Exhibit 10.2
***Text Omitted and Filed Separately
with the Securities and Exchange Commission.
Confidential Treatment Requested
Under 17 C.F.R. Sections 200.80(b)(4)
and 240.24b-2.
PACIFIC BIOSCIENCES OF CALIFORNIA, INC.
SERIES F PREFERRED STOCK PURCHASE AGREEMENT
June 16, 2010

 

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TABLE OF CONTENTS

              Page
1. AGREEMENT TO SELL AND PURCHASE
    1  
1.1 Authorization of Shares
    1  
1.2 Sale and Purchase
    1    
2. CLOSING, DELIVERY AND PAYMENT
    1  
2.1 Closing
    1  
2.2 Delivery
    2    
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
    2  
3.1 Organization, Good Standing and Qualification
    2  
3.2 Subsidiaries
    2  
3.3 Capitalization; Voting Rights
    3  
3.4 Authorization; Binding Obligations
    4  
3.5 Financial Statements
    5  
3.6 Liabilities
    5  
3.7 Agreements; Action
    5  
3.8 Obligations to Related Parties
    6  
3.9 Changes
    6  
3.10 Title to Properties and Assets; Liens, Etc.
    7  
3.11 Intellectual Property
    7  
3.12 Compliance with Other Instruments
    8  
3.13 Litigation
    9  
3.14 Tax Returns and Payments
    9  
3.15 Employees
    9  
3.16 Registration Rights and Voting Rights
    10  
3.17 Compliance with Laws; Permits
    10  
3.18 Offering Valid
    10  
3.19 Minute Books
    11  
3.20 Real Property Holding Corporation
    11  
3.21 Disclosure
    11  
3.22 Employee Benefit Plans
    11  
3.23 Employee Relations to Management
    11  
3.24 Environmental and Safety Laws
    11  
3.25 Insurance
    11  
3.26 No Restricted Persons
    11    
4. REPRESENTATIONS AND WARRANTIES OF PURCHASERS
    12  
4.1 Requisite Power and Authority
    12  
4.2 Investment Representations
    12  
4.3 Transfer Restrictions
    14  

 

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TABLE OF CONTENTS
(Continued)

              Page
5. CONDITIONS TO CLOSING
    14  
5.1 Conditions to Purchasers’ Obligations at the Initial Closing
    14  
5.2 Conditions to Obligations of the Company
    15    
6. MISCELLANEOUS
    16  
6.1 Governing Law
    16  
6.2 Survival
    16  
6.3 Successors and Assigns
    16  
6.4 Entire Agreement
    17  
6.5 Severability
    17  
6.6 Amendment and Waiver
    17  
6.7 Delays or Omissions
    17  
6.8 Waiver of Conflicts
    17  
6.9 Notices
    18  
6.10 Expenses
    18  
6.11 Attorneys’ Fees
    19  
6.12 Titles and Subtitles
    19  
6.13 Counterparts
    19  
6.14 Broker’s Fees
    19  
6.15 Exculpation Among Purchasers
    19  
6.16 Rights of Purchasers
    19  
6.17 No Commitment for Additional Financing
    19  
6.18 Pronouns
    20  
6.19 California Corporate Securities Law
    20  

-ii-

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PACIFIC BIOSCIENCES OF CALIFORNIA, INC.
SERIES F PREFERRED STOCK PURCHASE AGREEMENT
     THIS SERIES F PREFERRED STOCK PURCHASE AGREEMENT (this “Agreement”) is made
and entered into as of June 16, 2010, by and among PACIFIC BIOSCIENCES OF
CALIFORNIA, INC., a Delaware corporation (the “Company”), and each of those
persons and entities, severally and not jointly, whose names are set forth on
the Schedule of Purchasers attached hereto as Exhibit A (which persons and
entities are hereinafter collectively referred to as “Purchasers” and each
individually as a “Purchaser”).
     THE PARTIES HEREBY AGREE AS FOLLOWS:
     1. AGREEMENT TO SELL AND PURCHASE
          1.1 Authorization of Shares. The Company has authorized (a) the sale
and issuance to Purchasers of up to an aggregate of [...***...] shares of its
Series F Preferred Stock (the “Shares”) and (b) the shares of Junior Preferred
Stock and Common Stock issuable upon conversion of the shares of Series F
Preferred Stock and the shares of Common Stock issuable upon conversion of any
such shares of Junior Preferred Stock (the “Conversion Shares”). The Shares and
the Conversion Shares have the rights, preferences, privileges and restrictions
set forth in the Amended and Restated Certificate of Incorporation of the
Company, in the form attached hereto as Exhibit B (the “Restated Charter”).
          1.2 Sale and Purchase. Subject to the terms and conditions hereof, at
the Closing (as hereinafter defined) the Company hereby agrees to issue and sell
to each Purchaser, severally and not jointly, and each Purchaser agrees to
purchase from the Company, severally and not jointly, the number of Shares set
forth opposite such Purchaser’s name on Exhibit A, at a purchase price of
[...***...] ($[...***...]) per share.
     2. CLOSING, DELIVERY AND PAYMENT.
          2.1 Closing.
               (a) The purchase, sale and issuance of the shares shall take
place at one or more closings (each of which is referred to in this Agreement as
a “Closing”). The initial Closing of the sale and purchase of the Shares under
this Agreement (the “Initial Closing”) shall take place at 1:00 p.m. local time
on the date hereof, at the offices of Wilson Sonsini Goodrich & Rosati,
Professional Corporation, 650 Page Mill Road, Palo Alto, California, 94304 or at
such other time or place as the Company and Purchasers may mutually agree.
               (b) If less than all of the Shares are sold and issued at the
Initial Closing, then, subject to the terms and conditions of this Agreement,
the Company may sell and issue at one or more subsequent Closings (each, a
“Subsequent Closing”), within 90 days after the Initial Closing,
***Confidential Treatment Requested

