SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
Connetics Corporation
---------------------
(Name of Issuer)
Common Stock
------------------------------
(Title of Class of Securities)
0002078541
--------------
(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 10, 1998
------------------------------
(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 48 Pages
<PAGE>
<TABLE>
<CAPTION>
CUSIP No. 0002078541 13D Page 2 of 48 Pages
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------
(1) Names of Reporting Persons. SS or I.R.S. Identification Nos. of Above Persons
Alta Partners
- -----------------------------------------------------------------------------------------------------------------------
(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
California
- -----------------------------------------------------------------------------------------------------------------------
Number Of Shares (7) Sole Voting Power 2,162,163
Beneficially Owned
By Each Reporting
Person With (8) Shared Voting Power -0-
(9) Sole Dispositive Power 2,162,163
(10) Shared Dispositive Power -0-
(11) Aggregate Amount Beneficially Owned By Each Reporting Person
2,162,163
- -----------------------------------------------------------------------------------------------------------------------
(12) Check If The Aggregate Amount In Row (11) Excludes Certain Shares*
- -----------------------------------------------------------------------------------------------------------------------
(13) Percent Of Class Represented By Amount In Row (11)
13.8%
- -----------------------------------------------------------------------------------------------------------------------
(14) Type Of Reporting Person
IA
- -----------------------------------------------------------------------------------------------------------------------
<FN>
*SEE INSTRUCTION BEFORE FILLING OUT!
</FN>
</TABLE>
Page 2 of 48 Pages
<PAGE>
<TABLE>
<CAPTION>
CUSIP No. 0002078541 13D Page 3 of 48 Pages
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------
(1) Names of Reporting Persons. SS or I.R.S. Identification Nos. of Above Persons
Alta BioPharma Partners, L.P.
- -----------------------------------------------------------------------------------------------------------------------
(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 1,367,712
Beneficially Owned
By Each Reporting
Person With (8) Shared Voting Power -0-
(9) Sole Dispositive Power 1,367,712
(10) Shared Dispositive Power -0-
(11) Aggregate Amount Beneficially Owned By Each Reporting Person
1,367,712
- -----------------------------------------------------------------------------------------------------------------------
(12) Check If The Aggregate Amount In Row (11) Excludes Certain Shares*
- -----------------------------------------------------------------------------------------------------------------------
(13) Percent Of Class Represented By Amount In Row (11)
8.7%
- -----------------------------------------------------------------------------------------------------------------------
(14) Type Of Reporting Person
PN
- -----------------------------------------------------------------------------------------------------------------------
<FN>
*SEE INSTRUCTION BEFORE FILLING OUT!
</FN>
</TABLE>
Page 3 of 48 Pages
<PAGE>
<TABLE>
<CAPTION>
CUSIP No. 0002078541 13D Page 4 of 48 Pages
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------
(1) Names of Reporting Persons. SS or I.R.S. Identification Nos. of Above Persons
Alta Embarcadero BioPharma, LLC
- -----------------------------------------------------------------------------------------------------------------------
(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 49,187
Beneficially Owned
By Each Reporting
Person With (8) Shared Voting Power -0-
(9) Sole Dispositive Power 49,187
(10) Shared Dispositive Power -0-
- -----------------------------------------------------------------------------------------------------------------------
(11) Aggregate Amount Beneficially Owned By Each Reporting Person
49,187
- -----------------------------------------------------------------------------------------------------------------------
(12) Check If The Aggregate Amount In Row (11) Excludes Certain Shares*
- -----------------------------------------------------------------------------------------------------------------------
(13) Percent Of Class Represented By Amount In Row (11)
.3%
- -----------------------------------------------------------------------------------------------------------------------
(14) Type Of Reporting Person
CO
- -----------------------------------------------------------------------------------------------------------------------
<FN>
*SEE INSTRUCTION BEFORE FILLING OUT!
</FN>
</TABLE>
Page 4 of 48 Pages
<PAGE>
<TABLE>
<CAPTION>
CUSIP No. 0002078541 13D Page 5 of 48 Pages
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------
(1) Names of Reporting Persons. SS or I.R.S. Identification Nos. of Above Persons
Connetics Partners (Alta Bio), LLC
- -----------------------------------------------------------------------------------------------------------------------
(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 745,264
Beneficially Owned
By Each Reporting
Person With (8) Shared Voting Power -0-
(9) Sole Dispositive Power 745,264
(10) Shared Dispositive Power -0-
- -----------------------------------------------------------------------------------------------------------------------
(11) Aggregate Amount Beneficially Owned By Each Reporting Person
745,264
- -----------------------------------------------------------------------------------------------------------------------
(12) Check If The Aggregate Amount In Row (11) Excludes Certain Shares*
- -----------------------------------------------------------------------------------------------------------------------
(13) Percent Of Class Represented By Amount In Row (11)
4.8%
- -----------------------------------------------------------------------------------------------------------------------
(14) Type Of Reporting Person
CO
- -----------------------------------------------------------------------------------------------------------------------
<FN>
*SEE INSTRUCTION BEFORE FILLING OUT!
</FN>
</TABLE>
Page 5 of 48 Pages
<PAGE>
<TABLE>
<CAPTION>
CUSIP No. 0002078541 13D Page 6 of 48 Pages
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------
(1) Names of Reporting Persons. SS or I.R.S. Identification Nos. of Above Persons
Alta BioPharma Management, LLC
- -----------------------------------------------------------------------------------------------------------------------
(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 1,367,712
Beneficially Owned
By Each Reporting
Person With (8) Shared Voting Power 794,451
(9) Sole Dispositive Power 1,367,712
(10) Shared Dispositive Power 794,451
- -----------------------------------------------------------------------------------------------------------------------
(11) Aggregate Amount Beneficially Owned By Each Reporting Person
2,162,163
- -----------------------------------------------------------------------------------------------------------------------
(12) Check If The Aggregate Amount In Row (11) Excludes Certain Shares*
- -----------------------------------------------------------------------------------------------------------------------
(13) Percent Of Class Represented By Amount In Row (11)
13.8%
- -----------------------------------------------------------------------------------------------------------------------
(14) Type Of Reporting Person
CO
- -----------------------------------------------------------------------------------------------------------------------
<FN>
*SEE INSTRUCTION BEFORE FILLING OUT!
</FN>
</TABLE>
Page 6 of 48 Pages
<PAGE>
<TABLE>
<CAPTION>
CUSIP No. 0002078541 13D Page 7 of 48 Pages
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------
(1) Names of Reporting Persons. SS or I.R.S. Identification Nos. of Above Persons
Alta/Chase BioPharma Management, LLC
- -----------------------------------------------------------------------------------------------------------------------
(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 745,264
Beneficially Owned
By Each Reporting
Person With (8) Shared Voting Power 1,416,899
(9) Sole Dispositive Power 745,264
(10) Shared Dispositive Power 1,416,899
- -----------------------------------------------------------------------------------------------------------------------
(11) Aggregate Amount Beneficially Owned By Each Reporting Person
2,162,163
- -----------------------------------------------------------------------------------------------------------------------
(12) Check If The Aggregate Amount In Row (11) Excludes Certain Shares*
- -----------------------------------------------------------------------------------------------------------------------
(13) Percent Of Class Represented By Amount In Row (11)
13.8%
- -----------------------------------------------------------------------------------------------------------------------
(14) Type Of Reporting Person
CO
- -----------------------------------------------------------------------------------------------------------------------
<FN>
*SEE INSTRUCTION BEFORE FILLING OUT!
</FN>
</TABLE>
Page 7 of 48 Pages
<PAGE>
<TABLE>
<CAPTION>
CUSIP No. 0002078541 13D Page 8 of 48 Pages
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------
(1) Names of Reporting Persons. SS or I.R.S. Identification Nos. of Above Persons
Jean Deleage
- -----------------------------------------------------------------------------------------------------------------------
(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 2,162,183
(9) Sole Dispositive Power -0-
(10) Shared Dispositive Power 2,162,183
- -----------------------------------------------------------------------------------------------------------------------
(11) Aggregate Amount Beneficially Owned By Each Reporting Person
268,564
- -----------------------------------------------------------------------------------------------------------------------
(12) Check If The Aggregate Amount In Row (11) Excludes Certain Shares*
- -----------------------------------------------------------------------------------------------------------------------
(13) Percent Of Class Represented By Amount In Row (11)
13.8%
- -----------------------------------------------------------------------------------------------------------------------
(14) Type Of Reporting Person
IN
- -----------------------------------------------------------------------------------------------------------------------
<FN>
*SEE INSTRUCTION BEFORE FILLING OUT!
</FN>
</TABLE>
Page 8 of 48 Pages
<PAGE>
<TABLE>
<CAPTION>
CUSIP No. 0002078541 13D Page 9 of 48 Pages
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------
(1) Names of Reporting Persons. SS or I.R.S. Identification Nos. of Above Persons
Garrett Gruener
- -----------------------------------------------------------------------------------------------------------------------
(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 2,162,183
(9) Sole Dispositive Power -0-
(10) Shared Dispositive Power 2,162,183
- -----------------------------------------------------------------------------------------------------------------------
(11) Aggregate Amount Beneficially Owned By Each Reporting Person
2,162,183
- -----------------------------------------------------------------------------------------------------------------------
(12) Check If The Aggregate Amount In Row (11) Excludes Certain Shares*
- -----------------------------------------------------------------------------------------------------------------------
(13) Percent Of Class Represented By Amount In Row (11)
13.8%
- -----------------------------------------------------------------------------------------------------------------------
(14) Type Of Reporting Person
IN
- -----------------------------------------------------------------------------------------------------------------------
<FN>
*SEE INSTRUCTION BEFORE FILLING OUT!
