Document:

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                                                                   EXHIBIT 10.19

                           LOAN MODIFICATION AGREEMENT

     This Loan Modification Agreement is entered into as of January 9, 2001 by
and between Packeteer, Inc. ("Borrower") and Silicon Valley Bank ("Bank").

1.   DESCRIPTION OF EXISTING INDEBTEDNESS: Among other indebtedness which may be
owing by Borrower to Bank, Borrower is indebted to Bank pursuant to, among other
documents, a Loan and Security Agreement, dated January 19, 1999, as may be
amended from time to time, (the "Domestic Loan Agreement") and an Export-Import
Bank Loan and Security Agreement, dated January 19, 1999, as may be amended from
time to time, (the "Exim Loan Agreement"). The Domestic Loan Agreement provided
for, among other things, a Committed Revolving Line in the original principal
amount of One Million Five Hundred Thousand Dollars ($1,500,000) and the Exim
Loan Agreement provided for, among other things, an Exim Committed Line in the
original principal amount of One Million Five Hundred Thousand Dollars
($1,500,000). In connection with the Exim Loan Agreement, Borrower will execute
concurrently herewith, a Borrower Agreement. Defined terms used but not
otherwise defined herein shall have the same meanings as in the Loan Agreements.

Hereinafter, all indebtedness owing by Borrower to Bank shall be referred to as
the "Indebtedness."

2.   DESCRIPTION OF COLLATERAL AND GUARANTIES. Repayment of the Indebtedness is
secured by the Collateral as described in the Loan Agreement and an Intellectual
Property Security Agreement dated January 19, 1999. Additionally, repayment of
the Exim Committed Line is guaranteed by the Export Import Bank of the United
States ("EXIM").

Hereinafter, the above-described security documents and guaranties, together
with all other documents securing repayment of the Indebtedness shall be
referred to as the "Security Documents". Hereinafter, the Security Documents,
together with all other documents evidencing or securing the Indebtedness shall
be referred to as the "Existing Loan Documents".

3.   DESCRIPTION OF CHANGE IN TERMS.

     A.   Modification(s) to Domestic Loan Agreement.

          1.   Subsection (a) under Section 2.1.1 entitled "Revolving Advances"
               is hereby amended to read as follows:

               (a)  Bank will make Advances not exceeding (i) the lesser of (A)
                    the Committed Revolving Line minus the Cash Management
                    Services Sublimit or (B) the Borrowing Base, minus (ii) the
                    amount of all outstanding Letters of Credit (including drawn
                    but unreimbursed Letters of Credit). Amounts borrowed under
                    this Section may be repaid and reborrowed during the term of
                    this Agreement.

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          2.   Section 2.1.3 entitled "Letters of Credit Sublimit" is hereby
               incorporated to read as follows:

               Bank will issue or have issued Letters of Credit for Borrower's
               account not exceeding (i) the lesser of the Committed Revolving
               Line or the Borrowing Base minus (ii) the outstanding principal
               balance of the Advances, minus the Cash Management Services
               Sublimit, but the face amount of outstanding Letters of Credit
               (including drawn but unreimbursed Letters of Credit) may not
               exceed $2,500,000. Each Letter of Credit will expire no later
               than 180 days after the Revolving Maturity Date provided
               Borrower's Letter of Credit reimbursement obligation is secured
               by cash on terms acceptable to Bank at any time after the
               Revolving Maturity Date if the term of this Agreement is not
               extended by Bank.

          3.   Section 2.2 entitled "Overadvances" if Borrower's Obligation
               under Section 2.1.1 and 2.1.3 exceed the lesser of either (i) the
               Committed Revolving Line minus the Cash Management Services
               Sublimit or (ii) the Borrowing Base, Borrower must immediately
               pay Bank the excess.

          4.   Subsection (ii) under Section 6.7 entitled "Financial Covenants"
               is hereby amended to read:

               (ii) PRO-FORMA PROFITABILITY. Borrower will have a minimum
                    pro-forma profit of $500,000 for each quarter. For
                    calculation purposes, Pro-forma is defined as net income
                    excluding acquisition related and stock based compensation
                    charges.

          3.   The following terms under Section 13.1 entitled "Definitions" are
               hereby amended to read as follows:

               "COMMITTED REVOLVING LINE" is an Advance of up to $5,000,000.

               "LETTER OF CREDIT SUBLIMIT" is defined in Section 2.1.3

               "REVOLVING MATURITY DATE" is January 10, 2002.

     B.   Modification(s) to Exim Loan Agreement.

          1.   Sub-letter (a) of Section 2.1.1 entitled "Revolving Advances" is
               hereby amended in part to provide that Borrowing Base shall now
               mean an amount equal to ninety percent (90%) of Exim Eligible
               Foreign Accounts.

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          2.   Subsection (ii) Section 6.10 entitled "Financial Covenants" is
               hereby amended to read:

               (ii) PROFITABILITY. Borrower will have a minimum net profit of
                    $500,000 for each quarter. PRO-FORMA PROFITABILITY. Borrower
                    will have a minimum pro-forma profit of $500,000 for each
                    quarter. For calculation purposes, Pro-forma is defined as
                    net income excluding acquisition related and stock based
                    compensation charges.

          3.   The following terms under Section 13.1 entitled "Definitions" are
               hereby amended to read as follows:

               "EXIM COMMITTED LINE" is an Advance of up to $5,000,000.

               "EXIM MATURITY DATE" is January 10, 2002.

4.   CONSISTENT CHANGES. The Existing Loan Documents are hereby amended wherever
necessary to reflect the changes described above.

5.   PAYMENT OF FEES. Borrower shall pay to Bank a fee in the amount of Twelve
Thousand Five Hundred Dollars ($12,500) for the Committed Revolving Line (the
"Domestic Loan Fee") plus a fee in the amount of Twenty Eight Thousand Dollars
($28,000) for the Exim Committed Line (the "Exim Loan Fee") plus all
out-of-pocket expenses. Additionally, Borrower shall pay any Exim Bank Expenses
incurred in connection with the Exim Guarantee. Notwithstanding the foregoing,
any attorney fees or expenses incurred in connection with this Agreement shall
be capped at $5,000 for each credit facility.

6.   NO DEFENSES OF BORROWER. Borrower (and each guarantor and pledgor signing
below) agrees that, as of the date hereof, it has no defenses against the
obligations to pay any amounts under the Indebtedness.

7.   CONTINUING VALIDITY. Borrower (and each guarantor and pledgor signing
below) understands and agrees that in modifying the existing Indebtedness, Bank
is relying upon Borrower's representations, warranties, and agreements, as set
forth in the Existing Loan Documents. Except as expressly modified pursuant to
this Loan Modification Agreement, the terms of the Existing Loan Documents
remain unchanged and in full force and effect. Bank's agreement to modifications
to the existing Indebtedness pursuant to this Loan Modification Agreement in no
way shall obligate Bank to make any future modifications to the Indebtedness.
Nothing in this Loan Modification Agreement shall constitute a satisfaction of
the Indebtedness. It is the intention of Bank and Borrower to retain as liable
parties all makers and endorsers of Existing Loan Documents, unless the party is
expressly released by Bank in writing. No maker, endorser, or guarantor will be
released by virtue of this Loan Modification Agreement. The terms of this
paragraph apply

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not only to this Loan Modification Agreement, but also to all subsequent loan
modification agreements.

