Document:

QuickLinks
 -- Click here to rapidly navigate through this document

 
 

Exhibit 10.11    
    

 
 

INDEMNIFICATION AGREEMENT    
    

        THIS AGREEMENT (the "Agreement") is made and entered into as
of                            , 2000, between THERAVANCE INC., a Delaware corporation ("the
Company"), and                        ("Indemnitee"). 

        WITNESSETH
THAT: 

        WHEREAS,
Indemnitee performs a valuable service for the Company; and 

        WHEREAS,
the Board of Directors of the Company has adopted Bylaws (the "Bylaws") providing for the indemnification of the officers and directors of the Company to the maximum extent
authorized by Section 145 of the Delaware General Corporation Law, as amended ("Law"); and 

        WHEREAS,
the Bylaws and the Law, by their nonexclusive nature, permit contracts between the Company and the officers or directors of the Company with respect to indemnification of such
officers or directors; and 

        WHEREAS,
in accordance with the authorization as provided by the Law, the Company may purchase and maintain a policy or policies of directors' and officers' liability insurance
("D & O Insurance"), covering certain liabilities which may be incurred by its officers or directors in the performance of their obligations to the Company; and 

        WHEREAS,
in recognition of past services and in order to induce Indemnitee to continue to serve as an officer or director of the Company, the Company has determined and agreed to enter
into this contract with Indemnitee; 

        NOW,
THEREFORE, in consideration of Indemnitee's service as an officer or director after the date hereof, the parties hereto agree as follows: 

        1.     Indemnity of Indemnitee. The Company hereby agrees to hold harmless and indemnify Indemnitee to the full extent authorized
or permitted by the provisions of the Law, as such may be amended from time to time, and Article VI of the Bylaws, as such may be amended from time to time. In furtherance of the foregoing
indemnification, and without limiting the generality thereof: 

        (a)   Proceedings Other Than Proceedings by or in the Right of the Company. Indemnitee shall be entitled to the rights of
indemnification provided in this Section l(a) if, by reason of his Corporate Status (as hereinafter defined), he is, or is threatened to be made, a party to or participant in any Proceeding (as
hereinafter defined) other than a Proceeding by or in the right of the Company. Pursuant to this Section 1(a), Indemnitee shall be indemnified against all Expenses (as hereinafter defined),
judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by him or on his behalf in connection with such Proceeding or any claim, issue or matter therein, if he
acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company and, with respect to any criminal Proceeding, had no reasonable cause to believe
his conduct was unlawful. 

        (b)   Proceedings by or in the Right of the Company. Indemnitee shall be entitled to the rights of indemnification provided in
this Section 1(b) if, by reason of his Corporate Status, he is, or is threatened to be made, a party to or participant in any Proceeding brought by or in the right of the Company. Pursuant to
this Section 1(b), Indemnitee shall be indemnified against all Expenses actually and reasonably incurred by him or on his behalf in connection with such Proceeding if he acted in good faith and
in a manner he reasonably believed to be in or not opposed to the best interests of the Company; provided, however, that, if applicable law so provides, no indemnification against such Expenses shall
be made in respect of any claim, issue or matter in such Proceeding as to which Indemnitee shall have been adjudged to 

 

be
liable to the Company unless and to the extent that the Court of Chancery of the State of Delaware shall determine that such indemnification may be made. 

        (c)   Indemnification for Expenses of a Party Who is Wholly or Partly Successful. Notwithstanding any other provision of this
Agreement, to the extent that Indemnitee is, by reason of his Corporate Status, a party to and is successful, on the merits or otherwise, in any Proceeding, he shall be indemnified to the maximum
extent permitted by law against all Expenses actually and reasonably incurred by him or on
his behalf in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or
matters in such Proceeding, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him or on his behalf in connection with each successfully resolved claim,
issue or matter. For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be
a successful result as to such claim, issue or matter. 

        2.     Additional Indemnity. In addition to, and without regard to any limitations on, the indemnification provided for in
Section 1, the Company shall and hereby does indemnify and hold harmless Indemnitee against all Expenses, judgments, penalties, fines and amounts paid in settlement actually and reasonably
incurred by him or on his behalf if, by reason of his Corporate Status, he is, or is threatened to be made, a party to or participant in any Proceeding (including a Proceeding by or in the right of
the Company), including, without limitation, all liability arising out of the negligence or active or passive wrongdoing of Indemnitee. The only limitation that shall exist upon the Company's
obligations pursuant to this Agreement shall be that the Company shall not be obligated to make any payment to Indemnitee that is finally determined (under the procedures, and subject to the
presumptions, set forth in Sections 6 and 7 hereof) to be unlawful under Delaware law. 

        3.     Contribution in the Event of Joint Liability. 

        (a)   Whether
or not the indemnification provided in Sections 1 and 2 hereof is available, in respect of any threatened, pending or completed action, suit or proceeding in
which Company is jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), Company shall pay, in the first instance, the entire amount of any judgment or settlement of
such action, suit or proceeding without requiring Indemnitee to contribute to such payment and Company hereby waives and relinquishes any right of contribution it may have against Indemnitee. Company
shall not enter into any settlement of any action, suit or proceeding in which Company is jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding) unless such
settlement provides for a full and final release of all claims asserted against Indemnitee. 

        (b)   Without
diminishing or impairing the obligations of the Company set forth in the preceding subparagraph, if, for any reason, Indemnitee shall elect or be required to pay
all or any portion of any judgment or settlement in any threatened, pending or completed action, suit or proceeding in which Company is jointly liable with Indemnitee (or would be if joined in such
action, suit or proceeding), the Company shall contribute to the amount of expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred and
paid or payable by Indemnitee in proportion to the relative benefits received by the Company and all officers, directors or employees of the Company other than Indemnitee who are jointly liable with
Indemnitee (or would be if joined in such action, suit or proceeding), on the one hand, and Indemnitee, on the other hand, from the transaction from which such action, suit or proceeding arose;
provided, however, that the proportion determined on the basis of relative benefit may, to the extent necessary to conform to law, be 

2

 

further
adjusted by reference to the relative fault of Company and all officers, directors or employees of the Company other than Indemnitee who are jointly liable with Indemnitee (or would be if
joined in such action, suit or proceeding), on the one hand, and Indemnitee, on the other hand, in connection with the events that resulted in such expenses, judgments, fines or settlement amounts, as
well as any other equitable considerations which the law may require to be considered. The relative fault of Company and all officers, directors or employees of the Company other than Indemnitee who
are jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), on the one hand, and Indemnitee, on the other hand, shall be determined by reference to, among other
things, the degree to which their actions were motivated by intent to gain personal profit or advantage, the degree to which their liability is primary or secondary, and the degree to which their
conduct is active or passive. 

        (c)   Company
hereby agrees to fully indemnify and hold Indemnitee harmless from any claims of contribution which may be brought by officers, directors or employees of the
Company other than Indemnitee who may be jointly liable with Indemnitee. 

        4.     Indemnification for Expenses of a Witness. Notwithstanding any other provision of this Agreement, to the extent that
Indemnitee is, by reason of his Corporate Status, a witness in any Proceeding to which Indemnitee is not a party, he shall be indemnified against all Expenses actually and reasonably incurred by him
or on his behalf in connection therewith. 

        5.     Advancement of Expenses. Notwithstanding any other provision of this Agreement, the Company shall advance all Expenses
incurred by or on behalf of Indemnitee in connection with any Proceeding by reason of Indemnitee's Corporate Status within ten (10) days after the receipt by the Company of a statement or
statements from Indemnitee requesting such advance or advances from time to time, whether prior to or after final disposition of such Proceeding. Such statement or statements shall reasonably evidence
the Expenses incurred by Indemnitee and shall include or be preceded or accompanied by an undertaking by or on behalf of Indemnitee to repay any Expenses advanced if it shall ultimately be determined
that Indemnitee is not entitled to be indemnified against such Expenses. Any advances and undertakings to repay pursuant to this Section 5 shall be unsecured and interest free. Notwithstanding
the foregoing, the obligation of the Company to advance Expenses pursuant to this Section 5 shall be subject to the condition that, if, when and to the extent that the Company determines
that Indemnitee would not be permitted to be indemnified under applicable law, the Company shall be entitled to be reimbursed, within thirty (30) days of such determination, by Indemnitee (who
hereby agrees to reimburse the Company) for all such amounts theretofore paid; provided, however, that if Indemnitee has commenced or thereafter commences legal proceedings in a court of competent
jurisdiction to secure a determination that Indemnitee should be indemnified under applicable law, any determination made by the Company that Indemnitee would not be permitted to be indemnified under
applicable law shall not be binding and Indemnitee shall not be required to reimburse the Company for any advance of Expenses until a final judicial determination is made with respect thereto (as to
which all rights of appeal therefrom have been exhausted or lapsed). 

