EXHIBIT 10.19



 




Exhibit 10.19




Conformed
Copy




THIS WARRANT AND THE UNDERLYING SECURITIES HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“ACT”). THEY MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT AS TO SUCH SECURITIES UNDER THE ACT OR AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED.




Alexza Molecular
Delivery Corporation




WARRANT TO PURCHASE COMMON STOCK





	No. CW-1	November 5, 2004











Void After November 5, 2011



     
This Certifies
That, for value received,
Montgomery 2004-3
Partnership, with its principal office at
100 Wilshire Boulevard, Suite 400, Santa Monica, CA
90401, or assigns (“the Holder”), is entitled to
subscribe for and purchase at the Exercise Price (defined below)
from Alexza Molecular
Delivery Corporation, a Delaware corporation, with
its principal office at 1001 East Meadow Circle, Palo Alto,
California, 94303 (the “Company”) up to Five
Hundred Forty Four Thousand Three Hundred Twenty Three
(544,323) shares of the Common Stock of the Company
(the “Common Stock”).



     
This Warrant is being issued pursuant to the terms of the
Engagement Agreement, dated May 28, 2004 by and between the
Company and Holder (the “Engagement Agreement”).



     
1. Definitions.
As used herein, the following terms shall have the
following respective meanings:



          
(a) “Exercise Period” shall mean the
period commencing with the date hereof and ending seven (7)
years later, unless sooner terminated as provided below.



          
(b) “Exercise Price” shall mean $0.20 per
share, subject to adjustment pursuant to Section 5 below.



          
(c) “Exercise Shares” shall mean the
shares of the Company’s Common Stock issuable upon exercise
of this Warrant, subject to adjustment pursuant to the terms
herein, including but not limited to adjustment pursuant to
Section 5 below.



     
2. Exercise of Warrant.
The rights represented by this Warrant may be
exercised in whole or in part at any time during Exercise
Period, by delivery of the following to the Company at its
address set forth above (or at such other address as it may
designate by notice in writing to the Holder):



          
(a)  An executed Notice of Exercise in the form
attached hereto;



1.






 






		
	 	     
    (b)     Payment of the Exercise Price
    either (i) in cash or by check, or (ii) by
    cancellation of indebtedness; and
	 
	 	     
    (c)     This Warrant.




     
Upon the exercise of the rights represented by this Warrant, a
certificate or certificates for the Exercise Shares so
purchased, registered in the name of the Holder or persons
affiliated with the Holder, if the Holder so designates, shall
be issued and delivered to the Holder within a reasonable time
after the rights represented by this Warrant shall have been so
exercised.


     
The person in whose name any certificate or certificates for
Exercise Shares are to be issued upon exercise of this Warrant
shall be deemed to have become the holder of record of such
shares on the date on which this Warrant was surrendered and
payment of the Exercise Price was made, irrespective of the date
of delivery of such certificate or certificates, except that, if
the date of such surrender and payment is a date when the stock
transfer books of the Company are closed, such person shall be
deemed to have become the holder of such shares at the close of
business on the next succeeding date on which the stock transfer
books are open.


     
2.1     Net Exercise.
Notwithstanding any provisions herein to the contrary, if the
fair market value of one share of the Company’s Common
Stock is greater than the Exercise Price (at the date of
calculation as set forth below), in lieu of exercising this
Warrant by payment of cash, the Holder may elect to receive
shares equal to the value (as determined below) of this Warrant
(or the portion thereof being canceled) by surrender of this
Warrant at the principal office of the Company together with the
properly endorsed Notice of Exercise in which event the Company
shall issue to the Holder a number of shares of Common Stock
computed using the following formula:



	 	 	 	 	 
	
    
    X
    

    	 	
    =
    	 	Y(A-B)
	 	 	 	 	A





			
	 	Where X=	
    the number of shares of Common Stock to be issued to the Holder
	 
	 	           Y=	
    the number of shares of Common Stock purchasable under the
    Warrant or, if only a portion of the Warrant is being exercised,
    the portion of the Warrant being canceled (at the date of such
    calculation)
	 
	 	           A=	
    the fair market value of one share of the Company’s
    Common Stock (at the date of such calculation)
	 
	 	           B=	
    Exercise Price (as adjusted to the date of such calculation)




     
For purposes of the above calculation, the fair market value of
one share of Common Stock shall be determined by the
Company’s Board of Directors in good faith; provided,
however, that in the event that this Warrant is exercised
pursuant to this Section 2.1 in connection with the
Company’s initial public offering of its Common Stock, the
fair market value per share shall be the per share offering
price to the public of the Company’s initial public
offering.


2.










