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As filed with the Securities and Exchange Commission on February 6, 1996
Registration No. 33-__________
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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ADVANCED POLYMER SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 94-2875566
(State or other jurisdiction of (I.R.S. employer identification
incorporation or organization) number)
3696 HAVEN AVENUE, REDWOOD CITY, CALIFORNIA 94063 (415) 366-2626
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
MICHAEL P.J. O'CONNELL
3696 HAVEN AVENUE, REDWOOD CITY, CALIFORNIA 94063
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
with copies of all orders, notices and communications to:
Richard A. Peers
Heller, Ehrman, White & McAuliffe
525 University Avenue, Palo Alto, California 94301 (415) 324-7000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the Registration Statement becomes effective.
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If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. / /
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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/
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CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED BE REGISTERED PER SHARE PRICE REGISTRATION FEE
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Common Stock, $.01 par value 740,950 $7.75 (1) $5,742,362.50 (1) $1,980 (1)
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Common Stock, $.01 par value 197,500 $7.00 (2) $1,382,500.00 (2) $ 477
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TOTAL: 938,450 - $7,124,862.50 $2,457
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(1) Estimated solely for purpose of computing the amount of the registration
fee based on the average of the high and low prices of the Common Stock on
the Nasdaq National Market on February 5, 1996, as reported in The Wall
Street Journal.
(2) Calculated using as the offering price the exercise price of warrants
pursuant to which such shares may be issued by the Registrant.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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PROSPECTUS 938,450 SHARES, INCLUDING 740,950 SHARES
BEING SOLD BY THE SELLING STOCKHOLDERS AND
197,500 SHARES ISSUABLE ON EXERCISE OF OUTSTANDING
WARRANTS TO PURCHASE COMMON STOCK AT A PRICE OF
$7.00 PER SHARE (THE "WARRANTS")
ADVANCED POLYMER SYSTEMS, INC.
Of the 938,450 shares (the "Shares") of Common Stock, $.01 par value,
(the "Common Stock") of Advanced Polymer Systems, Inc. (the "Company" or "APS")
covered by this prospectus (the "Prospectus), 197,500 Shares may be sold by the
Company on exercise of warrants ("Warrants") to purchase Common Stock and
740,950 Shares may be sold by the holders of Shares (collectively, the "Selling
Stockholders") named in this Prospectus. See "Selling Stockholders." The
Company will not receive any of the proceeds from the sale of Shares by the
Selling Stockholders; however, the Company could receive up to $1,382,500 on
the exercise of the Warrants.
The Company has not made any underwriting arrangements with respect to
the Shares issuable on exercise of the Warrants. The Company's Common Stock is
traded on the Nasdaq National Market under the symbol "APOS". On February 5,
1996, the closing price for the Common Stock, as reported on the Nasdaq
National Market, was $7.50.
Shares covered by this Prospectus may be offered for sale from time to
time by the Selling Stockholders at such prices and on such terms as may then
be obtainable, in negotiated transactions, or otherwise. See "Plan of
Distribution." This Prospectus may be used by the Selling Stockholders or by
any broker-dealer who may participate in sales of securities covered hereby.
The Selling Stockholders and the brokers and dealers through whom such sales
are effected may be deemed to be underwriters under the Securities Act of 1933,
as amended (the "Securities Act"). The Selling Stockholders will pay all
commissions, transfer taxes, and other expenses associated with the sales of
securities by them. The Company has paid the expenses of the preparation of
this Prospectus. The Company has agreed to indemnify the Selling Stockholders
against certain liabilities, including liabilities arising under the Securities
Act.
APS has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement under the Securities Act with respect to
the securities offered by this Prospectus. As permitted by the rules and
regulations of the commission, this Prospectus does not contain all of the
information set forth in the Registration Statement and the exhibits and
schedules thereto. For further information with respect to APS and the
securities offered hereby, reference is made to the Registration Statement and
the exhibits thereto, which may be examined without charge at the public
reference facilities maintained by the Commission at Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549, and copies of which may be obtained from
the Commission upon payment of the prescribed fees.
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SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK.
(See "RISK FACTORS.")
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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The date of this Prospectus is _______________, 1996
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No dealer, salesman, or any other person has been authorized to give
any information or to make any representations or projections of future
performance other than those contained in this Prospectus, and any such other
information, projections, or representations, if given or made, must not be
relied upon as having been so authorized. The delivery of this Prospectus or
any sale hereunder at any time does not imply that the information herein is
correct as of any time subsequent to its date. This Prospectus does not
constitute an offer to sell or a solicitation of an offer to buy any of the
securities offered hereby in any jurisdiction where, and to any person to whom,
it is unlawful to make such offer or solicitation.
AVAILABLE INFORMATION
This Prospectus omits certain of the information contained in the
Registration Statement covering the Common Stock that is on file with the
Securities and Exchange Commission (the "Commission"). The Company is subject
to the informational requirements of the Securities Exchange Act of 1934, as
amended (the "1934 Act") and in accordance therewith files reports, proxy
statements and other information with the Commission. Such Registration
Statement, reports, proxy statements and other information can be inspected and
copied at public reference facilities maintained by the Commission at Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. Copies of such
material can be obtained at prescribed rates from the Public Reference Section
of the Commission at such address. Such reports, proxy statements and other
information can also be inspected at the Commission's regional offices at 7
World Trade Center, Suite 1300, New York, New York 10048 and 500 West Madison,
Chicago, Illinois 60661, and at the offices of the Nasdaq Stock Market at 9513
Key West Avenue, Rockville, Maryland 20850-3389.
DOCUMENTS INCORPORATED BY REFERENCE
There are hereby incorporated in this Prospectus by reference the
following documents filed pursuant to the 1934 Act: (i) the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1994; (ii) the
Company's Quarterly Reports on Form 10-Q for the fiscal quarters ended March
31, 1995, June 30, 1995 and September 30, 1995; (iii) the Company's Proxy
Statement for the Annual Meeting of Shareholders held on June 14, 1995; and
(iv) the description of the Company's securities contained in its Form 8-A
Registration Statements filed pursuant to Section 12 of the 1934 Act.
All documents filed by the Company pursuant to Section 13(a), 13(c),
14 or 15(d) of the 1934 Act after the date of this Prospectus and prior to the
termination of the offering of the securities offered hereby shall be deemed to
be incorporated by reference in this Prospectus.
The Company hereby undertakes to provide without charge to each
person, including any beneficial owner, to whom a copy of this Prospectus has
been delivered, upon the written or oral request of such person, a copy of any
or all of the documents referred to above which have been or may be
incorporated in this Prospectus by reference, other than exhibits to such
documents which are not specifically incorporated by reference into the
information that this Prospectus incorporates. Requests for such copies should
be directed to: Advanced Polymer Systems, Inc., 3696 Haven Avenue, Redwood
City, California 94063, Attention: Investor Relations, Telephone: (415)
366-2626.
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RECENT DEVELOPMENTS
The Company has filed two new drug application ("NDA") with the U.S.
Food and Drug Administration and is awaiting final action by the FDA on these
applications. The first NDA covers a melanin-based sunscreen product for the
Company's own portfolio and the second NDA covers a prescription acne
preparation licensed to Ortho McNeil Pharmaceuticals (a Johnson & Johnson
subsidiary).
During the third and fourth quarters of 1995, the Company received
cash infusions of $7.8 million in the form of bank borrowing of $3.0 million, a
sale/leaseback transaction for $3.15 and subordinated debt of $1.65 million.
RISK FACTORS
The Shares of Common Stock offered hereby by the Selling Stockholders
involve a high degree of risk and prospective purchasers should carefully
consider the following factors.
History of Losses. The Company has incurred cumulative losses through
September 30, 1995 of approximately $57 million, of which approximately $5.0
million was incurred in the nine months ended September 30, 1995, and
anticipates that losses will continue for at least the next 12 months as the
Company continues research, development, production and marketing activities.
There can be no assurance that future revenues from product sales will be
significant, that the Company will be able to sell products at a profit or that
the Company will become profitable.
Capital Resources. On September 30, 1995, the Company had $6.6
million in cash, cash equivalents and short-term marketable securities. In the
nine months ended September 30, 1995, cash of approximately $5.9 million was
used by operations. The Company's existing cash, cash equivalents and
short-term marketable securities, collections of trade accounts receivable,
interest income and funds generated from operations, are expected to be
sufficient to meet the Company's near-term cash requirements assuming no
changes to existing business plans. However, if the Company's costs are higher
than expected or revenues do not meet expectations, the Company may have to
pursue other opportunities to generate additional cash to sustain and develop
its business, including joint ventures, licensing and other debt and equity
financings. If such additional funding is required, but is unavailable on
commercially reasonable terms, the Company would have to significantly reduce
operating expenses, which could adversely affect operations.
New Technology; No Proof of Market Acceptance. The Company's
Microsponge(R) products are based on relatively new technologies. The Company
has successfully entrapped numerous ingredients and agents (such as sunscreens,
moisturizers, fragrances and oils) and believes its products provide greater
efficacy and increased functionality. However, commercialization of products
utilizing the Company's Microsponge delivery systems is only now beginning, and
there can be no assurance that such products will be successfully
commercialized by the Company or others.
Marketing. The Company is utilizing a combination of collaboration
agreements and independent efforts to market its Microsponge products. The
collaborative arrangements are intended to provide APS with the marketing
expertise and/or financial strength of other companies. There can be no
assurance that such collaborative arrangements will prove successful in
marketing products on behalf of the Company. The Company markets four of its
own consumer products, as well as several consumer products produced by Johnson
& Johnson Consumer Products, Inc. ("Johnson & Johnson"), through its wholly
owned subsidiary Premier, Inc. ("Premier") which the Company acquired in April
1993. Premier has had a limited history in marketing certain over-the-counter
drug and toiletry products, and there can be no certainty that Premier will be
able to continue to successfully market products produced by the Company or
others.
Seasonality. The business of Premier is highly seasonal. Currently,
it principally markets and distributes sunscreen products, the sales of which
are heavily weighted to the first two fiscal quarters. Consequently, results
of operations for these interim periods are not necessarily indicative of
results for the full fiscal year.
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Dependence on Key Employees. The Company's developments to date and
in the future depend greatly on the efforts of key management and technical
employees. The loss of any of these key contributors could have an adverse
impact on the progress of the Company's business.
Inventory Build-Up. The Company's exclusive distribution arrangement
with Johnson & Johnson requires Premier to increase inventory levels at the
beginning of each year sufficient to satisfy anticipated demand for sunscreen
products during the selling season. Extended terms are given to the Company on
these products by Johnson & Johnson so that accounts payable are not due until
the third fiscal quarter. The Company offers similar extended terms to
retailers, and anticipates paying amounts owed to Johnson & Johnson from retail
accounts receivable.
Government Regulation. Certain of the Company's products are subject
to regulation by numerous national and local governmental authorities in the
United States and by like regulatory authorities in other countries where the
Company intends to test and market pharmaceutical products that it may develop.
The regulatory process, which includes preclinical testing and clinical trials
to establish product safety and efficacy, can take many years and require the
expenditure of substantial resources. There can be no assurance that even
after such time and expenditure, regulatory agency approvals will be obtained.
Moreover, if regulatory agency approval of a product is granted, such approval
may entail limitations on the indicated uses for which the product may be
marketed. Further, even if such regulatory approval is obtained, a marketed
product and its manufacture are subject to continued review by regulatory
authorities.
In addition, although personal care products are not currently subject
to active regulation by the FDA in the same manner as pharmaceutical products,
more extensive regulation could occur in the future. Such regulation could
impose additional costs on the Company or slow the introduction of personal
care products utilizing the Company's delivery systems.
