Document:

exv10w45

Exhibit 10.45

2009 — 2010 Performance Based Incentive Program

Alexza believes the two primary drivers of near-term value are the AZ-004 NDA Submission and the
AZ-004 NDA approval. External guidance for each the date of each milestone is Q1 2010 and Q1 2011,
respectively.

The Alexza Board has directed management to develop a two-year incentive program (the “Plan”) that
takes into consideration these two key milestones, along with considerations of (a) current market
conditions, (b) the internal goal of overall cash conservation, (c) the recent consolidation of
operations at Alexza, and (d) the past compensation elements of salary increases, bonus programs
and stock option programs.

“Target Value Amount (TVA)”

We have built the Plan that has as its key element, a two-year potential pay-out number (TVA),
based upon several factors for each participate / employee. These factors are current salary, past
bonus target(s), past merit raises, and an “incentive multiplier”. All of these factors are
stratified by level within the company. The resulting TVA over the two year period, is outlined in
the following table:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	TVA -
	 	 	Target	 	Merit	 	2-Year	 	 	 	 	 	Total %
	 	 	Bonus %	 	Raise %	 	% of Salary	 	Multiplier	 	of Salary
	CEO
	 	 	60	%	 	 	5	%	 	 	130	%	 	 	30	%	 	 	169	%
	Officers
	 	 	45	%	 	 	5	%	 	 	100	%	 	 	20	%	 	 	120	%
	Directors
	 	 	25	%	 	 	5	%	 	 	60	%	 	 	15	%	 	 	69	%
	Managers
	 	 	17.5	%	 	 	5	%	 	 	45	%	 	 	10	%	 	 	50	%
	Employees
	 	 	10	%	 	 	5	%	 	 	30	%	 	 	10	%	 	 	33	%

Payout Metrics

The Plan has two on-or-off trigger points, which are the two milestones outlined above. With the
accomplishment of the first milestone, the Plan would pay 1/3 of the TVA for each employee. With
the accomplishment of the second milestone, the Plan would pay 2/3 of the TVA for each employee.
At each payout point, the specific employee TVA would be simply multiplied by the most recent (or
upcoming) performance rating for each employee (ranging form 70 — 125%), as recorded in Alexza’s
existing performance evaluation and review system, to calculate the actual payout target amount.

 

 

The allocation of the TVA is comprised of cash, RSUs and stock options. The specific allocation
for each employee group is outlined in the table below:

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Payout	 	 
	 	 	 	 	 	 	Allocation	 	 
	 	 	Cash %	 	RSU %	 	Options %
	Officers
	 	 	30	%	 	 	40	%	 	 	30	%
	Non-Officers
	 	 	30	%	 	 	70	%	 	 	0	%

At each milestone, an employee would have to be in good standing with the company and have a
personal performance rating of at least 70%, to participate in the Plan. The first 70% of any TVA
payout will be paid with RSU’s and stock options. Any TVA payout above 70% will be paid with cash.
For example, an employee with a 92% end of year rating would received 70% of the TVA in
stock/stock options at 22% of the TVA in cash.

Payout Logistics

The RSU and stock option portion of the plan would be based on shares granted now, but vesting upon
the first milestone. The RSUs would vest 100% at the milestone accomplishment date (or the first
TVA payout date), and the stock options would vest 50% at the first TVA payout date and 50% on the
first anniversary of the first TVA payout date. Using the approximate current stock price of
$2.50/share and a Black Sholes stock option value of $1.66/share, the following table outlines the
projected “average” cash, RSU and stock option grant associated with the first TVA payout date.

NDA Submission Milestone (at 100% Personal Goals)

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Avg	 	Avg	 	Avg
	 	 	Cash	 	RSUs	 	Options
	CEO (1)

	 	$	76,895	 	 	 	41,011	 	 	 	46,287	 
	Officers (9)

	 	$	32,084	 	 	 	17,112	 	 	 	19,313	 
	Directors (23)

	 	$	11,994	 	 	 	11,194	 	 	 	0	 
	Managers (26)

	 	$	5,976	 	 	 	5,578	 	 	 	0	 
	Employees (45)

	 	$	2,449	 	 	 	2,286	 	 	 	0	 

 

 

One the first TVA payout date (the accomplishment of the NDA submission), the number of RSUs and
stock options for the second milestone will be calculated, based on the then current market price
of the Alexza common stock, and granted with vesting similar to the first milestone vesting. That
is, the second tranche of RSUs would vest 100% at the second milestone accomplishment date (or the
second TVA payout date), and the stock options would vest 50% at the second TVA payout date and 50%
on the first anniversary of the second TVA payout date. Using an approximate stock price of
$4.50/share and a Black Sholes stock option value of $2.99/share, the following table outlines the
projected “average” cash, RSU and stock option grant associated with a second TVA payout date.

NDA Approval Milestone (at 100% Personal Goals)

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Avg	 	 
	 	 	Avg Cash	 	RSUs	 	Avg Options
	CEO (1)

	 	$	153,790	 	 	 	45,567	 	 	 	51,430	 
	Officers (9)

	 	$	64,169	 	 	 	19,013	 	 	 	21,459	 
	Directors (23)

	 	$	23,987	 	 	 	12,438	 	 	 	0	 
	Managers (26)

	 	$	11,952	 	 	 	6,197	 	 	 	0	 
	Employees (45)

	 	$	4,899	 	 	 	2,540	 	 	 	0	 

As Company officers (CEO, SVP and VP levels) are restricted from trading Alexza stock outside of a
filed 10b5-1 plan, the Company will pay, on a grossed-up basis, any Federal and State tax resulting
from the granting and/or vesting of any RSUs to officers.exv10w47

Exhibit 10.47

[ * ] = Certain confidential information contained in this document, marked by
brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.

 

AMENDED AND RESTATED

PURCHASE OPTION AGREEMENT

by and among

ALEXZA PHARMACEUTICALS, INC.,

SYMPHONY ALLEGRO HOLDINGS LLC

and

SYMPHONY ALLEGRO, INC.

 

Dated as of June 15, 2009

 

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page
	Section 1.	 	Grant of Purchase Option
	 	 	2	 
	 
	Section 2.	 	Exercise of Purchase Option
	 	 	3	 
	 
	Section 3.	 	Alexza Representations, Warranties and Covenants
	 	 	6	 
	 
	Section 4.	 	Holdings Representations, Warranties and Covenants
	 	 	9	 
	 
	Section 5.	 	Symphony Allegro Representations, Warranties and Covenants
	 	 	13	 
	 
	Section 6.	 	Notice of Material Event
	 	 	22	 
	 
	Section 7.	 	Assignment; Transfers; Legend
	 	 	22	 
	 
	Section 8.	 	Costs and Expenses; Payments
	 	 	23	 
	 
	Section 9.	 	Expiration; Termination of Agreement
	 	 	23	 
	 
	Section 10.	 	Survival; Indemnification
	 	 	24	 
	 
	Section 11.	 	No Petition
	 	 	27	 
	 
	Section 12.	 	Third-Party Beneficiary
	 	 	27	 
	 
	Section 13.	 	Notices
	 	 	27	 
	 
	Section 14.	 	Governing Law; Consent to Jurisdiction and Service of Process
	 	 	28	 
	 
	Section 15.	 	WAIVER OF JURY TRIAL
	 	 	29	 
	 
	Section 16.	 	Entire Agreement
	 	 	29	 
	 
	Section 17.	 	Amendment; Successors; Counterparts
	 	 	29	 
	 
	Section 18.	 	Specific Performance
	 	 	30	 
	 
	Section 19.	 	Severability
	 	 	30	 
	 
	Section 20.	 	Tax Reporting
	 	 	30	 
	 
	Section 21.	 	Original Agreement
	 	 	31	 

i

 

	 	 	 	 	 	 	 	 	 
	Annex A	 	Certain Definitions
	 	 	 	 
	 
	Exhibit 1	 	Purchase Exercise Notice
	 	 	 	 
	 
	Exhibit 2	 	Form of Opinion of Cooley Godward Kronish LLP
	 	 	 	 

ii

 

AMENDED AND RESTATED PURCHASE OPTION AGREEMENT

     This AMENDED AND RESTATED PURCHASE OPTION AGREEMENT (this “Agreement”) is entered into
as of June 15, 2009, by and among ALEXZA PHARMACEUTICALS, INC., a Delaware corporation
(“Alexza”), SYMPHONY ALLEGRO HOLDINGS LLC, a Delaware limited liability company
(“Holdings”), and SYMPHONY ALLEGRO, INC., a Delaware corporation (“Symphony
Allegro”). Capitalized terms used herein and not defined herein shall have the meanings
assigned to such terms in Annex A attached hereto.

PRELIMINARY STATEMENT

     WHEREAS, Alexza, Holdings and Symphony Allegro are parties to that certain Purchase Option
Agreement dated as of December 1, 2006 (the “Original Agreement”), pursuant to which
Holdings granted Alexza an option to purchase all of the Common Stock of Symphony Allegro and any
other Equity Securities issued by Symphony Allegro (together, the “Symphony Allegro Equity
Securities”) owned, or thereafter acquired, by Holdings on the terms described therein;

     WHEREAS, institutional investors have invested $50,000,000 in Holdings (the
“Financing”) in exchange for membership interests in Holdings and for warrants to purchase
up to a total of 2 million shares of Alexza Common Stock, which were initially issued to Holdings,
and Holdings contributed the proceeds of the Financing to Symphony Allegro;

     WHEREAS, the parties to the Original Agreement desire to amend and restate the Original
Agreement and accept the rights and covenants hereof in lieu of their rights and covenants under
the Original Agreement;

     WHEREAS, contemporaneously with the execution of this Agreement, Alexza has exercised the
Purchase Option (as defined below) by delivering the Purchase Option Exercise Notice (as defined
below) to Holdings and Symphony Allegro;

     WHEREAS, on the Purchase Option Closing Date, Alexza will issue to Holdings, subject to the
satisfaction of certain conditions (including, without limitation, the Stockholder Approval (as
defined below) and cancellation of the warrants previously issued by Alexza to Holdings and its
Affiliates), the Alexza Closing Shares (as defined below) and warrants (the “Alexza Closing
Warrants”) to purchase up to 5 million shares of Alexza Common Stock, to be initially issued to
Holdings (the “Alexza Closing Warrant Shares”); and

     WHEREAS, Symphony Allegro and Holdings have determined that it is in each of its best interest
to perform and comply with certain agreements and covenants relating to each of its ongoing
operations contained in this Agreement.

     NOW, THEREFORE, in consideration of the foregoing and for other good and

 

			
	[ * ] =	 	 Certain confidential information contained in this document, marked by
brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.

 

 

valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto (the “Parties”) agree as follows:

          Section 1. Grant of Purchase Option.

               (a) Holdings hereby grants to Alexza an exclusive option (the “Purchase Option”) to
purchase all, but not less than all, of the outstanding Symphony Allegro Equity Securities owned or
hereafter acquired by Holdings, in accordance with the terms of this Agreement.

               (b) Symphony Allegro hereby covenants and agrees that all Symphony Allegro Equity Securities
issued by Symphony Allegro at any time prior to the expiration of the Term (including to Holdings
on, prior to, or after the date hereof or to any other Person at any time whatsoever, in all cases
prior to the expiration of the Term) shall be subject to a purchase option on the same terms as the
Purchase Option (except as provided by the immediately following sentence) and all of the other
terms and conditions of this Agreement without any additional action on the part of Alexza or
Holdings. Further, to the extent Symphony Allegro shall issue any Symphony Allegro Equity
Securities (including any issuance in respect of a transfer of Symphony Allegro Equity Securities
by any holder thereof, including Holdings) after the date hereof to any Person (including Holdings)
(any issuance of such Symphony Allegro Equity Securities being subject to the prior written consent
of Alexza as set forth in Sections 5(c) and 7(b) hereof, as applicable), Symphony
Allegro hereby covenants and agrees that it shall cause such Symphony Allegro Equity Securities to
be subject to the Purchase Option without the payment of, or any obligation to pay, any additional
consideration in respect of such Symphony Allegro Equity Securities by Alexza, Symphony Allegro or
any Symphony Allegro Subsidiary to the Person(s) acquiring such subsequently issued Symphony
Allegro Equity Securities, the Parties acknowledging and agreeing that the sole consideration
payable by Alexza pursuant to this Agreement for all of the outstanding Symphony Allegro Equity
Securities now or hereinafter owned by any Person shall be the Purchase Price (as defined in
Section 2(b) hereof).

               (c) Alexza’s right to exercise the Purchase Option granted hereby is subject to the following
conditions:

                    (i) The Purchase Option may only be exercised for the purchase of all, and not less than all,
of the Symphony Allegro Equity Securities;

                    (ii) The Purchase Option may only be exercised a single time; and

                    (iii) The Purchase Option may be exercised only during the period (the “Purchase Option
Period”) commencing on and including December 1, 2007 (the “Purchase Option Commencement
Date”) and ending on and including December 1, 2010 (the “Final Termination Date”).

 

			
	[ * ] =	 	 Certain confidential information contained in this document, marked by
brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.

2

 

          Section 2. Exercise of Purchase Option.

               (a) Exercise Notice. Alexza may exercise the Purchase Option only by delivery of a
notice in the form attached hereto as Exhibit 1 (the “Purchase Option Exercise
Notice”) during the Purchase Option Period. The Purchase Option Exercise Notice shall be
delivered on a Business Day to Holdings and Symphony Allegro and shall be irrevocable once
delivered. The date on which the Purchase Option Exercise Notice is first delivered to Holdings
and Symphony Allegro is referred to as the “Purchase Option Exercise Date.” The Purchase
Option Exercise Notice shall contain an estimated date for the settlement of the Purchase Option
(the “Purchase Option Closing”), which date shall be estimated in accordance with this
Section 2(a). Such notice and election shall be irrevocable once delivered. All cash and cash
equivalents on Symphony Allegro’s balance sheet on the date of the Purchase Option Closing (the
“Purchase Option Closing Date”) are to remain with Symphony Allegro. The Purchase Option
Closing Date shall be the date that is the later of:

                    (i) [ * ] following the date that Alexza receives the necessary Government Approvals related
to its HSR Filings (if any) related to the exercise of the Purchase Option; provided,
however, that Alexza and Holdings shall make all necessary HSR Filings within [ * ]
following the Purchase Option Exercise Date and shall promptly and diligently pursue the related
regulatory process; and

                    (ii) [ * ] following the date that Alexza receives the necessary stockholder approvals for
purposes of NASDAQ Marketplace Rule 5635 in connection with the issuance of the Alexza Closing
Shares (as defined below) and the Alexza Closing Warrant Shares (the “Stockholder
Approval”).

               (b) Purchase Price.

                    (i) As consideration for the sale to Alexza by Holdings of its Symphony Allegro Equity
Securities (and for the Symphony Allegro Equity Securities of any other Person), on the Purchase
Option Closing Date, Alexza shall issue to Holdings an aggregate of (A) ten million (10,000,000)
shares of Alexza Common Stock (the “Alexza Closing Shares”) and (B) the Alexza Closing
Warrants. If, after the date hereof and prior to the Purchase Option Closing, the number of
outstanding shares of Alexza Common Stock has been increased, decreased, changed into or exchanged
for a different number or kind of shares or securities as a result of a reorganization,
recapitalization, stock dividend, stock split, reverse stock split or other similar change in
capitalization, an appropriate and proportionate adjustment shall be made to the number of Alexza
Closing Shares to be issued on the Purchase Option Closing.

                    (ii) As further consideration for the sale to Alexza by Holdings of its Symphony Allegro
Equity Securities (and for the Symphony Allegro Equity Securities of any other Person), if Alexza
enters into any agreement or arrangement with any third party with respect to the development
and/or

 

			
	[ * ] =	 	 Certain confidential information contained in this document, marked by
brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.

3

 

commercialization of an AZ-004 Product or an AZ-002 Product (a “Symphony Allegro Product
Agreement”), Alexza shall be obligated to make the following payments to Holdings within [ * ]
of Alexza’s receipt of any Tier 1 Payment, Tier 2 Payment or Tier 3 Payment (each as defined
below):

                    (A) with respect to any upfront, milestone, royalty, profit sharing, or similar
payment received by Alexza under such Symphony Allegro Product Agreement that, when
combined with any other such payments previously received by Alexza under any Symphony
Allegro Product Agreement, is in excess of $[ * ] in the aggregate but less than or equal
to $[ * ] in the aggregate (a “Tier 1 Payment”), an amount equal to [ * ]% of such
Tier 1 Payment;

                    (B) with respect to any upfront, milestone, royalty, profit sharing, or similar
payment received by Alexza under such Symphony Allegro Product Agreement that, when
combined with any other such payments previously received by Alexza under any Symphony
Allegro Product Agreement, is in excess of $[ * ] in the aggregate but less than or equal
to $[ * ] in the aggregate (a “Tier 2 Payment”), an amount equal to [ * ]% of such
Tier 2 Payment; and

                    (C) with respect to any upfront, milestone, royalty, profit sharing, or similar
payment received by Alexza under such Symphony Allegro Product Agreement that, when
combined with any other such payments previously received by Alexza under any Symphony
Allegro Product Agreement, is in excess of $[ * ] in the aggregate (a “Tier 3
Payment”), an amount equal to [ * ]% of such Tier 3 Payment.

For the avoidance of doubt, payments from a third party to Alexza for reimbursement of
employee costs, out-of-pocket expenses, costs of clinical trial materials, toxicology
studies and clinical trials shall not be considered a Tier 1 Payment, Tier 2 Payment or
Tier 3 Payment for purposes of this Agreement.

                    (iii) The Alexza Closing Shares, the Alexza Closing Warrants and the payments to be made to
Holdings set forth in Section 2(b)(ii) shall constitute the “Purchase Price”.

               (c) [Reserved.]

               (d) Surrender of Symphony Allegro Equity Securities; Symphony Allegro Board. Subject
to the terms and conditions of this Agreement, on the Purchase Option Closing Date, Holdings shall
surrender to Alexza its certificates representing its Symphony Allegro Equity Securities, and shall
convey good title to such Symphony Allegro Equity Securities, free from any Encumbrances and from
any and all restrictions that any sale, assignment or other transfer of such Symphony Allegro
Equity Securities be consented to or approved by any Person. On or prior to the Purchase

 

			
	[ * ] =	 	 Certain confidential information contained in this document, marked by
brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.

4

 

Option Closing Date, Holdings shall remove all directors serving on the Symphony Allegro
Board, other than the Alexza Director (as defined in Section 4(b)(iv) hereof), as of the
Purchase Option Closing Date. Furthermore, Holdings shall use commercially reasonable efforts to
deliver to Alexza, promptly after the Purchase Option Closing Date, any certificates representing
Symphony Allegro Equity Securities which were not surrendered to Alexza on the Purchase Option
Closing Date.

               (e) Corporate Governance Letter Agreement. Subject to the terms and conditions of
this Agreement, on the Purchase Option Closing Date, Holdings and Alexza shall enter into a letter
agreement substantially in the form attached hereto as Exhibit 3 (the “Corporate
Governance Letter Agreement”).

