Exhibit 10.2


 


EXECUTION VERSION


 


REGISTRATION RIGHTS AGREEMENT


 


This Registration Rights
Agreement (the “Agreement”) is made and entered as of this 18th day of October,
2004 by and among Exelixis, Inc., a Delaware corporation (the “Parent”),
X-Ceptor Therapeutics, Inc., a Delaware corporation (the “Company”), and those
certain holders of capital stock of the Company listed in Annex I hereto
(the “Holders”).


 


WHEREAS, pursuant to the
Agreement and Plan of Merger entered into as of September 27, 2004 (the “Merger
Agreement”) among Parent, XBO Acquisition Corp., a Delaware corporation (“Merger
Sub”), and the Company, Merger Sub will merge with and into the Company, and
the Company will be the surviving corporation and a wholly owned subsidiary of
Parent (the “Merger”);


 


WHEREAS, pursuant to the
Merger Agreement, the shares of the common stock and preferred stock of the
Company outstanding immediately prior to the effective time of the Merger (the “Company
Common Stock” and the “Company Preferred Stock,” respectively, and
collectively, the “Company Stock”) shall be cancelled, and the Company
Preferred Stock held by the Holders shall be converted into the right to
receive shares of common stock of Parent (“Parent Common Stock”);


 


WHEREAS, as a condition
of entering into the Merger Agreement, the Company has requested, for the
benefit of the Holders, the registration rights set forth below.


 


NOW, THEREFORE, in
consideration of the foregoing and of the mutual covenants contained in this
Agreement and for other valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereby agree as follows:


 


1.               Certain
Definitions


 


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


 


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


 


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


 


“Prospectus”
shall mean the prospectus included in any Registration Statement, as amended or
supplemented by any prospectus supplement, with respect to the terms of the
offering of any portion of the Registrable Securities covered by such
Registration Statement and by all other amendments and supplements to the
prospectus, including post-effective amendments and all material incorporated
by reference in such prospectus.


 





















 


“Register,”
“registered” and “registration” refer to a registration made by
preparing and filing a registration statement or similar documents in
compliance with the 1933 Act, and the declaration or ordering of effectiveness
of such registration statement or document.


 


“Registration
Expenses” shall mean all reasonable expenses incurred by Parent in
complying with Section 2 hereof, including all registration and filing fees,
listing fees for the Parent Common Stock, printing expenses, fees and
disbursements of counsel for Parent, and blue sky fees and expenses in all
states.


 


“Registrable Securities” shall mean the Parent
Common Stock issued pursuant to the Merger Agreement (including without
limitation shares of Parent Common Stock issued pursuant to Sections 2.6 and
2.7 thereto) and any securities into which Parent Common Stock is converted or
for which Parent Common Stock is exchanged; provided, however,
that a Holder’s Registrable Securities shall cease to be Registrable Securities
when all shares held by such Holder may be sold in a three-month period
pursuant to Rule 144 taking into consideration volume limitations under Rule
144(e) relating to one percent of the shares outstanding of Parent but not
taking into consideration the average weekly trading volume.


 


“Registration
Statement” shall mean any registration statement filed under the 1933 Act
that covers the resale of any of the Registrable Securities pursuant to the
provisions of this Agreement, amendments and supplements to such registration
statement, including post-effective amendments, all exhibits and all material
incorporated by reference in such registration statement.


 


“Rule 144”
shall mean Rule 144 under the 1933 Act, as such rule may be amended from time
to time, or any similar rule or regulation adopted by the SEC (excluding Rule
144A).


 


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


 


2.               Shelf
Registration.


 


(a)                                  Registration Statement.  Not later than 90 days after the Effective
Date (as defined in the Merger Agreement), Parent shall prepare and file with
the SEC one Registration Statement pursuant to Rule 415 under the 1933 Act
covering the Registrable Securities (the “Shelf
Registration”). 
The Shelf Registration shall be on Form S-3 or another appropriate form
permitting registration of such Registrable Securities for resale by such
Holders from time to time.


