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Exhibit 10.36    
    

CERTAIN
MATERIAL (INDICATED BY AN ASTERISK) HAS BEEN OMITTED FROM THIS DOCUMENT PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. 

EXCLUSIVE LICENSE AGREEMENT

IBD FLAGELLUM DIAGNOSTICS  

        THIS EXCLUSIVE LICENSE AGREEMENT (together with the exhibits hereto, this "Agreement") is made and entered into
effective as of March 29, 2004, by and among Corixa Corporation, a Delaware corporation with its principal place of business located at 1124 Columbia Street, Suite 200, Seattle,
Washington 98104 ("Corixa") and Prometheus Laboratories Inc., with its principal place of business located at 5739 Pacific Center Bl., San Diego, California 92121  ("Prometheus"). Each of Corixa and
Prometheus may be referred to herein as a "Party" and together as the "Parties." 

RECITALS  

        WHEREAS, Corixa controls certain intellectual property and reagents related to flagellin antigens that are useful
for research related to inflammatory bowel disease; 

        WHEREAS, Prometheus desires to obtain a license under Corixa's rights to such intellectual property and reagents in order to make, use and
sell diagnostic products that incorporate the flagellin antigens; 

        WHEREAS, subject to the terms and conditions set forth herein, Corixa and Prometheus desire that Prometheus have the right to research,
develop, and commercialize, under this Agreement, diagnostic products that incorporate flagellin antigens and related technology. 

        NOW, THEREFORE, in consideration of the foregoing premises and other good and valuable consideration the receipt and sufficiency of which
are hereby acknowledged, the Parties hereby agree as follows: 

SECTION 1

DEFINITIONS  

        Unless otherwise specifically provided herein, the following terms shall have the following meanings: 

        1.1   "AAA" shall have the meaning set forth in Section 10.6. 

        1.2   "Affiliate" shall mean any entity owned, owning or under common ownership with a Party to this Agreement to the extent of
at least fifty percent (50%) of the equity (or such lesser percentage which is the maximum allowed to be owned by a foreign corporation in a particular jurisdiction) having the power to vote on or
direct the affairs of the entity and any person, firm, partnership, corporation or other entity actually controlled by, controlling or under common control with such entity. Notwithstanding the
foregoing, neither Party shall be an "Affiliate" of the other Party, or any of its respective Affiliates, for the purposes of this Agreement. 

        1.3   "Breaching Party" shall have the meaning set forth in Section 7.2. 

 

        1.4   "Control" or "Controlled" shall mean, with respect to any data, results,
information, inventions, know-how, formulas, trade secrets, techniques, methods, procedures, development, material or compositions of matter of any type or kind, whether or not patentable,
or any intellectual property right, possession of the ability, whether by ownership or license, to assign or grant a license, sublicense, immunities or other rights as provided for herein to such item
or under such right without violating the terms of any agreement or other arrangement with any Third Party. 

        1.5   "Default" shall have the meaning set forth in Section 7.2 hereof. 

        1.6   "Dispute" shall have the meaning set forth in Section 10.6. 

        1.7   "Effective Date" shall mean the effective date of this Agreement as set forth in the first paragraph hereof. 

        1.8   "Field" shall mean all diagnostic applications, including, without limitation, for the diagnosis, detection, monitoring
and selection of methods of treatment for gastrointestinal diseases, including inflammatory bowel disease. 

        1.9   "First Commercial Sale" shall mean the date of the first arm's length transaction, transfer or disposition for value to a
Third Party of a Licensed Product by Prometheus or any Sublicensee of Prometheus. 

        1.10 "Indemnified Party" shall have the meaning set forth in Section 8.3. 

        1.11 "Indemnifying Party" shall have the meaning set forth in Section 8.3. 

        1.12 "Licensed Know-How" shall mean all technical information, data, trade secrets, and know-how
Controlled by Corixa that directly relates to, or is useful for, the research, development or commercialization of Licensed Products and shall include, without limitation, all control and
manufacturing data that is confidential and has been provided by Corixa to Prometheus. 

        1.13 "Licensed Materials" shall mean the antigens described in Section 4.1 or on Exhibit 1.13, including all
naturally occurring and/or recombinant, expressed flagellin proteins and the DNA and corresponding amino acid sequences of the flagellin molecules (and their expression products and variants thereof,
to the extent Controlled by Corixa). 

        1.14 "Licensed Patents" shall mean the patents and patent applications listed on Exhibit 1.14 attached hereto and all
divisions, continuations and continuations-in-part thereof, patents issuing on any of the foregoing, reissues, renewals and extensions thereof, and supplementary protection
certificates therefor, as well as any certificates of invention or applications therefor, any patents or patent applications claiming priority of any Licensed Patent, and all foreign equivalents of
any Licensed Patent. 

        1.15 "Licensed Product(s)" shall mean a product, used in the Field, which incorporates Licensed Materials or is claimed by
the Licensed Patents. 

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        1.16 "Licensed Technology" shall mean Licensed Know-How and Licensed Materials. 

        1.17 "Losses" shall have the meaning set forth in Section 8.2. 

        1.18 "Net Sales" shall mean the amount of gross sales by Prometheus, or its Sublicensee(s), as applicable, for the sale or
other disposition to a Third Party of a Licensed Product, less the following deductions related to such sale or other disposition, all such deductions as recorded in accordance with U.S. generally
accepted accounting principles ("GAAP"): (a) normal, customary trade discounts (including, without limitation, volume, managed healthcare organizations, reimburser, governmental agency, prompt
payment, wholesaler, and distributor discounts), credits and rebates and allowances and adjustments for rejections, recalls or returns; (b) allowance for bad debts or uncollectible amount;
(c) packaging, handling, freight, and insurance; and (d) sales, use, turnover, excise, value-added, import, export and similar taxes or duties imposed on the sale or transfer and
included in the gross amount charged. [***] shall be excluded from Net Sales calculations for all purposes. "Net Sales" shall also not include [***].
Except as provided above, any commercial use of a Licensed Product by Prometheus or its Sublicensees shall be considered a sale hereunder for accounting and royalty purposes. Sales or transfers of
Licensed Products between or among Prometheus or its Sublicensees (except to the extent the Sublicensee is an end user) shall be excluded from Net Sales calculations for all purposes. 

        In
the event any Licensed Product is sold as a component of a combination of functional elements, Net Sales for purposes of determining royalty payments on such combination shall be
calculated by multiplying Net Sales of such combination by [***]. If no separate sale in the country of sale of the combination of either such above-designated Licensed Product
or such above-designated non-Licensed Product portion of the combination is made during the time period in which the sale was made, Net Sales shall be calculated by multiplying the Net
Sales price of such combination by [***]. The fair values of the portions of the combination will be determined by good faith negotiation at the request of Prometheus, taking
into account, among other things, the number of components of such combination products and the reimbursement amounts for the components of such combination products, but if the Parties fail to agree
on such fair value within [***] days of a request by Prometheus, then Prometheus may require the fair values to be determined by arbitration under Section 10.6. 

        1.19 "Royalty Term" shall have the meaning set forth in Section 3.3.3 hereof. 

        1.20 "Sublicensee" shall mean a Third Party to whom Prometheus has granted a sublicense in accordance with Section 2.2
hereof. 

        1.21 "Sublicense Proceeds" shall mean the amounts received by Prometheus from a Sublicensee in consideration of a grant of
rights to any of the rights licensed to Prometheus under Section 2.1 hereof (including distribution rights of finished products), including, up-front payments, milestones,
technology access fees, but excluding royalty payments, payments for research and development and payments for equity to the extent of the fair market value of the equity. 

        1.22 "Term" shall have the meaning set forth in Section 7.1 hereof. 

        1.23 "Terminating Party" shall have the meaning set forth in Section 7.2 hereof. 

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        1.24 "Territory" shall mean worldwide. 

        1.25 "Third Party" shall mean any person or entity other than Corixa and Prometheus. 

SECTION 2

LICENSE GRANT  

        2.1   Subject to the terms and conditions set forth herein Corixa hereby grants to Prometheus an exclusive (even as to Corixa),
royalty-bearing license, with the right to grant sublicenses solely as provided in Section 2.2 hereof, under Corixa's right, title and interest in and to the Licensed Patents and Licensed
Technology solely to commercialize, develop, research, use, make, have made, sell, offer for sale and import Licensed Products in the Territory and for no other purpose. 

        2.2   Any sublicense granted by Prometheus under this Agreement shall be subject and subordinate to the terms of this
Agreement. Prometheus agrees to provide to Corixa under confidentiality a copy of any sublicense granted pursuant to this Section 2 within thirty (30) days of execution thereof. Said
copy may be redacted as necessary by Prometheus, provided that all financial terms and information, to the extent related solely to the Licensed Patents and the Licensed Technology, shall be retained
therein. Said copy shall be deemed to be the confidential information of Prometheus. 

        2.3   So long as Prometheus is in compliance with its obligations under this Agreement, Corixa agrees that neither it nor any
of its Affiliates will assert against Prometheus or any of its Affiliates or Sublicensees, under any intellectual property right Controlled by Corixa or any of its Affiliates, a claim that any
Licensed Product infringes rights Controlled by Corixa or any of its Affiliates. 

SECTION 3

CONSIDERATION  

        3.1    License Fee.    In consideration of the licenses granted by
Corixa hereunder, and subject to the other terms and conditions of this Agreement, Prometheus shall pay to Corixa within thirty (30) days following the Effective Date, a one-time
payment of Seventy-Five Thousand Dollars ($75,000.00), which payment shall be noncreditable and nonrefundable. 

        3.2    Milestone Payments.    In further consideration of the licenses
granted by Corixa hereunder, and subject to the other terms and conditions of this Agreement, Prometheus shall make the following milestone payments, which payments shall be noncreditable and
nonrefundable: 

        3.2.1  a one-time payment in the amount of Seventy-Five Thousand Dollars ($75,000) within thirty
(30) days following the First Commercial Sale of a Licensed Product in the United States; 

        3.2.2  a one-time payment in the amount of [***] Dollars ($[***])
within [***] days following the First Commercial Sale of a Licensed Product actively marketed outside of the United States; and 

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        3.2.3  a one-time payment in the amount of Two Hundred Thousand Dollars ($200,000) within thirty days after the
first twelve-month period in which Net Sales exceed $5,000,000. 

        3.3    Royalties.    

        3.3.1  In further consideration of the licenses granted by Corixa hereunder, and subject to the other terms and conditions of
this Agreement (including, without limitation, Section 3.3.3), Prometheus shall pay to Corixa, during the Royalty Term, a royalty of [***] percent
([***]%) of Net Sales by Prometheus, or its Sublicensee(s), of any Licensed Product. 

        3.3.2  Only one applicable royalty payment shall be due on the sale of Licensed Product. 

        3.3.3  Royalties on the sale of each Licensed Product, pursuant to this Section 3.3, shall be paid by Prometheus for
the period (the "Royalty Term") commencing on the date of the First Commercial Sale of each Licensed Product until the later of (i) ten (10) years after the First Commercial Sale of such
Licensed Product, or (ii) expiration of the last Licensed Patent covering such Licensed Product in the country of sale. The parties hereby acknowledge that royalties may be payable hereunder
for a
Licensed Product that is not claimed by any issued patent in the country of sale which is subject to a license granted hereunder. In such a case, such royalties shall be reduced to
[***] the royalty rate set forth in Section 3.3.1 above for Net Sales of any such Licensed Product in such country in consideration of the commercial advantage of the
Licensed Technology, through the use of which, such Licensed Product was discovered, developed or manufactured. 

        3.4    Sublicense Proceeds.    In additional to all other fees set
forth above, Prometheus shall pay Corixa, [***] percent ([***]%) of all Sublicense Proceeds received by Prometheus in consideration of any
sublicenses of Licensed Patent Rights and/or Licensed Technology granted hereunder. 

        3.5    Currency.    All amounts payable under this Agreement shall be
payable in United States Dollars, by wire transfer of immediately available funds to a bank account designated by Corixa. Monthly sales amounts shall be translated into U.S. Dollars in accordance with
GAAP. 

        3.6    Withholding Taxes.    If any law or regulation in any country
requires the withholding of any taxes due on payments to be remitted to Corixa under this Agreement, Prometheus shall be entitled to deduct from amounts otherwise due and payable hereunder, any
withholding taxes, value-added taxes or other taxes, levies or charges with respect to amounts payable hereunder payable by Prometheus, or any taxes required to be withheld by Prometheus, to the
extent Prometheus pays to the appropriate governmental authority on behalf of Corixa such taxes. Prometheus shall use reasonable efforts to minimize any such taxes required to be withheld on behalf of
Corixa by Prometheus. Prometheus shall promptly deliver to Corixa proof of payment of all such taxes together with copies of all communications from or with such governmental authority with respect
thereto. Prometheus shall cooperate with Corixa in efforts 

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required
for Corixa to receive any reimbursement or refund of amounts so paid or withheld; said efforts shall be at Corixa's sole expense. 

        3.7    Currency Transfer Restrictions.    If any payment or transfer
of funds out of a country is prohibited by law or regulation, the Parties hereto shall confer regarding the terms and conditions on which Licensed Products shall be sold in such countries, including
the possibility of payment of royalties to Corixa in local currency to a bank account in such country or the renegotiation of royalties for such sales, and in the absence of any other agreement by the
Parties, such funds shall be deposited in whatever currency is allowable by Prometheus in an accredited bank in that country that is reasonably acceptable to Corixa. 

        3.8    Royalty Payments Upon Termination.    If this Agreement and the
rights and licenses granted to Prometheus in Section 2 hereof, are terminated in accordance with Section 7 hereof with respect to all or some of the Licensed Products, Prometheus shall
continue to pay Corixa all amounts accrued and payable pursuant to this Section 3 prior to the date of such termination and any amounts earned thereafter as a result of authorized sales, if
any, of residual inventory of Licensed Products. In addition, Prometheus shall continue to pay to Corixa all amounts payable hereunder with respect to Licensed Products, if any, with respect to which
this Agreement is not terminated. 

