**AGREEMENT**SECTION 1. PURCHASE OF SHARES1.1 Authorization of Sale. On or prior to the date of this Agreement, the Company’sBoard of Directors (the “Board”) shall have authorized the sale and issuance of the Sharesand the transactions contemplated by this Agreement, subject to the terms and conditions containedherein.1.2 Purchase and Sale. Subject to the terms and conditions of this Agreement and theCollaboration Agreement, on the date hereof, the Company agrees to sell to the Purchaser, and thePurchaser agrees to purchase from the Company, 3,391,035 Shares (the “Initial Investment”)at a purchase price per share of $2.21171, in the case of the Initial Closing, or, in the case of aSubsequent Closing (as defined below) at a price per common share equivalent (based on theconversion ratio provided for in the applicable Certificate of Designation, as adjusted) equal toone hundred ten percent (110%) of the average closing price of the Common Stock of the Company asreported on the NASDAQ stock market or such other reporting service as the stock is then quoted ifnot then quoted on NASDAQ (and if not then traded at the value determined by an investment bankselected consistent with the provisions of Section 14.3 of the Collaboration Agreement), for theten (10) consecutive trading days commencing five (5) trading days immediately prior to the datethe Company has publicly announced the event that triggered such payment (*i.e.*, the P-ValueAchievement, or in the case of such payment where there is no P-Value Achievement, the Company’sfirst public announcement of the results of the Second Interim Efficacy Analysis or the firstpublic announcement of the approval of an NDA for the Product under Section 7.13 of theCollaboration Agreement (the “Announcement of Results”)). Notwithstanding the foregoing,in no event will the price per common share equivalent for the Shares issued in a SubsequentClosing (based on the conversion ratio provided for in the applicable Certificate of Designation,as adjusted) be less than $0.73724.1.3 Purchase and Sale of Additional Shares.(A) The Company has granted the Purchaser the right to purchase shares of Series B-2Convertible Preferred Stock and Series B-3 Convertible Preferred Stock pursuant to theCollaboration Agreement. If the Purchaser exercises its right to purchase such additional Sharesthen, subject to the terms and conditions of this Agreement, the Company agrees to sell to thePurchaser, and the Purchaser agrees to purchase from the Company, that number of Shares determinedby dividing the amount of the dollar investment by the Purchaser by the purchase price per sharecalculated in accordance with Section 1.2 of this Agreement. Each closing relating to thepurchase of Shares following the Initial Closing shall be defined herein as a “SubsequentClosing,” and the Initial Closing and the Subsequent Closings shall be defined herein as the“Closings.”
 
-2-

 
(B) Notwithstanding anything to the contrary set forth in subsection 1.3(A), if the number ofShares agreed to be purchased by the Purchaser at any Subsequent Closing, when coupled with allother shares of Series B Convertible Preferred Stock owned by the Purchaser, would exceed themaximum number of Shares allowed by NASDAQ Marketplace Rule 4350(i)(1)(B) without the approval of amajority of the total votes cast on the proposal by the stockholders of the Company, and suchstockholder approval has not yet been obtained prior to such Subsequent Closing then at therelevant Closing, the Purchaser shall only be obligated to purchase that number of Sharespermissible without stockholder approval under NASDAQ Marketplace Rule 4350(i)(1)(B). ThePurchaser shall thereafter be obligated to purchase any Shares originally agreed to be purchasedbut not so purchased at such Closing due to the provisions of the previous sentence, subject toreduction as provided for in the next sentence, as promptly as practicable following such time asstockholder approval has been obtained by the Company (but in no event later than thirty (30) daysfollowing such approval). If the Company’s stockholders do not approve all purchases of Shares inaccordance with NASDAQ Marketplace Rule 4350(i)(1)(B) on or before July 1, 2009, then any pendingor future obligations to purchase Shares under this Agreement in excess of the maximum number ofshares allowable under NASDAQ Marketplace Rule 4350(i)(1)(B) without stockholder approval shall beterminated or disallowed and the amounts payable to the Company under Sections 7.2, 7.3, 7.4 and7.13 of the Collaboration Agreement shall be correspondingly reduced by the amount of money thePurchaser was entitled to invest in the Company but could not due to the limitations imposed byNASDAQ Marketplace Rule 4350(i)(1)(B) without any further obligation of the Purchaser to providesuch monies to the Company. By way of example, if under Section 7.3(a)(ii)(x) of the CollaborationAgreement the Purchaser receives notice of a Non-Futile Determination and the Purchaser determinesto continue its participation under the Collaboration Agreement by paying to the Company$22,500,000, including $5,000,000 in the form of an equity investment, but because the Company hasnot yet received stockholder approval under NASDAQ Marketplace Rule 4350(i)(1)(B), the Purchasercan only purchase $3,000,000 of Shares, then the Purchaser shall purchase the $3,000,000 of Sharesand the Purchaser’s obligation to purchase the additional $2,000,000 of Shares shall be deferreduntil such stockholder approval is obtained. Notwithstanding the foregoing, if such stockholderapproval is not obtained by July 1, 2009, then the Purchaser’s obligation under Section7.3(a)(ii)(x) of the Collaboration Agreement shall be reduced from $22,500,000 to $20,500,000 andthe Purchaser shall have been deemed to satisfy in full its payment obligation to the Company undersuch provision and if thereafter under Section 7.4 of the Collaboration Agreement the Purchaserreceives notice of a P-Value Achievement, the Purchaser’s payment obligation shall be reduced from$55,000,000 to $40,000,000 and the right to pay a portion of such amount by making an equityinvestment shall be extinguished.SECTION 2. CLOSING, DELIVERY AND PAYMENT2.1 Initial Closing. The initial closing of the sale and purchase of the InitialInvestment (the “Initial Closing”) shall take place on January 20, 2009, at the offices ofWilson Sonsini Goodrich & Rosati, Professional Corporation, 650 Page Mill Road, Palo Alto,California 94304, or at such other time or place, if any, as the Company and the Purchaser maymutually agree. As usedherein, a “Business Day” means any day which is not (i) a Saturday or a Sunday, or(ii) a day on which banking institutions in California are authorized or obligated by law orregulation to close, and the “Closing Date” shall mean the date on which the applicableClosing, takes place.
 
