Exhibit 10.7

 

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

 

EXECUTION COPY

 

 

 

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REGISTRATION RIGHTS AGREEMENT

 

between

 

 

 

EXELIXIS, INC.

 

 

 

and

 

 

 

SYMPHONY EVOLUTION HOLDINGS LLC

 

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Dated as of June 9, 2005

 

 

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Table of Contents

 

Section

        Page

Section 1.

   Definitions.    1

Section 2.

   Registration.    2

Section 3.

   Related Obligations    2

Section 4.

   Obligations Of The Investor(s).    6

Section 5.

   Expenses of Registration    6

Section 6.

   Indemnification    7

Section 7.

   Contribution    10

Section 8.

   Reports Under The 1934 Act    10

Section 9.

   Assignment of Registration Rights    11

Section 10.

   Amendment of Registration Rights.    11

Section 11.

   Miscellaneous.    11

 

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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REGISTRATION RIGHTS AGREEMENT

 

REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of June 9, 2005, by
and between EXELIXIS, INC., a Delaware corporation (“Exelixis”), and SYMPHONY
EVOLUTION HOLDINGS LLC, a Delaware limited liability company (together with its
permitted successors, assigns and transferees, “Holdings”).

 

RECITALS:

 

WHEREAS, in connection with the exercise by Exelixis of the Purchase Option
under the Purchase Option Agreement, among Exelixis, Holdings and Symphony
Evolution, Inc., a Delaware corporation (“Symphony Evolution”), of even date
herewith (the “Purchase Option Agreement”), Exelixis may elect to issue shares
of Exelixis’ common stock, par value $0.001 per share (“Exelixis Common Stock”)
(such shares of Exelixis Common Stock when and if issued, the “Purchase Option
Shares”) to Holdings in partial payment of the Purchase Price in accordance with
the terms of the Purchase Option Agreement; and

 

WHEREAS, to induce Holdings to execute and deliver the Purchase Option
Agreement, Exelixis has agreed to provide certain registration rights under the
Securities Act of 1933, as amended (the “Securities Act”), and applicable state
securities laws with respect to the Purchase Option Shares;

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Exelixis and Holdings (the
“Parties”) hereby agree as follows:

 

Section 1. Definitions.

 

(a) Capitalized terms used but not defined herein are used as defined in
Purchase Option Agreement.

 

(b) As used in this Agreement, the following terms shall have the following
meanings:

 

(i) “Effective Registration Date” means the date that the Registration Statement
(as defined below) is first declared effective by the SEC.

 

(ii) “Investor(s)” means Holdings, any transferee or assignee thereof to whom
Holdings assigns its rights under this Agreement and who agrees to become bound
by the provisions of this Agreement in accordance with Section 9 and any
transferee or assignee thereof to whom a transferee or assignee assigns its
rights under this Agreement and who agrees to become bound by the provisions of
this Agreement in accordance with Section 9.

 

(iii) “Purchase Option Related Registrable Securities” means (i) the Purchase
Option Shares, and (ii) any Exelixis Common Stock issued with respect to the

 

1

 

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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Purchase Option Shares as a result of any stock split, stock dividend,
recapitalization, exchange or similar event or otherwise.

 

(iv) “register,” “registered,” and “registration” refer to a registration
effected by preparing and filing one or more Registration Statements in
compliance with the Securities Act and pursuant to Rule 415, and the declaration
or ordering of effectiveness of such Registration Statement(s) by the SEC.

 

(v) “Registrable Securities” means the Purchase Option Related Registrable
Securities; provided, however, that such securities will cease to be Registrable
Securities on the earlier of (A) the date as of which the Investor(s) may sell
such securities without restriction pursuant to Rule 144(k) (or successor
thereto) promulgated under the Securities Act or (B) the date on which the
Investor(s) shall have sold all such securities.

 

(vi) “Registration Statement” means a registration statement or registration
statements of Exelixis filed under the Securities Act covering the Registrable
Securities.

 

(vii) “Rule 415” means Rule 415 under the Securities Act or any successor rule
providing for offering securities on a continuous or delayed basis.

 

Section 2. Registration.

 

(a) Right to Registration. In the event Exelixis elects to exercise the Purchase
Option as set forth in the Purchase Option Agreement, and in so doing elects to
issue Purchase Option Related Registrable Securities, Exelixis shall prepare
and, in accordance with Section 2(a)(ii)(A) of the Purchase Option Agreement,
file with the SEC a Registration Statement on Form S-3 covering the resale of
the Purchase Option Related Registrable Securities. The Registration Statement
prepared pursuant hereto shall register for resale that number of shares of
Exelixis Common Stock equal to the number of Purchase Option Related Registrable
Securities as would be issued pursuant to the terms of the Purchase Option
Agreement. Exelixis shall use commercially reasonable efforts to have the
Registration Statement declared effective by the SEC as soon as practicable
following the Purchase Option Exercise Date.

