Document:

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                                                                   Exhibit 4.3

                        DYNAVAX TECHNOLOGIES CORPORATION

                   SECOND AMENDED INVESTORS' RIGHTS AGREEMENT

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                                TABLE OF CONTENTS

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                                                                                                                PAGES
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1.
GENERAL...........................................................................................................1

         1.1      Definitions.....................................................................................1

2.       REGISTRATION; RESTRICTIONS ON TRANSFER...................................................................3

         2.1      Restrictions on Transfer........................................................................3
         2.2      Demand Registration.............................................................................4
         2.3      Piggyback Registrations.........................................................................5
                  (a)      Underwriting...........................................................................6
                  (b)      Right to Terminate Registration........................................................6

         2.4      Form S-3 Registration...........................................................................6
         2.5      Expenses of Registration........................................................................7
         2.6      Obligations of the Company......................................................................8
         2.7      Termination of Registration Rights..............................................................9
         2.8      Delay of Registration; Furnishing Information...................................................9
         2.9      Indemnification.................................................................................9
         2.10     Assignment of Registration Rights..............................................................11
         2.11     Amendment of Registration Rights...............................................................12
         2.12     Limitation on Subsequent Registration Rights...................................................12
         2.13     "Market Stand-Off" Agreement...................................................................12
         2.14     Rule 144 Reporting.............................................................................13

3.       COVENANTS OF THE COMPANY................................................................................13

         3.1      Basic Financial Information and Reporting......................................................13
         3.2      Inspection and Other Rights....................................................................14
         3.3      Confidentiality of Records.....................................................................14
         3.4      Board of Directors Approval....................................................................15
         3.5      Preferred Stock Approval.......................................................................15
         3.6      Reservation of Common Stock....................................................................15
         3.7      Vesting........................................................................................15
         3.8      Key Man Insurance..............................................................................15
         3.9      Proprietary Information and Inventions Agreement...............................................16
         3.10     Real Property Holding Corporation..............................................................16
         3.11     Reimbursement of Expenses......................................................................16
         3.12     Indemnification................................................................................16
         3.13     Small Business Administration Matters..........................................................16
         3.14     Termination of Covenants.......................................................................18

4.       RIGHTS OF FIRST REFUSAL.................................................................................18

         4.1      Subsequent Offerings...........................................................................18

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         4.2      Exercise of Rights.............................................................................18
         4.3      Issuance of Equity Securities to Other Persons.................................................18
         4.4      Termination of Rights of First Refusal.........................................................19
         4.5      Transfer of Rights of First Refusal............................................................19
         4.6      Excluded Securities............................................................................19

5.       VOTING..................................................................................................21

         5.1      Shares of Voting Stock.........................................................................20
         5.2      Board of Directors.............................................................................20
         5.3      Termination....................................................................................20

6.       MISCELLANEOUS...........................................................................................20

         6.1      Governing Law..................................................................................20
         6.2      Survival.......................................................................................21
         6.3      Successors and Assigns.........................................................................21
         6.4      Severability...................................................................................21
         6.5      Amendment and Waiver...........................................................................21
         6.6      Delays or Omissions............................................................................21
         6.7      Notices........................................................................................21
         6.8      Attorneys'Fees.................................................................................22
         6.9      Titles and Subtitles...........................................................................22
         6.10     Counterparts...................................................................................22
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                   SECOND AMENDED INVESTORS' RIGHTS AGREEMENT

         THIS SECOND AMENDED INVESTORS' RIGHTS AGREEMENT (the "Agreement") is
entered into as of June 13, 2000, by and among Dynavax Technologies Corporation,
a California corporation (the "Company"), the purchasers of the Company's Series
A Preferred Stock (the "Series A Shareholders"), the purchasers of the Company's
Series B Preferred Stock ("Series B Shareholders") and the purchasers of the
Company's Series C Preferred Stock ("Series C Preferred Stock") pursuant to that
certain Series C Preferred Stock Purchase Agreement dated as of May 12, 2000
(the "Purchase Agreement"). This Agreement amends, restates and supercedes that
certain First Amended Investors' Rights Agreement dated as of July 31, 1998, by
and among the Company, the Series A Shareholders and the Series B Shareholders.
The purchasers of the Series C Preferred Stock (the "Series C Shareholders"),
and each purchaser of the Company's Series A Preferred Stock and Series B
Preferred Stock, shall be referred to hereinafter as the "Investors" and each
individually as an "Investor."

                                    RECITALS

         A. Whereas, certain of the Series A Shareholders and Series B
Shareholders hold Series A Preferred Stock or Series B Preferred Stock and/or
shares of Common Stock issued upon conversion thereof and possess registration
rights, information rights and other rights pursuant to that certain First
Amended Investors' Rights Agreement dated as of July 31, 1998, by and among the
Company and such Investors (the "Prior Agreement");

         B. Whereas, the Series A Shareholders and Series B Shareholders desire
to terminate the Prior Agreement and to accept the rights created pursuant
hereto in lieu of the rights granted to them under the Prior Agreement;

         C. Whereas, the Company proposes to sell and issue up to five million
five hundred thousand (5,500,000) shares of its Series C Preferred Stock
pursuant to the Purchase Agreement; and

         D. Whereas, as a condition of entering into the Purchase Agreement, the
purchasers of Series C Preferred Stock have requested that the Company extend to
them registration rights, information rights and other rights as set forth
below;

         NOW, THEREFORE, in consideration of the mutual promises,
representations, warranties, covenants and conditions set forth in this
Agreement and in the Purchase Agreement, the Series A Shareholders and Series B
Shareholders who are parties to the Prior Agreement hereby agree that the Prior
Agreement shall be superseded and replaced in its entirety by this Agreement,
and the parties mutually agree as follows:

                                    AGREEMENT

1.   GENERAL

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

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         "CLOSING" shall have the meaning given such term in the Purchase
Agreement.

         "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 2.10 hereof.

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

         "MAJOR INVESTOR" shall have the meaning given such term in Section
3.1(c) hereof.

         "OTHER PREFERRED" shall mean the shares of Series R, Series S-1 and
Series T Preferred Stock of the Company.

         "PURCHASE AGREEMENT" shall have the meaning given such term in the
preamble hereof.

         "QUALIFIED PUBLIC OFFERING" shall have the meaning given such term in
Section 2.2(a) hereof.

         "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; and (ii) 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 2.2, 2.3 and 2.4 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

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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.

         "SECURITIES ACT" shall mean the Securities Act of 1933, as amended.

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

         "SHARES" shall mean the Company's Series C Preferred Stock issued
pursuant to the Purchase Agreement and Series A Preferred Stock and Series B
Preferred Stock previously issued by the Company.

         "THRESHOLD OFFERING" means an initial offering with a total offering
price, prior to deductions of underwriter commissions, and offering expenses and
the like, of no less than fifteen million dollars ($15,000,000), and in which
the Company is valued on a pre-money basis at no less than one hundred seventy
five million dollars ($175,000,000).

2.   REGISTRATION; RESTRICTIONS ON TRANSFER

     2.1 RESTRICTIONS ON TRANSFER.

          (a) Each Holder agrees not to make any disposition of all or any
portion of the Shares or Registrable Securities unless and until:

              (i) There is then in effect a registration statement under the
Securities Act covering such proposed disposition, and such disposition is
made in accordance with such registration statement; or

              (ii) (A) The transferee has agreed in writing to be bound by
the terms of this Agreement, (B) such Holder shall have notified the Company
of the proposed disposition and shall have furnished the Company with a
detailed statement of the circumstances surrounding the proposed disposition,
and (C) if reasonably requested by the Company, such Holder shall have
furnished the Company with an opinion of counsel, reasonably satisfactory to
the Company, that such disposition will not require registration of such
securities under the Securities Act. It is agreed that the Company will not
require opinions of counsel for transactions made pursuant to Rule 144 except
in unusual circumstances.

              (iii) Notwithstanding the provisions of paragraphs (i) and (ii)
above, no such registration statement or opinion of counsel shall be
necessary for a transfer by a Holder which is (A) a partnership to its
partners or former partners in accordance with partnership interests, (B) a
corporation to its shareholders or affiliates in accordance with their
interest in the corporation, (C) a limited liability company to its members
or former members in accordance with their interest in the limited liability
company, or (D) to the Holder's family member or trust

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for the benefit of an individual Holder; provided in each case that the
transferee will be subject to the terms of this Agreement to the same extent
as if it were an original Holder hereunder.

          (b) Each certificate representing Shares or Registrable Securities
shall (unless otherwise permitted by the provisions of this Agreement) be
stamped or otherwise imprinted with a legend substantially similar to the
following (in addition to any legend required under applicable state
securities laws or as provided elsewhere in this Agreement):

         "THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID
ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED."