-3-

 
2.2 Subsequent Closings. In accordance with the Collaboration Agreement, if anySubsequent Closing occurs, the purchase and sale of that number of Shares calculated in accordancewith Section 7.5 of the Collaboration Agreement shall take place at the offices of Wilson SonsiniGoodrich & Rosati, Professional Corporation, 650 Page Mill Road, Palo Alto, California 94304 withinfifteen (15) Business Days (subject to the closing conditions in Section 5 being satisfied)following receipt by the Company of the written notice specified in Section 7.5 of theCollaboration Agreement, or at such other place and/or time, if any, as the Company and thePurchaser may mutually agree.2.3 Delivery. At each Closing, subject to the terms and conditions hereof, theCompany will deliver to the Purchaser a certificate representing the number of Shares to bepurchased by the Purchaser, against payment of the purchase price therefor in immediately availablefunds by check or wire transfer to an account designated by the Company.SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANYAs a material inducement to the Purchaser to enter into and perform its obligations under thisAgreement, the Company hereby represents and warrants to the Purchaser as of the date hereof, andwith respect to a Subsequent Closing, as of the Closing Date thereof (except for representationsand warranties that speak only as of a specific date (which shall true and correct as of suchdate)), as follows:3.1 Organization and Standing. The Company is a corporation duly organized, validlyexisting and in good standing under the laws of the State of Delaware and has full corporate powerand authority to conduct its business as currently conducted and to enter into and perform thisAgreement, to issue Shares being purchased by the Purchaser at each Closing and to carry out thetransactions contemplated by this Agreement. The Company is duly qualified or otherwise authorizedto do business as a foreign corporation or other organization and is in good standing as such inevery jurisdiction in which the failure to so qualify would (i) have a material adverse effect onthe business, assets, liabilities (contingent or otherwise), operations, condition (financial orotherwise) and results of operations of the Company and the Subsidiary, taken as a whole, or (ii)prevent or adversely affect the enforceability or binding effect of this Agreement or the abilityof the Company to perform its obligations under this Agreement (a “Company Material AdverseEffect”).3.2 Subsidiary. As of the date hereof, the Company has one wholly-owned subsidiary,La Jolla Limited (the “Subsidiary”), which is incorporated in England. All of theoutstanding shares of capital stock of the Subsidiary and any other subsidiary established by theCompany after the date hereof are duly and validly authorized, are validly issued and are fullypaid and nonassessable, have been offered, issued, sold and delivered in compliance in all materialrespects with applicable foreign, federal and state securities laws, and are owned by the Companyfree and clear of any Security Interest (as defined below).
 
-4-

 
3.3 Issuance of Shares. The issuance, sale and delivery of all Shares to be sold bythe Company at each Closing (only with respect to Shares issued in such Closing) in accordance withthis Agreement have been duly authorized by all necessary corporate action on the part of theCompany. Each Share when issued, sold and delivered in accordance with the provisions of thisAgreement will be duly and validly issued, fully paid and nonassessable, free of all liens, claimsand encumbrances and will not be issued in violation of any co-sale, right of first refusal,preemptive rights or any other similar rights of stockholders. The Company has reserved from itsduly authorized capital stock a number of shares of Common Stock at least equal to the amount ofCommon Stock issuable upon conversion of the Shares (only with respect to Shares issued in suchClosing) in accordance with the terms specified in the Certificate of Designation applicable tosuch Shares. Additionally, as of the Initial Closing, the Company has reserved from its dulyauthorized capital stock 37,301,387 shares of Common Stock that may be issued upon conversion ofthe Shares purchased at the Initial Closing as well as Shares that may be issued at any SubsequentClosing (based upon an assumed issue price equal to the floor price established in Section 1.2).3.4 Authority for Agreement. The Company has full corporate power and authority toexecute and deliver this Agreement, to issue all Shares being purchased by the Purchaser at eachClosing (only with respect to Shares issued in such Closing) and to perform its other obligationshereunder and thereunder. The execution, delivery and performance by the Company of this Agreementand the consummation of the transactions contemplated hereby have been duly authorized by allrequisite corporate action by the Company and, when executed and delivered by the Company, thisAgreement will be the valid and binding obligation of the Company, enforceable against the Companyin accordance with its terms.3.5 No Conflict. The execution, delivery and performance of this Agreement, theissuance of all Shares being purchased by the Purchaser at each Closing (only with respect toShares issued in such Closing) and the consummation of the other transactions contemplated herebyby the Company including the conversion of the Shares into shares of Common Stock will not (a)conflict with or violate any provision of the Company’s Certificate of Incorporation (as currentlyin effect, the “Certificate”) or its corporate By-laws (as currently in effect, the“By-Laws”), or (b) conflict with, result in a breach of, constitute (with or without duenotice or lapse of time or both) a default under, result in the acceleration of, create in anyparty the right to accelerate, terminate, modify or cancel, or require any notice, consent orwaiver under, any material contract, lease, sublease, license, sublicense, franchise, permit,indenture, agreement or mortgage for borrowed money, instrument of indebtedness, Security Interest(as defined below) or other material arrangement to which the Company or the Subsidiary is a party.For purposes of this Agreement, “Security Interest” means any mortgage, pledge, securityinterest, encumbrance, charge, lien or similar right (whether arising by contract or by operationof law).
 
-5-

 
3.6 Consents. No consent, permit, approval, order or authorization of, orregistration, qualification, designation, declaration or filing with, any court, arbitrationaltribunal, administrative agency or commission or other governmental or regulatory authority oragency, including any Self-Regulatory Organization (including NASDAQ) (each of the foregoing ishereafter referred to as a “Governmental Entity”) or any other Person is required to bemade or obtained by the Company or any of its subsidiaries in connection with the offer, issuance,sale and delivery of all Shares beingpurchased by the Purchaser in each Closing (only with respect to Shares issued at suchClosing) or the other transactions to be consummated hereunder, as contemplated by this Agreement,including the conversion of the Shares into shares of Common Stock, except for any applicablewaiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (“HSR Act”),such filings as shall have been made prior to and shall be effective on and as of the InitialClosing, and with respect to a Subsequent Closing, as of the Closing Date thereof, and such filingsrequired to be made after the Initial Closing, and with respect to a Subsequent Closing, after theClosing Date thereof, under applicable federal and state securities laws. Based in part on therepresentations made by the Purchaser in Section 4 of this Agreement, the offer and sale ofShares to the Purchaser will be in compliance with applicable federal and state securities laws.3.7 No Solicitation or Advertisement. Neither the Company nor the Subsidiary nor anyperson acting on their behalf has engaged, in connection with the offering or sale of Shares, inany form of general solicitation or general advertising within the meaning of Rule 502(c) under theSecurities Act, as defined below.3.8 Securities Act Registration. Assuming that the representations and warranties ofthe Purchaser contained herein are true, it is not necessary in connection with the offer, sale anddelivery of Shares, in the manner contemplated by this Agreement to register the Shares under theSecurities Act of 1933, as amended (the “Securities Act”) or under applicable statesecurities or Blue Sky laws regulating the issuance or sale of securities.3.9 Capitalization. As of the date hereof, the authorized capital stock of theCompany consists of 225,000,000 shares of Common Stock and 8,000,000 shares of Preferred Stock. Asof September 30, 2008, the issued and outstanding capital stock of the Company consists of55,421,634 shares of Common Stock. The shares of issued and outstanding capital stock of theCompany have been duly authorized and validly issued, are fully paid and nonassessable and have notbeen issued in violation of any state or federal laws, rules or regulations, or in violation of(and are not otherwise subject to) any preemptive or other similar rights. Options and warrants topurchase an aggregate of 14,061,010 shares of Common Stock were outstanding as of September 30,2008. Except as disclosed in or contemplated by the SEC Filings, as defined below, the Companydoes not have outstanding any options to purchase, or any preemptive rights or other rights tosubscribe for or to purchase, any securities or obligations convertible into, or any contracts orcommitments to issue or sell, shares of its capital stock or any such options, rights, convertiblesecurities or obligations other than options granted under the Company’s stock option plans.3.10 SEC Filings. The Company is a reporting company and has filed all reportsrequired to be filed by it under the Securities Act and the Securities Exchange Act of 1934, asamended (the “Exchange Act”), including pursuant to Section 13(a), 14(a) or 15(d) thereof,or the rules and regulations thereunder, for the three years preceding the date hereof (theforegoing materials and any materials incorporated therein by reference being collectively referredto herein as the “SEC Filings”) on a timely basis or has received a valid extension of suchtime of filing or waiver thereof and has filed any such SEC Filings prior to the expiration of anysuch extension. As of their respective dates, the SEC Filings complied in all material respectswith the requirements of the Exchange Act and the Securities Act and the rules and regulations ofthe SEC promulgatedthereunder, and none of the SEC Filings, when filed, contained any untrue statement of amaterial fact or omitted to state a material fact required to be stated therein or necessary inorder to make the statements therein, in light of the circumstances under which they were made, notmisleading. The SEC Filings, for purposes of all representations in this Section 3 as of aSubsequent Closing, shall include all filings filed by the Company with the SEC up to and includingthe date on which the Announcement of Results occurs.
 
