Exhibit 10.3

REGISTRATION RIGHTS AGREEMENT

This Registration Rights Agreement (the “Agreement”) is made and entered into as
of August 1, 2017 by and among Molecular Templates, Inc. (which name, prior to
the closing of the Merger, was Threshold Pharmaceuticals, Inc.), a Delaware
corporation (the “Company”), the “Investors” named in that certain Securities
Purchase Agreement by and among the Company and the Investors of even date
herewith (the “Securities Purchase Agreement”) and Millennium Pharmaceuticals,
Inc., a Delaware corporation and a wholly owned subsidiary of Takeda
Pharmaceutical Company Ltd. (“Millennium”). The Company and the Investors may
each be referred to herein individually as a “Party” and collectively as the
“Parties.” This Agreement is made pursuant to the Securities Purchase Agreement
and the Stock Purchase Agreement by and among the Company and Millennium of even
date herewith (together with the Securities Purchase Agreement, the “Purchase
Agreements”) and shall be effective as of the Closing. Capitalized terms used
herein have the respective meanings ascribed thereto in the Securities Purchase
Agreement unless otherwise defined herein.

The Parties hereby agree as follows:

1. Certain Definitions.

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

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

“Common Stock” means the Company’s common stock, par value $0.001 per share, and
any securities into which such shares may hereinafter be reclassified.

“Closing” shall have the meaning provided for in the Purchase Agreements.

“Eligible Market” means any of The New York Stock Exchange, Inc., The NYSE MKT,
The NASDAQ Global Select Market, The NASDAQ Global Market or The NASDAQ Capital
Market.

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

“Initial Registration Statement” means the initial Registration Statement filed
pursuant to Section 2(a) of this Agreement.

“Investors” means Millennium and the Investors identified in the Securities
Purchase Agreement and any Affiliate, successor or assign, or permitted
transferee of Millennium or any Investor who is a subsequent holder of any
Registrable Securities.

“Merger Agreement” means that certain Agreement and Plan of Merger and
Reorganization, dated as of March 16, 2017, by and among Molecular Templates,
Inc., Threshold Pharmaceuticals, Inc., a Delaware corporation (“Trojan”), and
Trojan Merger Sub, Inc., a Delaware corporation.

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

“Prospectus” means (i) the prospectus included in any Registration Statement, as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Registrable Securities covered by such
Registration Statement and by all other amendments and supplements to the
prospectus, including post-effective amendments and all material incorporated by
reference in such prospectus, and (ii) any “free writing prospectus” as defined
in Rule 405 under the Securities Act.

“Register,” “registered” and “registration” refer to a registration made by
preparing and filing a Registration Statement or similar document in compliance
with the Securities Act (as defined below), and the declaration or ordering of
effectiveness of such Registration Statement or document.

“Registrable Securities” means (i) the Shares, (ii) the Warrant Shares and
(iii) any other securities issued or issuable with respect to or in exchange for
Registrable Securities, whether by merger, charter amendment, stock split,
dividend, recapitalization, or otherwise; provided, that, a security shall cease
to be a Registrable Security upon (A) the sale of such security pursuant to a
Registration Statement or Rule 144 under the Securities Act, or (B) such
security becoming eligible for sale without restriction by the applicable
Investor pursuant to Rule 144.

“Registration Statements” means any one or more registration statements of the
Company filed under the Securities Act that covers the resale of any of the
Registrable Securities pursuant to the provisions of this Agreement (including,
without limitation, the Initial Registration Statement and any Remainder
Registration Statements), including (in each case) amendments and supplements to
such Registration Statements, including post-effective amendments, all exhibits
and all material incorporated by reference in such Registration Statements.

“Remainder Registration Statements” has the meaning set forth in Section 2(c).

“Required Investors” means the Investors holding a majority of the Registrable
Securities.

“Rule 144” means Rule 144 promulgated by the SEC pursuant to the Securities Act,
as such Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the SEC having substantially the same effect as such Rule.

“Rule 415” means Rule 415 promulgated by the SEC pursuant to the Securities Act,
as such Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the SEC having substantially the same effect as such Rule.

“SEC” means the U.S. Securities and Exchange Commission.

“Securities Act” means the Securities Act of 1933, as amended, or any successor
statute, and the rules and regulations promulgated thereunder.

“Shares” means the aggregate number of shares of Common Stock issued pursuant to
the Purchase Agreements.

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

“Trading Day” means (a) any day on which the Common Stock is listed or quoted
and traded on its primary Trading Market, or (b) if the Common Stock is not then
listed or quoted and traded on its primary Trading Market, then a day on which
trading of the Common Stock occurs on an Eligible Market, or (c) if the Common
Stock is not listed or quoted as set forth in clauses (a) or (b) hereof, any
Business Day.

“Trading Market” means The New York Stock Exchange, Inc., The NYSE MKT, The
NASDAQ Global Select Market, The NASDAQ Global Market, The NASDAQ Capital Market
or any other Eligible Market, or any national securities exchange, market or
trading or quotation facility on which the Common Stock is then listed or
quoted.

“Warrants” means the Warrants issued pursuant to the Securities Purchase
Agreement.

“Warrant Shares” means the shares of Common Stock issued or issuable upon
exercise of the Warrants.

2. Registration.

(a) Registration Statements.

(i) Initial Registration Statement. Promptly following the date of closing of
the purchase and sale of the securities contemplated by the Purchase Agreements
(the “Closing Date”), but no later than sixty (60) days after the Closing Date
(the “Filing Deadline”), the Company shall file with the SEC, to include (by way
of filing, amendment or otherwise) the Registrable Securities sold in connection
with the Purchase Agreements, the Initial Registration Statement, so as to cover
the resale of the Registrable Securities. The Initial Registration Statement
shall be on Form S-3 (except if the Company is then ineligible to register for
resale the Registrable Securities on Form S-3, in which case such registration
shall be on such other form available to register for resale the Registrable
Securities as a secondary offering) subject to the provisions of
Section 2(a)(ii). Subject to any SEC comments, such Registration Statement shall
include the plan of distribution in substantially the form attached hereto as
Exhibit A; provided, however, that no Investor shall be named as an
“underwriter” in the Registration Statement without the Investor’s prior written
consent. Unless such Registration Statement includes 100% of the Registrable
Securities then outstanding, such Registration Statement shall not include any
shares of Common Stock or other securities for the account of any other holder
without the prior written consent of the Required Investors. The Registration
Statement (and each amendment or supplement thereto, and each request for
acceleration of effectiveness thereof) shall be provided in accordance with
Section 3(c) to the Investors and their counsel prior to its filing or other
submission.