          (c) The Company shall be obligated to reissue promptly unlegended
certificates at the request of any holder thereof if the holder shall have
obtained an opinion of counsel (which counsel may be counsel to the Company)
reasonably acceptable to the Company to the effect that the securities
proposed to be disposed of may lawfully be so disposed of without
registration, qualification or legend.

          (d) Any legend endorsed on an instrument pursuant to applicable
state securities laws and the stop-transfer instructions with respect to such
securities shall be removed upon receipt by the Company of an order of the
appropriate blue sky authority authorizing such removal.

     2.2  DEMAND REGISTRATION.

          (a) Subject to the conditions of this Section 2.2, if the Company
shall receive a written request from the Holders of more than thirty percent
(30%) of the Registrable Securities then outstanding (the "Initiating
Holders") that the Company file a registration statement under the Securities
Act covering the registration of Registrable Securities having an aggregate
offering price to the public in excess of five million dollars ($5,000,000)
(a "Qualified Public Offering"), then the Company shall, within thirty (30)
days of the receipt thereof, give written notice of such request to all
Holders, and subject to the limitations of this Section 2.2, use its best
efforts to effect, as soon as practicable, the registration under the
Securities Act of all Registrable Securities that the Holders request to be
registered.

          (b) If the Initiating Holders intend to distribute the Registrable
Securities covered by their request by means of an underwriting, they shall
so advise the Company as a part of their request made pursuant to this
Section 2.2 and the Company shall include such information in the written
notice referred to in Section 2.2(a). In such event, the right of any Holder
to include its Registrable Securities in such registration 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 securities
through such underwriting shall enter into an underwriting agreement in
customary form with the underwriter or underwriters selected for such
underwriting by a

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majority in interest of the Initiating Holders (which underwriter or
underwriters shall be reasonably acceptable to the Company). Notwithstanding
any other provision of this Section 2.2, if the underwriter advises the
Company that marketing factors require a limitation of the number of
securities to be underwritten (including Registrable Securities), then the
Company shall so advise all Holders of Registrable Securities which would
otherwise be underwritten pursuant hereto, and the number of shares that may
be included in the underwriting shall be allocated to the Holders of such
Registrable Securities on a pro rata basis based on the number of Registrable
Securities held by all such Holders (including the Initiating Holders). Any
Registrable Securities excluded or withdrawn from such underwriting shall be
withdrawn from the registration.

          (c) The Company shall not be required to effect a registration
pursuant to this Section 2.2:

               (i) until the earlier of December 31, 2002 or the date which
is six months after the Initial Offering; or

               (ii) after the Company has effected two (2) registrations
pursuant to this Section 2.2, and such registrations have been declared or
ordered effective; or

               (iii) during the period starting with the date of filing of,
and ending on the date one hundred eighty (180) days following the effective
date of, the registration statement pertaining to the Initial Offering;
provided that the Company makes reasonable good-faith efforts to cause such
registration statement to become effective; or

               (iv) if within thirty (30) days of receipt of a written
request from Initiating Holders pursuant to Section 2.2(a), the Company gives
notice to the Holders of the Company's intention to make its Initial Offering
within ninety (90) days; or

               (v) if the Company shall furnish to Holders requesting a
registration statement pursuant to this Section 2.2, a certificate signed by
the Chairman of the Board 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
registration statement to be effected at such time, in which event the
Company shall have the right to defer such filing for a period of not more
than one hundred twenty (120) days after receipt of the request of the
Initiating Holders; provided that such right to delay a request shall be
exercised by the Company not more than once in any twelve (12) month period.

     2.3 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 (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

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(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 2.3 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 2.3 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 and persons holding registration
rights with respect to the Other Preferred on a pro rata basis based on the
total number of Registrable Securities proposed to be included by each Holder
and such other persons in the underwriting; and third, to any other
shareholder of the Company (other than a Holder or such other persons) on a
pro rata basis. No such reduction shall reduce the securities being offered
by the Holder to less than 50% of the securities proposed to be sold by them
in the offering unless all such shares 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 2.3 prior to the effectiveness of such registration whether or not
any Holder has elected to include securities in such registration. The
Registration Expenses of such withdrawn registration shall be borne by the
Company in accordance with Section 2.5 hereof.

     2.4 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 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

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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 2.4:

              (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 2.4;
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 2.4, 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.

     2.5 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. The
Company shall not, however, be required to pay for expenses of any
registration proceeding begun pursuant to Section 2.2, the request of which
has been subsequently withdrawn by the Initiating Holders, unless (a) the
withdrawal is based upon material adverse information concerning the Company
of which the Initiating Holders were not aware at the time of such request or
(b) the Holders of a majority of Registrable Securities agree to forfeit
their right to one requested registration pursuant to Section 2.2, in which
event such right shall be forfeited by all Holders. If the Holders are
required to pay the

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Registration Expenses, such expenses shall be borne by the Holders of
securities (including Registrable Securities) requesting such registration in
proportion to the number of shares for which registration was requested. If
the Company is required to pay the Registration Expenses of a withdrawn
offering pursuant to clause (a) above, then the Holders shall not forfeit
their rights pursuant to Section 2.2 to a demand registration.

     2.6 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 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

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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.

     2.7 TERMINATION OF REGISTRATION RIGHTS. All registration rights granted
under this Section 2 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), or (iii) on the five-year anniversary of the first
closing of the sale of the Series C Preferred Stock.

     2.8  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 2.

          (b) It shall be a condition precedent to the obligations of the
Company to take any action pursuant to Section 2.2, 2.3 or 2.4 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.

          (c) The Company shall have no obligation with respect to any
registration requested pursuant to Section 2.2 if, due to the operation of
subsection 2.2(b), the number of shares or the anticipated aggregate offering
price of the Registrable Securities to be included in the registration does
not equal or exceed the number of shares or the anticipated aggregate
offering price required to originally trigger the Company's obligation to
initiate such registration as specified in Section 2.2, whichever is
applicable.

     2.9 INDEMNIFICATION. In the event any Registrable Securities are
included in a registration statement under Section 2.2, 2.3 or 2.4:

          (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 meaning of the Securities Act or the Exchange

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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, 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 2.9(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 or officers 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 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 or controlling person of such other
Holder in connection with investigating or defending any such loss, claim,
damage, liability or action if it is judicially determined that there was
such a Violation; provided, however, that the indemnity agreement contained
in this Section 2.9(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 2.9 exceed the net proceeds from the offering received by such Holder.

                                        10
<PAGE>

          (c) Promptly after receipt by an indemnified party under this
Section 2.9 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 2.9,
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 2.9, 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 2.9.

          (d) If the indemnification provided for in this Section 2.9 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
2.9 shall survive completion of any offering of Registrable Securities in a
registration statement. No indemnifying party, in the defense of any such
claim or litigation, shall, except with the consent of each indemnified
party, consent to entry of any judgment or enter into any settlement which
does not include as an unconditional term thereof the giving by the claimant
or plaintiff to such indemnified party of a release from all liability in
respect of such claim or litigation.

     2.10 ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause the Company
to register Registrable Securities pursuant to this Section 2 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

                                        11
<PAGE>

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.

     2.11 AMENDMENT OF REGISTRATION RIGHTS. Any provision of this Section 2
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 2.11 shall be
binding upon each Holder and the Company. By acceptance of any benefits under
this Section 2, Holders of Registrable Securities hereby agree to be bound by
the provisions hereunder.

     2.12 LIMITATION ON SUBSEQUENT REGISTRATION RIGHTS. After the date of
this Agreement, the Company shall not, without the prior written consent of
the Holders of two-thirds of the Registrable Securities then outstanding,
enter into any agreement with any Holder or prospective holder of any
securities of the Company that would allow such Holder or prospective Holder
to include such securities in any registration filed under Section 2.2
hereof, unless, under the terms of such agreement, (a) the inclusion of such
securities in any such registration will not reduce the amount of the
Registrable Securities of the Holders included in any such registration, or
(b) such Holder or prospective Holder makes a demand registration which
results in such registration statement being declared effective prior to the
earlier of the dates set forth in Section 2.2(c)(i) or 2.2(c)(iii) or within
one hundred twenty (120) days after the effective date of any registration
statement pursuant to Section 2.2.

     2.13 "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.

     The obligations described in this Section 2.13 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 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.

                                        12
<PAGE>

     2.14 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.

3.   COVENANTS OF THE COMPANY

     3.1 BASIC FINANCIAL INFORMATION AND REPORTING. The Company will maintain
true books and records of account in which full and correct entries will be
made of all its business transactions pursuant to a system of accounting
established and administered in accordance with generally accepted accounting
principles consistently applied, and will set aside on its books all such
proper accruals and reserves as shall be required under generally accepted
accounting principles consistently applied.

          (a) As soon as practicable after the end of each fiscal year of the
Company, the Company will furnish each Investor a consolidated balance sheet
of the Company, as at the end of such fiscal year, and a consolidated
statement of income and a consolidated statement of cash flows of the
Company, for such year, all prepared in accordance with generally accepted
accounting principles consistently applied and setting forth in each case in
comparative form the figures for the previous fiscal year, all in reasonable
detail. Such financial statements shall be accompanied by a report and
opinion thereon by independent public accountants of national standing
selected by the Company's Board of Directors.