1

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up to the balance of the unissued Shares to such persons or entities as may be
approved by the Company. Any such sale and issuance in a Subsequent Closing
shall be on the same terms and conditions as those contained herein, and such
persons or entities shall, upon execution and delivery of the relevant signature
pages, become parties to, and be bound by, this Agreement, the Fifth Amended and
Restated Investor Rights Agreement in substantially the form attached hereto as
Exhibit C (the “Investor Rights Agreement”), the Fifth Amended and Restated
Right of First Refusal and Co-Sale Agreement in substantially the form attached
hereto as Exhibit D (the “Co-Sale Agreement”), and the Fifth Amended and
Restated Voting Agreement in substantially the form attached hereto as Exhibit E
(the “Voting Agreement,” and together with this Agreement, the Co-Sale Agreement
and the Investor Rights Agreement, the “Related Agreements”), without the need
for an amendment to any of the Related Agreements except to add such person’s or
entity’s name to the appropriate exhibit to such Related Agreements, and shall
have the rights and obligations hereunder and thereunder, in each case as of the
date of the applicable Subsequent Closing. The Company will promptly furnish to
each Purchaser copies of the amended exhibits referred to in the preceding
sentence. Each Subsequent Closing shall take place at such date, time and place
as shall be approved by the Company in its sole discretion.
          2.2 Delivery. At each Closing, subject to the terms and conditions
hereof, the Company will deliver to each Purchaser a certificate representing
the number of Shares to be purchased at the Closing by such Purchaser, against
payment of the purchase price therefor by check, wire transfer made payable to
the order of the Company, cancellation or conversion of indebtedness or any
combination of the foregoing, [...***...].
     3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
     Except as set forth on a Schedule of Exceptions delivered by the Company to
Purchasers at the applicable Closing, the Company hereby represents and warrants
to each Purchaser as follows:
          3.1 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. The Company has all requisite corporate power and
authority to conduct its business, own and operate its properties and assets, to
execute and deliver this Agreement and the Investor Rights Agreement, Co-Sale
Agreement and Voting Agreement, to issue and sell the Shares and the Conversion
Shares, and to carry out the provisions of this Agreement, the Related
Agreements and the Restated Charter and to carry on its business as presently
conducted and as proposed to be conducted. The Company is duly qualified to do
business and is in good standing as a foreign corporation in all jurisdictions
in which the nature of its activities and of its properties (both owned and
leased) makes such qualification necessary, except for those jurisdictions in
which failure to do so would not have a material adverse effect on the Company
or its business, properties, assets or financial condition.
          3.2 Subsidiaries. The Company does not own or control any equity
security or other interest of any other corporation, limited partnership or
other business entity. The Company is not a participant in any joint venture,
partnership or similar arrangement. Since its inception, the
***Confidential Treatment Requested

2

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Company has not consolidated or merged with, acquired all or substantially all
of the assets of, or acquired the stock of or any interest in any corporation,
partnership, association, or other business entity.
          3.3 Capitalization; Voting Rights.
               (a) The authorized capital stock of the Company, immediately
prior to the Initial Closing, consists of (i) 121,668,835 shares of Common
Stock, par value $0.0001 per share, [...***...] of which are issued and
outstanding, (ii) 153,394,052 shares of Preferred Stock, par value $0.0001 per
share, 5,405,992 of which are designated Series A Preferred Stock, [...***...]
of which are issued and outstanding, (iii) 3,530,768 shares of Series B
Preferred Stock, par value $0.0001 per share, [...***...] shares of which are
issued and outstanding, (iv) 5,342,197 shares of Series C Preferred Stock, par
value $0.0001 per share, [...***...] of which are issued and outstanding,
(v) 12,525,000 shares of Series D Preferred Stock, [...***...] of which are
issued and outstanding, (vi) 26,866,790 shares of Series E Preferred Stock,
[...***...] of which are issued and outstanding, (vii) 19,659,240 shares of
Series F Preferred Stock, [...***...] of which are issued and outstanding, and
(viii) 80,064,065 shares of Junior Preferred Stock, [...***...] shares of which
are issued and outstanding. Attached to this Agreement as Exhibit G is a
complete list of all stockholders, option holders, warrant holders, convertible
note holders and other security holders of the Company (and their respective
holdings) as of immediately prior to the Closing.
               (b) Under the Company’s 2004 Equity Incentive Plan (the “2004
Plan”), (i) [...***...] shares of Junior Preferred Stock have been issued
pursuant to restricted stock purchase agreements and/or the exercise of
outstanding options and are included in 3.3(a)(viii) above, (ii) options to
purchase [...***...] shares of Junior Preferred Stock are currently outstanding,
and (iii) [...***...] options to purchase shares of Junior Preferred Stock
remain available for future issuance to officers, directors, employees and
consultants of the Company under the 2004 Plan.
               (c) Under the Company’s 2005 Equity Incentive Plan (the “2005
Plan,” together with the 2004 Plan, the “Plans”), (i) [...***...] shares of
Common Stock are currently outstanding pursuant to restricted stock purchase
agreements and/or the exercise of outstanding options and are included in
3.3(a)(i) above, (ii) [...***...] options to purchase shares of Common Stock are
currently outstanding, and (iii) [...***...] shares of Common Stock remain
available for future issuance to officers, directors, employees and consultants
of the Company.
               (d) Other than the shares reserved for issuance under the Plans
and except as may be granted pursuant to this Agreement and the Related
Agreements, there are no outstanding options, warrants, rights (including
conversion or preemptive rights and rights of first refusal), proxy or
stockholder agreements, or agreements of any kind for the purchase or
acquisition from the Company of any of its securities.
               (e) All issued and outstanding shares of the Company’s Common
Stock and Preferred Stock (i) have been duly authorized and validly issued and
are fully paid and nonassessable, (ii) were issued in compliance with all
applicable state and federal laws concerning
***Confidential Treatment Requested

3

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the issuance of securities and (iii) solely with respect to the Common Stock or
Junior Preferred Stock not issued upon the conversion of Preferred Stock, are
subject to a right of first refusal in favor of the Company upon transfer.
               (f) The rights, preferences, privileges and restrictions of the
Shares and the Conversion Shares are as stated in the Restated Charter. The
Conversion Shares have been duly and validly reserved for issuance. When issued
in compliance with the provisions of this Agreement and the Restated Charter,
the Shares and the Conversion Shares will be validly issued, fully paid and
nonassessable, and will be free of any liens or encumbrances other than liens
and encumbrances created by or imposed by Purchasers; provided, however, that
the Shares and the Conversion Shares may be subject to restrictions on transfer
under state and/or federal securities laws as set forth herein or as otherwise
required by such laws at the time a transfer is proposed.
               (g) All options granted and Common Stock or Junior Preferred
Stock issued (other than upon conversion of Preferred Stock) vest as follows:
twenty-five percent (25%) of the shares vest one (1) year following the vesting
commencement date, with the remaining seventy-five percent (75%) vesting in
equal monthly installments over the three (3) years following the anniversary of
the vesting commencement date. No stock plan, stock purchase, stock option or
other agreement or understanding between the Company and any holder of any
equity securities or rights to purchase equity securities provides for
acceleration or other changes in the vesting provisions or other terms of such
agreement or understanding as the result of (i) termination of employment or
consulting services (whether actual or constructive); (ii) any merger,
consolidated sale of stock or assets, change in control or any other
transaction(s) by the Company; or (iii) the occurrence of any other event or
combination of events.
               (h) All outstanding shares of Common Stock and Preferred Stock,
and all shares of Common Stock and Preferred Stock issuable upon the exercise or
conversion of outstanding options, warrants or other exercisable or convertible
securities are subject to a market standoff or “lockup” agreement of not less
than 180 days following the Company’s initial public offering.
          3.4 Authorization; Binding Obligations. All corporate action on the
part of the Company and its directors and stockholders necessary for the
authorization of this Agreement and the Related Agreements, the performance of
all obligations of the Company hereunder and thereunder at the Closing and the
authorization, sale, issuance and delivery of the Shares pursuant hereto and the
Conversion Shares pursuant to the Restated Charter has been taken. The Agreement
and the Related Agreements, when executed and delivered, will be valid and
binding obligations of the Company enforceable in accordance with their terms,
except (a) as limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other laws of general application affecting enforcement of
creditors’ rights, (b) general principles of equity that restrict the
availability of equitable remedies, and (c) to the extent that the
enforceability of the indemnification provisions in the Investor Rights
Agreement may be limited by applicable laws. The sale of the Shares and the
subsequent conversion of the Shares into Conversion Shares are not and will not
be subject to any preemptive rights or rights of first refusal that have not
been properly waived or complied with.