</FN>
</TABLE>
Page 9 of 48 Pages
<PAGE>
<TABLE>
<CAPTION>
CUSIP No. 0002078541 13D Page 10 of 48 Pages
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------
(1) Names of Reporting Persons. SS or I.R.S. Identification Nos. of Above Persons
Daniel Janney
- -----------------------------------------------------------------------------------------------------------------------
(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 2,162,183
(9) Sole Dispositive Power -0-
(10) Shared Dispositive Power 2,162,183
- -----------------------------------------------------------------------------------------------------------------------
(11) Aggregate Amount Beneficially Owned By Each Reporting Person
2,162,183
- -----------------------------------------------------------------------------------------------------------------------
(12) Check If The Aggregate Amount In Row (11) Excludes Certain Shares*
- -----------------------------------------------------------------------------------------------------------------------
(13) Percent Of Class Represented By Amount In Row (11)
13.8%
- -----------------------------------------------------------------------------------------------------------------------
(14) Type Of Reporting Person
IN
- -----------------------------------------------------------------------------------------------------------------------
<FN>
*SEE INSTRUCTION BEFORE FILLING OUT!
</FN>
</TABLE>
Page 10 of 48 Pages
<PAGE>
<TABLE>
<CAPTION>
CUSIP No. 0002078541 13D Page 11 of 48 Pages
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------
(1) Names of Reporting Persons. SS or I.R.S. Identification Nos. of Above Persons
Alix Marduel
- -----------------------------------------------------------------------------------------------------------------------
(2) Check The Appropriate Box If A Member Of A Group (a):
(b)X
- -----------------------------------------------------------------------------------------------------------------------
(3) SEC Use Only
- -----------------------------------------------------------------------------------------------------------------------
(4) Source Of Funds*
PF, 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 2,162,183
(9) Sole Dispositive Power -0-
(10) Shared Dispositive Power 2,162,183
- -----------------------------------------------------------------------------------------------------------------------
(11) Aggregate Amount Beneficially Owned By Each Reporting Person
2,162,183
- -----------------------------------------------------------------------------------------------------------------------
(12) Check If The Aggregate Amount In Row (11) Excludes Certain Shares*
- -----------------------------------------------------------------------------------------------------------------------
(13) Percent Of Class Represented By Amount In Row (11)
13.8%
- -----------------------------------------------------------------------------------------------------------------------
(14) Type Of Reporting Person
IN
- -----------------------------------------------------------------------------------------------------------------------
<FN>
*SEE INSTRUCTION BEFORE FILLING OUT!
</FN>
</TABLE>
Page 11 of 48 Pages
<PAGE>
<TABLE>
<CAPTION>
CUSIP No. 0002078541 13D Page 12 of 48 Pages
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------
(1) Names of Reporting Persons. SS or I.R.S. Identification Nos. of Above Persons
Guy Nohra
- -----------------------------------------------------------------------------------------------------------------------
(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 2,162,183
(9) Sole Dispositive Power -0-
(10) Shared Dispositive Power 2,162,183
- -----------------------------------------------------------------------------------------------------------------------
(11) Aggregate Amount Beneficially Owned By Each Reporting Person
2,162,183
- -----------------------------------------------------------------------------------------------------------------------
(12) Check If The Aggregate Amount In Row (11) Excludes Certain Shares*
- -----------------------------------------------------------------------------------------------------------------------
(13) Percent Of Class Represented By Amount In Row (11)
13.8%
- -----------------------------------------------------------------------------------------------------------------------
(14) Type Of Reporting Person
IN
- -----------------------------------------------------------------------------------------------------------------------
<FN>
*SEE INSTRUCTION BEFORE FILLING OUT!
</FN>
</TABLE>
Page 12 of 48 Pages
<PAGE>
<TABLE>
<CAPTION>
CUSIP No. 0002078541 13D Page 13 of 48 Pages
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------
(1) Names of Reporting Persons. SS or I.R.S. Identification Nos. of Above Persons
Marino Polestra
- -----------------------------------------------------------------------------------------------------------------------
(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 2,162,183
(9) Sole Dispositive Power -0-
(10) Shared Dispositive Power 2,162,183
- -----------------------------------------------------------------------------------------------------------------------
(11) Aggregate Amount Beneficially Owned By Each Reporting Person
2,162,183
- -----------------------------------------------------------------------------------------------------------------------
(12) Check If The Aggregate Amount In Row (11) Excludes Certain Shares*
- -----------------------------------------------------------------------------------------------------------------------
(13) Percent Of Class Represented By Amount In Row (11)
13.8%
- -----------------------------------------------------------------------------------------------------------------------
(14) Type Of Reporting Person
IN
- -----------------------------------------------------------------------------------------------------------------------
<FN>
*SEE INSTRUCTION BEFORE FILLING OUT!
</FN>
</TABLE>
Page 13 of 48 Pages
<PAGE>
Item 1. Security and Issuer.
This Statement on Schedule D relates to the Common Stock,
$0.001 par value per share (the "Shares"), of Connetics Corporation, a Delaware
corporation (the "Company"). The principal executive offices of the Company are
located at 3400 West Bossier Road, Palo Alto, California 94303.
Item 2. Identity and Background.
(a) This Statement is filed by Alta BioPharma Partners, L.P.,
a Delaware limited partnership ("Alta BioPharma"), and Alta Embarcadero
BioPharma, LLC, a Delaware limited liability company ("Embarcadero LLC"), and
Connetics Partners (Alta Bio), LLC, a Delaware LLC ("Connetics 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 director of
Connetics 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, Connetics 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 are the managing directors
of Alta Management, Alta/Chase Management and officers of Alta Partners (the
"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, Connetics 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, Connetics 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 Connetics 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 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.
Page 14 of 48 Pages
<PAGE>
(f) Alta Partners is a California corporation. Alta BioPharma
is a Delaware limited partnership. Embarcadero LLC is a Delaware limited
liability corporation. Connetics Alta Bio is a Delaware liability company. Alta
Management and Alta/Chase Management are Delaware limited liability companies.
Each of the Managing Directors is a citizen of the United States.
Item 3. Source and Amount of Funds or Other Consideration.
The total amount of funds required by Alta BioPharma to
acquire the 1,367,712 shares of Common Stock reported in Item 5(a) was
$6,325,668, the total amount of funds required by Embarcadero LLC to acquire the
49,187 shares of Common Stock reported in Item 5(a) was $227,489.88 and the
total amount of funds required by Connetics Alta Bio to acquire the 745,264
shares of Common Stock reported in Item 5(a) was $3,446,846. Such funds were
provided by each entities' capital available for investment.
Item 4. Purpose of Transaction.
Alta BioPharma, Embarcadero LLC, and Connetics Alta Bio
acquired the Common Stock 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 Common Stock, dispose of all or a
portion of the Common Stock that it holds, or cease buying or selling Common
Stock. Any such additional purchases or sales of the Common Stock may be in open
market or privately-negotiated transactions or otherwise.
On April 10, 1998, Alta BioPharma, Embarcadero LLC and
Connetics Alta Bio entered into a Common Stock Purchase Agreement (the "Common
Stock" Purchase Agreement") with the Company pursuant to which Alta BioPharma,
Embarcadero LLC and Connetics Alta Bio acquired, for an aggregate purchase price
of $10,000,003.88, a total of 2,162,163 Shares of Common Stock. 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 1,367,712
shares of Common Stock or approximately 8.73% of the shares deemed outstanding
by the Company (15,672,163) as of April 10, 1998. Connetics Alta Bio is the
direct beneficial owner of 745,264 shares of Common Stock or approximately 4.75%
of the shares deemed outstanding by the Company (15,672,163) as of April 10,
1998. Embarcadero LLC is the direct beneficial owner of 49,187 shares of Common
Stock or approximately .31% of the shares deemed outstanding by the Company
(15,672,163) as of April 10, 1998.
(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 10, 1998 Alta BioPharma, Connetics 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
$6,325,668, $3,446,846 and $227,489.88, 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.
Page 15 of 48 Pages
<PAGE>
(d) Alta BioPharma, Connetics Alta Bio and Embarcadero LLC
each have the right to receive dividends and proceeds from the sale of Common
Stock 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 Common Stock held by each entity.
(e) Not Applicable
Page 16 of 48 Pages
<PAGE>
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer.
The Connetics Corporation Common Stock Purchase Agreement
dated April 10, 1998 and The Connetics Corporation Registration Rights Agreement
dated April 10, 1998 are hereby incorporated in its entirety by this reference.
Item 7. Material to be Filed as Exhibits.
Exhibit A: Joint Filing Statement
Exhibit B: Connetics Corporation Common Stock Purchase
Agreement dated April 10, 1998.
