Document:

Exhibit 10.45

 

REGISTRATION
RIGHTS AGREEMENT

 

This Registration Rights Agreement (the “Agreement”)
is made and entered into as of this 17th day of March 2006 by
and among Sunesis Pharmaceuticals, Inc., a Delaware corporation (the “Company”),
and the “Investors” named in that certain Common Stock and Warrant Purchase
Agreement, dated as of March 17, 2006 (the “Purchase Agreement”),
by and among the Company and the Investors.

 

The parties hereby agree as follows:

 

1.             Certain
Definitions.

 

As used in this Agreement, the following
terms shall have the following meanings:

 

“Affiliate” means, with respect to any
Person, any other Person which directly or indirectly controls, is controlled
by, or is under common control with, such Person.

 

“Business Day” means a day, other than
a Saturday or Sunday, on which banks in New York City are open for the general
transaction of business.

 

“Common Stock” shall mean the Company’s
common stock, par value $0.0001 per share.

 

“Effectiveness Date” means the date on
which the Registration Statement is declared effective by the SEC.

 

“Exchange Act” means the Securities
Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.

 

“Filing Date” means the date on which
the Registration Statement is first filed with the SEC.

 

“Investor Rights Agreement” means the
Eighth Amended and Restated Investor Rights Agreement, dated August 30,
2004, as amended, by and among the Company and the Persons listed on the
signature pages thereto.

 

“Investors” shall mean the Investors
identified in the Purchase Agreement and any Affiliate or permitted transferee
of any Investor who is a subsequent holder of any Registrable Securities.

 

“Person”
means an individual, corporation, partnership, limited liability company,
trust, business trust, association, joint stock company, joint venture, sole
proprietorship, unincorporated organization, governmental authority or any
other form of entity not specifically listed herein.

 

 “Prospectus”
shall mean the prospectus included in any Registration Statement, as amended or
supplemented by any prospectus supplement, with respect to the terms of the
offering of any portion of the Registrable Securities covered by such
Registration Statement and by all other amendments and supplements to the prospectus,
including post-effective amendments and all material incorporated by reference
in such prospectus.

 

“Register,” “registered” and “registration”
refer to a registration made by preparing and filing a Registration Statement
or similar document in compliance with the Securities Act (as

 

 

defined below), and the
declaration or ordering of effectiveness of such Registration Statement or
document.

 

“Registrable Securities” shall mean (i) the
Shares, (ii) the Warrant Shares and (iii) any other securities issued
or issuable with respect to or in exchange for Shares and the Warrant Shares,
including shares issued upon any stock split, stock dividend, recapitalization,
subdivision or similar event, provided that a
security shall cease to be a Registrable Security upon (A) sale pursuant
to a Registration Statement or Rule 144 under the Securities Act or (B) such
security becoming eligible for sale by the Investors pursuant to Rule 144(k).

 

“Registration Statement” shall mean
any registration statement of the Company filed under the Securities Act that
covers the resale of any of the Registrable Securities pursuant to the
provisions of this Agreement, amendments and supplements to such Registration
Statement, including post-effective amendments, all exhibits and all material
incorporated by reference in such Registration Statement.

 

“Required Investors” means the
Investors holding a majority of the Registrable Securities.

 

“SEC” means the Securities and
Exchange Commission.

 

“Securities Act” means the Securities
Act of 1933, as amended, and the rules and regulations promulgated
thereunder.

 

“Shares” means the shares of Common
Stock issued pursuant to the Purchase Agreement.

 

“Warrant Shares” means the shares of
Common Stock issuable upon exercise of the Warrants.

 

“Warrants” means the Warrants to
Purchase Shares of Common Stock of Sunesis Pharmaceuticals, Inc. issued
pursuant to the Purchase Agreement.

 

2.             Registration.

 

(a)           Registration
Statement.  As soon as reasonably
practicable following the Closing (as defined in the Purchase Agreement but no
later than thirty-five (35) days after the Closing (the “Filing Deadline”),
the Company shall prepare and file with the SEC a Registration Statement on Form S-1
covering the resale of the Shares and the Warrant Shares.  Such Registration Statement also shall cover
to the extent allowable under the Securities Act and the rules promulgated
thereunder, such indeterminate number of additional shares of Common Stock
resulting from stock splits, stock dividends or similar transactions with
respect to the Shares.  The Registration
Statement (and each amendment or supplement thereto, and each request for
acceleration of effectiveness thereof) shall be provided in accordance with Section 3(c) to
the Investors and their counsel prior to its filing or other submission.  If a Registration Statement covering the
Registrable Securities is not filed with the SEC on or prior to the Filing
Deadline, the Company will make pro rata payments to each Investor, as
liquidated damages and not as a penalty, in an amount equal to one percent
(1.0%) of the aggregate amount invested by such Investor for each 30-day period
or pro rata for any portion thereof following the Filing Deadline for which no
Registration Statement is filed with respect to the Registrable Securities; provided,
however, that the aggregate amount of such liquidated damages payable to
each Investor, together with the amount of any liquidated damages previously
paid pursuant to any

 

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provision of this Agreement, shall under no circumstances exceed ten
percent (10.0%) of the aggregate amount invested by such Investor.  Such payments shall be made to each Investor
in cash.

 

(b)          Expenses.  The Company will pay all expenses associated
with each registration, including filing and printing fees, the Company’s
counsel and accounting fees and expenses, costs associated with clearing the
Registrable Securities for sale under applicable state securities laws and
listing fees, but excluding fees and expenses of counsel to the Investors,
discounts, commissions, fees of underwriters, selling brokers, dealer managers
or similar securities industry professionals with respect to the Registrable
Securities being sold, provided that the Company shall pay the
reasonable fees and expenses, not to exceed $5,000 in the aggregate, of one
counsel for the Investors.

 

(c)           Effectiveness.

 

(i)            The
Company shall use commercially reasonable efforts to have the Registration
Statement declared effective as soon as practicable.  The Company shall notify the Investors by
facsimile or e-mail as promptly as practicable, and in any event, within
twenty-four (24) hours, after any Registration Statement is declared effective
and shall provide the Investors with copies of any related Prospectus to be
used in connection with the sale or other disposition of the securities covered
thereby.  If a Registration Statement
covering the Registrable Securities is not declared effective by the SEC within
(i) thirty-five (35) days after the Filing Date if the SEC shall have
informed the Company that no review of the Registration Statement will be made
or (ii) 105 days after the Filing Date if the SEC shall have informed the
Company that a review of the Registration Statement will be made, then the
Company will make pro rata payments to each Investor, as liquidated damages and
not as a penalty, in an amount equal to one percent (1.0%) of the aggregate
amount invested by such Investor for each 30-day period or pro rata for any
portion thereof following the date by which such Registration Statement should
have been effective; provided, however, that the aggregate amount
of such liquidated damages payable to each Investor, together with the amount
of any liquidated damages previously paid pursuant to any provision of this
Agreement, shall under no circumstances exceed ten percent (10.0%) of the
aggregate amount invested by such Investor. 
Such payments shall be made to each Investor in cash.

 

(ii)           After
such time as the Company becomes eligible to file a registration statement on Form S-3,
the Company shall file a post-effective amendment to the Registration Statement
to provide for the automatic incorporation by reference of the Company’s
reports subsequently filed pursuant to the Exchange Act.

 

(iii)          Except
as required by the provisions of the Investor Rights Agreement, the Company
shall not file a registration statement on Form S-1 or S-3 until the
Effectiveness Date.