-6-

 
3.11 Financial Statements. The financial statements filed with the SEC as a part ofthe SEC Filings present fairly, in all material respects, the financial position of the Company andits consolidated subsidiaries as of and at the dates indicated and the results of their operationsand cash flows for the periods specified therein, subject, in the case of interim financialstatements, to the normal year-end adjustments which are not expected to be material in amount.Such financial statements have been prepared in conformity with generally accepted accountingprinciples as applied in the United States and in effect as of the date of the applicable financialstatements and supporting schedules, as applicable, applied on a consistent basis throughout theperiods involved, except as may be expressly stated in the related notes thereto, and comply in allmaterial respects with the Securities Act, the Exchange Act and the applicable rules andregulations of the SEC thereunder. Except as set forth in such financial statements included inthe SEC Filings filed prior to the date hereof, neither the Company nor the Subsidiary has incurredany liabilities, contingent or otherwise, except those incurred in the ordinary course of businessconsistent with past practice, none of which ordinary course liabilities, individually or in theaggregate, would reasonably be expected to result in a Company Material Adverse Effect.3.12 Eligibility for Form S-3. The Company represents and warrants that on the datehereof the Company meets the requirements for the use of Form S-3 for registration of the sale bythe Purchaser of all Shares being purchased by the Purchaser hereunder and the Company has filedall reports required to be filed by the Company with the SEC in a timely manner so as to obtaineligibility for the use of Form S-3.3.13 No Change. Since the filing with the SEC of the Company’s most recently filedquarterly report on Form 10-Q or annual report on Form 10-K, or with respect to the InitialClosing, as set forth on Schedule 3.13, (i) the Company has not incurred any materialliabilities or material obligations, indirect, or contingent, or entered into any material oral orwritten agreement or other transaction which is not in the ordinary course of business and whichcould reasonably be expected to result in a Company Material Adverse Effect; (ii) the Company hasnot sustained any material loss or interference with its businesses or properties; (iii) theCompany has not paid or declared any dividends or other distributions with respect to its capitalstock; (iv) the Company and the Subsidiary are not in default in the payment of principal orinterest on any outstanding debt obligations; (v) there has not been any change in the capitalstock of the Company other than the sale of Shares hereunder and shares or options issued pursuantto the Company’s stock option plan or employee stock purchase plan and any options outstanding asof the date hereof, or indebtedness, liens or claims (other than in the ordinary course ofbusiness); (vi) the Company has not experienced any loss of the services of any key employee ormaterial change in the composition or duties of the senior management of the Company or theSubsidiary; (vii) the Company has not made any material change to its methods of accounting; and(viii) neither the Company nor the Subsidiary hasexperienced any other event or condition of any character that, individually or in theaggregate, has had or would reasonably be expected to have a Material Adverse Effect.
 
-7-

 
3.14 No Actions. Except as disclosed in the SEC Filings, (i) there are no legal orgovernmental actions, suits, claims, investigations or proceedings pending or threatened to whichthe Company or the Subsidiary is or may be a part or of which property owned or leased by theCompany or the Subsidiary is or may be the subject, or related to environmental or discriminationmatters, which actions, suits or proceedings, individually or in the aggregate, might prevent ormight reasonably be expected to materially and adversely affect the transactions contemplated bythis Agreement; and (ii) no labor disturbance by the employees of the Company or the Subsidiaryexists, or is threatened which would reasonably be expected to result in a Company Material AdverseEffect. Except as disclosed in the SEC Filings, neither the Company nor the Subsidiary is a partyto or subject to the provisions of any injunction, judgment, decree or order of any court,regulatory body administrative agency or other governmental body which could reasonably be expectedto result in a Company Material Adverse Effect.3.15 Compliance. To the Company’s knowledge, except as disclosed in the SEC Filings,the Company and the Subsidiary have been and are conducting their respective businesses incompliance with all applicable laws, rules and regulations of the jurisdictions in which they areeach conducting business, including, without limitation, all applicable local, state, federal andforeign drug or environmental laws and regulations, the violation of which could reasonably beexpected to result in a Company Material Adverse Effect. Neither the Company nor the Subsidiary isin violation of any order of any court, arbitrator or governmental body. The Company is incompliance with the applicable requirements of the Sarbanes-Oxley Act of 2002, as amended, and therules and regulations thereunder, except where such noncompliance would not have or reasonably beexpected to result in a Company Material Adverse Effect.3.16 Intellectual Property. Except as disclosed in the SEC Filings, (i) the Companybelieves it owns or possesses the necessary trademarks, trademark applications, service marks,service names, trade name rights, patents, patent rights, patent applications, copyrights,licenses, know-how, trade secrets and other intellectual property rights (the “IntellectualProperty”) to enable it to conduct its business as it is being conducted as of the date hereofand as specifically described in the SEC Filings and to enter into and perform its obligationsunder the Collaboration Agreement; and (ii) the Company has no knowledge of any infringement by itof any trademark, trade name rights, patent rights, copyrights, trade secret or any otherintellectual property rights of third parties, or of any claim made against the Company regardingany such an infringement, and no third party, to the Company’s knowledge, is infringing theIntellectual Property, in each case, which could reasonably be expected to result in a CompanyMaterial Adverse Effect. Except as disclosed in the SEC Filings, there are no material options,licenses or agreements relating to the Intellectual Property, nor is the Company bound by or aparty to any options, licenses or agreements relating to the patents, patent applications, patentrights, inventions, know-how, trade secrets, trademarks, trademark applications, service marks,service names, trade names or copyrights or other intellectual property rights of any other Person.As of the date hereof, there is no claim, action or proceeding pending or, to the Company’sknowledge, threatened, that challenges the right of the Company with respect to any IntellectualProperty.
 