               (f) Government Approvals. On or prior to the Purchase Option Closing Date, each of
Alexza, Symphony Allegro and Holdings shall have taken all necessary action to cause all
Governmental Approvals with respect to such Party (including, without limitation, the preparing and
filing of any pre-merger notification and report forms required under the HSR Filings required to
be in effect in connection with the transactions contemplated by this Agreement to be in effect;
provided, however, that with respect to Government Approvals required by a
Governmental Authority other than the United States federal government and its various branches and
agencies, the Parties’ obligations under this Section 2(f) shall be limited to causing to
be in effect only those Government Approvals, the failure of which to be in effect would, either
individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on any
of the Parties. Each of Symphony Allegro and Alexza shall pay its own costs associated with taking
such action. Symphony Allegro shall pay any costs of Holdings associated with obtaining Government
Approvals required in connection with the exercise of the Purchase Option. All other costs and
expenses of Holdings shall be paid by Holdings pursuant to Section 8 hereof, including any
costs arising from any error in Holdings’ initial valuation of its investment in Symphony Allegro.

               (g) Transfer of Title. Transfer of title to Alexza of all of the Symphony Allegro
Equity Securities shall be deemed to occur automatically on the Purchase Option Closing Date,
subject to the issuance by Alexza on such date of the portion of the Purchase Price comprised of
the Alexza Closing Shares and the Alexza Closing Warrants and its performance of its other
obligations herein required to be performed under Sections 2(e) and (f), and under
the Registration Rights Agreement, as applicable, on or prior to the Purchase Option Closing Date
to the reasonable satisfaction of Holdings, and thereafter Symphony Allegro shall treat Alexza as
the sole holder of all Symphony Allegro Equity Securities, notwithstanding the failure of Holdings
to tender certificates representing such shares to Alexza in accordance with Section 2(d)
hereof. After the Purchase Option Closing Date, Holdings shall have no rights in connection with
such Symphony Allegro Equity Securities other than the right to receive the Purchase Price;
provided, however, that nothing in this Section 2(g) shall affect the
survivability of any indemnification provision in this Agreement upon termination of this
Agreement.

 

			
	[ * ] =	 	 Certain confidential information contained in this document, marked by
brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.

5

 

               (h) Consents and Authorizations. On or prior to the Purchase Option Closing Date,
Alexza shall have obtained all consents and authorizations necessary from stockholders and/or its
board of directors for the consummation of the exercise and closing of the Purchase Option, as may
be required under the organizational documents of Alexza, any prior stockholders or board
resolution, any stock exchange or similar rules or any applicable law (including, without
limitation, the Stockholder Approval); provided, however, that with respect to
consents or authorizations required by a Governmental Authority other than the United States
federal government and its various branches and agencies, the Parties’ obligations under this
Section 2(h) shall be limited to obtaining only those consents and authorizations, the
failure of which to be obtained would, either individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on any of the Parties.

          Section 3. Alexza Representations, Warranties and Covenants.

               (a) As of the date hereof, Alexza hereby represents and warrants, and, except to the extent
that any of the following representations and warranties are limited to the date of this Agreement
or otherwise limited, on the Purchase Option Closing Date, shall be deemed to have represented and
warranted, to Holdings and Symphony Allegro that:

                    (i) Organization. Alexza is a corporation, duly organized, validly existing and in
good standing under the laws of the State of Delaware.

                    (ii) Authority and Validity. Alexza has all requisite corporate power and authority
to execute, deliver and perform its obligations under this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance by Alexza of this
Agreement and the consummation of the transactions contemplated hereby have been duly and validly
authorized by all necessary action required on the part of Alexza, and, other than the Stockholder
Approval, no other proceedings on the part of Alexza are necessary to authorize this Agreement or
for Alexza to perform its obligations under this Agreement. This Agreement constitutes the lawful,
valid and legally binding obligation of Alexza, enforceable in accordance with its terms, except as
the same may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting the enforcement of creditors’ rights generally and general equitable principles
regardless of whether such enforceability is considered in a proceeding at law or in equity.

                    (iii) No Violation or Conflict. The execution, delivery and performance of this
Agreement and the transactions contemplated hereby do not (A) violate, conflict with or result in
the breach of any provision of the Organizational Documents of Alexza, (B) conflict with or violate
any law or Governmental Order applicable to Alexza or any of its assets, properties or businesses,
or (C) conflict with, result in any breach of, constitute a default (or event that with the giving
of notice or lapse of time, or both, would become a default) under, require any consent under, or
give

 

			
	[ * ] =	 	 Certain confidential information contained in this document, marked by
brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.

6

 

to others any rights of termination, amendment, acceleration, suspension, revocation or
cancellation of, or result in the creation of any Encumbrance on any of the assets or properties of
Alexza, pursuant to, any note, bond, mortgage or indenture, contract, agreement, lease, sublease,
license, permit, franchise or other instrument or arrangement to which Alexza is a party except, in
the case of clauses (B) and (C), to the extent that such conflicts, breaches,
defaults or other matters would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect on Alexza.

                    (iv) Governmental Consents and Approvals. Other than any HSR Filings which, if such
HSR Filings are required pursuant to Section 2(a) hereof, will be obtained on or prior to
the Purchase Option Closing Date, the execution, delivery and performance of this Agreement by
Alexza do not, and the consummation of the transactions contemplated hereby do not and will not,
require any Governmental Approval which has not already been obtained, effected or provided, except
with respect to which the failure to so obtain, effect or provide would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on Alexza.

                    (v) Litigation. As of (A) the date of this Agreement, except as disclosed in any
Alexza Public Filings available as of the date hereof, and (B) the Purchase Option Closing Date,
there are no actions by or against Alexza pending before any Governmental Authority or, to the
knowledge of Alexza, threatened to be brought by or before any Governmental Authority, that would,
individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on
Alexza. There are no pending or, to the knowledge of Alexza, threatened actions, to which Alexza
is a party (or is threatened to be named as a party) to set aside, restrain, enjoin or prevent the
execution, delivery or performance of this Agreement or the Operative Documents or the consummation
of the transactions contemplated hereby or thereby by any party hereto or thereto. Alexza is not
subject to any Governmental Order (nor, to the knowledge of Alexza, is there any such Governmental
Order threatened to be imposed by any Governmental Authority) that would, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on Alexza.

               (b) Alexza hereby covenants and agrees with Holdings as follows:

                    (i) Immediately prior to the Purchase Option Closing, Alexza shall have sufficient authorized
but unissued, freely transferable and nonassessable Alexza Common Stock available to satisfy the
Alexza Closing Shares and Alexza Closing Warrant Shares. Alexza shall deliver to Holdings on or
before the Purchase Option Closing Date, a legal opinion from Cooley Godward Kronish LLP, counsel
to Alexza, or such other counsel as Alexza and Holdings shall mutually agree, which opinion shall
be substantially in the form attached hereto as Exhibit 2.

                    (ii) Alexza, on the Purchase Option Closing Date, shall convey good and marketable title to
the Alexza Closing Shares, free from any

 

			
	[ * ] =	 	 Certain confidential information contained in this document, marked by
brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.

7

 

Encumbrances and any and all other restrictions that any issuance, sale, assignment or other
transfer of such Alexza Closing Shares be consented to or approved by any Person.

                    (iii) Upon the termination of this Agreement pursuant to Section 9 hereof, or as soon
thereafter as is practical, Alexza shall (A) in accordance with and pursuant to
Sections 2.7 and 2.8 of the Novated and Restated Technology License Agreement,
deliver to Symphony Allegro all Regulatory Files and Tangible Materials, and (B) in accordance with
and pursuant to Section 2.11 of the Novated and Restated Technology License Agreement,
provide and supply, or cause to be provided and supplied, finished dosage form of Products.

                    (iv) Alexza shall maintain the separate corporate existence of Symphony Allegro for a minimum
of one (1) year following the Purchase Option Closing Date, unless such maintenance would have a
Material Adverse Effect on Alexza or any of its Affiliates.

                    (v) Alexza agrees to use its commercially reasonable efforts to obtain the Stockholder
Approval. In connection with the foregoing, Alexza shall call and hold a meeting of its
stockholders to seek Stockholder Approval prior to October 1, 2009, and file with the SEC a proxy
statement and shall use its commercially reasonable efforts to solicit proxies in favor of the
Stockholder Approval, and shall use its commercially reasonable efforts to respond to any comments
of the SEC or its staff and to cause a definitive proxy statement related to such stockholders’
meeting to be mailed to Alexza’s stockholders. The Alexza Board shall unanimously recommend
Stockholder Approval and such unanimous recommendation shall be included in each proxy statement
filed with the SEC and disseminated to the Alexza stockholders in connection with such stockholder
meeting (such recommendations, the “Alexza Board Recommendation”). Alexza shall notify
Holdings promptly of the receipt of any comments from the SEC or its staff and of any request by
the SEC or its staff for amendments or supplements to such proxy statement or for additional
information and will supply Holdings with copies of all correspondence between Alexza or any of its
representatives, on the one hand, and the SEC or its staff, on the other hand, with respect to such
proxy statement. If at any time prior to such stockholders’ meeting there shall occur any event
that is required to be set forth in an amendment or supplement to the proxy statement, Alexza shall
as promptly as practicable prepare and mail to its stockholders such an amendment or supplement.
Each of Holdings and Alexza agrees promptly to correct any information provided by it or on its
behalf for use in the proxy statement if and to the extent that such information shall have become
false or misleading in any material respect, and Alexza shall as promptly as practicable prepare
and mail to its stockholders an amendment or supplement to correct such information to the extent
required by applicable laws and regulations. Alexza shall provide Holdings with drafts of each such
proxy statement, or amendment or supplement thereto, and consult with Holdings regarding the same,
in each case, prior to filing or mailing the same. Without limiting the generality of the
foregoing, Alexza’s obligations pursuant to the first two sentences of this Section 3(b)(v)
shall not be affected by the withdrawal or modification by the Alexza Board or any committee
thereof of the Alexza

 

			
	[ * ] =	 	 Certain confidential information contained in this document, marked by
brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.

8

 

Board Recommendation. In the event that Stockholder Approval is not obtained at the first
meeting of stockholders at which Stockholder Approval is sought, at the written request of
Holdings, the Company shall call and convene a subsequent meeting of stockholders for the purpose
of obtaining Stockholder Approval (and the Alexza Board will unanimously recommend Stockholder
Approval), which meeting may not be unreasonably delayed by Alexza, and all covenants between the
parties set forth in this Section 3(b)(v) shall apply equally with respect to any
subsequent meeting of stockholders. Unless otherwise required by applicable law, Alexza shall not
call or convene a meeting of its stockholders prior to the meeting of stockholders at which
Stockholder Approval is sought.

                    (vi) Prior to the Purchase Option Closing Date, the Alexza Board shall have adopted
resolutions, reasonably satisfactory to Holdings, approving the issuance of the Alexza Closing
Shares, the Alexza Closing Warrants and the Alexza Closing Warrant Shares to Holdings for purposes
of Section 203(a)(1) of the Delaware General Corporation Law (the “DGCL”), such that the
restrictions on “business combinations” set forth in Section 203 of the DGCL shall not apply to
Alexza and Holdings as a result of such issuances.

          Section 4. Holdings Representations, Warranties and Covenants.

               (a) As of the date hereof, Holdings hereby represents and warrants, and, except to the extent
that any of the following representations and warranties are limited to the date of this Agreement
or otherwise limited, on the Purchase Option Closing Date, shall be deemed to have represented and
warranted, to Alexza and Symphony Allegro that:

                    (i) Organization. Holdings is a limited liability company, duly formed, validly
existing and in good standing under the laws of the State of Delaware.

                    (ii) Authority and Validity. Holdings has all requisite limited liability company
power and authority to execute, deliver and perform its obligations under this Agreement and to
consummate the transactions contemplated hereby. The execution, delivery and performance by
Holdings of this Agreement and the consummation of the transactions contemplated hereby have been
duly and validly authorized by all necessary action required on the part of Holdings, and no other
proceedings on the part of Holdings are necessary to authorize this Agreement or for Holdings to
perform its obligations under this Agreement. This Agreement constitutes the lawful, valid and
legally binding obligation of Holdings, enforceable in accordance with its terms, except as the
same may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting the enforcement of creditors’ rights generally and general equitable principles
regardless of whether such enforceability is considered in a proceeding at law or in equity.

 

			
	[ * ] =	 	 Certain confidential information contained in this document, marked by
brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.

9

 

                    (iii) No Violation or Conflict. The execution, delivery and performance of this
Agreement and the transactions contemplated hereby do not (A) violate, conflict with or result in
the breach of any provision of the Organizational Documents of Holdings, (B) as of the date of this
Agreement, conflict with or violate any law or Governmental Order applicable to Holdings or any of
its assets, properties or businesses, or (C) as of the date of this Agreement, conflict with,
result in any breach of, constitute a default (or event that with the giving of notice or lapse of
time, or both, would become a default) under, require any consent under, or give to others any
rights of termination, amendment, acceleration, suspension, revocation or cancellation of, or
result in the creation of any Encumbrance on any of the assets or properties of Holdings, pursuant
to, any note, bond, mortgage or indenture, contract, agreement, lease, sublease, license, permit,
franchise or other instrument or arrangement to which Holdings is a party except, in the case of
clauses (B) and (C), to the extent that such conflicts, breaches, defaults or other
matters would not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on Holdings.

                    (iv) Governmental Consents and Approvals. The execution, delivery and performance of
this Agreement by Holdings do not, and the consummation of the transactions contemplated hereby do
not and will not, require any Governmental Approval which has not already been obtained, effected
or provided, except with respect to which the failure to so obtain, effect or provide would not,
individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on
Holdings.

                    (v) Litigation. As of the date of this Agreement, there are no actions by or against
Holdings pending before any Governmental Authority or, to the knowledge of Holdings, threatened to
be brought by or before any Governmental Authority, that would, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on Holdings. There are no pending or, to
the knowledge of Holdings, threatened actions to which Holdings is a party (or is threatened to be
named as a party) to set aside, restrain, enjoin or prevent the execution, delivery or performance
of this Agreement or the Operative Documents or the consummation of the transactions contemplated
hereby or thereby by any party hereto or thereto. As of the date of this Agreement, Holdings is
not subject to any Governmental Order (nor, to the knowledge of Holdings, is there any such
Governmental Order threatened to be imposed by any Governmental Authority) that would, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect on Holdings.

                    (vi) Stock Ownership. All of Symphony Allegro’s issued and outstanding Symphony
Allegro Equity Securities are owned beneficially and of record by Holdings, free and clear of any
and all encumbrances.

                    (vii) Interim Operations. Holdings was formed solely for the purpose of engaging in
the transactions contemplated by the Operative Documents,

 

			
	[ * ] =	 	 Certain confidential information contained in this document, marked by
brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.

10

 

has engaged in no other business activities and has conducted its operations only as
contemplated by the Operative Documents.

                    (viii) Accredited Investor.

                    (A) Holdings is and will remain at all relevant times an Accredited Investor.

                    (B) Holdings has relied completely on the advice of, or has consulted with or has had
the opportunity to consult with, its own personal tax, investment, legal or other advisors
and has not relied on Alexza or any of its Affiliates for advice related to any offer and
sale of the Alexza Closing Shares connection with the Purchase Option. Holdings has
reviewed the Investment Overview and is aware of the risks disclosed therein. Holdings
acknowledges that it has had a reasonable opportunity to conduct its own due diligence with
respect to the Products, the Programs, Symphony Allegro, Alexza and the transactions
contemplated by the Operative Documents.

                    (C) Holdings has been advised and understands that the offer and sale of the Alexza
Closing Shares has not been registered under the Securities Act. Holdings is able to bear
the economic risk of such investment for an indefinite period and to afford a complete loss
thereof.

                    (D) Holdings is acquiring the Alexza Closing Shares solely for Holdings’ own account
for investment purposes as a principal and not with a view to the resale of all or any part
thereof. Holdings agrees that the Alexza Closing Shares may not be resold (x) without
registration thereof under the Securities Act (unless an exemption from such registration
is available), or (y) in violation of any law. Holdings is not and will not be an
underwriter within the meaning of Section 2(11) of the Securities Act with respect to the
Alexza Closing Shares.

                    (E) No person or entity acting on behalf of, or under the authority of, Holdings is or
will be entitled to any broker’s, finder’s, or similar fees or commission payable by Alexza
or any of its Affiliates.

                    (F) Holdings acknowledges that all certificates evidencing the Alexza Closing Shares
may bear the following legend:

     “THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES LAWS OF ANY STATE, AND THE SAME
HAVE BEEN ISSUED IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF SAID ACT
AND SUCH LAWS. SUCH SHARES MAY NOT BE SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR
OTHERWISE DISPOSED OF EXCEPT AS

 

			
	[ * ] =	 	 Certain confidential information contained in this document, marked by
brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.

11

 

PERMITTED UNDER SUCH SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM”.

               (b) Holdings hereby covenants and agrees with Alexza as follows:

                    (i) [Reserved.]

                    (ii) Encumbrance. Holdings will not, and will not permit any of its Subsidiaries to,
create, assume or suffer to exist any Encumbrance on any of its Symphony Allegro Equity Securities
except with the prior written consent of Alexza.

                    (iii) Transfer and Amendment. Commencing upon the date hereof and ending upon the
earlier to occur of (x) the Purchase Option Closing Date, (y) the unexercised expiration of the
Purchase Option Period, and (z) the termination of this Agreement pursuant to Section 9(b)(i)
or (ii) (such period, the “Term”), the manager of Holdings shall not (A) transfer, or
permit the transfer of, any Membership Interest without the prior written consent of Alexza or
(B) amend, or permit the amendment of, any provisions relating to the transfer of Membership
Interests, as set forth in Section 7.02 of the Holdings LLC Agreement, to the extent such
amendment would adversely affect Alexza’s right of consent set forth in Sections 7.02(b)(i)
and 7.02(c) of the Holdings LLC Agreement.

                    (iv) Symphony Allegro Directors. During the Term, Holdings agrees to vote all of its
Symphony Allegro Equity Securities (or to exercise its right with respect to such Symphony Allegro
Equity Securities to consent to action in writing without a meeting) in favor of, as applicable,
the election, removal and replacement of one director of the Symphony Allegro Board, and any
successor thereto, designated by Alexza (the “Alexza Director”) as directed by Alexza. In
furtherance and not in limitation of the foregoing, Holdings hereby grants to Alexza an irrevocable
proxy, with respect to all Symphony Allegro Equity Securities now owned or hereafter acquired by
Holdings, to vote such Symphony Allegro Equity Securities or to exercise the right to consent to
action in writing without a meeting with respect to such Symphony Allegro Equity Securities, such
irrevocable proxy to be exercised solely for the limited purpose of electing, removing and
replacing the Alexza Director in the event of the failure or refusal of Holdings to elect, remove
or replace such Alexza Director, as directed by Alexza. Additionally, Holdings agrees, during the
Term, to elect two (2) independent directors (of the four (4) directors of Symphony Allegro not
chosen by Holdings at the direction of Alexza), and any successors thereto, as shall be selected by
mutual agreement of Alexza and Holdings.