          (b) The Company will furnish each Investor, as soon as practicable
after the end of the first, second and third quarterly accounting periods in
each fiscal year of the Company (and in any event within forty-five (45) days
thereafter), a consolidated balance sheet of the Company as of the end of
each such quarterly period, and a consolidated statement of income and a
consolidated statement of cash flows of the Company for such period and for
the current fiscal year to date, prepared in accordance with generally
accepted accounting principles, with the exception that such statements may
be unaudited, no notes need be attached to such statements and year-end audit
adjustments may not have been made.

                                        13
<PAGE>

          (c) So long as an Investor (with its affiliates) shall own not less
than five hundred thousand (500,000) shares of Registrable Securities (as
adjusted for stock splits and combinations) (a "Major Investor"), the Company
will furnish each such Major Investor (i) at least thirty (30) days prior to
the beginning of each fiscal year an annual operating plan for such fiscal
year (and as soon as available, any subsequent revisions thereto), (ii) as
soon as practicable after the end of each month (and in any event within
twenty (20) days thereafter), a consolidated balance sheet of the Company as
of the end of each such month, and a consolidated statement of income and a
consolidated statement of cash flows of the Company for such month and for
the current fiscal year to date, including a comparison to plan figures for
such period, prepared in accordance with generally accepted accounting
principles consistently applied, with the exception that such statements may
be unaudited, no notes need be attached to such statements and year-end audit
adjustments may not have been made and (iii) within not more than one hundred
twenty (120) days after the end of each fiscal year, audited financial
statements of the Company.

          (d) The rights granted to the Investors under this Section 3.1
shall terminate upon the effective date of the registration statement
pertaining to the Threshold Offering.

     3.2 INSPECTION AND OTHER RIGHTS. Each Major Investor shall have the
right to visit and inspect any of the properties of the Company or any of its
subsidiaries, and to consult with and advise the officers of the Company with
respect to significant business issues, the finances and accounts of the
Company or any of its subsidiaries, and to review such information as is
reasonably requested, all at such reasonable times and as often as may be
reasonably requested; provided, however, that the Company shall not be
obligated under this Section 3.2 with respect to a competitor of the Company
or with respect to information which the Board of Directors determines in
good faith is confidential and should not, therefore, be disclosed. The
rights granted to the Major Investors under this Section 3.2 are
nonassignable and shall terminate upon the effective date of the registration
statement pertaining to the Initial Offering.

     3.3 CONFIDENTIALITY OF RECORDS. Each Investor agrees to use, and to use
its best commercially reasonable efforts to ensure that its authorized
representatives use, the same degree of care as such Investor uses to protect
its own confidential information to keep confidential any information
furnished to it which the Company identifies as being confidential (so long
as such information is not in the public domain), except that such Investor
may disclose such confidential information to any partner, subsidiary or
parent of such Investor for the purpose of evaluating its investment in the
Company as long as such partner, subsidiary or parent is advised of the
confidentiality provisions of this Section 3.3. For purposes of this Section
3.3 "confidential information" does not include information, technical data
or know-how which (i) is in the Investor's possession at the time of initial
disclosure as shown by the Investor's files and records immediately prior to
the time of such disclosure; (ii) before or after it has been disclosed to
the Investor, is part of the public knowledge or literature, not as a result
of any action or inaction of the Investor; or (iii) is approved for release
by written authorization of the Company. The provisions of this Section 3.3
shall not apply (i) to the extent that an Investor is required to disclose
confidential information pursuant to any law, statute, rule or regulation or
any order of any court of competent jurisdiction or pursuant to any
requirement (whether or not having the force of law, but if not having the
force of law, being of a type with which institutional investors in the
relevant jurisdiction are accustomed to comply) of any self-regulating
organization or any

                                        14
<PAGE>

governmental, fiscal, monetary or other authority; or (ii) to the disclosure
of Confidential Information to an Investor's employees, counsel, accountants
or other professional advisors, provided such persons agree to be bound by
this Section 3.3.

     3.4 BOARD OF DIRECTORS APPROVAL. The Company shall not without the
approval of a majority of the Board of Directors take any of the following
actions:

               (i)  adopt any stock option or purchase plan;

               (ii) issue or grant any equity securities of the Company or
any options or securities convertible into equity securities of the Company;

               (iii) adopt an annual budget, business or financial plan;

               (iv) enter into any material real estate lease or real
property purchase agreement; or

               (v) incur any obligation or enter into any agreement in excess
of one hundred thousand dollars ($100,000), not otherwise provided for in the
Company's most recent annual budget or business plan as approved by the Board
of Directors.

          (b) The Company shall not without the approval of at least
two-thirds of the Board of Directors enter into any transaction with an
affiliate.

     3.5 PREFERRED STOCK APPROVAL. The Company shall not change its line of
business without the approval of a majority of the Series A Shareholders,
Series B Shareholders and Series C Shareholders, voting together as a single
class.

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

     3.7 VESTING. Unless otherwise approved by the Board of Directors, all
stock, stock options and other stock equivalents of the Company issued after
the date of this Agreement to employees, directors, consultants and other
service providers shall be subject to vesting as follows: (i) twenty-five
percent (25%) of such stock (or underlying stock, as the case may be) shall
vest at the end of the first year following the earlier of the date of
issuance or such person's services commencement date with the Company, and
(ii) seventy-five percent (75%) of such stock (or underlying stock, as the
case may be) shall vest monthly in equal portions over the ensuing three (3)
years. With respect to any shares of stock purchased by any such person, the
Company's repurchase option shall provide that upon such person's termination
of employment or service with the Company, with or without cause, the Company
or its assignee (to the extent permissible under applicable securities laws
and other laws) shall have the option to purchase at cost any unvested shares
of stock held by such person.

     3.8 KEY MAN INSURANCE. Subject to the approval of the Board of
Directors, the Company shall obtain (as soon as practicable after the
Closing) and maintain in full force and

                                        15
<PAGE>

effect term life insurance in the amount of one million dollars ($1,000,000)
on the lives of Dennis Carson and Eyal Raz (the "Founders") and Dino Dina,
naming the Company as beneficiary.

     3.9 PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT. The Company shall
require all employees and consultants to execute and deliver a Proprietary
Information and Inventions Agreement in the forms attached to the Purchase
Agreement.

     3.10 REAL PROPERTY HOLDING CORPORATION. The Company covenants that it
will operate in a manner such that it will not become a "United States real
property holding corporation" ("USRPHC") as that term is defined in Section
897(c)(2) of the Internal Revenue Code of 1986, as amended, and the
regulations thereunder ("FIRPTA"). The Company agrees to make determinations
as to its status as a USRPHC, and will file statements concerning those
determinations with the Internal Revenue Service, in the manner and at the
times required under Reg. Section 1.897-2(h), or any supplementary or
successor provision thereto. Within 30 days of a request from an Investor or
any of its partners, the Company will inform the requesting party, in the
manner set forth in Reg. Section 1.897-2(h)(1)(iv) or any supplementary or
successor provision thereto, whether that party's interest in the Company
constitutes a United States real property interest (within the meaning of
Internal Revenue Code Section 897(c)(1) and the regulations thereunder) and
whether the Company has provided to the Internal Revenue Service all required
notices as to its USRPHC status.

     3.11 REIMBURSEMENT OF EXPENSES. The Company will reimburse the Directors
of the Company for reasonable out-of-pocket expenses actually incurred in
connection with their services to the Company as Directors, including without
limitation, reimbursement for reasonable transportation, lodging and meal
expenses incurred in connection with attendance at meetings of the Board of
Directors, provided the Company receives receipts and other records of such
expenses as reasonably requested by the Company and within sixty (60) days
after expenses are incurred.

     3.12 INDEMNIFICATION. The Company will use its reasonable efforts to
limit the liability, to the fullest extent permissible under the California
Corporations Code, of all of its directors and their affiliated parties,
including directors affiliated with a Major Investor.

     3.13 SMALL BUSINESS ADMINISTRATION MATTERS.

               (i) The proceeds from the purchase of the Series C Preferred
Stock pursuant to the Agreement shall be used by the Company for working
capital and other general corporate purposes, which may include, without
limitation, one or more of the following as determined by the Company in its
sole discretion: research, development, administration, manufacturing,
marketing, sales and distribution. The Company shall provide to
representatives of the Purchasers and the Small Business Administration (the
"SBA") reasonable access to its books and records for the purpose of
confirming such use of the Proceeds or for other purposes reasonably related
to the qualification of the financing provided by the Investors to the
Company.

                                        16
<PAGE>

               (ii) For a period of one (1) year following the Closing (as
defined in the Purchase Agreement), the Company shall not change the nature
of its business activity if such change would render the Company ineligible,
within the meaning of 13 C.F.R. Section 107.720.

