANY SHARES IN ANY
JURISDICTION WHERE THE OFFER OR
SALE IS NOT PERMITTED.
THE INFORMATION IN THIS
PROSPECTUS IS CURRENT AS
OF _____________, 2000. Class A Common Stock
--------------------- --------------------
TABLE OF CONTENTS PROSPECTUS
--------------------- --------------------
Page
Prospectus Summary 1
Risk Factors 2
Information Regarding
Forward-Looking Statements 6
Where You Can Find More
Information About Us 6
Use of Proceeds 7 ________ __, 2000
Selling Stockholder 7
Plan of Distribution 7
Indemnification for Securities
Act Liabilities 9
Legal Matters 9
Experts 9
===============================================================================
<PAGE> 14
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Listed below is an estimate of the fees and expenses payable in connection
with the proposed offering and sale of the shares. We will bear all of the costs
of issuance and distribution as follows:
SEC Registration Fee $ 273.49
Accounting Fees and Expenses $ 2,000.00
Legal Fees and Expenses $ 7,500.00
Costs of Printing and Engraving $ 6,000.00
Miscellaneous $ 1,226.51
----------
TOTAL $17,000.00
==========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the General Corporation Law of the State of Delaware (the
"DGCL") provides, in general, that a corporation incorporated under the laws of
the State of Delaware, such as our company, may indemnify any person who was or
is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, other than a derivative action by or in
the right of the corporation, by reason of the fact that the person is or was a
director, officer, employee or agent of the corporation, or is or was serving at
the request of the corporation as a director, officer, employee or agent of
another enterprise, against expenses, judgments, fines and amounts paid in
settlement actually and reasonably incurred by that person in connection with
that action, suit or proceeding if that person acted in good faith and in a
manner that the person reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe that the person's conduct was
unlawful. In the case of a derivative action, a Delaware corporation may
indemnify that person against expenses actually and reasonably incurred by that
person in connection with the defense or settlement of that action or suit if
that person acted in good faith and in a manner that person reasonably believed
to be in or not opposed to the best interests of the corporation, except that no
indemnification shall be made in respect of any claim, issue or matter as to
which that person shall have been adjudged to be liable to the corporation
unless and only to the extent that the court determines that the person is
fairly and reasonably entitled to indemnity for those expenses.
Article VII of the registrant's By-laws provides for indemnification of our
directors, officers, employees and agents to the fullest extent permitted under
Delaware law. In addition, Article TENTH of the registrant's Restated
Certificate of Incorporation provides, in general, that no director of the
registrant shall be personally liable to the registrant or any of 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 DGCL (which provides that under certain circumstances,
directors may be jointly and severally liable for willful or negligent
violations of the DGCL provisions regarding the payment of dividends or stock
repurchases or redemptions), as the same exists or hereafter may be amended, or
(iv) for any transaction from which the director derived an improper personal
benefit.
ABS has purchased a Directors and Officers Liability and Reimbursement
policy that covers liabilities of directors and officers of ABS arising out of
claims based upon acts or omissions in their capacities as directors and
officers.
11
<PAGE> 15
ITEM 16. EXHIBITS
EXHIBIT
NUMBER DOCUMENT
- ------- ---------
4 Form of Warrant issued to Redington, Inc. (one of three Warrants
substantially identical except for date and price information).
5 Opinion of Brown, Rudnick, Freed & Gesmer as to the legality of
the Class A Common Stock being offered.
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Brown, Rudnick, Freed & Gesmer (included in Exhibit 5).
24 Power of Attorney (contained on Signature Page to the
Registration Statement).
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;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information included 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 this Registration Statement; provided, however,
that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports
filed by us under Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by
reference in this Registration Statement.
(2) That, for the purpose of determining any liability under
the Securities Act, each 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 the time shall be
deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(b) The undersigned Registrant undertakes that, for purposes of
determining any liability under the Securities Act, each filing of our annual
report under Section 13(a) or 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.
12
<PAGE> 16
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to our directors, officers and controlling
persons under our by-laws, or otherwise, we have been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by us of expenses incurred or paid by our
directors, officers or controlling persons 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, we will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
13
<PAGE> 17
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 registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the Town of Copiague, State of New York, on the 1st day of May,
2000.
