Document:

Exhibit
4.1

     

    INVESTOR
RIGHTS AGREEMENT

     

    This
Investor Rights Agreement (this “Agreement”)
is made and entered into as of April 3, 2009, by and among Sunesis
Pharmaceuticals, Inc., a Delaware corporation (the “Company”),
and the several investors signatory hereto (including any successor or assign of
any investor signatory hereto, each an “Investor”
and, collectively, the “Investors”).

     

    This
Agreement is made pursuant to the Securities Purchase Agreement, dated as of the
date hereof, by and  between the Company and each Investor (the “Purchase
Agreement”).

     

    NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement,
and for other good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the Company and each of the Investors agree as
follows:

     

    1.    Definitions.  Capitalized
terms used and not otherwise defined herein that are defined in the Purchase
Agreement shall have the meanings given such terms in the Purchase
Agreement.  As used in this Agreement, the following terms shall have
the following meanings:

     

    “Advice”
shall have the meaning set forth in Section 4(b).

     

    “Common Stock
Equivalents” means any securities of the Company which would entitle the
holder thereof to acquire at any time Common Stock, including, without
limitation, any debt, preferred stock, rights, options, warrants or other
instrument that is at any time convertible into or exchangeable for, or
otherwise entitles the holder thereof to receive, Common Stock or other
securities that entitle the holder to receive, directly or indirectly, Common
Stock.

     

    “Company
Notice” shall have the meaning set forth in Section 7(a)(2).

     

    “Effective
Date” means the date that a Registration Statement filed pursuant to
Section 2(a) is first declared effective by the Commission.

     

    “Effectiveness
Deadline” means, with respect to each Initial Registration Statement or
New Registration Statement, the earlier of: (i) the ninetieth (90th)
calendar day following the applicable Filing Deadline; provided, that, if the
Commission reviews and has written comments to a filed Registration Statement,
then the Effectiveness Deadline under this clause (i) shall be the one hundred
twentieth (120th)
calendar day following the applicable Filing Deadline, and (ii) the fifth
(5th)
Business Day following the date on which the Company is notified by the
Commission that the applicable Registration Statement will not be reviewed or is
no longer subject to further review and comments and the effectiveness of such
Registration Statement may be accelerated; provided, however, that if
the Effectiveness Deadline falls on a Saturday, Sunday or other day that the
Commission is closed for business, the Effectiveness Deadline shall be extended
to the next Business Day on which the Commission is open for
business.

     

    “Effectiveness
Period” shall have the meaning set forth in Section 2(b).

     

    “Excluded
Securities” means any issuance of (a) securities pursuant to stock
splits, stock dividends or similar transactions, (b) Common Stock to employees,
consultants, officers or directors of the Company pursuant to any duly-adopted
equity incentive or equity compensation plan, to the extent approved by the
Board or a committee of non-employee directors established for such purpose, (c)
securities upon the exercise, exchange or conversion of any securities issued or
issuable under the Purchase Agreement and/or other securities exercisable or
exchangeable for or convertible into shares of Common Stock issued and
outstanding on the date of this Agreement, provided that such securities have
not been amended since the date of this Agreement to increase the number of such
securities or to decrease the exercise, exchange or conversion price of such
securities, or (d) securities issued or issuable in a transaction or series of
related transactions in which the Majority Investors have agreed in writing will
be excluded from the preemptive rights set forth in Section 7(a).

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    “Filing
Deadline” means, with respect to the Initial Registration Statement
required to be filed pursuant to Section 2(a), (i) the forty-fifth (45th)
calendar day following (A) the consummation of the Common Equity Closing or (B)
the consummation of an Alternative Common Stock Financing, (ii) the sixtieth
(60th)
calendar day following the delivery of a Non-Participation Notice, or (iii) the
earlier of March 31, 2011 or five (5) Business Days following the filing of the
Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010
with the Commission, in the event that the Common Equity Closing or an
Alternative Common Stock Financing has not been consummated and a
Non-Participation Notice has not been delivered on or prior to December 31,
2010; provided,
however, that if the Filing Deadline falls on a Saturday, Sunday or other
day that the Commission is closed for business, the Filing Deadline shall be
extended to the next Business Day on which the Commission is open for
business.

     

    “FINRA”
means the Financial Industry Regulatory Authority, Inc. or any successor entity
or entities.

     

    “Holder” or
“Holders”
means the holder or holders, as the case may be, from time to time of
Registrable Securities.

     

    “Indemnified
Party” shall have the meaning set forth in Section 6(c).

     

    “Indemnifying
Party” shall have the meaning set forth in Section 6(c).

     

    “Initial
Registration Statement” shall have the meaning set forth in Section
2(a).

     

    “Initiating
Holders” shall have the meaning set forth in Section 2(f).

     

    “Investor
Designee” shall have the meaning set forth in Section
7(b)(1).

     

    “Issuer
Filing” shall have the meaning set forth in Section 3(p).

     

    “Losses”
shall have the meaning set forth in Section 6(a).

     

    “Majority
Investors” shall have the meaning set forth in Section
7(b)(1).

     

    “New Registration
Statement” shall have the meaning set forth in Section 2(a).

     

    “Pro Rata
Share” shall have the meaning set forth in Section 7(a)(1).

     

     “Prospectus”
means the prospectus included in a Registration Statement (including, without
limitation, a prospectus that includes any information previously omitted from a
prospectus filed as part of an effective registration statement in reliance upon
Rule 430A promulgated under the Securities Act), as amended or supplemented by
any prospectus supplement, with respect to the terms of the offering of any
portion of the Registrable Securities covered by a Registration Statement, and
all other amendments and supplements to the Prospectus, including post-effective
amendments, and all material incorporated by reference or deemed to be
incorporated by reference in such Prospectus.

     

    
      
        
        

      

      
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    “Register,”
“registered”
and “registration”
refer to a registration made by preparing and filing a Registration Statement or
similar document in compliance with the Securities Act and pursuant to Rule 415,
and the declaration or ordering of effectiveness of such Registration Statement
or document.

     

    “Registrable
Securities” means all of (i) the Conversion Shares, the Warrant Shares
and, if issued, the Common Equity Shares and (ii) any securities issued or
issuable upon any stock split, dividend or other distribution, recapitalization
or similar event with respect to the foregoing, provided, that the Shares
shall cease to be Registrable Securities upon the earliest to occur of the
following:  (A) sale pursuant to a Registration Statement or Rule 144
under the Securities Act (in which case, only such security sold shall cease to
be a Registrable Security); or (B) to the extent all of the Shares held by a
Holder may be immediately sold to the public without registration or restriction
(including without limitation as to volume by each holder thereof) under the
Securities Act, including pursuant to Rule 144 in a single or series of related
transactions on a single day.

     

    “Registration
Statements” means any one or more registration statements of the Company
filed under the Securities Act that covers the resale of any of the Registrable
Securities pursuant to the provisions of this Agreement (including without
limitation any Initial Registration Statements, New Registration Statements and
Remainder Registration Statements), amendments and supplements to such
Registration Statements, including post-effective amendments, all exhibits and
all material incorporated by reference or deemed to be incorporated by reference
in such Registration Statements.

     

    “Remainder
Registration Statements” shall have the meaning set forth in Section
2(a).

     

    “Rule 415”
means Rule 415 promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same effect as such
Rule.

     

    “Rule 424”
means Rule 424 promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same effect as such
Rule.

     

    “SEC
Guidance” means (i) any publicly-available written or oral guidance,
comments, requirements or requests of the Commission staff and (ii) the
Securities Act, in each
case, as reasonably interpreted in good faith upon the mutual agreement of the
Company and the Lead Purchasers, or counsel selected by the Lead
Purchasers.

     

    “Selling
Stockholder Questionnaire” means a questionnaire in the form attached as
Annex A hereto,
or such other form of questionnaire as may reasonably be adopted by the Company
from time to time.

     

    “Special
Registration Statement” shall mean a registration statement relating to
any employee benefit plan under Form S-8 or similar form or with respect to any
corporate reorganization or other transaction under Rule 145 of the
Securities Act.

     

    “Suspension
Certificate” shall have the meaning set forth in Section
4(a).

     

    “Suspension
Period” shall have the meaning set forth in Section 4(a).

     

    “Violations”
shall have the meaning set forth in Section 6(a).

     

    
      
        
        

      

      
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    2.    Registration.

     

    (a) On or
prior to the Filing Deadline, the Company shall prepare and file with the
Commission a “shelf” Registration Statement covering the resale of all of the
then outstanding Registrable Securities or Registrable Securities issuable upon
exercise of then outstanding Warrants not already covered by an existing and
effective Registration Statement for an offering to be made on a continuous
basis pursuant to Rule 415 or, if Rule 415 is not available for offers and sales
of the Registrable Securities, by such other means of distribution of
Registrable Securities as the Holders may reasonably specify (each, an “Initial
Registration Statement”).  Each Initial Registration Statement
shall be on Form S-3 (except as provided in Section 2(d) below) subject to the
provisions of Section 2(d) and shall contain (except if otherwise required
pursuant to written comments received from the Commission upon a review of such
Registration Statement) the “Plan of Distribution” section approved by the
Majority Investors.  Notwithstanding the registration obligations set
forth in this subsection (a) and subsection (b) of this Section 2, in the event
the Commission informs the Company that all of the Registrable Securities
required to be included in an Initial Registration Statement cannot, as a result
of the application of Rule 415, be registered for resale as a secondary offering
on a single registration statement, the Company agrees to promptly (i) inform
each of the Holders thereof and file amendments to the applicable Initial
Registration Statement as required by the Commission and/or (ii) withdraw such
Initial Registration Statement and file a new registration statement (a “New Registration
Statement”), in either case covering the maximum number of Registrable
Securities required to be included in an Initial Registration Statement and
permitted to be registered by the Commission, on Form S-3 or such other form
available to register for resale the Registrable Securities as a secondary
offering; provided,
however, that prior to filing such amendment or New Registration
Statement, the Company shall be obligated to use its commercially reasonable
best efforts to advocate with the Commission for the registration of all of the
Registrable Securities in accordance with SEC Guidance, including without
limitation, the Manual of Publicly Available Telephone Interpretations
D.29.  Notwithstanding any other provision of this Agreement, if any
SEC Guidance sets forth a limitation of the number of Registrable Securities
permitted to be registered on a particular Registration Statement as a secondary
offering (and notwithstanding that the Company used commercially reasonable best
efforts to advocate with the Commission for the registration of all or a greater
number of Registrable Securities), unless otherwise directed in writing by a
Holder as to its Registrable Securities, the number of Registrable Securities to
be registered on such Registration Statement will be reduced on a pro rata basis
based on the total number of unregistered Shares held by such
Holders.  In the event the Company amends an Initial Registration
Statement or files a New Registration Statement, as the case may be, under
clauses (i) or (ii) above, the Company will file with the Commission, as
promptly as allowed by Commission or SEC Guidance provided to the Company or to
registrants of securities in general, one or more registration statements on
Form S-3 or such other form available to register for resale those Registrable
Securities that were not registered for resale on the Initial Registration
Statement, as amended, or the New Registration Statement (the “Remainder
Registration Statements”).

     

    (b) The
Company shall use its commercially reasonable best efforts to cause each
Registration Statement to be declared effective by the Commission as soon as
practicable and, with respect to each Initial Registration Statement or New
Registration Statement, as applicable, shall cause each Registration Statement
to be declared effective by the Commission no later than the Effectiveness
Deadline (including filing with the Commission a request for acceleration of
effectiveness in accordance with Rule 461 promulgated under the Securities Act
within five (5) Business Days after the date that the Company is notified
(orally or in writing, whichever is earlier) by the Commission that such
Registration Statement will not be “reviewed,” or will not be subject to further
review and that the effectiveness of such Registration Statement may be
accelerated) and shall, subject to Section 3(c) hereof, use its commercially
reasonable best efforts to keep each such Registration Statement continuously
effective under the Securities Act until such time as all of the Shares
(including any securities issued or issuable 

     

    
      
        
        

      

      
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    upon any
stock split, dividend or other distribution, recapitalization or similar event
with respect to the foregoing) shall cease to be Registrable Securities
hereunder (the “Effectiveness
Period”).  The Company shall ensure that each Registration
Statement (including any amendments or supplements thereto and Prospectuses
contained therein) shall not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein, or necessary to
make the statements therein (in the case of Prospectuses, in the light of the
circumstances in which they were made) not misleading.  Each
Registration Statement shall also cover, to the extent allowable under the
Securities Act and the rules promulgated thereunder (including Rule 416), such
indeterminate number of additional shares of Common Stock resulting from stock
splits, stock dividends or similar transactions with respect to the Registrable
Securities.  The Company shall request effectiveness of a Registration
Statement as of 5:00 p.m. Eastern Time on the Effective Date.  The
Company shall promptly notify the Holders via facsimile or e-mail of the
effectiveness of a Registration Statement within one (1) Business Day of the
date on which the Company telephonically confirms effectiveness with the
Commission, which confirmation shall initially be the date requested for
effectiveness of a Registration Statement.  To the extent deemed
required under the Securities Act, the Company shall, by 9:30 a.m. Eastern Time
on the first Business Day after the Effective Date, file a Rule 424(b)
prospectus with the Commission.

     

    (c) The
Company shall not, prior to the Effective Date of the Registration Statements
covering the resale of the Registrable Securities issued or issuable at, or upon
exercise or conversion of securities issued at, the First Unit Closing, or
during the period between the Second Unit Closing and the Effective Date of the
Registration Statement covering the resale of the Registrable Securities issued
or issuable at, or upon exercise or conversion of securities issued at, the
Second Unit Closing, if any, or during the period between the Common Equity
Closing and the Effective Date of the Registration Statement covering the resale
of the Registrable Securities issued or issuable at the Common Equity Closing,
if any, prepare and file with the Commission any registration statement under
the Securities Act covering any of its securities other than a registration
statement on Form S-8 or Form S-4.

     

    (d) In the
event that Form S-3 is not available for the registration of the resale of
Registrable Securities hereunder, the Company shall (i)
register the resale of the Registrable Securities on another appropriate form
reasonably acceptable to the Holders, including a registration statement on
Form S-1, and (ii) undertake to register the Registrable Securities on Form
S-3 as soon as such form is available, provided that, subject to
Section 3 hereof, the Company shall maintain the effectiveness of such
Registration Statement that is on a form other than Form S-3 then in effect,
until such time as a Registration Statement on Form S-3 covering the Registrable
Securities has been declared effective by the Commission.

     

    (e) Each
Holder agrees to furnish to the Company a completed Selling Stockholder
Questionnaire not less than three (3) Business Days prior to the Initial Filing
Deadline and not less than three (3) Business Days prior to the filing of any
other Registration Statement.  Each Holder further agrees that it
shall not be entitled to be named as a selling securityholder in a Registration
Statement until such Holder has returned to the Company a completed and signed
Selling Stockholder Questionnaire or use the Prospectus for offers and resales
of Registrable Securities until such Holder is identified as a selling security
holder in an effective Registration Statement.  If a Holder of
Registrable Securities returns a Selling Stockholder Questionnaire after the
deadline specified in this Section 2(e), the Company shall take such actions as
are required to name such Holder as a selling security holder in the applicable
Registration Statement or any pre-effective or post-effective amendment thereto
and to include (to the extent not theretofore included) in such Registration
Statement the Registrable Securities identified in such late Selling Stockholder
Questionnaire. Each Holder acknowledges and agrees that the information in the
Selling Stockholder Questionnaire will be used by the Company in the preparation
of one or more Registration Statements covering such Holder’s Registrable
Securities and hereby consents to the inclusion of such information in such
Registration Statements.

     

    
      
        
        

      

      
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    (f) To the
extent that in accordance with subsection (a) of this Section 2, the Commission
informs the Company that all of the Registrable Securities required to be
included in an Initial Registration Statement cannot, as a result of the
application of Rule 415, be registered for resale as a secondary offering on a
single registration statement, for so long as that continues to be the case, the
following demand provisions shall apply:

     

    1.           If (x) the per share fair
market value (or the per share Closing Bid Price of the Common Stock is quoted
on the NASDAQ Global Market, NYSE or other national stock exchange quotation
system) of the Common Stock has been equal to at least $0.66 for a period of
thirty (30) trading days with an average daily trading volume during such thirty
(30) trading days equal to or greater than two hundred thousand (200,000)
shares, subject to adjustment for any stock dividends, combinations, splits,
recapitalizations and the like, as reported by such exchange, and (y) the
Company shall receive from the Holders of at least a majority of the Registrable
Securities (the “Initiating
Holders”) a written request that the Company file a registration
statement with respect to the Registrable Securities for an underwritten
offering managed by an underwriter of national standing, provided, the
anticipated aggregate offering price of the Registrable Securities requested to
be so registered shall be equal to or exceed $10,000,000 (prior to the deduction
of underwriter discounts or commissions and offering expenses);

     

    then (z) the Company will use
commercially reasonable efforts to:

     

    (A)     within
ten days of the receipt by the Company of such notice, give written notice of
the proposed registration statement to all other Holders of Registrable
Securities; and

     

    (B)     as
soon as practicable thereafter, effect such registration under the Securities
Act as may be so requested and as would permit or facilitate the sale and
distribution of all or such portion of such Registrable Securities as are
specified in such Holders’ request, together with all or such portion of the
Registrable Securities of any Holder or Holders joining in such request as are
specified in written requests received by the Company within ten (10) days after
delivery of such written notice by the Company.

     

    Notwithstanding
the foregoing, the Company shall not be obligated to take any action to effect
any such registration pursuant to this subsection (f) of this Section
2:

     

    (A)     
In any particular jurisdiction in which the Company would be required to qualify
as a foreign corporation, subject itself to taxation in that jurisdiction or
execute a general consent to service of process in effecting such registration,
unless the Company is already subject to service in such jurisdiction and except
as may be required under the Securities Act;

     

    (B)     During
the period starting with the date sixty (60) days prior to the Company’s good
faith estimated date of filing of, and ending on the date six (6) months
immediately following the effective date of, any registration statement
pertaining to securities of the Company (other than a Registration Statement
otherwise filed for the benefit of Holders pursuant to this Agreement or a
registration statement on Form S-8 or Form S-4 or any successor form(s)
thereto), provided that the
Company is actively employing in good faith all commercially reasonable efforts
to cause such registration statement to become effective;

     

    (C)     After
the Company has filed two (2) such registrations pursuant to this subsection (f)
of this Section (2), and such registrations have been declared or ordered
effective;

     

    (D)     If
the Initiating Holders are unable to obtain the commitment of a nationally
recognized underwriter to firmly underwrite the offering; or

     

    
      
        
        

      

      
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    (E)     If
the Company shall furnish to the Initiating Holders a certificate signed by the
Chief Executive Officer of the Company stating that in the good faith judgment
of the Board of Directors it would be seriously detrimental to the Company or
its stockholders for a registration statement to be filed and it is therefore
necessary to defer the filing of such registration statement, then the Company
shall have the right to defer such filing for a period not to exceed 60 days
from the date of receipt of the written request from the Initiating Holders;
provided, however, that the
Company shall not exercise such right more than once in any twelve-month period,
and the Company shall not register any securities for the account of itself or
any other stockholders of the Company during such period (other than a
Registration Statement otherwise filed for the benefit of Holders pursuant to
this Agreement or a registration statement on Form S-8 or Form S-4 or any
successor form(s) thereto).

     

    2.           The
right of any Holder to registration pursuant to this subsection (f) of this
Section 2 shall be conditioned upon such Holder’s participation in the
underwriting arrangements required by this subsection.

     

    3.           The
Company shall (together with all Holders proposing to distribute their
securities through such underwriting) enter into an underwriting agreement in
customary form with the managing underwriter. The managing underwriter shall be
selected by the Company and shall be reasonably acceptable to the Initiating
Holders. Notwithstanding any other provision of this subsection (f) of this
Section 2, if the managing underwriter determines that marketing factors require
a limitation of the number of shares to be underwritten, the managing
underwriter may limit the Registrable Securities  to be distributed through
such underwriting. The Company shall so advise all Holders distributing their
securities through such underwriting of such limitation, and the number of
shares of Registrable Securities that may be included in the registration shall
be allocated among all Holders requesting to include Registrable Securities in
such registration statement based on the pro rata percentage of Registrable
Securities held by such Holders. To facilitate the allocation of shares in
accordance with the above provisions, the Company may round the number of shares
allocated to any Holder or Holders to the nearest 100 shares. In no event shall
the number of Registrable Securities underwritten in such a registration be
limited unless and until all shares held by persons other than the holders of
the Registrable Securities are completely excluded from such
offering.

     

    4.      The
limitation on the number of registrations under this subsection (f) of this
Section 2 shall not apply to any registration in which more than 50% of the
Registrable Securities requested by Holders to be included in such registration
are excluded pursuant to the preceding paragraph.

     

    5.           If
any Holder of Registrable Securities disapproves of the terms of the
underwriting, such Holder may elect to withdraw therefrom by written notice to
the Company, the managing underwriter and the other Holders participating in
such registration statement. The Registrable Securities and/or other securities
so withdrawn shall also be withdrawn from registration.

     

    3.    Registration
Procedures

     

    In
connection with the Company’s registration obligations hereunder, the Company
shall:

     

    (a) Not less
than five (5) Business Days prior to the filing of a Registration Statement and
not less than three (3) Business Days prior to the filing of any related
Prospectus or any amendment or supplement thereto (except for annual reports on
Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K and
any similar or successor reports), the Company shall furnish to the Holder
copies of such Registration Statement, Prospectus or amendment or supplement
thereto, as proposed to be filed, which documents will be subject to the review
of such Holder.  The Company shall permit a single firm of counsel
designated by the Holders of a majority of the Registrable Securities covered by
a Registration Statement to review such Registration Statement and all
amendments and supplements thereto (as well as all requests for acceleration or
effectiveness thereof) and use commercially reasonable best efforts to reflect
in such documents any comments as such counsel may reasonably propose and will
not request acceleration of such Registration Statement without prior notice to
such counsel.  The Company shall not file a Registration Statement or
any related Prospectus or any amendments or supplements thereto to which the
Holders of a majority of the Registrable Securities covered by such Registration
Statement shall reasonably and timely object to in good faith.

     

    
      
        
        

      

      
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    (b) Except in
circumstances contemplated by Sections 3(c) and 4 below, and as provided
therein: (i) prepare and file with the Commission such amendments (including
post-effective amendments) and supplements to each Registration Statement and
the Prospectus used in connection therewith as may be necessary to keep such
Registration Statement continuously effective as to the applicable Registrable
Securities for its Effectiveness Period and prepare and file with the Commission
such Remainder Registration Statements in order to register for resale under the
Securities Act all of the Registrable Securities; (ii) cause the related
Prospectus to be amended or supplemented by any required Prospectus supplement
(subject to the terms of this Agreement), and, as so supplemented or amended, to
be filed pursuant to Rule 424; (iii) respond as promptly as reasonably
practicable to any comments received from the Commission with respect to each
Registration Statement or any amendment thereto and, as promptly as reasonably
possible, provide the Holders true and complete copies of all correspondence
from and to the Commission relating to such Registration Statement but, except
as agreed by a Holder, not any comments that would result in the disclosure to
the Holders of material and non-public information concerning the Company; and
(iv) comply with the provisions of the Securities Act and the Exchange Act with
respect to the disposition of all Registrable Securities covered by a
Registration Statement until such time as all of such Registrable Securities
shall have been disposed of (subject to the terms of this Agreement) in
accordance with the intended methods of disposition by the Holders thereof as
set forth in such Registration Statement as so amended or in such Prospectus as
so supplemented; provided,
however, that each Holder shall be responsible for the delivery of the
Prospectus to the Persons to whom such Holder sells any of the Shares (including
in accordance with Rule 172 under the Securities Act), and each Holder agrees
that sales of Registrable Securities pursuant to a Registration Statement shall
be in compliance with the plan of distribution described in the applicable
Registration Statement and otherwise in compliance with applicable federal and
state securities laws. In the case of amendments and supplements to a
Registration Statement which are required to be filed pursuant to this Agreement
(including pursuant to this Section 3(b)) by reason of the Company filing a
report on Form 10-K, Form 10-Q or Form 8-K or any analogous report under the
Exchange Act, the Company shall have incorporated such report by reference into
such Registration Statement, if applicable, or shall file such amendments or
supplements with the Commission on the same day on which the Exchange Act report
which created the requirement for the Company to amend or supplement such
Registration Statement was filed.

     

    (c) Notify
the Holders (which notice shall, pursuant to clauses (iii) through (v) hereof,
be accompanied by an instruction to suspend the use of the Prospectus until the
requisite changes have been made) as promptly as reasonably possible (and, in
the case of (i)(A) below, not less than three (3) Business Days prior to such
filing, in the case of (iii) and (iv) below, not more than one (1) Business Day
after such issuance or receipt, and in the case of (v) below, not less than one
(1) Business Day after a determination by the Company that the financial
statements in any Registration Statement have become ineligible for inclusion
therein) and (if requested by any such Person) confirm such notice in writing no
later than one Business Day following the day (i)(A) when a Prospectus or any
Prospectus supplement or post-effective amendment to a Registration Statement is
proposed to be filed; (B) when the Commission notifies the Company whether there
will be a “review” of such Registration Statement and whenever the Commission
comments in writing on any Registration Statement (in which case the Company
shall provide to each of the Holders true and complete copies of all comments
that pertain to the Holders as a “Selling Stockholder” or to the “Plan of
Distribution” and all written responses thereto, but not 

     

    
      
        
        

      

      
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    information
that the Company believes would constitute material and non-public information);
and (C) with respect to each Registration Statement or any post-effective
amendment, when the same has become effective; (ii) of any request by the
Commission or any other Federal or state governmental authority for amendments
or supplements to a Registration Statement or Prospectus or for additional
information that pertains to the Holders as “Selling Stockholders” or the “Plan
of Distribution”; (iii) of the issuance by the Commission or any other federal
or state governmental authority of any stop order suspending the effectiveness
of a Registration Statement covering any or all of the Registrable Securities or
the initiation of any Proceedings for that purpose; (iv) of the receipt by the
Company of any notification with respect to the suspension of the qualification
or exemption from qualification of any of the Registrable Securities for sale in
any jurisdiction, or the initiation or threatening of any Proceeding for such
purpose; and (v) of the occurrence of any event or passage of time that makes
the financial statements included in a Registration Statement ineligible for
inclusion therein or any statement made in such Registration Statement or
Prospectus or any document incorporated or deemed to be incorporated therein by
reference untrue in any material respect or that requires any revisions to such
Registration Statement, Prospectus or other documents so that, in the case of
such Registration Statement or the Prospectus, as the case may be, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
(in the case of any Prospectus, form of prospectus or supplement thereto, in
light of the circumstances under which they were made), not misleading, provided that any and all of
such information shall remain confidential to each Holder until such information
otherwise becomes public (other than disclosure to a Holder’s managers,
employees, agents, affiliates, accountants, attorneys and advisors, provided
such other party agrees to maintain the confidentiality of such information),
unless disclosure by a Holder is required by law; provided, further, that notwithstanding
each Holder’s agreement to keep such information confidential, the Holders make
no acknowledgement that any such information is material, non-public
information.

     

    (d) Use
commercially reasonable best efforts to avoid the issuance of, or, if issued,
obtain the withdrawal of (i) any order suspending the effectiveness of a
Registration Statement, or (ii) any suspension of the qualification (or
exemption from qualification) of any of the Registrable Securities for sale in
any jurisdiction, as soon as practicable.

     

    (e) If
requested by a Holder, furnish to such Holder, without charge, at least one
conformed copy of each Registration Statement and each amendment thereto and all
exhibits to the extent requested by such Holder (including those previously
furnished or incorporated by reference) promptly after the filing of such
documents with the Commission; provided, that the Company
shall have no obligation to provide any document pursuant to this clause that is
available on the Commission’s EDGAR or similar system.

     

    (f) Prior to
any resale of Registrable Securities by a Holder, register or qualify, or
cooperate with the selling Holders in connection with the registration or
qualification, unless an exemption from registration and qualification applies,
the Registrable Securities for offer and sale under the securities or “blue sky”
laws of such jurisdictions within the United States as any Holder reasonably
requests in writing, to keep each such registration or qualification (or
exemption therefrom) effective during any Effectiveness Period and to do any and
all other acts or things reasonably necessary to enable the disposition in such
jurisdictions of the Registrable Securities covered by the Registration
Statements, provided,
that the Company shall not be required to qualify generally to do
business in any jurisdiction where it is not then so qualified or to take any
action that would subject the Company to general service of process in any
jurisdiction where it is not then so subject or subject the Company to any
material tax in any such jurisdiction where it is not then so
subject.

     

    (g) If
requested by the Holders, cooperate with the Holders to facilitate the timely
preparation and delivery of certificates representing Registrable Securities to
be delivered to a transferee pursuant to any Registration Statement, which
certificates shall be free, to the extent permitted by the Purchase Agreement
and under law, of all restrictive legends, and to enable such Registrable
Securities to be in such denominations and registered in such names as any such
Holders may reasonably request.

     

    
      
        
        

      

      
        9.

        
          

        

      

      
        
        

      

    

    (h) Following
the occurrence of any event contemplated by Section 3(c)(iii) through (v), as
promptly as reasonably practicable, prepare a supplement or amendment, including
a post-effective amendment, to the affected Registration Statement(s) or a
supplement to the related Prospectus or any document incorporated or deemed to
be incorporated therein by reference, and file any other required document so
that, as thereafter delivered, no Registration Statement nor any Prospectus will
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein (in
the case of any Prospectus, form of prospectus or supplement thereto, in light
of the circumstances under which they were made), not misleading.

     

    (i) (i) In
the time and manner required by the Principal Trading Market, prepare and file
with such Principal Trading Market an additional shares listing application
covering all of the Registrable Securities, (ii) use commercially reasonable
best efforts to take all steps necessary to cause such Registrable Securities to
be approved for listing on the Principal Trading Market as soon as possible
thereafter, (iii) if requested by any Holder, provide such Holder evidence of
such listing, and (iv) during each Effectiveness Period, use commercially
reasonable best efforts to maintain the listing of such Registrable Securities
on the Principal Trading Market.

     

    (j) In order
to enable the Holders to sell Shares under Rule 144, for a period commencing on
the date hereof until five (5) years after the date hereof, the Company
covenants to timely file (or obtain extensions in respect thereof and file
within the applicable grace period) all reports required to be filed by the
Company after the date hereof pursuant to Section 13(a) or 15(d) of the Exchange
Act. During such period, if the Company is not required to file reports pursuant
to Section 13(a) or 15(d) of the Exchange Act, it will prepare and furnish to
the Holders and make publicly available in accordance with Rule 144(c)
promulgated under the Securities Act annual and quarterly financial statements,
together with a discussion and analysis of such financial statements in form and
substance substantially similar to those that would otherwise be required to be
included in reports required by Section 13(a) or 15(d) of the Exchange Act, as
well as any other information required thereby, in the time period that such
filings would have been required to have been made under the Exchange Act. The
Company further covenants that it will take such further action as any Holder
may reasonably request, all to the extent required from time to time to enable
such Person to sell Shares without registration under the Securities Act within
the limitation of the exemptions provided by Rule 144 promulgated under the
Securities Act.  The Company agrees to furnish to the Holders so long
as the Holders own Registrable Securities, promptly upon request, (i) a written
statement by the Company that it has complied with the reporting requirements of
the Securities Act and the Exchange Act as required for applicable provisions of
Rule 144, (ii) a copy of the most recent annual or quarterly report of the
Company and such other reports and documents so filed by the Company, and (iii)
such other information as may be reasonably requested to permit the Holders to
sell such securities pursuant to Rule 144 without registration.

     

    (k) The
Company may require each selling Holder to furnish to the Company a certified
statement as to (i) the number of shares of Common Stock beneficially owned by
such Holder and any Affiliate thereof, (ii) any FINRA affiliations required to
be disclosed in Registration Statement or with respect to offerings thereof,
(iii) if required by the Commission, any natural persons who have the power to
vote or dispose of the Common Stock and (iv) any other information as may be
requested by the Commission, FINRA or any state securities commission. During
any periods that the Company is unable to meet its obligations hereunder with
respect to the registration of Registrable Securities because any Holder fails
to furnish such information within three (3) Business Days of the Company’s
request, any Event that may otherwise occur solely because of such delay shall
be suspended as to such Holder only, until such information is delivered to the
Company.

     

    
      
        
        

      

      
        10.

        
          

        

      

      
        
        

      

    

    (l) The
Company shall hold in confidence and not make any disclosure of information
concerning a Holder provided to the Company unless (i) disclosure of such
information is reasonably believed to be necessary to comply with federal or
state securities laws or the rules of any securities exchange or trading market
on which the Company’s securities are then listed or traded, (ii) the disclosure
of such information is reasonably believed to be necessary to avoid or correct a
misstatement or omission in any Registration Statement, (iii) the release of
such information is ordered pursuant to a subpoena or other order from a court
or governmental body of competent jurisdiction, or (iv) such information has
been made generally available to the public other than by disclosure in
violation of this or any other agreement. The Company agrees that it shall, upon
learning that disclosure of such information concerning a Holder is sought in or
by a court or governmental body of competent jurisdiction or through other
means, give prompt notice to such Holder prior to making such disclosure, and
allow such Holder, at its expense, to undertake appropriate action to prevent
disclosure of, or to obtain a protective order for, such
information.

     

    (m) The
Company shall cooperate with each Holder who holds Registrable Securities being
offered and the managing underwriter or underwriters as reasonably requested by
them with respect to an applicable Registration Statement, if any, to facilitate
the timely preparation and delivery of certificates (not bearing any restrictive
legends) representing Registrable Securities to be offered pursuant to such
Registration Statement and enable such certificates to be in such denominations
or amounts, as the case may be, as the managing underwriter or underwriters, if
any, or a Holder may reasonably request and registered in such names as the
managing underwriter or underwriters, if any, or a Holder may request, and,
within three (3) Business Days after a Registration Statement which includes
Registrable Securities is ordered effective by the Commission, the Company shall
deliver, and shall cause legal counsel selected by the Company to deliver, to
the transfer agent for the Registrable Securities (with copies to each Holder)
an appropriate instruction and an opinion of such counsel in the form required
by the transfer agent in order to issue such Registrable Securities free of
restrictive legends upon the resale of such Registrable Securities pursuant to
such Registration Statement.

     

    (n) At the
reasonable request of a Holder, the Company shall prepare and file with the
Commission such amendments (including post-effective amendments) and supplements
to a Registration Statement and any prospectus used in connection with the
Registration Statement as may be necessary in order to change the plan of
distribution set forth in such Registration Statement.  The Company
shall take all other reasonable actions necessary to expedite and facilitate
disposition by the Holders of Registrable Securities pursuant to a Registration
Statement.

     

    (o) The
Company shall use commercially reasonable best efforts to comply with all
applicable laws related to a Registration Statement and offering and sale of
securities and all applicable rules and regulations of governmental authorities
in connection therewith (including without limitation the Securities Act and the
Exchange Act and the rules and regulations promulgated by the
Commission).

     

    (p) If
required by the FINRA Corporate Financing Department or any similar entity, the
Company shall promptly effect a filing with FINRA pursuant to FINRA Rule 5110
with respect to the public offering contemplated by resales of securities under
the Registration Statement (an “Issuer
Filing”), and pay the filing fee required by such Issuer Filing. The
Company shall use commercially reasonable best efforts to pursue the Issuer
Filing until FINRA issues a letter confirming that it does not object to the
terms of the offering contemplated by the Registration Statement.

     

    4.    Holder
Covenants.

     

    (a) Suspension of
Trading. At any time after the Registrable Securities are covered by an
effective Registration Statement, the Company may deliver to the Holders of such
Registrable Securities a certificate (the “Suspension
Certificate”) approved by the Chief Executive Officer or Chief Financial
Officer of the Company and signed by an officer of the Company stating that
sales of Registrable Securities under the applicable Registration Statement
would:

     

    
      
        
        

      

      
        11.

        
          

        

      

      
        
        

      

    

    1. materially
interfere with the consummation of any transaction that would require the
Company to prepare financial statements under the Securities Act that the
Company would otherwise not be required to prepare in order to comply with its
obligations under the Exchange Act, or

     

    2. require
public disclosure of a material transaction or event prior to the time such
disclosure might otherwise be required.

     

    Upon
receipt of a Suspension Certificate by Holders of Registrable Securities, such
Holders of Registrable Securities shall refrain from selling or otherwise
transferring or disposing of any Registrable Securities then held by such
Holders pursuant to a Registration Statement for a specified period of time (a
“Suspension
Period”) that is customary under the circumstances (not to exceed ten
(10) Trading Days). Notwithstanding the foregoing sentence, the Company shall be
permitted to cause Holders of Registrable Securities to so refrain from selling
or otherwise transferring or disposing of any Registrable Securities pursuant to
a Registration Statement on only two (2) occasions during each six (6)
consecutive month period that such Registration Statement remains effective. The
Company may impose stop transfer instructions to enforce any required agreement
of the Holders under this Section 4(a).

     

    (b) Discontinued
Disposition.  Each Holder agrees by its acquisition of
Registrable Securities that, upon receipt of a notice from the Company of the
occurrence of any event of the kind described in Section 3(c)(iii)-(v), such
Holder will forthwith discontinue disposition of such Registrable Securities
under the applicable Registration Statement until it is advised in writing (the
“Advice”)
by the Company that the use of the applicable Prospectus (as it may have been
supplemented or amended) may be resumed.  The Company may provide
appropriate stop orders to enforce the provisions of this Section
4(b).  The Company will use its commercially reasonable best efforts
to ensure that the use of the Prospectus may be resumed as promptly as is
practicable.

     

    5.    Registration
Expenses.  All fees and expenses incident to the Company’s
performance of or compliance with its obligations under this Agreement shall be
borne by the Company whether or not any Registrable Securities are sold pursuant
to a Registration Statement.  The fees and expenses to be borne by the
Company referred to in the foregoing sentence shall include, without limitation,
(i) all registration and filing fees (including, without limitation, fees and
expenses (A) with respect to filings required to be made with any Principal
Trading Market on which the Common Stock of the Company is then listed for
trading, (B) with respect to compliance with applicable state securities or
“blue sky” laws (including, without limitation, fees and disbursements of
counsel for the Company in connection with “blue sky” qualifications or
exemptions of the Registrable Securities and determination of the eligibility of
the Registrable Securities for investment under the laws of such jurisdictions
as requested by the Holders) and (C) with respect to any filing that may be
required to be made by any broker through which a Holder intends to make sales
of Registrable Securities with FINRA pursuant to FINRA Rule 5110 or similar
rules, (ii) printing expenses (including, without limitation, expenses of
printing certificates for Registrable Securities and of printing prospectuses if
the printing of prospectuses is reasonably requested by the Holders of a
majority of the Registrable Securities included in the applicable Registration
Statement), (iii) messenger, telephone and delivery expenses, (iv) fees and
disbursements of counsel for the Company, (v) reasonable fees and disbursements
of one (1) counsel selected by the Holders of a majority of the Registrable
Securities then being registered (such fees and disbursements not to exceed
$100,000 with respect to a registration statement pursuant to subsection (f) of
Section 2 of this Agreement, $40,000 with respect to the Initial Registration
Statement and $20,000 with respect to any other Registration Statement filed
pursuant to this Agreement), (vi) Securities Act liability insurance, if the
Company so desires such insurance, and (vii) fees and expenses of all other
Persons retained by the Company in connection with the consummation of the
transactions contemplated by this Agreement, 

     

    
      
        
        

      

      
        12.

        
          

        

      

      
        
        

      

    

    including
but not limited to fees and expenses of the Company’s independent registered
public accounting firm. In addition, the Company shall be responsible for all of
its internal expenses incurred in connection with the consummation of the
transactions contemplated by this Agreement (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit and the fees and expenses
incurred in connection with the listing of the Registrable Securities on any
securities exchange as required hereunder. In no event shall the Company be
responsible for any underwriting, broker or similar fees or commissions of any
Holder or, except to the extent provided above or otherwise in any Transaction
Document, any legal fees or other costs of the Holders.

     

    6.    Indemnification.

     

    (a) Indemnification by the
Company.  The Company shall, notwithstanding any termination of
this Agreement, indemnify, defend and hold harmless each Holder, the officers,
directors, agents, partners, members, managers, stockholders, Affiliates and
employees of each of them, each Person who controls any such Holder (within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act)
and the officers, directors, partners, members, managers, stockholders, agents
and employees of each such controlling Person, to the fullest extent permitted
by applicable law, from and against any and all losses, claims, damages,
liabilities, costs (including, without limitation, reasonable costs of
preparation and investigation and reasonable attorneys’ fees) and expenses (each
a “Loss” and
collectively, “Losses”),
as incurred, that arise out of or are based upon: (i) any untrue statement or
alleged untrue statement of a material fact in a Registration Statement or the
omission or alleged omission to state therein a material fact required to be
stated or necessary to make the statements therein not misleading; (ii) any
untrue statement or alleged untrue statement of a material fact contained in any
preliminary Prospectus if used prior to the effective date of such Registration
Statement, or contained in the final Prospectus (as amended or supplemented, if
the Company files any amendment thereof or supplement thereto with the
Commission) or the omission or alleged omission to state therein any material
fact necessary to make the statements made therein, in light of the
circumstances under which the statements therein were made, not misleading; or
(iii) any violation or alleged violation by the Company of the Securities Act,
the Exchange Act, any state securities law, any “blue sky” laws of any
jurisdiction in which Registrable Securities are offered, or any rule or
regulation thereunder relating to the offer or sale of the Registrable
Securities (the matters in the foregoing clauses (i) through (iii) being,
collectively, “Violations”),
except to the extent, but only to the extent, that (A) such untrue statements,
alleged untrue statements, omissions or alleged omissions are based upon
information regarding such Holder furnished in writing to the Company by such
Holder expressly for use therein, or to the extent that such information relates
to such Holder or such Holder’s proposed method of distribution of Registrable
Securities and was reviewed and approved by such Holder expressly for use in the
applicable Registration Statement, such Prospectus or such form of Prospectus or
in any amendment or supplement thereto, or (B) in the case of an occurrence of
an event of the type specified in Section 3(c)(iii)-(v), related to the use by a
Holder of an outdated or defective Prospectus in a transaction the order for
which was placed after the Company has notified such Holder in writing that the
Prospectus is outdated or defective and prior to the receipt by such Holder of
the Advice, but only if and to the extent that following the receipt of Advice
the misstatement or omission giving rise to such Loss would have been
corrected.  The Company shall notify the Holders promptly of the
institution, threat or assertion of any Proceeding arising from or in connection
with the transactions contemplated by this Agreement of which the Company is
aware.  Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of an Indemnified Party (as
defined in Section 6(c)) and shall survive the transfer of the Registrable
Securities by the Holders.

     

    
      
        
        

      

      
        13.

        
          

        

      

      
        
        

      

    

    (b) Indemnification by
Holders. Each Holder shall, notwithstanding any termination of this
Agreement, severally and not jointly, indemnify and hold harmless the Company,
its directors, officers, agents and employees, each Person who controls the
Company (within the meaning of Section 15 of the Securities Act and Section 20
of the Exchange Act), and the directors, officers, agents or employees of such
controlling Persons, to the fullest extent permitted by applicable law, from and
against all Losses, as incurred, arising out of or are based upon any untrue or
alleged untrue statement of a material fact contained in any Registration
Statement, any Prospectus, or any form of prospectus, or in any amendment or
supplement thereto or in any preliminary prospectus, or arising out of or
relating to any omission or alleged omission of a material fact required to be
stated therein or necessary to make the statements therein (in the case of any
Prospectus, or any form of prospectus or supplement thereto, in light of the
circumstances under which they were made) not misleading (i) to the extent, but
only to the extent that, such untrue statements or omissions are based solely
upon information regarding such Holder furnished in writing to the Company by
such Holder expressly for use therein, (ii) to the extent that such information
relates to such Holder or such Holder’s proposed method of distribution of
Registrable Securities and was reviewed and approved by such Holder expressly
for use in the applicable Registration Statement, such Prospectus or such form
of Prospectus or in any amendment or supplement thereto or (iii) in the case of
an occurrence of an event of the type specified in Section 3(c)(iii)-(v), to the
extent related to the use by such Holder of an outdated or defective Prospectus
after the Company has notified such Holder in writing that the Prospectus is
outdated or defective and prior to the receipt by such Holder of the
Advice.  In no event shall the liability of any selling Holder
hereunder be greater in amount than the dollar amount of the net proceeds
received by such Holder upon the sale of the Registrable Securities giving rise
to such indemnification obligation.

     

    (c) Conduct of Indemnification
Proceedings. If any Proceeding shall be brought or asserted against any
Person entitled to indemnity hereunder (an “Indemnified
Party”), such Indemnified Party shall promptly notify the Person from
whom indemnity is sought (the “Indemnifying
Party”) in writing, and the Indemnifying Party shall have the right to
assume the defense thereof, including the employment of counsel reasonably
satisfactory to the Indemnified Party and the payment of all reasonable fees and
expenses incurred in connection with defense thereof; provided, that the failure of
any Indemnified Party to give such notice shall not relieve the Indemnifying
Party of its obligations or liabilities pursuant to this Agreement, except (and
only) to the extent that such failure shall have materially and adversely
prejudiced the Indemnifying Party.

     

    An
Indemnified Party shall have the right to employ separate counsel in any such
Proceeding and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party or Parties
unless:  (1) the Indemnifying Party has agreed in writing to pay such
fees and expenses; (2) the Indemnifying Party shall have failed promptly to
assume the defense of such Proceeding and to employ counsel reasonably
satisfactory to such Indemnified Party in any such Proceeding; or (3) the named
parties to any such Proceeding (including any impleaded parties) include both
such Indemnified Party and the Indemnifying Party, and such Indemnified Party
shall have been advised by counsel that a conflict of interest exists or may
arise if the same counsel were to represent such Indemnified Party and the
Indemnifying Party (in which case, if such Indemnified Party notifies the
Indemnifying Party in writing that it elects to employ separate counsel at the
expense of the Indemnifying Party, the Indemnifying Party shall not have the
right to assume the defense thereof and such counsel shall be at the expense of
the Indemnifying Party), provided that the
Indemnifying Party shall not be liable for the fees and expenses of more than
one separate firm of attorneys at any time for all Indemnified Parties except to
the extent that an Indemnified Party shall have been advised by counsel that a
conflict of interest exists or may arise if the same counsel were to represent
such Indemnified Party and another Indemnified Party.  The
Indemnifying Party shall not be liable for any settlement of any such Proceeding
effected without its written consent, which consent shall not be unreasonably
withheld, delayed or conditioned.  No Indemnifying Party shall,
without the prior written consent of the Indemnified Party, effect any
settlement of any pending Proceeding in respect of which any Indemnified Party
is a party, unless such settlement includes an unconditional release of such
Indemnified Party from all liability on claims that are the subject matter of
such Proceeding.

     

    
      
        
        

      

      
        14.

        
          

        

      

      
        
        

      

    

    Subject
to the terms of this Agreement, all fees and expenses of the Indemnified Party
(including reasonable fees and expenses to the extent incurred in connection
with investigating or preparing to defend such Proceeding in a manner not
inconsistent with this Section) shall be paid to the Indemnified Party, as
incurred, within twenty (20) Business Days of written notice thereof to the
Indemnifying Party; provided, that the
Indemnified Party shall promptly reimburse the Indemnifying Party for that
portion of such fees and expenses applicable to such actions for which such
Indemnified Party is finally judicially determined to not be entitled to
indemnification hereunder). The failure to deliver written notice to the
Indemnifying Party within a reasonable time of the commencement of any such
action shall not relieve such Indemnifying Party of any liability to the
Indemnified Party under this Section 6, except to the extent that the
Indemnifying Party is prejudiced in its ability to defend such
action.

     

    (d) Contribution.  If
a claim for indemnification under Section 6(a) or 6(b) is unavailable to an
Indemnified Party (by reason of public policy or otherwise), then each
Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such Losses, in such proportion as is appropriate to reflect the relative
fault of the Indemnifying Party and Indemnified Party in connection with the
actions, statements or omissions that resulted in such Losses as well as any
other relevant equitable considerations.  The relative fault of such
Indemnifying Party and Indemnified Party shall be determined by reference to,
among other things, whether any action in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged omission of a
material fact, has been taken or made by, or relates to information supplied by,
such Indemnifying Party or Indemnified Party, and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such
action, statement or omission.  The amount paid or payable by a party
as a result of any Losses shall be deemed to include, subject to the limitations
set forth in this Agreement, any reasonable attorneys’ or other reasonable fees
or expenses incurred by such party in connection with any Proceeding to the
extent such party would have been indemnified for such fees or expenses if the
indemnification provided for in this Section was available to such party in
accordance with its terms.

     

    The
parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 6(d) were determined by pro rata allocation or by any
other method of allocation that does not take into account the equitable
considerations referred to in the immediately preceding
paragraph.  Notwithstanding the provisions of this Section 6(d), (A)
no Holder shall be required to contribute, in the aggregate, any amount in
excess of the amount by which the net proceeds actually received by such Holder
from the sale of the Registrable Securities subject to the Proceeding exceeds
the amount of any damages that such Holder has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission and (B) no contribution will be made under circumstances where the
maker of such contribution would not have been required to indemnify the
Indemnified Party under the fault standards set forth in this Section
6.  No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation.

     

    The
indemnity and contribution agreements contained in this Section are in addition
to any liability that the Indemnifying Parties may have to the Indemnified
Parties and are not in diminution or limitation of the indemnification
provisions under the Purchase Agreement.

     

    
      
        
        

      

      
        15.

        
          

        

      

      
        
        

      

    

    7.    Other
Agreements.

     

    (a)    Preemptive
Rights.

     

    1. Commencing
from and after the First Unit Closing, and for so long as at least 250,000 Unit
Shares remain outstanding, and subject to applicable securities laws, each
Investor that holds Unit Shares shall have a right of first refusal to purchase
its Pro Rata Share of all Common Stock Equivalents that the Company may, from
time to time, propose to sell and issue, other than Excluded
Securities.  Each Investor’s ”Pro Rata
Share” is equal to the ratio of (A) the number of outstanding Unit
Shares of which such Investor is a beneficial owner immediately prior to the
issuance of such Common Stock Equivalents to (B) the total number of
outstanding shares of Capital Stock of the Company immediately prior to the
issuance of the Common Stock Equivalents.

     

    2. If the
Company proposes to issue any Common Stock Equivalents, it shall give each
Investor known to
the Company to continue to beneficially own Unit Shares written notice of its
intention, describing the Common Stock Equivalents, the price and the terms and
conditions upon which the Company proposes to issue the same (the “Company
Notice”).  Each Investor shall have ten (10)
Business Days from the giving of the Company Notice to agree to purchase its Pro
Rata Share of the Common Stock Equivalents (except as provided above) for the
price and upon the terms and conditions specified in the Company Notice by
giving written notice to the Company and stating therein the quantity of Unit
Shares beneficially owned by such Investor and the quantity of Common Stock
Equivalents elected to be purchased, up to its Pro Rata
Share.  Notwithstanding the foregoing, the Company shall not be
required to offer or sell such Common Stock Equivalents to any Investor who would cause the
Company to be in violation of applicable federal securities laws by virtue of
such offer or sale.

     

    3. If not
all of the Purchasers elect to purchase their Pro Rata Share of the available
Common Stock Equivalents, then the Company shall promptly notify in writing the
Purchasers who do so elect and shall offer such Purchasers the right to acquire,
on a pro rata basis, such non-participating Purchaser or Purchasers’ Pro Rata
Share(s).  Each such Purchaser shall have five (5) Business Days after
receipt of such notice to notify the Company of its election to purchase all or
a portion of the unsubscribed shares.  The Company shall have sixty
(60) days thereafter to sell the Common Stock Equivalents in respect of which
the Investors’ rights were not exercised, at a price not lower and upon general
terms and conditions not materially more favorable to the purchasers thereof
than specified in the Company’s Notice.  If the Company has not sold
such Common Stock Equivalents within such sixty (60) day period, the Company
shall not thereafter issue or sell any Common Stock Equivalents, without first
offering such securities to the Investors in the manner provided
above.

     

    (b)    Board of
Directors.

     

    1. From and
after the First Unit Closing, subject to Section 7(b)(2) and 7(b)(6) below, the
Company shall take all appropriate action to establish and maintain the size of
the Board at eight (8) members, three (3) of which shall be designated in
writing by the Investors holding a majority-in-interest of the then outstanding
Registrable Securities (the “Majority
Investors”) to be nominated by the Company to serve as a member of the
Board (each, an “Investor
Designee”). Alta BioPharma Partners III, L.P. (“Alta
Partners”), Bay City Capital L.P. (“Bay City
Capital”) and New Enterprise Associates (“NEA”),
together with their respective affiliates, shall each have the right to
designate one (1) such Investor Designee. From and after the First Unit Closing,
Nextech Venture, together with its affiliates (“Nextech”),
will be entitled to designate an observer to attend each meeting or meetings of
the Board, subject to customary limitations.

     

    
      
        
        

      

      
        16.

        
          

        

      

      
        
        

      

    

    2. Subject
to Section 7(b)(6) below, from and after the earlier to occur of (i) the
Second Unit Closing, (ii) the Common Equity Closing and (iii) the closing of an
Alternative Common Stock Financing in which the Investors exercise preemptive
rights pursuant to the terms of this Agreement and, as a result, beneficially
own greater than a majority of the Company’s voting stock as of such closing,
the Company shall take all appropriate action to promptly establish and maintain
the size of the Board at nine (9) members, five (5) of which shall be Investor
Designees and nominated in accordance with the provisions of this Section
7(b).  Alta Partners, Bay City Capital, NEA and Nextech, together with
their respective affiliates, shall each have the right to designate one (1) such
Investor Designee.  On or prior to January 20 of each year in which
the Majority Investors have rights pursuant to this Section 7(b) (assuming the
Company has made a request therefor at least five (5) Trading Days prior
thereto), and within five (5) Trading Days of the request by the Company in
connection with the preparation of a proxy statement with respect to the
election of members of the Board or a vacancy created on the Board by the
resignation, death or disability of an Investor Designee or the failure of
an Investor Designee to be elected at a meeting of the Company at any time
at which the Majority Investors have rights pursuant to this Section 7(b), each
Investor shall notify the Company of the number of voting shares of the
Company’s capital stock beneficially owned by such Investor as of a date within
five (5) Trading Days of the delivery of such notice.

     

    3. The
Company (including any appropriate committee thereof) shall nominate the
Investor Designees for election (in case of the initial election of an
Investor Designee) or re-election (including, in the case of the end of the
term of an Investor Designee), as applicable, as a director of the Company
as part of the slate proposed by the Company that is included in the proxy
statement (or consent solicitation or similar document) of the Company relating
to the election of its directors, and shall provide the same level of support
for each Investor Designee as it provides to other members of the Board or other
persons standing for election as a director of the Company as part of a slate
proposed by the Company, subject to Section 7(b)(6) below.  In the
event that a vacancy is created on the Board at any time by the resignation,
death or disability of an Investor Designee, or the failure of an
Investor Designee to be elected at a meeting of the Company, a majority of
the Investor Designees may designate another person as Investor Designee to fill
the vacancy created thereby, and the Company hereby agrees to take, at any time
and from time to time, all actions necessary to fill the vacancy as provided in
the foregoing, subject to Section 7(b)(6) below.

