Document:

exv4w13

 

EXHIBIT 4.13

ALEXZA PHARMACEUTICALS, INC.

and

                    , As Warrant Agent

FORM OF DEBT SECURITIES

WARRANT AGREEMENT

Dated As Of                     

 

 

Table
of Contents

	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	 
	 	 	 	 	 	 
	ARTICLE 1
	 	ISSUANCE OF WARRANTS AND EXECUTION AND DELIVERY OF WARRANT CERTIFICATES	 	 	1	 
	 
	1.1
	 	Issuance of Warrants	 	 	1	 
	 
	1.2
	 	Execution and Delivery of Warrant Certificates	 	 	1	 
	 
	1.3
	 	Issuance of Warrant Certificates	 	 	2	 
	 
	 	 	 	 	 	 
	ARTICLE 2
	 	WARRANT PRICE, DURATION AND EXERCISE OF WARRANTS	 	 	2	 
	 
	 	 	 	 	 	 
	2.1
	 	Warrant Price	 	 	2	 
	 
	2.2
	 	Duration of Warrants	 	 	2	 
	 
	2.3
	 	Exercise of Warrants	 	 	3	 
	 
	 	 	 	 	 	 
	ARTICLE 3
	 	OTHER PROVISIONS RELATING TO RIGHTS OF HOLDERS OF WARRANT CERTIFICATES	 	 	3	 
	 
	 	 	 	 	 	 
	3.1
	 	No Rights as Holders of Warrant
Debt Securities Conferred by Warrants or Warrant Certificates	 	 	3	 
	 
	3.2
	 	Lost, Stolen, Mutilated or Destroyed Warrant Certificates	 	 	4	 
	 
	3.3
	 	Holder of Warrant Certificate May Enforce Rights	 	 	4	 
	 
	3.4
	 	Merger, Sale, Conveyance or Lease	 	 	4	 
	 
	3.5
	 	Notice to Warrantholders	 	 	4	 
	 
	 	 	 	 	 	 
	ARTICLE 4
	 	EXCHANGE AND TRANSFER OF WARRANT CERTIFICATES	 	 	5	 
	 
	 	 	 	 	 	 
	4.1
	 	Exchange and Transfer of Warrant Certificates	 	 	5	 
	 
	4.2
	 	Treatment of Holders of Warrant Certificates	 	 	5	 
	 
	4.3
	 	Cancellation of Warrant Certificates	 	 	5	 
	 
	 	 	 	 	 	 
	ARTICLE 5
	 	CONCERNING THE WARRANT AGENT	 	 	6	 
	 
	 	 	 	 	 	 
	5.1
	 	Warrant Agent	 	 	6	 
	 
	5.2
	 	Conditions of Warrant Agent’s Obligations	 	 	6	 
	 
	5.3
	 	Resignation, Removal and Appointment of Successors	 	 	7	 
	 
	 	 	 	 	 	 
	ARTICLE 6
	 	MISCELLANEOUS	 	 	8	 
	 
	 	 	 	 	 	 
	6.1
	 	Amendment	 	 	8	 
	 
	6.2
	 	Notices and Demands to the Company and Warrant Agent	 	 	8	 
	 
	6.3
	 	Addresses	 	 	8	 
	 
	6.4
	 	Governing Law	 	 	8	 
	 
	6.5
	 	Delivery of Prospectus	 	 	8	 
	 
	6.6
	 	Obtaining of Governmental Approvals	 	 	8	 
	 
	6.7
	 	Persons Having Rights Under Warrant Agreement	 	 	9	 
	 
	6.8
	 	Headings	 	 	9	 
	 
	6.9
	 	Counterparts	 	 	9	 
	 
	6.10
	 	Inspection of Agreement	 	 	9	 

i.

 

ALEXZA PHARMACEUTICALS, INC.

Form of Debt Securities Warrant Agreement

     Debt Securities Warrant Agreement, dated as of                      between Alexza
Pharmaceuticals, Inc., a Delaware corporation (the “Company”) and
                    , a [corporation] [national banking association] organized and
existing under the laws of                      and having a corporate trust office in                     , as
warrant agent (the “Warrant Agent”).

     Whereas, the Company has entered into an indenture dated as of [                     (the
“Senior Indenture”), with                     , as trustee (such trustee, and any successors to such
trustee, herein called the “Senior Trustee”), providing for the issuance from time to time of its
unsubordinated debt securities, to be issued in one or more series as provided in the Senior
Indenture (the “Debt Securities”);] [                     (the “Subordinated Indenture”), with                     ,
as trustee (such trustee, and any successors to such trustee, herein called the “Subordinated
Trustee”), providing for the issuance from time to time of its subordinated debt securities, to be
issued in one or more series as provided in the Subordinated Indenture (the “Debt Securities”);]

     Whereas, the Company proposes to sell [If Warrants are sold with other securities —
title of such other Securities being offered (the “Other Securities”) with] warrant certificates
evidencing one or more warrants (the “Warrants” or, individually, a “Warrant”) representing the
right to purchase [title of Debt Securities purchasable through exercise of Warrants] (the “Warrant
Debt Securities”), such warrant certificates and other warrant certificates issued pursuant to this
Agreement being herein called the “Warrant Certificates”; and

     Whereas, the Company desires the Warrant Agent to act on behalf of the Company, and
the Warrant Agent is willing so to act, in connection with the issuance, registration, transfer,
exchange, exercise and replacement of the Warrant Certificates, and in this Agreement wishes to set
forth, among other things, the form and provisions of the Warrant Certificates and the terms and
conditions on which they may be issued, registered, transferred, exchanged, exercised and replaced;

     Now, Therefore, in consideration of the premises and of the mutual agreements herein
contained, the parties hereto agree as follows:

ARTICLE 1

ISSUANCE OF WARRANTS AND EXECUTION AND

DELIVERY OF WARRANT CERTIFICATES

     1.1 Issuance of Warrants. [If Warrants alone — Upon issuance, each Warrant Certificate shall
evidence one or more Warrants.] [If Other Securities and Warrants — Warrant Certificates shall be
[initially] issued in connection with the issuance of the Other Securities [but shall be separately
transferable on and after                      (the “Detachable Date”)] [and shall not be separately
transferable] and each Warrant Certificate shall evidence one or more Warrants.] Each Warrant
evidenced thereby shall represent the right, subject to the provisions contained herein and
therein, to purchase one Warrant Debt Security. [If Other Securities and Warrants — Warrant
Certificates shall be initially issued in units with the Other Securities and each Warrant
Certificate included in such a unit shall evidence                      Warrants for each [$                    
principal amount]
[                     shares] of Other Securities included in such unit.]