AMERICAN BIOGENETIC SCIENCES, INC.
By: /s/ Alfred J. Roach
------------------------------
Alfred J. Roach,
Chairman of the Board
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints each of Alfred J. Roach, Josef C. Schoell
and Timothy J. Roach and each of them with power of substitution, as his
attorney-in-fact, in all capacities, to sign any amendments (including
post-effective amendments) and to file the same, with exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
hereby ratifying and confirming all that said attorneys-in-fact or their
substitutes may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated on the 1st day of May, 2000.
SIGNATURE TITLE
--------- -----
/s/ Alfred J. Roach
- ----------------------------------
Alfred J. Roach Chairman of the Board and Director
/s/ John S. North
- ----------------------------------
John S. North President, Chief Executive Officer
and Director
/s/ Timothy J. Roach
- ----------------------------------
Timothy J. Roach Secretary, Treasurer and Director
/s/ Josef C. Schoell
- ----------------------------------
Josef C. Schoell Vice President-Finance (Principal
Financial and Accounting Officer)
- ----------------------------------
Gustav Victor Rudolph Born Director
/s/ Ellena M. Byrne
- ----------------------------------
Ellena M. Byrne Director
/s/ Joseph C. Hogan
- ----------------------------------
Joseph C. Hogan Director
/s/ Glenna M. Crooks
- ----------------------------------
Glenna M. Crooks Director
14
<PAGE> 18
EXHIBIT INDEX
EXHIBIT
NUMBER DOCUMENT
- ------- --------
4 Form of Warrant issued to Redington, Inc. (one of three Warrants
substantially identical except for date and price information).
5 Opinion of Brown, Rudnick, Freed & Gesmer as to the legality
of the Class A Common Stock being offered.
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Brown, Rudnick, Freed & Gesmer (included in Exhibit 5).
24 Power of Attorney (contained on Signature Page to the
Registration Statement).
15
<PAGE> 1
EXHIBIT 4
STOCK WARRANT AGREEMENT
Agreement made as of the 1st day of June, 1999, by and between
American Biogenetic Sciences, Inc., a Delaware Corporation (hereinafter called
the "Company") and Redington, Inc. (hereinafter called "Redington").
WITNESSETH:
WHEREAS, the Company has engaged Redington to act as an Investor
Relations Consultant to the Company pursuant to an agreement for the term
between January 20, 1999 and January 19, 2000 (the "Consultant Agreement"); and
WHEREAS, Redington has earned this Warrant (the "Warrant") under the
Consultant Agreement, but on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants contained herein, it is hereby agreed:
1. GRANT OF WARRANT. The Company hereby grants to Redington the right
and option to purchase from the Company, upon and subject to the terms and
conditions hereinafter set forth, all or any part of an aggregate of up to
300,000 shares of the Company's Class A Common Stock, $0.001 par value per share
(hereinafter called the "Common Stock" and the shares thereof so purchased or
purchasable, as the case may be, being hereinafter called the "Shares") at an
exercise price of $1.00 per share, notwithstanding the foregoing, this Warrant
may be exercised as to 50,000 share amounts only if the Closing "Ask" price (the
"Closing Ask") of the Company's Common Stock during the period ending June 30,
2000, remains at each such Closing Ask set forth below for a period of ten
consecutive trading days.
COLUMN 1 COLUMN 2
-------- --------
Then the maximum number of
Shares exercisable under this
Closing Ask Warrant at each Vested Price
$1.00 50,000(Vested on Execution)
$1.50 50,000
$2.00 50,000
$2.50 50,000
$3.00 50,000
$3.50 50,000
2. TERM OF WARRANT. The term of this Warrant is for five years and
shall have commenced effective January 20, 1999, and shall expire at 5:00 p.m.,
New York time, on January 19, 2004 ("Expiration Date").
3. METHOD OF WARRANT EXERCISE. Subject to the terms and conditions of
this Agreement, the
<PAGE> 2
Warrant conferred hereby may be exercised by Redington at any time during its
term, to the extent exercisable at that time, by giving written notice to the
Company at 1375 Akron Street, Copiague, New York 11726, Attention: Josef C.
