Exhibit 4.2


 


FINAL


 


EXPRESSION DIAGNOSTICS, INC.


 


 


FIFTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT


 

















 


TABLE OF CONTENTS


 


	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
  Information and Other Rights

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.1

  	
  Annual Financial Statements

  	
   

  	
  1

  
	
   

  	
  1.2

  	
  Quarterly Financial Statements

  	
   

  	
  2

  
	
   

  	
  1.3

  	
  Annual Budget and Business Plan

  	
   

  	
  2

  
	
   

  	
  1.4

  	
  Additional Information

  	
   

  	
  2

  
	
   

  	
  1.5

  	
  Proprietary Information Agreements

  	
   

  	
  2

  
	
   

  	
  1.6

  	
  Market Stand-Off

  	
   

  	
  2

  
	
   

  	
  1.7

  	
  Independent
  Accountants

  	
   

  	
  3

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.9

  	
  Transfer
  of Information Rights

  	
   

  	
  3

  
	
   

  	
  1.10

  	
  Termination of Covenants

  	
   

  	
  3

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
  Registration Rights

  	
   

  	
  3

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.1

  	
  Certain Definitions

  	
   

  	
  3

  
	
   

  	
  2.2

  	
  Demand Registration

  	
   

  	
  4

  
	
   

  	
  2.3

  	
  Piggyback Registration

  	
   

  	
  6

  
	
   

  	
  2.4

  	
  Registration on Form S-3

  	
   

  	
  7

  
	
   

  	
  2.5

  	
  Expenses of Registration

  	
   

  	
  8

  
	
   

  	
  2.6

  	
  Registration Procedures

  	
   

  	
  8

  
	
   

  	
  2.7

  	
  Delay of Registration

  	
   

  	
  10

  
	
   

  	
  2.8

  	
  Indemnification

  	
   

  	
  10

  
	
   

  	
  2.9

  	
  Information by Holder

  	
   

  	
  12

  
	
   

  	
  2.10

  	
  Rule 144 Reporting

  	
   

  	
  12

  
	
   

  	
  2.11

  	
  Transfer of Registration Rights

  	
   

  	
  13

  
	
   

  	
  2.12

  	
  Standoff Agreement

  	
   

  	
  13

  
	
   

  	
  2.13

  	
  Limitation on Subsequent
  Registration Rights

  	
   

  	
  14

  
	
   

  	
  2.14

  	
  Termination of Registration Rights

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
  Preemptive Rights

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.1

  	
  General

  	
   

  	
  14

  
	
   

  	
  3.2

  	
  Right of First Refusal

  	
   

  	
  14

  
	
   

  	
  3.3

  	
  Offer After Sale to Third Parties

  	
   

  	
  15

  
	
   

  	
  3.4

  	
  Expiration of Right of First
  Refusal

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
  Miscellaneous

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.1

  	
  Waivers and Amendments

  	
   

  	
  16

  
	
   

  	
  4.2

  	
  Notices

  	
   

  	
  16

  
	
   

  	
  4.3

  	
  Descriptive Headings

  	
   

  	
  16

  
	
   

  	
  4.4

  	
  Governing Law

  	
   

  	
  16

  
	
   

  	
  4.5

  	
  Counterparts

  	
   

  	
  16

  
	
   

  	
  4.6

  	
  Expenses

  	
   

  	
  17

  
	
   

  	
  4.7

  	
  Successors and Assigns

  	
   

  	
  17

  
						



 


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  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.8

  	
  Entire Agreement

  	
   

  	
  17

  
	
   

  	
  4.9

  	
  Separability; Severability

  	
   

  	
  17

  
	
   

  	
  4.10

  	
  Stock Splits

  	
   

  	
  17

  
	
   

  	
  4.11

  	
  Aggregation of Stock

  	
   

  	
  17

  



 


ii

















 


EXPRESSION DIAGNOSTICS, INC.


 


FIFTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT


 


THIS FIFTH AMENDED AND
RESTATED INVESTORS’ RIGHTS AGREEMENT (this “Agreement”) is made as of May 7, 2007,
by and among Expression Diagnostics, Inc., a Delaware corporation (the “Company”)
and the undersigned holders of the Company’s Series A Preferred Stock (the “Series
A Preferred”), Series B Preferred Stock (the “Series B Preferred “), Series C
Preferred Stock (the “Series C Preferred”), Series D Preferred Stock (the “Series
D Preferred”), Series E Preferred Stock (the “Series E Preferred”)  and Series F Preferred Stock (the “Series F
Preferred”) listed on Exhibit A hereto (each an “Investor”, and
collectively, the “Investors”).


 


Recitals


 


WHEREAS, the Company, and
holders of Series A Preferred, Series B Preferred, Series C Preferred, Series D
Preferred and Series E Preferred have entered into that certain Fourth Amended
and Restated Investors’ Rights Agreement, dated as of December 9, 2005 (the “Existing
Agreement”);


 


WHEREAS, the Company and
certain Investors are entering into that certain Series F Preferred Stock
Purchase Agreement (the “Series F Agreement”) of even date herewith;


 


WHEREAS, certain
Investors desire to obtain certain rights (“Registration Rights”) regarding
registration of the Company’s securities under the Securities Act of 1933, as
amended (the “Securities Act”), certain preemptive rights regarding the Company’s
equity offerings (“Preemptive Rights”), and certain rights to information (“Information
Rights”); and


 


WHEREAS, as a condition
of the initial closing of the financing provided for in the Series F Agreement,
and as a material inducement to the additional financing of the Company
provided for therein, the Company and the Investors desire to amend and restate
in full the Existing Agreement, in the form set forth herein.


 


NOW, THEREFORE, the
parties agree as follows:


 


1.                                       Information and Other Rights.


 


1.1                                 Annual
Financial Statements.  So long as an Investor (and its
affiliates) holds at least 700,000 shares (as adjusted for stock splits,
reverse stock splits, stock dividends, recapitalizations and similar events) of
the Company’s Preferred Stock (including any shares of Common Stock issued or
issuable upon conversion of Preferred Stock) (such an Investor, a “Major
Investor”), the Company will provide to such Major Investor as soon as
practicable after the end of each fiscal year, and in any event within 90 days
thereafter, a consolidated balance sheet of the Company and its subsidiaries,
if any, as of the end of such fiscal year, and consolidated statements of
income, stockholders’ equity and cash flows of the Company and its
subsidiaries, if any, for such year, prepared in accordance with generally
accepted accounting principles (“GAAP”) and setting forth in each case in
comparative form the figures for the


 

















 


previous fiscal year, all
in reasonable detail and all audited by a nationally recognized public
accounting firm.


 


1.2                                 Quarterly
Financial Statements.  The Company shall provide each Major
Investor as soon as practicable after the end of each quarter, and in any event
within 30 days thereafter, a consolidated balance sheet of the Company and its
subsidiaries, if any, as of the end of each such quarter, consolidated
statements of income, and a consolidated statement of cash flow of the Company
and its subsidiaries for such period and for the current fiscal year to date,
and setting forth in each case in comparative form the figures for
corresponding periods in the previous fiscal year, and setting forth in
comparative form the budgeted figures for such period and for the current
fiscal year then reported, prepared in accordance with GAAP consistently
applied with prior practice for earlier periods (with the exception of
footnotes that may be required by GAAP and provided that the foregoing shall
not restrict the right of the Company to change its accounting principles
consistent with GAAP, if the Board of Directors of the Company (the “Board of
Directors”) determines that it is in the best interest of the Company to do
so), subject to changes resulting from year-end audit adjustments, all in
reasonable detail and signed by the principal financial or accounting officer
of the Company.


 


1.3                                 Annual
Budget and Business Plan.  The Company shall provide each Major
Investor as soon as practicable, but in any event at least thirty (30) days
prior to the end of each fiscal year, a budget and business plan for the next
fiscal year, prepared on a monthly basis, including balance sheets, projected
profit or loss for the year and sources and applications of funds statements
for such months, and as soon as prepared, any other budgets or revised budgets
prepared by the Company.