-8-

 
3.17 Listed Securities. As of the date hereof, the Common Stock of the Company isquoted on the Nasdaq Global Market and the Company has not received any written notice with respectto the delisting of its Common Stock from NASDAQ. The Company will continue to use commerciallyreasonable efforts to comply with all quantitative and qualitative requirements of the NASDAQMarketplace Rules to the extent such compliance is within the control of the Company.3.18 No Integrated Offering. Neither the Company nor any Person acting on its behalfhas, directly or indirectly, made any offers or sales of any Company security or solicited anyoffers to buy any security, under circumstances that would adversely affect reliance by the Companyon Regulation D or Section 4(2) of the Securities Act for the exemption from registration for thetransactions contemplated hereby or would require registration of any Shares under the SecuritiesAct or would be integrated under the NASDAQ Marketplace Rules.3.19 Investment Company. The Company is not an “investment company” or an “affiliatedperson” of, or “promoter” or “principal underwriter” for an investment company, within the meaningof the Investment Company Act of 1940, as amended.3.20 Full Disclosure. All representations and warranties of the Company and allstatements, schedules or certificates furnished by or on behalf of the Company to the Purchaser orits agents pursuant to this Agreement, the Collaboration Agreement or in connection with thetransactions contemplated hereby and thereby, are true and correct in all material respects and donot contain any untrue statement of a material fact or omit to state a material fact required to bestated therein or necessary in order to make the statements contained therein, in light of thecircumstances under which they were made, not misleading.3.21 Waiver with Respect to Rights Plan. The Company has waived the application ofthat certain Rights Agreement dated as of December 2, 2008 by and between the Company and AmericanStock Transfer & Trust Company, LLC (the “Rights Plan”) to any acquisition by the Purchaserof securities of the Company pursuant to this Agreement in any Closing.SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERThe Purchaser hereby represents and warrants to the Company as follows:4.1 Investment. The Purchaser is acquiring Shares for its own account, for investmentand not with a view to, or for sale in connection with, any distribution thereof, nor with anypresent intention of distributing or selling the same; and the Purchaser has no present orcontemplated agreement, undertaking, arrangement, obligation, indebtedness or commitment providingfor the disposition thereof. The Purchaser is an “accredited investor” as defined in Rule 501(a)under the Securities Act.4.2 Authority. The Purchaser has full corporate power and authority to execute anddeliver this Agreement and to perform its other obligations hereunder. The execution, delivery andperformance by the Purchaser of this Agreement and the consummation of the transactionscontemplated hereby have been duly authorized by all requisite corporate action by the Purchaserand, when executed and delivered by the Purchaser, this Agreement will be the valid andbinding obligation of the Purchaser, enforceable against the Purchaser in accordance with itsterms.
 
-9-

 
4.3 Experience. The Purchaser has made inquiry concerning the Company, its businessand its personnel and the Purchaser has sufficient knowledge and experience in finance and businessthat it is capable of evaluating the risks and merits of its investment in the Company and thePurchaser is able financially to bear the risks thereof. The Purchaser acknowledges that aninvestment in the Company has a high degree of risk.4.4 Restricted Shares. The Purchaser understands that (a) the Shares (and the sharesof Common Stock underlying the Shares) have not been registered under the Securities Act by reasonof their issuance in a transaction exempt from the registration requirements of the Securities Actpursuant to Section 4(2) thereof or Regulation D promulgated under the Securities Act, (b) theShares (and the shares of Common Stock underlying the Shares) must be held indefinitely unless asubsequent disposition thereof is registered under the Securities Act or is exempt from suchregistration and (c) the Company will make a notation on its transfer books to such effect. ThePurchaser represents that it is familiar with Rule 144, as presently in effect, and understands theresale limitations imposed thereby and by the Securities Act. The Purchaser acknowledges that theShares (and the shares of Common Stock underlying the Shares) have not been registered under theSecurities Act or qualified under any applicable blue sky laws in reliance, in part, on therepresentations and warranties herein.4.5 Legend. The Purchaser understands that any certificates evidencing the Shares orthe shares of Common Stock into which the Shares are converted may bear the following legend:“THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, ASAMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED, PLEDGED ORHYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TOSUCH SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL OR OTHER EVIDENCE REASONABLYSATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS SOLDPURSUANT TO RULE 144 UNDER SUCH ACT.”The legend set forth above shall be removed and the Company hereby agrees to issue the Shares(and the shares of Common Stock underlying the Shares) without such legends to the holder thereof,(i) if such Shares (and the shares of Common Stock underlying the Shares) are registered for resaleunder the Securities Act, (ii) if such holder provides the Company with an opinion of counsel orother evidence reasonably acceptable to the Company to the effect that a public sale, assignment ortransfer of such Shares (and the shares of Common Stock underlying the Shares) may be made withoutregistration under the Securities Act, or (iii) upon expiration of the applicable period under Rule144(k) of the Securities Act (or any successor rule).4.6 Organization and Standing. The Purchaser is a corporation duly organized, validlyexisting and in good standing under the laws of its jurisdiction of formation and has fullcorporatepower and authority to enter into and perform this Agreement, and to carry out thetransactions contemplated by this Agreement.
 
-10-

 
SECTION 5. CONDITIONS TO CLOSING5.1 Conditions to the Purchaser’s Obligation to Close. The obligation of thePurchaser to purchase Shares at a Closing is subject to the fulfillment or the waiver, of each ofthe following conditions on or before the applicable Closing:(A) The representations and warranties contained in Section 3 shall be true andcorrect on and as of the applicable Closing Date except for representations and warranties thatspeak only as of a specific date (which shall be true and correct as of such date).(B) The Company shall have delivered to the Purchaser: (i) certificates, as of a recentpracticable date, as to the corporate good standing of the Company issued by the Secretaries ofState of the States of Delaware and California and the Secretary of each other State in which theCompany is qualified to do business, (ii) a certificate executed by its Chief Executive Officer orChief Financial Officer, dated as of the applicable Closing Date, to the effect that therepresentations and warranties of the Company set forth in Section 3 hereof are true and correct inall respects on and as of the applicable Closing Date (except for representations and warrantiesthat speak only as of a specific date (which shall be true and correct as of such date)) and thatthe Company has otherwise complied in all material respects with all of its obligations under thisAgreement and the Collaboration Agreement, and (iii) a certificate of the Secretary or AssistantSecretary of the Company, dated as of the applicable Closing Date, certifying as to (a) the By-Lawsof the Company, (b) the signatures and titles of the officers of the Company executing thisAgreement, and (c) resolutions of the Board of the Company, authorizing and approving all mattersin connection with this Agreement which have not been revoked.(C) The satisfaction, at or prior to the applicable Closing, of all applicable requirements ofthe HSR Act, including the expiration or early termination of any HSR Act waiting period, if any.(D) The Company shall have delivered to the Purchaser an opinion of counsel, dated as of theapplicable Closing Date, in the form attached hereto as Exhibit B.(E) The Collaboration Agreement shall not have terminated effective as of the date of suchClosing.5.2 Conditions to the Company’s Obligation to Close. The obligation of the Company tosell any Shares to the Purchaser under this Agreement is subject to fulfillment, or the waiver inwriting by the Company, of the following conditions on or before the applicable Closing:(A) The representations and warranties of the Purchaser contained in Section 4 shallbe true and correct in all respects except for representations and warranties that speak only as ofa specific date (which shall be true and correct as of such date).
 
