Exhibit 10.2
REGISTRATION RIGHTS AGREEMENT
          This Registration Rights Agreement (this “Agreement”) is made and
entered into as of December 17, 2008, by and among Ardea Biosciences, Inc., a
Delaware corporation (the “Company”), and the several purchasers signatory
hereto (each a “Purchaser” and collectively, the “Purchasers”).
          This Agreement is made pursuant to the Securities Purchase Agreement,
dated as of the date hereof between the Company and each Purchaser (the
“Purchase Agreement”).
          NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in
this Agreement, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Company and each of the
Purchasers agree as follows:
     1. Definitions. Capitalized terms used and not otherwise defined herein
that are defined in the Purchase Agreement shall have the meanings given such
terms in the Purchase Agreement. As used in this Agreement, the following terms
shall have the following meanings:
          “Advice” shall have the meaning set forth in Section 6(e).
          “Affiliate” means, with respect to any person, any other person which
directly or indirectly controls, is controlled by, or is under common control
with, such person.
          “Business Day” means a day, other than a Saturday or Sunday, on which
banks in New York City are open for the general transaction of business.
          “Closing” has the meaning set forth in the Purchase Agreement.
          “Closing Date” has the meaning set forth in the Purchase Agreement.
          “Commission” means the Securities and Exchange Commission.
          “Common Stock” means the common stock of the Company, par value $0.001
per share, and any securities into which such common stock may hereinafter be
reclassified.
          “Effective Date” means the date that the Registration Statement filed
pursuant to Section 2(a) is first declared effective by the Commission.
          “Effectiveness Deadline” means, with respect to the Initial
Registration Statement or the New Registration Statement, the 90th calendar day
following the Closing Date (or, in the event the Commission reviews and has
written comments to the Initial Registration Statement or the New Registration
Statement, the 120th calendar day following the Closing Date); provided,
however, that if the Company is notified by the Commission that a Registration
Statement will not be reviewed or is no longer subject to further review and
comments, the Effectiveness Deadline as to such Registration Statement shall be
the 10th Trading Day following the date on which the Company is so notified if
such date precedes the dates otherwise required above; provided, further, that
if the Effectiveness Deadline falls on a Saturday, Sunday or other day that the
Commission is closed for business, the Effectiveness Deadline shall be extended
to the next Business Day on which the Commission is open for business.

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          “Effectiveness Period” shall have the meaning set forth in
Section 2(b).
          “Event” shall have the meaning set forth in Section 2(c).
          “Event Date” shall have the meaning set forth in Section 2(c).
          “Exchange Act” means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
          “Filing Deadline” means, with respect to the Initial Registration
Statement required to be filed pursuant to Section 2(a), the 30th calendar day
following the Closing Date, provided, however, that if the Filing Deadline falls
on a Saturday, Sunday or other day that the Commission is closed for business,
the Filing Deadline shall be extended to the next Business Day on which the
Commission is open for business.
          “Holder” or “Holders” means the holder or holders, as the case may be,
from time to time of Registrable Securities.
          “Indemnified Party” shall have the meaning set forth in Section 5(c).
          “Indemnifying Party” shall have the meaning set forth in Section 5(c).
          “Initial Registration Statement” means the initial Registration
Statement filed pursuant to Section 2(a) of this Agreement.
          “Liquidated Damages” shall have the meaning set forth in Section 2(c).
          “Losses” shall have the meaning set forth in Section 5(a).
          “New York Courts” means the state and federal courts sitting in the
City of New York, Borough of Manhattan.
          “Person” means an individual or corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof)
or other entity of any kind.
          “Principal Market” means the Trading Market on which the Common Stock
is primarily listed on and quoted for trading, which, as of the Closing Date,
shall be the NASDAQ Global Market.
          “Proceeding” means an action, claim, suit, investigation or proceeding
(including, without limitation, an investigation or partial proceeding, such as
a deposition), whether commenced or threatened.
          “Prospectus” means the prospectus included in a Registration Statement
(including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities Act), as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Registrable Securities covered by a
Registration Statement, and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such Prospectus.

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          “Registrable Securities” means all of (i) the Shares and (ii) any
securities issued or issuable upon any stock split, dividend or other
distribution, recapitalization or similar event with respect to the foregoing,
provided, that the Holder has completed and delivered to the Company a Selling
Stockholder Questionnaire; and provided, further, that Shares shall cease to be
Registrable Securities upon the earliest to occur of the following: (A) sale
pursuant to a Registration Statement or Rule 144 under the Securities Act (in
which case, only such security sold shall cease to be a Registrable Security);
or (B) becoming eligible for sale by the Holder pursuant to Rule 144 without
being subject to the volume limitations of Rule 144(e) (or any successor rule)
or the manner of sale limitations of Rule 144(f) and following the expiration of
the one-year holding requirement under Rule 144(b)(1)(i) and Rule 144(d).
          “Registration Statement” means any one or more registration statements
of the Company filed under the Securities Act that covers the resale of any of
the Registrable Securities pursuant to the provisions of this Agreement
(including without limitation the Initial Registration Statement, the New
Registration Statement and any Remainder Registration Statements), amendments
and supplements to such Registration Statements, including post-effective
amendments, all exhibits and all material incorporated by reference or deemed to
be incorporated by reference in such Registration Statements.
          “Rule 144” means Rule 144 promulgated by the Commission pursuant to
the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
          “Rule 415” means Rule 415 promulgated by the Commission pursuant to
the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
          “Rule 424” means Rule 424 promulgated by the Commission pursuant to
the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
          “SEC Guidance” means (i) any publicly-available written or oral
guidance, comments, requirements or requests of the Commission staff and
(ii) the Securities Act.
          “Securities Act” means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
          “Selling Stockholder Questionnaire” means a questionnaire in the form
attached as Annex B hereto, or such other form of questionnaire as may
reasonably be adopted by the Company from time to time.
          “Shares” means the shares of Common Stock issued or issuable to the
Purchasers pursuant to the Purchase Agreement or upon exercise of the Warrants
issued pursuant to the Purchasers pursuant to the Purchase Agreement.
          “Trading Day” means (i) a day on which the Common Stock is listed or
quoted and traded on its Principal Market (other than the OTC Bulletin Board),
or (ii) if the Common Stock is not listed on a Trading Market (other than the
OTC Bulletin Board), a day on which the Common Stock is traded in the
over-the-counter market, as reported by the OTC Bulletin Board, or (iii) if the
Common Stock is not quoted on any Trading Market, a day on which the Common
Stock is quoted in the over-the-counter market as reported in the “pink sheets”
by Pink Sheets LLC (or any similar organization or agency succeeding to its
functions of reporting prices); provided, that in the event that the Common

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Stock is not listed or quoted as set forth in (i), (ii) and (iii) hereof, then
Trading Day shall mean a Business Day.
          “Trading Market” means whichever of the New York Stock Exchange, the
American Stock Exchange, the NASDAQ Global Select Market, the NASDAQ Global
Market, the NASDAQ Capital Market or OTC Bulletin Board on which the Common
Stock is listed or quoted for trading on the date in question.
     2. Registration.
          (a) On or prior to the Filing Deadline, the Company shall prepare and
file with the Commission a Registration Statement covering the resale of all of
the Registrable Securities not already covered by an existing and effective
Registration Statement for an offering to be made on a continuous basis pursuant
to Rule 415 or, if Rule 415 is not available for offers and sales of the
Registrable Securities, by such other means of distribution of Registrable
Securities as the Holders may reasonably specify (the “Initial Registration
Statement”). The Initial Registration Statement shall be on Form S-3 (except if
the Company is then ineligible to register for resale the Registrable Securities
on Form S-3, in which case such registration shall be on another appropriate
form in accordance with Section 2(e)) and shall contain (except if otherwise
required pursuant to written comments received from the Commission upon a review
of such Registration Statement) the “Plan of Distribution” section attached
hereto as Annex A. Notwithstanding the registration obligations set forth in
this Section 2, in the event the Commission informs the Company that all of the
Registrable Securities cannot, as a result of the application of Rule 415, be
registered for resale as a secondary offering on a single registration
statement, the Company agrees to promptly (i) inform each of the holders
thereof, (ii) use its commercial reasonable efforts to file amendments to the
Initial Registration Statement as required by the Commission and/or
(iii) withdraw the Initial Registration Statement and file a new registration
statement (a "New Registration Statement”), in either case covering the maximum
number of Registrable Securities permitted to be registered by the Commission,
on Form S-3 or such other form available to register for resale the Registrable
Securities as a secondary offering; provided, however, that prior to filing such
amendment or New Registration Statement, the Company shall be obligated to use
its commercially reasonable efforts to advocate with the Commission for the
registration of all of the Registrable Securities in accordance with the SEC
Guidance, including without limitation, the Manual of Publicly Available
Telephone Interpretations D.29. In the event the Company amends the Initial
Registration Statement or files a New Registration Statement, as the case may
be, under clauses (ii) or (iii) above, the Company will use its commercially
reasonable efforts to file with the Commission, as promptly as allowed by
Commission or staff guidance provided to the Company or to registrants of
securities in general, one or more registration statements on Form S-3 or such
other form available to register for resale those Registrable Securities that
were not registered for resale on the Initial Registration Statement, as
amended, or the New Registration Statement (the “Remainder Registration
Statements”).
          (b) The Company shall use its commercially reasonable efforts to cause
each Registration Statement to be declared effective by the Commission as soon
as practicable and, with respect to the Initial Registration Statement or the
New Registration Statement, as applicable, no later than the Effectiveness
Deadline (including filing with the Commission a request for acceleration of
effectiveness in accordance with Rule 461 promulgated under the Securities Act
within five (5) Business Days after the date that the Company is notified
(orally or in writing, whichever is earlier) by the Commission that such
Registration Statement will not be “reviewed,” or not be subject to further
review and the effectiveness of such Registration Statement may be accelerated)
and shall use its commercially reasonable efforts to keep each Registration
Statement continuously effective under the Securities Act until the earlier of
(i) such time as all of the Registrable Securities covered by such Registration
Statement have been publicly sold by the Holders or (ii) the date that all
Registrable Securities covered by such

