Document:

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                                                                   Exhibit 4.7

                        DYNAVAX TECHNOLOGIES CORPORATION
                            SERIES T PREFERRED STOCK
                               PURCHASE AGREEMENT

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                                TABLE OF CONTENTS

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SECTION 1.     AGREEMENT TO SELL AND PURCHASE............................................................1

         1.1        AUTHORIZATION OF SHARES..............................................................1
         1.2        SALE AND PURCHASE....................................................................1

SECTION 2.     CLOSING, DELIVERY, PAYMENT, ASSIGNMENT....................................................2

         2.1        CLOSING..............................................................................2
         2.2        DELIVERY.............................................................................2

SECTION 3.     REPRESENTATIONS AND WARRANTIES OF THE COMPANY.............................................2

         3.1        ORGANIZATION, GOOD STANDING AND QUALIFICATION........................................2
         3.2        CAPITALIZATION; VOTING RIGHTS........................................................2
         3.3        AUTHORIZATION; BINDING OBLIGATIONS...................................................3
         3.4        FINANCIAL STATEMENTS.................................................................3
         3.5        AGREEMENTS; ACTION...................................................................4
         3.6        OBLIGATIONS TO RELATED PARTIES.......................................................5
         3.7        TITLE TO PROPERTIES AND ASSETS; LIENS, ETC...........................................5
         3.8        PATENTS AND TRADEMARKS...............................................................6
         3.9        COMPLIANCE WITH OTHER INSTRUMENTS....................................................6
         3.10       LITIGATION...........................................................................6
         3.11       TAX RETURNS, PAYMENTS AND ELECTIONS..................................................7
         3.12       EMPLOYEES............................................................................7
         3.13       REGISTRATION RIGHTS..................................................................8
         3.14       COMPLIANCE WITH LAWS; PERMITS........................................................8
         3.15       OFFERING VALID.......................................................................8
         3.16       ENVIRONMENTAL REQUIREMENTS...........................................................9
         3.17       ENVIRONMENTAL AND SAFETY LAWS.......................................................10
         3.18       PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT....................................10
         3.19       FULL DISCLOSURE.....................................................................10

SECTION 4.     REPRESENTATIONS AND WARRANTIES OF THE PURCHASER..........................................12

         4.1        REQUISITE POWER AND AUTHORITY.......................................................12
         4.2        INVESTMENT REPRESENTATIONS..........................................................13

SECTION 5.     CONDITIONS TO CLOSING....................................................................13

         5.1        CONDITIONS TO PURCHASER'S OBLIGATIONS AT THE CLOSING................................13
         5.2        CONDITIONS TO OBLIGATIONS OF THE COMPANY............................................13

SECTION 6.     REGISTRATION RIGHTS......................................................................13

         6.1        DEFINITIONS.........................................................................13
         6.2        PIGGYBACK REGISTRATIONS.............................................................14
         6.3        FORM S-3 REGISTRATION...............................................................15
         6.4        EXPENSES OF REGISTRATION............................................................17

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         6.5        OBLIGATIONS OF THE COMPANY..........................................................17
         6.6        TERMINATION OF REGISTRATION RIGHTS..................................................18
         6.7        DELAY OF REGISTRATION; FURNISHING INFORMATION.......................................18
         6.8        INDEMNIFICATION.....................................................................18
         6.9        ASSIGNMENT OF REGISTRATION RIGHTS...................................................21
         6.10       AMENDMENT OF REGISTRATION RIGHTS....................................................21
         6.11       "MARKET STAND-OFF"AGREEMENT.........................................................21
         6.12       RULE 144 REPORTING..................................................................22

SECTION 7.     MISCELLANEOUS............................................................................22

         7.1        GOVERNING LAW.......................................................................22
         7.2        SURVIVAL............................................................................22
         7.3        SUCCESSORS AND ASSIGNS..............................................................22
         7.4        ENTIRE AGREEMENT....................................................................22
         7.5        SEVERABILITY........................................................................23
         7.6        AMENDMENT AND WAIVER................................................................23
         7.7        DELAYS OR OMISSIONS.................................................................23
         7.8        NOTICES.............................................................................23
         7.9        EXPENSES............................................................................24
         7.10       ATTORNEYS'FEES......................................................................24
         7.11       TITLES AND SUBTITLES................................................................24
         7.12       COUNTERPARTS........................................................................24
         7.13       BROKER'S FEES.......................................................................24
         7.14       PRONOUNS............................................................................24
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                   SERIES T PREFERRED STOCK PURCHASE AGREEMENT

         THIS SERIES T PREFERRED STOCK PURCHASE AGREEMENT (the "Agreement") is
entered into as of March 31, 2000, by and among Dynavax Technologies
Corporation, a California corporation (the "Company") and Triangle
Pharmaceuticals, Inc. (the "Purchaser").

                                    RECITALS

         WHEREAS, the Company has authorized the sale and issuance of an
aggregate of four hundred thousand (400,000) shares of its Series T Preferred
Stock (the "Shares"); and

         WHEREAS, the Purchaser desires to purchase the Shares on the terms and
conditions set forth herein; and

         WHEREAS, the Company desires to issue and sell the Shares to the
Purchaser on the terms and conditions set forth herein.

         NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual promises hereinafter set forth, the parties hereto agree as follows:

         SECTION 1.  AGREEMENT TO SELL AND PURCHASE.

                1.1 AUTHORIZATION OF SHARES. On or prior to the Closing (as
defined in Section 2 below), the Company shall have authorized (i) the sale
and issuance to Purchaser of the Shares and (ii) the issuance of such shares
of Common Stock to be issued upon conversion of the Shares (the "Conversion
Shares"). The Shares and the Conversion Shares shall have the rights,
preferences, privileges and restrictions set forth in the Amended and
Restated Articles of Incorporation of the Company, as amended, in the form
attached hereto as EXHIBIT A (the "Amended and Restated Articles").

                1.2 SALE AND PURCHASE. Subject to the terms and conditions
hereof, at the Closing (as hereinafter defined) the Company hereby agrees to
issue and sell to Purchaser, and Purchaser agrees to purchase from the
Company, the Shares, at a purchase price of five dollars ($5.00) per share.

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         SECTION 2.  CLOSING, DELIVERY, PAYMENT, ASSIGNMENT

                2.1 CLOSING. The closing of the sale and purchase of the
Shares under this Agreement (the "Closing") shall take place at 10:00 a.m.
Pacific time on the date hereof or as soon as practicable following the
satisfaction or waiver, if permissible, of the conditions to Closing set
forth herein, at the offices of Morrison & Foerster LLP, 425 Market Street,
San Francisco, California 94105 or at such other time or place as the Company
and Purchasers may mutually agree (such date is hereinafter referred to as
the "Closing Date").

                2.2 DELIVERY. At the Closing, subject to the terms and
conditions hereof, the Company will deliver to Purchaser certificates
representing the number of Shares to be purchased at the Closing by
Purchaser, against payment of the purchase price therefor by check, wire
transfer made payable to the order of the Company, cancellation of
indebtedness or any combination of the foregoing.

         SECTION 3.  REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

         The Company hereby represents and warrants to the Purchaser as follows:

                3.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION. The
Company is a corporation duly organized, validly existing and in good
standing under the laws of the State of California. The Company has all
requisite corporate power and authority to carry on its business as now
conducted, to execute and deliver this Agreement, to issue and sell the
Shares and the Conversion Shares and to carry out the provisions of this
Agreement and the Amended and Restated Articles. The Company is not qualified
to transact business as a foreign corporation in any jurisdiction and such
qualification is not now required. The Company does not own or control,
directly or indirectly, any interest in any other corporation, limited
liability company, partnership, association or similar entity. The Company is
not a participant in any joint venture, partnership or similar arrangement.

                3.2 CAPITALIZATION; VOTING RIGHTS. The authorized capital
stock of the Company, immediately prior to the Closing, will consist of
thirty nine million eight hundred twenty one thousand four hundred forty
(39,821,440) shares, twenty two million seven hundred fifty eight thousand
five hundred forty six (22,758,546) shares of which shall be Common Stock
(the "Common Stock") and seventeen million sixty two thousand eight hundred
ninety four (17,062,894) shares of which shall be Preferred Stock (the
"Preferred Stock"). Of the Preferred Stock, six million seven hundred
thousand (6,700,000) shares are designated "Series A Preferred Stock" (the
"Series A Preferred"), nine million thirty two thousand seven hundred eighty
six (9,032,786) shares are designated "Series B Preferred Stock" (the "Series
B Preferred"), five hundred thousand (500,000) shares are hereby designated
"Series S-1 Preferred Stock" (the "Series S-1 Preferred"), four hundred
thirty thousand one hundred eight (430,108) shares are designated "Series R
Preferred Stock" (the "Series R Preferred"), and four hundred thousand
(400,000) shares are designated "Series T Preferred Stock" (the "Series T
Preferred"). On the date hereof, three million seven hundred twelve thousand
two

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hundred eighty six (3,712,286) shares of Common Stock are issued and
outstanding, six million seven hundred thousand (6,700,000) shares of Series
A Preferred Stock are issued and outstanding, nine million thirty two
thousand seven hundred eighty six (9,032,786) shares of Series B Preferred
Stock are issued and outstanding, two hundred thousand (200,000) shares of
Series S-1 Preferred Stock are issued and outstanding, and four hundred
thirty thousand one hundred eight (430,108) shares of Series R Preferred
Stock are issued and outstanding. All issued and outstanding shares of the
Company's capital stock (i) have been duly authorized and validly issued,
(ii) are fully paid and nonassessable, and (iii) were issued in compliance
with all applicable state and federal laws concerning the issuance of
securities. The rights, preferences, privileges and restrictions of the
Shares are as stated in the Amended and Restated Articles. The Conversion
Shares have been duly and validly reserved for issuance. Other than options
outstanding to acquire one million three hundred eighty two thousand seven
hundred eight (1,382,708) shares of Common Stock held by officers, employees
and consultants of the Company, and the First Amended Investor Rights
Agreement between the Company, certain holders of its Common Stock, and the
holders of its Series A Preferred Stock and Series B Preferred Stock, there
are no outstanding options, warrants, rights (including conversion or
preemptive rights and rights of first refusal), proxy or shareholder
agreements, or agreements of any kind for the purchase or acquisition from
the Company of any of its securities. When issued in compliance with the
provisions of this Agreement and the Amended and Restated Articles, the
Shares and the Conversion Shares will be validly issued, fully paid and
nonassessable, and will be free of any liens or encumbrances; provided,
however, that the Shares and the Conversion Shares may be subject to
restrictions on transfer under state and/or federal securities laws as set
forth herein or as otherwise required by such laws at the time a transfer is
proposed. Except as may be set forth in the Amended and Restated Articles,
the Company has no obligation to repurchase any of its stock.

                3.3 AUTHORIZATION; BINDING OBLIGATIONS. All corporate action
on the part of the Company, its officers, directors and shareholders
necessary for the authorization of this Agreement, the performance of all
obligations of the Company hereunder and thereunder at the Closing and the
authorization, sale, issuance and delivery of the Shares pursuant hereto and
the Conversion Shares pursuant to the Amended and Restated Articles has been
taken or will be taken prior to the Closing. This Agreement, when executed
and delivered, will be a valid and binding obligation of the Company
enforceable in accordance with its terms, except (i) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws of general
application affecting enforcement of creditors' rights; (ii) general
principles of equity that restrict the availability of equitable remedies;
and (iii) to the extent that the enforceability of the indemnification
provisions of Section 6.8 of this Agreement may be limited by applicable
laws. The sale of the Shares and the subsequent conversion of the Shares into
Conversion Shares are not and will not be subject to any preemptive rights or
rights of first refusal that have not been properly waived or complied with.

                3.4 FINANCIAL STATEMENTS. The Company has delivered to
Purchaser its audited financial statements for the year ended December 31,
1998 and its unaudited financial statements as of December 31, 1999
(collectively, the "Financial Statements").

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The Financial Statements are true, correct and complete in all material
respects and have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis throughout the periods
indicated (except that the unaudited financial statements do not contain all
footnote disclosures required by generally accepted accounting principles).
The Financial Statements fairly and accurately set out and describe the
financial condition and operating results of the Company as of the dates and
during the periods indicated therein. Except as set forth in the Financial
Statements, the Company has no liabilities, contingent or otherwise, whether
due or to become due, other than (a) liabilities incurred in the ordinary
course of business subsequent to December 31, 1999 and (b) obligations under
contracts and commitments incurred in the ordinary course of business and not
required under generally accepted accounting principles to be reflected in
the Financial Statements, which in both cases, individually or in the
aggregate, do not have a material adverse effect on the Company or its
business, assets, properties or financial condition.