-11-

 
(B) The Purchaser shall have delivered to the Company a certificate executed by its ChiefExecutive Officer or Chief Financial Officer, dated as of the applicable Closing Date, to theeffect that the representations and warranties of the Purchaser set forth in Section 4 hereof aretrue and correct on and as of the applicable Closing Date (except for representations andwarranties that speak only as of a specific date (which shall be true and correct as of such date))and that the Purchaser has otherwise complied in all material respects with all of its obligationsunder this Agreement and the Collaboration Agreement.(C) The satisfaction, at or prior to the applicable Closing, of all applicable requirements ofthe HSR Act, including the expiration or early termination of any HSR Act waiting period, if any.(D) The Collaboration Agreement shall not have terminated effective as of the date of suchClosing.SECTION 6. REGISTRATION RIGHTS6.1 Demand Registration.(A) Subject to subsection (C) hereof, if the Company receives a written request from thePurchaser that the Company effect any registration with respect to all or a part of the shares ofCommon Stock issuable upon conversion of the Shares that are held by the Purchaser and/or itscontrolled Affiliates (such shares, to the extent that the registration of such number of Shares ispermitted pursuant to then applicable rules, regulations and staff guidance of the SEC) arehereinafter referred to as “Registrable Securities”), the Company shall:(1) As soon as practicable, but in no event later than ninety (90) days following the receiptof such request, prepare and file with the SEC a registration statement on Form S-3 (the“Registration Statement”) relating to the resale of Registrable Securities by the Purchaserfrom time to time through the automated quotation system of NASDAQ or the facilities of anynational securities exchange or trading system on which the Common Stock of the Company is thentraded or in privately negotiated transactions;(2) Subject to receipt of necessary information from the Purchaser, use commerciallyreasonable efforts to cause the SEC to notify the Company of its willingness to declare theRegistration Statement effective within ninety (90) days after the Registration Statement is filedby the Company, and notify the Purchaser of such notification from the SEC within three (3)Business Days of receipt;(3) Promptly prepare and file with the SEC such amendments and supplements to the RegistrationStatement and the prospectus used in connection therewith as may be necessary to keep eachRegistration Statement effective until the earlier of (i) 120 days following the date on which theregistration first became effective, or (ii) such time as all Registrable Securities held by thePurchaser have been sold pursuant to a registration statement (the “Registration Period”);
 
-12-

 
(4) So long as the Registration Statement is effective covering the resale of RegistrableSecurities owned by the Purchaser, furnish to the Purchaser with respect to the Common Stockregistered under the Registration Statement such reasonable number of copies of prospectuses andsuch other documents as the Purchaser may reasonably request, in order to facilitate the publicsale or other disposition of all or any Registrable Securities by the Purchaser;(5) File documents required of the Company for normal blue sky clearance in states specifiedin writing by the Purchaser; provided, however, that the company shall not be required to qualifyto do business in any jurisdiction in which it is not now so qualified;(6) Bear all expenses in connection with the procedures in subsection (A) of this Section 6.1and the registration of Registrable Securities pursuant to the Registration Statement; and(7) Notwithstanding the foregoing, (i) the Company shall not be obligated to effect aregistration pursuant to this Section 6.1 during the period starting with the date sixty (60) daysprior to the Company’s estimated date of filing of, and ending on a date sixty (60) days followingthe effective date of, a registration statement pertaining to an underwritten public offering ofthe Company’s securities, provided that the Company is actively employing in good faith allreasonable efforts to cause such registration statement to become effective and that the Company’sestimate of the date of filing such registration statement is made in good faith, and (ii) if theCompany shall furnish to the Purchaser a certificate signed by the Chief Executive Officer of theCompany stating that in the good faith judgment of the Board it would be seriously detrimental tothe Company or its stockholders for a registration statement to be filed in the near future, thenthe Company’s obligation to use its best efforts to file a registration statement shall be deferredfor a period not to exceed one hundred twenty (120) days.(8) If the Purchaser intends to distribute Registrable Securities covered by its demand bymeans of an underwriting, it shall so advise the Company as part of its demand made pursuant tothis Section 6.1. The Company shall, together with the Purchaser, enter into an underwritingagreement in customary form with the underwriter or underwriters selected by the Purchaser andreasonably satisfactory to the Company. If the underwriter has not limited the number ofRegistrable Securities to be underwritten, the Company may include securities for its own account(or for the account of other stockholders) in such registration if the underwriter so agrees and ifthe number of Registrable Securities that would otherwise have been included in such registrationand underwriting will not thereby be limited.(9) The Company shall enter into all such agreements (including without limitation anunderwriting agreement) and perform all such actions as is customary for a company to facilitatethe sale of its securities pursuant to registration rights.
 
-13-

 
(B) With a view to making available to the Purchaser the benefits of Rule 144 under theSecurities Act (“Rule 144”) (or its successor rule) and any other rule or regulation of theSEC that may at any time permit the Purchaser to sell Registrable Securities to the public withoutregistration, the Company covenants and agrees to: (i) make and keep public information available,as those terms are understood and defined in Rule 144, until such date as all of thePurchaser’s Registrable Securities shall have been resold; (ii) file with the SEC in a timelymanner all reports and other documents required of the Company under the Securities Act and underthe Exchange Act; and (iii) furnish to the Purchaser upon request, as long as the Purchaser ownsany Registrable Securities, (x) a written statement by the Company that it has complied in allmaterial respects with the reporting requirements of the Securities Act and the Exchange Act, and(y) such other information as may be reasonably requested in order to avail the Purchaser of anyrule or regulation of the SEC that permits the selling of such Registrable Securities withoutregistration.(C) The Company shall not be obligated to effect, or to take any action to effect, anyregistration pursuant to this Section 6.1:(1) During the period commencing on the date of execution of the Collaboration Agreement andcontinuing until the earlier to occur of (1) the Release Date (as defined in Section 7.1), (2) thedate of the Announcement of Results, or (3) if the Collaboration Agreement is terminated by thePurchaser for any reason, the effective date of such termination;(2) During the one hundred eighty (180) day period following the effective date of the firstRegistration Statement filed pursuant to this Section 6.1; provided that if the number of shares ofCommon Stock are limited pursuant to Section 6.1(A), the Purchaser may require an additionalregistration as soon as such additional registration would be legally permissible;(3) After the Purchaser has made two (2) demands for registration pursuant to this Section6.1, and such demands have been declared or ordered effective by the SEC; provided that thePurchaser may require an additional registration for each time the number of shares of Common Stockregistered are limited pursuant to Section 6.1(A); or(4) If the Purchaser holds five percent (5%) or less of the outstanding Common Stock of theCompany (calculated based on the number of shares held by the Purchaser and its ControlledAffiliates and the number of shares of Common Stock into which Shares held by the Purchaser and itsControlled Affiliates are convertible), after the date on which the Purchaser is able toimmediately sell all Registrable Securities held or entitled to be held by the Purchaser under Rule144.
 