4

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          3.5 Financial Statements. The Company has made available to each
Purchaser its unaudited balance sheet as at December 31, 2009 (the “Statement
Date”) and unaudited consolidated statements of income and cash flows for the
12-month period ending on the Statement Date (collectively, the “Financial
Statements”). The Financial Statements, together with the notes thereto, have
been prepared in accordance with generally accepted accounting principles
applied on a consistent basis throughout the periods indicated, except as
disclosed therein, and present fairly the financial condition and position of
the Company as of the Statement Date; provided, however, that the Financial
Statements are subject to year-end audit adjustments (which are not expected to
be material either individually or in the aggregate), and do not contain all
footnotes required under generally accepted accounting principles.
          3.6 Liabilities. The Company has no material liabilities, contingent
or otherwise, not disclosed in the Financial Statements, except current
liabilities incurred in the ordinary course of business subsequent to the
Statement Date which have not been, either in any individual case or in the
aggregate, material to the financial condition or operation of the Company. The
Company maintains and will continue to maintain a standard system of accounting
established and administered in accordance with generally accepted accounting
principles.
          3.7 Agreements; Action.
               (a) Except for agreements explicitly contemplated hereby and
agreements between the Company and its employees with respect to the sale of the
Company’s Common Stock pursuant to the Plans, there are no agreements,
understandings or proposed transactions between the Company and any of its
officers, directors, employees, affiliates or any affiliate thereof.
               (b) There are no agreements, understandings, instruments,
contracts, proposed transactions, judgments, orders, writs or decrees to which
the Company is a party or by which it is bound which may involve (i) future
obligations (contingent or otherwise) of, or payments to, the Company in excess
of $50,000, or (ii) the transfer or license of any patent, copyright, trade
secret or other proprietary right to or from the Company (other than licenses by
the Company of “off the shelf” or other standard products, each of which
agreements are not, individually, material to the Company’s business),
(iii) provisions restricting or affecting the development, manufacture or
distribution of the Company’s products or services, or (iv) indemnification by
the Company with respect to infringements of proprietary rights (other than
indemnification obligations arising from purchase, sale or license agreements
entered into in the ordinary course of business).
               (c) The Company has not (i) declared or paid any dividends, or
authorized or made any distribution upon or with respect to any class or series
of its capital stock, (ii) incurred or guaranteed any indebtedness for money
borrowed or any other liabilities (other than with respect to dividend
obligations, distributions, indebtedness and other obligations incurred in the
ordinary course of business or as disclosed in the Financial Statements)
individually in excess of $25,000 or, in the case of indebtedness and/or
liabilities individually less than $25,000, in excess of $50,000 in the
aggregate, (iii) made any loans or advances to any person, other than ordinary
advances for travel

5

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expenses, or (iv) sold, exchanged or otherwise disposed of any of its assets or
rights, other than the sale of its inventory in the ordinary course of business.
               (d) For the purposes of subsections (b) and (c) above, all
indebtedness, liabilities, agreements, understandings, instruments, contracts
and proposed transactions involving the same person or entity (including persons
or entities the Company has reason to believe are affiliated therewith) shall be
aggregated for the purpose of meeting the individual minimum dollar amounts of
such subsections.
          3.8 Obligations to Related Parties. There are no obligations of the
Company to officers, directors, stockholders, or employees of the Company other
than (a) for payment of salary for services rendered, (b) reimbursement for
reasonable expenses incurred on behalf of the Company and (c) for other standard
employee benefits made generally available to all employees (including stock
option agreements outstanding under any stock option plan approved by the Board
of Directors of the Company).
          3.9 Changes. Since the Statement Date, there has not been:
               (a) Any change in the assets, liabilities, financial condition or
operations of the Company from that reflected in the Financial Statements, other
than changes in the ordinary course of business, none of which individually or
in the aggregate has had a material adverse effect on such assets, liabilities,
financial condition or operations of the Company;
               (b) Any resignation or termination of any officer, key employee
or group of employees of the Company;
               (c) Any material change, except in the ordinary course of
business, in the contingent obligations of the Company by way of guaranty,
endorsement, indemnity, warranty or otherwise;
               (d) Any damage, destruction or loss, whether or not covered by
insurance, materially and adversely affecting the assets, properties, business
or financial condition of the Company, or that would reasonably be expected to
materially and adversely affect the prospects of the Company;
               (e) Any waiver by the Company of a valuable right or of a
material debt owed to it;
               (f) Any material change in any compensation arrangement or
agreement with any employee, officer, director or stockholder;
               (g) Any labor organization activity related to the Company;
               (h) Any sale, assignment, or exclusive license or transfer of any
patents, trademarks, copyrights, trade secrets or other intangible assets;

6

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               (i) Any change in any agreement to which the Company is a party
or by which it is bound which materially and adversely affects the business,
assets, liabilities, financial condition or operations of the Company, or that
would reasonably be expected to materially and adversely affect the prospects of
the Company;
               (j) Any other event or condition of any character that, either
individually or cumulatively, has materially and adversely affected the
business, assets, liabilities, financial condition or operations of the Company;
or
               (k) Any arrangement or commitment by the Company to do any of the
acts described in subsection (a) through (j) above.
          3.10 Title to Properties and Assets; Liens, Etc. The Company has good
and marketable title to its properties and assets, including the properties and
assets reflected in the most recent balance sheet included in the Financial
Statements, and good title to its leasehold estates, in each case subject to no
mortgage, pledge, lien, lease, encumbrance or charge, other than (a) those
resulting from taxes which have not yet become delinquent, (b) minor liens and
encumbrances which do not materially detract from the value of the property
subject thereto or materially impair the operations of the Company, and
(c) those that have otherwise arisen in the ordinary course of business and do
not materially impair the Company’s use and ownership of such property and
assets. The Company is in compliance with all material terms of each lease to
which it is a party or is otherwise bound. The Company’s properties and assets
are in good condition and repair in all material respects, normal wear and tear
excepted.
          3.11 Intellectual Property.
               (a) To the best of its knowledge, the Company owns or possesses
sufficient legal rights to all patents, trademarks, service marks, trade names,
copyrights, trade secrets, licenses, information and other proprietary rights
and processes necessary for its business as now conducted and as presently
proposed to be conducted, without any known infringement of the rights of
others. There are no outstanding options, licenses or agreements of any kind
relating to the foregoing proprietary rights to which the Company is a party,
nor is the Company bound by or a party to any options, licenses or agreements of
any kind with respect to the patents, trademarks, service marks, trade names,
copyrights, trade secrets, licenses, information and other proprietary rights
and processes of any other person or entity other than such licenses or
agreements arising from the purchase of “off the shelf” or standard products.
               (b) The Company has not received any communications alleging that
the Company has violated or, by conducting its business as presently proposed,
would violate any of the patents, trademarks, service marks, trade names,
copyrights or trade secrets or other proprietary rights of any other person or
entity, nor is the Company aware of any basis therefor that has not previously
been disclosed to the Purchasers. To the Company’s knowledge, the Company has
not violated any of the patents, trademarks, service marks, trade names,
copyrights or trade secrets of any other person or entity.

