Exhibit 10.44

 

COMMON STOCK AND WARRANT PURCHASE AGREEMENT

 

THIS COMMON STOCK AND WARRANT PURCHASE AGREEMENT (“Agreement”) is made as of the
17th day of March 2006 by and among Sunesis Pharmaceuticals, Inc., a Delaware
corporation (the “Company”), and the other Persons set forth on the signature
pages hereto (each an “Investor” and collectively the “Investors”).

 

Recitals

 

A.            The Company and the Investors are executing and delivering this
Agreement in reliance upon the exemption from securities registration afforded
by the provisions of Regulation D (“Regulation D”), as promulgated by the
Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933,
as amended, and the rules and regulations promulgated thereunder (the
“Securities Act”);

 

B.            The Investors wish to purchase from the Company, and the Company
wishes to sell and issue to the Investors, upon the terms and subject to the
conditions set forth in this Agreement, an aggregate of 7,246,377 shares (the
“Shares”) of the Company’s common stock, par value $0.0001 per share (the
“Common Stock”) and warrants (the “Warrants”) to purchase an aggregate of
2,173,914 shares of Common Stock (subject to adjustment pursuant to Section 4 of
the Warrants) in the form of Exhibit A hereto for a purchase price of $6.2475
per Share and associated Warrant, for an aggregate purchase price of
$45,271,740.43, it being understood that the aggregate fair market value of the
warrants, if issued apart from the Shares, is $271,739.26;

 

C.            Contemporaneous with the sale of the Shares, the parties hereto
will execute and deliver a Registration Rights Agreement, in the form attached
hereto as Exhibit B (the “Registration Rights Agreement”), pursuant to which the
Company will agree to provide certain registration rights under the Securities
Act; and

 

D.            This Agreement shall be binding upon the Company and the Investors
only upon delivery of the signatures pages hereto by the Company and the
Investors.

 

Agreement

 

In consideration of the mutual promises made herein and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

 

1.             Definitions.  In addition to those terms defined above and
elsewhere in this Agreement, for the purposes of this Agreement, the following
terms shall have the meanings set forth below:

 

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“Affiliate” means, with respect to any Person, any other Person which directly
or indirectly through one or more intermediaries controls, is controlled by, or
is under common control with, such Person.

 

“Business Day” means a day, other than a Saturday or Sunday, on which banks in
New York City are open for the general transaction of business.

 

“Confidential Information” means trade secrets, confidential information and
know-how (including but not limited to ideas, formulae, compositions, processes,
procedures and techniques, research and development information, performance
specifications, support documentation, drawings, specifications, designs,
business and marketing plans, and supplier lists and related information).

 

“Effective Date” means the date on which the Registration Statement is declared
effective by the SEC.

 

“Effectiveness Deadline” means the date on which the Registration Statement is
required to be declared effective by the SEC under the terms of the Registration
Rights Agreement.

 

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

 

“Intellectual Property” means all of the following: (i) patents, patent
applications, patent disclosures and inventions (whether or not patentable and
whether or not reduced to practice); (ii) trademarks, service marks, trade
dress, trade names, corporate names, logos, slogans and Internet domain names,
together with all goodwill associated with each of the foregoing;
(iii) copyrights and copyrightable works; and (iv) registrations, applications
and renewals for any of the foregoing.

 

“Lockup Agreement” means a Lockup Agreement in the form of Exhibit C hereto.

 

“Material Adverse Effect” means an event, change or occurrence that,
individually or together with any other event, change or occurrence, has a
material adverse impact on the Company’s financial position, business, results
of operations or prospects, excluding any event, change or occurrence resulting
from the announcement or consummation of the transactions contemplated by the
Transaction Documents.

 

“Nasdaq” means The Nasdaq Stock Market, Inc.

 

“Permitted Liens” means (i) mechanics’, carriers’, or workmen’s, repairmen’s or
similar liens arising or incurred in the ordinary course of business, (ii) liens
for taxes, assessments and other governmental charges that are not due and
payable or which may hereafter be paid without penalty or which are being
contested in good faith by appropriate proceedings

 

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and (iii) other imperfections of title or encumbrances, if any, that do not,
individually or in the aggregate, materially impair the use or value of the
property to which they relate.

 

“Person” means an individual, corporation, partnership, limited liability
company, trust, business trust, association, joint stock company, joint venture,
sole proprietorship, unincorporated organization, governmental authority or any
other form of entity not specifically listed herein.

 

“Registration Statement” has the meaning set forth in the Registration Rights
Agreement.

 

“SEC Filings” has the meaning set forth in Section 4.6.

 

“Securities” means the Shares, the Warrants and the Warrant Shares.

 

“Subsidiary” of any Person means another Person, an amount of the voting
securities, other voting ownership or voting partnership interests of which is
sufficient to elect at least a majority of its Board of Directors or other
governing body (or, if there are no such voting interests, 50% or more of the
equity interests of which) is owned directly or indirectly by such first Person.

 

“Transaction Documents” means this Agreement, the Registration Rights Agreement
and the Warrants.

 

“Warrant Shares” mean the shares of Common Stock issuable upon exercise of the
Warrants (including shares of Common Stock issuable upon adjustment pursuant to
Section 4 of the Warrants).

 

2.             Purchase and Sale of the Shares and the Warrants.  Upon the terms
and subject to the conditions set forth in this Agreement, at the Closing, each
of the Investors shall, severally and not jointly, purchase, and the Company
shall sell and issue to the Investors, the Shares and the Warrants in the
respective amounts set forth below the Investors’ names on the signature
pages hereto.

 

3.             Closing.  The purchase and sale of the Shares and the Warrants
pursuant to Section 2 shall take place at the offices of Latham & Watkins LLP,
135 Commonwealth Drive, Menlo Park, California 94025 on March 17, 2006, or at
such other location and on such other date as the Company and the Investors
shall mutually agree (which time and place are designated as the “Closing”).  At
the Closing, the Company shall deliver to each Investor a certificate or
certificates representing the number of Shares and a Warrant for the number of
shares of Common Stock each as set forth below such Investor’s name on the
signature pages hereto against payment of the purchase price therefor by wire
transfer of immediately available funds to a bank account designated by the
Company.

 

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4.             Representations and Warranties of the Company.  The Company
hereby represents and warrants to the Investors that, except as disclosed in the
SEC Filings or as set forth in the schedules delivered herewith (collectively,
the “Disclosure Schedules”):

 

4. 1          Organization, Good Standing and Qualification.  The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has all requisite corporate power and authority to
carry on its business as now conducted and to own its properties.  The Company
is duly qualified to do business as a foreign corporation and is in good
standing in each jurisdiction in which the conduct of its business or its
ownership or leasing of property makes such qualification necessary, except
where the failure to so qualify, individually or in the aggregate, would not
have a Material Adverse Effect.  To the Company’s knowledge, no proceeding has
been instituted in any jurisdiction revoking, limiting or curtailing or seeking
to revoke, limit or curtail, such power and authority or qualification. The
Company has no Subsidiaries.

 

4.2           Authorization.  The Company has full corporate power and authority
and has taken all requisite action on the part of the Company, its officers,
directors and stockholders necessary for (i) the authorization, execution and
delivery of the Transaction Documents, (ii) the authorization of the performance
of all obligations of the Company hereunder or thereunder and (iii) the
authorization, issuance, sale and delivery of the Securities.  The Transaction
Documents constitute the legal, valid and binding obligations of the Company,
enforceable against the Company in accordance with their respective terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors’ rights generally.

 

4.3           Capitalization.  Schedule 4.3 sets forth as of the date hereof
(a) the authorized capital stock of the Company; (b) the number of shares of
capital stock issued and outstanding; (c) the number of shares of capital stock
available for issuance pursuant to the Company’s stock plans; and (d) the number
of shares of capital stock issuable and reserved for issuance pursuant to
securities exercisable for, or convertible into or exchangeable for any shares
of capital stock of the Company.  All of the issued and outstanding shares of
the Company’s capital stock have been duly authorized and validly issued and are
fully paid, nonassessable and free of preemptive rights.  No Person is entitled
to pre-emptive or similar statutory or contractual rights with respect to any
securities of the Company.  There are no outstanding warrants, options,
convertible securities or other rights, agreements or arrangements under which
the Company is obligated to issue equity securities.  Except as contemplated
under this Agreement, there are no contracts, commitments, understandings or
arrangements by which the Company is bound to issue additional shares of capital
stock of the Company or options, securities or rights convertible into shares of
capital stock of the Company. Except as provided in the Registration Rights
Agreement, no Person has the right to require the Company to register any
securities of the Company under the Securities Act, whether on a demand basis or
in connection with the registration of securities of the Company for its own
account or for the account of any other Person.  The issue and sale of the
Securities will not result in the right of any holder of Company securities to
adjust the exercise, conversion or exchange price under such securities.

