UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D/A
(Amendment No. 2)
Under the Securities Exchange Act of 1934
LIDAK Pharmaceuticals
(Name of Issuer)
Class A Common Stock and Class B Common Stock
(Title of Class of Securities)
531707107
---------------------------------------------
(CUSIP Number)
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Dennis J. Doucette, Esq.
Steven J. Davis, Esq.
Luce, Forward, Hamilton & Scripps LLP
600 West Broadway, Ste. 2600
San Diego, California 92101
(619) 236-1414
(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications)
September 3, 1998
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box. __
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
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SCHEDULE 13D
CUSIP No. 531707107
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
David H. Katz, M.D.
SS# ###-##-####
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) __
(b) x
3 SEC USE ONLY
4 SOURCE OF FUNDS
Not applicable
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) __
Not applicable.
6 CITIZENSHIP OR PLACE OF ORGANIZATION
California
7 SOLE VOTING POWER
Class A Common Stock: 3,229,196
NUMBER OF Class B Common Stock: 385,000
SHARES
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY -0-
EACH
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON Class A Common Stock: 3,229,196
WITH Class B Common Stock: 385,000
10 SHARED DISPOSITIVE POWER
-0-
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
Class A Common Stock: 3,229,196
Class B Common Stock: 385,000
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES __
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
Class A Common Stock: 7.6%
Class B Common Stock: 88.7%
14 TYPE OF REPORTING PERSON
IN
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SCHEDULE 13D
FOR
DAVID H. KATZ, M.D.
This Amendment No. 2 amends and supplements the statement on Schedule
13D dated January 16, 1998, filed on behalf of David H. Katz, M.D., Amendment
No. 1 of the Schedule 13D dated March 16, 1998 filed on behalf of HealthMed,
Inc. ("HealthMed"), Mitchell J. Stein, David H. Katz, M.D., Wallace O.
Raubenheimer and George Rutland, and Amendment No. 1 dated March 30, 1998 filed
on behalf of David H. Katz, M.D., and relating to the Class A Common Stock and
Class B Common Stock issued by Lidak Pharmaceuticals ("LIDAK"), a California
corporation.
Item 1. Security and Issuer.
Securities: Class A common stock, no par value ("Class A Common Stock")
Class B common stock, no par value ("Class B Common Stock")
Issuer: LIDAK Pharmaceuticals
11077 N. Torrey Pines Road
La Jolla, California 92037
Item 2. Identity and Background. This Schedule 13D is filed on behalf of
David H. Katz, M.D.
a. Name: David H. Katz, M.D.
b. Business Address: 1775 La Jolla Rancho Road, La Jolla, California
92037.
c. Dr. Katz is a director of LIDAK.
d. During the last five years, Dr. Katz has not been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors).
e. During the last five years, Dr. Katz has not been a party to a civil
proceeding of a judicial or administrative body which resulted in a judgment,
decree or final order enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state securities laws or finding any
violation with respect to such laws.
f. Citizenship: Dr. Katz is a citizen of the United States.
Item 3. Source and Amount of Funds or Other Consideration.
Not applicable.
Item 4. Purpose of Transaction.
On August 27, 1998, David Katz, Lee Katz (the "Katz Parties") on the
one hand, and Mitchell J. Stein, HealthMed, Inc. ("HealthMed"), National Trust
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Properties, and the Trammel Trust (the "HealthMed Parties") on the other hand,
entered into a Settlement Agreement and Rescission (the "Settlement Agreement
and Rescission") whereby the Katz Parties and the HealthMed Parties agreed to
settle certain litigation between them relating to the Stock Purchase Agreement
(the "Katz Stock Purchase Agreement"), the Purchase Rights Agreement (the "Katz
Purchase Rights Agreement"), the Voting Trust agreement (the "Katz Voting Trust
Agreement") and the Promissory Note (the "Katz Promissory Note") (collectively,
the "Agreements") entered into between David Katz and HealthMed on January 12,
1998. Pursuant to the terms of the Settlement and Rescission Agreement and the
accompanying Judgment of Rescission and Dismissal ordered by the United States
District Court on August 28, 1998 and the request for dismissal with prejudice
filed by the parties with the Superior Court of San Diego on August 31, 1998
relating to the litigation, the Agreements have been rescinded in their entirety
and the Katz Parties and the HealthMed Parties have been restored to their
status quo ante with respect to all rights, privileges, interests, obligations
and preferences with respect to the subject matter of the Agreements, including,
but not limited to, all rights, privileges and preferences with respect to the
shares of Class A Common Stock and Class B Common Stock of Lidak. As part of a
separate agreement, the HealthMed Parties acquired 65,000 shares of Class A
Common Stock from the Katz Parties.
