Document:

Exhibit 10.30

 

AMENDMENT TO SECURED CONVERTIBLE DEBENTURES

 

THIS AMENDMENT TO SECURED
CONVERTIBLE DEBENTURES  (the “Amendment”) is made
as of March 1, 2004, by and between AEROGEN, INC., a Delaware corporation (the
“Borrower”)
and SF
CAPITAL PARTNERS, LTD., or its registered assigns  (the
“Holder”).  Capitalized terms not otherwise defined
herein shall have the meanings ascribed to them in the Debenture and Purchase
Agreement (each as defined below);

 

WHEREAS,
the Borrower issued that certain Secured Convertible Debenture dated September
9, 2003, as amended on January 7, 2004 and January 20, 2004 (the “First Debenture”)
and that certain Secured Convertible Debenture dated November 3, 2003 (the “Second Debenture”,
together with the First Debenture, the “Debentures”) to the Holder, and warrants
dated September 9, 2003 and November 3, 2003 (together, the “Warrants”) pursuant to that certain Loan and Securities
Purchase Agreement, dated as of September 9, 2003, as amended by those certain
Amendments dated January 7, 2004 and January 20, 2004, respectively, executed
by and between the Borrower and the Holder (as so amended, the “Purchase Agreement”);

 

WHEREAS,
the Borrower is in the process of selling and issuing shares of the Company’s
Series A-1 Preferred Stock (the “Preferred Stock”) and warrants to purchase shares of
Common Stock (the “Warrants”)
(the “Private Placement”)
on the terms and conditions set forth in that certain Purchase Agreement by and
among the Borrower and the investors named therein, and attached as Exhibit A hereto (the “Private Placement  Purchase Agreement”);

 

WHEREAS,
in order to effect the Private Placement, the Borrower has requested that the
Holder  consent to extend the maturity
date of the Debentures to June 1, 2004, and the Holder is willing to so
consent, based on the representations, and subject to the terms and conditions,
set forth in this Amendment;

 

NOW,
THEREFORE, for good and valuable consideration, and intending
to be legally bound, each of the Borrower and the Holder agree as follows:

 

1.             Amendment.  The Debentures and
Purchase Agreement are amended as follows:

 

1.1          The Maturity Date of
the Debentures is amended from March 1, 2004 to June 1, 2004.

 

1.2          The reference to
March 1, 2004 in the definition of “Debenture” in Section 1.1 of the  Purchase Agreement, as amended, shall now be
June 1, 2004.

 

2.             Waiver.  Holder waives any default or breach by Borrower
of the Debentures, Purchase Agreement or related agreements for failure to
repay the Debentures prior to this Amendment.

 

3.             Interest.  Interest on the Debentures will continue to
accrue through June 1, 2004.

 

4.             Termination.        This Amendment will be null and void if
the First Closing (as defined in the Private Placement Purchase Agreement) of
the Private Placement has not closed on the terms and conditions set forth in
the Private Placement Purchase Agreement by March 23, 2004.

 

5.             Counterpart.  This Amendment may be
executed in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.

 

[SIGNATURE
PAGE TO FOLLOW]

 

 

IN WITNESS WHEREOF,  the parties hereto have executed this AMENDMENT
as of the date set forth in the first paragraph hereof.

 

 

	
  BORROWER:

  	
  HOLDER:

  
	
   

  	
   

  
	
  AEROGEN, INC.

  	
  SF CAPITAL PARTNERS, LTD.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
    /s/
  Robert S. Breuil

  	
   

  	
  By:

  	
    /s/
  Brian Davidson

  	
   

  
	
   

  	
    Robert
  S. Breuil

  	
   

  	
   

  	
    Brian
  Davidson

  	
   

  
	
   

  	
    Chief
  Financial Officer

  	
   

  	
   

  	
    Authorized
  Signatory

  	
   

  

 

 

EXHIBIT
A

 

PRIVATE
PLACEMENT PURCHASE AGREEMNT

 

[Filed separately as Exhibit 10.24 of the Company's Current Report

on Form 8-K, filed on March 26, 2004.]Exhibit 10.31

 

AMENDMENT NO. 1 TO SECURED CONVERTIBLE
DEBENTURE

 