 

(b) Ineligibility for Form S-3. In the event that Form S-3 is not available for
the registration of the resale of Registrable Securities hereunder, Exelixis
shall (i) in accordance with Section 2(a)(ii)(A) of the Purchase Option
Agreement, register the resale of the Registrable Securities on another
appropriate form reasonably acceptable to Holdings (which acceptable forms shall
include Form S-1), and (ii) undertake to register the Registrable Securities on
Form S-3 as soon as such form is available; provided that Exelixis shall
maintain the effectiveness of the Registration Statement then in effect until
such time as a Registration Statement on Form S-3 covering the Registrable
Securities has been declared effective by the SEC.

 

Section 3. Related Obligations. At such time as Exelixis is obligated to file a
Registration Statement with the SEC pursuant to Section 2(a) or 2(b), Exelixis
will use commercially reasonable efforts to effect the registration of the
Registrable Securities in accordance with the intended method of disposition
thereof and, pursuant thereto (except at such times as Exelixis may be required
to suspend the use of a prospectus forming a part of the Registration Statement
pursuant to Section 3(l), at which time Exelixis’ obligations under

 

2

 

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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Sections 3(a), (b), (c), (d), (i) and (k) may also be suspended, as required),
Exelixis shall have the following obligations:

 

(a) Exelixis shall keep each Registration Statement effective pursuant to Rule
415 at all times until the earlier of (i) the date as of which the Investor(s)
may sell all of the Registrable Securities covered by such Registration
Statement without restriction pursuant to Rule 144(k) (or successor thereto)
promulgated under the Securities Act, or (ii) the date on which the Investor(s)
shall have sold all the Registrable Securities covered by such Registration
Statement (the “Registration Period”).

 

(b) Exelixis shall prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to a Registration Statement and the
prospectus used in connection with such Registration Statement as may be
necessary to keep such Registration Statement effective at all times during the
Registration Period, and, during such period, comply with the provisions of the
Securities Act with respect to the disposition of all Registrable Securities of
Exelixis covered by such Registration Statement until such time as all of such
Registrable Securities shall have been disposed of in accordance with the
intended methods of disposition by the seller or sellers thereof as set forth in
such Registration Statement. In the case of amendments and supplements to a
Registration Statement which are required to be filed pursuant to this Agreement
(including pursuant to this Section 3(b)) by reason of Exelixis filing a report
on Form 10-K, Form 10-Q or Form 8-K or any analogous report under the Securities
Exchange Act of 1934, as amended (the “1934 Act”), Exelixis shall have
incorporated such report by reference into such Registration Statement, if
applicable, or shall file such amendments or supplements with the SEC on the
same day on which the 1934 Act report is filed which created the requirement for
Exelixis to amend or supplement such Registration Statement.

 

(c) Exelixis shall furnish to each Investor whose Registrable Securities are
included in any Registration Statement, without charge, (i) promptly after the
same is prepared and filed with the SEC, at least one copy of such Registration
Statement and any amendment(s) thereto, including financial statements and
schedules, and each preliminary prospectus, (ii) upon the effectiveness of any
Registration Statement, ten (10) copies of the prospectus included in such
Registration Statement and all amendments and supplements thereto (or such other
number of copies as such Investor may reasonably request), and (iii) such other
documents, including copies of any preliminary or final prospectus, as such
Investor may reasonably request from time to time in order to facilitate the
disposition of the Registrable Securities owned by such Investor.

 

(d) Exelixis shall use commercially reasonable efforts to (i) register and
qualify, unless an exemption from registration and qualification applies, the
resale by Investor(s) of the Registrable Securities covered by a Registration
Statement under such other securities or “blue sky” laws of such jurisdictions
in the United States as Investor(s) reasonably request, (ii) prepare and file in
those jurisdictions such amendments (including post-effective amendments) and
supplements to such registrations and qualifications as may be necessary to
maintain the effectiveness thereof during the Registration Period, and (iii)
take such other actions as may be necessary to maintain such registrations and
qualifications in effect at all times during the Registration Period; provided,
however, that Exelixis shall not be required in connection therewith or as a
condition thereto to (x) qualify to do business in any jurisdiction where it
would not otherwise be required to qualify but for this Section 3(d), (y)
subject itself to general taxation

 

3

 

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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in any such jurisdiction, or (z) file a general consent to service of process in
any such jurisdiction. Exelixis shall promptly notify each Investor who holds
Registrable Securities of the receipt by Exelixis of any notification with
respect to the suspension of the registration or qualification of any of the
Registrable Securities for sale under the securities or “blue sky” laws of any
jurisdiction in the United States or its receipt of actual notice of the
initiation or threatening of any proceeding for such purpose.