 


     
3.     Covenants
of the Company.



		
	 	     
    3.1     Covenants as to Exercise
    Shares. The Company covenants and agrees that all Exercise
    Shares that may be issued upon the exercise of the rights
    represented by this Warrant will, upon issuance, be validly
    issued and outstanding, fully paid and nonassessable, and free
    from all taxes, liens and charges with respect to the issuance
    thereof. The Company further covenants and agrees that the
    Company will at all times during the Exercise Period, have
    authorized and reserved, free from preemptive rights, a
    sufficient number of shares of its Common Stock to provide for
    the exercise of the rights represented by this Warrant. If at
    any time during the Exercise Period the number of authorized but
    unissued shares of Common Stock shall not be sufficient to
    permit exercise of this Warrant, the Company will take such
    corporate action as may, in the opinion of its counsel, be
    necessary to increase its authorized but unissued shares of
    Common Stock to such number of shares as shall be sufficient for
    such purposes.
	 
	 	     
    3.2     No Impairment. Except
    and to the extent as waived or consented to by the Holder, the
    Company will not, by amendment of its Certificate of
    Incorporation or through any 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 hereunder by the Company, but will at all times in
    good faith assist in the carrying out of all the provisions of
    this Warrant and in the taking of all such action as may be
    necessary or appropriate in order to protect the exercise rights
    of the Holder against impairment.
	 
	 	     
    3.3     Notices of Record Date.
    In the event of any taking by the Company of a record of the
    holders of any class of securities for the purpose of
    determining the holders thereof who are entitled to receive any
    dividend (other than a cash dividend which is the same as cash
    dividends paid in previous quarters) or other distribution, the
    Company shall mail to the Holder, at least ten (10) days
    prior to the date specified herein, a notice specifying the date
    on which any such record is to be taken for the purpose of such
    dividend or distribution.




     
4.     Representations
of Holder.



		
	 	     
    4.1     Acquisition of Warrant for
    Personal Account. The Holder represents and warrants that it
    is acquiring the Warrant and the Exercise Shares solely for its
    account for investment and not with a view to or for sale or
    distribution of said Warrant or Exercise Shares or any part
    thereof. The Holder also represents that the entire legal and
    beneficial interests of the Warrant and Exercise Shares the
    Holder is acquiring is being acquired for, and will be held for,
    its account only.
	 
	 	     
    4.2     Securities Are Not
    Registered.





		
	 	     
    (a)     The Holder understands
    that the Warrant and the Exercise Shares have not been
    registered under the Securities Act of 1933, as amended (the
    “Act”) on the basis that no distribution or public
    offering of the stock of the Company is to be effected. The
    Holder realizes that the basis for the exemption may not be
    present if, notwithstanding its representations, the Holder has
    a present intention of acquiring the securities for a fixed or
    determinable period in the future, selling (in connection with a
    distribution or otherwise),




3.






 




granting any participation in, or otherwise distributing the
securities. The Holder has no such present intention.



          
(b) The Holder recognizes that the Warrant and the
Exercise Shares must be held indefinitely unless they are
subsequently registered under the Act or an exemption from such
registration is available. The Holder recognizes that the
Company has no obligation to register the Warrant or the
Exercise Shares of the Company, or to comply with any exemption
from such registration.



          
(c) The Holder is aware that neither the Warrant nor
the Exercise Shares may be sold pursuant to Rule 144
adopted under the Act unless certain conditions are met,
including, among other things, the existence of a public market
for the shares, the availability of certain current public
information about the Company, the resale following the required
holding period under Rule 144 and the number of shares
being sold during any three month period not exceeding specified
limitations. Holder is aware that the conditions for resale set
forth in Rule 144 have not been satisfied and that the
Company presently has no plans to satisfy these conditions in
the foreseeable future.




     4.3 Disposition of Warrant
and Exercise Shares.



          
(a) The Holder further agrees not to make any
disposition of all or any part of the Warrant or Exercise Shares
in any event unless and until:



               
(i) The Company shall have received a letter secured
by the Holder from the Securities and Exchange Commission
stating that no action will be recommended to the Commission
with respect to the proposed disposition;



               
(ii) There is then in effect a registration
statement under the Act covering such proposed disposition and
such disposition is made in accordance with said registration
statement; or



               
(iii) The Holder shall have notified the Company of
the proposed disposition and shall have furnished the Company
with a detailed statement of the circumstances surrounding the
proposed disposition, and if reasonably requested by the
Company, the Holder shall have furnished the Company with an
opinion of counsel, reasonably satisfactory to the Company, for
the Holder to the effect that such disposition will not require
registration of such Warrant or Exercise Shares under the Act or
any applicable state securities laws.



          
(b) The Holder understands and agrees that all
certificates evidencing the shares to be issued to the Holder
may bear the following legend:






			
	 	
    THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
    ACT OF 1933, AS AMENDED (THE “ACT”). THEY MAY NOT BE
    SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE
    OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES
    UNDER THE ACT OR AN OPINION OF COUNSEL	 



4.






