Exhibit 10.39
STOCK AND WARRANT PURCHASE AGREEMENT
     THIS STOCK AND WARRANT PURCHASE AGREEMENT is dated March 26, 2008 (this
“Agreement”), by and between the undersigned (the “Purchaser”) and Alexza
Pharmaceuticals, Inc., a Delaware corporation (the “Company”), whereby the
parties hereby agree as follows:
     SECTION 1. PURCHASE AND SALE OF INITIAL SHARES AND WARRANT
          1.1 Issuance of Initial Shares and Warrant. Subject to the terms and
conditions set forth in this Agreement, and in reliance upon the Company’s and
the Purchaser’s representations set forth below, on the Closing Date, the
Purchaser shall buy and the Company shall sell 1,250,000 shares of the Company’s
Common Stock (“Initial Shares”) at a purchase price of $8.00 per share for a
total subscription amount equal to $10,000,000. At the Closing, the Purchaser
shall also (i) pay to the Company an amount equal to $0.0001 multiplied by the
number of Additional Shares (as defined below) that may be issued by the Company
to the Purchaser pursuant to Section 5.1 of this Agreement (the “Additional
Share Consideration”) and (ii) receive a warrant, in substantially the form of
Exhibit A attached hereto (the “Warrant”), to purchase up to a number of shares
of the Company’s Common Stock (the “Warrant Shares”) equal to the number
obtained by dividing $3,000,000 by the Warrant Exercise Price (as defined in the
Warrant). The Initial Shares, the Warrant, the Warrant Shares and the Additional
Shares (collectively, the “Securities”) have been registered on a registration
statement on Form S-3, File No. 333-141739 (the “Registration Statement”), which
has been declared effective by the Securities and Exchange Commission (“SEC”),
and remains effective as of the date hereof. A final Prospectus Supplement will
be delivered as required by law.
          1.2 Closing and Closing Date. The closing of the transactions
contemplated by Section 1.1 (the “Closing”) shall take place at 10:00 a.m.,
Pacific Daylight Time, on the first business day following the date on which the
last to be fulfilled or waived of the conditions set forth in Section 6 and
Section 7 hereof pertaining to the Closing shall have been fulfilled or waived
in accordance with this Agreement, or on such earlier date as may be mutually
agreed by the Company and the Purchaser (the “Closing Date”), at the offices of
Cooley Godward Kronish llp, 380 Interlocken Crescent, Suite 900, Broomfield,
Colorado 80021, or such other location as the Purchaser and the Company shall
mutually select.
     SECTION 2. PURCHASER REPRESENTATIONS AND WARRANTIES
     The Purchaser hereby represents and warrants as of the date hereof to the
Company as follows:
          2.1 The Purchaser is a corporation or other legal entity duly
organized, validly existing and in good standing under the jurisdiction of its
incorporation.

 

--------------------------------------------------------------------------------

 

          2.2 The Purchaser has the requisite corporate (or other entity) power
and authority to enter into and perform this Agreement and to purchase the
Securities in accordance with the terms hereof. The purchase by the Purchaser of
the Securities hereunder has been duly authorized by all necessary action on the
part of the Purchaser. Each of the Transaction Documents has been (or upon
delivery will be) duly executed by the Purchaser and is, or when delivered in
accordance with the terms hereof, will constitute, the valid and binding
obligation of the Purchaser enforceable against the Purchaser in accordance with
its terms, except as enforceability may be limited by applicable (i) bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors’
rights generally, or (ii) laws relating to the availability of specific
performance, injunctive relief or other equitable remedies.
          2.3 The Purchaser is purchasing the Securities for its own account as
principal, and not with a view towards distribution of such securities.
          2.4 The Purchaser is not a registered broker-dealer.
          2.5 There are no claims for brokerage commissions or finder’s fees or
similar compensation in connection with the transactions contemplated by this
Agreement based on any arrangement made by or on behalf of the Purchaser and the
Purchaser agrees to indemnify and hold the Company harmless against any costs or
damages incurred as a result of any such claim.
     SECTION 3. WIRE INSTRUCTIONS
     On the Closing Date, the Purchaser shall wire the amount set forth in
Section 1.1 to the Company to the account set forth below.
Company Wire Transfer Instructions:
Bank Address
State Street Bank
1200 Crown Colony
Quincy, MA 02169
          Via FED WIRE SYSTEM
State Street Bank
ABA # XXXXX
Account # XXXXX
For Final Credit to Alexza Corp. DE1805
Attn: Jim Hall
          Via SWIFT SYSTEM: (CASH EQUIVALENTS)
BIC SBOSUS3N
CHIPS Identifier: CH334291
State Street Bank FX Custody Account # XXXXX Fiduciary Investor
Services Account XXXXX
Corp. DE1805

2

--------------------------------------------------------------------------------

 