     1.2 Execution and Delivery of Warrant Certificates. Each Warrant Certificate, whenever
issued, shall be in registered form substantially in the form set forth in Exhibit A hereto, shall
be dated the date of its countersignature by the Warrant Agent and may have such letters, numbers,
or other marks of identification or designation and such legends or endorsements printed,
lithographed or engraved thereon as the officers of the Company executing the same may approve
(execution thereof to be conclusive evidence of such approval) and as are not inconsistent with the
provisions of this Agreement, or as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any securities exchange on which
the Warrants may be listed, or to conform to usage. The Warrant Certificates shall be signed on
behalf of the Company

1.

 

by any of its present or future chief executive officers, presidents, senior vice presidents,
vice presidents, chief financial officers, chief legal officers, treasurers, assistant treasurers,
controllers, assistant controllers, secretaries or assistant secretaries under its corporate seal
reproduced thereon. Such signatures may be manual or facsimile signatures of such authorized
officers and may be imprinted or otherwise reproduced on the Warrant Certificates. The seal of the
Company may be in the form of a facsimile thereof and may be impressed, affixed, imprinted or
otherwise reproduced on the Warrant Certificates.

     No Warrant Certificate shall be valid for any purpose, and no Warrant evidenced thereby shall
be exercisable, until such Warrant Certificate has been countersigned by the manual signature of
the Warrant Agent. Such signature by the Warrant Agent upon any Warrant Certificate executed by
the Company shall be conclusive evidence that the Warrant Certificate so countersigned has been
duly issued hereunder.

     In case any officer of the Company who shall have signed any of the Warrant Certificates
either manually or by facsimile signature shall cease to be such officer before the Warrant
Certificates so signed shall have been countersigned and delivered by the Warrant Agent, such
Warrant Certificates may be countersigned and delivered notwithstanding that the person who signed
Warrant Certificates ceased to be such officer of the Company; and any Warrant Certificate may be
signed on behalf of the Company by such persons as, at the actual date of the execution of such
Warrant Certificate, shall be the proper officers of the Company, although at the date of the
execution of this Agreement any such person was not such officer.

     The term “holder” or “holder of a Warrant Certificate” as used herein shall mean any person in
whose name at the time any Warrant Certificate shall be registered upon the books to be maintained
by the Warrant Agent for that purpose [If Other Securities and Warrants are not immediately
detachable — or upon the registration of the Other Securities prior to the Detachable Date. Prior
to the Detachable Date, the Company will, or will cause the registrar of the Other Securities to,
make available at all times to the Warrant Agent such information as to holders of the Other
Securities as may be necessary to keep the Warrant Agent’s records up to date].

     1.3 Issuance of Warrant Certificates. Warrant Certificates evidencing the right to purchase
Warrant Debt Securities may be executed by the Company and delivered to the Warrant Agent upon the
execution of this Warrant Agreement or from time to time thereafter. The Warrant Agent shall, upon
receipt of Warrant Certificates duly executed on behalf of the Company, countersign such Warrant
Certificates and shall deliver such Warrant Certificates to or upon the order of the Company.

ARTICLE 2

WARRANT PRICE, DURATION AND

EXERCISE OF WARRANTS

     2.1 Warrant Price. During the period specified in Section 2.2, each Warrant shall, subject to
the terms of this Warrant Agreement and the applicable Warrant Certificate, entitle the holder
thereof, to purchase the principal amount of Warrant Debt Securities specified in the applicable
Warrant Certificate at an exercise price of ___% of the principal amount thereof [plus accrued
amortization, if any, of the original issue discount of the Warrant Debt Securities] [plus accrued
interest, if any, from the most recent date from which interest shall have been paid on the Warrant
Debt Securities or, if no interest shall have been paid on the Warrant Debt Securities, from the
date of their initial issuance.] [The original issue discount ($                     for each $1,000
principal amount of Warrant Debt Securities) will be amortized at a ___% annual rate, computed on
a[n] [semi-] annual basis [using a 360-day year consisting of twelve 30-day months].] Such
purchase price for the Warrant Debt Securities is referred to in this Agreement as the “Warrant
Price.”

     2.2 Duration of Warrants. Each Warrant may be exercised in whole or in part at any time, as
specified herein, on or after [the date thereof] [                    ] and at or before [                    ] p.m., [City]
time, on                      or such later date as the Company may designate by notice to the Warrant Agent
and the holders of Warrant Certificates mailed to their addresses as set forth in the record books
of the Warrant Agent (the “Expiration Date”). Each Warrant not exercised at or before [                    ]
p.m., [City] time, on the Expiration Date shall become void, and all rights of the holder of the
Warrant Certificate evidencing such Warrant under this Agreement shall cease.

2.

 

     2.3 Exercise of Warrants.

          (a) During the period specified in Section 2.2, the Warrants may be exercised to purchase a
whole number of Warrant Debt Securities in registered form by providing certain information as set
forth on the reverse side of the Warrant Certificate and by paying in full, in lawful money of the
United States of America, [in cash or by certified check or official bank check in New York
Clearing House funds] [by bank wire transfer in immediately available funds] the Warrant Price for
each Warrant Debt Security with respect to which a Warrant is being exercised to the Warrant Agent
at its corporate trust office, provided that such exercise is subject to receipt within five
business days of such payment by the Warrant Agent of the Warrant Certificate with the form of
election to purchase Warrant Debt Securities set forth on the reverse side of the Warrant
Certificate properly completed and duly executed. The date on which payment in full of the Warrant
Price is received by the Warrant Agent shall, subject to receipt of the Warrant Certificate as
aforesaid, be deemed to be the date on which the Warrant is exercised; provided, however, that if,
at the date of receipt of such Warrant Certificates and payment in full of the Warrant Price, the
transfer books for the Warrant Debt Securities purchasable upon the exercise of such Warrants shall
be closed, no such receipt of such Warrant Certificates and no such payment of such Warrant Price
shall be effective to constitute the person so designated to be named as the holder of record of
such Warrant Debt Securities on such date, but shall be effective to constitute such person as the
holder of record of such Warrant Debt Securities for all purposes at the opening of business on the
next succeeding day on which the transfer books for the Warrant Debt Securities purchasable upon
the exercise of such Warrants shall be opened, and the certificates for the Warrant Debt Securities
in respect of which such Warrants are then exercised shall be issuable as of the date on such next
succeeding day on which the transfer books shall next be opened, and until such date the Company
shall be under no duty to deliver any certificate for such Warrant Debt Securities. The Warrant
Agent shall deposit all funds received by it in payment of the Warrant Price in an account of the
Company maintained with it and shall advise the Company by telephone at the end of each day on
which a payment for the exercise of Warrants is received of the amount so deposited to its account.
The Warrant Agent shall promptly confirm such telephone advice to the Company in writing.