8.   CONDITIONS. The effectiveness of this Loan Modification Agreement is
conditioned upon:

     1)   Borrower's payment of the Domestic Loan Fee, the Exim Loan Fee and any
          Exim fees incurred in connection with this Agreement; and

     2)   Bank's receipt of a fully executed Borrower Agreement together with
          all Annex's and/or attachments thereto.

     This Loan Modification Agreement is executed as of the date first written
above.

BORROWER:                               BANK:

PACKETEER, INC.                         SILICON VALLEY BANK

By:                                     By:
   -----------------------------------     -------------------------------------
Name:                                   Name:
     ---------------------------------       -----------------------------------
Title:                                  Title:
      --------------------------------        ----------------------------------

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                                                                   EXHIBIT 10.77

                                  COMMON STOCK
                               PURCHASE AGREEMENT

        THIS AGREEMENT ("Agreement") is made as of October 16, 2000 (the
"Effective Date"), by and between Epimmune Inc., a Delaware corporation with its
principal place of business at 5820 Nancy Ridge Drive, Suite 100, San Diego,
California 92121 (the "Company"), and the purchaser whose name and address is
set forth on the signature page hereof (the "Purchaser").

                                    AGREEMENT

        In consideration of the mutual covenants contained in this Agreement,
and for other good and valuable consideration, the receipt of which is hereby
acknowledged, the Company and the Purchaser hereby agree as follows:

        1. AUTHORIZATION OF SALE OF THE SECURITIES. Subject to the terms and
conditions of this Agreement, the Company has authorized the sale and issuance
of (i) up to the Initial Amount (as defined below) of shares of the Company's
Common Stock, par value $0.01 (the "Common Stock"), at the Initial Closing and
(ii) up to an additional number of shares of its Common Stock equal to the
Initial Amount at the Milestone Closing (as defined below). The shares of Common
Stock sold to the Purchaser hereunder shall be referred to herein as the
"Shares."

        2. AGREEMENT TO SELL AND PURCHASE THE SHARES.

2.1   SALE OF SHARES.

(a)     At the Initial Closing, the Company will sell to the Purchaser, and the
        Purchaser will purchase from the Company, 500,000 shares of Common Stock
        (the "Initial Amount") at a per share purchase price equal to $4.00 (the
        "Purchase Price"), for a total purchase price of $2,000,000.

(b)     At the Milestone Closing, the Company will sell to Purchaser, and the
        Purchaser will purchase from the Company, an additional 500,000 shares
        of Common Stock, as adjusted for any stock dividends, combinations,
        splits, recapitalizations or similar transactions (the "Milestone
        Shares") at a purchase price equal to the lesser of (i) the closing
        price of the Company's Common Stock as reported on The Nasdaq National
        Market on the trading day immediately preceding the date of the
        Milestone Closing or (ii) two times the Purchase Price (as adjusted for
        any stock dividends, combinations, splits, recapitalizations or similar
        transactions affecting the Common Stock) (the "Milestone Price");
        provided, however, that if the Milestone Closing occurs as a result of
        the Purchaser's exercise of its rights under Section 3.2(b) hereof, the
        Milestone Price shall not be below $6.00 per share. Notwithstanding
        anything herein to the contrary, the Company will not be obligated to
        issue Milestone Shares to the extent that they would be equal to 20% or
        more of the total number of shares of Common Stock outstanding
        immediately prior to such issuance and that, as a result thereof, such
        issuance would require approval of the Company's stockholders under the
        applicable Rules of the Nasdaq National Market or any other national
        securities exchange on which the Company's Common Stock is then traded.
        In such event, Purchaser may elect to purchase up to that number of
        Milestone Shares equal to 19.99% of the total number of shares of Common
        Stock so outstanding at the Milestone Price.

2.2     ACCEPTANCE OF PROPOSED PURCHASE OF SHARES. The Company shall have no
        obligation hereunder with respect to the Purchaser until the Company
        shall execute and deliver to the Purchaser an executed copy of this
        Agreement. If this Agreement is not executed and delivered by the
        Company, this Agreement shall be of no further force and effect

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        3. CLOSING AND DELIVERY.

3.1     INITIAL CLOSING. The closing of the purchase and sale of the Initial
        Amount pursuant to this Agreement (the "Initial Closing") shall be held
        on the Effective Date at the offices of Cooley Godward LLP, 4365
        Executive Drive, Suite 1100, California 92121, or on such other date and
        place as may be agreed to by the Company and the Purchaser. At or prior
        to the Initial Closing, the Purchaser and Company shall execute any
        related agreements or other documents required to be executed hereunder,
        dated as of the date of the Initial Closing (the "Initial Closing
        Date").

3.2 MILESTONE CLOSING.

(a)     The closing of the purchase and sale of the Milestone Shares pursuant to
        this Agreement (the "Milestone Closing") shall be held on the third
        business day immediately following the earlier of the following dates
        and notice from Company to Purchaser of the occurrence thereof (the
        "Milestone Closing Date").

        (i)    the date on or before January 1, 2004 that the Company or one of
               its affiliates or strategic partners (A) has determined in good
               faith, and demonstrated to the reasonable satisfaction of
               Purchaser, that Phase II trials were successfully concluded and
               that Phase III clinical trials in the United States should be
               pursed and (B) has enrolled the first subject in such Phase III
               clinical trials, and demonstrated same to the reasonable
               satisfaction of Purchaser, with respect to both DNA and
               polypeptide HIV vaccines; or

        (ii)   at the Company's election, the date upon which both of the
               following conditions have simultaneously occurred: (A) the 30 day
               average of the closing price of the Company's Common Stock on The
               Nasdaq National Market (or other comparable stock exchange or
               over the counter market on which the Company's Common Stock is
               then traded) has equaled or exceeded, and continues to equal or
               exceed, a price equal to four times the Purchase Price (as
               adjusted for any stock dividends, combinations, splits,
               recapitalizations or similar transactions affecting the Common
               Stock) and (B) a registration statement filed by the Company
               under the Securities Act of 1933, as amended (the "Securities
               Act"), with respect to the issuance of the Milestone Shares has
               become, and continues to be, effective. The Milestone Closing
               shall be held on the Milestone Closing Date at the offices of the
               Company's legal counsel.

(b)     Notwithstanding anything herein to the contrary:

        (i)    Purchaser may postpone from time-to-time any condition precedent
               to the Milestone Closing; and/or

        (ii)   Purchaser may waive any condition precedent(s) to the Milestone
               Closing, in which event the Milestone Closing Date shall be
               accelerated to the third business day following notice of such
               waiver thereof from Purchaser to Company.

(c)     An event described in Sections 3.2(a) and 3.2(b) above may be referred
        to hereinafter as an "Acceleration Event."

3.3     ADDITIONAL CLOSINGS. In the event that Pharmacia exercises its right of
        first refusal in connection with the transactions contemplated by this
        Agreement, the Company proposes to enter the same form of purchase
        agreement as this Agreement with such partner (an "Additional
        Agreement") to sell shares of Common Stock to such partner at a purchase
        price equal to the Purchase Price, but in no event less than, the
        closing price of the Company's Common Stock as reported on The Nasdaq
        National Market on the trading day immediately preceding the effective
        date of the Additional Agreement at an additional closing to be held no
        later than 30 days after the Effective Date.

3.4 DELIVERY OF THE SHARES AT THE CLOSINGS.

(a)     At the Initial Closing, the Company shall deliver to the Purchaser stock
        certificates registered in the name of the Purchaser, and/or in such
        nominee name(s) as designated in writing by the Purchaser, representing
        the Initial Amount against payment of the purchase price for such
        Initial Amount.