 

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4.4           Valid Issuance.  The Shares and the Warrants have been duly and
validly authorized and, when issued and paid for pursuant to this Agreement,
will be validly issued, fully paid and nonassessable, and will be free of
encumbrances and restrictions (other than those created by the Investors),
except for restrictions on transfer set forth in the Transaction Documents or
imposed by applicable securities laws. The Warrant Shares have been reserved for
issuance and, upon issuance pursuant to the Warrants, will be duly and validly
authorized and fully paid and nonassessable.

 

4.5           Consents.  The execution, delivery and performance by the Company
of the Transaction Documents and the offer, issuance and sale of the Securities
and the Warrant Shares requires no consent of, action by or in respect of, or
filing with, any Person, governmental body, agency, or official other than
filings that have been made pursuant to applicable state securities laws and
post-sale filings pursuant to applicable state and federal securities laws which
the Company undertakes to file within the applicable time periods.

 

4.6           Delivery of SEC Filings.  The Company has made available to the
Investors through the EDGAR system, true and complete copies of (a) the
Company’s Registration Statement on Form S-1 filed with the SEC on September 27,
2005 including all exhibits thereto and documents incorporated by reference
therein (the “IPO Registration Statement”), (b) the Company’s Quarterly Report
on Form 10-Q for the quarter ended September 30, 2005 filed with the SEC on
November 14, 2005 including all exhibits thereto and documents incorporated by
reference therein and (c) the Company’s Current Reports on Form 8-K filed with
the SEC on November 14, 2005, January 6, 2006 and February 15, 2006 including
all exhibits thereto and documents incorporated by reference therein (the
“Periodic Filings” and, together with the IPO Registration Statement, the “SEC
Filings”).  The Periodic Filings are the only periodic filings required of the
Company pursuant to the Exchange Act through the date hereof.

 

4.7           Use of Proceeds.  The net proceeds of the sale of the Shares and
the Warrants hereunder shall be used by the Company for working capital and
general corporate purposes.

 

4.8           No Material Adverse Change.  Since September 30, 2005, there has
not been:

 

(i)            any change in the consolidated assets, liabilities, financial
condition or operating results of the Company from that reflected in the
financial statements included in the Company’s Quarterly Report on Form 10-Q for
the quarter ended September 30, 2005, except for changes in the ordinary course
of business which would not have, individually or in the aggregate, a Material
Adverse Effect;

 

(ii)           any declaration or payment of any dividend, or any authorization
or payment of any distribution, on any of the capital stock of the Company, or
any redemption or repurchase of any securities of the Company (other than in
connection with a termination of employment);

 

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(iii)          any material damage, destruction or loss to any assets or
properties of the Company;

 

(iv)          any waiver, not in the ordinary course of business, by the Company
of a material right or of a material debt owed to it;

 

(v)           any change or amendment to the Company’s Certificate of
Incorporation or Bylaws, or change to any material contract or arrangement by
which the Company is bound or to which its assets or properties is subject;

 

(vi)          any material labor difficulties or labor union organizing
activities with respect to employees of the Company;

 

(vii)         any transaction entered into by the Company other than in the
ordinary course of business;

 

(viii)        the loss of the services of any key employee, or material change
in the composition or duties of the senior management of the Company; or

 

(ix)           any other event or condition of any character that has had or
would reasonably be expected to have a Material Adverse Effect.

 

4.9           SEC Filings.  At the time of filing thereof, the SEC Filings
complied as to form in all material respects with the requirements of the
Exchange Act and did not contain any untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements made
therein, in the light of the circumstances under which they were made, not
misleading.

 

4.10         No Conflict, Breach, Violation or Default.  Neither the execution,
delivery and performance of the Transaction Documents by the Company nor the
consummation of any of the transactions contemplated hereby (including without
limitation the issuance and sale of the Securities) will conflict with or result
in violation of any of the terms and provisions of the Company’s Certificate of 
Incorporation or Bylaws, both as in effect on the date hereof or will give rise
to the right to terminate or accelerate the due date of any payment under or
conflict with or result in a breach of any term or provision of, or constitute a
default (or any event which with notice or lapse of time or both would
constitute a default) under, or require any consent or waiver under or result in
the execution or imposition of any lien, charge or encumbrance upon the
properties or assets of the Company pursuant to the terms of any indenture,
mortgage, deed of trust or other agreement or instrument to which the Company is
a party or by which the Company is bound or to which any of its assets or
properties is subject or any license, permit, statute, rule, regulation,
judgment, decree or order of any governmental agency or body or any court,
domestic or foreign, having jurisdiction over the Company or any of its assets
or properties, other than a conflict, breach or default that would not have a
Material Adverse Effect.

 

4.11         Tax Matters.  The Company has timely prepared and filed all tax
returns required to have been filed by the Company with all appropriate
governmental agencies and

 

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timely paid all taxes shown thereon or otherwise owed by it, except as would not
have a Material Adverse Effect.  The charges, accruals and reserves on the books
of the Company in respect of taxes for all fiscal periods are adequate in all
material respects, and there are no material unpaid assessments against the
Company.  All taxes and other assessments and levies that the Company is
required to withhold or to collect for payment have been duly withheld and
collected and paid to the proper governmental entity or third party when due. 
There are no tax liens or claims pending or, to the Company’s knowledge,
threatened against the Company or any of its assets or property, other than
Permitted Liens.  There are no tax audits or investigations pending, which if
adversely determined would result in a Material Adverse Effect. There are no
outstanding tax sharing agreements or other such arrangements between the
Company and any other Person.  The Company does not have any deferred
compensation arrangements and has not paid or is not required to pay any
deferred compensation which would be subject to Section 409A of the Internal
Revenue Code.

 

4.12         Title to Properties.  The Company has good and marketable title to
all properties and assets owned by it, in each case free from liens,
encumbrances and defects, other than Permitted Liens.  The Company holds any
leased real or Personal property under valid and enforceable leases.  The
Company does not own any real property.

 

4.13         Certificates, Authorities and Permits.  The Company possesses
adequate certificates, approvals, authorities or permits (“Permits”) issued by
governmental agencies or bodies necessary to own, lease and license its assets
and properties and conduct the business now operated by it, all of which are
valid and in full force and effect, except where the lack of such Permits,
individually or in the aggregate, would not have a Material Adverse Effect.  The
Company has performed in all material respects all of its material obligations
with respect to such Permits and no event has occurred that allows, or after
notice or lapse of time, would allow, revocation or termination thereof. The
Company has not received any written notice of proceedings relating to the
revocation or modification of any such certificate, authority or permit that, if
determined adversely to the Company, would, individually or in the aggregate,
have a Material Adverse Effect.

 

4.14         Labor Matters.

 

(a)           The Company is not a party to or bound by any collective
bargaining agreement.  The Company has not violated in any material respect any
laws, regulations, orders or contract terms, affecting the collective bargaining
rights of employees, labor organizations or any laws, regulations or orders
affecting employment discrimination, equal opportunity employment or employees’
health, safety, welfare, wages and hours.

 

(b)           (i) There are no labor disputes existing, or to the Company’s
knowledge, threatened, involving strikes, slow-downs, work stoppages, job
actions, disputes, lockouts or any other disruptions of or by the Company’s
employees, (ii) there are no unfair labor practices or petitions for election
pending or, to the Company’s knowledge, threatened before the National Labor
Relations Board or any other federal, state or local labor commission relating
to the Company’s employees, (iii) no demand for recognition or certification
heretofore made by any labor organization or group of employees is pending with
respect to the Company and (iv) to the

 

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Company’s knowledge, the Company enjoys good labor and employee relations with
its employees.

 

(c)           The Company is in compliance in all material respects with
applicable laws respecting employment (including laws relating to classification
of employees and independent contractors) and employment practices, terms and
conditions of employment, wages and hours, and immigration and naturalization. 
No claims are pending against the Company before the Equal Employment
Opportunity Commission or any other administrative body or in any court
asserting any violation of Title VII of the Civil Rights Act of 1964, the Age
Discrimination Act of 1967, 42 U.S.C. §§ 1981 or 1983 or any other federal,
state or local law, statute or ordinance barring discrimination in employment.

 

(d)           The Company is not a party to, or bound by, any employment or
other contract or agreement that contains any severance, termination pay or
change of control liability or obligation, including, without limitation, any
“excess parachute payment,” as defined in Section 280G(b) of the Internal
Revenue Code of 1986, as amended.

 

4.15         Intellectual Property.

 

(a)           To the Company’s knowledge, all Intellectual Property of the
Company is valid and enforceable.  No Intellectual Property owned or licensed by
the Company that is necessary for the conduct of Company’s business as currently
conducted or as proposed to be conducted as described in the SEC Filings is
involved in any cancellation, dispute or litigation, and, to the Company’s
knowledge, no such action is threatened.  No issued patent owned by the Company
is involved in any interference, reissue, re-examination or opposition
proceeding.

