Document:

Exhibit 10.14

 

[VIEWSONIC CORPORATION LETTERHEAD]

 

October 6, 1999

 

 

Mr. Christopher Franey

 

Dear Christopher,

 

This letter is to confirm ViewSonic
Corporation’s (the Company) offer to you of an overseas assignment, based at
ViewSonic’s European headquarters, in your present role of Sr. Vice President
of International Business Units.  The
duration of the assignment will be not less than one year with a target of not
more than 18 months, beginning January 1, 2000.  The following terms and conditions of your assignment will apply:

 

Compensation –
A 15% premium salary adjustment will be applied to your present salary of
$205,000 for the duration of the project. 
You will also be eligible for a commission of 1% of the pretax operating
profits of VSE.  In addition there will
be a bonus opportunity of $125,000 which will be based on a schedule of
quantitative objectives established jointly by us prior to the beginning of the
assignment and paid quarterly.  You will
not be eligible for the VSC profit sharing bonus during your assignment.

 

Moving
Expenses – The Company will pay for the actual and reasonable costs for a
single ocean shipment for a reasonable amount of necessary household goods and
personal effects to and from the assignment location.  The maximum shipment allowance, exclusive of packing materials is
a 40 foot container.  Shipment is
restricted to one origin point and one destination point.  Further, the Company will pay for full
replacement value insurance coverage for household goods and personal effects
with the exception of certain high value items such as jewelry, furs, antiques,
artwork, collections, investment items, etc.

 

Benefits –
Health and Welfare – Health and Welfare (e.g. medical, dental, vision, life,
AD&D, short and long term disability and worker’s compensation) insurance
programs will be based on the home country employee benefits.  If this is not feasible, the Company will
make arrangements for comparable coverage at Company expense.  Any miscellaneous home country benefits will
continue to apply subject to program limitations and provisions.  Your vacation accrual and use will continue
on the VSC vacation plan, however, you will follow the holiday schedule of the
assignment location.

 

Housing –
Subject to my approval, the Company will pay for housing and any utilities in
Europe, with the exception of personal phone usage expenses.

 

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Automobile –
Subject to my approval, the Company will pay the rental cost for one car for
your use during the assignment.

 

Passport/Visa/Work
Permit – The Company will reimburse actual, reasonable and required costs
associated with obtaining necessary work and residency permits.

 

Travel – All
travel will be according to Company policy. 
Coach travel for your spouse will be approved by me on an individual
basis.

 

Company
Initiated Termination – In the case of Company-initiated termination, you shall
be provided with return economy airfare for you and your spouse and return
shipment of household goods to your point of origin.  The restrictions and limitations outlined in the moving expenses
section apply.  All return travel must
be completed within 60 days of the conclusion of the assignment to be eligible
for reimbursement.

 

Tax – During
the assignment, you will be responsible for filing all applicable home and
assignment location tax returns.  The
Company will assist in this process by arranging for and bearing the cost of
tax preparations services for each year of international assignment, including
the year of expatriation and repatriation. 
It is the intent of the Company that your tax will be equalized to the
United States.  Your tax liability will
be approximately equal to the amount of U.S. Federal income tax you would be
required to pay if you were employed here in the U.S. for the entire year.  The Company will pay for any assignment
country or home country tax costs that exceed the U.S. tax equalization amount.

 

U.K. Tax
Liability – The Company will be responsible for all U.K. taxes incurred on any
company related salary income earned during this assignment.

 

To confirm
receipt and understanding of these terms and conditions, please sign below.

 

	
   

  	
  Sincerely,

  
	
   

  
	
   

  
	
   

  	
  /s/ Chuck
  McArthur

  	
   

  
	
   

  	
  Chuck
  McArthur, COO

  
	
   

  
	
  /s/
  Christopher Franey

  	
   

  	
  November 15,
  1999

  	
   

  
	
  Christopher
  Franey

  	
  Date

  
						

 

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Exhibit 10.26    
    

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED, OR ANY STATE SECURITIES LAWS. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL (WHICH MAY BE COMPANY COUNSEL) REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION
IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS.