Exhibit C: Connetics Corporation Registration Rights Agreement
dated April 10, 1998.
Exhibit D: Alta BioPharma Partners Limited Partnership
Management Rights Agreement dated April 10, 1998.
Page 17 of 48 Pages
<PAGE>
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 20, 1998
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 Connetics Partners (Alta Bio), LLC
-------------------------------
Eileen McCarthy, Member
By: Alta/Chase BioPharma Management,
Alta/Chase BioPharma Management, LLC 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
Page 18 of 48 Pages
<PAGE>
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 20, 1998
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 Connetics Partners (Alta Bio), LLC
-------------------------------
Eileen McCarthy, Member
By: Alta/Chase BioPharma Management,
Alta/Chase BioPharma Management, LLC 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
Page 19 of 48 Pages
<PAGE>
Exhibit B
CONNETICS CORPORATION
COMMON STOCK PURCHASE AGREEMENT
April 10, 1998
Page 20 of 48 Pages
<PAGE>
CONNETICS CORPORATION
COMMON STOCK PURCHASE AGREEMENT
This Common Stock Purchase Agreement (the "Agreement") is entered into
as of this 10th day of April, 1998, among Connetics Corporation, a Delaware
corporation (the "Company") and Alta BioPharma Partners, L.P., Connetics
Partners (Alta Bio), LLC and Alta Embarcadero BioPharma, LLC (each a "Purchaser"
and together the "Purchasers").
SECTION 1
Sale of Common Stock
1.1 Sale of Common Stock. Subject to the terms and conditions hereof,
on the Closing Date, as defined below, the Company will issue and sell to the
Purchasers, and the Purchasers will purchase from the Company, an aggregate of
2,162,163 shares of Common Stock, par value $0.001 per share, of the Company
(the "Common Stock"), for an aggregate purchase price of $10,000,003.88. The
number of shares of Common Stock to be purchased and the purchase price to be
paid by each Purchaser are as follows:
Purchaser Number of Shares Purchase Price
- --------- ---------------- --------------
Alta BioPharma Partners, L.P. 1,367,712 $6,325,668.00
Connetics Partners (Alta Bio), LLC 745,264 $3,446,846.00
Alta Embarcadero BioPharma, LLC 49,187 $227,489.88
1.2 Closing Date. The closing (the "Closing") of the purchase and sale
of the Common Stock shall be held at the offices of Venture Law Group, 2800 Sand
Hill Road, Menlo Park, California at 10:00 a.m. on April 10, 1998 or at such
other time and place upon which the Company and the Purchasers shall mutually
agree (the date of the Closing is hereinafter referred to as the "Closing
Date").
1.3 Delivery. At the Closing, the Company will deliver to each
Purchaser a certificate or certificates representing the shares of Common Stock
purchased by such Purchaser, against payment of the purchase price therefor, by
wire transfer or certified or cashier's check drawn on a United States ("U.S.")
bank.
1.4 Legend. The certificate or certificates for the Common Stock shall
be subject to a legend restricting transfer under the Securities Act of 1933, as
amended (the "Securities Act") and referring to restrictions on transfer herein,
such legend to be substantially as follows:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR
DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION MAY BE
Page 21 of 48 Pages
<PAGE>
EFFECTED WITHOUT (A) AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO, OR (B)
AN OPINION OF COUNSEL FOR THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR (C) FULL COMPLIANCE
WITH THE PROVISIONS OF RULE 144 UNDER THE ACT."
1.5 Removal of Legends. Any legend endorsed on a certificate pursuant
to Section 1.4 hereof shall be removed (i) if the shares of the Common Stock
represented by such certificate shall have been effectively registered under the
Securities Act or otherwise lawfully sold in a public transaction, (ii) if such
shares may be transferred in compliance with Rule 144(k) promulgated under the
Securities Act, or (iii) if the holder of such shares shall have provided the
Company with an opinion of counsel, in form and substance acceptable to the
Company, stating that a public sale, transfer or assignment of such shares may
be made without registration.
SECTION 2
Representations and Warranties of the Company
The Company hereby represents and warrants to the Purchasers that:
2.1 Organization. The Company is a corporation duly organized and
validly existing under the laws of the State of Delaware and is in good standing
under such laws. The Company has requisite corporate power and authority to own,
lease and operate its properties and assets, and to carry on its business as
presently conducted and as proposed to be conducted. The Company is qualified to
do business as a foreign corporation in each jurisdiction in which the ownership
of its property or the nature of its business requires such qualification,
except where failure to so qualify would not have a materially adverse effect on
the Company.
2.2 Authorization. The Company has all corporate right, power and
authority to enter into this Agreement and the Registration Rights Agreement
substantially in the form attached hereto as Exhibit A (the "Registration Rights
Agreement") and to consummate the transactions contemplated hereby and thereby.
All corporate action on the part of the Company, its directors and stockholders
necessary for the authorization, execution, delivery and performance of this
Agreement and the Registration Rights Agreement by the Company, and the
authorization, sale, issuance and delivery of the Common Stock and the
performance of the Company's obligations hereunder and under the Registration
Rights Agreement has been taken. This Agreement and the Registration Rights
Agreement have been duly executed and delivered by the Company and constitute
legal, valid and binding obligations of the Company enforceable in accordance
with their respective terms, subject to laws of general application relating to
bankruptcy, insolvency and the relief of debtors and rules of law governing
specific performance, injunctive relief or other equitable remedies, and to
limitations of public policy as they may apply to Section 1.6 of the
Registration Rights Agreement. Upon issuance and delivery pursuant to this
Agreement, all of the Common Stock will be duly and validly issued, fully paid
and nonassessable and free and clear of any liens and encumbrances. There are no
statutory, contractual or other preemptive rights or rights of first refusal
with respect to the issuance and sale of the Common Stock.
Page 22 of 48 Pages
<PAGE>
2.3 Validity of Securities. The Common Stock, when issued, sold and
delivered by the Company in accordance with the terms of this Agreement, will be
duly and validly issued, fully-paid and nonassessable. The issuance, sale and
delivery of the Common Stock are not subject to preemptive or any similar rights
of the Stockholders of the Company or any liens or encumbrances arising through
the Company. Based in part upon the representations of the Purchasers in this
Agreement, the offer, sale and issuance of the Common Stock will be made in
compliance with all applicable federal and state securities laws.
2.4 Capitalization. The authorized capital stock of the Company
consists of 50,000,000 shares of Common Stock, $0.001 par value, of which at
March 31, 1998, 13,518,150 shares were issued and outstanding, and 5,000,000
shares of Preferred Stock, $0.001 par value. The Company's Board of Directors
has authorized the creation of 90,000 shares of Series B Preferred Stock for
potential issuance under the Company's stockholder rights plan. Since March 31,
1998 no shares of the Company's Common or Preferred Stock have been issued,
except pursuant to the exercise of options or warrants outstanding as of March
31, 1998. All such issued and outstanding shares have been duly authorized and
validly issued and are fully paid and nonassessable. In addition to the
foregoing, the Company has reserved and outstanding the following warrants,
rights, options and convertible securities: (i) warrants for the purchase of
18,395 shares of Common Stock at an exercise price of $4.89 per share, which
warrants expire in February 2001; (ii) warrants for the purchase of 22,728
shares of Common Stock at an exercise price of $11.00 per share, which warrants
expire in December 2000; (iii) warrants for the purchase of 73,071 shares of
Common Stock at an exercise price of $5.78, which warrants expire in December
2002; (iv) warrants for the purchase of 20,000 shares of Common Stock at an
exercise price of $7.43 per share, which warrants expire in December, 2001; (v)
warrants for the purchase of 250,000 shares of Common Stock at an exercise price
of $8.25 per share, which warrants expire in January 2002; (vi) warrants for the
purchase of 905,000 shares of Common Stock at an exercise price of $9.08 per
share, which warrants expire in May, 2001; (vii) warrants for the purchase of
6,000 shares of Common Stock at an exercise price of $6.00 per share, which
warrants expire in January, 2003; (viii) 2,600,000 shares reserved for issuance
pursuant to the Company's 1994 Stock Plan (including an increase of 600,000
shares which is subject to stockholder approval at the annual meeting of the
Company's stockholders to be held on May 22, 1998), of which, at March 31, 1998,
options (net of repurchases) to purchase 311,289 shares had been exercised,
options to purchase 1,779,405 shares were outstanding and 509,306 shares
remained available for future grant; (ix) 500,000 shares reserved for issuance
pursuant to the Company's 1995 Employee Stock Purchase Plan (including an
increase of 400,000 shares which is subject to stockholder approval at the
annual meeting of the Company's stockholders to be held on May 22, 1998), of
which, at March 31, 1998, 53,853 shares had been issued; (x) 250,000 shares
reserved for issuance under the Company's 1995 Directors' Stock Option Plan
(including an increase of 490,000 shares which is subject to stockholder
approval at the annual meeting of the Company's stockholders to be held on May
22, 1998), of which, at March 31, 1998, 105,000 options had been granted; and
(xi) a commitment from Kepler Capital LLC to purchase up to $25 million of
Common Stock over a three-year period beginning on or before December 1, 1997.