Competition, Markets and Technological Change. Other companies are
developing products based on enhanced delivery technologies for cosmetic,
therapeutic and industrial applications, and technological developments are
expected to occur at a rapid pace. There can be no assurance that other
technologies will not prove superior to the Company's technology. APS is in
competition with other companies that possess greater financial and technical
resources, manufacturing and marketing capabilities, and experience in testing
and obtaining any necessary regulatory approval. The Company also competes
with many companies, most with greater financial resources, in marketing
over-the-counter personal care products.
Manufacturing. Products utilizing the Company's Microsponge delivery
systems must be manufactured at a competitive cost in far greater quantities
than now produced by the Company. The Company has a manufacturing facility in
Lafayette, Louisiana, and research laboratory and pilot plant facilities in
Lafayette, Louisiana and in Redwood City, California. The Company's
manufacturing capacity is currently 750,000 to 1,000,000 pounds a year, but
successful commercialization of certain products may require manufacturing in
quantities exceeding the Company's current capacity. The Company believes it
can increase its manufacturing capacity through installation of additional
equipment, but there can be no assurance that the Company will be able to
achieve the requisite increase in manufacturing capacity within the time and at
a cost commensurate with effective product commercialization.
Patents and Trade Secrets. There can be no assurance that any patents
owned or controlled by APS will provide commercially significant protection of
the Company's technology or ensure that the Company may not be determined to
infringe valid patents of others. The Company's patents have not been tested
in court, and the validity and scope of the Company's proprietary rights could
be challenged. The Company has also received foreign patents, but since the
patent laws of foreign countries differ from those of the United States, the
degree of protection afforded by any foreign patents may be different from that
available under U.S. patent laws.
The Company also relies on trade secrets and proprietary know-how
which it seeks to protect by confidentiality agreements with its collaborators,
employees and consultants. There can be no assurance that these agreements
will not be breached, that the Company will have adequate remedies for any
breach or that the Company's trade secrets and proprietary know-how will not
otherwise become known or be discovered by competitors.
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Possible Volatility of Stock Price; Shares Eligible for Future Sale.
The market price of the Company's Common Stock has been and may continue to be
highly volatile. Future events, many of which will be beyond the control of
the Company, as well as expected quarterly fluctuations in revenues and
financial results, may have a significant impact on the market price of the
Company's Common Stock. Future sales of Shares by the Selling Stockholders or
by other current stockholders and by option holders and warrant holders who
exercise Company stock options or warrants could have a depressive effect on
the market price of the Company's Common Stock.
Reliance on Collaborators. The Company has entered into collaborative
agreements with certain major corporations pursuant to which such companies are
entitled to certain product and marketing rights. The Company also expects to
rely, at least in part, on additional collaborative agreements to develop and
commercialize certain future products. There can be no assurance that the
Company will be able to negotiate acceptable collaborative agreements in the
future, or that the Company's existing collaborative agreements or such future
collaborative agreements will be successful.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the
Shares by the Selling Stockholders. The Company could receive up to $1,382,500
if the Warrants are exercised in full. No assurance can be given that any of
the Warrants will be exercised. The Company expects that any net proceeds from
the exercise of the Warrants will be used for working capital and general
corporate purposes, including product development and marketing. Pending
utilization, such funds will be invested in money market and other short-term
interest bearing obligations.
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SELLING STOCKHOLDERS
The following table sets forth certain information regarding
beneficial ownership of the Company's Common Stock by the Selling Stockholders
as of January 31, 1996 and as adjusted to reflect the sale by Selling
Stockholders of Shares offered by them by this Prospectus.
Common Stock Common Stock
Beneficially Owned Beneficially Owned
Prior to Offering (1) Common After Offering
--------------------- Stock --------------
to be
Number Percent Sold Number Percent
------ ------- ---- ------ -------
Johnson & Johnson
Development Corporation
One Johnson & Johnson Plaza
New Brunswick, NJ 08933 2,355,107 (2) 13.7% 432,101 1,923,006 (2) 11.2%
Dow Corning Corporation 200,000 1.2% 200,000 0 -
BioSource Technologies Inc. 94,000 * 94,000 0 -
Cupertino National Bank 36,674 (3) * 4,174 32,500 (3) *
Mees Pierson 10,675 * 10,675 0 -
TOTAL: 2,696,456 15.7% 740,950 1,955,506 11.4%
________________________________
* Less than 1%.
(1) Applicable percentage of ownership is based on 17,222,492 shares of
Common Stock outstanding as of January 31, 1996.
(2) Includes 200,000 shares of Common Stock issuable on exercise of a
warrant.
(3) Includes 32,500 shares of Common Stock issuable on exercise of a
warrant.
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PLAN OF DISTRIBUTION
All or a portion of the Shares of Common Stock offered hereby by the
Selling Stockholders may be delivered and/or sold in transactions from time to
time on the over-the-counter market at prices prevailing at the time, at prices
related to such prevailing prices or at negotiated prices and/or may also be
used to cover any short positions previously established. The Selling
Stockholders may effect such transactions by selling to or through one or more
broker-dealers, and such broker-dealers may receive compensation in the form of
underwriting discounts, concessions or commissions from the Selling
Stockholders. The Selling Stockholders and any broker-dealers that participate
in the distribution may under certain circumstances be deemed to be
"underwriters" within the meaning of the Securities Act, and any commissions
received by such broker-dealers and any profits realized on the resale of
Shares by them may be deemed to be underwriting discounts and commissions under
the Securities Act. The Selling Stockholders may agree to indemnify such
broker-dealers against certain liabilities, including liabilities under the
Securities Act. In addition, the Company has agreed to indemnify the Selling
Stockholders with respect to the Shares offered hereby against certain
liabilities, including, without limitation, certain liabilities under the
Securities Act, or, if such indemnity is unavailable, to contribute toward
amounts required to be paid in respect of such liabilities.
Any broker-dealer participating in such transactions as agent may
receive commissions from the Selling Stockholders (and, if they act as agent
for the purchaser of such Shares, from such purchaser). Broker-dealers may
agree with the Selling Stockholders to sell a specified number of Shares at a
stipulated price per share, and, to the extent such a broker-dealer is unable
to do so acting as agent for the Selling Stockholders, to purchase as principal
any unsold Shares at the price required to fulfill the broker-dealer commitment
to the Selling Stockholders. Broker-dealers who acquire Shares as principal
may thereafter resell such Shares from time to time in transactions (which may
involve crosses and block transactions and which may involve sales to and
through other broker-dealers, including transactions of the nature described
above) in the over-the-counter market, in negotiated transactions or otherwise
at market prices prevailing at the time of sale or at negotiated prices, and in
connection with such resales may pay to or receive from the purchasers of such
Shares commissions computed as described above. To the extent required under
the Securities Act, a supplemental prospectus will be filed, disclosing (a) the
name of any such broker-dealers, (b) the number of Shares involved, (c) the
price at which such Shares are to be sold, (d) the commissions paid or
discounts or concessions allowed to such broker-dealers, where applicable, (e)
that such broker-dealers did not conduct any investigation to verify the
information set out or incorporated by reference in this prospectus, as
supplemented, and (f) other facts material to the transaction.
The Selling Stockholders will pay all commissions, transfer taxes, and
other expenses associated with the sale of securities by them. The Shares
offered hereby are being registered pursuant to contractual obligations of the
Company, and the Company has paid the expenses of the preparation of this
Prospectus. The Company has not made any underwriting arrangements with
respect to the sale of Shares offered hereby on exercise of the Warrants. Upon
exercise of Warrants, the Shares will be issued by the Company directly to the
persons exercising the Warrants.
DESCRIPTION OF CAPITAL STOCK
As of the date of this Prospectus, the authorized capital stock of the
Company consists of 50,000,000 shares of $0.01 par value Common Stock ("Common
Stock") and 2,500,000 shares of $0.01 par value Preferred Stock ("Preferred
Stock").
COMMON STOCK
As of January 31, 1996, there were 17,222,492 shares of Common Stock
outstanding held of record by 644 stockholders. The holders of Common Stock
are entitled to one vote for each share held of record on all matters submitted
to a vote of the stockholders. Subject to preferences that may be applicable
to any outstanding Preferred Stock, holders of Common Stock are entitled to
receive ratably such dividends as may be declared by the Board of Directors out
of funds legally available therefor. In the event of a liquidation,
dissolution or winding up of the Company, holders of Common Stock are entitled
to share ratably in all assets remaining after payment of liabilities and the
liquidation preference of any outstanding Preferred Stock. Holders of Common
Stock have no preemptive rights, no
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right to convert their Common Stock into any other securities, and no right to
vote cumulatively for the election of directors. The outstanding shares of
Common Stock are fully paid and nonassessable.
The Company has not paid cash dividends on its Common Stock and does
not plan to pay any such dividends in the foreseeable future. Under certain
lending agreements, the Company is restricted from declaring or paying
dividends on its Common Stock.
PREFERRED STOCK
The Board of Directors may authorize the issuance of up to 2,500,000
shares of Preferred Stock in one or more series and fix the rights,
preferences, privileges and restrictions thereof, including dividend rights,
conversion rights, voting rights, terms of redemption, liquidation preferences
and the number of shares constituting any series or the designation of such
series, without any further vote or action by the stockholders. The issuance
of Preferred Stock may have the effect of delaying, deferring or preventing a
change in control of the Company without action by the shareholders and could
adversely affect the rights and powers, including voting rights, of the holders
of Common Stock. In certain circumstances, the issuance of Preferred Stock
could depress the market price of Common Stock. There are no shares of
Preferred Stock outstanding.
WARRANTS
Of the 938,450 Shares offered hereby, an aggregate of 197,500 Shares
are issuable upon exercise of warrants to purchase Common Stock. The exercise
prices of the Warrants is $7.00 per share. The warrants will remain
exercisable until March 27, 2000, except under certain circumstances. The
exercise price of the Warrants is subject to adjustment (i) in the event there
is a subdivision or combination of the outstanding shares of Company Common
Stock or (ii) if the Company declares dividends on its Common Stock payable in
Common Stock or other securities of the Company.
LEGAL MATTERS
The legality of the issuance of the securities being offered hereby is
being passed upon for the Company by Heller, Ehrman, White & McAuliffe, Palo
Alto, California. Mr. Julian Stern, a member of Heller, Ehrman, White &
McAuliffe, who is also the Secretary of the Company, owns beneficially 179,000
shares of Common Stock (including options and warrants).
EXPERTS
The consolidated financial statements and schedules of Advanced
Polymer Systems, Inc. and subsidiaries as of December 31, 1994 and 1993 and for
each of the years in the three-year period ended December 31, 1994 have been
incorporated by reference herein and in the related Registration Statement in
reliance upon the report of KPMG Peat Marwick LLP, independent certified public
accountants, incorporated by reference herein, and upon the authority of said
firm as experts in accounting and auditing. The report of KPMG Peat Marwick
LLP covering the December 31, 1994 consolidated financial statements refers to
a change in the method of accounting for certain investments in debt and equity
securities. To the extent that KPMG Peat Marwick LLP audits and reports on
consolidated financial statements of Advanced Polymer Systems, Inc. and
subsidiaries issued at future dates, and consents to the use of their report
thereon, such consolidated financial statements also will be incorporated by
reference in the Registration Statement in reliance upon their report and said
authority.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth various expenses in connection with the
sale and distribution of the securities being registered. All of the amounts
shown are estimates except for the Securities and Exchange Commission
Registration Fee.