 

(e) Exelixis shall notify each Investor in writing of the happening of any
event, as promptly as practicable after becoming aware of such event, as a
result of which the prospectus included in a Registration Statement, as then in
effect, includes an untrue statement of a material fact or omission to state a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, and, subject to Section 3(l) hereof, promptly prepare a supplement
or amendment to such Registration Statement to correct such untrue statement or
omission. Exelixis shall also promptly notify each Investor in writing when a
prospectus or any prospectus supplement or post-effective amendment has been
filed, and when a Registration Statement or any post-effective amendment has
become effective.

 

(f) Exelixis shall use commercially reasonable efforts to prevent the issuance
of any stop order or other suspension of effectiveness of a Registration
Statement, or the suspension of the qualification of any of the Registrable
Securities for sale in any jurisdiction and, if such an order or suspension is
issued, to obtain the withdrawal of such order or suspension at the earliest
possible moment.

 

(g) In the event that any Investor is deemed to be an “underwriter” with respect
to the Registrable Securities, upon the written request of such Investor in
connection with such Investor’s due diligence requirements, if any, Exelixis
shall make available for inspection by (i) such Investor, and (ii) any legal
counsel, accountants or other agents retained by the Investor (collectively,
“Inspectors”), all pertinent financial and other records, and pertinent
corporate documents and properties of Exelixis (collectively, “Records”), as
shall be reasonably deemed necessary by each Inspector, and cause Exelixis’
officers, directors and employees to supply all information which any Inspector
may reasonably request; provided, however, that each Inspector and such Investor
shall agree in writing to hold in strict confidence and shall not make any
disclosure (except with respect to an Inspector, to the relevant Investor) or
use of any Record or other information which Exelixis determines in good faith
to be confidential, and of which determination the Inspectors are so notified,
unless the release of such Records is ordered pursuant to a final,
non-appealable subpoena or order from a court or government body of competent
jurisdiction. Each Investor agrees that it shall, upon learning that disclosure
of such Records is required or is sought in or by a court or governmental body
of competent jurisdiction or through other means, give prompt notice to Exelixis
and allow Exelixis, at its expense, to undertake appropriate action to prevent
disclosure of, or to obtain a protective order for, the Records deemed
confidential. Nothing herein (or in any other confidentiality agreement between
Exelixis and any Investor) shall be deemed to limit the Investor(s)’ ability to
sell Registrable Securities in a manner which is otherwise consistent with
applicable laws and regulations.

 

(h) Exelixis shall hold in confidence and not make any disclosure of information
concerning an Investor provided to Exelixis unless (i) disclosure of such
information

 

4

 

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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is necessary to comply with federal or state securities laws or the rules of any
securities exchange or trading market on which the Exelixis Common Stock is
listed or traded, (ii) the disclosure of such information is necessary to avoid
or correct a misstatement or omission in any Registration Statement, or (iii)
the release of such information is ordered pursuant to a subpoena or other
final, non-appealable order from a court or governmental body of competent
jurisdiction. Exelixis agrees that it shall, upon learning that disclosure of
such information concerning an Investor is sought in or by a court or
governmental body of competent jurisdiction or through other means, give prompt
written notice to such Investor and allow such Investor, at the Investor’s
expense, to undertake appropriate action to prevent disclosure of, or to obtain
a protective order for, such information.

 

(i) Exelixis shall use commercially reasonable efforts either to (i) cause all
the Registrable Securities covered by a Registration Statement to be listed on
each securities exchange on which securities of the same class or series issued
by Exelixis are then listed, if any, if the listing of such Registrable
Securities is then permitted under the rules of such exchange, or (ii) secure
designation and quotation of all the Registrable Securities covered by a
Registration Statement on the NASDAQ National Market. Exelixis shall pay all
fees and expenses in connection with satisfying its obligation under this
Section 3(i).

 

(j) Exelixis shall cooperate with the Investor(s) who hold Registrable
Securities being offered and, to the extent applicable, facilitate the timely
preparation and delivery of certificates representing the Registrable Securities
to be offered pursuant to a Registration Statement and enable such certificates
to be in such denominations or amounts, as the case may be, as the Investor(s)
may reasonably request and registered in such names as the Investor(s) may
request.

