<PAGE>
Exhibit 4.15
NO. CW-____
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT
AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT') OR ANY STATE SECURITIES LAWS. SUCH SECURITIES MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL
REGISTERED UNDER THE ACT OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT SUCH REGISTRATION IS
NOT REQUIRED.
WARRANT TO PURCHASE UP TO _____ SHARES
OF COMMON STOCK OF
INHALE THERAPEUTIC SYSTEMS, INC.
This certifies that _____________________, or its assigns (the
"Holder"), for value received, is entitled to purchase from INHALE
THERAPEUTIC SYSTEMS, INC. a Delaware corporation located at 150 Industrial
Road, San Carlos CA 94070 (the "Company"), a number of shares of fully paid
and nonassessable shares of the Company's Common Stock ("Common Stock") as
determined in accordance with Section 1 hereof, not to exceed _____ shares
(the "Maximum Shares"), for cash at a price equal to $_______ (the "Stock
Purchase Price") at such times as determined in accordance with Section 2
hereof and, with respect to any Vested Shares (as defined herein) prior to
the earlier of (i) the closing (after the Exercise Date (as defined herein)
with respect to such Vested Shares) of (A) a sale of substantially all of the
assets of the Company; (B) a merger or consolidation in which the Company is
not the surviving corporation (other than a merger or consolidation in which
shareholders immediately before the merger or consolidation have, immediately
after the merger or consolidation, greater stock voting power); (C) a reverse
merger in which the Company is the surviving corporation but the shares of
the Company's common stock outstanding immediately preceding the merger are
converted by virtue of the merger into other property, whether in the form of
securities, cash or otherwise (other than a reverse merger in which
stockholders immediately before the merger have, immediately after the
merger, greater stock voting power); or (D) any transaction or series of
related transactions in which in excess of 50% of the Company's voting power
is transferred (a "Change of Control") or (ii) six (6) years from such
Exercise Date, such earlier day being referred to herein as the "Expiration
Date," upon surrender to the Company at its principal office (or at such
other location as the Company may advise the Holder in writing) of this
Warrant properly endorsed with the Form of Subscription attached hereto duly
filled in and signed and upon payment in cash or by check of the aggregate
Stock Purchase Price for the number of shares for which this Warrant is being
exercised determined in accordance with the provisions hereof.
<PAGE>
Capitalized terms used herein and not defined shall have the meaning set
forth in the Agreement of Limited Partnership of Inhale 201 Industrial Road,
L.P. (the "Partnership Agreement"). This Warrant is subject to the following
terms and conditions:
1. VESTED SHARES. At any given time, this Warrant shall be exercisable for
only such number of shares of Common Stock that are "Vested Shares." At any time
during the term of this Warrant, the number of Vested Shares shall be determined
by the following equation:
V = (P*M) - E
Where V = the number of Vested Shares;
P = the total percentage of the Holder's (or Holder's
successor in interests) Limited Partnership interests
which have been purchased pursuant to the exercise of
the Option under the Warrant Payment Alternative set
forth in Section 20 of the Partnership Agreement;
M = the Maximum Shares (as adjusted pursuant to Section 6
hereof); and
E = the number of shares previously issued upon
exercise of this Warrant (or any predecessor
Warrant), including any additional shares canceled as
a result of any exercise pursuant to Section 3
hereof, (as adjusted for stock dividends,
combinations, splits and recapitalizations and the
like with respect to such shares).
For purposes of example only, attached as Exhibit A hereto are hypothetical
examples of the calculation of Vested Shares.
2. EXERCISE DATE. This Warrant is exercisable at the option of the holder
of record hereof, at any time or from time to time after the Exercise Date with
respect to the Vested Shares being acquired and prior to the Expiration Date
with respect to such Vested Shares for all or any part of the Vested Shares (but
not for a fraction of a share) which may be purchased hereunder. The Exercise
Date with respect to any shares issuable pursuant to this Warrant shall be the
date which such shares shall initially become Vested Shares. To the extent this
Warrant is exercised in part, the Holder shall be deemed to have acquired those
Vested Shares with the earliest Exercise Date first (provided such exercise is
prior to the Expiration Date with respect to such Vested Shares).
3. NET ISSUE EXERCISE. Notwithstanding any provisions herein to the
contrary, if the fair market value of one share of the Company's Common Stock is
greater than the Stock Purchase Price (at the date of calculation as set forth
below), in lieu of exercising this Warrant for cash, the Holder may elect to
receive shares equal to the value (as determined below) of this Warrant (or the
portion thereof being canceled) by surrender of this Warrant at the principal
office of the Company together with the properly endorsed Form of Subscription
and notice of
2.
<PAGE>
such election in which event the Company shall issue to the Holder
a number of shares of Common Stock computed using the following formula:
X = Y (A-B)
-------
A
Where X = the number of shares of Common Stock to be issued to the Holder
Y = the number of shares of Common Stock
purchasable under the Warrant or, if only a
portion of the Warrant is being exercised, the
portion of the Warrant being canceled (at the
date of such calculation)
A = the fair market value of one share of the
Company's Common Stock (at the date of such
calculation)
B = Stock Purchase Price (as adjusted to the date
of such calculation)
For purposes of the above calculation, fair market value of one share of Common
Stock shall be the average closing price of the Company's Common Stock for the
ten trading days preceding the date of exercise.
4. EXERCISE; ISSUANCE OF CERTIFICATES; PAYMENT FOR SHARES. The Company
agrees that the shares of Common Stock purchased under this Warrant shall be and
are deemed to be issued to the Holder hereof as the record owner of such shares
as of the close of business on the date on which this Warrant shall have been
surrendered, properly endorsed, the completed, executed Form of Subscription
delivered and payment made for such shares. Certificates for the shares of
Common Stock so purchased, together with any other securities or property to
which the Holder hereof is entitled upon such exercise, shall be delivered to
the Holder hereof by the Company at the Company's expense within a reasonable
time after the rights represented by this Warrant have been so exercised. In
case of a purchase of less than all the shares which may be purchased under this
Warrant, the Company shall cancel this Warrant and execute and deliver a new
Warrant or Warrants of like tenor for the balance of the shares purchasable
under the Warrant surrendered upon such purchase to the Holder hereof within a
reasonable time. Each stock certificate so delivered shall be in such
denominations of Common Stock as may be requested by the Holder hereof and shall
be registered in the name of such Holder.
5. SHARES TO BE FULLY PAID; RESERVATION OF SHARES. The Company covenants
and agrees that all shares of Common Stock which may be issued upon the exercise
of the rights represented by this Warrant will, upon issuance, be duly
authorized, validly issued, fully paid and nonassessable and free from all
preemptive rights of any shareholder and free of all taxes, liens and charges
with respect to the issue thereof. The Company further covenants and agrees
that, during the period within which the rights represented by this Warrant may
be exercised, the Company will at all times have authorized and reserved, for
the purpose of issue or
3.
