the effectiveness of the Company’s initial public offering, the “price to public” per shareprice specified in the final prospectus relating to such offering). If the Company’s common stockis traded in a public market and the Shares are preferred stock, the fair market value of a Shareshall be the closing price of a share of the Company’s common stock reported for the business dayimmediately before Holder delivers its Notice of Exercise to the Company (or, in the instancewhere the Warrant is exercised immediately prior to the effectiveness of the Company’s initialpublic offering, the initial “price to public” per share price specified in the final prospectusrelating to such offering), in both cases, multiplied by the number of shares of the Company’scommon stock into which a Share is convertible. If the Company’s common stock is not traded in apublic market, the Board of Directors of the Company shall determine fair market value in itsreasonable good faith judgment.          1.4Delivery of Certificate and New Warrant. Promptly after Holder exercises orconverts this Warrant and, if applicable, the Company receives payment of the aggregate WarrantPrice, the Company shall deliver to Holder certificates for the Shares acquired and, if thisWarrant has not been fully exercised or converted and has not expired, a new Warrant representingthe Shares not so acquired.          1.5 Replacement of Warrants. On receipt of evidence reasonably satisfactory to theCompany of the loss, theft, destruction or mutilation of this Warrant and, in the case of loss,theft or destruction, on delivery of an indemnity agreement reasonably satisfactory in form andamount to the Company or, in the case of mutilation, or surrender and cancellation of this Warrant,the Company shall execute and deliver, in lieu of this Warrant, a new warrant of like tenor.          1.6 Treatment of Warrant Upon Acquisition of Company.               1.6.1 “Acquisition”. For the purpose of this Warrant, “Acquisition” means any sale, orother disposition of all or substantially all of the assets of the Company in whatever form, or anyreorganization, consolidation, or merger of the Company where the holders of the Company’ssecurities before the transaction beneficially own less than 50% of the outstanding votingsecurities of the surviving entity after the transaction.               1.6.2 Treatment of Warrant at Acquisition.A) Upon the written request of the Company, Holder agrees that, in the event of an Acquisition inwhich the sole consideration is cash, either (a) Holder shall exercise its conversion or purchaseright under this Warrant and such exercise will be deemed effective immediately prior to theconsummation of such Acquisition or (b) if Holder elects not to exercise the Warrant, this Warrantwill expire upon the consummation of such Acquisition. The Company shall provide the Holder withwritten notice of its request relating to the foregoing (together with such reasonable informationas the Holder may request in connection with such contemplated Acquisition giving rise to suchnotice), which is to be delivered to Holder not less than ten (10) days prior to the closing of theproposed Acquisition.B) Upon the written request of the Company, Holder agrees that, in the event of an Acquisition thatis an “arms length” sale of all or substantially all of the Company’s assets (and only its assets)to a third party that is not an Affiliate (as defined below) of the Company (a “True Asset Sale”),either (a) Holder shall exercise its conversion or purchase right under this Warrant and suchexercise will be deemed effective immediately prior to the consummation of such Acquisition or (b)if Holder elects not to exercise the Warrant, this Warrant will continue until the Expiration Dateif the Company continues as a going concern following the closing of any such True Asset Sale. TheCompany shall provide the Holder with written notice of its request relating to the foregoing(together with such reasonable information as the Holder may
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request in connection with such contemplated Acquisition giving rise to such notice), whichis to be delivered to Holder not less than ten (10) days prior to the closing of the proposedAcquisition.C) Upon the closing of any Acquisition other than those particularly described in subsections (A)and (B) above, the successor entity shall assume the obligations of this Warrant, and this Warrantshall be exercisable for the same securities, cash, and property as would be payable for theShares issuable upon exercise of the unexercised portion of this Warrant as if such Shares wereoutstanding on the record date for the Acquisition and subsequent closing. The Warrant Priceand/or number of Shares shall be adjusted accordingly.As used herein “Affiliate” shall mean any person that directly, or indirectly through one or moreintermediaries, controls or is controlled by, or is under common control with, the Company. Theterm “control” (including the terms “controlling,” “controlled by” or “under common control with”)means the possession, direct or indirect, of the power to direct or cause the direction ofmanagement and policies of a person, whether through the ownership of voting securities, bycontract, or otherwise.          1.7 Certain Shareholders’ Agreements.          The Holder agrees that, immediately upon the exercise of the Warrant, the Holder will bebound by the terms and conditions of (a) the Amended and Restated Investors’ Rights Agreementdated as of April 2, 2002 among Ceres, Inc. and each of the Investors (as defined therein); and(b) the Fourth Amended and Restated Right of First Refusal and Co-Sale Agreement dated as of April2, 2002 among Ceres, Inc., each of the Founders (as defined therein) and each of the Investors (asdefined therein), in each case as if it was a party thereto, and will take the Shares issuableupon exercise of the Warrant subject to such terms and conditions.ARTICLE 2. ADJUSTMENTS TO THE SHARES.          