 

(k) If requested by an Investor, Exelixis shall (i) as soon as practicable
incorporate in a prospectus supplement or post-effective amendment such
information as an Investor reasonably requests to be included therein relating
to the sale and distribution of Registrable Securities, including, without
limitation, information with respect to the number of Registrable Securities
being offered or sold, the purchase price being paid therefor and any other
terms of the offering of the Registrable Securities to be sold in such offering
and (ii) as soon as practicable make all required filings of such prospectus
supplement or post-effective amendment after being notified of the matters to be
incorporated in such prospectus supplement or post-effective amendment.

 

(l) Notwithstanding anything to the contrary herein, at any time after the
Registration Statement has been declared effective by the SEC, Exelixis may
delay the disclosure of material, non-public information concerning Exelixis the
disclosure of which at the time is not, in the good faith opinion of Exelixis,
in the best interest of Exelixis (a “Grace Period”); provided, that Exelixis
shall promptly notify the Investor(s) in writing of the existence of a Grace
Period in conformity with the provisions of this Section 3(l) and the date on
which the Grace Period will begin (such notice, a “Commencement Notice”; and,
provided further, that no Grace Period shall exceed thirty (30) days during any
ninety (90) day period and during any three hundred sixty five (365) day period
such Grace Periods shall not exceed an aggregate of ninety (90) days. For
purposes of determining the length of a Grace Period above, the Grace Period
shall begin on and include the date specified by Exelixis in the Commencement
Notice and shall

 

5

 

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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end on and include the date Investor(s) receive written notice of the
termination of the Grace Period by Exelixis (which notice may be contained in
the Commencement Notice). The provisions of Section 3(f) hereof shall not be
applicable during any Grace Period. Upon expiration of the Grace Period,
Exelixis shall again be bound by the first sentence of Section 3(e) with respect
to the information giving rise thereto unless such material, non-public
information is no longer applicable.

 

Section 4. Obligations Of The Investor(s).

 

(a) At least seven (7) Business Days prior to the first anticipated filing date
of a Registration Statement, Exelixis shall notify each Investor in writing of
the information Exelixis requires from each such Investor if such Investor
elects to have any of such Investor’s Registrable Securities included in such
Registration Statement. It shall be a condition precedent to the obligations of
Exelixis to complete the registration pursuant to this Agreement with respect to
the Registrable Securities of a particular Investor that such Investor shall
furnish to Exelixis such information regarding itself, the Registrable
Securities held by it and the intended method of disposition of the Registrable
Securities held by it as shall be reasonably required to effect the
effectiveness of the registration of such Registrable Securities and shall
execute such documents in connection with such registration as Exelixis may
reasonably request.

 

(b) Each Investor, by such Investor’s acceptance of the Registrable Securities,
agrees to cooperate with Exelixis as reasonably requested by Exelixis in
connection with the preparation and filing of any Registration Statement
hereunder, unless such Investor has notified Exelixis in writing of such
Investor’s election to exclude all of such Investor’s Registrable Securities
from such Registration Statement.

 

(c) Each Investor agrees that, upon receipt of any notice from Exelixis of the
happening of any event of the kind described in Section 3(f) or the first
sentence of Section 3(e), such Investor will immediately discontinue disposition
of Registrable Securities pursuant to any Registration Statement(s) covering
such Registrable Securities until such Investor’s receipt of the copies of the
supplemented or amended prospectus contemplated by the second sentence of
Section 3(e) or receipt of notice that no supplement or amendment is required.

 

(d) Each Investor covenants and agrees that it will comply with any applicable
prospectus delivery requirements of the Securities Act as applicable to it in
connection with sales of Registrable Securities pursuant to a Registration
Statement.

 

Section 5. Expenses of Registration. All reasonable expenses, other than
underwriting discounts and commissions, incurred in connection with
registrations, filings or qualifications pursuant to Sections 2 and 3 hereof,
including, without limitation, all registration, listing and qualifications
fees, printers and accounting fees, and fees and disbursements of counsel for
Exelixis shall be paid by Exelixis. All underwriting discounts and selling
commissions applicable to the sale of the Registrable Securities shall be paid
by the Investor(s), provided, however, that Exelixis shall reimburse the
Investor(s) for the reasonable actual fees and disbursements of one legal
counsel designated by the holders of at least a majority of the Registrable
Securities in connection with registration, filing or qualification pursuant to
Sections 2 and 3 of this Agreement, which amount shall be limited to $30,000 in
total over the term of this Agreement.

