Exhibit 10.47

EXECUTION COPY

 

 

 

AMENDED AND RESTATED

PURCHASE OPTION AGREEMENT

by and among

DYNAVAX TECHNOLOGIES CORPORATION,

SYMPHONY DYNAMO HOLDINGS LLC

and

SYMPHONY DYNAMO, INC.

 

 

Dated as of November 9, 2009

 

 

 

 

 

Amended and Restated Purchase Option Agreement

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TABLE OF CONTENTS

 

           Page

Section 1.

   Grant of Purchase Option    2

Section 2.

   Exercise of Purchase Option    2

Section 2A.

   Purchase Option Closing Date Adjustment    5

Section 2B.

   Post-Closing Adjustment    5

Section 3.

   Dynavax Representations, Warranties and Covenants    6

Section 4.

   Holdings Representations, Warranties and Covenants    9

Section 5.

   Symphony Dynamo Representations, Warranties and Covenants    12

Section 6.

   Notice of Material Event    18

Section 7.

   Assignment Transfers; Legend    18

Section 8.

   Costs and Expenses: Payments    19

Section 9.

   Expiration: Termination of Agreement    19

Section 10.

   Survival: Indemnification    20

Section 11.

   No Petition    22

Section 12.

   Third-Party Beneficiary    22

Section 13.

   Notices    22

Section 14.

   Governing Law: Consent to Jurisdiction and Service of Process    23

Section 15.

   WAIVER OF JURY TRIAL    24

Section 16.

   Entire Agreement    24

Section 17.

   Amendment: Successors: Counterparts    24

Section 18.

   Specific Performance    24

Section 19.

   Severability    24

Section 20.

   Tax Reporting    24

Section 21.

   Original Agreement    25

Section 22.

   Amendment to Annex A    25

Annex A

   Certain Definitions   

 

   i    Amended and Restated Purchase Option Agreement

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Exhibit 1    Form of Purchase Option Exercise Notice    Exhibit 2    Form of
Dynavax Promissory Note    Exhibit 3    Form of Standstill and Corporate
Governance Letter Agreement    Exhibit 4    Form of Warrant Purchase Agreement
  

 

   ii    Amended and Restated Purchase Option Agreement

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AMENDED AND RESTATED

PURCHASE OPTION AGREEMENT

This AMENDED AND RESTATED PURCHASE OPTION AGREEMENT (this “Agreement”) is
entered into as of November 9, 2009 (the “Closing Date”) by and among DYNAVAX
TECHNOLOGIES CORPORATION, a Delaware corporation (“Dynavax”), SYMPHONY DYNAMO
HOLDINGS LLC, a Delaware limited liability company (“Holdings”), and SYMPHONY
DYNAMO, INC., a Delaware corporation (“Symphony Dynamo”). Capitalized terms used
herein and not defined herein shall have the meanings assigned to such terms in
Annex A attached hereto.

PRELIMINARY STATEMENT

WHEREAS, Dynavax, Holdings and Symphony Dynamo, entered into that certain
Purchase Option Agreement dated as of April 18, 2006 (the “Original Agreement”),
pursuant to which Holdings granted Dynavax an option to purchase all of the
Common Stock of the Symphony Dynamo and any other Equity Securities issued by
Symphony Dynamo (together, the “Symphony Dynamo Equity Securities”) owned, or
thereafter acquired, by Holdings on the terms described on the terms described
therein;

WHEREAS, institutional investors have invested $50,000,000 in Holdings (the
“Financing”) in exchange for membership interests in Holdings and for a warrant
to purchase up to a total of 2,000,000 shares of Dynavax Common Stock (the
“Warrant”), which were issued to Holdings, and Holdings contributed the net
proceeds of the Financing to Symphony Dynamo;

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

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

WHEREAS, on the Purchase Option Closing Date, Dynavax will issue to Holdings,
subject to the satisfaction of certain conditions (including, without
limitation, the Stockholder Approval (as defined below) and cancellation of the
Warrant), (i) the Dynavax Closing Shares (as defined below), (ii) warrants (the
“Dynavax Closing Warrants”) to purchase 2,000,000 shares of Dynavax Common
Stock, to be initially issued to Holdings (the “Dynavax Closing Warrant Shares”)
and the Dynavax Promissory Note (as defined below); and

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

 

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NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto (the “Parties”) agree as follows:

Section 1. Grant of Purchase Option.

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

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

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

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

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

(iii) The Purchase Option may be exercised only on the date hereof.

Section 2. Exercise of Purchase Option.

(a) Exercise Notice. Dynavax may exercise the Purchase Option only by delivery
of a notice in the form attached hereto as Exhibit 1 (the “Purchase Option
Exercise Notice”) on the date hereof. The Purchase Option Exercise Notice shall
be delivered to Holdings and Symphony Dynamo and shall be irrevocable once
delivered. The date on which the Purchase Option Exercise Notice is first
delivered to Holdings and Symphony Dynamo is referred to as the “Purchase Option
Exercise Date.” The Purchase Option Exercise Notice shall contain an estimated
date for the settlement of the Purchase Option (the “Purchase Option Closing”),
which date shall be estimated in accordance with this Section 2(a). Such notice
and election shall be irrevocable once given and made. If, during the period
following delivery of the Purchase Option Exercise Notice, the amount of cash
and cash equivalents held by Symphony Dynamo is an amount less than or equal to
$1,000,000 then Symphony Dynamo shall cease payment of any amounts owed to
Dynavax in respect of its activities pursuant to the Amended and Restated
Research and Development Agreement, but shall continue to pay amounts owed to
all other Persons. The date of the Purchase Option Closing (the “Purchase Option
Closing Date”) shall be the date that is the latest of:

(i) five (5) Business Days following the date that Dynavax receives the
necessary Government Approvals related to its HSR Filings; provided, however,
that Dynavax and Holdings shall make all necessary HSR Filings within five
(5) Business Days following the Purchase Option Exercise Date and shall
diligently pursue the related regulatory process; and

 

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(ii) five (5) Business Days following the date that Dynavax receives the
necessary stockholder approvals for purposes of NASDAQ Marketplace Rule 5635 in
connection with the issuance of Dynavax Closing Shares (as defined below) and
the Dynavax Closing Warrant Shares (the “Stockholder Approval”);

(b) Purchase Price

(i) Subject to the post-closing adjustment pursuant to Section 2B and the
following sentence, as consideration for the sale to Dynavax by Holdings of its
Symphony Dynamo Equity Securities (and for the Symphony Dynamo Equity Securities
of any other Person), on the Purchase Option Closing Date, Dynavax shall issue
to Holdings an aggregate of (A) 13,000,000 shares of Dynavax Common Stock (the
“Dynavax Closing Shares”) and (B) the Dynavax Closing Warrants. If, after the
date hereof and prior to the Purchase Option Closing Date, (x) the number of
outstanding shares of Dynavax Common Stock has been increased, decreased,
changed into or exchanged for a different number or kind of shares or securities
as a result of a reorganization, recapitalization, stock dividend, stock split,
reverse stock split or other similar change in capitalization, an appropriate
and proportionate adjustment shall be made to the number of Dynavax Closing
Shares to be issued at the Purchase Option Closing Date, or (y) there has been a
Specified Company Issuance (as defined below), the consideration to be paid by
Dynavax at the Purchase Option Closing Date may be adjusted in accordance with
Section 2A.

(ii) As further consideration for the sale to Dynavax by Holdings of its
Symphony Dynamo Equity Securities (and for the Symphony Dynamo Equity Securities
of any other Person), if Dynavax enters into any agreement or arrangement with
any third party with respect to the development and/or commercialization of a
Cancer Product or a Hepatitis C Product (each a “Symphony Dynamo Product
Agreement”), Dynavax shall be obligated to pay to Holdings, within 10 Business
Days of Dynavax’s receipt thereof, an amount equal to 50% of the first
$50,000,000 of any upfront, pre-commercialization milestone or similar payments
received by Dynavax under any such Symphony Dynamo Product Agreements.

For the avoidance of doubt, payments from a third party to Dynavax for
reimbursement for research and development, equity or debt issued as part of the
collaboration at fair market value, commercial milestones or royalties shall not
be considered payments received by Dynavax under Symphony Dynamo Product
Agreements for purposes of this Section 2(b).

(iii) As further consideration for the sale to Dynavax by Holdings of its
Symphony Dynamo Equity Securities (and for the Symphony Dynamo Equity Securities
of any other Person), on the Purchase Option Closing Date, Dynavax shall deliver
a duly executed promissory note in the principal amount of $15,000,000,
substantially in the form attached hereto as Exhibit 2 (the “Dynavax Promissory
Note”).

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

(c) [Reserved.]

(d) Surrender of Symphony Dynamo Equity Securities. Subject to the terms and
conditions of this Agreement, on or prior to the Purchase Option Closing Date,
Holdings shall surrender to Dynavax its certificates representing its Symphony
Dynamo Equity Securities, and shall convey good title to such Symphony Dynamo
Equity Securities, free from any Encumbrances and from any and all restrictions
that any sale, assignment or other transfer of such Symphony Dynamo Equity
Securities be consented to or approved by any Person. On or prior to the
Purchase Option Closing Date, Holdings shall remove all directors serving on the
Symphony Dynamo Board, other than the Dynavax Director (as defined in
Section 4(b)(iv) hereof) from the Symphony Dynamo Board as of the Purchase
Option Closing Date.

 

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(e) Valuation of Dynavax Stock. The value per share of the Dynavax Closing
Shares as of the date hereof has been determined by the Parties to equal $1.57.

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

(g) Warrant Purchase Agreement. Subject to the terms and conditions of this
Agreement, on the Purchase Option Closing Date, Holdings and Dynavax shall enter
into a warrant purchase agreement substantially in the form attached hereto as
Exhibit 4 (the “Warrant Purchase Agreement”).

(h) Share Certificates. Any stock certificate(s) issued by Dynavax for Dynavax
Common Stock pursuant to this Section 2 may contain a legend (the “33 Act
Legend”) substantially as follows:

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

This legend shall be removed by Dynavax, subject to, and in accordance with, the
terms of Section 3(b)(iii) hereof.

(i) Government Approvals. On or prior to the Purchase Option Closing Date, each
of Dynavax, Symphony Dynamo and Holdings shall have taken all necessary action
to cause all required Governmental Approvals with respect to such Party
(including, if deemed necessary and without limitation, the preparing and filing
of the pre-merger notification and report forms required under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (“HSR
Filings”)) in connection with the transactions contemplated by this Agreement to
be in effect; provided, however, that with respect to Government Approvals
required by a Governmental Authority other than the United States federal
government and its various branches and agencies, the Parties’ obligations under
this Section 2(i) shall be limited to causing to be in effect only those
Government Approvals, the failure of which to be in effect would, either
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on any of the Parties. Each of Symphony Dynamo and Dynavax shall
pay its own costs associated with taking such action. Symphony Dynamo shall pay
any costs of Holdings associated with obtaining Government Approvals required in
connection with the exercise of the Purchase Option. All other costs and
expenses of Holdings shall be paid by Holdings pursuant to Section 8 hereof,
including any costs arising from any error in Holdings’ initial valuation of its
investment in Symphony Dynamo.