 





		
	 	
    SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
    REQUIRED.




     
5.     Adjustment of Exercise
Price. In the event of changes in outstanding Common Stock
of the Company by reason of stock dividends, split-ups,
recapitalizations, reclassifications, combinations or exchanges
of shares, separations, reorganizations, liquidations, or the
like, the number and class of shares available under the Warrant
in the aggregate and the Exercise Price shall be correspondingly
adjusted to give the Holder of the Warrant, on exercise for the
same aggregate Exercise Price, the total number, class, and kind
of shares as the Holder would have owned had the Warrant been
exercised prior to the event and had the Holder continued to
hold such shares until after the event requiring adjustment;
provided, however, that such adjustment shall not be made with
respect to, and this Warrant shall terminate if not exercised
prior to, the events set forth in Section 7 below. The form
of this Warrant need not be changed because of any adjustment in
the number of Exercise Shares subject to this Warrant.



     
6.     Fractional
Shares. No
fractional shares shall be issued upon the exercise of this
Warrant as a consequence of any adjustment pursuant hereto. All
Exercise Shares (including fractions) issuable upon exercise of
this Warrant may be aggregated for purposes of determining
whether the exercise would result in the issuance of any
fractional share. If, after aggregation, the exercise would
result in the issuance of a fractional share, the Company
shall, in lieu of issuance of any fractional share, pay the
Holder otherwise entitled to such fraction a sum in cash equal
to the product resulting from multiplying the then current fair
market value of an Exercise Share by such fraction.



     
7.     Early
Termination. In the
event of, at any time during the Exercise Period, an initial
public offering of securities of the Company registered under
the Act, or any capital reorganization, or any reclassification
of the capital stock of the Company (other than a change in par
value or from par value to no par value or no par value to par
value or as a result of a stock dividend or subdivision,
split-up or combination of shares), or the consolidation or
merger of the Company with or into another corporation (other
than a merger solely to effect a reincorporation of the Company
into another state), or the sale or other disposition of all or
substantially all the properties and assets of the Company in
its entirety to any other person, the Company shall provide to
the Holder twenty (20) days advance written notice of such
public offering, reorganization, reclassification,
consolidation, merger or sale or other disposition of the
Company’s assets, and this Warrant shall terminate unless
exercised prior to the date such public offering is closed or
the occurrence of such reorganization, reclassification,
consolidation, merger or sale or other disposition of the
Company’s assets.



     
8.     Market Stand-Off
Agreement. Holder shall not sell, dispose of, transfer, make
any short sale of, grant any option for the purchase of, or
enter into any hedging or similar transaction with the same
economic effect as a sale, any Common Stock (or other
securities) of the Company held by Holder, for a period of time
specified by the managing underwriters (to be the same period of
time applicable to holders of Common Stock) following the
effective date of a registration statement of the Company filed
under the Act. Holder agrees to execute and deliver such other
agreements as may be reasonably requested by the Company and/or
the managing underwriter(s) which are consistent with the
foregoing or which are necessary to give further effect thereto
(and which shall have the same terms and conditions as
applicable to holders of



5.








 




Common Stock). In order to enforce the foregoing covenant, the
Company may impose stop-transfer instructions with respect to
such Common Stock (or other securities) until the end of such
period. The underwriters of the Company’s stock are
intended third party beneficiaries of this Section 8 and
shall have the right, power and authority to enforce the
provisions hereof as though they were a party hereto.


       
9.     No
Stockholder
Rights. This Warrant in and of itself
shall not entitle the Holder to any voting rights or other
rights as a stockholder of the Company.


     
10.     Transfer
of Warrant. Subject to applicable laws and the
restriction on transfer set forth on the first page of this
Warrant, this Warrant and all rights hereunder are transferable,
by the Holder in person or by duly authorized attorney, upon
delivery of this Warrant and the form of assignment attached
hereto to any transferee designated by Holder. The transferee
shall sign an investment letter in form and substance
satisfactory to the Company.


     
11.     Lost,
Stolen,
Mutilated or
Destroyed
Warrant. If this
Warrant is lost, stolen, mutilated or destroyed, the Company
may, on such terms as to indemnity or otherwise as it may
reasonably impose (which shall, in the case of a mutilated Warrant, include the surrender
thereof), issue a new Warrant of like denomination and tenor as the
Warrant so lost, stolen, mutilated or
destroyed. Any such new Warrant shall constitute an original
contractual obligation of the Company, whether or not the
allegedly lost, stolen, mutilated or destroyed Warrant shall be
at any time enforceable by anyone.