          (b) The Warrant Agent shall, from time to time, as promptly as practicable, advise the Company
of (i) the number of Warrant Debt Securities with respect to which Warrants were exercised, (ii)
the instructions of each holder of the Warrant Certificates evidencing such Warrants with respect
to delivery of the Warrant Debt Securities to which such holder is entitled upon such exercise,
(iii) delivery of Warrant Certificates evidencing the balance, if any, of the Warrants for the
remaining Warrant Debt Securities after such exercise, and (iv) such other information as the
Company or the [Senior] [Subordinated] Trustee shall reasonably require.

          (c) As soon as practicable after the exercise of any Warrant, the Company shall issue,
pursuant to the Indenture, in authorized denominations, to or upon the order of the holder of the
Warrant Certificate evidencing such Warrant, the Warrant Debt Securities to which such holder is
entitled, in fully registered form, registered in such name or names as may be directed by such
holder. If fewer than all of the Warrants evidenced by such Warrant Certificate were exercised,
the Company shall execute, and an authorized officer of the Warrant Agent shall manually
countersign and deliver, a new Warrant Certificate evidencing Warrants for the number of Warrant
Debt Securities remaining unexercised.

          (d) The Company shall not be required to pay any stamp or other tax or other governmental
charge required to be paid in connection with any transfer involved in the issue of the Warrant
Debt Securities, and in the event that any such transfer is involved, the Company shall not be
required to issue or deliver any Warrant Debt Securities until such tax or other charge shall have
been paid or it has been established to the Company’s satisfaction that no such tax or other charge
is due.

ARTICLE 3

OTHER PROVISIONS RELATING TO RIGHTS OF

HOLDERS OF WARRANT CERTIFICATES

     3.1 No Rights as Holders of Warrant Debt Securities Conferred by Warrants or Warrant
Certificates. No Warrant Certificate or Warrant evidenced thereby shall entitle the holder thereof
to any of the rights of a holder of Warrant Debt Securities, including, without limitation, the
right to receive the payment of

3.

 

principal of (or premium, if any) or interest, if any, on the Warrant Debt Securities or to
enforce any of the covenants in the Indenture.

     3.2 Lost, Stolen, Mutilated or Destroyed Warrant Certificates. Upon receipt by the Warrant
Agent of evidence reasonably satisfactory to it and the Company of the ownership of and the loss,
theft, destruction or mutilation of any Warrant Certificate and/or indemnity reasonably
satisfactory to the Warrant Agent and the Company and, in the case of mutilation, upon surrender of
the mutilated Warrant Certificate to the Warrant Agent for cancellation, then, in the absence of
notice to the Company or the Warrant Agent that such Warrant Certificate has been acquired by a
bona fide purchaser, the Company shall execute, and an authorized officer of the Warrant Agent
shall manually countersign and deliver, in exchange for or in lieu of the lost, stolen, destroyed
or mutilated Warrant Certificate, a new Warrant Certificate of the same tenor and evidencing
Warrants for a like principal amount of Warrant Debt Securities. Upon the issuance of any new
Warrant Certificate under this Section 3.2, the Company may require the payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Warrant Agent) in connection therewith. Every
substitute Warrant Certificate executed and delivered pursuant to this Section 3.2 in lieu of any
lost, stolen or destroyed Warrant Certificate shall represent an additional contractual obligation
of the Company, whether or not the lost, stolen or destroyed Warrant Certificate shall be at any
time enforceable by anyone, and shall be entitled to the benefits of this Agreement equally and
proportionately with any and all other Warrant Certificates duly executed and delivered hereunder.
The provisions of this Section 3.2 are exclusive and shall preclude (to the extent lawful) all
other rights and remedies with respect to the replacement of mutilated, lost, stolen or destroyed
Warrant Certificates.

     3.3 Holder of Warrant Certificate May Enforce Rights. Notwithstanding any of the provisions
of this Agreement, any holder of any Warrant Certificate, without the consent of the Warrant Agent,
the [Senior] [Subordinated] Trustee, the holder of any Warrant Debt Securities or the holder of any
other Warrant Certificate, may, in such holder’s own behalf and for such holder’s own benefit,
enforce, and may institute and maintain any suit, action or proceeding against the Company suitable
to enforce, or otherwise in respect of, such holder’s right to exercise the Warrants evidenced by
such holder’s Warrant Certificate in the manner provided in such holder’s Warrant Certificates and
in this Agreement.

     3.4 Merger, Sale, Conveyance or Lease. In case of (a) any share exchange, merger or similar
transaction of the Company with or into another person or entity (other than a share exchange,
merger or similar transaction in which the Company is the acquiring or surviving corporation) or
(b) the sale, exchange, lease, transfer or other disposition of all or substantially all of the
properties and assets of the Company as an entirety (in any such case, a “Reorganization Event”),
then, as a condition of such Reorganization Event, lawful provisions shall be made, and duly
executed documents evidencing the same from the Company’s successor shall be delivered to the
holders of the Warrants, so that such successor shall succeed to and be substituted for the
Company, and assume all the Company’s obligations under, this Agreement and the Warrants. The
Company shall thereupon be relieved of any further obligation hereunder or under the Warrants, and
the Company as the predecessor corporation may thereupon or at any time thereafter be dissolved,
wound up or liquidated. Such successor or assuming entity thereupon may cause to be signed, and
may issue either in its own name or in the name of the Company, any or all of the Warrants issuable
hereunder which heretofore shall not have been signed by the Company, and may execute and deliver
securities in its own name, in fulfillment of its obligations to deliver Warrant Debt Securities
upon exercise of the Warrants. All the Warrants so issued shall in all respects have the same
legal rank and benefit under this Agreement as the Warrants theretofore or thereafter issued in
accordance with the terms of this Agreement as though all of such Warrants had been issued at the
date of the execution hereof. In any case of any such Reorganization Event, such changes in
phraseology and form (but not in substance) may be made in the Warrants thereafter to be issued as
may be appropriate.

     The Warrant Agent may receive a written opinion of legal counsel as conclusive evidence that
any such Reorganization Event complies with the provisions of this Section 3.4.

     3.5 Notice to Warrantholders. In case the Company shall (a) effect any Reorganization Event
or (b) make any distribution on or in respect of the [title of Warrant Debt Securities] in
connection with the dissolution, liquidation or winding up of the Company, then the Company shall
mail to each holder of Warrants at such holder’s address as it shall appear on the books of the
Warrant Agent, at least ten days prior to the applicable date hereinafter

4.

 

specified, a notice stating the date on which such Reorganization Event, dissolution,
liquidation or winding up is expected to become effective, and the date as of which it is expected
that holders of [title of Warrant Debt Securities] of record shall be entitled to exchange their
shares of [title of Warrant Debt Securities] for securities or other property deliverable upon such
Reorganization Event, dissolution, liquidation or winding up. No failure to mail such notice nor
any defect therein or in the mailing thereof shall affect any such transaction.