 

(b)           All of the in-bound licenses and sublicenses and consent, royalty
or other agreements concerning Intellectual Property which are necessary for the
conduct of the Company’s business as currently conducted and as proposed to be
conducted as described in the SEC Filings to which the Company is a party (other
than  generally commercially available, non-custom, off-the-shelf software
application programs having a retail acquisition price of less than $50,000 per
license) (collectively, “In-Bound License Agreements”) are, to the Company’s
knowledge, valid and binding obligations of the Company, enforceable in
accordance with their terms, except to the extent that enforcement thereof may
be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or other similar laws affecting the enforcement of creditors’ rights
generally, and, to the Company’s knowledge, the Company is not in material
breach of any of its obligations under any such In-Bound License Agreements.

 

(c)           The Company owns or has the valid right to use all of the
Intellectual Property that is necessary for the conduct of the Company’s
business as currently conducted and as proposed to be conducted as described in
the SEC Filings and for the ownership, maintenance and operation of the
Company’s properties and assets, free and clear of all liens, encumbrances,
adverse claims or, with respect to Intellectual Property owned by the Company,
obligations to license such Intellectual Property, other than licenses of the
Intellectual Property owned by the Company that are entered into in the ordinary
course of the Company’s business.  To the Company’s knowledge, the Company has a
valid and enforceable right to use all third party

 

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Intellectual Property and Confidential Information used or held for use in the
business of the Company.

 

(d)           To the Company’s knowledge, the conduct of the Company’s business
as currently conducted or as proposed to be conducted as described in the SEC
Filings, the use or exploitation of any Intellectual Property owned by the
Company, or to its knowledge, the use or exploitation of any Intellectual
Property licensed by the Company does not infringe, misappropriate or otherwise
materially impair or conflict with (collectively, “Infringe”) any Intellectual
Property rights of any third party and, to the Company’s knowledge, the
Intellectual Property owned by the Company which is necessary for the conduct of
Company’s business as currently conducted or as proposed to be conducted as set
forth in the SEC Filings is not being Infringed by any third party.  There is no
litigation, court order, claim or assertion pending or outstanding or, to the
Company’s knowledge, threatened, that seeks to limit or challenge the ownership,
use, validity or enforceability of any Intellectual Property owned or licensed
by the Company or the Company’s use of any Intellectual Property owned by a
third party.

 

(e)           To the Company’s knowledge, the consummation of the transactions
contemplated hereby and by the other Transaction Documents will not result in
the (i) loss, material impairment of or material restriction on any of the
Intellectual Property or Confidential Information owned by the Company which is
necessary for the conduct of Company’s business as currently conducted or as
proposed to be conducted as set forth in the SEC Filings or (ii) material breach
of any In-Bound License Agreement.

 

(f)            The Company has taken reasonable steps to protect the Company’s
rights in its Intellectual Property and Confidential Information.  Each employee
and consultant who has access to the Company’s Confidential Information
necessary for the conduct of Company’s business as currently conducted has
executed an agreement to maintain the confidentiality of such Confidential
Information.  To the Company’s knowledge, and except pursuant to non-disclosure
agreements entered into between the Company and third parties in the ordinary
course of business, there has been no disclosure of the Company’s Intellectual
Property or Confidential Information to any third party.  To the Company’s
knowledge, there have been no misappropriations or infringements by any Person
of any Intellectual Property used in the conduct or operation of the Company’s
business.

 

4.16         Environmental Matters.  The Company is not in violation of any
statute, rule, regulation, decision or order of any governmental agency or body
or any court, domestic or foreign, relating to the use, disposal or release of
hazardous or toxic substances or relating to the protection or restoration of
the environment or human exposure to hazardous or toxic substances
(collectively, “Environmental Laws”).  The Company does not own or operate any
real property contaminated with any substance that is subject to any
Environmental Laws, is not liable for any off-site disposal or contamination
pursuant to any Environmental Laws, and is not subject to any claim relating to
any Environmental Laws, which violation, contamination, liability or claim would
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.  There is no pending or, to the Company’s knowledge, threatened
investigation that might lead to such a claim.

 

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4.17         Litigation.  There are no pending or, to the Company’s knowledge,
threatened actions, suits, proceedings, inquiries or investigations against or
affecting the Company or any of its properties or any of the Company’s officers
and directors in their capacities as such.

 

4.18         Financial Statements.  The financial statements included in each
SEC Filing present fairly, in all material respects, the financial position of
the Company as of the dates shown and its results of operations and cash flows
for the periods shown, and such financial statements have been prepared in
conformity with United States generally accepted accounting principles applied
on a consistent basis (“GAAP”) (except as may be disclosed therein or in the
notes thereto, and, in the case of quarterly financial statements, as permitted
by Form 10-Q under the Exchange Act).  Except as set forth in the financial
statements of the Company included in the SEC Filings filed prior to the date
hereof, the Company has not incurred any liabilities, contingent or otherwise,
except those incurred in the ordinary course of business, consistent with past
practices since the date of such financial statements, none of which,
individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect.

 

4.19         Insurance Coverage.  The Company maintains in full force and effect
insurance coverage that is customary for comparably situated companies for the
business being conducted and properties owned or leased by the Company.

 

4.20         Compliance with Nasdaq Continued Listing Requirements.  The Company
is in compliance with applicable Nasdaq continued listing requirements.  The
Company has not received any written notice with respect to the delisting of the
Common Stock from the Nasdaq National Market.

 

4.21         Brokers and Finders.  Other than Cowen & Co.. LLC, the fees of
which shall be paid by the Company, no Person will have, as a result of the
transactions contemplated by the Transaction Documents, any valid right,
interest or claim for any commission, fee or other compensation pursuant to any
agreement, arrangement or understanding entered into by or on behalf of the
Company.

 

4.22         No Directed Selling Efforts or General Solicitation.  Neither the
Company nor any Person acting on its behalf has conducted any general
solicitation or general advertising (as those terms are used in Regulation D
under the Securities Act) in connection with the offer or sale of the
Securities.

 

4.23         No Integrated Offering.  Neither the Company nor any Person acting
on its behalf has, directly or indirectly, made any offers or sales of any
Company security or solicited any offers to buy any security, under
circumstances that would adversely affect reliance by the Company on
Section 4(2) of the Securities Act for the exemption from registration for the
transactions contemplated hereby or would require registration of the Securities
under the Securities Act or would be integrated under the Nasdaq Marketplace
Rules.

 

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4.24         Private Placement.  Subject to the accuracy of each Investor’s
representations in Section 5 hereof, the offer and sale of the Securities to the
Investors as contemplated hereby is exempt from the registration requirements of
the Securities Act.

 

4.25         Questionable Payments.  Neither the Company nor, to the Company’s
knowledge, any of its directors, officers, employees, agents or other Persons
acting on behalf of the Company, has on behalf of the Company or in connection
with its business: (a) used any corporate funds for unlawful contributions,
gifts, entertainment or other unlawful expenses relating to political activity;
(b) made any direct or indirect unlawful payments to any governmental officials
or employees from corporate funds; (c) established or maintained any unlawful or
unrecorded fund of corporate monies or other assets; (d) made any false or
fictitious entries on the books and records of the Company; or (e) made any
unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful
payment of any nature.

 

4.26         Transactions with Affiliates.  None of the officers or directors of
the Company and, to the Company’s knowledge, none of the employees of the
Company is presently a party to any transaction with the Company (other than as
holders of stock options and/or warrants, and for services as employees,
officers and directors), including any contract, agreement or other arrangement
providing for the furnishing of services to or by, providing for rental of real
or Personal property to or from, or otherwise requiring payments to or from any
officer, director or such employee or, to the Company’s knowledge, any entity in
which any officer, director, or any such employee has a substantial interest or
is an officer, director, trustee or partner.

 

4.27         Internal Controls.  The Company is in material compliance with the
provisions of the Sarbanes-Oxley Act of 2002 currently applicable to the
Company.  The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are executed in
accordance with management’s general or specific authorizations,
(ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain asset accountability,
(iii) access to assets is permitted only in accordance with management’s general
or specific authorization, and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences. The Company has established disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15 and 15d-15) for
the Company and designed such disclosure controls and procedures to ensure that
material information relating to the Company is made known to the certifying
officers by others within those entities.  The Company’s certifying officers
have evaluated the effectiveness of the Company’s controls and procedures as of
the end of the period covered by the most recently filed periodic report under
the Exchange Act (such date, the “Evaluation Date”).  The Company presented in
its most recently filed periodic report under the Exchange Act the conclusions
of the certifying officers about the effectiveness of the disclosure controls
and procedures based on their evaluations as of the Evaluation Date.  Since the
Evaluation Date, there have been no significant changes in the Company’s
internal controls (as such term is defined in Item 307(b) of Regulation S-K) or,
to the Company’s knowledge, in other factors that could significantly affect the
Company’s internal controls.  The books, records and accounts of the Company
accurately and fairly reflect, in all material respects, the transactions in,
and dispositions of, the assets of,

 

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and the results of operations of, the Company.  The Company maintains and will
continue to maintain a standard system of accounting established and
administered in accordance with GAAP and the applicable requirements of the
Exchange Act.