 

3.             Suspension.

 

(a)           Subject to Section 3(b) below,
in the event: (i) of any request by the SEC or any other federal or state
governmental authority during the period of effectiveness of

 

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the Registration Statement for amendments or
supplements to the Registration Statement or related prospectus or for
additional information so that the Registration Statement will not contain an
untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
or otherwise fail to comply with the applicable rules and regulations of
the federal securities laws; (ii) of the issuance by the SEC or any other
federal or state governmental authority of any stop order suspending the
effectiveness of the Registration Statement or the initiation of any
proceedings for that purpose; (iii) of the receipt by the Company of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Securities for sale in any
jurisdiction or the initiation of any proceeding for such purpose, provided
that, considering the advice of counsel, the Company reasonably believes that
it must qualify in such jurisdiction; (iv) of any event or circumstance
that, considering the advice of counsel, the Company reasonably believes
necessitates the making of any changes in the Registration Statement or related
prospectus, or any document incorporated or deemed to be incorporated therein
by reference, so that, in the case of the Registration Statement, it will not
contain any untrue statement of a material fact or any omission to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and that in the case of a related prospectus, it will
not contain any untrue statement of a material fact or any omission to state a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; or (v) that the Company reasonably believes, considering the
advice of counsel, that the Company may, in the absence of a suspension
described hereunder, be required under state or federal securities laws to
disclose any corporate development, the disclosure of which could reasonably be
expected to have a material adverse effect upon the Company, its stockholders,
a potentially material transaction or event involving the Company, or any
negotiations, discussions or proposals directly relating thereto; then the Company
shall deliver a certificate in writing to each Holder of Registrable Securities
(the “Suspension Notice”) to the effect of the foregoing (but in no event,
without the prior written consent of an Investor, shall the Company disclose to
such Investor any of the facts or circumstances regarding any material
nonpublic information) and, upon receipt of such Suspension Notice, the Holder
will refrain from selling any Registrable Securities pursuant to the
Registration Statement (a “Suspension”) until the Holder’s receipt of copies of
a supplemented or amended prospectus prepared and filed by the Company or until
the Holder is advised in writing by the Company that the current prospectus may
be used and the Holder has received copies of any additional or supplemental
filings that are incorporated or deemed incorporated by reference in any such
prospectus.

 

(b)           Notwithstanding the
foregoing, the Company shall not suspend any Registration Statement or related
prospectus for more than thirty (30) consecutive days or for a total of not
more than sixty (60) days in any twelve (12) month period (each a “Permitted
Suspension” and together the “Permitted Suspensions”).

 

(c)           On any day after the
Effectiveness Date sales of all the Registrable Securities required to be included
on such Registration Statement cannot be made pursuant to such Registration
Statement (including, without limitation, because of a failure to keep such
Registration Statement effective, to disclose such information as is necessary
for sales to be made pursuant to such Registration Statement or to register
sufficient shares of Registrable Securities or because of a Suspension) then
the Company will make pro rata payments to each

 

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Investor, as liquidated damages and not as a penalty,
in an amount equal to one percent (1.0%) of the aggregate amount invested by
such Investor for each 30-day period or pro rata for any portion thereof
following the date by which such sales of Registrable Securities under the
Registration Statement cannot be made; provided, however, that
the aggregate amount of such liquidated damages payable to each Investor,
together with the amount of any liquidated damages previously paid pursuant to
any provision of this Agreement, shall under no circumstances exceed ten
percent (10.0%) of the aggregate amount invested by such Investor.  Such payments shall be made to each Investor
in cash.  Notwithstanding the foregoing,
the Company shall not be required to pay liquidated damages during any
Permitted Suspension.

 

(d)           The Company will use
commercially reasonable efforts to terminate an Suspension as promptly as
practicable after delivery of a Suspension Notice to the Holders.

 

4.             Company
Obligations.  The Company will use
commercially reasonable efforts to effect the registration of the Registrable
Securities in accordance with the terms hereof, and pursuant thereto the
Company will, as expeditiously as possible:

 

(a)           use
commercially reasonable efforts to cause such Registration Statement to become
effective and to remain continuously effective for a period that will terminate
upon the earlier of (i) the date on which all Registrable Securities have
been sold pursuant to the Registration Statement, as amended from time to time,
(ii) the date on which all Registrable Securities covered by such
Registration Statement may be sold pursuant to Rule 144 in a three-month
period and (iii) the two-year anniversary of the Effectiveness Date (the “Effectiveness
Period”) and advise the Investors in writing when the Effectiveness Period
has expired;

 

(b)          prepare
and file with the SEC such amendments and post-effective amendments to the
Registration Statement and such supplements to the Prospectus as may be
necessary to keep the Registration Statement effective for the period specified
in Section 4(a) and to comply with the provisions of the Securities
Act and the Exchange Act with respect to the distribution of all of the
Registrable Securities covered thereby;

 

(c)           provide
copies to and permit counsel designated by the Investors to review the
Registration Statement and any amendments or supplements thereto and any
comments made by the staff of the SEC and the Company’s responses thereto a
reasonable period of time prior to its filing with the SEC or its receipt from
the SEC as applicable and shall duly consider comments made by such counsel
thereon;

 

(d)          furnish
to the Investors and their legal counsel (i) promptly after the same is
prepared and publicly distributed, filed with the SEC, or received by the Company
(but not later than two (2) Business Days after the filing date, receipt
date or sending date, as the case may be) one (1) copy of any Registration
Statement and any amendment thereto, each preliminary prospectus and Prospectus
and each amendment or supplement thereto, and each letter written by or on
behalf of the Company to the SEC or the staff of the SEC, and each item of
correspondence from the SEC or the staff of the SEC, in each case relating to
such Registration Statement (other than any portion of any thereof which
contains information for

 

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which the Company has sought confidential treatment), and (ii) an
electronic copy of a Prospectus, including a preliminary prospectus, and all
amendments and supplements thereto and such other documents as each Investor
may reasonably request in connection with the disposition of the Registrable
Securities owned by such Investor that are covered by the related Registration
Statement;

 

(e)           use
commercially reasonable efforts to (i) prevent the issuance of any stop
order or other suspension of effectiveness and, (ii) if such order is
issued, obtain the withdrawal of any such order at the earliest practicable
time and to notify each Investor of the issuance of such an order and the
resolution thereof;

 

(f)           prior
to any public offering of Registrable Securities, use commercially reasonable
efforts to register or qualify or cooperate with the Investors and their
counsel in connection with the registration or qualification of such
Registrable Securities for offer and sale under the securities or blue sky laws
of such jurisdictions requested by the Investors and do any and all other
commercially reasonable acts or things necessary or advisable to enable the
distribution in such jurisdictions of the Registrable Securities covered by the
Registration Statement; provided, however, that the Company shall
not be required in connection therewith or as a condition thereto to (i) qualify
to do business in any jurisdiction where it would not otherwise be required to
qualify but for this Section 3(f), (ii) subject itself to general
taxation in any jurisdiction where it would not otherwise be so subject but for
this Section 3(f), or (iii) file a general consent to service of
process in any such jurisdiction;

 

(g)          use
commercially reasonable efforts to cause all Registrable Securities covered by
a Registration Statement to be listed on each securities exchange, interdealer
quotation system or other market on which similar securities issued by the
Company are then listed;

 

(h)          immediately
notify the Investors, at any time when a Prospectus relating to Registrable
Securities is required to be delivered under the Securities Act, upon discovery
that, or upon the happening of any event as a result of which, the Prospectus
included in a Registration Statement, as then in effect, includes an untrue
statement of a material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein not misleading in
light of the circumstances then existing, and at the request of any such
holder, promptly prepare and furnish to such holder an electronic copy of a
supplement to or an amendment of such Prospectus as may be necessary so that,
as thereafter delivered to the purchasers of such Registrable Securities, such
Prospectus shall not include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then existing;

 

