Document:

Exhibit 10.2

 

EXECUTION
COPY

 

REGISTRATION
RIGHTS AGREEMENT

 

This Registration Rights Agreement (the “Agreement”)
is made and entered into as of this 5th day of April, 2006 by and among
Tapestry Pharmaceuticals, Inc., a Delaware corporation (the “Company”),
and the “Investors” named in that certain Purchase Agreement by and among the
Company and the Investors (the “Purchase Agreement”).

 

The parties hereby agree as follows:

 

1.               Certain
Definitions.

 

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

 

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

 

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

 

“Common Stock” shall mean the Company’s
common stock, par value $0.0075 per share, and any securities into which such
shares may hereinafter be reclassified.

 

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

 

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

 

“Register,” “registered” and “registration”
refer to a registration made by preparing and filing a Registration Statement
or similar document in compliance with the 1933 Act (as defined below), and the
declaration or ordering of effectiveness of such Registration Statement or
document.

 

“Registrable Securities” shall mean (i) the
Shares, (ii) the Warrant Shares and (iii) any other securities issued
or issuable with respect to or in exchange for Registrable Securities;
provided, that, a security shall cease to be a Registrable Security upon (A) sale
pursuant to a Registration Statement or Rule 144 under the 1933 Act, or (B) such
security becoming eligible for sale by the Investors pursuant to Rule 144(k).

 

“Registration Statement” shall mean
any registration statement of the Company filed under the 1933 Act that covers
the resale of any of the Registrable Securities pursuant to the provisions of
this Agreement, amendments and supplements to such Registration Statement,
including post-effective amendments, all exhibits and all material incorporated
by reference in such Registration Statement.

 

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

 

“SEC” means the U.S. Securities and
Exchange Commission.

 

 

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

 

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

 

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

 

“Warrants” means, the warrants to
purchase shares of Common Stock issued to the Investors pursuant to the
Purchase Agreement, the form of which is attached to the Purchase
Agreement as Exhibit A.

 

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

 

2.               Registration.

 

(a)                                  Registration
Statements.

 

(i)                                     Promptly
following the closing of the purchase and sale of the securities contemplated
by the Purchase Agreement (the “Closing Date”) but no later than thirty (30)
days after the Closing Date (the “Filing Deadline”), the Company shall prepare
and file with the SEC one Registration Statement on Form S-3 (or, if Form S-3
is not then available to the Company, on such form of registration
statement as is then available to effect a registration for resale of the
Registrable Securities, subject to the Required Investors’ consent), covering
the resale of the Registrable Securities in an amount at least equal to the
Shares and the Warrant Shares. Such Registration Statement shall include the
plan of distribution attached hereto as Exhibit A. Such
Registration Statement also shall cover, to the extent allowable under the 1933
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. Such Registration Statement shall not include any shares of Common
Stock or other securities for the account of any other holder without the prior
written consent of the Required Investors. The Registration Statement (and each
amendment or supplement thereto, and each request for acceleration of
effectiveness thereof) shall be provided in accordance with Section 3(c) to
the Investors and their counsel prior to its filing or other submission. If a
Registration Statement covering the Registrable Securities is not filed with
the SEC on or prior to the Filing Deadline, the Company will make pro rata
payments to each Investor, as liquidated damages and not as a penalty, in an
amount equal to 1.5% of the aggregate amount invested by such Investor for each
30-day period or pro rata for any portion thereof following the Filing Deadline
for which no Registration Statement is filed with respect to the Registrable
Securities. Such payments shall constitute the Investors’ exclusive monetary
remedy for such events, but shall not affect the right of the Investors to seek
injunctive relief. Such payments shall be made to each Investor in cash.

 

(ii)                                  Additional
Registrable Securities. Upon the written demand of any Investor and upon any
change in the Warrant Price (as defined in the Warrant) such that additional
shares of Common Stock become issuable upon the exercise of the Warrants, the
Company shall prepare and file with the SEC one or more Registration Statements
on Form S-3 or amend the Registration Statement filed pursuant to clause (i) above,
if such Registration Statement has not previously been declared effective (or,
if Form S-3 is not then available to the 

 

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Company, on such form of registration
statement as is then available to effect a registration for resale of such
additional shares of Common Stock (the “Additional Shares”), subject to the
Required Investors’ consent) covering the resale of the Additional Shares, but
only to the extent the Additional Shares are not at the time covered by an
effective Registration Statement. Such Registration Statement also shall cover,
to the extent allowable under the 1933 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 Additional Shares. Such Registration Statement
shall not include any shares of Common Stock or other securities for the
account of any other holder without the prior written consent of the Required
Investors. The Registration Statement (and each amendment or supplement
thereto, and each request for acceleration of effectiveness thereof) shall be
provided in accordance with Section 3(c) to the Investors and their
counsel prior to its filing or other submission. If a Registration Statement
covering the Additional Shares is required to be filed under this Section 2(a)(ii) and
is not filed with the SEC within ten (10) Business Days of the request of
any Investor or upon the occurrence of any of the events specified in this Section 2(a)(ii),
the Company will make pro rata payments to each Investor, as liquidated damages
and not as a penalty, in an amount equal to 1.5% of the aggregate amount
invested by such Investor for each 30-day period or pro rata for any portion
thereof following the date by which such Registration Statement should have
been filed for which no Registration Statement is filed with respect to the
Additional Shares. Such payments shall constitute the Investors’ exclusive
monetary remedy for such events, but shall not affect the right of the
Investors to seek injunctive relief. Such payments shall be made to each
Investor in cash.

 

(b)                                 Expenses.
The Company will pay all expenses associated with each registration, including
filing and printing fees, the Company’s counsel and accounting fees and
expenses, costs associated with clearing the Registrable Securities for sale
under applicable state securities laws, listing fees, reasonable out-of-pocket
fees and expenses of one counsel to the Investors (which fees and expenses
shall not exceed $35,000 in the aggregate) and the Investors’ reasonable out-of-pocket
expenses in connection with the registration, but excluding discounts,
commissions, fees of underwriters, selling brokers, dealer managers or similar
securities industry professionals with respect to the Registrable Securities
being sold.

 

(c)                                  Effectiveness.

 

(i)                                     The
Company shall use commercially reasonable efforts to have the Registration
Statement declared effective as soon as practicable. The Company shall notify
the Investors by facsimile or e-mail as promptly as practicable, and in any
event, within twenty-four (24) hours, after any Registration Statement is
declared effective and shall simultaneously provide the Investors with copies
of any related Prospectus to be used in connection with the sale or other
disposition of the securities covered thereby. If (A)(x) a Registration
Statement covering the Registrable Securities is not declared effective by the
SEC prior to the earlier of (i) five (5) Business Days after the SEC
shall have informed the Company that no review of the Registration Statement
will be made or that the SEC has no further comments on the Registration
Statement or (ii) the 90th day after the Closing Date (the 120th
day if the SEC reviews the Registration Statement), or (y) a Registration
Statement covering Additional Shares is not declared effective by the SEC
within ninety (90) days following the time such Registration Statement was
required to be filed pursuant to Section 2(a)(ii) (120 days 

 

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if the SEC reviews the Registration
Statement), or (B) after a Registration Statement has been declared
effective by the SEC, sales cannot be made pursuant to such Registration
Statement for any reason (including without limitation by reason of a stop
order, or the Company’s failure to update the Registration Statement), but
excluding the inability of any Investor to sell the Registrable Securities
covered thereby due to market conditions and except as excused pursuant to
subparagraph (ii) below, then the
Company will make pro rata payments to each Investor, as liquidated damages and
not as a penalty, in an amount equal to 1.5% of the aggregate amount invested
by such Investor for each 30- day period or pro rata for any portion thereof
following the date by which such Registration Statement should have been
effective (the “Blackout Period”). Such payments shall constitute the Investors’
exclusive monetary remedy for such events, but shall not affect the right of
the Investors to seek injunctive relief. The amounts payable as liquidated
damages pursuant to this paragraph shall be paid monthly within three (3) Business
Days of the last day of each month following the commencement of the Blackout
Period until the termination of the Blackout Period. Such payments shall be
made to each Investor in cash.

 

(ii)                                  For
not more than twenty (20) consecutive days or for a total of not more than
forty-five (45) days in any twelve (12) month period, the Company may delay
the disclosure of material non-public information concerning the Company, by
suspending the use of any Prospectus included in any registration contemplated
by this Section containing such information, the disclosure of which at
the time is not, in the good faith opinion of the Company, in the best
interests of the Company (an “Allowed Delay”); provided, that the Company shall
promptly (a) notify the Investors in writing of the existence of (but in
no event, without the prior written consent of an Investor, shall the Company
disclose to such Investor any of the facts or circumstances regarding) material
non-public information giving rise to an Allowed Delay, (b) advise the
Investors in writing to cease all sales under the Registration Statement until
the end of the Allowed Delay and (c) use commercially reasonable efforts
to terminate an Allowed Delay as promptly as practicable.

