<PAGE>
                                                                               .
                                                                               .
                                                                               .

                                                                   EXHIBIT 10.26

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                              Page
                                                                                              ----
<S>                                                                                           <C>
1.       PURCHASE AND SALE OF SERIES D PREFERRED STOCK......................................    1

         1.1      SALE AND ISSUANCE OF SERIES D PREFERRED STOCK.............................    1
         1.2      CLOSING; DELIVERY.........................................................    1

2.       REPRESENTATIONS AND WARRANTIES OF THE COMPANY......................................    2

         2.1      ORGANIZATION, GOOD STANDING AND QUALIFICATION.............................    2
         2.2      CAPITALIZATION............................................................    2
         2.3      SUBSIDIARIES..............................................................    3
         2.4      AUTHORIZATION.............................................................    3
         2.5      VALID ISSUANCE OF SECURITIES..............................................    4
         2.6      GOVERNMENTAL CONSENTS.....................................................    4
         2.7      LITIGATION................................................................    4
         2.8      INTELLECTUAL PROPERTY.....................................................    4
         2.9      COMPLIANCE WITH OTHER INSTRUMENTS.........................................    5
         2.10     AGREEMENTS; ACTION........................................................    5
         2.11     DISCLOSURE................................................................    6
         2.12     NO CONFLICT OF INTEREST...................................................    6
         2.13     RIGHTS OF REGISTRATION....................................................    7
         2.14     TITLE TO PROPERTY AND ASSETS..............................................    7
         2.15     FINANCIAL STATEMENTS......................................................    7
         2.16     CHANGES...................................................................    8
         2.17     EMPLOYEE BENEFIT PLANS....................................................    9
         2.18     TAX MATTERS...............................................................    9
         2.19     INSURANCE.................................................................   10
         2.20     LABOR AGREEMENTS AND ACTIONS..............................................   10
         2.21     CONFIDENTIAL INFORMATION AND INVENTION ASSIGNMENT AGREEMENTS..............   10
         2.22     PERMITS...................................................................   10
         2.23     CORPORATE DOCUMENTS.......................................................   10
         2.24     ENVIRONMENTAL AND SAFETY LAWS.............................................   11
         2.25     PRIVATE OFFERING..........................................................   11
         2.26     OUTSTANDING BORROWING.....................................................   11

3.       REPRESENTATIONS AND WARRANTIES OF THE INVESTORS....................................   12

         3.1      AUTHORIZATION.............................................................   12
         3.2      PURCHASE ENTIRELY FOR OWN ACCOUNT.........................................   12
         3.3      DISCLOSURE OF INFORMATION.................................................   12
         3.4      RESTRICTED SECURITIES.....................................................   12
         3.5      NO PUBLIC MARKET..........................................................   13
         3.6      LEGENDS...................................................................   13
         3.7      ACCREDITED INVESTOR.......................................................   13
         3.8      FOREIGN INVESTORS.........................................................   13
</TABLE>

                                      -i-

<PAGE>

                                TABLE OF CONTENTS
                                   (CONTINUED)

<TABLE>
<CAPTION>
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4.       CONDITIONS OF THE INVESTORS' OBLIGATIONS AT CLOSING................................   14

         4.1      REPRESENTATIONS AND WARRANTIES............................................   14
         4.2      PERFORMANCE...............................................................   14
         4.3      COMPLIANCE CERTIFICATE....................................................   14
         4.4      QUALIFICATIONS............................................................   14
         4.5      OPINION OF COMPANY COUNSEL................................................   14
         4.6      INVESTORS' RIGHTS AGREEMENT...............................................   14
         4.7      VOTING AGREEMENT..........................................................   14
         4.8      RESTATED CERTIFICATE......................................................   15
         4.9      SECRETARY'S CERTIFICATE...................................................   15
         4.10     COLLABORATION AGREEMENT...................................................   15
         4.11     HART-SCOTT-RODINO.........................................................   15

5.       CONDITIONS OF THE COMPANY'S OBLIGATIONS AT CLOSING.................................   15

         5.1      REPRESENTATIONS AND WARRANTIES............................................   15
         5.2      PERFORMANCE...............................................................   16
         5.3      QUALIFICATIONS............................................................   16
         5.4      STOCKHOLDER APPROVAL......................................................   16
         5.5      INVESTORS' RIGHTS AGREEMENT...............................................   16
         5.6      VOTING AGREEMENT..........................................................   16
         5.7      RESTATED CERTIFICATE......................................................   16
         5.8      COLLABORATION AGREEMENT...................................................   16
         5.9      HART-SCOTT-RODINO.........................................................   16

6.       COVENANTS OF THE INVESTOR..........................................................   16

         6.1      TRADING RESTRICTION.......................................................   16
         6.2      COME-ALONG................................................................   18
         6.3      COMPANY'S RIGHT OF FIRST REFUSAL..........................................   19
         6.4      OTHER AGREEMENTS..........................................................   20

7.       MISCELLANEOUS......................................................................   20

         7.1      SURVIVAL OF WARRANTIES....................................................   20
         7.2      TRANSFER; SUCCESSORS AND ASSIGNS..........................................   20
         7.3      GOVERNING LAW.............................................................   21
         7.4      COUNTERPARTS..............................................................   21
         7.5      TITLES AND SUBTITLES......................................................   21
         7.6      NOTICES...................................................................   21
         7.7      FINDER'S FEE..............................................................   22
         7.8      ATTORNEY'S FEES...........................................................   22
         7.9      AMENDMENTS AND WAIVERS....................................................   22
         7.10     EXPENSES..................................................................   22
</TABLE>

                                      -ii-

<PAGE>

                                TABLE OF CONTENTS
                                   (CONTINUED)

<TABLE>
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         7.11     SEVERABILITY..............................................................   23
         7.12     DELAYS OR OMISSIONS.......................................................   23
         7.13     ENTIRE AGREEMENT..........................................................   23
         7.14     CORPORATE SECURITIES LAW..................................................   23
         7.15     CONFIDENTIALITY...........................................................   23
         7.16     QUALIFICATIONS............................................................   24
</TABLE>

                                      -iii-

<PAGE>

                                    EXHIBITS

Exhibit  A  -  Form of Fourth Amended and Restated Certificate of Incorporation

Exhibit  B  -  Schedule of Exceptions to Representations and Warranties

Exhibit  C  -  Form of Third Amended and Restated Investors' Rights Agreement

Exhibit  D  -  Form of Third Amended and Restated Voting Agreement

Exhibit  E  -  Form of Legal Opinion

<PAGE>

                           CYTOKINETICS, INCORPORATED

                   SERIES D PREFERRED STOCK PURCHASE AGREEMENT

         This Series D Preferred Stock Purchase Agreement (the "Agreement") is
made as of the 20th day of June, 2001 (the "Effective Date") by and between
Cytokinetics, Incorporated, a Delaware corporation (the "Company") and Glaxo
Wellcome International B.V., a Netherlands corporation (the "Investor").

                                    RECITALS

         WHEREAS, the Company and the Investor are entering into Collaboration
and License Agreement, contemporaneously with the execution of this Agreement
(the "Collaboration Agreement");

         WHEREAS, pursuant to the transactions contemplated by this Agreement
and in connection with the Collaboration Agreement the Company desires to sell
to the Investor, and the Investor desires to purchase from the Company, shares
of the Company's Series D Preferred Stock;

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

         1.       PURCHASE AND SALE OF SERIES D PREFERRED STOCK.

                  1.1      SALE AND ISSUANCE OF SERIES D PREFERRED STOCK.

                           (a)      The Company has, or will have before the
Closing (as defined in Section 1.2(a) below) authorized the sale and issuance of
up to 2,333,334 shares of Series D Preferred Stock. Subject to the terms and
conditions of this Agreement, the Investor agrees to purchase at the Closing and
the Company agrees to sell and issue to the Investor at the Closing 2,333,334
shares of Series D Preferred Stock at a purchase price of $6.00 per share for an
aggregate purchase price of $14,000,004. The shares of Series D Preferred Stock
issued to the Investor pursuant to this Agreement shall be hereinafter referred
to as the "Stock."

                           (b)      On or before the Closing, as defined below,
the Company shall have adopted and filed with the Secretary of State of the
State of Delaware the Fourth Amended and Restated Certificate of Incorporation,
substantially in the form attached hereto as Exhibit A (the "Restated
Certificate").

                  1.2      CLOSING; DELIVERY.

                           (a)      Closing. The purchase and sale of the Stock
shall take place at the offices of Wilson Sonsini Goodrich & Rosati ("WSGR"),
650 Page Mill Road, Palo Alto, California,

<PAGE>

at 10:00 a.m., on a date within 5 days of the fulfillment of the conditions to
closing contained in Sections 4 and 5 of this Agreement (which time and place
are designated as the "Closing").