<PAGE>
transfer upon exercise of the subscription rights evidenced by this Warrant, a
sufficient number of shares of authorized but unissued Common Stock, or other
securities and property, when and as required to provide for the exercise of the
rights represented by this Warrant. The Company will take all such action as may
be necessary to assure that such shares of Common Stock may be issued as
provided herein without violation of any applicable law or regulation, or of any
requirements of any domestic securities exchange upon which the Common Stock may
be listed; provided, however, that the Company shall not be required to effect a
registration under Federal or State securities laws with respect to such
exercise. The Company will not take any action which would result in any
adjustment of the Stock Purchase Price (as set forth in Section 6 hereof) if the
total number of shares of Common Stock issuable after such action upon exercise
of all outstanding warrants, together with all shares of Common Stock then
outstanding and all shares of Common Stock then issuable upon exercise of all
options and upon the conversion of all convertible securities then outstanding,
would exceed the total number of shares of Common Stock then authorized by the
Company's Restated Certificate of Incorporation.
6. ADJUSTMENT OF STOCK PURCHASE PRICE AND NUMBER OF SHARES. The Stock
Purchase Price and the number of shares purchasable upon the exercise of this
Warrant shall be subject to adjustment from time to time upon the occurrence of
certain events described in this Section 6. Upon each adjustment of the Stock
Purchase Price, the Holder of this Warrant shall thereafter be entitled to
purchase, at the Stock Purchase Price resulting from such adjustment, the number
of shares obtained by multiplying the Stock Purchase Price in effect immediately
prior to such adjustment by the number of shares purchasable pursuant hereto
immediately prior to such adjustment, and dividing the product thereof by the
Stock Purchase Price resulting from such adjustment.
6.1 SUBDIVISION OR COMBINATION OF COMMON STOCK. In case the Company
shall at any time subdivide its outstanding shares of Common Stock into a
greater number of shares, the Stock Purchase Price in effect immediately prior
to such subdivision shall be proportionately reduced, and conversely, in case
the outstanding shares of Common Stock of the Company shall be combined into a
smaller number of shares, the Stock Purchase Price in effect immediately prior
to such combination shall be proportionately increased.
6.2 DIVIDENDS IN COMMON STOCK, OTHER STOCK, PROPERTY, RECLASSIFICATION.
If at any time or from time to time the holders of Common Stock (or any shares
of stock or other securities at the time receivable upon the exercise of this
Warrant) shall have received or become entitled to receive, without payment
therefor,
(A) Common Stock or any shares of stock or other securities which
are at any time directly or indirectly convertible into or exchangeable for
Common Stock, or any rights or options to subscribe for, purchase or otherwise
acquire any of the foregoing by way of dividend or other distribution,
(B) any cash paid or payable otherwise than as a cash dividend, or
4.
<PAGE>
(C) Common Stock or additional stock or other securities or property
(including cash) by way of spinoff, split-up, reclassification, combination of
shares or similar corporate rearrangement, (other than shares of Common Stock
issued as a stock split or adjustments in respect of which shall be covered by
the terms of Section 6.1 above), then and in each such case, the Holder hereof
shall, upon the exercise of this Warrant, be entitled to receive, in addition to
the number of shares of Common Stock receivable thereupon, and without payment
of any additional consideration therefor, the amount of stock and other
securities and property (including cash in the cases referred to in clause (b)
above and this clause (c)) which such Holder would hold on the date of such
exercise had he been the holder of record of such Common Stock as of the date on
which holders of Common Stock received or became entitled to receive such shares
or all other additional stock and other securities and property.
6.3 REORGANIZATION, RECLASSIFICATION, CONSOLIDATION, MERGER OR SALE. If
any recapitalization, reclassification or reorganization of the capital stock of
the Company, or any consolidation or merger of the Company with another
corporation, or sale of all or substantially all of the Company's assets or
other transaction (other than a Change in Control which occurs after the
Exercise Date) shall be effected in such a way that holders of Common Stock
shall be entitled to receive stock, securities, or other assets or property (an
"Organic Change"), then, as a condition of such Organic Change, lawful and
adequate provisions shall be made by the Company whereby the Holder hereof shall
thereafter have the right to purchase and receive (in lieu of the shares of the
Common Stock of the Company immediately theretofore purchasable and receivable
upon the exercise of the rights represented hereby) such shares of stock,
securities or other assets or property as may be issued or payable with respect
to or in exchange for a number of outstanding shares of such Common Stock equal
to the number of shares of such stock immediately theretofore purchasable and
receivable upon the exercise of the rights represented hereby. In the event of
any Organic Change, appropriate provision shall be made by the Company with
respect to the rights and interests of the Holder of this Warrant to the end
that the provisions hereof (including, without limitation, provisions for
adjustments of the Stock Purchase Price and of the number of shares purchasable
and receivable upon the exercise of this Warrant) shall thereafter be
applicable, in relation to any shares of stock, securities or assets thereafter
deliverable upon the exercise hereof.
6.4 CERTAIN EVENTS. If any change in the outstanding Common Stock of the
Company or any other event occurs as to which the other provisions of this
Section 6 are not strictly applicable or if strictly applicable would not fairly
protect the purchase rights of the Holder of the Warrant in accordance with such
provisions, then the Board of Directors of the Company shall make an adjustment
in the number and class of shares available under the Warrant, the Stock
Purchase Price or the application of such provisions, so as to protect such
purchase rights as aforesaid. The adjustment shall be such as will give the
Holder of the Warrant upon exercise for the same aggregate Stock Purchase Price
the total number, class and kind of shares as the Holder would have owned had
the Warrant been exercised prior to the event and had the Holder continued to
hold such shares until after the event requiring adjustment.
5.
<PAGE>
6.5 NOTICES OF CHANGE. The Company shall give written notice to the
Holder at least 10 business days prior to the date on which a Change of Control
or Organic Change shall take place.
7. REPRESENTATIONS AND WARRANTIES OF THE HOLDER
7.1 PURCHASE FOR OWN ACCOUNT. Holder represents that it is acquiring the
Warrant and the Common Stock issuable upon exercise of the Warrant
(collectively, the "SECURITIES") solely for its own account and beneficial
interest for investment and not for sale or with a view to distribution of the
Securities or any part thereof, has no present intention of selling (in
connection with a distribution or otherwise), granting any participation in, or
otherwise distributing the same, and does not presently have reason to
anticipate a change in such intention.
