-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, R8hK9CXL4yb3mu3AuJ9Uu+kLlfTLqsZuODCVB8+VQ7swy0xBVfL1m1RaD91HWtKl LTSswa2Zp9QjqlySxcAkrA== 0000950133-03-000516.txt : 20030220 0000950133-03-000516.hdr.sgml : 20030220 20030220172827 ACCESSION NUMBER: 0000950133-03-000516 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20030220 GROUP MEMBERS: CAMDEN PARTNERS STRATEGIC FUND II-A, L.P. GROUP MEMBERS: CAMDEN PARTNERS STRATEGIC FUND II-B, L.P. GROUP MEMBERS: DAVID L. WARNOCK GROUP MEMBERS: DONALD W. HUGHES GROUP MEMBERS: RICHARD M. JOHNSTON FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: CAMDEN PARTNERS STRATEGIC II LLC CENTRAL INDEX KEY: 0001160267 IRS NUMBER: 061589836 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: C/O CAMDEN PARTNERS INC STREET 2: 1 SOUTH STREET SUITE 2150 CITY: BALTIMORE STATE: MD ZIP: 21202 BUSINESS PHONE: 410-895-3800 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: ARADIGM CORP CENTRAL INDEX KEY: 0001013238 STANDARD INDUSTRIAL CLASSIFICATION: ELECTROMEDICAL & ELECTROTHERAPEUTIC APPARATUS [3845] IRS NUMBER: 943133088 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-46237 FILM NUMBER: 03574871 BUSINESS ADDRESS: STREET 1: 3929 POINT EDEN WAY CITY: HAYWARD STATE: CA ZIP: 94545 BUSINESS PHONE: 5102659000 MAIL ADDRESS: STREET 1: 3929 POINT EDEN WAY CITY: HAYWARD STATE: CA ZIP: 94545 SC 13D 1 w83777sc13d.htm SCHEDULE 13D sc13d
 

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934
(Amendment No. )*

Aradigm Corporation

(Name of Issuer)

Common Stock, no par value

(Title of Class of Securities)

038505103

(Cusip Number)

Donald W. Hughes
Camden Partners Holdings, LLC
One South Street, Suite 2150
Baltimore, Maryland 21202

(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)

February 10, 2003

(Date of Event Which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. o

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.

* The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

 

 

Page 1 of 17
             
CUSIP No. 038505103
  1. Names of Reporting Persons:
Camden Partners Strategic II, LLC		 I.R.S. Identification Nos. of above persons (entities only):
  2. Check the Appropriate Box if a Member of a Group (See Instructions):
    (a) o  
    (b) x  
  3. SEC Use Only:
  4. Source of Funds (See Instructions):
AF
  5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e): o
  6. Citizenship or Place of Organization:
Delaware Limited Liability Company
Number of
Shares
Beneficially
Owned by
Each Reporting
Person With
7. Sole Voting Power:
8. Shared Voting Power:
19,420,070
9. Sole Dispositive Power:
10.Shared Dispositive Power:
990,000
  11.Aggregate Amount Beneficially Owned by Each Reporting Person:
19,420,070
  12.Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions):
o
  13.Percent of Class Represented by Amount in Row (11):
51.5%
  14.Type of Reporting Person (See Instructions):
OO

 

Page 2 of 17
             
CUSIP No. 038505103
  1. Names of Reporting Persons:
Camden Partners Strategic Fund II-A, L.P.		 I.R.S. Identification Nos. of above persons (entities only):
  2. Check the Appropriate Box if a Member of a Group (See Instructions):
    (a) o  
    (b) x  
  3. SEC Use Only:
  4. Source of Funds (See Instructions):
WC
  5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e): o
  6. Citizenship or Place of Organization:
Delaware Limited Partnership
Number of
Shares
Beneficially
Owned by
Each Reporting
Person With
7. Sole Voting Power:
8. Shared Voting Power:
19,420,070
9. Sole Dispositive Power:
10.Shared Dispositive Power:
990,000
  11.Aggregate Amount Beneficially Owned by Each Reporting Person:
19,420,070
  12.Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions):
o
  13.Percent of Class Represented by Amount in Row (11):
51.5%
  14.Type of Reporting Person (See Instructions):
PN

 

Page 3 of 17
             
CUSIP No. 038505103
  1. Names of Reporting Persons:
Camden Partners Strategic Fund II-B, L.P.		 I.R.S. Identification Nos. of above persons (entities only):
  2. Check the Appropriate Box if a Member of a Group (See Instructions):
    (a) o  
    (b) x  
  3. SEC Use Only:
  4. Source of Funds (See Instructions):
WC
  5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e): o
  6. Citizenship or Place of Organization:
Delaware Limited Liability Company
Number of
Shares
Beneficially
Owned by
Each Reporting
Person With
7. Sole Voting Power:
8. Shared Voting Power:
990,000
9. Sole Dispositive Power:
10.Shared Dispositive Power:
990,000
  11.Aggregate Amount Beneficially Owned by Each Reporting Person:
990,000
  12.Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions):
o
  13.Percent of Class Represented by Amount in Row (11):
3.1%
  14.Type of Reporting Person (See Instructions):
PN

 

Page 4 of 17
             
CUSIP No. 038505103
  1. Names of Reporting Persons:
Donald W. Hughes		 I.R.S. Identification Nos. of above persons (entities only):
  2. Check the Appropriate Box if a Member of a Group (See Instructions):
    (a) o  
    (b) x  
  3. SEC Use Only:
  4. Source of Funds (See Instructions):
AF
  5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e): o
  6. Citizenship or Place of Organization:
United States of America
Number of
Shares
Beneficially
Owned by
Each Reporting
Person With
7. Sole Voting Power:
8. Shared Voting Power:
19,420,070
9. Sole Dispositive Power:
10.Shared Dispositive Power:
990,000
  11.Aggregate Amount Beneficially Owned by Each Reporting Person:
19,420,070
  12.Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions):
o
  13.Percent of Class Represented by Amount in Row (11):
51.5%
  14.Type of Reporting Person (See Instructions):
IN

 

Page 5 of 17
             
CUSIP No. 038505103
  1. Names of Reporting Persons:
Richard M. Johnston		 I.R.S. Identification Nos. of above persons (entities only):
  2. Check the Appropriate Box if a Member of a Group (See Instructions):
    (a) o  
    (b) x  
  3. SEC Use Only:
  4. Source of Funds (See Instructions):
AF
  5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e): o
  6. Citizenship or Place of Organization:
United States of America
Number of
Shares
Beneficially
Owned by
Each Reporting
Person With
7. Sole Voting Power:
8. Shared Voting Power:
19,420,070
9. Sole Dispositive Power:
10.Shared Dispositive Power:
990,000
  11.Aggregate Amount Beneficially Owned by Each Reporting Person:
19,420,070
  12.Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions):
o
  13.Percent of Class Represented by Amount in Row (11):
51.5%
  14.Type of Reporting Person (See Instructions):
IN