THIS AMENDMENT TO SECURED
CONVERTIBLE DEBENTURE  (the “Amendment”) is made
as of March 1, 2004, by and between AEROGEN, INC., a Delaware corporation (the
“Borrower”)
and the CARPENTER
1983 FAMILY TRUST UA, or its registered assigns  (the “Holder”).  Capitalized terms
not otherwise defined herein shall have the meanings ascribed to them in the
Debenture and Purchase Agreement (each as defined below);

 

WHEREAS,
the Borrower issued that certain Secured Convertible Debenture dated January
23, 2004 (the “Debenture”)
to the Holder, and a warrant dated January 23, 2004 pursuant to that certain Loan and Securities Purchase Agreement, dated as
of January 23, 2004, executed by and between the Borrower and the Holder (as so
amended, the “Purchase Agreement”);

 

WHEREAS,
the Borrower is in the process of selling and issuing shares of the Company’s
Series A-1 Preferred Stock and warrants to purchase shares of the Company’s
Common Stock (the “Private
Placement”) on the terms and conditions set forth in that
certain Purchase Agreement by and among the Borrower and the investors named
therein, and attached as Exhibit A
hereto (the “Private
Placement  Purchase
Agreement”);

 

WHEREAS,
in order to effect the Private Placement, the Borrower has requested that the
Holder  consent to extend the maturity
date of the Debenture to June 1, 2004, and the Holder is willing to so consent,
based on the representations, and subject to the terms and conditions, set
forth in this Amendment;

 

NOW,
THEREFORE, for good and valuable consideration, and intending
to be legally bound, each of the Borrower and the Holder agree as follows:

 

1.             Amendment.  The Debenture and Purchase
Agreement are amended as follows:

 

1.1          The Maturity Date of
the Debenture is amended from March 1, 2004 to June 1, 2004.

 

1.2          The reference to
March 1, 2004 in the definition of Debenture in Section 1.1 of the  Purchase Agreement, as amended, shall now be
June 1, 2004.

 

2.             Waiver.  Holder waives any default or breach by Borrower
of the Debenture, Purchase Agreement or related agreements for failure to repay
the Debenture prior to this Amendment.

 

3.             Interest.  Interest on the Debenture will continue to
accrue through June 1, 2004.

 

4.             Counterpart.  This Amendment may be
executed in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.

 

[SIGNATURE
PAGE TO FOLLOW]

 

 

IN WITNESS WHEREOF,  the parties hereto have executed this AMENDMENT
as of the date set forth in the first paragraph hereof.

 

	
  BORROWER:

  	
  HOLDER:

  
	
   

  	
   

  
	
  Aerogen, Inc.

  	
  CARPENTER
  1983 FAMILY TRUST UA

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
    /s/
  Robert Breuil

  	
   

  	
  By:

  	
    /s/
  Jane Shaw

  	
   

  
	
   

  	
    Robert
  Breuil

  	
   

  	
   

  	
    Jane
  Shaw

  	
   

  
	
   

  	
    Chief
  Financial Officer

  	
   

  	
   

  	
    Authorized
  Signatory

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  Peter Carpenter

  	
   

  
	
   

  	
   

  	
    Peter
  Carpenter

  	
   

  
	
   

  	
   

  	
    Authorized
  Signatory

  	
   

  

 

 

EXHIBIT
A

 

PRIVATE
PLACEMENT PURCHASE AGREEMNT

 

[Filed separately as Exhibit 10.24 of the Company's Current Report

on Form 8-K, filed on March 26, 2004.]Exhibit 10.32

 

THIS SECURITY
HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
BORROWER.  THIS SECURITY MAY BE PLEDGED
IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT SECURED BY SUCH SECURITY.

 

 

$300,000

 

 

Date:  March 12, 2004

 

AEROGEN, INC.

SECURED DEBENTURE DUE APRIL 11, 2004

 

THIS SECURED
DEBENTURE is a duly authorized and issued debenture of Aerogen, Inc., a
Delaware corporation (the “Borrower”),
designated as its Secured Debenture due April 11, 2004, in the aggregate
principal amount of Three Hundred Thousand Dollars ($300,000) (the “Debenture”).