ARTICLE 4

EXCHANGE AND TRANSFER OF WARRANT CERTIFICATES

     4.1 Exchange and Transfer of Warrant Certificates. [If Other Securities with Warrants which
are immediately detachable —Upon] [If Other Securities with Warrants which are not immediately
detachable — Prior to the Detachable Date, a Warrant Certificate may be exchanged or transferred
only together with the Other Security to which the Warrant Certificate was initially attached, and
only for the purpose of effecting or in conjunction with an exchange or transfer of such Other
Security. Prior to any Detachable Date, each transfer of the Other Security shall operate also to
transfer the related Warrant Certificates. After the Detachable Date, upon] surrender at the
corporate trust office of the Warrant Agent, Warrant Certificates evidencing Warrants may be
exchanged for Warrant Certificates in other denominations evidencing such Warrants or the transfer
thereof may be registered in whole or in part; provided that such other Warrant Certificates
evidence Warrants for the same aggregate principal amount of Warrant Debt Securities as the Warrant
Certificates so surrendered. The Warrant Agent shall keep, at its corporate trust office, books in
which, subject to such reasonable regulations as it may prescribe, it shall register Warrant
Certificates and exchanges and transfers of outstanding Warrant Certificates, upon surrender of the
Warrant Certificates to the Warrant Agent at its corporate trust office for exchange or
registration of transfer, properly endorsed or accompanied by appropriate instruments of
registration of transfer and written instructions for transfer, all in form satisfactory to the
Company and the Warrant Agent. No service charge shall be made for any exchange or registration of
transfer of Warrant Certificates, but the Company may require payment of a sum sufficient to cover
any stamp or other tax or other governmental charge that may be imposed in connection with any such
exchange or registration of transfer. Whenever any Warrant Certificates are so surrendered for
exchange or registration of transfer, an authorized officer of the Warrant Agent shall manually
countersign and deliver to the person or persons entitled thereto a Warrant Certificate or Warrant
Certificates duly authorized and executed by the Company, as so requested. The Warrant Agent shall
not be required to effect any exchange or registration of transfer which will result in the
issuance of a Warrant Certificate evidencing a Warrant for a fraction of a Warrant Debt Security or
a number of Warrants for a whole number of Warrant Debt Securities and a fraction of a Warrant Debt
Security. All Warrant Certificates issued upon any exchange or registration of transfer of Warrant
Certificates shall be the valid obligations of the Company, evidencing the same obligations and
entitled to the same benefits under this Agreement as the Warrant Certificate surrendered for such
exchange or registration of transfer.

     4.2 Treatment of Holders of Warrant Certificates. [If Other Securities and Warrants are not
immediately detachable—Prior to the Detachable Date, the Company, the Warrant Agent and all other
persons may treat the owner of the Other Security as the owner of the Warrant Certificates
initially attached thereto for any purpose and as the person entitled to exercise the rights
represented by the Warrants evidenced by such Warrant Certificates, any notice to the contrary
notwithstanding. After the Detachable Date and prior to due presentment of a Warrant Certificate
for registration of transfer, the] [The] Company, the Warrant Agent and all other persons may treat
the registered holder of a Warrant Certificate as the absolute owner thereof for any purpose and as
the person entitled to exercise the rights represented by the Warrants evidenced thereby, any
notice to the contrary notwithstanding.

     4.3 Cancellation of Warrant Certificates. Any Warrant Certificate surrendered for exchange,
registration of transfer or exercise of the Warrants evidenced thereby shall, if surrendered to the
Company, be delivered to the Warrant Agent and all Warrant Certificates surrendered or so delivered
to the Warrant Agent shall be promptly canceled by the Warrant Agent and shall not be reissued and,
except as expressly permitted by this Agreement, no Warrant Certificate shall be issued hereunder
in exchange therefor or in lieu thereof. The Warrant Agent shall deliver to the Company from time
to time or otherwise dispose of canceled Warrant Certificates in a manner satisfactory to the
Company.

5.

 

ARTICLE 5

CONCERNING THE WARRANT AGENT

     5.1 Warrant Agent. The Company hereby appoints                      as Warrant Agent of the Company in
respect of the Warrants and the Warrant Certificates upon the terms and subject to the conditions
herein set forth, and                      hereby accepts such appointment. The Warrant Agent shall have the
powers and authority granted to and conferred upon it in the Warrant Certificates and hereby and
such further power and authority to act on behalf of the Company as the Company may hereafter grant
to or confer upon it. All of the terms and provisions with respect to such power and authority
contained in the Warrant Certificates are subject to and governed by the terms and provisions
hereof.

     5.2 Conditions of Warrant Agent’s Obligations. The Warrant Agent accepts its obligations
herein set forth upon the terms and conditions hereof, including the following to all of which the
Company agrees and to all of which the rights hereunder of the holders from time to time of the
Warrant Certificates shall be subject:

          (a) Compensation and Indemnification. The Company agrees promptly to pay the Warrant Agent
the compensation to be agreed upon with the Company for all services rendered by the Warrant Agent
and to reimburse the Warrant Agent for reasonable out-of-pocket expenses (including reasonable
counsel fees) incurred without negligence, bad faith or willful misconduct by the Warrant Agent in
connection with the services rendered hereunder by the Warrant Agent. The Company also agrees to
indemnify the Warrant Agent for, and to hold it harmless against, any loss, liability or expense
incurred without negligence, bad faith or willful misconduct on the part of the Warrant Agent,
arising out of or in connection with its acting as Warrant Agent hereunder, including the
reasonable costs and expenses of defending against any claim of such liability.

          (b) Agent for the Company. In acting under this Warrant Agreement and in connection with the
Warrant Certificates, the Warrant Agent is acting solely as agent of the Company and does not
assume any obligations or relationship of agency or trust for or with any of the holders of Warrant
Certificates or beneficial owners of Warrants.

          (c) Counsel. The Warrant Agent may consult with counsel satisfactory to it, which may include
counsel for the Company, and the written advice of such counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted by it hereunder in
good faith and in accordance with the advice of such counsel.

          (d) Documents. The Warrant Agent shall be protected and shall incur no liability for or in
respect of any action taken or omitted by it in reliance upon any Warrant Certificate, notice,
direction, consent, certificate, affidavit, statement or other paper or document reasonably
believed by it to be genuine and to have been presented or signed by the proper parties.

          (e) Certain Transactions. The Warrant Agent, and its officers, directors and employees, may
become the owner of, or acquire any interest in, Warrants, with the same rights that it or they
would have if it were not the Warrant Agent hereunder, and, to the extent permitted by applicable
law, it or they may engage or be interested in any financial or other transaction with the Company
and may act on, or as depositary, trustee or agent for, any committee or body of holders of Warrant
Securities or other obligations of the Company as freely as if it were not the Warrant Agent
hereunder. Nothing in this Warrant Agreement shall be deemed to prevent the Warrant Agent from
acting as [Senior] [Subordinated] Trustee under the [Senior] [Subordinated] Indenture.