 

4.28         Independent Accountants.  Ernst & Young LLP is the Company’s
independent registered public accounting firm as required by the Exchange Act,
and the rules and regulations of the SEC thereunder.

 

4.29         Investment Company.  The Company is not and, after giving effect to
the offering and sale of the Securities, will not be an “investment company”
within the meaning of the Investment Company Act of 1940, as amended.

 

4.30         Regulatory Compliance.  The human clinical trials, animal studies
and other preclinical tests conducted by the Company or in which the Company has
participated or that are described in the SEC Filings or the results of which
are referred to in the SEC Filings, and such studies and tests conducted on
behalf of the Company or that the Company intends to rely on in support of
regulatory approval by the United States Food and Drug Administration (the
“FDA”) or foreign regulatory agencies, were and, if still pending, are being
conducted in all material respects in accordance with experimental protocols,
procedures and controls generally used by qualified experts in the preclinical
or clinical study of new drugs; the descriptions of the results of such studies,
test and trials contained in the SEC Filings are accurate and complete in all
material respects, and, except as set forth in the SEC Filings, the Company has
no knowledge of any other trials, studies or tests, the results of which the
Company believes reasonably call into question the clinical trial results
described or referred to in the SEC Filings when viewed in the context in which
such results are described and the clinical state of development; and the
Company has not received any notices or correspondence from the FDA or any other
domestic or foreign governmental agency requiring the termination, suspension or
material modification, other than modifications customarily implemented during
the drug development process, of any preclinical tests or clinical trials
conducted by or on behalf of the Company or in which the Company has
participated that are described in the SEC Filings or the results of which are
referred to in the SEC Filings.

 

4.31         Material Contracts.  All material documents, contracts or other
agreements of the Company required to be filed with the SEC have been filed with
the SEC and are included in the exhibits to the SEC Filings.  The description of
the contracts, documents or other agreements contained in the SEC Filings (as
the case may be) reflect in all material respects the terms of the underlying
contract, document or other agreement.   Each such contract, document or other
agreement is in full force and effect and is valid and enforceable by and
against the Company in accordance with its terms.  The Company is not in default
in the observance or performance of any term or obligation to be performed by it
under any such agreement, and no event has occurred which with notice or lapse
of time or both would constitute such a default, in any such case which default
or event, individually or in the aggregate, would result in a Material Adverse
Effect.

 

5.             Representations and Warranties of the Investors.  Each of the
Investors hereby, severally and not jointly, represents and warrants to the
Company that:

 

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5.1           Organization and Existence.  Such Investor is a validly existing
corporation, limited partnership or limited liability company and has all
requisite corporate, partnership or limited liability company power and
authority to invest in the Securities pursuant to this Agreement.

 

5.2           Authorization.  The execution, delivery and performance by such
Investor of the Transaction Documents have been duly authorized, and the
Transaction Documents constitute the valid and legally binding obligations of
such Investor, enforceable against such Investor in accordance with their
respective terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability, relating
to or affecting creditors’ rights generally.

 

5.3           Purchase Entirely for Own Account.  The Securities to be received
by such Investor hereunder will be acquired for such Investor’s own account, not
as nominee or agent, and not with a view to the resale or distribution of any
part thereof in violation of the Securities Act, and such Investor has no
present intention of selling, granting any participation in, or otherwise
distributing the same in violation of the Securities Act.  Such Investor is not
a broker-dealer registered with the SEC under the Exchange Act or an entity
engaged in a business that would require it to be so registered.

 

5.4           Investment Experience.  Such Investor acknowledges that it can
bear the economic risk and complete loss of its investment in the Securities and
has such knowledge and experience in financial or business matters that it is
capable of evaluating the merits and risks of the investment in the Securities
contemplated hereby.

 

5.5           Disclosure of Information.  Such Investor has had an opportunity
to receive all information related to the Company requested by it and to ask
questions of and receive answers from the Company regarding the Company, its
business and the terms and conditions of the offering of the Securities.  Such
Investor acknowledges receipt of copies of the SEC Filings.

 

5.6           Restricted Securities.  Such Investor understands that the
Securities are characterized as “restricted securities” under the U.S. federal
securities laws inasmuch as they are being acquired from the Company in a
transaction not involving a public offering and that under such laws and
applicable regulations such securities may be resold without registration under
the Securities Act only in certain limited circumstances.

 

5.7           Legends.  It is understood that, except as provided below,
certificates evidencing the Securities may bear the following or any similar
legend:

 

(a)           “The securities represented hereby have not been registered under
the Securities Act of 1933, as amended (the “Securities Act”), or any state
securities laws.  The securities represented hereby may not be transferred
unless (i) such securities have been registered for sale pursuant to the
Securities Act, (ii) such securities may be sold pursuant to Rule 144(k), or
(iii) the Company has received an opinion of counsel reasonably satisfactory to
it

 

13

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that such transfer may lawfully be made without registration under the
Securities Act or qualification under applicable state securities laws.”

 

(b)           If required by the authorities of any state in connection with the
issuance of sale of the Securities, the legend required by such state authority.

 

5.8           Accredited Investor.  Such Investor is an accredited investor as
defined in Rule 501(a) of Regulation D, as amended, under the Securities Act.

 

5.9           No General Solicitation.  Such Investor did not learn of the
investment in the Securities as a result of any public advertising or general
solicitation.

 

5.10         Brokers and Finders.  No Person will have, as a result of the
transactions contemplated by the Transaction Documents, any valid right,
interest or claim against or upon the Company or an Investor for any commission,
fee or other compensation pursuant to any agreement, arrangement or
understanding entered into by or on behalf of such Investor.

 

5.11         Prohibited Transactions.  During the last thirty (30) days prior to
the date hereof, neither such Investor nor any Affiliate of such Investor which
(x) had knowledge of the transactions contemplated hereby, (y) has or shares
discretion relating to such Investor’s investments or trading or information
concerning such Investor’s investments, including in respect of the Securities,
or (z) is subject to such Investor’s review or input concerning such Affiliate’s
investments or trading (collectively, “Trading Affiliates”) has, directly or
indirectly, (a) acquired, agreed to acquired (other than pursuant to this
Agreement), offered for sale, sold, pledged or otherwise disposed of any Common
Stock, (b) effected or agreed to effect any short sale, whether or not against
the box, established any “put equivalent position” (as defined in
Rule 16a-1(h) under the Exchange Act) with respect to the Common Stock, granted
any other right (including, without limitation, any put or call option) with
respect to the Common Stock or with respect to any security that includes,
relates to or derived any significant part of its value from the Common Stock or
otherwise sought to hedge its position in the Shares or (c) entered into any
swap or other derivatives transaction that transfers to another, in whole or in
part, any of the economic benefits or risks of ownership of any securities of
the Company, whether any such transaction described in clauses (a), (b) or
(c) was or is to be settled by delivery of securities of the Company, other
securities, cash or otherwise (each, a “Prohibited Transaction”).  Prior to the
earliest to occur of (i) the termination of this Agreement, (ii) the Effective
Date or (iii) the Effectiveness Deadline, such Investor shall not, and shall
cause its Trading Affiliates not to, engage, directly or indirectly, in a
Prohibited Transaction.  Such Investor acknowledges that the representations,
warranties and covenants contained in this Section 5.11 are being made for the
benefit of the Investors as well as the Company and that each of the other
Investors shall have an independent right to assert any claims against such
Investor arising out of any breach or violation of the provisions of this
Section 5.11.

 

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6.             Conditions to Closing.

 

6.1           Conditions to the Investors’ Obligations. The obligation of each
Investor to purchase the Shares and the Warrants at the Closing is subject to
the satisfaction, on or prior to the Closing Date, of the following conditions,
any of which may be waived by such Investor (as to itself only):

 

(a)           The representations and warranties made by the Company in
Section 4 hereof qualified as to materiality shall be true and correct on the
date hereof and on the Closing Date (except to the extent any such
representation or warranty expressly speaks as of a specific date, in which case
such representation or warranty shall be true and correct as of such date), and
the representations and warranties made by the Company in Section 4 hereof not
qualified as to materiality shall be true and correct in all material respects
on the date hereof and on the Closing Date (except to the extent any such
representation or warranty expressly speaks as of a specific date, in which case
such representation or warranty shall be true and correct in all material
respects as of such specific date).  The Company shall have performed in all
material respects all obligations and covenants herein required to be performed
by it on or prior to the Closing Date.  The Company shall have delivered a
certificate, executed on behalf of the Company by its Chief Executive Officer or
its Chief Financial Officer, dated as of the Closing Date, certifying to the
fulfillment of the condition specified in this Section 6.1(a).

 

(b)           The Company shall have obtained any and all consents, permits,
approvals, registrations and waivers necessary or appropriate for consummation
of the purchase and sale of the Securities and the consummation of the other
transactions contemplated by the Transaction Documents to be consummated on or
prior to the Closing Date, all of which shall be in full force and effect.

