<PAGE>
                                                                   Exhibit 4.4








                          OCULEX PHARMACEUTICALS, INC.

                            SERIES D PREFERRED STOCK

                            INVESTOR RIGHTS AGREEMENT


<PAGE>

                                TABLE OF CONTENTS
<TABLE>
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                                                                                                               PAGE

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SECTION 1  GENERAL................................................................................................1

         1.1      Definitions.....................................................................................1

SECTION 2  REGISTRATION; RESTRICTIONS ON TRANSFER.................................................................3

         2.1      Restrictions on Transfer........................................................................3

         2.2      Demand Registration.............................................................................4

         2.3      Piggyback Registrations.........................................................................5

         2.4      Form S-3 Registration...........................................................................6

         2.5      Expenses of Registration........................................................................7

         2.6      Obligations of the Company......................................................................8

         2.7      Termination of Registration Rights..............................................................9

         2.8      Delay of Registration; Furnishing Information...................................................9

         2.9      Indemnification.................................................................................9

         2.10     Assignment of Registration Rights..............................................................11

         2.11     Amendment of Registration Rights...............................................................12

         2.12     Limitation on Subsequent Registration Rights...................................................12

         2.13     "Market Stand-Off" Agreement; Agreement to Furnish Information.................................12

         2.14     Rule 144 Reporting.............................................................................13

SECTION 3  COVENANTS OF THE COMPANY..............................................................................13

         3.1      Basic Financial Information and Reporting......................................................13

         3.2      Inspection Rights..............................................................................14

         3.3      Confidentiality of Records.....................................................................14

         3.4      Reservation of Common Stock....................................................................14

         3.5      Proprietary Information and Inventions Agreement...............................................15

         3.6      Use of Funds...................................................................................15

         3.7      Termination of Covenants.......................................................................15

SECTION 4  RIGHTS OF FIRST REFUSAL...............................................................................15

         4.1      Subsequent Offerings...........................................................................15

         4.2      Exercise of Rights.............................................................................15

         4.3      Issuance of Equity Securities to Other Persons.................................................16

         4.4      Termination and Waiver of Rights of First Refusal..............................................16
</TABLE>

                                       i.

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                                TABLE OF CONTENTS
                                   (CONTINUED)
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         4.5      Transfer of Rights of First Refusal............................................................16

         4.6      Excluded Securities............................................................................16

SECTION 5  MISCELLANEOUS.........................................................................................17

         5.1      Governing Law..................................................................................17

         5.2      Survival.......................................................................................17

         5.3      Successors and Assigns.........................................................................17

         5.4      Entire Agreement...............................................................................17

         5.5      Severability...................................................................................17

         5.6      Amendment and Waiver...........................................................................18

         5.7      Delays or Omissions............................................................................18

         5.8      Notices........................................................................................18

         5.9      Attorneys' Fees................................................................................18

         5.10     Titles and Subtitles...........................................................................18

         5.11     Additional Investors...........................................................................19

         5.12     Counterparts...................................................................................19
</TABLE>

                                       ii.

<PAGE>

                          OCULEX PHARMACEUTICALS, INC.

                            SERIES D PREFERRED STOCK

                            INVESTOR RIGHTS AGREEMENT


         THIS INVESTOR RIGHTS AGREEMENT (the "Agreement") is entered into as
of the ____ day of March, 2000, by and among OCULEX PHARMACEUTICALS, INC., a
California corporation (the "Company") and the Purchasers of the Company's
Series D Preferred Stock (the "Investors") listed on EXHIBIT A hereto, and as
amended to add further Purchasers from time to time.

                                    RECITALS

         WHEREAS, Investors are purchasing shares of the Company's Series D
Preferred Stock (the "Series D Stock") pursuant to that certain Series D
Preferred Stock Purchase Agreement (the "Purchase Agreement") (the "Financing");

         WHEREAS, the obligations in the Purchase Agreement are conditioned
upon the execution and delivery of this Agreement; and

         WHEREAS, in connection with the consummation of the Financing, the
parties desire to enter into this Agreement in order to grant registration,
information rights and other rights to the Investor as set forth below.

         NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree hereto as follows:

SECTION 1.  GENERAL.

         1.1  DEFINITIONS. As used in this Agreement the following terms shall
have the following respective meanings:

              "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

              "Form S-3" means such form under the Securities Act as in
effect on the date hereof or any successor or similar registration form under
the Securities Act subsequently adopted by the SEC which permits inclusion or
incorporation of substantial information by reference to other documents
filed by the Company with the SEC.

              "Holder" means any person owning of record Registrable
Securities that have not been sold to the public or any assignee of record of
such Registrable Securities in accordance with Section 2.10 hereof.


                                       1.

<PAGE>

              "Initial Offering" means the Company's first firm commitment
underwritten public offering of its Common Stock registered under the
Securities Act.

               "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
effectiveness of such registration statement or document.

               "Registrable Securities" means (a) Common Stock of the Company
issued or issuable upon conversion of the Shares; and (b) any Common Stock of
the Company issued as (or issuable upon the conversion or exercise of any
warrant, right or other security which is issued as) a dividend or other
distribution with respect to, or in exchange for or in replacement of, such
above-described securities. Notwithstanding the foregoing, Registrable
Securities shall not include any securities sold by a person to the public
either pursuant to a registration statement or Rule 144 or sold in a private
transaction in which the transferor's rights under Section 2 of this
Agreement are not assigned.

               "Registrable Securities then outstanding" shall be the number
of shares determined by calculating the total number of shares of the
Company's Common Stock that are Registrable Securities and either (a) are
then issued and outstanding or (b) are issuable pursuant to then exercisable
or convertible securities.

               "Registration Expenses" shall mean all expenses incurred by
the Company in complying with Sections 2.2, 2.3 and 2.4 hereof, including,
without limitation, all registration and filing fees, printing expenses, fees
and disbursements of counsel for the Company, reasonable fees and
disbursements not to exceed fifteen thousand ($15,000) of a single special
counsel for the Holders, 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).

