Document:

Exhibit 10.15

                                           July 22, 2004

EarlyBirdCapital, Inc.
600 Third Avenue
33rd Floor
New York, New York 10016

      Re:   China Unistone Acquisition Corporation

Gentlemen:

            This letter will confirm the agreement of the undersigned to each
purchase warrants ("Warrants") of China Unistone Acquisition Corporation
("Company") included in the units ("Units") being sold in the Company's initial
public offering ("IPO") upon the terms and conditions set forth herein. Each
Unit is comprised of one share of Common Stock and two Warrants. The shares of
Common Stock and Warrants will not be separately tradeable until 90 days after
the effective date of the Company's IPO unless EarlyBirdCapital, Inc. ("EBC")
informs the Company of its decision to allow earlier separate trading.

            Each of the undersigned jointly and severally agrees that this
letter agreement constitutes an irrevocable order for EBC to purchase for the
undersigned's accounts within the forty-trading day period commencing on the
date separate trading of the Warrants commences ("Separation Date") up to an
aggregate of 1,000,000 Warrants at market prices not to exceed $0.65 per Warrant
("Maximum Warrant Purchase"). EBC (or such other broker dealer(s) as EBC may
assign the order to) agrees to fill such order in such amounts and at such times
as it may determine, in its sole discretion, during the forty-trading day period
commencing on the Separation Date. EBC further agrees that it will not charge
the undersigned any fees and/or commissions with respect to such purchase
obligation.

            Any of the undersigned may notify EBC that all or part of the
Maximum Warrant Purchase will be made by an affiliate of any of the undersigned
(or another person or entity introduced to EBC by the undersigned (a
"Designee")) who (or which) has an account at EBC and, in such event, EBC will
make such purchase on behalf of said affiliate or Designee; provided, however,
that each of the undersigned hereby agrees to make payment of the purchase price
of such purchase in the event that the affiliate or Designee fails to make such
payment.

            Each of the undersigned agrees that neither he nor any affiliate or
Designee shall sell or transfer the Warrants until after the consummation of a
merger, capital stock exchange, asset acquisition or other similar business
combination with an operating business and acknowledges that, at the option of
EBC, the certificates for such Warrants shall contain a legend indicating such
restriction on transferability.

                                             Very truly yours,

                                             /s/ Chih T. Cheung
                                             -------------------
                                             Chih T. Cheung

                                             /s/ James Z. Li
                                             -------------------
                                             James Z. Li

                                             /s/ James Preissler
                                             -------------------
                                             James Preissler<PAGE>
                                                                     Exhibit 4.2

                   FIFTH RESTATED STOCKHOLDER RIGHTS AGREEMENT

      This Fifth Restated Stockholder Rights Agreement ("AGREEMENT") is entered
into as of August 15, 2001, by and among VNUS Medical Technologies, Inc. (the
"COMPANY") and the persons and entities set forth on the Schedule of Investors
attached as Exhibit A hereto (the "INVESTORS") and amends and restates in its
entirety the Stockholders Rights Agreement dated May 2, 1997, as amended and
restated by the Fourth Amended and Restated Stockholders Rights Agreement dated
February 1, 2001 (the "PRIOR RIGHTS AGREEMENT").

      WHEREAS, the Company and certain of the investors identified in Exhibit A
hereto are entering into a Series E Preferred Stock Purchase Agreement dated
August 15, 2001 pursuant to which such investors will purchase from the Company
shares of the Company's Series E Preferred Stock;

      WHEREAS, the Company, the Investors purchasing the Series E Preferred
Stock and the other Investors now wish to amend this Agreement in accordance
with paragraph 7.1 hereof in order to provide for such rights and amendments
effective as of August 17, 2001.

      NOW, THEREFORE, the parties hereto hereby agree as follows:

1.    Registration Rights.

      1.1 Certain Definitions. As used in this Agreement, the following terms
shall have the following respective meanings:

            "BCC" shall mean The Bay City Capital Fund I, L.P.

            "BCC WARRANT" shall mean that certain warrant dated February 1, 2001
exercisable for the purchase of up to 210,000 shares of Common Stock issued by
the Company to BCC.

            "CODE" shall mean the Internal Revenue Code of 1986, as amended.

            "COMMON STOCK" shall mean the common stock, par value $0.01 per
share, of the Company.

            "COMMISSION" shall mean the Securities and Exchange Commission or
any other federal agency at the time administering the Securities Act.

            "CONVERSION STOCK" shall mean the shares of the Company's Common
Stock issued or issuable upon conversion of the Preferred Stock.

            "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.

            "HOLDER" shall mean the original purchaser of the Registrable
Securities or securities convertible into Registrable Securities and any person
holding Registrable Securities or securities convertible into Registrable
Securities to whom the rights under this paragraph 1 have been transferred in
accordance with paragraph 1.10 hereof.
<PAGE>
            "INITIATING HOLDERS" shall mean any Holder or Holders who in the
aggregate hold more than 50% of the outstanding Registrable Securities.

            "INVESTOR" shall mean a purchaser of Common Stock, a purchaser of
Series A-1 Preferred Stock, a purchaser of Series A-2 Preferred Stock and a
purchaser of Series A-3 Preferred Stock pursuant to the Stock Purchase Agreement
dated January 6, 1995; a purchaser of Series B Preferred Stock pursuant to the
Stock Purchase Agreement dated August 6, 1996; a purchaser of Series C Preferred
Stock pursuant to the Series C Preferred Stock Purchase Agreement dated May 2,
1997; Lighthouse Capital Partners II, L.P.; a purchaser of Series D Preferred
Stock pursuant to the Series D Preferred Stock Purchase Agreement dated February
25, 1999; and a purchaser of Series E Preferred Stock pursuant to the Series E
Preferred Stock Purchase Agreement dated August 15, 2001.

            "PREFERRED STOCK" shall mean the issued and outstanding shares of
the Company's Series A-1 Preferred Stock, Series A-2 Preferred Stock, Series A-3
Preferred Stock, Series B Preferred Stock, Series C Preferred Stock (including
Series C Preferred Stock issued upon the exercise of warrants to purchase Series
C Preferred Stock), Series D Preferred Stock and Series E Preferred Stock.

            "REGISTRABLE SECURITIES" means (i) those shares of Common Stock held
by Lighthouse Capital Partners II, L.P., that are (A) issued or issuable upon
the conversion of the shares of Series C Preferred Stock issued or issuable upon
the exercise of the Preferred Stock Purchase Warrant dated June 25, 1998 (the
"SERIES C WARRANT") to acquire 44,118 shares of the Company's Series C Preferred
Stock or (B) otherwise issuable under the Series C Warrant, (ii) the shares of
Common Stock of the Company issued or issuable upon the exercise of the BCC
Warrant or any shares of Common Stock otherwise issuable under the BCC Warrant
(iii) the Conversion Stock and (iv) any Common Stock of the Company issued or
issuable with respect to, or in exchange for or in replacement of the Conversion
Stock or other securities convertible into or exercisable for Preferred Stock
upon any stock split, stock dividend, recapitalization, reorganization, merger,
sale of assets or similar event, provided, however, that shares of Common Stock
or other securities shall not be treated as Registrable Securities: (X) if they
have been sold to or through a broker or dealer or underwriter in a public
distribution or a public securities transaction or pursuant to Rule 144, or (Y)
if (1) such securities are held by a Holder holding less than 1% of the
outstanding voting securities of the Company, (2) a public market exists for the
Company's Common Stock and (3) prior to the date of such proposed sale such
securities are (in the opinion of counsel to the Company) available for
immediate sale in a transaction exempt from the prospectus delivery requirements
of the Securities Act such that all transfer restrictions and legends with
respect thereto may be removed immediately prior to the consummation of such
sale.

            The terms "REGISTER," "REGISTERED" and "REGISTRATION" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of the
effectiveness of such registration statement.

            "REGISTRATION EXPENSES" shall mean all expenses, except as otherwise
stated below, incurred by the Company in complying with paragraphs 1.2, 1.3 and
1.4 hereof, including, without limitation, all registration, qualification and
filing fees, printing expenses,

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escrow fees, fees and disbursements of counsel for the Company, reasonable fees
and disbursements not to exceed $20,000 of a single special counsel for the
Holders, blue sky fees and expenses, the expense of any special audits incident
to or required by any such registration (but excluding the compensation of
regular employees of the Company which shall be paid in any event by the
Company).

