Fourth Amended and Restated Investor Rights Agreement



 Exhibit 10.1 

TABLE OF CONTENTS 
  

							
	 	 	 	  	 	  	Page
	1.	 	Restrictions on Transferability; Registration Rights	  	1
				
		 	1.1	  	Certain Definitions	  	1
		 	1.2	  	Restrictions	  	5
		 	1.3	  	Requested Registration	  	6
		 	1.4	  	Registration on Form S-3	  	8
		 	1.5	  	Company Registration	  	10
		 	1.6	  	Registration Procedures	  	11
		 	1.7	  	Information by Holder	  	13
		 	1.8	  	Indemnification	  	13
		 	1.9	  	Expenses of Registration	  	16
		 	1.10	  	Rule 144 Reporting	  	16
		 	1.11	  	Transfer of Registration Rights	  	17
		 	1.12	  	Limitations on Subsequent Registration Rights	  	17
		 	1.13	  	Procedure for Underwriter Cutbacks	  	17
		 	1.14	  	Standoff Agreement	  	18
		 	1.15	  	Termination of Rights	  	18
			
	2.	 	Right of First Refusal	  	18
				
		 	2.1	  	Right of First Refusal	  	18
		 	2.2	  	Assignment of Right of First Refusal	  	19
		 	2.3	  	Termination of Right of First Refusal	  	19
			
	3.	 	Affirmative Covenants of the Company	  	20
				
		 	3.1	  	Financial Information	  	20
		 	3.2	  	Operating Plan and Budget	  	20
		 	3.3	  	Inspection	  	21
		 	3.4	  	Stock Vesting	  	21
		 	3.5	  	Key Man Life Insurance	  	21
		 	3.6	  	Directors’ & Officers’ Liability	  	21
		 	3.7	  	Board Committees	  	21
		 	3.8	  	Actions Requiring Board Approval	  	21
		 	3.9	  	Actions Requiring a Waiver of the Preferred	  	22
		 	3.10	  	Company Confidential Information	  	23
		 	3.11	  	Observer Rights	  	23
		 	3.12	  	Termination of Covenants	  	25
			
	4.	 	Acknowledgement	  	25
			
	5.	 	Miscellaneous	  	25

  

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		 	5.1	  	Governing Law	  	26
		 	5.2	  	Successors and Assigns	  	26
		 	5.3	  	Entire Agreement	  	26
		 	5.4	  	Notices	  	26
		 	5.5	  	Delays or Omissions	  	27
		 	5.6	  	Dispute Resolution Fees	  	27
		 	5.7	  	Counterparts	  	27
		 	5.8	  	Severability	  	27
		 	5.9	  	Titles and Subtitles	  	27
		 	5.10	  	Amendment and Waiver	  	27
		 	5.11	  	Effect of Amendment or Waiver	  	28
		 	5.12	  	Termination of Prior Agreement	  	28
		 	5.13	  	Waiver	  	28
		 	5.14	  	Rights of Investors	  	28
		 	5.15	  	Aggregation of Stock	  	28
		 	5.16	  	Specific Performance	  	28
		 	5.17	  	Jurisdiction and Venue; Waiver of Jury Trial	  	28

 EXHIBIT A - Schedule of Investors

 EXHIBIT B - Schedule of Founders 









 FOURTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT 

This Fourth Amended and Restated Investor Rights Agreement (this “Agreement”) is made as of August 6,
2010, among Complete Genomics, Inc., a Delaware corporation (the “Company”), the stockholders and warrantholders listed on Exhibit A hereto (each, an “Investor” and collectively, the
“Investors”) and the stockholders and founders of the Company listed on Exhibit B hereto (each, a “Founder” and collectively, the “Founders”). 

RECITALS 

The Company and certain of the Investors have entered into a Series E Preferred Stock Purchase Agreement (the “Purchase
Agreement”) of even date herewith pursuant to which the Company wants to sell to such Investors and such Investors want to purchase from the Company shares of the Company’s Series E Preferred Stock. One condition to such
Investors’ obligations to purchase shares of the Company’s Series E Preferred Stock under the Purchase Agreement is that the Company and such Investors enter into this Agreement in order to provide such Investors with certain rights to
register shares of the Company’s Common Stock issuable upon conversion of the Series E Preferred Stock held by such Investors, certain rights to receive information pertaining to the Company, and a right of first offer with respect to certain
issuances by the Company of its securities. The Company wants to induce such Investors to purchase shares of Series E Preferred Stock pursuant to the Purchase Agreement by agreeing to the terms and conditions set forth herein. 

The Company, the Investors and the Founders previously entered into that certain Third Amended and Restated Investor Rights Agreement
dated August 12, 2009, as amended November 6, 2009 and February 16, 2010 (the “Prior Agreement”). The parties to the Prior Agreement desire to amend and restate the Prior Agreement in its entirety, and to
accept the rights and restrictions created in this Agreement in lieu of the rights and restrictions contained in the Prior Agreement. Section 5.10 of the Prior Agreement vested the authority to amend the Prior Agreement in the Company and the
Holder or Holders (as defined in the Prior Agreement) holding, in the aggregate, more than sixty percent (60%) of the outstanding shares of Common Stock issued or issuable pursuant to conversion of the Shares (as defined in the Prior
Agreement). The Holders (as defined in the Prior Agreement) holding more than sixty percent (60%) of the outstanding shares of Common Stock issued or issuable pursuant to conversion of the Shares (as defined in the Prior Agreement) are entering
into this Agreement, making this Agreement binding upon all of the parties to the Prior Agreement 
 AGREEMENT 

The parties agree as follows: 

1.    Restrictions on Transferability; Registration Rights. 

1.1        Certain Definitions.  As used in this Agreement, the following terms
have the following respective meanings: 
 “Board” means the board of directors of the Company.










 “Commission” means the Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act. 
 “Exchange Act” means the
Securities Exchange Act of 1934, as amended, or any similar successor federal statute, and the rules and regulations thereunder, all as the same shall be in effect from time to time. 

“Form S-3 Initiating Holders” means any Holder or Holders who in the aggregate hold not less than two and one
half percent (2.5%) of the Registrable Securities then outstanding and who propose to register securities, the aggregate offering price of which exceeds $5,000,000. 

“Gold Hill” shall mean Gold Hill Venture Lending 03, L.P. 

“Gold Hill Warrant” shall mean the warrant issued to Gold Hill in connection with the Loan and Security
Agreement by and among the Company, SVB and Gold Hill, dated as of September 21, 2006. 
 “Holder”
means (i) any Investor or Founder holding Registrable Securities; (ii) SVB and Gold Hill; provided, however, that SVB and Gold Hill shall not be deemed Holders for purposes of Sections 1.3, 2 and 3 of this Agreement except with respect to
the Shares of Series C Preferred Stock held by Gold Hill and the Common Stock issuable upon conversion thereof; and (iii) any person holding Registrable Securities to whom the rights under this Agreement have been transferred in accordance with
Section 1.11 hereof. 
 “Initiating Holders” means any Holder or Holders who in the aggregate hold
not less than forty percent (40%) of the Registrable Securities then outstanding and who propose to register securities, the aggregate offering price of which, net of underwriting discounts and commissions, exceeds $5,000,000. 

“IPO” means the first public offering of the Common Stock of the Company to the general public that is affected
pursuant to a registration statement filed with, and declared effective by, the Commission under the Securities Act. 

“Major Investors” means Essex Woodlands Health Ventures Fund VIII, L.P., Essex Woodlands Health Ventures Fund
VIII-A, L.P. and Essex Woodlands Health Ventures Fund VIII-B, L.P. (any of them, “Essex”), OrbiMed Associates III, LP and Caduceus Private Investments III, LP (either, “OrbiMed”), Highland Capital
Management, L.P. (“Highland”), Prospect Venture Partners III, L.P., OVP Venture Partners VI, L.P., Enterprise Partners VI, LP, SCV-CG, LLC (“Sands”) and any New Investor (as defined in the Purchase
Agreement) that is designated in writing as a “Major Investor” by the Board of Directors in its sole discretion and Genentech, Inc., together with their respective affiliates; provided, however, that Genentech, Inc. shall not be a Major
Investor for the purposes of Sections 2 or 3 hereof. 
 “New Securities” means any shares of capital
stock of the Company, including Common Stock and Preferred Stock, whether authorized or not, and rights, options, or warrants to purchase said shares of capital stock, and securities of any type whatsoever (including debt instruments) that are, or
may become, convertible into capital stock; provided, however, that the 
  

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term “New Securities” does not include (i) the issuance of Common Stock or Preferred Stock upon the conversion of any bonds, debentures, notes or other evidence of indebtedness,
and any warrants, shares or any other securities convertible into, exercisable for, or exchangeable for Common Stock, including Preferred Stock, or for Preferred Stock (collectively, “Convertible Securities”), outstanding as
of the date hereof; (ii) the issuance of shares as approved by the Board (including at least three of the Preferred Directors) of Common Stock (or options to purchase shares of Common Stock) to employees, officers, directors or consultants of
the Company under equity incentive plans, programs or agreements approved by the Board (not including the reissuance of shares repurchased by the Company from employees or consultants of the Company); (iii) the issuance of shares of Common
Stock or Convertible Securities to lenders, financial institutions, equipment lessors, or real estate lessors to the Company in connection with commercial credit arrangements, equipment financings, commercial property leases or similar transactions
approved by the Board; (iv) the issuance of shares of Common Stock or Convertible Securities pursuant to (A) the acquisition of another business by the Company by merger, purchase of substantially all of the assets or shares, or other
reorganization whereby the Company or its shareholders own not less than a majority of the voting power of the surviving or successor business or (B) the acquisition of technology or other intellectual property by outright purchase or exclusive
license, in each case, provided that such transaction is approved by the Board; (v) the issuance of shares of Common Stock in connection with a Qualified IPO; (vi) the issuance of shares of Common Stock or Convertible Securities in
connection with strategic partnership transactions approved by the Board; (vii) the issuance of shares pursuant to stock splits, stock dividends or similar transactions; or (viii) securities issued pursuant to the Purchase Agreement.

