SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Amendment No. 3
Under the Securities Exchange Act of 1934
Flamel Technologies S.A.
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(Name of Issuer)
Ordinary Shares
----------------------------------------
(Title of Class of Securities)
338488 10 9
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(CUSIP Number)
Eileen McCarthy
One Post Office Square, Suite 3800
Boston, MA 02109
(617) 482-8020
---------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
April 6, 2000
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box
[ ].
Check the following box if a fee is being paid with this statement [ ].
(A fee is not required only if the reporting person: (1) has a previous
statement on file reporting beneficial ownership of more than five percent of
the class of securities described in Item 1; and (2) has filed no amendment
subsequent thereto reporting beneficial ownership of five percent or less of
such class. (See Rule 13d-7).
Note: Six copies of this statement, including all exhibits, should be
filed with the Commission. See Rule 13d-1(a) 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 the 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, as amended (the "Exchange Act") or otherwise subject to the
liabilities of that section of the Exchange Act but shall be subject to all
other provisions of the Exchange Act.
(Continued on following page(s))
Page 1 of 19 Pages
CUSIP No. 0338488 10 9 13D Page 2 of 19 Pages
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(1) Names of Reporting Persons. SS or I.R.S. Identification Nos. of
Above Persons
Alta Partners
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(2) Check The Appropriate Box If A Member Of A Group (a):
(b))X
- --------------------------------------------------------------------------------
(3) SEC Use Only
- --------------------------------------------------------------------------------
(4) Source Of Funds*
WC
- --------------------------------------------------------------------------------
(5) Check Box If Disclosure Of Legal Proceedings Is Required Pursuant
To Items 2(d) Or 2(e)
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(6) Citizenship Or Place Of Organization
California
- --------------------------------------------------------------------------------
Number Of Shares (7) Sole Voting Power 4,050,000
Beneficially Owned See Footnote 1
By Each Reporting
Person With (8) Shared Voting Power -0-
(9) Sole Dispositive Power 4,050,000
See Footnote 1
(10) Shared Dispositive Power -0-
(11) Aggregate Amount Beneficially Owned By Each Reporting Person
4,050,000 Please See Footnote 1
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(12) Check If The Aggregate Amount In Row (11) Excludes Certain Shares*
- --------------------------------------------------------------------------------
(13) Percent Of Class Represented By Amount In Row (11)
20.4%
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(14) Type Of Reporting Person
CO
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*SEE INSTRUCTION BEFORE FILLING OUT!
Footnote 1: Includes 1,875,000 shares of ordinary shares and Warrants to
purchase 1,050,000 shares of Class A (BSA) and 1,125,000 shares of Class B (BSA)
or Class C (BSA). See Exhibits E and F for terms for exercising the warrants
(BSA).
CUSIP No. 0338488 10 9 13D Page 3 of 19 Pages
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(1) Names of Reporting Persons. SS or I.R.S. Identification Nos. of
Above Persons
Alta BioPharma Partners, L.P.
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(2) Check The Appropriate Box If A Member Of A Group (a):
(b))X
- --------------------------------------------------------------------------------
(3) SEC Use Only
- --------------------------------------------------------------------------------
(4) Source Of Funds*
WC
- --------------------------------------------------------------------------------
(5) Check Box If Disclosure Of Legal Proceedings Is Required Pursuant
To Items 2(d) Or 2(e)
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(6) Citizenship Or Place Of Organization
Delaware
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Number Of Shares (7) Sole Voting Power 2,517,428
Beneficially Owned See Footnote 2
By Each Reporting
Person With (8) Shared Voting Power -0-
(9) Sole Dispositive Power 2,517,428
See Footnote 2
(10) Shared Dispositive Power -0-
(11) Aggregate Amount Beneficially Owned By Each Reporting Person
2,517,428 See Footnote 2
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(12) Check If The Aggregate Amount In Row (11) Excludes Certain Shares*
- --------------------------------------------------------------------------------
(13) Percent Of Class Represented By Amount In Row (11)
12.7%
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(14) Type Of Reporting Person
PN
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*SEE INSTRUCTION BEFORE FILLING OUT!
Footnote 2: Includes 1,165,474 shares of ordinary shares and Warrants to
purchase 652,666 shares of Class A (BSA) and 699,288 shares of Class B (BSA) or
Class C (BSA). See Exhibits E and F for terms for exercising the warrants (BSA).
CUSIP No. 0338488 10 9 13D Page 4 of 19 Pages
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(1) Names of Reporting Persons. SS or I.R.S. Identification Nos. of
Above Persons
Alta Embarcadero BioPharma, LLC
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(2) Check The Appropriate Box If A Member Of A Group (a):
(b))X
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(3) SEC Use Only
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(4) Source Of Funds*
WC
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(5) Check Box If Disclosure Of Legal Proceedings Is Required Pursuant
To Items 2(d) Or 2(e)
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(6) Citizenship Or Place Of Organization
California
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Number Of Shares (7) Sole Voting Power 94,887
Beneficially Owned See Footnote 3
By Each Reporting
Person With (8) Shared Voting Power -0-
(9) Sole Dispositive Power 94,887
See Footnote 3
(10) Shared Dispositive Power -0-
(11) Aggregate Amount Beneficially Owned By Each Reporting Person
94,887 See Footnote 3
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(12) Check If The Aggregate Amount In Row (11) Excludes Certain Shares*
- --------------------------------------------------------------------------------
(13) Percent Of Class Represented By Amount In Row (11)
.5%
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(14) Type Of Reporting Person
CO
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*SEE INSTRUCTION BEFORE FILLING OUT!
Footnote 3: Includes 43,929 shares of ordinary shares and Warrants to purchase
24,600 shares of Class A (BSA) and 26,358 shares of Class B (BSA) or Class C
(BSA). See Exhibits E and F for terms for exercising the warrants (BSA).
CUSIP No. 0338488 10 9 13D Page 5 of 19 Pages
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(1) Names of Reporting Persons. SS or I.R.S. Identification Nos. of
Above Persons
Flamel Chase Partners (Alta Bio), LLC
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(2) Check The Appropriate Box If A Member Of A Group (a):
(b))X
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(3) SEC Use Only
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(4) Source Of Funds*
WC
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(5) Check Box If Disclosure Of Legal Proceedings Is Required Pursuant
To Items 2(d) Or 2(e)
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(6) Citizenship Or Place Of Organization
Delaware
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Number Of Shares (7) Sole Voting Power 1,437,685
Beneficially Owned See Footnote 4
By Each Reporting
Person With (8) Shared Voting Power -0-
(9) Sole Dispositive Power 1,437,685
See Footnote 4
(10) Shared Dispositive Power -0-
(11) Aggregate Amount Beneficially Owned By Each Reporting Person
1,437,685 See Footnote 4
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(12) Check If The Aggregate Amount In Row (11) Excludes Certain Shares*
- --------------------------------------------------------------------------------
(13) Percent Of Class Represented By Amount In Row (11)
7.2%
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(14) Type Of Reporting Person
CO
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*SEE INSTRUCTION BEFORE FILLING OUT!
Footnote 4: Includes 665,597 shares of ordinary shares and Warrants to purchase
372,734 shares of Class A (BSA) and 399,354 shares of Class B (BSA) or Class C
(BSA). See Exhibits E and F for terms of exercising the warrants (BSA).
CUSIP No. 0338488 10 9 13D Page 6 of 19 Pages
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(1) Names of Reporting Persons. SS or I.R.S. Identification Nos. of
Above Persons
Alta BioPharma Management, LLC
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(2) Check The Appropriate Box If A Member Of A Group (a):
(b))X
- --------------------------------------------------------------------------------
(3) SEC Use Only
- --------------------------------------------------------------------------------
(4) Source Of Funds*
WC
- --------------------------------------------------------------------------------
(5) Check Box If Disclosure Of Legal Proceedings Is Required Pursuant
To Items 2(d) Or 2(e)
- --------------------------------------------------------------------------------
(6) Citizenship Or Place Of Organization
Delaware
- --------------------------------------------------------------------------------
Number Of Shares (7) Sole Voting Power 2,517,428
Beneficially Owned See Footnote 5
By Each Reporting
Person With (8) Shared Voting Power -0-
(9) Sole Dispositive Power 2,517,428
(10) Shared Dispositive Power -0-
(11) Aggregate Amount Beneficially Owned By Each Reporting Person
2,517,428 See Footnote 5
- --------------------------------------------------------------------------------
(12) Check If The Aggregate Amount In Row (11) Excludes Certain Shares*
- --------------------------------------------------------------------------------
(13) Percent Of Class Represented By Amount In Row (11)
12.7%
- --------------------------------------------------------------------------------
(14) Type Of Reporting Person
CO
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*SEE INSTRUCTION BEFORE FILLING OUT!
Footnote 5: Includes 1,165,474 shares of ordinary shares and Warrants to
purchase 652,666 shares of Class A (BSA) and 699,288 shares of Class B (BSA) or
Class C (BSA). See Exhibits E and F for terms of exercising the warrants (BSA).
CUSIP No. 0338488 10 9 13D Page 7 of 19 Pages
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(1) Names of Reporting Persons. SS or I.R.S. Identification Nos. of
Above Persons
Alta/Chase BioPharma Management, LLC
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(2) Check The Appropriate Box If A Member Of A Group (a):
(b))X
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(3) SEC Use Only
- --------------------------------------------------------------------------------
(4) Source Of Funds*
WC
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(5) Check Box If Disclosure Of Legal Proceedings Is Required Pursuant
To Items 2(d) Or 2(e)
- --------------------------------------------------------------------------------
(6) Citizenship Or Place Of Organization
Delaware
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Number Of Shares (7) Sole Voting Power 1,437,685
Beneficially Owned See Footnote 6
By Each Reporting
Person With (8) Shared Voting Power -0-
(9) Sole Dispositive Power 1,437,685
See Footnote 6
(10) Shared Dispositive Power -0-
(11) Aggregate Amount Beneficially Owned By Each Reporting Person
1,437,685 See Footnote 6
- --------------------------------------------------------------------------------
(12) Check If The Aggregate Amount In Row (11) Excludes Certain Shares*
- --------------------------------------------------------------------------------
(13) Percent Of Class Represented By Amount In Row (11)
7.2%
- --------------------------------------------------------------------------------
(14) Type Of Reporting Person
CO
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*SEE INSTRUCTION BEFORE FILLING OUT!
Footnote 6: Includes 665,597 shares of ordinary shares and Warrants to purchase
372,734 shares of Class A (BSA) and 399,354 shares of Class B (BSA) or Class C
(BSA). See Exhibits E and F for terms of exercising the warrants (BSA).
CUSIP No. 0338488 10 9 13D Page 8 of 19 Pages
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(1) Names of Reporting Persons. SS or I.R.S. Identification Nos. of
Above Persons
Jean Deleage
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(2) Check The Appropriate Box If A Member Of A Group (a):
(b)X
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(3) SEC Use Only
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(4) Source Of Funds*
AF
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(5) Check Box If Disclosure Of Legal Proceedings Is Required Pursuant
To Items 2(d) Or 2(e)
- --------------------------------------------------------------------------------
(6) Citizenship Or Place Of Organization
U.S.A.
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Number Of Shares (7) Sole Voting Power 1
Beneficially Owned See Footnote 7a
By Each Reporting
Person With (8) Shared Voting Power 4,050,000
See Footnote 7
(9) Sole Dispositive Power 1
See Footnote 7a
(10) Shared Dispositive Power 4,050,000
See Footnote 7
(11) Aggregate Amount Beneficially Owned By Each Reporting Person
4,050,001 See Footnote 7 and 8
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(12) Check If The Aggregate Amount In Row (11) Excludes Certain Shares*
- --------------------------------------------------------------------------------
(13) Percent Of Class Represented By Amount In Row (11)
20.4%
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(14) Type Of Reporting Person
IN
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*SEE INSTRUCTION BEFORE FILLING OUT!
Footnote 7: Includes 1,875,000 shares of ordinary shares and Warrants to
purchase 1,050,000 shares of Class A (BSA) and 1,125,000 shares of Class B (BSA)
or Class C (BSA). See Exhibits E and F for terms of exercising the warrants
(BSA).
Footnote 7a: In addition Jean Deleage owns 1 share of Flamel Ordinary Shares.
According to French law each director on the Company board must own 1 share of
the company's stock.
CUSIP No. 0338488 10 9 13D Page 9 of 19 Pages
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(1) Names of Reporting Persons. SS or I.R.S. Identification Nos. of
Above Persons
Garrett Gruener
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(2) Check The Appropriate Box If A Member Of A Group (a):
(b)X
- --------------------------------------------------------------------------------
(3) SEC Use Only
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(4) Source Of Funds*
AF
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(5) Check Box If Disclosure Of Legal Proceedings Is Required Pursuant
To Items 2(d) Or 2(e)
- --------------------------------------------------------------------------------
(6) Citizenship Or Place Of Organization
U.S.A.
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Number Of Shares (7) Sole Voting Power 1,000
Beneficially Owned
By Each Reporting
Person With (8) Shared Voting Power 4,050,000
See Footnote 8
(9) Sole Dispositive Power 1,000
(10) Shared Dispositive Power 4,050,000
See Footnote 8
(11) Aggregate Amount Beneficially Owned By Each Reporting Person
4,051,000 See Footnote 8
- --------------------------------------------------------------------------------
(12) Check If The Aggregate Amount In Row (11) Excludes Certain Shares*
- --------------------------------------------------------------------------------
(13) Percent Of Class Represented By Amount In Row (11)
20.4%
- --------------------------------------------------------------------------------
(14) Type Of Reporting Person
IN
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*SEE INSTRUCTION BEFORE FILLING OUT!
Footnote 8: Includes 1,875,000 shares of ordinary shares and Warrants to
purchase 1,050,000 shares of Class A (BSA) and 1,125,000 shares of Class B (BSA)
or Class C (BSA). See Exhibits E and F for terms of exercising the warrants
(BSA). In addition, Mr. Gruener owns 1,000 shares in his BEDCO Pension and
Profit Sharing.
CUSIP No. 0338488 10 9 13D Page 10 of 19 Pages
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(1) Names of Reporting Persons. SS or I.R.S. Identification Nos. of
Above Persons
Daniel Janney
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(2) Check The Appropriate Box If A Member Of A Group (a):
(b)X
- --------------------------------------------------------------------------------
(3) SEC Use Only
- --------------------------------------------------------------------------------
(4) Source Of Funds*
AF
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(5) Check Box If Disclosure Of Legal Proceedings Is Required Pursuant
To Items 2(d) Or 2(e)
- --------------------------------------------------------------------------------
(6) Citizenship Or Place Of Organization
U.S.A.
- --------------------------------------------------------------------------------
Number Of Shares (7) Sole Voting Power -0-
Beneficially Owned
By Each Reporting
Person With (8) Shared Voting Power 4,050,000
See Footnote 9
(9) Sole Dispositive Power -0-
(10) Shared Dispositive Power 4,050,000
See Footnote 9
(11) Aggregate Amount Beneficially Owned By Each Reporting Person
4,050,000 See Footnote 9
- --------------------------------------------------------------------------------
(12) Check If The Aggregate Amount In Row (11) Excludes Certain Shares*
- --------------------------------------------------------------------------------
(13) Percent Of Class Represented By Amount In Row (11)
20.4%
- --------------------------------------------------------------------------------
(14) Type Of Reporting Person
IN
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*SEE INSTRUCTION BEFORE FILLING OUT!
Footnote 9: Includes 1,875,000 shares of ordinary shares and Warrants to
purchase 1,050,000 shares of Class A (BSA) and 1,125,000 shares of Class B (BSA)
or Class C (BSA). See Exhibits E and F for terms of exercising the warrants
(BSA).
CUSIP No. 0338488 10 9 13D Page 11 of 19 Pages
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(1) Names of Reporting Persons. SS or I.R.S. Identification Nos. of
Above Persons
Alix Marduel
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(2) Check The Appropriate Box If A Member Of A Group (a):
(b)X
- --------------------------------------------------------------------------------
(3) SEC Use Only
- --------------------------------------------------------------------------------
(4) Source Of Funds*
AF
- --------------------------------------------------------------------------------
(5) Check Box If Disclosure Of Legal Proceedings Is Required Pursuant
To Items 2(d) Or 2(e)
- --------------------------------------------------------------------------------
(6) Citizenship Or Place Of Organization
U.S.A.
- --------------------------------------------------------------------------------
Number Of Shares (7) Sole Voting Power -0-
Beneficially Owned
By Each Reporting
Person With (8) Shared Voting Power 4,050,000
See Footnote 10
(9) Sole Dispositive Power -0-
(10) Shared Dispositive Power 4,050,000
See Footnote 10
(11) Aggregate Amount Beneficially Owned By Each Reporting Person
4,050,000 See Footnote 10
- --------------------------------------------------------------------------------
(12) Check If The Aggregate Amount In Row (11) Excludes Certain Shares*
- --------------------------------------------------------------------------------
(13) Percent Of Class Represented By Amount In Row (11)
20.4%
- --------------------------------------------------------------------------------
(14) Type Of Reporting Person
IN
- --------------------------------------------------------------------------------
*SEE INSTRUCTION BEFORE FILLING OUT!