                           (b)      Delivery. At the Closing, the Company will
deliver to the Investor a certificate or certificates representing the number of
shares of Stock, against payment of the purchase price therefor by wire transfer
payable to the Company.

         2.       REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
hereby represents and warrants to the Investor that, except as set forth on a
Schedule of Exceptions attached hereto as Exhibit B, which exceptions shall be
deemed to be representations and warranties as if made hereunder:

                  2.1      ORGANIZATION, GOOD STANDING AND QUALIFICATION. The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware and has all requisite corporate power
and authority to carry on its business, to execute and deliver this Agreement,
the Third Amended and Restated Investors' Rights Agreement (the "Investors'
Rights Agreement") substantially in the form attached hereto as Exhibit C, the
Third Amended and Restated Voting Agreement (the "Voting Agreement," and
together with the Investors' Rights Agreement, collectively, the "Ancillary
Agreements") substantially in the form attached hereto as Exhibit D, to issue
and sell the Stock and the Common Stock issuable upon conversion thereof
(together, as applicable, the "Stock"), and to carry out the provisions of this
Agreement, the Investors' Rights Agreement, the Voting Agreement, and the
Restated Certificate. The Company is duly qualified to transact business and is
in good standing in each jurisdiction in which the failure so to qualify would
have a material adverse effect on its business, assets, operations, affairs or
financial condition ("Material Adverse Effect").

                  2.2      CAPITALIZATION.

                           (a)      The authorized capital of the Company will
consist, immediately prior to the Effective Date, of:

                                    (i)      24,800,000 shares of Preferred
Stock, of which 5,550,000 shares have been designated Series A Preferred Stock,
5,300,000 of which are issued and outstanding, and of which 7,000,000 have been
designated Series B Preferred Stock, 6,896,545 of which are issued and
outstanding and 12,250,000 of which have been designated Series C Preferred
Stock, 11,578,980 of which are issued and outstanding immediately prior to the
Effective Date. The rights, privileges and preferences of the Preferred Stock
are as stated in the Third Amended and Restated Certificate of Incorporation
(the "Certificate"). All of the outstanding shares of Preferred Stock have shall
be duly authorized and fully paid and are nonassessable and issued in compliance
with all applicable federal and state securities laws.

                                    (ii)     40,000,000 shares of Common Stock,
3,529,176 shares of which are issued and outstanding immediately prior to the
Effective Date. All of the outstanding shares of Common Stock are duly
authorized and fully paid and are nonassessable and issued in compliance with
all applicable federal and state securities laws.

                                                                             -2-
<PAGE>

                                    (iii)    The Company has reserved 6,332,345
shares of Common Stock for issuance to officers, directors, employees and
consultants of the Company pursuant to its 1997 Stock Plan duly adopted by the
Board of Directors and approved by the Company stockholders (the "Stock Plan").
Of such reserved shares of Common Stock, no shares have been issued pursuant to
restricted stock purchase agreements, and options to purchase 4,639,381 shares
have been granted. Of such options shares, 2,403,066 have been exercised and
2,236,315 are currently outstanding. Options to purchase 1,692,964 shares of
Common Stock remain available for issuance to officers, directors, employees and
consultants pursuant to the Stock Plan.

                                    (iv)     Except for outstanding options
issued pursuant to the Stock Plan or preemptive rights pursuant to the
Investors' Rights Agreement, there are no outstanding options, warrants, rights
(including conversion or preemptive rights and rights of first refusal or
similar rights) or agreements, orally or in writing, for the purchase or
acquisition from the Company of any shares of its capital stock. No stock plan,
stock purchase, stock option or other agreement or understanding between the
Company and any holder of any equity securities or right to purchase equity
securities provides for acceleration or other changes in the vesting provisions
or other terms of such agreement or understanding as the result of any merger,
consolidated sale of stock or assets, change of control or other similar
transaction by the Company.

                           (b)      The authorized capital of the Company as set
forth in the Restated Certificate consists of:

                                    (i)      27,300,000 shares of Preferred
Stock of which 5,550,000 shares shall be designated Series A Preferred Stock,
7,000,000 shall be designated Series B Preferred Stock, 12,250,000 shall be
designated Series C Preferred Stock and 2,500,000 shall be designated Series D
Preferred Stock. The rights, privileges and preferences of the Preferred Stock
shall be as stated in the Restated Certificate.

                                    (ii)     45,000,000 shares of Common Stock.

                  2.3      SUBSIDIARIES. The Company does not currently own or
control, directly or indirectly, any interest in any other corporation,
association, or other business entity.

                  2.4      AUTHORIZATION. All corporate action on the part of
the Company, its officers, directors and stockholders necessary for the
authorization, execution and delivery of this Agreement and the Ancillary
Agreements (collectively the "Agreements"), the performance of all obligations
of the Company hereunder and thereunder and the authorization, issuance and
delivery of the Stock will be taken prior to the Closing, and the Agreements,
when executed and delivered by the Company, shall constitute valid and legally
binding obligations of the Company, enforceable against the Company in
accordance with their terms except (i) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance, and other laws of
general application affecting enforcement of creditors' rights generally, as
limited by laws relating to the availability of specific performance, injunctive
relief, or other equitable remedies, or (ii) to the extent the indemnification
provisions contained in the Investors' Rights Agreement may be limited by
applicable federal or state securities laws.

                                                                             -3-
<PAGE>

                  2.5      VALID ISSUANCE OF STOCK. The Stock that is being
issued to the Investor hereunder, when issued, sold and delivered in accordance
with the terms hereof for the consideration expressed herein, will be duly and
validly issued, fully paid and nonassessable and free of restrictions on
transfer other than restrictions on transfer under this Agreement, the
Investors' Rights Agreement and applicable state and federal securities laws.
Based in part upon the representations of the Investor in this Agreement and
subject to the provisions of Section 2.6 below, the Stock will be issued in
compliance with all applicable federal and state securities laws. The Common
Stock issuable upon conversion of the Stock shall be, immediately prior to the
Closing, duly and validly reserved for issuance, and upon issuance in accordance
with the terms of the Restated Certificate, shall be duly and validly issued,
fully paid and nonassessable and free of restrictions on transfer other than
restrictions on transfer under this Agreement, the Investors' Rights Agreement
and applicable federal and state securities laws and will be issued in
compliance with all applicable federal and state securities laws.

                  2.6      GOVERNMENTAL CONSENTS. No consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any federal, state or local governmental authority on the part of
the Company is required in connection with the consummation of the transactions
contemplated by this Agreement, except for filings pursuant to Section 25102(f)
of the California Corporate Securities Law of 1968, as amended, and the rules
thereunder or other applicable state securities laws.

                  2.7      LITIGATION. There is no action, suit, proceeding or
investigation pending or, to the Company's knowledge, currently threatened
against the Company or any of its subsidiaries that questions the validity of
the Agreements or the right of the Company to enter into them, or to consummate
the transactions contemplated hereby or thereby, or that might result, either
individually or in the aggregate, in any Material Adverse Effect, or any change
in the current equity ownership of the Company, nor is the Company aware that
there is any basis for the foregoing. The Company is not a party to, or subject
to the provisions of, any material order, writ, injunction, judgment or decree
of any court or government agency or instrumentality. There is no action, suit,
proceeding or investigation by the Company currently pending or which the
Company intends to initiate.

                  2.8      INTELLECTUAL PROPERTY. To its knowledge (but without
conducting any special investigation or patent search), the Company owns or
possesses sufficient legal rights to all patents, trademarks, service marks,
tradenames, copyrights, trade secrets, licenses, information and proprietary
rights and processes (collectively, "Intellectual Property") necessary for its
business without any conflict with, or infringement of, the rights of others.
There are no outstanding options, licenses or agreements of any kind relating to
the foregoing, nor is the Company bound by or a party to any options, licenses
or agreements of any kind with respect to the Intellectual Property of any other
person or entity other than such licenses or agreements arising from the
purchase of "off the shelf" or standard products. The Company is not in breach
of any provision of any option, license or agreement as would have now or with
the passage of time a Material Adverse Effect. The Company has not received any
communications alleging that the Company has violated or infringed or, by
conducting its business, would violate or infringe any of the Intellectual
Property of any other person or entity. Neither the Company nor any of its
licensors is a party to any proceeding or litigation

                                                                             -4-
<PAGE>

relating to any Intellectual Property owned by or licensed to the Company. The
Company is not a party to any proceeding or litigation relating to the
Intellectual Property of any other person or entity. The Company is not aware
that any of its employees is obligated under any contract (including licenses,
covenants or commitments of any nature) or other agreement, or subject to any
judgment, decree or order of any court or administrative agency, that would
interfere with the use of such employee's best efforts to promote the interest
of the Company or that would conflict with the Company's business. Neither the
execution or delivery of this Agreement, nor the carrying on of the Company's
business by the employees of the Company, nor the conduct of the Company's
business as currently proposed, will, to the Company's knowledge, conflict with
or result in a breach of the terms, conditions, or provisions of, or constitute
a default under, any contract, covenant or instrument under which any such
employee is now obligated. The Company does not believe it is or will be
necessary to use any inventions, trade secrets or proprietary information of any
of its consultants, or of its employees (or persons it currently intends to
hire) made prior to their employment by the Company.

