Exhibit 4.17
RESALE REGISTRATION RIGHTS AGREEMENT
among
INHALE THERAPEUTIC SYSTEMS, INC.,
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED
DEUTSCHE BANK SECURITIES INC.
XXXXXX BROTHERS INC.
and
U.S. BANCORP XXXXX XXXXXXX INC.
Dated as of October 17, 2000
Resale Registration Rights Agreement (the "Agreement"), dated as of
October 17, 2000 among Inhale Therapeutic Systems, Inc., a Delaware corporation
(together with any successor entity, herein referred to as the "Issuer"),
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, Deutsche Bank Securities
Inc., Xxxxxx Brothers Inc., and U.S. Bancorp Xxxxx Xxxxxxx Inc. (collectively,
the "Initial Purchasers").
Pursuant to the Purchase Agreement, dated October 11, 2000, between the
Issuer and the Initial Purchasers (the "Purchase Agreement"), the Initial
Purchasers have agreed to purchase from the Issuer up to $200,000,000
($250,000,000 if the Initial Purchasers exercise the over-allotment option in
full) in aggregate principal amount of 3 1/2% Convertible Subordinated Notes due
2007 (the "Notes"). The Notes will be convertible into fully paid, nonassessable
common stock, par value $0.0001 per share, of the Issuer (the "Common Stock") on
the terms, and subject to the conditions, set forth in the Indenture (as defined
herein). To induce the Initial Purchasers to purchase the Notes, the Issuer has
agreed to provide the registration rights set forth in this Agreement pursuant
to Section 3(l) of the Purchase Agreement.
The parties hereby agree as follows:
1. DEFINITIONS. As used in this Agreement, the following capitalized
terms shall have the following meanings:
ADVICE: As defined in Section 4(c)(ii) hereof.
AGREEMENT: As defined in the preamble hereto.
BLUE SKY APPLICATION: As defined in Section 6(a) hereof.
BROKER-DEALER: Any broker or dealer registered under the Exchange Act.
BUSINESS DAY: A day other than a Saturday or Sunday or any federal
holiday in the United States.
CLOSING DATE: The date of this Agreement.
COMMISSION: Securities and Exchange Commission.
COMMON STOCK: As defined in the preamble hereto.
DAMAGES PAYMENT DATE: Each Interest Payment Date. For purposes of this
Agreement, if no Notes are outstanding, "Damages Payment Date" shall mean each
April 17 and October 17.
EFFECTIVENESS PERIOD: As defined in Section 2(a)(iii) hereof.
EFFECTIVENESS TARGET DATE: As defined in Section 2(a)(ii) hereof.
EXCHANGE ACT: Securities Exchange Act of 1934, as amended.
HOLDER: A Person who owns, beneficially or otherwise, Transfer
Restricted Securities.
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INDEMNIFIED HOLDER: As defined in Section 6(a) hereof.
INDENTURE: The Indenture, dated as of October 17, 2000, between the
Issuer and Chase Manhattan Bank and Trust Company, National Association, as
trustee (the "Trustee"), pursuant to which the Notes are to be issued, as such
Indenture is amended, modified or supplemented from time to time in accordance
with the terms thereof.
INITIAL PURCHASERS: As defined in the preamble hereto.
INTEREST PAYMENT DATE: As defined in the Indenture.
ISSUER: As defined in the preamble hereto.
LIQUIDATED DAMAGES: As defined in Section 3(a) hereof.
MAJORITY OF HOLDERS: Holders holding over 50% of the aggregate
principal amount of Notes outstanding; provided that, for purpose of this
definition, a holder of shares of Common Stock which constitute Transfer
Restricted Securities and were issued upon conversion of the Notes shall be
deemed to hold an aggregate principal amount of Notes (in addition to the
aggregate principal amount of Notes held by such holder) equal to the aggregate
principal amount of Notes converted by such Holder into such shares of Common
Stock.
NASD: National Association of Securities Dealers, Inc.
NOTES: As defined in the preamble hereto.
PERSON: An individual, partnership, corporation, unincorporated
organization, trust, joint venture or a government or agency or political
subdivision thereof.
PROSPECTUS: The prospectus included in a Shelf Registration Statement,
as amended or supplemented by any prospectus supplement and by all other
amendments thereto, including post-effective amendments, and all material
incorporated by reference into such Prospectus.
QUESTIONNAIRE DEADLINE: As defined in Section 2(b) hereof.
RECORD HOLDER: With respect to any Damages Payment Date, each Person
who is a Holder on the record date with respect to the Interest Payment Date on
which such Damages Payment Date shall occur. In the case of a Holder of shares
of Common Stock issued upon conversion of the Notes, "Record Holder" shall mean
each Person who is a Holder of shares of Common Stock which constitute Transfer
Restricted Securities on the April 2 or October 2 immediately preceding the
Damages Payment Date.
REGISTRATION DEFAULT: As defined in Section 3(a) hereof.
SALE NOTICE: As defined in Section 4(e) hereof.
SECURITIES ACT: Securities Act of 1933, as amended.
SHELF FILING DEADLINE: As defined in Section 2(a)(i) hereof.
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SHELF REGISTRATION STATEMENT: As defined in Section 2(a)(i) hereof.
SUSPENSION PERIOD. As defined in Section 4(b)(i) hereof.
TIA: Trust Indenture Act of 1939, as in effect on the date the
Indenture is qualified under the TIA.
TRANSFER RESTRICTED SECURITIES: Each Note and each share of Common
Stock issued upon conversion of Notes until the earlier of:
(i) the date on which such Note or such share of Common Stock issued
upon conversion has been effectively registered under the Securities
Act and disposed of in accordance with the Shelf Registration
Statement;
(ii) the date on which such Note or such share of Common Stock
issued upon conversion is transferred in compliance with Rule 144 under
the Securities Act or may be sold or transferred pursuant to Rule 144
under the Securities Act (or any other similar provision then in
force); or
(iii) the date on which such Note or such share of Common Stock
issued upon conversion ceases to be outstanding (whether as a result of
redemption, repurchase and cancellation, conversion or otherwise).
UNDERWRITTEN REGISTRATION OR UNDERWRITTEN OFFERING: A registration in
which securities of the Issuer are sold to an underwriter for reoffering to the
public.