Securities and Exchange Commission Registration Fee . . . . . . . . . $ 2,457
Accounting Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,000
Legal Fees and Disbursements . . . . . . . . . . . . . . . . . . . . 10,000
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . 543
-------
TOTAL: $18,000
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ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
The registrant has the power to indemnify its officers and directors
against liability for certain acts pursuant to Section 145 of the General
Corporation Law of the State of Delaware. Section B of Article VI of the
registrant's Certificate of Incorporation provides:
"(1) Right to Indemnification. Each person who was or is made a
party or is threatened to be made a party to or is involved in any action,
suit or proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact that he or she, or a
person of whom he or she is the legal representative, is or was a director
or officer, of the Corporation or is or was serving at the request of the
Corporation, as a director, officer, employee or agent of another
corporation or of a partnership, joint venture, trust or other enterprise,
including service with respect to employee benefit plans, whether the basis
of such proceeding is alleged action in an official capacity as a director,
officer, employee or agent or in any other capacity while serving as a
director, officer, employee or agent, shall be indemnified and held harmless
by the Corporation to the fullest extent authorized by the General
Corporation Law of the State of Delaware, as the same exists or may
hereafter be amended (but, in the case of any such amendment, only to the
extent that such amendment permits the Corporation to provide broader
indemnification rights than said law permitted the Corporation to provide
prior to such amendment), against all expense, liability and loss (including
attorneys' fees, judgments, fines, ERISA excise taxes or penalties and
amounts paid or to be paid in settlement) reasonably incurred or suffered by
such person in connection therewith and such indemnification shall continue
as to a person who has ceased to be a director, officer, employee or agent
and shall inure to the benefit of his or her heirs, executors and
administrators; provided, however, that, the Corporation shall indemnify any
such person seeking indemnification in connection with a proceeding (or part
thereof) initiated by such person only if such proceeding (or part thereof)
was authorized by the board of directors of the Corporation. The right to
indemnification conferred in this Section B shall be a contract right and
shall include the right to be paid by the Corporation the expenses incurred
in defending any such proceeding in advance of its final disposition;
provided, however, that, if the General Corporation Law of the State of
Delaware requires, the payment of such expenses incurred by a director or
officer in his or her capacity as a director or officer (and not in any
other capacity in which service was or is rendered by such person while a
director or officer, including, without limitation, service to an employee
benefit plan) in advance of the final disposition of a proceeding, shall be
made only upon delivery to the Corporation of an undertaking, by or on
behalf of such director or officer, to repay all amounts so advanced if it
shall ultimately be determined that such director of officer is not entitled
to be indemnified under this Section or otherwise. The Corporation may, by
action of its Board of Directors, provide indemnification to employees and
agents of the Corporation with the same scope and effect as the foregoing
indemnification of directors and officers.
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(2) Non-Exclusivity of Rights. The right to indemnification and
the payment of expenses incurred in defending a proceeding in advance of its
final disposition conferred in this Section B shall not be exclusive of any
other rights which any person may have or hereafter acquire under any
statute, provisions of this Certificate of Incorporation, Bylaw, agreement,
vote of stockholders or disinterested directors or otherwise.
(3) Insurance. The Corporation may maintain insurance, at its
expense, to protect itself and any director, officer, employee or agent of
the Corporation or another corporation, partnership, joint venture, trust or
other enterprise against any such expense, liability or loss, whether or not
the Corporation would have the power to indemnify such person against such
expense, liability or loss under Delaware General Corporation Law."
Registrant maintains directors' and officers' liability insurance in
the amount of $5,000,000 which covers civil liabilities. Such insurance helps
the Registrant to attract qualified officers and directors, by providing a
means for the Company to pay the costs and expenses involved in the event civil
litigation is brought against of one of the Registrant's officers or directors.
ITEM 16. EXHIBITS.
EXHIBIT DESCRIPTION
------- -----------
4.1 Investment Agreement between Registrant and Johnson &
Johnson Development Corporation dated May 13, 1994 (1)
4.2 Registration Rights Agreement between Registrant and Dow Corning
Corporation dated January 23, 1996
4.3 Form of Warrant to Purchase Common Stock issued to Cupertino
National Bank
4.4 Form of Warrant to Purchase Common Stock
5 Opinion of Heller, Ehrman, White & McAuliffe (2)
23.1 Consent of Heller, Ehrman, White & McAuliffe
(filed as part of Exhibit 5)
23.2 Consent of KPMG Peat Marwick LLP
24 Power of Attorney (See Page II-4)
_____________________
(1) Filed as Exhibit 4.3 to Registration Statement on Form S-3 (No.
33-82562) and incorporated herein by reference.
(2) To be filed by amendment.
ITEM 17. UNDERTAKINGS.
A. The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement;
(i) To include any prospectus required by section
10(a)(3) of the Securities Act of 1933;
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(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
Registration Statement;
(iii) To include any material information with respect
to the plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the Registration
Statement;
Provided, however, that paragraphs (i) and (ii) shall not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
section 13 or section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new Registration Statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
B. That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the registrant's annual report pursuant
to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offering therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
C. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the provisions described under Item 15
above, or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission, such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer
or controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted against the Registrant by such
Director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
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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 Redwood City, State of California, on the 6th day of
February, 1996.
ADVANCED POLYMER SYSTEMS, INC.
By: /S/ MICHAEL P.J. O'CONNELL
------------------------------------
Michael P.J. O'Connell
Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints John J. Meakem, Jr., Michael P.J.
O'Connell, or either of them, with the power of substitution, her or his
attorney in fact, to sign any amendments to this Registration Statement
(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 each of said
attorney-in-fact, or his substitute or 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 below by the following persons in the
capacities and on the dates indicated.
/S/ JOHN J. MEAKEM, JR. Chairman of the Board and President February 6, 1996
------------------------------------------ (Principal Executive Officer)
John J. Meakem, Jr.
/S/ MICHAEL P.J. O'CONNELL Chief Financial Officer February 6, 1996
------------------------------------------ (Principal Accounting Officer)
Michael P.J. O'Connell
/S/ JORGE HELLER Director February 6, 1996
------------------------------------------
Jorge Heller
/S/ HELEN C. LEONG Director February 6, 1996
------------------------------------------
Helen C. Leong
/S/ PETER RIEPENHAUSEN Director February 6, 1996
------------------------------------------
Peter Riepenhausen
/S/ TOBY ROSENBLATT Director February 6, 1996
------------------------------------------
Toby Rosenblatt
/S/ GREGORY H. TURNBULL Director February 6, 1996
------------------------------------------
Gregory H. Turnbull
/S/ DENNIS WINGER Director February 6, 1996
------------------------------------------
Dennis Winger
/S/ CARL W. EHMANN Director February 6, 1996
------------------------------------------
Carl W. Ehmann
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ADVANCED POLYMER SYSTEMS, INC.
EXHIBIT INDEX
EXHIBIT DESCRIPTION
------- -----------
4.1 Investment Agreement between Registrant and Johnson & Johnson
Development Corporation dated May 13, 1994 (1)
4.2 Registration Rights Agreement between Registrant and Dow Corning
Corporation dated January 23, 1996
4.3 Warrant issued to Cupertino National Bank
4.4 Form of Warrant to Purchase Common Stock
5 Opinion of Heller, Ehrman, White & McAuliffe (2)
23.1 Consent of Heller, Ehrman, White & McAuliffe
(included in Exhibit 5)
23.2 Consent of KPMG Peat Marwick LLP
24 Power of Attorney (See Page II-4)
_____________________
(1) Filed as Exhibit 4.3 to Registration Statement on Form S-3 (No.
33-82562) and incorporated herein by reference.
(2) To be filed by amendment.
1
EXHIBIT 4.2
REGISTRATION RIGHTS AGREEMENT
January 23, 1996
Advanced Polymer Systems, Inc., a Delaware corporation ("APS") and Dow
Corning Corporation, a Michigan corporation ("PURCHASER"), hereby agree as
follows:
RECITALS
A. APS is acquiring a polymer-based carrier system business from
PURCHASER, and in payment thereof is issuing 200,000 shares of its Common Stock
(the "Shares") to PURCHASER.
B. The parties wish to provide for the registration of the subsequent
resale of the Shares and for the orderly distribution thereof, all on the terms
and conditions hereof.
THE PARTIES AGREE AS FOLLOWS:
1. Registration Rights; Listing.
1.1 Certain Definitions. As used herein, the following terms
shall have the following respective meanings:
(a) "Commission" shall mean the Securities and Exchange
Commission or any other federal agency at the time administering the Securities
Act.
(b) "Convertible Securities" shall mean securities of APS
convertible into or exchangeable for Registrable Securities.
(c) "Holder" shall mean any holder of outstanding Registrable
Securities which have not been sold to the public, but only if such holder is
PURCHASER or an assignee or transferee of Registration rights as permitted by
Section 1.8.
2
(d) The terms "Registrar", "Registered" and "Registration" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act ("Registration Statement"), and the
declaration or ordering of the effectiveness of such Registration Statement.
(e) "Registrable Securities" shall mean the Shares issued to PURCHASER
by APS, together with any Common Stock issued with respect to the Shares
pursuant to stock splits, stock dividends and similar distributions, so long as
such securities have not been sold to the public in a public distribution or a
public securities transaction or sold in a single transaction exempt from the
registration and prospectus delivery requirements of the Securities Act such
that all transfer restrictions and restrictive legends with respect to such
Shares shall have been removed in connection with such sale.
(f) "Registration Expenses" shall mean all expenses incurred by APS in
complying with this Agreement, including, without limitation, all federal and
state registration, qualification and filing fees, printing expenses, fees and
disbursements of counsel for APS, blue sky fees and expenses, the expense of
any special audits incident to or required by any such Registration and any
expenses related to the maintenance of such Registration and qualification
during the period specified in Section 1.4(a) hereof.
(g) "Securities Act" shall mean the Securities Act of 1933, as
amended, or any similar federal statute, and the
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rules and regulations of the Commission thereunder, all as the same shall be in
effect at the time.
(h) "Selling Expenses" shall mean all underwriting discounts and
selling commissions applicable to the sale of Registrable Securities pursuant
to this Agreement.
1.2 Registration.
1.2.1 Registration. Subject to the terms of this Agreement, APS
shall use its best efforts to effect Registration of the Registrable Securities
within 60 days of their issuance to PURCHASER by filing as soon as possible
after the date hereof a Form S-3 Registration Statement (or any successor to
Form S-3) with the Commission.
1.2.2 Registration of Other Securities. Any Registration
Statement filed under this Section 1 may include securities of APS other than
Registrable Securities; provided, however, that neither PURCHASER or any Holder
shall be required to utilize an underwriter in connection with the sale of
their Registrable Securities.
1.2.3 Blue Sky. In the event of any Registration pursuant to
Section 1, APS will exercise its best efforts to Register and qualify the
securities covered by the Registration Statement under such other securities or
Blue Sky laws of such jurisdictions as shall be reasonably appropriate for the
distribution of such securities; provided, however, that:
(a) APS shall not be required to qualify to do business or
to file a general consent to service of process in
-3-
4
any such states or jurisdictions, unless APS is already subject to service in
such jurisdiction; and
(b) notwithstanding anything in this Agreement to the contrary,
in the event any jurisdiction in which the securities shall be qualified
imposes a non-waivable requirement that expenses incurred in connection with
the qualification of the securities be borne by selling shareholders, such
expenses shall be payable pro rata by selling shareholders.
1.3 Expenses of Registration. All Registration Expenses (but not
Selling Expenses) incurred in connection with the Registration pursuant to
Section 1 shall be borne by APS.