 


1.4                                 Additional
Information.  The Company will allow each Major Investor to visit
and inspect any of the properties of the Company (upon reasonable advance
notice) and will deliver or provide to such Major Investor with reasonable
promptness, (i) copies of all notices, minutes, consents and the like provided
to the Board of Directors, and (ii) such other information and data, including
access to books, records, officers and accountants, with respect to the Company
and its subsidiaries as any such Major Investor may from time to time
reasonably request; provided, however, that the Company shall not be obligated
to provide any information that it considers in good faith to be a trade secret
or to contain confidential or classified information.


 


1.5                                 Proprietary
Information Agreements.  The Company agrees to require each
employee of the Company to execute a standard Proprietary Information Agreement
and each consultant and advisor of the Company to execute an agreement that
provides for confidential treatment of the Company’s proprietary information
and the assignment of inventions developed during such individual’s
relationship with the Company, as a condition of employment or consulting
relationship or continued employment or consulting relationship, as the case
may be, unless otherwise approved by the Board of Directors.


 


1.6                                 Market
Stand-Off.  The Company hereby covenants and agrees that, except
as otherwise approved by the Company’s Board of Directors, it shall be a
condition of any issuance by the Company to any person or entity of shares of
capital stock of the Company or any options, warrants or other rights to
subscribe to or acquire any capital stock of the


 


2

















 


Company, that such person
or entity execute and deliver to the Company a market stand-off agreement in
writing with, at a minimum, substantially similar terms as those set forth in
Section 2.12 (but permitting an extension of the lock-up period for up to 18
days) and covering all shares of capital stock owned by such person or entity
or issuable upon exercise of any options, warrants or other rights to subscribe
for or acquire the Company’s capital stock.


 


1.7                                 Independent Accountants. The
Company will retain independent pubic accountants of recognized national
standing who shall certify the Company’s financial statements at the end of
each fiscal year. In the event the services of the independent public
accountants so selected, or any firm of independent public accountants
hereafter employed by the Company, are terminated, the Company will promptly
notify the Investors and will request the firm of independent public
accountants whose services are terminated to deliver to the Investors a letter
from such firm setting forth the reasons for the termination of their services.
In its notice to the Investors, the Company shall state whether the change of
accountants was recommended or approved by the Board or any committee thereof.
In the event of such termination, the Company will promptly thereafter engage
another firm of independent public accountants of recognized national standing.


 


1.8                                 Transfer of Information Rights. The rights granted Holders under
Article I may be assigned to a transferee or assignee in connection with (i)
any transfer or assignment of Preferred Stock by a Holder of not less than
50,000 shares (or any lesser amount if all of such Holder’s Preferred Stock are
transferred or assigned to a transferee) of Preferred Stock, (ii) any transfer
or assignment of Preferred Stock by a Holder to any subsidiary, parent, member,
affiliate, general partner, limited partner, retired partner, retired member or
shareholder of such Holder or the estate of such constituent partner or
affiliate, or (iii) to any transferee or assignee who is a family member of the
Holder or a trust for the benefit of the Holder or any family member of the
Holder, provided that, with respect to each such transfer or assignment, the
Company be given prior written notice of the transfer and that such transfer
otherwise be effected in accordance with applicable securities laws.


 


1.9                                 Termination
of Covenants.  The rights set forth in this Section 1 shall
terminate and be of no further force or effect upon the closing of a public
offering of the Company’s securities pursuant to an effective registration
statement filed under the Securities Act that results in the automatic
conversion of all of the Company’s Preferred Stock.


 


2.                                       Registration Rights.


 


2.1                                 Certain
Definitions.  As used in this Agreement, the following terms
shall have the following respective meanings:


 


(a)                                  “Commission”
shall mean the Securities and Exchange Commission or any other federal agency
at the time administering the Securities Act.


 


(b)                                 “Holder”
shall mean the Investors holding Registrable Securities or securities
convertible or exercisable into Registrable Securities and any person holding
such securities to whom the rights under this Section 2 have been
transferred in accordance with Section 2.11 hereof.


 


3

















 


(c)                                  “Initiating
Holders” shall mean any Holder or Holders who in the aggregate hold at
least 40% of the Registrable Securities.


 


(d)                                 “Participating
Holders” shall mean any Holder or Holders who propose to distribute their
securities through a registration pursuant to this Section 2.


 


(e)                                  “Registrable
Securities” means (i) any shares of Common Stock issued or issuable upon
conversion of Preferred Stock issued by the Company (or Preferred Stock issued
or issuable upon exercise of warrants issued by the Company) and (ii) any
shares of Common Stock of the Company issued or issuable in respect of the
Preferred Stock or other securities issuable pursuant to the conversion of the
Preferred Stock or upon any stock split, stock dividend, recapitalization, or
similar event provided however that shares of Common Stock or other securities
shall only be treated as Registrable Securities for purposes of
Section 2.3 hereof if and so long as they have not been (A) sold to or through
a broker or dealer or underwriter in a public distribution or a public
securities transaction, or (B) transferred in a transaction pursuant to which
the registration rights are not also assigned in accordance with Section 2.11
hereof.


 


(f)                                    The
terms “register,” “registered” and “registration” refer to
a registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of the
effectiveness of such registration statement.


 


(g)                                 “Registration
Expenses” shall mean all expenses incurred by the Company in complying with
Sections 2.2, 2.3 and 2.4 hereof, including the reasonable fees (not to exceed
$50,000) of one special counsel to the selling stockholders (but excluding
Selling Expenses).


 


(h)                                 “Restricted
Securities” shall mean the securities of the Company required to bear a
legend indicating that transfer is restricted in the absence of registration.


 


(i)                                     “Securities
Act” shall mean the Securities Act of 1933, as amended, or any similar federal
statute and the rules and regulations of the Commission thereunder, all as the
same shall be in effect at the time.


 


(j)                                     “Selling
Expenses” shall mean all underwriting discounts, selling commissions and
stock transfer taxes, if any, applicable to the securities registered by the
Holders.


 


2.2                                 Demand
Registration.


 


(a)                                  Request
for Registration. In case the Company shall receive from Initiating Holders
a written request that the Company effect any registration, qualification or
compliance with respect to shares of Registrable Securities with an expected
aggregate offering price to the public of at least $25,000,000, the Company
will  (1) within ten days of the receipt
by the Company of such notice, give written notice of the proposed
registration, qualification or compliance to all other Holders and (2) use its
commercially reasonable best efforts to effect as soon as practicable (but in
any event within 120 days after receipt of the request of the Initiating
Holders) such registration, qualification or compliance (including, without
limitation, appropriate


 


4

















 


qualification under
applicable blue sky or other state securities laws and appropriate compliance
with applicable regulations issued under the Securities Act and any other
governmental requirements or regulations) as may be so requested and as would
permit or facilitate the sale and distribution of all or such portion of such
Registrable Securities as are specified in such request, together with all or
such portion of the Registrable Securities of any Holder or Holders joining in
such request as are specified in a written request received by the Company
within 20 days after receipt of such written notice from the Company; provided,
however, that the Company shall not be obligated to take any action to effect
any such registration, qualification or compliance pursuant to this
Section 2.2(a):


 


(i)                                     In
any particular jurisdiction in which the Company would be required to execute a
general consent to service of process in effecting such registration,
qualification or compliance unless the Company is already subject to service in
such jurisdiction and except as may be required by the Securities Act;


 


(ii)                                  Prior
to the earlier of three (3) years following the date of this Agreement or six
months after the effective date of the Company’s first registered public
offering of its securities;


 


(iii)                               During
the period starting with the date 60 days prior to the Company’s good faith
estimate of the date of filing of, and ending on the date six months
immediately following the effective date of, any registration statement
pertaining to securities of the Company (other than a registration of
securities in a Rule 145 transaction, with respect to an employee benefit plan or
with respect to the Company’s first registered public offering of its stock),
provided that the Company is actively employing in good faith all reasonable
efforts to cause such registration statement to become effective;


 


(iv)                              After
the Company has effected two registrations pursuant to this
Section 2.2(a), which registrations have been declared or ordered
effective and the securities offered pursuant to such registrations have been
sold; or


 


(v)                                 If
the Company shall furnish to such Holders a certificate signed by the President
of the Company stating that in the good faith judgment of the Board of
Directors it would be seriously detrimental to the Company or its stockholders
for a registration statement to be filed in the near future, then the Company’s
obligation to use its best efforts to register, qualify or comply under this
Section 2.2 shall be deferred for a period not to exceed 90 days from the
date of receipt of written request from the Initiating Holders; provided,
however, that the Company shall not exercise such right more than once in any
twelve-month period.