7.2 INFORMATION AND SOPHISTICATION. Holder acknowledges that it has
received all the information it has requested from the Company and it considers
necessary or appropriate for deciding whether to acquire the Securities. Holder
represents that it has had an opportunity to ask questions and receive answers
from the Company regarding the terms and conditions of the offering of the
Securities and to obtain any additional information necessary to verify the
accuracy of the information given the Holder. Holder further represents that it
has such knowledge and experience in financial and business matters that it is
capable of evaluating the merits and risk of this investment.
7.3 ABILITY TO BEAR ECONOMIC RISK. Holder acknowledges that investment
in the Securities involves a high degree of risk, and represents that it is
able, without materially impairing its financial condition, to hold the
Securities for an indefinite period of time and to suffer a complete loss of its
investment.
7.4 FURTHER LIMITATIONS ON DISPOSITION. Without in any way limiting the
representations set forth above, Holder further agrees not to make any
disposition of all or any portion of the Securities unless and until:
(A) There is then in effect a Registration Statement under the Act
covering such proposed disposition and such disposition is made in accordance
with such Registration Statement; or
(B) Holder shall have notified the Company of the proposed
disposition and shall have furnished the Company with a detailed statement of
the circumstances surrounding the proposed disposition, and if reasonably
requested by the Company, Holder shall have furnished the Company with an
opinion of counsel, reasonably satisfactory to the Company, that such
disposition will not require registration under the Act or any applicable state
securities laws.
(C) Notwithstanding the provisions of paragraphs (a) and (b) above,
no such registration statement or opinion of counsel shall be necessary for a
transfer by gift, will or
6.
<PAGE>
intestate succession to any spouse or lineal descendants or ancestors, if all
transferees agree in writing to be subject to the terms hereof to the same
extent as if they were Holder hereunder.
(D) Each certificate representing Securities shall (unless otherwise
permitted by the provisions of the Agreement) be stamped or otherwise imprinted
with a legend substantially similar to the following (in addition to any legend
required under applicable state securities laws):
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") OR ANY STATE SECURITIES
LAWS. SUCH SECURITIES MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED,
ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT
OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL SATISFACTORY TO
THE COMPANY AND ITS COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED.
(E) The Company shall be obligated to reissue promptly unlegended
certificates at the request of any Holder if the Holder shall have obtained an
opinion of counsel (which counsel may be counsel to the Company) reasonably
acceptable to the Company to the effect that the Securities proposed to be
disposed of may lawfully be so disposed of without registration, qualification
or legend. The Company shall pay the reasonable fees and expenses of such
counsel in rendering such opinion, not to exceed $5,000.
7.5 ACCREDITED INVESTOR STATUS. Holder is an "ACCREDITED INVESTOR" as
such term is defined in Rule 501 of Regulation D promulgated under the Act.
7.6 FURTHER ASSURANCES. Holder agrees and covenants that at any time and
from time to time it will promptly execute and deliver to the Company such
further instruments and documents and take such further action as the Company
may reasonably require in order to carry out the full intent and purpose of this
Agreement.
8. ISSUE TAX. The issuance of certificates for shares of Common Stock upon
the exercise of the Warrant shall be made without charge to the Holder of the
Warrant for any issue tax (other than any applicable income taxes) in respect
thereof; 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 issuance and
delivery of any certificate in a name other than that of the then Holder of the
Warrant being exercised.
9. CLOSING OF BOOKS. The Company will at no time close its transfer books
against the transfer of any warrant or of any shares of Common Stock issued or
issuable upon the exercise of any warrant in any manner which interferes with
the timely exercise of this Warrant.
7.
<PAGE>
10. NO VOTING OR DIVIDEND RIGHTS; LIMITATION OF LIABILITY. Nothing
contained in this Warrant shall be construed as conferring upon the Holder
hereof the right to vote or to consent or to receive notice as a shareholder of
the Company or any other matters or any rights whatsoever as a shareholder of
the Company. No dividends or interest shall be payable or accrued in respect of
this Warrant or the interest represented hereby or the shares purchasable
hereunder until, and only to the extent that, this Warrant shall have been
exercised. No provisions hereof, in the absence of affirmative action by the
Holder to purchase shares of Common Stock, and no mere enumeration herein of the
rights or privileges of the holder hereof, shall give rise to any liability of
such Holder for the Stock Purchase Price or as a shareholder of the Company,
whether such liability is asserted by the Company or by its creditors.
11. MARKET STAND-OFF AGREEMENT. Holder shall not sell, dispose of,
transfer, make any short sale of, grant any option for the purchase of, or enter
into any hedging or similar transaction with the same economic effect as a sale,
any Common Stock or other securities of the Company held by Holder, (the
"Restricted Securities"), for a period of time specified by the managing
underwriter (not to exceed one hundred eighty (180) days) following the
effective date of a registration statement of the Company filed under the Act.
Holder agrees to execute and deliver such other agreements as may be reasonably
requested by the Company and/or the managing underwriter which are consistent
with the foregoing or which are necessary to give further effect thereto. In
order to enforce the foregoing covenant, the Company may impose stop-transfer
instructions with respect to Holder's Restricted Securities until the end of
such period.
12. WARRANTS TRANSFERABLE. Subject to compliance with applicable federal
and state securities laws, this Warrant and all rights hereunder are
transferable, in whole or in part, without charge to the holder hereof (except
for transfer taxes), upon surrender of this Warrant properly endorsed. Each
taker and holder of this Warrant, by taking or holding the same, consents and
agrees that this Warrant, when endorsed in blank, shall be deemed negotiable,
and that the holder hereof, when this Warrant shall have been so endorsed, may
be treated by the Company, at the Company's option, and all other persons
dealing with this Warrant as the absolute owner hereof for any purpose and as
the person entitled to exercise the rights represented by this Warrant, or to
the transfer hereof on the books of the Company any notice to the contrary
notwithstanding; but until such transfer on such books, the Company may treat
the registered owner hereof as the owner for all purposes.
13. RIGHTS AND OBLIGATIONS SURVIVE EXERCISE OF WARRANT. The rights and
obligations of the Company, of the holder of this Warrant and of the holder of
shares of Common Stock issued upon exercise of this Warrant, shall survive the
exercise of this Warrant.
14. MODIFICATION AND WAIVER. This Warrant and any provision hereof may be
changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of the same is sought.
8.
<PAGE>
15. NOTICES. Any notice, request or other document required or permitted to
be given or delivered to the holder hereof or the Company shall be delivered or
shall be sent by certified mail, postage prepaid, to each such holder at its
address as shown on the books of the Company or to the Company at the address
indicated therefor in the first paragraph of this Warrant or such other address
as either may from time to time provide to the other.