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Registration Statement may be sold by pursuant to Rule 144, or any successor
thereto without being subject to the volume limitations of Rule 144(e) or the
manner of sale limitations of Rule 144(f) and following the expiration of the
one-year holding requirement under Rule 144(b)(1)(i) and Rule 144(d) (the
“Effectiveness Period”). The Company shall request effectiveness of a
Registration Statement as of 5:00 p.m. New York City time on a Trading Day. The
Company shall promptly notify the Holders via facsimile or electronic mail of a
“.pdf” format data file of the effectiveness of a Registration Statement on or
before one (1) Trading Day after the day the Company telephonically confirms
effectiveness with the Commission, which confirmation shall be the date
requested for effectiveness of a Registration Statement. The Company shall, by
9:30 a.m. New York City Time on the 2nd Trading Day after the Effective Date,
file a final Prospectus with the Commission, as required by Rule 424(b).
Notwithstanding any other provision of this Agreement and subject to the payment
of liquidated damages in Section 2(c), if any SEC Guidance sets forth a
limitation of the number of Registrable Securities permitted to be registered on
a particular Registration Statement (and notwithstanding that the Company used
diligent efforts to advocate with the Commission for the registration of all or
a greater number of Registrable Securities) any required cutbacks of Shares
shall be applied to the Purchasers pro-rata in accordance with the number of
such Shares sought to be included in such Registration Statement by reference to
such Purchaser’s (and in the case of a subsequent transfer the initial
Purchaser’s) aggregate Subscription Amount relative to all Purchasers’
Subscription Amounts, and first to the shares of Common Stock issuable upon
exercise of the Warrants.
          (c) If: (i) the Initial Registration Statement is not filed with the
Commission on or prior to the Filing Deadline, (ii) the Initial Registration
Statement or the New Registration Statement, as applicable, is not declared
effective by the Commission (or otherwise does not become effective) for any
reason on or prior to the Effectiveness Deadline or (iii) after its Effective
Date, (A) such Registration Statement ceases for any reason (including without
limitation by reason of a stop order, or the Company’s failure to update the
Registration Statement), but excluding the inability of any Holder to sell the
Registrable Securities covered thereby due to market conditions, to remain
continuously effective as to all Registrable Securities for which it is required
to be effective or (B) the Holders are not permitted to utilize the Prospectus
therein to resell such Registrable Securities, in the case of (A) and (B), for
an aggregate of more than twenty (20) consecutive Trading Days or for more than
an aggregate of forty (40) Trading Days during any twelve (12) month period
(which need not be consecutive), other than as a result of a breach of this
Agreement by a Holder or a Holder’s failure to return a Selling Stockholder
Questionnaire within the time period provided by Section 2(c) hereof (any such
failure or breach in clauses (i) through (iii) above being referred to as an
“Event,” and, for purposes of clauses (i) or (ii), the date on which such Event
occurs, or for purposes of clause (iii), the date on which such twenty (20)
consecutive day or forty (40) Trading Day period (as applicable) is exceeded,
being referred to as “Event Date”), then in lieu of any other rights the Holders
may have hereunder or under applicable law, within five (5) Trading Days of each
such Event Date and each monthly anniversary of each such Event Date (if the
applicable Event shall not have been cured by such date) until the applicable
Event is cured, the Company shall pay to each Holder an amount in cash, as
liquidated damages and not as a penalty (“Liquidated Damages”), equal to 1.0% of
the aggregate purchase price paid by such Holder pursuant to the Purchase
Agreement for any Registrable Securities then held by such Holder (which remedy
shall be exclusive of any other remedies available under this Agreement or under
applicable law). The parties agree that (1) in no event shall the Company be
liable in any 30-day period for Liquidated Damages under this Agreement in
excess of 1.0% of the aggregate purchase price paid by the Holders pursuant to
the Purchase Agreement and (2) the maximum aggregate Liquidated Damages payable
to a Holder under this Agreement shall be six percent (6%) of the aggregate
purchase price paid by such Holder pursuant to the Purchase Agreement. If the
Company fails to pay any Liquidated Damages pursuant to this Section in full
within five (5) Business Days after the date payable, the Company will pay
interest thereon at a rate of 1.5% per month (or such lesser maximum amount that
is permitted to be paid by applicable law) to the Holder, accruing daily from
the date such Liquidated Damages are due until such amounts, plus all such
interest thereon, are paid in

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full. The Liquidated Damages pursuant to the terms hereof shall apply on a daily
pro-rata basis for any portion of a month prior to the cure of an Event, except
in the case of the first Event Date. In the event that the Company registers
some but not all of the Registrable Securities, the 1.0% of liquidated damages
referred to above for any monthly period shall be reduced to equal the
percentage determined by multiplying 1.0% by a fraction, the numerator of which
shall be the number of Registrable Securities for which there is not an
effective Registration Statement at such time and the denominator of which shall
be the number of Registrable Securities at such time. The Effectiveness Deadline
for a Registration Statement shall be extended without default or liquidated
damages hereunder in the event that the Company’s failure to obtain the
effectiveness of the Registration Statement on a timely basis results from
(i) the failure of a Purchaser to timely provide the Company with information
requested by the Company and necessary to complete the Registration Statement in
accordance with the requirements of the Securities Act (in which the
Effectiveness Deadline would be extended with respect to Registrable Securities
held by such Purchaser) or (ii) events or circumstances that are not in any way
attributable to the Company.
          (d) Each Holder agrees to furnish to the Company a completed Selling
Stockholder Questionnaire not more than five (5) Trading Days following the date
of this Agreement. Each Holder further agrees that it shall not be entitled to
be named as a selling security holder in the Registration Statement or use the
Prospectus for offers and resales of Registrable Securities at any time, unless
such Holder has returned to the Company a completed and signed Selling
Stockholder Questionnaire. If a Holder of Registrable Securities returns a
Selling Stockholder Questionnaire after the deadline specified in the previous
sentence, the Company shall use its commercially reasonable efforts to take such
actions as are required to name such Holder as a selling security holder in the
Registration Statement or any pre-effective or post-effective amendment thereto
and to include (to the extent not theretofore included) in the Registration
Statement the Registrable Securities identified in such late Selling Stockholder
Questionnaire. Each Holder acknowledges and agrees that the information in the
Selling Stockholder Questionnaire will be used by the Company in the preparation
of the Registration Statement and hereby consents to the inclusion of such
information in the Registration Statement.
          (e) In the event that Form S-3 is not available for the registration
of the resale of Registrable Securities hereunder, the Company shall
(i) register the resale of the Registrable Securities on another appropriate
form and (ii) undertake to register the Registrable Securities on Form S-3
promptly after such form is available, provided that the Company shall maintain
the effectiveness of the Registration Statement then in effect until such time
as a Registration Statement on Form S-3 covering the Registrable Securities has
been declared effective by the Commission.
     3. Registration Procedures
          In connection with the Company’s registration obligations hereunder,
the Company shall:
          (a) Not less than five (5) Trading Days prior to the filing of a
Registration Statement and not less than one (1)Trading Day prior to the filing
of any related Prospectus or any amendment or supplement thereto (except for
Annual Reports on Form 10-K, and Quarterly Reports on Form 10-Q and Current
Reports on Form 8-K and any similar or successor reports), the Company shall,
furnish to the Holder copies of such Registration Statement, Prospectus or
amendment or supplement thereto, as proposed to be filed, which documents will
be subject to the review of such Holder (it being acknowledged and agreed that
if a Holder does not object to or comment on the aforementioned documents within
such five (5) Trading Day or one (1) Trading Day period, as the case may be,
then the Holder shall be deemed to have consented to and approved the use of
such documents). The Company shall not file any Registration Statement or
amendment or supplement thereto in a form to which a Holder

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reasonably objects in good faith, provided that, the Company is notified of such
objection in writing within the five (5) Trading Day or one (1) Trading Day
period described above, as applicable.
          (b) (i) Prepare and file with the Commission such amendments
(including post-effective amendments) and supplements, to each Registration
Statement and the Prospectus used in connection therewith as may be necessary to
keep such Registration Statement continuously effective as to the applicable
Registrable Securities for its Effectiveness Period and prepare and file with
the Commission such additional Registration Statements in order to register for
resale under the Securities Act all of the Registrable Securities; (ii) cause
the related Prospectus to be amended or supplemented by any required Prospectus
supplement (subject to the terms of this Agreement), and, as so supplemented or
amended, to be filed pursuant to Rule 424; (iii) respond as promptly as
reasonably practicable to any comments received from the Commission with respect
to each Registration Statement or any amendment thereto and, as promptly as
reasonably possible, provide the Holders true and complete copies of all
correspondence from and to the Commission relating to such Registration
Statement that pertains to the Holders as “Selling Stockholders” but not any
comments that would result in the disclosure to the Holders of material and
non-public information concerning the Company; and (iv) comply with the
provisions of the Securities Act and the Exchange Act with respect to the
disposition of all Registrable Securities covered by a Registration Statement
until such time as all of such Registrable Securities shall have been disposed
of (subject to the terms of this Agreement) in accordance with the intended
methods of disposition by the Holders thereof as set forth in such Registration
Statement as so amended or in such Prospectus as so supplemented; provided,
however, that each Purchaser shall be responsible for the delivery of the
Prospectus to the Persons to whom such Purchaser sells any of the Shares
(including in accordance with Rule 172 under the Securities Act), and each
Purchaser agrees to dispose of Registrable Securities in compliance with the
plan of distribution described in the Registration Statement and otherwise in
compliance with applicable federal and state securities laws. In the case of
amendments and supplements to a Registration Statement which are required to be
filed pursuant to this Agreement (including pursuant to this Section 3(b)) by
reason of the Company filing a report on Form 10-K, Form 10-Q or Form 8-K or any
analogous report under the Exchange Act, the Company shall have incorporated
such report by reference into such Registration Statement, if applicable, or
shall file such amendments or supplements with the Commission on the same day on
which the Exchange Act report which created the requirement for the Company to
amend or supplement such Registration Statement was filed.
          (c) Notify the Holders (which notice shall, pursuant to clauses
(iii) through (vi) hereof, be accompanied by an instruction to suspend the use
of the Prospectus until the requisite changes have been made) as promptly as
reasonably practicable (and, in the case of (i)(A) below, not less than three
(3) Trading Days prior to such filing, in the case of (iii) and (iv) below, not
more than one (1) Trading Day after such issuance or receipt, in the case of
(v) below, not less than one (1) Trading Day after a determination by the
Company that the financial statements in any Registration Statement have become
ineligible for inclusion therein and, in the case of (vi) below, not more than
one (1) Trading Day after the occurrence or existence of such development) and
(if requested by any such Person) confirm such notice in writing no later than
one (1) Trading Day following the day (i)(A) when a Prospectus or any Prospectus
supplement or post-effective amendment to a Registration Statement is proposed
to be filed; (B) when the Commission notifies the Company whether there will be
a “review” of such Registration Statement and whenever the Commission comments
in writing on any Registration Statement (in which case the Company shall
provide to the Holders true and complete copies of all comments that pertain to
the Holders as a “Selling Stockholder” or to the “Plan of Distribution” and all
written responses thereto, but not information that the Company believes would
constitute material and non-public information); and (C) with respect to each
Registration Statement or any post-effective amendment, when the same has become
effective; (ii) of any request by the Commission or any other Federal or state
governmental authority for amendments or supplements to a Registration Statement
or Prospectus or for additional information that pertains to the Holders as
“Selling Stockholders” or the