                3.5  AGREEMENTS; ACTION.

                     (a) Except for agreements explicitly contemplated hereby
and agreements between the Company and its employees with respect to the sale
of the Company's Common Stock, 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, proposed transactions, judgments, orders, writs or
decrees to which the Company is a party or to its knowledge by which it is
bound which may involve (i) obligations (contingent or otherwise) of, or
payments to, the Company in excess of fifty thousand dollars ($50,000) (other
than obligations of, or payments to, the Company arising from agreements
entered into in the ordinary course of business or to support research being
conducted at the University of California, San Diego), or (ii) the license of
any patent, copyright, trade secret or other proprietary right to or from the
Company (other than licenses arising from the purchase of "off the shelf" or
other standard products), licenses of certain patents from the Regents of the
University of California, and a cross license between the Company and Vical
Incorporated, or (iii) provisions restricting or affecting the development,
manufacture or distribution of the Company's products or services, or (iv)
indemnification by the Company with respect to infringements of proprietary
rights (other than indemnification obligations arising from purchase or sale
agreements entered into in the ordinary course of business).

                     (c) The Company has not (i) declared or paid any
dividends, or authorized or made any distribution upon or with respect to any
class or series of its capital stock, (ii) incurred any indebtedness for
money borrowed or any other liabilities (other than with respect to dividend
obligations, distributions, indebtedness and other obligations incurred in
the ordinary course of business) individually in excess of one hundred
thousand dollars ($100,000) and in excess of two hundred fifty thousand
dollars ($250,000) in the aggregate, (iii) made any loans or advances to any
person, other than ordinary advances for travel expenses, or (iv) sold,
exchanged or otherwise disposed of

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any of its assets or rights, other than the sale of its inventory in the
ordinary course of business.

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

                3.6 OBLIGATIONS TO RELATED PARTIES. There are no obligations
of the Company to officers, directors, shareholders, or employees of the
Company other than (i) for payment of salary for services rendered, (ii)
reimbursement for reasonable expenses incurred on behalf of the Company and
(iii) for other standard employee benefits made generally available to all
employees (including stock option agreements outstanding under any stock
option plan approved by the Board of Directors of the Company). No officer,
director or shareholder, or any members of their immediate families, is,
directly or indirectly, interested in any material contract with the Company
except contracts entered into in connection herewith (other than such
contracts as relate to any such person's ownership of capital stock or other
securities of the Company). The Company is not a guarantor or indemnitor of
any indebtedness of any other person, firm or corporation.

                3.7 TITLE TO PROPERTIES AND ASSETS; LIENS, ETC. The Company
has good and marketable title to its properties and assets, including the
properties and assets reflected in the most recent balance sheet included in
the Financial Statements, and good title to its leasehold estates, in each
case subject to no mortgage, pledge, lien, lease, encumbrance or charge,
other than (i) those resulting from taxes which have not yet become
delinquent, (ii) minor liens and encumbrances which do not materially detract
from the value of the property subject thereto or materially impair the
operations of the Company, and (iii) those that have otherwise arisen in the
ordinary course of business. With respect to the property and assets it
leases, the Company is in compliance with such leases and, to the best of its
knowledge, holds a valid leasehold interest free of any liens, claims, or
encumbrances subject to claims (i)-(iii) above. All facilities, machinery,
equipment, fixtures, vehicles and other properties owned, leased or used by
the Company are in good operating condition and repair, ordinary wear and
tear excepted, and are reasonably fit and useable for the purposes to which
they are being put.

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                3.8 PATENTS AND TRADEMARKS. The Company owns or possesses
sufficient legal rights to all patents, trademarks, service marks, trade
names, copyrights, trade secrets, information and other proprietary rights
and processes necessary for its business as now conducted and as proposed to
be conducted, without any known infringement of the rights of others. There
are no outstanding options, licenses or agreements of any kind relating to
the foregoing, nor is the Company bound by or a party to any options,
licenses or agreements of any kind with respect to the patents, trademarks,
service marks, trade names, copyrights, trade secrets, licenses, information
and other proprietary rights and processes of any other person or entity
other than such licenses or agreements arising from the purchase of "off the
shelf" or standard products. The Company has not received any communications
alleging that the Company has violated or, by conducting its business as
proposed, would violate any of the patents, trademarks, service marks, trade
names, copyrights or trade secrets or other proprietary rights of any other
person or entity. The Company is not aware that any of its employees or
consultants 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 his or her duties to the Company or that would conflict with the
Company's business as proposed to be conducted. Neither the execution nor
delivery of this Agreement, nor the carrying on of the Company's business by
the employees of the Company, nor the conduct of the Company's business as
proposed, will, to the Company's knowledge, conflict with or result in a
breach of the terms, conditions or provisions of, or constitute a default
under, any contract, covenant or instrument under which any employee is now
obligated. The Company does not believe that it is or will be necessary to
utilize any inventions, trade secrets or proprietary information of any of
its employees or consultants made prior to their employment or engagement by
the Company, except for inventions, trade secrets or proprietary information
that have been assigned to or licensed by the Company.

                3.9 COMPLIANCE WITH OTHER INSTRUMENTS. The Company is not in
violation or default of any term of its Amended and Restated Articles or
Bylaws, or of any provision of any mortgage, indenture, contract, agreement,
instrument or contract to which it is party or by which it is bound or of any
judgment, decree, order, writ or, to its knowledge, any statute, rule or
regulation applicable to the Company which would materially and adversely
affect the business, assets, liabilities, financial condition, operations or
prospects of the Company. The execution, delivery, and performance of and
compliance with this Agreement, and the issuance and sale of the Shares
pursuant hereto and of the Conversion Shares pursuant to the Amended and
Restated Articles, will not, with or without the passage of time or giving of
notice, result in any such material violation, or be in conflict with or
constitute a default under any such term, or result in the creation of any
mortgage, pledge, lien, encumbrance or charge upon any of the properties or
assets of the Company or the suspension, revocation, impairment, forfeiture
or nonrenewal of any permit, license, authorization or approval applicable to
the Company, its business or operations or any of its assets or properties.

                3.10 LITIGATION. There is no action, suit, proceeding or
investigation pending or currently threatened against the Company that
questions the validity of this Agreement, or the right of the Company to
enter into any of such agreements or to

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consummate the transactions contemplated hereby or thereby, or which might
result, either individually or in the aggregate, in any material adverse
change in the assets, condition, affairs or prospects of the Company,
financially or otherwise, or any change in the current equity ownership of
the Company, nor is the Company aware that there is any basis for the
foregoing. The foregoing includes, without limitation, actions pending or
threatened (or any basis therefor known to the Company) involving 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. There is no action, suit, proceeding or investigation
by the Company currently pending or which the Company intends to initiate.
The Company is not a party or subject to the provisions of any order, writ,
injunction, judgment or decree of any court or government agency or
instrumentality.

                3.11 TAX RETURNS, PAYMENTS AND ELECTIONS. The Company has
timely filed all tax returns and reports as required by law. These returns
and reports are true and correct in all material respects. The Company has
paid all taxes and other assessments due except in any such case as would not
have a material adverse effect on the Company. The provision for taxes of the
Company as shown in the Financial Statements is adequate for taxes due or
accrued as of the date hereof. The Company has not elected pursuant to the
Internal Revenue Code of 1986, as amended ("Code"), to be treated as an S
corporation or a collapsible corporation pursuant to Section 1362(a) or
Section 341(f) of the Code, nor has it made any other elections pursuant to
the Code (other than elections that relate solely to methods of accounting,
depreciation, or amortization) that would have a material effect on the
business, properties, prospects, or financial condition of the Company. 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. None of the Company's
federal income tax returns and none of its state income or franchise tax or
sales or use tax returns has ever been audited by governmental authorities.
Since the date of the Financial Statements, the Company has made adequate
provisions on its books of account for all taxes, assessments, and
governmental charges with respect to its business, properties, and operations
for such period. The Company has withheld or collected from each payment made
to each of its employees the amount of all taxes, including, but not limited
to, federal income taxes, Federal Insurance Contribution Act taxes and
Federal Unemployment Tax Act taxes required to be withheld or collected
therefrom, and has paid the same to the proper tax receiving officers or
authorized depositories.

                3.12 EMPLOYEES. The Company has no collective bargaining
agreements with any of its employees. There is no labor union organizing
activity pending or, to the Company's knowledge, threatened with respect to
the Company. To the best of 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, patent disclosure agreement or any other agreement relating to the
right of any such individual to be employed by, or to contract with, the
Company because of the nature of the business to be conducted by the Company;
and to the best of the Company's knowledge, the continued employment by

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the Company of its present employees, and the performance of the Company's
contract with its independent contractors, will not result in any such
violation. The Company has not received any written notice alleging that any
such violation has occurred. No employee of the Company has been granted the
right to continued employment by the Company or to any material compensation
following termination of employment with the Company. The Company is not
aware that any officer or key employee, or that any group of key employees,
intends to terminate their employment with the Company, nor does the Company
have a present intention to terminate the employment of any officer, key
employee, or group of key employees.

                3.13 REGISTRATION RIGHTS. Except as required pursuant to the
First Amended Investors' Rights Agreement, pursuant to the terms of a Series
S-1 Preferred Stock Purchase Agreement dated November 22, 1999 between the
Company and Stallergenes S.A. (the "Series S-1 Preferred Stock Purchase
Agreement"), and pursuant to the terms of a Series R Preferred Stock Purchase
Agreement dated March 7, 2000 between the Company and Aventis Pasteur S.A.
(the "Series R Stock Purchase Agreement"), the Company is presently not under
any obligation, and has not granted any rights, to register any of the
Company's presently outstanding securities or any of its securities that may
hereafter be issued. Other than a right to request that the Company initiate
a registration of securities, the registration rights provided to the holders
of the Company's Series A Preferred Stock and Series B Preferred Stock in the
First Amended Investor Rights Agreement are substantially identical to those
provided in Section 6 of this Agreement and the registration rights provided
in the Series S-1 Preferred Stock Purchase Agreement and the Series R
Preferred Stock Purchase Agreement are substantially identical to those
provided in Section 6 of this Agreement.

                3.14 COMPLIANCE WITH LAWS; PERMITS. The Company is not in
violation of any applicable statute, rule, regulation, order or restriction
of any domestic or foreign government or any instrumentality or agency
thereof in respect of the conduct of its business or the ownership of its
properties which violation would materially and adversely affect the
business, assets, liabilities, financial condition, operations or prospects
of the Company. No governmental orders, permissions, consents, approvals or
authorizations are required to be obtained and no registrations or
declarations are required to be filed in connection with the execution and
delivery of this Agreement and the issuance of the Shares or the Conversion
Shares, except such as has been duly and validly obtained or filed, or with
respect to any filings that must be made after the Closing. The Company has
all franchises, permits, licenses and any similar authority necessary for the
conduct of its business as now being conducted by it, the lack of which could
materially and adversely affect the business, properties, prospects or
financial condition of the Company and believes it can obtain, without undue
burden or expense, any similar authority for the conduct of its business as
planned to be conducted.

                3.15 OFFERING VALID. Assuming the accuracy of the
representations and warranties of the Purchaser contained in Section 4.2
hereof, the offer, sale and issuance of the Shares and the Conversion Shares
will be exempt from the registration requirements of the Securities Act of
1933, as amended (the "Securities Act") and will have been registered or
qualified (or are exempt from registration and qualification)

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under the registration, permit or qualification requirements of all
applicable state securities laws. Neither the Company nor any agent on its
behalf has solicited or will solicit any offers to sell or has offered to
sell or will offer to sell all or any part of the Shares to any person or
persons so as to bring the sale of such Shares by the Company within the
registration provisions of the Securities Act.

                3.16  ENVIRONMENTAL REQUIREMENTS.

                     (a) To the best of the Company's knowledge, the Company
has not caused or allowed, nor has the Company contracted with any party for,
the generation, use, transportation, treatment, storage or disposal of any
Hazardous Substances (as defined below) in connection with the operations of
its business or otherwise, other than cleaning, maintenance and similar
supplies used in the ordinary course of business.

                     (b) To the best of the Company's knowledge, the Company,
the operations of its business, and any real property that the Company owns,
leases, or otherwise occupies or uses (the "Premises") are in substantial
compliance with all applicable Environmental Laws (as defined below) and
orders or directives of any governmental authorities having jurisdiction
under such Environmental Laws including, without limitation, any
Environmental Laws or orders or directives with respect to any cleanup or
remediation of any release or threat of release of Hazardous Substances.

                     (c) The Company has not received any citation,
directive, letter or other communication, written or oral, or any notice of
any proceedings, claims or lawsuits, from any person, entity or governmental
authority arising out of the ownership or occupation of the Premises, or the
conduct of its operations, nor is it aware of any basis thereof.