2. SHELF REGISTRATION.
(a) The Issuer shall:
(i) not later than 90 days after the date hereof (the "Shelf Filing
Deadline"), cause to be filed a registration statement pursuant to Rule
415 under the Securities Act (the "Shelf Registration Statement"),
which Shelf Registration Statement shall provide for resales of all
Transfer Restricted Securities held by Holders that have provided the
information required pursuant to the terms of Section 2(b) hereof;
(ii) use its best efforts to cause the Shelf Registration Statement
to be declared effective by the Commission as promptly as reasonably
practicable, but in no event later than 180 days after the date hereof
(the "Effectiveness Target Date"); and
(iii) use its best efforts to keep the Shelf Registration Statement
continuously effective, supplemented and amended as required by the
provisions of Section 4(b) hereof to the extent necessary to ensure
that (A) it is available for resales by the Holders of Transfer
Restricted Securities entitled to the benefit of this Agreement and (B)
conforms with the requirements of this Agreement and the Securities Act
and the rules and regulations of the Commission promulgated thereunder
as announced from time to time for a period (the "Effectiveness
Period") of:
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(1) two years following the last date of original issuance of
Notes; or
(2) such shorter period that will terminate when (x) all of the
Holders of Transfer Restricted Securities are able to sell all
Transfer Restricted Securities immediately without restriction
pursuant to Rule 144(k) under the Securities Act or any successor
rule thereto, (y) when all Transfer Restricted Securities have
ceased to be outstanding (whether as a result of redemption,
repurchase and cancellation, conversion or otherwise) or (z) all
Transfer Restricted Securities registered under the Shelf
Registration Statement have been sold.
(b) No Holder of Transfer Restricted Securities may include any of its
Transfer Restricted Securities in the Shelf Registration Statement pursuant to
this Agreement unless such Holder furnishes to the Issuer in writing, prior to
or on the 20th Business Day after receipt of a request therefor (the
"Questionnaire Deadline"), such information as the Issuer may reasonably request
for use in connection with the Shelf Registration Statement or the Prospectus or
preliminary Prospectus included therein and in any application to be filed with
or under state securities laws. In connection with all such requests for
information from Holders of Transfer Restricted Securities, the Issuer shall
notify such Holders of the requirements set forth in the preceding sentence. No
Holder of Transfer Restricted Securities shall be entitled to Liquidated Damages
pursuant to Section 3 hereof unless such Holder shall have provided all such
reasonably requested information prior to or on the Questionnaire Deadline. Each
Holder as to which the Shelf Registration Statement is being effected agrees to
furnish promptly to the Issuer all information required to be disclosed in order
to make information previously furnished to the Issuer by such Holder not
materially misleading.
3. LIQUIDATED DAMAGES.
(a) If:
(i) the Shelf Registration Statement is not filed with the
Commission prior to or on the Shelf Filing Deadline;
(ii) the Shelf Registration Statement has not been declared
effective by the Commission prior to or on the Effective Target Date;
(iii) subject to the provisions of Section 4(b)(i) hereof, the Shelf
Registration Statement is filed and declared effective but, during the
Effectiveness Period, shall thereafter cease to be effective or fail to
be usable for its intended purpose without being succeeded within five
Business Days by a post-effective amendment to the Shelf Registration
Statement or a report filed with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act that cures such failure
and, in the case of a post-effective amendment, is itself immediately
declared effective; or
(iv) prior to or on the 45th or 60th day, as the case may be, of any
Suspension Period, such suspension has not been terminated,
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(each such event referred to in foregoing clauses (i) through (iv),
a "Registration Default"), the Issuer hereby agrees to pay liquidated
damages ("Liquidated Damages") with respect to the Transfer Restricted
Securities from and including the day following the Registration
Default to but excluding the day on which the Registration Default has
been cured:
(A) in respect of the Notes, to each holder of Notes, (x) with
respect to the first 90-day period during which a Registration
Default shall have occurred and be continuing, in an amount per
year equal to an additional 0.25% of the principal amount of the
Notes, and (y) with respect to the period commencing on the 91st
day following the day the Registration Default shall have occurred
and be continuing, in an amount per year equal to an additional
0.50% of the principal amount of the Notes; provided that in no
event shall Liquidated Damages accrue at a rate per year exceeding
0.50% of the principal amount of the Notes; and
(B) in respect of any shares of Common Stock, to each holder of
shares of Common Stock issued upon conversion of Notes, (x) with
respect to the first 90-day period in which a Registration Default
shall have occurred and be continuing, in an amount per year equal
to 0.25% of the principal amount of the converted Notes, and (y)
with respect to the period commencing the 91st day following the
day the Registration Default shall have occurred and be continuing,
in an amount per year equal to 0.50% of the principal amount of the
converted Notes; provided that in no event shall Liquidated Damages
accrue at a rate per year exceeding 0.50% of the principal amount
of the converted Notes.
(b) All accrued Liquidated Damages shall be paid in arrears to Record
Holders by the Issuer on each Damages Payment Date by wire transfer of
immediately available funds or by federal funds check. Following the cure of all
Registration Defaults relating to any particular Note or share of Common Stock,
the accrual of Liquidated Damages with respect to such Note or share of Common
Stock will cease.
All obligations of the Issuer set forth in this Section 3 that are
outstanding with respect to any Transfer Restricted Security at the time such
security ceases to be a Transfer Restricted Security shall survive until such
time as all such obligations with respect to such Transfer Restricted Security
shall have been satisfied in full.
The Liquidated Damages set forth above shall be the exclusive monetary
remedy available to the Holders of Transfer Restricted Securities for such
Registration Default.
4. REGISTRATION PROCEDURES.
(a) In connection with the Shelf Registration Statement, the Issuer
shall comply with all the provisions of Section 4(b) hereof and shall use its
best efforts to effect such registration to permit the sale of the Transfer
Restricted Securities being sold in accordance with the intended method or
methods of distribution thereof, and pursuant thereto, shall as expeditiously as
possible prepare and file with the Commission a Shelf Registration Statement
relating to the registration on any appropriate form under the Securities Act.