Schoell, Vice President Finance. Such notice shall state the election to
exercise this Warrant and the number of shares in respect of which it is being
exercised, shall be signed on behalf of Redington by a duly authorized signature
thereof and shall be accompanied by (a) payment of the exercise price therefor
by cash or certified check, payable to the order of the Company, (b) any
required federal income tax or other required withholding amount, which shall be
paid in cash or by certified check and (c) such other documents (including a
confirmation of the representation and agreement referred to in Section 4 as of
the time of exercise of this Warrant) as the Company may reasonably require.
This Warrant may not be exercised in an amount less than 5,000
Shares, nor may it be exercised as to a fraction of a Share.
This Warrant shall be considered exercised on the date such notice,
together with all required payments and other documents, is deemed given under
Section 8(d). The Company shall deliver or cause to be delivered to Redington a
certificate or certificates representing the Shares for which this Warrant is
presently exercised, registered in the name of Redington, as soon as practicable
after this warrant shall have been properly exercised. Shares to be issued on
the exercise of this Warrant at the election of the Company, may be either
authorized but unissued Common Stock or Common Stock previously issued and
reacquired by the Company. Redington shall not be, nor have any of the rights or
privileges of, a stockholder of the Company in respect of any of the Shares
issuable upon the exercise of the warrant hereby granted unless and until
certificates representing such Shares shall have been issued and delivered.
4. INVESTMENT COVENANT. Redington represents and warrants that the
Shares issued upon such exercise are being acquired for investment by Redington
and for its own account and without a view to the resale or distribution thereof
within the meaning of the Securities Act of 1933, as amended (the "Act").
Redington agrees that it will not sell, transfer, pledge, hypothecate or
otherwise dispose of any of such Shares except pursuant to (i) an effective
Registration Statement under the Act covering such disposition, or (ii) an
opinion of counsel to the Company, in response to a request therefor, to the
effect that such registration is not required as a condition of such
disposition. Redington acknowledges that such Shares are not presently
registered under the Act and that, except for the Registration Rights being
afforded the Company is under no obligation to so register or qualify this
Warrant or any of the Shares underlying this Warrant under, or do any act which
may be requisite to Redington securing an exemption from the registration or
qualification requirements of, the Act or any state security law in connection
with the exercise of this warrant or any disposition of the Shares. Accordingly,
any Shares acquired hereunder must be held indefinitely unless they are
registered under the Act or the disposition thereof is exempt from the
registration requirements of the Act; any sale of the Shares or any part thereof
made in reliance on Rule 144 of the Securities and Exchange Commission under the
Act can be made only after compliance with any requisite holding period and in
amounts in accordance with the terms and conditions of that Rule. Redington
agrees that the certificates representing the Shares to be received by Redington
upon exercise of this option my have "stop transfer instructions" placed against
the transfer thereof based upon the foregoing, and may bear the following (or a
similar) legend:
"The Shares represented by this certificate have not been registered
under the Securities Act of 1933 and may not be sold, transferred,
pledged, hypothecated or otherwise disposed of in the absence of (i)
an effective registration statement for such shares under said Act or
(ii) an opinion of Company counsel that such registration is not
required."
If the Company's Board of Directors shall determine, in its
discretion, that the listing or qualification
<PAGE> 3
of the Shares subject to this Warrant on any securities exchange or under any
applicable law, or the consent or approval of any governmental regulatory body,
is necessary or desirable as a condition to, or in connection with, the exercise
of this Warrant or the issue of shares hereunder, the Company shall use its best
efforts to obtain such listing, qualification, consent or approval, but this
Warrant may not be exercised in whole or in part unless and until such listing,
qualification, consent or approval shall have been effected or obtained free of
any conditions that are not reasonably acceptable to the Company's Board of
Directors.
5. REGISTRATION RIGHTS.
(a) If requested to do so, but only on one occasion, by Redington of
an aggregate of a majority of the shares of Common Stock (i) theretofore issued
upon the exercise of this Warrant (or a portion hereof) and (ii) represented by
the portion of this Warrant which has not theretofore been exercised, the
Company shall (subject to all of the provisions of this Section) use its best
efforts to promptly file with the Securities and Exchange Commission, a
registration statement under the Act on Form S-3 or the comparable short
registration form (but the Company shall not be obligated to file a registration
statement under this clause (a) of Section 5 on any other form) covering the
shares of Common Stock of the Company issued prior to the time of the filing of
such registration statement (and those shares which Redington agrees to purchase
by exercising this Warrant (or applicable portion) no later than
contemporaneously with the effectiveness of such registration statement) which
are so specifically designated in such written request as being proposed to be
sold by Redington and requested to be included in such registration statement.