(i)            otherwise
use commercially reasonable efforts to comply with all applicable rules and
regulations of the SEC under the Securities Act and the Exchange Act, take such
other actions as may be reasonably necessary to facilitate the registration of
the Registrable Securities hereunder; and make available to its security
holders, as soon as reasonably practicable, but not later than the Availability
Date (as defined below), an earnings statement covering a period of at least
twelve (12) months, beginning after the effective date of each Registration
Statement, which earnings statement shall satisfy the provisions of Section 11(a) of

 

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the Securities Act, including Rule 158 promulgated thereunder (for
the purpose of this subsection 3(i), “Availability Date” means the
45th day following the end of the fourth fiscal quarter that includes the
effective date of such Registration Statement, except that, if such fourth
fiscal quarter is the last quarter of the Company’s fiscal year, “Availability
Date” means the 90th day after the end of such fourth fiscal quarter); and

 

(j)            with
a view to making available to the Investors the benefits of Rule 144 (or
its successor rule) and any other rule or regulation of the SEC that may
at any time permit the Investors to sell shares of Common Stock to the public
without registration, the Company covenants and agrees to:  (i) make and keep public information
available, as those terms are understood and defined in Rule 144, during
the Effectiveness Period; (ii) file with the SEC in a timely manner all
reports and other documents required of the Company under the Exchange Act; and
(iii) furnish to each Investor upon request, as long as such Investor owns
any Registrable Securities, (A) a written statement by the Company that it
has complied with the reporting requirements of the Exchange Act, (B) a
copy of the Company’s most recent Annual Report on Form 10-K or Quarterly
Report on Form 10-Q, and (C) such other information as may be
reasonably requested in order to avail such Investor of any rule or
regulation of the SEC that permits the selling of any such Registrable
Securities without registration.

 

5.             Obligations of the
Investors.

 

(a)           Each
Investor shall furnish in writing to the Company such information regarding
itself, the Registrable Securities held by it and the intended method of
disposition of the Registrable Securities held by it, as shall be required to
effect the registration of such Registrable Securities and shall execute such
documents in connection with such registration as the Company may reasonably
request.  At least five (5) Business
Days prior to the first anticipated filing date of any Registration Statement,
the Company shall notify each Investor of the information the Company requires
from such Investor if such Investor elects to have any of the Registrable
Securities included in the Registration Statement.  An Investor shall provide such information to
the Company at least two (2) Business Days prior to the first anticipated
filing date of such Registration Statement if such Investor elects to have any
of the Registrable Securities included in the Registration Statement.

 

(b)          Each
Investor, by its acceptance of the Registrable Securities agrees to cooperate
with the Company as reasonably requested by the Company in connection with the
preparation and filing of a Registration Statement hereunder, unless such
Investor has notified the Company in writing of its election to exclude all of
its Registrable Securities from such Registration Statement.

 

(c)           Each
Investor agrees that, upon receipt of any notice from the Company of either (i) the
commencement of an Suspension pursuant to Section 3, such Investor will
immediately discontinue disposition of Registrable Securities pursuant to the
Registration Statement covering such Registrable Securities, until the Investor’s
receipt of the supplemented or amended prospectus filed with the SEC and until
any related post-effective amendment is declared effective and, if so directed
by the Company, the Investor shall deliver to the Company (at the expense of
the Company) or destroy (and deliver to the Company a certificate of

 

7

 

destruction) all copies in the Investor’s possession of the Prospectus
covering the Registrable Securities current at the time of receipt of such
notice.

 

6.             Indemnification.

 

(a)           Indemnification
by the Company.  The Company agrees
to indemnify and hold harmless, to the fullest extent permitted by law, the
Investors and their respective directors, officers, employees, stockholders and
each Person who controls any Investor (within the meaning of the Securities
Act) against any losses, claims, damages, liabilities and expense (including
reasonable attorney fees) resulting from or which arise out of or are based up
any untrue statement or alleged untrue statement of a material fact or any
omission or alleged omission of a material fact required to be stated in the
Registration Statement or Prospectus or preliminary prospectus or amendment or
supplement thereto or necessary to make the statements therein not misleading
and will reimburse each Investor and their respective directors, officers,
employees, stockholders or controlling Persons for any legal and other expenses
reasonably incurred as such expenses are reasonably incurred by such Person in
connection with investigating, defending, settling, compromising or paying any
such loss, claim, damage, liability, expense or action; provided,
however, that the Company will not be liable in any such case if and
to the extent that any such loss, claim, damage or liability arises out of or
is based upon an untrue statement or alleged untrue statement or omission or
alleged omission so made in conformity with information furnished by an
Investor in writing specifically for use in such Registration Statement or
Prospectus.

 

(b)          Indemnification
by the Investors.  Each Investor
agrees, severally but not jointly, to indemnify and hold harmless, to the
fullest extent permitted by law, the Company, its directors, officers,
employees, stockholders and each Person who controls the Company (within the
meaning of the Securities Act) against any losses, claims, damages, liabilities
and expense (including reasonable attorney fees) resulting from or which arise
out of or are based upon any untrue statement or alleged untrue statement of a
material fact or any omission or alleged omission of a material fact required
to be stated in the Registration Statement or Prospectus or preliminary
prospectus or amendment or supplement thereto or necessary to make the
statements therein not misleading, to the extent, but only to the extent that
such untrue statement or omission or alleged statement or omission is contained
in any information furnished in writing by such Investor to the Company
specifically for inclusion in such Registration Statement or Prospectus or
amendment or supplement thereto, and will reimburse the Company and its
directors, officers, employees, stockholders or controlling Persons for any
legal and other expenses reasonably incurred as such expenses are reasonably
incurred by such Person in connection with investigating, defending, settling,
compromising or paying any such loss, claim, damage, liability, expense or
action.  In no event shall the liability
of an Investor be greater in amount than the dollar amount of the proceeds (net
of all expense paid by such Investor in connection with any claim relating to
this Section 6 and the amount of any damages such Investor has otherwise
been required to pay by reason of such untrue statement or omission or alleged
untrue statement or omission) received by such Investor upon the sale of the
Registrable Securities included in the Registration Statement giving rise to
such indemnification obligation.

 

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(c)           Conduct
of Indemnification Proceedings.  Any
Person entitled to indemnification hereunder shall (i) give prompt notice
to the indemnifying party of any claim with respect to which it seeks
indemnification and (ii) permit such indemnifying party to assume the
defense of such claim with counsel reasonably satisfactory to the indemnified
party; provided that any Person entitled to indemnification hereunder shall
have the right to employ separate counsel and to participate in the defense of
such claim, but the fees and expenses of such counsel shall be at the expense
of such Person unless (a) the indemnifying party has agreed to pay such
fees or expenses, or (b) the indemnifying party shall have failed to
assume the defense of such claim within five (5) Business Days after
written notice thereof and employ counsel reasonably satisfactory to such
Person or (c) in the reasonable judgment of any such Person, considering
the advice of counsel, a conflict of interest exists between such Person and
the indemnifying party with respect to such claims (in which case, if the
Person notifies the indemnifying party in writing that such Person elects to
employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such claim
on behalf of such Person); and provided, further,
that the failure of any indemnified party to give notice as provided herein shall
not relieve the indemnifying party of its obligations hereunder, except to the
extent that such failure to give notice shall materially adversely affect the
indemnifying party in the defense of any such claim or litigation.  It is understood that the indemnifying party
shall not, in connection with any proceeding in the same jurisdiction, be
liable for fees or expenses of more than one additional firm of attorneys at
any time for all such indemnified parties. 
No indemnifying party will, except with the consent of the indemnified
party, consent to entry of any judgment or enter into any settlement that 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.