(b)     At the Milestone Closing, the Company shall deliver to the Purchaser
        stock certificates registered in the name of the Purchaser, and/or in
        such nominee name(s) as designated by the Purchaser in writing,
        representing the

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        Milestone Shares against payment of the purchase price for such
        Milestone Shares; provided, however, that the Company shall not be
        obligated to issue to the Purchaser any of the Milestone Shares, or may
        postpone the date of the Milestone Closing, if any Restricted
        Transaction (as defined in Section 11.1 below) occurs during the 30-day
        period immediately prior to the date of Milestone Closing.

        4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY.

Except as set forth on the Schedule of Exceptions attached hereto as Exhibit A,
the Company hereby represents and warrants as of the date hereof to, and
covenants with, the Purchaser as follows:

4.1     ORGANIZATION AND GOOD STANDING. The Company has been duly incorporated
        and is validly existing as a corporation in good standing under the laws
        of the State of Delaware, has full corporate power and authority to own
        or lease its properties and conduct its business as presently conducted
        (as defined below), and is duly qualified as a foreign corporation and
        in good standing in all jurisdictions in which the character of the
        property owned or leased or the nature of the business transacted by it
        makes qualification necessary (except where the failure to be so
        qualified would not have a material adverse effect on the business,
        properties, financial condition or results or operations of the
        Company).

4.2     CORPORATE POWER; AUTHORIZATION. The Company has all requisite corporate
        power, and has taken all requisite corporate action, to execute and
        deliver this Agreement, sell and issue the Shares and carry out and
        perform all of its obligations under this Agreement. This Agreement
        constitutes the legal, valid and binding obligation of the Company,
        enforceable in accordance with its terms, except (i) as limited by
        applicable bankruptcy, insolvency, reorganization, moratorium or similar
        laws relating to or affecting the enforcement of creditors' rights
        generally, (ii) as limited by equitable principles generally, including
        any specific performance, and (iii) as to those provisions of Section 0
        relating to indemnity or contribution. The execution and delivery of
        this Agreement does not, and the performance of this Agreement and the
        compliance with the provisions hereof and the issuance, sale and
        delivery of the Shares by the Company will not, conflict with, or result
        in a breach or violation of the terms, conditions or provisions of, or
        constitute a default under, or result in the creation or imposition of
        any lien pursuant to the terms of, the Certificate of Incorporation or
        Bylaws of the Company or any statute, law, rule or regulation applicable
        to the Company or any state or federal order, judgment or decree
        applicable to the Company or any indenture, mortgage, lease or other
        material agreement or instrument to which the Company or any of its
        properties is subject, where such conflict, breach or violation would
        have a material adverse effect on the Company.

4.3     ISSUANCE AND DELIVERY OF THE SHARES. The Shares, when issued and paid
        for in compliance with the provisions of this Agreement, will be validly
        issued, fully paid and nonassessable and will not be issued in violation
        of any preemptive right.

4.4     SEC DOCUMENTS; FINANCIAL STATEMENTS. The Company has filed in a timely
        manner all documents that the Company was required to file with the
        United States Securities and Exchange Commission (the "SEC") under
        Sections 13, 14(a) and 15(d) of the Securities Exchange Act of 1934, as
        amended (the "Exchange Act"), during the twelve (12) months preceding
        the date of this Agreement. As of their respective filing dates (or, if
        amended, when amended), all documents filed by the Company with the SEC
        (the "SEC Documents") complied in all material respects with the
        requirements of the Exchange Act. None of the SEC Documents as of their
        respective dates contained any untrue statement of material fact or
        omitted to state a material fact required (under the federal securities
        laws in connection with the sale of the Shares) to be stated therein or
        necessary to make the statements made therein, in light of the
        circumstances under which they were made, not misleading. The financial
        statements of the Company included in the SEC Documents (the "Financial
        Statements") comply as to form in all material respects with applicable
        accounting requirements and with the published rules and regulations of
        the SEC with respect thereto. The Financial Statements have been
        prepared in accordance with generally accepted accounting principles
        consistently applied and fairly present the financial position of the
        Company at the dates thereof and the results of its operations and cash
        flows for the periods then ended (subject, in the case of unaudited
        statements, to normal, recurring adjustments).

4.5     INTELLECTUAL PROPERTY. The Company owns or possesses adequate rights to
        use all material patents, patent rights, inventions, trade secrets and
        know-how that are necessary for the conduct of its business as presently

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        conducted and as described in the SEC Documents. Except as set forth in
        the SEC Documents, the Company has not received any written notice of,
        nor has any knowledge of, any infringement of or conflict with asserted
        rights of others with respect to any patent, patent right, invention,
        trade secret or know-how that, individually or in the aggregate, if the
        subject of an unfavorable decision, ruling or finding, would have a
        material adverse effect on the business, properties, financial condition
        or results or operations of the Company.

4.6     CAPITALIZATION. The capitalization of the Company is described in the
        Company's SEC Documents. The Company has not issued any capital stock
        since June 30, 2000 other than pursuant to employee benefit plans
        disclosed in the Company's SEC Documents. The outstanding shares of
        capital stock of the Company have been duly and validly issued and are
        fully paid and nonassessable, have been issued in compliance with all
        federal and state securities laws, and were not issued in violation of
        any preemptive rights or similar rights to subscribe for or purchase
        securities. Except as set forth in or contemplated by the Company's SEC
        Documents or as otherwise described in this Agreement, there are no
        outstanding rights (including, without limitation, preemptive rights),
        warrants or options to acquire, or instruments convertible into or
        exchangeable for, any unissued shares of capital stock or other equity
        interest in the Company, or any contract, commitment, agreement,
        understanding or arrangement of any kind to which the Company is a party
        and relating to the issuance or sale of any capital stock of the
        Company, any such convertible or exchangeable securities or any such
        rights, warrants or options.

4.7     LITIGATION. There is no pending or, to the Company's knowledge,
        threatened, action, suit or other proceeding to which the Company is a
        party or to which its property or assets are subject that is not
        disclosed in the SEC Documents that is required to be so disclosed.

4.8     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 for compliance with
        the securities and blue sky laws in the states and other jurisdictions
        in which shares of Common Stock are offered and/or sold, which
        compliance will be effected in accordance with such laws.

4.9     NO MATERIAL ADVERSE CHANGE. Except as otherwise disclosed herein, since
        June 30, 2000, there have not been any changes in the assets,
        liabilities, financial condition or operations of the Company from that
        reflected in the Company's Form 10-Q for the period ended June 30, 2000
        except changes in the ordinary course of business or which have not
        been, either individually or in the aggregate, materially adverse.

4.10    SECURITIES VIOLATIONS. The Company represents and warrants that none of
        its directors or officers is or has within the last five years, been the
        subject of, or a defendant in: (i) an enforcement action or prosecution
        (or settlement in lieu thereof) brought by a governmental authority
        relating to a violation of securities, tax, fiduciary or criminal laws,
        or (ii) a civil action (or settlement in lieu thereof) brought by
        shareholders or investors in a common investment vehicle for violation
        of duties owed to the shareholders or investors.

4.11    NASDAQ. The Company's Common Stock is listed on The Nasdaq National
        Market and the Company shall use its commercially reasonable efforts to
        maintain such listing.