 
 

WARRANT AGREEMENT    
    

To Purchase Shares of the Series A Preferred Stock of

ADVANCED MEDICINE, INC.

Dated as of May 7, 1997 (the "Effective Date") 

        WHEREAS, Advanced Medicine, Inc., a Delaware corporation (the "Company") has entered into a Master Lease Agreement dated as of
May 7, 1997, Equipment Schedule No. VL-1 dated as of May 7, 1997, and related Summary Equipment Schedules (collectively, the "Leases") with Comdisco, Inc., a Delaware
corporation (the "Warrantholder"); and 

        WHEREAS, the Company desires to grant to Warrantholder, in consideration for such Leases, the right to purchase shares of its
Series A Preferred Stock; 

        NOW, THEREFORE, in consideration of the Warrantholder executing and delivering such Leases and in consideration of mutual covenants and
agreements contained herein, the Company and Warrantholder agree as follows: 

1.     GRANT OF THE RIGHT TO PURCHASE PREFERRED STOCK.  

        The Company hereby grants to the Warrantholder, and the Warrantholder is entitled, upon the terms and subject to the conditions hereinafter set forth, to
subscribe to and purchase, from the Company, 32,000 fully paid and non-assessable shares of the Company's Series A Preferred Stock ("Preferred Stock") at a purchase price of $1.25
per share (the "Exercise Price"). The number, class and purchase price of such shares are subject to adjustment as provided in Section 8 hereof. 

2.     TERM OF THE WARRANT AGREEMENT.  

        Except as otherwise provided for herein, the term of this Warrant Agreement and the right to purchase Preferred Stock as granted herein shall commence on the
Effective Date and shall be exercisable for a period of (i) seven (7) years or (ii) three (3) years from the effective date of the Company's initial public offering,
whichever is longer. 

3.     EXERCISE OF THE PURCHASE RIGHTS.  

        The purchase rights set forth in this Warrant Agreement are exercisable by the Warrantholder, in whole or in part, at any time, or from time to time, prior to the
expiration of the term set forth in Section 2 above, by tendering to the Company at its principal office a notice of exercise in the form attached hereto as Exhibit I (the "Notice of
Exercise"), duly completed and executed. Promptly upon receipt of the Notice of Exercise and the payment of the purchase price in accordance with the terms set forth below, and in no event later than
twenty-one (21) days thereafter, the Company shall issue to the Warrantholder a certificate for the number of shares of Preferred Stock purchased and shall execute the
acknowledgment of exercise in the form attached hereto as Exhibit II (the 

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"Acknowledgment
of Exercise") indicating the number of shares which remain subject to future purchases, if any. 

        The
Exercise Price may be paid at the Warrantholder's election either (i) by cash or check, or (ii) by surrender of Warrants ("Net Issuance") as determined below. If the
Warrantholder elects the Net Issuance method, the Company will issue Preferred Stock in accordance with the following formula: 

	 	 	X =	 	Y(A-B)
	 	 	A	 	 
	

Where:	
 	

X =	
 	

the number of shares of Preferred Stock to be issued to the Warrantholder.
	

 	
 	

Y =	
 	

the number of shares of Preferred Stock requested to be exercised under this Warrant Agreement.
	

 	
 	

A =	
 	

the fair market value of one (1) share of Preferred Stock.
	

 	
 	

B =	
 	

the Exercise Price.

        For
purposes of the above calculation, current fair market value of Preferred Stock shall mean with respect to each share of Preferred Stock: 

          (i)  if
the exercise is in connection with an initial public offering of the Company's Common Stock, and if the Company's Registration Statement relating to such public
offering has been declared effective by the SEC, then the fair market value per share shall be the product of (x) the initial "Price to Public" specified in the final prospectus with respect to
the offering and (y) the number of shares of Common Stock into which each share of Preferred Stock is convertible at the time of such exercise; 

         (ii)  if
this Warrant is exercised after, and not in connection with the Company's initial public offering, and: 