 

(d)          Contribution.  If for any reason the indemnification
provided for in the preceding paragraphs (a) and (b) is unavailable
to an indemnified party or insufficient to hold it harmless, other than as
expressly specified therein, then the indemnifying party shall contribute to
the amount paid or payable by the 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 indemnified party and the indemnifying party, as well as
any other relevant equitable considerations. 
No Person guilty of fraudulent misrepresentation within the meaning of Section 11(f) of
the Securities Act shall be entitled to contribution from any Person not guilty
of such fraudulent misrepresentation.  In
no event shall the contribution obligation of a holder of Registrable
Securities be greater in amount than the dollar amount of the proceeds (net of
all expenses paid by such holder in connection with any claim relating to this Section 6
and the amount of any damages such holder has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission) received by it upon the sale of the Registrable Securities giving
rise to such contribution obligation.

 

7.             Miscellaneous.

 

(a)           Amendments
and Waivers.  This Agreement may be
amended only by a writing signed by the Company and the Required Investors,
provided that any such amendment shall not disproportionately affect the rights
of any Investor, relative to all other Investors, without the consent of such
Investor.  The Company may take any
action herein prohibited, or omit to perform any act herein required to be
performed by it, only if the

 

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Company shall have obtained the written consent to such amendment,
action or omission to act, of the Required Investors.

 

(b)          Notices.  All notices and other communications provided
for or permitted hereunder shall be made as set forth in Section 9.4 of
the Purchase Agreement.

 

(c)           Assignments
and Transfers by Investors.  The
provisions of this Agreement shall be binding upon and inure to the benefit of
the Investors and their respective successors and assigns.  An Investor may transfer or assign, in whole
or from time to time in part, to one or more Persons its rights hereunder in
connection with the transfer of Registrable Securities by such Investor to such
Person, provided that such Investor complies with all laws applicable
thereto and provides written notice of assignment to the Company promptly after
such assignment is effected.

 

(d)          Assignments
and Transfers by the Company.  This
Agreement may not be assigned by the Company (whether by operation of law or
otherwise) without the prior written consent of the Required Investors, provided,
however, that the Company may assign its rights and delegate its duties
hereunder to any surviving or successor corporation in connection with a merger
or consolidation of the Company with another corporation, or a sale, transfer
or other disposition of all or substantially all of the Company’s assets to
another corporation, without the prior written consent of the Required
Investors, after notice duly given by the Company to each Investor.

 

(e)           Benefits
of the Agreement.  The terms and
conditions of this Agreement shall inure to the benefit of and be binding upon
the respective permitted successors and assigns of the parties.  Nothing in this Agreement, express or
implied, is intended to confer upon any party other than the parties hereto or
their respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.

 

(f)           Counterparts;
Faxes.  This Agreement may be
executed in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.  This Agreement may also be
executed via facsimile, which shall be deemed an original.

 

(g)          Titles
and Subtitles.  The titles and
subtitles used in this Agreement are used for convenience only and are not to
be considered in construing or interpreting this Agreement.

 

(h)          Severability.  Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof but shall be interpreted as if it
were written so as to be enforceable to the maximum extent permitted by
applicable law, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.  To the extent
permitted by applicable law, the parties hereby waive any provision of law
which renders any provisions hereof prohibited or unenforceable in any respect.

 

10

 

(i)            Further
Assurances.  The parties shall
execute and deliver all such further instruments and documents and take all
such other actions as may reasonably be required to carry out the transactions
contemplated hereby and to evidence the fulfillment of the agreements herein
contained.

 

(j)            Entire
Agreement.  This Agreement is
intended by the parties as a final expression of their agreement and intended
to be a complete and exclusive statement of the agreement and understanding of
the parties hereto in respect of the subject matter contained herein.  This Agreement supersedes all prior
agreements and understandings between the parties with respect to such subject
matter.

 

(k)           Governing
Law; Consent to Jurisdiction; Waiver of Jury Trial.  This Agreement shall be governed by, and
construed in accordance with, the internal laws of the State of California without
regard to the choice of law principles thereof. 
Each of the parties hereto irrevocably submits to the exclusive
jurisdiction of the courts of the State of California located in San Mateo
County and the United States District Court for the Northern District of
California for the purpose of any suit, action, proceeding or judgment relating
to or arising out of this Agreement and the transactions contemplated
hereby.  Service of process in connection
with any such suit, action or proceeding may be served on each party hereto
anywhere in the world by the same methods as are specified for the giving of
notices under this Agreement.  Each of
the parties hereto irrevocably consents to the jurisdiction of any such court
in any such suit, action or proceeding and to the laying of venue in such
court.  Each party hereto irrevocably
waives any objection to the laying of venue of any such suit, action or
proceeding brought in such courts and irrevocably waives any claim that any
such suit, action or proceeding brought in any such court has been brought in
an inconvenient forum.  EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO
REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS AGREEMENT AND
REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.

 

11

 

IN WITNESS
WHEREOF, the parties have executed this Registration Rights Agreement as of the
date first above written.

 

 

	
  The Company:

  	
  SUNESIS
  PHARMACEUTICALS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/  Daniel
  N. Swisher, Jr.

  
	
   

  	
  Name:

  	
  Daniel N.
  Swisher, Jr.

  
	
   

  	
  Title:

  	
  President
  and Chief Executive Officer

  
					

 

 

	
  The
  Investors:

  	
  ABINGWORTH
  BIOEQUITIES MASTER FUND LTD.

  
	
   

  	
  BY:   Its Manager, Abingworth Management

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/  James
  Abell

  	
   

  
	
   

  	
  Name: James
  Abell

  
	
   

  	
  Title: Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ALTA
  BIOPHARMA PARTNERS III, L.P.

  
	
   

  	
  BY:   ALTA BIOPHARMA MANAGEMENT III, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/  Hilary
  Strain

  	
   

  
	
   

  	
  Name: Hilary
  Strain

  
	
   

  	
  Title: Vice
  President, Finance and Administration

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Alta
  BioPharma Partners III GmbH & Co. Beteiligungs

  
	
   

  	
  KG

  
	
   

  	
  BY:   ALTA
  BIOPHARMA MANAGEMENT III, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/  Hilary
  Strain

  	
   

  
	
   

  	
  Name: Hilary
  Strain

  
	
   

  	
  Title: Vice
  President, Finance and Administration

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ALTA
  EMBARCADERO BIOPHARMA PARTNERS

  
	
   

  	
  III, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/  Hilary
  Strain

  	
   

  
	
   

  	
  Name: Hilary
  Strain

  
	
   

  	
  Title: Vice
  President, Finance and Administration

  

 

 

	
  The
  Investors:

  	
  BIOTECHNOLOGY
  VALUE FUND, L.P.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/  Mark
  Lambert

  	
   

  
	
   

  	
  Name: 

  	
   Mark
  Lambert

  
	
   

  	
  Title:

  	
   President
  of BVF Inc.

  
	
   

  	
   

  	
   General
  Partner of BVF Partners L.P.

  
	
   

  	
   

  	
   General
  Partner of Biotechnology Value Fund, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BIOTECHNOLOGY
  VALUE FUND II, L.P.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/  Mark
  Lambert

  	
   

  
	
   

  	
  Name: 

  	
   Mark
  Lambert

  
	
   

  	
  Title:

  	
   President
  of BVF Inc.

  
	
   

  	
   

  	
   General
  Partner of BVF Partners L.P.

  
	
   

  	
   

  	
   General
  Partner of Biotechnology Value Fund, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  INVESTMENT
  10, L.L.C.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/  Mark
  Lambert

  	
   

  
	
   

  	
  Name: 

  	
   Mark
  Lambert

  
	
   

  	
  Title:

  	
   President
  of BVF Inc.