               "SEC" or "Commission" means the Securities and Exchange
Commission.

               "Securities Act" shall mean the Securities Act of 1933, as
amended.

               "Selling Expenses" shall mean all underwriting discounts and
selling commissions applicable to the sale.

               "Shares" shall mean the Company's Series D Stock issued
pursuant to the Purchase Agreement and held by the Investors listed on
EXHIBIT A hereto and their permitted assigns.

               "Special Registration Statement" shall mean a registration
statement relating to any employee benefit plan or with respect to any
corporate reorganization or other transaction under Rule 145 of the
Securities Act.


                                       2.

<PAGE>

SECTION 2.  REGISTRATION; RESTRICTIONS ON TRANSFER.

         2.1  RESTRICTIONS ON TRANSFER.

              (a) Each Holder agrees not to make any disposition of all or
any portion of the Shares or Registrable Securities unless and until:

                  (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) (A) The transferee has agreed in writing to be bound by
the terms of this Agreement, (B) 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 (C) if reasonably requested by the Company, such Holder shall have
furnished the Company with an opinion of counsel, reasonably satisfactory to
the Company, that such disposition will not require registration of such
shares under the Securities Act. It is agreed that the Company will not
require opinions of counsel for transactions made pursuant to Rule 144 except
in unusual circumstances.

                (iii) Notwithstanding the provisions of paragraphs (i) and
(ii) above, 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 former 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, or (C) to the Holder's
family member or trust for the benefit of an individual Holder; PROVIDED that
in each case the transferee will be subject to the terms of this Agreement to
the same extent as if he were an original Holder hereunder.

              (b) Each certificate representing Shares or Registrable
Securities shall (unless otherwise permitted by the provisions of the
Agreement) be stamped or otherwise imprinted with a legend substantially
similar to the following (in addition to any legend required under applicable
state securities laws):

               THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
               UNDER THE SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT BE
               OFFERED, SOLD OR OTHERWISE TRANSFERRED, ASSIGNED, PLEDGED OR
               HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR
               UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL
               SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT SUCH
               REGISTRATION IS NOT REQUIRED.

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


                                       3.

<PAGE>

              (d) Any legend endorsed on an instrument pursuant to applicable
state securities laws and the stop-transfer instructions with respect to such
securities shall be removed upon receipt by the Company of an order of the
appropriate blue sky authority authorizing such removal.

         2.2  DEMAND REGISTRATION.

              (a) Subject to the conditions of this Section 2.2, if the
Company shall receive a written request from the Holders of a majority of the
Registrable Securities (the "Initiating Holders") that the Company file a
registration statement under the Securities Act covering the registration of
at least a majority of the Registrable Securities then outstanding (or a
lesser percent if the anticipated aggregate offering price, net of
underwriting discounts and commissions, would exceed $5,000,000 (a "Qualified
Public Offering")), then the Company shall, within thirty (30) days of the
receipt thereof, give written notice of such request to all Holders, and
subject to the limitations of this Section 2.2, effect, as expeditiously as
reasonably possible, the registration under the Securities Act of all
Registrable Securities that the Holders request to be registered.

              (b) If the Initiating Holders intend to distribute the
Registrable Securities covered by their request by means of an underwriting,
they shall so advise the Company as a part of their request made pursuant to
this Section 2.2 or any request pursuant to Section 2.4 and the Company shall
include such information in the written notice referred to in Section 2.2(a)
or Section 2.4(a), as applicable. In such event, the right of any Holder to
include its Registrable Securities in such registration 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. All Holders proposing to distribute their securities through
such underwriting shall enter into an underwriting agreement in customary
form with the underwriter or underwriters selected for such underwriting by a
majority in interest of the Initiating Holders (which underwriter or
underwriters shall be reasonably acceptable to the Company). Notwithstanding
any other provision of this Section 2.2 or Section 2.4, if the underwriter
advises the Company that marketing factors require a limitation of the number
of securities to be underwritten (including Registrable Securities) then the
Company shall so advise all Holders of Registrable Securities which would
otherwise be underwritten pursuant hereto, and the number of shares that may
be included in the underwriting shall be allocated to the Holders of such
Registrable Securities on a PRO RATA basis based on the number of Registrable
Securities held by all such Holders (including the Initiating Holders). Any
Registrable Securities excluded or withdrawn from such underwriting shall be
withdrawn from the registration.

              (c) The Company shall not be required to effect a registration
pursuant to this Section 2.2:

                  (i) prior to the earlier of (A) the third anniversary of
the date of this Agreement or (B) one hundred eighty (180) days following the
effective date of the registration statement pertaining to the Initial
Offering;

                 (ii) after the Company has effected two (2) registrations
pursuant to this Section 2.2, and such registrations have been declared or
ordered effective;


                                       4.

<PAGE>

                (iii) if within thirty (30) days of receipt of a written
request from Initiating Holders pursuant to Section 2.2(a), the Company gives
notice to the Holders of the Company's intention to make its Initial Offering
within ninety (90) days;

                 (iv) if the Company shall furnish to Holders requesting a
registration statement pursuant to this Section 2.2, a certificate signed by
the Chairman of the Board stating that in the good faith judgment of the
Board of Directors of the Company, it would be seriously detrimental to the
Company and its shareholders for such registration statement to be effected
at such time, in which event the Company shall have the right to defer such
filing for a period of not more than ninety (90) days after receipt of the
request of the Initiating Holders; PROVIDED that such right to delay a
request shall be exercised by the Company not more than once in any twelve
(12) month period; or

                  (v) if the Initiating Holders propose to dispose of shares
of Registrable Securities that may be immediately registered on Form S-3
pursuant to a request made pursuant to Section 2.4 below.

