Document:

Exhibit 10.22

 

REGISTRATION RIGHTS AGREEMENT

 

This
Registration Rights Agreement (this “Agreement”) is made and entered into as of
January 23, 2004, between Aerogen, Inc., a Delaware corporation (the “Borrower”),
and the Lender identified on the signature page hereto (the “Lender”).

 

This
Agreement is made pursuant to the Loan and Securities Purchase Agreement, dated
as of the date hereof among the Borrower and the Lender (the “Loan
Agreement”).

 

The
Borrower and the Lender hereby agree as follows:

 

1.                                       Definitions.  Capitalized terms used and not otherwise
defined herein that are defined in the Loan Agreement shall have the meanings
given such terms in the Loan Agreement. 
As used in this Agreement, the following terms shall have the respective
meanings set forth in this Section 1:

 

“Effectiveness Date” means the earlier of: (i) the 210th day
following the Closing Date and (ii) the fifth Trading Day following the date on
which the Borrower is notified by the Commission that the initial Registration
Statement will not be reviewed or is no longer subject to further review and
comments.

 

“Effectiveness Period”
shall have the meaning set forth in Section 2(a).

 

“Filing Date” means the 120th day following the Closing Date,
(b) unless previously filed pursuant to the immediately preceding subsection,
with respect to a Registration Statement required to be filed to cover the
resale by the Holders of the Additional Registrable Securities, the 120th day
following the Additional Closing Date.

 

“Holder” or “Holders” means the holder or holders, as the
case may be, from time to time of Registrable Securities.

 

“Indemnified Party”
shall have the meaning set forth in Section 5(c).

 

“Indemnifying Party”
shall have the meaning set forth in Section 5(c).

 

“Losses” shall
have the meaning set forth in Section 5(a).

 

“Proceeding” means an action, claim, suit, investigation or
proceeding (including, without limitation, an investigation or partial
proceeding, such as a deposition), whether commenced or threatened.

 

“Prospectus” means the prospectus included in a Registration
Statement (including, without limitation, a prospectus that includes any
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A promulgated under the
Securities Act), as amended or supplemented by any prospectus supplement, with
respect to the terms of the offering of any portion of the Registrable
Securities 

 

 

covered by a Registration
Statement, and all other amendments and supplements to the Prospectus,
including post-effective amendments, and all material incorporated by reference
or deemed to be incorporated by reference in such Prospectus.

 

“Registrable Securities” means the Underlying Shares issuable
upon conversion or exercise (as applicable) of the Securities issued on the
Closing Date, together with any securities issued or issuable upon any stock
split, dividend or other distribution, recapitalization or similar event, or
any conversion price or exercise price adjustment with respect thereto.

 

“Registration Statement” means each of the following:  (i) an initial registration statement which
is required to register the resale of the Initial Registrable Securities, (ii)
if an Additional Closing shall have occurred, an initial registration
statement, which is required to register the resale of the Additional
Registrable Securities, (iii) each additional registration statement, if any,
contemplated by Section 2(c), and (iv) including, in each case, the
Prospectus, amendments and supplements to each such registration statement or
Prospectus, including pre- and post-effective amendments, all exhibits thereto,
and all material incorporated by reference or deemed to be incorporated by
reference in such registration statement.

 

“Rule 144” means Rule 144 promulgated by the Commission pursuant
to the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.

 

“Rule 415” means Rule 415 promulgated by the Commission pursuant
to the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.

 

“Rule 424” means Rule 424 promulgated by the Commission pursuant
to the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.

 

“Securities” shall have the meaning set forth in the Loan
Agreement.

 

“Underlying Shares” shall have the meaning set forth in the Loan
Agreement.

 

2.                                       Registration.

 

(a)                                  On
or prior to the Filing Date, the Borrower shall prepare and file with the
Commission a Registration Statement covering the resale of all Registrable
Securities required to be included in such Registration Statement for an
offering to be made on a continuous basis pursuant to Rule 415.  Each Registration Statement shall be on Form
S-3 (except if the Borrower is not then eligible to register for resale the
Registrable Securities on Form S-3, in which case such registration shall be on
another appropriate form in accordance herewith) and shall contain (except if
otherwise required by the Commission or directed by the Holders of at least a
majority of the Registrable Securities) the “Plan of Distribution”
attached hereto as Annex A.  The
Borrower shall use its best efforts to cause each Registration Statement to be
declared effective under the Securities Act as promptly as possible, but in any
event prior to the applicable 

 

2

 

Effectiveness Date, and
shall use its best efforts to keep such Registration Statement continuously
effective under the Securities Act until the date which is two years after the
date that such Registration Statement is declared effective by the Commission
or such earlier date when all Registrable Securities covered by a Registration
Statement have been sold or may be sold without volume restrictions pursuant to
Rule 144(k) as determined by the counsel to the Borrower pursuant to a written
opinion letter to such effect, addressed and acceptable to the Borrower’s
transfer agent and the affected Holders (the “Effectiveness Period”).

 

(b)                                 If:
(a) a Registration Statement is not filed on or prior to the Filing Date (any
such failure being referred to as an “Event,” and the day of an Event
shall be an “Event Date”), then, in addition to any other rights the
Holder may have hereunder or applicable law: (x) the Borrower shall pay to
Holder an amount in cash, as liquidated damages and not as a penalty, equal to
1% of the aggregate purchase price paid by Holder pursuant to the Loan
Agreement for the first 30 day period beginning on the Event Date during which
the applicable Event is not cured (or a pro rata portion of any such partial
period); and (y) if the applicable Event shall not have been cured by the last
day of such 30 day period, until the applicable Event is cured, the Borrower
shall pay to Holder an amount in cash, as liquidated damages and not as a
penalty, equal to 2% of the aggregate purchase price paid by Holder pursuant to
the Loan Agreement for each month anniversary thereafter (or a pro rata portion
of any such partial month).  The period
of time in which the Borrower is required to file the Registration Statement
hereunder shall be tolled to the extent of any delays caused solely by any
Holder.

 

3.                                       Registration
Procedures

 

In
connection with the Borrower’s registration obligations hereunder:

 

(a)                                  The
Borrower shall not file a Registration Statement or any such Prospectus or any
amendments or supplements thereto to which the Holders of a majority of the
Registrable Securities shall reasonably object in good faith.

 

(b)                                 The
Borrower shall (i) prepare and file with the Commission such amendments,
including post-effective amendments, to each Registration Statement and the
Prospectus used in connection therewith as may be necessary to keep such
Registration Statement continuously effective as to the applicable Registrable
Securities for its Effectiveness Period and prepare and file with the
Commission such additional Registration Statements in order to register for
resale under the Securities Act all of the Registrable Securities; (ii) cause
the related Prospectus to be amended or supplemented by any required Prospectus
supplement, and as so supplemented or amended to be filed pursuant to Rule 424;
(iii) respond as promptly as reasonably possible, to any comments received from
the Commission with respect to each Registration Statement or any amendment
thereto; and (iv) comply in all material respects with the provisions of the
Securities Act and the Exchange Act with respect to the Registration Statements
and the disposition of all Registrable Securities covered by each Registration
Statement.