        3.9    Payments and Quarterly Reports.    Prometheus shall make
written reports (derived from books maintained in a manner consistent with GAAP and in a format, if any, agreed to by the Parties) to Corixa within [***] days after the close
of each calendar quarter during the period when payment is due hereunder. These reports shall show for such calendar quarter sales by Prometheus and Sublicensees of Licensed Products, Sublicensee
Proceeds received by Prometheus from Sublicensees, details of the quantities of each type of Licensed Product sold in each country and the country of manufacture, if different, gross revenues from
sales, trade discounts allowed and taken, Net Sales and the royalties due to Corixa under this Agreement. Concurrently with the making of such report, Prometheus shall make payment to Corixa of all
amounts payable for the period covered by such report. 

        3.10    Overdue Royalties.    Subject to the other terms of this
Agreement, any payments not paid within the time period set forth in this Section 3 shall bear simple interest at a rate of [***] percent
([***]%) per month from the due date until paid in full. 

        3.11    Accounting.    Prometheus shall, and shall use reasonable
commercial efforts to cause its Sublicensee(s) to, keep clear, accurate and complete records, in accordance with GAAP for a period of at least two (2) years for each reporting period in which
sales occur showing the manufacturing, sales, use and other disposition of Licensed Products in sufficient detail to enable amounts payable or expenses reimbursable hereunder to be determined, and
further agrees to permit its books and records to be examined during normal business hours by an independent accounting firm of nationally recognized standing selected by Corixa and reasonably
satisfactory to the party to be audited, and that is bound in confidence to disclose only evidence of noncompliance not more than once a year at Corixa's sole expense;  provided, however, that such examination shall not (i) be of records for more than the prior two
(2) years, (ii) take place more often than once a year, and (iii) cover any records which date prior to the date of the last examination, and provided further that such
accountants shall report to the requesting party only as 

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to
the accuracy of the royalty statements and payments. Copies of such reports shall be supplied to the audited party. In the event the report demonstrates an underpayment, Prometheus shall pay the
amount of such underpayment immediately upon request of Corixa and to the extent such underpayment is more than [***] percent ([***]%) for the
audited period, shall reimburse Corixa for the reasonable expense of the audit. If Prometheus has overpaid Corixa, Prometheus may deduct such overpayments from future amounts owed to Corixa. All
Prometheus financial information shall be deemed the confidential information of Prometheus. 

        3.12 Notwithstanding anything to the contrary in this Agreement, in the event (i) Prometheus uses commercially
reasonable efforts to prosecute the patent applications comprising the Licensed Patents and (ii) no patent issues which provides commercially reasonable protection for any of the Licensed
Materials or for diagnostic products that incorporate any of the Licensed Materials, then notwithstanding any other provision of Section 3.2 and Section 3.3 to the contrary, Prometheus
shall not be obligated to pay Corixa any additional consideration under Section 3.2 and Section 3.3. 

SECTION 4

SUPPLY OF REAGENTS  

        4.1   Within fourteen (14) days following the Effective Date unless otherwise agreed in writing, Corixa shall supply to
Prometheus Corixa's written protocols for: (a) basic scientific procedures; (b) basic ELISA assay; (c) bacterial growth conditions; and (d) protein purification protocol;
as well as the following biological materials (the "Biological Materials"): 

	1.
	Frozen
stocks of bacteria containing the expression vector

	2.
	Purified
flagellin antigen; 1-3 mgs depending upon amount available

	3.
	Available
positive control sera

	4.
	Available
negative control sera

	5.
	Available
quantities of any other Licensed Material 

Prometheus
shall use the Biological Materials in compliance with (i) all applicable federal, state and local laws and regulations and (ii) the licenses granted to Prometheus hereunder.
Subject to the licenses granted to Prometheus hereunder, Corixa shall retain all title and interest to all Biological Materials. EXCEPT AS EXPRESSLY PROVIDED HEREIN, (I) THE BIOLOGICAL
MATERIALS ARE PROVIDED TO PROMETHEUS WITHOUT WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR ANY OTHER WARRANTY, EXPRESS OR IMPLIED AND (II) CORIXA SHALL NOT BE LIABLE FOR
ANY USE OF THE BIOLOGICAL MATERIALS BY PROMETHEUS OR FOR ANY LOSS, CLAIM, DAMAGE OR LIABILITY, OF ANY KIND OR NATURE, WHICH MAY ARISE FROM OR IN CONNECTION WITH THIS AGREEMENT OR FROM THE USE,
HANDLING OR STORAGE OF THE BIOLOGICAL MATERIALS. Upon termination of this Agreement, all then-existing Biological Material shall be returned to Corixa or destroyed, at the sole option of
Corixa, within ten (10) days following termination of the Agreement. 

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SECTION 5

CONFIDENTIALITY  

        5.1    Confidentiality.    During the Term, and for five
(5) years thereafter, neither Party shall use or reveal or disclose to any Third Party any confidential information received from the other Party, licensed to the other Party, or otherwise
developed by either Party in the performance of activities in furtherance of this Agreement without first obtaining the written consent of the disclosing, licensed or developing Party (as the case may
be—in any event the "Privileged Party"), except as may be otherwise provided herein, or as may be required by Prometheus for purposes of investigating, commercializing, developing,
manufacturing, sublicensing, or marketing Licensed Products or for securing essential or desirable authorizations, privileges or rights from governmental agencies, or as required to be disclosed to a
governmental agency including without limitation, the FDA or the Securities and Exchange Commission, or to carry out any litigation concerning Licensed Products;  provided, however, that in each such instance, the non-Privileged Party shall use reasonable
efforts to provide notice to the Privileged Party prior to the first disclosure of any particular item of confidential information and shall use reasonable efforts to obtain confidential treatment and
covenants of use only for authorized purposes of such confidential information by the person or entity to which it is disclosed. Except with respect to Corixa's requirement to keep in confidence
information relating to the Licensed Technology and the Licensed Patents, this confidentiality obligation shall not apply to such information which is or becomes a matter of public knowledge, or is
already in the possession of the non-Privileged Party, or is disclosed to the non-Privileged Party by a Third Party having the right to do so, or is subsequently and
independently developed by employees of the non-Privileged Party who had no knowledge of the confidential information disclosed. The Parties shall take reasonable measures to assure that
no unauthorized use or disclosure is made by others to whom access to such information is granted. 

        5.2    Corixa and Prometheus Permitted Disclosures.    Nothing herein
shall be construed as preventing Corixa or Prometheus from disclosing any information received from the other Party to: (i) an Affiliate of Corixa or Prometheus, or (ii) a Third Party in
connection with a potential partnering transaction, investment, loan, merger or acquisition transaction with Corixa or Prometheus; provided,  however, that
such Affiliate, licensee, distributor or Third Party has undertaken in writing a similar obligation of confidentiality with respect to the
confidential information. 

        5.3    Required Disclosures.    Subject to the licenses granted to
Prometheus hereunder, all confidential information disclosed by one Party to the other Party shall remain the property of the disclosing Party. In the event that a court or other legal or
administrative tribunal, directly or through an appointed master, trustee or receiver, assumes partial or complete control over the assets of a Party to this Agreement based on the insolvency or
bankruptcy of such Party, the bankrupt or insolvent Party shall promptly notify, with a copy to the other Party, the court or other tribunal (i) that, subject to the licenses granted to
Prometheus hereunder, confidential information received from the other Party under this Agreement remains the property of the other Party and (ii) of the confidentiality obligations under this
Agreement. In addition, the bankrupt or insolvent Party shall, to the extent permitted by
law, take all steps necessary or desirable to maintain the confidentiality of the other Party's confidential information and to insure that the court, other 

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tribunal
or appointee maintains such information in confidence in accordance with the terms of this Agreement. 

        5.4    Press Release.    The Parties may disclose the nature of this
Agreement in a joint press release following execution; provided, however, that the releasing Party
shall obtain the prior consent of the other Party on the text of such press release, such consent not to be unreasonably withheld. In the event that either Party reasonably determines that it is
required by the applicable laws of any jurisdiction, or the rules of any stock exchange on which its securities are listed or traded, to publicly disclose information concerning this Agreement or the
rights and obligations of the Parties hereunder, including without limitation, the circumstances under which money or other consideration may become payable hereunder and the amount(s) of such
payment(s), then such Party shall provide the other Party with a reasonable opportunity to review the text of such disclosure and the disclosing Party shall use reasonable efforts to seek confidential
treatment and implement the reasonable comments provided by the other Party while still complying with such laws or rules. 

SECTION 6

INVENTIONS; FILING, PROSECUTION AND MAINTENANCE OF PATENT RIGHTS  

        6.1    Inventions.    Subject to the licenses granted to Prometheus
hereunder, Corixa shall own the entire right, title and interest in and to any and all Licensed Patents and Licensed Technology supplied to Prometheus. As between the Parties, Prometheus shall be the
sole owner of all inventions, discoveries, and know-how that pertain to the Licensed Products and Licensed Technology (and any improvements thereto) which are made solely by Prometheus, or
jointly by Prometheus and others (other than Corixa), during the Term. 

        6.2    Filing, Prosecution and Maintenance.    As between the Parties,
Prometheus shall have complete control and discretion regarding any prosecution or maintenance of the Licensed Patents and Prometheus shall be solely responsible for all costs and expenses related to
prosecution and maintenance of the Licensed Patents. Prometheus shall keep Corixa reasonably informed of the course of patent prosecution or other proceedings relating to the Licensed Patents. Each of
Prometheus and
Corixa shall hold all information disclosed to it under this Section 6.2 as confidential information under Section 5. 

        6.3    Defense of Claims.    In the event of the initiation of any
suit by a Third Party against Prometheus for patent infringement with respect to the manufacture, use or sale of the Licensed Products, Prometheus shall promptly notify Corixa in writing and
Prometheus shall have the right (but not the obligation) to defend any such suit at its own expense and Prometheus shall keep all damages or monetary awards recovered. Corixa shall cooperate and
participate as reasonably necessary in any such suit. In the event that Prometheus elects not to defend against a suit related solely to the manufacture, use or sale of Licensed Products, Corixa may
(but is not obligated to), at its own expense, defend such suit. Corixa shall be entitled to keep any damages or monetary award recovered by Corixa. Whichever party defends such suit shall keep the
other Party reasonably informed of developments with respect thereto. If a Party does not agree in writing with any settlement effected by the other Party, the non-consenting Party shall
not be required to pay any amount of such settlement and instead shall have the right (if applicable) to 

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continue
to maintain such suit against such Third Party at its own expense solely with respect to its rights under this Agreement. 

        6.4    Infringement.    In the event that Prometheus becomes aware of
actual or threatened infringement or misappropriation of a Licensed Patent or Licensed Materials based on the manufacture, use or sale by a Third Party of a Licensed Product, Prometheus shall promptly
notify Corixa in writing. Prometheus shall have the right (but not the obligation) to bring any action relating to an actual or threatened infringement or misappropriation of a Licensed Patent or
Licensed Materials based on the manufacture, use or sale by a Third Party of a Licensed Product, at its own expense, and Prometheus shall keep all damages or monetary awards recovered. Corixa shall
cooperate and participate as reasonably necessary in any such suit. In the event that Prometheus elects not to bring a suit related to such actual or threatened infringement or misappropriation solely
of the Licensed Patents or Licensed Materials, Corixa may, at its own expense, bring such suit; provided, however, that if Prometheus has, on a commercially reasonable basis, elected not to bring such
suit, Corixa agrees that it will not bring suit. In the event Corixa does bring suit for infringement or misappropriation, Corixa shall be entitled to keep any damages or monetary award recovered by
Corixa. The Parties shall keep one another informed of the status of their respective activities regarding any litigation or settlement concerning any suit under this Section 6.4. 

        6.5   CORIXA MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, OTHER THAN THOSE EXPRESSLY SET FORTH IN
SECTION 9 BELOW, WITH RESPECT TO THE LICENSED PATENTS, LICENSED PRODUCTS OR LICENSED MATERIALS, INCLUDING ANY WARRANTY OF NONINFRINGEMENT, PATENTABILITY, MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE. 

SECTION 7

TERM AND TERMINATION  

        7.1    Term.    This Agreement shall commence upon the Effective Date
and shall remain in effect until expiration of the Royalty Term unless it is earlier terminated in accordance with this Section 7 (the "Term"). 

        7.2    Termination for Material Breach.    Failure by a Party (the
"Breaching Party") to comply with any of its material obligations contained herein (a "Default") shall entitle the Party that is not in Default (the "Terminating Party") to terminate this Agreement as
provided for in this Section 7. Upon a Default, the Terminating Party shall give notice to the Breaching Party specifying the nature of the Default, demanding that it cure such Default, and
stating its intention to terminate this Agreement if such Default is not cured. If such Default is not cured within sixty (60) days after the receipt of such notice or thirty (30) days
after the receipt of such notice in the case of nonpayment, then the Terminating Party shall be entitled, without prejudice to any other rights conferred on it by this Agreement, and in addition to
any other remedies available to it by law or in equity, to terminate this Agreement; provided, however,
that any right to terminate this Agreement shall be stayed in the event that, during such thirty (30) day period, the Breaching Party shall have initiated dispute resolution in accordance with
Section 10.6 hereof with respect to the alleged Default. 

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        7.3    Consequences of Termination for Prometheus Default.    Upon a
termination of this Agreement by Corixa because of a Default by Prometheus, subject to the notice and cure provisions set forth in Section 7.2 above, all rights, licenses and options confirmed
or granted to Prometheus hereunder shall automatically terminate, free and clear of any obligation to Prometheus under this Agreement, except for the obligations of both Parties under
Sections 5 and 8. Notwithstanding any termination or expiration of this Agreement, each sublicense granted by Prometheus under Section 2 shall remain in force so long as the respective
Sublicensee fulfills its payment obligations as specified in the applicable sublicense agreement. 

        7.4    Termination by Prometheus.    At any time after Prometheus has
paid Corixa the license fee pursuant to Section 3.1, Prometheus shall have the right to terminate this Agreement upon prior notice to Corixa, which termination shall be in writing and shall be
effective sixty (60) days following the date of such written notice. 

        7.5    Termination Upon Insolvency.    This Agreement may be
terminated by either Party upon notice to the other Party should such other Party: (a) consent to the appointment of a receiver or a general assignment for the benefit of creditors, or
(b) file or consent to the filing of a petition under any bankruptcy or insolvency law or have any such petition filed against it which has not been stayed within sixty (60) days of such
filing. 