         2.3  PIGGYBACK REGISTRATIONS. The Company shall notify all Holders
of Registrable Securities in writing at least fifteen (15) days prior to the
filing of any registration statement under the Securities Act for purposes of
a public offering of securities of the Company (including, but not limited
to, registration statements relating to secondary offerings of securities of
the Company, but excluding Special Registration Statements) and will afford
each such Holder an opportunity to include in such registration statement all
or part of such Registrable Securities held by such Holder. Each Holder
desiring to include in any such registration statement all or any part of the
Registrable Securities held by it shall, within fifteen (15) days after the
above-described notice from the Company, so notify the Company in writing.
Such notice shall state the intended method of disposition of the Registrable
Securities by such Holder. If a Holder decides not to include all of its
Registrable Securities in any registration statement thereafter filed by the
Company, such Holder shall nevertheless continue to have the right to include
any Registrable Securities in any subsequent registration statement or
registration statements as may be filed by the Company with respect to
offerings of its securities, all upon the terms and conditions set forth
herein.

              (a) UNDERWRITING. If the registration statement under which the
Company gives notice under this Section 2.3 is for an underwritten offering,
the Company shall so advise the Holders of Registrable Securities. In such
event, the right of any such Holder to be included in a registration pursuant
to this Section 2.3 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. All Holders proposing to
distribute their Registrable Securities through such underwriting shall enter
into an underwriting agreement in customary form with the underwriter or
underwriters selected for such underwriting by the Company. Notwithstanding
any other provision of the Agreement, if the underwriter determines in good
faith that marketing factors require a limitation of the number of shares to
be underwritten, the number of shares that may be included in the
underwriting shall be allocated, first, to the Company; second, to the
Holders and holders which acquired registration rights through the purchase
of the Company's Preferred Stock ("Other Holders") on a PRO RATA basis based
on the total number of Registrable Securities and other shares registrable as
former shares


                                       5.

<PAGE>

of Preferred Stock of the Company held by the Holders and Other Holders; and
third, to any shareholder of the Company (other than a Holder) on a PRO RATA
basis. No such reduction shall (i) reduce the securities being offered by the
Company for its own account to be included in the registration and
underwriting, or (ii) reduce the amount of securities of the selling Holders
and Other Holders included in the registration below twenty-five percent
(25%) of the total amount of securities included in such registration, unless
such offering is the Initial Offering and such registration does not include
shares of any other selling shareholders, in which event any or all of the
Registrable Securities of the Holders may be excluded in accordance with the
immediately preceding sentence. If any Holder disapproves of the terms of any
such underwriting, such Holder may elect to withdraw therefrom by written
notice to the Company and the underwriter, delivered at least ten (10)
business days prior to the effective date of the registration statement. Any
Registrable Securities excluded or withdrawn from such underwriting shall be
excluded and withdrawn from the registration. For any Holder which is a
partnership or corporation, the partners, retired partners and shareholders
of such Holder, or the estates and family members of any such partners and
retired partners and any trusts for the benefit of any of the foregoing
person shall be deemed to be a single "Holder," and any PRO RATA reduction
with respect to such "Holder" shall be based upon the aggregate amount of
shares carrying registration rights owned by all entities and individuals
included in such "Holder," as defined in this sentence.

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

         2.4  FORM S-3 REGISTRATION. In case the Company shall receive from
any Holder or Holders of Registrable Securities a written request or requests
that the Company effect a registration on Form S-3 (or any successor to Form
S-3) or any similar short-form registration statement and any related
qualification or compliance with respect to all or a part of the Registrable
Securities owned by such Holder or Holders, the Company will:

              (a) promptly give written notice of the proposed registration,
and any related qualification or compliance, to all other Holders of
Registrable Securities; and

              (b) as soon as practicable, effect such registration and all
such qualifications and compliances as may be so requested and as would
permit or facilitate the sale and distribution of all or such portion of such
Holder's or Holders' Registrable Securities as are specified in such request,
together with all or such portion of the Registrable Securities of any other
Holder or Holders joining in such request as are specified in a written
request given within fifteen (15) days after receipt of such written notice
from the Company; PROVIDED, HOWEVER, that the Company shall not be obligated
to effect any such registration, qualification or compliance pursuant to this
Section 2.4:

                  (i) if Form S-3 is not available for such offering by the
Holders, or

                 (ii) if the Holders, together with the holders of any other
securities of the Company entitled to inclusion in such registration, propose
to sell Registrable Securities and


                                       6.

<PAGE>

such other securities (if any) at an aggregate price to the public of less
than five hundred thousand dollars ($500,000), or

                (iii) if within thirty (30) days of receipt of a written
request from any Holder or Holders pursuant to this Section 2.4, the Company
gives notice to such Holder or Holders of the Company's intention to make a
public offering within ninety (90) days, other than pursuant to a Special
Registration Statement;

                 (iv) if the Company shall furnish to the Holders a
certificate signed by the Chairman of the Board of Directors of the Company
stating that in the good faith judgment of the Board of Directors of the
Company, it would be seriously detrimental to the Company and its
shareholders for such Form S-3 registration to be effected at such time, in
which event the Company shall have the right to defer the filing of the Form
S-3 registration statement for a period of not more than ninety (90) days
after receipt of the request of the Holder or Holders under this Section 2.4;
PROVIDED, that such right to delay a request shall be exercised by the
Company not more than once in any twelve (12) month period, or

                  (v) if the Company has already effected two (2)
registrations on Form S-3 for the Holders pursuant to this Section 2.4, or

                 (vi) in any particular jurisdiction in which the Company
would be required to qualify to do business or to execute a general consent
to service of process in effecting such registration, qualification or
compliance.

              (c) Subject to the foregoing, the Company shall file a Form S-3
registration statement covering the Registrable Securities and other
securities so requested to be registered as soon as practicable after receipt
of the request or requests of the Holders. Registrations effected pursuant to
this Section 2.4 shall not be counted as demands for registration or
registrations effected pursuant to Sections 2.2 or 2.3, respectively. All
such Registration Expenses incurred in connection with registrations
requested pursuant to this Section 2.4 after the first two (2) registrations
shall be paid by the selling Holders PRO RATA in proportion to the number of
shares sold by each.

