EXHIBIT 10.20



 




Exhibit 10.20



THIS
WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED OR ANY APPLICABLE STATE
SECURITIES LAW, AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED
WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR PURSUANT
TO RULE 144 AND AN EXEMPTION UNDER APPLICABLE STATE LAW OR AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE CORPORATION AND ITS
COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.




WARRANT
TO PURCHASE STOCK



Corporation: Alexza
Molecular Delivery Corporation, a Delaware corporation



Number
of Shares: 21,429



Class
of Stock: Series B Preferred



Initial
Exercise Price: $1.40 per share



Issue
Date: March 20, 2002



Expiration
Date: the later of (i) March 20, 2012 or
(ii) seven years after the date of the Company’s initial
public offering.



     THIS
WARRANT CERTIFIES THAT, for the agreed upon value of $1.00 and for
other good and valuable consideration, SILICON VALLEY BANK
(“Holder”) is entitled to purchase the number of fully paid
and nonassessable shares of the class of securities (the
“Shares”) of the corporation (the “Company”) at
the initial exercise price per Share (the “Warrant Price”)
all as set forth above and as adjusted pursuant to Article 2 of
this Warrant, subject to the provisions and upon the terms and
conditions set forth in this Warrant.




ARTICLE
1.  EXERCISE.



1.1  Method
of Exercise.  Holder may exercise this Warrant by delivering a duly executed Notice
of Exercise in substantially the form attached as Appendix 1 to
the principal office of the Company. Unless Holder is exercising the
conversion right set forth in Section 1.2, Holder shall also
deliver to the Company a check for the aggregate Warrant Price for
the Shares being purchased.



1.2  Conversion
Right.  In lieu of exercising this Warrant as specified
in Section 1.1, Holder may from time to time convert this
Warrant, in whole or in part, into a number of Shares determined by
dividing (a) the aggregate fair market value of the Shares or
other securities otherwise issuable upon exercise of this Warrant
minus the aggregate Warrant Price of such Shares by (b) the fair
market value of one Share. The fair market value of the Shares shall
be determined pursuant to Section 1.3.



1.3  Fair
Market Value.  If the Shares are traded in a public
market, the fair market value of the Shares shall be the closing price
of the Shares (or the closing price of the Company’s stock into
which the Shares are convertible) reported for the business day
immediately before Holder delivers its Notice of Exercise to the
Company. If the Shares are not traded in a public market, the Board of
Directors of the Company shall determine fair market value in its
reasonable good faith judgment.




1.4  Delivery
of Certificate and New Warrant.  Promptly after Holder exercises or
converts this Warrant, the Company shall deliver to Holder
certificates for the Shares acquired and, if this Warrant has not been
fully exercised or converted and has not expired, a new Warrant
representing the Shares not so acquired.



1.5  Replacement
of Warrants.  On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or
mutilation of this Warrant and, in the case of loss, theft or
destruction, on delivery of an indemnity agreement reasonably
satisfactory in form and amount to the Company or, in the case of
mutilation, or surrender and cancellation of this Warrant, the
Company shall execute and deliver, in lieu of this Warrant, a new
warrant of like tenor.





 











 




     
1.6   Assumption on Sale, Merger, or Consolidation of the
Company.


          
1.6.1   “Acquisition”. For the purpose of this
Warrant, “Acquisition” means any sale, license, or other
disposition of all or substantially all of the assets of the Company,
or any reorganization, consolidation, or merger of the Company where
the holders of the Company’s securities before the transaction
beneficially own less than 50% of the outstanding voting securities
of the surviving entity after the transaction.


          
1.6.2   Assumption of Warrant. Upon the closing of any
Acquisition, the successor entity shall assume the obligations of
this Warrant, and this Warrant shall be exercisable for the same
securities, cash, and property as would be payable for the Shares
issuable upon exercise of the unexercised portion of this Warrant as
if such Shares were outstanding on the record date for the
Acquisition and subsequent closing. The Initial Exercise Price and/or
number of Shares shall be adjusted accordingly.