            "RESTRICTED SECURITIES" shall mean the securities of the Company
required to bear a legend in the form set forth in paragraph 3.2.

            "SECURITIES ACT" shall mean the Securities Act of 1933, as amended,
or any similar federal statute and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.

            "SELLING EXPENSES" shall mean all underwriting discounts, selling
commissions and stock transfer taxes, if any, applicable to the securities
registered by the Holders.

      1.2 Requested Registration.

            (a) Request for Registration. If (i) prior to the Company's first
registered underwritten public offering of its Common Stock, the Company shall
receive from an Initiating Holder or Initiating Holders a written request that
the Company effect any registration, qualification or compliance with respect to
shares of Registrable Securities having an expected aggregate offering price of
at least $3,000,000, or (ii) subsequent to the Company's first registered
underwritten public offering of its Common Stock, the Company shall receive from
Holders of Registrable Securities a written request that the Company effect any
registration, qualification or compliance with respect to shares of Registrable
Securities having an expected aggregate offering price of at least $10,000,000,
the Company will:

                  (i) within ten days of the receipt by the Company of such
notice, give written notice of the proposed registration, qualification or
compliance to all other Holders; and

                  (ii) as soon as practicable, use its best efforts to effect
such registration, qualification or compliance (including, without limitation,
appropriate qualification under applicable blue sky or other state securities
laws and appropriate compliance with applicable regulations issued under the
Securities Act and any other governmental requirements or regulations) as may be
so requested and as would permit or facilitate the sale and distribution of all
or such portion of such Registrable Securities as are specified in such request,
together with all or such portion of the Registrable Securities of any Holder or
Holders joining in such request as are specified in a written request received
by the Company within 20 days after receipt of such written notice from the
Company;

      Provided, however, that the Company shall not be obligated to take any
action to effect any such registration, qualification or compliance pursuant to
this paragraph 1.2:

                        (A) In any particular jurisdiction in which the Company
would be required to execute a general consent to service of process in
effecting such registration, qualification or compliance unless the Company is
already subject to service in such jurisdiction and except as may be required by
the Securities Act;

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                        (B) During any period commencing on the date of filing
of, and ending on the date three (3) months immediately following the effective
date of, any registration statement pertaining to securities of the Company
(other than a registration of securities in a Rule 145 transaction or with
respect to an employee benefit plan), provided that the Company is actively
employing in good faith all reasonable efforts to cause such registration
statement to become effective;

                        (C) After the Company has effected two such
registrations pursuant to this paragraph 1.2(a), which registrations have been
declared or ordered effective; provided, however that in the event that any
legal restriction or prohibition shall result in the inability of the Holders
participating in a registration pursuant to this paragraph 1.2(a) to sell at
least 75% of the Registrable Securities included in any such registration within
180 days of the effectiveness thereof, then the Holders shall be entitled to
demand an additional registration pursuant to this paragraph 1.2(a);

                        (D) If the Company shall furnish to such Holders a
certificate signed by the President of the Company stating that in the good
faith judgment of the Board of Directors it would be seriously detrimental to
the Company or its stockholders for a registration statement to be filed in the
near future, then the Company's obligation to use its best efforts to register,
qualify or comply under this paragraph 1.2 shall be deferred for a period not to
exceed 120 days from the date of receipt of written request from the Initiating
Holders; provided, however, that the Company shall not exercise such right more
than once in any twelve-month period.

      Subject to the foregoing clauses (A) through (D), the Company shall file a
registration statement covering the Registrable Securities so requested to be
registered as soon as practicable, after receipt of the request or requests of
the Initiating Holders.

            (b) Underwriting. In the event that a registration pursuant to this
paragraph 1.2 is for a registered public offering involving an underwriting, the
Company shall so advise the Holders as part of the notice given pursuant to
paragraph 1.2(a)(i). In such event, the right of any Holder to registration
pursuant to this paragraph 1.2 shall be conditioned upon such Holder's
participation in the underwriting arrangements required by this paragraph
1.2(b), and the inclusion of such Holder's Registrable Securities in the
underwriting to the extent requested shall be limited to the extent provided
herein.

      The Company shall (together with all Holders proposing to distribute their
securities through such underwriting) enter into an underwriting agreement in
customary form with the managing underwriter selected for such underwriting by
the Company and reasonably acceptable to a majority of the Holders proposing to
distribute their securities through such underwriting. Notwithstanding any other
provision of this paragraph 1.2, if the managing underwriter advises the
Initiating Holders in writing that marketing factors require a limitation of the
number of shares to be underwritten, then the Company shall so advise all
holders of Registrable Securities and the number of shares of Registrable
Securities that may be included in the registration and underwriting shall be
allocated among all Holders thereof in proportion, as nearly as practicable, to
the respective amounts of Registrable Securities held by such Holders at the
time of filing the registration statement or in such other manner as shall be
agreed to by the Company and Holders

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<PAGE>
of a majority of the Registrable Securities proposed to be included in such
registration. No Registrable Securities excluded from the underwriting by reason
of the underwriter's marketing limitation shall be included in such
registration. To facilitate the allocation of shares in accordance with the
above provisions, the Company or the underwriters may round the number of shares
allocated to any Holder to the nearest 100 shares.

      If any Holder of Registrable Securities disapproves of the terms of the
underwriting, such person may elect to withdraw therefrom by written notice to
the Company, the managing underwriter and the Initiating Holders. The
Registrable Securities and/or other securities so withdrawn shall also be
withdrawn from registration, and such Registrable Securities shall not be
transferred in a public distribution prior to 180 days after the effective date
of such registration, or such other shorter period of time as the underwriters
may require.

      1.3 Company Registration.

            (a) Notice of Registration. If at any time or from time to time the
Company shall determine to register any of its securities, either for its own
account or the account of a security holder or holders, other than (i) a
registration relating solely to employee benefit plans or (ii) a registration
relating solely to a Commission Rule 145 transaction, or (iii) a registration
pursuant to paragraph 1.2 hereof, the Company will:

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

                  (ii) include in such registration (and any related
qualification under blue sky laws or other compliance), and in any underwriting
involved therein, all the Registrable Securities specified in a written request
or requests, made within 20 days after receipt of such written notice from the
Company, by any Holder.

            (b) Preservation of Registration Right. If a Holder decides not to
include all of its Registrable Securities in any registration statement
thereafter filed by the Company, such Holder shall nevertheless continue to have
the right to include any Registrable Securities in any subsequent registration
statements as may be filed by the Company with respect to offerings of its
securities, all upon the terms and conditions set forth herein.

            (c) Underwriting. If the registration of which the Company gives
notice is for a registered public offering involving an underwriting, the
Company shall so advise the Holders as a part of the written notice given
pursuant to paragraph 1.3(a)(i). In such event the right of any Holder to
registration pursuant to this paragraph 1.3 shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of Registrable
Securities in the underwriting to the extent provided herein. All Holders
proposing to distribute their securities through such underwriting shall
(together with the Company and the other holders distributing their securities
through such underwriting) enter into an underwriting agreement in customary
form with the managing underwriter selected for such underwriting by the
Company. Notwithstanding any other provision of this paragraph 1.3, if the
managing underwriter determines that marketing factors require a limitation of
the number of shares to be underwritten, the managing underwriter may limit the
Registrable Securities or other securities to be included in such registration;
provided, however, that no such reduction shall reduce the amount of

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<PAGE>
securities of the selling Holders included in the registration below 25% of the
total amount of securities included in such registration, unless such offering
is the initial public offering and such registration does not include shares of
any other selling shareholders, in which event any or all of the Registrable
Securities of the Holders may be excluded. The Company shall so advise all
Holders and other holders distributing their securities through such
underwriting and the number of shares of Registrable Securities and other
securities that may be included in the registration, and underwriting shall be
allocated among all Holders in proportion, as nearly as practicable, to the
respective amounts of Registrable Securities held by such Holders at the time of
filing the registration statement. To facilitate the allocation of shares in
accordance with the above provisions, the Company may round the number of shares
allocated to any Holder or holder to the nearest 100 shares. If any Holder or
holder disapproves of the terms of any such underwriting, he may elect to
withdraw therefrom by written notice to the Company and the managing
underwriter. Any securities excluded or withdrawn from such underwriting shall
be withdrawn from such registration, and shall not be transferred in a public
distribution prior to 90 days after the effective date of the registration
statement relating thereto, or such other shorter period of time as the
underwriters may require.