-14-

 
6.2 Piggy-Back Registration.(A) So long as the Purchaser holds more than five percent (5%) (measured on an as-converted tocommon stock basis) of the outstanding Common Stock (calculated based on the number of shares heldby the Purchaser and its Controlled Affiliates and the number of shares of Common Stock into whichShares held by the Purchaser and its Controlled Affiliates are convertible), if the Companyproposes to file with the SEC a registration statement relating to an offering of any of itssecurities for its own account or the account of security holders exercising their demandregistration rights (other than on Form S-4 or Form S-8 or their then equivalents relating tosecurities to be issued solely in connection with an acquisition of any entity or business orequitysecurities issuable in connection with stock option or other employee benefit plans), theCompany shall promptly send to the Purchaser written notice of the Company’s intention to file sucha registration statement and of the Purchaser’s rights under this Section 6.2 and, if withinfifteen (15) days after receipt of such notice, the Purchaser shall so request in writing, theCompany shall include in such registration statement all or any Registrable Securities thePurchaser requests to be registered. No right to registration of Registrable Securities under thisSection 6.2 shall be construed to limit any registration rights granted under Section 6.1.(B) The Company shall bear and pay all expenses incurred in connection with any registration,filing or qualification of Registrable Securities to be registered pursuant to this Section 6.2,including all registration, filing, qualification, printing and accounting fees relating orapportionable thereto, and the reasonable fees and expenses of counsel for the Purchaser not toexceed $10,000 per registration.(C) If the registration of which the Company gives notice is for a registered public offeringinvolving an underwriting, the Company shall so indicate in the notice given pursuant to thisSection 6.2. In such event the right of the Purchaser to registration pursuant to this Section 6.2shall be conditioned upon the Purchaser’s agreeing to participate in such underwriting and in theinclusion of the Purchaser’s Registrable Securities in the underwriting to the extent providedherein. The Purchaser shall (together with the Company and the other holders distributing theirsecurities through such underwriting) enter into an underwriting agreement in customary form withthe underwriter or underwriters selected for such underwriting by the Company or by other holdersexercising any demand registration rights. Notwithstanding any other provision of this Section6.2, if the underwriter determines that marketing factors require a limitation of the number ofshares to be underwritten, the underwriter may exclude some or all Registrable Securities or othersecurities from such registration and underwriting (hereinafter an “Underwriter Cutback”).In the event of an Underwriter Cutback, the Company shall so advise the Purchaser and the otherholders distributing their securities through such underwriting, and the number of shares that maybe included in the registration and the underwriting shall be allocated in proportion, as nearly aspracticable, to the respective amounts of shares of Common Stock held by the Purchaser and suchother holders distributing their securities through the underwriting. If the Purchaser disapprovesof the terms of any such underwriting, the Purchaser may elect to withdraw therefrom by writtennotice to the Company and the underwriter. Any securities excluded or withdrawn from suchunderwriting shall be withdrawn from such registration.
 
-15-

 
6.3 Indemnification.In the event any Registrable Securities are included in a Registration Statement under thisSection 6:(A) To the extent permitted by law, the Company will indemnify and hold harmless thePurchaser, each of the Purchaser’s officers, directors and agents, each person who participates inthe offering of Registrable Securities, including underwriters (as defined in the Securities Act)and each person, if any, who controls the Purchaser (or other participating person) within themeaning of the Securities Act, or the Exchange Act, against any losses, claims, damages,or liabilities (joint or several) to which they may become subject under the Securities Act,the Exchange Act, or other federal or state law, insofar as such losses, claims, damages, orliabilities (or actions in respect thereof) arise out of or are based upon any of the followingstatements, omissions or violations (collectively a “Violation”): (i) any untrue statementor alleged untrue statement of a material fact contained in such Registration Statement, includingany preliminary prospectus or final prospectus contained therein or any amendments or supplementsthereto, including any information deemed to be a part thereof as of the time of effectivenesspursuant to paragraph (b) of Rule 430A of the Rules and Regulations under the Securities Act, orthe prospectus, in the form first filed with the SEC pursuant to Rule 424(b) of the Rules andRegulations under the Securities Act, or filed as part of such Registration Statement at the timeof effectiveness if no Rule 424(b) filing is required (the “Prospectus”), or any amendmentor supplement thereto, (ii) the omission or alleged omission to state a material fact required tobe stated in such Registration Statement or necessary to make the statements in such RegistrationStatement not misleading, or (iii) any violation or alleged violation by the Company of theSecurities Act, the Exchange Act, any state securities law or any rule or regulation promulgatedunder the Securities Act, or the Exchange Act, or any state securities law; and the Company willpay to the Purchaser or controlling person, any legal or other expenses reasonably incurred by themin connection with investigating or defending any such loss, claim, damage, liability, or actionpromptly as such expenses are incurred; provided, however, that the indemnity agreement containedin this subsection 6.3(A) shall not apply to amounts paid in settlement of any such loss, claim,damage, liability, or action if such settlement is effected without the consent of the Company(which consent shall not be unreasonably withheld or delayed), nor shall the Company be liable inany such case for any such loss, claim, damage, liability, or action to the extent that it solelyarises out of or is based upon the Company’s reliance upon written information furnished expresslyfor use in connection with such registration by the Purchaser or an officer, director or agentthereof;(B) To the extent permitted by law, the Purchaser will, if Registrable Securities held by thePurchaser are included in the registration, indemnify and hold harmless the Company, each of itsdirectors, each of its officers who has signed the registration statement and each person whocontrols the Company within the meaning of the Securities Act (and subject to any underwriting orother separate agreement wherein the Purchaser may agree to indemnify an underwriter, suchunderwriter), against any losses, claims, damages, or liabilities (joint or several) to which anyof the foregoing persons may become subject, under the Securities Act, the Exchange Act, or otherfederal, state law, insofar as such losses, claims, damages, or liabilities (or actions in respectthereto) arise out of or are based upon the Company’s reliance upon written information furnishedby the Purchaser expressly for use in connection with such registration; and the Purchaser willpay, as incurred, any legal or other expenses reasonably incurred by the Company, in connectionwith investigating or defending any such loss, claim, damage, liability, or action; providedhowever, that the indemnity agreement contained in this subsection 6.3(B) shall not apply toamounts paid in settlement of any such loss, claim, damage, liability or action if such settlementis effected without the consent of the Purchaser, which consent shall not be unreasonably withheldor delayed; provided, further, that the amount of the indemnity shall be limited to the proceeds ofsale received by the Purchaser unless such indemnity obligation arises from the Purchaser’scommission of fraud or intentional misrepresentation;
 