Those whose Shares of Common Stock are to be included in any registration
statement filed under this clause (a) of this Section 5 are hereinafter referred
to as the "Selling Stockholders".
(b) The Company shall not be obligated to register this Warrant or
any portion hereof.
(c) The Company shall use its best efforts to keep any registration
statement filed pursuant to this Section 5 effective for a period of nine months
following its initial effective date or such earlier date as all of the Selling
Stockholder's shares of Common Stock covered by such registration statement have
been sold.
(d) Notwithstanding anything to the contrary set forth herein, the
Company shall not be required to include in any such registration statement any
Shares of Common Stock owned by any proposed Selling Stockholder if (i) in the
opinion of the Company's counsel, the shares proposed to be included in the
registration statement may properly be disposed of under Rule 144 under the Act
or otherwise without registration under the Act, (ii) the offering to which the
registration statement relates is an underwritten offering which would include
Shares to be offered by the Company and/or other of the Company's security
holders and the underwriter or representative of the underwriters objects to the
inclusion of such Shares in such registration statement or (iii) to the extent
the Company is otherwise contractually prohibited from, or restrictive in,
including such Shares in such registration statement.
(e) In the event of an underwritten offering of any equity securities
of the Company (and whether or not any Shares of Common Stock issued or issuable
upon the exercise of this Warrant are included in such offering), this Warrant
may not be exercised during such period (up to 180 days following the
consummation of such offering) that the Company in the related underwriting or
purchase agreement agrees not to issue any Shares of its Common Stock; PROVIDED,
HOWEVER, that in such event, the Expiration Date of this Warrant shall be
extended by the number of days during which this Warrant may not be exercised.
(f) In connection with any such registration statement which includes
Shares of Common Stock issued upon exercise of this Warrant, the Company agrees
to take all reasonable steps to comply with such
<PAGE> 4
state securities laws as may be reasonably requested by Selling Stockholders
(except that the Company shall in no event be required to qualify as a foreign
corporation or give a general consent to the service of process nor subject
itself to taxation in such jurisdiction) and to furnish to Selling Stockholders
such number of prospectuses or other documents incident to such offering as the
Selling Stockholders may from time to time reasonably request.
(g) The Company's obligations under this Section 5 shall be
conditioned upon the Selling Stockholder (i) furnishing to the Company all such
information and material as may be reasonably requested by the Company or its
counsel for inclusion in any such registration statement, (ii) doing all such
things and executing all such additional instruments as may be reasonably
necessary or desirable in the opinion of the Company or its counsel in
connection with such registration statement or public offering and (iii)
complying in all respects with the Act and all applicable rules and regulations
thereunder and with the securities laws of the states in which any such public
offering is made.
(h) All costs and expenses in connection with any registration
statement filed pursuant to this Section 5 with respect to a Selling
Stockholder's Shares including, without limitation, Federal and State
registration and filing fees, printing expenses and the fees and disbursements
of the Company's counsel and of the Company's independent accountants, shall be
borne by the Company, except that such Selling Stockholder shall be responsible
for all (i) underwriting discounts and commissions and all stock transfer taxes
applicable to the Selling Stockholder's Shares and (ii) fees and expenses of any
counsel or accountants representing such Selling Stockholder.
(i) In connection with any registration statement which pursuant to
this Section 5 includes Shares of Common Stock of Selling Stockholders, the
Company will indemnify each Selling Stockholder, its partners, officers and
directors and each person, if any, who controls the Selling Stockholder within
the meaning of Section 15 of the Act and hold all such indemnified persons
harmless against and in respect of any losses, claims, damages or liabilities,
joint or several, to which the indemnified persons may become subject under the
Act or otherwise insofar as such losses, claims, damages or liabilities (or
actions with respect thereto) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in such
registration statement (or any amendment thereto or supplement to any Prospectus
contained therein) or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements made therein not misleading, except to the
extent that any such untrue statement or omission or alleged untrue statement or
omission is based upon information furnished to the Company by any of the
Selling Stockholders or any of their representatives for use in such
registration statement; and the Company agrees to reimburse the Selling
Stockholders and such other persons entitled to indemnification under this
paragraph for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action.