 

FOR VALUE
RECEIVED, the Borrower promises to pay to the order of SF Capital Partners,
Ltd. or its registered assigns (the “Holder”), the principal sum of Three
Hundred Thousand Dollars ($300,000), on the earlier of (i) April 11, 2004 and
(ii) the First Closing (as defined in that certain Purchase Agreement of even
date herewith by and among Borrower, Xmark Fund L.P. and certain other
investors) (the “Maturity Date”), or such earlier date as this Debenture is
required or permitted to be repaid as provided hereunder, and to pay interest
to the Holder on the aggregate then outstanding principal amount of this
Debenture in accordance with the provisions hereof. All holders of Debentures
are referred to collectively, as the “Holders.”  This Debenture is subject to the following
additional provisions:

 

1.             Definitions.           In addition to the terms defined
elsewhere in this Debenture: (a) capitalized terms that are not otherwise
defined herein have the meanings given to such terms in the Loan and Securities
Purchase Agreement, dated as of September 9, 2003, among the Borrower and the
lenders identified therein, as amended (the “Loan
Agreement”), and (b) the following terms have the meanings indicated
below:

 

 

“Change of Control” means the occurrence of
any of the following in one or a series of related transactions: (i) an
acquisition after the date hereof by an individual or legal entity or “group”
(as described in Rule 13d-5(b)(1) under the Exchange Act) of more than one-half
of the voting rights or equity interests in the Borrower; (ii) a replacement of
more than one-half of the members of the Borrower’s board of directors in a
single election of directors that is not approved by those individuals who are
members of the board of directors on the date hereof (or other directors
previously approved by such individuals); (iii) a merger or consolidation of
the Borrower or any Subsidiary or a sale of all or substantially all of the
assets of the Borrower (other than any sale, transfer, license or lease of
assets relating to Borrower’s insulin inhaler product and related technology or
the MIA Assets pursuant to the MIA Term Sheet indicated in Section 6.3(f) of
the Purchase Agreement) in one or a series of related transactions, unless
following such transaction or series of transactions, the holders of the
Borrower’s securities prior to the first such transaction continue to hold at
least one-half of the voting rights and equity interests in the surviving
entity or acquirer of such assets; (iv) a recapitalization, reorganization or
other transaction involving the Borrower or any Subsidiary that constitutes or
results in a transfer of more than one-half of the voting rights or equity
interests in the Borrower, unless following such transaction or series of
transactions, the holders of the Borrower’s securities prior to the first such
transaction continue to hold at least one-half of the voting rights and equity
interests in the surviving entity or acquirer of such assets; (v) consummation
of a “Rule 13e-3 transaction” as defined in Rule 13e-3 under the Exchange Act
with respect to the Borrower; or (vi) the execution by the Borrower or its
controlling shareholders of an agreement providing for or reasonably likely to
result in any of the foregoing events; provided however, that the sale and issuance of securities
pursuant to the Purchase Agreement dated of even date herewith by and among
Borrower, Xmark Fund L.P. and certain other investors shall not be a Change of
Control.

 

“Eligible
Market” means any of the New York Stock Exchange, the American Stock
Exchange, the Nasdaq National Market or the Nasdaq Small Cap Market.

 

“Event of
Default” means any one of the following events  (whatever the reason and whether it shall be
voluntary or involuntary or effected by operation of law or pursuant to any
judgment, decree or order of any court, or any order, rule or regulation of any
administrative or governmental body):

 

(i)  any default in the payment (free of any claim
of subordination) of principal, interest or liquidated damages in respect of
this Debenture, within five (5) Trading Days of the date when due and payable
(whether on the Maturity Date or by acceleration or prepayment or otherwise).

 

(ii) the Borrower or any Subsidiary defaults in any
of its obligations under any other debenture or any mortgage, credit agreement
or other facility, indenture agreement, factoring agreement or other instrument
under which there has been issued, or by which there has been secured or
evidenced, any indebtedness for borrowed money or money due under any long term
leasing or factoring arrangement of the Borrower or any Subsidiary in an amount
exceeding $150,000, whether such indebtedness now exists or is hereafter
created, and such default results in such indebtedness becoming or being
declared due and payable prior to the date on which it would otherwise become
due and payable.

 

2

 

(iii)                the occurrence of a Change of
Control transaction.