4.12    NO CONFLICTS OF INTEREST REPRESENTATION. The Company represents,
        warrants and covenants that, to the best of its knowledge, no officer or
        employee of the Purchaser has or will receive, directly or indirectly, a
        personal interest in the Company or its property or anything of
        substantial economic value for his or her private benefit from the
        Company, or anyone acting on its behalf, in connection with the
        investment made by the Purchaser pursuant to this Agreement.

4.13    OPINIONS OF COMPANY'S COUNSEL. Company shall cause its legal counsel to
        deliver to Purchaser concurrently with the Initial Closing, a legal
        opinion in form and substance acceptable to Purchaser.

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        5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASER.

5.1     The Purchaser represents and warrants to and covenants with the Company
        that:

(a)     The Purchaser, taking into account the personnel and resources it can
        practically bring to bear on the purchase of the Shares contemplated
        hereby, either alone or together with the advice of the Purchaser's
        representative, is knowledgeable, sophisticated and experienced in
        making, and is qualified to make, decisions with respect to investments
        in shares presenting an investment decision like that involved in the
        purchase of the Shares, including investments in securities issued by
        the Company, and has requested, received, reviewed and considered,
        either alone or with the Purchaser's representative, all information the
        Purchaser deems relevant (including the SEC Documents) in making an
        informed decision to purchase the Shares.

(b)     The Purchaser is acquiring the Shares being acquired by the Purchaser
        pursuant to this Agreement in the ordinary course of its business and
        for its own account for investment only and with no present intention of
        distributing any of such Shares or any arrangement or understanding with
        any other persons regarding the distribution of such Shares, except in
        compliance with Section 5.1(c).

(c)     The Purchaser will not, directly or indirectly, offer, sell, pledge,
        transfer or otherwise dispose of (or solicit any offers to buy, purchase
        or otherwise acquire or take a pledge of) any of the securities
        purchased hereunder except in compliance with the Securities Act,
        applicable blue sky laws, and the rules and regulations promulgated
        thereunder.

(d)     The Purchaser has, in connection with its decision to purchase the
        Securities, relied with respect to the Company and its affairs solely
        upon the SEC Documents and the other information delivered to the
        Purchaser by the Company as described in Sections 4.4 and 5.1(a) above
        and the representations, warranties and covenants of the Company
        contained herein.

(e)     The Purchaser is an "accredited investor" within the meaning of Rule 501
        of Regulation D promulgated under the Securities Act or a Qualified
        Institutional Buyer within the meaning of Rule 144A promulgated under
        the Securities Act.

(f)     The Purchaser has full right, power, authority and capacity to enter
        into this Agreement and to consummate the transactions contemplated
        hereby and has taken all necessary action to authorize the execution,
        delivery and performance of this Agreement. Upon the execution and
        delivery of this Agreement by the Purchaser, this Agreement shall
        constitute a valid and binding obligation of the Purchaser, enforceable
        in accordance with its terms, except (i) as limited by applicable
        bankruptcy, insolvency, reorganization, moratorium or similar laws
        relating to or affecting the enforcement of creditors' rights generally,
        (ii) as limited by equitable principles generally, including any
        specific performance, and (iii) as to those provisions of Section 0
        relating to indemnity or contribution.

5.2     The Purchaser represents and warrants to and covenants with the Company
        that it has not engaged and will not engage in any short sales of the
        Company's Common Stock for so long as such Purchaser holds such Shares.

5.3     The Purchaser understands that nothing in the SEC Documents, this
        Agreement or any other materials presented to the Purchaser in
        connection with the purchase and sale of the Shares constitutes legal,
        tax or investment advice and that independent legal counsel has reviewed
        these documents and materials on the Purchaser's behalf. The Purchaser
        has consulted such legal, tax and investment advisors as it, in its sole
        discretion, has deemed necessary or appropriate in connection with its
        purchase of the Shares.

        6. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
Notwithstanding any investigation made by any party to this Agreement, all
covenants, agreements, representations and warranties made by the Company and
the Purchaser herein and in the certificates for the securities delivered
pursuant hereto shall survive the execution of this Agreement, the delivery to
the Purchaser of the Shares being purchased and the payment therefor.

        7. CONDITIONS TO COMPANY'S OBLIGATIONS AT CLOSING. The Company's
obligation to complete the sale and issuance of the Shares and deliver the
Shares to the Purchaser at the Initial Closing or the

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Milestone Closing, as applicable, shall be subject to the following conditions
to the extent not waived by the Company:

7.1     RECEIPT OF PAYMENT. The Company shall have received payment, by check or
        wire transfer of immediately available funds, in the full amount of (a)
        the Purchase Price for the Initial Shares being purchased by the
        Purchaser at the Initial Closing, or (b) the Milestone Price for the
        Milestone Shares being purchased by the Purchaser at the Milestone
        Closing.

7.2     REPRESENTATIONS, WARRANTIES AND COVENANTS. The representations and
        warranties made by the Purchaser in Section 5 hereof shall be true and
        correct when made at the Initial Closing or the Milestone Closing, as
        applicable, and shall be true and correct on the Initial Closing Date or
        the Milestone Closing Date, as applicable. The Purchaser shall have
        performed and complied with all obligations and conditions required to
        be performed and completed with by the Purchaser under this Agreement on
        or prior to the Initial Closing Date or the Milestone Closing Date, as
        applicable. At the Milestone Closing, if requested by Company, the
        Purchaser shall deliver to Company a duly executed certificate to the
        effect of the foregoing, as of the Milestone Closing Date.

        8. CONDITIONS TO PURCHASERS' OBLIGATIONS AT CLOSING. The Purchaser's
obligation to accept delivery of the Shares and to pay for the Shares at the
Initial Closing or the Milestone Closing, as applicable shall be subject to the
following conditions to the extent not waived by such Purchaser:

8.1     REPRESENTATIONS, WARRANTIES AND COVENANTS. The representations and
        warranties made by the Company in Section 4 hereof shall be true and
        correct when made and shall be true and correct on the Initial Closing
        Date or the Milestone Closing Date, as applicable; provided, however,
        that such representations and warranties shall be deemed modified as
        required to reflect changes occurring between the Initial Closing Date
        and the Milestone Closing Date as described in any documents that the
        Company files with the SEC under the Securities Act or the Exchange Act
        during such period or in any update to the Company's Schedule of
        Exceptions provided by the Company to the Purchaser prior to the
        Milestone Closing Date. At the Milestone Closing, if requested by
        Purchaser, the Company shall deliver to Purchaser a duly executed
        certificate to the effect of the foregoing, as of the Milestone Closing
        Date.

8.2     OPINIONS OF COMPANY'S COUNSEL . Company shall deliver the opinion of
        Company's legal counsel as described in Section 4.13 hereof.

        9. RESTRICTIONS ON TRANSFER; REGISTRATION RIGHTS.

9.1     RESTRICTIONS ON TRANSFER.

(a)     Purchaser agrees not to make any disposition of all or any portion of
        the Shares unless and until:

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

        (ii)   (A) The transferee has agreed in writing to be bound by the terms
               of this Agreement, (B) Purchaser shall have notified the Company
               of the proposed disposition and shall have furnished the Company
               with a detailed statement of the circumstances surrounding the
               proposed disposition, and (C) if reasonably requested by the
               Company, Purchaser shall have furnished the Company with an
               opinion of counsel, reasonably satisfactory to the Company, that
               such disposition will not require registration of such shares
               under the Securities Act.