         2.5  EXPENSES OF REGISTRATION. Except as specifically provided
herein, all Registration Expenses incurred in connection with any
registration, qualification or compliance pursuant to Section 2.2 or any
registration under Section 2.3 or Section 2.4 herein shall be borne by the
Company. All Selling Expenses incurred in connection with any registrations
hereunder, shall be borne by the holders of the securities so registered PRO
RATA on the basis of the number of shares so registered. The Company shall
not, however, be required to pay for expenses of any registration proceeding
begun pursuant to Section 2.2 or 2.4, the request of which has been
subsequently withdrawn by the Initiating Holders unless (a) the withdrawal is
based upon material adverse information concerning the Company of which the
Initiating Holders were not aware at the time of such request or (b) the
Holders of a majority of Registrable Securities agree to forfeit their right
to one requested registration pursuant to Section 2.2 or Section 2.4, as
applicable, in which event such right shall be forfeited by all Holders). If
the Holders are required to pay the Registration Expenses, such expenses
shall be borne by the holders of securities (including Registrable
Securities) requesting such registration in proportion to the


                                       7.

<PAGE>

number of shares for which registration was requested. If the Company is
required to pay the Registration Expenses of a withdrawn offering pursuant to
clause (a) above, then the Holders shall not forfeit their rights pursuant to
Section 2.2 or Section 2.4 to a demand registration.

         2.6  OBLIGATIONS OF THE COMPANY. Whenever required to effect the
registration of any Registrable Securities, the Company shall, as
expeditiously as reasonably possible:

              (a) Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use all reasonable efforts to
cause such registration statement to become effective, and, upon the request
of the Holders of a majority of the Registrable Securities registered
thereunder, keep such registration statement effective for up to thirty (30)
days or, if earlier, until the Holder or Holders have completed the
distribution related thereto. The Company shall not be required to file,
cause to become effective or maintain the effectiveness of any registration
statement that contemplates a distribution of securities on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act.

              (b) Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in
connection with such registration statement as may be necessary to comply
with the provisions of the Securities Act with respect to the disposition of
all securities covered by such registration statement for the period set
forth in paragraph (a) above.

              (c) Furnish to the Holders such number of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as they may
reasonably request in order to facilitate the disposition of Registrable
Securities owned by them.

              (d) Use its reasonable 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.

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

              (f) Notify each Holder 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 material fact
or omits to state a material fact required to be stated therein or necessary
to make the statements therein not misleading in the light of the
circumstances then existing. The Company will use reasonable efforts to amend
or supplement such prospectus in order to cause such prospectus not to
include any untrue statement of a material fact or omit to state a material
fact required to be stated


                                       8.

<PAGE>

therein or necessary to make the statements therein not misleading in the
light of the circumstances then existing.

              (g) Use its reasonable efforts to furnish, on the date that
such Registrable Securities are delivered to the underwriters for sale, if
such securities are being sold through underwriters, (i) an opinion, dated as
of 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 (ii) a letter dated as of 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.

         2.7  TERMINATION OF REGISTRATION RIGHTS. All registration rights
granted under this Section 2 shall terminate and be of no further force and
effect two (2) years after the date of the Company's Initial Offering. In
addition, a Holder's registration rights shall expire if (a) the Company has
completed its Initial Offering and is subject to the provisions of the
Exchange Act, (b) such Holder (together with its affiliates, partners and
former partners) holds less than 1% of the Company's outstanding Common Stock
(treating all shares of convertible Preferred Stock on an as converted basis)
and (c) all Registrable Securities held by and issuable to such Holder (and
its affiliates, partners, former partners, members and former members) may be
sold under Rule 144 during any ninety (90) day period.

         2.8  DELAY OF REGISTRATION; FURNISHING INFORMATION.

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

              (b) It shall be a condition precedent to the obligations of the
Company to take any action pursuant to Section 2.2, 2.3 or 2.4 that the
selling Holders shall furnish to the Company such information regarding
themselves, the Registrable Securities held by them and the intended method
of disposition of such securities as shall be required to effect the
registration of their Registrable Securities.

              (c) The Company shall have no obligation with respect to any
registration requested pursuant to Section 2.2 or Section 2.4 if, due to the
operation of subsection 2.2(b), 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 Section 2.2 or
Section 2.4, whichever is applicable.

         2.9  INDEMNIFICATION. In the event any Registrable Securities are
included in a registration statement under Sections 2.2, 2.3 or 2.4:

              (a) To the extent permitted by law, the Company will indemnify
and hold harmless each Holder, the partners, officers and directors of each
Holder, any underwriter (as defined in the Securities Act) for such Holder
and each person, if any, who controls such Holder or underwriter within the
meaning of the Securities Act or the Exchange Act, against any losses,


                                       9.

<PAGE>

claims, damages, or liabilities (joint or several) to which they may become
subject under the Securities Act, the Exchange Act or other federal or state
law, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any of the following
statements, omissions or violations (collectively a "Violation") by the
Company: (i) any untrue statement or alleged untrue statement of a material
fact contained in such registration statement, including any preliminary
prospectus or final prospectus contained therein or any amendments or
supplements thereto, (ii) the omission or alleged omission to state therein a
material fact required to be stated therein, or necessary to make the
statements therein not misleading, or (iii) any violation or alleged
violation by the Company of the Securities Act, the Exchange Act, any state
securities law or any rule or regulation promulgated under the Securities
Act, the Exchange Act or any state securities law in connection with the
offering covered by such registration statement; and the Company will pay as
incurred to each such Holder, partner, officer, director, underwriter or
controlling person for any legal or other expenses reasonably incurred by
them in connection with investigating or defending any such loss, claim,
damage, liability or action; PROVIDED HOWEVER, that the indemnity agreement
contained in this Section 2.9(a) 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, nor shall the Company be liable in any
such case for any such loss, claim, damage, liability or action to the extent
that it arises out of or is based upon a Violation which occurs in reliance
upon and in conformity with written information furnished expressly for use
in connection with such registration by such Holder, partner, officer,
director, underwriter or controlling person of such Holder.