 

(iv)                the incurrence by the Borrower
of any debt obligation that is senior in right of payment to this Debenture
other than Permitted Indebtedness (as defined in the Security Agreement), or
otherwise secured by any of the assets, income or properties of the Borrower,
other than Permitted Liens.

 

(v)                 the payment by
the Borrower of any dividends or distributions of assets, properties or cash to
any Person that is outside of the ordinary course of the Borrower’s business
and not consistent in amount and type with prior practice as disclosed in SEC
Reports.

 

(vi)                the occurrence and continuance
of any event of default (whether or not declared) under any Debentures (as defined
in the Loan Agreement).

 

(vii)               the Borrower defaults in the
timely performance of any  obligation
under the Transaction Documents and such default continues uncured for a period
of ten Trading Days after the date on which written notice of such default is
first given to the Borrower by the Holder (it being understood that no prior
notice need be given in the case of a default that cannot reasonably be cured
within ten Trading Days).

 

(viii)              any of the Borrower’s
representations and warranties set forth in the Loan Agreement shall be
incorrect as of the date originally made (except with respect to the
representations and warranties in 3.1(b), 3.1(c), the first sentence of 3.1(d)
and 3.1(e), which shall be true and correct as of the date hereof) and result
in a Material Adverse Effect.

 

(ix)                 the
occurrence of a Bankruptcy Event (as defined in the Purchase Agreement).

 

(ix)                 the Common
Stock: (i) is not listed or quoted, or is suspended from trading, on an
Eligible Market for a period of three Trading Days (which need not be
consecutive Trading Days), and (ii) is not traded in the over-the-counter
market, as reported by the OTC Bulletin Board, or quoted in the
over-the-counter market as reported by the National Quotation Bureau
Incorporated (or any similar organization or agency succeeding its functions of
reporting prices).

 

(xi)                 the Borrower
fails to make any cash payment required under the Transaction Documents
(including, without limitations, as prepayment hereunder) and such failure is
not cured within five Trading Days after notice of such default is first given
to the Borrower by a Lender.

 

“Original
Issue Date” means the date of issuance of this Debenture, regardless
of the number of transfers of this Debenture.

 

“Trading Day”
means: (a) a day on which the shares of Common Stock are traded on an
Eligible Market, or (b) if the shares of Common Stock are not listed on an
Eligible Market, a day on which the shares of Common Stock are traded in the
over-the-counter market, as reported by the OTC Bulletin Board, or (c) if
the shares of Common Stock are not quoted on

 

3

 

the OTC Bulletin Board, a day
on which the shares of Common Stock are quoted in the over-the-counter market
as reported by the National Quotation Bureau Incorporated (or any similar
organization or agency succeeding its functions of reporting prices); provided,
that in the event that the shares of Common Stock are not listed or quoted as
set forth in (a), (b) and (c) hereof, then Trading Day shall mean a business
day.

 

2.             Interest.  The Borrower shall pay interest to the
Holder in cash on the aggregate outstanding principal amount of this Debenture
at the rate of 10% per annum, payable on the Maturity Date or such earlier date
as this Debenture is required or permitted to be repaid as provided
hereunder.  Interest shall be calculated
on the basis of a 360-day year and shall accrue daily commencing on the
Original Issue Date.

 

3.             Registration
of Debentures.  The Borrower shall
register this Debenture upon records to be maintained by the Borrower for that
purpose (the “Debenture Register”)
in the name of each record Holder thereof from time to time. The Borrower may
deem and treat the registered Holder of this Debenture as the absolute owner
hereof for the purpose of any payment of interest hereon, and for all other
purposes, absent actual notice to the contrary.

 

4.             Registration
of Transfers and Exchanges.  The
Borrower shall register the transfer of any portion of this Debenture in the
Debenture Register upon surrender of this Debenture to the Borrower at its
address for notice set forth herein. Upon any such registration or transfer, a
new Debenture, in substantially the form of this Debenture (any such new
debenture, a “New Debenture”),
evidencing the portion of this Debenture so transferred shall be issued to the
transferee and a New Debenture evidencing the remaining portion of this
Debenture not so transferred, if any, shall be issued to the transferring
Holder. The acceptance of a new Debenture by the transferee thereof shall be
deemed the acceptance by such transferee of all of the rights and obligations
of a holder of a Debenture. The Borrower agrees that its prior consent is not
required for the transfer of any portion of this Debenture.  This Debenture is exchangeable for an equal
aggregate principal amount of Debentures of different authorized denominations,
as requested by the Holder surrendering the same. No service charge or other
fee will be imposed in connection with any such registration of transfer or
exchange.