 

(c)                                  The
Borrower shall notify the Holders as promptly as reasonably possible when the
Registration Statement Registration Statement or any post-effective amendment
has 

 

3

 

become effective; (ii) of
the issuance by the Commission of any stop order suspending the effectiveness
of a Registration Statement covering any or all of the Registrable Securities
or the initiation of any Proceedings for that purpose; (iii) of the receipt by
the Borrower of any notification with respect to the suspension of the
qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction, or the initiation or threatening of
any Proceeding for such purpose; and (iv) of the occurrence of any event or
passage of time that makes the financial statements included in a Registration
Statement ineligible for inclusion therein or any statement made in such
Registration Statement or Prospectus or any document incorporated or deemed to
be incorporated therein by reference untrue in any material respect or that
requires any revisions to such Registration Statement, Prospectus or other
documents so that, in the case of such Registration Statement or the
Prospectus, as the case may be, it will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading.

 

(d)                                 The
Borrower shall use its reasonable best efforts to avoid the issuance of, or, if
issued, obtain the withdrawal of (i) any order suspending the effectiveness of
a Registration Statement, or (ii) any suspension of the qualification (or
exemption from qualification) of any of the Registrable Securities for sale in
any jurisdiction, at the earliest practicable moment.

 

(e)                                  The
Borrower shall furnish to Holder upon request, without charge, at least one
conformed copy of each Registration Statement and each amendment thereto,
including financial statements and schedules, all documents incorporated or
deemed to be incorporated therein by reference, and all exhibits to the extent
requested by such Person (including those previously furnished or incorporated
by reference) promptly after the filing of such documents with the Commission.

 

(f)                                    The
Borrower shall promptly deliver to each Holder upon request, without charge, as
many copies of each Prospectus or Prospectuses (including each form of
prospectus) and each amendment or supplement thereto as such Persons may
reasonably request.  The Borrower hereby
consents to the use of such Prospectus and each amendment or supplement thereto
by the selling Holder in connection with the offering and sale of the
Registrable Securities covered by such Prospectus and any amendment or
supplement thereto.

 

(g)                                 Prior
to any public offering of Registrable Securities, the Borrower shall use its
reasonable best efforts to register or qualify or cooperate with the selling
Holder in connection with the registration or qualification (or exemption from
such registration or qualification) of such Registrable Securities for offer
and sale under the securities or Blue Sky laws of all jurisdictions within the United
States, to keep each such registration or qualification (or exemption
therefrom) effective during the Effectiveness Period and to do any and all
other acts or things necessary or advisable to enable the disposition in such
jurisdictions of the Registrable Securities covered by the Registration
Statements; provided, that the Borrower shall not be required to qualify
generally to do business in any jurisdiction where it is not then so qualified
or subject the Borrower to any material tax in any such jurisdiction where it
is not then so subject.

 

4

 

(h)                                 The
Borrower shall cooperate with the Holder to facilitate the timely preparation
and delivery of certificates representing Registrable Securities to be delivered
to a transferee pursuant to the Registration Statements, which certificates
shall be free, to the extent permitted by the Loan Agreement, of all
restrictive legends, and to enable such Registrable Securities to be in such
denominations and registered in such names as Holder may request.

 

(i)                                     Upon
the occurrence of any event contemplated by Section 3(c)(iv), as promptly
as reasonably possible, the Borrower shall prepare a supplement or amendment,
including a post-effective amendment, to the affected Registration Statements
or a supplement to the related Prospectus or any document incorporated or
deemed to be incorporated therein by reference, and file any other required
document so that, as thereafter delivered, no Registration Statement nor any
Prospectus will contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.

 

(j)                                     The
Borrower may require selling Holder to furnish to the Borrower a certified
statement as to the number of shares of Common Stock beneficially owned by
Holder and, if requested by the Commission, the controlling person thereof.

 

(k)                                  At
any time, upon written notice to the participating Holder and for a period not
to exceed twenty (20) Trading Days
thereafter (the “Suspension Period”), the Borrower may suspend the use
or effectiveness of any Registration Statement (and the Holders hereby agree
not to offer or sell any Registrable Securities pursuant to such Registration
Statement during the Suspension Period) if the Borrower reasonably believes
that the Borrower may, in the absence of such delay or suspension hereunder, be
required under state or federal securities laws to disclose any corporate
development the disclosure of which could reasonably be expected to have a
material adverse effect upon the Borrower, its stockholders, a potentially
significant transaction or event involving the Borrower, or any negotiations, discussions,
or proposals directly relating thereto. 
In the event that the Borrower shall exercise its right to suspend the
effectiveness of a registration hereunder, the applicable time period during
which the Registration Statement is to remain effective shall be extended by a
period of time equal to the duration of the Suspension Period.  The Borrower may extend the Suspension
Period for an additional twenty (20)
Trading Days in accordance with the provisions of this Section 3(k)
with the consent of the Holder of a majority of the Registrable Securities
registered under the applicable Registration Statement.  If so directed by the Borrower, Holder shall
use its commercially reasonable efforts to deliver to the Borrower (at the
Borrower’s expense) all copies, other than permanent file copies then in
Holder’s possession, of the Prospectus relating to such Registrable Securities
current at the time of receipt of such notice.

 

4.                                       Registration
Expenses.  All fees and expenses
incident to the performance of or compliance with this Agreement by the
Borrower shall be borne by the Borrower whether or not any Registrable
Securities are sold pursuant to a Registration Statement.  The fees and expenses referred to in the
foregoing sentence shall include, without limitation, (i) all registration and
filing fees (including, without limitation, fees and expenses (A) with respect
to filings required to be made with any Trading Market on which the Common
Stock is then listed for trading, and (B) in compliance with applicable state
securities or Blue Sky laws), (ii) printing expenses 

 

5

 

(including, without
limitation, expenses of printing certificates for Registrable Securities and of
printing prospectuses if the printing of prospectuses is reasonably requested
by the holders of a majority of the Registrable Securities included in the
Registration Statement), (iii) messenger, telephone and delivery expenses, (iv)
fees and disbursements of counsel for the Borrower and (v) fees and expenses of
all other Persons retained by the Borrower in connection with the consummation
of the transactions contemplated by this Agreement.  In addition, the Borrower shall be responsible for all of its
internal expenses incurred in connection with the consummation of the
transactions contemplated by this Agreement (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit and the fees and expenses incurred
in connection with the listing of the Registrable Securities on any securities
exchange as required hereunder.