                    (v) Symphony Allegro Board. During the Term, Holdings shall not vote any of its
Symphony Allegro Equity Securities (or exercise its rights with respect to such Symphony Allegro
Equity Securities by written consent

 

			
	[ * ] =	 	 Certain confidential information contained in this document, marked by
brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.

12

 

without a meeting) to increase the size of the Symphony Allegro Board to more than five (5)
members without the prior written consent of Alexza.

                    (vi) Symphony Allegro Charter. During the Term, Holdings shall not approve or permit
any amendment to Article IV, Paragraphs (1) and (3); Article VI;
Article VII; Article X; Article XI or Article XIII of the Symphony
Allegro Charter without the prior written consent of Alexza.

          Section 5. Symphony Allegro Representations, Warranties and Covenants.

               (a) As of the date hereof, Symphony Allegro hereby represents and warrants, and, except to the
extent that any of the following representations and warranties are limited to the date of this
Agreement or otherwise limited, on the Purchase Option Closing Date, shall be deemed to have
represented and warranted, to Alexza and Holdings that:

                    (i) Organization. Symphony Allegro is a corporation, duly organized, validly existing
and in good standing under the laws of the State of Delaware.

                    (ii) Authority and Validity. Symphony Allegro has all requisite corporate power and
authority to execute, deliver and perform its obligations under this Agreement and to consummate
the transactions contemplated hereby. The execution, delivery and performance by Symphony Allegro
of this Agreement and the consummation of the transactions contemplated hereby have been duly and
validly authorized by all necessary action required on the part of Symphony Allegro, and no other
proceedings on the part of Symphony Allegro are necessary to authorize this Agreement or for
Symphony Allegro to perform its obligations under this Agreement. This Agreement constitutes the
lawful, valid and legally binding obligation of Symphony Allegro, enforceable in accordance with
its terms, except as the same may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditors’ rights generally and general
equitable principles regardless of whether such enforceability is considered in a proceeding at law
or in equity.

                    (iii) No Violation or Conflict. The execution, delivery and performance of this
Agreement and the transactions contemplated hereby do not (A) violate, conflict with or result in
the breach of any provision of the Organizational Documents of Symphony Allegro, (B) conflict with
or violate any law or Governmental Order applicable to Symphony Allegro or any of its assets,
properties or businesses, or (C) conflict with, result in any breach of, constitute a default (or
event that with the giving of notice or lapse of time, or both, would become a default) under,
require any consent under, or give to others any rights of termination, amendment, acceleration,
suspension, revocation or cancellation of, or result in the creation of any Encumbrance on any of
the assets or properties of Symphony Allegro, pursuant to, any note, bond,

 

			
	[ * ] =	 	 Certain confidential information contained in this document, marked by
brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.

13

 

mortgage or indenture, contract, agreement, lease, sublease, license, permit, franchise or
other instrument or arrangement to which Symphony Allegro is a party except, in the case of
clauses (B) and (C), to the extent that such conflicts, breaches, defaults or other
matters would not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on Symphony Allegro.

                    (iv) Governmental Consents and Approvals. The execution, delivery and performance of
this Agreement by Symphony Allegro do not, and the consummation of the transactions contemplated
hereby do not and will not, require any Governmental Approval which has not already been obtained,
effected or provided, except with respect to which the failure to so obtain, effect or provide
would not, individually or in the aggregate, reasonably be expected to have a Material Adverse
Effect on Symphony Allegro.

                    (v) Litigation. There are no actions by or against Symphony Allegro pending before
any Governmental Authority or, to the knowledge of Symphony Allegro, threatened to be brought by or
before any Governmental Authority that would, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on Symphony Allegro. There are no pending or, to the
knowledge of Symphony Allegro, threatened actions to which Symphony Allegro is a party (or is
threatened to be named as a party) to set aside, restrain, enjoin or prevent the execution,
delivery or performance of this Agreement or the Operative Documents or the consummation of the
transactions contemplated hereby or thereby by any party hereto or thereto. Symphony Allegro is
not subject to any Governmental Order (nor, to the knowledge of Symphony Allegro, is there any such
Governmental Order threatened to be imposed by any Governmental Authority) that would, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect on Symphony Allegro.

                    (vi) Capitalization. Holdings is the beneficial and record owner of all issued and
outstanding Symphony Allegro Equity Securities. No shares of Symphony Allegro capital stock are
held in treasury by Symphony Allegro or any Symphony Allegro Subsidiary. All of the issued and
outstanding Symphony Allegro Equity Securities (A) have been duly authorized and validly issued and
are fully paid and nonassessable, (B) were issued in compliance with all applicable state and
federal securities laws, and (C) were not issued in violation of any preemptive rights or rights of
first refusal. No preemptive rights or rights of first refusal exist with respect to any Symphony
Allegro Equity Securities and no such rights will arise by virtue of or in connection with the
transactions contemplated hereby (other than for the Purchase Option). Other than the Purchase
Option, there are no outstanding options, warrants, call rights, commitments or agreements of any
character to acquire any Symphony Allegro Equity Securities. There are no outstanding stock
appreciation, phantom stock, profit participation or other similar rights with respect to Symphony
Allegro. Symphony Allegro is not obligated to redeem or otherwise acquire any of its outstanding
Symphony Allegro Equity Securities.

 

			
	[ * ] =	 	 Certain confidential information contained in this document, marked by
brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.

14

 

                    (vii) Interim Operations. Symphony Allegro was formed solely for the purpose of
engaging in the transactions contemplated by the Operative Documents, has engaged in no other
business activities and has conducted its operations only as contemplated by the Operative
Documents.

                    (viii) Investment Company. Symphony Allegro is not, and after giving effect to the
transactions contemplated by the Operative Documents will not be, required to register as an
“investment company” as such term is defined in the Investment Company Act of 1940, as
amended.

               (b) Symphony Allegro covenants and agrees that:

                    (i) Symphony Allegro will comply with all laws, ordinances or governmental rules or
regulations to which it is subject and will obtain and maintain in effect all licenses,
certificates, permits, franchises and other Governmental Approvals necessary to the ownership of
its properties or to the conduct of its business, in each case to the extent necessary to ensure
that non-compliance with such laws, ordinances or governmental rules or regulations or failures to
obtain or maintain in effect such licenses, certificates, permits, franchises and other
Governmental Approvals would not, individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect on Symphony Allegro.

                    (ii) Symphony Allegro will file (or cause to be filed) all material tax returns required to be
filed by it and pay all taxes shown to be due and payable on such returns and all other taxes
imposed on it or its assets to the extent such taxes have become due and payable and before they
have become delinquent and shall pay all claims for which sums have become due and payable that
have or might become attached to the assets of Symphony Allegro; provided, that Symphony
Allegro need not file any such tax returns or pay any such tax or claims if (A) the amount,
applicability or validity thereof is contested by Symphony Allegro on a timely basis in good faith
and in appropriate proceedings, and Symphony Allegro has established adequate reserves therefor in
accordance with GAAP on the books of Symphony Allegro or (B) the failure to file such tax returns
or the nonpayment of such taxes and assessments, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect on Symphony Allegro.

                    (iii) Symphony Allegro will at all times preserve and keep in full force and effect its
corporate existence.

                    (iv) Symphony Allegro will keep complete, proper and separate books of record and account,
including a record of all costs and expenses incurred, all charges made, all credits made and
received, and all income derived in connection with the operation of the business of Symphony
Allegro, all in accordance with GAAP (which GAAP shall be conformed to those used by Alexza to the
extent practicable), in each case to the extent necessary to enable Symphony Allegro to comply

 

			
	[ * ] =	 	 Certain confidential information contained in this document, marked by
brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.

15

 

with the periodic reporting requirements of this Agreement, and will promptly notify Alexza if
it adopts or changes any accounting principle pursuant to a change in GAAP or applicable Law.

                    (v) Symphony Allegro will perform and observe in all material respects all of the terms and
provisions of each Operative Document to be performed or observed by it, maintain each such
Operative Document to which it is a party, promptly enforce in all material respects each such
Operative Document in accordance with its terms, take all such action to such end as may be from
time to time reasonably requested by Holdings or Alexza and make to each other party to each such
Operative Document such demands and requests for information and reports or for action as Symphony
Allegro is entitled to make under such Operative Document.

                    (vi) Symphony Allegro shall permit the representatives of Holdings (including Holdings’
members and their respective representatives), each Symphony Fund and Alexza, at each of their own
expense and upon reasonable prior notice to Symphony Allegro, to visit the principal executive
office of Symphony Allegro, to discuss the affairs, finances and accounts of Symphony Allegro with
Symphony Allegro’s officers and (with the consent of Symphony Allegro, which consent will not be
unreasonably withheld) its Auditors, all at such reasonable times and as often as may be reasonably
requested in writing.

                    (vii) Symphony Allegro shall permit each Symphony Fund, at its own expense and upon reasonable
prior notice to Symphony Allegro, to inspect and copy Symphony Allegro’s books and records and
inspect Symphony Allegro’s properties at reasonable times.

                    (viii) Symphony Allegro shall allow Alexza or its designated representatives to have
reasonable visitation and inspection rights with regard to the Programs and materials, documents
and other information relating thereto.

                    (ix) Symphony Allegro shall permit each Symphony Fund to consult with and advise the
management of Symphony Allegro on matters relating to the research and development of the Programs
in order to develop the Product in accordance with the terms or provisions of the Amended and
Restated Research and Development Agreement.

                    (x) On the Purchase Option Closing Date, or as soon thereafter as is practical, Symphony
Allegro shall deliver to Alexza all materials, documents, files and other information relating to
the Programs (or, where necessary, copies thereof).

                    (xi) During the Term, Alexza shall have the right to consent to any increase in the size of
the Symphony Allegro Board to more than five (5) directors.

 

			
	[ * ] =	 	 Certain confidential information contained in this document, marked by
brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.

16

 

                    (xii) During the Term, Alexza shall have the right to designate, remove and replace one
(1) director of the Symphony Allegro Board, including any successor thereto, as contemplated by
Section 4(b)(iv).

                    (xiii) Symphony Allegro shall indemnify the directors and officers of Symphony Allegro against
liability incurred by reason of the fact that such Person is or was a director or officer of
Symphony Allegro, as permitted by Article VII of the Symphony Allegro Charter and
Section 9.01 of the Symphony Allegro By-laws, as set forth in, and on the terms of, the
Indemnification Agreement and the RRD Services Agreement, respectively.

                    (xiv) During the Term, Symphony Allegro shall comply with, and cause any Persons acting for it
to comply with, the terms of the Investment Policy with respect to the investment of any funds held
by it.

                    (xv) On or prior to the Purchase Option Closing Date, Symphony Allegro shall pay for a
non-cancelable run-off insurance policy, for a period of six (6) years after the Purchase Option
Closing Date to provide insurance coverage for events, acts or omissions occurring on or prior to
the Purchase Option Closing Date for all persons who were directors or officers of Symphony Allegro
on or prior to the Purchase Option Closing Date.

               (c) Symphony Allegro covenants and agrees that, until the expiration of the Term, it shall
not, and shall cause its Subsidiaries (if any) not to, without Alexza’s prior written consent (such
consent, in the case of clause (x) below, not to be unreasonably withheld):

                    (i) issue any Symphony Allegro Equity Securities or any Equity Securities of any Subsidiary
thereof (other than any issuances of Equity Securities by Symphony Allegro made in accordance with
Section 1(b) hereof to Holdings so long as Symphony Allegro is a wholly owned subsidiary of
Holdings, or by a Subsidiary of Symphony Allegro to Symphony Allegro or to another wholly owned
Subsidiary of Symphony Allegro); provided, however, that in any event any such
Symphony Allegro Equity Securities shall be issued subject to the Purchase Option;

                    (ii) redeem, repurchase or otherwise acquire, directly or indirectly, any Symphony Allegro
Equity Securities or the Equity Securities of any Subsidiary of Symphony Allegro;

                    (iii) create, incur, assume or permit to exist (A) any Encumbrance over or on any of its
assets, other than (x) statutory liens or (y) liens created in the ordinary course of Symphony
Allegro’s business securing obligations valued at less than $[ * ] in the aggregate principal
amount at any one time outstanding (unless the Development Committee shall authorize the existence
of ordinary course liens securing obligations valued at greater than $[ * ]), or (B) Debt other
than any Debt incurred pursuant to the Operative Documents and the Development Budget (including

 

			
	[ * ] =	 	 Certain confidential information contained in this document, marked by
brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.

17

 

payables incurred in the ordinary course of business) (“Excepted Debt”);
provided, however, that the aggregate outstanding principal amount of all Excepted
Debt for borrowed money (including the amount of Debt secured by any Encumbrances permitted
pursuant to clause (A)) shall not exceed $[ * ] at any time;

                    (iv) declare or pay dividends or other distributions on any Symphony Allegro Equity Securities
other than any dividend declared from the proceeds of (x) the exercise of a Discontinuation Option,
or (y) a sale or license of a discontinued Program to a third party, in each case in respect of
which Symphony Allegro shall be entitled to pay (subject to the existence of lawfully available
funds) a dividend equal to the net amount (such net amount calculated as the gross proceeds
received less amounts required to be paid in respect of any and all corporate taxes owed by
Symphony Allegro as a result of the receipt of such gross amounts) of such Discontinuation Price or
the amounts received from such third party, as the case may be;

                    (v) enter into any transaction of merger or consolidation, or liquidate, wind up or dissolve
itself, or convey, transfer, license, lease or otherwise dispose of all, or a material portion of,
its properties, assets or business;

                    (vi) other than in respect of the Programs, engage in the development of products for any
other company or engage or participate in the development of products or engage in any other
material line of business;

                    (vii) other than entering into, and performing its obligations under, the Operative Documents
and participating in the Programs, engage in any action that negates or is inconsistent with any
rights of Alexza set forth herein;

                    (viii) (A) other than as contemplated by the RRD Services Agreement and Section 6.2 of
the Amended and Restated Research and Development Agreement, hire, retain or contract for the
services of, any employees until the termination of such agreements, or (B) appoint, dismiss or
change any RRD Investment Personnel;

                    (ix) incur any financial commitments in respect of the development of the Programs other than
those set forth in the Development Plan and the Development Budget, or those approved by the
Development Committee and, if so required by the terms of Paragraph 11 of the Development Committee
Charter, the Symphony Allegro Board in accordance with the Operative Documents;

                    (x) other than any transaction contemplated by the Operative Documents, enter into or engage
in any Conflict Transactions without the prior approval of a majority of the Disinterested
Directors of the Symphony Allegro Board; or

                    (xi) waive, alter, modify, amend or supplement in any manner whatsoever any material terms and
conditions of the RRD Services Agreement, the Subscription Agreement, the Research Cost Sharing and
Extension Agreement, or

 

			
	[ * ] =	 	 Certain confidential information contained in this document, marked by
brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.

18

 

Articles 4 and 6 of the Amended and Restated Research and Development
Agreement, except in compliance with the terms of the Operative Documents.

               (d) Symphony Allegro covenants and agrees to deliver, cause to be delivered, and provide
access thereto, to each other Party, each Symphony Fund, and such Auditors as Alexza may designate,
so long as such Auditors shall (x) be subject to confidentiality requirements at least as stringent
as the Confidentiality Agreement or (y) be an Alexza Accounting Advisor retained pursuant to an
agreement which incorporates confidentiality provisions substantially the same as the ones
incorporated in the agreements in effect between Alexza and such Accounting Advisors as of the date
hereof:

                    (i) upon request, copies of the then current Development Plan for each quarter, on or before
March 31, June 30, September 30, and December 31 of each year;

                    (ii) upon request, copies of the then current Development Budget for each quarter, including a
report setting forth in reasonable detail the projected expenditures by Symphony Allegro pursuant
to the Development Budget, on or before March 31, June 30, September 30, and December 31 of each
year;

                    (iii) prior to the close of each fiscal year, Symphony Allegro shall cause the Manager to seek
to obtain from the Symphony Allegro Auditors schedules of certain financial information to be
provided to Alexza’s Auditors in connection with the Symphony Allegro Auditors’ audit of Symphony
Allegro. Within [ * ] after the close of each fiscal year, Symphony Allegro (or the Manager acting
on its behalf) will provide Alexza’s Auditors with the Client Schedules. If the Symphony Allegro
Auditors deliver the Client Schedules after the end of the fiscal year, Symphony Allegro (or the
Manager acting on its behalf) will provide the completed Client Schedules to Alexza’s Auditors
within [ * ] of such receipt. Following Alexza’s Auditors’ review of the Client Schedules,
Symphony Allegro, or RRD on behalf of Symphony Allegro, will promptly provide Alexza’s Auditors
with any reasonably requested back-up information related to the Client Schedules.

                    (iv) prior to the close of each fiscal year, Alexza’s Chief Financial Officer, the Symphony
Allegro Auditors, Alexza’s Auditors and Symphony Allegro (or the Manager acting on its behalf)
shall agree to a completion schedule that will include (A) the provision by Symphony Allegro to
Alexza of the financial information reasonably necessary for Alexza to consolidate the financial
results of Symphony Allegro and (B) the following financial statements, including the related notes
thereto, audited and certified by the Symphony Allegro Auditors: (1) a balance sheet of Symphony
Allegro as of the close of such fiscal year, (2) a statement of net income for such fiscal year,
and (3) a statement of cash flows for such fiscal year. Such audited annual financial statements
shall set forth in comparative form the figures for the previous fiscal year, all in reasonable
detail, prepared in accordance with GAAP, and

 

			
	[ * ] =	 	 Certain confidential information contained in this document, marked by
brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.

