Exhibit 10.2

Execution Version

 

THIS AMENDED AND RESTATED PROMISSORY NOTE AND AGREEMENT TO LEND HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
OR ANY STATE SECURITIES LAW.  NO SALE, TRANSFER, PLEDGE OR ASSIGNMENT OF THIS
NOTE SHALL BE VALID OR EFFECTIVE UNLESS (A) SUCH TRANSFER IS MADE PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND IN COMPLIANCE WITH
ANY APPLICABLE STATE SECURITIES LAW OR (B) THE HOLDER SHALL DELIVER TO THE
COMPANY AN OPINION OF COUNSEL IN FORM AND SUBSTANCE REASONABLY ACCEPTABLE TO THE
COMPANY THAT SUCH TRANSFER IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND OF ANY APPLICABLE STATE SECURITIES LAW.

 

 

AMENDED AND RESTATED

PROMISSORY NOTE AND AGREEMENT TO LEND

 

Up to $20,000,000February 23, 2016

 

Alexza Pharmaceuticals, Inc., a Delaware corporation (the “Company”), for value
received, hereby amends and restates in its entirety that certain Amended and
Restated Convertible Promissory Note and Agreement to Lend dated June 17, 2015
(the “Original Note”), and the Company hereby promises to pay to Teva
Pharmaceuticals USA, Inc. (the “Holder”) under this Amended and Restated
Promissory Note and Agreement to Lend (“Note”) the Outstanding Advanced Amount
(as defined below), not to exceed an aggregate sum of $20,000,000, as provided
below. On the date hereof, the portion of indebtedness evidenced by the Original
Note shall be automatically renewed and extended, but not extinguished or
cancelled, in accordance with the terms of this Note. Nothing contained herein
shall be deemed a repayment or novation of the Original Note.

1.Interpretation.  All capitalized terms used in this Note, unless otherwise
defined herein, shall have the meanings given to them in that certain License
and Supply Agreement, dated May 7, 2013, as amended (the “License Agreement”),
between the Holder and the Company.  In this Note, (a) the word “including”
shall be deemed to be followed by the phrase “without limitation” or like
expression and (b) the singular shall include the plural and vice versa.

2.Definitions.  As used in this Note, the following terms shall be defined as
follows:

2.1“ADASUVE” shall mean that certain drug-device combination product that is
comprised of loxapine) delivered by the Staccato Device.

2.2“Business Day” shall mean a date Monday through Friday, but excluding any
date on which banks located in (a) the State of New York are authorized by State
or federal law to be closed or (b) Israel are authorized by applicable law to be
closed.

 

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2.3“Outstanding Advanced Amount” shall mean, at any given time, the aggregate
outstanding amount of all Advances (as defined below) made under this Note up to
such time, less any amounts already repaid or otherwise satisfied by Company to
Holder in accordance with Section 4.3 hereof. As of the date of this Note and as
set forth in Schedule I, $20,000,000 in Advances remains outstanding. 

3.Advances.

3.1Subject to the terms and conditions set forth herein, the Company has
previously requested and received the advances from the Holder as set forth on
Schedule I (each, an “Advance,” and collectively, the “Advances”).  The Company
shall not be allowed to reborrow any Advance under this Note after repaying that
Advance or any portion thereof.  

3.2The Advances made pursuant to this Note and all payments made hereunder shall
be recorded by the Holder on its books and records and promptly noted as an
amendment on Schedule I attached hereto.  The outstanding Advances as of the
date of this Note are currently recorded on Schedule I.  The failure to so
record any Advance, prepayment or payment shall not limit or otherwise affect
the obligation of the Company to pay any amounts due hereunder.  

4.Payment.

4.1Milestone Installment Payments.  The Outstanding Advanced Amount shall be
payable in four consecutive annual installments of $5,000,000 (the “Installment
Repayments”) with the first of such Installment Repayments being due and payable
on January 31 of the first calendar year following the calendar year in which
the aggregate annual net sales of ADASUVE and any other Staccato Devices within
the United States as presented in the Company’s financial statements, including
by the Company and its Affiliates, licensees, sublicensees and other commercial
partners, first reach $50,000,000 (the “Initial Installment Repayment”). The
three (3) remaining Installment Repayments shall be due and payable by the
Company to the Holder on January 31 of each of the three (3) consecutive years
following the year in which the Company makes the Initial Installment Repayment.