1.4 Registration Procedures. Whenever required under this Agreement to
effect the Registration of any securities of APS, subject to the other
provisions of this Agreement, APS shall, as expeditiously as reasonably
possible:
(a) Prepare and file with the Commission a Registration
Statement with respect to such securities in accordance with Section 1.2.1 and
use its diligent best efforts to cause such Registration Statement to become
effective as promptly as possible thereafter and to remain effective for a
period equal to the shorter of: (i) three years from the date of such
effectiveness; or (ii) until the distribution described in the Registration
Statement has been completed.
(b) Prepare and file with the Commission such amendments and
supplements to such Registration Statement and the prospectus used in
connection with such Registration Statement as may be necessary to comply with
the provisions of the Securities
-4-
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Act with respect to the disposition of all securities covered by such
Registration Statement.
(c) Furnish to the Holders participating in such
Registration and the underwriters, if any, of the securities being
Registered, such reasonable number of copies of the Registration Statement,
preliminary prospectus and final prospectus as they may request in order to
facilitate the public offering of such securities.
1.5 Additional Information Available. So long as the Registration
Statement is effective covering the resale of Shares owned by a Holder, APS
will furnish to the Holder(s):
(a) as soon as practicable after it becomes available (but
in the case of APS' Annual Report to Stockholders, within 120 days after the
end of each fiscal year of APS), one copy of: (i) its Annual Report to
Stockholders (which Annual Report shall contain financial statements audited
in accordance with generally accepted accounting principles by a national firm
of certified public accountants); (ii) if not included in substance in the
Annual Report to Stockholders, its Annual Report on Form 10-K; (iii) if not
included in substance in its Quarterly Reports to Stockholders, its
quarterly reports on Form 10-Q; and (iv) a full copy of the particular
Registration Statement covering the Shares (the foregoing, in each case,
excluding exhibits); and
(b) upon the reasonable request of a Holder, all exhibits
excluded by the parenthetical to subparagraph (a) (iv) of this Section 1.5;
-5-
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and APS, upon the reasonable request of a Holder, will meet with such Holder or
a representative thereof at APS' headquarters to discuss all information
relevant for disclosure in the Registration Statement covering the Shares and
will otherwise cooperate with any Holder conducting an investigation for the
purpose of reducing or eliminating such Holder's exposure to liability under
the Securities Act, including the reasonable production of information at APS'
headquarters.
1.6 Information Furnished by Holder. It shall be a condition
precedent of APS' obligations under this Agreement that each Holder of
Registrable Securities included in any Registration furnish to APS such
information regarding such Holder and the distribution proposed by such Holder
as APS may reasonably request.
1.7 Indemnification.
1.7.1 Company's Indemnification of Holder. APS will
indemnify and hold harmless each Holder, each of its officers, directors,
employees, agents, affiliates and constituent partners, and each person deemed
to be in control of such Holder within the meaning of Section 15 of the
Securities Act or Section 20 of the Securities Exchange Act of 1934 (the
"Exchange Act"), from and against all claims, losses, damages or liabilities
(or actions in respect thereof) to the extent such claims, losses, damages or
liabilities arise out of or are based upon any untrue statement (or alleged
untrue statement) of a material fact contained in any prospectus or other
document (including any related Registration Statement) incident to any
-6-
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such Registration, qualification or compliance, or are based on any omission
(or alleged omission) to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, or any
violation by APS of any rule or regulation promulgated under the Securities Act
applicable to APS and relating to action or inaction required of APS in
connection with any such Registration, qualification or compliance or arise out
of any failure by APS to fulfill an undertaking included in the Registration
Statement; and APS will reimburse each such Holder, each such underwriter and
each person who controls any such Holder or underwriter, for any legal and any
other expenses reasonably incurred in connection with defending any such claim,
loss, damage, liability or action; provided, however, that the indemnity
contained in this Section 1.7.1 shall not apply to amounts paid in settlement
of any such claim, loss, damage, liability or action if settlement is effected
without the consent of APS (which consent shall not unreasonably be withheld)
and; provided, further, that APS will not be liable in any such case to the
extent that any such claim, loss, damage, liability or expense arises out of or
is based upon any untrue statement or omission based upon written information
furnished to APS by such Holder or controlling person and stated expressly to
be for use in connection with the offering of securities of APS.
1.7.2 Holder's Indemnification of Company. Each Holder will indemnify
and hold harmless APS, each of its directors, officers, employees, agents and
affiliates, each
-7-
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person deemed to be in control of APS within the meaning of Section 15 the
Securities Act or Section 20 of the Exchange Act, and each other such Holder,
each of its officers, directors, employees, agents, affiliates and constituent
partners, and each person deemed to be in control of such other Holder within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act, from and against all claims, losses, damages and liabilities (or actions
in respect thereof) arising out of or based upon any untrue statement (or
alleged untrue statement) of a material fact contained in any such Registration
Statement, prospectus, offering circular or other document, or any omission (or
alleged omission) to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, or any
violation by such Holder of any rule or regulation promulgated under the
Securities Act applicable to such Holder and relating to action or inaction
required of such Holder in connection with any such Registration, qualification
or compliance; and will reimburse APS, such Holder, such directors, officers,
partners, persons or control persons for any legal and any other expenses
reasonably incurred in connection with defending any such claim, loss, damage,
liability or action, in each case to the extent, but only to the extent, that
such untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in such Registration Statement, prospectus, offering circular
or other document in reliance upon and in conformity with written information
furnished to APS by such Holder and specifically approved in writing by such
Holder for
-8-
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use in connection with the offering of securities of APS; provided, however,
that the indemnity contained in this Section 1.7.2 shall not apply with respect
to a Holder to amounts paid in settlement of any claim, loss, damage, liability
or action if settlement is effected without the consent of such Holder (which
consent shall not be unreasonably delayed or withheld).
1.7.3 Indemnification Procedure. Promptly after receipt by an
indemnified party under this Section 1.7 of notice of the commencement of any
action, such indemnified party will, if a claim in respect thereof is to be
made against an indemnifying party under this Section 1.7, notify the
indemnifying party in writing of the commencement thereof and, to the extent
reasonably possible, generally summarize such action. The indemnifying party
shall have the right to participate in and to assume the defense of such claim;
provided, however, that the indemnifying party shall be entitled to select
counsel for the defense of such claim with the approval of any parties entitled
to indemnification, which approval shall not be unreasonably withheld;
provided, further, that if either party reasonably determines that there may be
a conflict between the position of APS and a Holder in conducting the defense
of such action, suit or proceeding by reason of recognized claims for indemnity
under this Section 1.7, then counsel for such party shall be entitled to
conduct, or participate in, the defense to the extent reasonably determined by
such counsel to be necessary to protect the interest of such party and the
costs of such counsel shall be borne by the indemnifying party. The failure to
notify an
-9-
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indemnifying party promptly of the commencement of any such action, if
prejudicial to the ability of the indemnifying party to defend such action,
shall relieve such indemnifying party, to the extent so prejudiced, of any
liability to the indemnified party under this Section 1.7, but the omission so
to notify the indemnifying party will not relieve such party of any liability
that such party may have to any indemnified party otherwise other than under
this Section 1.7.
1.8 Transfer of Rights. The right to cause APS to Register securities
granted by APS to PURCHASER under this Agreement may be assigned by any Holder
to a transferee or assignee of any Registrable Securities not sold to the
public acquiring at least 25,000 shares of such Holder's Registrable Securities
(equitably adjusted for any stock splits, subdivisions, stock dividends,
changes, combinations or the like); provided, however, that:
(a) APS must receive written notice prior to the time of said
transfer, stating the name and address of said transferee or assignee and
identifying the securities with respect to which such information and
Registration rights are being assigned; and
(b) the transferee or assignee of such rights must not be a
person deemed by the Board of Directors of APS, in its best judgment, to be a
competitor or potential competitor of APS. Notwithstanding the limitations set
forth in the foregoing sentence respecting the minimum number of shares which
must be transferred and permitted transferees and assignees: (i) any
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Holder which is a partnership may transfer such Holder's Registration rights to
such Holder's constituent partners without restriction as to the number or
percentage of shares acquired by any such constituent partner; and (ii) Section
1.8(b) shall not prohibit the transfer or assignment of such rights to an
affiliate of the PURCHASER.
1.9 Nasdaq Listing. Prior to the effective date of a Registration of
any of the Shares, APS shall file an application with NASDAQ to list such
Shares for quotation on the Nasdaq National Market.
1.10 Delay in Effectiveness. In the event a Registration Statement
covering the Shares is not declared effective within ninety (90) days after the
date hereof or in the event the effectiveness of such Registration Statement is
suspended or terminated at any time subsequent to the 90th day after the date
hereof and prior to the termination of the period specified in Section 1.4(a)
hereof, APS shall pay to the Holders an amount equal to $275 per day for each
day such Registration Statement is not effective; provided that nothing herein
is intended to limit a Holder's ability to seek to enforce its rights to
require that a Registration Statement covering Shares remains effective during
the period specified in Section 1.4 hereof; and provided further that APS shall
not be required to make any payments to a Holder if the failure to obtain or
maintain an effective Registration Statement is solely attributable to a
Holder's failure to provide APS with
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information required to be provided by such Holder for inclusion in the
Registration Statement.
2. Miscellaneous.
2.1 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of California applicable to
contracts entered into and wholly to be performed within the State of
California by California residents.
2.2 Successors and Assigns. Subject to the exceptions
specifically set forth in this Agreement, the terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the respective
executors, administrators, heirs, successors and assigns of the parties.
2.3 Entire Agreement. This Agreement and the Asset Purchase
Agreement and the Exhibits and Schedules hereto and thereto constitute the
entire contract between APS and the PURCHASER relative to the subject matter
hereof. Any previous agreement between APS and the PURCHASER with respect to
the subject matter hereof is superseded by this Agreement.
2.4 Severability. Any invalidity, illegality or limitation of the
enforceability with respect to any Holder of any one or more of the provisions
of this Agreement, or any part thereof, whether arising by reason of the law of
any PURCHASER's domicile or otherwise, shall in no way affect or impair the
validity, legality or enforceability of this Agreement with respect to other
Holders. In case any provision of this Agreement shall be invalid, illegal or
unenforceable, it shall to the extent practicable, be modified so as to make it
valid, legal
-12-
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and enforceable and to retain as nearly as practicable the intent of the
parties, and the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
2.5 Amendment of Agreement. Any provision of this Agreement may
be amended only by a written instrument signed by APS and by PURCHASER.
2.6 Notices. Any notice required or permitted hereunder shall be given
in writing and shall be conclusively deemed effectively given upon personal
delivery, or five days after deposit in the United States mail, by registered
or certified mail, postage prepaid, addressed:
(a) if to APS, Advanced Polymer Systems, Inc., 3696 Haven
Avenue, Redwood City, California 94063, ATTENTION: President; and
(b) if to PURCHASER, Dow Corning Corporation, 2200 W. Salzburg
Road, Midland, Michigan 48686-0994, ATTENTION: General Counsel.
2.7 Headings. The headings of the Sections of this Agreement are for
convenience and shall not by themselves determine the interpretation of this
Agreement.
2.8 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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IT WITNESS WHEREOF, the parties have executed this Agreement.
ADVANCED POLYMER SYSTEMS, INC.
By:/s/ Michael O'Connell
---------------------------------
Michael O'Connell
Senior Vice President and CFO
DOW CORNING CORPORATION
By:/s/ William P. Cavanaugh
---------------------------------
William P. Cavanaugh
Commercial Unit Manager
Personal Household and
Automotive Products
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1
EXHIBIT 4.3
THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR
OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT
OR PURSUANT TO RULE 144 OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
CORPORATION AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.