        6.     Procedures and Presumptions for Determination of Entitlement to Indemnification. It is the intent of this Agreement to
secure for Indemnitee rights of indemnity that are as favorable as may be permitted under the law and public policy of the State of Delaware. Accordingly, the parties agree that the following
procedures and presumptions shall apply in the event of any question as to whether Indemnitee is entitled to indemnification under this Agreement: 

        (a)   To
obtain indemnification (including, but not limited to, the advancement of Expenses and contribution by the Company) under this Agreement, Indemnitee shall submit to
the Company a written request, including therein or therewith such documentation and 

3

 

information
as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification. The Secretary of the Company shall,
promptly upon receipt of such a request for indemnification, advise the Board of Directors in writing that Indemnitee has requested indemnification. 

        (b)   Upon
written request by Indemnitee for indemnification pursuant to the first sentence of Section 6(a) hereof, a determination, if required by applicable law, with
respect to Indemnitee's entitlement thereto shall be made in the specific case by one of the following three methods, which shall be at the election of Indemnitee: (1) by a majority vote of the
disinterested directors, even though less than a quorum, or (2) by independent legal counsel ("Independent Counsel") in a written opinion, or (3) by the stockholders. 

        (c)   If
the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 6(b) hereof, the Independent Counsel shall be
selected as provided in this Section 6(c). The Independent Counsel shall be selected by Indemnitee (unless Indemnitee shall request that such selection be made by the Board of Directors).
Indemnitee or the Company, as the case may be, may, within 10 days after such written notice of selection shall have been given, deliver to the Company or to Indemnitee, as the case may be, a
written objection to such selection; provided, however, that such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of "Independent
Counsel" as defined in Section 13 of this Agreement, and the objection shall set forth with particularity the factual basis of such assertion. Absent a proper and timely objection, the person
so selected shall act as Independent Counsel. If a
written objection is made and substantiated, the Independent Counsel selected may not serve as Independent Counsel unless and until such objection is withdrawn or a court has determined that such
objection is without merit. If, within 20 days after submission by Indemnitee of a written request for indemnification pursuant to Section 6(a) hereof, no Independent Counsel shall have
been selected and not objected to, either the Company or Indemnitee may petition the Court of Chancery of the State of Delaware or other court of competent jurisdiction for resolution of any objection
which shall have been made by the Company or Indemnitee to the other's selection of Independent Counsel and/or for the appointment as Independent Counsel of a person selected by the court or by such
other person as the court shall designate, and the person with respect to whom all objections are so resolved or the person so appointed shall act as Independent Counsel under Section 6(b)
hereof. The Company shall pay any and all reasonable fees and expenses of Independent Counsel incurred by such Independent Counsel in connection with acting pursuant to Section 6(b) hereof, and
the Company shall pay all reasonable fees and expenses incident to the procedures of this Section 6(c), regardless of the manner in which such Independent Counsel was selected or appointed. 

        (d)   In
making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall presume that
Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 6(a) of this Agreement. Anyone seeking to
overcome this presumption shall have the burden of proof and the burden of persuasion, by clear and convincing evidence. 

        (e)   Indemnitee
shall be deemed to have acted in good faith if Indemnitee's action is based on the records or books of account of the Enterprise, including financial
statements, or on information supplied to Indemnitee by the officers of the Enterprise in the course of their duties, or on the advice of legal counsel for the Enterprise or on information or records
given or reports made to the Enterprise by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the Enterprise. In addition, the knowledge
and/or actions, or failure to act, of any director, officer, agent or employee of the 

4

 

Enterprise
shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement. Whether or not the foregoing provisions of this Section 6(e) are
satisfied, it shall in any event be presumed that Indemnitee has at all times acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company.
Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion, by clear and convincing evidence. 

        (f)    If
the person, persons or entity empowered or selected under Section 6 to determine whether Indemnitee is entitled to indemnification shall not have made a
determination within thirty (30) days after receipt by the Company of the request therefor, the requisite determination of entitlement to indemnification shall be deemed to have been made and
Indemnitee shall be entitled to such indemnification, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee's statement not
materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law; provided, however, that such 30 day period
may be extended for a reasonable time, not to exceed an additional
fifteen (15) days, if the person, persons or entity making the determination with respect to entitlement to indemnification in good faith requires such additional time for the obtaining or
evaluating documentation and/or information relating thereto; and provided, further, that the foregoing provisions of this Section 6(f) shall not apply if the determination of entitlement to
indemnification is to be made by the stockholders pursuant to Section 6(b) of this Agreement and if (A) within fifteen (15) days after receipt by the Company of the request for
such determination the Board of Directors or the Disinterested Directors, if appropriate, resolve to submit such determination to the stockholders for their consideration at an annual meeting thereof
to be held within seventy five (75) days after such receipt and such determination is made thereat, or (B) a special meeting of stockholders is called within fifteen (15) days
after such receipt for the purpose of making such determination, such meeting is held for such purpose within sixty (60) days after having been so called and such determination is made thereat. 

        (g)   Indemnitee
shall cooperate with the person, persons or entity making such determination with respect to Indemnitee's entitlement to indemnification, including providing
to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to
Indemnitee and reasonably necessary to such determination. Any Independent Counsel, member of the Board of Directors, or stockholder of the Company shall act reasonably and in good faith in making a
determination under the Agreement of the Indemnitee's entitlement to indemnification. Any costs or expenses (including attorneys' fees and disbursements) incurred by Indemnitee in so cooperating with
the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee's entitlement to indemnification) and the Company hereby
indemnifies and agrees to hold Indemnitee harmless therefrom. 

        (h)   The
Company acknowledges that a settlement or other disposition short of final judgment may be successful if it permits a party to avoid expense, delay, distraction,
disruption and uncertainty. In the event that any action, claim or proceeding to which Indemnitee is a party is resolved in any manner other than by adverse judgment against Indemnitee (including,
without limitation, settlement of such action, claim or proceeding with or without payment of money or other consideration) it shall be presumed that Indemnitee has been successful on the merits or
otherwise in such action, suit or proceeding. Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion, by clear and convincing evidence. 

5

 

        7.     Remedies of Indemnitee. 

        (a)   In
the event that (i) a determination is made pursuant to Section 6 of this Agreement that Indemnitee is not entitled to indemnification under this
Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 5 of this Agreement, (iii) no determination of entitlement to indemnification shall have been made
pursuant to Section 6(b) of this Agreement within 90 days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to
this Agreement within ten (10) days after receipt by the Company of a written request therefor, or (v) payment of indemnification is not made within ten (10) days after a
determination has been made that Indemnitee is entitled to indemnification or such determination is deemed to have been made pursuant to Section 6 of this Agreement, Indemnitee shall be
entitled to an adjudication in an appropriate court of the State of Delaware, or in any other court of competent jurisdiction, of his entitlement to such indemnification. Indemnitee shall commence
such proceeding seeking an adjudication within 180 days following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 7(a). The Company
shall not oppose Indemnitee's right to seek any such adjudication. 

        (b)   In
the event that a determination shall have been made pursuant to Section 6(b) of this Agreement that Indemnitee is not entitled to indemnification, any judicial
proceeding commenced pursuant to this Section 7 shall be conducted in all respects as a de novo trial, on the merits and Indemnitee shall not be
prejudiced by reason of that adverse determination under Section 6(b). 

        (c)   If
a determination shall have been made pursuant to Section 6(b) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by
such determination in any judicial proceeding commenced pursuant to this Section 7, absent a prohibition of such indemnification under applicable law. 

        (d)   In
the event that Indemnitee, pursuant to this Section 7, seeks a judicial adjudication of his rights under, or to recover damages for breach of, this Agreement,
or to recover under any directors' and officers' liability insurance policies maintained by the Company the Company shall pay on his behalf, in advance, any and all expenses (of the types described in
the definition of Expenses in Section 13 of this Agreement) actually and reasonably incurred by him in such judicial adjudication, regardless of whether Indemnitee ultimately is determined to
be entitled to such indemnification, advancement of expenses or insurance recovery. 

        (e)   The
Company shall be precluded from asserting in any judicial proceeding commenced pursuant to this Section 7 that the procedures and presumptions of this
Agreement are not valid, binding and enforceable and shall stipulate in any such court that the Company is bound by all the provisions of this Agreement. 

        8.     Non-Exclusivity; Survival of Rights; Insurance; Subrogation. 

        (a)   The
rights of indemnification as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under
applicable law, the certificate of incorporation of the Company, the Bylaws, any agreement, a vote of stockholders or a resolution of directors, or otherwise. No amendment, alteration or repeal of
this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his Corporate Status
prior to such amendment, alteration or repeal. To the extent that a change in the Law, whether by statute or judicial decision, permits greater indemnification than would be afforded currently under
the Bylaws and this Agreement, it is the intent of the parties hereto that 

6

 

Indemnitee
shall enjoy by this Agreement the greater benefits so afforded by such change. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other
right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy. 

        (b)   To
the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, officers, employees, or agents or fiduciaries of
the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which such person serves at the request of the Company, Indemnitee shall be
covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any such director, officer, employee or agent under such policy or
policies. 

        (c)   In
the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall
execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights. 