 

5.                                       Indemnification.

 

(a)                                  Indemnification
by the Borrower.  The Borrower
shall, notwithstanding any termination of this Agreement, indemnify and hold
harmless the Holder, the officers, directors, agents, investment advisors and
employees of each of them, each Person who controls Holder (within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange
Act) and the officers, directors, agents and employees of each such controlling
Person, to the fullest extent permitted by applicable law, from and against any
and all losses, claims, damages, liabilities, costs (including, without
limitation, reasonable costs of preparation and reasonable attorneys’ fees) and
expenses (collectively, “Losses”), as incurred, arising out of or
relating to any untrue or alleged untrue statement of a material fact contained
in any Registration Statement, any Prospectus or any form of prospectus or in
any amendment or supplement thereto or in any preliminary prospectus, or
arising out of or relating to any omission or alleged omission of a material
fact required to be stated therein or necessary to make the statements therein
(in the case of any Prospectus or form of prospectus or supplement thereto, in
light of the circumstances under which they were made) not misleading, except
to the extent, but only to the extent, that (1) such untrue statements or
omissions are based solely upon information regarding Holder furnished in
writing to the Borrower by Holder expressly for use therein, or to the extent
that such information relates to Holder or Holder’s proposed method of
distribution of Registrable Securities and was reviewed and expressly approved
in writing by Holder expressly for use in the Registration Statement, such
Prospectus or such form of Prospectus or in any amendment or supplement thereto
(it being understood that the Holder has approved Annex A hereto for this
purpose) or (2) in the case of an occurrence of an event of the type specified
in Section 3(c)(ii)-(v), the use by Holder of an outdated or defective
Prospectus after the Borrower has notified Holder in writing that the
Prospectus is outdated or defective and prior to the receipt by Holder of an
Advice or an amended or supplemented Prospectus, but only if and to the extent
that following the receipt of the Advice or the amended or supplemented
Prospectus the misstatement or omission giving rise to such Loss would have
been corrected.  The Borrower shall
notify the Holder promptly of the institution, threat or assertion of any
Proceeding of which the Borrower is aware in connection with the transactions
contemplated by this Agreement.

 

(b)                                 Indemnification
by Holder. Holder shall, indemnify and hold harmless the Borrower, its
directors, officers, agents and employees, each Person who controls the
Borrower (within the meaning of Section 15 of the Securities Act and
Section 20 of the Exchange Act), and 

 

6

 

the directors, officers,
agents or employees of such controlling Persons, to the fullest extent
permitted by applicable law, from and against all Losses, as incurred, arising
solely out of or based solely upon: (x) Holder’s failure to comply with the
prospectus delivery requirements of the Securities Act or (y) any untrue
statement of a material fact contained in any Registration Statement, any
Prospectus, or any form of prospectus, or in any amendment or supplement
thereto, or arising solely out of or based solely upon any omission of a
material fact required to be stated therein or necessary to make the statements
therein not misleading to the extent, but only to the extent that, (1) such
untrue statements or omissions are based solely upon information regarding
Holder furnished in writing to the Borrower by Holder expressly for use
therein, or to the extent that such information relates to Holder or Holder’s
proposed method of distribution of Registrable Securities and was reviewed and
expressly approved in writing by Holder expressly for use in the Registration
Statement (it being understood that the Holder has approved Annex A hereto for
this purpose), such Prospectus or such form of Prospectus or in any amendment
or supplement thereto or (2) in the case of an occurrence of an event of the
type specified in Section 3(c)(ii)-(v), the use by Holder of an outdated
or defective Prospectus after the Borrower has notified Holder in writing that
the Prospectus is outdated or  defective
and prior to the receipt by Holder of an Advice or an amended or supplemented
Prospectus, but only if and to the extent that following the receipt of the
Advice or the amended or supplemented Prospectus the misstatement or omission
giving rise to such Loss would have been corrected.  In no event shall the liability of selling Holder hereunder be
greater in amount than the dollar amount of the net proceeds received by Holder
upon the sale of the Registrable Securities giving rise to such indemnification
obligation.

 

(c)                                  Conduct
of Indemnification Proceedings. If any Proceeding shall be brought or
asserted against any Person entitled to indemnity hereunder (an “Indemnified
Party”), such Indemnified Party shall promptly notify the Person
from whom indemnity is sought (the “Indemnifying Party”) in writing, and the
Indemnifying Party shall assume the defense thereof, including the employment
of counsel reasonably satisfactory to the Indemnified Party and the payment of
all fees and expenses incurred in connection with defense thereof; provided,
that the failure of any Indemnified Party to give such notice shall not relieve
the Indemnifying Party of its obligations or liabilities pursuant to this
Agreement, except (and only) to the extent that it shall be finally determined
by a court of competent jurisdiction (which determination is not subject to
appeal or further review) that such failure shall have proximately and
materially adversely prejudiced the Indemnifying Party.

 

An
Indemnified Party shall have the right to employ separate counsel in any such
Proceeding and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party or Parties
unless:  (1) the Indemnifying Party has
agreed in writing to pay such fees and expenses; (2) the Indemnifying Party
shall have failed promptly to assume the defense of such Proceeding and to
employ counsel reasonably satisfactory to such Indemnified Party in any such
Proceeding; or (3) the named parties to any such Proceeding (including any
impleaded parties) include both such Indemnified Party and the Indemnifying
Party, and such Indemnified Party shall have been advised by counsel that a
conflict of interest is likely to exist if the same counsel were to represent
such Indemnified Party and the Indemnifying Party (in which case, if such
Indemnified Party notifies the Indemnifying Party in writing that it elects to
employ separate counsel at the expense of the Indemnifying

 

7

 

Party, the Indemnifying
Party shall not have the right to assume the defense thereof and such counsel
shall be at the expense of the Indemnifying Party).  The Indemnifying Party shall not be liable for any settlement of any
such Proceeding effected without its written consent, which consent shall not
be unreasonably withheld.  No
Indemnifying Party shall, without the prior written consent of the Indemnified
Party, effect any settlement of any pending Proceeding in respect of which any
Indemnified Party is a party, unless such settlement includes an unconditional
release of such Indemnified Party from all liability on claims that are the
subject matter of such Proceeding.

 

All
fees and expenses of the Indemnified Party (including reasonable fees and
expenses to the extent incurred in connection with investigating or preparing
to defend such Proceeding in a manner not inconsistent with this Section) shall
be paid to the Indemnified Party, as incurred, within ten Trading Days of
written notice thereof to the Indemnifying Party (regardless of whether it is
ultimately determined that an Indemnified Party is not entitled to
indemnification hereunder; provided, that the Indemnifying Party may require
such Indemnified Party to undertake to reimburse all such fees and expenses to
the extent it is finally judicially determined that such Indemnified Party is
not entitled to indemnification hereunder).