                  2.9      COMPLIANCE WITH OTHER INSTRUMENTS.

                           (a)      The Company is not in violation or default
of any provisions of its Certificate or Bylaws or of any instrument, judgment,
order, writ, decree or contract to which it is a party or by which it is bound
or of any material provision of federal or state statute, rule or regulation
applicable to the Company. The execution, delivery and performance of the
Agreements and the consummation of the transactions contemplated hereby or
thereby will not result in any such violation or be in material conflict with or
constitute, with or without the passage of time and giving of notice, either a
material default under any such provision, instrument, judgment, order, writ,
decree or contract or an event which results in the creation of any material
lien, charge or encumbrance upon any assets of the Company or the suspension,
revocation, impairment, forfeiture, or nonrenewal of any material permit,
license, authorization, or approval to the Company, its business or operations
or any of its assets or properties.

                           (b)      The Company has avoided every condition, and
has not performed any act, the occurrence of which would result in the Company's
loss of any right granted under any license, distribution agreement or other
agreement, the loss of which would have a Material Adverse Effect.

                  2.10     AGREEMENTS; ACTION.

                           (a)      There are no agreements, understandings or
proposed transactions between the Company and any of its officers, directors,
affiliates, or any affiliate thereof.

                           (b)      Except for agreements explicitly
contemplated by the Agreements, there are no agreements, understandings,
instruments, contracts or proposed transactions to which the Company is a party
or by which it is bound that involve (i) obligations (contingent or otherwise)
of, or payments to, the Company in excess of, $100,000, (ii) the license of any
patent, copyright, trade secret or other proprietary right to or from the
Company, (iii) the grant of rights to manufacture, produce, assemble, license,
market, or sell its products to any other person or affect the

                                                                             -5-
<PAGE>

Company's exclusive right to develop, manufacture, assemble, distribute, market
or sell its products, or (iv) indemnification by the Company with respect to
infringements of proprietary rights (other than indemnification obligations
arising from purchase or sale agreements entered into in the ordinary course of
business).

                           (c)      The Company has not (i) declared or paid any
dividends, or authorized or made any distribution upon or with respect to any
class or series of its capital stock, (ii) incurred any indebtedness for money
borrowed or incurred any other liabilities individually in excess of $50,000 or
in excess of $100,000 in the aggregate, (iii) made any loans or advances to any
person, other than ordinary advances for travel expenses, or (iv) sold,
exchanged or otherwise disposed of any of its assets or rights, other than the
sale of its inventory in the ordinary course of business. For purposes of this
subsection (c) and subsection (b) above, all indebtedness, liabilities,
agreements, understandings, instruments, contracts and proposed transactions
involving the same person or entity (including persons or entities the Company
has reason to believe are affiliated therewith) shall be aggregated for the
purpose of meeting the minimum dollar amounts of such subsections.

                           (d)      The Company is not a party to and is not
bound by any contract, agreement or instrument, or subject to any restriction
under its Certificate or Bylaws, that would have a Material Adverse Effect.

                           (e)      The Company has not engaged in the past
three (3) months in any discussion (i) with any representative of any
corporation or corporations regarding the merger of the Company with or into any
such corporation or corporations, (ii) with any representative of any
corporation, partnership, association or other business entity or any individual
regarding the sale, conveyance or disposition of all or substantially all of the
assets of the Company or a transaction or series of related transactions in
which more than fifty percent (50%) of the voting power of the Company would be
disposed of, or (iii) regarding any other form of liquidation, dissolution or
winding up of the Company.

                  2.11     DISCLOSURE. The Company has provided the Investor
with all the information that the Investor has requested for deciding whether to
acquire the Stock and all information that the Company believes is reasonably
necessary to enable the Investor to make such a decision. No representation or
warranty of the Company contained in this Agreement and the exhibits attached
hereto or any certificate furnished or to be furnished to the Investor at the
Closing or Effective Date (when read together) contains or shall contain any
untrue statement of a material fact or omits or shall omit to state a material
fact necessary in order to make the statements contained herein or therein not
misleading in light of the circumstances under which they were made. To the
Company's knowledge, there are no facts which (individually or in the aggregate)
would have a Material Adverse Effect that have not been set forth in the
Agreements or the Exhibits hereto and thereto.

                  2.12     NO CONFLICT OF INTEREST. The Company is not indebted,
directly or indirectly, to any of its officers, directors, stockholders,
employees or consultants, or to their respective spouses or children, in any
amount whatsoever other than in connection with expenses or advances of expenses
incurred in the ordinary course of business or relocation expenses of employees.
To the

                                                                             -6-
<PAGE>

Company's knowledge, none of the Company's officers, directors, stockholders,
employees or consultants, or any members of their immediate families, are,
directly or indirectly, indebted to the Company or have any direct or indirect
ownership interest in any firm or corporation with which the Company is
affiliated or with which the Company has a business relationship, or any firm or
corporation which competes with the Company except that officers, directors,
stockholders, employees and consultants of the Company may own stock in (but not
exceeding two percent of the outstanding capital stock of) any publicly traded
companies that may compete with the Company. To the Company's knowledge, none of
the Company's officers, directors or stockholders or any members of their
immediate families are, directly or indirectly, interested in any material
contract with the Company. The Company is not a guarantor or indemnitor of any
indebtedness of any other person, firm or corporation.

                  2.13     RIGHTS OF REGISTRATION. Except as contemplated in the
Second Amended and Restated Investors' Rights Agreement dated as of November 22
and 24, 2000, and the Investors' Rights Agreement the Company is not under any
obligation and has not granted rights to register under the Securities Act any
of its presently outstanding securities or any of its securities that may
subsequently be issued. Except as contemplated in this Agreement, the Second
Amended and Restated Voting Agreement dated as of November 22 and 24, 2000, and
the Voting Agreement the Company has not, and to the knowledge of the Company no
shareholder of the Company has, entered into any agreement with respect to the
voting of shares of capital stock of the Company.

                  2.14     TITLE TO PROPERTY AND ASSETS. Except (a) as reflected
in the Financial Statements (defined in paragraph 2.15), (b) for liens for
current taxes not yet delinquent, (c) for liens imposed by law and incurred in
the ordinary course of business for obligations not past due to carriers,
warehousemen, laborers, materialmen and the like, (d) for liens in respect of
pledges or deposits under workers' compensation laws or similar legislation, or
(e) for minor defects in title, none of which, individually or in the aggregate,
materially interferes with the use of such property, the Company owns its
property and assets free and clear of all mortgages, liens, loans and
encumbrances. With respect to the property and assets it leases, the Company is
in compliance with such leases and, to its knowledge, holds a valid leasehold
interest free of any liens, claims or encumbrances, subject to clauses (a)-(e)
above. The Company does not own and has not agreed to purchase any real
property.

                  2.15     FINANCIAL STATEMENTS. The Company has made available
to the Investor the Company's audited financial statements (including balance
sheet, income statement and statement of cash flows) as of December 31, 2000 for
the fiscal year then ended, and its unaudited financial statements (including
balance sheet, income statement and statement of cash flows) as of March 31,
2001 and for the three-month period then ended (collectively, the "Financial
Statements"). The Financial Statements have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis
throughout the periods indicated, except that the unaudited Financial Statements
may not contain all footnotes required by generally accepted accounting
principles. The Financial Statements fairly present the financial condition and
operating results of the Company as of the dates, and for the periods, indicated
therein, subject, in the case of unaudited Financial Statements, to normal
year-end audit adjustments. Except as set forth in the Financial

                                                                             -7-
<PAGE>

Statements, the Company has no material liabilities, contingent or otherwise,
other than (i) liabilities incurred in the ordinary course of business
subsequent to March 31, 2001 and (ii) obligations under contracts and
commitments incurred in the ordinary course of business and not required under
generally accepted accounting principles to be reflected in the Financial
Statements, which, in both cases, individually or in the aggregate are not
material to the financial condition or operating results of the Company. Except
as disclosed in the Financial Statements, the Company is not a guarantor or
indemnitor of any indebtedness of any other person, firm, or corporation. The
Company maintains and will continue to maintain a standard system of accounting
established and administered in accordance with generally accepted accounting
principles.