     

    4. The
Company shall provide each Investor Designee with all notices, minutes,
consents and other materials, financial or otherwise, which the Company provides
to the other members of the Board and committees thereof in their capacity as
such.  Subject to Section 7(b)(6) below, an Investor Designee shall be
a member of each committee of the Board, and Investor Designees shall represent
a majority of the Compensation Committee of the Board, which shall consist of no
more than three (3) members, subject to applicable law and the rules and
regulations of the Commission and the Principal Trading Market.

     

    5. The
Company shall reimburse each Investor Designee for his or her out-of-pocket
expenses incurred in connection with his or her participation as a member of the
Board, in a manner consistent with the Company’s policies for reimbursing such
expenses of the members of the Board. In addition, the Company shall pay each
Investor Designee, in his or her capacity as a non-employee member of the Board,
the same compensation as to which all non-employee members of the Board are
entitled, in their capacity as such, subject to compliance with applicable law.
The Company shall indemnify each Investor Designee to the same extent it
indemnifies its other directors pursuant to its organizational documents and
applicable law.

     

    6. Notwithstanding
the foregoing, at any time at which the Company is subject to the NASDAQ Voting
Rights Rule and Policy, as currently set forth in NASDAQ Rule 4351 and IM-4351,
and applicable rules, or any related or successor regulations or amendments
thereto, the
aggregate number of Investor Designees may be reduced, in the sole discretion of
the Company, to the extent such reduction is required by such policy, rules and
regulations.  In the event of any such reduction, each of Alta
Partners, Bay City Capital and NEA shall retain its designation right so long as
at least three (3) Investor Designees are permitted and such entity or its
affiliates continue to beneficially own Shares, and Alta Partners, Bay City
Capital and NEA shall mutually determine the appropriate Investor Designees in
the event that less than three (3) Investor Designees are
permitted.  The number of Investor Designees that the Investors shall
have the right to designate shall also be adjusted to the extent otherwise
required by applicable law and the rules and regulations of the Commission and
the Principal Trading Market.

     

    
      
        
        

      

      
        17.

        
          

        

      

      
        
        

      

    

    8.    Miscellaneous.

     

    (a) Remedies.  In
the event of a breach by the Company or by an Investor of any of their
obligations under this Agreement, each Investor or the Company, as the case may
be, in addition to being entitled to exercise all rights granted by law and
under this Agreement, including recovery of damages, will be entitled to
specific performance of its rights under this Agreement.  The Company
and each Investor agree that monetary damages would not provide adequate
compensation for any losses incurred by reason of a breach by it of any of the
provisions of this Agreement and hereby further agrees that, in the event of any
action for specific performance in respect of such breach, it shall waive the
defense that a remedy at law would be adequate.

     

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

     

    (c) Amendments and
Waivers.  The provisions of Sections 2 through 6 and 8 of this
Agreement, including definitions in Section 1 with respect to such sections, may
not be amended, modified, supplemented or waived unless the same shall be in
writing and signed by the Company and the Majority Investors.  The
provisions of Section 7(a) of this Agreement, including the definitions in
Section 1 and the provisions of this sentence with respect to such section, may
not be amended, modified, supplemented or waived unless the same shall be in
writing and signed by the Company and the Investors holding a
majority-in-interest of the Registrable Securities to which such amendment,
modification, supplement or waiver relates.  The provisions of Section
7(b) of this Agreement, including the definitions in Section 1 and the
provisions of this sentence with respect to such section, may not be amended,
modified, supplemented or waived unless the same shall be in writing and signed
by the Company, the Majority Investors, Alta Partners, Bay City Capital, NEA and
Nextech.  Notwithstanding the foregoing, a waiver or consent to depart
from the provisions hereof with respect to a matter that relates exclusively to
the rights of Holders and that does not directly or indirectly affect the rights
of other Holders may be given by all Holders to which such waiver or consent
relates; provided,
however, that the
provisions of this sentence may not be amended, modified or supplemented except
in accordance with the provisions of the first sentence of this Section 8(c).
Each Holder acknowledges that, except with respect to Sections 7(a) and 7(b) of
this Agreement (which require the consent of the Investors holding a
majority-in-interest of the Registrable Securities to which an amendment,
modification, supplement or waiver relates and the consent of Majority
Investors, Alta Partners, Bay City Capital, NEA and Nextech, respectively, to
bind all of the Investors), including the definitions in Section 1 and the
provisions of this section with respect to such sections, the Majority Investors
have the power to bind all of the Investors.

     

    (d) Term.  The
registration rights provided to the Holders of Registrable Securities hereunder,
and the Company’s obligation to keep the Registration Statements effective,
shall terminate at such time as there are no Registrable
Securities.  Notwithstanding the foregoing, Section 5, Section 6,
Section 7 and Section 8 shall survive the termination of this
Agreement.

     

    
      
        
        

      

      
        18.

        
          

        

      

      
        
        

      

    

    (e) Notices.  Any
and all notices or other communications or deliveries required or permitted to
be provided hereunder shall be delivered as set forth in the Purchase
Agreement.

     

    (f) Successors and
Assigns.  This Agreement shall inure to the benefit of and be
binding upon the successors and permitted assigns of each of the parties and
shall inure to the benefit of each Investor.  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.  The Company may not
assign its rights or obligations under Sections 2 through 6 hereof without the
prior written consent of the Majority Investors.  The Company may not
assign its rights or obligations under Section 7(a) of this Agreement, including
the definitions in Section 1 and the provisions of this sentence with respect to
such section, without the prior written consent of a majority of the Investors
with rights under such Section.  The Company may not assign its rights
or obligations under Section 7(b) of this Agreement, including the definitions
in Section 1 and the provisions of this sentence with respect to such section,
without the prior written consent of the Majority Investors and each of Alta
Partners, Bay City Capital, NEA and Nextech. The rights of the Investors
hereunder, including the right to have the Company register Registrable
Securities pursuant to this Agreement, may be assigned by each Investor to
transferees or assignees of all or any portion of the Registrable Securities,
but only if (i) the Investor agrees in writing with the transferee or assignee
to assign such rights and related obligations under this Agreement, and for the
transferee or assignee to assume such obligations, and a copy of such agreement
is furnished to the Company within a reasonable time after such assignment, (ii)
the Company is, within a reasonable time after such transfer or assignment,
furnished with written notice of the name and address of such transferee or
assignee and the securities with respect to which such registration rights are
being transferred or assigned, (iii) at or before the time the Company received
the written notice contemplated by clause (ii) of this sentence, the transferee
or assignee agrees in writing with the Company to be bound by all of the
provisions contained herein and (iv) the transferee is an “accredited investor,”
as that term is defined in Rule 501 of Regulation D.

     

    (g) Execution and
Counterparts.  This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original
and, all of which taken together shall constitute one and the same Agreement and
shall become effective when counterparts have been signed by each party and
delivered to the other party, it being understood that both parties need not
sign the same counterpart.  In the event that any signature is
delivered by facsimile transmission or by e-mail delivery of a “.pdf” format
data file, such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed) with the same
force and effect as if such facsimile or “.pdf” signature were the original
thereof.

     

    (h) Governing
Law.  All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be determined in
accordance with the provisions of the Purchase Agreement.

     

    (i) Cumulative
Remedies.  The remedies provided herein are cumulative and not
exclusive of any remedies provided by law.

     

    (j) Severability. If any
term, provision, covenant or restriction of this Agreement is held by a court of
competent jurisdiction to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set forth herein
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated, and the parties hereto shall use their reasonable efforts to
find and employ an alternative means to achieve the same or substantially the
same result as that contemplated by such term, provision, covenant or
restriction.  It is hereby stipulated and declared to be the intention
of the parties that they would have executed the remaining terms, provisions,
covenants and restrictions without including any of such that may be hereafter
declared invalid, illegal, void or unenforceable.

     

    
      
        
        

      

      
        19.

        
          

        

      

      
        
        

      

    

    (k) Headings.  The
headings in this Agreement are for convenience of reference only and shall not
limit or otherwise affect the meaning hereof.

     

    (l) Currency.  Unless
otherwise indicated, all dollar amounts referred to in this Agreement are in
United States Dollars.  All amounts owing under this Agreement are in
United States Dollars.  All amounts denominated in other currencies
shall be converted in the United States Dollar equivalent amount in accordance
with the applicable exchange rate in effect on the date of
calculation.

     

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

     

    

    [REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK,

    SIGNATURE
PAGES TO FOLLOW]

     

     

    
      
        
        

      

      
        20.

        
          

        

      

      
        
        

      

    

     

    IN
WITNESS WHEREOF, each of the parties has executed this Investor Rights Agreement
as of the date first written above.

     

    
      
        	
              	SUNESIS
      PHARMACEUTICALS, INC.
	 
      	 	 
      
	 
      	 	 
      
	
              	By:	

                /s/
      Daniel N. Swisher,
      Jr.                                  
      

              
	
                 

              	 	
                

                  Name: Daniel N.
      Swisher, Jr.

                

              
	
                 

              	 	
                

                  Title:  
      President and Chief Executive
Officer

                

              

      

    

                     

                    

    [REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK,

    SIGNATURE
PAGES OF HOLDERS TO FOLLOW]

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    

     

    IN WITNESS WHEREOF, each of the parties
has executed this Investor Rights Agreement as of the date first written
above.

     

    
      
        
          	
                	
                  Bay
      City Capital Fund V, L.P.

                
	 
      	 	 
      
	 
      	 	 
      
	
                	By:	Bay
      City Capital Management V LLC, its GeneralPartner
	 	 	By:  Bay
      City Capital LLC, its Manager
	 	 	 
	 	By: 	/s/
      Fred
      Craves                                                   
      
	
                   

                	 	
                  

                    Name:
      

                  

                
	
                   

                	 	
                  

                    Title:  
      

                  

                
	 	 	 
	 	

                  ADDRESS
      FOR NOTICE

                  

                  c/o:  Bay City
      Capital                                                                
      

                   

                  Street:
      750 Battery St.,
      Ste.
      400                                                
      

                  

                  City/State/Zip:
      San Francisco,
      CA  94111                             
      

                  
Attention:  

                   

                  Tel:
      

                  

                  Fax:
      ________________________________________

                   

                  Email:
      

                

        

         

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

    

     

    IN
WITNESS WHEREOF, each of the parties has executed this Investor Rights Agreement
as of the date first written above.

     

    
      
        
          
            	
                  	
                    Bay
      City Capital Fund V Co-Investment Fund, L.P.

                  
	 
      	 	 
      
	 
      	 	 
      
	 	By:	Bay City
      Capital Management V LLC, its GeneralPartner
	 	 	By:  Bay City Capital LLC, its Manager
	 	 	 
	 	By: 	/s/
      Fred
      Craves                                                   
      
	
                     

                  	 	
                    

                      Name:
      

                    

                  
	
                     

                  	 	
                    

                      Title:  
      

                    

                  
	 	 	 
	 	

                    ADDRESS
      FOR NOTICE

                    

                    c/o:  Bay City
      Capital                                                                
      

                     

                    Street:
      750 Battery St.,
      Ste.
      400                                                
      

                    

                    City/State/Zip:
      San Francisco,
      CA  94111                             
      

                    
Attention:  

                     

                    Tel:  

                    

                    Fax:
      ________________________________________

                     

                    Email:
      

                  

          

           

        

      

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    IN WITNESS WHEREOF, each of the parties
has executed this Investor Rights Agreement as of the date first written
above.

    
       

      
        
          
            	
                  	
                    Growth
      Equity Opportunities Fund, LLC

                  
	 
      	 	 
      
	 	By:	New
      Enterprise Associates 12, L.P. its sole Member
	 	By:	NEA Partners
      12, L.P., its General Partner
	 	By:	NEA
      12 GP, LLC, its General Partner
	 	 	 
	 	By: 	/s/ Charles W. Newhall
      III                                
	
                     

                  	 	
                    

                      Name:  Charles
      W. Newhall III

                    

                  
	
                     

                  	 	
                    

                      Title:   
      Manager

                    

                  
	 	 	 
	 	

                    ADDRESS
      FOR NOTICE

                    

                    c/o:  ________________________________________

                     

                    Street:
      1119 St. Paul
      Street                                                       

                    

                    City/State/Zip:
      Baltimore,
      MD  21202                                     
      

                    
Attention:  

                     

                    Tel:
      

                    

                    Fax:
      

                     

                    Email:

                  

          

           

        

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    IN
WITNESS WHEREOF, each of the parties has executed this Investor Rights Agreement
as of the date first written above.

    
      
         

        
          
            
              	
                    	NAME OF
      INVESTOR
	 	

                      Alta
      Biopharma Partners III, L.P.

                    
	 	

                      By:  Alta
      Biopharma Management III, LLC

                    
	 	 
	 	

                      AUTHORIZED
      SIGNATORY

                    
	 
      	 	 
      
	 	By:	/s/ Edward
      Hurwitz                                            
	
                       

                    	 	
                      

                        Name:  Edward
      Hurwitz

                      

                    
	
                       

                    	 	
                      

                        Title:   
      Director

                      

                    
	 	 	 
	 	

                      ADDRESS
      FOR NOTICE

                      

                      c/o:  Alta
      Partners                                                                     

                       

                      Street:
      One Embarcadero Center, 37th
      Floor                          
      

                      

                      City/State/Zip:
      San Francisco,
      CA  94111                             

                      
Attention:  

                       

                      Tel:
      

                      

                      Fax:
      

                       

                      Email:

                    

            

          

        

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    IN
WITNESS WHEREOF, each of the parties has executed this Investor Rights Agreement
as of the date first written above.

    
       

      
        
          
            
              
                	
                      	NAME OF
      INVESTOR
	 	 
	 	

                        By:  Alta
      Biopharma Management III, LLC

                      
	 	Alta
      Biopharma Partners III, GmbH & Co. Beteiligungs KG
	 	

                        AUTHORIZED
      SIGNATORY

                      
	 
      	 	 
      
	 	By:	/s/ Edward
      Hurwitz                                            
	
                         

                      	 	
                        

                          Name:  Edward
      Hurwitz

                        

                      
	
                         

                      	 	
                        

                          Title:   
      Director

                        

                      
	 	 	 
	 	

                        ADDRESS
      FOR NOTICE

                        

                        c/o:  Alta
      Partners                                                                     

                         

                        Street:
      One Embarcadero Center, 37th
      Floor                          
      

                        

                        City/State/Zip:
      San Francisco,
      CA  94111                             

                        
Attention:
      

                         

                        Tel:

                        

                        Fax:
      

                         

                        Email:
      

                      

              

            

          

        

      

       

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    IN
WITNESS WHEREOF, each of the parties has executed this Investor Rights Agreement
as of the date first written above.

     

    
      
        
          
            
              
                	
                      	NAME OF
      INVESTOR
	 	Alta
      Embarcadero Biopharma Partners III, LLC
	 	

                        By:  Alta
      Biopharma Management III, LLC

                      
	 	 
	 	

                        AUTHORIZED
      SIGNATORY

                      
	 
      	 	 
      
	 	By:	/s/ Edward
      Hurwitz                                            
	
                         

                      	 	
                        

                          Name:  Edward
      Hurwitz

                        

                      
	
                         

                      	 	
                        

                          Title:   
      Manager 

                        

                      
	 	 	 
	 	

                        ADDRESS
      FOR NOTICE

                        

                        c/o:  Alta
      Partners                                                                     

                         

                        Street:
      One Embarcadero Center, 37th
      Floor                          
      

                        

                        City/State/Zip:
      San Francisco,
      CA  94111                             

                        
Attention: 

                           

                          Tel:

                          

                          Fax:
      

                           

                          Email:
      

                        

                      

              

            

          

        

      

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    IN WITNESS WHEREOF, each of the parties
has executed this Investor Rights Agreement as of the date first written
above.

     

    
      
        
          
            	
                  	
                    NAME
      OF INVESTOR

                     

                    Nexus
      Gemini,
      LP                                                                       
      

                  
	 
      	 	 
      
	 	 	 
	 
      	

                    AUTHORIZED
      SIGNATORY

                  
	 	 	 
	 	By: 	/s/ Dominique
      Selmon                                      
	
                     

                  	 	
                    

                      Name: Dominique
      Selmon

                    

                  
	
                     

                  	 	
                    

                      Title:  
      Managing Partner

                    

                  
	 	 	 
	 	

                    ADDRESS
      FOR NOTICE

                    

                    c/o:  Merlin
      Nexus                                                                     
      

                     

                    Street:
      230 Park Ave., Ste.
      928                                                 
      

                    

                    City/State/Zip:
      New York,
      NY  10169                                     

                    
Attention: 

                       

                      Tel:

                      

                      Fax:
      

                       

                      Email:
      

                    

                  

          

           

          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

        

      

    

    

    IN
WITNESS WHEREOF, each of the parties has executed this Investor Rights Agreement
as of the date first written above.

     

    
      
        
          
            
              	
                    	
                      NAME
      OF INVESTOR

                       

                      Merlin
      Nexus III,
      LP                                                                  

                    
	 
      	 	 
      
	 	 	 
	 
      	

                      AUTHORIZED
      SIGNATORY

                    
	 	 	 
	 	By: 	/s/ Dominique
      Selmon                                      
	
                       

                    	 	
                      

                        Name: Dominique
      Selmon

                      

                    
	
                       

                    	 	
                      

                        Title:  
      Managing Partner

                      

                    
	 	 	 
	 	

                      ADDRESS
      FOR NOTICE

                      

                      c/o:  Merlin
      Nexus                                                                     
      

                       

                      Street:
      230 Park Ave., Ste.
      928                                                 
      

                      

                      City/State/Zip:
      New York,
      NY  10169                                     

                      
Attention:
                              
                         

                        Tel:

                        

                        Fax:
      

                         

                        Email:
      

                      

                    

            

             

             

            
              
                
                

              

              
                
                

                
                  

                

              

              
                
                

              

            

             

          

        

      

    

     

    IN WITNESS WHEREOF, each of the parties
has executed this Investor Rights Agreement as of the date first written
above.

    
       

      
        
          
            
              
                	
                      	
                        NAME
      OF INVESTOR

                         

                        

                          ONC
      General Partner Limited as General Partner of

                          ONC
      Partners, LP

                        

                      
	 
      	 	 
      
	 	 	 
	 
      	

                        AUTHORIZED
      SIGNATORY

                      
	 	 	 
	 	By: 	/s/ M.
      Paul                                                          
	
                         

                      	 	
                        

                          Name: Martin
      Paul

                        

                      
	
                         

                      	 	
                        

                          Title:  
      Director

                        

                      
	 	 	 
	 	

                        ADDRESS
      FOR NOTICE

                        

                        c/o:  Bedell Trust Company
      Limited                                       

                         

                        Street:
      26 New
      Street                                                                 
      

                        

                        City/State/Zip:
      St. Helen, Jersey, JE4
      8PP                             
      

                        
Attention:
                                
                           

                          Tel:

                          

                          Fax:
      

                           

                          Email:
      

                        

                      

              

            

          

        

      

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    IN WITNESS WHEREOF, each of the parties
has executed this Investor Rights Agreement as of the date first written
above.

     

    
      
        
          
            
              
                
                  	
                        	
                          NAME
      OF INVESTOR

                           

                          

                            Vision
      Opportunity Master Fund,
    Ltd. 

                          

                        
	 
      	 	 
      
	 	 	 
	 
      	

                          AUTHORIZED
      SIGNATORY

                        
	 	 	 
	 	By: 	/s/ Adam
      Benowitz                                            
	
                           

                        	 	
                          

                            Name: Adam
      Benowitz

                          

                        
	
                           

                        	 	
                          

                            Title:  
      Director

                          

                        
	 	 	 
	 	

                          ADDRESS
      FOR NOTICE

                          

                          Street:
      20 West 55th Street, 5th
      Floor                                      

                          

                          City/State/Zip:
      New York,
      NY  10019                                     
      

                          
Attention:
                                  
                             

                            Tel:

                            

                            Fax:
      

                             

                            Email:
      

                          

                        

                

              

            

          

        

      

      
 

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    IN
WITNESS WHEREOF, each of the parties has executed this Investor Rights Agreement
as of the date first written above.

     

    
      
        
          
            
              
                
                  	
                        	

                          CAXTON
      ADVANTAGE LIFE SCIENCES FUND, L.P.

                          
                            By:  Caxton
      Advantage Venture partner, L.P., its   Managing General
      Partner

                          

                        
	 
      	 	 
      
	 	 	 
	 	 	 
	 	By: 	/s/ Eric W.
      Roberts                                            
	
                           

                        	 	
                          

                            Name: Eric W.
      Roberts

                          

                        
	
                           

                        	 	
                          

                            Title:  
      Managing Director

                          

                        
	 	 	 
	 	

                          ADDRESS
      FOR NOTICE

                          

                          c/o:  Caxton Advantage Venture Partners,
      L.P.                    
      

                           

                          Street:
      500 Park
      Avenue                                                           
      

                          

                          City/State/Zip:
      New York,
      NY  10022                                     

                          
Attention:
                                  
                             

                            Tel:

                            

                            Fax:
      

                             

                            Email:
      

                          

                        

                

              

            

          

        

      

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    IN WITNESS WHEREOF, each of the parties
has executed this Investor Rights Agreement as of the date first written
above.

     

    
      
        
          
            
              
                
                  
                    	
                          	

                            
                              
                                NAME
      OF INVESTOR

                                 

                                Venrock
      Associates                                                                  
      

                              

                            

                          
	 
      	 	 
      
	 	 	 
	 	 	 
	 	By: 	/s/ Anthony B.
      Evnin                                       
	
                             

                          	 	
                            

                              Name: Anthony B.
      Evnin

                            

                          
	
                             

                          	 	
                            

                              Title:  
      General Partner

                            

                          
	 	 	 
	 	

                            ADDRESS
      FOR NOTICE

                            

                            c/o:  Venrock
      Associates                                                         
      

                             

                            Street:
      530 Fifth Avenue, 22nd
      Floor                                       
      

                            

                            City/State/Zip:
      New York,
      NY  10036                                     
       

                            
Attention:
                                    
                               

                              Tel:

                              

                              Fax:
      

                               

                              Email:
      

                            

                          

                  

                

              

            

          

        

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    IN
WITNESS WHEREOF, each of the parties has executed this Investor Rights Agreement
as of the date first written above.

     

    
       

      
        
          
            
              
                
                  
                    
                      	
                            	

                              
                                
                                  NAME
      OF INVESTOR

                                   

                                  Venrock Associates II,
      L.P.                                                     
      

                                

                              

                            
	 
      	 	 
      
	 	 	 
	 	 	 
	 	By: 	/s/ Anthony B.
      Evnin                                       
	
                               

                            	 	
                              

                                Name: Anthony B.
      Evnin

                              

                            
	
                               

                            	 	
                              

                                Title:  
      General Partner

                              

                            
	 	 	 
	 	

                              ADDRESS
      FOR NOTICE

                              

                              c/o:  Venrock Associates II,
      L.P.                                            
       

                               

                              Street:
      530 Fifth Avenue, 22nd
      Floor                                       
      

                              

                              City/State/Zip:
      New York,
      NY  10036                                     
       

                              
Attention:
                                      
                                 

                                Tel:

                                

                                Fax:
      

                                 

                                Email:
      

                              

                            

                    

                  

                

              

            

          

        

      

    

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    IN
WITNESS WHEREOF, each of the parties has executed this Investor Rights Agreement
as of the date first written above.

     

    
       

      
        
          
            
              
                
                  
                    
                      	
                            	

                              
                                
                                  NAME
      OF INVESTOR

                                   

                                  
                                    Opus
      Point Healthcare (Low Net) Fund,
      L.P.                        

                                  

                                

                              

                            
	 
      	 	 
      
	 	 	 
	 	 	 
	 	By: 	/s/ Michael S.
      Weiss                                         
	
                               

                            	 	
                              

                                Name: Michael S.
      Weiss

                              

                            
	
                               

                            	 	
                              

                                Title:  
      Manager Opus Point Healthcare Fund  Management LLC,

                                Investment Manager
      to the Fund

                              

                            
	 	 	 
	 	

                              ADDRESS
      FOR NOTICE

                              

                              Street:
      300 E. 77th Street, Ste.
      7B                                             
      

                              

                              City/State/Zip:
      New York,
      NY  10075                                      
      

                              
Attention:
                                      
                                 

                                Tel:

                                

                                Fax:
      

                                 

                                Email:
      

                              

                            

                    

                  

                

              

            

          

        

      

    

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    IN
WITNESS WHEREOF, each of the parties has executed this Investor Rights Agreement
as of the date first written above.

     

    
      
         

        
          
            
              
                
                  
                    
                      
                        	
                              	

                                
                                  
                                    NAME
      OF INVESTOR

                                     

                                    
                                      Opus
      Point Healthcare Value Fund,
      L.P.                               
      

                                    

                                  

                                

                              
	 
      	 	 
      
	 	 	 
	 	 	 
	 	By: 	/s/ Michael S.
      Weiss                                         
	
                                 

                              	 	
                                

                                  Name: Michael S.
      Weiss

                                

                              
	
                                 

                              	 	
                                

                                  Title:  
      Manager Opus Point Healthcare Fund  Management LLC,

                                  Investment Manager
      to the Fund

                                

                              
	 	 	 
	 	

                                ADDRESS
      FOR NOTICE

                                

                                Street:
      300 E. 77th Street, Ste.
      7B                                             
      

                                

                                City/State/Zip:
      New York,
      NY  10075                                      
      

                                
Attention:
                                        
                                   

                                  Tel:

                                  

                                  Fax:
      

                                   

                                  Email:
      

                                

                              

                      

                       

                      
                        
                          
                          

                        

                        
                          
                          

                          
                            

                          

                        

                        
                          
                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    Annex A

     

    SELLING
STOCKHOLDER NOTICE AND QUESTIONNAIRE

    

    The
undersigned holder of shares of common stock, warrants to purchase shares of
common stock and/or preferred stock convertible into shares of the common stock,
par value $0.0001 per share, of Sunesis Pharmaceuticals, Inc., a Delaware
corporation (the “Company”),
issued pursuant to that certain Securities Purchase Agreement by and among the
Company and the Purchasers as defined therein, dated as of March 31, 2009 (the
“Purchase
Agreement”), understands that the Company intends to file with the
Commission a registration statement on Form S-3 (except if the Company is
ineligible to register for resale the Registrable Securities on Form S-3, in
which case such registration shall be on a registration statement on Form S-1)
(the “Resale
Registration Statement”) for the registration and the resale under Rule
415 of the Securities Act of Registrable Securities in accordance with the terms
of that certain Investor Rights Agreement, dated as of April 3, 2009, by and
among the Company and the Investors as defined therein, to which this Notice and
Questionnaire is attached as Annex A (the “Agreement”).
All capitalized terms not otherwise defined herein shall have the meanings
ascribed thereto in the Agreement.

    

    In order
to sell or otherwise dispose of any Registrable Securities pursuant to the
Resale Registration Statement, a holder of Registrable Securities generally will
be required to be named as a selling stockholder in the related prospectus or a
supplement thereto (as so supplemented, the “Prospectus”),
deliver such Prospectus to purchasers of Registrable Securities (including
pursuant to Rule 172 under the Securities Act) and be bound by the provisions of
the Agreement (including certain indemnification provisions, as described
below). Holders must complete and deliver this Notice and Questionnaire in order
to be named as selling stockholders in the Prospectus.

    

    Certain
legal consequences arise from being named as a selling stockholder in the Resale
Registration Statement and the Prospectus. Holders of Registrable Securities are
advised to consult their own securities law counsel regarding the consequences
of being named or not named as a selling stockholder in the Resale Registration
Statement and the Prospectus.

    

    NOTICE

     

    The
undersigned holder (the “Selling
Stockholder”) of Registrable Securities hereby gives notice to the
Company of its intention to sell or otherwise dispose of Registrable Securities
owned by it and listed below in Item (3), unless otherwise specified in Item
(3), pursuant to the Resale Registration Statement. The undersigned, by signing
and returning this Notice and Questionnaire, understands and agrees that it will
be bound by the terms and conditions of this Notice and Questionnaire and the
Agreement.

    

    The
undersigned hereby provides the following information to the Company and
represents and warrants that such information is accurate and
complete:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              QUESTIONNAIRE

            

    

     

    
      	
              

                1.  Name.

              

            	
            

    

     

    
      	
               
      

            	
              (a)

            	
              Full
      Legal Name of Selling Stockholder:

               

               

            

    

    

    
      	
               
      

            	
              (b)

            	
              Full
      Legal Name of Registered Holder (if not the same as (a) above) through
      which Registrable Securities Listed in Item 3 below are held:

               

               

            

    

    

    
      	
               
      

            	
              (c)

            	
              Full
      Legal Name of Natural Control Person (which means a natural person who
      directly or indirectly alone or with others has power to vote or dispose
      of the securities covered by this Notice and Questionnaire):

               

               

            

    

    

    
      	
              2.  Address
      for Notices to Selling Stockholder:

            

    

     

    
      	 
      
	 
      
	 
      
	
              Telephone:

            
	
              Fax:

            
	
              Contact
      Person:

            
	
              E-mail
      Address of Contact Person:

            

    

    

    
      	
              3.  Beneficial
      Ownership of Registrable Securities Issuable Pursuant to the Purchase
      Agreement:

            

    

     

    
      	
               
      

            	
              (a)

            	
              Type
      and Number of Registrable Securities beneficially owned and issued
      pursuant to the Purchase Agreement:

               

            
	 	 	   
      
	 	 	   
      
	 	 	  
       

    

     

    
      	
               
      

            	
              (b)

            	
              Number
      of shares of common stock to be registered pursuant to this Notice and
      Questionnaire for resale:

               

            
	 	 	 
	 	 	 
	 	 	 

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              4.  Broker-Dealer
      Status:

            

    

     

    
      	
               
      

            	
              (a)

            	
              Are
      you a broker-dealer?

            

    

     

    Yes                         No   

     

    
      	
              (b)

            	
              If
      “yes” to Section 4(a), did you receive your Registrable Securities as
      compensation for

            	
              investment
      banking services to the Company?

            

    

    
       

      Yes                         No   

    

     

    
      	
              Note:

            	
              If
      no, the Commission’s staff has indicated that you should be identified as
      an underwriter in the Registration
Statement.

            

    

     

    
      	
               
      

            	
              (c)

            	
              Are
      you an affiliate of a
broker-dealer?

            

    

    
       

      Yes                         No   

    

     

    
      	
              Note:

            	
              If
      yes, provide a narrative explanation below:

               

            
	 	   
      
	 	   
      

    

     

    
      	
               
      

            	
              (c)

            	
              If
      you are an affiliate of a broker-dealer, do you certify that you bought
      the Registrable Securities in the ordinary course of business, and at the
      time of the purchase of the Registrable Securities to be resold, you had
      no agreements or understandings, directly or indirectly, with any person
      to distribute the Registrable
Securities?

            

    

    
       

      Yes                         No   

    

     

    
      	
              Note:

            	
              If
      no, the Commission’s staff has indicated that you should be identified as
      an underwriter in the Registration
Statement.

            

    

     

    
      	
              5.  Beneficial
      Ownership of Other Securities of the Company Owned by the Selling
      Stockholder.

            

    

     

    Except
as set forth below in this Item 5, the undersigned is not the beneficial or
registered owner of any securities of the Company other than the Registrable
Securities listed above in Item 3.

     

    
      	
               
      

            	
              (a)

            	
              Type
      and amount of other securities beneficially
  owned:

            

    

     

    
      	
               
      

            	
              ______________________________________________________________________________

            

    

     

    
      	
               
      

            	
              ______________________________________________________________________________

            

    

     

    6.  Relationships
with the Company:

     

    Except
as set forth below, neither the undersigned nor any of its affiliates, officers,
directors or principal equity holders (owners of 5% of more of the equity
securities of the undersigned) has held any position or office or has had any
other material relationship with the Company (or its predecessors or affiliates)
during the past three years.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              State
      any exceptions here:

               

            
	 	   
      
	 	   
      

    

     

    
      	
              7.  Plan
      of Distribution:

            

    

     

    The
undersigned has reviewed the form of Plan of Distribution provided by the
Company, and hereby confirms that, except as set forth below, the information
contained therein regarding the undersigned and its plan of distribution is
correct and complete.

     

    
      	
               
      

            	
              State
      any exceptions here:

               

            
	 	   
      
	 	   
      

    

     

     

    
      	
              ***********

            

    

     

    The
undersigned agrees to promptly notify the Company of any inaccuracies or changes
in the information provided herein that may occur subsequent to the date hereof
and prior to the effective date of any applicable Resale Registration Statement.
All notices hereunder shall be made as provided in the Agreement. In the absence
of any such notification, the Company shall be entitled to continue to rely on
the accuracy of the information in this Notice and Questionnaire.

     

    By
signing below, the undersigned consents to the disclosure of the information
contained herein in its answers to Items (1) through (7) above and the inclusion
of such information in the Resale Registration Statement and the Prospectus. The
undersigned understands that such information will be relied upon by the Company
in connection with the preparation or amendment of any such Registration
Statement and the Prospectus.

     

    By
signing below, the undersigned acknowledges that it understands its obligation
to comply, and agrees that it will comply, with the provisions of the Exchange
Act and the rules and regulations thereunder, particularly Regulation M in
connection with any offering of Registrable Securities pursuant to the Resale
Registration Statement. The undersigned also acknowledges that it understands
that the answers to this Notice and Questionnaire are furnished for use in
connection with Registration Statements filed pursuant to the Investor Rights
Agreement and any amendments or supplements thereto filed with the Commission
pursuant to the Securities Act.

     

    The
undersigned hereby acknowledges and is advised of the following Interpretation
A.65 of the July 1997 SEC Manual of Publicly Available Telephone Interpretations
regarding short selling:

     

    “An
Issuer filed a Form S-3 registration statement for a secondary offering of
common stock which is not yet effective.  One of the selling
stockholders wanted to do a short sale of common stock “against the box” and
cover the short sale with registered shares after the effective
date.  The issuer was advised that the short sale could not be made
before the registration statement becomes effective, because the shares
underlying the short sale are deemed to be sold at the time such sale is
made.  There would, therefore, be a violation of Section 5 if the
shares were effectively sold prior to the effective date.”

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    By
returning this Notice and Questionnaire, the undersigned will be deemed to be
aware of the foregoing interpretation.

     

    I confirm
that, to the best of my knowledge and belief, the foregoing statements
(including without limitation the answers to this Notice and Questionnaire) are
correct.

     

    IN WITNESS WHEREOF the undersigned, by
authority duly given, has caused this Questionnaire to be executed and delivered
either in person or by its duly authorized agent.

     

    
      
        	
                Dated:
      __________________________

              	
                Beneficial
      Owner:  __________________________

              
	 
      	
                By: 
      _____________________________________

              
	 
      	
                Name:

              
	 
      	
                Title:

              

      

    

     

    PLEASE
FAX A COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND RETURN
THE ORIGINAL BY OVERNIGHT MAIL, TO:

    

    Cooley
Godward Kronish LLP

    Five Palo
Alto Square

    3000 El
Camino Real

    Palo
Alto, California 94306-2155

    Telephone
No.:  (650) 843-5180

    Facsimile
No.:  (650) 849-7400

    Attention:  Suzanne
Sawochka Hooper[
* ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

     

    Exhibit
10.1

     

    SECURITIES
PURCHASE AGREEMENT

     

    This
Securities Purchase Agreement (this “Agreement”)
is dated as of March 31, 2009, by and among Sunesis Pharmaceuticals, Inc., a
Delaware corporation (the “Company”),
and each purchaser identified on the signature pages hereto (each, including its
successors and assigns, a “Purchaser”
and collectively, the “Purchasers”).

     

    RECITALS

     

    A.           The
Company and each Purchaser are executing and delivering this Agreement in
reliance upon the exemption from securities registration afforded by Section
4(2) of the Securities Act of 1933, as amended, or any successor statute, and
the rules and regulations promulgated thereunder (the “Securities
Act”), and Rule 506 of Regulation D (“Regulation
D”) as promulgated by the United States Securities and Exchange
Commission (the “Commission”)
under the Securities Act.

     

    B.           The
Company has authorized, upon the terms and conditions stated in this Agreement,
(i) the sale and issuance of up to fifteen million dollars ($15,000,000) of
units of the Company (each of which shall be referred to herein as a “Unit” and
collectively as the “Units”),
with each Unit consisting of (A) one share of the Series A Preferred Stock of
the Company, par value $0.0001 per share (the “Preferred
Stock”), and (B) one warrant (as amended, modified, restated or
supplemented from time to time, each, a “Warrant,” and collectively, the
“Warrants”)
to purchase ten (10) shares of the common stock of the Company, par value
$0.0001 per share (the “Common
Stock”); and (ii) the sale and issuance of $28,500,000 of Common Stock at
the Common Equity Closing (as hereinafter defined). Each share of Preferred
Stock shall initially be convertible into ten (10) shares of Common Stock
(collectively, the “Conversion
Shares”), subject to adjustment in accordance with the terms of the
Certificate of Designation (as hereinafter defined).  Each Purchaser’s
subscription amount for each closing is as set forth on Schedule I
hereto.

     

    C.           The
Company has adopted the Certificate of Designation (the “Certificate of
Designation”) in substantially the form attached hereto as Exhibit A which,
among other matters, establishes the rights, preferences and privileges of the
Preferred Stock.

     

    D.           At
the First Unit Closing (as hereinafter defined), each Purchaser, severally and
not jointly, wishes to purchase, and the Company wishes to sell, upon the terms
and conditions stated in this Agreement, the number of Units as hereafter
determined, with each Unit consisting of (i) one share of Preferred Stock (each
a “Unit
Share,” collectively, the “Unit
Shares”), and (ii) a Warrant to purchase ten (10) shares of Common Stock
(such amount being referred to herein as the “Warrant
Ratio”) in substantially the form attached hereto as Exhibit
B.  The shares of Common Stock issuable upon exercise of the
Warrants, including, without limitation, all shares issuable as a result of any
adjustments pursuant to Section 4 and Section 6 of the Warrants, are referred to
herein as the “Warrant
Shares.”

     

    E.           At
the Second Unit Closing (as hereinafter defined), if any, each Purchaser,
severally and not jointly, wishes to purchase, and the Company wishes to sell,
upon the terms and conditions stated in this Agreement, the number of Units as
hereafter determined, with each Unit consisting of (i) one Unit Share and (ii) a
Warrant to purchase ten (10) shares of Common Stock.

    
      
        
          .

        

         

      

      
         

        
          

        

      

      
         

      

    

    F.           At
the Common Equity Closing (as hereinafter defined), if any, each Purchaser,
severally and not jointly, wishes to purchase, and the Company wishes to sell,
upon the terms and conditions stated in this Agreement, the number of shares of
Common Stock as hereafter determined.

     

    G.           At
the First Unit Closing, the parties hereto shall execute and deliver an Investor
Rights Agreement, in substantially the form attached hereto as Exhibit C (as
amended, modified, restated or supplemented from time to time, the “Investor Rights
Agreement”), pursuant to which, among other things, the Company will
agree to provide certain registration rights with respect to the Conversion
Shares, the Warrant Shares and the Common Equity Shares (as hereinafter defined)
under the Securities Act and the rules and regulations promulgated thereunder
and applicable state securities laws and will agree to provide certain other
rights to the Purchasers.

     

    AGREEMENT

     

    NOW,
THEREFORE, IN CONSIDERATION of the mutual agreements, representations,
warranties and covenants contained in this Agreement, and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the Company and the Purchasers hereby agree as
follows:

     

    ARTICLE
I.

    DEFINITIONS

     

    1.1           Definitions.  In
addition to the terms defined elsewhere in this Agreement, for all purposes of
this Agreement, the following terms shall have the meanings indicated in this
Section 1.1:

     

    “Affiliate”
means, with respect to any Person, any other Person that, directly or indirectly
through one or more intermediaries, Controls, is controlled by or is under
common control with such Person, as such terms are used in and construed under
Rule 144.  With respect to a Purchaser that is an entity, any
investment fund or managed account that is managed on a discretionary basis by
the same investment manager as such Purchaser will be deemed to be an Affiliate
of such Purchaser.

     

    “Aggregate Common
Equity Closing Subscription Amount” means $28,500,000.

     

    “Agreement”
shall have the meaning set forth in the Preamble to this Agreement.

     

    “Alternative
Common Stock Financing” means the issuance of shares of Common Stock with
gross proceeds to the Company of at least an amount equal to $30,000,000 and at a per share
purchase price equal to or greater than the Common Per Share Purchase
Price.

     

     “Board”
means the Board of Directors of the Company.

     

    “Board
Recommendation” has the meaning set forth in Section
4.11(f).

     

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

     

    “California
Courts” means the state and federal courts sitting in the County of San
Francisco, State of California.

     

    [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    “Capital
Stock” means all shares, interests, participations or other equivalents
(however designated and whether or not voting) of corporate stock.

     

    “Cash”
means unrestricted cash, unrestricted cash equivalents and unrestricted
marketable securities.

     

    “Cash Balance
Notice” means a written notice delivered by the Company to the Lead
Purchasers setting forth the Company’s Cash balance as of a given date,
certified by the Company’s Chief Financial Officer.

     

    “Certificate of
Designation” has the meaning set forth in the Recitals to this
Agreement.

     

    “Change in
Recommendation” has the meaning set forth in Section
4.11(d).

     

    “Charter
Amendment” has the meaning set forth in Section 5.5(f).

     

    “Closing”
means the First Unit Closing, the Second Unit Closing or the Common Equity
Closing, as the context may require.

     

    “Closing Bid
Price” means, for any security as of any date, the last closing price for
such security on the Principal Trading Market, as reported by Bloomberg, or, if
the Principal Trading Market begins to operate on an extended hours basis and
does not designate the closing bid price, then the last bid price of such
security prior to 4:00 p.m., Eastern Time, as reported by Bloomberg, or, if
the Principal Trading Market is not the principal securities exchange or trading
market for such security, the last closing price of such security on the
principal securities exchange or trading market where such security is listed or
traded as reported by Bloomberg, or if the foregoing do not apply, the last
closing price of such security in the over-the-counter market on the electronic
bulletin board for such security as reported by Bloomberg, or, if no closing bid
price is reported for such security by Bloomberg, the average of the bid prices
of any market makers for such security as reported in the “pink sheets” by Pink
Sheets LLC (formerly the National Quotation Bureau, Inc.). If the Closing Bid
Price cannot be calculated for a security on a particular date on any of the
foregoing bases, the Closing Bid Price of such security on such date shall be
the fair market value as determined in good faith by the Board, in its sole
discretion. All such determinations shall be appropriately adjusted for any
stock dividend, stock split, stock combination or other similar transaction
during the applicable calculation period.

     

    “Commission”
has the meaning set forth in the Recitals to this Agreement.

     

    “Common Equity
Closing” means the closing of the purchase by the Purchasers and sale by
the Company to such Purchasers of the Common Equity Shares pursuant to this
Agreement on the Common Equity Closing Date as provided in Section 2.1(a)(iii)
hereof.

     

    “Common Equity
Closing Date” means the first (1st)
Trading Day after the date on which the last to be satisfied or waived of the
applicable conditions set forth in Sections 2.1(a)(iii), 2.2(c)-(e), 5.5 and
5.6, except for those conditions and deliveries that are to be made at the
Common Equity Closing; provided, however, that the
Common Equity Closing Date shall not occur prior to (i) the earlier of (X) the
fifteenth (15th)
Trading Day after the date on which the Majority Purchasers would have been
required to have delivered a Non-Participation Notice pursuant
to Section 2.1(a)(iii) of this Agreement in order for the Purchasers to be not
required to participate in the Common Equity Closing and (Y) the fifteenth
(15th)
Trading Day after the date on which the Lead Purchasers deliver a Purchaser Put
Notice pursuant to Section 2.1(a)(iii) of this Agreement, or (ii) the
consummation of the Second Unit Closing if the Purchasers have previously
delivered the Purchaser Second Unit Closing Notice (including delivery of such
notice after delivery by the Company of the Company Election Notice and prior to
the consummation of the Common Equity Closing).

     

    [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

    
      
         

      

      
        2.

        
          

        

      

      
         

      

    

    “Common Equity
Closing Notice” has the meaning set forth in Section
2.1(a)(iii).

     

    “Common Equity
Closing Subscription Amount” means with respect to each Purchaser, the
aggregate amount to be paid for the Common Stock purchased hereunder at the
Common Equity Closing as indicated on such Purchaser’s signature page to this
Agreement next to the heading “Common Equity Closing Subscription
Amount.”

     

    “Common Equity
Shares” means the aggregate number of shares of Common Stock derived by
dividing (i) the aggregate dollar amount of the Common Equity Closing
Subscription Amounts, by (ii) the Common Per Share Purchase Price, rounded down
to the nearest whole share.

     

    “Common Per Share
Purchase Price” means, with respect to each share of Common Stock sold at
the Common Equity Closing, an amount per share which shall equal
$0.275.

     

    “Common
Stock” has the meaning set forth in the Recitals to this Agreement, and
also includes any securities into which the Common Stock may hereafter be
reclassified or changed.

     

    “Company”
shall have the meaning set forth in the Preamble to this Agreement.

     

    “Company
Counsel” means Cooley Godward Kronish LLP.

     

    “Company
Deliverables” means, collectively, the documents deliverable by the
Company pursuant to Section 2.2.

     

    “Company Election
Notice” has the meaning set forth in Section 2.1(a)(iii).

     

    “Company Second
Unit Closing Notice” has the meaning set forth in Section
2.1(a)(ii).

     

    “Company’s
Knowledge” means with respect to any statement made to the knowledge of
the Company, that the statement is based upon the actual knowledge of the
executive officers of the Company having responsibility for the matter or
matters that are the subject of the statement; provided, however, that such
executive officers have conducted reasonable investigation and due inquiry of
such matter or matters.

     

    “Competing
Transaction” has the meaning set forth in Section 4.11(a).

     

    “Confidential
Information” means trade secrets, confidential information and know-how
(including but not limited to ideas, formulae, compositions, processes,
procedures and techniques, research and development information, performance
specifications, support documentation, drawings, specifications, designs,
business and marketing plans, and supplier lists and related
information).

     

    “Control”
(including the terms “controlling,” “controlled by” or “under common control
with”) means the possession, direct or indirect, of the power to direct or cause
the direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.

     

    “Conversion
Shares” has the meaning set forth in the Recitals to this
Agreement.

     

    [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

    
      
         

      

      
        3.

        
          

        

      

      
         

      

    

    “DGCL”
means the Delaware General Corporation Law.

     

    “Disclosure
Materials” has the meaning set forth in Section 3.1(g).

     

    “Environmental
Laws” has the meaning set forth in Section 3.1(p).

     

    “Evaluation
Date” has the meaning set forth in Section 3.1(v).

     

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

     

    “Execution
Date” means the date first set forth above.

     

    “FDA” has
the meaning set forth in Section 3.1(x).

     

    “Financing”
has the meaning set forth in Section 7.16.

     

    “First Unit
Closing” means the closing of the purchase by the Purchasers and sale by
the Company of Units to such Purchasers pursuant to this Agreement on the First
Unit Closing Date as provided in Section 2.1(a)(i) hereof.

     

    “First Unit
Closing Date” means the first (1st) Trading Day after the date on which
the last to be satisfied or waived of the applicable conditions set forth in
Sections 2.1(a)(i), 2.2(a), (d) and (e), 5.1 and 5.2 shall have been satisfied
or waived, except for those conditions and deliveries that are to be made at the
First Unit Closing.

     

    “First Unit
Closing Subscription Amount” means with respect to each Purchaser, the
aggregate amount to be paid for the Units purchased hereunder at the First Unit
Closing as indicated on such Purchaser’s signature page to this Agreement next
to the heading “First Unit Closing Subscription Amount.”

     

    “GAAP”
means U.S. generally accepted accounting principles.

     

    “Governmental
Authority” means any nation or government, any Federal, state, city,
town, municipality, county, local or other political subdivision thereof or
thereto and any department, commission, board, bureau, instrumentality, agency
or other entity exercising executive, legislative, judicial, taxing, regulatory
or administrative powers or functions of or pertaining to
government.

     

    “Hazardous
Materials” means (a) any element, compound or chemical that is defined,
listed or otherwise classified as a contaminant, pollutant, toxic pollutant,
toxic or hazardous substance, extremely hazardous substance or chemical,
hazardous waste, special waste, or solid waste under Environmental Laws or that
is likely to cause immediately, or at some future time, harm to or have an
adverse effect on, the environment or risk to human health or safety, including
any pollutant, contaminant, waste, hazardous waste, toxic substance or dangerous
good which is defined or identified in any Environmental Law and which is
present in the environment in such quantity or state that it contravenes any
Environmental Law; (b) petroleum and its refined products; (c) polychlorinated
biphenyls; (d) any substance exhibiting a hazardous waste characteristic,
including corrosivity, ignitability, toxicity or reactivity as well as any
radioactive or explosive materials; and (e) any raw materials, building
components (including asbestos-containing materials) and manufactured products
containing hazardous substances listed or classified as such under Environmental
Laws.

     

    [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

    
      
         

      

      
        4.

        
          

        

      

      
         

      

    

    “Intellectual
Property” means all of the following: (i) patents, patent applications,
patent disclosures and inventions (whether or not patentable and whether or not
reduced to practice); (ii)  trademarks, service marks, trade dress,
trade names, corporate names, logos, slogans and Internet domain names, together
with all goodwill associated with each of the foregoing; (iii) copyrights and
copyrightable works; and (iv) registrations, applications and renewals for any
of the foregoing.

     

    “Investor Rights
Agreement” has the meaning set forth in the Recitals to this
Agreement.

     

    “IRC” means
the Internal Revenue Code of 1986, as amended, or any successor statute, and the
rules and regulations promulgated thereunder.

     

    “Irrevocable
Transfer Agent Instructions” has the meaning set forth in Section
4.1(d).

     

    “Lead
Purchasers” means the Purchasers who are affiliated with Alta BioPharma
Partners III, L.P. and the Purchasers who are affiliated with Bay City Capital,
L.P.

     

    “Legal
Restraint” has the meaning set forth in Section 5.1(c).

     

    “Lien”
means any mortgage, deed of trust, lien, charge, claim, encumbrance, security
interest, right of first refusal, preemptive right or other restrictions of any
kind.

     

    “Majority
Purchaser Second Unit Closing Notice” has the meaning set forth in
Section 2.1(a)(ii).

     

    “Majority
Purchasers” means the Purchasers holding a majority-in-interest of the
Unit Shares issued pursuant to the terms of this Agreement.

     

    “Material Adverse
Effect” on or with respect to the Company means any state of facts,
change, development, event, effect, condition, occurrence, action or omission
(each, an “Event”)
that, individually or in the aggregate, would reasonably be expected to result
in a material adverse effect on the business, financial condition or results of
operations of the Company.

     

    “Material
Contract” means (i) any contract of the Company that has been filed, was
required to have been filed, or is required to be filed but has not yet been
filed, as an exhibit to the SEC Reports pursuant to Item 601(b)(4) or Item
601(b)(10) of Regulation S-K or (ii) any agreement or contract to which the
Company is a party and involving the receipt or payment of amounts in the
aggregate exceeding $200,000 per year, other than contracts entered into in the
ordinary course of business in connection with the conduct of clinical
trials.

     

    “Minimum Aggregate
Common Equity Subscription Amount” means $28,500,000.

     

    “Non-Participation
Notice” has the meaning set forth in Section 2.1(a)(iii).

     

    “Permitted
Liens” means (i) mechanics’, carriers’, or workmen’s, repairmen’s or
similar Liens arising or incurred in the ordinary course of business, (ii) Liens
for taxes, assessments and other governmental charges that are not due and
payable or which may hereafter be paid without penalty or which are being
contested in good faith by appropriate proceedings and (iii) other imperfections
of title or encumbrances, if any, that do not, individually or in the aggregate,
materially impair the use or value of the property to which they
relate.

     

    “Permits” has the meaning set
forth in Section 3.1(m).

     

    [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

    
      
         

      

      
        5.

        
          

        

      

      
         

      

    

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

     

    “Placement
Agent” means Jefferies & Company, Inc.

     

    “Placement Agent
Fees” has the meaning set forth in Section 3.1(z).

     

    “Preferred
Stock” has the meaning set forth in the Recitals to this
Agreement.

     

    “Preferred Stock
Per Share Price” means $0.22.

     

    “Press
Release” has the meaning set forth in Section 4.6.

     

    “Principal Trading
Market” means the Trading Market on which the Common Stock is primarily
listed on and quoted for trading, which, as of the date of this Agreement, shall
be The NASDAQ Global Market.

     

    “Proceeding”
means an action, claim, suit, investigation or proceeding (including, without
limitation, an investigation or partial proceeding, such as a deposition),
whether commenced or threatened.

     

    “Proxy
Statement” has the meaning set forth in Section 4.11(a).

     

    “Purchaser”
and “Purchasers”
have the respective meanings set forth in the Preamble to this
Agreement.

     

    “Purchaser
Deliverables” has the meaning set forth in Section 2.2(e).

     

    “Purchaser
Party” has the meaning set forth in Section 4.8.

     

    “Purchaser Put
Notice” means a written notice by the Lead Purchasers to the Company and
all Purchasers, which shall be delivered if the Majority Purchasers elect to
consummate the Common Equity Closing and shall set forth such election,
delivered (i) at any time prior to January 8, 2010, (ii) on or before January
15, 2010, if a Cash Balance Notice is delivered no later than January 12, 2010
and such Cash Balance Notice reflects a Cash balance of less than $4.0 million
as of January 8, 2010 or (iii) if a Cash Balance Notice delivered no later than
January 12, 2010 sets forth the Company’s Cash balance as greater than $4.0
million as of January 8, 2010, at any time prior to the earlier of (A) December
31, 2010, (B) five (5) Trading Days following the delivery to the Lead
Purchasers of a Cash Balance Notice reflecting a Cash balance of the Company of
less than $4.0 million and (C) the closing of an Alternative Common Stock
Financing.

     

    “Purchaser Second
Unit Closing Notice” has the meaning set forth in Section
2.1(a)(ii).

     

    “Registration
Statement” means a registration statement meeting the requirements set
forth in the Investor Rights Agreement and covering the resale by the Purchasers
of the Registrable Securities (as defined in the Investor Rights
Agreement).

     

    “Regulation
D” has the meaning set forth in the Recitals to this
Agreement.

     

    “Required
Approvals” has the meaning set forth in Section 3.1(f).

     

    [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

    
      
         

      

      
        6.

        
          

        

      

      
         

      

    

    “Rule 144”
means Rule 144 promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same effect as such
Rule.