            (d) Right to Terminate Registration. The Company shall have the
right to terminate or withdraw any registration initiated by it under this
paragraph 1.3 prior to the effectiveness of such registration, whether or not
any Holder has elected to include securities in such registration. The
Registration Expenses of such withdrawn registration shall be borne by the
Company in accordance with paragraph 1.5 hereof.

      1.4 Registration on Form S-3.

            (a) If any Holder or Holders request that the Company file a
registration statement on Form S-3 (or any successor form to Form S-3), or any
similar short-form registration statement, for a public offering of Registrable
Securities the reasonably anticipated aggregate price to the public of which,
net of underwriting discounts and commissions, would exceed $1,000,000, and the
Company is a registrant entitled to use Form S-3 to register the Registrable
Securities for such an offering, the Company shall use its best efforts to cause
such Registrable Securities to be registered for the offering on such form and
to cause such Registrable Securities to be qualified in such jurisdictions as
the Holder or Holders may reasonably request; provided, however, that the
Company shall not be required to effect more than two registrations pursuant to
this paragraph 1.4. The substantive provisions of paragraph 1.2(b) shall be
applicable to each registration initiated under this paragraph 1.4. A
registration under this Section 1.4 shall not constitute a registration under
Section 1.2, nor shall a registration under Section 1.2 constitute a
registration under this Section 1.4.

            (b) Notwithstanding the foregoing, the Company shall not be
obligated to take any action pursuant to this paragraph 1.4: (i) in any
particular jurisdiction in which the Company would be required to execute a
general consent to service of process in effecting such registration,
qualification or compliance unless the Company is already subject to service in
such jurisdiction and except as may be required by the Securities Act; (ii) if
the Company, within ten (10) days of the receipt of the request of the
initiating Holders, gives notice of its bona fide intention to effect the filing
of a registration statement with the Commission within ninety (90) days of
receipt of such request (other than with respect to a registration statement
relating to a

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Rule 145 transaction, or an offering solely to employees); (iii) during the
period starting with the date of filing of, and ending on the date three (3)
months immediately following, the effective date of any registration statement
pertaining to securities of the Company (other than a registration of securities
in a Rule 145 transaction or with respect to an employee benefit plan), provided
that the Company is actively employing in good faith all reasonable efforts to
cause such registration statement to become effective; or (iv) if the Company
shall furnish to such Holder a certificate signed by the President of the
Company stating that in the good faith judgment of the Board of Directors it
would be seriously detrimental to the Company or its stockholders for
registration statements to be filed in the near future, then the Company's
obligation to use its best efforts to file a registration statement shall be
deferred for a period not to exceed 90 days from the receipt of the request to
file such registration by such Holder; provided, however, that the Company shall
not exercise such right more than once in any twelve-month period.

      1.5 Expenses of Registration. All Registration Expenses incurred in
connection with all registrations pursuant to paragraphs 1.2, 1.3 and 1.4 shall
be borne by the Company. All Selling Expenses relating to securities registered
on behalf of the Holders shall be borne by the Holders of such securities
included in the registration pro rata with the Company and among each other on
the basis of the number of shares so registered.

      1.6 Registration Procedures. In the case of each registration,
qualification or compliance effected by the Company pursuant to this paragraph
1, the Company will keep each Holder advised in writing as to the initiation of
each registration, qualification and compliance and as to the completion
thereof. At its expense the Company will, with reasonable promptness:

            (a) Prepare and file with the Commission a registration statement
with respect to such securities and use its best efforts to cause such
registration statement to become and remain effective for at least one hundred
eighty (180) days unless the distribution described in the Registration
Statement has been earlier completed;

            (b) Prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement.

            (c) Furnish to the Holders participating in such registration and to
the underwriters of the securities being registered such reasonable number of
copies of the registration statement, preliminary prospectus, final prospectus
and such other documents as they may reasonably request in order to facilitate
the public offering of such securities.

            (d) Use all reasonable efforts to register and qualify the
securities covered by such registration statement under such other securities or
blue sky laws of such jurisdictions as shall be reasonably requested by the
Holders, provided that the Company shall not be required in connection therewith
or as a condition thereto to qualify to do business or to file a general consent
to service of process in any such states or jurisdictions, unless the Company is
already subject to service in such jurisdiction.

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

            (f) Notify each Holder of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing.

            (g) Furnish, at the request of any Holder requesting registration of
Registrable Securities, on the date such Registrable Securities are delivered to
the underwriters for sale in connection with a registration pursuant to this
paragraph 1.6, (i) an opinion, dated such date, of the counsel representing the
Company for the purposes of such registration, in form and substance as is
customarily given to underwriters in an underwritten public offering, addressed
to the underwriters, if any, and to the Holders requesting registration of
Registrable Securities and (ii) a letter dated such date, from the independent
accountants of the Company, in form and substance as is customarily given by
independent accountants to underwriters in an underwritten public offering,
addressed to the underwriters, if any, and to the Holders requesting
registration of Registrable Securities.

      1.7 Indemnification.

            (a) The Company will indemnify each Holder, each of its officers,
directors, trustees, fiduciaries, partners and legal counsel, and each person
controlling such Holder within the meaning of Section 15 of the Securities Act,
with respect to which registration, qualification or compliance has been
effected pursuant to this paragraph 1, and each underwriter, if any, and each
person who controls any underwriter within the meaning of Section 15 of the
Securities Act, against all expenses, claims, losses, damages or liabilities
(whether joint or several) or actions in respect thereof, including any of the
foregoing incurred in settlement of any litigation, commenced or threatened,
arising out of or based on any untrue statement (or alleged untrue statement) of
a material fact contained in any registration statement, prospectus, offering
circular or other document, or any amendment or supplement thereto, incident to
any such registration, qualification or compliance, or based on any omission (or
alleged omission) to state therein a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances in
which they were made, not misleading, or any violation by the Company of the
Securities Act or any rule or regulation promulgated under the Securities Act
applicable to the Company in connection with any such registration,
qualification or compliance, and the Company will reimburse each such Holder,
each of its officers, directors, trustees, fiduciaries, partners and legal
counsel, and each person controlling such Holder, each such underwriter and each
person who controls any such underwriter, for any legal and any other expenses
reasonably incurred in connection with investigating, preparing or defending any
such claim, loss, damage, liability or action, provided that the Company will
not be liable in any such case to the extent that any such claim, loss, damage,
liability or expense arises out of or is based on any untrue statement or
omission or alleged untrue statement or omission, made in reliance

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upon and in conformity with written information furnished to the Company by an
instrument duly executed by such Holder, underwriter or controlling person and
stated to be specifically for use therein.

            (b) Each Holder will, if Registrable Securities held by such Holder
are included in the securities as to which such registration, qualification or
compliance is being effected, indemnify the Company, each of its directors,
officers and legal counsel, each underwriter, if any, of the Company's
securities covered by such a registration statement, each person who controls
the Company or such underwriter within the meaning of Section 15 of the
Securities Act, and each other such Holder, each of its officers, directors,
partners and legal counsel and each person controlling such other Holder within
the meaning of Section 15 of the Securities Act, against all claims, losses,
damages and liabilities (whether joint or several) or actions in respect
thereof, arising out of or based on any untrue statement (or alleged untrue
statement) of a material fact contained in any such registration statement,
prospectus, offering circular or other document, or any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse the
Company, such Holders, such directors, officers, persons, underwriters or
control persons for any legal or any other expenses reasonably incurred in
connection with investigating or defending any such claim, loss, damage,
liability or action, in each case to the extent, but only to the extent, that
such untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in such registration statement, prospectus, offering circular
or other document in reliance upon and in conformity with written information
furnished to the Company by an instrument duly executed by such Holder and
stated to be specifically for use therein. Notwithstanding the foregoing, the
maximum liability of each Holder under this subparagraph (b) shall be limited to
an amount equal to the net proceeds to such Holder from the sale of such
Holder's Registrable Securities as contemplated herein, unless such liability
resulted from willful misconduct by such Holder. A Holder will not be required
to enter into any agreement or undertaking in connection with any registration
under this paragraph 1 providing for any indemnification or contribution on the
part of such Holder greater than the Holder's obligations under this paragraph
1.7(b).