2.1 Stock Dividends, Splits, Etc. If the Company declares or pays a dividend on theShares payable in common stock, or other securities, then upon exercise of this Warrant, for eachShare acquired, Holder shall receive, without cost to Holder, the total number and kind ofsecurities to which Holder would have been entitled had Holder owned the Shares of record as of thedate the dividend occurred. If the Company subdivides the Shares by reclassification or otherwiseinto a greater number of shares or takes any other action which increase the amount of stock intowhich the Shares are convertible, the number of shares purchasable hereunder shall beproportionately increased and the Warrant Price shall be proportionately decreased. If theoutstanding shares are combined or consolidated, by reclassification or otherwise, into a lessernumber of shares, the Warrant Price shall be proportionately increased and the number of Sharesshall be proportionately decreased.          2.2 Reclassification, Exchange, Combinations or Substitution. Upon anyreclassification, exchange, substitution, or other event that results in a change of the numberand/or class of the securities issuable upon exercise or conversion of this Warrant, Holder shallbe entitled to receive, upon exercise or conversion of this Warrant, the number and kind ofsecurities and property that Holder would have received for the Shares if this Warrant had beenexercised immediately before such reclassification, exchange, substitution, or other event. Such anevent shall include any automatic conversion of the outstanding or issuable securities of theCompany of the same class or series as the Shares to common stock pursuant to the terms of theCompany’s Certificate of Incorporation upon the closing of a registered public offering of theCompany’s common stock. The Company or its successor shall promptly issue to Holder an
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amendment to this Warrant setting forth the number and kind of such new securities or otherproperty issuable upon exercise or conversion of this Warrant as a result of such reclassification,exchange, substitution or other event that results in a change of the number and/or class ofsecurities issuable upon exercise or conversion of this Warrant. The amendment to this Warrantshall provide for adjustments which shall be as nearly equivalent as may be practicable to theadjustments provided for in this Article 2 including, without limitation, adjustments to theWarrant Price and to the number of securities or property issuable upon exercise of the newWarrant. The provisions of this Article 2.2 shall similarly apply to successive reclassifications,exchanges, substitutions, or other events.          2.3 Adjustments for Diluting Issuances. The number of shares of common stockissuable upon conversion of the Shares shall be subject to adjustment, from time to time in themanner set forth in the Company’s Certificate of Incorporation as if the Shares were issued andoutstanding on and as of the date of any such required adjustment. It is understood, moreover,that once the Shares are converted into common stock of the Company, the foregoing referencedadjustment provisions applicable to preferred stock of the Company are no longer applicable.The provisions set forth for the Shares in the Company’s Certificate of Incorporation relating tothe above in effect as of the Issue Date may not be amended, modified or waived, without the priorwritten consent of Holder unless such amendment, modification or waiver affects the rightsassociated with the Shares in the same manner as such amendment, modification or waiver affects therights associated with all other shares of the same series and class as the Shares granted to theHolder.          2.4 No Impairment. The Company shall not, by amendment of its Certificate ofIncorporation or through a reorganization, transfer of assets, consolidation, merger,dissolution, issue, or sale of securities or any other voluntary action, avoid or seek to avoid theobservance or performance of any of the terms to be observed or performed under this Warrant by theCompany, but shall at all times in good faith assist in carrying out of all the provisions of thisArticle 2 and in taking all such action as may be necessary or appropriate to protect Holder’srights under this Article against impairment.          2.5 Fractional Shares. No fractional Shares shall be issuable upon exercise orconversion of the Warrant and the number of Shares to be issued shall be rounded down to thenearest whole Share. If a fractional share interest arises upon any exercise or conversion of theWarrant, the Company shall eliminate such fractional share interest by paying Holder the amountcomputed by multiplying the fractional interest by the fair market value of a full Share.          2.6 Certificate as to Adjustments. Upon each adjustment of the Warrant Price, theCompany shall promptly notify Holder in writing, and, at the Company’s expense, promptly computesuch adjustment, and furnish Holder with a certificate of its Chief Financial Officer setting forthsuch adjustment and the facts upon which such adjustment is based. The Company shall, upon writtenrequest, furnish Holder a certificate setting forth the Warrant Price in effect upon the datethereof and the series of adjustments leading to such Warrant Price.ARTICLE 3. REPRESENTATIONS AND COVENANTS OF THE COMPANY.          3.1 Representations and Warranties. The Company represents and warrants to theHolder as follows:               (a) The initial Warrant Price referenced on the first page of this Warrant is not greaterthan (i) the price per share at which the Shares were last issued in an arms-length transaction inwhich at least $500,000 of the Shares were sold and (ii) the fair market value of the Shares as ofthe date of this Warrant.