Footnote 10: Includes 1,875,000 shares of ordinary shares and Warrants to
purchase 1,050,000 shares of Class A (BSA) and 1,125,000 shares of Class B (BSA)
or Class C (BSA). See Exhibits E and F for terms of exercising the warrants
(BSA).
CUSIP No. 0338488 10 9 13D Page 12 of 19 Pages
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(1) Names of Reporting Persons. SS or I.R.S. Identification Nos. of
Above Persons
Guy Nohra
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(2) Check The Appropriate Box If A Member Of A Group (a):
(b)X
- --------------------------------------------------------------------------------
(3) SEC Use Only
- --------------------------------------------------------------------------------
(4) Source Of Funds*
AF
- --------------------------------------------------------------------------------
(5) Check Box If Disclosure Of Legal Proceedings Is Required Pursuant
To Items 2(d) Or 2(e)
- --------------------------------------------------------------------------------
(6) Citizenship Or Place Of Organization
U.S.A.
- --------------------------------------------------------------------------------
Number Of Shares (7) Sole Voting Power 1,000
Beneficially Owned
By Each Reporting
Person With (8) Shared Voting Power 4,050,000
See Footnote 11
(9) Sole Dispositive Power 1,000
(10) Shared Dispositive Power 4,050,000
See Footnote 11
(11) Aggregate Amount Beneficially Owned By Each Reporting Person
4,051,000 See Footnote 11
- --------------------------------------------------------------------------------
(12) Check If The Aggregate Amount In Row (11) Excludes Certain Shares*
- --------------------------------------------------------------------------------
(13) Percent Of Class Represented By Amount In Row (11)
20.4%
- --------------------------------------------------------------------------------
(14) Type Of Reporting Person
IN
- --------------------------------------------------------------------------------
*SEE INSTRUCTION BEFORE FILLING OUT!
Footnote 11: Includes 1,875,000 shares of ordinary shares and Warrants to
purchase 1,050,000 shares of Class A (BSA) and 1,125,000 shares of Class B (BSA)
or Class C (BSA). See Exhibits E and F for terms of exercising the warrants
(BSA). In addition Mr. Nohra owns 1,000 shares in his BEDCO Pension and Profit
Sharing.
CUSIP No. 0338488 10 9 13D Page 13 of 19 Pages
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(1) Names of Reporting Persons. SS or I.R.S. Identification Nos. of
Above Persons
Marino Polestra
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(2) Check The Appropriate Box If A Member Of A Group (a):
(b)X
- --------------------------------------------------------------------------------
(3) SEC Use Only
- --------------------------------------------------------------------------------
(4) Source Of Funds*
AF
- --------------------------------------------------------------------------------
(5) Check Box If Disclosure Of Legal Proceedings Is Required Pursuant
To Items 2(d) Or 2(e)
- --------------------------------------------------------------------------------
(6) Citizenship Or Place Of Organization
U.S.A.
- --------------------------------------------------------------------------------
Number Of Shares (7) Sole Voting Power -0-
Beneficially Owned
By Each Reporting
Person With (8) Shared Voting Power 4,050,000
See Footnote 12
(9) Sole Dispositive Power -0-
(10) Shared Dispositive Power 4,050,000
See Footnote 12
(11) Aggregate Amount Beneficially Owned By Each Reporting Person
4,050,000 See Footnote 12
- --------------------------------------------------------------------------------
(12) Check If The Aggregate Amount In Row (11) Excludes Certain Shares*
- --------------------------------------------------------------------------------
(13) Percent Of Class Represented By Amount In Row (11)
20.4%
- --------------------------------------------------------------------------------
(14) Type Of Reporting Person
IN
- --------------------------------------------------------------------------------
*SEE INSTRUCTION BEFORE FILLING OUT!
Footnote 12: Includes 1,875,000 shares of ordinary shares and Warrants to
purchase 1,050,000 shares of Class A (BSA) and 1,125,000 shares of Class B (BSA)
or Class C (BSA). See Exhibits E and F for terms of exercising the warrants
(BSA).
Item 1. Security and Issuer.
This Statement on Schedule D relates to the Ordinary Shares,
$0.080 French franc par value per share (the "Shares"), of Flamel S.A., a French
Societe Anonyme organized under the laws of The Republic of France (the
"Company"). The principal executive offices of the Company are located at Parc
Club Du Moulin a Vent, 33, avenue de Dr. Georges Levy, Venissieux, Cedex 69693,
France.
Item 2. Identity and Background.
(a) This Statement is filed by Alta BioPharma Partners, L.P.,
a Delaware limited partnership ("Alta BioPharma"), Alta Embarcadero BioPharma,
LLC, a California limited liability company ("Embarcadero LLC"), and Flamel
Chase Partners (Alta Bio), LLC, a Delaware LLC ("Flamel Alta Bio") by virtue of
their direct beneficial ownership of Shares, by Alta BioPharma Management
Partners, LLC, a Delaware limited liability company ("Alta Management"), by
virtue of being the sole general partner of Alta BioPharma, by Alta/Chase
BioPharma Management LLC, a Delaware limited liability company (Alta/Chase
Management) by virtue of being the sole managing member of Flamel Chase Partners
(Alta Bio), LLC and by Alta Partners, a California corporation ("Alta
Partners"), by virtue of being the management advisory company of these
entities. Alta BioPharma, Embarcadero LLC, Flamel Chase Alta Bio, Alta
Management, Alta/Chase Management and Alta Partners are collectively referred to
as the "Reporting Persons." Jean Deleage, Garrett Gruener, Dan Janney, Alix
Marduel, Guy Nohra and Marino Polestra (the "Partners") are the managing
directors of Alta Management, Alta/Chase Management and officers of Alta
Partners. By virtue of the relationships described above and their roles with
Alta Partners, each of the Partners may be deemed to control Alta Partners,
Alta/Chase Management, Alta Management, and, therefore, may be deemed to possess
indirect beneficial ownership of the Shares held by each entity. However, none
of the Partners, acting alone, has voting or investment power with respect to
the Shares directly beneficially held by the entities and, as a result, the
Partners disclaim beneficial ownership of the Shares directly beneficially owned
by each entity, except to the extent of their pecuniary interest in each entity.
Embarcadero LLC is a side company that makes all investments pro rata to the
capital of Alta BioPharma with all allocations made to its members based on
paid-in capital. Certain of the Partners are members of Embarcadero LLC and
certain members of Embarcadero LLC are affiliates of Alta Partners.
(b) The principal executive offices of Alta BioPharma,
Embarcadero LLC, Flamel Chase Alta Bio, Alta Management, Alta/Chase Management
and Alta Partners, and the business address of each Partner, are located at One
Embarcadero Center, Suite 4050, San Francisco, California 94111.
(c) Alta Partners provides investment advisory services to
venture capital firms. Alta BioPharma, Flamel Chase Alta Bio and Embarcadero
LLC's principal business is acting as venture capital investment vehicles.
Alta/Chase Management and Alta Management's principal business is acting as
managing director of Flamel Chase Alta Bio and Alta BioPharma, respectively.
Each of the Partners' principal business is acting as a managing director of
Alta Management and Alta/Chase Management and as an officer of Alta Partners.
(d) None of the Reporting Persons or, to the knowledge of the
Reporting Persons, any of the Partners, has been convicted in a criminal
proceeding in the past five years (excluding traffic violations or similar
misdemeanors).
(e) During the past five years, none of the Reporting Persons
or, to the knowledge of the Reporting Persons, and none of the Partners, was a
party to a civil proceeding of a judicial or administrative body of competent
jurisdiction as a result of which such person was or is subject to a judgment,
decree or final order enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state securities laws of finding any
violation with respect to such laws.
(f) Alta Partners is a California corporation. Alta BioPharma
is a Delaware limited partnership. Embarcadero LLC is a California limited
liability corporation. Flamel Chase Alta Bio is a Delaware limited liability
company. Alta Management and Alta/Chase Management are Delaware limited
liability companies. Each of the Partners is a citizen of the United States.
(g) Jean Deleage, a Director of Flamel Technologies through a
relationship with Burr, Egan, Deleage & Co., a separate reporting entity, is and
expects to continue as a Director of Flamel Technologies representing both Alta
Partners and Burr, Egan, Deleage & Co. Mr. Jean Deleage, is Vice President of
Burr, Egan, Deleage & Co. and a general partner of Alta IV Management Partners,
L.P. (which is the general partner of Alta IV Limited Partnership, L.P.). As a
general partner of the fund, he may be deemed to share voting and investment
powers for the shares held by the fund. Mr. Deleage owns one share of Common
Stock of Flamel Technologies stock. He disclaims beneficial ownership of all
such shares held by all of the funds affiliated with Burr, Egan, Deleage & Co.
except to the extent of his proportionate pecuniary interests therein.
Item 3. Source and Amount of Funds or Other Consideration.
The total amount of funds required by Alta BioPharma to
acquire the 2,517,428 shares (13)of Ordinary Shares reported in Item 5(a) was
$4,493,445.17(13a), the total amount of funds required by Embarcadero LLC to
acquire the 94,887(14) shares of Ordinary Shares reported in Item 5(a) was
$169,366.95(14a) and the total amount of funds required by Flamel Chase Alta Bio
to acquire the 1,437,685(15) shares of Ordinary Shares reported in Item 5(a) was
$2,566,186.53(15a). Such funds were provided by each entity's capital available
for investment.
Item 4. Purpose of Transaction.
Alta BioPharma, Embarcadero LLC, and Flamel Chase Alta Bio
acquired the Ordinary Shares reported in Item 5(c) for investment only.
Depending upon their evaluation of the Company's investments and prospects, and
upon future developments (including, but not limited to, market for the Shares,
the effective yield on the Shares, availability of funds, alternative uses of
funds, and money, stock market and general economic conditions), each of the
Reporting Persons may from time to time purchase the Ordinary Shares, dispose of
all or a portion of the Ordinary Shares that it holds, or cease buying or
selling Ordinary Shares. Any such additional purchases or sales of the Ordinary
Shares may be in open market or privately negotiated transactions or otherwise.
On April 6, 2000, Alta BioPharma, Embarcadero LLC and Flamel
Chase Alta Bio entered into a Securities Purchase Agreement (the "Securities
Purchase Agreement") dated February 29, 2000, with the Company pursuant to which
Alta BioPharma, Embarcadero LLC and Flamel Chase Alta Bio acquired, for an
aggregate purchase price of $7,228,998.65(16), a total of 1,875,000 shares of
Ordinary Shares and Warrants to
- --------
(13) Includes 1,165,474 shares of Ordinary Stock and Warrants to purchase
652,666 shares of Class A (BSA) and 699,288 shares of Class B (BSA) or Class C
(BSA). See Exhibits E and F for terms of exercising warrants.
(13a) Includes warrant cost of $3,032.68.
(14) Includes 43,929 shares of Ordinary Stock and Warrants to purchase 24,600
shares of Class A (BSA) and 26,358 share of Class B (BSA) or Class C (BSA). See
Exhibits E and F for terms of the exercising warrants.
(14a) Includes warrant cost of $114.31.
(15) Includes 665,597 shares of Ordinary Stock and Warrants for 372,734 shares
of Class A (BSA) and 399,354 shares of Class B (BSA) or Class C (BSA). See
Exhibits E and F for terms of exercising the warrants.
(15a) Includes warrant cost of $1,731.93.
(16) Includes warrant costs of $4,878.92.
purchase 1,050,000 shares of Class A (BSA) and 1,125,000 shares of Class B (BSA)
or Class C (BSA)(17). The entities also entered into a Registration Rights
Agreement.
Item 5. Interest in Securities of the Issuer.
(a) Alta BioPharma is the direct beneficial owner of 2,517,428
shares(18) or approximately 12.7% of the shares deemed outstanding by the
Company (19,878,215(19)) as of April 6, 2000. Flamel Chase Alta Bio is the
direct beneficial owner of 1,437,685(20) shares of Ordinary Shares or
approximately 7.2% of the shares deemed outstanding by the Company (19,878,215)
as of April 6, 2000. Embarcadero LLC is the direct beneficial owner of
94,887(21) shares of Ordinary Shares or approximately .5% of the shares deemed
outstanding by the Company (19,878,215) as of April 6, 2000.
(b) Each entity has the power to direct the disposition of and
vote the stock held by it. By virtue of the relationships previously reported
under Item 2 of this Statement, Alta Management, Alta/Chase Management and Alta
Partners may be deemed to have indirect beneficial ownership of the shares owned
by such entities.
(c) On April 6, 2000 Alta BioPharma, Flamel Chase Alta Bio,
and Embarcadero LLC acquired the Shares described in Item 3 of this Statement in
a privately negotiated transaction with the Company for aggregate consideration
of $4,493,445.17, $2,566,186.53 and $169,366.95, respectively.
Except as set forth above, neither the Reporting Persons
nor the Partners have effected any transaction in the Shares during the past 60
days.
(d) Alta BioPharma, Flamel Chase Alta Bio and Embarcadero LLC
each have the right to receive dividends and proceeds from the sale of Ordinary
Shares held by it. By virtue of the relationships reported in Item 2 of this
Statement, Alta Management, Alta/Chase Management and Alta Partners may be
deemed to have the power to direct the receipt of dividends and the proceeds
from the sale of the Ordinary Shares held by each entity.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to
Securities of the Issuer.
The Flamel S.A. Securities Purchase Agreement dated February
29, 2000 and the Flamel Technologies S.A. Registration Rights Agreement dated
April 5, are hereby incorporated in their entirety by this reference.
- ---------
(17) Please see Exhibits E and F for terms to exercise the warrants.
(18) Includes 1,165,474 shares of Ordinary Shares and Warrants to purchase
652,666 shares of Class A (BSA) and 699,288 shares of Class B or C (BSA). See
Exhibits E and F for terms for exercising the warrants.
(19) Includes 16,190,965 outstanding Ordinary Shares and Warrants to purchase
3,687,250 shares of Class A, B and/or C (BSA). See Exhibits E and F for terms of
warrants.
(20) Includes 665,597 shares of Ordinary Stock and Warrants to purchase 372,734
shares of Class A (BSA) and 399,354 shares of Class B or C (BSA). See Exhibits E
and F for terms to exercise warrants.
(21) Includes 43,929 shares of Ordinary Stock and Warrants to purchase 24,600
shares of Class A (BSA) and 26,358 shares of Class B or C (BSA). See Exhibits e
and F for terms to exercise warrants.
Item 7. Material to be Filed as Exhibits.
Exhibit A: Joint Filing Statement.
Exhibit B: Flamel S.A. Securities Purchase Agreement dated February 29,
2000.
Exhibit C: Flamel S.A. Registration Rights Agreement dated April 5,
2000.
Exhibit D: No Exhibit
Exhibit E: Certificates for Class A Warrants, Class B Warrants and
Class C Warrants (Free French Translation).
Exhibit F: Press Release issued by Flamel Technologies on March 1,
2000.
Signature
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.
Date: April 17, 2000
Alta Partners Alta BioPharma Partners, L.P.
By: /s/ Eileen McCarthy By: Alta BioPharma Management, LLC
------------------------------- Its General Partner
Eileen McCarthy, Vice President
Alta BioPharma Management, LLC By: /s/ Eileen McCarthy
----------------------------
Eileen McCarthy, Member
By: /s/ Eileen McCarthy Flamel Chase Partners (Alta Bio), LLC
-------------------------------
Eileen McCarthy, Member
By: Alta/Chase BioPharma Management, LLC
Alta/Chase BioPharma Management, LLC Its Managing Member
By: /s/ Eileen McCarthy By: /s/ Eileen McCarthy
------------------------------- ----------------------------
Eileen McCarthy, Member Eileen McCarthy, Member
Alta Embarcadero BioPharma, LLC
By: /s/ Eileen McCarthy
-------------------------------
Eileen McCarthy, Member
/s/ Jean Deleage /s/ Guy Nohra
- --------------------------------- ------------------------------------
Jean Deleage Guy Nohra
/s/ /Garrett Gruener /s/ Marino Polestra
- --------------------------------- ------------------------------------
Garrett Gruener Marino Polestra
/s/ Daniel Janney /s/ Alix Marduel
- --------------------------------- ------------------------------------
Daniel Janney Alix Marduel
EXHIBIT A
Joint Filing Statement
We, the undersigned, hereby express our agreement that the attached
Schedule 13D is filed on behalf of each of us.
Date: April 17, 2000
Alta Partners Alta BioPharma Partners, L.P.
By: /s/ Eileen McCarthy By: Alta BioPharma Management, LLC
------------------------------- Its General Partner
Eileen McCarthy, Vice President
Alta BioPharma Management, LLC By: /s/ Eileen McCarthy
----------------------------
Eileen McCarthy, Member
By: /s/ Eileen McCarthy Flamel Chase Partners (Alta Bio), LLC
-------------------------------
Eileen McCarthy, Member
By: Alta/Chase BioPharma Management, LLC
Alta/Chase BioPharma Management, LLC Its Managing Member
By: /s/ Eileen McCarthy By: /s/ Eileen McCarthy
------------------------------- ----------------------------
Eileen McCarthy, Member Eileen McCarthy, Member
Alta Embarcadero BioPharma, LLC
By: /s/ Eileen McCarthy
-------------------------------
Eileen McCarthy, Member
/s/ Jean Deleage /s/ Guy Nohra
- --------------------------------- ------------------------------------
Jean Deleage Guy Nohra
/s/ /Garrett Gruener /s/ Marino Polestra
- --------------------------------- ------------------------------------
Garrett Gruener Marino Polestra
/s/ Daniel Janney /s/ Alix Marduel
- --------------------------------- ------------------------------------
Daniel Janney Alix Marduel
EXHIBIT B
Execution Copy
================================================================================
SECURITIES PURCHASE AGREEMENT
ORDINARY SHARES
AND
WARRANTS TO PURCHASE
ORDINARY SHARES
OF
FLAMEL TECHNOLOGIES S.A.