 

Page 6 of 17
             
CUSIP No. 038505103
  1. Names of Reporting Persons:
David L. Warnock		 I.R.S. Identification Nos. of above persons (entities only):
  2. Check the Appropriate Box if a Member of a Group (See Instructions):
    (a) o  
    (b) x  
  3. SEC Use Only:
  4. Source of Funds (See Instructions):
AF
  5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e): o
  6. Citizenship or Place of Organization:
United States of America
Number of
Shares
Beneficially
Owned by
Each Reporting
Person With
7. Sole Voting Power:
8. Shared Voting Power:
19,420,070
9. Sole Dispositive Power:
10.Shared Dispositive Power:
990,000
  11.Aggregate Amount Beneficially Owned by Each Reporting Person:
19,420,070
  12.Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions):
o
  13.Percent of Class Represented by Amount in Row (11):
51.5%
  14.Type of Reporting Person (See Instructions):
IN

 

Page 7 of 17
       
Item 1. Security and Issuer
       This Schedule 13D relates to the common stock, no par value (“Common Stock”), Series A Convertible Preferred Stock, no par value (“Preferred Stock”), and Series A Warrants (“Warrants” and together with the Common Stock and Preferred Stock, the “Securities”) of Aradigm Corporation, a California corporation (the “Company”), having its principal executive office at 3929 Point Eden Way, Hayward, Californ ia 94545.
 
Item 2.Identity and Background
       (a)     This Schedule 13D is being filed by Camden Partners Strategic II, LLC, a Delaware limited liability company (“CPS II”), Camden Partners Strategic Fund II-A, L.P., a Delaware limited partnership (“CPS Fund II-A”), Camden Partners Strategic Fund II-B, L.P., a Delaware limited partnership (“CPS Fund II-B”), and Messrs. Donald W. Hughes, Richard M. Johnston and David L. Warnock (collectively , the “Managing Members”). CPS II is the general partner of each of CPS Fund II-A and CPS Fund II-B. Messrs. Hughes, Johnston and Warnock are the Managing Members of CPS II. CPS II, CPS Fund II-A, CPS Fund II-B and Messrs Hughes, Johnston and Warnock are sometimes referred to herein collectively, as the “Reporting Persons”). CPS Fund II-A and CPS Fund II-B are direct beneficial owners of Securities of the Company. CPS II may be deemed an indirect beneficial owner of Securities of the Com pany by virtue of it being the sole general partner of each of CPS Fund II-A and CPS Fund II-B, to the extent of its pecuniary interest in each of CPS Fund II-A and CPS Fund II-B. Each of Messrs. Hughes, Johnston and Warnock may be deemed to be an indirect beneficial owner of Securities of the Company by virtue of being a Managing Member of CPSII, to the extent of his indirect pecuniary interest in Securities of the Company beneficially owned by CPS Fund II-A and CPS Fund II-B. The Securities of the Company beneficially owned by each of CPS Fund II-A and CPS Fund II-B are set forth in response to Item 5 of this Schedule 13D, which are incorporated by reference herein.

     By virtue of having entered into a Voting Agreement (as defined in Item 3 below), CPS Fund II-A may be deemed to be a member of a “Group” with the other parties to the Voting Agreement and to share beneficial ownership of the Securities of the Company beneficially owned by them as described in Item 3 be low and incorporated by reference herein. In reliance on Rule 13d-1(k)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), all information relating to the other parties to the Voting Agreement included in this Schedule 13D, is based solely on the information set forth in, and attached as exhibits and schedules to, the Voting Agreement, the Purchase Agreement (as defined in Item 3 below), the Repricing Agreement (as defined in Item 3 below) and the Preliminary Proxy Statemen t filed by the Company with the Securities and Exchange Commission on February 11, 2003. None of CPS II, CPS Fund II-A, CPS Fund II-B and Messrs. Hughes, Johnston and Warnock knows or has reason to know of any information relating to the (i) legal organization or citizenship, as applicable, (ii) ownership, (iii) principal business address, (iv) principal business purpose, (v) legal proceedings, and (vi) ownership of Securities of the Company, of the parties to the Voting Agreement or any other agreement, ex cept for the information included in response to Item 3 of this Schedule 13D.

     (b)     The address of the principal business office of the Reporting Persons is One South Street, Suite 2150, Baltimore, Maryland 21202.

     (c)     The principal businesses of CPS Fund II-A and CPS Fund II-B are to invest in businesses located primarily in the United States. The principal business of CPS II is to act a s general partner of each of CPS Fund II-A and CPS Fund II-B. The principal business of each of the Managing Members is to act as officers, directors, members, managing members, general partners or limited partners, as applicable, of corporations, partnerships or limited liability companies, as the case may be, some of which may be deemed to be affiliates of, or may provide management services to, CPS II, CPS Fund II-A and CPS Fund II-B. Messrs. Hughes, Johnston and Warnock are parties to written employment agreements with Camden Partners Holdings, LLC, a Delaware limited liability company (“Camden Holdings”), which provides management services to CPS II and affiliates of CPS II, CPS Fund II-A and CPS Fund II-B and is an investment adviser registered under the Investment Advisor Act of 1940, as amended. The principal business office of Camden Holdings is One South Street, Suite 2150, Baltimore, Maryland 21202.

     (d)-(e) During the five years prior to the date hereof, n one of the Reporting Persons have been convicted of a criminal proceeding or have been a party to civil proceedings ending in judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

     (f)     CPS II is a Delaware limited liability company. Each of CPS Fund II-A and CPS Fund II-B is a Delaware limited partnershi p. Each of Messrs. Hughes, Johnston and Warnock is a United States citizen.