   Upon receipt of such amount the Company shall promptly cause its transfer
agent to transmit the Initial Shares electronically to the Purchaser by
crediting the account set forth below through the Deposit Withdrawal Agent
Commission system and shall deliver the Warrant to the Purchaser within 5
business days of the Closing Date. The Purchaser’s DWAC Instructions are as set
forth on the Purchaser’s signature pages attached hereto under the heading “DWAC
Instructions.”
     SECTION 4. COMPANY REPRESENTATIONS AND WARRANTIES
   The Company hereby represents and warrants as of the date hereof to the
Purchaser as follows:
          4.1 Organization and Good Standing. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware.
          4.2 Authorization; Enforcement; No Conflicts. The Company has the
requisite corporate power and authority to enter into and to consummate the
transactions contemplated by each of the Transaction Documents (as defined
below) and otherwise to carry out its obligations hereunder and thereunder. The
execution and delivery of each of the Transaction Documents by the Company and
the consummation by it of the transactions contemplated hereby and thereby have
been duly authorized by all necessary action on the part of the Company and no
further consent or action is required by the Company, its Board of Directors or
its stockholders. Each of the Transaction Documents has been (or upon delivery
will be) duly executed by the Company and is, or when delivered in accordance
with the terms hereof, will constitute, the valid and binding obligation of the
Company enforceable against the Company in accordance with its terms, except as
enforceability may be limited by applicable (i) bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors’ rights
generally, or (ii) laws relating to the availability of specific performance,
injunctive relief or other equitable remedies. The execution, delivery and
performance of the Transaction Documents by the Company and the consummation by
the Company of the transactions contemplated hereby and thereby do not and will
not: (i) conflict with or violate any provision of the Company’s certificate of
incorporation, bylaws or other organizational or charter documents as of the
date of execution of this Agreement, or (ii) subject to obtaining the Required
Approvals (as defined below), conflict with, or constitute a default (or an
event that with notice or lapse of time or both would become a default) under,
or give to others any rights of termination, amendment, acceleration or
cancellation (with or without notice, lapse of time or both) of, any agreement,
credit facility, debt or other instrument (evidencing a Company debt or
otherwise) or other understanding to which the Company is a party or by which
any property or asset of the Company is bound or affected, or (iii) result in a
violation of any law, rule, regulation, order, judgment, injunction, decree or
other restriction of any court or governmental authority to which the Company is
subject (including federal and state securities laws and regulations), or by
which any property or asset of the Company is bound or affected;

3

--------------------------------------------------------------------------------

 

except in the case of each of clauses (ii) and (iii), such as could not,
individually or in the aggregate: (i) adversely affect the legality, validity or
enforceability of this Agreement, the Warrant, and any other documents or
agreements executed in connection with the transactions contemplated hereunder
(the “Transaction Documents”), (ii) have or result in a material adverse effect
on the results of operations, assets, business operations or financial condition
of the Company, taken as a whole, or (iii) adversely impair the Company’s
ability to perform fully on a timely basis its obligations under any of the
Transaction Documents (any of (i), (ii) or (iii), a “Material Adverse Effect”).
          4.3 Filings, Consents and Approvals; Issuance of Securities. The
Company is not required to obtain any consent, waiver, authorization or order
of, give any notice to, or make any filing or registration with, any court or
other federal, state, local or other governmental authority or other Person in
connection with the execution, delivery and performance by the Company of the
Transaction Documents, other than (i) the filing of a Form 8-K disclosing the
transaction contemplated hereby, (ii) the filing with the SEC of the prospectus
supplement required by the Registration Statement pursuant to Rule 424(b) under
the Securities Act of 1933, as amended (the “1933 Act”) (the “Prospectus
Supplement”) supplementing the base prospectus forming part of the Registration
Statement (the “Prospectus”), (iii) the application(s) to The Nasdaq Global
Market (the “Principal Market”) for the listing of the Securities for trading
thereon in the time and manner required thereby, and (iv) applicable Blue Sky
filings (collectively, the “Required Approvals”). “Person” means an individual
or corporation, partnership, trust, incorporated or unincorporated association,
joint venture, limited liability company, joint stock company, government (or an
agency or subdivision thereof) or other entity of any kind. The Securities that
are being purchased hereunder are duly authorized and, when issued and paid for
in accordance with the applicable Transaction Documents, will be duly and
validly issued, fully paid and nonassessable, free and clear of all liens. The
Company has reserved from its duly authorized capital stock a sufficient number
of shares of Common Stock to enable it (i) to comply with its obligations to
issue the Additional Shares under Section 5.1 of this Agreement, and (ii) to
comply with its exercise obligations under the Warrant. The issuance of the
Securities have been registered by the Company under the 1933 Act under the
Registration Statement, subject to the filing of the Prospectus Supplement. The
Registration Statement is effective and available for the issuance of the
Securities thereunder and the Company has not received any notice that the SEC
has issued or intends to issue a stop-order with respect to the Registration
Statement or that the SEC otherwise has suspended or withdrawn the effectiveness
of the Registration Statement, either temporarily or permanently, or has
threatened in writing to do so. The “Plan of Distribution” section under the
Registration Statement permits the issuance and sale of the Securities
hereunder. Upon receipt of the Securities, the Purchaser will have good and
marketable title to such Securities. Neither the Company, nor any of its
Affiliates, nor any Person acting on its or their behalf has, directly or
indirectly, made any offers or sales of any security or solicited any offers to
buy any security, under circumstances that would cause this offering of the
Securities to be integrated with prior offerings by the Company for purposes of
any applicable stockholder approval provisions, including, without limitation,
under the rules and regulations of any exchange or automated quotation system on
which any of the securities of the Company are listed or designated, nor will
the Company take any action