                     (d) To the best of the Company's knowledge, the Company
has obtained and is maintaining in full force and effect all necessary
permits, licenses and approvals required by any Environmental Laws, if any,
applicable to the Premises and the business operations conducted thereon
(including operations conducted by tenants on the Premises) and is in
substantial compliance with all such permits, licenses and approvals.

                     (e) The Company has not caused, or allowed a release, or
a threat of release, of any Hazardous Substance into, nor to the best of the
Company's knowledge has the Premises or any property at or near the Premises
ever been subject to a release, or a threat of a release, of any Hazardous
Substance.

                     (f) For purposes of this Section 3.16, the term,
"Environmental Laws" shall mean any federal, state or local law, ordinance or
regulation pertaining to the protection of human health or the environment
including, without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. Sections 9601, et seq., Emergency
Planning and Community Right-to-Know Act, 42 U.S.C. Sections 11001, et seq.,
and the Resource Conservation and Recovery Act, 42 U.S.C. Sections 6901, et
seq.

                                     -9-
<PAGE>

For purposes of this Section 3.16, the term, "Hazardous Substance" includes
oil and petroleum products, asbestos, polychlorinated biphenyls and urea
formaldehyde, and any other materials classified as hazardous or toxic under
any Environmental Laws.

                3.17 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 the best of its
knowledge, no material expenditures are or will be required to comply with
any such existing statute, law or regulation.

                3.18 PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT. Each
former and current employee and consultant of the Company has, or shall have
prior to the Closing, executed a Proprietary Information and Inventions
Agreement in customary form. The Company, after reasonable investigation, is
not aware that any of its employees or consultants are in violation thereof,
and the Company will use its best efforts to prevent such violation. Each
former and current employee or consultant of the Company has executed a
Proprietary Information and Inventions Agreement substantially in the form
attached hereto as EXHIBIT C.

                3.19 FULL DISCLOSURE. This Agreement, the exhibits hereto,
and all other documents delivered by the Company to Purchaser or its
attorneys or agents in connection herewith or therewith or with the
transactions contemplated hereby or thereby, when taken as a whole, neither
contain any untrue statement of a material fact nor omit to state a material
fact necessary to make the statements contained herein or therein not
misleading.

         SECTION 4.  REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.

         Purchaser hereby represents and warrants to the Company as follows
(such representations and warranties do not lessen or obviate the
representations and warranties of the Company set forth in this Agreement):

                4.1 REQUISITE POWER AND AUTHORITY. Purchaser has all
necessary power and authority under all applicable provisions of law to
execute and deliver this Agreement and to carry out its provisions. All
actions on Purchaser's part required for the lawful execution and delivery of
this Agreement have been or will be effectively taken prior to the Closing.
Upon their execution and delivery, this Agreement will be a valid and binding
obligation of Purchaser, enforceable in accordance with its terms, except (i)
as limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other laws of general application affecting enforcement of creditors'
rights, and (ii) general principles of equity that restrict the availability
of equitable remedies, and (iii) to the extent that the enforceability of the
indemnification provisions of Section 6.8 of this Agreement may be limited by
applicable laws.

                4.2 INVESTMENT REPRESENTATIONS. Purchaser understands that
neither the Shares nor the Conversion Shares have been registered under the
Securities Act of 1933, as amended (the "Securities Act"). Purchaser also
understands that the Shares are being offered and sold pursuant to an
exemption from registration contained in the

                                     -10-
<PAGE>

Securities Act based in part upon Purchaser's representations contained in
the Agreement. Purchaser hereby represents and warrants as follows:

                     (a) PURCHASER BEARS ECONOMIC RISK. Purchaser has
substantial experience in evaluating and investing in private placement
transactions of securities in companies similar to the Company so that it is
capable of evaluating the merits and risks of its investment in the Company
and has the capacity to protect its own interests. Purchaser must bear the
economic risk of this investment indefinitely unless the Shares (or the
Conversion Shares) are registered pursuant to the Securities Act, or an
exemption from registration is available. Purchaser understands that the
Company has no present intention of registering the Shares, the Conversion
Shares or any shares of its Common Stock. Purchaser also understands that
there is no assurance that any exemption from registration under the
Securities Act will be available and that, even if available, such exemption
may not allow Purchaser to transfer all or any portion of the Shares or the
Conversion Shares under the circumstances, in the amounts or at the times
Purchaser might propose.

                     (b) ACQUISITION FOR OWN ACCOUNT. Purchaser is acquiring
the Shares and the Conversion Shares for Purchaser's own account for
investment only, and not with a view towards their distribution.

                     (c) PURCHASER CAN PROTECT ITS INTEREST. Purchaser
represents that by reason of its, or of its management's, business or
financial experience, Purchaser has the capacity to protect its own interests
in connection with the transactions contemplated in this Agreement.

                     (d) ACCREDITED INVESTOR. Purchaser represents that it is
an accredited investor within the meaning of Regulation D under the
Securities Act.

                     (e) COMPANY INFORMATION. Purchaser has had an
opportunity to discuss the Company's business, management and financial
affairs with directors, officers and management of the Company and has had
the opportunity to review the Company's financial statements, operations and
facilities. Purchaser has also had the opportunity to ask questions of and
receive answers from, the Company and its management regarding the terms and
conditions of this investment. The parties agree that the foregoing
representation shall not affect the representations and warranties made by
the Company in Section 3 of this Agreement or affect Purchaser's right to
rely on such representations and warranties without investigation.

                     (f) RULE 144. Purchaser acknowledges and agrees that the
Shares, and, if issued, the Conversion Shares must be held indefinitely
unless they are subsequently registered under the Securities Act or an
exemption from such registration is available. Purchaser has been advised or
is aware of the provisions of Rule 144 promulgated under the Securities Act,
which permits limited resale of shares purchased in a private placement
subject to the satisfaction of certain conditions, including, among other
things: the availability of certain current public information about the
Company, the resale occurring not less than one year after a party has
purchased and paid for the

                                     -11-
<PAGE>

security to be sold, the sale being through 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, as amended) and the number
of shares being sold during any three-month period not exceeding specified
limitations.

         SECTION 5.  CONDITIONS TO CLOSING.

                5.1 CONDITIONS TO PURCHASER'S OBLIGATIONS AT THE CLOSING.
Purchaser's obligations to purchase the Shares at the Closing are subject to
the satisfaction, at or prior to the Closing, of the following conditions:

                     (a) REPRESENTATIONS AND WARRANTIES TRUE; PERFORMANCE OF
OBLIGATIONS. The representations and warranties made by the Company in
Section 3 hereof shall be true and correct in all material respects as of the
Closing Date with the same force and effect as if they had been made as of
the Closing Date, and the Company shall have performed all obligations and
conditions herein required to be performed or observed by it on or prior to
the Closing.

                     (b) CONSENTS, PERMITS, AND WAIVERS. The Company shall
have obtained any and all consents, permits and waivers necessary or
appropriate for consummation of the transactions contemplated by the
Agreement (except for such as may be properly obtained subsequent to the
Closing).

                     (c) FILING OF AMENDED AND RESTATED ARTICLES. The Amended
and Restated Articles substantially in the form attached hereto as EXHIBIT A
shall have been filed with the Secretary of State of the State of California.

                     (d) RESERVATION OF CONVERSION SHARES. The Conversion
Shares issuable upon conversion of the Shares shall have been duly authorized
and reserved for issuance upon such conversion.

                     (e) STOCK CERTIFICATES. A stock certificate representing
the Shares shall have been delivered to the Purchaser.

                     (f) PROCEEDINGS AND DOCUMENTS. All corporate and other
proceedings in connection with the transactions contemplated at the Closing
hereby and all documents and instruments incident to such transactions shall
be reasonably satisfactory in substance and form to the Purchaser, and the
Purchaser shall have received all such counterpart originals or certified or
other copies of such documents as they may reasonably request.

                     (g) CONTINUED EFFECTIVENESS. This Agreement and other
agreements contemplated hereby shall continue to be in full force and effect.

                     (h) CERTIFICATE OF PRESIDENT. Purchaser shall have
received a certificate of the President of the Company dated such Closing
Date to the effect that (i) the representations and warranties made by the
Company in Section 3 hereof are true and correct in all material respects as
of the Closing with the same force and effect as if

                                     -12-
<PAGE>

they had been made as of the Closing, except those made as to a particular
date which shall be true as of such date.

                     (i) LEGAL INVESTMENT. On the Closing Date, the sale and
issuance of the Shares shall be legally permitted by all laws and regulations
to which Purchaser and the Company are subject.

                     (j) LEGAL OPINION. Purchaser shall have received from
legal counsel to the Company a favorable opinion addressed to Purchaser,
dated as of the Closing Date, in the form attached hereto as EXHIBIT B.

                     (k) NO VIOLATIONS. The purchase of and payment for the
Shares to be purchased by the Purchaser on the Closing Date on the terms and
conditions herein provided shall not violate any applicable law or
governmental regulation.

                5.2 CONDITIONS TO OBLIGATIONS OF THE COMPANY. The Company's
obligation to issue and sell the Shares at the Closing is subject to the
satisfaction, on or prior to the Closing, of the following conditions:

                     (a) REPRESENTATIONS AND WARRANTIES TRUE. The
representations and warranties made by Purchaser in Section 4 hereof shall be
true and correct in all material respects at the date of the Closing, with
the same force and effect as if they had been made on and as of said date.

                     (b) PERFORMANCE OF OBLIGATIONS. Purchaser shall have
performed and complied with all agreements and conditions herein required to
be performed or complied with by Purchaser on or prior to the Closing.

                     (c) CONSENTS, PERMITS, AND WAIVERS. The Company shall
have obtained any and all consents, permits and waivers necessary or
appropriate for consummation of the transactions contemplated by the
Agreement (except for such as may be properly obtained subsequent to the
Closing).

         SECTION 6. REGISTRATION RIGHTS.

                6.1 DEFINITIONS. As used in this Section 6, the following
terms shall have the following respective meanings:

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

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

         "HOLDER" means any person owning of record Shares or Registrable
Securities that have not been sold to the public or any assignee of record of
such Registrable Securities in accordance with Section 6.9 hereof.

                                     -13-
<PAGE>

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

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

         "REGISTRABLE SECURITIES" means (i) Common Stock of the Company issued
or issuable upon conversion of the Shares; (ii) Common Stock of the Company
issued or issuable upon conversion of the Series A, Series B, Series S-1, Series
R, and Series T Preferred Stock of the Company; (iii) Common Stock of the
Company issued or issuable either directly, or upon conversion of any other
Series of Preferred Stock, the holders of which are granted registration rights
by the Company, and (iv) any Common Stock of the Company issued as (or issuable
upon the conversion or exercise of any warrant, right or other security which is
issued as) a dividend or other distribution with respect to, or in exchange for
or in replacement of, such above-described securities. Notwithstanding the
foregoing, Registrable Securities shall not include any securities either sold
by a person to the public pursuant to a registration statement or Rule 144 or
sold in a private transaction in which the transferor's rights under Section 2
of this Agreement are not assigned.

         "REGISTRABLE SECURITIES THEN OUTSTANDING" shall be the number of shares
determined by calculating the total number of shares of the Company's Common
Stock that are Registrable Securities and either (1) are then issued and
outstanding or (2) are issuable pursuant to then exercisable or convertible
securities.

         "REGISTRATION EXPENSES" shall mean all expenses incurred by the Company
in complying with Sections 6.2 and 6.3 hereof, including, without limitation,
all registration and filing fees, printing expenses, fees and disbursements of
counsel for the Company, reasonable fees and disbursements of a single special
counsel for the Holders, blue sky fees and expenses and the expense of any
special audits incident to or required by any such registration (but excluding
fees and disbursements of additional counsel for any of the Holders, which fees
and disbursements shall be the obligations of such Holders, and excluding the
compensation of regular employees of the Company, which compensation shall be
paid in any event by the Company).

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

         "SELLING EXPENSES" shall mean all underwriting discounts and selling
commissions applicable to the sale of Shares pursuant to the Agreement.

         "SHARES" shall mean the Company's Series T Stock issued pursuant to
this Purchase Agreement.