(j) Transfer of Title. Transfer of title to Dynavax of all of the Symphony
Dynamo Equity Securities shall be deemed to occur automatically on the Purchase
Option Closing Date, subject to the issuance by Dynavax on such date of the
portion of the Purchase Price comprised of the Dynavax Closing Shares and the
Dynavax Closing Warrants or Alternate Closing Securities (as defined below), as
applicable, and the Dynavax Promissory Note, and its performance of its other
obligations herein required to be performed, and under the Registration Rights
Agreement, as applicable, on or prior to the Purchase Option Closing Date to the
reasonable satisfaction of Holdings, and thereafter Symphony Dynamo shall treat
Dynavax as the sole holder of all Symphony Dynamo Equity Securities,
notwithstanding the failure of Holdings to tender certificates representing such
shares to Dynavax in accordance with Section 2(d) hereof.

 

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After the Purchase Option Closing Date, Holdings shall have no rights in
connection with such Symphony Dynamo Equity Securities other than the right to
receive the Purchase Price; provided, however, that nothing in this Section 2(j)
shall affect the survivability of any indemnification provision in this
Agreement upon termination of this Agreement.

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

Section 2A. Purchase Option Closing Date Adjustment.

(a) If at any time or from time to time from and after the date hereof through
the Purchase Option Closing Date, Dynavax has issued Additional Dynavax
Securities (any such issuance of Additional Dynavax Securities, a “Specified
Dynavax Issuance”), Holdings may elect (in accordance with the procedures set
forth in Section 2B) to be paid the portion of the Purchase Price comprised of
the Dynavax Closing Shares and the Dynavax Closing Warrants in the form of the
Alternate Securities specified in the Specified Issuance Notice (each as defined
below) (such Alternate Securities paid to Holdings at the Purchase Option
Closing Date, the “Alternate Closing Securities”).

Section 2B. Post-Closing Adjustment.

(a) If at any time and from time to time from and after the Purchase Option
Closing Date through the date occurring six (6) months after the Purchase Option
Closing Date (or if such date is not a Business Day, the first Business Day
thereafter) (such date, the “Final Adjustment Date”), there is a Specified
Dynavax Issuance, as soon as practicable, but in no event later than five
(5) Business Days after the delivery to Dynavax of a Holdings Election Notice
(as defined below) (such date, the “Adjusted Securities Payment Date”),
(i) Dynavax shall issue to Holdings such Alternate Securities in the form
specified in the Specified Issuance Notice, and (ii) Holdings shall deliver to
Dynavax such Dynavax Closing Shares, Dynavax Closing Warrants, Alternate Closing
Securities, or other securities of Dynavax issued pursuant to this Agreement, or
other consideration transferred to Holdings, other than the Dynavax Promissory
Note and the amounts payable pursuant to Section 2(b)(b)(ii), as applicable,
such that on the Adjusted Securities Payment Date Holdings shall own Alternate
Securities, together with all other securities of Dynavax issued, or other
consideration transferred (including the Dynavax Promissory Note and the amounts
payable pursuant to Section 2(b)(b)(ii)), to Holdings pursuant to this
Agreement, to which Holdings is entitled in consideration of the transfer to
Dynavax of the Symphony Collaboration Equity Securities. The foregoing described
transactions between Dynavax and Holdings shall be settled on a net basis. For
the avoidance of doubt, the parties hereby acknowledge and agree that Holdings
may exercise its rights under this Section 2B(a) following each Specified
Dynavax Issuance that occurs after the date of this Agreement and on or prior to
the Final Adjustment Date.

(b) Not later than five (5) Business Days prior to the consummation of a
Specified Dynavax Issuance, Dynavax shall, in accordance with Section 13,
deliver to Holdings a notice (a “Specified Issuance Notice”) setting forth in
reasonable detail: (i) a description of the form and terms of the Additional
Dynavax Securities to be issued pursuant to the Specified Dynavax Issuance (such
Additional Dynavax Securities, the “Alternate Securities”); (ii) the price at
which the Alternate Securities will be issued pursuant to the Specified Dynavax
Issuance; (iii) the estimated date of issuance of such Alternate Securities; and
(iv) the amount and form of Alternate Securities that would be issued to an
investor participating in the Specified Dynavax Issuance upon payment to Dynavax
of an amount equal to

 

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$20,446,000. If Holdings elects to exercise its rights under Section 2B(a) with
respect to a Specified Dynavax Issuance, Holdings, in accordance with
Section 13, shall deliver to Dynavax a notice of such election not later than
one (1) Business Day prior to the consummation of such Specified Dynavax
Issuance (the “Holdings Election Notice”). The failure of Holdings to notify
Dynavax pursuant to this Section 2B(b) shall be deemed to constitute the waiver
by Holdings of its rights under Section 2B(a) with respect to such Specified
Dynavax Issuance.

(c) “Additional Dynavax Securities” shall mean all shares of Dynavax Common
Stock, Options, Convertible Securities, notes, bonds, or any other securities
issued by Dynavax, or cash or other consideration paid or delivered by or on
behalf of Dynavax, other than the following (collectively, “Exempted
Securities”):

(i) rights, options or warrants to subscribe for, purchase or otherwise acquire
Dynavax Common Stock (“Options”), or shares of restricted stock or stock
appreciation rights, issued to employees or directors of, or consultants or
advisors to, Dynavax or any of its subsidiaries pursuant to a plan, agreement or
arrangement approved by the board of directors of Dynavax;

(ii)(1) shares of Dynavax Common Stock actually issued upon the exercise of
Options or (2) shares of Dynavax Common Stock actually issued upon the
conversion or exchange of any evidences of indebtedness, shares or other
securities directly or indirectly convertible into or exchangeable for Dynavax
Common Stock, but excluding Options (“Convertible Securities”), in each case
provided such issuance is pursuant to the terms of such Option or Convertible
Security;

(iii) shares of Dynavax Common Stock, Options or Convertible Securities issued
by reason of a dividend on the outstanding Dynavax Common Stock, stock split of
the outstanding Dynavax Common Stock, split-up of the outstanding Dynavax Common
Stock or other distribution on shares of Dynavax Common Stock; or

(iv) shares of Dynavax Common Stock sold and issued pursuant to that certain
Equity Distribution Agreement dated August 17, 2009, by and between Dynavax and
Wedbush Morgan Securities, Inc. (the “ATM Securities”).

Section 3. Dynavax Representations, Warranties and Covenants. As of the date
hereof, Dynavax hereby represents and warrants, and, except to the extent that
any of the following representations and warranties is limited to the date of
this Agreement or otherwise limited, on the Purchase Option Closing Date and
each Adjusted Securities Payment Date, shall be deemed to have represented and
warranted, to Holdings and Symphony Dynamo that:

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

(ii) Authority and Validity. Dynavax has all requisite corporate power and
authority to execute, deliver and perform its obligations under this Agreement,
the Dynavax Promissory Note, the Warrant Purchase Agreement, and the Standstill
and Corporate Governance Letter Agreement (the “Ancillary Agreements”), and to
consummate the transactions contemplated hereby and thereby. The execution,
delivery and performance by Dynavax of this Agreement and the Ancillary
Agreements and the consummation of the transactions contemplated hereby and
thereby have been duly and validly authorized by all necessary action required
on the part of Dynavax, and no other proceedings on the part of Dynavax, other
than the Stockholder Approval, which will be obtained prior to the Purchase
Option Closing Date, are necessary to authorize this Agreement or the Ancillary
Agreements or for Dynavax to perform its obligations hereunder or thereunder.
This Agreement and the Ancillary Agreements constitute the lawful, valid and
legally binding obligations of Dynavax, enforceable in accordance with their
terms, except as the same may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors’ rights generally and general equitable principles regardless of
whether such enforceability is considered in a proceeding at law or in equity.

 

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

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

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

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

(i) Immediately prior to the Purchase Option Closing Date, Dynavax shall have
sufficient authorized but unissued, freely transferable and nonassessable shares
of Dynavax Common Stock or Alternate Closing Securities, as applicable,
available to satisfy its obligation to deliver the Dynavax Closing Shares or
Alternate Closing Securities, as applicable, the Dynavax Closing Warrant Shares
and the shares of Dynavax Common Stock issuable pursuant to the Dynavax
Promissory Note (the “Dynavax Promissory Note Shares”). Immediately prior to
each Adjusted Securities Payment Date, Dynavax shall have sufficient authorized
but unissued, freely transferable and nonassessable Alternate Securities
available to satisfy its obligation to deliver such Alternate Securities as
required pursuant to Section 2B(a). Dynavax shall deliver to Holdings on or
prior to the Purchase Option Closing Date a legal opinion of Cooley Godward
Kronish LLP (or such other counsel as Dynavax and Holdings shall mutually
agree), which opinion shall be, in form and substance, reasonably acceptable to
Holdings. If Alternate Securities are to be issued pursuant to Section 2B(a),
Dynavax shall deliver to Holdings on or before each Adjusted Securities Payment
date a legal opinion of Cooley Godward Kronish LLP (or such other counsel as
Dynavax and Holdings shall mutually agree), which opinion shall be, in form and
substance, reasonably acceptable to Holdings.

 

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(ii) Dynavax, on the Purchase Option Closing Date, shall convey good and
marketable title to the Dynavax Closing Shares or Alternate Closing Securities,
as applicable, free from any Encumbrances and any and all other restrictions
that any issuance, sale, assignment or other transfer of Dynavax Closing Shares
or Alternate Closing Securities, as applicable, be consented to or approved by
any Person. Dynavax, on each Adjusted Securities Payment Date, shall convey good
and marketable title to the Alternate Securities issued pursuant to
Section 2B(a), free from any Encumbrances and any and all other restrictions
requiring that any issuance, sale, assignment or other transfer of such
Alternate Securities be consented to or approved by any Person.

(iii) If the share certificates representing the Dynavax Closing Shares or
Alternate Closing Securities, as applicable, and any Alternate Securities issued
pursuant to Section 2B(a), include the 33 Act Legend (as set forth in
Section 2(f) hereof), Dynavax shall, within two (2) Business Days of receiving a
request from Holdings or any “Investor” (as defined in the Registration Rights
Agreement), remove or cause to be removed the 33 Act Legend from such share
certificates as Holdings or such Investor shall designate, so long as (x) the
Dynavax Closing Shares or Alternate Closing Securities or such Alternate
Securities, as applicable, represented by such share certificates has been
transferred to a third party in compliance with the registration requirements of
the Securities Act or an available exemption therefrom, and (y) Dynavax receives
a certification from Holdings, such Investor or a securities broker designated
by Holdings or such Investor to the effect that the sale of such Dynavax Closing
Shares or Alternate Closing Securities or such Alternate Securities, as
applicable, was made under a Registration Statement and accompanied by the
delivery of a current prospectus.