 

(d)                                 Contribution.  If a claim for indemnification under
Section 5(a) or 5(b) is unavailable to an Indemnified Party (by reason of
public policy or otherwise), then each Indemnifying Party, in lieu of
indemnifying such Indemnified Party, shall contribute to the amount paid or
payable by such Indemnified Party as a result of such Losses, in such
proportion as is appropriate to reflect the relative fault of the Indemnifying
Party and Indemnified Party in connection with the actions, statements or
omissions that resulted in such Losses as well as any other relevant equitable
considerations.  The relative fault of
such Indemnifying Party and Indemnified Party shall be determined by reference
to, among other things, whether any action in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged omission of
a material fact, has been taken or made by, or relates to information supplied
by, such Indemnifying Party or Indemnified Party, and the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent
such action, statement or omission.  The
amount paid or payable by a party as a result of any Losses shall be deemed to
include, subject to the limitations set forth in Section 5(c), any
reasonable attorneys’ or other reasonable fees or expenses incurred by such
party in connection with any Proceeding to the extent such party would have
been indemnified for such fees or expenses if the indemnification provided for
in this Section was available to such party in accordance with its terms.

 

The
parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 5(d) were determined by pro rata allocation or by
any other method of allocation that does not take into account the equitable
considerations referred to in the immediately preceding paragraph.  Notwithstanding the provisions of this
Section 5(d), no Holder shall be required to contribute, in the aggregate,
any amount in excess of the amount by which the proceeds actually received by
Holder from the sale of the Registrable Securities subject to the Proceeding
exceeds the amount of any damages that Holder has otherwise been required to
pay by reason of such untrue or alleged untrue statement or omission or alleged
omission.

 

8

 

The
indemnity and contribution agreements contained in this Section are in
addition to any liability that the Indemnifying Parties may have to the
Indemnified Parties.

 

6.                                       Miscellaneous

 

(a)                                  Remedies.  In the event of a breach by the Borrower or
by Holder, of any of their obligations under this Agreement, each Holder or
Borrower, as the case may be, in addition to being entitled to exercise all
rights granted by law and under this Agreement, including recovery of damages,
will be entitled to specific performance of its rights under this Agreement.  The Borrower and each Holder agree that
monetary damages would not provide adequate compensation for any losses
incurred by reason of a breach by it of any of the provisions of this Agreement
and hereby further agrees that, in the event of any action for specific performance
in respect of such breach, it shall waive the defense that a remedy at law
would be adequate.

 

(b)                                 Compliance.  Holder covenants and agrees that it will
comply with the prospectus delivery requirements of the Securities Act as
applicable to it in connection with sales of Registrable Securities pursuant to
the Registration Statement.

 

(c)                                  Discontinued
Disposition.  Holder agrees by its
acquisition of such Registrable Securities that, upon receipt of a notice from
the Borrower of the occurrence of any event of the kind described in
Section 3(c), Holder will forthwith discontinue disposition of such
Registrable Securities under the Registration Statement until Holder’s receipt
of the copies of the supplemented Prospectus and/or amended Registration Statement
or until it is advised in writing (the “Advice”) by the Borrower that the use of
the applicable Prospectus may be resumed, and, in either case, has received
copies of any additional or supplemental filings that are incorporated or
deemed to be incorporated by reference in such Prospectus or Registration
Statement.  The Borrower may provide
appropriate stop orders to enforce the provisions of this paragraph.

 

(d)                                 Amendments
and Waivers. The provisions of this Agreement, including the provisions of
this sentence, may not be amended, modified or supplemented, and waivers or
consents to departures from the provisions hereof may not be given, unless the
same shall be in writing and signed by the Borrower and the Holder of all of
the then outstanding Registrable Securities. 
Notwithstanding the foregoing, a waiver or consent to depart from the
provisions hereof with respect to a matter that relates exclusively to the
rights of Holder may be given by Holders of at least a majority of the
Registrable Securities to which such waiver or consent relates, provided,
that the provisions of this sentence may not be amended, modified, or
supplemented except in accordance with the provisions of the immediately
preceding sentence.

 

(e)                                  Notices.  Any and all notices or other communications
or deliveries required or permitted to be provided 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 telephone number specified in this Section prior to 5:00
p.m. (California time) on a Trading Day, (ii) the Trading Day after the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile telephone number specified in this Agreement later than 5:00 p.m.
(California time) on any date and earlier than 

 

9

 

11:59 p.m. (California
time) on such date, (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 address for such notices and
communications shall be as follows:

 

	
  If to the
  Borrower:

  	
  Aerogen, Inc.

  
	
   

  	
  2071 Stierlin
  Court

  
	
   

  	
  Mountain View,
  CA 94043

  
	
   

  	
  Facsimile No.:
  (650) 864-7433

  
	
   

  	
  Attn: Chief
  Financial Officer

  
	
   

  	
   

  
	
  With
  a copy to:

  	
  Cooley
  Godward LLP

  
	
   

  	
  Five Palo Alto Square

  
	
   

  	
  3000 El Camino Real

  
	
   

  	
  Palo Alto, CA 94306

  
	
   

  	
  Attn: Robert J. Brigham, Esq.

  
	
   

  	
  Facsimile No.: 
  (650) 849-7400

  
	
   

  	
   

  
	
  If
  to the Lender:

  	
  To
  the address set forth under the Lender’s name on the signature pages hereto.

  
	
   

  	
   

  
	
  If
  to any other Person who is then the registered Holder:

  
	
   

  	
   

  
	
   

  	
  To the address
  of Holder as it appears in the stock transfer books of the Borrower

  

 

or such other
address as may be designated in writing hereafter, in the same manner, by such
Person.

 

(f)                                    Successors
and Assigns.  This Agreement shall
inure to the benefit of and be binding upon the successors and permitted
assigns of each of the parties and shall inure to the benefit of Holder.  The Borrower may not assign its rights or
obligations hereunder without the prior written consent of each Holder.  Holder may assign its rights hereunder in
the manner and to the Persons as permitted under the Loan Agreement.

 

(g)                                 Execution
and Counterparts.  This Agreement
may be executed in any number of counterparts, each of which when so executed
shall be deemed to be an original and, all of which taken together shall
constitute one and the same Agreement.  In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid binding obligation of the
party executing (or on whose behalf such signature is executed) the same with
the same force and effect as if such facsimile signature were the original
thereof.

 

(h)                                 Governing
Law.  All questions concerning the
construction, validity, enforcement and interpretation of this Agreement shall
be governed by and construed and enforced in accordance with the internal laws
of the State of California, without regard to the principles of conflicts of
law thereof.  Each party agrees that all
Proceedings concerning the 

 

10

 

interpretations,
enforcement and defense of the transactions contemplated by this Agreement
(whether brought against a party hereto or its respective Affiliates, employees
or agents) shall be commenced exclusively in the state and federal courts
sitting in the Northern District of California (the “California Courts”).  Each party hereto hereby irrevocably submits
to the exclusive jurisdiction of the California Courts for the adjudication of
any dispute hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein, 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 California Court, or that such Proceeding
has been commenced in an improper or inconvenient forum.  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 Agreement 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 Proceeding arising out of or relating
to this Agreement or the transactions contemplated hereby.  If either party shall commence a Proceeding
to enforce any provisions of this Agreement, then the prevailing party in such
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.