(b)     Notwithstanding the provisions of Section 9.1(a) above, no such
        registration statement or opinion of counsel shall be necessary for a
        transfer by a Purchaser which is (A) a partnership to its partners or
        former partners in accordance with partnership interests, (B) a limited
        liability company to its members or former members in accordance with
        their interest in the limited liability company, or (C) to the
        Purchaser's family member or trust for the benefit of an individual
        Purchaser, provided the transferee will be subject to the terms of this
        Agreement to the same extent as if he were an original Purchaser
        hereunder.

                                       6
<PAGE>   7

(c)     Each certificate representing Shares shall (unless registered prior to
        the issuance of such Shares or otherwise permitted by the provisions of
        the Agreement) be stamped or otherwise imprinted with a legend
        substantially similar to the following (in addition to any legend
        required under applicable state securities laws, as provided elsewhere
        in this Agreement or any other applicable agreement or instrument):

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

        The Company shall be obligated to reissue promptly unlegended
certificates at the request of any holder thereof if such holder shall have
obtained an opinion of counsel (which counsel may be counsel to the Company)
reasonably acceptable to the Company to the effect that the securities proposed
to be disposed of may lawfully be so disposed of (with no need for compliance
with Rule 144) without registration, qualification or legend.

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

9.2     "PIGGY-BACK" REGISTRATIONS. In the event that shares of the Company's
        equity securities held by any selling stockholder are included in a
        registration statement under the Securities Act for purposes of the
        Company's Qualified Offering (as defined below), the Company shall
        notify all holders of the Shares (individually, a "Holder" and
        collectively the "Holders") in writing at least 30 days prior to the
        filing of such registration statement and will afford each such Holder
        an opportunity to include in such registration statement all or part of
        the Shares held by such Holder on a pro rata basis with the securities
        of such other selling stockholders to be included in the registration
        statement. Each Holder desiring to include in any such registration
        statement all or any part of the Shares held by it shall, within 20 days
        after the above-described notice from the Company, so notify the Company
        in writing. For purposes of this Agreement, "Qualified Offering" shall
        mean the Company's first firm underwritten public offering of its Common
        Stock registered under the Securities Act after the Effective Date in
        which the Company receives gross proceeds of at least $15 million.

9.3     UNDERWRITING. The right of any such Holder to be included in a
        registration pursuant to Section 0 shall be conditioned upon such
        Holder's participation in such underwriting and the inclusion of such
        Holder's Shares in the underwriting to the extent provided herein. All
        Holders proposing to distribute their Shares through such underwriting
        shall enter into an underwriting agreement in customary form with the
        underwriter or underwriters selected for such underwriting by the
        Company. Notwithstanding any other provision of this Agreement, if the
        underwriter determines in good faith that marketing factors require a
        limitation of the number of shares to be underwritten, the number of
        shares that may be included in the underwriting shall be allocated,
        first, to the Company; and second, to any stockholder of the Company
        (including the Holders) on a pro rata basis based on the total number of
        Shares held by the Holders and securities held by such other
        stockholders; provided that no such reduction shall reduce the
        securities being offered by the Company for its own account to be
        included in the registration and underwriting.

9.4     RIGHT TO TERMINATE REGISTRATION. The Company shall have the right to
        terminate or withdraw any registration initiated by it under Section 0
        prior to the effectiveness of such registration whether or not any
        Holder has elected to include securities in such registration. The
        expenses of such withdrawn registration shall be borne by the Company.

9.5     TERMINATION OF REGISTRATION RIGHTS. All registration rights granted to a
        Holder under this Section 9 shall terminate and be of no further force
        and effect upon the date that all Shares held by and issuable to such
        Holder (and its affiliates) may be sold under Rule 144 during any 90-day
        period.

9.6     FURNISHING INFORMATION. It shall be a condition precedent to the
        obligations of the Company to take any action pursuant to Section 0 that
        the selling Holders shall furnish to the Company such information
        regarding

                                       7
<PAGE>   8

        themselves, the Shares held by them and the intended method of
        disposition of such securities as shall be required to effect the
        registration of their Shares.

9.7     INDEMNIFICATION. In the event any Shares are included in a registration
        statement under Section 0:

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

(b)     To the extent permitted by law, each Holder will, if Shares held by such
        Holder are included in the securities as to which such registration,
        qualifications or compliance is being effected, indemnify and hold
        harmless the Company, each of its directors, its officers, and legal
        counsel and each person, if any, who controls the Company within the
        meaning of the Securities Act, any underwriter and any other holder
        selling securities under such registration statement or any of such
        other holder's partners, directors or officers or any person who
        controls such holder, against any losses, claims, damages, expenses
        (including attorney fees), or liabilities (joint or several) to which
        the Company or any such director, officer, counsel, controlling person,
        underwriter or other such holder, or partner, director, officer or
        controlling person of such other holder may become subject under the
        Securities Act, the Exchange Act or other federal or state law, insofar
        as such losses, claims, damages or liabilities (or actions in respect
        thereto) arise out of or are based upon any Violation, in each case to
        the extent (and only to the extent) that such Violation occurs in
        reliance upon and in conformity with written information furnished by
        such Holder under an instrument duly executed by such Holder and stated
        to be specifically for use in connection with such registration; and
        each such Holder will reimburse any legal or other expenses reasonably
        incurred by the Company or any such director, officer, counsel,
        controlling person, underwriter or other Holder, or partner, officer,
        director or controlling person of such other Holder in connection with
        investigating or defending any such loss, claim, damage, liability or
        action if it is judicially determined that there was such a Violation;
        provided, however, that the indemnity agreement contained in this
        Section (b) shall not apply to amounts paid in settlement of any such
        loss, claim, damage, liability or action if such settlement is effected
        without the consent of the Holder, which consent shall not be
        unreasonably withheld; provided further, that in no event shall any
        indemnity under this Section (b) exceed the proceeds from the offering
        received by such Holder.

(c)     Promptly after receipt by an indemnified party under this Section 0 of
        notice of the commencement of any action (including any governmental
        action), such indemnified party will, if a claim in respect thereof is
        to be made against any indemnifying party under this Section 0, deliver
        to the indemnifying party a written notice of the commencement thereof
        and the indemnifying party shall have the right to participate in, and,
        to the extent

                                       8
<PAGE>   9

        the indemnifying party so desires, jointly with any other indemnifying
        party similarly noticed, to assume the defense thereof with counsel
        mutually satisfactory to the parties; provided, however, that an
        indemnified party shall have the right to retain its own counsel, with
        the fees and expenses to be paid by the indemnifying party, if
        representation of such indemnified party by the counsel retained by the
        indemnifying party would be inappropriate due to actual or potential
        differing interests between such indemnified party and any other party
        represented by such counsel in such proceeding. The failure to deliver
        written notice to the indemnifying party within a reasonable time of the
        commencement of any such action, if materially prejudicial to its
        ability to defend such action, shall relieve such indemnifying party of
        any liability to the indemnified party under this Section 0, but the
        omission so to deliver written notice to the indemnifying party will not
        relieve it of any liability that it may have to any indemnified party
        otherwise than under this Section 0.