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               (c) The Company is not aware that any of its employees is
obligated under any contract (including licenses, covenants or commitments of
any nature) or other agreement, or subject to any judgment, decree or order of
any court or administrative agency, that would interfere with their duties to
the Company or that would conflict with the Company’s business as proposed to be
conducted. Each current and former employee, officer and consultant of the
Company has executed a proprietary information and inventions agreement in the
form(s) as delivered to Purchasers. No current or former employee, officer or
consultant of the Company has excluded works or inventions made prior to his or
her employment with the Company from his or her assignment of inventions
pursuant to such employee, officer or consultant’s proprietary information and
inventions agreement. Neither the execution nor delivery of this Agreement or
the Related Agreements, or any amendments thereto, nor the carrying on of the
Company’s business by the employees of the Company, nor the conduct of the
Company’s business, will, to the best of the Company’s knowledge, conflict with
or result in a breach of the terms, conditions or provisions of, or constitute a
default under, any contract, covenant or instrument under which any of such
employees is now obligated. To the Company’s knowledge, no employee or officer
of the Company has used any patents, trademarks, service marks, trade names,
copyrights or trade secrets (collectively, the “Intellectual Property”) of a
third party (including, without limitation, development of any Company
Intellectual Property). The Company does not believe it is or will be necessary
to utilize any Intellectual Property of any of its employees (or people it
currently intends to hire) made prior to their employment by the Company, and at
present no such employee Intellectual Property forms a part of any Company
Intellectual Property except that which has already been assigned to the Company
by its employees or the Cornell Research Foundation, Inc. The Schedule of
Exceptions contains a complete list of patents and pending and provisional
patent applications owned by or exclusively licensed to the Company. The Company
has taken reasonable steps to protect and preserve the confidentiality of all
confidential, non-public information desired to be kept confidential by the
Company.
          3.12 Compliance with Other Instruments. The Company is not in
violation or default of any term of its charter documents, each as amended, or
of any provision of any mortgage, indenture, contract, agreement, instrument or
contract to which it is party or by which it or any of its assets or properties
is bound or of any judgment, decree, order or writ other than any such violation
that would not have a material adverse effect on the Company, its business,
properties, assets or financial condition. The execution, delivery, and
performance of and compliance with this Agreement, and the Related Agreements,
and the issuance and sale of the Shares pursuant hereto and of the Conversion
Shares pursuant to the Restated Charter, will not, with or without the passage
of time or giving of notice, result in any such material violation, or be in
conflict with or constitute a material default under any such term, or result in
the creation of any mortgage, pledge, lien, encumbrance or charge upon any of
the properties or assets of the Company or the suspension, revocation,
impairment, forfeiture or nonrenewal of any permit, license, authorization or
approval applicable to the Company, its business or operations or any of its
assets or properties. To its knowledge, the Company has not performed any act,
nor does any condition exist, the occurrence or existence of which would result
in the Company’s loss of any right granted under any license, distribution
agreement or other agreement required to be disclosed on the Schedule of
Exceptions.

8

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          3.13 Litigation. There is no action, suit, proceeding or investigation
pending or, to the Company’s knowledge, currently threatened in writing against
the Company that questions the validity of this Agreement, the Related
Agreements or the right of the Company to enter into any of such agreements, or
to consummate the transactions contemplated hereby or thereby, or which would
reasonably be expected to result, either individually or in the aggregate, in
any material adverse effect on the Company, or the business, properties, assets,
condition or affairs of the Company, financially or otherwise, or any change in
the current equity ownership of the Company, nor is the Company aware that there
is any basis for any of the foregoing. The foregoing includes, without
limitation, actions pending or, to the Company’s knowledge, threatened in
writing involving the prior employment of any of the Company’s employees, their
use in connection with the Company’s business of any information or techniques
allegedly proprietary to any of their former employers, or their obligations
under any agreements with prior employers. The Company is not a party or to its
knowledge subject to the provisions of any order, writ, injunction, judgment or
decree of any court or government agency or instrumentality. There is no action,
suit, proceeding or investigation by the Company currently pending or which the
Company intends to initiate.
          3.14 Tax Returns and Payments. The Company is and always has been a
subchapter C corporation. The Company has filed all tax returns (federal, state
and local) required to be filed by it and such returns are true and correct in
all material respects. All taxes shown to be due and payable on such returns,
any assessments imposed, and to the Company’s knowledge all other taxes due and
payable by the Company on or before the Closing, have been paid or will be paid
prior to the time they become delinquent. The Company has no knowledge of any
liability of any tax to be imposed upon its properties or assets as of the date
of this Agreement that is not adequately provided for. The Company has not been
advised (a) that any of its returns, federal, state or local, have been or are
being audited as of the date hereof, or (b) of any deficiency in assessment or
proposed adjustment to its federal, state or local taxes.
          3.15 Employees. The Company is not a party to nor bound by any
currently effective employment contract, deferred compensation arrangement,
bonus plan, incentive plan, profit sharing plan, retirement agreement or other
employee compensation plan or agreement. The Company has no collective
bargaining agreements with any of its employees. Subject to applicable law, the
employment of each officer and employee of the Company is terminable at the will
of the Company. To the Company’s knowledge, no employee of the Company, nor any
consultant with whom the Company has contracted, is in violation of any term of
any employment contract, proprietary information agreement or any other
agreement relating to the right of any such individual to be employed by, or to
contract with, the Company; and to the Company’s knowledge the continued
employment by the Company of its present employees, and the performance of the
Company’s contracts with its independent contractors, will not result in any
such violation. The Company has not received any notice alleging that any such
violation has occurred. No employee of the Company has been granted the right to
continued employment by the Company or to any material compensation following
termination of employment with the Company. The Company is not aware that any
officer, key employee or group of employees intends to terminate his, her or
their employment with the Company, nor does the Company have a present intention
to terminate the employment of any officer, key employee or group of employees.
There are no actions pending, or