        7.6    Rights in Bankruptcy.    All rights and licenses granted under
or pursuant to this Agreement are, and shall otherwise be deemed to be, for purposes of Section 365(n) of the U.S. Bankruptcy Code, licenses of right to "intellectual property" as defined under
Section 101 of the U.S. Bankruptcy Code. 

        7.7    Accrued Rights; Surviving Obligations.    Termination of this
Agreement for any reason shall be without prejudice to any rights that shall have accrued to the benefit of a Party prior to or on account of such termination. All remedies provided hereunder or
elsewhere are cumulative. Sections 3.11, 5, 6.1, 6.5, 7.3, 8, 9 and 10 of this Agreement shall survive the termination of this Agreement for any reason and, Section 1 hereof shall
survive such termination to the extent any terms defined therein are used in such other surviving provisions. 

SECTION 8

INSURANCE; INDEMNITY  

        8.1    Insurance.    Prometheus shall maintain in full force and
effect professional liability insurance coverage with terms comparable to that maintained by other similarly situated biomedical companies engaged in similar diagnostic and development activities at
such time as a Licensed Product is being commercially distributed or sold. Prometheus shall maintain such comprehensive professional liability insurance during the period that any Licensed Product is
being commercially distributed or sold by Prometheus or its Sublicensee(s) prior to the termination of this agreement, and for an additional period of one (1) year thereafter. The amounts of
insurance coverage required under this Section 8.1 shall not be construed to create a limit of Prometheus's liability with respect to its indemnification obligation under Section 8 or
under any other provision of this Agreement. 

11

 

        8.2    Indemnification.    Subject to Section 8.3 below, from
and after the Effective Date, except as otherwise herein specifically provided, each of the Parties hereto shall defend, indemnify and hold harmless the other Party and its successors and assigns, and
their respective officers, directors, shareholders, partners and employees from and against all losses, damage, liability and expense including legal fees (but excluding punitive or consequential
damages (including lost profits)) ("Losses") incurred thereby or caused thereto arising out of or relating to (i) any breach or violation of, or failure to properly perform, any covenant or
agreement made by such Indemnifying Party (as defined in Section 8.3) in this Agreement, unless waived in writing by the Indemnified Party (as defined in Section 8.3); (ii) any
breach of any of the representations or warranties made by such Indemnifying Party in this Agreement; or (iii) the gross negligence or willful misconduct of the Indemnifying Party. 

        8.3    Indemnification Procedure.    If either Corixa or Prometheus
(in each case an "Indemnified Party") receives any written claim which it believes is the subject of indemnity hereunder by either Prometheus or Corixa, as the case may be (in each case an
"Indemnifying Party") the Indemnified Party shall, as soon as reasonably practicable after forming such belief, give notice thereof to the Indemnifying Party, including full particulars of such claim
to the extent known to the Indemnified Party; provided, however, that the failure to give timely notice
to the Indemnifying Party as contemplated hereby shall not release the Indemnifying Party from any liability to the Indemnified Party, unless such failure to provide timely notice is prejudicial to
the Indemnifying Party. The Indemnifying Party shall have the right, by prompt notice to the Indemnified Party, to assume the defense of such claim with counsel reasonably satisfactory to the
Indemnified Party, and at the cost of the Indemnifying Party. If the Indemnifying Party does not so assume the defense of such claim, the Indemnified Party may assume such defense with counsel of its
choice at the sole expense of the Indemnifying Party. If the Indemnifying Party so assumes such defense, the Indemnified Party may participate therein through counsel of its choice, but the cost of
such counsel shall be borne solely by the Indemnified Party. 

        8.4    Assistance.    The Party not assuming the defense of any such
claim shall render all reasonable assistance to the Party assuming such defense, and all out-of-pocket costs of such assistance shall be borne solely by the Indemnifying Party. 

        8.5    Settlement.    No such claim shall be settled other than by the
Party defending the same, and then only with the consent of the other Party, which shall not be unreasonably withheld; provided,  however, that the
Indemnified Party shall have no obligation to consent to any settlement of any such claim which imposes on the Indemnified Party any
liability or obligation which cannot be assumed and performed in full by the Indemnifying Party. 

        8.6    Limitation on Losses.    IN NO EVENT SHALL ANY PARTY OR ANY OF
THEIR AFFILIATES BE LIABLE FOR SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY OTHER PARTY, WHETHER IN CONTRACT, WARRANTY, NEGLIGENCE, TORT, STRICT
LIABILITY OR OTHERWISE, ARISING OUT OF (A) THE MANUFACTURE, USE OR SALE OF ANY PRODUCT DEVELOPED OR MARKETED HEREUNDER OR (B) ANY BREACH OF OR FAILURE TO PERFORM ANY OF THE PROVISIONS OF
THIS AGREEMENT EXCEPT TO THE EXTENT REQUIRED FOR AN INDEMNIFYING PARTY TO PROVIDE INDEMNITY TO AN INDEMNIFIED PARTY 

12

 

AGAINST
SUCH DAMAGES IN THE EVENT SUCH DAMAGES ARE SUCCESSFULLY ASSERTED AGAINST AN INDEMNIFIED PARTY BY A THIRD PARTY. 

SECTION 9

REPRESENTATIONS, WARRANTIES AND COVENANTS  

        9.1    Representations, Warranties and Covenants of Corixa and
Prometheus.    Each Party (but Corixa only as to Section 9.1(d), 9.1 (e), and 9.1 (f)) hereby represents, warrants and covenants to the other Parties as of the
Effective Date as follows: 

        (a)   Such
Party has the power, authority and the legal right to enter into this Agreement and to perform its obligations hereunder, and has taken all necessary action on its
part required to authorize the execution and delivery of this Agreement and the performance of its obligations hereunder. This Agreement has been duly executed and delivered on behalf of such Party
and constitutes a legal, valid, binding obligation of such Party and is enforceable against it in accordance with its terms subject to the effects of bankruptcy, insolvency, or other laws of general
application affecting the enforcement of creditor rights and judicial principles affecting the availability of specific performance and general principles of equity, whether enforceability is
considered a proceeding at law or equity. 

        (b)   The
execution and delivery of this Agreement and the performance of such Party's obligations hereunder do not conflict with or violate any requirement of applicable law
or regulation or any provision of articles of incorporation, bylaws or limited partnership agreement of such Party, as applicable, in any material way, and do not conflict with, violate, or breach or
constitute a default or require any consent under, any contractual obligation or court or administrative order by which such Party is bound. 

        (c)   Such
Party is a legally organized entity and in good standing under the laws of the state of its incorporation, and has full power and authority and the legal right to
own and operate its property and assets and to carry on its business as it is now being conducted and as it is contemplated to be conducted by this Agreement. 

        (d)   To
the extent that Corixa is granting any licenses to intellectual property hereunder, to the best of its knowledge, Corixa owns the right, title and interest in and to
such intellectual property. 

        (e)   To
the best of Corixa's knowledge, there is no Third Party infringement of the Licensed Patents. 

        (f)    Corixa
has not received any notification from any Third Party that the practice of the Licensed Technology or Licensed Patents infringes or may infringe any Third Party
patent right(s) or other intellectual property. 

EXCEPT
AS EXPRESSLY SET FORTH IN THIS AGREEMENT, THE PARTIES DISCLAIM ALL WARRANTIES WHATSOEVER, EITHER EXPRESS OR IMPLIED, INCLUDING WARRANTIES AS TO THE MERCHANTABILITY, OR FITNESS FOR A PARTICULAR
PURPOSE. 

13

 
SECTION 10

Miscellaneous  

        10.1    Force Majeure.    If the performance
of any part of this Agreement by any Party, or of any obligation under this Agreement, is prevented, restricted, interfered with or delayed by reason of any cause beyond the control of the Party
liable to perform, unless conclusive evidence to the contrary is provided, the Party so affected shall, upon giving written notice to the other Parties, be excused from such performance to the extent
of such prevention, restriction, interference or delay, provided that the affected Party shall use its reasonable best efforts to avoid or remove such causes of nonperformance and shall continue
performance with the utmost dispatch whenever such causes are removed. When such circumstances arise, the Parties shall discuss what, if any, modification of the terms of this Agreement may be
required in order to arrive at an equitable solution. 

        10.2    Assignment.    Without the prior written consent of the other
Party hereto, neither Party shall sell, transfer, assign, delegate, pledge, or otherwise dispose of, whether voluntarily, involuntarily, by operation of law or otherwise, this Agreement or any of its
rights or duties hereunder; provided, however, that either Party may assign this Agreement, without the
consent of the other Party, to the purchaser or successor by merger, consolidation or change of control of all or substantially all of its business or assets relating to this Agreement. 

        10.3    Severability.    

        (a)   In
the event any portion of this Agreement shall be held illegal, void or ineffective, the remaining portions hereof shall remain in full force and effect. 

        (b)   If
any of the terms or provisions of this Agreement are in conflict with any applicable statute or rule of law, then such terms or provisions shall be deemed inoperative
to the extent that they may conflict therewith and shall be deemed to be modified to conform with such statute or rule of law provided that such conformity is in accordance with the intent of the
Parties. 

        10.4    Governing Law.    This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without reference to the rules of conflict of laws thereof. 

        10.5    Notices.    All notices or other communications that are
required or permitted hereunder shall be in writing and delivered personally, sent by telecopier (and promptly confirmed by personal delivery, registered or certified mail or overnight courier), sent
by nationally-recognized overnight courier or sent by registered or certified mail, postage prepaid, return receipt requested, addressed as follows: 

        If to Corixa, to:  

Corixa
Corporation

1124 Columbia Street, Suite 200

Seattle, Washington 98104

Attn: Chairman and Chief Executive Officer 

14

 

Fax:
(206) 754-5994 

with
a copy to:

General Counsel 

        If to Prometheus, to:  

Prometheus
Laboratories Inc.

5739 Pacific Center Boulevard

San Diego, California 92121

Attn.: President and Chief Executive Officer 

Fax:
(858) 410-1945 

with
a copy to:

Legal Counsel 

or
to such other address as the Party to whom notice is to be given may have furnished to the other Party in writing in accordance herewith. Any such communication shall be deemed to have been given:
(i) when delivered, if personally delivered or sent by telecopier on a business day, (ii) on the business day after dispatch, if sent by nationally-recognized overnight courier, and
(iii) on the third business day following the date of mailing, if sent by registered mail. It is understood and agreed that this Section 10.5 is not intended to govern the
day-to-day business communications necessary between the Parties in performing their duties, in due course, under the terms of this Agreement. 

        10.6    Dispute Resolution.    

        (a)   Prior
to engaging in any formal dispute resolution with respect to any dispute, controversy or claim arising out of or in relation to this Agreement or the breach,
termination or invalidity hereof (each, a "Dispute"), the Chief Executive Officers of the Parties shall attempt over a period of
forty-five (45) days to resolve such Dispute. Such attempt may at the request of a Party include a thirty (30) day period of mediation by a Third Party whose selection is
agreed upon by the Parties. In the event of mediation, the Parties in dispute shall bear equally the costs associated with the mediation. 

        (b)   Any
dispute, controversy or claim arising out of or in relation to this Agreement or the breach, termination or invalidity hereof that cannot be settled amicably by
agreement of the Parties pursuant to Section 10.6(a) shall be finally settled by arbitration in accordance with the arbitration rules of the American Arbitration Association ("AAA") then in
force. The place of arbitration shall be Seattle, Washington if claim brought by Prometheus or in San Diego, California if claim brought by Corixa. The arbitrator's award rendered shall be final and
binding upon the Parties. Judgment upon the award may be entered in any court having jurisdiction, or application may be made to such court for judicial acceptance of the award and/or an order of
enforcement as the case may be. 

        10.7    Modifications.    No amendment, modification, release or
discharge hereof shall be binding upon the Parties unless in writing and duly executed by authorized representatives of both Parties. 

15

 

        10.8    Headings.    The headings used in this Agreement are intended
for convenience only and shall not be considered part of the written understanding between the Parties and shall not affect the construction of this Agreement. 

        10.9    Equitable Relief.    Notwithstanding anything herein to the
contrary, nothing in this Agreement shall preclude a Party from seeking interim or provisional relief, in the form of a temporary restraining order, preliminary injunction or other interim equitable
relief concerning a dispute prior to or during an arbitration pursuant to Section 10.6 where necessary or appropriate to protect the interests of such Party. 

        10.10    Waiver.    The waiver by a Party hereto of any right
hereunder or the failure to perform or a breach by the other Party shall not be deemed a waiver of any other right hereunder or of any other breach or failure by said other Party whether of a similar
nature or otherwise. 

        10.11    Counterparts.    This Agreement may be executed in two
(2) or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 

        10.12    No Benefit to Third Parties.    The representations,
warranties, covenants and agreements set forth in this Agreement are for the sole benefit of the Parties hereto and their successors and permitted assigns, and they shall not be construed as
conferring any rights on any Third Parties. 

        10.13    Construction.    Except where the context otherwise requires,
wherever used, the singular shall include the plural, the plural the singular, the use of any gender shall be applicable to all genders and the word "or" is used in the inclusive sense. The captions
of this Agreement are for convenience of reference only and in no way define, describe, extend or limit the scope or intent of this Agreement or the intent of any provision contained in this
Agreement. The Parties have participated equally in the formation of this Agreement; the language of this Agreement shall not be presumptively construed against any Party. 

        10.14    Entire Agreement.    This Agreement constitutes the entire
agreement between the Parties relating to the subject matter hereof and supersedes all previous writings and understandings. 

16

 

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

	CORIXA CORPORATION	 	PROMETHEUS LABORATORIES INC.
	 	 	 	 	 