ARTICLE 2.
ADJUSTMENTS TO THE SHARES.


     
2.1   Stock Dividends, Splits, Etc. If the Company
declares or pays a dividend on its common stock (or the Shares if the
Shares are securities other than common stock) payable in common
stock, or other securities, subdivides the outstanding common stock
into a greater amount of common stock, or, if the Shares are
securities other than common stock, subdivides the Shares in a
transaction that increases the amount of common stock into which the
Shares are convertible, then upon exercise of this Warrant, for each
Share acquired, Holder shall receive, without cost to Holder, the
total number and kind of securities to which Holder would have been
entitled had Holder owned the Shares of record as of the date the
dividend or subdivision occurred. If the outstanding shares are
combined or consolidated, by reclassification or otherwise, into a
lesser number of shares, the Initial Exercise Price shall be
proportionately increased.


     
2.2   Reclassification, Exchange, Combinations or
Substitution. Upon any reclassification, exchange, substitution,
or other event that results in a change of the number and/or class of
the securities issuable upon exercise or conversion of this Warrant,
Holder shall be entitled to receive, upon exercise or conversion of
this Warrant, the number and kind of securities and property that
Holder would have received for the Shares if this Warrant had been
exercised immediately before such reclassification, exchange,
substitution, or other event. Such an event shall include any
automatic conversion of the outstanding or issuable securities of the
Company of the same class or series as the Shares to common stock
pursuant to the terms of the Company’s Articles of Incorporation
upon the closing of a registered public offering of the
Company’s common stock. The Company or its successor shall
promptly issue to Holder a new Warrant for such new securities or
other property. The new Warrant shall provide for adjustments which
shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Article 2 including, without
limitation, adjustments to the Initial Exercise Price and to the
number of securities or property issuable upon exercise of the new
Warrant. The provisions of this Section 2.2 shall similarly
apply to successive reclassifications, exchanges, substitutions, or
other events.



     
2.3   Adjustments for Diluting Issuances. The Warrant
Price and the number of Shares issuable upon exercise of this Warrant
or, if the Shares are Preferred Stock, the number of shares of common
stock issuable upon conversion of the Shares, shall be subject to
adjustment, from time to time in the manner set forth in the
Company’s Articles (Certificate) of Incorporation. The
provisions set forth for the Shares in the Company’s Articles
(Certificate) of Incorporation relating to the above in effect as of
the Issue Date may not be amended, modified or waived, without the
prior written consent of Holder unless such amendment, modification
or waiver affects Holder in the same manner as they affect all other
shareholders of the same series of shares granted to the Holder.


 








 



     
2.4 No Impairment. The Company shall not, by
amendment of its Articles of Incorporation or through a
reorganization transfer of assets, consolidation, merger,
dissolution, issue, or sale of securities or any other voluntary
action, avoid or seek to avoid the observance or performance of
any of the terms to be observed or performed under this Warrant
by the Company, but shall at all times in good faith assist in
carrying out of all the provisions of this Article 2 and in
taking all such action as may be necessary or appropriate to
protect Holder’s rights under this Article against
impairment.


     
2.5 Fractional Shares. No fractional Shares shall be
issuable upon exercise or conversion of the Warrant and the
number of Shares to be issued shall be rounded down to the
nearest whole Share. If a fractional share interest arises upon
any exercise or conversion of the Warrant, the Company shall
eliminate such fractional share interest by paying Holder the
amount computed by multiplying the fractional interest by the
fair market value of a full Share.


     
2.6 Certificate as to Adjustments. Upon each
adjustment of the Warrant Price, the Company shall promptly
notify Holder in writing, and, at the Company’s expense,
promptly compute such adjustment, and furnish Holder with a
certificate of its Chief Financial Officer setting forth such
adjustment and the facts upon which such adjustment is based.
The Company shall, upon written request, furnish Holder a
certificate setting forth the Warrant Price in effect upon the
date thereof and the series of adjustments leading to such
Warrant Price.



ARTICLE 3. REPRESENTATIONS AND COVENANTS OF THE COMPANY.