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“Plan of Distribution”; (iii) of the issuance by the Commission or any other
federal or state governmental authority of any stop order suspending the
effectiveness of a Registration Statement covering any or all of the Registrable
Securities or the initiation of any Proceedings for that purpose; (iv) of the
receipt by the Company of any notification with respect to the suspension of the
qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction, or the initiation or threatening of any
Proceeding for such purpose; (v) of the occurrence of any event or passage of
time that makes the financial statements included in a Registration Statement
ineligible for inclusion therein or any statement made in such Registration
Statement or Prospectus or any document incorporated or deemed to be
incorporated therein by reference untrue in any material respect or that
requires any revisions to such Registration Statement, Prospectus or other
documents so that, in the case of such Registration Statement or the Prospectus,
as the case may be, it will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the statements therein (in the case of any Prospectus, form of prospectus
or supplement thereto, in light of the circumstances under which they were
made), not misleading; and (vi) the occurrence or existence of any pending
development with respect to the Company that the Company believes may be
material and that, in the determination of the Company, makes it not in the best
interest of the Company to allow continued availability of a Registration
Statement or Prospectus, provided, that any and all of such information shall
remain confidential to each Holder until such information otherwise becomes
public, unless disclosure by a Holder is required by law; provided, further,
that notwithstanding each Holder’s agreement to keep such information
confidential, the Holders make no acknowledgement that any such information is
material, non-public information.
          (d) Use commercially reasonable efforts to avoid the issuance of, or,
if issued, obtain the withdrawal of (i) any order suspending the effectiveness
of a Registration Statement, or (ii) any suspension of the qualification (or
exemption from qualification) of any of the Registrable Securities for sale in
any jurisdiction, as soon as practicable.
          (e) If requested by a Holder, furnish to such Holder, without charge,
at least one conformed copy of each Registration Statement and each amendment
thereto and all exhibits to the extent requested by such Person (including those
previously furnished or incorporated by reference) promptly after the filing of
such documents with the Commission; provided, that the Company shall have no
obligation to provide any document pursuant to this clause that is available on
the Commission’s EDGAR system.
          (f) Prior to any resale of Registrable Securities by a Holder, use its
commercially reasonable efforts to register or qualify or cooperate with the
selling Holders in connection with the registration or qualification (or
exemption from the registration or qualification) of such Registrable Securities
for the resale by the Holder under the securities or Blue Sky laws of such
jurisdictions within the United States as any Holder reasonably requests in
writing, to keep each registration or qualification (or exemption therefrom)
effective during the Effectiveness Period and to do any and all other acts or
things reasonably necessary to enable the disposition in such jurisdictions of
the Registrable Securities covered by each Registration Statement; provided,
that the Company shall not be required to qualify generally to do business in
any jurisdiction where it is not then so qualified, subject the Company to any
material tax in any such jurisdiction where it is not then so subject or file a
general consent to service of process in any such jurisdiction.
          (g) If requested by a Holder, cooperate with such Holder to facilitate
the timely preparation and delivery of certificates representing Registrable
Securities to be delivered to a transferee pursuant to a Registration Statement,
which certificates shall be free, to the extent permitted by the Purchase
Agreement and under law, of all restrictive legends, and to enable such
Registrable Securities to be in such denominations and registered in such names
as any such Holders may reasonably request.

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          (h) Following the occurrence of any event contemplated by
Section 3(c)(iii)-(vi), as promptly as reasonably practicable, prepare a
supplement or amendment, including a post-effective amendment, to the affected
Registration Statements or a supplement to the related Prospectus or any
document incorporated or deemed to be incorporated therein by reference, and
file any other required document so that, as thereafter delivered, no
Registration Statement nor any Prospectus will contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein (in the case of any Prospectus, form of
prospectus or supplement thereto, in light of the circumstances under which they
were made), not misleading.
          (i) Comply with all applicable rules and regulations of the
Commission.
          (j) The Company may require each selling Holder to furnish to the
Company a certified statement as to (i) the number of shares of Common Stock
beneficially owned by such Holder any Affiliate thereof, (ii) any Financial
Industry Regulatory (“FINRA”) affiliations, (iii) any natural persons who have
the power to vote or dispose of the common stock and (iv) any other information
as may be requested by the Commission, FINRA or any state securities commission.
During any periods that the Company is unable to meet its obligations hereunder
with respect to the registration of the Registrable Securities because any
Holder fails to furnish such information within three (3) Trading Days of the
Company’s request, any liquidated damages that are accruing at such time as to
such Holder only shall be tolled and any Event that may otherwise occur solely
because of such delay shall be suspended as to such Holder only, until such
information is delivered to the Company.
          (k) The Company shall cooperate with any registered broker through
which a Holder proposes to resell its Registrable Securities in effecting a
filing with FINRA pursuant to FINRA Rule 5110 as reasonably requested by an such
Holder, and the Company shall pay the filing fee required for the first such
filing within five (5) Trading Days of the request therefor.
     4. Registration Expenses. All fees and expenses incident to the Company’s
performance of or compliance with its obligations under this Agreement
(excluding any underwriting discounts and selling commissions and all legal fees
and expenses of legal counsel for any Holder) shall be borne by the Company
whether or not any Registrable Securities are sold pursuant to a Registration
Statement. The fees and expenses referred to in the foregoing sentence shall
include, without limitation, (i) all registration and filing fees (including,
without limitation, fees and expenses (A) with respect to filings required to be
made with any Trading Market on which the Common Stock is then listed for
trading, (B) with respect to compliance with applicable state securities or Blue
Sky laws (including, without limitation, fees and disbursements of counsel for
the Company in connection with Blue Sky qualifications or exemptions of the
Registrable Securities and determination of the eligibility of the Registrable
Securities for investment under the laws of such jurisdictions as requested by
the Holders) and (C) if not previously paid by the Company pursuant to Section
3(k) hereof, with respect to any filing that may be required to be made by an
broker through which a Holder intends to make sales of Registrable Securities
with FINRA pursuant to FINRA Rule 5110, so long as the broker is receiving no
more than a customary brokerage commission in connection with such sale,
(ii) printing expenses (including, without limitation, expenses of printing
certificates for Registrable Securities and of printing prospectuses if the
printing of prospectuses is reasonably requested by the Holders of a majority of
the Registrable Securities included in the Registration Statement),
(iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of
counsel for the Company, (v) Securities Act liability insurance, if the Company
so desires such insurance, and (vi) fees and expenses of all other Persons
retained by the Company in connection with the consummation of the transactions
contemplated by this Agreement. In addition, the Company shall be responsible
for all of its internal expenses incurred in connection with the consummation of
the transactions contemplated by this Agreement (including, without limitation,
all salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit and the