 


(b)                                 Effectiveness. Parent shall use its
commercially reasonable efforts to cause the Shelf Registration to become
effective not later than 180 days after the Effective Date.  Subject to the requirements of the 1933 Act,
including without limitation, requirements relating to updating through
post-effective amendments or otherwise, Parent shall use its commercially
reasonable efforts to keep the Shelf Registration continuously effective until
the earliest of (i) such


 


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time as all Registrable Securities may be sold in a
three month period pursuant to Rule 144 taking into consideration volume
limitations under Rule 144(e) relating to one percent of the shares outstanding
of Parent but not taking into consideration the average weekly trading volume,
(ii) such time as all of the Registrable Securities have been sold or otherwise
disposed of by the Holders and (iii) the second anniversary of the Effective
Date.  Parent shall use its commercially
reasonable efforts to take such actions under the laws of various states as may
be required to cause the resale of the Registrable Securities pursuant to the
Shelf Registration to be lawful.


 


(c)                                  Suspension Period.  Following the effectiveness of a Registration
Statement filed pursuant to this Section 2, Parent may, at any time, suspend
the effectiveness of such Registration Statement for up to 45 days, as
appropriate (a “Suspension Period”)
if Parent determines in good faith that it would be detrimental to Parent and
its stockholders to use a Prospectus under the Registration Statement because
of a development or potential development involving Parent which Parent would
be obligated to disclose in the Prospectus, but which disclosure would be
premature at such time or in Parent’s reasonably judgment have a material
adverse effect upon Parent or its stockholders, and prior to suspending such
use, Parent provides the holders of Registrable Securities with written notice
of such suspension, which notice need not specify the nature of the event
giving rise to such suspension. Parent may not use more than two Suspension
Periods in any six-month period.  Parent
shall use its commercially reasonable efforts to limit the duration and number
of any Suspension Periods.  Each Holder
agrees that, upon receipt of any notice from Parent of a Suspension Period,
such Holder shall forthwith discontinue disposition of shares covered by such
Registration Statement or Prospectus until such Holder (i) is advised in
writing by Parent that the use of the applicable Prospectus may be resumed,
(ii) has received copies of a supplemental or amended Prospectus, if
applicable, and (iii) has received copies of any additional or supplemental
filings which are incorporated or deemed to be incorporated by reference in
such Prospectus.


 


3.               Expenses of
Registration.  All Registration
Expenses shall be borne by Parent; provided, however,
that the term Registration Expenses shall not include, and in no event will the
Parent be obligated to pay, stock transfer taxes or underwriters’ or brokers’
discounts or commissions relating to Registrable Securities and all fees and
disbursements of any counsel of any holder of Registrable Securities.


 


4.               Parent
Obligations.  Parent shall:


 


(a)                                  use
its reasonable best efforts to prepare and file with the SEC such amendments
and supplements to any Registration Statement and associated Prospectus as may
be necessary to keep such Registration Statement effective;


 


(b)                                 use
its reasonable best efforts to furnish to each Holder such number of copies of
a Prospectus, including a preliminary prospectus, and all


 


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amendments and supplements thereto and such other
documents as each Holder may reasonably request in order to facilitate the
disposition of the Registrable Securities owned by such Holder;


 


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


 


(d)                                 use
its reasonable best efforts to prior to any public offering of Registrable
Securities, register or qualify such Registrable Securities for offer and sale
under the securities or blue sky laws of such jurisdictions as the holders of
Registrable Securities may reasonably request and do any and all other
reasonable acts or things necessary or advisable to enable the distribution in
such jurisdictions of the Registrable Securities covered by the Registration
Statement; provided, however, that Parent shall not
be required in connection therewith or as a condition thereto to (i) qualify to
do business in any jurisdiction where it would not otherwise be required to
qualify but for this Section, (ii) subject itself to general taxation in any
such jurisdiction, (iii) file a general consent to service of process in any
such jurisdiction, (iv) provide any undertakings that cause Parent undue
expense or burden, or (v) make any change in its charter or bylaws;


 