 

Page 8 of 17
       
Item 3.Source and Amount of Funds or Other Consideration
       CPS Fund II-A and CPS Fund II-B raised working capital (investment funds) through the private placement of limited partnership interests, a portion of which was used to acquire Securities of the Company. Pursuant to a Securities Purchase Agreement dated December 11, 2001 (the “2001 Purchase Agreement”), CPS Fund II-A purchased 141,600 shares of Preferred Stock (currently convertible into 566,400 shares of Common Stock) and Warrants (curren tly exercisable for up to 368,160 shares of Common Stock) and CPS Fund II-B purchased 8,400 shares of Preferred Stock (currently convertible into 33,600 shares of Common Stock), and Warrants (currently exercisable for up to 21,840 shares of Common Stock), of the Company. No part of the purchase price paid by CPS Fund II-A and CPS Fund II-B for the Securities of the Company acquired by each of them was represented by funds or other consideration borrowed or otherwise obtained for the purpose of acquiring, ho lding, trading or voting Securities of the Company. The Preferred Stock is currently convertible into shares of Common Stock based on a ratio of 1-to-4. On a fully converted basis, CPS Fund II-A would be deemed to be the direct beneficial owner of 934,560 shares of Common Stock, or 2.9% (based on 32,092,172 shares of Common Stock outstanding, which includes 31,157,612 shares of Common Stock outstanding as of January 31, 2003 (according to the Company's Preliminary Proxy Statement filed with the Securities a nd Exchange Commission on February 11, 2003), plus 566,400 shares of Common Stock issuable upon conversion of Preferred Stock and 368,160 shares of Common Stock issuable upon exercise of Warrants directly beneficially owned by CPS Fund II-A), of the Company. On a fully converted basis, CPS Fund II-B would be deemed to be the direct beneficial owner of 55,440 shares of Common Stock, or 0.2% (based on 31,213,052 shares of Common Stock outstanding, which includes 31,157,612 shares of Common Stock outstanding a s of January 31, 2003, plus 33,600 shares of Common Stock issuable upon conversion of Preferred Stock and 21,840 shares of Common Stock issuable upon exercise of Warrants directly beneficially owned by CPS Fund II-B), of the Company.

     As reported by the Company in its Form 8-K filed on February 12, 2003, CPS Fund II-A and CPS Fund II-B entered into a Purchase Agreement dated February 10, 2003 (the “Purchase Agreement”), with the Company and the other parties thereto , pursuant to which (i) the Company agrees to issue and sell to the persons identified as purchasers in the Purchase Agreement, and such purchasers agree to purchase, for purchase consideration equivalent to $0.79 per share, an aggregate of 18,992,391 shares of Common Stock, and Warrants to purchase up to 4,273272 shares of Common Stock at an exercise price of $1.07 per share, for an aggregate purchase price of approximately $15,004,000, in a private placement, and (ii) the Company agrees to cancel certain Warrants currently exercisable for an aggregate of 4,016,024 shares of Common Stock of the Company at an exercise price of $6.97 per share, previously issued pursuant to the 2001 Purchase Agreement, and to reissue Warrants exercisable for a like number of shares of Common Stock at an exercise price of $1.12 per share, in accordance with the Warrant Repricing Agreement dated as of February 10, 2003 (the “Repricing Agreement”) (collectively, the transactions pursuant to the Purchase Agreement and th e Repricing Agreement are hereafter referred to as the “Financing”). Consummation of the Financing is subject to, among other conditions, the approval of the shareholders of the Company. A copy of the Purchase Agreement is filed as Exhibit 2 to this Schedule 13D by incorporation by reference to Exhibit 10.1 of the Form 8-K of the Company filed with the Securities and Exchange Commission on February 12, 2003. A copy of the Repricing Agreement is filed as Exhibit 4 to this Schedule 13D by incorporat ion by reference to Exhibit 10.1 of the Form 8-K of the Company filed with the Securities and Exchange Commission on February 12, 2003.

     Pursuant to the Purchase Agreement, (i) CPS Fund II-A agrees to purchase 1,194,936 shares of Common Stock and a Warrant exercisable for up to 268,860 shares of Common Stock for a purchase price of $943,999.44, and (ii) CPS Fund II-B agrees to purchase 70,886 shares of Common Stock and a Warrant exercisable for up to 15,949 shares of Common S tock for a purchase price of $55,999.94. In addition, pursuant to the Repricing Agreement, the current Warrants held by each of CPS Fund II-A and CPS Fund II-B currently exercisable for 368,160 and 21,840 shares of Common Stock, respectively, at an exercise price of $6.97 per share, will be cancelled and will be replaced by Warrants exercisable for a like number of shares of Common Stock at an exercise price of $1.12 per share. The source of funds to acquire the shares of Common Stock and Warrants pursuant to the Purchase Agreement will be the working capital of each of CPS Fund II-A and CPS Fund II-B. No part of the purchase price to be paid by CPS Fund II-A and CPS Fund II-B will be represented by funds or other consideration borrowed or otherwise obtained for the purpose of acquiring, holding, trading or voting Securities of the Company.

     In connection with the Purchase Agreement, CPS Fund II-A entered into a Voting Agreement (the “Voting Agreement”), whereby, each of the parties thereto agree to vote the shares of Common Stock and Preferred Stock (on a Common Stock equivalent basis) specified next to such party's name on Exhibit A to the Voting Agreement in favor of the Financing. The Voting Agreement will terminate on the earlier of (i) the closing of the transactions pursuant to the Purchase Agreement, (ii) termination of the Purchase Agreement pursuant to the terms thereof, (iii) the written agreement of all parties to the Voting Agreement, or (iv) April 30, 2003 .. CPS Fund II-B is not a party to the Voting Agreement. A copy of the Voting Agreement is filed as Exhibit 3 to this Schedule 13D.

     As a party to the Voting Agreement, CPS Fund II-A agrees to vote the 141,600 shares of Preferred Stock (566,400 shares of Common Stock on a fully converted basis) of the Company held by it in favor of the Financing. By virtue of having entered into the Voting Agreement, CPS Fund II-A may be deemed to be a member o a “Group” with the oth er parties to the Voting Agreement and may be deemed to share beneficial ownership of the Securities owned by such other parties to the Voting Agreement. Each party to the Voting Agreement agrees to vote the shares of Common Stock and the shares of Preferred Stock (on a Common Stock equivalent basis) specified next to its name in the Table below in favor of the Financing:

     In reliance on Rule 13d-1(k)(2) of the Exchange Act, all information relating to the parties to the Voti ng Agreement included in this Schedule 13D, is based solely on the information set forth in, and attached as exhibits or schedules to, the Voting Agreement, the Purchase Agreement, the Repricing Agreement and the Preliminary Proxy Statement of the Company filed with the Securities and Exchange Commission on February 1, 2003. None of CPS II, CPS Fund II-A, CPS Fund II-B and Messrs. Hughes, Johnston and Warnock know or have reason to know of any information relating to additional Securities (including Warrant s) of the Company held by each party to the Voting Agreement or any other agreement, except as set forth in response to Item 3 above.