        (a)   if
traded on a securities exchange, the fair market value shall be deemed to be the product of (x) the average of the closing prices over a twenty-one
(21) day period ending three days before the day the current fair market value of the securities is being determined and (y) the number of shares
of Common Stock into which each share of Preferred Stock is convertible at the time of such exercise; or 

        (b)   if
actively traded over-the-counter, the fair market value shall be deemed to be the product of (x) the average of the closing bid and
asked prices quoted on the NASDAQ system (or similar system) over the twenty-one (21) day period ending three days before the day the current fair market value of the securities is
being determined and (y) the number of shares of Common Stock into which each share of Preferred Stock is convertible at the time of such exercise; 

        (iii)  if
at any time the Common Stock is not listed on any securities exchange or quoted in the NASDAQ System or the over-the-counter market, the
current fair market value of Preferred Stock shall be the product of (x) the highest price per share which the Company could obtain from a willing buyer (not a current employee or director) for
shares of Common Stock sold by the Company, from authorized but unissued shares, as determined in good faith by its Board of Directors and (y) the number of shares of Common Stock into which
each share of Preferred Stock is convertible at the time of such exercise, unless the Company shall become subject to a merger, acquisition or other consolidation pursuant to which the Company is not
the surviving party, in which case the fair market value of Preferred Stock shall be deemed to be the value 

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received
by the holders of the Company's Preferred Stock on a common equivalent basis pursuant to such merger or acquisition. 

        Upon
partial exercise by either cash or Net Issuance, the Company shall promptly issue an amended Warrant Agreement representing the remaining number of shares purchasable hereunder. All
other terms and conditions of such amended Warrant Agreement shall be identical to those contained herein, including, but not limited to the Effective Date hereof. 

4.     RESERVATION OF SHARES.  

        (a)   Authorization
and Reservation of Shares.    During the term of this Warrant Agreement, the Company will at all times have
authorized and reserved a sufficient number of shares of its Preferred Stock to provide for the exercise of the rights to purchase Preferred Stock as provided for herein. 

5.     NO FRACTIONAL SHARES OR SCRIP.  

        No fractional shares or scrip representing fractional shares shall be issued upon the exercise of the Warrant, but in lieu of such fractional shares the Company
shall make a cash payment therefor upon the basis of the Exercise Price then in effect. 

6.     NO RIGHTS AS SHAREHOLDER.  

        This Warrant Agreement does not entitle the Warrantholder to any voting rights or other rights as a shareholder of the Company prior to the exercise of the
Warrant. 

7.     WARRANTHOLDER REGISTRY.  

        The Company shall maintain a registry showing the name and address of the registered holder of this Warrant Agreement. 

8.     ADJUSTMENT RIGHTS.  

        The purchase price per share and the number of shares of Preferred Stock purchasable hereunder are subject to adjustment, as follows: 

        (a)   Merger
and Sale of Assets.    If at any time there shall be a capital reorganization of the shares of the Company's stock (other
than a combination, reclassification, exchange or subdivision of shares otherwise provided for herein), or a merger or consolidation of the Company with or into another corporation whether or not the
Company is the surviving corporation, or the sale of all or substantially all of the Company's properties and assets to any other person (hereinafter referred to as a "Merger Event"), then, as a part
of such Merger Event, lawful provision shall be made so that the Warrantholder shall thereafter be entitled to receive, upon exercise of the Warrant, the number of shares of preferred stock or other
securities of the successor corporation resulting from such Merger Event, equivalent in value to that which would have been issuable if Warrantholder had exercised this Warrant immediately prior to
the Merger Event. In any such case, appropriate adjustment (as determined in good faith by the Company's Board of Directors) shall be made in the application of the provisions of this Warrant
Agreement with respect to the rights and interest of the Warrantholder after the Merger Event to the end that the provisions of this Warrant Agreement (including adjustments of the Exercise Price and
number of shares of Preferred Stock purchasable) shall be applicable to the greatest extent possible. 