 “Other Stockholders” means persons other than Holders who, by virtue of agreements with the Company,
are entitled to include their securities in certain registrations hereunder. 
 “Preferred Director”
has the meaning set forth in the Restated Certificate. 
 “Pro Rata Portion” means the ratio that
(x) the sum of the number of shares of the Company’s Common Stock held by an Investor immediately prior to the issuance of New Securities, assuming conversion of the Shares but excluding any other security of the Company exercisable for,
or convertible into, Common Stock, bears to (y) the sum of the total number of shares of the Company’s Common Stock then outstanding, assuming conversion of the Shares but excluding any other security of the Company exercisable for, or
convertible into, Common Stock then outstanding. 
 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. 
 “Qualified IPO” shall have the meaning set forth in
the Restated Certificate. 
 “Registration Expenses” shall mean all expenses incurred by the Company in
complying with Sections 1.3, 1.4, and 1.5 hereof, including, without limitation, all registration, qualification, listing and filing fees, printing expenses, escrow fees, fees and disbursements of

  

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counsel for the Company, fees and disbursements of one counsel for all of the Holders registering securities in any given registration, blue sky fees and expenses, and the expense of any
special audits incident to or required by any such registration (but excluding the compensation of regular employees of the Company which shall be paid in any event by the Company), but shall not include Selling Expenses. 

“Registrable Securities” shall mean (i) shares of Common Stock issued or issuable pursuant to the
conversion of the Shares, (ii) other (x) shares of Common Stock held prior to the IPO by holders of Shares, (y) shares of Common Stock issuable upon the exercise of warrants held prior to the IPO by holders of Shares and
(z) shares of Common Stock issuable upon the conversion of shares of Preferred Stock issuable upon the exercise of warrants held prior to the IPO by holders of Shares, (iii) shares of Series B Preferred Stock issued upon exercise of the
SVB Warrant or the Gold Hill Warrant; provided, however, that such shares shall not be deemed Registrable Securities and the holders thereof shall not be deemed Holders for purposes of Sections 1.3, 2 and 3 of this Agreement; (iv) any Common
Stock of the Company issued as a dividend or other distribution with respect to or in exchange for or in replacement of the shares referenced in clauses (i) and (ii) above; and (v) solely for the purposes of Section 1.5, shares
of Common Stock issued or issuable to the Founders and to Callida Genomics, Inc.; provided, however, that shares of Common Stock or other securities shall only be treated as Registrable Securities 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, (B) transferred in a transaction pursuant to which the registration rights are not also assigned in accordance with
Section 1.11 hereof, or (C) with respect to each Holder, all such shares held by such Holder become eligible for sale immediately under Rule 144 of the Securities Act (or any successor rule). 

“Restricted Securities” shall mean the securities of the Company required to bear the legend set forth in
Section 1.2 hereof. 
 “Rule 144” means Rule 144 as promulgated by the Commission under the
Securities Act, as such Rule may be amended from time to time, or any similar successor rule that may be promulgated by the Commission. 

“Rule 145” means Rule 145 as promulgated by the Commission under the Securities Act, as such Rule may be amended
from time to time, or any similar successor rule that may be promulgated by the Commission. 
 “Securities
Act” shall mean the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder 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. 
 “Selling Expenses” shall mean all underwriting discounts, selling commissions and stock
transfer taxes applicable to the securities registered by the Holders and all fees and disbursements of counsel for any Holder, other than the fees and disbursements of one counsel for all of the Holders registering securities in any given
registration as provided in the definition of “Registration Expenses” above. 
  

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 “Shares” means the Company’s Series A Preferred Stock, Series
B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock and Series E Preferred Stock. 
 “SVB
Warrant” shall mean the warrant that was transferred from Silicon Valley Bank to SVB Financial Group and that was originally issued to Silicon Valley Bank in connection with the Loan and Security Agreement by and among the Company,
Silicon Valley Bank and Gold Hill, dated as of September 21, 2006. 

1.2        Restrictions. 

(a)        Each Holder agrees not to make any disposition of all or any portion of the
Registrable Securities unless and until the transferee has agreed in writing for the benefit of the Company to be bound by this Section 1.2 and by Section 1.14 hereof, provided and to the extent such Sections are then applicable, and
(i) there is then in effect a registration statement under the Securities Act covering such proposed disposition and such disposition is made in accordance with such registration statement, or (ii) such Holder shall have notified the
Company of the proposed disposition and shall have furnished the Company with a detailed statement of the circumstances surrounding the proposed disposition, and, if reasonably requested by the Company, such Holder shall have furnished the Company
with an opinion of counsel or other evidence reasonably satisfactory to the Company, that such disposition will not require registration under the Securities Act. Notwithstanding the foregoing, no such registration statement or opinion of counsel
shall be necessary for a transfer by a Holder which is (A) a partnership to its partners or retired partners in accordance with partnership interests, (B) a limited liability company to its members or former members in accordance with
their interest in the limited liability company, (C) a corporation to its shareholders in accordance with their interests in the corporation, (D) to the Holder’s family member or trust for the benefit of an individual Holder, or
(E) to any of its affiliates (including but not limited to an affiliated fund managed by the same manager or managing member or general partner or management company or by an entity controlling, controlled by, or under common control with such
manager or managing member or general partner or management company, each an “Affiliated Entity”), provided in all cases enumerated in clauses (A) – (E) that the transferee is subject to the terms of this
Section 1.2 and Section 1.14 as if such transferee were an original Holder hereunder. Each Holder consents to the Company making a notation on its records and giving instructions to any transfer agent of the Restricted Securities in order
to implement the restrictions on transfer established in this Section 1.2. 

(b)        Each certificate representing Registrable Securities shall be stamped or otherwise
imprinted with legends substantially in the following forms (in addition to any legend required under applicable state securities laws or the Company’s charter documents): 

“THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED, OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER SUCH ACT, OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL OR OTHER

  

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EVIDENCE, REASONABLY SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.” 

“THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN THE COMPANY
AND THE SHAREHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.” 

(c)        The Company shall promptly reissue unlegended certificates at the request of any
Holder thereof if the Holder shall have obtained an opinion of counsel or other evidence reasonably acceptable to the Company to the effect that the securities proposed to be disposed of may lawfully be disposed of without registration,
qualification, or legend. 
 1.3         Requested Registration. 

(a)        Request for Registration.  If the Company shall receive from
Initiating Holders a written request that the Company effect any registration, qualification, or compliance, the Company will: 

(i)        promptly deliver written notice of the proposed registration, qualification, or
compliance to all other Holders; and 
 (ii)        as soon as practicable, use its
best efforts to effect such registration, qualification, or compliance (including, without limitation, the execution of an undertaking to file post-effective amendments, appropriate 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 delivered to the Company
within twenty (20) days after delivery 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 1.3: 
 (A)        Prior to the earlier of: (i) two
(2) years following the date of this Agreement, and (ii) six months following the effective date of an IPO; 

(B)        After the Company has effected two (2) such registrations pursuant to this
Section 1.3, such registrations have been declared or ordered effective, and the securities offered pursuant to such registrations have been sold; 

(C)        During the period starting with the date sixty (60) days prior to the
Company’s estimated date of filing of, and ending on a date one hundred and eighty (180) days after the effective date of, a registration initiated by the Company; provided that the Company (i) delivers notice of the Company’s
intent to effect such registration 
  

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to the Holders within thirty (30) days after the Company’s receipt of the request of the Initiating Holders and is actively employing in good faith all reasonable efforts to cause such
registration statement to become effective and that the Company’s estimate of the date of filing such registration statement is made in good faith, and (ii) may not defer its registration obligations under Section 1.3 for more than an
aggregate of Two Hundred Forty (240) days in any twelve (12) month period pursuant to this Section 1.3(a)(ii)(C) and/or Section 1.3(a)(ii)(E); 

(D)        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; 

(E)        If in the good faith judgment of the Board, such registration would be seriously
detrimental to the Company and the Board concludes, as a result, that it is essential to defer the filing of such registration statement at such time, and the Company thereafter delivers to the Initiating Holders a certificate, signed by the
President or Chief Executive Officer of the Company, stating that in the good faith judgment of the Board 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 1.3 shall be deferred for a period, not to exceed sixty (60) days from the delivery of the written request from the Initiating Holders,
during which such filing would be seriously detrimental; provided, however, that the Company (i) may not utilize this right more than twice in any twelve (12) month period, and (ii) may not defer its registration
obligations under Section 1.3 for more than an aggregate of Two Hundred Forty (240) days in any twelve (12) month period pursuant to this Section 1.3(a)(ii)(E) and/or Section 1.3(a)(ii)(C); 

(F)        If the Initiating Holders do not request that such offering be firmly underwritten by
underwriters selected by the Initiating Holders (subject to the consent of the Company, which consent will not be unreasonably withheld or delayed); or 

(G)        If the Initiating Holders propose to dispose of shares of Registrable Securities
which may be immediately registered on Form S-3 pursuant to a request made under Section 1.4 hereof. 
 Subject to the
foregoing clauses (A) through (G), the Company shall file a registration statement covering the Registrable Securities so requested to be registered as soon as practicable after receipt of the request or requests of the Initiating Holders. The
registration statement filed pursuant to the request of the Initiating Holders may, subject to the provisions of Sections 1.3(c) hereof, include other securities of the Company with respect to which registration rights have been granted, and may
include securities being sold for the account of the Company. For the avoidance of doubt, the Company may utilize its right to defer registration under Section 1.3(a)(ii)(E) in two consecutive sixty (60) day periods in any twelve
(12) month period to defer a requested registration for up to one hundred twenty (120) days (subject to the limitation in Section 1.3(a)(ii)(E)(ii)). 