4.2Acceleration Event.  The Outstanding Advanced Amount shall be immediately due
and payable in full, without notice, demand, presentment, protest or other
formalities of any kind on or prior to the fifth (5th) Business Day after the
occurrence of an Event of Default (as defined in Section 5 hereof).

4.3Prepayments.  The Company shall have the right at any time, and without
penalty, to prepay any or all of the aggregate outstanding amount of all
Advances made under the Original Note up to such time.

5.Default.

5.1Event of Default.  Any of the following events shall constitute an “Event of
Default” hereunder: (a) the admission in writing by the Company of its
insolvency; (b) the filing of bankruptcy by the Company; (c) the execution by
the Company of a general assignment for the benefit of creditors; (d) the filing
by or against the Company of any petition in bankruptcy

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or any petition for relief under the provisions of the federal bankruptcy act or
any other state or federal law for the relief of debtors and the continuation of
such petition without dismissal for a period of sixty (60) days or more; (e) the
failure of Company to perform any of its obligations under this Note, other than
the failure to pay any amount due under the terms of this Note when due and
payable, after written notice to the Company of such alleged failure to perform
and a ten (10) Business Day opportunity to cure; (f) the failure of the Company
to pay make any payment under this Note within two (2) Business Days of the date
due and payable; (g) the failure of the Company to perform any material
obligation under the License Agreement, that certain Stock Issuance Agreement,
dated February 23, 2016, by and between the Company and the Holder or that
certain Amended and Restated Registration Rights Agreement, dated February 23,
2016, by and between the Company and the Holder, after written notice to the
Company of such alleged failure to perform and a ten (10) Business Day
opportunity to cure; (h) the appointment of a receiver or trustee to take
possession of the property or assets of the Company; (i) any dissolution of the
Company; (j) the adoption by the Company of any plan of liquidation; (k) the
commencement against the Company of any case, proceeding or other action seeking
issuance of a warrant of attachment, execution, distraint or similar process
against all or any substantial part of its assets which results in the entry of
an order for any such relief which shall not have been vacated, discharged, or
stayed or bonded pending appeal within 60 days from the entry thereof; or (l)
any challenge or contest by the Company in any action, suit or proceeding of the
validity or enforceability of this Note.  

5.2Remedies.  During the continuance of an Event of Default, the Holder shall
have the right to (a) accelerate the payment of the Outstanding Advanced Amount
and (b) enforce this Note by exercise of the rights and remedies granted to him,
her or it by applicable law.  The Company hereby waives demand, notice,
presentment, protest and notice of dishonor.

5.3Equitable Remedies.  The Company stipulates that the Holder’s remedies at law
in the event of any default or threatened default by the Company in the
performance of or compliance with any of the terms of this Note may not be
adequate to compensate the Holder to the extent permitted by law and that such
terms may be specifically enforced by a decree for the specific performance of
any agreement contained herein or by an injunction against a violation of any of
the terms hereof or otherwise.

5.4Waiver; Cumulative Remedies.  No course of dealing or any delay or failure to
exercise any right hereunder on the Holder’s part shall operate as a waiver of
such right or otherwise prejudice the Holder’s rights, powers or remedies.  No
single or partial waiver by the Holder of any provision of this Note or of any
breach or default hereunder or of any right or remedy shall operate as a waiver
of any other provision, breach, default, right or remedy or of the same
provision, breach, default, right or remedy on a future occasion.  The Holder’s
rights and remedies are cumulative and are in addition to all rights and
remedies that the Holder may have in law or in equity or by statute or
otherwise.

6.Representations and Warranties of the Company.  The Company hereby represents
and warrants to the Holder that as of the date hereof, except as set forth in
the schedules delivered herewith:

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6.1Organization, Good Standing and Qualification.  The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware and has all requisite corporate power and authority to carry
on its business as now conducted and to own its properties. The Company is duly
qualified to do business as a foreign corporation and is in good standing in
each jurisdiction in which the conduct of its business or its ownership or
leasing of property makes such qualification or leasing necessary except where
the failure to do so would not reasonably be expected to cause a material
adverse effect on the operations, business or financial condition of the
Company.   