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fees and expenses incurred in connection with the listing of the Registrable
Securities on any securities exchange as required hereunder. In no event shall
the Company be responsible for any underwriting, broker or similar fees or
commissions of any Holder or, except to the extent provided for in the
Transaction Documents, any legal fees or other costs of the Holders.
     5. Indemnification.
          (a) Indemnification by the Company. The Company shall, notwithstanding
any termination of this Agreement, indemnify, defend and hold harmless each
Holder, the officers, directors, agents, partners, members, managers,
stockholders, Affiliates and employees of each of them, each Person who controls
any such Holder (within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act) and the officers, directors, partners, members,
managers, stockholders, agents and employees of each such controlling Person, to
the fullest extent permitted by applicable law, from and against any and all
losses, claims, damages, liabilities, costs (including, without limitation,
reasonable costs of preparation and investigation and reasonable attorneys’
fees) and expenses (collectively, “Losses”), as incurred, that arise out of or
are based upon any untrue or alleged untrue statement of a material fact
contained in any Registration Statement, any Prospectus or any form of
prospectus or in any amendment or supplement thereto or in any preliminary
prospectus, or arising out of or relating to any omission or alleged omission to
state a material fact required to be stated therein or necessary to make the
statements therein (in the case of any Prospectus or form of prospectus or
supplement thereto, in light of the circumstances under which they were made)
not misleading, or (ii) any violation or alleged violation by the Company of the
Securities Act, Exchange Act, any state securities law, any “blue sky” laws of
any jurisdiction in which Registrable Securities are offered or any rule or
regulation thereunder relating to the offer or sale of the Registrable
Securities pursuant to a Registration Statement or any violation of this
Agreement except to the extent, but only to the extent, that (A) such untrue
statements, alleged untrue statements, omissions or alleged omissions are based
upon information regarding such Holder furnished in writing to the Company by
such Holder expressly for use therein, or to the extent that such information
relates to such Holder or such Holder’s proposed method of distribution of
Registrable Securities and was reviewed and approved by such Holder expressly
for use in a Registration Statement, such Prospectus or such form of Prospectus
or in any amendment or supplement thereto (it being understood that the Holder
has approved Annex A hereto for this purpose), (B) in the case of an occurrence
of an event of the type specified in Section 3(c)(iii)-(vi), related to the use
by a Holder of an outdated or defective Prospectus after the Company has
notified such Holder in writing that the Prospectus is outdated or defective and
prior to the receipt by such Holder of the Advice contemplated and defined in
Section 6(e) below, but only if and to the extent that following the receipt of
the Advice the misstatement or omission giving rise to such Loss would have been
corrected or (C) any such Losses arise out of the Purchaser’s (or any other
indemnified Person’s) failure to send or give a copy of the Prospectus or
supplement (as then amended or supplemented), if required pursuant to Rule 172
under the Securities Act (or any successor rule), to the Persons asserting an
untrue statement or alleged untrue statement or alleged untrue statement or
omission or alleged omission at or prior to the written confirmation of the sale
of Registrable Securities to such Person if such statement or omission was
corrected in such Prospectus or supplement. The Company shall notify the Holders
promptly of the institution, threat or assertion of any Proceeding arising from
or in connection with the transactions contemplated by this Agreement of which
the Company is aware. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of an Indemnified Party (as
defined in Section 5(c)) and shall survive the transfer of the Registrable
Securities by the Holders.
          (b) Indemnification by Holders. Each Holder shall, notwithstanding any
termination of this Agreement, severally and not jointly, indemnify and hold
harmless the Company, its directors, officers, agents and employees, each Person
who controls the Company (within the meaning of Section 15 of the Securities Act
and Section 20 of the Exchange Act), and the directors, officers, agents or

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employees of such controlling Persons, to the fullest extent permitted by
applicable law, from and against all Losses, as incurred, arising out of or are
based solely upon (x) such Holder’s failure to comply with the prospectus
delivery requirements of the Securities Act or (y) any untrue or alleged untrue
statement of a material fact contained in any Registration Statement, any
Prospectus, or any form of prospectus, or in any amendment or supplement thereto
or in any preliminary prospectus, or arising out of or relating to any omission
or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein (in the case of any Prospectus, or any
form of prospectus or supplement thereto, in light of the circumstances under
which they were made) not misleading (i) to the extent, but only to the extent,
that such untrue statements or omissions are based solely upon information
regarding such Holder furnished in writing to the Company by such Holder
expressly for use therein or (ii) to the extent that such information relates to
such Holder or such Holder’s proposed method of distribution of Registrable
Securities and was reviewed and approved by such Holder expressly for use in a
Registration Statement (it being understood that the Holder has approved Annex A
hereto for this purpose), such Prospectus or such form of Prospectus or in any
amendment or supplement thereto or (iii) in the case of an occurrence of an
event of the type specified in Section 3(c)(iii)-(vi), to the extent, but only
to the extent, related to the use by such Holder of an outdated or defective
Prospectus after the Company has notified such Holder in writing that the
Prospectus is outdated or defective and prior to the receipt by such Holder of
the Advice contemplated in Section 6(e). In no event shall the liability of any
selling Holder hereunder be greater in amount than the dollar amount of the net
proceeds received by such Holder upon the sale of the Registrable Securities
giving rise to such indemnification obligation.
          (c) Conduct of Indemnification Proceedings. If any Proceeding shall be
brought or asserted against any Person entitled to indemnity hereunder (an
“Indemnified Party”), such Indemnified Party shall promptly notify the Person
from whom indemnity is sought (the “Indemnifying Party”) in writing, and the
Indemnifying Party shall have the right to assume the defense thereof, including
the employment of counsel reasonably satisfactory to the Indemnified Party and
the payment of all reasonable fees and expenses incurred in connection with
defense thereof; provided, that the failure of any Indemnified Party to give
such notice shall not relieve the Indemnifying Party of its obligations or
liabilities pursuant to this Agreement, except (and only) to the extent that
such failure shall have materially and adversely prejudiced the Indemnifying
Party.
          An Indemnified Party shall have the right to employ separate counsel
in any such Proceeding and to participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Party
or Parties unless: (1) the Indemnifying Party has agreed in writing to pay such
fees and expenses; (2) the Indemnifying Party shall have failed promptly to
assume the defense of such Proceeding and to employ counsel reasonably
satisfactory to such Indemnified Party in any such Proceeding; or (3) the named
parties to any such Proceeding (including any impleaded parties) include both
such Indemnified Party and the Indemnifying Party, and such Indemnified Party
shall have been advised by counsel that a conflict of interest exists if the
same counsel were to represent such Indemnified Party and the Indemnifying Party
(in which case, if such Indemnified Party notifies the Indemnifying Party in
writing that it elects to employ separate counsel at the expense of the
Indemnifying Party, the Indemnifying Party shall not have the right to assume
the defense thereof and such counsel shall be at the expense of the Indemnifying
Party); provided, that the Indemnifying Party shall not be liable for the fees
and expenses of more than one separate firm of attorneys at any time for all
Indemnified Parties. The Indemnifying Party shall not be liable for any
settlement of any such Proceeding effected without its written consent, which
consent shall not be unreasonably withheld, delayed or conditioned. No
Indemnifying Party shall, without the prior written consent of the Indemnified
Party, effect any settlement of any pending Proceeding in respect of which any
Indemnified Party is a party, unless such settlement includes an unconditional
release of such Indemnified Party from all liability on claims that are the
subject matter of such Proceeding.

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          Subject to the terms of this Agreement, all fees and expenses of the
Indemnified Party (including reasonable fees and expenses to the extent incurred
in connection with investigating or preparing to defend such Proceeding in a
manner not inconsistent with this Section) shall be paid to the Indemnified
Party, as incurred, within twenty (20) Trading Days of written notice thereof to
the Indemnifying Party; provided, that the Indemnified Party shall promptly
reimburse the Indemnifying Party for that portion of such fees and expenses
applicable to such actions for which such Indemnified Party is not entitled to
indemnification hereunder). The failure to deliver written notice to the
Indemnifying Party within a reasonable time of the commencement of any such
action shall not relieve such Indemnifying Party of any liability to the
Indemnified Party under this Section 5, except to the extent that the
Indemnifying Party is prejudiced in its ability to defend such action.
          (d) Contribution. If the indemnification under Sections 5(a) or 5(b)
is unavailable to an Indemnified Party, then each Indemnifying Party, in lieu of
indemnifying such Indemnified Party, shall contribute to the amount paid or
payable by such Indemnified Party as a result of such Losses, in such proportion
as is appropriate to reflect the relative fault of the Indemnifying Party and
Indemnified Party in connection with the actions, statements or omissions that
resulted in such Losses as well as any other relevant equitable considerations.
The relative fault of such Indemnifying Party and Indemnified Party shall be
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact or omission
or alleged omission of a material fact, has been taken or made by, or relates to
information supplied by, such Indemnifying Party or Indemnified Party, and the
parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such action, statement or omission. The amount paid or
payable by a party as a result of any Losses shall be deemed to include, subject
to the limitations set forth in this Agreement, any reasonable attorneys’ or
other reasonable fees or expenses incurred by such party in connection with any
Proceeding to the extent such party would have been indemnified for such fees or
expenses if the indemnification provided for in this Section was available to
such party in accordance with its terms.
          The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 5(d) were determined by pro rata
allocation or by any other method of allocation that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 5(d), no Holder shall be required
to contribute, in the aggregate, any amount in excess of the amount by which the
net proceeds actually received by such Holder from the sale of the Registrable
Securities subject to the Proceeding exceeds the amount of any damages that such
Holder has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.
          The indemnity and contribution agreements contained in this Section
are in addition to any liability that the Indemnifying Parties may have to the
Indemnified Parties and are not in diminution or limitation of the
indemnification provisions under the Purchase Agreement.
     6. Miscellaneous.
          (a) Remedies. In the event of a breach by the Company or by a Holder
of any of their obligations under this Agreement, each Holder or the Company, as
the case may be, in addition to being entitled to exercise all rights granted by
law and under this Agreement, including recovery of damages, will be entitled to
specific performance of its rights under this Agreement. The Company and each
Holder agree that monetary damages would not provide adequate compensation for
any losses incurred by reason of a breach by it of any of the provisions of this
Agreement and hereby further agrees