(b)        Underwriting.  If the Initiating Holders request that such offering
be firmly underwritten by underwriters selected by the Initiating Holders (subject to the 
  

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consent of the Company, which consent will not be unreasonably withheld), the right of any Holder to registration pursuant to this Section 1.3 shall be conditioned upon such Holder’s
participation in such underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting to the extent provided herein. A Holder may elect to include in such underwriting all or a part of the Registrable Securities held
by such Holder. 
 (c)        Procedures.  The Initiating Holders
shall, on behalf of all Holders, offer to include such securities in the underwriting and may condition such offer on their acceptance of the applicable provisions of this Section 1 (including without limitation Section 1.14). The Company
shall (together with all Holders or other persons proposing to distribute their securities through such underwriting) enter into and perform its obligations under an underwriting agreement in customary form with the managing underwriter selected for
such underwriting by the Initiating Holders holding a majority of the then outstanding shares held by all Initiating Holders (which managing underwriter shall be reasonably acceptable to the Company). Notwithstanding any other provision of this
Agreement, if the managing underwriter advises the Initiating Holders in writing that marketing factors require a limitation of the number of shares to be underwritten, the number of shares to be included in the underwriting or registration shall be
allocated among all participating Holders thereof, including the Initiating Holders, in proportion (as nearly as practicable) to the amount of Registrable Securities of the Company owned by each participating Holder. In no event shall any
Registrable Securities be excluded from such underwriting unless all other securities are first excluded from such offering. If any person who has requested inclusion in such registration as provided above disapproves of the terms of the
underwriting, such person shall be excluded therefrom by written notice delivered by the Company or the managing underwriter. Any Registrable Securities and/or other securities so excluded or withdrawn shall also be withdrawn from registration.

 1.4        Registration on Form S-3. 

(a)        Qualification on Form S-3.  After the IPO, the Company shall use its
best efforts to qualify for registration on Form S-3 or any comparable or successor form. To that end the Company shall register (whether or not required by law to do so) its Common Stock under the Exchange Act in accordance with the provisions of
the Exchange Act following the effective date of the first registration of any securities of the Company on Form S-1 or any comparable or successor form or forms. 

(b)        Request for Registration on Form S-3.  After the Company has
qualified for the use of Form S-3, if the Company shall receive from Form S-3 Initiating Holders a written request that the Company effect a registration on Form S-3 the Company will: 

(i)        promptly deliver written notice of the proposed registration to all other Holders;
and 
 (ii)        as soon as practicable, use its best efforts to effect such
registration, qualification, or compliance (including, without limitation, the execution of an undertaking to file post-effective amendments, appropriate 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 

 

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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 delivered to the Company within twenty (20) days after delivery 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 1.4: 

(A)        After the fifth anniversary of an IPO; 

(B)        After the Company has effected two (2) such registrations pursuant to this
Section 1.4 during any twelve (12) month period, such registrations have been declared or ordered effective and the securities offered pursuant to such registrations have been sold; 

(C)        During the period starting with the date sixty (60) days prior to the
Company’s estimated date of filing of, and ending on a date one hundred and eighty (180) days after the effective date of, a registration initiated by the Company; provided that the Company (i) delivers notice of the
Company’s intent to effect such registration to the Holders within thirty (30) days after the Company’s receipt of the request of the Form S-3 Initiating Holders and is actively employing in good faith all reasonable efforts to cause
such registration statement to become effective and that the Company’s estimate of the date of filing such registration statement is made in good faith, and (ii) may not defer its registration obligations under Section 1.4 for more
than an aggregate of Two Hundred Forty (240) days in any twelve (12) month period pursuant to this Section 1.4(b)(ii)(C) and/or Section 1.4(b)(ii)(E); 

(D)        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; 

(E)        If in the good faith judgment of the Board, such registration would be seriously
detrimental to the Company and the Board concludes, as a result, that it is essential to defer the filing of such registration statement at such time, and the Company thereafter delivers to the Form S-3 Initiating Holders a certificate, signed by
the President or Chief Executive Officer of the Company, stating that in the good faith judgment of the Board 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 1.4 shall be deferred, for a period not to exceed sixty (60) days from the date of delivery of the written request from the Form S-3
Initiating Holders, during which such filing would be seriously detrimental; provided, however, that the Company (i) may not utilize this right more than twice in any twelve (12) month period, and (ii) may not defer its
registration obligations under Section 1.4 for more than an aggregate of Two Hundred Forty (240) days in any twelve (12) month period pursuant to this Section 1.4(b)(ii)(E) and/or Section 1.4(b)(ii)(C). For the avoidance of
doubt, the Company may utilize its right to defer registration under Section 1.4(a)(ii)(E) in two consecutive sixty (60) day periods in any 

 

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twelve (12) month period to defer a requested registration for up to one hundred twenty (120) days (subject to the limitation in Section 1.4(a)(ii)(E)(ii)). 

(c)        Underwriting; Procedure.  If a registration requested under this
Section 1.4 is for an underwritten offering, the provisions of Sections 1.3(b) and 1.3(c) shall apply to such registration. Registrations effected pursuant to this Section 1.4 shall not be counted as demands for registration(s) effected
pursuant to Sections 1.3 or 1.5, respectively. 
 1.5        Company
Registration. 
 (a)        Notice of Registration.  If 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) a registration pursuant to Sections 1.3 or 1.4 hereof, (B) a registration relating solely
to employee benefit plans, (C) a registration relating solely to a Rule 145 transaction, or (D) a registration on any registration form that does not permit secondary sales, the Company will: 

(i)        promptly deliver to each Holder written notice thereof; and 

(ii)        use its best efforts to include in such registration (and any related qualification
under blue sky laws or other compliance), except as set forth in Section 1.5(b) below, and in any underwriting involved therein, all the Registrable Securities specified in a written request or requests made by any Holder and delivered to the
Company within twenty (20) days after the written notice is delivered by the Company. Such written request may include all or a portion of a Holder’s Registrable Securities. 

(b)        Underwriting; Procedures.  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 Section 1.5(a)(i). In such event, the right of any Holder to registration
pursuant to this Section 1.5 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 and the other holders distributing their securities through such underwriting) enter into and perform their obligations under an underwriting agreement in customary form
with the managing underwriter selected for such underwriting by the Company. Notwithstanding any other provision of this Section 1.5, if the managing underwriter determines that marketing factors require a limitation of the number of shares to
be underwritten, the managing underwriter may (subject to the limitations set forth below) exclude Registrable Securities from, or limit the number of Registrable Securities to be included in, the registration and underwriting. The Company shall so
advise all holders of securities requesting registration, and the number of shares of securities that are entitled to be included in the registration and underwriting shall be allocated as set forth in Section 1.13. If any person who has
requested inclusion in such registration as provided above disapproves of the terms of the underwriting, such person shall be excluded therefrom by written notice delivered by the Company or the managing underwriter. Any Registrable

  

 10 








 
Securities and/or other securities so excluded or withdrawn shall also be withdrawn from registration. 

(c)        Right to Terminate Registration.  The Company shall have the right
to terminate or withdraw any registration initiated by it under this Section 1.5 prior to the effectiveness of such registration, whether or not any Holder has elected to include securities in such registration. 

1.6        Registration Procedures.  In the case of each registration,
qualification, or compliance effected by the Company pursuant to this Section 1, 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 and,
at its expense, the Company will use its 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 for at least one hundred eighty (180) days or until the distribution
described in the registration statement has been completed, whichever occurs first; provided, however, that (i) such 180-day period shall be extended for a period of time equal to the period the Holder refrains from selling any
securities included in such registration at the request of an underwriter of common stock or other securities of the Company, and (ii) in the case of any registration of Registrable Securities on Form S-3 which are intended to be offered on a
continuous or delayed basis, such 180-day period shall be extended, if necessary, to keep the registration statement effective until all such Registrable Securities are sold, provided that Rule 415, or any successor rule under the Securities Act,
permits an offering on a continuous or delayed basis, and provided further that 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
(A) includes any prospectus required by Section 10(a)(3) of the Securities Act or (B) 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 (A) and (B) above shall be contained in periodic reports filed pursuant to Section 13 or 15(d) of the Exchange Act in the registration statement; 

(b)        Furnish to the Holders participating in such registration 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; 
 (c)        Prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection with such registration statements 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; 
 (d)        Notify each seller of Registrable Securities
covered by such registration statement at any time when a prospectus relating thereto is required to be delivered under the Securities Act of 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 
  

 11 








 
material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading or incomplete in the light of the circumstances then
existing, and at the request of any such seller, prepare and furnish to such seller 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
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 the light of the
circumstances then existing; 
 (e)        Use its 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 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; 

(f)        Cause all such Registrable Securities to be listed on each securities exchange on
which similar securities issued by the Company are then listed; 
 (g)        Provide a
transfer agent and registrar for all Registrable Securities and a CUSIP number for all such Registrable Securities, in each case not later than the effective date of such registration; 

(h)        Use its best efforts to furnish, at the request of any Holder requesting registration
of Registrable Securities pursuant to this Section 1, on the date that such Registrable Securities are delivered to the underwriters for sale in connection with a registration pursuant to this Section 1, if such securities are being sold
through underwriters, or, if such securities are not being sold through underwriters, on the date that the registration statement with respect to such securities becomes effective, (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 Holders requesting registration of Registrable
Securities 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 (to the extent the then-applicable standards of professional conduct permit said letter to be addressed to the Holders);

 (i)        In connection with any underwritten offering pursuant to a registration
statement filed pursuant to this Agreement, enter into and perform an underwriting agreement in form reasonably necessary to effect the offer and sale of Registrable Securities, provided such underwriting agreement contains reasonable and customary
provisions, and provided further that each Holder participating in such underwriting shall also enter into and perform its obligations under such an agreement; and 

(j)        Make available for inspection by any underwriter participating in any disposition
pursuant to such registration statement, and any attorney or accountant retained by any such underwriter (collectively, the “Inspectors”), all pertinent 

 

 12 








 
records and documents of the Company (collectively, the “Records”) as shall be reasonably necessary to enable them to exercise any applicable due diligence responsibility,
and cause the Company’s officers, directors, and employees to use good faith to supply such information as is reasonably requested by any such Inspector to meet such responsibilities. Records which the Company determines, in good faith, to be
confidential shall not be disclosed by the Inspectors unless (i) the disclosure of such Records is necessary to avoid or correct a misstatement or omission in the registration statement or (ii) the release of such Records is ordered
pursuant to a subpoena or other order from a court of competent jurisdiction. The relevant Inspector will, upon learning that disclosure of such Records is sought in a court of competent jurisdiction, give notice to the Company and allow the
Company, at the Company’s expense, to undertake appropriate action to prevent disclosure of the Records deemed confidential. 