In addition, the Company may be obligated to issue additional shares to
SmithKline Beecham Corporation on April 10, 1998 as part of the consideration
paid for the Company's acquisition of rights to Ridaura in December, 1996.
Except as described in this Section 2.2, there are no other options, warrants,
conversion privileges or other contractual rights presently outstanding to
purchase or otherwise acquire any authorized but unissued shares of the
Company's capital stock
Page 23 of 48 Pages
<PAGE>
or other securities. All of the issued and outstanding securities of the Company
have been issued in compliance with all applicable federal and state securities
laws.
2.5 No Conflict. The execution and delivery of this Agreement and the
Registration Rights Agreement do not, and the consummation of the transactions
contemplated hereby and thereby will not, conflict with, or result in any
violation of, or default (with or without notice or lapse of time, or both), or
give rise to a right of termination, cancellation or acceleration of any
obligation or to a loss of a material benefit, under, any provision of the
Certificate of Incorporation or Bylaws of the Company or any mortgage,
indenture, lease or other agreement or instrument, permit, concession,
franchise, license, judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to the Company, its properties or assets, which conflict,
violation, default or right would have a material adverse effect on the
business, properties, prospects or financial condition of the Company.
2.6 Accuracy of Reports; Financial Statements. All reports required to
be filed with the Securities and Exchange Commission (the "SEC") by the Company
from February 1, 1996 (the date of the Company's initial public offering)
through the date of this Agreement under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), copies of which have been made available to each
Purchaser (the "SEC Documents"), have been duly and timely filed, were in
substantial compliance with the requirements of their respective forms when
filed, were complete and correct in all material respects as of the dates at
which the information was furnished, and contained (as of such dates) no untrue
statement of a material fact nor omitted to state a material fact necessary in
order to make the statements made therein in light of the circumstances in which
made not misleading. The financial statements of the Company included in the SEC
Documents (the "Financial Statements") comply as to form in all material
respects with applicable accounting requirements and with the published rules
and regulations of the SEC with respect thereto. The Financial Statements have
been prepared in accordance with generally accepted accounting principles
consistently applied and fairly present the consolidated financial position of
the Company and any subsidiaries at the dates thereof and the consolidated
results of operations and consolidated cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal, recurring
adjustments).
2.7 Changes. Since March 20, 1998, (the date on which the Company's
Annual Report on Form 10-K for the year ended December 31, 1997 was filed with
the SEC), there has not been (a) any incurrence by the Company of any material
liability, absolute or contingent, or (b) any event or condition of any
character that has materially and adversely affected or might materially and
adversely affect the business, properties, prospects or financial condition of
the Company (as such business is presently conducted and as it is proposed to be
conducted). There is no material liability or contingency of the Company that is
not disclosed in the SEC Documents.
2.8 Governmental Consents, etc. No consent, approval or authorization
of or designation, declaration or filing with any governmental authority on the
part of the Company is required in connection with the valid execution and
delivery of this Agreement or the Registration Rights Agreement, or the
consummation of any other transaction contemplated hereby and thereby, except
such filings as may be required to be made with the SEC, the National
Association of Securities Dealers, Inc. ("NASD") and with governmental
authorities for
24 of 48 Pages
<PAGE>
purposes of effecting compliance with the securities and blue sky laws in the
states in which Common Stock is offered and/or sold, which compliance will be
effected in accordance with such laws.
2.9 Litigation. There is no pending or, to the best of the Company's
knowledge, threatened lawsuit, administrative proceeding, arbitration, labor
dispute or governmental investigation ("Litigation") to which the Company is a
party or by which any material portion of its assets, taken as a whole, may be
bound, nor is the Company aware of any basis therefor, which Litigation, if
adversely determined, would have a material adverse effect on the business,
properties, prospects or financial condition of the Company.
2.10 Intellectual Property. To its knowledge, and except as disclosed
in the SEC Documents, the Company owns or possesses sufficient legal rights to
all patents, trademarks, service marks, tradenames, copyrights, trade secrets,
licenses, information and proprietary rights and processes necessary for its
business as now conducted and as proposed to be conducted, without infringement
of any rights of a third party. The Company has not received any communications
alleging that the Company has violated or, by conducting its business as
proposed, would violate any of the patents, trademarks, service marks,
tradenames, copyrights, trade secrets or other proprietary rights or processes
of any other person or entity, which violation would have a material adverse
effect on the business, properties, prospects or financial condition of the
Company. Except as disclosed in the SEC Documents, the Company has not granted
(nor has the Company licensed from a third party) any material rights to or
licenses to its patents, trademarks, service marks, tradenames, copyrights,
trade secrets or other proprietary rights or processes.
2.11 Registration Rights. Except as provided in the Registration Rights
Agreement and as disclosed in the SEC Documents, the Company has not granted or
agreed to grant any rights to register its securities under the Securities Act,
including piggy-back rights, to any person or entity.
2.12 No Material Default. The Company is not in violation of or default
under any provision of (a) its Certificate of Incorporation or Bylaws or (b) any
mortgage, indenture, lease or other agreement or instrument, permit, concession,
franchise or license to which it is a party or by which it is bound or (c) any
federal or state judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to the Company, except with respect to clauses (b) and (c)
above, such violations or defaults as would not have a material adverse effect
on the business, properties, prospects or financial condition of the Company.
2.13 Disclosure. No representation or warranty of the Company contained
in this Agreement or the exhibits attached hereto (when read together and taken
as a whole), contains any untrue statement of a material fact or omits to state
a material fact necessary in order to make the statements contained herein or
therein in light of the circumstances under which they were made not misleading.
2.14 Solvency; No Default. As of this date the Company has sufficient
funds and cash flow to pay its debts and other liabilities as they become due,
and the Company is not in default with respect to any material debt or
liability.
Page 25 of 48 Pages
<PAGE>
2.15 Rights of Common Stock. The Common Stock shall have the rights,
preferences, privileges and restrictions provided in the Company's Amended and
Restated Certificate of Incorporation.
SECTION 3
Representations and Warranties of the Purchasers
Each Purchaser hereby represents and warrants to the Company as
follows:
3.1 Investment. Purchaser is acquiring the Common Stock for investment
for its own account, not as a nominee or agent and not with a view to or for
resale in connection with any distribution thereof. Purchaser understands that
the Common Stock purchased by such Purchaser from the Company pursuant to this
Agreement has not been registered under the Securities Act by reason of a
specific exemption from the registration provisions of the Securities Act which
depends upon, among other things, the bona fide nature of such Purchaser's
investment intent and the accuracy of such Purchaser's representations as
expressed herein.
3.2 Accredited Investor. Each Purchaser is an "accredited investor" as
defined by Rule 501(a) under the Securities Act of 1933, as amended (the
"Securities Act"). The SEC documents have been made available to each Purchaser,
and each Purchaser has received all the information it has requested regarding
the Company. Each Purchaser has such business and financial experience as is
required to give it the capacity to protect its own interests in connection with
the purchase of the Common Stock.
3.3 Authority. This Agreement and the Registration Rights Agreement
have been duly executed and delivered by each Purchaser and constitute legal,
valid and binding obligations of the Purchasers, enforceable in accordance with
their respective terms, subject to laws of general application relating to
bankruptcy, insolvency and the relief of debtors and rules of law governing
specific performance, injunctive relief or other equitable remedies, and to
limitations of public policy as they may apply to Section 1.6 of the
Registration Rights Agreement. The execution and delivery of this Agreement and
the Registration Rights Agreement do not, and the consummation of the
transactions contemplated hereby and thereby will not, conflict with or result
in any violation of any obligation under any judgment, order, decree, statute,
law, ordinance, rule or regulation applicable to the Purchasers.
3.4 Government Consents, etc. No consent, approval or authorization of
or designation, declaration or filing with any governmental authority on the
part of the Purchasers is required in connection with the valid execution and
delivery of this Agreement, or the offer, sale or issuance of the Common Stock,
or the consummation of any other transaction contemplated hereby.
3.5 Investigation. Each Purchaser has had a reasonable opportunity to
discuss the Company's business, management and financial affairs with the
Company's management.
Page 26 of 48 Pages
<PAGE>
SECTION 4
Conditions to Obligations of the Purchasers
The obligations of each Purchaser to the Company under this Agreement
are subject to the fulfillment, on or before the Closing, of each of the
following conditions, unless otherwise waived:
4.1 Representations and Warranties Correct. The representations and
warranties made by the Company in Section 2 shall be true and correct in all
material respects on the Closing Date with the same effect as though such
representations and warranties had been made on and as of the Closing Date.
4.2 Covenants. All covenants, agreements and conditions contained in
this Agreement to be performed by the Company on or prior to the Closing Date
shall have been performed or complied with in all material respects.
4.3 No Order Pending. There shall not then be in effect any order
enjoining or restraining the transactions contemplated by this Agreement.
4.4 No Law Prohibiting or Restricting 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 (except as otherwise referenced in this
Agreement).
4.5 Compliance Certificate. The Company shall have delivered to the
Purchasers a certificate substantially in the form attached as Exhibit B hereto,
executed by a duly authorized officer, dated the Closing Date, and certifying to
the fulfillment of the conditions specified in Sections 4.1 and 4.2.