        (b)   Reclassification
of Shares.    If the Company at any time shall, by combination, reclassification, exchange or subdivision of
securities, mandatory conversion pursuant to the Company's Certificate of Incorporation or otherwise, change any of the securities as to which purchase rights under this Warrant Agreement exist into
the same or a different number of securities of any other class or classes, this 

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Warrant
Agreement shall thereafter represent the right to acquire such number and kind of securities as would have been issuable as the result of such change with respect to the securities which were
subject to the purchase rights under this Warrant Agreement immediately prior to such combination, reclassification, exchange, subdivision, mandatory conversion or other change. 

        (c)   Subdivision
or Combination of Shares.    If the Company at any time shall combine or subdivide its Preferred Stock, the Exercise
Price shall be proportionately decreased in the case of a subdivision, or proportionately increased in the case of a combination. 

        (d)   Stock
Dividends.    If the Company at any time shall pay a dividend payable in, or make any other distribution (except any
distribution specifically provided for in the foregoing subsections (a) or (b)) of the Company's stock, then the Exercise Price shall be adjusted, from and after the record date of such
dividend or distribution, to that price determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction (i) the numerator of which shall be the total
number of all shares of the Company's stock outstanding immediately prior to such dividend or distribution, and (ii) the denominator of which shall be the total number of all shares of the
Company's stock outstanding immediately after such dividend or distribution. The Warrantholder shall thereafter be entitled to purchase, at the Exercise Price resulting from such adjustment, the
number of shares of Preferred Stock (calculated to the nearest whole share) obtained by multiplying the Exercise Price in effect immediately prior to such adjustment by the number of shares of
Preferred Stock issuable upon the exercise hereof immediately prior to such adjustment and dividing the product thereof by the Exercise Price resulting from such adjustment. The application of
Section 8(d) is not intended to result in a double adjustment and if an adjustment is contemplated by the Certificate of Incorporation no adjustment will be implemented pursuant to this
Section 8(d). 

        (e)   Antidilution
Rights.    Additional antidilution rights applicable to the Preferred Stock purchasable hereunder are as set forth in
the Company's Certificate of Incorporation, as amended through the Effective Date, a true and complete copy of which is attached hereto as Exhibit       (the "Charter"). The Company
shall promptly provide the Warrantholder with any restatement, amendment, modification or waiver of the Charter. The Company shall provide Warrantholder with written notice of any issuance of its
stock or other equity security to occur after the Effective Date of this Warrant, which notice shall include (a) the price at which such stock or security is to be sold, (b) the number
of shares to be issued, and (c) such other information as necessary for Warrantholder to determine if a dilutive event has occurred. 

        (f)    Notice
of Adjustments.    If: (i) the Company shall declare any dividend or distribution upon its stock, whether in cash,
property, stock or other securities; (ii) the Company shall offer for subscription prorata to the holders of any class of its Preferred or other convertible stock any additional shares of stock
of any class or other rights; (iii) there shall be any Merger Event; (iv) there shall be an initial public offering; or (v) there shall be any voluntary dissolution, liquidation
or winding up of the Company; then, in connection with each such event, the Company shall send to the Warrantholder: (A) at least twenty (20) days' prior written notice of the date on
which the books of the Company shall close or a record shall be taken for such dividend, distribution, subscription rights (specifying the date on which the holders of Preferred Stock shall be
entitled thereto) or for determining rights to vote in respect of such Merger Event, dissolution, liquidation or winding up; (B) in the case of any such Merger Event, dissolution, liquidation
or winding up, at least twenty (20) days' prior written notice of the date when the same shall take place (and specifying the date on which the holders of Preferred Stock shall be entitled to
exchange their Preferred Stock for securities or other property deliverable upon such Merger Event, dissolution, liquidation or winding up); and (C) in the case of a public offering, the
Company shall give the Warrantholder at least twenty (20) days written notice prior to the effective date thereof. 

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        Each
such written notice shall set forth, in reasonable detail, (i) the event requiring the adjustment, (ii) the amount of the adjustment, (iii) the method by which
such adjustment was calculated, (iv) the Exercise Price, and (v) the number of shares subject to purchase hereunder after giving effect to such adjustment, and shall be given by first
class mail, postage prepaid, addressed to the Warrantholder, at the address as shown on the books of the Company. 