16. BINDING EFFECT ON SUCCESSORS. To the extent then exercisable, this
Warrant shall be binding upon any corporation succeeding the Company by merger,
consolidation or acquisition of all or substantially all of the Company's
assets. All of the obligations of the Company relating to the Common Stock
issuable upon the exercise of this Warrant shall survive the exercise and
termination of this Warrant. All of the covenants and agreements of the Company
shall inure to the benefit of the successors and assigns of the holder hereof.
17. DESCRIPTIVE HEADINGS AND GOVERNING LAW. The description headings of the
several sections and paragraphs of this Warrant are inserted for convenience
only and do not constitute a part of this Warrant. This Warrant shall be
construed and enforced in accordance with, and the rights of the parties shall
be governed by, the laws of the State of California.
18. LOST WARRANTS. The Company represents and warrants to the Holder hereof
that upon receipt of evidence reasonably satisfactory to the Company of the
loss, theft, destruction, or mutilation of this Warrant and, in the case of any
such loss, theft or destruction, upon receipt of an indemnity reasonably
satisfactory to the Company, or in the case of any such mutilation upon
surrender and cancellation of such Warrant, the Company, at its expense, will
make and deliver a new Warrant, of like tenor, in lieu of the lost, stolen,
destroyed or mutilated Warrant.
19. FRACTIONAL SHARES. No fractional shares shall be issued upon exercise
of this Warrant. The Company shall, in lieu of issuing any fractional share, pay
the holder entitled to such fraction a sum in cash equal to such fraction
multiplied by the then effective Stock Purchase Price.
20. EXCHANGE ACT REPORTING. The Company covenants that it shall file any
reports required to be filed by it under the Securities Exchange Act of 1934 and
that it shall take such further action as any Holder may reasonably request, all
to the extent required from time to time to enable Holder to sell Common Stock
without registration under the Act within the limitations of the exemption
provided by Rule 144 promulgated under the Act. Upon the request of any Holder,
the Company shall deliver to such Holder, so long as Holder owns any of the
Securities, a written statement as to whether it has complied with such
requirements.
[THIS SPACE INTENTIONALLY LEFT BLANK]
9.
<PAGE>
IN WITNESS WHEREOF, the Company and Holder have caused this Warrant to be
duly executed by their officers, thereunto duly authorized this ______ day of
September, 2000.
INHALE THERAPEUTIC SYSTEMS, INC.
a Delaware corporation
By:_______________________________
Title:____________________________
ATTEST:
_______________________________
Secretary
AGREED AND ACCEPTED
_______________________________
By: ___________________________
Title:_________________________
<PAGE>
SUBSCRIPTION FORM
Date: _________________, 20___
Inhale Therapeutic Systems, Inc.
150 Industrial Way
San Carlos, CA 94070
Attn: President
Ladies and Gentlemen:
/_/ The undersigned hereby elects to exercise the warrant issued to it by
Inhale Therapeutic Systems, Inc. (the "Company") and dated September
_____, 2000 Warrant No. CW-___ (the "Warrant") and to purchase
thereunder __________________________________ shares of the Common
Stock of the Company (the "Shares") at a purchase price of
___________________________________________ Dollars ($__________) per
Share or an aggregate purchase price of
__________________________________ Dollars ($__________) (the "Purchase
Price").
Pursuant to the terms of the Warrant the undersigned has delivered the
Stock Purchase Price herewith in full in cash or by certified check or
wire transfer.
/_/ The undersigned hereby elects to convert _______________________
percent (____%) of the value of the Warrant pursuant to the provisions
of Section 3 of the Warrant.
Very truly yours,
____________________________
By:_________________________
Title:______________________
<PAGE>
EXHIBIT A
VESTED SHARES CALCULATION SCENARIOS
ASSUMPTION: 10,000 SHARE WARRANT
SCENARIO 1
Step 1: Inhale purchases 10% of LP interests and LP elects the Warrant Payment
Alternative
Step 2: Inhale subsequently purchases another 30% of the LP interests and LP
elects the Warrant Payment Alternative
RESULT:
After Step 1, the number of Vested Shares equals 1,000 shares
V = (P*M) - E
1000 = (.10*10,000)-0
(note E=0 as no shares have been issued upon exercise of Warrant)
After Step 2, the number of Vested Shares equals 4,000 shares
V = (P*M) - E
4000 = (.40*10,000)-0
(note E remains 0 as no shares have been issued upon exercise of Warrant)
SCENARIO 2
Step 1: Inhale purchases 10% of LP interests and LP elects the Warrant Payment
Alternative
Step 2: LP exercises Warrant for 50% of the then Vested Shares
Step 3: Inhale subsequently purchases another 30% of the LP interests and LP
elects the Warrant Payment Alternative
2.
<PAGE>
RESULT:
After Step 1, the number of Vested Shares equals 1,000 shares
V = (P*M) - E
1000 = (.10*10,000)-0
(note E=0 as no shares have been issued upon exercise of Warrant)
After Step 2, the number of Vested Shares equals 500 shares
V = (P*M) - E
500 = (.10*10,000)-500
(note E=500 as 500 shares have been issued upon exercise of Warrant)
After Step 3, the number of Vested Shares equals 3,500 shares
V = (P*M) - E
3,500 = (.40*10,000)-500
(note E=500 as 500 shares have been issued upon exercise of Warrant)
SCENARIO 3
ADDITIONAL ASSUMPTIONS:
$50.00 EXERCISE PRICE
$100.00 AVERAGE CLOSING PRICE FOR 10 DAYS PRECEDING EXERCISE
Step 1: Inhale purchases 10% of LP interests and LP elects the Warrant Payment
Alternative
Step 2: LP exercises Warrant for 50% of the then Vested Shares via Net Issue
Election
Step 3: Inhale subsequently purchases another 30% of the LP interests and LP
elects the Warrant Payment Alternative
3.
<PAGE>
RESULT:
After Step 1, the number of Vested Shares equals 1,000 shares
V = (P*M) - E
1000 = (.10*10,000)-0
(note E=0 as no shares have been issued upon exercise of Warrant)
Upon Exercise of Warrant (Step 2), LP is issued 250 shares
X = Y (A-B)
-------
A
250 = 500 * (100-50)
--------------
100
(note that as result of Net Issue Election, 250 shares are cancelled)
After Step 2, the number of Vested Shares equals 500 shares
V = (P*M) - E 500 = (.10*10,000)-500
(note E=500 as 500 shares have been issued (including cancelled shares)
upon exercise of Warrant)
After Step 3, the number of Vested Shares equals 3,500 shares
V = (P*M) - E
3,500 = (.40*10,000)-500
(note E=500 as 500 shares have been issued (including cancelled shares)
upon exercise of Warrant)
4.