     
3.1 Representations and Warranties. The Company
represents and warrants to the Holder as follows:



		
	 	     
    (a) The initial Warrant Price referenced on the first page
    of this Warrant is not greater than (i) the price per share
    at which the Shares were last issued in any arms-length
    transaction in which at least $500,000 of the Shares were sold
    and (ii) the fair market value of the Shares as of the date
    of this Warrant.

	 
	 	     
    (b) All Shares which may be issued upon the exercise of the
    purchase right represented by this Warrant, and all securities,
    if any, issuable upon conversion of the Shares, shall, upon
    issuance, be duly authorized, validly issued, fully paid and
    nonassessable, and free of any liens and encumbrances except for
    restrictions on transfer provided for herein or under applicable
    federal and state securities laws.

	 
	 	     
    (c) The Capitalization Table previously provided to Holder
    remains true and complete as of the Issue Date.





     
3.2 Notice of Certain Events. If the Company
proposes at any time (a) to declare any dividend or
distribution upon its common stock, whether in cash, property,
stock, or other securities and whether or not a regular cash
dividend; (b) to offer for subscription pro rata to the
holders of any class or series of its stock any additional
shares of stock of any class or series or other rights;
(c) to effect any reclassification or recapitalization of
common stock; (d) to merge or consolidate with or into any
other corporation, or sell, lease, license, or convey all or substantially
all of its assets, or to liquidate, dissolve or wind up; or
(e) offer holders of registration rights the opportunity to
participate in an underwritten public offering of the
company’s securities for cash, then, in connection with
each such event, the Company shall give Holder (1) at least
10 days prior written notice of the date on which a record
will be taken for such dividend, distribution, or subscription
rights (and specifying the date on which the holders of common
stock will be entitled thereto) or for determining rights to
vote, if any, in respect of the matters referred to in (c) and
(d) above; (2) in the case of the matters referred to in
(c) and (d) above at least 10 days prior written notice of the
date when the same will take place (and specifying the date on
which the holders of common stock will be entitled to exchange
their common stock for securities or other property deliverable
upon the occurrence of such event); and (3) in the case of
the matter referred to in (e) above, the same notice as is given
to the holders of such registration rights.


2






 




     
3.3 Registration Under Securities Act of 1933, as
amended. The Company agrees that the Shares or, if the
Shares are convertible into common stock of the Company, such
common stock, shall be subject to the registration rights set
forth in the Company’s Investor Rights Agreement or similar
agreement. The provisions set forth in the Company’s
Investors’ Right Agreement or similar agreement relating to
the above in effect as of the Issue Date may not be amended,
modified or waived without the prior written consent of Holder
unless such amendment, modification or waiver affects Holder in
the same manner as they affect all other shareholders of the
same series of shares granted to the Holder.



ARTICLE 4. REPRESENTATIONS, WARRANTIES OF THE
HOLDER. The Holder represents and warrants to the Company as
follows:



     
4.1 Purchase for Own Account. Except for transfers
to Holder’s affiliates, this Warrant and the securities to
be acquired upon exercise of this Warrant by the Holder will be
acquired for investment for the Holder’s account, not as a
nominee or agent, and not with a view to the public resale or
distribution within the meaning of the 1933 Act, and the Holder
has no present intention of selling, granting any participation
in, or otherwise distributing the same. If not an individual,
the Holder also represents that the Holder has not been formed
for the specific purpose of acquiring this Warrant or the Shares.



     
4.2 Disclosure of Information. The Holder has
received or has had full access to all the information it
considers necessary or appropriate to make an informed
investment decision with respect to the acquisition of this
Warrant and its underlying securities. The Holder further has
had an opportunity to ask questions and receive answers from the
Company regarding the terms and conditions of the offering of
this Warrant and its underlying securities and to obtain
additional information (to the extent the Company possessed such
information or could acquire it without unreasonable effort or
expense) necessary to verify any information furnished to the
Holder or to which the Holder has access.