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(b) In connection with the Shelf Registration Statement and any
Prospectus required by this Agreement to permit the sale or resale of Transfer
Restricted Securities, the Issuer shall:
(i) Subject to any notice by the Issuer in accordance with this
Section 4(b) of the existence of any fact or event of the kind
described in Section 4(b)(iii)(D), use its best efforts to keep the
Shelf Registration Statement continuously effective during the
Effectiveness Period; upon the occurrence of any event that would cause
the Shelf Registration Statement or the Prospectus contained therein
(A) to contain a material misstatement or omission or (B) not be
effective and usable for resale of Transfer Restricted Securities
during the Effectiveness Period, the Issuer shall file promptly an
appropriate amendment to the Shelf Registration Statement or a report
filed with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d)
of the Exchange Act, in the case of clause (A), correcting any such
misstatement or omission, and, in the case of either clause (A) or (B),
use its best efforts to cause such amendment to be declared effective
and the Shelf Registration Statement and the related Prospectus to
become usable for their intended purposes as soon as practicable
thereafter. Notwithstanding the foregoing, the Issuer may suspend the
effectiveness of the Shelf Registration Statement by written notice to
the Holders for a period not to exceed an aggregate of 45 days in any
90-day period (each such period, a "Suspension Period") if:
(x) an event occurs and is continuing as a result of
which the Shelf Registration Statement would, in the Issuer's
reasonable judgment, 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 not
misleading; and
(y) the Issuer reasonably determines that the
disclosure of such event at such time would have a material
adverse effect on the business of the Issuer (and its
subsidiaries, if any, taken as a whole);
PROVIDED that in the event the disclosure relates to a previously undisclosed
proposed or pending material business transaction, the disclosure of which would
impede the Issuer's ability to consummate such transaction, the Issuer may
extend a Suspension Period from 45 days to 60 days; provided, however, that
Suspension Periods shall not exceed an aggregate of 90 days in any 360-day
period.
(ii) Prepare and file with the Commission such amendments and
post-effective amendments to the Shelf Registration Statement as may be
necessary to keep the Shelf Registration Statement effective during the
Effectiveness Period; cause the Prospectus to be supplemented by any
required Prospectus supplement, and as so supplemented to be filed
pursuant to Rule 424 under the Securities Act, and to comply fully with
the applicable provisions of Rules 424 and 430A under the Securities
Act in a timely manner; and comply with the provisions of the
Securities Act with respect to the disposition of all securities
covered by the Shelf Registration Statement during the applicable
period in accordance with the intended method or methods of
distribution by the sellers thereof set forth in the Shelf Registration
Statement or supplement to the Prospectus.
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(iii) Advise the underwriter(s), if any, and selling Holders
promptly (but in any event within five Business Days) and, if requested
by such Persons, to confirm such advice in writing:
(A) when the Prospectus or any Prospectus supplement or
post-effective amendment has been filed, and, with respect to the
Shelf Registration Statement or any post-effective amendment
thereto, when the same has become effective,
(B) of any request by the Commission for amendments to the Shelf
Registration Statement or amendments or supplements to the
Prospectus or for additional information relating thereto,
(C) of the issuance by the Commission of any stop order
suspending the effectiveness of the Shelf Registration Statement
under the Securities Act or of the suspension by any state
securities commission of the qualification of the Transfer
Restricted Securities for offering or sale in any jurisdiction, or
the initiation of any proceeding for any of the preceding purposes,
or
(D) of the existence of any fact or the happening of any event,
during the Effectiveness Period, that makes any statement of a
material fact made in the Shelf Registration Statement, the
Prospectus, any amendment or supplement thereto, or any document
incorporated by reference therein untrue, or that requires the
making of any additions to or changes in the Shelf Registration
Statement or the Prospectus in order to make the statements therein
not misleading.
If at any time the Commission shall issue any stop order suspending the
effectiveness of the Shelf Registration Statement, or any state securities
commission or other regulatory authority shall issue an order suspending the
qualification or exemption from qualification of the Transfer Restricted
Securities under state securities or Blue Sky laws, the Issuer shall use its
reasonable best efforts to obtain the withdrawal or lifting of such order at the
earliest possible time.
(iv) Furnish to each of the selling Holders and each of the
underwriter(s), if any, before filing with the Commission, a copy of
the Shelf Registration Statement and copies of any Prospectus included
therein or any amendments or supplements to the Shelf Registration
Statement or Prospectus (other than documents incorporated by reference
after the initial filing of the Shelf Registration Statement), which
documents will be subject to the review of such holders and
underwriter(s), if any, for a period of at least ten Business Days, and
the Issuer will not file any Shelf Registration Statement or Prospectus
or any amendment or supplement to the Shelf Registration Statement or
Prospectus (other than documents incorporated by reference) to which a
selling Holder of Transfer Restricted Securities covered by the Shelf
Registration Statement or the underwriter(s), if any, shall reasonably
object within five Business Days after the receipt thereof. A selling
Holder or underwriter, if any, shall be deemed to have reasonably
objected to such filing if the Shelf Registration Statement, amendment,
Prospectus or supplement, as applicable, as proposed to be filed,
contains a material misstatement or omission. Notwithstanding the
foregoing, the Issuer shall not be required to furnish the selling
Holders with any
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amendment or supplement to the Shelf Registration Statement or
Prospectus filed solely to reflect changes to the amount of Notes held
by any particular Holder at the request of such Holder or immaterial
revisions to the information contained therein.
(v) Make available at reasonable times for inspection by one or
more representatives of the selling Holders, designated in writing by a
Majority of Holders whose Transfer Restricted Securities are included
in the Shelf Registration Statement, any underwriter participating in
any distribution pursuant to the Shelf Registration Statement, and any
attorney or accountant retained by such selling Holders or any of the
underwriter(s), all financial and other records, pertinent corporate
documents and properties of the Issuer as shall be reasonably necessary
to enable them to exercise any applicable due diligence
responsibilities, and cause the Issuer's officers, directors, managers
and employees to supply all information reasonably requested by any
such representative or representatives of the selling Holders,
underwriter, attorney or accountant in connection with the Shelf
Registration Statement after the filing thereof and before its
effectiveness; provided, however, that any information designated by
the Company as confidential at the time of delivery of such information
shall be kept confidential by the recipient thereof.
(vi) If requested by any selling Holders or the underwriter(s), if
any, promptly incorporate in the Shelf Registration Statement or
Prospectus, pursuant to a supplement or post-effective amendment if
necessary, such information as such selling Holders and underwriter(s),
if any, may reasonably request to have included therein, including,
without limitation: (1) information relating to the "Plan of
Distribution" of the Transfer Restricted Securities, (2) information
with respect to the principal amount of Notes or number of shares of
Common Stock being sold to such underwriter(s), (3) the purchase price
being paid therefor and (4) any other terms of the offering of the
Transfer Restricted Securities to be sold in such offering; and make
all required filings of such Prospectus supplement or post-effective
amendment as soon as reasonably practicable after the Issuer is
notified of the matters to be incorporated in such Prospectus
supplement or post-effective amendment. Notwithstanding the foregoing,
following the effective date of the Shelf Registration Statement, the
Issuer shall not be required to file more than one such supplement or
post-effective amendment to reflect changes in the amount of Notes held
by any particular Holder at the request of such Holder in any 30-day
period.
(vii) Furnish to each selling Holder and each of the
underwriter(s), if any, without charge, at least one copy of the
Shelf Registration Statement, as first filed with the Commission,
and of each amendment thereto (and any documents incorporated by
reference therein or exhibits thereto (or exhibits incorporated in
such exhibits by reference) as such Person may request).