(iv) Upon the termination of this Agreement pursuant to Section 9 hereof, or as
soon thereafter as is practical, Dynavax shall (A) in accordance with
Sections 2.7 and 2.8 of the Novated and Restated Technology License Agreement,
deliver to Symphony Dynamo all regulatory submissions, clinical master files,
development plans, consultant inputs, manufacturing reports and, to the extent
requested by Symphony, other materials, documents, files and other information
relating to the Programs and necessary to enable Symphony Dynamo to continue the
development of the Programs (or, where necessary, copies thereof), and (B) in
accordance with and pursuant to Section 2.12 of the Novated and Restated
Technology License Agreement, negotiate in good faith, and on commercially
reasonable terms and conditions, a supply agreement relating to materials,
including compounds and Products, required by Symphony Dynamo or its partners or
transferees for the continued development (including clinical development),
manufacture and commercialization of Products.

(v) [Reserved].

(vi) Prior to each Adjusted Securities Payment Date, Dynavax shall take all such
actions (at Dynavax’s sole cost and expense) as are necessary to permit Dynavax
to issue the Alternate Securities to Holdings in accordance with Section 2B(a).

(vii) Dynavax shall take all such actions (at Dynavax’s sole cost and expense)
as are necessary or advisable to cause (A) the issuance of any Alternate
Securities by Dynavax to Holdings or (B) the transfer of any securities of
Dynavax by Holdings to Dynavax, in each case pursuant to Section 2B(a), to be
exempted from Section 16(b) of the Exchange Act, provided that Holdings shall
notify Dynavax promptly of any transactions by it involving Dynavax Common Stock
that could implicate Section 16(b) of the Exchange Act.

(viii) Dynavax agrees to use its commercially reasonable efforts to obtain the
Stockholder Approval. In connection with the foregoing, Dynavax shall call and
hold a meeting of its stockholders to seek Stockholder Approval prior to the
date that is six (6) months from the date hereof, and file with the SEC a proxy
statement and shall use its commercially reasonable efforts to solicit proxies
in favor of the Stockholder Approval, and shall use its commercially reasonable
efforts to respond to any comments of the SEC or its staff and to cause a
definitive proxy

 

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statement related to such stockholders’ meeting to be mailed to Dynavax’s
stockholders. The Dynavax Board shall recommend Stockholder Approval and such
recommendation shall be included in each proxy statement filed with the SEC and
disseminated to the Dynavax stockholders in connection with such stockholder
meeting (such recommendations, the “Dynavax Board Recommendation”). Dynavax
shall notify Holdings promptly of the receipt of any comments from the SEC or
its staff and of any request by the SEC or its staff for amendments or
supplements to such proxy statement or for additional information and will
supply Holdings with copies of all correspondence between Dynavax or any of its
representatives, on the one hand, and the SEC or its staff, on the other hand,
with respect to such proxy statement. If at any time prior to such stockholders’
meeting there shall occur any event that is required to be set forth in an
amendment or supplement to the proxy statement, Dynavax shall as promptly as
practicable prepare and mail to its stockholders such an amendment or
supplement. Each of Holdings and Dynavax agrees promptly to correct any
information provided by it or on its behalf for use in the proxy statement if
and to the extent that such information shall have become false or misleading in
any material respect, and Dynavax shall as promptly as practicable prepare and
mail to its stockholders an amendment or supplement to correct such information
to the extent required by applicable laws and regulations. Dynavax shall provide
Holdings with drafts of each such proxy statement, or amendment or supplement
thereto, and consult with Holdings regarding the same, in each case, prior to
filing or mailing the same. Without limiting the generality of the foregoing,
Dynavax’s obligations pursuant to the first two sentences of this
Section 3(b)(viii) shall not be affected by the withdrawal or modification by
the Dynavax Board or any committee thereof of the Dynavax Board Recommendation.
In the event that Stockholder Approval is not obtained at the first meeting of
stockholders at which Stockholder Approval is sought, at the written request of
Holdings, Dynavax shall call and convene no more than one subsequent meeting of
stockholders for the purpose of obtaining Stockholder Approval (and the Dynavax
Board will unanimously recommend Stockholder Approval), which meeting may not be
unreasonably delayed by Dynavax, and all covenants between the parties set forth
in this Section 2(b)(viii) shall apply equally with respect to such subsequent
meeting of stockholders. Unless otherwise required by applicable law, Dynavax
shall not call or convene a meeting of its stockholders prior to the meeting of
stockholders at which Stockholder Approval is sought.

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

(x) Prior to the Purchase Option Closing, Dynavax shall take all such actions as
are necessary or advisable to cause Symphony Dynamo to declare and pay the
Pre-Closing Holdings Dividend (as defined below).

Section 4. Holdings Representations, Warranties and Covenants.

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

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

(ii) Authority and Validity. Holdings has all requisite limited liability
company power and authority to execute, deliver and perform its obligations
under this Agreement and the

 

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Ancillary Agreements to which it is a party and to consummate the transactions
contemplated hereby and thereby. The execution, delivery and performance by
Holdings of this Agreement and the Ancillary Agreements to which it is a party
and the consummation of the transactions contemplated hereby and thereby have
been duly and validly authorized by all necessary action required on the part of
Holdings, and no other proceedings on the part of Holdings are necessary to
authorize this Agreement or the Ancillary Agreements to which it is a party or
for Holdings to perform its obligations hereunder or thereunder. This Agreement
and the Ancillary Agreements to which it is a party constitute the lawful, valid
and legally binding obligations of Holdings, enforceable in accordance with
their terms, except as the same may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors’ rights generally and general equitable principles regardless of
whether such enforceability is considered in a proceeding at law or in equity.

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

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

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

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

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

 

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(viii) Accredited Investor.

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

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

(C) Holdings is able to bear the economic risk of such investment for an
indefinite period and to afford a complete loss thereof.

(D) Holdings agrees that the Dynavax Closing Shares and, if issued, the
Alternate Securities may not be resold (1) without registration thereof under
the Securities Act (unless an exemption from such registration is available), or
(2) in violation of any law.

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

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

(i) [Reserved.]

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

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

(iv) Symphony Dynamo Directors. During the Term, Holdings agrees to vote all of
its Symphony Dynamo Equity Securities (or to exercise its right with respect to
such Symphony Dynamo Equity Securities to consent to action in writing without a
meeting) in favor of, as applicable, the election, removal and replacement of
one director of the Symphony Dynamo Board, and any successor thereto, designated
by Dynavax (the “Dynavax Director”) as directed by Dynavax. In furtherance and
not in limitation of the foregoing, Holdings hereby grants to Dynavax an
irrevocable proxy, with respect to all Symphony Dynamo Equity Securities now
owned or hereafter acquired by Holdings, to vote such Symphony Dynamo Equity
Securities or to exercise the right to consent to action in writing without a
meeting with respect to such Symphony Dynamo Equity Securities, such irrevocable
proxy to be exercised solely for the limited purpose of electing, removing and
replacing the Dynavax Director in the event of the failure or refusal of

 

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Holdings to elect, remove or replace such Dynavax Director, as directed by
Dynavax. Additionally, Holdings agrees, during the Term, to the selection of two
(2) independent directors (of the four (4) directors of Symphony Dynamo not
chosen by Holdings at the direction of Dynavax), and any successors thereto.
Such independent directors shall be selected by mutual agreement of Dynavax and
Holdings.

(v) Symphony Dynamo Board. During the Term, Holdings shall not vote any of its
Symphony Dynamo Equity Securities (or exercise its rights with respect to such
Symphony Dynamo Equity Securities by written consent without a meeting) to
increase the size of the Symphony Dynamo Board to more than five (5) members
without the prior written consent of Dynavax.

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

Section 5. Symphony Dynamo Representations, Warranties and Covenants.

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

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

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

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

 

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

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

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

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

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

(b) Symphony Dynamo covenants and agrees that:

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

 

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

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

(iv) Symphony Dynamo will keep complete, proper and separate books of record and
account, including a record of all costs and expenses incurred, all charges
made, all credits made and received, and all income derived in connection with
the operation of the business of Symphony Dynamo, all in accordance with GAAP,
in each case to the extent necessary to enable Symphony Dynamo to comply with
the periodic reporting requirements of this Agreement.

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

(vi) Symphony Dynamo shall permit the representatives of Holdings (including
Holdings’ members and their respective representatives), each Symphony Fund and
Dynavax, at each of their own expense and upon reasonable prior notice to
Symphony Dynamo, to visit the principal executive office of Symphony Dynamo, to
discuss the affairs, finances and accounts of Symphony Dynamo with Symphony
Dynamo’s officers and (with the consent of Symphony Dynamo, which consent will
not be unreasonably withheld) the Symphony Dynamo Auditors (as defined in
Section 5(d)(iii) hereof), all at such reasonable times and as often as may be
reasonably requested in writing.

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

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

(ix) Symphony Dynamo shall permit each Symphony Fund to consult with and advise
the management of Symphony Dynamo on matters relating to the research and
development of the Programs in order to develop the Product.

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

 

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

(xii) During the Term, Dynavax shall have the right to designate, remove and
replace one (1) director of the Symphony Dynamo Board and consent to the
selection of the two (2) independent directors (of the four (4) directors of
Symphony Dynamo not chosen by Holdings at the direction of Dynavax), in each
case including any successors thereto and in accordance with the terms of
Section 4(b)(iv).

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

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

(xv) From and after the Purchase Option Closing Date, Symphony Dynamo shall not
make any further payments to RRD, and immediately prior to the Purchase Option
Closing, Symphony Dynamo shall declare and pay as a dividend to Holdings an
amount in cash equal to $500,000, minus the sum of (A) any and all
outstanding amounts pursuant to the RRD Services Agreement through the Purchase
Option Closing Date, plus (B) all costs and expenses incurred by Symphony Dynamo
that are associated with the consummation of the Purchase Option (including tax
preparation and filings but excluding a final audit), plus (C) all amounts paid
by Symphony Dynamo for the purchase of a tail insurance policy for Symphony
Dynamo (the calculated total, the “Pre-Closing Holdings Dividend”).