6.2Authorization.  The Company has full power and authority and has taken all
requisite action on the part of the Company, its officers, directors and
stockholders necessary for (a) the authorization, execution and delivery of this
Note, and (b) the authorization of the performance of all obligations of the
Company hereunder.  This Note constitutes the legal, valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability, relating
to or affecting creditors’ rights generally.

6.3Valid Issuance.  This Note has been duly and validly authorized.  

6.4Consents.  The execution, delivery and performance by the Company of this
Note requires no consent of, action by or in respect of, or filing with, any
person, governmental body, agency, or official other than such filings as shall
have been made prior to and shall be effective on and as of the date hereof and
such filings required to be made after the date hereof pursuant to applicable
state and federal securities laws which the Company undertakes to file within
the applicable time periods.  

6.5No Conflict, Breach, Violation or Default.  The execution, delivery and
performance of this Note by the Company will not conflict with or result in a
breach or violation of any of the terms and provisions of, or constitute a
default under (a) the Company’s certificate of formation or the Company’s
bylaws, both as in effect on the date hereof, (b) any statute, rule, regulation
or order of any governmental agency or body or any court, domestic or foreign,
having jurisdiction over the Company or any of its assets or properties or (c)
any agreement or instrument to which the Company is a party or by which the
Company is bound.

7.Amendments and Waivers.  No provision of this Note may be amended and the
observance of any provision of this Note may not be waived (either generally or
in a particular instance and either retrospectively or prospectively) without
the prior written consent of the Company and the Holder.  

8.Severability.  If any provision of this Note is determined to be invalid,
illegal or unenforceable, in whole or in part, the validity, legality and
enforceability of any of the remaining provisions or portions of this Note shall
not in any way be affected or impaired thereby.

9.Binding Effect.  This Note shall be binding upon, and shall inure to the
benefit of, the Company and the Holder and their respective successors and
assigns.

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10.Notices.  Any notice required by any provision of this Note to be given to
the Holder shall be in writing and may be delivered by personal service or
facsimile or sent by registered or certified mail, return receipt requested,
with postage thereon fully prepaid.  All such communications shall be addressed
to the Holder at his, her or its address appearing on the books of the Company.
 

11.Replacement.  Upon the Company’s receipt of reasonably satisfactory evidence
of the loss, theft, destruction or mutilation of this Note and (a) in the case
of any such loss, theft or destruction, upon delivery of indemnity reasonably
satisfactory to the Company in form and amount or (b) in the case of any such
mutilation, upon surrender of this Note for cancellation, the Company, at its
expense, shall execute and deliver, in lieu thereof, a new Note.

12.No Rights as Stockholder.  This Note, as such, shall not entitle the Holder
to any rights as a stockholder of the Company, except as otherwise specified
herein.

13.Headings.  The descriptive headings in this Note are inserted for convenience
only and do not constitute a part of this Note.  

14.Governing Law; Consent to Jurisdiction; Waiver of Jury Trial.  The validity,
meaning and effect of this Note shall be determined in accordance with the laws
of the State of New York, without regard to principles of conflicts of law.  The
Company and the Holder each irrevocably submits to the exclusive jurisdiction of
the courts of the State of New York located in New York City, New York and the
United States District Court for the Southern District of New York for the
purpose of any suit, action, proceeding or judgment relating to or arising out
of this Note and the transactions contemplated hereby.  Service of process in
connection with any such suit, action or proceeding may be served on each party
hereto anywhere in the world by the same methods as are specified for the giving
of notices under this Note.  The Company and the Holder each irrevocably waives
any objection to the laying of venue of any such suit, action or proceeding
brought in such courts and irrevocably waives any claim that any such suit,
action or proceeding brought in any such court has been brought in an
inconvenient forum.  EACH OF THE COMPANY AND THE HOLDER HEREBY WAIVES ANY RIGHT
TO REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS NOTE AND
REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.

15.Right of Offset.  Without limiting any of the Holder’s other rights or
remedies hereunder or otherwise, the Company hereby acknowledges and agrees that
the Holder shall have the right to reduce any amount payable by the Holder to
the Company pursuant to the License Agreement by any amount owed by the Company
and not timely paid to the Holder in accordance with the terms of this Note.