(viii) Deliver to each selling Holder and each of the
underwriter(s), if any, without charge, as many copies of the
Prospectus (including each preliminary prospectus) and any amendment or
supplement thereto as such Persons reasonably may request; subject to
any notice by the Issuer in accordance with this Section 4(b) of the
existence of any fact or event of the kind described in Section
4(b)(iii)(D), the Issuer hereby consents to the use of the Prospectus
and any amendment or supplement thereto by each of the
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selling Holders and each of the underwriter(s), if any, in connection
with the offering and the sale of the Transfer Restricted Securities
covered by the Prospectus or any amendment or supplement thereto.
(ix) If an underwriting agreement is entered into and the
registration is an Underwritten Registration, the Issuer shall:
(A) upon request, furnish to each selling Holder and each
underwriter, in such substance and scope as they may reasonably
request and as are customarily made by issuers to underwriters in
primary underwritten offerings, upon the date of closing of any
sale of Transfer Restricted Securities in an Underwritten
Registration:
(1) a certificate, dated the date of such closing, signed
by the Chief Financial Officer of the Issuer confirming, as of
the date thereof, the matters set forth in Section 5(g) of the
Purchase Agreement and such other matters as such parties may
reasonably request;
(2) opinions, each dated the date of such closing, of
counsel to the Issuer covering such of the matters set forth in
Sections 5(c) and 5(d) of the Purchase Agreement as are
customarily covered in legal opinions to underwriters in
connection with primary underwritten offerings of securities;
and
(3) customary comfort letters, dated the date of such
closing, from the Issuer's independent certified public
accountants (and from any other accountants whose report is
contained or incorporated by reference in the Shelf
Registration Statement), in the customary form and covering
matters of the type customarily covered in comfort letters to
underwriters in connection with primary underwritten offerings
of securities;
(B) set forth in full in the underwriting agreement, if any,
indemnification provisions and procedures which provide rights no
less protective than those set forth in Section 6 hereof with
respect to all parties to be indemnified; and
(C) deliver such other documents and certificates as may be
reasonably requested by such parties to evidence compliance with
clause (A) above and with any customary conditions contained in the
underwriting agreement or other agreement entered into by the
selling Holders pursuant to this clause (ix).
(x) Before any public offering of Transfer Restricted Securities,
cooperate with the selling Holders, the underwriter(s), if any, and
their respective counsel in connection with the registration and
qualification of the Transfer Restricted Securities under the
securities or Blue Sky laws of such jurisdictions as the selling
Holders or underwriter(s), if any, may reasonably request and do any
and all other acts or things necessary or advisable to enable the
disposition in such jurisdictions of the Transfer Restricted Securities
covered by the Shelf Registration Statement; provided, however,
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that the Issuer shall not be required (A) to register or qualify as a
foreign corporation or a dealer of securities where it is not now so
qualified or to take any action that would subject it to the service of
process in any jurisdiction where it is not now so subject or (B) to
subject themselves to taxation in any such jurisdiction if they are not
now so subject.
(xi) Cooperate with the selling Holders and the underwriter(s), if
any, to facilitate the timely preparation and delivery of certificates
representing Transfer Restricted Securities to be sold and not bearing
any restrictive legends (unless required by applicable securities
laws); and enable such Transfer Restricted Securities to be in such
denominations and registered in such names as the Holders or the
underwriter(s), if any, may request at least two Business Days before
any sale of Transfer Restricted Securities made by such underwriter(s).
(xii) Use its best efforts to cause the Transfer Restricted
Securities covered by the Shelf Registration Statement to be registered
with or approved by such other U.S. governmental agencies or
authorities as may be necessary to enable the seller or sellers thereof
or the underwriter(s), if any, to consummate the disposition of such
Transfer Restricted Securities.
(xiii) Subject to Section 4(b)(i) hereof, if any fact or event
contemplated by Section 4(b)(iii)(D) hereof shall exist or have
occurred, use its reasonable best efforts to prepare a supplement or
post-effective amendment to the Shelf Registration Statement or related
Prospectus or any document incorporated therein by reference or file
any other required document so that, as thereafter delivered to the
purchasers of Transfer Restricted Securities, the Prospectus will not
contain an 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 not misleading.
(xiv) Provide CUSIP numbers for all Transfer Restricted Securities
not later than the effective date of the Shelf Registration Statement
and provide the Trustee under the Indenture with certificates for the
Notes that are in a form eligible for deposit with The Depository Trust
Company.
(xv) Cooperate and assist in any filings required to be made with
the NASD and in the performance of any due diligence investigation by
any underwriter that is required to be retained in accordance with the
rules and regulations of the NASD.
(xvi) Otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission and all reporting requirements
under the rules and regulations of the Exchange Act.
(xvii) Cause the Indenture to be qualified under the TIA not later
than the effective date of the Shelf Registration Statement required by
this Agreement, and, in connection therewith, cooperate with the
trustee and the holders of Notes to effect such changes to the
Indenture as may be required for such Indenture to be so qualified in
accordance with the terms of the TIA; and execute and use its best
efforts to cause the trustee thereunder to execute all documents that
may be required to effect such changes
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and all other forms and documents required to be filed with the
Commission to enable such Indenture to be so qualified in a timely
manner.
(xviii) Cause all Transfer Restricted Securities covered by the
Shelf Registration Statement to be listed or quoted, as the case may
be, on each securities exchange or automated quotation system on which
similar securities issued by the Issuer are then listed or quoted.
(xix) Provide promptly to each Holder upon written request each
document filed with the Commission pursuant to the requirements of
Section 13 and Section 15 of the Exchange Act after the effective date
of the Shelf Registration Statement.
(xx) If requested by the underwriters, make appropriate officers of
the Issuer available to the underwriters for meetings with prospective
purchasers of the Transfer Restricted Securities and prepare and
present to potential investors customary "road show" material in a
manner consistent with other new issuances of other securities similar
to the Transfer Restricted Securities.
(c) Each Holder agrees by acquisition of a Transfer Restricted Security
that, upon receipt of any notice from the Issuer of the existence of any fact of
the kind described in Section 4(b)(iii)(D) hereof, such Holder will, and will
use its reasonable best efforts to cause any underwriter(s) in an Underwritten
Offering to, forthwith discontinue disposition of Transfer Restricted Securities
pursuant to the Shelf Registration Statement until:
(i) such Holder has received copies of the supplemented or amended
Prospectus contemplated by Section 4(b)(xiii) hereof; or
(ii) such Holder is advised in writing (the "Advice") by the Issuer
that the use of the Prospectus may be resumed, and has received copies
of any additional or supplemental filings that are incorporated by
reference in the Prospectus.