DATED AS OF FEBRUARY 29, 2000
================================================================================
SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT (this "Agreement"), is made as of
this 29th day of February, 2000, by and among FLAMEL TECHNOLOGIES S.A., a French
societe anonyme (the "Company"), BIOTECHNOLOGY VALUE FUND, L.P., a Delaware
limited partnership, BIOTECHNOLOGY VALUE FUND II, L.P., a Delaware limited
partnership, INVESTMENT 10 L.L.C., an Illinois limited liability company
(collectively, the "BVF Investors"), and ALTA BIOPHARMA PARTNERS, a Delaware
limited partnership, Alta Embarcadero Biopharma, LLC, a California limited
liability company, and Flamel Chase Partners (AltaBio), LLC, a Delaware limited
liability company (collectively "Alta"); Chase EUROPEAN EQUITY ASSOCIATES, LLC,
a Delaware limited liability company ("Chase" and, together with the BVF
Investors, and Alta, the "Investors").
W I T N E S S E T H:
WHEREAS, the Investors desire to invest 83,717,750 French francs in the
Company in exchange for the Company's Ordinary Shares (the "Common Stock"),
Class A bons de souscription to purchase the Company's Common Stock (each, a
"Class A Warrant" and collectively, the "Class A Warrants"), Class B bons de
souscription to purchase the Company's Common Stock (each, a "Class B Warrant"
and collectively, the "Class B Warrants") and Class C bons de souscription to
purchase the Company's Common Stock (each, a "Class C Warrant" and collectively,
the "Class C Warrants" and, together with the Class A Warrants and the Class B
Warrants, the "Warrants") entitling the holders to purchase shares of the Common
Stock (the "Warrant Shares"); and
WHEREAS, the Company and the Investors desire to set forth certain
matters to which they have agreed relating to the Warrants and the Common Stock.
NOW THEREFORE, in consideration of the premises and the mutual
covenants contained in this Agreement, the parties agree as follows:
Article I.
ISSUANCE AND TERMS OF WARRANTS AND COMMON STOCK
1.1. Authorization of Securities.
Subject to the terms and conditions of this Agreement, the Company has
authorized, or prior to the Closing (as hereinafter defined) will have
authorized, the issuance of the Common Stock and the Warrants pursuant to this
Agreement.
1.2. Purchase and Sale of Warrants and Common Stock.
Subject to the terms and conditions of this Agreement and in reliance
upon the representations and warranties of the Company contained herein, the
Investors severally agree to purchase from the Company and the Company agrees to
sell to each of the Investors on the
Closing Date (as hereinafter defined) for an aggregate purchase price of
83,717,750 French francs (i) the number of shares of Common Stock set forth
opposite each Investor's name on Exhibit A hereto, aggregating 3,212,500 shares
of Common Stock; (ii) the number of Class A Warrants set forth opposite each
Investor's name on Exhibit A hereto; (iii) the number of Class B Warrants set
forth opposite each Investor's name on Exhibit A hereto, and (iv) the number of
Class C Warrants set forth opposite each Investor's name on Exhibit A hereto.
1.3. Payment.
Each of the Investors agrees to make payment of the amount set forth
opposite its name on Exhibit A hereto in exchange for the number of shares of
Common Stock and the number of Warrants, in each case, set forth opposite its
name in such Exhibit A and delivered at the Closing (as hereinafter defined), by
certified check or wire transfer on the Closing Date to an account specified by
the Company.
ARTICLE II.
CLOSING
2.1. Closing.
Subject to the satisfaction of the conditions set forth in Articles V
and VI hereof, the closing (the "Closing") shall take place at a place and time
(the "Closing Date") mutually agreed by the Company and the Investors, but in
any event no later than March 31, 2000. At the Closing, (a) the Company shall
deliver to the Investors one or more stock certificates registered in their
names for an aggregate of 3,212,500 shares of Common Stock, and (b) the Company
shall deliver to the Investors one or more Warrants registered in their names to
purchase the number of shares indicated therein, in each case against payment to
the Company of the purchase price therefor pursuant to Section 1.3.
2.2. Legend.
The certificates representing the Warrants and the Common Stock shall
be subject to a legend restricting transfer under the Securities Act of 1933, as
amended (the "Securities Act"), such legend to be substantially as follows:
"THE SECURITIES EVIDENCED HEREBY HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933. THESE SECURITIES MAY NOT BE SOLD
OR OTHERWISE TRANSFERRED BY ANY PERSON
UNLESS (1) EITHER (A) A REGISTRATION
STATEMENT WITH RESPECT TO SUCH SECURITIES
SHALL BE EFFECTIVE UNDER THE SECURITIES
ACT OF 1933 ("ACT"), OR (B) THE COMPANY
SHALL HAVE REASONABLY REQUESTED AND
RECEIVED AN OPINION OF COUNSEL
SATISFACTORY TO IT THAT AN EXEMPTION FROM
REGISTRATION UNDER SUCH ACT IS THEN
AVAILABLE, AND
-2-
(2) THERE SHALL HAVE BEEN COMPLIANCE WITH
ALL APPLICABLE STATE SECURITIES LAWS."
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Investors that, as of
the date of this Agreement, the following are true and correct:
3.1. Organization and Standing of the Company.
The Company is a corporation duly organized, validly existing and in
good standing under the laws of the Republic of France. The Company has full
corporate power and authority to enter into, deliver, and perform its
obligations and undertakings under this Agreement. The Company is duly
authorized to conduct its business and is in good standing under the laws of
each jurisdiction where such qualification is required, except where the lack of
such qualification would not have a material adverse effect on the business,
financial condition, operations, results of operations, or future prospects of
the Company. The Company has full corporate power and authority to carry on the
business in which it is engaged and to own and use the properties owned and as
used by it.
3.2. Capitalization.
As of the date hereof, the Company's entire authorized capital stock
consists of: (i) 12,939,215 Ordinary Shares, nominal value 0.80 French Franc per
Ordinary Share, of which 12,939,215 shares are validly issued and outstanding on
the date hereof. On or before the Closing, the Company's shareholders will have
authorized a capital increase to permit the issuance of the Common Stock, the
Warrants and the Warrant Shares. Subsequent to the Closing, the Company shall
complete publication requirements and file the resolutions of the Board of
Directors and the Company's shareholders so that the Company's statuts are
amended to reflect such capital increase. The issuance of all presently issued
and outstanding shares was duly authorized and all such shares are fully paid
and non-assessable. All such issued and outstanding shares have the preferences,
voting powers, qualifications and special or relative rights or privileges set
forth in the Company's statuts, as in effect on the date hereof. Other than as
indicated in the SEC Reports (as hereinafter defined), the Company does not have
outstanding any option, warrant, purchase right, subscription right, stock
appreciation right, phantom stock right, profit participation right, agreement
or other commitment to issue or to acquire any shares of its capital stock, or
any securities or obligations convertible into or exchangeable for its capital
stock, and the Company has not given any person any right to acquire from the
Company or sell to the Company any shares of its capital stock. There are no
voting trusts, proxies, or other agreements or understandings with respect to
the voting of the capital stock of the Company.
-3-
3.3. Validity of this Agreement.
Subject to shareholder approval, the execution and delivery by the
Company of this Agreement and the performance by the Company of its obligations
under this Agreement, and the issuance, sale and delivery of the Common Stock,
the Warrants and the Warrant Shares, have been duly authorized and approved by
all necessary corporate action. This Agreement has been duly executed and
delivered by the Company and constitutes a valid and binding obligation of the
Company, enforceable in accordance with its terms subject to, as to
enforceability, to bankruptcy, insolvency, reorganization and other laws of
general applicability relating to or affecting creditors' rights and to general
principles of equity. The execution and delivery by the Company of this
Agreement and the performance by the Company of its obligations under this
Agreement and the issuance, sale and delivery of the Common Stock, the Warrants
and the Warrant Shares will not (i) conflict with, or result in any breach of
any of the terms of, or constitute a default under, the statuts when the same
will have been amended to authorize the Common Stock, (ii) conflict with, result
in a breach of or violation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or any of its subsidiaries pursuant
to, constitute a default under, result in the acceleration of, create in any
party the right to accelerate, terminate, modify, or cancel, or require any
notice under, any agreement, instrument, covenant or other restriction or
arrangement to which the Company is a party or by which it or any of its
properties or assets is bound or any statute law, rule, regulation, judgment,
order or decree applicable to the Company or any of its subsidiaries of any
court, regulatory body, administrative agency, governmental body, arbitrator or
other authority having jurisdiction over the Company or any of its subsidiaries
or any of its or their properties.
3.4. Governmental Consent, Etc.
Except for (i) the filing of the amendment to the Company's statuts
referenced in Section 7.5, (ii) the shareholder approval referenced in Sections
5.1(e) and 6.1(e), and (iii) filings, consents, permits, approvals and
authorizations which will be obtained by the Company prior to the Closing and
which are set forth on SCHEDULE 3.4, no consent, approval, authorization or
other order of, action by, filing with, or notification to any governmental
authority is required under existing law or regulation in connection with the
execution, delivery and performance of the Agreement or the offer, issuance,
sale or delivery of the Common Stock, the Warrants and the Warrant Shares
pursuant to Section 1.3 pursuant to the Agreement or the consummation of any
other transactions contemplated thereby.
3.5. Valid Issuance of Securities.
When issued and delivered against payment therefor in accordance with
the terms and conditions of this Agreement, the Common Stock, the Warrants and
the Warrant Shares, shall be (i) duly authorized and validly issued, fully paid
and non-assessable and (ii) not subject to any preemptive rights, liens, claims
or encumbrances, or other restrictions on transfer or other agreements or
understandings with respect to the voting of the Common Stock or the Warrant
Shares, except as set forth in this Agreement.
-4-
3.6. Financial Statements.
The audited financial statements of the Company contained in the
Company's Annual Report on Form 20-F for the year ended December 31, 1998,
including the notes relating thereto, and the unaudited financial statements of
the Company contained in the Company's Quarterly Reports on Form 6-K for the
quarters ended March 31, 1999, June 30, 1999 and September 30, 1999, including
the notes thereto, disclose all material liabilities of the Company as of such
dates. Such financial statements, including the notes relating thereto, have
been prepared in accordance with U.S. generally accepted accounting principles
consistently applied throughout the periods involved. Said financial statements
and related notes fairly present the financial position and the results of
operations and cash flow of Company as of the respective dates thereof and for
the periods indicated.
3.7. Accuracy and Completeness of Information.
American Depositary Shares representing the Common Stock are registered
pursuant to Section 12(g) of the Exchange Act (as hereinafter defined). Copies
of all reports filed by the Company with the United States Securities and
Exchange Commission (the "Commission") pursuant to the Securities Exchange Act
of 1934, as amended (the "Exchange Act") during the period from January 1, 1999
to the date of this Agreement (the "Furnished SEC Reports") have been made
available to the Investors. Since June 12, 1996, the Company has filed each
statement, annual, quarterly, and other report, and registration statement
required to be filed by the Company with the Commission (the "SEC Reports"). No
SEC Report at the time filed contained any untrue statement of a material fact,
or omitted to state any such material fact necessary in order to make the
statements contained therein, in light of the circumstances under which they
were made, not misleading, and the SEC Reports, collectively, subject in each
case to statements which have been corrected, supplemented or remedied by
subsequent filings with the Commission or by information contained in the
disclosure schedules referenced in this Agreement do not contain any untrue
statement of a material fact, or omit to state any such material fact necessary
in order to make the statements contained therein, in light of the circumstances
under which they were made, not misleading. Except as disclosed in the SEC
Reports and as set forth on SCHEDULE 3.7 as of each date this representation and
warranty is made or deemed made, there is no fact relating to the Company or any
of its subsidiaries or their respective businesses (other than facts relating to
the economy in general) known to the Company or any of its subsidiaries which
has, or could reasonably be expected to have, a Material Adverse Effect.
For purposes of this Agreement, each of "Material Adverse Change" and
"Material Adverse Effect" means any material adverse change, or any development
that could reasonably be expected to result in a material adverse change, in the
condition, financial or otherwise, or in the earnings, business, operations or
prospects, whether or not arising from transactions in the ordinary course of
business, of the Company and its subsidiaries, taken as a whole.
-5-
3.8. Adverse Changes.
Since September 30, 1999 and except as set forth on SCHEDULE 3.8, there
has not been any Material Adverse Change.
3.9. No Violation.
Neither the execution and delivery by the Company of this Agreement,
nor the consummation of the transactions contemplated hereby will violate any
constitution, statute, rule, injunction, judgment, order, decree, ruling, charge
or other restriction of any government, governmental agency, or court known to
the Company to which the Company is subject, or, after obtaining shareholder
approval and amending the statuts to authorize the Common Stock and the
Warrants, any provision of its statuts.
3.10. All Necessary Permits, Etc.
The Company and each subsidiary possesses such valid and current
certificates, authorizations or permits issued by the appropriate state,
federal, foreign, EU or French provincial, municipal or local regulatory
agencies or bodies as are necessary to conduct their respective businesses
except where the lack of such certificate, authorization or permit individually
or in the aggregate would not have a Material Adverse Effect on the Company, and
neither the Company nor any subsidiary has received any notice of proceedings
relating to the revocation or modification of, or non-compliance with, any such
certificate authorization or permit which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would result in a
Material Adverse Change.
3.11. Title to Properties.
The Company and each of its subsidiaries has good and marketable title
to all the properties and assets reflected as owned by it in the financial
statements referred to in Section 3.6 in each case free and clear of any
security interests, mortgages, liens, encumbrances, equities, claims and other
defects, except such as do not materially and adversely affect the value of such
property and do not materially interfere with the use made or proposed to be
made of such property by the Company or such subsidiary. The real property,
improvements, equipment and personal property held under lease by the Company or
any subsidiary are held under valid and enforceable leases, with such exceptions
as are not material and do not materially interfere with the use made or
proposed to be made of such real property, improvements, equipment or personal
property by the Company or such subsidiary.
3.12. Securities Laws.
All notices, filings, registrations or qualifications under any
applicable securities laws, including state securities or "blue sky" laws or
French laws which are required in connection with the offer, issue and delivery
of the Common Stock, the Warrants and the Common Stock into which such Warrants
are convertible pursuant to this Agreement have been or will be timely completed
by the Company.
-6-
3.13. Relationship to the Regulated Holder.
Except as previously disclosed, neither the Company nor its subsidiary
(i) offers or markets, directly or through any arrangement, any product or
service of The Chase Manhattan Corporation or (ii) permits any of its products
or services, to the extent within its knowledge and control, to be offered or
marketed, directly or through any arrangement, by or through The Chase Manhattan
Corporation. Except as previously disclosed, neither the Company nor its
subsidiary currently has or expects to have any extension of credit from any
depository institution owned by The Chase Manhattan Corporation.
3.14. U.S. Activities.
The Company hereby represents and warrants that it does not presently
engage in business in the United States within the meaning of Section 211.2(g)
of Regulation K of the Board of Governors of the Federal Reserve System nor does
it presently have nay intention to do so.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF THE INVESTORS
Each of the Investors hereby acknowledges, represents, warrants and
agrees as follows:
4.1. Authority of Investors, Validity of this Agreement.
Each of the Investors has all requisite power and authority to enter
into this Agreement and perform its obligations hereunder. The execution,
delivery and performance by each of the Investors of this Agreement, and the
purchase of the Warrants and the Common Stock pursuant hereto have been duly
authorized and approved by all necessary corporate action. This Agreement has
been duly executed and delivered and constitutes a valid and binding obligation
of each of the Investors, enforceable in accordance with its terms. The
execution, delivery and performance of this Agreement and the purchase of the
Warrants and the Common Stock will not conflict with, or result in a material
breach of any of the terms of, or constitute a material default under, any
charter, by-law, agreement, instrument, covenant or other restriction to which
any of the Investors is a party or by which it or any of its properties or
assets is bound.
4.2. Investment Representations.
Each of the Investors hereby acknowledges, represents, warrants and
agrees as follows:
(a) Each of the Investors has had the opportunity to review the
Furnished SEC Reports and the financial statements contained therein. Each of
the Investors acknowledges that the Company has made available to the Investors
documents and information that it has requested relating to the Company and has
provided answers to the Investors' questions concerning the Company, the Common
Stock and the Warrants.
-7-
(b) Each of the Investors is an "accredited investor" as defined in
Rule 501(a)(3) of the Securities Act.