 

(i)                                     Cumulative
Remedies.  The remedies provided
herein are cumulative and not exclusive of any remedies provided by law.

 

(j)                                     Severability.
If any term, provision, covenant or restriction of this Agreement is held by a
court of competent jurisdiction to be invalid, illegal, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions set forth
herein shall remain in full force and effect and shall in no way be affected,
impaired or invalidated, and the parties hereto shall use their reasonable
efforts to find and employ an alternative means to achieve the same or
substantially the same result as that contemplated by such term, provision,
covenant or restriction.  It is hereby
stipulated and declared to be the intention of the parties that they would have
executed the remaining terms, provisions, covenants and restrictions without
including any of such that may be hereafter declared invalid, illegal, void or
unenforceable.

 

(k)                                  Headings.  The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.

 

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INTENTIONALLY LEFT BLANK

SIGNATURE PAGES TO FOLLOW]

 

11

 

IN WITNESS
WHEREOF, the parties have executed this Registration Rights Agreement as of the
date first written above.

 

	
   

  	
  AEROGEN, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert S. Breuil

  	
   

  
	
   

  	
  Name:

  	
  Robert S. Breuil

  
	
   

  	
  Title:

  	
  Chief Financial Officer

  
					

 

 

[REMAINDER OF PAGE
INTENTIONALLY LEFT BLANK

SIGNATURE PAGE OF LENDER TO FOLLOW]

 

12

 

IN
WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
as of the date first written above.

 

	
   

  	
  LENDER:

  
	
   

  	
   

  
	
   

  	
  Carpenter
  1983 Family Trust UA

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jane E. Shaw

  	
   

  
	
   

  	
   

  	
  Name:  Jane E. Shaw, Ph.D., Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
  Address for Notice:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Peter F. Carpenter

  	
   

  
	
   

  	
   

  	
  Name:  Peter F. Carpenter, Trustee

  
	
   

  	
   

  
	
   

  	
  Address for Notice:

  

 

13

 

Annex A

 

Plan of Distribution

 

The Selling
Stockholders and any of their pledgees, donees, assignees and
successors-in-interest may, from time to time, sell any or all of their shares
of Common Stock on any stock exchange, market or trading facility on which the
shares are traded or in private transactions. 
These sales may be at fixed or negotiated prices.  The Selling Stockholders will act
independently of us in making decisions regarding the timing, manner and size
of each sale. The Selling Stockholders may use any one or more of the following
methods when selling shares:

 

ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;

 

block trades in which the broker-dealer will attempt to sell the shares
as agent but may position and resell a portion of the block as principal to
facilitate the transaction;

 

purchases by a broker-dealer as principal and resale by the
broker-dealer for its account;

 

an exchange distribution in accordance with the rules of the applicable
exchange;

 

privately negotiated transactions;

 

short sales;

 

broker-dealers may agree with the Selling Stockholders to sell a
specified number of such shares at a stipulated price per share;

 

a combination of any such methods of sale; and

 

any other method permitted pursuant to applicable law.

 

The Selling
Stockholders may also sell shares under Rule 144 under the Securities Act, if
available, rather than under this prospectus.

 

Broker-dealers
engaged by the Selling Stockholders may arrange for other brokers-dealers to
participate in sales.  Broker-dealers
may receive commissions or discounts from the Selling Stockholders (or, if any
broker-dealer acts as agent for the purchaser of shares, from the purchaser) in
amounts to be negotiated.  The Selling
Stockholders do not expect these commissions and discounts to exceed what is
customary in the types of transactions involved.

 

The Selling
Stockholders may from time to time pledge or grant a security interest in some
or all of the Shares or Warrant Shares owned by them and, if they default in
the performance of their secured obligations, the pledgees or secured parties
may offer and sell shares of Common Stock from time to time under this
prospectus, or under an amendment to this prospectus under Rule 424(b)(3) or
other applicable provision of the Securities Act of 1933 

 

14

 

amending the list of
selling stockholders to include the pledgee, transferee or other successors in
interest as selling stockholders under this prospectus.

 

Upon the Borrower
being notified in writing by a Selling Stockholder that any material
arrangement has been entered into with a broker-dealer for the sale of Common
Stock through a block trade, special offering, exchange distribution or secondary
distribution or a purchase by a broker or dealer, a supplement to this
prospectus will be filed, if required, pursuant to Rule 424(b) under the
Securities Act, disclosing (i) the name of each such Selling Stockholder and of
the participating broker-dealer(s), (ii) the number of shares involved, (iii)
the price at which such the shares of Common Stock were sold, (iv) the
commissions paid or discounts or concessions allowed to such broker-dealer(s),
where applicable, (v) that such broker-dealer(s) did not conduct any
investigation to verify the information set out or incorporated by reference in
this prospectus, and (vi) other facts material to the transaction.  In addition, upon the Borrower being
notified in writing by a Selling Stockholder that a donee or pledge intends to
sell more than 500 shares of Common Stock, a supplement to this prospectus will
be filed if then required in accordance with applicable securities law.

 

The Selling
Stockholders also may transfer the shares of common stock in other circumstances,
in which case the transferees, pledgees or other successors in interest will be
the selling beneficial owners for purposes of this prospectus.

 

The Selling
Stockholders and any broker-dealers or agents that are involved in selling the
shares may be deemed to be “underwriters” within the meaning of the Securities
Act in connection with such sales.  In
such event, any commissions received by such broker-dealers or agents and any
profit on the resale of the shares purchased by them may be deemed to be
underwriting commissions or discounts under the Securities Act.  Because the Selling Stockholders may be
deemed to be “underwriters” within the meaning of the Securities Act, the
Selling Stockholders will be subject to the prospectus delivery requirements of
the Securities Act. Each Selling Stockholders has represented and warranted to
the Borrower that it does not have any agreement or understanding, directly or
indirectly, with any person to distribute the Common Stock.

 

The Borrower is
required to pay all fees and expenses incident to the registration of the
shares.  The Borrower has agreed to
indemnify the Selling Stockholders against certain losses, claims, damages and
liabilities, including liabilities under the Securities Act.

 

15Exhibit
10.23

 

NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH
THESE SECURITIES ARE EXERCISABLE HAVE 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 COMPANY.  THESE
SECURITIES AND THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES MAY BE
PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT SECURED BY SUCH
SECURITIES.

 

AEROGEN, INC.