	By:	/s/  ILLEGIBLE      
	 	By:	/s/  JOSEPH M. LIMBER      

	Name:	Illegible
	 	Name:	Joseph M. Limber

	Title:	CEO
	 	Title:	President, CEO

17

 
EXHIBIT 1.13—LICENSED MATERIALS  

CBirl_Full-length
nucleotide sequence

[***] 

CBirl_Amino
plus variable region nucleotide sequence

[***] 

Cbirl_Amino
terminal nucleotide sequence

[***] 

CBirl_Carboxyl
terminal nucleotide sequence

[***]

>CBirl
Full length protein sequence (minus Met and His tag) 

[***]

>CBirl
Amino plus variable protein sequence (minus Met and His tag) 

[***] 

>CBirl
Amino terminal protein sequence (minus Met and His tag) 

[***] 

>CBirl
Carboxyl terminal protein sequence (minus Met and His tag) 

[***]

***
Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. 

18

 
EXHIBIT 1.14—LICENSED PATENTS  

	Case Number
 
	 	Country
	 	App. No./Filing Date
	 	Patent No./Issue Date
	 	Status

	584C1	 	US	 	10/449,857

30-May-2003	 	 	 	PENDING
	584WO	 	PCT	 	US02/40422

16-Dec-2002	 	 	 	PUBLISHED
	714P1	 	US	 	60/475,829

04-Jun-2003	 	 	 	PENDING

(PROVISIONAL)

19

QuickLinks

Exhibit 10.36QuickLinks
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Exhibit 4.2    
    

 
 

ZOGENIX, INC.    
    
    AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT    
    
    December 13, 2007    
    

 

 

 
 

TABLE OF CONTENTS    
    

	 
	 	 
	 	Page

	Section 1	 	Definitions	 	1
	

1.1	
 	
Certain Definitions	
 	

1
	

Section 2	
 	

Registration Rights	
 	

3
	

2.1	
 	
Requested Registration	
 	

3
	2.2	 	Company Registration	 	5
	2.3	 	Registration on Form S-3	 	6
	2.4	 	Expenses of Registration	 	7
	2.5	 	Registration Procedure	 	7
	2.6	 	Indemnification	 	8
	2.7	 	Information by Holder	 	10
	2.8	 	Restrictions on Transfer	 	10
	2.9	 	Rule 144 Reporting	 	12
	2.10	 	Market Stand-Off Agreement	 	12
	2.11	 	Delay of Registration	 	13
	2.12	 	Transfer or Assignment of Registration Rights	 	13
	2.13	 	Limitations on Subsequent Registration Rights	 	13
	2.14	 	Termination of Registration Rights	 	13
	

Section 3	
 	

Covenants of the Company	
 	

14
	

3.1	
 	
Basic Financial Information and Inspection Rights	
 	

14
	3.2	 	Confidentiality	 	15
	3.3	 	Proprietary Information and Inventions Agreements	 	15
	3.4	 	Employee Agreements	 	15
	3.5	 	Board of Directors Reimbursement	 	15
	3.6	 	Board of Directors Compensation	 	15
	3.7	 	Board Observer Rights	 	15
	3.8	 	D&O Insurance	 	15
	3.9	 	Section 1202(c) Compliance	 	15
	3.10	 	Termination of Covenants	 	16
	

Section 4	
 	

Right of First Refusal	
 	

16
	

4.1	
 	
Right of First Refusal to Significant Holders	
 	

16
	

Section 5	
 	

Miscellaneous	
 	

17
	

5.1	
 	
Amendment	
 	

17
	5.2	 	Amendment and Termination of Prior Rights Agreement	 	18
	5.3	 	Notices	 	18
	5.4	 	Governing Law	 	19
	5.5	 	Successors and Assigns	 	19
	5.6	 	Entire Agreement	 	19
	5.7	 	Delays or Omissions	 	19
	5.8	 	Severability	 	19
	5.9	 	Titles and Subtitles	 	19
	5.10	 	Counterparts	 	19
	5.11	 	Telecopy Execution and Delivery	 	19
	5.12	 	Jurisdiction; Venue	 	19
	5.13	 	Further Assurances	 	20
	5.14	 	Termination Upon Change of Control	 	20
	5.15	 	Attorneys' Fees	 	20
	5.16	 	Aggregation of Stock	 	20

i

 

 
 

ZOGENIX, INC.
  AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT    
    

        This Amended and Restated Investors' Rights Agreement (this "Agreement") is made as of December 13, 2007,
by and among Zogenix, Inc., a Delaware corporation (the "Company"), and the persons and entities (each, an
"Investor" and collectively, the "Investors") listed on  Exhibit A hereto. Unless otherwise defined
herein, capitalized terms used in this Agreement have the meanings ascribed to them in
Section 1. 

 
 

RECITALS    
    

        WHEREAS:    The Company and certain of the Investors are parties to that certain Investors' Rights Agreement dated as of
August 25, 2006 (the "Prior Rights Agreement"). 

        WHEREAS:    Certain of the Investors are purchasing shares of the Company's Series A-2 Preferred Stock, par
value $0.001 per share (the "Series A-2 Preferred") pursuant to the Series A-2 and Series A-3
Preferred Stock Purchase Agreement of even date herewith (the "Purchase Agreement"), certain Investors may be obligated to purchase shares of the
Company's Series A-3 Preferred Stock, par value $0.001 per share (the "Series A-3 Preferred"), pursuant to an
equity line of credit set forth in the Purchase Agreement and certain other Investors have previously purchased shares of the Company's Series A Preferred Stock, which pursuant to the Company's
Third Amended and Restated Certificate of Incorporation were automatically reclassified into shares of the Company's Series A-1 Preferred Stock, par value $0.001 per share (the
"Series A-1 Preferred", and together with the Series A-2 Preferred and the Series A-3
Preferred, the "Preferred Stock"). 

        WHEREAS:    It is a condition to the closing of the sale of the Series A-2 Preferred to the Investors listed
on the Schedule of Investors to the Purchase Agreement that the Investors and the Company execute and deliver this Agreement. 

        WHEREAS:    The parties to the Prior Rights Agreement desire to hereby amend and restate the Prior Rights Agreement in its
entirety. 

        NOW, THEREFORE:    In consideration of the mutual promises and covenants set forth herein, and other consideration, the receipt
and adequacy of which is hereby acknowledged, the parties hereto agree as follows: 

 
 

Section 1
  Definitions    
    

        1.1    Certain Definitions.    As used in this Agreement, the following terms shall have the meanings set forth below: 

	(a)
	"Commission" shall mean the Securities and Exchange Commission or any other federal agency at the time administering the Securities
Act.

	(b)
	"Common Stock" means the Company's common stock, par value $0.001 per share.

	(c)
	"Conversion Stock" shall mean shares of Common Stock issued upon conversion of the Series A-1 Preferred, the
Series A-2 Preferred and the Series A-3 Preferred.

	(d)
	"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended, or any similar successor federal statute and the rules and
regulations thereunder, all as the same shall be in effect from time to time.

	(e)
	"GE Shares" shall mean the shares of the Company's Series A Preferred Stock issuable upon exercise or conversion of the GECC
Warrant.

	(f)
	"GECC" shall mean General Electric Capital Corporation.

	(g)
	"GECC Warrant" shall mean that certain warrant dated March 5, 2007, issued to GECC. 

 

	(h)
	"Holder" shall mean (i) any Investor holding Registrable Securities, (ii) solely for purposes of Sections 2.1(e),
2.2, 2.3(d), 2.4, 2.5, 2.6, 2.7, 2.10, 2.11, 2.12 and 5 of this Agreement, GECC to the extent that it holds Registrable Securities and (iii) any holder of Registrable Securities to whom the
registration rights conferred by this Agreement have been duly and validly transferred in accordance with Section 2.12 of this Agreement.

	(i)
	"Indemnified Party" shall have the meaning set forth in Section 2.6(c) hereto.

	(j)
	"Indemnifying Party" shall have the meaning set forth in Section 2.6(c) hereto.

	(k)
	"Initial Public Offering" shall mean the closing of the Company's first firm commitment underwritten public offering of the Company's
Common Stock registered under the Securities Act.

	(l)
	"Initiating Holders" shall mean any Holder or Holders who in the aggregate hold at least thirty percent (30%) of the outstanding
Registrable Securities.

	(m)
	"Investors" shall mean the persons and entities listed on Exhibit A hereto.

	(n)
	"New Securities" shall have the meaning set forth in Section 4.1(a) hereto.

	(o)
	"Other Selling Stockholders" shall mean persons other than Holders who, by virtue of agreements with the Company, are entitled to
include their Other Shares in certain registrations hereunder.

	(p)
	"Other Shares" shall mean shares of Common Stock, other than Registrable Securities (as defined below), with respect to which
registration rights have been granted.

	(q)
	"Registrable Securities" shall mean (i) shares of Common Stock issued or issuable pursuant to the conversion of the Shares and,
solely for purposes of Sections 2.1(e), 2.2, 2.3(d), 2.4, 2.5, 2.6, 2.7, 2.10, 2.11, 2.12 and 5 of this Agreement, shares of Common Stock issuable pursuant to the conversion of the GE Shares
and (ii) any Common Stock of the Company issued as a dividend or other distribution with respect to or in exchange for or in replacement of the Shares referenced in clause (i) above (or
the shares of Common Stock referenced in clause (i) above); provided, however, that Registrable
Securities shall not include any shares of Common Stock described in clause (i) or (ii) above which have previously been registered or which have been sold to the public either pursuant
to a registration statement or Rule 144, or which have been sold in a private transaction in which the transferor's rights under this Agreement are not validly assigned in accordance with this
Agreement.

	(r)
	The
terms "register," "registered" and
"registration" shall refer to a registration effected by preparing and filing a registration statement in compliance with the Securities Act and
applicable rules and regulations thereunder, and the declaration or ordering of the effectiveness of such registration statement.

	(s)
	"Registration Expenses" shall mean all expenses incurred in effecting any registration pursuant to this Agreement, including, without
limitation, all registration, qualification, and filing fees, printing expenses, escrow fees, fees and disbursements of counsel for the Company and one special counsel for the Holders, blue sky fees
and expenses, and expenses of any regular or special audits incident to or required by any such registration, but shall not include Selling Expenses, fees and disbursements of other counsel for the
Holders and the compensation of regular employees of the Company, which shall be paid in any event by the Company.

	(t)
	"Restricted Securities" shall mean any Registrable Securities required to bear the first legend set forth in  Section 2.8(c) hereof. 

2

 

	(u)
	"Rule 144" shall mean Rule 144 as promulgated by the Commission under the Securities Act, as such Rule may be amended
from time to time, or any similar successor rule that may be promulgated by the Commission.

	(v)
	"Rule 145" shall mean Rule 145 as promulgated by the Commission under the Securities Act, as such Rule may be amended
from time to time, or any similar successor rule that may be promulgated by the Commission

	(w)
	"Rule 415" shall mean Rule 415 as promulgated by the Commission under the Securities Act, as such Rule may be amended
from time to time, or any similar successor rule that may be promulgated by the Commission.

	(x)
	"Securities Act" shall mean the Securities Act of 1933, as amended, or any similar successor federal statute and the rules and
regulations thereunder, all as the same shall be in effect from time to time.

	(y)
	"Selling Expenses" shall mean all underwriting discounts, selling commissions and stock transfer taxes applicable to the sale of
Registrable Securities and fees and disbursements of counsel for any Holder (other than the fees and disbursements of one special counsel to the Holders included in Registration Expenses).

	(z)
	"Shares" shall mean the Preferred Stock.

	(aa)
	"Significant Holders" shall have the meaning set forth in Section 4.1 hereof.

	(bb)
	"Withdrawn Registration" shall mean a forfeited demand registration under  Section 2.1 in accordance with the terms and conditions of Section 2.4. 

 
 

Section 2
  Registration Rights    
    

        2.1    Requested Registration.    

        (a)    Request for Registration.    Subject to the conditions set forth in this  Section 2.1, if the Company shall receive from
Initiating Holders a written request signed by such Initiating Holders that the Company effect any
registration with respect to all or a part of the Registrable Securities (such request shall state the number of shares of Registrable Securities to be disposed of and the intended methods of
disposition of such shares by such Initiating Holders), the Company will: 

	(i)
	promptly
give written notice of the proposed registration to all other Holders; and

	(ii)
	as
soon as practicable, file and use its best efforts to effect such registration (including, without limitation, filing post-effective amendments,
appropriate qualifications under applicable blue sky or other state securities laws, and appropriate compliance with the Securities Act) and to permit or facilitate the sale and distribution of all or
such portion of such Registrable Securities as are specified in such request, together with all or such portion of the Registrable Securities of any Holder or Holders joining in such request as are
specified in a written request received by the Company within twenty (20) days after such written notice from the Company is mailed or delivered. 

3

 

        (b)    Limitations on Requested Registration.    The Company shall not be obligated to effect, or to take any action
to effect, any such registration pursuant to this Section 2.1: 

	(i)
	Prior
to the earlier of (A) the five (5) year anniversary of the date of this Agreement or (B) one hundred eighty (180) days following the
effective date of the Initial Public Offering;

	(ii)
	If
the Initiating Holders, together with the holders of any other securities of the Company entitled to inclusion in such registration statement, propose to sell
Registrable Securities and such other securities (if any) and the aggregate proceeds of which (after deduction for underwriter's discounts and expenses related to the issuance) are less than
$10,000,000;

	(iii)
	In
any particular jurisdiction in which the Company would be required to execute a general consent to service of process in effecting such registration, qualification,
or compliance, unless the Company is already subject to service in such jurisdiction and except as may be required by the Securities Act;

	(iv)
	After
the Company has initiated three such registrations pursuant to this Section 2.1;

	(v)
	During
the period starting with the date sixty (60) days prior to the Company's good faith estimate of the date of filing of, and ending on a date one hundred
eighty (180) days after the effective date of, a Company-initiated registration (or ending on the subsequent date on which all market stand-off agreements applicable to the offering
have terminated); provided that the Company is actively employing in good faith best efforts to cause such registration statement to become effective;
or

	(vi)
	If
the Initiating Holders propose to dispose of shares of Registrable Securities which may be immediately registered on Form S-3 pursuant to a
request made under Section 2.3 hereof. 