4.6 Registration Rights Agreement. On or before the Closing, the
Company and the Purchasers shall have executed and delivered a counterpart of
the Registration Rights Agreement.
4.7 Opinion of Company Counsel. The Purchasers shall have received from
Venture Law Group, counsel for the Company, an opinion addressed to the
Purchasers, dated the Closing Date, in substantially the form attached as
Exhibit C hereto.
SECTION 5
Conditions to Obligations of the Company
The obligations of the Company under this Agreement are subject to the
fulfillment on or prior to the Closing of each of the following conditions,
unless otherwise waived:
5.1 Representations and Warranties Correct. The representations and
warranties made by the Purchasers in Section 3 hereof shall be true and correct
in all material respects on
Page 27 of 48 Pages
<PAGE>
and as of the Closing Date with the same effect as though such representations
and warranties had been made on and as of the Closing Date.
5.2 Performance. All covenants, agreements and conditions contained in
this Agreement to be performed by the Purchasers on or prior to the Closing Date
shall have been performed or complied with in all material respects.
5.3 No Order Pending. There shall not then be in effect any order
enjoining or restraining the transactions contemplated by this Agreement.
5.4 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 (except as otherwise provided in this
Agreement).
SECTION 6
Miscellaneous
6.1 Governing Law. This Agreement and all acts and transactions
pursuant hereto and the rights and obligations of the parties hereto shall be
governed, construed and interpreted in accordance with the laws of the State of
California, without giving effect to principles of conflicts of law.
6.2 Survival. Unless otherwise set forth in this Agreement, the
warranties, representations and covenants of the Company and the Purchasers
contained in or made pursuant to this Agreement shall survive the execution and
delivery of this Agreement and the Closing.
6.3 Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective successors
and assigns.
6.4 Entire Agreement; Amendment. This Agreement, the Registration
Rights Agreement and the other documents delivered pursuant hereto constitute
the full and entire understanding and agreement between the parties with regard
to the subject matter hereof and thereof and supersede all prior agreements and
understandings among the parties relating to the subject matter hereof. Neither
this Agreement nor any term hereof may be amended, waived, discharged or
terminated other than by a written instrument signed by the party against which
enforcement of any such amendment, waiver, discharge or termination is sought.
6.5 Notices and Dates. Unless otherwise provided herein, any notice
required or permitted by this Agreement shall be in writing and shall be deemed
sufficient upon delivery, when delivered personally or by overnight courier and
addressed to the party to be notified at such party's address as set forth on
the signature page hereto or as subsequently modified by written notice. In the
event that any date provided for in this Agreement falls on a Saturday, Sunday
or legal holiday, such date shall be deemed extended to the next business day.
Page 28 of 48 Pages
<PAGE>
6.6 Brokers.
(a) The Company has not engaged, consented to or authorized
any broker, finder or intermediary to act on its behalf, directly or indirectly,
as a broker, finder or intermediary in connection with the transactions
contemplated by this Agreement. The Company agrees to indemnify and hold
harmless the Purchasers from and against all fees, commissions or other payments
owing to any party acting on behalf of the Company hereunder.
(b) No Purchaser has engaged, consented to or authorized any
broker, finder or intermediary to act on its behalf, directly or indirectly, as
a broker, finder or intermediary in connection with the transactions
contemplated by this Agreement. Each Purchaser hereby agrees to indemnify and
hold harmless the Company from and against all fees, commissions or other
payments owing to any party acting on behalf of such Purchaser hereunder.
6.7 Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid, void
or unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated.
6.8 Costs and Expenses. Irrespective of whether the Closing is
effected, the Company shall pay all costs and expenses that it incurs with
respect to the negotiation, execution, delivery and performance of this
Agreement. If the Closing is effected, the Company shall, at the Closing,
reimburse the reasonable fees of Pillsbury Madison & Sutro LLP, counsel for the
Purchasers, and upon receipt of a bill therefor, shall reimburse the
out-of-pocket expenses of such counsel, provided that such fees and expenses
shall not exceed $7,500.
6.9 No Third Party Rights. Nothing in this Agreement shall create or be
deemed to create any rights in any person or entity not a party to this
Agreement.
6.10 Captions and Headings. The captions and headings used herein are
for convenience and ease of reference only and are not intended to be a part of
or to affect the meaning or interpretation of this Agreement.
6.11 Counterparts. This Agreement may be executed in counterparts, and
each such counterpart shall be deemed an original for all purposes.
Page 29 of 48 Pages
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective authorized officers as of the date aforesaid.
CONNETICS CORPORATION
By: /s/ Thomas G. Wiggans
-------------------------------------
Thomas G. Wiggans, President
Address:
3400 West Bayshore Road
Palo Alto, CA 94303
Facsimile: (650) 843-2899
INVESTORS:
ALTA BIOPHARMA PARTNERS, L.P.
BY: ALTA BIOPHARMA MANAGEMENT, LLC
BY: /s/ Jean Deleage
-------------------------------------
MANAGING DIRECTOR
ALTA EMBARCADERO BIOPHARMA, LLC
BY: /s/ Jean Deleage
-------------------------------------
MEMBER
CONNETICS PARTNERS (ALTA BIO), LLC
BY: ALTA/CHASE BIOPHARMA MANAGEMENT, LLC
BY: /s/ Jean Deleage
-------------------------------------
MEMBER
Address:
Alta Partners
One Embarcadero Center, Suite 4050
San Francisco, CA 94111
Facsimile: (415) 362-6178
Page 30 of 48 Pages
<PAGE>
EXHIBIT A
REGISTRATION RIGHTS AGREEMENT
Page 31 of 48 Pages
<PAGE>
EXHIBIT B
CONNETICS CORPORATION
COMPLIANCE CERTIFICATE
The undersigned, Thomas G. Wiggans, hereby certifies as follows:
1. The undersigned is the duly elected President and Chief Executive
Officer of Connetics Corporation, a Delaware corporation (the "Company").
2. The representations and warranties of the Company set forth in
Section 2 of the Common Stock Purchase Agreement (the "Agreement") dated April
10, 1998 are true and correct in all material respects as though made on and as
of the date hereof.
3. The Company has performed and complied with all covenants,
agreements, obligations and conditions contained in the Agreement to be
performed by the Company on or prior to the Closing Date.
The undersigned has executed this Certificate this 10th day of April,
1998.
---------------------------------------
Thomas G. Wiggans, President and Chief
Executive Officer
Page 32 of 48 Pages
<PAGE>
Exhibit C
CONNETICS CORPORATION
REGISTRATION RIGHTS AGREEMENT
April 10, 1998
Page 33 of 48 Pages
<PAGE>
CONNETICS CORPORATION
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is made as of the
tenth day of April, 1998, by and among Connetics Corporation, a Delaware
corporation (the "Company") and Alta BioPharma Partners, L.P., Connetics
Partners (Alta Bio), LLC and Alta Embarcadero BioPharma, LLC each of which is
herein referred to as an "Investor."
RECITALS
WHEREAS, the Company and the Investors have entered into a Common Stock
Purchase Agreement (the "Purchase Agreement") of even date herewith pursuant to
which the Company has agreed to sell to the Investors and the Investors have
agreed to purchase from the Company shares of the Company's Common Stock (all
terms not otherwise defined herein shall have the meanings ascribed in the
Purchase Agreement); and
WHEREAS, a condition to the Investors' obligations under the Purchase
Agreement is that the Company and the Investors enter into this Agreement in
order to provide the Investors with certain rights to register the Common Stock
acquired by the Investors pursuant to the Purchase Agreement. The Company
desires to induce the Investors to purchase the Common Stock pursuant to the
Purchase Agreement by agreeing to the terms and conditions set forth herein;
NOW, THEREFORE, the parties hereby agree as follows:
1. Registration Rights. The Company and the Investors
covenant and agree as follows:
1.1 Definitions. For purposes of this Section 1:
(a) The terms "register," "registered,"
and "registration" refer to a registration effected by preparing and filing a
registration statement or similar document in compliance with the Securities Act
of 1933, as amended (the "Act"), and the declaration or ordering of
effectiveness of such registration statement or document;
(b) The term "Registrable Securities"
means (i) the shares of Common Stock issued or sold in connection with the
Purchase Agreement (such shares of Common Stock are collectively referred to
hereinafter as the "Shares" or "Stock") and (ii) any other shares of common
stock of the Company issued as (or issuable upon the conversion or exercise of
any warrant, right or other security which is issued as) a dividend or other
distribution with respect to, or in exchange for or in replacement of, the Stock
provided, that the foregoing definition shall exclude in all cases any
Registrable Securities sold by a person in a transaction in which his or her
rights under this Agreement are not assigned. Notwithstanding the foregoing,
shares of common stock shall only be treated as Registrable Securities if and so
long as they have not been (A) sold to or through a broker or dealer or
underwriter in a public distribution or a public securities transaction, or (B)
sold in a transaction exempt from the registration and prospectus delivery
requirements of the Act under Section 4(1) thereof so that all
Page 34 of 48 Pages
<PAGE>
transfer restrictions, and restrictive legends with respect thereto, if any, are
removed upon the consummation of such sale;
(c) The number of shares of "Registrable
Securities then outstanding" shall be determined by the number of shares of
Common Stock then outstanding which are Registrable Securities, plus the number
of shares of common stock issuable pursuant to then exercisable or convertible
securities which are Registrable Securities;
(d) The term "Holder" means any person
owning or having the right to acquire Registrable Securities or any assignee
thereof in accordance with this Agreement;
(e) The term "Form S-3" means such form
under the Act as in effect on the date hereof or any successor form under the
Act; and
(f) The term "SEC" means the Securities
and Exchange Commission.