          (f) No Liability for Interest. Unless otherwise agreed with the Company, the Warrant Agent
shall have no liability for interest on any monies at any time received by it pursuant to any of
the provisions of this Agreement or of the Warrant Certificates.

          (g) No Liability for Invalidity. The Warrant Agent shall have no liability with respect to
any invalidity of this Agreement or any of the Warrant Certificates (except as to the Warrant
Agent’s countersignature thereon).

6.

 

          (h) No Responsibility for Representations. The Warrant Agent shall not be responsible for any
of the recitals or representations herein or in the Warrant Certificates (except as to the Warrant
Agent’s countersignature thereon), all of which are made solely by the Company.

          (i) No Implied Obligations. The Warrant Agent shall be obligated to perform only such duties
as are herein and in the Warrant Certificates specifically set forth and no implied duties or
obligations shall be read into this Agreement or the Warrant Certificates against the Warrant
Agent. The Warrant Agent shall not be under any obligation to take any action hereunder which may
tend to involve it in any expense or liability, the payment of which within a reasonable time is
not, in its reasonable opinion, assured to it. The Warrant Agent shall not be accountable or under
any duty or responsibility for the use by the Company of any of the Warrant Certificates
authenticated by the Warrant Agent and delivered by it to the Company pursuant to this Agreement or
for the application by the Company of the proceeds of the Warrant Certificates. The Warrant Agent
shall have no duty or responsibility in case of any default by the Company in the performance of
its covenants or agreements contained herein or in the Warrant Certificates or in the case of the
receipt of any written demand from a holder of a Warrant Certificate with respect to such default,
including, without limiting the generality of the foregoing, any duty or responsibility to initiate
or attempt to initiate any proceedings at law or otherwise or, except as provided in Section 6.2
hereof, to make any demand upon the Company.

     5.3 Resignation, Removal and Appointment of Successors.

          (a) The Company agrees, for the benefit of the holders from time to time of the Warrant
Certificates, that there shall at all times be a Warrant Agent hereunder until all the Warrants
have been exercised or are no longer exercisable.

          (b) The Warrant Agent may at any time resign as agent by giving written notice to the Company
of such intention on its part, specifying the date on which its desired resignation shall become
effective; provided that such date shall not be less than three months after the date on which such
notice is given unless the Company otherwise agrees. The Warrant Agent hereunder may be removed at
any time by the filing with it of an instrument in writing signed by or on behalf of the Company
and specifying such removal and the intended date when it shall become effective. Such resignation
or removal shall take effect upon the appointment by the Company, as hereinafter provided, of a
successor Warrant Agent (which shall be a bank or trust company authorized under the laws of the
jurisdiction of its organization to exercise corporate trust powers) and the acceptance of such
appointment by such successor Warrant Agent. The obligation of the Company under Section 5.2(a)
shall continue to the extent set forth therein notwithstanding the resignation or removal of the
Warrant Agent.

          (c) In case at any time the Warrant Agent shall resign, or shall be removed, or shall become
incapable of acting, or shall be adjudged a bankrupt or insolvent, or shall commence a voluntary
case under the Federal bankruptcy laws, as now or hereafter constituted, or under any other
applicable Federal or state bankruptcy, insolvency or similar law or shall consent to the
appointment of or taking possession by a receiver, custodian, liquidator, assignee, trustee,
sequestrator (or other similar official) of the Warrant Agent or its property or affairs, or shall
make an assignment for the benefit of creditors, or shall admit in writing its inability to pay its
debts generally as they become due, or shall take corporate action in furtherance of any such
action, or a decree or order for relief by a court having jurisdiction in the premises shall have
been entered in respect of the Warrant Agent in an involuntary case under the Federal bankruptcy
laws, as now or hereafter constituted, or any other applicable Federal or state bankruptcy,
insolvency or similar law, or a decree or order by a court having jurisdiction in the premises
shall have been entered for the appointment of a receiver, custodian, liquidator, assignee,
trustee, sequestrator (or similar official) of the Warrant Agent or of its property or affairs, or
any public officer shall take charge or control of the Warrant Agent or of its property or affairs
for the purpose of rehabilitation, conservation, winding up or liquidation, a successor Warrant
Agent, qualified as aforesaid, shall be appointed by the Company by an instrument in writing, filed
with the successor Warrant Agent. Upon the appointment as aforesaid of a successor Warrant Agent
and acceptance by the successor Warrant Agent of such appointment, the Warrant Agent shall cease to
be Warrant Agent hereunder.

          (d) Any successor Warrant Agent appointed hereunder shall execute, acknowledge and deliver to
its predecessor and to the Company an instrument accepting such appointment hereunder, and
thereupon such successor Warrant Agent, without any further act, deed or conveyance, shall become
vested with all the authority, rights,

7.

 

powers, trusts, immunities, duties and obligations of such predecessor with like effect as if
originally named as Warrant Agent hereunder, and such predecessor, upon payment of its charges and
disbursements then unpaid, shall thereupon become obligated to transfer, deliver and pay over, and
such successor Warrant Agent shall be entitled to receive, all monies, securities and other
property on deposit with or held by such predecessor, as Warrant Agent hereunder.

          (e) Any corporation into which the Warrant Agent hereunder may be merged or converted or any
corporation with which the Warrant Agent may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Warrant Agent shall be a party, or any corporation
to which the Warrant Agent shall sell or otherwise transfer all or substantially all the assets and
business of the Warrant Agent, provided that it shall be qualified as aforesaid, shall be the
successor Warrant Agent under this Agreement without the execution or filing of any paper or any
further act on the part of any of the parties hereto.

ARTICLE 6

MISCELLANEOUS

     6.1 Amendment. This Agreement may be amended by the parties hereto, without the consent of
the holder of any Warrant Certificate, for the purpose of curing any ambiguity, or of curing,
correcting or supplementing any defective provision contained herein, or making any other
provisions with respect to matters or questions arising under this Agreement as the Company and the
Warrant Agent may deem necessary or desirable; provided that such action shall not materially
adversely affect the interests of the holders of the Warrant Certificates.

     6.2 Notices and Demands to the Company and Warrant Agent. If the Warrant Agent shall receive
any notice or demand addressed to the Company by the holder of a Warrant Certificate pursuant to
the provisions of the Warrant Certificates, the Warrant Agent shall promptly forward such notice or
demand to the Company.