                  2.16     CHANGES. After March 31, 2001, there has not been:

                           (a)      any change in the assets, liabilities,
financial condition or operating results of the Company from that reflected in
the Financial Statements, except changes in the ordinary course of business;

                           (b)      any damage, destruction or loss, whether or
not covered by insurance, materially and adversely affecting the business,
properties, prospects, or financial condition of the Company (as such business
is presently conducted and as it is presently proposed to be conducted);

                           (c)      any waiver or compromise by the Company of a
valuable right or of a material debt owed to it;

                           (d)      any satisfaction or discharge of any lien,
claim, or encumbrance or payment of any obligation by the Company, except in the
ordinary course of business and that is not material to the business,
properties, prospects or financial condition of the Company (as such business is
presently conducted and as it is presently proposed to be conducted);

                           (e)      any material change to a material contract
or agreement by which the Company or any of its assets is bound or subject;

                           (f)      any material change in any compensation
arrangement or agreement with any employee, officer, director or stockholder;

                           (g)      any sale, assignment or transfer of any
patents, trademarks, copyrights, trade secrets or other intangible assets;

                           (h)      any mortgage, pledge, transfer of a security
interest in, or lien, created by the Company, with respect to any of its
material properties or assets, except liens for taxes not yet due or payable;

                           (i)      any declaration, setting aside or payment or
other distribution in respect to any of the Company's capital stock, or any
direct or indirect redemption, purchase, or other acquisition of any of such
stock by the Company;

                                                                             -8-
<PAGE>

                           (j)      to the Company's knowledge, any other event
or condition of any character that might have a Material Adverse Effect;

                           (k)      any arrangement or commitment by the Company
to do any of the things described in this Section 2.16;

                           (l)      any resignation or termination of employment
of any officer or key employee of the Company; or

                           (m)      any loans or guarantees made by the Company
to or for the benefit of its employees, shareholders, officers or directors, or
any members of their immediate families, other than travel advances and other
advances made in the ordinary course of its business.

                  2.17     EMPLOYEE BENEFIT PLANS.

                           (a)      The Company does not have any Employee
Benefit Plan as defined in the Employee Retirement Income Security Act of 1974.

                           (b)      There is no contract, agreement, plan or
arrangement covering any employee of the Company that, individually or
collectively, could, in connection with the transactions contemplated herein
accelerate the time of payment or vesting of any payment, forgive any
indebtedness, or increase the amount of any compensation due any employee.

                  2.18     TAX MATTERS. The Company has timely filed all returns
("Tax Returns") due with respect to all federal, state, county, local, foreign
and other taxes including, without limitation, income taxes, estimated taxes,
excise taxes, sales taxes, use taxes, gross receipts taxes, franchise taxes,
employment and payroll related taxes, property taxes and import duties, whether
or not measured in whole or in part by net income (hereinafter, "Taxes" or,
individually, a "Tax") required to be filed by it through the date hereof unless
an extension to file any such Tax Return has been filed by the Company. All such
Tax Returns are true and correct in all material respects and all Taxes shown as
due on such Tax Return have been paid, other than Taxes being disputed by the
Company in good faith for which adequate reserves have been made in accordance
with GAAP. With respect to all Tax Returns of the Company, (i) there is no
unassessed Tax deficiency proposed or, to the knowledge of the Company,
threatened against the Company and (ii) no audit is in progress with respect to
any return for Taxes, no extension of time is in force with respect to any date
on which any return for Taxes was or is to be filed and no waiver or agreement
is in force for the extension of time for the assessment or payment of any Tax.
All provisions for Tax liabilities of the Company with respect to the Financial
Statements have been made in accordance with GAAP consistently applied, and all
liabilities for Taxes of the Company attributable to periods prior to or ending
on the Closing Date have been adequately provided for on the Financial Statement
in accordance with GAAP. There are no liens for Taxes on the assets of the
Company other than liens for Taxes not yet due and payable. The Company has
never been a "United States real property holding corporation" (a "USRPHC") as
that term is defined in Section 897(c)(2) of the Internal Revenue Code of 1986,
as amended (the "Code"), and treasury regulations promulgated thereunder. The
Company is not a "foreign person" within the meaning of Section 1445 of the
Code.

                                                                             -9-
<PAGE>

                  2.19     INSURANCE. The Company has in full force and effect
fire and casualty insurance policies, with extended coverage, sufficient in
amount (subject to reasonable deductibles) to allow it to replace any of its
properties that might be damaged or destroyed. The Company has obtained life
insurance for James Sabry, and any other employees or consultants to the Company
deemed to be key to the success of the Company as determined in good faith by
the Company's Board of Directors.

                  2.20     LABOR AGREEMENTS AND ACTIONS. The Company is not
bound by or subject to (and none of its assets or properties is bound by or
subject to) any written or oral, express or implied, contract, commitment or
arrangement with any labor union, and no labor union has requested or, to the
knowledge of the Company, has sought to represent any of the employees,
representatives or agents of the Company. There is no strike or other labor
dispute involving the Company pending, or to the knowledge of the Company
threatened, which could have a Material Adverse Effect, nor is the Company aware
of any labor organization activity involving its employees. The employment of
each officer and employee of the Company is terminable at the will of the
Company. The Company has complied in all material respects with all applicable
state and federal equal employment opportunity laws and with other laws related
to employment. To the Company's knowledge, no employee of the Company, nor any
consultant with whom the Company has contracted, is in violation of any term of
any employment contract, proprietary information agreement or any other
agreement relating to the right of any such individual to be employed by, or to
contract with, the Company because of the nature of the business to be conducted
by the Company; and to the Company's knowledge the continued employment by the
Company of its present employees, and the performance of the Company's contracts
with its independent contractors, will not result in any such violation. The
Company has not received any notice alleging that any such violation has
occurred. No employee of the Company has been granted the right to continued
employment by the Company or to any material compensation following termination
of employment with the Company. To the Company's knowledge, no officer or key
employee, or any group of key employees, intends to terminate their employment
with the Company. The Company does not have a present intention to terminate the
employment of any officer, key employee or group of key employees.

                  2.21     CONFIDENTIAL INFORMATION AND INVENTION ASSIGNMENT
AGREEMENTS. Each employee, consultant and officer of the Company has executed an
agreement with the Company regarding confidentiality and proprietary
information. Except as recorded on such agreements, no employee, officer or
consultant of the Company has excluded works or inventions made prior to his or
her employment with the Company from his or her assignment of inventions to the
Company pursuant to such agreements. The Company is not aware that any of its
employees or consultants is in violation thereof.

                  2.22     PERMITS. The Company has all material franchises,
permits, licenses and any similar authority necessary for the conduct of its
business. The Company is not in default in any material respect under any of
such franchises, permits, licenses or other similar authority.

                  2.23     CORPORATE DOCUMENTS. The Restated Certificate and
Bylaws of the Company on the Closing shall be in the form provided to counsel
for the Investor. The minute

                                                                            -10-
<PAGE>

books of the Company contain minutes of all meetings of directors and
stockholders and all actions by written consent without a meeting by the
directors and stockholders since the date of incorporation and reflects all
actions by the directors (and any committee of directors) and stockholders with
respect to all transactions referred to in such minutes accurately in all
material respects.

                  2.24     ENVIRONMENTAL AND SAFETY LAWS. The Company is not in
violation of any applicable material statute, law or regulation relating to the
environment or occupational health and safety, and, to its knowledge, no
material expenditures are or will be required in order to comply with any such
existing statute, law or regulation, and there is no material civil, criminal or
administrative judgment, action, suit, demand, claim, hearing, notice of
violation, investigation, proceeding, notice or demand letter pending or, to the
Company's knowledge, threatened against the Company pursuant to any such
statute, law or regulation. No Hazardous Materials (as defined below) are used
or have been used, stored, or disposed of by the Company or, to the Company's
knowledge, by any other person or entity on any property owned, leased or used
by the Company. For the purposes of the preceding sentence, "Hazardous
Materials" shall mean (a) materials which are listed or otherwise defined as
"hazardous" or "toxic" under any applicable local, state, federal and/or foreign
laws and regulations that govern the existence and/or remedy of contamination on
property, the protection of the environment from contamination, the control of
hazardous wastes, or other activities involving hazardous substances, including
building materials or (b) any petroleum products or nuclear materials.