     Each of CPS II, CPS Fund II-A, CPS Fund II-B and each Managing Member disclaim all beneficial ownership of all Securities of the Company directly and indirectly beneficially owned by parties to the Voting Agreement and any other agreement, except for each of their respective pecuniary interest in the Securities of the Company beneficially owne d by CPS Fund II-A and CPS Fund II-A. Each of CPS Fund II-A and CPS Fund II-B disclaims beneficial ownership of Securities of the Company directly or indirectly beneficially owned by the other. Each of CPS II, CPS Fund II-A, CPS Fund II-B and each Managing Member disclaims it is a member of a “Group” with the parties to the Voting Agreement or any other agreement, and with each other, for purposes of this Schedule 13D and for every other purpose.

 

Page 9 of 17

                                                     
                                                Percentage
                                                Ownership of Shares
                        Number of                   of Common Stock and
        Number of   Number of   Shares of Preferred   Total Securities           Shares of Preferred
        Shares of Common   Shares of Preferred   Stock on a Fully   Subject to Voting           Stock on a Fully
Beneficial Owner   Address1   Stock   Stock   Converted Basis   Agreement   Warrants2   Converted Basis3
 
 
 
 
 
 
 
New Enterprise Associates 10, Limited Partnership (“NEA”)   119 St Paul Street,
Baltimore, MD 21202 		    2,489,585       1,033,057       4,132,228       6,621,813       2,934,906       16.9 %
                                                     
Novo Nordisk Pharmaceuticals, Inc. (Novo”)   DK-2880 Bagsvaerd,
Denmark 		    7,868,369                   7,868,369             20.1 %

1   Information obtained from Purchase Agreement.
 
2   Information obtained from Repricing Agreement.
 
3   All other information included in the above Table reflects the information included in Exhibit A to the Voting Agreement. The Preliminary Proxy Statement of the Company filed with the Securities and Exchange Commission on February 11, 2003, soliciting the consent of shareholders of the Company to the Financing, reflects Securities holdings for Richard P. Thompson of 985,312 shares of Common Stock (including, 100 shares held by a member of his immediate family, 190,599 held by the Thompson Family Trust and 15,000 shares held by the Thompson Family Partners). The applicable ownership percentages have been calculated based on 39,162,556 shares of Common Stock (assuming the conversion of all 2,001,236 outstanding shares of Preferred Stock of the Company into an aggregate of 8,004,944 shares of Common Stock) outstanding as of January 31, 2003 to reflect the voting power of each entity individually and as a group. The approximate percentage ownership of CPS Fund II-A calculated in accordance with Rule 13d-3(d)(1) (including only the shares of Common Stock of the Company issuable upon conversion of currently convertible shares of Preferred Stock and currently exercisable Warrants owned by such entity in the denominator of CPS Fund II-A) is 2.9%,.
 
   

 

 

Page 10 of 17

                                         
                                    Percentage
                                    Ownership of Shares
                    Number of               of Common Stock and
        Number of   Number of   Shares of Preferred   Total Securities       Shares of Preferred
        Shares of Common   Shares of Preferred   Stock on a Fully   Subject to Voting       Stock on a Fully
Beneficial Owner   Address   Stock   Stock   Converted Basis   Agreement   Warrants   Converted Basis 3
 
 
 
 
 
 
 
State Street Research Aurora Fund (“SS Aurora Fund”)   c/o State Street
Research &
Management Company,
One Financial
Center, Boston, MA
02111 		    1,282,500               1,282500           3.3 %
                                         
State Street Research Aurora Portfolio (“SS Aurora Portfolio”)   c/o State Street
Research &
Management Company,
One Financial
Center, Boston, MA
02111 		    295,900               295,900           0.8 %
                                         
State Street Research Health Sciences Fund (“SS Health Sciences Fund”)   c/o State Street
Research &
Management Company,
One Financial
Center, Boston, MA
02111 		    288,100               288,100           0.7 %
                                         
MPM BioEquities Master Fund LP. (“MPM”)   601 Gateway Blvd., Suite 360, South San Francisco, CA 94080.         206,611   826,444     826,444     537,188     2.1 %
                                         
Domain Public Equity Partners, LP (“Domain”)   One Palmer Square, Suite 515, Princeton, N.J. 08542     128,000     154,958   619,832     747,832     402,890     1.9 %

 

 

Page 11 of 17

                                                 
                                            Percentage
                                            Ownership of Shares
                    Number of                   of Common Stock and
        Number of   Number of   Shares of Preferred   Total Securities           Shares of Preferred
        Shares of Common   Shares of Preferred   Stock on a Fully   Subject to Voting           Stock on a Fully
Beneficial Owner   Address   Stock   Stock   Converted Basis   Agreement   Warrants   Converted Basis 3
 
 
 
 
 
 
 
Camden Partners
Strategic Fund
II-A, LP		   One South Street, Suite 2150, Baltimore, MD 21202         141,600       566,400       566,400       368,160       1.4 %
                                                 
Ursus Offshore Limited (‘Ursus”)   P.O. Box 895 GT, Harbour Center 2nd Floor, North Church Street, Grand Cayman, Cayman Islands   198,900                 198,900             0.5 %
                                                 
Richard Thompson (“Thompson”)   c/o Aradigm
Corporation, 3929
Point Eden Way,
Hayward, CA 94545 		  300,212                 300,212             0.8 %
                                                 
Total       12,851,566     1,536,226       6,144,904       18,996,470       4,243,144       48.50 %4

4   The aggregate percentage ownership of all parties to the Voting Agreement reflected on Exhibit A thereto is based on a denominator of 39,162,556 shares of Common Stock (including 31,157,612 shares of Common Stock outstanding as of January 31, 2003, plus 8,004,944 shares of Common Stock issuable on conversion of all 2,001,236 outstanding shares of Preferred Stock), which represents the aggregate voting power held by the parties to the Voting Agreement. If the aggregate percentage ownership of all parties to the Voting Agreement were calculated by including in the denominator only the 6,144,904 shares of Common Stock issuable on conversion of the 1,536,226 shares of Preferred Stock held by such parties, the aggregate percentage ownership would be approximately 50.9%.

 

 

Page 12 of 17
       
Item 4.Purpose of Transaction
       CPS Fund II-A and CPS Fund II-B acquired the Securities currently held by each of them for investment purposes. The Securities that each of CPS Fund II-A and CPS Fund II-B have agreed to acquire pursuant to the Purchase Agreement will also be acquired for investment purposes. Any “Group,” which may be deemed to have been formed pursuant to the Voting Agreement or any other agreement, relates solely to the agreement of CPS Fund II-A to vote the shares of Preferred Stock (on a Common Stock equivalent basis) held by it in favor of the Financing.