 

WARRANT

 

Date of Original
Issuance: January 23, 2004

 

Aerogen,
Inc., a Delaware corporation (the “Company”), hereby certifies that, for
value received, the Carpenter 1983 Family Trust UA or its registered assigns
(the “Holder”),
is entitled to purchase from the Company up to a total of 82,129 shares of common
stock (in accordance with the Warrant Shares Exercise Log referenced in
Section 5(a) below), par value $0.001 per share, (the “Common Stock”) of the
Company (each such share, a “Warrant Share” and all such shares, the “Warrant
Shares”) at an exercise price equal to $3.044 per share (as adjusted
from time to time as provided in Section 9, the “Exercise Price”), at any
time and from time to time beginning on July 26, 2004 and ending
January 23, 2008 (the “Expiration Date”), and subject to the
following terms and conditions:

 

1.                                      Definitions.  In addition to the terms defined elsewhere
in this Warrant, capitalized terms that are not otherwise defined herein shall
have the meanings given to such terms in the Loan and Securities Purchase
Agreement of even date herewith to which the Company and the original Holder
are parties (the “Purchase Agreement”).

 

2.                                      Registration
of Warrant.  The Company shall
register this Warrant, upon records to be maintained by the Company for that
purpose (the “Warrant Register”), in the name of the record Holder hereof
from time to time.  The Company may deem
and treat the registered Holder of this Warrant as the absolute owner hereof
for the purpose of any exercise hereof or any distribution to the Holder, and
for all other purposes, absent actual notice to the contrary.

 

 

3.                                      Registration
of Transfers.  The Company shall
register the transfer of any portion of this Warrant in the Warrant Register,
upon surrender of this Warrant, with the Form of Assignment attached hereto
duly completed and signed, to the Company at its address specified herein.  Upon any such registration or transfer, a
new Warrant to purchase Common Stock, in substantially the form of this Warrant
(any such new Warrant, a “New Warrant”), evidencing the portion of this
Warrant so transferred shall be issued to the transferee and a New Warrant
evidencing the remaining portion of this Warrant not so transferred, if any,
shall be issued to the transferring Holder. The acceptance of the New Warrant
by the transferee thereof shall be deemed the acceptance by such transferee of
all of the rights and obligations of a holder of a Warrant.

 

4.                                      Exercise
and Duration of Warrants.  This
Warrant shall be exercisable by the registered Holder at any time and from time
to time on or after July 26, 2004 to and including the Expiration
Date.  At 5:00 p.m., California time on
the Expiration Date, the portion of this Warrant not exercised prior thereto
shall be and become void and of no value, provided, that if the closing
sales price of the Common Stock on the Expiration Date is greater than 102% of
the Exercise Price on the Expiration Date, then this Warrant shall be deemed to
have been exercised in full (to the extent not previously exercised) on a
“cashless exercise” basis at 5:00 P.M. California time on the Expiration Date.
The Company may not call or redeem all or any portion of this Warrant without
the prior written consent of the Holder.

 

5.                                      Delivery
of Warrant Shares.

 

(a)                                  To
effect conversions hereunder, the Holder shall not be required to physically
surrender this Warrant unless the aggregate Warrant Shares represented by this
Warrant is being exercised.  Upon
delivery of the Exercise Notice to the Company (with the attached Warrant
Shares Exercise Log) at its address for notice set forth herein and upon
payment of the Exercise Price multiplied by the number of Warrant Shares that
the Holder intends to purchase hereunder, the Company shall promptly (but in no
event later than five Trading Days after the Date of Exercise (as defined
herein)) issue and deliver to the Holder, a certificate for the Warrant Shares
issuable upon such exercise.  The
Company shall, upon request of the Holder and subsequent to the date on which a
registration statement covering the resale of the Warrant Shares has been
declared effective by the Securities and Exchange Commission, use its best
efforts to deliver Warrant Shares hereunder electronically through the
Depository Trust Corporation or another established clearing corporation
performing similar functions,  if
available, provided, that, the Company may, but will not be required to change
its transfer agent if its current transfer agent cannot deliver Warrant Shares
electronically through the Depository Trust Corporation.  A “Date of Exercise” means the date on which
the Holder shall have delivered to Company: (i) the Exercise Notice (with the
Warrant Exercise Log attached to it), appropriately completed and duly signed
and (ii) if such Holder is not utilizing the cashless exercise provisions set
forth in this Warrant, payment of the Exercise Price for the number of Warrant
Shares so indicated by the Holder to be purchased.

 

(b)                                  If
by the fifth Trading Day after a Date of Exercise the Company fails to deliver
the required number of Warrant Shares in the manner required pursuant to
Section 5(a), then the Holder will have the right to rescind such exercise

 

2

 

(c)                                  The
Company’s obligations to issue and deliver Warrant Shares in accordance with
the terms hereof are absolute and unconditional, irrespective of any action or
inaction by the Holder to enforce the same, any waiver or consent with respect
to any provision hereof, the recovery of any judgment against any Person or any
action to enforce the same, or any setoff, counterclaim, recoupment, limitation
or termination, or any breach or alleged breach by the Holder or any other
Person of any obligation to the Company or any violation or alleged violation
of law by the Holder or any other Person, and irrespective of any other
circumstance which might otherwise limit such obligation of the Company to the
Holder in connection with the issuance of Warrant Shares.  Nothing herein shall limit a Holder’s right
to pursue any other remedies available to it hereunder, at law or in equity
including, without limitation, a decree of specific performance and/or
injunctive relief with respect to the Company’s failure to timely deliver
certificates representing shares of Common Stock upon exercise of the Warrant  as required pursuant to the terms hereof.

 

6.                                      Charges,
Taxes and Expenses.  Issuance and
delivery of certificates for shares of Common Stock upon exercise of this
Warrant shall be made without charge to the Holder for any issue or transfer
tax, withholding tax, transfer agent fee or other incidental tax or expense in
respect of the issuance of such certificates, all of which taxes and expenses
shall be paid by the Company; provided, however, that the Company shall not be
required to pay any tax which may be payable in respect of any transfer
involved in the registration of any certificates for Warrant Shares or Warrants
in a name other than that of the Holder. 
The Holder shall be responsible for all other tax liability that may arise
as a result of holding or transferring this Warrant or receiving Warrant Shares
upon exercise hereof.

 

7.                                      Replacement
of Warrant.  If this Warrant is
mutilated, lost, stolen or destroyed, the Company shall issue or cause to be
issued in exchange and substitution for and upon cancellation hereof, or in
lieu of and substitution for this Warrant, a New Warrant, but only upon receipt
of evidence reasonably satisfactory to the Company of such loss, theft or
destruction and customary and reasonable indemnity (which shall not include a
surety bond), if requested.  Applicants
for a New Warrant under such circumstances shall also comply with such other
reasonable regulations and procedures and pay such other reasonable third-party
costs as the Company may prescribe.  If
a New Warrant is requested as a result of a mutilation of this Warrant, then
the Holder shall deliver such mutilated Warrant to the Company as a condition
precedent to the Company’s obligation to issue the New Warrant.