  
	
   

  	
   

  	
   General
  Partner of BVF Partners L.P.

  
	
   

  	
   

  	
   General
  Partner of Biotechnology Value Fund, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BVF
  INVESTMENTS, L.L.C.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/  Mark
  Lambert

  	
   

  
	
   

  	
  Name: 

  	
   Mark
  Lambert

  
	
   

  	
  Title:

  	
   President
  of BVF Inc.

  
	
   

  	
   

  	
   General
  Partner of BVF Partners L.P.

  
	
   

  	
   

  	
   General
  Partner of Biotechnology Value Fund, L.P.

  
					

 

 

	
  The
  Investors:

  	
  DOMAIN
  PUBLIC EQUITY PARTNERS, L.P.

  
	
   

  	
  BY: Domain
  Public Equity Associates, L.L.C.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/  Nicole
  Vitullo

  	
   

  
	
   

  	
  Name: 

  	
   Nicole
  Vitullo

  
	
   

  	
  Title:

  	
   Managing
  Member

  
					

 

 

	
  The
  Investors:

  	
  THE
  BOARD OF TRUSTEES OF THE LELAND

  
	
   

  	
  STANFORD
  JUNIOR UNIVERSITY (SBST)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/  Martina
  S. Poquet

  	
   

  
	
   

  	
  Name:

  	
   Martina
  S. Poquet

  
	
   

  	
  Title:

  	
   Director,
  Separate Investments Division

  
					

 

 

	
  The
  Investors:

  	
  Warburg, Pincus Equity Partners, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Warburg
  Pincus Partners, LLC,

  
	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Warburg,
  Pincus & Co.,

  
	
   

  	
   

  	
  its Managing
  Member

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/  Jonathan Leff

  	
   

  
	
   

  	
  Name:

  	
   Jonathan Leff

  
	
   

  	
  Title:

  	
   Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Warburg, Pincus Netherlands Equity Partners I, C.V.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Warburg
  Pincus Partners, LLC,

  
	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Warburg,
  Pincus & Co.,

  
	
   

  	
   

  	
  its Managing
  Member

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/  Jonathan Leff

  	
   

  
	
   

  	
  Name:

  	
   Jonathan Leff

  
	
   

  	
  Title:

  	
   Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Warburg, Pincus Netherlands Equity Partners III, C.V.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Warburg
  Pincus Partners, LLC,

  
	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Warburg,
  Pincus & Co.,

  
	
   

  	
   

  	
  its Managing
  Member

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/  Jonathan Leff

  	
   

  
	
   

  	
  Name:

  	
   Jonathan
  Leff

  
	
   

  	
  Title:

  	
   Partner

  
						

 

 

	
  The
  Investors:

  	
  Deerfield
  Special Situations Fund International, Ltd.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/  Darren
  Levine

  	
   

  
	
   

  	
  Name:

  	
   Darren
  Levine

  
	
   

  	
  Title:

  	
   CFO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Deerfield
  Special Situations Fund, L.P.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/  Darren
  Levine

  	
   

  
	
   

  	
  Name: 

  	
   Darren
  Levine

  
	
   

  	
  Title:

  	
   CFO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Deerfield
  Partners, L.P.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/  Darren
  Levine

  	
   

  
	
   

  	
  Name:

  	
   Darren
  Levine

  
	
   

  	
  Title:

  	
   CFO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Deerfield
  International Limited

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/  Darren
  Levine

  	
   

  
	
   

  	
  Name:

  	
   Darren
  Levine

  
	
   

  	
  Title:

  	
   CFO

  
					

 

 

	
  The
  Investors:

  	
  Baker
  Bros. Investments, L.P.

  
	
   

  	
  BY: Baker
  Bros. Capital, L.P. (general partner)

  
	
   

  	
  BY: Baker
  Bros. Capital (GP), LLC (general partner)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/  Julian
  Baker

  	
   

  
	
   

  	
  Name:

  	
   Julian
  Baker

  
	
   

  	
  Title:

  	
   Managing
  Member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Baker
  Bros. Investments II, L.P.

  
	
   

  	
  BY: Baker
  Bros. Capital, L.P. (general partner)

  
	
   

  	
  BY: Baker
  Bros. Capital (GP), LLC (general partner)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/  Julian
  Baker

  	
   

  
	
   

  	
  Name:

  	
   Julian
  Baker

  
	
   

  	
  Title:

  	
   Managing
  Member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Baker
  Biotech Fund I, L.P.

  
	
   

  	
  BY: Baker
  Bros. Capital, L.P. (general partner)

  
	
   

  	
  BY: Baker
  Bros. Capital (GP), LLC (general partner)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/  Julian
  Baker

  	
   

  
	
   

  	
  Name:

  	
   Julian
  Baker

  
	
   

  	
  Title:

  	
   Managing
  Member

  
	
   

  	
   

  	
   

  
	
   

  	
  Baker
  Biotech Fund II, L.P.

  
	
   

  	
  BY: Baker
  Bros. Capital II, L.P. (general partner)

  
	
   

  	
  BY: Baker
  Bros. Capital II (GP), LLC (general partner)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/  Julian
  Baker

  	
   

  
	
   

  	
  Name:

  	
   Julian
  Baker

  
	
   

  	
  Title:

  	
   Managing
  Member

  
	
   

  	
   

  	
   

  
	
   

  	
  Baker
  Biotech Fund II (Z), L.P.

  
	
   

  	
  BY: Baker
  Bros. Capital II (Z), L.P. (general partner)

  
	
   

  	
  BY: Baker
  Bros. Capital II (Z) (GP), LLC (general partner)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/  Julian
  Baker

  	
   

  
	
   

  	
  Name:

  	
   Julian
  Baker

  
	
   

  	
  Title:

  	
   Managing
  Member

  
					

 

 

	
  The
  Investors:

  	
  Baker
  Biotech Fund III, L.P.

  
	
   

  	
  BY: Baker
  Bros. Capital III, L.P. (general partner)

  
	
   

  	
  BY: Baker
  Bros. Capital III (GP), LLC (general partner)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/  Julian
  Baker

  	
   

  
	
   

  	
  Name:

  	
   Julian
  Baker

  
	
   

  	
  Title:

  	
   Managing
  Member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Baker
  Biotech Fund III (Z), L.P.

  
	
   

  	
  BY: Baker
  Bros. Capital III (Z), L.P. (general partner)

  
	
   

  	
  BY: Baker
  Bros. Capital III (Z) (GP), LLC (general partner)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/  Julian
  Baker

  	
   

  
	
   

  	
  Name:

  	
   Julian
  Baker

  
	
   

  	
  Title:

  	
   Managing
  Member

  
	
   

  	
   

  	
   

  
	
   

  	
  14159,
  L.P.

  
	
   

  	
  BY: 14159
  Capital, L.P. (general partner)

  
	
   

  	
  BY: 14159
  Capital (GP), LLC (general partner)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/  Julian
  Baker

  	
   

  
	
   

  	
  Name:

  	
   Julian
  Baker

  
	
   

  	
  Title:

  	
   Managing
  MemberExhibit 10.46

 

THIS WARRANT AND THE UNDERLYING SECURITIES HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY
STATE SECURITIES LAWS.  THIS WARRANT AND
THE UNDERLYING SECURITIES MAY NOT BE TRANSFERRED UNLESS (I) THIS WARRANT
AND THE UNDERLYING SECURITIES HAVE BEEN REGISTERED FOR SALE PURSUANT TO THE
SECURITIES ACT, (II) THIS WARRANT AND THE UNDERLYING SECURITIES MAY BE
SOLD PURSUANT TO RULE 144(K) OR (III) THE COMPANY HAS RECEIVED AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO IT THAT SUCH TRANSFER MAY LAWFULLY BE
MADE WITHOUT REGISTRATION UNDER THE SECURITIES ACT OR QUALIFICATION UNDER
APPLICABLE STATE SECURITIES LAWS.