 

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

 

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

 

(b)                               prepare
and file with the SEC such amendments and post-effective amendments to the
Registration Statement and the Prospectus as may be necessary to keep the
Registration Statement effective for the Effectiveness Period and to comply
with the provisions of the 1933 Act and the 1934 Act with respect to the
distribution of all of the Registrable Securities covered thereby;

 

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(c)                                provide
copies to and permit counsel designated by the Investors to review each
Registration Statement and all amendments and supplements thereto no fewer than
seven (7) days prior to their filing with the SEC and not file any
document to which such counsel reasonably objects;

 

(d)                               furnish
to the Investors and their legal counsel (i) promptly after the same is
prepared and publicly distributed, filed with the SEC, or received by the
Company (but not later than two (2) Business Days after the filing date,
receipt date or sending date, as the case may be) one (1) copy of any
Registration Statement and any amendment thereto, each preliminary prospectus
and Prospectus and each amendment or supplement thereto, and each letter
written by or on behalf of the Company to the SEC or the staff of the SEC, and
each item of correspondence from the SEC or the staff of the SEC, in each case
relating to such Registration Statement (other than any portion of any thereof
which contains information for which the Company has sought confidential
treatment), and (ii) such number of copies of a Prospectus, including a
preliminary prospectus, and all amendments and supplements thereto and such
other documents as each Investor may reasonably request in order to
facilitate the disposition of the Registrable Securities owned by such Investor
that are covered by the related Registration Statement;

 

(e)                                use
commercially reasonable efforts to (i) prevent the issuance of any stop
order or other suspension of effectiveness and, (ii) if such order is
issued, obtain the withdrawal of any such order at the earliest possible
moment;

 

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

 

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

 

(h)                               promptly
notify the Investors, at any time when a Prospectus relating to Registrable
Securities is required to be delivered under the 1933 Act (including during any
period when the Company is in compliance with Rule 172), upon discovery
that, or upon the happening of any event as a result of which, the Prospectus
included in a Registration Statement, as then in effect, includes an untrue
statement of a material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein not misleading in
light of the circumstances then existing, and at the request of any such
holder,

 

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promptly prepare, file with the SEC pursuant
to Rule 172 and furnish to such holder a supplement to or an amendment of
such Prospectus as may be necessary so that such Prospectus shall not
include an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in light of the circumstances then existing; and

 

(i)                                   otherwise
use commercially reasonable efforts to comply with all applicable rules and
regulations of the SEC under the 1933 Act and the 1934 Act, including Rule 172,
notify the Investors promptly if the Company no longer satisfies the conditions
of Rule 172 and take such other actions as may be reasonably
necessary to facilitate the registration of the Registrable Securities
hereunder; and make available to its security holders, as soon as reasonably
practicable, but not later than the Availability Date (as defined below), an
earnings statement covering a period of at least twelve (12) months, beginning
after the effective date of each Registration Statement, which earnings
statement shall satisfy the provisions of Section 11(a) of the 1933
Act, including Rule 158 promulgated thereunder (for the purpose of this
subsection 3(i), “Availability Date” means the 45th day following the end
of the fourth fiscal quarter that includes the effective date of such
Registration Statement, except that, if such fourth fiscal quarter is the last
quarter of the Company’s fiscal year, “Availability Date” means the 90th day
after the end of such fourth fiscal quarter).

 

(j)                                     With
a view to making available to the Investors the benefits of Rule 144 (or
its successor rule) and any other rule or regulation of the SEC that may at
any time permit the Investors to sell shares of Common Stock to the public
without registration, the Company covenants and agrees to:  (i) make and keep public information
available, as those terms are understood and defined in Rule 144, until
the earlier of (A) six months after such date as all of the Registrable
Securities may be resold pursuant to Rule 144(k) or any other rule of
similar effect or (B) such date as all of the Registrable Securities shall
have been resold; (ii) file with the SEC in a timely manner all reports
and other documents required of the Company under the 1934 Act; and (iii) furnish
to each Investor upon request, as long as such Investor owns any Registrable
Securities, (A) a written statement by the Company that it has complied
with the reporting requirements of the 1934 Act, (B) a copy of the Company’s
most recent Annual Report on Form 10-K or Quarterly Report on Form 10-Q,
and (C) such other information as may be reasonably requested in
order to avail such Investor of any rule or regulation of the SEC that
permits the selling of any such Registrable Securities without registration.

 

4.               Due Diligence
Review; Information. Upon reasonable prior notice, the Company shall make
available, during normal business hours, for inspection and review by the
Investors, advisors to and representatives of the Investors (who may or may not
be affiliated with the Investors and who are reasonably acceptable to the
Company), all financial and other records, all SEC Filings (as defined in the
Purchase Agreement) and other filings with the SEC, and all other corporate
documents and properties of the Company as may be reasonably necessary for
the purpose of such review, and cause the Company’s officers, directors and
employees, within a reasonable time period, to supply all such information
reasonably requested by the Investors or any such representative, advisor or
underwriter in connection with such Registration Statement (including, without
limitation, in response to all questions and other inquiries reasonably made or
submitted by any of them), prior to and from time to time after the filing and
effectiveness of the Registration Statement for the sole purpose of enabling
the Investors and such representatives, 

 

6

 

advisors and underwriters and their respective accountants and
attorneys to conduct initial and ongoing due diligence with respect to the
Company and the accuracy of such Registration Statement.

 

The Company shall not disclose material
nonpublic information to the Investors, or to advisors to or representatives of
the Investors, unless prior to disclosure of such information the Company
identifies such information as being material nonpublic information and
provides the Investors, such advisors and representatives with the opportunity
to accept or refuse to accept such material nonpublic information for review
and any Investor wishing to obtain such information enters into an appropriate
confidentiality agreement with the Company with respect thereto.

 

5.               Obligations of
the Investors.

 

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

 

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

 

(c)                                Each
Investor agrees that, upon receipt of any notice from the Company of either (i) the
commencement of an Allowed Delay pursuant to Section 2(c)(ii) or (ii) the
happening of an event pursuant to Section 3(h) hereof, such Investor
will immediately discontinue disposition of Registrable Securities pursuant to
the Registration Statement covering such Registrable Securities, until the
Investor is advised by the Company that a supplemented or amended prospectus
has been filed with the SEC and until any related post-effective amendment is
declared effective and, if so directed by the Company, the Investor shall
deliver to the Company or destroy (and deliver to the Company a certificate of
destruction) all copies in the Investor’s possession of the Prospectus covering
the Registrable Securities current at the time of receipt of such notice.

 

6.               Indemnification.

 

(a)                                Indemnification
by the Company. The Company will indemnify and hold harmless each Investor
and its officers, directors, members, employees and agents, successors and
assigns, and each other person, if any, who controls such Investor within the

 

7

 

meaning of the 1933 Act, against any losses,
claims, damages or liabilities, joint or several, to which they may become
subject under the 1933 Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon: (i) any untrue statement or alleged untrue statement of any
material fact contained in any Registration Statement, any preliminary
prospectus or final prospectus contained therein, or any amendment or
supplement thereof; (ii) any blue sky application or other document
executed by the Company specifically for that purpose or based upon written
information furnished by the Company filed in any state or other jurisdiction
in order to qualify any or all of the Registrable Securities under the
securities laws thereof (any such application, document or information herein
called a “Blue Sky Application”); (iii) the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading; (iv) any violation by the Company or
its agents of any rule or regulation promulgated under the 1933 Act
applicable to the Company or its agents and relating to action or inaction
required of the Company in connection with such registration; or (v) any
failure to register or qualify the Registrable Securities included in any such
Registration in any state where the Company or its agents has affirmatively
undertaken or agreed in writing that the Company will undertake such
registration or qualification on an Investor’s behalf and will reimburse such
Investor, and each such officer, director or member and each such controlling
person for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company will not
be liable in any such case if and to the extent that any such loss, claim,
damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission so made in conformity
with information furnished by such Investor or any such controlling person in
writing specifically for use in such Registration Statement or Prospectus.

 

(b)                               Indemnification
by the Investors. Each Investor agrees, severally but not jointly, to
indemnify and hold harmless, to the fullest extent permitted by law, the
Company, its directors, officers, employees, stockholders and each person who
controls the Company (within the meaning of the 1933 Act) against any losses,
claims, damages, liabilities and expense (including reasonable attorney fees)
resulting from any untrue statement of a material fact or any omission of a
material fact required to be stated in the Registration Statement or Prospectus
or preliminary prospectus or amendment or supplement thereto or necessary to
make the statements therein not misleading, to the extent, but only to the
extent that such untrue statement or omission is contained in any information
furnished in writing by such Investor to the Company specifically for inclusion
in such Registration Statement or Prospectus or amendment or supplement thereto.
In no event shall the liability of an Investor be greater in amount than the
dollar amount of the proceeds (net of all expense paid by such Investor in
connection with any claim relating to this Section 6 and the amount of any
damages such Investor has otherwise been required to pay by reason of such
untrue statement or omission) received by such Investor upon the sale of the
Registrable Securities included in the Registration Statement giving rise to
such indemnification obligation.

 

(c)                                Conduct
of Indemnification Proceedings. Any person entitled to indemnification
hereunder shall (i) give prompt notice to the indemnifying party of any
claim with respect to which it seeks indemnification and (ii) permit such
indemnifying party to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party; provided that any person entitled
to indemnification hereunder shall have the right to employ

 

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separate counsel and to participate in the
defense of such claim, but the fees and expenses of such counsel shall be at
the expense of such person unless (a) the indemnifying party has agreed to
pay such fees or expenses, or (b) the indemnifying party shall have failed
to assume the defense of such claim and employ counsel reasonably satisfactory
to such person or (c) in the reasonable judgment of any such person, based
upon written advice of its counsel, a conflict of interest exists between such
person and the indemnifying party with respect to such claims (in which case,
if the person notifies the indemnifying party in writing that such person
elects to employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such claim
on behalf of such person); and provided, further, that the
failure of any indemnified party to give notice as provided herein shall not
relieve the indemnifying party of its obligations hereunder, except to the
extent that such failure to give notice shall materially adversely affect the
indemnifying party in the defense of any such claim or litigation. It is
understood that the indemnifying party shall not, in connection with any
proceeding in the same jurisdiction, be liable for fees or expenses of more
than one separate firm of attorneys at any time for all such indemnified
parties. No indemnifying party will, except with the consent of the indemnified
party, consent to entry of any judgment or enter into any settlement that does
not include as an unconditional term thereof the giving by the claimant or
plaintiff to such indemnified party of a release from all liability in respect
of such claim or litigation.

 

(d)                               Contribution.
If for any reason the indemnification provided for in the preceding paragraphs (a) and
(b) is unavailable to an indemnified party or insufficient to hold it
harmless, other than as expressly specified therein, then the indemnifying
party shall contribute to the amount paid or payable by the indemnified party
as a result of such loss, claim, damage or liability in such proportion as is
appropriate to reflect the relative fault of the indemnified party and the
indemnifying party, as well as any other relevant equitable considerations. No
person guilty of fraudulent misrepresentation within the meaning of Section 11(f) of
the 1933 Act shall be entitled to contribution from any person not guilty of
such fraudulent misrepresentation. In no event shall the contribution
obligation of a holder of Registrable Securities be greater in amount than the
dollar amount of the proceeds (net of all expenses paid by such holder in
connection with any claim relating to this Section 6 and the amount of any
damages such holder has otherwise been required to pay by reason of such untrue
or alleged untrue statement or omission or alleged omission) received by it
upon the sale of the Registrable Securities giving rise to such contribution
obligation.