If so directed by the Issuer, each Holder will deliver to the Issuer (at the
Issuer's expense) all copies, other than permanent file copies then in such
Holder's possession, of the Prospectus covering such Transfer Restricted
Securities that was current at the time of receipt of such notice of suspension.
(d) Each Holder who intends to be named as a selling Holder in the
Shelf Registration Statement shall furnish to the Issuer in writing, within 20
Business Days after receipt of a request therefor as set forth in a
questionnaire, such information regarding such Holder and the proposed
distribution by such Holder of its Transfer Restricted Securities as the Issuer
may reasonably request for use in connection with the Shelf Registration
Statement or Prospectus or preliminary Prospectus included therein. (The form of
the questionnaire is attached hereto as Exhibit A.) Holders that do not complete
the questionnaire and deliver it to the Issuer shall not be named as selling
securityholders in the Prospectus or preliminary Prospectus included in the
Shelf Registration Statement and therefore shall not be permitted to sell any
Transfer Restricted Securities pursuant to the Shelf Registration Statement.
Each Holder who intends to be named as a selling Holder in the Shelf
Registration Statement shall promptly furnish to the Issuer in writing such
other information as the Issuer may from time to time reasonably request in
writing.
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(e) Upon the effectiveness of the Shelf Registration Statement, each
Holder shall notify the Issuer at least three Business Days prior to any
intended distribution of Transfer Restricted Securities pursuant to the Shelf
Registration Statement (a "Sale Notice"), which notice shall be effective for
five Business Days. Each Holder of this Security, by accepting the same, agrees
to hold any communication by the Company in response to a Sale Notice in
confidence.
5. REGISTRATION EXPENSES.
(a) All expenses incident to the Issuer's performance of or compliance
with this Agreement shall be borne by the Issuer regardless of whether a Shelf
Registration Statement becomes effective, including, without limitation:
(i) all registration and filing fees and expenses (including
filings made by any Initial Purchasers or Holders with the NASD);
(ii) all fees and expenses of compliance with federal securities
and state Blue Sky or securities laws;
(iii) all expenses of printing (including printing of Prospectuses
and certificates for the Common Stock to be issued upon conversion of
the Notes), messenger and delivery services and telephone;
(iv) all fees and disbursements of counsel to the Issuer and,
subject to Section 5(b) below, the Holders of Transfer Restricted
Securities;
(v) all application and filing fees in connection with listing (or
authorizing for quotation) the Common Stock on a national securities
exchange or automated quotation system pursuant to the requirements
hereof; and
(vi) all fees and disbursements of independent certified public
accountants of the Issuer (including the expenses of any special audit
and comfort letters required by or incident to such performance).
The Issuer shall bear its internal expenses (including, without
limitation, all salaries and expenses of their officers and employees performing
legal, accounting or other duties), the expenses of any annual audit and the
fees and expenses of any Person, including special experts, retained by the
Issuer.
(b) In connection with the Shelf Registration Statement required by
this Agreement, the Issuer shall reimburse the Initial Purchasers and the
Holders of Transfer Restricted Securities being registered pursuant to the Shelf
Registration Statement, as applicable, for the reasonable fees and disbursements
of not more than one counsel, which shall be Xxxxx & Xxxx LLP, or such other
counsel as may be chosen by a Majority of Holders for whose benefit the Shelf
Registration Statement is being prepared.
12
6. INDEMNIFICATION AND CONTRIBUTION.
(a) The Issuer shall indemnify and hold harmless each Holder, such
Holder's officers and employees and each person, if any, who controls such
Holder within the meaning of the Securities Act (each, an "Indemnified Holder"),
from and against any loss, claim, damage or liability, joint or several, or any
action in respect thereof (including, but not limited to, any loss, claim,
damage, liability or action relating to resales of the Transfer Restricted
Securities), to which such Indemnified Holder may become subject, insofar as any
such loss, claim, damage, liability or action arises out of, or is based upon:
(i) any untrue statement or alleged untrue statement of a material
fact contained in (A) the Shelf Registration Statement or Prospectus or
any amendment or supplement thereto or (B) any blue sky application or
other document or any amendment or supplement thereto prepared or
executed by the Issuer (or based upon written information furnished by
or on behalf of the Issuer expressly for use in such blue sky
application or other document or amendment on supplement) filed in any
jurisdiction specifically for the purpose of qualifying any or all of
the Transfer Restricted Securities under the securities law of any
state or other jurisdiction (such application or document being
hereinafter called a "Blue Sky Application"); or
(ii) the omission or alleged omission to state therein any material
fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading,
and shall reimburse each Indemnified Holder promptly upon demand for any legal
or other expenses reasonably incurred by such Indemnified Holder in connection
with investigating or defending or preparing to defend against any such loss,
claim, damage, liability or action as such expenses are incurred; provided,
however, that the Issuer shall not be liable in any such case to the extent that
any such loss, claim, damage, liability or action arises out of, or is based
upon, any untrue statement or alleged untrue statement or omission or alleged
omission made in the Shelf Registration Statement or Prospectus or amendment or
supplement thereto or Blue Sky Application in reliance upon and in conformity
with written information furnished to the Issuer by or on behalf of any Holder
(or its related Indemnified Holder) specifically for use therein. The foregoing
indemnity agreement is in addition to any liability which the Issuer may
otherwise have to any Indemnified Holder.
(b) Each Holder, severally and not jointly, shall indemnify and hold
harmless the Issuer, its officers and employees and each person, if any, who
controls the Issuer within the meaning of the Securities Act, from and against
any loss, claim, damage or liability, joint or several, or any action in respect
thereof, to which the Issuer or any such officer, employee or controlling person
may become subject, insofar as any such loss, claim, damage or liability or
action arises out of, or is based upon:
(i) any untrue statement or alleged untrue statement of any
material fact contained in the Shelf Registration Statement or
Prospectus or any amendment or supplement thereto or any Blue Sky
Application; or
13
(ii) the omission or the alleged omission to state therein 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,
but in each case only to the extent that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Issuer by or on behalf of
such Holder (or its related Indemnified Holder) specifically for use therein,
and shall reimburse the Issuer and any such officer, employee or controlling
person promptly upon demand for any legal or other expenses reasonably incurred
by the Issuer or any such officer, employee or controlling person in connection
with investigating or defending or preparing to defend against any such loss,
claim, damage, liability or action as such expenses are incurred. The foregoing
indemnity agreement is in addition to any liability which any Holder may
otherwise have to the Issuer and any such officer, employee or controlling
person.