1.7        Information by Holder.  The Holder or Holders of Registrable
Securities included in any registration shall furnish to the Company such information regarding such Holder or Holders, the Registrable Securities held by them, and the distribution proposed by such Holder or Holders as the Company may request in
writing and as shall be required in connection with any registration, qualification, or compliance referred to in this Section 1, and the refusal to furnish such information by any Holder or Holder shall relieve the Company of its obligations
in this Section 1 with respect to such Holder or Holders. Furthermore, the Company shall have no obligation with respect to any registration requested pursuant to Section 1.3 or Section 1.4 of this Agreement if, as a result of the
application of the preceding sentence, the number of shares or the anticipated aggregate offering price of the Registrable Securities to be included in the registration does not equal or exceed the number of shares or the anticipated aggregate
offering price required to originally trigger the Company’s obligation to initiate such registration as specified in the definition of “Initiating Holders” or “Form S-3 Initiating Holders,” whichever is applicable.

 1.8        Indemnification. 

(a)        To the extent permitted by law, the Company will indemnify and hold harmless each
Holder, each of its officers, directors, members, partners, legal counsel, and accountants, and each person controlling such 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 1, 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, proceedings, or settlements in respect thereof) arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained or incorporated by reference in any registration statement,
prospectus, offering circular, or other document (including any related registration statement, notification, or the like), 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, in light of the circumstances in which they were made, not misleading, or any violation (or alleged violation)
by the Company of the Securities Act or Exchange Act, or any applicable state securities law, or any rule or regulation promulgated thereunder applicable to the Company in connection with any such registration, qualification, or compliance, and the
Company will reimburse each such Holder, each of its officers, directors, members, partners, legal counsel, and accountants, and 
  

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each person controlling such Holder, each such underwriter and each person who controls any such underwriter, for any legal and any other expenses reasonably incurred in connection with
investigating, preparing, defending, or settling any such claim, loss, damage, liability, or action, as such expenses are incurred, provided that the Company will not be liable 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 such Holder, controlling
person, or underwriter and stated to be specifically for use therein. It is agreed that the indemnity agreement contained in this Section 1.8 shall not apply to amounts paid in settlement of any such loss, claim, damage, liability, or action if
such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld or delayed). 

(b)        To the extent permitted by law, each Holder will, if Registrable Securities held by
such 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, partners, legal counsel, and accountants, and 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 such Holder, each of their officers,
directors, members and partners, and each person controlling such 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 or incorporated by reference 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 reimburse the Company and such Holders, directors, officers, members, partners, legal counsel, and accountants, persons, underwriters,
or control persons for any legal or any other expenses reasonably incurred in connection with investigating or defending any such claim, loss, damage, liability, or action, as such expenses are incurred, 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 by such Holder and stated to be specifically for use therein, provided, however, that the obligations of such Holder hereunder shall not apply to amounts paid in settlement of any such claims, losses, damages, or liabilities
(or actions in respect thereof) if such settlement is effected without the consent of such Holder (which consent shall not be unreasonably withheld or delayed); and provided that that in no event shall any indemnity under this Section 1.8 (when
combined with any contribution under Section 1.8(d)) exceed the net proceeds received by such Holder in such offering. 

(c)        Each party entitled to indemnification under this Section 1.8 (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, provided further,

  

 14 








 
however, that an Indemnified Party (together with all other Indemnified Parties that may be represented without conflict by one counsel) shall have the right to retain one separate counsel, with
the reasonable fees and expenses to be paid by the Indemnifying Party, if representation of such Indemnified Party by the counsel retained by the Indemnifying Party would be inappropriate due to actual or potential differing interests between such
Indemnified Party and any other party represented by such counsel in such proceeding; 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 1 unless (and only to the extent) the failure to give such notice is materially prejudicial to an Indemnifying Party’s ability to defend such action. No Indemnifying Party, in the defense of any such claim or 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
release from all liability in respect to such claim or litigation. Each Indemnified Party shall furnish such information regarding itself or the claim in question as an Indemnifying Party may reasonably request in writing and as shall be reasonably
required in connection with the defense of such claim and litigation resulting therefrom. 

(d)        If the indemnification provided for in this Section 1.8 is held by a court of
competent jurisdiction to be unavailable to an Indemnified Party with respect to any claim, loss, damage, liability, or expense 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 expense 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 statements or omissions that resulted in such claim, loss, damage, liability, or expense, 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 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 1.8 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
no event shall any contribution by a Holder under this Section 1.8 (when combined with any indemnification under Section 1.8(b)) exceed the net proceeds received by such Holder in such offering. 

(e)        The amount paid or payable by an Indemnified Party as a result of the losses, claims,
damages, and liabilities referred to above in this Section 1.8 shall be deemed to include any legal or other expenses reasonably incurred by such Indemnified Party in connection with investigating or defending any such action or claim, subject
to the provisions of Section 1.8(c). No person guilty of fraudulent misrepresentation (within the meaning of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.

 (f)        Notwithstanding the foregoing, to the extent that the provisions on
indemnification and contribution contained in the underwriting agreement entered 
  

 15 








 
into in connection with the underwritten public offering are in conflict with the foregoing provisions, the provisions in the underwriting agreement shall control. 

(g)        The obligations of the Company and Holders under this Section 1.8 shall survive
the completion of any offering of Registrable Securities in a registration statement. 

1.9        Expenses of Registration.  All Registration Expenses shall be borne
by the Company; provided, however, that if the Holders bear the Registration Expenses for any registration proceeding begun pursuant to Section 1.3 and subsequently withdrawn by the Holders registering shares therein, such
registration proceeding shall not be counted as a requested registration pursuant to Section 1.3. Furthermore, in the event that a withdrawal by the Holders is based upon material adverse information relating to the Company that is different
from the information known or reasonably available (upon request from the Company or otherwise) to the Holders requesting registration at the time of their request for registration under Section 1.3, such registration proceeding shall not be
counted as a requested registration pursuant to Section 1.3, even though the Holders do not bear the Registration Expenses for such registration. All Selling Expenses relating to securities registered on behalf of the Holders shall be borne by
the holders of the registered securities included in such registration pro rata on the basis of the number of shares so registered. 

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

(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); and 

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

(d)        Take such action, including the voluntary registration of its Common Stock under
Section 12 of the Exchange Act, as is necessary to enable the Holders to utilize Form S-3 for the sale of their Registrable Securities, such action to be taken as soon as 

 

 16 








 
practicable after the end of the fiscal year in which the first registration statement filed by the Company for the offering of its securities to the general public is declared effective.

 1.11        Transfer of Registration Rights.  The rights to cause
the Company to register securities granted to any party hereto under Section 1 may be assigned by a Holder only to a transferee or assignee of the lesser of (i) all of such Holder’s Registrable Securities and (ii) Eighty-Three
Thousand Three Hundred Thirty-Three (83,333) shares of Registrable Securities (as appropriately adjusted for stock splits and the like) or, with respect to Registrable Securities that are Series C Preferred Stock, Series D Preferred Stock,
Series E Preferred Stock or shares of Common Stock issuable upon conversion of Series C Preferred Stock, Series D Preferred Stock or Series E Preferred Stock, Sixteen Thousand Six Hundred Sixty-Seven (16,667) shares (as appropriately adjusted
for stock splits and the like), provided that the Company is given written notice at the time of or promptly after said assignment, stating the name and address of the transferee or assignee and identifying the securities with respect to
which such registration rights are being assigned, and, provided further, that the assignee of such rights agree in writing to be bound by the terms and conditions of this Agreement. Notwithstanding the foregoing, no such minimum share
assignment requirement shall be necessary for an assignment by a Holder which is (A) a partnership to its partners or retired partners in accordance with partnership interests, (B) a limited liability company to its members or former
members in accordance with their interest in the limited liability company, (C) a corporation to its shareholders in accordance with their interests in the corporation, (D) to the Holder’s family member or trust for the benefit of an
individual Holder, or (E) to any Affiliated Entity. 
 1.12        Limitations
on Subsequent Registration Rights.  From and after the date hereof, the Company shall not, without the prior written consent of Holders who in the aggregate hold more than sixty percent (60%) of the Common Stock then issued or
issuable upon conversion of the Shares, enter into any agreement granting any holder or prospective holder of any securities of the Company registration rights the terms of which are more favorable than the registration rights granted to holders of
Shares hereunder. 
 1.13        Procedure for Underwriter
Cutbacks.  In any circumstance in which all of the Registrable Securities and other shares of Common Stock of the Company with registration rights that have not been expressly subordinated to the rights under this Agreement (the
“Other Shares”) requested to be included in a registration pursuant to Section 1.5 on behalf of Holders or Other Stockholders cannot be so included as a result of limitations of the aggregate number of shares of
Registrable Securities and Other Shares that may be so included, the number of shares of Registrable Securities and Other Shares that may be so included shall be allocated among the Holders and Other Stockholders requesting inclusion of shares pro
rata based upon the total number of Registrable Securities or Other Shares held by such Holders and Other Stockholders, respectively; provided, however, that such allocation shall not operate to reduce the aggregate number of
Registrable Securities or Other Shares to be included in such registration if any Holder or Other Stockholder does not request inclusion of the maximum number of shares of Registrable Securities or Other Shares allocated to such Holder or Other
Stockholder pursuant to the above-described procedure, in which case the remaining portion of his allocation shall be reallocated among those requesting Holders and Other Stockholders whose allocations did not satisfy their requests pro rata on the
basis of total number of shares of 
  