        (c)    Deferral.    If (i) in the good faith judgment of the Board of Directors of the Company, the filing of a
registration statement covering the Registrable Securities would be detrimental to the Company and the Board of Directors of the Company concludes, as a result, that it is in the best interests of the
Company to defer the filing of such registration statement at such time, and (ii) the Company shall furnish to such Holders a certificate signed by the President of the Company stating that in
the good faith judgment of the Board of Directors of the Company, it would be detrimental to the Company for
such registration statement to be filed in the near future and that it is, therefore, in the best interests of the Company to defer the filing of such registration statement, then (in addition to the
limitations set forth in Section 2.1(b)(v) above) the Company shall have the right to defer such filing for a period of not more than one hundred
twenty (120) days after receipt of the request of the Initiating Holders, and, provided further, that the Company shall not defer its obligation in this manner more than once in any
twelve-month period. 

        (d)    Other Shares.    The registration statement filed pursuant to the request of the Initiating Holders may,
subject to the provisions of Section 2.1(e), include Other Shares, and may include securities of the Company being sold for the account of the
Company. 

        (e)    Underwriting.    If the Initiating Holders intend to distribute the Registrable Securities covered by their
request by means of an underwriting, they shall so advise the Company as a part of their request made pursuant to this Section 2.1 and the
Company shall include such information in the written notice given pursuant to Section 2.1(a)(i). In such event, the right of any Holder to
include all or any portion of its Registrable Securities in such registration 

4

 

pursuant
to this Section 2.1 shall be conditioned upon such Holder's participation in such underwriting and the inclusion of such Holder's
Registrable Securities to the extent provided herein. If the Company shall request inclusion in any registration pursuant to Section 2.1 of
securities being sold for its own account, or if other persons shall request inclusion in any registration pursuant to Section 2.1, the
Initiating Holders shall, on behalf of all Holders, offer to include such securities in the underwriting and such offer shall be conditioned upon the participation of the Company or such other persons
in such underwriting and the inclusion of the Company's and such person's other securities of the Company and their acceptance of the further applicable provisions of this  Section 2 (including
Section 2.10). The Company shall (together with all Holders and other
persons proposing to distribute their securities through such underwriting) enter into an underwriting agreement in customary form with the representative of the underwriter or underwriters selected
for such underwriting by a majority in interest of the Initiating Holders, which underwriters are reasonably acceptable to the Company. 

        Notwithstanding
any other provision of this Section 2.1, if the underwriters advise the Initiating Holders in writing that market
factors require a limitation on the number of shares to be underwritten, the number of Registrable Securities and Other Shares that may be so included shall be allocated as follows: (i) first,
among all the Holders (excluding GECC) requesting to include Registrable Securities held by such Holders, assuming conversion; (ii) second, to GECC; (iii) third, to the Other Selling
Stockholders; and (iv) fourth, to the Company, which the Company may allocate, at its discretion, for its own account, or for the account of other holders or employees of the Company. 

        If
a person who has requested inclusion in such registration as provided above does not agree to the terms of any such underwriting, such person shall be excluded therefrom by written
notice from the Company, the underwriter or the Initiating Holders. The securities so excluded shall also be withdrawn from registration. Any Registrable Securities or other securities excluded or
withdrawn from such underwriting shall also be withdrawn from such registration. If shares are so withdrawn from the
registration and if the number of shares to be included in such registration was previously reduced as a result of marketing factors pursuant to this  Section 2.1(e), then the Company shall then
offer to all Holders and Other Selling Stockholders who have retained rights to include securities in
the registration the right to include additional Registrable Securities or Other Shares in the registration in an aggregate amount equal to the number of shares so withdrawn, with such shares to be
allocated among such Holders and Other Selling Stockholders requesting additional inclusion, as set forth above. 

        2.2    Company Registration.    

        (a)    Company Registration.    If the Company shall determine to register any of its securities either for its own
account or the account of a security holder or holders, other than a registration pursuant to Section 2.1 or  2.3, a registration relating solely to
employee benefit plans, a registration relating to the offer and sale of debt securities, a registration relating
to a corporate reorganization or other Rule 145 transaction, or a registration on any registration form that does not permit secondary sales, the Company will: 

	(i)
	promptly
give written notice of the proposed registration to all Holders; and

	(ii)
	use
its best efforts to include in such registration (and any related qualification under blue sky laws or other compliance), except as set forth in  Section 2.2(b) below, and in any underwriting
involved therein, all of such Registrable Securities as are specified in a written request or
requests made by any Holder or Holders received by the Company within ten (10) days after such written notice from the Company is mailed or delivered. Such written request may specify all or a
part of a Holder's Registrable Securities. 

5

 

        (b)    Underwriting.    If the registration of which the Company gives notice is for a registered public offering
involving an underwriting, the Company shall so advise the Holders as a part of the written notice given pursuant to Section 2.2(a)(i). In such
event, the right of any Holder to registration pursuant to this Section 2.2 shall be conditioned upon such Holder's participation in such
underwriting and the inclusion of such Holder's Registrable Securities in the underwriting to the extent provided herein. All Holders proposing to distribute their securities through such underwriting
shall (together with the Company and the Other Selling Stockholders other holders of securities of the Company with registration rights to participate therein distributing their securities through
such underwriting) enter into an underwriting agreement in customary form with the representative of the underwriter or underwriters selected by the Company. 

        Notwithstanding
any other provision of this Section 2.2, if the underwriters advise the Company in writing that marketing factors
require a limitation on the number of shares to be underwritten, the underwriters may (subject to the limitations set forth below) exclude all Registrable Securities from, or limit the number of
Registrable Securities to be included in, the registration and underwriting; provided that the number of Registrable Securities included in such
registration and underwriting shall not be reduced below 30% of the securities included in such registration unless such offering is the Company's Initial Public Offering in which case the Holders may
be excluded entirely if the underwriters make the determination described above and no securities other than those of the Company are included in such registration. The Company shall so advise all
holders of securities requesting registration, and the number of shares of securities that are entitled to be included in the registration and underwriting shall be allocated, as follows:
(i) first, to the Company for securities being sold for its own account, (ii) second, to the Holders requesting to include Registrable Securities in such registration statement based on
the pro rata percentage of Registrable Securities held by such Holders, assuming conversion and (iii) third, to the Other Selling Stockholders requesting to include Other Shares in such
registration statement based on the pro rata percentage of Other Shares held by such Other Selling Stockholders, assuming conversion. 

        If
a person who has requested inclusion in such registration as provided above does not agree to the terms of any such underwriting, such person shall also be excluded therefrom by
written notice from the Company or the underwriter. The Registrable Securities or other securities so excluded shall also be withdrawn from such registration. Any Registrable Securities or other
securities excluded or withdrawn from such underwriting shall be withdrawn from such registration. 

        (c)    Right to Terminate Registration.    The Company shall have the right to terminate or withdraw any registration
initiated by it under this Section 2.2 prior to the effectiveness of such registration whether or not any Holder has elected to include
securities in such registration. The expenses of such withdrawn registration shall be borne by the Company. 

        2.3    Registration on Form S-3.    

        (a)    Request for Form S-3 Registration.    After its Initial Public Offering, the Company shall
use its best efforts to qualify for registration on Form S-3 or any comparable or successor form or forms. After the Company has qualified for the use of
Form S-3, in addition to the rights contained in the foregoing provisions of this Section 2 and subject to the conditions set
forth in this Section 2.3, if the Company shall receive from a Holder or Holders of Registrable Securities a written request that the Company
effect any registration on Form S-3 or any similar short form registration statement with respect to all or part of the Registrable Securities (such request shall state the number
of shares of Registrable Securities to be disposed of and the intended methods of disposition of such shares by such Holder or Holders), the Company will take all such action with respect to such
Registrable Securities as required by Section 2.1(a)(i) and (ii). 

6

 

        (b)    Limitations on Form S-3 Registration.    The Company shall not be obligated to effect, or
take any action to effect, any such registration pursuant to this Section 2.3: 

	(i)
	In
the circumstances described in either Sections 2.1(b)(i),  2.1(b)(iii) or 2.1(b)(v);

	(ii)
	If
the Holders, together with the holders of any other securities of the Company entitled to inclusion in such registration, propose to sell Registrable Securities and
such other securities (if any) on Form S-3 at an aggregate price to the public of less than $5,000,000; or

	(iii)
	If,
in a given twelve-month period, the Company has effected two (2) such registrations in such period. 

        (c)    Deferral.    The provisions of Section 2.1(c) shall
apply to any registration pursuant to this Section 2.3. 

        (d)    Underwriting.    If the Holders of Registrable Securities requesting registration under this  Section 2.3 intend to
distribute the Registrable Securities covered by their request by means of an underwriting, the provisions of  Sections 2.1(e) shall apply to such registration. Notwithstanding anything contained
herein to the contrary, registrations effected pursuant to
this Section 2.3 shall not be counted as requests for registration or registrations effected pursuant to  Section 2.1. 

        2.4    Expenses of Registration.    All Registration Expenses incurred in connection with registrations pursuant to  Sections 2.1, 2.2 and 2.3 hereof shall be borne
by the Company; provided, however, that the Company shall not be required to pay for any expenses of any
registration proceeding begun pursuant to Sections 2.1 and 2.3 if the registration request is
subsequently withdrawn at the request of the Holders of a majority of the Registrable Securities to be registered or because a sufficient number of Holders shall have withdrawn so that the minimum
offering conditions set forth in Sections 2.1 and 2.3 are no longer satisfied (in which case all
participating Holders shall bear such expenses pro rata among each other based on the number of Registrable Securities requested to be so registered), unless the Holders of a majority of the
Registrable Securities agree to forfeit their right to a demand registration pursuant to Section 2.1. Notwithstanding the foregoing, if at the
time of such withdrawal, the Holders have learned of a material adverse change in the condition, business or prospects of the Company from that
known to the Holders at the time of their request and have withdrawn the request with reasonable promptness following disclosure by the Company of such material adverse change, then the Holders shall
not be required to pay any of such expenses and shall retain their rights pursuant to Sections 2.1 and  2.3. All Selling Expenses relating to
securities registered on behalf of the Holders shall be borne by the holders of securities included in such
registration pro rata among each other on the basis of the number of Registrable Securities so registered. 

        2.5    Registration Procedures.    In the case of each registration effected by the Company pursuant to  Section 2, the Company
will keep each Holder advised in writing as to the initiation of each registration and as to the completion thereof. At
its expense, the Company will use its best efforts to: 

	(a)
	Keep
such registration effective for a period of ending on the earlier of the date which is one hundred twenty (120) days from the effective date of the registration statement
or such time as the Holder or Holders have completed the distribution described in the registration statement relating thereto;

	(b)
	Prepare
and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be
necessary to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement for the period set forth in subsection (a)
above; 

7

 

	(c)
	Furnish
such number of prospectuses, including any preliminary prospectuses, and other documents incident thereto, including any amendment of or supplement to the prospectus, as a
Holder from time to time may reasonably request;

	(d)
	Use
its best efforts to register and qualify the securities covered by such registration statement under such other securities or Blue Sky laws of such jurisdiction as shall be
reasonably requested by the Holders; provided, that the Company shall not be required in connection therewith or as a condition thereto to qualify to do
business or to file a general consent to service of process in any such states or jurisdictions;

	(e)
	Notify
each seller of Registrable Securities covered by such registration statement at any time when a prospectus relating thereto is required to be delivered under the Securities Act
of the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements therein not misleading or incomplete in light of the circumstances then existing, and following such notification
promptly prepare and furnish to such seller a reasonable number of copies of a supplement to or an amendment of such prospectus as may be necessary so that, as thereafter delivered to the purchasers
of such shares, 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 or incomplete in light of the circumstances then existing;

	(f)
	Provide
a transfer agent and registrar for all Registrable Securities registered pursuant to such registration statement and a CUSIP number for all such Registrable Securities, in
each case not later than the effective date of such registration;

	(g)
	Cause
all such Registrable Securities registered pursuant hereunder to be listed on each securities exchange on which similar securities issued by the Company are then listed; and

	(h)
	In
connection with any underwritten offering pursuant to a registration statement filed pursuant to Section 2.1 hereof, enter
into an underwriting agreement in form reasonably necessary to effect the offer and sale of Common Stock, provided such underwriting agreement contains reasonable and customary provisions, and
provided further, that each Holder participating in such underwriting shall also enter into and perform its obligations under such an agreement. 

        2.6    Indemnification.    

	(a)
	To
the extent permitted by law, the Company will indemnify and hold harmless each Holder, each of its officers, directors and partners, legal counsel and accountants and each person
controlling such Holder within the meaning of Section 15 of the Securities Act, with respect to which registration, qualification or compliance has been effected pursuant to this  Section 2,
and each underwriter, if any, and each person who controls within the meaning of Section 15 of the Securities Act any
underwriter, against all expenses, claims, losses, damages and liabilities (or actions, proceedings or settlements in respect thereof) arising out of or based on: (i) any untrue statement (or
alleged untrue statement) of a material fact contained or incorporated by reference in any prospectus, offering circular or other document (including any related registration statement, notification
or the like) incident to any such registration, qualification or compliance, (ii) any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary
to make the statements therein not misleading, or (iii) any violation (or alleged violation) by the Company of the Securities Act, any state securities laws or any rule or regulation thereunder
applicable to the Company and relating to action or inaction required of the Company in connection with any offering covered by 

8

 

such
registration, qualification or compliance, and the Company will reimburse each such Holder, each of its officers, directors, partners, legal counsel and accountants and each person controlling
such Holder, each such underwriter and each person who controls any such underwriter, for any legal and any other expenses reasonably incurred in connection with investigating and defending or
settling any such claim, loss, damage, liability or action; provided that the Company will not be liable in any such case to the extent that any such
claim, loss, damage, liability, or action arises out of or is based on any untrue statement or omission based upon written information furnished to the Company by such Holder, any of such Holder's
officers, directors, partners, legal counsel or accountants, any person controlling such Holder, such underwriter or any person who controls any such underwriter, and stated to be specifically for use
therein; and provided, further that, the indemnity agreement contained in this  Section 2.6(a) shall not
apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected
without the consent of the Company (which consent shall not be unreasonably withheld). 