4

--------------------------------------------------------------------------------

 

or steps that would cause the offering of the Securities to be integrated with
other offerings. Except as disclosed in the SEC Reports (as defined below), the
Company has not, in the 12 months preceding the date hereof, received notice
from the Principal Market on which the Common Stock is or has been listed or
quoted to the effect that the Company is not in compliance with the listing or
maintenance requirements of the Principal Market. The Company is, and has no
reason to believe that it will not in the foreseeable future continue to be, in
compliance with all such listing and maintenance requirements. The issuance and
sale of the Securities hereunder does not contravene the rules and regulations
of the Principal Market and no stockholder approval is required for the Company
to fulfill its obligations under the Transaction Documents. The Common Stock is
currently listed on the Principal Market.
          4.4 SEC Reports; Financial Statements. The Company has filed all
reports required to be filed by it under the 1933 Act and the Securities
Exchange Act of 1934, as amended (the “1934 Act”), including pursuant to Section
13(a) or 15(d) thereof, for the two (2) years preceding the date hereof (the
foregoing materials being collectively referred to herein as the “SEC Reports”)
on a timely basis or has received a valid extension of such time of filing and
has filed any such SEC Reports prior to the expiration of any such extension. As
of their respective dates, the SEC Reports complied in all material respects
with the requirements of the 1933 Act and the 1934 Act and the rules and
regulations of the SEC promulgated thereunder, and none of the SEC Reports, when
filed, contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. The Registration Statement and any prospectus included
therein, including the Prospectus and the Prospectus Supplement, complied in all
material respects with the requirements of the 1933 Act and the 1934 Act and the
rules and regulations of the SEC promulgated thereunder, and none of such
Registration Statement or any such prospectus, including the Prospectus and the
Prospectus Supplement, contain or contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the case of any prospectus
in the light of the circumstances under which they were made, not misleading.
The financial statements of the Company included in the SEC Reports comply in
all material respects with applicable accounting requirements and the rules and
regulations of the SEC with respect thereto as in effect at the time of filing.
Such financial statements have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis during the periods
involved (“GAAP”), except as may be otherwise specified in such financial
statements or the notes thereto, and fairly present in all material respects the
financial position of the Company as of and for the dates thereof and the
results of operations and cash flows for the periods then ended, subject, in the
case of unaudited statements, to normal, immaterial, year-end audit adjustments.
          4.5 Capitalization. The capitalization of the Company as of
December 31, 2007 is as set forth in the Company’s Annual Report on Form 10-K
for the fiscal year ended December 31, 2007, as filed with the SEC on March 17,
2008. Except as disclosed on Schedule 4.5, the Company has not issued any
capital stock since its most recently filed periodic report under the 1934 Act,
other than pursuant to the exercise of employee

5

--------------------------------------------------------------------------------

 

stock options under the Company’s stock option plans, the issuance of shares of
Common Stock to employees pursuant to the Company’s stock incentive plan and
pursuant to the conversion or exercise of outstanding common stock equivalents.
No Person has any right of first refusal, preemptive right, right of
participation, or any similar right to participate in the transactions
contemplated by the Transaction Documents, which right has not been waived prior
to the date hereof. Except as set forth in the SEC Reports or the Prospectus
Supplement, there are no outstanding options, warrants, script rights to
subscribe to, calls or commitments of any character whatsoever relating to, or
securities, rights or obligations convertible into or exchangeable for, or
giving any Person any right to subscribe for or acquire, any shares of Common
Stock, or contracts, commitments, understandings or arrangements by which the
Company or any subsidiary is or may become bound to issue additional shares of
Common Stock or common stock equivalents. Except as set forth in the SEC Reports
or the Prospectus Supplement, the issue and sale of the Securities will not
obligate the Company to issue shares of Common Stock or other securities to any
Person (other than the Purchaser) and will not result in a right of any holder
of Company securities to adjust the exercise, conversion, exchange or reset
price under such securities. All of the outstanding shares of capital stock of
the Company are validly issued, fully paid and nonassessable, have been issued
in material compliance with all federal and state securities laws and
requirements of the Trading Market, and none of such outstanding shares was
issued in violation of any preemptive rights or similar rights to subscribe for
or purchase securities. Except as set forth in the SEC Reports or the Prospectus
Supplement, there are no stockholders agreements, voting agreements or other
similar agreements with respect to the Company’s capital stock to which the
Company is a party or, to the knowledge of the Company, between or among any of
the Company’s stockholders.
          4.6 Material Changes. Since the date of the latest audited financial
statements included within the SEC Reports, except as specifically disclosed in
the SEC Reports: (i) there has been no event, occurrence or development that,
individually or in the aggregate, has had or that could result in a Material
Adverse Effect, (ii) the Company has not incurred any liabilities (contingent or
otherwise) other than (A) trade payables and accrued expenses incurred in the
ordinary course of business consistent with past practice and (B) liabilities
not required to be reflected in the Company’s financial statements pursuant to
GAAP or required to be disclosed in filings made with the SEC, (iii) the Company
has not altered its method of accounting or the identity of its auditors,
(iv) the Company has not declared or made any dividend or distribution of cash
or other property to its stockholders or purchased, redeemed or made any
agreements to purchase or redeem any shares of its capital stock, and (v) the
Company has not issued any equity securities to any officer, director or
Affiliate, except pursuant to existing Company stock option and purchase plans.
“Affiliate” means any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with a
Person, as such terms are used in and construed under Rule 144. “Rule 144” means
Rule 144 promulgated by the SEC pursuant to the 1933 Act, as such Rule may be
amended from time to time, or any similar rule or regulation hereafter adopted
by the SEC having substantially the same effect as such Rule.