(d)     If the indemnification provided for in this Section 0 is held by a court
        of competent jurisdiction to be unavailable to an indemnified party with
        respect to any losses, claims, damages or liabilities referred to
        herein, the indemnifying party, in lieu of indemnifying such indemnified
        party thereunder, shall to the extent permitted by applicable law
        contribute to the amount paid or payable by such indemnified party as a
        result of such loss, claim, damage or liability in such proportion as is
        appropriate to reflect the relative fault of the indemnifying party on
        the one hand and of the indemnified party on the other in connection
        with the Violation(s) that resulted in such loss, claim, damage or
        liability, as well as any other relevant equitable considerations. The
        relative fault of the indemnifying party and of the indemnified party
        shall be determined by a court of law by reference to, among other
        things, whether the untrue or alleged untrue statement of a material
        fact or the omission to state a material fact relates to information
        supplied by the indemnifying party or by the indemnified party and the
        parties' relative intent, knowledge, access to information and
        opportunity to correct or prevent such statement or omission; provided,
        that in no event shall any contribution by a Holder hereunder exceed the
        proceeds from the offering received by such Holder.

(e)     The obligations of the Company and Holders under this Section 0 shall
        survive completion of any offering of Shares in a registration
        statement. No indemnifying party, in the defense of any such claim or
        litigation, shall, except with the consent of each indemnified party,
        consent to entry of any judgment or enter into any settlement which does
        not include as an unconditional term thereof the giving by the claimant
        or plaintiff to such indemnified party of a release from all liability
        in respect to such claim or litigation.

9.8     "MARKET STAND-OFF" AGREEMENT. If requested by the Company or the
        representative of the underwriters of Common Stock (or other securities)
        of the Company, each Holder shall not sell or otherwise transfer or
        dispose of any Common Stock (or other securities) of the Company held by
        such Holder (other than those included in the registration) for a period
        specified by the representative of the underwriters, in any case not to
        exceed one hundred eighty (180) days following any registered offering
        of the Common Stock of the Company, provided that the Company, all
        officers and directors of the Company and any other selling stockholders
        enter into similar agreements (subject to customary exceptions).

9.9     The obligations described in this Section (e) shall not apply to a
        registration relating solely to employee benefit plans on Form S-8 or
        similar forms that may be promulgated in the future, or a registration
        relating solely to a Commission Rule 145 transaction on Form S-4 or
        similar forms that may be promulgated in the future. The Company may
        impose stop-transfer instructions with respect to the shares of Common
        Stock (or other securities) subject to the foregoing restriction until
        the end of said periods.

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

(a)     Make and keep public information available, as those terms are
        understood and defined in SEC Rule 144 or any similar or analogous rule
        promulgated under the Securities Act;

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

(c)     So long as a Holder owns any Shares, furnish to such Holder forthwith
        upon request: a written statement by the

                                       9
<PAGE>   10

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

(d)     Notwithstanding anything herein to the contrary, Company undertakes the
        obligations set forth above in this Section 9.9 for a period of not less
        than two (2) years following the Initial Closing Date with respect to
        the Shares purchased by Purchaser on the Initial Closing Date and for a
        period of not less than two (2) years following the Milestone Closing
        Date with respect to the Shares purchased by Purchaser at the Milestone
        Closing, or until such earlier date upon which such Shares became
        registered under the Securities Act.

        10. RIGHT OF FIRST REFUSAL.

10.1    SUBSEQUENT OFFERINGS. The Purchaser shall have a right of first refusal
        to purchase its pro rata share of all Equity Securities (as defined
        below), that the Company may, from time to time, propose to sell and
        issue after the date of this Agreement, other than the Equity Securities
        excluded by Section 10.7 hereof. The Purchaser's pro rata share is equal
        to the ratio of (a) the number of shares of Common Stock purchased
        pursuant to this Agreement, then held by the Purchaser or any transferee
        pursuant to Section 0, to (b) the total number of shares of the
        Company's outstanding Common Stock (including all shares of Common Stock
        issued or issuable upon the conversion of any Equity Securities or upon
        exercise of any outstanding warrants or options) immediately prior to
        the issuance of the Equity Securities. The term "Equity Securities"
        shall mean (i) any Common Stock, Preferred Stock or other security of
        the Company, (ii) any security convertible, with or without
        consideration, into any Common Stock, Preferred Stock or other security
        (including any option, warrant or other right to purchase such a
        convertible security), (iii) any security carrying any option, warrant
        or right to subscribe to or purchase any Common Stock, Preferred Stock
        or other security, or (iv) any such option, warrant or right.

10.2    EXERCISE OF RIGHT OF FIRST REFUSAL. If the Company proposes to issue any
        Equity Securities in a transaction subject to Section 10.1, it shall
        give the Purchaser written notice of its intention, describing the
        Equity Securities, the price and the terms and conditions upon which the
        Company proposes to issue the same (an "Offering Notice"). The Purchaser
        shall have five (5) business days from the giving of such Offering
        Notice to agree to purchase its pro rata share of the Equity Securities
        for the price and upon the terms and conditions specified in the notice
        by giving written notice to the Company and stating therein the quantity
        of Equity Securities to be purchased. Notwithstanding the foregoing, the
        Company shall not be required to offer or sell such Equity Securities to
        the Purchaser if doing so would cause the Company to be in violation of
        applicable federal securities laws by virtue of such offer or sale;
        provided, however, the Company agrees to use its reasonable best efforts
        to take whatever action may be necessary or appropriate to comply with
        applicable federal securities laws in connection with such offer or
        sale. Notwithstanding anything herein to the contrary, such action by
        Company shall include, but not be limited to, providing Purchaser with
        any additional information provided to the prospective investors in the
        applicable transaction so long as Purchaser has executed an agreement
        not to disclose such information in a form and substance as reasonably
        requested by the Company.

10.3    ISSUANCE OF EQUITY SECURITIES TO OTHER PERSONS. If the Purchaser fails
        to exercise in full the right of first refusal, the Company shall have
        one hundred twenty (120) days thereafter to sell the Equity Securities
        in respect of which the Purchaser's right was not exercised, at a price
        and upon general terms and conditions no more favorable to the
        purchasers thereof in any material respect than specified in the
        Company's Offering Notice to the Purchaser. If the Company has not sold
        such Equity Securities within one hundred twenty (120) days of the
        Offering Notice, the Company shall not thereafter issue or sell any
        Equity Securities, without first offering such securities to the
        Purchaser in the manner provided in this Section 10.

10.4    TERMINATION OF RIGHT OF FIRST REFUSAL. The right of first refusal
        established by this Section 10 shall terminate on the first to occur of
        (a) the third anniversary of the Effective Date, or (b) the first date
        on which the Purchaser holds less than 50% of the total number of Shares
        purchased under this Agreement.

                                       10
<PAGE>   11

10.5    NO TRANSFER OF RIGHT OF FIRST REFUSAL. The right of first refusal
        established by this Section (d) may not be assigned or transferred,
        except as otherwise provided in Section 0.

10.6    EXCLUDED SECURITIES. The right of first refusal established by Section
        (d) shall have no application to any of the following Equity Securities:

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

(b)     stock issued pursuant to any rights, agreements, options or warrants
        outstanding as of the date of this Agreement, and stock issued pursuant
        to any rights, agreements, options or warrants granted after the date of
        this Agreement provided that the right of first refusal established by
        this Section (d) did not apply to the initial sale or grant by the
        Company of such rights, agreements, options or warrants;

(c)     any Equity Securities issued for consideration other than cash pursuant
        to a merger, consolidation, acquisition or similar business combination
        whereby the stockholders of the Company will own more than 50% of the
        voting power of the combined entity;

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

(e)     any Equity Securities issued in connection with an underwritten public
        offering;

(f)     shares of Common Stock issued upon conversion of any Equity Securities;

(g)     shares of Common Stock issued pursuant to Section 3.2 or Section 3.3 of
        this Agreement;

(h)     any Equity Securities issued pursuant to any equipment leasing
        arrangement; and

(i)     shares of the Company's Common Stock or Preferred Stock issued in
        connection with strategic transactions involving the Company and any
        third party, including (i) joint ventures, manufacturing, marketing,
        corporate partnering or distribution arrangements, or (ii) technology
        transfer, research or development arrangements; provided that such
        strategic transactions and the issuance of shares therein, has been
        approved by the Company's Board of Directors.