                  2.25     PRIVATE OFFERING. No form of general solicitation or
general advertising was used by the Company or its representatives in connection
with the offer or sale of the Stock. No registration of the Stock or the shares
of common stock issuable upon conversion thereof, pursuant to the provisions of
the Securities Act or any state securities or "blue sky" laws, will be required
by offer, sale or issuance of the Stock. The Company agrees that neither it, nor
anyone acting on its behalf, shall offer to sell the Stock or any other
securities of the Company so as to require the registration of the Stock or the
shares of Common Stock issuable upon conversion thereof pursuant to the
provisions of the Securities Act or any state securities or "blue sky" laws,
unless such Stock or other securities are so registered.

                  2.26     OUTSTANDING BORROWING. Except as set forth in the
Financial Statements, the Schedule of Exceptions sets forth the amount of all
Indebtedness of the Company as of the date hereof, the liens that relate to such
Indebtedness and that encumber the Company's assets and the name of each lender
thereof. No holder of Indebtedness of the Company is entitled to any voting
rights in any matters voted upon by the holders of the Common Stock.
"Indebtedness" means, as to any person, (a) all obligations of such person for
borrowed money (including, without limitation, reimbursement and all other
obligations with respect to surety bonds, letters of credit and bankers'
acceptances, whether or not matured), (b) all obligations of such person to pay
the deferred purchase price of property or services, except trade accounts
payable and accrued commercial or trade liabilities arising in the ordinary
course of business, (c) all interest rate and currency swaps, caps, collars and
similar agreements or hedging devices under which payments are obligated to be
made by such person, whether periodically or upon the happening of a
contingency, (d) all indebtedness

                                                                            -11-
<PAGE>

created or arising under any conditional sale or other title retention agreement
with respect to property acquired by such person (even though the rights and
remedies of the seller or lender under such agreement in the event of default
are limited to repossession or sale of such property), (e) all obligations of
such person under leases which have been or should be, in accordance with GAAP,
recorded as capital leases, (f) all indebtedness secured by any Lien (other than
Liens in favor of lessors under leases other than leases included in clause (e))
on any property or asset owned or held by that person regardless of whether the
indebtedness secured thereby shall have been assumed by that person or is
non-recourse to the credit of that person, and (g) any material contingent
obligation of such person.

         3.       REPRESENTATIONS AND WARRANTIES OF THE INVESTORS. The Investor
hereby represents and warrants to the Company, that:

                  3.1      AUTHORIZATION. Such Investor has full power and
authority to enter into this Agreement. The Agreements, when executed and
delivered by the Investor, will constitute valid and legally binding obligations
of the Investor, enforceable in accordance with their terms, except (a) as
limited by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance, and any other laws of general application affecting
enforcement of creditors' rights generally, and as limited by laws relating to
the availability of a specific performance, injunctive relief, or other
equitable remedies, or (b) to the extent the indemnification provisions
contained in the Investors' Rights Agreement may be limited by applicable
federal or state securities laws.

                  3.2      PURCHASE ENTIRELY FOR OWN ACCOUNT. This Agreement is
made with the Investor in reliance upon the Investor's representation to the
Company, which by the Investor's execution of this Agreement, the Investor
hereby confirms, that the Stock to be acquired by the Investor will be acquired
for investment for the Investor's own account, not as a nominee or agent, and
not with a view to the resale or distribution of any part thereof, and that the
Investor has no present intention of selling, granting any participation in, or
otherwise distributing the same. By executing this Agreement, the Investor
further represents that the Investor does not presently have any contract,
undertaking, agreement or arrangement with any person to sell, transfer or grant
participations to such person or to any third person, with respect to any of the
Stock. The Investor has not been formed for the specific purpose of acquiring
the Stock.

                  3.3      DISCLOSURE OF INFORMATION. The Investor believes it
has received all the information it considers necessary or appropriate for
deciding whether to purchase the Stock. The Investor has had an opportunity to
discuss the Company's business, management, financial affairs and the terms and
conditions of the offering of the Stock with the Company's management. The
Investor understands that such discussions, as well as any other written
information delivered by the Company to the Investor, were intended to describe
the aspects of the Company's business which it believes to be material.

                  3.4      RESTRICTED SECURITIES. The Investor understands that
the Stock has not been, and will not be, registered under the Securities Act, by
reason of a specific exemption from the registration provisions of the
Securities Act which depends upon, among other things, the bona fide nature of
the investment intent and the accuracy of the Investor's representations as
expressed

                                                                            -12-
<PAGE>

herein. The Investor understands that the shares of Stock are "restricted
securities" under applicable U.S. federal and state securities laws and that,
pursuant to these laws, the Investor must hold the Stock indefinitely unless
they are registered with the Securities and Exchange Commission and qualified by
state authorities, or an exemption from such registration and qualification
requirements is available. The Investor acknowledges that the Company has no
obligation to register or qualify the Stock for resale except as set forth in
the Investors' Rights Agreement. The Investor further acknowledges that if an
exemption from registration or qualification is available, it may be conditioned
on various requirements including, but not limited to, the time and manner of
sale, the holding period for the Stock, and on requirements relating to the
Company which are outside of the Investor's control, and which the Company is
under no obligation and may not be able to satisfy.

                  3.5      NO PUBLIC MARKET. The Investor understands that no
public market now exists for any of the securities issued by the Company, and
that the Company has made no assurances that a public market will ever exist for
the Stock.

                  3.6      LEGENDS. The Investor understands that the
certificate or certificates representing the Stock and any certificates
evidencing securities issued in respect of or exchange for the Stock, may bear
one or all of the following legends in substantially the form listed below:

                           (a)      "THE SHARES REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN
ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE
OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN
EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A
FORM SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER
THE SECURITIES ACT OF 1933."

                           (b)      Any legend set forth in the other
Agreements.

                           (c)      Any legend required by the Blue Sky laws of
any state to the extent such laws are applicable to the shares represented by
the certificate so legended.

                  3.7      ACCREDITED INVESTOR. The Investor is an accredited
investor as defined in Rule 501(a) of Regulation D promulgated under the
Securities Act.

                  3.8      FOREIGN INVESTORS. If the Investor is not a United
States person (as defined by Section 7701(a)(30) of the Internal Revenue Code of
1986, as amended), such Investor hereby represents that it has satisfied itself
as to the full observance of the laws of its jurisdiction in connection with any
invitation to subscribe for the Stock or any use of this Agreement, including
(i) the legal requirements within its jurisdiction for the purchase of the
Stock, (ii) any foreign exchange restrictions applicable to such purchase, (iii)
any governmental or other consents that may need to be obtained, and (iv) the
income tax and other tax consequences, if any, that may be relevant to the
purchase, holding, redemption, sale, or transfer of the Stock. Such Investor's
subscription and payment for and continued beneficial ownership of the Stock,
will not violate any applicable securities or other laws of the Investor's
jurisdiction.

                                                                            -13-
<PAGE>

         4.       CONDITIONS OF THE INVESTORS' OBLIGATIONS AT CLOSING. The
obligations of the Investor to the Company under this Agreement are subject to
the fulfillment, on or before the Closing, of each of the following conditions,
unless otherwise waived:

                  4.1      REPRESENTATIONS AND WARRANTIES.

                           (a)      The representations and warranties of the
Company contained in Sections 2.4, 2.5 and 2.6 shall be true and correct in all
material respects on and as of the Closing except for the representations and
warranties which are qualified as to materiality by their terms, which shall be
true and correct on and as of the Closing.

                           (b)      The representations and warranties of the
Company contained in Section 2, other than the representations and warranties
contained in Sections 2.4, 2.5 and 2.6, shall be true and correct in all
material respects on and as of the Effective Date except for the representations
and warranties which are qualified as to materiality by their terms, which shall
be true and correct on and as of the Effective Date.

                  4.2      PERFORMANCE. The Company shall have performed and
complied in all material respects with all covenants, agreements, obligations
and conditions contained in this Agreement that are required to be performed or
complied with by it on or before the Closing.

                  4.3      COMPLIANCE CERTIFICATE. The President of the Company
shall deliver to the Investor at the Closing a certificate dated as of the
Closing certifying that the conditions specified in Sections 4.1, 4.2 and 4.4
have been fulfilled.

                  4.4      QUALIFICATIONS. All authorizations, approvals or
permits, if any, of any governmental authority or regulatory body of the United
States or of any state that are required in connection with the lawful issuance
and sale of the Stock pursuant to this Agreement shall be obtained and effective
as of the Closing.

                  4.5      OPINION OF COMPANY COUNSEL. The Investor shall have
received from WSGR, counsel for the Company, an opinion, dated as of the
Closing, in substantially the form of Exhibit E.

                  4.6      INVESTORS' RIGHTS AGREEMENT. The Company and the
required holders of Series A Preferred Stock, Series B Preferred Stock and
Series C Preferred Stock shall have executed and delivered the Investors' Rights
Agreement, substantially in the form attached hereto as Exhibit C.