     
4.3 Investment Experience. The Holder understands
that the purchase of this Warrant and its underlying securities
involves substantial risk. The Holder: (i) has experience
as an investor in securities of companies in the development
stage and acknowledges that the Holder is able to fend for
itself, can bear the economic risk of such Holder’s
investment in this Warrant and its underlying securities and has
such knowledge and experience in financial or business matters
that the Holder is capable of evaluating the merits and risks of
its investment in this Warrant and its underlying securities
and/ or (ii) has a preexisting personal or business
relationship with the Company and certain of its officers,
directors or controlling persons of a nature and duration that
enables the Holder to be aware of the character, business acumen
and financial circumstances of such persons.



     
4.4 Accredited Investor Status. The Holder is an
“accredited investor” within the meaning of
Regulation D promulgated under the 1933 Act.



ARTICLE 5. MISCELLANEOUS.



     
5.1 Term: This Warrant is exercisable in whole or in
part at any time and from time to time on or before the
Expiration Date.



     
5.2 Legends. The Warrant and the Shares (and the
securities issuable, directly or indirectly, upon conversion of
the Shares, if any) shall be imprinted with a legend in
substantially the following form:




			
	 	
    THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
    OF 1933, AS AMENDED OR UNDER ANY APPLICABLE STATE LAWS, AND MAY
    NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHOUT AN
    EFFECTIVE REGISTRATION THERE OF UNDER SUCH ACT AND AN EXEMPTION
    UNDER APPLICABLE STATE LAW OR PURSUANT TO RULE 144 OR AN
    OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE CORPORATION
    AND ITS COUNSEL THAT SUCH REGISTRATION IS	 




4








 





		
	 	
    NOT REQUIRED.





     
5.3     Compliance with Securities
Laws on Transfer. This Warrant and the Shares issuable upon
exercise of this Warrant (and the securities issuable, directly
or indirectly, upon conversion of the Shares, if any) may not be
transferred or assigned in whole or in part without compliance
with applicable federal and state securities laws by the
transferor and the transferee (including, without limitation,
the delivery of investment representation letters and legal
opinions reasonably satisfactory to the Company, as reasonably
requested by the Company). The Company shall not require Holder
to provide an opinion of counsel if the transfer is to an
affiliate of Holder or if there is no material question as to
the availability of current information as referenced in
Rule 144(c), Holder represents that it has complied with
Rule 144(d) and (e) in reasonable detail, the selling
broker represents that it has complied with Rule 144(f),
and the Company is provided with a copy of Holder’s notice
of proposed sale.



     
5.4     Transfer Procedure.
Subject to the provisions of Section 5.3, upon receipt by
Holder of the executed Warrant, Holder will transfer all of this
Warrant or the Shares issuable upon exercise of this Warrant (or
the securities issuable, directly or indirectly, upon conversion
of the Shares, if any) to Silicon Valley Bancshares,
Holder’s parent company. Subject to the provisions of
Section 5.3 and upon providing Company with written notice,
Silicon Valley Bancshares may transfer all or part of this
Warrant or the Shares issuable upon exercise of this Warrant (or
the Shares issuable directly or indirectly, upon conversion of
the Shares, if any) to The Silicon Valley Bank Foundation, or
to any affiliate of Holder, or to any other transferee,
provided, however, if Holder transfers this Warrant to any
transferee which is not an affiliate of Holder, Holder will give
the Company notice of the portion of the Warrant being
transferred with the name, address and taxpayer identification
number of the transferee and will surrender this Warrant to the
Company for reissuance to the transferee(s) (and Holder if
applicable). The Company may refuse to transfer this Warrant or
the Shares to any person who directly competes with the Company,
unless, in either case, the stock of the Company is publicly
traded.



     
5.5     Notices. All notices and
other communications from the Company to the Holder, or vice
versa, shall be deemed delivered and effective when given
personally or mailed by first-class registered or certified
mail, postage prepaid, at such address as may have been
furnished to the Company or the Holder, as the case may be, in
writing by the Company or such holder from time to time. All
notices to the Holder shall be addressed as follows:




		
	 	
Silicon Valley Bank

ATTN: Treasury Department

3003 Tasman Drive, HG 110

Santa Clara, CA 95054






     
5.6     Waiver. This Warrant and
any term hereof may be changed, waived, discharged or terminated
only by an instrument in writing signed by the party against
which enforcement of such change, waiver, discharge or
termination is sought.