1.2 Registration. The Company will use its
reasonable best efforts to effect a registration to permit the sale of the
Registrable Securities as described below, and pursuant thereto the Company
will:
(a) prepare and file and use its
reasonable best efforts to have declared effective by the SEC within 90 days
after the Closing, a registration statement on Form S-3 relating to resale of
all of the shares of the Registrable Securities and use its reasonable best
efforts to cause such registration statement to remain continuously effective
for a period which will terminate when all Registrable Securities covered by
such registration statement, as amended from time to time, have been sold or
when the Registrable Securities may be sold under Rule 144(k) under the
Securities Act.
(b) prepare and file with the SEC such
amendments and post-effective amendments to the registration statement and any
prospectus as may be necessary to keep such registration statement effective for
the period specified in Section 1.2(a) and to comply with the provisions of the
Securities Act and the Exchange Act with respect to the distribution of all
Registrable Securities.
(c) notify each Investor promptly and
confirm such notice in writing (i) when the prospectus or any supplement or
post-effective amendment has been filed and, with respect to the registration
statement or any post-effective amendment, when the same has become effective,
(ii) of any request by the SEC for amendments or supplements to the registration
statement or prospectus or for additional information, (iii) of the issuance by
the SEC of any stop order suspending the effectiveness of the registration
statement or the initiation of any proceedings for that purpose, and (iv) of the
receipt by the Company of any notification with respect to the suspension of the
qualification of the Registrable Securities for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose.
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(d) make every reasonable effort to obtain the withdrawal of any order
suspending the effectiveness of the registration statement at the earliest
possible moment.
(e) furnish to each Investor, without
charge, at least one copy of the registration statement and any post-effective
amendment thereto, including financial statements and schedules, and upon an
Investor's request, all documents incorporated therein by reference and all
exhibits thereto (including those incorporated by reference).
(f) deliver to each Investor, without
charge, as many copies of the prospectus (including each preliminary prospectus)
and any amendment or supplement thereto as such Investor may reasonably request
in order to facilitate the disposition of the Registrable Securities.
(g) cause all Registrable Securities
covered by the registration statement to be listed on each securities exchange
or market on which similar securities issued by the Company are then listed, and
if the securities are not so listed to use its reasonable best efforts promptly
to cause all such securities to be listed on either the New York Stock Exchange,
the American Stock Exchange or the Nasdaq Stock Market.
(h) use reasonable best efforts to
qualify or register the Registrable Securities for sale under (or obtain
exemptions from the application of) the Blue Sky laws of such jurisdictions as
are applicable. The Company shall not be required to qualify as a foreign
corporation or to file a general consent to service of process in any such
jurisdiction where it is not presently qualified or where it would be subject to
general service of process or taxation as a foreign corporation in any
jurisdiction where it is not now so subject.
(i) otherwise use its reasonable best
efforts to comply with all applicable rules and regulations of the SEC under the
Securities Act and the Exchange Act and take such other actions as may be
reasonably necessary to facilitate the registration of the Registrable
Securities hereunder.
(j) expenses incurred in connection with
a registration requested pursuant to this Section 1.2 shall be borne by the
Company, including all registration, filing, qualification, printers' and
accounting fees but excluding any underwriters' discounts or commissions and any
fees and disbursements of any counsel for the selling Holders (such fees or
discounts, if any, to be borne pro rata by the Holders participating in the
registration).
1.3 Restrictions on and Procedure for Sales
Pursuant to a Registration Statement.
(a) Each Holder agrees to the following:
(i) Notice to Company. If any
Holder shall propose to sell any Shares, the Holder shall notify the Company of
its intent to do so at least three (3) business days prior to the date of such
sale (the "Notice of Sale"), and the provision of the Notice of Sale to the
Company shall conclusively be deemed to establish an agreement by such Holder to
comply with the registration provisions herein described. The Notice of Sale
shall be deemed
Page 36 of 48 Pages
<PAGE>
to constitute a representation that any information previously supplied by such
Holder is accurate as of the date of such Notice of Sale.
(ii) Notice of Sale. The Notice
of Sale in substantially the form attached as Attachment A shall be given in
accordance with the provisions of Section 2.5 hereof. However, the Holder may
give the Notice of Sale orally by telephoning John L. Higgins or the then
current Chief Financial Officer at the Company at (650) 843-2800. An oral Notice
of Sale shall be deemed to have been received only at such time as the Selling
Holder speaks directly with John L. Higgins (or such then current Chief
Financial Officer). In addition, an oral Notice of Sale shall only be deemed
effective if it is followed by a written Notice of Sale received by the Company
by personal delivery or facsimile within twenty-four (24) hours after giving the
oral Notice of Sale.
(iii) Delay of Sale. The Company
may refuse to permit the Holder to resell any Shares for a specified period of
time; provided, however, that (a) in order to exercise this right, the Company
must deliver a certificate in writing to the Holder to the effect that the
registration statement in its then current form contains an untrue statement of
material fact or omits to state a material fact necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading, and (b) in no event shall such delay exceed twenty-five
(25) days, and (c) in no event shall this right of delay be exercised on more
than two (2) occasions in any twelve (12) month period. During any suspension as
contemplated by this Section 1.4 (a)(iii), the Company will not allow any of its
officers or directors to buy or sell shares of the Company's securities.
(b) Representations of Holders. Each
Holder hereby represents to and covenants with the Company that, during the
period in which a registration statement effected pursuant to Section 1.2
remains effective, such Holder will:
(i) not engage in any
stabilization activity in connection with any of the Company's securities;
(ii) cause to be furnished to
any purchaser of the Shares and to the broker-dealer, if any, through whom
Shares may be offered, a copy of the Prospectus; and
(iii) not bid for or purchase
any securities of the Company or any rights to acquire the Company's securities,
or attempt to induce any person to purchase any of the Company's securities or
any rights to acquire the Company's securities other than as permitted under the
Securities Exchange Act of 1934, as amended ("Exchange Act").
(c) Information for Use in Registration
Statement. Each Holder represents and warrants to the Company that such Holder
has completed the information requested by the Selling Holder's Questionnaire
attached as Attachment B hereto (the "Questionnaire"), and further represents
and warrants to the Company that all information provided by such Holder in the
Questionnaire is true, accurate and complete. Each Holder understands that the
written information in the Questionnaire and all written representations
Page 37 of 48 Pages
<PAGE>
made in this Agreement are being provided to the Company specifically for use
in, or in connection with, the registration statement and the Prospectus, and
has executed this Agreement with such knowledge.
1.4 Furnish Information. It shall be a condition
precedent to the obligations of the Company to take any action pursuant to this
Section 1 with respect to the Registrable Securities of any selling Holder that
such Holder shall furnish to the Company such information regarding itself, the
Registrable Securities held by it, and the intended method of disposition of
such securities as shall be required to effect the registration of such Holder's
Registrable Securities.
1.5 Delay of Registration. No Holder shall have
any right to obtain or seek an injunction restraining or otherwise delaying any
such registration as the result of any dispute that might arise with respect to
the interpretation or implementation of this Section 1.
1.6 Indemnification. In the event any
Registrable Securities are included in a registration statement under this
Section 1:
(a) To the extent permitted by law, the
Company will indemnify and hold harmless each Holder, any underwriter (as
defined in the Act) for such Holder and each person, if any, who controls such
Holder or underwriter within the meaning of the Act or the Exchange Act, against
any losses, claims, damages, or liabilities (joint or several) to which they may
become subject under the Act, the Exchange Act or other federal or state law,
insofar as such losses, claims, damages, or liabilities (or actions in respect
thereof) arise out of or are based upon any of the following statements,
omissions or violations (collectively a "Violation"): (i) any untrue statement
or alleged untrue statement of a material fact contained in such registration
statement, including any preliminary prospectus or final prospectus contained
therein or any amendments or supplements thereto, (ii) the 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 (iii) any violation
or alleged violation by the Company of the Act, the Exchange Act, any state
securities law or any rule or regulation promulgated under the Act, the Exchange
Act or any state securities law; and the Company will pay to each such Holder,
underwriter or controlling person, as incurred, any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability, or action; provided, however, that the
indemnity agreement contained in this subsection 1.6(a) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability, or action
if such settlement is effected without the consent of the Company (which consent
shall not be unreasonably withheld), nor shall the Company be liable in any such
case for any such loss, claim, damage, liability, or action to the extent that
it arises out of or is based upon a Violation which occurs in reliance upon and
in conformity with written information furnished expressly for use in connection
with such registration by any such Holder, underwriter or controlling person.