6

--------------------------------------------------------------------------------

 

          4.7 Litigation. Except as disclosed in the SEC Reports, there are no
legal actions, suits, arbitrations or other legal, administrative or
governmental proceedings or investigations pending or, to the Company’s
knowledge, threatened against the Company or its properties, assets or business,
that, if adversely determined, would, individually or in the aggregate, affect
the execution and delivery of this Agreement or the performance by the Company
of its obligations under the Transaction Documents, or have a Material Adverse
Effect. The Company is not subject to or in default with respect to any
judgment, order or decree of any court or any governmental agency or
instrumentality, which default would have a Material Adverse Effect.
          4.8 Compliance. Neither the Company nor any subsidiary (i) is in
default under or in violation of (and no event has occurred that has not been
waived that, with notice or lapse of time or both, would result in a default by
the Company under), nor has the Company or any subsidiary received notice of a
claim that it is in default under or that it is in violation of, any indenture,
loan or credit agreement or any other agreement or instrument to which it is a
party or by which it or any of its properties is bound (whether or not such
default or violation has been waived), (ii) is in violation of any order of any
court, arbitrator or governmental body, or (iii) is in violation of any statute,
rule or regulation of any governmental authority or the Trading Market,
including without limitation all foreign, federal, state and local laws
applicable to its business, except in each case as would not have a Material
Adverse Effect.
          4.9 Sarbanes-Oxley; Internal Accounting Controls. To its knowledge,
the Company is in material compliance with all provisions of the Sarbanes-Oxley
Act of 2002 which are applicable to it as of the Closing Date. The Company
maintains a system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance with
management’s general or specific authorizations, (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
GAAP and to maintain asset accountability, (iii) access to assets is permitted
only in accordance with management’s general or specific authorization, and
(iv) the recorded accountability for assets is compared with the existing assets
at reasonable intervals and appropriate action is taken with respect to any
differences. The Company has established disclosure controls and procedures (as
defined in the 1934 Act Rules 13a-15(e) and 15d-15(e)) for the Company and
designed such disclosure controls and procedures to ensure that material
information relating to the Company, including its subsidiaries, is made known
to the certifying officers by others within those entities, particularly during
the period in which the Company’s most recently filed periodic report under the
1934 Act, as the case may be, is being prepared. The Company’s certifying
officers have evaluated the effectiveness of the Company’s disclosure controls
and procedures as of a date prior to the filing date of the most recently filed
periodic report under the 1934 Act (such date, the “Evaluation Date”). The
Company presented in its most recently filed periodic report under the 1934 Act
the conclusions of the certifying officers about the effectiveness of the
Company’s disclosure controls and procedures based on their evaluations as of
the Evaluation Date. Since the Evaluation Date, there have been no changes in
the Company’s internal control over financial reporting (as such term is defined
in Rules 13a-15(f) and 15d-15(f) under the

7

--------------------------------------------------------------------------------

 

1934 Act) that have materially affected, or are reasonably likely to materially
affect, the Company’s internal control over financial reporting.
          4.10 Application of Takeover Protections. The Company and its Board of
Directors have taken all necessary action, if any, in order to render
inapplicable any control share acquisition, business combination, poison pill
(including any distribution under a rights agreement) or other similar
anti-takeover provision under the Company’s Certificate of Incorporation (or
similar charter documents) or the laws of its state of incorporation that is or
could become applicable to the Purchaser as a result of the Purchaser and the
Company fulfilling their obligations or exercising their rights under the
Transaction Documents, including without limitation the Company’s issuance of
the Securities and the Purchaser’s ownership of the Securities.
          4.11 Disclosure. All disclosure provided to the Purchaser regarding
the Company, its business and the transactions contemplated hereby furnished by
or on behalf of the Company with respect to the representations and warranties
made herein are true and correct with respect to such representations and
warranties and do not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements made therein,
in light of the circumstances under which they were made, not misleading. The
Company acknowledges and agrees that the Purchaser is not making nor has it made
any representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in Section 2 hereof.
          4.12 Intellectual Property. The Company possesses such right, title
and interest in and to, patents, patent rights, trade secrets, inventions,
know-how, trademarks, trade names, copyrights, service marks and other
proprietary rights (“Intellectual Property”) material to the conduct of the
Company’s business except Intellectual Property the failure to possess of which
would not have a Material Adverse Effect. The Company has not received any
notice of infringement, misappropriation of conflict from any third party as to
such that has not been resolved or disposed of, which infringement,
misappropriation of conflict would if adversely decided individually or in the
aggregate have a Material Adverse Effect. The Company has not infringed,
misappropriated, or otherwise conflicted with Intellectual Property of any third
parties, which infringement, misappropriation or conflict would individually or
in the aggregate have a Material Adverse Effect.
          4.13 Permits. The Company has made all filings, applications and
submissions required by, and possesses all approvals, licenses, certificates,
certifications, clearances, consents, exemptions, marks, notifications, orders,
permits and other authorizations issued by, the appropriate federal, state or
foreign regulatory authorities (including, without limitation, the U.S. Food and
Drug Administration of the Department of Health and Human Services (the “FDA”),
and any other foreign, federal, state or local government or regulatory
authorities performing functions similar to those performed by the FDA)
necessary for the ownership or lease of its properties or to conduct its
businesses (collectively, “Permits”), except for such Permits the failure of
which to possess, obtain or make the same would not reasonably be expected to
have a Material

8

--------------------------------------------------------------------------------

 