               (iii) So long as the Investors hold any securities of the
Company, the Company will comply at all times with the non-discrimination
requirements of 13 C.F.R. Parts 112, 113 and 117.

               (iv) Upon the written request of the Investors, and with the
cooperation of such Investors, the Company shall deliver to the Investors a
written assessment, in form and substance reasonably satisfactory to the
Investors, of the economic impact of the Investors' investment in the
Company, specifying (a) the full-time equivalent jobs created or retained in
connection with the investment, and (b) the impact of the investment on the
Company's business, in terms of revenue and profits, and on taxes paid by the
Company and its employees. Upon request, the Company promptly (and in any
event within twenty (20) days of such request) shall furnish to the Investors
all information (a) reasonably requested by them in order for the Investors
to comply with the requirements of 13 C.F.R. Section 107.620 or to prepare
and file SBA Form 468 and (b) reasonably requested or required by any United
States governmental agency asserting jurisdiction over the Investors. Any
submission of financial information pursuant to this Section 3.13 shall be
under cover of a certificate executed by the Company's president, chief
executive officer, chief financial officer or treasurer certifying that such
information (i) relates to the Company, (ii) to the best of the Company's
knowledge is accurate and (iii) if applicable, has been audited by the
Company's independent auditors.

              (v) In the event that any of the Investors determines that it
has a Regulatory Problem (as defined below), it shall have the right, subject
to compliance with all applicable federal and state securities laws, (i) to
transfer its Series B Preferred Stock or Series C Preferred Stock without
regard to any restrictions on transfer set forth in this Agreement, provided
that the transferee agrees to become a party to and to be bound by all of the
provisions of each such agreement, and (ii) to require the Company to take
all actions as may be reasonably requested by the Investor, as the case may
be, in order to (A) effectuate and facilitate any transfer by the Investor of
its Series B Preferred Stock or Series C Preferred Stock then held by it to
any person designated by the Investor, (B) permit the Investor (or any of its
affiliates) to exchange all or any portion of any voting securities of the
Company then held by the Investor (or any affiliate), on a share-for-share
basis, for non-voting securities of the Company, which non-voting securities
shall be identical in all respects to the voting security exchanged therefor
(except for voting rights and that the non-voting securities shall be
convertible or exchangeable for voting securities on such terms as may be
appropriate in light of regulatory considerations then prevailing), and (iii)
amend this Agreement to effectuate and reflect the foregoing exchange
described in subclause (ii) above. The parties to this Agreement shall be
required under this Section to take any action that would adversely affect in
any material economic respect such party's rights under this Agreement or as
a shareholder of the Company. For purposes of this Section, a "Regulatory
Problem" means any set of facts or circumstances wherein both (i) it has been
asserted by any governmental regulatory agency with jurisdiction over an
Investor that the Investor is not entitled to hold, or exercise any
significant right with respect to, the Series B Preferred Stock or the Series
C Preferred Stock or the currently unissued Common Stock of the

                                        17
<PAGE>

Company into which the Series B Preferred Stock or Series C Preferred Stock
is convertible and (ii) the Investor reasonably determines that such
assertion is meritorious and that the solution proposed by the Investor is
necessary to cure such regulatory violation by the Investor.

     3.14 TERMINATION OF COVENANTS. All covenants of the Company contained in
Section 3 of this Agreement, except for that set forth in Section 3.13(iv),
shall expire and terminate as to each Investor on the effective date of the
registration statement pertaining to the Initial Offering.

4.   RIGHTS OF FIRST REFUSAL

     4.1 SUBSEQUENT OFFERINGS. Each Investor and Each Founder (each of such
Investors and Founders, for purposes of this Section 4, an "Owner") shall
have a right of first refusal to purchase its pro rata share of all Equity
Securities, as defined below, that the Company may, from time to time,
propose to sell and issue after the date of this Agreement, other than the
Equity Securities excluded by Section 4.6 hereof. Each Owner's pro rata
share, for purposes of this right of first refusal, is equal to the ratio of
(A) the number of shares of the Company's Common Stock (including all shares
of Common Stock issued or issuable upon conversion of the Shares or exercise
of outstanding warrants or options) of which such Owner is deemed to be a
holder immediately prior to the issuance of such Equity Securities to (B) the
total number of shares of the Company's outstanding Common Stock (including
all shares of Common Stock issued or issuable upon conversion of the Shares
or upon the exercise of any outstanding warrants or options) immediately
prior to the issuance of the Equity Securities. The term "Equity Securities"
shall mean (i) any Common Stock, Preferred Stock or other security of the
Company, (ii) any security convertible, with or without consideration, into
any Common Stock, Preferred Stock or other security (including any option to
purchase such a convertible security), (iii) any security carrying any
warrant or right to subscribe to or purchase any Common Stock, Preferred
Stock or other security or (iv) any such warrant or right.

     4.2 EXERCISE OF RIGHTS. If the Company proposes to issue any Equity
Securities, it shall give each Owner written notice of its intention,
describing the Equity Securities, the price and the terms and conditions upon
which the Company proposes to issue the same. Each Owner shall have twenty
(20) days from the giving of such notice to agree to purchase its pro rata
share of the Equity Securities for the price and upon the terms and
conditions specified in the notice by giving written notice to the Company
and stating therein the quantity of Equity Securities to be purchased.
Notwithstanding the foregoing, the Company shall not be required to offer or
sell such Equity Securities to any Owner who would cause the Company to be in
violation of applicable federal securities laws by virtue of such offer or
sale.

     4.3 ISSUANCE OF EQUITY SECURITIES TO OTHER PERSONS. If not all of the
Owners elect to purchase their pro rata share of the Equity Securities, then
the Company shall promptly notify in writing the Owners who do so elect and
shall offer such Owners the right to acquire such unsubscribed shares. Each
Owner shall have five (5) days after receipt of such notice to notify the
Company of its election to purchase all or a portion of the unsubscribed
shares. If the Owners fail to exercise in full the rights of first refusal,
the Company shall have sixty (60) days thereafter to sell the Equity
Securities in respect of which the Owners' rights were not exercised, at a
price and upon general terms and conditions materially no more favorable to
the purchasers thereof than specified in the Company's notice to the Owners
pursuant to Section 4.2 hereof. If

                                        18
<PAGE>

the Company has not sold such Equity Securities within sixty (60) days of the
notice provided pursuant to Section 4.2, the Company shall not thereafter
issue or sell any Equity Securities, without first offering such securities
to the Owners in the manner provided above.

     4.4 TERMINATION OF RIGHTS OF FIRST REFUSAL. The rights of first refusal
established by this Section 4 shall not apply to Equity Securities offered
for sale in the Initial Offering, and such rights shall terminate upon the
effective date of the registration statement pertaining to the Threshold
Offering.

     4.5 TRANSFER OF RIGHTS OF FIRST REFUSAL. The rights of first refusal of
each Owner under this Section 4 may be transferred, subject to the same
limitations and restrictions as any transfer of registration rights pursuant
to Section 2.10 (as necessarily modified to apply to the Founders and/or
Common Stock).

     4.6 EXCLUDED SECURITIES. The rights of first refusal established by this
Section 4 shall have no application to any of the following Equity Securities
in a transaction or transactions approved by a majority of the Board of
Directors:

          (a) shares of Common Stock (and/or options, warrants or other
Common Stock purchase rights issued pursuant to such options, warrants or
other rights) issued or to be issued to employees, officers or directors of,
or consultants or advisors to, the Company or any subsidiary, pursuant to
stock purchase or stock option plans or other arrangements;

          (b) stock issued pursuant to any rights or agreements outstanding
as of the date of this Agreement, options and warrants outstanding as of the
date of this Agreement, and stock issued pursuant to any such rights or
agreements granted after the date of this Agreement, provided that the rights
of first refusal established by this Section 4 applied with respect to the
initial sale or grant by the Company of such rights or agreements;

          (c) any Equity Securities issued for consideration other than cash
pursuant to a merger, consolidation, acquisition or similar business
combination;

          (d) shares of Common Stock issued in connection with any stock
split, stock dividend or recapitalization by the Company;

          (e) the Shares and any shares of Common Stock issued upon
conversion of the Shares;

          (f) any Equity Securities issued pursuant to any equipment leasing
arrangement, or debt financing from a bank or similar financial institution;

          (g) any Equity Securities issued by the Company pursuant to a
registration statement filed under the Securities Act; and

          (h) shares of the Company's Common Stock or Preferred Stock issued
in connection with strategic transactions involving the Company and other
entities, including (A) joint ventures, manufacturing, marketing or
distribution arrangements or (B) technology transfer or development
arrangements.

                                        19
<PAGE>

5.   VOTING

     5.1 SHARES OF VOTING STOCK. The Investors each agree to hold all shares
of voting capital stock of the Company now owned or hereinafter acquired by
them (including but not limited to the Shares and all shares of Common Stock
issued upon conversion of the Shares), subject to, and to vote such shares in
accordance with, the provisions of this Section 5.