In connection with any registration statement which pursuant to this
Section 5 includes Shares of Common Stock of Selling Stockholders, each Selling
Stockholder will indemnify the Company and each other Selling Stockholder and
each other person who participates in the offering and each of their respective
partners, officers, directors and persons, if any, who control such indemnified
persons within the meaning of Section 15 of the Act and hold all such
indemnified persons harmless against and in respect of any losses, claims,
damages or liabilities, joint or several, to which such indemnified persons may
become subject under the Act or otherwise insofar as such losses, claims,
damages or liabilities (or actions with respect thereto) arise out of or are
based upon any untrue statement or alleged untrue statement of any material fact
contained in such registration statement (or any amendment thereto or supplement
to any Prospectus contained therein) or arise out of or are based upon the
omission or alleged omission to state therein a material fact required
<PAGE> 5
to be stated therein or necessary to make the statements made therein not
misleading, but only to the extent that any such untrue statement or omission or
alleged untrue statement or omission is based upon information furnished to the
Company by such Selling Stockholder or any of its or his representatives, and
such Selling Stockholder agrees to reimburse the Company, such other Selling
Stockholders and such other persons entitled to indemnification under this
paragraph for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action.
Promptly after receipt by a party entitled to indemnity pursuant
hereto (an "indemnified party") of notice of a claim or the commencement of any
action, such indemnified party will, if a claim with respect thereto is to be
made against another pursuant to this Section 5 (an "indemnifying party"),
notify the indemnifying party of the claim or commencement of such action, but
failure to so notify an indemnifying party shall not relieve the indemnifying
party from any liability which it may have on account of this indemnity
agreement except to the extent such indemnifying party is materially, adversely
and permanently prejudiced thereby. The indemnifying party will be entitled to
participate in and, to the extent that it may wish, jointly with any other
indemnifying party, assume the defense thereof, with counsel reasonably
satisfactory to the indemnified parties, and from and after notice to such
indemnified parties of the indemnifying party's election so to assume the
defense thereof, the indemnifying party shall thenceforth not be liable to such
indemnified party for any legal and related expense subsequently incurred by
such indemnified party in connection with the defense thereof other than
reasonable costs of investigation; provided, however, that nothing herein shall
be deemed to preclude any indemnified party from participating in any such
defense at its own cost and expense.
No indemnifying or indemnified party will consent to the entry of a
judgment or enter into a settlement of any claims which might give rise to
liability of an indemnified party (or another indemnifying party) without the
prior written consent of such other parties, which consent shall not be
unreasonably withheld.
If it is determined that, as a matter of public policy, the
indemnification provided for in this clause (i) is unavailable to an indemnified
party as contemplated, then, to the extent not determined to be prohibited by
public policy, the indemnifying party shall contribute to the amount paid or
payable by the indemnified party as a result of such loss, claim, damage or
liability in such proportion as is appropriate to reflect not only the relative
benefits received by the indemnified party and the indemnifying party, but also
the relative fault of the indemnified party and the indemnifying party, as well
as any other relevant equitable considerations.
Notwithstanding anything to the contrary contained in this clause
(i), if pursuant to an underwritten public offering of a Selling Stockholder's
shares of Common Stock, the Company and any underwriters enter into an
underwriting or purchase agreement relating to such offering which contains
provisions relating to indemnification, such provisions (in lieu of the
foregoing provisions) shall be deemed to govern indemnification among the
Company, the Selling Stockholders and such underwriters.
6. EFFECT OF CHANGE OF OUTSTANDING SHARES.
(a) In the event that, prior to the full exercise of this Warrant,
the outstanding shares of Common Stock of the Company are changed by reason of a
stock dividend, stock split-up, combination, recapitalization or the like, an
appropriate adjustment shall be made by the Board of Directors of the Company
(whose determination shall be final and binding on the parties) in the aggregate
number and kind of shares and Warrant exercise price per share of Common Stock
then remaining subject to this warrant (but without regard to fractions).