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Registrable Securities and Other Shares held by such Holders and Other Stockholders, and this procedure shall be repeated until all shares of Registrable Securities and Other Shares which may be
included in the registration on behalf of the Holders and Other Stockholders have been so allocated. The Company shall not limit the number of shares of Registrable Securities to be included in a registration pursuant to Section 1.5 in order to
include shares of stock issued to founders of the Company or to employees, officers, directors, or consultants pursuant to the Company’s equity incentive plans, or to otherwise hold shares of any other stockholder that are not Other Shares.
Notwithstanding the foregoing, the number of shares of Registrable Securities included in a registration pursuant to Section 1.5 of this Agreement shall not be reduced below twenty five percent (25%) of the securities included in such
registration unless such offering is the Qualified IPO. 
 1.14        Standoff
Agreement.  Each Holder agrees in connection with the Company’s IPO, upon request of the underwriters managing such IPO, not to sell, make any short sale of, loan, pledge or otherwise hypothecate or encumber, grant any option for
the purchase of, or otherwise dispose of any Registrable Securities (other than those included in the registration) without the prior written consent of such underwriters, as the case may be, for such period of time (not to exceed one hundred eighty
(180) days from the effective date of such registration (or such longer period, not to exceed thirty-four (34) days after the expiration of the 180-day period as the underwriters or the Company shall request in order to facilitate
compliance with FINRA Rule 2711) as may be requested by such managing underwriters, provided that all directors, officers and holders of two percent (2%) or more of the Company’s outstanding capital stock are similarly bound. The
Company agrees not to (and shall not permit the underwriter to) release any other stockholder from any lock up agreement or covenant unless the Holders are also released on a proportionate basis relative to their respective ownership of securities.
The obligations described in this Section 1.14 shall not apply 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
transaction on Form S-4 or similar forms that may be promulgated in the future. 

1.15        Termination of Rights.  The rights of any particular Holder to
cause the Company to register securities under Sections 1.3, 1.4, and 1.5 shall terminate with respect to such Holder upon the earlier to occur of (i) the five (5) year anniversary of the effective date of the IPO or (ii) when all
Registrable Securities held by such Holder may be sold immediately pursuant to Rule 144. 
 2.    Right
of First Refusal. 
 2.1         Right of First Refusal. 

(a)        Right of First Refusal.  Subject to the terms and conditions
contained in this Section 2.1, the Company hereby grants to each Major Investor the right of first refusal to purchase their Pro Rata Portion of any New Securities which the Company may, from time to time, propose to issue and sell, provided,
however, with respect to each Major Investor, that such Major Investor continues to hold any Shares or Common Stock issued upon conversion thereof. 
  

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 (b)        Notice of Right.  In
the event the Company proposes to undertake an issuance of New Securities, it shall give each Major Investor written notice of its intention, describing the type of New Securities and the price and terms upon which the Company proposes to issue the
same. Each Major Investor shall have twenty (20) days from the date of delivery of any such notice to agree to purchase up to such Major Investor’s Pro Rata Portion of such New Securities, for the price and upon the terms specified in the
notice, by delivering written notice to the Company and stating therein the quantity of New Securities to be purchased. 

(c)        Right of Over-Allotment.  In the event that the Major Investors fail
to fully exercise the right of first refusal within such twenty- (20-) day period, each Major Investor fully exercising its right of first refusal shall be offered the right to purchase up to the remaining portion that the Major Investors failed to
exercise (the “Over-Allotment Shares”); provided, that if the Major Investors with such over-allotment right exercise such right for an aggregate number in excess of such Over-Allotment Shares, the Over-Allotment Shares shall
be allocated among them in accordance with their respective Pro Rata Portions (or in such other manner as such electing Major Investors agree). The Company will promptly notify those Major Investors fully exercising their rights of first refusal, in
writing, of the availability of Over-Allotment Shares, and each of the fully-exercising Major Investors shall have ten (10) days from the date of receipt of any such notice to agree to purchase up to such Over-Allotment Shares (subject to the
proviso in the preceding sentence). 
 (d)        Lapse and Reinstatement of
Right.  The Company shall have sixty (60) days following the twenty- (20-) day period described in Section 2.1(b) and the additional ten- (10-) day period described in Section 2.1(c) to sell or enter into an agreement
(pursuant to which the sale of New Securities covered thereby shall be closed, if at all, within thirty (30) days from the date of said agreement) to sell the New Securities with respect to which the Major Investors’ right of first refusal
was not exercised, at a price and upon terms no more favorable to the purchasers of such securities than specified in the Company’s notice. In the event the Company has not sold the New Securities or entered into an agreement to sell the New
Securities within said sixty- (60-) day period (or sold and issued New Securities in accordance with the foregoing within thirty (30) days from the date of said agreement), the Company shall not thereafter issue or sell any New Securities
without first offering such securities to the Major Investors in the manner provided above. 

2.2        Assignment of Right of First Refusal.  The right of first refusal
granted hereunder may not be assigned or transferred, except that: (i) such right is assignable by each Major Investor to one or more Affiliated Entities, or to any wholly-owned subsidiary or parent of, or to any corporation or entity that is,
within the meaning of the Securities Act, controlling, controlled by, or under common control with, any such Investor; and (ii) such right is assignable between and among any Major Investors. 

2.3        Termination of Right of First Refusal.  The right of first refusal
granted under Section 2.1 of this Agreement shall expire upon the earlier of, and shall not be applicable to, (i) a Qualified IPO, or (ii) a Liquidation (as defined in the Restated Certificate). 

 

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 3.    Affirmative Covenants of the Company.  The
Company hereby covenants and agrees, so long as any Major Investor holds Registrable Securities, as follows: 

3.1        Financial Information.  The Company will furnish to such Major
Investor the following reports: 
 (a)        As soon as practicable after the end of
each fiscal year, and in any event within one hundred twenty (120) days thereafter (or such longer period as is approved by the Board, including each of the Preferred Directors), audited consolidated balance sheets of the Company and its
subsidiaries, if any, as of the end of such fiscal year, and consolidated statements of income and cash flows of the Company and its subsidiaries, if any, for such year, prepared in accordance with generally accepted accounting principles
consistently applied and setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail and certified by independent public accountants of national standing selected by the Company; 

(b)        As soon as practicable, but in any event within forty-five (45) days after the
end of each quarter of each fiscal year of the Company, unaudited consolidated balance sheets of the Company and its subsidiaries, if any, as of the end of such quarterly period, and consolidated statements of income and cash flows of the Company
and its subsidiaries, if any, for such quarterly period, prepared in accordance with generally accepted accounting principles consistently applied and setting forth in each case in comparative form the figures for the corresponding quarterly periods
of the previous fiscal year and the figures projected by the Company’s annual budget, subject to changes resulting from normal year-end audit adjustments, all in reasonable detail and certified by the principal financial or accounting officer
of the Company, except such financial statements need not contain the notes required by generally accepted accounting principles; 

(c)        As soon as practicable after the end of each calendar month, and in any event within
thirty (30) days thereafter, consolidated balance sheets of the Company and its subsidiaries, if any, as of the end of each calendar month setting forth in comparative form the results projected by the Company’s annual budget, and
consolidated statements of income and cash flow for such period and for the current fiscal year to date; 

(d)        As soon as practicable after the end of each fiscal quarter, a statement showing the
number of shares of each class and series of capital stock and securities convertible into or exercisable for shares of capital stock outstanding at the end of the quarterly period, and the number of common shares issuable upon conversion or
exercise of any outstanding securities convertible or exercisable for common shares and the exchange ratio or exercise price applicable thereto, all in sufficient detail as to permit the Major Investor to calculate its percentage equity ownership in
the Company. 
 3.2        Operating Plan and Budget.  As soon as
practicable upon approval or adoption by the Board, and in any event at least thirty (30) days prior to the end of each fiscal year, the Company will furnish the Major Investors with the Company’s budget and operating plan (including
projected balance sheets and profit and loss and cash flow statements, forecasts 
  

 20 








 
of revenues, expenses, significant projected milestones and projected cash position on a month-to-month basis) for the upcoming fiscal year. 

3.3        Inspection.  The Company shall permit each Major Investor, at such
Major Investor’s expense and upon reasonable notice given to the Company to visit and inspect the Company’s properties, to examine its books of account and other records (and make copies and take extracts therefrom), and to discuss the
Company’s affairs, finances and accounts with its officers, all at such reasonable times as may be requested by such Major Investor. 

3.4        Stock Vesting.  All stock and stock options issued to employees,
directors, consultants and other service providers after the date of this Agreement will be subject to vesting at a rate of 25% one year after the vesting commencement date, with monthly vesting thereafter for the next thirty six (36) months,
unless otherwise approved by the Board. Each agreement pursuant to which such stock or stock option is issued or granted shall include a repurchase option such that, upon termination of the employee, director, consultant or other service provider,
as the case may be, whether such termination be with or without cause, the Company or its assignee (to the extent permissible under applicable securities laws) retains the option to repurchase any unvested shares held by such employee, director,
consultant or other service provider at the price such employee, director, consultant or other service provider paid for the shares. 