     5.2 BOARD OF DIRECTORS COMPOSITION. The Board of Directors of the
Company shall consist of seven (7) to eight (8) members and will include two
(2) representatives of the holders of Series A Preferred Stock, two (2)
representatives of the holders of Series B Preferred Stock, one of which
shall be designated by Bank of America Ventures and the other of which shall
be designated by Forward Ventures and Biotechvest, by mutual agreement, one
(1) representative of management of the Company who shall be the Chief
Executive Officer, one (1) or two (2) founders of the Company, as determined
appropriate by a majority of the Board of Directors, and at least one (1)
member who is an outside representative experienced in the industry of the
Company, recommended by management of the Company and acceptable to a
majority of the Board of Directors.

     5.3 TERMINATION. The provisions of this Section 5 shall continue in full
force and effect from the date hereof through the earliest of the following
dates, upon which their effectiveness shall terminate in their entirety:

          (a) the effective date of the registration statement pertaining to
the Initial Offering; or

          (b) at such time as the Investors hold Shares having the voting
power equivalent to that of a number of shares of Common Stock less than five
million (5,000,000) (as adjusted for stock splits, combinations and the
like); or

          (c) upon the conversion of all of the outstanding shares of the
Series A Preferred Stock, Series B Preferred Stock and Series C Preferred
Stock into shares of Common Stock; or

          (d) ten (10) years from the date of this Agreement; or

          (e) the date as of which the parties hereto terminate the
effectiveness of this Section 5 by written consent of the Founders and a
majority in interest of the Investors; or

          (f) the date this Agreement is terminated in its entirety.

6.   MISCELLANEOUS

     6.1 GOVERNING LAW. This Agreement shall be governed by and construed
under the laws of the State of California as applied to agreements among
California residents entered into and to be performed entirely within
California.

                                        20
<PAGE>

     6.2 SURVIVAL. The representations, warranties, covenants, and agreements
made herein shall survive any investigation made by any Holder 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 the Company pursuant hereto in connection with the transactions
contemplated hereby shall be deemed to be representations and warranties by
the Company hereunder solely as of the date of such certificate or instrument.

     6.3 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 from time to time; provided, however, that prior
to the receipt by the Company of adequate written notice of the transfer of
any Registrable Securities specifying the full name and address of the
transferee, the Company may deem and treat the person listed as the Holder of
such Registrable Securities in its records as the absolute owner and Holder
of such Registrable Securities for all purposes, including the payment of
dividends or any redemption price.

     6.4 SEVERABILITY. In case any provision of this 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.

     6.5 AMENDMENT AND WAIVER. Except as otherwise expressly provided, the
obligations of the Company and the rights of the Holders under this Agreement
may be amended, modified or waived only with the written consent of the
holders of at least two-thirds (66 2/3%) of the Registrable Securities.

          (a) Notwithstanding the foregoing, this Agreement may be amended
with only the written consent of the Company to include additional purchasers
of Shares as "Investors," "Holders" and parties hereto.

     6.6 DELAYS OR OMISSIONS. It is agreed that no delay or omission to
exercise any right, power, or remedy accruing to any Holder, upon any breach,
default or noncompliance of the Company under this Agreement, shall impair
any such right, power, or remedy, nor shall it be construed to be a waiver of
any such breach, default or noncompliance, or any acquiescence therein, or of
any similar breach, default or noncompliance thereafter occurring. It is
further agreed that any waiver, permit, consent, or approval of any kind or
character on any Holder's part of any breach, default or noncompliance under
the Agreement or any waiver on such Holder's part of any provisions or
conditions of this Agreement must be in writing and shall be effective only
to the extent specifically set forth in such writing. All remedies, either
under this Agreement, by law, or otherwise afforded to Holders, shall be
cumulative and not alternative.

     6.7 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.

                                        21
<PAGE>

All communications shall be sent to the party to be notified at the address
as set forth on the signature pages hereof or EXHIBIT A hereto or at such
other address as such party may designate by ten (10) days' advance written
notice to the other parties hereto.

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

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

     6.10 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.

         [THIS SPACE INTENTIONALLY LEFT BLANK]

                                        22

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have executed this SECOND
AMENDED INVESTORS' RIGHTS AGREEMENT as of the date set forth in the first
paragraph hereof.

COMPANY:

DYNAVAX TECHNOLOGIES CORPORATION

By: /s/ Dino Dina
    ---------------------------------------
      President & Chief Executive Officer

Address:

     Dynavax Technologies Corporation
     717 Potter Street, Suite 100
     Berkeley, CA 94710

<PAGE>

                    SHAREHOLDER:

                    THE STATE STREET BANK AND TRUST COMPANY, AS TRUSTEE FOR
                    NORTHROP GRUMMAN CORPORATION MASTER TRUST

                    By:    /s/ Kevin Miller
                          --------------------------------------------

                    Name:  Kevin Miller
                          --------------------------------------------

                    Title: Assistant Vice President
                          --------------------------------------------

<PAGE>

                          SHAREHOLDER:

                           /s/ Andrew Gengos
                          --------------------------------------------
                          ANDREW GENGOS

<PAGE>

                    SHAREHOLDER:

                    STEPHEN J. KANDEL
                    SSB ROTH CONVERSION IRA CUSTODIAN

                    By:    /s/ Stephen J. Kandel
                          --------------------------------------------
                           Stephen J. Kandel

                    Its:  Beneficial Owner

<PAGE>

                    SHAREHOLDER:

                    BIOINVEST, INC.

                    By:     /s/ S. Pays and H. Maxe
                          --------------------------------------------

                    Title:  CORPORATE COUNCIL LTD. AS DIRECTOR
                          --------------------------------------------

<PAGE>

                    SHAREHOLDER:

                    CHINA DEVELOPMENT INDUSTRIAL BANK

                    By:    /s/ Benny M. Hu
                          --------------------------------------------

                    Title:  President
                          --------------------------------------------

<PAGE>

                    SHAREHOLDER:

                    ONE OBJECTIVE LIMITED
                    For and on behalf of One Objective Limited

                    By:    /s/ Ching Tzu Chang
                          --------------------------------------------

                    Title: Authorized Signature
                          --------------------------------------------

<PAGE>

                          SHAREHOLDER:

                          /s/ Walter T. Dec
                          --------------------------------------------
                          WALTER T. DEC

<PAGE>

                         SHAREHOLDER:

                         /s/ Lei-Li Kuan
                         --------------------------------------------
                         KUAN LEI-LI

<PAGE>

                    SHAREHOLDER:

                    RAM TECH CORP.

                    By:    /s/ Shiang-Li Chen
                          --------------------------------------------

                    Title: DIRECTOR
                          --------------------------------------------

<PAGE>

                    SHAREHOLDER:

                    LILON INVESTMENT LIMITED

                    By:    /s/ Chen John-Ye
                          --------------------------------------------
                          John-Ye Chen

                    Its:   Authorized Signatory for and on behalf of
                           Lilontex Corporation, Sole Director
                          --------------------------------------------

<PAGE>

                    SHAREHOLDER:

                    IWAKI FAMILY LIMITED PARTNERSHIP

                    By:    /s/ Iwaki Family Limited Partnership
                          --------------------------------------------

                    Title: General Partner
                          --------------------------------------------

<PAGE>

                    SHAREHOLDER:

                    ROCK CASTLE I, L.P.

                    By:    /s/ Eric Y. Sato
                          --------------------------------------------

                    Title: General Partner
                          --------------------------------------------

<PAGE>

                         SHAREHOLDER:

                          /s/ Eric Y. Sato
                         --------------------------------------------
                         ERIC Y. SATO

<PAGE>

                    SHAREHOLDER:

                    SANDERS EDUCATION TRUST, AGREEMENT DATED 12/1/97

                    By:   /s/ Martin E. Sanders
                          --------------------------------------------
                            MARTIN E. SANDERS,
                            TRUSTEE

<PAGE>

                    SHAREHOLDER:

                    SANDERS FAMILY TRUST, AGREEMENT DATED 5/5/95

                    By:   /s/ Martin E. Sanders
                          --------------------------------------------
                            MARTIN E. SANDERS,
                            TRUSTEE

                    AND

                    By:    /s/ Corazon D. Sanders
                          --------------------------------------------
                            CORAZON D. SANDERS,
                            TRUSTEE

<PAGE>

                          SHAREHOLDER

                           /s/ Kathy Stafford
                          --------------------------------------------
                          KATHY STAFFORD

<PAGE>

                    SHAREHOLDER

                    JAFCO L-2 VENTURE CAPITAL INVESTMENT LIMITED PARTNERSHIP

                    By:    /s/ Akira Tsuda
                          --------------------------------------------

                    Title: Executive Vice President
                           JAFCO Co., Ltd.
                           Its Executive Partner
                          --------------------------------------------