              (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 qualifications or compliance is being effected,
indemnify and hold harmless the Company, each of its directors, its officers
and each person, if any, who controls the Company within the meaning of the
Securities Act, any underwriter and any other Holder selling securities under
such registration statement or any of such other Holder's partners, directors
or officers or any person who controls such Holder, against any losses,
claims, damages or liabilities (joint or several) to which the Company or any
such director, officer, controlling person, underwriter or other such Holder,
or partner, director, officer or controlling person of such other Holder may
become subject under the Securities Act, the Exchange Act or other federal or
state law, insofar as such losses, claims, damages or liabilities (or actions
in respect thereto) arise out of or are based upon any Violation, in each
case to the extent (and only to the extent) that such Violation occurs in
reliance upon and in conformity with written information furnished by such
Holder under an instrument duly executed by such Holder and stated to be
specifically for use in connection with such registration; and each such
Holder will pay as incurred any legal or other expenses reasonably incurred
by the Company or any such director, officer, controlling person, underwriter
or other Holder, or partner, officer, director or controlling person of such
other Holder in connection with investigating or defending any such loss,
claim, damage, liability or action if it is judicially determined that there
was such a Violation; PROVIDED, HOWEVER, that the indemnity agreement
contained in this Section 2.9(b) 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 Holder, which consent shall
not be unreasonably withheld; PROVIDED FURTHER, that in no event shall any
indemnity under this Section 2.9 exceed the proceeds from the offering
received by such Holder.


                                      10.

<PAGE>

              (c) Promptly after receipt by an indemnified party under this
Section 2.9 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect
thereof is to be made against any indemnifying party under this Section 2.9,
deliver to the indemnifying party a written notice of the commencement
thereof and the indemnifying party shall have the right to participate in,
and, to the extent the indemnifying party so desires, jointly with any other
indemnifying party similarly noticed, to assume the defense thereof with
counsel mutually satisfactory to the parties; PROVIDED, HOWEVER, that an
indemnified party shall have the right to retain its own counsel, with the
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. The failure to deliver written notice to the indemnifying
party within a reasonable time of the commencement of any such action, if
materially prejudicial to its ability to defend such action, shall relieve
such indemnifying party of any liability to the indemnified party under this
Section 2.9, but the omission so to deliver written notice to the
indemnifying party will not relieve it of any liability that it may have to
any indemnified party otherwise than under this Section 2.9.

              (d) If the indemnification provided for in this Section 2.9 is
held by a court of competent jurisdiction to be unavailable to an indemnified
party with respect to any losses, claims, damages or liabilities referred to
herein, the indemnifying party, in lieu of indemnifying such indemnified
party thereunder, shall to the extent permitted by applicable law contribute
to the amount paid or payable by such indemnified party as a result of such
loss, claim, damage or liability in such proportion as is appropriate to
reflect the relative fault of the indemnifying party on the one hand and of
the indemnified party on the other in connection with the Violation(s) that
resulted in such loss, claim, damage or liability, as well as any other
relevant equitable considerations. The relative fault of the indemnifying
party and of the indemnified party shall be determined by a court of law 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 relates
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; PROVIDED, that
in no event shall any contribution by a Holder hereunder exceed the [NET]
proceeds from the offering received by such Holder.

              (e) The obligations of the Company and Holders under this
Section 2.9 shall survive completion of any offering of Registrable
Securities in a registration statement and the termination of this agreement.
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.

         2.10  ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause the
Company to register Registrable Securities pursuant to this Section 2 may be
assigned by a Holder to a transferee or assignee of Registrable Securities
which (a) is a general partner, limited partner or retired partner of a
Holder, (b) is a Holder's family member or trust for the benefit of an
individual Holder, or (c) acquires at least fifty thousand (50,000) shares of
Registrable Securities (as adjusted for stock


                                       11.

<PAGE>

splits and combinations); PROVIDED, HOWEVER, (i) the transferor shall, within
ten (10) days after such transfer, furnish to the Company written notice of
the name and address of such transferee or assignee and the securities with
respect to which such registration rights are being assigned and (ii) such
transferee shall agree to be subject to all restrictions set forth in this
Agreement.

         2.11  AMENDMENT OF REGISTRATION RIGHTS. Any provision of this
Section 2 may be amended and the observance thereof may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the Holders
of at least seventy-five percent (75%) of the Registrable Securities then
outstanding. Any amendment or waiver effected in accordance with this Section
2.11 shall be binding upon each Holder and the Company. By acceptance of any
benefits under this Section 2, Holders of Registrable Securities hereby agree
to be bound by the provisions hereunder.

         2.12  LIMITATION ON SUBSEQUENT REGISTRATION RIGHTS. Other than as
provided in Section 5.11, after the date of this Agreement, the Company shall
not, without the prior written consent of the Holders of at least
seventy-five percent (75%) of the Registrable Securities then outstanding,
enter into any agreement with any holder or prospective holder of any
securities of the Company that would grant such holder registration rights
senior to those granted to the Holders hereunder.

         2.13  "MARKET STAND-OFF" AGREEMENT; AGREEMENT TO FURNISH INFORMATION.
Each Holder hereby agrees that such Holder shall not sell, transfer, make any
short sale of, grant any option for the purchase of, or enter into any
hedging or similar transaction with the same economic effect as a sale, any
Common Stock (or other securities) of the Company held by such Holder (other
than those included in the registration) for a period specified by the
representative of the underwriters of Common Stock (or other securities) of
the Company not to exceed one hundred eighty (180) days following the
effective date of a registration statement of the Company filed under the
Securities Act; PROVIDED that:

              (i) such agreement shall apply only to the Company's Initial
Offering; and

             (ii) all officers and directors of the Company and holders of at
least one percent (1%) of the Company's voting securities enter into similar
agreements.