-16-

 
(C) Promptly after receipt by an indemnified party under this Section 6.3 of notice of thecommencement of any action (including any governmental action), such indemnified party will, if aclaim in respect thereof is to be made against any indemnifying party under this Section 6.3,deliver to the indemnifying party a written notice of the commencement thereof and the indemnifyingparty shall have the right to participate in, and, to the extent the indemnifying party so desires,jointly with any other indemnifying party similarly noticed, to assume the defense thereof withcounsel mutually satisfactory to the parties; provided, however, that an indemnified party(together with all other indemnified parties which may be represented without conflict by onecounsel) shall have the right to retain one separate counsel, with the fees and expenses to be paidby the indemnifying party, if representation of such indemnified party by the counsel retained bythe indemnifying party would be inappropriate due to actual or potential differing interestsbetween such indemnified party and any other party represented by such counsel in such proceeding.The failure to deliver written notice to the indemnifying party within a reasonable time of thecommencement of any such action, if prejudicial to its ability to defend such action, shall relievesuch indemnifying party of any liability to the indemnified party under this Section 6.3, but theomission so to deliver written notice to the indemnifying party will not relieve it of anyliability that it may have to any indemnified party otherwise than under this Section 6.3;(D) If the indemnification provided for in this Section 6.3 is held by a court of competentjurisdiction to be unavailable to an indemnified party with respect to any loss, liability, claim,damage, or expense referred to therein, then the indemnifying party, in lieu of indemnifying suchindemnified party hereunder, shall contribute to the amount paid or payable by such indemnifiedparty as a result of such loss, liability, claim, damage, or expense in such proportion as isappropriate to reflect the relative fault of the indemnifying party on the one hand and of theindemnified party on the other in connection with the statements or omissions that resulted in suchloss, liability, claim, damage, or expense as well as any other relevant equitable considerations.The relative fault of the indemnifying party and of the indemnified party shall be determined byreference to, among other things, whether the untrue or alleged untrue statement of a material factor the omission to state a material fact relates to information supplied by the indemnifying partyor by the indemnified party and the parties’ relative intent, knowledge, access to information, andopportunity to correct or prevent such statement or omission; and(E) The obligations of the Company and the Purchaser under this Section 6.3 shall survive thecompletion of any offering of Registrable Securities in a registration statement, as applicable,under this Section 6.3, and otherwise.6.4 Further Obligations. The Company shall be required to take such other furtheractions as are customary in connection with the registration obligations of the Company pursuant tothis Section 6.SECTION 7. CERTAIN COVENANTS7.1Restriction on Sale. [****].7.2 Dissenters Rights. [****].
 
-17-

 
7.3 Lock-Up Agreement. Subject to the Company complying with Section 6.2, thePurchaser hereby agrees that the Purchaser and its Controlled Affiliates shall not offer, sell,contract to sell, pledge, grant any option to purchase, make any short sale or otherwise dispose ofin any manner, either directly or indirectly, or otherwise transfer any Shares or shares of CommonStock held by them (other than those included in a registration) during the one hundred eighty(180) day period following the effective date of the any registration statement involving a publicoffering of the Company’s securities filed under the Securities Act, provided that all Section16(b) reporting officers and directors of the Company, and holders of at least ten percent (10%) ofthe Company’s voting securities (who are affiliates of the Company) (collectively, the “Lock-UpPersons”) are bound by and have entered into similar agreements; and provided further that thelock-up agreed to hereby shall expire if during the term of the lock-up any other Lock-Up Person isreleased from his, her or its lock-up obligations with respect to any security of the Company. Theobligations described in this Section 7.3 shall not apply to a registration relating solely toemployee benefit plans on Form S-l or Form S-8 or similar forms that may be promulgated in thefuture, or a registration relating solely to a transaction on Form S-4 or similar forms that may bepromulgated in the future. The Company may impose stop-transfer instructions and may stamp eachsuch certificate with the second legend with respect to the Shares (or shares of Common Stock intowhich the Shares are converted) subject to the foregoing restriction until the end of such onehundred eighty (180) day period. The Purchaser agrees to execute (and cause any applicableControlled Affiliates to execute) a market standoff agreement with said underwriters in customaryform consistent with the provisions hereof.7.4 Stockholder Vote. The Company shall take all appropriate and necessary action toseek the approval of its stockholders by July 1, 2009, whether at the 2009 annual meeting orotherwise, of the issuance to the Purchaser of Shares in excess of limitations placed on suchissuances under NASDAQ Marketplace Rule 4350(i)(1)(B) without such stockholder approval.SECTION 8. RIGHT TO PARTICIPATE IN FUTURE SALES OR ISSUANCES OF COMMON STOCK8.1 The Company hereby grants the Purchaser a right to participate with respect to any sale orissuance by the Company after the date hereof of any shares of, or other securities or rightsconvertible into, or entitling the holder thereof to receive directly or indirectly, additionalshares of Common Stock (collectively, the “Additional Stock”); provided that “AdditionalStock” does not include any (i) shares of Common Stock (or options therefor) issued to officers,directors or employees of, or consultants to, the Company pursuant to Company stock plans oragreements on terms approved by the Board of Directors; provided that such securities are issuedunder compensation plans that have been approved by the Company’s stockholders and are awardedsolely for compensation for serving as such officer, director, employee or consultant; (ii) sharesof Common Stock, or options or warrants to purchase Common Stock, issued pursuant to jointventures, technology licensing or research and development activities; or (iii) shares of CommonStock, or options or warrants to purchase Common Stock, issued in connection with bona fideacquisitions, mergers or similar transactions; and provided further that such right to participateshall only apply if, at the time of such offering of Additional Stock, the Purchaser holds tenpercent (10 %) or more of the outstanding Common
 