(c) Each of the Investors understands that the offering of the Warrants
and the Common Stock has not been registered under the Securities Act or the
securities laws of any state or other jurisdiction and that such Warrants and
the Common Stock must be held indefinitely unless an exemption from registration
is available. Each of the Investors understands that the offering and sale of
the Warrants and the Common Stock is intended to be exempt from registration
under the Securities Act. Each of the Investors covenants that it will not
transfer the Warrants or the Common Stock in violation of the provisions of any
applicable Federal or state securities statute.
(d) Subject to the Investors' registration rights relating to the
Common Stock (including the Common Stock underlying the Warrants) pursuant to
the terms of the Registration Agreement referred to in Section 5.1(j) hereof,
each of the Investors is acquiring the Warrants and the Common Stock for
investment, and not with a view to the resale or distribution thereof; it has no
present intention of selling, negotiating, or otherwise disposing of the
Warrants and the Common Stock. Each of the Investors' financial condition and
investments are such that it is in a financial position to hold the Warrants and
the Common Stock for an indefinite period of time and to bear the economic risk
of, and withstand a complete loss of, such Warrants and the Common Stock. In
addition, by virtue of its expertise, the advice available to it, and its
previous investment experience, each of the Investors has sufficient knowledge
and experience in financial and business matters, investments, securities, and
private placements and the capability to evaluate the merits and risks of the
transactions contemplated by this Agreement.
ARTICLE V.
CONDITIONS TO INVESTORS' OBLIGATIONS
5.1. Conditions to Closing.
The obligation of the Investors to purchase and pay for the Warrants
and the Common Stock, on the Closing Date is subject to the following:
(a) Representations and Warranties. The representations and warranties
of the Company made herein shall be true, correct and complete on and as of the
Closing Date with the same force and effect as if they had been made on and as
of the Closing Date.
(b) Performance. All covenants, agreements and conditions contained in
this Agreement to be performed or complied with by the Company on or prior to
the Closing Date shall have been performed or complied with.
(c) Opinion of Company's Counsel. The Investors shall have received (i)
an opinion of Willkie Farr & Gallagher, special counsel to the Company, in form
and substance reasonably satisfactory to the Investors, dated the Closing Date,
as to the matters set forth on SCHEDULE 5.1(C) and (ii) an opinion of Sokolow,
Dunaud, Mercadier & Carreras, French counsel to the
-8-
Company, in form and substance reasonably satisfactory to the Investors, dated
the Closing Date, as to the matters set forth on SCHEDULE 5.1(C).
(d) Corporate Proceedings, Consents, etc. All corporate and other
proceedings to be taken and all waivers and consents to be obtained in
connection with the transactions contemplated by this Agreement shall have been
taken or obtained and all documents incident thereto shall be reasonably
satisfactory in form and substance to the Investors and their counsel, each of
whom shall have received all such originals or certified or other copies of such
documents as each may reasonably request.
(e) Shareholder Approval. The Company shall have obtained any required
approval of its shareholders representing at least two-thirds of the votes cast
by the then outstanding shares of Common Stock to the authorization of the
Common Stock and the Warrants.
(f) No Proceeding. No action, suit, investigation or proceeding shall
be pending or threatened before any court or governmental agency to restrain,
prohibit, collect damages as a result of or otherwise challenge this Agreement
or any transaction contemplated hereby or thereby.
(g) No Law Prohibiting or Restricting Such Sale. There shall not be in
effect any law, rule or regulation prohibiting or restricting such sale, or
requiring any consent or approval of any person which shall not have been
obtained to issue the Common Stock, the Warrants, or the Common Stock into which
the Warrants are convertible.
(h) Officer's Certificate Delivered by Company. The Company shall have
delivered to the Investors a certificate, dated the Closing Date and signed by
the Chief Executive Officer or the President of the Company, to the effect that
each of the conditions to be satisfied by the Company pursuant to this Section
5.1 on or before the Closing Date has been duly satisfied.
(i) Registration Rights Agreement. The Company and the Investors shall
have executed and delivered a Registration Rights Agreement in form and
substance as set forth on Exhibit C hereto.
(j) Warrants. The Company shall have executed and delivered a document
evidencing the Class A Warrants in form and substance as set forth on Exhibit
B-1 hereto, the Class B Warrants in form and substance as set forth on Exhibit
B-2 hereto and the Class C Warrants in form and substance as set forth on
Exhibit B-3 hereto.
(k) No Material Adverse Change. There shall have been no Material
Adverse Change in the Company since the date of signing of this Agreement.
(l) Legal Matters. All material matters of a legal nature which pertain
to this Agreement and the transactions contemplated hereby shall have been
reasonably approved by counsel to the Investors.
-9-
Notwithstanding the foregoing, no Investor shall be required to
purchase and pay for Warrants and the Common Stock if another Major Investor
defaults in its obligation to purchase and pay for the Warrants and Common Stock
set forth opposite its name on Exhibit A hereto. For purpose of the foregoing
sentence, the BVF Investors and Alta shall be deemed to be "Major Investors."
Nothing contained herein shall relieve such other defaulting Major Investor of
any liability it may have for damages caused by its default in its obligation to
purchase and pay for Warrants and Common Stock.
ARTICLE VI.
CONDITIONS TO THE COMPANY'S OBLIGATIONS
6.1. Conditions to Closing.
The obligation of the Company to issue the Warrants and the Common
Stock, respectively, to the Investors on the Closing Date is subject to the
following:
(a) Representations and Warranties. The representations and warranties
of the Investors made herein shall be true, correct and complete in all respects
on and as of the Closing Date with the same force and effect as if they had been
made on and as of the Closing Date.
(b) Payment. The Investors shall have tendered the payments for the
purchase price of the Common Stock and the Warrants as set forth in Section 1.3
to an account specified by the Company.
(c) No Proceeding. No action, suit, investigation or proceeding shall
be pending or threatened before any court or governmental agency to restrain,
prohibit, collect damages as a result of or otherwise challenge this Agreement
or any transaction contemplated hereby or thereby.
(d) No Law Prohibiting or Restricting Such Sale. There shall not be in
effect any law, rule or regulation prohibiting or restricting such sale, or
requiring any consent or approval of any person which shall not have been
obtained to issue the Warrants and the Common Stock.
(e) Shareholder Approval. The Company shall have obtained any required
approval of its shareholders representing at least two-thirds of the votes cast
by the then outstanding shares of Common Stock to the authorization of the
Common Stock and the Warrants.
(f) Investors' Certificates Delivered by the Investors. Each of the
Investors shall have delivered to the Company a certificate, dated the Closing
Date and signed by a duly authorized representative of the Investor, to the
effect that each of the conditions pursuant to Section 6.1(a) and (b) on or
before the Closing Date has been duly satisfied.
-10-
ARTICLE VII.
COVENANTS OF THE COMPANY
The Company hereby covenants to such Investors as follows:
7.1. Furnishing of Information.
The Company covenants to timely file (or obtain extensions in respect
thereof) all reports required to be filed by the Company after the date hereof
pursuant to Section 13(a) or 15(d) of the Exchange Act and under French law and
to promptly furnish the Investors with true and complete copies of all such
filings. If the Company is not at the time required to file reports pursuant to
such sections or under French law, it will prepare and furnish to the Investors
annual and quarterly reports comparable to those required by Section 13(a) or
15(d) of the Exchange Act in the time period that such filings would have been
required to have been made under the Exchange Act.
7.2. Information with Respect to the Securities.
The Company covenants to provide such information as is reasonably
requested by any of the Investors related to the terms of the Common Stock,
Warrants or Warrant Shares.
7.3. Shareholder Approval.
The Company shall use best efforts to convene the shareholders meeting
to seek the approval described in Section 5.1(e) hereof prior to the Closing
Date. Subject to the fiduciary duties of the Company's Board of Directors, the
Company shall include in the materials prepared for the shareholders meeting the
recommendation of the Company's Board of Directors to vote in favor of the
transactions contemplated herein.
7.4. Investor's Rights.
Notwithstanding anything to the contrary in the foregoing, the
Investors shall be entitled to such information, privileges, rights and benefits
accorded to them as holders of the Common Stock under applicable law and under
the Company's statuts, as amended.
7.5. Filing for Amendment to Statuts.
Within six weeks of the Closing Date, the Company shall cause all
required documents to be filed with Registre du Commerce to cause the amendment
to the Company's statuts.
7.6. Election of Director.
Upon the written request of the BVF Investors, the Company shall take
all action within its power to cause a person designated by the BVF Investors to
be elected to the Board of Directors of the Company as soon as practicable.
-11-
7.7. Regulatory Matters Generally.
Upon request the Company shall provide to the Regulated Holder such
information within the Company's possession as is necessary to resolve the
Regulatory Problem, provided that if such information is proprietary or
confidential satisfactory arrangements are made for the protection of such
information. The "Regulated Holder" is Chase and any other Investor affiliated
with Chase. A "Regulatory Problem" is a set of circumstances in which the
Regulated Holder's ownership of its shares of Common Stock or Warrants (i) gives
rise to a violation of a banking law or regulation of a federal banking agency
or gives rise to a reasonable belief by the Regulated Holder that such a
violation is likely to occur or (ii) gives rise to a limitation in law that will
impair materially the ability of the Regulated Holder or any Affiliate to
conduct its business or gives rise to a reasonable belief by the Regulated
Holder that such a limitation is likely to arise. "Affiliate" has the meaning
given in Regulation Y of the Board of Governors of the Federal Reserve System.
7.8. Notification.
The Company shall notify the Regulated Holder promptly at any time that
the Company comes to believe that any representation contained in Section 3.13
or Section 3.14 no longer is true.
ARTICLE VIII.
SURVIVAL AND INDEMNIFICATION
8.1. Survival.
Notwithstanding any examination made by or on behalf of any party
hereto, the knowledge of any party or the acceptance by any party of any
certificate or opinion, each representation, warranty contained herein shall
survive the Closing for a period of two years, and each covenant shall survive
for the period indicated therein.
8.2. Indemnification.
(a) The Company agrees to indemnify and hold harmless each Investor,
its shareholders, officers, directors, employees, agents and representatives
against any damage, claim, loss, liability and expense (including reasonable
counsel fees and expenses) which may be suffered or incurred by any of them as a
result of a breach of any representation or warranty or covenant (including,
without limitation, pursuant to Section 9.16) made by the Company in this
Agreement.
(b) The Investors, jointly and severally, agree to indemnify the
Company and its shareholders, officers, directors, employees, agents and
representatives against any damages, claims, losses, liabilities and expenses
(including reasonable counsel fees and other expenses) which may be suffered or
incurred by it as a result of any breach of any representation, warranty, or
covenant made by the Investors in this Agreement.
-12-
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to this Section, such person (the "indemnified party") shall
promptly notify the person against whom such indemnity may be sought (the
"indemnifying party") in writing of the occurrence of the facts and
circumstances giving rise to such claim. The failure of any person to deliver
the notice required by this Section 8.2(c) shall not in any way affect the
indemnifying party's indemnification obligation hereunder except and only to the
extent that the indemnifying party is actually prejudiced thereby. In case any
such proceeding shall be brought against any indemnified party and it shall
notify the indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it shall
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel satisfactory to such indemnified party and
shall pay as incurred the fees and expenses of such counsel related to such
proceeding. In any such proceeding, any indemnified party shall have the right
to retain its own counsel or pay its own expenses. Notwithstanding the
foregoing, the indemnifying party shall pay as incurred the fees and expenses of
the counsel retained by the indemnified party in the event (i) the indemnifying
party and the indemnified party shall have mutually agreed to the retention of
such counsel or (ii) the named parties to any such proceedings (including any
impleaded parties) include both the indemnifying party and the indemnified party
and representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them. The indemnifying
party shall not be liable for any settlement of any proceeding effected without
its written consent but if settled with such consent or if there be a final
judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party from and against any loss or liability by reason of such
settlement or judgment and the indemnifying party shall obtain a full release of
the indemnified party.
ARTICLE IX.
MISCELLANEOUS
9.1. Notices.
All notices, requests, consents and other communications hereunder
shall be in writing, shall be addressed to the receiving party's address set
forth below or to such other address as a party may designate by notice
hereunder, and shall be either (i) delivered by hand, (ii) made by telecopy or
facsimile transmission, (iii) sent by overnight courier, or (iv) sent by
registered mail, return receipt requested, postage prepaid.
If to the
BVF Investors: c/o BVF Partners, L.P.
One Sansome Street, 39th Floor
San Francisco, CA 94104
Attn.: Mr. Mark Lampert
Fax: (415) 288-2394
With a copy to: Sidley & Austin
-13-
875 Third Avenue
New York, NY 10022
Attn.: Paul K. Risko, Esq.
Fax: (212) 906-2021
If to Alta: One Embarcadero Center
Suite 4050
San Francisco, CA 94111
Attn.: Mr. Dan Janney
Fax: (415) 362-6178
If to Chase: 380 Madison Avenue, 12th Floor
New York, NY 10017-2951
Attn.: Mr. Damion Wicker
Fax: (212) 622-3771
If to the Company: Flamel Technologies S.A.
33 Avenue du Docteur Georges Levy
69693 Venissieux Cedex, France
Attn.: Gerard Soula, D.Sc.
Fax: (33) 4-72-78-34-25
With a copy to: Willkie Farr & Gallagher
787 Seventh Avenue
New York, New York 10019
Attn.: Peter H. Jakes, Esq.
Fax: (212) 728-8111
and
Sokolow, Dunaud, Mercadier & Carreras
55 Avenue Kleber
75116 Paris, France
Attn.: Francoise Monod, Esq.
Fax: (33) 1-53-65-70-50
All notices, requests, consents and other communications hereunder shall be
deemed to have been given either (i) if by hand, at the time of the delivery
thereof to the receiving party at the address of such party set forth above,
(ii) if made by telecopy or facsimile transmission, one (1) day after the time
that receipt thereof has been acknowledged by electronic confirmation or
otherwise, (iii) if sent by overnight courier, on the next business day
following the day such notice is delivered to the courier service, or (iv) if
sent by registered mail, on the 5th business day following the day such mailing
is made.
-14-
9.2. Entire Agreement.
This Agreement, including exhibits, or other documents referred to
herein, and the Confidentiality Agreement, dated November 15, 1999, by and
between the Company and BVF, Inc. embody the entire agreement and understanding
between the parties hereto with respect to the subject matter hereof and
supersede all prior oral or written agreements and understandings relating to
the subject matter hereof. No statement, representation, warranty, covenant or
agreement of any kind not expressly set forth in this Agreement shall affect, or
be used to interpret, change or restrict, the express terms and provisions of
this Agreement.
9.3. Amendments.
The terms and provisions of the Agreement may be modified, amended or
waived, or consent for the departure therefrom granted, only by written consent
of the Company and the Investors. No such waiver or consent shall be deemed to
be or shall constitute a waiver or consent with respect to any other terms or
provisions of this Agreement, whether or not similar. Each such waiver or
consent shall be effective only in the specific instance and for the purpose for
which it was given, and shall not constitute a continuing waiver or consent.
9.4. Assignment.
Neither this Agreement nor any or all of the rights and obligations of
a party hereunder shall be assigned, delegated, sold, transferred or otherwise
disposed of by operation of law or otherwise, to any third person without the
prior written consent of the other party, and any attempted assignment,
delegation, sale, transfer, or other disposition, by operation of law or
otherwise, of this Agreement or of any rights or obligations hereunder contrary
to this Section 9.4 shall be void and without force or effect. Each party shall
be responsible for the compliance by its Affiliates with the terms and
conditions of this Agreement.
9.5. Benefit.
All statements, representations, warranties, covenants and agreements
in this Agreement shall be binding on the parties hereto and shall inure to the
benefit of the respective successors and permitted assigns of each party hereto.
Nothing in this Agreement shall be construed to create any rights or obligations
except among the parties hereto, and no person or entity shall be regarded as a
third-party beneficiary of this Agreement.
9.6. Governing Law.
This Agreement and the rights and obligations of the parties hereunder
shall be construed in accordance with and governed by the law of the State of
New York.
9.7. Severability.
In the event that any court of competent jurisdiction shall determine
that any provision, or any portion thereof, contained in this Agreement shall be
unreasonable or unenforceable in any
-15-
respect, then such provision shall be deemed limited to the extent that such
court deems it reasonable and enforceable, and as so limited shall remain in
full force and effect. In the event that such court shall deem any such
provision, or portion thereof, wholly unenforceable, the remaining provisions of
this Agreement shall be interpreted as if such provision were so excluded and
shall nevertheless remain in full force and effect.
9.8. Headings and Captions.
The headings and captions of the various subdivisions of this Agreement
are for convenience of reference only and shall in no way modify, or affect the
meaning or construction of any of the terms or provisions hereof.
9.9. No Waiver of Rights, Powers and Remedies.
No failure or delay by a party hereto in exercising any right, power or
remedy under this Agreement, and no course of dealing between the parties
hereto, shall operate as a waiver of any such right, power or remedy of the
party. No single or partial exercise of any right, power or remedy under this
Agreement by a party hereto, nor any abandonment or discontinuance of steps to
enforce any such right, power or remedy, shall preclude such party from any
other or further exercise thereof or the exercise of any other right, power or
remedy hereunder. The election of any remedy by a party hereto shall not
constitute a waiver of the right of such party to pursue other available
remedies. No notice to or demand on a party not expressly required under this
Agreement shall entitle the party receiving such notice or demand to any other
or further notice or demand in similar or other circumstances or constitute a
waiver of the rights of the party giving such notice or demand to any other or
further action in any circumstances without such notice or demand.