        (g)   Timely
Notice.    Failure to timely provide such notice required by subsection (f) above shall entitle Warrantholder to
retain the benefit of the applicable notice period notwithstanding anything to the contrary contained in any insufficient notice received by Warrantholder. The notice period shall begin on the date
Warrantholder actually receives a written notice containing all the information specified above. 

9.     REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY.  

        (a)   Reservation
of Preferred Stock.    The Preferred Stock issuable upon exercise of the Warrantholder's rights has been duly and
validly reserved and, when issued in accordance with the provisions of this Warrant Agreement, will be validly issued, fully paid and non-assessable, and will be free of any taxes, liens,
charges or encumbrances of any nature whatsoever; provided, however, that the Preferred Stock issuable pursuant to this Warrant Agreement may be subject to restrictions on transfer under state and/or
Federal securities laws. The Company has made available to the Warrantholder true, correct and complete copies of its Charter and Bylaws, as amended. The issuance of certificates for shares of
Preferred Stock upon exercise of the Warrant Agreement shall be made without charge to the Warrantholder for any issuance tax in respect thereof, or other cost incurred by the Company in connection
with such exercise and the related issuance of shares of Preferred Stock. The Company shall not be required to pay any tax which may be payable in respect of any transfer involved and the issuance and
delivery of any certificate in a name other than that of the Warrantholder. 

        (b)   Due
Authority.    The execution and delivery by the Company of this Warrant Agreement and the performance of all obligations of
the Company hereunder, including the issuance to Warrantholder of the right to acquire the shares of Preferred Stock, have been duly authorized by all necessary corporate action on the part of the
Company, and the Leases and this Warrant Agreement are not inconsistent with the Company's Charter or Bylaws, do not contravene any law or governmental rule, regulation or order applicable to it, do
not and will not contravene any provision of, or constitute a default under, any indenture, mortgage, contract or other instrument to which it is a party or by which it is bound, and the Leases and
this Warrant Agreement constitute legal, valid and binding agreements of the Company, enforceable in accordance with their respective terms. 

        (c)   Consents
and Approvals.    No consent or approval of, giving of notice to, registration with, or taking of any other action in
respect of any state, Federal or other governmental authority or agency is required with respect to the execution, delivery and performance by the Company of its obligations under this Warrant
Agreement, except for the filing of notices; pursuant to Regulation D under the 1933 Act and any filing required by applicable state securities law, which filings will be effective by the time
required thereby. 

        (d)   Issued
Securities.    All issued and outstanding shares of Common Stock, Preferred Stock or any other securities of the Company
have been duly authorized and validly issued and are fully paid and nonassessable. All outstanding shares of Common Stock, Preferred Stock and any other securities were issued in full compliance with
all Federal and state securities laws. In addition: 

          (i)  The
authorized capital of the Company consists of (A) 4,285,000 shares of Common Stock, of which 4,285,000 shares are issued and outstanding, and
(B) 4,500,000 shares of preferred stock, of which 4,500,000 shares are issued and outstanding and are convertible into 4,500,000 shares of Common Stock at $1.25 per share. 

5

 

         (ii)  Except
as set forth in the Company's Articles of Incorporation and Series A Convertible Stock Purchase Agreement, no shareholder of the Company has preemptive
rights to purchase new issuances of the Company's capital stock. 

        (e)   Insurance.    The
Company has in full force and effect insurance policies, with extended coverage, insuring the Company and its
property and business against such losses and risks, and in such amounts, as are customary for corporations engaged in a similar business and similarly situated and as otherwise may be required
pursuant to the terms of any other contract or agreement. 

        (f)    Other
Commitments to Register Securities.    Except as set forth in the Company's Registration Rights Agreement, the Company is
not, pursuant to the terms of any other agreement currently in existence, under any obligation to register under the 1933 Act any of its presently outstanding securities or any of its securities which
may hereafter be issued. 