 

6

 

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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Section 6. Indemnification. In the event any Registrable Securities are included
in a Registration Statement under this Agreement:

 

(a) To the fullest extent permitted by law, Exelixis will, and hereby does,
indemnify and hold harmless each Investor, the directors, officers, partners,
members, employees, agents, representatives of, and each Person, if any, who
controls any Investor within the meaning of the Securities Act or the 1934 Act
(each, an “Investor Indemnified Person”), against any losses, claims, damages,
liabilities, judgments, fines, penalties, charges, costs, reasonable attorneys’
fees, amounts paid in settlement or expenses, joint or several (collectively,
“Claims”), incurred in investigating, preparing or defending any action, claim,
suit, inquiry, proceeding, investigation or appeal taken from the foregoing by
or before any court or governmental, administrative or other regulatory agency,
body or the SEC, whether pending or threatened, whether or not an indemnified
Person is or may be a party thereto (“Indemnified Damages”), to which any of
them may become subject insofar as such Claims (or actions or proceedings,
whether commenced or threatened, in respect thereof) arise out of or are based
upon: (i) any untrue statement or alleged untrue statement of a material fact in
a Registration Statement or any post-effective amendment thereto or in any
filing made in connection with the qualification of the offering under the
securities or other “blue sky” laws of any jurisdiction in which Registrable
Securities are offered (“Blue Sky Filing”), or the omission or alleged omission
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading; (ii) any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus if used
prior to the Effective Registration Date of such Registration Statement, or
contained in the final prospectus (as amended or supplemented, if Exelixis files
any amendment thereof or supplement thereto with the SEC) or the omission or
alleged omission to state therein any material fact necessary to make the
statements made therein, in the light of the circumstances under which the
statements therein were made, not misleading; [ * ] (the matters in the
foregoing clauses (i) through (iii) being, collectively, “Violations”). Subject
to Section 6(c), Exelixis shall reimburse the Investor Indemnified Persons,
promptly as such expenses are incurred and are due and payable, for any legal
fees or other reasonable expenses incurred by them in connection with
investigating or defending any such Claim. Notwithstanding anything to the
contrary contained herein, the indemnification agreement contained in this
Section 6(a): (A) shall not apply to a Claim by an Investor Indemnified Person
arising out of or based upon a Violation that occurs in reliance upon and in
conformity with information furnished in writing to Exelixis by or on behalf of
any such Investor Indemnified Person expressly for use in connection with the
preparation of the Registration Statement or any such amendment thereof or
supplement thereto if such information was timely made available by Exelixis
pursuant to Section 3(c); (B) with respect to any preliminary prospectus, shall
not inure to the benefit of any such Person from whom the Person asserting any
such Claim purchased the Registrable Securities that are the subject thereof (or
to the benefit of any Person controlling such Person) if the untrue statement or
omission of material fact contained in the preliminary prospectus was corrected
in the prospectus, as then amended or supplemented, if such prospectus was
timely made available by Exelixis pursuant to Section 3(d), and the Investor
Indemnified Person was promptly advised in writing not to use the incorrect
prospectus prior to the use giving rise to a violation and such Investor
Indemnified Person, notwithstanding such advice, used it or failed to deliver
the correct prospectus as required by the Securities Act and such correct
prospectus was timely made available pursuant to Section 3(d); (C) shall not be
available to the extent such Claim is based on a failure of the

 

7

 

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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Investor Indemnified Person to deliver or to cause to be delivered the
prospectus made available by Exelixis, including a corrected prospectus, if such
prospectus or corrected prospectus was timely made available by Exelixis
pursuant to Section 3(d); and (D) shall not apply to amounts paid in settlement
of any Claim if such settlement is effected without the prior written consent of
Exelixis, which consent shall not be unreasonably withheld or delayed. Such
indemnity shall remain full force and effect regardless of any investigation
made by or on behalf of the Investor Indemnified Person and shall survive the
transfer of the Registrable Securities by the Investor(s) pursuant to Section 9.