                  4.7      VOTING AGREEMENT. The Company, the required holders
of Series A Preferred Stock, Series B Preferred Stock and Series C Preferred
Stock and the Founders shall have executed and delivered the Voting Agreement
substantially in the form attached hereto as Exhibit D.

                                                                            -14-
<PAGE>

                  4.8      RESTATED CERTIFICATE. The Company shall have filed
the Restated Certificate with the Secretary of State of Delaware on or prior to
the Closing, which shall continue to be in full force and effect as of the
Closing.

                  4.9      SECRETARY'S CERTIFICATE. The Investor shall have
received a certificate from the Company, in form and substance satisfactory to
the Investor, dated as of the Closing Date and signed by the Secretary or an
Assistant Secretary of the Company, certifying (a) that the attached copies of
the Restated Certificate, the Bylaws, resolutions of the Board of Directors and
resolutions of the stockholders of the Company approving the Agreements and the
transactions contemplated thereby, are all true, complete and correct and remain
unamended and in full force and effect, (b) as to the incumbency and specimen
signature of each officer of the Company executing the Agreements, and any other
document delivered in connection herewith on behalf of the Company and (c) that
the good standing of the Company, as evidenced by the attached Good Standing
certificates issued by the Delaware and California Secretaries of State, dated
with ten (10) business days of the Closing, remains in effect for such
jurisdictions.

                  4.10     COLLABORATION AGREEMENT. The Company and the Investor
shall have executed and delivered to each other the Collaboration Agreement and
such Collaboration Agreement shall not have been terminated.

                  4.11     HART-SCOTT-RODINO. No order to restrain, enjoin or
otherwise prevent the consummation of this Agreement, or the transactions
contemplated hereby or by the Collaboration Agreement shall have been entered by
any court or administrative body, and all applicable waiting periods under the
Hart-Scott-Rodino Antitrust Improvement Act of 1976 (as amended from time to
time, the "HSR Act") shall have expired or terminated.

                  4.12     GOOD STANDING. The Investor shall have received
certificates of Good Standing issued by the Delaware and California Secretaries
of State showing that the Company is in good standing in such jurisdictions,
dated with ten (10) business days of the Closing.

         5.       CONDITIONS OF THE COMPANY'S OBLIGATIONS AT CLOSING. The
obligations of the Company to the Investor under this Agreement are subject to
the fulfillment, on or before the Closing, of each of the following conditions,
unless otherwise waived:

                  5.1      REPRESENTATIONS AND WARRANTIES.

                           (a)      The representations and warranties of the
Investor contained in Section 3.3 shall be true and correct in all material
respects on and as of the Effective Date, except for representations and
warranties which are qualified as to materiality by their terms, which shall be
true and correct on and as of the date of the Effective Date.

                           (b)      The representations and warranties of the
Investor contained in Section 3, other than those representations and warranties
contained in Section 3.3, shall be true and correct in all material respects on
and as of the Closing, except for representations and warranties

                                                                            -15-
<PAGE>

which are qualified as to materiality by their terms, which shall be true and
correct on and as of the date of the Closing.

                  5.2      PERFORMANCE. All covenants, agreements and conditions
contained in this Agreement to be performed by the Investor on or prior to the
Closing shall have been performed or complied with in all material respects.

                  5.3      QUALIFICATIONS. All authorizations, approvals or
permits, if any, of any governmental authority or regulatory body of the United
States or of any state that are required in connection with the lawful issuance
and sale of the Stock pursuant to this Agreement shall be obtained and effective
as of the Closing.

                  5.4      STOCKHOLDER APPROVAL. The Company shall have obtained
the vote or written consent from the stockholders of the Company required to
approve the adoption and filing of the Restated Certificate, and otherwise
required to carry out the transaction contemplated by this Agreement, the
Ancillary Agreements and the Collaboration Agreement.

                  5.5      INVESTORS' RIGHTS AGREEMENT. The Investor and the
required holders of Series A Preferred Stock, Series B Preferred Stock and
Series C Preferred Stock shall have executed and delivered the Investors' Rights
Agreement.

                  5.6      VOTING AGREEMENT. The Investo, the Founders and the
required holders of Series A Preferred Stock, Series B Preferred Stock, Series C
Preferred Stock shall have executed and delivered the Voting Agreement.

                  5.7      RESTATED CERTIFICATE. The Restated Certificate filed
with the Secretary of State of Delaware prior to the Closing shall be in full
force and effect.

                  5.8      COLLABORATION AGREEMENT. The Company and the Investor
shall have executed and delivered to each other the Collaboration Agreement and
such Collaboration Agreement shall not have been terminated.

                  5.9      HART-SCOTT-RODINO. No order to restrain, enjoin or
otherwise prevent the consummation of this Agreement, or the transactions
contemplated hereby or by the Collaboration Agreement, shall have been entered
by any court or administrative body, and all applicable waiting periods under
the HSR Act shall have expired or terminated.

         6.       COVENANTS OF THE INVESTOR.

                  6.1      TRADING RESTRICTIONS.

                           (a)      PURCHASES OF COMPANY STOCK.

                                    (i)      The Investor agrees that neither it
nor any of its affiliates (for purposes of this Section 6, collectively, the
"Investor") will, for a period (the "No-Buy Period")

                                                                            -16-
<PAGE>

commencing on the date hereof and ending three (3) years after the closing of
the first firm commitment public offering of Common Stock of the Company to the
general public pursuant to an effective registration statement filed with the
SEC under the Securities Act (the "IPO"), acquire in any manner, directly or
indirectly, any securities of the Company, except pursuant to a transaction
approved by the Board of Directors of the Company, provided that, for a period
of 10 years after the expiration of the No-Buy Period, the Investor shall under
no circumstances, directly or indirectly, acquire any equity securities of the
Company that would cause the Investor's holdings of the Company's equity
securities, on an as-converted basis, to exceed the percentage of the Company's
fully diluted outstanding equity securities represented by the as-converted
Stock immediately after the closing of the IPO.

                                    (ii)     TENDER OFFERS.

                                             (1)      Notwithstanding anything
to the contrary in this Section 6.1(a), if a third party initiates an
unsolicited offer to purchase 30% or more of any class or series of the
Company's publicly traded securities (a "Hostile Tender Offer"), the Investor
may purchase the Company's securities that are the subject of the Hostile Tender
Offer without regard to the restrictions on the Investor set forth in this
Section 6.1(a).

                                             (2)      Notwithstanding anything
to the contrary in this Section 6.1(a), if the Board of Directors of the Company
approves an Acquisition, as defined below in Section 6.2(b)(i), after the
Research Term (as such term is defined in the Collaboration Agreement, but not
to include any extensions of the initial Research Term (the "Restriction
Term")), the Investor may offer to purchase, and consummate the purchase of,
all, but not less than all, of the Company's outstanding securities without
regard to the restrictions on the Investor set forth in this Section 6.1(a).

                           (b)      SALES OF COMPANY STOCK.

                                    (i)      In addition to the foregoing, the
Investor agrees that during the Restriction Term, the Investor shall not offer,
sell, contract to sell, pledge, grant any option to purchase, make any short
sale or otherwise dispose of in any manner, either directly or indirectly
("Sale" or "Sell"), any securities of the Company held by Investor ("Covenant
Shares"), provided that, nothing in the foregoing sentence shall prevent the
Investor from participating in, and selling the Covenant Shares through,
registrations of the Company's Common Stock ("Common Stock") pursuant to the
provisions of Section 1.3 of the Investors' Rights Agreement.

                                    (ii)     After the expiration of such
Restriction Term the Investor and the Company agree and acknowledge that it is
in their mutual interest that disposition of the Covenant Shares be accomplished
in a manner that does not disrupt or undermine the trading market for Common
Stock (including any undue adverse reaction to the fact of sale of Covenant
Shares by the investor as a research collaborator of the Company), and the
parties will work together to explore methods of disposition in order to achieve
such goal.

                                                                            -17-
<PAGE>

                                    (iii)    Notwithstanding anything to the
contrary in this Section 6.1(b), after the IPO of the Company, the Investor may
sell shares of Common Stock if (i) the publicly traded fair market value per
share of publicly traded shares of Common Stock, at the time of the sale by the
Investor of Common Stock, is greater than two and a half times the per share
price (as adjusted for combination, stock splits, stock dividends, subdivisions
or split-ups) that shares of Common Stock were initially offered to the public
in the IPO (the "IPO Price") and (ii) no sales by the Investor of shares of
Common Stock are at a price per share less than two and a half times (as
adjusted for combination, stock splits, stock dividends, subdivisions or
split-ups) the IPO Price, provided that, the aggregate gross proceeds to the
Investor of all sales of Common Stock pursuant to this Section 6.1(b)(iii) shall
not exceed $14,000,004. If the Investor intends to sell any shares of Common
Stock held by it pursuant to the provisions of this Section 6.1(b)(iii), the
Investor and the Company agree and acknowledge that it is in their mutual
interest that disposition of the Covenant Shares be accomplished in a manner
that does not disrupt or undermine the trading market for the Company's Common
Stock (including any undue adverse reaction to the fact of sale of Covenant
Shares by the investor as a research collaborator of the Company), and the
parties will work together to explore methods of disposition in order to achieve
such goal.