        (d)   The
Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable hereunder if and to the extent that Indemnitee has otherwise
actually received such payment under any insurance policy, contract, agreement or otherwise. 

        9.     Exception to Right of Indemnification. Notwithstanding any other provision of this Agreement, Indemnitee shall not be
entitled to indemnification under this Agreement with respect to any Proceeding brought by Indemnitee, or any claim therein, unless (a) the bringing of such Proceeding or making of such claim
shall have been approved by the Board of Directors of the Company or (b) such Proceeding is being brought by the Indemnitee to assert, interpret or enforce his rights under this Agreement. 

        10.   Duration of Agreement. All agreements and obligations of the Company contained herein shall continue during the period
Indemnitee is an officer or director of the Company (or is or was serving at the request of the Company as a director, officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise) and shall continue thereafter so long as Indemnitee shall be subject to any Proceeding (or any proceeding commenced under Section 7 hereof) by reason of his Corporate
Status, whether or not he is acting or serving in any such capacity at the time any liability or expense is incurred for which indemnification can be provided under this Agreement. This Agreement
shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors (including any direct or indirect successor by purchase, merger,
consolidation or otherwise to all or substantially all of the business or assets of the Company), assigns, spouses, heirs, executors and personal and legal representatives. This Agreement shall
continue in effect regardless of whether Indemnitee continues to serve as an officer or director of the Company or any other Enterprise at the Company's request. 

        11.   Security. To the extent requested by the Indemnitee and approved by the Board of Directors of the Company, the Company
may at any time and from time to time provide security to the Indemnitee for the Company's obligations hereunder through an irrevocable bank line of credit, funded trust or other collateral. Any such
security, once provided to the Indemnitee, may not be revoked or released without the prior written consent of the Indemnitee. 

        12.   Enforcement. 

7

 

        (a)   The
Company expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on it hereby in order to induce Indemnitee to serve
as an officer or director of the Company, and the Company acknowledges that Indemnitee is relying upon this Agreement in serving as an officer or director of the Company. 

        (b)   This
Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and
understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof. 

        13.   Definitions. For purposes of this Agreement: 

        (a)   "Corporate
Status" describes the status of a person who is or was a director, officer, employee or agent or fiduciary of the Company or of any other corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise which such person is or was serving at the express written request of the Company. 

        (b)   "Disinterested
Director" means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee. 

        (c)   "Enterprise"
shall mean the Company and any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise of which Indemnitee is or was
serving at the express written request of the Company as a director, officer, employee, agent or fiduciary. 

        (d)   "Expenses"
shall include all reasonable attorneys' fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs,
printing and binding costs, telephone charges, postage, delivery service fees, and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending,
preparing to prosecute or defend, investigating, participating, or being or preparing to be a witness in a Proceeding. 

        (e)   "Independent
Counsel" means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither presently is, nor in the past five years
has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party (other than with respect to matters concerning the Indemnitee under this Agreement, or
of other indemnitees under similar indemnification agreements), or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing,
the term "Independent Counsel" shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the
Company or Indemnitee in an action to determine Indemnitee's rights under this Agreement. The Company agrees to pay the reasonable fees of the Independent Counsel referred to above and to fully
indemnify such counsel against any and all Expenses, claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto. 

        (f)    "Proceeding"
includes any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative
hearing or any other actual, threatened or completed proceeding, whether brought by or in the right of the Company or otherwise and whether civil, criminal, administrative or investigative, in which
Indemnitee was, is or will be involved as a party or otherwise, by reason of the fact that Indemnitee is or was a director of the Company, by reason of any action taken by him or of any inaction on
his part while acting as an officer or director of the Company, or by reason of the fact that he is or was serving at the request of the Company as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other Enterprise; in each case whether or not he is acting or serving in any such capacity at the time 

8

 

any
liability or expense is incurred for which indemnification can be provided under this Agreement; including one pending on or before the date of this Agreement; and excluding one initiated by an
Indemnitee pursuant to Section 7 of this Agreement to enforce his rights under this Agreement. 

        14.   Severability. If any provision or provisions of this Agreement shall be held by a court of competent jurisdiction to be
invalid, void, illegal or otherwise unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including without
limitation, each portion of any section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in
any way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by law; and (b) to the fullest extent possible, the provisions of this Agreement (including,
without limitation, each portion of any section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable)
shall be construed so as to give effect to the intent manifested thereby. 

        15.   Modification and Waiver. No supplement, modification, termination or amendment of this Agreement shall be binding unless
executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not
similar) nor shall such waiver constitute a continuing waiver. 

        16.   Notice By Indemnitee. Indemnitee agrees promptly to notify the Company in writing upon being served with any summons,
citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification covered hereunder. The failure to so notify the
Company shall not relieve the Company of any obligation which it may have to the Indemnitee under this Agreement or otherwise unless and only to the extent that such failure or delay materially
prejudices the Company. 

        17.   Notices. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to
have been duly given if (i) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, or (ii) mailed by certified or
registered mail with postage prepaid, on the third business day after the date on which it is so mailed: 

        (a)   If
to Indemnitee, to the address set forth below Indemnitee signature hereto. 

        (b)   If
to the Company, to: 

901
Gateway Blvd.

South San Francisco, California 94080

Attention: 

or
to such other address as may have been furnished to Indemnitee by the Company or to the Company by Indemnitee, as the case may be. 

        18.   Identical Counterparts. This Agreement may be executed in one or more counterparts, each of which shall for all purposes
be deemed to be an original but all of which together shall constitute one and the same Agreement. Only one such counterpart signed by the party against whom enforceability is sought needs to be
produced to evidence the existence of this Agreement. 

        19.   Headings. The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to
constitute part of this Agreement or to affect the construction thereof. 

9

 

        20.   Governing Law. The parties agree that this Agreement shall be governed by, and construed and enforced in accordance with,
the laws of the State of Delaware without application of the conflict of laws principles thereof. 

        21.   Gender. Use of the masculine pronoun shall be deemed to include usage of the feminine pronoun where appropriate. 

10

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

	 	 	THERAVANCE, INC.
	 	 	 	 	 	 	 	 	 
	 	 	By:	 	 	 	 	 	 
	 	 	 	 	

	 	 	 	 	Name:	 	 	 	 
	 	 	 	 	 	 	

	 	 	 	 	Title:	 	 	 	 
	 	 	 	 	 	 	

	 	 	 	 	 	 	 	 	 
	 	 	Address: 901 Gateway Blvd.

                    South San Francisco, California 94080
	 	 	 	 	 	 	 	 	 
	 	 	INDEMNITEE
	 	 	 	 	 	 	 	 	 
	

 	
 	

	 	 	 	 	 	 	 	 	 
	Address:	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	

	 	 	 	 	 	 	 	 	 
	 	 	

	 	 	 	 	 	 	 	 	 
	 	 	

	 	 	 	 	 	 	 	 	 
	 	 	

QuickLinks

Exhibit 10.11

INDEMNIFICATION AGREEMENTQuickLinks
 -- Click here to rapidly navigate through this document

 
 

Exhibit 10.12    
    

THERAVANCE, INC.  

 
 

CLASS A COMMON
  
  
  STOCK PURCHASE AGREEMENT
  
  
  March 30, 2004    
    

 
 

TABLE OF CONTENTS    
    

	 
	 	 
	 	Page

	1. Purchase and Sale of Stock	 	3
	 	 	1.1 Sale and Issuance of Class A Common Stock	 	3
	 	 	1.2 Closing	 	3
	 	 	1.3 Share Exchange	 	4
	

2. Representations and Warranties of the Company	
 	

4
	 	 	2.1 Organization, Good Standing and Qualification	 	4
	 	 	2.2 Capitalization and Voting Rights	 	4
	 	 	2.3 Subsidiaries	 	5
	 	 	2.4 Authorization	 	5
	 	 	2.5 Valid issuance of Preferred and Common Stock	 	6
	 	 	2.6 Governmental Consents	 	6
	 	 	2.7 Offering	 	6
	 	 	2.8 Litigation	 	6
	 	 	2.9 Patents and Trademarks	 	7
	 	 	2.10 Compliance with Other Instruments	 	7
	 	 	2.11 Agreements; Action	 	8
	 	 	2.12 Related-Party Transactions	 	8
	 	 	2.13 Permits	 	9
	 	 	2.14 Disclosure	 	9
	 	 	2.15 Corporate Documents	 	9
	 	 	2.16 Title to Property and Assets	 	9
	 	 	2.17 Tax Returns, Payments and Elections	 	9
	 	 	2.18 Environmental Law	 	9
	 	 	2.19 Proprietary Information and Employment Agreements	 	9
	 	 	2.20 Financial Statements	 	9
	 	 	2.21 Changes	 	10
	 	 	2.22 Registration Rights	 	11
	 	 	2.23 Real Property Holding Corporation	 	11
	 	 	2.24 Labor Agreements	 	11
	 	 	2.25 Insurance	 	11
	 	 	2.26 Directors and Senior Management	 	11
	 	 	2.27 Officer and Key Employee Incentive Plan	 	11
	