NO. CW-____
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT
AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT') OR ANY STATE SECURITIES LAWS. SUCH SECURITIES MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL
REGISTERED UNDER THE ACT OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT SUCH REGISTRATION IS
NOT REQUIRED.
WARRANT TO PURCHASE UP TO ___ SHARES
OF COMMON STOCK OF
INHALE THERAPEUTIC SYSTEMS, INC.
This certifies that _______________,or its assigns (the "Holder"), for
value received, is entitled to purchase from INHALE THERAPEUTIC SYSTEMS, INC.
a Delaware corporation located at 150 Industrial Road, San Carlos CA 94070
(the "Company"), a number of shares of fully paid and nonassessable shares of
the Company's Common Stock ("Common Stock") as determined in accordance with
Section 1 hereof, not to exceed ___ shares (the "Maximum Shares"), for cash
at a price equal to $_______ (the "Stock Purchase Price") at such times as
determined in accordance with Section 2 hereof and, with respect to any
Vested Shares (as defined herein) prior to the earlier of (i) the closing
(after the Exercise Date (as defined herein) with respect to such Vested
Shares) of (A) a sale of substantially all of the assets of the Company; (B)
a merger or consolidation in which the Company is not the surviving
corporation (other than a merger or consolidation in which shareholders
immediately before the merger or consolidation have, immediately after the
merger or consolidation, greater stock voting power); (C) a reverse merger in
which the Company is the surviving corporation but the shares of the
Company's common stock outstanding immediately preceding the merger are
converted by virtue of the merger into other property, whether in the form of
securities, cash or otherwise (other than a reverse merger in which
stockholders immediately before the merger have, immediately after the
merger, greater stock voting power); or (D) any transaction or series of
related transactions in which in excess of 50% of the Company's voting power
is transferred (a "Change of Control") or (ii) six (6) years from such
Exercise Date, such earlier day being referred to herein as the "Expiration
Date," upon surrender to the Company at its principal office (or at such
other location as the Company may advise the Holder in writing) of this
Warrant properly endorsed with the Form of Subscription attached hereto duly
filled in and signed and upon payment in cash or by check of the aggregate
Stock Purchase Price for the number of shares for which this Warrant is being
exercised determined in accordance with the provisions hereof.
<PAGE>
Capitalized terms used herein and not defined shall have the meaning set
forth in the Agreement of Limited Partnership of Inhale 201 Industrial Road,
L.P. (the "Partnership Agreement"). This Warrant is subject to the following
terms and conditions:
1. VESTED SHARES. At any given time, this Warrant shall be exercisable for
only such number of shares of Common Stock that are "Vested Shares." At any time
during the term of this Warrant, the number of Vested Shares shall be determined
by the following equation:
V = (P*M) - E
Where V = the number of Vested Shares;
P = the total percentage of the Holder's (or Holder's
successor in interests) General Partnership interests
which have been purchased pursuant to the exercise of
the Option under the Warrant Payment Alternative set
forth in Section 20 of the Partnership Agreement;
M = the Maximum Shares (as adjusted pursuant to Section 6
hereof); and
E = the number of shares previously issued upon exercise
of this Warrant (or any predecessor
Warrant), including any additional shares canceled as
a result of any exercise pursuant to Section 3
hereof, (as adjusted for stock dividends,
combinations, splits and recapitalizations and the
like with respect to such shares).
For purposes of example only, attached as Exhibit A hereto are hypothetical
examples of the calculation of Vested Shares.
2. EXERCISE DATE. This Warrant is exercisable at the option of the holder
of record hereof, at any time or from time to time after the Exercise Date with
respect to the Vested Shares being acquired and prior to the Expiration Date
with respect to such Vested Shares for all or any part of the Vested Shares (but
not for a fraction of a share) which may be purchased hereunder. The Exercise
Date with respect to any shares issuable pursuant to this Warrant shall be the
date which such shares shall initially become Vested Shares. To the extent this
Warrant is exercised in part, the Holder shall be deemed to have acquired those
Vested Shares with the earliest Exercise Date first (provided such exercise is
prior to the Expiration Date with respect to such Vested Shares).
3. NET ISSUE EXERCISE. Notwithstanding any provisions herein to the
contrary, if the fair market value of one share of the Company's Common Stock is
greater than the Stock Purchase Price (at the date of calculation as set forth
below), in lieu of exercising this Warrant for cash, the Holder may elect to
receive shares equal to the value (as determined below) of this Warrant (or the
portion thereof being canceled) by surrender of this Warrant at the principal
office of the Company together with the properly endorsed Form of Subscription
and notice of
2.
<PAGE>
such election in which event the Company shall issue to the Holder a number of
shares of Common Stock computed using the following formula:
X = Y (A-B)
-------
A
Where X = the number of shares of Common Stock to be issued to the
Holder
Y = the number of shares of Common Stock
purchasable under the Warrant or, if only a
portion of the Warrant is being exercised, the
portion of the Warrant being canceled (at the
date of such calculation)
A = the fair market value of one share of the
Company's Common Stock (at the date of such
calculation)
B = Stock Purchase Price (as adjusted to the date
of such calculation)
For purposes of the above calculation, fair market value of one share of Common
Stock shall be the average closing price of the Company's Common Stock for the
ten trading days preceding the date of exercise.
4. EXERCISE; ISSUANCE OF CERTIFICATES; PAYMENT FOR SHARES. The Company
agrees that the shares of Common Stock purchased under this Warrant shall be and
are deemed to be issued to the Holder hereof as the record owner of such shares
as of the close of business on the date on which this Warrant shall have been
surrendered, properly endorsed, the completed, executed Form of Subscription
delivered and payment made for such shares. Certificates for the shares of
Common Stock so purchased, together with any other securities or property to
which the Holder hereof is entitled upon such exercise, shall be delivered to
the Holder hereof by the Company at the Company's expense within a reasonable
time after the rights represented by this Warrant have been so exercised. In
case of a purchase of less than all the shares which may be purchased under this
Warrant, the Company shall cancel this Warrant and execute and deliver a new
Warrant or Warrants of like tenor for the balance of the shares purchasable
under the Warrant surrendered upon such purchase to the Holder hereof within a
reasonable time. Each stock certificate so delivered shall be in such
denominations of Common Stock as may be requested by the Holder hereof and shall
be registered in the name of such Holder.
5. SHARES TO BE FULLY PAID; RESERVATION OF SHARES. The Company covenants
and agrees that all shares of Common Stock which may be issued upon the exercise
of the rights represented by this Warrant will, upon issuance, be duly
authorized, validly issued, fully paid and nonassessable and free from all
preemptive rights of any shareholder and free of all taxes, liens and charges
with respect to the issue thereof. The Company further covenants and agrees
that, during the period within which the rights represented by this Warrant may
be exercised, the Company will at all times have authorized and reserved, for
the purpose of issue or transfer upon
3.