 

7.               Miscellaneous.

 

(a)                                Amendments
and Waivers. This Agreement may be amended, modified or waived only by
a writing signed by the Company and the Required Investors; provided
that if any such amendment, modification or waiver would adversely affect in
any material respect any Investor or group of Investors who have comparable
rights under this Agreement disproportionately to the other Investors having
such comparable rights, such amendment, modification, or waiver shall also
require the written consent of the Investor(s) so adversely affected. Notwithstanding
the foregoing, no amendment or modification of this Agreement that would
restrict or otherwise limit any Investor’s registration rights hereunder shall
be effective against such Investor without its written consent.

 

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

 

(c)                                Assignments
and Transfers by Investors. The provisions of this Agreement shall be
binding upon and inure to the benefit of the Investors and their respective
successors and assigns. An Investor may transfer or assign, in whole or
from time to time in part, to one or more persons its rights hereunder in connection
with the transfer of Registrable Securities by such Investor to such person,
provided that (i) such Investor complies with all laws applicable thereto
and provides written notice of assignment to the Company promptly after such
assignment is effected and (ii) the transferee agrees in writing to be
bound by this Agreement as if it were a party hereto.

 

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

 

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

 

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

 

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

 

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

 

10

 

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

 

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

 

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

 

11

 

SIGNATURE
PAGE TO 
REGISTRATION RIGHTS
AGREEMENT

 

IN WITNESS WHEREOF, the parties have executed
this Agreement or caused their duly authorized officers to execute this
Agreement as of the date first above written.

 

	
  The Company:

  	
  TAPESTRY
  PHARMACEUTICALS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Kai P.
  Larson

  	
   

  
	
   

  	
  Name:

  	
  Kai P.
  Larson

  
	
   

  	
  Title:

  	
  Vice
  President, General Counsel and Secretary

  
					

 

 

SIGNATURE
PAGES TO 
REGISTRATION RIGHTS
AGREEMENT

 

	
   

  	
  BAKER BROS. INVESTMENTS II, L.P.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Baker Bros. Capital, L.P., its general partner 

  	
   

  
	
   

  	
  By:

  	
  Baker Bros. Capital (GP), LLC, its general partner 

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Julian Baker

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Julian Baker 

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Managing Member

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  BAKER BIOTECH FUND II (Z), L.P.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Baker Biotech Capital II (Z), L.P., its general partner 

  
	
   

  	
  By:

  	
  Baker Biotech Capital II (Z) (GP), LLC, its general

  partner 

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Julian Baker

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Julian Baker 

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Managing Member

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  BAKER BIOTECH FUND III, L.P.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Baker Biotech Capital III, L.P., its general partner 

  
	
   

  	
  By:

  	
  Baker Biotech Capital III (GP), LLC, its general

  partner 

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Julian Baker

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Julian Baker 

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Managing Member

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  BAKER BIOTECH FUND III (Z), L.P.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Baker Biotech Capital III (Z), L.P., its general partner 

  
	
   

  	
  By:

  	
  Baker Biotech Capital III (Z) (GP), LLC, its general 

  partner 

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Julian Baker

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Julian Baker 

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Managing Member

  	
   

  

 

 

	
   

  	
  14159 L.P.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  14159 Capital, L.P., its general partner

  	
   

  
	
   

  	
  By:

  	
  14159 Capital (GP), LLC, its general partner

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Julian Baker

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Julian Baker

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Managing Member

  	
   

  

 

 

SIGNATURE
PAGE TO 
REGISTRATION RIGHTS
AGREEMENT

 

	
   

  	
  BIOTECHNOLOGY VALUE FUND, L.P.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  BVF Partners, L.P., its general partner

  	
   

  
	
   

  	
  By:

  	
  BVF Inc., its general partner

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark N. Lampert

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Mark N. Lampert

  	
   

  
	
   

  	
   

  	
  Title:

  	
  President

  	
   

  

 

 

	
   

  	
  BIOTECHNOLOGY VALUE FUND II, L.P.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  BVF Partners, L.P., its general partner

  	
   

  
	
   

  	
  By:

  	
  BVF Inc., its general partner

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark N. Lampert

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Mark N. Lampert

  	
   

  
	
   

  	
   

  	
  Title:

  	
  President

  	
   

  

 

 

	
   

  	
  BVF INVESTMENTS, L.L.C.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  BVF Partners, L.P., its manager

  	
   

  
	
   

  	
  By:

  	
  BVF Inc., its general partner

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark N. Lampert

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Mark N. Lampert

  	
   

  
	
   

  	
   

  	
  Title:

  	
  President

  	
   

  

 

 

	
   

  	
  INVESTMENT 10, L.L.C.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  BVF Partners, L.P., its attorney-in-fact

  	
   

  
	
   

  	
  By:

  	
  BVF Inc., its general partner

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark N. Lampert

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Mark N. Lampert

  	
   

  
	
   

  	
   

  	
  Title:

  	
  President

  	
   

  

 

 

SIGNATURE
PAGE TO 
REGISTRATION RIGHTS
AGREEMENT

 

	
   

  	
  FORT MASON MASTER, LP

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  Fort Mason Capital, LLC, its General

  	
   

  
	
   

  	
   

  	
  Partner

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Den Gorman

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Den Gorman

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Managing Member

  	
   

  

 

 

	
   

  	
  FORT MASON PARTNERS, LP

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  Fort Mason Capital, LLC, its General

  	
   

  
	
   

  	
   

  	
  Partner

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Den Gorman

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Den Gorman

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Managing Member

  	
   

  

 

 

SIGNATURE
PAGE TO 
REGISTRATION RIGHTS
AGREEMENT

 

	
   

  	
  CAPITAL VENTURES INTERNATIONAL

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  Heights Capital Management, Inc., its

  authorized agent

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Martin Kobinger

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Martin Kobinger

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Investment Manager

  	
   

  

 

 

SIGNATURE
PAGE TO 
REGISTRATION RIGHTS
AGREEMENT

 

	
   

  	
  MERLIN BIOMED LONG TERM

  APPRECIATION, LP

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Norman Schleifer

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Norman Schleifer

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Chief Financial Officer

  	
   

  

 

 

	
   

  	
  MERLIN BIOMED OFFSHORE MASTER

  FUND

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Norman Schleifer

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Norman Schleifer

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Chief Financial Officer

  	
   

  

 

 

SIGNATURE
PAGE TO 
REGISTRATION RIGHTS
AGREEMENT

 

	
   

  	
  SPECIAL SITUATIONS FUND III Q.P. L.P.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David Greenhouse

  	
   

  
	
   

  	
   

  	
  Name:

  	
  David Greenhouse

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  

 

 

	
   

  	
  SPECIAL SITUATIONS LIFE SCIENCE FUND

  L.P.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David Greenhouse

  	
   

  
	
   

  	
   

  	
  Name:

  	
  David Greenhouse

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  

 

 

	
   

  	
  SPECIAL SITUATIONS PRIVATE EQUITY

  FUND L.P.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David Greenhouse

  	
   

  
	
   

  	
   

  	
  Name:

  	
  David Greenhouse

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  

 

 

	
   

  	
  SPECIAL SITUATIONS FUND III L.P.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David Greenhouse

  	
   

  
	
   

  	
   

  	
  Name:

  	
  David Greenhouse

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  

 

 

	
   

  	
  SPECIAL SITUATIONS CAYMAN FUND L.P.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David Greenhouse

  	
   

  
	
   

  	
   

  	
  Name:

  	
  David Greenhouse

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  

 

 

SIGNATURE
PAGES TO 
REGISTRATION RIGHTS
AGREEMENT

 

	
   

  	
  IRA FBO CHUNG W. KONG DB SECURITIES

  INC. CUSTODIAN ROTH CONVERSION

  ACCOUNT

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Chung W. Kong

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Chung W. Kong

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Beneficiary

  	
   

  

 

 

	
   

  	
  IRA FBO CHANG L. KONG DB SECURITIES

  INC. CUSTODIAN ROTH CONVERSION

  ACCOUNT

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Chang L. Kong

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Chang L. Kong

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Beneficiary

  	
   

  

 

 

	
   

  	
  TANG CAPITAL PARTNERS, LP

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kevin C. Tang

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Kevin C. Tang

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Managing Member

  	
   

  

 

 

	
   

  	
  KEVIN C. TANG AS CUSTODIAN FOR JUSTIN

  LEE TANG UNDER THE CA TRANSFER TO

  MINORS ACT

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kevin C. Tang

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Kevin C. Tang

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Trustee

  	
   

  

 

	
   

  	
  KEVIN TANG AND HAEYOUNG TANG

  TRUSTEES THE TANG FAMILY TRUST

  DATED 8-27-02

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kevin C. Tang

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Kevin C. Tang

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Trustee

  	
   

  

 

 

	
   

  	
  KEVIN C. TANG AS CUSTODIAN FOR

  JULIAN KONG TANG UNDER THE CA

  TRANSFER TO MINORS ACT

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kevin C. Tang

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Kevin C. Tang

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Trustee

  	
   

  

 

 

	
   

  	
  KEVIN C. TANG AS CUSTODIAN FOR NOA

  YOUNG TANG UNDER THE CA TRANSFER

  TO MINORS ACT

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kevin C. Tang

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Kevin C. Tang

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Trustee

  	
   

  

 

 

	
   

  	
  IRA FBO KEVIN TANG DB SECURITIES INC.

  CUSTODIAN ROLLOVER ACCOUNT

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kevin C. Tang

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Kevin C. Tang

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Beneficiary

  	
   

  

 

 

SIGNATURE
PAGE TO 
REGISTRATION RIGHTS
AGREEMENT

 

	
   

  	
  VERSANT CAPITAL MANAGEMENT LLC

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Herriot Tabuteau

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Herriot Tabuteau

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Managing Member

  	
   

  

 

 

SIGNATURE
PAGE TO 
REGISTRATION RIGHTS
AGREEMENT

 

	
   

  	
  XMARK JV INVESTMENT PARTNERS, LLC

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Mitchell D. Kaye

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Mitchell D. Kaye

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Chief Investment Officer

  	
   

  

 

 

	
   

  	
  XMARK OPPORTUNITY FUND, LTD.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Mitchell D. Kaye

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Mitchell D. Kaye

  	
   

  
	
   

  	
   

  	
  Title:

  	
  CIO

  	
   

  

 

 

	
   

  	
  XMARK OPPORTUNITY FUND, L.P.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Mitchell D. Kaye

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Mitchell D. Kaye

  	
   

  
	
   

  	
   

  	
  Title:

  	
  CIO

  	
   

  

 

 

Exhibit A

 

Plan
of Distribution

 

The selling
stockholders, which as used herein includes donees, pledgees, transferees or
other successors-in-interest selling shares of common stock or interests in
shares of common stock received after the date of this prospectus from a
selling stockholder as a gift, pledge, partnership distribution or other
transfer, may, from time to time, sell, transfer or otherwise dispose of any or
all of their shares of common stock or interests in shares of common stock on
any stock exchange, market or trading facility on which the shares are traded
or in private transactions. These dispositions may be at fixed prices, at
prevailing market prices at the time of sale, at prices related to the
prevailing market price, at varying prices determined at the time of sale, or
at negotiated prices.