19

 

Symphony Allegro (or the Manager acting on its behalf) shall, to the extent that Symphony
Allegro (or the Manager acting on its behalf), using commercially reasonable means, can procure
such an opinion, be accompanied by an opinion thereon of the Symphony Allegro Auditors to the
effect that such financial statements present fairly, in all material respects, the financial
position of Symphony Allegro and its results of operations and cash flows and have been prepared in
conformity with GAAP, and that the examination of such accountants in connection with such
financial statements has been made in accordance with generally accepted auditing standards, and
that such audit provides a reasonable basis for such opinion in the circumstances;

                    (v) within [ * ] following each calendar month and upon receipt from Alexza of its monthly
invoice to Symphony Allegro, current accrued monthly vendor expenses and prepaid expenses, Symphony
Allegro (or the Manager acting on its behalf) will provide to Alexza: (A) the unaudited balance
sheet of Symphony Allegro for the previous calendar month; (B) the unaudited statement of net
income for such previous calendar month; (C)  the trial balance schedule for such previous calendar
month; and (D) related account reconciliations for such previous calendar month (collectively,
“Unaudited Financial Information”);

                    (vi) within [ * ] following its filing, a copy of each income tax return so filed by Symphony
Allegro with any foreign, federal, state or local taxing authority (including all supporting
schedules thereto);

                    (vii) any other documents, materials or other information pertaining to the Programs or
Symphony Allegro as Alexza may reasonably request, including preliminary financial information;

                    (viii) promptly, and in any event within [ * ] of receipt thereof, copies of any notice to
Symphony Allegro from any federal or state Governmental Authority relating to any order, ruling,
statute or other law or regulation that would reasonably be expected to have a Material Adverse
Effect on Symphony Allegro;

                    (ix) promptly upon receipt thereof, notice of all actions, suits, investigations, litigation
and proceedings before any court or governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, affecting Symphony Allegro;

                    (x) promptly upon receipt thereof, copies of any other notices, requests, reports, financial
statements and other information and documents received by Symphony Allegro under or pursuant to
any other Operative Document, including, without limitation, any notices of breach or termination
of any subcontracts or licenses entered into or permitted pursuant to the Operative Documents; and

                    (xi) with reasonable promptness, such other data and information relating to the business,
operations, affairs, financial condition, assets or

 

			
	[ * ] =	 	 Certain confidential information contained in this document, marked by
brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.

20

 

properties of Symphony Allegro or relating to the ability of Symphony Allegro to perform its
obligations hereunder and under the Operative Documents as from time to time may be reasonably
requested by Alexza and/or Holdings;

provided, that neither Symphony Allegro, nor the Manager acting on behalf of Symphony
Allegro, shall have any liability to Alexza for the failure to deliver financial documents or other
materials hereunder, if such failure was caused by a failure of Alexza to provide, in a timely
manner, data required to prepare such financial documents or other materials to Symphony Alexza in
a timely manner.

               (e) Symphony Allegro will use commercially reasonable efforts, at its own expense (as set
forth in the Management Budget), to cooperate with Alexza in meeting Alexza’s government
compliance, disclosure, and financial reporting obligations, including without limitation under the
Sarbanes-Oxley Act of 2002, as amended, and any rules and regulations promulgated thereunder, and
under FASB Interpretation No. 46 (Revised). Without limiting the foregoing, Symphony Allegro
further covenants, until the completion of all the reporting, accounting and other obligations set
forth therein with respect to the fiscal year in which this Agreement shall terminate, expire and
end, that (w) the principal executive officer and the principal financial officer of Symphony
Allegro, or persons performing similar functions, shall provide certifications to Alexza
corresponding to those required with respect to public companies for which a class of securities is
registered under the Securities Exchange Act (“Public Companies”) under Sections 302 and
906 of the Sarbanes-Oxley Act of 2002, as amended; (x) Symphony Allegro shall maintain a system of
disclosure controls and internal controls (as defined under the Exchange Act) and conduct quarterly
and annual evaluations of the effectiveness of such controls as required under the Exchange Act for
Public Companies; (y) Symphony Allegro shall provide to Alexza an attestation report of its
Auditors with respect to Symphony Allegro management’s assessment of Symphony Allegro’s internal
controls as required under the Exchange Act for Public Companies; and (z) Symphony Allegro will
maintain, or cause to have maintained, such sufficient evidentiary support for management’s
assessment of the effectiveness of Symphony Allegro’s internal controls as required under the
Exchange Act for Public Companies.

 

			
	[ * ] =	 	 Certain confidential information contained in this document, marked by
brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.

21

 

          Section 6. Notice of Material Event. Each Party covenants and agrees that, upon its
acquiring Knowledge of any breach by it of any representation, warranty, covenant or any other term
or condition of this Agreement or acquiring Knowledge of a material event or development that is,
or is reasonably expected to be, adverse to the other Party with respect to any Program or the
transactions contemplated hereby, such Party shall promptly notify the other Party in writing
within three (3) Business Days of acquiring such Knowledge; provided, that the failure to
provide such notice shall not impair or otherwise be deemed a waiver of any rights any Party may
have arising from such breach, material event or development and that notice under this
Section 6 shall not in itself constitute notice of any breach of any of the Operative
Documents, unless explicitly stated in such notice.

          Section 7. Assignment; Transfers; Legend.

               (a) Assignment by Alexza and Symphony Allegro. Neither Alexza nor Symphony Allegro
may assign, delegate, transfer, sell or otherwise dispose of (collectively, “Transfer”), in
whole or in part, any or all of their rights or obligations hereunder to any Person (a
“Transferee”) without the prior written approval of each of the other Parties;
provided, however, that Alexza, without the prior approval of each of the other
Parties, may make such Transfer to any Person which acquires all or substantially all of Alexza’s
assets or business (or assets or business related to the Programs) or which is the surviving or
resulting Person in a merger, consolidation or other reorganization with Alexza. In no event shall
such assignment alter the definition of “Alexza Common Stock” except as a result of the surviving
or resulting “parent” entity in a merger being other than Alexza, in which case any reference to
Alexza Common Stock shall be deemed to instead reference the common stock, if any, of the surviving
or resulting entity.

               (b) Assignment and Transfers by Holdings. Prior to the expiration of the Term,
Holdings may not Transfer, in whole or in part, any or all of its Symphony Allegro Equity
Securities or any or all of its rights or obligations hereunder to any Person (other than Alexza)
without the prior written consent of Alexza. In addition, any Transfer of Symphony Allegro Equity
Securities by Holdings or any other Person to any Person other than Alexza shall be conditioned
upon, and no effect shall be given to any such Transfer unless such transferee shall agree in
writing in form and substance satisfactory to Alexza to be bound by all of the terms and conditions
hereunder, including the Purchase Option, as if such transferee were originally designated as
“Holdings” hereunder.

               (c) Legend. Any certificates evidencing Symphony Allegro Equity Securities shall bear
a legend in substantially the following form:

THE SECURITIES OF SYMPHONY ALLEGRO, INC., EVIDENCED HEREBY ARE
SUBJECT TO AN OPTION, HELD BY ALEXZA, AS DESCRIBED IN AN

 

			
	[ * ] =	 	 Certain confidential information contained in this document, marked by
brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.

22

 

AMENDED AND RESTATED PURCHASE OPTION AGREEMENT (THE “PURCHASE
OPTION AGREEMENT”) DATED AS OF JUNE 15, 2009, BY AND AMONG
ALEXZA PHARMACEUTICALS, INC., AND THE OTHER PARTIES THERETO, TO
PURCHASE SUCH SECURITIES AT A PURCHASE PRICE DETERMINED PURSUANT
TO SECTION 2 OF THE PURCHASE OPTION AGREEMENT, EXERCISABLE
BY WRITTEN NOTICE AT ANY TIME DURING THE PERIOD SET FORTH THEREIN.
COPIES OF THE PURCHASE OPTION AGREEMENT ARE AVAILABLE AT THE
PRINCIPAL PLACE OF BUSINESS OF SYMPHONY ALLEGRO, INC. AT 7361
CALHOUN PLACE, SUITE 325, ROCKVILLE, MARYLAND 20855, AND WILL BE
FURNISHED TO THE HOLDER HEREOF UPON WRITTEN REQUEST WITHOUT COST.

          Section 8. Costs and Expenses; Payments. Except as otherwise specified in
Section 2(f) hereof, each Party shall pay its own costs and expenses incurred in connection
with the negotiation and preparation of this Agreement and related documentation, the exercise of
the Purchase Option and all actions reasonably required to complete the Purchase Option Closing;
provided, however, that Alexza shall pay any filing fees incurred in connection with any HSR
Filings made pursuant to the Purchase Option Closing.

          Section 9. Expiration; Termination of Agreement.

               (a) Termination.

                    (i) This Agreement shall terminate upon the mutual written consent of all of the Parties.

                    (ii) Each of Holdings and Symphony Allegro may terminate this Agreement in the event that
Symphony Allegro terminates the Amended and Restated Research and Development Agreement in
accordance with its terms.

                    (iii) If the Purchase Option Closing shall not have occurred by October 15, 2009, this
Agreement shall terminate and become null and void ab initio and the Original Agreement shall
simultaneously be reinstated in its entirety and supersede this Agreement in its entirety.

 

			
	[ * ] =	 	 Certain confidential information contained in this document, marked by
brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.

23

 

          Section 10. Survival; Indemnification.

               (a) Survival of Representations and Warranties; Expiration of Certain Covenants.

                    (i) The representations and warranties of the Parties contained in this Agreement shall
survive for a period of one year from the making of such representations, except for
representations and warranties contained in Sections 3(a)(i) and (ii), 4(a)(i) and
(ii) and 5(a)(i) and (ii) hereof which shall survive indefinitely. The liability of
the Parties related to their respective representations and warranties hereunder shall not be
reduced by any investigation made at any time by or on behalf of Holdings, Symphony Allegro or
Alexza, as applicable.

                    (ii) For the avoidance of doubt, the covenants and agreements set forth in
Sections 4(b), 5(b)(i), 5(b)(v), 5(b)(vii)-(ix),
5(b)(xi)-(xiv), 5(c), 5(d)(i), 5(d)(ii) and 5(d)(viii)-(xi)
shall, upon the expiration of the Term, expire and end without any further obligation by Symphony
Allegro or Holdings thereunder.

                    (iii) For the avoidance of doubt, the covenants and agreements set forth in
Sections 5(b)(ii)-(iv), 5(b)(vi), 5(b)(x), 5(d)(iii)-(vii) and
5(e) shall, upon the completion of all the reporting, accounting and other obligations set
forth therein with respect to the fiscal year in which this Agreement shall terminate, expire and
end without any further obligation by Symphony Allegro or Holdings thereunder.

               (b) Indemnification. To the greatest extent permitted by applicable law, Alexza shall
indemnify and hold harmless Holdings and Symphony Allegro and Holdings shall indemnify and hold
harmless Alexza, and each of their respective Affiliates, officers, directors, employees, agents,
partners, members, successors, assigns, representatives of, and each Person, if any (including any
officers, directors, employees, agents, partners, members of such Person) who controls Holdings,
Symphony Allegro and Alexza, as applicable, within the meaning of the Securities Act or the
Exchange Act, (each, an “Indemnified Party”), from and against any and all actions, causes
of action, suits, claims, losses, costs, interest, fees, liabilities and damages, and expenses in
connection therewith (irrespective of whether any such Indemnified Party is a party to the action
for which indemnification hereunder is sought), and including reasonable attorneys’ fees and
disbursements (hereinafter, a “Loss”), incurred by any Indemnified Party to the extent
resulting from, arising out of, or relating to: (i) in the case of Alexza being the Indemnifying
Party, (A) any breach of any representation or warranty made by Alexza herein or in Section
5.1 of the Novated and Restated Technology License Agreement, or (B) any breach of any
covenant, agreement or obligation of Alexza contained herein, and (ii) in the case of Holdings
being the Indemnifying Party, (A) any breach of any representation or warranty made by Holdings or
Symphony Allegro herein, or (B) any breach of any covenant, agreement or obligation of Holdings or
Symphony Allegro contained herein. To the extent that the foregoing undertaking by Alexza or
Holdings may be unenforceable for any reason, such Party shall

 

			
	[ * ] =	 	 Certain confidential information contained in this document, marked by
brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.

24

 

make the maximum contribution to the payment and satisfaction of any Loss that is permissible
under applicable law.

               (c) Notice of Claims. Any Indemnified Party that proposes to assert a right to be
indemnified under this Section 10 shall notify Alexza or Holdings, as applicable (the
“Indemnifying Party”), promptly after receipt of notice of commencement of any action, suit
or proceeding against such Indemnified Party (an “Indemnified Proceeding”) in respect of
which a claim is to be made under this Section 10, or the incurrence or realization of any
Loss in respect of which a claim is to be made under this Section 10, of the commencement
of such Indemnified Proceeding or of such incurrence or realization, enclosing a copy of all
relevant documents, including all papers served and claims made, but the omission to so notify the
applicable Indemnifying Party promptly of any such Indemnified Proceeding or incurrence or
realization shall not relieve (x) such Indemnifying Party from any liability that it may have to
such Indemnified Party under this Section 10 or otherwise, except, as to such Indemnifying
Party’s liability under this Section 10, to the extent, but only to the extent, that such
Indemnifying Party shall have been prejudiced by such omission, or (y) any other indemnitor from
liability that it may have to any Indemnified Party under the Operative Documents.

               (d) Defense of Proceedings. In case any Indemnified Proceeding shall be brought
against any Indemnified Party, it shall notify the applicable Indemnifying Party of the
commencement thereof as provided in Section 10(c), and such Indemnifying Party shall be
entitled to participate in, and provided such Indemnified Proceeding involves a claim solely for
money damages and does not seek an injunction or other equitable relief against the Indemnified
Party and is not a criminal or regulatory action, to assume the defense of, such Indemnified
Proceeding with counsel reasonably satisfactory to such Indemnified Party. After notice from such
Indemnifying Party to such Indemnified Party of such Indemnifying Party’s election so to assume the
defense thereof and the failure by such Indemnified Party to object to such counsel within ten (10)
Business Days following its receipt of such notice, such Indemnifying Party shall not be liable to
such Indemnified Party for legal or other expenses related to such Indemnified Proceedings incurred
after such notice of election to assume such defense except as provided below and except for the
reasonable costs of investigating, monitoring or cooperating in such defense subsequently incurred
by such Indemnified Party reasonably necessary in connection with the defense thereof. Such
Indemnified Party shall have the right to employ its counsel in any such Indemnified Proceeding,
but the fees and expenses of such counsel shall be at the expense of such Indemnified Party unless:

                    (i) the employment of counsel by such Indemnified Party at the expense of the applicable
Indemnifying Party has been authorized in writing by such Indemnifying Party;

                    (ii) such Indemnified Party shall have reasonably concluded in its good faith (which
conclusion shall be determinative unless a court

 

			
	[ * ] =	 	 Certain confidential information contained in this document, marked by
brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.

25

 

determines that such conclusion was not reached reasonably and in good faith) that there is or
may be a conflict of interest between the applicable Indemnifying Party and such Indemnified Party
in the conduct of the defense of such Indemnified Proceeding or that there are or may be one or
more different or additional defenses, claims, counterclaims, or causes of action available to such
Indemnified Party (it being agreed that in any case referred to in this clause (ii) such
Indemnifying Party shall not have the right to direct the defense of such Indemnified Proceeding on
behalf of the Indemnified Party);

                    (iii) the applicable Indemnifying Party shall not have employed counsel reasonably acceptable
to the Indemnified Party, to assume the defense of such Indemnified Proceeding within a reasonable
time after notice of the commencement thereof; provided, however, that (A) this
clause (iii) shall not be deemed to constitute a waiver of any conflict of interest that
may arise with respect to any such counsel, and (B) an Indemnified Party may not invoke this
clause (iii) if such Indemnified Party failed to timely object to such counsel pursuant to
the first paragraph of this Section 10(d) above (it being agreed that in any case referred
to in this clause (iii) such Indemnifying Party shall not have the right to direct the
defense of such Indemnified Proceeding on behalf of the Indemnified Party); or

                    (iv) any counsel employed by the applicable Indemnifying Party shall fail to timely commence
or reasonably conduct the defense of such Indemnified Proceeding and such failure has prejudiced
(or is in immediate danger of prejudicing) the outcome of such Indemnified Proceeding (it being
agreed that in any case referred to in this clause (iv) such Indemnifying Party shall not
have the right to direct the defense of such Indemnified Proceeding on behalf of the Indemnified
Party);

in each of which cases the fees and expenses of counsel for such Indemnified Party shall be at the
expense of such Indemnifying Party. Only one counsel shall be retained by all Indemnified Parties
with respect to any Indemnified Proceeding, unless counsel for any Indemnified Party reasonably
concludes in good faith (which conclusion shall be determinative unless a court determines that
such conclusion was not reached reasonably and in good faith) that there is or may be a conflict of
interest between such Indemnified Party and one or more other Indemnified Parties in the conduct of
the defense of such Indemnified Proceeding or that there are or may be one or more different or
additional defenses, claims, counterclaims, or causes or action available to such Indemnified
Party.

               (e) Settlement. Without the prior written consent of such Indemnified Party, such
Indemnifying Party shall not settle or compromise, or consent to the entry of any judgment in, any
pending or threatened Indemnified Proceeding, unless such settlement, compromise, consent or
related judgment (i) includes an unconditional release of such Indemnified Party from all liability
for Losses arising out of such claim, action, investigation, suit or other legal proceeding,
(ii) provides for the payment of money damages as the sole relief for the claimant (whether at law
or in equity), (iii) involves no admission of fact adverse to the Indemnified Party or finding or
admission of any violation of law or the rights of any Person by the Indemnified Party,

 

			
	[ * ] =	 	 Certain confidential information contained in this document, marked by
brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.

26

 

and (iv) is not in the nature of a criminal or regulatory action. No Indemnified Party shall
settle or compromise, or consent to the entry of any judgment in, any pending or threatened
Indemnified Proceeding (A) in respect of which any payment would result hereunder or under any
other Operative Document, (B) which includes an injunction that will adversely affect any
Indemnifying Party, (C) which involves an admission of fact adverse to the Indemnifying Party or a
finding or admission of any violation of law or the rights of any Person by the Indemnifying Party,
or (D) which is in the nature of a criminal or regulatory action, without the prior written consent
of the Indemnifying Party, such consent not to be unreasonably conditioned, withheld or delayed.

          Section 11. No Petition. Each of Alexza and Holdings covenants and agrees that, prior
to the date which is one year and one day after the expiration of the Purchase Option Period, it
will not institute or join in the institution of any bankruptcy, insolvency, reorganization or
similar proceeding against Symphony Allegro. The provisions of this Section 11 shall
survive the termination of this Agreement.

          Section 12. Third-Party Beneficiary. Each of the Parties agrees that each Symphony
Fund shall be a third-party beneficiary of this Agreement.

          Section 13. Notices. Any notice, request, demand, waiver, consent, approval or other
communication which is required or permitted to be given to any Party shall be in writing addressed
to the Party at its address set forth below and shall be deemed given (i) when delivered to the
Party personally, (ii) if sent to the Party by facsimile transmission (promptly followed by a
hard-copy delivered in accordance with this Section 13), when the transmitting Party
obtains written proof of transmission and receipt; provided, however, that notwithstanding the
foregoing, any communication sent by facsimile transmission after 5:00 PM (receiving Party’s time)
or not on a Business Day shall not be deemed received until the next Business Day, (iii) when
delivered by next Business Day delivery by a nationally recognized courier service, or (iv) if sent
by registered or certified mail, when received, provided postage and registration or certification
fees are prepaid and delivery is confirmed by a return receipt:

          Alexza:

Alexza Pharmaceuticals, Inc.

2091 Stierlin Court

Mountain View, CA 94043

Attn: August J. Moretti

Facsimile: (650) 944-7999

          with a copy to:

Cooley Godward Kronish LLP

380 Interlocken Crescent

 

			
	[ * ] =	 	 Certain confidential information contained in this document, marked by
brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.