<PAGE> 6
(b) In the event of: (i) the liquidation of dissolution of the
Company or (ii) a merger or consolidation in which the Company is not the
surviving corporation, this Warrant shall terminate unless other provision is,
in the sole discretion of the Board of Directors of the Company, made therefor
in the transaction.
7. LIMITED TRANSFERABILITY.
(a) This Warrant is not transferable or assignable by Redington to
any third party (the "Holder") except it may be transferred in compliance with
Subsection (b) and with respect to not less than 50,000 Shares, this Warrant may
be transferred and assigned: (i) to Redington, Inc., any successor firm or
corporation of Redington, Inc., (ii) to any of the officers or employees of
Redington, Inc. or of any such successor firm or (iii) in the case of an
individual pursuant to such individual's last will and testament only upon the
books of the Company which it shall cause to be maintained for the purpose. The
Company may treat the registered Holder of this Warrant as he or it appears on
the Company's books at any time as the Holder for all purposes. The Company
shall permit any Holder of a warrant or his or its duly authorized attorney,
upon written request during ordinary business hours, to inspect and copy or make
extracts from its books showing the registered Holder of Warrants. All Warrants
will be dated the same date as this Warrant.
(b) By acceptance hereof, the Holder represents and warrants that
this Warrant is being acquired, and all Shares to be purchased upon the exercise
of this Warrant will be acquired, by the Holder solely for the account of such
Holder and not with a view to the fractionalization and distribution thereof and
will not be sold or transferred except in accordance with the applicable
provisions of the Act and the rules and regulations of the Securities and
Exchange Commission promulgated thereunder, and the Holder agrees that neither
this Warrant nor any of the Shares may be sold or transferred except under cover
of a Registration Statement under the Act which is effective and current with
respect to such Shares or pursuant to an opinion, in form and substance
reasonably acceptable to the Company, that registration under the Act is not
required in connection with such sale or transfer. Any Shares issued upon
exercise of this Warrant shall bear the legend contained in Section 4.
8. MISCELLANEOUS.
(a) This Agreement is made under and shall be governed by the laws of
the Sate of New York in all respects, including matters of construction,
validity and performance, except insofar as the laws of the State of Delaware
specifically and mandatorily apply.
(b) If any provision of this Agreement is held to be illegal, invalid
or unenforceable under applicable law, such provisions shall be fully severable,
with this Agreement to be construed and enforced as if such illegal, invalid or
unenforceable provision had never constituted a part of this Agreement; and the
remaining provisions of this Agreement shall remain in full force and effect and
shall not be affected by the illegal, invalid or unenforceable provision or by
its severance from this Agreement. Furthermore, in lieu of such illegal inlaid
or unenforceable provision there shall be added automatically as a part of this
Agreement a provision as similar in terms to such illegal, inlaid or
unenforceable provision as may be possible and be legal, valid and enforceable.
(c) This Agreement and the Consultant Agreement constitute the entire
agreement between the parities with respect to the subject matter hereof. This
Agreement may not be modified or amended, nor may any term or provision hereof
be waived or discharged, except in writing, signed by the party against whom
such modification, amendment, waiver or discharge is sought to be enforced. A
waiver in one
<PAGE> 7
instance shall not be effective unless it is in writing and shall not be deemed
a continuing waiver.
(d) All notices or other communications required, desired or
permitted to be given under this Agreement shall be in writing and shall be (i)
if sent to the Company, addressed to the Company at 1375 Akron Street, Copiague,
New York 11726 and (ii) if sent to Redington, addressed to Redington, Inc., at
49 Richmondville, Westport, CT 06880 or (iii) in either case to any different
address as a party may notify the other. Any such notice or other communication
shall be deemed "given" when delivered personally, one business day after sent
by Federal Express (or similar overnight delivery service) or Express Mail, or
five days after sent by registered or certified mail, postage prepaid.
(e) The captions of the various sections are inserted only for
reference and for convenience of the parties, and in no way define, limit or
describe the scope of this Agreement, nor the intent of any of the provisions
hereof.
IN WITNESS WHEREOF, the parities have executed this Agreement the day
and year first written above.