WARRANT TO PURCHASE STOCK
Corporation: ADVANCED POLYMER SYSTEMS, INC., a Delaware corporation
Number of Shares: 32,500
Class of Stock: Common
Initial Exercise Price: $7.00 per share
Issue Date: September 27, 1995
Expiration Date: March 27, 2000
THIS WARRANT CERTIFIES THAT, for the agreed upon value of $1.00 and for
other good and valuable consideration, VENTURE LENDING ("Holder") is entitled to
purchase the number of fully paid and nonassessable shares of the class of
securities (the "Shares") of the corporation (the "Company") at the initial
exercise price per Share (the "Warrant Price") all as set forth above and as
adjusted pursuant to Article 2 of this Warrant, subject to the provisions and
upon the terms and conditions set forth of this Warrant.
ARTICLE 1. EXERCISE
1.1 Method of Exercise. Holder may exercise this Warrant by
delivering a duly executed Notice of Exercise in substantially the form attached
as Appendix 1 to the principal office of the Company. Unless Holder is
exercising the conversion right set forth in Section 1.2, Holder shall also
deliver to the Company a check for the aggregate Warrant Price for the Shares
being purchased.
1.2 Conversion Right. In lieu of exercising this Warrant as
specified in Section 1.1, Holder may from time to time convert this Warrant, in
whole or in part, into a number of Shares determined by dividing (a) the
aggregate fair market value of the Shares or other securities otherwise issuable
upon exercise of this Warrant minus the aggregate Warrant Price of such Shares
by (b) the fair market value of one Share. The fair market value of the Shares
shall be determined pursuant Section 1.4.
1.3 Fair Market Value. If the Shares are traded in a public market,
the fair market value of the Shares shall be the closing price of the Shares (or
the closing price of the Company's stock into which the Shares are convertible)
reported for the business day immediately before Holder delivers its Notice of
Exercise to the Company. If the Shares are not traded in a public market, the
Board of Directors of the Company shall determine fair market value in its
reasonable good faith judgment. The foregoing notwithstanding, if Holder advises
the Board of Directors in writing that Holder disagrees with such determination,
then the Company and Holder shall promptly agree upon a reputable investment
banking firm to undertake such valuation. If the valuation of such investment
banking firm is greater than that determined by the Board of Directors, then all
fees and
1
2
expenses of such investment banking firm shall be paid by the Company. In all
other circumstances, such fees and expenses shall be paid by Holder.
1.4 Delivery of Certificate and New Warrant. Promptly after Holder
exercises or converts this Warrant, the Company shall deliver to Holder
certificates for the Shares acquired and, if this Warrant has not been fully
exercised or converted and has not expired, a new Warrant representing the
Shares not so acquired.
1.5 Replacement of Warrants. On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of loss, theft or destruction, on delivery of an
indemnity agreement reasonably satisfactory in form and amount to the Company
or, in case of mutilation, or surrender and cancellation of this Warrant, the
Company at its expense shall execute and deliver, in lieu of this Warrant, a
new warrant of like tenor.
1.6 Repurchase on Sale, Merger, or Consolidation of the Company.
1.6.1 "Acquisition". For the purpose of this Warrant,
"Acquisition" means any sale, license, or other disposition of all or
substantially all of the assets of the Company, or any reorganization,
consolidation, or merger of the Company where the holders of the Company's
securities before the transaction beneficially own less than 50% of the
outstanding voting securities of the surviving entity after the transaction.
1.6.2 Assumption of Warrant. If upon the closing of any Acquisition
the successor entity assumes the obligations of this Warrant, then this Warrant
shall be exercisable for the same securities, cash, and property as would be
payable for the Shares issuable upon exercise of the unexercised portion of
this Warrant as if such Shares were outstanding on the record date for the
Acquisition and subsequent closing. The Warrant Price shall be adjusted
accordingly.
1.6.3 Nonassumption. If upon the closing of any Acquisition the
successor entity does not assume the obligations of his Warrant and Holder has
not otherwise exercised this Warrant in full, then the unexercised portion of
this Warrant shall be deemed to have been automatically converted pursuant to
Section 1.2 and thereafter Holder shall participate in the acquisition on the
same terms as other holders of the same class of securities of the Company.
1.6.4 Purchase Right. Notwithstanding the foregoing, at the election
of Holder, the Company shall purchase the unexercised portion of this Warrant
for cash upon the closing of any Acquisition for an amount equal to (a) the
fair market value of any consideration that would have been received by Holder
in consideration of the Shares had Holder exercised the unexercised portion of
this Warrant immediately before the record date for determining the
shareholders entitled to participate in the proceeds of the Acquisition, less
(b) the aggregate Warrant Price of the Shares, but in no event less than zero.
ARTICLE 2. ADJUSTMENTS TO THE SHARES
2.1 Stock Dividends, Splits, Etc. If the Company declares or pays a
dividend on its common stock (or the Shares if the Shares are securities other
than common stock) payable in common stock, or other securities, subdivides the
outstanding common
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stock into a greater amount of common stock, or, if the Shares are securities
other than common stock, subdivides the Shares in a transaction that increases
the amount of common stock into which the Shares are convertible, then upon
exercise of this Warrant, for each Share acquired, Holder shall receive,
without cost to Holder, the total number and kind of securities to which Holder
would have been entitled had Holder owned the Shares of record as of the date
the dividend or subdivision occurred.
2.2 Reclassification, Exchange or Substitution. Upon any
reclassification, exchange, substitution, or other event that results in a
change of the number and/or class of the securities issuable upon exercise or
conversion of this Warrant, Holder shall be entitled to receive, upon exercise
or conversion of this Warrant, the number and kind of securities and property
that Holder would have received for the Shares if this Warrant had been
exercised immediately before such reclassification, exchange, substitution, or
other event. Such an event shall include any automatic conversion of the
outstanding or issuable securities of the Company of the same class or series
as the Shares to common stock pursuant to the terms of the Company's Articles
of Incorporation upon the closing of a registered public offering of the
Company's common stock. The Company or its successor shall promptly issue to
Holder a new Warrant for such new securities or other property. The new Warrant
shall provide for adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Article 2 including, without
limitation, adjustments to the Warrant Price and to the number of securities or
property issuable upon exercise of the new Warrant. The provisions of this
Section 2.2 shall similarly apply to successive reclassifications, exchanges,
substitutions, or other events.
2.3 Adjustments for Combinations, Etc. If the outstanding Shares are
combined or consolidated, by reclassification or otherwise, into a lesser
number of shares, the Warrant Price shall be proportionately increased.
2.4 Adjustments for Diluting Issuances. The Warrant Price and the
number of Shares issuable upon exercise of this Warrant or, if the Shares are
Preferred Stock, the number of shares of common stock issuable upon conversion
of the Shares, shall be subject to adjustment, from time to time in the manner
set forth on Exhibit A in the event of Diluting Issuances (as defined on
Exhibit A).
2.5 No Impairment. The Company shall not, by amendment of its
Articles of Incorporation or through a reorganization, transfer of assets,
consolidation, merger, dissolution, issue, or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any
of the terms to be observed or performed under this Warrant by the Company, but
shall at all times in good faith assist in carrying out of all the provisions
of this Article 2 and in taking all such action as may be necessary or
appropriate to protect Holder's rights under this Article against impairment.
If the Company takes any action affecting the Shares or its common stock other
than as described above that adversely affects Holder's rights under this
Warrant, the Warrant Price shall be adjusted downward and the number of Shares
issuable upon exercise of this Warrant shall be adjusted upward in such a
manner that the aggregate Warrant Price of this Warrant is unchanged.
2.6 Fractional Shares. No fractional Shares shall be issuable upon
exercise or conversion of the Warrant and the number of Shares to be issued
shall be rounded down to the nearest whole Share. If a fractional share
interest arises upon any exercise or conversion of the Warrant, the Company
shall eliminate such fractional share interest by
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paying Holder amount computed by multiplying the factional interest by the fair
market value of a full share.
2.7 Certificate as to Adjustments. Upon each adjustment of
the Warrant Price, the Company at its expense shall promptly compute such
adjustment, and furnish Holder with a certificate of its Chief Financial Officer
setting forth such adjustment and the facts upon which such adjustment is based.
The Company shall, upon written request, furnish Holder a certificate setting
forth the Warrant Price in effect upon the date thereof and the series of
adjustments leading to such Warrant Price.
ARTICLE 3. REPRESENTATIONS AND COVENANTS OF THE COMPANY.
3.1 Representations and Warranties. The Company hereby represents
and warrants to the Holder as follows:
(a) All Shares which may be issued upon the exercise of the
purchase right represented by this Warrant, and all securities, if any,
issuable upon conversion of the Shares, shall, upon issuance, be duly
authorized, validly issued, fully paid and nonassessable, and free of any liens
and encumbrances except for restrictions on transfer provided for herein or
under applicable federal and state securities laws.
3.2 Notice of Certain Events. If the Company proposes at any time
(a) to declare any dividend or distribution upon its common stock, whether in
cash, property, stock, or other securities and whether or not a regular cash
dividend; (b) to offer for subscription pro rata to the holders of any class or
series of its stock any additional shares of stock of any class or series or
other rights; (c) to effect any reclassification or recapitalization of common
stock; (d) to merge or consolidate with or into any other corporation, or sell,
lease, license, or convey all or substantially all of its assets, or to
liquidate, dissolve or wind up; or (e) offer holders of registration rights the
opportunity to participate in an underwritten public offering of the company's
securities for cash, then, in connection with each such event, the Company
shall give Holder (1) at least 20 days prior written notice of the date on
which a record will be taken for such dividend, distribution or subscription
rights (and specifying the date on which the holders of common stock will be
entitled thereto) or for determining rights to vote, if any, in respect of the
matters referred to in (c) and (d) above; (2) in the case of the matters
referred to in (c) and (d) above at lease 20 days prior written notice of the
date when the same will take place (and specifying the date on which the
holders of common stock will be entitled to exchange their common stock for
securities or other property deliverable upon the occurrence of such event);
and (3) in the case of the matter referred to in (e) above, the same notice as
is given to the holders of such registration rights.
3.3 Information Rights. So long as the Holder holds this Warrant
and/or any of the Shares, the Company shall deliver to the Holder (a) promptly
after mailing, copies of all notices or other written communications to the
shareholders of the Company, (b) within ninety (90) days after the end of each
fiscal year of the Company, the annual audited financial statements of the
Company certified by independent public accountants of
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recognized standing and (c) within forty-five (45) days after the end of each
of the first three quarters of each fiscal year, the Company's quarterly,
unaudited financial statements.
3.4 Registration Under Securities Act of 1933, as amended. The Company
agrees that the Shares or, if the Shares are convertible into common stock of
the Company, such common stock, shall be subject to the registration rights set
forth on Exhibit B, if attached.
ARTICLE 4. MISCELLANEOUS
4.1 Term; Notice of Expiration. This Warrant is exercisable, in whole
or in part, at any time and from time to time on or before the Expiration Date
set forth above. The Company shall give Holder written notice of Holder's right
to exercise this Warrant in the form attached as Appendix 2 not more than 90
days and not less than 30 days before the Expiration Date. If the notice is not
so given, the Expiration Date shall automatically be extended until 30 days
after the date the Company delivers the notice to Holder.
4.2 Legends. This Warrant and the Shares (and the securities issuable,
directly or indirectly, upon conversion of the Shares, if any) shall be
imprinted with a legend in substantially the following form:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED OR
OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION
THEREOF UNDER SUCH ACT OR PURSUANT TO RULE 144 OR AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
CORPORATION AND ITS COUNSEL THAT SUCH REGISTRATION IS NOT
REQUIRED.