        (g)   Exempt
Transaction.    Subject to the accuracy of the Warrantholder's representations in Section 10 hereof, the issuance of
the Preferred Stock upon exercise of this Warrant will constitute a transaction exempt from (i) the registration requirements of Section 5 of the 1933 Act, in reliance upon
Section 4(2) thereof, and (ii) the qualification requirements of the applicable state securities laws. 

        (h)   Compliance
with Rule 144.    At the written request of the Warrantholder, who proposes to sell Preferred Stock issuable
upon the exercise of the Warrant in compliance with Rule 144 promulgated by the Securities and Exchange Commission, the Company shall furnish to the Warrantholder, within ten days after receipt
of such request, a written statement confirming the Company's compliance with the filing requirements of the Securities and Exchange Commission as set forth in such Rule, as such Rule may be amended
from time to time. 

10.   REPRESENTATIONS AND COVENANTS OF THE WARRANTHOLDER.  

        This Warrant Agreement has been entered into by the Company in reliance upon the following representations and covenants of the Warrantholder: 

        (a)   Investment
Purpose.    The right to acquire Preferred Stock or the Preferred Stock issuable upon exercise of the Warrantholder's
rights contained herein will be acquired for investment and not with a view to the sale or distribution of any part thereof, and the Warrantholder has no present intention of selling or engaging in
any public distribution of the same except pursuant to a registration or exemption. 

        (b)   Private
Issue.    The Warrantholder understands (i) that the Preferred Stock issuable upon exercise of this Warrant is not
registered under the 1933 Act or qualified under applicable state securities laws on the ground that the issuance contemplated by this Warrant Agreement will be exempt from the registration and
qualifications requirements thereof, and (ii) that the Company's reliance on such exemption is predicated on the representations set forth in this Section 10. 

        (c)   Disposition
of Warrantholder's Rights.    In no event will the Warrantholder make a disposition of any of its rights to acquire
Preferred Stock or Preferred Stock issuable upon exercise of such rights unless and until it (i) shall have notified the Company of the proposed disposition, and (ii) if requested by the
Company, it shall have furnished the Company with an opinion of counsel (which counsel may either be inside or outside counsel to the Warrantholder) satisfactory to the Company and its counsel to the
effect that (A) appropriate action necessary for compliance with the 1933 Act has been taken, or (B) an exemption from the registration requirements of the 1933 Act is available.
Notwithstanding the foregoing, the restrictions imposed upon the transferability of any of its rights to acquire Preferred Stock or Preferred Stock issuable on the exercise of such rights do not apply
to transfers from the beneficial owner of any of the aforementioned securities to its nominee or from such nominee to its beneficial owner, and shall terminate as to any particular share of Preferred
Stock when (1) such security shall have been effectively registered under the 1933 Act and sold by the holder thereof in 

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accordance
with such registration or (2) such security shall have been sold without registration in compliance with Rule 144 under the 1933 Act, or (3) a letter shall have been
issued to the Warrantholder at its request by the staff of the Securities and Exchange Commission or a ruling shall have been issued to the Warrantholder at its request by such Commission stating that
no action shall be recommended by such staff or taken by such Commission, as the case may be, if such security is transferred without registration under the 1933 Act in accordance with the conditions
set forth in such letter or ruling and such letter or ruling specifies that no subsequent restrictions on transfer are required. Whenever the restrictions imposed hereunder shall terminate, as
hereinabove provided, the Warrantholder or holder of a share of Preferred Stock then outstanding as to which such restrictions have terminated shall be entitled to receive from the Company, without
expense to such holder, one or more new certificates for the Warrant or for such shares of Preferred Stock not bearing any restrictive legend. 

        (d)   Financial
Risk.    The Warrantholder has such knowledge and experience in financial and business matters as to be capable of
evaluating the merits and risks of its investment, and has the ability to bear the economic risks of its investment. 