         Each Holder agrees to execute and deliver such other agreements as may
be reasonably requested by the Company or the underwriter which are consistent
with the foregoing or which are necessary to give further effect thereto. In
addition, if requested by the Company or the representative of the underwriters
of Common Stock (or other securities) of the Company, each Holder shall provide,
within ten (10) days of such request, such information as may be required by the
Company or such representative in connection with the completion of any public
offering of the Company's securities pursuant to a registration statement filed
under the Securities Act. The obligations described in this Section 2.13 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 Commission Rule 145 transaction on Form S-4 or
similar forms that may be promulgated in the future. The Company may impose
stop-transfer instructions with respect to the shares of Common Stock (or other
securities) subject to the


                                       12.

<PAGE>

foregoing restriction until the end of said one hundred eighty (180) day
period. Each Holder agrees that any transferee of any shares of Registrable
Securities shall be bound by this Section 2.13.

         2.14  RULE 144 REPORTING. With a view to making available to the
Holders the benefits of certain rules and regulations of the SEC which may
permit the sale of the Registrable Securities to the public without
registration, the Company agrees to use its best efforts to:

              (a) Make and keep public information available, as those terms
are understood and defined in SEC Rule 144 or any similar or analogous rule
promulgated under the Securities Act, at all times after the effective date
of the first registration filed by the Company for an offering of its
securities to the general public;

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

              (c) So long as a Holder owns any Registrable Securities,
furnish to such Holder forthwith upon request: a written statement by the
Company as to its compliance with the reporting requirements of said Rule 144
of the Securities Act, and of 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 as a Holder may reasonably request in availing itself of any rule
or regulation of the SEC allowing it to sell any such securities without
registration.

SECTION 3.  COVENANTS OF THE COMPANY.

         3.1  BASIC FINANCIAL INFORMATION AND REPORTING.

              (a) The Company will maintain true books and records of account
in which full and correct entries will be made of all its business
transactions pursuant to a system of accounting established and administered
in accordance with generally accepted accounting principles consistently
applied, and will set aside on its books all such proper accruals and
reserves as shall be required under generally accepted accounting principles
consistently applied.

              (b) As soon as practicable after the end of each fiscal year of
the Company, and in any event within one hundred twenty (120) days
thereafter, to the extent requested by an Investor the Company will furnish
such Investor a balance sheet of the Company, as at the end of such fiscal
year, and a statement of income and a statement of cash flows of the Company,
for such year, all 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. Such
financial statements shall be accompanied by a report and opinion thereon by
independent public accountants of national standing selected by the Company's
Board of Directors.

              (c) So long as an Investor (with its affiliates) shall own not
less than one hundred thousand (100,000) shares of Registrable Securities (as
adjusted for stock splits and combinations) (a "Major Investor"), the Company
will furnish such Major Investor, as soon as practicable after the end of the
first, second and third quarterly accounting periods in each fiscal


                                       13.

<PAGE>

year of the Company, and in any event within forty-five (45) days thereafter,
to the extent requested by such Investor a balance sheet of the Company as of
the end of each such quarterly period, and a statement of income and a
statement of cash flows of the Company for such period and for the current
fiscal year to date, prepared in accordance with generally accepted
accounting principles, with the exception that no notes need be attached to
such statements and year-end audit adjustments may not have been made.

              (d) To the extent requested by such Major Investor the Company
will furnish each a Major Investor (i) at least thirty (30) days prior to the
beginning of each fiscal year and annual budget and operating plans for such
fiscal year (and as soon as available, any subsequent revisions thereto); and
(ii) as soon as practicable after the end of each month, and in any event
within twenty (20) days thereafter, a balance sheet of the Company as of the
end of each such month, and a statement of income and a statement of cash
flows of the Company for such month, and a statement of income and a
statement of cash flows of the Company for such month and for the current
fiscal year to date, including a comparison to plan figures for such period,
prepared in accordance with generally accepted accounting principles
consistently applied, with the exception that no notes need be attached to
such statements and year-end audit adjustments may not have been made.

         3.2  INSPECTION RIGHTS. Each Major Investor shall have the right to
visit and inspect any of the properties of the Company or any of its
subsidiaries, and to discuss the affairs, finances and accounts of the
Company or any of its subsidiaries with its officers, and to review such
information as is reasonably requested all at such reasonable times and as
often as may be reasonably requested; PROVIDED, HOWEVER, that the Company
shall not be obligated under this Section 3.2 with respect to a competitor of
the Company or with respect to information which the Board of Directors
determines in good faith is confidential and should not, therefore, be
disclosed. For so long as Pharmbio Growth Fund PTE LTD is a Major Investor,
it shall have five days advance notice of the Company's regular meetings of
its Board of Directors and an opportunity to observe such regular Board
Meetings, provided, however; that the Board of Directors may exclude Pharmbio
Growth Fund PTE LTD from all or a portion of the Board Meetings if the Board
determines in good faith that the subject matter thereof is Confidential and
should not, therefore, be disclosed.

         3.3  CONFIDENTIALITY OF RECORDS. Each Investor agrees to use, and to
use its best efforts to insure that its authorized representatives use, the
same degree of care as such Investor uses to protect its own confidential
information to keep confidential any information furnished to it which the
Company identifies as being confidential or proprietary (so long as such
information is not in the public domain), except that such Investor may
disclose such proprietary or confidential information to any partner,
subsidiary or parent of such Investor for the purpose of evaluating its
investment in the Company as long as such partner, subsidiary or parent is
advised of the confidentiality provisions of this Section 3.3.

         3.4  RESERVATION OF COMMON STOCK. The Company will at all times
reserve and keep available, solely for issuance and delivery upon the
conversion of the Preferred Stock, all Common Stock issuable from time to
time upon such conversion.


                                       14.

<PAGE>

         3.5  PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT. The Company
shall require all employees and consultants to execute and deliver a
Proprietary Information and Inventions Agreement.

         3.6  USE OF FUNDS. The Company shall use funds acquired from
Pharmbio Growth Fund PTE LTD for the purpose of operating and expanding the
Company's business in Singapore, including; (i) the expansion of Oculex Asia
into an integrated operation with development, manufacturing and sales and
marketing, and (ii) the setting up of a commercial scale GMP manufacturing
facility in Singapore for drug delivery systems for the eye.