                  6.2      COME-ALONG.

                           (a)      COME-ALONG. The Investor hereby agrees that
at any meeting of the stockholders of the Company, however called, and in any
written action by consent of stockholders of the Company, the Investor shall
vote all Covenant Shares of the Company entitled to vote directly or indirectly
held by the Investor as directed by the holders of a majority of the outstanding
Registrable Securities, as such term is defined in the Investor Rights
Agreement, in connection with the approval of any matter upon which the
Registrable Securities may vote. The Investor shall not directly or indirectly
enter into any agreement or understanding with any person or entity, other than
the Company, to vote or give instructions in any manner inconsistent with the
preceding sentence. In the event the Investor fails to vote in accordance
herewith, the Investor shall be deemed to have irrevocably appointed such person
or persons as may be designated by the Board of Directors of the Company as
proxy to vote the Investor's stock in accordance herewith.

                           (b)      DISSENTERS' RIGHTS.

                                    (i)      For purposes of this Section 6, the
term "Acquisition" shall mean any transaction pursuant to which the Company
proposes to (A) sell, lease, convey, or otherwise dispose of all or
substantially all of its property or business, (B) merge into or consolidate
with any other corporation or other entity or person or (C) effect any other
transaction or series of related transactions or other corporate reorganization
as a result of which the Company's stockholders of record as constituted
immediately prior to such transaction will, immediately after such transaction
(by virtue of securities issued as consideration for the Corporation's
acquisition or sale or otherwise) hold less than 50% of the voting power of the
surviving or acquiring entity.

                                    (ii)     Notwithstanding anything to the
contrary in this Section 6.2, the Investor may vote any Covenant Shares held by
it at any meeting of the stockholders of the Company in favor of or against any
Acquisition if the Investor shall receive, pursuant to such

                                                                            -18-
<PAGE>

Acquisition, in exchange for its Covenant Shares cash or publicly traded
securities (the "Consideration") whose aggregate value (as reasonably determined
by the Company's Board of Directors, the "Aggregate Value") is less than the
Covenant Price, provided that, if the Aggregate Value of the Consideration is
greater than or equal to the Covenant Price, the Investor may only vote against
such proposed Acquisition if, prior to such vote, the Investor executes and
delivers to the Company a written agreement with the Company stating that the
Investor will not take any action to assert any dissenters' rights pursuant to
Chapter 13 of the Corporations Code of California or any appraisal rights
pursuant to Section 262 of the Delaware General Corporation Law (or any similar
dissenters rights pursuant to any other applicable state's corporate law). For
purposes of this Section 6.2(b)(ii), the term "Covenant Price" shall mean the
aggregate original purchase price paid by the Investor for Covenant shares then
held by the Investor at the record date for determination of shares entitled to
vote on any Acquisition, compounded annually at a rate of 6% per year.

                  6.3      COMPANY'S RIGHT OF FIRST REFUSAL.

                           (a)      RIGHT OF FIRST REFUSAL. Notwithstanding
anything to the contrary in this Section 6, in the event that the Investor
desires to directly or indirectly sell (or otherwise transfer), and has received
a bona fide offer in writing from a third party to buy, any Covenant Shares (a
"Transfer"), the Investor shall notify the Company in writing of the proposed
sale (a "Transfer Notice"). Each Transfer Notice shall contain all material
terms of the proposed sale (or transfer), including, without limitation, a copy
of the written offer received, the name and address of the prospective purchaser
(or transferee), the purchase price and terms of payment, the date and place of
the proposed sale (or transfer), and the number and description of the Covenant
Shares proposed to be sold (or transferred) by the Investor (the "Offered
Shares"). The Company shall have an option for a period of thirty (30) days from
receipt of the Transfer Notice to elect to purchase the Offered Shares at the
same price and subject to the same material terms and conditions as described in
the Transfer Notice (or terms and conditions as similar as reasonably possible).
The Company may exercise such purchase option and, thereby, purchase all (or a
portion of) the Offered Shares by notifying the Investor in writing before
expiration of the such thirty (30) day period as to the number of such shares
that it wishes to purchase. If the Company gives the Investor notice that it
desires to purchase such shares, then payment for the Offered Shares shall be by
check or wire transfer, against delivery of the Offered Shares to be purchased
at a place agreed upon between the parties and at the time of the scheduled
closing therefor, which shall be no later than the later of (i) forty-five (45)
days after the Company's receipt of the Transfer Notice or (ii) the date
contemplated in the Transfer Notice for the closing with the prospective third
party transferee(s). To the extent that the Company, or any assignee of the
Company, has not exercised its rights of first refusal as to the Offered Shares
within the time periods specified in this Section 6.3 the Investor shall be free
to sell the stock to such prospective purchaser (or transferee) on the same
terms and conditions as outlined in the Transfer Notice, provided that in the
event such Covenant Shares are not sold within ninety (90) days of the date of
the notice they shall once again be subject to this the right of first refusal.

                           (b)      ASSIGNMENT. Notwithstanding anything to the
contrary in this Agreement, prior to the IPO the Company's rights under this
Section 6.3 shall be assignable, in whole or in part,

                                                                            -19-
<PAGE>

in the sole discretion of the Company to any holder, or number of holders, of
securities of the Company.

                           (c)      TERMINATION. The right of first refusal in
this Section 6.3 shall terminate upon the earlier of (i) the closing of the IPO,
or (ii) an Acquisition in which the Company's stockholders receive cash or
publicly traded securities.

                  6.4      SUBSEQUENT RIGHTS. In the event that the Company
shall enter into a strategic alliance during the Restriction Term with a third
party similar to the Collaboration Agreement, and pursuant to which the Company
shall issue equity to such third party and in connection therewith impose
covenants on such third party with regard to the matters set forth in this
Section 6 that are materially less restrictive, when taken as a whole, than the
restrictions on the Investor set forth in this Section 6 (the "Third Party
Restrictions"), the provisions of this Section 6 shall thereafter be superceded
and replaced by the terms of the Third Party Restrictions, and the Investor
shall thereby become obligated under such Third Party Restrictions, to the
extent that the Third Party Restrictions are materially less restrictive to the
third party than the terms contained in this Section 6 are to the Investor.

                  6.5      INVALID TRANSFERS. Any sale, assignment or other
transfer of Covenant Shares by the Investor contrary to the provisions of this
Section 6 shall be null and void, and the transferee shall not be recognized by
the Company as the holder or owner of the Covenant Shares sold, assigned, or
transferred for any purpose (including, without limitation, voting or dividend
rights), unless and until the Investor has satisfied the requirements of this
Section 6 with respect to such sale. The Investor shall provide the Company with
written evidence that such requirements have been met or waived, and the
proposed transferee must acknowledge in writing to the Company that such
proposed transferee is bound by the provisions of Section 6 of this Agreement,
prior to consummating any sale, assignment or other transfer of securities, and
no Stock shall be transferred on the books of the Company until such written
evidence has been received by the Company from the Investor and any such
proposed transferee.

         7.       MISCELLANEOUS.

                  7.1      SURVIVAL OF WARRANTIES. Notwithstanding the
provisions of Section 3.3 or any provision to the contrary contained in this
Agreement, all warranties, representations and covenants made by the Company in
or pursuant to this Agreement shall be considered to have been relied upon by
the Investor and except as otherwise set forth in this Agreement, the
representations, warranties and covenants of the Company and the Investor
contained in or made pursuant to this Agreement shall survive the execution and
delivery of this Agreement, the Effective Date and the Closing (regardless of
any investigation made by the Investor or on its behalf).

                  7.2      TRANSFER; SUCCESSORS AND ASSIGNS. The terms and
conditions of this Agreement shall inure to the benefit of and be binding upon
the respective successors and assigns of the parties. Nothing in this Agreement,
express or implied, is intended to confer upon any party other than the parties
hereto or their respective successors and assigns any rights, remedies,

                                                                            -20-
<PAGE>

obligations, or liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement.