3. Representations and Warranties of the Investor	
 	

11
	 	 	3.1 Authorization	 	11
	 	 	3.2 Purchase Entirely for Own Account	 	12
	 	 	3.3 Disclosure of Information	 	12
	 	 	3.4 Investment Experience	 	12
	 	 	3.5 Accredited Investor	 	12
	 	 	3.6 Restricted Securities	 	12
	

4. Conditions of Investor's Obligations at Closing	
 	

12
	 	 	4.1 Performance	 	12
	 	 	4.2 Compliance Certificate	 	12
	 	 	4.3 Qualifications	 	13
	 	 	4.4 Proceedings and Documents	 	13
	 	 	4.5 Opinion of Company Counsel	 	13
	 	 	4.6 Investors' Rights Agreement	 	13
	 	 	4.7 Approval and Filing of the Restated Certificate	 	13
	 	 	4.8 Conversion of Existing Preferred Stock	 	13
	 	 	4.9 Governance Agreement	 	13
	 	 	 	 	 

 

	 	 	4.10 Strategic Alliance Agreement	 	13
	 	 	4.11 HSR Act	 	13
	 	 	4.12 Executive Lock-Up Agreements	 	13
	 	 	4.13 Conduct of the Company Business	 	13
	

5. Conditions of the Company's Obligations at Closing	
 	

13
	 	 	5.1 Representations and Warranties	 	13
	 	 	5.2 Qualifications	 	14
	 	 	5.3 Investors' Rights Agreement	 	14
	 	 	5.4 Restated Certificate	 	14
	 	 	5.5 Governance Agreement	 	14
	 	 	5.6 Strategic Alliance Agreement	 	14
	 	 	5.7 HSR Act	 	14
	 	 	5.8 Delivery of Common Stock	 	14
	

6. Miscellaneous	
 	

14
	 	 	6.1 Survival of Warranties	 	14
	 	 	6.2 Successors and Assigns	 	14
	 	 	6.3 Governing Law	 	14
	 	 	6.4 Counterparts	 	15
	 	 	6.5 Titles and Subtitles	 	15
	 	 	6.6 Notices	 	15
	 	 	6.7 Finder's Fee	 	15
	 	 	6.8 Expenses	 	15
	 	 	6.9 Amendments and Waivers	 	15
	 	 	6.10 Termination	 	15
	 	 	6.11 Severability	 	16
	 	 	6.12 Confidentiality	 	16
	 	 	6.13 Publicity	 	16
	 	 	6.14 Entire Agreement	 	16
	 	 	6.15 Legends	 	16
	 	 	6.17 Conduct of Business of the Company	 	17

 

	SCHEDULE A	 	Schedule of Exceptions
	EXHIBIT A	 	Restated Certificate of Incorporation
	EXHIBIT B	 	Amended and Restated Investors' Rights Agreement
	EXHIBIT C	 	Governance Agreement
	EXHIBIT D	 	Opinion of Counsel for the Company
	EXHIBIT E	 	Form of Executive Lock-Up Agreement
	EXHIBIT F	 	Summary of Terms of the Officer and Key Employee Incentive Plan

2

  

 
 

THERAVANCE, INC.
  
  CLASS A COMMON STOCK PURCHASE AGREEMENT    
    

        THIS STOCK PURCHASE AGREEMENT (the "Agreement") is made as of the 30th day of March, 2004, by and among Theravance, Inc., a Delaware corporation (the
"Company"), and SmithKline Beecham Corporation, a Pennsylvania corporation (the "Investor"). 

        WHEREAS,
Glaxo Group Limited, a limited liability company organized under the laws of England and Wales ("GGL") and the Company have entered into that certain Strategic
Alliance Agreement dated as of the date hereof (the "Alliance Agreement"), pursuant to which, among other things, the Company has granted GGL an option to develop and commercialize certain therapeutic
compounds on an exclusive, worldwide basis; 

        WHEREAS,
the Investor and the Company are contemporaneously entering into this Agreement, pursuant to which the Investor shall purchase shares of the Company's Class A Common
Stock, par value $0.01 (the "Class A Common Stock"); 

        WHEREAS,
as a condition to the stock purchase contemplated by this Agreement and to facilitate an eventual underwritten public offering of the Company's equity securities, all
outstanding shares of the Company's Preferred Stock not owned by GGL must be converted into shares of the Company's Common Stock; and 

        WHEREAS,
in connection with the stock purchase contemplated by this Agreement, the Company intends to implement a retention plan designed to retain and incent key employees, which shall
include various equity incentives following a successful underwritten public offering of the Company's equity securities. 

        THE
PARTIES HEREBY AGREE AS FOLLOWS: 

        1.     Purchase and Sale of Stock. 

        1.1   Sale and Issuance of Class A Common Stock. 

        (a)   On
or prior to the Closing (as defined below), (i) all issued and outstanding shares of preferred stock of the Company shall have converted into common stock and
(ii) the Company shall adopt and file with the Secretary of State Delaware the Restated Certificate of Incorporation in the form attached hereto as  Exhibit A (the "Restated Certificate").

        (b)   On
or prior to the Closing (as defined below), the Company shall have authorized the sale and issuance pursuant to this Agreement of 9,900,000 shares of its
Class A Common Stock at a price of $11.00 per share. The Class A Common Stock shall have the rights, preferences, privileges and restrictions set forth in the Restated Certificate. 

        (c)   Subject
to the terms and conditions of this Agreement, the Investor agrees to purchase at the Closing and the Company agrees to sell and issue to the Investor at the
Closing, 9,900,000 shares of the Company's Class A Common Stock for an aggregate purchase price of $108,900,000. 

        1.2   Closing. The purchase and sale of the Class A Common Stock shall take place at the offices of Gunderson Dettmer
Stough Villeneuve Franklin & Hachigian, LLP, 155 Constitution Drive, Menlo Park, CA 94025, at 10:00 A.M., on the date all conditions to closing set forth in Sections 4 and 5 have been
satisfied or effectively waived, or at such other time and place as the Company and Investor mutually agree upon orally or in writing (which time and place are designated as the "Closing"). At the
Closing the Company shall deliver to the Investor a certificate representing the Class A Common Stock that the Investor is purchasing against payment of the purchase price therefor by check or
wire transfer, or any combination thereof. 

3

 

        1.3   Exchange of Shares of Common Stock for Shares of Class A Common Stock. Upon the Closing, GGL shall be deemed to
have automatically exchanged, as of the date of the Closing, on a one-for-one basis, each share of Common Stock held by GGL for one share of Class A Common Stock. The
rights, preferences and privileges of the Common Stock and Class A Common Stock are as set forth in the Restated Certificate. 

        2.     Representations and Warranties of the Company. The Company hereby represents and warrants to the Investor that, as of the
date hereof, and except as set forth on a Schedule of Exceptions (the "Schedule of Exceptions") furnished to the Investor, which exceptions shall be deemed to be representations and warranties as if
made hereunder: 

        2.1   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 Delaware and has all requisite corporate power and authority to (i) execute, deliver and perform its obligations under this Agreement and the Amended and
Restated Investors' Rights Agreement, by and among the Company and the investors who are parties thereto, the form of which is attached hereto as  Exhibit B (the "Investors' Rights Agreement"),
(ii) to issue and sell the Class A Common Stock hereunder, (iii) to perform
its obligations under the Restated Certificate, and (iv) to carry on its business as now conducted and as proposed to be conducted. The Company is duly qualified to transact business and is in
good standing in each jurisdiction in which the failure to so qualify would have a material adverse effect on its business or properties. 

        2.2   Capitalization and Voting Rights. 

        (a)   As
of the date of this Agreement, the authorized capital of the Company consists of: 

        (i)    Preferred Stock. 51,500,000 shares of Preferred Stock (the "Preferred Stock"), of which (i) 5,020,000 shares have
been designated Series A Preferred Stock (the "Series A Preferred Stock"), 4,988,000 of which are outstanding; (ii) 5,100,000 shares have been designated Series B Preferred
Stock (the "Series B Preferred Stock"), 5,074,000 of which are outstanding; (iii) 18,823,000 shares have been designated Series C Preferred Stock (the "Series C Preferred
Stock"), 18,765,166 of which are outstanding; (iv) 1,666,666 shares have been designated Series D Preferred Stock (the "Series D Preferred Stock"), 1,666,666 of which are
outstanding (which are initially convertible into 2,777,777 shares of Common Stock); (v) 13,888,889 shares have been designated Series D-1 Preferred Stock (the
"Series D-1 Preferred Stock"), 13,169,905 of which are outstanding; and (vi) 4,000,000 shares have been designated Series E Preferred Stock (the "Series E
Preferred Stock"), all of which are outstanding. The rights, privileges and preferences of the Preferred Stock will be as stated in the Company's Restated Certificate of Incorporation on file with the
Secretary of State of the State of Delaware on the date hereof. 