	(b)
	To
the extent permitted by law, each Holder will, if Registrable Securities held by such Holder are included in the securities as to which such registration, qualification or
compliance is being effected, indemnify and hold harmless the Company, each of its directors, officers, partners, legal counsel and accountants and each underwriter, if any, of the Company's
securities covered by such a registration statement, each person who controls the Company or such underwriter within the meaning of Section 15 of the Securities Act, each other such Holder, and
each of their officers, directors and partners, and each person controlling each other such Holder, against all claims, losses, damages and liabilities (or actions in respect thereof) arising out of
or based on: (i) any untrue statement (or alleged untrue statement) of a material fact contained or incorporated by reference in any prospectus, offering circular or other document (including
any related registration statement, notification, or the like) incident to any such registration, qualification or compliance, or (ii) any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse the Company and such Holders, directors, officers, partners, legal counsel
and accountants, persons, underwriters, or control persons for any legal or any other expenses reasonably incurred in connection with investigating or defending any such claim, loss, damage, liability
or action, in each case to the extent, but only to the extent, that such untrue statement (or alleged untrue statement) or omission (or alleged omission) is made in such registration statement,
prospectus, offering circular or other document in reliance upon and in conformity with written information furnished to the Company by such Holder and stated to be specifically for use therein;  provided, however, that the obligations of such Holder hereunder shall not apply to amounts paid in
settlement of any such claims, losses, damages or liabilities (or actions in respect thereof) if such settlement is effected without the consent of such Holder (which consent shall not be unreasonably
withheld); and provided that in no event shall any indemnity under this Section 2.6 exceed the
net proceeds from the offering received by such Holder, except in the case of fraud or willful misconduct by such Holder.

	(c)
	Each
party entitled to indemnification under this Section 2.6 (the "Indemnified
Party") shall give notice to the party required to provide indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity may be sought, and shall permit the Indemnifying Party to assume the defense of such claim or any litigation resulting
therefrom; provided that counsel for the Indemnifying Party, who shall conduct the defense of such claim or any litigation resulting therefrom, shall be
approved by the Indemnified Party (whose approval shall not be 

9

 

unreasonably
withheld), and the Indemnified Party may participate in such defense at such party's expense; 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 under this Section 2.6, to the
extent such failure is not prejudicial. No Indemnifying Party, in the defense of any such claim or litigation, shall, except with the consent of each Indemnified Party, consent to entry of any
judgment or enter into any settlement 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 to such claim or litigation. Each Indemnified Party shall furnish such information regarding itself or the claim in question as an Indemnifying Party may reasonably request in writing and as
shall be reasonably required in connection with defense of such claim and litigation resulting therefrom. 

	(d)
	If
the indemnification provided for in this Section 2.6 is held by a court of competent jurisdiction to be unavailable to an
Indemnified Party with respect to any loss, liability, claim, damage, or expense referred to herein, then the Indemnifying Party, in lieu of indemnifying such Indemnified Party hereunder, shall
contribute to the amount paid or payable by such Indemnified Party as a result of such loss, liability, claim, damage, or expense in such proportion as is appropriate to reflect the relative fault of
the Indemnifying Party on the one hand and of the Indemnified Party on the other in connection with the statements or omissions that resulted in such loss, liability, claim, damage, or expense as well
as any other relevant equitable considerations. The relative fault of the Indemnifying Party and of the Indemnified Party shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission to state a material fact relates to information supplied by the Indemnifying Party or by the Indemnified Party and the parties' relative
intent, knowledge, access to information, and opportunity to correct or prevent such statement or omission. No Holder will be required under this  Section 2.6(d) to contribute any amount, when
combined with any amounts paid by such Holder pursuant to  Section 2.6(b), in excess of the net proceeds from the offering received by such person or entity, except in the case of fraud or willful
misconduct by such person or entity. No person or entity guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution from
any person or entity who was not guilty of such fraudulent misrepresentation.

	(e)
	Notwithstanding
the foregoing, to the extent that the provisions on indemnification and contribution contained in the underwriting agreement entered into in connection with the
underwritten public offering are in conflict with the foregoing provisions, the provisions in the underwriting agreement shall control. 

        2.7    Information by Holder.    Each Holder of Registrable Securities shall furnish to the Company such information
regarding such Holder and the distribution proposed by such Holder as the Company may reasonably request in writing and as shall be reasonably required in connection with any registration,
qualification, or compliance referred to in this Section 2. 

        2.8    Restrictions on Transfer.    

	(a)
	The
holder of each certificate representing Registrable Securities by acceptance thereof agrees to comply in all respects with the provisions of this  Section 2.8. Each Holder agrees not to make any
sale, assignment, transfer, pledge or other disposition of all or any portion of the Restricted
Securities, or any beneficial interest therein, unless and until (x) the transferee thereof has agreed in writing for the benefit of the Company to take and hold such Restricted Securities
subject to, and to be bound by, the terms and 

10

 

conditions
set forth in this Agreement, including, without limitation, this Section 2.8 and  Section 2.10, except for transfers permitted under Section 2.8(b), and (y): 

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

	(ii)
	Such
Holder shall have given prior written notice to the Company of such Holder's intention to make such disposition and shall have furnished the Company with a
detailed description of the manner and circumstances of the proposed disposition, and, if requested by the Company, such Holder shall have furnished the Company, at its expense, with (i) an
opinion of counsel, reasonably satisfactory to the Company, to the effect that such disposition will not require registration of such Restricted Securities under the Securities Act or (ii) a
"no action" letter from the Commission to the effect that the transfer of such securities without registration will not result in a recommendation by the staff of the Commission that action be taken
with respect thereto, whereupon the holder of such Restricted Securities shall be entitled to transfer such Restricted Securities in accordance with the terms of the notice delivered by the Holder to
the Company. It is agreed that the Company will not require opinions of counsel for transactions made pursuant to Rule 144 except in unusual circumstances.

	(b)
	Permitted
transfers include (i) a transfer not involving a change in beneficial ownership, or (ii) in transactions involving the distribution without consideration of
Restricted Securities by any Holder to (x) a parent, subsidiary or other affiliate of Holder that is a corporation, (y) any of its partners, members or other equity owners, or retired
partners, retired members or other equity owners, or to the estate of any of its partners, members or other equity owners or retired partners, retired members or other equity owners, or (z) a
venture capital fund that is controlled by or under common control with one or more general partners or managing members of, or shares the same management company with, such Holder, or
(iii) transfers in compliance with Rule 144(k), as long as the Company is furnished with satisfactory evidence of compliance with such Rule;  provided, in each case, that the Holder thereof
shall give written notice to the Company of such Holder's intention to effect such disposition and shall
have furnished the Company with a detailed description of the manner and circumstances of the proposed disposition.

	(c)
	Each
certificate representing Registrable Securities shall (unless otherwise permitted by the provisions of this Agreement) be stamped or otherwise imprinted with a legend
substantially similar to the following (in addition to any legend required under applicable state securities laws): 

THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE SECURITIES LAWS
OF CERTAIN STATES. THESE SECURITIES MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED EXCEPT AS PERMITTED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS PURSUANT TO
REGISTRATION OR AN EXEMPTION THEREFROM. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE ISSUER THAT SUCH OFFER, SALE OR TRANSFER, PLEDGE OR
HYPOTHECATION OTHERWISE COMPLIES WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS. 

11

 

 

THE
SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO (1) RESTRICTIONS ON TRANSFERABILITY AND RESALE, INCLUDING A LOCK-UP PERIOD IN THE EVENT OF A PUBLIC OFFERING, AS SET FORTH
IN AN INVESTOR RIGHTS AGREEMENT, AND (2) VOTING RESTRICTIONS AS SET FORTH IN A VOTING AGREEMENT AMONG THE COMPANY AND THE ORIGINAL HOLDERS OF THESE SHARES, COPIES OF WHICH MAY BE OBTAINED AT
THE PRINCIPAL OFFICE OF THE COMPANY. 

The
Holders consent to the Company making a notation on its records and giving instructions to any transfer agent of the Restricted Securities in order to implement the restrictions on transfer
established in this Section 2.8. 

	(d)
	The
first legend referring to federal and state securities laws identified in Section 2.8(c) hereof stamped on a certificate
evidencing the Restricted Securities and the stock transfer instructions and record notations with respect to such Restricted Securities shall be removed and the Company shall issue a certificate
without such legend to the holder of such Restricted Securities if (i) such securities are registered under the Securities Act, or (ii) such holder provides the Company with an opinion
of counsel reasonably acceptable to the Company to the effect that a public sale or transfer of such securities may be made without registration under the Securities Act, or (iii) such holder
provides the Company with reasonable assurances, which may, at the option of the Company, include an opinion of counsel satisfactory to the Company, that such securities can be sold pursuant to
Section (k) of Rule 144 under the Securities Act. 

        2.9    Rule 144 Reporting.    With a view to making available the benefits of certain rules and regulations of
the Commission that may permit the sale of the Restricted Securities to the public without registration, the Company agrees to use its best efforts to: 

	(a)
	Make
and keep public information regarding the Company available as those terms are understood and defined in Rule 144 under the Securities Act, at all times from and after the
effective date of the first registration under the Securities Act filed by the Company for an offering of its securities to the general public;

	(b)
	File
with the Commission in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act at any time after it has become
subject to such reporting requirements; and

	(c)
	So
long as a Holder owns any Restricted Securities, furnish to the Holder forthwith upon written request a written statement by the Company as to its compliance with the reporting
requirements of Rule 144 (at any time from and after ninety (90) days following the effective date of the first registration statement filed by the Company for an offering of its
securities to the general public), and of the Securities Act and the Exchange Act (at any time after it has become subject to such reporting requirements), a copy of the most recent annual or
quarterly report of the Company, and such other reports and documents so filed as a Holder may reasonably request in availing itself of any rule or regulation of the Commission allowing a Holder to
sell any such securities without registration. 

        2.10    Market Stand-Off Agreement.    Each Holder hereby agrees that such Holder shall not sell or
otherwise transfer, make any short sale of, grant any option for the purchase of, or enter into any hedging or similar transaction with the same economic effect as a sale, of any Common Stock (or
other securities) of the Company held by such Holder (other than those included in the registration) during the one hundred eighty (180) day period following the effective date of the Company's
Initial Public Offering filed under the Securities Act (or such other period as may be requested by an underwriter to accommodate regulatory restrictions on (i) the publication or other
distribution of research reports and 

12

 

(ii) analyst
recommendations and opinions, including, but not limited to, the restrictions contained in NASD Rule 2711(f)(4) or NYSE Rule 472(f)(4), or any successor provisions or
amendments thereto). The obligations described in this Section 2.10 shall not apply to a registration relating solely to employee benefit plans
on Form S-l or Form S-8 or similar forms that may be promulgated in the future, or a registration relating solely to a transaction on Form S-4
or similar forms that may be promulgated in the future. The Company may impose stop-transfer instructions and may stamp each such certificate with the second legend set forth in  Section 2.8(c)
hereof with respect to the shares of Common Stock (or other securities) subject to the foregoing restriction until the end of such
one hundred eighty (180) day (or other) period. Each Holder agrees to execute a market standoff agreement with said underwriters in customary form consistent with the provisions of this  Section 2.10. The foregoing provisions of this Section 2.10 shall only be applicable to the Holders if all officers, directors and greater
than two percent (2%) stockholders of the Company enter into similar agreements. Any discretionary waiver or termination of the restrictions of any or all of such agreements by the Company or the
underwriters shall apply to all Holders subject to such agreements pro rata based on the number of shares subject to such agreements. 

        2.11    Delay of Registration.    No Holder shall have any right to take any action to restrain, enjoin, or otherwise
delay any registration as the result of any controversy that might arise with respect to the interpretation or implementation of this Section 2. 

        2.12    Transfer or Assignment of Registration Rights.    The rights to cause the Company to register securities
granted to a Holder by the Company under this Section 2 may be transferred or assigned by a Holder only to a transferee or assignee of not less
than 1,000,000 shares of Registrable Securities (as presently constituted and subject to subsequent adjustments for stock splits, stock dividends, reverse stock splits, and the like) or an acceptable
Transferee in accordance with Section 2.8(b); provided that (i) such transfer or assignment of Registrable Securities is effected in
accordance with the terms of Section 2.8 hereof, the Right of First Refusal and Co-Sale Agreement, and applicable securities laws,
(ii) the Company is given written notice prior to said transfer or assignment, stating the name and address of the transferee or assignee and identifying the securities with respect to which
such registration rights are intended to be transferred or assigned and (iii) the transferee or assignee of such rights assumes in writing the obligations of such Holder under this Agreement,
including without limitation the obligations set forth in Section 2.10. 

        2.13    Limitations on Subsequent Registration Rights.    From and after the date of this Agreement, the Company shall
not, without the prior written consent of sixty seven percent (67%) in interest of the Holders, enter into any agreement with any holder or prospective holder of any securities of the Company giving
such holder or prospective holder any registration rights the terms of which are senior to the registration rights granted to the Holders hereunder or can be included in a demand registration. 

        2.14    Termination of Registration Rights.    The right of any Holder to request registration or inclusion in any
registration pursuant to Section 2.1, 2.2 or 2.3
shall terminate on the earlier of (i) such date, on or after the closing of the Company's first registered public offering of Common Stock, on which all shares of Registrable Securities held or
entitled to be held upon conversion by such Holder (together with its affiliates) may immediately be sold under Rule 144 during any ninety (90)-day period, and (ii) five
(5) years after the closing of the Company's Qualifying IPO (as defined in the Third Amended and Restated Certificate of Incorporation, as may be amended from time to time). 

13

 
 
 

Section 3
  Covenants of the Company    
    

        The Company hereby covenants and agrees, as follows: 

        3.1    Basic Financial Information and Inspection Rights.    

        (a)    Basic Financial Information.    The Company will furnish the following reports to each Holder who owns at least
3,000,000 Shares and/or Conversion Stock (as presently constituted and subject to subsequent adjustments for stock splits, stock dividends, reverse stock splits, and the like): 

	(i)
	As
soon as practicable after the end of each fiscal year of the Company, and in any event within one hundred twenty (120) days after the end of each fiscal year
of the Company, a consolidated balance sheet of the Company and its subsidiaries, if any, as at the end of such fiscal year, and consolidated statements of income and cash flows of the Company and its
subsidiaries, if any, for such year, prepared in accordance with U.S. generally accepted accounting principles consistently applied, audited and certified by independent public accountants of
recognized national standing selected by the Company.