(b) To the extent permitted by law, each
selling Holder will indemnify and hold harmless the Company, each of its
directors, each of its officers who has signed the registration statement, each
person, if any, who controls the Company within the meaning of the Act, any
underwriter, any other Holder selling securities in such registration statement
and any controlling person of any such underwriter or other Holder, against any
Page 38 of 48 Pages
<PAGE>
losses, claims, damages, or liabilities (joint or several) to which any of the
foregoing persons may become subject, under the Act, the Exchange Act or other
federal or state law, insofar as such losses, claims, damages, or liabilities
(or actions in respect thereto) arise out of or are based upon any Violation, in
each case to the extent (and only to the extent) that such Violation occurs in
reliance upon and in conformity with written information furnished by such
Holder expressly for use in connection with such registration; and each such
Holder will pay, as incurred, any legal or other expenses reasonably incurred by
any person intended to be indemnified pursuant to this subsection 1.6(b), in
connection with investigating or defending any such loss, claim, damage,
liability, or action; provided, however, that the indemnity agreement contained
in this subsection 1.6(b) shall not apply to amounts paid in settlement of any
such loss, claim, damage, liability or action if such settlement is effected
without the consent of the Holder, which consent shall not be unreasonably
withheld; provided, that, in no event shall any indemnity under this subsection
1.6(b) exceed the net proceeds from the offering received by such Holder, except
in the case of willful fraud by such Holder.
(c) Promptly after receipt by an
indemnified party under this Section 1.6 of notice of the commencement of any
action (including any governmental action), such indemnified party will, if a
claim in respect thereof is to be made against any indemnifying party under this
Section 1.6, deliver to the indemnifying party a written notice of the
commencement thereof and the indemnifying party shall have the right to
participate in, and, to the extent the indemnifying party so desires, jointly
with any other indemnifying party similarly noticed, to assume the defense
thereof with counsel mutually satisfactory to the parties; provided, however,
that an indemnified party (together with all other indemnified parties which may
be represented without conflict by one counsel) shall have the right to retain
one separate counsel, with the reasonable fees and expenses to be paid by the
indemnifying party, if representation of such indemnified party by the counsel
retained by the indemnifying party would be inappropriate due to actual or
potential differing interests between such indemnified party and any other party
represented by such counsel in such proceeding. The failure to deliver written
notice to the indemnifying party within a reasonable time of the commencement of
any such action, if prejudicial to its ability to defend such action, shall
relieve such indemnifying party of any liability to the indemnified party under
this Section 1.6, but the omission so to deliver written notice to the
indemnifying party will not relieve it of any liability that it may have to any
indemnified party otherwise than under this Section 1.6.
(d) If the indemnification provided for
in this Section 1.6 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 therein, 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 that resulted
in such loss, liability, claim, damage, or expense as well as any other relevant
equitable considerations; provided, that, in no event shall any contribution by
a Holder under this Subsection 1.6(d) exceed the net proceeds from the offering
received by such Holder, except in the case of willful fraud by such Holder. 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 to state a material fact
Page 39 of 48 Pages
<PAGE>
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.
(e) The obligations of the Company and
Holders under this Section 1.6 shall survive the completion of any offering of
Registrable Securities in a registration statement under this Section 1.
1.7 Reports Under Securities Exchange Act of
1934. With a view to making available to the Holders the benefits of Rule 144
and any other rule or regulation of the SEC that may at any time permit a Holder
to sell securities of the Company to the public without registration or pursuant
to a registration on Form S-3, the Company agrees to:
(a) make and keep public information
available, as those terms are understood and defined in Rule 144, so long as the
Company remains subject to the periodic reporting requirements under Sections 13
or 15(d) of the Exchange Act;
(b) take such action, including the
voluntary registration of its Common Stock under Section 12 of the Exchange Act,
as is necessary to enable the Holders to utilize Form S-3 for the sale of their
Registrable Securities;
(c) file with the SEC in a timely manner
all reports and other documents required of the Company under the Act and the
Exchange Act; and
(d) furnish to any Holder, so long as
the Holder owns any Registrable Securities, forthwith upon request (i) a written
statement by the Company that it has complied with the reporting requirements of
the Exchange Act and the rules and regulations promulgated thereunder, or that
it qualifies as a registrant whose securities may be resold pursuant to Form
S-3, (ii) a copy of the most recent annual or quarterly report of the Company
and such other reports and documents so filed by the Company, and (iii) such
other information as may be reasonably requested in availing any Holder of any
rule or regulation of the SEC which permits the selling of any such securities
without registration or pursuant to such form.
1.8 Assignment of Registration Rights. The rights to cause the
Company to register Registrable Securities pursuant to this Section 1 may be
assigned (but only with all related obligations) by a Holder to a transferee or
assignee of at least 500,000 shares of such securities (as adjusted for stock
splits, stock dividends and the like) or, if less, all of such Holder's
Registrable Securities, provided in either case that the Company is, within a
reasonable time after such transfer, furnished with written notice of the name
and address of such transferee or assignee and the securities with respect to
which such registration rights are being assigned; and provided, further, that
such assignment shall be effective only if immediately following such transfer
the further disposition of such securities by the transferee or assignee is
restricted under the Act. For the purposes of determining the number of shares
of Registrable Securities held by a transferee or assignee, the holdings of
transferees and assignees of a partnership who are partners or retired partners
of such partnership (including spouses and ancestors, lineal descendants and
siblings of such partners or spouses who acquire Registrable Securities by gift,
will or intestate succession) shall be aggregated together and with the
partnership; provided that
Page 40 of 48 Pages
<PAGE>
all assignees and transferees who would not qualify individually for assignment
of registration rights shall have a single attorney-in-fact for the purpose of
exercising any rights, receiving notices or taking any action under Section 1.
1.9 No Other Registration Rights. This Agreement shall not be
construed to grant the Investors "piggy-back" registration rights or any other
right to have their securities registered under the Act, except as expressly set
forth in Section 1.2 hereof.
2. Miscellaneous.
2.1 Successors and Assigns. Except as otherwise
provided herein, the terms and conditions of this Agreement shall inure to the
benefit of and be binding upon the respective successors and assigns of the
parties (including transferees of any of the Shares). Nothing in this Agreement,
express or implied, is intended to confer upon any party other than the parties
hereto or their respective successors and assigns any rights, remedies,
obligations, or liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement.
2.2 Governing Law. This Agreement and all acts
and transactions pursuant hereto shall be governed, construed and interpreted in
accordance with the laws of the State of California, without giving effect to
principles of conflicts of laws.
2.3 Counterparts. This Agreement may be executed
in two (2) or more counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.
2.4 Titles and Subtitles. The titles and
subtitles used in this Agreement are used for convenience only and are not to be
considered in construing or interpreting this Agreement.
2.5 Notices. Unless otherwise provided herein,
any notice required or permitted by this Agreement shall be in writing and shall
be deemed sufficient upon delivery, when delivered personally or by overnight
courier and addressed to the party to be notified at such party's address as set
forth on the signature page hereto or as subsequently modified by written
notice. In the event that any date provided for in this Agreement falls on a
Saturday, Sunday or legal holiday, such date shall be deemed extended to the
next business day. Notwithstanding the foregoing, any notice delivered pursuant
to Section 1.3(e) or Section 1.4 hereto must be made by personal delivery or
confirmed facsimile transmission.
2.6 Expenses. If any action at law or in equity
is necessary to enforce or interpret the terms of this Agreement, the prevailing
party shall be entitled to reasonable attorneys' fees, costs and necessary
disbursements in addition to any other relief to which such party may be
entitled.
2.7 Amendments and Waivers. Any term of this
Agreement may be amended and the observance of any term of this Agreement may be
waived (either generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the holders of
a majority of the Registrable Securities then outstanding. Any amendment or
waiver effected in accordance with this paragraph shall be binding upon each
Page 41 of 48 Pages
<PAGE>
holder of any Registrable Securities then outstanding, each future holder of all
such Registrable Securities, and the Company.
2.8 Severability. If one or more provisions of
this Agreement are held to be unenforceable under applicable law, the parties
agree to renegotiate such provision in good faith. In the event that the parties
cannot reach a mutually agreeable and enforceable replacement for such
provision, then (x) such provision shall be excluded from this Agreement, (y)
the balance of the Agreement shall be interpreted as if such provision were so
excluded and (z) the balance of the Agreement shall be enforceable in accordance
with its terms.
2.9 Entire Agreement. This Agreement, and the
documents referred to herein (with the exception of the registration statement)
constitute the entire agreement between the parties hereto pertaining to the
subject matter hereof, and any and all other written or oral agreements existing
between the parties hereto are expressly canceled.
Page 42 of 48 Pages
<PAGE>
The parties have executed this Registration Rights Agreement as of the
date first above written.
COMPANY:
CONNETICS CORPORATION
By: /s/ Thomas G. Wiggans
------------------------------------
Thomas G. Wiggans, President
Address:
3400 West Bayshore Road
Palo Alto, CA 94303
Facsimile: (650) 843-2899
INVESTORS:
ALTA BIOPHARMA PARTNERS, L.P.