        (ii)   Common Stock. 120,000,000 shares of common stock, par value $0.01 ("Common Stock"), of which 11,413,885 shares are
issued and outstanding. 

        (iii)  The
outstanding shares of Common Stock are all duly and validly authorized and issued, fully paid and nonassessable, and were issued in accordance with the
registration or qualification provisions of the Securities Act of 1933, as amended (the "Act") and any relevant state securities laws, or pursuant to valid exemptions therefrom. 

        (iv)  Except
for (A) the conversion privileges of the Preferred Stock, (B) the rights provided in Section 2.5 of the Investors' Rights Agreement,
(C) currently outstanding warrants to purchase 4,000 shares of Series A Preferred Stock, (D) currently outstanding warrants to purchase 4,000 shares of Series B Preferred
Stock, (E) currently outstanding warrants to purchase 48,611 shares of Series D-1 Preferred Stock, and (F) currently 

4

 

outstanding
options to purchase 13,630,463 shares of Common Stock granted to employees, directors, board members, consultants and service providers, there are not outstanding any options, warrants,
rights (including conversion or preemptive rights) or agreements for the purchase or acquisition from the Company of any shares of its capital stock. In addition to the aforementioned options, the
Company has reserved an additional 962,000 shares of its Common Stock for issuance upon exercise of options to be granted in the future under the Company's 1997 Stock Plan. Except for the provisions
of the Restated Certificate, the Investors' Rights Agreement and of that certain Amended and Restated Stockholders' Voting Agreement dated as of January 25, 1999 by and among the Company and
the other parties listed therein, the Company is not a party or subject to any agreement or understanding, and, to the best of the Company's knowledge, there is no agreement or understanding between
any persons and/or entities, which affects or relates to the voting or giving of written consents with respect to any security or by a director of the Company. No stock plan, stock purchase, stock
option or other agreement or understanding between the Company and any holder of any equity securities or rights to purchase equity securities provides for acceleration or other changes in the vesting
provisions of such agreement or understanding as the result of any merger, consolidated sale of stock or assets, change in control or any other similar transaction(s) by the Company. 

        (b)   Immediately
prior to the Closing, upon the filing of the Restated Certificate and assuming between the date hereof and the date of Closing (x) the exchange of
shares of Common Stock held by the Investor for shares of Class A Common Stock pursuant to Section 1.3 hereof, (y) no issuance by the Company of its capital stock or any security
exercisable for or convertible into capital stock of the Company pursuant to any employee, director or consultant compensation plan that has been approved by the majority of the Board of Directors and
(z) no exercise or conversion of any outstanding option, warrant or other security exercisable for or convertible into the capital stock of the Company, the authorized capital of the Company
shall consist of: 

        (i)    Preferred Stock. 5,000,000 shares of Preferred Stock (the "Preferred Stock"), none of which shall be outstanding. 

        (ii)   Common Stock. 175,000,000 shares of Common Stock, par value $0.01 ("Common Stock"), 56,188,733 of which shall be
outstanding 

        (iii)  Class A Common Stock. 13,900,000 shares of Class A Common Stock, 4,000,000 of which shall be outstanding
and 9,900,000 of which shall be sold pursuant to this Agreement. 

        2.3   Subsidiaries. The Company does not presently own or control, directly or indirectly, any interest in any other
corporation, association or other business entity, other than Theravance East, Inc., a Delaware corporation and a direct wholly-owned subsidiary of the Company. The Company is not a participant
in any joint venture, partnership, or similar arrangement. 

        2.4   Authorization. All corporate action on the part of the Company, its officers, directors and stockholders necessary for
the authorization, execution and delivery of this Agreement, the Investors' Rights Agreement and the Governance Agreement to be entered into by the Company and the Investor (and its affiliates), in
substantially the form attached hereto as Exhibit C (the "Governance Agreement," and collectively with this Agreement and the Investors' Rights
Agreement, the "Transaction Documents"), the performance of all obligations of the Company hereunder and thereunder, and the authorization, issuance (or reservation for issuance), sale and delivery of
the Class A Common Stock being sold hereunder has been taken or will be taken prior to the Closing, and the Transaction Documents constitute valid and legally binding obligations of the
Company, enforceable in accordance with their respective terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general 

5

 

application
affecting enforcement of creditors' rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies,
and (iii) to the extent the indemnification provisions contained in the Investors' Rights Agreement may be limited by applicable federal or state securities laws. 

        2.5   Valid Issuance of Preferred and Common Stock. The Class A Common Stock that is being purchased by the Investor
hereunder, when issued, sold and delivered in accordance with the terms of this Agreement for the consideration expressed herein, will be duly and validly issued, fully paid, and nonassessable, and
will be free of restrictions on transfer other than restrictions on transfer under the Transaction Documents and under applicable state and federal securities laws. The Class A Common Stock
that is being purchased by the Investor hereunder will not be subject to preemptive rights or rights of first refusal that have not been waived or complied with. Prior to the filing of the Restated
Certificate, the outstanding Series A, Series B, Series C, Series D, Series D-1 and Series E Preferred Stock was duly and validly issued, fully
paid, and is nonassessable. Upon the filing of the Restated Certificate, the Common Stock issuable upon conversion of the outstanding Series A, Series B, Series C,
Series D, Series D-1 and Series E Preferred Stock will be duly and validly reserved for issuance and, upon issuance, will be duly and validly issued, fully paid, and
nonassessable and will be free of restrictions on transfer other than restrictions on transfer under the documents executed in connection with the sale of the Series A, Series B,
Series C, Series D, Series D-1 and Series E Preferred Stock and under applicable state and federal securities laws. The outstanding Series A,
Series B, Series C, Series D, Series D-1 and Series E Preferred Stock is not subject to preemptive rights or rights of first refusal that have not been
waived or complied with and, upon the execution and delivery of the Investors' Rights Agreement by the requisite holders of Company capital stock necessary to amend and restate the "Prior Agreement"
(as such term is defined in the Investors' Rights Agreement), the Common Stock and Class A Common Stock issuable upon conversion of such Preferred Stock will not be subject to preemptive rights
or rights of first refusal that have not been waived or complied with. 

        2.6   Governmental Consents. No consent, approval, order or authorization of, or registration, qualification, designation,
declaration or filing with, any federal, state or local governmental authority on the part of the Company is required in connection with the consummation of the transactions contemplated by this
Agreement, except (i) a filing under the Hart Scott Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), (ii) the filing of the Restated Certificate with the Secretary
of State of Delaware; and (iii) certain post-closing filings as may be required pursuant to federal securities laws and under the "Blue Sky" laws of the various states. 

        2.7   Offering. Subject in part to the truth and accuracy of the Investor's representations set forth in Section 3 of
this Agreement, the offer, sale and issuance of the Class A Common Stock as contemplated by this Agreement are exempt from the registration requirements of any applicable state and federal
securities laws, and neither the Company nor any authorized agent acting on its behalf will take any action hereafter that would cause the loss of such exemption. 

        2.8   Litigation. There is no action, suit, proceeding or investigation pending or, to the Company's knowledge, currently
threatened against the Company that questions the validity of the Transaction Documents, or the right of the Company to enter into such agreements, or to consummate the transactions contemplated
hereby or thereby, or if determined adversely, might result, either individually or in the aggregate, in (i) any material adverse changes in the assets, business or prospects of the Company,
financially or otherwise or (ii) any change in the current equity ownership of the Company, nor is the Company aware that there is any basis for the foregoing. 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. There is no action, suit, proceeding or investigation by the Company
currently pending or that the Company intends to initiate. 

6

 

        2.9   Patents and Trademarks. The Company owns, or has rights to use pursuant to a valid license, all patents, trademarks,
service marks, trade names, copyrights, trade secrets, information, proprietary rights and processes necessary for its business as now conducted. There are no outstanding options, licenses or
agreements of any kind relating to the foregoing proprietary rights, 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 use, modification, licensing, sublicensing, sale, or any other exercise of rights involving such intellectual property does not infringe
any copyright, trade secret, trademark, service mark, trade name, firm name, logo, trade dress, mask work, moral right, other intellectual property right, right of privacy or right in personal data,
or to the knowledge of the Company, any patent, of any person. No claims (i) challenging the validity, effectiveness, or ownership by the Company of any of the Company's intellectual property,
or (ii) to the effect that the use, reproduction, modification, manufacturing, distribution, licensing, sublicensing, sale or any other exercise of rights in any product, work, technology,
service or process as used, provided or offered at any time, or as proposed for use, reproduction, modification, distribution, licensing, sublicensing, sale or any other exercise of rights, by the
Company infringes or will infringe on any
intellectual property or other proprietary or personal right of any person have been asserted or, to the knowledge of the Company, (A) are threatened by any person nor (B) are there any
valid grounds for any bona fide claim of any such kind. To the knowledge of the Company, there is no unauthorized use, infringement or misappropriation of any of the Company's intellectual property by
any third party, employee or former employee. The Company's employees are not obligated under any contract (including licenses, covenants or commitments of any nature) or other agreement, or subject
to any judgment, decree or order of any court or administrative agency, that would interfere with the use of his or her best efforts to promote the interests of the Company or that would conflict with
the Company's business as proposed to be conducted. Neither the execution nor delivery of the Transaction Documents, 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 best of the Company's knowledge, conflict with or result in a breach of the terms, conditions or provisions of, or constitute a default
under, any contract, covenant or instrument under which any of such employees is now obligated. The Company does not believe it is or will be necessary to utilize any inventions of any of its
employees made prior to their employment by the Company unless such inventions are properly assigned to the Company. 