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to the Company’s knowledge, threatened, by any former or current employee
concerning such person’s employment by the Company. To the best of its
knowledge, the Company has complied in all material respects with all applicable
state and federal laws and regulations respecting employment and employment
practices, terms and conditions of employment, wages and hours and other laws
related to employment, and there are no arrears in the payment of wages,
withholding or social security taxes, unemployment insurance premiums or other
similar obligation.
          3.16 Registration Rights and Voting Rights. Except as required
pursuant to the Investor Rights Agreement, the Company is presently not under
any obligation, and has not granted any rights, to register (as defined in
Section 1.1 of the Investor Rights Agreement) any of the Company’s presently
outstanding securities or any of its securities that may hereafter be issued. To
the Company’s knowledge, except as contemplated in the Voting Agreement, no
stockholder of the Company has entered into any agreement with respect to the
voting of equity securities of the Company.
          3.17 Compliance with Laws; Permits. The Company is not in violation of
any applicable statute, rule, regulation, order or restriction of any domestic
or foreign government or any instrumentality or agency thereof in respect of the
conduct of its business or the ownership of its properties which violation would
materially and adversely affect the business, assets, liabilities, financial
condition or operations of the Company or which could reasonably be expected to
materially and adversely affect the Company’s prospects. No United States
domestic governmental orders, permissions, consents, approvals or authorizations
are required to be obtained and no registrations or declarations are required to
be filed in connection with the execution and delivery of this Agreement or the
Related Agreements or the issuance of the Shares or the Conversion Shares,
except such as have been duly and validly obtained or filed, or with respect to
any filings that must be made after the Closing, as will be filed in a timely
manner. The Company has all franchises, permits, licenses and any similar
authority necessary for the conduct of its business as now being conducted by
it, the lack of which could materially and adversely affect the business,
properties or financial condition of the Company or which could reasonably be
expected to materially and adversely affect the Company’s prospects and believes
it can obtain, without undue burden or expense, any similar authority for the
conduct of its business as planned to be conducted. The Company is not in
default in any material respect under any of such franchises, permits, licenses
or other similar authority.
          3.18 Offering Valid. Assuming the accuracy of the representations and
warranties of Purchasers contained in Section 4.2 hereof, the offer, sale and
issuance of the Shares and the Conversion Shares will be exempt from the
registration requirements of the Securities Act of 1933, as amended (the
“Securities Act”), and will have been registered or qualified (or are exempt
from registration and qualification) under the registration, permit or
qualification requirements of all applicable state securities laws. Neither the
Company nor any agent on its behalf has solicited or will solicit any offers to
sell or has offered to sell or will offer to sell all or any part of the Shares
to any person or persons so as to bring the sale of such Shares by the Company
within the registration provisions of the Securities Act or any state securities
laws.

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          3.19 Minute Books. The minute books of the Company made available to
Purchasers who have requested the same contain a complete summary of all
meetings of directors and stockholders since the time of incorporation.
          3.20 Real Property Holding Corporation. The Company is not a real
property holding corporation within the meaning of Section 897(c)(2) of the
Internal Revenue Code of 1986, as amended, and any regulations promulgated
thereunder.
          3.21 Disclosure. The Company has provided each Purchaser with all the
information that such Purchaser has requested for deciding whether to purchase
the Shares and all information that the Company believes is reasonably necessary
to enable such Purchaser to make such decision. Neither this Agreement nor any
certificate furnished or to be furnished to the Purchasers at the Closing
contains any untrue statement of a material fact or, when taken together, omits
to state a material fact necessary to make the statements herein or therein, in
light of the circumstances under which they were made, not misleading. The
Company’s business plan, as delivered to the Purchasers, was prepared in good
faith by the Company. The Company does not represent or warrant that it will
achieve any results projected in such business plan.
          3.22 Employee Benefit Plans. The Company does not have any Employee
Benefit Plan as defined in the Employee Retirement Income Security Act of 1974.
          3.23 Employee Relations to Management. To its knowledge, no member of
the Company’s management is related by blood, marriage, legal adoption,
guardianship or other legally authorized custodial relationship to any Board
member or employee of the Company.
          3.24 Environmental and Safety Laws. To the Company’s knowledge, the
Company is not in violation of any applicable statute, law or regulation
relating to the environment or occupational health and safety, and to the
Company’s knowledge, no material expenditures are or will be required in order
to comply with any current environmental and safety statute, law or regulation.
          3.25 Insurance. The Company has in full force and effect general
commercial, fire, casualty insurance, products liability and errors and
omissions policies with coverage sufficient in amount it believes to allow it to
replace any of its properties that could be damaged or destroyed and customary
for companies similarly situated (as to business and financial resources) to the
Company.
          3.26 No Restricted Persons. To the Company’s knowledge, no officer,
director or employee of the Company is identified on any of the following
documents: (1) the Office of Foreign Assets Control of the United States
Department of the Treasury list of “Specially Designated Nationals and Blocked
Persons” (“SDNs”); (2) the Bureau of Industry and Security of the United States
Department of Commerce “Denied Persons List,” “Entity List” or “Unverified
List”; (3) the Office of Defense Trade Controls of the United States Department
of State “List of Debarred Parties”; (4) the Financial Sanctions Unit of the
Bank of England “Consolidated List”; (5) the