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

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

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

(iii) create, incur, assume or permit to exist any Debt other than any Debt
incurred pursuant to the Operative Documents and the Development Budget
(including payables incurred in the ordinary course of business)
(“Excepted Debt”); provided, however, that the aggregate outstanding principal
amount of all such Excepted Debt for borrowed money shall not exceed $1,000,000
at any time;

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

 

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

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

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

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

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

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

(xi) waive, alter, modify, amend or supplement in any manner whatsoever any
material terms and conditions of the RRD Services Agreement, the Funding
Agreement, the Subscription Agreement, or Articles 4 and 6 of the Amended and
Restated Research and Development Agreement, except in compliance with the terms
of the Operative Documents.

(d) Symphony Dynamo covenants and agrees to deliver, cause to be delivered, and
provide access thereto, to each other Party, each Symphony Fund, and such
Auditors as Dynavax may designate, so long as such Auditors shall be subject to
confidentiality requirements at least as stringent as the Confidentiality
Agreement:

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

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

(iii) prior to the close of each fiscal year, Symphony Dynamo shall cause the
Manager to seek to obtain from the Symphony Dynamo Auditors the Client
Schedules to be provided to Dynavax’s Auditors in connection with the Symphony
Dynamo Auditors’ audit of Symphony Dynamo. Within ten (10) Business Days after
the close of each fiscal year, Symphony Dynamo (or the Manager acting on its
behalf) will provide Dynavax’s Auditors with the requested Client Schedules. If
the Symphony Dynamo Auditors deliver the Client Schedules after the end of the
fiscal year, Symphony Dynamo (or the Manager acting on its behalf) will provide
the completed Client Schedules to Dynavax’s Auditors within ten (10) Business
Days of such receipt;

 

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(iv) prior to the close of each fiscal year, Dynavax’ Vice President of Finance,
the Symphony Dynamo Auditors, Dynavax’s Auditors and Symphony Dynamo (or the
Manager acting on its behalf) shall agree to a completion schedule that will
include (A) the provision by Symphony Dynamo to Dynavax of the financial
information reasonably necessary for Dynavax to consolidate and audit the
financial results of Symphony Dynamo and (B) the following financial statements,
including the related notes thereto, audited and certified by the Symphony
Dynamo Auditors: one (1) a balance sheet of Symphony Dynamo as of the close of
such fiscal year, two (2) a statement of net income for such fiscal year, and
three (3) a statement of cash flows for such fiscal year. Such audited annual
financial statements shall set forth in comparative form the figures for the
previous fiscal year, all in reasonable detail, prepared in accordance with
GAAP, and Symphony Dynamo (or the Manager acting on its behalf) shall, to the
extent that Symphony Dynamo (or the Manager acting on its behalf), using
commercially reasonable means, can procure such an opinion, be accompanied by an
opinion thereon of the Symphony Dynamo Auditors to the effect that such
financial statements present fairly, in all material respects, the financial
position of Symphony Dynamo and its results of operations and cash flows and
have been prepared in conformity with GAAP, and that the examination of such
accountants in connection with such financial statements has been made in
accordance with generally accepted auditing standards, and that such audit
provides a reasonable basis for such opinion in the circumstances;

(v) within two (2) Business Days following each calendar month and upon receipt
from Dynavax of its monthly invoice to Symphony Dynamo, current accrued monthly
vendor expenses and prepaid expenses: (A) the unaudited balance sheet of
Symphony Dynamo for the previous calendar month; (B) the unaudited statement of
net income for such previous calendar month; (C) the unaudited statement of cash
flows for such previous calendar month; (D) the trial balance schedule for such
previous calendar month; and (E) related account reconciliations for such
previous calendar month;

(vi) any other documents, materials or other information, including information
and documentation of internal controls and reporting as may be required by
applicable law, rule or regulation (including information prepared in support of
Symphony Dynamo’s efforts pursuant to Section 5(e)) pertaining to Holdings, the
Programs or Symphony Dynamo as Dynavax may reasonably request, including
preliminary financial information;

(vii) within two (2) Business Days following its receipt thereof from Symphony
Dynamo’s tax return preparer, a copy of each income tax return to be filed by
Symphony Dynamo with any foreign, federal, state or local taxing authority
(including all supporting schedules thereto);

(viii) promptly, and in any event within five (5) Business Days of receipt
thereof, copies of any notice to Symphony Dynamo from any federal or state
Governmental Authority relating to any order, ruling, statute or other law or
regulation that would reasonably be expected to have a Material Adverse Effect
on Symphony Dynamo;

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

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

(xi) with reasonable promptness, such other data and information relating to the
business, operations, affairs, financial condition, assets or properties of
Symphony Dynamo or relating to the ability of Symphony Dynamo to perform its
obligations hereunder and under the Operative Documents as from time to time may
be reasonably requested by Dynavax and/or Holdings;

 

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

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

(f) Dynavax agrees to provide reasonable assistance and support for the
financial operations of Symphony Dynamo as may be reasonably requested by
Symphony Dynamo from time to time during the Term; provided that any such
services shall be pursuant to a separate agreement specifying the nature and
amount of assistance and support to be provided and the reimbursement to Dynavax
of costs plus a reasonable profit in the provision of such assistance and
support.

Section 6. Notice of Material Event. Each Party agrees that, upon it receiving
knowledge of a material event or development with respect to any of the
transactions contemplated hereby that, to the knowledge of its executive
officers, is not known to the other Parties, such Party shall notify the other
Parties in writing within three (3) Business Days of the receipt of such
knowledge by any executive officer of such Party; provided, that the failure to
provide such notice shall not impair or otherwise be deemed a waiver of any
rights any Party may have arising from such material event or development and
that notice under this Section 6 shall not in itself constitute notice of any
breach of any of the Operative Documents.

Section 7. Assignment Transfers; Legend.

(a) Assignment by Dynavax and Symphony Dynamo. Neither Dynavax nor Symphony
Dynamo may assign, delegate, transfer, sell or otherwise dispose of
(collectively, “Transfer”), in whole or in part, any or all of their rights or
obligations hereunder to any Person (a “Transferee”) without the prior written
approval of each of the other Parties; provided, however, that Dynavax, without
the prior approval of each of the other Parties, acting in accordance with
Article 14 of the Amended and Restated Research and Development Agreement, may
make such Transfer to any Person which acquires all or substantially all of
Dynavax’s assets or business (or assets or business related to the Programs) or
which is the surviving or resulting Person in a merger or consolidation with
Dynavax; provided, further, that in the event of any Transfer, Dynavax or
Symphony Dynamo, as applicable, shall provide written notice to the other
Parties of any such Transfer not later than thirty (30) days after such Transfer
setting forth the identity and address of the Transferee and summarizing the
terms of the Transfer. In no event shall such

 

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assignment alter the definition of “Dynavax Common Stock” except as a result of
the surviving or resulting “parent” entity in a merger being other than Dynavax,
in which case any reference to Dynavax Common Stock shall be deemed to instead
reference the common stock, if any, of the surviving or resulting entity.

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

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

THE SECURITIES OF SYMPHONY DYNAMO, INC., EVIDENCED HEREBY ARE SUBJECT TO AN
OPTION, HELD BY DYNAVAX, AS DESCRIBED IN AN AMENDED AND RESTATED PURCHASE OPTION
AGREEMENT (THE “PURCHASE OPTION AGREEMENT”) DATED AS OF NOVEMBER 9, 2009, BY AND
AMONG DYNAVAX TECHNOLOGIES CORPORATION, AND THE OTHER PARTIES THERETO, TO
PURCHASE SUCH SECURITIES AT A PURCHASE PRICE DETERMINED PURSUANT TO SECTION 2 OF
THE PURCHASE OPTION AGREEMENT, EXERCISABLE BY WRITTEN NOTICE AT ANY TIME DURING
THE PERIOD SET FORTH THEREIN. COPIES OF THE PURCHASE OPTION AGREEMENT ARE
AVAILABLE AT THE PRINCIPAL PLACE OF BUSINESS OF SYMPHONY DYNAMO, INC. AT 7361
CALHOUN PLACE, SUITE 325, ROCKVILLE, MARYLAND 20855, AND WILL BE FURNISHED TO
THE HOLDER HEREOF UPON WRITTEN REQUEST WITHOUT COST.

Section 8. Costs and Expenses: Payments. Except as otherwise specified in
Section 2(i) hereof, each Party shall pay its own costs and expenses incurred in
connection with the exercise of the Purchase Option; provided, however, that
Dynavax shall pay any filing fees incurred in connection with any HSR Filings
made pursuant to this Agreement.

Section 9. Expiration: Termination of Agreement.

(a) Termination.

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

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

(iii) Holdings may terminate this Agreement in the event that the Purchase
Option Closing Date Shall not have occurred by the six (6) month anniversary of
the date hereof, in which case this agreement shall become null and void ab
initio and the Original Agreement shall simultaneously be reinstated in its
entirety and supersede this Agreement in its entirety.

 

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Section 10. Survival: Indemnification.

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

(i) The representations and warranties of the Parties contained in this
Agreement shall survive for a period of one year from the making of such
representations. The liability. of the Parties related to their respective
representations and warranties hereunder shall not be reduced by any
investigation made at any time by or on behalf of Holdings, Symphony Dynamo or
Dynavax, as applicable.

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

(iii) For the avoidance of doubt, the covenants and agreements set forth in
Section 5(b)(ii)-Section 4(b)(iii), Section 5(b)(x),
Section 5(d)(iii)-Section 5(d)(v), Section 5(d)(vii), and Section 5(e) shall,
upon the completion of all the reporting, accounting and other obligations set
forth therein with respect to the fiscal year in which this Agreement shall
terminate, expire and end without any further obligation by Symphony Dynamo or
Holdings thereunder.

(b) Indemnification. To the greatest extent permitted by applicable law, Dynavax
shall indemnify and hold harmless Holdings and Symphony Dynamo and Holdings
shall indemnify and hold harmless Dynavax, and each of their respective
Affiliates, officers, directors, employees, agents, partners, members,
successors, assigns, representatives of, and each Person, if any (including any
officers, directors, employees, agents, partners, members of such Person) who
controls Holdings, Symphony Dynamo and Dynavax, as applicable, within the
meaning of the Securities Act or the Exchange Act, (each, an “Indemnified
Party”), from and against any and all actions, causes of action, suits, claims,
losses, costs, interest, penalties, fees, liabilities and damages, and expenses
in connection therewith (irrespective of whether any such Indemnified Party is a
party to the action for which indemnification hereunder is sought), and
including reasonable attorneys’ fees and disbursements (hereinafter, a “Loss”),
incurred by any Indemnified Party as a result of, or arising out of, or relating
to: (i) in the case of Dynavax being the Indemnifying Party, (A) any breach of
any representation or warranty made by Dynavax herein or in any certificate,
instrument or document delivered in connection and contemporaneously herewith,
or (B) any breach of any covenant, agreement or obligation of Dynavax contained
herein or in any certificate, instrument or document delivered hereunder,
including, without limitation, actions to enforce the Note, and (ii) in the case
of Holdings being the Indemnifying Party, (A) any breach of any representation
or warranty made by Holdings or Symphony Dynamo herein or in any certificate,
instrument or document delivered in connection and contemporaneously herewith,
or (B) any breach of any covenant, agreement or obligation of Holdings or
Symphony Dynamo contained herein or in any certificate, instrument or document
delivered hereunder. To the extent that the foregoing undertaking by Dynavax or
Holdings may be unenforceable for any reason, such Party shall make the maximum
contribution to the payment and satisfaction of any Loss that is permissible
under applicable law.