(c) Promptly after receipt by an indemnified party under this Section 6
of notice of any claim or the commencement of any action, the indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under this Section 6, notify the indemnifying party in writing of the
claim or the commencement of that action; provided, however, that the failure to
notify the indemnifying party shall not relieve it from any liability which it
may have under this Section 6 except to the extent it has been materially
prejudiced by such failure and, provided, further, that the failure to notify
the indemnifying party shall not relieve it from any liability which it may have
to an indemnified party otherwise than under this Section 6. If any such claim
or action shall be brought against an indemnified party, and it shall notify the
indemnifying party thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 6 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that a
Majority of Holders shall have the right to employ a single counsel to represent
jointly a Majority of Holders and their respective officers, employees and
controlling persons who may be subject to liability arising out of any claim in
respect of which indemnity may be sought by a Majority of Holders against the
Issuer under this Section 6, if a Majority of Holders shall have reasonably
concluded that there may be one or more legal defenses available to them and
their respective officers, employees and controlling persons that are different
from or additional to those available to the Issuer and its officers, employees
and controlling persons, the fees and expenses of a single separate counsel
shall be paid by the Issuer. No indemnifying party shall:
(i) without the prior written consent of the indemnified parties
(which consent shall not be unreasonably withheld) settle or compromise
or consent to the entry of any judgment with respect to any pending or
threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not
the indemnified parties are actual or potential parties to such claim
or action) unless such settlement, compromise or consent (1) includes
an unconditional release of each
14
indemnified party from all liability arising out of such claim, action,
suit or proceeding and (2) does not include a statement as to or an
admission of fault, culpability or a failure to act by or on behalf of
any indemnified party, or
(ii) be liable for any settlement of any such action effected
without its written consent (which consent shall not be unreasonably
withheld), but if settled with its written consent or if there be a
final judgment for the plaintiff in any such action, the indemnifying
party agrees to indemnify and hold harmless any indemnified party from
and against any loss of liability by reason of such settlement or
judgment.
(d) If the indemnification provided for in this Section 6 shall for any
reason be unavailable or insufficient to hold harmless an indemnified party
under Section 6(a) or 6(b) in respect of any loss, claim, damage or liability
(or action in respect thereof) referred to therein, each indemnifying party
shall, in lieu of indemnifying such indemnified party, contribute to the amount
paid or payable by such indemnified party as a result of such loss, claim,
damage or liability (or action in respect thereof):
(i) in such proportion as is appropriate to reflect the relative
benefits received by the Issuer from the offering and sale of the
Transfer Restricted Securities on the one hand and a Holder with
respect to the sale by such Holder of the Transfer Restricted
Securities on the other, or
(ii) if the allocation provided by clause (6)(d)(i) is not
permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause 6(d)(i)
but also the relative fault of the Issuer on the one hand and the
Holders on the other in connection with the statements or omissions or
alleged statements or alleged omissions that resulted in such loss,
claim, damage or liability (or action in respect thereof), as well as
any other relevant equitable considerations.
The relative benefits received by the Issuer on the one hand and a
Holder on the other with respect to such offering and such sale shall be deemed
to be in the same proportion as the total net proceeds from the offering of the
Notes purchased under the Purchase Agreement (before deducting expenses)
received by the Issuer as set forth in the table on the cover of the Offering
Memorandum, dated October 11, 2000, on the one hand, bear to the total proceeds
received by such Holder with respect to its sale if Transfer Restricted
Securities on the other.
The relative fault of the parties shall be determined by reference to
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Issuer on the one hand or the Holders on the other, the intent
of the parties and their relative knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The Issuer and each Holder agree that it would not be just and
equitable if the amount of contribution pursuant to this Section 6(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 first
sentence of this paragraph (d). The amount paid or payable by an indemnified
party as a result of the loss, claim, damage or liability, or action in respect
thereof, referred to above in this
15
Section 6 shall be deemed to include, for purposes of this Section 6, any legal
or other expenses reasonably incurred by such indemnified party in connection
with investigating, or defending or preparing to defend any such litigation,
investigation or proceeding by any governmental agency or body, or commenced or
threatened action or claim. Notwithstanding the provisions of this Section 6, no
Holder shall be required to contribute any amount in excess of the amount by
which the total price at which the Transfer Restricted Securities purchased by
it were resold exceeds the amount of any damages which such Holder has otherwise
been required to pay by reason of any untrue or alleged untrue statement or
omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. The Holders'
obligations to contribute as provided in this Section 6(d) are several and not
joint.
7. RULE 144A. In the event the Issuer is not subject to Section 13 or
15(d) of the Exchange Act, the Issuer hereby agrees with each Holder, for so
long as any Transfer Restricted Securities remain outstanding, to make available
to any Holder or beneficial owner of Transfer Restricted Securities in
connection with any sale thereof and any prospective purchaser of such Transfer
Restricted Securities from such Holder or beneficial owner, the information
required by Rule 144A(d)(4) under the Securities Act in order to permit resales
of such Transfer Restricted Securities pursuant to Rule 144A.
8. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS. No Holder may
participate in any Underwritten Registration hereunder unless such Holder:
(i) agrees to sell such Holder's Transfer Restricted Securities on
the basis provided in any underwriting arrangements approved by the
Persons entitled hereunder to approve such arrangements and
(ii) completes and executes all reasonable questionnaires, powers
of attorney, indemnities, underwriting agreements, lock-up letters and
other documents required under the terms of such underwriting
arrangements.
9. SELECTION OF UNDERWRITERS. The Holders of Transfer Restricted
Securities covered by the Shelf Registration Statement who desire to do so may
sell such Transfer Restricted Securities in an Underwritten Offering. In any
such Underwritten Offering, the investment banker or investment bankers and
manager or managers that will administer the offering will be selected by a
Majority of Holders whose Transfer Restricted Securities are included in such
offering; provided, that such investment bankers and managers must be reasonably
satisfactory to the Issuer.
10. MISCELLANEOUS.
(a) REMEDIES. The Issuer acknowledges and agrees that any failure by
the Issuer to comply with its obligations under Section 2 hereof may result in
material irreparable injury to the Initial Purchasers or the Holders for which
there is no adequate remedy at law, that it will not be possible to measure
damages for such injuries precisely and that, in the event of any such failure,
the Initial Purchasers or any Holder may obtain such relief as may be required
to specifically
16
enforce the Issuer's obligations under Section 2 hereof. The
Issuer further agrees to waive the defense in any action for specific
performance that a remedy at law would be adequate.