<PAGE>
exercise of the subscription rights evidenced by this Warrant, a sufficient
number of shares of authorized but unissued Common Stock, or other securities
and property, when and as required to provide for the exercise of the rights
represented by this Warrant. The Company will take all such action as may be
necessary to assure that such shares of Common Stock may be issued as provided
herein without violation of any applicable law or regulation, or of any
requirements of any domestic securities exchange upon which the Common Stock may
be listed; provided, however, that the Company shall not be required to effect a
registration under Federal or State securities laws with respect to such
exercise. The Company will not take any action which would result in any
adjustment of the Stock Purchase Price (as set forth in Section 6 hereof) if the
total number of shares of Common Stock issuable after such action upon exercise
of all outstanding warrants, together with all shares of Common Stock then
outstanding and all shares of Common Stock then issuable upon exercise of all
options and upon the conversion of all convertible securities then outstanding,
would exceed the total number of shares of Common Stock then authorized by the
Company's Restated Certificate of Incorporation.
6. ADJUSTMENT OF STOCK PURCHASE PRICE AND NUMBER OF SHARES. The Stock
Purchase Price and the number of shares purchasable upon the exercise of this
Warrant shall be subject to adjustment from time to time upon the occurrence of
certain events described in this Section 6. Upon each adjustment of the Stock
Purchase Price, the Holder of this Warrant shall thereafter be entitled to
purchase, at the Stock Purchase Price resulting from such adjustment, the number
of shares obtained by multiplying the Stock Purchase Price in effect immediately
prior to such adjustment by the number of shares purchasable pursuant hereto
immediately prior to such adjustment, and dividing the product thereof by the
Stock Purchase Price resulting from such adjustment.
6.1 SUBDIVISION OR COMBINATION OF COMMON STOCK. In case the Company
shall at any time subdivide its outstanding shares of Common Stock into a
greater number of shares, the Stock Purchase Price in effect immediately prior
to such subdivision shall be proportionately reduced, and conversely, in case
the outstanding shares of Common Stock of the Company shall be combined into a
smaller number of shares, the Stock Purchase Price in effect immediately prior
to such combination shall be proportionately increased.
6.2 DIVIDENDS IN COMMON STOCK, OTHER STOCK, PROPERTY, RECLASSIFICATION.
If at any time or from time to time the holders of Common Stock (or any shares
of stock or other securities at the time receivable upon the exercise of this
Warrant) shall have received or become entitled to receive, without payment
therefor,
(A) Common Stock or any shares of stock or other securities which
are at any time directly or indirectly convertible into or exchangeable for
Common Stock, or any rights or options to subscribe for, purchase or otherwise
acquire any of the foregoing by way of dividend or other distribution,
(B) any cash paid or payable otherwise than as a cash dividend, or
4.
<PAGE>
(C) Common Stock or additional stock or other securities or property
(including cash) by way of spinoff, split-up, reclassification, combination of
shares or similar corporate rearrangement, (other than shares of Common Stock
issued as a stock split or adjustments in respect of which shall be covered by
the terms of Section 6.1 above), then and in each such case, the Holder hereof
shall, upon the exercise of this Warrant, be entitled to receive, in addition to
the number of shares of Common Stock receivable thereupon, and without payment
of any additional consideration therefor, the amount of stock and other
securities and property (including cash in the cases referred to in clause (b)
above and this clause (c)) which such Holder would hold on the date of such
exercise had he been the holder of record of such Common Stock as of the date on
which holders of Common Stock received or became entitled to receive such shares
or all other additional stock and other securities and property.
6.3 REORGANIZATION, RECLASSIFICATION, CONSOLIDATION, MERGER OR SALE. If
any recapitalization, reclassification or reorganization of the capital stock of
the Company, or any consolidation or merger of the Company with another
corporation, or sale of all or substantially all of the Company's assets or
other transaction (other than a Change in Control which occurs after the
Exercise Date) shall be effected in such a way that holders of Common Stock
shall be entitled to receive stock, securities, or other assets or property (an
"Organic Change"), then, as a condition of such Organic Change, lawful and
adequate provisions shall be made by the Company whereby the Holder hereof shall
thereafter have the right to purchase and receive (in lieu of the shares of the
Common Stock of the Company immediately theretofore purchasable and receivable
upon the exercise of the rights represented hereby) such shares of stock,
securities or other assets or property as may be issued or payable with respect
to or in exchange for a number of outstanding shares of such Common Stock equal
to the number of shares of such stock immediately theretofore purchasable and
receivable upon the exercise of the rights represented hereby. In the event of
any Organic Change, appropriate provision shall be made by the Company with
respect to the rights and interests of the Holder of this Warrant to the end
that the provisions hereof (including, without limitation, provisions for
adjustments of the Stock Purchase Price and of the number of shares purchasable
and receivable upon the exercise of this Warrant) shall thereafter be
applicable, in relation to any shares of stock, securities or assets thereafter
deliverable upon the exercise hereof.
6.4 CERTAIN EVENTS. If any change in the outstanding Common Stock of the
Company or any other event occurs as to which the other provisions of this
Section 6 are not strictly applicable or if strictly applicable would not fairly
protect the purchase rights of the Holder of the Warrant in accordance with such
provisions, then the Board of Directors of the Company shall make an adjustment
in the number and class of shares available under the Warrant, the Stock
Purchase Price or the application of such provisions, so as to protect such
purchase rights as aforesaid. The adjustment shall be such as will give the
Holder of the Warrant upon exercise for the same aggregate Stock Purchase Price
the total number, class and kind of shares as the Holder would have owned had
the Warrant been exercised prior to the event and had the Holder continued to
hold such shares until after the event requiring adjustment.
5.
<PAGE>
6.5 NOTICES OF CHANGE. The Company shall give written notice to the
Holder at least 10 business days prior to the date on which a Change of Control
or Organic Change shall take place.
7. REPRESENTATIONS AND WARRANTIES OF THE HOLDER
7.1 PURCHASE FOR OWN ACCOUNT. Holder represents that it is acquiring the
Warrant and the Common Stock issuable upon exercise of the Warrant
(collectively, the "SECURITIES") solely for its own account and beneficial
interest for investment and not for sale or with a view to distribution of the
Securities or any part thereof, has no present intention of selling (in
connection with a distribution or otherwise), granting any participation in, or
otherwise distributing the same, and does not presently have reason to
anticipate a change in such intention.