     Depending on market conditions, their continuing evaluation of the business and prospects of the Company and other factors, CPS II, as the sole general partner of each of CPS Fund II-A and CPS Fund II-B, and the Managing Members, may determine to dispose of or acquire additional Securities of the Company. Except as set forth in this Schedule 13D, none of the Reporting Pe rsons has any present plans, which relate to or would result in:

     (a)     The acquisition by any person of additional securities of the issuer, or the disposition of securities of the Company;

     (b)     An extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving the Company or any of its subsidiaries;

     (c)     A sale or transfer of a material amount of assets of the Company or any of its subsidiaries;

     (d)     Any change in the present board of directors or management of the Company, including any plans or proposals to change the number or term of directors or to fill any existing vacancies on the board;

     (e)     Any material change in the present capitalization or dividend policy of the Comp any;

     (f)     Any other material change in the issuer's business or corporate structure including but not limited to, if the Company is a registered closed-end investment company, any plans or proposals to make any changes in its investment policy for which a vote is required by section 13 of the Investment Company Act of 1940;

     (g)     Changes in the Company's charter, bylaws or instruments cor responding thereto or other actions which may impede the acquisition of control of the Company by any person;

     (h)     Causing a class of securities of the Company to be delisted from a national securities exchange or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association;

     (i)     A class of equity securities of the Company bec oming eligible for termination of registration pursuant to Section 12(g)(4) of the Act; or

     (j)     Any action similar to any of those enumerated above.
 
 

 

Page 13 of 17
       
Item 5.Interest in Securities of the Issuer
  (a)     CPS Fund II-A is the direct beneficial owner of an aggregate of 934,560 shares of Common Stock (consisting of 141,600 shares of Preferred Stock currently convertible into 566,400 shares of Common Stock, and 368,160 shares of Common Stock issuable upon exercise of currently exercisable Warrants), representing approximately 2.9% of the outstanding shares of Common Stock of the Company (based on an aggregate of 32,092,172 outstanding shares of Commo n Stock, consisting of, 31,157,612 shares of Common Stock outstanding as of January 31, 2003, plus 566,400 shares of Common Stock issuable on conversion of the Preferred Stock and 368,160 shares of Common Stock issuable on exercise of Warrants beneficially owned by CPS Fund II-A). CPS Fund II-B is the direct beneficial owner of an aggregate of 55,440 shares of Common Stock of the Company (consisting of 8,400 shares of Preferred Stock currently convertible into 33,600 shares of Common Stock, and 21,840 share s of Common Stock issuable upon exercise of currently exercisable Warrants), representing approximately 0.2% of the outstanding shares of Common Stock of the Company (based on an aggregate of 31,213,052 outstanding shares of Common Stock, consisting of, 31,157,612 shares of Common Stock outstanding as of January 31, 2003, plus 33,600 shares of Common Stock issuable on conversion of the Preferred Stock and 21,840 shares of Common Stock issuable on exercise of Warrants beneficially owned by CPS Fund II-B).

     By virtue of CPS II being the sole general partner of each of CPS Fund II-A and CPS Fund II-B and Messrs. Hughes, Warnock and Johnston being the Managing Members of CPS II, CPS II and each Managing Member may be deemed to beneficially own the Preferred Shares and Warrants directly beneficially owned by each of CPS Fund II-A and CPS Fund II-B, to the extent of their respective pecuniary interest therein.

     As a party to the Voting Agreement, CPS F und II-A agrees to vote the 141,600 shares of Preferred Stock (566,400 shares of Common Stock on a fully converted basis) of the Company held by it in favor of the Financing. By virtue of having entered into the Voting Agreement, CPS Fund II-A may be deemed to be a member of a “Group” with the other parties to the Voting Agreement, and may be deemed to share beneficial ownership of the Securities of the Company owned by such other parties to the Voting Agreement. Information regarding the parties to the Voting Agreement and the Securities owned by them is set forth in the Table and the footnotes thereto included in Item 3 above, which are hereby incorporated by reference herein.

(b) Regarding the number of shares as to which such Reporting Person has:

     (i) sole power to vote or to direct the vote: 0 shares for each Reporting Person

     (ii) shared power to vote or to direct the vote: 19,420,070 shares for CPS II, CPS Fund II-A, and each Managing Member (includes (on a fully converted basis): (i) 566,400 shares of Common Stock issuable upon conversion of 141,600 shares of Preferred Stock owned by CPS Fund II-A, (ii) 368,160 shares of Common Stock issuable upon exercise of currently exercisable Warrants owned by CPS Fund II-A, (iii) 33,600 shares of Common Stock issuable upon conversion of 8,400 shares of Preferred Stock owned by CPS Fund II-B; (iv) 21,840 shares of Common Stock issuable upon exercise of currently exercisable Warrants owned by CPS Fund II-B, (v) an aggregate of 12,851,566 shares of Common Stock owned by other parties to the Voting Agreement; and (vi) an aggregate of 5,578,504 shares of Common Stock issuable upon conversion of 1,394,626 shares of Preferred Stock owned by other parties to the Voting Agreement).

               990,000 shares for CPS Fund II-B (includes (on a fully converted basis): (i) 566,400 shares of Common Stock issuable upon conve rsion of 141,600 shares of Preferred Stock owned by CPS Fund II-A, (ii) 368,160 shares issuable upon exercise of currently exercisable Warrants owned by CPS Fund II-A, (iii) 33,600 shares of Common Stock issuable upon conversion of 8,400 shares of Preferred Stock owned by CPS Fund II-B; and (iv) 21,840 shares of Common Stock issuable upon exercise of currently exercisable Warrants owned by CPS Fund II-B).

     (iii) sole power to dispose or to direct the disposition: 0 shares for each Reporting Person

     (iv) shared power to dispose or to direct the disposition: 990,000 shares for CPS II, CPS Fund II-A, CPS Fund II-B and each Managing Member (includes (on a fully converted basis): (i) 566,400 shares of Common Stock issuable upon conversion of 141,600 shares of Preferred Stock owned by CPS Fund II-A, (ii) 368,160 shares issuable upon exercise of currently exercisable Warrants owned by CPS Fund II-A, (iii) 33,600 shares of Common Stock issuable upon conv ersion of 8,400 shares of Preferred Stock owned by CPS Fund II-B; and (iv) 21,840 shares of Common Stock issuable upon exercise of currently exercisable Warrants owned by CPS Fund II-B).

(c) Except as set forth in this Schedule 13D, none of the Reporting Persons has effected any transaction in any Securities during the last 60 days.

(d) No other person is known to have the right to receive or the power to direct the receipt of dividends from, or any proceeds from the sale of, the Securities beneficial ly owned by any of the Reporting Persons.

(e) Not applicable.