(ii) Alternative Form of Registration Statement. In the event that Form S-3 is
not available for the registration of the resale of Registrable Securities
hereunder, the Company shall (i) register the resale of the Registrable
Securities on another appropriate form reasonably acceptable to the Investors
and (ii) undertake to register the Registrable Securities on Form S-3 promptly
after such form is available, provided that the Company 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.

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

(iii) Expenses. The Company will pay all reasonable expenses associated with
effecting the registration of the Registrable Securities pursuant to this
Section 2, including filing and printing fees, the Company’s counsel and
accounting fees and expenses, costs associated with clearing the Registrable
Securities for sale under applicable state securities laws, listing fees, and
reasonable fees and expenses of one counsel to the Investors up to an aggregate
cap of Thirty-five Thousand Dollars ($35,000), but excluding discounts,
commissions, fees of underwriters, selling brokers, dealer managers or similar
securities industry professionals with respect to the Registrable Securities
being sold.

(b) Effectiveness.

(i) The Company shall use commercially reasonable efforts to have each
Registration Statement declared effective as soon as practicable after filing,
and in any event no later than one hundred twenty (120) days after the Closing
(the “Effectiveness Deadline”). The Company shall notify the Investors by
facsimile or e-mail as promptly as practicable, and in any event, within
twenty-four (24) hours, after any Registration Statement is declared effective
and shall simultaneously provide the Investors with copies of any related
Prospectus to be used in connection with the sale or other disposition of the
securities covered thereby.

(ii) For not more than thirty (30) consecutive days or for a total of not more
than sixty (60) days in any twelve (12) month period, the Company may suspend
the use of any Prospectus included in any Registration Statement contemplated by
this Section in the event that the Company determines in good faith that such
suspension is necessary to (A) delay the disclosure of material non-public
information concerning the Company, the disclosure of which at the time is not,
in the good faith opinion of the Company, in the best interests of the Company
or (B) amend or supplement the affected Registration Statement or the related
Prospectus so that such Registration Statement or Prospectus shall not include
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in the case of
the Prospectus in light of the circumstances under which they were made, not
misleading (an “Allowed Delay”); provided, that the Company shall promptly
(a) notify each Investor in writing of the commencement of an Allowed Delay, but
shall not (without the prior written consent of an Investor) disclose to such
Investor any material non-public information giving rise to an Allowed Delay and
(b) advise the Investors in writing to cease all sales under the Registration
Statement until the end of the Allowed Delay.

(c) Rule 415; Cutback. If at any time the SEC informs the Company that all of
the Registrable Securities cannot, based on the provisions of Rule 415 under the
Securities Act, be registered for resale as a secondary offering on a single
registration statement, or requires any Investor to be named as an
“underwriter,” the Company shall use its commercially reasonable efforts to
persuade the SEC that the offering contemplated by the Registration Statement is
a valid secondary offering and not an offering “by or on behalf of the issuer”
as defined in Rule 415 and that none of the Investors is an “underwriter.” In
the event that, despite the Company’s commercially reasonable efforts and
compliance with the terms of this

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

Section 2(c), the SEC refuses to alter its position, the Company shall
(i) remove from the Registration Statement such portion of the Registrable
Securities (the “Cut Back Shares”) and/or (ii) agree to such restrictions and
limitations on the registration and resale of the Registrable Securities as the
SEC may require to assure the Company’s compliance with the requirements of Rule
415 (collectively, the “SEC Restrictions”); provided, however, that the Company
shall not agree to name any Investor as an “underwriter” in such Registration
Statement without the prior written consent of such Investor. Any cut-back
imposed on the Investors pursuant to this Section 2(c) shall be allocated among
the Investors on a pro rata basis and, unless otherwise directed in writing by
an Investor as to its Registrable Securities, the number of Registrable
Securities to be registered on such Registration Statement will first be reduced
first by the Warrant Shares (applied, in the case that some Warrant Shares may
be registered, to the Investors on a pro rata basis based on the total number of
unregistered Warrant Shares held by such Investors) and second by the Shares
(applied, in the case that some Shares may be registered, to the Investors on a
pro rata basis based on the total number of unregistered Shares held by such
Investors), in each case subject to a determination by the SEC that certain
Investors must be reduced first based on the number of Registrable Securities
held by such Investors. For the avoidance of doubt, for purposes of this
Section 2(c), the term “commercially reasonable efforts” shall not require the
Company to institute or maintain any action, suit or proceeding against the SEC
or any member of the Staff of the SEC. In the event the Company amends the
Initial Registration Statement or files a new Initial Registration Statement, as
the case may be, to remove the Cut Back Shares, the Company will use its
commercially reasonable efforts to file with the SEC, as promptly as allowed by
SEC, one or more registration statements on Form S-3 or such other form
available to register for resale those Registrable Securities that were not
registered for resale on the Initial Registration Statement, as amended, or the
new Registration Statement (the “Remainder Registration Statements”).

(d) If: (i) the Initial Registration Statement is not filed with the SEC on or
prior to the Filing Deadline, (ii) the Initial Registration Statement is not
declared effective by the SEC (or otherwise does not become effective) for any
reason on or prior to the Effectiveness Deadline or (iii) after its Effective
Date, except in the case of an Excluded Event (as defined in Section 2(e)), (A)
such Registration Statement ceases for any reason (including without limitation
by reason of a stop order, or the Company’s failure to update the Registration
Statement) to remain continuously effective as to all Registrable Securities
included in such Registration Statement or (B) the Investors are not permitted
to utilize the Prospectus therein to resell such Registrable Securities for any
reason (other than due to a change in the “Plan of Distribution” or the
inaccuracy of any information regarding the Investors), in each case, for more
than an aggregate of twenty (20) consecutive Trading Days or forty-five
(45) Trading Days (which need not be consecutive days) during any twelve
(12) month period (other than as a result of a breach of this Agreement by an
Investor), or (iv) if none of the Initial Registration Statement or a Remainder
Registration Statement is effective and the Company fails to satisfy the current
public information requirement pursuant to Rule 144(c)(1) as a result of which
the Investors who are not affiliates are unable to sell Registrable Securities
without restriction under Rule 144 (or any successor thereto), (any such failure
or breach in clauses (i) through (iv) above being referred to as an “Event,”
and, for purposes of clauses (i), (ii) or (iv), the date on which such Event
occurs, or for purposes of clause (iii), the date on which such twenty (20) or
forty-five (45) Trading Day period is exceeded, being referred to as an “Event
Date”), then, as the sole recourse, the Investors may have hereunder or under
applicable law, (x) within five (5) Business Days