 


(b)                                 Underwriting.
In the event that a registration pursuant to this Section 2.2 is for a
registered public offering involving an underwriting, the Company shall so
advise the Holders as part of the notice given pursuant to Section 2.2(a).
In such event, the right of any Holder to registration pursuant to this
Section 2.2 shall be conditioned upon such Holder’s participation in the
underwriting arrangements required by this Section 2.2, and the inclusion
of such Holder’s Registrable Securities in the underwriting to the extent
requested shall be limited to the extent provided herein.


 


5

















 


The Company shall,
together with all Participating Holders, enter into an underwriting agreement
in customary form with the managing underwriter selected for such underwriting
by the Company and reasonably acceptable to Initiating Holders holding a
majority of Registrable Securities held by all Initiating Holders. Notwithstanding
any other provision of this Section 2.2, if the managing underwriter
advises the Company in writing that marketing factors require a limitation of
the number of shares to be underwritten, then the Company shall so advise all
Holders of Registrable Securities and the number of shares of Registrable
Securities that may be included in the registration and underwriting shall be
allocated among all Holders thereof in proportion, as nearly as practicable, to
the respective amounts of Registrable Securities held by such Holders at the
time of filing the registration statement or in such other manner as shall be
agreed to by the Company and Holders of a majority of the Registrable
Securities proposed to be included in such registration; provided, however,
that the number of shares of Registrable Securities to be included in such
underwriting shall not be reduced unless all other securities, including
securities for the Company’s account (i.e., primary shares), are first entirely
excluded from the underwriting. No Registrable Securities excluded from the
underwriting by reason of the underwriter’s marketing limitation shall be
included in such registration. To facilitate the allocation of shares in
accordance with the above provisions, the Company or the underwriters may round
the number of shares allocated to any Holder to the nearest 100 shares.


 


If any Holder of
Registrable Securities disapproves of the terms of the underwriting, such
Holder may elect to withdraw therefrom by written notice to the Company, the
managing underwriter and the Initiating Holders. The Registrable Securities
and/or other securities so withdrawn shall also be withdrawn from registration,
and such Registrable Securities shall not be transferred in a public
distribution prior to 90 days after the effective date of such registration, or
such other shorter period of time as the underwriters may require. If shares
are withdrawn from registration, the Company shall offer to all persons
retaining the right to include securities in the registration the right to
include additional securities in the registration, with such shares being
allocated among all such Participating Holders in proportion, as nearly as
practicable, to the respective amounts of Registrable Securities held by such Participating
Holders at the time of filing the registration statement.


 


2.3                                 Piggyback
Registration.


 


(a)                                  Notice
of Registration. If at any time or from time to time the Company shall
determine to register any of its securities, either for its own account or the
account of a security holder or holders, other than a registration relating
solely to employee benefit plans, a registration relating solely to a
Commission Rule 145 transaction, or a registration pursuant to Section 2.2
hereof, the Company will (i) promptly give to each Holder written notice
thereof, and (ii) include in such registration (and any related qualification
under blue sky laws or other compliance), and in any underwriting involved
therein, all the Registrable Securities specified in a written request or
requests, made within 15 days after receipt of such written notice from the
Company, by any Holder. Such written requests may include all or a portion of
the Holder’s Registrable Securities.


 


(b)                                 Underwriting.
If the registration of which the Company gives notice is for a registered
public offering involving an underwriting, the Company shall so advise the
Holders as a part of the written notice given pursuant to 2.3(a). In such event
the right of any


 


6

















 


Holder to registration
pursuant to 2.3 shall be conditioned upon such Holder’s participation in such
underwriting and the inclusion of Registrable Securities in the underwriting to
the extent provided herein. All Holders proposing to distribute their
securities through such underwriting shall (together with the Company) enter
into an underwriting agreement in customary form with the managing underwriter
selected for such underwriting by the Company. Notwithstanding any other
provision of this Section 2.3, if the managing underwriter determines that
marketing factors require a limitation of the number of shares to be
underwritten, the managing underwriter may limit the Registrable Securities and
other securities to be distributed through such underwriting; provided,
however, that, in no event shall any Registrable Securities be so limited
unless all other securities of the Company (other than shares for the Company’s
account (i.e., primary shares)) are excluded in full from such offering;
provided, further, that in no event shall the number of Registrable Securities
included in such registration be reduced to less than 20% of the total number
of securities to be included in such registration except in connection with the
Company’s initial public offering, in which case all Registrable Securities may
be excluded in full. The Company shall so advise all Holders distributing their
securities through such underwriting of such limitation (or exclusion, if
applicable) and the number of shares of Registrable Securities that may be
included in the registration and underwriting shall be allocated (if
applicable) among all such Holders in proportion, as nearly as practicable, to
the respective amounts of Registrable Securities held by such Holders at the
time of filing the registration statement. To facilitate the allocation of
shares in accordance with the above provisions, the Company may round the
number of shares allocated to any Holder or holder to the nearest 100 shares.


 


If any Holder of
Registrable Securities disapproves of the terms of any such underwriting, such
Holder may elect to withdraw therefrom by written notice to the Company and the
managing underwriter. Any securities excluded or withdrawn from such
underwriting shall be withdrawn from such registration, and shall not be
transferred in a public distribution prior to 90 days after the effective date
of the registration statement relating thereto, or such other shorter period of
time as the underwriters may require. If shares are withdrawn from registration,
the Company shall offer to all persons retaining the right to include
securities in the registration the right to include additional securities in
the registration, with such shares being allocated among all such Participating
Holders in proportion, as nearly as practicable, to the respective amounts of
Registrable Securities held by such Participating Holders at the time of filing
the registration statement.


 


(c)                                  Right
to Terminate Registration. The Company shall have the right to terminate or
withdraw any registration initiated by it under this Section 2.3 prior to
the effectiveness of such registration whether or not any Holder has elected to
include securities in such registration. The Registration Expenses of such
withdrawn registration shall be borne by the Company in accordance with
Section 2.5 hereof.


 


2.4                                 Registration
on Form S-3.


 


(a)                                  Request
for Registration. Following the Company’s initial public offering, the
Company shall use its best efforts to become eligible to register offerings of
securities on Commission Form S-3 or its successor form. After the Company has
qualified for the use of Form S-3, Holders of Registrable Securities shall have
the right to request registration on Form S-3 (which request shall be in
writing and shall state the number of shares of


 


7

















 


Registrable Securities to
be registered and the intended method of disposition of shares by such
Holders), and upon receiving such request the Company shall use its best
efforts to effect such registration as soon as practicable and in any event
within 120 days of such request. The Company shall not be obligated to take any
action to effect any such registration, qualification or compliance pursuant to
this Section 2.4(a):


 


(i)                                     unless
the Holders requesting registration propose to dispose of Registrable
Securities having an anticipated aggregate price to the public (before
deduction of underwriting discounts and expenses of sale) of at least
$1,000,000;


 


(ii)                                  during
the period starting with the date 60 days prior to the Company’s estimated date
of filing of, and ending on the date three months immediately following the
effective date of, any registration statement pertaining to securities of the
Company (other than a registration of securities in a Rule 145 transaction or
with respect to an employee benefit plan), provided that the Company is
actively employing in good faith all reasonable efforts to cause such
registration statement to become effective;


 


(iii)                               more
than twice in any twelve-month period; or


 


(iv)                              if
the Company shall furnish to such Holders a certificate signed by the President
of the Company stating that in the good faith judgment of the Board of
Directors it would be seriously detrimental to the Company or its stockholders
for registration statements to be filed in the near future, then the Company’s
obligation to use its best efforts to file a registration statement under this
Section 2.4 shall be deferred for a period not to exceed 90 days from the
receipt of the request to file such registration by such Holder or Holders;
provided, however, that the Company shall not exercise such right more than
once in any twelve-month period.


 


(b)                                 Underwriting
Procedures. If a registration required under this Section 2.4 is for an
underwritten offering, the provisions of Sections 2.2(b) shall apply.