            (c) Each party entitled to indemnification under this paragraph 1.7
(the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not unreasonably be
withheld), and the Indemnified Party may participate in such defense at such
party's expense, and provided further that the failure of any Indemnified Party
to give notice as provided herein shall not relieve the Indemnifying Party of
its obligations under this paragraph 1 unless the failure to give such notice is
materially prejudicial to an Indemnifying Party's ability to defend such action
and provided further, that the Indemnifying Party shall not assume the defense
for matters as to which there is a conflict of interest or separate and
different defenses but shall bear the expense of such defense nevertheless. No
Indemnifying Party, in the defense of any such claim or litigation, shall,
except with the consent of each Indemnified Party, consent to entry of any
judgment or enter into any settlement which does not include as an unconditional
term thereof the giving by the claimant or

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plaintiff to such Indemnified Party of a release from all liability with respect
to such claim or litigation.

            (d) If the indemnification provided for in this paragraph 1.7 is
held by a court of competent jurisdiction to be unavailable to an Indemnified
Party with respect to any losses, claims, damages or liabilities referred to
herein, the Indemnifying Party, in lieu of indemnifying such Indemnified Party
thereunder, shall to the extent permitted by applicable law contribute to the
amount paid or payable by such Indemnified Party as a result of such loss,
claim, damage or liability in such proportion as is appropriate to reflect the
relative fault of the Indemnifying Party on the one hand and of the Indemnified
Party on the other in connection with the omissions or violations that resulted
in such loss, claim, damage or liability, as well as any other relevant
equitable considerations. The relative fault of the Indemnifying Party and of
the Indemnified Party shall be determined by a court of law by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or omission to state a material fact relates to information supplied by the
Indemnifying Party or by the Indemnified Party and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission; provided, that in no event shall any contribution by a
Holder hereunder exceed the net proceeds from the offering received by such
Holder.

      1.8 Information by Holder. The Holder or Holders of Registrable Securities
included in any registration shall furnish to the Company such information
regarding such Holder or Holders, the Registrable Securities held by them and
the distribution proposed by such Holder or Holders as the Company may
reasonably request in writing and as shall be required in connection with any
registration, qualification or compliance referred to in this paragraph 1.

      1.9 Rule 144 Reporting. With a view to making available the benefits of
certain rules and regulations of the Commission which may at any time permit the
sale of the Restricted Securities to the public without registration, after such
time as a public market exists for the Common Stock of the Company, the Company
agrees to use its best efforts to:

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

            (b) Use its best efforts to file with the Commission in a timely
manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act (at any time after it has become subject to
such reporting requirements);

            (c) So long as an Investor owns any Restricted Securities, to
furnish to the Investor forthwith upon request a written statement by the
Company as to its compliance with the reporting requirements of said Rule 144
(at any time after 90 days after the effective date of the first registration
statement filed by the Company for an offering of its securities to the general
public), and of the Securities Act and the Exchange Act (at any time after it
has become subject to such reporting requirements), a copy of the most recent
annual or quarterly report of the Company, and such other reports and documents
of the Company and other information in the possession of or reasonably
obtainable by the Company as an Investor may reasonably

                                       10
<PAGE>
request in availing itself of any rule or regulation of the Commission allowing
an Investor to sell any such securities without registration.

      1.10 Transfer of Registration Rights. The rights to cause the Company to
register securities granted to Holders under paragraphs 1.2, 1.3 and 1.4 may be
assigned to a transferee or assignee in connection with any transfer or
assignment of Registrable Securities by a Holder of not less than 70,000 shares
of Registrable Securities, or to any transferee or assignee who is a constituent
partner of a Holder or the estate of such constituent partner or to a transferee
who is a Holder's family member or trust for the benefit of an individual
Holder, provided that such transfer may otherwise be effected in accordance with
applicable securities laws.

      1.11 Standoff Agreement. Each Holder agrees that in connection with the
Company's initial public offering of the Company's securities, upon request of
the Company or the underwriters managing any underwritten offering of the
Company's securities, not to sell, make any short sale of, loan, grant any
option for the purchase of, or otherwise dispose of any Registrable Securities
(other than those included in the registration) without the prior written
consent of the Company or such underwriters, as the case may be, for such period
of time (not to exceed one hundred eighty (180) days) from the effective date of
such registration as may be requested by the underwriters; provided that the
officers and directors of the Company who own stock of the Company also agree to
such restrictions.

      1.12 Rule 144A Information. Whenever the Company receives a request for
the information required in Rule 144A(d)(4) from Initiating Holders, then the
Company shall within 60 days after the date of such request provide such
information to such Initiating Holders and any person or persons designated by
the Initiating Holders as a prospective buyer in a transaction pursuant to Rule
144A. The Company's obligations pursuant to this paragraph 1.12 shall extend to
any person who acquires shares of the Preferred Stock and/or Conversion Stock as
a result of a transaction pursuant to Rule 144A.

      1.13 Amendment of Registration Rights. Any provision of this paragraph 1
may be amended and the observance thereof may be waived (either generally or in
a particular instance and either retroactively or prospectively), only with the
written consent of the Company and the Holders of at least sixty-six and
two-thirds percent (66-2/3%) of the Registrable Securities then outstanding. Any
amendment or waiver effected in accordance with this paragraph 1.13 shall be
binding upon each Holder and the Company. By acceptance of any benefits under
this paragraph 1, Holders of Registrable Securities hereby agree to be bound by
the provisions hereunder.

      1.14 Limitation on Subsequent Registration Rights. After the date of this
Agreement, the Company shall not, without the prior written consent of the
Holders of sixty-six and two-thirds percent (66-2/3%) of the Registrable
Securities then outstanding, enter into any agreement with any holder or
prospective holder of any securities of the Company that would grant such holder
registration rights senior to those granted to the Holders hereunder.

      1.15 Termination of Registration Rights. The rights granted under this
paragraph 1 shall terminate on the seventh anniversary of the consummation of
the initial underwritten public

                                       11
<PAGE>
offering of the Company's securities pursuant to a registration statement filed
under the Securities Act.

2.    Right of First Refusal.

            (a) Except as set forth in paragraph 2(e), the Company hereby grants
to each Investor holding at least 70,000 shares of Registrable Securities the
right of first refusal to purchase all or any part of such Investor's pro rata
share of New Securities (as defined in paragraph 2(b)) which the Company may,
from time to time, propose to sell and issue. The Investors may purchase said
New Securities on the same terms and at the same price at which the Company
proposes to sell the New Securities. The pro rata share of each Investor, for
purposes of this right of first refusal, is the ratio of the total number of
shares of Common Stock held by such Investor, including any shares of Common
Stock into which shares of Preferred Stock held by such Investor are
convertible, to the total number of shares of Common Stock outstanding
immediately prior to the issuance of the New Securities (including any shares of
Common Stock into which outstanding shares of Preferred Stock are convertible).

            (b) "New Securities" shall mean any capital stock of the Company,
whether now authorized or not, and any rights, options or warrants to purchase
said capital stock, and securities of any type whatsoever that are, or may
become, convertible into said capital stock; provided that "New Securities" does
not include (i) securities issued to financial institutions, lenders or lessors
in connection with commercial credit arrangements, equipment financings or
similar transactions, to the extent that such transaction is approved by the
Board of Directors of the Company; (ii) the issuance of the BCC Warrant; (iii)
securities offered pursuant to a registration statement filed under the
Securities Act, (iv) the issuance of securities pursuant to the conversion or
exercise of convertible or exercisable securities; (v) securities issued
pursuant to the acquisition of another corporation by the Company by merger,
purchase of substantially all of the assets or other reorganization, to the
extent that such transaction is approved by the Board of Directors of the
Company and (vi) all shares of Common Stock hereafter issued or issuable to
officers, directors, employees or consultants of the Company pursuant to any
employee or consultant stock offering, plan or arrangement approved by the Board
of Directors of the Company.

            (c) In the event the Company proposes to undertake an issuance of
New Securities, it shall give to the Investors written notice (the "Notice") of
its intention, describing the type of New Securities, the price and the terms
upon which the Company proposes to issue such New Securities. Each Investor
entitled to such notification shall have fifteen (15) days from the date of
receipt of the Notice to agree to purchase any or all of such Investor's pro
rata portion of such New Securities for the price and upon the terms specified
in the Notice by giving written notice to the Company and stating therein the
quantity such New Securities to be purchased. Each such Investor that notifies
the Company of its intention to purchase New Securities shall forward payment
for such New Securities to the Company no later than the date on which the
Company issues any of such New Securities to any purchaser thereof who is not an
Investor.

            (d) In the event any Investors fail to exercise in full the right of
first refusal within said fifteen (15) day period, the Company shall offer such
shares to the other

                                       12
<PAGE>
Investors who have elected to exercise their rights of first refusal. Each such
participating Investor shall be entitled to purchase that number of shares of
New Securities not being purchased by the Investors as determined by multiplying
such non-purchased New Securities by a fraction, the numerator of which is the
number of shares of New Securities being purchased by the participating Investor
and the denominator of which is the number of shares of New Securities being
purchased by all Investors exercising rights of first refusal. Each Investor
electing to purchase such additional New Securities shall have five (5) days
from the date of receipt of any notice from the Company with respect thereto to
agree to purchase its respective share of such New Securities. The Company shall
have ninety (90) days thereafter to sell or enter into an agreement (pursuant to
which the sale of New Securities covered thereby shall be closed, if at all,
within thirty (30) days from date of said agreement) to sell the New Securities
respecting which the Investors' rights were not exercised, at a price and upon
general terms no more favorable to the Investors thereof than specified in the
Notice. In the event the Company has not sold the New Securities within said
ninety (90) day period (or sold and issued New Securities in accordance with the
foregoing within thirty (30) days from the date of said agreement), the Company
shall not thereafter issue or sell any New Securities without first offering
such securities to the Investors in the manner provided above.

            (e) The right of first refusal granted under this paragraph 2 shall
expire upon:

                  (i) The date upon which a registration statement filed by the
Company under the Securities Act (other than a registration of securities in a
Rule 145 transaction or with respect to an employee benefit plan) in connection
with an underwritten public offering of its securities first becomes effective
and the securities registered thereunder shall have been sold for gross proceeds
to the Company of at least $15,000,000 at a price to the public of at least
$6.75 per share.

                  (ii) With respect to each Investor, the date on which such
Investor no longer holds a minimum of Seventy Thousand (70,000) shares of
Registrable Securities.

            (f) The right of first refusal granted under this paragraph 2 is
assignable by the Investors to any transferee of a minimum of Seventy Thousand
(70,000) shares of Common Stock (including any shares of Common Stock into which
shares of Preferred Stock then held by it are convertible).

3.    Transferability.

      3.1 Restrictions on Transferability. The Preferred Stock and the
Conversion Stock held by the Investors shall not be sold, assigned, transferred
or pledged except upon the conditions specified in this paragraph 3, which
conditions are intended to ensure compliance with the provisions of the
Securities Act; provided, however, that BA Venture Partners III may pledge its
shares to BankAmerica Investment Corporation ("BAIC") and may transfer such
shares to BAIC so long as BAIC agrees to the provisions of this Agreement.
Notwithstanding the foregoing, there shall be permitted without any consents or
approvals, (i) the transfer by the State Treasurer of the State of Michigan,
Custodian of the Michigan Public School Employees' Retirement System; State
Employees' Retirement System; Michigan State Police Retirement

                                       13
<PAGE>
System; and Michigan Judges Retirement System (the "MICHIGAN FUND") of all or
any part of the Michigan Fund's shares to any successor or additional trustee or
custodian of the assets of the Michigan Fund as may be appointed, and qualified
under the applicable laws of the State of Michigan, and (ii) the transfer by
GMI/DRI Investment Trust ("GMI") of all or any part of GMI's shares to any
successor trust or trustee, and (iii) the admission of any such transferee as a
substituted stockholder with respect to such transferred shares. The Investors
will cause any proposed purchaser, assignee, transferee, or pledgee of the
Preferred Stock or the Conversion Stock held by the Investors to agree to take
and hold such securities subject to the provisions and upon the conditions
specified in this Agreement.

      3.2 Restrictive Legend. Each certificate representing (i) the Preferred
Stock held by the Investors, (ii) the Conversion Stock and (iii) any other
securities issued in respect of the Preferred Stock or Conversion Stock held by
the Investors upon any stock split, stock dividend, recapitalization, merger,
consolidation or similar event, shall (unless otherwise permitted by the
provisions of paragraph 3.3 below) be stamped or otherwise imprinted with a
legend in the following form (in addition to any legend required under
applicable state securities laws):

            THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
            INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
            1933. SUCH SHARES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF
            SUCH REGISTRATION UNLESS THE TRANSFER IS IN ACCORDANCE WITH RULE 144
            OR SIMILAR RULE OR UNLESS THE COMPANY RECEIVES AN OPINION OF COUNSEL
            REASONABLY ACCEPTABLE TO IT STATING THAT SUCH SALE OR TRANSFER IS
            EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF
            SAID ACT.

            The Investors and Holders consent to the Company making a notation
on its records and giving instructions to any transfer agent of its Preferred
Stock or Conversion Stock in order to implement the restrictions on transfer
established in this paragraph 3.

      3.3 Notice of Proposed Transfers. The holder of each certificate
representing Restricted Securities by acceptance thereof agrees to comply in all
respects with the provisions of this paragraph 3.3. Prior to any proposed sale,
assignment, transfer or pledge of any Restricted Securities (other than (i) a
transfer not involving a change in beneficial ownership, or (ii) in transactions
involving the distribution without consideration of Restricted Securities by any
Investor to any of its partners, or retired partners, or to the estate of any of
its partners or retired partners, (iii) a transfer to an affiliated fund,
partnership or company, which is not a competitor of the Company, subject to
compliance with applicable securities laws, (iv) a transfer to a holder's family
member or a trust for the benefit of an individual holder, or (v) transfers in
compliance with Rule 144, so long as the Company is furnished with satisfactory
evidence of compliance with such Rule), unless there is in effect a registration
statement under the Securities Act covering the proposed transfer, the holder
thereof shall give written notice to the Company of such holder's intention to
effect such transfer, sale, assignment or pledge. Each such notice shall
describe the manner and circumstances of the proposed transfer, sale, assignment
or pledge in sufficient detail, and shall be accompanied, at such holder's
expense by either (i) a written opinion of legal counsel who shall, and whose
legal opinion shall be, reasonably satisfactory to

                                       14
<PAGE>
the Company addressed to the Company, to the effect that the proposed transfer
of the Restricted Securities may be effected without registration under the
Securities Act, or (ii) a "no action" letter from the Commission to the effect
that the transfer of such securities without registration will not result in a
recommendation by the staff of the Commission that action be taken with respect
thereto, whereupon the holder of such Restricted Securities shall be entitled to
transfer such Restricted Securities in accordance with the terms of the notice
delivered by the holder to the Company. Each certificate evidencing the
Restricted Securities transferred as above provided shall bear, except if such
transfer is made pursuant to Rule 144, the appropriate restrictive legend set
forth in paragraph 3.1 above, except that such certificate shall not bear such
restrictive legend if in the opinion of counsel for such holder and in the
reasonable opinion of the Company such legend is not required in order to
establish compliance with any provision of the Securities Act.

            In any case in which an opinion of counsel or written advice of
counsel is required pursuant to this paragraph 3.3 that requirement shall be
deemed satisfied in the case of the Michigan Fund by a certificate signed by the
administrator of the Michigan Fund stating that the administrator has
determined, after consultation with its counsel, the Attorney General of the
State of Michigan, that the specified circumstances or consequences identified
in the applicable opinion requirement, and set forth in such certificate, exist.

      3.4 Removal of Restrictions on Transfer of Securities. Any legend referred
to in paragraph 3.2 hereof stamped on a certificate evidencing (i) the Preferred
Stock held by the Investors, (ii) the Conversion Stock or (iii) any other
securities issued in respect of the Preferred Stock or Conversion Stock held by
the Investors upon any stock split, stock dividend, recapitalization, merger,
consolidation or similar event and the stock transfer instructions and record
notations with respect to such security shall be removed and the Company shall
issue a certificate without such legend to the holder of such security if such
security is registered under the Securities Act, or if such holder provides the
Company with an opinion of counsel (which may be counsel for the Company)
reasonably acceptable to the Company to the effect that a public sale or
transfer of such security may be made without registration under the Securities
Act or (iii) such holder provides the Company with reasonable assurances, which
may, at the option of the Company, include an opinion of counsel satisfactory to
the Company, that such security can be sold pursuant to Section (k) of Rule 144
under the Securities Act.

4. Designation of Director; Voting. Each holder of Series C Preferred Stock
agrees to vote the shares of Series C Preferred Stock now or hereafter owned by
such holder, whether beneficially or otherwise, so that the member of the
Company's Board of Directors elected pursuant to the provisions of Article IV,
Section E.2 of the Company's Restated Certificate of Incorporation by the
holders of the Company's Series C Preferred Stock shall be the designee of the
holder(s) of a majority of the outstanding shares of Series C Preferred Stock.

5. Certain Covenants of the Company. The Company hereby covenants and agrees as
follows:

      5.1 Financial Information.

                                       15
<PAGE>
            (a) As soon as practicable after the end of each fiscal year, and in
any event within 90 days thereafter, the Company will provide to each Investor
(for so long as the Investor is a holder of a minimum of 5,000 shares of
Preferred Stock, Conversion Stock or an equivalent combination thereof),
consolidated balance sheets of the Company and its subsidiaries, if any, as of
the end of such fiscal year, and consolidated statements of income,
stockholders' equity and cash flows of the Company and its subsidiaries, if any,
for such year, prepared in accordance with generally accepted accounting
principles consistently applied and setting forth in each case in comparative
form the figures for the previous fiscal year, all in reasonable detail and
audited by independent public accountants of national standing selected by the
Company.

            (b) As soon as practicable after the end of each month and in any
event within 20 days thereafter, the Company will provide to each Investor (for
so long as the Investor is a holder of a minimum of 500,000 shares of Preferred
Stock, Conversion Stock or an equivalent combination thereof, including for
purposes of this paragraph 5 any shares of Preferred Stock which have been
transferred to a constituent partner of an Investor), a consolidated balance
sheet of the Company and its subsidiaries, if any, as of the end of each such
month, consolidated statements of income, consolidated statements of changes in
financial condition, and a consolidated statement of cash flow of the Company
and its subsidiaries for such period and for the current fiscal year to date,
and setting forth in each case in comparative form the figures for corresponding
periods in the previous fiscal year, and setting forth in comparative form the
budgeted figures for such period and for the current fiscal year then reported,
prepared in accordance with generally accepted accounting principles (other than
for accompanying notes), subject to changes resulting from year-end audit
adjustments, all in reasonable detail and signed by the principal financial or
accounting officer of the Company.

            (c) The Company will provide each Investor (for so long as the
Investor is a holder of a minimum of 500,000 shares of Preferred Stock,
Conversion Stock or an equivalent combination thereof, including for purposes of
this paragraph 5 any shares of Preferred Stock which have been transferred to a
constituent partner of an Investor), an annual financial plan for the next
fiscal year of the Company containing profit and loss projections, cash flow
projections, and capital expenditures, all on a monthly basis, as soon as it is
available but in any event within thirty (30) days prior to the end of the
current fiscal year.

            (d) Any submission of financial information pursuant to this
paragraph 5.1 shall be under cover of a certificate executed by the Company's
president, chief financial officer or treasurer certifying that such information
(i) relates to the Company, (ii) to the best of the Company's knowledge is
accurate, and (iii) if applicable, has been audited by the Company's independent
auditors.

      5.2 Assignment of Rights to Financial Information. Subject to the
limitations set forth in paragraph 5.1, the rights granted pursuant to paragraph
5.1(a), (b) and (c) may be assigned or otherwise conveyed by the Investors or by
any subsequent transferee to an investor who acquires a minimum of 5,000 or
500,000 (as the case may be) shares of Preferred Stock, Conversion Stock, or a
combination thereof, respectively, other than a competitor of the Company, as
reasonably determined by the Board of Directors of the Company excluding any

                                       16
<PAGE>
director with an interest in such transferee, provided that written notice of
such assignment or conveyance is given to the Company.

      5.3 Termination of Covenants. The covenants set forth this paragraph 5,
shall terminate and be of no further force or effect upon the closing of the
Company's initial underwritten public offering pursuant to an effective
registration statement filed by the Company under the Securities Act (other than
a registration of securities in a Rule 145 transaction or with respect to an
employee benefit plan).

      5.4 Indemnification of Officers and Directors. For at least as long as any
representative or representatives of the Investors serve on the Board of
Directors of the Company, the Company shall indemnify its officers and directors
to the full extent permitted by law.

      5.5 Qualified Small Business. For so long as any Preferred Stock is held
by an Investor or by a transferee of any Investor in whose hands the Preferred
Stock is eligible to qualify as Qualified Small Business Stock as defined in
Section 1202(c)of the Code, the Company shall use its best efforts, consistent
with sound business practices, to cause the Preferred Stock to qualify as
Qualified Small Business Stock.

      5.6 Right to Conduct Activities. The Company and each Investor hereby
acknowledge that some or all of the Investors are professional investment funds,
and as such invest in numerous portfolio companies, some of which may be
competitive with the Company's business. No Investor shall be liable to the
Company or to any other Investor for any claim arising out of, or based upon,
the investment activities of such Investor, including without limitation, any
claim arising out of, or based upon, (i) the investment by Investor in any
entity competitive to the Company, or (ii) actions taken by any partner, officer
or other representative of any Investor to assist any such competitive company,
whether or not such action was taken as a board member of such competitive
company, or otherwise, and whether or not such action has a detrimental effect
on the Company.

      5.7 Confidentiality of Records. Except as required by law, each Investor
agrees to use, and to use its best efforts to insure that its authorized
representatives use, the same degree of care as such Investor uses to protect
its own confidential information to keep confidential any information furnished
to it which the Company identifies as being confidential or proprietary (so long
as such information is not in the public domain), except that such Investor may
disclose such proprietary or confidential information to any partner, subsidiary
or parent of such Investor for the purpose of evaluating its investment in the
Company as long as such partner, subsidiary or parent is advised of the
confidentiality provisions of this paragraph 5.7.

      5.8 Observation/Visitation Rights. H&Q Healthcare Investors and H&Q Life
Sciences Investors shall together have the right to designate one representative
to receive notice of and to attend all regular and special meetings of the
Company's Board of Directors in a nonvoting capacity, and in connection
therewith the Company shall give such representative copies of all notices,
minutes, consents and other materials, financial or otherwise, which the Company
provides to its Board of Directors; provided, however, that the Company reserves
the right to exclude such representative from access to any material or meeting
or portion thereof if

                                       17
<PAGE>
the Company believes upon advice of counsel that such exclusion is necessary to
preserve the attorney-client privilege or to protect highly confidential
proprietary information of the Company; and provided further that the right of
any such designee to attend a meeting of the Board of Directors of the Company
shall be contingent upon such designee having executed the Company's standard
confidentiality agreement relating to board visitors.

      5.9 Inspection Rights. So long as an Investor is the holder of a minimum
of 500,000 shares of Preferred Stock, Conversion Stock or an equivalent
combination thereof, such Investor shall have the right to visit and inspect any
of the properties of the Company, and to discuss the affairs, finances and
accounts of the Company with its officers, and to review such information as is
reasonably requested all at such reasonable times and as often as may be
reasonably requested; provided, however, that the Company shall not be obligated
under this paragraph 5.9 with respect to a competitor of the Company or with
respect to information which the Board of Directors determines in good faith is
confidential and should not, therefore, be disclosed.

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

      5.11 Proprietary Information and Inventions Agreement. The Company shall
require all employees and consultants to execute and deliver a Proprietary
Information and Inventions Agreement in the form delivered to Investors or their
counsel.

6. Termination of Prior Rights Agreement. Effective upon execution of this
Agreement by the Company and the holders of a majority of the Registrable
Securities under the Prior Rights Agreement, the Prior Rights Agreement is null
and void and superseded in its entirety by this Agreement.

7. Miscellaneous.

      7.1 Waivers and Amendments. Except as otherwise provided, this Agreement
may be amended or modified only upon the written consent of the Company and the
holders of at least two-thirds (66-2/3%) of the Registrable Securities. With the
written consent of the Holders of more than 66-2/3% of the Registrable
Securities, the obligations of the Company and the rights of the Holders under
this Agreement may be waived (either generally or in a particular instance,
either retroactively or prospectively and either for a specified period of time
or indefinitely), and with the same consent the Company, when authorized by
resolution of its Board of Directors, may enter into a supplementary agreement
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement; provided, however, that no
such waiver or supplemental agreement shall reduce the aforesaid percentage of
Registrable Securities, the Holders of which are required to consent to any
waiver or supplemental agreement without the consent of the Holders of all of
the Registrable Securities. With the written consent of the Company, the
obligations of the Holders and the rights of the Company under this Agreement
may be waived (either generally or in a particular instance, either
retroactively or prospectively and either for a specified period of time or
indefinitely). Neither this Agreement nor any provisions hereof may be changed,
waived, discharged or terminated orally, but only by a signed statement in
writing. Any amendment, waiver or

                                       18
<PAGE>
supplementary agreement effected in accordance with this paragraph shall be
binding upon each Holder of any Registrable Securities then outstanding, each
future Holder of all such Registrable Securities and the Company.

      7.2 Governing Law. This Agreement shall be governed in all respects by the
laws of the State of California as such laws are applied to agreements between
California residents entered into and to be performed entirely within
California.

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

      7.4 Entire Agreement. This Agreement constitutes the full and entire
understanding and agreement between the parties with regard to the subjects
hereof.

      7.5 Notices. All notices and other communications required or permitted
hereunder shall be in writing and may be delivered in person, by telecopy with
written confirmation, overnight delivery service or U.S. mail, in which event it
may be mailed by first-class, certified or registered, postage prepaid,
addressed (a) if to a Holder, at such address as such Holder shall have
furnished the Company in writing, or; until any such Holder so furnishes an
address to the Company, then to and at the address of the last holder of such
securities who has so furnished an address to the Company, or (b) if to the
Company, at such address as the Company shall have furnished to the Holders in
writing.

            Each such notice or other communication shall for all purposes this
Agreement be treated as effective or having been given when delivered if
delivered personally, or, if sent by mail, at the earlier of its receipt or 72
hours after the same has been deposited in a regularly maintained receptacle for
the deposit of the United States mail, addressed and mailed as aforesaid, or one
(1) day after deposit with a nationally recognized overnight courier, or if sent
by telecopier with written confirmation, at the earlier of (i) 24 hours after
confirmation of transmission by the sending telecopier machine or (ii) delivery
of written confirmation.

      7.6 Titles and Subtitles. The titles of the paragraphs and subparagraphs
of this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.

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

      7.8 Nominees. Securities registered in the name of a nominee for a Holder
shall, for purposes of this Agreement, be treated as being owned by such Holder.

      7.9 Severability. In case any provision of the Agreement shall be invalid,
illegal, or unenforceable, the validity, legality, and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.

      7.10 Delays or Omissions. It is agreed that no delay or omission to
exercise any right, power, or remedy accruing to any Holder, upon any breach,
default or noncompliance of the

                                       19
<PAGE>
Company under this Agreement shall impair any such right, power, or remedy, nor
shall it be construed to be a waiver of any such breach, default or
noncompliance, or any acquiescence therein, or of any similar breach, default or
noncompliance thereafter occurring. It is further agreed that any waiver,
permit, consent, or approval of any kind or character on any Holder's part of
any breach, default or noncompliance under this Agreement or any waiver on such
Holder's part of any provisions or conditions of this Agreement must be in
writing and shall be effective only to the extent specifically set forth in
writing. All remedies, either under this Agreement, by law, or otherwise
afforded to Holders, shall be cumulative and not alternative.

      7.11 Attorneys' Fees. In the event that any dispute among the parties to
this Agreement should result in litigation, the prevailing party in such dispute
shall be entitled to recover from the losing party all fees, costs and expenses
of enforcing any right of such prevailing party under or with respect to this
Agreement, including without limitation, such reasonable fees and expenses of
attorneys and accountants, which shall include, without limitation, all fees,
costs and expenses of appeals. Notwithstanding the foregoing, this paragraph
7.11 shall not apply to State Treasurer of the State of Michigan, Custodian of
the Michigan Public School Employees' Retirement System, State Employees'
Retirement System, Michigan State Police Retirement System, and Michigan Judges
Retirement System.

      7.12 Certain Adjustments. Whenever this Agreement shall provide that the
rights of a holder of Registrable Securities shall depend on the number of
Registrable Securities held by such holder, such number shall be adjusted with
respect to the Registrable Securities held by such holder to take into account
any stock split, consolidation or recapitalization of the Registrable Securities
so held on or after October 1, 2000.

                                       20
<PAGE>
      The foregoing Fifth Restated Stockholders Rights Agreement is hereby
executed as of the date first above written.

COMPANY:

VNUS MEDICAL TECHNOLOGIES, INC.

By:   /s/ Brian E. Farley
      --------------------------
      Brian E. Farley, President

FIFTH RESTATED STOCKHOLDER RIGHTS AGREEMENT
<PAGE>
INVESTORS:

MENLO VENTURES VI, L.P.

   By:  MV Management IV, L.P.
        its General Partner

        By:     /s/ Mark A. Siegel
                ------------------------------
        Name:   Mark A. Siegel
        Title:: General Partner

MENLO ENTREPRENEURS FUND VI, L.P.

   By:  MV Management VI, L.P.
        its General Partner

        By:     /s/ Mark A. Siegel
                ------------------------------
        Name:   Mark A. Siegel
        Title:: General Partner

DLJ CAPITAL CORP.

By:     /s/ Kathleen D. LaPorte
        ------------------------------
Name:   Kathleen D. LaPorte
Title:  Managing Director

DONALDSON, LUFKIN & JENRETTE SECURITIES
   CORPORATION, AS NOMINEE FOR:

   DLJ FIRST ESC, L.P.
   EMA 2001 PLAN, L.P.
   DOCKLANDS 2001 PLAN, L.P.
   PARADEPLATZ 2001 PLAN, L.P.
   CSFB 2001 INVESTORS, L.P.
   CREDIT SUISSE FIRST BOSTON PRIVATE EQUITY, INC.

        By:     /s/ Kathleen D. LaPorte
                -------------------------------
        Name:   Kathleen D. LaPorte
        Title:  Managing Director

FIFTH RESTATED STOCKHOLDER RIGHTS AGREEMENT
<PAGE>
DLJ ESC II, L.P.

   By:  DLJ LBO Plans Management Corporation
        its General Partner

        By:     /s/ Kathleen D. LaPorte
                -------------------------------
        Name:   Kathleen D. LaPorte
        Title:  Attorney in Fact

DLJ FIRST ESC L.P.

   By:  DLJ LBO Plans Management Corporation
        its General Partner

        By:     /s/ Kathleen D. LaPorte
                -------------------------------
        Name:   Kathleen D. LaPorte
        Title:  Attorney in Fact

SPROUT CAPITAL VIII, L.P.

   By:  DLJ Capital Corp.
        its Managing General Partner

        By:     /s/ Kathleen D. LaPorte
                -------------------------------------
        Name:   Kathleen D. LaPorte
        Title:  Managing Director and General Partner

SPROUT CAPITAL VII, L.P.

   By:  DLJ Capital Corp.
        its Managing General Partner

        By:     /s/ Kathleen D. LaPorte
                -------------------------------------
        Name:   Kathleen D. LaPorte
        Title:  Managing Director and General Partner

SPROUT CAPITAL IX, L.P.

   By:  DLJ Capital Corp.
        its Managing General Partner

        By:     /s/ Kathleen D. LaPorte
                -------------------------------------
        Name:   Kathleen D. LaPorte
        Title:  Managing Director and General Partner

FIFTH RESTATED STOCKHOLDER RIGHTS AGREEMENT
<PAGE>
SPROUT ENTREPRENEURS FUND, L.P.

   By:  DLJ Capital Corp.
        its Managing General Partner

        By:     /s/ Kathleen D. LaPorte
                ------------------------------
        Name:   Kathleen D. LaPorte
        Title:  Managing Director

THE SPROUT CEO FUND, L.P.

   By:  DLJ Capital Corp.
        its General Partner

        By:     /s/ Kathleen D. LaPorte
                ------------------------------
        Name:   Kathleen D. LaPorte
        Title:  Managing Director

SPROUT VENTURE CAPITAL, L.P.

   By:  DLJ Capital Corp.
        its General Partner

        By:     /s/ Kathleen D. LaPorte
                ------------------------------
        Name:   Kathleen D. LaPorte
        Title:  Managing Director

THE BAY CITY CAPITAL FUND I, L.P.

By:   Bay Capital Management, LLC
      its General Partner

        By:     /s/ Fred Craves
                ------------------------------
        Name:   Fred Craves
        Title:  Manager and Managing Director

STATE TREASURER OF THE STATE OF MICHIGAN,
CUSTODIAN OF THE MICHIGAN PUBLIC SCHOOL
EMPLOYEES' RETIREMENT SYSTEM, STATE
EMPLOYEES' RETIREMENT SYSTEM, MICHIGAN STATE POLICE RETIREMENT
SYSTEM AND MICHIGAN JUDGES RETIREMENT SYSTEM

By:     /s/ David C. Turner
        -------------------------------
Name:   David C. Turner
Title:: Alternative Investment Division

FIFTH RESTATED STOCKHOLDER RIGHTS AGREEMENT
<PAGE>
BANK OF AMERICA VENTURES

By:     [Illegible]
        ------------------------------
Name:   [Illegible]
Title:  Principal

BA VENTURE PARTERS III

By:     [Illegible]
        ------------------------------
Name:   [Illegible]
Title:  General Partner

GENERAL MILLS GROUP TRUST

By:   The Benefit Finance Committee of General Mills

        By:     /s/ Dave VanBenschoten
                -------------------------------------
        Name:   Dave VanBenschoten
        Title:  Executive Secretary

H&Q HEALTHCARE INVESTORS

By:    /s/ Kim Carroll
       --------------------
Name:  Kim Carroll
Title: Treasurer

The name H&Q Healthcare Investors is the designation of the Trustees for the
time being under an Amended and Restated Declaration of Trust dated April 12,
1987, as amended, and all persons dealing with H&Q Healthcare Investors must
look solely to the trust property for the enforcement of any claim against H&Q
Healthcare Investors, as neither the Trustees, officers nor shareholders assume
any personal liability for the obligations entered into on behalf of H&Q
Healthcare Investors.

FIFTH RESTATED STOCKHOLDER RIGHTS AGREEMENT
<PAGE>
H&Q LIFE SCIENCES INVESTORS

By:    /s/ Kim Carroll
       --------------------
Name:  Kim Carroll
Title: Treasurer

The name H&Q Life Sciences Investors is the designation of the Trustees for the
time being under a Declaration of Trust dated February 20, 1992, as amended, and
all persons dealing with H&Q Life Sciences Investors must look solely to the
trust property for the enforcement of any claim against H&Q Life Sciences
Investors, as neither the Trustees, officers nor shareholders assume any
personal liability for the obligations entered into on behalf of H&Q Life
Sciences Investors.

FIFTH RESTATED STOCKHOLDER RIGHTS AGREEMENT
<PAGE>
                                    EXHIBIT A

                              SCHEDULE OF INVESTORS

<TABLE>
<CAPTION>
INVESTOR                                               SECURITIES
--------                                               ----------
<S>                                        <C>
State Treasurer of the State of            2,500,000 Series D Preferred Stock
Michigan, Custodian of the Michigan
Public School Employees' Retirement
System, State Employees' Retirement
System, Michigan State Police
Retirement System, and Michigan Judges
Retirement System

State Treasurer of the State of              497,093 Series E Preferred Stock
Michigan, Custodian of the Michigan
Public School Employees' Retirement
System, State Employees' Retirement
System, Michigan State Police
Retirement System

Menlo Ventures VI, L.P.                    2,500,000 Series A-1 Preferred Stock
                                           2,000,000 Series A-2 Preferred Stock
                                           1,000,000 Series A-3 Preferred Stock
                                           1,666,667 Series B Preferred Stock
                                             617,004 Series C Preferred Stock
                                             492,611 Series D Preferred Stock
                                             288,639 Series E Preferred Stock

Menlo Entrepreneurs Fund VI, L.P.             37,500 Series A-1 Preferred Stock
                                              30,000 Series A-2 Preferred Stock
                                              15,000 Series A-3 Preferred Stock
                                              25,000 Series B Preferred Stock
                                               9,255 Series C Preferred Stock
                                               7,389 Series D Preferred Stock
                                               4,330 Series E Preferred Stock

Sprout Capital VII, L.P.                   2,629,974 Series C Preferred Stock

Sprout Capital VIII, L.P.                  1,297,565 Series D Preferred Stock
                                             234,375 Series E Preferred Stock

Sprout Capital IX, L.P.                    1,555,168 Series E Preferred Stock

Sprout Entrepreneurs Fund, L.P.                6,129 Series E Preferred Stock

Sprout Venture Capital, L.P.                  14,648 Series E Preferred Stock

DLJ First ESC L.L.C.                         302,332 Series C Preferred Stock

DLJ ESC II, L.P.                             113,331 Series D Preferred Stock
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
INVESTOR                                               SECURITIES
--------                                               ----------
<S>                                        <C>
                                              19,531 Series E Preferred Stock

DLJ Capital Corp.                             60,466 Series C Preferred Stock
                                              11,250 Series D Preferred Stock
                                              33,500 Series E Preferred Stock

Donaldson, Lufkin & Jenrette Securities       89,774 Series E Preferred Stock
Corporation, as nominee for:
DLJ First ESC, L.P.
EMA 2001 Plan, L.P.
Docklands 2001 Plan, L.P.
Paradeplatz 2001 Plan, L.P.
CSFB 2001 Investors, L.P.
Credit Suisse First Boston Private
Equity, Inc.

The Sprout CEO Fund, L.P.                     30,549 Series C Preferred Stock
                                               4,517 Series D Preferred Stock

BankAmerica Ventures                       1,051,993 Series C Preferred Stock
                                             450,000 Series D Preferred Stock
                                             175,782 Series E Preferred Stock

BA Venture Partners III                      117,230 Series C Preferred Stock
                                              50,000 Series D Preferred Stock
                                              19,531 Series E Preferred Stock

Hambrecht & Quist California                   74,041 Series C Preferred Stock
                                               20,000 Series D Preferred Stock
Hambrecht & Quist Employee Venture             20,000 Series D Preferred Stock
Fund, L.P. II

Lighthouse Capital Partners II, L.P.           44,118 Series C Warrants

General Mills Group Trust                     500,000 Series D Preferred Stock
                                               99,517 Series E Preferred Stock

Rob Faulkner                                    8,021 Series C Preferred Stock
                                                4,250 Series D Preferred Stock

Kurt Kruger                                    15,424 Series C Preferred Stock

Dennis Purcell                                  8,638 Series C Preferred Stock
                                                4,250 Series D Preferred Stock

John Rumsey                                     8,021 Series C Preferred Stock
                                                4,500 Series D Preferred Stock

Kate D. Mitchell                                3,084 Series C Preferred Stock
                                                1,250 Series D Preferred Stock
</TABLE>

                                      -2-
<PAGE>
<TABLE>
<CAPTION>
INVESTOR                                               SECURITIES
--------                                               ----------
<S>                                        <C>
Bay City Capital Fund I, L.P.               2,500,000 Series D Preferred Stock
                                              210,000 Common Stock Warrants
                                              497,093 Series E Preferred Stock

Vincenzo Iuri                                  20,000 Series D Preferred Stock

H&Q Healthcare Investors                      820,313 Series E Preferred Stock

H&Q Life Sciences Investors                   546,875 Series E Preferred Stock
</TABLE>

                                      -3-

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