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Solicitor General of Canada’s “Anti-Terrorism Act Listed Entities”; (6) the
Australian Department of Foreign Affairs and Trade “Charter of the United
Nations (Anti-terrorism — Persons and Entities) List”; (7) the United Nations
Security Council Counter-Terrorism Committee “Consolidated List”; or
(8) European Union Commission Regulation No. 1996/2001 of October 11, 2001. The
Company is not involved in business arrangements or otherwise engages in
transactions with or involving countries subject to economic or trade sanctions
imposed by the United States Government, or with or involving SDNs or Cuban
nationals in violation of the regulations maintained by OFAC.
     4. REPRESENTATIONS AND WARRANTIES OF PURCHASERS.
     Each Purchaser hereby represents and warrants to the Company, severally and
not jointly, as follows (provided that such representations and warranties do
not lessen or obviate the representations and warranties of the Company set
forth in this Agreement):
          4.1 Requisite Power and Authority. Purchaser has all necessary power
and authority to execute and deliver this Agreement and the Related Agreements
and to carry out their provisions. All action on Purchaser’s part required for
the lawful execution and delivery of this Agreement and the Related Agreements
has been taken. Upon their execution and delivery, this Agreement and the
Related Agreements will be valid and binding obligations of Purchaser,
enforceable in accordance with their terms, except (a) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws of general
application affecting enforcement of creditors’ rights, (b) as limited by
general principles of equity that restrict the availability of equitable
remedies, and (c) to the extent that the enforceability of the indemnification
provisions of the Investor Rights Agreement may be limited by applicable laws.
          4.2 Investment Representations. Purchaser understands that neither the
Shares nor the Conversion Shares have been registered under the Securities Act.
Purchaser also understands that the Shares are being offered and sold pursuant
to an exemption from registration contained in the Securities Act based in part
upon Purchaser’s representations contained in the Agreement. Purchaser hereby
represents and warrants as follows:
               (a) Purchaser Bears Economic Risk. Purchaser has substantial
experience in evaluating and investing in private placement transactions of
securities in companies similar to the Company so that it is capable of
evaluating the merits and risks of its investment in the Company and has the
capacity to protect its own interests. Purchaser must bear the economic risk of
this investment indefinitely unless the Shares (or the Conversion Shares) are
registered pursuant to the Securities Act, or an exemption from registration is
available. Purchaser understands that the Company has no present intention of
registering the Shares, the Conversion Shares or any shares of its Common Stock.
Purchaser also understands that there is no assurance that any exemption from
registration under the Securities Act will be available and that, even if
available, such exemption may not allow Purchaser to transfer all or any portion
of the Shares or the Conversion Shares under the circumstances, in the amounts
or at the times Purchaser might propose.

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               (b) Acquisition for Own Account. Purchaser is acquiring the
Shares and the Conversion Shares for Purchaser’s own account or for the account
of its clients as an investment advisor for investment only, and not with a view
towards their distribution.
               (c) Purchaser Can Protect Its Interest. Purchaser represents that
by reason of its, or of its management’s, business or financial experience,
Purchaser has the capacity to protect its own interests in connection with the
transactions contemplated in this Agreement, and the Related Agreements.
Further, Purchaser is aware of no publication of any advertisement in connection
with the transactions contemplated in the Agreement.
               (d) Accredited Investor. Purchaser represents that it is an
accredited investor within the meaning of Regulation D under the Securities Act.
               (e) Company Information. Purchaser has had an opportunity to
discuss the Company’s business, management and financial affairs with directors,
officers and management of the Company and has had the opportunity to review the
Company’s operations and facilities. Purchaser has also had the opportunity to
ask questions of and receive answers from the Company and its management
regarding the terms and conditions of this investment.
               (f) Rule 144. Purchaser acknowledges and agrees that the Shares,
and, if issued, the Conversion Shares are “restricted securities” as defined in
Rule 144 promulgated under the Securities Act as in effect from time to time and
must be held indefinitely unless they are subsequently registered under the
Securities Act or an exemption from such registration is available. Purchaser
has been advised or is aware of the provisions of Rule 144, which permits
limited resale of shares purchased in a private placement subject to the
satisfaction of certain conditions, including, among other things: the
availability of certain current public information about the Company, the resale
occurring following the required holding period under Rule 144 and the number of
shares being sold during any three-month period not exceeding specified
limitations.
               (g) Residence. If Purchaser is an individual, then Purchaser
resides in the state or province identified in the address of Purchaser set
forth on Exhibit A; if Purchaser is a partnership, corporation, limited
liability company or other entity, then the office or offices of Purchaser in
which its investment decision was made is located at the address or addresses of
Purchaser set forth on Exhibit A.
               (h) Foreign Investors. If Purchaser is not a United States person
(as defined by Section 7701(a)(30) of the Internal Revenue Code of 1986, as
amended), Purchaser hereby represents that it has satisfied itself as to the
full observance of the laws of its jurisdiction in connection with any
invitation to subscribe for the Shares or any use of this Agreement, including
(i) the legal requirements within its jurisdiction for the purchase of the
Shares, (ii) any foreign exchange restrictions applicable to such purchase,
(iii) any government or other consents that may need to be obtained, and
(iv) the income tax and other tax consequences, if any, that may be relevant to
the purchase, holding, redemption, sale or transfer of the Shares. The Company’s
offer and sale and

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Purchaser’s subscription and payment for and continued beneficial ownership of
the Shares will not violate any applicable securities or other laws of
Purchaser’s jurisdiction.
          4.3 Transfer Restrictions. Each Purchaser acknowledges and agrees that
the Shares and, if issued, the Conversion Shares are subject to restrictions on
transfer as set forth in the Investor Rights Agreement.
     5. CONDITIONS TO CLOSING.
          5.1 Conditions to Purchasers’ Obligations at the Initial Closing.
Purchasers’ obligations to purchase the Shares at a Closing are subject to the
satisfaction, at or prior to the date of such Closing, of the following
conditions:
               (a) Representations and Warranties True; Performance of
Obligations. The representations and warranties made by the Company in Section 3
hereof together with the Schedule of Exceptions shall be true and correct as of
the date of such Closing with the same force and effect as if they had been made
as of the date of such Closing, and the Company shall have performed all
obligations and conditions herein required to be performed or observed by it on
or prior to the Closing.
               (b) Consents, Permits, and Waivers. The Company shall have
obtained any and all consents, permits and waivers necessary or appropriate for
consummation of the transactions contemplated by the Agreement and the Related
Agreements.
               (c) Filing of Restated Charter. The Restated Charter shall have
been filed with the Secretary of State of the State of Delaware and shall
continue to be in full force and effect as of the Closing.
               (d) Corporate Documents. The Company shall have delivered to
Purchasers or their counsel, copies of all corporate documents of the Company as
Purchasers shall reasonably request.
               (e) Reservation of Conversion Shares. The Conversion Shares
issuable upon conversion of the Shares shall have been duly authorized and
reserved for issuance upon such conversion.
               (f) Compliance Certificate. The Company shall have delivered to
Purchasers a Compliance Certificate, executed by the Chief Executive Officer of
the Company, dated the date of such Closing, to the effect that the conditions
specified in subsection (a) of this Section 5.1 have been satisfied.
               (g) Secretary’s Certificate. Purchasers shall have received from
the Company’s Secretary, a certificate having attached thereto (i) the Company’s
Restated Charter as in effect at the time of the Initial Closing, (ii) the
Company’s Bylaws as in effect at the time of the Initial Closing,
(iii) resolutions approved by the Board of Directors authorizing the
transactions