 


2.5                                 Expenses
of Registration.  All Registration Expenses incurred in
connection with registrations pursuant to Sections 2.2, 2.3 and 2.4 shall be
borne by the Company. All Selling Expenses relating to securities registered on
behalf of the Holders shall be borne by the holders of securities included in
such registration pro rata with the Company and among each other on the basis
of the number of shares so registered.


 


2.6                                 Registration
Procedures.  In the case of each registration, qualification or
compliance effected by the Company pursuant to this Section 2, the Company
will keep each Holder advised in writing as to the initiation of each
registration, qualification and compliance and as to the completion thereof. At
its expense the Company will use its commercially reasonable best efforts to:


 


(a)                                  Prepare
and file with the Commission a registration statement with respect to such
securities and use its best efforts to cause such registration statement to
become and remain effective at least ninety (90) days or until the distribution
described in the Registration Statement has been completed (up to a maximum of
120 days); provided, however, that in the case of any
registration of Registrable Securities on Form S-3 which are intended to


 


8

















 


be offered on a
continuous or delayed basis, such period shall be extended, if necessary, to
keep the registration statement effective until all such Registrable Securities
are sold, provided that if Rule 415, or any successor rule under the Securities
Act, permits an offering on a continuous or delayed basis, and provided further
that if applicable rules under the Securities Act governing the obligation to file
a post-effective amendment permit, in lieu of filing a post-effective amendment
which (i) includes any prospectus required by Section 10(a)(3) of the
Securities Act or (ii) reflects facts or events representing a material or
fundamental change in the information set forth in the registration statement,
the incorporation by reference of information required to be included in
(i) and (ii) above shall be contained in periodic reports filed
pursuant to Section 13 or 15(d) of the Exchange Act in the registration
statement;


 


(b)                                 Prepare
and file with the Commission such amendments and supplements to such
registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by
such registration statement.


 


(c)                                  Furnish
to the Participating Holders and to the underwriters of the securities being
registered such reasonable number of copies of the registration statement,
preliminary prospectus, final prospectus and such other documents as they may
reasonably request in order to facilitate the public offering of such
securities.


 


(d)                                 Use
its commercially reasonable best efforts to register and qualify the securities
covered by such registration statement under such other securities or blue sky
laws of such jurisdictions as shall be reasonably requested by the
Participating Holders, provided that the Company shall not be required in
connection therewith or as a condition thereto to qualify to do business or to
file a general consent to service of process in any such states or
jurisdictions, unless the Company is already subject to service in such
jurisdiction and except as may be required by the Securities Act.


 


(e)                                  In
the event of any underwritten public offering, enter into and perform its
obligations under an underwriting agreement, in usual and customary form, with
the managing underwriter of such offering. Each Holder shall also enter into
and perform its obligations under such an agreement.


 


(f)                                    Notify
each Participating Holder at any time when a prospectus relating thereto is
required to be delivered under the Securities Act or upon the happening of any
event as a result of which the prospectus included in such registration
statement, as then in effect, includes an untrue statement of a material fact
or omits to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances in which they were
made,  not misleading, in the light of
the circumstances then existing, and, at the request of any Participating
Holder, prepare and furnish to such Participating Holder a reasonable number of
copies of a supplement to or an amendment of such prospectus as may be reasonably
necessary so that, as thereafter delivered to the purchaser of such shares,
such prospectus shall not include an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading or incomplete in light of the
circumstances then existing.


 


9

















 


(g)                                 Cause
all securities covered by such registration statement to be listed on each
securities exchange or authorized for quotation on each automated quotation
system on which similar securities issued by the Company are then listed or
authorized for quotation.


 


(h)                                 Provide
a transfer agent and registrar for all Registrable Securities covered by such
registration statement and a CUSIP number for all such Registrable Securities,
in each case not later than the effective date of such registration.


 


(i)                                     Furnish,
at the request of any Participating Holder, on the date that the securities are
delivered to the underwriters for sale in connection with a registration being
sold through underwriters, (i) an opinion, dated such date, of the counsel
representing the Company for the purposes of such registration, in form and
substance as is customarily given to underwriters in an underwritten public
offering, addressed to the underwriters, if any, and to the Participating
Holders and (ii) a letter dated such date, from the independent certified
public accountants of the Company, in form and substance as is customarily
given by independent certified public accountants to underwriters in an
underwritten public offering, addressed to the underwriters, if any, and to the
Holders requesting registration of Registrable Securities.


 


2.7                                 Delay
of Registration.  No Holder shall have any right to obtain or
seek an injunction restraining or otherwise delaying any such registration as
the result of any controversy that might arise with respect to the
interpretation or implementation of this Section 2.


 


2.8                                 Indemnification.  In
the event any Registrable Securities are included in a registration statement
under this Section 2:


 


(a)                                  To
the extent permitted by law, the Company will indemnify each Participating
Holder, each of its officers, directors, employees, partners, members,
affiliates, agents and legal counsel, and each person controlling such
Participating Holder within the meaning of Section 15 of the Securities
Act, with respect to which registration, qualification or compliance has been
effected pursuant to this Section 3, and each underwriter, if any, and
each person who controls any underwriter within the meaning of Section 15
of the Securities Act, against all expenses, claims, losses, damages or
liabilities (or actions in respect thereof), including any of the foregoing
incurred in settlement of any litigation, commenced or threatened, arising out
of or based on any untrue statement (or alleged untrue statement) of a material
fact contained in any registration statement, prospectus, offering circular or
other document, or any amendment or supplement thereto, incident to any such
registration, qualification or compliance, or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or any violation by
the Company of the Securities Act or any rule or regulation promulgated under
the Securities Act applicable to the Company in connection with any such
registration, qualification or compliance, and the Company will pay to each
such Participating Holder, each of its officers, directors, partners, and legal
counsel and each person controlling such Participating Holder, each such
underwriter and each person who controls any such underwriter, as incurred, any
legal and any other expenses reasonably incurred in connection with
investigating, preparing, defending or settling any such claim, loss,


 


10

















 


damage, liability or
action, provided that the Company will not be liable to a particular
Participating Holder in any such case to the extent that any such claim, loss,
damage, liability or expense arises out of or is based on any untrue statement
or omission or alleged untrue statement or omission, made in reliance upon and
in conformity with written information furnished to the Company by an
instrument duly executed by such Participating Holder  and stated to be specifically for use
therein.


 


(b)                                 To
the extent permitted by law, each Participating Holder, severally and not
jointly, will, if Registrable Securities held by such Participating Holder are
included in the securities as to which such registration, qualification or
compliance is being effected, indemnify the Company, each of its directors,
officers, and legal counsel, each underwriter, if any, of the Company’s
securities covered by such a registration statement, each person who controls
the Company or such underwriter within the meaning of Section 15 of the
Securities Act, and each other Participating Holder, each of its officers,
directors, partners and legal counsel and each person controlling such
Participating Holder within the meaning of Section 15 of the Securities
Act, against all claims, losses, damages and liabilities (or actions in respect
thereof) arising out of or based on any untrue statement (or alleged untrue
statement) of a material fact contained in any such registration statement,
prospectus, offering circular or other document, or any omission (or alleged
omission) to state therein a material fact required to be stated therein or necessary
to make the statements therein not misleading, and will pay the Company, such
Participating Holders, such directors, officers, persons, underwriters or
control persons, as incurred any legal or any other expenses reasonably
incurred in connection with investigating or defending any such claim, loss,
damage, liability or action, in each case to the extent, but only to the
extent, that such untrue statement (or alleged untrue statement) or omission
(or alleged omission) is made in such registration statement, prospectus,
offering circular or other document in reliance upon and in conformity with
written information furnished to the Company in an instrument duly executed by
such Participating Holder and stated to be specifically for use therein. Notwithstanding
the foregoing, the liability of each Holder under this subsection (b)
shall be limited to an amount equal to the net proceeds to each such Holder of
Registrable Securities sold as contemplated herein, unless such liability
resulted from intentional misrepresentation by such Holder. A Holder will not
be required to enter into any agreement or undertaking in connection with any
registration under this Section 2 providing for any indemnification or
contribution on the part of such Holder greater than the Holder’s obligations
under this Section 2.8(b).