4.3 Compliance with Securities Laws on Transfer. This Warrant and the
Shares issuable upon exercise this Warrant (and the securities issuable,
directly or indirectly, upon conversion of the Shares, if any) may not be
transferred or assigned in whole or in part without compliance with applicable
federal and state securities laws by the transferor and the transferee
(including, without limitation, the delivery of investment representation
letters and legal opinions reasonably satisfactory to the Company, as
reasonably requested by the Company). The Company shall not require Holder to
provide an opinion of counsel if the transfer is to an affiliate of Holder or
if there is no material question as to the availability of current information
as referenced in Rule 144(c), Holder represents that it has complied with Rule
144(d) and (e) in reasonable detail, the selling broker represents that it has
complied with Rule 144(f), and the Company is provided with a copy of Holder's
notice of proposed sale.
4.4 Transfer Procedure. Subject to the provisions of Section 4.2,
Holder may transfer all or part of this Warrant or the Shares issuable upon
exercise of this Warrant (or the securities issuable, directly or indirectly,
upon conversion of the Shares, if any) by giving the Company notice of the
portion of the Warrant being transferred setting forth the name, address and
taxpayer identification number of the transferee and surrendering this Warrant
to the Company for reissuance to the transferee(s) (and Holder if applicable).
Unless the Company is filing financial information with the SEC pursuant to the
Securities Exchange
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Act of 1934, the Company shall have the right to refuse to transfer any portion
of this Warrant to any person who directly competes with the Company.
4.5 Notices. All notices and other communications from the Company to
the Holder, or vice versa, shall be deemed delivered and effective when given
personally or mailed by first-class registered or certified mail, postage
prepaid, at such address as may have been furnished to the Company or the
Holder, as the case may be, in writing by the Company or such holder from time
to time.
4.6 Waiver. This Warrant and any term hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or termination
is sought.
4.7 Attorneys Fees. In the event of any dispute between the parties
concerning the terms and provisions of this Warrant, the party prevailing in
such dispute shall be entitled to collect from the other party all costs
incurred in such dispute, including reasonable attorneys' fees.
4.8 Governing Law. This Warrant shall be governed by and construed in
accordance with the laws of the State of California, wihout giving effect to
its principles regarding conflicts of law.
"COMPANY"
ADVANCED POLYMER SYSTEMS, INC.
By /s/ JOHN J. MEAKEM, JR.
Name John J. Meakem, Jr.
(Print)
Title: Chairman of the Board, President,
or Vice President
By /s/ MICHAEL P.J. O'CONNELL
Name Michael P.J. O'Connell
(Print)
Title: Chief Financial Officer, Secretary
Assistant Treasurer, or Assistant
Secretary
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APPENDIX 1
NOTICE OF EXERCISE
1. The undersigned hereby elects to purchase _________ shares of the
Common Stock of ADVANCED POLYMER SYSTEMS, INC. pursuant to the terms of the
attached Warrant, and tenders herewith payment of the purchase price of such
shares in full.
1. The undersigned hereby elects to convert the attached Warrant into
Shares/cash [strike one] in the manner specified in the Warrant. This
conversion is exercised with respect to _________________________ of the Shares
covered by the Warrant.
[Strike paragraph that does not apply.]
2. Please issue a certificate or certificates representing said shares
in the name of the undersigned or in such other name as is specified below:
Venture Lending
Three Palo Alto Square, Suite 150
Palo Alto, CA 94306
3. The undersigned represents it is acquiring the shares solely for
its own account and not as a nominee for any other party and not with a view
toward the resale or distribution thereof except in compliance with applicable
securities laws.
_______________________________________________
(Signature)
___________________
(Date)
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APPENDIX 2
Notice that Warrant Is About to Expire
__________________, ____
Venture Lending
Three Palo Alto Square, Suite 150
Palo Alto, CA 94306
Attn: Chief Financial Officer
Dear: ______________________
This is to advise you that the Warrant issued to you described below
will expire on __________________, 19__.
Issuer: ADVANCED POLYMER SYSTEMS, INC.
Issue Date: September 27, 1995
Class of Security Issuable: Common
Exercise Price per Share: $7.00
Number of Shares Issuable: 32,500
Procedure for Exercise:
Please contact [name of contact person at (phone number)] with any
questions you may have concerning exercise of the Warrant. This is your only
notice of pending expiration.
_____________________________________
(Name of Issuer)
By __________________________________
Its _________________________________
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EXHIBIT A
Anti-Dilution Provisions
In the event of the issuance (a "Diluting Issuance") by the Company,
after the Issue Date of the Warrant, of securities at a price per share less
than the Warrant Price, then the number of shares of common stock issuable
upon conversion of the Shares, or if the Shares are common stock, the number
of Shares issuable upon exercise of the Warrant, shall be adjusted as a result
of Diluting Issuances in accordance with the Holder's standard form of Anti-
Dilution Agreement in effect on the Issue Date.
Under no circumstances shall the aggregate Warrant Price payable
by the Holder upon exercise of the Warrant increase as a result of any
adjustment arising from a Diluting Issuance.
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EXHIBIT B
Registration Rights
VENTURE LENDING
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT is entered into as of September 27,
1995, by and between Venture Lending ("Purchaser") and the Company whose name
appears on the last page of this Agreement.
RECITALS
A. Concurrently with the execution of this Agreement, the
Purchaser is purchasing from the Company a Warrant to Purchase Stock and
Warrant to Purchase Additional Stock (the "Warrants") pursuant to which
Purchaser has the right to acquire from the Company the Shares (as defined
in the Warrants).
B. By this Agreement, the Purchaser and the Company desire to
set forth the registration rights of the Shares all as provided herein.
NOW, THEREFORE, in consideration of the mutual promises,
covenants and conditions hereinafter set forth, the parties hereto
mutually agree as follows:
1. Registration Rights. The Company covenants and agrees
as follows:
1.1 Definitions. For purposes of this Section 1:
(a) The term "register," "registered," and
"registration" refer to a registration effected by preparing and filing a
registration statement or similar document in compliance with the Securities
Act of 1933, as amended (the "Securities Act"), and the declaration or
ordering of effectiveness of such registration statement or document;
(b) the term "Registrable Securities" means
(i) the Shares (if Common Stock) or all shares of Common Stock of the Company
issuable or issued upon conversion of the Shares and (ii) any Common Stock
of the Company issued as (or issuable upon the conversion or exercise of
any warrants, right or other security which is issued as) a dividend or
other distribution with respect to, or in exchange for or in replacement of,
any stock referred to in (i).
(c) The terms "Holder" or "Holders" means the
Purchaser or qualifying transferees under subsection 1.8 hereof who hold
Registrable Securities.
(d) The term "SEC" means the Securities and
Exchange Commission.
1.2 Company Registration.
(a) Registration. If at any time or from time to
time, the Company shall determine to register any of its securities, for
its own account or the account of any of its shareholders, other than a
registration on Form S-1 or S-8 relating solely to employee stock option or
purchase plans, or a registration on Form S-4 relating solely to an SEC
Rule 145 transaction, or a registration on any other form (other than Form
S-1, S-2, S-3 or S-18, or their successor forms) or any successor to
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such forms, which does not include substantially the same information as would
be required to be included in a registration statement covering the sale of
Registrable Securities, the Company will:
(i) promptly give to each Holder written notice
thereof (which shall include a list of the jurisdictions in which the Company
intends to attempt to qualify such securities under the applicable blue sky or
other state securities laws); and
(ii) include in such registration (and compliance),
and in any underwriting involved therein, all the Registrable Securities
specified in a written request or requests, made within 30 days after receipt
of such written notice from the Company, by any Holder or Holders, except as
set forth in subsection 1.2(b) below.
(b) Underwriting. If the registration of which the
Company gives notice is for a registered public offering involving an
underwriting, the Company shall so advise the Holders as a part of the written
notice given pursuant to subsection 1.2(a)(i). In such event the right of any
Holder to registration pursuant to this subsection 1.2 shall be conditioned
upon such Holder's participation in such underwriting and the inclusion of such
Holder's Registrable Securities in the underwriting to the extent provided
herein. All Holders proposing to distribute their securities through such
underwriting shall (together with the Company and the other shareholders
distributing their securities through such underwriting) enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for such underwriting by the Company.
1.3 Expenses of Registration. All expenses incurred in connection
with any registration, qualification or compliance pursuant to this Section 1
including without limitation, all registration, filing and qualification fees,
printing expenses, fees and disbursements of counsel for the Company and
expenses of any special audits incidental to or required by such registration,
shall be borne by the Company except the Company shall not be required to pay
underwriters' fees, discounts or commissions relating to Registrable
Securities. All expenses of any registered offering not otherwise borne by the
Company shall be borne pro rata among the Holders participating in the offering
and the Company.
1.4 Registration Procedures. In the case of each registration,
qualification or compliance effected by the Company pursuant to this
Registration Rights Agreement, the Company will keep each Holder participating
therein advised in writing as to the initiation of each registration,
qualification and compliance and as to the completion thereof. Except as
otherwise provided in subsection 1.3, at its expense the Company will:
(a) Prepare and file with the SEC a registration statement
with respect to such Registrable Securities and use its best efforts to cause
such registration statement to become effective, and, upon the request of the
Holders of a majority of the Registrable Securities registered thereunder, keep
such registration statement effective for up to 120 days.
(b) Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in
connection with such registration statement as may be necessary to comply with
the provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement.
(c) Furnish to the Holders such numbers of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as they may
reasonably request in order to facilitate the disposition of Registrable
Securities owned by them.
(d) Use its best efforts to register and qualify the
securities covered by such registration statement under such other securities
or Blue Sky laws of such jurisdictions as shall be reasonably requested by the
Holders, provided that the Company shall not be required in
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connection therewith or as a condition thereto to qualify to do business or to
file a general consent to service of process in any such states or
jurisdictions.
(e) In the event of any underwritten public offering, enter
into and perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter of such offering. Each Holder
participating in such underwriting shall also enter into and perform its
obligations under such an agreement.
(f) Notify each Holder of Registrable Securities covered by
such registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act or the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing.
1.5 Indemnification.
(a) The Company will indemnify each Holder of Registrable
Securities and each of its officers, directors and partners, and each person
controlling such Holder, with respect to which such registration, qualification
or compliance has been effected pursuant to this Rights Agreement, and each
underwriter, if any, and each person who controls any underwriter of the
Registrable Securities held by or issuable to such Holder, against all claims,
losses, expenses, damages and liabilities (or actions in respect thereto)
arising out of or based on any untrue statement (or alleged untrue statement)
of a material fact contained in any prospectus, offering circular or other
document (including any related registration statement, notification or the
like) incident to any such registration, qualification or compliance, or based
on any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statement therein not
misleading, or any violation or alleged violation by the Company of the
Securities Act, the Securities Exchange Act of 1934, as amended, ("Exchange
Act") or any state securities law applicable to the Company or any rule or
regulation promulgated under the Securities Act, the Exchange Act or any such
state law and relating to action or inaction required of the Company in
connection with any such registration, qualification of compliance, and will
reimburse each such Holder, each of its officers, directors and partners, and
each person controlling such Holder, each such underwriter and each person who
controls any such underwriter, within a reasonable amount of time after
incurred for any reasonable legal and any other expenses incurred in connection
with investigating, defending or settling any such claim, loss, damage,
liability or action; provided, however, that the indemnity agreement contained
in this subsection 1.5(a) shall not apply to amounts paid in settlement of any
such claim, loss, damage, liability, or action if such settlement is effected
without the consent of the Company (which consent shall not be unreasonably
withheld); and provided further, that the Company will not be liable in any
such case to the extent that any such claim, loss, damage or liability arises
out of or is based on any untrue statement or omission based upon written
information furnished to the Company by an instrument duly executed by such
Holder or underwriter specifically for use therein.