        2.10 Compliance with Other Instruments. The Company is not in violation or default in any material respect of any provision
of its Restated Certificate or Bylaws, or in any material respect of any instrument, judgment, order, writ, decree or contract to which it is a party or by which it is bound, or, to the best of its
knowledge, of any provision of any statute, rule or regulation applicable to the Company. The execution, delivery and performance of the Transaction Documents, and the consummation of the transactions
contemplated hereby and thereby will not result in any such violation or be in conflict with or constitute, with or without the passage of time and giving of notice, either a default under any such
provision, instrument, judgment, order, writ, decree or contract or an event that results in the creation of any lien, charge or encumbrance upon any assets of the Company or the suspension,
revocation, impairment, forfeiture, or nonrenewal of any material permit, license, authorization, or approval applicable to the Company, its business or operations or any of its assets or properties. 

7

 

        2.11 Agreements; Action. 

        (a)   Except
for agreements explicitly contemplated by the Transaction Documents, there are no agreements, understandings or proposed transactions between the Company and any
of its officers, directors, affiliates, or any affiliate thereof. 

        (b)   Except
for this Agreement, the Governance Agreement, the Strategic Alliance Agreement and the Collaboration Agreement dated as of November 14, 2002 by and between
the Company and the Investor (the "Collaboration Agreement"), there are no agreements, understandings, instruments, contracts, proposed transactions, judgments, orders, writs or decrees to which the
Company is a party or by which it is bound that may involve (i) provisions restricting or affecting the development, manufacture or distribution of the Company's products or services;
(ii) obligations (contingent or
otherwise) of, or payments to, the Company in excess of $100,000 (other than obligations of, or payments to, the Company arising from agreements entered into in the ordinary course of business); or
(iii) indemnification by the Company with respect to infringements of proprietary rights (other than indemnification obligations arising from agreements entered into in the ordinary course of
business). 

        (c)   The
Company has not (i) declared or paid any dividends or authorized or made any distribution upon or with respect to any class or series of its capital stock,
(ii) incurred any indebtedness for money borrowed or any other liabilities individually in excess of $1,000,000 or in the aggregate in excess of $5,000,000, (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 subsection (c) above, all indebtedness and liabilities 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 subsection. 

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

        (f)    The
Company has not engaged in the past three (3) months 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. 

        2.12 Related-Party Transactions. No employee, officer, or director of the Company or member of his or her immediate family is
indebted to the Company, nor is the Company indebted (or committed to make loans or extend or guarantee credit) to any of them. To the Company's knowledge, none of such persons has any direct or
indirect ownership interest in any firm or corporation with which the Company is affiliated or with which the Company has a business relationship, or any firm or corporation that competes with the
Company, except that employees, officers, or directors of the Company and members of their immediate families may own stock in publicly traded companies that may compete with the Company. No member of
the immediate 

8

 

family
of any officer or director of the Company is directly or indirectly interested in any material contract with the Company. 

        2.13 Permits. The Company has all material franchises, permits, licenses, and any similar authority necessary for the conduct
of its business as now being conducted by it, and the Company believes it can obtain, without undue burden or expense, any similar authority for the conduct of its business as planned to be conducted.
The Company is not in default in any material respect under any of its franchises, permits, licenses, or other similar authority. 

        2.14 Disclosure. The Company has provided the Investor with all information requested by the Investor in connection with
their decision to purchase the Class A Common Stock, including all information the Company believes is reasonably necessary to make such investment decision. To the Company's knowledge, neither
this Agreement, the Investors' Rights Agreement, nor any other statements or certificates made or delivered in connection herewith or therewith contains any untrue statement of a material fact or
omits to state a material fact necessary to make the statements herein or therein not misleading. 

        2.15 Corporate Documents. Except for amendments necessary to satisfy representations and warranties or conditions contained
herein (the form of which amendments has been approved by the Investor), the Restated Certificate and Bylaws of the Company are in the form previously provided to the Investor. 

        2.16 Title to Property and Assets. The Company owns its property and assets free and clear of all mortgages, liens, loans and
encumbrances, except such encumbrances and liens that arise in the ordinary course of business and do not materially impair the Company's ownership or use of such property or assets, and has good and
marketable title to such property. With respect to the property and assets it leases, the Company is in compliance with such leases and holds a valid leasehold interest free of any liens, claims or
encumbrances. 

        2.17 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 assessments due, except those contested by it in good faith, if any. The Company has not been
advised (a) that any of its federal, state or local returns are being audited as of the date hereof, or (b) of any deficiency in assessment or proposed judgment to its federal, state or
other taxes. The Company has no knowledge of any tax liabilities due with respect to the Company or its properties or assets as of the date of this Agreement that are not adequately provided for. 

        2.18 Environmental Law. To the Company's knowledge, the Company is not in violation of and has no liability or potential
liability under any applicable statute, law, or regulation relating to the environment, and to the best of its knowledge, no material expenditures are or will be required in order to comply with any
such existing statute, law, or regulation. 

        2.19 Proprietary Information and Employment Agreements. Each current and former employee, officer and consultant of the
Company has executed a standard Proprietary Information and Inventions Agreement. The Company is not aware that any of its employees, officers or consultants are in violation thereof,
and the Company will use its best efforts to prevent any such violation. The Company has not entered into any employment agreements. 

        2.20 Financial Statements. The Company has made available to the Investor its audited financial statements as of
December 31, 2002 and its unaudited financials as of and for the twelve-month period ended December 31, 2003 (the "Financial Statements"). The Financial Statements have been prepared in
accordance with generally accepted accounting principles applied on a consistent basis throughout the periods indicated and with each other except that the unaudited Financial Statements may not
contain all footnotes required by generally accepted accounting 

9

 

principles.
The Financial Statements fairly present the financial condition and operating results of the Company as of the dates, and for the periods, indicated therein, subject in the case of the
unaudited Financial Statements to normal year-end audit adjustments. Except as set forth in the Financial Statements, the Company has no material liabilities, contingent or otherwise,
other than (i) liabilities incurred in the ordinary course of business subsequent to the date of the Financial Statements and (ii) 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, are
not material to the financial condition or operating results of the Company. Except as disclosed in the Financial Statements, the Company is not a guarantor or indemnitor of any indebtedness of any
other person, firm or corporation. The Company maintains and will continue to maintain a standard system of accounting established and administered in accordance with generally accepted accounting
principles. 

        2.21 Changes. Since December 31, 2003 there has not been: 

        (a)   any
change in the assets, liabilities, financial condition or operating results of the Company from that reflected in the Financial Statement, except changes in the
ordinary course of business that have not been, in the aggregate, materially adverse; 

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

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

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

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

        (f)    any
material change in any compensation arrangement or agreement with any employee; 

        (g)   any
sale, assignment or transfer of any patents, trademarks, copyrights, trade secrets or other intangible assets; 

        (h)   any
resignation or termination of employment of any key employee or officer of the Company; and the Company, to the best of its knowledge, does not know of the impending
resignation or termination of employment of any such employee or officer; 

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

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

        (k)   any
loans or guarantees made by the Company to or for the benefit of its employees, officers or directors, or any members of their immediate families, other than travel
advances and other advances made in the ordinary course of its business; 

10

 

        (l)    any
declaration, setting aside or payment or other distribution in respect of any of the Company's capital stock, or any direct or indirect redemption, purchase or other
acquisition of any of such stock by the Company; 

        (m)  to
the best of the Company's knowledge, any other event or condition of any character that might materially and adversely affect the assets, properties, financial
condition, operating results or business of the Company (as such business is presently conducted and as it is proposed to be conducted); or 

        (n)   any
agreement or commitment by the Company to do any of the things described in this Section 2.21. 

        2.22 Registration Rights. Except as required pursuant to the Investors' Rights Agreement, the Company is not presently 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. 

        2.23 Real Property Holding Corporation. The Company is not a real property holding corporation within the meaning of
Section 897(c)(2) of the Internal Revenue Code of 1986 (the "Code"), as amended, and any regulations promulgated thereunder. 

        2.24 Labor Agreements. The Company is not bound by or subject to (and none of its assets or properties is bound by or subject
to) any written or oral, express or implied, contract, commitment or arrangement with any labor union, and no labor union has requested or, to the Company's knowledge, has sought to represent any of
the employees, representatives or agents of the Company. There is no strike or other labor dispute involving the Company pending, or to the Company's knowledge, threatened, that could have a material
adverse effect on its business or properties, nor is the Company aware of any labor organization activity involving its employees. 