 

(b) In connection with any Registration Statement in which an Investor is
participating, each such Investor agrees to severally and not jointly indemnify,
and hold harmless, to the same extent and in the same manner as is set forth in
Section 6(a), Exelixis, each of its directors, each of its officers who signs
the Registration Statement and each Person, if any, who controls Exelixis within
the meaning of the Securities Act or the 1934 Act (each, a “Company Indemnified
Person”), against any Claim or Indemnified Damages to which any of them may
become subject, under the Securities Act, the 1934 Act or otherwise, insofar as
such Claim or Indemnified Damages arise out of or are based upon any Violation,
in each case to the extent, and only to the extent, that such Violation occurs
in reliance upon and in conformity with written information furnished to
Exelixis by such Investor expressly for use in connection with such Registration
Statement; and, subject to Section 6(d), such Investor will reimburse, promptly
as such expenses are incurred and are due and payable, any legal or other
expenses reasonably incurred by a Company Indemnified Person in connection with
investigating or defending any such Claim; provided, however, that the indemnity
agreement contained in this Section 6(b) and the agreement with respect to
contribution contained in Section 7 shall not apply to amounts paid in
settlement of any Claim if such settlement is effected without the prior written
consent of such Investor, which consent shall not be unreasonably withheld or
delayed; provided, further, however, that an Investor shall be liable under this
Section 6(b) for only that amount of a Claim or Indemnified Damages as does not
exceed the net proceeds to such Investor as a result of the sale of Registrable
Securities pursuant to such Registration Statement. Such indemnity shall remain
in full force and effect regardless of any investigation made by or on behalf of
such Company Indemnified Person and shall survive the transfer of the
Registrable Securities by the Investor(s) pursuant to Section 9. Notwithstanding
anything to the contrary contained herein, the indemnification agreement
contained in this Section 6(b) with respect to any preliminary prospectus shall
not inure to the benefit of any Company Indemnified Person if the untrue
statement or omission of material fact contained in the preliminary prospectus
was corrected on a timely basis in the prospectus, as then amended or
supplemented.

 

(c) If either an Investor Indemnified Person or a Company Indemnified Person (an
“Indemnified Person”) proposes to assert a right to be indemnified under this
Section 6, such Indemnified Person shall notify either Exelixis or the relevant
Investor(s), as applicable (the “Indemnifying Person”), promptly after receipt
of notice of commencement of any action, suit or proceeding against such
Indemnified Person (an “Indemnified Proceeding”) in respect of which a Claim is
to be made under this Section 6, or the incurrence or realization of any
Indemnified Damages in respect of which a Claim is to be made under this Section
6, 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 Person promptly of any such Indemnified Proceeding or

 

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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
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incurrence or realization shall not relieve (x) such Indemnifying Person from
any liability that it may have to such Indemnified Person under this Section 6
or otherwise, except, as to such Indemnifying Person’s liability under this
Section 6, to the extent, but only to the extent, that such Indemnifying Person
shall have been prejudiced by such omission, or (y) any other Indemnifying
Person from liability that it may have to any Indemnified Person under the
Operative Documents.

 

(d) In case any Indemnified Proceeding shall be brought against any Indemnified
Person and it shall notify the applicable Indemnifying Person of the
commencement thereof as provided by Section 6(c) and such Indemnifying Person
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 Person and is not a criminal or
regulatory action, to assume the defense of, such Indemnified Proceeding with
counsel reasonably satisfactory to such Indemnified Person, and after notice
from such Indemnifying Person to such Indemnified Person of such Indemnifying
Person’s election so to assume the defense thereof and the failure by such
Indemnified Person to object to such counsel within ten (10) Business Days
following its receipt of such notice, such Indemnifying Person shall not be
liable to such Indemnified Person 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 Person reasonably necessary in connection with the defense
thereof. Such Indemnified Person 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 Person unless:

 

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

 

(ii) such Indemnified Person shall have reasonably concluded in its 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 the applicable Indemnifying Person and such
Indemnified Person 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 Person
(it being agreed that in any case referred to in this clause (ii) such
Indemnifying Person shall not have the right to direct the defense of such
Indemnified Proceeding on behalf of the Indemnified Person);

 

(iii) the applicable Indemnifying Person shall not have employed counsel
reasonably acceptable to the Indemnified Person, to assume the defense of such
Indemnified Proceeding within a reasonable time after notice of the commencement
thereof (provided, however, that this clause shall not be deemed to constitute a
waiver of any conflict of interest that may arise with respect to any such
counsel); or

 

(iv) any counsel employed by the applicable Indemnifying Person shall fail to
timely commence or diligently conduct the defense of such Indemnified
Proceeding;

 

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COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
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in each of which cases the fees and expenses of counsel for such Indemnified
Person shall be at the expense of such Indemnifying Person. Only one counsel
shall be retained by all Indemnified Persons with respect to any Indemnified
Proceeding, unless counsel for any Indemnified Person 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 Person and one or more
other Indemnified Persons 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 Person.

