Document:

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.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

6

 

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:

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