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contemplated hereby, (iv) resolutions approved by the Company’s stockholders
authorizing the filing of the Restated Charter, and (v) good standing
certificates (including tax good standing) with respect to the Company from the
applicable authority(ies) in Delaware and any other jurisdiction in which the
Company is qualified to do business, dated a recent date before such Closing.
               (h) Investor Rights Agreement. The Investor Rights Agreement
shall have been executed and delivered by the parties thereto.
               (i) Co-Sale Agreement. The Co-Sale Agreement shall have been
executed and delivered by the parties thereto. The stock certificates
representing the outstanding shares subject to the Co-Sale Agreement shall have
been delivered to the Secretary of the Company and shall have had appropriate
legends placed upon them to reflect the restrictions on transfer set forth in
the Co-Sale Agreement.
               (j) Voting Agreement. The Voting Agreement shall have been
executed and delivered by the parties thereto. The stock certificates
representing the outstanding shares subject to the Voting Agreement shall have
been delivered to the Secretary of the Company and shall have had appropriate
legends placed upon them to reflect the restrictions on transfer set forth in
the Voting Agreement.
               (k) Board of Directors. Upon the Initial Closing, the authorized
size of the Board of Directors of the Company shall be eight members and the
Board shall consist of Stephen Turner, Susan Siegel, William Ericson, Hugh
Martin, Brook Byers, Michael Hunkapiller, David Singer and Randy Livingston.
               (l) Legal Opinion. Purchasers shall have received from legal
counsel to the Company an opinion addressed to them, dated as of the Initial
Closing, in substantially the form attached hereto as Exhibit F.
               (m) Proceedings and Documents. All corporate and other
proceedings in connection with the transactions contemplated at the Initial
Closing hereby and all documents and instruments incident to such transactions
shall be reasonably satisfactory in substance and form to Purchasers and their
special counsel, and Purchasers and their special counsel shall have received
all such counterpart originals or certified or other copies of such documents as
they may reasonably request.
     5.2 Conditions to Obligations of the Company. The Company’s obligation to
issue and sell the Shares at each Closing is subject to the satisfaction, on or
prior to such Closing, of the following conditions:
               (a) Representations and Warranties True. The representations and
warranties in Section 4 made by those Purchasers acquiring Shares hereof shall
be true and correct at the date of the Initial Closing or the Subsequent
Closing, as applicable, with the same force and effect as if they had been made
on and as of said date.

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               (b) Performance of Obligations. Such Purchasers shall have
performed and complied with all agreements and conditions herein required to be
performed or complied with by such Purchasers on or before the applicable
Closing.
               (c) Filing of Restated Charter. The Restated Charter shall have
been filed with the Secretary of State of the State of Delaware.
               (d) Investor Rights Agreement. The Investor Rights Agreement
shall have been executed and delivered by Purchasers.
               (e) Co-Sale Agreement. The Co-Sale Agreement shall have been
executed and delivered by the parties thereto.
               (f) Voting Agreement. The Voting Agreement shall have been
executed and delivered by the parties thereto.
               (g) Consents, Permits, and Waivers. The Company shall have
obtained any and all consents, permits and waivers necessary or appropriate for
consummation of the transactions contemplated by the Agreement and the Related
Agreements.
     6. MISCELLANEOUS.
               6.1 Governing Law. This Agreement shall be governed by and
construed under the laws of the State of California in all respects as such laws
are applied to agreements among California residents entered into and performed
entirely within California, without giving effect to conflict of law principles
thereof.
               6.2 Survival. The representations, warranties, covenants and
agreements made herein shall survive the closing of the transactions
contemplated hereby. All statements as to factual matters contained in any
certificate or other instrument delivered by or on behalf of the Company
pursuant hereto in connection with the transactions contemplated hereby shall be
deemed to be representations and warranties by the Company hereunder solely as
of the date of such certificate or instrument. The representations, warranties,
covenants and obligations of the Company, and the rights and remedies that may
be exercised by the Purchasers, shall not be limited or otherwise affected by or
as a result of any information furnished to, or any investigation made by or
knowledge of, any of the Purchasers or any of their representatives.
               6.3 Successors and Assigns. Except as otherwise expressly
provided herein, the provisions hereof shall inure to the benefit of, and be
binding upon the parties hereto and their respective successors, assigns, heirs,
executors and administrators and shall inure to the benefit of and be
enforceable by each person who shall be a holder of the Shares from time to
time; provided, however, that prior to the receipt by the Company of adequate
written notice of the transfer of any Shares specifying the full name and
address of the transferee, the Company may deem and treat the person listed as
the holder of such Shares in its records as the absolute owner and holder of
such Shares for all purposes.

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          6.4 Entire Agreement. This Agreement, the exhibits and schedules
hereto, the Related Agreements and the other documents delivered pursuant hereto
constitute the full and entire understanding and agreement between the parties
with regard to the subjects hereof and no party shall be liable or bound to any
other in any manner by any oral or written representations, warranties,
covenants and agreements except as specifically set forth herein and therein.
Each party expressly represents and warrants that it is not relying on any oral
or written representations, warranties, covenants or agreements outside of the
Agreement and the Related Agreements.
          6.5 Severability. In the event one or more of the provisions of this
Agreement should, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provisions of this Agreement, and this Agreement
shall be construed as if such invalid, illegal or unenforceable provision had
never been contained herein.
          6.6 Amendment and Waiver.
               (a) Except as otherwise expressly provided for in Section 2.1(b),
this Agreement may be amended or modified only upon the written consent of the
Company and holders of a majority of the then outstanding Shares (treated as if
converted and including any Conversion Shares into which the then outstanding
Shares have been converted that have not been sold to the public).
               (b) The obligations of the Company and the rights of the holders
of the Shares and the Conversion Shares under the Agreement may be waived only
with the written consent of the holders of a majority of the then outstanding
Shares (treated as if converted and including any Conversion Shares into which
the then outstanding Shares have been converted that have not been sold to the
public).
          6.7 Delays or Omissions. It is agreed that no delay or omission to
exercise any right, power or remedy accruing to any party, upon any breach,
default or noncompliance by another party under this Agreement, the Related
Agreements or the Restated Charter, shall impair any such right, power or
remedy, nor shall it be construed to be a waiver of any such breach, default or
noncompliance, or any acquiescence therein, or of or in any similar breach,
default or noncompliance thereafter occurring. It is further agreed that any
waiver, permit, consent or approval of any kind or character on any party’s part
of any breach, default or noncompliance under this Agreement, the Related
Agreements or under the Restated Charter or any waiver on such party’s part of
any provisions or conditions of the Agreement, the Related Agreements, or the
Restated Charter must be in writing and shall be effective only to the extent
specifically set forth in such writing. All remedies, either under this
Agreement, the Related Agreements, the Restated Charter, by law, or otherwise
afforded to any party, shall be cumulative and not alternative.
          6.8 Waiver of Conflicts. Each party to this Agreement acknowledges
that Wilson Sonsini Goodrich & Rosati, Professional Corporation (“WSGR”),
outside general counsel to the Company, has in the past performed and is or may
now or in the future represent one or more