10.7    CONDITION TO PURCHASER'S RIGHT OF FIRST REFUSAL. Notwithstanding any
        other provisions in this Agreement, the Purchaser or any Holder shall
        not be entitled to exercise the right of first refusal contained in this
        Section (d) if such Purchaser or Holder has entered into any Restricted
        Transaction between the date of any Offering Notice and the closing of
        the transaction described in such Offering Notice.

        11. ADDITIONAL COVENANTS.

11.1    RESTRICTED TRANSACTIONS. The Purchaser shall not, and shall not
        authorize, instruct, facilitate or permit any of its affiliates or any
        other person or entity, to engage in any of the following (a "Restricted
        Transaction") during any period described in Section (b) or (i): (a)
        offers, pledges, sells, contracts to sell, sells any option or contract
        to purchase, purchases any option or contract to sell, grants any
        option, right or warrant for the sale of, or other disposition of or
        transfer of any shares of the Company's Common Stock or any securities
        convertible into or exchangeable or exercisable for Common Stock (except
        pursuant to Section 9.1), or (b) enters into any swap or any other
        agreement or any transaction that transfers, in whole or in part
        directly or indirectly, the economic consequence of ownership of the
        Common Stock, whether any such swap or transaction is to be settled by
        delivery of common stock or other securities, in cash or otherwise.

11.2    EQUITABLE PRICING. The Company agrees that any HIV vaccines developed by
        the Company, when available for sale, shall be made available to
        consumers in the Caribbean at prices and terms no less favorable than

                                       11
<PAGE>   12

        afforded consumers in any other third world country.

11.3    USE OF PROCEEDS. The Company will use the proceeds it receives from
        Purchaser at the Initial Closing solely for the development of DNA and
        polypeptide HIV vaccines. In connection with such development, the
        Company's current development plan is to commence Phase I U.S. trials on
        or before June 30, 2002, and to complete same on or before June 30,
        2003. The Company agrees to take commercially reasonable efforts to meet
        such development objectives. The Company shall use its internal
        accounting system as consistently applied to other development programs
        at the Company to account for how the proceeds are spent. For purposes
        of this Section 11.3, any funding or capital the Company may receive
        from the NIH, collaborative partners or others, specifically to support
        its HIV vaccine program, shall not be deemed to offset the Company's
        expenditures on the HIV program.

(a)     If the Company materially breaches this Section 0 at any time, the
        Purchaser may require the Company, to the extent the Company may
        lawfully do so, to redeem any or all of the Initial Shares; provided,
        however, that if the Company abandons the development of HIV vaccines
        based upon a good faith determination by the Company's board of
        directors that such development is no longer viable or financially
        practical (a "Reconsideration"), such Reconsideration shall not be
        deemed to be a material breach of this Section 0.

(b)     In the event of a Reconsideration, the Purchaser may require the
        Company, to the extent the Company may lawfully do so, to redeem the
        number of Initial Shares equal to the balance of the proceeds received
        at the Initial Closing that the Company has not spent towards the
        development of HIV vaccines (determined in accordance with this Section
        11.3) divided by the Purchase Price (as adjusted for any stock
        dividends, combinations, splits, recapitalizations and the like with
        respect to the Common Stock).

(c)     To exercise the redemption rights set forth in this Section 11.3, the
        Purchaser shall request a redemption from the Company in writing, such
        request to specifically detail the reasons for the requested redemption
        (a "Redemption Request"). The Company shall effect the requested
        redemption within 60 days of receiving a Redemption Request (the
        "Redemption Date") by paying in cash for each of the Initial Shares to
        be redeemed an amount equal to the Purchase Price (the number of Shares
        and Purchase Price to be adjusted for any stock dividends, combinations,
        splits, recapitalizations and the like with respect to the Common
        Stock). If the Company does not have sufficient funds legally available
        to redeem all Initial Shares to be redeemed by the Redemption Date,
        then, to the extent possible, the Company shall redeem those shares for
        which funds are legally available and shall redeem the remaining shares
        to be redeemed as soon as sufficient funds are legally available.

11.4    DELIVERY OF FINANCIAL STATEMENTS, BUDGETS. So long as the Purchaser
        (with its affiliates) holds at least 50% of the Initial Shares issued
        pursuant to this Agreement, the Company shall deliver to the Purchaser
        copies of its Forms 10-K and 10-Q as filed with the SEC, and other
        public announcements and releases made by the Company. In addition, so
        long as the Purchaser (with its affiliates) holds at least 50% of the
        Initial Shares issued pursuant to this Agreement, the Company shall
        deliver to Purchaser an annual budget and operating plan for the
        development of HIV vaccines, which shall be confidential information of
        the Company and may not be disclosed by the Purchaser to any third party
        used by the Purchaser for any purpose other than for purposes of this
        Agreement.

11.5    INSPECTION RIGHTS. Only with respect to the development of HIV vaccines
        and so long as the Purchaser holds at least 50% of the Initial Shares
        issued pursuant to this Agreement, the Purchaser shall have the right to
        visit any of the properties of the Company or any of its subsidiaries,
        and to discuss the affairs, finances and accounts of the Company or any
        of its subsidiaries with its officers, and to review such information as
        is reasonably requested all at such times and as often as may be
        reasonably requested; provided, however, that the Company shall not be
        obligated under this Section 11.4 with respect to a competitor of the
        Company or with respect to information which the Company's Board of
        Directors determines in good faith is confidential and should not,
        therefore, be disclosed.

        12. BROKER'S FEE. The Company and the Purchaser hereby represent that,
there are no brokers or finders entitled to compensation in connection with the
sale of the Shares, and shall indemnify each other for any such fees for which
they are responsible.

                                       12
<PAGE>   13

        13. NOTICES. All notices, requests, consents and other communications
hereunder shall be in writing, shall be sent by confirmed facsimile or mailed by
first-class registered or certified airmail, or nationally recognized overnight
express courier, postage prepaid, and shall be deemed given when so sent in the
case of facsimile transmission, or when so received in the case of mail or
courier, and addressed as follows:

                      if to the Company, to:

                      (a)    Epimmune Inc.
                             5820 Nancy Ridge Drive, Suite 100
                             San Diego, CA  92121
                             Attention:  President and Chief Executive Officer

                      with a copy so mailed to:

                             Cooley Godward LLP
                             4365 Executive Drive, Suite 1100
                             San Diego, CA  92121
                             Attention:  Frederick T. Muto, Esq.

or to such other person at such other place as the Company shall designate to
the Purchasers in writing; and

(c)     if to the Purchaser, at the address as set forth at the end of this
        Agreement, or at such other address or addresses as may have been
        furnished to the Company in writing, with a copy so mailed to: Robert D.
        Krintzman, Esq., Venture Counsel, Inc., 4330 La Jolla Village Drive,
        Suite 330, San Diego, CA 92121.