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               (b) All Shares which may be issued upon the exercise of the purchase right represented bythis Warrant, and all securities, if any, issuable upon conversion of the Shares, shall, uponissuance, be duly authorized, validly issued, fully paid and nonassessable, and free of any liensand encumbrances except for restrictions on transfer provided for herein or under applicablefederal and state securities laws.               (c) The Capitalization Table dated June 1, 2004 provided to Holder remains true and completeas of such date and there have been no material changes thereto since such date.          3.2 Notice of Certain Events. If the Company proposes at any time (a) to declare anydividend or distribution upon any of its stock, whether in cash, property, stock, or othersecurities and whether or not a regular cash dividend; (b) to offer for sale additional shares ofany class or series of the Company’s stock other than in connection with the grant of stock optionsunder a stock option plan or the exercise of options or warrants; (c) to effect anyreclassification or recapitalization of any of its stock; (d) to merge or consolidate with or intoany other corporation, or sell, lease, or convey all or substantially all of its assets, or toliquidate, dissolve or wind up; or (e) offer holders of registration rights the opportunity toparticipate in an underwritten public offering of the company’s securities for cash, then, inconnection with each such event, the Company shall give Holder: (1) at least 10 days prior writtennotice of the date on which a record will be taken for such dividend, distribution, or subscriptionrights (and specifying the date on which the holders of common stock will be entitled thereto) orfor determining rights to vote, if any, in respect of the matters referred to in (c) and (d) above;(2) in the case of the matters referred to in (c) and (d) above at least 10 days prior writtennotice of the date when the same will take place (and specifying the date on which the holders ofcommon stock will be entitled to exchange their common stock for securities or other propertydeliverable upon the occurrence of such event); and (3) in the case of the matter referred to in(e) above, the same notice as is given to the holders of such registration rights.          3.3 Registration Under Securities Act of 1933, as amended. The Company agrees thatthe Shares or, if the Shares are convertible into common stock of the Company, such common stock,shall have certain incidental, or “Piggyback,” registration rights pursuant to and as set forth inthe Company’s Amended and Restated Investor Rights Agreement dated April 2, 2002. The provisionsset forth in such Investors’ Right Agreement may not be amended, modified or waived without theprior written consent of Holder unless such amendment, modification or waiver affects the rightsassociated with the Shares in the same manner as such amendment, modification, or waiver affectsthe rights associated with all other shares of the same series and class as the Shares granted tothe Holder.          3.4 No Shareholder Rights. Except as provided in this Warrant, the Holder will nothave any rights as a shareholder of the Company until the exercise of this Warrant.ARTICLE 4.REPRESENTATIONS, WARRANTIES OF THE HOLDER. The Holder represents andwarrants to the Company as follows:          4.1 Purchase for Own Account. This Warrant and the securities to be acquired uponexercise of this Warrant by the Holder will be acquired for investment for the Holder’s account,not as a nominee or agent, and not with a view to the public resale or distribution within themeaning of the Act. Holder also represents that the Holder has not been formed for the specificpurpose of acquiring this Warrant or the Shares.
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          4.2 Disclosure of Information. The Holder has received or has had full access to allthe information it considers necessary or appropriate to make an informed investment decision withrespect to the acquisition of this Warrant and its underlying securities. The Holder further hashad an opportunity to ask questions and receive answers from the Company regarding the terms andconditions of the offering of this Warrant and its underlying securities and to obtain additionalinformation (to the extent the Company possessed such information or could acquire it withoutunreasonable effort or expense) necessary to verify any information furnished to the Holder or towhich the Holder has access.          4.3 Investment Experience. The Holder understands that the purchase of this Warrantand its underlying securities involves substantial risk. The Holder has experience as an investorin securities of companies in the development stage and acknowledges that the Holder can bear theeconomic risk of such Holder’s investment in this Warrant and its underlying securities and hassuch knowledge and experience in financial or business matters that the Holder is capable ofevaluating the merits and risks of its investment in this Warrant and its underlying securitiesand/or has a preexisting personal or business relationship with the Company and certain of itsofficers, directors or controlling persons of a nature and duration that enables the Holder to beaware of the character, business acumen and financial circumstances of such persons.          4.4 Accredited Investor Status. The Holder is an “accredited investor” within themeaning of Regulation D promulgated under the Act.          4.5 The Act. The Holder understands that this Warrant and the Shares issuable uponexercise or conversion hereof have not been registered under the Act in reliance upon a specificexemption therefrom, which exemption depends upon, among other things, the bona fide nature of theHolder’s investment intent as expressed herein. The Holder understands that this Warrant and theShares issued upon any exercise or conversion hereof must be held indefinitely unless subsequentlyregistered under the 1933 Act and qualified under applicable state securities laws, or unlessexemption from such registration and qualification are otherwise available.ARTICLE 5. MISCELLANEOUS.          5.1 Term: This Warrant is exercisable in whole or in part at any time and from timeto time on or before the Expiration Date.          5.2 Legends. This Warrant and the Shares (and the securities issuable, directlyor indirectly, upon conversion of the Shares, if any) shall be imprinted with a legend insubstantially the following form:THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTEREDUNDER THE ACT, OR THE SECURITIES LAWS OF ANY STATE AND, EXCEPT AND PURSUANTTO THE PROVISIONS OF ARTICLE 5 BELOW, MAY NOT BE OFFERED, SOLD OR OTHERWISETRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER SAIDACT AND APPLICABLE STATE SECURITIES LAW OR, IN THE OPINION OF LEGAL COUNSELIN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCHOFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS EXEMPT FROMREGISTRATION.