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

 

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Indemnified Party under this Section 10 or otherwise, except, as to such
Indemnifying Party’s liability under this Section 10, to the extent, but only to
the extent, that such Indemnifying Party shall have been prejudiced by such
omission, or (y) any other indemnitor from liability that it may have to any
Indemnified Party under the Operative Documents.

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

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

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

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

(iv) any counsel employed by the applicable Indemnifying Party shall fail to
timely commence or diligently conduct the defense of such Indemnified Proceeding
and such failure has materially prejudiced (or, in the reasonable judgment of
the Indemnified Party, is in danger of materially prejudicing) the outcome of
such Indemnified Proceeding;

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

 

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(e) Settlement. Without the prior written consent of such Indemnified Party,
such Indemnifying Party shall not settle or compromise, or consent to the entry
of any judgment in, any pending or threatened Indemnified Proceeding, unless
such settlement, compromise, consent or related judgment (i) includes an
unconditional release of such Indemnified Party from all liability for Losses
arising out of such claim, action, investigation, suit or other legal
proceeding, (ii) provides for the payment of money damages as the sole relief
for the claimant (whether at law or in equity), (iii) involves no finding or
admission of any violation of law or the rights of any Person by the Indemnified
Party, and (iv) is not in the nature of a criminal or regulatory action. No
Indemnified Party shall settle or compromise, or consent to the entry of any
judgment in, any pending or threatened Indemnified Proceeding in respect of
which any payment would result hereunder or under the Operative Documents
without the prior written consent of the Indemnifying Party, such consent not to
be unreasonably conditioned, withheld or delayed.

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

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

Section 13. Notices. Any notice, request, demand, waiver, consent, approval or
other communication which is required or permitted to be given to any Party
shall be in writing and shall be deemed given only if delivered to the Party
personally or sent to the Party by facsimile transmission (promptly followed by
a hard-copy delivered in accordance with this Section 13), by next Business Day
delivery by a nationally recognized courier service, or by registered or
certified mail (return receipt requested), with postage and registration or
certification fees thereon prepaid, addressed to the Party at its address set
forth below:

Dynavax:

Dynavax Technologies Corporation

2929 Seventh Street, Suite 100

Berkeley, CA 94710

Attn: Michael S. Ostrach, Esq., Vice President,

Chief Business Officer and General Counsel

Facsimile: (510) 848-1327

with copies to:

Cooley Godward Kronish LLP

Five Palo Alto Square, 4th Floor

3000 El Camino Real

Palo Alto, CA 94306-2155

Attn: Glen Y. Sato, Esq.

Facsimile: (650) 849-7400

Symphony Dynamo:

Symphony Dynamo, Inc.

7361 Calhoun Place, Suite 325

Rockville, MD 20855

Attn: Charles W. Finn, Ph.D.

Facsimile: (301) 762-6154

 

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Holdings:

Symphony Dynamo Holdings LLC

7361 Calhoun Place, Suite 325

Rockville, MD 20855

Attn: Robert L. Smith, Jr.

Facsimile: (301) 762-6154

with copies to:

Symphony Capital Partners, L.P.

875 Third Avenue

3rd Floor

New York, NY 10022

Attn: Mark Kessel

Facsimile: (212) 632-5401

Symphony Strategic Partners, LLC

875 Third Avenue

3rd Floor

New York, NY 10022

Attn: Mark Kessel

Facsimile: (212) 632-5401

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

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

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

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

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

 

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

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

Section 17. Amendment: Successors: Counterparts.

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

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

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

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

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

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

(a)(i) Holdings shall be treated as the owner of all the Equity Securities of
Symphony Dynamo prior to the consummation of the Purchase Option; (ii) the
Purchase Option shall be treated as an option to acquire all the Equity
Securities of Symphony Dynamo; (iii) the Dynavax Closing Warrants shall be
treated as option premium payable in respect of the grant and exercise of the
Purchase Option; and (iv) Symphony Dynamo shall be treated as the owner of all
the Licensed Intellectual Property and shall be entitled to all deductions
claimed under Section 174 of the Code in respect of the Licensed Intellectual
Property to the extent of the amounts funded by Symphony Dynamo; and

 

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

Section 21. Original Agreement.

(a) The Original Agreement is hereby amended and superseded in its entirety and
restated herein. Such amendment and restatement is effective upon execution of
this Agreement by the Parties. Upon such execution, all provisions of, rights
granted and covenants made in the Original Agreement are hereby superseded in
their entirety by the provisions hereof and shall have no further force or
effect.

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

Section 22. Amendment to Annex A.

(a) The definition of “Purchase Option Agreement” in Annex A is hereby amended
to read, “means the Purchase Option Agreement dated as of the Closing Date,
among Dynavax, Holdings and Symphony Dynamo, as the same may be amended, amended
and restated, supplemented or otherwise modified from time to time.”

(b) The definition of “Registration Rights Agreement” in Annex A is hereby
amended to read, “means the Registration Rights Agreement dated as of the
Closing Date, among Dynavax, Holdings and Symphony Dynamo, as the same may be
amended, amended and restated, supplemented or otherwise modified from time to
time.”

[SIGNATURES FOLLOW ON NEXT PAGE]

 

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

 

DYNAVAX TECHNOLOGIES CORPORATION By:  

/s/ Dino Dina, M.D.

Name:   Dino Dina, M.D. Title:   President & Chief Executive Officer SYMPHONY
DYNAMO HOLDINGS LLC By:  

Symphony Capital Partners, L.P.,

its Manager

By:  

Symphony Capital OF, L.P.,

its general partner

By:  

Symphony GP, LLC,

its general partner

By:  

/s/ Mark Kessel

Name:   Mark Kessel Title:   Managing Member SYMPHONY DYNAMO, INC. By:  

/s/ Harri V. Taranto

Name:   Harri V. Taranto Title:   Chairman of the Board

Signature Page to the Amended and Restated Purchase Option Agreement

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ANNEX A

CERTAIN DEFINITIONS

“$” means United States dollars.

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

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

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

“Additional Funds” has the meaning set forth in Section 2(b) of the Funding
Agreement.

“Additional Funding Date” has the meaning set forth in Section 3 of the Funding
Agreement.

“Additional Party” has the meaning set forth in Section 13 of the
Confidentiality Agreement.

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

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

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

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

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

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

 

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

“Avecia Agreement” has the meaning set forth in Schedule 12.1(f) to the Amended
and Restated Research and Development Agreement.

“Bankruptcy Code” means the United States Bankruptcy Code.

“Berna” has the meaning set forth in Section 11.1(a) of the Amended and Restated
Research and Development Agreement.

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

“Cancer Products” mean any pharmaceutical product comprising a Selected ISS in
the absence of any added tumor, cancer or viral antigen, for use in cancer
treatment or therapy.

“Cancer Program” means the identification, development, manufacture and/or use
of any Cancer Products in accordance with the Development Plan.

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

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

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

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

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

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

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

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

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

 

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

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

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

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

“Closing Certificate for Section 5.1(e)” means the written certificate,
pertaining to the representations made by Dynavax under Section 5.1(e) of the
Novated and Restated Technology License Agreement, provided by Dynavax to
Symphony Dynamo Holdings LLC and Symphony Dynamo on the Closing Date.

“Closing Certificate for Section 5.1(f)” means the written certificate,
pertaining to the representations made by Dynavax under Section 5.1(f) of the
Novated and Restated Technology License Agreement, provided by Dynavax to
Symphony Dynamo Holdings LLC and Symphony Dynamo on the Closing Date.

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

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

“Closing Date” means April 18, 2006.

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

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

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

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

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

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

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

“Confidentiality Agreement” means the Confidentiality Agreement, dated as of the
Closing Date, among Symphony Dynamo, Holdings, Dynavax, each Symphony Fund, SCP,
SSP, Investors, Symphony Capital, RRD and Ann M. Arvin, M.D.

 

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

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

“Debt” of any Person means, without duplication:

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

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

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

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

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

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

(g) all obligations of such Person to purchase, redeem, retire, defease or
otherwise acquire for value any Equity Securities of such Person,

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

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

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

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

 

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

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

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

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

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

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

“Director(s)” has the meaning set forth in the Preliminary Statement of the
Indemnification Agreement.

“Disclosing Party” has the meaning set forth in Section 3 of the Confidentiality
Agreement.

“Discontinuation Closing Date” has the meaning set forth in Section 11.3 of the
Amended and Restated Research and Development Agreement.

“Discontinuation Date” means any date designated by Symphony Dynamo which shall
occur on or after the 90`h day following the receipt by Dynavax of notice from
Symphony Dynamo of Symphony Dynamo’s intent to discontinue a Program in
accordance with the terms of the Amended and Restated Research and Development
Agreement.

“Discontinuation Option” has the meaning set forth in Section 11.3 of the
Amended and Restated Research and Development Agreement.

“Discontinuation Price” has the meaning set forth in Section 11.3 of the Amended
and Restated Research and Development Agreement.

“Discontinuation Price Dispute Notice” has the meaning set forth in
Section 11.3(b) of the Amended and Restated Research and Development Agreement.

 

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“Discontinued Program” has the meaning set forth in Section 2.11 of the Novated
and Restated Technology License Agreement.

“Discontinuation Program Funding” has the meaning set forth in Section 11.3(b)
of the Amended and Restated Research and Development Agreement.

“Disinterested Directors” has the meaning set forth in Article X of the Symphony
Dynamo Charter.

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

“Dynavax” means Dynavax Technologies Corporation, a Delaware corporation.

“Dynavax Common Stock” means the common stock, par value $0.001 per share, of
Dynavax.

“Dynavax Common Stock valuation” has the meaning set forth in Section 2(e) of
the Purchase Option Agreement.

“Dynavax Obligations” has the meaning set forth in Section 6.1 of the Amended
and Restated Research and Development Agreement.

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

“Dynavax Subcontractor” has the meaning set forth in Section 6.2 of the Amended
and Restated Research and Development Agreement.

“Early Purchase Option Exercise” has the meaning set forth in
Section 1(c)(iv) of the Purchase Option Agreement.