a. Not applicable.
b. Not applicable.
c. Not applicable.
d. Not applicable.
e. Not applicable.
f. Not applicable.
g. Not applicable.
h. Not applicable.
i. Not applicable.
j. Not applicable.
<PAGE>
Item 5. Interest in Securities of the Issuer.
a. Dr. Katz is the beneficial owner of 3,229,196 shares of Class A
Common Stock and 385,000 shares of Class B Common Stock. Dr. Katz may therefore
by deemed to beneficially own 7.6% of the Class A Common Stock outstanding and
88.7% of the Class B Common Stock outstanding. Pursuant to the Articles of
Incorporation of LIDAK, each share of Class A Common Stock entitles the holder
to one vote and each share of Class B Common Stock entitles the holder to five
votes upon any and all matters submitted to the shareholders of LIDAK for a
vote.
The calculation of the percentage of shares beneficially owned as of
the date hereof is based on LIDAK's Form 10-Q for the quarter ended June 30,1998
in which LIDAK reported there were 39,814,017 shares of Class A Common Stock
outstanding and 49,000 shares of Class B Common Stock outstanding as of August
13, 1998. The calculation gives effect to (i) Dr. Katz's exercise of his stock
options (the "Options") which grant to him the right to purchase 1,867,000
shares of Class A Common Stock, (ii) Dr. Katz's exercise of his options on June
1, 1998 to purchase 375,000 shares of Class B Common Stock, for which Dr. Katz
has has yet to receive Class B shares, (iii) Dr. Katz's exercise of his Class D
Warrants to purchase 386,190 shares of Class A Common Stock, (iv) Dr. Katz's
wife's exercise of options to purchase 10,000 shares of Class B Common Stock,
and (v) Dr. Katz's wife's exercise of options to purchase 46,903 shares of Class
A Common Stock, and results, for purposes of calculating the percent of class
beneficially owned by Dr. Katz in there being 41,124,110 shares of Class A
Common Stock issued and outstanding and 434,000 shares of Class B Common Stock
issued and outstanding. The Options are exercisable within 60 days. The
1,867,000 shares of Class A Common Stock underlying the Options are therefore
beneficially owned by Dr. Katz.
b. Dr. Katz has the sole power to vote and dispose of 3,182,293 shares
of Class A Common Stock and 375,000 shares of Class B Common Stock. Dr. Katz's
wife has the sole power to vote and dispose of 46,903 shares of Class A Common
Stock and 10,000 shares of Class B Common Stock.
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c. Not applicable.
d. Not applicable.
e. Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationship with Respect
to Securities of the Issuer.
The discussion herein regarding the (i) Katz Stock Purchase Agreement,
(ii) Katz Purchase Rights Agreement, (iii) Katz Voting Trust Agreement, (iv)
Katz Promissory Note, and (v) Settlement Agreement and Rescission is hereby
incorporated into this Item 6.
Item 7. Material to be Filed as Exhibits.
The following are incorporated by reference from the Schedule 13D filed
on behalf of Dr. Katz on January 16, 1998:
Exhibit 4.1: Katz Stock Purchase Agreement
Exhibit 4.2: Katz Purchase Rights Agreement
Exhibit 9.1: Katz Voting Trust Agreement
Exhibit 10.1: Katz Promissory Note
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The following are attached hereto as exhibits:
Exhibit 10.2: Settlement Agreement and Rescission
Signature
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: September 3, 1998
/s/ David H. Katz
-----------------------------------
David H. Katz, M.D.