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

after an Event Date relating to a failure in clause (i) only, the Company shall
pay to each Investor an amount in cash, as liquidated damages and not as a
penalty, equal to one percent (1.0%) of the aggregate purchase price paid by
such Investor pursuant to the Purchase Agreements for any Registrable Securities
held by such Investor on such Event Date; and (y) on each thirty (30)-day
anniversary (or pro rata portion thereof) following any Event Date (including,
for the avoidance of doubt, a failure in clause (i), in which case each thirty
(30)-day anniversary shall be measured commencing on the 31st day following such
Event Date) until the earlier of (1) the applicable Event is cured or (2) the
Registrable Securities are eligible for resale pursuant to Rule 144 without
manner of sale or volume restrictions, the Company shall pay to each Investor an
amount in cash, as partial liquidated damages and not as a penalty (“Liquidated
Damages”), equal to one percent (1.0%) of the aggregate purchase price paid by
such Investor pursuant to the Purchase Agreements for any unregistered
Registrable Securities then held by such Investor. The Parties agree that
(1) notwithstanding anything to the contrary herein or in the Purchase
Agreements, no Liquidated Damages shall be payable with respect to any period
after the expiration of the Effectiveness Period (it being understood that this
sentence shall not relieve the Company of any Liquidated Damages accruing prior
to the Effectiveness Deadline) and in no event shall the aggregate amount of
Liquidated Damages payable to an Investor exceed, in the aggregate, six percent
(6.0%) of the aggregate purchase price paid by such Investor pursuant to the
Purchase Agreements and (2) in no event shall the Company be liable in any
thirty (30)-day period for Liquidated Damages under this Agreement in excess of
one percent (1.0%) of the aggregate purchase price paid by the Investors
pursuant to the Purchase Agreements. Unless otherwise specified in this
Section 2(d), the Liquidated Damages pursuant to the terms hereof shall apply on
a daily pro-rata basis for any portion of a month prior to the cure of an Event,
except in the case of the first Event Date. Notwithstanding the foregoing,
nothing shall preclude any Investor from pursuing or obtaining any specific
performance with respect to this Section 2(d) in accordance with applicable law.
The Company shall not be liable for Liquidated Damages under this Agreement as
to any Registrable Securities which are not permitted by the SEC to be included
in a Registration Statement from the time that it is determined that such
Registrable Securities are not permitted to be registered until such time as the
provisions of this Agreement as to the Remainder Registration Statements
required to be filed hereunder are triggered, in which case the provisions of
this Section 2(d) shall once again apply, if applicable. In such case, the
Liquidated Damages shall be calculated to only apply to the percentage of
Registrable Securities which are permitted by the SEC to be included in such
Registration Statement. The Effectiveness Deadline for a Registration Statement
shall be extended without default or Liquidated Damages hereunder in the event
that the Company’s failure to obtain the effectiveness of the Registration
Statement on a timely basis results from the failure of a Purchaser to timely
provide the Company with information requested by the Company and necessary to
complete the Registration Statement in accordance with the requirements of the
Securities Act (in which the Effectiveness Deadline would be extended with
respect to Registrable Securities held by such Purchaser).

(e) Notwithstanding anything in this Agreement to the contrary, the Company may,
by written notice to the Investors, suspend sales under a Registration Statement
after the effective date thereof and/or require that the Investors immediately
cease the sale of shares of Common Stock pursuant thereto and/or defer the
filing of any subsequent Registration Statement if the Company is engaged in a
material merger, acquisition or sale or any other pending development that the
Company believes may be material, and the Board of Directors determines

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

in good faith, by appropriate resolutions, that, as a result of such activity,
(A) it would be materially detrimental to the Company (other than as relating
solely to the price of the Common Stock) to maintain a Registration Statement at
such time or (B) it is in the best interests of the Company to suspend sales
under such registration at such time (an “Excluded Event”). Upon receipt of such
notice, each Investor shall immediately discontinue any sales of Registrable
Securities pursuant to such registration until such Investor is advised in
writing by the Company that the current Prospectus or amended Prospectus, as
applicable, may be used. In no event, however, shall this right be exercised to
suspend sales beyond the period during which (in the good faith determination of
the Company’s Board of Directors) the failure to require such suspension would
be materially detrimental to the Company. The Company’s rights under this
Section 2(e) may be exercised for a period of no more than twenty (20) Trading
Days at a time and not more than two times in any twelve-month period, without
such suspension being considered as part of an Allowed Delay. Immediately after
the end of any suspension period under this Section 2(e), the Company shall take
all necessary actions (including filing any required supplemental prospectus) to
restore the effectiveness of the applicable Registration Statement and the
ability of the Investors to publicly resell their Registrable Securities
pursuant to such effective Registration Statement.

3. Company Obligations. At such time as the Company is obligated to file a
Registration Statement with the SEC pursuant to Section 2, the Company will use
commercially reasonable efforts to effect the registration of the Registrable
Securities in accordance with the terms hereof, and pursuant thereto the Company
will:

(a) use commercially reasonable efforts to cause such Registration Statement to
become effective pursuant to the terms of Section 2 hereof, and to remain
continuously effective for a period that will terminate upon the earlier of
(i) the date on which all Registrable Securities covered by such Registration
Statement as amended from time to time, have been sold, (ii) the third
anniversary of the effectiveness of the Registration Statement, or (iii) the
date as of which the Investors may sell all of the Registrable Securities
covered by such Registration Statement without restriction pursuant to Rule 144
(or any successor thereto) promulgated under the Securities Act (the
“Effectiveness Period”);

(b) prepare and file with the SEC such amendments and post-effective amendments
to the Registration Statement and the Prospectus as may be necessary to keep the
Registration Statement effective for the Effectiveness Period and to comply with
the provisions of the Securities Act and the Exchange Act with respect to the
distribution of all of the Registrable Securities covered thereby;

(c) provide copies to and permit counsel designated by the Investors to review
each Registration Statement and all amendments and supplements thereto no fewer
than seven (7) days prior to their filing with the SEC;

(d) furnish to the Investors and their legal counsel (i) promptly after the same
is prepared and publicly distributed, filed with the SEC, or received by the
Company (but not later than two (2) Business Days after the filing date, receipt
date or sending date, as the case may be) one (1) copy of any Registration
Statement and any amendment thereto, each preliminary prospectus and Prospectus
and each amendment or supplement thereto, and each