                6.2 PIGGYBACK REGISTRATIONS. The Company shall notify all
Holders in writing at least thirty (30) days prior to the filing of any
registration statement under the Securities Act for purposes of a public
offering of securities of the Company

                                     -14-
<PAGE>

(including, but not limited to, registration statements relating to secondary
offerings of securities of the Company, but excluding registration statements
relating to employee benefit plans or with respect to corporate
reorganizations or other transactions under Rule 145 of the Securities Act),
either for its own account or for the account of a security holder or
security holders, and the Company will afford each such Holder an opportunity
to include in such registration statement all or part of such Registrable
Securities held by such Holder. Each Holder desiring to include in any such
registration statement all or any part of the Registrable Securities held by
it shall, within fifteen (15) days after the above-described notice from the
Company, so notify the Company in writing. Such notice shall state the
intended method of disposition of the Registrable Securities by such Holder.
If a Holder decides not to include all of its Registrable Securities in any
registration statement thereafter filed by the Company, such Holder shall
nevertheless continue to have the right to include any Registrable Securities
in any subsequent registration statement or registration statements as may be
filed by the Company with respect to offerings of its securities, all upon
the terms and conditions set forth herein.

                     (a) UNDERWRITING. If the registration statement under
which the Company gives notice under this Section 6.2 is for an underwritten
offering, the Company shall so advise the Holders. In such event, the right
of any such Holder to be included in a registration pursuant to this Section
6.2 shall be conditioned upon such Holder's participation in such
underwriting and the inclusion of such Holder's Registrable Securities in the
underwriting to the extent provided herein. All Holders proposing to
distribute their Registrable Securities through such underwriting shall enter
into an underwriting agreement in customary form with the underwriter or
underwriters selected for such underwriting by the Company. Notwithstanding
any other provision of this Agreement, if the underwriter determines in good
faith that marketing factors require a limitation of the number of shares to
be underwritten, the number of shares that may be included in the
underwriting shall be allocated, first, to the Company; second, to the
Holders on a pro rata basis based on the total number of Registrable
Securities proposed to be included by each Holder in the underwriting; and
third, to any shareholder of the Company (other than a Holder) on a pro rata
basis. No such reduction shall reduce the securities being offered by the
Holders to less than 50% of the securities proposed to be sold by them in the
offering unless all such shares other than shares held by Holders exercising
a demand registration right are excluded. In no event will shares of any
other selling shareholder be included in such registration which would reduce
the number of shares which may be included by Holders without the written
consent of Holders of not less than a majority of the Registrable Securities
proposed to be sold in the offering.

                     (b) RIGHT TO TERMINATE REGISTRATION. The Company shall
have the right to terminate or withdraw any registration initiated by it
under this Section 6.2 prior to the effectiveness of such registration
whether or not any Holder has elected to include securities in such
registration. The Registration Expenses of such withdrawn registration shall
be borne by the Company in accordance with Section 6.4 hereof.

                6.3 FORM S-3 REGISTRATION. In case the Company shall receive
from any Holder or Holders a written request or requests that the Company
effect a registration

                                     -15-
<PAGE>

on Form S-3 (or any successor to Form S-3) or any similar short-form
registration statement and any related qualification or compliance with
respect to all or a part of the Registrable Securities owned by such Holder
or Holders, the Company will:

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

                     (b) as soon as practicable, effect such registration and
all such qualifications and compliances as may be so requested and as would
permit or facilitate the sale and distribution of all or such portion of such
Holder's or Holders' Registrable Securities as are specified in such request,
together with all or such portion of the Registrable Securities of any other
Holder or Holders joining in such request as are specified in a written
request given within fifteen (15) days after receipt of such written notice
from the Company; provided, however, that the Company shall not be obligated
to effect any such registration, qualification or compliance pursuant to this
Section 6.3:

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

                         (ii) if the Holders, together with the holders of
any other securities of the Company entitled to inclusion in such
registration, propose to sell Registrable Securities and such other
securities (if any) at an aggregate price to the public of less than one
million dollars ($1,000,000), or

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

                         (iv) if the Company has, within the twelve (12)
month period preceding the date of such request, already effected two (2)
registrations on Form S-3 for the Holders pursuant to this Section 6.3, or

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

                     (c) Subject to the foregoing, the Company shall file a
Form S-3 registration statement covering the Registrable Securities and other
securities so requested to be registered as soon as practicable after receipt
of the request or requests of the Holders.

                                     -16-
<PAGE>

                6.4 EXPENSES OF REGISTRATION. All expenses of registration
(exclusive of underwriting discounts and commissions) including, without
limitation, the fees and expenses of one special counsel, if any, for the
selling shareholders for the demand, piggyback and S-3 registrations shall be
borne by the Company. All Selling Expenses incurred in connection with any
registrations hereunder shall be borne by the holders of the securities so
registered pro rata on the basis of the number of shares so registered.

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

                     (a) Prepare and file with the SEC a registration
statement with respect to such Registrable Securities and use all reasonable
efforts to cause such registration statement to become effective, and, upon
the request of the Holders of a majority of the Registrable Securities
registered thereunder, keep such registration statement effective for up to
one hundred twenty (120) days or, if earlier, until the Holder or Holders
have completed the distribution related thereto.

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

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

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

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

                     (f) Notify each Holder of Registrable Securities covered
by such registration statement at any time when a prospectus relating thereto
is required to be delivered under the Securities Act of the happening of any
event as a result of which the prospectus included in such registration
statement, as then in effect, includes an untrue statement of a material fact
or omits to state a material fact required to be stated

                                     -17-
<PAGE>

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

                      (g) Furnish, at the request of any Holder participating
in the registration, on the date that such Registrable Securities are
delivered to the underwriters for sale, if such securities are being sold
through underwriters, or, if such securities are not being sold through
underwriters, on the date that the registration statement with respect to
such securities becomes effective, (i) an opinion, dated as of such date, of
the counsel representing the Company for the purposes of such registration,
in form and substance as is customarily given to underwriters in an
underwritten public offering and reasonably satisfactory to such Holder
requesting registration, addressed to the underwriters, if any, and to such
Holder requesting registration of Registrable Securities and (ii) a letter
dated as of such date, from the independent certified public accountants of
the Company, in form and substance as is customarily given by independent
certified public accountants to underwriters in an underwritten public
offering and reasonably satisfactory to such Holder requesting registration,
addressed to the underwriters, if any, and if permitted by applicable
accounting standards, to the Holders requesting registration of Registrable
Securities.

                6.6 TERMINATION OF REGISTRATION RIGHTS. All registration
rights granted under this Section 6 shall terminate and be of no further
force and effect after the earlier of (i) three (3) years after the date of
the Company's Initial Offering, or (ii) the date when the Company has
completed its Initial Offering and is subject to the provisions of the
Exchange Act and (a) all Registrable Securities held by and issuable to such
Holder may be sold during any ninety (90) day period and (b) such Holder
holds less than one percent (1%) of the Company's outstanding stock under
Rule 144(k) (or successor rule promulgated by the SEC).

                6.7  DELAY OF REGISTRATION; FURNISHING INFORMATION.

                     (a) No Holder shall have any right to obtain or seek an
injunction restraining or otherwise delaying any such registration as the
result of any controversy that might arise with respect to the interpretation
or implementation of this Section 6.

                     (b) It shall be a condition precedent to the obligations
of the Company to take any action pursuant to Sections 6.2 or 6.3 that the
selling Holders shall furnish to the Company such information regarding
themselves, the Registrable Securities held by them and the intended method
of disposition of such securities as shall be required to effect the
registration of their Registrable Securities.

                6.8 INDEMNIFICATION. In the event any Registrable Securities
are included in a registration statement under Sections 6.2 or 6.3:

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

                                     -18-
<PAGE>

meaning of the Securities Act or the Exchange Act, against any losses,
claims, damages, or liabilities (joint or several) to which they may become
subject under the Securities Act, the Exchange Act or other federal or state
law, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any of the following
statements, omissions or violations (collectively a "Violation") by the
Company: (i) any untrue statement or alleged untrue statement of a material
fact contained in such registration statement, including any preliminary
prospectus or final prospectus contained therein or any amendments or
supplements thereto, (ii) the omission or alleged omission to state therein a
material fact required to be stated therein, or necessary to make the
statements therein not misleading, or (iii) any violation or alleged
violation by the Company of the Securities Act, the Exchange Act, any state
securities law or any rule or regulation promulgated under the Securities
Act, the Exchange Act or any state securities law in connection with the
offering covered by such registration statement; and the Company will
reimburse each such Holder, partner, officer or director, legal counsel,
underwriter or controlling person for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the indemnity
agreement contained in this Section 6.8(a) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Company, which consent
shall not be unreasonably withheld, nor shall the Company be liable in any
such case for any such loss, claim, damage, liability or action to the extent
that it arises out of or is based upon a Violation which occurs in reliance
upon and in conformity with written information furnished expressly for use
in connection with such registration by such Holder, partner, officer,
director, underwriter or controlling person of such Holder.

                (b) To the extent permitted by law, each Holder will, if
Registrable Securities held by such Holder are included in the securities as
to which such registration, qualification or compliance is being effected,
indemnify and hold harmless the Company, each of its directors, its officers,
and legal counsel and each person, if any, who controls the Company within
the meaning of the Securities Act, any underwriter and any other Holder
selling securities under such registration statement or any of such other
Holder's partners, directors, officers or legal counsel, or any person who
controls such Holder, against any losses, claims, damages or liabilities
(joint or several) to which the Company or any such director, officer, legal
counsel, controlling person, underwriter or other such Holder, or partner,
director, officer legal counsel or controlling person of such other Holder
may become subject under the Securities Act, the Exchange Act or other
federal or state law, insofar as such losses, claims, damages or liabilities
(or actions in respect thereto) arise out of or are based upon any Violation,
in each case to the extent (and only to the extent) that such Violation
occurs in reliance upon and in conformity with written information furnished
by such Holder under an instrument duly executed by such Holder and stated to
be specifically for use in connection with such registration; and each such
Holder will reimburse any legal or other expenses reasonably incurred by the
Company or any such director, officer, legal counsel, controlling person,
underwriter or other Holder, or partner, officer, director legal counsel or
controlling person of such other Holder in connection with investigating or
defending any such loss, claim, damage,

                                     -19-
<PAGE>

liability or action if it is judicially determined that there was such a
Violation; provided, however, that the indemnity agreement contained in this
Section 6.8(b) shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability or action if such settlement is effected
without the consent of the Holder, which consent shall not be unreasonably
withheld; provided further, that in no event shall any indemnity under this
Section 6.8 exceed the net proceeds from the offering received by such Holder.

                     (c) Promptly after receipt by an indemnified party under
this Section 6.8 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect
thereof is to be made against any indemnifying party under this Section 6.8,
deliver to the indemnifying party a written notice of the commencement
thereof, and the indemnifying party shall have the right to participate
therein, and, to the extent the indemnifying party so desires, jointly with
any other indemnifying party similarly noticed, to assume the defense thereof
with counsel mutually satisfactory to the parties; provided, however, that an
indemnified party shall have the right to retain its own counsel, with the
fees and expenses to be paid by the indemnifying party, if representation of
such indemnified party by the counsel retained by the indemnifying party
would be inappropriate due to actual or potential differing interests between
such indemnified party and any other party represented by such counsel in
such proceeding. The failure to deliver written notice to the indemnifying
party within a reasonable time of the commencement of any such action, if
materially prejudicial to its ability to defend such action, shall relieve
such indemnifying party of any liability to the indemnified party under this
Section 6.8, but the omission so to deliver written notice to the
indemnifying party will not relieve it of any liability that it may have to
any indemnified party otherwise than under this Section 6.8.

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

                      (e) The obligations of the Company and Holders under
this Section 6.8 shall survive completion of any offering of Registrable
Securities in a registration statement. No indemnifying party, in the defense
of any such claim or

                                     -20-
<PAGE>

litigation, shall, except with the consent of each indemnified party, consent
to entry of any judgment or enter into any settlement which does not include
as an unconditional term thereof the giving by the claimant or plaintiff to
such indemnified party of a release from all liability in respect of such
claim or litigation.

                6.9 ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause
the Company to register Registrable Securities pursuant to this Section 6 may
be assigned by a Holder to a transferee or assignee of Registrable Securities
which (i) is a subsidiary, parent, general partner, limited partner or
retired partner of a Holder, (ii) is a Holder's family member or trust for
the benefit of an individual Holder, or (iii) acquires at least fifty
thousand (50,000) shares of Registrable Securities (as adjusted for stock
splits and combinations); provided, however, (A) the transferor shall, within
ten (10) days after such transfer, furnish to the Company written notice of
the name and address of such transferee or assignee and the securities with
respect to which such registration rights are being assigned and (B) such
transferee shall agree to be subject to all restrictions set forth in this
Agreement.

                6.10 AMENDMENT OF REGISTRATION RIGHTS. Any provision of this
Section 6 may be amended and the observance thereof may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the Holders
of at least two-thirds (66 2/3%) of the Registrable Securities then
outstanding. Any amendment or waiver effected in accordance with this Section
6.10 shall be binding upon each Holder and the Company. By acceptance of any
benefits under this Section 6, Holders of Registrable Securities hereby agree
to be bound by the provisions hereunder.