<PAGE>
SETTLEMENT AGREEMENT AND RESCISSION
The parties to this Settlement Agreement and Rescission
("Agreement") are the following:
1. HealthMed Inc. ("HMI"), the named plaintiff in an action
pending in United States District Court (Central District), Case No. CV-98-
3674-CM(BQRx), and a named defendant and cross-complainant in San Diego Superior
Court Case No. 719747;
2. David Katz and Lee Katz, the named plaintiffs and cross-
defendants in an action pending in San Diego Superior Court, Case No.
719747;
3. National Trust Properties, the Trammel Trust, and Mitchell
J. Stein, the named defendants in an action pending in San Diego Superior Court,
Case No. 719747;
4. HealthMed Inc, National Trust Properties, the Trammel
Trust, and Mitchell J. Stein, shall all hereinafter be referred to collectively
as the "HMI Parties"; and
5. David Katz and Lee Katz shall all hereinafter be referred
to collectively as the "Katz Parties."
6. The following persons and entities are not parties to this
Agreement and are not third party beneficiaries to this Agreement: Medical
<PAGE>
Biology Institute, Cynthia Thornton, Christopher McKellar, the attorneys of
record of the above referenced actions and their retained experts and staff.
WHEREAS, it is the desire of the parties to this Agreement to
settle, once and forever, all disputes which have arisen between them.
NOW, THEREFORE, for and in consideration of the mutual
promises and undertakings herein set forth, the parties agree as follows:
7. The Katz Parties shall file a dismissal with prejudice,
regarding all HMI Parties, in all actions now pending in any court, including,
but not limited to Federal Case Nos. CV-98-3674-CM(BQRx) and Superior Court Case
No. 719747;
8. The HMI Parties shall file a dismissal with prejudice,
regarding all Katz Parties, in all actions now pending in any court, including,
but not limited to Federal Case Nos. CV-98-3674-CM(BQRx) and Superior Court Case
No. 719747;
9. The Katz Parties shall be relieved of any obligation to pay
any sanction, or to comply with any discovery order, in Federal Case No. CV-
98-3674-CM(BQRx) and Superior Court Case No. 719747;
10. The HMI Parties, through their counsel of record, shall
immediately inform the Superior Court and the Federal Court, by formal written
notice, that all pending motions, wherein relief is being sought against
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the Katz Parties, in Federal Case No. CV-98-3674-CM(BQRx) and Superior Court
Case No. 719747, are hereby withdrawn. The HMI Parties shall provide the Katz
Parties with a copy of the formal written notice when filed.
11. David Katz, Lee Katz, and HealthMed Inc. will execute and
file a stipulation with the United States District Court, Case No. CV-98-3674-
CM(BQRx), providing for the rescission of the various agreements between the
Katz Parties and HealthMed Inc., including, but not limited to, the Stock
Purchase Agreement, the Purchase Rights Agreement, the Voting Trust Agreement
and the Promissory Note. (Collectively the "Agreements"). David Katz, Lee Katz,
and HealthMed Inc. agree and stipulate that this rescission shall confirm all
rights to David Katz and Lee Katz, appertaining to the Lidak Shares that they
held prior to entry into the Agreements with HealthMed Inc., including, but not
limited to, all rights, privileges, and preferences of David Katz and Lee Katz
as holders of class "B" Lidak shares. Said stipulation is attached hereto as
Exhibit A.
12. The HMI Parties shall execute all documents necessary to
confirm the Katz Parties' ownership in the Lidak Shares subject to rescission,
including derivative shares, and the HMI Parties shall cooperate in
communicating with brokers, the Securities and Exchange Commission, Lidak
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Pharmaceuticals, and all other persons for the purposes of insuring the transfer
of said Lidak Shares into the name, account, and control of the Katz Parties.
13. Each party, i.e. the Katz Parties and the HMI Parties,
agree that they are relieved of all restrictions, orders, and prohibitions
arising from the various preliminary injunctions issued by the San Diego
Superior Court, and, accordingly, the Katz Parties and the HMI Parties are free
to dispose of their respective interest in Lidak Shares, under the terms of the
global settlement, in any manner they see fit.