 

Page 14 of 17
       
Item 6.Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer
       As reported by the Company in its Form 8-K filed on February 12, 2003, CPS Fund II-A and CPS Fund II-B entered into the Purchase Agreement, with the Company and the other parties thereto, pursuant to which (i) the Company agrees to issue and sell to the persons identified as purchasers in the Purchase Agreement, and such purchasers agree to purchase, for purchase consideration equivalent to $0.79 per share, an aggregate of 18,992,391 shares of Commo n Stock and Warrants to purchase up to 4,273272 shares of Common Stock at an exercise price of $1.07 per share, for an aggregate purchase price of approximately $15,004,000, in a private placement, and (ii) the Company agrees to cancel certain Warrants currently exercisable for an aggregate of 4,016,024 shares of Common Stock of the Company at an exercise price of $6.97 per share, previously issued pursuant to the 2001 Purchase Agreement, and to reissue Warrants exercisable for a like number of shares of Co mmon Stock at an exercise price of $1.12 per share, in accordance with the Repricing Agreement. Consummation of the Financing is subject to, among other closing conditions, the approval of the shareholders of the Company.

     Pursuant to the Purchase Agreement, (i) CPS Fund II-A agrees to purchase 1,194,936 shares of Common Stock and a Warrant exercisable for up to 268,860 shares of Common Stock for a purchase price of $943,999.44, and (ii) CPS Fund II-B agrees to purchase 70,88 6 shares of Common Stock and a Warrant exercisable for up to 15,949 shares of Common Stock for a purchase price of $55,999.94. In addition, pursuant to the Repricing Agreement, the current Warrants held by each of CPS Fund II-A and CPS Fund II-B currently exercisable for 368,160 and 21,840 shares of Common Stock, respectively, at an exercise price of $6.97 per share, will be cancelled and will be replaced by Warrants exercisable for a like number of shares of Common Stock at an exercise price of $1.12 per s hare.

     In connection with the Purchase Agreement, CPS Fund II-A entered into the Voting Agreement, whereby each of the parties thereto agrees to vote the shares of Common Stock and Preferred Stock (on a Common Stock equivalent basis) specified next to such party's name on Exhibit A to the Voting Agreement in favor of the Financing. As a party to the Voting Agreement, CPS Fund II-A agrees to vote the 141,600 shares of Preferred Stock (566,400 shares of Common Stock on a fully converted basis) of the Company held by it in favor of the Financing. By virtue of having entered into the Voting Agreement, CPS Fund II-A may be deemed to be a member of a “Group” with the other parties to the Voting Agreement, and may be deemed to share beneficial ownership of the Securities of the Company beneficially owned by such other parties to the Voting Agreement. Information regarding the parties to the Voting Agreement and the Securities owned by them is set forth in the Table and the f ootnotes thereto included in Item 3 above, which are hereby incorporated by reference herein. The Voting Agreement will terminate on the earlier of (i) the closing of the transactions pursuant to the Purchase Agreement, (ii) termination of the Purchase Agreement pursuant to the terms thereof, (iii) the written agreement of all parties to the Voting Agreement, or (iv) April 30, 2003. CPS Fund II-B is not a party to the Voting Agreement.

     In reliance on Rule 13d-1(k)(2) of the Exchange Act, all information relating to the other parties to the Voting Agreement included in this Schedule 13D, is based solely on the information set forth in, and attached as exhibits and schedules to, the Voting Agreement, the Purchase Agreement, the Repricing Agreement and the Preliminary Proxy Statement filed by the Company with the Securities and Exchange Commission on February 11, 2003. None of CPS II, CPS Fund II-A, CPS Fund II-B and Messrs. Hughes, Johnston and Warnock knows or has reason to kno w of any information relating to the (i) legal organization or citizenship, as applicable, (ii) ownership, (iii) principal business address, (iv) principal business purpose, (v) legal proceedings, and (vi) ownership of Securities of the Company, of the parties to the Voting Agreement or any other agreement, except for the information included in response to Item 3 of this Schedule 13D.

     Each of CPS II, CPS Fund II-A, CPS Fund II-B and each Managing Member disclaim all benefic ial ownership of all Securities of the Company directly and indirectly beneficially owned by parties to the Voting Agreement and any other agreement, except for its or his pecuniary interest in the Securities of the Company beneficially owned by CPS Fund II-A and CPS Fund II-A. Each of CPS Fund II-A and CPS Fund II-B disclaims beneficial ownership of Securities of the Company directly or indirectly beneficially owned by the other. Each of CPS II, CPS Fund II-A, CPS Fund II-B and each Managing Member disclai ms it is a member of a “Group” with the parties to the Voting Agreement or any other agreement, and with each other, for purposes of filing this Schedule 13D and for every other purpose.

 

Page 15 of 17
       
Item 7.Material to Be Filed as Exhibits
  Exhibit 1 - Agreement regarding filing of joint Schedule 13D.

Exhibit 2 - Securities Purchase Agreement dated as of February 10, 2003*

Exhibit 3 - Voting Agreement dated as of February 10, 2003

Exhibit 4 - Repricing Agreement dated as of February 10, 2003 **

 

     *     Incorporated by reference from Exhibit 10.1 of Form 8-K of the Company filed with the Securities and Exchange Commission on February 13, 2003.

     **     Incorporated by reference from Exhibit 10.1 of Form 8-K of the Company filed with the Securities and Exchange Commission on February 13, 2003.

 

Page 16 of 17

Signature

     After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

February 20, 2003

Date

CAMDEN PARTNERS STRATEGIC II, LLC

/S/ Donald W. Hughes

Signature

By: Donald W. Hughes, as Managing Member

Name/Title

CAMDEN PARTNERS STRATEGIC FUND II-A, L.P.
By:CAMDEN PARTNERS STRATEGIC II, LLC, as sole General Partner

/S/ Donald W. Hughes

Signature
By: Donald W. Hughes, as Managing Member

Name/Title

CAMDEN PARTNERS STRATEGIC FUND II-B, L.P.

By:CAMDEN PARTNERS STRATEGIC II, LLC, as sole General Partner

/S/ Donald W. Hughes

Signature

By: Donald W. Hughes, as Managing Member
Name/Title

/S/ Donald W. Hughes

Donald W. Hughes

/S/ Richard M. Johnston

Richard M. Johnston

/S/ David L. Warnock

David L. Warnock
Attention: Intentional misstatements or omissions of fact constitute Federal
criminal violations (See 18 U.S.C. 1001)
Last update 12/05/02

 

 

Page 17 of 17

EXHIBIT 1

AGREEMENT

     Pursuant to Rule 13d-1(f)(1) under the Securities Exchange Act of 1934, as amended, the undersigned hereby agree that only one statement containing the information required by Schedule 13D need be filed with respect to the ownership by each of he undersigned of securities of Aradigm Corporation.