 


(c)                                  Each
party entitled to indemnification under this Section 2.8 (the “Indemnified
Party”) shall give notice to the party required to provide indemnification (the
“Indemnifying Party”) promptly after such Indemnified Party has actual
knowledge of any claim as to which indemnity may be sought, and shall permit
the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying Party,
who shall conduct the defense of such claim or litigation, shall be approved by
the Indemnified Party (whose approval shall not unreasonably be withheld), and
the Indemnified Party may participate in such defense at such party’s expense,
and provided further that the failure of any Indemnified Party to give notice
as provided herein shall not relieve the Indemnifying Party of its obligations
under this Section 2 except to the extent that the failure to give such
notice is materially prejudicial to an Indemnifying Party’s ability to defend
such action and provided further, that the Indemnifying Party shall not assume
the defense for matters as to which there is a conflict of interest or separate
and different defenses but shall bear the expense of such defense nevertheless.
No Indemnifying Party, in the defense of any such claim or


 


11

















 


litigation, shall, except
with the consent of each Indemnified Party, consent to entry of any judgment or
enter into any settlement which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such Indemnified Party of a
full release from all liability in respect to such claim or litigation.


 


(d)                                 If
the indemnification provided for in this Section 2.8 is held by a court of
competent jurisdiction to be unavailable to an Indemnified Party with respect
to any claim, loss, damage, liability or action referred to therein, then the
Indemnifying Party, in lieu of indemnifying such Indemnified Party hereunder,
shall contribute to the amount paid or payable by such Indemnified Party as a
result of such claim, loss, damage, liability or action in such proportion as
is appropriate to reflect the relative fault of the Indemnifying Party on the
one hand and the Indemnified Party on the other in connection with the actions
that resulted in such claims, loss, damage, liability or action, as well as any
other relevant equitable considerations. The relative fault of the Indemnifying
Party and of the Indemnified Party shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact related to
information supplied by the Indemnifying Party or by the Indemnified Party and
the parties’ relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The Company and the Holders
agree that it would not be just and equitable if contribution pursuant to this
Section 2.8(d) were based solely upon the number of entities from whom
contribution was requested or by any other method of allocation which does not
take account of the equitable considerations referred to above in this
Section 2.8(d). Notwithstanding the foregoing, the liability of each
Participating Holder under this subsection (d) shall be limited to an
amount equal to the net proceeds to each such Participating Holder of
Registrable Securities sold as contemplated herein, unless such liability resulted
from intentional misrepresentation by such Holder.


 


(e)                                  The
indemnification obligations of the Company and the Holders under this Section
2.8 shall survive the completion of any offering of Registrable Securities in a
registration statement filed pursuant to this Agreement.


 


2.9                                 Information
by Holder.  It shall be a condition precedent to the obligations
of the Company to take any action pursuant to this Section 2 with respect
to the Registrable Securities of any selling Holder that such holder shall furnish
to the Company such information regarding itself, the Registrable Securities
held by it, and the intended method of disposition of such securities as shall
be required to effect the registration of such Holder’s Registrable Securities.


 


2.10                           Rule
144 Reporting.  With a view to making available the benefits of
certain rules and regulations of the Commission which may at any time permit
the sale of the Restricted Securities to the public without registration, after
such time as a public market exists for the Common Stock of the Company, the
Company agrees to:


 


(a)                                  Make
and keep public information available, as those terms are defined in Rule 144
under the Securities Act, at all times after the date that the Company becomes
subject to the reporting requirements of the Securities Act or the Exchange
Act;


 


12

















 


(b)                                 File
with the Commission in a timely manner all reports and other documents required
of the Company under the Securities Act and the Exchange Act (at any time after
it has become subject to such reporting requirements);


 


(c)                                  So
long as an Investor owns any Restricted Securities, furnish upon request, (i) a
written statement by the Company as to its compliance with the reporting
requirements of said Rule 144, and of the Securities Act and the Exchange Act
(at any time after it has become subject to such reporting requirements), (ii)
a copy of the most recent annual or quarterly report of the Company and (iii)
such other reports and documents of the Company and other information in the
possession of or reasonably obtainable by the Company as an Investor may
reasonably request in availing itself of any rule or regulation of the
Commission allowing an Investor to sell any such securities without registration.


 


2.11                           Transfer
of Registration Rights.  The rights granted Holders under this
Section 2 may be assigned (i) to a transferee or assignee in connection with
any transfer or assignment of Registrable Securities by a Holder of not less
than 50,000 shares (or any lesser amount if all of such Holder’s Registrable
Securities are transferred or assigned to a transferee) of Registrable
Securities, or (ii) to any subsidiary, parent, member, affiliate, general
partner, limited partner, retired partner, retired member or shareholder of a
Holder or the estate of such constituent partner or affiliate, or to any
transferee or assignee who is a family member of the Holder or a trust for the
benefit of the Holder or any family member of the Holder, provided that, with respect
to each such transfer or assignment, the Company be given prior written notice
of the transfer, the transferee or assignee agrees in writing to all provisions
contained in this Section 2 and that such transfer otherwise be effected
in accordance with applicable securities laws.


 


2.12                           Standoff
Agreement.  The Holder agrees in connection with the Company’s
initial public offering of the Company’s securities, upon request of the
Company or the underwriters managing any underwritten offering of the Company’s
securities, not to sell, make any short sale of, loan, grant any option for the
purchase of, or otherwise dispose of any the Company’s securities (other than
those included in the registration) without the prior written consent of the
Company or such underwriters, as the case may be, during the 180 days beginning
on and after the effective date of such registration statement, provided that
each officer, director and 1% stockholder of the Company shall also have
entered into a 180-day market stand-off agreement. The obligations described in
this Section 2.12 shall not apply to securities purchased in a public
market transaction following the effective date of such registration statement
or to a registration relating solely to employee benefit plans on Form S-1 or
Form S-8 or similar forms that may be promulgated in the future, or a
registration relating solely to a Commission Rule 145 transaction on Form
S-4 or similar forms that may be promulgated in the future. Notwithstanding the
foregoing, if the Company or the managing underwriter releases from the terms
of the foregoing lockup or from any other lockup provision any  share of Common Stock or Preferred Stock held
by any person or entity, the Company shall, within at least 5 days prior to
such release,  immediately so notify all
other Holders, and all other Holders shall automatically upon such release be
released from their respective lockup provided for in this Section 2.12
and be allowed to transfer a proportionate amount of such Holder’s Registrable
Securities subject thereto.


 


13

















 


2.13                           Limitation
on Subsequent Registration Rights.  After the date of this
Agreement, the Company shall not, without the prior written consent of the
Holders of 66 2/3% of the Registrable Securities then outstanding, enter into
any agreement with any holder or prospective holder of any securities of the
Company that would grant such holder registration rights senior or on par with
to those granted to the Holders hereunder.


 


2.14                           Termination
of Registration Rights.  The rights granted under this
Section 2 shall terminate on the first to occur of (i) all shares of
Registrable Securities held or entitled to be held upon conversion by such
Holder may immediately be sold under Rule 144(k) during any ninety
(90) day period; provided, however, that the provisions of this
Section 2.14 shall not apply to any Holder who owns more than two percent
(2%) of the Company’s outstanding stock until such time as such Holder owns
less than two percent (2%) of the outstanding stock of the Company and
(ii) the five (5) year anniversary of the consummation of the initial
underwritten public offering of the Company’s securities pursuant to an
effective registration statement filed under the Securities Act that results in
the conversion of all of the Company’s Preferred Stock.


 


3.                                       Preemptive Rights.


 


3.1                                 General.  Except
for (i) shares of Common Stock issued upon conversion of the Preferred Stock,
(ii) securities issued pursuant to a public offering pursuant to an effective
registration statement under the Securities Act that results in the conversion
of all of the then-outstanding Preferred Stock, (iii) securities issued
pursuant to the acquisition of another corporation by the Company by merger,
purchase of substantially all of the assets, or other reorganization, in each
case as approved by the Board of Directors, (iv) securities issued in
connection with any stock split or stock dividend of the Company, , (v) shares
of Common Stock issued to employees, officers, or directors of, or contractors,
consultants or advisors to, the Company pursuant to stock purchase or stock
option plans, stock bonuses or awards, contracts or other arrangements that are
approved by the Company’s Board of Directors, (vi) securities issued to
financial institutions or lessors in connection with commercial credit
arrangements, equipment financings or similar transactions, the primary purpose
of which is other than equity financing, as approved by the Board of Directors
and (vii) securities issued pursuant to options, warrants, notes or other
rights to acquire securities of the Company outstanding as of the date of this
Agreement, the Company will not, nor will it permit any subsidiary to,
authorize or issue any shares of stock of the Company of any class and will not
authorize, issue or grant any options, warrants, conversion rights or other
rights to purchase or acquire any shares of stock of the Company of any class
without offering the Major Investors the right of first refusal described
below.