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

“Encumbrance” means (i) any security interest, pledge, mortgage, lien (statutory
or other), charge or option to purchase, lease or otherwise acquire any
interest, (ii) any adverse claim, restriction, covenant, title defect,
hypothecation, assignment, deposit arrangement, license or other encumbrance of
any kind, preference or priority, or (iii) any other security agreement or
preferential arrangement of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement).

“Enhancements” means findings, improvements, discoveries, inventions, additions,
modifications, enhancements, derivative works, clinical development data, or
changes to the Licensed Intellectual Property and/or Regulatory Files, in each
case whether or not patentable.

“Equity Securities” means, with respect to any Person, shares of capital stock
of (or other ownership or profit interests in) such Person, warrants, options or
other rights for the purchase or other

 

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

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

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

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

“Excluded ISS” means (a) any ISS testing positive for stimulation of TLR-9 by
Dynavax prior to the Closing Date that is not a Selected ISS, or (b) any ISS
made and tested for activity by Dynavax during the Term that (i) is not designed
to have significant activity with a target other than TLR-9 (whether or not it
also acts through TLR-9) and (ii) is not a Selected ISS.

“Existing NDA” has the meaning set forth in Section 2 of the Confidentiality
Agreement.

“External Directors” has the meaning set forth in the preamble of the
Confidentiality Agreement.

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

“FDA Sponsor” has the meaning set forth in Section 5.1 of the Amended and
Restated Research and Development Agreement.

“Final Discontinuation Price” has the meaning set forth in Section 11.3(c) of
the Amended and Restated Research and Development Agreement.

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

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

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

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

 

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

“Funding Agreement” means the Funding Agreement, dated as of the Closing Date,
among Dynavax, SCP and Investors.

“Funding Notice” has the meaning set forth in Section 2(b) of the Funding
Agreement.

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

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

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

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

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

“Hepatitis B Products” mean any pharmaceutical product comprising a Selected
ISS, either alone or in combination with Hepatitis B Surface Antigen (HBsAg),
whether conjugated or unconjugated to the applicable ISS, for use in Hepatitis B
treatment or therapy.

“Hepatitis B Program” means the identification, development, manufacture and/or
use of any Hepatitis B Products in Accordance with the Development Plan.

“Hepatitis C Products” mean any pharmaceutical product comprising a Selected
ISS, either alone or in combination with an added Hepatitis C antigen, whether
conjugated or unconjugated to the applicable ISS, for use in Hepatitis C
treatment or therapy.

“Hepatitis C Program” means the identification, development, manufacture and/or
use of any Hepatitis C Products in Accordance with the Development Plan.

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

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

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

 

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

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

“Indemnification Agreement” means the Indemnification Agreement among Symphony
Dynamo and the Directors named therein, dated as of the Closing Date.

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

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

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

“Independent Accountant” has the meaning set forth in Section 11.3(c) of the
Amended and Restated Research and Development Agreement.

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

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

“Initial Funds” has the meaning set forth in Section 2(a) of the Funding
Agreement.

“Initial Holdings LLC Agreement” means the Agreement of Limited Liability
Company of Holdings, dated January 10, 2006.

“Initial Investors LLC Agreement” means the Agreement of Limited Liability
Company of Investors, dated January 10, 2006.

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

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

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

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

 

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

“Investors” means Symphony Dynamo Investors LLC.

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

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

“ISS” means any synthetic oligonucleotide sequence or chimeric oligonucleotide
sequence that modulates an immune response, including, but not limited to, such
sequences referred to by Dynavax as immunostimulatory sequences, chimeric
immunomodulatory compounds and branched immunomodulatory compounds.

“Knowledge” means the actual (and not imputed) knowledge of the executive
officers of Dynavax, without the duty of inquiry or investigation.

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

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

“Licensed Intellectual Property” means the Licensed Patent Rights, Symphony
Dynamo Enhancements, Licensor Enhancements and the Licensed Know-How.

“Licensed Know-How” means any and all proprietary technology that is Controlled
by Licensor as of the Closing Date and that relates to the Licensed Patent
Rights, Regulatory Files, ISSs or the Programs, including without limitation,
manufacturing processes or protocols, know-how, writings, documentation, data,
technical information, techniques, results of experimentation and testing,
diagnostic and prognostic assays, specifications, databases, any and all
laboratory, research, pharmacological, toxicological, analytical, quality
control pre-clinical and clinical data, and other information and materials,
whether or not patentable.

“Licensed Patent Rights” means:

(a) any and all patents, patent applications and invention disclosures
Controlled by Licensor as of the Closing Date and relating to ISSs or the
Programs, including, but not limited to, the patents and patent applications
listed on Annex B to the Novated and Restated Technology License Agreement;

(b) any and all reissues, continuations, divisionals, continuations-in-part (but
only to the extent the subject matter in such continuations-in-part has been
disclosed in the patents or patent applications listed on Annex B),
reexaminations, renewals, substitutes, extensions or foreign counterparts of the
foregoing, whether filed prior to or after the expiration or termination of the
Purchase Option; and

 

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(c) any and all patents and patent applications that claim Licensor Enhancements
or Symphony Dynamo Enhancements.

“Licensor” means Dynavax.

“Licensor Enhancements” means all findings, improvements, discoveries,
inventions, additions, modifications, enhancements, derivative works, clinical
development data, or changes to the Licensed Patent Rights, Licensed Know-How,
Regulatory Files, ISSs, Products or the Programs, in each case, developed by
Licensor during the Term in the course of performing Dynavax’s rights and
obligations under the Amended and Restated Research & Development Agreement (in
each case whether or not patentable), to the extent such items do not otherwise
qualify as Symphony Dynamo Enhancements hereunder, regardless of whether such
work is funded by Symphony Dynamo or Dynavax.

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

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

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

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

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

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

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

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

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

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

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

 

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“Medical Discontinuation Event” means (a) as specified in each Protocol, those
data that, if collected in such Protocol, demonstrate that such Protocol should
not be continued or (b) a series of adverse events, side effects or other
undesirable outcomes that, when collected in a Protocol, would cause a
reasonable FDA Sponsor to discontinue such Protocol.

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

“NASDAQ” means the National Association of Securities Dealers Automated
Quotation System.

“NDA” means a New Drug Application, as defined in the regulations promulgated by
the United States Food and Drug Administration, or any foreign equivalent
thereof.

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

“Non-Symphony Dynamo ISS” means any ISS that is (i) first made and tested for
activity by Dynavax during the Term and (ii) designed to have significant
activity with a target other than TLR-9, whether or not it also acts through
TLR-9.

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

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

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

“Partial Stock Payment” has the meaning set forth in Section 3(a)(iii) of the
Purchase Option Agreement.

“Party(ies)” means, for each Operative Document or other agreement in which it
appears, the parties to such Operative Document or other agreement, as set forth
therein. With respect to any

 

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agreement in which a provision is included therein by reference to a provision
in another agreement, the term “Party” shall be read to refer to the parties to
the document at hand, not the agreement that is referenced.

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

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

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

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

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

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

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

“Products” means Cancer Products, Hepatitis B Products and Hepatitis C Products.

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

“Program Option” has the meaning set forth in Section 11.1(a) of the Amended and
Restated Research and Development Agreement.

“Program Option Closing Date” has the meaning set forth in Section 11.1(b) of
the Amended and Restated Research and Development Agreement.

“Program Option Exercise Date” has the meaning set forth in Section 11.1(b) of
the Amended and Restated Research and Development Agreement.

“Program Option Exercise Notice” has the meaning set forth in Section 11.1(b) of
the Amended and Restated Research and Development Agreement.

“Program Option Period” has the meaning set forth in Section 11.1(a) of the
Amended and Restated Research and Development Agreement.

“Programs” means Cancer Program, Hepatitis B Program and Hepatitis C Program.

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

 

   13    Amended and Restated Purchase Option Agreement

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

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

“Purchase Option Agreement” means this Purchase Option Agreement dated as of the
Closing Date, among Dynavax, Holdings and Symphony Dynamo.

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

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

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

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

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

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

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

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

“Put Option” has the meaning set forth in Section 2A of the Purchase Option
Agreement.

“Put Option Exercise Notice” has the meaning set forth in Section 2A of the
Purchase Option Agreement.

“QA Audits” has the meaning set forth in Section 6.5 of the Amended and Restated
Research and Development Agreement.

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

 

   14    Amended and Restated Purchase Option Agreement

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“Regents” has the meaning set forth in Section 3.1 of the Novated and Restated
Technology License Agreement.

“Regents Agreement” has the meaning set forth in Section 3.1 of the Novated and
Restated Technology License Agreement.

“Registration Rights Agreement” means the Registration Rights Agreement dated as
of the Closing Date, between Dynavax and Holdings.

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

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

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

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

“Related Oncology Products Agreement” has the meaning set forth in Section 1 1.4
of the Amended and Restated Research and Development Agreement.

“Replacement Warrant(s)” has the meaning set forth in Section 7.08 of the
Warrant Purchase Agreement.

“Representative” of any Person means such Person’s shareholders, principals,
directors, officers, employees, members, managers and/or partners.

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

“Rhein” has the meaning set forth in Section 11.1(a) of the Amended and Restated
Research and Development Agreement.

“Rhein Sale Agreement” has the meaning set forth in Section 11.2(a) of the
Amended and Restated Research and Development Agreement.

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

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

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

 

   15    Amended and Restated Purchase Option Agreement

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“RRD Parties” has the meaning set forth in Section 9(e) of the RRD Services
Agreement.

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

“RRD Services Agreement” means the RRD Services Agreement between Symphony
Dynamo and RRD, dated as the Closing Date, 2006.

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

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

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

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

“SD Program Option” has the meaning set forth in Section 11.2(b) of the Amended
and Restated Research and Development Agreement.

“SD Program Option Exercise Notice” has the meaning set forth in Section 11.2(b)
of the Amended and Restated Research and Development Agreement.

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

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

“Selected ISS” means any ISS testing positive for stimulation of TLR-9 selected
(i) for inclusion in the Development Plan or (ii) as a backup ISS, in each case
pursuant to Paragraph 12 of the Development Committee Charter. Selected ISS may
include sequences that subsequent to the Closing Date are shown to act through
one or more additional mechanisms in addition to stimulation of TLR-9.

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

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

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

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

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

“Subcontracting Agreement” has the meaning set forth in Section 6.2 of the
Amended and Restated Research and Development Agreement.

 

   16    Amended and Restated Purchase Option Agreement

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

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

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

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

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

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

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

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

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

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

“Symphony Dynamo Enhancements” means findings, improvements, discoveries,
inventions, additions, modifications, enhancements, derivative works, clinical
development data, or changes to the Licensed Intellectual Property, Regulatory
Files, ISSs, Products or the Programs, made by or on behalf of Symphony Dynamo
during the Term, in each case whether or not patentable.