     6.3 Addresses. Any communication from the Company to the Warrant Agent with respect to this
Agreement shall be addressed to                     , Attention:                      and any communication from
the Warrant Agent to the Company with respect to this Agreement shall be addressed to 650 Gateway
Boulevard, South San Francisco, CA 94080, Attn: General Counsel (or such other address as shall be
specified in writing by the Warrant Agent or by the Company).

     6.4 Governing Law. This Agreement and each Warrant Certificate issued hereunder shall be
governed by and construed in accordance with the laws of the State of New York.

     6.5 Delivery of Prospectus. The Company shall furnish to the Warrant Agent sufficient copies
of a prospectus meeting the requirements of the Securities Act of 1933, as amended, relating to the
Warrant Debt Securities deliverable upon exercise of the Warrants (the “Prospectus”), and the
Warrant Agent agrees that upon the exercise of any Warrant, the Warrant Agent will deliver to the
holder of the Warrant Certificate evidencing such Warrant, prior to or concurrently with the
delivery of the Warrant Debt Securities issued upon such exercise, a Prospectus.

The Warrant Agent shall not, by reason of any such delivery, assume any responsibility for the
accuracy or adequacy of such Prospectus.

     6.6 Obtaining of Governmental Approvals. The Company will from time to time take all action
which may be necessary to obtain and keep effective any and all permits, consents and approvals of
governmental agencies and authorities and securities act filings under United States Federal and
state laws (including without limitation a registration statement in respect of the Warrants and
Warrant Debt Securities under the Securities Act of 1933, as amended), which may be or become
requisite in connection with the issuance, sale, transfer, and delivery of the Warrant Debt
Securities issued upon exercise of the Warrants, the issuance, sale, transfer and delivery of the
Warrants or upon the expiration of the period during which the Warrants are exercisable.

8.

 

     6.7 Persons Having Rights Under Warrant Agreement. Nothing in this Agreement shall give to
any person other than the Company, the Warrant Agent and the holders of the Warrant Certificates
any right, remedy or claim under or by reason of this Agreement.

     6.8 Headings. The descriptive headings of the several Articles and Sections of this Agreement
are inserted for convenience only and shall not control or affect the meaning or construction of
any of the provisions hereof.

     6.9 Counterparts. This Agreement may be executed in any number of counterparts, each of which
as so executed shall be deemed to be an original, but such counterparts shall together constitute
but one and the same instrument.

     6.10 Inspection of Agreement. A copy of this Agreement shall be available at all reasonable
times at the principal corporate trust office of the Warrant Agent for inspection by the holder of
any Warrant Certificate. The Warrant Agent may require such holder to submit his Warrant
Certificate for inspection by it.

9.

 

     In Witness Whereof, the parties hereto have caused this Agreement to be duly
executed, all as of the day and year first above written.

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Alexza Pharmaceuticals, Inc.	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Its	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 

	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Attest:
	 	 	 	 	 	 	 	 	 	, as	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Warrant Agent	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Its	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	Attest:
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 

	 	 	 	 	 	 	 	 	 	 

[Signature Page to Debt Securities Warrant Agreement]

 

 

Exhibit A

FORM OF WARRANT CERTIFICATE

[Face of Warrant Certificate]

	 	 	 
	[Form if Warrants are attached to
Other Securities and are not
immediately detachable.

	 	Prior to                     , this Warrant
Certificate cannot be transferred or
exchanged unless attached to a
[Title of Other Security].]
	 
	 	 
	[Form of Legend if Warrants are not
immediately exercisable.

	 	Prior to                     , Warrants
evidenced by this Warrant
Certificate cannot be exercised.]

EXERCISABLE ONLY IF COUNTERSIGNED BY THE WARRANT

AGENT AS PROVIDED HEREIN

VOID AFTER [          ] P.M., [CITY] TIME, ON                     ,

ALEXZA PHARMACEUTICALS, INC.

WARRANT CERTIFICATE REPRESENTING

WARRANTS TO PURCHASE

[TITLE OF WARRANT DEBT SECURITIES]

 

			
	 	 	 
	No.                     
	 	                     Warrants

This certifies that                      or registered assigns is the registered owner of the
above indicated number of Warrants, each Warrant entitling such owner [if Warrants are
attached to Other Securities and are not immediately detachable, subject to the registered
owner qualifying as a “Holder” of this Warrant Certificate, as hereinafter defined)] to
purchase, at any time [after [                    ] p.m., [City] time, on                      and] on or before
[                    ]
p.m., [City] time, on                     , $___ principal amount of [Title of Warrant
Debt Securities] (the “Warrant Debt Securities”), of Alexza Pharmaceuticals, Inc. (the
“Company”), issued or to be issued under the Indenture (as hereinafter defined), on the
following basis: during the period from                     , through and including                     , each
Warrant shall entitle the Holder thereof, subject to the provisions of this Agreement, to
purchase the principal amount of Warrant Debt Securities stated in the Warrant Certificate
at the warrant price (the “Warrant Price”) of ___% of the principal amount thereof [plus
accrued amortization, if any, of the original issue discount of the Warrant Debt Securities]
[plus accrued interest, if any, from the most recent date from which interest shall have
been paid on the Warrant Debt Securities or, if no interest shall have been paid on the
Warrant Debt Securities, from the date of their original issuance]. [The original issue
discount ($___ for each $1,000 principal amount of Warrant Debt Securities) will be
amortized at a ___% annual rate, computed on a[n] [semi-]annual basis [using a 360-day year
consisting of twelve 30-day months]. The Holder may exercise the Warrants evidenced hereby
by providing certain information set forth on the back hereof and by paying in full, in
lawful money of the United States of America, [in cash or by certified check or official
bank check in New York Clearing House funds] [by bank wire transfer in immediately available
funds], the Warrant Price for each Warrant Debt Security with respect to which this Warrant
is exercised to the Warrant Agent (as hereinafter defined) and by surrendering this Warrant
Certificate, with the purchase form on the back hereof duly executed, at the corporate trust
office of [name of Warrant Agent], or its

A-1

 

successor as warrant agent (the “Warrant Agent”), which is, on the date hereof, at the
address specified on the reverse hereof, and upon compliance with and subject to the
conditions set forth herein and in the Warrant Agreement (as hereinafter defined).

     The term “Holder” as used herein shall mean [If Warrants are attached to Other Securities and
are not immediately detachable, prior to
                    , ___ (the “Detachable Date”), the registered
owner of the Company’s [title of Other Securities] to which this Warrant Certificate was initially
attached, and after such Detachable Date,] the person in whose name at the time this Warrant
Certificate shall be registered upon the books to be maintained by the Warrant Agent for that
purpose pursuant to Section 4 of the Warrant Agreement.

     The Warrants evidenced by this Warrant Certificate may be exercised to purchase Warrant Debt
Securities in the principal amount of $1,000 or any integral multiple thereof in registered form.
Upon any exercise of fewer than all of the Warrants evidenced by this Warrant Certificate, there
shall be issued to the Holder hereof a new Warrant Certificate evidencing Warrants for the
aggregate principal amount of Warrant Debt Securities remaining unexercised.