9.10. Expenses.
Except as provided in Section 8.2, each of the parties shall pay its
own fees and expenses (including the fees of any attorneys, accountants,
appraisers or others engaged by such party) in connection with this Agreement
and the transactions contemplated hereby; provided that the Company shall pay
such fees and expenses (including attorney's fees) of the BVF Investors up to
$15,000.
-16-
9.11. Brokers.
Each of the parties hereto represents and warrants to the other that no
broker, finder or financial consultant has acted on its behalf in connection
with this Agreement or the transactions contemplated hereby in such a way as to
create any liability on the other. Each of the parties hereto agrees to
indemnify and save the other harmless from any claim or demand for commission or
other compensation by any other broker, finder, financial consultant or similar
agent claiming to have been employed by or on behalf of such party and to bear
the cost of legal expenses incurred in defending against any such claim.
9.12. Confidentiality.
The Investors acknowledge and agree that any information or data they
have acquired from the Company, which is clearly designated in writing as
confidential and is not otherwise properly in the public domain, was received in
confidence. Each of the Investors agrees not to divulge, communicate or
disclose, except as may be required by law or upon the advice of its accountants
or for the performance of this Agreement, or use to the detriment of the Company
or for the benefit of any other person or persons, or misuse in any way, any
confidential information of the Company.
9.13. Counterparts.
This Agreement may be executed in one or more counterparts, and by
different parties hereto on separate counterparts, each of which shall be deemed
an original, but all of which together shall constitute one and the same
instrument.
9.14. Further Assurances.
In case at any time after the Closing any further action is necessary
or desirable to carry out the purposes of this Agreement, the Company and the
Investors will take such further action as the other party may reasonably
request, all at the sole cost and expense of the requesting party (unless the
requesting party is entitled to indemnification therefor under Article VIII).
9.15. Consent to Jurisdiction.
To the extent that the Company or the Investors have or may hereafter
become entitled to any right of immunity, on the grounds of sovereignty or
otherwise, from any legal action, suit or proceeding, from setoff or
counterclaim, from the jurisdiction of any court, from service or process, from
attachment upon or prior to judgment, from attachment in aid of execution of
judgment, or from execution of judgment, or other legal process or proceeding
for the giving of any relief or for the enforcement of any judgment, in any
jurisdiction in which proceedings may at any time be commenced with respect to
the obligations and liabilities of the Company or the Investors under this
Agreement, the Company and the Investors hereby irrevocably and unconditionally
waive, and agree not to plead or claim, any such immunity and consent to such
relief and enforcement. The Company hereby irrevocably waives its rights under
the provisions of Article 14 and Article 15 of the French Civil Code. The
Company hereby irrevocably
-17-
consents and submits to the jurisdiction of the courts of the State of New York,
New York County, and in the United States District Court for the Southern
District of New York in personam generally and unconditionally in respect of any
such suit or proceeding.
9.16. Break-Up Fee.
If (i) (x) the Company's shareholders do not vote to approve the
transactions contemplated by this Agreement or (y) if the Company fails to
consummate the sale of the Common Stock and the Warrants to the Investors as
contemplated by this Agreement by March 31, 2000 and (ii) within eighteen months
of the date hereof, the Company enters into agreement for the sale of its equity
securities or other securities convertible into or exchangeable for its equity
securities (whether by private placement or public offering) or the acquisition
of the Company or the merger or consolidation of the Company with another entity
(each, an "Alternative Transaction"), then it will be a condition to the
consummation of the Alternative Transaction by the Company that (a) each of the
Investors shall have been issued that number of warrants in form and substance
as set forth on Exhibit B-1 hereto to purchase Common Stock at an exercise price
of 39.10 French francs per share of Common Stock as set forth opposite its name
under the column "Class A Warrants" on Exhibit A, and (b) such warrants shall
have the benefit of, and be included under, any registration rights agreement
entered into in connection with such Alternative Transaction. The Company
acknowledges that the agreements contained in this Section 9.16 are an integral
part of the transactions contemplated hereby, and that without such agreements
the Investors would not enter into this Agreement.
[REMAINDER OF PAGE IS INTENTIONALLY BLANK]
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IN WITNESS WHEREOF, the undersigned have executed this Securities
Purchase Agreement as of this 29th day of February, 2000.
FLAMEL TECHNOLOGIES S.A.
By:
-------------------------------------------------
Name: Gerard Soula
Title: Chief Executive Officer
BIOTECHNOLOGY VALUE FUND, L.P.
By: BVF PARTNERS L.P., its General Partner
By: BVF, INC., its General Partner
By:
-------------------------------
Mark N. Lampert
President
BIOTECHNOLOGY VALUE FUND II, L.P.
By: BVF PARTNERS L.P., its General Partner
By: BVF, INC., its General Partner
By:
-------------------------------
Mark N. Lampert
President
INVESTMENT 10 L.L.C.
By: BVF PARTNERS, L.P., its Investment Advisor
By: BVF, INC., its General Partner
By:
----------------------------------------
Mark N. Lampert
President
ALTA BIOPHARMA PARTNERS LP
By:
---------------------------------------------
Name:
-19-
Title:
ALTA EMBARCADERO BIOPHARMA, LLC
By:
------------------------------------------------------
Name:
Title:
FLAMEL CHASE PARTNERS (ALTA BIO), LLC
By:
------------------------------------------------------
Name:
Title:
CHASE EUROPEAN EQUITY ASSOCIATES, LLC
By: Chase Capital Partners, its Manager
By:
---------------------------------------------------
Name:
Title:
-20-
EXHIBIT A
INVESTORS:
- --------------------------------------------- -------------- ---------------- ----------------- --------------- -------------------
NAME ORDINARY CLASS A CLASS B CLASS C PURCHASE PRICE
SHARES WARRANTS WARRANTS WARRANTS (FrF)
- --------------------------------------------- -------------- ---------------- ----------------- --------------- -------------------
AltaBioPharma Partners, LP 1,165,474 652,666 699,288 699,288 30,372,252.44
Alta Embarcadero BioPharma, LLC 43,929 24,600 26,358 26,358 1,144,789.74
Biotechnology Value Fund, L.P. 375,000 210,000 225,000 225,000 9,772,500.00
Biotechnology Value Fund II, L.P. 812,500 455,000 487,500 487,500 21,173,750.00
Chase European Equity Associates, LLC 87,500 49,000 52,500 52,500 2,280,250.00
Flamel Chase Partners (Alta Bio), LLC 665,597 372,734 399,354 399,354 17,345,457.82
Investment 10 L.L.C. 62,500 35,000 37,500 37,500 1,628,750.00
--------- --------- --------- --------- ----------------
Total: 3,212,500 1,799,000 1,927,500 1,927,500 FrF83,717,750.00
===== ========= ========= ========= ========= ================
- --------------------------------------------- -------------- ---------------- ----------------- --------------- -------------------
SCHEDULE 3.7
(1) The Company's cash balances have continued to decline over time.
(2) Barbara Sherrill resigned from her position as Chief Financial Officer of
the Company as of December 3, 1999.
(3) Bruce Morra resigned from his position as President of Flamel Technologies,
Inc., the Company's subsidiary, as of January 31, 2000.
(4) The Company intends to dissolve its only subsidiary, Flamel Technologies,
Inc. in the first half of 2000.
SCHEDULE 3.8
(1) The Company's cash balances have continued to decline over time.
(2) Barbara Sherrill resigned from her position as Chief Financial Officer as of
December 3, 1999.
(3) Bruce Morra resigned from his position as President of Flamel Technologies,
Inc., the Company's subsidiary, as of January 31, 2000.
(4) The Company intends to dissolve its only subsidiary, Flamel Technologies,
Inc. in the first half of 2000.
Table of Contents
Page
----
ARTICLE I. ISSUANCE AND TERMS OF WARRANTS AND COMMON STOCK.......................................................1
1.1. Authorization of Securities...............................................................................1
1.2. Purchase and Sale of Warrants and Common Stock............................................................1
1.3. Payment...................................................................................................2
ARTICLE II. CLOSING..............................................................................................2
2.1. Closing...................................................................................................2
2.2. Legend....................................................................................................2
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.......................................................3
3.1. Organization and Standing of the Company..................................................................3
3.2. Capitalization............................................................................................3
3.3. Validity of this Agreement................................................................................4
3.4. Governmental Consent, Etc.................................................................................4
3.5. Valid Issuance of Securities..............................................................................4
3.6. Financial Statements......................................................................................5
3.7. Accuracy and Completeness of Information..................................................................5
3.8. Adverse Changes...........................................................................................5
3.9. No Violation..............................................................................................6
3.10. All Necessary Permits, Etc...............................................................................6
3.11. Title to Properties......................................................................................6
3.12. Securities Laws..........................................................................................6
3.13. Relationship to the Regulated Holder.....................................................................6
3.14. U.S. Activities..........................................................................................7
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF THE INVESTORS......................................................7
4.1. Authority of Investors, Validity of this Agreement........................................................7
4.2. Investment Representations................................................................................7
ARTICLE V. CONDITIONS TO INVESTORS' OBLIGATIONS..................................................................8
5.1. Conditions to Closing.....................................................................................8
ARTICLE VI. CONDITIONS TO THE COMPANY'S OBLIGATIONS.............................................................10
6.1. Conditions to Closing....................................................................................10
ARTICLE VII. COVENANTS OF THE COMPANY...........................................................................10
7.1. Furnishing of Information................................................................................10
7.2. Information with Respect to the Securities...............................................................11
7.3. Shareholder Approval.....................................................................................11
7.4. Investor's Rights........................................................................................11
7.5. Filing for Amendment to Statuts..........................................................................11
(i)
Table of Contents
(continued)
Page
----
7.6. Election of Director.....................................................................................11
7.7. Regulatory Matters Generally.............................................................................11
7.8. Notification.............................................................................................12
ARTICLE VIII. SURVIVAL AND INDEMNIFICATION......................................................................12
8.1. Survival.................................................................................................12
8.2. Indemnification..........................................................................................12
ARTICLE IX. MISCELLANEOUS.......................................................................................13
9.1. Notices..................................................................................................13
9.2. Entire Agreement.........................................................................................14
9.3. Amendments...............................................................................................14
9.4. Assignment...............................................................................................15
9.5. Benefit..................................................................................................15
9.6. Governing Law............................................................................................15
9.7. Severability.............................................................................................15
9.8. Headings and Captions....................................................................................15
9.9. No Waiver of Rights, Powers and Remedies.................................................................16
9.10. Expenses................................................................................................16
9.11. Brokers.................................................................................................16
9.12. Confidentiality.........................................................................................16
9.13. Counterparts............................................................................................17
9.14. Further Assurances......................................................................................17
9.15. Consent to Jurisdiction.................................................................................17
9.16. Break-Up Fee............................................................................................17
(ii)
EXHIBIT C
FLAMEL TECHNOLOGIES S.A.
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of April 5, 2000, by
and among Flamel Technologies S.A., a societe anonyme organized under the laws
of The Republic of France (the "Company") and BIOTECHNOLOGY VALUE FUND, L.P., a
Delaware limited partnership, BIOTECHNOLOGY VALUE FUND II, L.P., a Delaware
limited partnership, INVESTMENT 10 L.L.C., an Illinois limited liability company
(collectively, the "BVF Investors"), and ALTA BIOPHARMA PARTNERS, a Delaware
limited partnership, ALTA EMBARCADERO BIOPHARMA, LLC, a California limited
liability company, and FLAMEL CHASE PARTNERS (ALTABIO), LLC, a Delaware limited
liability company (collectively, "Alta"); and CHASE EUROPEAN EQUITY ASSOCIATES,
LLC, a Delaware limited liability company ("Chase" and, together with the BVF
Investors and Alta, the "Investors").
R E C I T A L S
WHEREAS, the Investors have, pursuant to the terms of the
Securities Purchase Agreement, dated as of February 29, 2000, by and among the
Company and the Investors (the "Purchase Agreement"), agreed to purchase
ordinary shares, nominal value 0.80 French francs per share ("Ordinary Shares")
and bons de souscription to purchase additional Ordinary Shares (the
"Warrants"); and
WHEREAS, the Company has agreed, as a condition precedent to
the Investors' obligations under the Purchase Agreement, to grant the Investors
certain registration rights; and
WHEREAS, the Company and the Investors desire to define the
registration rights of the Investors on the terms and subject to the conditions
herein set forth.
NOW, THEREFORE, in consideration of the foregoing premises and
for other good and valuable consideration, the parties hereby agree as follows:
1. DEFINITIONS
As used in this Agreement, the following terms have the
respective meaning set forth below:
ADSs: shall mean American Depositary Shares representing
Ordinary Shares (the current ratio being one American Depositary Share for each
deposited Ordinary Share) and represented by American Depositary Receipts of the
Company;
Commission: shall mean the Securities and Exchange Commission
or any other federal agency at the time administering the Securities Act;
Exchange Act: shall mean the Securities Exchange Act of 1934,
as amended;
Holder: shall mean any holder of Registrable Securities;
Initiating Holder: shall mean the BVF Investors, Alta or
Chase;
Person: shall mean an individual, partnership, joint-stock
company, corporation, trust or unincorporated organization, and a government or
agency or political subdivision thereof;
register, registered and registration: shall mean to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act (and any post-effective amendments filed or
required to be filed) and the declaration or ordering of effectiveness of such
registration statement;
Registrable Securities: shall mean ADSs representing (A) the
Ordinary Shares issued pursuant to the Purchase Agreement, (B) Ordinary Shares
acquired by the Investors pursuant to the exercise of the Warrants and (C) any
capital stock of the Company issued as a dividend or other distribution with
respect to, or in exchange for or in replacement of, the Ordinary Shares
referred to in clause (A) or (B);
Registration Expenses: shall mean all expenses incurred by the
Company in compliance with Sections 2(a) and (b) hereof, including, without
limitation, all registration and filing fees, printing expenses, fees and
disbursements of counsel for the Company, fees and expenses of one counsel for
all the Holders in an amount not to exceed $15,000, blue sky fees and expenses
and the expense of any special audits incident to or required by any such
registration (but excluding the compensation of regular employees of the
Company, which shall be paid in any event by the Company);
Security, Securities: shall have the meaning set forth in
Section 2(1) of the Securities Act;
Securities Act: shall mean the Securities Act of 1933, as
amended; and
Selling Expenses: shall mean all underwriting discounts and
selling commissions applicable to the sale of Registrable Securities and all
fees and disbursements of counsel for each of the Holders other than fees and
expenses of one counsel for all the Holders in an amount not to exceed $15,000.
2
2. REGISTRATION RIGHTS
(a) Requested Registration.
(i) Request for Registration. If the Company shall
receive from an Initiating Holder who has not previously exercised its
right to call for a registration under this Section 2(a)(i) a written
request that the Company effect any registration with respect to all or
a part of the Registrable Securities, the Company will:
(A) promptly give written notice of the
proposed registration, qualification or compliance to all
other Holders; and
(B) as soon as practicable, use its diligent
best efforts to effect such registration (including, without
limitation, the execution of an undertaking to file
post-effective amendments, appropriate qualification under
applicable blue sky or other state securities laws and
appropriate compliance with applicable regulations issued
under the Securities Act) as may be so requested and as would
permit or facilitate the sale and distribution of all or such
portion of such Registrable Securities as are specified in
such request, together with all or such portion of the
Registrable Securities of any Holder or Holders joining in
such request as are specified in a written request received by
the Company within ten (10) business days after written notice
from the Company is given under Section 2(a)(i)(A) above;
provided that the Company shall not be obligated to effect, or
take any action to effect, any such registration pursuant to
this Section 2(a):
(x) In any particular jurisdiction
in which the Company would be required to execute a consent
(other than a limited consent) to service of process in
effecting such registration, qualification or compliance,
unless the Company is already subject to service in such
jurisdiction and except as may be required by the
Securities Act or applicable rules or regulations
thereunder;
(y) After the Company has effected
one (1) such registration requested by each of the BVF
Investors, Alta and Chase (for a total of three (3)
registrations) pursuant to this Section 2(a) and such
registrations have been declared or ordered effective and
the sales of such Registrable Securities shall have closed;
or
(z) If the Company is in possession
of material non-public information and the Board of
Directors of the Company determines in good faith that
disclosure of such information would not be in the best
interests of the Company and its shareholders, in which
case the filing of such registration statement may be
delayed until the earlier of the second business day after
such conditions shall have ceased to exist and the 120th
day after receipt by the Company of the written request
from the Initiating Holders under
3
this Section 2(a); provided, however, that the Initiating
Holders shall be advised of any delay arising from the
operation of this clause (z) and may, without prejudice to
their other rights, withdraw their request for the
registration of Registrable Securities in which case the
contemplated registration shall not count for the purposes
of clause (y) above.
The registration statement filed pursuant to the
request of the Initiating Holders may, subject to the provisions of
Section 2(a)(ii) below, include other securities of the Company which
are held by Persons who, by virtue of agreements with the Company, are
entitled to include their securities in any such registration ("Other
Stockholders").