AMERICAN BIOGENETIC SCIENCES, INC.
By:______________________________
John S. North
President
REDINGTON, INC.
By:______________________________
Thomas Redington
President
<PAGE> 8
ASSIGNMENT
FOR VALUE RECEIVED, _______________ hereby sells, assigns and
transfers onto __________________ the foregoing Warrant and all rights evidenced
thereby, and does irrevocably constitute and appoint __________________,
attorney, to transfer said Warrant on the books of AMERICAN BIOGENETIC SCIENCES,
INC.
Dated:__________________ Signature: __________________
Address: __________________
PARTIAL ASSIGNMENT
FOR VALUE RECEIVED, __________________ hereby assigns and transfers
unto __________________ the right to purchase __________________ shares of the
Common Stock of American Biogenetic Sciences, Inc. by the foregoing Warrant, and
a proportionate part of said Warrant and the rights evidenced hereby, and does
irrevocably constitute and appoint __________________, attorney, to transfer
that part of said Warrant on the books of American Biogenetic Sciences, Inc.
Dated:__________________ Signature:__________________
Address:__________________
<PAGE> 9
SUBSCRIPTION FORM
[To be signed only if Holder desires to
exercise all or a portion of the Warrant]
To: AMERICAN BIOGENETIC SCIENCES, INC.
The undersigned, the registered Holder of the within Warrant, hereby
irrevocably elects to exercise the purchase rights represented by the Warrant to
purchase thereunder with respect to:
___________ shares of Class A Common Stock covered by the within
Warrant and herewith makes payment of $____________ therefor, and requests that
the certificates for such shares be issued in the name of __________________
whose address is __________________ and whose social security or employer
identification number is __________________ and if such shares shall not be all
of the shares purchasable under the Warrant, that a new Warrant of like tenor
for the balance of the number of shares purchasable thereunder be delivered to
the undersigned.
Dated:
____________________________________________
(Signature must conform in all respects to name
of the registered Holder as specified on the
face of the Warrant.)
<PAGE> 1
EXHIBIT 5
May 2, 2000
American Biogenetic Sciences, Inc.
1375 Akron Street
Copiague, New York 11726
Attn: John S. North, President and Chief Executive Officer
RE: Registration Statement on Form S-3 filed on May 1, 2000
-------------------------------------------------------
Ladies and Gentlemen:
We have acted as counsel to American Biogenetic Sciences, Inc., a Delaware
corporation (the "Company"), in connection with the preparation and filing with
the Securities and Exchange Commission of a Registration Statement on Form S-3
(the "Registration Statement") pursuant to which the Company is registering
under the Securities Act of 1933, as amended (the "Act"), a total of 650,000
shares of Class A Common Stock, par value $.001 per share (the "Shares"). This
opinion is being rendered in connection with the filing of the Registration
Statement.
In connection with this opinion, we have examined the following documents
(collectively, the "Documents"):
(i) the Restated Certificate of Incorporation of the Company, as
amended, and Certificate of Designation, as certified by the
Secretary of State of the State of Delaware on April 27, 2000, and
a certificate of the Secretary of the Company dated May 1, 2000,
that there have been no amendments thereto;
(ii) the Amended and Restated By-laws of the Company, certified by the
Secretary of the Company as presently being in effect;
(iii) a Certificate of the Secretary of the Company dated May 1, 2000,
which certifies the adoption of certain resolutions by the Board
of Directors of the Company;
(iv) warrants issued to Redington, Inc., to purchase an aggregate of up
to 700,000 shares of Class A Common Stock (the "Warrants"); and
(v) a letter dated April 20, 2000, from Continental Stock Transfer &
Trust Company, the Company's transfer agent, as to the number of
issued and outstanding shares of the Company.
We have, without independent investigation, relied upon the representations
and warranties of the various parties as to matters of objective fact contained
in the Documents.
We have not made any independent review or investigation of orders,
judgments, rules or other regulations or decrees by which the Company or any of
its property may be bound, nor have we made any independent investigation as to
the existence of actions, suits, investigations or proceedings, if any, pending
or threatened against the Company.
With your concurrence, the opinions hereafter expressed, whether or not
qualified by language
<PAGE> 2
such as "to our knowledge," are based solely upon (1) our review of the
Documents and (2) such review of published sources of law as we have deemed
necessary.