     

    “Second Closing
Milestone” means the receipt by the Board, following a meeting or written
interactions with the FDA, of a positive recommendation from at least a majority
of the members of a five (5) person panel engaged by the Board that it would be
reasonable to expect that (i) an [ * ] clinical trial in an
acute myeloid leukemia (AML) population would be successful and sufficient for
[ * ] approval of the
Company’s voreloxin drug candidate by the FDA [ * ], (ii) the proceeds from
the Second Unit Closing and the Common Equity Closing, assuming each were to take
place, together
with other Cash resources of the Company, would be sufficient to fund the [ * ] clinical trial and the
Company’s other corporate, development and regulatory activities to support the
submission of a New Drug Application (NDA) to the FDA for the marketing and sale
of voreloxin to treat an identified portion of the AML population and (iii) if
the NDA is approved, voreloxin would be a commercially viable
drug.  The five (5) person panel shall be comprised of key opinion
leaders with respect to the development and/or commercialization of drugs to
treat AML or similar or related indications, [ * ]; the Company and the
Majority Purchasers shall use commercially reasonable efforts to identify the
members of the panel by no later than [ * ] or another date mutually
agreed by the Majority Purchasers and the Company.

     

    “Second Closing
Units” has the meaning set forth in Section 2.1(a)(ii).

     

    “SEC
Reports” has the
meaning set forth in Section 3.1(g).

     

    “Second Unit
Closing” means the closing of the purchase by the Purchasers and sale by
the Company of the Units to such Purchasers pursuant to this Agreement on the
Second Unit Closing Date as provided in Section 2.1(a)(ii) hereof.

     

    “Second Unit
Closing Date” means the first (1st)
Trading Day after the date on which the last to be satisfied or waived of the
conditions set forth in Sections 2.1(a)(ii), 2.2(b), (d) and (e), 5.3 and 5.4
shall have been satisfied or waived, except for those conditions and deliveries
that are to be made at the Second Unit Closing; provided, however, that the
Second Unit Closing Date shall not occur prior to the fifteenth (15th)
Trading Day after the date on which a Company Second Unit Closing Notice,
Purchaser Second Unit Closing Notice or Majority Purchaser Second Unit Closing
Notice, as applicable, is validly delivered pursuant to this
Agreement.

     

    “Second Unit
Closing Subscription Amount” means with respect to each Purchaser, the
aggregate amount to be paid for the Units purchased hereunder at the Second Unit
Closing as indicated on such Purchaser’s signature page to this Agreement next
to the heading “Second Unit Closing Subscription Amount.”

     

    “Secretary’s
Certificate” has the meaning set forth in Section 2.2(d)(i).

     

    “Securities”
means, collectively, the Warrants and the Shares.

     

    “Securities
Act” has the meaning set forth in the Recitals to this
Agreement.

     

    “Shares”
means, collectively, the Unit Shares, the Conversion Shares, the Warrant Shares
and the Common Equity Shares.

     

    [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

    
      
         

      

      
        7.

        
          

        

      

      
         

      

    

    “Short
Sales” include, without limitation, (i) all “short sales” as defined in
Rule 200 promulgated under Regulation SHO under the Exchange Act, whether or not
against the box, and all types of direct and indirect stock pledges, forward
sale contracts, options, puts, calls, short sales, swaps, “put equivalent
positions” (as defined in Rule 16a-1(h) under the Exchange Act) and similar
arrangements (including on a total return basis), and (ii) sales and other
transactions through non-U.S. broker dealers or foreign regulated
brokers.

     

    “Stockholder
Approval” means the approval from the Company’s stockholders of each of
the Transaction Stockholder Approval Matters by the requisite vote of the
Company’s stockholders at the Stockholders’ Meeting.

     

    “Stockholder
Approval Date” means the date on which each of the Transaction
Stockholder Approval Matters has been approved by the requisite vote of the
Company’s stockholders.

     

    “Stockholders’
Meeting” has the meaning set forth in Section 4.11(a).

     

    “Subsidiary”
means, with respect to any Person at any date, any corporation, limited or
general partnership, limited liability company, trust, estate, association,
joint venture or other business entity (i) the accounts of which would be
consolidated with those of such Person in such Person’s consolidated financial
statements if such financial statements were prepared in accordance with GAAP or
(ii) of which more than 50% of (A) the outstanding Capital Stock having (in the
absence of contingencies) ordinary voting power to elect a majority of the board
of directors or other managing body of such Person, (B) in the case of a
partnership or limited liability company, the interest in the capital or profits
of such partnership or limited liability company or (C) in the case of a trust,
estate, association, joint venture or other entity, the beneficial interest in
such trust, estate, association or other entity business is, at the time of
determination, owned or controlled directly or indirectly through one or more
intermediaries, by such Person, and “Subsidiaries”
mean, collectively, each Subsidiary with respect to any Person.

     

    “Superior
Proposal” means a bona
fide proposal for a transaction that a majority of the Board determines,
at a duly constituted meeting of the Board, in its reasonable good faith
judgment (after consultation with its financial advisor) to be a transaction
more favorable to the Company’s stockholders from a financial point of view than
the transactions contemplated by this Agreement.

     

    “Trading
Affiliates” has the meaning set forth in Section 3.2(h).

     

    “Trading
Day” means (i) a day on which the Common Stock is listed or quoted and
traded on its Principal Trading Market (other than the OTC Bulletin Board), or
(ii) if the Common Stock is not listed on a Trading Market (other than the OTC
Bulletin Board), a day on which the Common Stock is traded in the
over-the-counter market, as reported by the OTC Bulletin Board, or (iii) if the
Common Stock is not quoted on any Trading Market, a day on which the Common
Stock is quoted in the over-the-counter market as reported in the “pink sheets”
by Pink Sheets LLC (or any similar organization or agency succeeding to its
functions of reporting prices); provided, that in the event
that the Common Stock is not listed or quoted as set forth in (i), (ii) and
(iii) hereof, then Trading Day shall mean a Business Day.

     

    “Trading
Market” means whichever of The NASDAQ Global Select Market, The NASDAQ
Global Market, The NASDAQ Capital Market or the OTC Bulletin Board on which the
Common Stock is listed or quoted for trading on the date in
question.

     

    “Transaction
Documents” means this Agreement and the schedules and exhibits attached
hereto, the Warrants, the Investor Rights Agreement and the schedules and
exhibits attached thereto, the Certificate of Designation, the Irrevocable
Transfer Agent Instructions and any other agreement, instrument, and other
document executed and delivered pursuant hereto or thereto.

     

    [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

    
      
         

      

      
        8.

        
          

        

      

      
         

      

    

    “Transaction
Stockholder Approval Matters” has the meaning set forth in Section
4.11(a).

     

    “Transfer
Agent” means American Stock Transfer & Trust Company, or any
successor transfer agent for the Company.

     

    “Unit Purchase
Price” means, with respect to the Units sold at the First Unit Closing or
the Second Unit Closing, as applicable, $3.45 per Unit, which equals the sum of
(i) $2.20 and (ii)
$1.25, which represents a $0.125 purchase price for each Warrant
Share.

     

    “Units” has
the meaning set forth in the Recitals to this Agreement.  Units will
not be issued or certificated. The Unit Shares and Warrants are immediately
separable and will be issued separately.

     

    “Unit
Share” and “Unit
Shares” have the respective meaning set forth in the Recitals to this
Agreement.

     

    “Unrestricted
Securities” has the meaning set forth in Section 4.1(c).

     

    “Warrant”
and “Warrants”
have the respective meaning set forth in the Recitals to this
Agreement.

     

    “Warrant Exercise
Cap” means the restrictions set forth in Section 2.3 of each of the
Warrants.

     

    “Warrant Exercise
Price” means $0.22 per Warrant Share.

     

    “Warrant
Shares” has the meaning set forth in the Recitals to this
Agreement.

     

    “Warrant
Ratio” has the meaning set forth in the Recitals to this
Agreement.

     

    ARTICLE
II.

    PURCHASE
AND SALE

     

    2.1           Closings, Delivery and
Payment.

     

    (a)           Purchase and
Sale.  Subject to and upon the terms and conditions set forth
in this Agreement, the Company shall issue and sell to the Purchasers, and the
Purchasers shall purchase from the Company, the Units and the Common Equity
Shares, if any, as applicable, as follows:

     

    (i)           First Unit
Closing.  At the First Unit Closing, the Company shall issue
and sell to each Purchaser, and each Purchaser shall, severally and not jointly,
purchase from the Company, such number of Units equal to the quotient resulting
from dividing (i) the First Unit Closing Subscription Amount for such Purchaser
by (ii) the Unit Purchase Price, rounded down to the nearest whole
Unit.

     

    [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

    
      
         

      

      
        9.

        
          

        

      

      
         

      

    

    (ii)           Second Unit
Closing.  Provided that the Stockholder Approval has been
obtained, following (x) the satisfaction of the Second Closing Milestone
and delivery by the Company of written notice to the Purchasers of the
satisfaction thereof and the election by the Company to consummate the Second
Unit Closing (the “Company
Second Unit
Closing Notice”), or (y) the delivery by the Majority Purchasers of
written notice to the Company on or before the earliest of (A) December 31,
2009, (B) the consummation of the Common Equity Closing or (C) the consummation
of an Alternate Common Stock Financing of the election on behalf of the
Purchasers to consummate the Second Unit Closing (the “Purchaser Second
Unit Closing Notice”), the Company shall issue and sell to each
Purchaser, and each Purchaser shall, severally and not jointly, purchase from
the Company, such number of Units equal to the quotient resulting from dividing
(i) the Second Unit Closing Subscription Amount for such Purchaser by (ii) the
Unit Purchase Price, rounded down to the nearest whole Unit (the “Second Closing
Units”); provided,
however, that if the Company Second Unit Closing Notice has been
delivered, but the Purchaser Second Unit Closing Notice has not been delivered,
the Purchasers shall have no obligation to purchase the Second Closing Units if
the average Closing Bid Price of the Common Stock over the five (5) Trading Days
immediately preceding the delivery of the Company Second Unit Closing Notice is
less than [ * ] unless within ten (10) Trading Days following the delivery of
the Company Second Unit Closing Notice the Majority Purchasers provide the
Company and the Purchasers with written notice of their election, on behalf of
all Purchasers, to purchase the Second Closing Units (the “Majority
Purchaser Second Unit Closing Notice”), provided that the Company may not
deliver a Company Second Unit Closing Notice if, during the five (5) Trading Day
period immediately preceding delivery thereof, the Company was not in compliance
with the disclosure requirements of NASDAQ Marketplace Rule 4310(c)(16) (without
regard to the first proviso thereof) and its SEC Reports, together with any
press release publicly released, contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading.  The Company shall not be
entitled to deliver the Company Second Unit Closing Notice at any time after the
earliest of (AA) the consummation of the Common Equity Closing, (BB) the
consummation of an Alternative Common Stock Financing or (CC) December 31,
2009.  The delivery of the Company Second Unit Closing Notice shall be
in the sole discretion of the Board, and the delivery of the Purchaser Second
Unit Closing Notice or Majority Purchaser Second Unit Closing Notice shall be in
the sole discretion of the Majority Purchasers. For the avoidance of doubt, the
Purchasers shall be permitted to deliver the Purchaser Second Unit Closing
Notice after delivery by the Company of the Company Election Notice and prior to
the consummation of the Common Equity Closing, in which case the consummation of
the Common Equity Closing will not occur until after the consummation of the
Second Unit Closing.

     

    [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

    
      
         

      

      
        10.

        
          

        

      

      
         

      

    

    (iii)          Common Equity
Closing.  Provided that the Stockholder Approval has been
obtained, following the First Unit Closing and the earlier of (i) delivery by
the Company of written notice to the Purchasers of the election by the Company
to consummate the Common Equity Closing on or before the earlier of (A) the
delivery of a Purchaser Put Notice, (B) the consummation of an Alternative
Common Stock Financing and (C) December 31, 2010 (the “Company Election
Notice”) and (ii) delivery by the Lead Purchasers of the Purchaser Put
Notice (in the case of either (i) or (ii) above, the “Common Equity
Closing Notice”), the Company shall issue and sell to each Purchaser, and
each Purchaser shall, severally and not jointly, purchase from the Company, such
number of shares of Common Stock equal to the quotient resulting from dividing
(i) the Common Equity Closing Subscription Amount for such Purchaser by (ii) the
Common Per Share Purchase Price, rounded down to the nearest whole share (the
“Pro Rata
Share”); provided,
however, that the Purchasers shall have no obligation to purchase the
Common Equity Shares if the Majority Purchasers provide written notice to the
Company within ten (10) Trading Days following the delivery of the Company
Election Notice, that the Purchasers will not participate in the Common Equity
Closing (the “Non-Participation
Notice”) or if the gross amount to be received at the Common Equity
Closing is less than the Minimum Aggregate
Common Equity Subscription Amount, taking into account any agreement by a
Purchaser to purchase more than its Pro Rata Share of the shares of Common Stock
to be sold in the Common Equity Closing, and the Company is unable to secure
additional purchasers, acceptable to the Lead Purchasers, to participate in the
Common Equity Closing such that the Minimum Aggregate Common Equity Subscription
Amount is met.  The delivery of the Company Election Notice shall be
in the sole discretion of the Board, and the delivery of the Non-Participation
Notice or the Common Equity Closing Notice shall be in the sole discretion of
the Majority Purchasers.  There shall be no obligation on the part of
the Majority Purchasers to elect to consummate the Common Equity Closing and, by
extension, to cause the Lead Purchasers to deliver a Purchaser Put Notice, but
if such Purchaser Put Notice is delivered, or a Non-Participation Notice is not
timely delivered following a Common Equity Closing Notice, each Purchaser shall
be obligated to purchase its Pro Rata Share of the shares of Common Stock to be
sold in the Common Equity Closing, and if a Purchaser Put Notice is delivered,
the Company shall be obligated to sell the shares of Common Stock to be sold in
the Common Equity Closing.  In the event that any Purchaser does not
satisfy the foregoing obligation, the other Purchasers shall have the right, but
not the obligation, to purchase the Pro Rata Portion of such defaulting
Purchaser.  Notwithstanding any other provision of this Agreement, in
the event the Common Equity Closing is consummated, if any Purchaser fails to
purchase its Pro Rata Share of Common Stock in such Common Equity Closing, then
such Purchaser’s Preferred Stock shall automatically be converted into Common
Stock in such amounts and on such terms as provided in Section 4(m) of the
Certificate of Designation, which shall be the Company’s and each other
Purchaser’s sole and exclusive remedy for such Purchaser’s failure to purchase
its Pro Rata Share in the Common Equity Closing. No later than January 12, 2010,
the Company shall deliver to the Lead Purchasers a Cash Balance Notice
reflecting the Company’s Cash balance as of January 8, 2010 and, if such Cash
Balance Notice sets forth the Company’s Cash balance as greater than $4.0
million as of January 8, 2010, the Lead Purchasers may request until such time
as the Company delivers a Cash Balance Notice that sets forth the Company’s Cash
balance as less than $4.0 million (in which case the Company shall promptly
deliver such requested Cash Balance Notice, which shall be dated as of a recent
practicable date), or the Company may elect to deliver one or more future Cash
Balance Notice(s) at any time prior to the earlier of December 31, 2010 and the
closing of an Alternative Common Stock Financing.

     

    (b)           Closings.  Each
of the First Unit Closing, the Second Unit Closing, if any, and the Common
Equity Closing, if any, shall take place at the offices of Company Counsel, 3175
Hanover Street, Palo Alto, California 94304, on the First Unit Closing Date,
Second Unit Closing Date and Common Equity Closing Date, respectively, or at
such other locations or remotely by facsimile transmission or other electronic
means as the parties may mutually agree.

     

    (c)           Forms of
Payment.

     

    (i)           On
the First Unit Closing Date, (x) each Purchaser shall pay to the Company its
First Unit Closing Subscription Amount in United States dollars and in
immediately available funds, by wire transfer to the Company’s account as set
forth in instructions previously delivered to each Purchaser, (y) the Company
shall deliver to each Purchaser one or more stock certificates, free and clear
of all restrictive and other legends except as expressly provided in Section
4.1(b) hereof, evidencing the number of Unit Shares such Purchaser is acquiring
at the First Unit Closing and (z) the Company shall issue to each Purchaser
a Warrant pursuant to which such Purchaser shall have the right to acquire such
number of Warrant Shares determined by multiplying the number of Unit Shares
such Purchaser is acquiring at the First Unit Closing by the Warrant Ratio and
rounding down to the nearest whole number, in the case of clauses (y) and (z),
duly executed on behalf of the Company and registered in the name of such
Purchaser as set forth on the Stock Certificate Questionnaire included as Exhibit
D.  The Warrants issued and sold at the First Unit Closing
shall have an exercise price equal to the Warrant Exercise Price.

     

    [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

    
      
         

      

      
        11.

        
          

        

      

      
         

      

    

    (ii)           On
the Second Unit Closing Date, if any, (x) each Purchaser shall pay to the
Company its Second Unit Closing Subscription Amount, in United States dollars
and in immediately available funds, by wire transfer to the Company’s account,
as set forth in instructions delivered to each Purchaser not more than ten (10)
nor less than three (3) Business Days prior to the Second Unit Closing Date, (y)
the Company shall deliver to each Purchaser one or more stock certificates, free
and clear of all restrictive and other legends except as expressly provided in
Section 4.1(b) hereof, evidencing the number of Unit Shares such Purchaser is
acquiring at the Second Unit Closing and (z) the Company shall issue to
each Purchaser a Warrant pursuant to which such Purchaser shall have the right
to acquire such number of Warrant Shares determined by multiplying the number of
Unit Shares such Purchaser is acquiring at the Second Unit Closing by the
Warrant Ratio and rounding down to the nearest whole number, in the case of
clauses (y) and (z), duly executed on behalf of the Company and registered in
the name of such Purchaser as set forth on the Stock Certificate Questionnaire
included as Exhibit
D.  The Warrants issued and sold at the Second Unit Closing
shall have an exercise price equal to the Warrant Exercise Price.

     

    (iii)          On
the Common Equity Closing Date, if any, (x) each Purchaser shall pay to the
Company its Common Equity Closing Subscription Amount, in United States dollars
and in immediately available funds, by wire transfer to the Company’s account,
as set forth in instructions delivered to each Purchaser not more than ten (10)
nor less than three (3) Business Days prior to the Common Equity Closing Date,
and (y) the Company shall irrevocably instruct the Transfer Agent to deliver to
each Purchaser one or more stock certificates within three (3) Business Days
after the Common Equity Closing Date, free and clear of all restrictive and
other legends except as expressly provided in Section 4.1(b) hereof, evidencing
the number of Common Equity Shares that such Purchaser is acquiring at the
Common Equity Closing, and duly executed on behalf of the Company and registered
in the name of such Purchaser as set forth on the Stock Certificate
Questionnaire included as Exhibit
D.

     

    2.2           Closing
Deliveries.

     

    (a)           At
the First Unit Closing, the Company shall issue, deliver or cause to be
delivered to each of the Purchasers the following:

     

    (i)           this
Agreement and the Investor Rights Agreement, each duly executed by the
Company;

     

    (ii)          one
or more stock certificates, as provided in Section 2.1(c)(i);

     

    (iii)         a
Warrant, as provided in Section 2.1(c)(i); and

     

    (iv)         a
legal opinion of Company Counsel, dated as of the First Unit Closing Date, and
in the form attached hereto as Exhibit E-1, executed
by such counsel and addressed to the Purchasers.

     

    (b)           At
the Second Unit Closing, the Company shall issue, deliver or cause to be
delivered to each of the Purchasers, the following:

     

    (i)           one
or more stock certificates, as provided in Section 2.1(c)(ii);

     

    (ii)          a
Warrant, as provided in Section 2.1(c)(ii); and

     

    (iii)         a
legal opinion of Company Counsel, dated as of the Second Unit Closing Date, and
in the form attached hereto as Exhibit E-1, executed
by such counsel and addressed to the Purchasers.

     

    [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

    
      
         

      

      
        12.

        
          

        

      

      
         

      

    

     

    (c)           At
the Common Equity Closing, the Company shall issue, deliver or cause to be
delivered to each of the Purchasers, the following:

     

    (i)           a
copy of irrevocable instructions to the Transfer Agent to deliver to each
Purchaser one or more stock certificates, as provided in Section 2.1(c)(iii),
with the original stock certificates delivered within three (3) Business Days of
the Common Equity Closing; and

     

    (ii)          a
legal opinion of Company Counsel, dated as of the Common Equity Closing Date,
and in the form attached hereto as Exhibit E-2, executed
by such counsel and addressed to the Purchasers.

     

    (d)           On
or prior to each Closing, the Company shall issue, deliver or cause to be
delivered to each of the Purchasers, the following:

     

    (i)           a
certificate of the Secretary of the Company (the “Secretary’s
Certificate”), dated as of the First Unit Closing Date, Second Unit
Closing Date or Common Equity Closing Date, as applicable, (a) certifying the
resolutions adopted by the Board or a duly authorized committee thereof
approving the transactions contemplated by this Agreement and the other
Transaction Documents and the issuance of the Securities to be issued at such
Closing and that such resolutions remain in full force and effect, (b) with
respect to the Second Unit Closing and the Common Equity Closing, certifying the
resolutions adopted by the stockholders of the Company approving the issuance of
the Securities to be issued at the Second Unit Closing or the Common Equity
Closing, as applicable, (c) certifying the current versions of the Company’s
certificate of incorporation (including any certificates of designation) and
bylaws, each as amended, and (d) certifying as to the signatures and authority
of Persons signing the Transaction Documents and related documents on behalf of
the Company, in the form attached hereto as Exhibit
G;

     

    (ii)          the
Compliance Certificate referred to in Section 5.1(g), Section 5.3(h), or Section
5.5(i), as applicable;

     

    (iii)         a
certificate evidencing the formation and good standing of the Company issued by
the Secretary of State of the State of Delaware, as of a date within three (3)
Trading Days of the First Unit Closing Date, Second Unit Closing Date or Common
Equity Closing Date, as applicable;

     

    (iv)         a
certificate evidencing the Company’s qualification as a foreign corporation and
good standing issued by each state where the Company is qualified to do business
as a foreign corporation, as of a date within three (3) Trading Days of the
First Unit Closing Date, Second Unit Closing Date or Common Equity Closing Date,
as applicable; and

     

    (v)          a
certified copy of (i) the Company’s current certificate of incorporation, and
any amendments and certificates of designation thereto, as certified by the
Secretary of State of the State of Delaware as of a date within three (3)
Trading Days of the First Unit Closing Date, Second Unit Closing Date or Common
Equity Closing Date, as applicable.

     

    (e)           On
or prior to each applicable Closing, each Purchaser shall deliver or cause to be
delivered to the Company the following, as applicable (the “Purchaser
Deliverables”):

     

    (i)           on
or prior the First Unit Closing, this Agreement and the Investor Rights
Agreement, each duly executed by such Purchaser;

     

    [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

    
      
         

      

      
        13.

        
          

        

      

      
         

      

    

    (ii)           on
or prior to the First Unit Closing, a fully completed and duly executed Stock
Certificate Questionnaire in the form attached hereto as Exhibit
D.

     

    (iii)          with
respect to the First Unit Closing, such Purchaser’s First Unit Closing
Subscription Amount, in United States dollars and in immediately available
funds, by wire transfer to the Company’s account as previously delivered to each
Purchaser in accordance with Section 2.1(c)(i) prior to the First Unit
Closing;

     

    (iv)          with
respect to the Second Unit Closing, such Purchaser’s Second Unit Closing
Subscription Amount, in United States dollars and in immediately available
funds, by wire transfer to the Company’s account as previously delivered to each
Purchaser in accordance with Section 2.1(c)(ii) prior to the Second Unit
Closing; and

     

    (v)          with
respect to the Common Equity Closing, such Purchaser’s Common Equity Closing
Subscription Amount, in United States dollars and in immediately available
funds, by wire transfer to the Company’s account as previously delivered to each
Purchaser in accordance with Section 2.1(c)(iii) prior to the Common Equity
Closing.

     

    ARTICLE
III.

    REPRESENTATIONS
AND WARRANTIES

     

    3.1          Representations and
Warranties of the Company.  The Company hereby represents and
warrants as of the date hereof and as of the First Unit Closing Date, the Second
Unit Closing Date and the Common Equity Closing Date, as applicable (except for
the representations and warranties that speak as of a specific date, which shall
be made as of such date), to each of the Purchasers that, except as otherwise
set forth in the Schedules delivered herewith or at the applicable
Closing:

     

    (a)       
   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 carry on its business as
now conducted and as described in the SEC Reports and to own its
properties.  The Company is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction in which the conduct of
its business or its ownership or leasing of property makes such qualification
necessary, except where the failure to so qualify, individually or in the
aggregate, would not have a Material Adverse Effect.  To the Company’s
Knowledge, no proceeding has been instituted in any jurisdiction revoking,
limiting or curtailing or seeking to revoke, limit or curtail, such power and
authority or qualification. The Company’s sole Subsidiary is Sunesis Europe
Limited, a United Kingdom company, which is a non-operating company with de
minimis assets and liabilities and no business operations.

     

    (b)          Authorization. 
The Company has full corporate power and authority and has taken all requisite
action on the part of the Company, its officers, directors and stockholders
necessary for (i) the authorization, execution and delivery of the
Transaction Documents, (ii) the authorization of the performance of all
obligations of the Company hereunder or thereunder and (iii) the
authorization, issuance, sale and delivery of the Securities in accordance
with Section 4.3 hereof, except for the Required Approvals.

     

    (c)      
    Valid
Agreements.  The Transaction Documents constitute the legal,
valid and binding obligations of the Company, enforceable against the Company in
accordance with their respective terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors’ rights generally.

     

    [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

    
      
         

      

      
        14.

        
          

        

      

      
         

      

    

    (d)     
     Capitalization.  The authorized Capital
Stock of the Company consists of: (i) 100,000,000 shares of Common Stock,
of which 34,409,768 shares are outstanding
on the Execution Date and (ii) 5,000,000 shares of preferred stock, of
which no shares are outstanding on the Execution Date.  All of the
issued and outstanding shares of the Company’s Capital Stock have been duly
authorized and validly issued and are fully paid, nonassessable and free of
preemptive rights.  Except for (i) options to purchase Common Stock or
other equity awards issued to employees, members of the Board and consultants of
the Company pursuant to the equity incentive plans disclosed in the SEC Reports
and (ii) outstanding warrants disclosed in the SEC Reports, there are no
existing options, warrants, calls, preemptive (or similar) rights, subscriptions
or other rights, agreements, arrangements or commitments of any character
obligating the Company to issue, transfer or sell, or cause to be issued,
transferred or sold, any shares of the Capital Stock of the Company or other
equity interests in the Company or any securities convertible into or
exchangeable for such shares of Capital Stock or other equity interests, and
there are no outstanding contractual obligations of the Company to repurchase,
redeem or otherwise acquire any shares of its Capital Stock or other equity
interests.  Except as provided in the Investor Rights Agreement and
that certain Eighth Amended and Restated Investor Rights Agreement, dated August
30, 2004, as amended, no Person has the right to require the Company to register
any securities of the Company under the Securities Act, whether on a demand
basis or in connection with the registration of securities of the Company for
its own account or for the account of any other Person.  The issue and sale
of the Securities will not result in the right of any holder of Company
securities to adjust the exercise, conversion or exchange price under such
securities.

     

    (e)        
  Valid
Issuance.  The Securities have been duly and validly authorized and,
when issued and paid for pursuant to this Agreement, and with respect to the
Warrant Shares, when issued and paid for pursuant to the Warrants, will be
validly issued, fully paid and nonassessable, and will be free of encumbrances
and restrictions (other than those created by the Purchasers), except for
restrictions on transfer set forth in the Transaction Documents or imposed by
applicable securities laws.

     

    (f)        
   Consents.  The
Company is not required to obtain any approval, consent, waiver, authorization
or order of, give any notice to, or make any filing or registration with, any
Governmental Authority or other Person in connection with the execution,
delivery and performance by the Company of the Transaction Documents (including
the issuance of the Securities), other than (i) the filing with the Commission
of one or more Registration Statements in accordance with the requirements of
the Investor Rights Agreement, (ii) filings required by applicable state and
federal securities laws, (iii) the filing of a Notice of Sale of Securities on
Form D with the Commission under Regulation D of the Securities Act, (iv) the
filing of any requisite notices and/or application(s) to the Principal Trading
Market for the issuance and sale of the Securities, and the listing of the
Common Stock for trading or quotation, as the case may be, thereon in the time
and manner required thereby, (v) the filing of the Certificate of Designation
with the Secretary of State of the State of Delaware, (vi) those that have been
made or obtained prior to the date hereof, (vii) the consent of the holders of a
majority of the Registrable Securities (as such term is defined in that certain
Eighth Amended and Restated Investor Rights Agreement, dated August 30, 2004, by
and among the Company and the investors identified on Exhibit A thereto), which
has been obtained prior to the date hereof, and (viii) the Stockholder Approval
(collectively, the “Required
Approvals”).

     

    [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

    
      
         

      

      
        15.

        
          

        

      

      
         

      

    

    (g)           SEC Reports. 
The Company has filed all proxy statements, reports and other documents required
to be filed by it under the Exchange Act.  The Company has made
available to the Purchasers, through the Commission’s EDGAR system, true and
complete copies of (a) the Company’s most recent Annual Report on Form
10-K, (b) the Company’s Quarterly Reports on Form 10-Q for the quarters
ended subsequent to the period covered by such Annual Report, including all
exhibits thereto and documents incorporated by reference therein, and (c) any
other statement, report (including, without limitation, Current Reports on Form
8-K), registration statement or definitive proxy statement filed by the Company
with the Commission during the period commencing subsequent to the period
covered by such Annual Report (the foregoing materials, including the exhibits
thereto and documents incorporated by reference therein, being collectively
referred to herein as the “SEC
Reports” and together with this Agreement and the Schedules to this
Agreement (if any), the “Disclosure
Materials”).  The Company is not aware of any event that
requires the filing of a Current Report on Form 8-K that has not been
filed.  The Company has filed as an exhibit to an SEC Report all
documents required to be filed by Item 601 of Regulation S-K prior to the date
of this Agreement.  As of their respective filing dates, except to the
extent corrected by a subsequent restatement or amendment or superceded by a
subsequent filing, the SEC Reports complied in all material respects with the
requirements of the Securities Act and the Exchange Act and the rules and
regulations of the Commission promulgated thereunder, and none of the SEC
Reports, when filed, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading.  As of the date of this Agreement, the
Company satisfies the registrant requirements set forth in General Instruction
1.A. to Form S-3 for the use of a Registration Statement on Form
S-3.

     

    (h)           Use of
Proceeds.  The net proceeds of the sale of the Securities hereunder
shall be used by the Company for working capital and general corporate
purposes.

     

    (i)      
     No Material Adverse
Change.  Between September 30, 2008 and the date of this Agreement,
except as disclosed in the SEC Reports or in the draft audited financial
statements for the fiscal year ended December 31, 2008 made available to the
Purchasers prior to the execution of this Agreement, there has not
been:

     

    (i) any
material change in the consolidated assets, liabilities, financial condition or
operating results of the Company from that reflected in the financial statements
included in the Company’s Quarterly Report on Form 10-Q for the quarter
ended September 30, 2008;

     

    (ii) any
declaration or payment of any dividend, or any authorization or payment of any
distribution, on any of the Capital Stock of the Company, or any redemption or
repurchase of any securities of the Company (other than in connection with a
termination of employment);

     

    (iii) any
material damage, destruction or loss to any assets or properties of the
Company;

     

    (iv) any
waiver, not in the ordinary course of business, by the Company of a material
right or of a material debt owed to it;

     

    (v) any
change or amendment to the Company’s Amended and Restated Certificate of
Incorporation and Amended and Restated Bylaws, or change to any Material
Contract or arrangement by which the Company is bound or to which its assets or
properties is subject;

     

    (vi) any
transaction entered into by the Company other than in the ordinary course of
business;

     

    (viii)
the loss of the services of any key employee, or material change in the
composition or duties of the senior management of the Company;

     

    (ix) any
commitment or arrangement by the Company to do any of the foregoing;
or

     

    [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

    
      
         

      

      
        16.

        
          

        

      

      
         

      

    

    (x)  any
other event or condition of any character that has had or would reasonably be
expected to have a Material Adverse Effect.

     

    (j)           No Conflict, Breach,
Violation or Default.  Neither the execution, delivery and
performance of the Transaction Documents by the Company nor the consummation of
any of the transactions contemplated hereby (including without limitation the
issuance and sale of the Securities) will (i) conflict with or result in
violation of any of the terms and provisions of the Company’s Amended and
Restated Certificate of Incorporation and Amended and Restated Bylaws, both as
in effect on the date hereof, or (ii) will give rise to the right to terminate
or accelerate the due date of any payment under or result in a breach of any
term or provision of, or constitute a default (or any event which with notice or
lapse of time or both would constitute a default) under, or require any consent
or waiver under or result in the execution or imposition of any Lien upon the
properties or assets of the Company pursuant to the terms of (x) any Material
Contract or (y) any license, permit, statute, rule, regulation, judgment, decree
or order of any governmental agency or body or any court, domestic or foreign,
having jurisdiction over the Company or any of its assets or properties, other
than with respect to clause (y) as would not have a Material Adverse
Effect.

     

    (k)           Tax Matters. 
The Company has timely filed all tax returns required to have been filed by the
Company with all appropriate governmental agencies and timely paid all taxes
shown thereon or otherwise owed by it.  The charges, accruals and reserves
on the books of the Company in respect of taxes for all fiscal periods are
adequate in all material respects, and there are no material unpaid assessments
against the Company.  All taxes and other assessments and levies that the
Company is required to withhold or to collect for payment have been duly
withheld and collected and paid to the proper governmental entity or third party
when due.  There are no tax Liens or claims pending or, to the Company’s
Knowledge, threatened against the Company or any of its assets or property,
other than Permitted Liens.  To the Company’s Knowledge, there are no tax
audits or investigations pending.  There are no outstanding tax
sharing agreements or other such arrangements between the Company and any other
Person.

     

    (l)           Title to
Properties.  The Company has good and marketable title to all
properties and assets owned by it, in each case free from Liens and defects,
other than Permitted Liens.  The Company holds any leased real or personal
property under valid and enforceable leases.  The Company is in material
compliance with all material terms of each lease to which it is a party or is
otherwise bound.  The Company does not own any real
property.

     

    (m)           Certificates, Authorities
and Permits.  The Company possesses adequate certificates,
approvals, authorities or permits (“Permits”)
issued by governmental agencies or bodies necessary to own, lease and license
its assets and properties and conduct the business now operated by it, all of
which are valid and in full force and effect, except where the lack of such
Permits, individually or in the aggregate, would not be reasonably expected to
have a Material Adverse Effect.  The Company has performed in all material
respects all of its material obligations with respect to such Permits and no
event has occurred that allows, or after notice or lapse of time, would allow,
revocation or termination thereof. The Company has not received any written
notice of proceedings relating to the revocation or modification of any such
certificate, authority or permit that, if determined adversely to the Company,
would reasonably be expected to, individually or in the aggregate, have a
Material Adverse Effect.

     

    (n)           Labor
Matters.

     

    (i)           The
Company is not a party to or bound by any collective bargaining agreement. 
The Company has not violated in any material respect any laws, regulations,
orders or contract terms, affecting the collective bargaining rights of
employees, labor organizations or any laws, regulations or orders affecting
employment discrimination, equal opportunity employment or employees’ health,
safety, welfare, wages and hours.

     

    [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

    
      
         

      

      
        17.

        
          

        

      

      
         

      

    

    (ii)           (A) There
are no labor disputes existing, or to the Company’s Knowledge, threatened,
involving strikes, slow-downs, work stoppages, job actions, disputes, lockouts
or any other disruptions of or by the Company’s employees, (B) there are no
unfair labor practices or petitions for election pending or, to the Company’s
Knowledge, threatened before the National Labor Relations Board or any other
federal, state or local labor commission relating to the Company’s employees,
(C) no demand for recognition or certification heretofore made by any labor
organization or group of employees is pending with respect to the Company and
(D) to the Company’s Knowledge, the Company enjoys good labor and employee
relations with its employees.

     

    (iii)         The
Company is in compliance in all material respects with applicable laws
respecting employment (including laws relating to classification of employees
and independent contractors) and employment practices, terms and conditions of
employment, wages and hours, severance and bonuses, and immigration and
naturalization.  No claims are pending against the Company before the Equal
Employment Opportunity Commission or any other administrative body or in any
court asserting any violation of Title VII of the Civil Rights Act of 1964, the
Age Discrimination Act of 1967, 42 U.S.C. §§ 1981 or 1983 or any other
federal, state or local law, statute or ordinance barring discrimination in
employment.

     

    (iv)         The
Company is not a party to, or bound by, any employment or other contract or
agreement that contains any severance, termination pay or change of control
liability or obligation, including, without limitation, any “excess parachute
payment,” as defined in Section 280G(b) of the IRC other than as set
forth in the Company’s SEC Reports.

     

    (o)           Intellectual
Property.

     

    (i)           To
the Company’s Knowledge, none of the Intellectual Property of the Company is
invalid or unenforceable.  No Intellectual Property owned or licensed by
the Company that is necessary for the conduct of Company’s business as currently
conducted or as proposed to be conducted as described in the SEC Reports is
involved in any cancellation, dispute or litigation, and, to the Company’s
Knowledge, no such action is threatened.  No issued patent owned or
exclusively licensed by the Company is involved in any interference, reissue,
re-examination or opposition proceeding.

     

    (ii)          All
of the in-bound licenses and sublicenses and consent, royalty or other
agreements concerning Intellectual Property to which the Company is a party
(other than  generally commercially available, non-custom, off-the-shelf
software application programs having a retail acquisition price of less than
$50,000 per license) that are necessary for the conduct of the Company’s
business as currently conducted and as proposed to be conducted as described in
the SEC Reports (collectively, “In-Bound License
Agreements”) are valid and binding obligations of the Company,
enforceable in accordance with their terms, except to the extent that
enforcement thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or other similar laws affecting the
enforcement of creditors’ rights generally, and the Company is not in material
breach of any of its obligations under any such In-Bound License
Agreements.

     

    (iii)         To
the Company’s Knowledge, the Company owns or has the valid right to use all of
the Intellectual Property, including third party Intellectual Property and
Confidential Information, that is necessary for the conduct of the Company’s
business as currently conducted and as proposed to be conducted as described in
the SEC Reports and for the ownership, maintenance and operation of the
Company’s properties and assets, free and clear of all liens, encumbrances,
adverse claims or, with respect to Intellectual Property owned or exclusively
licensed by the Company, obligations to license such Intellectual Property,
other than licenses to third parties of the Intellectual Property owned by the
Company that  are set forth on Schedule
3.1(o)(iii). 

     

    [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

    
      
         

      

      
        18.

        
          

        

      

      
         

      

    

    (iv)          To
the Company’s Knowledge, (1) the conduct of the Company’s business as currently
conducted or as proposed to be conducted as described in the SEC Reports, (2)
the use or exploitation by or on behalf of the Company of any Intellectual
Property owned by the Company, or (3) the use or exploitation by or on behalf of
the Company of any Intellectual Property licensed by the Company, does not
infringe, misappropriate or otherwise materially impair or conflict with any
Intellectual Property rights of any third party. To the Company’s Knowledge, the
Intellectual Property owned or exclusively licensed by the Company which is
necessary for the conduct of Company’s business as currently conducted or as
proposed to be conducted as set forth in the SEC Reports is not being Infringed
by any third party.  There is no litigation, court order, claim or
assertion pending or outstanding or, to the Company’s Knowledge, threatened,
that seeks to limit or challenge the ownership, use, validity or enforceability
of any Intellectual Property owned or licensed by the Company or the Company’s
use of any Intellectual Property owned by a third party.

     

    (v)          The
consummation of the transactions contemplated hereunder and under the other
Transaction Documents will not result in the (1) loss, material impairment
of or material restriction on any of the Intellectual Property or Confidential
Information owned by the Company which is necessary for the conduct of Company’s
business as currently conducted or as proposed to be conducted as set forth in
the SEC Reports or (2) material breach of any In-Bound License
Agreement.

     

    (vi)         The
Company has taken reasonable steps to protect the Company’s rights in
Intellectual Property and Confidential Information owned or licensed by the
Company.  Each employee, independent contractor, and consultant of the
Company has executed an agreement to maintain the confidentiality of such
Confidential Information and a proprietary information and inventions agreement
in the form(s) as set forth on Schedule
3.1(o)(vi).  To the Company’s Knowledge, and except as necessary to
secure rights through information filings in U.S. and other patent offices and
pursuant to non-disclosure agreements entered into between the Company and third
parties in the ordinary course of business, there has been no disclosure of the
Company’s Intellectual Property or Confidential Information to any third
party.  To the Company’s Knowledge, there have been no misappropriations or
infringements by any Person of any Intellectual Property used in the conduct or
operation of the Company’s business.

     

    (p)           Environmental
Matters.  The Company is not in violation of any statute, rule,
regulation, decision or order of any governmental agency or body or any court,
domestic or foreign, relating to the use, disposal or release of Hazardous
Materials or relating to the protection or restoration of the environment or
human exposure to Hazardous Materials (collectively, “Environmental
Laws”).  To the Company’s Knowledge, the Company does not own or
operate any real property contaminated with any substance that is subject to any
Environmental Laws, is not liable for any off-site disposal or contamination
pursuant to any Environmental Laws, and is not subject to any claim relating to
any Environmental Laws.  There is no pending or, to the Company’s
Knowledge, threatened investigation that might lead to such a
claim.

     

    (q)           Litigation. 
There are no pending or, to the Company’s Knowledge, threatened actions, suits,
proceedings, inquiries or investigations against or affecting the Company or any
of its properties or any of the Company’s officers and directors in their
capacities as such.  The Company is not party to or subject to the
provisions of any injunction, judgment, decree or order of any court, regulatory
body, administrative agency or other governmental body.

     

    [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

    
      
         

      

      
        19.

        
          

        

      

      
         

      

    

    (r)           Financial
Statements.  The financial statements included in each SEC Report
and the draft audited financial statements for the period ended December 31,
2008 made available to the Purchasers prior to execution of this Agreement
present fairly, in all material respects, the financial position of the Company
as of the dates shown and its results of operations and cash flows for the
periods shown, and such financial statements have been prepared in conformity
with GAAP (except as may be disclosed therein or in the notes thereto, and, in
the case of quarterly financial statements, as permitted by Form 10-Q under
the Exchange Act).  Except as set forth in the financial statements of the
Company included in the SEC Reports and the draft audited financial statements
for the period ended December 31, 2008 made available to the Purchasers prior to
execution of this Agreement, the Company has not incurred any liabilities,
contingent or otherwise, except those incurred in the ordinary course of
business, consistent with past practices since the date of such financial
statements, none of which, individually or in the aggregate, would reasonably be
expected to have a Material Adverse Effect.

     

    (s)           Insurance
Coverage.  The Company maintains in full force and effect insurance
coverage that is customary for comparably situated companies for the business
being conducted and properties owned or leased by the Company.

     

    (t)           Questionable
Payments. 
Neither the Company nor any of its directors, officers or
employees,  or, to the Company’s Knowledge, any of its agents or other
Persons acting on behalf of the Company, has on behalf of the Company or in
connection with its business: (a) used any corporate funds for unlawful
contributions, gifts, entertainment or other unlawful expenses relating to
political activity; (b) made any direct or indirect unlawful payments to
any governmental officials or employees from corporate funds;
(c) established or maintained any unlawful or unrecorded fund of corporate
monies or other assets; (d) made any false or fictitious entries on the
books and records of the Company; or (e) made any unlawful bribe, rebate,
payoff, influence payment, kickback or other unlawful payment of any
nature.

     

    (u)           Transactions With Affiliates
and Employees.  Except as set forth in the SEC Reports and
other than the grant of stock options or other equity awards that are not
individually or in the aggregate material in amount, none of the officers or
directors of the Company and, to the Company’s Knowledge, none of the employees
of the Company, is presently a party to any transaction with the Company or to a
presently contemplated transaction (other than for services as employees,
officers and directors) that would be required to be disclosed pursuant to Item
404 of Regulation S-K promulgated under the Securities Act that has not been
disclosed.

     

    (v)           Internal
Controls.  The Company is in material compliance with the provisions
of the Sarbanes-Oxley Act of 2002 currently applicable to the Company.  The
Company maintains a system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance with
management’s general or specific authorizations, (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with GAAP and to maintain asset accountability, (iii) access to
assets is permitted only in accordance with management’s general or specific
authorization, and (iv) the recorded accountability for assets is compared
with the existing assets at reasonable intervals and appropriate action is taken
with respect to any differences. The Company has established disclosure controls
and procedures (as defined in Exchange Act Rules 13a-15 and 15d-15) for the
Company and designed such disclosure controls and procedures to ensure that
material information relating to the Company is made known to the certifying
officers by others within those entities.  The Company’s certifying
officers have evaluated the effectiveness of the Company’s controls and
procedures as of the end of the period covered by the most recently filed
periodic report under the Exchange Act (such date, the “Evaluation
Date”).  The Company presented in its most recently filed periodic
report under the Exchange Act the conclusions of the certifying officers about
the effectiveness of the disclosure controls and procedures based on their
evaluations as of the Evaluation Date.  Since the Evaluation Date, there
have been no significant changes in the Company’s internal controls (as such
term is defined in Item 307(b) of Regulation S-K) or, to the Company’s
Knowledge, in other factors that could significantly affect the Company’s
internal controls.  The books, records and accounts of the Company
accurately and fairly reflect, in all material respects, the transactions in,
and dispositions of, the assets of, and the results of operations of, the
Company.  The Company maintains and will continue to maintain a standard
system of accounting established and administered in accordance with GAAP and
the applicable requirements of the Exchange Act.

     

    [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

    
      
         

      

      
        20.

        
          

        

      

      
         

      

    

    (w)          Independent
Accountants.  The Company has engaged an independent registered
public accounting firm as required by the Exchange Act and the rules and
regulations of the Commission thereunder.

     

    (x)           Regulatory
Compliance.  The human clinical trials, animal studies and other
preclinical tests conducted by the Company or in which the Company has
participated or that are described in the SEC Reports or the results of which
are referred to in the SEC Reports, and such studies and tests conducted on
behalf of the Company or that the Company intends to rely on in support of
regulatory approval by the United States Food and Drug Administration (the
“FDA”) or
foreign regulatory agencies, were and, if still pending, are being conducted in
all material respects in accordance with experimental protocols, procedures and
controls generally used by qualified experts in the preclinical or clinical
study of new drugs. The descriptions of the results of such studies, test and
trials contained in the SEC Reports are accurate and complete in all material
respects, and, except as set forth in the SEC Reports, to the Company’s
Knowledge, there are no other trials, studies or tests, the results of which the
Company believes reasonably call into question the clinical trial results
described or referred to in the SEC Reports when viewed in the context in which
such results are described and the clinical stage of development.  The
Company has not received any notices or correspondence from the FDA or any other
domestic or foreign governmental agency requiring the termination, suspension or
material modification, other than modifications customarily implemented during
the drug development process, of any preclinical tests or clinical trials
conducted by or on behalf of the Company or in which the Company has
participated that are described in the SEC Reports or the results of which are
referred to in the SEC Reports.

     

    (y)           Material
Contracts.  The description of the Material Contracts, documents or
other agreements contained in the SEC Reports (as the case may be) reflect in
all material respects the terms of the underlying contract, document or other
agreement.  Each such Material Contract, document or other agreement
is in full force and effect and is valid and enforceable by and against the
Company in accordance with its terms.  The Company is not in default in the
observance or performance of any term or obligation to be performed by it under
any such agreement, and no event has occurred which with notice or lapse of time
or both would constitute such a default, in any such case which default or
event, individually or in the aggregate, would result in a Material Adverse
Effect.

     

    (z)           Certain
Fees.  Except for the fees paid to Jefferies & Company,
Inc., Cowen & Company and RBC Capital Markets Corporation as a result of the
transactions contemplated by this Agreement (the “Placement Agent
Fees”) (which Placement Agent Fees are being paid by the Company), no
Person will have, as a result of the transactions contemplated by this
Agreement, any valid right, interest or claim against or upon the Company or a
Purchaser for any commission, fee or other compensation pursuant to any
agreement, arrangement or understanding entered into by or on behalf of the
Company. The Company shall indemnify, pay, and hold each Purchaser harmless
against, any liability, loss or expense (including, without limitation,
attorneys’ fees and out-of-pocket expenses) arising in connection with any such
right, interest or claim.

     

    [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

    
      
         

      

      
        21.

        
          

        

      

      
         

      

    

    (aa)          No Directed Selling Efforts
or General Solicitation.  Neither the Company nor any Person
acting on its or its behalf has conducted any “general solicitation” or “general
advertising” (as those terms are used in Regulation D) in connection with the
offer or sale of any of the Securities.

     

    (bb)          No Integrated
Offering.  Assuming the accuracy of the Purchasers’
representations and warranties set forth in Section 3.2 of this Agreement,
neither the Company nor any Person acting on its behalf has, directly or
indirectly, at any time within the past six months, made any offers or sales of
any Company security or solicited any offers to buy any security under
circumstances that would (i) eliminate the availability of the exemption from
registration under Regulation D under the Securities Act in connection with the
offer and sale by the Company of the Securities as contemplated hereby or (ii)
cause the offering of the Securities pursuant to the Transaction Documents to be
integrated with prior offerings by the Company for purposes of any applicable
law, regulation or stockholder approval provisions, including, without
limitation, under the rules and regulations of any Trading Market on which any
of the securities of the Company are listed or designated.

     

    (cc)          Listing and Maintenance
Requirements.  The Company’s Common Stock is registered
pursuant to Section 12(b) or 12(g) of the Exchange Act, and the Company has
taken no action designed to terminate the registration of the Common Stock under
the Exchange Act nor has the Company received any notification that the
Commission is contemplating terminating such registration.  The
Company has not, in the 12 months preceding the date hereof, received written
notice from any Trading Market on which the Common Stock is or has been listed
or quoted to the effect that the Company is not in compliance with the listing
or maintenance requirements of such Trading Market, except as set forth on Schedule
3.1(cc).  As of the date hereof, the Company is in compliance
in all material respects with the listing and maintenance requirements for
continued trading of the Common Stock on the Principal Trading Market, except as
set forth on Schedule
3.1(cc).

     

    (dd)          Investment
Company.  The Company is not required to be registered as, and
is not an Affiliate of, and immediately following the First Unit Closing, Second
Unit Closing or Common Equity Closing, as applicable, will not be required to
register as, an “investment company” within the meaning of the Investment
Company Act of 1940, as amended.

     

    (ee)          Off Balance Sheet
Arrangements.  There is no transaction, arrangement, or other
relationship between the Company and an unconsolidated or other off balance
sheet entity that is required to be disclosed by the Company in its Exchange Act
filings and is not so disclosed or that otherwise would have a Material Adverse
Effect.

     

    (ff)           Acknowledgment Regarding
Purchasers’ Purchase of Securities.  The Company acknowledges and
agrees that each of the Purchasers is acting solely in the capacity of an arm’s
length purchaser with respect to the Transaction Documents and the transactions
contemplated hereby and thereby.  The Company further acknowledges that no
Purchaser is acting as a financial advisor or fiduciary of the Company (or in
any similar capacity) with respect to the Transaction Documents and the
transactions contemplated thereby and any advice given by any Purchaser or its
representatives or agents in connection with the Transaction Documents and the
transactions contemplated hereby and thereby is merely incidental to the
Purchasers’ purchase of the Securities.

     

    (gg)          No Additional
Agreements.  The Company does not have any agreement or
understanding with any Purchaser with respect to the transactions contemplated
by the Transaction Documents other than as specified in the Transaction
Documents.

     

    [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

    
      
         

      

      
        22.

        
          

        

      

      
         

      

    

    (hh)         Solvency.  After
giving effect to the First Unit Closing, Second Unit Closing or Common Equity
Closing, as applicable, including, without limitation, the expenses to be
incurred by the Company in connection herewith, the Company will not be
insolvent, left with unreasonably small capital with which to engage in its
business or have incurred debts beyond its ability to pay such debts as they
mature.

     

    (ii)           Change of Control
Benefits.  Neither the consummation of any Change of Control
(either alone or in connection with any other event, including any termination
of employment or service), will (i) result in any payment (including any bonus,
golden parachute or severance payment) becoming due to any employee or
consultant of the Company, (ii) result in any forgiveness of indebtedness owing
by any employee or consultant of the Company to the Company or, to the Company’s
Knowledge, owing by any employee  or consultant to any third party,
(iii) materially increase the benefits payable by the Company, or (iv) result in
any acceleration of the time of payment or vesting of any such
benefits.

     

    (jj)           Voting
Agreements.  To the Company’s Knowledge, no stockholder of the
Company has entered into any agreement with respect to the voting of Capital
Stock of the Company.

     

    (kk)         Disclosure.  None
of the Transaction Documents (including this Agreement) or the exhibits and
schedules hereto or thereto (including this Agreement) contain any untrue
statement of a material fact nor omit to state a material fact necessary in
order to the make the statements contained therein, in light of the
circumstances in which they are made, not misleading.

     

    (ll)           Stockholder
Approval.  No vote of the Company’s stockholders is required in
connection with the issuance and sale of the Securities in the First Unit
Closing or any of the other transactions contemplated by the Transaction
Documents with respect to the First Unit Closing. 

     

    3.2           Representations and
Warranties of the Purchasers.  Each Purchaser hereby, for
itself and for no other Purchaser, represents and warrants as of the date
hereof, and as of (A) the First Unit Closing Date, the Second Unit Closing Date
and the Common Equity Closing Date, as applicable (expect for the
representations and warranties that speak as of a specific date, which shall be
made as of such date), to the Company as follows:

     

    (a)           Organization;
Authority.  Such Purchaser is an entity duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization, with the requisite corporate or partnership power and authority to
enter into and to consummate the transactions contemplated by the applicable
Transaction Documents and otherwise to carry out its obligations hereunder and
thereunder.  To the extent that Purchaser is an entity, the execution,
delivery and performance by such Purchaser of the transactions contemplated by
this Agreement have been duly authorized by all necessary corporate or, if such
Purchaser is not a corporation, such partnership, limited liability company or
other applicable like action, on the part of such Purchaser.  Each of
this Agreement and the Investor Rights Agreement has been duly executed by such
Purchaser, and when delivered by such Purchaser in accordance with the terms
hereof, will constitute the valid and legally binding obligation of such
Purchaser, enforceable against it in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally the enforcement of, creditors’ rights and remedies or by
other equitable principles of general application.

     

    [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

    
      
         

      

      
        23.

        
          

        

      

      
         

      

    

    (b)           No
Conflicts.  The execution, delivery and performance by such
Purchaser of this Agreement and the Investor Rights Agreement and the
consummation by such Purchaser of the transactions contemplated hereby and
thereby will not (i) result in a violation of the organizational documents of
such Purchaser (to the extent an entity), (ii) conflict with, or constitute a
default (or an event which with notice or lapse of time or both would become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, any agreement, indenture or instrument to which
such Purchaser is a party, or (iii) result in a violation of any law, rule,
regulation, order, judgment  or decree (including federal and state
securities laws) applicable to such Purchaser, except in the case of clauses
(ii) and (iii) above, for such conflicts, defaults, rights or violations which
would not, individually or in the aggregate, reasonably be expected to have a
material adverse effect on the ability of such Purchaser to perform its
obligations hereunder.

