exv4w1



 




Exhibit 4.1




ARADIGM CORPORATION




SECURITIES PURCHASE AGREEMENT




     THIS SECURITIES PURCHASE AGREEMENT (this “Agreement”) is made as of
November 14, 2003, by and between ARADIGM CORPORATION, a California corporation
(the “Company”) with its principal office at 3929 Point Eden Way, Hayward,
California 94545, and 3I BIOSCIENCE INVESTMENT TRUST PLC. (the “Purchaser”).
Capitalized terms not defined in this Agreement are defined in that certain
Securities Purchase Agreement dated as of November 7, 2003, by and among the
Company and the purchasers listed on Exhibit A thereto (the “Initial
Agreement”) pursuant to which the Company issued and sold to the purchasers an
aggregate of 7,502,773 shares of the Company’s common stock (the “Common
Stock”) and warrants to purchase 1,875,689 shares of Common Stock on November
10, 2003 (the “Initial Closing”).




RECITALS




     WHEREAS, the Company and the Purchaser are executing and delivering this
Agreement in reliance upon the exemption from securities registration afforded
by the provisions of Regulation D, as promulgated by the SEC under the
Securities Act; and




     WHEREAS, at the Closing (as defined herein), the Company desires to sell,
and the Purchaser desires to purchase, 277,777 shares of Common Stock (the
"Shares”) and warrants to purchase 69,444 shares of Common Stock at an exercise
price of $2.50 per share (the “Warrants”) at an aggregate purchase price of
$499,998.60, upon the terms and conditions stated in this Agreement.




     NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
promises, representations, warranties and covenants hereinafter set forth and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:



1. Closing Date. The closing of the purchase and sale of the Shares and
Warrants hereunder (the “Closing”) shall be held at the offices of Cooley
Godward LLP (“Cooley Godward”), One Maritime Plaza, 20th Floor, San Francisco,
California 94111, at 10:00 a.m. California time on Monday, November 17, 2003 or
at such other time and place upon which the Company and the Purchaser shall
agree. The date of the Closing is hereinafter referred to as the “Closing
Date”.



2. Sale of Common Shares and Warrants. At the Closing, subject to the terms
and conditions of this Agreement, the Company agrees to issue and sell to the
Purchaser and the Purchaser agrees to purchase from the Company the Shares and
the Warrants.



3. Delivery. As promptly as practicable following the Closing Date, but in any
event no later than five (5) business days following the Closing Date, the
Company will deliver to the Purchaser a duly executed Warrant and a certificate
representing
the Shares, registered in the Purchaser’s name. Such delivery shall be against
payment of the purchase price therefor by wire





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transfer of immediately
available funds to the Company at the Closing in accordance with the Company’s
written wiring instructions.



4. Representations, Warranties, Covenants, Obligations, Agreements and
Acknowledgements of Purchaser. Purchaser hereby represents, warrants and
agrees to and for the benefit of the Company all representations, warranties,
covenants, obligations agreements and acknowledgements of the Purchasers set
forth in the Initial Agreement, as the same may be amended pursuant to the
terms of the Initial Agreement.



5. Representations, Warranties, Covenants, Obligations, Agreements and
Acknowledgements of Company. Except as set forth in this Agreement and
excluding Section 9.12 of the Initial Agreement, the Purchaser may rely on all
representations, warranties, covenants, obligations, agreements and
acknowledgements of the Company set forth in the Initial Agreement as if the
Purchaser had purchased the Shares and Warrants at the Initial Closing.



6. Governing Law. This Agreement shall be governed in all respects by and
construed in accordance with the laws of the State of California without any
regard to conflicts of laws principles.



7. Successors and Assigns. The provisions hereof shall inure to the benefit
of, and be binding upon, the successors, assigns, heirs, executors and
administrators of the parties to this Agreement. Upon a permitted transfer of
Purchaser’s Securities on the books of the Company in accordance with the terms
of Sections 8.3(a)(iii) or 8.3(b) of the Initial Agreement, the Purchaser may
assign this Agreement to the permitted transferee upon prior written notice to
the Company. Except as set forth in the previous sentence, Purchaser shall not
assign this Agreement without the prior written consent of the Company.



8. Entire Agreement. This Agreement constitutes the full and entire
understanding and agreement between the parties with regard to the subjects
thereof.



9. Notices, etc. All notices and other communications required or permitted
under this Agreement shall be in writing and may be delivered in person, by
telecopy, overnight delivery service or registered or certified United States
mail, addressed to the Company or the Purchaser, as the case may be, at their
respective addresses set forth at the beginning of this Agreement or on the
signature page to this Agreement, or at such other address as the Company or
the Purchaser shall have furnished to the other party in writing. All notices
and other communications shall be effective upon the earlier of actual receipt
thereof by the person to whom notice is directed or (a) in the case of notices
and communications sent by personal delivery or telecopy, one business day
after such notice or communication arrives at the applicable address or was
successfully sent to the applicable telecopy number, (b) in the case of notices
and communications sent by overnight delivery service, at noon (local time) on
the second business day following the day such notice or communication was
sent, and (c) in the case of notices and communications sent by United States
mail, seven days after such notice or communication shall have been deposited
in the United States mail.





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10. Severability of this Agreement. If any provision of this Agreement shall
be judicially determined to be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.



11. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.



12. Further Assurances. Each party to this Agreement shall do and perform or
cause to be done and performed all such further acts and things and shall
execute and deliver all such other agreements, certificates, instruments and
documents as the other party hereto may reasonably request in order to carry
out the intent and accomplish the purposes of this Agreement and the
consummation of the transactions contemplated hereby.



13. Currency. All references to “dollars” or “$” in this Agreement shall be
deemed to refer to United States dollars.



14. Waiver of Conflicts. Each party to this Agreement acknowledges that legal
counsel for the Company, Cooley Godward, has in the past and may continue in
the future to perform legal services for one or more of the Purchasers (as
defined in the Initial Agreement) and the Purchaser, or their affiliates in
matters unrelated to the transactions contemplated by this Agreement,
including, but not limited to, the representation of the Purchasers in matters
of a similar nature to the transactions contemplated herein. Each party to
this Agreement hereby (a) acknowledges that they have had an opportunity to ask
for and have obtained information relevant to such representation, including
disclosure of the reasonably foreseeable adverse consequences of such
representation; (b) acknowledges that with respect to the transactions
contemplated herein, Cooley Godward has represented the Company and not any
individual purchaser or any individual shareholder, director or employee of the
Company; and (c) gives its informed consent to Cooley Godward’s representation
of the Company in the transactions contemplated by this Agreement.




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     The foregoing agreement is hereby executed as of the date first above
written.




	 	 	 	 	 
	 	 	ARADIGM CORPORATION, a California corporation
	 	 	 	 	 
	 	 	
By:
	 	/s/ Richard P. Thompson
	 	 	 	 	

	 	 	
Name:
	 	Richard P. Thompson
	 	 	
Title:
	 	Chief Executive Officer
	 	 	 	 	 
	 	 	 	 	PURCHASER:
	 	 	 	 	 
	 	 	 	 	3I BIOSCIENCE
INVESTMENT TRUST PLC.
	 	 	 	 	 
	 	 	
By:
	 	/s/ Andy Smith
	 	 	 	 	

	 	 	
Name:
	 	Andy Smith
	 	 	
Title:
	 	Director
	 	 	
Address:
	 	91 Waterloo Road
	 	 	 	 	London SE1 8XP
	 	 	 	 	United Kingdom






[Signature page to Securities Purchase Agreement]






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