 

(c)           The Company shall have executed and delivered the Transaction
Documents.

 

(d)           No judgment, writ, order, injunction, award or decree of or by any
court, or judge, justice or magistrate, including any bankruptcy court or judge,
or any order of or by any governmental authority, shall have been issued, and no
action or proceeding shall have been instituted by any governmental authority,
enjoining or preventing the consummation of the transactions contemplated by the
Transaction Documents.

 

(e)           The Company shall have delivered a certificate, executed on behalf
of the Company by its Secretary, dated as of the Closing Date, certifying the
resolutions adopted by the Board of Directors of the Company approving the
transactions contemplated by the Transaction Documents, certifying the current
versions of the Certificate of Incorporation and Bylaws of the Company and
certifying as to the signatures and authority of Persons signing the Transaction
Documents and related documents on behalf of the Company.

 

(f)            The Investors shall have received an opinion from Latham &
Watkins LLP, the Company’s counsel, dated as of the Closing Date, in the form
attached hereto as Exhibit D.

 

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(g)           No stop order or suspension of trading shall have been imposed by
Nasdaq, the SEC or any other governmental or regulatory body with respect to
public trading in the Common Stock. The Company shall not have received notice
of any delisting on Nasdaq or that it is violation of any Nasdaq rule,
regulation or interpretation which could lead to delisting.

 

(h)           The aggregate purchase price for the Shares and the Warrants shall
be at least $40,000,000, of which at least $17,000,000 and not more than
$20,000,000 of the aggregate purchase price shall represent investment by Alta
BioPharma Partners III, L.P., Alta BioPharma Partners III GmbH & Co.
Beteiligungs KG and Alta Embarcadero BioPharma Partners III, LLC (collectively,
“Alta BioPharma Partners”) and Persons that are (i) stockholders of the Company
as of the date hereof and (ii) affiliated with members of the board of
directors.

 

(i)            The Company’s delivery (i) to its transfer agent of  irrevocable
instructions to issue and deliver to each Investor (or in such nominee name(s)
as designated by such Investor in writing) certificates evidencing such number
of Shares as set forth on the signature pages to this Agreement, and (ii) duly
executed copies of the Warrants to the Investor.

 

(j)            The Company’s delivery to the Investors of an executed Lockup
Agreement from Venrock Associates, Warburg Pincus and each of the Company’s
directors and executive officers.

 

(k)           The Nondisclosure Agreement dated as of January 25, 2006 between
Alta BioPharma Partners and the Company shall be amended or terminated, as
mutually agreeable to Alta BioPharma Partners and the Company, to permit the
transactions contemplated by this Agreement.

 

6.2           Conditions to Obligations of the Company. The Company’s obligation
to sell and issue the Shares and the Warrants at the Closing is subject to the
satisfaction on or prior to the Closing Date of the following conditions, any of
which may be waived by the Company:

 

(a)           The representations and warranties made by the Investors in
Section 5 hereof shall be true and correct in all material respects when made
and as of the Closing Date with the same force and effect as if they had been
made on and as of said date (except to the extent any such representation or
warranty expressly speaks as of a specific date, in which case such
representation or warranty shall be true and correct in all material respects as
of such specific date).

 

(b)           The Investors shall have executed and delivered this Agreement and
the Registration Rights Agreement.

 

(c)           No judgment, writ, order, injunction, award or decree of or by any
court, or judge, justice or magistrate, including any bankruptcy court or judge,
or any order of or by any governmental authority, shall have been issued, and no
action or proceeding shall have been instituted by any governmental authority,
enjoining or preventing the consummation of the transactions contemplated by the
Transaction Documents.

 

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(d)           The Investors shall have delivered the Purchase Price for the
Shares and the Warrants to the Company.

 

6.3           Termination of Obligations to Effect Closing; Effects.  The
obligation of the Company, on the one hand, and the Investors, on the other
hand, to effect the Closing shall terminate as follows:

 

(a)           Upon the mutual written consent of the Company and the Investors;

 

(b)           By the Company if any of the conditions set forth in Section 6.2
shall have become incapable of fulfillment, and shall not have been waived by
the Company;

 

(c)           By an Investor (with respect to itself only) if any of the
conditions set forth in Section 6.1 shall have become incapable of fulfillment,
and shall not have been waived by the Investor; or

 

(d)           By either the Company or any Investor (with respect to itself
only) if the Closing has not occurred on or prior to April 30, 2006;

 

provided, however, that, except in the case of clause (i) above, the party
seeking to terminate its obligation to effect the Closing shall not then be in
breach of any of its representations, warranties, covenants or agreements
contained in this Agreement if such breach has resulted in the circumstances
giving rise to such party’s seeking to terminate its obligation to effect the
Closing.

 

7.             Covenants and Agreements.

 

7.1           No Conflicting Agreements.  The Company will not take any action,
enter into any agreement or make any commitment that would conflict or interfere
in any material respect with the Company’s obligations to the Investors under
the Transaction Documents.

 

7.2           Insurance.  The Company shall not materially reduce the insurance
coverages described in Section 4.19.

 

7.3           Compliance with Laws.  The Company will comply in all material
respects with all applicable laws, rules, regulations, orders and decrees of all
governmental authorities.

 

7.4           Listing of Underlying Shares and Related Matters.  Promptly
following the date hereof, the Company shall take all necessary action to cause
the Shares and the Warrant Shares to be listed on the Nasdaq National Market. 
The Company will use commercially reasonable efforts to continue the listing and
trading of its Common Stock on the Nasdaq National Market and, in accordance,
therewith, will use commercially reasonable efforts to comply in all respects
with the Company’s reporting, filing and other obligations under the bylaws or
rules of such market or exchange, as applicable.

 

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7.5           Termination of Covenants.  The provisions of Sections 7.1 through
7.4 shall terminate and be of no further force and effect on the date on which
the Company’s obligations under the Registration Rights Agreement to register or
maintain the effectiveness of any registration covering the Registrable
Securities (as such term is defined in the Registration Rights Agreement) shall
terminate.

 

7.6           Removal of Legends.   Upon the earlier of (i) the sale pursuant to
the Registration Statement and receipt by the Company or its agents of the
Investor’s written confirmation that such Shares or the Warrant Shares were
disposed of in compliance with the prospectus delivery requirements of the
Securities Act or (ii) Rule 144(k) under the Securities Act becoming available
for the resale of the Investor’s Shares or the Warrant Shares, the Company shall
within three (3) Business Days of an Investor’s written request, cause
certificates evidencing the Investor’s Shares or Warrant Shares to be replaced
with certificates which do not bear such restrictive legends.

 

7.7           Release From Lockup Agreement.  Without the prior written consent
of Alta BioPharma Partners, the Company shall not release any Person from his,
her or its respective obligations under any Lockup Agreement.

 

8.             Survival and Indemnification.

 

8.1           Survival.  The representations, warranties, covenants and
agreements contained in this Agreement shall survive the Closing of the
transactions contemplated by this Agreement for a period of two years, except as
otherwise expressly provided in this Agreement.

 

8.2           Indemnification.  The Company agrees to indemnify and hold
harmless each Investor and its Affiliates and their respective directors,
officers, employees and agents and each person who controls an Investor within
the meaning of the Securities Act from and against any and all losses, claims,
damages, liabilities and expenses (including without limitation reasonable
attorneys’ fees and disbursements and other expenses incurred in connection with
investigating, preparing or defending any action, claim or proceeding, pending
or threatened and the costs of enforcement thereof) (collectively, “Losses”) to
which such Person may become subject as a result of any breach of
representation, warranty, covenant or agreement made by or to be performed on
the part of the Company under the Transaction Documents.  Each Investor agrees,
severally and not jointly, to indemnify and hold harmless the Company and its
directors, officers, employees and agents from and against any and all Losses to
which such Person may become subject as a result of any breach of
representation, warranty, covenant or agreement made by or to be performed on
the part of such Investor under the Transaction Documents.

 

8.3           Conduct of Indemnification Proceedings.  Any Person entitled to
indemnification hereunder shall (i) give prompt notice to the indemnifying party
of any claim with respect to which it seeks indemnification and (ii) permit such
indemnifying party to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party; provided that any Person entitled to
indemnification hereunder shall have the right to employ separate

 

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counsel and to participate in the defense of such claim, but the fees and
expenses of such counsel shall be at the expense of such Person unless (a) the
indemnifying party has agreed to pay such fees or expenses, or (b) the
indemnifying party shall have failed to assume the defense of such claim within
five (5) Business Days after written notice thereof and employ counsel
reasonably satisfactory to such Person or (c) in the reasonable judgment of any
such Person, considering the advice of counsel, a conflict of interest exists
between such Person and the indemnifying party with respect to such claims (in
which case, if the Person notifies the indemnifying party in writing that such
Person elects to employ separate counsel at the expense of the indemnifying
party, the indemnifying party shall not have the right to assume the defense of
such claim on behalf of such Person); and provided, further, that the failure of
any indemnified party to give notice as provided herein shall not relieve the
indemnifying party of its obligations hereunder, except to the extent that such
failure to give notice shall materially adversely affect the indemnifying party
in the defense of any such claim or litigation, but the omission so to deliver
notice to the indemnifying party will not relieve it of any liability that it
may have to any indemnified party otherwise than under this Section 8.  It is
understood that the indemnifying party shall not, in connection with any
proceeding in the same jurisdiction, be liable for fees or expenses of more than
one additional firm of attorneys at any time for all such indemnified parties. 
No indemnifying party will, except with the consent of the indemnified party,
consent to entry of any judgment or enter into any settlement that does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to such indemnified party of a release from all liability in respect of such
claim or litigation.