16.Taxes. Any and all payments by or on account of any obligation of the Company
under this Note shall be made without deduction or withholding for any taxes;
provided, however, if the Holder transfers the Note to a non-U.S. person or
Affiliate (a “non-U.S. Transferee”), the Company shall deduct and withhold from
payments due to such non-U.S. Transferee pursuant to this Note any taxes
required to be deducted and withheld under applicable law.  Any such withheld
taxes shall be timely paid over to the appropriate governmental

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authority in accordance with applicable law. To the extent that taxes are
deducted and withheld from payments otherwise payable to a non-U.S. Transferee
pursuant to this Note, and are paid to the appropriate governmental authority,
such deducted and withheld amounts shall be treated for all purposes of this
Note as having been paid to the person in respect of whom such deduction and
withholding was made.  The Company shall provide such non-U.S. Transferee with
proof reasonably satisfactory to such non-U.S. Transferee of any taxes withheld
and paid to any governmental authority on behalf of such non-U.S. Transferee. If
a payment is payable (in whole or in part) in consideration other than cash to a
non-U.S. Transferee pursuant to this Note and if the cash portion of any such
payment is insufficient to satisfy all required tax withholding obligations, the
Company shall retain an amount of the non-cash consideration otherwise payable
or deliverable to such non-U.S. Transferee equal in value to the amount required
to satisfy any applicable withholding taxes (as reasonably determined by the
Company in good faith).  On or prior to the date hereof, the Holder shall
deliver to the Company two executed originals of IRS Form W-9 certifying that
the Holder is not subject to U.S. federal backup withholding.  As soon as
reasonably practicable following any transfer by the Holder of the Note to a
non-U.S. Transferee, such non-U.S. Transferee shall deliver to the Company (a)
two executed originals of the applicable IRS Form W-8, and (b) to the extent
such non-U.S. Transferee is eligible for an exemption from or reduction of any
otherwise applicable withholding tax, any other applicable documentation
required or reasonably requested by the Company to establish that such non-U.S.
Transferee is entitled to such exemption or reduction.  Any non-U.S. Transferee
and the Company shall use commercially reasonable efforts to establish any
applicable exemption from or reduction of otherwise applicable withholding taxes
with respect to payments made hereunder.  If any payment hereunder to a non-U.S.
Transferee is subject to Sections 1471-1474 of the U.S. Internal Revenue Code
(“FATCA”), the applicable non-U.S. Transferee shall provide the Company with all
documentation prescribed by applicable law or reasonably requested by the
Company in order for the Company to comply with its obligations under, and
determine the amount, if any, of withholding taxes imposed pursuant to FATCA. 

17.Assignment. This Note shall not be assigned or otherwise transferred, nor may
any rights or obligations hereunder be assigned or transferred, by the Company
to any third party without the prior written consent of the Holder; provided,
however, that the Company may assign or otherwise transfer all or any part of
this Note without the consent of the Holder to an entity that acquires all or
substantially all of the business or assets of the Company, whether by merger,
acquisition or otherwise. Any assignment of this Note in contravention of this
Section 17 shall be null and void.

[signature page follows]

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IN WITNESS WHEREOF, the Company and the Holder have entered into this Note as of
the date hereinabove written.

 

ALEXZA PHARMACEUTICALS, INC.

 

 

By:     /s/ Thomas B. King

Name:   Thomas King

Title:     President and Chief Executive Officer

 

 

 

TEVA PHARMACEUTICALS USA, INC.

 

 

By:     /s/ Deborah A. Griffin

Name:   Deborah A. Griffin

Title:     SVP & Chief Accounting Officer

 

 

 

By:     /s/ Jamie Berlanska

Name:   Jamie Berlanska  

Title:     VP Finance and Controller,
Teva Americas

 

 

 

 

 

 

Signature Page to Amended and Restated

Promissory Note and Agreement to Lend

 

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SCHEDULE I

 

Date of Advance, Payment, or Payment Offset

Amount of Advance, Payment, or Payment Offset

Aggregate Outstanding Advanced Amount

9/27/13

$10,000,000

$10,000,000

12/11/13

$5,000,000

$15,000,000

3/18/14

$5,000,000

$20,000,000

6/13/14

$5,000,000

$25,000,000

2/23/16

$5,000,000

$20,000,000

 

 

 

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