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THE UNDERLYING SECURITIES FOR WHICH THIS WARRANT MAY BE EXERCISED ARESUBJECT TO THE TERMS AND CONDITIONS OF AN AMENDED AND RESTATED RIGHT OFFIRST REFUSAL AGREEMENT BY AND AMONG THE HOLDER, THE COMPANY AND CERTAINHOLDERS OF CAPITAL STOCK OF THE COMPANY. COPIES OF SUCH AGREEMENT MAY BEOBTAINED UPON WRITTEN REQUEST OF THE SECRETARY OF THE COMPANY.          5.3 Compliance with Securities Laws on Transfer. This Warrant and the Sharesissuable upon exercise of this Warrant (and the securities issuable, directly or indirectly, uponconversion of the Shares, if any) may not be transferred or assigned in whole or in part withoutcompliance with applicable federal and state securities laws by the transferor and the transferee(including, without limitation, the delivery of investment representation letters and legalopinions reasonably satisfactory to the Company, as reasonably requested by the Company). TheCompany shall not require Holder to provide an opinion of counsel if the transfer is to SiliconValley Bancshares (Holder’s parent company) or any other affiliate of Holder. Additionally, theCompany agrees that an opinion of counsel will not be required if the Company agrees, based on itsgood faith business judgment assessment of compliance of the proposed disposition with theapplicable provisions of Rule 144 or Rule 144A, including whether there is no material question asto the availability of current information as referenced in Rule 144(c), Holder represents that ithas complied with Rule 144(d) and (e) in reasonable detail, the selling broker represents that ithas complied with Rule 144(f), and the Company is provided with a copy of Holder’s notice ofproposed sale.          5.4Transfer Procedure. Upon receipt by Holder of the executed Warrant, Holder willtransfer all of this Warrant to Silicon Valley Bancshares, Holder’s parent company, by execution ofan Assignment substantially in the form of Appendix 2. Subject to the provisions of Article 5.3and upon providing Company with written notice, Silicon Valley Bancshares and any subsequent Holdermay transfer all or part of this Warrant or the Shares issuable upon exercise of this Warrant (orthe Shares issuable directly or indirectly, upon conversion of the Shares, if any) to anytransferee, provided, however, in connection with any such transfer, Silicon Valley Bancshares orany subsequent Holder will give the Company notice of the portion of the Warrant being transferredwith the name, address and taxpayer identification number of the transferee and Holder willsurrender this Warrant to the Company for reissuance to the transferee(s) (and Holder ifapplicable). Further, the Company may refuse to transfer this Warrant or the Shares to (i) anyperson or entity who is engaged in research and development in the field of plant biotechnology orplant genomics or any Affiliate of such per son or entity or (ii) to any person or entity who isnot an “accredited investor” within the meaning of Regulation D promulgated under the Act, unless,in either case, the stock of the Company is publicly traded. It will be a condition of any suchtransfer of this Warrant or the Shares that the transferee shall be bound by the terms andconditions of this Warrant as they apply to such securities.          5.5 Notices. All notices and other communications from the Company to the Holder, orvice versa, shall be deemed delivered and effective when given personally or mailed by first-classregistered or certified mail, postage prepaid, at such address as may have been furnished to theCompany or the Holder, as the case may (or on the first business day after transmission byfacsimile) be, in writing by the Company or such holder from time to time. Effective upon receiptof the fully executed Warrant and the initial transfer described in Article 5.4 above, all noticesto the Holder shall be addressed as follows until the Company receives notice of a change ofaddress in connection with a transfer or otherwise:
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Silicon Valley Bancshares