 


3.2                                 Right
of First Refusal.  Each Major Investor shall have a right of
first refusal to purchase an amount of securities of the Company of any class
or kind which the Company proposes to sell (other than the issuance of shares
contemplated by subsections (i) through (vii) of Section 3.1 above) (“Preemptive
Securities”) sufficient to maintain such Major Investor’s proportionate
beneficial ownership interest in the Company (as defined below). If the Company
wishes to make any such sale of Preemptive Securities, it shall give the Major
Investors written notice of the proposed sale. The notice shall set forth (i)
the Company’s bona fide intention to offer Preemptive Securities and (ii) the
material terms and conditions of the


 


14

















 


proposed sale (including
the number of shares to be offered and the price, if any, for which the Company
proposes to offer such shares), and shall constitute an offer to sell
Preemptive Securities to the Investors on such terms and conditions. Any Major
Investor may accept such offer by delivering a written notice of acceptance (an
“Acceptance Notice”) to the Company within fifteen (15) days after receipt of
the Company’s notice of the proposed sale. Any Major Investor exercising its
right of first refusal shall be entitled to participate in the purchase of
Preemptive Securities on a pro rata basis to the extent necessary to maintain
such Major Investor’s proportionate beneficial ownership interest in the
Company (such Major Investor’s “Pro Rata Portion”). For purposes hereof, a
Major Investor’s Pro Rata Portion shall be determined by multiplying the number
of Preemptive Securities by a fraction, (X) the numerator of which shall be the
number of shares of Common Stock issued or issuable upon conversion of the
Preferred Stock  treating as fully
converted into Common Stock any convertible, exercisable or exchangeable
securities and other rights to acquire Common Stock held by such Major Investor)
held by such Major Investor and any other Common Stock held by such Majority
Investor and (Y) the denominator of which shall be the number of shares of
Common Stock into which any outstanding convertible securities may be converted
and for which any outstanding options and outstanding warrants may be exercised.
The Company shall, in writing, inform each Investor which elects to purchase
its Pro Rata Portion of Preemptive Securities of any other Major Investor’s
failure to do so, in which case the Investors electing to purchase such shares
of Preemptive Securities shall have the right to purchase all of such shares on
a pro rata basis. The closing of the sale of Preemptive Securities shall occur
within ten days after the Major Investors are given written notice of such
over-subscription right. If any Major Investor who elects to exercise its right
of first refusal does not complete the purchase of such Preemptive Securities
within such period, then unless such failure is caused by or results from any
action or inaction of the Company, the Company may complete the sale of
Preemptive Securities on the terms and conditions specified in the Company’s
notice within the 60-day period following the expiration of such 10-day period.
If the Company does not enter into an agreement for the sale of such shares
within such 10-day period, or if such agreement is not consummated within such
60-day period, the right provided hereunder shall be deemed to be revived and
all future shares of Preemptive Securities shall not be offered unless first
reoffered to the Major Investors in accordance with this Section 3. A
Major Investor shall be entitled to apportion the right of first refusal hereby
granted among itself and its subsidiaries, parent, members, affiliates,
partners and retired partners and members in such proportions it deems
appropriate.


 


3.3                                 Offer
After Sale to Third Parties.  In lieu of delivering to the Major
Investors written notice of a proposed sale of Preemptive Securities pursuant
to Section 3.2, the Company may elect first to sell Preemptive Securities
to third parties and then to offer to Major Investors the opportunity to
purchase their Pro Rata Portions of the Preemptive Securities. (The Pro Rata
Portions shall be calculated giving effect to all sales of the Preemptive
Securities, including sales to the Major Investors.)  Such offer shall remain in effect for 15 days
after notice to the Investors, and if accepted, the closing of the sale of
Preemptive Securities shall occur within ten days after the date of the
Acceptance Notice.


 


3.4                                 Expiration
of Right of First Refusal.  The right of first refusal granted
under this Agreement shall expire upon the closing of a firm commitment
underwritten public offering pursuant to an effective registration statement on
Form S-1 or any successor form under the Securities Act, covering the offer and
sale of Common Stock for the account of the Company


 


15

















 


to the public with gross
proceeds to the Company in excess of $40,000,000 and a pre-money valuation
(defined as the product of (A) of the number of shares of Common Stock
outstanding immediately prior to the closing of such offering, treating all
outstanding shares of Preferred Stock as converted into Common Stock,
multiplied by (B) the price to public in such offering) of at least
$200,000,000.


 


4.                                       Miscellaneous.


 


4.1                                 Waivers
and Amendments.  With the written consent of the Company and the
record or beneficial holders of a majority of the Registrable Securities, the
rights and obligations of the Company and the holders of Registrable Securities
under this Agreement may be waived (either generally or in a particular
instance, either retroactively or prospectively, and either for a specified
period of time or indefinitely) or amended; provided, however, that (i) no such amendment shall impose or
increase any liability or obligation on an Investor or eliminate or decrease
the rights of an Investor without the consent of such Investor, and (ii) no
such amendment shall have a disproportionately adverse effect on any Investor
in relation to the other Investors without the consent of such Investor, ,
and provided further, that no such modification, amendment or waiver shall
reduce the aforesaid percentage of Registrable Securities without the consent
of all of the Purchasers of the Registrable Securities. Upon the effectuation
of each such waiver, consent, agreement of amendment or modification, the
Company shall promptly give written notice thereof to the record holders of the
Registrable Securities who have not previously consented thereto in writing. This
Agreement or any provision hereof may be changed, waived, discharged or
terminated only by a statement in writing signed by the party against which
enforcement of the change, waiver, discharge or termination is sought, except
to the extent provided in this Section 4.1.


 


4.2                                 Notices.  All
notices and other communications required or permitted hereunder shall be in
writing and, except as otherwise noted herein, shall be conclusively deemed
effectively given (i) upon personal delivery, (ii) two days after the
date of sending by commercial overnight courier or (iii) five days after
sending by first class U.S. mail postage prepaid:  (a) if to the Company, at the address on the
Company’s signature page to this Agreement (or at such other address as the
Company shall have furnished to the Holders in writing) and (b) if to a Holder,
at the latest address of such person shown on the Company’s records.


 


4.3                                 Descriptive
Headings.  The descriptive headings herein have been inserted for
convenience only and shall not be deemed to limit or otherwise affect the
construction of any provisions hereof.


 


4.4                                 Governing
Law.  This Agreement shall be governed by and interpreted under
the laws of the State of California as applied to agreements among California
residents, made and to be performed entirely within the State of California.


 


4.5                                 Counterparts.  This
Agreement may be executed in one or more counterparts, including those
transmitted via facsimile or electronic mail, each of which shall for all
purposes be deemed to be an original and all of which shall constitute the same
instrument, but only one of which need be produced.


 


16

















 


4.6                                 Expenses.  If
any action at law or in equity is necessary to enforce or interpret the terms
of this Agreement, the prevailing party shall be entitled to reasonable
attorney’s fees, costs and necessary disbursements in addition to any other
relief to which such party may be entitled.


 


4.7                                 Successors
and Assigns.  Except as otherwise expressly provided in this
Agreement, this Agreement shall benefit and bind the successors, assigns,
heirs, executors and administrators of the parties to this Agreement.


 


4.8                                 Entire
Agreement.  This Agreement constitutes the full and entire understanding
and agreement between the parties with regard to the subject matter of this
Agreement.