                6.11 "MARKET STAND-OFF" AGREEMENT. If requested by the
Company or the representative of the underwriters of Common Stock (or other
securities) of the Company, each Holder shall not sell or otherwise transfer
or dispose of any Common Stock (or other securities) of the Company held by
such Holder (other than those included in the registration) for a period
specified by the representative of the underwriters not to exceed one hundred
eighty (180) days following the effective date of a registration statement of
the Company filed under the Securities Act; and such Holder shall enter into
a reasonable, written lock-up agreement to that effect if requested by the
Company or the representative of the underwriters; provided that:

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

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

                     (iii) The obligations described in this Section 6.11
shall not apply to a registration relating solely to employee benefit plans
on Form S-1 or Form S-8 or similar forms that may be promulgated in the
future, or a registration relating solely to a Commission Rule 145
transaction on Form S-4 or similar forms that may be

                                     -21-
<PAGE>

promulgated in the future. The Company may impose stop-transfer instructions
with respect to the shares of Common Stock (or other securities) subject to
the foregoing restriction until the end of said one hundred eighty (180) day
period.

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

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

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

                     (c) so long as a Holder owns any Registrable Securities,
furnish to such Holder forthwith upon request: a written statement by the
Company as to its compliance with the reporting requirements of said Rule 144
of the Securities Act, and of the Exchange Act (at any time after it has
become subject to such reporting requirements); a copy of the most recent
annual or quarterly report of the Company; and such other reports and
documents as a Holder may reasonably request in availing itself of any rule
or regulation of the SEC allowing it to sell any such securities without
registration.

         SECTION 7.  MISCELLANEOUS.

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

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

                7.3 SUCCESSORS AND ASSIGNS. Except as otherwise expressly
provided herein, the provisions hereof shall inure to the benefit of, and be
binding upon, the successors, assigns, heirs, executors and administrators of
the parties hereto and shall inure to the benefit of and be enforceable by
each person who shall be a holder of the Shares from time to time.

                7.4 ENTIRE AGREEMENT. This Agreement, any and all exhibits
and schedules hereto and the other documents delivered pursuant hereto
constitute the full

                                     -22-
<PAGE>

and entire understanding and agreement between the parties with regard to the
subjects hereof and no party shall be liable or bound to any other in any
manner by any representations, warranties, covenants and agreements except as
specifically set forth herein and therein.

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

                7.6 AMENDMENT AND WAIVER. This Agreement may be amended,
modified or waived only upon the written consent of the Company and Purchaser.

                7.7 DELAYS OR OMISSIONS. It is agreed that no delay or
omission to exercise any right, power or remedy accruing to any party, upon
any breach, default or noncompliance by another party under this Agreement
shall impair any such right, power or remedy, nor shall it be construed to be
a waiver of any such breach, default or noncompliance, or any acquiescence
therein, or of or in any similar breach, default or noncompliance thereafter
occurring. It is further agreed that any waiver, permit, consent or approval
of any kind or character on Purchaser's part of any breach, default or
noncompliance under this Agreement or any waiver on such party's part of any
provisions or conditions of the Agreement must be in writing and shall be
effective only to the extent specifically set forth in such writing.

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

                To the Company:     Dynvax Technologies Corporation
                                    Attention:  President and Chief Executive
                                    Officer
                                    717 Potter Street, Suite 100
                                    Berkeley, CA 94710
                                    Facscimile:  (510) 848-5694

              To the Purchaser:     Triangle Pharmaceuticals, Inc.
                                    Attention:  Chris A. Rallis, Executive
                                    Vice President
                                    Business Development, General Counsel
          (By Express Courier:)     4 University Place, 4611 University Drive
                                    Durham, NC 27707
                  (By Mail:)        P.O. Box 50530
                                    Durham, NC 27717-0530
                                    Facsimile:  (919) 402-1148

                                     -23-
<PAGE>

                7.9 EXPENSES. The Company and Purchaser shall each pay all
costs and expenses that it incurs with respect to the negotiation, execution,
delivery and performance of this Agreement.

                7.10 ATTORNEYS' FEES. In the event that any dispute among the
parties to this Agreement should result in litigation, the prevailing party
or parties in such dispute shall be entitled to recover from the losing party
or parties all fees, costs and expenses of enforcing any right of such
prevailing party or parties under or with respect to this Agreement,
including without limitation, such reasonable fees and expenses of attorneys
and accountants, which shall include, without limitation, all fees, costs and
expenses of appeals.

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

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

                7.13 BROKER'S FEES. Each party hereto represents and warrants
that no agent, broker, investment banker, person or firm acting on behalf of
or under the authority of such party hereto is or will be entitled to any
broker's or finder's fee or any other commission directly or indirectly in
connection with the transactions contemplated herein. Each party hereto
further agrees to indemnify each other party for any claims, losses or
expenses incurred by such other party as a result of the representation in
this paragraph being untrue.

                7.14 PRONOUNS. All pronouns contained herein, and any
variations thereof, shall be deemed to refer to the masculine, feminine or
neutral, singular or plural, as to the identity of the parties hereto may
require.

                                     -24-
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have executed the SERIES T
PREFERRED STOCK PURCHASE AGREEMENT as of the date set forth in the first
paragraph hereof.

COMPANY:                                   PURCHASER:

DYNAVAX TECHNOLOGIES                       TRIANGLE PHARMACEUTICALS, INC.
  CORPORATION

By:   /s/ Dino Dina                        By:  /s/ Chris Rallis
     ----------------------------              ----------------------------
            Dino Dina                                  Chris Rallis
         President & CEO                              President & COO

ADDRESS:                                   ADDRESS:

         Dynavax Technologies Corporation       Triangle Pharmaceuticals, Inc.
         717 Potter Street, Suite 100           4 University Place
         Berkeley, CA  94710                    4611 University Drive
                                                Durham, NC 27707

                                     -25-<PAGE>

                                                                  Exhibit 10.2

                        DYNAVAX TECHNOLOGIES CORPORATION

                           1997 EQUITY INCENTIVE PLAN

                            ADOPTED JANUARY 22, 1997

                          AMENDED ON DECEMBER 17, 1998

                           AMENDED ON JANUARY 20, 2000

                             AMENDED ON MAY 10, 2000

1.   PURPOSES.

     (a) The purpose of the Plan is to provide a means by which selected
Employees and Directors of and Consultants to the Company, and its
Affiliates, may be given an opportunity to benefit from increases in value of
the stock of the Company through the granting of (i) Incentive Stock Options,
(ii) Nonstatutory Stock Options, (iii) stock bonuses, and (iv) rights to
purchase restricted stock.

     (b) The Company, by means of the Plan, seeks to retain the services of
persons who are now Employees or Directors of or Consultants to the Company
or its Affiliates, to secure and retain the services of new Employees,
Directors and Consultants, and to provide incentives for such persons to
exert maximum efforts for the success of the Company and its Affiliates.

     (c) The Company intends that the Stock Awards issued under the Plan
shall, in the discretion of the Board or any Committee to which
responsibility for administration of the Plan has been delegated pursuant to
subsection 3(c), be either (i) Options granted pursuant to Section 6,
including Incentive Stock Options and Nonstatutory Stock Options, or (ii)
stock bonuses or rights to purchase restricted stock granted pursuant to
Section 7. All Options shall be separately designated Incentive Stock Options
or Nonstatutory Stock Options at the time of grant, and in such form as
issued pursuant to Section 6, and a separate certificate or certificates will
be issued for shares purchased on exercise of each type of Option. Further
the Company intends that Stock Awards issued under the Plan shall comply with
the provisions of Rule 701 promulgated by the Securities and Exchange
Commission under the Securities Act and are also intended to be exempt from
the securities qualification requirements of the California Corporations Code
pursuant to Section 25102(o) of that code.

2.   DEFINITIONS.

     (a) "AFFILIATE" means any parent corporation or subsidiary corporation,
whether now or hereafter existing, as those terms are defined in Sections
424(e) and respectively, of the Code.

<PAGE>

     (b) "BOARD" means the Board of Directors of the Company.

     (c) "CAUSE" means, with respect to the termination by the Company or an
Affiliate of an individual's Continuous Status as an Employee, Director or
Consultant, that such termination is for "Cause" as such term is expressly
defined in a then-effective written agreement between the individual and the
Company or such Affiliate, or in the absence of such then-effective written
agreement and definition, is based on, in the determination of the
Administrator, the individual's: (i) refusal or failure to act in accordance
with any specific, lawful direction or order of the Company or an Affiliate;
(ii) unfitness or unavailability for service or unsatisfactory performance
(other than as a result of disability); (iii) performance of any act or
failure to perform any act in bad faith and to the detriment of the Company
or an Affiliate; (iv) dishonesty, intentional misconduct or material breach
of any agreement with the Company or an Affiliate; or (v) commission of a
crime involving dishonesty, breach of trust, or physical or emotional harm to
any person. At least 30 days prior to the termination of the individual's
Continuous Status as an Employee, Director or Consultant pursuant to (i) or
(ii) above, the Company shall provide the individual with notice of the
Company's or such Affiliate's intent to terminate, the reason therefor, and
an opportunity for the individual to cure such defects in his or her service
to the Company's or such Affiliate's satisfaction. During this 30 day (or
longer) period, no Stock Award issued to the individual under the Plan may be
exercised or purchased.

     (d) "CODE" means the Internal Revenue Code of 1986, as amended.

     (e) "COMMITTEE" means a Committee appointed by the Board in accordance
with subsection 3(c) of the Plan.

     (f) "COMPANY" means Dynavax Technologies Corporation, a California
corporation.

     (g) "CONSULTANT" means any person, including an advisor, engaged by the
Company or an Affiliate to render consulting services and who is compensated
for such services, provided that the term "Consultant" shall not include
Directors who are paid only a director's fee by the Company or who are not
compensated by the Company for their services as Directors.

     (h) "CONTINUOUS STATUS AS AN EMPLOYEE, DIRECTOR OR CONSULTANT" means
that the service of an individual to the Company, whether as an Employee,
Director or Consultant, is not interrupted or terminated. The Board or the
chief executive officer of the Company may determine, in that party's sole
discretion, whether Continuous Status as an Employee, Director or Consultant
shall be considered interrupted in the case of: (i) any leave of absence
approved by the Board or the chief executive officer of the Company,
including sick leave, military leave, or any other personal leave; or (ii)
transfers between the Company, Affiliates or their successors.

<PAGE>

     (i) "COVERED EMPLOYEE" means the chief executive officer and the four
(4) other highest compensated officers of the Company for whom total
compensation is required to be reported to shareholders under the Exchange
Act, as determined for purposes of Section 162(m) of the Code.

     (j) "DIRECTOR" means a member of the Board.

     (k) "EMPLOYEE" means any person, including Officers and Directors,
employed by the Company or any Affiliate of the Company. Neither service as a
Director nor payment of a director's fee by the Company shall be sufficient
to constitute "employment" by the Company.

     (l) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.

     (m) "FAIR MARKET VALUE" means, as of any date, the value of the common
stock of the Company determined as follows and in each case in a manner
consistent with Section 260.140.50 of Title 10 of the California Code of
Regulations:

          (i) If the common stock is listed on any established stock exchange
or traded on the Nasdaq National Market or the Nasdaq SmallCap Market, the
Fair Market Value of a share of common stock shall be the closing sales price
for such stock (or the closing bid, if no sales were reported) as quoted on
such exchange or market (or the exchange or market with the greatest volume
of trading in the Company's common stock) on the last market trading day
prior to the day of determination, as reported in THE WALL STREET JOURNAL or
such other source as the Board deems reliable.

          (ii) In the absence of such markets for the common stock, the Fair
Market Value shall be determined in good faith by the Board.

     (n) "GOOD REASON" means the occurrence after a Corporate Transaction (as
defined in Section 12(b)) of any of the following events or conditions unless
consented to by an individual:

          (i) a change in the individual's status, title, position or
responsibilities which represents an adverse change from the individual's
status, title, position or responsibilities as in effect at any time within
six (6) months preceding the date of a Corporate Transaction or at any time
thereafter or (B) the assignment to the individual of any duties or
responsibilities which are inconsistent with the individual's status, title,
position or responsibilities as in effect at any time within six (6) months
preceding the date of a Corporate Transaction or at any time thereafter;

          (ii) reduction in the individual's base salary to a level below
that in effect at any time within six (6) months preceding the date of a
Corporate Transaction or at any time thereafter; or

<PAGE>

          (iii) requiring the individual to be based at any place outside a
forty-mile radius from the individual's job location prior to the Corporate
Transaction except for reasonably required travel on business which is not
materially greater than such travel requirements prior to the Corporate
Transaction.