     This Warrant Certificate is issued under and in accordance with the Warrant Agreement dated as
of
                    , ___ (the “Warrant Agreement”), between the Company and the Warrant Agent and is
subject to the terms and provisions contained in the Warrant Agreement, to all of which terms and
provisions the Holder of this Warrant Certificate consents by acceptance hereof. Copies of the
Warrant Agreement are on file at the above-mentioned office of the Warrant Agent.

     The Warrant Debt Securities to be issued and delivered upon the exercise of Warrants evidenced
by this Warrant Certificate will be issued under and in accordance with an Indenture, [dated as of
                    ,
___ (the “Senior Indenture”), between the Company and                     , as trustee (such
trustee, and any successors to such trustee, the “Senior Trustee”)] [dated as of                     ,
___, (the “Subordinated Indenture”), between the Company and                     , as trustee (such
trustee, and any successors to such trustee, the “Subordinated Trustee”)] and will be subject to
the terms and provisions contained in the Warrant Debt Securities and in the Indenture. Copies of
the [Senior] [Subordinated] Indenture, including the form of the Warrant Debt Securities, are on
file at the corporate trust office of the Trustee.

     [If Warrants are attached to Other Securities and are not immediately detachable—Prior to the
Detachable Date, this Warrant Certificate may be exchanged or transferred only together with the
[Title of Other Securities] (the “Other Securities”) to which this Warrant Certificate was
initially attached, and only for the purpose of effecting or in conjunction with, an exchange or
transfer of such Other Security. Additionally, on or prior to the Detachable Date, each transfer
of such Other Security on the register of the Other Securities shall operate also to transfer this
Warrant Certificate. After such date, transfer of this] [If Warrants are attached to Other
Securities and are immediately detachable — Transfer of this] Warrant Certificate may be registered
when this Warrant Certificate is surrendered at the corporate trust office of the Warrant Agent by
the registered owner or such owner’s assigns, in the manner and subject to the limitations provided
in the Warrant Agreement.

     [If Other Securities with Warrants which are not immediately detachable-Except as provided in
the immediately preceding paragraph, after] [If Other Securities with Warrants which are
immediately detachable or Warrants alone—After] countersignature by the Warrant Agent and prior to
the expiration of this Warrant Certificate, this Warrant Certificate may be exchanged at the
corporate trust office of the Warrant Agent for Warrant Certificates representing Warrants for the
same aggregate principal amount of Warrant Debt Securities.

     This Warrant Certificate shall not entitle the Holder hereof to any of the rights of a holder
of the Warrant Debt Securities, including, without limitation, the right to receive payments of
principal of (and premium, if any) or interest, if any, on the Warrant Debt Securities or to
enforce any of the covenants of the Indenture.

     Reference is hereby made to the further provisions of this Warrant Certificate set forth on
the reverse hereof, which further provisions shall for all purposes have the same effect as if set
forth at this place.

A-2

 

     This Warrant Certificate shall not be valid or obligatory for any purpose until countersigned
by the Warrant Agent.

A-3

 

     In Witness Whereof, the Company has caused this Warrant to be executed in its name
and on its behalf by the facsimile signatures of its duly authorized officers.

	 	 	 	 	 	 	 	 	 	 	 
	Dated:	 	 	 	 	 	Alexza Pharmaceuticals, Inc.	 	 
	 

	 	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	Its
	 	 

	 	 
	 

	 	 	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Attest:
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	Countersigned:	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	As Warrant Agent	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:
	 	 	 	 	 	 	 	 	 	 
	 

	 	 

Authorized Signature
	 	 	 	 	 	 	 	 

A-4

 

[REVERSE OF WARRANT CERTIFICATE]

(Instructions for Exercise of Warrants)

     To exercise any Warrants evidenced hereby for Warrant Debt Securities (as hereinafter
defined), the Holder must pay, in lawful money of the United States of America, [in cash or by
certified check or official bank check in New York Clearing House funds] [by bank wire transfer in
immediately available funds], the Warrant Price in full for Warrants exercised, to [Warrant Agent]
[address of Warrant Agent], Attn:                     , which payment must specify the name of the Holder
and the number of Warrants exercised by such Holder. In addition, the Holder must complete the
information required below and present this Warrant Certificate in person or by mail (certified or
registered mail is recommended) to the Warrant Agent at the appropriate address set forth above.
This Warrant Certificate, completed and duly executed, must be received by the Warrant Agent within
five business days of the payment.

(To be executed upon exercise of Warrants)

     The undersigned hereby irrevocably elects to exercise                      Warrants, represented by this
Warrant Certificate, to purchase $___ principal amount of the [Title of Warrant Debt Securities]
(the “Warrant Debt Securities”) of Alexza Pharmaceuticals, Inc. and represents that he has tendered
payment for such Warrant Debt Securities, in lawful money of the United States of America, [in cash
or by certified check or official bank check in New York Clearing House funds] [by bank wire
transfer in immediately available funds], to the order of Alexza Pharmaceuticals, Inc., c/o [insert
name and address of Warrant Agent], in the amount of $                     in accordance with the terms
hereof. The undersigned requests that said principal amount of Warrant Debt Securities be in fully
registered form in the authorized denominations, registered in such names and delivered all as
specified in accordance with the instructions set forth below.

     If the number of Warrants exercised is less than all the Warrants evidenced hereby, the
undersigned requests that a new Warrant Certificate evidencing the Warrants for the aggregate
principal amount of Warrant Debt Securities remaining unexercised be issued and delivered to the
undersigned unless otherwise specified in the instructions below.

	 	 	 	 	 	 	 	 	 	 	 
	Dated

	 	 	 	 	 	Name	 	 	 	 
	 

	 	 

	 	 
	 	 	 	 

                    (Please Print)
	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Address	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	(Insert Social Security or Other Identifying Number of Holder)	 	 

A-5

 

Signature Guaranteed

	 	 	 	 	 
	 

	 	 

Signature
	 	 
	 
	 	 	 	 
	 

	 	(Signature must conform in all respects to
name of holder as specified on the face of
this Warrant Certificate and must bear a
signature guarantee by a bank, trust company
or member broker of the New York, Midwest or
Pacific Stock Exchange)	 	 

     This Warrant may be exercised at the following addresses:

	 	 	 	 	 
	By hand at
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	By mail at
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	 

	 	 

	 	 

[Instructions as to form and delivery of Warrant Debt Securities and, if applicable, Warrant
Certificates evidencing Warrants for the number of Warrant Debt Securities remaining unexercised —
complete as appropriate.]