Adverse Effect; and the Company has not received any written notice of
proceedings relating to the limitation, revocation, cancellation, suspension,
modification or non-renewal of any such Permit which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, would
have a Material Adverse Effect, and has no reason to believe that any such
license, certificate, permit or authorization will not be renewed in the
ordinary course.
          4.14 Clinical Studies. The clinical, pre-clinical and other studies
and tests conducted by or on behalf of or sponsored by the Company were and, if
still pending, are being conducted in accordance in all material respects with
all statutes, laws, rules and regulations, as applicable (including, without
limitation, those administered by the FDA or by any foreign, federal, state or
local governmental or regulatory authority performing functions similar to those
performed by the FDA) except as would not have a Material Adverse Effect. The
Company has not received any notices or other correspondence from the FDA or any
other foreign, federal, state or local governmental or regulatory authority
performing functions similar to those performed by the FDA with respect to any
ongoing clinical or pre-clinical studies or tests requiring the termination or
suspension of such studies or tests, except as would not have a Material Adverse
Effect.
     SECTION 5. COVENANTS OF THE PARTIES
          5.1 Issuance of Additional Shares. In the event that (i) the Pricing
Adjustment Point (as defined below) is not triggered, or (ii) a binding
agreement to acquire substantially all of the assets or a majority of the
outstanding voting securities of the Company (through merger, acquisition,
consolidation or otherwise) in which the aggregate purchase price is less than
$8.00 per share (such price to be adjusted for stock splits, stock dividends and
the like) is entered into prior to the earlier of (a) the triggering of a
Pricing Adjustment Point or (b) the end of the Pricing Period, then the Company
shall issue to the Purchaser 135,041 additional shares of Common Stock of the
Company (the “Additional Shares”). Such issuance of the Additional Shares shall
occur within 5 business days of the end of the Pricing Period. If the Company is
not required to issue the Additional Shares pursuant to this Section 5.1, the
Company shall, within 5 business days of the end of the Pricing Period, return
to the Purchaser the Additional Share Consideration that was paid by the
Purchaser at the Closing. For purposes of this Section 5.1, (i) the “Pricing
Adjustment Point” shall be triggered if during the Pricing Period (as defined
below) an Average Closing Price (as defined below) over any period of 45
consecutive Trading Days (as defined below) equals or exceeds $8.00 per share
(such price to be adjusted for stock splits, stock dividends and the like),
(ii) the “Average Closing Price” for any applicable period shall mean the
average of the closing prices of the Company’s Common Stock on the Principal
Market during such period, (iii) a "Trading Day” shall mean each Monday through
Friday, other than any day on which securities are not traded on the Principal
Market, and (iv) the “Pricing Period” shall mean the period beginning on the
Closing Date and ending on December 31, 2008.
          5.2 Maintenance of Registration Statement Effectiveness. Until such
time as the Initial Shares, the Additional Shares, if any, and the Warrant
Shares may be sold pursuant to Rule 144 (or its successor rule) of the 1933 Act
or any other rule or

9

--------------------------------------------------------------------------------

 

regulation of the SEC that may permit the Purchaser to sell such Securities to
the public without registration, the Company shall use commercially reasonable
efforts to maintain the effectiveness of the Registration Statement so long as
the Company has an obligation to issue the Additional Shares under Section 5.1
of this Agreement and so long as the Warrant is outstanding.
          5.3 Reservation of Additional Shares and Warrant Shares. As of the
date hereof, the Company has reserved and the Company shall continue to reserve
and keep available at all times, free of preemptive rights, a sufficient number
of shares of Common Stock for the purpose of (i) enabling the Company to issue
the Additional Shares pursuant to Section 5.1, and (ii) enabling the Company to
issue the Warrant Shares pursuant to any exercise of the Warrant.
          5.4 Operations in Singapore.
               (a) The Company intends to invest $10,000,000 over the next five
years to support its operations in Singapore. A draft business plan for the
Company’s lower housing assembly manufacturing strategy is in the form delivered
herewith (the “Business Plan”). The Company will review and update the Business
Plan periodically, provided that any amendments to the Business Plan shall
require the approval of the Purchaser, such approval not to be unreasonably
withheld.
               (b) Subject to Section 5.4(c), if the Company, including its
Affiliates or a joint venture of which the Company is stockholder or member,
does not achieve the milestones set forth in Exhibit B hereto (each a
“Milestone”, and collectively, the “Milestones”), the Warrant will become
exercisable. The exercisability of the Warrant shall be Purchaser’s sole and
exclusive remedy for the failure to achieve any of the Milestones.
               (c) If the Company, including its Affiliates or a joint venture
of which the Company is stockholder or member, fails to achieve any Milestone,
the Company shall have forty five (45) days after the Company’s receipt of a
Cure Notice (as defined on Exhibit B) from Purchaser to cure such failure before
the Warrant becomes exercisable; provided that, with respect to any Milestone,
the Company may request the consent of Purchaser for the modification of such
Milestone, or modification of the timing for the performance of such Milestone,
and Purchaser agrees that it will not unreasonably withhold consent to such
modification.
               (d) If the Warrant has not yet become exercisable and the Company
terminates operations in Singapore or transfers all, or substantially all, of
its Singapore operations outside of Singapore, without the prior written consent
of the Purchaser, then the Warrant will become exercisable. The exercisability
of the Warrant shall be Purchaser’s sole and exclusive remedy for such
termination or transfer.
          5.5 Disclosure of Transactions and Other Material Information. The
Company shall, prior to the opening of the Principal Market on the Closing Date,
(i) issue a press release reasonably acceptable to the Purchaser disclosing the
transactions