12

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that, in the event of any action for specific performance in respect of such
breach, it shall waive the defense that a remedy at law would be adequate.
          (b) No Piggyback on Registrations. Neither the Company nor any of its
security holders (other than the Holders in such capacity pursuant hereto) may
include securities of the Company in a Registration Statement other than the
Registrable Securities and the Company shall not prior to the Effective Date
enter into any agreement other than the Purchase Agreement and this Agreement
providing any such right to any of its security holders. The Company shall not,
from the date hereof until the date that is 60 days after the Effective Date of
the Registration Statement, prepare and file with the Commission a registration
statement relating to an offering for its own account under the Securities Act
of any of its equity securities other than a registration statement on Form S-8
or, in connection with an acquisition, on Form S-4.
          (c) Compliance. Each Holder covenants and agrees that it will comply
with the prospectus delivery requirements of the Securities Act as applicable to
it in connection with sales of Registrable Securities pursuant to a Registration
Statement and shall sell the Registrable Securities only in accordance with a
method of distribution described in the Registration Statement.
          (d) Suspension of Trading. At any time after the Registrable
Securities are covered by an effective Registration Statement, the Company may
deliver to the Holders of such Registrable Securities a certificate (the
“Suspension Certificate”) approved by the Chief Executive Officer or Chief
Financial Officer of the Company and signed by an officer of the Company stating
that the effectiveness of and sales of Registrable Securities under the
Registration Statement would:
               (i) materially interfere with any transaction that would require
the Company to prepare financial statements under the Securities Act that the
Company would otherwise not be required to prepare in order to comply with its
obligations under the Exchange Act, or
               (ii) require public disclosure of a material transaction or event
prior to the time such disclosure might otherwise be required.
Upon receipt of a Suspension Certificate by Holders of Registrable Securities,
such Holders of Registrable Securities shall refrain from selling or otherwise
transferring or disposing of any Registrable Securities then held by such
Holders for a specified period of time (a “Suspension Period”) that is customary
under the circumstances (not to exceed thirty (30) calendar days).
Notwithstanding the foregoing sentence, the Company shall be permitted to cause
Holders of Registrable Securities to so refrain from selling or otherwise
transferring or disposing of any Registrable Securities on only two
(2) occasions during each twelve (12) consecutive month period that the
Registration Statement remains effective with no less than twenty (20) calendar
days in between Suspension Periods. The Company may impose stop transfer
instructions to enforce any required agreement of the Holders under this
Section 6(d).
          (e) Discontinued Disposition. By its acquisition of Registrable
Securities, each Holder agrees that, upon receipt of a notice from the Company
of the occurrence of any event of the kind described in Section 3(c)(iii)-(vi),
such Holder will forthwith discontinue disposition of such Registrable
Securities under a Registration Statement until it is advised in writing (the
"Advice”) by the Company that the use of the applicable Prospectus (as it may
have been supplemented or amended) may be resumed. The Company may provide
appropriate stop orders to enforce the provisions of this paragraph. The Company
agrees and acknowledges that any periods during which the Holder is required to
discontinue the disposition of the Registrable Securities hereunder shall be
subject to the provisions of Section 2(c) as qualified by Section 3(a).

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          (f) No Inconsistent Agreements. Other than as described in the SEC
Reports (as defined in the Purchase Agreement), neither the Company nor any of
its Subsidiaries has entered, as of the date hereof, nor shall the company or
any of its Subsidiaries, on or after the date hereof, enter into any agreement
with respect to its securities, that would have the effect of impairing the
rights granted to the Holders in this Agreement or otherwise conflicts with the
provisions hereof.
          (g) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified,
supplemented or waived unless the same shall be in writing and signed by the
Company and Holders holding a majority of the then outstanding Registrable
Securities. Notwithstanding the foregoing, a waiver or consent to depart from
the provisions hereof with respect to a matter that relates exclusively to the
rights of Holders and that does not directly or indirectly affect the rights of
other Holders may be given by Holders of all of the Registrable Securities to
which such waiver or consent relates; provided, however, that the provisions of
this sentence may not be amended, modified, or supplemented except in accordance
with the provisions of the immediately preceding sentence.
          (h) Termination. The registration rights provided to the Holders of
Registrable Securities hereunder, and the Company’s obligation to keep the
Registration Statements effective, shall terminate at such time as there are no
Registrable Securities outstanding. Notwithstanding the foregoing, Section 2(c),
Section 4, Section 5, Section 6(i), Section 6(l), Section 6(m), Section 6(n),
Section 6(o) and Section 6(p) shall survive the termination of this Agreement.
          (i) Notices. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be delivered as set forth
in the Purchase Agreement.
          (j) Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the successors and permitted assigns of each of the
parties and shall inure to the benefit of each Holder. Nothing in this
Agreement, express or implied, is intended to confer upon any party other than
the parties hereto or their respective successors and assigns any rights,
remedies, obligations, or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement. The Company may not assign its
rights or obligations hereunder without the prior written consent of all the
Holders of the then outstanding Registrable Securities (other than by merger or
consolidation or to an entity which acquires the Company including by way of
acquiring all or substantially all of the Company’s assets). The rights of the
Holders hereunder, including the right to have the Company register Registrable
Securities pursuant to this Agreement, may be assigned by each Holder to
transferees or assignees of all or any portion of the Registrable Securities,
but only if (i) the Holder agrees in writing with the transferee or assignee to
assign such rights and related obligations under this Agreement, and for the
transferee or assignee to assume such obligations, and a copy of such agreement
is furnished to the Company within a reasonable time after such assignment,
(ii) the Company is, within a reasonable time after such transfer or assignment,
furnished with written notice of the name and address of such transferee or
assignee and the securities with respect to which such registration rights are
being transferred or assigned, (iii) at or before the time the Company received
the written notice contemplated by clause (ii) of this sentence, the transferee
or assignee agrees in writing with the Company to be bound by all of the
provisions contained herein and (iv) the transferee is an “accredited investor,”
as that term is defined in Rule 501 of Regulation D.
          (k) Execution and Counterparts. This Agreement may be executed in two
or more counterparts, each of which when so executed shall be deemed to be an
original and, all of which taken together shall constitute one and the same
Agreement and shall become effective when counterparts have been signed by each
party and delivered to the other party, it being understood that both parties
need not sign the same counterpart. In the event that any signature is delivered
by facsimile transmission or by e-

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mail delivery of a “.pdf” format data file, such signature shall create a valid
and binding obligation of the party executing (or on whose behalf such signature
is executed) with the same force and effect as if such facsimile or “.pdf”
signature were the original thereof.
          (l) Governing Law. All questions concerning the construction,
validity, enforcement and interpretation of this Agreement shall be determined
in accordance with the provisions of the Purchase Agreement.
          (m) Cumulative Remedies. The remedies provided herein are cumulative
and not exclusive of any other remedies provided by law.
          (n) Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their good faith reasonable efforts to find and employ an
alternative means to achieve the same or substantially the same result as that
contemplated by such term, provision, covenant or restriction. It is hereby
stipulated and declared to be the intention of the parties that they would have
executed the remaining terms, provisions, covenants and restrictions without
including any of such that may be hereafter declared invalid, illegal, void or
unenforceable.
          (o) Headings. The headings in this Agreement are for convenience only
and shall not limit or otherwise affect the meaning hereof.
          (p) Independent Nature of Purchasers’ Obligations and Rights. The
obligations of each Purchaser under this Agreement are several and not joint
with the obligations of any other Purchaser hereunder, and no Purchaser shall be
responsible in any way for the performance of the obligations of any other
Purchaser hereunder. The decision of each Purchaser to purchase the Shares and
the Warrants pursuant to the Transaction Documents has been made independently
of any other Purchaser. Nothing contained herein or in any other agreement or
document delivered at any closing, and no action taken by any Purchaser pursuant
hereto or thereto, shall be deemed to constitute the Purchasers as a
partnership, an association, a joint venture or any other kind of entity, or
create a presumption that the Purchasers are in any way acting in concert with
respect to such obligations or the transactions contemplated by this Agreement.
Each Purchaser acknowledges that no other Purchaser has acted as agent for such
Purchaser in connection with making its investment hereunder and that no
Purchaser will be acting as agent of such Purchaser in connection with
monitoring its investment in the Shares and Warrants or enforcing its rights
under the Transaction Documents. Each Purchaser shall be entitled to protect and
enforce its rights, including, without limitation, the rights arising out of
this Agreement, and it shall not be necessary for any other Purchaser to be
joined as an additional party in any Proceeding for such purpose. The Company
acknowledges that each of the Purchasers has been provided with the same
Registration Rights Agreement for the purpose of closing a transaction with
multiple Purchasers and not because it was required or requested to do so by any
Purchaser.
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     IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above.

            ARDEA BIOSCIENCES, INC.
      By:   /s/ Christopher W. Krueger       Name:   Christopher W. Krueger    
  Title:   Chief Business Officer     

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK-
SIGNATURE PAGES OF HOLDERS TO FOLLOW]

 

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

                  NAME OF INVESTING ENTITY      
 
  Visium Balanced Offshore Fund, LTD              
 
                AUTHORIZED SIGNATORY    
 
           
 
  By:   /s/ Mark Gottlieb    
 
     
 
Name: Mark Gottlieb
Title: Signatory    
 
                ADDRESS FOR NOTICE    

             
 
  c/o:        
 
     
 
   

             
 
  Street:        
 
     
 
   

             
 
  City/State/Zip:        
 
     
 
   

             
 
  Attention:        
 
     
 
   

             
 
  Tel:        
 
     
 
   

             
 
  Fax:        
 
     
 
   

             
 
  Email:        
 
     
 
   

 

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

                  NAME OF INVESTING ENTITY      
 
  Visium Balanced Fund, LP              
 
                AUTHORIZED SIGNATORY    
 
           
 
  By:   /s/ Mark Gottlieb    
 
     
 
Name: Mark Gottlieb
Title: Signatory    
 
                ADDRESS FOR NOTICE    

             
 
  c/o:        
 
     
 
   

             
 
  Street:        
 
     
 
   

             
 
  City/State/Zip:        
 
     
 
   

             
 
  Attention:        
 
     
 
   

             
 
  Tel:        
 
     
 
   

             
 
  Fax:        
 
     
 
   

             
 
  Email:        
 
     
 
   

 

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

                  NAME OF INVESTING ENTITY      
 
  Tang Capital Partners, LP              
 
                AUTHORIZED SIGNATORY    
 
           
 
  By:   /s/ Kevin Tang    
 
     
 
Name: Kevin Tang
Title: Managing Director    
 
                ADDRESS FOR NOTICE    

             
 
  c/o:   Tang Capital Management, LLC    

             
 
  Street:   4401 EastGate Mall    

             
 
  City/State/Zip:   San Diego, CA 92121    

             
 
  Attention:   John Lemkey    

             
 
  Tel:   858-200-3830    

             
 