	(ii)
	As
soon as practicable after the end of each calendar month, an unaudited consolidated balance sheet of the Company and its subsidiaries, if any, as of the end of each
such monthly period, and unaudited consolidated statements of income and cash flows of the Company and its subsidiaries, if any, for such period, prepared in accordance with U.S. generally accepted
accounting principles consistently applied, subject to changes resulting from normal year-end audit adjustments.

	(iii)
	As
soon as practicable after the end of the first, second and third quarterly accounting periods in each fiscal year of the Company commencing after the first full
quarterly period ending on March 31, 2007, and in any event within forty-five (45) days after the end of the first, second, and third quarterly accounting periods in each
fiscal year of the Company, an unaudited consolidated balance sheet of the Company and its subsidiaries, if any, as of the end of each such quarterly period, and unaudited consolidated statements of
income and cash flows of the Company and its subsidiaries, if any, for such period, prepared in accordance with U.S. generally accepted accounting principles consistently applied, subject to changes
resulting from normal year-end audit adjustments.

	(iv)
	As
soon as practicable, but in any event at least thirty (30) days prior to the end of each fiscal year, a budget and business plan for the next fiscal year,
prepared on a monthly basis, including balance sheets, income statements and statements of cash flows for such months and, as soon as prepared, any other budgets or revised budgets prepared by the
Company. 

        (b)    Inspection Rights.    The Company shall permit each Significant Holder, at such Significant Holder's expense,
to visit and inspect the Company's properties, to examine its books of account and records and to discuss the Company's affairs, finances and accounts with its officers, all at such reasonable times
as may be requested by the Significant Holder; provided, however, that the Company shall not be
obligated pursuant to this Section 3.1(b) to provide access to any information that it reasonably considers to be a trade secret or similar confidential information. 

14

 

        3.2    Confidentiality.    Anything in this Agreement to the contrary notwithstanding, no Holder by reason of this
Agreement shall have access to any trade secrets or classified information of the Company. The Company shall not be required to comply with any information rights of  Section 3 in respect of any
Holder whom the Board of Directors of the Company reasonably determines to be a competitor or an officer, employee,
director or holder of more than ten percent (10%) of a competitor. 

        3.3    Proprietary Information and Inventions Agreements.    The Company shall require all employees and consultants
with access to confidential information to execute and deliver a Proprietary Information and Inventions Agreement in substantially the form approved by the Company's Board of Directors. 

        3.4    Employee Agreements.    Unless approved by the Board of Directors of the Company, all future employees of the
Company who shall purchase, or receive options to purchase, shares of the Company's Common Stock following the date hereof shall be required to execute stock purchase or option agreements providing
for (i) vesting of shares over a four-year period with the first 25% of such shares vesting following twelve (12) months of continued employment or services, and the
remaining shares vesting in equal monthly installments over the following 36 months thereafter and (ii) a 180-day lockup period in connection with the Company's Initial
Public Offering. The Company shall retain a right of first refusal on transfers until the Company's Initial Public Offering and the right to repurchase unvested shares at cost. 

        3.5    Board of Directors Reimbursement.    The Company shall reimburse reasonable documented costs incurred by
non-employee directors in attending meetings of the Board of Directors or otherwise supporting Company activities. 

        3.6    Board of Directors Compensation.    Except in the case of Cam Garner and except for reimbursement of expenses
pursuant to Section 3.5, each non-employee director shall be compensated, if at all, in the same manner and in the same amounts as all other non-employee directors. 

        3.7    Board Observer Rights.    For so long as an affiliate of Abingworth LLP
("Abingworth") holds at least 3,000,000 Shares and/or Conversion Stock (as presently constituted and subject to subsequent adjustments for stock splits,
stock dividends, reverse stock splits, and the like), the Company shall allow one representative designated by Abingworth (the "Observer") to attend
meetings of the Board of Directors in a non-voting capacity. The Company shall provide the Observer with copies
of all materials that are provided by the Company to its directors; provided, however, that a majority
of the members of the Board of Directors shall be entitled to recuse the Observer from portions of any meeting of the Board of Directors and to redact portions of any materials of the Board of
Directors or a committee thereof delivered to the Observer where and to the extent that such majority determines, in good faith that (i) such recusal is reasonably necessary, in the opinion of
counsel to the Company, to preserve attorney-client privilege with respect to a material matter, or (ii) there exists, with respect to any deliberation or materials, an actual or potential
conflict of interest between Abingworth and the Company. Any Observer will be subject to the confidentiality provisions set forth in Section 3.2.
The Observer shall receive no compensation from the Company for service as an Observer and shall not be reimbursed for any expenses incurred by the Observer in connection with attendance of any
meeting of the Board of Directors, except as may otherwise be agreed to by the Company in writing. 

        3.8    D&O Insurance.    The Company shall obtain (within one hundred twenty (120) days of this Agreement) and
maintain a D&O insurance policy on the Board of Directors and officers of the Company in an amount reasonably equivalent to similarly situated companies. 

        3.9    Section 1202(c) Compliance.    The Company shall make reasonable efforts to comply with
Section 1202(c) of the Internal Revenue Code ("IRC") and shall make all filings required under Section 1202(D)(1)(c) of the IRC and any
related treasury regulations. 

15

 

        3.10    Termination of Covenants.    The covenants set forth in this  Section 3 shall terminate and be of no further force and
effect after the earlier of (i) closing of the Company's Initial Public Offering
or (ii) the date when none of the Shares and Conversion Stock remains outstanding. 

 
 

Section 4
  Right of First Refusal    
    

        4.1    Right of First Refusal to Significant Holders.    The Company hereby grants to each Holder who, together with
its affiliates, owns at least 1,000,000 Shares or Conversion Stock (as presently constituted and subject to subsequent adjustments for stock splits, stock dividends, reverse stock splits and the like)
(the "Significant Holders"), the right of first refusal to purchase its pro rata share of New Securities (as defined in this  Section 4.1(a)) which the
Company may, from time to time, propose to sell and issue after the date of this Agreement. A Significant Holder's pro
rata share, for purposes of this right of first refusal, is equal to the ratio of (a) the number of shares of Common Stock owned by such
Significant Holder immediately prior to the issuance of New Securities (assuming full conversion of the Shares and exercise of all outstanding convertible securities, rights, options and warrants,
directly or indirectly, into Common Stock held by said Significant Holder) to (b) the total number of shares of Common Stock outstanding immediately prior to the issuance of New Securities
(assuming full conversion of the Shares and exercise of all outstanding convertible securities, rights, options and warrants, directly or indirectly). 

	(a)
	"New Securities" shall mean any capital stock (including Common Stock and/or Preferred Stock) of the Company whether now authorized or
not, and rights, convertible securities, options or warrants to purchase such capital stock, and securities of any type whatsoever that are, or may become, exercisable or convertible into capital
stock; provided that the term "New Securities" does not include:

	(i)
	the
Shares and the Conversion Stock;

	(ii)
	securities
issued or issuable to officers, employees, directors, consultants, placement agents, and other service providers of the Company (or any subsidiary) pursuant
to stock grants, option plans, purchase plans, agreements or other employee stock incentive programs or arrangements approved by the Board of Directors of the Company;

	(iii)
	securities
issued pursuant to the conversion or exercise of any other outstanding convertible or exercisable securities as of this date of this Agreement;

	(iv)
	securities
issued or issuable as a dividend or distribution on Preferred Stock of the Company or pursuant to any event for which adjustment is made pursuant to
paragraph 4(e), 4(f) or 4(g) of the Third Amended and Restated Certificate of Incorporation of the Company, as may be amended from time to time;

	(v)
	securities
offered pursuant to a bona fide, firmly underwritten public offering pursuant to a registration statement filed under the Securities Act;

	(vi)
	securities
issued or issuable pursuant to the acquisition of another corporation by the Company by merger, purchase of substantially all of the assets or other
reorganization or to a joint venture agreement, provided, that such issuances are approved by the Board of Directors of the Company, including a
majority of the directors representing the holders of Preferred Stock;

	(vii)
	securities
issued or issuable to banks, equipment lessors or other financial institutions pursuant to a commercial leasing or debt financing transaction approved by
the 

16

 

Board
of Directors of the Company, including a majority of the directors representing the holders of Preferred Stock; 

	(viii)
	securities
issued or issuable in connection with sponsored research, collaboration, technology license, development, OEM, supply, marketing or other similar
agreements approved by the Board of Directors of the Company, including a majority of the directors representing the holders of Preferred Stock;

	(ix)
	securities
of the Company which are otherwise excluded by the vote or consent of the holders of at least sixty seven percent (67%) of the shares of Preferred Stock of
the Company then outstanding; and

	(x)
	any
right, option or warrant to acquire any security convertible into the securities excluded from the definition of New Securities pursuant to subsections (i)
through (ix) above.

	(b)
	In
the event the Company proposes to undertake an issuance of New Securities, it shall give each Significant Holder written notice of its intention, describing the type of New
Securities, and their price and the general terms upon which the Company proposes to issue the same. Each Significant Holder shall have twenty (20) days after any such notice is mailed or
delivered to agree to purchase such Holder's pro rata share of such New Securities for the price and upon the terms specified in the notice by giving written notice to the Company, in substantially
the form attached hereto as Schedule 1, and stating therein the quantity of New Securities to be purchased.

	(c)
	In
the event the Holders fail to exercise fully the right of first refusal within said twenty (20) day period (the "Election
Period"), the Company shall have thirty (30) days thereafter to sell or enter into an agreement (pursuant to which the sale of New Securities covered thereby shall be
closed, if at all, within sixty (60) days from the date of said agreement) to sell that portion of the New Securities with respect to which the Significant Holders' right of first refusal
option set forth in this Section 4.1 was not exercised, at a price and upon terms no more favorable to the purchasers thereof than specified in
the Company's notice to Significant Holders delivered pursuant to Section 4.1(b). In the event the Company has not sold within such thirty
(30) day period following the Election Period, or such sixty (60) day period following the date of said agreement, the Company shall not thereafter issue or sell any New Securities,
without first again offering such securities to the Significant Holders in the manner provided in this Section 4.1.

	(d)
	The
right of first refusal granted under this Agreement shall expire upon a Qualified IPO (as defined in the Company's Third Amended and Restated Certificate of Incorporation, as may
be amended from time to time). 

 
 

Section 5
  Miscellaneous    
    

        5.1    Amendment.    Except as expressly provided herein, neither this Agreement nor any term hereof may be amended,
waived, discharged or terminated other than by a written instrument referencing this Agreement and signed by the Company and the Holders holding sixty seven percent (67%) of the Registrable Securities
(excluding any of such shares that have been sold to the public or pursuant to Rule 144) then entitled to registration under Section 2;  provided,
however, that additional purchasers of Preferred Stock may become parties to this Agreement by
executing a counterpart of this Agreement without any amendment of this Agreement pursuant to this paragraph or any consent or approval of any other Holder and such purchasers shall be deemed an
"Investor" hereunder and 

17

 

 Exhibit A shall be amended accordingly; provided further that no term of this Agreement may be amended, waived,
discharged or terminated in a manner that uniquely and materially adversely affects the rights of a series of Preferred Stock, but does not so affect the entire class of Preferred Stock, other than by
a written instrument referencing this Agreement and signed by the Company and the Holders holding a majority of such affected series of Preferred Stock; and provided
further that no provision of Sections 2.1(e), 2.2, 2.3(d), 2.4, 2.5, 2.6, 2.7, 2.10, 2.11, 2.12 or this Section 5 of this Agreement may be amended, waived,
discharged or terminated in a manner that uniquely and adversely affects the rights of the Holder holding the GECC Warrant or, if the GECC Warrant has been exercised or converted, the GECC Shares, but
does not so affect the entire class of Preferred Stock in which the GECC Shares are (or would be upon exercise of the GECC Warrant) included, other than by a written instrument referencing this
Agreement and signed by the Company and the Holder holding the GECC Warrant or, if the GECC Warrant has been exercised or converted, holding a majority of the GECC Shares. Any such amendment, waiver,
discharge or termination effected in accordance with this paragraph shall be binding upon each Holder and each future holder of all such securities of Holder. Each Holder acknowledges that by the
operation of this paragraph, the holders of sixty seven percent (67%) of the Registrable Securities (excluding any of such shares that have been sold to the public or pursuant to Rule 144) then
entitled to registration under Section 2 will have the right and power to diminish or eliminate all rights of such Holder under this Agreement. 

        5.2    Amendment and Termination of Prior Rights Agreement.    The Prior Rights Agreement is hereby amended in its
entirety and restated herein. Such amendment and restatement is effective upon the execution of this Agreement by the Company and Holders holding at least sixty seven percent (67%) of the Registrable
Securities under the Prior Rights Agreement. Upon such execution, all provisions of, rights granted and covenants made in the Prior Rights Agreement (including, without limitation, the rights of first
refusal set forth in Section 4 of the Prior Rights Agreement) are hereby waived, released and terminated in their entirety and shall have no further force and effect (including, without
limitation, with respect to the Series A-2 Preferred issued pursuant to the Purchase Agreement and the shares issued upon conversion or exercise thereof). 

        5.3    Notices.    All notices and other communications required or permitted hereunder shall be in writing and shall
be mailed by registered or certified mail, postage prepaid, sent by facsimile or electronic mail (only if specifically indicated below), or otherwise delivered by hand or by messenger addressed: 

	(a)
	if
to an Investor, at the Investor's address as shown in the Company's records, as may be updated in accordance with the provisions hereof;

	(b)
	if
to any Holder, at such address, facsimile number or electronic mail address as shown in the Company's records, or, until any such holder so furnishes an address, facsimile number
or electronic mail address to the Company, then to and at the address of the last holder of such shares for which the Company has contact information in its records; or

	(c)
	if
to the Company, one copy should be sent to 11682 El Camino Real, Suite 320, San Diego, California 92130, Attn: Chief Financial Officer, or at such other address as the
Company shall have furnished to the Investors, with a copy to Cheston J. Larson, Latham & Watkins LLP, 12636 High Bluff Drive, Suite 400, San Diego, California 92130. 