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

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

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

 

   17    Amended and Restated Purchase Option Agreement

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

“Tangible Materials” means any tangible documentation, whether written or
electronic, existing as of the Closing Date or during the Term, that is
Controlled by the Licensor, embodying the Licensed Intellectual Property,
Regulatory Files, Products or the Programs, including, but not limited to,
documentation, patent applications and invention disclosures.

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

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

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

“Territory” means the world.

“Third Party IP” has the meaning set forth in Section 2.11 of the Novated and
Restated Technology License Agreement.

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

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

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

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

“Warrant(s)” means the “Warrant” as defined in Section 2.01 of the Warrant
Purchase Agreement, and/or any successor certificates exercisable for Warrant
Shares issued by Dynavax.

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

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

“Warrant Purchase Agreement” means the Warrant Purchase Agreement, dated as of
the Closing Date, between Dynavax and Holdings.

“Warrant Shares” has the meaning set forth in Section 2.01 of the Warrant
Purchase Agreement.

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

 

   18    Amended and Restated Purchase Option Agreement

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Exhibit 1

FORM OF PURCHASE OPTION EXERCISE NOTICE

            , 20    

Attention:                             

Ladies and Gentlemen:

Reference is hereby made to that certain Amended and Restated Purchase Option
Agreement dated as of November 9, 2009 (the “Purchase Option Agreement”) by and
among Dynavax Technologies Corporation, a Delaware corporation (“Dynavax”),
Symphony Dynamo Holdings LLC, a Delaware limited liability company, and Symphony
Dynamo, Inc., a Delaware corporation. Capitalized terms used herein and not
otherwise defined herein shall have the meanings assigned thereto in the
Purchase Option Agreement.

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

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

Dynavax estimates that the Purchase Option Closing Date will be
                    .

 

Very truly yours, DYNAVAX TECHNOLOGIES CORPORATION By:  

 

Name:   Title:  

Exhibit 1 to the

Purchase Option Agreement

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Exhibit 2

EXECUTION COPY

FORM OF DYNAVAX PROMISSORY NOTE

THIS PROMISSORY NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OTHERWISE
DISPOSED OF, UNLESS IN ACCORDANCE WITH THE FOREGOING SECURITIES LAWS AND WITH
THE TERMS HEREOF.

PROMISSORY NOTE

 

$15,000,000.00               ,     , 2009

FOR VALUE RECEIVED, Dynavax Technologies Corporation, a Delaware corporation
(“Obligor”), promises to pay to Symphony Dynamo Holdings LLC, a Delaware limited
liability company (“Payee”), in lawful money of the United States of America,
the principal sum of Fifteen Million Dollars ($15,000,000.00).

This Promissory Note (this “Note”) has been executed and delivered pursuant to
and in accordance with the terms and conditions of that certain Amended and
Restated Purchase Option Agreement, dated as of the date hereof, by and among
Obligor, Payee and the other parties thereto (the “Agreement”) and is subject to
the terms and conditions of the Agreement. Capitalized terms used in this Note
without definition shall have the respective meanings set forth in the
Agreement.

1. PAYMENTS

1.1 MATURITY DATE

The principal amount of this Note shall be due and payable on December 31, 2012
(the “Maturity Date”).

1.2 INTEREST

The principal amount of this Note shall not bear interest.

1.3 MANNER OF PAYMENT

At the option of Obligor, the principal amount of this Note shall be paid in
(i) cash, (ii) Dynavax Common Stock, or (iii) any combination thereof. In the
event Obligor elects to pay all or a portion of the outstanding principal amount
of this Note using Dynavax Common Stock, in addition to any payment of cash by
Obligor to Payee, Obligor shall issue to Payee on the date of such payment the
number of shares of Dynavax Common Stock (rounded up to the nearest whole
number) equal to (a) (i) an amount equal to the portion of the outstanding
principal amount of this Note to be repaid using Dynavax Common Stock, divided
by (ii) the average closing price of Dynavax Common Stock, as reported by the
NASDAQ Global Market, or other national exchange that is the primary exchange on
which Dynavax Common Stock is then listed, for the thirty (30) trading days
immediately preceding (but not including) the second trading day prior to the
date of such payment multiplied by (b) 1.15.

All Dynavax Common Stock issued to Payee pursuant to the foregoing shall be
registered pursuant to a registration statement filed concurrently with the
issuance of such Dynavax Common Stock in accordance with that certain Amended
and Restated Registration Rights Agreement by and between the Obligor and Payee
of even date herewith. In the event that such Dynavax Common Stock is not
registered in accordance with the foregoing, Dynavax shall make all payments of
principal hereunder in cash.

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All payments in cash on this Note shall be made by wire transfer of immediately
available funds to an account designated by Payee in writing or in such other
manner as may be agreed to by the parties in writing.

1.4 PREPAYMENT

Obligor may, without premium or penalty, at any time and from time to time,
prepay in cash all or any portion of the outstanding principal balance due under
this Note.

2. DEFAULTS

2.1 EVENTS OF DEFAULT

The occurrence of any one or more of the following events with respect to
Obligor shall constitute an event of default hereunder (“Event of Default”):

(a) If Obligor shall fail to pay when due any payment of principal on this Note.

(b) If Obligor shall (i) apply for or consent to the appointment of a receiver,
trustee or liquidator for itself or any of its assets or properties, (ii) admit
in writing its inability to pay its debts as they mature, (iii) make a general
assignment for the benefit of creditors, (iv) be adjudicated as bankrupt or
insolvent, (v) file a voluntary petition in bankruptcy, or a petition or an
answer seeking reorganization or an arrangement with creditors or to take
advantage of any bankruptcy, reorganization, insolvency, readjustment of debt,
dissolution or liquidation law or statute, or any answer admitting the material
allegations of a petition filed against it in any proceeding under any such law
or if action shall be taken by Obligor for the purpose of effecting any of the
foregoing, (vi) have commenced against it any case, proceeding or other action
of a nature described in (i) through (v) above which remains undismissed for a
period of 60 days or (vii) take or be subject to any action similar to those
specified in clauses (i) through (vi) in any jurisdiction;

(c) If an order, judgment or decree shall be entered with respect to Obligor or
all or a substantial part of the assets of Obligor, appointing a receiver,
trustee or liquidator of Obligor, or any similar order, judgment or decree shall
be entered or appointment made in any jurisdiction, and such order, judgment or
decree or appointment shall continue unstayed and in effect for a period of 60
days.

(d) If (i) Obligor shall consolidate or merge with, or sell, lease or otherwise
transfer (in a single transaction or series of related transactions) all or
substantially all of its assets to, any other Person or (ii) any Subsidiary of
Obligor that has assets representing all or substantially all of the assets of
Obligor and its Subsidiaries, taken as a whole, shall consolidate or merge with,
or sell, lease or otherwise transfer (in a single transaction or series of
related transactions) all or substantially all of its assets to, any other
Person (other than Obligor or another Subsidiary thereof).

(e) If Obligor shall dissolve, be liquidated or wound up for any reason.

2.2 NOTICE BY MAKER

Obligor shall notify Payee in writing within five Business Days after the
occurrence of any Event of Default in accordance with Section 13 of the
Agreement.

2.3 REMEDIES

Upon the occurrence of an Event of Default under clause (a) of Section 2.1, and
at any time thereafter during the continuance of such Event of Default, Payee
may declare the unpaid principal balance of this Note to be due and payable in
whole (or in part, in which case any principal not so declared to be due and
payable may thereafter be declared to be due and payable), and thereupon the
principal of the Note so declared to be due and payable shall

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become due and payable immediately, without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by Obligor; and upon
the occurrence of an Event of Default under clauses (b), (c), (d) or (e) of
Section 2.1, the unpaid principal balance of this Note shall automatically
become due and payable, without presentment, demand, protest or other notice of
any kind, all of which are hereby waived by Obligor. Obligor shall pay all
reasonable documented costs and expenses incurred by or on behalf of Payee in
connection with Payee’s exercise of any or all of its rights and remedies under
this Note, including, without limitation, reasonable attorneys’ fees.

3. MISCELLANEOUS

3.1 WAIVER

The rights and remedies of Payee under this Note shall be cumulative and not
alternative. No waiver by Payee of any right or remedy under this Note shall be
effective unless in a writing signed by Payee. Neither the failure nor any delay
in exercising any right, power or privilege under this Note will operate as a
waiver of such right, power or privilege, and no single or partial exercise of
any such right, power or privilege by Payee will preclude any other or further
exercise of such right, power or privilege or the exercise of any other right,
power or privilege. To the maximum extent permitted by applicable law, (a) no
claim or right of Payee arising out of this Note can be discharged by Payee, in
whole or in part, by a waiver or renunciation of the claim or right unless in a
writing signed by Payee; (b) no waiver that may be given by Payee will be
applicable except in the specific instance for which it is given; and (c) no
notice to or demand on Obligor will be deemed to be a waiver of any obligation
of Obligor or of the right of Payee to take further action without notice or
demand as provided in this Note. Obligor hereby waives presentment, demand,
protest and notice of dishonor and protest.

3.2 NOTICES

Any notice required or permitted to be given hereunder shall be given in
accordance with Section 13 of the Agreement.

3.3 SEVERABILITY

If any provision in this Note is held invalid or unenforceable by any court of
competent jurisdiction, the other provisions of this Note will remain in full
force and effect. Any provision of this Note held invalid or unenforceable only
in part or degree will remain in full force and effect to the extent not held
invalid or unenforceable.

3.4 GOVERNING LAW

This Note shall be governed and construed in accordance with the laws of the
State of New York.

3.5 CONSENT TO JURISDICTION

Any claim arising out of or relating to this Note or the transactions
contemplated hereby may be instituted in any New York State court, Delaware
State court or federal court of the United States of America sitting in the The
City of New York, borough of Manhattan or Wilmington Delaware, and any appellate
court from any jurisdiction thereof, and each party agrees not to assert, by way
of motion, as a defense or otherwise, in any such claim, any claim that it is
not subject personally to the jurisdiction of such court, that the claim is
brought in an inconvenient forum, that the venue of the claim is improper or
that this Note or the subject matter hereof may not be enforced in or by such
court. Each party further irrevocably submits to the jurisdiction of such court
in any such claim. Any and all service of process and any other notice in any
such claim shall be effective against any party if given personally or by
registered or certified mail, return receipt requested, or by any other means of
mail that requires a signed receipt, postage prepaid, mailed to such party as
herein provided. Nothing herein contained shall be deemed to affect the right of
any party to serve process in any manner permitted by law or to commence legal
proceedings or otherwise proceed against any other party in any other
jurisdiction.

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3.6 WAIVER OF JURY TRIAL

EACH PARTY HERETO IRREVOCABLY WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE)
ARISING OUT OF OR RELATING TO THIS NOTE.