10

--------------------------------------------------------------------------------

 

contemplated hereby, and (ii) file a Current Report on Form 8-K with the SEC
(the “8-K Filing”) describing the transactions contemplated by the Transaction
Documents and including this Agreement and the Warrant as an exhibit thereto, in
the form required by the 1934 Act. Thereafter, the Company shall timely file any
filings and notices required by the SEC with respect to the transactions
contemplated by the Transaction Documents.
          5.6 Confidentiality. The Purchaser covenants that until such time as
the transactions contemplated by this Agreement are publicly disclosed by the
Company as described in Section 5.5, the Purchaser will maintain the
confidentiality of the terms and existence of the transaction contemplated
hereunder. The Purchaser hereby acknowledges (i) that it is bound by that
certain Confidentiality Agreement, dated as of October 31, 2007 by and between
the Company and the Purchaser (the “Confidentiality Agreement”), and (ii) that
it is aware (and that its officers, directors, employees, partners, attorneys,
advisors, accountants, agents or representatives have been advised) that the
United States securities laws prohibit any person who has material non-public
information about a company from purchasing or selling securities of such
company, or from communicating such information to any other person under
circumstances in which it is reasonably foreseeable that such person is likely
to purchase or sell such securities.
     SECTION 6. PURCHASER’S CLOSING CONDITIONS
     The obligation of the Purchaser to purchase the Initial Shares and the
Warrant on the Closing Date, as provided in Section 1.1 hereof, shall be subject
to the performance by the Company of its agreements theretofore to be performed
hereunder and to the satisfaction (or waiver), prior thereto or concurrently
therewith, of the following further conditions:
          6.1 Representations and Warranties. The representations and warranties
of the Company contained in Section 4 of this Agreement shall be true on and as
of the Closing Date in all material respects (except for such representations
and warranties that are qualified as to materiality, which shall be true in all
respects) as though such representations and warranties were made at and as of
such date.
          6.2 Compliance with Agreement. The Company shall have performed and
complied in all material respects with all agreements, covenants and conditions
contained in this Agreement which are required to be performed or complied with
by the Company prior to or on the Closing Date.
          6.3 Injunction. There shall be no effective injunction, writ,
preliminary restraining order or any order of any nature issued by a court of
competent jurisdiction directing that the transactions provided for herein or
any of them not be consummated as herein provided.
          6.4 Stop Orders No stop order or suspension of trading shall been
imposed by the Principal Market, the SEC or any other governmental regulatory
body with respect to public trading in the Common Stock.

11

--------------------------------------------------------------------------------

 

          6.5 Listing of the Common Stock. In connection with the issuance of
the Securities and the transactions contemplated hereby, the Company shall have
submitted to the Principal Market a “Notification Form: Listing of Additional
Shares” as well as any necessary supporting documentation.
          6.6 Officer’s Certificate. The Purchaser shall have received a
certificate, dated the Closing Date, signed by a duly authorized executive
officer of the Company, certifying that the conditions specified in the
foregoing Sections 6.1, 6.2, 6.3 and 6.4 hereof have been fulfilled.
          6.7 Secretary’s Certificate. The Purchaser shall have received a
certificate, dated the Closing Date, of the Secretary of the Company attaching:
(i) a true and complete copy of the certificate of incorporation of the Company,
with all amendments thereto; (ii) true and complete copies of the Company’s
bylaws, as amended, in effect as of such date; (iii) a certificate from the
Secretary of State of the State of Delaware as to the good standing of the
Company; (iv) certificates of good standing from the appropriate officials of
the jurisdictions in each state in which the Company is qualified to do business
as a foreign corporation; and (iv) resolutions of the Board of Directors of the
Company authorizing the execution and delivery of this Agreement, the
Transaction Documents, and the transactions contemplated hereby and thereby.
          6.8 Singapore Operations Letter of Intent. The Singapore Operations
Letter of Intent shall have been executed and delivered by the parties thereto.
          6.9 Legal Opinion. Counsel to the Company shall deliver a legal
opinion in substantially the form attached hereto as Exhibit C.
     SECTION 7. COMPANY’S CLOSING CONDITIONS
     The obligation of the Company to issue and deliver the Initial Shares and
the Warrant on the Closing Date as provided in Section 1.1 hereof, shall be
subject to the performance by the Purchaser of its agreements theretofore to be
performed hereunder and to the satisfaction (or waiver), prior thereto or
concurrently therewith, of the following further conditions:
          7.1 Representations and Warranties. The representations and warranties
of the Purchaser contained in Section 2 of this Agreement shall be true in all
material respects on and as of the Closing Date (except for such representations
and warranties that are qualified as to materiality, which shall be true in all
respects) as though such representations and warranties were made at and as of
such date.
          7.2 Compliance with Agreement. The Purchaser shall have performed and
complied in all material respects with all agreements, covenants and conditions
contained in this Agreement which are required to be performed or complied with
by them prior to or on the Closing Date.
          7.3 Purchaser’s Certificate. The Company shall have received a
certificate from the Purchaser, dated the Closing Date, signed by a duly
authorized

12

--------------------------------------------------------------------------------

 

representative of the Purchaser, certifying that the conditions specified in the
foregoing Sections 7.1 and 7.2 hereof have been fulfilled.
          7.4 Injunction. There shall be no effective injunction, writ,
preliminary restraining order or any order of any nature issued by a court of
competent jurisdiction directing that the transactions provided for herein or
any of them not be consummated as herein provided.
          7.5 Approval of Proceedings. All proceedings to be taken in connection
with the transactions contemplated by this Agreement, and all documents incident
thereto, shall be reasonably satisfactory in form and substance to the Company.
The Company shall have received copies of all documents or other evidence which
it may have reasonably requested in connection therewith in form and substance
reasonably satisfactory to the Company.
     SECTION 8. MISCELLANEOUS
          8.1 Governing Law; Jurisdiction; Jury Trial. All questions concerning
the construction, validity, enforcement and interpretation of this Agreement
shall be governed by the internal laws of the State of California, without
giving effect to any choice of law or conflict of law provision or rule (whether
of the State of California or any other jurisdictions) that would cause the
application of the laws of any jurisdictions other than the State of California.
Each party hereby irrevocably submits to the exclusive jurisdiction of the state
and federal courts sitting in the federal Northern District of California for
the adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is brought in an inconvenient forum or that the
venue of such suit, action or proceeding is improper. Each party hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof to such
party at the address for such notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY
WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF
THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
          8.2 Counterparts. This Agreement may be executed in two or more
identical counterparts, all of which shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each
party and delivered to the other party; provided that a facsimile signature or
signature in PDF format shall be considered due execution and shall be binding
upon the signatory thereto with the same force and effect as if the signature
were an original, not a facsimile or PDF, as applicable, signature.