<PAGE>

                    SHAREHOLDER

                    JAFCO G-8 (A) INVESTMENT ENTERPRISE PARTNERSHIP

                    By:   /s/ Akira Tsuda
                          --------------------------------------------

                    Title: Executive Vice President
                           JAFCO Co., Ltd.
                           Its Executive Partner
                          --------------------------------------------

<PAGE>

                    SHAREHOLDER

                    JAFCO G-8 (B) INVESTMENT ENTERPRISE PARTNERSHIP

                    By:    /s/ Akira Tsuda
                          --------------------------------------------

                    Title: Executive Vice President
                           JAFCO Co., Ltd.
                           Its Executive Partner
                          --------------------------------------------

<PAGE>

                    SHAREHOLDER

                    JAFCO GC1 INVESTMENT ENTERPRISE PARTNERSHIP

                    By:    /s/ Akira Tsuda
                          --------------------------------------------

                    Title: Executive Vice President
                           JAFCO Co., Ltd.
                           Its Executive Partner
                          --------------------------------------------

<PAGE>

                    SHAREHOLDER

                    LIAM BIOTECHVEST, LLC

                    By:    /s/ Martin Pajor
                          --------------------------------------------

                    Title: Capital Member Administrative Committee
                          --------------------------------------------

<PAGE>

                    SHAREHOLDER

                    BIOTECHVEST, LP

                    By:    /s/ Biotechvest, L.P.
                          -----------------------------------------------

                    Title: Vice President Biotechvest II, General Partner
                          -----------------------------------------------

<PAGE>

                    SHAREHOLDER

                    BIOMERIEUX ALLIANCE S.A.

                    By:    /s/ Alain Merieux
                          --------------------------------------------

                    Title:  President
                          --------------------------------------------

<PAGE>

                    SHAREHOLDER

                    FINEDIX B.V.

                    By:    /s/ Finedix B.V.
                          --------------------------------------------

                    Title: Managing Director
                          --------------------------------------------

<PAGE>

                    SHAREHOLDER

                    ALTA CALIFORNIA PARTNERS, L.P.

                    By:    /s/ Garrett Gruener
                          --------------------------------------------

                    Title: Alta California Management Partners, L.P.,
                           General Partner
                          --------------------------------------------

<PAGE>

                    SHAREHOLDER

                    ALTA EMBARCADERO PARTNERS, LLC

                    By:    /s/ Elaine Walker
                          --------------------------------------------

                    Title: Under Power of Attorney
                          --------------------------------------------

<PAGE>

                    SHAREHOLDER

                    INTERWEST PARTNERS V, L.P.

                    By:    /s/ Arnold Oronsky
                          --------------------------------------------

                    Title:
                          --------------------------------------------

<PAGE>

                    SHAREHOLDER

                    INTERWEST INVESTORS V

                    By:    /s/ Arnold Oronsky
                          --------------------------------------------

                    Title:
                          --------------------------------------------

<PAGE>

                    SHAREHOLDER

                    SANDERLING VENTURE PARTNERS IV, L.P.

                    By:    /s/ Fred A. Middleton
                          --------------------------------------------

                    Title: General Partner
                          --------------------------------------------

<PAGE>

                    SHAREHOLDER

                    SANDERLING [FERI TRUST] VENTURE PARTNERS IV, L.P.

                    By:    /s/ Fred A. Middleton
                          --------------------------------------------

                    Title: General Partner
                          --------------------------------------------

<PAGE>

                    SHAREHOLDER

                    SANDERLING IV LIMITED, L.P.

                    By:    /s/ Fred A. Middleton
                          --------------------------------------------

                    Title: General Partner
                          --------------------------------------------

<PAGE>

                    SHAREHOLDER

                    SANDERLING IV BIOMEDICAL, L.P.

                    By:    /s/ Fred A. Middleton
                          --------------------------------------------

                    Title: General Partner
                          --------------------------------------------

<PAGE>

                    SHAREHOLDER

                    SANDERLING VENTURES MANAGEMENT IV FBO FRED A. MIDDLETON

                    By:    /s/ Fred A. Middleton
                          --------------------------------------------

                    Title: General Partner
                          --------------------------------------------

<PAGE>

                    SHAREHOLDER

                    FORWARD VENTURES III, L.P.

                    By:   /s/ Forward Ventures III, L.P.
                          --------------------------------------------

                    Title:
                          --------------------------------------------

<PAGE>

                    SHAREHOLDER

                    FORWARD VENTURES III INSTITUTIONAL PARTNERS, L.P.

                    By:   /s/ Forward Ventures III Institutional Partners, L.P.
                          ----------------------------------------------------

                    Title:
                          ----------------------------------------------------

<PAGE>

                    SHAREHOLDER

                    AXIOM VENTURE PARTNERS II, L.P.

                    By:   /s/ Linda Sonntag
                          --------------------------------------------

                    Title: General Partner
                          --------------------------------------------

<PAGE>

                    SHAREHOLDER

                    BANK OF AMERICA VENTURES

                    By:    /s/ Louis C. Bock
                          --------------------------------------------

                    Title: Principle
                          --------------------------------------------

<PAGE>

                    SHAREHOLDER

                    BA VENTURE PARTNERS IV

                    By:    /s/ Louis C. Bock
                          --------------------------------------------

                    Title: General Partner
                          --------------------------------------------

<PAGE>

                          SHAREHOLDER

                           /s/ Craig M. Glantz
                          --------------------------------------------
                          CRAIG M. GLANTZ

<PAGE>

                                    EXHIBIT A

                              SCHEDULE OF INVESTORS

<TABLE>
<CAPTION>
                                                                          Aggregate
Name and Address                                     Shares            Purchase Price
----------------                                     ------            --------------
<S>                                                 <C>                <C>
bioMerieux Alliance S.A.                            1,000,000              $4,000,000
Chemin de L'Orme
69280 Marcy l'Etoile
France

Finedix B.V.                                          500,000              $2,000,000
Leidsekade 98
10177 PP
Amsterdam, the Netherlands

Alta California Partners, L.P.                        244,416                $977,664
One Embarcadero Center
Suite 4050
San Francisco, CA  94111
Attention:  Daniel S. Janney

Alta Embarcadero Partners, LLC                          5,584                 $22,336
One Embarcadero Center
Suite 4050
San Francisco, CA  94111
Attention:  Daniel S. Janney

Forward Ventures III, L.P.                             26,112                $104,448
9255 Towne Centre Drive
Suite 300
San Diego, CA  92121
Attention:  Jeffrey Sollender

Forward Ventures III Institutional                     98,888                $395,552
     Partners, L.P.
9255 Towne Centre Drive
Suite 300
San Diego, CA  92121
Attention:  Jeffrey Sollender
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
                                                                          Aggregate
Name and Address                                     Shares            Purchase Price
----------------                                     ------            --------------
<S>                                                 <C>                <C>
InterWest Partners V, L.P.                            248,438                $993,752
3000 Sand Hill Road
Building 3, Suite 255
Menlo Park, CA  94025-7112
Attention:  Arnold Oronsky

InterWest Investors V                                   1,562                  $6,248
3000 Sand Hill Road
Building 3, Suite 255
Menlo Park, CA  94025-7112
Attention:  Arnold Oronsky

Sanderling Venture Partners IV, L.P.                   72,588                $290,352
2730 Sand Hill Road
Suite 200
Menlo Park, CA  94025-7067
Attention:  Paulette Taylor, Esq.

Sanderling IV Limited Partnership, L.P.                28,318                $113,272
2730 Sand Hill Road
Suite 200
Menlo Park, CA  94025-7067
Attention:  Paulette Taylor, Esq.

Sanderling IV Biomedical, L.P.                         28,258                $113,032
2730 Sand Hill Road
Suite 200
Menlo Park, CA  94025-7067
Attention:  Paulette Taylor, Esq.

Sanderling [Feri Trust] Venture Partners IV,            8,054                 $32,216
L.P.
2730 Sand Hill Road
Suite 200
Menlo Park, CA  94025-7067
Attention:  Paulette Taylor, Esq.
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
                                                                          Aggregate
Name and Address                                     Shares            Purchase Price
----------------                                     ------            --------------
<S>                                                 <C>                <C>
Sanderling IV Venture Management                          282                  $1,128
2730 Sand Hill Road
Suite 200
Menlo Park, CA  94025-7067
Attention:  Paulette Taylor, Esq.

Sanderling IV Biomedical Co-Investment Fund,           75,000                $300,000
L.P.
2730 Sand Hill Road
Suite 200

Menlo Park, CA  94025-7067
Attention:  Paulette Taylor, Esq.

Sanderling Venture Partners IV Co-Investment           37,500                $150,000
Fund, L.P.
2730 Sand Hill Road
Suite 200
Menlo Park, CA  94025-7067
Attention:  Paulette Taylor, Esq.