 

WARRANT TO PURCHASE SHARES OF COMMON STOCK

OF SUNESIS PHARMACEUTICALS, INC.

 

THIS
CERTIFIES THAT, for value received,                                    
is entitled to subscribe for and purchase                        
fully paid and nonassessable shares (the “Shares”) of common stock, par
value $0.0001 per share (the “Common Stock”), of Sunesis Pharmaceuticals, Inc.,
a Delaware corporation (the “Company”), at a price per share equal to $6.21
(such price and such other price as shall result, from time to time, from the
adjustments specified in Section 4 hereof is herein referred to as the “Warrant
Price”), upon the terms and subject to the conditions hereinafter set
forth.

 

1.     Term.  The purchase right represented by this
warrant is exercisable, in whole or in part, at any time and from time to time
from March 17, 2006 (the “Date of Grant”) until the 7-year
anniversary of the Date of Grant.

 

2.     Method of Exercise; Payment; Issuance of New
Warrant.  Subject to Section 1 hereof, the
purchase right represented by this warrant may be exercised by the holder
hereof, in whole or in part and from time to time, at the election of the
holder hereof, by (a) the surrender of this warrant (with the notice of
exercise substantially in the form attached hereto as Exhibit A-1 duly
completed and executed) at the principal office of the Company and by the
payment to the Company, by certified or bank check, or by wire transfer to an
account designated by the Company (a “Wire Transfer”) of an amount equal
to the then applicable Warrant Price multiplied by the number of Shares then
being purchased; or (b)  exercise of the “net issuance” right provided for
in Section 9 hereof.  The person or
persons in whose name(s) any certificate(s) representing shares of Common Stock
shall be issuable upon exercise of this warrant shall be deemed to have become
the holder(s) of record of, and shall be treated for all purposes as the record
holder(s) of, the shares represented thereby (and such shares shall be deemed
to have been issued) immediately prior to the close of business on the date or
dates upon which this warrant is exercised. 
In the event of any exercise of the rights represented by this
warrant, certificates for the shares of stock so purchased shall be delivered
to the holder hereof as soon as practicable and in any event within thirty (30)
days after such exercise and, unless this warrant has been fully exercised or
expired, a new warrant representing the portion of the Shares, if any, with
respect to which this warrant shall not then have been exercised shall also be
issued to the

 

 

holder hereof as soon as practicable and in any event
within such thirty-day period; provided, however, if requested by the holder of
this warrant, the Company shall use reasonable efforts to cause its transfer
agent to deliver the certificate representing Shares issued upon exercise of this
warrant to a broker or other person (as directed by the holder exercising this
warrant) within the time period required to settle any trade made by the holder
after exercise of this warrant.

 

3.     Stock Fully Paid; Reservation of Shares.  All
Shares that may be issued upon the exercise of the rights represented by this
warrant will, upon issuance pursuant to the terms and conditions herein, be
fully paid and nonassessable, and free from all preemptive rights and taxes,
liens and charges with respect to the issue thereof.  During the period within which the rights
represented by this warrant may be exercised, the Company will at all times
have authorized, and reserved for the purpose of the issue upon exercise of the
purchase rights evidenced by this warrant, a sufficient number of shares of
Common Stock to provide for the exercise of the rights represented by this
warrant.  If at any time during the term
of this warrant the number of authorized but unissued shares of Common Stock
shall not be sufficient to permit exercise of this warrant, the Company will
take such corporate action as may, in the opinion of its counsel, be necessary
to increase its authorized but unissued shares of Common Stock to such number
of shares as shall be sufficient for such purposes.

 

4.     Adjustment of Warrant Price and Number of Shares.  The
number of shares of Common Stock purchasable upon the exercise of this warrant
and the Warrant Price shall be subject to adjustment from time to time upon the
occurrence of certain events, as follows:

 

(a)           Reclassification
or Merger.  In case of any
reclassification or change of securities of the class issuable upon exercise of
this warrant (other than a change in par value, or from par value to no par
value, or from no par value to par value, or as a result of a subdivision or
combination), or in case of any merger of the Company with or into another
corporation (other than a merger with another corporation in which the Company
is the acquiring and the surviving corporation and which does not result in any
reclassification or change of outstanding securities issuable upon exercise of
this warrant), or in case of any sale of all or substantially all of the assets
of the Company, the Company, or such successor or purchasing corporation, as
the case may be, shall duly execute and deliver to the holder of this warrant a
new warrant (in form and substance reasonably satisfactory to the  holder of this warrant), so that the holder
of this warrant shall have the right to receive upon exercise of this warrant,
at a total purchase price equal to that payable upon the exercise of the
unexercised portion of this warrant, and in lieu of the shares of Common Stock
theretofore issuable upon exercise of this warrant, the kind and amount of
shares of stock, other securities, money and property receivable upon such
reclassification, change, merger or sale by a holder of the number of shares of
Common Stock then purchasable under this warrant.  Any new warrant shall provide for adjustments
that shall be as nearly equivalent as may be practicable to the adjustments
provided for in this Section 4.  The
provisions of this Section 4(a) shall similarly apply to successive
reclassifications, changes, mergers and sales.

 

(b)           Subdivision
or Combination of Shares.  If the
Company at any time while this warrant remains outstanding and unexpired shall
subdivide or combine its outstanding shares of Common Stock, the Warrant Price
shall be proportionately decreased and the number of Shares 

 

2

 

issuable
hereunder shall be proportionately increased in the case of a subdivision and
the Warrant Price shall be proportionately increased and the number of Shares
issuable hereunder shall be proportionately decreased in the case of a
combination.

 

(c)           Stock
Dividends and Other Distributions. 
If the Company at any time while this warrant is outstanding and
unexpired shall (i) pay a dividend with respect to Common Stock payable in
Common Stock, then the Warrant Price shall be adjusted, from and after the date
of determination of stockholders entitled to receive such dividend or
distribution, to that price determined by multiplying the Warrant Price in
effect immediately prior to such date of determination by a fraction (A) the
numerator of which shall be the total number of shares of Common Stock
outstanding immediately prior to such dividend or distribution, and (B) the
denominator of which shall be the total number of shares of Common Stock
outstanding immediately after such dividend or distribution; or (ii) make
any other distribution with respect to Common Stock (except any distribution
specifically provided for in Sections 4(a) and 4(b)), then, in each
such case, provision shall be made by the Company such that the holder of this
warrant shall receive upon exercise of this warrant a proportionate share of
any such dividend or distribution as though it were the holder of the Common
Stock as of the record date fixed for the determination of the stockholders of
the Company entitled to receive such dividend or distribution.

 

(d)           Adjustment
of Number of Shares.  Upon each
adjustment in the Warrant Price, the number of shares of Common Stock
purchasable hereunder shall be adjusted, rounded up to the nearest whole share,
to the product obtained by multiplying the number of Shares purchasable
immediately prior to such adjustment in the Warrant Price by a fraction, the
numerator of which shall be the Warrant Price immediately prior to such
adjustment and the denominator of which shall be the Warrant Price immediately
thereafter.

 

5.     Notice of Adjustments.  Whenever
the Warrant Price or the number of Shares purchasable hereunder shall be
adjusted pursuant to Section 4 hereof, the Company shall make a
certificate signed by its chief financial officer setting forth, in reasonable
detail, the event requiring the adjustment, the amount of the adjustment, the
method by which such adjustment was calculated, and the Warrant Price and the
number of Shares purchasable hereunder after giving effect to such adjustment,
and shall cause copies of such certificate to be mailed to the holder of this
warrant.