(b) Each Holder will, if Registrable Securities held by or
issuable to such Holder are included in the securities as to which such
registration, qualification or compliance is being effected, indemnify the
Company, each of its directors and officers, each underwriter, if any, of the
Company's securities covered by such a registration statement, each person who
controls the Company within the meaning of the Securities Act, and each other
such Holder, each of its officers, directors and partners and each person
controlling such Holder, against all claims, losses, expenses, damages and
liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any such registration statement, prospectus, offering circular or other
document, or any omission (or alleged omission) to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, and will reimburse the Company, such Holders, such directors,
officers, partners, persons
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or underwriters for any reasonable legal or any other expenses incurred in
connection with investigating, defending or settling any such claim, loss,
damage, liability or action, in each case to the extent, but only to the
extent, that such untrue statement (or alleged untrue statement) or omission (or
alleged omission) is made in such registration statement, prospectus, offering
circular or other document in reliance upon and in conformity with written
information furnished to the Company by an instrument duly executed by such
Holder specifically for use therein; provided, however, that the indemnity
agreement contained in this subsection 1.5(b) shall not apply to amounts paid in
settlement of any such claim, loss, damage, liability or action if such
settlement is effected without the consent of the Holder, (which consent shall
not be unreasonably withheld); and provided further, that the total amount for
which any Holder shall be liable under this subsection 1.5(b) shall not in any
event exceed the aggregate proceeds received by such Holder from the sale of
Registrable Securities held by such Holder in such registration.
(c) Each party entitled to indemnification under this
subsection 1.5 (the "Indemnified Party") shall give notice to the party
required to provide indemnification (the "Indemnifying Party") promptly after
such Indemnified Party has actual knowledge of any claim as to which indemnity
may be sought, and shall permit the Indemnifying Party to assume the defense of
any such claim or any litigation resulting therefrom; provided that counsel for
the Indemnifying Party, who shall conduct the defense of such claim or
litigation, shall be approved by the Indemnified Party (whose approval shall
not be unreasonably withheld), and the Indemnified Party may participate in
such defense at such party's expense; and provided further, that the failure of
any Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations hereunder, unless such failure resulted
in prejudice to the Indemnifying Party; and provided further, than an
Indemnified Party (together with all other Indemnified Parties which may be
represented without conflict by one counsel) shall have the right to retain one
separate counsel, with the fees and expenses to be paid by the Indemnifying
Party, if representation of such Indemnified Party by the counsel retained by
the Indemnifying Party would be inappropriate due to actual or potential
differing interests between such Indemnified Party and any other party
represented by such counsel in such proceeding. No Indemnifying Party, in the
defense of any such claim or litigation, shall, except with the consent of each
Indemnified Party, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving
by the claimant or plaintiff to such Indemnified Party of a release from all
liability in respect to such claim or litigation.
1.6 Information by Holder. Any Holder or Holders of Registrable
Securities included in any registration shall promptly furnish to the Company
such information regarding such Holder or Holders and the distribution proposed
by such Holder or Holders as the Company may request in writing and as shall be
required in connection with any registration, qualification or compliance
referred to herein.
1.7 Rule 144 Reporting. With a view to making available to Holders the
benefits of certain rules and regulations of the SEC which may permit the sale
of the Registrable Securities to the public without registration, the Company
agrees at all times to:
(a) make and keep public information available, as those terms
are understood and defined in SEC Rule 144, after 90 days after the effective
date of the first registration filed by the Company for an offering of its
securities to the general public;
(b) file with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act
(at any time after it has become subject to such reporting requirements); and
(c) so long as a Holder owns any Registrable Securities, to
furnish to such Holder forthwith upon request a written statement by the
Company as to its compliance with the reporting requirements of said Rule 144
(at any time after 90 days after the effective date of the first registration
statement filed by the Company for an offering of its securities to the general
public) and
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of the Securities Act and the Exchange Act (at any time after it has become
subject to such reporting requirements), a copy of the most recent annual or
quarterly report of the Company, and such other reports and documents so filed
by the Company as the Holder may reasonably request in complying with any rule
or regulation of the SEC allowing the Holder to sell any such securities
without registration.
1.8 Transfer of Registration Rights. Holders' rights to cause the
Company to register their securities and keep information available, granted to
them by the Company under subsections 1.2 and 1.7 may be assigned to a
transferee or assignee of a Holder's Registrable Securities not sold to the
public, provided, that the Company is given written notice by such Holder at
the time of or within a reasonable time after said transfer, stating the name
and address of said transferee or assignee and identifying the securities with
respect to which such registration rights are being assigned. The Company may
prohibit the transfer of any Holders' rights under this subsection 1.8 to any
proposed transferee or assignee who the Company reasonably believes is a
competitor of the Company.
2. General.
2.1 Waivers and Amendments. With the written consent of the record
or beneficial holders of at least a majority of the Registrable Securities, the
obligations of the Company and the rights of the Holders of the Registrable
Securities under this agreement may be waived (either generally or in a
particular instance, either retroactively or prospectively, and either for a
specified period of time or indefinitely), and with the same consent the
Company, when authorized by resolution of its Board of Directors, may enter
into a supplementary agreement for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement;
provided, however, that no such modification, amendment or waiver shall reduce
the aforesaid percentage of Registrable Securities without the consent of all
of the Holders of the Registrable Securities. Upon the effectuation of each
such waiver, consent, agreement of amendment or modification, the Company shall
promptly give written notice thereof to the record holders of the Registrable
Securities who have not previously consented thereto in writing. This Agreement
or any provision hereof may be changed, waived, discharged or terminated only
by a statement in writing signed by the party against which enforcement of the
change, waiver, discharge or termination is sought, except to the extent
provided in this subsection 2.1.
2.2 Governing Law. This Agreement shall be governed in all
respects by the laws of the State of California as such laws are applied to
agreements between California residents entered into and to be performed
entirely within California.
2.3 Successors and Assigns. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto.
2.4 Entire Agreement. Except as set forth below, this Agreement
and the other documents delivered pursuant hereto constitute the full and
entire understanding and agreement between the parties with regard to the
subjects hereof and thereof.
2.5 Notices, etc. All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by first class
mail, postage prepaid, certified or registered mail, return receipt requested,
addressed (a) if to Holder, at such Holder's address as set forth below, or at
such other address as such Holder shall have furnished to the Company in
writing, or (b) if to the Company, at the Company's address set forth below, or
at such other address as the Company shall have furnished to the Holder in
writing.
2.6 Severability. In case any provision of this Agreement shall be
invalid, illegal, or unenforceable, the validity, legality and enforceability
of the remaining provisions of this
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Agreement or any provision of the other Agreements shall not in any way be
affected or impaired thereby.
2.7 Titles and Subtitles. The titles of the sections and
subsections of this Agreement are for convenience of reference only and are not
to be considered in construing this Agreement.
2.8 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
PURCHASER COMPANY
VENTURE LENDING, a Division of
CUPERTINO NATIONAL BANK & TRUST ADVANCED POLYMER SYSTEMS, INC.
By: _______________________________ By: _______________________________
Name: _____________________________ Name: _____________________________
(Print) (Print)
Title: ____________________________ Title: Chairman of the Board,
President or Vice President
Address: __________________________ Address: __________________________
__________________________ __________________________
__________________________ __________________________
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EXHIBIT 4.4
THESE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED. SUCH SECURITIES MAY NOT BE TRANSFERRED,
UNLESS A REGISTRATION STATEMENT UNDER THE ACT IS IN EFFECT AS TO SUCH TRANSFER
OR, IN THE OPINION OF COUNSEL TO THE ISSUER, AN EXEMPTION FROM REGISTRATION IS
THEN AVAILABLE.
WARRANT
VOID AFTER 5:00 P.M., California Time, on March 27, 2000
WARRANT TO PURCHASE COMMON STOCK
OF
ADVANCED POLYMER SYSTEMS, INC.
This is to certify that subject to the terms and conditions hereof,
FOR VALUE RECEIVED, 1-- (the "Initial Holder") or registered assigns
(collectively referred to as the "Holder") is entitled to purchase 2-- shares
(as such number may be adjusted pursuant hereto) (the "Warrant Shares") of the
Common Stock (the "Common Stock") of Advanced Polymer Systems, Inc., a Delaware
corporation (the "Company"), at any time during the period from November 30,
1995 (the "Commencement Date") to 5:00 P.M., California Time, on March 27,
2000, at which time this Warrant will expire and become void. The exercise
price is $7.00 per share, as such price may be adjusted pursuant hereto (the
"Exercise Price").
This Warrant is issued pursuant to the provisions of the Subordinated
Loan Agreement dated November 27, 1995 (the "Agreement") and shall be subject
to, and the Holder shall be bound by, all terms, conditions and provisions of
the Agreement. Additionally, the following terms shall apply to this Warrant:
1. Exercise of Warrant, Reservation of Shares.
1.1 Subject to the terms and conditions hereof, this
Warrant may be exercised in whole or in part at any time and from time to time
on or after the Commencement Date, and before 5:00 P.M., California Time, on
March 27, 2000, or if such day is a day on which federal or state chartered
bank institutions located in the State of California are authorized by law to
close, then on the next succeeding day which shall not be such a day, by
presentation and surrender hereof to the Company at its principal office or at
the office of its warrant transfer agent, if any, with the attached Purchase
Form duly executed and accompanied by payment, in cash or certified or official
bank check payable to the order of the Company, of the Exercise Price for the
number of Warrant Shares specified in such form. If this Warrant should be
exercised in part only, the Company will, upon presentation of this Warrant
upon such exercise, execute and deliver a new warrant, dated the date hereof,
evidencing the
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rights of the Holder thereof to purchase the balance of the Warrant Shares
purchasable hereunder upon the same terms and conditions as herein set forth.
Upon and as of such receipt of this Warrant and the Purchase Form by the
Company at its office, in proper form for exercise and accompanied by payment
as herein provided, the Holder shall be deemed to be the holder of record of
the Warrant Shares issuable upon such exercise, notwithstanding that the stock
transfer books of the Company shall then be closed or that certificates
representing the Warrant Shares shall not then be actually delivered to the
Holder. The Company shall promptly take such reasonable steps as it deems
necessary in order to issue the Warrant Shares to be delivered following
exercise of this Warrant.
1.2 The Company shall at all times after the Commencement
Date and until expiration of this Warrant reserve for issuance and delivery
upon exercise of this Warrant the number of Warrant Shares as shall be required
for issuance and delivery upon exercise of this Warrant.
2. Fractional Shares.
No fractional shares or scrip representing fractional shares
shall be issued upon the exercise of this Warrant. With respect to any
fractional shares called for upon exercise hereof, the Company will pay to the
Holder an amount in cash equal to such fraction multiplied by the closing sales
price for a share of Common Stock, or the closing bid price if no sales were
reported, as quoted on the Nasdaq National Market.
3. Transfer in Compliance with the Securities Act of 1933;
Exchange, Assignment or Loss of Warrant.
3.1 This Warrant may not be assigned or transferred,
except as provided herein, and in accordance with and subject to the provisions
of the Securities Act of 1933, as amended, and the Rules and Regulations
promulgated thereunder (said Act and such Rules and Regulations being
hereinafter collectively referred to as the "Act"). Any purported transfer or
assignment made other than in accordance with this Section 3 shall be null and
void and of no force and effect.