     

    (c)           Investment
Intent.  Such Purchaser understands that the Securities are
“restricted securities” and have not been registered under the Securities Act or
any applicable state securities law and is acquiring the Securities as principal
for its own account and not with a view to, or for distributing or reselling
such Securities or any part thereof in violation of the Securities Act or any
applicable state securities laws; provided, however, that by making the
representations herein, such Purchaser does not agree to hold any of the
Securities for any minimum period of time and reserves the right, subject to the
provisions of this Agreement and the Investor Rights Agreement, at all times to
sell or otherwise dispose of any or all of the Warrant Shares or the Shares
pursuant to an effective registration statement under the Securities Act or
under an exemption from such registration and in compliance with applicable
federal and state securities laws.  Such Purchaser (to the extent an
entity) is acquiring the Securities hereunder in the ordinary course of its
business. Such Purchaser does not presently have any agreement, plan or
understanding, directly or indirectly, with any Person to distribute or effect
any distribution of any of the Securities (or any securities which are
derivatives thereof) to or through any Person; such Purchaser is not a
registered broker-dealer under Section 15 of the Exchange Act or an entity
engaged in a business that would require it to be so registered as a
broker-dealer.

     

    (d)           Purchaser
Status.  At the time such Purchaser was offered the Securities,
it was, and at the date hereof it is, and on each date on which it exercises any
Warrants, it will be, an “accredited investor” as defined in Rule 501(a) of
Regulation D promulgated under the Securities Act.

     

    (e)           General
Solicitation.  Such Purchaser is not purchasing the Securities
as a result of any advertisement, article, notice or other communication
regarding the Securities published in any newspaper, magazine or similar media
or broadcast over television or radio or presented at any seminar or any other
general advertisement.

     

    (f)           Experience of Such
Purchaser.  Such Purchaser, either alone or together with its
representatives, has such knowledge, sophistication and experience in business
and financial matters so as to be capable of evaluating the merits and risks of
the prospective investment in the Securities, and has so evaluated the merits
and risks of such investment.  Such Purchaser is able to bear the
economic risk of an investment in the Securities and, at the present time, is
able to afford a complete loss of such investment.

     

    (g)           Access to
Information.  Such Purchaser acknowledges that it has had the
opportunity to review the Disclosure Materials and has been afforded (i) the
opportunity to ask such questions as it has deemed necessary of, and to receive
answers from, representatives of the Company concerning the terms and conditions
of the offering of the Securities and the merits and risks of investing in the
Securities; (ii) access to information about the Company and its respective
financial condition, results of operations, business, properties, management and
prospects sufficient to enable it to evaluate its investment; and (iii) the
opportunity to obtain such additional information that the Company possesses or
can acquire without unreasonable effort or expense that is necessary to make an
informed investment decision with respect to the investment. Neither such
inquiries nor any other investigation conducted by or on behalf of such
Purchaser or its representatives or counsel shall modify, amend or affect such
Purchaser's right to rely on the truth, accuracy and completeness of the
Disclosure Materials and the Company's representations and warranties contained
in the Transaction Documents.

     

    [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

    
      
         

      

      
        24.

        
          

        

      

      
         

      

    

    (h)           Certain Trading
Activities.  Other than with respect to the transactions
contemplated herein, since the time that such Purchaser was first contacted by
the Company, the Placement Agent or any other Person regarding the transactions
contemplated hereby until the date hereof, neither the Purchaser nor any
Affiliate of such Purchaser which (x) had knowledge of the transactions
contemplated hereby, (y) has or shares discretion relating to such Purchaser’s
investments or trading or information concerning such Purchaser’s investments,
including in respect of the Securities, and (z) is subject to such Purchaser’s
review or input concerning such Affiliate’s investments or trading
(collectively, “Trading
Affiliates”) has
directly or indirectly, nor has any Person acting on behalf of or pursuant to
any understanding with such Purchaser or Trading Affiliate, effected or agreed
to effect any transactions in the securities of the Company (including, without
limitation, any Short Sales involving the Company’s
securities).  Notwithstanding the foregoing, in the case of a
Purchaser and/or Trading Affiliate that is, individually or collectively, a
multi-managed investment vehicle whereby separate portfolio managers manage
separate portions of such Purchaser's or Trading Affiliate’s assets and the
portfolio managers have no direct knowledge of the investment decisions made by
the portfolio managers managing other portions of such Purchaser's or Trading
Affiliate’s assets, the representation set forth above shall apply only with
respect to the portion of assets managed by the portfolio manager that has
knowledge about the transactions contemplated by this
Agreement.  Other than to other Persons who are parties to this
Agreement, such Purchaser has maintained the confidentiality of all disclosures
made to it in connection with this transaction (including the existence and
terms of this transaction).

     

    (i)            Brokers and
Finders.  Except for the Placement Agent Fees, no Person will
have, as a result of the transactions contemplated by this Agreement, any valid
right, interest or claim against or upon the Company or any Purchaser for any
commission, fee or other compensation pursuant to any agreement, arrangement or
understanding entered into by or on behalf of the Purchaser.

     

    (j)          
 Independent
Investment Decision.  Such Purchaser has independently
evaluated the merits of its decision to purchase Securities pursuant to the
Transaction Documents, and such Purchaser confirms that it has not relied on the
advice of any other Purchaser’s business and/or legal counsel in making such
decision.  Such Purchaser understands that nothing in this Agreement
or any other materials presented by or on behalf of the Company to the Purchaser
in connection with the purchase of the Securities constitutes legal, tax or
investment advice.

     

    (k)           Reliance on
Exemptions.  Such Purchaser understands that the Securities
being offered and sold to it in reliance on specific exemptions from the
registration requirements of United States federal and state securities laws and
that the Company is relying in part upon the truth and accuracy of, and such
Purchaser’s compliance with, the representations, warranties, agreements,
acknowledgements and understandings of such Purchaser set forth herein in order
to determine the availability of such exemptions and the eligibility of such
Purchaser to acquire the Securities.

     

    (l)         
  No
Governmental Review.  Such Purchaser understands that no United
States federal or state agency or any other government or governmental agency
has passed on or made any recommendation or endorsement of the Securities or the
fairness or suitability of the investment in the Securities nor have such
authorities passed upon or endorsed the merits of the offering of the
Securities.

     

    (m)          Regulation
M.  Such Purchaser is aware that the anti-manipulation rules of
Regulation M under the Exchange Act may apply to sales of Common Stock and other
activities with respect to the Common Stock by the Purchasers.

     

    (n)           Residency.  Such
Purchaser’s principal executive offices (or residence, in the case of a
Purchaser that is an individual) are in the jurisdiction set forth immediately
below Purchaser’s name on the applicable signature page attached
hereto.

     

    [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

    
      
         

      

      
        25.

        
          

        

      

      
         

      

    

    (o)           Complete
Agreement.  No Purchaser has made or makes any representations
or warranties with respect to the transactions contemplated hereby other than
those specifically set forth in this Article III.

     

    ARTICLE
IV.

    OTHER
AGREEMENTS OF THE PARTIES

     

    4.1           Transfer
Restrictions.

     

    (a)           Compliance with
Laws.  Notwithstanding any other provision of this Article IV,
each Purchaser covenants that the Securities may be disposed of only pursuant to
an effective registration statement under, and in compliance with the
requirements of, the Securities Act, or pursuant to an available exemption from,
or in a transaction not subject to, the registration requirements of the
Securities Act, and in compliance with any applicable state and federal
securities laws.  In connection with any transfer of the Securities
other than (i) pursuant to an effective registration statement, (ii) to the
Company, (iii) to an Affiliate of a Purchaser, (iv) pursuant to Rule 144 (provided that the Purchaser provides
the Company with reasonable assurances (in the form of seller and broker
representation letters) that the securities may be sold pursuant to such rule)
or Rule 144A or (v) pursuant to Rule 144 following the applicable holding
period, the Company may require the transferor thereof to provide to the Company
an opinion of counsel selected by the transferor and reasonably acceptable to
the Company, the form and substance of which opinion shall be reasonably
satisfactory to the Company, to the effect that such transfer does not require
registration of such transferred Securities under the Securities
Act.  As a condition of transfer of any Securities other than
Unrestricted Securities (as defined below), any such transferee shall agree in
writing to be bound by the terms of this Agreement and shall have the rights of
a Purchaser under this Agreement and the Investor Rights Agreement.

     

    (b)           Legends.  Each
of the Warrants and the certificates evidencing the Shares shall bear any legend
as required by the “blue sky” laws of any state and a restrictive legend in
substantially the following form, as applicable, until such time as they are not
required under Section 4.1(c) (and a stock transfer order may be placed against
transfer of the certificates for the Shares):

     

    
      [NEITHER
THESE SECURITIES NOR THE SECURITES ISSUABLE UPON EXERCISE OR CONVERSION OF THESE
SECURITIES HAVE BEEN REGISTERED] [THESE SECURITIES HAVE NOT BEEN
REGISTERED] 
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR
APPLICABLE STATE SECURITIES LAWS.  THE SECURITIES MAY NOT BE OFFERED
FOR SALE, SOLD, TRANSFERRED OR ASSIGNED EXCEPT AS PROVIDED BY ARTICLE IV OF THAT
CERTAIN SECURITIES PURCHASE AGREEMENT, DATED AS OF MARCH 31, 2009, BY AND AMONG
SUNESIS PHARMACEUTICALS, INC. AND THE PURCHASERS IDENTIFIED ON THE SIGNATURE
PAGES THERETO.

    

     

    In
addition, if any Purchaser is an Affiliate of the Company, the Warrants and the
certificates evidencing the Shares issued to such Purchaser shall bear a
customary “affiliates” legend.

     

    [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

    
      
         

      

      
        26.

        
          

        

      

      
         

      

    

    (c)           Removal of
Legends.  The legend set forth in Section 4.1(b) above shall be
removed and the Company shall issue a certificate without such legend or any
other legend to the holder of the applicable Securities upon which it is stamped
or issue to such holder by electronic delivery at the applicable balance account
at DTC, if (i) such Securities are sold or transferred pursuant to an effective
Registration Statement covering the resale of such Securities by the Purchasers,
(ii) such Securities are sold or transferred pursuant to Rule 144 (if the
transferor is not an Affiliate of the Company), or (iii) such Securities are
eligible for sale without any restrictions under Rule 144 (any Securities
meeting any of such criteria being referred to as “Unrestricted
Securities”).  Following such time as a legend is no longer
required for certain Securities, the Company will no later than three (3)
Trading Days (or such shorter time as may in the future be required pursuant to
applicable law or regulation for the settlement of trades in securities on the
Principal Trading Market) following the delivery by a Purchaser to the Company
or the Transfer Agent (with notice to the Company) of a legended certificate
representing such Securities (endorsed or with stock powers attached, signatures
guaranteed if so required by the Transfer Agent in the ordinary course of
business, and otherwise in form necessary to affect the reissuance and/or
transfer), deliver or cause to be delivered to the transferee of such Purchaser
or such Purchaser, as applicable, a certificate representing such Securities
that is free from all restrictive and other legends.  The Company may
not make any notation on its records or give instructions to the Transfer Agent
that enlarge the restrictions on transfer set forth in this Section
4.1.  In lieu of delivering physical certificates, upon the written
request of any Purchaser, the Company shall use its commercially reasonable
efforts to transmit certificates for Securities subject to legend removal
hereunder to such Purchaser by crediting the account of the transferee’s
Purchaser’s prime broker with DTC through its Deposit Withdrawal Agent
Commission (DWAC) system, or any successor system thereto.  The time
periods for delivery and penalties described herein shall apply to the
electronic transmittals described herein.  Any delivery not effected
by electronic transmission shall be effected by delivery of physical
certificates.  Each Purchaser agrees that the removal of the
restrictive legend from any certificates representing Securities as set forth in
this Section 4.1(c) above is predicated upon the Company’s reliance that such
Purchaser would sell, transfer, assign, pledge, hypothecate or otherwise dispose
of such Securities pursuant to either the registration requirements of the
Securities Act, including any applicable prospectus delivery requirements, or an
exemption therefrom, and that if such Securities are sold pursuant to a
Registration Statement, they will be sold in compliance with the plan of
distribution set forth therein.

     

    (d)           Irrevocable Transfer Agent
Instructions.  The Company shall execute and deliver
irrevocable instructions to its Transfer Agent, which irrevocable instructions
shall be acknowledged in writing by the Transfer Agent, in the form of Exhibit F attached
hereto (the “Irrevocable
Transfer Agent Instructions”). The Company represents and warrants that
no instruction other than the Irrevocable Transfer Agent Instructions or
instructions consistent therewith referred to in this Section 4.1(d) will be
given by the Company to its transfer agent in connection with this Agreement,
and that the Shares shall otherwise be freely transferable on the books and
records of the Company as and to the extent provided in this Agreement, the
other Transaction Documents and applicable law. The Company acknowledges that a
breach by it of its obligations under this Section 4.1(d) will cause irreparable
harm to a Purchaser. Accordingly, the Company acknowledges that the remedy at
law for a breach of its obligations under this Section 4.1(d) will be inadequate
and agrees, in the event of a breach or threatened breach by the Company of the
provisions of this Section 4.1(d), that a Purchaser shall be entitled, in
addition to all other available remedies, to an order and/or injunction
restraining any breach and requiring immediate issuance and transfer, without
the necessity of showing economic loss and without any bond or other security
being required.

     

    (e)           Acknowledgment.  Each
Purchaser hereunder acknowledges its primary responsibilities under the
Securities Act and accordingly will not sell or otherwise transfer any of the
Securities or any interest therein without complying with the requirements of
the Securities Act.  While any Registration Statement remains
effective, each Purchaser hereunder may sell the Shares in accordance with the
plan of distribution contained in such Registration Statement and, if it does
so, it will comply therewith and with the related prospectus delivery
requirements unless an exemption therefrom is available.  Each
Purchaser, severally and not jointly with the other Purchasers, agrees that if
it is notified by the Company in writing at any time that a Registration
Statement registering the resale of any of the Shares is not effective or that
the prospectus included in such Registration Statement no longer complies with
the requirements of Section 10 of the Securities Act, the Purchaser will refrain
from selling such Shares until such time as the Purchaser is notified by the
Company that such Registration Statement is effective or such prospectus is
compliant with Section 10 of the Exchange Act, unless such Purchaser is able to,
and does, sell such Shares pursuant to an available exemption from the
registration requirements of Section 5 of the Securities Act.  Both
the Company and its Transfer Agent, and their respective directors, officers,
employees and agents, may rely on this subsection (e), and each Purchaser
hereunder will indemnify and hold harmless each of such persons from any
breaches or violations of this paragraph.

     

    [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

    
      
         

      

      
        27.

        
          

        

      

      
         

      

    

     

    4.2           Reservation of Common
Stock.  As of the First Unit Closing Date, the Company shall
have taken all action necessary to authorize, and reserve for the purpose of
issuance from and after the First Unit Closing, no less than the maximum number
of shares of Common Stock issuable as Conversion Shares at the First Unit
Closing, and issuable upon exercise of the Warrants issued at the First Unit
Closing.  As of the Second Unit Closing Date, the Company shall have
taken all action necessary to authorize, and reserve for the purpose of issuance
from and after the Second Unit Closing, no less than the maximum number of
shares of Common Stock issuable as Conversion Shares at the Second Unit Closing,
and issuable upon exercise of the Warrants issued at the Second Unit
Closing.  As of the Common Equity Closing Date, the Company shall have
taken all action necessary to authorize, and reserve for the purpose of issuance
at the Common Equity Closing, no less than the maximum number of shares of
Common Stock issuable at the Common Equity Closing.

     

    4.3           Furnishing of
Information.  In order to enable the Purchasers to sell the
Securities under Rule 144 of the Securities Act, commencing on the date hereof
and ending at such time as all Purchasers can freely sell Securities without
restriction under the Securities Act, the Company shall use its commercially
reasonable efforts to timely file (or obtain extensions in respect thereof and
file within the applicable grace period) all reports required to be filed by the
Company after the date hereof pursuant to the Exchange Act.  During
such period, if the Company is not required to file reports pursuant to such
laws, it will prepare and furnish to the Purchasers and make publicly available
in accordance with Rule 144(c) such information as is required for the
Purchasers to sell the Shares under Rule 144.

     

    4.4           Form D and Blue
Sky.  The Company agrees to timely file a Form D with respect
to the Securities as required under Regulation D and to provide a copy thereof
to each Purchaser who requests a copy in writing promptly after such
filing.  The Company shall make all filings and reports relating to
the offer and sale of the Securities required under applicable securities or
“Blue Sky” laws of the states of the United States following each of the First
Unit Closing Date, the Second Unit Closing Date and the Common Equity Closing
Date.

     

    4.5           No
Integration.  The Company shall not, and shall use its
commercially reasonable efforts to ensure that no Affiliate of the Company
shall, sell, offer for sale or solicit offers to buy or otherwise negotiate in
respect of any security (as defined in Section 2 of the Securities Act) that
will be integrated with the offer or sale of the Securities in a manner that
would require the registration under the Securities Act of the sale of the
Securities to the Purchasers, or that will be integrated with the offer or sale
of the Securities for purposes of the rules and regulations of any Trading
Market such that it would require stockholder approval prior to the closing of
such other transaction unless stockholder approval is obtained before the
closing of such subsequent transaction.

     

    4.6           Securities Laws Disclosure;
Publicity.  By 9:00 a.m., Eastern Time, on the Trading Day
immediately following the execution of this Agreement, the Company shall issue a
press release (the “Press
Release”) reasonably acceptable to the Lead Purchasers disclosing all
material terms of the transactions contemplated hereby.  On or before
5:30 p.m., Eastern Time, on the fourth Trading Day following the execution of
this Agreement (or such earlier time as required by law), the Company will file
a Current Report on Form 8-K with the Commission describing the terms of the
Transaction Documents (and including as exhibits to such Current Report on Form
8-K the material Transaction Documents (including, without limitation, this
Agreement, the forms of Warrant and the Investor Rights
Agreement)).  Each Purchaser, severally and not jointly with the other
Purchasers, covenants that until such time as the transactions contemplated by
this Agreement are publicly disclosed by the Company as described in this
Section 4.6, such Purchaser will maintain the confidentiality of all disclosures
made to it in connection with this transaction (including the existence and
terms of this transaction), except that such Purchaser may disclose the terms to
its financial, accounting, legal and other advisors.

     

    [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

    
      
         

      

      
        28.

        
          

        

      

      
         

      

    

    4.7           Non-Public
Information.  Except with respect to the material terms and
conditions of the transactions contemplated by the Transaction Documents, the
Company shall not and shall cause each of its officers, directors, employees and
agents, not to, provide any Purchaser with any material, non-public information
regarding the Company from and after the issuance of the Press Release without
the express written consent of such Purchaser, unless prior thereto such
Purchaser shall have executed a written agreement regarding the confidentiality
and use of such information.

     

    4.8           Indemnification.  In
addition to the indemnity provided in the Investor Rights Agreement, the Company
agrees to, jointly and severally, indemnify and hold each Purchaser and all of
their respective directors, officers, stockholders, members, partners, employees
and agents (and any other Persons with a functionally equivalent role of a
Person holding such titles notwithstanding a lack of such title or any other
title) of such Purchaser, each Person who Controls a Purchaser (within the
meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act),
and the directors, officers, stockholders, agents, members, partners or
employees (and any other Persons with a functionally equivalent role of a Person
holding such titles notwithstanding a lack of such title or any other title) of
such controlling person (each, a “Purchaser
Party”) harmless from any and all losses, liabilities, obligations,
claims, contingencies, damages, costs and expenses, including all judgments,
amounts paid in settlements, court costs and reasonable attorneys’ fees and
costs of investigation that any such Purchaser Party may suffer or incur whether
direct, indirect or consequential, as a result of or arising from or relating to
or in connection with (a) any breach of any of the representations, warranties,
covenants or agreements made by the Company in this Agreement or in the other
Transaction Documents or (b) any action instituted against a Purchaser, or any
of their respective Affiliates, by any Person who is not an Affiliate of such
Purchaser, with respect to any of transactions contemplated by the Transaction
Documents (unless such action is based upon any agreements or understanding such
Purchaser may have with any such Person or any violations by the Purchaser of
state or federal securities laws or any conduct by such Purchaser which
constitutes fraud, gross negligence or willful misconduct).  The
Company will not be liable to any Purchaser Party under this Agreement to the
extent, but only to the extent, that a loss, claim, damage or liability is
attributable to such Purchaser Party’s breach of any of the representations,
warranties, covenants or agreements made by such Purchaser Party in this
Agreement or in the other Transaction Documents, any violation by such Purchaser
Party of state or federal securities laws or any conduct by such Purchaser Party
which constitutes fraud, gross negligence or willful misconduct.  To
the extent that the undertaking to indemnify, pay and hold harmless set forth in
this Section 4.8 may be unenforceable because it is violative of any law or
public policy, the Company shall contribute the maximum portion which it is
permitted to pay and satisfy under applicable law, to the payment and
satisfaction of all indemnified matters incurred by the Purchaser
Parties.

     

    4.9           Listing of
Securities.  In the time and manner required by the Principal
Trading Market, the Company shall prepare and file with such Trading Market an
additional shares listing application covering all of the Securities and shall
use its commercially reasonable efforts to take all steps necessary to maintain,
so long as any other shares of Common Stock shall be so listed, such
listing.

     

    [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

    
      
         

      

      
        29.

        
          

        

      

      
         

      

    

    4.10           Dispositions and
Confidentiality After the Date Hereof.  Each Purchaser,
severally and not jointly with the other Purchasers, covenants that neither it,
nor any Affiliate acting on its behalf or pursuant to any understanding with it,
will engage in any transactions in the Company’s securities (including, without
limitation, any Short Sales involving the Company’s securities) during the
period from the date hereof until the earlier of such time as (i) the
transactions contemplated by this Agreement are first publicly announced as
described in Section 4.6 or (ii) this Agreement is terminated in full pursuant
to Section 6.1 hereof.  Notwithstanding the foregoing, in the case of
a Purchaser that is a multi-managed investment vehicle whereby separate
portfolio managers manage separate portions of such Purchaser's assets and the
portfolio managers have no direct knowledge of the investment decisions made by
the portfolio managers managing other portions of such Purchaser’s assets, the
covenants set forth above shall apply only with respect to the portion of assets
managed by the portfolio manager that has knowledge about the transactions
contemplated by this Agreement.  Each Purchaser understands and
acknowledges, severally and not jointly with any other Purchaser, that the
Commission currently takes the position that covering a short position
established prior to effectiveness of a resale registration statement with
shares included in such registration statement would be a violation of Section 5
of the Securities Act, as set forth in Item 65, Section 5 under Section A, of
the Manual of Publicly Available Telephone Interpretations, dated July 1997,
compiled by the Office of Chief Counsel, Division of Corporation
Finance.

     

    4.11         Preparation of Proxy
Statement; Stockholders Meeting.

     

    (a)           The
Company shall use commercially reasonable efforts to prepare and file with the
Commission, as soon as practicable after the First Unit Closing, and in no event
later than May 31, 2009, a proxy statement (as amended or supplemented, the
“Proxy
Statement”) to be sent to the stockholders of the Company in connection
with the annual meeting of the Company’s stockholders (the “Stockholders’
Meeting”) for the purpose of obtaining the requisite vote of the
Company’s stockholders to approve: (i) the sale and issuance of the Units at the
Second Unit Closing, including the issuance of the Unit Shares, the Warrants and
the Warrant Shares to be sold in such Closing; (ii) the expiration of the
Warrant Exercise Cap; (iii) the amendments to the Company’s Amended and Restated
Certificate of Incorporation described on Exhibit I hereto and
(iv) the sale and issuance of the Common Equity Shares at the Common Equity
Closing, as well as other matters contemplated by the Transaction Documents or
otherwise in the ordinary course of the Company’s business and acceptable to the
Lead Purchasers, which requisite vote shall be obtained in accordance with the
rules of the Principal Trading Market, the provisions of the Company’s Amended
and Restated Certificate of Incorporation and Amended and Restated Bylaws, and
the requirements of the DGCL (collectively, items (i)-(iv) above being the
“Transaction
Stockholder Approval Matters”).  The Company shall provide the
Lead Purchasers a draft of the Proxy Statement (including any amendments or
supplements thereto) at least five (5) Business Days prior to filing thereof
(and copies of each subsequent draft thereof), and the Company shall give
reasonable consideration to any comments by the Lead Purchasers and their
counsel to such Proxy Statement prior to filing with the Commission or
distribution to the Company’s stockholders. The information supplied by the
Company for inclusion in the Proxy Statement shall not, on the date the Proxy
Statement is first mailed to the Company’s stockholders and at the time of the
Stockholders’ Meeting, contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which they
are made, not false or misleading; or omit to state any material fact necessary
to correct any statement in any earlier communication with respect to the
solicitation of proxies for the Stockholders’ Meeting which has become false or
misleading.  The Proxy Statement will comply as to form in all
material respects with the provisions of the Exchange Act and the rules and
regulations thereunder.  If at any time prior to the Stockholders’
Meeting, any event or information should be discovered by the Company which
should be set forth in a supplement to the Proxy Statement, the Company shall
promptly inform the Lead Purchasers.  Notwithstanding the foregoing,
the Company makes no representation or warranty with respect to any written
information supplied by the Purchasers and relating to the Purchasers for use in
the Proxy Statement.

     

    [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

    
      
         

      

      
        30.

        
          

        

      

      
         

      

    

    (b)           The
Company shall use its commercially reasonable efforts to have the Proxy
Statement cleared by the Commission and its staff under the Exchange Act as
promptly as practicable after such filing.  The Company shall cause
the Proxy Statement to be mailed to holders of Common Stock as promptly as
practicable after the Proxy Statement is cleared by the
Commission.  Without limiting any other provision herein, the Proxy
Statement will contain such information and disclosure so that the Proxy
Statement conforms in all material respects to the requirements of the Exchange
Act.

     

    (c)           The
Company shall promptly notify the Lead Purchasers of the receipt of any comments
from the Commission or its staff and of any request by the Commission or its
staff for amendments or supplements to the Proxy Statement or for additional
information and shall supply the Lead Purchasers with copies of all
correspondence between the Company or any of its representatives and the
Commission or its staff.

     

    (d)           If
at any time prior to the Stockholders’ Meeting there shall occur any event with
respect to the Company, or with respect to other information supplied by the
Company for inclusion in the Proxy Statement, which event is required to be
described in an amendment of or a supplement to the Proxy Statement, such event
shall be so described, and such amendment or supplement shall be promptly filed
with the Commission and, as required by applicable law, rule or regulation,
disseminated to the stockholders of the Company.

     

    (e)           The
Company shall duly call, give notice of, convene and hold the Stockholders’
Meeting for the purpose of seeking the Stockholder Approval.  The
Stockholders’ Meeting shall be held no later than June 30, 2009; provided, that if the Company
does not hold the Stockholders’ Meeting by such date, then it shall exercise all
reasonable efforts to promptly convene a special meeting of the Company’s
Stockholders to consider and approve the Transaction Stockholder Approval
Matters.

     

    (f)           The
Proxy Statement shall include a statement to the effect that the Board
unanimously (of those voting) recommends that the Company’s stockholders give
the Stockholder Approval (the “Board
Recommendation”), and, except to the extent that the Board shall have
withdrawn or modified the Board Recommendation in accordance with this
Agreement, the Board Recommendation shall not be withdrawn or modified in a
manner adverse to the Purchasers, and no resolution by the Board or any
committee thereof to withdraw or modify the Board Recommendation in a manner
adverse to the Purchasers shall be adopted or proposed.

     

    (g)           Each
Purchaser covenants and represents, severally and not jointly, that: (A) the
information supplied by such Purchaser for inclusion in the Proxy Statement
shall not, on the date the Proxy Statement is first mailed to the Company’s
stockholders and at the time of the Stockholders’ Meeting, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they are made, not false or misleading, and (B) if
at any time prior to the Stockholders’ Meeting, any event or information should
be discovered by such Purchaser which should be set forth in a supplement to the
Proxy Statement, such Purchaser shall promptly inform the Company of the
same.  Notwithstanding the foregoing, no Purchaser makes any
representation or warranty with respect to any information supplied by the
Company which is contained in the Proxy Statement.

     

    4.12           No Shop
Agreement.  Until the earlier to occur of (i) the First Unit
Closing or (ii) a valid termination of this Agreement pursuant to Article
VI hereof, the Company will not, and will not cause nor permit any of its
Affiliates or any of its or their officers, directors, stockholders, employees,
agents or representatives to, directly or indirectly:

     

    [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

    
      
         

      

      
        31.

        
          

        

      

      
         

      

    

    (a)           negotiate,
authorize, recommend, enter into or propose to enter into, with any Person other
than Persons designated by mutual agreement of the Company and the Lead
Purchasers, any transaction involving (directly or indirectly) an issuance, sale
or acquisition of any Capital Stock of the Company (other than (i) the issuance
of Securities pursuant to the Transaction Documents, (ii) employee, director and
consultant stock option grants consistent with past custom and practice and
(iii) shares of Common Stock issued upon the exercise of (A) warrants in
existence as of the date hereof or (B) stock options granted to employees,
directors or consultants of the Company and that are either in existence as of
the date hereof or that have been granted consistent with past custom and
practice), a sale, lease or other conveyance of a substantial portion of the
business or assets of the Company, or any merger, recapitalization, business
combination, strategic alliance, joint venture or similar transaction involving
the Company (a “Competing
Transaction”);

     

    (b)           continue
to engage in any pending discussions or negotiations with any third party
concerning any previously proposed Competing Transaction;

     

    (c)           knowingly
encourage, solicit or initiate discussions, negotiations or submissions of
proposals, indications of interest or offers in respect of a Competing
Transaction; or

     

    (d)           knowingly
furnish or cause to be furnished to any person any information in furtherance of
a Competing Transaction.

     

    Notwithstanding
the foregoing, nothing contained in this Agreement shall prevent the Company or
the Board from (A) providing information in response to a request therefor by a
person who has made an unsolicited bona fide written proposal for a Competing
Transaction; (B) engaging in any negotiations or discussions with any person who
has made an unsolicited bona fide written proposal for a Competing Transaction;
or (C) withdrawing the Board Recommendation or modifying the Board
Recommendation in a manner adverse to the Purchasers (any such action, a “Change in
Recommendation”); (D) terminating this Agreement pursuant to and subject
to the terms of Article VI hereof, and/or (E) taking any action that any court
of competent jurisdiction orders the Company or the Board to take, if and only
to the extent that, (i) in each such case referred to in clause (B) (to the
extent that activities exceed such level of discussion as is reasonably
necessary to obtain sufficient information to assess the likely value of such
proposal) or (C) above, the failure to take such action would be reasonably
likely to result in a breach of the Board’s fiduciary duties under applicable
law, (ii) in each such case referred to in clause (A) or (B) above, the Board
also determines in good faith that such proposed Competing Transaction
constitutes or would reasonably be expected to lead to a Superior Proposal, and
(iii) in the case referred to in clauses (C) or (D) above, (x) the Board
has given the Purchasers five (5) Business Days’ prior written notice of its
intention to take such action, (y) the Board has considered any changes to this
Agreement (if any) proposed by the Purchasers, and (z) if such action is in
connection with a Superior Proposal, the Board has determined in good faith and
by a majority vote of the Board, after consultation with the Company’s outside
legal counsel, that any applicable unsolicited proposal remains a Superior
Proposal even after the changes proposed by any of the Purchasers (if
any).  Nothing contained in this Agreement shall prevent the Company
or the Board from complying with its disclosure obligations under Rule 14d-9 or
14e-2 or Item 1012(a) of Regulation M-A promulgated under the Exchange Act with
regard to a proposed Competing Transaction.  If the Company receives
any inquiry, proposal, indication of interest or offer with respect to a
Competing Transaction, the Company will promptly notify the Lead Purchasers of
the same, which notice shall identify the Person or Persons making such inquiry,
proposal, indication of interest or offer and shall summarize the terms thereof
in reasonable detail.

     

    4.13           Use of
Proceeds.  Unless otherwise approved in writing by the Majority
Purchasers, the Company shall not use any proceeds from the sale of the
Securities hereunder other than for working capital and general corporate
purposes.

     

    4.14           Section
16.  Prior to any of the Second Unit Closing, the Common Equity
Closing or a closing of an Alternate Common Stock Financing, to the extent
permissable under applicable law, the Company shall cause the Board to take such
action necessary or advisable to exempt from the provisions of Section 16(b) of
the Exchange Act, including by virtue or Rule 16b-3(d) thereunder, the
acquisition of securities at such closing by any Purchaser who at that time may
be deemed to be a director of the Company through any theory of
director-by-deputization.

     

    [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

    
      
         

      

      
        32.

        
          

        

      

      
         

      

    

     

    ARTICLE
V.

    CONDITIONS
PRECEDENT TO CLOSINGS

    

    5.1           Conditions Precedent to the
Obligations of the Purchasers to Purchase Securities at the First Unit
Closing. The obligation of each Purchaser to purchase Units at the First
Unit Closing is subject to the fulfillment to such Purchaser’s satisfaction, on
or prior to the First Unit Closing Date, of each of the following conditions,
any of which may be waived by such Purchaser (as to itself only):

     

    (a)           Representations and
Warranties.  The representations and warranties of the Company
contained herein shall be true and correct as of the date when made and as of
the First Unit Closing Date, as though made on and as of such date, except for
such representations and warranties that speak as of a specific date, which
shall have been true and correct as of such date.

     

    (b)           Performance.  The
Company shall have performed, satisfied and complied in all material respects
with all covenants, agreements and conditions required by the Transaction
Documents to be performed, satisfied or complied with by it at or prior to the
First Unit Closing.

     

    (c)           No Legal
Restraint.  No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any Governmental Authority of competent jurisdiction (collectively,
a “Legal
Restraint”) that remains in effect and prohibits the consummation of any
of the transactions contemplated by the Transaction Documents.

     

    (d)           Consents and
Approvals.  The Company shall have obtained in a timely fashion
any and all consents, permits, approvals, registrations and waivers necessary
for consummation of the purchase and sale of the Units at the First Unit Closing
(including, without limitation, all Required Approvals (other than the
Stockholder Approval, which is not applicable to the First Unit Closing) and any
other necessary regulatory and third party consents and approvals), all of which
shall be and remain so long as necessary in full force and effect.

     

    (e)           Company
Deliverables.  The Company shall have delivered the Company
Deliverables in accordance with Section 2.2(a).

     

    (f)           Compliance
Certificate.  The Company shall have delivered to each
Purchaser a certificate, dated as of the First Unit Closing Date and signed by
its Chief Executive Officer or its Chief Financial Officer, certifying to the
fulfillment of the conditions specified in Sections 5.1(a), (b), (d) and (e) in
substantially the form attached hereto as Exhibit
H.

     

    (g)           Employee Retention
Plan.  The Company shall have adopted an Employee Retention
Plan on substantially the terms set forth on Exhibit J hereto,
including the modifications to existing arrangements described therein, and the
parties to the existing arrangements shall have agreed to modify such
arrangements as may be required by the terms of the Employee Retention
Plan.

     

    (h)           Board of
Directors.  Upon the First Unit Closing, the authorized size of
the Board shall be eight (8) members, of which three (3) members shall be
designated by the Purchasers pursuant to the Investor Rights
Agreement.

     

    [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

    
      
         

      

      
        33.

        
          

        

      

      
         

      

    

     

    5.2           Conditions Precedent to the
Obligations of the Company to Sell Securities at the First Unit
Closing.  The Company's obligation to sell and issue the Units
to each Purchaser at the First Unit Closing is subject to the fulfillment to the
satisfaction of the Company on or prior to the First Unit Closing Date of the
following conditions, any of which may be waived by the Company:

     

    (a)           Representations and
Warranties.  The representations and warranties made by such
Purchaser in Section 3.2 hereof shall be true and correct in all material
respects as of the date when made, and as of the First Unit Closing Date as
though made on and as of such date, except for representations and warranties
that speak as of a specific date, which shall have been true and correct as of
such date.

     

    (b)           Performance.  Such
Purchaser shall have performed, satisfied and complied in all material respects
with all covenants, agreements and conditions required by the Transaction
Documents to be performed, satisfied or complied with by such Purchaser at or
prior to the First Unit Closing Date.

     

    (c)           No Legal
Restraint.  No Legal Restraint shall have been enacted,
entered, promulgated or endorsed by any Governmental Authority of competent
jurisdiction that remains in effect and prohibits the consummation of any of the
transactions contemplated by the Transaction Documents.

     

    (d)           Consents and
Approvals.  The Company shall have obtained in a timely fashion
any and all consents, permits, approvals, registrations and waivers necessary
for consummation of the purchase and sale of the Units at the First Unit Closing
(including, without limitation, all Required Approvals, other than the
Stockholder Approval, and any other necessary regulatory and third party
consents and approvals), all of which shall be and remain so long as necessary
in full force and effect.

     

    (e)           Purchaser
Deliverables.  Such Purchaser shall have delivered its
Purchaser Deliverables in accordance with Section 2.2(e).

     

    5.3           Conditions Precedent to the
Obligations of the Purchasers to Purchase Securities at the Second Unit
Closing.  The obligation of each Purchaser to acquire the Units
at the Second Unit Closing is subject to the fulfillment to such Purchaser’s
satisfaction, on or prior to the Second Unit Closing Date, of each of the
following conditions, any of which may be waived by such Purchaser (as to itself
only):

     

    (a)           Representations and
Warranties.  The representations and warranties of the Company
contained herein shall be true and correct in all material respects (except for
those representations and warranties which are qualified as to materiality, in
which case such representations and warranties shall be true and correct in all
respects) as of the Second Unit Closing Date, as though made on and as of such
date, except for such representations and warranties that speak as of a specific
date, which shall have been true and correct in all material respects (except
for those representations and warranties which are qualified as to materiality,
in which case such representations and warranties shall be true and correct in
all respects) as of such date.

     

    (b)           Performance.  The
Company shall have performed, satisfied and complied in all material respects
with all covenants, agreements and conditions required by the Transaction
Documents to be performed, satisfied or complied with by it at or prior to the
Second Unit Closing.

     

    (c)           No Legal
Restraint.  No Legal Restraint shall have been enacted,
entered, promulgated or endorsed by any Governmental Authority of competent
jurisdiction that remains in effect and prohibits the consummation of any of the
transactions contemplated by the Transaction Documents.

     

    [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

    
      
         

      

      
        34.

        
          

        

      

      
         

      

    

    (d)           Consents and
Approvals.  The Company shall have obtained in a timely fashion
any and all consents, permits, approvals, registrations and waivers necessary
for consummation of the purchase and sale of the Units at the Second Unit
Closing (including, without limitation, all Required Approvals and any other
necessary regulatory and third party consents and approvals), all of which shall
be and remain so long as necessary in full force and effect.

     

    (e)           Company
Deliverables.  The Company shall have delivered the Company
Deliverables in accordance with Section 2.2(b).

     

    (f)           First Unit
Closing.  The First Unit Closing shall have
occurred.

     

    (g)           Compliance
Certificate.  The Company shall have delivered to such
Purchaser a certificate, dated as of the Second Unit Closing Date and signed by
its Chief Executive Officer or its Chief Financial Officer, certifying to the
fulfillment of the conditions specified in Sections 5.3(a), (b), (d) and (e) in
the form attached hereto as Exhibit
H.

     

    (h)           Board of
Directors.  Upon the Second Unit Closing, the authorized size
of the Board shall be nine (9) members, of which five (5) members shall be
designated by the Purchasers to the extent provided by the Investor Rights
Agreement.

     

    (i)           Solvency.  After
giving effect to the Second Unit Closing, the Company is not insolvent, does not
have unreasonably small capital with which to engage in its business or have
incurred debts beyond its ability to pay such debts as they mature, and as of
the Second Unit Closing, the Board has no plan or intention to commence a
process to liquidate or wind down the Company, or a reasonable basis to believe
that such a process would be commenced immediately following the Second Unit
Closing.

     

    5.4           Conditions Precedent to the
Obligations of the Company to sell Securities at the Second Unit
Closing.  The Company's obligation to sell and issue the Units
at the Second Unit Closing to each Purchaser is subject to the fulfillment to
the satisfaction of the Company on or prior to the Second Unit Closing Date of
the following conditions, any of which may be waived by the
Company:

     

    (a)           Representations and
Warranties.  The representations and warranties made by such
Purchaser in Section 3.2 hereof shall be true and correct in all material
respects as of the date when made, and as of the Second Unit Closing Date as
though made on and as of such date, except for representations and warranties
that speak as of a specific date, which shall have been true and correct in all
material respects (except for those representations and warranties which are
qualified as to materiality, in which case such representations and warranties
shall be true and correct in all respects) as of such date.

     

    (b)           Performance.  Such
Purchaser shall have performed, satisfied and complied in all material respects
with all covenants, agreements and conditions required by the Transaction
Documents to be performed, satisfied or complied with by such Purchaser at or
prior to the Second Unit Closing Date.

     

    (c)           No Legal
Restraint.  No Legal Restraint shall have been enacted,
entered, promulgated or endorsed by any Governmental Authority of competent
jurisdiction that remains in effect and prohibits the consummation of any of the
transactions contemplated by the Transaction Documents.

     

    (d)           Consents and
Approvals.  The Company shall have obtained in a timely fashion
any and all consents, permits, approvals, registrations and waivers necessary
for consummation of the purchase and sale of the Units at the Second Unit
Closing (including, without limitation, all Required Approvals and any other
necessary regulatory and third party consents and approvals), all of which shall
be and remain so long as necessary in full force and effect.

     

    [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

    
      
         

      

      
        35.

        
          

        

      

      
         

      

    

     

    (e)           Purchaser
Deliverables.  Such Purchaser shall have delivered its
Purchaser Deliverables in accordance with Section 2.2(e).

     

    5.5           Conditions Precedent to the
Obligations of the Purchasers to Purchase Common Stock at the Common Equity
Closing. The obligation of each Purchaser to acquire the Common Stock at
the Common Equity Closing is subject to the fulfillment to such Purchaser’s
satisfaction, on or prior to the Common Equity Closing Date, of each of the
following conditions, any of which may be waived by such Purchaser (as to itself
only):

     

    (a)           Representations and
Warranties.  The representations and warranties of the Company
contained herein shall be true and correct in all material respects (except for
those representations and warranties which are qualified as to materiality, in
which case such representations and warranties shall be true and correct in all
respects) as of the Common Equity Closing Date, as though made on and as of such
date, except for such representations and warranties that speak as of a specific
date, which shall have been true and correct in all material respects (except
for those representations and warranties which are qualified as to materiality,
in which case such representations and warranties shall be true and correct in
all respects) as of such date.

     

    (b)           Performance.  The
Company shall have performed, satisfied and complied in all material respects
with all covenants, agreements and conditions required by the Transaction
Documents to be performed, satisfied or complied with by it at or prior to the
Common Equity Closing.

     

    (c)           No Legal
Restraint.  No Legal Restraint shall have been enacted,
entered, promulgated or endorsed by any Governmental Authority of competent
jurisdiction that remains in effect and prohibits the consummation of any of the
transactions contemplated by the Transaction Documents.

     

    (d)           Consents and
Approvals.  The Company shall have obtained in a timely fashion
any and all consents, permits, approvals, registrations and waivers necessary
for consummation of the purchase and sale of the Common Stock at the Common
Equity Closing (including, without limitation, all Required Approvals and any
other necessary regulatory and third party consents and approvals), all of which
shall be and remain so long as necessary in full force and effect.

     

    (e)           Filing of Certificate of
Amendment.  A Certificate of Amendment to the Company’s Amended
and Restated Certificate of Incorporation (or, in lieu thereof, a new Amended
and Restated Certificate of Incorporation) containing the amendments to the
Company’s Amended and Restated Certificate of Incorporation described on Exhibit I hereto (the
“Charter
Amendment”) shall have been duly filed by the Company with the Secretary
of State of the State of Delaware in accordance with the DGCL, and the
Purchasers shall have received evidence of such filing in form and substance
reasonably satisfactory to the Purchasers.

     

    (f)           Company
Deliverables.  The Company shall have delivered the Company
Deliverables in accordance with Section 2.2(c).

     

    (g)           First Unit
Closing.  The First Unit Closing shall have
occurred.

     

    (h)           Compliance
Certificate.  The Company shall have delivered to such
Purchaser a certificate, dated as of the Common Equity Closing Date and signed
by its Chief Executive Officer or its Chief Financial Officer, certifying to the
fulfillment of the conditions specified in Sections 5.5(a), (b), (d), (e) and
(f) in the form attached hereto as Exhibit
H.

     

    [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

    
      
         

      

      
        36.

        
          

        

      

      
         

      

    

    (i)           Board of
Directors.  Upon the Common Equity Closing, the authorized size
of the Board shall be nine (9) members, of which five (5) members shall be
designated by the Purchasers to the extent required by the Investor Rights
Agreement.

     

    5.6           Conditions Precedent to the
Obligations of the Company to Sell Common Stock at the Common Equity
Closing.  The Company's obligation to sell and issue the Common
Stock at the Common Equity Closing to each Purchaser is subject to the
fulfillment to the satisfaction of the Company on or prior to the Common Equity
Closing Date of the following conditions, any of which may be waived by the
Company:

     

    (a)           Representations and
Warranties.  The representations and warranties made by such
Purchaser in Section 3.2 hereof shall be true and correct in all material
respects as of the date when made, and as of the Common Equity Closing Date as
though made on and as of such date, except for representations and warranties
that speak as of a specific date, which shall have been true and correct in all
material respects (except for those representations and warranties which are
qualified as to materiality, in which case such representations and warranties
shall be true and correct in all respects) as of such date.

     

    (b)           Performance.  Such
Purchaser shall have performed, satisfied and complied in all material respects
with all covenants, agreements and conditions required by the Transaction
Documents to be performed, satisfied or complied with by such Purchaser at or
prior to the Common Equity Closing Date.

     

    (c)           No Legal
Restraint.  No Legal Restraint shall have been enacted,
entered, promulgated or endorsed by any Governmental Authority of competent
jurisdiction that remains in effect and prohibits the consummation of any of the
transactions contemplated by the Transaction Documents.

     

    (d)           Consents and
Approvals.  The Company shall have obtained in a timely fashion
any and all consents, permits, approvals, registrations and waivers necessary
for consummation of the purchase and sale of the Common Stock at the Common
Equity Closing (including, without limitation, all Required Approvals and any
other necessary regulatory and third party consents and approvals), all of which
shall be and remain so long as necessary in full force and effect.

     

    (e)           Purchaser
Deliverables.  Such Purchaser shall have delivered its
Purchaser Deliverables in accordance with Section 2.2(e).

     

    ARTICLE
VI.

    TERMINATION

    

    6.1           Termination Prior to the
First Unit Closing.  This Agreement and the purchase and sale
of the Units at the First Unit Closing may be terminated at any time following
the Execution Date and prior to the First Unit Closing:

    

    (a)           by
mutual written consent of the Company and the Majority Purchasers;

     

    [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

    
      
         

      

      
        37.

        
          

        

      

      
         

      

    

    (b)           by
the Lead Purchasers or the Company, if (i) the First Unit Closing shall not have
been consummated on or prior to April 30, 2009 or such other date, if
any, as the Lead Purchasers and the Company may agree in writing; or (ii) any
Legal Restraint (which Legal Restraint the parties hereto shall have used all
commercially reasonable efforts to resist, resolve or lift, as applicable)
permanently restraining, enjoining or otherwise prohibiting consummation of the
First Unit Closing shall become final and non-appealable, provided that the right to
terminate this Agreement pursuant to this Section 6.1(b) shall not be available
to any party hereto whose failure to fulfill any obligation under this Agreement
has been the cause of, or resulted in, with respect to clauses (i) above, the
failure of the First Unit Closing to be consummated or, with respect to clause
(ii) above, such Legal Restraint having been issued; or

     

    (c)           by
the Company, if the Board authorizes the Company, subject to complying with the
terms of this Agreement, to accept (or to enter into a written agreement for a
transaction constituting) a Superior Proposal, provided that (i) the Company
notifies each Purchaser, in writing and at least five (5) Business Days prior to
such termination, of its intention to terminate this Agreement to accept (or to
enter into a written agreement for a transaction constituting) a Superior
Proposal; and (ii) the Purchasers do not make prior to such termination a
binding, unconditional offer that the Board determines, in good faith after
consultation with its financial advisor, is at least as favorable to the
stockholders of the Company as such Superior Proposal, it being understood that
the Company shall not enter into any such binding agreement during such five (5)
Business Day period.

     

    6.2           Effect of
Termination.

     

    (a)           In
the event that this Agreement is validly terminated as provided herein, then
neither the Company nor the Purchasers shall have any further obligation or
liability (including arising from such termination) to the other, and no
Purchaser will have any liability to any other Purchaser under the Transaction
Documents as a result therefrom; provided, however, that nothing in this
Section 6.2 shall be deemed to release any party from any liability for any
willful breach by such party of the terms and provisions of this Agreement or
the other Transaction Documents or to impair the right of any party to compel
specific performance by any other party of its obligations under this Agreement
or the other Transaction Documents.  In the event that this Agreement
is validly terminated as provided herein, the Company shall promptly notify all
non-terminating Purchasers.

     

    (b)           The
provisions of Article I (Definitions), Section 4.8 (Indemnification), this
Section 6.2, and Article VII (Miscellaneous) shall survive any termination of
this Agreement pursuant to Section 6.1 hereof.

     

    ARTICLE
VII.

     

    MISCELLANEOUS

     

    7.1           Fees and
Expenses.  The Company shall reimburse the Lead Purchasers for
all reasonable legal fees and expenses incurred in connection with the Lead
Purchasers’ negotiation, execution, delivery and performance of this Agreement
and the other Transaction Documents (and any amendments, modifications or
waivers thereto), provided that the Company shall not be
required to reimburse such fees and expenses in excess of two hundred thousand
dollars ($200,000.00) in the aggregate, unless a higher amount is mutually
agreed to by the Company and the Lead Purchasers in writing.  The
Company shall also reimburse the Lead Purchasers for all reasonable legal fees
and expenses incurred in connection with their participation and investment in
the Common Equity Closing or an Alternative Common Stock Financing, as the case
may be, provided that the Company shall not be
required to reimburse such fees and expenses in excess of one hundred thousand
dollars ($100,000.00) in the aggregate, unless a higher amount is mutually
agreed to by the Company and the Lead Purchasers in writing.  Subject
to the foregoing limitations, such fees and expenses shall be reimbursed by the
Company within ten (10) days following receipt of a written invoice documenting
in reasonable detail such fees and expenses of the Lead
Purchasers.  Except as provided above, the Company and the Purchasers
shall each pay the fees and expenses of their respective advisers, counsel,
accountants and other experts, if any, and all other expenses incurred by such
party in connection with the preparation, negotiation, execution, delivery and
performance of this Agreement and the other Transaction
Documents.  The Company shall pay all Transfer Agent fees, stamp taxes
and other taxes and duties levied in connection with the sale and issuance of
the Securities to the Purchasers, and shall pay the Placement Agent Fees and any
other placement agent fees in connection with the transactions contemplated by
this Agreement.

     

    [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

    
      
         

      

      
        38.

        
          

        

      

      
         

      

    

    7.2           Entire
Agreement.  The Transaction Documents, together with the
Exhibits and Schedules hereto and thereto, contain the entire understanding of
the parties with respect to the subject matter hereof and supersede all prior
agreements, understandings, discussions and representations, oral or written,
with respect to such matters, which the parties acknowledge have been merged
into such documents, exhibits and schedules.

     

    7.3           Notices.  Any
and all notices or other communications or deliveries required or permitted to
be provided hereunder shall be in writing and shall be deemed given and
effective on the earliest of (a) the date of transmission, if such notice or
communication is delivered via facsimile (provided the sender receives a
machine-generated confirmation of successful transmission) at the facsimile
number specified in this Section 7.3 prior to 5:00 p.m., Pacific Time, on a
Trading Day, except in the event that the recipient is located outside the
United States, in which case notice shall be deemed given and effective on the
next Trading Day after the date of transmission, (b) the next Trading Day after
the date of transmission, if such notice or communication is delivered via
facsimile at the facsimile number specified in this Section on a day that is not
a Trading Day or later than 5:00 p.m., Pacific Time, on any Trading Day, (c) the
Trading Day following the date of mailing, if sent by U.S. nationally recognized
overnight courier service with next day delivery specified, or in the event the
recipient is located outside the United States, five (5) Trading Days following
the date of mailing, if sent by internationally recognized overnight courier
service with next day delivery specified, or (d) upon actual receipt by the
party to whom such notice is required to be given.  The address for
such notices and communications shall be as follows:

     

    (a)          If
to the Company:

     

    Sunesis Pharmaceuticals,
Inc.

    395 Oyster Point Boulevard, Suite
400

    South San Francisco, CA
94080

    Telephone No.: (650)
266-3500

    Facsimile No.:  (650)
266-3530

    Attention:  Chief Financial
Officer

     

    With a copy to (which shall not
constitute notice):

    

    Cooley Godward Kronish LLP

    Five Palo
Alto Square

    3000 El Camino Real

    Palo
Alto, California 94306-2155

    Telephone No.:  (650)
843-5180

    Facsimile No.:  (650)
849-7400

    Attention:  Suzanne Sawochka
Hooper, Esq.

    

    (b)          If
to a Purchaser:

     

    [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

    
      
         

      

      
        39.

        
          

        

      

      
         

      

    

     

    To the
address set forth under such Purchaser’s name on the signature page
hereof.

    

    (c)           If
to the Lead Purchasers:

     

    Bay City
Capital L.P.

    750 Battery Street, Suite
400

    San Francisco, CA 94111

    Telephone No.:  (415)
676-3830 

    Facsimile No.:  (415)
837-0503

    Attention:  Dayton
Misfeldt

    

    Alta Partners

    One Embarcadero Center

    37th
Floor

    San
Francisco, CA  94111

    Telephone
No: (415) 362-4022

    Facsimile
No.: (415) 362-6178

    Attention:  Hilary
Strain

    

    With a copy to (which shall not
constitute notice):

    

    Latham & Watkins LLP

    140 Scott
Drive

    Menlo Park, California
94025

    Telephone No.:  (650)
328-4600

    Facsimile No.:  (650)
463-2600

    Attention:  Alan C.
Mendelson, Esq.

    Linda J.
Lorenat, Esq.

    

    or such
other address as may be designated in writing hereafter, in the same manner, by
such Person.