 


4.9                                 Separability;
Severability.  Unless expressly provided in this Agreement, the
rights of each Investor under this Agreement are several rights, not rights
jointly held with any other Investors. Any invalidity, illegality or limitation
on the enforceability of this Agreement with respect to any Investor shall not
affect the validity, legality or enforceability of this Agreement with respect
to the other Investors. If any provision of this Agreement is judicially
determined to be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not be affected or impaired.


 


4.10                           Stock
Splits.  All references to numbers of shares in this Agreement
shall be appropriately adjusted to reflect any stock dividend, split,
combination or other recapitalization of shares by the Company occurring after
the date of this Agreement.


 


4.11                           Aggregation
of Stock.  All shares of Preferred Stock held or acquired by
affiliated entities or persons shall be aggregated together for the purpose of
determining the availability of any rights under this Agreement.


 


[This space intentionally
left blank]


 


17

















 


IN WITNESS WHEREOF, the
parties have executed this Fifth Amended and Restated Investors’ Rights
Agreement on the date first set forth above.


 


	
  THE COMPANY:

  	
   

  	
  EXPRESSION DIAGNOSTICS, INC.

  
	
   

  	
   

  	
  a Delaware corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Pierre Cassigneul

  
	
   

  	
   

  	
   

  	
  Pierre Cassigneul, President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:

  
	
   

  	
   

  	
  3260 Bayshore Blvd.

  
	
   

  	
   

  	
  Brisbane, CA 94005

  



 


[Signature Page to Expression
Diagnostics, Inc. Fifth Amended and Restated Investors' Rights Agreement]


 

















 


	
  THE INVESTORS:

  	
   

  	
  INTEL CAPITAL (Cayman) CORPORATION,

  
	
   

  	
   

  	
  a Cayman Islands corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ James W. McCall

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  James W. McCall

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Assistant Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Intel Capital Corporation,

  
	
   

  	
   

  	
  a Delaware corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ James W. McCall

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  James W. McCall

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Assistant Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Intel Capital Corporation

  
	
   

  	
   

  	
  c/o Intel Corporation

  
	
   

  	
   

  	
  Attn: Intel Capital Portfolio Manager

  
	
   

  	
   

  	
  2200 Mission College Blvd., M/S RN6-46

  
	
   

  	
   

  	
  Santa Clara, CA 95052

  
	
   

  	
   

  	
  Fax Number: (408) 765-6038

  
	
   

  	
   

  	
  With a copy by e-mail to:

  
	
   

  	
   

  	
  portfolio.manager@intel.com

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  THIS IS THE SIGNATURE PAGE FOR THE

  EXPRESSION DIAGNOSTICS, INC. (THE

  “COMPANY”) FIFTH AMENDED AND RESTATED

  INVESTORS’ RIGHTS AGREEMENT ENTERED INTO

  BY AND BETWEEN THE COMPANY, INTEL

  CAPITAL CORPORATION AND THE OTHER

  INVESTORS SET FORTH THEREIN.

  



 


[Signature Page to Expression
Diagnostics, Inc. Fifth Amended and Restated Investors' Rights Agreement]


 

















 


	
  THE INVESTORS:

  	
   

  	
  DAG VENTURES QP, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  DAG Ventures Management, LLC,

  
	
   

  	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  by:

  	
  /s/ John Cadeddu

  
	
   

  	
   

  	
   

  	
  John Cadeddu, Managing Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  DAG VENTURES, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  DAG Ventures Management, LLC,

  
	
   

  	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  by:

  	
  /s/ John Cadeddu

  
	
   

  	
   

  	
   

  	
  John Cadeddu, Managing Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  DAG VENTURES GP FUND, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  DAG Ventures Management, LLC,

  
	
   

  	
   

  	
   

  	
  its Managing Member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  by:

  	
  /s/ John Cadeddu

  
	
   

  	
   

  	
   

  	
  John Cadeddu, Managing Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BLACKBOARD VENTURES INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  by:

  	
  /s/ Terry Woodard

  
	
   

  	
   

  	
   

  	
  Terry Woodard, Designated Signatory

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  DAG VENTURES I-N, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  DAG Ventures Management, LLC,

  
	
   

  	
   

  	
   

  	
  its Managing Member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  by:

  	
  /s/ John Cadeddu

  
	
   

  	
   

  	
   

  	
  John Cadeddu, Managing Director

  
	
   

  	
   

  	
   

  	
   

  



 


[Signature Page to Expression
Diagnostics, Inc. Fifth Amended and Restated Investors' Rights Agreement]


 

















 


	
  THE INVESTORS:

  	
   

  	
  KPCB HOLDINGS, INC., AS NOMINEE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Brook Byers

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Brook Byers

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Senior Vice President

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:

  	
  c/o Kleiner Perkins Caufield Byers

  
	
   

  	
   

  	
   

  	
  2750 Sand Hill Road

  
	
   

  	
   

  	
   

  	
  Menlo Park, CA  94025

  
	
   

  	
   

  	
   

  	
  Facsimile:  650.233.0378

  
	
   

  	
   

  	
   

  	
  Attention:  Risa Stack

  
						



 


[Signature Page to Expression
Diagnostics, Inc. Fifth Amended and Restated Investors' Rights Agreement]


 

















 


	
  THE INVESTORS:

  	
   

  	
  TPG VENTURES, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  TPG Ventures GenPar, L.P.

  
	
   

  	
   

  	
  By:

  	
  TPG Venture Advisors, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Jeffery D. Ekberg

  
	
   

  	
   

  	
  Name:

  	
  Jeffery D. Ekberg

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:

  	
  301 Commerce St., Ste. 3300

  
	
   

  	
   

  	
   

  	
  Fort Worth, Texas  76102

  
	
   

  	
   

  	
   

  	
  Attn:  Jeffery D. Ekberg

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  TPG BIOTECHNOLOGY PARTNERS, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  TPG Biotechnology GenPar, L.P.

  
	
   

  	
   

  	
  By:

  	
  TPG Biotech Advisors, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Jeffery D. Ekberg

  
	
   

  	
   

  	
  Name:

  	
  Jeffery D. Ekberg

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:

  	
  301 Commerce St., Ste. 3300

  
	
   

  	
   

  	
   

  	
  Fort Worth, Texas  76102

  
	
   

  	
   

  	
   

  	
  Attn:  Jeffery D. Ekberg

  
	
   

  	
   

  	
   

  
						



 


[Signature Page to Expression
Diagnostics, Inc. Fifth Amended and Restated Investors' Rights Agreement]


 

















 


	
  THE INVESTORS:

  	
   

  	
  SPROUT CAPITAL IX, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  DLJ Capital Corporation

  
	
   

  	
   

  	
  Its:

  	
  Managing General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Vijay K. Lathi

  
	
   

  	
   

  	
  By:

  	
  Vijay K. Lathi

  
	
   

  	
   

  	
  Its:

  	
  Attorney in Fact

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SPROUT ENTREPRENEURS FUND, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  DLJ Capital Corporation

  
	
   

  	
   

  	
  Its:

  	
  General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Vijay K. Lathi

  
	
   

  	
   

  	
  By:

  	
  Vijay K. Lathi

  
	
   

  	
   

  	
  Its:

  	
  Attorney in Fact

  



 


[Signature Page to Expression
Diagnostics, Inc. Fifth Amended and Restated Investors' Rights Agreement]


 

















 


	
  THE INVESTORS:

  	
   

  	
  INTEGRAL CAPITAL PARTNERS VI,
  L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By Integral Capital Management VI, LLC

  
	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Pamela K. Hagenah

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Pamela K. Hagenah

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
  A Manager

  



 


[Signature Page to Expression
Diagnostics, Inc. Fifth Amended and Restated Investors' Rights Agreement]


 

















 


	
  THE INVESTORS:

  	
   

  	
  BAY AREA EQUITY FUND I, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: Bay Area Equity Fund Managers I,

  L.L.C., its General Partner

  
	
   

  	
   

  	
  By: H&Q Venture Management L.L.C., its

  Managing Member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Michael C. Dorsey

  
	
   

  	
   

  	
   

  	
  Name: Michael C. Dorsey

  
	
   

  	
   

  	
   

  	
  Title: Managing Director

  
					



 


[Signature Page to Expression
Diagnostics, Inc. Fifth Amended and Restated Investors' Rights Agreement]


 

















 


	
  THE INVESTORS:

  	
   

  	
  Burrill Life Sciences Capital Fund, L.P.