     (o) "INCENTIVE STOCK OPTION" means an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code and the
regulations promulgated thereunder.

     (p) "LISTING DATE" means the first date upon which any security of the
Company is listed (or approved for listing) upon notice of issuance on any
securities exchange, or designated (or approved for designation) upon notice
of issuance as a national market security on an interdealer quotation system
if such securities exchange or interdealer quotation system has been
certified in accordance with the provisions of Section 25 1 00(o) of the
California Corporate Securities Law of 1968.

     (q) "NON-EMPLOYEE DIRECTOR" means a Director who either (i) is not a
current Employee or Officer of the Company or its parent or subsidiary, does
not receive compensation (directly or indirectly) from the Company or its
parent or subsidiary for services rendered as a consultant or in any capacity
other than as a Director (except for an amount as to which disclosure would
not be required under Item 404(a) of Regulation S-K promulgated pursuant to
the Securities Act ("Regulation S-K")), does not possess an interest in any
other transaction as to which disclosure would be required under Item 404(a)
of Regulation S-K, and is not engaged in a business relationship as to which
disclosure would be required under Item 404(b) of Regulation S-K; or (ii) is
otherwise considered a "non-employee director" for purposes of Rule 16b-3.

     (r) "NONSTATUTORY STOCK OPTION" means an Option not intended to qualify
as an Incentive Stock Option.

     (s) "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.

     (t) "OPTION" means a stock option granted pursuant to the Plan.

     (u) "OPTION AGREEMENT" means a written agreement between the Company and
an Optionee evidencing the terms and conditions of an individual Option
grant. Each Option Agreement shall be subject to the terms and conditions of
the Plan.

     (v) "OPTIONEE" MEANS a person to whom an Option is granted pursuant to
the Plan or, if applicable, such other person who holds an outstanding Option.

     (w) "OUTSIDE DIRECTOR" means a Director who either (i) is not a current
employee of the Company or an "affiliated corporation" (within the meaning of
the Treasury regulations promulgated under Section 162(m) of the Code), is
not a former employee of

<PAGE>

the Company or an "affiliated corporation" receiving compensation for prior
services (other than benefits under a tax qualified pension plan), was not an
officer of the Company or an "affiliated corporation" at any time, and is not
currently receiving direct or indirect remuneration from the Company or an
"affiliated corporation" for services in any capacity other than as a
Director, or (ii) is otherwise considered an "outside director" for purposes
of Section 162(m) of the Code.

     (x) "PLAN" means this 1997 Equity Incentive Plan.

     (y) "RULE 10-3" means Rule 16b-3 of the Exchange Act or any successor to
Rule 16b-3, as in effect with respect to the Company at the time discretion
is being exercised regarding the Plan.

     (z) "SECURITIES ACT" means the Securities Act of 1933, as amended.

     (aa) "STOCK AWARD" means any right granted under the Plan, including any
Option, any stock bonus and any right to purchase restricted stock.

     (bb) "STOCK AWARD AGREEMENT" means a written agreement between the
Company and a holder of a Stock Award evidencing the terms and conditions of
an individual Stock Award grant. Each Stock Award Agreement shall be subject
to the terms and conditions of the Plan.

3.   ADMINISTRATION.

     (a) The Plan shall be administered by the Board unless and until the
Board delegates administration to a Committee, as provided in subsection 3(c).

     (b) The Board shall have the power, subject to, and within the
limitations of, the express provisions of the Plan:

          (i) To determine from time to time which of the persons eligible
under the Plan shall be granted Stock Awards; when and how each Stock Award
shall be granted; whether a Stock Award will be an Incentive Stock Option, a
Nonstatutory Stock Option, a stock bonus, a right to purchase restricted
stock, or a combination of the foregoing; the provisions of each Stock Award
granted (which need not be identical), including the time or times when a
person shall be permitted to receive stock pursuant to a Stock Award; and the
number of shares with respect to which a Stock Award shall be granted to each
such person.

          (ii) To construe and interpret the Plan and Stock Awards granted
under it, and to establish, amend and revoke rules and regulations for its
administration. The Board, in the exercise of this power, may correct any
defect, omission or inconsistency in the Plan or in any Stock Award
Agreement, in a manner and to the extent it shall deem necessary or expedient
to make the Plan fully effective.

<PAGE>

          (iii) To amend the Plan or a Stock Award as provided in Section 13.

          (iv) Generally, to exercise such powers and to perform such acts as
the Board deems necessary or expedient to promote the best interests of the
Company which are not in conflict with the provisions of the Plan.

     (c) The Board may delegate administration of the Plan to a committee of
the Board composed of not fewer than two (2) members (the "Committee"), all
of the members of which Committee may be, in the discretion of the Board,
Non-Employee Directors and/or Outside Directors. If administration is
delegated to a Committee, the Committee shall have, in connection with the
administration of the Plan, the powers theretofore possessed by the Board,
including the power to delegate to a subcommittee of two (2) or more Outside
Directors any of the administrative powers the Committee is authorized to
exercise (and references in this Plan to the Board shall thereafter be to the
Committee or such a subcommittee), subject, however, to such resolutions, not
inconsistent with the provisions of the Plan, as may be adopted from time to
time by the Board. The Board may abolish the Committee at any time and revest
in the Board the administration of the Plan. Additionally, prior to the
Listing Date, and notwithstanding anything to the contrary contained herein,
the Board may delegate administration of the Plan to any person or persons
and the term "Committee" shall apply to any person or persons to whom such
authority has been delegated. Notwithstanding anything in this Section 3 to
the contrary, the Board or the Committee may delegate to a committee of one
or more members of the Board the authority to grant Stock Awards to eligible
persons who (1) are not then subject to Section 16 of the Exchange Act and/or
(2) are either (i) not then Covered Employees and are not expected to be
Covered Employees at the time of recognition of income resulting from such
Stock Award, or (ii) not persons with respect to whom the Company wishes to
comply with Section 162(m) of the Code.

4.   SHARES SUBJECT TO THE PLAN.

     (a) Subject to the provisions of Section 12 relating to adjustments upon
changes in stock, the stock that may be issued pursuant to Stock Awards shall
not exceed in the aggregate three million four hundred forty three thousand
six hundred thirty (3,443,630) shares of the Company's common stock. If any
Stock Award shall for any reason expire or otherwise terminate, in whole or
in part, without having been exercised in full, the stock not acquired under
such Stock Award shall revert to and again become available for issuance
under the Plan.

     (b) The stock subject to the Plan may be unissued shares or reacquired
shares, bought on the market or otherwise.

5.   ELIGIBILITY.

     (a) Incentive Stock Options may be granted only to Employees. Stock
Awards other than Incentive Stock Options may be granted only to Employees,
Directors or Consultants.

<PAGE>

     (b) No person shall be eligible for the grant of an Option or an award
to purchase restricted stock if, at the time of grant, such person owns (or
is deemed to own pursuant to Section 424(d) of the Code) stock possessing
more than ten percent (10%) of the total combined voting power of all classes
of stock of the Company or of any of its Affiliates unless the exercise price
of such Option is at least one hundred ten percent (110%) of the Fair Market
Value of such stock at the date of grant and the Option is not exercisable
after the expiration of five (5) years from the date of grant, or in the case
of a restricted stock purchase award, the purchase price is at least one
hundred percent (100%) of the Fair Market Value of such stock at the date of
grant.

     (c) Subject to the provisions of Section 12 relating to adjustments upon
changes in stock, no person shall be eligible to be granted Options covering
more than seven hundred thousand (700,000) shares of the Company's common
stock in any calendar year. This subsection 5(c) shall not apply prior to the
Listing Date and, following the Listing Date, shall not apply until (i) the
earliest of-. (A) the first material, modification of the Plan (including any
increase to the number of shares reserved for issuance under the Plan in
accordance with Section 4); (B) the issuance of all of the shares of common
stock reserved for issuance under the Plan; (C) the expiration of the Plan;
or (D) the first meeting of shareholders at which directors are to be elected
that occurs after the close of the third calendar year following the calendar
year in which occurred the first registration of an equity security under
section 12 of the Exchange Act; or (ii) such other date required by Section
162(m) of the Code and the rules and regulations promulgated thereunder.

6.   OPTION PROVISIONS.

     Each Option shall be in such form and shall contain such terms and
conditions as the Board shall deem appropriate. The provisions of separate
Options need not be identical, but each Option shall include (through
incorporation of provisions hereof by reference in the Option or otherwise)
the substance of each of the following provisions:

     (a) TERM. No Option shall be exercisable after the expiration of ten
(10) years from the date it was granted.

     (b) PRICE. The exercise price of each Incentive Stock Option shall be
not less than one hundred percent (100%) of the Fair Market Value of the
stock subject to the Option on the date the Option is granted; the exercise
price of each Nonstatutory Stock Option shall be not less than eighty-five
percent (85%) of the Fair Market Value of the stock subject to the Option on
the date the Option is granted. Notwithstanding the foregoing, an Option
(whether an Incentive Stock Option or a Nonstatutory Stock Option) may be
granted with an exercise price lower than that set forth in the preceding
sentence if such Option is granted pursuant to an assumption or substitution
for another option in a manner satisfying the provisions of Section 424(a) of
the Code.

     (c) CONSIDERATION. The purchase price of stock acquired pursuant to an
Option shall be paid, to the extent permitted by applicable statutes and
regulations, either (i) in

<PAGE>

cash at the time the Option is exercised, or (ii) at the discretion of the
Board or the Committee, at the time of the grant of the Option, (A) by
delivery to the Company of other common stock of the Company, (B) according
to a deferred payment or other arrangement (which may include, without
limiting the generality of the foregoing, the use of other common stock of
the Company) with the person to whom the Option is granted or to whom the
Option is transferred pursuant to subsection 6(d), or (C) in any other form
of legal consideration that may be acceptable to the Board.

     In the case of any deferred payment arrangement, interest shall be
compounded at least annually and shall be charged at the minimum rate of
interest necessary to avoid the treatment as interest, under any applicable
provisions of the Code, of any amounts other than amounts stated to be
interest under the deferred payment arrangement.

     (d) TRANSFERABILITY. An Option shall not be transferable except by will
or by the laws of descent and distribution, and shall be exercisable during
the lifetime of the person to whom the Option is granted only by such person.
The person to whom the Option is granted may, by delivering written notice to
the Company, in a form satisfactory to the Company, designate a third party
who, in the event of the death of the Optionee, shall thereafter be entitled
to exercise the Option.

     (e) VESTING. The total number of shares of stock subject to an Option
may, but need not, be allotted in periodic installments (which may, but need
not, be equal). The Option Agreement may provide that from time to time
during each of such installment periods, the Option may become exercisable
("vest") with respect to some or all of the shares allotted to that period,
and may be exercised with respect to some or all of the shares allotted to
such period and/or any prior period as to which the Option became vested but
was not fully exercised. The Option may be subject to such other terms and
conditions on the time or times when it may be exercised (which may be based
on performance or other criteria) as the Board may deem appropriate. The
vesting provisions of individual Options may vary but in each case will
provide for vesting of at least twenty percent (20%) per year of the total
number of shares subject to the Option; PROVIDED, HOWEVER, that an Option
granted to an officer, director or consultant (within the meaning of Section
260.140.41 of Title 10 of the California Code of Regulations) may become
fully exercisable, subject to reasonable conditions such as continued
employment, at any time or during any period established by the Company or of
any of its Affiliates. The provisions of this subsection 6(e) are subject to
any Option provisions governing the minimum number of shares as to which an
Option may be exercised.

     (f) TERMINATION OF EMPLOYMENT OR RELATIONSHIP AS A DIRECTOR OR
CONSULTANT. In the event an Optionee's Continuous Status as an Employee,
Director or Consultant terminates (other than upon the Optionee's death or
disability), the Optionee may exercise his or her Option (to the extent that
the Optionee was entitled to exercise it as of the date of termination) but
only within such period of time ending on the earlier of (i) the date three
(3) months following the termination of the Optionee's Continuous Status as
an Employee, Director or Consultant (or such longer or shorter period, which
shall not be

<PAGE>

less than thirty (30) days, unless such termination is for cause, specified
in the Option Agreement), or (ii) the expiration of the term of the Option as
set forth in the Option Agreement. If, at the date of termination, the
Optionee is not entitled to exercise his or her entire Option, the shares
covered by the unexercisable portion of the Option shall revert to and again
become available for issuance under the Plan. If, after termination, the
Optionee does not exercise his or her Option within the time specified in the
Option Agreement, the Option shall terminate, and the shares covered by such
Option shall revert to and again become available for issuance under the Plan.