 

9.             Miscellaneous.

 

9.1           Successors and Assigns.  This Agreement may not be assigned by a
party hereto without the prior written consent of the Company or the Investors,
as applicable, provided, however, that an Investor may assign its rights and
delegate its duties hereunder in whole or in part to an Affiliate acquiring some
or all of its Shares or Warrant Shares after notice duly given by such Investor
to the Company, provided that no such assignment or obligation shall affect the
obligations of such Investor hereunder.  The provisions of this Agreement shall
inure to the benefit of and be binding upon the respective permitted successors
and assigns of the parties.  Nothing in this Agreement, express or implied, is
intended to confer upon any party other than the parties hereto or their
respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.

 

9.2           Counterparts; Faxes.  This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.  This Agreement may also
be executed via facsimile, which shall be deemed an original.

 

9.3           Titles and Subtitles.  The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.

 

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9.4           Notices.  Unless otherwise provided, any notice required or
permitted under this Agreement shall be given in writing and shall be deemed
effectively given as hereinafter described (i) if given by Personal delivery,
then such notice shall be deemed given upon such delivery, (ii) if given by
telex or telecopier, then such notice shall be deemed given upon receipt of
confirmation of complete transmittal, (iii) if given by mail, then such notice
shall be deemed given upon the earlier of (A) receipt of such notice by the
recipient or (B) three days after such notice is deposited in first class mail,
postage prepaid, and (iv) if given by an internationally recognized overnight
air courier, then such notice shall be deemed given one Business Day after
delivery to such carrier.  All notices shall be addressed to the party to be
notified at the address as follows, or at such other address as such party may
designate by ten days’ advance written notice to the other party:

 

If to the Company:

 

 

 

Sunesis Pharmaceuticals, Inc.

 

341 Oyster Point Boulevard

 

South San Francisco, California 94080

 

Attention: General Counsel

 

Fax: (650) 266-3505

 

 

 

With a copy to:

 

 

 

Latham & Watkins LLP

 

135 Commonwealth Drive

 

Menlo Park, California 94025

Attention:

Alan Mendelson

 

William Davisson

Fax: (650) 463-2600

 

If to the Investors, to the addresses set forth on the signature pages hereto.

 

9.5           Expenses.  The parties hereto shall pay their own costs and
expenses in connection herewith, provided that the Company shall pay the
reasonable fees and expenses, not to exceed $50,000 in the aggregate, of Cooley
Godward LLP as counsel to Alta BioPharma Partners.  In the event that legal
proceedings are commenced by any party to this Agreement against another party
to this Agreement in connection with this Agreement or the other Transaction
Documents, the party or parties which do not prevail in such proceedings shall
severally, but not jointly, pay their pro rata share of the reasonable
attorneys’ fees and other reasonable out-of-pocket costs and expenses incurred
by the prevailing party in such proceedings.

 

9.6           Amendments and Waivers.  Any term of this Agreement may be amended
and the observance of any term of this Agreement may be waived (either generally
or in a particular instance and either retroactively or prospectively), only
with the written consent of the Company and the Investors.  Any amendment or
waiver effected in accordance with this

 

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paragraph shall be binding upon each holder of any Securities purchased under
this Agreement at the time outstanding, each future holder of all such
Securities, and the Company.

 

9.7           Publicity.  Except as set forth below, no public release or
announcement concerning the transactions contemplated hereby shall be issued by
the Company or the Investors without the prior consent of the Company (in the
case of a release or announcement by the Investors) or the Investors (in the
case of a release or announcement by the Company) (which consents shall not be
unreasonably withheld), except as such release or announcement may be required
by law or the applicable rules or regulations of Nasdaq, any securities exchange
or other securities market.  On the trading day immediately following the date
hereof, the Company shall issue a press release disclosing the transactions
contemplated by this Agreement.  No later than the fourth trading day following
the date hereof, the Company will file a Current Report on Form 8-K describing
the Transaction Documents and attaching the press release described in the
foregoing sentence.  In addition, the Company will make such other filings
(including filing the Transaction Documents with the SEC) and notices in the
manner and time required by the SEC or Nasdaq.

 

9.8           Severability.  Any provision of this Agreement that is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof but shall be interpreted as if it
were written so as to be enforceable to the maximum extent permitted by
applicable law, and any such prohibition or unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision in any other
jurisdiction.  To the extent permitted by applicable law, the parties hereby
waive any provision of law which renders any provision hereof prohibited or
unenforceable in any respect.

 

9.9           Entire Agreement.  This Agreement, including the exhibits and the
Disclosure Schedules, and the other Transaction Documents constitute the entire
agreement among the parties hereof with respect to the subject matter hereof and
thereof and supersede all prior agreements and understandings, both oral and
written, between the parties with respect to the subject matter hereof and
thereof.

 

9.10         Further Assurances.  The parties shall execute and deliver all such
further instruments and documents and take all such other actions as may
reasonably be required to carry out the transactions contemplated hereby and to
evidence the fulfillment of the agreements herein contained.

 

9.11         Governing Law; Consent to Jurisdiction; Waiver of Jury Trial.  This
Agreement shall be governed by, and construed in accordance with, the internal
laws of the State of California without regard to the choice of law principles
thereof.  Each of the parties hereto irrevocably submits to the exclusive
jurisdiction of the courts of the State of California located in San Mateo
County and the United States District Court for the Northern District of
California for the purpose of any suit, action, proceeding or judgment relating
to or arising out of this Agreement and the transactions contemplated hereby. 
Service of process in connection with any such suit, action or proceeding may be
served on each party hereto anywhere in the world by the same methods as are
specified for the giving of notices under this Agreement.  Each of the

 

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parties hereto irrevocably consents to the jurisdiction of any such court in any
such suit, action or proceeding and to the laying of venue in such court.  Each
party hereto irrevocably waives any objection to the laying of venue of any such
suit, action or proceeding brought in such courts and irrevocably waives any
claim that any such suit, action or proceeding brought in any such court has
been brought in an inconvenient forum.  EACH OF THE PARTIES HERETO WAIVES ANY
RIGHT TO REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS
AGREEMENT AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS
WAIVER.

 

9.12         Independent Nature of Investors’ Obligations and Rights.  The
obligations of each Investor under any Transaction Document are several and not
joint with the obligations of any other Investor, and no Investor shall be
responsible in any way for the performance of the obligations of any other
Investor under any Transaction Document.  The decision of each Investor to
purchase Securities pursuant to the Transaction Documents has been made by such
Investor independently of any other Investor.  Nothing contained herein or in
any Transaction Document, and no action taken by any Investor pursuant thereto,
shall be deemed to constitute the Investors as a partnership, an association, a
joint venture or any other kind of entity, or create a presumption that the
Investors are in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated by the Transaction Documents.  Each
Investor acknowledges that no other Investor has acted as agent for such
Investor in connection with making its investment hereunder and that no Investor
will be acting as agent of such Investor in connection with monitoring its
investment in the Securities or enforcing its rights under the Transaction
Documents.  Each Investor shall be entitled to independently protect and enforce
its rights, including, without limitation, the rights arising out of this
Agreement or out of the other Transaction Documents, and it shall not be
necessary for any other Investor to be joined as an additional party in any
proceeding for such purpose.  The Company acknowledges that each of the
Investors has been provided with the same Transaction Documents for the purpose
of closing a transaction with multiple Investors and not because it was required
or requested to do so by any Investor.

 

(Signature page follows)

 

22

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IN WITNESS WHEREOF, the parties have executed this Common Stock Purchase
Agreement as of the date first above written.

 

The Company:

SUNESIS PHARMACEUTICALS, INC.

 

 

 

 

 

By:

  /s/ Daniel N. Swisher, Jr.

 

Name:

Daniel N. Swisher, Jr.

 

Title:

President and Chief Executive Officer

 

--------------------------------------------------------------------------------

 

The Investors:

ABINGWORTH BIOEQUITIES MASTER FUND LTD.

 

BY:

Its Manager, Abingworth Management

 

 

 

 

 

By:

  /s/ James Abell

 

 

Name: James Abell

 

Title: Director

 

 

 

Purchase Price: $2,917,513.82

Number of Shares: 466,989

Number of shares of Common

Stock underlying Warrant: 140,097

 

 

 

Address for Notice:

 

Abingworth Bioequities Master Fund Ltd.