EXECUTED this 20 day of February 2003

CAMDEN PARTNERS STRATEGIC II, LLC

/S/ Donald W. Hughes

Signature

By: Donald W. Hughes, as Managing Member
Name/Title

CAMDEN PARTNERS STRATEGIC FUND II-A, L.P.
By: CAMDEN PARTNERS STRATEGIC II, LLC, as sole General Partner

/S/ Donald W. Hughes

Signature

By: Donald W. Hughes, as Managing Member
Name/Title

CAMDEN PARTNERS STRATEGIC FUND II-B, L.P.
By: CAMDEN PARTNERS STRATEGIC II, LLC, as sole General Partner

/S/ Donald W. Hughes

Signature

By: Donald W. Hughes, as Managing Member
Name/Title

/S/ Donald W. Hughes

Donald W. Hughes

/S/ Richard M. Johnston

Richard M. Johnston

/S/ David L. Warnock

David L. Warnock

  EX-3 3 w83777exv3.htm EXHIBIT 3 exv3

 

EXHIBIT 3

VOTING AGREEMENT

     This Voting Agreement (the “Agreement”) is made and entered into as of this 10th day of February, 2003, by and among New Enterprise Associates (“NEA”) and those certain persons and entities listed on Exhibit A hereto (the “Shareholders”).

Witnesseth

     Whereas, NEA and certain other investors are purchasing shares of Common Stock (the “Common Stock”) of Aradigm Corporation (the “Company”) and warrants (the “Warrants”) to purchase Common Stock, pursuant to that certain Securities Purchase Agreement (the “Purchase Agreement”) of even date herewith and the Company is canceling and reissuing certain Common Stock Warrants, previously issued pursuant to the Securities Purchase Agreement dated December 11, 2001, to NEA and certain other investors, pursuant to that certain Warrant Repricing Agreement (the “Warrant Agreement”) of even date herewith (collectively, the “Financing”);

     Whereas, each Shareholder is a holder of record and the “beneficial owner” (within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934) of certain shares of capital stock of the Company; and

     Whereas, in connection with the consummation of the Financing, and in order to induce NEA to enter into the Purchase Agreement and the Warrant Agreement, the Shareholders have agreed to provide for the future voting of their shares of the Company’s capital stock as set forth below.

     Now, Therefore, in consideration of these premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

AGREEMENT

1.   Voting.

     1.1   Shareholder Shares. The Shareholders each agree to hold all shares of voting capital stock of the Company registered in their respective names or beneficially owned by them as of the date hereof and any and all other securities of the Company legally or beneficially acquired by each of the Shareholders after the date hereof and on or prior to the date of the Shareholder Meeting (as defined below) (hereinafter collectively referred to as the “Shareholder Shares”) subject to, and to vote the Shareholder Shares in accordance with, the provisions of this Agreement.

     1.2   Purchase Agreement and Financing. At any meeting of shareholders of the Company, however called (the “Shareholder Meeting”), the Shareholders shall vote all of their respective Shareholder Shares to be voted in favor of the approval of the Financing, the

1

 

execution, delivery and performance by the Company of the Purchase Agreement, the execution, delivery and performance by the Company of the Warrant Agreement and the adoption and approval of the terms thereof and in favor of each of the other actions contemplated by the Purchase Agreement and the Warrant Agreement and any action required in furtherance thereof. The foregoing notwithstanding, if the terms of the Financing, the Purchase Agreement or the Warrant Agreement are materially changed or amended after the date hereof, no Shareholder shall have any obligations under the provisions of Section 1.1 or this Section 1.2 if such Shareholder reasonably believes that such change or amendment is adverse to the rights or interests of the Company or such Shareholder.

     1.3   Successors. The provisions of this Agreement shall be binding upon the successors in interest to any of the Shareholder Shares.

     1.4   Other Rights. Except as provided by this Agreement or any other agreement entered into in connection with the Financing, each Shareholder shall exercise the full rights of a holder of capital stock of the Company with respect to the Shareholder Shares, respectively.

2.   Termination.

     2.1   This Agreement shall continue in full force and effect from the date hereof through the earliest of the following dates, on which date it shall terminate in its entirety:

  (a)   the Closing Date (as defined in the Purchase Agreement);
 
  (b)   the date as of which the parties hereto terminate this Agreement by written consent of (i) NEA and (ii) a majority in interest of the Shareholders;
 
  (c)   the termination of the Purchase Agreement pursuant to Section 9.1 thereof; or
 
  (d)   April 30, 2003.

3.   Miscellaneous.

     3.1   Ownership. Each Shareholder represents and warrants to NEA that (a) such Shareholder now owns, or will own upon the Shareholder Meeting, the Shareholder Shares, free and clear of liens or encumbrances, and has not, prior to or on the date of this Agreement, executed or delivered any proxy or entered into any other voting agreement or similar arrangement other than one which has expired or terminated prior to the date hereof, and (b) such Shareholder has full power and capacity to execute, deliver and perform this Agreement, which has been duly executed and delivered by, and evidences the valid and binding obligation of, such Shareholder enforceable in accordance with its terms.

     3.2   Specific Performance. The parties hereto hereby declare that it is impossible to measure in money the damages which will accrue to a party hereto or to their heirs, personal representatives, or assigns by reason of a failure to perform any of the obligations under this Agreement and agree that the terms of this Agreement shall be specifically enforceable. If any party hereto or his heirs, personal representatives, or assigns institutes any action or proceeding

2

 

to specifically enforce the provisions hereof, any person against whom such action or proceeding is brought hereby waives the claim or defense therein that such party or such personal representative has an adequate remedy at law, and such person shall not offer in any such action or proceeding the claim or defense that such remedy at law exists.

     3.3   Governing Law. This Agreement, and the rights of the parties hereto, shall be governed by and construed in accordance with the laws of the State of California as such laws apply to agreements among California residents made and to be performed entirely within the State of California.

     3.4   Amendment or Waiver. This Agreement may be amended (or provisions of this Agreement waived) only by an instrument in writing signed by (i) NEA and (ii) a majority in the interest of the Shareholders. Any amendment or waiver so effected shall be binding upon each of the parties hereto and any assignee of any such party.

     3.5   Severability. In the event one or more of the provisions of this Agreement should, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions of this Agreement, and this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein.