    

    7.4           Amendments; Waivers; No
Additional Consideration.  No provision of this Agreement may
be waived or amended except in a written instrument signed, in the case of an
amendment, by the Company and the Purchaser or Purchasers holding or having the
right to acquire, at the time of such amendment, at least a majority-in-interest
of the total Unit Shares or, in the case of a waiver, by the party against whom
enforcement of any such waiver is sought. No waiver of any default with respect
to any provision, condition or requirement of this Agreement shall be deemed to
be a continuing waiver in the future or a waiver of any subsequent default or a
waiver of any other provision, condition or requirement hereof, nor shall any
delay or omission of either party to exercise any right hereunder in any manner
impair the exercise of any such right.  Each Purchaser acknowledges
that the Purchaser or Purchasers  holding or having the right to
acquire, at the time of such amendment, at least a majority-in-interest of the
total Unit Shares have the power to bind all of the Purchasers.

     

    7.5           Construction.  The
headings herein are for convenience only, do not constitute a part of this
Agreement and shall not be deemed to limit or affect any of the provisions
hereof.  The language used in this Agreement will be deemed to be the
language chosen by the parties to express their mutual intent, and no rules of
strict construction will be applied against any party.  This Agreement
shall be construed as if drafted jointly by the parties, and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any provisions of this Agreement or any of the Transaction
Documents.

     

    [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

    
      
         

      

      
        40.

        
          

        

      

      
         

      

    

    7.6           Successors and
Assigns.  The provisions of this Agreement shall inure to the
benefit of and be binding upon the parties and their successors and permitted
assigns.  This Agreement, or any rights or obligations hereunder, may
not be assigned by the Company without the prior written consent of the
Purchasers holding or having the right to acquire, at the time of such consent
to assignment, at least a majority-in-interest of the total Unit
Shares.  Any Purchaser may assign its rights hereunder in whole or in
part to any Person to whom such Purchaser assigns or transfers any Securities in
compliance with the Transaction Documents and applicable law, provided such transferee
shall agree in writing to be bound, with respect to the transferred Securities,
by the terms and conditions of this Agreement that apply to the
“Purchasers.”  In addition, any Purchaser may assign its rights or
obligations to purchase the Securities that the Purchaser has agreed to purchase
at each Closing, in whole or part, to an Affiliate, subject to the written
consent of the Company and the Majority Purchasers, which consent shall not be
unreasonably withheld.

     

    7.7           No Third-Party
Beneficiaries.  This Agreement is intended for the benefit of
the parties hereto and their respective successors and permitted assigns and is
not for the benefit of, nor may any provision hereof be enforced by, any other
Person, except that the Placement Agent shall be entitled to rely on
Sections 3.1 and 3.2 hereof.

     

    7.8           Governing
Law.  All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of
California, without regard to the principles of conflicts of law
thereof.    Each party hereto hereby irrevocably waives
personal service of process and consents to process being served in any such
Proceeding by mailing a copy thereof via registered or certified mail or
overnight delivery (with evidence of delivery) to such party at the address in
effect for notices to it under this Agreement and agrees that such service shall
constitute good and sufficient service of process and notice
thereof.  Nothing contained herein shall be deemed to limit in any way
any right to serve process in any manner permitted by law.  EACH PARTY HERETO HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO
TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY HEREBY ACKNOWLEDGES THAT
THIS PROVISION IS A MATERIAL INDUCEMENT FOR AGENT AND THE PURCHASERS ENTERING
INTO THIS AGREEMENT.

     

    7.9           Survival.  The
representations and warranties contained herein shall survive each of the First
Unit Closing, the Second Unit Closing and Common Equity Closing and shall remain
in full force and effect, regardless of any investigation made by or on behalf
of the Company or the Purchasers or any person controlling any of them and shall
survive delivery of and payment for the Securities.  The agreements
and covenants contained herein shall survive for the applicable statute of
limitations.

     

    7.10           Execution.  This
Agreement may be executed in two or more counterparts, all of which when taken
together shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to the
other party, it being understood that both parties need not sign the same
counterpart.  In the event that any signature is delivered by
facsimile transmission, or by e-mail delivery of a “.pdf” format data file, such
signature shall create a valid and binding obligation of the party executing (or
on whose behalf such signature is executed) with the same force and effect as if
such facsimile or “.pdf” signature page were an original thereof.

     

    [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

    
      
         

      

      
        41.

        
          

        

      

      
         

      

    

     

    7.11          Severability.  If
any provision of this Agreement is held to be invalid or unenforceable in any
respect, the validity and enforceability of the remaining terms and provisions
of this Agreement shall not in any way be affected or impaired thereby and the
parties will attempt to agree upon a valid and enforceable provision that is a
reasonable substitute therefor, and upon so agreeing, shall incorporate such
substitute provision in this Agreement.

     

    7.12          Replacement of
Securities.  If any certificate or instrument evidencing any
Securities is mutilated, lost, stolen or destroyed, the Company shall issue or
cause to be issued in exchange and substitution for and upon cancellation
thereof, or in lieu of and substitution therefor, a new certificate or
instrument, but only upon the execution by the holder thereof of a customary
lost certificate affidavit of that fact and an agreement to indemnify and hold
harmless the Company and, with respect to Shares, the Transfer Agent for any
losses in connection therewith or, if required by the Transfer Agent, a bond in
such form and amount as is required by the Transfer Agent.  If a
replacement certificate or instrument evidencing any Securities is requested due
to a mutilation thereof, the Company may require delivery of such mutilated
certificate or instrument as a condition precedent to any issuance of a
replacement.

     

    7.13          Remedies.  In
addition to being entitled to exercise all rights provided herein or granted by
law, including recovery of damages, each of the Purchasers and the Company will
be entitled to specific performance under the Transaction
Documents.  The parties agree that monetary damages may not be
adequate compensation for any loss incurred by reason of any breach of
obligations described in the foregoing sentence and hereby agree to waive in any
action for specific performance of any such obligation (other than in connection
with any action for a temporary restraining order) the defense that a remedy at
law would be adequate.

     

    7.14          Adjustments in Share Numbers
and Prices. In the event of any stock split, subdivision, dividend or
distribution payable in shares of Common Stock (or other securities or rights
convertible into, or entitling the holder thereof to receive directly or
indirectly shares of Common Stock), combination or other similar
recapitalization or event occurring after the date hereof, each reference in any
Transaction Document to a number of shares or a price per share shall be deemed
to be amended to appropriately account for such event.

     

    7.15          Independent Nature of
Purchasers' Obligations and Rights.  The obligations of each
Purchaser under any Transaction Document are several and not joint with the
obligations of any other Purchaser, and no Purchaser shall be responsible in any
way for the performance of the obligations of any other Purchaser under any
Transaction Document.  The decision of each Purchaser to purchase
and/or acquire Securities pursuant to the Transaction Documents has been made by
such Purchaser independently of any other Purchaser and independently of any
information, materials, statements or opinions as to the business, affairs,
operations, assets, properties, liabilities, results of operations, condition
(financial or otherwise) or prospects of the Company which may have been made or
given by any other Purchaser or by any agent or employee of any other Purchaser,
and no Purchaser and any of its agents or employees shall have any liability to
any other Purchaser (or any other Person) relating to or arising from any such
information, materials, statement or opinions.  Nothing contained
herein or in any Transaction Document, and no action taken by any Purchaser
pursuant thereto, shall be deemed to constitute the Purchasers as a partnership,
an association, a joint venture or any other kind of entity, or create a
presumption that the Purchasers are in any way acting in concert or as a group
with respect to such obligations or the transactions contemplated by the
Transaction Documents.  Each Purchaser acknowledges that no other
Purchaser has acted as agent for such Purchaser in connection with making its
investment hereunder and that no Purchaser will be acting as agent of such
Purchaser in connection with monitoring its investment in the Securities or
enforcing its rights under the Transaction Documents.  The Company
acknowledges that each of the Purchasers has been provided with the same
Transaction Documents for the purpose of closing a transaction with multiple
Purchasers and not because it was required or requested to do so by any
Purchaser. The Company’s obligations to each Purchaser under this Agreement are
identical to its obligations to each other Purchaser other than such differences
resulting solely from the number of Securities purchased by such Purchaser, but
regardless of whether such obligations are memorialized herein or in another
agreement between the Company and a Purchaser.

     

    [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

    
      
         

      

      
        42.

        
          

        

      

      
         

      

    

     

    7.16           Waiver of
Conflicts.  Each party to this Agreement acknowledges that
Company Counsel, outside general counsel to the Company, has in the past
performed and is or may now or in the future represent one or more Purchasers or
their affiliates in matters unrelated to the transactions contemplated by this
Agreement (the “Financing”),
including representation of such Purchasers or their affiliates in matters of a
similar nature to the Financing.  The applicable rules of professional
conduct require that Company Counsel inform the parties hereunder of this
representation and obtain their consent.  Company Counsel has served
as outside general counsel to the Company and has negotiated the terms of the
Financing solely on behalf of the Company.  The Company and each
Purchaser hereby (a) acknowledge that they have had an opportunity to ask for
and have obtained information relevant to such representation, including
disclosure of the reasonably foreseeable adverse consequences of such
representation; (b) acknowledge that with respect to the Financing, Company
Counsel has represented solely the Company, and not any Purchaser or any
stockholder, director or employee of the Company or any Purchaser; and (c) gives
its informed consent to Company Counsel’s representation of the Company in the
Financing.

     

     {Signature Pages
Follow}

     

    [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

    
      
         

      

      
        43.

        
          

        

      

      
         

      

    

    IN
WITNESS WHEREOF, each of the parties hereto has caused this Securities Purchase
Agreement to be duly executed by its authorized signatory as of the date first
indicated above.

     

    
      
        
          
            	
                    COMPANY:

                  
	 
      
	
                    Sunesis
      Pharmaceuticals, Inc.

                  
	 
      	 
      
	
                    By:

                  	
                    /s/
      D. N. Swisher Jr.

                  
	 
      	
                    Name:  Daniel
      N. Swisher, Jr.

                  
	 
      	
                    Title:  President
      and Chief Executive
Officer

                  

          

        

      

    

    

    {REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK}

    {SIGNATURE
PAGES FOR PURCHASERS FOLLOW}

     

    [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    IN WITNESS WHEREOF, each of the parties
hereto has caused this Securities Purchase Agreement to be duly executed by
their respective authorized signatories as of the date first indicated
above.

    

    
      
        
          
            
              	
                      NAME
      OF PURCHASER:

                    	
                      Alta Biopharma Partners III,
      L.P.

                    
	
                      By:  Alta
      Biopharma Management III,
LLC

                    

            

          

        

      

    

     

    
      
        
          	
                  By:

                	
                  /s/ Edward Hurwitz

                
	
                  Name:

                	
                  Ed Hurwitz

                
	
                  Title:

                	
                  Director

                

        

      

    

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  	
                                                          First
      Unit Closing Subscription Amount:

                                                        	 	$	1,052,777	 	 
	 
      	 	 	 	 	 
	
                                                          Second
      Unit Closing Subscription Amount:

                                                        	 	$	526,389	 	 
	 
      	 	 	 	 	 
	
                                                          Common
      Equity Closing Subscription Amount:

                                                        	 	$	3,000,414	 	 

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
        
          
            
              
                	
                        Tax
      ID No.:

                      	
                        [ * ]

                      	 
      
	 
      	 
      	 
      
	
                        Address
      for Notice:

                      
	 
      	 
      	 
      
	
                        One Embarcadero Center

                      	 
      
	
                        37th Floor

                      	 
      
	
                        San Francisco,
      CA  94111

                      	 
      
	 
      	 
      	 
      
	
                        Telephone No.: 

                      	
                        [ * ]

                      	 
      
	 
      	 
      	 
      
	
                        Facsimile
      No.:

                      	
                        [ * ]

                      	 
      
	 
      	 
      	 
      
	
                        Attention:

                      	
                        [ * ]

                      	 
      

              

            

          

        

      

    

    

    Delivery
Instructions:

    (if
different than above)

    

    c/o  ________________________________________

    

    Street:   _____________________________________

    

    City/State/Zip:
_______________________________

    

    Attention:
___________________________________

    

    Telephone
No.: ______________________________

     

    
      [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

    

     

    
      
         

      

      
        2.

        
          

        

      

      
         

      

    

    IN
WITNESS WHEREOF, each of the parties hereto has caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

    

    
      
        
          	
                  NAME
      OF PURCHASER:

                	
                  Alta Biopharma Partners III GmbH & Co.
      Beteilgungs KG

                
	
                  By:  Alta
      Biopharma Management,
LLC

                

        

      

    

     

    
      
        	
                By:

              	
                /s/ Edward Hurwitz

              
	
                Name:

              	
                Ed Hurwitz

              
	
                Title:

              	
                Director

              

      

    

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            	
                                    First
      Unit Closing Subscription Amount:

                                  	 	$	70,703	 	 
	 
      	 	 	 	 	 
	
                                    Second
      Unit Closing Subscription Amount:

                                  	 	$	35,352	 	 
	 
      	 	 	 	 	 
	
                                    Common
      Equity Closing Subscription Amount:

                                  	 	$	201,505	 	 

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
        
          	
                  Tax
      ID No.:

                	
                  [ * ]

                	 
      
	 
      	 
      	 
      
	
                  Address
      for Notice:

                
	 
      	 
      	 
      
	
                  One Embarcadero Center

                	 
      
	
                  37th
      Floor

                	 
      
	
                  San Francisco,
      CA  94111

                	 
      
	 
      	 
      	 
      
	
                  Telephone No.: 

                	
                  [ * ]

                	 
      
	 
      	 
      	 
      
	
                  Facsimile
      No.:

                	
                  [ * ]

                	 
      
	 
      	 
      	 
      
	
                  Attention:

                	
                  [ * ]

                	 
      

        

      

    

    

    Delivery
Instructions:

    (if
different than above)

    

    c/o  ______________________________________

    

    Street:   ___________________________________

    

    City/State/Zip:
_____________________________

    

    Attention:
________________________________

    

    Telephone
No.: ____________________________

     

    [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

    
      
         

      

      
        3.

        
          

        

      

      
         

      

    

    IN
WITNESS WHEREOF, each of the parties hereto has caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

    

    
      
        	
                NAME
      OF PURCHASER:

              	
                Alta Embarcadero Biopharma Partners III,
      LLC

              

      

    

     

    
      
        	
                By:

              	
                /s/ Edward Hurwitz

              
	
                Name:

              	
                Ed Hurwitz

              
	
                Title:

              	
                Manager

              

      

    

    

    
      
        
          
            
              
                
                  
                    
                      
                        	
                                First
      Unit Closing Subscription Amount:

                              	 	$	25,945	 	 
	 
      	 	 	 	 	 
	
                                Second
      Unit Closing Subscription Amount:

                              	 	$	12,972	 	 
	 
      	 	 	 	 	 
	
                                Common
      Equity Closing Subscription Amount:

                              	 	$	73,943	 	 

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
        
          
            	
                    Tax
      ID No.:

                  	
                    [ * ]

                  	 
      
	 
      	 
      	 
      
	
                    Address
      for Notice:

                  
	 
      	 
      	 
      
	
                    One Embarcadero Center

                  	 
      
	
                    37th
      Floor

                  	 
      
	
                    San Francisco,
      CA  94111

                  	 
      
	 
      	 
      	 
      
	
                    Telephone No.: 

                  	
                    [ * ]

                  	 
      
	 
      	 
      	 
      
	
                    Facsimile
      No.:

                  	
                    [ * ]

                  	 
      
	 
      	 
      	 
      
	
                    Attention:

                  	
                    [ * ]

                  	 
      

          

        

      

    

    

    Delivery
Instructions:

    (if
different than above)

    

    c/o  ______________________________________

    

    Street:   ___________________________________

    

    City/State/Zip:
_____________________________

    

    Attention:
________________________________

    

    Telephone
No.: ____________________________

     

    [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

    
      
         

      

      
        4.

        
          

        

      

      
         

      

    

    IN WITNESS WHEREOF, each of the parties
hereto has caused this Securities Purchase Agreement to be duly executed by
their respective authorized signatories as of the date first indicated
above.

    

    
      
        
          	
                  NAME
      OF PURCHASER:

                	
                  Bay City Capital Fund V,
    L.P.

                
	
                  By:  Bay
      City Capital LLC, its
Manager

                

        

      

    

     

    
      
        	
                By:

              	
                /s/ Fred Craves

              
	
                Name:

              	
                Fred Craves

              
	
                Title:

              	
                Managing
Director

              

      

    

     

    
      
        
          
            
              
                
                  
                    	
                            First
      Unit Closing Subscription Amount:

                          	 	$	2,255,862	 	 
	 
      	 	 	 	 	 
	
                            Second
      Unit Closing Subscription Amount:

                          	 	$	1,127,931	 	 
	 
      	 	 	 	 	 
	
                            Common
      Equity Closing Subscription Amount:

                          	 	$	6,429,207	 	 

                  

                

              

            

          

        

      

    

     

    
      
        
          
            
              	
                      Tax
      ID No.:

                    	
                      [ * ]

                    	 
      
	 
      	 
      	 
      
	
                      Address
      for Notice:

                    	 
      
	 
      	 
      	 
      
	
                      750 Battery St., #400

                    	 
      
	
                      San Francisco,
      CA  94111

                    	 
      
	 
      	 
      
	 
      	 
      	 
      
	
                      Telephone No.: 

                    	
                      [ * ]

                    	 
      
	 
      	 
      	 
      
	
                      Facsimile
      No.:

                    	
                      [ * ]

                    	 
      
	 
      	 
      	 
      
	
                      Attention:

                    	
                      [ * ]

                    	 
      

            

          

        

      

    

    

    Delivery
Instructions:

    (if
different than above)

    

    c/o  ______________________________________

    

    Street:   ___________________________________

    

    City/State/Zip:
_____________________________

    

    Attention:
________________________________

    

    Telephone
No.: ____________________________

     

    [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

    
      
         

      

      
        5.

        
          

        

      

      
         

      

    

    IN WITNESS WHEREOF, each of the parties
hereto has caused this Securities Purchase Agreement to be duly executed by
their respective authorized signatories as of the date first indicated
above.

    

    
      
        	
                NAME
      OF PURCHASER:

              	
                Bay City Capital Fund V Co-Investment Fund,
      L.P.

              
	
                By:  Bay
      City Capital Management V LLC, its General Partner

              
	
                By:  Bay
      City Capital LLC, its Manager

              

      

    

     

    
      
        	
                By:

              	
                /s/ Fred Craves

              
	
                Name:

              	
                Fred Craves

              
	
                Title:

              	
                Managing
Director

              

      

    

     

    
      
        
          
            
              
                
                  
                    
                      	
                              First
      Unit Closing Subscription Amount:

                            	 	$	42,989	 	 
	 
      	 	 	 	 	 
	
                              Second
      Unit Closing Subscription Amount:

                            	 	$	21,494	 	 
	 
      	 	 	 	 	 
	
                              Common
      Equity Closing Subscription Amount:

                            	 	$	122,517	 	 

                    

                  

                

              

            

          

        

      

    

     

    
      
        
          	
                  Tax
      ID No.:

                	
                  [ * ]

                	 
      
	 
      	 
      	 
      
	
                  Address
      for Notice:

                
	 
      	 
      	 
      
	
                  750 Battery St., #400

                	 
      
	
                  San Francisco,
      CA  94111

                	 
      
	 
      	 
      
	 
      	 
      	 
      
	
                  Telephone No.: 

                	
                  [ * ]

                	 
      
	 
      	 
      	 
      
	
                  Facsimile
      No.:

                	
                  [ * ]

                	 
      
	 
      	 
      	 
      
	
                  Attention:

                	
                  [ * ]

                	 
      

        

      

    

    

    Delivery
Instructions:

    (if
different than above)

    

    c/o  ______________________________________

    

    Street:   ___________________________________

    

    City/State/Zip:
_____________________________

    

    Attention:
_________________________________

    

    Telephone
No.: _____________________________

     

    [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

    
      
         

      

      
        6.

        
          

        

      

      
         

      

    

    IN WITNESS WHEREOF, each of the parties
hereto has caused this Securities Purchase Agreement to be duly executed by
their respective authorized signatories as of the date first indicated
above.

    

    
      
        
          
            	
                    NAME
      OF PURCHASER:

                  	
                    Opus
      Point Healthcare Value Fund,
L.P.

                  

          

        

      

    

     

     

    
      
        	
                By:

              	
                /s/ Michael Weiss

              
	
                Name:

              	
                Michael S. Weiss

              
	
                Title:

              	
                Manager, Opus Point Healthcare Fund Management,
      LLC

              
	
                Investment Manager to the
    Fund

              

      

    

     

    
      
        
          
            
              
                
                  
                    	
                            First
      Unit Closing Subscription Amount:

                          	 	$	57,471.50	 	 
	 
      	 	 	 	 	 
	
                            Second
      Unit Closing Subscription Amount:

                          	 	$	28,735.50	 	 
	 
      	 	 	 	 	 
	
                            Common
      Equity Closing Subscription Amount:

                          	 	$	163,793	 	 

                  

                

              

            

          

        

      

    

     

    
      
        	
                Tax
      ID No.:

              	
                [ * ]

              	 
      
	 
      	 
      	 
      
	
                Address
      for Notice:

              
	 
      	 
      	 
      
	
                300 E 77th Street

              	 
      
	
                Ste. 7B

              	 
      
	
                New York,
    NY  10075

              	 
      
	 
      	 
      	 
      
	
                Telephone
      No.:

              	
                [ * ]

              	 
      
	 
      	 
      	 
      
	
                Facsimile
      No.:

              	
                [ * ]

              	 
      
	 
      	 
      	 
      
	
                Attention:

              	
                [ * ]

              	 
      

      

    

    

    Delivery
Instructions:

    (if
different than above)

    

    c/o  _______________________________________

    

    Street:   ____________________________________

    

    City/State/Zip:
_______________________________

    

    Attention:
__________________________________

    

    Telephone
No.: ______________________________

     

    
      [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

    

    
      
        
           

        

         

      

      
        7.

        
          

        

      

      
         

      

    

    IN WITNESS WHEREOF, each of the parties
hereto has caused this Securities Purchase Agreement to be duly executed by
their respective authorized signatories as of the date first indicated
above.

    

    
      
        	
                NAME
      OF PURCHASER:

              	
                Opus Point Healthcare (Low Net) Fund,
      L.P.

              

      

    

     

     

    
      
        	
                By:

              	
                /s/ Michael Weiss

              
	
                Name:

              	
                Michael S. Weiss

              
	
                Title:

              	
                Manager, Opus Point Healthcare Fund Management,
      LLC

              
	
                Investment Manager to the
    Fund

              

      

    

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              	
                                      First
      Unit Closing Subscription Amount:

                                    	 	$	57,471.50	 	 
	 
      	 	 	 	 	 
	
                                      Second
      Unit Closing Subscription Amount:

                                    	 	$	28,735.50	 	 
	 
      	 	 	 	 	 
	
                                      Common
      Equity Closing Subscription Amount:

                                    	 	$	163,793	 	 

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    

     

    
      
        	
                Tax
      ID No.:

              	
                [ * ]

              	 
      
	 
      	 
      	 
      
	
                Address
      for Notice:

              
	 
      	 
      	 
      
	
                300 E 77th
      Street

              	 
      
	
                Ste. 7B

              	 
      
	
                New York,
    NY  10075

              	 
      
	 
      	 
      	 
      
	
                Telephone
      No.:

              	
                [ * ]

              	 
      
	 
      	 
      	 
      
	
                Facsimile
      No.:

              	
                [ * ]

              	 
      
	 
      	 
      	 
      
	
                Attention:

              	
                [ * ]

              	 
      

      

    

    

    Delivery
Instructions:

    (if
different than above)

    

    c/o  _______________________________________

    

    Street:   ____________________________________

    

    City/State/Zip:
_______________________________

    

    Attention:
__________________________________

    

    Telephone
No.: ______________________________

     

    
      [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

       

    

    
      
         

      

      
        8.

        
          

        

      

      
         

      

    

    IN WITNESS WHEREOF, each of the parties
hereto has caused this Securities Purchase Agreement to be duly executed by
their respective authorized signatories as of the date first indicated
above.

     

    
      
        	
                NAME
      OF PURCHASER:

              	
                Merlin Nexus III,
  LP

              

      

    

    
       

       

      
        	
                By:

              	
                /s/ Dominique Selmon

              
	
                Name:

              	
                Dominique Selmon

              
	
                Title:

              	
                Managing
Partner

              

      

    

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            	
                                    First
      Unit Closing Subscription Amount:

                                  	 	$	689,655	 	 
	 
      	 	 	 	 	 
	
                                    Second
      Unit Closing Subscription Amount:

                                  	 	$	344,828	 	 
	 
      	 	 	 	 	 
	
                                    Common
      Equity Closing Subscription Amount:

                                  	 	$	1,965,517	 	 

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
        
          
            
              
                
                  
                    
                      
                        	
                                Tax
      ID No.:

                              	
                                [ * ]

                              	 
      
	 
      	 
      	 
      
	
                                Address
      for Notice:

                              	 
      
	 
      	 
      	 
      
	
                                230 Park Ave. Ste. 928

                              	 
      
	
                                New York,
    NY  10169

                              	 
      
	 
      	 
      
	 
      	 
      	 
      
	
                                Telephone
      No.:

                              	
                                [ * ]

                              	 
      
	 
      	 
      	 
      
	
                                Facsimile
      No.:

                              	 
      	 
      
	 
      	 
      	 
      
	
                                Attention:

                              	 
      	 
      

                      

                    

                  

                

              

            

          

        

      

    

    

    Delivery
Instructions:

    (if
different than above)

    

    c/o  _______________________________________

    

    Street:   ____________________________________

    

    City/State/Zip:
_______________________________

    

    Attention:
__________________________________

    

    Telephone
No.: ______________________________

    
       

      [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

    

    
      
         

      

      
        9.

        
          

        

      

      
         

      

    

    IN
WITNESS WHEREOF, each of the parties hereto has caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

    

    

    
      
        
          	
                  NAME
      OF PURCHASER:

                	
                  Nexus
      Gemini, LP

                

        

      

    

     

     

    
      
        	
                By:

              	
                /s/ Dominique Selmon

              
	
                Name:

              	
                Dominique Selmon

              
	
                Title:

              	
                Managing
Partner

              

      

    

     

    
      
        
          
            
              
                
                  
                    
                      	
                              First
      Unit Closing Subscription Amount:

                            	 	$	482,759	 	 
	 
      	 	 	 	 	 
	
                              Second
      Unit Closing Subscription Amount:

                            	 	$	241,379	 	 
	 
      	 	 	 	 	 
	
                              Common
      Equity Closing Subscription Amount:

                            	 	$	1,375,862	 	 

                    

                  

                

              

            

          

        

      

    

     

    
      
        
          
            
              
                	
                        Tax
      ID No.:

                      	
                        [ * ]

                      	 
      
	 
      	 
      	 
      
	
                        Address
      for Notice:

                      
	 
      	 
      	 
      
	
                        230 Park Ave. Ste. 928

                      	 
      
	
                        New York,
    NY  10169

                      	 
      
	 
      	 
      
	 
      	 
      	 
      
	
                        Telephone
      No.:

                      	
                        [ * ]

                      	 
      
	 
      	 
      	 
      
	
                        Facsimile
      No.:

                      	 
      	 
      
	 
      	 
      	 
      
	
                        Attention:

                      	 
      	 
      

              

            

          

        

      

    

    

    Delivery
Instructions:

    (if
different than above)

    

    c/o  _______________________________________

    

    Street:   ____________________________________

    

    City/State/Zip:
_______________________________

    

    Attention:
__________________________________

    

    Telephone
No.: ______________________________

    
       

      [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

    

    
      
         

      

      
        10.

        
          

        

      

      
         

      

    

    IN WITNESS WHEREOF, each of the parties
hereto has caused this Securities Purchase Agreement to be duly executed by
their respective authorized signatories as of the date first indicated
above.

    

    
      
        	
                NAME
      OF PURCHASER:

              	
                Growth Equity Opportunities Fund,
      LLC

              
	
                By:  New
      Enterprise Associates 12, L.P., its sole Member

              
	
                By:  NEA
      Partners 12, L.P., its General Partner

              
	
                By:  NEA
      12 GP, LLC, its General
Partner

              

      

    

     

     

    
      
        	
                By:

              	
                /s/ Charles W. Newhall
  III

              
	
                Name:

              	
                Charles W. Newhall III

              
	
                Title:

              	
                Manager

              

      

    

     

    
      
        
          
            
              
                
                  
                    	
                            First
      Unit Closing Subscription Amount:

                          	 	$	2,298,851	 	 
	 
      	 	 	 	 	 
	
                            Second
      Unit Closing Subscription Amount:

                          	 	$	1,149,425	 	 
	 
      	 	 	 	 	 
	
                            Common
      Equity Closing Subscription Amount:

                          	 	$	6,551,724	 	 

                  

                

              

            

          

        

      

    

     

    
      
        	
                Tax
      ID No.:

              	
                [ * ]

              	 
      
	 
      	 
      	 
      
	
                Address
      for Notice:

              
	 
      	 
      	 
      
	
                119 St. Paul Street

              	 
      
	
                Baltimore, MD

              	 
      
	
                21202

              	 
      
	 
      	 
      	 
      
	
                Telephone
      No.:

              	
                [ * ]

              	 
      
	 
      	 
      	 
      
	
                Facsimile
      No.:

              	
                [ * ]

              	 
      
	 
      	 
      	 
      
	
                Attention:

              	
                [ * ]

              	 
      

      

    

    

    Delivery
Instructions:

    (if
different than above)

    

    c/o  _______________________________________

    

    Street:   ____________________________________

    

    City/State/Zip:
_______________________________

    

    Attention:
__________________________________

    

    Telephone
No.: ______________________________

     

    
      [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

       

    

    
      
         

      

      
        11.

        
          

        

      

      
         

      

    

    IN WITNESS WHEREOF, each of the parties
hereto has caused this Securities Purchase Agreement to be duly executed by
their respective authorized signatories as of the date first indicated
above.

    

    
      
        	
                NAME OF
      PURCHASER:

              	
                Caxton Advantage Life Sciences Fund,
      L.P.

              
	
                By:  Caxton
      Advantage Venture Partners, L.P.,

              
	
                its
      Managing General Partner

              

      

    

    

    

    
      
        	
                By:

              	
                /s/ Eric W. Roberts

              
	
                Name:

              	
                Eric W. Roberts

              
	
                Title:

              	
                Managing
Director

              

      

    

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                	
                                        First
      Unit Closing Subscription Amount:

                                      	 	$	574,713	 	 
	 	 	 	 	 	 
	
                                        Second
      Unit Closing Subscription Amount:

                                      	 	$	287,356	 	 
	 	 	 	 	 	 
	
                                        Common
      Equity Closing Subscription Amount:

                                      	 	$	1,637,931	 	 

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
        
          
            
              
                
                  	
                          Tax
      ID No.:

                        	
                          [ * ]

                        	 
      
	
                          Address
      for Notice:

                        	 
      
	 	 
	
                          500 Park Avenue

                        	 
      
	
                          New York,
    NY  10022

                        	 
      
	
                           

                        	 
      
	 
      	 
      	 
      
	
                          Telephone
      No.:

                        	
                          [ * ]

                        	 
      
	 
      	 
      	 
      
	
                          Facsimile
      No.:

                        	
                          [ * ]

                        	 
      
	 
      	 
      	 
      
	
                          Attention:

                        	
                          [ * ]

                        	 
      

                

              

            

          

        

      

    

    

    Delivery
Instructions:

    (if
different than above)

    

    c/o  _______________________________________

    

    Street:   ____________________________________

    

    City/State/Zip:
_______________________________

    

    Attention:
__________________________________

    

    Telephone
No.: ______________________________

     

    
      [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

       

    

    
      
         

      

      
        12.

        
          

        

      

      
         

      

    

    IN WITNESS WHEREOF, each of the parties
hereto has caused this Securities Purchase Agreement to be duly executed by
their respective authorized signatories as of the date first indicated
above.

    

    
      
        
          
            
              
                	
                        NAME OF
      PURCHASER:

                      	
                        ONC General Partner Limited as General Partner of 

                      
	ONC
      Partners, LP

              

            

          

        

      

       

       

    

    
      
        	
                By:

              	
                /s/ M. Paul

              
	
                Name:

              	
                Martin Paul

              
	
                Title:

              	
                Director

              

      

    

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                	
                                        First
      Unit Closing Subscription Amount:

                                      	 	$	1,149,425	 	 
	 	 	 	 	 	 
	
                                        Second
      Unit Closing Subscription Amount:

                                      	 	$	574,713	 	 
	 	 	 	 	 	 
	
                                        Common
      Equity Closing Subscription Amount:

                                      	 	$	3,275,862	 	 

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    

    
      
        
          
            
              
                
                  	
                          Tax
      ID No.:

                        	
                          [ * ]

                        	 
      
	 	 
	
                          Address
      for Notice:

                        	 
      
	 	 
	
                          26 New Street

                        	 
      
	
                          St. Helen

                        	 
      
	
                          Jersey, JE4 8PP

                        	 
      
	 
      	 
      	 
      
	
                          Telephone
      No.:

                        	
                          [ * ]

                        	 
      
	 
      	 
      	 
      
	
                          Facsimile
      No.:

                        	
                          [ * ]

                        	 
      
	 
      	 
      	 
      
	
                          Attention:

                        	
                          [ * ]

                        	 
      

                

              

            

          

        

      

    

    

    Delivery
Instructions:

    (if
different than above)

    

    c/o  _______________________________________

    

    Street:   ____________________________________

    

    City/State/Zip:
_______________________________

    

    Attention:
__________________________________

    

    Telephone
No.: ______________________________

     

    
      [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

       

      
        
          
             

          

          
            13.

            
              

            

          

          
             

          

        

      

      

    

    IN WITNESS WHEREOF, each of the parties
hereto has caused this Securities Purchase Agreement to be duly executed by
their respective authorized signatories as of the date first indicated
above.

    

    
      
        
          
            	
                    NAME
      OF PURCHASER:

                  	
                    Vision
      Opportunity Master Fund,
Ltd.

                  

          

        

      

    

     

     

    
      
        	
                By:

              	
                /s/ Adam Benowitz

              
	
                Name:

              	
                Adam Benowitz

              
	
                Title:

              	
                Director

              

      

    

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      	
                                              First
      Unit Closing Subscription Amount:

                                            	 	$	689,655	 	 
	 	 	 	 	 	 
	
                                              Second
      Unit Closing Subscription Amount:

                                            	 	$	344,828	 	 
	 	 	 	 	 	 
	
                                              Common
      Equity Closing Subscription Amount:

                                            	 	$	1,965,517	 	 

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
        
          
            
              
                
                  
                    	
                            Tax
      ID No.:

                          	
                            [ * ]

                          	 
      
	 	 
	
                            Prinicipal
      Executive Office:

                          	 
      
	 	 
	
                            c/o
      Citi Hedge Fund Services (Cayman) Limited P.O. Box 1748

                          	 
      
	
                            Cayman
      Corporate Centre

                          	 
      
	
                            27
      Hospital Road, 5th
      Floor

                          	 
      
	
                            Grand
      Cayman KY1-1109

                          	 
      
	
                            Cayman
      Islands

                          	 
      
	 
      	 
      
	
                            Address
      for Notice:

                          	 
      
	
                            c/o Vision Capital Advisors,
      LLC

                          	 
      
	
                            Attn:  [ * ] OR General Counsel

                          	 
      
	
                            20 West 55th Street, 5th Floor

                          	 
      
	
                            New York,
      NY  10019  USA

                          	 
      
	 
      	 
      	 
      
	
                            Telephone
      No.:

                          	
                            [ * ]

                          	 
      
	
                            Facsimile
      No.:

                          	
                            [ * ]

                          	 
      
	
                            Attention:

                          	
                            [ * ] OR General Counsel

                          	 
      

                  

                

              

            

          

        

      

    

    

    
      
        
          
            Delivery
Instructions:

            (if
different than above)

            Vision
Capital Advisors, LLC

            c/o  _Jefferies &
Co.___________________________

            Street:__520 Madison Ave., Floor
12_______________

            City/State/Zip:
  New York,
NY  10022______________

            Attention:  _[
* ]______________________________

            Telephone
No.: __[ *
]_________________________

          

        

      

    

     

    
      [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

       

      
        
          
             

          

          
            14.

            
              

            

          

          
             

          

        

      

      

    

    IN WITNESS WHEREOF, each of the parties
hereto has caused this Securities Purchase Agreement to be duly executed by
their respective authorized signatories as of the date first indicated
above.

    

    
      
        
          	
                  NAME OF
      PURCHASER:

                	
                  Swisher Revocable
  Trust

                

        

      

    

     

     

    
      
        
          
            
              	
                      By:

                    	/s/ Daniel N.
      Swisher                       
      (trustee)
	
                      Name:

                    	
                      Daniel N. Swisher, Jr.

                    
	
                      Title:

                    	
                      CEO

                    

            

          

        

      

    

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    	
                                            First
      Unit Closing Subscription Amount:

                                          	 	$	45,977	 	 
	 	 	 	 	 	 
	
                                            Second
      Unit Closing Subscription Amount:

                                          	 	$	22,989	 	 
	 	 	 	 	 	 
	
                                            Common
      Equity Closing Subscription Amount:

                                          	 	$	131,034	 	 

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
        
          
            
              
                
                  	
                          Tax
      ID No.:

                        	
                          [ * ]

                        	 
      
	 	 
	
                          Address
      for Notice:

                        	 
      
	 	 
	
                          10 Redberry Ridge

                        	 
      
	
                          Portola Valley,
      CA  94028

                        	 
      
	
                           

                        	 
      
	 
      	 
      
	
                          Telephone
      No.:

                        	
                          [ * ]

                        	 
      
	 
      	 
      	 
      
	
                          Facsimile
      No.:

                        	
                           

                        	 
      
	 
      	 
      	 
      
	
                          Attention:

                        	
                          [ * ]

                        	 
      

                

              

            

          

        

      

    

    

    
      Delivery
Instructions:

      (if
different than above)

      

      c/o  _______________________________________

      

      Street:_____________________________________

      

      City/State/Zip:
_______________________________

      

      Attention:
__________________________________

      

      Telephone
No.: ______________________________

    

     

    
      [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

       

      
        
          
             

          

          
            15.

            
              

            

          

          
             

          

        

      

      

    

    IN WITNESS WHEREOF, each of the parties
hereto has caused this Securities Purchase Agreement to be duly executed by
their respective authorized signatories as of the date first indicated
above.

    

    
      
        
          	
                  NAME OF
      PURCHASER:

                	
                  Bjerkholt/Hahn Family
  Trust

                

        

      

    

     

     

    
      
        
          
            
              	
                      By:

                    	
                      /s/ Eric Bjerkholt

                    
	
                      Name:

                    	
                      Eric Bjerkholt

                    
	
                      Title:

                    	 
      

            

          

        

      

    

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              	
                                      First
      Unit Closing Subscription Amount:

                                    	 	$	22,989	 	 
	 	 	 	 	 	 
	
                                      Second
      Unit Closing Subscription Amount:

                                    	 	$	11,494	 	 
	 	 	 	 	 	 
	
                                      Common
      Equity Closing Subscription Amount:

                                    	 	$	65,517	 	 

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    	
                                            Tax
      ID No.:

                                          	
                                            [ * ]

                                          	 
	 	 	 
	
                                            Address
      for Notice:

                                          	 
	 	 	 
	
                                            1130 Shattuck Ave.

                                          	 
	
                                            Berkeley, CA  94707
    

                                          	 
	
                                             

                                          	 
	 
      	 
      	 
	
                                            Telephone
      No.:

                                          	
                                            [ * ]

                                          	 
	 
      	 
      	 
	
                                            Facsimile
      No.:

                                          	
                                             

                                          	 
	 
      	 
      	 
	
                                            Attention:

                                          	
                                            [ * ]

                                          	 

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    

    Delivery
Instructions:

    (if
different than above)

     

    
      c/o  _______________________________________

      

      Street:_1130 Shattuck
Ave.______________________

      

      City/State/Zip:
_Berkeley,
CA  94707_______________

      

      Attention:
__[
* ]_____________________________

      

      Telephone
No.: __[ *
]__________________________

    

    
       

      
        [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

         

      

    

    
      
         

      

      
        16.

        
          

        

      

      
         

      

    

    IN WITNESS WHEREOF, each of the parties
hereto has caused this Securities Purchase Agreement to be duly executed by
their respective authorized signatories as of the date first indicated
above.

    

    
      
        
          	
                  NAME OF
      PURCHASER:

                	
                  Steven Blake
  Ketchum

                

        

      

    

     

     

    
      
        
          
            	
                    By:

                  	
                    /s/ Steven Blake Ketchum

                  
	
                    Name:

                  	
                    Steven Blake Ketchum

                  
	
                    Title:

                  	 
      

          

        

      

    

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              	
                                      First
      Unit Closing Subscription Amount:

                                    	 	$	22,989	 	 
	 	 	 	 	 	 
	
                                      Second
      Unit Closing Subscription Amount:

                                    	 	$	11,494	 	 
	 	 	 	 	 	 
	
                                      Common
      Equity Closing Subscription Amount:

                                    	 	$	65,517	 	 

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          	
                                  Tax
      ID No.:

                                	
                                  [ * ]

                                	 
      
	 	 	 
	
                                  Address
      for Notice:

                                	 
      
	 	 
	
                                  49 Canoe Brook Lane

                                	 
      
	
                                  Far Hills,
      NJ  07931-2808

                                	 
      
	
                                   

                                	 
      
	 
      	 
      	 
      
	
                                  Telephone
      No.:

                                	
                                  [ * ]

                                	 
      
	 
      	 
      	 
      
	
                                  Facsimile
      No.:

                                	
                                   

                                	 
      
	 
      	 
      	 
      
	
                                  Attention:

                                	
                                   

                                	 
      

                        

                      

                    

                  

                

              

            

          

        

      

    

    

    Delivery
Instructions:

    (if
different than above)

     

    
      c/o  _______________________________________

      

      Street:______________________________________

      

      City/State/Zip:
_______________________________

      

      Attention:
__________________________________

      

      Telephone
No.: ______________________________

    

     

    
      [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

       

      
        
          
             

          

          
            17.

            
              

            

          

          
             

          

        

      

    

     

    EXHIBIT
LIST:

    

    
      
        
          	
                  Exhibit
      A:

                	
                  Form
      of Certificate of Designation

                
	
                  Exhibit
      B:

                	
                  Form
      of Warrant

                
	
                  Exhibit
      C:

                	
                  Form
      of Investor Rights Agreement

                
	
                  Exhibit
      D:

                	
                  Stock
      Certificate Questionnaire

                
	
                  Exhibit
      E-1:

                	
                  Form
      of Opinion of Company Counsel (First Unit Closing and Second Unit
      Closing)

                
	
                  Exhibit
      E-2:

                	
                  Form
      of Opinion of Company Counsel (Common Equity Closing)

                
	
                  Exhibit
      F:

                	
                  Irrevocable
      Transfer Agent Instructions

                
	
                  Exhibit
      G:

                	
                  Form
      of Secretary’s Certificate

                
	
                  Exhibit
      H:

                	
                  Form
      of Officer’s Certificate

                
	
                  Exhibit
      I:

                	
                  Description
      of Charter Amendments

                
	
                  Exhibit
      J:

                	
                  Terms
      of Employee Retention Plan

                
	Schedule
      I: 	Purchaser
      Subscription Amounts 

        

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
A

    

    CERTIFICATE
OF DESIGNATION

    OF THE
SERIES A PREFERRED STOCK

    OF

    SUNESIS
PHARMACEUTICALS, INC.

     

    Pursuant
to Section 151 of the

    
      General
Corporation Law of the State of Delaware

    

     

    
      

    

     

    The
undersigned, Daniel N. Swisher, Jr., hereby certifies that:

     

    ONE:         The
name of this corporation is Sunesis
Pharmaceuticals, Inc. (the “Company”
or the “Corporation”)
and the date of filing the original Certificate of Incorporation of this
Corporation with the Secretary of State of the State of Delaware is February 10,
1998.

     

    TWO:       He
is the duly elected and acting President and Chief Executive Officer of this
Corporation.

     

    THREE:       The Amended and Restated Certificate
of Incorporation of the Company filed with the Secretary of State of the State
of Delaware on September 14, 2005 (the “Restated Certificate”) authorizes a class of stock
designated Preferred Stock (the “Preferred Stock”), comprising five million
(5,000,000) shares, and provides that such Preferred Stock may be issued from
time to time in one or more series, and vests authority in the Board of
Directors of the Company (the “Board of Directors”) to fix or alter the powers,
preferences, rights, restrictions and other matters granted to or imposed upon
any wholly unissued series of the Preferred Stock.

    
      
        
          [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

        

         

      

      
        1

        
          

        

      

      
         

      

    

     

    FOUR:          Pursuant
to the provisions of Section 151 of the General Corporation Law of the State of
Delaware and the authority vested in the Board of Directors by the Restated
Certificate, the Board of Directors does hereby provide for the creation of one
series of the Preferred Stock, one hundredth of one cent ($0.0001) par value per
share, of the Company, and to the extent that the voting powers and the
designations, preferences and relative, participating, optional or other special
rights thereof and the qualifications, limitations or restrictions of such
rights have not been set forth in the Restated Certificate, does hereby fix the
same as follows:

     

    A.            Series A
Preferred Stock.  Five million (5,000,000) of the authorized
shares of Preferred Stock are hereby designated “Series A Preferred Stock” (the
“Series A
Preferred”). The powers, preferences, rights, restrictions and other
matters relating to the Series A Preferred are as follows:

     

    1.      
    Dividend
Rights.  The holders of the shares of Series A Preferred shall
be entitled to participate, when, as and if declared by the Board of Directors
out of funds legally available for the purpose, on an as-converted basis with
respect to any dividends payable to the holders of Common Stock.

     

    2.      
    Voting Rights.

     

    a.          
General
Rights.  Except as otherwise provided herein or as required by
law, the Series A Preferred shall vote together with the shares of Common Stock
on all matters and not as a separate class, at any annual or special meeting of
stockholders of the Company, and may act by written consent in the same manner
as the Common Stock, in either case upon the following basis: each holder of
shares of Series A Preferred shall be entitled to such number of votes as shall
be equal to the whole number of shares of Common Stock into which such holder’s
aggregate number of shares of Series A Preferred are convertible (pursuant to
Section 4 hereof) as of the close of business on the record date fixed for such
meeting or the effective date of such written consent.

     

    b.          
Separate Vote of Series
A Preferred. For so long as at least two hundred and fifty thousand
(250,000) shares of Series A Preferred (subject to adjustment for any stock
split, reverse stock split or other similar event affecting the Series A
Preferred after the filing date hereof) remain outstanding, in addition to any
other vote or consent required herein or by law, the vote or written consent of
the holders of at least a majority of the outstanding
Series A Preferred (the “Requisite
Holders”) shall be necessary for effecting or validating the following
actions (whether by merger, recapitalization or otherwise):

     

    (i)           Any
Change of Control (as defined in Section 3 below);

     

    (ii)        
 Any declaration or payment of dividends on the Company’s capital
stock;

     

    (iii)        
Any distribution of cash, securities or other property of the Company to
any of its security holders, other than in the ordinary course of business
consistent with past practice;

     

    
      (iv)         
Any
redemption of securities of the Company;

    

    
      
        
          [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

        

         

      

      
        2

        
          

        

      

      
         

      

    

     

    (v)          
Any amendment of the Company’s Certificate of Incorporation or
Bylaws;

     

    (vi)       
  Any voluntary liquidation, dissolution or winding up of the
Company;

     

    (vii)       
Any creation (by reclassification or otherwise) or authorization of a new
class or series of shares having rights, preferences or privileges senior to or
on parity with the Series A Preferred;

     

    (viii)     
 Any issuance of Common Stock (a “Common Stock
Financing”); provided,
however, that no consent of the Series A Preferred shall be required
pursuant to this paragraph (viii) for the Common Equity Closing (as such term is
defined in that certain Securities Purchase Agreement, dated March 31, 2009, by
and between the Company and the other parties thereto (as amended from time to
time, the “Purchase
Agreement”)) and the other transactions contemplated by the Purchase
Agreement; and provided,
further, that no consent of the Series A Preferred shall be required
under this paragraph (viii) for any Common Stock Financing that (A) provides
aggregate gross cash proceeds to the Company equal to or greater than the
Minimum Aggregate Common Equity Subscription Amount (as such term is defined in
the Purchase Agreement) and (B) has a purchase price per share of Common Stock
equal to or greater than $0.44 per share, subject to adjustment for any stock
dividends, combinations, splits, recapitalizations and the like; notwithstanding
the foregoing, this paragraph (viii) shall automatically terminate and be of no
force or effect upon the earlier of (I) receipt by the Company of the
Non-Participation Notice (as such term is defined in the Purchase Agreement),
(II) January 15, 2010, if the Cash Balance Notice (as such term is defined in
the Purchase Agreement) reflects a Cash (as such term is defined in the Purchase
Agreement) balance of less than $4.0 million as of January 8, 2010 and no
Purchaser Put Notice (as such term is defined in the Purchase Agreement) is
delivered to the Company on or before January 15, 2010, (III) December 31, 2010,
if no Cash Balance Notice delivered prior to such date reflects a Cash balance
less than $4.0 million, and (IV) five (5) Trading Days following the delivery to
the Lead Purchasers (as such term is defined in the Purchase Agreement) of a
Cash Balance Notice reflecting a Cash balance of the Company of less than $4.0
million and no Purchaser Put Notice is delivered.

     

    (ix)        
Any issuance of shares of capital stock of the Company, other than a
Common Stock Financing or pursuant to the Purchase Agreement, incurrence of
indebtedness (whether or not convertible into shares of capital stock of the
Company) or grant of any security interest in the Company (or any subsidiary
thereof) or their respective assets;

     

    (x)         
Any increase or decrease in the authorized number of shares of Series A
Preferred; or

     

    (xi)        
Any amendment of the rights, preferences or privileges of the Series A
Preferred.

     

    3.          
Liquidation Rights.

     

    a.           
Upon any liquidation, dissolution or winding up of the Company, whether
voluntary or involuntary, before any distribution or payment shall be made to
the holders of any Common Stock, the holders of Series A Preferred shall be
entitled to be paid out of the assets of the Company legally available for
distribution, or the consideration received in such transaction, an amount per
share of Series A Preferred equal to $10.35 plus all declared and unpaid
dividends on such Series A Preferred for each share of Series A Preferred held
by them (as adjusted for any stock dividends, combinations, splits,
recapitalizations and the like with respect to such shares after the filing date
hereof).

     

    
      
        
          [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

        

         

      

      
        3

        
          

        

      

      
         

      

    

     

    b.           
After the payment of the full liquidation preference of the Series A
Preferred as set forth in Section 3(a) above, the remaining assets of the
Company legally available for distribution (or the consideration received in
such transaction), if any, shall be distributed ratably to the holders of the
Common Stock.

     

    c.           
Unless otherwise waived by the Requisite Holders at such time as a Change
of Control is approved pursuant to Section 2(b) above, a Change of Control shall
be deemed a liquidation for purposes of this Section 3. A “Change of
Control” shall mean and consist of any of the following
events:

     

    (i)         
Any consolidation or merger of the Company with or into any other
corporation or other entity or person, or any other corporate reorganization, in
which the stockholders of the Company immediately prior to such consolidation,
merger or reorganization own less than 50% of the voting power of the surviving
entity immediately after such consolidation, merger or reorganization; or any
transaction or series of related transactions to which the Company is a party in
which in excess of fifty percent (50%) of the Company’s voting power is
transferred other than the sale of equity securities issued pursuant to the
Purchase Agreement (an “Acquisition”);
or

     

    (ii)        
A sale, exclusive license or exclusive partnering (in either case, on a
worldwide or regional basis) of a majority or more of the assets of the Company
(an “Asset Transfer”).

     

    d.           
In any of such events specified in Section 3(c), if the consideration
received by Company is other than cash, its value will be deemed its fair market
value as determined in good faith by the Board of Directors.  Any
securities shall be valued as follows:

     

    (i)          Securities
not subject to investment letter or other similar restrictions on free
marketability covered by (ii) below:

     

    (a)           If
traded on a securities exchange or through the NASDAQ Global Market, NYSE or
other national stock exchange quotation system, the value shall be deemed to be
the average of the closing prices of the securities on such quotation system
over the thirty (30) day period ending three (3) days prior to the
closing;

     

    (b)           If
actively traded over-the-counter, the value shall be deemed to be the average of
the closing bid or sale prices (whichever is applicable) over the thirty (30)
day period ending three (3) days prior to the closing; and

     

    (c)           If
there is no active public market, the value shall be the fair market value
thereof, as determined in good faith by the Board of Directors.

     

    (ii)        
The method of valuation of securities subject to investment letter or
other restrictions on free marketability (other than restrictions arising solely
by virtue of a stockholder’s status as an affiliate or former affiliate) shall
be to make an appropriate discount from the market value determined as above in
(i)(a), (b) or (c) to reflect the approximate fair market value thereof, as
determined in good faith by the Board of Directors.

    
      
        
          [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

        

         

      

      
        4

        
          

        

      

      
         

      

    

     

    e.           
If, upon any such liquidation, dissolution, or winding up, the assets of
the Company (or the consideration received in such transaction) shall be
insufficient to make payment in full to all holders of Series A Preferred of the
liquidation preference set forth in Section 3(a) above, then such assets
(or consideration) shall be distributed among the holders of Series A Preferred
at the time outstanding, ratably in proportion to the full amounts to which they
would otherwise be respectively entitled with respect to their shares of Series
A Preferred, and, immediately following any such distribution, the Series A
Preferred shall be cancelled.

     

    4.           Conversion
Rights.

     

    The
holders of the Series A Preferred shall have the following rights with respect
to the conversion of the Series A Preferred into shares of Common Stock (the
“Conversion
Rights”):

     

    a.           
Optional
Conversion.  Subject to and in compliance with the provisions
of this Section 4, any shares of Series A Preferred may, at the option of
the holder, be converted at any time after the “Convertibility
Date” into fully-paid and nonassessable shares of Common Stock. The
number of shares of Common Stock to which a holder of Series A Preferred shall
be entitled upon conversion shall be the product obtained by multiplying the
“Series A
Preferred Conversion Rate” then in effect (determined as provided in
Section 4(b)) by the number of shares of Series A Preferred being
converted.  The “Convertibility
Date” shall be the earliest to occur of (i) one day following the closing
of an Alternative Common Stock Financing (each such term as defined in the
Purchase Agreement) or (ii) January 24, 2011.

     

    b.            Series A Preferred Conversion
Rate.  The conversion rate in effect at any time for conversion
of the Series A Preferred (the “Series A
Preferred Conversion Rate”) shall be the quotient obtained by dividing
the Original Issue Price by the “Series A
Preferred Conversion Price,” calculated as provided in Section 4(c);
provided, however, that
in the event of a Special Mandatory Conversion (as defined below), the Series A
Preferred Conversion Rate shall be as set forth in Section 4(m)(i)
below.   The “Original Issue
Price” of the Series A Preferred shall be $2.20 (as adjusted for any
stock dividends, combinations, splits, recapitalizations and the like with
respect to such shares after the filing date hereof).