 

c/o Bisys Hedge Fund Services (Ireland) LTD

 

Attention: Glenn Kennedy

 

One Georges Quay Plaza, 6th Floor

 

Dublin 2, Ireland

 

--------------------------------------------------------------------------------

 

The Investors:

ALTA BIOPHARMA PARTNERS III, L.P.

 

BY:

ALTA BIOPHARMA MANAGEMENT III, LLC

 

 

 

 

 

 

By:

  /s/ Hilary Strain

 

 

Name:   Hilary Strain

 

Title: Vice President, Finance and Administration

 

 

 

Purchase Price: $11,057,918.75

Number of Shares: 1,769,975

Number of shares of Common

Stock underlying Warrant: 530,992

 

 

Address for Notice:

 

Alta BioPharma Partners III, L.P.

 

Attention: Elaine Penny

 

One Embarcadero Center, 37th Floor

 

San Francisco, CA 94111

 

 

TAX ID NUMBER:

 

 

--------------------------------------------------------------------------------

 

The Investors:

Alta BioPharma Partners III GmbH & Co. Beteiligungs KG

 

BY:

ALTA BIOPHARMA MANAGEMENT III, LLC

 

 

 

 

 

 

By:

  /s/ Hilary Strain

 

 

 

Name: Hilary Strain

 

 

Title: Vice President, Finance and Administration

 

 

 

 

Purchase Price: $742,640.33

 

Number of Shares: 118,870

 

Number of shares of Common

 

Stock underlying Warrant: 35,661

 

 

 

Address for Notice:

 

Alta BioPharma Partners III GmbH & Co.
Beteiligungs KG

 

Attention: Elaine Penny

 

One Embarcadero Center, 37th Floor

 

San Francisco, CA 94111

 

 

TAX ID NUMBER:

 

 

--------------------------------------------------------------------------------

 

The Investors:

ALTA EMBARCADERO BIOPHARMA PARTNERS III, LLC

 

 

 

By:

  /s/ Hilary Strain

 

 

Name:  Hilary Strain

 

Title: Vice President, Finance and Administration

 

 

Purchase Price: $272,509.74

 

Number of Shares: 43,619

 

Number of shares of Common

 

Stock underlying Warrant: 13,086

 

 

 

Address for Notice:

 

Alta Embarcadero BioPharma Partners III, LLC

 

Attention: Elaine Penny

 

One Embarcadero Center, 37th Floor

 

San Francisco, CA 94111

 

 

TAX ID NUMBER:

 

 

--------------------------------------------------------------------------------

 

The Investors:

BIOTECHNOLOGY VALUE FUND, L.P.

 

 

 

By:

 /s/ Mark Lambert

 

 

Name:

Mark Lambert

 

Title:

President of BVF Inc.

 

General Partner of BVF Partners L.P.

 

General Partner of Biotechnology Value Fund, L.P.

 

 

 

 

Purchase Price: $654,319.43

 

Number of Shares: 104,733

 

Number of shares of Common

 

Stock underlying Warrant: 31,420

 

 

 

Address for Notice:

 

Biotechnology Value Fund, L.P.

 

Attention: Elizabeth Delaney

 

900 N. Michigan Avenue

 

Suite 1100

 

Chicago, IL 60611

 

--------------------------------------------------------------------------------

 

The Investors:

BIOTECHNOLOGY VALUE FUND II, L.P.

 

 

 

By:

 /s/ Mark Lambert

 

 

Name: Mark Lambert

 

Title:

President of BVF Inc.

 

General Partner of BVF Partners L.P.

 

General Partner of Biotechnology Value Fund, L.P.

 

 

 

 

Purchase Price: $449,195.25

 

Number of Shares: 71,900

 

Number of shares of Common

 

Stock underlying Warrant: 21,570

 

 

 

Address for Notice:

 

 

Biotechnology Value Fund II, L.P.

 

Attention: Elizabeth Delaney

 

900 N. Michigan Avenue

 

Suite 1100

 

Chicago, IL 60611

 

--------------------------------------------------------------------------------

 

The Investors:

INVESTMENT 10, L.L.C.

 

 

 

 

By:

 /s/ Mark Lambert

 

 

Name:

Mark Lambert

 

Title:

President of BVF Inc.

 

General Partner of BVF Partners L.P.

 

General Partner of Biotechnology Value Fund, L.P.

 

 

 

 

Purchase Price: $190,042.74

 

Number of Shares: 30,419

 

Number of shares of Common

 

Stock underlying Warrant: 9,126

 

 

 

Address for Notice:

 

 

Investment 10, L.L.C.

 

Attention: Elizabeth Delaney

 

900 N. Michigan Avenue

 

Suite 1100

 

Chicago, IL 60611

 

--------------------------------------------------------------------------------

 

The Investors:

BVF INVESTMENTS, L.L.C.

 

 

 

 

By:

 /s/ Mark Lambert

 

 

Name: Mark Lambert

 

Title:

President of BVF Inc.

 

General Partner of BVF Partners L.P.

 

General Partner of Biotechnology Value Fund, L.P.

 

 

 

 

Purchase Price: $1,724,559.90

 

Number of Shares: 276,040

 

Number of shares of Common

 

Stock underlying Warrant: 82,812

 

 

 

Address for Notice:

 

 

BVF Investments, L.L.C.

 

Attention: Elizabeth Delaney

 

900 N. Michigan Avenue

 

Suite 1100

 

Chicago, IL 60611

 

--------------------------------------------------------------------------------

 

The Investors:

DOMAIN PUBLIC EQUITY PARTNERS, L.P.

 

BY: Domain Public Equity Associates, L.L.C.

 

 

 

By:

 /s/ Nicole Vitullo

 

 

Name:

Nicole Vitullo

 

Title:

Managing Member

 

 

 

 

 

 

Purchase Price: $5,030,193.38

 

Number of Shares: 805,153

 

Number of shares of Common

 

Stock underlying Warrant: 241,546

 

 

 

Address for Notice:

 

 

Domain Public Equity Partners, L.P.

 

c/o Domain Associates

 

One Palmer Sq. Suite 515

 

Princeton, NJ 08542

 

--------------------------------------------------------------------------------

 

The Investors:

THE BOARD OF TRUSTEES OF THE LELAND

 

STANFORD JUNIOR UNIVERSITY (SBST)

 

 

 

 

 

By:

 /s/ Martina S. Poquet

 

 

Name: Martina S. Poquet

 

Title:

Director, Separate Investments Division

 

 

 

 

 

 

Purchase Price: $99,997.51

 

Number of Shares: 16,006

 

Number of shares of Common

 

Stock underlying Warrant: 4,802

 

 

 

Address for Notice:

 

 

The Board of Trustees of the Leland Stanford Junior
University (SBST)

 

c/o Stanford Management Company

 

Attention: Martina Poquet

 

2770 Sand Hill Road

 

Menlo Park, CA 94025

 

--------------------------------------------------------------------------------

 

The Investors:

Warburg, Pincus Equity Partners, L.P.

 

 

 

By:

Warburg Pincus Partners, LLC,

 

 

its General Partner

 

 

 

By:

Warburg, Pincus & Co.,

 

 

its Managing Member

 

 

 

 

 

By:

  /s/  Jonathan Leff

 

 

Name: Jonathan Leff

 

Title:  Partner

 

 

Purchase Price: $4,753,535.32

 

 

Number of Shares: 760,870

 

 

Number of shares of Common

 

 

Stock underlying Warrant: 228,261

 

 

 

 

 

Address for Notice:

 

 

 

 

Warburg, Pincus Equity Partners, L.P.

 

 

Attention: Jonathan Leff

 

 

466 Lexington Avenue

 

 

New York, NY 10017

 

 

 

TAX ID NUMBER:

 

 

 

--------------------------------------------------------------------------------

 

The Investors:

Warburg, Pincus Netherlands Equity Partners I, C.V.

 

 

 

By:

Warburg Pincus Partners, LLC,

 

 

its General Partner

 

 

 

By:

Warburg, Pincus & Co.,

 

 

its Managing Member

 

 

 

 

 

By:

  /s/  Jonathan Leff

 

 

Name:  Jonathan Leff

 

Title:   Partner

 

 

 

 

 

 

Purchase Price: $251,505.60

 

Number of Shares: 40,257

 

 

Number of shares of Common

 

 

Stock underlying Warrant: 12,077

 

 

 

 

 

Address for Notice:

 

 

 

 

Warburg, Pincus Netherlands Equity Partners I, C.V.

 

 

Attention: Jonathan Leff

 

 

466 Lexington Avenue

 

 

New York, NY 10017

 

 

 

TAX ID NUMBER:

 

 

 

--------------------------------------------------------------------------------

 

The Investors:

Warburg, Pincus Netherlands Equity Partners III, C.V.