 

The selling
stockholders may use any one or more of the following methods when
disposing of shares or interests therein:

 

• ordinary brokerage transactions and
transactions in which the broker-dealer solicits purchasers;

 

• block trades in which the broker-dealer
will attempt to sell the shares as agent, but may position and resell a
portion of the block as principal to facilitate the transaction;

 

• purchases by a broker-dealer as
principal and resale by the broker-dealer for its account;

 

• an exchange distribution in accordance
with the rules of the applicable exchange;

 

• privately negotiated transactions;

 

• short sales effected after the date
the registration statement of which this Prospectus is a part is declared
effective by the SEC;

 

• through the writing or settlement of
options or other hedging transactions, whether through an options exchange or
otherwise;

 

• broker-dealers may agree with the
selling stockholders to sell a specified number of such shares at a stipulated
price per share; and

 

• a combination of any such methods of
sale.

 

The selling
stockholders may, from time to time, pledge or grant a security interest in
some or all of the shares of common stock owned by them and, if they default in
the performance of their secured obligations, the pledgees or secured parties may offer
and sell the shares of common stock, from time to time, under this prospectus,
or under an amendment to this prospectus under Rule 424(b)(3) or
other applicable provision of the Securities Act amending the list of selling
stockholders to include the pledgee, transferee or other successors in interest
as

 

 

selling stockholders under this
prospectus. The selling stockholders also may transfer the shares of
common stock in other circumstances, in which case the transferees, pledgees or
other successors in interest will be the selling beneficial owners for purposes
of this prospectus.

 

In connection
with the sale of our common stock or interests therein, the selling
stockholders may enter into hedging transactions with broker-dealers or
other financial institutions, which may in turn engage in short sales of
the common stock in the course of hedging the positions they assume. The
selling stockholders may also sell shares of our common stock short and
deliver these securities to close out their short positions, or loan or pledge
the common stock to broker-dealers that in turn may sell these securities.
The selling stockholders may also enter into option or other transactions
with broker-dealers or other financial institutions or the creation of one or
more derivative securities which require the delivery to such broker-dealer or
other financial institution of shares offered by this prospectus, which shares
such broker-dealer or other financial institution may resell pursuant to
this prospectus (as supplemented or amended to reflect such transaction).

 

The aggregate proceeds to
the selling stockholders from the sale of the common stock offered by them will
be the purchase price of the common stock less discounts or commissions, if any.
Each of the selling stockholders reserves the right to accept and, together
with their agents from time to time, to reject, in whole or in part, any
proposed purchase of common stock to be made directly or through agents. We
will not receive any of the proceeds from this offering. Upon any exercise of
the warrants by payment of cash, however, we will receive the exercise price of
the warrants.

 

The selling
stockholders also may resell all or a portion of the shares in open market
transactions in reliance upon Rule 144 under the Securities Act of 1933,
provided that they meet the criteria and conform to the requirements of
that rule.

 

The
selling stockholders and any underwriters, broker-dealers or agents that
participate in the sale of the common stock or interests therein may be “underwriters”
within the meaning of Section 2(11) of the Securities Act. Any discounts,
commissions, concessions or profit they earn on any resale of the shares may be
underwriting discounts and commissions under the Securities Act. Selling
stockholders who are “underwriters” within the meaning of Section 2(11) of
the Securities Act will be subject to the prospectus delivery requirements of
the Securities Act.

 

To the extent
required, the shares of our common stock to be sold, the names of the selling
stockholders, the respective purchase prices and public offering prices, the
names of any agents, dealer or underwriter, any applicable commissions or
discounts with respect to a particular offer will be set forth in an
accompanying prospectus supplement or, if appropriate, a post-effective
amendment to the registration statement that includes this prospectus.

 

In order to comply with the
securities laws of some states, if applicable, the common stock may be
sold in these jurisdictions only through registered or licensed brokers or
dealers. In addition, in some states the common stock may not be sold
unless it has been registered or qualified for sale or an exemption from
registration or qualification requirements is available and is complied with.

 

 

We have advised the selling
stockholders that the anti-manipulation rules of Regulation M under the
Exchange Act may apply to sales of shares in the market and to the
activities of the selling stockholders and their affiliates. In addition, we
will make copies of this prospectus (as it may be supplemented or amended
from time to time) available to the selling stockholders for the purpose of
satisfying the prospectus delivery requirements of the Securities Act. The
selling stockholders may indemnify any broker-dealer that participates in
transactions involving the sale of the shares against certain liabilities,
including liabilities arising under the Securities Act.

 

We have agreed to indemnify
the selling stockholders against liabilities, including liabilities under the
Securities Act and state securities laws, relating to the registration of the
shares offered by this prospectus.

 

We have agreed with the
selling stockholders to keep the registration statement of which this
prospectus constitutes a part effective until the earlier of (1) such
time as all of the shares covered by this prospectus have been disposed of
pursuant to and in accordance with the registration statement or (2) the
date on which the shares may be sold pursuant to Rule 144(k) of the
Securities Act.Exhibit No. 10.3

 

Schedule Required by
Instruction 2 to Item 601

of Regulation S-K

 

The Warrants are substantially identical in
all material respects except as to the parties thereto, the amount of Warrant Shares
and the inclusion of the bracketed language in Section 3.

 

	
  Party

  	
   

  	
  Amount of Warrant

  Shares

  	
   

  	
  Bracketed language

  in Section 3

  	
   

  
	
  14159, L.P.

  	
   

  	
  113,874

  	
   

  	
  yes

  	
   

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

  	
   

  	
  54,481

  	
   

  	
  yes

  	
   

  
	
  Baker Biotech Fund III, L.P.

  	
   

  	
  1,525,130

  	
   

  	
  yes

  	
   

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

  	
   

  	
  264,874

  	
   

  	
  yes

  	
   

  
	
  Baker Bros. Investments II, L.P.

  	
   

  	
  41,641

  	
   

  	
  yes

  	
   

  
	
  Biotechnology Value Fund, L.P.

  	
   

  	
  336,000

  	
   

  	
  yes

  	
   

  
	
  Biotechnology Value Fund II, L.P.

  	
   

  	
  229,800

  	
   

  	
  yes

  	
   

  
	
  BVF Investments, L.L.C.

  	
   

  	
  833,100

  	
   

  	
  yes

  	
   

  
	
  Investment 10, L.L.C.

  	
   

  	
  101,100

  	
   

  	
  yes

  	
   

  
	
  Fort Mason Master, L.P.

  	
   

  	
  1,408,650

  	
   

  	
  yes

  	
   

  
	
  Fort Mason Partners, L.P.

  	
   

  	
  91,350

  	
   

  	
  yes

  	
   

  
	
  Capital Ventures International

  	
   

  	
  1,000,000

  	
   

  	
  yes

  	
   

  
	
  Merlin BioMed Long Term Appreciation, LP

  	
   

  	
  175,000

  	
   

  	
  yes

  	
   

  
	
  Merlin BioMed Offshore Master Fund

  	
   

  	
  325,000

  	
   

  	
  yes

  	
   

  
	
  Special Situations Cayman Fund, L.P.

  	
   

  	
  350,000

  	
   

  	
  no

  	
   

  
	
  Special Situations Fund III, L.P.

  	
   

  	
  100,000

  	
   

  	
  no

  	
   

  
	
  Special Situations Fund III QP, L.P.

  	
   

  	
  1,200,000

  	
   

  	
  no

  	
   

  
	
  Special Situations Life Sciences Fund, L.P.

  	
   

  	
  350,000

  	
   

  	
  no

  	
   

  
	
  Special Situations Private Equity Fund, L.P.

  	
   

  	
  500,000

  	
   

  	
  no

  	
   

  
	
  IRA FBO Chung W. Kong DB Securities Inc. Custodian Roth Conversion
  Account

  	
   

  	
  10,000

  	
   

  	
  yes

  	
   

  
	
  IRA FBO Chang L. Kong DB Securities Inc. Custodian Roth Conversion
  Account

  	
   

  	
  10,000

  	
   

  	
  yes

  	
   

  
	
  Tang Capital Partners, LP

  	
   

  	
  1,705,000

  	
   

  	
  yes

  	
   

  
	
  Kevin C. Tang as Custodian for Julian Kong Tang Under the CA Transfer
  to Minors Act

  	
   

  	
  35,000

  	
   

  	
  yes

  	
   

  
	
  Kevin C. Tang as Custodian for Justin Lee Tang Under the CA Transfer
  to Minors Act

  	
   

  	
  50,000

  	
   

  	
  yes

  	
   

  
	
  Kevin C. Tang as Custodian for Noa Young Tang Under the CA Transfer
  to Minors Act

  	
   

  	
  15,000

  	
   

  	
  yes

  	
   

  
	
  Kevin Tang and Haeyoung Tang Trustees The Tang Family Trust Dated
  8-27-02

  	
   

  	
  150,000

  	
   

  	
  yes

  	
   

  
	
  IRA FBO Kevin Tang DB Securities Inc. Custodian Rollover Account

  	
   

  	
  25,000

  	
   

  	
  yes

  	
   

  

 

 

	
  Versant Capital Management LLC

  	
   

  	
  750,000

  	
   

  	
  yes

  	
   

  
	
  Xmark JV Investment Partners, LLC

  	
   

  	
  500,000

  	
   

  	
  yes

  	
   

  
	
  Xmark Opportunity Fund, L.P.

  	
   

  	
  225,000

  	
   

  	
  yes

  	
   

  
	
  Xmark Opportunity Fund, Ltd.

  	
   

  	
  275,000

  	
   

  	
  yes

  	
   

  

 

2

 

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

 

SUBJECT TO THE
PROVISIONS OF SECTION 10 HEREOF, THIS WARRANT SHALL BE VOID AFTER 5:00 P.M.
EASTERN TIME ON THE FIFTH ANNIVERSARY (THE “EXPIRATION DATE”) OF THE DATE OF
ISSUANCE OF THIS WARRANT (THE “DATE OF ISSUANCE”).

 

No.        

 

 

TAPESTRY
PHARMACEUTICALS, INC.

 

WARRANT TO
PURCHASE         SHARES OF

COMMON
STOCK, PAR VALUE $0.0075 PER SHARE

 

For VALUE
RECEIVED,                        
(“Warrantholder”), is entitled to purchase, subject to the provisions of this
Warrant, from Tapestry Pharmaceuticals, Inc., a Delaware corporation (“Company”),
at any time not later than 5:00 P.M., Eastern time, on the Expiration Date
(as defined above), at an exercise price per share equal to $2.40 (the exercise
price in effect being herein called the “Warrant Price”),                          
(“Warrant Shares”) of the Company’s Common Stock, par value $0.0075 per share (“Common
Stock”).  The number of Warrant Shares
purchasable upon exercise of this Warrant and the Warrant Price shall be
subject to adjustment from time to time as described herein.

 

Section 1.       Registration.  The Company shall maintain books for the
transfer and registration of this Warrant. 
Upon the initial issuance of this Warrant, the Company shall issue and
register this Warrant in the name of the Warrantholder.

 

Section 2.       Transfers.  As provided herein, this Warrant may be
transferred only pursuant to a registration statement filed under the
Securities Act or pursuant to an exemption from such registration.  Subject to such restrictions, the Company
shall transfer this Warrant from time to time upon the books to be maintained
by the Company for that purpose, within five calendar days following the
surrender hereof for transfer, properly endorsed or accompanied by appropriate
instructions for transfer and such other documents as may be reasonably
required by the Company, including, if required by the Company, an opinion of
counsel to the transferor to the effect that such transfer is exempt from the
registration requirements of the Securities Act, to establish that such
transfer is being made in accordance with the terms hereof, and a new Warrant
shall be issued to the transferee and the surrendered Warrant shall be canceled
by the 

 

3

 

Company within such five
calendar day period; provided that the Company shall advise the Warrantholder
in writing of any and all documentation (including the form and substance of
any instruction for transfer) that the Company requires to effectuate such
transfer within five calendar days of receipt by the Company of a written
request by the Warrantholder with respect thereto.

 

Section 3.       Exercise
of Warrant.  Subject to the
provisions hereof, the Warrantholder may exercise this Warrant, in whole or in
part, at any time prior to its expiration upon surrender of this Warrant,
together with delivery of a duly executed Warrant exercise form, in the form
attached hereto as Appendix A (the “Exercise Agreement”) and payment by cash,
certified check or wire transfer of funds (or, in certain circumstances, by
cashless exercise as provided below) of  the aggregate Warrant Price for that number of
Warrant Shares then being purchased, to the Company during normal business
hours on any business day at the Company’s principal executive offices (or such
other office or agency of the Company as it may designate by notice to the
Warrantholder).  The Warrant Shares so
purchased shall be deemed to be issued to the Warrantholder or the
Warrantholder’s designee, as the record owner of such shares, as of the close
of business on the date on which this Warrant shall have been surrendered (or
the date evidence of loss, theft or destruction thereof and security or
indemnity satisfactory to the Company has been provided to the Company), the
Warrant Price shall have been paid and the completed Exercise Agreement shall
have been delivered.  Certificates for
the Warrant Shares so purchased shall be delivered to the Warrantholder within
a reasonable time, not exceeding three (3) business days, after this
Warrant shall have been so exercised. 
The certificates so delivered shall be in such denominations as may be
requested by the Warrantholder and shall be registered in the name of the
Warrantholder or such other name as shall be designated by the Warrantholder,
as specified in the Exercise Agreement. 
If this Warrant shall have been exercised only in part, then, unless
this Warrant has expired, the Company shall, at its expense, at the time of
delivery of such certificates, deliver to the Warrantholder a new Warrant
representing the right to purchase the number of shares with respect to which
this Warrant shall not then have been exercised.  As used herein, “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. 
Each exercise hereof shall constitute the re-affirmation by the
Warrantholder that the representations and warranties contained in Section 5
of the Purchase Agreement (as defined below) are true and correct in all
material respects with respect to the Warrantholder as of the time of such
exercise.  [Notwithstanding anything to
the contrary contained herein, the number of Warrant Shares that may be
acquired by the Warrantholder upon any exercise of this Warrant (or otherwise
in respect hereof) shall be limited to the extent necessary to insure that,
following such exercise (or other issuance), the total number of shares of
Common Stock then beneficially owned by such Warrantholder and its Affiliates
and any other Persons (each as defined in the Purchase Agreement) whose
beneficial ownership of Common Stock would be aggregated with the Warrantholder’s
for purposes of Section 13(d) of the United States Securities
Exchange Act of 1934, as amended (the “Exchange Act”), does not exceed 9.999%
(the “Maximum Percentage”) of the total number of issued and outstanding shares
of Common Stock (including for such purpose the shares of Common Stock issuable
upon such exercise).  For such purposes,
beneficial ownership shall be determined in accordance with Section 13(d) of
the Exchange Act and the rules and regulations promulgated
thereunder.  Each delivery of an Exercise
Agreement hereunder will constitute an Exercise Agreement for the lesser of (i) the
full number of Warrant 

 

4

 

Shares requested in such
Exercise Agreement or (ii) such number of Warrant Shares giving effect to
the limitation set forth in the foregoing sentences.  The Company and the Warrantholder shall
cooperate to determine the effect of the limitations set forth herein.  The Company’s right and obligation to issue
shares of Common Stock in excess of the limitation referred to in this Section 3
shall be suspended (and, except as provided below, shall not terminate or
expire notwithstanding any contrary provisions hereof) until such time, if any,
as such shares of Common Stock may be issued in compliance with such
limitation; provided that, if, as of 5:00 p.m., Eastern time, on the
Expiration Date, the Company has not received written notice that the shares of
Common Stock may be issued in compliance with such limitation, the Company’s
obligation to issue such shares shall terminate.  This provision shall not restrict the number
of shares of Common Stock which a Warrantholder may receive or beneficially own
in order to determine the amount of securities or other consideration that such
Warrantholder may receive in the event of a transaction of the type
contemplated in Section 8(b) of this Warrant.  The restrictions set forth in this Section 3
may be waived by the Warrantholder upon not less than 61 days’ written notice
to the Company.]

 

Section 4.       Compliance
with the Securities Act of 1933. Except as provided in the Purchase
Agreement (as defined below), the Company may cause the legend set forth on the
first page of this Warrant to be set forth on each Warrant, and a similar
legend on any security issued or issuable upon exercise of this Warrant, unless
counsel for the Company is of the opinion as to any such security that such
legend is unnecessary.

 

Section 5.       Payment
of Taxes.  The Company will pay any
documentary stamp taxes attributable to the initial issuance of Warrant Shares
issuable upon the exercise of this Warrant; provided, however, that the Company
shall not be required to pay any tax or taxes which may be payable in respect of
any transfer involved in the issuance or delivery of any certificates for
Warrant Shares in a name other than that of the Warrantholder in respect of
which such shares are issued, and in such case, the Company shall not be
required to issue or deliver any certificate for Warrant Shares or any Warrant
until the person requesting the same has paid to the Company the amount of such
tax or has established to the Company’s reasonable satisfaction that such tax
has been paid.  The Warrantholder shall
be responsible for income taxes due under federal, state or other law, if any
such tax is due.

 

Section 6.       Mutilated
or Missing Warrants.  In case this
Warrant shall be mutilated, lost, stolen, or destroyed, the Company shall issue
in exchange and substitution of and upon surrender and cancellation of the
mutilated Warrant, or in lieu of and substitution for this Warrant lost, stolen
or destroyed, a new Warrant of like tenor and for the purchase of a like number
of Warrant Shares, but only upon receipt of evidence reasonably satisfactory to
the Company of such loss, theft or destruction of this Warrant, and with
respect to a lost, stolen or destroyed Warrant, reasonable indemnity or bond
with respect thereto, if requested by the Company.

 

Section 7.       Reservation
of Common Stock.  The Company hereby
represents and warrants that there have been reserved, and the Company shall at
all applicable times keep reserved until issued (if necessary) as contemplated
by this Section 7, out of the authorized and unissued shares of Common
Stock, sufficient shares to provide for the exercise of the rights of 

 

5

 

purchase represented by this
Warrant.  The Company agrees that all
Warrant Shares issued upon due exercise of this Warrant shall be, at the time
of delivery of the certificates for such Warrant Shares, duly authorized,
validly issued, fully paid and non-assessable shares of Common Stock of the
Company.

 

Section 8.       Adjustments.  Subject and pursuant to the provisions of
this Section 8, the Warrant Price and number of Warrant Shares subject to
this Warrant shall be subject to adjustment from time to time as set forth
hereinafter.

 

(a)   If
the Company shall, at any time or from time to time while this Warrant is
outstanding, pay a dividend or make a distribution on its Common Stock in
shares of Common Stock, subdivide its outstanding shares of Common Stock into a
greater number of shares or combine its outstanding shares of Common Stock into
a smaller number of shares or issue by reclassification of its outstanding
shares of Common Stock any shares of its capital stock (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing corporation), then the number of Warrant Shares purchasable
upon exercise of this Warrant and the Warrant Price in effect immediately prior
to the date upon which such change shall become effective, shall be adjusted by
the Company so that the Warrantholder thereafter exercising this Warrant shall
be entitled to receive the number of shares of Common Stock or other capital
stock which the Warrantholder would have received if this Warrant had been
exercised immediately prior to such event upon payment of a Warrant Price that
has been adjusted to reflect a fair allocation of the economics of such event
to the Warrantholder.  Such adjustments
shall be made successively whenever any event listed above shall occur.