Axiom Venture Partners II, L.P.                        62,500                $250,000
One Post Street
Suite 2525
San Francisco, CA  94104
Attention:  Linda Sonntag

Bank of America Ventures                              159,375                $637,500
950 Tower Lane
Suite 700
Foster City, CA  94404
Attention:  Louis Bock

BA Venture Partners IV                                 28,125                $112,500
950 Tower Lane
Suite 700
Foster City, CA  94404
Attention:  Louis Bock

Liam Biotechvest, LLC                                 400,000              $1,600,000
Suite 2150, Sears Tower
233 S. Wacker Drive
Chicago, IL 60606
Attention:  Martin Pajor
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
                                                                          Aggregate
Name and Address                                     Shares            Purchase Price
----------------                                     ------            --------------
<S>                                                 <C>                <C>
Biotechvest, LP                                       100,000                $400,000
Suite 2150, Sears Tower
233 S. Wacker Drive
Chicago, IL 60606
Attention:  Martin Pajor

JAFCO L-2 Venture Capital Investment Limited           93,750                $375,000
Partnership
Tekko Bldg., 1-8-2, Marunouchi, Chiyoda-ku,
Tokyo 100-0005,
Japan
Attention:  Hiroyuki Hata

JAFCO G-8 (A) Investment Enterprise                    93,750                $375,000
Partnership
Tekko Bldg., 1-8-2, Marunouchi, Chiyoda-ku,
Tokyo 100-0005,
Japan
Attention:  Hiroyuki Hata

JAFCO G-8 (B) Investment Enterprise                    93,750                $375,000
Partnership
Tekko Bldg., 1-8-2, Marunouchi, Chiyoda-ku,
Tokyo 100-0005,
Japan
Attention:  Hiroyuki Hata

JAFCO GC1 Investment Enterprise Partnership            93,750                $375,000
Tekko Bldg., 1-8-2, Marunouchi, Chiyoda-ku,
Tokyo 100-0005,
Japan
Attention:  Hiroyuki Hata

Kathy Stafford                                         15,000                 $60,000
10 Blair Avenue
Piedmont, CA 94611

Sanders Education Trust, Agreement dated                5,000                 $20,000
12/1/97
Martin E. Sanders, Trustee
420 El Centro Road
Hillsborough, CA 94010
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
                                                                          Aggregate
Name and Address                                     Shares            Purchase Price
----------------                                     ------            --------------
<S>                                                 <C>                <C>
Sanders Family Trust, dated 5/5/95                     15,000                 $60,000
Martin E. Sanders and Corazon D. Sanders,
Trustees
420 El Centro Road
Hillsborough, CA 94010

Iwaki Family Limited Partnership                       50,000                $200,000
613 Via Horquilla
Palos Verdes Estates, CA 90274

Rock Castle I, L.P.                                    82,500                $330,000
23822 West Valencia Boulevard
Suite 202
Valencia, CA 91355

Eric Y. Sato                                           12,500                 $50,000
25816 N. Raleigh Lane
Stevenson Ranch, CA 91381

Walter T. Dec                                          50,000                $200,000
8 Marigold Lane
Califon, NJ 07830

China Development Industrial Bank Inc.                500,000              $2,000,000
125 Nanking East Road
Section 5
Taipei 105 Taiwan, ROC
Attention:  Tai-Sen Soong, Ph.D.

One Objective Limited                                 250,000              $1,000,000
P.O. Box 96-140
Taipei 106 Taiwan, ROC

Mei-Hui Lu                                             50,000                $200,000
P.O. Box 96-253
Taipei 106 Taiwan, ROC

Lei-Li Kuan                                            75,000                $300,000
c/o Marco Kuo
325-16A Jen-Ai Road, Sec. 4
Taipei, Taiwan, ROC
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
                                                                          Aggregate
Name and Address                                     Shares            Purchase Price
----------------                                     ------            --------------
<S>                                                 <C>                <C>
Ram Tech Corp.                                        250,000              $1,000,000
14F, #117 Min Sheng East Road, Sec. 3
Taipei
Taiwan, 105 R.O.C.

Lilon Investment Limited                              125,000                $500,000
4 Fl., No. 369
Fu-Shing North Road
Taipei 105 Taiwan ROC
Attention:  Ms. Sandy Chen

Stephen J. Kandel                                      87,500                $350,000
SSB Roth Conversion IRA Custodian
1021 Muirlands Drive
LaJolla, CA 92037

BioInvest, Inc.                                        75,000                $300,000
Trust House
112 Bonadie Street
Kingstown, St. Vincent

Craig M. Glantz                                         1,250                  $5,000
610 Clipper St., Apt. 17
San Francisco, CA 94114

Andrew Gengos                                          25,000                $100,000
2167 Sky View Court
Moraga, CA 94556

The State Street Bank and Trust Company, as           500,000              $2,000,000
trustee for Northrop Grumman Corporation
Master Trust
10 South Wacker Drive, Suite 2960
Chicago, IL 60606
Attn:  L.B. Thompson, Director, Private Asset
Management

TOTAL:                                              5,668,750             $22,675,000
</TABLE><PAGE>

                                                                   Exhibit 4.4

                        DYNAVAX TECHNOLOGIES CORPORATION

                           SERIES S-1 PREFERRED STOCK

                               PURCHASE AGREEMENT

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                                  PAGE NO.
<S>                                                                                                               <C>
Section 1.     Agreement To Sell And Purchase.....................................................................1

         1.1      AUTHORIZATION OF SHARES.........................................................................1
         1.2      SALE AND PURCHASE...............................................................................1
         1.3      AGREEMENT TO ADJUST TERMS OF SHARES.............................................................1
         1.4      NO FURTHER ISSUANCE; SECOND ISSUANCE TO PURCHASER...............................................2

Section 2.     Closing, Delivery And Payment......................................................................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...................................................................3
         3.3      AUTHORIZATION; BINDING OBLIGATIONS..............................................................3
         3.4      FINANCIAL STATEMENTS............................................................................4
         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......................................................................................7
         3.11     TAX RETURNS, PAYMENTS AND ELECTIONS.............................................................7
         3.12     EMPLOYEES.......................................................................................8
         3.13     REGISTRATION RIGHTS.............................................................................8
         3.14     COMPLIANCE WITH LAWS; PERMITS...................................................................8
         3.15     OFFERING VALID..................................................................................9
         3.16     ENVIRONMENTAL REQUIREMENTS......................................................................9
         3.17     FULL DISCLOSURE................................................................................10

Section 4.     Representations And Warranties Of The Purchaser...................................................10

         4.1      REQUISITE POWER AND AUTHORITY..................................................................10
         4.2      INVESTMENT REPRESENTATIONS.....................................................................10
                  (a)      PURCHASER BEARS ECONOMIC RISK.........................................................10
                  (b)      ACQUISITION FOR OWN ACCOUNT...........................................................11
                  (c)      PURCHASER CAN PROTECT ITS INTEREST....................................................11
                  (d)      ACCREDITED INVESTOR...................................................................11
                  (e)      COMPANY INFORMATION...................................................................11
                  (f)      RULE 144..............................................................................11
         4.3      TRANSFER RESTRICTIONS..........................................................................12

Section 5.     Conditions To Closing.............................................................................12

         5.1      CONDITIONS TO PURCHASERS'OBLIGATIONS AT THE CLOSING............................................12
                  (a)      REPRESENTATIONS AND WARRANTIES TRUE; PERFORMANCE OF OBLIGATIONS.......................12
                  (b)      CONSENTS, PERMITS, AND WAIVERS........................................................12

<PAGE>

                  (c)      FILING OF AMENDED AND RESTATED ARTICLES...............................................12
                  (d)      RESERVATION OF CONVERSION SHARES......................................................12
                  (e)      STOCK CERTIFICATES....................................................................12
                  (f)      PROCEEDINGS AND DOCUMENTS.............................................................12
                  (g)      CONTINUED EFFECTIVENESS...............................................................13
                  (h)      CERTIFICATE OF PRESIDENT..............................................................13
                  (i)      LEGAL INVESTMENT......................................................................13
                  (j)      LEGAL OPINION.........................................................................13
                  (k)      NO VIOLATIONS.........................................................................13
         5.2      CONDITIONS TO OBLIGATIONS OF THE COMPANY.......................................................13
                  (a)      REPRESENTATIONS AND WARRANTIES TRUE...................................................13
                  (b)      PERFORMANCE OF OBLIGATIONS............................................................13
                  (c)      FILING OF AMENDED AND RESTATED ARTICLES...............................................14
                  (d)      CONSENTS, PERMITS, AND WAIVERS........................................................14

Section 6.     Registration Rights...............................................................................14

         6.1      DEFINITIONS....................................................................................14
         6.2      PIGGYBACK REGISTRATIONS........................................................................15
                  (a)      UNDERWRITING..........................................................................16
                  (b)      RIGHT TO TERMINATE REGISTRATION.......................................................16