     
5.7     Attorney’s Fees. In
the event of any dispute between the parties concerning the
terms and provisions of this Warrant, the party prevailing in
such dispute shall be entitled to collect from the other party
all costs incurred in such dispute, including reasonable
attorney’s fees.



     
5.8     Automatic Conversion upon
Expiration. In the event that, upon the Expiration Date, the
fair market value of one Share (or other security issuable upon
the exercise hereof) as determined in accordance with
Section 1.3 above is greater than the Exercise Price in
effect on such date, then this Warrant shall automatically be
deemed on and as of such date to be converted pursuant to
Section 1.2 above as to all Shares (or such other
securities) for which it shall not previously have been
exercised or converted, and the Company shall promptly deliver a
certificate representing the Shares (or such other securities)
issued upon such conversion to the Holder.



5








 




     
5.9     Governing Law. This
warrant shall be governed by and construed in accordance with
the laws of the State of California, without giving effect to
its principles regarding conflicts of law.




			
	 	
    “COMPANY”
	 	
    Alexza Molecular Delivery Corporation
	 
	 	By: 	/s/ Stephen A. Schneider
	 	Name: 	Stephen A. Schneider
	 	 	
    (Print)
	 	Title: 	
    Chairman of the Board, President or Vice President
	 
	 	By: 	/s/ Carol A. Christopher
	 	Name: 	Carol A. Christopher
	 	 	
    (Print)
	 	Title: 	
    Chief Financial Officer, Secretary, Assistant Treasurer or
    Assistant Secretary
	 
	 	
    “HOLDER”
	 	Silicon Valley Bank
	 
	 	By: 	/s/ MF Forde
	 	Name: 	Mercy Forde
	 	Title: 	VP





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APPENDIX 1



NOTICE
OF EXERCISE



     
1.   Holder elects to purchase ___________ shares of the
Common/Series __________ Preferred [strike one] Stock of Alexza
Molecular Delivery Corporation pursuant to the terms of the attached
Warrant, and tenders payment of the purchase price of the shares in
full.



     
1.   Holder elects to convert the attached Warrant into
Shares/cash [strike one] in the manner specified in the Warrant. This
conversion is exercised for ___________________________ of the Shares
covered by the Warrant.



     
[Strike paragraph that does not apply.]



     
2.   Please issue a certificate or certificates representing the
shares in the name specified below:





	 	 	 	 
	 	 	 	 
	 	 	Holders Name	 
	 
	 
	 
	 	 	 	 
	 
	 
	 	 	 	 
	 	 	(Address)	 






     
3.   The undersigned represents it is acquiring the shares
solely for its own account and not as a nominee for any other party
and not with a view toward the resale or distribution except in
compliance with applicable securities laws.






	 	 
	HOLDER:
	 
	 
	 	 







	 	 
	By: 	 






	 	 
	Name: 	 






	 	 
	Title: 	 






	 
	(Date)





1








 




APPENDIX
2


ASSIGNMENT



For
value received, Silicon Valley Bank hereby sells, assigns and
transfers unto




	 	 	 
	Name:
	 	Silicon Valley Bancshares
	Address:
	 	3003 Tasman Drive (HA-200)
	
	 	Santa Clara, CA 95054
	 
	 	 
	Tax ID:
	 	91-1962278






the
Warrant to Purchase Stock issued by
____________., a
____________
Corporation (the “Company”) dated
____________ together
with all rights, title and interest therein, and does hereby
irrevocably constitute and appoint
____________
attorney, to transfer said Warrant on the books of the Company with
full power of substitution in the premises.



Date:  ____________




	 	 	 	 	 
	 	Silicon Valley Bank	 
	 
	 	 	 	 
	 	By:  	 	 
	 	Name:  	 	 
	 	Title: