Document:

Exhibit 4.3

 

EXPRESSION DIAGNOSTICS, INC.

 

 

SERIES F PREFERRED STOCK PURCHASE AGREEMENT

 

 

 

TABLE
OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  1.

  	
  Purchase and Sale of Series F Preferred Stock

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.1

  	
  Sale and Issuance of Series F Preferred

  	
  1

  
	
   

  	
  1.2

  	
  Initial Closing

  	
  1

  
	
   

  	
  1.3

  	
  Subsequent Closings

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
  Definitions

  	
  2

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.1

  	
  “Material Adverse Event”

  	
  2

  
	
   

  	
  2.2

  	
  “Subsidiary”

  	
  2

  
	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
  Representations and Warranties of the Company to the
  Investors

  	
  2

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.1

  	
  Corporate Organization and Authority

  	
  2

  
	
   

  	
  3.2

  	
  Capitalization

  	
  2

  
	
   

  	
  3.3

  	
  Subsidiaries

  	
  4

  
	
   

  	
  3.4

  	
  Authorization

  	
  4

  
	
   

  	
  3.5

  	
  Validity of Series F Preferred

  	
  4

  
	
   

  	
  3.6

  	
  Offering

  	
  4

  
	
   

  	
  3.7

  	
  No Conflict with Other Instruments; Compliance with
  Laws

  	
  4

  
	
   

  	
  3.8

  	
  Agreements; Actions

  	
  5

  
	
   

  	
  3.9

  	
  Litigation

  	
  5

  
	
   

  	
  3.10

  	
  Title to Property and Assets; Leases

  	
  6

  
	
   

  	
  3.11

  	
  Patents and Other Proprietary Rights

  	
  6

  
	
   

  	
  3.12

  	
  Confidential Information and Invention Assignments

  	
  7

  
	
   

  	
  3.13

  	
  No Defaults; Violations or Conflicts

  	
  7

  
	
   

  	
  3.14

  	
  Registration Rights

  	
  7

  
	
   

  	
  3.15

  	
  Brokers and Finders

  	
  8

  
	
   

  	
  3.16

  	
  Governmental Consents

  	
  8

  
	
   

  	
  3.17

  	
  Corporate Documents

  	
  8

  
	
   

  	
  3.18

  	
  Minute Books

  	
  8

  
	
   

  	
  3.19

  	
  Disclosure

  	
  8

  
	
   

  	
  3.20

  	
  No Conflict of Interest

  	
  8

  
	
   

  	
  3.21

  	
  Liabilities

  	
  8

  
	
   

  	
  3.22

  	
  Financial Statements

  	
  9

  
	
   

  	
  3.23

  	
  No Material Change

  	
  9

  
	
   

  	
  3.24

  	
  Permits

  	
  10

  
	
   

  	
  3.25

  	
  Employee Benefit Plans

  	
  10

  
	
   

  	
  3.26

  	
  Environmental and Safety Laws

  	
  10

  
	
   

  	
  3.27

  	
  Tax Returns

  	
  10

  
	
   

  	
  3.28

  	
  Employment Agreements

  	
  10

  
	
   

  	
  3.29

  	
  Obligations of Management

  	
  11

  
	
   

  	
  3.30

  	
  Voting Agreements

  	
  11

  
	
   

  	
  3.31

  	
  Section 83(b) Elections

  	
  11

  
					

 

i

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  4.

  	
  Representations and Warranties of the Investors

  	
  11

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.1

  	
  Authorization

  	
  11

  
	
   

  	
  4.2

  	
  Brokers and Finders

  	
  12

  
	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
  Securities Laws

  	
  12

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.1

  	
  Securities Laws Representations and Covenants of
  Investor

  	
  12

  
	
   

  	
  5.2

  	
  Legends

  	
  13

  
	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
  Conditions of Investor’s Obligations at a Closing

  	
  13

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.1

  	
  Representations and Warranties

  	
  13

  
	
   

  	
  6.2

  	
  Performance

  	
  14

  
	
   

  	
  6.3

  	
  Blue Sky Compliance

  	
  14

  
	
   

  	
  6.4

  	
  Information and Registration Rights

  	
  14

  
	
   

  	
  6.5

  	
  Voting Agreement

  	
  14

  
	
   

  	
  6.6

  	
  Co-Sale Agreement

  	
  14

  
	
   

  	
  6.7

  	
  Proceedings Satisfactory; Compliance Certificate

  	
  14

  
	
   

  	
  6.8

  	
  Opinion of Counsel

  	
  14

  
	
   

  	
  6.9

  	
  Certified Charter Documents and Resolutions

  	
  14

  
	
   

  	
  6.10

  	
  Amended and Restated Certificate of Incorporation

  	
  14

  
	
   

  	
  6.11

  	
  Stock Option Plan

  	
  14

  
	
   

  	
  6.12

  	
  Indemnification of Directors

  	
  14

  
	
   

  	
  6.13

  	
  Management Rights

  	
  15

  
	
   

  	
  6.14

  	
  Completion of Due Diligence

  	
  15

  
	
   

  	
  6.15

  	
  Burrill Director

  	
  15

  
	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
  Conditions of the Company’s Obligations at a Closing

  	
  15

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.1

  	
  Representations and Warranties

  	
  15

  
	
   

  	
  7.2

  	
  Information and Registration Rights

  	
  15

  
	
   

  	
  7.3

  	
  Voting Agreement

  	
  15

  
	
   

  	
  7.4

  	
  Co-Sale Agreement

  	
  15

  
	
   

  	
  7.5

  	
  Amended and Restated Certificate of Incorporation

  	
  15

  
	
   

  	
  7.6

  	
  Payment of Purchase Price

  	
  15

  
	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
  Post-Closing Covenants of the Company

  	
  15

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.1

  	
  Securities Laws Compliance

  	
  15

  
	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
  Miscellaneous

  	
  15

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.1

  	
  Entire Agreement; Successors and Assigns

  	
  15

  
	
   

  	
  9.2

  	
  Governing Law

  	
  16

  
	
   

  	
  9.3

  	
  Counterparts

  	
  16

  
	
   

  	
  9.4

  	
  Headings

  	
  16

  
	
   

  	
  9.5

  	
  Notices

  	
  16

  
	
   

  	
  9.6

  	
  Survival of Warranties

  	
  16

  
	
   

  	
  9.7

  	
  Amendment of Agreement

  	
  16

  
					

 

ii

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
   

  	
  9.8

  	
  Finders Fees

  	
  16

  
	
   

  	
  9.9

  	
  Expenses

  	
  17

  
	
   

  	
  9.10

  	
  Aggregation of Stock

  	
  17

  
	
   

  	
  9.11

  	
  Severability

  	
  17

  
	
   

  	
  9.12

  	
  Delays or Omissions

  	
  17

  
	
   

  	
  9.13

  	
  Corporate Securities Law

  	
  17

  
	
   

  	
  9.14

  	
  Exculpation Among Investors

  	
  17

  
	
   

  	
  9.15

  	
  Indemnification

  	
  18

  
	
   

  	
   

  	
   

  	
   

  
	
  EXHIBITS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Exhibit A

  	
  Schedule of Investors

  	
   

  
	
  Exhibit B

  	
  Form of Amended and Restated Certificate of
  Incorporation

  	
   

  
	
  Exhibit C

  	
  Schedule of Exceptions

  	
   

  
	
  Exhibit D

  	
  Form of Fifth Amended and Restated Investors’ Rights
  Agreement

  	
   

  
	
  Exhibit E

  	
  Form of Second Amended and Restated Voting Agreement

  	
   

  
	
  Exhibit F

  	
  Form of Third Amended and Restated Right of First
  Refusal and Co-Sale Agreement

  	
   

  
	
  Exhibit G

  	
  Form of Legal Opinion of Company Counsel

  	
   

  
					

 

iii

 

SERIES F PREFERRED

STOCK
PURCHASE AGREEMENT

 

THIS SERIES F
PREFERRED STOCK PURCHASE AGREEMENT (the “Agreement”) is made as of May 7, 2007,
by and among Expression Diagnostics, Inc., a Delaware corporation (the “Company”),
and the investors identified on the Schedule of Investors attached hereto as Exhibit A
(each an “Investor,” and collectively the “Investors”).

 

R E C I T A L S:

 

A.                                   The
Board of Directors of the Company (the “Board of Directors”) and the requisite
stockholders have adopted the Amended and Restated Certificate of Incorporation
(the “Certificate”) in the form attached hereto as Exhibit B which,
among other matters, establishes the rights, preferences and privileges of the
Company’s Series F Preferred Stock (the “Series F Preferred”).

 

B.                                     The
Company desires to sell shares of Series F Preferred to the Investors and
the Investors desire to purchase shares of Series F Preferred, on the
terms and subject to the conditions set forth in this Agreement.

 

THE PARTIES AGREE AS
FOLLOWS:

 

1.               Purchase and
Sale of Series F Preferred Stock.

 

1.1 Sale and
Issuance of Series F Preferred.  The Company shall sell to each
Investor, severally, and each such Investor shall, severally, purchase from the
Company the number of shares of Series F Preferred as set forth opposite
the name of such Investor in column one of Exhibit A in exchange for the
total purchase price set forth in column three of Exhibit A at a
purchase price of $5.124 per share. The shares of Series F Preferred sold to
the Investors are referred to as the “Shares.”

 

1.2 Initial
Closing.  The initial purchase and sale of the Shares shall take place
on the initial closing date of the sale by the Company to the Investors of the
Shares pursuant to this Agreement, or on such other date as the Company and the
Investors mutually agree. At each closing (“Closing”), the Company shall
deliver to the Investors certificates representing the Shares to be purchased
by the Investors at the Closing as set forth in Exhibit A against
delivery to the Company by each such Investor at the Closing of (a) an
executed counterpart of this Agreement and (b) a check, wire transfer or
cancellation of indebtedness (or any combination thereof) in the aggregate
purchase price therefor payable.

 

1.3 Subsequent
Closings.  The Company may sell and issue up to the balance of the
authorized shares of Series F Preferred not sold at the initial Closing to
such persons in subsequent Closings as may be approved by the Company and
Burrill & Co., and such persons shall, upon execution and delivery of the
relevant signature pages, become parties to the Rights Agreement, Voting Agreement
and Co-Sale Agreement (as these capitalized terms are defined herein). All such
sales and issuances shall be made on the terms and conditions set forth in this

 

 

Agreement. The Company
and any Investors purchasing Series F Preferred at each subsequent Closing will
execute counterpart signature pages to this Agreement, and such Investors will,
upon delivery to the Company of such signature pages, become parties to, and
bound by, this Agreement. Immediately after each subsequent Closing, Exhibit A
will be amended to list the Investors purchasing shares of Series F
Preferred hereunder and the number of shares of Series F Preferred
purchased by each Investor under this Agreement at each such subsequent Closing.
Any shares of Series F Preferred sold and issued at subsequent Closings
shall be deemed to be “Shares”
for all purposes under this Agreement, and any purchasers thereof shall be
deemed to be “Investors” for all
purposes under this Agreement.

 

2.               Definitions. 
For purposes of this Agreement:

 

2.1 “Material
Adverse Event”.  shall mean an occurrence having a consequence that is
materially adverse as to the business, properties, prospects or financial
condition of the Company.

 

2.2 “Subsidiary”. 
constitutes any corporation more than 50% of whose stock (measured by virtue of
voting rights) in the aggregate is owned by the Company.

 

3.               Representations
and Warranties of the Company to the Investors.  Except as set forth
on the Schedule of Exceptions attached hereto as Exhibit C, the
Company hereby represents and warrants to each Investor that:

 

3.1 Corporate
Organization and Authority.  The Company:

 

(a)          is a corporation duly
organized, validly existing, authorized to exercise all its corporate powers,
rights and privileges, and is in good standing in the State of Delaware;

 

(b)         has the corporate power
and corporate authority to execute this Agreement, the Fifth Amended and
Restated Investors’ Rights Agreement (the “Rights Agreement”) attached hereto
as Exhibit D, the Second Amended and Restated Voting Agreement (the
“Voting Agreement”) attached hereto as Exhibit F and the Third
Amended and Restated Right of First Refusal and Co-Sale Agreement (the “Co-Sale
Agreement”) attached hereto as Exhibit F (this Agreement, the Rights
Agreement, the Voting Agreement and the Co-Sale Agreement are collectively
referred to as the “Agreements”) and carry out the transactions contemplated
hereby and thereby and to own and operate its properties and to carry on its
business as now conducted and as proposed to be conducted; and

 

(c)          is qualified as a
foreign corporation and is in good standing in California and all other
jurisdictions in which such qualification is required, except jurisdictions
where the failure to be qualified would not be a Material Adverse Event.

 

3.2 Capitalization. 
Immediately prior to the Closing, the authorized capital of the Company shall
consist of:

 

(a)          Preferred Stock. 24,956,954
shares of Preferred Stock par value $0.001 per share, (i) 546,000 of which are
designated Series A Preferred Stock, 546,000 of which are outstanding
prior to the Closing, (ii) 994,773 of which are designated Series B 

 

2

 

Preferred, 994,768 of which are outstanding prior to
the Closing, (iii) 5,828,660 of which are designated Series C Preferred,
5,828,660 of which are outstanding prior to the Closing, (iv) 6,614,857 of
which are designated Series D Preferred, 6,013,509 of which are outstanding
prior to the Closing, (v) 5,872,664  of which are
designated Series E Preferred, 5,723,538 of which are outstanding prior to the
Closing, and (vi) 5,100,000 of which are designated Series F Preferred,
none of which are outstanding prior to the Closing. All outstanding shares of
Preferred Stock are duly and validly issued (including without limitation,
issued in compliance with applicable federal and state securities laws),
fully-paid, and non-assessable. Each
outstanding series of Preferred Stock is convertible into Common Stock on a
one-for-one basis as of the date hereof (except for the Series B Preferred
Stock, which will convert into an aggregate of 1,268,197 shares of Common
Stock) and the consummation of the transactions contemplated hereunder will not
result in any anti-dilution adjustment or other similar adjustment to the
outstanding shares of Preferred Stock.

 

(b)         Common Stock. Immediately
prior to Closing, 35,000,000 shares of Common Stock par value $0.001 per share,
of which 3,502,442 shares are issued and outstanding. All outstanding shares of
Common Stock (including shares issued pursuant to the Company’s 1998 Stock
Plan) are duly and validly issued (including without limitation, issued in
compliance with applicable federal and state securities laws), fully-paid, and
non-assessable. The Company has reserved 3,691,288 shares of Common Stock for
issuance under its 1998 Stock Plan (the “Plan”), excluding shares that have
been issued pursuant to restricted stock purchase agreements and/or the
exercise of outstanding options and are included in the outstanding Common
Stock listed in the first sentence of this Section 3.2(b) above. Options to
purchase 1,183,135 shares of Common Stock that have been granted under the Plan
are currently outstanding; and 2,508,153 shares of Common Stock remain
available for future issuance to officers, directors, employees and consultants
of the Company under the Plan. The Company has not made any representations
regarding equity incentives to any officer, employee, director or consultant
that are inconsistent with the share amounts and terms set forth in the Company’s
minute book.

 

(c)          Other. Except as
set forth in the Schedule of Exceptions and as contemplated by the Agreements,
there are no outstanding options, warrants, conversion privileges, preemptive
rights, or other rights or agreements to purchase or otherwise acquire or issue
any equity securities of the Company. The Company is not a party or subject to
any agreement or understanding, and, to the Company’s knowledge, there is no
agreement or understanding between any persons and/or entities, which affects
or relates to the voting or giving of written consents with respect to any
security or by a director of the Company.

 

(d)         Acceleration and
Vesting Provisions. All options granted and Common Stock issued vest as
follows: twenty-five percent (25%) of the shares vest one (1) year following
the vesting commencement date, with the remaining seventy-five percent (75%)
vesting in equal monthly installments over the next three (3) years. No stock
plan, stock purchase, stock option or other agreement or understanding between
the Company and any holder of any equity securities or rights to purchase
equity securities provides for acceleration or other changes in the vesting
provisions or other terms of such agreement or understanding as the result of
any merger, consolidated sale of stock or assets, change in control or any
other transaction(s) by the Company.

 

3

 

3.3  Subsidiaries. 
The Company does not presently own, have any investment in, or control,
directly or indirectly, any Subsidiaries, associations or other business
entities. The Company is not a participant in any joint venture or partnership.

 

3.4 Authorization. 
All corporate action on the part of the Company, its officers, directors and
stockholders necessary for the authorization, execution and delivery of, and
performance of all obligations under the Agreements, and for the issuance and
delivery of the Shares, and of the Common Stock issuable upon conversion of the
Shares (the “Conversion Shares”) has been taken. The Agreements constitute
legally binding valid obligations of the Company enforceable against the
Company in accordance with their respective terms, except (i) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium, and other laws
of general application affecting enforcement of creditors’ rights generally,
(ii) as limited by laws relating to the availability of specific performance,
injunctive relief, or other equitable remedies, and (iii) to the extent the
indemnification provisions contained in the Rights Agreement may be limited by
applicable federal or state securities laws.

 

3.5 Validity of
Series F Preferred.  The Shares, when issued, sold and delivered
in accordance with the terms and for the consideration expressed in this Agreement,
shall be duly and validly issued (including, without limitation, issued in
compliance with applicable federal and state securities laws), fully-paid and
non-assessable, and free from any liens or encumbrances other than those set
forth in the Agreements and the applicable state and federal securities laws
restrictions on transfer to which such Shares are subject. The Conversion
Shares have been duly and validly reserved for issuance, and, upon issuance in
accordance with the Certificate shall be duly and validly issued (including,
without limitation, issued in compliance with all applicable federal and state
securities laws), fully paid and non-assessable, and free from any liens or
encumbrances other than those set forth in the Agreements and the applicable
state and federal securities laws restrictions on transfer to which such
Conversion Shares are subject.

 

3.6 Offering. 
Subject in part to the truth and accuracy of each Investor’s representations
set forth in Section 4 of this Agreement, the offer, sale and issuance of
the Shares as contemplated by this Agreement are exempt from the registration
requirements of the Securities Act of 1933, as amended (the “Securities Act”),
and applicable blue sky laws. Neither the Company nor any authorized agent
acting on its behalf has taken, or will take, any action hereafter that would
cause the loss of such exemptions.

 

3.7 No Conflict
with Other Instruments; Compliance with Laws.  The execution, delivery
and performance of the Agreements by the Company will not result in any
violation of, be in conflict with, or constitute a default under or result in
the imposition of any Lien upon any of the Company’s material assets under,
with or without the passage of time or the giving of notice: (i) any
provision of the Certificate or the Company’s Bylaws; (ii) any provision
of any judgment, decree or order to which the Company is a party or by which it
is bound; (iii) any material provision of any contract, obligation or
commitment to which the Company is a party or by which it is bound; or (iv) any
material statute, rule or governmental regulation applicable to the Company. The
Company is, and is conducting its business, in compliance in all material
respects with all statutes, rules, and governmental regulations applicable to
the Company.

 

4

 

3.8 Agreements;
Actions.

 

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

 

(b)         There are no agreements,
understandings, instruments, contracts or proposed transactions to which the
Company is a party or by which it is bound which involve (i) obligations
of, or payments to, the Company in excess of $25,000, (ii) the license of
any patent, copyright, trade secret or other proprietary right of the Company,
(iii) any other material agreement, (iv) provisions restricting the
development, manufacture or distribution of the Company’s products or services,
or (v) indemnification by the Company with respect to infringements of
proprietary rights (other than indemnification obligations arising from
purchase or sale agreements entered into in the ordinary course of business).

 

(c)          The Company has not
(i) declared or paid any dividends, or authorized or made any distribution
upon or with respect to any class or series of its capital stock,
(ii) incurred any indebtedness for money borrowed, (iii) incurred any
other liabilities individually in excess of $25,000 or in the aggregate in excess
of $100,000,
(iv) made any loans or advances to any person, other than ordinary
advances for travel expenses, (v) sold, exchanged or otherwise disposed of
any of its material assets or rights or (vi) agreed to do any of the
foregoing.

 

(d)         For the purposes of
subsections (b) and (c) above, all indebtedness, liabilities, agreements,
understandings, instruments, contracts and proposed transactions involving the
same person or entity (including persons or entities the Company has reason to
believe are affiliated therewith) shall be aggregated for the purpose of
meeting the individual minimum dollar amounts of such subsections.

 

(e)          The Company is not a
party to and is not bound by any contract, agreement or instrument, or subject
to any restriction under its Certificate or Bylaws, which adversely affects in
any material respect its business as now conducted or as proposed to be
conducted, its properties or its financial condition.

 

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

 

3.9 Litigation. 
There is no pending or, to the Company’s knowledge, threatened, legal action,
proceeding or investigation that involves the prior employment of any of the
Company’s employees, their use in connection with the Company’s business of any
information or techniques allegedly proprietary to any of their former
employers, or their obligations under any agreements with prior employers , or
that questions the validity of the Agreements or the right of the Company to
enter into the Agreements or to consummate the transactions contemplated hereby
and thereby, or that would reasonably be expected to result, either 

 

5

 

individually or in the
aggregate, in any Material Adverse Event or any change in the current equity
ownership of the Company , nor is the Company aware that there is any basis for
the foregoing. There is no judgment, decree or order of any court in effect
against the Company or any of its assets. The Company has no present intention
to commence litigation against any other party.

 

3.10               Title to
Property and Assets; Leases.  Except (a) for liens for current
taxes not delinquent, (b) for liens imposed by law and incurred in the
ordinary course of business for obligations not past due to carriers,
warehousemen, laborers, materialmen and the like, or (c) for minor defects
in title, none of which, individually or in the aggregate, materially
interferes with the use of such property, the Company owns its property and
assets free and clear of all mortgages, liens, claims and encumbrances (“Liens”).
With respect to the property and assets it leases, the Company is in compliance
with such leases and, to its knowledge, holds a valid leasehold interest free
of any liens, claims, or encumbrances, subject to clauses (a)-(c) above.

 

3.11               Patents and
Other Proprietary Rights.  Section 3.11 of the Schedule of Exceptions
contains a complete and accurate list of all (a) patented or registered
Intellectual Property Rights (as defined below) owned or used by the Company,
(b) pending patent applications and applications for registrations of other
Intellectual Property Rights filed by the Company and (c) unregistered trade
names and corporate names owned or used by the Company. The Schedule of
Exceptions also contains a complete and accurate list of all licenses and other
rights granted by the Company to any third party with respect to any
Intellectual Property Rights and all licenses and other rights granted by any
third party to the Company with respect to any Intellectual Property Rights, in
each case identifying the subject Intellectual Property Rights but not
including licenses arising from the purchase of “off the shelf” or other standard
products. The Company owns all right, title and interest in and to all of the
Intellectual Property Rights listed or required to be listed on the Schedule of
Exceptions free and clear of all liens, encumbrances or claims of others. The
Company owns all right, title and interest to, or has the right to use pursuant
to a valid license, all Intellectual Property Rights used in or necessary for
the operation of the business of the Company as presently conducted and as
presently proposed to be conducted, free and clear of all liens, encumbrances
or claims of others. The Company has taken all necessary and desirable actions
to maintain and protect the Intellectual Property Rights that it owns. To the
Company’s knowledge, the owners of any Intellectual Property Rights licensed to
the Company have taken all necessary and desirable actions to maintain and
protect the Intellectual Property Rights that are subject to such licenses. There
have been no claims made against the Company asserting the invalidity, misuse
or unenforceability of any of such Intellectual Property Rights, and to the
Company’s knowledge, there are no valid grounds for the same. The Company has
not received any notices of, and is not aware of any facts which indicate a
likelihood of, any infringement or misappropriation by, or conflict with, any
third party with respect to such Intellectual Property Rights (including,
without limitation, any demand or request that the Company license any rights
from a third party). To the Company’s knowledge, the conduct of the Company’s
business has not infringed, misappropriated or conflicted with and does not
infringe, misappropriate or conflict with any Intellectual Property rights of
others, nor would any future conduct as presently contemplated infringe, misappropriate
or conflict with any Intellectual Property Rights of others. To the Company’s
knowledge, the Intellectual Property Rights owned by or licensed to the Company
have not been infringed, misappropriated or conflicted by others. The
transactions contemplated by this Agreement shall 

 

6

 

have no adverse effect on
the Company’s right, title and interest in and to the Intellectual Property
Rights listed or required to be listed on the Schedule of Exceptions. To the
Company’s knowledge after due inquiry, none of its employees is obligated under
any contract (including licenses, covenants or commitments of any nature) or
other agreement, or subject to any judgment, decree or order of any court or
administrative agency, that would interfere with the use of his or her best
efforts to promote the interests of the Company or that would conflict with the
Company’s business as presently conducted and as presently proposed to be
conducted. Neither the execution of this Agreement nor the transactions
contemplated by this Agreement nor the carrying on of the Company’s business by
the employees of the Company, nor the conduct of the Company’s business as
presently proposed to be conducted, will, to the Company’s knowledge, conflict
with or result in a breach of the terms, conditions or provisions of, or
constitute a default under, any contract, covenant or instrument under which
any of such employees is now obligated. The Company does not believe it is or
will be necessary to utilize any inventions of any of its employees (or people
it currently intends to hire) made prior to their employment by the Company. For
purposes of this Agreement, “Intellectual Property Rights” means all (i)
patents, patent applications, patent disclosures and inventions, (ii)
trademarks, service marks, trade dress, trade names, logos and corporate names
and registrations and applications for registration thereof together will all
of the goodwill associated therewith, (iii) copyrights (registered and
unregistered) and copyrightable works and registrations and applications for
registration thereof, (iv) mask works and registrations and applications for
registration thereof, (v) computer software, data, data bases and documentation
thereof, (vi) trade secrets and other confidential information (including,
without limitation, ideas, formulas, compositions, inventions (whether
patentable or unpatentable and whether or not reduced to practice), know-how,
manufacturing and production processes and techniques, research and development
information, drawings, specifications, designs, plans, proposals, technical
data, financial and marketing plans and customer and supplier lists and
information), (vii) other intellectual property rights and (viii) copies and tangible
embodiments thereof (in whatever form or medium).

 

3.12               Confidential
Information and Invention Assignments.  Each employee of and
consultant to the Company has executed and delivered to the Company a
Confidential Information and Invention Assignment Agreement, in the form
previously provided to legal counsel to the Investors. No current employee,
officer or consultant of the Company has excluded works or inventions made
prior to his or her employment with the Company from his or her assignment of
inventions pursuant to such employee, officer or consultant’s Confidential
Information and Invention Assignment Agreement. The Company is not aware that
any of its employees or consultants are in violation thereof, and the Company
will use its best efforts to prevent any such violation.

 

3.13               No Defaults;
Violations or Conflicts.  The Company is not in violation of (i) any
term or provision of its Certificate, Bylaws, or (ii) any term or provision of
any indebtedness, mortgage, indenture, contract, agreement, or judgment, which
violation would reasonably be expected to constitute a Material Adverse Event.

 

3.14               Registration
Rights.  Except as provided in the Rights Agreement, the Company is
under no contractual obligation to register under the Securities Act any of its
presently outstanding securities or any of its securities that may subsequently
be issued.

 

7

 

3.15               Brokers and
Finders.  The Company has not retained any investment banker, broker
or finder in connection with the sale of the Shares.

 

3.16               Governmental
Consents.  No consent, approval, order or authorization of, or
registration, qualification, designation, declaration or filing with, any
federal, state, local or provincial governmental authority on the part of the
Company is required in connection with the consummation of the transactions
contemplated by this Agreement, except for qualification (or taking such action
as may be necessary to secure an exemption from qualification) under the
California Corporate Securities Laws and other applicable blue sky laws of the
Shares and Conversion Shares.

 

3.17               Corporate
Documents.  The Certificate and Bylaws of the Company as presently in
effect are in the form previously provided to the Investors.

 

3.18               Minute Books. 
The minute books of the Company provided to legal counsel to the Investors
contain a complete summary of all meetings and actions of directors and
stockholders since the time of incorporation and reflect all transactions
referred to in such minutes accurately in all material respects.

 

3.19               Disclosure. 
The Company has provided the Investors with all the information that the
Investors have requested for deciding whether to acquire the Shares and all
information that the Company believes is reasonably necessary to enable the
Investors to make such a decision. No representation or warranty of the Company
contained in this Agreement and the exhibits attached hereto, or in any
certificate furnished or to be furnished to Purchasers at the Closing, contains
any untrue statement of a material fact or omits to state a material fact
necessary in order to make the statements contained herein or therein not
misleading in light of the circumstances under which they were made.

 

3.20               No Conflict of
Interest.  The Company is not indebted, directly or indirectly, to any
of its officers or directors or to their respective spouses or children, in any
amount whatsoever other than in connection with expenses or advances of
expenses incurred in the ordinary course of business or relocation expenses of
employees. None of the Company’s officers or directors, or any members of their
immediate families, are, directly or indirectly, indebted to the or, to the
Company’s knowledge, have any direct or indirect ownership interest in any firm
or corporation with which the Company in affiliated or with which the Company
has a business relationship, or any firm or corporation which competes with the
Company except that officers, directors and/or stockholders of the Company may
own stock in (but not exceeding two percent of the outstanding capital stock
of) any publicly-traded company that may compete with the Company. None of the
Company’s officers or directors or any members of their immediate families are,
directly or indirectly, interested in any material contract with the Company. The
Company is not a guarantor or indemnitor of any indebtedness of any other
person, firm or corporation.

 

3.21               Liabilities. 
The Company has no material liabilities or material contingent liabilities,
except current liabilities incurred in the ordinary course of business which
have not and will not, either in any individual case or in the aggregate,
result in a Material Adverse Event.

 

8

 

3.22                           Financial
Statements.  The Company has made available to the Investors the
unaudited balance sheet and statement of operations of the Company as of and
for the period ended December 31, 2006 (the “Financial Statements”). The
Financial Statements are correct in all material respects, have been prepared
in accordance with generally accepted accounting principles, and present fairly
the financial condition and operating results of the Company as of the date(s)
and during the period(s) indicated therein. The Company maintains, and will
continue to maintain, a standard system of accounting established and
administered in accordance with generally accepted accounting principles.

 

3.23                           No
Material Change.  Since December 31, 2006 there has not been:

 

(a)                                  any
changes in the assets, liabilities, financial condition, or operating results
of the Company from that reflected in the Financial Statements, except changes
in the ordinary course of business that have not been and are not expected to
be, individually or in the aggregate, materially adverse;

 

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

 

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

 

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

 

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

 

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

 

(g)                                 any
sale, assignment, or transfer or any Intellectual Property;

 

(h)                                 any
resignation or termination of employment of any officer, key employee, or key
consultant, or any group of key employees or consultants, of the Company;

 

(i)                                     receipt
of notice that there has been a loss of, or material order cancellation by, any
important customer of the Company;

 

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

 

9

 

(k)                                  any
material change in the contingent obligations of the Company by way of
guaranty, endorsement, indemnity, warranty, or otherwise;

 

(l)                                     any
declaration, setting aside of payment, or other distribution in respect of any
of the Company’s capital stock, or any direct or indirect redemption, purchase,
or other acquisition of any such stock by the Company, or any issuance of stock
or other securities other than stock options granted and exercised in the
ordinary course of business under plans approved by the Board of Directors;

 

(m)                               to
the best of the company’s knowledge, any other event or condition of any
character that could  materially and
adversely affect the Company’s business, properties, assets, prospects, or
financial conditions (as such business is presently conducted and as it is
proposed to be conducted; or

 

(n)                                 any
agreement or commitment by the Company to do any of the things described in
this Section 3.23.

 

3.24         Permits.  The Company has
all franchises, permits, licenses and any similar authority necessary for the
conduct of its business, the lack of which could result in a Material Adverse
Event. The Company is not in default in any material respect under any of such
franchises, permits, licenses or other similar authority.

 

3.25         Employee Benefit Plans. 
The Company is in compliance in all material respects with the terms of all Employee
Benefit Plans as defined in the Employee Retirement Income Security Act of
1974, as amended and with the laws and regulations applicable thereto.

 

3.26         Environmental and Safety Laws. 
The Company is not in violation of any applicable statute, law or regulation
relating to the environment or occupational health and safety, and to its
knowledge, no material expenditures are or will be required in order to comply
with any such existing statute, law or regulation.

 

3.27         Tax Returns.  The Company
has timely filed all tax returns (federal, state and local) required to be
filed by it. These returns and reports are true and correct in all material
respects. The Company has paid all taxes and other assessments due. The Company
has never had any tax deficiency proposed or assessed against it and has not
executed any waiver of any statute of limitations on the assessment or
collection of any tax or governmental charge. The Company has not been advised
that any of its returns have been or are being audited. The Company has
withheld or collected from each payment made to each of its employees the
amount of all taxes (including, without limitation, federal income taxes,
Federal Insurance Contribution Act taxes and Federal Unemployment Act taxes)
required to be withheld or collected therefrom and has paid the same to the
proper tax receiving officers or authorized depositories. The Company is not
aware of any tax liability to be imposed upon its properties or assets as of
the date hereof that would result in a Material Adverse Event. The Company is
not a “United States real property holding corporation” within the meaning of
Internal Revenue Code Section 897(c)(2) and any regulations promulgated
thereunder.

 

3.28         Employment Agreements.  The
Company has no collective bargaining agreements with any of its employees. There
is no labor union organizing activity pending or, to 

 

10

 

the Company’s knowledge,
threatened with respect to the Company. No employee has any agreement or
contract, written or verbal, regarding his or her employment. The Company is
not a party to or bound by any currently effective employment contract,
deferred compensation arrangement, bonus plan, incentive plan, profit sharing
plan, retirement agreement or other employee compensation plan or agreement
(each, a “Plan”). After reasonable investigation, to the Company’s knowledge,
no employee of the Company, nor any consultant with whom the Company has
contracted, is in violation of any term of any employment contract, proprietary
information agreement or any other agreement relating to the right of any such
individual to be employed by, or to contract with, the Company; and to the
Company’s knowledge the continued employment by the Company of its present
employees, and the performance of the Company’s contracts with its independent
contractors, will not result in any such violation. The Company has not
received any notice alleging that any such violation has occurred. No employee
of the Company has been granted the right to continued employment by the
Company or to any compensation following termination of employment with the
Company. The Company is not aware that any officer or key employee intends to
terminate his employment with the Company, nor does the Company have a present
intention to terminate the employment of any of the foregoing. The employment
of each officer and employee of the Company is terminable at the will of the
Company without the payment of any severance benefit or the acceleration of any
stock vesting (or lapse of stock repurchase provision).

 

3.29         Obligations of Management. 
Each officer of the Company is currently devoting one hundred percent (100%) of
his or her business time to the conduct of the business of the Company. The
Company is not aware that any officer or key employee of the Company is
planning to work less than full time at the Company in the future. No officer
or key employee is currently working or, to the Company’s knowledge, plans to
work for a competitive enterprise, whether or not such officer of key employee
is or will be compensated by such enterprise.

 

3.30         Voting Agreements.  To the
Company’s knowledge, no shareholder of the Company has entered into any
agreement with respect to the voting of equity securities of the Company.

 

3.31         Section 83(b) Elections. 
To the Company’s knowledge, all elections and notices permitted by Section
83(b) of the Code and any analogous provisions of applicable state tax laws
have been timely filed by all employees who have purchased shares of the
Company’s common stock under agreements that provide for the vesting of such
shares.

 

4.               Representations
and Warranties of the Investors.  Each Investor represents and
warrants to the Company as follows:

 

4.1 Authorization. 
When executed and delivered by such Investor, and assuming execution and
delivery by the Company, the Agreements will constitute valid obligations of
such Investor, enforceable in accordance with their terms, except (i) as
limited by applicable bankruptcy, insolvency, reorganization, moratorium, and
other laws of general application affecting enforcement of creditors’ rights
generally, (ii) as limited by laws relating to the availability of specific
performance, injunctive relief, or other equitable remedies, and (iii) to the
extent the indemnification provisions contained in the Rights Agreement may be
limited by applicable federal or state securities laws.

 

11

 

4.2 Brokers and
Finders.  Such Investor has not retained any investment banker,
broker, or finder in connection with the transactions contemplated by this
Agreement.

 

5.               Securities Laws.

 

5.1 Securities Laws
Representations and Covenants of Investor.  Each Investor severally
represents and warrants to the Company as follows:

 

(a)          This Agreement is made
with such Investor in reliance upon such Investor’s representation to the Company,
which by such Investor’s execution of this Agreement such Investor hereby
confirms, that the Shares and the Conversion Shares (collectively, the “Securities”)
to be received by such Investor will be acquired for investment for such
Investor’s own account, not as a nominee or agent, and not with a view to the
sale or distribution of any part thereof, and that such Investor has no present
intention of selling, granting any participation in, or otherwise distributing
the same. By executing this Agreement, such Investor further represents that
such Investor has no contract, undertaking, agreement or arrangement with any
person to sell, transfer, or grant participations to such person or to any
third person, with respect to any of the Securities.

 

(b)         Such Investor understands
and acknowledges that the offering of the Securities pursuant to this Agreement
will not be registered under the Securities Act on the grounds that the
offering and sale of securities contemplated by this Agreement are exempt from
registration pursuant to Section 4(2) of the Securities Act, and that the
Company’s reliance upon such exemption is predicated upon such Investor’s
representations set forth in this Agreement.

 

(c)          Each such Investor
covenants that in no event will it dispose of any of the Securities (other than
if a Registration Statement is in effect with respect to such shares of the
Securities or a disposition pursuant to Rule 144 promulgated by the
Securities and Exchange Commission (“Commission”) under the Securities Act (“Rule 144”)
or any similar or analogous rule) unless and until (i) such Investor shall
have notified the Company of the proposed disposition and shall have furnished
the Company with a statement of the circumstances surrounding the proposed
disposition that are necessary to the availability of an exemption under the
Securities Act other than Rule 144, and (ii) if requested by the
Company, such Investor shall have furnished the Company with an opinion of
counsel reasonably satisfactory in form and substance to the Company and the
Company’s counsel to the effect that (x) such disposition will not require
registration under the Securities Act and (y) appropriate action necessary
for compliance with the Securities Act and any applicable state, local or
foreign law has been taken. Notwithstanding the limitations set forth in the
foregoing sentence, such Investor which is a partnership or other pooled
investment vehicle may transfer Securities to its constituent partners or
affiliates or a retired partner or affiliate of such entity who retires after
the date hereof, or to the estate of any such partner or affiliate or retired
partner or affiliate or transfer by gift, will or intestate succession to any
such person’s spouse or lineal descendants or ancestors without the necessity
of registration or opinion of counsel if the transferee agrees in writing to be
subject to the terms of this Agreement and the other Agreements to the same
extent as if such transferee were an Investor; provided, however, that each
such Investor hereby covenants not to effect such transfer if such transfer
either would invalidate the securities laws exemptions pursuant to which the
Securities were originally offered and sold or would itself require
registration under the 

 

12

 

Securities Act or applicable state securities laws. Any
certificate evidencing the Securities transferred as above provided shall bear
the appropriate restrictive legend set forth in Section 5.2 below;
provided, however, that any legend endorsed on a certificate pursuant to
Section 5.2(a) hereof shall be removed (i) if the Securities
represented by such certificate shall have been effectively registered under
the Securities Act or otherwise lawfully sold in a public transaction, or
(ii) if such Securities may be transferred in compliance with
Rule 144(k) promulgated under the Securities Act. Any legend endorsed on a
certificate pursuant to Section 5.2(b) hereof shall be removed if the
Company receives an order of the appropriate state authority authorizing such
removal.

 

(d)         Each such Investor
represents that: (i) such Investor has such knowledge and experience in
financial and business matters as to be capable of evaluating the merits and
risks of such Investor’s prospective investment in the Securities;
(ii) such Investor has received all the information it has requested from
the Company and considers necessary or appropriate for deciding whether to
purchase the Securities; (iii) such Investor has the ability to bear the
economic risks of such Investor’s prospective investment; (iv) such
Investor understands that no public market currently exists for any of the
Company’s securities, and that the Company has made no assurances that a public
market will ever exist for the Securities and (v) such Investor is able,
without materially impairing its financial condition, to hold the Securities
for an indefinite period of time and to suffer complete loss on its investment.

 

5.2 Legends.

 

(a)          All certificates for the
Securities shall bear the following legend:

 

“THE SECURITIES
REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE “ACT”). SUCH SECURITIES MAY NOT BE TRANSFERRED UNLESS A
REGISTRATION STATEMENT UNDER THE ACT IS IN EFFECT AS TO SUCH TRANSFER OR SUCH
TRANSFER MAY BE MADE PURSUANT TO RULE 144 OR IN THE OPINION OF COUNSEL FOR
THE COMPANY, REGISTRATION UNDER THE ACT IS UNNECESSARY IN ORDER FOR SUCH
TRANSFER TO COMPLY WITH THE ACT.”

 

(b)         Any certificates
evidencing the Securities shall also bear any legend required by the
Commissioner of Corporations of the State of Delaware or required pursuant to
any state, local or foreign law governing such securities.

 

6.               Conditions of
Investor’s Obligations at a Closing.  The obligations of each Investor
under Sections 1.1 and 1.2 of this Agreement are subject to the
fulfillment at or before each Closing of each of the following conditions, any
of which may be waived in writing by such Investor but solely as to such
Investor:

 

6.1 Representations
and Warranties.  The representations and warranties of the Company
contained in Section 3 shall be true on and as of the date of the Closing
with the same effect as if made on and as of the Closing.

 

13

 

6.2 Performance. 
The Company shall have performed or fulfilled in all material respects all
agreements, obligations and conditions contained herein required to be
performed or fulfilled by the Company before the Closing.

 

6.3 Blue Sky
Compliance.  The Company shall have complied with and be effective
under all state securities or Blue Sky laws applicable to the offer and sale of
the Shares to the Investors at the Closing.

 

6.4 Information and
Registration Rights.  The Company and the Investor shall have entered
into the Rights Agreement in substantially the form attached hereto as Exhibit
D.

 

6.5 Voting Agreement. 
The Company and the Investor shall have entered into the Voting Agreement in
substantially the form attached hereto as Exhibit E.

 

6.6 Co-Sale Agreement. 
The Company and the Investor shall have entered into the Co-Sale Agreement in
substantially the form attached hereto as Exhibit F.

 

6.7 Proceedings
Satisfactory; Compliance Certificate.  All corporate and legal
proceedings taken by the Company in connection with the transactions
contemplated by this Agreement and all documents and papers relating to such
transactions shall be satisfactory to the Investors and legal counsel to the
Investors, and legal counsel to the Investors shall have received all such counterpart
original and certified or other copies of such documents as they may reasonably
request. The Company shall have delivered to legal counsel to the Investors a
certificate dated as of the Closing, signed by the Company’s President,
certifying that each of the conditions set forth in this Sections 6 have
been satisfied.

 

6.8 Opinion of Counsel. 
There shall have been delivered to the Investors an opinion of legal counsel to
the Company, in substantially the form of Exhibit G attached
hereto, dated as of the date of the Closing.

 

6.9 Certified Charter
Documents and Resolutions.  There shall have been delivered to the
Investors a copy of the (i) Certificate and Bylaws of the Company (as amended
and restated through the date of the Closing), (ii) resolutions of the Board of
Directors approving the Agreements and the transaction contemplated hereby and
thereby, and (iii) resolutions of the stockholders of the Company approving the
Certificate, each certified by the Secretary of the Company as true and correct
copies thereof as of the date of the Closing.

 

6.10                           Amended
and Restated Certificate of Incorporation.  The Amended and Restated
Certificate of Incorporation shall have been filed with and accepted by the
Delaware Secretary of State.

 

6.11                           Stock
Option Plan.  The Company shall have amended the 1998 Stock Plan so as
to increase the number of shares reserved for issuance thereunder by an
additional 2,000,000 shares.

 

6.12                           Indemnification
of Directors.  The Company shall have entered into an Indemnification Agreement
(in a form reasonably acceptable to legal counsel to the Investors) with each
director of the Company.

 

14

 

6.13                           Management
Rights.  The Company shall have entered into a management rights
letter in reasonably acceptable form with each Investor, including Burrill
& Co., who reasonably requires such a document.

 

6.14                           Completion
of Due Diligence.  The Investors shall have completed their financial
and legal due diligence. All documents contemplated by this Agreement shall
have been completed.

 

6.15                           Burrill
Director.  Immediately prior to the Initial Closing, a nominee of
Burrill & Co. shall be duly elected or appointed as a Director of the
Company.

 

7.               Conditions of
the Company’s Obligations at a Closing.  The obligations of the
Company under Sections 1.1 and 1.2 of this Agreement are subject to the
fulfillment at or before each Closing of each of the following conditions, any
of which may be waived in writing by the Company:

 

7.1 Representations
and Warranties.  The representations and warranties of the Investor
contained in Sections 4 and 5 shall be true on and as of the Closing with
the same effect as though said representations and warranties had been made on
and as of the Closing.

 

7.2 Information and
Registration Rights.  The Investors shall have entered into the Rights
Agreement in substantially the form of Exhibit D attached hereto.

 

7.3 Voting Agreement. 
The Investors shall have entered into the Voting Agreement in substantially the
form attached hereto as Exhibit E.

 

7.4 Co-Sale Agreement. 
The Investors shall have entered into the Co-Sale Agreement in substantially
the form attached hereto as Exhibit F.

 

7.5 Amended and
Restated Certificate of Incorporation.  The Certificate shall have
been filed with and accepted by the Delaware Secretary of State.

 

7.6 Payment of
Purchase Price.  Each Investor shall have respectively delivered the
total purchase price applicable to such Investor as set forth in Exhibit A
hereto.

 

8.               Post-Closing
Covenants of the Company.

 

8.1 Securities Laws
Compliance.  The Company shall within fifteen (15) days of the
Closings file a notice of the sale of the Shares to the Investors pursuant to
Section 25102(f) of the California Corporations Code and shall make any
other filings required by the securities or blue sky laws of any other
applicable jurisdiction.

 

9.               Miscellaneous.

 

9.1 Entire Agreement;
Successors and Assigns.  The Agreements constitute the entire
agreement between the Company and the Investors relative to the subject matter
hereof. Any previous agreement between the Company and the Investors is
superseded by this Agreement. Subject to the exceptions specifically set forth
in this Agreement, the terms and 

 

15

 

conditions of this
Agreement shall inure to the benefit of and be binding upon the respective
executors, administrators, heirs, successors and assigns of the parties.

 

9.2 Governing Law. 
This Agreement shall be governed by and construed in accordance with the laws
of the State of California applicable to contracts entered into and wholly to
be performed within the State of California by California residents.

 

9.3 Counterparts. 
This Agreement may be executed in counterparts, including those transmitted by
facsimile or electronic transmission, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.

 

9.4 Headings. 
The headings of the sections of this Agreement are for convenience and shall
not by themselves determine the interpretation of this Agreement.

 

9.5 Notices. 
Any notice required or permitted hereunder shall be given in writing and shall
be conclusively deemed effectively given (i) five days after sending by
first class U.S. mail postage prepaid, (ii) upon personal delivery, or
(iii) two days after the date of sending if sent by commercial overnight
courier addressed to the Company as set forth below the Company’s name on the
signature page of this Agreement, and to an Investor, at such Investor’s address
as set forth on Exhibit A or at such other address as the Company
or such Investor may designate.

 

9.6 Survival of
Warranties.  The warranties, representations and covenants of the
parties contained in or made pursuant to this Agreement shall survive the
execution and delivery of this Agreement and the Closing, and such warranties,
representations and covenants of the Company shall in no way be affected by any
investigation of the subject matter thereof made by or on behalf of the
Investors; provided, however, that such representations and warranties need
only be accurate as of the date of such execution and delivery and as of the
Closing.

 

9.7 Amendment of
Agreement.  Any term of this Agreement may be amended and the
observance of any term of this Agreement 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 a majority of the Common
Stock issuable or issued upon conversion of the Shares provided that (i) no
such amendment shall impose or increase any liability or obligation or an
Investor without the consent of such Investor, and (ii) no such amendment has a
disproportionately adverse effect on any Investor in relation to the other Investors
without the consent of such Investor. Any amendment or waiver affected in
accordance with this paragraph shall be binding upon each holder of any
securities purchased under this Agreement at the time outstanding (including
securities into which such securities are convertible) and the Company.

 

9.8 Finders Fees. 
Each of the Company and the Investor will indemnify the other against all
liabilities incurred by the indemnifying party with respect to claims related
to investment banking or finders fees in connection with the transactions
contemplated by this Agreement, arising out of arrangements between the party
asserting such claims and the indemnifying party, and all costs and expenses
(including reasonable fees of counsel) of investigating and defending such
claims.

 

16

 

9.9 Expenses. 
Each of the Company and the Investors shall bear its own expenses incurred on
its behalf with respect to this Agreement and the transactions contemplated
hereby; provided, however, that if the financing is consummated, the Company
agrees to pay, at the Closing, upon the presentation of detailed invoice the
reasonable fees and expenses of Jones Day as special legal counsel to Investor
Burrill Life Sciences Capital Fund, L.P. and its participating affiliates, not
to exceed $35,000 in the aggregate.

 

9.10                 Aggregation of
Stock.  All Shares held or acquired by affiliated entities or persons
shall be aggregated together for the purpose of determining the availability of
any rights under this Agreement.

 

9.11                 Severability. 
If any provision of this Agreement is held to be unenforceable for any reason,
it shall be adjusted rather than voided, if possible, in order to achieve the
intent of the parties to the extent possible. In any event, all other
provisions of this Agreement shall be deemed valid and enforceable to the full
extent possible.

 

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

 

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

 

9.14                 Exculpation
Among Investors.  Each Investor acknowledges that it is not relying
upon any person, firm or corporation, other than the Company and its officers
and directors, in making its investment or decision to invest in the Company. Each
Investor agrees that no Investor nor the respective controlling persons,
officers, directors, partners, agents, or employees of any Investor shall be
liable to any other Investor for any action heretofore or hereafter taken or
omitted to be taken by any of them in connection with the purchase of the
shares of Series F Preferred.

 

17

 

9.15                           Indemnification.

 

(a)          The Company agrees to
indemnify and hold harmless each Investor and such Investor’s general partners,
officers, directors, employees, agents, affiliates and stockholders, if any
(collectively, the “Indemnitees”), against any investigations, proceedings,
claims or actions and for any expenses, damages, liabilities,  losses, penalties, fines, judgments, awards,
settlements, Taxes, costs, fees and disbursements (joint or several)
(collectively, “Losses”)  to which the
Indemnitees may become subject under the Securities Act, and any rules or
regulations promulgated thereunder, the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), and any rules or regulations promulgated
thereunder, or any federal, state, local, foreign or other law or regulation,
common law or otherwise, arising out of, related to or in any way attributable
to the Indemnitee’s investment in the Company, including, without limitation,
Losses that arise out of, are related to or are in any way attributable to or
based upon (i) any breach of any representation, warranty, agreement or
covenant of the Company contained herein, (ii) any untrue statement or alleged
untrue statement of any material fact contained in any registration statement
filed by the Company or any amendment or supplement thereto, or the omission or
alleged omission to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, (iii) any untrue statement or alleged
untrue statement of any material fact contained in any prospectus distributed
by the Company or any amendment or supplement thereto, or the omission or
alleged omission to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, or (iv) any statement by or on behalf of
the Company or action taken by the Company. Upon written request, the Company
agrees to reimburse the Indemnitee for any legal or other expenses incurred in
connection with investigating or defending any such investigations,
proceedings, claims or actions, as such expenses or other costs are incurred. Each
Indemnitee may select its own counsel, and shall have the sole and exclusive
right to conduct, defend and settle in its sole discretion any third party
claim in connection with which indemnification is provided hereunder.

 

(b)         This indemnity shall
extend upon the same terms and conditions to, and shall inure to the benefit
of, each person, if any, who controls any Indemnitee within the meaning of the
Act or the Exchange Act. This indemnity shall be in addition to any obligations
that the Company may otherwise have with respect to the Investors, including,
without limitation, any obligations to Investors or representatives of the
Investors in their individual capacities as directors of the Company.

 

18

 

IN WITNESS WHEREOF, the
parties hereto have executed this Agreement as of the day and year first above
written.

 

	
  THE
  COMPANY:

  	
  EXPRESSION
  DIAGNOSTICS, INC.

  
	
   

  	
  a Delaware
  corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
      /s/
  Pierre Cassigneul

  	
   

  
	
   

  	
   

  	
  Pierre
  Cassigneul, President

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
  3260
  Bayshore Blvd.

  
	
   

  	
  Brisbane,
  CA 94005

  
	
   

  	
   

  
	
   

  	
   

  
	
  THE
  INVESTORS:

  	
  INTEL CAPITAL
  CORPORATION,

  
	
   

  	
  a Delaware
  corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
     /s/
  James W. McCall

  	 

	
   

  	
   

  
	
   

  	
  Name:

  	
  James W. McCall

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
  Title:

  	
  Assistant
  Treasurer

  	 

	
   

  	
   

  
	
   

  	
  Intel Capital Corporation

  
	
   

  	
  c/o Intel Corporation

  
	
   

  	
  Attn: Intel Capital Portfolio Manager

  
	
   

  	
  2200 Mission College Blvd., M/S RN6-46

  
	
   

  	
  Santa Clara, CA 95052

  
	
   

  	
  Fax Number: (408) 765-6038

  
	
   

  	
  With a copy by e-mail to:

  
	
   

  	
  portfolio.manager@intel.com

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THIS IS
  THE SIGNATURE PAGE FOR THE EXPRESSION

  DIAGNOSTICS, INC. (THE “COMPANY”) SERIES F

  STOCK PURCHASE AGREEMENT ENTERED INTO BY

  AND BETWEEN THE COMPANY, INTEL CAPITAL

  CORPORATION AND THE OTHER INVESTORS SET

  FORTH THEREIN.

  
						

 

[Signature Page to Expression
Diagnostics, Inc. Series F Preferred Stock Purchase Agreement]

 

 

	
  THE
  INVESTORS:

  	
  DAG VENTURES QP, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  DAG Ventures
  Management, LLC,

  
	
   

  	
   

  	
  its General
  Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  by:

  	
  /s/ John Cadeddu

  	
   

  
	
   

  	
   

  	
   

  	
  John Cadeddu,
  Managing Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  DAG VENTURES,
  L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  DAG Ventures
  Management, LLC,

  
	
   

  	
   

  	
  its General
  Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  by:

  	
  /s/ John Cadeddu

  	
   

  
	
   

  	
   

  	
   

  	
  John Cadeddu,
  Managing Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  DAG VENTURES GP
  FUND, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  DAG Ventures
  Management, LLC,

  
	
   

  	
   

  	
  its Managing
  Member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  by:

  	
  /s/ John Cadeddu

  	
   

  
	
   

  	
   

  	
   

  	
  John Cadeddu,
  Managing Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  DAG VENTURES
  I-N, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  DAG Ventures
  Management, LLC,

  
	
   

  	
   

  	
  its Managing
  Member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  by:

  	
  /s/ John Cadeddu

  	
   

  
	
   

  	
   

  	
   

  	
  John Cadeddu,
  Managing Director

  

 

[Signature Page to Expression
Diagnostics, Inc. Series F Preferred Stock Purchase Agreement]

 

 

	
  THE
  INVESTORS:

  	
  JAMES McKAY
  ARMSTRONG

  	
   

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
  By:

  	
  /s/ James McKay
  Armstrong

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
  Address:

  	
  Two Embarcadero Center, Suite 2300

  	
   

  	 

	
   

  	
   

  	
  San Francisco, CA 94111

  	
   

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
  BLACKBOARD
  VENTURES INC.

  	
   

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
  by:

  	
  /s/ Terry
  Woodard

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Terry Woodard,
  Designated Signator

  	
   

  
													

 

[Signature Page to Expression
Diagnostics, Inc. Series F Preferred Stock Purchase Agreement]

 

 

	
  THE
  INVESTORS:

  	
  KPCB HOLDINGS,
  INC., AS NOMINEE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Brook Byers

  	
   

  
	
   

  	
  Name:

  	
  Brook Byers

  	
   

  
	
   

  	
  Title:

  	
  Senior Vice President

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
  c/o Kleiner
  Perkins Caufield Byers

  
	
   

  	
   

  	
  2750 Sand Hill Road

  
	
   

  	
   

  	
  Menlo Park, CA 94025

  
	
   

  	
   

  	
  Facsimile: 650.233.0378

  
	
   

  	
   

  	
  Attention: Risa Stack

  

 

[Signature Page
to Expression Diagnostics, Inc. Series F Preferred Stock Purchase
Agreement]

 

 

	
  THE INVESTORS:

  	
  TPG
  VENTURES, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  TPG Ventures GenPar, L.P.

  
	
   

  	
  By:

  	
  TPG
  Venture Advisors, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Jeffery D. Ekberg

  	
   

  
	
   

  	
  Name:

  	
  Jeffery
  D. Ekberg

  
	
   

  	
  Title:

  	
  Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
  301
  Commerce St., Ste. 3300

  
	
   

  	
   

  	
  Fort
  Worth, Texas 76102

  
	
   

  	
   

  	
  Attn: Jeffery D. Ekberg

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  TPG
  BIOTECHNOLOGY PARTNERS, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  TPG
  Biotechnology GenPar, L.P.

  
	
   

  	
  By:

  	
  TPG
  Biotech Advisors, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Jeffery D. Ekberg

  	
   

  
	
   

  	
  Name:

  	
  Jeffery
  D. Ekberg

  
	
   

  	
  Title:

  	
  Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
  301
  Commerce St., Ste. 3300

  
	
   

  	
   

  	
  Fort
  Worth, Texas 76102

  
	
   

  	
   

  	
  Attn: Jeffery D. Ekberg

  

 

[Signature Page
to Expression Diagnostics, Inc. Series F Preferred Stock Purchase
Agreement]

 

 

	
  THE
  INVESTORS:

  	
  SPROUT CAPITAL
  IX, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  DLJ
  Capital Corporation

  
	
   

  	
  Its:

  	
  Managing General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/
  Vijay K. Lathi

  	
   

  
	
   

  	
  By:

  	
  Vijay
  K. Lathi

  
	
   

  	
  Its:

  	
  Attorney
  in Fact

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SPROUT ENTREPRENEURS FUND, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  DLJ
  Capital Corporation

  
	
   

  	
  Its:

  	
  General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/
  Vijay K. Lathi

  	
   

  
	
   

  	
  By:

  	
  Vijay
  K. Lathi

  
	
   

  	
  Its:

  	
  Attorney
  in Fact

  

 

[Signature Page
to Expression Diagnostics, Inc. Series F Preferred Stock Purchase
Agreement]

 

 

	
  THE
  INVESTORS:

  	
  INTEGRAL CAPITAL
  PARTNERS VI, L.P.

  
	
   

  	
   

  
	
   

  	
  By
  Integral Capital Management VI, LLC

  
	
   

  	
  its General Partner

  
	
   

  	
   

  
	
   

  	
  /s/ Pamela K.
  Hagenah

  	
   

  
	
   

  	
  By:

  	
  Pamela K.
  Hagenah

  
	
   

  	
  Title:

  	
  A Manager

  
				

 

[Signature Page
to Expression Diagnostics, Inc. Series F Preferred Stock Purchase
Agreement]

 

 

	
  THE INVESTORS:

  	
  BAY AREA EQUITY FUND I, L.P.

  
	
   

  	
   

  
	
   

  	
  By: Bay Area Equity Fund Managers I,

  L.L.C., its General Partner

  
	
   

  	
  By: H&Q Venture
  Management L.L.C., its

  Managing Member

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael
  C. Dorsey

  	
   

  
	
   

  	
   

  	
       Name:
  Michael C. Dorsey

  
	
   

  	
   

  	
       Title:
  Managing Director

  

 

[Signature Page
to Expression Diagnostics, Inc. Series F Preferred Stock Purchase
Agreement]

 

 

	
  THE
  INVESTORS:

  	
  Burrill Life
  Sciences Capital Fund, L.P.

  
	
   

  	
  By:

  	
  Burrill &
  Company (Life Sciences GP), LLC

  
	
   

  	
   

  	
  Its General
  Manager

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ G. Steven Burrill

  
	
   

  	
  Name:

  	
  G. Steven Burrill

  
	
   

  	
  Title:

  	
  Managing Manager

  
	
   

  	
   

  
	
   

  	
  Address:

  	
  One Embarcadero Center,
  Suite 2700

  
	
   

  	
   

  	
  San Francisco, CA 94111

  
	
   

  	
   

  
	
   

  	
  Fax:

  	
  (415) 591-5401

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Burrill Indiana Life
  Sciences Capital Fund, L.P.

  
	
   

  	
  By:

  	
  Burrill & Company
  (Indiana GP), LLC

  
	
   

  	
   

  	
  Its General Manager

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ G. Steven Burrill

  
	
   

  	
  Name:

  	
  G. Steven Burrill

  
	
   

  	
  Title:

  	
  Managing Member

  
	
   

  	
   

  
	
   

  	
  Address:

  	
  One Embarcadero Center,
  Suite 2700

  
	
   

  	
   

  	
  San Francisco, CA 94111

  
	
   

  	
   

  
	
   

  	
  Fax:

  	
  (415) 591-5401

  

 

[Signature Page
to Expression Diagnostics, Inc. Series F Preferred Stock Purchase
Agreement]

 

 

	
  THE
  INVESTORS:

  	
  TriplePoint
  Capital LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Sajal Srivastava

  
	
   

  	
  Name:

  	
  Sajal Srivastava

  
	
   

  	
  Title:

  	
  Chief Operating Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
  2420 Sand Hill Road,
  #200

  
	
   

  	
   

  	
  Menlo Park, CA 94025

  
	
   

  	
   

  
	
   

  	
  Fax:

  	
  (650) 854-2084

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Leader Equity,
  LLC

  
	
   

  	
  By:

  	
  Leader Ventures,
  LLC

  
	
   

  	
   

  	
  Its Manager

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert W. Molke

  
	
   

  	
  Name:

  	
  Robert W. Molke

  
	
   

  	
  Title:

  	
  Managing Director

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
  311 California Street,
  Suite 420

  
	
   

  	
   

  	
  San Francisco, CA 94111

  
	
   

  	
   

  
	
   

  	
  Fax:

  	
  (415) 956-8233

  

 

[Signature Page
to Expression Diagnostics, Inc. Series F Preferred Stock Purchase
Agreement]

 

 

	
  THE INVESTORS:

  	
  PWP PARTNERSHIP
  FUND, LLC

  
	
   

  	
  By:

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William F. Dagley

  	
   

  	 

	
   

  	
  Name:  William F.
  Dagley

  
	
   

  	
  Title:    Managing
  Director

  
	
   

  	
   

  
	
   

  	
  Address:

  	
  80 Sir Francis Drake
  Boulevard

  	 

	
   

  	
   

  	
  4th Floor

  	 

	
   

  	
   

  	
  Larkspur, CA 94939

  	 

	
   

  	
   

  
	
   

  	
  Fax:

  	
  (415) 461-3299

  
						

 

[Signature Page to Expression
Diagnostics, Inc. Series F Preferred Stock Purchase Agreement]

 

 

	
  THE
  INVESTORS:

  	
  WS INVESTMENT
  COMPANY LLC (2007C)

  
	
   

  	
  WS INVESTMENT
  COMPANY (2007A)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James A. Terranova

  	
   

  
	
   

  	
  Name:  James
  A. Terranova

  
	
   

  	
  Title:

  

 

[Signature Page to Expression
Diagnostics, Inc. Series F Preferred Stock Purchase Agreement]

 

 

EXHIBIT A

 

Schedule
of Investors

 

	
  Investor

  	
   

  	
  Shares

  	
   

  	
  Price

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  KPCB

  	
   

  	
  456,719

  	
   

  	
  $

  	
  2,340,228.16

  	
   

  
	
  TPG Ventures,
  L.P.

  	
   

  	
  137,016

  	
   

  	
  $

  	
  702,069.99

  	
   

  
	
  TPG
  Biotechnology Partners, L.P.

  	
   

  	
  319,703

  	
   

  	
  $

  	
  1,638,158.17

  	
   

  
	
  Sprout Capital IX, L.P.

  	
   

  	
  297,890

  	
   

  	
  $

  	
  1,526,388.36

  	
   

  
	
  Sprout Entrepreneurs Fund, L.P.

  	
   

  	
  1,250

  	
   

  	
  $

  	
  6,405.00

  	
   

  
	
  Bay Area Equity
  Fund I, L.P.

  	
   

  	
  109,743

  	
   

  	
  $

  	
  562,323.13

  	
   

  
	
  Integral Capital
  Partners VI, L.P.

  	
   

  	
  195,160

  	
   

  	
  $

  	
  999,999.84

  	
   

  
	
  Burrill Life
  Sciences Capital Fund, L.P.

  	
   

  	
  1,441,398

  	
   

  	
  $

  	
  7,385,723.35

  	
   

  
	
  Burrill Indiana
  Life Sciences Capital Fund, L.P.

  	
   

  	
  119,882

  	
   

  	
  $

  	
  614,275.37

  	
   

  
	
  DAG Ventures QP, L.P.

  	
   

  	
  739,080

  	
   

  	
  $

  	
  3,787,045.92

  	
   

  
	
  DAG Ventures,
  L.P.

  	
   

  	
  38,254

  	
   

  	
  $

  	
  196,013.50

  	
   

  
	
  DAG Ventures GP
  Fund, LLC

  	
   

  	
  52,096

  	
   

  	
  $

  	
  266,939.90

  	
   

  
	
  DAG Ventures
  I-N, LLC

  	
   

  	
  97,580

  	
   

  	
  $

  	
  499,999.92

  	
   

  
	
  Blackboard
  Ventures, Inc.

  	
   

  	
  146,370

  	
   

  	
  $

  	
  749,999.88

  	
   

  
	
  James McKay
  Armstrong

  	
   

  	
  97,580

  	
   

  	
  $

  	
  499,999.92

  	
   

  
	
  Intel Capital
  Corporation

  	
   

  	
  390,320

  	
   

  	
  $

  	
  1,999,999.68

  	
   

  
	
  Triple Point
  Capital LLC

  	
   

  	
  97,580

  	
   

  	
  $

  	
  499,999.92

  	
   

  
	
  Leader Equity,
  LLC

  	
   

  	
  48,790

  	
   

  	
  $

  	
  249,999.96

  	
   

  
	
  PWP Partnership
  Fund, LLC

  	
   

  	
  195,160

  	
   

  	
  $

  	
  999,999.84

  	
   

  
	
  WS Investment
  Company, LLC (2007A

  	
   

  	
  6,831

  	
   

  	
  $

  	
  35,002.04

  	
   

  
	
  WS Investment
  Company, LLC (2007C)

  	
   

  	
  3,903

  	
   

  	
  $

  	
  19,998.97

  	
   

  
	
  Total

  	
   

  	
  4,992,305

  	
   

  	
  $

  	
  25,580,570.82Exhibit
10.1

 

EXPRESSION
DIAGNOSTICS, INC.

(Formerly
Known as BioCardia Inc. and Hippocratic Engineering, Inc.)

1998
STOCK PLAN

ADOPTED JANUARY 1, 1999

As Amended on October 1, 2000

As Amended on January 6, 2003

 

1.                                       Purposes of the Plan.
The purposes of this Stock Plan are to attract and retain the best available
personnel for positions of substantial responsibility, to provide additional
incentive to Employees, Directors and Consultants and to promote the success of
the Company’s business. Options granted under the Plan may be Incentive Stock
Options or Nonstatutory Stock Options, as determined by the Administrator at
the time of grant. Stock Purchase Rights may also be granted under the Plan.

 

2.                                       Definitions.
As used herein, the following definitions shall apply:

 

2.1.                              “Administrator”
means the Board or any of its Committees as shall be administering the Plan in
accordance with Section 4 hereof.

 

2.2.                              “Applicable
Laws” means the requirements relating to the administration of stock option
plans under U.S. state corporate laws, U.S. federal and state securities laws,
the Code, any stock exchange or quotation system on which the Common Stock is
listed or quoted and the applicable laws of any other country or jurisdiction
where Options or Stock Purchase Rights are granted under the Plan.

 

2.3.                              “Board”
means the Board of Directors of the Company.

 

2.4.                              “Code”
means the Internal Revenue Code of 1986, as amended.

 

2.5.                              “Committee”  means a committee of Directors appointed by
the Board in accordance with Section 4 hereof.

 

2.6.                              “Common
Stock” means the Common Stock of the Company.

 

2.7.                              “Company”
means BioCardia, Inc., a Delaware corporation.

 

2.8.                              “Consultant”
means any person who is engaged by the Company or any Parent or Subsidiary to
render consulting or advisory services to such entity.

 

2.9.                              “Director”
means a member of the Board of Directors of the Company.

 

2.10.                        “Disability”
means total and permanent disability as defined in Section 22(e)(3) of the
Code.

 

 

2.11.                        “Employee”
means any person, including Officers and Directors, employed by the Company or
any Parent or Subsidiary of the Company. A Service Provider shall not cease to
be an Employee in the case of (i) any leave of absence approved by the
Company or (ii) transfers between locations of the Company or between the
Company, its Parent, any Subsidiary, or any successor. For purposes of
Incentive Stock Options, no such leave may exceed ninety days, unless
reemployment upon expiration of such leave is guaranteed by statute or contract.
If reemployment upon expiration of a leave of absence approved by the Company
is not so guaranteed, on the 181st day of such leave any Incentive Stock Option
held by the Optionee shall cease to be treated as an Incentive Stock Option and
shall be treated for tax purposes as a Nonstatutory Stock Option. Neither
service as a Director nor payment of a director’s fee by the Company shall be
sufficient to constitute “employment” by the Company.

 

2.12.                        “Exchange
Act” means the Securities Exchange Act of 1934, as amended.

 

2.13.                        “Fair Market
Value” means, as of any date, the value of Common Stock determined as
follows:

 

2.13.1.               If the Common Stock
is listed on any established stock exchange or a national market system,
including without limitation the Nasdaq National Market or The Nasdaq SmallCap
Market of The Nasdaq Stock Market, its Fair Market Value shall be the closing
sales price for such stock (or the closing bid, if no sales were reported) as
quoted on such exchange or system for the last market trading day prior to the
time of determination, as reported in The Wall Street Journal
or such other source as the Administrator deems reliable;

 

2.13.2.               If the Common Stock
is regularly quoted by a recognized securities dealer but selling prices are
not reported, its Fair Market Value shall be the mean between the high bid and
low asked prices for the Common Stock on the last market trading day prior to
the day of determination; or

 

2.13.3.               In the absence of
an established market for the Common Stock, the Fair Market Value thereof shall
be determined in good faith by the Administrator.

 

2.14.                        “Incentive
Stock Option” means an Option intended to qualify as an incentive stock
option within the meaning of Section 422 of the Code.

 

2.15.                        “Nonstatutory
Stock Option” means an Option not intended to qualify as an Incentive Stock
Option.

 

2.16.                        “Officer”
means a person who is an officer of the Company within the meaning of Section
16 of the Exchange Act and the rules and regulations promulgated thereunder.

 

2.17.                        “Option”
means a stock option granted pursuant to the Plan.

 

 

2.18.                        “Option
Agreement” means a written or electronic agreement between the Company and
an Optionee evidencing the terms and conditions of an individual Option grant. The
Option Agreement is subject to the terms and conditions of the Plan.

 

2.19.                        “Option
Exchange Program” means a program whereby outstanding Options are exchanged
for Options with a lower exercise price.

 

2.20.                        “Optioned Stock”
means the Common Stock subject to an Option or a Stock Purchase Right.

 

2.21.                        “Optionee”
means the holder of an outstanding Option or Stock Purchase Right granted under
the Plan.

 

2.22.                        “Parent”
means a “parent corporation,” whether now or hereafter existing, as defined in
Section 424(e) of the Code.

 

2.23.                        “Plan”
means this 1998 Stock Plan.

 

2.24.                        “Restricted
Stock” means shares of Common Stock acquired pursuant to a grant of a Stock
Purchase Right under Section 11 below.

 

2.25.                        “Section
16(b)” means Section 16(b) of the Securities Exchange Act of 1934, as
amended.

 

2.26.                        “Service
Provider”  means an Employee,
Director or Consultant.

 

2.27.                        “Share”
means a share of the Common Stock, as adjusted in accordance with Section 12
below.

 

2.28.                        “Stock
Purchase Right” means a right to purchase Common Stock pursuant to Section
11 below.

 

2.29.                        “Subsidiary”
means a “subsidiary corporation,” whether now or hereafter existing, as defined
in Section 424(f) of the Code.

 

3.                                       Stock Subject to the Plan.
Subject to the provisions of Section 12 of the Plan, the maximum aggregate
number of Shares which may be subject to option and sold under the Plan is
9,080,000 Shares. The Shares may be authorized but unissued, or reacquired
Common Stock.

 

If an Option or Stock
Purchase Right expires or becomes unexercisable without having been exercised
in full, or is surrendered pursuant to an Option Exchange Program, the
unpurchased Shares which were subject thereto shall become available for future
grant or sale under the Plan (unless the Plan has terminated). However, Shares
that have actually been issued under the Plan, upon exercise of either an
Option or Stock Purchase Right, shall not be returned to the Plan and shall not
become available for future distribution under the Plan, except that if Shares
of Restricted Stock

 

 

are repurchased by the Company at their original purchase
price, such Shares shall become available for future grant under the Plan.

 

4.                                       Administration of the Plan.

 

4.1.                              Administrator.
The Plan shall be administered by the Board or a Committee appointed by the
Board, which Committee shall be constituted to comply with Applicable Laws.

 

4.2.                              Powers of the Administrator.
Subject to the provisions of the Plan and, in the case of a Committee, the
specific duties delegated by the Board to such Committee, and subject to the
approval of any relevant authorities, the Administrator shall have the
authority in its discretion:

 

4.2.1.                     to determine
the Fair Market Value;

 

4.2.2.                     to select the
Service Providers to whom Options and Stock Purchase Rights may from time to
time be granted hereunder;

 

4.2.3.                     to determine
the number of Shares to be covered by each such award granted hereunder;

 

4.2.4.                     to approve
forms of agreement for use under the Plan;

 

4.2.5.                     to determine
the terms and conditions, of any Option or Stock Purchase Right granted
hereunder. Such terms and conditions include, but are not limited to, the
exercise price, the time or times when Options or Stock Purchase Rights may be
exercised (which may be based on performance criteria), any vesting
acceleration or waiver of forfeiture restrictions, and any restriction or
limitation regarding any Option or Stock Purchase Right or the Common Stock
relating thereto, based in each case on such factors as the Administrator, in
its sole discretion, shall determine;

 

4.2.6.                     to determine
whether and under what circumstances an Option may be settled in cash under
subsection 9(e) instead of Common Stock;

 

4.2.7.                     to reduce the
exercise price of any Option to the then current Fair Market Value if the Fair
Market Value of the Common Stock covered by such Option has declined since the
date the Option was granted;

 

4.2.8.                     to initiate
an Option Exchange Program;

 

4.2.9.                     to prescribe,
amend and rescind rules and regulations relating to the Plan, including rules
and regulations relating to sub-plans established for the purpose of qualifying
for preferred tax treatment under foreign tax laws;

 

4.2.10.               to allow Optionees
to satisfy withholding tax obligations by electing to have the Company withhold
from the Shares to be issued upon exercise of an Option or Stock

 

 

Purchase Right that number of Shares having a Fair
Market Value equal to the amount required to be withheld. The Fair Market Value
of the Shares to be withheld shall be determined on the date that the amount of
tax to be withheld is to be determined. All elections by Optionees to have
Shares withheld for this purpose shall be made in such form and under such
conditions as the Administrator may deem necessary or advisable; and

 

4.2.11.               to construe and
interpret the terms of the Plan and awards granted pursuant to the Plan.

 

4.3.                              Effect of Administrator’s
Decision. All decisions, determinations and interpretations of the
Administrator shall be final and binding on all Optionees.

 

5.                                       Eligibility.

 

5.1.                              Nonstatutory
Stock Options and Stock Purchase Rights may be granted to Service Providers. Incentive
Stock Options may be granted only to Employees.

 

5.2.                              Each
Option shall be designated in the Option Agreement as either an Incentive Stock
Option or a Nonstatutory Stock Option. However, notwithstanding such
designation, to the extent that the aggregate Fair Market Value of the Shares
with respect to which Incentive Stock Options are exercisable for the first
time by the Optionee during any calendar year (under all plans of the Company
and any Parent or Subsidiary) exceeds $100,000, such Options shall be treated
as Nonstatutory Stock Options. For purposes of this Section 5(b),
Incentive Stock Options shall be taken into account in the order in which they
were granted. The Fair Market Value of the Shares shall be determined as of the
time the Option with respect to such Shares is granted.

 

5.3.                              Neither
the Plan nor any Option or Stock Purchase Right shall confer upon any Optionee
any right with respect to continuing the Optionee’s relationship as a Service
Provider with the Company, nor shall it interfere in any way with his or her
right or the Company’s right to terminate such relationship at any time, with
or without cause.

 

6.                                       Term of Plan.
The Plan shall become effective upon its adoption by the Board. It shall
continue in effect for a term of ten (10) years unless sooner terminated under
Section 14 of the Plan.

 

7.                                       Term
of Option. The term of each Option shall be stated in the Option Agreement;
provided, however, that the term shall be no more than ten (10) years from
the date of grant thereof. In the case of an Incentive Stock Option granted to
an Optionee who, at the time the Option is granted, owns stock representing
more than ten percent (10%) of the voting power of all classes of stock of the
Company or any Parent or Subsidiary, the term of the Option shall be five (5)
years from the date of grant or such shorter term as may be provided in the
Option Agreement.

 

 

8.                                       Option
Exercise Price and Consideration.

 

8.1.                              The
per share exercise price for the Shares to be issued upon exercise of an Option
shall be such price as is determined by the Administrator, but shall be subject
to the following:

 

8.1.1.                     In the case
of an Incentive Stock Option

 

8.1.1.1.            granted to an Employee
who, at the time of grant of such Option, owns stock representing more than ten
percent (10%) of the voting power of all classes of stock of the Company or any
Parent or Subsidiary, the exercise price shall be no less than 110% of the Fair
Market Value per Share on the date of grant.

 

8.1.1.2.            granted to any other Employee,
the per Share exercise price shall be no less than 100% of the Fair Market
Value per Share on the date of grant.

 

8.1.2.                     In the case
of a Nonstatutory Stock Option

 

8.1.2.1.            granted to a Service
Provider who, at the time of grant of such Option, owns stock representing more
than ten percent (10%) of the voting power of all classes of stock of the
Company or any Parent or Subsidiary, the exercise price shall be no less than
110% of the Fair Market Value per Share on the date of grant.

 

8.1.2.2.            granted to any other
Service Provider, the per Share exercise price shall be no less than 85% of the
Fair Market Value per Share on the date of grant.

 

8.1.3.                     Notwithstanding
the foregoing, Options may be granted with a per Share exercise price other
than as required above pursuant to a merger or other corporate transaction.

 

8.2.                              The
consideration to be paid for the Shares to be issued upon exercise of an
Option, including the method of payment, shall be determined by the
Administrator (and, in the case of an Incentive Stock Option, shall be
determined at the time of grant). Such consideration  may consist of (1) cash, (2) check,
(3) promissory note, (4) other Shares which (x) in the case of
Shares acquired upon exercise of an Option, have been owned by the Optionee for
more than six months on the date of surrender, and (y) have a Fair Market
Value on the date of surrender equal to the aggregate exercise price of the
Shares as to which such Option shall be exercised, (5) consideration received
by the Company under a cashless exercise program implemented by the Company in
connection with the Plan, or (6) any combination of the foregoing methods
of payment. In making its determination as to the type of consideration to
accept, the Administrator shall consider if acceptance of such consideration
may be reasonably expected to benefit the Company.

 

9.                                       Exercise of Option.

 

9.1.                              Procedure for Exercise;
Rights as a Shareholder. Any Option granted hereunder shall be exercisable
according to the terms hereof at such times and under such conditions as
determined by the Administrator and set forth in the Option Agreement. Except
in the case of Options granted to Officers, Directors and Consultants, Options
shall become exercisable at a rate of

 

 

no less than 20% per year over five (5) years from the
date the Options are granted. Unless the Administrator provides otherwise,
vesting of Options granted hereunder shall be tolled during any unpaid leave of
absence. An Option may not be exercised for a fraction of a Share.

 

An Option shall be deemed
exercised when the Company receives: (i) written or electronic notice of
exercise (in accordance with the Option Agreement) from the person entitled to
exercise the Option, and (ii) full payment for the Shares with respect to which
the Option is exercised. Full payment may consist of any consideration and
method of payment authorized by the Administrator and permitted by the Option
Agreement and the Plan. Shares issued upon exercise of an Option shall be
issued in the name of the Optionee or, if requested by the Optionee, in the
name of the Optionee and his or her spouse. Until the Shares are issued (as
evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company), no right to vote or receive
dividends or any other rights as a shareholder shall exist with respect to the
Shares, notwithstanding the exercise of the Option. The Company shall issue (or
cause to be issued) such Shares promptly after the Option is exercised. No
adjustment will be made for a dividend or other right for which the record date
is prior to the date the Shares are issued, except as provided in
Section 12 of the Plan.

 

Exercise of an Option in
any manner shall result in a decrease in the number of Shares thereafter available,
both for purposes of the Plan and for sale under the Option, by the number of
Shares as to which the Option is exercised.

 

9.2.                              Termination of
Relationship as a Service Provider. If an Optionee ceases to be a Service
Provider, such Optionee may exercise his or her Option within such period of
time as is specified in the Option Agreement (of at least thirty (30) days) to
the extent that the Option is vested on the date of termination (but in no
event later than the expiration of the term of the Option as set forth in the
Option Agreement). In the absence of a specified time in the Option Agreement,
the Option shall remain exercisable for three (3) months following the Optionee’s
termination. If, on the date of termination, the Optionee is not vested as to
his or her entire Option, the Shares covered by the unvested portion of the
Option shall revert to the Plan. If, after termination, the Optionee does not
exercise his or her Option within the time specified by the Administrator, the
Option shall terminate, and the Shares covered by such Option shall revert to
the Plan.

 

9.3.                              Disability
of Optionee. If an Optionee ceases to be a Service Provider as a result of
the Optionee’s Disability, the Optionee may exercise his or her Option within
such period of time as is specified in the Option Agreement (of at least six
(6) months) to the extent the Option is vested on the date of termination (but
in no event later than the expiration of the term of such Option as set forth
in the Option Agreement). In the absence of a specified time in the Option
Agreement, the Option shall remain exercisable for twelve (12) months following
the Optionee’s termination. If, on the date of termination, the Optionee is not
vested as to his or her entire Option, the Shares covered by the unvested
portion of the Option shall revert to the Plan. If, after termination, the
Optionee does not exercise his or her Option within the time specified herein,
the Option shall terminate, and the Shares covered by such Option shall revert
to the Plan.

 

 

9.4.                              Death of Optionee.
If an Optionee dies while a Service Provider, the Option may be exercised
within such period of time as is specified in the Option Agreement (of at least
six (6) months) to the extent that the Option is vested on the date of death
(but in no event later than the expiration of the term of such Option as set
forth in the Option Agreement) by the Optionee’s estate or by a person who
acquires the right to exercise the Option by bequest or inheritance. In the
absence of a specified time in the Option Agreement, the Option shall remain
exercisable for twelve (12) months following the Optionee’s termination. If, at
the time of death, the Optionee is not vested as to the entire Option, the
Shares covered by the unvested portion of the Option shall immediately revert
to the Plan. If the Option is not so exercised within the time specified
herein, the Option shall terminate, and the Shares covered by such Option shall
revert to the Plan.

 

9.5.                              Buyout
Provisions. The Administrator may at any time offer to buy out for a
payment in cash or Shares, an Option previously granted, based on such terms
and conditions as the Administrator shall establish and communicate to the
Optionee at the time that such offer is made.

 

10.                                 Non-Transferability of Options
and Stock Purchase Rights. The Options and Stock Purchase Rights may not be
sold, pledged, assigned, hypothecated, transferred, or disposed of in any
manner other than by will or by the laws of descent or distribution and may be
exercised, during the lifetime of the Optionee, only by the Optionee.

 

11.                                 Stock
Purchase Rights.

 

11.1.                        Rights
to Purchase. Stock Purchase Rights may be issued either alone, in addition
to, or in tandem with other awards granted under the Plan and/or cash awards
made outside of the Plan. After the Administrator determines that it will offer
Stock Purchase Rights under the Plan, it shall advise the offeree in writing or
electronically of the terms, conditions and restrictions related to the offer,
including the number of Shares that such person shall be entitled to purchase,
the price to be paid, and the time within which such person must accept such
offer. The terms of the offer shall comply in all respects with Section
260.140.42 of Title 10 of the California Code of Regulations. The offer shall
be accepted by execution of a Restricted Stock purchase agreement in the form
determined by the Administrator.

 

11.2.                        Repurchase
Option. Unless the Administrator determines otherwise, the Restricted Stock
purchase agreement shall grant the Company a repurchase option exercisable upon
the voluntary or involuntary termination of the purchaser’s service with the
Company for any reason (including death or disability). The purchase price for
Shares repurchased pursuant to the Restricted Stock purchase agreement shall be
the original price paid by the purchaser and may be paid by cancellation of any
indebtedness of the purchaser to the Company. The repurchase option shall lapse
at such rate as the Administrator may determine. Except with respect to Shares
purchased by Officers, Directors and Consultants, the repurchase option shall
in no case lapse at a rate of less than 20% per year over five (5) years from
the date of purchase.

 

11.3.                        Other
Provisions. The Restricted Stock purchase agreement shall contain such
other terms, provisions and conditions not inconsistent with the Plan as may be
determined by the Administrator in its sole discretion.

 

 

11.4.                        Rights
as a Shareholder. Once the Stock Purchase Right is exercised, the purchaser
shall have rights equivalent to those of a shareholder and shall be a
shareholder when his or her purchase is entered upon the records of the duly
authorized transfer agent of the Company. No adjustment shall be made for a
dividend or other right for which the record date is prior to the date the
Stock Purchase Right is exercised, except as provided in Section 12 of the
Plan.

 

12.                                 Adjustments Upon Changes in Capitalization,
Merger or Asset Sale.

 

12.1.                        Changes
in Capitalization. Subject to any required action by the shareholders of
the Company, the number of shares of Common Stock covered by each outstanding
Option or Stock Purchase Right, and the number of shares of Common Stock which
have been authorized for issuance under the Plan but as to which no Options or
Stock Purchase Rights have yet been granted or which have been returned to the
Plan upon cancellation or expiration of an Option or Stock Purchase Right, as
well as the price per share of Common Stock covered by each such outstanding
Option or Stock Purchase Right, shall be proportionately adjusted for any
increase or decrease in the number of issued shares of Common Stock resulting
from a stock split, reverse stock split, stock dividend, combination or
reclassification of the Common Stock, or any other increase or decrease in the
number of issued shares of Common Stock effected without receipt of
consideration by the Company. The conversion of any convertible securities of
the Company shall not be deemed to have been “effected without receipt of
consideration.”  Such adjustment shall be
made by the Board, whose determination in that respect shall be final, binding
and conclusive. Except as expressly provided herein, no issuance by the Company
of shares of stock of any class, or securities convertible into shares of stock
of any class, shall affect, and no adjustment by reason thereof shall be made
with respect to, the number or price of shares of Common Stock subject to an
Option or Stock Purchase Right.

 

12.2.                        Dissolution
or Liquidation. In the event of the proposed dissolution or liquidation of
the Company, the Administrator shall notify each Optionee as soon as
practicable prior to the effective date of such proposed transaction. The
Administrator in its discretion may provide for an Optionee to have the right
to exercise his or her Option or Stock Purchase Right until fifteen (15) days
prior to such transaction as to all of the Optioned Stock covered thereby,
including Shares as to which the Option or Stock Purchase Right would not
otherwise be exercisable. In addition, the Administrator may provide that any
Company repurchase option applicable to any Shares purchased upon exercise of
an Option or Stock Purchase Right shall lapse as to all such Shares, provided
the proposed dissolution or liquidation takes place at the time and in the
manner contemplated. To the extent it has not been previously exercised, an
Option or Stock Purchase Right will terminate immediately prior to the
consummation of such proposed action.

 

12.3.                        Merger
or Asset Sale. In the event of a merger of the Company with or into another
corporation, or the sale of substantially all of the assets of the Company,
each outstanding Option and Stock Purchase Right shall be assumed or an
equivalent option or right substituted by the successor corporation or a Parent
or Subsidiary of the successor corporation. In the event that the successor
corporation refuses to assume or substitute for the Option or Stock Purchase
Right, the Optionee shall fully vest in and have the right to exercise the Option
or Stock Purchase Right as to

 

 

all of the Optioned Stock, including Shares as to
which it would not otherwise be vested or exercisable. If an Option or Stock
Purchase Right becomes fully vested and exercisable in lieu of assumption or
substitution in the event of a merger or sale of assets, the Administrator
shall notify the Optionee in writing or electronically that the Option or Stock
Purchase Right shall be fully exercisable for a period of fifteen (15) days
from the date of such notice, and the Option or Stock Purchase Right shall
terminate upon the expiration of such period. For the purposes of this
paragraph, the Option or Stock Purchase Right shall be considered assumed if,
following the merger or sale of assets, the option or right confers the right
to purchase or receive, for each Share of Optioned Stock subject to the Option
or Stock Purchase Right immediately prior to the merger or sale of assets, the
consideration (whether stock, cash, or other securities or property) received
in the merger or sale of assets by holders of Common Stock for each Share held
on the effective date of the transaction (and if holders were offered a choice
of consideration, the type of consideration chosen by the holders of a majority
of the outstanding Shares); provided, however, that if such consideration
received in the merger or sale of assets is not solely common stock of the
successor corporation or its Parent, the Administrator may, with the consent of
the successor corporation, provide for the consideration to be received upon
the exercise of the Option or Stock Purchase Right, for each Share of Optioned
Stock subject to the Option or Stock Purchase Right, to be solely common stock
of the successor corporation or its Parent equal in fair market value to the per
share consideration received by holders of Common Stock in the merger or sale
of assets.

 

13.                                 Time of Granting Options
and Stock Purchase Rights. The date of grant of an Option or Stock Purchase
Right shall, for all purposes, be the date on which the Administrator makes the
determination granting such Option or Stock Purchase Right, or such other date
as is determined by the Administrator. Notice of the determination shall be
given to each Employee to whom an Option or Stock Purchase Right is so granted
within a reasonable time after the date of such grant.

 

14.                                 Amendment and Termination of the Plan.

 

14.1.                        Amendment
and Termination. The Board may at any time amend, alter, suspend or
terminate the Plan.

 

14.2.                        Shareholder
Approval. The Board shall obtain shareholder approval of any Plan amendment
to the extent necessary and desirable to comply with Applicable Laws.

 

14.3.                        Effect of Amendment or Termination.
No amendment, alteration, suspension or termination of the Plan shall impair
the rights of any Optionee, unless mutually agreed otherwise between the
Optionee and the Administrator, which agreement must be in writing and signed
by the Optionee and the Company. Termination of the Plan shall not affect the
Administrator’s ability to exercise the powers granted to it hereunder with
respect to Options granted under the Plan prior to the date of such
termination.

 

15.                                 Conditions Upon Issuance of Shares.

 

15.1.                        Legal
Compliance. Shares shall not be issued pursuant to the exercise of an
Option  unless the exercise of such
Option and the issuance and delivery of such Shares shall comply

 

 

with Applicable Laws and shall be further subject to
the approval of counsel for the Company with respect to such compliance.

 

15.2.                        Investment
Representations. As a condition to the exercise of an Option, the
Administrator may require the person exercising such Option to represent and
warrant at the time of any such exercise that the Shares are being purchased
only for investment and without any present intention to sell or distribute
such Shares if, in the opinion of counsel for the Company, such a
representation is required.

 

16.                                 Inability
to Obtain Authority. The inability of the Company to obtain authority from
any regulatory body having jurisdiction, which authority is deemed by the
Company’s counsel to be necessary to the lawful issuance and sale of any Shares
hereunder, shall relieve the Company of any liability in respect of the failure
to issue or sell such Shares as to which such requisite authority shall not
have been obtained.

 

17.                                 Reservation of Shares.
The Company, during the term of this Plan, shall at all times reserve and keep
available such number of Shares as shall be sufficient to satisfy the
requirements of the Plan.

 

18.                                 Shareholder
Approval. The Plan shall be subject to approval by the shareholders of the
Company within twelve (12) months after the date the Plan is adopted. Such
shareholder approval shall be obtained in the degree and manner required under
Applicable Laws.

 

19.                                 Information
to Optionees and Purchasers. The Company shall provide to each Optionee and
to each individual who acquires Shares pursuant to the Plan, not less
frequently than annually during the period such Optionee or purchaser has one
or more Options or Stock Purchase Rights outstanding, and, in the case of an
individual who acquires Shares pursuant to the Plan, during the period such
individual owns such Shares, copies of annual financial statements. The Company
shall not be required to provide such statements to key employees whose duties
in connection with the Company assure their access to equivalent information.

 

 

EXPRESSION
DIAGNOSTICS, INC.

 

1998
STOCK PLAN

 

STOCK
OPTION AGREEMENT

 

Unless otherwise defined
herein, the terms defined in the Plan shall have the same defined meanings in
this Option Agreement.

 

	
  I. NOTICE
  OF STOCK OPTION GRANT

  
	
   

  
	
  Name:

  	
  <<Optionee>>

  	
   

  
	
   

  
	
  Address:

  	
  <<Address_1>>

  	
   

  
	
   

  	
  <<Address_2>>

  	
   

  
				

 

The undersigned Optionee
has been granted an Option to purchase Common Stock of the Company, subject to
the terms and conditions of the Plan and this Option Agreement, as follows:

 

Date of Grant                                                                                                                                                                         <<Grantdate>>                                                                                                                                                                

 

Vesting Commencement Date                                                                                    <<Vestdate>>                                                                                                                                                                     

 

Exercise Price per Share                                                                                                                   $<<Price>>                                                                                                                                                                                                                                    

 

Total Number of Shares
Granted                                                                     <<Shares>>                                                                                                                                                                                

 

Total Exercise Price                                                                                                                                         $<<Total>>                                                                                                                                                                                  

 

Type of Option:                                                                                                                                                           x                                  Incentive
Stock Option

 

                                                                                                                                                                                                                                                o                                    Nonstatutory
Stock Option

 

Term/Expiration Date:                                                                                                                             <<Expiration>>                                                                                                                                                               

 

Vesting Schedule:

 

This Option shall be
exercisable, in whole or in part, according to the following vesting schedule:

 

Twenty-five percent (25%)
of the Shares subject to this Option shall vest on the one year anniversary of
the Vesting Commencement Date and 1/48th of the total amount of the Shares
subject to this Option shall vest each month thereafter, subject to the Optionee’s
continuing to be a Service Provider on such dates such that 100% of the
Optioned Stock shall be vested after four years.

 

 

Termination Period:

 

This Option shall be
exercisable for three months after Optionee ceases to be a Service Provider. Upon
Optionee’s death or disability, this Option may be exercised for one year after
Optionee ceases to be a Service Provider. In no event may Optionee exercise
this Option after the Term/Expiration Date as provided above.

 

II.                                     AGREEMENT

 

1.                                       Grant
of Option. The Plan Administrator of the Company hereby grants to the
Optionee named in the Notice of Grant (the “Optionee”), an option (the “Option”)
to purchase the number of Shares set forth in the Notice of Grant, at the
exercise price per Share set forth in the Notice of Grant (the “Exercise Price”),
and subject to the terms and conditions of the Plan, which is incorporated
herein by reference. Subject to Section [14(c)] of the Plan, in the event of a
conflict between the terms and conditions of the Plan and this Option
Agreement, the terms and conditions of the Plan shall prevail.

 

If designated in the
Notice of Grant as an Incentive Stock Option (“ISO”), this Option is intended
to qualify as an Incentive Stock Option as defined in Section 422 of the
Code. Nevertheless, to the extent that it exceeds the $100,000 rule of Code
Section 422(d), this Option shall be treated as a Nonstatutory Stock Option (“NSO”).

 

2.                                       Exercise
of Option.

 

                                                (a)                                  Right
to Exercise. This Option shall be exercisable during its term in accordance
with the Vesting Schedule set out in the Notice of Grant and with the
applicable provisions of the Plan and this Option Agreement.

 

(b)                                       Method
of Exercise. This Option shall be exercisable by delivery of an exercise
notice in the form attached as Exhibit A (the AExercise
Notice@) which shall state the election to
exercise the Option, the number of Shares with respect to which the Option is
being exercised, and such other representations and agreements as may be
required by the Company. The Exercise Notice shall be accompanied by payment of
the aggregate Exercise Price as to all Exercised Shares. This Option shall be
deemed to be exercised upon receipt by the Company of such fully executed
Exercise Notice accompanied by the aggregate Exercise Price.

 

No Shares shall be issued
pursuant to the exercise of an Option unless such issuance and such exercise
complies with Applicable laws. Assuming such compliance, for income tax
purposes the Shares shall be considered transferred to the Optionee on the date
on which the Option is exercised with respect to such Shares.

 

3.                                       Optionee’s
Representations. In the event the Shares have not been registered under the
Securities Act of 1933, as amended, at the time this Option is exercised, the
Optionee shall, if required by the Company, concurrently with the exercise of
all or any portion of this Option, deliver to the

 

 

Company his or her
Investment Representation Statement in the form attached hereto as
Exhibit B, and shall read the applicable rules of the Commissioner of Corporations
attached to such Investment Representation Statement.

 

4.                                       Lock-Up
Period. Optionee hereby agrees that, if so requested by the Company or any
representative of the underwriters (the “Managing Underwriter”) in connection
with any registration of the offering of any securities of the Company under
the Securities Act, Optionee shall not sell or otherwise transfer any
Shares or other securities of the Company during the 180-day period (or such
other period as may be requested in writing by the Managing Underwriter and
agreed to in writing by the Company) (the “Market Standoff Period”) following
the effective date of a registration statement of the Company filed under the
Securities Act. Such restriction shall apply only  to the first registration statement of the
Company to become effective under the Securities Act that includes securities
to be sold on behalf of the Company to the public in an underwritten public
offering under the Securities Act. The Company may impose stop-transfer
instructions with respect to securities subject to the foregoing restrictions
until the end of such Market Standoff Period.

 

5.                                       Method
of Payment. Payment of the aggregate Exercise Price shall be by any of the
following, or a combination thereof, at the election of the Optionee:

 

(a)                                        cash
or check;

 

(b)                                        consideration
received by the Company under a formal cashless exercise program adopted by the
Company in connection with the Plan; or

 

(c)                                         surrender of
other Shares which, (i) in the case of Shares acquired upon exercise of an
option, have been owned by the Optionee for more than six (6) months on the
date of surrender, and (ii) have a Fair Market Value on the date of surrender
equal to the aggregate Exercise Price of the Exercised Shares.

 

6.                                       Restrictions
on Exercise. This Option may not be exercised until such time as the Plan
has been approved by the shareholders of the Company, or if the issuance of
such Shares upon such exercise or the method of payment of consideration for
such shares would constitute a violation of any Applicable Law.

 

7.                                       Non-Transferability
of Option. This Option may not be transferred in any manner otherwise than
by will or by the laws of descent or distribution and may be exercised during
the lifetime of Optionee only by Optionee. The terms of the Plan and this
Option Agreement shall be binding upon the executors, administrators, heirs,
successors and assigns of the Optionee.

 

8.                                       Term
of Option. This Option may be exercised only within the term set out in the
Notice of Grant, and may be exercised during such term only in accordance with
the Plan and the terms of this Option.

 

 

9.                                       Tax
Consequences. Set forth below is a brief summary as of the date of this
Option of some of the federal tax consequences of exercise of this Option and
disposition of the Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX
LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE OPTIONEE SHOULD CONSULT A TAX
ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.

 

(a)                                        Exercise
of ISO. If this Option qualifies as an ISO, there will be no regular
federal income tax liability upon the exercise of the Option, although the
excess, if any, of the Fair Market Value of the Shares on the date of exercise
over the Exercise Price will be treated as an adjustment to the alternative
minimum tax for federal tax purposes and may subject the Optionee to the
alternative minimum tax in the year of exercise.

 

(b)                                       Exercise
of Nonstatutory Stock Option. There may be a regular federal income tax
liability upon the exercise of a Nonstatutory Stock Option. The Optionee will
be treated as having received compensation income (taxable at ordinary income
tax rates) equal to the excess, if any, of the Fair Market Value of the Shares
on the date of exercise over the Exercise Price. If Optionee is an Employee or
a former Employee, the Company will be required to withhold from Optionee’s
compensation or collect from Optionee and pay to the applicable taxing
authorities an amount in cash equal to a percentage of this compensation income
at the time of exercise, and may refuse to honor the exercise and refuse to
deliver Shares if such withholding amounts are not delivered at the time of
exercise.

 

(c)                                         Disposition
of Shares. In the case of an NSO, if Shares are held for at least one year,
any gain realized on disposition of the Shares will be treated as long-term
capital gain for federal income tax purposes. In the case of an ISO, if Shares
transferred pursuant to the Option are held for at least one year after
exercise and of at least two years after the Date of Grant, any gain realized
on disposition of the Shares will also be treated as long-term capital gain for
federal income tax purposes. If Shares purchased under an ISO are disposed of
within one year after exercise or two years after the Date of Grant, any gain
realized on such disposition will be treated as compensation income (taxable at
ordinary income rates) to the extent of the difference between the Exercise
Price and the lesser of (1) the Fair Market Value of the Shares on the date of
exercise, or (2) the sale price of the Shares. Any additional gain will be
taxed as capital gain, short-term or long-term depending on the period that the
ISO Shares were held.

 

(d)                                        Notice of
Disqualifying Disposition of ISO Shares. If the Option granted to Optionee
herein is an ISO, and if Optionee sells or otherwise disposes of any of the
Shares acquired pursuant to the ISO on or before the later of (1) the date
two years after the Date of Grant, or (2) the date one year after the date
of exercise, the Optionee shall immediately notify the Company in writing of
such disposition. Optionee agrees that Optionee may be subject to income tax
withholding by the Company on the compensation income recognized by the
Optionee.

 

10.                                 Entire
Agreement; Governing Law. The Plan is incorporated herein by reference. The
Plan and this Option Agreement constitute the entire agreement of the parties
with respect to the subject

 

 

matter hereof and
supersede in their entirety all prior undertakings and agreements of the
Company and Optionee with respect to the subject matter hereof, and may not be
modified adversely to the Optionee’s interest except by means of a writing
signed by the Company and Optionee. This agreement is governed by the internal
substantive laws but not the choice of law rules of California.

 

11.                                 No
Guarantee of Continued Service. OPTIONEE ACKNOWLEDGES AND AGREES THAT THE
VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED ONLY BY
CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY (NOT THROUGH THE
ACT OF BEING HIRED, BEING GRANTED THIS OPTION OR ACQUIRING SHARES HEREUNDER). OPTIONEE
FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE TRANSACTIONS
CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT
CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE
PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL NOT
INTERFERE IN ANY WAY WITH OPTIONEE’S RIGHT OR THE COMPANY’S RIGHT TO TERMINATE
OPTIONEE’S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT
CAUSE.

 

Optionee acknowledges
receipt of a copy of the Plan and represents that he or she is familiar with
the terms and provisions thereof, and hereby accepts this Option subject to all
of the terms and provisions thereof. Optionee has reviewed the Plan and this
Option in their entirety, has had an opportunity to obtain the advice of
counsel prior to executing this Option and fully understands all provisions of
the Option. Optionee hereby agrees to accept as binding, conclusive and final
all decisions or interpretations of the Administrator upon any questions
arising under the Plan or this Option. Optionee further agrees to notify the
Company upon any change in the residence address indicated below.

 

	
  OPTIONEE

  	
   

  	
  EXPRESSION DIAGNOSTICS,
  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  <<Optionee>>

  	
   

  	
  By

  
	
   

  	
   

  	
   

  
	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  <<Address_1>>

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title

  
	
   

  	
   

  	
   

  
	
  <<Address_2>>

  	
   

  	
   

  	
   

  
							

 

[Option
Agreement Signature Page]

 

 

EXHIBIT A

 

1998
STOCK PLAN

 

 

EXERCISE
NOTICE

 

Expression Diagnostics,
Inc.

750 Gateway Blvd. Suite H

South San Francisco, CA
94080

Attention:  President

 

1.                                       Exercise
of Option. Effective as of today,               ,
20   , the undersigned (“Optionee”) hereby elects to exercise
Optionee’s option to purchase              
shares of the Common Stock (the “Shares”) of Expression Diagnostics, Inc. (the “Company”)
under and pursuant to the 1998 Stock Plan (the “Plan”) and the Stock Option
Agreement dated «Grantdate» (the “Option
Agreement”).

 

2.                                       Delivery
of Payment. Purchaser herewith delivers to the Company the full purchase
price of the Shares, as set forth in the Option Agreement.

 

3.                                       Representations
of Optionee. Optionee acknowledges that Optionee has received, read and
understood the Plan and the Option Agreement and agrees to abide by and be
bound by their terms and conditions.

 

4.                                       Rights
as Shareholder. Until the issuance of the Shares (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company), no right to vote or receive dividends or any other
rights as a shareholder shall exist with respect to the Optioned Stock,
notwithstanding the exercise of the Option. The Shares shall be issued to the
Optionee as soon as practicable after the Option is exercised. No adjustment
shall be made for a dividend or other right for which the record date is prior
to the date of issuance except as provided in Section 12 of the Plan.

 

5.                                       Company’s
Right of First Refusal. Before any Shares held by Optionee or any
transferee (either being sometimes referred to herein as the “Holder”) may be
sold or otherwise transferred (including transfer by gift or operation of law),
the Company or its assignee(s) shall have a right of first refusal to purchase
the Shares on the terms and conditions set forth in this Section (the “Right of
First Refusal”).

 

(a)                                        Notice
of Proposed Transfer. The Holder of the Shares shall deliver to the Company
a written notice (the “Notice”) stating: 
(i) the Holder’s bona fide intention to sell or otherwise transfer
such Shares; (ii) the name of each proposed purchaser or other transferee
(“Proposed Transferee”); (iii) the number of Shares to be transferred to
each Proposed Transferee; and (iv) the bona fide cash price or other
consideration for which the Holder proposes to transfer the Shares (the “Offered
Price”), and the Holder shall offer the Shares at the Offered Price to the
Company or its assignee(s).

 

(b)                                       Exercise
of Right of First Refusal. At any time within thirty (30) days after
receipt of the Notice, the Company and/or its assignee(s) may, by giving
written notice to the Holder, elect to

 

 

purchase all, but not
less than all, of the Shares proposed to be transferred to any one or more of
the Proposed Transferees, at the purchase price determined in accordance with
subsection (c) below.

 

(c)                                        Purchase
Price. The purchase price (“Purchase Price”) for the Shares purchased by
the Company or its assignee(s) under this Section shall be the Offered Price. If
the Offered Price includes consideration other than cash, the cash equivalent
value of the non-cash consideration shall be determined by the Board of
Directors of the Company in good faith.

 

(d)                                       Payment.
Payment of the Purchase Price shall be made, at the option of the Company or
its assignee(s), in cash (by check), by cancellation of all or a portion of any
outstanding indebtedness of the Holder to the Company (or, in the case of
repurchase by an assignee, to the assignee), or by any combination thereof
within 30 days after receipt of the Notice or in the manner and at the times
set forth in the Notice.

 

(e)                                        Holder’s
Right to Transfer. If all of the Shares proposed in the Notice to be
transferred to a given Proposed Transferee are not purchased by the Company
and/or its assignee(s) as provided in this Section, then the Holder may sell or
otherwise transfer such Shares to that Proposed Transferee at the Offered Price
or at a higher price, provided that such sale or other transfer is consummated
within 120 days after the date of the Notice, that any such sale or other
transfer is effected in accordance with any applicable securities laws and that
the Proposed Transferee agrees in writing that the provisions of this Section
shall continue to apply to the Shares in the hands of such Proposed Transferee.
If the Shares described in the Notice are not transferred to the Proposed
Transferee within such period, a new Notice shall be given to the Company, and
the Company and/or its assignees shall again be offered the Right of First
Refusal before any Shares held by the Holder may be sold or otherwise transferred.

 

(f)                                          Exception
for Certain Family Transfers. Anything to the contrary contained in this
Section notwithstanding, the transfer of any or all of the Shares during the
Optionee’s lifetime or on the Optionee’s death by will or intestacy to the
Optionee’s immediate family or a trust for the benefit of the Optionee’s
immediate family shall be exempt from the provisions of this Section. “Immediate
Family” as used herein shall mean spouse, lineal descendant or antecedent,
father, mother, brother or sister. In such case, the transferee or other
recipient shall receive and hold the Shares so transferred subject to the
provisions of this Section, and there shall be no further transfer of such
Shares except in accordance with the terms of this Section.

 

(g)                                       Termination
of Right of First Refusal. The Right of First Refusal shall terminate as to
any Shares upon the first sale of Common Stock of the Company to the general
public pursuant to a registration statement filed with and declared effective
by the Securities and Exchange Commission under the Securities Act of 1933, as
amended.

 

6.                                       Tax
Consultation. Optionee understands that Optionee may suffer adverse tax
consequences as a result of Optionee’s purchase or disposition of the Shares. Optionee
represents that

 

 

Optionee has consulted
with any tax consultants Optionee deems advisable in connection with the
purchase or disposition of the Shares and that Optionee is not relying on the
Company for any tax advice.

 

7.                                       Restrictive
Legends and Stop-Transfer Orders.

 

(a)                                        Legends.
Optionee understands and agrees that the Company shall cause the legends set
forth below or legends substantially equivalent thereto, to be placed upon any
certificate(s) evidencing ownership of the Shares together with any other
legends that may be required by the Company or by state or federal securities
laws:

 

THE SECURITIES
REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
(THE “ACT”) AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR
HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR, IN THE OPINION OF
COMPANY COUNSEL SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH OFFER,
SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE THEREWITH.

 

THE SHARES REPRESENTED BY
THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AND A RIGHT OF
FIRST REFUSAL HELD BY THE ISSUER OR ITS ASSIGNEE(S) AS SET FORTH IN THE
EXERCISE NOTICE BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THESE SHARES, A
COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE ISSUER. SUCH
TRANSFER RESTRICTIONS AND RIGHT OF FIRST REFUSAL ARE BINDING ON TRANSFEREES OF
THESE SHARES.

 

(b)                                       Stop-Transfer
Notices. Optionee agrees that, in order to ensure compliance with the
restrictions referred to herein, the Company may issue appropriate “stop
transfer” instructions to its transfer agent, if any, and that, if the
Company  transfers its own securities, it
may make appropriate notations to the same effect in its own records.

 

(c)                                        Refusal
to Transfer. The Company shall not be required (i) to transfer on its
books any Shares that have been sold or otherwise transferred in violation of
any of the provisions of this Agreement or (ii) to treat as owner of such
Shares or to accord the right to vote or pay dividends to any purchaser or
other transferee to whom such Shares shall have been so transferred.

 

8.                                       Successors
and Assigns. The Company may assign any of its rights under this Agreement
to single or multiple assignees, and this Agreement shall inure to the benefit
of the successors and assigns of the Company. Subject to the restrictions on
transfer herein set forth, this Agreement shall be binding upon Optionee and
his or her heirs, executors, administrators, successors and assigns.

 

 

9.                                       Interpretation.
Any dispute regarding the interpretation of this Agreement shall be submitted
by Optionee or by the Company forthwith to the Administrator which shall review
such dispute at its next regular meeting. The resolution of such a dispute by
the Administrator shall be final and binding on all parties.

 

10.                                 Governing
Law; Severability. This Agreement is governed by the internal substantive
laws but not the choice of law rules, of the State of California.

 

[This
Space Intentionally Left Blank]

 

 

11.                                 Entire
Agreement. The Plan and Option Agreement are incorporated herein by
reference. This Agreement, the Plan, the Option Agreement and the Investment
Representation Statement constitute the entire agreement of the parties with
respect to the subject matter hereof and supersede in their entirety all prior
undertakings and agreements of the Company and Optionee with respect to the
subject matter hereof, and may not be modified adversely to the Optionee’s
interest except by means of a writing signed by the Company and Optionee.

 

	
  Submitted by:

  	
   

  	
  Accepted by:

  
	
   

  	
   

  	
   

  
	
  OPTIONEE:

  	
   

  	
  EXPRESSION DIAGNOSTICS,
  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  <<Optionee>>

  	
   

  	
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  Its:

  
	
   

  	
   

  	
   

  
	
  Address:

  	
   

  	
  Address:

  
	
   

  	
   

  	
   

  
	
  <<Address_1>>

  	
   

  	
  750 Gateway Blvd, Suite
  H

  
	
  <<Address_2>>

  	
   

  	
  South San Francisco, CA
  94080

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Date Received

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

[Option
Exercise Signature Page]

 

 

EXHIBIT B

 

INVESTMENT
REPRESENTATION STATEMENT

 

OPTIONEE:                                                                                 «OPTIONEE»

 

COMPANY:                                                                              EXPRESSION
DIAGNOSTICS, INC.

 

SECURITY:                                                                                  COMMON
STOCK

 

AMOUNT:

 

DATE:

 

In connection with the
purchase of the above-listed Securities, the undersigned Optionee represents to
the Company the following:

 

(a)                                        Optionee
is aware of the Company’s business affairs and financial condition and has
acquired sufficient information about the Company to reach an informed and
knowledgeable decision to acquire the Securities. Optionee is acquiring these
Securities for investment for Optionee’s own account only and not with a view
to, or for resale in connection with, any “distribution” thereof within the
meaning of the Securities Act of 1933, as amended (the “Securities Act”).

 

(b)                                       Optionee
acknowledges and understands that the Securities constitute “restricted
securities” under the Securities Act and have not been registered under the
Securities Act in reliance upon a specific exemption therefrom, which exemption
depends upon, among other things, the bona fide nature of Optionee’s investment
intent as expressed herein. In this connection, Optionee understands that, in
the view of the Securities and Exchange Commission, the statutory basis for
such exemption may be unavailable if Optionee’s representation was predicated
solely upon a present intention to hold these Securities for the minimum
capital gains period specified under tax statutes, for a deferred sale, for or
until an increase or decrease in the market price of the Securities, or for a
period of one year or any other fixed period in the future. Optionee further
understands that the Securities must be held indefinitely unless they are
subsequently registered under the Securities Act or an exemption from such
registration is available. Optionee further acknowledges and understands that
the Company is under no obligation to register the Securities. Optionee
understands that the certificate evidencing the Securities will be imprinted
with a legend which prohibits the transfer of the Securities unless they are
registered or such registration is not required in the opinion of counsel
satisfactory to the Company, a legend prohibiting their transfer without the
consent of the Commissioner of Corporations of the State of California and any
other legend required under applicable state securities laws.

 

 

(c)                                        Optionee
is familiar with the provisions of Rule 701 and Rule 144, each
promulgated under the Securities Act, which, in substance, permit limited public
resale of “restricted securities” acquired, directly or indirectly from the
issuer thereof, in a non-public offering subject to the satisfaction of certain
conditions. Rule 701 provides that if the issuer qualifies under
Rule 701 at the time of the grant of the Option to the Optionee, the
exercise will be exempt from registration under the Securities Act. In the
event the Company becomes subject to the reporting requirements of
Section 13 or 15(d) of the Securities Exchange Act of 1934, ninety (90)
days thereafter (or such longer period as any market stand-off agreement may
require) the Securities exempt under Rule 701 may be resold, subject to
the satisfaction of certain of the conditions specified by Rule 144,
including:  (1) the resale being
made through a broker in an unsolicited “broker’s transaction” or in
transactions directly with a market maker (as said term is defined under
the Securities Exchange Act of 1934); and, in the case of an affiliate,
(2) the availability of certain public information about the Company, (3)
the amount of Securities being sold during any three month period not exceeding
the limitations specified in Rule 144(e), and (4) the timely filing of a
Form 144, if applicable.

 

In the event that the
Company does not qualify under Rule 701 at the time of grant of the
Option, then the Securities may be resold in certain limited circumstances
subject to the provisions of Rule 144, which requires the resale to
occur not less than two years after the later of the date the Securities were sold
by the Company or the date the Securities were sold by an affiliate of the
Company, within the meaning of Rule 144; and, in the case of acquisition
of the Securities by an affiliate, or by a non-affiliate who subsequently holds
the Securities less than three years, the satisfaction of the conditions set
forth in sections (1), (2), (3) and (4) of the paragraph immediately above.

 

(d)                                       Optionee
further understands that in the event all of the applicable requirements of
Rule 701 or 144 are not satisfied, registration under the Securities Act,
compliance with Regulation A, or some other registration exemption will be
required; and that, notwithstanding the fact that Rules 144 and 701 are not
exclusive, the Staff of the Securities and Exchange Commission has expressed
its opinion that persons proposing to sell private placement securities other
than in a registered offering and otherwise than pursuant to Rules 144 or 701
will have a substantial burden of proof in establishing that an exemption from
registration is available for such offers or sales, and that such persons and
their respective brokers who participate in such transactions do so at their
own risk. Optionee understands that no assurances can be given that any such
other registration exemption will be available in such event.

 

(e)                                        Optionee
understands that the certificate evidencing the Securities will be imprinted
with a legend which prohibits the transfer of the Securities without the
consent of the Commissioner of Corporations of California. Optionee has read
the applicable Commissioner’s Rules with respect to such restriction, a copy of
which is attached.

 

	
   

  	
  Signature of Optionee:

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Date:

  	
   

  	
  , 20

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