     3.6   Transfers to Affiliates. In the event a Shareholder transfers any of its Shareholder Shares to an affiliate of such Shareholder, such Shareholder shall cause such affiliate to do all things and execute and deliver all documents, as may be necessary to have such affiliate execute a written agreement, substantially in the form of this Agreement, pursuant to which such person becomes a party to this Agreement and agrees to be bound by all the provisions hereof as if such affiliate were a Shareholder.

     3.7   Additional Shares. In the event that subsequent to the date of this Agreement any shares or other securities are issued on, or in exchange for, any of the Shareholder Shares by reason of any stock dividend, stock split, combination of shares, reclassification or the like, such shares or securities shall be deemed to be Shareholder Shares, as the case may be, for purposes of this Agreement.

     3.8   Counterparts. This Agreement may be executed in one or more counterparts, each of which will be deemed an original but all of which together shall constitute one and the same agreement.

     3.9   Waiver. No waivers of any breach of this Agreement extended by any party hereto to any other party shall be construed as a waiver of any rights or remedies of any other party hereto or with respect to any subsequent breach.

     3.10   Attorney’s Fees. In the event that any suit or action is instituted to enforce any provision in this Agreement, the prevailing party in such dispute shall be entitled to recover from the losing party all fees, costs and expenses of enforcing any right of such prevailing party under or with respect to this Agreement, including without limitation, such reasonable fees and expenses of attorneys and accountants, which shall include, without limitation, all fees, costs and expenses of appeals.

3

 

     3.11   Notices. Any notices required in connection with this Agreement shall be in writing and shall be deemed effectively given: (i) upon personal delivery to the party to be notified, (ii) when sent by confirmed electronic mail or facsimile if sent during normal business hours of the recipient; if not, then on the next business day, (iii) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (iv) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written notification of receipt. All notices shall be addressed to the holder appearing on the books of the Company or at such address as such party may designate by ten (10) days advance written notice to the other parties hereto.

     3.12   Entire Agreement. This Agreement and the Exhibits hereto, along with the Purchase Agreement and each of the Exhibits thereto, constitute the full and entire understanding and agreement between the parties with regard to the subjects hereof and thereof and no party shall be liable or bound to any other in any manner by any representations, warranties, covenants and agreements except as specifically set forth herein and therein.

     3.13   Massachusetts Business Trusts. A copy of the Agreement and Declaration of Trust of each Purchaser that is a fund or series investment company (each, a “Fund”) organized as a Massachusetts business trust (each, a “Trust”) is on file with the Secretary of the Commonwealth of Massachusetts. NEA and the other Shareholders acknowledge and agree that this Agreement is not executed on behalf of or binding upon any of the trustees, officers, directors or shareholders of a Trust individually, but is binding upon the applicable Fund and its assets and property. NEA agrees that no trustee, officer, director or shareholder of a Trust or the applicable Fund may be held personally liable or responsible for any obligations of a Fund arising out of this Agreement. With respect to all obligations of the Fund arising out of this Agreement, NEA shall look for payment or satisfaction of any claim solely to the assets and property of the Fund. NEA is expressly put on notice that the rights and obligations of each series of shares of a Trust under its Agreement and Declaration of Trust are separate and distinct from those of any and all other series.

[THIS SPACE INTENTIONALLY LEFT BLANK]

4

 

     In Witness Whereof, the parties hereto have executed this Voting Agreement as of the date first above written.

           
  NEW ENTERPRISE ASSOCIATES:
 
  New Enterprise Associates 10, Limited Partnership
  By:   NEA Partners 10, Limited Partnership
Its General Partner
 
  By:   /s/ Eugene A. Trainor, III
 
      Name:   Eugene A. Trainer III
Administrative General Partner & Chief Operating Officer
 
      Title:   General Partner

 

 

           
  NOVO NORDISK A/S
 
 
  By:   /s/ Lars G. Karlsen
 
      Name:   Lars G. Karlsen, Senior Vice President
Protein Delivery Systems, Management
 
      Title:    
         
 
 
  State Street Research Aurora Fund, a Series of State Street Research Capital Trust
 
  By: State Street Research & Management Company, as Investment Adviser
 
  By:   /s/ Peter A. Zuger
 
      Name:   Peter A. Zuger
 
      Title:   Managing Director
 
 
  State Street Research Aurora Portfolio, a Series of Metropolitan Series Fund, Inc.
 
  By: State Street Research & Management Company, as Investment Sub-Adviser
 
  By:   /s/ Peter A. Zuger
 
      Name:   Peter A. Zuger
 
      Title:   Managing Director

 

 

           
  State Street Research Health Sciences Fund, a Series of the State Street Research Financial Trust
 
  By:   /s/ illegible
 
      Title:   Vice President
 
 
  MPM BioEquities Master Fund LP
 
  By:   /s/ Kurt von Emster
 
      Name:   Kurt von Emster
 
      Title:   Managing Member
 
 
  Domain Public Equity Partners, L.P.
 
  By: Domain Public Equity Associates, LLC
 
  By:   Its General Partner
 
      Name:   /s/ Nicole Vitullo
 
      Title:   Managing Member
 
 
  Camden Partners Strategic Fund II-A, L.P.
 
  By: Camden Partners Strategic II, LLC, its general partner
 
  By:   /s/ Richard M. Johnston
 
      Name:   Richard M. Johnston
 
      Title:   Managing Member

 

 

           
  Ursus Offshore Ltd.
 
 
  By:   /s/ illegible
 
      Title:   Managing Director
 
 
  [Name of Shareholder]
 
 
  By:   /s/ Richard Paul Thompson
 
      Name:   Richard Paul Thompson

 

Exhibit A

LIST OF SHAREHOLDERS

                         
                    Common Stock and
                    Preferred Stock
    Number of Shares of   Number of Shares of   Combined Voting
Beneficial Owner   Common Stock   Preferred Stock   Power Percentage*
 
 
 
New Enterprise Associates 10, Limited Partnership
     2,489,585       1,033,057       16.9 %
Novo Nordisk Pharmaceuticals, Inc.
     7,868,369               20.1  
State Street Research Aurora Fund
     1,282,500               3.3  
State Street Research Aurora Portfolio
     295,900               0.8  
State Street Research Health Sciences Fund
     288,100               0.7  
MPM BioEquities Master Fund LP
             206,611       2.1  
Domain Public Equity Partners, LP
     128,000       154,958       1.9  
Camden Partners Strategic Fund II-A, LP
             141,600       1.4  
Ursus Offshore Limited
     198,900               0.5  
Richard Thompson
     300,212               .8  
Total
                     48.5  

*   Applicable percentages are based on 31,157,612 shares of Common Stock and 2,001,236 shares of Preferred Stock (convertible at any time into 8,004,944 shares of Common Stock) outstanding on January 31, 2003.
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