 

5.             Events
of Default.

 

(a)           At any time or times following the
occurrence of an Event of Default, the Holder may elect, by notice to the
Borrower (an “Event Notice”), to
require the Borrower to repurchase all or any portion of the outstanding
principal amount of this Debenture held by such Holder, as indicated in the
Event Notice, at a repurchase price equal to 110% of such outstanding principal
amount, plus all accrued but unpaid interest thereon through the date of
payment.

 

(b)           Upon the occurrence and during the
continuance of any Bankruptcy Event, all outstanding principal and accrued but
unpaid interest on this Debenture shall immediately become due and payable in
full in cash (free of any claim of subordination), without any further action
by the Holder, and the Borrower shall immediately be obligated to repurchase
this Debenture pursuant to the preceding paragraph as if the Holder had
delivered an Event Notice immediately prior to the occurrence of such
Bankruptcy Event.

 

4

 

(c)           In connection with any Event of
Default, the Holder need not provide and the Borrower hereby waives any
presentment, demand, protest or other notice of any kind, and the Holder may
immediately and without expiration of any grace period enforce any and all of
its rights and remedies hereunder and all other remedies available to it under
applicable law. Any such declaration may be rescinded and annulled by the
Holder at any time prior to payment hereunder. No such rescission or annulment
shall affect any subsequent Event of Default or impair any right consequent
thereto.

 

6.             Ranking.  This Debenture ranks pari passu with all
other Debentures (as defined in the Loan Agreement, as amended) now or
hereafter issued pursuant to the Transaction Documents and is senior to all
existing and hereafter created Indebtedness of the Borrower. Other than
Permitted Indebtedness, no Indebtedness of the Borrower is senior to this
Debenture in right of payment, whether with respect of interest, damages or
upon liquidation or dissolution or otherwise. The Borrower will not, and will
not permit any Subsidiary to, directly or indirectly, enter into, create,
incur, assume or suffer to exist any indebtedness of any kind, on or with respect
to any of its property or assets now owned or hereafter acquired or any
interest therein or any income or profits therefrom, that is senior in any
respect to the Borrower’s obligations under this Debenture, other than
Permitted Indebtedness.

 

7.             Prepayment
at the Option of the Borrower.     At
any time following the Original Issue Date and prior to the Maturity Date, upon
delivery of a written notice to the Holder, the Borrower shall be entitled to
prepay all or a portion of the principal amount of this Debenture (including
accrued and unpaid interest thereunder).

 

8.             Notices.    Any and all notices or other
communications or deliveries hereunder shall be in writing and shall be deemed
given and effective on the earliest of (i) the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile number
specified in this Section prior to 6:30 p.m. (New York City time) on a Trading
Day, (ii) the next Trading Day after the date of transmission, if such notice
or communication is delivered via facsimile at the facsimile number specified
in this Section on a day that is not a Trading Day or later than 6:30 p.m. (New
York City time) on any Trading Day, (iii) the Trading Day following the date of
mailing, if sent by nationally recognized overnight courier service, or (iv)
upon actual receipt by the party to whom such notice is required to be given.
The addresses for such communications shall be: (i) if to the Borrower, to 2071
Stierlin Court, Mountain View, CA 94043, facsimile: (650) 864-7433, attention
Chief Financial Officer, or (ii) if to the Holder, to the address or facsimile
number appearing on the Borrower’s stockholder records or such other address or
facsimile number as the Holder may provide to the Borrower in accordance with
this Section.

 

9.             Miscellaneous.

 

(a)           This Debenture shall be binding on
and inure to the benefit of the parties hereto and their respective successors
and assigns. This Debenture
may be amended only in writing signed by the Borrower and the Holder and their
successors and assigns.

 

(b)           Subject to Section 9(a), above,
nothing in this Debenture shall be construed to give to any person or
corporation other than the Borrower and the Holder any legal

 

5

 

or equitable right, remedy or
cause under this Debenture. This Debenture shall inure to the sole and
exclusive benefit of the Borrower and the Holder.