     An Optionee's Option Agreement may also provide that if the exercise of
the Option following the termination of the Optionee's Continuous Status as
an Employee, Director, or Consultant (other than upon the Optionee's death or
disability) would result in liability under Section 16(b) of the Exchange
Act, then the Option shall terminate on the earlier of (i) the expiration of
the term of the Option set forth in the Option Agreement, or (ii) the tenth
(10th) day after the last date on which such exercise would result in such
liability under Section 16(b) of the Exchange Act. Finally, an Optionee's
Option Agreement may also provide that if the exercise of the Option
following the termination of the Optionee's Continuous Status as an Employee,
Director or Consultant (other than upon the Optionee's death or disability)
would be prohibited at any time solely because the issuance of shares would
violate the registration requirements under the Securities Act, then the
Option shall terminate on the earlier of (1) the expiration of the ten-n of
the Option set forth in the first paragraph of this subsection 6(t), or (ii)
the expiration of a period of three (3) months after the termination of the
Optionee's Continuous Status as an Employee, Director or Consultant during
which the exercise of the Option would not be in violation of such
registration requirements.

     (g) DISABILITY OF OPTIONEE. In the event an Optionee's Continuous Status
as an Employee, Director or Consultant terminates as a result of the
Optionee's disability, the Optionee may exercise his or her Option (to the
extent that the Optionee was entitled to exercise it as of the date of
termination), but only within such period of time ending on the earlier of
(i) the date twelve (12) months following such termination (or such longer or
shorter period, which in no event shall be less than six (6) months,
specified in the Option Agreement), or (ii) the expiration of the term of the
Option as set forth in the Option Agreement. If, at the date of termination,
the Optionee is not entitled to exercise his or her entire Option, the shares
covered by the unexercisable portion of the Option shall revert to and again
become available for issuance under 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 and again become available for issuance under the Plan.

     (h) DEATH OF OPTIONEE. In the event of the death of an Optionee during,
or within a period specified in the Option Agreement after the termination
of, the Optionee's Continuous Status as an Employee, Director or Consultant,
the Option may be exercised (to the extent the Optionee was entitled to
exercise the Option as of the date of death) by the Optionee's estate, by a
person who acquired the right to exercise the Option by

<PAGE>

bequest or inheritance or by a person designated to exercise the option upon
the Optionee's death pursuant to subsection 6(d), but only within the period
ending on the earlier of (i) the date eighteen (18) months following the date
of death (or such longer or shorter period, which in no event shall be less
than six (6) months, specified in the Option Agreement), or (ii) the
expiration of the term of such Option as set forth in the Option Agreement.
If, at the time of death, the Optionee was not entitled to exercise his or
her entire Option, the shares covered by the unexercisable portion of the
Option shall revert to and again become available for issuance under the
Plan. If, after death, the Option is not exercised within the time specified
herein, the Option shall terminate, and the shares covered by such Option
shall revert to and again become available for issuance under the Plan.

     (i) EARLY EXERCISE. The Option may, but need not, include a provision
whereby the Optionee may elect at any time while an Employee, Director or
Consultant to exercise the Option as to any part or all of the shares subject
to the Option prior to the full vesting of the Option. Any unvested shares so
purchased shall be subject to a repurchase right in favor of the Company,
with the repurchase price to be equal to the original purchase price of the
stock, or to any other restriction the Board determines to be appropriate;
PROVIDED, HOWEVER, that (i) the right to repurchase at the original purchase
price shall lapse at a minimum rate of twenty percent (20%) per year over
five (5) years from the date the Option was granted, and (ii) such right
shall be exercisable only within (A) the ninety (90) day period following the
termination of employment or the relationship as a Director or Consultant, or
(B) such longer period as may be agreed to by the Company and the Optionee
(for example, for purposes of satisfying the requirements of Section
1202(c)(3) of the Code (regarding "qualified small business stock")), and
(iii) such right shall be exercisable only for cash or cancellation of
purchase money indebtedness for the shares. Should the right of repurchase be
assigned by the Company, the assignee shall pay the Company cash equal to the
difference between the original purchase price and the stock's Fair Market
Value if the original purchase price is less than the stock's Fair Market
Value. Notwithstanding the foregoing, shares received on exercise of an
Option by an officer, director or consultant (within the meaning of Section
260.140.41 of Title 10 of the California Code of Regulations) may be subject
to additional or greater restrictions.

     (j) RIGHT OF REPURCHASE. The Option may, but need not, include a
provision whereby the Company may elect, prior to the Listing Date, or prior
to the occurrence of an event constituting a "Change in Control" as defined
in subsection 12(b) of the Plan, to repurchase all or any part of the vested
shares exercised pursuant to the Option; PROVIDED, HOWEVER, that (i) such
repurchase right shall be exercisable only within (A) the ninety (90) day
period following the termination of employment or the relationship as a
Director or Consultant (or in the case of post-termination exercise of the
Option the ninety (90) day period following such post-termination exercise),
or (B) such longer period as may be agreed to by the Company and the Optionee
(for example, for purposes of satisfying the requirements of Section
1202(c)(3) of the Code (regarding "qualified small business stock")), (ii)
such repurchase right shall be exercisable for less than all of the vested
shares only with the Optionee's consent, and (iii) such right shall be
exercisable only for

<PAGE>

cash or cancellation of purchase money indebtedness for the shares at a
repurchase price equal to the greater of (A) the stock's Fair Market Value at
the time of such termination or (B) the original purchase price paid for such
shares by the Optionee. Notwithstanding the foregoing, shares received on
exercise of an Option by an officer, director or consultant (within the
meaning of Section 260.140.41 of Title 10 of the California Code of
Regulations) may be subject to additional or greater restrictions specified
in the Option Agreement.

     (k) RIGHT OF FIRST REFUSAL. The Option may, but need not, include a
provision whereby the Company may elect, prior to the Listing Date, to
exercise a right of first refusal following receipt of notice from the
Optionee of the intent to transfer all or any part of the shares exercised
pursuant to the Option.

     (l) RE-LOAD OPTIONS. Without in any way limiting the authority of the
Board or Committee to make or not to make grants of Options hereunder, the
Board or Committee shall have the authority (but not an obligation) to
include as part of any Option Agreement a provision entitling the Optionee to
a further Option (a "Re-Load Option") in the event the Optionee exercises the
Option evidenced by the Option agreement, in whole or in part, by
surrendering other shares of Common Stock in accordance with this Plan and
the terms and conditions of the Option Agreement. Any such Re-Load Option (i)
shall be for a number of shares equal to the number of shares surrendered as
part or all of the exercise price of such Option; (ii) shall have an
expiration date which is the same as the expiration date of the Option the
exercise of which gave rise to such Re-Load Option; and (iii) shall have an
exercise price which is equal to one hundred percent (100%) of the Fair
Market Value of the Common Stock subject to the Re-Load Option on the date of
exercise of the original Option. Notwithstanding the foregoing, a Re-Load
Option which is granted to a 10% shareholder (as described in subsection
5(b)), shall have an exercise price which is equal to one hundred ten percent
(110%) of the Fair Market Value of the stock subject to the Re-Load Option on
the date of exercise of the original Option and shall have a term which is no
longer than five (5) years.

     Any such Re-Load Option may be an Incentive Stock Option or a
Nonstatutory Stock Option, as the Board or Committee may designate at the
time of the grant of the original Option; PROVIDED, HOWEVER, that the
designation of any Re-Load Option as an Incentive Stock Option shall be
subject to the one hundred thousand dollar ($100,000) annual limitation on
exercisability of Incentive Stock Options described in subsection 12(e) of
the Plan and in Section 422(d) of the Code. There shall be no Re-Load Options
on a Re-Load Option. Any such Re-Load Option shall be subject to the
availability of sufficient shares under subsection 4(a) and the limits on the
grants of Options under subsection 5(c) and shall be subject to such other
terms and conditions as the Board or Committee may determine which are not
inconsistent with the express provisions of the Plan regarding the terms of
Options.

<PAGE>

7.   TERMS OF STOCK BONUSES AND PURCHASES OF RESTRICTED STOCK.

     Each stock bonus or restricted stock purchase agreement shall be in such
form and shall contain such terms and conditions as the Board or the
Committee shall deem appropriate. The terms and conditions of stock bonus or
restricted stock purchase agreements may change from time to time, and the
terms and conditions of separate agreements need not be identical, but each
stock bonus or restricted stock purchase agreement shall include (through
incorporation of provisions hereof by reference in the agreement or
otherwise) the substance of each of the following provisions as appropriate:

     (a) PURCHASE PRICE. The purchase price under each restricted stock
purchase agreement shall be such amount as the Board or Committee shall
determine and designate in such Stock Award Agreement, but in no event shall
the purchase price be less than eighty-five percent (85%) of the stock's Fair
Market Value on the date such award is made. Notwithstanding the foregoing,
the Board or the Committee may determine that eligible participants in the
Plan may be awarded stock. pursuant to a stock bonus agreement in
consideration for past services actually rendered to the Company or for its
benefit.

     (b) TRANSFERABILITY. Rights under a stock bonus or restricted stock
purchase agreement shall be transferable by the grantee only upon such terms
and conditions as are set forth in the applicable Stock Award Agreement, as
the Board or the Committee shall determine in its discretion, so long as
stock awarded under such Stock Award Agreement remains subject to the terms
of the agreement.

     (c) CONSIDERATION. The purchase price of stock acquired pursuant to a
stock purchase agreement shall be paid either: (i) in cash at the time of
purchase; (ii) at the discretion of the Board or the Committee, according to
a deferred payment or other arrangement with the person to whom the stock is
sold; or (iii) in any other form of legal consideration that may be
acceptable to the Board or the Committee in its discretion. Notwithstanding
the foregoing, the Board or the Committee to which administration of the Plan
has been delegated may award stock pursuant to a stock bonus agreement in
consideration for past services actually rendered to the Company or for its
benefit.

     (d) VESTING. Shares of stock sold or awarded under the Plan may, but
need not, be subject to a repurchase option in favor of the Company in
accordance with a vesting schedule to be determined by the Board or the
Committee. The applicable agreement shall provide (i) that the right to
repurchase at the original purchase price (or, in the case of a stock bonus,
Fair Market Value on the grant date) shall lapse at a minimum rate of twenty
percent (20%) per year over five (5) years from the date the Stock Award was
granted (except that a Stock Award granted to an officer, director or
consultant (within the meaning of Section 260.140.41 of Title 10 of the
California Code of Regulations) may become fully vested, subject to
reasonable conditions such as continued employment, at any time or during any
period established by the Company or of any of its Affiliates), and (ii) such
right shall be exercisable only (A) within the ninety (90) day

<PAGE>

period following the termination of employment or the relationship as a
Director or Consultant, or (B) such longer period as may be agreed to by the
Company and the holder of the Stock Award (for example, for purposes of
satisfying the requirements of Section 1202(c)(3) of the Code (regarding
"qualified small business stock")), and (iii) such right shall be exercisable
only for cash or cancellation of purchase money indebtedness for the shares.
Should the right of repurchase be assigned by the Company, the assignee shall
pay the Company cash equal to the difference between the original purchase
price and the stock's Fair Market Value if the original purchase price is
less than the stock's Fair Market Value.

     (e) TERMINATION OF EMPLOYMENT OR RELATIONSHIP AS A DIRECTOR OR
CONSULTANT. In the event a Participant's Continuous Status as an Employee,
Director or Consultant terminates, the Company may repurchase or otherwise
reacquire, subject to the limitations described in subsection 7(d), any or
all of the shares of stock held by that person which have not vested as of
the date of termination under the terms of the stock bonus or restricted
stock purchase agreement between the Company and such person.

     (f) RIGHT OF REPURCHASE. The stock bonus or restricted stock purchase
agreement may, but need not, include a provision whereby the Company may
elect, prior to the Listing Date, or prior to the occurrence of an event
constituting a "Change in Control" as defined in subsection 12(b) of the
Plan, to repurchase all or any part of the vested shares received pursuant to
the stock bonus or restricted stock purchase agreement; PROVIDED, HOWEVER,
that (i) such repurchase right shall be exercisable only within (A) the
ninety (90) day period following the termination of employment or the
relationship as a Director or Consultant, or (B) such longer period as may be
agreed to by the Company and the grantee (for example, for purposes of
satisfying the requirements of Section 1202(c)(3) of the Code (regarding
"qualified small business stock")), (ii) such repurchase right shall be
exercisable for less than all of the vested shares only with the grantee's
consent, and (iii) such right shall be exercisable only for cash or
cancellation of purchase money indebtedness for the shares at a repurchase
price equal to the greater of (A) the stock's Fair Market Value at the time
of such termination or (B) the original purchase price paid for such shares
by the grantee (or in the case of a stock bonus, Fair Market Value on the
grant date).