        14. MISCELLANEOUS.

14.1    WAIVERS AND AMENDMENTS. Neither this Agreement nor any provision hereof
        may be changed, waived, discharged, terminated, modified or amended
        except upon the written consent of the Company and the Purchaser.

14.2    HEADINGS. The headings of the various sections of this Agreement have
        been inserted for convenience of reference only and shall not be deemed
        to be part of this Agreement.

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

14.4    GOVERNING LAW. This Agreement shall be governed by and construed in
        accordance with the laws of the State of California as applied to
        contracts entered into and performed entirely in California by
        California residents, without regard to conflicts of law principles.

14.5    COUNTERPARTS. This Agreement may be executed in two or more
        counterparts, each of which shall constitute an original, but all of
        which, when taken together, shall constitute but one instrument, and
        shall become effective when one or more counterparts have been signed by
        each party hereto and delivered to the other parties.

14.6    ASSIGNMENT. This Agreement, including the right to use the Restricted
        Proceeds to develop DNA and polypeptide HIV vaccines and the right to
        sell the Milestone Shares (as adjusted for any stock dividends,
        combinations, splits, recapitalizations and the like) shall be freely
        assignable by the Company in the event of the sale of all or any part of
        the Company's business or a change of control of the Company approved by
        its Board of Directors.

14.7    SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided herein,
        the provisions hereof shall inure to the benefit of, and be binding
        upon, the successors, assigns, heirs, executors and administrators of
        the parties

                                       13
<PAGE>   14

        hereto.

14.8    ENTIRE AGREEMENT. This Agreement and other documents delivered pursuant
        hereto, including the exhibits, constitute the full and entire
        understanding and agreement between the parties with regard to the
        subjects hereof and thereof.

14.9    PAYMENT OF FEES AND EXPENSES. Each of the Company and the Purchaser
        shall bear its own expenses and legal fees incurred on its behalf with
        respect to this Agreement and the transactions contemplated hereby. If
        any action at law or in equity is necessary to enforce or interpret the
        terms of this Agreement, 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.

14.10   SPECIAL NOTICE OF CERTAIN ADJUSTMENTS. Upon the occurrence of each
        adjustment or readjustment the number of Shares or the Purchase Price
        pursuant to Section 2.1(b), 3.2(a)(2), 11.3(b), 11.3(c) and/or 14.6, the
        Company at its expense shall promptly compute such adjustment or
        readjustment in accordance with the terms hereof and furnish to the
        Purchaser a certificate setting forth such adjustment or readjustment
        and showing in detail the facts upon which such adjustment or
        readjustment is based. The Company shall, upon the written request, at
        any time, of the Purchaser, furnish or cause to be furnished to
        Purchaser a like certificate setting forth: (i) such adjustments and
        readjustments; and (ii) the Purchase Price at the time in effect.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       14
<PAGE>   15

        IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written.

                                   EPIMMUNE INC.

                                   By:    /s/ Robert De Vaere
                                        ----------------------------------------
                                   Name:  Robert De Vaere
                                          --------------------------------------
                                   Title: Vice President, Finance & CFO
                                          --------------------------------------

                                   PURCHASER

                                   /s/ Peter Allard
                                   ---------------------------------------------
                                   Peter Allard

                                   Seaview, Chancery Lane
                                   Christ Church
                                   Barbados, West Indies
                                   Facsimile:  (246) 428-2787

                         COMMON STOCK PURCHASE AGREEMENT

<PAGE>   16

                                  EPIMMUNE INC.

                                  COMMON STOCK
                               PURCHASE AGREEMENT

                                OCTOBER 16, 2000

<PAGE>   17

                                TABLE OF CONTENTS

<TABLE>
<S>     <C>                                                                     <C>
1.      AUTHORIZATION OF SALE OF THE SECURITIES................................  1

2.      AGREEMENT TO SELL AND PURCHASE THE SHARES..............................  1

        2.1    Sale of Shares..................................................  1

        2.2    Acceptance of Proposed Purchase of Shares.......................  2

3.      CLOSING AND DELIVERY...................................................  2

        3.1    Initial Closing.................................................  2

        3.2    Milestone Closing...............................................  2

        3.3    Additional Closings.............................................  3

4.      REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY...............  3

        4.1    Organization and Good Standing..................................  3

        4.2    Corporate Power; Authorization..................................  3

        4.3    Issuance and Delivery of the Shares.............................  4

        4.4    SEC Documents; Financial Statements.............................  4

        4.5    Intellectual Property...........................................  4

        4.6    Capitalization..................................................  5

        4.7    Litigation......................................................  5

        4.8    Governmental Consents...........................................  5

        4.9    No Material Adverse Change......................................  5

        4.10   Securities Violations...........................................  5

        4.11   Nasdaq..........................................................  5

        4.12   No Conflicts of Interest Representation.........................  6

        4.13   Opinions of Company's Counsel...................................  6

5.      REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASER.............  6

6.      SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.................  7

7.      CONDITIONS TO COMPANY'S OBLIGATIONS AT CLOSING.........................  7

        7.1    Receipt of Payment..............................................  7

        7.2    Representations, Warranties and Covenants.......................  7

8.      CONDITIONS TO PURCHASERS' OBLIGATIONS AT CLOSING.......................  8

        8.1    Representations, Warranties and Covenants.......................  8

        8.2    Opinions of Company's Counsel...................................  8

9.      RESTRICTIONS ON TRANSFER; REGISTRATION RIGHTS..........................  8

        9.1    Restrictions on Transfer........................................  8

        9.2    "Piggy-Back" Registrations......................................  9

        9.3    Underwriting....................................................  9

        9.4    Right to Terminate Registration................................. 10

        9.5    Termination of Registration Rights.............................. 10
</TABLE>

                                       i
<PAGE>   18

<TABLE>
<S>     <C>                                                                     <C>
        9.6    Furnishing Information.......................................... 10

        9.7    Indemnification................................................. 10

        9.8    "Market Stand-Off" Agreement.................................... 12

        9.9    Rule 144 Reporting.............................................. 12

10.     RIGHT OF FIRST REFUSAL................................................. 13

        10.1   Subsequent Offerings............................................ 13

        10.2   Exercise of Right of First Refusal.............................. 13

        10.3   Issuance of Equity Securities to Other Persons.................. 14

        10.4   Termination of Right of First Refusal........................... 14

        10.5   No Transfer of Right of First Refusal........................... 14

        10.6   Excluded Securities............................................. 14

        10.7   Condition to Purchaser's Right of First Refusal................. 15

11.     ADDITIONAL COVENANTS................................................... 15

        11.1   Restricted Transactions......................................... 15

        11.2   Equitable Pricing............................................... 15

        11.3   Use of Proceeds................................................. 15

        11.4   Delivery of Financial Statements, Budgets....................... 16

        11.5   Inspection Rights............................................... 16

12.     BROKER'S FEE........................................................... 17

13.     NOTICES................................................................ 17

14.     MISCELLANEOUS.......................................................... 17

        14.1   Waivers and Amendments.......................................... 17

        14.2   Headings........................................................ 17

        14.3   Severability.................................................... 17

        14.4   Governing Law................................................... 18

        14.5   Counterparts.................................................... 18

        14.6   Assignment...................................................... 18

        14.7   Successors and Assigns.......................................... 18

        14.8   Entire Agreement................................................ 18

        14.9   Payment of Fees and Expenses.................................... 18

        14.10  Special Notice of Certain Adjustments........................... 18
</TABLE>

                                       ii

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