        (e)   Risk
of No Registration.    The Warrantholder understands that if the Company does not register with the Securities and Exchange
Commission pursuant to Section 12 of the 1934 Act (the "1934 Act"), or file reports pursuant to Section 15(d), of the 1934 Act", or if a registration statement covering the securities
under the 1933 Act is not in effect when it desires to sell (i) the rights to purchase Preferred Stock pursuant to this Warrant Agreement, or (ii) the Preferred Stock issuable upon
exercise of the right to purchase, it may be required to hold such securities for an indefinite period. The Warrantholder also understands that any sale of its rights of the Warrantholder to purchase
Preferred Stock or Preferred Stock which might be made by it in reliance upon Rule 144 under the 1933 Act may be made only in accordance with the terms and conditions of that Rule. 

        (f)    Accredited
Investor.    Warrantholder is an "accredited investor" within the meaning of the Securities and Exchange
Rule 501 of Regulation D, as presently in effect. 

11.   TRANSFERS.  

        Subject to the terms and conditions contained in Section 10 hereof, this Warrant Agreement and all rights hereunder are transferable in whole or in part by
the Warrantholder and any successor transferee, provided, however, in no event shall the number of transfers of the rights and interests in all of the Warrants exceed three (3) transfers. The
transfer shall be recorded on the books of the Company upon receipt by the Company of a notice of transfer in the form attached hereto as Exhibit III (the "Transfer Notice"), at its principal
offices and the payment to the Company of all transfer taxes and other governmental charges imposed on such transfer and subject to the transferee agreeing in writing to be subject to the terms
hereof. 

12.   MISCELLANEOUS.  

        (a)   Effective
Date.    The provisions of this Warrant Agreement shall be construed and shall be given effect in all respects as if it
had been executed and delivered by the Company on the date hereof. This Warrant Agreement shall be binding upon any successors or assigns of the Company. 

        (b)   Attorney's
Fees.    In any litigation, arbitration or court proceeding between the Company and the Warrantholder relating hereto,
the prevailing party shall be entitled to attorneys' fees and expenses and all costs of proceedings incurred in enforcing this Warrant Agreement. 

        (c)   Governing
Law.    This Warrant Agreement shall be governed by and construed for all purposes under and in accordance with the laws
of the State of Illinois. 

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

        (e)   Notices.    Any
notice required or permitted hereunder shall be given in writing and shall be deemed effectively given upon
personal delivery, facsimile transmission (provided that the original is sent by personal delivery or mail as hereinafter set forth) or seven (7) days after deposit in the United States mail,
by registered or certified mail, addressed (i) to the Warrantholder at 6111 North River Road, Rosemont, Illinois 60018, attention: James Labé, Venture Group, cc: Legal
Department, attn: General Counsel, (and/or, if by facsimile, (847) 518-5465 and (847)518-5088) and (ii) to the Company at 270-B Littlefield Avenue,
South San Francisco, CA 94080, attention: and/or if by facsimile, (415) 827-8690 such other address as any such party may subsequently designate by written notice to the other
party. 

        (f)    Remedies.    In
the event of any default hereunder, the non-defaulting party may proceed to protect and enforce its
rights either by suit in equity and/or by action at law, including but not limited to an action for damages as a result of any such default, and/or an action for specific performance for any default
where Warrantholder will not have an adequate remedy at law and where damages will not be readily ascertainable. The Company expressly agrees that it shall not oppose an application by the
Warrantholder or any other person entitled to the benefit of this Agreement requiring specific performance of any or all provisions hereof or enjoining the Company from continuing to commit any such
breach of this Agreement. 

        (g)   No
Impairment of Rights.    The Company will not, by amendment of its Charter or through any other means, avoid or seek to avoid
the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be
necessary or appropriate in order to protect the rights of the Warrantholder against impairment. 

        (h)   Survival.    The
representations, warranties, covenants and conditions of the respective parties contained herein or made pursuant
to this Warrant Agreement shall survive the execution and delivery of this Warrant Agreement. 

        (i)    Severability.    In
the event any one or more of the provisions of this Warrant Agreement shall for any reason be held invalid,
illegal or unenforceable, the remaining provisions of this Warrant Agreement shall be unimpaired, and the invalid, illegal or unenforceable provision shall be replaced by a mutually acceptable valid,
legal and enforceable provision, which comes closest to the intention of the parties underlying the invalid, illegal or unenforceable provision. 