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Purchasers or their affiliates in matters unrelated to the transactions
contemplated by this Agreement (the “Financing”), including representation of
such Purchasers or their affiliates in matters of a similar nature to the
Financing. The applicable rules of professional conduct require that WSGR inform
the parties hereunder of this representation and obtain their consent. WSGR has
served as outside general counsel to the Company and has negotiated the terms of
the Financing solely on behalf of the Company. The Company and each Purchaser
hereby (a) acknowledge that they have had an opportunity to ask for and have
obtained information relevant to such representation, including disclosure of
the reasonably foreseeable adverse consequences of such representation; (b)
acknowledge that with respect to the Financing, WSGR has represented solely the
Company, and not any Purchaser or any stockholder, director or employee of the
Company or any Purchaser; and (c) gives its informed consent to WSGR’s
representation of the Company in the Financing.
     [...***...].
          6.9 Notices. All notices required or permitted hereunder shall be in
writing and shall be deemed effectively given: (a) upon personal delivery to the
party to be notified, (b) when sent by confirmed electronic mail, telex or
facsimile if sent during normal business hours of the recipient, if not, then on
the next business day, (c) five (5) days after having been sent by registered or
certified mail, return receipt requested, postage prepaid, or (d) one (1) day
after deposit with a nationally recognized overnight courier, specifying next
day delivery, with written verification of receipt. All communications shall be
sent to the Company at the address as set forth on the signature page hereof and
to Purchaser at the address set forth on Exhibit A attached hereto or at such
other address or electronic mail address as the Company or Purchaser may
designate by ten (10) days advance written notice to the other parties hereto.
          6.10 Expenses. Each party shall pay all costs and expenses that it
incurs with respect to the negotiation, execution, delivery and performance of
the Agreement; provided, however, that the Company shall, at the Closing,
reimburse the reasonable fees and expenses of legal
***Confidential Treatment Requested

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counsel to the Purchasers, up to a total of $[...***...], allocated as follows:
(i) up to a total of $[...***...] for other Purchasers, and (ii) up to a total
of $[...***...] for the lead Purchaser.
          6.11 Attorneys’ Fees. In the event that any suit or action is
instituted under or in relation to this Agreement, including without limitation
to enforce any provision in this Agreement, the prevailing party in such dispute
shall be entitled to recover from the losing party all fees, costs and expenses
of enforcing any right of such prevailing party under or with respect to this
Agreement, including without limitation, such reasonable fees and expenses of
attorneys and accountants, which shall include, without limitation, all fees,
costs and expenses of appeals.
          6.12 Titles and Subtitles. The titles of the sections and subsections
of the Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.
          6.13 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
          6.14 Broker’s Fees. Each party hereto represents and warrants that no
agent, broker, investment banker, person or firm acting on behalf of or under
the authority of such party hereto is or will be entitled to any broker’s or
finder’s fee or any other commission directly or indirectly in connection with
the transactions contemplated herein. Each party hereto further agrees to
indemnify each other party for any claims, losses or expenses incurred by such
other party as a result of the representation in this Section 6.14 being untrue.
          6.15 Exculpation Among Purchasers. Each Purchaser acknowledges that it
is not relying upon any person, firm, or corporation, other than the Company and
its officers and directors, in making its investment or decision to invest in
the Company. Each Purchaser agrees that no Purchaser nor the respective
controlling persons, officers, directors, partners, agents, or employees of any
Purchaser shall be liable to any other Purchaser for any action heretofore or
hereafter taken or omitted to be taken by any of them in connection with the
Shares and Conversion Shares.
          6.16 Rights of Purchasers. Each Purchaser, in its sole and absolute
discretion, may exercise or refrain from exercising any rights or privileges
that such Purchaser may have pursuant to this Agreement, the Related Agreements,
the Restated Charter, the Company’s Bylaws or at law or in equity, and such
Purchaser shall not incur or be subject to any liability or obligation, any
other Purchaser or holder of Shares, any other stockholder or securityholder of
the Company or any other person, by reason of exercising or refraining from
exercising any such rights or privileges, provided, however that this provision
shall not relieve any Purchaser of their voting obligations pursuant to the
Voting Agreement.
          6.17 No Commitment for Additional Financing. The Company acknowledges
and agrees that no Purchaser has made any representation, undertaking,
commitment or agreement to provide or assist the Company in obtaining any
financing, investment or other assistance, other than
***Confidential Treatment Requested

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the purchase of the Shares as set forth in Section 1.2 and subject to the
conditions set forth in Section 5.1. In addition, the Company acknowledges and
agrees that (i) no statements, whether written or oral, made by any Purchaser or
its representatives on or prior to the date hereof shall have created an
obligation, commitment or agreement to provide or assist the Company in
obtaining any financing or investment, (ii) the Company shall not rely on any
such statement by any Purchaser or its representatives and (iii) an obligation,
commitment or agreement to provide or assist the Company in obtaining any
financing or investment may only be created by a written agreement, signed by
such Purchaser and the Company, setting forth the terms and conditions of such
financing or investment and stating that the parties intend for such writing to
be a binding obligation or agreement. Absent a written agreement to the
contrary, signed by such Purchaser, such Purchaser shall have the right in its
sole and absolute discretion, to refuse or decline to participate in any other
financing of or investment in the Company, and shall have no obligation to
assist or cooperate with the Company in obtaining any financing, investment or
other assistance.
          6.18 Pronouns. All pronouns contained herein, and any variations
thereof, shall be deemed to refer to the masculine, feminine or neutral,
singular or plural, as to the identity of the parties hereto may require.
          6.19 California Corporate Securities Law. THE SALE OF THE SECURITIES
WHICH ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE
COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF SUCH
SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION THEREFOR
PRIOR TO SUCH QUALIFICATION OR IN THE ABSENCE OF AN EXEMPTION FROM SUCH
QUALIFICATION IS UNLAWFUL. PRIOR TO ACCEPTANCE OF SUCH CONSIDERATION BY THE
COMPANY, THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED
UPON SUCH QUALIFICATION BEING OBTAINED OR AN EXEMPTION FROM SUCH QUALIFICATION
BEING AVAILABLE.
[THIS SPACE INTENTIONALLY LEFT BLANK]

20

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     IN WITNESS WHEREOF, the parties hereto have executed the SERIES F PREFERRED
STOCK PURCHASE AGREEMENT as of the date set forth in the first paragraph hereof.

            COMPANY:

PACIFIC BIOSCIENCES OF CALIFORNIA, INC.
      By:   /s/ Hugh Martin       Name:   Hugh Martin      Title:   Chief
Executive Officer       Address: 1505 Adams Drive
Menlo Park, CA 94025     

 

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     IN WITNESS WHEREOF, the parties hereto have executed the SERIES F PREFERRED
STOCK PURCHASE AGREEMENT as of the date set forth in the first paragraph hereof.

            PURCHASERS:

GEN-PROBE INCORPORATED
      By:   /s/ Eric Tardif       Name:   Eric Tardif      Title:   SVP,
Corporate Strategy