(b) ADJUSTMENTS AFFECTING TRANSFER RESTRICTED SECURITIES. The Issuer
shall not, directly or indirectly, take any action with respect to the Transfer
Restricted Securities as a class that would adversely affect the ability of the
Holders of Transfer Restricted Securities to include such Transfer Restricted
Securities in a registration undertaken pursuant to this Agreement.
(c) NO INCONSISTENT AGREEMENTS. The Issuer will not, on or after the
date of this Agreement, enter into any agreement with respect to its securities
that is inconsistent with the rights granted to the Holders in this Agreement or
otherwise conflicts with the provisions hereof. In addition, the Issuer shall
not grant to any of its security holders (other than the holders of Transfer
Restricted Securities in such capacity) the right to include any of its
securities in the Shelf Registration Statement provided for in this Agreement
other than the Transfer Restricted Securities. Other than the Stock Purchase
Agreement, dated January 18, 1995, between the Issuer and Pfizer, Inc., the
Stock Purchase Agreement, dated March 1, 1996, as amended, between the Issuer
and Xxxxxx Healthcare Corporation and the Stock Issuance Agreement, dated
November 4, 1999, between the Issuer and Alliance Pharmaceutical Corp., the
Issuer has not previously entered into any agreement (which has not expired or
been terminated) granting any registration rights with respect to its securities
to any Person which rights conflict with the provisions hereof.
(d) AMENDMENTS AND WAIVERS. This Agreement may not be amended, modified
or supplemented, and waivers or consents to or departures from the provisions
hereof may not be given, unless the Issuer has obtained the written consent of a
Majority of Holders.
(e) NOTICES. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telex, telecopier, or air
courier guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on the records of the
registrar under the Indenture or the transfer agent of the Common
Stock, as the case may be; and
(ii) if to the Issuer:
Inhale Therapeutic Systems, Inc.
000 Xxxxxxxxxx Xxxx
Xxx Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
With a copy to:
Xxxxxx Godward LLP
Five Palo Alto Square
0000 Xx Xxxxxx Xxxx
Xxxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxxxx, Esq.
17
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt acknowledged, if telecopied; and on the
next Business Day, if timely delivered to an air courier guaranteeing overnight
delivery.
(f) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit
of and be binding upon the successors and assigns of each of the parties,
including without limitation and without the need for an express assignment,
subsequent Holders of Transfer Restricted Securities; provided, however, that
(i) this Agreement shall not inure to the benefit of or be binding upon a
successor or assign of a Holder unless and to the extent such successor or
assign acquired Transfer Restricted Securities from such Holder and (ii) nothing
contained herein shall be deemed to permit any assignment, transfer or other
disposition of Transfer Restricted Securities in violation of the terms of the
Purchase Agreement or the Indenture. If any transferee of any Holder shall
acquire Transfer Restricted Securities, in any manner, whether by operation of
law or otherwise, such Transfer Restricted Securities shall be held subject to
all of the terms of this Agreement, and by taking and holding such Transfer
Restricted Securities such person shall be conclusively deemed to have agreed to
be bound by and to perform all of the terms and provisions of this Agreement.
(g) COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate 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.
(h) SECURITIES HELD BY THE ISSUER OR THEIR AFFILIATES. Whenever the
consent or approval of Holders of a specified percentage of Transfer Restricted
Securities is required hereunder, Transfer Restricted Securities held by the
Issuer or its "affiliates" (as such term is defined in Rule 405 under the
Securities Act) shall not be counted in determining whether such consent or
approval was given by the Holders of such required percentage.
(i) HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(j) GOVERNING LAW. This Agreement shall be governed by, and construed
in accordance with, the law of the State of New York, without regard to conflict
of laws principles thereof.
(k) SEVERABILITY. If any one or more of the provisions contained
herein, or the application thereof in any circumstance, is held invalid, illegal
or unenforceable, the validity, legality and enforceability of any such
provision in every other respect and of the remaining provisions contained
herein shall not be affected or impaired thereby.
(l) ENTIRE AGREEMENT. This Agreement is intended by the parties as a
final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to
18
herein with respect to the registration rights granted by the Issuer with
respect to the Transfer Restricted Securities. This Agreement supersedes all
prior agreements and understandings between the parties with respect to such
subject matter.
19
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
INHALE THERAPEUTIC SYSTEMS, INC.
By
--------------------------------------
Name:
Title:
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
DEUTSCHE BANK SECURITIES INC.
XXXXXX BROTHERS INC.
U.S. BANCORP XXXXX XXXXXXX INC.
By: Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
By
--------------------------------------
Authorized Signatory
20
EXHIBIT A
INHALE THERAPEUTIC SYSTEMS, INC.
FORM OF SELLING SECURITYHOLDER NOTICE AND QUESTIONNAIRE
The undersigned beneficial holder of 3 1/2% Convertible Subordinated
Notes due 2007 (the "Notes") of Inhale TherapeutIC Systems, Inc. (the "Issuer"),
or common stock, par value $0.0001 per share (the "Shares" and together with the
Notes, the "Transfer Restricted Securities") of the Issuer understands that the
Issuer has filed, or intends to file, with the Securities and Exchange
Commission (the "Commission") a registration statement (the "Shelf Registration
Statement"), for the registration and resale under Rule 415 of the Securities
Act of 1933, as amended (the "Securities Act"), of the Transfer Restricted
Securities in accordance with the terms of the Registration Rights Agreement,
dated as of October 17, 2000 (the "Registration Rights Agreement") between the
Issuer and Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, Xxxxxx Brothers
Inc., Deutsche Bank Securities Inc. and U.S. Bancorp Xxxxx Xxxxxxx Inc. A copy
of the Registration Rights Agreement is available from the Issuer upon request
at the address set forth below. All capitalized terms not otherwise defined
herein have the meaning ascribed thereto in the Registration Rights Agreement.
Each beneficial owner of Transfer Restricted Securities is entitled to
the benefits of the Registration Rights Agreement. In order to sell or otherwise
dispose of any Transfer Restricted Securities pursuant to the Shelf Registration
Statement, a beneficial owner of Transfer Restricted Securities generally will
be required to be named as a selling securityholder in the related Prospectus,
deliver a Prospectus to purchasers of Transfer Restricted Securities and be
bound by those provisions of the Registration Rights Agreement applicable to
such beneficial owner (including certain indemnification provisions, as
described below). BENEFICIAL OWNERS THAT DO NOT COMPLETE THIS NOTICE AND
QUESTIONNAIRE WITHIN 20 BUSINESS DAYS OF RECEIPT HEREOF AND DELIVER IT TO THE
ISSUER AS PROVIDED BELOW WILL NOT BE NAMED AS SELLING SECURITYHOLDERS IN THE
PROSPECTUS AND THEREFORE WILL NOT BE PERMITTED TO SELL ANY TRANSFER RESTRICTED
SECURITIES PURSUANT TO THE SHELF REGISTRATION STATEMENT.