(e)                                  use
its reasonable best efforts to cause all Registrable Securities covered by the
Registration Statement to be listed on the securities exchange, interdealer
quotation system or other market on which similar securities issued by Parent
are then listed; and


 


(f)                                    use
its reasonable best efforts to, as promptly as practicable, notify each Holder,
at any time when a Prospectus relating to the Registrable Securities is
required to be delivered under the 1933 Act, upon discovery that, or as
promptly as practicable after becoming aware 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 any material
fact required to be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances then existing, and promptly
prepare and furnish to such Holder a reasonable number of copies of a
supplement to or an amendment of such Prospectus as may be necessary so that,
as thereafter delivered to the purchaser of such Registrable Securities, such
Prospectus shall not include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing.


 


5.               Obligations of
Holders.


 


(a)                                  It
shall be a condition precedent (severally as to each Holder) to the obligations
of Parent to complete the registration pursuant to this Agreement with respect
to the Registrable Securities of a Holder that such Holder


 


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shall furnish in writing to Parent such information
regarding himself, herself or itself, the Registrable Securities held by such
Holder and the intended method of disposition of such Registrable Securities
held by such Holder as shall be reasonably required to effect the registration
of such Registrable Securities, and shall execute such documents in connection
with such registration as Parent may reasonably request.  At least fifteen (15) business days prior to
the first anticipated filing date of the Registration Statement, Parent shall
notify each Holder of the information Parent requires from such Holder if such
Holder elects to have any of its Registrable Securities included in the
Registration Statement.


 


(b)                                 Each
Holder agrees to cooperate with Parent as reasonably requested by Parent in
connection with the preparation and filing of the Registration Statement
hereunder, unless such Holder has notified Parent in writing of an election to
exclude all of the Registrable Securities held or owned by such Holder from the
Registration Statement.


 


(c)                                  Each
Holder agrees that, upon receipt of any notice from Parent suspending the
effectiveness of the Registration Statement or of any event rendering the
Registration Statement no longer effective, such Holder will immediately
discontinue disposition of Registrable Securities pursuant to the Registration
Statement covering such Registrable Securities held or owned by it until such
Holder’s receipt of the copies of the supplemented or amended Prospectus filed
with the SEC and declared effective and, if so directed by Parent, such Holder
shall deliver to Parent (at the expense of Parent) or destroy (and deliver to
Parent a certificate of destruction) all copies in such Holder’s possession
(except copies for the files of a Holder) of the Prospectus covering the
Registrable Securities current at the time of receipt of such notice.


 


6.               Indemnification.


 


(a)                                  Indemnification by Parent.  Parent agrees to indemnify and hold harmless,
to the fullest extent permitted by law, each Holder, its officers, directors,
partners and employees and each person who controls such Holder (within the
meaning of the 1933 Act) against all losses, claims, damages, liabilities,
costs (including, without limitation, reasonable attorney’s fees) and expenses
(collectively, “Loss”) caused by (i) any untrue or alleged untrue statement of
a material fact contained in any Registration Statement, Prospectus or any
preliminary prospectus or any amendment or supplement thereto 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, except
insofar as the same are based upon any information furnished in writing to Parent
by such Holder, expressly for use therein or results from such Holder’s failure
to deliver a copy of a Registration Statement or Prospectus (or any amendment
or supplement thereto or any final Prospectus that corrects an untrue statement
or omission of a material fact in a preliminary prospectus) after Parent has
furnished such Holder with a copy thereof, or (ii) any violation by Parent of
any federal, state or common law, rule or regulation applicable to Parent in
connection with any


 


5





















 


Registration Statement, Prospectus or any preliminary
prospectus, or any amendment or supplement thereto.