 

6.     Fractional Shares.  No
fractional shares of Common Stock will be issued in connection with any
exercise hereunder, but in lieu of such fractional shares the Company shall
make a cash payment therefor based on the product resulting from multiplying
the then fair market value of the Common Stock on the date of exercise as
determined in good faith by the Company’s Board of Directors by such fraction.

 

7.     Compliance with Act; Disposition of Warrant or
Shares of Common Stock.

 

(a)           Compliance
with Act.  The holder of this
warrant, by acceptance hereof, agrees that this warrant, and the shares of
Common Stock to be issued upon exercise hereof are being acquired for investment
and that such holder will not offer, sell or otherwise dispose of this warrant,
or any shares of Common Stock except under circumstances which will not result
in a violation of 

 

3

 

the
Securities Act of 1933, as amended (the “Securities Act”) or any
applicable state securities laws.  Upon
exercise of this warrant, unless the Shares being acquired are registered under
the Securities Act and any applicable state securities laws or an exemption
from such registration is available, the holder hereof shall confirm in writing
that the shares of Common Stock so purchased are being acquired for investment
and not with a view toward distribution or resale in violation of the
Securities Act and shall confirm such other matters related thereto as may be
reasonably requested by the Company. 
This warrant and all shares of Common Stock issued upon exercise of this
warrant (unless registered under the Securities Act and any applicable state
securities laws) shall be stamped or imprinted with a legend in substantially
the following form:

 

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), OR ANY STATE SECURITIES LAWS.  THE
SECURITIES REPRESENTED HEREBY MAY NOT BE TRANSFERRED UNLESS (I) SUCH
SECURITIES HAVE BEEN REGISTERED FOR SALE PURSUANT TO THE SECURITIES ACT, (II)
SUCH SECURITIES MAY BE SOLD PURSUANT TO RULE 144(K) OR (III) THE COMPANY
HAS RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT THAT SUCH
TRANSFER MAY LAWFULLY BE MADE WITHOUT REGISTRATION UNDER THE SECURITIES
ACT OR QUALIFICATION UNDER APPLICABLE STATE SECURITIES LAWS.

 

Said legend shall be
removed by the Company, upon the request of a holder, at such time as the
restrictions on the transfer of the applicable security shall have
terminated.  In addition, in connection
with the issuance of this warrant, the holder specifically represents to the
Company by acceptance of this warrant as follows:

 

(1)           The
holder is aware of the Company’s business affairs and financial condition, and
has acquired information about the Company sufficient to reach an informed and
knowledgeable decision to acquire this warrant. 
The holder is acquiring this warrant for its own account for investment
purposes only and not with a view to, or for the resale in connection with, any
“distribution” thereof in violation of the Securities Act.

 

(2)           The
holder understands that this warrant has not been registered under the
Securities Act in reliance upon a specific exemption therefrom, which exemption
depends upon, among other things, the bona fide nature of the holder’s
investment intent as expressed herein.

 

(3)           The
holder further understands that this warrant must be held indefinitely unless
subsequently registered under the Securities Act and qualified under any
applicable state securities laws, or unless exemptions from registration and
qualification are otherwise available. 
The holder is aware of the provisions of Rule 144, promulgated
under the Securities Act.

 

(4)           The
holder is an “accredited investor” as such term is defined in Rule 501 of
Regulation D promulgated under the Securities Act.

 

4

 

(b)           Disposition
of Warrant or Shares.    This warrant
and any shares of Common Stock acquired pursuant to the exercise or conversion
of this warrant may be transferred only pursuant to a registration statement
filed under the Securities Act or an exemption from such registration.  Subject to such restrictions, the Company
shall transfer this warrant from time to time upon the books to be maintained
by the Company for that purpose, upon surrender thereof for transfer properly
endorsed or accompanied by appropriate instructions for transfer and such other
documents as may be reasonably required by the Company, including, if required
by the Company, an opinion of counsel to the effect that such transfer is
exempt from the registration requirements of the Securities Act to establish
that such transfer is being made in accordance with the terms hereof, and a new
warrant shall be issued to the transferee and the surrendered warrant shall be
cancelled by the Company.  Each
certificate representing this warrant or the shares of Common Stock thus
transferred (except a transfer pursuant to Rule 144 or 144A) shall bear a
legend as to the applicable restrictions on transferability in order to ensure
compliance with such laws, unless such legend is not required in order to
ensure compliance with such laws.  The
Company may issue stop transfer instructions to its transfer agent in
connection with such restrictions.

 

(c)           Applicability
of Restrictions.  Neither any
restrictions of any legend described in this warrant nor the requirements of Section 7(b) above
shall apply to any transfer of, or grant of a security interest in, this
warrant (or the Common Stock obtainable upon exercise hereof) or any part
hereof (i) to a partner of the holder if the holder is a partnership or to
a member of the holder if the holder is a limited liability company, (ii) to
a partnership of which the holder is a partner or to a limited liability
company of which the holder is a member, or (iii) to any affiliate of the
holder if the holder is a corporation; provided, however, in any such transfer,
if applicable, the transferee shall on the Company’s request agree in writing
to be bound by the terms of this warrant as if an original holder hereof.

 

8.     Rights as Stockholders; Information.  No holder
of this warrant, as such, shall be entitled to vote or receive dividends or be
deemed the holder of Common Stock issuable upon the exercise hereof for any
purpose, nor shall anything contained herein be construed to confer upon the
holder of this warrant, as such, any of the rights of a stockholder of the
Company or any right to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to receive notice of
meetings, or to receive dividends or subscription rights or otherwise until
this warrant shall have been exercised and the Shares purchasable upon the
exercise hereof shall have become deliverable, as provided herein.

 

9.     Right to Convert Warrant into Stock:  Net Issuance.

 

(a)           Right
to Convert.  In addition to and
without limiting the rights of the holder under the terms of this warrant, the
holder shall have the right to convert this warrant or any portion thereof (the
“Conversion Right”) into shares of Common Stock as provided in this Section 9
at any time or from time to time during the term of this warrant.  Upon exercise of the Conversion Right with
respect to a particular number of shares subject to this warrant (the “Converted
Warrant Shares”), the Company shall deliver to the holder (without payment
by the holder of any exercise 

 

5

 

price or
any cash or other consideration) that number of shares of fully paid and
nonassessable Common Stock as is determined according to the following formula:

 

X =   B - A  

Y

 

Where:           X =                  the
number of shares of Common Stock that shall be issued to holder

 

Y =                  the fair market
value of one share of Common Stock

 

A =                 the
aggregate Warrant Price of the specified number of Converted Warrant Shares
immediately prior to the exercise of the Conversion Right (i.e.,
the number of Converted Warrant Shares multiplied by the Warrant Price)

 

B =                  the
aggregate fair market value of the specified number of Converted Warrant Shares
(i.e., the number of Converted Warrant
Shares multiplied by the fair market value of one Converted Warrant Share)

 

No fractional shares
shall be issuable upon exercise of the Conversion Right, and, if the number of
shares to be issued determined in accordance with the foregoing formula is
other than a whole number, the Company shall pay to the holder an amount in
cash equal to the fair market value of the resulting fractional share on the
Conversion Date (as hereinafter defined).