27

 

Suite 900

Broomfield, CO 80021

Attn: Brent D. Fassett, Esq.

Facsimile: (720) 566-4099

          Symphony Allegro:

Symphony Allegro, Inc.

7361 Calhoun Place, Suite 325

Rockville, MD 20855

Attn: Frank L. Hurley, Ph.D.

Facsimile: (301) 762-6154

          Holdings:

Symphony Allegro Holdings LLC

7361 Calhoun Place, Suite 325

Rockville, MD 20855

Attn: Robert L. Smith, Jr.

Facsimile: (301) 762-6154

          with copies to:

Symphony Capital Partners, L.P.

875 Third Avenue, 18th Floor

New York, NY 10022

Attn: Mark Kessel

Facsimile: (212) 632-5401

and

Symphony Strategic Partners, LLC

875 Third Avenue, 18th Floor

New York, NY 10022

Attn: Mark Kessel

Facsimile: (212) 632-5401

or to such other address as such Party may from time to time specify by notice given in the manner
provided herein to each other Party entitled to receive notice hereunder.

          Section 14. Governing Law; Consent to Jurisdiction and Service of Process.

               (a) This Agreement shall be governed by, and construed in accordance with, the laws of the
State of New York; except to the extent that this Agreement pertains to the internal governance of
Symphony Allegro or Holdings, and to

 

			
	[ * ] =	 	 Certain confidential information contained in this document, marked by
brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.

28

 

such extent this Agreement shall be governed and construed in accordance with the laws of the
State of Delaware.

               (b) Each of the Parties hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State court and Delaware State court or
federal court of the United States of America sitting in The City of New York, Borough of Manhattan
or Wilmington, Delaware, and any appellate court from any jurisdiction thereof, in any action or
proceeding arising out of or relating to this Agreement, or for recognition or enforcement of any
judgment, and each of the Parties hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in any such New York State
court, any such Delaware State court or, to the fullest extent permitted by law, in such federal
court. Each of the Parties agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law. Nothing in this Agreement shall affect any right that any Party may
otherwise have to bring any action or proceeding relating to this Agreement.

               (c) Each of the Parties irrevocably and unconditionally waives, to the fullest extent it may
legally and effectively do so, any objection that it may now or hereafter have to the laying of
venue of any suit, action or proceeding arising out of or relating to this Agreement in any
New York State or federal court, or any Delaware State or federal court. Each of the Parties
hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court. Each of the parties
hereby consents to service of process by mail.

          Section 15. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ALL
RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT
OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT.

          Section 16. Entire Agreement. This Agreement (including any Annexes, Schedules,
Exhibits or other attachments hereto) constitutes the entire agreement between the Parties with
respect to the matters covered hereby and supersedes all prior and contemporaneous agreements,
correspondence, discussion, and understanding with respect to such matters between the Parties,
excluding the Operative Documents.

          Section 17. Amendment; Successors; Counterparts.

               (a) The terms of this Agreement shall not be altered, modified, amended, waived or
supplemented in any manner whatsoever except by a written instrument signed by each of the Parties.

 

			
	[ * ] =	 	 Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

29

 

               (b) Except as set forth in Section 12, nothing expressed or implied herein is intended
or shall be construed to confer upon or to give to any Person, other than the Parties, any right,
remedy or claim under or by reason of this Agreement or of any term, covenant or condition hereof,
and all the terms, covenants, conditions, promises and agreements contained herein shall be for the
sole and exclusive benefit of the Parties and their successors and permitted assigns.

               (c) This Agreement may be executed in one or more counterparts, each of which, when executed,
shall be deemed an original but all of which, taken together, shall constitute one and the same
Agreement.

          Section 18. Specific Performance. The Parties acknowledge that irreparable damage
would result if this Agreement were not specifically enforced, and they therefore agree that the
rights and obligations of the Parties under this Agreement may be enforced by a decree of specific
performance issued by a court of competent jurisdiction. Such a remedy shall, however, not be
exclusive, and shall be in addition to any other remedies which any Party may have under this
Agreement or otherwise. The Parties further acknowledge and agree that a decree of specific
performance may not be an available remedy in all circumstances.

          Section 19. Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law or public policy, all other
conditions and provisions of this Agreement shall nevertheless remain in full force and effect so
long as the economic or legal substance of the transactions contemplated hereby is not affected in
a manner materially adverse to either party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the parties as closely
as possible in an acceptable manner to the end that the transactions contemplated hereby are
fulfilled to the extent possible.

          Section 20. Tax Reporting. The Parties acknowledge and agree that, for all federal
and state income tax purposes:

               (a) (i) Holdings shall be treated as the owner of all the Equity Securities of Symphony
Allegro prior to the consummation of the Purchase Option; (ii) the Purchase Option shall be treated
as an option to acquire all the Equity Securities of Symphony Allegro; (iii) the Alexza Closing
Warrants shall be treated as option premium payable in respect of the grant and exercise of the
Purchase Option; and (iv) Symphony Allegro shall be treated as the owner of all the Licensed
Intellectual Property and shall be entitled to all deductions claimed under Section 174 of the Code
in respect of the Licensed Intellectual Property to the extent of the amounts funded by Symphony
Allegro (which, for the avoidance of doubt, shall not preclude Alexza from claiming deductions
under Section 174 of the Code to which Alexza is otherwise entitled); and

 

			
	[ * ] =	 	 Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

30

 

               (b) No Party shall take any tax position inconsistent with any position described in
Section 20(a) above, except (i) in the event of a “determination” (as defined in
Section 1313 of the Code) to the contrary, or (ii) in the event either of the Parties receives an
opinion of counsel to the effect that there is no reasonable basis in law for such a position or
that a tax return cannot be prepared based on such a position without being subject to substantial
understatement penalties; provided, however, that in the case of Alexza, such
counsel shall be reasonably satisfactory to Holdings.

          Section 21. Original Agreement.

               (a) The Original Agreement is hereby amended and superseded in its entirety and restated
herein. Such amendment and restatement is effective upon execution of this Agreement by the
Parties. Upon such execution, all provisions of, rights granted and covenants made in the Original
Agreement are hereby superseded in their entirety by the provisions hereof and shall have no
further force or effect; provided, however, that, if the Purchase Option Closing shall not have
occurred by October 15, 2009, this Agreement shall terminate and become null and void ab initio and
the Original Agreement shall simultaneously be reinstated in its entirety and supersede this
Agreement in its entirety.

               (b) Defined terms in the Operative Documents (other than this Agreement and the Warrant
Purchase Agreement) that refer to definitions in this Agreement shall be deemed to refer to the
definitions in the Original Agreement, except where the context requires otherwise.

[SIGNATURES FOLLOW ON NEXT PAGE]

 

			
	[ * ] =	 	 Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

31

 

     IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of the day and year first
above written.

	 	 	 	 	 
	 	ALEXZA PHARMACEUTICALS, INC.

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

	 	 	 	 	 
	 	SYMPHONY ALLEGRO HOLDINGS LLC

By: Symphony Capital Partners, L.P.,

     its Manager

By: Symphony Capital GP, L.P.,

     its General Partner

By: Symphony GP, LLC,

     its General Partner

 	 
	 	By:  	/s/ Mark Kessel
 	 
	 	 	Name:  	Mark Kessel 	 
	 	 	Title:  	Managing Member 	 
	 

	 	 	 	 	 
	 	SYMPHONY ALLEGRO, INC.

 	 
	 	By:  	/s/ Andrew L. Busser
 	 
	 	 	Name:  	Andrew L. Busser 	 
	 	 	Title:  	Chairman of the Board 	 
	 

Signature Page to Amended and Restated Purchase Option Agreement

 

 

ANNEX A

CERTAIN DEFINITIONS

     “$” means United States dollars.

     “Accredited Investor” has the meaning set forth in Rule 501(a) of Regulation D
promulgated under the Securities Act of 1933, as amended.

     “Act” means the Delaware Limited Liability Company Act, 6 Del. C. § 18-101 et seq.

     “Ad Hoc Meeting” has the meaning set forth in Paragraph 6 of Annex B of the Amended
and Restated Research and Development Agreement.

     “Additional Party” has the meaning set forth in Section 14 of the
Confidentiality Agreement.

     “Additional Regulatory Filings” means such Governmental Approvals as required to be
made under any law applicable to the purchase of the Symphony Allegro Equity Securities under the
Purchase Option Agreement.

     “Adjusted Capital Account Deficit” has the meaning set forth in Section 1.01
of the Holdings LLC Agreement.

     “Affected Member” has the meaning set forth in Section 27 of the Investors LLC
Agreement.

     “Affiliate” means, with respect to any Person (i) any Person directly or indirectly
controlling, controlled by or under common control with such Person, (ii) any officer, director,
general partner, member or trustee of such Person, or (iii) any Person who is an officer, director,
general partner, member or trustee of any Person described in clauses (i) or (ii)
of this sentence. For purposes of this definition, the terms “controlling,” “controlled by” or
“under common control with” shall mean the possession, direct or indirect, of the power to direct
or cause the direction of the management and policies of a Person or entity, whether through the
ownership of voting securities, by contract or otherwise, or the power to elect at least 50% of the
directors, managers, general partners, or persons exercising similar authority with respect to such
Person or entities.

     “Alexza” means Alexza Pharmaceuticals, Inc., a Delaware corporation.

     “Alexza Accounting Advisor” means Ernst & Young LLP.

     “Alexza Board” means the board of directors of Alexza.

     “Alexza Closing Shares” has the meaning set forth in Section 2(b) of the Purchase
Option Agreement.

 

			
	[ * ] =	 	 Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

A-1

 

     “Alexza Closing Warrant Shares” has the meaning set forth in Recitals of this
Agreement.

     “Alexza Closing Warrants” has the meaning set forth in the Recitals of this Agreement.

     “Alexza Common Stock” means the common stock, par value $0.0001 per share, of Alexza.

     “Alexza Obligations” has the meaning set forth in Section 6.1(a) of the
Amended and Restated Research and Development Agreement.

     “Alexza Personnel” has the meaning set forth in Section 8.4 of the Amended and
Restated Research and Development Agreement.

     “Alexza Public Filings” means all publicly available filings made by Alexza with the
SEC.

     “Alexza Subcontractor” means a third party that has entered into a Subcontracting
Agreement with Alexza.

     “Allegro Relevant Infringement” means an infringement, misappropriation, illegal use
or misuse of the Licensed Patent Rights or other Licensed Intellectual Property due to the
manufacture, use, sale or importation of a pharmaceutical product or device that delivers
Alprazolam (provided that Alexza has not exercised a Discontinuation Option for the AZ-002 Program)
or Loxapine (provided that Alexza has not exercised a Discontinuation Option for the AZ-004
Program), as applicable.

     “Alprazolam” means: (a) alprazolam and (b) all salts, metabolites, prodrug and other
physical forms thereof.

     “Amended and Restated Research and Development Agreement” means the Amended and
Restated Research and Development Agreement dated as of the Original Closing Date, among Alexza,
Holdings and Symphony Allegro.

     “Asset Value” has the meaning set forth in Section 1.01 of the Holdings LLC
Agreement.

     “Auditors” means an independent certified public accounting firm of recognized
national standing.

     “AZ-002 Product” means a pharmaceutical product in which Alprazolam is the sole active
ingredient and it is delivered using Staccato Technology.

     “AZ-002 Program” means the development, manufacture and/or use of any AZ-002 Product
in accordance with the Development Plan.

 

			
	[ * ] =	 	 Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

A-2

 

     “AZ-004 Product” means a pharmaceutical product in which Loxapine is the sole active
ingredient and it is delivered using Staccato Technology.

     “AZ-004 Program” means the development, manufacture and/or use of any AZ-004 Product
in accordance with the Development Plan.

     “Bankruptcy Code” means the United States Bankruptcy Code.

     “Business Day” means any day other than Saturday, Sunday or any other day on which
commercial banks in the City of New York or the City of San Francisco are authorized or required by
law to remain closed.

     “Capital Contributions” has the meaning set forth in Section 1.01 of the
Holdings LLC Agreement.

     “Capitalized Leases” means all leases that have been or should be, in accordance with
GAAP, recorded as capitalized leases.

     “Cash Available for Distribution” has the meaning set forth in Section 1.01 of
the Holdings LLC Agreement.

     “Chair” has the meaning set forth in Paragraph 4 of Annex B to the Amended and
Restated Research and Development Agreement.

     “Change of Control” means and includes the occurrence of any of the following events,
but specifically excludes (i) acquisitions of capital stock directly from Alexza for cash, whether
in a public or private offering, (ii) sales of capital stock by stockholders of Alexza, and
(iii) acquisitions of capital stock by or from any employee benefit plan or related trust:

     (a) the merger, reorganization or consolidation of Alexza into or with another corporation or
legal entity in which Alexza’s stockholders holding the right to vote with respect to matters
generally immediately preceding such merger, reorganization or consolidation, own less than fifty
percent (50%) of the voting securities of the surviving entity; or

     (b) the sale of all or substantially all of Alexza’s assets or business.

     “Class A Member” means a holder of a Class A Membership Interest.

     “Class A Membership Interest” means a Class A Membership Interest in Holdings.

     “Class B Member” means a holder of a Class B Membership Interest.

     “Class B Membership Interest” means a Class B Membership Interest in Holdings.

 

			
	[ * ] =	 	 Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

A-3

 

     “Class C Member” means a holder of a Class C Membership Interest.

     “Class C Membership Interest” means a Class C Membership Interest in Holdings.

     “Class D Member” means a holder of a Class D Membership Interest.

     “Class D Membership Interest” means a Class D Membership Interest in Holdings.

     “Client Schedules” has the meaning set forth in Section 5(b) of the RRD
Services Agreement.

     “Clinical Budget Component” has the meaning set forth in Section 4.1 of the
Amended and Restated Research and Development Agreement.

     “Clinical Trial Material” means Product and placebo for administration to animals for
pre-clinical testing or to humans for clinical testing.

     “CMC” means the chemistry, manufacturing and controls documentation as required for
filings with a Regulatory Authority relating to the manufacturing, production and testing of drug
products.

     “Code” means the Internal Revenue Code of 1986, as amended from time to time.

     “Committed Capital” means $50,000,000.00.

     “Common Stock” means the common stock, par value $0.01 per share, of Symphony Allegro.

     “Company Expenses” has the meaning set forth in Section 5.09 of the Holdings
LLC Agreement.

     “Company Property” has the meaning set forth in Section 1.01 of the Holdings
LLC Agreement.

     “Confidential Information” has the meaning set forth in Section 2 of the
Confidentiality Agreement.

     “Confidentiality Agreement” means the Confidentiality Agreement, dated as of the
Original Closing Date, among Symphony Allegro, Holdings, Alexza, SCP, SSP, Investors, Symphony
Capital and RRD, as such agreement may be amended or amended and restated from time to time.

     “Conflict Transaction” has the meaning set forth in Article X of the Symphony
Allegro Charter.

 

			
	[ * ] =	 	 Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

A-4

 

     “Control” means, with respect to any material, information or intellectual property
right, that a Party owns or has a license to such item or right, and has the ability to grant the
other Party access, a license or a sublicense (as applicable) in or to such item or right as
provided in the Operative Documents without violating the terms of any agreement or other
arrangement with any third party.

     “Corporate Governance Letter Agreement” has the meaning set forth in Section
2(e) of the Purchase Option Agreement.

     “Cross Program Expenses” are: (i) the Management Fee plus the Development Fee
pursuant to Section 6(a) of the RRD Services Agreement; (ii) actual expenses associated
with RRD carrying out its duties related to creating and maintaining the books of account, records,
financial statements and audit and tax preparation for Symphony Allegro pursuant to Section
5 of the RRD Services Agreement; and (iii) actual expenses for insurance procured for Symphony
Allegro pursuant to Section 1(a)(xi) of the RRD Services Agreement, reasonable legal
expenses incurred on behalf of Symphony Allegro, and travel and miscellaneous out of pocket
expenses of the Symphony Allegro Board, all as and to the extent reimbursable to RRD pursuant to
Section 6(b) of the RRD Services Agreement.

     “Current Products” has the meaning set forth in Section 5.1(g) of the Novated
and Restated Technology License Agreement.

     “Debt” of any Person means, without duplication:

     (a) all indebtedness of such Person for borrowed money,

     (b) all obligations of such Person for the deferred purchase price of property or services
(other than any portion of any trade payable obligation that shall not have remained unpaid for 91
days or more from the later of (A) the original due date of such portion and (B) the customary
payment date in the industry and relevant market for such portion),

     (c) all obligations of such Person evidenced by bonds, notes, debentures or other similar
instruments,

     (d) all obligations of such Person created or arising under any conditional sale or other
title retention agreement with respect to property acquired by such Person (whether or not the
rights and remedies of the seller or lender under such agreement in an event of default are limited
to repossession or sale of such property),

     (e) all Capitalized Leases to which such Person is a party,

     (f) all obligations, contingent or otherwise, of such Person under acceptance, letter of
credit or similar facilities,

     (g) all obligations of such Person to purchase, redeem, retire, defease or

 

			
	[ * ] =	 	  Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

A-5

 

otherwise acquire for value any Equity Securities of such Person,

     (h) the net amount of all financial obligations of such Person in respect of Hedge Agreements,

     (i) the net amount of all other financial obligations of such Person under any contract or
other agreement to which such Person is a party,

     (j) all Debt of other Persons of the type described in clauses (a) through (i)
above guaranteed, directly or indirectly, in any manner by such Person, or in effect guaranteed,
directly or indirectly, by such Person through an agreement (A) to pay or purchase such Debt or to
advance or supply funds for the payment or purchase of such Debt, (B) to purchase, sell or lease
(as lessee or lessor) property, or to purchase or sell services, primarily for the purpose of
enabling the debtor to make payment of such Debt or to assure the holder of such Debt against loss,
(C) to supply funds to or in any other manner invest in the debtor (including any agreement to pay
for property or services irrespective of whether such property is received or such services are
rendered) or (D) otherwise to assure a creditor against loss, and

     (k) all Debt of the type described in clauses (a) through (i) above secured by (or for which
the holder of such Debt has an existing right, contingent or otherwise, to be secured by) any
Encumbrance on property (including accounts and contract rights) owned or held or used under lease
or license by such Person, even though such Person has not assumed or become liable for payment of
such Debt.

     “Development Budget” means the budget (comprised of the Management Budget Component
and the Clinical Budget Component) for the implementation of the Development Plan (the initial form
of which was agreed upon by Alexza and Symphony Allegro as of the Original Closing Date and
attached to the Amended and Restated Research and Development Agreement as Annex C thereto), as may
be further developed and revised from time to time in accordance with the Development Committee
Charter and the Amended and Restated Research and Development Agreement.

     “Development Committee” has the meaning set forth in Article 3 of the Amended and
Restated Research and Development Agreement.

     “Development Committee Charter” has the meaning set forth in Article 3 of the Amended
and Restated Research and Development Agreement.

     “Development Committee Member” has the meaning set forth in Paragraph 1 of Annex B to
the Amended and Restated Research and Development Agreement.