Certain legal consequences arise from being named as a selling
securityholder in the Shelf Registration Statement and the related Prospectus.
Accordingly, holders and beneficial owners of Transfer Restricted Securities are
advised to consult their own securities law counsel regarding the consequences
of being named or not being named as a selling securityholder in the Shelf
Registration Statement and the related Prospectus.
NOTICE
The undersigned beneficial owner (the "Selling Securityholder") of
Transfer Restricted Securities hereby gives notice to the Issuer of its
intention to sell or otherwise dispose of Transfer Restricted Securities
beneficially owned by it and listed below in Item 3 (unless otherwise specified
under Item 3) pursuant to the Shelf Registration Statement. The undersigned, by
signing and returning this Notice and Questionnaire, understands that it will be
1
bound by the terms and conditions of this Notice and Questionnaire and the
Registration Rights Agreement.
Pursuant to the Registration Rights Agreement, the undersigned has
agreed to indemnify and hold harmless the Issuer, the Issuer's directors, the
Issuer's officers who sign the Shelf Registration Statement and each person, if
any, who controls the Issuer within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, from and against certain
losses arising in connection with statements concerning the undersigned made in
the Shelf Registration Statement or the related Prospectus in reliance upon the
information provided in this Notice and Questionnaire.
The undersigned hereby provides the following information to the Issuer
and represents and warrants that such information is accurate and complete:
QUESTIONNAIRE
1. (a) Full legal name of Selling Securityholder:
(b) Full legal name of registered holder (if not the same as (a)
above) through which Transfer Restricted Securities listed in
(3) below are held:
(c) Full legal name of DTC participant (if applicable and if not
the same as (b) above) through which Transfer Restricted
Securities listed in (3) are held:
2. Address for notices to Selling Securityholders:
Telephone:
Fax:
Contact Person:
3. Beneficial ownership of Transfer Restricted Securities:
(a) Type of Transfer Restricted Securities beneficially owned, and
principal amount of Notes or number of shares of Common Stock,
as the case may be, beneficially owned:
(b) CUSIP No(s). of such Transfer Restricted Securities
beneficially owned:
2
4. Beneficial ownership of the Issuer's securities owned by the Selling
Securityholder:
EXCEPT AS SET FORTH BELOW IN THIS ITEM (4), THE UNDERSIGNED IS NOT THE
BENEFICIAL OR REGISTERED OWNER OF ANY SECURITIES OF THE ISSUER OTHER
THAN THE TRANSFER RESTRICTED SECURITIES LISTED ABOVE IN ITEM (3)
("OTHER SECURITIES").
(a) Type and amount of Other Securities beneficially owned by the
Selling Securityholder:
(b) CUSIP No(s). of such Other Securities beneficially owned:
5. Relationship with the Issuer
Except as set forth below, neither the undersigned nor any of its
affiliates, officers, directors or principal equity holders (5% or
more) has held any position or office or has had any other material
relationship with the Issuer (or their predecessors or affiliates)
during the past three years.
State any exceptions here:
6. Plan of Distribution
Except as set forth below, the undersigned (including its donees or
pledgees) intends to distribute the Transfer Restricted Securities
listed above in Item (3) pursuant to the Shelf Registration Statement
only as follows (if at all). Such Transfer Restricted Securities may be
sold from time to time directly by the undersigned or, alternatively,
through underwriters, broker-dealers or agents. If the Transfer
Restricted Securities are sold through underwriters or broker-dealers,
the Selling Securityholder will be responsible for underwriting
discounts or commissions or agent's commissions. Such Transfer
Restricted Securities may be sold in one or more transactions at fixed
prices, at prevailing market prices at the time of sale, at varying
prices determined at the time of sale, or at negotiated prices. Such
sales may be effected in transactions (which may involve crosses or
block transactions):
(i) on any national securities exchange or quotation service on which
the Transfer Restricted Securities may be listed or quoted at the time of sale;
(ii) in the over-the-counter market;
(iii) in transactions otherwise than on such exchanges or services
or in the over-the-counter market; or
3
(iv) through the writing of options.
In connection with sales of the Transfer Restricted Securities or otherwise, the
undersigned may enter into hedging transactions with broker-dealers, which may
in turn engage in short sales of the Transfer Restricted Securities and deliver
Transfer Restricted Securities to close out such short positions, or loan or
pledge Transfer Restricted Securities to broker-dealers that in turn may sell
such securities.
State any exceptions here:
Note: In no event will such method(s) of distribution take the form of an
underwritten offering of the Transfer Restricted Securities without the prior
agreement of the Issuer.
The undersigned acknowledges that it understands its obligation to
comply with the provisions of the Exchange Act and the rules and regulations
promulgated thereunder relating to stock manipulation, particularly Regulation M
thereunder (or any successor rules or regulations), in connection with any
offering of Transfer Restricted Securities pursuant to the Shelf Registration
Statement. The undersigned agrees that neither it nor any person acting on its
behalf will engage in any transaction in violation of such provisions.
The Selling Securityholder hereby acknowledges its obligations under
the Registration Rights Agreement to indemnify and hold harmless certain persons
as set forth therein.
Pursuant to the Registration Rights Agreement, the Issuer has agreed
under certain circumstances to indemnify the Selling Securityholders against
certain liabilities.
In accordance with the undersigned's obligation under the Registration
Rights Agreement to provide such information as may be required by law for
inclusion in the Shelf Registration Statement, the undersigned agrees to
promptly notify the Issuer of any inaccuracies or changes in the information
provided herein that may occur subsequent to the date hereof at any time while
the Shelf Registration Statement remains effective. All notices hereunder and
pursuant to the Registration Rights Agreement shall be made in writing at the
address set forth below.
By signing below, the undersigned consents to the disclosure of the
information contained herein in its answers to items (1) through (6) above and
the inclusion of such information in the Shelf Registration Statement and the
related Prospectus. The undersigned understands that such information will be
relied upon by the Issuer in connection with the preparation or amendment of the
Shelf Registration Statement and the related Prospectus.
4
IN WITNESS WHEREOF, the undersigned, by authority duly given, has
caused this Notice and Questionnaire to be executed and delivered either in
person or by its duly authorized agent.
Dated:
Beneficial Owner
By:
--------------------------------------
Name:
Title:
Please return the completed and executed Notice and Questionnaire to Inhale
Therapeutic Systems, Inc. at:
Inhale Therapeutic Systems, Inc.
000 Xxxxxxxxxx Xxxx
Xxx Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
5