  Fax:   858-200-3837    

             
 
  Email:   jlemkey@tangcapital.com    

 

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

                  NAME OF INVESTING ENTITY      
 
  Broadfin Healthcare Master Fund LTD              
 
                AUTHORIZED SIGNATORY    
 
           
 
  By:   /s/ Kevin Kotler    
 
     
 
Name: Kevin Kotler
Title: Director    
 
                ADDRESS FOR NOTICE    

             
 
  c/o:   Broadfin Capital LLC    

             
 
  Street:   237 Park Ave, Suite 900    

             
 
  City/State/Zip:   NY/NY/10017    

             
 
  Attention:   Erin Burkett    

             
 
  Tel:   212 808 2460    

             
 
  Fax:   212 808 2464    

             
 
  Email:   investor@broadfincapital.com    

 

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

                  NAME OF INVESTING ENTITY      
 
  Jennison Health Sciences Fund, a series of Jennison Sector Funds, Inc. (the
“Fund”)                
 
  By:   Jennison Associates LLC (“Jennison”), as sub-adviser
to the Fund    
 
                AUTHORIZED SIGNATORY    
 
           
 
  By:   /s/ David Chan    
 
  Name  
David Chan
   
 
  Title  
Managing Director of Jennison and Portfolio
Manager to the Fund
   
 
                ADDRESS FOR NOTICE    

             
 
  c/o:   Jennison Associates LLC    
 
     
 
   

             
 
  Street:   466 Lexington Avenue    
 
     
 
   

             
 
  City/State/Zip:   New York, New York 10017    
 
     
 
   

             
 
  Attention:   David Chan*    
 
     
 
   

             
 
  Tel:   212 833 0476    
 
     
 
   

             
 
  Fax:   212 986 6183    
 
     
 
   

             
 
  Email:   dchan@jennison.com    
 
     
 
   

*See attached Schedule A for additional contacts

 

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SCHEDULE A
Additional Contacts:
For Operational Matters:
Jennison Associates LLC
466 Lexington Avenue
New York, New York 10017
ATTN.:

         
Thomas O’Connell
  Spiro Kartsonis   Clyte Mensuroglu
 
       
Name
  Name   Name
 
       
212 833 0629
  212 833 0484   212 833 0709
 
       
Telephone Number
  Telephone Number   Telephone Number
 
       
212 949 9753
  212 949 9753   212 949 9753
 
       
Facsimile Number
  Facsimile Number   Facsimile Number
 
       
toconnell@jennison.com
  skartsonis@jennison.com   cmensuroglu@jennison.com
 
       
E-mail
  E-mail   E-mail

For Legal Matters:
Jennison Associates LLC
466 Lexington Avenue
New York, New York 10017
ATTN.:

     
Mirry Hwang
   
 
Name
   
 
   
212 833 0589
   
 
Telephone Number
   
 
   
212 682 9831
   
 
Facsimile Number
   
 
   
mhwang@jennison.com
   
 
E-mail
   

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

                  NAME OF INVESTING ENTITY      
 
  Pacific Select Fund, Health Sciences Portfolio (the “Fund”)              
 
           
 
  By:   Jennison Associates LLC (“Jennison”), as sub-adviser
to the Fund           AUTHORIZED SIGNATORY    
 
           
 
  By:   /s/ David Chan    
 
     
 
Name: David Chan
Title: Managing Director of Jennison and Portfolio
          Manager to the Fund    
 
                ADDRESS FOR NOTICE    

             
 
  c/o:   Jennison Associates LLC    
 
     
 
   

             
 
  Street:   466 Lexington Avenue    
 
     
 
   

             
 
  City/State/Zip:   New York, New York 10017    
 
     
 
   

             
 
  Attention:   David Chan*    
 
     
 
   

             
 
  Tel:   212 833 0476    
 
     
 
   

             
 
  Fax:   212 986 6183    
 
     
 
   

             
 
  Email:   dchan@jennison.com    
 
     
 
   

*See attached Schedule A for additional contacts

 

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

 

SCHEDULE A
Additional Contacts:
For Operational Matters:
Jennison Associates LLC
466 Lexington Avenue
New York, New York 10017
ATTN.:

         
Thomas O’Connell
  Spiro Kartsonis   Clyte Mensuroglu
 
       
Name
  Name   Name
 
       
212 833 0629
  212 833 0484   212 833 0709
 
       
Telephone Number
  Telephone Number   Telephone Number
 
       
212 949 9753
  212 949 9753   212 949 9753
 
       
Facsimile Number
  Facsimile Number   Facsimile Number
 
       
toconnell@jennison.com
  skartsonis@jennison.com   cmensuroglu@jennison.com
 
       
E-mail
  E-mail   E-mail

For Legal Matters:
Jennison Associates LLC
466 Lexington Avenue
New York, New York 10017
ATTN.:

     
Mirry Hwang
   
 
Name
   
 
   
212 833 0589
   
 
Telephone Number
   
 
   
212 682 9831
   
 
Facsimile Number
   
 
   
mhwang@jennison.com
   
 
E-mail
   

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

 

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

              NAME OF INVESTING ENTITY
 
            RA Capital Healthcare Fund II, LP      
 
            AUTHORIZED SIGNATORY
 
       
 
  By:   /s/ Peter Kolchinsky
 
       
 
      Name: Peter Kolchinsky
 
      Title:Manager

     
 
  ADDRESS FOR NOTICE

         
 
  c/o:   RA Capital Healthcare Fund II, LP
 

         
 
  Street:   800 Boylston Street, Suite 1500
 

         
 
  City/State/Zip:   Boston, MA 02199
 

         
 
  Attention:   Amanda Daniels
 

         
 
  Tel:   617.778.2509 
 
       
 
       
 
  Fax:   617.778.2510 
 
       
 
       
 
  Email:   adaniels@racap.com
 
       

 

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

 

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

              NAME OF INVESTING ENTITY
 
            RA Capital Healthcare Fund, LP      
 
            AUTHORIZED SIGNATORY
 
       
 
  By:   /s/ Peter Kolchinsky
 
       
 
      Name: Peter Kolchinsky
 
      Title:Manager

     
 
  ADDRESS FOR NOTICE

         
 
  c/o:   RA Capital Healthcare Fund, LP
 

         
 
  Street:   800 Boylston Street, Suite 1500
 

         
 
  City/State/Zip:   Boston, MA 02199
 

         
 
  Attention:   Amanda Daniels
 

         
 
  Tel:   617.778.2509 
 
       
 
       
 
  Fax:   617.778.2510 
 
       
 
       
 
  Email:   adaniels@racap.com
 
       

 

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

 

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

              NAME OF INVESTING ENTITY
 
            Baker Bros. Investments II, L.P.      
 
            AUTHORIZED SIGNATORY
 
       
 
  By:   Baker Bros. Capital, L.P., (general partner)
 
       
 
  By:   Baker Bros. Capital (GP), LLC, (general partner)
 
       
 
  By:   Felix Baker, Ph.D., Managing Member
 
       
 
  By:   /s/ Felix Baker, Ph.D.
 
       

     
 
  ADDRESS FOR NOTICE

         
 
  c/o:   Baker Bros. Investments II, L.P.
 

         
 
  Street:   667 Madison Ave.
 

         
 
  City/State/Zip:   New York, N.Y. 10065
 

         
 
  Attention:   Don Fedorisko
 

         
 
  Tel:   212.339.5634 
 
       
 
       
 
  Fax:   212.339.5634 
 
       
 
       
 
  Email:   dfedorisko@bbinvestments.com
 
       

 

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

 

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

              NAME OF INVESTING ENTITY
 
            14159, L.P.      
 
            AUTHORIZED SIGNATORY
 
       
 
  By:   14159 Capital, L.P., (general partner)
 
       
 
  By:   14159 Capital (GP), LLC, (general partner)
 
       
 
  By:   Felix Baker, Ph.D., Managing Member
 
       
 
  By:   /s/ Felix Baker, Ph.D.
 
       

     
 
  ADDRESS FOR NOTICE

         
 
  c/o:   14159, L.P.
 

         
 
  Street:   667 Madison Ave.
 

         
 
  City/State/Zip:   New York, N.Y. 10065
 

         
 
  Attention:   Don Fedorisko
 

         
 
  Tel:   212.339.5634 
 
       
 
       
 
  Fax:   212.339.5634 
 
       
 
       
 
  Email:   dfedorisko@bbinvestments.com
 
       

 

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

              NAME OF INVESTING ENTITY
 
            Baker Brothers Life Sciences, L.P.      
 
            AUTHORIZED SIGNATORY
 
       
 
  By:   Baker Brothers Life Sciences Capital, L.P., (general partner)
 
       
 
  By:   Baker Brothers Life Sciences. Capital (GP), LLC, (general partner)
 
       
 
  By:   Felix Baker, Ph.D., Managing Member
 
       
 
  By:   /s/ Felix Baker, Ph.D.
 
       

     
 
  ADDRESS FOR NOTICE

         
 
  c/o:   Baker Brothers Life Sciences, L.P.
 

         
 
  Street:   667 Madison Ave.
 

         
 
  City/State/Zip:   New York, N.Y. 10065
 

         
 
  Attention:   Don Fedorisko
 

         
 
  Tel:   212.339.5634 
 
       
 
       
 
  Fax:   212.339.5634 
 
       
 
       
 
  Email:   dfedorisko@bbinvestments.com
 
       

 

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

              NAME OF INVESTING ENTITY
 
            Baker/Tisch Investments, L.P.      
 
            AUTHORIZED SIGNATORY
 
       
 
  By:   Baker/Tisch Capital, L.P., (general partner)
 
       
 
  By:   Baker/Tisch Capital (GP), LLC, (general partner)
 
       
 
  By:   Felix Baker, Ph.D., Managing Member
 
       
 
  By:   /s/ Felix Baker, Ph.D.
 