BY: ALTA BIOPHARMA MANAGEMENT, LLC
BY: /s/ Jean Deleage
------------------------------------
MANAGING DIRECTOR
ALTA EMBARCADERO BIOPHARMA, LLC
BY: /s/ Jean Deleage
------------------------------------
MEMBER
CONNETICS PARTNERS (ALTA BIO), LLC
BY: ALTA/CHASE BIOPHARMA MANAGEMENT, LLC
BY: /s/ Jean Deleage
------------------------------------
MEMBER
Address:
Alta Partners
One Embarcadero Center, Suite 4050
San Francisco, CA 94111
Facsimile: (415) 362-6178
Page 43 of 48 Pages
<PAGE>
Attachment A
CONNETICS CORPORATION
NOTICE OF SALE
Pursuant to the Registration Rights Agreement dated as of April 10,
1998 among Connetics Corporation (the "Company"), the undersigned and certain
stockholders of the Company, the undersigned hereby gives notice to the Company
of the undersigned's intent to sell _______ shares of the Company's Common Stock
registered pursuant to the registration statement (File No._______) filed
pursuant to such Agreement.
Dated:___________________ By:_________________________________
(signature)
Name:_______________________________
(print)
Title:______________________________
(if applicable)
[Note: This Notice of Sale must be completed and delivered (via personal
delivery or facsimile) to the Chief Financial Officer of the Company on or three
(3) business day before the date of sale of the shares of the Company's Common
Stock registered pursuant to the Registration Statement.]
Page 44 of 48 Pages
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Attachment B
CONNETICS CORPORATION
SELLING STOCKHOLDER'S QUESTIONNAIRE
In connection with the Connetics Corporation (the "Company")
Registration Statement (File No.______ ) registering certain shares of the
Company's Common Stock, the undersigned represents and warrants that the
information set forth below is true, accurate and complete:
1. As of the date hereof, the undersigned beneficially owns ______
shares of the Company's Common Stock.
2. Except as described below, the undersigned has not had a material
relationship with the Company or any of its predecessors or affiliates within
the last three years.
The term "material relationship" has not been defined by the Securities
and Exchange Commission (the "SEC"). However, the SEC has indicated that it will
probably construe as a "material relationship" any relationship which tends to
prevent arms length bargaining in dealings with a company, whether arising from
a close business connection or family relationship, a relationship of control or
otherwise. It seems prudent, therefore, to consider that the undersigned would
have such a relationship, for example, with any organization of which the
undersigned is an officer, director, trustee or partner or in which the
undersigned owns, directly or indirectly, ten percent (10%) or more of the
outstanding voting stock, or in which the undersigned has some other substantial
interest, and with any person or organization with whom the undersigned has, or
with whom any relative or spouse (or any other person or organization as to
which the undersigned has any of the foregoing other relationships) has, a
contractual relationship.
If applicable, please describe the material relationship with the
Company:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Dated:___________________ By:____________________________________
(signature)
Name:__________________________________
(print)
Title:_________________________________
(if applicable)
Page 45 of 48 Pages
<PAGE>
Exhibit D
ALTA BIOPHARMA PARTNERS LIMITED PARTNERSHIP
MANAGEMENT RIGHTS, INVESTMENTS IN CERTAIN COUNTRIES,
INDEMNIFICATION AND SUPERFUND REQUIREMENTS
MANAGEMENT RIGHTS
The Investor, Alta BioPharma Partners, L.P., requires the following
contractual management rights, in addition to rights to nonpublic financial
information, inspection rights, and other rights specifically provided to all
investors:
1. Investor shall be entitled to reasonably consult with and advise
management of the Company on significant business issues, including
management's proposed annual operating plans, and management will meet
with Investor regularly during each year at the Company's facilities at
mutually agreeable times for such consultation and advice and to review
progress in achieving said plans.
2. Investor may examine the books and records of the Company and inspect
its facilities and may request information at reasonable times and
intervals concerning the general status of the Company's financial
condition and operations, provided that access to highly confidential
proprietary information and facilities need not be provided.
3. If Investor is not represented on the Company's Board of Directors, the
Company shall invite a representative of the Investor to attend all
meetings of its Board of Directors in a nonvoting observer capacity,
and in this respect shall give such representative copies of all
notices, minutes, consents and other material that it provides to its
directors; provided, however, that the Company reserves the right to
exclude such representative from access to any material or meeting or
portion thereof if the Company believes upon advice of counsel that
such exclusion is reasonably necessary to preserve the attorney-client
privilege, to protect highly confidential proprietary information or
for other similar reasons. Such representative may participate in
discussions of matters brought to the Board.
Investor agrees, and any representative of the Investor will agree, to
hold in confidence and trust and not use or disclose any confidential
information provided to or learned by it in connection with its rights.
The rights described herein are nonassignable and shall terminate and
be of no further force or effect when the Investor no longer holds at least
800,000 shares of the Company's Common Stock (as adjusted for stock splits,
stock dividends, recapitalizations and the like), provided that if, prior to a
transaction which would cause the expiration of such rights pursuant to the
foregoing clause, the Investor delivers to the Company an opinion of counsel to
the Investor that the expiration of such rights will cause the Investor to cease
to qualify as a Venture Capital Operating Company (as such term is defined at 29
C.F.R. Section 2510.3-101 or its successor regulation), such rights will
continue for as long as necessary to enable the Investor to comply with such
regulation. The confidentiality provision hereof will survive the termination of
this Agreement.
The Investor, Alta BioPharma Partners, L.P., requires that the Company
be in compliance with the terms of the Investments Relating To Certain
Countries, the indemnification of Alta BioPharma Partners, L.P. and the
Indemnified Parties, and the SuperFund requirements of CERCLA (Comprehensive
Environmental Response Compensation and Liability Act).
Page 46 of 48 Pages
<PAGE>
INVESTMENTS RELATING TO CERTAIN FOREIGN COUNTRIES
The Company has not participated and is not participating in, an
anti-Israeli boycott within the scope of Chapter 7 of Part 2 of division 4 of
Title 2 of the California Government Code as in effect from time to time.
INDEMNIFICATION
The Company will use its reasonable efforts to limit the liability, to
the fullest extent permissible under the governing law of such company's state
of incorporation, of any director representing Alta BioPharma Partners, L.P. and
each of his or her affiliated parties.
CERCLA
SUPERFUND REQUIREMENTS
1. The Company, to the best of its knowledge, has not caused or allowed,
nor has the Company contracted with any party for, the generation, use,
transportation, treatment, storage or disposal of any Hazardous
Substances (as defined below) in connection with the operations of its
business or otherwise.
2. The Company, to the best of its knowledge, the operations of its
business, and any real property that the Company owns, leases, or
otherwise occupies or uses (the "Premises") are in compliance with all
applicable Environmental Laws (as defined below) and orders or
directives of any governmental authorities having jurisdiction under
such Environmental Laws including, without limitation, any
Environmental Laws or orders or directives with respect to any cleanup
or remediation of any release or threat of release of Hazardous
Substances.
3. The Company, to the best of its knowledge, has not received any
citation, directive, letter or other communication, written or oral, or
any notice of any proceedings, claims or lawsuits, from any person,
entity or governmental authority arising out of the ownership or
occupation of the Premises, or the conduct of its operations, nor is it
aware of any basis thereof.
4. The Company, to the best of its knowledge, has obtained and is
maintaining in full force and effect all necessary permits, licenses
and approvals required by any Environmental Laws applicable to the
Premises and the business operations conducted thereon (including
operations conducted by tenants on the Premises) and is in compliance
with all such permits, licenses and approvals.
5. The Company, to the best of its knowledge, has not caused, or allowed a
release, or a threat of release, of any Hazardous Substance unto, nor
to the best of the Company's knowledge has the Premises or any property
at or near the Premises ever been subject to a release, or a threat of
a release, of any Hazardous Substance.
The term, "Environmental Laws" shall mean any federal, state or local
law, ordinance or regulation pertaining to the protection of human health or the
environment including, without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C. Sections 9601, et seq.,
Emergency Planning and Community Right-to-Know Act, 42 U.S.C Sections 11001, et
seq., and the Resource Conservation and Recovery Act, 42 U.S.C. Sections 6901,
et seq.
Page 47 of 48 Pages
<PAGE>
The term, "Hazardous Substance" includes oil and petroleum products,
asbestos, polychlorinated biphenyls and urea formaldehyde, and any other
materials classified as hazardous or toxic under any Environmental Laws.
I ACKNOWLEDGE AND AGREE TO THE TERMS OF THIS DOCUMENT IN REGARDS TO THE
ALTA BIOPHARMA PARTNERS L.P. MANAGEMENT RIGHTS, INVESTMENTS RELATING TO CERTAIN
FOREIGN COUNTRIES, INDEMNIFICATION AND THE CERCLA REQUIREMENTS.
CONNETICS, INC.
Date: April 10, 1998 By: /s/ Thomas G. Wiggans
-----------------------
Title:
---------------------
ACCEPTED AND AGREED:
ALTA BIOPHARMA PARTNERS, L.P.
BY: ALTA BIOPHARMA MANAGEMENT, LLC
BY: /s/ Jean Deleage
----------------------
MANAGING DIRECTOR
Page 48 of 48 Pages