         3.7  TERMINATION OF COVENANTS. All covenants of the Company
contained in Section 3 of this Agreement shall expire and terminate as to
each Investor upon the earlier of (i) the effective date of the registration
statement pertaining to the Initial Offering or (ii) upon (a) the sale, lease
or other disposition of all or substantially all of the assets of the Company
or (b) an acquisition of the Company by another corporation or entity by
consolidation, merger or other reorganization in which the holders of the
Company's outstanding voting stock immediately prior to such transaction own,
immediately after such transaction, securities representing less than fifty
percent (50%) of the voting power of the corporation or other entity
surviving such transaction, PROVIDED that this Section 3.16(ii)(b) shall not
apply to a merger effected exclusively for the purpose of changing the
domicile of the Company (a "Change in Control").

SECTION 4.  RIGHTS OF FIRST REFUSAL.

         4.1  SUBSEQUENT OFFERINGS. Each Major Investor shall have a right of
first refusal to purchase its PRO RATA share of all Equity Securities, as
defined below, that the Company may, from time to time, propose to sell and
issue after the date of this Agreement, other than the Equity Securities
excluded by Section 4.6 hereof. Each Investor's PRO RATA share is equal to
the ratio of (a) the number of shares of the Company's Common Stock
(including all shares of Common Stock issued or issuable upon conversion of
the Shares) which such Investor is deemed to be a holder immediately prior to
the issuance of such Equity Securities to (b) the total number of shares of
the Company's outstanding Common Stock (including all shares of Common Stock
issued or issuable upon conversion of the Shares or upon the exercise of any
outstanding warrants or options) immediately prior to the issuance of the
Equity Securities. The term "Equity Securities" shall mean (i) any Common
Stock, Preferred Stock or other security of the Company, (ii) any security
convertible, with or without consideration, into any Common Stock, Preferred
Stock or other security (including any option to purchase such a convertible
security), (iii) any security carrying any warrant or right to subscribe to
or purchase any Common Stock, Preferred Stock or other security or (iv) any
such warrant or right.

         4.2  EXERCISE OF RIGHTS. If the Company proposes to issue any Equity
Securities, it shall give each Major Investor written notice of its
intention, describing the Equity Securities, the price and the terms and
conditions upon which the Company proposes to issue the same. Each Major
Investor shall have fifteen (15) days from the giving of such notice to agree
to purchase its PRO RATA share of the Equity Securities for the price and
upon the terms and conditions specified in the notice by giving written
notice to the Company and stating therein the quantity of Equity Securities
to be purchased. Notwithstanding the foregoing, the Company shall not be
required to


                                       15.

<PAGE>

offer or sell such Equity Securities to any Major Investor who would cause
the Company to be in violation of applicable federal securities laws by
virtue of such offer or sale.

         4.3  ISSUANCE OF EQUITY SECURITIES TO OTHER PERSONS. If not all of
the Major Investors elect to purchase their pro rata share of the Equity
Securities, then the Company shall promptly notify in writing the Major
Investors who do so elect and shall offer such Major Investors the right to
acquire such unsubscribed shares. The Major Investors shall have five (5)
days after receipt of such notice to notify the Company of its election to
purchase all or a portion thereof of the unsubscribed shares. If the Major
Investors fail to exercise in full the rights of first refusal, the Company
shall have ninety (90) days thereafter to sell the Equity Securities in
respect of which the Major Investor's rights were not exercised, at a price
and upon general terms and conditions materially no more favorable to the
purchasers thereof than specified in the Company's notice to the Major
Investors pursuant to Section 4.2 hereof. If the Company has not sold such
Equity Securities within ninety (90) days of the notice provided pursuant to
Section 4.2, the Company shall not thereafter issue or sell any Equity
Securities, without first offering such securities to the Major Investors in
the manner provided above.

         4.4  TERMINATION AND WAIVER OF RIGHTS OF FIRST REFUSAL. The rights
of first refusal established by this Section 4 shall not apply to, and shall
terminate upon the earlier of (i) effective date of the registration
statement pertaining to the Company's Initial Offering or (ii) a Change in
Control. The rights of first refusal established by this Section 4 may be
amended, or any provision waived with the written consent of Major Investors
holding a majority of the Registrable Securities held by all Major Investors,
or as permitted by Section 5.6.

         4.5  TRANSFER OF RIGHTS OF FIRST REFUSAL. The rights of first
refusal of each Major Investor under this Section 4 may be transferred to the
same parties, subject to the same restrictions as any transfer of
registration rights pursuant to Section 2.10.

         4.6  EXCLUDED SECURITIES. The rights of first refusal established by
this Section 4 shall have no application to any of the following Equity
Securities:

              (a) shares of Common Stock (and/or options, warrants or other
Common Stock purchase rights issued pursuant to such options, warrants or
other rights) as adjusted for any stock dividends, combinations, splits,
recapitalizations and the like issued or to be issued after the Series D
Original Issue Date (as defined in the Company's Articles of Incorporation)
to employees, officers or directors of, or consultants or advisors to the
Company or any subsidiary, pursuant to stock purchase or stock option plans
or other arrangements that are approved by the Board of Directors;

              (b) stock issued pursuant to any rights or agreements
outstanding as of the date of this Agreement, options and warrants
outstanding as of the date of this Agreement; and stock issued pursuant to
any such rights or agreements granted after the date of this Agreement;
PROVIDED that the rights of first refusal established by this Section 4
applied with respect to the initial sale or grant by the Company of such
rights or agreements;

              (c) any Equity Securities issued for consideration other than
cash pursuant to a merger, consolidation, acquisition or similar business
combination;


                                       16.

<PAGE>

              (d) shares of Common Stock issued in connection with any stock
split, stock dividend or recapitalization by the Company;

              (e) shares of Common Stock issued upon conversion of the Shares;

              (f) any Equity Securities issued pursuant to any equipment
leasing or loan arrangement, or debt financing from a bank or similar
financial or lending institution;

              (g) any Equity Securities that are issued by the Company
pursuant to a registration statement filed under the Securities Act; and

              (h) any Equity Securities issued in connection with strategic
transactions involving the Company and other entities, including (i) joint
ventures, manufacturing, marketing or distribution arrangements or (ii)
technology transfer or development arrangements; PROVIDED that such strategic
transactions and the issuance of shares therein, has been approved by the
Company's Board of Directors.