        2.25 Insurance. The Company maintains in full force and effect such types and amounts of insurance issued by insurers of
recognized responsibility insuring the Company with respect to its business and properties, in such amounts and against such losses and risks which are usual and customary in the Company's business as
to amount and scope. 

        2.26 Directors and Senior Management. No plan currently maintained by the Company or agreement entered into and currently in
effect with any employee of the Company (each, a "Plan" and, collectively, the "Plans") provides for the
payment of separation, severance, termination or similar benefits to any person. None of the Plans obligates the Company to pay any benefits solely or partially as a result of any transaction
contemplated by this Agreement or as a result of a change in the ownership or effective control of the Company within the meaning of Section 280G of the Code. Neither the execution and delivery
of this Agreement nor the consummation of the transactions contemplated hereby, either alone or together with a termination of service, will (i) result in any payment (including, without
limitation, severance, golden parachute, forgiveness of indebtedness or otherwise) becoming due under any Plan, whether or not such payment is contingent, (ii) increase any benefits otherwise
payable under any Plan or other arrangement, or (iii) result in the acceleration of the time of payment, vesting or funding of any benefits including, but not limited to, the acceleration of
the vesting and exercisability of any Company Option, whether or not contingent. 

        2.27 Officer and Key Employee Incentive Plan. The Board has approved the Officer and Key Employee Incentive Plan
substantially in the form attached hereto as Exhibit F. 

        3.     Representations and Warranties of the Investor. The Investor hereby represents and warrants that: 

        3.1   Authorization. The Investor has full power and authority to enter into the Transaction Documents, and each such Agreement
constitutes its valid and legally binding obligation, 

11

 

enforceable
in accordance with its terms except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of
creditors' rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies, and (iii) to the extent the
indemnification provisions contained in the Investors' Rights Agreement may be limited by applicable federal or state securities laws. 

        3.2   Purchase Entirely for Own Account. This Agreement is made with the Investor in reliance upon the Investor's
representation to the Company, which by the Investor's execution of this Agreement the Investor hereby confirms, that the Class A Common Stock to be received by the Investor (the "Securities")
will be acquired for investment for the Investor's own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and that the Investor has no present
intention of selling, granting any participation in, or otherwise distributing the same in violation of applicable securities laws. By executing this Agreement, the Investor further represents that
the Investor does not have any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participations to such person or to any third person, with respect to any of
the Securities. 

        3.3   Disclosure of Information. The Investor further represents that it has had an opportunity to ask questions and receive
answers from the Company regarding the terms and conditions of the offering of the Class A Common Stock and the business, properties, prospects and financial condition of the Company. The
foregoing, however, does not limit or modify the representations and warranties of the Company in Section 2 of this Agreement or the right of the Investor to rely thereon. 

        3.4   Investment Experience. The Investor is an investor in securities of companies in the development stage and acknowledges
that it is able to fend for itself, can bear the economic risk of its investment, and has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and
risks of the investment in the Class A Common Stock. The Investor also represents that it has not been organized for the purpose of acquiring the Class A Common Stock. 

        3.5   Accredited Investor. The Investor is an "accredited investor" within the meaning of Rule 501 of
Regulation D adopted pursuant to the Act, as presently in effect. 

        3.6   Restricted Securities. The Investor understands that the Securities it is purchasing are characterized as "restricted
securities" under the federal securities laws inasmuch as they are being acquired from the Company in a transaction not involving a public offering and that under such laws and applicable regulations
such securities may be resold without registration under the Act, only in certain limited circumstances. In this connection, the Investor represents that it is familiar with Rule 144 adopted
pursuant to the Act, as presently in effect, and understands the resale limitations imposed thereby and by the Act. 

        4.     Conditions of Investor's Obligations at Closing. The obligations of the Investor under subsection 1.1(c) of this Agreement
are subject to the fulfillment on or before the Closing of each of the following conditions, the waiver of which shall not be effective against the Investor if it does not consent thereto: 

        4.1   Performance. The Company shall have performed and complied with all agreements, obligations and conditions contained in
this Agreement that are required to be performed or complied with by it on or before the Closing. 

        4.2   Compliance Certificate. The Chief Executive Officer of the Company shall deliver to the Investor at the Closing a
certificate stating that the conditions specified in Sections 4.1 have been fulfilled. 

12

 

        4.3   Qualifications. All authorizations, approvals, or permits, if any, of any governmental authority or regulatory body of
the United States or of any state that are required in connection with the lawful issuance and sale of the Securities pursuant to this Agreement shall be duly obtained and effective as of the Closing. 

        4.4   Proceedings and Documents. All corporate and other proceedings in connection with the transactions contemplated at the
Closing and all documents incident thereto shall be reasonably satisfactory in form and substance to the Investor, and they shall have received all such counterpart original and certified or other
copies of such documents as they may reasonably request. 

        4.5   Opinion of Company Counsel. The Investor shall have received from Gunderson Dettmer Stough Villeneuve Franklin &
Hachigian, LLP, counsel for the Company, an opinion, dated as of the Closing, in the form attached hereto as Exhibit D. 

        4.6   Investors' Rights Agreement. The Company, the Investor and the requisite holders of Company capital stock necessary to
amend and restate the "Prior Agreement" (as such term is defined in the Investors' Rights Agreement) shall have entered into the Investors' Rights Agreement. 

        4.7   Approval and Filing of the Restated Certificate. The requisite holders of Company capital stock shall have approved the
Restated Certificate and the Restated Certificate shall have been filed with the Secretary of State of Delaware, and shall not have been amended or modified since the date of filing. 

        4.8   Conversion of Existing Preferred Stock. All shares of the Company's Series A Preferred Stock, Series B
Preferred Stock, Series C Preferred Stock, Series D Preferred Stock, Series D-1 Preferred Stock and Series E Preferred Stock shall have been converted into
shares of Common Stock. 

        4.9   Governance Agreement. The Company and the Investor shall have entered into the Governance Agreement. 

        4.10 Strategic Alliance Agreement. The Strategic Alliance Agreement shall have become Effective (as such term is defined in
the Strategic Alliance Agreement) as of the Closing. 

        4.11 HSR Act. The waiting period applicable to the consummation of the transactions contemplated hereby under the HSR Act
shall have expired or been terminated and no action by the Department of Justice or Federal Trade Commission challenging or seeking to enjoin the consummation of such transactions shall have been
instituted and be pending. 

        4.12 Executive Lock-Up Agreements. Each of P. Roy Vagelos, Rick E Winningham, Marty Glick and Patrick Humphrey
shall have entered into an Executive Lock-Up Agreement, each substantially in the form attached hereto as Exhibit E. 

        4.13 Conduct of the Company Business. The Company shall not willfully have taken any affirmative action or willfully omitted
to have taken any affirmative action that would cause any of the representations and warranties contained in Section 2 hereof, applied as of the Closing Date, to be breached. 

        5.     Conditions of the Company's Obligations at Closing. The obligations of the Company to the Investor under this Agreement
are subject to the fulfillment on or before the Closing of each of the following conditions by the Investor: 

        5.1   Representations and Warranties. The representations and warranties of the Investor contained in Section 3 shall
have been true on and as of the date of this Agreement and, in all material respects, as of the Closing. 

13

 

        5.2   Qualifications. All authorizations, approvals, or permits, if any, of any governmental authority or regulatory body of
the United States or of any state that are required in connection with the lawful issuance and sale of the Securities pursuant to this Agreement shall be duly obtained and effective as of the Closing. 

        5.3   Investors' Rights Agreement. The Company, the Investor and the requisite holders of Company capital stock necessary to
amend and restate the "Prior Agreement" (as such term is defined in the Investors' Rights Agreement) shall have entered into the Investors' Rights Agreement. 

        5.4   Restated Certificate. The Company shall have obtained the requisite stockholder consent to file the Restated Certificate. 

        5.5   Governance Agreement. The Company and the Investor shall have entered into the Governance Agreement. 

        5.6   Strategic Alliance Agreement. The Strategic Alliance Agreement shall have become Effective (as such term is defined in
the Strategic Alliance Agreement) as of the Closing. 

        5.7   HSR Act. The waiting period applicable to the consummation of the transactions contemplated hereby under the HSR Act
shall have expired or been terminated and no action by the Department of Justice or Federal Trade Commission challenging or seeking to enjoin the consummation of such transactions shall have been
instituted and be pending. 

        5.8   Delivery of Common Stock. GGL shall have delivered to the Company the certificates representing the shares of Common
Stock held by GGL in connection with the exchange, as described in Section 1.3. 

        6.     Miscellaneous. 

        6.1   Survival of Warranties. The warranties, representations and covenants of the Company and the Investor contained in or
made pursuant to this Agreement shall survive the execution and delivery of this Agreement and the Closing and shall in no way be affected by any investigation of the subject matter thereof made by or
on behalf of the Investor or the Company. 