8.   CANCELLATION AND RE-GRANT OF OPTIONS.

     (a) The Board or the Committee shall have the authority to effect, at
any time and from time to time, (i) the repricing of any outstanding Options
under the Plan and/or (ii) with the consent of the affected holders of
Options, the cancellation of any outstanding Options under the Plan and the
grant in substitution therefor of new Options under the Plan covering the
same or different numbers of shares of stock, but having an exercise price
per share not less than eighty-five percent (85%) of the Fair Market Value
(one hundred percent (100%) of the Fair Market Value in the case of an
Incentive Stock Option) or, in the case of a 10% shareholder (as described in
subsection 5(b)), not less than one hundred ten percent (110%) of the Fair
Market Value) per share of stock on the

<PAGE>

new grant date. Notwithstanding the foregoing, the Board or the Committee may
grant an Option with an exercise price lower than that set forth above if
such Option is granted as part of a transaction to which section 424(a) of
the Code applies.

     (b) Shares subject to an Option canceled under this Section 8 shall
continue to be counted against the maximum award of Options permitted to be
granted pursuant to subsection 5(c) of the Plan. The repricing of an Option
under this Section 8, resulting in a reduction of the exercise price, shall
be deemed to be a cancellation of the original Option and the grant of a
substitute Option; in the event of such repricing, both the original and the
substituted Options shall be counted against the maximum awards of Options
permitted to be granted pursuant to subsection 5(c) of the Plan. The
provisions of this subsection 8(b) shall be applicable only to the extent
required by Section 162(m) of the Code.

9.   COVENANTS OF THE COMPANY.

     (a) During the terms of the Stock Awards, the Company shall keep
available at all times the number of shares of stock required to satisfy such
Stock Awards.

     (b) The Company shall seek to obtain from each regulatory commission or
agency having jurisdiction over the Plan such authority as may be required to
issue and sell shares of stock upon exercise of the Stock Award; provided,
however, that this undertaking shall not require the Company to register
under the Securities Act either the Plan, any Stock Award or any stock issued
or issuable pursuant to any such Stock Award. If, after reasonable efforts,
the Company is unable to obtain from any such regulatory commission or agency
the authority which counsel for the Company deems necessary for the lawful
issuance and sale of stock under the Plan, the Company shall be relieved from
any liability for failure to issue and sell stock upon exercise of such Stock
Awards unless and until such authority is obtained.

10.  USE OF PROCEEDS FROM STOCK.

     Proceeds from the sale of stock pursuant to Stock Awards shall
constitute general funds of the Company.

11.  MISCELLANEOUS.

     (a) Subject to any applicable provisions of the California Corporate
Securities Law of 1968 and related regulations relied upon as a condition of
issuing securities pursuant to the Plan, the Board shall have the power to
accelerate the time at which a Stock Award may first be exercised or the time
during which a Stock Award or any part thereof will vest pursuant to
subsection 6(e) or 7(d), notwithstanding the provisions in the Stock Award
stating the time at which it may first be exercised or the time during which
it will vest.

<PAGE>

     (b) Neither an Employee, Director or Consultant nor any person to whom a
Stock Award is transferred under subsection 6(d) or 7(b) shall be deemed to
be the holder of, or to have any of the rights of a holder with respect to,
any shares subject to such Stock Award unless and until such person has
satisfied all requirements for exercise of the Stock Award pursuant to its
terms.

     (c) Throughout the term of any Stock Award, the Company shall deliver to
the holder of such Stock Award, not later than one hundred twenty (120) days
after the close of each of the Company's fiscal years during the term of such
Stock Award, a balance sheet and an income statement. This subsection shall
not apply (i) after the Listing Date, or (11) when issuance is limited to key
employees whose duties in connection with the Company assure them access to
equivalent information. The Company shall comply with other information
delivery requirements as applicable, including, but not limited to, Rule 428
of the Securities Act.

     (d) Nothing in the Plan or any instrument executed or Stock Award
granted pursuant thereto shall confer upon any Employee, Director, Consultant
or other holder of Stock Awards any right to continue in the employ of the
Company or any Affiliate (or to continue acting as a Director or Consultant)
or shall affect the right of the Company or any Affiliate to terminate the
employment of any Employee with or without cause the right of the Company's
Board of Directors and/or the Company's shareholders to remove any Director
as provided in the Company's By-Laws and the provisions of the California
Corporations Code, or the right to terminate the relationship of any
Consultant subject to the terms of such Consultant's agreement with the
Company or Affiliate.

     (e) To the extent that the aggregate Fair Market Value (determined at
the time of grant) of stock with respect to which Incentive Stock Options are
exercisable for the first time by any Optionee during any calendar year under
all plans of the Company and its Affiliates exceeds one hundred thousand
dollars ($100,000), the Options or portions thereof which exceed such limit
(according to the order in which they were granted) shall be treated as
Nonstatutory Stock Options.

     (f) The Company may require any person to whom a Stock Award is granted,
or any person to whom a Stock Award is transferred pursuant to subsection
6(d) or 7(b), as a condition of exercising or acquiring stock under any Stock
Award, (1) to give written assurances satisfactory to the Company as to such
person's knowledge and experience in financial and business matters and/or to
employ a purchaser representative reasonably satisfactory to the Company who
is knowledgeable and experienced in financial and business matters, and that
such person is capable of evaluating, alone or together with the purchaser
representative, the merits and risks of exercising the Stock Award; and (2)
to give written assurances satisfactory to the Company stating that such
person is acquiring the stock subject to the Stock Award for such person's
own account and not with any present intention of selling or otherwise
distributing the stock. The foregoing requirements, and any assurances given
pursuant to such requirements, shall be inoperative if (i) the issuance of
the shares upon the exercise or acquisition of stock under

<PAGE>

the Stock Award has been registered under a then currently effective
registration statement under the Securities Act, or (ii) as to any particular
requirement, a determination is made by counsel for the Company that such
requirement need not be met in the circumstances under the then applicable
securities laws. The Company may, upon advice of counsel to the Company,
place legends on stock certificates issued under the Plan as such counsel
deems necessary or appropriate in order to comply with applicable securities
laws, including, but not limited to, legends restricting the transfer of the
stock.

     (g) To the extent provided by the terms of a Stock Award Agreement, the
person to whom a Stock Award is granted may satisfy any federal, state or
local tax withholding obligation relating to the exercise or acquisition of
stock under a Stock Award by any of the following means or by a combination
of such means: (1) tendering a cash payment; (2) authorizing the Company to
withhold shares from the shares of the common stock otherwise issuable to the
participant as a result of the exercise or acquisition of stock under the
Stock Award; or (3) delivering to the Company owned and unencumbered shares
of the common stock of the Company.

12.  ADJUSTMENTS UPON CHANGES IN STOCK.

     (a) If any change is made in the stock subject to the Plan, or subject
to any Stock Award (through merger, consolidation, reorganization,
recapitalization, reincorporation, stock dividend, dividend in property other
than cash, stock split, liquidating dividend, combination of shares, exchange
of shares, change in corporate structure or other transaction not involving
the receipt of consideration by the Company), the Plan will be appropriately
adjusted in the type(s) and maximum number of securities subject to the Plan
pursuant to subsection 4(a) and the maximum number of securities subject to
award to any person during any calendar year pursuant to subsection 5(c), and
the outstanding Stock Awards will be appropriately adjusted in the type(s)
and number of securities and price per share of stock subject to such
outstanding Stock Awards. Such adjustments shall be made by the Board or the
Committee, the determination of which shall be final, binding and conclusive.
(The conversion of any convertible securities of the Company shall not be
treated as a "transaction not involving the receipt of consideration by the
Company".)

     (b) In the event of: (1) a dissolution, liquidation or sale of all or
substantially all of the assets of the Company; (2) a merger or consolidation
in which the Company is not the surviving corporation; or (3) a reverse
merger in which the Company is the surviving corporation but the shares of
the Company's common stock outstanding immediately preceding the merger are
converted by virtue of the merger into other property, whether in the form of
securities, cash or otherwise (each event, a "Corporate Transaction"); then:
(i) any surviving corporation or acquiring corporation shall assume any Stock
Awards outstanding under the Plan or shall substitute similar stock awards
(including an award to acquire the same consideration paid to the
stockholders in the transaction described in this subsection 13(b)) for those
outstanding under the Plan, or (ii) in the event any surviving corporation or
acquiring corporation refuses to assume such Stock Awards or to

<PAGE>

substitute similar stock awards for those outstanding under the Plan, (A)
with respect to Stock Awards held by persons then performing services as
Employees, Directors or Consultants and subject to any applicable provisions
of the California Corporate Securities Law of 1968 and related regulations
relied upon as a condition of issuing securities pursuant to the Plan, the
vesting of such Stock Awards (and, if applicable, the time during which such
Stock Awards may be exercised) shall be accelerated prior to such event and
the Stock Awards terminated if not exercised (if applicable) after such
acceleration and at or prior to such event, and (B) with respect to any other
Stock Awards outstanding under the Plan, such Stock Awards shall be
terminated if not exercised (if applicable) prior to such event. To the
extent that any surviving corporation or successor acquiring corporation
assumes any Stock Awards outstanding under the Plan or substitutes similar
stock awards for those outstanding under the Plan, then such Stock Award (if
assumed) or replacement stock award (if replaced) automatically shall become
fully vested and exercisable and be released from any restrictions on
transfer (other than transfer restrictions applicable to Options) and
repurchase or forfeiture rights, immediately upon termination of such
individual's Continuous Status as an Employee, Director or Consultant
(substituting the successor employer corporation for "Company" or "Affiliate"
for the definition of "Continuous Status as an Employee, Director or
Consultant") if such Continuous Status as an Employee, Director or Consultant
is terminated by the successor company without Cause or voluntarily by the
Optionee with Good Reason within two (2) years of the Corporate Transaction.

13.  AMENDMENT OF THE PLAN AND STOCK AWARDS.

     (a) The Board at any time, and from time to time, may amend the Plan.
However, except as provided in Section 12 relating to adjustments upon
changes in stock, no amendment shall be effective unless approved by the
shareholders of the Company within twelve (12) months before or after the
adoption of the amendment, where the amendment will:

          (1) Increase the number of shares reserved for Stock Awards under
the Plan;

          (2) Modify the requirements as to eligibility for participation in
the Plan (to the extent such modification requires shareholder approval in
order for the Plan to satisfy the requirements of Section 422 of the Code); or

          (3) Modify the Plan in any other way if such modification requires
shareholder approval in order for the Plan to satisfy the requirements of
Section 422 of the Code or to comply with the requirements of Rule 16b-3.

     (b) The Board may in its sole discretion submit any other amendment to
the Plan for shareholder approval, including, but not limited to, amendments
to the Plan intended to satisfy the requirements of Section 162(m) of the
Code and the regulations promulgated thereunder regarding the exclusion of
performance-based compensation

<PAGE>

from the limit on corporate deductibility of compensation paid to certain
executive officers.

     (c) It is expressly contemplated that the Board may amend the Plan in
any respect the Board deems necessary or advisable to provide eligible
Employees with the maximum benefits provided or to be provided under the
provisions of the Code and the regulations promulgated thereunder relating to
Incentive Stock Options and/or to bring the Plan and/or Incentive Stock
Options granted under it into compliance therewith.

     (d) Rights and obligations under any Stock Award granted before
amendment of the Plan shall not be impaired by any amendment of the Plan
unless (i) the Company requests the consent of the person to whom the Stock
Award was granted and (ii) such person consents in writing.

     (e) The Board at any time, and from time to time, may amend the terms of
any one or more Stock Award; provided, however, that the rights and
obligations under any Stock Award shall not be impaired by any such amendment
unless (i) the Company requests the consent of the person to whom the Stock
Award was granted and (ii) such person consents in writing.

14.  TERMINATION OR SUSPENSION OF THE PLAN.

     (a) The Board may suspend or terminate the Plan at any time. Unless
sooner terminated, the Plan shall terminate ten (10) years from the date the
Plan is adopted by the Board or approved by the shareholders of the Company,
whichever is earlier. No Stock Awards may be granted under the Plan while the
Plan is suspended or after it is terminated.

     (b) Rights and obligations under any Stock Award granted while the Plan
is in effect shall not be impaired by suspension or termination of the Plan,
except with the written consent of the person to whom the Stock Award was
granted.

15.  EFFECTIVE DATE OF PLAN.

     The Plan shall become effective as determined by the Board, but no
Options granted under the Plan shall be exercised and no shares of the
Company's common stock subject to other Stock Awards shall be sold, disposed,
or otherwise transferred unless and until the Plan has been approved by the
shareholders of the Company, which approval shall be within twelve (12)
months before or after the date the Plan is adopted by the Board.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00018-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00018-of-00352.parquet"}]]