 

 

 

 

By:

Warburg Pincus Partners, LLC,

 

 

its General Partner

 

 

 

By:

Warburg, Pincus & Co.,

 

 

its Managing Member

 

 

 

 

 

By:

 /s/  Jonathan Leff

 

 

Name: Jonathan Leff

 

Title:   Partner

 

 

 

 

 

 

Purchase Price: $25,152.46

 

Number of Shares: 4,026

 

 

Number of shares of Common

 

 

Stock underlying Warrant: 1,208

 

 

 

 

 

Address for Notice:

 

 

 

 

Warburg, Pincus Netherlands Equity Partners III, C.V.

 

 

Attention: Jonathan Leff

 

 

466 Lexington Avenue

 

 

New York, NY 10017

 

 

 

TAX ID NUMBER:

 

 

 

--------------------------------------------------------------------------------

 

The Investors:

Deerfield Special Situations Fund International, Ltd.

 

 

 

 

 

By:

  /s/ Darren Levine

 

 

Name: Darren Levine

 

Title:   CFO

 

 

 

 

 

 

Purchase Price: $3,498,475.00

 

Number of Shares: 560,000

 

Number of shares of Common

 

Stock underlying Warrant: 167,000

 

 

 

Address for Notice:

 

Deerfield Special Situations Fund International, Ltd.

 

Attention: Darren Levine

 

780 Third Avenue - 37th Floor

 

New York, NY 10017

 

--------------------------------------------------------------------------------

 

The Investors:

Deerfield Special Situations Fund, L.P.

 

 

 

 

 

By:

 /s/ Darren Levine

 

 

Name: Darren Levine

 

Title:

CFO

 

 

 

 

 

 

Purchase Price: $1,886,670.00

 

Number of Shares: 302,000

 

Number of shares of Common

 

Stock underlying Warrant: 90,000

 

 

 

Address for Notice:

 

Deerfield Special Situations Fund, Ltd.

 

Attention: Darren Levine

 

780 Third Avenue - 37th Floor

 

New York, NY 10017

 

--------------------------------------------------------------------------------

 

The Investors:

Deerfield Partners, L.P.

 

 

 

 

 

By:

  /s/ Darren Levine

 

 

Name: Darren Levine

 

Title:

CFO

 

 

 

 

 

 

Purchase Price: $2,020,116.76

 

Number of Shares: 323,306

 

Number of shares of Common

 

Stock underlying Warrant: 99,092

 

 

 

Address for Notice:

 

Deerfield Partners, L.P.

 

Attention: Darren Levine

 

780 Third Avenue - 37th Floor

 

New York, NY 10017

 

--------------------------------------------------------------------------------

 

The Investors:

Deerfield International Limited

 

 

 

 

 

By:

 /s/ Darren Levine

 

 

Name: Darren Levine

 

Title:

CFO

 

 

 

 

 

 

Purchase Price: $2,655,125.00

 

Number of Shares: 425,000

 

Number of shares of Common

 

Stock underlying Warrant: 127,000

 

 

 

Address for Notice:

 

Deerfield International Limited

 

Attention: Darren Levine

 

780 Third Avenue - 37th Floor

 

New York, NY 10017

 

--------------------------------------------------------------------------------

 

The Investors:

Baker Bros. Investments, L.P.

 

BY: Baker Bros. Capital, L.P. (general partner)

 

BY: Baker Bros. Capital (GP), LLC (general partner)

 

 

 

 

 

By:

  /s/ Julian Baker

 

 

Name: Julian Baker

 

Title:

Managing Member

 

 

 

 

 

 

Purchase Price: $214,807.81

 

Number of Shares: 34,383

 

Number of shares of Common

 

Stock underlying Warrant: 10,315

 

 

 

Address for Notice:

 

Baker Bros. Investments, L.P.

 

Attention: Julian Baker

 

667 Madison Avenue, 17th Floor

 

New York, NY 10021

 

--------------------------------------------------------------------------------

 

The Investors:

Baker Bros. Investments II, L.P.

 

BY: Baker Bros. Capital, L.P. (general partner)

 

BY: Baker Bros. Capital (GP), LLC (general partner)

 

 

 

 

 

By:

 /s/ Julian Baker

 

 

Name: Julian Baker

 

Title:

Managing Member

 

 

 

 

 

 

Purchase Price: $190,705.00

 

Number of Shares: 30,525

 

Number of shares of Common

 

Stock underlying Warrant: 9,158

 

 

 

Address for Notice:

 

Baker Bros. Investments II, L.P.

 

Attention: Julian Baker

 

667 Madison Avenue, 17th Floor

 

New York, NY 10021

 

--------------------------------------------------------------------------------

 

The Investors:

Baker Biotech Fund I, L.P.

 

BY: Baker Bros. Capital, L.P. (general partner)

 

BY: Baker Bros. Capital (GP), LLC (general partner)

 

 

 

 

 

By:

  /s/ Julian Baker

 

 

Name:  Julian Baker

 

Title:

 Managing Member

 

 

 

 

 

 

Purchase Price: $2,129,297.91

 

Number of Shares: 340,824

 

Number of shares of Common

 

Stock underlying Warrant: 102,247

 

 

 

Address for Notice:

 

Baker Biotech Fund I, L.P.

 

Attention: Julian Baker

 

667 Madison Avenue, 17th Floor

 

New York, NY 10021

 

--------------------------------------------------------------------------------

 

The Investors:

Baker Biotech Fund II, L.P.

 

BY: Baker Bros. Capital II, L.P. (general partner)

 

BY: Baker Bros. Capital II (GP), LLC (general partner)

 

 

 

 

 

By:

 /s/ Julian Baker

 

 

Name: Julian Baker

 

Title:

Managing Member

 

 

 

 

 

 

Purchase Price: $1,940,942.13

 

Number of Shares: 310,675

 

Number of shares of Common

 

Stock underlying Warrant: 93,203

 

 

 

Address for Notice:

 

Baker Biotech Fund II, L.P.

 

Attention: Julian Baker

 

667 Madison Avenue, 17th Floor

 

New York, NY 10021

 

--------------------------------------------------------------------------------

 

The Investors:

Baker Biotech Fund II (Z), L.P.

 

BY: Baker Bros. Capital II (Z), L.P. (general partner)

 

BY: Baker Bros. Capital II (Z) (GP), LLC (general partner)

 

 

 

 

 

By:

 /s/ Julian Baker

 

 

Name: Julian Baker

 

Title:  Managing Member

 

 

 

 

 

 

Purchase Price: $253,504.80

 

Number of Shares: 40,577

 

Number of shares of Common

 

Stock underlying Warrant: 12,173

 

 

 

Address for Notice:

 

Baker Biotech Fund II (Z), L.P.

 

Attention: Julian Baker

 

667 Madison Avenue, 17th Floor

 

New York, NY 10021

 

--------------------------------------------------------------------------------

 

The Investors:

Baker Biotech Fund III, L.P.

 

BY: Baker Bros. Capital III, L.P. (general partner)

 

BY: Baker Bros. Capital III (GP), LLC (general partner)

 

 

 

 

 

By:

 /s/ Julian Baker

 

 

Name: Julian Baker

 

Title:

Managing Member

 

 

 

 

 

 

Purchase Price: $1,876,742.79

 

Number of Shares: 300,399

 

Number of shares of Common

 

Stock underlying Warrant: 90,120

 

 

 

Address for Notice:

 

Baker Biotech Fund III, L.P.

 

Attention: Julian Baker

 

667 Madison Avenue, 17th Floor

 

New York, NY 10021

 

--------------------------------------------------------------------------------

 

The Investors:

Baker Biotech Fund III (Z), L.P.

 

BY: Baker Bros. Capital III (Z), L.P. (general partner)

 

BY: Baker Bros. Capital III (Z) (GP), LLC (general partner)

 

 

 

 

 

By:

  /s/ Julian Baker

 

 

Name:   Julian Baker

 

Title:

  Managing Member

 

 

 

 

 

 

Purchase Price: $306,771.00

 

Number of Shares: 49,103

 

Number of shares of Common

 

Stock underlying Warrant: 14,731

 

 

 

Address for Notice:

 

Baker Biotech Fund III (Z), L.P.

 

Attention: Julian Baker

 

667 Madison Avenue, 17th Floor

 

New York, NY 10021

 

--------------------------------------------------------------------------------

 

The Investors:

14159, L.P.

 

BY: 14159 Capital, L.P. (general partner)

 

BY: 14159 Capital (GP), LLC (general partner)

 

 

 

 

 

By:

 /s/ Julian Baker

 

 

Name: Julian Baker

 

Title:

Managing Member

 

 

 

 

 

 

Purchase Price: $129,498.00

 

Number of Shares: 20,728

 

Number of shares of Common

 

Stock underlying Warrant: 6,217

 

 

 

Address for Notice:

 

14159, L.P.

 

Attention: Julian Baker

 

667 Madison Avenue, 17th Floor

 

New York, NY 10021

 

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