 

(b)   If
any capital reorganization, reclassification of the capital stock of the
Company, consolidation or merger of the Company with another corporation in
which the Company is not the survivor, or sale, transfer or other disposition
of all or substantially all of the Company’s assets to another corporation
shall be effected, then, as a condition of such reorganization,
reclassification, consolidation, merger, sale, transfer or other disposition,
lawful and adequate provision shall be made whereby each Warrantholder shall
thereafter have the right to purchase and receive upon the basis and upon the
terms and conditions herein specified and in lieu of the Warrant Shares
immediately theretofore issuable upon exercise of this Warrant, such shares of
stock, securities or assets as would have been issuable or payable with respect
to or in exchange for a number of Warrant Shares equal to the number of Warrant
Shares immediately theretofore issuable upon exercise of this Warrant, had such
reorganization, reclassification, consolidation, merger, sale, transfer or
other disposition not taken place, and in any such case appropriate provision
shall be made with respect to the rights and interests of each Warrantholder to
the end that the provisions hereof (including, without limitation, provision
for adjustment of the Warrant Price) shall thereafter be applicable, as nearly
equivalent as may be practicable in relation to any shares of stock, securities
or assets thereafter deliverable upon the exercise hereof.  The Company shall not effect any such
consolidation, merger, sale, transfer or other disposition unless prior to or
simultaneously with the consummation thereof the successor corporation (if
other than the Company) resulting from such consolidation or merger, or the
corporation purchasing or otherwise acquiring such assets or other appropriate
corporation or entity shall assume the obligation to deliver to the
Warrantholder, at the last address of the Warrantholder appearing on the books
of the Company, such shares of stock, securities or assets as, in 

 

6

 

accordance with the foregoing
provisions, the Warrantholder may be entitled to purchase, and the other
obligations under this Warrant.  The
provisions of this paragraph (b) shall similarly apply to successive
reorganizations, reclassifications, consolidations, mergers, sales, transfers
or other dispositions.

 

(c)   In
case the Company shall fix a payment date for the making of a distribution to
all holders of Common Stock (including any such distribution made in connection
with a consolidation or merger in which the Company is the continuing
corporation) of evidences of indebtedness or assets (other than dividends or
distributions referred to in Section 8(a)), or subscription rights or
warrants, the Warrant Price to be in effect after such payment date shall be
determined by multiplying the Warrant Price in effect immediately prior to such
payment date by a fraction, the numerator of which shall be the total number of
shares of Common Stock outstanding multiplied by the Market Price (as defined
below) per share of Common Stock immediately prior to such payment date, less
the fair market value (as determined by the Company’s Board of Directors in
good faith) of said assets or evidences of indebtedness so distributed, or of
such subscription rights or warrants, and the denominator of which shall be the
total number of shares of Common Stock outstanding multiplied by such Market
Price per share of Common Stock immediately prior to such payment date.  “Market Price” as of a particular date (the “Valuation
Date”) shall mean the following: (a) if the Common Stock is then listed on
a national stock exchange, the closing sale price of one share of Common Stock
on such exchange on the last trading day prior to the Valuation Date; (b) if
the Common Stock is then quoted on The Nasdaq Stock Market, Inc. (“Nasdaq”),
the National Association of Securities Dealers, Inc. OTC Bulletin Board
(the “Bulletin Board”) or such similar quotation system or association, the
closing sale price of one share of Common Stock on Nasdaq, the Bulletin Board
or such other quotation system or association on the last trading day prior to
the Valuation Date or, if no such closing sale price is available, the average
of the high bid and the low asked price quoted thereon on the last trading day
prior to the Valuation Date; or (c) if the Common Stock is not then listed
on a national stock exchange or quoted on Nasdaq, the Bulletin Board or such
other quotation system or association, the fair market value of one share of
Common Stock as of the Valuation Date, as determined in good faith by the Board
of Directors of the Company and the Warrantholder.  If the Common Stock is not then listed on a
national securities exchange, the Bulletin Board or such other quotation system
or association, the Board of Directors of the Company shall respond promptly,
in writing, to an inquiry by the Warrantholder prior to the exercise hereunder
as to the fair market value of a share of Common Stock as determined by the
Board of Directors of the Company.  In
the event that the Board of Directors of the Company and the Warrantholder are
unable to agree upon the fair market value in respect of subpart (c) of
this paragraph, the Company and the Warrantholder shall jointly select an
appraiser, who is experienced in such matters. 
The decision of such appraiser shall be final and conclusive, and the
cost of such appraiser shall be borne equally by the Company and the
Warrantholder.  Such adjustment shall be
made successively whenever such a payment date is fixed.

 

(d)   An
adjustment to the Warrant Price shall become effective immediately after the
payment date in the case of each dividend or distribution and immediately after
the effective date of each other event which requires an adjustment.

 

7

 

(e)   In
the event that, as a result of an adjustment made pursuant to this Section 8,
the Warrantholder shall become entitled to receive any shares of capital stock
of the Company other than shares of Common Stock, the number of such other
shares so receivable upon exercise of this Warrant shall be subject thereafter
to adjustment from time to time in a manner and on terms as nearly equivalent
as practicable to the provisions with respect to the Warrant Shares contained
in this Warrant.

 

(f)    Except
as provided in subsection (g) hereof, if and whenever the Company
shall issue or sell, or is, in accordance with any of subsections (f)(l)
through (f)(7) hereof, deemed to have issued or sold, any shares of Common
Stock for no consideration or for a consideration per share less than the
Warrant Price in effect immediately prior to the time of such issue or sale,
then and in each such case (a “Trigger Issuance”) the then-existing
Warrant Price, shall be reduced, as of the close of business on the effective
date of the Trigger Issuance, to a price determined as follows:

 

Adjusted
Warrant Price = (A x B) + D

A+C

 

where

 

“A” equals the
number of shares of Common Stock outstanding, including Additional Shares of
Common Stock (as defined below) deemed to be issued hereunder, immediately
preceding such Trigger Issuance;

 

“B” equals the
Warrant Price in effect immediately preceding such Trigger Issuance;

 

“C” equals the
number of Additional Shares of Common Stock issued or deemed issued hereunder
as a result of the Trigger Issuance; and

 

“D” equals the
aggregate consideration, if any, received or deemed to be received by the
Company upon such Trigger Issuance;

 

provided, however, that in no event shall the
Warrant Price after giving effect to such Trigger Issuance be greater than the
Warrant Price in effect prior to such Trigger Issuance.

 

For purposes
of this subsection (f), “Additional Shares of Common Stock” shall mean all
shares of Common Stock issued by the Company or deemed to be issued pursuant to
this subsection (f), other than Excluded Issuances (as defined in subsection (g) hereof).

 

For purposes
of this subsection (f), the following subsections (f)(l) to (f)(7) shall
also be applicable:

 

(f)(1) 
Issuance of Rights or Options.  In case
at any time the Company shall in any manner grant (directly and not by
assumption in a merger or otherwise) any warrants or other rights to subscribe
for or to purchase, or any

 

8

 

options for
the purchase of, Common Stock or any stock or security convertible into or
exchangeable for Common Stock (such warrants, rights or options being called “Options”
and such convertible or exchangeable stock or securities being called “Convertible
Securities”) whether or not such Options or the right to convert or exchange
any such Convertible Securities are immediately exercisable, and the price per
share for which Common Stock is issuable upon the exercise of such Options or
upon the conversion or exchange of such Convertible Securities (determined by
dividing (i) the sum (which sum shall constitute the applicable
consideration) of (x) the total amount, if any, received or receivable by the
Company as consideration for the granting of such Options, plus (y) the
aggregate amount of additional consideration payable to the Company upon the
exercise of all such Options, plus (z), in the case of such Options which
relate to Convertible Securities, the aggregate amount of additional
consideration, if any, payable upon the issue or sale of such Convertible
Securities and upon the conversion or exchange thereof, by (ii) the total
maximum number of shares of Common Stock issuable upon the exercise of such
Options or upon the conversion or exchange of all such Convertible Securities
issuable upon the exercise of such Options) shall be less than the Warrant
Price in effect immediately prior to the time of the granting of such Options,
then the total number of shares of Common Stock issuable upon the exercise of
such Options or upon conversion or exchange of the total amount of such
Convertible Securities issuable upon the exercise of such Options shall be
deemed to have been issued for such price per share as of the date of granting
of such Options or the issuance of such Convertible Securities and thereafter
shall be deemed to be outstanding for purposes of adjusting the Warrant
Price.  Except as otherwise provided in
subsection 8(f)(3), no adjustment of the Warrant Price shall be made upon
the actual issue of such Common Stock or of such Convertible Securities upon
exercise of such Options or upon the actual issue of such Common Stock upon
conversion or exchange of such Convertible Securities.

 

(f)(2) 
Issuance of Convertible Securities.  In
case the Company shall in any manner issue (directly and not by assumption in a
merger or otherwise) or sell any Convertible Securities, whether or not the
rights to exchange or convert any such Convertible Securities are immediately
exercisable, and the price per share for which Common Stock is issuable upon
such conversion or exchange (determined by dividing (i) the sum (which sum
shall constitute the applicable consideration) of (x) the total amount received
or receivable by the Company as consideration for the issue or sale of such
Convertible Securities, plus (y) the aggregate amount of additional
consideration, if any, payable to the Company upon the conversion or exchange
thereof, by (ii) the total number of shares of Common Stock issuable upon
the conversion or exchange of all such Convertible Securities) shall be less
than the Warrant Price in effect immediately prior to the time of such issue or
sale, then the total maximum number of shares of Common Stock issuable upon
conversion or exchange of all such Convertible Securities shall be deemed to
have been issued for such price per share as of the date of the issue or sale
of such Convertible Securities and thereafter shall be deemed to be 

 

9

 

outstanding
for purposes of adjusting the Warrant Price, provided that (a) except as
otherwise provided in subsection 8(f)(3), no adjustment of the Warrant
Price shall be made upon the actual issuance of such Common Stock upon
conversion or exchange of such Convertible Securities and (b) no further
adjustment of the Warrant Price shall be made by reason of the issue or sale of
Convertible Securities upon exercise of any Options to purchase any such
Convertible Securities for which adjustments of the Warrant Price have been
made pursuant to the other provisions of subsection 8(f).