 

8.                                      Reservation
of Warrant Shares.  The Company
covenants that it will at all times reserve and keep available out of the
aggregate of its authorized but unissued and otherwise unreserved Common Stock,
solely for the purpose of enabling it to issue Warrant Shares upon exercise of
this Warrant as herein provided, the number of Warrant Shares which are then
issuable and deliverable upon the exercise of this entire Warrant, free from
preemptive rights or any other contingent purchase rights of persons other than
the Holder (taking into account the adjustments and restrictions of Section 9).
The Company covenants that all Warrant Shares so issuable and deliverable
shall, upon issuance and the payment of the applicable Exercise Price in
accordance with the terms hereof, be duly and validly authorized, issued and
fully paid and nonassessable.

 

3

 

9.                                      Certain
Adjustments.  The Exercise Price and
number of Warrant Shares issuable upon exercise of this Warrant are subject to
adjustment from time to time as set forth in this Section 9.

 

(a)                                  Stock
Dividends and Splits.  If the
Company, at any time while this Warrant is outstanding, (i) pays a stock
dividend on its Common Stock or otherwise makes a distribution on any class of
capital stock that is payable in shares of Common Stock, (ii) subdivides
outstanding shares of Common Stock into a larger number of shares, or (iii)
combines outstanding shares of Common Stock into a smaller number of shares,
then in each such case the Exercise Price shall be multiplied by a fraction of
which the numerator shall be the number of shares of Common Stock outstanding
immediately before such event and of which the denominator shall be the number
of shares of Common Stock outstanding immediately after such event.  Any adjustment made pursuant to clause (i)
of this paragraph shall become effective immediately after the record date for
the determination of stockholders entitled to receive such dividend or
distribution, and any adjustment pursuant to clause (ii) or (iii) of this
paragraph shall become effective immediately after the effective date of such
subdivision or combination. If any event requiring an adjustment under this
paragraph occurs during the period that an Exercise Price is calculated
hereunder, then the calculation of such Exercise Price shall be adjusted
appropriately to reflect such event.

 

(b)                                  Fundamental
Transactions.  Subject to the
provisions of this paragraph, if, at any time while this Warrant is
outstanding, (1) the Company effects any merger or consolidation of the Company
with or into another Person, (2) the Company effects any sale of all or
substantially all of its assets in one or a series of related transactions, (3)
any tender offer or exchange offer (whether by the Company or another Person)
is completed pursuant to which holders of Common Stock are permitted to tender
or exchange their shares for other securities, cash or property, or (4) the
Company effects any reclassification of the Common Stock or any compulsory
share exchange pursuant to which the Common Stock is effectively converted into
or exchanged for other securities, cash or property (in any such case, a “Fundamental
Transaction”), then the Holder shall have the right thereafter to
receive, upon exercise of this Warrant, the same amount and kind of securities,
cash or property as it would have been entitled to receive upon the occurrence
of such Fundamental Transaction if it had been, immediately prior to such
Fundamental Transaction, the holder of the number of Warrant Shares then
issuable upon exercise in full of this Warrant (the “Alternate Consideration”).  For purposes of any such exercise, the
determination of the Exercise Price shall be appropriately adjusted to apply to
such Alternate Consideration based on the amount of Alternate Consideration
issuable in respect of one share of Common Stock in such Fundamental
Transaction, and the Company shall apportion the Exercise Price among the
Alternate Consideration in a reasonable manner reflecting the relative value of
any different components of the Alternate Consideration.  If holders of Common Stock are given any
choice as to the securities, cash or property to be received in a Fundamental
Transaction, then the Holder shall be given the same choice as to the Alternate
Consideration it receives upon any exercise of this Warrant following such
Fundamental Transaction.  The successor
to the Company or surviving entity in such Fundamental Transaction shall,
either (1) issue to the Holder a new warrant substantially in the form of this
Warrant and consistent with the foregoing provisions and evidencing the
Holder’s right to purchase the Alternate Consideration for the aggregate
Exercise Price upon exercise 

 

4

 

thereof, or (2)
purchase the Warrant from the Holder for a purchase price, payable in cash
within five Trading Days after the consummation of the Fundamental
Transaction), equal to the Black Scholes value of the remaining unexercised
portion of this Warrant on the date of such request. The terms of any agreement
pursuant to which a Fundamental Transaction is effected shall include terms
requiring any such successor or surviving entity to comply with the provisions
of this paragraph (c) and insuring that the Warrant (or any such replacement
security) will be similarly adjusted upon any subsequent transaction analogous
to a Fundamental Transaction.

 

(c)                                  Number
of Warrant Shares.  Simultaneously
with any adjustment to the Exercise Price pursuant to paragraph (a) of this
Section, the number of Warrant Shares that may be purchased upon exercise of
this Warrant shall be increased or decreased proportionately, so that after
such adjustment the aggregate Exercise Price payable hereunder for the adjusted
number of Warrant Shares shall be the same as the aggregate Exercise Price in
effect immediately prior to such adjustment.

 

(d)                                  Calculations.  All calculations under this Section 9
shall be made to the nearest cent or the nearest share, as applicable.  The number of shares of Common Stock
outstanding at any given time shall not include shares owned or held by or for
the account of the Company, and the disposition of any such shares shall be
considered an issue or sale of Common Stock.

 

(e)                                  Notice
of Adjustments.  Upon the occurrence
of each adjustment pursuant to this Section 9, the Company at its
expense will promptly compute such adjustment in accordance with the terms of
this Warrant and prepare a certificate setting forth such adjustment, including
a statement of the adjusted Exercise Price and adjusted number or type of
Warrant Shares or other securities issuable upon exercise of this Warrant (as
applicable), describing the transactions giving rise to such adjustments and
showing in detail the facts upon which such adjustment is based.  Upon written request, the Company will
promptly deliver a copy of each such certificate to the Holder and to the
Company’s Transfer Agent.

 

(f)                                    Notice
of Corporate Events.  If the Company
(i) declares a dividend or any other distribution of cash, securities or other
property in respect of its Common Stock, including without limitation any
granting of rights or warrants to subscribe for or purchase any capital stock
of the Company or any Subsidiary, (ii) authorizes or approves, enters into any
agreement contemplating or solicits stockholder approval for any Fundamental
Transaction or (iii) authorizes the voluntary dissolution, liquidation or
winding up of the affairs of the Company, then the Company shall deliver to the
Holder a notice describing the material terms and conditions of such
transaction, at least 20 calendar days for transactions described in
subsections (i) and (iii), above and at least 10 calendar days for transactions
described in subsection (ii) above, prior to the applicable record or
effective date on which a Person would need to hold Common Stock in order to
participate in or vote with respect to such transaction, and the Company will
take all steps reasonably necessary in order to insure that the Holder is given
the practical opportunity to exercise this Warrant prior to such time so as to
participate in or vote with respect to such transaction; provided, however,
that the failure to deliver such notice or any defect therein shall not affect
the validity of the corporate action required to be described in such notice.