     “Development Plan” means the development plan covering all the Programs (the initial
form of which was agreed upon by Alexza and Symphony Allegro as of the Original Closing Date and
attached to the Amended and Restated Research and Development Agreement as Annex C thereto), as may
be further developed and revised from time to time in accordance with the Development Committee
Charter and the

 

			
	[ * ] =	 	 Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission
pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

A-6

 

Amended and Restated Research and Development Agreement.

     “Development Product” means an AZ-002 Product or an AZ-004 Product that is
administered in a clinical trial performed pursuant to the Development Plan.

     “Development Services” has the meaning set forth in Section 1(b) of the RRD
Services Agreement.

     “Development Subcontracting Agreement” means a Subcontracting Agreement that is
directly related to one or both of the Programs and is not a Manufacturing Subcontracting
Agreement.

     “Director(s)” means the Persons identified as such in the Preliminary Statement of the
Indemnification Agreement (including such Persons as may become parties thereto after the date
thereof).

     “Disclosing Party” has the meaning set forth in Section 4 of the
Confidentiality Agreement.

     “Discontinuation Option” has the meaning set forth in Section 11(a) of the
Amended and Restated Research and Development Agreement.

     “Discontinuation Option Closing Date” means the date of expiration of the
Discontinuation Option pursuant to Section 11(a) of the Amended and Restated Research and
Development Agreement.

     “Discontinuation Price” has the meaning set forth in Section 11(a) of the
Amended and Restated Research and Development Agreement.

     “Discontinued Program” has the meaning set forth in Section 2.10 of the
Novated and Restated Technology License Agreement.

     “Disinterested Directors” has the meaning set forth in Article IX of the
Symphony Allegro Charter.

     “Distribution” has the meaning set forth in Section 1.01 of the Holdings LLC
Agreement.

     “Drug Master Files” means all Regulatory Files with respect to the manufacture or
design of a Product, including without limitation drug master files, design history files and
similar files.

     “Effective Registration Date” has the meaning set forth in Section 1(b) of the
Registration Rights Agreement.

     “Encumbrance” means (i) any security interest, pledge, mortgage, lien (statutory or
other), charge or option to purchase, lease or otherwise acquire any interest, (ii) any

 

			
	[ * ] =	 	 Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

A-7

 

adverse claim, restriction, covenant, title defect, hypothecation, assignment, deposit
arrangement, license or other encumbrance of any kind, preference or priority, or (iii) any other
security agreement or preferential arrangement of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement).

     “Equity Securities” means, with respect to any Person, shares of capital stock of (or
other ownership or profit interests in) such Person, warrants, options or other rights for the
purchase or other acquisition from such Person of shares of capital stock of (or other ownership or
profit interests in) such Person, securities convertible into or exchangeable for shares of capital
stock of (or other ownership or profit interests in) such Person or warrants, rights or options for
the purchase or other acquisition from such Person of such shares (or such other interests), and
other ownership or profit interests in such Person (including, without limitation, partnership,
member or trust interests therein), whether voting or nonvoting, and whether or not such shares,
warrants, options, rights or other interests are authorized or otherwise existing on any date of
determination.

     “ERISA” means the United States Employee Retirement Income Security Act of 1974, as
amended.

     “Excepted Debt” has the meaning set forth in Section 5(c)(iii) of the Purchase
Option Agreement.

     “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules
and regulations promulgated thereunder.

     “Existing Confidentiality Agreement” has the meaning set forth in Section 2(a)
of the Confidentiality Agreement.

     “Exiting Product” means, with respect to a particular Program, any Development Product
that was administered in a clinical trial pursuant to the Development Plan at any time prior to (a)
the termination of the Discontinuation Option with respect to such Program without exercise by
Licensor or (b) the expiration or termination of the Purchase Option without exercise by Licensor,
whichever comes first.

     “Extension Funding” has the meaning set forth in Section 2 of the Research
Cost Sharing and Extension Agreement.

     “External Directors” means, at any time, up to two (2) Persons elected to the Symphony
Allegro Board after the Original Closing Date (who shall be neither employees of Symphony Capital
nor of Alexza) in accordance with the Symphony Allegro Charter, the Symphony Allegro By-laws and
Section 4(b)(iv) of the Purchase Option Agreement.

     “FDA” means the United States Food and Drug Administration or its successor agency in
the United States.

     “FDA Sponsor” has the meaning set forth in Section 5.1 of the Amended and

 

			
	[ * ] =	 	 Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

A-8

 

Restated Research and Development Agreement.

     “Financial Audits” has the meaning set forth in Section 6.7 of the Amended and
Restated Research and Development Agreement.

     “Financing” has the meaning set forth in the Preliminary Statement of the Purchase
Option Agreement.

     “Fiscal Year” has the meaning set forth in each Operative Document in which it
appears.

     “Form S-3” means the Registration Statement on Form S-3 as defined under the
Securities Act.

     “FTE” means the time and effort of one or more qualified scientists working on the
AZ-002 Program or the AZ-004 Program that is equivalent to 1850 hours per year devoted exclusively
to the Programs by one (1) full-time employee. The portion of an FTE year devoted by any one
scientist to the Programs shall be determined by dividing the number of hours during any twelve
(12) month period devoted by such scientist to one or both Programs by 1850 hours, not to exceed
1.0 in any case.

     “GAAP” means generally accepted accounting principles in effect in the United States
of America from time to time.

     “Governmental Approvals” means authorizations, consents, orders, declarations or
approvals of, or filings with, or terminations or expirations of waiting periods imposed by any
Governmental Authority.

     “Governmental Authority” means any United States or non-United States federal,
national, supranational, state, provincial, local, or similar government, governmental, regulatory
or administrative authority, agency or commission or any court, tribunal, or judicial or arbitral
body.

     “Governmental Order” means any order, writ, judgment, injunction, decree, stipulation,
determination or award entered by or with any Governmental Authority.

     “Hedge Agreement” means any interest rate swap, cap or collar agreement, interest rate
future or option contract, currency swap agreement, currency future or option contract or other
similar hedging agreement.

     “Holdings” means Symphony Allegro Holdings LLC, a Delaware limited liability company.

     “Holdings Claims” has the meaning set forth in Section 5.01 of the Warrant
Purchase Agreement.

     “Holdings LLC Agreement” means the Amended and Restated Limited Liability

 

			
	[ * ] =	 	 Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

A-9

 

Company Agreement of Holdings dated as of the Original Closing Date.

     “HSR Filings” means the pre-merger notification and report forms required under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

     “IND” means an Investigational New Drug Application, as described in 21 U.S.C.
§ 355(i)(1) and 21 C.F.R. § 312 in the regulations promulgated by the United States Food and Drug
Administration, or any foreign equivalent thereof.

     “Indemnification Agreement” means the Indemnification Agreement among Symphony Allegro
and the Directors named therein, dated as of the Original Closing Date, as such agreement may be
amended or amended and restated from time to time.

     “Indemnified Party” has the meaning set forth in each Operative Document in which it
appears.

     “Indemnified Proceeding” has the meaning set forth in each Operative Document in which
it appears.

     “Indemnifying Party” has the meaning set forth in each Operative Document in which it
appears.

     “IND-Enabling GLP Inhalation Toxicology Studies” means the pharmacokinetic and
toxicology studies required for filing an IND.

     “Initial Development Budget” means the initial development budget prepared by
representatives of Symphony Allegro and Alexza prior to the Original Closing Date, and attached to
the Amended and Restated Research and Development Agreement as Annex C thereto.

     “Initial Development Plan” means the initial development plan prepared by
representatives of Symphony Allegro and Alexza prior to the Original Closing Date, and attached to
the Amended and Restated Research and Development Agreement as Annex C thereto.

     “Initial Holdings LLC Agreement” means the Agreement of Limited Liability Company of
Holdings, dated October 24, 2006.

     “Initial Investors LLC Agreement” means the Agreement of Limited Liability Company of
Investors, dated October 24, 2006.

     “Initial LLC Member” has the meaning set forth in Section 1.01 of the Holdings
LLC Agreement.

     “Interest Certificate” has the meaning set forth in Section 1.01 of the
Holdings LLC Agreement.

 

			
	[ * ] =	 	 Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

A-10

 

     “Investment Company Act” means the Investment Company Act of 1940, as amended.

     “Investment Overview” means the investment overview describing the transactions
entered into pursuant to the Operative Documents.

     “Investment Policy” has the meaning set forth in Section 1(a)(vi) of the RRD
Services Agreement.

     “Investors” means Symphony Allegro Investors LLC.

     “Investors LLC Agreement” means the Amended and Restated Agreement of Limited
Liability Company of Investors dated as of the Original Closing Date.

     “IRS” means the U.S. Internal Revenue Service.

     “Key Personnel” means those Alexza Personnel listed on Schedule 6.5 to the
Amended and Restated Research and Development Agreement, as such schedule may be updated from time
to time by mutual agreement of the parties to the Amended and Restated Research and Development
Agreement.

     “Know-How” means findings, discoveries, inventions, know-how, information, results and
data of any type whatsoever, including without limitation, technical information, techniques,
results of experimentation and testing, diagnostic and prognostic assays, specifications,
databases, manufacturing processes or protocols, any and all laboratory, research, pharmacological,
toxicological, analytical, quality control, pre-clinical and clinical data.

     “Knowledge” of Alexza, Symphony Allegro or Holdings, as the case may be, means the
actual (and not imputed) knowledge of the executive officers or managing member of such Person
without the duty of inquiry or investigation.

     “Law” means any law, statute, treaty, constitution, regulation, rule, ordinance, order
or Governmental Approval, or other governmental restriction, requirement or determination, of or by
any Governmental Authority.

     “License” has the meaning set forth in the Preliminary Statement of the Purchase
Option Agreement.

     “Licensed Intellectual Property” means the Licensed Patent Rights and the Licensed
Know-How.

     “Licensed Know-How” means any and all Know-How that is Controlled by Licensor on or
after the Original Closing Date and prior to the unexercised expiration or termination of the
Purchase Option that:

     (a) is necessary or useful to practice the inventions claimed in the Licensed

 

			
	[ * ] =	 	 Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

A-11

 

Patent Rights; or

     (b) is a Symphony Allegro Enhancement;

     provided, however, that Licensed Know-How shall not include any Licensed
Patent Rights or any Know-How for the manufacture of a Product, including Know-How associated with
Product quality control or stability testing.

     “Licensed Patent Rights” means any and all patents and patent applications Controlled
by Licensor that:

     (a) are listed on Annex D of the Novated and Restated Technology License Agreement;

     (b) are reissues, continuations, divisionals, continuations-in-part, reexaminations, renewals,
substitutes, extensions or foreign counterparts of the patents and patent applications described in
(a) and (i) are filed prior to the unexercised expiration or termination of the Purchase Option or
(ii) are filed after such expiration or termination, but solely to the extent claiming Know-How
conceived and reduced to practice prior to such expiration or termination;

     (c) contain a claim that covers an invention disclosed in an invention disclosure listed on
Annex D of the Novated and Restated Technology License Agreement and (i) are filed prior to
the unexercised expiration or termination of the Purchase Option or (ii) are filed after such
expiration or termination, but solely to the extent claiming such invention;

     (d) contain a claim that covers a Symphony Allegro Enhancement and (i) are filed prior to the
unexercised expiration or termination of the Purchase Option or (ii) are filed after such
expiration or termination, but solely to the extent claiming such Symphony Allegro Enhancement; or

     (e) contain a claim that covers a Development Product or the manufacture or use thereof and
(i) are filed prior to the unexercised expiration or termination of the Purchase Option or (ii) are
filed after such expiration or termination, but solely to the extent claiming Development
Product-related Know-How conceived and reduced to practice prior to such expiration or termination.

     “Licensor” means Alexza.

     “Lien” has the meaning set forth in Section 1.01 of the Holdings LLC
Agreement.

     “Liquidating Event” has the meaning set forth in Section 8.01 of the Holdings
LLC Agreement.

     “LLC Agreements” means the Initial Holdings LLC Agreement, the Holdings LLC Agreement,
the Initial Investors LLC Agreement and the Investors LLC Agreement.

 

			
	[ * ] =	 	 Certain confidential information contained in this document, marked by
brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.

A-12 

 

     “Loss” has the meaning set forth in each Operative Document in which it appears.

     “Loxapine” means: (a) loxapine and (b) all salts, metabolites, prodrug and other
physical forms thereof.

     “Management Fee” has the meaning set forth in Section 6(a) of the RRD Services
Agreement.

     “Management Services” has the meaning set forth in Section 1(a) of the RRD
Services Agreement.

     “Manager” means (i) for each LLC Agreement in which it appears, the meaning set forth
in such LLC Agreement, and (ii) for each other Operative Document in which it appears, RRD in its
capacity as manager of Symphony Allegro.

     “Manager Event” has the meaning set forth in Section 3.01(g) of the Holdings
LLC Agreement.

     “Manufacturing Subcontracting Agreement” means a Subcontracting Agreement that is
directly related to the manufacture of Product (including procurement of components and development
of improved manufacturing methods) or the improvement of the Staccato Technology.

     “Material Adverse Effect” means, with respect to any Person, a material adverse effect
on (i) the business, assets, property or condition (financial or otherwise) of such Person or,
(ii) its ability to comply with and satisfy its respective agreements and obligations under the
Operative Documents or, (iii) the enforceability of the obligations of such Person of any of the
Operative Documents to which it is a party.

     “Material Subsidiary” means, at any time, a Subsidiary of Alexza having assets in an
amount equal to at least 5% of the amount of total consolidated assets of Alexza and its
Subsidiaries (determined as of the last day of the most recent reported fiscal quarter of Alexza)
or revenues or net income in an amount equal to at least 5% of the amount of total consolidated
revenues or net income of Alexza and its Subsidiaries for the 12-month period ending on the last
day of the most recent reported fiscal quarter of Alexza.

     “Medical Discontinuation Event” means a series of adverse events, side effects or
other undesirable outcomes that, when collected in a Program, would cause a reasonable FDA Sponsor
to discontinue such Program.

     “Membership Interest” means (i) for each LLC Agreement in which it appears, the
meaning set forth in such LLC Agreement, and (ii) for each other Operative Document in which it
appears, the meaning set forth in the Holdings LLC Agreement.

     “NASDAQ” means the Nasdaq Stock Market, Inc.

     “NDA” means a New Drug Application, as defined in the regulations

 

			
	[ * ] =	 	 Certain confidential information contained in this document, marked by
brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.

A-13 

 

promulgated by the United States Food and Drug Administration, or any foreign equivalent
thereof.

     “Non-Alexza Capital Transaction” means any (i) sale or other disposition of all or
part of the Symphony Allegro Shares or all or substantially all of the operating assets of Symphony
Allegro, to a Person other than Alexza or an Affiliate of Alexza or (ii) distribution in kind of
the Symphony Allegro Shares following the unexercised expiration or termination of the Purchase
Option.

     “Novated and Restated Technology License Agreement” means the Novated and Restated
Technology License Agreement, dated as of the Original Closing Date, among Alexza, Symphony Allegro
and Holdings.

     “Operative Documents” means, collectively, the Indemnification Agreement, the Holdings
LLC Agreement, the Purchase Option Agreement, the Warrant Purchase Agreement, the Registration
Rights Agreement, the Subscription Agreement, the Technology License Agreement, the Novated and
Restated Technology License Agreement, the RRD Services Agreement, the Research and Development
Agreement, the Research Cost Sharing and Extension Agreement, the Amended and Restated Research and
Development Agreement, the Confidentiality Agreement, the Corporate Governance Letter Agreement and
each other certificate and agreement executed in connection with any of the foregoing documents.

     “Organizational Documents” means any certificates or articles of incorporation or
formation, partnership agreements, trust instruments, bylaws or other governing documents.

     “Original Agreement” has the meaning set forth in the Preliminary Statement of the
Purchase Option Agreement.

     “Original Closing Date” means December 1, 2006.

     “Party(ies)” means, for each Operative Document or other agreement in which it
appears, the parties to such Operative Document or other agreement, as set forth therein. With
respect to any agreement in which a provision is included therein by reference to a provision in
another agreement, the term “Party” shall be read to refer to the parties to the document
at hand, not the agreement that is referenced.

     “Payment Terms” has the meaning set forth in Section 8.2 of the Amended and
Restated Research and Development Agreement.

     “Percentage” has the meaning set forth in Section 1.01 of the Holdings LLC
Agreement.

     “Permitted Investments” has the meaning set forth in Section 1.01 of the
Holdings LLC Agreement.

 

			
	[ * ] =	 	 Certain confidential information contained in this document, marked by
brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.

A-14 

 

     “Permitted Lien” has the meaning set forth in Section 1.01 of the Holdings LLC
Agreement.

     “Person” means any individual, partnership (whether general or limited), limited
liability company, corporation, trust, estate, association, nominee or other entity.

     “Personnel” of a Party means such Party, its employees, subcontractors, consultants,
representatives and agents.

     “Prime Rate” means the quoted “Prime Rate” at JPMorgan Chase Bank or, if such
bank ceases to exist or is not quoting a base rate, prime rate reference rate or similar rate for
United States dollar loans, such other major money center commercial bank in New York City selected
by the Manager.

     “Products” means an AZ-002 Product and/or an AZ-004 Product.

     “Profit” has the meaning set forth in Section 1.01 of the Holdings LLC
Agreement.

     “Programs” means the AZ-002 Program and/or the AZ-004 Program.

     “Program-Specific Claim” means any claim in a patent or patent application in the
Licensed Patent Rights that is directed exclusively to AZ-002 Products and/or AZ-004 Products.

     “Program-Specific Patents” means any and all Licensed Patent Rights that contain at
least one Program-Specific Claim.

     “Protocol” means a written protocol that meets the substantive requirements of
Section 6 of the ICH Guideline for Good Clinical Practice as adopted by the FDA, effective
May 9, 1997, and is included within the Development Plan or later modified or added to the
Development Plan pursuant to the Amended and Restated Research and Development Agreement.

     “Public Companies” has the meaning set forth in Section 5(e) of the Purchase
Option Agreement.

     “Purchase Option” has the meaning set forth in Section 1(a) of the Purchase
Option Agreement.

     “Purchase Option Agreement” means the Amended and Restated Purchase Option Agreement
dated as of the date hereof, among Alexza, Holdings and Symphony Allegro.

     “Purchase Option Closing” has the meaning set forth in Section 2(a) of the
Purchase Option Agreement.

     “Purchase Option Closing Date” has the meaning set forth in Section 2(a) of
the

 

			
	[ * ] =	 	 Certain confidential information contained in this document, marked by
brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.

A-15 

 

Purchase Option Agreement.

     “Purchase Option Commencement Date” has the meaning set forth in
Section 1(c)(iii) of the Purchase Option Agreement.

     “Purchase Option Exercise Date” has the meaning set forth in Section 2(a) of
the Purchase Option Agreement.

     “Purchase Option Exercise Notice” has the meaning set forth in Section 2(a) of
the Purchase Option Agreement.