         6.3      FORM S-3 REGISTRATION..........................................................................16
         6.4      EXPENSES OF REGISTRATION.......................................................................17
         6.5      OBLIGATIONS OF THE COMPANY.....................................................................17
         6.6      TERMINATION OF REGISTRATION RIGHTS.............................................................19
         6.7      DELAY OF REGISTRATION; FURNISHING INFORMATION..................................................19
         6.8      INDEMNIFICATION................................................................................19
         6.9      ASSIGNMENT OF REGISTRATION RIGHTS..............................................................21
         6.10     AMENDMENT OF REGISTRATION RIGHTS...............................................................21
         6.11     "MARKET STAND-OFF" AGREEMENT...................................................................22
         6.12     RULE 144 REPORTING.............................................................................22

Section 7.     Miscellaneous.....................................................................................23

         7.1      GOVERNING LAW..................................................................................23
         7.2      SURVIVAL.......................................................................................23
         7.3      SUCCESSORS AND ASSIGNS.........................................................................23
         7.4      ENTIRE AGREEMENT...............................................................................23
         7.5      SEVERABILITY...................................................................................23
         7.6      AMENDMENT AND WAIVER...........................................................................23
         7.7      DELAYS OR OMISSIONS............................................................................23
         7.8      NOTICES........................................................................................24
         7.9      EXPENSES.......................................................................................24
         7.10     ATTORNEYS' FEES................................................................................24
         7.11     TITLES AND SUBTITLES...........................................................................24
         7.12     COUNTERPARTS...................................................................................24
         7.13     BROKER'S FEES..................................................................................25
         7.14     PRONOUNS.......................................................................................25
</TABLE>

<PAGE>

                  SERIES S-1 PREFERRED STOCK PURCHASE AGREEMENT

         THIS SERIES S-1 PREFERRED STOCK PURCHASE AGREEMENT (the "Agreement") is
entered into as of November 22, 1999, by and among Dynavax Technologies
Corporation, a California corporation (the "Company") and Stallergenes S.A. (the
"Purchaser").

                                    RECITALS

         WHEREAS, the Company has authorized the sale and issuance of an
aggregate of two hundred thousand (200,000) shares of its Series S-1 Preferred
Stock (the "Shares");

         WHEREAS, 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 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:

                                    AGREEMENT

         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.

                1.3  AGREEMENT TO ADJUST TERMS OF SHARES.

         The shares shall not have the anti-dilution protections that are
provided in Section 5.1(k)(1) of the Amended and Restated Articles but shall
benefit from the protections provided for such shares as set forth elsewhere in
Section 5 of the Amended and Restated Articles.

                                      1
<PAGE>

                1.4  NO FURTHER ISSUANCE; SECOND ISSUANCE TO PURCHASER.

         The Company shall not issue any additional shares of Series S-1
Preferred Stock to any person other than Purchaser without Purchaser's prior
written consent. In addition, the further issuance of Series S-1 Preferred in
the Company to the Purchaser provided for in Section 3(ii)(2) of the Agreement,
dated as of November 2, 1999 between the Company and the Purchaser shall be
pursuant to a Stock Purchase Agreement containing terms and conditions
substantially similar to those provided in this Agreement; provided, however,
that the Series S-1 Conversion Price for such shares then issued shall be
adjusted so as to reflect the price per share payable for shares issued in
connection with the transaction described in the Comparable Partnering
Transaction (as defined as to characteristics and timing in the Amended and
Restated Articles) occurring immediately prior to such further issuance or, if
there were no such Comparable Partnering Transaction prior to such issuance, in
connection with the first Comparable Partnering Transaction occurring subsequent
to such issuance; and the Amended and Restated Articles shall be amended
accordingly.

         SECTION 2.  CLOSING, DELIVERY AND PAYMENT.

                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 each 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

                                      2
<PAGE>

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 seven million, seven hundred ninety one thousand
three hundred thirty two (37,791,332) shares, twenty one million three hundred
fifty eight thousand five hundred forty six (21,358,546) shares of which shall
be Common Stock (the "Common Stock") and sixteen million four hundred thirty two
thousand seven hundred eighty six (16,432,786) shares of which shall be
Preferred Stock (the "Preferred Stock"). Of the Preferred Stock, six million
seven hundred thousand (6,700,000) shares are hereby designated "Series A
Preferred Stock" (the "Series A Preferred"), nine million thirty two thousand
seven hundred eighty six (9,032,786) shares are hereby designated "Series B
Preferred Stock" (the "Series B Preferred"), and five hundred thousand (500,000)
shares are hereby designated "Series S-1 Preferred Stock" (the "Series S-1
Preferred"). Of the Common Stock, three million four hundred seventy two
thousand nine hundred (3,472,900) shares are issued and outstanding, of the six
million seven hundred thousand (6,700,000) shares of Series A Preferred Stock,
all are issued and outstanding, and of the nine million thirty two thousand
seven hundred eighty six (9,032,786) of Series B Preferred Stock, all are issued
and outstanding. All issued and outstanding shares of the Company's Common 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 to acquire one million five hundred sixty three
thousand, six hundred thirty (1,563,630) shares of Common Stock held by
officers, employees and consultants of the Company, and 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

                                      3
<PAGE>

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 September 30, 1999 (collectively, the "Financial Statements"). 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, other than (a) liabilities incurred in the ordinary
course of business subsequent to September 30, 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 twenty five thousand dollars ($25,000) (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) and licenses of certain patents from the Regents of
the University of California, 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).

                                      4
<PAGE>

                (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 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

                                      5
<PAGE>

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, fixtures, vehicles and other properties owned, leased
or used by the Company are in good operating condition, ordinary wear and
tear excepted, and are reasonably fit and useable for the purposes to which
they are being put.

                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

                                      6
<PAGE>

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 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 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.

                                      7
<PAGE>

                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 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, 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.

                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.

                                      8
<PAGE>

                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) 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.

         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

                                      9
<PAGE>

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.

                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  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. Purchaser also
understands that the Shares are being offered and sold pursuant to an
exemption from registration contained in the 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

                                      10
<PAGE>

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.
Further, Purchaser is aware of no publication of any advertisement in connection
with the transactions contemplated in the 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.

                (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 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.

                                      11
<PAGE>

                4.3  TRANSFER RESTRICTIONS.

         The Purchaser acknowledges and agrees that the Shares and, if issued,
the Conversion Shares are subject to restrictions on transfer as set forth in
the Amended and Restated Articles.

         SECTION 5. CONDITIONS TO CLOSING.

                5.1  CONDITIONS TO PURCHASERS' OBLIGATIONS AT THE CLOSING.

         Purchasers' 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.

         The stock certificates representing the Shares shall have been
delivered to the Secretary of the Company and shall have had appropriate legends
placed upon them.

                (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

                                      12
<PAGE>

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.

         The 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 Article 3 hereof are true and correct in all
material respects as of the Closing with the same force and effect as if 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 the Purchaser and the
Company are subject.

                (j)  LEGAL OPINION.

         The Purchaser shall have received from legal counsel to the Company a
favorable opinion addressed to the Purchaser, dated as of the Closing Date, in
form and substance reasonably satisfactory to the Purchaser.

                (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.

                                      13
<PAGE>

                (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)  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.

         "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 and Series B 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.

                                      14
<PAGE>

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 6 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.

         "SECURITIES ACT" shall mean the Securities Act of 1933, as amended.

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

         "SHARES" shall mean the Company's Series S-1 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 (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.

                                      15
<PAGE>

                (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 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

                                      16
<PAGE>

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.

                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:

                                      17
<PAGE>

                (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 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

                                      18
<PAGE>

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 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,
underwriter or controlling person for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim,

                                      19
<PAGE>

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 or officers 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 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 or controlling person of such other
Holder in connection with investigating or defending any such loss, claim,
damage, 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

                                      20
<PAGE>

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 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

                                      21
<PAGE>

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.

         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 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.

                                      22
<PAGE>

         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 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

                                      23
<PAGE>

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 Company
at its address as set forth on the signature page hereof and to Purchaser at its
address as set forth on the signature page hereof, or at such other address as
the Company or Purchaser may designate by ten (10) days advance written notice
to the other parties hereto.

                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
the 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.

                                      24
<PAGE>

                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.

                                      25
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have executed the SERIES S-1
PREFERRED STOCK PURCHASE AGREEMENT as of the date set forth in the first
paragraph hereof.

COMPANY:                                      PURCHASER:

DYNAVAX TECHNOLOGIES                          STALLERGENES S.A.
  CORPORATION

By:  /s/ Dino Dina                            By:  /s/ Albert Saporta
    -------------------------------             -------------------------------
              President & CEO                      Albert Saporta, PDG

ADDRESS:

     Dynavax Technologies Corporation         Stallergenes S. A.
     717 Potter Street, Suite 100             6, rue Alexis de Tocqueville
     Berkeley, CA  94710                      92183 Antony, Cedex, France

                                      26

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