  
	
   

  	
   

  	
  By:

  	
  Burrill & Company (Life Sciences GP), LLC

  
	
   

  	
   

  	
   

  	
  Its General Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ G. Steven Burrill

  
	
   

  	
   

  	
  Name:

  	
  G. Steven Burrill

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Managing Manager

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:

  	
  One Embarcadero Center, Suite 2700

  
	
   

  	
   

  	
   

  	
  San Francisco, CA 94111

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Fax:

  	
  (415) 591-5401

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Burrill Indiana Life Sciences Capital Fund, L.P.

  
	
   

  	
   

  	
  By:

  	
  Burrill & Company (Indiana GP), LLC

  
	
   

  	
   

  	
   

  	
  Its General Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ G. Steven Burrill

  
	
   

  	
   

  	
  Name:

  	
  G. Steven Burrill

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Managing Member

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:

  	
  One Embarcadero Center, Suite 2700

  
	
   

  	
   

  	
   

  	
  San Francisco, CA 94111

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Fax:

  	
  (415) 591-5401

  	
   

  
	
   

  	
   

  	
   

  
								



 


[Signature Page to Expression
Diagnostics, Inc. Fifth Amended and Restated Investors' Rights Agreement]


 

















 


	
  THE INVESTORS:

  	
   

  	
  TriplePoint Capital

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Sajal Srivastava

  
	
   

  	
   

  	
  Name:

  	
  Sajal Srivastava

  
	
   

  	
   

  	
  Title:

  	
  Chief Operating Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:

  	
  2420 Sand Hill Road # 101

  
	
   

  	
   

  	
   

  	
  Menlo Park, CA 94025

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Fax:

  	
  (650) 854-2094

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Leader Ventures

  
	
   

  	
   

  	
  By:

  	
  Leader Ventures, LLC

  
	
   

  	
   

  	
  Its:

  	
  Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Robert W. Molke

  
	
   

  	
   

  	
  Name:

  	
  Robert W. Molke

  
	
   

  	
   

  	
  Title:

  	
  Managing Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:

  	
  311 California Street Suite 420

  
	
   

  	
   

  	
   

  	
  San Francisco, CA 94111

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Fax:

  	
  (415) 956-8233

  
	
   

  	
   

  	
   

  



 


[Signature Page to Expression
Diagnostics, Inc. Fifth Amended and Restated Investors' Rights Agreement]


 

















 


	
  THE INVESTORS:

  	
   

  	
  PWP PARTNERSHIP FUND, LLC

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ William F. Dagley

  
	
   

  	
   

  	
  Name:

  	
  William F. Dagley

  
	
   

  	
   

  	
  Title:

  	
  Managing Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:

  	
  80 Sir Francis Drake Boulevard

  
	
   

  	
   

  	
   

  	
  4th Floor

  
	
   

  	
   

  	
   

  	
  Larkspur, CA 94939

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Fax:

  	
  (415) 461-3299

  



 


[Signature Page to Expression
Diagnostics, Inc. Fifth Amended and Restated Investors' Rights Agreement]


 

















 


	
  THE INVESTORS:

  	
  JAMES McKAY ARMSTRONG

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James McKay Armstrong

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:

  	
  Two Embarcadero Center, Suite 2300

  
	
   

  	
   

  	
   

  	
  San Francisco, CA 94111

  
	
   

  	
   

  	
   

  	
   

  



 


[Signature page to Investors Rights
Agreement]


 

















 


	
  THE INVESTORS:

  	
  WS INVESTMENT COMPANY LLC (2007C)

  
	
   

  	
  WS INVESTMENT COMPANY (2007A)

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James A. Terranova

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  



 


[Signature page to Investors Rights
Agreement]


 

















 


EXHIBIT A


 


Investors


 


List of Preferred Stockholders


 


LIST OF
SERIES A HOLDERS:


 


Wally S. Buch,
Trustee of the Buch 1993 Revocable Trust


CN Investment Partners,
L.P.


Commercial San
Antonio S.A


K. David Crockett


Michael J. Danaher


Stephen Doros,
Trustee of the Gerald Doros and Myra Doros Irrevocable trust


First Clearing LLC
C/F John Urquhart, IRA #8531-1686


Randall J. Lee


Modern Version
Limited


OCI Ltd.


Puma Holdings
Limited


James M. Shapiro,
Trustee of the James and Sarah Shapiro Family Trust dated 9/91


Stertzer Family
Trust


Vichon Nevelle,
S.A.


WS Investment
2000A


Paul G. Yock,
Trustee of the Yock Family Revocable Trust dated 7/21/93


Paul G. Yock


 


LIST OF
SERIES B HOLDERS:


 


CN Investment
Partners L.P.


Commercial San Antonio S.A.


Michael J. Danaher


Stephen Doros,
Trustee of the Gerald Doros and Myra Doros Irrevocable Trust


Torcept (formerly
known as Dual Dimensions Limited)


Episode Holdings,
Inc.


Sanjeev S. Judge


Domini Kelly


Jeffrey J. Kimbell


Joshpe Maouad


OCi Ltd.


Puma Holdings
Limited


Stertzer Gamma
Trust


Stertzer Family
Trust


Vichon Nevelle
S.A.


 

















 


Windrock
Enterprises, LLC


WS Investment
Company 2000B


WS Investment
Company


 


LIST OF
SERIES C HOLDERS:


 


Pierre Cassigneul


Julie and Adam
Cohen


Comercial San
Antonio S.A.


Michael J. Danaher


Duke University
Special Ventures Fund, Inc.


Episode Holdings,
Inc.


Sanjeev S. Judge


Judy Kishner


KPCB Holdings,
Inc., as nominee


Avi Kulkarni


Macdonald (Don)
Morris


Puma Holdings
Limited


The Elizabeth and
Steven Rosenberg Trust dtd 9/28/00


Stertzer Family
Trust


TPG Biotechnology
Partners, L.P.


TPG Ventures, L.P.


Vichon Nevelle, S.A.


Judith Wilbur


WS Investment
Company, LLC


 


LIST OF
SERIES D HOLDERS:


 


Bay Area Equity
Fund, L.P.


Burrill Indiana
Life Sciences Capital Fund, L.P.


Burrill Life
Sciences Capital Fund, L.P.


Integral Capital
Partners VIU, L.P.


KPCB Holdings,
Inc., as nominee


Sprout Capital IX, L.P.


Sprout Entrepreneurs Fund, L.P.


The Board of
Trustees of the Leland Stanford Junior University (DAPER I)


TPG Biotechnology
Partners, L.P.


TPG Ventures, L.P.


 

















 


LIST OF
SERIES E HOLDERS:


 


DAG Ventures QP,
L.P.


DAG Ventures, L.P.


DAG Ventures GP
Fund, LLC


Blackboard
Ventures Inc.


DAG Ventures I-N,
LLC


KPCB Holdings,
Inc., as nominee


TPG Biotechnology
Partners, L.P.


TPG Ventures, L.P.


Sprout Capital IX, L.P.


Sprout Entrepreneurs Fund, L.P.


Integral Capital Partners VI, L.P.


Bay Area Equity
Fund I, L.P.


Burrill Indiana
Life Sciences Capital Fund, L.P.


Burrill Life
Sciences Capital Fund, L.P.


Intel Capital
(Cayman) Corporation


 


LIST OF
SERIES F INVESTORS:


 


DAG Ventures QP,
L.P.


DAG Ventures, L.P.


DAG Ventures GP
Fund, LLC


Blackboard
Ventures Inc.


DAG Ventures I-N,
LLC


James McKay
Armstrong


KPCB Holdings,
Inc., as nominee


TPG Biotechnology
Partners, L.P.


TPG Ventures, L.P.


Sprout Capital IX, L.P.


Sprout Entrepreneurs Fund, L.P.


Integral Capital Partners VI, L.P.


Bay Area Equity
Fund I, L.P.


Burrill Indiana
Life Sciences Capital Fund, L.P.


Burrill Life
Sciences Capital Fund, L.P.


Intel Capital
Corporation


TriplePoint Capital LLC


Leader Equity, LLC


PWP Partnership
Fund, LLC


WS Investment
Company (2007A)


WS Investment
Company (2007C)