13

--------------------------------------------------------------------------------

 

          8.3 Entire Agreement; Amendments. This Agreement supersedes all other
prior and contemporaneous oral or written agreements, discussions,
understandings and correspondence between the Purchaser, the Company, their
affiliates and Persons acting on their behalf with respect to the matters
discussed herein, and this Agreement, the instruments referenced herein and the
Confidentiality Agreement contain the entire understanding of the parties with
respect to the matters covered herein and therein and, except as specifically
set forth herein or therein, neither the Company nor the Purchaser makes any
representation, warranty, covenant or undertaking with respect to such matters.
Neither this Agreement nor any provisions hereof may be amended other than by an
instrument in writing signed by the Company and the Purchaser. No provision
hereof may be waived other than by an instrument in writing signed by the party
against whom enforcement is sought.
          8.4 Notices. Any notices, consents, waivers or other communications
required or permitted to be given under the terms of this Agreement must be in
writing and will be deemed to have been delivered: (i) upon receipt, when
delivered personally; (ii) upon receipt, when sent by facsimile (provided
confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party); or (iii) one business day after deposit with
an overnight courier service, in each case properly addressed to the party to
receive the same. The addresses and facsimile numbers for such communications
shall be:
          If to the Company:
Alexza Pharmaceuticals, Inc.
2091 Stierlin Court
Mountain View, California
Telephone Number: (650) 944-7000
Fax: (650) 944-7988
Attention: August Moretti
          With a copy to:
Cooley Godward Kronish LLP
380 Interlocken Crescent, Suite 900
Broomfield, Colorado 80021
Telephone Number: (720) 566-4000
Fax: (720) 566-4099
Attention: James C.T. Linfield, Esq.
                Brent D. Fassett, Esq.
If to the Purchaser, to its address and facsimile number set forth on the
signature page.
or to such other address and/or facsimile number and/or to the attention of such
other Person as the recipient party has specified by written notice given to
each other party 5 days prior to the effectiveness of such change. Written
confirmation of receipt (A) given

14

--------------------------------------------------------------------------------

 

by the recipient of such notice, consent, waiver or other communication,
(B) mechanically or electronically generated by the sender’s facsimile machine
containing the time, date, recipient facsimile number and an image of the first
page of such transmission or (C) provided by an overnight courier service shall
be rebuttable evidence of personal service, receipt by facsimile or receipt from
an overnight courier service in accordance with clause (i), (ii) or (iii) above,
respectively.
          8.5 Expenses. Each party shall pay all costs and expenses that it
incurs with respect to the negotiation, execution, delivery and performance of
the Transaction Documents; provided, however, that the Company shall reimburse
the reasonable fees of and expenses of the Purchaser, not to exceed $100,000.
          8.6 Successors and Assigns. The Company shall not assign this
Agreement or any rights or obligations hereunder (including by merger or
consolidation) without the prior written consent of the Purchaser. The Purchaser
shall not assign this Agreement or any rights or obligations hereunder
(including by merger or consolidation) without the prior written consent of the
Company.
          8.7 No Third Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person.
          8.8 Survival. The representations, warranties, agreements and
covenants of the Company and the Purchaser contained herein shall survive the
delivery and exercise of Securities, as applicable.
          8.9 Further Assurances. Each party shall do and perform, or cause to
be done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
any other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
********************

15

--------------------------------------------------------------------------------

 

     IN WITNESS WHEREOF, the parties hereto have caused this Stock and Warrant
Purchase Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.
ALEXZA PHARMACEUTICALS, INC.

By:  
/s/ Thomas B. King 
  Name: Thomas B. King
Title: President and Chief Executive Officer

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGE FOR PURCHASER FOLLOWS]

 

--------------------------------------------------------------------------------

 

[PURCHASER SIGNATURE PAGES TO ALEXZA PHARMACEUTICALS, INC. STOCK
AND WARRANT PURCHASE AGREEMENT]
     IN WITNESS WHEREOF, the undersigned have caused this Stock and Warrant
Purchase Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.
Name of Purchaser: BIOMEDICAL SCIENCES INVESTMENT FUND PTE LTD

                  Signature of Authorized Signatory of Purchaser:   /s/ Chu Swee
Yeok    
 
         
 
    Name of Authorized Signatory:   Chu Swee Yeok                        Title
of Authorized Signatory:   Director                        Email Address of
Purchaser:   sweeyeok@bio1capital.com                       

Address for Notice of Purchaser:
Biomedical Sciences Investment Fund Pte Ltd
20 Biopolis Way
#09-01 Centros
Singapore 138668
DWAC Instructions:
Morgan Stanley
555 California Street, Suite 1400
San Francisco, CA 94104
Main contact : Ted Buckley ted.buckley@morganstanley.com
Tel: 1-415-576-2150
Fax: 1-415-576-2637
Morgan Stanley
Account number : XXXX
Account name : Biomedical Sciences Investment Fund Pte Ltd
Morgan Stanley DTC # : 050