-18-

 
Stock of the Company (calculated based on thenumber of outstanding shares of Common Stock without conversion of outstanding options or warrants andtaking into account the number of shares of Common Stock into which Shares held by the Purchaserand its Controlled Affiliates are convertible as being shares of Common Stock beneficially owned bythe Purchaser and its Controlled Affiliates). If the Company proposes to offer Additional Stock toa third party prior to the earlier of (i) termination of the Collaboration Agreement or (ii) thefirst date on which Purchaser has transferred any Shares to any third party, the Company shall alsomake an offering of the Additional Stock to the Purchaser in accordance with the provisions of thisSection 8.1 and the Purchaser may elect to purchase up to the Purchaser’s Pro Rata Share (asdefined below) of the Additional Stock offered by the Company in accordance with the followingprovisions:(A) The Company shall deliver a written notice (the “Offering Notice”) to thePurchaser, prior to or concurrently with any written communication being delivered to any potentialinvestor or party concerning such Additional Stock, stating (i) the Company’s intention to offersuch Additional Stock in a bona fide transaction, (ii) the number of shares of Additional Stock tobe offered, (iii) the price and other material terms and conditions, if any, upon which the Companyproposes to offer the Additional Stock and (iv) a statement as to the number of days from receiptof the Offering Notice within which the Purchaser must respond to the Offering Notice (which periodshall not be less [****] (the “Response Period”). The Offering Notice shall constitute abinding offer by the Company to sell Additional Stock to the Purchaser up to the Purchaser’s ProRata Share of the Additional Stock at the price per share and on the terms designated in theOffering Notice, subject to and in accordance with the terms of this Section 8.1; provided,however, that the Purchaser shall not be required to meet the non-monetary considerationset forth in the Offering Notice, if any, including, without limitation, delivery of othersecurities or property in exchange for the Additional Stock to be sold, if the Purchaser paysalternative, but comparable, consideration in cash as determined in good faith by the Board ofDirectors of the Company. The price per share and the terms of the Additional Stock designated inthe Offering Notice shall not be any less favorable than (x) the price per share and terms offeredby the Company to any other party with respect to the Additional Stock; or (y) the price per shareand terms accepted by the Company from any other party with respect to the Additional Stock.(B) Prior to the expiration of the Response Period, the Purchaser shall notify the Company inwriting of the number of shares of Additional Stock, if any, the Purchaser intends to purchasepursuant to the terms of the Offering Notice up to the Purchaser’s Pro Rata Share of the AdditionalStock. If the Purchaser fails to timely deliver its written acceptance to purchase up to its ProRata Share of the Additional Stock, the Purchaser shall be deemed to have waived its right topurchase Additional Stock pursuant to this Section 8.1 with respect to that particular offer by theCompany of Additional Stock. The closing of the purchase by the Purchaser of Additional Stockshall be conditioned on the sale of all of the Additional Stock and take place at the same closingas that of any third-party purchasers, at the principal executive offices of the Company (or suchother location as the parties may agree on) on the fifth business day after the expiration of theResponse Period. At such closing, the Purchaser shall make payment in the appropriate amount bymeans of a cashiers check or by a wire transfer to the Company against delivery of stockcertificates representing the Additional Stock so purchased.
 
-19-

 
(C) After expiration of the Response Period, the Company may for a period of [****] offer theremaining unsubscribed portion of the Purchaser’s Pro Rata Share of the Additional Stock, if any,to any other party at a price not less than, and upon terms no more favorable to the offeree than,those specified in the Offering Notice. If the Company does not enter into an agreement for thesale of the remaining unsubscribed portion the Additional Stock within such period, or if suchagreement is not consummated within [****] of the execution thereof, the right provided pursuant tothis Section 8.1 shall be deemed to be revived and such remaining unsubscribed portion theAdditional Stock shall not be offered unless first reoffered to the Purchaser in accordance withthis Section 8.1.(D) [****](E) The Purchaser shall keep the information received by it in an Offering Notice confidentialto the extent necessary to comply with applicable securities laws (including, without limitation,Regulation FD).SECTION 9. MISCELLANEOUS9.1 Successors and Assigns. This Agreement, and the rights and obligations of theParties hereunder, may not be assigned to a Third Party, other than a permitted assignee of theCollaboration Agreement. Except as otherwise provided herein, the provisions of this Agreementshall inure to the benefit of, and be binding upon, the respective successors, assigns, heirs,executors, and administrators of the parties hereto.9.2 Expenses. Except as provided in Section 6 hereof, each party to the Agreementwill pay its own expenses in connection with the transactions contemplated by this Agreement,whether or not the transactions are consummated.9.3 Indemnification. The Company and the Purchaser will indemnify and hold the otherparties harmless from and against any and all claims, liabilities or obligations with respect toinvestment banking, brokerage or finders’ fees or commissions, or consulting fees in connectionwith the transactions contemplated by this Agreement asserted by any person on the basis of anyagreement, statement or representation alleged to have been made by such indemnifying party.9.4 Severability. The invalidity or unenforceability of any provision of thisAgreement shall not affect the validity or enforceability of any other provision of this Agreement.Any provision of this Agreement held invalid or unenforceable only in part or degree will remainin full force and effect to the extent not held invalid or unenforceable.
 
-20-

 
9.5 Governing Law; Venue; Waiver of Jury Trial. This Agreement shall be governed byand construed in accordance with the laws of the State of California and the laws of the UnitedStates applicable therein (in each case without giving effect to any choice or conflict of lawsprovision or rule that would cause the application of the laws of any other jurisdiction) and shallbe treated in all respects as a California contract. Any action, suit or proceeding arising out ofor relating to this Agreement shall be brought in San Francisco County, California or, if it has orcanacquire jurisdiction, any Federal court located in such State and County, and EACH OF THEPARTIES HERETO, AFTER CONSULTING WITH OR HAVING HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL, HEREBYKNOWINGLY, VOLUNTARILY, INTENTIONALLY AND IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF SUCHCOURTS AND WAIVES TRIAL BY JURY (AND AGREES NOT TO REQUEST TRIAL BY JURY), IN EACH CASE INCONNECTION WITH ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT. Eachof the parties hereto hereby irrevocably and unconditionally waives any objection to the laying ofvenue of any action, suit or proceeding arising out of or relating to this Agreement or thetransactions contemplated hereby in the courts of the State of California or the United States ofAmerica, in each case located in San Francisco County, and hereby further irrevocably andunconditionally waives and agrees not to plead or claim in any such court that any such matterbrought in any such court has been brought in an inconvenient forum. Each party hereby irrevocablywaives personal service of process and consents to process being served in any such suit, action orproceeding by mailing a copy thereof to such party at the address for such notices to it under thisAgreement and agrees that such service shall constitute good and sufficient service of process andnotice thereof. Nothing contained herein shall be deemed to limit in any way any right to serveprocess in any manner permitted by law.9.6 Injunctive Relief. The parties hereto agree that irreparable damage would occurin the event that any of the provisions of this Agreement were not performed in accordance withtheir specific terms or were otherwise breached. It is accordingly agreed by the parties that theparties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement andto enforce specifically the terms and provisions hereof in any court of the United States or anystate having jurisdiction, this remedy being in addition to any other remedy to which they areentitled to at law or in equity.9.7 Notice. All notices, requests, consents, and other communications under thisAgreement shall be in writing and shall be deemed delivered (a) three Business Days after beingsent by registered or certified mail, return receipt requested, postage prepaid, (b) one BusinessDay after being sent via a reputable nationwide overnight courier service guaranteeing nextBusiness Day delivery, or (c) upon delivery when sent by facsimile (with confirmation of receipt),in each case to the intended recipient as set forth below:If to the Company:La Jolla Pharmaceutical Company