 

5

 

10.                               Payment
of Exercise Price. The Holder may pay the Exercise Price in one of the
following manners:

 

(a)                                  Cash
Exercise.  The Holder may deliver
immediately available funds; or

 

(b)                                  Cashless
Exercise.  The Holder may notify the
Company in an Exercise Notice of its election to utilize cashless exercise, in
which event the Company shall issue to the Holder the number of Warrant Shares
determined as follows:

 

X = Y [(A-B)/A]

 

where:

 

X = the number of
Warrant Shares to be issued to the Holder.

 

Y = the number of
Warrant Shares with respect to which this Warrant is being exercised.

 

A = the average of
the closing prices for the five Trading Days immediately prior to (but not
including) the Exercise Date.

 

B = the Exercise
Price.

 

For purposes of
Rule 144 promulgated under the Securities Act, it is intended, understood and
acknowledged that the Warrant Shares issued in a cashless exercise transaction
shall be deemed to have been acquired by the Holder, and the holding period for
the Warrant Shares shall be deemed to have commenced, on the date this Warrant
was originally issued.

 

11.                               No
Fractional Shares.  No fractional
shares of Warrant Shares will be issued in connection with any exercise of this
Warrant.  All issued shares shall be
rounded to the nearest whole share.

 

12.                               Notices.  Any and all notices or other communications
or deliveries hereunder (including, without limitation, any Exercise Notice)
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 5:00
p.m. (California 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 5:00 p.m. (California 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 Company, to Aerogen, Inc.,
2071 Stierlin Court, Mountain View, CA 94043, Attn: Chief Financial Officer, Facsimile No. (650) 864-7433, or (ii)
if to the Holder, to the address or facsimile number appearing on the Warrant
Register or such other address or facsimile number as the Holder may provide to
the Company in accordance with this Section.

 

6

 

13.                               Warrant
Agent.  The Company shall serve as
warrant agent under this Warrant.  Upon
30 days’ notice to the Holder, the Company may appoint a new warrant agent.  Any corporation into which the Company or any
new warrant agent may be merged or any corporation resulting from any
consolidation to which the Company or any new warrant agent shall be a party or
any corporation to which the Company or any new warrant agent transfers
substantially all of its corporate trust or shareholders services business
shall be a successor warrant agent under this Warrant without any further
act.  Any such successor warrant agent
shall promptly cause notice of its succession as warrant agent to be mailed (by
first class mail, postage prepaid) to the Holder at the Holder’s last address
as shown on the Warrant Register.

 

14.                               Miscellaneous.

 

(a)                                  This
Warrant shall be binding on and inure to the benefit of the parties hereto and
their respective successors and assigns. 
Subject to the preceding sentence, nothing in this Warrant shall be
construed to give to any Person other than the Company and the Holder any legal
or equitable right, remedy or cause of action under this Warrant.  This Warrant may be amended only in writing
signed by the Company and the Holder and their successors and assigns.

 

(b)                                  All
questions concerning the construction, validity, enforcement and interpretation
of this Warrant shall be governed by and construed and enforced in accordance
with the internal laws of the State of California, without regard to the
principles of conflicts of law thereof. 
Each party agrees that all legal proceedings concerning the
interpretations, enforcement and defense of this Warrant and the transactions
herein contemplated (“Proceedings”) (whether brought against a
party hereto or its respective Affiliates, employees or agents) shall be
commenced exclusively in the state and federal courts sitting in the Northern
District of California (the “California Courts”).  Each party hereto hereby irrevocably submits
to the exclusive jurisdiction of the California Courts for the adjudication of
any dispute hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein, 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 California Court, or that such Proceeding
has been commenced in an improper or inconvenient forum. 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 Warrant 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 arising out of or
relating to this Warrant or the transactions contemplated hereby.  If either party shall commence a Proceeding
to enforce any provisions of this Warrant, then the prevailing party in such
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.

 

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

 

7

 

(d)                                  In
case any one or more of the provisions of this Warrant shall be invalid or
unenforceable in any respect, the validity and enforceability of the remaining
terms and provisions of this Warrant 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 Warrant.

 

[REMAINDER OF PAGE
INTENTIONALLY LEFT BLANK,

SIGNATURE PAGE FOLLOWS]

 

8

 

IN
WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by its
authorized officer as of the date first indicated above.

 

 

	
   

  	
   

  	
  Aerogen,
  Inc.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Robert S.
  Breuil

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Robert S. Breuil

  	
   

  
	
   

  	
   

  	
  Title:

  	
   Chief
  Financial Officer

  	
   

  
								

 

9

 

EXERCISE NOTICE

 

To Aerogen, Inc.:

 

The
undersigned hereby irrevocably elects to purchase 
                          
shares of common stock, par value $0.001 per share, of Aerogen, Inc. (“Common
Stock”), pursuant to Warrant No.     ,
originally issued January     , 2004 (the “Warrant”),
and, if such Holder is not utilizing the cashless exercise provisions set forth
in the Warrant, encloses herewith
$                
in cash, certified or official bank check or checks or other immediately
available funds, which sum represents the aggregate Exercise Price (as defined
in the Warrant) for the number of shares of Common Stock to which this Exercise
Notice relates, together with any applicable taxes payable by the undersigned
pursuant to the Warrant.

 

By its
delivery of this Exercise Notice, the undersigned represents and warrants to
the Company that in giving effect to the exercise evidenced hereby the Holder
will not beneficially own in excess of the number of shares of Common Stock
(determined in accordance with Section 13(d) of the Securities Exchange
Act of 1934) permitted to be owned under Section 11 of this Warrant to
which this notice relates.

 

The
undersigned requests that certificates for the shares of Common Stock issuable
upon this exercise be issued in the name of

 

 

PLEASE INSERT SOCIAL SECURITY OR

TAX IDENTIFICATION NUMBER

 

 

(Please print name
and address)

 

 

Warrant Shares Exercise
Log

 

	
  Date

  	
   

  	
  Number of Warrant

  Shares Available to be

  Exercised

  	
   

  	
  Number of Warrant Shares

  Exercised

  	
   

  	
  Number of

  Warrant Shares

  Remaining to

  be Exercised

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

FORM OF
ASSIGNMENT

 

[To be
completed and signed only upon transfer of Warrant]

 

FOR
VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
                                                                
the right represented by the within Warrant to purchase 
                        
shares of Common Stock of Aerogen, Inc. to which the within Warrant relates and
appoints
                                
attorney to transfer said right on the books of the Company with full power of
substitution in the premises.

 

	
  Dated:

  	
   

  	
  ,

  	
   

  	
   

  
	
   

  
	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Signature must conform in all respects to name of
  holder as specified on the face of the Warrant)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address of Transferee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
							

 

 

	
  In the presence of:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00060-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00060-of-00352.parquet"}]]