The registration rights set forth in this Section 2
may be assigned, in whole or in part, to any transferee of Registrable
Securities (who shall be bound by all obligations of this Agreement).
(ii) Underwriting. If the Initiating Holders intend
to distribute the Registrable Securities covered by their request by
means of an underwriting, they shall so advise the Company as a part of
their request made pursuant to Section 2(a).
If Other Stockholders request to be included in such
underwritten offering, the Holders shall offer to include the
securities of such Other Stockholders in the underwriting and may
condition such offer on the acceptance by such Other Stockholders of
the further applicable provisions of this Section 2. The Holders whose
shares are to be included in such registration and the Company shall
(together with all Other Stockholders proposing to distribute their
securities through such underwriting) enter into an underwriting
agreement in customary form with the representative of the underwriter
or underwriters selected for such underwriting by the Initiating
Holders and reasonably acceptable to the Company. Notwithstanding any
other provision of this Section 2(a), if the representative advises the
Holders in writing that marketing factors require a limitation on the
number of shares to be underwritten, the securities of the Company held
by officers, directors and Other Stockholders shall be excluded from
such registration to the extent so required by such limitation. If,
after the exclusion of such shares, further reductions are still
required, the number of shares included in the registration by each
Holder shall be reduced on a pro rata basis (based on the number of
shares held by such Holder), by such minimum number of shares as is
necessary to comply with such request. No Registrable Securities or any
other securities excluded from the underwriting by reason of the
underwriter's marketing limitation shall be included in such
registration. If any Other Stockholder who has requested inclusion in
such registration as provided above disapproves of the terms of the
underwriting, such person may elect to withdraw therefrom by written
notice to the Company, the underwriter and the Initiating Holders. The
securities so withdrawn shall also be withdrawn from registration. If
the underwriter has not limited the number of Registrable Securities or
other securities to be underwritten, the Company and officers and
directors of the Company may include its or their securities for its or
their own account in such registration if the representative so
4
agrees and if the number of Registrable Securities and other securities
which would otherwise have been included in such registration and
underwriting will not thereby be limited.
(b) Company Registration.
(i) If the Company shall determine to register any of
its equity securities either for its own account or for the account of
Other Stockholders, other than a registration relating solely to
employee benefit plans, or a registration relating solely to a
Commission Rule 145 transaction, or a registration on any registration
form which does not permit secondary sales or 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:
(A) promptly give to each of the Holders a
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
(B) include in such registration (and any
related qualification under blue sky laws or other compliance),
and in any underwriting involved therein, all the Registrable
Securities specified in a written request or requests, made by any
Holder within fifteen (15) days after receipt of the written
notice from the Company described in clause (i) above, except as
set forth in Section 2(b)(ii) below. Such written request may
specify all or a part of the Holders' Registrable Securities.
(ii) Underwriting. If the registration of which the Company
gives notice is for a registered public offering involving an
underwriting, the Company shall so advise each of the Holders as a part
of the written notice given pursuant to Section 2(b)(i)(A). In such
event, the right of each of the Holders to registration pursuant to
this Section 2(b) shall be conditioned upon such Holders' participation
in such underwriting and the inclusion of such Holders' Registrable
Securities in the underwriting to the extent provided herein. The
Holders whose shares are to be included in such registration shall
(together with the Company and the Other Stockholders distributing
their securities through such underwriting) enter into an underwriting
agreement in customary form with the representative of the underwriter
or underwriters selected for underwriting by the Company.
Notwithstanding any other provision of this Section 2(b), if the
representative determines that marketing factors require a limitation
on the number of shares to be underwritten, the representative may
(subject to the allocation priority set forth below) limit the number
of Registrable Securities to be included in the registration and
underwriting to not less than twenty five percent (25%) of the shares
included therein (based on the number of shares). The Company shall so
advise all holders of securities requesting registration, and the
number of shares of securities that are entitled to be included in the
registration and underwriting shall be allocated in the following
manner: The securities of the Company held by officers, directors and
Other Stockholders of the
5
Company (other than Registrable Securities and other than securities
held by holders who by contractual right demanded such registration
("Demanding Holders")) shall be excluded from such registration and
underwriting to the extent required by such limitation, and, if a
limitation on the number of shares is still required, the number of
shares that may be included in the registration and underwriting by
each of the Holders and Demanding Holders shall be reduced, on a pro
rata basis (based on the number of shares held by such Holder), by such
minimum number of shares as is necessary to comply with such
limitation. If any of the Holders or any officer, director or Other
Stockholder disapproves of the terms of any such underwriting, he may
elect to withdraw therefrom by written notice to the Company and the
underwriter. Any Registrable Securities or other securities excluded or
withdrawn from such underwriting shall be withdrawn from such
registration.
(c) Form F-3. Each of the BVF Investors, Alta and
Chase shall have the right to request one (1) registration (for a total of three
(3) registrations) on Form F-3 (such requests shall be in writing and shall
state the number of shares of Registrable Securities to be disposed of and the
intended method of disposition of shares by such holders), subject only to the
following:
(i) The Company shall not be required to effect a
registration pursuant to this Section 2(c) within 180 days of the
effective date of the most recent registration pursuant to this Section
2 in which securities held by the requesting Holder could have been
included for sale or distribution.
(ii) The Company shall not be obligated to effect any
registration pursuant to this Section 2(c) in any particular
jurisdiction in which the Company would be required to execute a
consent (other than a limited consent) to service of process in
effecting such registration, qualification or compliance, unless the
Company is already subject to service in such jurisdiction and except
as may be required by the Securities Act or applicable rules or
regulations thereunder.
(iii) The Company shall not be obligated to effect
any registration pursuant to this Section 2(c) if the Company is in
possession of material non-public information and the Board of
Directors of the Company determines in good faith that disclosure of
such information would not be in the best interests of the Company and
its shareholders, in which case the filing of such registration
statement may be delayed until the earlier of the second business day
after such conditions shall have ceased to exist and the 120th day
after receipt by the Company of the written request from the Initiating
Holders under this Section 2(c); provided, however, that the Holders
shall be advised of any delay arising from the operation of this clause
(iii) and may, without prejudice to their other rights, withdraw their
request for the registration of Registrable Securities in which case
the contemplated registration shall not count for the purposes of this
Section 2(c).
6
The Company shall give written notice to all Holders of the receipt of
a request for registration pursuant to this Section 2(c) and shall provide a
reasonable opportunity for other Holders to participate in the registration,
provided that if the registration is for an underwritten offering, the terms of
Section 2(a)(ii) shall apply to all participants in such offering. Subject to
the foregoing, the Company will use its best efforts to effect promptly the
registration of all shares of Registrable Securities on Form F-3 to the extent
requested by the Holder or Holders thereof for purposes of disposition.
(d) Expenses of Registration. All Registration
Expenses incurred in connection with any registration, qualification or
compliance pursuant to this Section 2 shall be borne by the Company, and all
Selling Expenses shall be borne by the Holders of the securities so registered
pro rata on the basis of the number of their shares so registered.
(e) Registration Procedures. In the case of each
registration effected by the Company pursuant to this Section 2, the Company
will keep the Holders, as applicable, advised in writing as to the initiation of
each registration and as to the completion thereof. At its expense, the Company
will:
(i) keep such registration effective for a period of
two hundred seventy (270) days or until the Holders, as applicable,
have sold all the Registrable Securities included in such registration,
whichever first occurs; provided, however, that (A) such 270-day period
shall be extended for a period of time equal to the period during which
the Holders, as applicable, refrain from selling any securities
included in such registration in accordance with provisions in Section
2(i) hereof; and (B) in the case of any registration of Registrable
Securities on Form F-3 which are intended to be offered on a continuous
or delayed basis, such 270-day period shall be extended until all such
Registrable Securities are sold, provided that Rule 415, or any
successor rule under the Securities Act, permits an offering on a
continuous or delayed basis, and provided further that applicable rules
under the Securities Act governing the obligation to file a
post-effective amendment permit, in lieu of filing a post-effective
amendment which (y) includes any prospectus required by Section 10(a)
of the Securities Act or (z) reflects facts or events representing a
material or fundamental change in the information set forth in the
registration statement, the incorporation by reference of information
required to be included in (y) and (z) above to be contained in
periodic reports filed pursuant to Section 12 or 15(d) of the Exchange
Act in the registration statement;
(ii) furnish such number of prospectuses and other
documents incident thereto as each of the Holders, as applicable, from
time to time may reasonably request;
(iii) promptly notify each Holder of Registrable
Securities covered by such registration at any time when a prospectus
relating thereto is required to be delivered under the Securities Act
of 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;
7
(iv) furnish, on the date that such Registrable
Securities are delivered to the underwriters for sale, if such
securities are being sold through underwriters or, if such securities
are not being sold through underwriters, on the date that the
registration statement with respect to such securities becomes
effective, (1) an opinion, dated as of such date, of the counsel
representing the Company for the purposes of such registration, in form
and substance as is customarily given to underwriters in an
underwritten public offering and reasonably satisfactory to a majority
in interest of the Holders participating in such registration,
addressed to the underwriters, if any, and to the Holders participating
in such registration and (2) a letter, dated as of such date, from the
independent certified public accountants of the Company, in form and
substance as is customarily given by independent certified public
accountants to underwriters in an underwritten public offering and
reasonably satisfactory to a majority in interest of the Holders
participating in such registration, addressed to the underwriters, if
any, and if permitted by applicable accounting standards, to the
Holders participating in such registration; and
(v) assist the Holders in the deposit of Ordinary
Shares with the depositary and the issuance of American Depositary
Receipt representing the ADSs equivalent to such Ordinary Shares.
(f) Indemnification.
(i) The Company will indemnify each of the Holders,
as applicable, each of its officers, directors and partners, and each
person controlling each of the Holders, with respect to each
registration which has been effected pursuant to this Section 2, and
each underwriter, if any, and each person who controls such
underwriter, against all claims, losses, 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 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 statements
therein not misleading, or any violation by the Company of the
Securities Act or the Exchange Act or any rule or regulation thereunder
applicable to the Company and relating to action or inaction required
of the Company in connection with any such registration, qualification
or compliance, and will reimburse each of the Holders, each of its
officers, directors and partners, and each person controlling each of
the Holders, each such underwriter and each person who controls any
such underwriter, for any legal and any other expenses reasonably
incurred in connection with investigating and defending any such claim,
loss, damage, liability or action, provided that the Company 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 on any untrue
statement or omission based upon written information furnished to the
Company by the Holders or underwriter and stated to be specifically for
use therein.
8
(ii) Each of the Holders will, if Registrable
Securities held by it 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 and each underwriter,
if any, of the Company's securities covered by such a registration
statement, each person who controls the Company or such underwriter,
each Other Stockholder and each of their officers, directors, and
partners, and each person controlling such Other Stockholder against
all claims, losses, 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 made by such
Holder, or any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the
statements by such Holder therein not misleading, and will reimburse
the Company and such Other Stockholders, directors, officers, partners,
persons, underwriters or control persons for any legal or any other
expenses reasonably incurred in connection with investigating or
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 the Company by such Holder and stated to be specifically
for use therein; provided, however, that the obligations of each of the
Holders hereunder shall be limited to an amount equal to the net
proceeds to such Holder of securities sold as contemplated herein.
(iii) Each party entitled to indemnification under
this Section 2(f) (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 any litigation resulting
therefrom, shall be approved by the Indemnified Party (whose approval
shall not unreasonably be withheld) and the Indemnified Party may
participate in such defense at such party's expense (unless the
Indemnified Party shall have reasonably concluded that there may be a
conflict of interest between the Indemnifying Party and the Indemnified
Party in such action, in which case the fees and expenses of counsel
shall be at the expense of the Indemnifying Party), 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 under this Section 2 unless the Indemnifying Party is
materially prejudiced thereby. 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. Each
Indemnified Party shall furnish such information regarding itself or
the claim in question as an Indemnifying Party may reasonably request
in writing and as shall be
9
reasonably required in connection with the defense of such claim and
litigation resulting therefrom.
(iv) If the indemnification provided for in this
Section 2(f) is held by a court of competent jurisdiction to be
unavailable to an Indemnified Party with respect to any loss,
liability, claim, damage or expense referred to herein, then the
Indemnifying Party, in lieu of indemnifying such Indemnified Party
hereunder, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such loss, liability, claim, damage or
expense in such proportion as is appropriate to reflect the relative
fault of the Indemnifying Party on the one hand and of the Indemnified
Party on the other in connection with the statements or omissions which
resulted in such loss, liability, claim, damage or expense, as well as
any other relevant equitable considerations. The relative fault of the
Indemnifying Party and of the Indemnified Party shall be determined by
reference to, among other things, whether the untrue (or alleged
untrue) statement of a material fact or the omission (or alleged
omission) to state a material fact relates to information supplied by
the Indemnifying Party or by the Indemnified Party and the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
(v) Notwithstanding the foregoing, to the extent that
the provisions on indemnification and contribution contained in the
underwriting agreement entered into in connection with any underwritten
public offering contemplated by this Agreement are in conflict with the
foregoing provisions, the provisions in such underwriting agreement
shall be controlling.
(vi) The foregoing indemnity agreement of the Company
and Holders is subject to the condition that, insofar as they relate to
any loss, claim, liability or damage made in a preliminary prospectus
but eliminated or remedied in the amended prospectus on file with the
Commission at the time the registration statement in question becomes
effective or the amended prospectus filed with the Commission pursuant
to Commission Rule 424(b) (the "Final Prospectus"), such indemnity or
contribution agreement shall not inure to the benefit of any
underwriter or Holder if a copy of the Final Prospectus was furnished
to the underwriter and was not furnished to the person asserting the
loss, liability, claim or damage at or prior to the time such action is
required by the Securities Act.
(g) Information by the Holders.
(i) Each of the Holders holding securities included
in any registration shall furnish to the Company such information
regarding such Holder and the distribution proposed by such Holder as
the Company may reasonably request in writing and as shall be
reasonably required in connection with any registration, qualification
or compliance referred to in this Section 2.
10
(ii) In the event that, either immediately prior to
or subsequent to the effectiveness of any registration statement, any
Holder shall distribute Registrable Securities to its partners, such
Holder shall so advise the Company and provide such information as
shall be necessary to permit an amendment to such registration
statement to provide information with respect to such partners, as
selling securityholders. Promptly following receipt of such
information, the Company shall file an appropriate amendment to such
registration statement reflecting the information so provided. Any
incremental expense to the Company resulting from such amendment shall
be borne by such Holder.
(h) Rule 144 Reporting.
With a view to making available the benefits of certain rules
and regulations of the Commission which may permit the sale of restricted
securities to the public without registration, the Company agrees to:
(i) make and keep public information available as
those terms are understood and defined in Rule 144 under the Securities
Act ("Rule 144");
(ii) use its best efforts to file with the Commission
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
(iii) so long as the Holder owns any Registrable
Securities, furnish to the Holder upon request, a written statement by
the Company as to its compliance with the reporting requirements of
Rule 144 (at any time from and after ninety (90) days following the
effective date of the first registration statement filed by the Company
for an offering of its securities to the general public), and 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 as the Holder may reasonably request in availing
itself of any rule or regulation of the Commission allowing the Holder
to sell any such securities without registration.
(i) Holdback Agreement. If any registration of
Registrable Securities shall be in connection with an underwritten public
offering, each Holder of Registrable Securities agrees not to effect any public
sale or distribution, including any sale pursuant to Rule 144 under the
Securities Act, of any equity securities of the Company, or of any security
convertible into or exchangeable or exercisable for any equity security of the
Company (in each case, other than as part of such underwritten public offering),
within seven (7) days before or such period not to exceed ninety (90) days as
the underwriting agreement may require (or such lesser period as the managing
underwriters may permit) after the effective date of such registration (except
as part of such registration), provided that all other stockholders of the
Company having registration rights, the Company and each officer and director of
the Company shall have agreed to a similar holdback restriction.
3. MISCELLANEOUS
11
(a) Directly or Indirectly. Where any provision in
this Agreement refers to action to be taken by any Person, or which such Person
is prohibited from taking, such provision shall be applicable whether such
action is taken directly or indirectly by such Person.
(b) Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of New York.
(c) Section Headings. The headings of the sections
and subsections of this Agreement are inserted for convenience only and shall
not be deemed to constitute a part thereof.
(d) Notices.
(i) All communications under this Agreement shall be
in writing and shall be delivered by hand or facsimile or mailed by
overnight courier or by registered or certified mail, postage prepaid:
(A) if to the Company, to Flamel
Technologies S.A., Parc Club du Moulin a Vent, 33, avenue
Docteur Georges Levy, 69693 Venisseux Cedex, France,
Attention: Chief Executive Officer (facsimile:
(011-33-4-72-78-3446), or at such other address as it may have
furnished in writing to the Holders;
(B) if to the Holders, at the address or
facsimile number listed on Schedule I hereto, or at such other
address or facsimile number as may have been furnished the
Company in writing.
(iii) Any notice so addressed shall be deemed to be
given: if delivered by hand or facsimile, on the date of such delivery;
if mailed by courier, on the first business day following the date of
such mailing; and if mailed by registered or certified mail, on the
third business day after the date of such mailing.