 

(f)(3) Change in Option Price or Conversion Rate.  Upon the happening of any of the following
events, namely, if the purchase price provided for in any Option referred to in
subsection 8(f)(l) hereof, the additional consideration, if any, payable
upon the conversion or exchange of any Convertible Securities referred to in
subsections 8(f)(l) or 8(f)(2), or the rate at which Convertible Securities
referred to in subsections 8(f)(l) or 8(f)(2) are convertible into or
exchangeable for Common Stock shall change at any time (including, but not
limited to, changes under or by reason of provisions designed to protect
against dilution), the Warrant Price in effect at the time of such event shall
forthwith be readjusted to the Warrant Price which would have been in effect at
such time had such Options or Convertible Securities still outstanding provided
for such changed purchase price, additional consideration or conversion rate,
as the case may be, at the time initially granted, issued or sold.  On the termination of any Option for which
any adjustment was made pursuant to this subsection 8(f) or any right
to convert or exchange Convertible Securities for which any adjustment was made
pursuant to this subsection 8(f) (including without limitation upon
the redemption or purchase for consideration of such Convertible Securities by
the Company), the Warrant Price then in effect hereunder shall forthwith be
changed to the Warrant Price which would have been in effect at the time of
such termination had such Option or Convertible Securities, to the extent
outstanding immediately prior to such termination, never been issued.

 

(f)(4) Stock Dividends. 
Subject to the provisions of this Section 8(f), in case the Company
shall declare a dividend or make any other distribution upon any stock of the
Company (other than the Common Stock) payable in Common Stock, Options or
Convertible Securities, then any Common Stock, Options or Convertible
Securities, as the case may be, issuable in payment of such dividend or
distribution shall be deemed to have been issued or sold without consideration.

 

(f)(5) Consideration for Stock. 
In case any shares of Common Stock, Options or Convertible Securities
shall be issued or sold for cash, the consideration received therefor shall be
deemed to be the net amount received by the Company therefor, after deduction
therefrom of any expenses incurred or any underwriting commissions or
concessions paid or allowed by the Company in connection therewith.  In case any shares of Common Stock, Options
or Convertible Securities shall be issued or sold for a consideration other
than cash, the amount of the consideration other than cash received by the
Company shall be deemed to be the fair value of such consideration as
determined in good faith by 

 

10

 

the Board of Directors of the Company, after deduction of any expenses
incurred or any underwriting commissions or concessions paid or allowed by the
Company in connection therewith.  In case
any Options shall be issued in connection with the issue and sale of other
securities of the Company, together comprising one integral transaction in
which no specific consideration is allocated to such Options by the parties
thereto, such Options shall be deemed to have been issued for such consideration
as determined in good faith by the Board of Directors of the Company.  If Common Stock, Options or Convertible
Securities shall be issued or sold by the Company and, in connection therewith,
other Options or Convertible Securities (the “Additional Rights”) are issued,
then the consideration received or deemed to be received by the Company shall
be reduced by the fair market value of the Additional Rights (as determined
using the Black-Scholes option pricing model or another method mutually agreed
to by the Company and the Warrantholder). 
The Board of Directors of the Company shall respond promptly, in
writing, to an inquiry by the Warrantholder as to the fair market value of the
Additional Rights.  In the event that the
Board of Directors of the Company and the Warrantholder are unable to agree
upon the fair market value of the Additional Rights, the Company and the
Warrantholder shall jointly select an appraiser, who is experienced in such
matters.  The decision of such appraiser
shall be final and conclusive, and the cost of such appraiser shall be borne
evenly by the Company and the Warrantholder.

 

(f)(6) Record Date.  In case
the Company shall take a record of the holders of its Common Stock for the
purpose of entitling them (i) to receive a dividend or other distribution
payable in Common Stock, Options or Convertible Securities or (ii) to
subscribe for or purchase Common Stock, Options or Convertible Securities, then
such record date shall be deemed to be the date of the issue or sale of the shares
of Common Stock deemed to have been issued or sold upon the declaration of such
dividend or the making of such other distribution or the date of the granting
of such right of subscription or purchase, as the case may be.

 

(f)(7) Treasury Shares.  The
number of shares of Common Stock outstanding at any given time shall not
include shares owned or held by or for the account of the Company or any of its
wholly-owned subsidiaries, and the disposition of any such shares (other than
the cancellation or retirement thereof) shall be considered an issue or sale of
Common Stock for the purpose of this subsection (f).

 

(g)   Anything
herein to the contrary notwithstanding, the Company shall not be required to
make any adjustment of the Warrant Price in the case of the issuance of (A) capital
stock, Options or Convertible Securities issued to directors, officers,
employees or consultants of the Company in connection with their service as
directors of the Company, their employment by the Company or their retention as
consultants by the Company pursuant to an equity compensation program approved
by the Board of Directors of the Company or the compensation committee of the
Board of Directors of the Company, (B) shares of Common Stock issued upon
the conversion or exercise of Options or Convertible Securities issued prior to
the date hereof, 

 

11

 

provided such securities are not amended
after the date hereof to increase the number of shares of Common Stock issuable
thereunder or to lower the exercise or conversion price thereof, (C) securities
issued pursuant to that certain Purchase Agreement dated February 2, 2006,
among the Company and the Investors named therein (the “Purchase Agreement”)
and securities issued upon the exercise or conversion of those securities, (D) shares
of Common Stock issued or issuable by reason of a dividend, stock split or
other distribution on shares of Common Stock (but only to the extent that such
a dividend, split or distribution results in an adjustment in the Warrant Price
pursuant to the other provisions of this Warrant), and (E) capital stock,
Options or Convertible Securities issued to suppliers, vendors and service
providers of and to the Company and its subsidiaries with an aggregate Market
Price (determined as of the time of such issuance) not to exceed $250,000 in
any fiscal year (collectively, “Excluded Issuances”).

 

(h)   Upon any adjustment to the Warrant Price
pursuant to Section 8(f) above, the number of Warrant Shares purchasable hereunder
shall be adjusted by multiplying such number by a fraction, the numerator of
which shall be the Warrant Price in effect immediately prior to such adjustment
and the denominator of which shall be the Warrant Price in effect immediately
thereafter.

 

Section 9.       Fractional
Interest.  The Company shall not be
required to issue fractions of Warrant Shares upon the exercise of this
Warrant.  If any fractional share of
Common Stock would, except for the provisions of the first sentence of this Section 9,
be deliverable upon such exercise, the Company, in lieu of delivering such
fractional share, shall pay to the exercising Warrantholder an amount in cash
equal to the Market Price of such fractional share of Common Stock on the date
of exercise.

 

Section 10.     Extension
of Expiration Date.  If the Company
fails to cause any Registration Statement covering Registrable Securities
(unless otherwise defined herein, capitalized terms are as defined in the
Registration Rights Agreement relating to the Warrant Shares (the “Registration
Rights Agreement”)) to be declared effective prior to the applicable dates set
forth therein, or if any of the events specified in Section 2(c)(ii) of
the Registration Rights Agreement occurs, and the Blackout Period (whether
alone, or in combination with any other Blackout Period) continues for more
than 60 days in any 12 month period, or for more than a total of 90 days, then
the Expiration Date of this Warrant shall be extended one day for each day
beyond the 60-day or 90-day limits, as the case may be, that the Blackout
Period continues.

 

Section 11.     Benefits.  Nothing in this Warrant shall be construed to
give any person, firm or corporation (other than the Company and the
Warrantholder) any legal or equitable right, remedy or claim, it being agreed
that this Warrant shall be for the sole and exclusive benefit of the Company
and the Warrantholder.

 

Section 12.     Notices
to Warrantholder.  Upon the happening
of any event requiring an adjustment of the Warrant Price, the Company shall
promptly give written notice thereof to the Warrantholder at the address
appearing in the records of the Company, stating the adjusted Warrant Price and
the adjusted number of Warrant Shares resulting from such event and setting
forth in reasonable detail the method of calculation and the facts upon which
such calculation is 

 

12

 

based.  Failure to give such notice to the
Warrantholder or any defect therein shall not affect the legality or validity
of the subject adjustment.

 

Section 13.     Identity
of Transfer Agent.  The Transfer
Agent for the Common Stock is American Stock Transfer & Trust
Company.  Upon the appointment of any
subsequent transfer agent for the Common Stock or other shares of the Company’s
capital stock issuable upon the exercise of the rights of purchase represented
by this Warrant, the Company will mail to the Warrantholder a statement setting
forth the name and address of such transfer agent.

 

Section 14.     Notices.  Unless otherwise provided, any notice
required or permitted under this Warrant shall be given in writing and shall be
deemed effectively given as hereinafter described (i) if given by personal
delivery, then such notice shall be deemed given upon such delivery, (ii) if
given by telex or facsimile, then such notice shall be deemed given upon
receipt of confirmation of complete transmittal, (iii) if given by mail,
then such notice shall be deemed given upon the earlier of (A) receipt of
such notice by the recipient or (B) three days after such notice is
deposited in first class mail, postage prepaid, and (iv) if given by an
internationally recognized overnight air courier, then such notice shall be
deemed given one business day after delivery to such carrier.  All notices shall be addressed as follows: if
to the Warrantholder, at its address as set forth in the Company’s books and
records and, if to the Company, at the address as follows, or at such other
address as the Warrantholder or the Company may designate by ten days’ advance
written notice to the other:

 

If to the
Company:

 

Tapestry
Pharmaceuticals, Inc.

4840 Pearl
East Circle, Suite 300W

Boulder,
Colorado 80301

Attention:  Leonard Shaykin, Chairman and Chief Executive
Officer

Fax:  (212) 319-2808

 

With a copy
to:

 

Kirkland &
Ellis LLP

Citigroup
Center

153 East 53rd
Street

New York, New
York 10022-4611

Attention:  Michael Movsovich

Fax: (212) 446-6460

 

Section 15.     Registration
Rights.  The initial Warrantholder is
entitled to the benefit of certain registration rights with respect to the shares
of Common Stock issuable upon the exercise of this Warrant as provided in the
Registration Rights Agreement, and any subsequent Warrantholder may be entitled
to such rights.

 

13

 

Section 16.     Successors.  All the covenants and provisions hereof by or
for the benefit of the Warrantholder shall bind and inure to the benefit of its
respective successors and assigns hereunder.