This firm, in rendering legal opinions, customarily makes certain
assumptions which are described in Schedule A hereto. In the course of our
representation of the Company in connection with preparation of the Registration
Statement, nothing has come to our attention which causes us to believe reliance
upon any of those assumptions is inappropriate, and, with your concurrence, the
opinions hereafter expressed are based upon those assumptions.
We express no legal opinion upon any matter other than that explicitly
addressed in the second following paragraph, and our express opinion therein
contained shall not be interpreted to be an implied opinion upon any other
matter.
Our opinion contained herein is limited to the Delaware General Corporation
Law and the Federal law of the United States of America.
Based upon and subject to the foregoing, we are of the opinion that the
Shares have been duly authorized and, when issued and delivered in accordance
with the terms of the Warrants, will be validly issued, fully paid and
non-assessable.
We understand that this opinion is to be used in connection with the
Registration Statement. We consent to the filing of this opinion as an Exhibit
to said Registration Statement and to the reference to our firm wherever it
appears in the Registration Statement, including the prospectus constituting a
part thereof and any amendments thereto. This opinion may be used in connection
with the offering of the Shares only while the Registration Statement, as it may
be amended from time to time, remains effective under the Act.
Very truly yours,
BROWN, RUDNICK, FREED & GESMER
By: BROWN, RUDNICK, FREED & GESMER, P.C., a Partner
By: /S/ David H. Murphree
--------------------------------------------
David H. Murphree, A Member
Duly Authorized
DHM/SRL/MRF
2
<PAGE> 3
SCHEDULE A
BROWN, RUDNICK, FREED & GESMER
STANDARD ASSUMPTIONS
-------------------------------
In rendering legal opinions in third party transactions, Brown, Rudnick,
Freed & Gesmer makes certain customary assumptions described below:
1. Each natural person executing any of the Documents has sufficient
legal capacity to enter into such Documents and perform the
transactions contemplated thereby.
2. The Company holds requisite title and rights to any property
involved in the transactions described in the Documents and
purported to be owned by it.
3. Each person other than the Company has all requisite power and
authority and has taken all necessary corporate or other action
to enter into those Documents to which it is a party or by which
it is bound, to the extent necessary to make the Documents
enforceable against it.
4. Each person other than the Company has complied with all legal
requirements pertaining to its status as such status relates to
its rights to enforce the Documents against the Company.
5. Each Document is accurate, complete and authentic, each original is
authentic, each copy conforms to an authentic original and all
signatures are genuine.
6. All official public records are accurate, complete and properly
indexed and filed.
7. There has not been any mutual mistake of fact or misunderstanding,
fraud, duress, or undue influence by or among any of the parties
to the Documents.
8. The conduct of the parties to the transactions described in
the Documents has complied in the past and will comply in the
future with any requirement of good faith, fair dealing and
conscionability.
9. Each person other than the Company has acted in good faith and
without notice of any defense against the enforcement of any
rights created by, or adverse claim to any property or security
interest transferred or created as part of, the transactions
described in the Documents.
10. There are no agreements or understandings among the parties to or
bound by the Documents, and there is no usage of trade or course
of prior dealing among such parties, that would define, modify,
waive, or qualify the terms of any of the Documents.
11. The Company will not in the future take any discretionary action
(including a decision not to act) permitted under any Document
that would result in a violation of law or constitute a breach or
default under that or any other Document or court or
administrative orders, writs, judgments and decrees that name the
Company and are specifically directed to it or its property.
12. The Company will obtain all permits and governmental approvals not
required at the time of the closing of the transaction
contemplated by the Documents but which are subsequently
required, and will take all actions similarly required, relevant
to subsequent consummation of the transaction contemplated by the
Document or performance of the Documents.
13. All parties to or bound by the Documents will act in accordance
with, and will refrain from taking any action that is forbidden
by, the terms and conditions of the Documents.
3
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this Registration Statement of our report dated March 10, 2000,
included in American Biogenetic Sciences, Inc.'s Form 10-K for the year ended
December 31, 1999, and to all references to our firm included in this
Registration Statement.
/s/ Arthur Andersen LLP
Melville, New York
May 1, 2000