        6.2   Successors and Assigns. Except as otherwise provided herein, the terms and conditions of this Agreement shall inure to
the benefit of and be binding upon the respective successors and assigns of the parties (including transferees of any Securities). 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. 

        6.3   Governing Law. This Agreement shall be governed by and construed in accordance with and governed by the law of the State
of Delaware, without regard to the conflicts of laws principles thereof. Any action brought, arising out of, or relating to this Agreement shall be brought in the Court of Chancery of the State of
Delaware. Each party hereby irrevocably submits to the exclusive jurisdiction of said Court in respect of any claim relating to the validity, interpretation and enforcement of this Agreement, and
hereby waives, and agrees not to assert, as a defense in any action, suit or proceeding in which any such claim is made that it is not subject thereto or that such action suit or proceeding may not be
brought or is not maintainable in such courts, or that the venue thereof may not be appropriate or that this agreement may not be enforced in or by such courts. The parties hereby consent to and grant
the Court of Chancery of the State of Delaware jurisdiction over such parties and over the subject matter of any such claim and agree that mailing of process or other papers in connection with any
such action, suit or proceeding in the manner provided in Section 6.1, or in such other manner as may be permitted by law, shall be valid and sufficient thereof. 

14

 

        6.4   Counterparts. 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. 

        6.5   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. 

        6.6   Notices. All notices required or permitted hereunder shall be in writing and shall be deemed effectively given:
(a) upon personal delivery to the party to be notified, (b) when sent by confirmed electronic mail or facsimile if sent during normal business hours of the recipient, if not, then on the
next business day or (c) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. Notwithstanding the
foregoing or any provision to the contrary in the Investors' Rights Agreement or the Restated Certificate, the Company
agrees that when any notice is given to the Investor, whether under this Agreement, the Investors' Rights Agreement or the Restated Certificate, such notice shall not be deemed to be effectively given
until a copy of such notice is transmitted to the Investor via facsimile. All notices and certificates will be addressed to the Investor at the address set forth on the signature page hereto or at
such other address as the Company or the Investor may designate by ten (10) days advance written notice to the other parties hereto. 

        6.7   Finder's Fee. The Investor agrees to indemnify and to hold harmless the Company from any liability for any commission or
compensation in the nature of a finders' fee (and the costs and expenses of defending against such liability or asserted liability) for which the Investor or any of its officers, partners, employees,
or representatives is responsible. 

        The
Company agrees to indemnify and hold harmless the Investor from any liability for any commission or compensation in the nature of a finders' fee (and the costs and expenses of
defending against such liability or asserted liability) for which the Company or any of its officers, employees or representatives is responsible. 

        6.8   Expenses. Irrespective of whether the Closing is effected, each party shall bear their own costs and expenses incurred
with respect to the negotiation, execution, delivery and performance of this Agreement. If any action at law or in equity is necessary to enforce or interpret the terms of this Agreement, the
Investors' Rights Agreement or the Restated Certificate, the prevailing party shall be entitled to reasonable attorney's fees, costs and necessary disbursements in addition to any other relief to
which such party may be entitled. 

        6.9   Amendments and Waivers. Any term of this Agreement may be amended and the observance of any term of this Agreement may be
waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and the Investor. Any amendment or waiver effected in
accordance with this paragraph shall be binding upon each holder of any securities purchased under this Agreement at the time outstanding, each future holder of all such securities, and the Company. 

        6.10 Termination. This Agreement may be terminated and the transactions contemplated by this Agreement may be abandoned at
any time prior to the Closing, notwithstanding any requisite approval and adoption of this Agreement and the transactions contemplated by this Agreement, as follows: 

        (a)   by
mutual written consent of the Company and the Investor; or 

        (b)   by
either the Company or the Investor, if the Closing shall not have occurred on or before October 1, 2004;  provided, however, that the right to
terminate this Agreement under this Section 6.10
(b) shall not be available to any party whose failure to fulfill any obligation 

15

 

under
this Agreement has been the cause of, or resulted in, the failure of the Closing to occur. 

        6.11 Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable law, such
provision shall be excluded from this Agreement and the balance of the Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms. 

        6.12 Confidentiality. Any confidential information obtained by the Investor pursuant to this Agreement which is labeled or
otherwise identified as confidential or proprietary shall be treated as confidential and shall not be disclosed to a third party without the prior written consent of the Company and shall not be used
by the Investor for any purpose other than monitoring the Investor's investment in the Company, except that the Investor may disclose such information (i) to its attorneys, accountants,
consultants, and other professionals to the extent necessary to obtain their services in connection with monitoring its investment in the Company, (ii) to its affiliates, officers, directors,
shareholders, members and/or partners in the ordinary course of business or pursuant to disclosure obligation to affiliates, shareholders, members and/or partners; provided that such information is
provided to such persons and entities with notice that such information is confidential and should be treated as such, (iii) to any prospective purchaser of the Investor's shares of the
Company, provided (in the case of disclosure in clause (iii)) the recipient agrees to keep such information confidential and to use such information solely for evaluation of such proposed
purchase, or (iv) as may otherwise be required by law. Notwithstanding the foregoing, such information shall not be deemed confidential for the purpose of enforcement of this Agreement and said
information shall not be deemed confidential after it becomes publicly known through no fault of the recipient. The provisions of this Section 6.12 shall be in addition to, and not in
substitution for, the provisions of any separate confidentiality agreement executed by the parties hereto; provided that if there is any conflict between the provisions of this Section 6.12 and
the more restrictive provisions of such separate confidentiality agreement, the provisions of such separate confidentiality agreement shall prevail. 

        6.13 Publicity. No party or any affiliate of a party shall make, or cause to be made, any publicity, news release or other
such general public announcement or make any other disclosure to any third party in respect of this Agreement or the transactions contemplated hereby (including, without limitation, disclosure of
Investor's ownership interest in the Company) without the prior written consent of the other party; provided however, that the foregoing provision is
not intended to limit communications deemed reasonably necessary or appropriate by a party or its affiliates to its employees, stockholders, partners, directors, officers, potential investors,
accountants and legal counsel who are under an obligation to preserve the confidentiality of the foregoing. Notwithstanding the foregoing provision, the parties and their respective affiliates shall
not be prohibited from making any disclosure or release that is required by law, court order, or applicable regulation, or is considered necessary by legal counsel to fulfill an obligation under
securities laws or the rules of a national stock exchange. 

        6.14 Entire Agreement. This Agreement and the documents referred to herein constitute the entire agreement among the parties
and no party shall be liable or bound to any other party in any manner by any warranties, representations, or covenants except as specifically set forth herein or therein. 

        6.15 Legends. It is understood that the certificates evidencing the Securities may bear one or all of the following legends: 

        (a)   "These
securities have not been registered under the Securities Act of 1933, as amended. They may not be sold, offered for sale, pledged or hypothecated in the absence
of a registration statement in effect with respect to the securities under such Act or an opinion of 

16

 

counsel
satisfactory to the Company that such registration is not required or unless sold pursuant to Rule 144 of such Act." 

        (b)   Any
legend required by the laws of any state. 

        6.16 Conduct of Business of the Company. During the period from the date of this Agreement and continuing until the earlier
of the termination of this Agreement or the Closing, the Company agrees (except to the extent that GSK shall otherwise consent in writing) to carry on its business in the usual, regular and ordinary
course in substantially the same manner as currently conducted, and, to the extent consistent with such business, to use all commercially reasonable efforts consistent with past practice and policies
to preserve intact its present business organization and keep available the services of its present officers and key employees. Solely for the purposes of any post-Closing remedy for
breaches of representations, warranties or covenants by the Company, the Company shall not take any affirmative action or omit to take any affirmative action that results in the breach of any of the
representations and warranties contained in Section 2 hereof, applied as of the Closing Date. 

17

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

	 	 	THERAVANCE, INC.
	 	 	 	 
	

 	
 	
By:	

 
	 	 	 	/s/  RICK E WINNINGHAM      
 Rick E Winningham

President and Chief Executive Officer

	 	 	INVESTOR:
	 	 	 	 
	 	 	SMITHKLINE BEECHAM CORPORATION
 Name of Investor
	

 	
 	

By:	

/s/  JEAN-PIERRE GARNIER      
 Signature of Authorized Person
	 	 	Name:	Jean-Pierre Garnier
	 	 	Title:	Chief Executive Officer

	 	 	 	 
	 	 	Address:	GlaxoSmithKline

	 	 	One Franklin Plaza (FP2355)

	 	 	Philadelphia, PA 19102

	 	 	Fax No:	215-751-5349

	

	 	 	 
	

	 	 	 
	

	 	 	 
	

	 	 	 
	CLASS A COMMON STOCK PURCHASE AGREEMENT

SIGNATURE PAGE

QuickLinks

Exhibit 10.12

CLASS A COMMON STOCK PURCHASE AGREEMENT March 30, 2004

TABLE OF CONTENTS

THERAVANCE, INC. CLASS A COMMON STOCK PURCHASE AGREEMENT

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00067-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00067-of-00352.parquet"}]]