                  7.3      GOVERNING LAW. This Agreement and all acts and
transactions pursuant hereto and the rights and obligations of the parties
hereto shall be governed, construed and interpreted in accordance with the laws
of the State of California, without giving effect to principles of conflicts of
law.

                  7.4      COUNTERPARTS. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument.

                  7.5      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.

                  7.6      NOTICES. All notices, requests and communications
hereunder shall be in writing and shall be personally delivered or sent by
facsimile transmission (confirmed by prepaid registered or certified mail,
return receipt requested or by international express delivery service) (e.g.,
Federal Express), mailed by registered or certified mail (return receipt
requested), postage prepaid, or sent by international express courier service,
and shall be deemed to have been properly served to the addressee upon receipt
of such written communication, to following addresses of the parties, or such
other address as may be specified in writing to the other party hereto:

         IF TO THE COMPANY,

                  ADDRESSED TO:     CYTOKINETICS, INC.
                                    280 East Grand Avenue
                                    South San Francisco, California 94080
                                    Attention: Robert Blum,
                                            Vice President, Business Development
                                    Telephone: (650) 624-3002
                                    Telecopy: (650) 624-3010

                  WITH COPY TO:     WILSON SONSINI GOODRICH & ROSATI
                                    PROFESSIONAL CORPORATION
                                    650 Page Mill Road
                                    Palo Alto, CA  94304-1050
                                    Attention: Michael O'Donnell, Esq.
                                    Telephone: (650) 493-9300
                                    Telecopy: (650) 493-6811

         IF TO INVESTOR,

                  ADDRESSED TO:     GLAXO WELLCOME INTERNATIONAL B.V.
                                    Huis Ter Heideweg 62

                                                                            -21-
<PAGE>

                                    3705 Zeist
                                    The Netherlands
                                    Attention: Chief Financial Officer
                                    Telephone: 011-31-30-6938100
                                    Telecopy: 011-31-30-6938293

                  WITH A COPY TO:   GLAXOSMITHKLINE
                                    Corporate Legal Department
                                    One Franklin Plaza
                                    200 N. 16th Street / FP 2355
                                    Philadelphia, PA 19102
                                    Attention: Donald F. Parman, Vice President
                                                  and Associate General Counsel
                                    Telephone: 215-751-7633
                                    Telecopy:  215-751-5349

                  7.7      FINDER'S FEE. Each party represents that it neither
is nor will be obligated for any finder's fee or commission in connection with
this transaction. The Investor agrees, to indemnify and to hold harmless the
Company from any liability for any commission or compensation in the nature of a
finder's fee (and the costs and expenses of defending against such liability or
asserted liability) for which the Investor or any of its officers, employees, or
representatives is responsible. The Company agrees to indemnify and hold
harmless the Investor from any liability for any commission or compensation in
the nature of a finder's fee (and the costs and expenses of defending against
such liability or asserted liability) for which the Company or any of its
officers, employees or representatives is responsible.

                  7.8      ATTORNEY'S FEES. If any action at law or in equity
(including arbitration) is necessary to enforce or interpret the terms of any of
the Agreements, the prevailing party shall be entitled to reasonable attorney's
fees, costs and necessary disbursements in addition to any other relief to which
such party may be entitled.

                  7.9      AMENDMENTS AND WAIVERS. Any term of this Agreement
may be amended or waived only with the written consent of the Company and the
Investor. Any amendment or waiver effected in accordance with this Section 7.9
shall be binding upon the Investor and each transferee of the Stock (or the
Common Stock issuable upon conversion thereof), each future holder of all such
securities, and the Company. Notwithstanding the foregoing, the Company may
waive any of the restrictions imposed by the Company on the Investor pursuant to
Section 6 herein by delivering to the Investor a written instrument of waiver,
certified by the Secretary or Chief Financial Officer of the Company ("Waiver"),
setting forth the terms of such Waiver and certifying that such Waiver was duly
approved by the Board of Directors of the Company.

                  7.10     EXPENSES. Each of the Company and the Investor shall
bear its own expenses incurred on its behalf with respect to this Agreement and
the transactions contemplated hereby.

                                                                            -22-
<PAGE>

                  7.11     SEVERABILITY. If one or more provisions of this
Agreement are held to be unenforceable under applicable law, the parties agree
to renegotiate such provision in good faith. In the event that the parties
cannot reach a mutually agreeable and enforceable replacement for such
provision, then (a) such provision shall be excluded from this Agreement, (b)
the balance of the Agreement shall be interpreted as if such provision were so
excluded and (c) the balance of the Agreement shall be enforceable in accordance
with its terms.

                  7.12     DELAYS OR OMISSIONS. No delay or omission to exercise
any right, power or remedy accruing to any party under this Agreement, upon any
breach or default of any other party under this Agreement, shall impair any such
right, power or remedy of such non-breaching or non-defaulting 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. All
remedies, either under this Agreement or by law or otherwise afforded to any
party, shall be cumulative and not alternative.

                  7.13     ENTIRE AGREEMENT. This Agreement, and the documents
referred to herein constitute the entire agreement between the parties hereto
pertaining to the subject matter hereof, and any and all other written or oral
agreements relating to the subject matter hereof existing between the parties
hereto are expressly canceled.

                  7.14     CORPORATE SECURITIES LAW. THE SALE OF THE SECURITIES
WHICH ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE
COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF THE
SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION THEREFOR
PRIOR TO THE QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT
FROM THE QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF THE CALIFORNIA
CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY
CONDITIONED UPON THE QUALIFICATION BEING OBTAINED UNLESS THE SALE IS SO EXEMPT.

                  7.15     CONFIDENTIALITY. Each party hereto agrees that,
except, (i) as required by applicable law (provided that if so required, the
disclosing party will provide written notice to the affected party regarding
such potential disclosure, and use commercially reasonable efforts to limit such
disclosure and prevent any further disclosure), or (ii) with the prior written
permission of the affected party, it shall at all times keep confidential and
not divulge, furnish or make accessible to anyone any confidential information,
knowledge or data concerning or relating to the business or financial affairs of
the other parties to which such party has been or shall become privy by reason
of this Agreement, discussions or negotiations relating to this Agreement, the
performance of its obligations hereunder (except the obligations contained in
Section 6 of this Agreement which may be disclosed to shareholders of the
Company, or a bona fide proposed transferee of Covenant Shares)

                                                                            -23-
<PAGE>

or the ownership of Stock purchased hereunder. The provisions of this Section
7.15 shall be in addition to, and not in substitution for, the provisions of (i)
any separate nondisclosure agreement executed by the parties hereto with respect
to the transactions contemplated hereby, or (ii) the confidentiality provisions
contained in the Collaboration Agreement, or in any document or agreement
related thereto.

                  7.16     QUALIFICATIONS. All authorizations, filings,
approvals, or permits, if any, of any governmental authority or regulating body
of the United States or of any state that are required to be filed within, or
prior to, the period of 30 days from the date of the Closing, (the "Period") in
connection with the lawful issuance and sale of the Stock pursuant to this
Agreement shall be obtained or filed by or on behalf of the Company prior to the
expiration of such Period.

                            [Signature Pages Follow]

                                                                            -24-
<PAGE>

         The parties have executed this Series D Preferred Stock Purchase
Agreement as of the date first written above.

                                    COMPANY:

                                    CYTOKINETICS, INCORPORATED

                                    By:___________________________________

                                    Name:_________________________________

                                    Title:________________________________


                                    INVESTOR:

                                    GLAXO WELLCOME INTERNATIONAL B.V.

                                    By:___________________________________

                                    Name:_________________________________

                                    Title:________________________________

CYTOKINETICS, INC.
SERIES D PREFERRED STOCK
PURCHASE AGREEMENT

<PAGE>

                                    EXHIBIT A

                           FOURTH AMENDED AND RESTATED

                          CERTIFICATE OF INCORPORATION

                                       OF

                           CYTOKINETICS, INCORPORATED

<PAGE>

                                    EXHIBIT B

                             SCHEDULE OF EXCEPTIONS

<PAGE>

                                  ATTACHMENT A

                              FINANCIAL STATEMENTS

<PAGE>

                                  ATTACHMENT B

                              FINANCIAL STATEMENTS

<PAGE>

                                    EXHIBIT C

                       FORM OF THIRD AMENDED AND RESTATED

                           INVESTORS' RIGHTS AGREEMENT

<PAGE>

                                    EXHIBIT D

                       FORM OF THIRD AMENDED AND RESTATED

                                VOTING AGREEMENT

<PAGE>

                                    EXHIBIT E

                              FORM OF LEGAL OPINION

<PAGE>

                           CYTOKINETICS, INCORPORATED

                   SERIES D PREFERRED STOCK PURCHASE AGREEMENT

                                  June 20, 2001