        (j)    Amendments.    Any
provision of this Warrant Agreement may be amended by a written instrument signed by the Company and by the
Warrantholder. 

        (k)   Additional
Documents.    The Company, upon execution of this Warrant Agreement, shall provide the Warrantholder with certified
resolutions with respect to the representations, warranties and covenants set forth in subparagraphs (a) through (d), (f) and (g) of Section 9 above. If the purchase price
for the Leases referenced in the preamble of this Warrant Agreement exceeds $1,000,000, the Company will also provide Warrantholder with an opinion from the Company's counsel with respect to those
same representations, warranties and covenants. The Company shall also supply such other documents as the Warrantholder may from time to time reasonably request. 

8

 

        IN WITNESS WHEREOF, the parties hereto have caused this Warrant Agreement to be executed by its officers thereunto duly authorized as of
the Effective Date. 

	 	 	Company: ADVANCED MEDICINE, INC.
	

 	
 	

By:	
 	

/s/  JAMES TANANBAUM      

	 	 	Title:	 	PRESIDENT AND CEO
	

 	
 	

Warrantholder: COMDISCO, INC.
	

 	
 	

By:	
 	

/s/  JAMES P. LABE      

	 	 	Title:	 	JAMES P. LABE, PRESIDENT,

COMDISCO VENTURES DIVISION

9

 
 
 

EXHIBIT I
  
  NOTICE OF EXERCISE    
    

	To:
	Theravance, Inc.
F.K.A. Advanced Medicine, Inc.

	(1)
	The
undersigned Warrantholder hereby elects to purchase 4,000 shares of the Series A Preferred Stock of Theravance, Inc. pursuant to the terms of the Warrant Agreement
dated the 7th day of May, 1997 (the "Warrant Agreement") between Advanced Medicine, Inc. and the Warrantholder, and tenders herewith payment of the purchase price for such shares
in full, together with all applicable transfer taxes, if any.

	(2)
	In
exercising its rights to purchase the Series A Preferred Stock of Theravance, Inc., the undersigned hereby confirms and acknowledges the investment representations
and warranties made in Section 10 of the Warrant Agreement.

	(3)
	Please
issue a certificate or certificates representing said shares of Series A Preferred Stock in the name of the undersigned or in such other name as is specified below. 

	Comdisco Ventures Fund A, LLC
 (Name)	 	 
	

52 Waltham Street, Lexington, MA 02421
 (Address)	
 	

 
	

Warrantholder: Comdisco Ventures Fund A, LLC Successor in interest to Comdisco, Inc.
	

By:	
 	

/s/
	
 	

 
	

Title:	
 	

General Partner
	
 	

 
	

Date:	
 	

5/3/04
	
 	

 

10

 
 
 

EXHIBIT II
  
  ACKNOWLEDGEMENT OF EXERCISE    
    

        The undersigned                         , hereby
acknowledge receipt of the "Notice of Exercise" from Comdisco, Inc., to purchase
             shares of the Series          Preferred Stock of
                   , pursuant to the
terms of the Warrant Agreement, and further acknowledges that              shares remain subject to purchase under the terms of the Warrant Agreement. 

	 	 	Company:
	

 	
 	

By:	
 	

    

	

 	
 	

Title:	
 	

    

	

 	
 	

Date:	
 	

    

11

 
 
 

EXHIBIT III
  
  TRANSFER NOTICE    
    

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

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

	    
 (Please Print)	 	 
	

whose address is	

    
	
 	

 
	

 	

    
	
 	

 
	

 	

Dated:	

    
	
 	

 
	

 	

Holder's Signature:	

    
	
 	

 
	

 	

Holder's Address:	

    
	
 	

 
	

 	

    
	
 	

 
	

Signature Guaranteed:	

    
	
 	

 

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

12

QuickLinks

Exhibit 10.26

WARRANT AGREEMENT

EXHIBIT I NOTICE OF EXERCISE

EXHIBIT II ACKNOWLEDGEMENT OF EXERCISE

EXHIBIT III TRANSFER NOTICE

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