A-6

 

ASSIGNMENT

[Form of assignment to be executed if

Warrant Holder desires to transfer Warrant]

     FOR VALUE RECEIVED,                                                              hereby sells,
assigns and transfers unto:

	 	 	 	 	 
	 
	 	 	 	 
	 

(Please print name and address including zip code)

	 	 

Please insert Social Security or other
identifying number
	 	 

the right represented by the within Warrant to purchase $                    0 aggregate principal amount of
[Title of Warrant Debt Securities] of Alexza Pharmaceuticals, Inc. to which the within Warrant
relates and appoints                      attorney to transfer such right on the books of the Warrant Agent
with full power of substitution in the premises.

	 	 	 	 	 	 	 	 	 
	Dated
	 	 	 	 	 	 	 	 
	 

	 	 

	 	 
	 	 

Signature

(Signature must conform in all respects to
name of holder as specified on the face of the
Warrant)
	 	 
	 
	 	 	 	 	 	 	 	 
	Signature Guaranteedexv10w61

 

Exhibit 10.61

	 	 	 
	

	 	Number: GPC-001                                         Page 1 of 3
	 

	Original Issue Date: 7/26/04
	WESTMORELAND COAL COMPANY

	 	Supersedes Policy IV-16 Dated 10/1/94
	Manual of Policies:

	 	Approved Issuing Officer:
	COMPENSATION
	 	 
	Title:
	 	 
	 

	 	 
	SEVERANCE POLICY

	 	Name: Christopher K. Seglem
	 

	 	Title: President & CEO

	1.	 	POLICY STATEMENT
	 
	 	 	It is the policy of the Westmoreland Coal Company, (“the Company”, or “Westmoreland”) to pay
severance benefits under certain specific and limited circumstances, as defined by this policy,
to certain non-classified employees who are involuntarily terminated for reasons other than
cause and under certain conditions described herein. The purpose of severance is to aid
employees for hardships incurred upon loss of employment. This policy applies to
non-classified employees of Westmoreland Coal Company and all of its direct and indirect
subsidiaries.
	 
	2.	 	FUTURE OF THE POLICY
	 
	 	 	Although the Company currently expects to continue the provisions of this policy, the Company
reserves the right to change or amend at any time, at its sole discretion, any and all terms
and conditions of this policy, or to terminate this policy in its entirety.
	 
	3.	 	PROCEDURE

	 	3.1	 	ELIGIBILITY
	 
	 	 	 	All full-time non-union employees with six months of service and scheduled to work at
least 1,000 hours in a calendar year are eligible for severance benefits under this
policy, but only if their employment is terminated for one of the following reasons and
the employee waives any and all claims against the Company, its officers, directors and
employees, by signing an Employment Release and Settlement Agreement:

	 	 	 	3.1.1 Involuntary termination that is not for Cause.
	 
	 	 	 	3.1.2 A reduction in work force.
	 
	 	 	 	3.1.3 Liquidation of the Company.

	 	3.2	 	INELIGIBILITY
	 
	 	 	 	Severance benefits will not be paid when termination occurs under the following
circumstances:

	 	3.2.1	 	Voluntary termination by the employee (except for unused vacation).
	 
	 	3.2.2	 	For Cause.

 

 

	 	 	 	 	 	 	 	 	 
	Title:

	 	No.
	 	Date Issued:
	 	Supersedes
	 	Page 2 of 3
	SEVERANCE POLICY

	 	GPC-001
	 	7/26/04
	 	Policy IV-19	 	 
		 		 		 	Dated 10/1/94	 	 

	 	3.2.2.1	 	Unsatisfactory job performance.
	 
	 	3.2.2.2	 	Gross or willful misconduct that is injurious to the Company, or its
Subsidiaries or Affiliates, which includes but is not limited to an act or
acts constituting embezzlement, misappropriation of funds or property of the
Company, larceny, fraud, gross negligence, crime or crimes resulting in a
felony conviction, moral turpitude or behavior that brings the employee into
public disrepute, contempt, scandal or ridicule or that reflects unfavorably
upon the reputation or high moral or ethical standards of the Company or
violation of Company policy including but not limited to the policies set
forth on Code of Business Conduct and Fitness for Duty; willful
misrepresentation to the Company’s directors, officers, managers,
supervisors, employees or third parties; or failure to meet the duties of
care and loyalty to the Company. For purposes of this paragraph, failure to
act on the participant’s part shall be considered “willful” if done by the
participant without a reasonable belief that the omission was in the best
interest of the Company.

	 	3.3	 	DETERMINATION AND PAYMENT OF SEVERANCE PAYMENTS
	 
	 	 	 	Employees who meet the eligibility requirements of this policy and who execute and adhere
to an Employment Release and Settlement Agreement, wherein any and all claims against the
Company, its Officers, Directors, Managers and Employees are waived, will receive in
consideration for that agreement and their Westmoreland service, severance benefits
according to the following formula:

	 	a.)	 	Hourly/Non-Exempt — Severance pay equal to one (1) week of base
salary for every year of continuous and completed service to the Company with a
minimum of two weeks and a maximum of 26 weeks.
	 
	 	b.)	 	Salaried/Exempt — Severance pay equal to two (2) weeks of base
salary for every year of continuous and completed service with a minimum of
four (4) weeks and a maximum of 36 weeks base salary.
	 
	 	c.)	 	Executives — (VP/GM level and above) receive severance pay
equal to four (4) weeks of base salary for every year of continuous and
completed service with a minimum of eight (8) weeks and a maximum of 52 weeks.

	 	 	 	Length of service shall be determined based on original date of employment with
Westmoreland or, in the case of an acquired subsidiary, upon the date of employment with
the acquired subsidiary.
	 
	 	 	 	Severance payments will be paid in equal installments on the normal payroll schedule and
shall be net of any tax, medical or other required withholdings.
	 
	 	3.4	 	CONTINUATION OF BENEFITS
	 
	 	 	 	In addition to the Severance Payment, eligible employees will receive payment for any
unused vacation up to the date of termination for the calendar year. Payment will not be
made for holidays or floating holidays.

 

 

	 	 	 	 	 	 	 	 	 
	Title:

	 	No.
	 	Date Issued:
	 	Supersedes
	 	Page 3 of 3
	SEVERANCE POLICY

	 	GPC-001
	 	7/26/04
	 	Policy IV-19	 	 
		 		 		 	Dated 10/1/94	 	 

	 	 	 	In the event of termination, medical, vision, and dental benefits will continue for
the balance of the month in which discharge occurred, plus three (3) months.
	 
	 	 	 	All other benefits will terminate in accordance with the respective plan documents.
	 
	 	3.5	 	SURVIVABILITY OF PAYMENTS
	 
	 	 	 	The commitments under this policy shall survive, to the extent permissible by law, upon
the bankruptcy, insolvency, liquidation or dissolution of the Company.

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