     

    c.           
Series A Preferred
Conversion Price.  The conversion price for the Series A
Preferred shall initially be equal to $0.22 (the “Series A
Preferred Conversion Price”).  Such initial Series A Preferred
Conversion Price shall be adjusted from time to time in accordance with this
Section 4.  All references to the Series A Preferred Conversion Price
herein shall mean the Series A Preferred Conversion Price as so
adjusted.

     

    d.           
Mechanics of
Conversion.  Each holder of Series A Preferred who desires to
convert the same into shares of Common Stock pursuant to this Section 4
shall surrender the certificate or certificates therefor, duly endorsed, at the
office of the Company or any transfer agent for the Series A Preferred, and
shall give written notice to the Company at such office that such holder elects
to convert the same.  Such notice shall state the number of shares of
Series A Preferred being converted.  Thereupon, the Company shall
promptly (which shall be no later than three (3) business days) issue and
deliver at such office to such holder a certificate or certificates for the
number of shares of Common Stock to which such holder is entitled and pay (i) in
cash or, to the extent sufficient funds are not then legally available therefor,
in Common Stock (at the Common Stock’s Fair Market Value calculated as of the
date of such conversion), any declared and unpaid dividends on the shares of
Series A Preferred being converted, and (ii) in cash (at the Common Stock’s Fair
Market Value calculated as of the date of conversion) the value of any
fractional share of Common Stock otherwise issuable to any holder of Series A
Series Preferred.  Such conversion shall be deemed to have been made
at the close of business on the date of such surrender of the certificates
representing the shares of Series A Preferred to be converted, and the person
entitled to receive the shares of Common Stock issuable upon such conversion
shall be treated for all purposes as the record holder of such shares of Common
Stock on such date. The “Fair Market Value” of the Common Stock as of the date
of the conversion shall be determined as follows:

    
      
        
          [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

        

         

      

      
        5

        
          

        

      

      
         

      

    

     

    (i)          
If traded on a securities exchange or through the NASDAQ Global Market,
NYSE or other national stock exchange quotation system, the value shall be
deemed to be the average of the closing prices of the securities on such
quotation system over the thirty (30) day period ending three (3) days prior to
the conversion;

     

    (ii)         
If actively traded over-the-counter, the value shall be deemed to be the
average of the closing bid or sale prices (whichever is applicable) over the
thirty (30) day period ending three (3) days prior to the conversion;
and

     

    (iii)        
If there is no active public market, the value shall be the fair market
value thereof, as determined in good faith by the Board of Directors.

     

    e.           
Adjustment for Stock
Splits and Combinations.  If the Company shall at any time or
from time to time after the date that the first share of Series A Preferred is
issued (the “Original Issue
Date”) effect a subdivision of the outstanding Common Stock without a
corresponding subdivision of the Preferred Stock, the Series A Preferred
Conversion Price in effect immediately before that subdivision shall be
proportionately decreased.  Conversely, if the Company shall at any
time or from time to time after the Original Issue Date combine the outstanding
shares of Common Stock into a smaller number of shares without a corresponding
combination of the Preferred Stock, the Series A Preferred Conversion Price in
effect immediately before the combination shall be proportionately
increased.  Any adjustment under this Section 4(e) shall become
effective at the close of business on the date the subdivision or combination
becomes effective.

     

    f.           
Adjustment for Common
Stock Dividends and Distributions.  If the Company at any time
or from time to time after the Original Issue Date makes, or fixes a record date
for the determination of holders of Common Stock entitled to receive, a dividend
or other distribution payable in additional shares of Common Stock, in each such
event the Series A Preferred Conversion Price that is then in effect shall be
decreased as of the time of such issuance or, in the event such record date is
fixed, as of the close of business on such record date, by multiplying the
Series A Preferred Conversion Price then in effect by a fraction (i) the
numerator of which is the total number of shares of Common Stock issued and
outstanding immediately prior to the time of such issuance or the close of
business on such record date, and (ii) the denominator of which is the total
number of shares of Common Stock issued and outstanding immediately prior to the
time of such issuance or the close of business on such record date plus the
number of shares of Common Stock issuable in payment of such dividend or
distribution; provided,
however, that if such record date is fixed and such dividend is not fully
paid or if such distribution is not fully made on the date fixed therefor, the
Series A Preferred Conversion Price shall be recomputed accordingly as of the
close of business on such record date and thereafter the Series A Preferred
Conversion Price shall be adjusted pursuant to this Section 4(f) to reflect the
actual payment of such dividend or distribution.

     

    g.           
Adjustments for Other
Dividends and Distributions.  If the Company at any time or
from time to time after the Original Issue Date makes, or fixes a record date
for the determination of holders of Common Stock entitled to receive, a dividend
or other distribution payable in securities of the Company other than shares of
Common Stock, in each such event provision shall be made so that the holders of
the Series A Preferred shall receive upon conversion thereof, in addition to the
number of shares of Common Stock receivable thereupon, the amount of other
securities of the Company which they would have received had their Series
A  Preferred been converted into Common Stock on the date of such
event and had they thereafter, during the period from the date of such event to
and including the conversion date, retained such securities receivable by them
as aforesaid during such period, subject to all other adjustments called for
during such period under this Section 4 with respect to the rights of the
holders of the Series A Preferred or with respect to such other securities by
their terms.

     

    
      
        
          [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

        

         

      

      
        6

        
          

        

      

      
         

      

    

     

    h.          
Adjustment for
Reclassification, Exchange and Substitution.  If at any time or
from time to time after the Original Issue Date, the Common Stock issuable upon
the conversion of the Series A Preferred is changed into the same or a different
number of shares of any class or classes of stock, whether by recapitalization,
reclassification or otherwise (other than an Acquisition or Asset Transfer as
defined in Section 3 above or a subdivision or combination of shares or
stock dividend or a reorganization, merger, consolidation or sale of assets
provided for elsewhere in this Section 4), in any such event each holder of
Series A Preferred shall then have the right to convert such stock into the kind
and amount of stock and other securities and property receivable upon such
recapitalization, reclassification or other change by holders of the maximum
number of shares of Common Stock into which such shares of Series A Preferred
could have been converted immediately prior to such recapitalization,
reclassification or change, all subject to further adjustment as provided herein
or with respect to such other securities or property by the terms
thereof.

     

    i.            
Reorganizations, Mergers
or Consolidations.  If the Company at any time or from time to
time after the Original Issue Date makes, or fixes a record date for the
determination of holders of Common Stock entitled to receive, a dividend or
other distribution payable in securities of the Company other than shares of
Common Stock, in each such event provision shall be made so that the holders of
the Series A Preferred shall receive upon conversion thereof, in addition to the
number of shares of Common Stock receivable thereupon, the amount of other
securities of the Company which they would have received had their Series A
Preferred been converted into Common Stock on the date of such event and had
they thereafter, during the period from the date of such event to and including
the conversion date, retained such securities receivable by them as aforesaid
during such period, subject to all other adjustments called for during such
period under this Section 4 with respect to the rights of the holders of the
Series A Preferred or with respect to such other securities by their
terms.

     

    j.           
Certificate of
Adjustment.  In each case of an adjustment or readjustment of
the Series A Preferred Conversion Price for the number of shares of Common Stock
or other securities issuable upon conversion of the Series A Preferred, if the
Series A Preferred is then convertible pursuant to this Section 4, the
Company, at its expense, shall compute such adjustment or readjustment in
accordance with the provisions hereof and prepare a certificate showing such
adjustment or readjustment, and shall mail such certificate, by first class
mail, postage prepaid, to each registered holder of Series A Preferred at the
holder’s address as shown in the Company’s books.  The certificate
shall set forth such adjustment or readjustment, showing in detail the facts
upon which such adjustment or readjustment is based, including a statement of
(i) the Series A Preferred Conversion Price at the time in effect and (ii) the
number of shares of Common Stock and the type and amount, if any, of other
property which at the time would be received upon conversion of the Series A
Preferred.

     

    k.           Notices of Record
Date.  Upon (i) any taking by the Company of a record of the
holders of any class of securities for the purpose of determining the holders
thereof who are entitled to receive any dividend or other distribution, or (ii)
any Acquisition (as defined in Section 3) or other capital reorganization
of the Company, any reclassification or recapitalization of the capital stock of
the Company, or any Asset Transfer (as defined in Section 3), or any
voluntary or involuntary dissolution, liquidation or winding up of the Company,
the Company shall mail to each holder of Series A Preferred at least twenty (20)
days prior to the record date specified therein (or such shorter period approved
by the holders of a majority of the outstanding Series A Preferred) a notice
specifying (A) the date on which any such record is to be taken for the purpose
of such dividend or distribution and a description of such dividend or
distribution, (B) the date on which any such Acquisition, reorganization,
reclassification, Asset Transfer, dissolution, liquidation or winding up is
expected to become effective, and (C) the date, if any, that is to be fixed as
to when the holders of record of Series A Preferred (or other securities) shall
be entitled to exchange their shares of Series A Preferred (or other securities)
for securities or other property deliverable upon such Acquisition,
reorganization, reclassification, Asset Transfer, dissolution, liquidation or
winding up.

    
      
        
          [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

        

         

      

      
        7

        
          

        

      

      
         

      

    

     

    l.            Automatic
Conversion.

     

    (i)           Each
share of Series A Preferred shall automatically be converted into shares of
Common Stock, based on the then-effective Series A Preferred Conversion Price,
upon the earlier of: (A) the affirmative election of the Requisite Holders, or
(B) the date, at any time following the closing of an Alternative Common Stock
Financing, on which the per share fair market value (or the per share Closing
Bid Price (as defined in the Purchase Agreement) if the Common Stock is quoted
on the NASDAQ Global Market, NYSE or other national stock exchange quotation
system) of the Common Stock has been equal to at least $0.66 on each trading day
over a period of thirty (30) consecutive trading days and with an average daily
trading volume during such thirty (30) consecutive trading days equal to or
greater than two hundred thousand (200,000) shares, in either case, subject to
adjustment for any stock dividends, combinations, splits, recapitalizations and
the like, as reported by such exchange, or (C) the Common Equity Closing Date
(as defined in the Purchase Agreement).  Upon such automatic
conversion, any declared and unpaid dividends shall be paid in accordance with
the provisions of Section 4(d).

     

    (ii)         
Upon the occurrence of either of the events specified in Section 4(l)(i)
above, the outstanding shares of Series A Preferred shall be converted
automatically without any further action by the holders of such shares and
whether or not the certificates representing such shares are surrendered to the
Company or its transfer agent; provided, however, that the
Company shall not be obligated to issue certificates evidencing the shares of
Common Stock issuable upon such conversion unless the certificates evidencing
such shares of Series A Preferred are either delivered to the Company or its
transfer agent as provided below, or the holder notifies the Company or its
transfer agent that such certificates have been lost, stolen or destroyed and
executes an agreement reasonably satisfactory to the Company to indemnify the
Company from any loss incurred by it in connection with such certificates. Upon
the occurrence of such automatic conversion of the Series A Preferred, the
holders of Series A Preferred shall surrender the certificates representing such
shares at the office of the Company or any transfer agent for the Series A
Preferred.  Thereupon, there shall be issued and delivered to such
holder promptly (which shall be no later than three (3) business days) at such
office and in its name as shown on such surrendered certificate or certificates,
a certificate or certificates for the number of shares of Common Stock into
which the shares of Series A Preferred surrendered were convertible on the date
on which such automatic conversion occurred, and any declared and unpaid
dividends shall be paid in accordance with the provisions of
Section 4(d).

     

    m.          Special
Mandatory Conversion.

     

    (i)          
If a holder of Series A Preferred fails to purchase all or a portion of
its Pro Rata Amount (as defined below) of the shares of Common Stock required to
be purchased by such holder at the Common Equity Closing pursuant to the
Purchase Agreement (the “Common Equity
Closing”), then the Applicable Portion (as defined below) of the shares
of Series A Preferred Stock held by such holder shall be automatically, without
any further action on the part of the Company or such holder, converted into
shares of Common Stock at an adjusted Series A Preferred Conversion Rate equal
to one (1), subject to any adjustments that may have been made under Sections
4(e) through 4(i) hereof between the issuance of the Series A Preferred and the
Common Equity Closing. Such conversion is referred to as a “Special Mandatory
Conversion.”

     

    
      
        
          [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

        

         

      

      
        8

        
          

        

      

      
         

      

    

     

    (ii)        
Upon a Special Mandatory Conversion, each holder of shares of Series A
Preferred converted pursuant to Section 4(m)(i) shall be sent written notice of
such Special Mandatory Conversion.  Such shares of Series A Preferred
shall be converted automatically without any further action by the holders of
such shares and whether or not the certificates representing such shares are
surrendered to the Company or its transfer agent; provided, however, that the
Company shall not be obligated to issue certificates evidencing the shares of
Common Stock issuable upon such conversion unless the certificates evidencing
such shares of Series A Preferred are either delivered to the Company or its
transfer agent as provided below, or the holder notifies the Company or its
transfer agent that such certificates have been lost, stolen or destroyed and
executes an agreement reasonably satisfactory to the Company to indemnify the
Company from any loss incurred by it in connection with such
certificates.  Upon the occurrence of such automatic conversion of the
Series A Preferred, the holders of Series A Preferred shall surrender the
certificates representing such shares at the office of the Company or any
transfer agent for the Series A Preferred.  Thereupon, there shall be
issued and delivered to such holder promptly (which shall be no later than three
(3) business days) at such office and in its name as shown on such surrendered
certificate or certificates, a certificate or certificates for the number of
shares of Common Stock into which the shares of Series A Preferred surrendered
were convertible pursuant to Section 4(m)(i) above.

     

    (iii)        Definitions.

     

    (a)           “Pro Rata Amount” shall mean,
with respect to any holder of Series A Preferred Stock, the maximum number of
shares of Common Stock that such holder is required to purchase at the Common
Equity Closing as set forth in the Purchase Agreement.

     

    (b)           “Applicable Portion” shall
mean, with respect to any holder of shares of Series A Preferred Stock, a number
of shares of Series A Preferred Stock calculated by multiplying the aggregate
number of shares of Series A Preferred Stock held by such holder immediately
prior to the Common Equity Closing by a fraction, the numerator of which is
equal to the amount, if positive, by which such holder’s Pro Rata Amount exceeds
the number of shares of Common Stock actually purchased by such holder in such
Common Equity Closing, and the denominator of which is equal to such holder’s
Pro Rata Amount.

     

    n.          
Fractional
Shares.  No fractional shares of Common Stock shall be issued
upon conversion of Series A Preferred. All shares of Common Stock (including
fractions thereof) issuable upon conversion of more than one share of Series A
Preferred by a holder thereof shall be aggregated for purposes of determining
whether the conversion would result in the issuance of any fractional
share.  If, after the aforementioned aggregation, the conversion would
result in the issuance of any fractional share, the Company shall, in lieu of
issuing any fractional share, pay cash equal to the product of such fraction
multiplied by the Common Stock’s Fair Market Value (calculated as of the date of
conversion).

     

    o.           
Reservation of Stock
Issuable Upon Conversion.  The Company shall at all times
reserve and keep available out of its authorized but unissued shares of Common
Stock, solely for the purpose of effecting the conversion of the shares of the
Series A Preferred, such number of its shares of Common Stock as shall from time
to time be sufficient to effect the conversion of all outstanding shares of the
Series A Preferred.  If at any time the number of authorized but
unissued shares of Common Stock shall not be sufficient to effect the conversion
of all then outstanding shares of the Series A Preferred, the Company will take
such corporate action as may, in the opinion of its counsel, be necessary to
increase its authorized but unissued shares of Common Stock to such number of
shares as shall be sufficient for such purpose.

    
      
        
          [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

        

         

      

      
        9

        
          

        

      

      
         

      

    

     

    p.           
Notices.  Any notice
required by the provisions of this Section 4 shall be in writing and shall
be deemed effectively given: (i) upon personal delivery to the party to be
notified, (ii) when sent by confirmed electronic mail or facsimile if sent
during normal business hours of the recipient; if not, then on the next business
day, (iii) five (5) days after having been sent by registered or certified mail,
return receipt requested, postage prepaid, or in the event the party being
notified is outside the United States, ten (10) days after having been sent by
registered or certified mail, return receipt requested, postage prepaid, or (iv)
one (1) day after deposit with a nationally recognized overnight courier,
specifying next day delivery, with verification of receipt, or in the event the
party being notified is outside the United States, five (5) business days after
deposit with an internationally recognized overnight courier, specifying next
day delivery, with verification of receipt.  All notices shall be
addressed to each holder of record at the address of such holder appearing on
the books of the Company.

     

    q.           
Payment of
Taxes.  The Company will pay all taxes (other than taxes based
upon income) and other governmental charges that may be imposed with respect to
the issue or delivery of shares of Common Stock upon conversion of shares of
Series A Preferred, excluding any tax or other charge imposed in connection with
any transfer involved in the issue and delivery of shares of Common Stock in a
name other than that in which the shares of Series A Preferred so converted were
registered.

     

    5.          
 Redemption.  The
Series A Preferred shall not be redeemable by the Company.

     

    6.           
No
Reissuance of Series A Preferred.  No share or shares of Series
A Preferred acquired by the Company shall be reissued.

     

    FIVE:            The
foregoing Certificate of Designation has been duly approved by the Board of
Directors.

     

    * * * *
*

     

    
      
        
          [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

        

         

      

      
        10

        
          

        

      

      
         

      

    

    In Witness
Whereof, Sunesis Pharmaceuticals,
Inc. has caused this Certificate of Designation to be signed by its President
and Chief Executive Officer this ___ day of April, 2009.

     

    
      
        
          	 
      	
                  Sunesis
      Pharmaceuticals, Inc.

                
	 
      	 
      	 
      
	 
      	
                  By: 

                	 
      
	 
      	 
      	
                  Daniel
      N. Swisher, Jr.

                
	 
      	 
      	
                  President
      and Chief Executive
Officer

                

        

      

    

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    EXHIBIT B

     

    NEITHER
THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON EXERCISE OR CONVERSION OF
THESE SECURITIES HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR APPLICABLE STATE SECURITIES LAWS.  THE SECURITIES MAY NOT
BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED EXCEPT AS PROVIDED BY ARTICLE
IV OF THAT CERTAIN SECURITIES PURCHASE AGREEMENT, DATED AS OF MARCH [__], 2009,
BY AND AMONG SUNESIS PHARMACEUTICALS, INC. AND THE PURCHASERS IDENTIFIED ON THE
SIGNATURE PAGES THERETO.

    

    
      
        	
                WARRANT
      NO. CSW-___

              	
                NUMBER
      OF SHARES:  ____________

              
	
                DATE
      OF ISSUANCE:  [___________], 2009

              	
                (subject
      to adjustment)

              
	
                VOID
      AFTER [___________], 200__

              	 
      

      

    

    

    WARRANT
TO PURCHASE SHARES OF COMMON STOCK

     

    Sunesis
Pharmaceuticals, Inc.

     

    This
Certifies That, for value received, [____], or its
permitted registered assigns (the “Holder”),
is entitled to subscribe for and purchase at the Exercise Price (defined below)
from Sunesis Pharmaceuticals, Inc., a Delaware corporation (the “Company”),
up to [____] shares of the common stock of the Company, par value $0.0001 per
share (the “Common
Stock”).  This warrant is one of a series of warrants issued by
the Company as of the date hereof (individually, a “Warrant,” and collectively, the
“Warrants”)
pursuant to that certain Securities Purchase Agreement between the Company and
each of the Purchasers that is a party thereto, dated as of March 31, 2009 (the
“Purchase
Agreement”).

     

    1.           Definitions.  Capitalized
terms used herein but not otherwise defined herein shall have their respective
meanings as set forth in the Purchase Agreement.  As used herein, the
following terms shall have the following respective meanings:

     

    (A)           “Eligible
Market” means any of The NASDAQ Global Market, The NASDAQ Global Select
Market or The NASDAQ Capital Market.

     

    (B)           “Exercise
Period” shall mean the period ending seven (7) years from the date
hereof, unless sooner terminated as provided below.

     

    (C)           “Exercise
Price” shall mean $0.22 per share, subject to adjustment pursuant to
Section 4
below.

    
      
        
          [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

        

         

      

      
        1

        
          

        

      

      
         

      

    

     

    (D)           “Exercise
Shares” shall mean the shares of Common Stock issuable upon exercise of
this Warrant.

     

    (E)           “Fundamental
Transaction” means (i) any consolidation or merger of the Company with or
into any other corporation or other entity or person, or any other corporate
reorganization, in which the stockholders of the Company immediately prior to
such consolidation, merger or reorganization own less than 50% of the voting
power of the surviving entity immediately after such consolidation, merger or
reorganization, or the Common Stock is converted into or exchanged for
securities, cash or other property (ii) any transaction or series of related
transactions to which the Company is a party in which in excess of 50% of the
Company’s voting power is transferred other than the sale of equity securities
issued pursuant to the Purchase Agreement or (iii) any sale, exclusive license
or exclusive partnering (in either case, on a worldwide or regional basis) of a
majority or more of the assets of the Company.

     

    (F)           “Parent
Entity” of a Person means an entity that, directly or indirectly,
controls the applicable Person and whose common stock or equivalent equity
security is quoted or listed on an Eligible Market, or, if there is more than
one such Person or Parent Entity, the Person or Parent Entity with the largest
public market capitalization as of the date of consummation of the Fundamental
Transaction.

     

    (G)           “Person”
means an individual, a limited liability company, a partnership, a joint
venture, a corporation, a trust, an unincorporated organization, any other
entity and a government or any department or agency thereof.

     

    (H)           “Successor
Entity” means the Person (or, if so elected by the Holder, the Parent
Entity) formed by, resulting from or surviving any Fundamental Transaction or
the Person (or, if so elected by the Holder, the Parent Entity) with which such
Fundamental Transaction shall have been entered into.

     

    (I)           “Trading
Day” shall mean (a) any day on which the Common Stock is listed or quoted
and traded on its primary Trading Market, (b) if the Common Stock is not then
listed or quoted and traded on any Eligible Market, then a day on which trading
occurs on the OTC Bulletin Board (or any successor thereto), or (c) if trading
does not occur on the OTC Bulletin Board (or any successor thereto), any
Business Day.

     

    (J)           “Trading
Market” shall mean the OTC Bulletin Board or any Eligible Market or any
other national securities exchange, market or trading or quotation facility on
which the Common Stock is then listed or quoted.

     

    2.           Exercise of
Warrant.

     

    2.1          Exercise.  The
rights represented by this Warrant may be exercised in whole or in part at any
time during the Exercise Period, by delivery of the following to the Company at
its address set forth on the signature page hereto (or at such other address as
it may designate by notice in writing to the Holder):

     

    (A)          An
executed Notice of Exercise in the form attached hereto;

     

    (B)          Payment
of the Exercise Price either (i) in cash or by check or (ii) pursuant to Section 2.2 below;
and

    
      
        
          [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

        

         

      

      
        2

        
          

        

      

      
         

      

    

     

    (C)          This
Warrant.

     

    Execution
and delivery of the Notice of Exercise shall have the same effect as
cancellation of the original Warrant and issuance of a new Warrant evidencing
the right to purchase the remaining number of Exercise Shares, if
any.

     

    Certificates
for shares purchased hereunder shall be transmitted by the transfer agent of the
Company to the Holder by crediting the account of the Holder’s prime broker with
the Depository Trust Company through its Deposit Withdrawal Agent Commission
system if the Company is a participant in such system, and otherwise by physical
delivery to the address specified by the Holder in the Notice of Exercise within
three business days from the delivery to the Company of the Notice of Exercise,
surrender of this Warrant and payment of the aggregate Exercise Price as set
forth above.  This Warrant shall be deemed to have been exercised on
the date the Exercise Price is received by the Company.

     

    The
person in whose name any certificate or certificates for Exercise Shares are to
be issued upon exercise of this Warrant shall be deemed to have become the
holder of record of such shares on the date on which this Warrant was
surrendered and payment of the Exercise Price was made, irrespective of the date
of delivery of such certificate or certificates, except that, if the date of
such surrender and payment is a date when the stock transfer books of the
Company are closed, such person shall be deemed to have become the holder of
such shares at the close of business on the next succeeding date on which the
stock transfer books are open.

     

    Subject
to the final sentence of this paragraph, Section 2.3 below and to the
extent permitted by law, the Company’s obligations to issue and deliver Exercise
Shares in accordance with the terms hereof are absolute and unconditional,
irrespective of any action or inaction by the Holder to enforce the same, any
waiver or consent with respect to any provision hereof, the recovery of any
judgment against any person or entity or any action to enforce the same, or any
setoff, counterclaim, recoupment, limitation or termination, or any breach or
alleged breach by the Holder or any other person or entity of any obligation to
the Company or any violation or alleged violation of law by the Holder or any
other person or entity, and irrespective of any other circumstance which might
otherwise limit such obligation of the Company to the Holder in connection with
the issuance of Exercise Shares.  The Holder shall, subject to the
following proviso, have the right to pursue any remedies available to it
hereunder, at law or in equity including, without limitation, a decree of
specific performance and/or injunctive relief with respect to the Company’s
failure to timely deliver Exercise Shares upon exercise of this Warrant as
required pursuant to the terms hereof; provided, however, that notwithstanding
anything to the contrary in this Warrant or in the Purchase Agreement, if the
Company is unable to deliver Exercise Shares upon exercise of this Warrant as
required pursuant to the terms hereof because the exercise of this Warrant is
prior to the Stockholder Approval Date (as defined in Section 2.3 below) and
such exercise would result in a violation of the Warrant Exercise Cap, the
Company shall have no obligation to pay to the Holder any cash or other
consideration or otherwise “net cash settle” this Warrant.

     

    Except
for cash in lieu of fractional shares as provided in Section 5, this Warrant may
not be settled by the Company for cash to the Holder in lieu of Common
Stock.

     

    2.2          Net Exercise.  If
during the Exercise Period the fair market value of one share of the Common
Stock is greater than the Exercise Price (at the date of calculation as set
forth below), in lieu of exercising this Warrant by payment of cash or by check,
the Holder may, at its election, effect a “net exercise” of this Warrant, in
which event, if so effected, the Holder shall receive Exercise Shares equal to
the value (as determined below) of this Warrant (or the portion thereof being
canceled) by surrender of this Warrant at the principal office of the Company,
together with the properly endorsed Notice of Exercise, in which event the
Company shall issue to the Holder a number of shares of Common Stock computed
using the following formula:

    
      
        
          [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

        

         

      

      
        3

        
          

        

      

      
         

      

    

     

    
      
        
          
            	
                    X = 

                  	
                    Y (A-B)

                  
	 
      	
                    A

                  

          

        

      

    

    

    
      	
              Where X =

            	
                
      the number of Exercise Shares to be issued to the
  Holder

            

    

     

    
      	
               
      

            	
              Y
      =

            	
              the
      number of Exercise Shares with respect to which this Warrant is being
      exercised

            

    

     

    
      	
               
      

            	
              A
      =

            	
              the
      Fair Market Value (as defined below) of one share of the Company’s Common
      Stock (at the date of such
calculation)

            

    

     

    
      	
               
      

            	
              B
      =

            	
              Exercise
      Price (as adjusted to the date of such
  calculation)

            

    

     

    For
purposes of this Warrant, the “Fair Market
Value” of one share of Common Stock shall mean (i) the average of the
closing sales prices for the shares of Common Stock on The NASDAQ Global Market
or other Eligible Market where the Common Stock is listed or traded as reported
by Bloomberg Financial Markets (or a comparable reporting service of national
reputation selected by the Company and reasonably acceptable to the Holder if
Bloomberg Financial Markets is not then reporting sales prices of such security)
(collectively, “Bloomberg”)
for the ten (10) consecutive trading days immediately prior to the Exercise
Date, or (ii) if an Eligible Market is not the principal Trading Market for the
shares of Common Stock, the average of the reported sales prices reported by
Bloomberg on the principal Trading Market for the Common Stock during the same
period, or, if there is no sales price for such period, the last sales price
reported by Bloomberg for such period, or (iii) if neither of the foregoing
applies, the last sales price of such security in the over-the-counter market on
the pink sheets or bulletin board for such security as reported by Bloomberg, or
if no sales price is so reported for such security, the last bid price of such
security as reported by Bloomberg or (iv) if fair market value cannot be
calculated as of such date on any of the foregoing bases, the fair market value
shall be as determined by the Board of Directors of the Company in the exercise
of its good faith judgment.

     

    2.3          Limitations On Exercises Subject to
Stockholder Approval.  In the event that any exercise pursuant
to this Section 2 prior
to the date of the Stockholder Approval (as defined below) would result in a
Holder becoming the
beneficial owner, directly or indirectly, of more than 19.99% of the aggregate
ordinary voting power represented by issued and outstanding Capital Stock
(the “Warrant Exercise
Cap”), notwithstanding anything to the contrary in this Warrant or in the
Purchase Agreement, the Company shall have no obligation to issue and deliver
Exercise Shares in accordance with the terms hereof unless and until the
approval of the requisite holders of the issued and outstanding voting capital
stock of the Company shall have been attained as contemplated by the Purchase
Agreement (the Stockholder
Approval”).

     

    2.4          Issuance Of New
Warrants.  Upon any partial exercise of this Warrant, the
Company, at its expense, will forthwith and, in any event within five (5)
business days, issue and deliver to the Holder a new warrant or warrants of like
tenor, registered in the name of the Holder, exercisable, in the aggregate, for
the balance of the number of shares of Common Stock remaining available for
purchase under this Warrant.

    
      
        
          [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

        

         

      

      
        4

        
          

        

      

      
         

      

    

    2.5          Payment Of Taxes And
Expenses.  The Company shall pay any recording, filing, stamp
or similar tax which may be payable in respect of any transfer involved in the
issuance of, and the preparation and delivery of certificates (if applicable)
representing, (i) any Exercise Shares purchased upon exercise of this Warrant
and/or (ii) new or replacement warrants in the Holder’s name or the name of any
transferee of all or any portion of this Warrant; provided, however, that the
Company shall not be required to pay any tax which may be payable in respect of
any transfer involved in the issuance, delivery or registration of any
certificates for Exercise Shares or Warrants in a name other than that of the
Holder.  The Holder shall be responsible for all other tax liability
that may arise as a result of holding or transferring this Warrant or receiving
Exercise Shares upon exercise hereof.

     

    3.           Covenants
of the Company.

     

    3.1          Covenants as to Exercise
Shares.  The Company covenants and agrees that all Exercise
Shares that may be issued upon the exercise of the rights represented by this
Warrant will, upon issuance, be validly issued and outstanding, fully paid and
nonassessable, and free from all taxes, liens and charges with respect to the
issuance thereof.  The Company further covenants and agrees that the
Company will at all times during the Exercise Period, have authorized and
reserved, free from preemptive rights, a sufficient number of shares of Common
Stock to provide for the exercise of the rights represented by this
Warrant.  If at any time during the Exercise Period the number of
authorized but unissued shares of Common Stock shall not be sufficient to permit
exercise of this Warrant, the Company will use its commercially reasonable
efforts to take such corporate action in compliance with applicable law as may,
in the opinion of its counsel, be necessary to increase its authorized but
unissued shares of Common Stock to such number of shares as shall be sufficient
for such purposes.

     

    3.2          Notices of Record Date and Certain
Other Events.  In the event of any taking by the Company of a
record of the holders of any class of securities for the purpose of determining
the holders thereof who are entitled to receive any dividend or other
distribution, the Company shall mail to the Holder, at least twenty (20) days
prior to the date on which any such record is to be taken for the purpose of
such dividend or distribution, a notice specifying such date.  In the
event of any voluntary dissolution, liquidation or winding up of the Company,
the Company shall mail to the Holder, at least twenty (20) days prior to the
date of the occurrence of any such event, a notice specifying such
date.  In the event the Company authorizes or approves, enters into
any agreement contemplating, or solicits stockholder approval for any
Fundamental Transaction, the Company shall mail to the Holder, at least twenty
(20) days prior to the date of the closing of such event, a notice specifying
such date.  Notwithstanding the foregoing, the failure to deliver such
notice or any defect therein shall not affect the validity of the corporate
action required to be described in such notice.

     

    4.           Adjustment
of Exercise Price and Shares.

     

    The
Exercise Price and number of Exercise Shares issuable upon exercise of this
Warrant are subject to adjustment from time to time as set forth in this Section 4.

     

    (A)          If
the Company, at any time while this Warrant is outstanding, (i) pays a stock
dividend on its Common Stock or otherwise makes a distribution on any class of
capital stock that is payable in shares of Common Stock, (ii) subdivides
outstanding shares of Common Stock into a larger number of shares, or (iii)
combines outstanding shares of Common Stock into a smaller number of shares,
then in each such case the Exercise Price shall be multiplied by a fraction of
which the numerator shall be the number of shares of Common Stock outstanding
immediately before such event and of which the denominator shall be the number
of shares of Common Stock outstanding immediately after such
event.  Any adjustment made pursuant to clause (i) of this paragraph
shall become effective immediately after the record date for the determination
of stockholders entitled to receive such dividend or distribution, and any
adjustment pursuant to clause (ii) or (iii) of this paragraph shall become
effective immediately after the effective date of such subdivision or
combination.

    
      
        
          [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

        

         

      

      
        5

        
          

        

      

      
         

      

    

     

    (B)          If
the Company, at any time while this Warrant is outstanding, distributes to
holders of Common Stock (i) evidences of its indebtedness, (ii) any security
(other than a distribution of Common Stock covered by the preceding paragraph),
(iii) rights or warrants to subscribe for or purchase any security, or (iv) any
other asset (in each case, “Distributed
Property”), then in each such case the Holder shall be entitled upon
exercise of this Warrant for the purchase of any or all of the Exercise Shares,
to receive the amount of Distributed Property which would have been payable to
the Holder had such Holder been the holder of such Exercise Shares on the record
date for the determination of stockholders entitled to such Distributed
Property.  The Company will at all times set aside in escrow and keep
available for distribution to such holder upon exercise of this Warrant a
portion of the Distributed Property to satisfy the distribution to which such
Holder is entitled pursuant to the preceding sentence.

     

    (C)          Upon
the occurrence of each adjustment pursuant to this Section 4, the Company at its
expense will, at the written request of the Holder, promptly compute such
adjustment in accordance with the terms of this Warrant and prepare a
certificate setting forth such adjustment, including a statement of the adjusted
Exercise Price and adjusted number or type of Exercise Shares or other
securities issuable upon exercise of this Warrant (as applicable), describing
the transactions giving rise to such adjustments and showing in detail the facts
upon which such adjustment is based.  Upon written request, the
Company will promptly deliver a copy of each such certificate to the Holder and
to the Company’s transfer agent.

     

    5.           Fractional
Shares.  No fractional shares shall be issued upon the exercise
of this Warrant as a consequence of any adjustment pursuant
hereto.  All Exercise Shares (including fractions) issuable upon
exercise of this Warrant may be aggregated for purposes of determining whether
the exercise would result in the issuance of any fractional
share.  If, after aggregation, the exercise would result in the
issuance of a fractional share (a) the Company shall, in lieu of issuance of any
fractional share, pay the Holder otherwise entitled to such fraction a sum in
cash equal to the product resulting from multiplying the then-current fair
market value of an Exercise Share by such fraction and (b) the number of
Exercise Shares to be issued will be rounded down to the nearest whole
share.

     

    6.           Fundamental
Transactions.  The Company shall not enter into or be party to
a Fundamental Transaction unless the Successor Entity assumes this Warrant in
accordance with the provisions of this Section 6.  Upon the
occurrence of any Fundamental Transaction, the Successor Entity shall succeed
to, and be substituted for (so that from and after the date of such Fundamental
Transaction, the provisions of this Warrant referring to the “Company” shall
refer instead to the Successor Entity), and may exercise every right and power
of the Company and shall assume all of the obligations of the Company under this
Warrant with the same effect as if such Successor Entity had been named as the
Company herein. Prior to the consummation of any Fundamental Transaction
pursuant to which holders of shares of Common Stock are entitled to receive
securities or other assets with respect to or in exchange for shares of Common
Stock (a “Corporate
Event”), the Company shall make appropriate provision to ensure that the
Holder will thereafter have the right to receive upon an exercise of this
Warrant at any time after the consummation of the Fundamental Transaction but
prior to the Expiration Date, in lieu of the Exercise Shares (or other
securities, cash, assets or other property) purchasable upon the exercise of the
Warrant prior to such Fundamental Transaction, such shares of stock, securities,
cash, assets or any other property whatsoever (including warrants or other
purchase or subscription rights) which the Holder would have been entitled to
receive upon the happening of such Fundamental Transaction had the Warrant been
exercised immediately prior to such Fundamental Transaction, provided, however
that in the event of a Corporate Event in which (x) the Common Stock is
converted into or exchanged for anything other than solely equity securities,
and (y) the common stock of the Successor Entity is publicly traded, then,
as part of such Corporate Event, (i) the Holder will thereafter have the
right to receive upon an exercise of this Warrant such number of shares of
common stock of the Successor Entity as is determined by multiplying
(A) the number of shares of Common Stock subject to this Warrant
immediately prior to such Corporate Event by (B) a fraction, the numerator
of which is the Fair Market Value per share of Common Stock as of immediately
prior to the effectiveness of such Corporate Event, and the denominator of which
is the fair market value per share of common stock of the Successor Entity, as
determined in good faith by the Board of Directors of the Company (using the
same principles set forth in the definition of Fair Market Value to the extent
applicable), and (ii) the exercise price per share of common stock of the
acquiring or surviving company shall be the Exercise Price divided by the
fraction referred to in clause (B) above, and in any such case, appropriate
adjustment (as determined in good faith by the Board of Directors of the
Company) shall be made in the application of the provisions set forth herein
with respect to the rights and interests thereafter of the Holder, to the end
that the provisions set forth in this Section 6 shall thereafter be applicable,
as nearly as reasonably may be, in relation to any securities, cash or other
property thereafter deliverable upon the exercise of this Warrant. Provision
made pursuant to the preceding sentence shall be in a form and substance
reasonably satisfactory to the Holder.  The provisions of this Section 6 shall apply
similarly and equally to successive Fundamental Transactions and Corporate
Events and shall be applied without regard to any limitations on the exercise of
this Warrant.

     

    
      
        
          [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

        

         

      

      
        6

        
          

        

      

      
         

      

    

     

    7.           
No
Stockholder Rights.  Other than as provided
in Section 3.2 or
otherwise herein, this Warrant in and of itself shall not entitle the Holder to
any voting rights or other rights as a stockholder of the Company.

     

    8.           
Transfer of
Warrant.  Subject to applicable laws and any restrictions on
transfer set forth in the Purchase Agreement,
this Warrant and all rights hereunder are transferable, by the Holder in person
or by duly authorized attorney, upon delivery of this Warrant and the form of
assignment attached hereto to any transferee designated by
Holder.  The transferee shall sign an investment letter in form and
substance reasonably satisfactory to the Company and its counsel.  Any
purported transfer of all or any portion of this Warrant in violation of the
provisions of this Warrant shall be null and void.

     

    9.          
 Lost,
Stolen, Mutilated or Destroyed Warrant.  If this Warrant is
lost, stolen, mutilated or destroyed, the Company may, on such terms as to
indemnity or otherwise as it may reasonably impose (which shall, in the case of
a mutilated Warrant, include the surrender thereof), issue a new Warrant of like
denomination and tenor as this Warrant so lost, stolen, mutilated or
destroyed.  Any such new Warrant shall constitute an original
contractual obligation of the Company, whether or not the allegedly lost,
stolen, mutilated or destroyed Warrant shall be at any time enforceable by
anyone.

     

    10.          Notices,
Etc.  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 facsimile to the facsimile
number specified in writing by the recipient if sent during normal business
hours of the recipient on a Trading Day, if not, then on the next Trading Day,
(c) the next Trading Day after deposit with a nationally recognized overnight
courier, specifying next day delivery, with written verification of
receipt.  All communications shall be sent to the Company at the
address listed on the signature page hereto and to Holder at the applicable
address set forth on the applicable signature page to the Purchase Agreement or
at such other address as the Company or Holder may designate by ten (10) days
advance written notice to the other parties hereto.

     

    11.          Acceptance.  Receipt
of this Warrant by the Holder shall constitute acceptance of and agreement to
all of the terms and conditions contained herein.

     

    12.          Governing
Law.  This Warrant and all rights, obligations and liabilities
hereunder shall be governed by, and construed in accordance with, the internal
laws of the State of California, without giving effect to the principles of
conflicts of law that would require the application of the laws of any other
jurisdiction.

    
      
        
          [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

        

         

      

      
        7

        
          

        

      

      
         

      

    

     

    13.          Amendment
or Waiver.  Any term of this Warrant may be amended or waived
(either generally or in a particular instance and either retroactively or
prospectively) with the written consent of the Company and the Purchaser or
Purchasers holding or having the right to acquire, at the time of such
amendment, at least a majority-in-interest of the total Unit Shares then held by
any Purchaser.  No waivers of any term, condition or provision of this
Warrant, in any one or more instances, shall be deemed to be, or construed as, a
further or continuing waiver of any such term, condition or
provision.  The Holder acknowledges that the Purchaser or Purchasers
holding or having the right to acquire, at the time of such amendment, at least
a majority-in-interest of the total Unit Shares then held by any Purchaser have
the power to bind all of the Holders.

     

    [REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]

    
      
        
          [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

        

         

      

      
        8

        
          

        

      

      
         

      

    

    In Witness
Whereof, the Company has caused this Warrant to be executed by its duly
authorized officer as of [___________], 2009.

     

    
      
        
          
            	 
      	
                    SUNESIS
      PHARMACEUTICALS, INC.

                  
	 
      	 
      	 
      
	 
      	
                    By: 

                  	 
      
	 
      	 
      	
                    Name:  Daniel
      N. Swisher, Jr.

                  
	 
      	 
      	
                    Title:  President
      and Chief Executive
Officer

                  

          

        

      

    

    

    
      
        	 
      	
                Address:  

              	
                395
      Oyster Point Boulevard

              
	 
      	 
      	
                Suite
      400

              
	 
      	 
      	
                South
      San Francisco, CA 94080

              

      

    

     

    
      
        
          [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

        

         

      

      
        9

        
          

        

      

      
         

      

    

    NOTICE
OF EXERCISE

     

    TO:          SUNESIS
PHARMACEUTICALS, INC.

     

    (1)                 The
undersigned hereby elects to purchase [____] shares of the common stock, par
value $0.0001 per share (the “Common
Stock”), of SUNESIS PHARMACEUTICALS, INC. (the “Company”)
pursuant to the terms of the attached Warrant, and tenders herewith payment of
the exercise price in full, together with all applicable transfer taxes, if
any.

     

    [_] The
undersigned hereby elects to purchase [____] shares of Common Stock of the
Company pursuant to the terms of the net exercise provisions set forth in Section 2.2 of the attached
Warrant, and shall tender payment of all applicable transfer taxes, if
any.

     

    (2)                 Please
issue the certificate for shares of Common Stock in the name of:

     

     

    
      
        

      

    

    Print or
type name

     

     

    
      

    

     Social
Security or other Identifying Number

     

     

    
      

    

     Street
Address

     

     

    
      
 City
State Zip Code

     

    (3)                 If
such number of shares shall not be all the shares purchasable upon the exercise
of the Warrants evidenced by this Warrant, a new warrant certificate for the
balance of such Warrants remaining unexercised shall be registered in the name
of and delivered to:

     

    Please
insert social security or other identifying number: _____________

     

    

    

      
        

      

    

    (Please
print name and address)

    

       

       

      
        

      

    Dated:

     

    
      
        
          
            	
                    (Date)

                  	 
      
	 
      	
                    (Signature)

                  
	 
      	 
      
	 
      	 
      
	 
      	
                    (Print
      name)

                  

          

        

      

    

     

    
      
        
          [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

        

         

      

      
         

        
          

        

      

      
         

      

    

     

    ASSIGNMENT
FORM

     

    (To
assign the foregoing Warrant, execute this form and supply required
information.  Do not use this form to purchase shares.)

     

    FOR VALUE
RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby
assigned to:

     

    
      
        
          
            	
                    Name:

                  	 
      
	 
      	
                    (Please
      Print)

                  
	 
      	 
      
	
                    Address:

                  	 
      
	 
      	
                    (Please
      Print)

                  

          

        

      

    

    

    Dated:           ,
20[__]

     

    Holder’s
Signature: __________________________

     

    Holder’s
Address: ___________________________

     

    NOTE: The
signature to this Assignment Form must correspond with the name as it appears on
the face of the Warrant, without alteration or enlargement or any change
whatever.  Officers of corporations and those acting in a fiduciary or
other representative capacity should file proper evidence of authority to assign
the foregoing Warrant.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
C

     

    INVESTOR
RIGHTS AGREEMENT

     

    This
Investor Rights Agreement (this “Agreement”)
is made and entered into as of April 3, 2009, by and among Sunesis
Pharmaceuticals, Inc., a Delaware corporation (the “Company”),
and the several investors signatory hereto (including any successor or assign of
any investor signatory hereto, each an “Investor”
and, collectively, the “Investors”).

     

    This
Agreement is made pursuant to the Securities Purchase Agreement, dated as of the
date hereof, by and  between the Company and each Investor (the “Purchase
Agreement”).

     

    NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement,
and for other good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the Company and each of the Investors agree as
follows:

     

    1. Definitions.  Capitalized
terms used and not otherwise defined herein that are defined in the Purchase
Agreement shall have the meanings given such terms in the Purchase
Agreement.  As used in this Agreement, the following terms shall have
the following meanings:

     

    “Advice”
shall have the meaning set forth in Section 4(b).

     

    “Common Stock
Equivalents” means any securities of the Company which would entitle the
holder thereof to acquire at any time Common Stock, including, without
limitation, any debt, preferred stock, rights, options, warrants or other
instrument that is at any time convertible into or exchangeable for, or
otherwise entitles the holder thereof to receive, Common Stock or other
securities that entitle the holder to receive, directly or indirectly, Common
Stock.

    
      
        
          [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

        

         

      

      
         

        
          

        

      

      
         

      

    

     

    “Company
Notice” shall have the meaning set forth in Section 7(a)(2).

     

    “Effective
Date” means the date that a Registration Statement filed pursuant to
Section 2(a) is first declared effective by the Commission.

     

    “Effectiveness
Deadline” means, with respect to each Initial Registration Statement or
New Registration Statement, the earlier of: (i) the ninetieth (90th)
calendar day following the applicable Filing Deadline; provided, that, if the
Commission reviews and has written comments to a filed Registration Statement,
then the Effectiveness Deadline under this clause (i) shall be the one hundred
twentieth (120th)
calendar day following the applicable Filing Deadline, and (ii) the fifth
(5th)
Business Day following the date on which the Company is notified by the
Commission that the applicable Registration Statement will not be reviewed or is
no longer subject to further review and comments and the effectiveness of such
Registration Statement may be accelerated; provided, however, that if
the Effectiveness Deadline falls on a Saturday, Sunday or other day that the
Commission is closed for business, the Effectiveness Deadline shall be extended
to the next Business Day on which the Commission is open for
business.

     

    “Effectiveness
Period” shall have the meaning set forth in Section 2(b).

     

    “Excluded
Securities” means any issuance of (a) securities pursuant to stock
splits, stock dividends or similar transactions, (b) Common Stock to employees,
consultants, officers or directors of the Company pursuant to any duly-adopted
equity incentive or equity compensation plan, to the extent approved by the
Board or a committee of non-employee directors established for such purpose, (c)
securities upon the exercise, exchange or conversion of any securities issued or
issuable under the Purchase Agreement and/or other securities exercisable or
exchangeable for or convertible into shares of Common Stock issued and
outstanding on the date of this Agreement, provided that such securities have
not been amended since the date of this Agreement to increase the number of such
securities or to decrease the exercise, exchange or conversion price of such
securities, or (d) securities issued or issuable in a transaction or series of
related transactions in which the Majority Investors have agreed in writing will
be excluded from the preemptive rights set forth in Section 7(a).

     

    “Filing
Deadline” means, with respect to the Initial Registration Statement
required to be filed pursuant to Section 2(a), (i) the forty-fifth (45th)
calendar day following (A) the consummation of the Common Equity Closing or (B)
the consummation of an Alternative Common Stock Financing, (ii) the sixtieth
(60th)
calendar day following the delivery of a Non-Participation Notice, or (iii) the
earlier of March 31, 2011 or five (5) Business Days following the filing of the
Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010
with the Commission, in the event that the Common Equity Closing or an
Alternative Common Stock Financing has not been consummated and a
Non-Participation Notice has not been delivered on or prior to December 31,
2010; provided,
however, that if the Filing Deadline falls on a Saturday, Sunday or other
day that the Commission is closed for business, the Filing Deadline shall be
extended to the next Business Day on which the Commission is open for
business.

    
      
        
          [ * ] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE
24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        

         

      

      
        3.

        
          

        

      

      
         

      

    

     

    “FINRA”
means the Financial Industry Regulatory Authority, Inc. or any successor entity
or entities.

     

    “Holder” or
“Holders”
means the holder or holders, as the case may be, from time to time of
Registrable Securities.

     

    “Indemnified
Party” shall have the meaning set forth in Section 6(c).

     

    “Indemnifying
Party” shall have the meaning set forth in Section 6(c).

     

    “Initial
Registration Statement” shall have the meaning set forth in Section
2(a).

     

    “Initiating
Holders” shall have the meaning set forth in Section 2(f).

     

    “Investor
Designee” shall have the meaning set forth in Section
7(b)(1).

     

    “Issuer
Filing” shall have the meaning set forth in Section 3(p).

     

    “Losses”
shall have the meaning set forth in Section 6(a).

     

    “Majority
Investors” shall have the meaning set forth in Section
7(b)(1).

     

    “New Registration
Statement” shall have the meaning set forth in Section 2(a).

     

    “Pro Rata
Share” shall have the meaning set forth in Section 7(a)(1).

     

     “Prospectus”
means the prospectus included in a Registration Statement (including, without
limitation, a prospectus that includes any information previously omitted from a
prospectus filed as part of an effective registration statement in reliance upon
Rule 430A promulgated under the Securities Act), as amended or supplemented by
any prospectus supplement, with respect to the terms of the offering of any
portion of the Registrable Securities covered by a Registration Statement, and
all other amendments and supplements to the Prospectus, including post-effective
amendments, and all material incorporated by reference or deemed to be
incorporated by reference in such Prospectus.

     

    “Register,”
“registered”
and “registration”
refer to a registration made by preparing and filing a Registration Statement or
similar document in compliance with the Securities Act and pursuant to Rule 415,
and the declaration or ordering of effectiveness of such Registration Statement
or document.

     

    “Registrable
Securities” means all of (i) the Conversion Shares, the Warrant Shares
and, if issued, the Common Equity Shares and (ii) any securities issued or
issuable upon any stock split, dividend or other distribution, recapitalization
or similar event with respect to the foregoing, provided, that the Shares
shall cease to be Registrable Securities upon the earliest to occur of the
following:  (A) sale pursuant to a Registration Statement or Rule 144
under the Securities Act (in which case, only such security sold shall cease to
be a Registrable Security); or (B) to the extent all of the Shares held by a
Holder may be immediately sold to the public without registration or restriction
(including without limitation as to volume by each holder thereof) under the
Securities Act, including pursuant to Rule 144 in a single or series of related
transactions on a single day.

    
      
        
          [ * ] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE
24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        

         

      

      
        4.

        
          

        

      

      
         

      

    

     

    “Registration
Statements” means any one or more registration statements of the Company
filed under the Securities Act that covers the resale of any of the Registrable
Securities pursuant to the provisions of this Agreement (including without
limitation any Initial Registration Statements, New Registration Statements and
Remainder Registration Statements), amendments and supplements to such
Registration Statements, including post-effective amendments, all exhibits and
all material incorporated by reference or deemed to be incorporated by reference
in such Registration Statements.

     

    “Remainder
Registration Statements” shall have the meaning set forth in Section
2(a).

     

    “Rule 415”
means Rule 415 promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same effect as such
Rule.

     

    “Rule 424”
means Rule 424 promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same effect as such
Rule.

     

    “SEC
Guidance” means (i) any publicly-available written or oral guidance,
comments, requirements or requests of the Commission staff and (ii) the
Securities Act, in each case, as reasonably interpreted in good faith upon the
mutual agreement of the Company and the Lead Purchasers, or counsel selected by
the Lead Purchasers.

     

    “Selling
Stockholder Questionnaire” means a questionnaire in the form attached as
Annex A hereto,
or such other form of questionnaire as may reasonably be adopted by the Company
from time to time.

     

    “Special
Registration Statement” shall mean a registration statement relating to
any employee benefit plan under Form S-8 or similar form or with respect to any
corporate reorganization or other transaction under Rule 145 of the
Securities Act.

     

    “Suspension
Certificate” shall have the meaning set forth in Section
4(a).

     

    “Suspension
Period” shall have the meaning set forth in Section 4(a).

     

    “Violations”
shall have the meaning set forth in Section 6(a).

    
      
        
          [ * ] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE
24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        

         

      

      
        5.

        
          

        

      

      
         

      

    

     

    2. Registration.

     

    (a)           On
or prior to the Filing Deadline, the Company shall prepare and file with the
Commission a “shelf” Registration Statement covering the resale of all of the
then outstanding Registrable Securities or Registrable Securities issuable upon
exercise of then outstanding Warrants not already covered by an existing and
effective Registration Statement for an offering to be made on a continuous
basis pursuant to Rule 415 or, if Rule 415 is not available for offers and sales
of the Registrable Securities, by such other means of distribution of
Registrable Securities as the Holders may reasonably specify (each, an “Initial
Registration Statement”).  Each Initial Registration Statement
shall be on Form S-3 (except as provided in Section 2(d) below) subject to the
provisions of Section 2(d) and shall contain (except if otherwise required
pursuant to written comments received from the Commission upon a review of such
Registration Statement) the “Plan of Distribution” section approved by the
Majority Investors.  Notwithstanding the registration obligations set
forth in this subsection (a) and subsection (b) of this Section 2, in the event
the Commission informs the Company that all of the Registrable Securities
required to be included in an Initial Registration Statement cannot, as a result
of the application of Rule 415, be registered for resale as a secondary offering
on a single registration statement, the Company agrees to promptly (i) inform
each of the Holders thereof and file amendments to the applicable Initial
Registration Statement as required by the Commission and/or (ii) withdraw such
Initial Registration Statement and file a new registration statement (a “New Registration
Statement”), in either case covering the maximum number of Registrable
Securities required to be included in an Initial Registration Statement and
permitted to be registered by the Commission, on Form S-3 or such other form
available to register for resale the Registrable Securities as a secondary
offering; provided,
however, that prior to filing such amendment or New Registration
Statement, the Company shall be obligated to use its commercially reasonable
best efforts to advocate with the Commission for the registration of all of the
Registrable Securities in accordance with SEC Guidance, including without
limitation, the Manual of Publicly Available Telephone Interpretations
D.29.  Notwithstanding any other provision of this Agreement, if any
SEC Guidance sets forth a limitation of the number of Registrable Securities
permitted to be registered on a particular Registration Statement as a secondary
offering (and notwithstanding that the Company used commercially reasonable best
efforts to advocate with the Commission for the registration of all or a greater
number of Registrable Securities), unless otherwise directed in writing by a
Holder as to its Registrable Securities, the number of Registrable Securities to
be registered on such Registration Statement will be reduced on a pro rata basis
based on the total number of unregistered Shares held by such
Holders.  In the event the Company amends an Initial Registration
Statement or files a New Registration Statement, as the case may be, under
clauses (i) or (ii) above, the Company will file with the Commission, as
promptly as allowed by Commission or SEC Guidance provided to the Company or to
registrants of securities in general, one or more registration statements on
Form S-3 or such other form available to register for resale those Registrable
Securities that were not registered for resale on the Initial Registration
Statement, as amended, or the New Registration Statement (the “Remainder
Registration Statements”).