7.2 INFORMATION AND SOPHISTICATION. Holder acknowledges that it has
received all the information it has requested from the Company and it considers
necessary or appropriate for deciding whether to acquire the Securities. Holder
represents that it has had an opportunity to ask questions and receive answers
from the Company regarding the terms and conditions of the offering of the
Securities and to obtain any additional information necessary to verify the
accuracy of the information given the Holder. Holder further represents that it
has such knowledge and experience in financial and business matters that it is
capable of evaluating the merits and risk of this investment.
7.3 ABILITY TO BEAR ECONOMIC RISK. Holder acknowledges that investment
in the Securities involves a high degree of risk, and represents that it is
able, without materially impairing its financial condition, to hold the
Securities for an indefinite period of time and to suffer a complete loss of its
investment.
7.4 FURTHER LIMITATIONS ON DISPOSITION. Without in any way limiting the
representations set forth above, Holder further agrees not to make any
disposition of all or any portion of the Securities unless and until:
(A) There is then in effect a Registration Statement under the Act
covering such proposed disposition and such disposition is made in accordance
with such Registration Statement; or
(B) Holder shall have notified the Company of the proposed
disposition and shall have furnished the Company with a detailed statement of
the circumstances surrounding the proposed disposition, and if reasonably
requested by the Company, Holder shall have furnished the Company with an
opinion of counsel, reasonably satisfactory to the Company, that such
disposition will not require registration under the Act or any applicable state
securities laws.
(C) Notwithstanding the provisions of paragraphs (a) and (b) above,
no such registration statement or opinion of counsel shall be necessary for a
transfer by gift, will or
6.
<PAGE>
intestate succession to any spouse or lineal descendants or ancestors, if all
transferees agree in writing to be subject to the terms hereof to the same
extent as if they were Holder hereunder.
(D) Each certificate representing Securities shall (unless otherwise
permitted by the provisions of the Agreement) be stamped or otherwise imprinted
with a legend substantially similar to the following (in addition to any legend
required under applicable state securities laws):
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") OR ANY STATE SECURITIES
LAWS. SUCH SECURITIES MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED,
ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT
OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL SATISFACTORY TO
THE COMPANY AND ITS COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED.
(E) The Company shall be obligated to reissue promptly unlegended
certificates at the request of any Holder if the Holder shall have obtained an
opinion of counsel (which counsel may be counsel to the Company) reasonably
acceptable to the Company to the effect that the Securities proposed to be
disposed of may lawfully be so disposed of without registration, qualification
or legend. The Company shall pay the reasonable fees and expenses of such
counsel in rendering such opinion, not to exceed $5,000.
7.5 ACCREDITED INVESTOR STATUS. Holder is an "ACCREDITED INVESTOR" as
such term is defined in Rule 501 of Regulation D promulgated under the Act.
7.6 FURTHER ASSURANCES. Holder agrees and covenants that at any time and
from time to time it will promptly execute and deliver to the Company such
further instruments and documents and take such further action as the Company
may reasonably require in order to carry out the full intent and purpose of this
Agreement.
8. ISSUE TAX. The issuance of certificates for shares of Common Stock upon
the exercise of the Warrant shall be made without charge to the Holder of the
Warrant for any issue tax (other than any applicable income taxes) in respect
thereof; 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 issuance and
delivery of any certificate in a name other than that of the then Holder of the
Warrant being exercised.
9. CLOSING OF BOOKS. The Company will at no time close its transfer books
against the transfer of any warrant or of any shares of Common Stock issued or
issuable upon the exercise of any warrant in any manner which interferes with
the timely exercise of this Warrant.
7.
<PAGE>
10. NO VOTING OR DIVIDEND RIGHTS; LIMITATION OF LIABILITY. Nothing
contained in this Warrant shall be construed as conferring upon the Holder
hereof the right to vote or to consent or to receive notice as a shareholder of
the Company or any other matters or any rights whatsoever as a shareholder of
the Company. No dividends or interest shall be payable or accrued in respect of
this Warrant or the interest represented hereby or the shares purchasable
hereunder until, and only to the extent that, this Warrant shall have been
exercised. No provisions hereof, in the absence of affirmative action by the
Holder to purchase shares of Common Stock, and no mere enumeration herein of the
rights or privileges of the holder hereof, shall give rise to any liability of
such Holder for the Stock Purchase Price or as a shareholder of the Company,
whether such liability is asserted by the Company or by its creditors.
11. MARKET STAND-OFF AGREEMENT. Holder shall not sell, dispose of,
transfer, make any short sale of, grant any option for the purchase of, or enter
into any hedging or similar transaction with the same economic effect as a sale,
any Common Stock or other securities of the Company held by Holder, (the
"Restricted Securities"), for a period of time specified by the managing
underwriter (not to exceed one hundred eighty (180) days) following the
effective date of a registration statement of the Company filed under the Act.
Holder agrees to execute and deliver such other agreements as may be reasonably
requested by the Company and/or the managing underwriter which are consistent
with the foregoing or which are necessary to give further effect thereto. In
order to enforce the foregoing covenant, the Company may impose stop-transfer
instructions with respect to Holder's Restricted Securities until the end of
such period.
12. WARRANTS TRANSFERABLE. Subject to compliance with applicable federal
and state securities laws, this Warrant and all rights hereunder are
transferable, in whole or in part, without charge to the holder hereof (except
for transfer taxes), upon surrender of this Warrant properly endorsed. Each
taker and holder of this Warrant, by taking or holding the same, consents and
agrees that this Warrant, when endorsed in blank, shall be deemed negotiable,
and that the holder hereof, when this Warrant shall have been so endorsed, may
be treated by the Company, at the Company's option, and all other persons
dealing with this Warrant as the absolute owner hereof for any purpose and as
the person entitled to exercise the rights represented by this Warrant, or to
the transfer hereof on the books of the Company any notice to the contrary
notwithstanding; but until such transfer on such books, the Company may treat
the registered owner hereof as the owner for all purposes.
13. RIGHTS AND OBLIGATIONS SURVIVE EXERCISE OF WARRANT. The rights and
obligations of the Company, of the holder of this Warrant and of the holder of
shares of Common Stock issued upon exercise of this Warrant, shall survive the
exercise of this Warrant.
14. MODIFICATION AND WAIVER. This Warrant and any provision hereof may be
changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of the same is sought.
8.
<PAGE>
15. NOTICES. Any notice, request or other document required or permitted to
be given or delivered to the holder hereof or the Company shall be delivered or
shall be sent by certified mail, postage prepaid, to each such holder at its
address as shown on the books of the Company or to the Company at the address
indicated therefor in the first paragraph of this Warrant or such other address
as either may from time to time provide to the other.