 

(c)           All questions concerning the
construction, validity, enforcement and interpretation of this Debenture shall
be governed by and construed and enforced in accordance with the internal laws
of the State of New York, without regard to the principles of conflicts of law
thereof.  Each party agrees that all
proceedings shall be commenced exclusively in the state and federal courts
sitting in the City of New York, Borough of Manhattan (the “New York Courts”).  Each party hereto hereby irrevocably submits
to the exclusive jurisdiction of the New York Courts for any proceeding, and
hereby irrevocably waives, and agrees not to assert in any proceeding, any
claim that it is not personally subject to the jurisdiction of any New York
Court or that a New York Court is an inconvenient forum for such
proceeding.  Each party hereto hereby
irrevocably waives personal service of process and consents to process being
served in any such proceeding by mailing a copy thereof via registered or
certified mail or overnight delivery (with evidence of delivery) to such party
at the address in effect for notices to it under this Debenture and agrees that
such service shall constitute good and sufficient service of process and notice
thereof.  Nothing contained herein shall
be deemed to limit in any way any right to serve process in any manner permitted
by law.  Each party hereto hereby irrevocably
waives, to the fullest extent permitted by applicable law, any and all right to
trial by jury in any legal proceeding. 
The prevailing party in a proceeding shall be reimbursed by the other
party for its attorney’s fees and other costs and expenses incurred with the
investigation, preparation and prosecution of such proceeding.

 

(d)           The headings herein are for
convenience only, do not constitute a part of this Debenture and shall not be
deemed to limit or affect any of the provisions hereof.

 

(e)           In case any one or more of the
provisions of this Debenture shall be invalid or unenforceable in any respect,
the validity and enforceability of the remaining terms and provisions of this
Debenture shall not in any way be affected or impaired thereby and the parties
will attempt in good faith to agree upon a valid and enforceable provision
which shall be a commercially reasonable substitute therefor, and upon so
agreeing, shall incorporate such substitute provision in this Debenture.

 

(f)            No provision of this Debenture may
be waived or amended except in a written instrument signed, in the case of an
amendment, by the Borrower and the Holder or, or, in the case of a waiver, by
the Holder. No waiver of any default with respect to any provision, condition
or requirement of this Debenture shall be deemed to be a continuing waiver in
the future or a waiver of any subsequent default or a waiver of any other
provision, condition or requirement hereof, nor shall any delay or omission of
either party to exercise any right hereunder in any manner impair the exercise
of any such right.

 

(g)           Notwithstanding any provision to the
contrary contained in this Debenture, it is expressly agreed and provided that
the total liability of the Borrower under this Debenture for payments in the
nature of interest shall not exceed the maximum lawful rate authorized under
applicable law (the “Maximum Rate”),
and, without limiting the foregoing, in no event shall any rate of interest or
default interest, or both of them, when aggregated with any other sums in the
nature of interest that the Borrower may be obligated to pay under this

 

6

 

Debenture exceed such Maximum
Rate. It is agreed that if the maximum contract rate of interest allowed by law
and applicable to this Debenture is increased or decreased by statute or any
official governmental action subsequent to the date hereof, the new maximum
contract rate of interest allowed by law will be the Maximum Rate of interest
applicable to this Debenture from the effective date forward, unless such
application is precluded by applicable law. If under any circumstances
whatsoever, interest in excess of the Maximum Rate is paid by the Borrower to
any Holder with respect to indebtedness evidenced by this Debenture, such
excess shall be applied by such Holder to the unpaid principal balance of any
such indebtedness or be refunded to the Borrower, the manner of handling such
excess to be at such Holder’s election.

 

(h)           The obligations under this Debenture are
secured pursuant to the Security Agreements.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGE FOLLOWS]

 

7

 

IN WITNESS WHEREOF, the Borrower has caused
this Secured Debenture to be duly executed by a duly authorized officer as of
the date first above indicated.

 

	
  AEROGEN, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
    /s/
  Robert S. Breuil

  	
   

  
	
   

  	
  Robert S.
  Breuil

  
	
   

  	
  Chief
  Financial Officer

  

 

8

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