3.2 This Warrant or the Warrant Shares may not be sold or
otherwise disposed of except as follows:
(a) To a person who, in the opinion of counsel
reasonably satisfactory to the Company, is a person to whom this Warrant or the
Warrant Shares may be legally transferred without registration and without the
delivery of a current prospectus under the Act, as well as applicable state
securities laws with respect thereto and then only against receipt of an
agreement of such person to comply with the provisions of this Section 3.2 with
respect to any resale or other disposition of such securities unless, in the
opinion of counsel to the Company, such agreement is not required; or
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(b) Upon delivery of a prospectus or offering
circular then meeting the requirements of the Act as well as applicable state
securities laws relating to such securities and the offering thereof for such
sale or disposition.
3.3 Each certificate for Warrant Shares or for any other
security issued or issuable upon exercise of this Warrant shall contain a
legend on the face, in form and substance satisfactory to counsel for the
Company, setting forth the restrictions on transfer contained in Section 3.1,
unless, in the opinion of counsel reasonably satisfactory to the Company, such
legend is not required.
3.4 Each holder of the Warrant, the Warrant Shares and
any other security issued or issuable upon exercise of this Warrant shall
indemnify and hold harmless the Company, its directors and officers, and each
other person, if any, who controls the Company against any losses, claims,
damages or liabilities, joint or several, to which the Company or any such
director, officer or any such person may become subject under the Act, any
applicable state securities law or any other statute or at common law, insofar
as such losses, claims, damages or liabilities (or actions in respect thereof)
directly arise out of or are based upon the disposition by such holder of the
Warrant, Warrant Shares or other such securities in violation of the above
representation.
3.5 Subject to the provisions of Sections 3.1 through
3.4, this Warrant is exchangeable, without expense, at the option of the
Holder, for other warrants of different denominations entitling the Holder to
purchase in the aggregate the same number of Warrant Shares purchasable on the
same terms and conditions, upon presentation at the principal office of the
Company or at the office of its warrant transfer agent, if any, together with a
written notice signed by the Holder specifying the names and denominations in
which new warrants are to be issued, and may be divided or combined with other
warrants which carry the same rights, upon presentation at the principal office
of the Company or at the office of its warrant transfer agent, if any, together
with a written notice signed by the Holder specifying the names and
denominations in which new warrants are to be issued.
3.6 Any assignment permitted under this Warrant will be
made by surrender of this Warrant to the Company at its principal office or at
the office of its warrant transfer agent, if any, with the attached Assignment
Form duly executed and accompanied by funds sufficient to pay any transfer tax.
In such event the Company will, without charge, execute and deliver a new
Warrant in the name of the assignee named in such instrument of assignment, and
this Warrant will promptly be canceled.
3.7 Upon receipt by the Company of evidence satisfactory
to it of the loss, theft, destruction or mutilation of this Warrant, and (in
the case of loss, theft or destruction) of reasonably satisfactory
indemnification, and upon surrender
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and cancellation of this Warrant, if mutilated, the Company will execute and
deliver a new Warrant of like tenor and date and any such lost, stolen, or
destroyed Warrant shall thereupon become void.
4. Adjustment of Number of Warrant Shares and Exercise Price.
4.1 The number of Warrant Shares for which this Warrant
may be exercised shall be subject to adjustment as follows:
(a) In the event there is a subdivision or
combination of the outstanding shares of Common Stock into a larger or smaller
number of shares, the number of Warrant Shares shall be increased or reduced in
the same proportion as the increase or decrease in the outstanding shares of
Common Stock.
(b) If the Company declares a dividend on Common
Stock payable in Common Stock or securities convertible into Common Stock, the
number of Warrant Shares shall be increased, as of the record date for
determining which holders of Common Stock shall be entitled to receive such
dividend, in proportion to the increase in the number of outstanding shares of
Common Stock as a result of such dividend.
4.2 In the event at any time prior to the expiration of
this Warrant of any reorganization or reclassification of the outstanding
shares of Common Stock (other than a change in par value, or from no par value
to par value, or from par value to no par value, or as a result of a
subdivision or combination) or any consolidation or merger of the Company with
another entity, or sale, lease or transfer of all or substantially all of the
property or assets of the Company, the Holder shall have the right, but not the
obligation, to exercise this Warrant. Upon such exercise, the Holder shall
have the right to receive the same kind and number of shares of capital stock
and other securities, cash or other property as would have been distributed to
the Holder upon such reorganization, reclassification, consolidation or merger
had the Holder exercised this Warrant immediately prior to such reorganization,
reclassification, consolidation or merger. The Holder shall pay upon such
exercise the Exercise Price that otherwise would have been payable pursuant to
the terms of this Warrant. If any such reorganization, reclassification,
consolidation or merger results in a cash distribution in excess of the
Exercise Price provided by this Warrant, the Holder may, at the Holder's
option, exercise this Warrant without making payment of the Exercise Price, and
in such case the Company shall, upon distribution to the Holder, consider the
Exercise Price to have been paid in full, and in making settlement to the
Holder, shall deduct an amount equal to the Exercise Price from the amount
payable to the Holder.
4.3 If the Company shall, at any time prior to the
expiration of this Warrant, dissolve, liquidate or wind up its
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affairs, the Holder shall have the right, but not the obligation, to exercise
this Warrant. Upon such exercise the Holder shall have the right to receive,
in lieu of the shares of Common Stock that the Holder otherwise would have been
entitled to receive, the same kind and amount of assets as would have been
issued, distributed or paid to the Holder upon any such dissolution,
liquidation or winding up with respect to such shares of Common Stock had the
Holder been the holder of record of such shares of Common Stock receivable upon
exercise of this Warrant on the date for determining those entitled to receive
any such distribution. If any such dissolution, liquidation or winding up
results in any cash distribution in excess of the Exercise Price provided for
by this Warrant, the Holder may, at the Holder's option, exercise this Warrant
without making payment of the Exercise Price and, in such case, the Company
shall, upon distribution to the Holder, consider the Exercise Price to have
been paid in full, and in making settlement to the Holder shall deduct an
amount equal to the Exercise Price from the amount payable to the Holder.
4.4 The Company may retain a firm of independent public
accountants of recognized standing (who may be any such firm regularly employed
by the Company) to make any computation required under this Section 4, and a
certificate signed by such firm shall be conclusive evidence of the correctness
of any computation made under this Section.
4.5 Whenever the number of shares of Common Stock
purchasable upon the exercise of this Warrant is adjusted as herein provided,
the Exercise Price shall be adjusted by multiplying the applicable Exercise
Price immediately prior to such adjustment by a fraction, the numerator of
which shall be the number of shares of Common Stock purchasable upon exercise
of this Warrant immediately prior to such adjustment and the denominator of
which shall be the number of shares of Common Stock purchasable immediately
after such adjustment.
4.6 If the Company does not earn net income, determined
in accordance with GAAP, for the fiscal quarter ended December 31, 1996, the
Exercise Price automatically shall be reduced from $7.00 to $5.00 per share.
Determination of whether the Company has earned net income for such fiscal
quarter shall be based on the financial statements for such quarter prepared by
the Company in accordance with GAAP and utilized in the preparation of the
audited financial statements for the fiscal year ended December 31, 1996, as
certified by the Chief Financial Officer of the Company as accurate and
complete in all material respects. If the Exercise Price is reduced pursuant
to the previous sentence and the Company does not report on its Annual Report
on Form 10-K for the fiscal year ended December 31, 1997, net income,
determined in accordance with GAAP, for such fiscal year, the Exercise Price
automatically shall be reduced from $5.00 to $3.00 per share.
4.7 Upon any adjustment of the Exercise Price, then and
in each such case the Company shall give written notice
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thereof, by first class mail, postage prepaid, addressed to the Holder at the
address of such Holder as shown on the books of the Company, which notice shall
state the Exercise Price resulting from such adjustment, setting forth in
reasonable detail the method of calculation and the facts upon which such
calculation is based.
4.8 The Company will at all times reserve and keep
available out of its authorized Common Stock or its treasury shares, solely for
the purpose of issuance upon the exercise of this Warrant as herein provided,
such number of shares of Common Stock as shall then be issuable upon the
exercise of this Warrant.
4.9 The issuance of certificates for shares of Common
Stock upon exercise of this Warrant shall be made without charge to the Holder
thereof for any issuance tax in respect thereof; provided, that the Company
shall not be required to pay any tax which may be payable in respect of any
transfer involved in the issuance and delivery of any certificate in a name
other than that of the Holder.
5. Rights of Holder.
Except as otherwise provided in Section 1.1 above, this
Warrant does not entitle the Holder to any rights of a stockholder of the
Company either at law or in equity, and the rights of any such Holder are
limited to those expressed in this Warrant and are not enforceable against the
Company, except to the extent set forth herein.
6. Warrant Transfer Agent.
Any reference in this Warrant to the warrant transfer agent
will apply if, and only if, the Company will have advised the Holder that such
an agent has been designated as an agency for the transfer or exercise of this
Warrant.
7. Governing Law.
This Warrant shall be construed in accordance with the laws of
the State of California.
8. Notices.
Any notice required hereunder shall be by writing and shall be
given by personal delivery, or United States mail, certified or registered with
return receipt requested, postage prepaid and shall be deemed to be effective
five (5) business days after mailing or on the date of delivery if delivered
personally, at the following addresses, or such other addresses as one party
may from time to time give the other in writing:
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To the Company: Advanced Polymer Systems, Inc.
3696 Haven Avenue
Redwood City, CA 94063
To Holder: At the address set forth on
Schedule A of the Agreement.
9. Registration Rights.
The Warrant Shares shall be subject to and enjoy the benefits
of the provisions regarding registration under the Act set forth in Section 9
of the Agreement.
IN WITNESS WHEREOF, the Company has executed this Warrant as of the
30th day of November, 1995.
ADVANCED POLYMER SYSTEMS, INC.
By: /s/ MICHAEL P. J. O'CONNELL
--------------------------------
Michael P. J. O'Connell
Chief Financial Officer
Initial Holder
Name: 1--
Address: 3--
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PURCHASE FORM
Dated:_______________, 199_
The undersigned hereby irrevocably elects to exercise the
within Warrant to the extent of purchasing __________ shares of Common Stock
and hereby makes payment of $__________ in payment of the actual exercise price
thereof.
INSTRUCTIONS FOR REGISTRATION OF STOCK
Name:_______________________________________________________
(Please typewrite or print in block letters)
Address:____________________________________________________
____________________________________________________
____________________________________________________
Signature:_________________________
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ASSIGNMENT FORM
FOR VALUE RECEIVED, ____________________ hereby sells, assigns
and transfers unto
Name:____________________________________________
(Please typewrite or print in block letters)
Address:_________________________________________________________
the right to purchase Common Stock represented by this Warrant to the extent of
_________ shares of Stock and does hereby irrevocably constitute and appoint
____________________, attorney, to transfer the same on the books of the
Company with full power of substitution in the premises.
Signature:_________________________
Dated:_______________, 199_
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EXHIBIT 23.2
CONSENT OF KPMG PEAT MARWICK LLP
The Board of Directors
Advanced Polymer Systems, Inc.
We consent to the use of our report incorporated herein by reference and to the
reference to our firm under the heading "Experts" in the prospectus. Our report
refers to a change in the method of accounting for certain investments in debt
and equity securities.
KPMG PEAT MARWICK LLP
San Francisco, California
February 6, 1996