     “Purchase Option Offset Amount” shall mean, following the termination of the Amended
and Restated Research and Development Agreement by Alexza pursuant to Section 17.3 thereof, those
unpaid amounts actually owed to Alexza as a result of the material breach or default of any payment
obligation of Symphony Allegro to Alexza pursuant to the Amended and Restated Research and
Development Agreement by Symphony Allegro or Holdings that was the basis for such termination of
the Amended and Restated Research and Development Agreement by Alexza.

     “Purchase Option Period” has the meaning set forth in Section 1(c)(iii) of the
Purchase Option Agreement.

     “Purchase Price” has the meaning set forth in Section 2(b) of the Purchase
Option Agreement.

     “QA Audits” has the meaning set forth in Section 6.6 of the Amended and
Restated Research and Development Agreement.

     “Registration Rights Agreement” means the Amended and Restated Registration Rights
Agreement dated as of the date hereof, between Alexza and Holdings.

     “Registration Statement” has the meaning set forth in Section 1(b) of the
Registration Rights Agreement.

     “Regulatory Allocation” has the meaning set forth in Section 3.06 of the
Holdings LLC Agreement.

     “Regulatory Authority” means the United States Food and Drug Administration, or any
successor agency in the United States, or any health regulatory authority(ies) in any other country
that is a counterpart to the FDA and has responsibility for granting registrations or other
regulatory approval for the marketing, manufacture, storage, sale or use of drugs in such other
country.

     “Regulatory Files” means any IND, NDA or any other filings filed with any Regulatory
Authority with respect to the Programs.

     “Representative” of any Person means such Person’s shareholders, principals,

 

			
	[ * ] =	 	 Certain confidential information contained in this document, marked by
brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.

A-16 

 

directors, officers, employees, members, managers and/or partners.

     “Research Cost Sharing and Extension Agreement” means the Research Cost Sharing and
Extension Agreement dated as of the Original Closing Date, among Alexza, Holdings and Symphony
Allegro.

     “Research and Development Agreement” means the Research and Development Agreement
dated as of the Original Closing Date, between Alexza and Holdings.

     “RRD” means RRD International, LLC, a Delaware limited liability company.

     “RRD Indemnified Party” has the meaning set forth in Section 10(a) of the RRD
Services Agreement.

     “RRD Loss” has the meaning set forth in Section 10(a) of the RRD Services
Agreement.

     “RRD Personnel” has the meaning set forth in Section 1(a)(ii) of the RRD
Services Agreement.

     “RRD Services Agreement” means the RRD Services Agreement between Symphony Allegro and
RRD, dated as of the Original Closing Date.

     “Schedule K-1” has the meaning set forth in Section 9.02(a) of the Holdings
LLC Agreement.

     “Scheduled Meeting” has the meaning set forth in Paragraph 6 of Annex B of the Amended
and Restated Research and Development Agreement.

     “Scientific Discontinuation Event” has the meaning set forth in Section 4.2(c)
of the Amended and Restated Research and Development Agreement.

     “SCP” means Symphony Capital Partners, L.P., a Delaware limited partnership.

     “SEC” means the United States Securities and Exchange Commission.

     “Securities Act” means the Securities Act of 1933, as amended.

     “Selling Stockholder Questionnaire” has the meaning set forth in Section 4(a)
of the Registration Rights Agreement.

     “Shareholder” means any Person who owns any Symphony Allegro Shares.

     “Solvent” has the meaning set forth in Section 1.01 of the Holdings LLC
Agreement.

     “SSP” means Symphony Strategic Partners, LLC, a Delaware limited liability company.

 

			
	[ * ] =	 	 Certain confidential information contained in this document, marked by
brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.

A-17 

 

     “Staccato Technology” means Alexza’s proprietary technology for the vaporization of a
pharmaceutical composition via rapid-heating to form a condensation aerosol that allows rapid
systemic drug delivery to humans through lung inhalation.

     “Stockholder Approval” has the meaning set forth in Section 3(b)(v) of the
Purchase Option Agreement.

     “Stock Payment Date” has the meaning set forth in Section 2 of the
Subscription Agreement.

     “Stock Purchase Price” has the meaning set forth in Section 2 of the
Subscription Agreement.

     “Subcontracting Agreement” means (a) any written agreement between Alexza and a third
party pursuant to which the third party performs any Alexza Obligations or (b) any work order,
change order, purchase order or the like entered into pursuant to Section 6.2(b) of the Amended and
Restated Research and Development Agreement.

     “Sublicense Obligations” has the meaning set forth in Section 3.2 of the
Novated and Restated Technology License Agreement.

     “Sublicensed Intellectual Property” has the meaning set forth in Section 3.2
of the Novated and Restated Technology License Agreement.

     “Subscription Agreement” means the Subscription Agreement between Symphony Allegro and
Holdings, dated as the Original Closing Date.

     “Subsidiary” of any Person means any corporation, partnership, joint venture, limited
liability company, trust or estate of which (or in which) more than 50% of (a) the issued and
outstanding capital stock having ordinary voting power to elect a majority of the board of
directors of such corporation (irrespective of whether at the time capital stock of any other class
or classes of such corporation shall or might have voting power upon the occurrence of any
contingency); (b) the interest in the capital or profits of such partnership, joint venture or
limited liability company; or (c) the beneficial interest in such trust or estate is at the time
directly or indirectly owned or controlled by such Person, by such Person and one or more of its
other Subsidiaries or by one or more of such Person’s other Subsidiaries.

     “Surviving Entity” means the surviving legal entity which is surviving entity to
Alexza after giving effect to a Change of Control.

     “Symphony Allegro” means Symphony Allegro, Inc., a Delaware corporation.

     “Symphony Allegro Auditors” has the meaning set forth in Section 5(b) of the
RRD Services Agreement.

     “Symphony Allegro Board” means the board of directors of Symphony Allegro.

 

			
	[ * ] =	 	 Certain confidential information contained in this document, marked by
brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.

A-18 

 

     “Symphony Allegro By-laws” means the By-laws of Symphony Allegro, as adopted by
resolution of the Symphony Allegro Board on the Original Closing Date.

     “Symphony Allegro Charter” means the Amended and Restated Certificate of Incorporation
of Symphony Allegro, dated as of the Original Closing Date.

     “Symphony Allegro Director Event” has the meaning set forth in
Section 3.01(h)(i) of the Holdings LLC Agreement.

     “Symphony Allegro Enhancements” means any and all Know-How, whether or not patentable,
that is made by or on behalf of Symphony Allegro during the Term, including Know-How generated or
derived by RRD and assigned to Symphony Allegro pursuant to Section 12 of the RRD Services
Agreement.

     “Symphony Allegro Equity Securities” means the Common Stock and any other stock or
shares issued by Symphony Allegro.

     “Symphony Allegro Loss” has the meaning set forth in Section 10(b) of the RRD
Services Agreement.

     “Symphony Allegro Shares” has the meaning set forth in Section 2.02 of the
Holdings LLC Agreement.

     “Symphony Capital” means Symphony Capital LLC, a Delaware limited liability company.

     “Symphony Fund(s)” means Symphony Capital Partners, L.P., a Delaware limited
partnership, and Symphony Strategic Partners, LLC, a Delaware limited liability company.

     “Tangible Materials” means any tangible technical, medical, regulatory or marketing
documentation, whether written or electronic, existing as of the Original Closing Date or made by
or on behalf of Symphony Allegro during the Term, that (a) is Controlled by the Licensor and (b)
embodies or relates solely to the Regulatory Files (other than Drug Master Files), Exiting Products
or the Programs; provided, however, that Tangible Materials shall not include any
manufacturing-related documentation or any documentation related to Licensed Intellectual Property.

     “Tax Amount” has the meaning set forth in Section 4.02 of the Holdings LLC
Agreement.

     “Technology License Agreement” means the Technology License Agreement, dated as of the
Original Closing Date, between Alexza and Holdings.

     “Term” has the meaning set forth in Section 4(b)(iii) of the Purchase Option
Agreement, unless otherwise stated in any Operative Document.

 

			
	[ * ] =	 	 Certain confidential information contained in this document, marked by
brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.

A-19 

 

     “Territory” means the world.

     “Third Party IP” has the meaning set forth in Section 2.9 of the Novated and
Restated Technology License Agreement.

     “Third Party Licensor” means a third party from which Alexza has received a license or
sublicense to Licensed Intellectual Property.

     “Transaction Event” has the meaning set forth in Section 6.05 of the Warrant
Purchase Agreement.

     “Transfer” has for each Operative Document in which it appears the meaning set forth
in such Operative Document.

     “Transferee” has, for each Operative Document in which it appears, the meaning set
forth in such Operative Document.

     “Voluntary Bankruptcy” has the meaning set forth in Section 1.01 of the
Holdings LLC Agreement.

     “Warrant Closing” has the meaning set forth in Section 2.03 of the Warrant
Purchase Agreement.

     “Warrant Date” has the meaning set forth in Section 2.02 of the Warrant
Purchase Agreement.

     “Warrant Purchase Agreement” means the Warrant Purchase Agreement, dated as of the
date hereof, between Alexza and Holdings.

     “Warrant Surrender Price” has the meaning set forth in Section 7.08 of the
Warrant Purchase Agreement.

 

			
	[ * ] =	 	 Certain confidential information contained in this document, marked by
brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.

A-20 

 

EXHIBIT 1

PURCHASE OPTION EXERCISE NOTICE

                    , 20___

Attention:                     

Ladies and Gentlemen:

     Reference is hereby made to that certain Amended and Restated Purchase Option Agreement dated
as of June 15, 2009 (the “Purchase Option Agreement”), by and among Alexza Pharmaceuticals,
Inc., a Delaware corporation (“Alexza”), Symphony Allegro Holdings LLC, a Delaware limited
liability company, and Symphony Allegro, Inc., a Delaware corporation. Capitalized terms used
herein and not otherwise defined herein shall have the meanings assigned thereto in the Purchase
Option Agreement.

     Pursuant to Section 2(a) of the Purchase Option Agreement, Alexza hereby irrevocably
notifies you that it hereby exercises the Purchase Option.

     Subject to the terms set forth therein, Alexza hereby affirms the representations and
warranties set forth in Section 3(a) of the Purchase Option Agreement, as of the date
hereof.

     Alexza estimates that the Purchase Option Closing Date will be                     .

	 	 	 	 	 
	 	Very truly yours,

ALEXZA PHARMACEUTICALS, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	Thomas B. King 	 
	 	 	Title:  	President and

Chief Executive Officer 	 
	 

 

			
	[ * ] =	 	 Certain confidential information contained in this document, marked by
brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.

 

 

EXHIBIT 2

FORM OF OPINION OF COOLEY GODWARD KRONISH LLP

[See attached.]

 

			
	[ * ] =	 	 Certain confidential information contained in this document, marked by
brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.

 

 

[                    ], 2009

Symphony Allegro Holdings LLC

7361 Calhoun Place, Suite 325

Rockville, MD 20855

Dear Ladies and Gentlemen:

We have acted as counsel for Alexza Pharmaceuticals, Inc., a Delaware corporation (the “Company”),
in connection with the financing of certain of the Company’s research and development programs (the
“Financing”). In connection with the amendment of certain terms of the Financing, the Company has
entered into the agreements listed on Schedule I hereto (collectively, the “Transaction
Agreements”). We are rendering this opinion pursuant to Section 3(b)(i) of the Purchase Option
Agreement (as defined in Schedule I hereto).

In connection with this opinion, we have examined and relied upon the representations and
warranties as to factual matters contained in and made pursuant to the Transaction Agreements by
the various parties and originals, or copies certified to our satisfaction, of such records,
documents, certificates, opinions, memoranda and other instruments as in our judgment are necessary
or appropriate to enable us to render the opinion expressed below.

As to certain factual matters, we have relied upon certificates of officers of the Company and have
not sought independently to verify such matters. Where we render an opinion “to our knowledge” or
concerning an item “known to us” or our opinion otherwise refers to our knowledge, it is based
solely upon (i) an inquiry of attorneys currently within this firm who have represented the Company
in this transaction, (ii) receipt of a certificate executed by an officer of the Company covering
such matters and (iii) such other investigation, if any, that we specifically set forth herein.

In rendering this opinion, we have assumed: the authenticity of all documents submitted to us as
originals; the conformity to originals of all documents submitted to us as copies; the accuracy,
completeness and authenticity of certificates of public officials; the due authorization, execution
and delivery of all documents (except the due authorization, execution and delivery by the Company
of the Transaction Agreements), where authorization, execution and delivery are prerequisites to
the effectiveness of such documents; and the genuineness and authenticity of all signatures on
original documents (except the signatures on behalf of the Company on the Transaction Agreements).
We have also assumed: that all individuals executing and delivering documents had the legal
capacity to so execute and deliver; that the Transaction Agreements are obligations binding upon
the parties thereto other than the Company; and that there are no extrinsic agreements or
understandings among the parties to the Transaction Agreements or to the Material Agreements (as
defined below) that would modify or interpret the terms of any such agreements or the respective
rights or obligations of the parties thereunder.

Our opinion is expressed only with respect to the federal laws of the United States of America, the
laws of the State of California for the purposes of paragraphs 4 and 5 below, the laws of the State
of New York and the General Corporation Law of the State of Delaware. We express no opinion as to
whether the laws of any particular jurisdiction apply, and no opinion to the extent

 

			
	[ * ] =	 	 Certain confidential information contained in this document, marked by
brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.

 

 

[                    ], 2009

Page Two

that the laws of any jurisdiction other than those identified above are applicable to the subject
matter hereof.

We express no opinion as to any provisions of the Transaction Agreements that: (a) relate to the
subject matter jurisdiction of any federal court of the United States of America or any federal
appellate court to adjudicate any controversy related to the Transaction Agreements, (b) contains a
waiver of an inconvenient forum, or (c) relates to advance waivers of claims, defenses, rights
granted by law, or notice, opportunity for hearing, evidentiary requirements, statutes of
limitations, trial by jury, or procedural rights.

We are not rendering any opinion as to any statute, rule, regulation, ordinance, decree or
decisional law relating to antitrust, banking, land use, environmental, pension, employee benefit,
tax, usury, laws governing the legality of investments for regulated entities, regulations T, U or
X of the Board of Governors of the Federal Reserve System or local law. Furthermore, we express no
opinion with respect to compliance with antifraud laws, rules or regulations relating to securities
or the offer and sale thereof; compliance with the Investment Company Act of 1940, as amended,
except as expressly set forth in paragraph 9 below; compliance with fiduciary duties by the
Company’s Board of Directors or stockholders; compliance with safe harbors for disinterested Board
of Director or stockholder approvals; compliance with state securities or blue sky laws except as
specifically set forth below; or compliance with laws that place limitations on corporate
distributions.

With regard to our opinion in paragraph 1 below, we have relied solely upon a certificate of the
Secretary of State of the State of Delaware as of a recent date. We have made no further
investigation.

With regard to our opinion in paragraph 3 below, with respect to the due and valid authorization of
each of the Transaction Documents, we have relied solely upon (i) a certificate of an officer of
the Company, (ii) a review of the certificate of incorporation and bylaws of the Company, (iii) a
review of the resolutions certified by an officer of the Company, and (iv) a review of the Delaware
General Corporation Law. We have made no further investigation.

With regard to our opinion in paragraph 4 below concerning material defaults under and any material
breaches of any agreement identified on Schedule II hereto, we have relied solely upon (i) a
certificate of an officer of the Company, (ii) a list supplied to us by the Company of material
agreements to which the Company is a party, or by which it is bound, a copy of which is attached
hereto as Schedule II (the “Material Agreements”) and (iii) an examination of the Material
Agreements in the form provided to us by the Company. We have made no further investigation.
Further, with regard to our opinion in paragraph 4 below concerning Material Agreements, we express
no opinion as to (i) financial covenants or similar provisions therein requiring financial
calculations or determinations to ascertain compliance, (ii) provisions therein relating to the
occurrence of a “material adverse event” or words of similar import or (iii) any statement or
writing that may constitute parol evidence bearing on interpretation or construction.

With regard to our opinion in paragraph 7 below, we express no opinion to the extent that,
notwithstanding its current reservation of shares of Common Stock, future issuances of securities
of the Company and/or antidilution adjustments to outstanding securities of the Company may cause
the Warrant Shares (as defined in the Warrant Purchase Agreement (as

 

			
	[ * ] =	 	 Certain confidential information contained in this document, marked by
brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.

 

 

[                    ], 2009

Page Three

defined on Schedule I hereto)) to exceed the number of shares of Common Stock that then remain
authorized but unissued.

With regard to our opinion in paragraph 8 concerning exemption from registration, our opinion is
expressed only with respect to the offer and sale of the Alexza Closing Shares (as defined in the
Purchase Option Agreement), the Warrant (as defined in the Warrant Purchase Agreement) or the
Warrant Shares without regard to any offers or sales of securities occurring prior to or subsequent
to the date hereof.

With regard to our opinion in paragraph 9 below, we have based our opinion, to the extent we
consider appropriate, on Rule 3a-8 under the Investment Company Act of 1940, as amended, and a
certificate of an officer of the Company as to compliance with each of the requirements necessary
to comply with Rule 3a-8. We have conducted no further investigation.

On the basis of the foregoing, in reliance thereon and with the qualifications set forth herein, we
are of the opinion that:

	1.	 	The Company has been duly incorporated and is a validly existing corporation in good standing
under the laws of the State of Delaware.

	2.	 	The Company has the corporate power to perform its obligations under the Transaction
Agreements.

	3.	 	Each of the Transaction Agreements has been duly and validly authorized, executed and
delivered by the Company. The offer and sale of the Alexza Closing Shares and the Warrant
have been duly authorized by the Company.

	4.	 	The issuance of the Alexza Closing Shares and the Warrant pursuant to the Transaction
Agreements and the Warrant Shares pursuant to the Warrant (assuming the exercise of the
Warrant on the date hereof) will not (a) violate any provision of the Company’s certificate of
incorporation or by-laws, (b) violate any governmental statute, rule or regulation which in
our experience is typically applicable to transactions of the nature contemplated by the
Transaction Agreements, (c) violate any order, writ, judgment, injunction, decree,
determination or award which has been entered against the Company and of which we are aware or
(d) constitute a material default under or a material breach of any Material Agreement, in the
case of clauses (c) and (d) to the extent such default or breach would materially and
adversely affect the Company.

	5.	 	All consents, approvals, authorizations or orders of, and filings, registrations and
qualifications with, any U.S. Federal or California regulatory authority or governmental body
required for the sale and issuance of the Alexza Closing Shares and the Warrant have been made
or obtained, except (a) for the filing of a Form D pursuant to Securities and Exchange
Commission Regulation D and (b) for the filing of the notice to be filed under California
Corporations Code Section 25102.1(d).

	6.	 	Each of the Transaction Agreements constitutes a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms.

 

			
	[ * ] =	 	 Certain confidential information contained in this document, marked by
brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.