(e) Reproduction of Documents. This Agreement and all
documents relating thereto, including, without limitation, any consents, waivers
and modifications which may hereafter be executed may be reproduced by the
Holders by any photographic, photostatic, microfilm, microcard, miniature
photographic or other similar process and the Holders may destroy any original
document so reproduced. The parties hereto agree and stipulate that any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by the Holders in the
regular course of business) and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
(f) Successors and Assigns. This Agreement shall
inure to the benefit of and be binding upon the successors and assigns of each
of the parties.
12
(g) Entire Agreement; Amendment and Waiver. This
Agreement constitutes the entire understanding of the parties hereto and
supersedes all prior understanding among such parties. This Agreement may be
amended, and the observance of any term of this Agreement may be waived, with
(and only with) the written consent of the Company and each of the Investors
holding then outstanding Registrable Securities Holders.
(h) Severability. In the event that any part or parts
of this Agreement shall be held illegal or unenforceable by any court or
administrative body of competent jurisdiction, such determination shall not
affect the remaining provisions of this Agreement which shall remain in full
force and effect.
(i) Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be deemed an original and all of
which together shall be considered one and the same agreement.
[THIS SPACE INTENTIONALLY LEFT BLANK]
13
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date first set forth above.
FLAMEL TECHNOLOGIES S.A.
By:
--------------------------------------
Gerard Soula
Chief Executive Officer
INVESTORS:
BIOTECHNOLOGY VALUE FUND, L.P.
By: BVF PARTNERS L.P., its General Partner
By: BVF, INC., its General Partner
By:
-------------------------------
Mark N. Lampert
President
BIOTECHNOLOGY VALUE FUND II, L.P.
By: BVF PARTNERS L.P., its General Partner
By: BVF, INC., its General Partner
By:
-------------------------------
Mark N. Lampert
President
INVESTMENT 10 L.L.C.
By: BVF PARTNERS, L.P., its Investment Advisor
By: BVF, INC., its General Partner
By:
-------------------------------
Mark N. Lampert
President
14
ALTA BIOPHARMA PARTNERS LP
By: Alta BioPharma Management LLC
By:
-----------------------------------
Name:
Title:
ALTA EMBARCADERO BIOPHARMA, LLC
By:
-----------------------------------
Name:
Title:
FLAMEL CHASE PARTNERS (ALTA BIO), LLC
By: Alta/Chase BioPharma Management, LLC
By:
-----------------------------------
Name:
Title:
CHASE EUROPEAN EQUITY ASSOCIATES, LLC
By: Chase Capital Partners, its Manager
By:
-----------------------------------
Name:
Title:
15
SCHEDULE I
Name and Address
of Investor
BIOTECHNOLOGY VALUE FUND, L.P.
c/o BVF Partners, L.P.
One Sansome Street, 39th Floor
San Francisco, CA 94104
BIOTECHNOLOGY VALUE FUND II, L.P.
c/o BVF Partners, L.P.
One Sansome Street, 39th Floor
San Francisco, CA 94104
INVESTMENT 10 L.L.C.
c/o BVF Partners, L.P.
One Sansome Street, 39th Floor
San Francisco, CA 94104
ALTA BIOPHARMA PARTNERS LP
One Embarcadero Center
Suite 4050
San Francisco, CA 94111
ALTA EMBARCADERO BIOPHARMA, LLC
One Embarcadero Center
Suite 4050
San Francisco, CA 94111
FLAMEL CHASE PARTNERS (ALTA BIO), LLC
One Embarcadero Center
Suite 4050
San Francisco, CA 94111
CHASE EUROPEAN EQUITY ASSOCIATES, LLC
380 Madison Avenue
12th Floor
New York, NY 10017-2951
Exhibit D
NO EXHIBIT
EXHIBIT E
FREE TRANSLATION FROM FRENCH
- --------------------------------------------------------------------------------
FLAMEL TECHNOLOGIES
A French Corporation (Societe Anonyme) with Share Capital of FRF10,351,352
Registered Office:
------------------
Parc Club du Moulin a Vent
33, Avenue du Docteur Georges Levy
69693 VENISSIEUX (Rhone)
Lyon Trade and Company Registry No. B 379 001 530
- --------------------------------------------------------------------------------
CERTIFICATE
I, Patrick PERRIN, Chief Financial Officer hereby certify that _________________
Is registered in the register of BSA (Registre des BSA) of the Company as the
owner of ___________________________ Class A BSA issued by the Extraordinary
General Meeting of shareholders of March 23, 2000.
Each of those BSA entitles its owner to subscribe for one Ordinary Share of
FLAMEL TECHNOLOGIES at the price of FF 39.10.
All the conditions of the exercise of the BSA are defined in the fourth
resolution of the minutes of the Extraordinary General Meeting of shareholders
of March 23, 2000.
At:
On:
FREE TRANSLATION FROM FRENCH
I. FEATURES OF THE STOCK WARRANTS
1. Issue price of the BSAs - Payment
The BSAs are issued today at a price of FRF 0.01 per warrant to be paid
up in full in cash at the time of subscription.
2. Date of allotment of and subscription for the BSAs
Subscriptions for the BSAa shall be accepted starting at the end of
this Shareholders' Meeting, and the subscription period shall end on
March 30, 2000, provided however that the subscription period may be
closed in advance.
BSAs shall be subscribed for by signing the application form provided
to the subscriber by the Company, and by payment to the Company of the
subscription price of the BSAs.
3. Form of BSAs
The BSAs are being issued in registered form only. Ownership thereof
shall be evidenced by registration in the specific BSA register kept by
the Company, once the beneficiaries have subscribed for the BSAs in
accordance with the provisions of paragraph 2 above.
4. Transfer of BSAs
The assignment, contribution or transmission of the BSAs in any manner
whatever shall not be subject to any restrictions whatever, with the
exception of any French and/or foreign legal restrictions (including
pursuant to applicable U.S. securities regulations).
5. Terms governing the exercise of BSAs
a) The BSAs may be exercised by the beneficiaries for a period of five
years from the date of the Shareholders' Meeting.
b) Each BSA shall entitle the holder thereof to subscribe for one
Ordinary share of the Company, provided however that no more than
1,799,000 Ordinary shares of the Company may be subscribed by
exercising the BSAs (subject to any adjustments, notably in the case of
fractional shares).
c) The subscription price for the Ordinary Shares of the Company issued
through the exercise of the BSAs, which is to be paid by the
beneficiaries, shall be paid in full at the time of subscription.
d) If a beneficiary decides to exercise some or all of its BSAs, it
shall so notify the Company by certified letter, return receipt
requested within the time period specified in (a) above, accompanied by
a subscription form for new Ordinary Shares and the subscription price
for those shares calculated in accordance with the terms of this
article.
6. Dividends earned by the Ordinary Shares of the Company acquired through
the exercise of the BSAs
The Ordinary Shares of the Company subscribed for through the exercise
of the BSAs shall earn dividends as of the date on which they were
subscribed.
7. Transfer of Ordinary Shares of the Company subscribed for through the
exercise of BSAs
The assignment, contribution or transmission in any manner whatever of
the Ordinary Shares of the Company subscribed for through the exercise
of the BSAs shall not be subject to any restrictions whatsoever, with
the exeception of any French and/or foreign legal restrictions
(including those pursuant to applicable U.S. securities regulations).
FREE TRANSLATION FROM FRENCH
II. MEASURES TO PROTECT THE RIGHTS OF WARRANT HOLDERS IN THE CASE OF FINANCIAL
TRANSACTIONS SUBSEQUENT TO THE ALLOTMENT OF WARRANTS
1. New financial transactions
a) In view of the terms and conditions governing the allotment and
exercise of the stock warrants set out below, the legal measures
referred to in articles 194-5, paragraph 2 and 3 of the Act of July
24, 1966 designed to protect the rights of stock warrant holders
shall have no effect as regards such warrants as they have not been
subject to a Warrant Exercise Confirmation.
b) Beginning on the date on which the stock warrants have been subject
to a Warrants Exercise Confirmation and for so long as said
warrants exist, there shall be no capitalization of reserves,
profits, or share premiums nor any cash distribution of reserves or
distribution in the form of securities unless the rights of the
holder of said warrants are protected as follows:
o in the event of a capital increase through the capitalization
of reserves, profits, or share premiums, the Special Meeting
of Shareholders which carries out said increase shall pay
into a frozen reserve account such amount as may be required
either to increase the par value of those shares which may be
subscribed for by the holder of the stock warrants or to
allot free shares to the holder of the stock warrants on the
same terms and conditions, except with respect to the vesting
of the rights associated with the shares, in a quantity equal
to what it would have received if it had been a shareholder
at the time of the principal allotment.
o in the event of the distribution of premiums or reserves in
the form of cash or securities, the Meeting of Shareholders
which makes said distribution shall pay said amount into a
frozen reserve account and retain such securities, if any, as
are necessary to remit to the warrant holder the amount or
the securities - which may have a different dividend date -
that he would have received if he had been a shareholder at
the time of the distribution and had participated therein.
(i) Distribution of equity securities or compound
securities held in a portfolio.
In the event that the company whose securities were
distributed then engages in a transaction involving
stock rights or allocation rights set aside for its
shareholders, the issuing company may, in the interests
of the warrant holder, exercise the right attached to
such securities it has retained. In that case it shall
offer the securities so obtained to the warrant holder
as soon as they are exercised and the warrant holder
shall be required to repay it any sums that may be paid
to subscribe for them.
In the event that the number of securities to which the
warrant holder is entitled includes fractional shares,
this fraction shall give rise to a cash payment
calculated on the basis of the most recent market price
of said security prior to the warrant exercise date.
The price used shall be that on the regulated French
exchange on which said security is listed, if any, and
shall be determined in accordance with the provisions
of article 1843-4 of the Civil Code in all other cases.
The rights associated with the shares obtained as a
result of the transactions described above shall pass
at that time.
(ii) Distribution of bonds held in a portfolio
In the case of the distribution of bonds held in a
portfolio, said bonds shall be distributed together
with all bonds which have not matured by the
subscription date.
In the event that the distribution of securities
involved bonds and that said bonds were redeemed prior
to the stock warrant exercise date, the rights of the
holder of the warrants shall be satisfied when said
warrants are exercised by a cash payment calculated
proportionate to the redemption price of said
securities.
FREE TRANSLATION FROM FRENCH
c) Solely with respect to such stock warrants as have already been
subject to a Warrants Exercise Confirmation, the provisions of
article 194-6, paragraph 2 of the Act of July 24, 1966 shall apply
to any capital increase set aside for the shareholders.
d) Beginning on the date on which the stock warrants will have been
subject to Warrants Exercise Confirmation and for so long as said
warrants exist, the Company shall be prohibited from redeeming its
capital stock or reducing it by way of redemption, or from
modifying the distribution of its profits.
2. Dissolution of the Company by merger or demerger - reduction of capital
a) In the event that the Company is merged into an existing company or
participants in a merger involving the creation of a new company,
or in the event of a demerger or spin-off involving a capital
contribution to newly formed or existing companies, the rights of
the warrant holder shall be extended to the stock of the acquiring
company or of the new company or companies which it may subscribe
for in place of the stock of the Company by exercising said
warrants on the terms and conditions set out below.
The number of shares which it shall be entitled to subscribe for
shall be calculated by correcting the number of shares of the
Company which is issuing the shares to which the warrant holder was
entitled by the exchange ratio of the shares of the latter company
to the shares of the acquiring company, or of the new company or
companies; those companies shall be substituted for the issuing
company for purposes of the above provisions, which are intended to
protect the rights, if any, of the stock warrant holder in the case
of financial transactions or transactions involving securities,
and, as a general matter, to ensure that the rights of the stock
warrant holder are respected in accordance with the applicable
statutory, regulatory and contractual conditions.
b) In the event of a reduction of capital due to losses, through the
reduction of either the par value of the shares or the number of
shares, the rights of the stock warrant holder which opts to
exercise said warrants shall be reduced accordingly, as if said
warrant holder had been a shareholder since the date on which the
stock, warrants were issued.
FREE TRANSLATION FROM FRENCH
- --------------------------------------------------------------------------------
FLAMEL TECHNOLOGIES
A French Corporation (Societe Anonyme) with Share Capital of FRF10,351,352
Registered Office:
------------------
Parc Club du Moulin a Vent
33, Avenue du Docteur Georges Levy
69693 VENISSIEUX (Rhone)
Lyon Trade and Company Registry No. B 379 001 530
- --------------------------------------------------------------------------------
CERTIFICATE
I, Patrick PERRIN, Chief Financial Officer hereby certify that
______________________________________________.
Is registered in the register of BSA (Registre des BSA) of the Company as the
owner of ____________________________________ Class B BSA issued by the
Extraordinary General Meeting of shareholders of March 23, 2000.
Each of those BSA entitles its owner to subscribe for one Ordinary Share of
FLAMEL TECHNOLOGIES at the price of FF 39.10.
All the conditions of the exercise of the BSA are defined in the fifth
resolution of the minutes of the Extraordinary General Meeting of shareholders
of March 23, 2000.
At:
On:
FREE TRANSLATION FROM FRENCH
I. FEATURES OF THE STOCK WARRANTS
1. Issue price of the BSAs - Payment
The BSAs are issued today at a price of FRF 0.01 per warrant to be paid
up in full in cash at the time of subscription.
2. Date of allotment of and subscription for the BSAs
Subscriptions for the BSAa shall be accepted starting at the end of
this Shareholders' Meeting, and the subscription period shall end on
March 30, 2000, provided however that the subscription period may be
closed in advance.
BSAs shall be subscribed for by signing the application form provided
to the subscriber by the Company, and by payment to the Company of the
subscription price of the BSAs.
3. Form of BSAs
The BSAs are being issued in registered form only. Ownership thereof
shall be evidenced by registration in the specific BSA register kept by
the Company, once the beneficiaries have subscribed for the BSAs in
accordance with the provisions of paragraph 2 above.
4. Transfer of BSAs
The assignment, contribution or transmission of the BSAs in any manner
whatever shall not be subject to any restrictions whatever, with the
exception of any French and/or foreign legal restrictions (including
pursuant to applicable U.S. securities regulations).
5. Terms governing the exercise of BSAs
a) The BSAs may be exercised by the beneficiaries for a period of five
years from the date of the Shareholders' Meeting.
b) Each BSA shall entitle the holder thereof to subscribe for one
Ordinary Share of the Company, provided however that no more that
1,927,500 Ordinary shares of the Company may be subscribed by
exercising the BSAs (subject to any adjustments, notably in the case of
fractional shares).
c) The subscription price for the Ordinary Shares of the Company issued
through the exercise of the BSAs, which is to be paid by the
beneficiaries, shall be paid in full at the time of subscription.
d) The right for the beneficiaries to exercise some or all of their
BSAs will be subject to the following:
o One tranche, representing the right to
exercise one-third of the BSA, will be
exercisable only if during the period between
February 29, 2000, and the earlier of December
31, 2000 or the date of exericse, there did not
exist 8 or more days on which the closing price
of Flamel ADSs, as reported on NASDAQ, was less
than $6.00;
o One tranche, representing the right to
exercise one-third of the BSA, will be
exercisable only if during the period between
February 29, 2000, and the earlier of December
31, 2000 or the date of exercise, there did not
exist 8 or more days on which the closing price
of Flamel ADSs, as reported on NASDAQ, was less
than $4.51; and
o One tranche, representing the right to
exercise one-third of the BSA, will be
exercisable only if during the period between
February 29, 2000, and the
FREE TRANSLATION FROM FRENCH
earlier of December 31, 2000 or the date of
exercise, there did not exist 8 or more days on
which the closing price of Flamel ADSs, as
reported on NASDAQ, was less than $3.00.
e) If a beneficiary decides to exercise some or all of its BSAs, it
shall so notify the Company by certified letter, return receipt
requested within the time period specified in (a) above, accompanies by
a subcription form for new Ordinary Shares and the subscription price
for those shares calculated in accordance with the terms of this
article.
6. Dividends earned by the Ordinary Shares of the Company acquired through
the exercise of the BSAs
The Ordinary Shares of the Company subscribed for through the exercise
of the BSAs shall earn dividends as of the date on which they were
subscribed.
7. Transfer of Ordinary Shares of the Company subscribed for through the
exercise of BSAs
The assignment, contribution or transmission in any manner whatever of
the Ordinary Shares of the Company subscribed for through the exercise
of the BSAs shall not be subject to any restrictions whatsoever, with
the exeception of any French and/or foreign legal restrictions
(including those pursuant to applicable U.S. securities regulations).