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

letter written by or on behalf of the Company to the SEC or the staff of the
SEC, and each item of correspondence from the SEC or the staff of the SEC, in
each case relating to such Registration Statement (other than any portion
thereof which contains information for which the Company has sought confidential
treatment), and (ii) such number of copies of a Prospectus, including a
preliminary prospectus, and all amendments and supplements thereto and such
other documents as each Investor may reasonably request in order to facilitate
the disposition of the Registrable Securities owned by such Investor that are
covered by the related Registration Statement;

(e) use commercially reasonable efforts to (i) prevent the issuance of any stop
order or other suspension of effectiveness and, (ii) if such order is issued,
obtain the withdrawal of any such order at the earliest possible moment;

(f) prior to any public offering of Registrable Securities, use commercially
reasonable efforts to register or qualify or cooperate with the Investors and
their counsel in connection with the registration or qualification of such
Registrable Securities for offer and sale under the securities or blue sky laws
of such jurisdictions requested by the Investors and do any and all other
commercially reasonable acts or things necessary or advisable to enable the
distribution in such jurisdictions of the Registrable Securities covered by the
Registration Statement; provided, however, that the Company shall not be
required in connection therewith or as a condition thereto to (i) qualify to do
business in any jurisdiction where it would not otherwise be required to qualify
but for this Section 3(f), (ii) subject itself to general taxation in any
jurisdiction where it would not otherwise be so subject but for this
Section 3(f), or (iii) file a general consent to service of process in any such
jurisdiction;

(g) use commercially reasonable efforts to cause all Registrable Securities
covered by a Registration Statement to be listed on each securities exchange,
interdealer quotation system or other market on which similar securities issued
by the Company are then listed;

(h) immediately notify the Investors, at any time prior to the end of the
Effectiveness Period, upon discovery that, or upon the happening of any event as
a result of which, the Prospectus includes an untrue statement of a material
fact or omits to state any material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances then existing, and promptly prepare, file with the SEC and furnish
to such holder a supplement to or an amendment of such Prospectus as may be
necessary so that such Prospectus shall not include an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances then existing;

(i) otherwise comply with all applicable rules and regulations of the SEC under
the Securities Act and the Exchange Act, including, without limitation, Rule 172
under the Securities Act, file any final Prospectus, including any supplement or
amendment thereof, with the SEC pursuant to Rule 424 under the Securities Act,
promptly inform the Investors in writing if, at any time during the
Effectiveness Period, the Company does not satisfy the conditions specified in
Rule 172 and, as a result thereof, the Investors are required to deliver a
Prospectus in connection with any disposition of Registrable Securities and take
such other actions as may be

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

reasonably necessary to facilitate the registration of the Registrable
Securities hereunder; and make available to its security holders, as soon as
reasonably practicable, but not later than the Availability Date (as defined
below), an earnings statement covering a period of at least twelve (12) months,
beginning after the effective date of each Registration Statement, which
earnings statement shall satisfy the provisions of Section 11(a) of the
Securities Act, including Rule 158 promulgated thereunder (for the purpose of
this subsection 3(i), “Availability Date” means the 45th day following the end
of the fourth fiscal quarter that includes the effective date of such
Registration Statement, except that, if such fourth fiscal quarter is the last
quarter of the Company’s fiscal year, “Availability Date” means the 90th day
after the end of such fourth fiscal quarter); and

(j) With a view to making available to the Investors the benefits of Rule 144
(or its successor rule) and any other rule or regulation of the SEC that may at
any time permit the Investors to sell shares of Common Stock to the public
without registration, the Company covenants and agrees, during the Effectiveness
Period to: (i) make and keep public information available, as those terms are
understood and defined in Rule 144, until the earlier of (A) six (6) months
after such date as all of the Registrable Securities may be sold without
restriction by the holders thereof pursuant to Rule 144 or any other rule of
similar effect or (B) such date as all of the Registrable Securities shall have
been resold; (ii) file with the SEC in a timely manner all reports and other
documents required of the Company under the Exchange Act; and (iii) furnish to
each Investor upon request, as long as such Investor owns any Registrable
Securities, (A) a written statement by the Company that it has complied with the
reporting requirements of the Exchange Act, (B) a copy of the Company’s most
recent Annual Report on Form 10-K or Quarterly Report on Form 10-Q, and (C) such
other information as may be reasonably requested in order to avail such Investor
of any rule or regulation of the SEC that permits the selling of any such
Registrable Securities without registration.

4. Due Diligence Review; Information. If any Investor is required under
applicable securities law to be described in the Registration Statement as an
“underwriter,” upon the written request of such Investor in connection with such
Investor’s due diligence requirements, if any, the Company shall make available
for inspection by (i) such Investor and its legal counsel and (ii) one firm of
accountants or other agents retained the Investors (collectively, the
“Inspectors”), all pertinent financial and other records, and pertinent
corporate documents and properties of the Company (collectively, the “Records”),
as shall be reasonably deemed necessary by each Inspector solely for the purpose
of establishing a due diligence defense under underwriter liability under the
Securities Act, and cause the Company’s officers, directors and employees to
supply all information that any Inspector may reasonably request; provided,
however, that each Inspector shall agree to hold in strict confidence and shall
not make any disclosure (except to such Investor) or use of any Record or other
information which the Company determines in good faith to be confidential, and
of which determination the Inspectors are so notified, unless (a) the disclosure
of such Records is necessary to avoid or correct a misstatement or omission in
any Registration Statement or is otherwise required under the Securities Act,
(b) 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, or
(c) the information in such Records has been made generally available to the
public other than by disclosure in violation of this or any other Transaction
Document. Each Investor agrees that it shall, upon learning that disclosure of
such Records is sought in or by a court or governmental body of competent
jurisdiction or through

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

other means, give prompt notice to the Company and allow the Company, 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 the Company and any Investor) shall
be deemed to limit the Investors’ ability to sell Registrable Securities in a
manner which is otherwise consistent with applicable laws and regulations.

5. Obligations of the Investors.

(a) Each Investor shall furnish in writing to the Company 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 registration of such Registrable Securities and shall
execute such documents in connection with such registration as the Company may
reasonably request. At least five (5) Business Days prior to the first
anticipated filing date of any Registration Statement, the Company shall notify
each Investor of the information the Company requires from such Investor if such
Investor elects to have any of the Registrable Securities included in the
Registration Statement. An Investor shall provide such information to the
Company at least two (2) Business Days prior to the first anticipated filing
date of such Registration Statement if such Investor elects to have any of the
Registrable Securities included in the Registration Statement. It shall be a
condition precedent to the obligations of the Company to complete the
registration pursuant to this Agreement with respect to the Registrable
Securities of a particular Investor that (i) such Investor furnish to the
Company 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 (ii) the Investor execute such documents in
connection with such registration as the Company may reasonably request.