 

(e) Without the prior written consent of such Indemnified Person, such
Indemnifying Person 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 Person 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 finding or
admission of any violation of law or the rights of any Person by the Indemnified
Person, and (iv) is not in the nature of a criminal or regulatory action. No
Indemnified Person shall settle or compromise, or consent to the entry of any
judgment in, any pending or threatened Indemnified Proceeding in respect of
which any payment would result hereunder or under the Operative Documents
without the prior written consent of the Indemnifying Person, such consent not
to be unreasonably conditioned, withheld or delayed.

 

(f) The indemnification required by this Section 6 shall be made by periodic
payments of the amount of Claims during the course of the investigation or
defense, as and when Indemnified Damages are incurred.

 

Section 7. Contribution. To the extent any indemnification by an indemnifying
Person is prohibited or limited by law, the indemnifying party agrees to make
the maximum contribution with respect to any amounts for which it would
otherwise be liable under Section 6 to the fullest extent permitted by law;
provided, however, that: (i) no Person involved in the sale of Registrable
Securities which Person is guilty of fraudulent misrepresentation (within the
meaning Section 11(f) of the Securities Act) in connection with such sale shall
be entitled to contribution from any Person involved in such sale of Registrable
Securities who was not guilty of fraudulent misrepresentation; and (ii)
contribution by any seller of Registrable Securities shall be limited in amount
to the net amount of proceeds received by such seller from the sale of such
Registrable Securities pursuant to such Registration Statement.

 

Section 8. Reports Under The 1934 Act. With a view to making available to the
Investor(s) the benefits of Rule 144 promulgated under the Securities Act or any
other similar rule or regulation of the SEC that may at any time permit the
Investor(s) to sell securities of Exelixis to the public without registration
(“Rule 144”), Exelixis agrees to use commercially reasonable efforts to:

 

(a) make and keep public information available, as those terms are understood
and defined in Rule 144;

 

(b) file with the SEC in a timely manner all reports and other documents

 

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AMENDED.

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required of Exelixis under the Securities Act and the 1934 Act so long as
Exelixis remains subject to such requirements and the filing of such reports and
other documents is required for the applicable provisions of Rule 144; and

 

(c) furnish to each Investor so long as such Investor owns Registrable
Securities, promptly upon request, (i) a written statement by Exelixis, if true,
that it has complied with the reporting requirements of Rule 144, the Securities
Act and the 1934 Act, (ii) a copy of the most recent annual or quarterly report
of Exelixis and such other reports and documents so filed by Exelixis, and (iii)
such other information as may be reasonably requested to permit the Investor(s)
to sell such securities pursuant to Rule 144 without registration.

 

Section 9. Assignment of Registration Rights. The rights under this Agreement
shall be automatically assignable by the Investor(s) to any transferee of all or
at least 50,000 shares of such Investor’s Registrable Securities (or if an
Investor shall hold less than 50,000 such shares, then a transfer of all such
shares) if: (i) the Investor agrees in writing with the transferee or assignee
to assign such rights, and a copy of such agreement is furnished to Exelixis
within a reasonable time after such assignment; (ii) Exelixis is, within a
reasonable time after such transfer or assignment, furnished with written notice
of (A) the name and address of such transferee or assignee, and (B) the
securities with respect to which such registration rights are being transferred
or assigned; (iii) immediately following such transfer or assignment the further
disposition of such securities by the transferee or assignee is restricted under
the Securities Act and applicable state securities laws; (iv) at or before the
time Exelixis receives the written notice contemplated by clause (ii) of this
sentence the transferee or assignee agrees in writing with Exelixis to be bound
by all of the provisions contained herein; and (v) such transfer shall have been
made in accordance with the applicable requirements, if any, of the Purchase
Option Agreement.

 

Section 10. Amendment of Registration Rights.

 

(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 (i) Exelixis and (ii) Investor(s) holding a majority of the
Registrable Securities (other than in the case of any alteration, modification,
amendment, waiver or supplement which affects any individual Investor in a
manner that is less favorable or more detrimental to such Investor than to the
other Investor(s) solely based on the face of such alteration, modification,
amendment, waiver or supplement and without regard to the number of Registrable
Securities held by such Investor, in which case, such alteration, modification,
amendment, waiver or supplement must also be approved by such less favorably or
more detrimentally treated Investor).

 

(b) Notwithstanding Section 10(a), any party hereto may waive, solely with
respect to itself, any one or more of its rights hereunder without the consent
of any other party hereto; provided that no such waiver shall be effective
unless set forth in a written instrument executed by the party against whom such
waiver is to be effective.

 

Section 11. Miscellaneous.