16. BINDING EFFECT ON SUCCESSORS. To the extent then exercisable, this
Warrant shall be binding upon any corporation succeeding the Company by merger,
consolidation or acquisition of all or substantially all of the Company's
assets. All of the obligations of the Company relating to the Common Stock
issuable upon the exercise of this Warrant shall survive the exercise and
termination of this Warrant. All of the covenants and agreements of the Company
shall inure to the benefit of the successors and assigns of the holder hereof.
17. DESCRIPTIVE HEADINGS AND GOVERNING LAW. The description headings of the
several sections and paragraphs of this Warrant are inserted for convenience
only and do not constitute a part of this Warrant. This Warrant shall be
construed and enforced in accordance with, and the rights of the parties shall
be governed by, the laws of the State of California.
18. LOST WARRANTS. The Company represents and warrants to the Holder hereof
that upon receipt of evidence reasonably satisfactory to the Company of the
loss, theft, destruction, or mutilation of this Warrant and, in the case of any
such loss, theft or destruction, upon receipt of an indemnity reasonably
satisfactory to the Company, or in the case of any such mutilation upon
surrender and cancellation of such Warrant, the Company, at its expense, will
make and deliver a new Warrant, of like tenor, in lieu of the lost, stolen,
destroyed or mutilated Warrant.
19. FRACTIONAL SHARES. No fractional shares shall be issued upon exercise
of this Warrant. The Company shall, in lieu of issuing any fractional share, pay
the holder entitled to such fraction a sum in cash equal to such fraction
multiplied by the then effective Stock Purchase Price.
20. EXCHANGE ACT REPORTING. The Company covenants that it shall file any
reports required to be filed by it under the Securities Exchange Act of 1934 and
that it shall take such further action as any Holder may reasonably request, all
to the extent required from time to time to enable Holder to sell Common Stock
without registration under the Act within the limitations of the exemption
provided by Rule 144 promulgated under the Act. Upon the request of any Holder,
the Company shall deliver to such Holder, so long as Holder owns any of the
Securities, a written statement as to whether it has complied with such
requirements.
[THIS SPACE INTENTIONALLY LEFT BLANK]
9.
<PAGE>
IN WITNESS WHEREOF, the Company and Holder have caused this Warrant to be
duly executed by their officers, thereunto duly authorized this ______ day of
September, 2000.
INHALE THERAPEUTIC SYSTEMS, INC.
a Delaware corporation
By:_______________________________
Title:____________________________
ATTEST:
_______________________________
Secretary
AGREED AND ACCEPTED
_______________________________
By:____________________________
Title:_________________________
<PAGE>
SUBSCRIPTION FORM
Date: _________________, 20___
Inhale Therapeutic Systems, Inc.
150 Industrial Way
San Carlos, CA 94070
Attn: President
Ladies and Gentlemen:
/_/ The undersigned hereby elects to exercise the warrant issued to it by
Inhale Therapeutic Systems, Inc. (the "Company") and dated September
_____, 2000 Warrant No. CW-___ (the "Warrant") and to purchase
thereunder __________________________________ shares of the Common
Stock of the Company (the "Shares") at a purchase price of
___________________________________________ Dollars ($__________) per
Share or an aggregate purchase price of
__________________________________ Dollars ($__________) (the "Purchase
Price").
Pursuant to the terms of the Warrant the undersigned has delivered the
Stock Purchase Price herewith in full in cash or by certified check or
wire transfer.
/_/ The undersigned hereby elects to convert _______________________
percent (____%) of the value of the Warrant pursuant to the provisions
of Section 3 of the Warrant.
Very truly yours,
____________________________
By:_________________________
Title:______________________
<PAGE>
EXHIBIT A
VESTED SHARES CALCULATION SCENARIOS
ASSUMPTION: 1,000 SHARE WARRANT
SCENARIO 1
Step 1: Inhale purchases 10% of GP interests and GP elects the Warrant
Payment Alternative
Step 2: Inhale subsequently purchases another 30% of the GP interests
and GP elects the Warrant Payment Alternative
RESULT:
After Step 1, the number of Vested Shares equals 100 shares
V = (P*M) - E
100 = (.10*1,000)-0
(note E=0 as no shares have been issued upon exercise of Warrant)
After Step 2, the number of Vested Shares equals 400 shares
V = (P*M) - E
400 = (.40*1,000)-0
(note E remains 0 as no shares have been issued upon exercise of Warrant)
SCENARIO 2
Step 1: Inhale purchases 10% of GP interests and GP elects the Warrant Payment
Alternative
Step 2: GP exercises Warrant for 50% of the then Vested Shares
Step 3: Inhale subsequently purchases another 30% of the GP interests and GP
elects the Warrant Payment Alternative
2.
<PAGE>
RESULT:
After Step 1, the number of Vested Shares equals 100 shares
V = (P*M) - E
100 = (.10*1,000)-0
(note E=0 as no shares have been issued upon exercise of Warrant)
After Step 2, the number of Vested Shares equals 50 shares
V = (P*M) - E
50 = (.10*1,000)-50
(note E=50 as 50 shares have been issued upon exercise of Warrant)
After Step 3, the number of Vested Shares equals 350 shares
V = (P*M) - E
350 = (.40*1,000)-50
(note E=50 as 50 shares have been issued upon exercise of Warrant)
SCENARIO 3
ADDITIONAL ASSUMPTIONS:
$50.00 EXERCISE PRICE
$100.00 AVERAGE CLOSING PRICE FOR 10 DAYS PRECEDING EXERCISE
Step 1: Inhale purchases 10% of GP interests and GP elects the Warrant Payment
Alternative
Step 2: GP exercises Warrant for 50% of the then Vested Shares via Net Issue
Election
Step 3: Inhale subsequently purchases another 30% of the GP interests and GP
elects the Warrant Payment Alternative
3.
<PAGE>
RESULT:
After Step 1, the number of Vested Shares equals 100 shares
V = (P*M) - E
100 = (.10*1,000)-0
(note E=0 as no shares have been issued upon exercise of Warrant)
Upon Exercise of Warrant (Step 2), GP is issued 25 shares
X = Y (A-B)
-------
A
25 = 50 * (100-50)
-------------
100
(note that as result of Net Issue Election, 25 shares are cancelled)
After Step 2, the number of Vested Shares equals 50 shares
V = (P*M) - E
50 = (.10*1,000)-50
(note E=50 as 50 shares have been issued (including cancelled shares)
upon exercise of Warrant)
After Step 3, the number of Vested Shares equals 350 shares
V = (P*M) - E
350 = (.40*1,000)-50
(note E=50 as 50 shares have been issued (including cancelled shares)
upon exercise of Warrant)
4.