       

     
 
  ADDRESS FOR NOTICE

         
 
  c/o:   Baker/Tisch Investments II, L.P.
 

         
 
  Street:   667 Madison Ave.
 

         
 
  City/State/Zip:   New York, N.Y. 10065
 

         
 
  Attention:   Don Fedorisko
 

         
 
  Tel:   212.339.5634 
 
       
 
       
 
  Fax:   212.339.5634 
 
       
 
       
 
  Email:   dfedorisko@bbinvestments.com
 
       

 

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

 

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

              NAME OF INVESTING ENTITY
 
       
 
  Baker/Tisch Investments, L.P.      
 
            AUTHORIZED SIGNATORY
 
       
 
  By:   Baker/Tisch Capital, L.P., (general partner)
 
       
 
  By:   Baker/Tisch Capital (GP), LLC, (general partner)
 
       
 
  By:   Felix Baker, Ph.D., Managing Member
 
       
 
  By:   /s/ Felix Baker, Ph.D.
 
       

     
 
  ADDRESS FOR NOTICE

         
 
  c/o:   Baker/Tisch Investments II, L.P.
 

         
 
  Street:   667 Madison Ave.
 

         
 
  City/State/Zip:   New York, N.Y. 10065
 

         
 
  Attention:   Don Fedorisko
 

         
 
  Tel:   212.339.5634 
 
       
 
       
 
  Fax:   212.339.5634 
 
       
 
       
 
  Email:   dfedorisko@bbinvestments.com
 
       

 

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

              NAME OF INVESTING ENTITY
 
            667, L.P.      
 
            AUTHORIZED SIGNATORY
 
       
 
  By:   Baker Biotech Capital, L.P., (general partner)
 
       
 
  By:   Baker Biotech Capital (GP), LLC, (general partner)
 
       
 
  By:   Felix Baker, Ph.D., Managing Member
 
       
 
  By:   /s/ Felix Baker, Ph.D.
 
       

     
 
  ADDRESS FOR NOTICE

         
 
  c/o:   667, L.P.
 

         
 
  Street:   667 Madison Ave.
 

         
 
  City/State/Zip:   New York, N.Y. 10065
 

         
 
  Attention:   Don Fedorisko
 

         
 
  Tel:   212.339.5634 
 
       
 
       
 
  Fax:   212.339.5634 
 
       
 
       
 
  Email:   dfedorisko@bbinvestments.com
 
       

 

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

 

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

              NAME OF INVESTING ENTITY
 
            667, L.P.      
 
            AUTHORIZED SIGNATORY
 
       
 
  By:   Baker Biotech Capital, L.P., (general partner)
 
       
 
  By:   Baker Biotech Capital (GP), LLC, (general partner)
 
       
 
  By:   Felix Baker, Ph.D., Managing Member
 
       
 
  By:   /s/ Felix Baker, Ph.D.
 
       

     
 
  ADDRESS FOR NOTICE

         
 
  c/o:   667, L.P.
 

         
 
  Street:   667 Madison Ave.
 

         
 
  City/State/Zip:   New York, N.Y. 10065
 

         
 
  Attention:   Don Fedorisko
 

         
 
  Tel:   212.339.5634 
 
       
 
       
 
  Fax:   212.339.5634 
 
       
 
       
 
  Email:   dfedorisko@bbinvestments.com
 
       

 

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Annex A
PLAN OF DISTRIBUTION
     We are registering the shares of Common Stock issued to the selling
stockholders to permit the resale of these shares of Common Stock by the holders
of the shares of Common Stock from time to time after the date of this
prospectus. We will not receive any of the proceeds from the sale by the selling
stockholders of the shares of Common Stock. We will bear all fees and expenses
incident to our obligation to register the shares of Common Stock.
     The selling stockholders may sell all or a portion of the shares of Common
Stock beneficially owned by them and offered hereby from time to time directly
or through one or more underwriters, broker-dealers or agents. If the shares of
Common Stock are sold through underwriters or broker-dealers, the selling
stockholders will be responsible for underwriting discounts or commissions or
agent’s commissions. The shares of Common Stock may be sold on any national
securities exchange or quotation service on which the securities may be listed
or quoted at the time of sale, in the over-the-counter market or in transactions
otherwise than on these exchanges or systems or in the over-the-counter market
and in one or more transactions at fixed prices, at prevailing market prices at
the time of the sale, at varying prices determined at the time of sale, or at
negotiated prices. These sales may be effected in transactions, which may
involve crosses or block transactions. The selling stockholders may use any one
or more of the following methods when selling shares:

  •   ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;     •   block trades in which the
broker-dealer will attempt to sell the shares as agent but may position and
resell a portion of the block as principal to facilitate the transaction;     •
  purchases by a broker-dealer as principal and resale by the broker-dealer for
its account;     •   an exchange distribution in accordance with the rules of
the applicable exchange;     •   privately negotiated transactions;     •  
settlement of short sales entered into after the effective date of the
registration statement of which this prospectus is a part;     •  
broker-dealers may agree with the selling stockholders to sell a specified
number of such shares at a stipulated price per share;     •   through the
writing or settlement of options or other hedging transactions, whether such
options are listed on an options exchange or otherwise;     •   a combination of
any such methods of sale; and     •   any other method permitted pursuant to
applicable law.

     The selling stockholders also may resell all or a portion of the shares in
open market transactions in reliance upon Rule 144 under the Securities Act, as
permitted by that rule, or Section 4(1) under the Securities Act, if available,
rather than under this prospectus, provided that they meet the criteria and
conform to the requirements of those provisions.

 

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

 

     Broker-dealers engaged by the selling stockholders may arrange for other
broker-dealers to participate in sales. If the selling stockholders effect such
transactions by selling shares of Common Stock to or through underwriters,
broker-dealers or agents, such underwriters, broker-dealers or agents may
receive commissions in the form of discounts, concessions or commissions from
the selling stockholders or commissions from purchasers of the shares of Common
Stock for whom they may act as agent or to whom they may sell as principal. Such
commissions will be in amounts to be negotiated, but, except as set forth in a
supplement to this Prospectus, in the case of an agency transaction will not be
in excess of a customary brokerage commission in compliance with NASD Rule 2440;
and in the case of a principal transaction a markup or markdown in compliance
with NASD IM-2440.
     In connection with sales of the shares of Common Stock or otherwise, the
selling stockholders may enter into hedging transactions with broker-dealers or
other financial institutions, which may in turn engage in short sales of the
shares of Common Stock in the course of hedging in positions they assume. The
selling stockholders may also sell shares of Common Stock short and if such
short sale shall take place after the date that this Registration Statement is
declared effective by the Commission, the selling stockholders may deliver
shares of Common Stock covered by this prospectus to close out short positions
and to return borrowed shares in connection with such short sales. The selling
stockholders may also loan or pledge shares of Common Stock to broker-dealers
that in turn may sell such shares, to the extent permitted by applicable law.
The selling stockholders may also enter into option or other transactions with
broker-dealers or other financial institutions or the creation of one or more
derivative securities which require the delivery to such broker-dealer or other
financial institution of shares offered by this prospectus, which shares such
broker-dealer or other financial institution may resell pursuant to this
prospectus (as supplemented or amended to reflect such transaction).
Notwithstanding the foregoing, the selling stockholders have been advised that
they may not use shares registered on this registration statement to cover short
sales of our common stock made prior to the date the registration statement, of
which this prospectus forms a part, has been declared effective by the SEC.
     The selling stockholders may, from time to time, pledge or grant a security
interest in some or all of the shares of Common Stock owned by them and, if they
default in the performance of their secured obligations, the pledgees or secured
parties may offer and sell the shares of Common Stock from time to time pursuant
to this prospectus or any amendment to this prospectus under Rule 424(b)(3) or
other applicable provision of the Securities Act of 1933, as amended, amending,
if necessary, the list of selling stockholders to include the pledgee,
transferee or other successors in interest as selling stockholders under this
prospectus. The selling stockholders also may transfer and donate the shares of
Common Stock in other circumstances in which case the transferees, donees,
pledgees or other successors in interest will be the selling beneficial owners
for purposes of this prospectus.
     The selling stockholders and any broker-dealer or agents participating in
the distribution of the shares of Common Stock may be deemed to be
“underwriters” within the meaning of Section 2(11) of the Securities Act in
connection with such sales. In such event, any commissions paid, or any
discounts or concessions allowed to, any such broker-dealer or agent and any
profit on the resale of the shares purchased by them may be deemed to be
underwriting commissions or discounts under the Securities Act. Selling
Stockholders who are “underwriters” within the meaning of Section 2(11) of the
Securities Act will be subject to the applicable prospectus delivery
requirements of the Securities Act including Rule 172 thereunder and may be
subject to certain statutory liabilities of, including but not limited to,
Sections 11, 12 and 17 of the Securities Act and Rule 10b-5 under the Securities
Exchange Act of 1934, as amended, or the Exchange Act.
     Each selling stockholder has informed the Company that it is not a
registered broker-dealer and does not have any written or oral agreement or
understanding, directly or indirectly, with any person to distribute the Common
Stock. Upon the Company being notified in writing by a selling stockholder that
any material

 