 

(a) A Person is deemed to be a holder of Registrable Securities whenever such

 

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COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
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Person owns or is deemed to own of record such Registrable Securities. If
Exelixis receives conflicting instructions, notices or elections from two or
more Persons with respect to the same Registrable Securities, Exelixis shall act
upon the basis of instructions, notice or election received from the such record
owner of such Registrable Securities.

 

(b) Any notice, request, demand, waiver, consent, approval or other
communication which is required or permitted to be given to any party hereto
shall be in writing and shall be deemed given only if delivered to the party
personally or sent to the party by facsimile transmission (promptly followed by
a hard-copy delivered in accordance with this Section 11(b)), by next Business
Day delivery by a nationally recognized courier service, or by registered or
certified mail (return receipt requested), with postage and registration or
certification fees thereon prepaid, addressed to the party at its address set
forth below:

 

If to Exelixis:

 

Exelixis, Inc.

170 Harbor Way

South San Francisco, CA 94083

Attention: Corporate Secretary

Facsimile: (650) 837-7951

 

with a copy to:

 

Cooley Godward LLP

Five Palo Alto Square

3000 El Camino Real

Palo Alto, CA 94306

Attention: Suzanne Sawochka Hooper

Facsimile: (650) 849-7400

 

If to Holdings:

 

Symphony Evolution Holdings LLC

7361 Calhoun Place, Suite 325

Rockville, MD 20850

Attn: Joseph P. Clancy

Facsimile: (301) 762-6154

 

with a copy to:

 

Symphony Capital Partners, L.P.

875 Third Avenue, 18th Floor

New York, NY 10022

Facsimile: (212) 632-5401

 

and

 

Symphony Strategic Partners, LLC

875 Third Avenue, 18th Floor

New York, NY 10022

Facsimile: (212) 632-5401

 

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COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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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.

 

(c) 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 Holdings, and to such extent this Agreement shall
be governed and construed in accordance with the laws of the State of Delaware.

 

(d) Each of the parties hereto hereby irrevocably and unconditionally submits,
for itself and its property, to the nonexclusive jurisdiction of any New York
State court, any 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 hereto 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 hereto 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 hereto may
otherwise have to bring any action or proceeding relating to this Agreement.

 

(e) Each of the parties hereto 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 hereto 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 consent to service of process by mail.

 

(f) 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.

 

(g) Entire Agreement. This Agreement (including any Annexes, Schedules, Exhibits
or other attachments hereto) constitutes the entire agreement between the
parties hereto with respect to the matters covered hereby and supersedes all
prior agreements and understandings with respect to such matters between the
parties hereto.

 

(h) Amendment; Successors; Assignment; Counterparts.

 

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COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
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(i) The terms of this Agreement shall not be waived, altered, modified, amended
or supplemented in any manner whatsoever except by a written instrument signed
by each of the parties hereto.

 

(ii) Nothing expressed or implied herein is intended or shall be construed to
confer upon or to give to any Person, other than the parties hereto, 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 hereto and their successors and permitted assigns provided, however,
that, subject to the requirements of Section 9, this Agreement shall inure to
the benefit of and be binding upon the permitted successors and assigns of each
of the parties hereto.

 

(iii) Any party hereto may waive, solely with respect to itself, any one or more
of its rights hereunder without the consent of any other party hereto; provided,
that no such waiver shall be effective unless set forth in a written instrument
executed by the party hereto against whom such waiver is to be effective.

 

(iv) 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.

 

(i) Each party shall do and perform, or cause to be done and performed, all such
further acts and things, and shall execute and deliver all such other
agreements, certificates, instruments and documents, as any other party may
reasonably request in order to carry out the intent and accomplish the purposes
of this Agreement and the consummation of the transactions contemplated hereby.

 

(j) All consents and other determinations required to be made by the Investor(s)
pursuant to this Agreement shall be made, unless otherwise specified in this
Agreement, by Investor(s) holding at least a majority of the Registrable
Securities.

 

{SIGNATURES FOLLOW ON NEXT PAGE}

 

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COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective officers or other representatives thereunto duly authorized,
as of the date first above written.

 

 

EXELIXIS, INC.

By:

 

/s/ Christoph Pereira

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Name:

 

Christoph Pereira

   

Title:

 

Vice President, Legal Affairs and Secretary

 

 

SYMPHONY EVOLUTION HOLDINGS LLC

By:

 

Symphony Capital Partners, L.P.,

its managing member

By:

 

Symphony Capital GP, L.P.,

its general partner

By:

 

Symphony GP, LLC,

its general partner

 

By:

 

/s/ Mark Kessel

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Name:

 

Mark Kessel

   

Title:

 

Managing Member

 

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.