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

(c) Each Investor agrees that, upon receipt of any notice from the Company of
either (i) the commencement of an Allowed Delay pursuant to Section 2(b)(ii) or
(ii) to the happening of an event pursuant to Section 3(h) hereof, such Investor
will immediately discontinue disposition of Registrable Securities pursuant to
the Registration Statement covering such Registrable Securities, until the
Investor is advised by the Company that such dispositions may again be made.

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

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

6. Indemnification.

(a) Indemnification by the Company. In the event that any Registrable Securities
are included in a Registration Statement pursuant to this Agreement, the Company
will indemnify and hold harmless each Investor whose Registrable Securities are
included in a Registration Statement and its officers, directors, members,
employees and agents, successors and assigns, and each other person, if any, who
controls such Investor within the meaning of the Securities Act, against any
losses, claims, damages or liabilities, joint or several, to which they may
become subject under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon: (i) any untrue statement or alleged untrue statement or omission
or alleged omission of any material fact contained in any Registration
Statement, any preliminary Prospectus (if used prior to the effective date of
such Registration Statement) or final Prospectus, or any amendment or supplement
thereof; (ii) any blue sky application or other document executed by the Company
specifically for that purpose or based upon written information furnished by the
Company filed in any state or other jurisdiction in order to qualify any or all
of the Registrable Securities under the securities laws thereof (any such
application, document or information herein called a “Blue Sky Application”);
(iii) the omission or alleged omission to state in a Blue Sky Application a
material fact required to be stated therein or necessary to make the statements
therein not misleading; (iv) any violation by the Company or its agents of any
rule or regulation promulgated under the Securities Act applicable to the
Company or its agents and relating to action or inaction required of the Company
in connection with such registration; or (v) any failure to register or qualify
the Registrable Securities included in any such Registration Statement in any
state where the Company or its agents has affirmatively undertaken or agreed in
writing that the Company will undertake such registration or qualification on an
Investor’s behalf and will reimburse such Investor, and each such officer,
director or member and each such controlling person for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the Company will not be liable in any such case if and to the extent that
any such loss, claim, damage or liability arises out of or is based solely upon
(w) an untrue statement or alleged untrue statement or omission or alleged
omission so made in conformity with information pertaining to such Investor and
furnished in writing by such Investor or any such controlling person
specifically for use in such Registration Statement or Prospectus, (x) the use
by an Investor of an outdated or defective prospectus after the Company has
validly notified such Investor in writing that the prospectus is outdated or
defective, (y) an Investor’s (or any other indemnified Person’s) failure to send
or give a copy of the prospectus or supplement (as then amended or
supplemented), if required (and not exempted) to the Persons asserting an untrue
statement or omission or alleged untrue statement or omission at or prior to the
written confirmation of the sale of Registrable Securities if such statement or
omission was corrected in such Prospectus or supplement, or (z) amounts paid in
settlement of any loss, claim, damage or liability if such settlement is
effected without the prior written consent of the Company unless, in accordance
with Section 6(c) below, such settlement includes an unconditional release of
such Indemnified Party from all liability on claims that are the subject matter
of the proceeding.

(b) Indemnification by the Investors. Each Investor agrees, severally but not
jointly, to indemnify and hold harmless, to the fullest extent permitted by law,
the Company, its directors, officers, employees, stockholders and each person
who controls the Company (within the meaning of the Securities Act), to the same
extent and in the same manner as is set forth in Section 6(a), against any
losses, claims, damages, liabilities and expense (including reasonable attorney
fees) resulting from any untrue statement of a material fact or any omission of
a material fact required to be stated in the Registration Statement or
Prospectus or preliminary Prospectus

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

or amendment or supplement thereto or necessary to make the statements therein
not misleading, to the extent, but only to the extent that such untrue statement
or omission is contained in any information pertaining to such Investor and
furnished in writing by such Investor to the Company specifically for inclusion
in such Registration Statement or Prospectus or amendment or supplement thereto.
In no event shall the liability of an Investor be greater in amount than the
dollar amount of the proceeds (net of all expenses paid by such Investor in
connection with any claim relating to this Section 6 and the amount of any
damages such Investor has otherwise been required to pay by reason of such
untrue statement or omission) received by such Investor upon the sale of the
Registrable Securities included in the Registration Statement giving rise to
such indemnification obligation.

(c) Conduct of Indemnification Proceedings. Any person entitled to
indemnification hereunder shall (i) give prompt notice to the indemnifying party
of any claim with respect to which it seeks indemnification and (ii) permit such
indemnifying party to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party; provided, that any person entitled to
indemnification hereunder shall have the right to employ separate counsel and to
participate in the defense of such claim, but the fees and expenses of such
counsel shall be at the expense of such person unless (a) the indemnifying party
has agreed to pay such fees or expenses or (b) the indemnifying party shall have
failed to assume the defense of such claim and employ counsel reasonably
satisfactory to such person or (c) in the reasonable judgment of any such
person, based upon written advice of its counsel, a conflict of interest exists
between such person and the indemnifying party with respect to such claims (in
which case, if the person notifies the indemnifying party in writing that such
person elects to employ separate counsel at the expense of the indemnifying
party, the indemnifying party shall not have the right to assume the defense of
such claim on behalf of such person); and provided, further, that the failure of
any indemnified party to give notice as provided herein shall not relieve the
indemnifying party of its obligations hereunder, except to the extent that such
failure to give notice shall materially adversely affect the indemnifying party
in the defense of any such claim or litigation. It is understood that the
indemnifying party shall not, in connection with any proceeding in the same
jurisdiction, be liable for fees or expenses of more than one separate firm of
attorneys at any time for all such indemnified parties.

No indemnifying party will, except with the consent of the indemnified party,
consent to entry of any judgment or enter into any settlement unless such
settlement includes an unconditional release of such indemnified party from all
liability on claims that are the subject matter of such proceeding and such
settlement does not include any non-monetary limitation on the actions of any
indemnified party or any of its affiliates or any admission of fault or
liability on behalf of any such indemnified party.

Subject to the terms of this Agreement, all fees and expenses of the indemnified
party (including reasonable fees and expenses to the extent incurred in
connection with investigating or preparing to defend such proceeding in a manner
not inconsistent with this Section 6) shall be paid to the indemnified party, as
incurred, within twenty (20) Trading Days of written notice thereof to the
indemnifying party; provided, that the indemnified party shall promptly
reimburse the indemnifying party for that portion of such fees and expenses
applicable to such actions for which such indemnified party is finally
judicially determined to not be entitled to indemnification hereunder).