14. Each party, i.e. the Katz Parties and the HMI Parties,
does hereby release, acquit and forever discharge each other party, their
successors, predecessors, subsidiaries, affiliates, parents, shareholders,
partners, employees, agents, officers, directors, biologic relatives (including
children), spouses, and insurers from any and all claims, expenses, debts,
demands, costs, contracts, liabilities, obligations, actions and causes of
action of every nature, under any theory of law, whether common, constitutional,
statutory or other of any jurisdiction, foreign or domestic, whether known or
unknown, whether in law or in equity, which they have or had or may claim to
have against any of them by reason of any and all matters from the beginning of
time to the present, except that this release shall in no way benefit or release
such claims against the Medical Biology Institute, Cynthia Thornton, Christopher
McKellar,
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<PAGE>
the attorneys of record of the above referenced actions and their retained
experts and staff.
15. Each party expressly waives any and all rights under
Section 1542 of the Civil Code of the State of California, and any like
provision or principal of common law in any foreign jurisdiction. Section 1542
provides as follows:
"A general release does not extend to claims which the
creditor does not know or suspect to exist in her favor at the
time of executing the release, which if known by him must have
materially affected his settlement with the debtor." Thus,
notwithstanding the provisions of Section 1542, and for the
purpose of implementing a full and complete release and
discharge of all parties to this Agreement and others released
herein, each party expressly acknowledges that this Agreement
is intended to include in its effect, without limitation,
claims and causes of action which he or she does not know or
suspect to exist in their favor at the time of execution
hereof, and that this Agreement contemplates extinguishment of
all such claims and causes of action.
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16. This Agreement, and any other agreement executed between
the parties as a part of this global settlement, shall be and constitutes full,
complete, unconditional and immediate substitution for any and all rights,
claims, demands and causes of actions whatsoever which heretofore existed or
might have existed on behalf of the Katz Parties and the HMI Parties against
each other.
17. All parties to this Agreement warrant and represent that
they have not assigned or in any way conveyed, transferred or encumbered all or
any portion of the claims or rights covered by this Agreement.
18. This Agreement effects the settlement of any disputes
between the parties which are denied and contested, and nothing contained herein
should be construed as an admission by any party of any liability of any kind
with respect thereto. All such liability is expressly denied.
19. All parties to this Agreement have carefully read and
fully understand all of the provisions of this Agreement, have consulted with
any representative with whom they desire to do so, and represent that they are
entering into this Agreement voluntarily.
20. This Agreement, and its terms, are confidential and shall
not be disclosed by the Katz Parties or the HMI Parties to any third party,
without a valid subpoena or court order, except that, the terms of this
Agreement may
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be disclosed to the legal counsel representing the parties hereto and may be
disclosed as necessary or required in connection with filings with Securities &
Exchange Commission.
21. This Agreement shall be construed in accordance with, and
governed by, the laws of the State of California.
22. This Agreement is the only, sole, entire and complete
agreement of the parties relating in any way to the subject matter hereof,
except that, the parties will be concurrently executing another writing
reflecting other terms of their global settlement. No statements, promises or
representations have been made by any party to any other, or relied upon, and no
consideration has been offered, promised, expected or held out other than as may
be expressly provided herein, or in other agreements executed concurrently. The
parties to this Agreement promise never to assert that this Agreement was
induced by fraud, deceit, or that it resulted from negligent misrepresentation,
mistake or duress. The parties to this Agreement waive all such claims.
23. In the event that any provision of this Agreement shall be
held to be void, voidable or unenforceable, the remaining portions hereof shall
remain in full force and effect.
24. This Agreement may be executed and delivered in two or
more counterparts, each of which when so executed and delivered shall be the
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original, but such counterparts together shall constitute but one and the same
instrument. This agreement shall be fully enforceable and binding if executed by
facsimile, and facsimile said signatures shall be sufficient to enforce this
agreement in any judicial proceeding.
25. The parties consent to the court in this matter retaining
jurisdiction over the parties for the limited purpose of enforcing this
Agreement, and, the parties agree and consent to entry of a judgment on this
Agreement if any party defaults on his or its obligations under this settlement.
IN WITNESS WHEREOF, the parties have executed this instrument
on the dates indicated below.
DATED:______________ _____________________________
David Katz
DATED:______________ _____________________________
Lee Katz
DATED:______________ _____________________________
Mitchell J. Stein
DATED:______________ _____________________________
HealthMed Inc.
DATED:______________ _____________________________
National Trust Properties
DATED:______________ _____________________________
Trammel Trust
8