     

    (b)           The
Company shall use its commercially reasonable best efforts to cause each
Registration Statement to be declared effective by the Commission as soon as
practicable and, with respect to each Initial Registration Statement or New
Registration Statement, as applicable, shall cause each Registration Statement
to be declared effective by the Commission no later than the Effectiveness
Deadline (including filing with the Commission a request for acceleration of
effectiveness in accordance with Rule 461 promulgated under the Securities Act
within five (5) Business Days after the date that the Company is notified
(orally or in writing, whichever is earlier) by the Commission that such
Registration Statement will not be “reviewed,” or will not be subject to further
review and that the effectiveness of such Registration Statement may be
accelerated) and shall, subject to Section 3(c) hereof, use its commercially
reasonable best efforts to keep each such Registration Statement continuously
effective under the Securities Act until such time as all of the Shares
(including any securities issued or issuable upon any stock split, dividend or
other distribution, recapitalization or similar event with respect to the
foregoing) shall cease to be Registrable Securities hereunder (the “Effectiveness
Period”).  The Company shall ensure that each Registration
Statement (including any amendments or supplements thereto and Prospectuses
contained therein) shall not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein, or necessary to
make the statements therein (in the case of Prospectuses, in the light of the
circumstances in which they were made) not misleading.  Each
Registration Statement shall also cover, to the extent allowable under the
Securities Act and the rules promulgated thereunder (including Rule 416), such
indeterminate number of additional shares of Common Stock resulting from stock
splits, stock dividends or similar transactions with respect to the Registrable
Securities.  The Company shall request effectiveness of a Registration
Statement as of 5:00 p.m. Eastern Time on the Effective Date.  The
Company shall promptly notify the Holders via facsimile or e-mail of the
effectiveness of a Registration Statement within one (1) Business Day of the
date on which the Company telephonically confirms effectiveness with the
Commission, which confirmation shall initially be the date requested for
effectiveness of a Registration Statement.  To the extent deemed
required under the Securities Act, the Company shall, by 9:30 a.m. Eastern Time
on the first Business Day after the Effective Date, file a Rule 424(b)
prospectus with the Commission.

    
      
        
          [ * ] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE
24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        

         

      

      
        6.

        
          

        

      

      
         

      

    

     

    (c)           The
Company shall not, prior to the Effective Date of the Registration Statements
covering the resale of the Registrable Securities issued or issuable at, or upon
exercise or conversion of securities issued at, the First Unit Closing, or
during the period between the Second Unit Closing and the Effective Date of the
Registration Statement covering the resale of the Registrable Securities issued
or issuable at, or upon exercise or conversion of securities issued at, the
Second Unit Closing, if any, or during the period between the Common Equity
Closing and the Effective Date of the Registration Statement covering the resale
of the Registrable Securities issued or issuable at the Common Equity Closing,
if any, prepare and file with the Commission any registration statement under
the Securities Act covering any of its securities other than a registration
statement on Form S-8 or Form S-4.

     

    (d)           In
the event that Form S-3 is not available for the registration of the resale
of Registrable Securities hereunder, the Company shall (i) register the resale
of the Registrable Securities on another appropriate form reasonably acceptable
to the Holders, including a registration statement on Form S-1, and (ii)
undertake to register the Registrable Securities on Form S-3 as soon as such
form is available, provided that, subject to
Section 3 hereof, the Company shall maintain the effectiveness of such
Registration Statement that is on a form other than Form S-3 then in effect,
until such time as a Registration Statement on Form S-3 covering the Registrable
Securities has been declared effective by the Commission.

     

    (e)           Each
Holder agrees to furnish to the Company a completed Selling Stockholder
Questionnaire not less than three (3) Business Days prior to the Initial Filing
Deadline and not less than three (3) Business Days prior to the filing of any
other Registration Statement.  Each Holder further agrees that it
shall not be entitled to be named as a selling securityholder in a Registration
Statement until such Holder has returned to the Company a completed and signed
Selling Stockholder Questionnaire or use the Prospectus for offers and resales
of Registrable Securities until such Holder is identified as a selling security
holder in an effective Registration Statement.  If a Holder of
Registrable Securities returns a Selling Stockholder Questionnaire after the
deadline specified in this Section 2(e), the Company shall take such actions as
are required to name such Holder as a selling security holder in the applicable
Registration Statement or any pre-effective or post-effective amendment thereto
and to include (to the extent not theretofore included) in such Registration
Statement the Registrable Securities identified in such late Selling Stockholder
Questionnaire. Each Holder acknowledges and agrees that the information in the
Selling Stockholder Questionnaire will be used by the Company in the preparation
of one or more Registration Statements covering such Holder’s Registrable
Securities and hereby consents to the inclusion of such information in such
Registration Statements.

     

    (f)           To
the extent that in accordance with subsection (a) of this Section 2, the
Commission informs the Company that all of the Registrable Securities required
to be included in an Initial Registration Statement cannot, as a result of the
application of Rule 415, be registered for resale as a secondary offering on a
single registration statement, for so long as that continues to be the case, the
following demand provisions shall apply:

    
      
        
          [ * ] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE
24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        

         

      

      
        7.

        
          

        

      

      
         

      

    

     

    1.           If (x) the per share fair
market value (or the per share Closing Bid Price of the Common Stock is quoted
on the NASDAQ Global Market, NYSE or other national stock exchange quotation
system) of the Common Stock has been equal to at least $0.66 for a period of
thirty (30) trading days with an average daily trading volume during such thirty
(30) trading days equal to or greater than two hundred thousand (200,000)
shares, subject to adjustment for any stock dividends, combinations, splits,
recapitalizations and the like, as reported by such exchange, and (y) the
Company shall receive from the Holders of at least a majority of the Registrable
Securities (the “Initiating
Holders”) a written request that the Company file a registration
statement with respect to the Registrable Securities for an underwritten
offering managed by an underwriter of national standing, provided, the
anticipated aggregate offering price of the Registrable Securities requested to
be so registered shall be equal to or exceed $10,000,000 (prior to the deduction
of underwriter discounts or commissions and offering expenses);

     

    then (z) the Company will use
commercially reasonable efforts to:

     

    (A)        
within ten days of the receipt by the Company of such notice, give written
notice of the proposed registration statement to all other Holders of
Registrable Securities; and

     

    (B)        
as soon as practicable thereafter, effect such registration under the Securities
Act as may be so requested and as would permit or facilitate the sale and
distribution of all or such portion of such Registrable Securities as are
specified in such Holders’ request, together with all or such portion of the
Registrable Securities of any Holder or Holders joining in such request as are
specified in written requests received by the Company within ten (10) days after
delivery of such written notice by the Company.

     

    Notwithstanding
the foregoing, the Company shall not be obligated to take any action to effect
any such registration pursuant to this subsection (f) of this Section
2:

     

    (A)       
 In any particular jurisdiction in which the Company would be required to
qualify as a foreign corporation, subject itself to taxation in that
jurisdiction or execute a general consent to service of process in effecting
such registration, unless the Company is already subject to service in such
jurisdiction and except as may be required under the Securities
Act;

     

    (B)       
 During the period starting with the date sixty (60) days prior to the
Company’s good faith estimated date of filing of, and ending on the date six (6)
months immediately following the effective date of, any registration statement
pertaining to securities of the Company (other than a Registration Statement
otherwise filed for the benefit of Holders pursuant to this Agreement or a
registration statement on Form S-8 or Form S-4 or any successor form(s)
thereto), provided that the
Company is actively employing in good faith all commercially reasonable efforts
to cause such registration statement to become effective;

    
      
        
          [ * ] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE
24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        

         

      

      
        8.

        
          

        

      

      
         

      

    

     

    (C)         
After the Company has filed two (2) such registrations pursuant to this
subsection (f) of this Section (2), and such registrations have been declared or
ordered effective;

     

    (D)         
If the Initiating Holders are unable to obtain the commitment of a nationally
recognized underwriter to firmly underwrite the offering; or

     

    (E)          If
the Company shall furnish to the Initiating Holders a certificate signed by the
Chief Executive Officer of the Company stating that in the good faith judgment
of the Board of Directors it would be seriously detrimental to the Company or
its stockholders for a registration statement to be filed and it is therefore
necessary to defer the filing of such registration statement, then the Company
shall have the right to defer such filing for a period not to exceed 60 days
from the date of receipt of the written request from the Initiating Holders;
provided, however, that the
Company shall not exercise such right more than once in any twelve-month period,
and the Company shall not register any securities for the account of itself or
any other stockholders of the Company during such period (other than a
Registration Statement otherwise filed for the benefit of Holders pursuant to
this Agreement or a registration statement on Form S-8 or Form S-4 or any
successor form(s) thereto).

     

    2.           The
right of any Holder to registration pursuant to this subsection (f) of this
Section 2 shall be conditioned upon such Holder’s participation in the
underwriting arrangements required by this subsection.

     

    3.           The
Company shall (together with all Holders proposing to distribute their
securities through such underwriting) enter into an underwriting agreement in
customary form with the managing underwriter. The managing underwriter shall be
selected by the Company and shall be reasonably acceptable to the Initiating
Holders. Notwithstanding any other provision of this subsection (f) of this
Section 2, if the managing underwriter determines that marketing factors require
a limitation of the number of shares to be underwritten, the managing
underwriter may limit the Registrable Securities  to be distributed through
such underwriting. The Company shall so advise all Holders distributing their
securities through such underwriting of such limitation, and the number of
shares of Registrable Securities that may be included in the registration shall
be allocated among all Holders requesting to include Registrable Securities in
such registration statement based on the pro rata percentage of Registrable
Securities held by such Holders. To facilitate the allocation of shares in
accordance with the above provisions, the Company may round the number of shares
allocated to any Holder or Holders to the nearest 100 shares. In no event shall
the number of Registrable Securities underwritten in such a registration be
limited unless and until all shares held by persons other than the holders of
the Registrable Securities are completely excluded from such
offering.

     

    4.      The
limitation on the number of registrations under this subsection (f) of this
Section 2 shall not apply to any registration in which more than 50% of the
Registrable Securities requested by Holders to be included in such registration
are excluded pursuant to the preceding paragraph.

     

    
      
        
          [ * ] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE
24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        

         

      

      
        9.

        
          

        

      

      
         

      

    

    5.           If
any Holder of Registrable Securities disapproves of the terms of the
underwriting, such Holder may elect to withdraw therefrom by written notice to
the Company, the managing underwriter and the other Holders participating in
such registration statement. The Registrable Securities and/or other securities
so withdrawn shall also be withdrawn from registration.

     

    3. Registration
Procedures

     

    In
connection with the Company’s registration obligations hereunder, the Company
shall:

     

    (a)         Not
less than five (5) Business Days prior to the filing of a Registration Statement
and not less than three (3) Business Days prior to the filing of any related
Prospectus or any amendment or supplement thereto (except for annual reports on
Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K and
any similar or successor reports), the Company shall furnish to the Holder
copies of such Registration Statement, Prospectus or amendment or supplement
thereto, as proposed to be filed, which documents will be subject to the review
of such Holder.  The Company shall permit a single firm of counsel
designated by the Holders of a majority of the Registrable Securities covered by
a Registration Statement to review such Registration Statement and all
amendments and supplements thereto (as well as all requests for acceleration or
effectiveness thereof) and use commercially reasonable best efforts to reflect
in such documents any comments as such counsel may reasonably propose and will
not request acceleration of such Registration Statement without prior notice to
such counsel.  The Company shall not file a Registration Statement or
any related Prospectus or any amendments or supplements thereto to which the
Holders of a majority of the Registrable Securities covered by such Registration
Statement shall reasonably and timely object to in good faith.

     

    (b)        Except
in circumstances contemplated by Sections 3(c) and 4 below, and as provided
therein: (i) prepare and file with the Commission such amendments (including
post-effective amendments) and supplements to each Registration Statement and
the Prospectus used in connection therewith as may be necessary to keep such
Registration Statement continuously effective as to the applicable Registrable
Securities for its Effectiveness Period and prepare and file with the Commission
such Remainder Registration Statements in order to register for resale under the
Securities Act all of the Registrable Securities; (ii) cause the related
Prospectus to be amended or supplemented by any required Prospectus supplement
(subject to the terms of this Agreement), and, as so supplemented or amended, to
be filed pursuant to Rule 424; (iii) respond as promptly as reasonably
practicable to any comments received from the Commission with respect to each
Registration Statement or any amendment thereto and, as promptly as reasonably
possible, provide the Holders true and complete copies of all correspondence
from and to the Commission relating to such Registration Statement but, except
as agreed by a Holder, not any comments that would result in the disclosure to
the Holders of material and non-public information concerning the Company; and
(iv) comply with the provisions of the Securities Act and the Exchange Act with
respect to the disposition of all Registrable Securities covered by a
Registration Statement until such time as all of such Registrable Securities
shall have been disposed of (subject to the terms of this Agreement) in
accordance with the intended methods of disposition by the Holders thereof as
set forth in such Registration Statement as so amended or in such Prospectus as
so supplemented; provided,
however, that each Holder shall be responsible for the delivery of the
Prospectus to the Persons to whom such Holder sells any of the Shares (including
in accordance with Rule 172 under the Securities Act), and each Holder agrees
that sales of Registrable Securities pursuant to a Registration Statement shall
be in compliance with the plan of distribution described in the applicable
Registration Statement and otherwise in compliance with applicable federal and
state securities laws. In the case of amendments and supplements to a
Registration Statement which are required to be filed pursuant to this Agreement
(including pursuant to this Section 3(b)) by reason of the Company filing a
report on Form 10-K, Form 10-Q or Form 8-K or any analogous report under the
Exchange Act, the Company shall have incorporated such report by reference into
such Registration Statement, if applicable, or shall file such amendments or
supplements with the Commission on the same day on which the Exchange Act report
which created the requirement for the Company to amend or supplement such
Registration Statement was filed.

    
      
        
          [ * ] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE
24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        

         

      

      
        10.

        
          

        

      

      
         

      

    

     

    (c)         Notify
the Holders (which notice shall, pursuant to clauses (iii) through (v) hereof,
be accompanied by an instruction to suspend the use of the Prospectus until the
requisite changes have been made) as promptly as reasonably possible (and, in
the case of (i)(A) below, not less than three (3) Business Days prior to such
filing, in the case of (iii) and (iv) below, not more than one (1) Business Day
after such issuance or receipt, and in the case of (v) below, not less than one
(1) Business Day after a determination by the Company that the financial
statements in any Registration Statement have become ineligible for inclusion
therein) and (if requested by any such Person) confirm such notice in writing no
later than one Business Day following the day (i)(A) when a Prospectus or any
Prospectus supplement or post-effective amendment to a Registration Statement is
proposed to be filed; (B) when the Commission notifies the Company whether there
will be a “review” of such Registration Statement and whenever the Commission
comments in writing on any Registration Statement (in which case the Company
shall provide to each of the Holders true and complete copies of all comments
that pertain to the Holders as a “Selling Stockholder” or to the “Plan of
Distribution” and all written responses thereto, but not information that the
Company believes would constitute material and non-public information); and (C)
with respect to each Registration Statement or any post-effective amendment,
when the same has become effective; (ii) of any request by the Commission or any
other Federal or state governmental authority for amendments or supplements to a
Registration Statement or Prospectus or for additional information that pertains
to the Holders as “Selling Stockholders” or the “Plan of Distribution”; (iii) of
the issuance by the Commission or any other federal or state governmental
authority of any stop order suspending the effectiveness of a Registration
Statement covering any or all of the Registrable Securities or the initiation of
any Proceedings for that purpose; (iv) of the receipt by the Company of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Securities for sale in any
jurisdiction, or the initiation or threatening of any Proceeding for such
purpose; and (v) of the occurrence of any event or passage of time that makes
the financial statements included in a Registration Statement ineligible for
inclusion therein or any statement made in such Registration Statement or
Prospectus or any document incorporated or deemed to be incorporated therein by
reference untrue in any material respect or that requires any revisions to such
Registration Statement, Prospectus or other documents so that, in the case of
such Registration Statement or the Prospectus, as the case may be, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
(in the case of any Prospectus, form of prospectus or supplement thereto, in
light of the circumstances under which they were made), not misleading, provided that any and all of
such information shall remain confidential to each Holder until such information
otherwise becomes public (other than disclosure to a Holder’s managers,
employees, agents, affiliates, accountants, attorneys and advisors, provided
such other party agrees to maintain the confidentiality of such information),
unless disclosure by a Holder is required by law; provided, further, that notwithstanding
each Holder’s agreement to keep such information confidential, the Holders make
no acknowledgement that any such information is material, non-public
information.

     

    (d)         Use
commercially reasonable best efforts to avoid the issuance of, or, if issued,
obtain the withdrawal of (i) any order suspending the effectiveness of a
Registration Statement, or (ii) any suspension of the qualification (or
exemption from qualification) of any of the Registrable Securities for sale in
any jurisdiction, as soon as practicable.

     

    (e)         If
requested by a Holder, furnish to such Holder, without charge, at least one
conformed copy of each Registration Statement and each amendment thereto and all
exhibits to the extent requested by such Holder (including those previously
furnished or incorporated by reference) promptly after the filing of such
documents with the Commission; provided, that the Company
shall have no obligation to provide any document pursuant to this clause that is
available on the Commission’s EDGAR or similar system.

    
      
        
          [ * ] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE
24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        

         

      

      
        11.

        
          

        

      

      
         

      

    

     

    (f)         Prior
to any resale of Registrable Securities by a Holder, register or qualify, or
cooperate with the selling Holders in connection with the registration or
qualification, unless an exemption from registration and qualification applies,
the Registrable Securities for offer and sale under the securities or “blue sky”
laws of such jurisdictions within the United States as any Holder reasonably
requests in writing, to keep each such registration or qualification (or
exemption therefrom) effective during any Effectiveness Period and to do any and
all other acts or things reasonably necessary to enable the disposition in such
jurisdictions of the Registrable Securities covered by the Registration
Statements, provided,
that the Company shall not be required to qualify generally to do
business in any jurisdiction where it is not then so qualified or to take any
action that would subject the Company to general service of process in any
jurisdiction where it is not then so subject or subject the Company to any
material tax in any such jurisdiction where it is not then so
subject.

     

    (g)         If
requested by the Holders, cooperate with the Holders to facilitate the timely
preparation and delivery of certificates representing Registrable Securities to
be delivered to a transferee pursuant to any Registration Statement, which
certificates shall be free, to the extent permitted by the Purchase Agreement
and under law, of all restrictive legends, and to enable such Registrable
Securities to be in such denominations and registered in such names as any such
Holders may reasonably request.

     

    (h)         Following
the occurrence of any event contemplated by Section 3(c)(iii) through (v), as
promptly as reasonably practicable, prepare a supplement or amendment, including
a post-effective amendment, to the affected Registration Statement(s) or a
supplement to the related Prospectus or any document incorporated or deemed to
be incorporated therein by reference, and file any other required document so
that, as thereafter delivered, no Registration Statement nor any Prospectus will
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein (in
the case of any Prospectus, form of prospectus or supplement thereto, in light
of the circumstances under which they were made), not misleading.

     

    (i)         (i)
In the time and manner required by the Principal Trading Market, prepare and
file with such Principal Trading Market an additional shares listing application
covering all of the Registrable Securities, (ii) use commercially reasonable
best efforts to take all steps necessary to cause such Registrable Securities to
be approved for listing on the Principal Trading Market as soon as possible
thereafter, (iii) if requested by any Holder, provide such Holder evidence of
such listing, and (iv) during each Effectiveness Period, use commercially
reasonable best efforts to maintain the listing of such Registrable Securities
on the Principal Trading Market.

     

    (j)   
     In order to enable the Holders to sell Shares
under Rule 144, for a period commencing on the date hereof until five (5) years
after the date hereof, the Company covenants to timely file (or obtain
extensions in respect thereof and file within the applicable grace period) all
reports required to be filed by the Company after the date hereof pursuant to
Section 13(a) or 15(d) of the Exchange Act. During such period, if the Company
is not required to file reports pursuant to Section 13(a) or 15(d) of the
Exchange Act, it will prepare and furnish to the Holders and make publicly
available in accordance with Rule 144(c) promulgated under the Securities Act
annual and quarterly financial statements, together with a discussion and
analysis of such financial statements in form and substance substantially
similar to those that would otherwise be required to be included in reports
required by Section 13(a) or 15(d) of the Exchange Act, as well as any other
information required thereby, in the time period that such filings would have
been required to have been made under the Exchange Act. The Company further
covenants that it will take such further action as any Holder may reasonably
request, all to the extent required from time to time to enable such Person to
sell Shares without registration under the Securities Act within the limitation
of the exemptions provided by Rule 144 promulgated under the Securities
Act.  The Company agrees to furnish to the Holders so long as the
Holders own Registrable Securities, promptly upon request, (i) a written
statement by the Company that it has complied with the reporting requirements of
the Securities Act and the Exchange Act as required for applicable provisions of
Rule 144, (ii) a copy of the most recent annual or quarterly report of the
Company and such other reports and documents so filed by the Company, and (iii)
such other information as may be reasonably requested to permit the Holders to
sell such securities pursuant to Rule 144 without registration.

    
      
        
          [ * ] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE
24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        

         

      

      
        12.

        
          

        

      

      
         

      

    

     

    (k)       The
Company may require each selling Holder to furnish to the Company a certified
statement as to (i) the number of shares of Common Stock beneficially owned by
such Holder and any Affiliate thereof, (ii) any FINRA affiliations required to
be disclosed in Registration Statement or with respect to offerings thereof,
(iii) if required by the Commission, any natural persons who have the power to
vote or dispose of the Common Stock and (iv) any other information as may be
requested by the Commission, FINRA or any state securities commission. During
any periods that the Company is unable to meet its obligations hereunder with
respect to the registration of Registrable Securities because any Holder fails
to furnish such information within three (3) Business Days of the Company’s
request, any Event that may otherwise occur solely because of such delay shall
be suspended as to such Holder only, until such information is delivered to the
Company.

     

    (l)       The
Company shall hold in confidence and not make any disclosure of information
concerning a Holder provided to the Company unless (i) disclosure of such
information is reasonably believed to be necessary to comply with federal or
state securities laws or the rules of any securities exchange or trading market
on which the Company’s securities are then listed or traded, (ii) the disclosure
of such information is reasonably believed to be necessary to avoid or correct a
misstatement or omission in any Registration Statement, (iii) the release of
such information is ordered pursuant to a subpoena or other order from a court
or governmental body of competent jurisdiction, or (iv) such information has
been made generally available to the public other than by disclosure in
violation of this or any other agreement. The Company agrees that it shall, upon
learning that disclosure of such information concerning a Holder is sought in or
by a court or governmental body of competent jurisdiction or through other
means, give prompt notice to such Holder prior to making such disclosure, and
allow such Holder, at its expense, to undertake appropriate action to prevent
disclosure of, or to obtain a protective order for, such
information.

     

    (m)       The
Company shall cooperate with each Holder who holds Registrable Securities being
offered and the managing underwriter or underwriters as reasonably requested by
them with respect to an applicable Registration Statement, if any, to facilitate
the timely preparation and delivery of certificates (not bearing any restrictive
legends) representing Registrable Securities to be offered pursuant to such
Registration Statement and enable such certificates to be in such denominations
or amounts, as the case may be, as the managing underwriter or underwriters, if
any, or a Holder may reasonably request and registered in such names as the
managing underwriter or underwriters, if any, or a Holder may request, and,
within three (3) Business Days after a Registration Statement which includes
Registrable Securities is ordered effective by the Commission, the Company shall
deliver, and shall cause legal counsel selected by the Company to deliver, to
the transfer agent for the Registrable Securities (with copies to each Holder)
an appropriate instruction and an opinion of such counsel in the form required
by the transfer agent in order to issue such Registrable Securities free of
restrictive legends upon the resale of such Registrable Securities pursuant to
such Registration Statement.

     

    (n)       At
the reasonable request of a Holder, the Company shall prepare and file with the
Commission such amendments (including post-effective amendments) and supplements
to a Registration Statement and any prospectus used in connection with the
Registration Statement as may be necessary in order to change the plan of
distribution set forth in such Registration Statement.  The Company
shall take all other reasonable actions necessary to expedite and facilitate
disposition by the Holders of Registrable Securities pursuant to a Registration
Statement.

    
      
        
          [ * ] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE
24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        

         

      

      
        13.

        
          

        

      

      
         

      

    

     

    (o)       The
Company shall use commercially reasonable best efforts to comply with all
applicable laws related to a Registration Statement and offering and sale of
securities and all applicable rules and regulations of governmental authorities
in connection therewith (including without limitation the Securities Act and the
Exchange Act and the rules and regulations promulgated by the
Commission).

     

    (p)       If
required by the FINRA Corporate Financing Department or any similar entity, the
Company shall promptly effect a filing with FINRA pursuant to FINRA Rule 5110
with respect to the public offering contemplated by resales of securities under
the Registration Statement (an “Issuer
Filing”), and pay the filing fee required by such Issuer Filing. The
Company shall use commercially reasonable best efforts to pursue the Issuer
Filing until FINRA issues a letter confirming that it does not object to the
terms of the offering contemplated by the Registration Statement.

     

    4. Holder
Covenants.

     

    (a)         Suspension of
Trading. At any time after the Registrable Securities are covered by an
effective Registration Statement, the Company may deliver to the Holders of such
Registrable Securities a certificate (the “Suspension
Certificate”) approved by the Chief Executive Officer or Chief Financial
Officer of the Company and signed by an officer of the Company stating that
sales of Registrable Securities under the applicable Registration Statement
would:

     

    1.           materially
interfere with the consummation of any transaction that would require the
Company to prepare financial statements under the Securities Act that the
Company would otherwise not be required to prepare in order to comply with its
obligations under the Exchange Act, or

     

    2.           require
public disclosure of a material transaction or event prior to the time such
disclosure might otherwise be required.

     

    Upon
receipt of a Suspension Certificate by Holders of Registrable Securities, such
Holders of Registrable Securities shall refrain from selling or otherwise
transferring or disposing of any Registrable Securities then held by such
Holders pursuant to a Registration Statement for a specified period of time (a
“Suspension
Period”) that is customary under the circumstances (not to exceed ten
(10) Trading Days). Notwithstanding the foregoing sentence, the Company shall be
permitted to cause Holders of Registrable Securities to so refrain from selling
or otherwise transferring or disposing of any Registrable Securities pursuant to
a Registration Statement on only two (2) occasions during each six (6)
consecutive month period that such Registration Statement remains effective. The
Company may impose stop transfer instructions to enforce any required agreement
of the Holders under this Section 4(a).

     

    (b)         Discontinued
Disposition.  Each Holder agrees by its acquisition of
Registrable Securities that, upon receipt of a notice from the Company of the
occurrence of any event of the kind described in Section 3(c)(iii)-(v), such
Holder will forthwith discontinue disposition of such Registrable Securities
under the applicable Registration Statement until it is advised in writing (the
“Advice”)
by the Company that the use of the applicable Prospectus (as it may have been
supplemented or amended) may be resumed.  The Company may provide
appropriate stop orders to enforce the provisions of this Section
4(b).  The Company will use its commercially reasonable best efforts
to ensure that the use of the Prospectus may be resumed as promptly as is
practicable.

    
      
        
          [ * ] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE
24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        

         

      

      
        14.

        
          

        

      

      
         

      

    

     

    5. Registration
Expenses.  All fees and expenses incident to the Company’s
performance of or compliance with its obligations under this Agreement shall be
borne by the Company whether or not any Registrable Securities are sold pursuant
to a Registration Statement.  The fees and expenses to be borne by the
Company referred to in the foregoing sentence shall include, without limitation,
(i) all registration and filing fees (including, without limitation, fees and
expenses (A) with respect to filings required to be made with any Principal
Trading Market on which the Common Stock of the Company is then listed for
trading, (B) with respect to compliance with applicable state securities or
“blue sky” laws (including, without limitation, fees and disbursements of
counsel for the Company in connection with “blue sky” qualifications or
exemptions of the Registrable Securities and determination of the eligibility of
the Registrable Securities for investment under the laws of such jurisdictions
as requested by the Holders) and (C) with respect to any filing that may be
required to be made by any broker through which a Holder intends to make sales
of Registrable Securities with FINRA pursuant to FINRA Rule 5110 or similar
rules, (ii) printing expenses (including, without limitation, expenses of
printing certificates for Registrable Securities and of printing prospectuses if
the printing of prospectuses is reasonably requested by the Holders of a
majority of the Registrable Securities included in the applicable Registration
Statement), (iii) messenger, telephone and delivery expenses, (iv) fees and
disbursements of counsel for the Company, (v) reasonable fees and disbursements
of one (1) counsel selected by the Holders of a majority of the Registrable
Securities then being registered (such fees and disbursements not to exceed
$100,000 with respect to a registration statement pursuant to subsection (f) of
Section 2 of this Agreement, $40,000 with respect to the Initial Registration
Statement and $20,000 with respect to any other Registration Statement filed
pursuant to this Agreement), (vi) Securities Act liability insurance, if the
Company so desires such insurance, and (vii) fees and expenses of all other
Persons retained by the Company in connection with the consummation of the
transactions contemplated by this Agreement, including but not limited to fees
and expenses of the Company’s independent registered public accounting firm. In
addition, the Company shall be responsible for all of its internal expenses
incurred in connection with the consummation of the transactions contemplated by
this Agreement (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), the expense of
any annual audit and the fees and expenses incurred in connection with the
listing of the Registrable Securities on any securities exchange as required
hereunder. In no event shall the Company be responsible for any underwriting,
broker or similar fees or commissions of any Holder or, except to the extent
provided above or otherwise in any Transaction Document, any legal fees or other
costs of the Holders.

    
      
        
          [ * ] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE
24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        

         

      

      
        15.

        
          

        

      

      
         

      

    

    6. Indemnification.

     

    (a)         Indemnification by the
Company.  The Company shall, notwithstanding any termination of
this Agreement, indemnify, defend and hold harmless each Holder, the officers,
directors, agents, partners, members, managers, stockholders, Affiliates and
employees of each of them, each Person who controls any such Holder (within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act)
and the officers, directors, partners, members, managers, stockholders, agents
and employees of each such controlling Person, to the fullest extent permitted
by applicable law, from and against any and all losses, claims, damages,
liabilities, costs (including, without limitation, reasonable costs of
preparation and investigation and reasonable attorneys’ fees) and expenses (each
a “Loss” and
collectively, “Losses”),
as incurred, that arise out of or are based upon: (i) any untrue statement or
alleged untrue statement of a material fact in a Registration Statement or the
omission or alleged omission to state therein a material fact required to be
stated or necessary to make the statements therein not misleading; (ii) any
untrue statement or alleged untrue statement of a material fact contained in any
preliminary Prospectus if used prior to the effective date of such Registration
Statement, or contained in the final Prospectus (as amended or supplemented, if
the Company files any amendment thereof or supplement thereto with the
Commission) or the omission or alleged omission to state therein any material
fact necessary to make the statements made therein, in light of the
circumstances under which the statements therein were made, not misleading; or
(iii) any violation or alleged violation by the Company of the Securities Act,
the Exchange Act, any state securities law, any “blue sky” laws of any
jurisdiction in which Registrable Securities are offered, or any rule or
regulation thereunder relating to the offer or sale of the Registrable
Securities (the matters in the foregoing clauses (i) through (iii) being,
collectively, “Violations”),
except to the extent, but only to the extent, that (A) such untrue statements,
alleged untrue statements, omissions or alleged omissions are based upon
information regarding such Holder furnished in writing to the Company by such
Holder expressly for use therein, or to the extent that such information relates
to such Holder or such Holder’s proposed method of distribution of Registrable
Securities and was reviewed and approved by such Holder expressly for use in the
applicable Registration Statement, such Prospectus or such form of Prospectus or
in any amendment or supplement thereto, or (B) in the case of an occurrence of
an event of the type specified in Section 3(c)(iii)-(v), related to the use by a
Holder of an outdated or defective Prospectus in a transaction the order for
which was placed after the Company has notified such Holder in writing that the
Prospectus is outdated or defective and prior to the receipt by such Holder of
the Advice, but only if and to the extent that following the receipt of Advice
the misstatement or omission giving rise to such Loss would have been
corrected.  The Company shall notify the Holders promptly of the
institution, threat or assertion of any Proceeding arising from or in connection
with the transactions contemplated by this Agreement of which the Company is
aware.  Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of an Indemnified Party (as
defined in Section 6(c)) and shall survive the transfer of the Registrable
Securities by the Holders.

     

    (b)         Indemnification by
Holders. Each Holder shall, notwithstanding any termination of this
Agreement, severally and not jointly, indemnify and hold harmless the Company,
its directors, officers, agents and employees, each Person who controls the
Company (within the meaning of Section 15 of the Securities Act and Section 20
of the Exchange Act), and the directors, officers, agents or employees of such
controlling Persons, to the fullest extent permitted by applicable law, from and
against all Losses, as incurred, arising out of or are based upon any untrue or
alleged untrue statement of a material fact contained in any Registration
Statement, any Prospectus, or any form of prospectus, or in any amendment or
supplement thereto or in any preliminary prospectus, or arising out of or
relating to any omission or alleged omission of a material fact required to be
stated therein or necessary to make the statements therein (in the case of any
Prospectus, or any form of prospectus or supplement thereto, in light of the
circumstances under which they were made) not misleading (i) to the extent, but
only to the extent that, such untrue statements or omissions are based solely
upon information regarding such Holder furnished in writing to the Company by
such Holder expressly for use therein, (ii) to the extent that such information
relates to such Holder or such Holder’s proposed method of distribution of
Registrable Securities and was reviewed and approved by such Holder expressly
for use in the applicable Registration Statement, such Prospectus or such form
of Prospectus or in any amendment or supplement thereto or (iii) in the case of
an occurrence of an event of the type specified in Section 3(c)(iii)-(v), to the
extent related to the use by such Holder of an outdated or defective Prospectus
after the Company has notified such Holder in writing that the Prospectus is
outdated or defective and prior to the receipt by such Holder of the
Advice.  In no event shall the liability of any selling Holder
hereunder be greater in amount than the dollar amount of the net proceeds
received by such Holder upon the sale of the Registrable Securities giving rise
to such indemnification obligation.

    
      
        
          [ * ] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE
24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        

         

      

      
        16.

        
          

        

      

      
         

      

    

     

    (c)         Conduct of Indemnification
Proceedings. If any Proceeding shall be brought or asserted against any
Person entitled to indemnity hereunder (an “Indemnified
Party”), such Indemnified Party shall promptly notify the Person from
whom indemnity is sought (the “Indemnifying
Party”) in writing, and the Indemnifying Party shall have the right to
assume the defense thereof, including the employment of counsel reasonably
satisfactory to the Indemnified Party and the payment of all reasonable fees and
expenses incurred in connection with defense thereof; provided, that the failure of
any Indemnified Party to give such notice shall not relieve the Indemnifying
Party of its obligations or liabilities pursuant to this Agreement, except (and
only) to the extent that such failure shall have materially and adversely
prejudiced the Indemnifying Party.

     

    An
Indemnified Party shall have the right to employ separate counsel in any such
Proceeding and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party or Parties
unless:  (1) the Indemnifying Party has agreed in writing to pay such
fees and expenses; (2) the Indemnifying Party shall have failed promptly to
assume the defense of such Proceeding and to employ counsel reasonably
satisfactory to such Indemnified Party in any such Proceeding; or (3) the named
parties to any such Proceeding (including any impleaded parties) include both
such Indemnified Party and the Indemnifying Party, and such Indemnified Party
shall have been advised by counsel that a conflict of interest exists or may
arise if the same counsel were to represent such Indemnified Party and the
Indemnifying Party (in which case, if such Indemnified Party notifies the
Indemnifying Party in writing that it elects to employ separate counsel at the
expense of the Indemnifying Party, the Indemnifying Party shall not have the
right to assume the defense thereof and such counsel shall be at the expense of
the Indemnifying Party), provided that the
Indemnifying Party shall not be liable for the fees and expenses of more than
one separate firm of attorneys at any time for all Indemnified Parties except to
the extent that an Indemnified Party shall have been advised by counsel that a
conflict of interest exists or may arise if the same counsel were to represent
such Indemnified Party and another Indemnified Party.  The
Indemnifying Party shall not be liable for any settlement of any such Proceeding
effected without its written consent, which consent shall not be unreasonably
withheld, delayed or conditioned.  No Indemnifying Party shall,
without the prior written consent of the Indemnified Party, effect any
settlement of any pending Proceeding in respect of which any Indemnified Party
is a party, unless such settlement includes an unconditional release of such
Indemnified Party from all liability on claims that are the subject matter of
such Proceeding.

     

    Subject
to the terms of this Agreement, all fees and expenses of the Indemnified Party
(including reasonable fees and expenses to the extent incurred in connection
with investigating or preparing to defend such Proceeding in a manner not
inconsistent with this Section) shall be paid to the Indemnified Party, as
incurred, within twenty (20) Business Days of written notice thereof to the
Indemnifying Party; provided, that the
Indemnified Party shall promptly reimburse the Indemnifying Party for that
portion of such fees and expenses applicable to such actions for which such
Indemnified Party is finally judicially determined to not be entitled to
indemnification hereunder). The failure to deliver written notice to the
Indemnifying Party within a reasonable time of the commencement of any such
action shall not relieve such Indemnifying Party of any liability to the
Indemnified Party under this Section 6, except to the extent that the
Indemnifying Party is prejudiced in its ability to defend such
action.

    
      
        
          [ * ] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE
24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        

         

      

      
        17.

        
          

        

      

      
         

      

    

     

    (d)        Contribution.  If
a claim for indemnification under Section 6(a) or 6(b) is unavailable to an
Indemnified Party (by reason of public policy or otherwise), then each
Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such Losses, in such proportion as is appropriate to reflect the relative
fault of the Indemnifying Party and Indemnified Party in connection with the
actions, statements or omissions that resulted in such Losses as well as any
other relevant equitable considerations.  The relative fault of such
Indemnifying Party and Indemnified Party shall be determined by reference to,
among other things, whether any action in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged omission of a
material fact, has been taken or made by, or relates to information supplied by,
such Indemnifying Party or Indemnified Party, and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such
action, statement or omission.  The amount paid or payable by a party
as a result of any Losses shall be deemed to include, subject to the limitations
set forth in this Agreement, any reasonable attorneys’ or other reasonable fees
or expenses incurred by such party in connection with any Proceeding to the
extent such party would have been indemnified for such fees or expenses if the
indemnification provided for in this Section was available to such party in
accordance with its terms.

     

    The
parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 6(d) were determined by pro rata allocation or by any
other method of allocation that does not take into account the equitable
considerations referred to in the immediately preceding
paragraph.  Notwithstanding the provisions of this Section 6(d), (A)
no Holder shall be required to contribute, in the aggregate, any amount in
excess of the amount by which the net proceeds actually received by such Holder
from the sale of the Registrable Securities subject to the Proceeding exceeds
the amount of any damages that such Holder has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission and (B) no contribution will be made under circumstances where the
maker of such contribution would not have been required to indemnify the
Indemnified Party under the fault standards set forth in this Section
6.  No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation.

     

    The
indemnity and contribution agreements contained in this Section are in addition
to any liability that the Indemnifying Parties may have to the Indemnified
Parties and are not in diminution or limitation of the indemnification
provisions under the Purchase Agreement.

     

    7. Other
Agreements.

     

    (a)        Preemptive
Rights.

     

    1.           Commencing
from and after the First Unit Closing, and for so long as at least 250,000 Unit
Shares remain outstanding, and subject to applicable securities laws, each
Investor that holds Unit Shares shall have a right of first refusal to purchase
its Pro Rata Share of all Common Stock Equivalents that the Company may, from
time to time, propose to sell and issue, other than Excluded
Securities.  Each Investor’s ”Pro Rata
Share” is equal to the ratio of (A) the number of outstanding Unit
Shares of which such Investor is a beneficial owner immediately prior to the
issuance of such Common Stock Equivalents to (B) the total number of
outstanding shares of Capital Stock of the Company immediately prior to the
issuance of the Common Stock Equivalents.

    
      
        
          [ * ] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE
24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        

         

      

      
        18.

        
          

        

      

      
         

      

    

     

    2.           If
the Company proposes to issue any Common Stock Equivalents, it shall give each
Investor known to
the Company to continue to beneficially own Unit Shares written notice of its
intention, describing the Common Stock Equivalents, the price and the terms and
conditions upon which the Company proposes to issue the same (the “Company
Notice”).  Each Investor shall have ten (10)
Business Days from the giving of the Company Notice to agree to purchase its Pro
Rata Share of the Common Stock Equivalents (except as provided above) for the
price and upon the terms and conditions specified in the Company Notice by
giving written notice to the Company and stating therein the quantity of Unit
Shares beneficially owned by such Investor and the quantity of Common Stock
Equivalents elected to be purchased, up to its Pro Rata
Share.  Notwithstanding the foregoing, the Company shall not be
required to offer or sell such Common Stock Equivalents to any Investor who would cause the
Company to be in violation of applicable federal securities laws by virtue of
such offer or sale.

     

    3.           If
not all of the Purchasers elect to purchase their Pro Rata Share of the
available Common Stock Equivalents, then the Company shall promptly notify in
writing the Purchasers who do so elect and shall offer such Purchasers the right
to acquire, on a pro rata basis, such non-participating Purchaser or Purchasers’
Pro Rata Share(s).  Each such Purchaser shall have five (5) Business
Days after receipt of such notice to notify the Company of its election to
purchase all or a portion of the unsubscribed shares.  The Company
shall have sixty (60) days thereafter to sell the Common Stock Equivalents in
respect of which the Investors’ rights were not exercised, at a price not lower
and upon general terms and conditions not materially more favorable to the
purchasers thereof than specified in the Company’s Notice.  If the
Company has not sold such Common Stock Equivalents within such sixty (60) day
period, the Company shall not thereafter issue or sell any Common Stock
Equivalents, without first offering such securities to the Investors in the
manner provided above.

     

    (b)        Board of
Directors.

     

    1.           From
and after the First Unit Closing, subject to Section 7(b)(2) and 7(b)(6) below,
the Company shall take all appropriate action to establish and maintain the size
of the Board at eight (8) members, three (3) of which shall be designated in
writing by the Investors holding a majority-in-interest of the then outstanding
Registrable Securities (the “Majority
Investors”) to be nominated by the Company to serve as a member of the
Board (each, an “Investor
Designee”). Alta BioPharma Partners III, L.P. (“Alta
Partners”), Bay City Capital L.P. (“Bay City
Capital”) and New Enterprise Associates (“NEA”),
together with their respective affiliates, shall each have the right to
designate one (1) such Investor Designee. From and after the First Unit Closing,
Nextech Venture, together with its affiliates (“Nextech”),
will be entitled to designate an observer to attend each meeting or meetings of
the Board, subject to customary limitations.

    
      
        
          [ * ] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE
24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        

         

      

      
        19.

        
          

        

      

      
         

      

    

    2.           Subject
to Section 7(b)(6) below, from and after the earlier to occur of (i) the Second
Unit Closing, (ii) the Common Equity Closing and (iii) the closing of an
Alternative Common Stock Financing in which the Investors exercise preemptive
rights pursuant to the terms of this Agreement and, as a result, beneficially
own greater than a majority of the Company’s voting stock as of such closing,
the Company shall take all appropriate action to promptly establish and maintain
the size of the Board at nine (9) members, five (5) of which shall be Investor
Designees and nominated in accordance with the provisions of this Section
7(b).  Alta Partners, Bay City Capital, NEA and Nextech, together with
their respective affiliates, shall each have the right to designate one (1) such
Investor Designee.  On or prior to January 20 of each year in which
the Majority Investors have rights pursuant to this Section 7(b) (assuming the
Company has made a request therefor at least five (5) Trading Days prior
thereto), and within five (5) Trading Days of the request by the Company in
connection with the preparation of a proxy statement with respect to the
election of members of the Board or a vacancy created on the Board by the
resignation, death or disability of an Investor Designee or the failure of an
Investor Designee to be elected at a meeting of the Company at any time at which
the Majority Investors have rights pursuant to this Section 7(b), each Investor
shall notify the Company of the number of voting shares of the Company’s capital
stock beneficially owned by such Investor as of a date within five (5) Trading
Days of the delivery of such notice.

     

    3.           The
Company (including any appropriate committee thereof) shall nominate the
Investor Designees for election (in case of the initial election of an Investor
Designee) or re-election (including, in the case of the end of the term of an
Investor Designee), as applicable, as a director of the Company as part of the
slate proposed by the Company that is included in the proxy statement (or
consent solicitation or similar document) of the Company relating to the
election of its directors, and shall provide the same level of support for each
Investor Designee as it provides to other members of the Board or other persons
standing for election as a director of the Company as part of a slate proposed
by the Company, subject to Section 7(b)(6) below.  In the event that a
vacancy is created on the Board at any time by the resignation, death or
disability of an Investor Designee, or the failure of an Investor Designee to be
elected at a meeting of the Company, a majority of the Investor Designees may
designate another person as Investor Designee to fill the vacancy created
thereby, and the Company hereby agrees to take, at any time and from time to
time, all actions necessary to fill the vacancy as provided in the foregoing,
subject to Section 7(b)(6) below.

     

    4.           The
Company shall provide each Investor Designee with all notices, minutes, consents
and other materials, financial or otherwise, which the Company provides to the
other members of the Board and committees thereof in their capacity as
such.  Subject to Section 7(b)(6) below, an Investor Designee shall be
a member of each committee of the Board, and Investor Designees shall represent
a majority of the Compensation Committee of the Board, which shall consist of no
more than three (3) members, subject to applicable law and the rules and
regulations of the Commission and the Principal Trading Market.

     

    5.           The
Company shall reimburse each Investor Designee for his or her out-of-pocket
expenses incurred in connection with his or her participation as a member of the
Board, in a manner consistent with the Company’s policies for reimbursing such
expenses of the members of the Board. In addition, the Company shall pay each
Investor Designee, in his or her capacity as a non-employee member of the Board,
the same compensation as to which all non-employee members of the Board are
entitled, in their capacity as such, subject to compliance with applicable law.
The Company shall indemnify each Investor Designee to the same extent it
indemnifies its other directors pursuant to its organizational documents and
applicable law.

    
      
        
          [ * ] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE
24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        

         

      

      
        20.

        
          

        

      

      
         

      

    

    6.           Notwithstanding
the foregoing, at any time at which the Company is subject to the NASDAQ Voting
Rights Rule and Policy, as currently set forth in NASDAQ Rule 4351 and IM-4351,
and applicable rules, or any related or successor regulations or amendments
thereto, the
aggregate number of Investor Designees may be reduced, in the sole discretion of
the Company, to the extent such reduction is required by such policy, rules and
regulations.  In the event of any such reduction, each of Alta
Partners, Bay City Capital and NEA shall retain its designation right so long as
at least three (3) Investor Designees are permitted and such entity or its
affiliates continue to beneficially own Shares, and Alta Partners, Bay City
Capital and NEA shall mutually determine the appropriate Investor Designees in
the event that less than three (3) Investor Designees are
permitted.  The number of Investor Designees that the Investors shall
have the right to designate shall also be adjusted to the extent otherwise
required by applicable law and the rules and regulations of the Commission and
the Principal Trading Market.

     

    8. Miscellaneous.

     

    (a)         Remedies.  In
the event of a breach by the Company or by an Investor of any of their
obligations under this Agreement, each Investor or the Company, as the case may
be, in addition to being entitled to exercise all rights granted by law and
under this Agreement, including recovery of damages, will be entitled to
specific performance of its rights under this Agreement.  The Company
and each Investor agree that monetary damages would not provide adequate
compensation for any losses incurred by reason of a breach by it of any of the
provisions of this Agreement and hereby further agrees that, in the event of any
action for specific performance in respect of such breach, it shall waive the
defense that a remedy at law would be adequate.

     

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

     

    (c)         Amendments and
Waivers.  The provisions of Sections 2 through 6 and 8 of this
Agreement, including definitions in Section 1 with respect to such sections, may
not be amended, modified, supplemented or waived unless the same shall be in
writing and signed by the Company and the Majority Investors.  The
provisions of Section 7(a) of this Agreement, including the definitions in
Section 1 and the provisions of this sentence with respect to such section, may
not be amended, modified, supplemented or waived unless the same shall be in
writing and signed by the Company and the Investors holding a
majority-in-interest of the Registrable Securities to which such amendment,
modification, supplement or waiver relates.  The provisions of Section
7(b) of this Agreement, including the definitions in Section 1 and the
provisions of this sentence with respect to such section, may not be amended,
modified, supplemented or waived unless the same shall be in writing and signed
by the Company, the Majority Investors, Alta Partners, Bay City Capital, NEA and
Nextech.  Notwithstanding the foregoing, a waiver or consent to depart
from the provisions hereof with respect to a matter that relates exclusively to
the rights of Holders and that does not directly or indirectly affect the rights
of other Holders may be given by all Holders to which such waiver or consent
relates; provided,
however, that the
provisions of this sentence may not be amended, modified or supplemented except
in accordance with the provisions of the first sentence of this Section 8(c).
Each Holder acknowledges that, except with respect to Sections 7(a) and 7(b) of
this Agreement (which require the consent of the Investors holding a
majority-in-interest of the Registrable Securities to which an amendment,
modification, supplement or waiver relates and the consent of Majority
Investors, Alta Partners, Bay City Capital, NEA and Nextech, respectively, to
bind all of the Investors), including the definitions in Section 1 and the
provisions of this section with respect to such sections, the Majority Investors
have the power to bind all of the Investors.

    
      
        
          [ * ] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE
24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        

         

      

      
        21.

        
          

        

      

      
         

      

    

     

    (d)         Term.  The
registration rights provided to the Holders of Registrable Securities hereunder,
and the Company’s obligation to keep the Registration Statements effective,
shall terminate at such time as there are no Registrable
Securities.  Notwithstanding the foregoing, Section 5, Section 6,
Section 7 and Section 8 shall survive the termination of this
Agreement.

     

    (e)         Notices.  Any
and all notices or other communications or deliveries required or permitted to
be provided hereunder shall be delivered as set forth in the Purchase
Agreement.

     

    (f)         Successors and
Assigns.  This Agreement shall inure to the benefit of and be
binding upon the successors and permitted assigns of each of the parties and
shall inure to the benefit of each Investor.  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.  The Company may not
assign its rights or obligations under Sections 2 through 6 hereof without the
prior written consent of the Majority Investors.  The Company may not
assign its rights or obligations under Section 7(a) of this Agreement, including
the definitions in Section 1 and the provisions of this sentence with respect to
such section, without the prior written consent of a majority of the Investors
with rights under such Section.  The Company may not assign its rights
or obligations under Section 7(b) of this Agreement, including the definitions
in Section 1 and the provisions of this sentence with respect to such section,
without the prior written consent of the Majority Investors and each of Alta
Partners, Bay City Capital, NEA and Nextech. The rights of the Investors
hereunder, including the right to have the Company register Registrable
Securities pursuant to this Agreement, may be assigned by each Investor to
transferees or assignees of all or any portion of the Registrable Securities,
but only if (i) the Investor agrees in writing with the transferee or assignee
to assign such rights and related obligations under this Agreement, and for the
transferee or assignee to assume such obligations, and a copy of such agreement
is furnished to the Company within a reasonable time after such assignment, (ii)
the Company is, within a reasonable time after such transfer or assignment,
furnished with written notice of the name and address of such transferee or
assignee and the securities with respect to which such registration rights are
being transferred or assigned, (iii) at or before the time the Company received
the written notice contemplated by clause (ii) of this sentence, the transferee
or assignee agrees in writing with the Company to be bound by all of the
provisions contained herein and (iv) the transferee is an “accredited investor,”
as that term is defined in Rule 501 of Regulation D.

     

    (g)         Execution and
Counterparts.  This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original
and, all of which taken together shall constitute one and the same Agreement and
shall become effective when counterparts have been signed by each party and
delivered to the other party, it being understood that both parties need not
sign the same counterpart.  In the event that any signature is
delivered by facsimile transmission or by e-mail delivery of a “.pdf” format
data file, such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed) with the same
force and effect as if such facsimile or “.pdf” signature were the original
thereof.

     

    (h)         Governing
Law.  All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be determined in
accordance with the provisions of the Purchase Agreement.

     

    (i)  
       Cumulative
Remedies.  The remedies provided herein are cumulative and not
exclusive of any remedies provided by law.

    
      
        
          [ * ] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE
24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        

         

      

      
        22.

        
          

        

      

      
         

      

    

    (j)       Severability. If any
term, provision, covenant or restriction of this Agreement is held by a court of
competent jurisdiction to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set forth herein
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated, and the parties hereto shall use their reasonable efforts to
find and employ an alternative means to achieve the same or substantially the
same result as that contemplated by such term, provision, covenant or
restriction.  It is hereby stipulated and declared to be the intention
of the parties that they would have executed the remaining terms, provisions,
covenants and restrictions without including any of such that may be hereafter
declared invalid, illegal, void or unenforceable.

     

    (k)       Headings.  The
headings in this Agreement are for convenience of reference only and shall not
limit or otherwise affect the meaning hereof.

     

    (l)       Currency.  Unless
otherwise indicated, all dollar amounts referred to in this Agreement are in
United States Dollars.  All amounts owing under this Agreement are in
United States Dollars.  All amounts denominated in other currencies
shall be converted in the United States Dollar equivalent amount in accordance
with the applicable exchange rate in effect on the date of
calculation.

     

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

    

    [REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK,

    SIGNATURE
PAGES TO FOLLOW]

    
      
        
          [ * ] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE
24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        

         

      

      
        23.

        
          

        

      

      
         

      

    

    IN
WITNESS WHEREOF, each of the parties has executed this Investor Rights Agreement
as of the date first written above.

     

    
      
        
          
            
              	 
      	
                      SUNESIS
      PHARMACEUTICALS, INC.

                    
	 
      	 
      	 
      
	 
      	
                      By: 

                    	 	   
      
	 
      	 
      	
                      Name:  Daniel
      N. Swisher, Jr.