 


(b)                                 Indemnification by Holder of Registrable Securities.  In connection with any registration pursuant
to the terms of this Agreement, each Holder holding Registrable Securities will
furnish to Parent in writing such information as Parent reasonably requests
concerning such Holder or the proposed manner of distribution for use in
connection with any Registration Statement or Prospectus and each such Holder,
severally and not jointly, agrees to indemnify and hold harmless, to the
fullest extent permitted by law, Parent, its directors, officers, employees,
stockholders, affiliates and each person who controls Parent (within the
meaning of Section 15 of the 1933 Act) against any Loss resulting from any
untrue statement of a material fact or any omission of a material fact required
to be stated in the Registration Statement or Prospectus or preliminary
prospectus or amendment or supplement thereto or necessary to make the
statement therein not misleading, but only to the extent that such untrue
statement or omission is contained in any information furnished in writing by
such Holder to Parent specifically for inclusion in such Registration Statement
or Prospectus or amendment or supplement thereto.  In no event shall the aggregate liability of
any Holder be greater in amount than the dollar amount of the proceeds (net of
all expenses paid by such Holder and the amount of any damages such Holder has
otherwise been required to pay by reason of such untrue statement or omission)
received by such Holder upon the sale of the Registrable Securities giving rise
to such indemnification obligation.


 


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


 


6





















 


expenses of more than one separate firm of attorneys
at any time for all such indemnified parties. 
No indemnifying party will, except with the consent of the indemnified
party, consent to entry of any judgment or enter into any settlement that does
not include as an unconditional terms thereof the giving by the claimant or
plaintiff to such indemnified party of a release from all liability in respect
to such claim or litigation.


 


(d)                                 Contribution. 
If for any reason the indemnification provided for in the preceding
clauses (a) and (b) is unavailable to an indemnified party or insufficient to
hold it harmless, other than as expressly specified therein, then the
indemnifying party shall contribute to the amount paid or payable by the
indemnified party as a result of such loss, claim, damage or liability in such
proportion as is appropriate to reflect the relative fault of the indemnified
party and the indemnifying party, as well as any other relevant equitable
considerations.  No person guilty of
fraudulent misrepresentation within the meaning of Section 11(f) of the 1933
Act shall be entitled to contribution from any person not guilty of such
fraudulent misrepresentation.  In no
event shall the aggregate contribution obligation of any Holder be greater in
amount than the dollar amount of the proceeds (net of all expenses paid by such
Holder and the amount of any damages such Holder has otherwise been required to
pay be reason of such untrue or alleged untrue statement or omission or alleged
omission) received by it upon the sale of the Registrable Securities giving
rise to such contribution obligation.


 


7.               Rule 144
Reporting.  With a view to making
available to the Holders the benefits of certain rules and regulations of the
SEC which may permit the sale of the Registrable Securities to the public,
subject in all cases to applicable law and the terms and conditions set forth
herein, Parent agrees to use its commercially reasonable efforts to:


 


(a)                                  make
and keep public information available, as those terms are understood and
defined in Rule 144, as long as Registrable Securities are outstanding;


 


(b)                                 file
with the SEC, in a timely manner, all reports and other documents required of
the Company under the 1933 Act and the 1934 Act;


 


(c)                                  so
long as a Holder owns any Registrable Securities, furnish to such Holder forthwith
upon request: a written statement by Parent as to its compliance with the
reporting requirements of Rule 144 and of the 1934 Act; a copy of the most
recent annual or quarterly report of Parent; and such other reports and
documents as a Holder may reasonably request in availing itself or any rule or
regulation of the SEC allowing it to sell any such securities without
registration or pursuant to a registration on Form S-3; and


 


(d)                                 take
all such action (including without limitation the furnishing of the information
described in Rule 144(d)(4)) as may be necessary or helpful to facilitate a
sale of Registrable Securities by a Holder.


 


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8.     Miscellaneous.


 


(a)                                  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 Agreement.


 


 (b)                              Amendments and
Waivers.  This
Agreement may be amended only by a writing signed by the Company and the
Holders holding a majority of the then outstanding Registrable Securities.  Parent may take any action herein prohibited,
or omit to perform any act herein required to be performed by it, only if
Parent shall have obtained the written consent to such amendment, action or
omission to act, of the Holders holding a majority of the then outstanding
Registrable Securities.