SECTION 5.  MISCELLANEOUS.

         5.1  GOVERNING LAW. This Agreement shall be governed by and
construed under the laws of the State of California as applied to agreements
among California residents entered into and to be performed entirely within
California.

         5.2  SURVIVAL. The representations, warranties, covenants, and
agreements made herein shall survive any investigation made by any Holder and
the closing of the transactions contemplated hereby. All statements as to
factual matters contained in any certificate or other instrument delivered by
or on behalf of the Company pursuant hereto in connection with the
transactions contemplated hereby shall be deemed to be representations and
warranties by the Company hereunder solely as of the date of such certificate
or instrument.

         5.3  SUCCESSORS AND ASSIGNS. Except as otherwise expressly 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 and shall inure to the benefit of and be enforceable by each
person who shall be a holder of Registrable Securities from time to time;
PROVIDED, HOWEVER, that prior to the receipt by the Company of adequate
written notice of the transfer of any Registrable Securities specifying the
full name and address of the transferee, the Company may deem and treat the
person listed as the holder of such shares in its records as the absolute
owner and holder of such shares for all purposes, including the payment of
dividends or any redemption price.

         5.4  ENTIRE AGREEMENT. This Agreement, the Exhibits and Schedules
hereto, the Purchase Agreement and the other documents delivered pursuant
thereto constitute the full and entire understanding and agreement between
the parties with regard to the subjects hereof and no party shall be liable
or bound to any other in any manner by any representations, warranties,
covenants and agreements except as specifically set forth herein and therein.

         5.5  SEVERABILITY. In the event one or more of the provisions of
this Agreement should, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such


                                       17.

<PAGE>

invalidity, illegality, or unenforceability shall not affect any other
provisions of this Agreement, and this Agreement shall be construed as if
such invalid, illegal or unenforceable provision had never been contained
herein.

         5.6  AMENDMENT AND WAIVER.

              (a) Except as otherwise expressly provided, this Agreement may
be amended or modified only upon the written consent of the Company and the
holders of at least seventy-five percent (75%) of the Registrable Securities.

              (b) Except as otherwise expressly provided, the obligations of
the Company and the rights of the Holders under this Agreement may be waived
only with the written consent of the holders of at least seventy-five percent
(75%) of the Registrable Securities.

              (c) For the purposes of determining the number of Holder or
Investors entitled to vote or exercise any rights hereunder, the Company
shall be entitled to rely solely on the list of record holders of its stock
as maintained by or on behalf of the Company.

         5.7  DELAYS OR OMISSIONS. It is agreed that no delay or omission to
exercise any right, power, or remedy accruing to any Holder, upon any breach,
default or noncompliance of the Company under this Agreement shall impair any
such right, power, or remedy, nor shall it be construed to be a waiver of any
such breach, default or noncompliance, or any acquiescence therein, or of any
similar breach, default or noncompliance thereafter occurring. It is further
agreed that any waiver, permit, consent, or approval of any kind or character
on any Holder's part of any breach, default or noncompliance under the
Agreement or any waiver on such Holder's part 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. All remedies, either under
this Agreement, by law, or otherwise afforded to Holders, shall be cumulative
and not alternative.

         5.8  NOTICES. All notices required or permitted hereunder shall be
in writing and shall be deemed effectively given: (a) upon personal delivery
to the party to be notified, (b) when sent by confirmed electronic mail or
facsimile if sent during normal business hours of the recipient; if not, then
on the next business day, (c) five (5) days after having been sent by
registered or certified mail, return receipt requested, postage prepaid, or
(d) one (1) day after deposit with a nationally recognized overnight courier,
specifying next day delivery, with written verification of receipt. All
communications shall be sent to the party to be notified at the address as
set forth on the signature pages hereof or Exhibit A hereto or at such other
address as such party may designate by ten (10) days advance written notice
to the other parties hereto.

         5.9  ATTORNEYS' FEES. In the event that any suit or action is
instituted to enforce any provision in this Agreement, the prevailing party
in such dispute shall be entitled to recover from the losing party all fees,
costs and expenses of enforcing any right of such prevailing party under or
with respect to this Agreement, including without limitation, such reasonable
fees and expenses of attorneys and accountants, which shall include, without
limitation, all fees, costs and expenses of appeals.

        5.10  TITLES AND SUBTITLES. The titles of the sections and
subsections of this Agreement are for convenience of reference only and are
not to be considered in construing this Agreement.


                                       18.

<PAGE>

        5.11  ADDITIONAL INVESTORS.

              (a) Notwithstanding anything to the contrary contained herein,
if the Company shall issue additional shares of its Series D Preferred Stock
pursuant to the Purchase Agreement, any purchaser of such shares of Preferred
Stock may become a party to this Agreement by executing and delivering an
additional counterpart signature page to this Agreement and shall be deemed
an "Investor" hereunder.

              (b) Notwithstanding anything to the contrary contained herein,
if the Company shall issue Equity Securities in accordance with Section 4.6
(c), (f) or (h) of this Agreement, any purchaser of such Equity Securities
may become a party to this Agreement by executing and delivering an
additional counterpart signature page to this Agreement and shall be deemed
an "Investor" hereunder.

        5.12  COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.


                                       19.

<PAGE>


         IN WITNESS WHEREOF, the parties hereto have executed this INVESTOR
RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.

COMPANY:                                INVESTOR:

OCULEX PHARMACEUTICALS, INC.




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                            INVESTOR RIGHTS AGREEMENT
                                 SIGNATURE PAGE



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                                    EXHIBIT A

                              SCHEDULE OF INVESTORS





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                                      A-1
                          INVESTOR RIGHTS AGREEMENT