 

--------------------------------------------------------------------------------

 

Exhibit A
Common Stock Warrant

 

--------------------------------------------------------------------------------

 

Exhibit B
Milestones
1. The Company shall establish a subsidiary in Singapore within four weeks of
Closing.
2. The Company shall hire a President of its Singapore subsidiary within four
weeks of Closing.
3. The Company, or its Affiliates or a joint venture of which the Company is
stockholder or member, will accomplish the following activities in the time
periods described:

                  Year   Q1   Q2   Q3   Q4
2008
          Initiate recruitment of General Manager for Singapore Operations  
Create facilities/infrastructure plan for Singapore Operations
2009
  Hire General Manager for Singapore Operations   Complete quality assurance
policy and procedures   Initiate application specific integrated circuit
development activities and design of automated assembly equipment   Complete
transition plan of manual lower housing assembly (LHA) from Valtronic
2010
  Install printed circuit board assembly (PCBA) process and test equipment  
Install LHA automated assembly and test equipment   Complete PCBA manufacturing
process and test equipment   Complete transition from manual LHA manufacturing
process to automated LHA manufacturing process

The satisfaction of the milestones set forth in this Section 3 shall be
determined in good faith by the Company; provided that the Holder shall have
20 days from the end of the applicable period to dispute in writing such
determination if the Holder believes in good faith that the applicable milestone
has not been satisfied (the “Dispute Notice”). If the Holder delivers a Dispute
Notice to the Company, the Holder and Company shall negotiate in good faith to
resolve the dispute. If the dispute cannot be resolved within 14 days from the
receipt by the Company of the Dispute Notice, then the parties shall appoint a
mutually agreeable arbitrator. If the parties cannot agree upon an arbitrator,
an arbitrator shall be appointed from the International Panel members from the
United States of America by the Singapore International Arbitration Centre. The
arbitrator shall determine whether the applicable milestone has been satisfied
and such arbitration shall be binding on both parties and administered by the
Singapore International Arbitration Centre in accordance with the UNCITRAL
Arbitration Rules. If it is determined pursuant to the above procedures that an
applicable milestone has not been satisfied, the Holder may deliver to the
Company a notice of such failure (the “Cure Notice”) within 20 days after such
final determination.

 

--------------------------------------------------------------------------------

 

Exhibit C
Form of Opinion
     1. The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware with
requisite corporate power to own or lease, as the case may be, and operate its
properties, to conduct its business as described in the Prospectus and to
execute and deliver the Purchase Agreement and the Warrant and to perform its
obligations thereunder.
     2. The Company is duly qualified to do business as a foreign corporation
and is in good standing under the laws of California.
     3. Each of the Purchase Agreement and the Warrant has been duly and validly
authorized, executed and delivered by the Company and each such agreement
constitutes a valid and binding agreement of the Company enforceable against the
Company in accordance with its terms, except as enforcement may be limited by
applicable bankruptcy, insolvency, reorganization, arrangement, moratorium or
other similar laws affecting creditors’ rights, and subject to general equity
principles and to limitations on availability of equitable relief, including
specific performance.
     4. The Initial Shares, the Additional Shares and the Warrant Shares have
been duly authorized and, when sold and issued in accordance with the
Registration Statement, the related Prospectus and Prospectus Supplement, and
paid for by the Investor pursuant to the Purchase Agreement or the Warrant, as
applicable, will be validly issued, fully paid and nonassessable.
     5. The holders of outstanding shares of capital stock of the Company are
not entitled to preemptive rights arising under the Company’s Certificate of
Incorporation or Bylaws or under the DGCL.
     6. The Registration Statement has become effective under the Act; no stop
order suspending the effectiveness of the Registration Statement has been issued
and no proceedings for that purpose have been instituted or overtly threatened.
Any required filing of the Prospectus, and any supplement thereto, pursuant to
Rule 424(b) under the Act, has been made in the manner and within the time
period required by Rule 424(b).
     7. No consent, approval, authorization or filing with or order of any U.S.
Federal or Colorado court or governmental agency or body in the United States
having jurisdiction over the Company is required for the consummation by the
Company of the transactions contemplated by the Purchase Agreement and the
Warrant to be performed as of the date hereof, except such as have been obtained
under the Act and except such as may be required (i) under the blue sky laws of
any jurisdiction in connection with the purchase of the Initial Shares, the
Additional Shares, the Warrant and the Warrant Shares by the Investor, or
(ii) under the bylaws, rules and regulations of the Nasdaq National Market.
     8. The execution and delivery by the Company of the Purchase Agreement and
the Warrant and the performance of its obligations thereunder as of the date
hereof, will not result in (i) a violation of the charter or bylaws of the
Company, (ii) a material breach of or default under the terms of any Material
Agreement; or (iii) to our knowledge, a violation of any statute, law, rule, or
regulation which, in our experience is typically applicable to transactions of
the nature contemplated by the Purchase Agreement and the Warrant and is
applicable to the Company, or any order, writ, judgment, injunction, decree, or
award that has been entered against the Company and of which we are aware, in
each case the breach or violation of which would materially and adversely affect
the Company.
     9. To our knowledge, there is no action, proceeding or investigation
pending or overtly threatened against the Company before any court or
administrative agency that questions the validity of the Purchase Agreement or
the Warrant or that could reasonably be expected to result, either individually
or in the aggregate, in a material adverse effect on the Company and its
subsidiaries taken as a whole that has not been disclosed in the SEC Reports.