 

(b)           Method
of Exercise.  The Conversion Right
may be exercised by the holder by the surrender of this warrant at the
principal office of the Company together with a written statement (which may be
in the form of Exhibit A-1) specifying that the holder thereby intends to
exercise the Conversion Right and indicating the number of shares subject to
this warrant which are being surrendered (referred to in Section 9(a) hereof
as the Converted Warrant Shares) in exercise of the Conversion Right.  Such conversion shall be effective upon
receipt by the Company of this warrant together with the aforesaid written
statement, or on such later date as is specified therein (the “Conversion
Date”).  Certificates for the shares
issuable upon exercise of the Conversion Right and, if applicable, a new
warrant evidencing the balance of the shares remaining subject to this warrant,
shall be issued as of the Conversion Date and shall be delivered to the holder
within thirty (30) days following the Conversion Date.

 

(c)           Determination
of Fair Market Value.  For purposes
of this Section 9, “fair market value” of a share of Common Stock
as of a particular date (the “Determination Date”) shall mean:  (i) if traded on a securities exchange,
the fair market value of the Common Stock shall be deemed to be the average of
the closing prices of the Common Stock on such exchange over the five trading
days immediately prior to the Determination Date as reported by Bloomberg
Financial Markets (or a comparable reporting service of national reputation
selected by the Company and reasonably acceptable to the holder if Bloomberg
Financial Markets is not then reporting sales prices of such security) (collectively,
“Bloomberg”); (ii) if traded on the Nasdaq Stock Market or other
over-the-counter system, the fair market value of the Common Stock shall be
deemed to be the 

 

6

 

average
of the closing bid prices of the Common Stock over the five trading days
immediately prior to the Determination Date as reported by Bloomberg; and (iii) if
there is no public market for the Common Stock, then fair market value shall be
determined by the Board of Directors of the Company in good faith.

 

10.   Representations and Warranties.  The
Company represents and warrants to the holder of this warrant as follows:

 

(a)           This
warrant has been duly authorized and executed by the Company and is a valid and
binding obligation of the Company enforceable in accordance with its terms,
subject to laws of general application relating to bankruptcy, insolvency and
the relief of debtors and the rules of law or principles at equity
governing specific performance, injunctive relief and other equitable remedies.

 

(b)           The
Shares have been duly authorized and reserved for issuance by the Company and,
when issued in accordance with the terms hereof, will be validly issued, fully
paid and nonassessable and free from preemptive rights.

 

(c)           The
execution and delivery of this warrant are not, and the issuance of the Shares
upon exercise of this warrant in accordance with the terms hereof will not be,
inconsistent with the Company’s certificate of incorporation or bylaws, do not
and will not contravene any law, governmental rule or regulation, judgment
or order applicable to the Company, and do not and will not conflict with or
contravene any provision of, or constitute a default under, any indenture,
mortgage, contract or other instrument of which the Company is a party or by
which it is bound or require the consent or approval of, the giving of notice
to, the registration or filing with or the taking of any action in respect of
or by, any federal, state or local government authority or agency or other person,
except for the filing of notices pursuant to federal and state securities laws,
which filings will be effected by the time required thereby.

 

11.   Modification and Waiver.  This
warrant and any provision hereof may be changed, waived, discharged or terminated
only by an instrument in writing signed by the party against which enforcement
of the same is sought.

 

12.   Notices.  Any notice, request,
communication or other document required or permitted to be given or delivered
to the holder hereof or the Company shall be delivered, or shall be sent by
certified or registered mail, postage prepaid, to each such holder at its
address as shown on the books of the Company or to the Company at the address
indicated therefor on the signature page of this warrant.

 

13.   Binding Effect on Successors.  This
warrant shall be binding upon any corporation succeeding the Company by merger,
consolidation or acquisition of all or substantially all of the Company’s
assets, and all of the obligations of the Company relating to the Common Stock
issuable upon the exercise or conversion of this warrant shall survive the
exercise, conversion and termination of this warrant and all of the covenants
and agreements of the Company shall inure to the benefit of the successors and
assigns of the holder hereof.

 

7

 

14.   Lost Warrants or Stock Certificates.  The
Company covenants to the holder hereof that, upon receipt of evidence
reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of this warrant or any stock certificate and, in the case of any
such loss, theft or destruction, upon receipt of an indemnity reasonably
satisfactory to the Company, or in the case of any such mutilation upon
surrender and cancellation of such warrant or stock certificate, the Company
will make and deliver a new warrant or stock certificate, of like tenor, in
lieu of the lost, stolen, destroyed or mutilated warrant or stock certificate.

 

15.   Descriptive Headings.  The
descriptive headings of the various sections of this warrant are inserted for
convenience only and do not constitute a part of this warrant.  The language in this warrant shall be
construed as to its fair meaning without regard to which party drafted this
warrant.

 

16.   Governing Law.  This warrant shall be construed
and enforced in accordance with, and the rights of the parties shall be
governed by, the laws of the State of California.

 

17.   Remedies.  In case any one or more of the
covenants and agreements contained in this warrant shall have been breached,
the holder hereof (in the case of a breach by the Company), or the Company (in
the case of a breach by a holder), may proceed to protect and enforce their or
its rights either by suit in equity and/or by action at law, including, but not
limited to, an action for damages as a result of any such breach and/or an
action for specific performance of any such covenant or agreement contained in
this warrant.

 

18.   No Impairment of Rights.  The
Company will not, by amendment of its certificate of incorporation or through
any other means, avoid or seek to avoid the observance or performance of any of
the terms of this warrant, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such action as may be
necessary or appropriate in order to protect the rights of the holder of this
warrant against impairment.

 

19.   Severability.  The invalidity or
unenforceability of any provision of this warrant in any jurisdiction shall not
affect the validity or enforceability of such provision in any other
jurisdiction, or affect any other provision of this warrant, which shall remain
in full force and effect.

 

20.   Recovery of Litigation Costs.  If any
legal action or other proceeding is brought for the enforcement of this
warrant, or because of an alleged dispute, breach, default, or
misrepresentation in connection with any of the provisions of this warrant, the
successful or prevailing party or parties shall be entitled to recover
reasonable attorneys’ fees and other costs incurred in that action or
proceeding, in addition to any other relief to which it or they may be
entitled.

 

21.   Entire Agreement; Modification.  This
warrant constitutes the entire agreement between the parties pertaining to the
subject matter contained in it and supersedes all prior and contemporaneous
agreements, representations, and undertakings of the parties, whether oral or
written, with respect to such subject matter.

 

(Signature page follows)

 

8

 

 

 

The Company has caused
this Warrant to Purchase Shares of Common Stock of Sunesis Pharmaceuticals, Inc.
to be duly executed and delivered as of the Date of Grant specified above.

 

	
   

  	
  SUNESIS
  PHARMACEUTICALS, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
  341 Oyster Point
  Boulevard

  
	
   

  	
   

  	
  South San
  Francisco, CA 94080

  
						

 

9

 

EXHIBIT A-1

 

NOTICE OF EXERCISE

 

To:          SUNESIS
PHARMACEUTICALS, INC. (the “Company”)

 

1.             The
undersigned hereby:

 

o            elects
to purchase
              
shares of common stock of the Company pursuant to the terms of the attached
warrant, and tenders herewith payment of the purchase price of such shares in
full, or

 

o            elects
to exercise its net issuance rights pursuant to Section 9 of the attached
warrant with respect to            
shares of common stock.

 

2.             Please
issue a certificate or certificates representing                  
shares in the name of the undersigned or in such other name or names as are
specified below:

 

	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (Name)

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (Address)

  	
   

  	
   

  

 

3.             The
undersigned represents that the aforesaid shares are being acquired for the
account of the undersigned for investment and not with a view to, or for resale
in connection with, the distribution thereof and that the undersigned has no
present intention of distributing or reselling such shares, all except as in
compliance with applicable securities laws.

 

	
   

  	
   

  	
   

  
	
   

  	
  (Signature)

  

 

 

	
   

  	
   

  
	
  (Date)

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