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

(d) Contribution. If for any reason the indemnification provided for in the
preceding paragraphs (a) and (b) is unavailable to an indemnified party or
insufficient to hold it harmless, other than as expressly specified therein,
then the indemnifying party shall contribute to the amount paid or payable by
the indemnified party as a result of such loss, claim, damage or liability in
such proportion as is appropriate to reflect the relative fault of the
indemnified party and the indemnifying party, as well as any other relevant
equitable considerations. No person guilty of fraudulent misrepresentation
within the meaning of Section 11(f) of the Securities Act shall be entitled to
contribution from any person not guilty of such fraudulent misrepresentation. In
no event shall the contribution obligation of a holder of Registrable Securities
be greater in amount than the dollar amount of the proceeds (net of all expenses
paid by such holder in connection with any claim relating to this Section 6 and
the amount of any damages such holder has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission) received by it upon the sale of the Registrable Securities giving rise
to such contribution obligation.

7. Miscellaneous.

(a) Amendments and Waivers. This Agreement may be amended only by a writing
signed by the Company and the Required Investors. Notwithstanding the foregoing,
this Agreement may not be amended or terminated and the observance of any term
hereof may not be waived with respect to any Investor without the written
consent of such Investor, unless such amendment, termination, or waiver applies
to all Investors equally and in the same fashion. The Company may take any
action herein prohibited, or omit to perform any act herein required to be
performed by it, only if the Company shall have obtained the written consent to
such amendment, action or omission to act, of the Required Investors.

(b) Notices. All notices and other communications provided for or permitted
hereunder shall be made as set forth in Section 9.5 of the Purchase Agreement.

(c) Assignments and Transfers by Investors. The provisions of this Agreement
shall be binding upon and inure to the benefit of the Investors. An Investor may
transfer or assign, in whole or from time to time in part, to one or more
persons its rights hereunder in connection with the transfer of Registrable
Securities by such Investor to such person, provided that such Investor complies
with all laws applicable thereto and provides written notice of assignment to
the Company promptly after such assignment is effected.

(d) Assignments and Transfers by the Company. This Agreement may not be assigned
by the Company (whether by operation of law or otherwise) without the prior
written consent of the Required Investors, provided, however, that in the event
that the Company is a party to a merger, consolidation, share exchange or
similar business combination transaction in which the Common Stock is converted
into the equity securities of another Person, from and after the effective time
of such transaction, such Person shall, by virtue of such transaction, be deemed
to have assumed the obligations of the Company hereunder, the term “Company”
shall be deemed to refer to such Person and the term “Registrable Securities”
shall be deemed to include the securities received by the Investors in
connection with such transaction unless such securities are otherwise freely
tradable by the Investors after giving effect to such transaction.

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

(e) Benefits of the Agreement. The terms and conditions of this Agreement shall
inure to the benefit of and be binding upon the respective permitted successors
and assigns of the Parties. Nothing in this Agreement, express or implied, is
intended to confer upon any party other than the Parties or their respective
successors and assigns any rights, remedies, obligations, or liabilities under
or by reason of this Agreement, except as expressly provided in this Agreement.

(f) Piggy-Back Registrations. If at any time during the Effectiveness Period,
except as contemplated by Section 2(c) hereof, there is not an effective
Registration Statement covering all of the Registrable Securities and the
Company shall determine to prepare and file with the Commission a registration
statement relating to an offering for its own account or the account of others
under the Securities Act of any of its equity securities, other than on Form S-4
or Form S-8 (each as promulgated under the Securities Act) or their then
equivalents relating to equity securities to be issued solely in connection with
any acquisition of any entity or business or equity securities issuable in
connection with the stock option or other employee benefit plans, then the
Company shall send to each Holder a written notice of such determination and, if
within 15 days after the date of such notice, any such Holder shall so request
in writing, the Company shall include in such registration statement all or any
part of such Registrable Securities such Holder requests to be
registered; provided, however, that the Company shall not be required to
register any Registrable Securities pursuant to this Section 7(f) that are
eligible for resale pursuant to Rule 144 promulgated under the Securities Act
without volume limitation or that are the subject of a then effective
Registration Statement; provided, further, however, if there is not an effective
Registration Statement covering all of the Registrable Securities during the
Effectiveness Period, the Company may file a registration statement with the
Commission to register equity securities of the Company to be sold on a primary
basis, provided that the Company does not sell any such shares until there is an
effective Registration Statement covering all of the Registrable Securities. The
Company shall have the right to terminate or withdraw any registration initiated
by it under this Section 7(f) prior to the effectiveness of such registration
whether or not any Holder has elected to include securities in such registration

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

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

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

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

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

(k) Entire Agreement. This Agreement is intended by the Parties as a final
expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the Parties in respect of the
subject matter contained herein. This Agreement supersedes all prior agreements
and understandings among the Parties with respect to such subject matter.

(l) Governing Law; Consent to Jurisdiction; Waiver of Jury Trial. This Agreement
shall be governed by, and construed in accordance with, the internal laws of the
State of Delaware without regard to the choice of law principles thereof. Each
of the Parties irrevocably submits to the exclusive jurisdiction of the courts
of the Delaware Court of Chancery and any state appellate court therefrom within
the State of Delaware Court of Chancery and any state appellate court therefrom
within the State of Delaware (or, if the Delaware Court of Chancery declines to
accept jurisdiction over a particular mater, any state or federal court within
the State of Delaware) for the purpose of any suit, action, proceeding or
judgment relating to or arising out of this Agreement and the transactions
contemplated hereby. Service of process in connection with any such suit, action
or proceeding may be served on each Party anywhere in the world by the same
methods as are specified for the giving of notices under this Agreement. Each of
the Parties irrevocably consents to the jurisdiction of any such court in any
such suit, action or proceeding and to the laying of venue in such court. Each
Party irrevocably waives any objection to the laying of venue of any such suit,
action or proceeding brought in such courts and irrevocably waives any claim
that any such suit, action or proceeding brought in any such court has been
brought in an inconvenient forum. EACH OF THE PARTIES WAIVES ANY RIGHT TO
REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS AGREEMENT AND
REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.

[Signature page follows]

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

IN WITNESS WHEREOF, the Parties have executed this Registration Rights Agreement
as of the date first above written.