3.5        Key Man Life Insurance.  The Company shall maintain a “key
person” term life insurance policy, secured from a financially sound and reputable insurer, which names the Company as sole beneficiary, on such executives and on such terms as are reasonably acceptable to the Board. 

3.6        Directors’ & Officers’ Liability.  The Company
shall maintain a policy or policies of directors’ and officers’ liability insurance (“D&O Insurance”) on terms and conditions reasonably acceptable to the Company and the Holders who in the aggregate hold more
than sixty percent (60%) of the Common Stock then issued or issuable upon conversion of the Shares. The Company shall keep such D&O Insurance in place so long as any of the Major Investors’ designees serve on the Board. In addition,
the Company’s Certificate of Incorporation and Bylaws shall provide for (a) elimination of the liability of directors to the maximum extent permitted by law and (b) indemnification of directors for acts on behalf of the Company to the
maximum extent permitted by law. 
 3.7        Board Committees.  The
Audit and Compensation Committees of the Board shall be composed of non-management directors. The Audit Committee shall include at least one Series A Director, the Series C Director and one Series D Director (each, as defined in the Restated
Certificate), and the Compensation Committee shall include at least one Series A Director, the Series B Director, the Series C Director and one Series D Director (as defined in the Restated Certificate). The Compensation Committee shall be
responsible for reviewing and approving all option grants. 
 3.8        Actions
Requiring Board Approval.  So long as shares of Preferred Stock remain outstanding, the Company will not, without the approval of the Board (and without 

 

 21 








 
complying with any other approval required by the Company’s certificate of incorporation, if any): 

(a)        make any loan or advance to, or own any stock or other securities of, any subsidiary
or other corporation, partnership, or other entity unless it is wholly-owned by the Company; 

(b)        make any loan or advance to any person, including any employee or director, except
advances and similar expenditures in the ordinary course of business or under the terms of a employee stock or option plan approved by the Board; 

(c)        guarantee any indebtedness except for trade accounts of the Company or any subsidiary
arising in the ordinary course of business; 
 (d)        make any investment other
than investments pursuant to a Board-approved investment policy, including in prime commercial paper, money market funds, certificates of deposit in any United States bank having a net worth in excess of $100,000,000 or obligations issued or
guaranteed by the United States of America, in each case having a maturity not in excess of two years; 

(e)        incur any aggregate indebtedness in excess of $500,000 that is not already included
in a Board-approved budget, other than trade credit incurred in the ordinary course of business; 

(f)        enter into or be a party to any transaction with any director, officer or employee of
the Company or any “associate” (as defined in Rule 12b-2 promulgated under the Exchange Act) of any such person except compensation paid in the ordinary course of business or transactions resulting in payments to or by the Company in an
amount less than $60,000 per year; 
 (g)        hire, fire or change the compensation
of the executive officers, including approving any equity incentive compensation or any severance or change of control arrangements; 

(h)        change the principal business of the Company, enter new lines of business or exit the
current line of business; or 
 (i)        sell, transfer, license, pledge or encumber
technology or intellectual property, other than licenses granted in the ordinary course of business. 

3.9        Actions Requiring a Waiver of the Preferred.  So long as shares of
Preferred Stock remain outstanding, unless waived by the holders of at least sixty percent (60%) of the then outstanding Preferred Stock, the Company will: 

(a)        maintain its corporate existence and good standing; 

(b)        pay all taxes when due, including withholding taxes, except for such taxes being
contested in good faith by appropriate proceedings; 
  

 22 








 (c)        promptly provide each Major Investor
with written notice of any claim made or threatened in writing by any third party with potential liability in excess of $250,000; and 

(d)        maintain commercially reasonable general liability, casualty and product liability
insurance. 
 3.10        Company Confidential
Information.  Notwithstanding anything to the contrary in this Section 3, no Holder by reason of this Agreement shall have access to any trade secrets or classified information of the Company. Each Holder agrees to hold in
confidence and trust and not to misuse or disclose any confidential information provided pursuant to this Section 3. The Company shall not be required to comply with this Section 3 in respect of any Holder whom the Company reasonably
determines to be a competitor or an officer, employee, director, or greater than ten percent (10%) stockholder of a competitor. Notwithstanding the foregoing, no information which is confidential or proprietary in nature shall be disclosed to
Genentech, Inc. (“Genentech”) pursuant to this Agreement. Any confidential or proprietary information disclosed to Genentech shall be disclosed pursuant to a separate confidential disclosure agreement signed by the Company
and Genentech. 
 3.11        Observer Rights. 

(a)        Until August 10, 2010, provided Essex or its affiliate continues to hold shares
of Preferred Stock, the Company shall allow one individual designated by Essex or its affiliate to attend all meetings of its Board in a nonvoting observer capacity (the “Essex Representative”), and, in connection therewith,
shall give the Essex Representative copies of all notices, minutes, consents and other materials that it provides to its directors at the same time and in the same manner as provided to such directors. The Essex Representative shall agree to hold in
confidence and trust and to act in a fiduciary manner with respect to all such materials and all information it obtains at each such meeting and the Company reserves the right to withhold any materials and information and to exclude the Essex
Representative from any meeting or portion thereof if the Company or the Board believes that such withholding or exclusion is reasonably necessary (i) to preserve the attorney-client privilege, (ii) to protect highly confidential and
proprietary information, (iii) to preserve any fiduciary obligations of the Board, (iv) to prevent any conflict of interest, (v) to protect information regarding potential or actual strategic investments or partnerships with a
commercial entity or (vi) for other similar reasons. The Company shall not be required to comply with the provisions of this Section 3.11(a) if Essex or the Essex Representative becomes a holder of more than five percent (5%) of the
outstanding securities of a competitor of the Company or if the Essex Representative becomes an officer, employee or director of a competitor of the Company. 

(b)        As long as OrbiMed or its affiliate continues to hold at least fifty percent
(50%) of the Series D Preferred Stock issued by the Company to OrbiMed pursuant to that certain Series D Preferred Stock Purchase Agreement, dated as of August 12, 2009, among the Company and the entities and individuals listed on Exhibit
A thereto, as amended, the Company shall allow one individual designated by OrbiMed or its affiliate to attend all meetings of its Board in a nonvoting observer capacity (the “OrbiMed Representative”), and, in connection
therewith, shall give the OrbiMed Representative copies of all notices, minutes, 
  

 23 








 
consents and other materials that it provides to its directors at the same time and in the same manner as provided to such directors. The OrbiMed Representative shall agree to hold in confidence
and trust and to act in a fiduciary manner with respect to all such materials and all information it obtains at each such meeting and the Company reserves the right to withhold any materials and information and to exclude the OrbiMed Representative
from any meeting or portion thereof if the Company or the Board believes that such withholding or exclusion is reasonably necessary (i) to preserve the attorney-client privilege, (ii) to protect highly confidential and proprietary
information, (iii) to preserve any fiduciary obligations of the Board, (iv) to prevent any conflict of interest, (v) to protect information regarding potential or actual strategic investments or partnerships with a commercial entity
or (vi) for other similar reasons. The Company shall not be required to comply with the provisions of this Section 3.11(b) if OrbiMed or the OrbiMed Representative becomes a holder of more than five percent (5%) of the outstanding
securities of a competitor of the Company or if the OrbiMed Representative becomes an officer, employee or director of a competitor of the Company. 

(c)        As long as Highland continues to hold at least fifty percent (50%) of the Series
C Preferred held by Highland at the Initial Closing (as defined in the Purchase Agreement), the Company shall allow one individual designated by Highland to attend all meetings of its Board in a nonvoting observer capacity (the “Highland
Representative”), and, in connection therewith, shall give the Highland Representative copies of all notices, minutes, consents and other materials that it provides to its directors at the same time and in the same manner as provided to
such directors. The Highland Representative shall agree to hold in confidence and trust and to act in a fiduciary manner with respect to all such materials and all information it obtains at each such meeting and the Company reserves the right to
withhold any materials and information and to exclude the Highland Representative from any meeting or portion thereof if the Company or the Board believes that such withholding or exclusion is reasonably necessary (i) to preserve the
attorney-client privilege, (ii) to protect highly confidential and proprietary information, (iii) to preserve any fiduciary obligations of the Board, (iv) to prevent any conflict of interest, (v) to protect information regarding
potential or actual strategic investments or partnerships with a commercial entity or (vi) for other similar reasons. The Company shall not be required to comply with the provisions of this Section 3.11(c) if Highland or the Highland
Representative becomes a holder of more than five percent (5%) of the outstanding securities of a competitor of the Company or if the Highland Representative becomes an officer, employee or director of a competitor of the Company. 

(d)        As long as Sands or its affiliates continues to hold at least fifty percent
(50%) of the Series E Preferred Stock issued by the Company to Sands pursuant to the Purchase Agreement, the Company shall allow one individual designated by Sands or its affiliates to attend all meetings of its Board in a nonvoting observer
capacity (the “Sands Representative”), and, in connection therewith, shall give the Sands Representative copies of all notices, minutes, consents and other materials that it provides to its directors at the same time and in
the same manner as provided to such directors. The Sands Representative shall agree to hold in confidence and trust and to act in a fiduciary manner with respect to all such materials and all information it obtains at each such meeting and the
Company reserves the right to withhold any materials and information and to exclude the Sands Representative from any meeting or portion thereof if the Company or the Board believes that such withholding or exclusion is reasonably necessary
(i) to preserve the attorney-client privilege, (ii) to protect 
  

 24 








 
highly confidential and proprietary information, (iii) to preserve any fiduciary obligations of the Board, (iv) to prevent any conflict of interest, (v) to protect information
regarding potential or actual strategic investments or partnerships with a commercial entity or (vi) for other similar reasons. The Company shall not be required to comply with the provisions of this Section 3.11(d) if Sands or the Sands
Representative becomes a holder of more than five percent (5%) of the outstanding securities of a competitor of the Company or if the Sands Representative becomes an officer, employee or director of a competitor of the Company. 