II. MEASURES TO PROTECT THE RIGHTS OF WARRANT HOLDERS IN THE CASE OF FINANCIAL
TRANSACTIONS SUBSEQUENT TO THE ALLOTMENT OF WARRANTS
1. New financial transactions
a) In view of the terms and conditions governing the allotment and
exercise of the stock warrants set out below, the legal measures
referred to in articles 194-5, paragraph 2 and 3 of the Act of July
24, 1966 designed to protect the rights of stock warrant holders
shall have no effect as regards such warrants as they have not been
subject to a Warrant Exercise Confirmation.
b) Beginning on the date on which the stock warrants have been subject
to a Warrants Exercise Confirmation and for so long as said
warrants exist, there shall be no capitalization of reserves,
profits, or share premiums nor any cash distribution of reserves or
distribution in the form of securities unless the rights of the
holder of said warrants are protected as follows:
o in the event of a capital increase through the capitalization
of reserves, profits, or share premiums, the Special Meeting
of Shareholders which carries out said increase shall pay
into a frozen reserve account such amount as may be required
either to increase the par value of those shares which may be
subscribed for by the holder of the stock warrants or to
allot free shares to the holder of the stock warrants on the
same terms and conditions, except with respect to the vesting
of the rights associated with the shares, in a quantity equal
to what it would have received if it had been a shareholder
at the time of the principal allotment.
o in the event of the distribution of premiums or reserves in
the form of cash or securities, the Meeting of Shareholders
which makes said distribution shall pay said amount into a
frozen reserve account and retain such securities, if any, as
are necessary to remit to the warrant holder the amount or
the securities - which may have a different dividend date -
that he would have received if he had been a shareholder at
the time of the distribution and had participated therein.
(i) Distribution of equity securities or compound
securities held in a portfolio.
In the event that the company whose securities were
distributed then engages in a transaction involving
stock rights or allocation rights set aside for its
shareholders, the
FREE TRANSLATION FROM FRENCH
issuing company may, in the interests of the warrant
holder, exercise the right attached to such securities
it has retained. In the case it shall offer the
securities so obtained to the warrant holder as soon as
they are exercised and the warrant holder shall be
required to repay it any sums that may be paid to
subscribe for them.
In the event that the number of securities to which the
warrant holder is entitled includes fractional shares,
this fraction shall give rise to a cash payment
calculated on the basis of the more recent market price
of said security prior to the warrant exercise date.
The price used shall be that on the regulated French
exchange on which said security is listed, if any, and
shall be determined in accordance with the provisions
of article 1843-4 of the Civil Code in all other cases.
The rights associated with the shares obtained as a
result of the transactions described above shall pass
at that time.
(ii) Distribution of bonds held in a portfolio
In the case of the distribution of bonds held in a
portfolio, said bonds shall be distributed together
with all bonds which have not matured by the
subscription date.
In the event that the distribution of securities
involved bonds and that said bonds were redeemed prior
to the stock warrant exercise date, the rights of the
holder of the warrants shall be satisfied when said
exercised by a cash payment calculated proportionate to
the redemption price of said securities.
c) Solely with respect to such stock warrants as have already been
subject to a Warrants Exercise Confirmation, the provisions of
article 194-6, paragraph 2 of the Act of July 24, 1966 shall apply
to any capital increase set aside for the shareholders.
d) Beginning on the date on which the stock warrants will have been
subject to Warrants Exercise Confirmation and for so long as said
warrants exist, the Company shall be prohibited from redeeming its
capital stock or reducing it by way of redemption, or from
modifying the distribution of its profits.
2. Dissolution of the Company by merger or demerger - reduction of capital
a) In the event that the Company is merged into an existing company or
participants in a merger involving the creation of a new company,
or in the event of a demerger or spin-off involving a capital
contribution to newly formed or existing companies, the rights of
the warrant holder shall be extended to the stock of the acquiring
company or of the new company or companies which it may subscribe
for in place of the stock of the Company by exercising said
warrants on the terms and conditions set out below.
The number of shares which it shall be entitled to subscribe for
shall be calculated by correcting the number of shares of the
Company which is issuing the shares to which the warrant holder was
entitled by the exchange ratio of the shares of the latter company
to the shares of the acquiring company, or of the new company or
companies; those companies shall be substituted for the issuing
company for purposes of the above provisions, which are intended to
protect the rights, if any, of the stock warrant holder in the case
of financial transactions or transactions involving securities,
and, as a general matter, to ensure that the rights of the stock
warrant holder are respected in accordance with the applicable
statutory, regulatory and contractual conditions.
b) In the event of a reduction of capital due to losses, through the
reduction of either the par value of the shares or the number of
shares, the rights of the stock warrant holder which opts to
exercise said warrants shall be reduced accordingly, as if said
warrant holder had been a shareholder since the date on which the
stock warrants were issued.
FREE TRANSLATION FROM FRENCH
- --------------------------------------------------------------------------------
FLAMEL TECHNOLOGIES
A French Corporation (Societe Anonyme) with Share Capital of FRF10,351,352
Registered Office:
------------------
Parc Club du Moulin a Vent
33, Avenue du Docteur Georges Levy
69693 VENISSIEUX (Rhone)
Lyon Trade and Company Registry No. B 379 001 530
- --------------------------------------------------------------------------------
CERTIFICATE
I, Patrick PERRIN, Chief Financial Officer hereby certify that
______________________________________________.
Is registered in the register of BSA (Registre des BSA) of the Company as the
owner of ____________________________________ Class C BSA issued by the
Extraordinary General Meeting of shareholders of March 23, 2000.
Each of those BSA entitles its owner to subscribe for one Ordinary Share of
FLAMEL TECHNOLOGIES at the price of FF 0.80.
All the conditions of the exercise of the BSA are defined in the sixth
resolution of the minutes of the Extraordinary General Meeting of shareholders
of March 23, 2000.
At:
On:
FREE TRANSLATION FROM FRENCH
FEATURES OF THE STOCK WARRANTS
1. Issue price of the BSAs - Payment
The BSAs are issued today at a price of FRF 0.01 per warrant, to be
paid up in full in cash at the time of subscription.
2. Date of allotment of and subscription for the BSAs
Subscriptions for the BSAs shall be accepted starting at the end of
this Shareholders' Meeting, and the subscription period shall end on
March 30, 2000, provided however that the subscription period may be
closed in advance.
BSAs shall be subscribed for by signing the application form provided
to the subscriber by the Company, and by payment to the Company of the
subscription price of the BSAs.
3. Form of BSAs
The BSAs are being issued in registered form only. Ownership thereof
shall be evidenced by registration in the specific BSA register kept by
the Company, once the beneficiaries have subscribed for the BSAs in
accordance with the provisions of paragraph 2 above.
4. Transfer of BSAs
The assignment, contribution or transmission of the BSAs in any manner
whatever shall not be subject to any restriction whatever, with that
exception of any French and/or foreign legal restrictions (including
pursuant to applicable U.S. securities regulations).
5. Terms governing the exercise of BSAs
a) The BSAs may be exercised by the beneficiaries for a period of five
years from the date of the Shareholders' Meeting.
b) Each BSA shall entitle the holder thereof to subscribe for one
Ordinary Share of the Company, provided however that no more than
1,927,500 Ordinary shares of the Company may be subscribed by
exercising the BSAs (subject to any adjustments, notably in the case of
fractional shares).
c) The subscription price for the Ordinary Shares of the Company issued
through the exercise of the BSAs, which is to be paid by the
beneficiaries, shall be paid in full at the time of subscription.
d) The right for the beneficiaries to exercise some or all of their
BSAs will be the following:
o If at any time during the period between February 29, 2000 and
December 31, 2000, there are 8 dates on which the closing price of
Flamel ADSs, as reported on NASDAQ, is less than $6.00, then the right
to exercise one-third of the BSA shall become effective as of beginning
of the day immediately following such 8 day.
o If at any time during the period between February 29, 2000 and
December 31, 2000, there are 8 dates on which the closing price of
Flamel ADSs, as reported on NASDAQ, is less than $4.51, then the right
to exercise an additional one-third of the BSA shall become effective
as of beginning of the day immediately following such 8 day.
o If at any time during the period between February 29, 2000 and
December 31, 2000, there are 8 dates on which the closing price of
Flamel ADSs, as
FREE TRANSLATION FROM FRENCH
reported on NASDAQ, is less than $3.00, then the right to exercise the
entire BSA shall become effective as of beginning of the day
immediately following such 8 day.
e) If a beneficiary decides to exercise some or all of its BSAs, it
shall so notify the Company by certified letter, return receipt
requested within the time period specified in (a) above, accompanied by
a subscription form for new Ordinary Shares and the subscription price
for those shares calculated in accordance with the terms of this
article.
6. Dividends earned by the Ordinary Shares of the Company acquired through
the exercise of the BSAs.
The Ordinary Shares of the Company subscribed for through the exercise
of the BSAs shall earn dividends as of the date on which they were
subscribed.
7. Transfer of Ordinary Shares of the Company subscribed for through the
exercise of BSAs
The assignment, contribution or transmission in any manner whatever of
the Ordinary Shares of the Company subscribed for through the exercise
of the BSAs shall not be subject to any restrictions whatsoever, with
the exception of any French and/or foreign legal restrictions
(including those pursuant to applicable U.S. securities regulations).
II. MEASURES TO PROTECT THE RIGHTS OF WARRANT HOLDERS IN THE CASE OF FINANCIAL
TRANSACTIONS SUBSEQUENT TO THE ALLOTMENT OF WARRANTS
1. New financial transactions
a) In view of the terms and conditions governing the allotment and
exercise of the stock warrants set out below, the legal measures
referred to in articles 194.5, paragraphs 2 and 3 of the Act of
July 24, 1966 designed to protect the rights of stock warrant
holders shall have no effect as regards such warrants as they have
not been subject to a Warrants Exercise Confirmation.
b) Beginning on the date on which the stock warrants have been subject
to a Warrants Exercise Confirmation and for so long as said
warrants exist, there shall be no capitalization of reserves,
profits, or share premiums nor any cash distribution of reserves or
distribution in the form of securities unless the rights of the
holder of said warrants are protected as follows:
o in the event of a capital increase through the capitalization
of reserves, profits, or share premiums, the Special Meeting
of Shareholders which carries out said increase shall pay
into a frozen reserve account such amount as may be required
either to increase the par value of those shares which may be
subscribed for by the holder of the stock warrants or to
allot free shares to the holder of the stock warrants on the
same terms and conditions, except with respect to the vesting
of the rights associated with the shares, in a quantity equal
to what it would have received if it had been a shareholder
at the time of the principal allotment.
o in the event of the distribution of premiums or reserves in
the form of cash or securities, the Meeting of Shareholders
which makes said distribution shall pay said amount into a
frozen reserve account and retain such securities, if any, as
are necessary to remit to the warrant holder the amount or
the securities--which may have a different dividend
date--that he would have received if he had been a
shareholder at the time of the distribution and had
participated therein.
(i) Distribution of equity securities or compound
securities held in a portfolio.
In the event that the company whose securities were
distributed then engages in a transaction involving
stock rights or allocation rights set aside for its
stockholders, the issuing company man, in the interests
of the warrant holder, exercise the right attached
FREE TRANSLATION FROM FRENCH
to such securities it has retained. In that case it
shall offer the securities so obtained to the warrant
holder as soon as they are exercised and the warrant
holder shall be required to repay it any sums that may
be paid to subscribe for them. In the event that the
number of securities to which the warrant holder is
entitled includes fractional shares, this fraction
shall give rise to a cash payment calculated on the
basis of the most recent market price of said security
prior to the warrant exercise date. The price used
shall be that on the regulated French exchange on which
said security is listed, if any, and shall be
determined in accordance with the provisions of article
1843-4 of the Civil Code in all other cases. The rights
accosicated with the shares obtained as a result of the
transactions described above shall pass at that time.
(ii) Distribution of bonds held in a portfolio.
In the case of the distribution of bonds held in a
portfolio, said bonds shall be distributed together
with all bonds which have not matured by the
subscription date.
In the event that the distribution of securities
involved bonds and that said bonds were redeemed prior
to the stock warrant exercise date, the rights of the
holder of the warrants shall be satisfied when said
warrants are exercised by a cash payment calculated
proportionate to the redemption price of said
securities.
c) Solely with respect to such stock warrants as have already been
subject to a Warrants Exercise Confirmation, the provisions of
article 194-6, paragraph 2 of the Act of July 24, 1966 shall apply
to any capital increase set aside for the stockholders.
d) Beginning on the date on which the stock warrants will have been
subject to Warrants Exercise Confirmation and for so long as said
warrants exist, the Company shall be prohibited from redeeming its
capital stock or reducing it by way of redemption, or from
modifying the distribution of its profits.
2. Dissolution of the Company by merger or demerger--reduction of capital
a) In the event that the Company is merged into an existing company or
participates in a merger involving the creation of a new company,
or in the event of a demerger or spin-off involving a capital
contribution to newly formed or existing companies, the rights of
the warrant holder shall be extended to the stock of the acquiring
company or of the new company or companies which it may subscribe
for in place of the stock of the Company by exercising said
warrants on the terms and conditions set out below.
The number of shares which it shall be entitled to subscribe for
shall be calculated by correcting the number of shares of the
Company which is issuing the shares to which the warrant holder was
entitled by the exchange ratio of the shares of the latter company
to the shares of the acquiring company, or of the new company or
companies; those companies shall be substituted for the issuing
company for purposes of the above provisions, which are intended to
protect the rights, if any, of the stock warrant holder in the case
of financial transactions or transactions involving securities,
and, as a general matter, to ensure that the rights of the stock
warrant holder are respected in accordance with the applicable
statutory, regulatory and contractual conditions.
b) In the event of a reduction of capital due to losses, through the
reduction of either the par value of the shares or the number of
shares, the rights of the stock warrant holder which opts to
exercise said warrants shall be reduced accordingly, as if said
warrant holder had been a sharehodler since the date on which the
stock warrants were issued.
EXHIBIT F
Flamel Technologies Announces $12.8 Million Private Placement
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Lyon, France, March 1, 2000 -- Flamel Technologies (Nasdaq: FLMLY) announced
today that it has entered into an agreement for a private placement of $12.8
million of its securities. Investors participating in this financing include the
venture capital funds and affiliates of Biotechnology Value Fund, Alta BioPharma
Partners and Chase Capital Partners. Upon the close of this financing, which is
anticipated at the end of March, the company will have cash and cash equivalents
of about $16 million.
Pursuant to the agreement Flamel will sell units at the French Franc equivalent
to $4.00 per unit consisting of one ordinary share, 0.56 of a Class A Warrant
and 0.60 of a combination of Class B or C Warrants. The Warrants have a
five-year term. In total, 3,212,500 additional ordinary shares will initially be
issued, together with Warrants covering an aggregate of 3,726,500 ordinary
shares. Following the completion of this transaction, the company will have a
total of 16,151,715 shares outstanding, excluding the exercise of Warrants.
Flamel expects to use the proceeds from the private placement to fund research
and development activities including clinical trials, and for general and
administrative expenses, capital expenditures and working capital.
The Class A Warrants will be exercisable at the French franc equivalent of $6.00
per share. The Class B Warrants will be exercisable at the French franc
equivalent of $6.00 per share and the Class C Warrants will be exercisable at
the French franc equivalent of $0.12 per share. The Class B and Class C Warrants
are structured into three tranches, such that the investors will effectively
have the right to purchase some combination of the Class B and Class C Warrants
depending on the trading price for the company's ADSs on Nasdaq for the balance
of the year 2000. If the closing price of its ADSs on Nasdaq falls below $6.00
for more than eight trading days, then the proportion of Class C Warrants which
are exercisable will increase and the proportion of the Class B Warrants which
are exercisable will correspondingly decrease. The relative percentage of each
(33%, 66% or 100%) that will be exercisable will be determined at specified
benchmark prices below $6.00. If the ADSs do not trade below $6.00 for more than
eight days prior to the end of the year, then all of the Class B Warrants will
be exercisable, and none of the Class C Warrants will be exercisable.
Conversely, if the ADSs trade below $3.00 for more than 8 days, all of the Class
C Warrants will be exercisable and none of the Class B Warrants will be
exercisable.
Under French law, the transaction is subject to shareholder approval. A
shareholder's meeting has been scheduled for March 23, and all materials
conforming to French law requirements will be distributed to holders of Flamel
ADSs in the next several days.
"We are pleased that this transaction will solidify our cash position and
provide Flamel with the financial resources which we believe will permit us to
continue our research and development program through the next two years.
We also believe that the additional capital will permit us to accelerate some of
our other programs, such as the development of our long-acting protein," said
Dr. Gerard Soula, President and CEO of Flamel.
Flamel Technologies S.A. is principally engaged in the development of advanced
polymer technologies for unique medicinal applications. To meet important
medical needs and develop commercially valuable products, the company is
building on its primary technology platforms: the Medusa(R) system for the
controlled peritoneal delivery of proteins and peptides, and the Micropump(R)
system for the controlled delivery of certain oral drugs.
Agsome(TM), Basulin(TM) and ColCys(TM) are trademarks, and Micropump(R) and
Medusa(R) are registered trademarks of Flamel Technologies.
This document contains a number of matters, particularly as related to the
status of various research projects and technology platforms, that constitute
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. The presentation reflects the current view of
management with respect to future events and is subject to risks and
uncertainties that could cause actual results to differ materially from those
contemplated in such forward-looking statements. These risks include risks that
products in the development stage may not achieve scientific objectives or
milestones or meet stringent regulatory requirements, uncertainties regarding
market acceptance of products in development, the impact of competitive products
and pricing, and the risks associated with Flamel's reliance on outside parties
and key strategic alliances. These and other risks are described more fully in
Flamel's Annual Report on the Securities and Exchange Commission Form 20-F for
the year ended December 31, 1998.
Copyright(C) 1999 Flamel Technologies, S.A. All rights reserved. (Updated March
2000).