 

The Company:     MOLECULAR TEMPLATES, INC.       By:   /s/ Eric E. Poma      
Its:   Chief Executive Officer

 

[Signature Page to Registration Rights Agreement]

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

IN WITNESS WHEREOF, the Parties have executed this Registration Rights Agreement
as of the date first above written.

 

The Investors:     PERCEPTIVE LIFE SCIENCE MASTER FUND LTD.       By:   /s/
James H. Mannix       Its:   Chief Operating Officer       Address:

 

[Signature Page to Registration Rights Agreement]

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

IN WITNESS WHEREOF, the Parties have executed this Registration Rights Agreement
as of the date first above written.

 

The Investors:     BIOTECHNOLOGY VALUE FUND, LP       By:   /s/ BVF Partners LP
      Its:   General Partner       By:   /s/ Mark Lampert       Title:  
President, BVF, Inc., its General Partner       Address:

 

[Signature Page to Registration Rights Agreement]

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

IN WITNESS WHEREOF, the Parties have executed this Registration Rights Agreement
as of the date first above written.

 

The Investors:     BIOTECHNOLOGY VALUE FUND II, LP       By:   /s/ BVF Partners
LP       Its:   General Partner       By:   /s/ Mark Lampert       Title:  
President, BVF, Inc., its General Partner       Address:

 

[Signature Page to Registration Rights Agreement]

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

IN WITNESS WHEREOF, the Parties have executed this Registration Rights Agreement
as of the date first above written.

 

The Investors:     BIOTECHNOLOGY VALUE TRADING FUND OS, LP       By:   /s/ BVF
Partners OS, Ltd.       Its:   General Partner       By:   /s/ BVF Partners LP  
    Its:   Sole Member       By:   /s/ Mark Lampert       Title:   President,
BVF, Inc., its General Partner       Address:

 

[Signature Page to Registration Rights Agreement]

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

IN WITNESS WHEREOF, the Parties have executed this Registration Rights Agreement
as of the date first above written.

 

The Investors:     INVESTMENT 10, LLC       By:   /s/ BVF Partners LP       Its:
  Attorney-in-fact       By:   /s/ Mark Lampert       Title:   President, BVF,
Inc., its General Partner       Address:

 

[Signature Page to Registration Rights Agreement]

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

IN WITNESS WHEREOF, the Parties have executed this Registration Rights Agreement
as of the date first above written.

 

The Investors:     MSI BVF SPV, LLC       By:   /s/ BVF Partners LP       Its:  
Attorney-in-fact       By:   /s/ Mark Lampert       Title:   President, BVF,
Inc., its General Partner       Address:

 

[Signature Page to Registration Rights Agreement]

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

IN WITNESS WHEREOF, the Parties have executed this Registration Rights Agreement
as of the date first above written.

 

The Investors:     AJU GROWTH AND HEALTHCARE FUND       By:   /s/ Ji-Won Kim    
  Its:   CEO       Address:

 

[Signature Page to Registration Rights Agreement]

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

IN WITNESS WHEREOF, the Parties have executed this Registration Rights Agreement
as of the date first above written.

 

The Investors:     SANTÉ HEALTH VENTURES ANNEX FUND, L.P.       By:   /s/ SHV
Annex Services, LP         /s/ SHV Management Services, LLC       Its:   General
Partner       By:   /s/ Kevin Lalande       Title:   Managing Member      
Address:

 

[Signature Page to Registration Rights Agreement]

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

IN WITNESS WHEREOF, the Parties have executed this Registration Rights Agreement
as of the date first above written.

 

The Investors:     SANTÉ HEALTH VENTURES I, L.P.       By:   /s/ SHV Annex
Services, LP         /s/ SHV Management Services, LLC       Its:   General
Partner       By:   /s/ Kevin Lalande       Title:   Managing Member      
Address:

 

[Signature Page to Registration Rights Agreement]

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

IN WITNESS WHEREOF, the Parties have executed this Registration Rights Agreement
as of the date first above written.

 

The Investors:     EXCEL VENTURE FUND II, L.P.       By:   /s/ Excel Ventures II
GP, LLC       Its:   General Partner       By:   /s/ Caleb Winder       Its:  
Manager       Address:

 

[Signature Page to Registration Rights Agreement]

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

IN WITNESS WHEREOF, the Parties have executed this Registration Rights Agreement
as of the date first above written.

 

The Investors:     LONGITUDE VENTURE PARTNERS III, L.P.     By:   /s/ Longitude
Capital Partners, LLC     Its:   General Partner     By:   /s/ Patrick Enright  
  Its:   Managing Director     Address:

 

 

[Signature Page to Registration Rights Agreement]

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

IN WITNESS WHEREOF, the Parties have executed this Registration Rights Agreement
as of the date first above written.

 

The Investors:     667, L.P.     BY: BAKER BROS. ADVISORS LP, management company
and investment adviser to 667, L.P., pursuant to authority granted to it by
Baker Biotech Capital, L.P., general partner to 667, L.P., and not as the
general partner.     By:   /s/ Scott Lessing     Its:   President     Address:

 

 

[Signature Page to Registration Rights Agreement]

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

IN WITNESS WHEREOF, the Parties have executed this Registration Rights Agreement
as of the date first above written.

 

The Investors:     BAKER BROTHERS LIFE SCIENCES, L.P.     By: BAKER BROS.
ADVISORS LP, management company and investment adviser to Baker Brothers Life
Sciences, L.P., pursuant to authority granted to it by Baker Brothers Life
Sciences Capital, L.P., general partner to Baker Brothers Life Sciences, L.P.,
and not as the general partner.     By:   /s/ Scott Lessing     Its:   President
    Address:

 

[Signature Page to Registration Rights Agreement]

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

IN WITNESS WHEREOF, the Parties have executed this Registration Rights Agreement
as of the date first above written.

 

The Investors:     CDK ASSOCIATES L.L.C.     By:   /s/ Karen Cross     Its:  
Treasurer     Address:

 

[Signature Page to Registration Rights Agreement]

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

IN WITNESS WHEREOF, the Parties have executed this Registration Rights Agreement
as of the date first above written.

 

The Investors:     SHREWSBURY CAPITAL PARTNERS LLC     By:   /s/ Jonathan Gold  
  Its:   Managing Member     Address:

 

 

[Signature Page to Registration Rights Agreement]

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

IN WITNESS WHEREOF, the Parties have executed this Registration Rights Agreement
as of the date first above written.