3.12        Debt Offerings.  If the Company elects to raise capital through a
debt offering, including the issuance of bonds or establishment of a loan, the Company shall provide written notice to Highland of the Company’s decision to raise capital in this manner and Highland shall have thirty (30) days from
delivery of such notice to elect to provide financing for the Company; provided, however, that the financing shall be on terms acceptable to the Company in the Company’s sole discretion. 

3.13        Termination of Covenants.  The covenants set forth in this
Section 3 shall terminate and be of no further force or effect after the earlier of (i) the date on which the Company is required to file reports with the Commission pursuant to Section 13 or 15(d) of the Exchange Act and
(ii) the occurrence of any of the events specified in Section 2.3 hereof; provided, that the covenants set forth in Section 3.6 shall not terminate so long as any Major Investor’s designee serves on the Board. 

4.    Acknowledgement.  The Company hereby acknowledges that one (1) or more of the directors
nominated to serve on the Board by the Investors (each, a “Fund Director”) may have certain rights to indemnification, advancement of expenses and/or insurance provided by one or more of the Investors and certain of their
affiliates (collectively, the “Fund Indemnitors”). The Company hereby agrees (a) that it is the indemnitor of first resort (that is, its obligations to any such Fund Director are primary and any obligation of the Fund
Indemnitors to advance expenses or to provide indemnification for the same expenses or liabilities incurred by such Fund Director are secondary), (b) that it shall be required to advance the full amount of expenses incurred by such Fund
Director and shall be liable for the full amount of all expenses, judgments, penalties, fines and amounts paid in settlement by or on behalf of any such Fund Director to the extent legally permitted and as required by the Restated Certificate or
Bylaws of the Company (or any agreement between the Company and such Fund Director), without regard to any rights such Fund Director may have against the Fund Indemnitors, and (c) that it irrevocably waives, relinquishes and releases the Fund
Indemnitors from any and all claims against the Fund Indemnitors for contribution, subrogation or any other recovery of any kind in respect thereof. The Company further agrees that no advancement or payment by the Fund Indemnitors on behalf of any
such Fund Director with respect to any claim for which such Fund Director has sought indemnification from the Company shall affect the foregoing and the Fund Indemnitors shall have a right of contribution and/or be subrogated to the extent of such
advancement or payment to all of the rights of recovery of such Fund Director against the Company. 

5.    Miscellaneous. 
  


 25 








 5.1        Governing Law.  This
Agreement shall be governed in all respects by the laws of the State of California without regard to choice of laws or conflict of laws provisions thereof. 

5.2        Successors and Assigns.  Except as otherwise provided herein, the
provisions hereof shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors, and administrators of the parties hereto. 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 by this Agreement. 

5.3        Entire Agreement.  This Agreement and the other documents delivered
pursuant hereto constitute the full and entire understanding and agreement among the parties with regard to the subjects hereof and thereof. Subject to the provisions of Section 5.10 below, neither this Agreement nor any term hereof may be
amended, waived, discharged or terminated other than by a written instrument signed by the party against whom enforcement of any such amendment, waiver, discharge or termination is sought, unless otherwise provided. 

5.4        Notices.  All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by registered mail, certified mail (return receipt requested) or by internationally recognized express courier (e.g., Federal Express), postage prepaid, or sent by fax or otherwise
delivered by hand or by messenger addressed: 
 (a)        If to an Investor, at the
Investor’s address or fax number set forth beneath such Investor’s signature hereto, or at such other address as such Investor shall have furnished to the Company; 

(b)        If to the Company, one copy should be sent to its address or fax number of record and
addressed to the attention of the President, or at such other address or fax number as the Company shall have furnished to the parties hereto, with copies to Alan C. Mendelson and Greg Chin, Latham & Watkins LLP, 140 Scott Drive, Menlo
Park, California 94025, (fax) 650-463-2600; and 
 (c)        Each such notice shall
for all purposes of this Agreement be treated as effective or having been given on the earliest to occur of the following: 

(i)        The date of personal delivery or delivery by messenger; 

(ii)        One (1) business day after transmission by fax, with confirmation of
transmission; 
 (iii)        One (1) business day after deposit with an
internationally recognized express courier for United States deliveries, or three (3) business days after such deposit for deliveries outside of the United States; or 
  


 26 








 (iv)        Three (3) business days after
deposit in a regularly maintained receptacle for the deposit of the United States mail be registered or certified mail (return receipt requested) for United States deliveries. 

5.5        Delays or Omissions.  No delay or omission to exercise any right,
power, or remedy accruing to any Holder upon any breach or default of the Company under this Agreement shall impair any such right, power, or remedy of such party, nor shall it be construed to be a waiver of any such breach or default, or an
acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit,
consent, or approval of any kind or character on the part of any party of any breach or default under this Agreement, or any waiver on the part of any party of any provisions or conditions of this Agreement, must be in writing and shall be effective
only to the extent specifically set forth in such writing or as provided in this Agreement. All remedies, either under this Agreement or by law or otherwise afforded to any party, shall be cumulative and not alternative. 

5.6        Dispute Resolution Fees.  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 disbursements in addition to any other relief to which such party may be entitled. 

5.7        Counterparts.  This Agreement may be executed in any number of
counterparts and signatures may be delivered by facsimile, each of which may be executed by less than all parties, each of which shall be enforceable against the parties actually executing such counterparts, and all of which together shall
constitute one instrument. 
 5.8        Severability.  If any
provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable, or void, portions of such provision, or such provision in its entirety, to the extent necessary, shall be severed from this
Agreement and the balance of this Agreement shall be enforceable in accordance with its terms. 

5.9        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. 

5.10        Amendment and Waiver.  Any provision of this Agreement may be
amended or waived (either generally or in a particular instance and either retroactively or prospectively) only with the written consent of the Company and a Holder or Holders holding, in the aggregate, more than sixty percent (60%) of the
outstanding shares of Common Stock issued or issuable pursuant to conversion of the Shares. Any amendment or waiver effected in accordance with this paragraph shall be binding upon each Holder and the Company; provided, however, that any amendment
that would materially and adversely affect the rights of, or impose additional material obligations on, any Holder or groups of Holders in a manner different than the other Holders shall not be effective against such affected Holder without the
written consent of such Holder. In addition, except as provided in Section 1.14 above, the Company may waive 
  

 27 








 
performance of any obligation owing to it, as to some or all of the Holders, or agree to accept alternatives to such performance, without obtaining the consent of any Holder. Notwithstanding
anything to the contrary herein, if the Company shall issue additional shares of Series E Preferred pursuant to the Purchase Agreement, any purchaser of such shares of Series E Preferred may become a party to this Agreement by delivering an executed
counterpart signature page to the Company and such purchaser shall be deemed an “Investor” hereunder, all without the requirement of any consent from any party hereunder or amendment or waiver hereof. 

5.11        Effect of Amendment or Waiver.  The Holders and their successors
and assigns acknowledge that by the operation of Section 5.10 hereof Holders holding more than sixty percent (60%) of the outstanding shares of Common Stock issued or issuable pursuant to conversion of the Shares, acting in conjunction
with the Company, will have the right and power to diminish or eliminate any or all rights pursuant to this Agreement. 

5.12        Termination of Prior Agreement.  The Prior Agreement is hereby
amended and restated in full to read as set forth herein. 

5.13        Waiver.  The Investors who were party to the Prior Agreement and
who were “Major Investors” as defined in the Prior Agreement hereby waive any and all right of first refusal and notice requirements set forth in Section 2.1 of the Prior Agreement with respect to the issuance of the Series E
Preferred pursuant to the Purchase Agreement. The Investors who were party to the Prior Agreement also hereby consent to the registration rights granted herein as required by Section 1.12 of the Prior Agreement. 

5.14        Rights of Investors.  Each party to this Agreement shall have the
absolute right to exercise or refrain from exercising any right or rights that such party may have by reason of this Agreement, including, without limitation, the right to consent to the waiver or modification of any obligation under this Agreement,
and such party shall not incur any liability to any other party or other holder of any securities of the Company as a result of exercising or refraining from exercising any such right or rights. 

5.15        Aggregation of Stock.  All shares of Preferred Stock and Common
Stock of the Company held or acquired by affiliated entities or persons (including those held by Affiliated Entities) shall be aggregated for the purpose of determining the availability of any rights under this Agreement. 

5.16        Specific Performance.  The rights of the parties under this
Agreement are unique and, accordingly, the parties shall, in addition to such other remedies as may be available to any of them at law or in equity, have the right to enforce their rights hereunder by actions for specific performance to the extent
permitted by law. 
 5.17        Jurisdiction and Venue; Waiver of Jury
Trial.  Any action, suit or proceeding arising out of or relating to this Agreement shall be brought in the state courts of the State of California located in Santa Clara County, or, if it has or can acquire jurisdiction, any Federal
court located in such State and County, and EACH OF THE PARTIES HERETO, AFTER CONSULTING WITH OR HAVING HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL, HEREBY KNOWINGLY, VOLUNTARILY, INTENTIONALLY AND 

 

 28 








 
IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF SUCH COURTS AND WAIVES TRIAL BY JURY, IN EACH CASE IN CONNECTION WITH ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT. Each of the parties hereto hereby irrevocably and unconditionally waives any objection to the laying of venue of any action, suit or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby in the
courts of the State of California or the United States of America, in each case located in Santa Clara County, and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such matter brought
in any such court has been brought in an inconvenient forum. 
 [THIS SPACE LEFT BLANK INTENTIONALLY] 

 

 29 








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

			
	COMPLETE GENOMICS, INC.
		