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

 

arrangement has been entered into with a broker-dealer for the sale of common
stock through a block trade, special offering, exchange distribution or
secondary distribution or a purchase by a broker or dealer, a supplement to this
prospectus will be filed, if required, pursuant to Rule 424(b) under the
Securities Act, disclosing (i) the name of each such selling stockholder and of
the participating broker-dealer(s), (ii) the number of shares involved,
(iii) the price at which such the shares of Common Stock were sold, (iv) the
commissions paid or discounts or concessions allowed to such broker-dealer(s),
where applicable, (v) that such broker-dealer(s) did not conduct any
investigation to verify the information set out or incorporated by reference in
this prospectus, and (vi) other facts material to the transaction. In no event
shall any broker-dealer receive fees, commissions and markups, which, in the
aggregate, would exceed eight percent (8%).
     Under the securities laws of some states, the shares of Common Stock may be
sold in such states only through registered or licensed brokers or dealers. In
addition, in some states the shares of Common Stock may not be sold unless such
shares have been registered or qualified for sale in such state or an exemption
from registration or qualification is available and is complied with.
     There can be no assurance that any selling stockholder will sell any or all
of the shares of Common Stock registered pursuant to the shelf registration
statement, of which this prospectus forms a part.
     Each selling stockholder and any other person participating in such
distribution will be subject to applicable provisions of the Securities Exchange
Act of 1934, as amended, and the rules and regulations thereunder, including,
without limitation, Regulation M of the Exchange Act, which may limit the timing
of purchases and sales of any of the shares of Common Stock by the selling
stockholder and any other participating person. Regulation M may also restrict
the ability of any person engaged in the distribution of the shares of Common
Stock to engage in market-making activities with respect to the shares of Common
Stock. All of the foregoing may affect the marketability of the shares of Common
Stock and the ability of any person or entity to engage in market-making
activities with respect to the shares of Common Stock.
     We will pay all expenses of the registration of the shares of Common Stock
pursuant to the registration rights agreement, including, without limitation,
Securities and Exchange Commission filing fees and expenses of compliance with
state securities or “blue sky” laws; provided, however, that each selling
stockholder will pay all underwriting discounts and selling commissions, if any
and any related legal expenses incurred by it. We will indemnify the selling
stockholders against certain liabilities, including some liabilities under the
Securities Act, in accordance with the registration rights agreements, or the
selling stockholders will be entitled to contribution. We may be indemnified by
the selling stockholders against civil liabilities, including liabilities under
the Securities Act, that may arise from any written information furnished to us
by the selling stockholders specifically for use in this prospectus, in
accordance with the related registration rights agreements, or we may be
entitled to contribution.

 

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Annex B
Ardea Biosciences, Inc.
SELLING STOCKHOLDER NOTICE AND QUESTIONNAIRE
     The undersigned holder of shares of the common stock, par value $0.001 per
share of Ardea Biosciences, Inc. (the “Company”) issued pursuant to a certain
Securities Purchase Agreement by and among the Company and the Purchasers named
therein, dated as of December 17, 2008 (the “Agreement”), understands that the
Company intends to file with the Securities and Exchange Commission a
registration statement on Form S-3 (except if the Company is ineligible to
register for resale the Registrable Securities on Form S-3, in which case such
registration shall be on another appropriate form, the “Resale Registration
Statement”) for the registration and the resale under Rule 415 of the Securities
Act of 1933, as amended (the “Securities Act”), of the Registrable Securities in
accordance with the terms of the Agreement. All capitalized terms not otherwise
defined herein shall have the meanings ascribed thereto in the Agreement.
     In order to sell or otherwise dispose of any Registrable Securities
pursuant to the Resale Registration Statement, a holder of Registrable
Securities generally will be required to be named as a selling stockholder in
the related prospectus or a supplement thereto (as so supplemented, the
“Prospectus”), deliver the Prospectus to purchasers of Registrable Securities
(which delivery may be deemed to have been made as set forth in Rule 172 under
the Securities Act) and be bound by the provisions of the Agreement (including
certain indemnification provisions, as described below). Holders must complete
and deliver this Notice and Questionnaire in order to be named as selling
stockholders in the Prospectus. Holders of Registrable Securities who do not
complete, execute and return this Notice and Questionnaire within five
(5) Trading Days following the date of the Agreement (1) will not be named as
selling stockholders in the Resale Registration Statement or the Prospectus and
(2) may not use the Prospectus for resales of Registrable Securities.
     Certain legal consequences arise from being named as a selling stockholder
in the Resale Registration Statement and the Prospectus. Holders of Registrable
Securities are advised to consult their own securities law counsel regarding the
consequences of being named or not named as a selling stockholder in the Resale
Registration Statement and the Prospectus.
NOTICE
     The undersigned holder (the “Selling Stockholder”) of Registrable
Securities hereby gives notice to the Company of its intention to sell or
otherwise dispose of Registrable Securities owned by it and listed below in Item
(3), unless otherwise specified in Item (3), pursuant to the Resale Registration
Statement. The undersigned, by signing and returning this Notice and
Questionnaire, understands and agrees that it will be bound by the terms and
conditions of this Notice and Questionnaire and the Agreement.
     The undersigned hereby provides the following information to the Company
and represents and warrants that such information is accurate and complete:
QUESTIONNAIRE

1.   Name.

  (a)   Full Legal Name of Selling Stockholder:        
 

 

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  (b)   Full Legal Name of Registered Holder (if not the same as (a) above)
through which Registrable Securities Listed in Item 3 below are held:        
 
    (c)   Full Legal Name of Natural Control Person (which means a natural
person who directly or indirectly alone or with others has power to vote or
dispose of the securities covered by the questionnaire):          
 

2. Address for Notices to Selling Stockholder:

       
 
     
 
     
Telephone:
   
 
   
Fax:
   
 
   
Contact Person:
   
 
   

     
E-mail address of Contact Person:
   
 
   

3. Beneficial Ownership of Registrable Securities Issuable Pursuant to the
Agreement:

  (a)   Type and Number of Registrable Securities beneficially owned and issued
pursuant to the Agreement:        
 
       
 
       
 
    (b)   Number of shares of Common Stock to be registered pursuant to this
Notice for resale:        
 
       
 
       
 

4. Broker-Dealer Status:

  (a)   Are you a broker-dealer?

Yes o      No o

  (b)   If “yes” to Section 4(a), did you receive your Registrable Securities as
compensation for investment banking services to the Company?

Yes o      No o

 

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Note:
  If no, the Commission’s staff has indicated that you should be identified as
an underwriter in the Registration Statement.

  (c)   Are you an affiliate of a broker-dealer?

Yes o      No o

  Note: If yes, provide a narrative explanation below:        
 
       
 
    (c)   If you are an affiliate of a broker-dealer, do you certify that you
bought the Registrable Securities in the ordinary course of business, and at the
time of the purchase of the Registrable Securities to be resold, you had no
agreements or understandings, directly or indirectly, with any person to
distribute the Registrable Securities?

Yes o      No o

  Note: If no, the Commission’s staff has indicated that you should be
identified as an underwriter in the Registration Statement.

5. Beneficial Ownership of Other Securities of the Company Owned by the Selling
Stockholder.

      Except as set forth below in this Item 5, the undersigned is not the
beneficial or registered owner of any securities of the Company other than the
Registrable Securities listed above in Item 3.         Type and amount of other
securities beneficially owned:        
 
       
 

6. Relationships with the Company:

      Except as set forth below, neither the undersigned nor any of its
affiliates, officers, directors or principal equity holders (owners of 5% of
more of the equity securities of the undersigned) has held any position or
office or has had any other material relationship with the Company (or its
predecessors or affiliates) during the past three years.         State any
exceptions here:        
 
       
 

 

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7. Plan of Distribution:

      The undersigned has reviewed the form of Plan of Distribution attached as
Annex A to the Registration Rights Agreement, and hereby confirms that, except
as set forth below, the information contained therein regarding the undersigned
and its plan of distribution is correct and complete.         State any
exceptions here:        
 
       
 

***********
The undersigned agrees to promptly notify the Company of any inaccuracies or
changes in the information provided herein that may occur subsequent to the date
hereof and prior to the effective date of any applicable Resale Registration
Statement. All notices hereunder and pursuant to the Agreement shall be made in
writing, by hand delivery, confirmed or facsimile transmission, first-class mail
or air courier guaranteeing overnight delivery at the address set forth below.
In the absence of any such notification, the Company shall be entitled to
continue to rely on the accuracy of the information in this Notice and
Questionnaire.
By signing below, the undersigned consents to the disclosure of the information
contained herein in its answers to Items (1) through (7) above and the inclusion
of such information in the Resale Registration Statement and the Prospectus. The
undersigned understands that such information will be relied upon by the Company
in connection with the preparation or amendment of any such Registration
Statement and the Prospectus.
By signing below, the undersigned acknowledges that it understands its
obligation to comply, and agrees that it will comply, with the provisions of the
Exchange Act and the rules and regulations thereunder, particularly Regulation M
in connection with any offering of Registrable Securities pursuant to the Resale
Registration Statement. The undersigned also acknowledges that it understands
that the answers to this Questionnaire are furnished for use in connection with
Registration Statements filed pursuant to the Registration Rights Agreement and
any amendments or supplements thereto filed with the Commission pursuant to the
Securities Act.
The undersigned hereby acknowledges and is advised of the following
Interpretation A.65 of the July 1997 SEC Manual of Publicly Available Telephone
Interpretations regarding short selling:
“An Issuer filed a Form S-3 registration statement for a secondary offering of
common stock which is not yet effective. One of the selling stockholders wanted
to do a short sale of common stock “against the box” and cover the short sale
with registered shares after the effective date. The issuer was advised that the
short sale could not be made before the registration statement become effective,
because the shares underlying the short sale are deemed to be sold at the time
such sale is made. There would, therefore, be a violation of Section 5 if the
shares were effectively sold prior to the effective date.”
By returning this Questionnaire, the undersigned will be deemed to be aware of
the foregoing interpretation.
I confirm that, to the best of my knowledge and belief, the foregoing statements
(including without limitation the answers to this Questionnaire) are correct.

 

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IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this
Questionnaire to be executed and delivered either in person or by its duly
authorized agent.

                      Dated:       Beneficial Owner:       
 
 
 
         
 
   
 
      By:                            
 
        Name:        
 
        Title:        

PLEASE FAX A COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND
RETURN THE ORIGINAL BY OVERNIGHT MAIL, TO:
Ethan E. Christensen
Cooley Godward Kronish LLP
4401 Eastgate Mall
San Diego, California 92121
Tel: (858) 550-6076
Fax: (858) 550-6420
Email: echristensen@cooley.com