 

Section 17.     Governing
Law; Consent to Jurisdiction; Waiver of Jury Trial.  This Warrant shall be governed by, and
construed in accordance with, the internal laws of the State of New York,
without reference to the choice of law provisions thereof.  The Company and, by accepting this Warrant,
the Warrantholder, each irrevocably submits to the exclusive jurisdiction of
the courts of the State of New York located in New York County and the United
States District Court for the Southern District of New York for the purpose of
any suit, action, proceeding or judgment relating to or arising out of this
Warrant and the transactions contemplated hereby.  Service of process in connection with any
such suit, action or proceeding may be served on each party hereto anywhere in
the world by the same methods as are specified for the giving of notices under
this Warrant.  The Company and, by
accepting this Warrant, the Warrantholder, each irrevocably consents to the
jurisdiction of any such court in any such suit, action or proceeding and to
the laying of venue in such court.  The
Company and, by accepting this Warrant, the Warrantholder, each irrevocably
waives any objection to the laying of venue of any such suit, action or
proceeding brought in such courts and irrevocably waives any claim that any
such suit, action or proceeding brought in any such court has been brought in
an inconvenient forum.  EACH OF THE COMPANY AND, BY ITS ACCEPTANCE
HEREOF, THE WARRANTHOLDER HEREBY WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN
ANY LITIGATION WITH RESPECT TO THIS WARRANT AND REPRESENTS THAT COUNSEL HAS
BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.

 

Section 18.     Call
Provision.

 

(a)   Subject
to the provisions of clauses (b) and (c) below, in the event that the
closing bid price of a share of Common Stock as traded on Nasdaq (or such other
exchange or stock market on which the Common Stock may then be listed or
quoted) equals or exceeds $4.80 (appropriately adjusted for any stock split,
reverse stock split, stock dividend or other reclassification or combination of
the Common Stock occurring after the date hereof) for at least twenty (20)
consecutive trading days during which the Registration Statement (as defined in
the Registration Rights Agreement) has been effective (the “Trading Condition”),
the Company, upon thirty (30) days prior written notice (the “Notice Period”)
given to the Warrantholder within three (3) business days immediately
following the end of such twenty (20) consecutive trading day period, may call
this Warrant at a redemption price equal to $0.0075 per share of Common Stock
then purchasable pursuant to this Warrant; provided that (i) the Company
simultaneously calls all Company Warrants (as defined below) on the same terms
and on a pro rata basis based on the aggregate number of shares of Common Stock
then purchasable pursuant to such Company Warrants, (ii) all of the shares
of Common Stock issuable hereunder either (A) are registered pursuant to
an effective Registration Statement (as defined in the Registration Rights
Agreement) which has not been suspended and for which no stop order is in
effect, and pursuant to which the Warrantholder is able to sell such shares of
Common Stock at all times during the Notice Period or (B) no longer
constitute Registrable Securities (as defined in the Registration Rights
Agreement) and (iii) this Warrant is fully exercisable for the full amount
of 

 

14

 

Warrant Shares covered hereby.  Notwithstanding any such notice by the
Company, the Warrantholder shall have the right to exercise this Warrant prior
to the end of the Notice Period.

 

(b)   In
any three-month period, no more than the lesser of (i) 20% of the
aggregate amount of Warrants initially issued to a Warrantholder or (ii) the
number of Warrants held by the Warrantholder, may be called by the Company and
the Company may not call additional Warrants in any subsequent three-month
period unless all the conditions specified in Section 18(a) are again
met (including without limitation, the Trading Condition) at the time that any
subsequent call notice is given.

 

(c)   In
connection with any transfer or exchange of less than all of this Warrant, the
transferring Warrantholder shall deliver to the Company an agreement or
instrument executed by the transferring Warrantholder and the new Warrantholder
allocating between them on whatever basis they may determine in their sole
discretion any subsequent call of this Warrant by the Company, such that after
giving effect to such transfer the Company shall have the right to call the
same number of Warrants that it would have had if the transfer or exchange had
not occurred.

 

Section 19.     Cashless
Exercise.  Notwithstanding any other
provision contained herein to the contrary, from and after the first
anniversary of the Date of Issuance, the Warrantholder may elect to receive,
without payment by the Warrantholder of the aggregate Warrant Price in respect
of the shares of Common Stock to be acquired, shares of Common Stock having a
fair market value equal to the Market Price of all shares of Common Stock that
may then be purchased upon full exercise of this Warrant, less the aggregate
exercise price for all such shares, or any specified portion thereof (including
as contemplated by clause (b) below), by the surrender to the Company of
this Warrant (or such portion of this Warrant being so exercised) together with
a Net Issue Election Notice, in the form annexed hereto as Appendix B, duly
executed, to the Company; provided that such election may be made only, (a) for
so long as the Company is required under the Registration Rights Agreement to
have effected the registration of the Warrant Shares for resale to the public
pursuant to a Registration Statement (as such term is defined in the
Registration Rights Agreement), if the Warrant Shares may not be freely sold to
the public for any reason (including, but not limited to, the failure of the
Company to have effected the registration of the Warrant Shares or to have a
current prospectus available for delivery or otherwise, but excluding the
period of any Allowed Delay (as defined in the Registration Rights Agreement),
or (b) at any other time, with respect to an aggregate number of Warrant
Shares equal to up to, but not in excess of, 50% of the Warrant Shares (in
aggregate together with all prior cashless exercises of a portion of this
Warrant) initially issued to the initial Warrantholder pursuant to the Purchase
Agreement.  Thereupon, the Company shall
issue to the Warrantholder such number of fully paid, validly issued and
nonassessable shares of Common Stock as is computed using the following formula:

 

X = Y (A - B)

A

 

where

 

15

 

X =          the
number of shares of Common Stock to which the Warrantholder is entitled upon
such cashless exercise;

 

Y =          the
total number of shares of Common Stock covered by this Warrant for which the
Warrantholder has surrendered purchase rights at such time for cashless
exercise (including both shares to be issued to the Warrantholder and shares as
to which the purchase rights are to be canceled as payment therefor);

 

A =         the
“Market Price” of one share of Common Stock as at the date the net issue
election is made; and

 

B =          the
Warrant Price in effect under this Warrant at the time the net issue election
is made.

 

Section 20.     No
Rights as Stockholder.  Prior to the
exercise of this Warrant, the Warrantholder shall not have or exercise any
rights as a stockholder of the Company by virtue of its ownership of this
Warrant.

 

Section 21.     Amendment;
Waiver.  This Warrant is one of a
series of Warrants of like tenor issued by the Company pursuant to the Purchase
Agreement and initially covering an aggregate of 12,750,000 shares of Common
Stock (collectively, the “Company Warrants”).  Any term of this Warrant may be amended or
waived (including the adjustment provisions included in Section 8 of this
Warrant) upon the written consent of the Company and the holders of Company
Warrants representing at least 50% of the number of shares of Common Stock then
subject to all outstanding Company Warrants (the “Majority Holders”); provided,
that (x) any such amendment or waiver must apply to all Company Warrants; and
(y) the number of Warrant Shares subject to this Warrant, the Warrant Price and
the Expiration Date may not be amended, and the right to exercise this Warrant
may not be altered or waived, without the written consent of the Warrantholder.

 

Section 22.     Section Headings.  The section headings in this Warrant are
for the convenience of the Company and the Warrantholder and in no way alter,
modify, amend, limit or restrict the provisions hereof.

 

16

 

SIGNATURE PAGE
TO WARRANT

 

IN WITNESS
WHEREOF, the Company has caused this Warrant to be duly executed, as of the           
day of                 ,
2006.

 

	
   

  	
  TAPESTRY PHARMACEUTICALS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Kai P. Larson

  
	
   

  	
  Title:

  	
  Vice President, General Counsel and

  Secretary

  
						

 

 

SIGNATURE PAGE
TO WARRANT

 

ACCEPTED AND AGREED TO AS OF
THE DATE SET FORTH ABOVE BY:

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

18

 

APPENDIX A

TAPESTRY
PHARMACEUTICALS, INC.

WARRANT
EXERCISE FORM

 

To: Tapestry
Pharmaceuticals, Inc.

 

The
undersigned hereby irrevocably elects to exercise the right of purchase
represented by the within Warrant (“Warrant”) for, and to purchase thereunder
by the payment of the Warrant Price and surrender of the Warrant,                         
shares of Common Stock (“Warrant Shares”) provided for therein, and requests
that certificates for the Warrant Shares be issued as follows:

 

	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Address

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Federal Tax ID or Social Security No.

  	
   

  

 

	
   

  	
  and delivered by

  	
   

  	
  (certified mail to the above address, or

  
	
   

  	
   

  	
   

  	
  (electronically
  (provide DWAC
  Instructions:                                 ),
  or

  
	
   

  	
   

  	
   

  	
  (other (specify):
                                                                                ).

  

 

and, if the number of Warrant
Shares shall not be all the Warrant Shares purchasable upon exercise of the
Warrant, that a new Warrant for the balance of the Warrant Shares purchasable upon
exercise of this Warrant be registered in the name of the undersigned
Warrantholder or the undersigned’s Assignee as below indicated and delivered to
the address stated below.

 

	
  Dated:
                          ,
       

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Note: The signature must correspond with

  	
   

  	
   

  	
  Signature:

  	
   

  	
   

  
	
  the name of the Warrantholder as written

  	
   

  	
   

  	
   

  	
   

  
	
  on the first page of the Warrant in
  every

  	
   

  	
   

  	
   

  	
   

  
	
  particular, without alteration or
  enlargement

  	
   

  	
   

  	
  Name (please print)

  	
   

  
	
  or any change whatever, unless the Warrant

  	
   

  	
   

  	
   

  	
   

  
	
  has been assigned.

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Address

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Federal Identification or

  	
   

  
	
   

  	
   

  	
   

  	
  Social Security No.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Assignee:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

APPENDIX B

TAPESTRY
PHARMACEUTICALS, INC.

NET ISSUE
ELECTION NOTICE

 

 

To: Tapestry Pharmaceuticals, Inc.

 

Date: [                                           ]

 

 

The
undersigned hereby elects under Section 19 of this Warrant to
surrender the right to purchase [                       ]
shares of Common Stock pursuant to this Warrant and hereby requests the
issuance of [                       ]
 shares of Common Stock.  The certificate(s) for the shares issuable
upon such net issue election shall be issued in the name of the undersigned or
as otherwise indicated below.

 

 

	
   

  	
   

  
	
  Signature

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Name for Registration

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Mailing Address

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