3.7 PARTIES IN INTEREST

This Note shall not be assigned or transferred by Payee without the express
prior written consent of Obligor. Subject to the preceding sentence, this Note
will be binding in all respects upon Obligor and inure to the benefit of Payee
and its successors and assigns.

3.8 SECTION HEADINGS; CONSTRUCTION

The headings of Sections in this Note are provided for convenience only and will
not affect its construction or interpretation. All references to “Section” or
“Sections” refer to the corresponding Section or Sections of this Note unless
otherwise specified. All words used in this Note will be construed to be of such
gender or number as the circumstances require. Unless otherwise expressly
provided, the words “hereof’ and “hereunder” and similar references refer to
this Note in its entirety and not to any specific section or subsection hereof,
the words “including” or “includes” do limit the preceding words or terms and
the word “or” is used in the inclusive sense.

[Remainder of page intentionally left blank.]

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EXECUTION COPY

IN WITNESS WHEREOF, Obligor has executed and delivered this Note as of the date
first stated above.

DYNAVAX TECHNOLOGIES CORPORATION

 

By:  

 

Name:   Title:  

Exhibit 2 to the

Amended and Restated Purchase Option Agreement

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Exhibit 3

EXECUTION COPY

FORM OF STANDSTILL AND CORPORATE GOVERNANCE LETTER AGREEMENT

Symphony Dynamo Holdings LLC

7361 Calhoun Place, Suite 325

Rockville, MD 20855

[        ,     ], 2009

Dynavax Technologies Corporation

2929 Seventh Street, Suite 100

Berkeley, CA 94710

Attn: Michael S. Ostrach, Esq., Vice President,

Chief Business Officer and General Counsel

Ladies and Gentlemen:

In connection with the acquisition of shares of Common Stock, par value $0.001
per share (the “Common Stock”), of Dynavax Technologies Corporation, a Delaware
corporation (the “Company”), by Symphony Dynamo Holdings LLC, a Delaware limited
liability company (together with its permitted successors, assigns and
transferees, the “Purchaser”), pursuant to the terms of that certain Amended and
Restated Purchase Option Agreement, dated as of November 9, 2009, among the
Company, the Purchaser and Symphony Dynamo, Inc. (the “Amended and Restated
Purchase Option Agreement”), the Company and the Purchaser agree as follows:

Section 23. Definitions. For purposes of this letter agreement, the following
terms have the respective meanings set forth below:

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

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

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

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

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

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Section 24. Standstill. Except for the exercise of the Dynavax Closing Warrants
(as defined in the Amended and Restated Purchase Option Agreement), the
acquisition of Dynavax Closing Warrant Shares (as defined in the Amended and
Restated Purchase Option Agreement), the acquisition of the Dynavax Promissory
Note Shares (as defined in the Amended and Restated Purchase Option Agreement)
and the acquisition of Alternate Securities (as defined in the Amended and
Restated Purchase Option Agreement), if any, for so long as the Purchaser and
its Affiliates Beneficially Own more than 10% of the Company’s outstanding
Common Stock, neither the Purchaser nor any of its Affiliates shall, without the
prior written consent of a majority of the independent members of the Board who
are not Affiliated with the Purchaser, in any manner, whether directly or
indirectly:

Section 24A. make, effect, initiate, cause or participate in (i) any acquisition
of Beneficial Ownership of any securities of the Company or any securities of
any subsidiary or other Affiliate of the Company, (ii) any acquisition of any
assets of the Company or any assets of any subsidiary or other Affiliate of the
Company, (iii) any tender offer, exchange offer, merger, business combination,
recapitalization, restructuring, liquidation, dissolution or extraordinary
transaction involving the Company or any subsidiary or other Affiliate of the
Company, or involving any securities or assets of the Company or any securities
or assets of any subsidiary or other Affiliate of the Company, or (iv) any
“solicitation” of “proxies” (as those terms are used in the proxy rules of the
Securities and Exchange Commission (“SEC”)) or consents with respect to any
securities of the Company;

Section 24B. form, join or participate in a “group” (as defined in the
Securities Exchange Act and the rules promulgated thereunder) with respect to
the Beneficial Ownership of any securities of the Company;

Section 24C. without limiting any rights of the Purchaser pursuant to Section 6
hereof, act, alone or in concert with others, to seek to control or influence
the management, board of directors or policies of the Company;

Section 24D. take any action that might require the Company to make a public
announcement regarding any of the types of matters set forth in clause “(a)” of
this sentence;

Section 24E. agree or offer to take, or encourage or propose (publicly or
otherwise) the taking of, any action prohibited by clause “(a)”, “(b)”, “(c)” or
“(d)” of this sentence;

Section 24F. assist, induce or encourage any other Person to take any action of
the type prohibited by clause “(a)”, “(b)”, “(c)”, “(d)” or “(e)” of this
sentence;

Section 24G. enter into any discussions, negotiations, arrangement or agreement
with any other Person relating to any of the foregoing; or

Section 24H. request or propose that the Company or any of the Company’s
Affiliates amend, waive or consider the amendment or waiver of any provision set
forth in this Section 2.

Section 25. No Effect on Directors. Notwithstanding any of the foregoing, the
provisions set forth in Section 2 shall in no way limit the ability of any
individual who is serving as a director of the Company to take any actions (or
to refrain from taking any actions) in his or her capacity as a director of the
Company.

Section 26. Voting Agreement. In the event the Purchaser and its Affiliates
Beneficially Own more than 33% of the Company’s outstanding Common Stock, any
shares of Common Stock entitled to vote for the election of directors
Beneficially Owned by the Purchaser and its Affiliates in excess of 33% of the
shares of Common Stock then outstanding, with respect to the election or removal
of directors only, shall be voted either, solely at the Purchaser’s election
(a) as recommended by the Board or (b)(i) in an election, in the same proportion
with the votes of shares of Common Stock voted in such election (excluding
shares with respect to which the votes were withheld, abstained or otherwise not
cast) and not Beneficially Owned by the Purchaser (excluding withheld shares and
abstentions) or (ii) in a removal vote, in the same proportions as all
outstanding shares of Common Stock not Beneficially Owned by the Purchaser
(including shares with respect to which the votes were withheld,

 

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abstained or otherwise not cast), whether at an annual or special meeting of
stockholders of the Company, by written consent or otherwise. The Purchaser
shall retain its right to vote (or to withhold its vote) all of its shares on
all other matters.

Section 27. Lock-Up. The Purchaser and its Affiliates shall not, for a period of
six (6) months after the date hereof, directly or indirectly, offer, sell,
exchange, pledge, hypothecate, encumber, transfer, assign or otherwise dispose
of, whether voluntarily, involuntarily or by operation of law, other than to any
Affiliate, any of its Dynavax Closing Shares, Dynavax Closing Warrants, Dynavax
Closing Warrant Shares, Alternate Closing Securities (as defined in the Amended
and Restated Purchase Option Agreement) or Alternate Securities, if applicable,
or Dynavax Promissory Note Shares, if applicable; provided, however, that
nothing contained in this Section 5 shall in any way restrict (a) the ability of
the Purchaser to transfer any Dynavax Closing Warrants, Dynavax Closing Warrant
Shares, Alternate Closing Securities or Alternate Securities, if applicable, or
Dynavax Promissory Note Shares, if applicable, to Symphony Dynamo Investors LLC
or Symphony Dynamo Holdings LLC and (b) the ability of Symphony Dynamo Investors
LLC and Symphony Dynamo Holdings LLC to transfer any Dynavax Closing Warrants,
Dynavax Closing Warrant Shares, Alternate Closing Securities or Alternate
Securities, if applicable, or Dynavax Promissory Note Shares, if applicable, to
any of their respective members.

Section 28. Board Composition. For so long as the Purchaser and its Affiliates
Beneficially Own more than 10% of the Company’s outstanding Common Stock, then,
subject to applicable law and the rules and regulations of the SEC and the
NASDAQ Stock Market, the Company will nominate and use its commercially
reasonable efforts to cause to be elected and cause to remain as directors on
the Board (x) one (1) individual designated by the Purchaser (as determined in
its sole discretion) and (y) one (1) individual who shall be an independent
third party designated by Purchaser and reasonably acceptable to the Company.

Section 29. Representations. Each party represents to the other that: (a) this
letter agreement has been duly authorized by all necessary corporate or
partnership action, as the case may be; and (b) this letter agreement is a valid
and binding agreement of such party, enforceable against it in accordance with
its terms.

Section 30. Specific Enforcement; Legal Effect. The parties hereto agree that
any breach of this letter agreement would result in irreparable injury to the
other party and that money damages would not be an adequate remedy for such
breach. Accordingly, without prejudice to the rights and remedies otherwise
available under applicable law, either party shall be entitled to specific
performance and equitable relief by way of injunction or otherwise if the other
party breaches or threatens to breach any of the provisions of this letter
agreement. It is further understood and agreed that no failure or delay by
either party in exercising any right, power or privilege hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise thereof preclude
any other or further exercise thereof or the exercise of any right, power or
privilege hereunder. If any term, provision, covenant or restriction in this
letter agreement is held by a court of competent jurisdiction to be invalid,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this letter agreement shall remain in full force and effect and
shall in no way be affected, impaired or invalidated, provided that the parties
hereto shall negotiate in good faith to attempt to place the parties in the same
position as they would have been in had such provision not been held to be
invalid, void or unenforceable. This letter agreement contains the entire
agreement between the parties hereto concerning the matters addressed herein. No
modification of this letter agreement or waiver of the terms and conditions
hereof shall be binding upon either party hereto, unless approved in writing by
each such party; provided, however, that no waiver or amendment shall be
effective as against the Company unless such waiver or amendment is approved in
writing by the vote of a majority of the independent members of the Board who
are not Affiliated with the Purchaser. This Agreement shall be governed by and
construed in accordance with the law of the State of New York.

Section 31. Termination. This agreement shall continue in full force and effect
from the date hereof until such time as the Purchaser and its Affiliates
Beneficially Own less than 10% of the Company’s outstanding Common Stock.

 

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Section 32. Counterparts. This letter agreement may be executed in counterpart
(including by facsimile), each of which shall be deemed an original.

[Remainder of page left blank intentionally]

 

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

 

Very truly yours,

SYMPHONY DYNAMO HOLDINGS LLC By:  

Symphony Capital Partners, L.P.,

its Manager

By:  

Symphony Capital GP, L.P.,

its General Partner

By:  

Symphony GP, LLC,

its General Partner

 

By:  

 

Name:   Title:  

Confirmed and Agreed:

DYNAVAX TECHNOLOGIES CORPORATION

 

By:  

 

Name:   Title:  

Exhibit 3 to the

Amended and Restated Purchase Option Agreement

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Exhibit 4

FORM OF WARRANT PURCHASE AGREEMENT

[See Attached]

Exhibit 4 to the

Amended and Restated Purchase Option Agreement