The Investors:

/s/ Franklin M. Berger Franklin M. Berger Address:

 

 

[Signature Page to Registration Rights Agreement]

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

IN WITNESS WHEREOF, the Parties have executed this Registration Rights Agreement
as of the date first above written.

 

The Investors:     MILLENNIUM PHARMACEUTICALS, INC.     By:   /s/ Elizabeth
Lewis     Its:   Secretary     Address:

 

 

[Signature Page to Registration Rights Agreement]

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

Exhibit A

Plan of Distribution

The selling stockholders, which as used herein includes donees, pledgees,
transferees or other successors-in-interest selling shares of common stock or
interests in shares of common stock received after the date of this prospectus
from a selling stockholder as a gift, pledge, partnership distribution or other
transfer, may, from time to time, sell, transfer or otherwise dispose of any or
all of their shares of common stock or interests in shares of common stock on
any stock exchange, market or trading facility on which the shares are traded or
in private transactions. These dispositions may be at fixed prices, at
prevailing market prices at the time of sale, at prices related to the
prevailing market price, at varying prices determined at the time of sale, or at
negotiated prices.

The selling stockholders may use any one or more of the following methods when
disposing of shares or interests therein:

 

  •   ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;

 

  •   block trades in which the broker-dealer will attempt to sell the shares as
agent, but may position and resell a portion of the block as principal to
facilitate the transaction;

 

  •   purchases by a broker-dealer as principal and resale by the broker-dealer
for its account;

 

  •   an exchange distribution in accordance with the rules of the applicable
exchange;

 

  •   privately negotiated transactions;

 

  •   short sales effected after the date the registration statement of which
this Prospectus is a part is declared effective by the SEC;

 

  •   through the writing or settlement of options or other hedging
transactions, whether through an options exchange or otherwise;

 

  •   broker-dealers may agree with the selling stockholders to sell a specified
number of such shares at a stipulated price per share;

 

  •   a combination of any such methods of sale; and

 

  •   any other method permitted by applicable law.

The selling stockholders may, from time to time, pledge or grant a security
interest in some or all of the shares of common stock or warrants owned by them
and, if they default in the performance of their secured obligations, the
pledgees or secured parties may offer and sell such

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

shares of common stock or warrants, from time to time, under this prospectus, or
under an amendment to this prospectus under Rule 424(b)(3) or other applicable
provision of the Securities Act amending the list of selling stockholders to
include the pledgee, transferee or other successors in interest as selling
stockholders under this prospectus. The selling stockholders also may transfer
the shares of common stock or warrants in other circumstances, in which case the
transferees, pledgees or other successors in interest will be the selling
beneficial owners for purposes of this prospectus.

In connection with the sale of our common stock or interests therein, the
selling stockholders may enter into hedging transactions with broker-dealers or
other financial institutions, which may in turn engage in short sales of the
common stock in the course of hedging the positions they assume. The selling
stockholders may also sell shares of our common stock short and deliver these
securities to close out their short positions, or loan or pledge the common
stock to broker-dealers that in turn may sell these securities. The selling
stockholders may also enter into option or other transactions with
broker-dealers or other financial institutions or the creation of one or more
derivative securities which require the delivery to such broker-dealer or other
financial institution of shares offered by this prospectus, which shares such
broker-dealer or other financial institution may resell pursuant to this
prospectus (as supplemented or amended to reflect such transaction).

The aggregate proceeds to the selling stockholders from the sale of the common
stock offered by them will be the purchase price of the common stock less
discounts or commissions, if any. Each of the selling stockholders reserves the
right to accept and, together with their agents from time to time, to reject, in
whole or in part, any proposed purchase of common stock to be made directly or
through agents. We will not receive any of the proceeds from this offering. Upon
any exercise of the warrants by payment of cash, however, we will receive the
exercise price of the warrants.

The selling stockholders also may resell all or a portion of the shares in open
market transactions in reliance upon Rule 144 under the Securities Act of 1933,
provided that they meet the criteria and conform to the requirements of that
rule.

The selling stockholders and any underwriters, broker-dealers or agents that
participate in the sale of the common stock or interests therein may be
“underwriters” within the meaning of Section 2(11) of the Securities Act. Any
discounts, commissions, concessions or profit they earn on any resale of the
shares may be underwriting discounts and commissions under the Securities Act.
Selling stockholders who are “underwriters” within the meaning of Section 2(11)
of the Securities Act will be subject to the prospectus delivery requirements of
the Securities Act.

To the extent required, the shares of our common stock to be sold, the names of
the selling stockholders, the respective purchase prices and public offering
prices, the names of any agents, dealer or underwriter, any applicable
commissions or discounts with respect to a particular offer will be set forth in
an accompanying prospectus supplement or, if appropriate, a post-effective
amendment to the registration statement that includes this prospectus.

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

In order to comply with the securities laws of some states, if applicable, the
common stock may be sold in these jurisdictions only through registered or
licensed brokers or dealers. In addition, in some states the common stock may
not be sold unless it has been registered or qualified for sale or an exemption
from registration or qualification requirements is available and is complied
with.

We have advised the selling stockholders that the anti-manipulation rules of
Regulation M under the Exchange Act may apply to sales of shares in the market
and to the activities of the selling stockholders and their affiliates. In
addition, to the extent applicable we will make copies of this prospectus (as it
may be supplemented or amended from time to time) available to the selling
stockholders for the purpose of satisfying the prospectus delivery requirements
of the Securities Act. The selling stockholders may indemnify any broker-dealer
that participates in transactions involving the sale of the shares against
certain liabilities, including liabilities arising under the Securities Act.

We will pay certain expenses of the registration of the shares of common stock
pursuant to the registration rights agreement, including, without limitation,
Securities and Exchange Commission filing fees and expenses of compliance with
state securities or “blue sky” laws; provided, however, that each selling
stockholder will pay all underwriting discounts and selling commissions, if any
and any related legal expenses incurred by it. We will indemnify the selling
stockholders against certain liabilities, including some liabilities under the
Securities Act, in accordance with the registration rights agreement, or the
selling stockholders will be entitled to contribution. We may be indemnified by
the selling stockholders against civil liabilities, including liabilities under
the Securities Act, that may arise from any written information furnished to us
by the selling stockholders specifically for use in this prospectus, in
accordance with the related registration rights agreement, or we may be entitled
to contribution. We have agreed with the selling stockholders to keep the
registration statement of which this prospectus constitutes a part effective
until the earlier of (1) such time as all of the shares covered by this
prospectus have been disposed of pursuant to and in accordance with the
registration statement or (2) the date on which all of the shares may be sold
without restriction pursuant to Rule 144 of the Securities Act.