 

 

[                    ], 2009

Page Four

	7.	 	The Alexza Closing Shares and the Warrant Shares, when sold and issued in accordance with the
terms of the Purchase Option Agreement or the Warrant, as applicable, will be validly issued,
fully paid and non-assessable, and the issuance of the Alexza Closing Shares and the Warrant
Shares is not subject to preemptive rights pursuant to the General Corporation Law of the
State of Delaware, the certificate of incorporation or by-laws of the Company or similar
rights to subscribe pursuant to any Material Agreement.

	8.	 	The offer and sale of the Alexza Closing Shares, the Warrant and the Warrant Shares (assuming
exercise of the Warrant on the date hereof) are exempt from the registration requirements of
the Securities Act of 1933, as amended, subject to the timely filing of a Form D pursuant to
Securities and Exchange Commission Regulation D.

	9.	 	The Company is not an “investment company” as defined in the Investment Company Act of 1940,
as amended.

Our opinion in paragraph 6 above is specifically subject to the following limitations, exceptions,
qualifications and assumptions:

     A. The opinions expressed above are subject to, and may be limited by, applicable bankruptcy,
reorganization, insolvency, moratorium, fraudulent conveyance, debtor and creditor, and similar
laws which relate to or affect creditors’ rights generally. This opinion is also subject to, and
may be limited by, general principles of equity and the exercise of judicial discretion (regardless
of whether such validity or enforceability is considered in a proceeding in equity or at law),
including the possible unavailability of specific performance, injunctive relief or any other
equitable remedy and concepts of materiality, reasonableness, conscionability, good faith and fair
dealing.

     B. We express no opinion as to the effect of court decisions, invoking statutes or principles
of equity, which have held that certain covenants and provisions of agreements are unenforceable
where enforcement of such covenants or provisions under the circumstances would violate the
enforcing party’s implied covenant of good faith and fair dealing or would be limited by the
principles of course of dealing or course of performance.

     C. We express no opinion as to the effect of any federal or state law or equitable principle
which provides that a court may refuse to enforce, or may limit the application of, a contract or
any clause thereof that the courts find to be unconscionable at the time it was made or contrary to
public policy.

     D. We express no opinion as to the enforceability under certain circumstances of provisions
expressly or by implication waiving broadly or vaguely stated rights, unknown future rights
including without limitation rights to damages, or defenses to obligations or rights granted by
law, when such waivers are against public policy or prohibited by law.

     E. We express no opinion as to the enforceability under certain circumstances of provisions to
the effect that rights or remedies are not exclusive, that rights or remedies may be exercised
without notice, that every right or remedy is cumulative and may be exercised in addition to or
with any other right or remedy, that election of a particular remedy or remedies

 

			
	[ * ] =	 	 Certain confidential information contained in this document, marked by
brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.

 

 

[                    ], 2009

Page Five

does not preclude recourse to one or more remedies, or that failure to exercise or delay in
exercising rights or remedies will not operate as a waiver of any such right or remedy.

     F. We express no opinion as to the enforceability of any provision of an applicable agreement
requiring that waivers must be in writing; such provision may not be binding or enforceable if a
non-executory oral agreement has been created modifying any such provision or if an implied
agreement by trade practice or course of conduct has given rise to a waiver.

     G. We express no opinion as to the enforceability of the following rights and remedies which
may be limited by applicable law: (i) any provision which provides for a rate of interest which
exceeds that permissible under applicable law; (ii) any provision which purports to affect the
jurisdiction of a court (including provisions as to methods of service of process and as to
property which may be subject to such jurisdiction) or may be subject to the discretion of a court
(including provisions as to venue); (iii) any provision which purports to make available remedies
for violations, breaches or defaults that are determined by a court of competent jurisdiction to be
non-material or unreasonable; (iv) any provision which provides for a choice of law or choice of
forum; (v) any provision relating to contribution to or the indemnification or exculpation of any
party; and (vi) any provision that contains a waiver of the benefits of statutory, regulatory, or
constitutional rights, unless and to the extent the statute, regulation, or constitution explicitly
allows waiver, including without limitation, any provision which purports to waive trial by jury.

     H. We express no opinion with respect to the following: (i) any document referenced in the
Transaction Agreements that is not a Transaction Agreement; and (ii) the enforceability of the
Transaction Agreements by or against any person or entity that is not a party thereto.

     I. We express no opinion as to the enforceability of any provision for penalties, liquidated
damages, acceleration of future amounts due (other than principal) without appropriate discount to
present value, late charges, prepayment charges, or increased interest rates upon default.

     J. We express no opinion as the enforceability of any provision stating that the provisions of
a contract are severable.

     K. We express no opinion as to the enforceability of any provision that would permit the other
party to require performance without requiring consideration of the impracticability or
impossibility of performance at the time of attempted enforcement due to unforeseen circumstances
not within the contemplation of the parties.

     L. We express no opinion as to the enforceability of any provision which purports to assign,
grant a lien upon or security interest in or to any contract, right, agreement or other property
right or the proceeds thereof (other than assignments or security interests in accounts, general
intangibles, chattel paper or promissory notes to the extent provided by Sections 9-406(d), 9-407
and 9-408 of the New York Uniform Commercial Code), which by its terms or under applicable law,
rule or regulation is not so assignable or under which the grant of such a lien or security
interest is prohibited.

 

			
	[ * ] =	 	 Certain confidential information contained in this document, marked by
brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.

 

 

[                    ], 2009

Page Six

This opinion is limited to the matters expressly set forth herein, and no opinion, express or
implied, is given beyond the matters expressly stated. This opinion speaks only as to the laws and
facts in effect or existing as of the date hereof, and we have no obligation to update or
supplement this opinion to reflect any facts or circumstances that may hereafter come to our
attention or any changes in law that may hereafter occur.

This opinion is intended solely for your benefit and is not to be made available to or be relied
upon by any other person, firm, or entity without our prior written consent.

Sincerely,

Cooley Godward Kronish LLP

	 	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

Brent D. Fassett
	 	 

 

			
	[ * ] =	 	 Certain confidential information contained in this document, marked by
brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.

 

 

Schedule I

List of Transaction Agreements

	1.	 	Warrant Purchase Agreement, dated as of June 15, 2009 between the Company and Symphony
Allegro Holdings LLC (the “Warrant Purchase Agreement”).

	2.	 	Amended and Restated Purchase Option Agreement, dated as of June 15, 2009, by and among the
Company, Symphony Allegro Holdings LLC and Symphony Allegro, Inc. (the “Purchase Option
Agreement”).

	3.	 	Registration Rights Agreement, dated as of June 15, 2009, between the Company and Symphony
Allegro Holdings LLC.

	4.	 	Letter Agreement, dated as of [                    ], 2009, between the Company and Symphony Allegro
Holdings LLC, in respect of various corporate governance matters.

 

			
	[ * ] =	 	 Certain confidential information contained in this document, marked by
brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.

 

 

Schedule II

List of Material Agreements

	1.	 	Lease between the Company and Brittania, LLC dated August 25, 2006.
	 
	2.	 	First Amendment to Lease between the Company and Britannia Hacienda VIII LLC dated May 4,
2007.
	 
	3.	 	Second Amendment to Lease between the Company and Britannia Hacienda VIII LLC dated August
28, 2007.
	 
	4.	 	2009-2010 Performance Based Incentive Program.
	 
	5.	 	Second Amended and Restated Investors’ Rights Agreement between the Company and certain
holders of Preferred Stock dated November 5, 2004.
	 
	6.	 	2005 Equity Incentive Plan.
	 
	7.	 	2005 Non-Employee Directors’ Stock Option Plan.
	 
	8.	 	2005 Employee Stock Purchase Plan.
	 
	9.	 	Development Agreement between the Company and Autoliv ASP, Inc. dated October 3, 2005.
	 
	10.	 	Manufacturing and Supply Agreement between the Company and Autoliv ASP dated November 2,
2007.
	 
	11.	 	Master Security Agreement between the Company and General Electric Capital Corporation dated
May 17, 2005, as amended on May 18, 2005.
	 
	12.	 	Promissory Note between the Company and General Electric Capital Corporation dated June 15,
2005.
	 
	13.	 	Promissory Note between the Company and General Electric Capital Corporation dated August 24,
2005.
	 
	14.	 	Warrant to Purchase shares of Series B Preferred Stock issued to Silicon Valley Bank dated
March 20, 2002.
	 
	15.	 	Warrant to Purchase shares of Series C Preferred Stock issued to Silicon Valley Bank dated
January 30, 2003, as amended on March 4, 2003.
	 
	16.	 	Warrant to Purchase shares of Series C Preferred Stock issued to Silicon Valley Bank dated
September 19, 2003.
	 
	17.	 	Warrant to Purchase shares of Series C Preferred Stock issued to Silicon Valley Bank dated
April 7, 2004.

 

			
	[ * ] =	 	 Certain confidential information contained in this document, marked by
brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.

 

 

	18.	 	Stock and Warrant Purchase Agreement between the Company and Biomedical Investment Fund Pte
Ltd. dated March 26, 2008.
	 
	19.	 	Warrant to Purchase shares of Common Stock issued to Biomedical Investment Fund Pte Ltd.
dated March 27, 2008.
	 
	20.	 	Common Stock Purchase Agreement between the Company and Azimuth Opportunity Ltd. dated March
31, 2009.

 

			
	[ * ] =	 	 Certain confidential information contained in this document, marked by
brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.

 

 

EXHIBIT 3

FORM OF CORPORATE GOVERNANCE LETTER AGREEMENT

[See attached.]

 

			
	[ * ] =	 	 Certain confidential information contained in this document, marked by
brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.

 

 

Symphony Allegro Holdings LLC

7361 Calhoun Place, Suite 325

Rockville, MD 20855

[                    ], 2009

Alexza Pharmaceuticals, Inc.

2091 Stierlin Court

Mountain View, CA 94043

Attention: Chief Executive Officer

Ladies and Gentlemen:

In connection with the acquisition of shares of Common Stock, par value $0.0001 per share (the
“Common Stock”), of Alexza Pharmaceuticals, Inc., a Delaware corporation (the
“Company”), by Symphony Allegro Holdings LLC, a Delaware limited liability company
(together with its permitted successors, assigns and transferees, the “Purchaser”),
pursuant to the terms of that certain Amended and Restated Purchase Option Agreement, dated as of
June 15, 2009, among the Company, the Purchaser and Symphony Allegro, Inc. (the “Amended and
Restated Purchase Option Agreement”), the Company and the Purchaser agree as follows:

          Section 1. Definitions. For purposes of this letter agreement, the following terms have
the respective meanings set forth below:

          “Affiliate” shall mean, with respect to any Person, (i) any Person directly or
indirectly controlling, controlled by or under common control with such Person, (ii) any officer,
director, general partner, member or trustee of such Person, or (iii) any Person who is an officer,
director, general partner, member or trustee of any Person described in clauses (i) or
(ii) of this sentence. For purposes of this definition, the terms “controlling,”
“controlled by” or “under common control with” shall mean the possession, direct or indirect, of
the power to direct or cause the direction of the management and policies of a Person or entity,
whether through the ownership of voting securities, by contract or otherwise, or the power to elect
at least 50% of the directors, managers, general partners, or persons exercising similar authority
with respect to such Person or entities.

          “Beneficially Owns” (including the terms “Beneficial Ownership” or
“Beneficially Owned”) shall mean beneficial ownership within the meaning of Rule 13d-3
under the Exchange Act.

          “Board” shall mean the Board of Directors of the Company.

 

			
	[ * ] =	 	 Certain confidential information contained in this document, marked by
brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.

 

 

          “Exchange Act” shall mean the U.S. Securities Exchange Act of 1934, as amended.

          “Person” shall mean any individual, partnership (whether general or limited), limited
liability company, corporation, trust, estate, association, nominee or other entity.

          Section 2. Standstill.  Except for the exercise of the Alexza Closing Warrants (as
defined in the Amended and Restated Purchase Option Agreement) and the acquisition of Alexza
Closing Warrant Shares (as defined in the Amended and Restated Purchase Option Agreement), for so
long as the Purchaser and its Affiliates Beneficially Own more than 10% of the Company’s
outstanding Common Stock, neither the Purchaser nor any of its Affiliates shall, without the prior
written consent of a majority of the independent members of the Board who are not Affiliated with
the Purchaser, in any manner, whether directly or indirectly:

          (a) make, effect, initiate, cause or participate in (i) any acquisition of Beneficial
Ownership of any securities of the Company or any securities of any subsidiary or other Affiliate
of the Company, (ii) any acquisition of any assets of the Company or any assets of any subsidiary
or other Affiliate of the Company, (iii) any tender offer, exchange offer, merger, business
combination, recapitalization, restructuring, liquidation, dissolution or extraordinary transaction
involving the Company or any subsidiary or other Affiliate of the Company, or involving any
securities or assets of the Company or any securities or assets of any subsidiary or other
Affiliate of the Company, or (iv) any “solicitation” of “proxies” (as those terms are used in the
proxy rules of the Securities and Exchange Commission (“SEC”)) or consents with respect to
any securities of the Company;

          (b) form, join or participate in a “group” (as defined in the Securities Exchange Act and the
rules promulgated thereunder) with respect to the Beneficial Ownership of any securities of the
Company;

          (c) without limiting any rights of the Purchaser pursuant to Section 5 hereof, act, alone or
in concert with others, to seek to control or influence the management, board of directors or
policies of the Company;

          (d) take any action that might require the Company to make a public announcement regarding any
of the types of matters set forth in clause “(a)” of this sentence;

          (e) agree or offer to take, or encourage or propose (publicly or otherwise) the taking of, any
action prohibited by clause “(a)”, “(b)”, “(c)” or “(d)” of this sentence;

          (f) assist, induce or encourage any other Person to take any action of the type prohibited by
clause “(a)”, “(b)”, “(c)”, “(d)” or “(e)” of this sentence;

 

			
	[ * ] =	 	 Certain confidential information contained in this document, marked by
brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.

2

 

          (g) enter into any discussions, negotiations, arrangement or agreement with any other Person
relating to any of the foregoing; or

          (h) request or propose that the Company or any of the Company’s Affiliates amend, waive or
consider the amendment or waiver of any provision set forth in this Section 2.

          Section 3. No Effect on Directors. Notwithstanding any of the foregoing, the
provisions set forth in Section 2 shall in no way limit the ability of any individual who is
serving as a director of the Company to take any actions (or to refrain from taking any actions) in
his or her capacity as a director of the Company.

          Section 4. Voting Agreement. In the event the Purchaser and its Affiliates
Beneficially Own more than 33% of the Company’s outstanding Common Stock, any shares of Common
Stock entitled to vote for the election of directors Beneficially Owned by the Purchaser and its
Affiliates in excess of 33% of the shares of Common Stock then outstanding, with respect to the
election or removal of directors only, shall be voted either, solely at the Purchaser’s election
(a) as recommended by the Board or (b)(i) in an election, in the same proportion with the votes of
shares of Common Stock voted in such election (excluding shares with respect to which the votes
were withheld, abstained or otherwise not cast) and not Beneficially Owned by the Purchaser
(excluding withheld shares and abstentions) or (ii) in a removal vote, in the same proportions as
all outstanding shares of Common Stock not Beneficially Owned by the Purchaser (including shares
with respect to which the votes were withheld, abstained or otherwise not cast), whether at an
annual or special meeting of stockholders of the Company, by written consent or otherwise. The
Purchaser shall retain its right to vote (or to withhold its vote) all of its shares on all other
matters.

          Section 5. Member of the Board. For so long as the Purchaser and its Affiliates
Beneficially Own more than 10% of the Company’s outstanding Common Stock, then, subject to
applicable law and the rules and regulations of the SEC and the NASDAQ Stock Market, the Company
will nominate and use its commercially reasonable efforts to cause to be elected and cause to
remain as a director on the Board one (1) individual designated by the Purchaser.

          Section 6. Representations.  Each party represents to the other that: (a) this letter
agreement has been duly authorized by all necessary corporate or partnership action, as the case
may be; and (b) this letter agreement is a valid and binding agreement of such party, enforceable
against it in accordance with its terms.

          Section 7. Specific Enforcement; Legal Effect. The parties hereto agree that any
breach of this letter agreement would result in irreparable injury to the other party and that
money damages would not be an adequate remedy for such breach. Accordingly, without prejudice to
the rights and remedies otherwise available under applicable law, either party shall

 

			
	[ * ] =	 	 Certain confidential information contained in this document, marked by
brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.

3

 

be entitled to specific performance and equitable relief by way of injunction or otherwise if
the other party breaches or threatens to breach any of the provisions of this letter agreement. It
is further understood and agreed that no failure or delay by either party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise of any right, power
or privilege hereunder. If any term, provision, covenant or restriction in this letter agreement
is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of
the terms, provisions, covenants and restrictions of this letter agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated, provided that the
parties hereto shall negotiate in good faith to attempt to place the parties in the same position
as they would have been in had such provision not been held to be invalid, void or unenforceable.
This letter agreement contains the entire agreement between the parties hereto concerning the
matters addressed herein. No modification of this letter agreement or waiver of the terms and
conditions hereof shall be binding upon either party hereto, unless approved in writing by each
such party; provided, however, that no waiver or amendment shall be effective as against the
Company unless such waiver or amendment is approved in writing by the vote of a majority of the
independent members of the Board who are not Affiliated with the Purchaser. This Agreement shall
be governed by and construed in accordance with the law of the State of New York.

          Section 8. Termination. This agreement shall continue in full force and effect from
the date hereof until such time as the Purchaser and its Affiliates Beneficially Own less than 10%
of the Company’s outstanding Common Stock.

          Section 9. Counterparts. This letter agreement may be executed in counterpart
(including by facsimile), each of which shall be deemed an original.

[Remainder of page left blank intentionally]

 

			
	[ * ] =	 	 Certain confidential information contained in this document, marked by
brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.

4

 

     If you are in agreement with the terms set forth above, please sign this letter agreement in
the space provided below and return an executed copy to the undersigned.

	 	 	 	 	 
	 	 	Very truly yours,
	 
	 	 	SYMPHONY ALLEGRO HOLDINGS LLC
	 
	 	 	 	 
	 

	 	By:
	 	Symphony Capital
Partners, L.P.,
	 

	 	 	 	its Manager
	 
	 

	 	By:
	 	Symphony Capital
GP, L.P.,
	 

	 	 	 	its General Partner
	 
	 

	 	By:
	 	Symphony GP,
LLC,
	 

	 	 	 	its General Partner

	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 	 	Name: Mark Kessel	 	 
	 	 	Title:   Managing Member	 	 

Confirmed and Agreed:

ALEXZA PHARMACEUTICALS, INC.

	 	 	 	 	 
	By:
	 	 	 	 
	Name:

	 	 

August J. Moretti
	 	 
	Title:

	 	Senior Vice President and	 	 
	 

	 	Chief Financial Officer	 	 

 

			
	[ * ] =	 	 Certain confidential information contained in this document, marked by
brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00160-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00160-of-00352.parquet"}]]