	By:	 	        /s/ Ajay Bansal
		 	Ajay Bansal
		 	Chief Financial Officer
		
		 	Company Address:
		
		 	2071 Stierlin Court
Mountain View, CA 94043



SIGNATURE PAGE TO THE FOURTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT 








							
	Investors:
	
	ESSEX WOODLANDS HEALTH VENTURES FUND VIII, L.P.
		
	By:	 	ESSEX WOODLANDS HEALTH VENTURES VIII, L.P.
Its General Partner
			
		 	By:	 	ESSEX WOODLANDS HEALTH VENTURES VIII, LLC
Its General Partner
				
		 		 	By:	 	        /s/ Jeff Himawan
		 		 	Name:	 	Jeff Himawan
		 		 	Title:	 	Manager
		
	Address:	 	335 Bryant Street
		
		 	Palo Alto, CA 94301
		 	Attn: Jeff Himawan
		
	Fax No:	 	(650) 327-9755
	
	ESSEX WOODLANDS HEALTH VENTURES FUND VIII-A, L.P.
		
	By:	 	ESSEX WOODLANDS HEALTH VENTURES VIII, L.P.
Its General Partner
			
		 	By:	 	ESSEX WOODLANDS HEALTH VENTURES VIII, LLC
Its General Partner
				
		 		 	By:	 	        /s/ Jeff Himawan
		 		 	Name:	 	 Jeff Himawan

		 		 	Title:	 	 Manager

		
	Address:	 	335 Bryant Street
		 	Palo Alto, CA 94301
		 	Attn: Jeff Himawan
	Fax No:	 	(650) 327-9755



SIGNATURE PAGE TO THE FOURTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT 








							
	Investors:
	
	ESSEX WOODLANDS HEALTH VENTURES FUND VIII-B, L.P.
		
	 By:
	 	ESSEX WOODLANDS HEALTH VENTURES VIII, L.P.
Its General Partner
			
		 	By:	 	ESSEX WOODLANDS HEALTH VENTURES VIII, LLC
Its General Partner
				
		 		 	By:	 	        /s/ Jeff Himawan
		 		 	Name:	 	Jeff Himawan
		 		 	Title:	 	Manager
		
	Address:	 	335 Bryant Street
		 	Palo Alto, CA 94301
		 	Attn: Jeff Himawan
	Fax No:	 	(650) 327-9755



SIGNATURE PAGE TO THE FOURTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT 








			
	Investors:
	
	ORBIMED ASSOCIATES III, LP
		
	By:	 	        /s/ Carl Gordon
		 	Carl Gordon
		 	General Partner
	
	Address: 767 Third Avenue,
30th Floor
New York, NY 10017
	
	CADUCEUS PRIVATE INVESTMENTS III, LP
		
	By:	 	        /s/ Carl Gordon
		 	Carl Gordon
		 	General Partner
	
	Address: 767 Third Avenue,
30th Floor
New York, NY
10017


 SIGNATURE PAGE TO THE FOURTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT 








			
	Investors:
	
	HIGHLAND CRUSADER OFFSHORE PARTNERS, L.P.
	By:	 	Highland Crusader Fund GP, L.P.
	Its:	 	General Partner
	By:	 	Highland Crusader GP, LLC.
	By:	 	Highland Capital Management, L.P.
	Its:	 	Sole Member
	By:	 	Strand Advisors, Inc.
	Its:	 	General Partner



			
	
	/s/ Michael S. Colvin
	Name:	 	Michael S. Colvin
	Title:	 	Secretary


  

			
	
	HIGHLAND CREDIT OPPORTUNITIES CDO L.P.
	By:	 	Highland Credit Opportunities CDO GP, L.P.
	Its:	 	General Partner
	By:	 	Highland Credit Opportunities CDO GP, LLC
	Its:	 	General Partner
	By:	 	Highland Capital Management, L.P.
	Its:	 	Sole Member
	By:	 	Strand Advisors, Inc.
	Its:	 	General Partner



			
	
	/s/ Michael S. Colvin
	Name:	 	Michael S. Colvin
	Title:	 	Secretary


 SIGNATURE PAGE TO THE FOURTH
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT 








			
	Investors:
	
	OVP Venture Partners VI, L.P.
	By:	 	OVMC VI, LLC, as General Partner
		
	By:	 	        /s/ Charles Waite
		 	Managing Member or Attorney In Fact



			
		
	Address:	 	1010 Market Street
		 	Kirkland WA 98033


  

			
	OVP VI Entrepreneurs Fund, L.P.
	By:	 	OVMC VI, LLC, as General Partner
		
	By:	 	        /s/ Charles Waite
		 	Managing Member or Attorney In Fact



			
		
	Address:	 	1010 Market Street
		 	Kirkland WA 98033


 SIGNATURE PAGE TO
THE FOURTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT 








			
	Investors:
	
	Enterprise Partners VI, LP
	By:      	 	Enterprise Management Partners VI, LLC as General Partner
	
	/s/ Andrew E. Senyei
	By:	 	Andrew E. Senyei
		 	Managing Director



			
		
	Address:	 	2223 Avenida de la Playa
		 	Suite 300
		 	La Jolla CA 92037


  

			
	Enterprise Partners V, LP
	By:      	 	Enterprise Management Partners VI, LLC as General Partner
	
	/s/ Andrew E. Senyei
	By:	 	Andrew E. Senyei
		 	Managing Director



			
		
	Address:	 	2223 Avenida de la Playa
		 	Suite 300
		 	La Jolla CA 92037


  

	
	Enterprise Partners Management, LLC
	
	/s/ Andrew E. Senyei
	Andrew E. Senyei
	As sole Director of Andrew E. Senyei, Inc.
	Manager of Enterprise Partners Management, LLC
	
	Address:
	2223 Avenida de la Playa
	La Jolla CA 92037


 SIGNATURE PAGE TO
THE FOURTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT 








			
	Investors:
	
	Prospect Venture Partners III, L.P.
	By:      	 	Prospect Management Co. III, L.L.C.
	Its:	 	General Partner
	
	/s/ Alex Barkas
	Name:	 	
	Title:	 	Managing Director
	
	Address:


 SIGNATURE PAGE TO
THE FOURTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT 








			
	Investors:
	
	SVC –CG, LLC
		
	By:	 	        /s/ Charles Preston
	Name:	 	Charles Preston
	Title:	 	
	
	Address:


 SIGNATURE PAGE TO
THE FOURTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT 








			
	Investors:
	
	The Mendelson Family Trust
	
	/s/ Alan C. Mendelson
	By:	 	Alan C. Mendelson
	Title:	 	Trustee


  

			
	VP Company Investments 2004, LLC
	
	/s/ Alan C. Mendelson
	By:	 	Alan Mendelson
	Title:	 	Managing Member
	Address:	 	555 West Fifth Street
		 	Suite 80
		 	Los Angeles, CA 90013


  

			
	VP Company Investments 2008, LLC
	
	/s/ Alan C. Mendelson
	By:	 	Alan Mendelson
	Title:	 	Managing Member
	Address:	 	555 West Fifth Street
		 	Suite 80
		 	Los Angeles, CA 90013


 SIGNATURE PAGE
TO THE FOURTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT 








	
	Investors:
	
	/s/ C. Thomas Caskey
	C. Thomas Caskey, M.D.


 SIGNATURE
PAGE TO THE FOURTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT 








	
	Founders:
	
	 THE CURSON FAMILY LIVING TRUST

DATED JULY 30, 2001

	
	        /s/ Robert John Curson
	Robert John Curson, Trustee
	
	DRMANAC FAMILY TRUST DATED JUNE 21, 2000
	
	        /s/ Radoje Drmanac
	Radoje Drmanac, Trustee
	
	CLIFFORD A. REID LIVING TRUST, DATED SEPTEMBER 3, 1997
	
	        /s/ Clifford A. Reid            

	Clifford A. Reid, Trustee


  

SIGNATURE PAGE TO THE FOURTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT 








	
	Founders:
	
	ROBERT JOHN CURSON
	
	        /s/ Robert John Curson
	
	RADOJE DRMANAC
	
	        /s/ Radoje Drmanac
	
	CLIFFORD A. REID
	
	        /s/ Clifford A. Reid



 
  
  

SIGNATURE PAGE TO THE FOURTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT 







 EXHIBIT A 

SCHEDULE OF INVESTORS 

Essex Woodlands Health Ventures Fund VIII, L.P. 

Essex Woodlands Health Ventures Fund VIII -A, L.P. 

Essex Woodlands Health Ventures Fund VIII-B, L.P. 

OrbiMed Associates III, LP 
 Caduceus Private
Investments III, LP 
 Highland Crusader Offshore Partners, L.P. 

Highland Credit Opportunities CDO, L.P. 
 OVP
Venture Partners VI, L.P. 
 OVP VI Entrepreneurs Fund L.P. 

Enterprise Partners VI, LP 
 Enterprise Partners
V, L.P. 
 Aquilo Partners, L.P. 

Prospect Venture Partners III, L.P. 
 The
Mendelson Family Trust 
 VP Company Investments 2004, LLC 

VP Company Investments 2008, LLC 
 Gold Hill
Venture Lending 03, LP 
 Genentech, Inc. 

C. Thomas Caskey, M.D. 
 Enterprise Partners
Management, LLC 
 SCV-CG, LLC 







 EXHIBIT B 

SCHEDULE OF FOUNDERS 

The Curson Family Living Trust Dated July 30, 2001 

Drmanac Family Trust Dated June 21, 2000 

Clifford A. Reid Living Trust, Dated September 3, 1997 

Robert John Curson 
 Radoje Drmanac 

Clifford A. Reid