        Each
such notice or other communication shall for all purposes of this Agreement be treated as effective or having been given when delivered if delivered personally, or, if sent by mail,
at the earlier of its receipt or 72 hours after the same has been deposited in a regularly maintained receptacle for the deposit of the United States mail, addressed and mailed as aforesaid or,
if sent by facsimile, upon confirmation of facsimile transfer or, if sent by electronic mail, when directed to the electronic mail address set forth on the Schedule of Investors. 

18

 

        5.4    Governing Law.    This Agreement shall be governed in all respects by the internal laws of the State of
California as applied to agreements entered into among California residents to be performed entirely within California, without regard to principles of conflicts of law. 

        5.5    Successors and Assigns.    This Agreement, and any and all rights, duties and obligations hereunder, shall not
be assigned, transferred, delegated or sublicensed by any Investor without the prior written consent of the Company. Any attempt by an Investor without such permission to assign, transfer, delegate or
sublicense any rights, duties or obligations that arise under this Agreement shall be void. Subject to the foregoing and except as otherwise provided herein, the provisions of this Agreement shall
inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors and administrators of the parties hereto. 

        5.6    Entire Agreement.    This Agreement and the exhibits hereto constitute the full and entire understanding and
agreement between the parties with regard to the subjects hereof. No party hereto shall be liable or bound to any other party in any manner with regard to the subjects hereof or thereof by any
warranties, representations or covenants except as specifically set forth herein. 

        5.7    Delays or Omissions.    Except as expressly provided herein, no delay or omission to exercise any right, power
or remedy accruing to any party to this Agreement upon any breach or default of any other party under this Agreement shall impair any such right, power or remedy of such non-defaulting
party, nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring, nor shall any waiver of any
single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any
party of any breach or default under this Agreement, or any waiver on the part of any party of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the
extent specifically set forth in such writing. All remedies, either under this Agreement or by law or otherwise afforded to any party to this Agreement, shall be cumulative and not alternative. 

        5.8    Severability.    If any provision of this Agreement becomes or is declared by a court of competent jurisdiction
to be illegal, unenforceable or void, portions of such provision, or such provision in its entirety, to the extent necessary, shall be severed from this Agreement, and such court will replace such
illegal, void or unenforceable provision of this Agreement with a valid and enforceable provision that will achieve, to the extent possible, the same economic, business and other purposes of the
illegal, void or unenforceable provision. The balance of this Agreement shall be enforceable in accordance with its terms. 

        5.9    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. All references in this Agreement to sections, paragraphs and exhibits shall, unless otherwise provided, refer to sections and
paragraphs hereof and exhibits attached hereto. 

        5.10    Counterparts.    This Agreement may be executed in any number of counterparts, each of which shall be
enforceable against the parties that execute such counterparts, and all of which together shall constitute one instrument. 

        5.11    Telecopy Execution and Delivery.    A facsimile, telecopy or other reproduction of this Agreement may be
executed by one or more parties hereto and delivered by such party by facsimile or any similar electronic transmission device pursuant to which the signature of or on behalf of such party can be seen.
Such execution and delivery shall be considered valid, binding and effective for all purposes. At the request of any party hereto, all parties hereto agree to execute and deliver an original of this
Agreement as well as any facsimile, telecopy or other reproduction hereof. 

        5.12    Jurisdiction; Venue.    With respect to any disputes arising out of or related to this Agreement, the parties
consent to the exclusive jurisdiction of, and venue in, the state courts in San Diego County 

19

 

in
the State of California (or in the event of exclusive federal jurisdiction, the courts of the Southern District of California located in San Diego County). 

        5.13    Further Assurances.    Each party hereto agrees to execute and deliver, by the proper exercise of its
corporate, limited liability company, partnership or other powers, all such other and additional instruments and documents and do all such other acts and things as may be necessary to more fully
effectuate this Agreement. 

        5.14    Termination Upon Change of Control.    Notwithstanding anything to the contrary herein, this Agreement
(excluding any then-existing obligations) shall terminate upon (a) the acquisition of the Company by another entity by means of any transaction or series of related transactions to
which the Company is party (including, without limitation, any stock acquisition, reorganization, merger or consolidation but excluding any sale of stock for capital raising purposes) other than a
transaction or series of transactions in which the holders of the voting securities of the Company outstanding immediately prior to such transaction continue to retain (either by such voting
securities remaining outstanding or by such voting securities being converted into voting securities of the surviving entity), as a result of shares in the Company held by such holders prior to such
transaction, at least fifty percent (50%) of the total voting power represented by the voting securities of the Corporation or such surviving entity outstanding immediately after such transaction or
series of transactions; or (b) a sale, lease or other conveyance of all or substantially all of the assets of the Company. 

        5.15    Attorneys' Fees.    In the event that any suit or action is instituted to enforce any provision in this
Agreement, the prevailing party in such dispute shall be entitled to recover from the losing party such reasonable fees and expenses of attorneys and accountants, which shall include, without
limitation, all fees, costs and expenses of appeals. 

        5.16    Aggregation of Stock.    All securities held or acquired by affiliated entities (including affiliated venture
capital funds) or persons shall be aggregated together for purposes of determining the availability of any rights under this Agreement. 

(Remainder of Page Intentionally Left Blank) 

20

  
        IN WITNESS WHEREOF, the parties hereto have executed this Amended and Restated Investors' Rights Agreement effective as of the day and year first above written. 

	 	ZOGENIX, INC.
 a Delaware corporation
	

 	

/s/  ROGER L. HAWLEY      
 Roger L. Hawley

Chief Executive Officer

[Signature Page to Investors' Rights Agreement]  

	 	 	INVESTORS:
	

 	
 	

CLARUS LIFESCIENCES I, L.P.
	

 	
 	

By:	

Clarus Ventures I GP, L.P.

its general partner
	

 	
 	

/s/  KURT C. WHEELER      

	

 	
 	

By:	

Clarus Ventures I, LLC

its general partner
	

 	
 	

/s/  KURT C. WHEELER      

[Signature Page to Investors' Rights Agreement]  

	 	 	SCALE VENTURE PARTNERS II, LP
	

 	
 	

By:	

Scale Venture Management II, LLC

its General Partner
	

 	
 	

By:	

/s/  LOUIS C. BOCK      
 Louis C. Bock

Managing Director

[Signature Page to Investors' Rights Agreement]  

	 	 	DOMAIN PARTNERS VI, L.P.
	

 	
 	

By:	

One Palmer Square Associates VI, L.L.C.,

its General Partner
	

 	
 	

By:	

/s/  KATHLEEN K. SCHOEMAKER      
 Kathleen K. Schoemaker

Managing Member
	
 	
 	

DP VI ASSOCIATES, L.P.
	

 	
 	

By:	

One Palmer Square Associates VI, L.L.C.,

its General Partner
	

 	
 	

By:	

/s/  KATHLEEN K. SCHOEMAKER      
 Kathleen K. Schoemaker

Managing Member
	
 	
 	

DOMAIN PARTNERS VII, L.P.
	

 	
 	

By:	

One Palmer Square Associates VII, L.L.C.,

its General Partner
	

 	
 	

By:	

/s/  KATHLEEN K. SCHOEMAKER      
 Kathleen K. Schoemaker

Managing Member
	
 	
 	

DP VII ASSOCIATES, L.P
	

 	
 	

By:	

One Palmer Square Associates VII, L.L.C.,

its General Partner
	

 	
 	

By:	

/s/  KATHLEEN K. SCHOEMAKER      
 Kathleen K. Schoemaker

Managing Member

[Signature Page to Investors' Rights Agreement]  

	 	 	THOMAS, MCNERNEY & PARTNERS, L.P.
	

 	
 	

By:	

/s/  JAMES E. THOMAS      

	 	 	Print Name: James E. Thomas

Title: Manager
	
 	
 	

TMP NOMINEE, LLC
	

 	
 	

By:	

/s/  JAMES E. THOMAS      

	 	 	Print Name: James E. Thomas

Title: Manager
	
 	
 	

TMP ASSOCIATES, L.P.
	

 	
 	

By:	

/s/  JAMES E. THOMAS      

	 	 	Print Name: James E. Thomas

Title: Manager

[Signature Page to Investors' Rights Agreement]  

	

 	
/s/  ROGER L. HAWLEY      
ROGER L. HAWLEY

[Signature Page to Investors' Rights Agreement]  

	 	 	GARNER INVESTMENTS, LLC
	

 	
 	

By:	

/s/  CAM L. GARNER      
 Cam L. Garner

President

[Signature Page to Investors' Rights Agreement]  

	 	 	Solely for the purposes of Sections 2.1(e), 2.2, 2.3(d), 2.4, 2.5, 2.6, 2.7, 2.10, 2.11, 2.12 and 5 of this Agreement:
	
 	
 	

GENERAL ELECTRIC CAPITAL CORPORATION
	

 	
 	

By:	

/s/  DANIJELA GJENERO      

	 	 	Print Name: Danijela Gjenero

Title: Duly Authorized Signatory

[Signature Page to Investors' Rights Agreement]  

	 	 	ABINGWORTH BIOVENTURES IV EXECUTIVES LP
 acting by:
	 	 	 	Its manager Abingworth Management Ltd
	

 	
 	

By:	

/s/  JAMES ABELL      

	 	 	Print Name: James Abell

Title: Director
	
 	
 	

ABINGWORTH BIOVENTURES IV LP
 acting by:
	 	 	 	Its manager Abingworth Management Ltd
	

 	
 	

By:	

/s/  JAMES ABELL      

	 	 	Print Name: James Abell

Title: Director

[Signature Page to Investors' Rights Agreement]  

	 	INVESTORS:
	
 	

/s/  SCOTT N. WOLFE      
SCOTT N. WOLFE

[Signature Page to Investors' Rights Agreement]  

	 	INVESTORS:
	

 	

FAYE HUNTER RUSSELL TRUST UTD

7/11/88
	

 	

By:	

/s/  FAYE H. RUSSELL      

	 	Name:	Faye H. Russell
	 	Title:	Trustee

[Signature Page to Investors' Rights Agreement]  

	 	INVESTORS:
	
 	

/s/  CHESTON J. LARSON      
CHESTON J. LARSON

[Signature Page to Investors' Rights Agreement]  

	 	 	INVESTORS:
	

 	
 	

VP COMPANY INVESTMENTS 2004, LLC
	

 	
 	

By:	

/s/  ALAN C. MENDELSON      

	 	 	 	Name:	Alan C. Mendelson
	 	 	 	Title:	Managing Member

[Signature Page to Investors' Rights Agreement]  

 

 
 

EXHIBIT A    
    
    INVESTORS    
    

Clarus
Lifesciences I, LP 

Scale
Venture Partners II, LP 

Domain
Partners VI, L.P. 

DP
VI Associates, L.P. 

Domain
Partners VII, L.P. 

DP
VII Associates, L.P. 

Thomas,
McNerney & Partners, L.P. 

TMP
Nominee, LLC 

TMP
Associates, L.P. 

Life
Science Angel Investors II, L.L.C. 

Hale
BioPharma Ventures LLC 

Roger
L. Hawley 

Garner
Investments, LLC 

Windamere
III, LLC 

Ian
Edvalson 

Casey
McGlynn 

Peter
Munson 

Vicki
Norton 

Guise
Management Corporation 

Abingworth
Bioventures IV LP 

Abingworth
Bioventures IV Executives LP 

Solely
for purposes of Sections 2.1(e), 2.2, 2.3(d), 2.4, 2.5, 2.6, 2.7, 2.10, 2.11, 2.12 and 5 of the Agreement, General Electric Capital Corporation 

Scott
N. Wolfe 

Faye
Hunter Russell Trust Utd 7/11/88 

Cheston
J. Larson 

VP
Company Investments 2004, LLC 

 

 
 

SCHEDULE 1    
    

 
  NOTICE AND WAIVER/ELECTION OF
  RIGHT OF FIRST REFUSAL    
    

        I do hereby waive or exercise, as indicated below, my rights of first refusal under the Amended and Restated Investors Rights Agreement
dated as of                                    (the "Agreement")
:

	1.
	Waiver
of 10 Days' Notice Period in Which to Exercise Right of First Offer: (please check only one)

	o
	WAIVE
in full, on behalf of all Holders, the 10-day notice period provided to exercise my right of first refusal granted under
the Agreement.

	o
	DO
NOT WAIVE the notice period described above.

	2.
	Issuance
and Sale of New Securities: (please check only one)

	o
	WAIVE
in full the right of first refusal granted under the Agreement with respect to the issuance of the New Securities.

	o
	ELECT
TO PARTICIPATE in $                                    [PLEASE PROVIDE
AMOUNT] in New Securities proposed to be issued by
Zogenix, Inc., representing less than my pro rata portion of the aggregate of
$                                    in New Securities being offered
in the financing.

	o
	ELECT
TO PARTICIPATE in $                                    in New
Securities proposed to be issued by Company X, representing my full pro rata portion of the
aggregate of $                                    in New Securities
being offered in the financing.

	o
	ELECT
TO PARTICIPATE in my full pro rata portion of the aggregate of
$                                    in New Securities being made
available in the
financing and, to the extent available, the greater of (x) an additional
$                                    [PLEASE PROVIDE AMOUNT] or
(y) my pro rata portion of any remaining investment amount available in the event other Significant Holders do not exercise their full rights of first refusal with respect to the
$                                    in New Securities being offered
in the financing. 

Date:                                    ,
20    

	 	Signature of Stockholder or Authorized Signatory
	

 	

 Title, if applicable

This is neither a commitment to purchase nor a commitment to issue the New Securities described above. Such issuance can only be made by way of definitive documentation related
to such issuance. Zogenix, Inc. will supply you with such definitive documentation upon request or if you indicate that you would like to exercise your first offer rights in whole or in
part.

QuickLinks

Exhibit 4.2

ZOGENIX, INC. AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT December 13, 2007

TABLE OF CONTENTS

ZOGENIX, INC. AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT

RECITALS

Section 1 Definitions

Section 2 Registration Rights

Section 3 Covenants of the Company

Section 4 Right of First Refusal

Section 5 Miscellaneous

EXHIBIT A INVESTORS

SCHEDULE 1

NOTICE AND WAIVER/ELECTION OF RIGHT OF FIRST REFUSAL

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