 


(c)                                  Notices. 
All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given if delivered personally or sent by
overnight courier or facsimile to the parties at the following addresses and
numbers or at such other addresses and numbers as shall be specified by the
parties by like notice:


 


(i)                                     if
to Parent, to:


 


Exelixis, Inc.


170 Harbor Way


P.O. Box 511


So. San Francisco, CA
94083-0511


(650) 837-7951


Attention:  VP Legal Affairs and Secretary


 


with a copy, which shall
not constitute notice, to:


Kenneth Ebanks, Esq.


Covington & Burling


One Front Street; 35th
Floor


San Francisco, CA 94111


(415)955-6589


 


(ii)                                  if
to the Holders, to the address and/or facsimile number set forth opposite such
Holders name on Annex I.


 


(d)                                 Notice
so given shall (in the case of notice so given by mail) be deemed to be given
when received and (in the case of notice so given by facsimile or personal
delivery) on the date of actual transmission or (as the case may be) personal
delivery.


 


(e)                                  Assignments and Transfers by Holders.  This Agreement and all the rights and
obligations of each Holder hereunder may not be assigned or


 


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transferred to any transferee or assignee except as
set forth herein.  Each Holder may make
such assignment or transfer only to a transferee or assignee of Registrable
Securities that is (i) an affiliate (as such term is defined in Rule 405 of the
1933 Act) or (ii) a partner or member of a Holder making such transfer or
assignment; provided, that (x) such transfer or assignment is made expressly
subject to the applicable provisions of this Agreement and the transferee or
assignee agrees in writing to be bound by the applicable terms and conditions
hereof, and (y) Parent is provided with written notice of such assignment.  Any such transferee or assignee shall
thereafter be considered a “Holder” for purposes of this Agreement.


 


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


 


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


 


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


 


(i)                                     Severability. 
If one or more provisions of this Agreement are held to be unenforceable
under applicable law, such provision shall be excluded from this Agreement and
the balance of this Agreement shall be interpreted as if such provision were so
excluded and shall be enforceable in accordance with its terms to the fullest extent
permitted by law.


 


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


 


(k)                                  Entire Agreement.  This Agreement, together with the agreements
and documents referred to in the Merger Agreement, is intended by the parties
as a final expression of their agreement and intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein. 
This Agreement, together with the agreements and documents referred to
in the Merger Agreement, supersedes all prior agreements and understandings
between the parties with respect to such subject matter.


 


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(l)                                     Applicable Law.  This Agreement shall be governed by, and
construed in accordance with, the laws of the State of California without
regard to principles of conflicts of law.


 


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LEFT BLANK]


 


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


 


 


	
  Parent:

  	
  Exelixis, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Christoph Pereira

  	
   

  
	
   

  	
   

  	
  Name: Christoph Pereira

  
	
   

  	
   

  	
  Title: VP Legal Affairs & Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
  Holder:

  	
  [Executed by each of the holders listed in ANNEX I]

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
  Company:

  	
  X-Ceptor Therapeutics, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Kevin J. Kinsella

  	
   

  
	
   

  	
   

  	
  Name: Kevin J. Kinsella

  
	
   

  	
   

  	
  Title: Chairman, President & Chief Executive

  



 


 


[SIGNATURE PAGE TO REGISTRATION
RIGHTS AGREEMENT]


 





















 


ANNEX I


HOLDERS


 




	
  Name

  
	
  Ira Schulman 

  
	
  Raju Mohan

  
	
  Andrew Cubitt 

  
	
  Donna Tran

  
	
  Janis C. Naeve 

  
	
  DP IV Associates, L.P.

  
	
  Ronald M. Evans, Ph.D.

  
	
  Bert W. O'Malley, M.D. 

  
	
  David Mangelsdorf, Ph.D.

  
	
  Richard A. Heyman

  
	
  Robert P. Giargiari

  
	
  Ming Wei Wang

  
	
  Farallon Capital Institutional Partners
  II, L.P.

  
	
  Farallon Capital Institutional Partners
  III, L.P.

  
	
  RR Capital Partners, L.P.