     
12.     Notices, Etc. All notices required or permitted
hereunder shall be in writing and shall be deemed effectively
given: (a) upon personal delivery to the party to be notified,
(b) when sent by confirmed telex or facsimile if sent
during normal business hours of the recipient, if not, then on
the next business day, (c) five (5) days after having been sent
by registered or certified mail, return receipt requested,
postage prepaid, or (d) one (1) day after deposit with a
nationally recognized overnight courier, specifying next day
delivery, with written verification of receipt. All
communications shall be sent to the Company and to Holder at the
respective addresses set forth on the first page hereof, or at
such other address as the Company or Holder may designate by ten
(10) days advance written notice to the other parties hereto.


     
13.     Acceptance. Receipt of this Warrant by the Holder shall
constitute acceptance of and agreement to all of the terms and
conditions contained herein.


     
14.     Governing
Law. This Warrant and all rights, obligations
and liabilities hereunder shall be governed by the laws of the
State of Delaware.



6.







 




In Witness Whereof, the Company has caused this Warrant to be
executed by its duly authorized officer as of November 5,
2004.






		
	 	Alexza Molecular Deliver Corporation






			
	 	By: 	
    /s/ Thomas King



		
	 	
     

	 	
    Thomas King
	 	
    President and CEO



7.






 





NOTICE OF EXERCISE



TO: Alexza Molecular
Delivery Corporation


     
(1)     o     The
undersigned hereby elects to
purchase                      shares
of the Common Stock of Alexza Molecular Delivery Corporation
(the “Company”) pursuant to the terms of the attached
Warrant, and tenders herewith payment of the exercise price in
full, together with all applicable transfer taxes, if any.


          
    o     The
undersigned hereby elects to
purchase                      shares
of the Common Stock of the Company pursuant to the terms of the
net exercise provisions set forth in Section 2.1 of the
attached Warrant, and shall tender payment of all applicable
transfer taxes, if any.


     
(2)     Please issue a certificate or
certificates representing said shares of Common Stock in the
name of the undersigned or in such other name as is specified
below:








(Name)















(Address)



     
(3)     The undersigned represents that
(i) the aforesaid shares of Common Stock are being acquired
for the account of the undersigned for investment and not with a
view to, or for resale in connection with, the distribution
thereof and that the undersigned has no present intention of
distributing or reselling such shares; (ii) the undersigned
is aware of the Company’s business affairs and financial
condition and has acquired sufficient information about the
Company to reach an informed and knowledgeable decision
regarding its investment in the Company; (iii) the
undersigned is experienced in making investments of this type
and has such knowledge and background in financial and business
matters that the undersigned is capable of evaluating the merits
and risks of this investment and protecting the
undersigned’s own interests; (iv) the undersigned
understands that the shares of Common Stock issuable upon
exercise of this Warrant have not been registered under the
Securities Act of 1933, as amended (the “Securities
Act”), by reason of a specific exemption from the
registration provisions of the Securities Act, which exemption
depends upon, among other things, the bona fide nature of the
investment intent as expressed herein, and, because such
securities have not been registered under the Securities Act,
they must be held indefinitely unless subsequently registered
under the Securities Act or an exemption from such registration
is available; (v) the undersigned is aware that the
aforesaid shares of Common Stock may not be sold pursuant to
Rule 144 adopted under the Securities Act unless certain
conditions are met and until the undersigned has held the shares
for the number of years prescribed by Rule 144, that among
the conditions for use of the Rule is the availability of
current information to the public about the Company and the
Company has not made such information available and has no
present plans to do so; and (vi) the undersigned agrees not
to make any disposition of all or any part of the aforesaid
shares of Common Stock unless and until there is then in effect
a registration statement under the Securities Act covering such
proposed disposition and such disposition is made in accordance
with said registration









 





statement,
or the undersigned has provided the Company with an opinion of
counsel satisfactory to the Company, stating that such registration
is not required.





	 	 	 
	 	 	 
	(Date)	 	(Signature)
	 
	 
	 	 	 
	 	 	(Print name)





 








 



ASSIGNMENT FORM



(To assign the foregoing Warrant, execute this form

and supply
required information. Do not use this

form to purchase shares.)


            
For
Value
Received, the foregoing Warrant and all rights
evidenced thereby are hereby assigned to

	 	 	 
	Name:	 
	(Please Print)
	 	 	 
	Address:	 	 
	(Please Print)






Dated: ________________________,
20____

	 	 	 
	Holder’s

Signature:	 	 
	 	 	 
	Holder’s Address:	 	 






NOTE: The signature to this Assignment Form must
correspond with the name as it appears on the face of the
Warrant, without alteration or enlargement or any change
whatever. Officers of corporations and those acting in a
fiduciary or other representative capacity should file proper
evidence of authority to assign the foregoing Warrant.