                    
	 
      	 
      	
                      Title:    President
      and Chief Executive
Officer

                    

            

          

        

      

    

     

    [REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK,

    SIGNATURE
PAGES OF HOLDERS TO FOLLOW]

     

    
      
        
          [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

        

         

      

      
         

        
          

        

      

      
         

      

    

    IN WITNESS WHEREOF, each of the parties
has executed this Investor Rights Agreement as of the date first written
above.

    

    
      
        
          
            
              
                
                  
                    	 
      	
                            NAME
      OF INVESTOR

                          
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 	 
	 
      	
                            AUTHORIZED
      SIGNATORY

                          
	 
      	 
      	 
      
	 
      	
                            By:

                          	 
      
	 
      	 
      	
                            Name:

                          
	 
      	 
      	
                            Title:

                          

                  

                

              

            

          

        

      

    

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      	 
      	
                                              ADDRESS
      FOR NOTICE

                                            
	 
      	 
      	 
      
	 
      	
                                              c/o:
      ______________________________________________

                                            
	 
      	 
      	 
      
	 
      	
                                              Street:
      ____________________________________________

                                            
	 
      	 
      	 
      
	 
      	
                                              City/State/Zip: ______________________________________

                                            
	 
      	 
      	 
      
	 
      	
                                              Attention:
      _________________________________________

                                            
	 
      	 
      	 
      
	 
      	
                                              Tel:
      ______________________________________________

                                            
	 
      	 
      	 
      
	 
      	
                                              Fax:
      ______________________________________________

                                            
	 
      	 
      	 
      
	 
      	
                                              Email:
      ____________________________________________

                                            

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
        
          [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

        

         

      

      
         

        
          

        

      

      
         

      

    

    Annex A

     

    SELLING
STOCKHOLDER NOTICE AND QUESTIONNAIRE

    

    The
undersigned holder of shares of common stock, warrants to purchase shares of
common stock and/or preferred stock convertible into shares of the common stock,
par value $0.0001 per share, of Sunesis Pharmaceuticals, Inc., a Delaware
corporation (the “Company”),
issued pursuant to that certain Securities Purchase Agreement by and among the
Company and the Purchasers as defined therein, dated as of March 31, 2009 (the
“Purchase
Agreement”), understands that the Company intends to file with the
Commission a registration statement on Form S-3 (except if the Company is
ineligible to register for resale the Registrable Securities on Form S-3, in
which case such registration shall be on a registration statement on Form S-1)
(the “Resale
Registration Statement”) for the registration and the resale under Rule
415 of the Securities Act of Registrable Securities in accordance with the terms
of that certain Investor Rights Agreement, dated as of April 3, 2009 by and
among the Company and the Investors as defined therein, to which this Notice and
Questionnaire is attached as Annex A (the “Agreement”).
All capitalized terms not otherwise defined herein shall have the meanings
ascribed thereto in the Agreement.

    

    In order
to sell or otherwise dispose of any Registrable Securities pursuant to the
Resale Registration Statement, a holder of Registrable Securities generally will
be required to be named as a selling stockholder in the related prospectus or a
supplement thereto (as so supplemented, the “Prospectus”),
deliver such Prospectus to purchasers of Registrable Securities (including
pursuant to Rule 172 under the Securities Act) and be bound by the provisions of
the Agreement (including certain indemnification provisions, as described
below). Holders must complete and deliver this Notice and Questionnaire in order
to be named as selling stockholders in the Prospectus.

    

    Certain
legal consequences arise from being named as a selling stockholder in the Resale
Registration Statement and the Prospectus. Holders of Registrable Securities are
advised to consult their own securities law counsel regarding the consequences
of being named or not named as a selling stockholder in the Resale Registration
Statement and the Prospectus.

    

    NOTICE

     

    The
undersigned holder (the “Selling
Stockholder”) of Registrable Securities hereby gives notice to the
Company of its intention to sell or otherwise dispose of Registrable Securities
owned by it and listed below in Item (3), unless otherwise specified in Item
(3), pursuant to the Resale Registration Statement. The undersigned, by signing
and returning this Notice and Questionnaire, understands and agrees that it will
be bound by the terms and conditions of this Notice and Questionnaire and the
Agreement.

    

    The
undersigned hereby provides the following information to the Company and
represents and warrants that such information is accurate and
complete:

    

      
        
          
            [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

          

           

        

        
           

          
            

          

        

        
           

        

      

    

     

    
      QUESTIONNAIRE

    

     

    
      1.  Name.

    

     

    
      	
               
      

            	
              (a)

            	
              Full
      Legal Name of Selling Stockholder:

            

    

    
      
        
          	
                   
      

                	
                   

                	
                   

                

        

      

    

     

    
      	
               
      

            	
              (b)

            	
              Full
      Legal Name of Registered Holder (if not the same as (a) above) through
      which Registrable Securities Listed in Item 3 below are
    held:

            

    

    
      
        
          
            	
                     
      

                  	
                     

                  	
                     

                  

          

        

      

      
        
          
            
            

          

        

         

      

    

    
      	
               
      

            	
              (c)

            	
              Full
      Legal Name of Natural Control Person (which means a natural person who
      directly or indirectly alone or with others has power to vote or dispose
      of the securities covered by this Notice and
    Questionnaire):

            

    

    
      
        
          
            	
                     
      

                  	
                     

                  	
                     

                  

          

        

      

      
2.  Address
for Notices to Selling Stockholder:

    

     

    
      	 
      
	 
      
	 
      

      
        
          
            	
                    Telephone:

                  	 

          

        

        
          
            
              	
                      Fax:

                    	 

            

          

        

        
          
            	
                    Contact Person:

                  	 

          

        

        
          
            
              
                
                  
                    	
                            E-mail Address of Contact Person:

                          	 

                  

                

              

            

          

        

      

    

    

    
      3.  Beneficial
Ownership of Registrable Securities Issuable Pursuant to the Purchase
Agreement:

    

     

    
      	
               
      

            	
              (a)

            	
              Type
      and Number of Registrable Securities beneficially owned and issued
      pursuant to the Purchase Agreement:

            

    

    
      
        
          
            	
                     
      

                  	
                     

                  	
                     

                  

          

        

      

      
        
          
            
              	
                       
      

                    	
                       

                    	
                       

                    

            

          

        

        
          
            
              
                	
                         
      

                      	
                         

                      	
                         

                      

              

            

          

           

        

      

    

    
      	
               
      

            	
              (b)

            	
              Number
      of shares of common stock to be registered pursuant to this Notice and
      Questionnaire for resale:

            

    

    
      	
               
      

            	
               

            	
               

            

      
        
          
            
              	
                       
      

                    	
                       

                    	
                       

                    

            

          

        

        
          
            
              
                	
                         
      

                      	
                         

                      	
                         

                      

              

            

          

           

          
            
              
                
                  [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

                

                 

              

              
                 

                
                  

                

              

              
                 

              

            

          

        

      

    

    

    
      4.  Broker-Dealer
Status:

    

     

    
      	
               
      

            	
              (a)

            	
              Are
      you a broker-dealer?

            

    

    
       

      Yes    ̈                                No    ̈

    

    
       

      
        	
                 
      

              	
                (b)

              	
                If
      “yes” to Section 4(a), did you receive your Registrable Securities as
      compensation for investment banking services to the
    Company?

              

      

      
         

        
          Yes    ̈                                No    ̈

        

      

    

     

    
      	
              Note:

            	
              If
      no, the Commission’s staff has indicated that you should be identified as
      an underwriter in the Registration
Statement.

            

    

     

    
      	
               
      

            	
              (c)

            	
              Are
      you an affiliate of a
broker-dealer?

            

    

     

    
      Yes    ̈                                No    ̈

    

     

    
      	  
    	
              Note:

            	
              If
      yes, provide a narrative explanation
below:

            

    

     

    
      	
            	
               

            	
               

            

      
        
          
            
            

          

        

      

    

    
      	
            	
               

            	
               

            

      
        
          
            
            

          

        

      

    

     

    
      	
               
      

            	
              (c)

            	
              If
      you are an affiliate of a broker-dealer, do you certify that you bought
      the Registrable Securities in the ordinary course of business, and at the
      time of the purchase of the Registrable Securities to be resold, you had
      no agreements or understandings, directly or indirectly, with any person
      to distribute the Registrable
Securities?

            

    

     

    
      Yes    ̈                                No    ̈

    

     

    
      	  
    	
              Note:

            	
              If
      no, the Commission’s staff has indicated that you should be identified as
      an underwriter in the Registration
Statement.

            

    

     

    
      5.  Beneficial
Ownership of Other Securities of the Company Owned by the Selling
Stockholder.

    

     

    Except
as set forth below in this Item 5, the undersigned is not the beneficial or
registered owner of any securities of the Company other than the Registrable
Securities listed above in Item 3.

     

    
      	
               
      

            	
              (a)

            	
              Type
      and amount of other securities beneficially
  owned:

            

    

    
      	
            	
               

            	
               

            

      
        
          
            
            

          

        

      

    

    
      	
            	
               

            	
               

            

      
        
          
            
            

          

        

      

    

     

    6.  Relationships
with the Company:

     

    Except
as set forth below, neither the undersigned nor any of its affiliates, officers,
directors or principal equity holders (owners of 5% of more of the equity
securities of the undersigned) has held any position or office or has had any
other material relationship with the Company (or its predecessors or affiliates)
during the past three years.

    
      
        
          [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

        

         

      

      
         

        
          

        

      

      
         

      

    

    

     

    
      	
               
      

            	
              State
      any exceptions here:

            

    

    
      	
            	
               

            	
               

            

      
        
          
            
            

          

        

      

    

    
      	
            	
               

            	
               

            

      
        
          
            
            

          

        

      

    

     

    
      7.  Plan
of Distribution:

    

     

    The
undersigned has reviewed the form of Plan of Distribution provided by the
Company, and hereby confirms that, except as set forth below, the information
contained therein regarding the undersigned and its plan of distribution is
correct and complete.

     

    
      	
               
      

            	
              State
      any exceptions here:

            

    

    
      	
            	
               

            	
               

            

      
        
          
            
            

          

        

      

    

    
      	
            	
               

            	
               

            

      
        
          
            
            

          

        

      

    

     

    
      ***********

    

     

    The
undersigned agrees to promptly notify the Company of any inaccuracies or changes
in the information provided herein that may occur subsequent to the date hereof
and prior to the effective date of any applicable Resale Registration Statement.
All notices hereunder shall be made as provided in the Agreement. In the absence
of any such notification, the Company shall be entitled to continue to rely on
the accuracy of the information in this Notice and Questionnaire.

     

    By
signing below, the undersigned consents to the disclosure of the information
contained herein in its answers to Items (1) through (7) above and the inclusion
of such information in the Resale Registration Statement and the Prospectus. The
undersigned understands that such information will be relied upon by the Company
in connection with the preparation or amendment of any such Registration
Statement and the Prospectus.

     

    By
signing below, the undersigned acknowledges that it understands its obligation
to comply, and agrees that it will comply, with the provisions of the Exchange
Act and the rules and regulations thereunder, particularly Regulation M in
connection with any offering of Registrable Securities pursuant to the Resale
Registration Statement. The undersigned also acknowledges that it understands
that the answers to this Notice and Questionnaire are furnished for use in
connection with Registration Statements filed pursuant to the Investor Rights
Agreement and any amendments or supplements thereto filed with the Commission
pursuant to the Securities Act.

     

    The
undersigned hereby acknowledges and is advised of the following Interpretation
A.65 of the July 1997 SEC Manual of Publicly Available Telephone Interpretations
regarding short selling:

     

    “An
Issuer filed a Form S-3 registration statement for a secondary offering of
common stock which is not yet effective.  One of the selling
stockholders wanted to do a short sale of common stock “against the box” and
cover the short sale with registered shares after the effective
date.  The issuer was advised that the short sale could not be made
before the registration statement becomes effective, because the shares
underlying the short sale are deemed to be sold at the time such sale is
made.  There would, therefore, be a violation of Section 5 if the
shares were effectively sold prior to the effective date.”

     

    
      
        
          
            [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

          

           

        

        
           

          
            

          

        

        
           

        

      

    

     

    By
returning this Notice and Questionnaire, the undersigned will be deemed to be
aware of the foregoing interpretation.

     

    I confirm
that, to the best of my knowledge and belief, the foregoing statements
(including without limitation the answers to this Notice and Questionnaire) are
correct.

     

    IN WITNESS WHEREOF the undersigned, by
authority duly given, has caused this Questionnaire to be executed and delivered
either in person or by its duly authorized agent.

     

    
      
        
          
            
              
                
                  
                    
                      	Dated:___________________ 	Beneficial Owner:  	 
	 
      	 
      	 
      	 
      
	 
      	
                              By: 

                            	 
      
	 
      	 
      	
                              Name:

                            	 
      
	 
      	 
      	
                              Title:

                            	 
      

                    

                  

                

              

            

          

        

      

    

     

    PLEASE
FAX A COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND RETURN
THE ORIGINAL BY OVERNIGHT MAIL, TO:

    

    Cooley
Godward Kronish LLP

    Five Palo
Alto Square

    3000 El
Camino Real

    Palo
Alto, California 94306-2155

    Telephone
No.:  (650) 843-5180

    Facsimile
No.:  (650) 849-7400

    Attention:  Suzanne
Sawochka Hooper

     

    
      
        
          
            [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

          

           

        

        
           

          
            

          

        

        
           

        

      

    

     

    EXHIBIT
D

     

    STOCK
CERTIFICATE QUESTIONNAIRE

     

    Pursuant
to Section 2.1(c) of the Agreement, please provide us with the following
information:

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              	
                                      1.     
      The exact name that the Securities are to be registered in (this is the
      name that will appear on the stock certificate(s) and
      warrant(s)).  You may use a nominee name if
      appropriate:

                                    	 	
                                       

                                    
	 	 	 
	
                                      2.     
      The relationship between the Purchaser of the Securities and the
      Registered Holder listed in response to Item 1 above:

                                    	 	
                                       

                                    
	 	 	 
	
                                      3.     
      The mailing address, telephone and telecopy number of the Registered
      Holder listed in response to Item 1 above:

                                    	 	
                                       

                                    
	 	 	 
	 	 	 
	 	 	 
	
                                      4.   
      The Tax Identification Number (or, if an individual, the Social Security
      Number) of the Registered Holder listed in response to Item 1
      above:

                                    	 	
                                       

                                    

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
        
          
            [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

          

           

        

        
           

          
            

          

        

        
           

        

      

    

     

    EXHIBIT
E-1

     

    
      
        	
                 
      

              	
                FORM
      OF OPINION OF COMPANY COUNSEL

              

      

      
        	
                 
      

              	
                (FIRST
      UNIT CLOSING AND SECOND UNIT
CLOSING)

              

      

      

      
        	
                1.  

              	
                The
      Company has been duly incorporated and is a validly existing corporation
      in good standing under the laws of the State of
  Delaware.

              

      

       

      
        	
                2.  

              	
                The
      Company has the requisite corporate power to own, lease and operate its
      property and assets, to conduct its business as described in the SEC
      Reports and to execute and deliver the Financing Agreements and to perform
      its obligations thereunder to be performed at the [First Unit
      Closing/Second Unit Closing], including, without limitation, to issue,
      sell and deliver the Units under the Purchase Agreement, to issue the
      Conversion Shares issuable upon conversion of the Preferred Stock and to
      issue the Warrant Shares issuable upon exercise of the
      Warrants.

              

      

       

      
        	
                3.  

              	
                The
      Company is duly qualified to do business as a foreign corporation and is
      in good standing under the laws of the State of
  California.

              

      

       

      
        	
                4.  

              	
                 All
      corporate action on the part of the Company necessary for the
      authorization, execution and delivery of the Financing Agreements by the
      Company, the authorization, sale, issuance and delivery of the Securities
      and the performance by the Company of its obligations under the Financing
      Agreements to be performed at the [First Unit Closing/Second Unit Closing]
      has been taken.

              

      

       

      
        	
                5.  

              	
                Each
      of the Financing Agreements has been duly and validly authorized, executed
      and delivered by the Company, and each such agreement constitutes a valid
      and binding agreement of the Company, enforceable against the Company in
      accordance with its respective terms, except as enforceability may be
      limited by applicable bankruptcy, insolvency, fraudulent conveyance,
      reorganization, arrangement, moratorium or other similar laws affecting
      creditors’ rights generally, and subject to general equity principles and
      to limitations on availability of equitable relief, including specific
      performance.

              

      

       

      
        	
                6.  

              	
                The
      Company’s authorized capital stock consists of (a) one hundred million
      (100,000,000) shares of Common Stock, par value $0.0001 per share, and
      (b) five million (5,000,000) shares of Preferred Stock, par value
      $0.0001 per share. The Units have been duly authorized and, when issued
      and paid for by the Purchasers pursuant to the Purchase Agreement, the
      Preferred Stock underlying the Units will be validly issued, fully paid
      and nonassessable. The Conversion Shares have been duly authorized and,
      when issued  upon conversion in accordance with the terms of the
      Certificate of Designation, will be validly issued, fully paid and
      nonassessable.  The Warrant Shares have been duly authorized
      and, when sold and issued and paid for by the Purchasers in accordance
      with the terms of the Warrants, will be validly issued, fully paid and
      nonassessable.  The holders of outstanding shares of capital
      stock of the Company are not entitled to preemptive rights under the
      Company’s Amended and Restated Certificate of Incorporation or Amended and
      Restated Bylaws, the Certificate of Designation or Delaware law or, to our
      knowledge, rights of first refusal or other similar rights to subscribe
      for the Securities (other than rights which have been waived in writing or
      otherwise satisfied).

              

      

       

      
        	
                7.  

              	
                The
      execution and delivery of the Financing Agreements and the issuance of the
      Units, the Conversion Shares (assuming conversion of the Shares at the
      [First Unit Closing/Second Unit Closing]) and the Warrant Shares (assuming
      exercise of the Warrants at the [First Unit Closing/Second Unit Closing])
      pursuant thereto do not violate any provision of the Company’s Amended and
      Restated Certificate of Incorporation, Amended and Restated Bylaws or the
      Certificate of Designation, do not constitute a default under, a material
      breach of or result in any acceleration of rights under any Material
      Agreement and do not violate (a) any governmental statute, rule or
      regulation that in our experience is typically applicable to transactions
      of the nature contemplated by the Financing Agreements or (b) any order,
      writ, judgment, injunction, decree, determination or award which has been
      entered against the Company and of which we are
  aware.

              

      

      
         

        
          
            
              
                [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

              

               

            

            
               

              
                

              

            

            
               

            

          

        

         

      

      
        	
                8.  

              	
                To
      our knowledge, there is (i) no action, suit or proceeding by or before any
      court or other governmental agency, authority or body or any arbitrator
      pending or overtly threatened against the Company or its properties by a
      third party that questions the validity of the Financing Agreements or of
      a character required to be disclosed in the SEC Reports as required by the
      Securities Act and the rules thereunder and (ii) no indenture, contract,
      lease, mortgage, deed of trust, note agreement, loan or other agreement or
      instrument of a character required to be filed as an exhibit to the SEC
      Reports, which is not filed as required by the Securities Act and the
      rules thereunder.

              

      

      

      
        	
                9.  

              	
                All
      consents, approvals, authorizations, or orders of, and filings,
      registrations and qualifications with any U.S. Federal or California
      regulatory authority or governmental body required for the issuance of the
      Securities have been made or obtained, except for the filing of a Form D
      pursuant to Securities and Exchange Commission Regulation
    D.

              

      

       

      
        	
                10.  

              	
                The
      offer and sale of the Securities are exempt from the registration
      requirements of the Securities Act, subject to the timely filing of a Form
      D pursuant to Securities and Exchange Commission Regulation
    D.

              

      

       

      
        	
                11.  

              	
                The
      Company is not, and, after giving effect to the offering and sale of the
      Securities and the application of the proceeds thereof, will not be an
      “investment company” as defined in the Investment Company
    Act.

              

      

       

      
        	
                12.  

              	
                To
      our knowledge, there are no written contracts, agreements or
      understandings between the Company and any person granting such person the
      right (other than rights which have been waived in writing or otherwise
      satisfied) to require the Company to include any securities of the Company
      in any registration statement contemplated by Section 2 of the Investor
      Rights Agreement.

              

      

       

    

    
      
        
          
            [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

          

           

        

        
           

          
            

          

        

        
           

        

      

    

     

    
      EXHIBIT
E-2

       

      FORM
OF OPINION OF COMPANY COUNSEL

      (COMMON
EQUITY CLOSING)

       

      
        	
                1.  

              	
                The
      Company has been duly incorporated and is a validly existing corporation
      in good standing under the laws of the State of
  Delaware.

              

      

       

      
        	
                2.  

              	
                The
      Company has the requisite corporate power to own, lease and operate its
      property and assets, to conduct its business as described in the SEC
      Reports and to perform its obligations under the Financing Agreements,
      including, without limitation, to issue, sell and deliver the Shares under
      the Purchase Agreement.

              

      

       

      
        	
                3.  

              	
                The
      Company is duly qualified to do business as a foreign corporation and is
      in good standing under the laws of the State of
  California.

              

      

       

      
        	
                4.  

              	
                 All
      corporate action on the part of the Company necessary for the
      authorization, execution and delivery of the Financing Agreements by the
      Company, the authorization, sale, issuance and delivery of the Shares and
      the performance by the Company of its obligations under the Financing
      Agreements to be performed at the Common Equity Closing has been
      taken.

              

      

       

      
        	
                5.  

              	
                Each
      of the Financing Agreements has been duly and validly authorized, executed
      and delivered by the Company, and each such agreement constitutes a valid
      and binding agreement of the Company, enforceable against the Company in
      accordance with its respective terms, except as enforceability may be
      limited by applicable bankruptcy, insolvency, fraudulent conveyance,
      reorganization, arrangement, moratorium or other similar laws affecting
      creditors’ rights generally, and subject to general equity principles and
      to limitations on availability of equitable relief, including specific
      performance.

              

      

       

      
        	
                6.  

              	
                The
      Company’s authorized capital stock consists of (a) [_______________]
      ([___________]) shares of Common Stock, par value $0.0001 per share, and
      (b) ten million (10,000,000) shares of Preferred Stock, par value
      $0.0001 per share. The Shares have been duly authorized and, when issued
      and paid for by the Purchasers pursuant to the Purchase Agreement, will be
      validly issued, fully paid and nonassessable. The holders of outstanding
      shares of capital stock of the Company are not entitled to preemptive
      rights under the Company’s Amended and Restated Certificate of
      Incorporation or Amended and Restated Bylaws, the Certificate of
      Designation or Delaware law or, to our knowledge, rights of first refusal
      or other similar rights to subscribe for the Shares (other than rights
      which have been waived in writing or otherwise
  satisfied).

              

      

       

      
        	
                7.  

              	
                The
      execution and delivery of the Financing Agreements and the issuance of the
      Shares pursuant thereto do not violate any provision of the Company’s
      Amended and Restated Certificate of Incorporation, Amended and Restated
      Bylaws or the Certificate of Designation, do not constitute a default
      under, a material breach of or result in any acceleration of rights under
      any Material Agreement and do not violate (a) any governmental statute,
      rule or regulation that in our experience is typically applicable to
      transactions of the nature contemplated by the Financing Agreements or (b)
      any order, writ, judgment, injunction, decree, determination or award
      which has been entered against the Company and of which we are
      aware.

              

      

       

      
        
          
            
              
                [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

              

               

            

            
               

              
                

              

            

            
               

            

          

        

         

      

      
        	
                8.  

              	
                To
      our knowledge, there is (i) no action, suit or proceeding by or before any
      court or other governmental agency, authority or body or any arbitrator
      pending or overtly threatened against the Company or its properties by a
      third party that questions the validity of the Financing Agreements or of
      a character required to be disclosed in the SEC Reports as required by the
      Securities Act and the rules thereunder and (ii) no indenture, contract,
      lease, mortgage, deed of trust, note agreement, loan or other agreement or
      instrument of a character required to be filed as an exhibit to the SEC
      Reports, which is not filed as required by the Securities Act and the
      rules thereunder.

              

      

      

      
        	
                9.  

              	
                All
      consents, approvals, authorizations, or orders of, and filings,
      registrations and qualifications with any U.S. Federal or California
      regulatory authority or governmental body required for the issuance of the
      Shares have been made or obtained, except for the filing of a Form D
      pursuant to Securities and Exchange Commission Regulation
    D.

              

      

       

      
        	
                10.  

              	
                The
      offer and sale of the Shares are exempt from the registration requirements
      of the Securities Act, subject to the timely filing of a Form D pursuant
      to Securities and Exchange Commission Regulation
  D.

              

      

       

      
        	
                11.  

              	
                The
      Company is not, and, after giving effect to the offering and sale of the
      Shares and the application of the proceeds thereof, will not be an
      “investment company” as defined in the Investment Company
    Act.

              

      

       

      
        	
                12.  

              	
                To
      our knowledge, there are no written contracts, agreements or
      understandings between the Company and any person granting such person the
      right (other than rights which have been waived in writing or otherwise
      satisfied) to require the Company to include any securities of the Company
      in any registration statement contemplated by Section 2 of the Investor
      Rights Agreement.

              

      

    

     

    
      
        
          
            
              [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

            

             

          

          
             

            
              

            

          

          
             

          

        

      

       

    

    EXHIBIT
F

     

    Form
of Irrevocable Transfer Agent Instructions

     

    As of
April __, 2009

     

    American
Stock Transfer & Trust Company

    6201 -
15th Avenue

    Brooklyn,
N.Y.  11219

    Attn:  _________________

     

    Ladies
and Gentlemen:

     

    Reference is made to that certain
Securities Purchase Agreement, dated as of March 31, 2009 (the “Agreement”),
by and among Sunesis Pharmaceuticals, Inc., a Delaware corporation (the “Company”),
and the purchasers named on the signature pages thereto (collectively, such
purchasers and their permitted transferees, the “Holders”),
pursuant to which, among other things, (a) the Company is issuing to certain
Holders in one or more closings units (the “Units”),
consisting of shares of the Series A Preferred Stock of the Company, par value
$0.0001 per share (the “Preferred
Stock”), that are convertible into shares of the common stock of the
Company, par value $0.0001 per share (the “Common
Stock”), and warrants (the “Warrants”)
that are exercisable for Common Stock and (b) the Company may issue at a
subsequent closing to the Holders shares of Common Stock (all shares of Common
Stock issuable directly or indirectly pursuant to the Agreement being referred
to as the “Securities”).

     

    This letter shall serve as our
irrevocable authorization and direction to you (provided that you are the
transfer agent of the Company at such time and the conditions set forth in this
letter are satisfied), subject to any stop transfer instructions that we may
issue to you from time to time, if any:

     

    (i)            to
issue certificates representing shares of Common Stock upon transfer or resale
of the Securities;

    

    (ii)           to
issue shares of Common Stock upon conversion of the Preferred Stock by a Holder
thereof (or by such Holder’s designee) from time to time upon delivery to you of
a properly completed and duly executed Conversion Notice, in the form attached
hereto as Annex I, which
has been acknowledged by the Company as indicated by the signature of a duly
authorized officer of the Company thereon, or, in the alternative, upon
confirmation to you by the Company of the conversion of the Preferred Stock;
and

    

    (iii)            to
issue shares of Common Stock upon the exercise of the Warrants issued to the
Holder thereof (or to such Holder’s designee) from time to time upon delivery to
you of a properly completed and duly executed Exercise Form, in the form
attached hereto as Annex II, which
has been acknowledged by the Company as indicated by the signature of a duly
authorized officer of the Company thereon together with indication of receipt of
the exercise price therefor.

    
      
        
          [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

        

         

      

      
         

        
          

        

      

      
         

      

    

     

    You acknowledge and agree that so long
as you have received (a) written confirmation from the Company’s legal
counsel that a registration statement covering resales of the Securities has
been declared effective by the Securities and Exchange Commission (the “Commission”)
under the Securities Act of 1933, as amended (the “Securities
Act”), a copy of such registration statement and a completed and signed
certificate from a Holder confirming the sale or transfer of the Securities
pursuant to such effective registration statement, (b) written confirmation from
the Company’s legal counsel that the Securities are eligible for sale in
conformity with Rule 144 under the Securities Act (“Rule 144”)
and customary documentation from a Holder’s broker with respect to a sale
pursuant to Rule 144 or (c) written confirmation from the Company’s legal
counsel that the Securities are eligible for sale in conformity with
Rule 144 under the Securities Act without being subject to the volume or
other restrictions thereunder, then, unless otherwise required by law, within
five (5) business days of delivery by a Holder to the Company or to you
(with concurrent notice to the Company) of a notice of sale and documentation
required pursuant to clause (a) or (b) above, as applicable, or a request from a
Holder for the issuance of an unlegended certificate in the event that the
Securities are eligible for sale in conformity with Rule 144 under the
Securities Act without being subject to the volume or other restrictions
thereunder, together with a legended certificate representing such Securities
(endorsed or with stock powers attached, signatures guaranteed, and otherwise in
form necessary to affect the reissuance and/or transfer), you shall issue the
certificate(s) representing the Securities registered in the names of the
purchaser of such Securities or the Holder, as the case may be, and such
certificates shall not bear any legend restricting transfer of the Securities
thereby and should not be subject to any stop-transfer restriction. To the
extent a Holder is participating in The Depository Trust Company (“DTC”) Fast
Automated Securities Transfer Program, upon the request of the Holder, you are
authorized, in lieu of issuing certificates representing the Securities, to
credit the number of shares of Common Stock to which the the Holder shall be
entitled to the Holder’s or its designee’s balance account with DTC through its
Deposit Withdrawal At Custodian system.

     

    In the event that you have not received
the documentation required pursuant to clause (a) or (b) of the immediately
preceding paragraph or such Securities are not eligible for sale in conformity
with Rule 144 under the Securities Act without being subject to the volume
or other restrictions thereunder, then the certificates for such Securities
shall bear the following legend:

     

    THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), OR APPLICABLE STATE SECURITIES LAWS.  THE
SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED EXCEPT AS
PROVIDED BY ARTICLE IV OF THAT CERTAIN SECURITIES PURCHASE AGREEMENT, DATED AS
OF MARCH [__], 2009, BY
AND AMONG SUNESIS PHARMACEUTICALS, INC. AND THE PURCHASERS IDENTIFIED ON THE
SIGNATURE PAGES THERETO.

     

                    Please
be advised that the Holders are relying upon this letter as an inducement to
enter into the Agreement and, accordingly, each Holder is a third party
beneficiary to these instructions.

     

    THE FOREGOING INSTRUCTIONS SUPERSEDE
ANY PRIOR INSTRUCTIONS YOU HAVE RECEIVED FROM THE COMPANY WITH RESPECT TO THE
MATTERS SET FORTH HEREIN.

     

                     Please
execute this letter in the space indicated to acknowledge your agreement to act
in accordance with these instructions.

     

    
      
        
          
            
              
                	 	
                        Very
      truly yours,

                      
	 	 
      
	 	
                        SUNESIS
      PHARMACEUTICALS, INC.

                      
	 	 
      	 
      
	 	 
      	 
      
	 	
                        By:

                      	
                         

                      
	 	
                        Name:

                      	
                         

                      
	 	
                        Title:

                      	
                         

                      

              

            

          

        

      

    

    

    
      
        
          [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

        

         

      

      
         

        
          

        

      

      
         

      

    

    Annex I

     

    Form
of Conversion Notice

     

    (To be
executed by the Holder to convert shares of Series A Preferred
Stock

    into
shares of Common Stock)

     

    SUNESIS
PHARMACEUTICALS, INC.

    CONVERSION
NOTICE

     

    Reference
is made to the Series A Preferred Stock, par value $0.0001 per share (the “Preferred
Stock”), of Sunesis Pharmaceuticals, Inc., a Delaware corporation (the
“Company”).  In
accordance with and pursuant to the provisions of the Certificate of Designation
of the Series A Preferred Stock (the “Certificate of
Designation”) filed and currently effective with the Delaware Secretary
of State, the undersigned hereby elects to convert the Preferred Stock indicated
below into shares of the Common Stock of the Company, par value $0.0001 per
share (the “Common
Stock”), as of the date specified below.  Each share of
Preferred Stock is convertible into ten (10) shares of Common Stock, subject to
adjustment in accordance with the terms of the Certificate of
Designation.

    
       

      
        
          
            
              
                
                  	
                          Date of Conversion:  

                        	 
      

                

                 

                
                  
                    
                      
                        
                          
                            
                              	
                                      Aggregate Number of Shares to be Converted: 

                                    	 
      

                            

                          

                        

                      

                    

                  

                

              

            

          

        

         

      

    

    Please
confirm the following information:

    
       

      
        
          
            
              
                
                  	
                          Number of Shares of Common Stock to be issued:  

                        	 
      

                

                 

                
                  
                    
                      
                        
                          
                            
                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    Please
issue the shares of Common Stock  into which the Preferred Stock is
being converted in the following name and to the following address:

    
      
         

        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          	Issue to: 	 
	 	 
	
                                                                  Address:  

                                                                	 
      
	 	 
	 	 

                                                        

                                                         

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              
                                                                
                                                                  
                                                                    
                                                                      
                                                                        	
                                                                                Facsimile Number:  

                                                                              	 
      

                                                                      

                                                                       

                                                                    

                                                                    
                                                                      
                                                                        
                                                                          
                                                                            
                                                                              
                                                                                
                                                                                  
                                                                                    
                                                                                      	
                                                                                              EIN (Federal Tax Id) Number:  

                                                                                            	  

                                                                                    

                                                                                     

                                                                                    
                                                                                      
                                                                                        
                                                                                          
                                                                                            
                                                                                              
                                                                                                	
                                                                                                        DTC Participant Number and Name (if electronic book entry transfer):  

                                                                                                      	  	 

                                                                                              

                                                                                               

                                                                                            

                                                                                          

                                                                                        

                                                                                      

                                                                                    

                                                                                  

                                                                                

                                                                              

                                                                            

                                                                          

                                                                        

                                                                      

                                                                    

                                                                  

                                                                

                                                              

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      
        
          	
                  Account Number  (if electronic book entry transfer):  

                	  	 

        

      

    

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              	
                                      Authorization:

                                    	 	 
      	 
	
                                      By:  

                                    	 	 
      	 
	
                                      Title:

                                    	 	 
      	 
	 	 	 	 
	
                                      Dated:____________________________________________

                                    	 
      	 

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
        
          [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

        

         

      

      
         

        
          

        

      

      
         

      

    

     

    ACKNOWLEDGEMENT

     

                    The
Company hereby acknowledges this Conversion Notice and hereby directs American
Stock Transfer & Trust Company to issue the above indicated number of shares
of Common Stock in accordance with the Irrevocable Transfer Agent Instructions
dated April __, 2009, from the Company and acknowledged and agreed to by
American Stock Transfer & Trust Company.

    

    
      
        
          
            
              
                	
                        SUNESIS
      PHARMACEUTICALS, INC.

                      
	 
      	 
      
	
                        By:

                      	
                         

                      
	
                        Name:

                      	
                         

                      
	
                        Title:

                      	
                         

                      

              

            

          

        

      

    

    
      
        
          [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

        

         

      

      
         

        
          

        

      

      
         

      

    

    

      Annex II

       

      Form
of Exercise Form

       

      (To be
executed by the Holder to exercise the right to purchase shares

      of Common
Stock under the Warrants)

      

      TO:  SUNESIS
PHARMACEUTICALS, INC.

       

      CHECK
THE APPLICABLE BOX:

       

      
        
          
            	
                     ̈

                  	
                    Cash
      Exercise

                  
	 
      	 
      
	 
      	
                    The
      undersigned hereby irrevocably exercises the attached warrant (the “Warrant”) with respect
      to ________shares of Common Stock, par value $0.0001 per share (the “Common Stock”), of
      Sunesis Pharmaceuticals, Inc., a Delaware corporation (the “Company”).

                  
	 	 
	
                     ̈

                  	
                    Cashless
      Exercise

                  
	 
      	 
      
	 
      	
                    The
      undersigned hereby irrevocably exercises the Warrant with respect to
      _______ shares of Common Stock of the Company and herewith makes payment
      of the Exercise Price with respect to such shares in full, all in
      accordance with the conditions and provisions of said
    Warrant.

                  

          

           

        

      

      
        	
                1.

              	
                The
      undersigned agrees not to sell, transfer, assign, pledge, hypothecate or
      otherwise dispose of any of the Common Stock obtained on Exercise of the
      Warrant, except in accordance with applicable securities laws and the
      provisions of Section 4.1 of the Purchase
  Agreement.

              

      

       

      
        	
                2.

              	
                The
      undersigned requests that a warrant representing any unexercised portion
      hereof be issued, pursuant to the Warrant in the name of the undersigned
      and delivered to the undersigned at the address set forth
      below.

              

      

       

      
        	
                3.

              	
                Capitalized
      terms used but not otherwise defined in this Exercise Form shall have the
      meaning ascribed thereto in the
Warrant.

              

      

       

      
        	
                4.

              	
                In
      the event of any conflict between the term of this Exercise Form and any
      provisions of this Warrant, the terms of the Warrant shall
      govern.

              

      

       

      
        
          
            [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

          

           

        

        
           

          
            

          

        

        
           

        

      

      
        
          	
                  5. 

                	
                  Please
      issue the Common Stock to be issued upon Exercise of this Warrant in the
      following name and to the following
address:

                

        

      

       

      Issue
to:_____________________________________________________________________________________ 

       

      Address:_____________________________________________________________________________________   

      
Facsimile
Number:_____________________________________________________________________________

      

      EIN
(Federal Tax Id)
Number:____________________________________________________________________

       

      DTC
Participant Number and Name (if electronic book entry
transfer):____________________________________

      

      Account
Number  (if electronic book entry
transfer):__________________________________________________

       

      ________________________________________________________________________________________

      

      Facsimile
Number:_____________________________________________________________________________

      

      Dated: _____________________

       

      
        	 
      
	
                Signature

                 

              
	 
      
	
                Print
      Name

                 

              
	 
      
	
                Address

              

      

       

      NOTICE

       

      The
signature to the foregoing Exercise Form must correspond to the name as written
upon the face of the attached Warrant in every particular, without alteration or
enlargement or any change whatsoever.

      
        
          
            [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

          

           

        

        
           

          
            

          

        

        
           

        

      

      ACKNOWLEDGEMENT

       

                      The
Company hereby acknowledges this Exercise Form and receipt of the appropriate
exercise price and hereby directs American Stock Transfer & Trust Company to
issue the above indicated number of shares of Common Stock in accordance with
the Irrevocable Transfer Agent Instructions dated April __, 2009, from the
Company and acknowledged and agreed to by American Stock Transfer & Trust
Company.

      

      
        
          
            
              
                
                  	 	
                          SUNESIS
      PHARMACEUTICALS, INC.

                        
	 	 
      	 
      
	 	
                          By:

                        	
                           

                        	 
      
	 	
                          Name: 

                        	
                           

                        	 
      
	 	
                          Title:

                        	
                           

                        	 
      

                

              

            

          

        

      

       

      
        
          
            [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

          

           

        

        
           

          
            

          

        

        
           

        

      

      EXHIBIT
G

      

      Form
of Secretary’s Certificate

      

      The
undersigned hereby certifies that she is the duly elected, qualified and acting
Secretary of Sunesis Pharmaceuticals, Inc., a Delaware corporation (the “Company”),
and that as such she is authorized to execute and deliver this certificate in
the name and on behalf of the Company and in connection with the Securities
Purchase Agreement, dated as of March 31, 2009, by and among the Company and the
purchasers party thereto (the “Agreement”),
and further certifies in her official capacity, in the name and on behalf of the
Company, the items set forth below.  Capitalized terms used but not
otherwise defined herein shall have the meaning set forth in the
Agreement.

       

      
        	
                1.

              	
                Attached
      hereto as Exhibit A is a
      true, correct and complete copy of the resolutions duly adopted by the
      Board at a meeting of the Board held on March 30, 2009.  Such
      resolutions have not in any way been amended, modified, revoked or
      rescinded, and have been in full force and effect since their adoption up
      to and including the date hereof and are now in full force and
      effect.

              

      

       

      
        	
                2.

              	
                Attached
      hereto as Exhibit B is a
      true, correct and complete copy of the Amended and Restated Certificate of
      Incorporation of the Company, together with any and all certificates of
      designation and amendments thereto currently in effect, and no action has
      been taken to further amend, modify or repeal such Amended and Restated
      Certificate of Incorporation, the same being in full force and effect in
      the attached form as of the date
hereof.

              

      

       

      
        	
                3.

              	
                Attached
      hereto as Exhibit C is a
      true, correct and complete copy of the Amended and Restated Bylaws of the
      Company and any and all amendments thereto currently in effect, and no
      action has been taken to further amend, modify or repeal such Bylaws, the
      same being in full force and effect in the attached form as of the date
      hereof.

              

      

       

      
        	
                4.

              	
                Each
      person listed below has been duly elected or appointed to the position(s)
      indicated opposite his name and is duly authorized to sign the Agreement
      and each of the other Transaction Documents on behalf of the Company, and
      the signature appearing opposite such person’s name below is such person’s
      genuine signature.

              

      

       

      
        
          
            
              
                
                  
                    	
                            Name

                          	 
      	
                            Position

                          	 
      	
                            Signature

                          
	 	 	 	 	 
	
                            Daniel
      N. Swisher, Jr.

                          	 
      	
                            Chief
      Executive Officer and President

                          	 
      	
                             

                          
	 
      	 
      	 
      	 
      	 
      
	
                            Eric
      H. Bjerkholt

                          	 
      	
                            Senior
      Vice President, Corporate Development
      and Finance, Chief Financial
      Officer

                          	 
      	
                             

                          
	 
      	 
      	 
      	 
      	 
      
	
                            Valerie
      L. Pierce

                          	
                              

                          	
                            Senior
      Vice President, General Counsel and
      Corporate Secretary

                          	
                              

                          	
                             

                          

                  

                

              

            

          

        

      

       

      
        
          
            [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

          

           

        

        
           

          
            

          

        

        
           

        

      

      IN WITNESS WHEREOF, the
undersigned has executed this certificate this ___ day of [______], 20[__].
[Insert First Unit Closing Date, Second Unit Closing Date, or Common Equity
Closing Date, as applicable, in the foregoing sentence.]

       

      
        
          
            	 
      	 
      
	 
      	
                    Valerie
      L. Pierce

                  
	 
      	
                    Senior
      Vice President, General Counsel and

                    Corporate
      Secretary

                  

          

        

      

       

      I, Daniel
N. Swisher, Jr., Chief Executive Officer and President of the Company, hereby
certify that Valerie L. Pierce is the duly elected, qualified and acting Senior
Vice President, General Counsel and Corporate Secretary of the Company and that
the signature set forth above is her true signature.

      

      
        
          
            	 
      	 
      
	 
      	
                    Daniel
      N. Swisher, Jr.

                  
	 
      	
                    Chief
      Executive Officer and
President

                  

          

        

      

       

      
        
          
            [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

          

           

        

        
           

          
            

          

        

        
           

        

      

      EXHIBIT
A

      

      Board
Resolutions

      
        
          
            [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

          

           

        

        
           

          
            

          

        

        
           

        

      

      EXHIBIT
B

      

      Amended
and Restated Certificate of Incorporation

      
        
          
            [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

          

           

        

        
           

          
            

          

        

        
           

        

      

      EXHIBIT
C

      

      Amended
and Restated Bylaws

      
        
          
            [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

          

           

        

        
           

          
            

          

        

        
           

        

      

      EXHIBIT
H

       

      Form
of Officer’s Certificate

      

      The undersigned, the Chief Executive
Officer and President of Sunesis Pharmaceuticals, Inc., a Delaware corporation
(the “Company”),
pursuant to Section [5.1(f)][5.3(g)][5.5(h)] of the Securities Purchase
Agreement, dated as of March 31, 2009, by and among the Company and the
purchasers signatory thereto (the “Agreement”),
hereby represents, warrants and certifies to such purchasers as follows
(capitalized terms used but not otherwise defined herein shall have the meaning
set forth in the Agreement):

       

      
        	
                1.

              	
                The
      representations and warranties of the Company contained in the Purchase
      Agreement are true and correct [in all material respects (except for those
      representations and warranties which are qualified as to materiality, in
      which case such representations and warranties are true and correct in all
      respects)]1 as of the date when made and as of the [First Unit Closing
      Date][Second Unit Closing Date][Common Equity Closing Date], as though
      made on and as of such date, except for such representations and
      warranties that speak as of a specific date, which shall have been true
      and correct [in all material respects (except for those representations
      and warranties which are qualified as to materiality, in which case such
      representations and warranties are true in correct in all respects)]2 as
      of such date.

              

      

       

      
        	
                2.

              	
                The
      Company has performed, satisfied and complied in all material respects
      with all covenants, agreements and conditions required by the Transaction
      Documents to be performed, satisfied or complied with by it at or prior to
      the [First Unit Closing][Second Unit Closing][Common Equity
      Closing].

              

      

       

      
        	
                3.

              	
                The
      Company has obtained in a timely fashion all consents, permits, approvals,
      registrations and waivers necessary for the consummation of the purchase
      and sale of the [Units at the [First Unit Closing][Second Unit
      Closing]][Common Stock at the Common Equity Closing] (including, without
      limitation, all Required Approvals[, other than the Stockholder
      Approval,]3 and any other necessary regulatory and third party consents
      and approvals), all of which shall be and remain so long as necessary in
      full force and effect.

              

      

       

      
        	
                4.

              	
                [A
      Certificate of Amendment to the Company’s Amended and Restated Certificate
      of Incorporation (or, in lieu thereof, a new Amended and Restated
      Certificate of Incorporation) containing the amendments to the Company’s
      Amended and Restated Certificate of Incorporation described on Exhibit I to the Purchase
      Agreement has been duly filed by the Company with the Secretary of State
      of the State of Delaware in accordance with the DGCL, and the Purchasers
      have received evidence of such filing in form and substance reasonably
      satisfactory to the Purchasers.]4

              

      

       

      
        
          

      

      
        
          1 To be
included at Second Unit Closing and Common Equity Closing only. 

        

      

      
        
          2 To be
included at Second Unit Closing and Common Equity Closing only. 

        

      

      
        
          3 To be
included at First Unit Closing only. 

        

      

      
        
          4 To be
included at Common Equity Closing only.

        

      

      
        
          
            [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

          

           

        

        
           

          
            

          

        

        
           

        

      

      

      
        	
                5.

              	
                The
      Company has delivered the Company Deliverables in accordance with Section
      [2.2(a)][2.2(b)][2.2(c)].

              

      

       

      
        
          
            [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

          

           

        

        
           

          
            

          

        

        
           

        

      

      IN WITNESS WHEREOF, the
undersigned has executed this certificate this ___ day of [______], 200[__].
[Insert First Unit Closing Date, Second Unit Closing Date, or Common Equity
Closing Date, as applicable, in the foregoing sentence.]

      

      
        
          
            
              	 
      	 
      	 
      
	 
      	
                      Daniel
      N. Swisher, Jr.

                    	 
      
	 
      	
                      Chief
      Executive Officer and President

                    	 
      

            

          

        

      

      
        
          
            [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

          

           

        

        
           

          
            

          

        

        
           

        

      

      EXHIBIT
I

       

      Description
of Charter Amendments

      

      The following is a description of
proposed amendments to the Amended and Restated Certificate of Incorporation of
the Company, originally filed with the Secretary of State of the State of
Delaware on September 30, 2005 (the “Charter”),
subject to approval by the stockholders of the Company (capitalized terms used
and not otherwise defined herein that are defined in the Securities Purchase
Agreement, dated as of March 31, 2009, by and among the Company and the
Purchasers identified therein, to which this “Description of Charter Amendments”
is attached as Exhibit
I (the “Agreement”),
shall have the meanings given such terms in the Agreement):

      

      
        	
                 
      

              	
                ·

              	
                Increase
      the number of authorized shares of (i) Common Stock from one hundred
      million (100,000,000) shares to four hundred million (400,000,000) shares
      and (ii) Preferred Stock from five million (5,000,000) shares to ten
      million (10,000,000) shares;

              

      

      

      
        	
                 
      

              	
                ·

              	
                Amend
      the Charter, as necessary, to comply with applicable listing standards of
      the Company’s Principal Trading Market, including effecting a reverse
      split of the Common Stock and Preferred Stock on a ratio determined by the
      Board; and

              

      

      

      
        	
                 
      

              	
                ·

              	
                Make
      such other changes to the Charter as deemed necessary or appropriate by
      the officers of the Company, in consultation with legal counsel, and as
      agreed to by the Lead Purchasers, to effectuate the transactions
      contemplated under the Agreement or the other Transaction
      Documents.

              

      

       

      
        
          
            [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

          

           

        

        
           

          
            

          

        

        
           

        

      

      EXHIBIT
J

      

      Summary
of Terms of Retention Plan

      

      Carve-out
pool to be established for Sunesis employees based on net proceeds upon a change
of control:

      

      
        
          
            
              	 
      	 
      	
                      Transaction Value

                    	 
      	
                      Carve Out Pool

                    
	 
      	 
      	 
      	 
      	 
      
	
                      o

                    	 
      	
                      ≤$30M:

                    	 
      	
                      10.5%

                    
	
                      o

                    	 
      	
                      $30M
      to $45M:

                    	 
      	
                      11.0%

                    
	
                      o

                    	 
      	
                      $45M
      to $60M:

                    	 
      	
                      11.5%

                    
	
                      o

                    	
                        

                    	
                      ≥$60M:

                    	
                        

                    	
                      12.0%

                    

            

          

        

      

      

      Allocation
among Sunesis participants:

      

      
        
          
            
              	
                      Chairman
      of the Board    

                    	
                      3%

                    
	 
      	 
      
	
                      CEO 

                    	
                      20%

                    
	 
      	 
      
	
                      SVP,
      Finance and SVP, R&D

                    	
                      12.5%
      each

                    
	 
      	 
      
	
                      VPs

                    	
                      [
      * ]

                    
	 
      	 
      
	
                      Employees
      at or above the level of Associate Director

                    	
                      [
      * ]

                    
	 
      	 
      
	
                      Employees
      below the level of Associate Director

                    	
                      [
      * ]

                    

            

          

        

      

      

      Existing
executive severance benefits agreements for continuing executives will be
modified to provide that, in the event of a termination in connection with a
change-of-control transaction, the executive will get the greater of a) the
amount currently provided for a non-change-of-control “Covered Termination”
under his or her existing executive severance benefits agreement and b) the
proceeds due each individual executive based on overall net transaction value
and individual allocation percentage pursuant to the Retention
Plan.

      
        
          
            [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

          

           

        

        
           

          
            

          

        

        
           

        

      

       

      Existing
severance benefit plan for non-executives will be modified to provide that, in
the event of a termination in connection with a change-of-control transaction,
the non-executive will get the greater of a) the amount currently provided for a
non-change-of-control “Qualifying Termination” under the existing severance
benefit plan and b) the proceeds due each individual non-executive based on
overall net transaction value and individual allocation percentage determined by
the Compensation Committee.

      

      If
additional executives are employed by Sunesis after the First Unit Closing, the
then existing allocations among existing plan participants and participant pools
will be reallocated by the Compensation Committee on a proportional basis;
provided, however,  that the total pool size under the Retention Plan
shall not increase.

      

      Retention
Plan to remain in effect until the earlier of:

      

      
        	
                 
      

              	
                o

              	
                conclusion
      of a change-of-control transaction and payout under the Retention Plan
      (can be paid out in stock if the change-of-control transaction is a stock
      deal); or

              

      

      
        	
                 
      

              	
                o

              	
                six
      months following the earlier of (a) the Common Equity Closing or the
      (b)  conversion of all outstanding preferred
    stock.

              

      

      
        
          
            [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

          

           

        

        
           

          
            

          

        

        
           

        

      

      

      SCHEDULE
I TO SPA (allocations)

       

      Purchaser
Commitments

      

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              	 
      	 	
                                      Total

                                    	 	 	
                                      First Unit Closing

                                    	 	 	
                                      Second Unit Closing

                                    	 	 	
                                      Total Units

                                    	 	 	
                                      Common Equity Closing

                                    	 	 	 	 
	
                                      Financing

                                    	 	$	43,500,000	 	 	$	10,000,000	 	 	$	5,000,000	 	 	$	15,000,000	 	 	$	28,500,000	 	 	 	 
	 
      	 	 	 	 	 	 	23.0	%	 	 	11.5	%	 	 	34.5	%	 	 	65.5	%	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                      Investor

                                    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                      Bay
      City Capital

                                    	 	$	10,000,000	 	 	$	2,298,851	 	 	$	1,149,425	 	 	$	3,448,276	 	 	$	6,551,724	 	 	$	10,000,000	 
	
                                      NEA

                                    	 	$	10,000,000	 	 	$	2,298,851	 	 	$	1,149,425	 	 	$	3,448,276	 	 	$	6,551,724	 	 	$	20,000,000	 
	
                                      Merlin
      Nexus

                                    	 	$	5,100,000	 	 	$	1,172,414	 	 	$	586,207	 	 	$	1,758,621	 	 	$	3,341,379	 	 	$	25,100,000	 
	
                                      Alta
      Partners

                                    	 	$	5,000,000	 	 	$	1,149,425	 	 	$	574,713	 	 	$	1,724,138	 	 	$	3,275,862	 	 	$	30,100,000	 
	
                                      Nextech
      Venture

                                    	 	$	5,000,000	 	 	$	1,149,425	 	 	$	574,713	 	 	$	1,724,138	 	 	$	3,275,862	 	 	$	35,100,000	 
	
                                      Vision
      Capital Advisors

                                    	 	$	3,000,000	 	 	$	689,655	 	 	$	344,828	 	 	$	1,034,483	 	 	$	1,965,517	 	 	$	38,100,000	 
	
                                      Caxton
      Advantage

                                    	 	$	2,500,000	 	 	$	574,713	 	 	$	287,356	 	 	$	862,069	 	 	$	1,637,931	 	 	$	40,600,000	 
	
                                      Venrock

                                    	 	$	2,000,000	 	 	$	459,770	 	 	$	229,885	 	 	$	689,655	 	 	$	1,310,345	 	 	$	42,600,000	 
	
                                      OpusPoint

                                    	 	$	500,000	 	 	$	114,943	 	 	$	57,471	 	 	$	172,414	 	 	$	327,586	 	 	$	43,100,000	 
	
                                      Swisher
      Revocable Trust

                                    	 	$	200,000	 	 	$	45,977	 	 	$	22,989	 	 	$	68,966	 	 	$	131,034	 	 	$	43,300,000	 
	
                                      Bjerkholt/Hahn
      Family Trust

                                    	 	$	100,000	 	 	$	22,989	 	 	$	11,494	 	 	$	34,483	 	 	$	65,517	 	 	$	43,400,000	 
	
                                      Steve
      Ketchum

                                    	 	$	100,000	 	 	$	22,989	 	 	$	11,494	 	 	$	34,483	 	 	$	65,517	 	 	$	43,500,000	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
      	 	$	43,500,000	 	 	$	10,000,000	 	 	$	5,000,000	 	 	$	15,000,000	 	 	$	28,500,000	 	 	 	 	 

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

       

      
        
          
            [
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00157-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00157-of-00352.parquet"}]]